NOTE 13 – CONCENTRATIONS

Concentrations Of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits. The Company places its cash in banks at levels that, at times, may exceed federally insured limits. On December 31, 2021, the Company had approximately $132,000 of cash in excess of FDIC limits of $250,000. The Company has not experienced any losses in such accounts through December 31, 2021.

Geographic Concentrations of Sales

During the year ended December 31, 2021, all sales were in the United States. For the year ended December 31, 2020, approximately 40.1% of all sales were in the United States, 21.5% of sales were from one customer based in India, and 18.6% of sales were from one customer based in the Philippines. No other geographical area accounting for more than 10% of total sales during the year ended December 31, 2020.

Customer Concentrations

For the year ended December 31, 2021, three customers accounted for approximately 44.2% of total sales (17.4%, 15.3%, and 11.5%, respectively). For the year ended December 31, 2020, two customers accounted for approximately 40.1% of total sales (18.6% and 21.5%, respectively). On December 31, 2021, one customer accounted for 21.4% of the total accounts receivable balance. On December 31, 2020, one customer accounted for 64.0% of the total accounts receivable balance.

Vendor concentrations

Generally, the Company purchases substantially all of its inventory from five suppliers. The loss of these suppliers may have a material adverse effect on the Company’s consolidated results of operations and financial condition. However, the Company believes that, if necessary, alternate vendors could supply similar products in adequate quantities to avoid material disruptions to operations.