Concentrations

3 Months Ended

Mar. 31, 2020

Concentration of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high credit quality financial institutions. The Company maintains its cash in bank deposit accounts, which customarily exceed federally insured limits. The Company has not experienced any losses in cash accounts for the three months ended March 31, 2020, and 2019.

As of March 31, 2020, Verizon Wireless (“Verizon”) exceeded 10% of the Company's accounts receivable. As of December 31, 2019, Verizon and Best Buy Co., Inc. (“Best Buy”) exceeded 10% of the balance of accounts receivable. The amount of accounts receivable for each of these customers are outlined as follows:


	March 31, 2020	December 31, 2019

Verizon	26%	24%
Best Buy	7%	14%

The Company began transitioning to a direct sales relationship with Verizon during the second half of 2018, which has continued to progress. Previous to the Company's direct sales relationship with Verizon, Verizon purchased the Company's products through Superior Communications, Inc.

Other than the customers noted in the table above, no other customer account balances exceeded 10% of accounts receivable as of March 31, 2020 and December 31, 2019. If one or more of the Company’s significant customers were to become insolvent or were otherwise unable to pay for the products provided, it could have a material adverse effect on the Company’s financial condition and results of operations.

Concentration of net sales

For the three months ended March 31, 2020, purchases by Verizon and Best Buy accounted for or exceeded 10% of net sales. For the three months ended March 31, 2019, purchases by Best Buy accounted for 10% of net sales. The amount of net sales for each of these customers are outlined as follows:


	For the Three Months Ended
	March 31, 2020	March 31, 2019

Verizon	24%	7%
Best Buy	10%	10%

For the three months ended March 31, 2020, and 2019, no other customers exceeded 10% of net sales.

Although the Company has contracts in place governing the relationships with its retail distribution customers (“retailers”), the contracts are not long-term and all the retailers generally purchase from the Company using purchase orders. As a result, these retailers generally may, with little or no notice or penalty, cease ordering and selling the Company’s products, or materially reduce their orders. If any of these retailers cease selling the Company’s products, slow their rate of purchase of its products, or decrease the number of products they purchase, the Company’s results of operations could be adversely affected.