7. Customer and Supplier Concentrations

A significant portion of the Company’s revenue is derived from a limited number of customers. The customers providing 10 percent or more of the Company’s revenue for the periods presented below are listed here:


	Three Months Ended July 31,
	2011					2010
			(In thousands)
Total revenue	$	1,926		100	%	$	12,783	100	%


Customer concentration:
Dell Inc. and affiliates	$	314		16	%	$	278	2	%
Targus Group International, Inc.		—		—			10,016	78	%
Lenovo Information Products Co., Ltd.		1,593		83	%		2,446	19	%

	$	1,907		99	%	$	12,740	99	%


	Three Months Ended July 31,
	2011					2010
			(In thousands)
Total revenue	$	4,876		100	%	$	20,297	100	%


Customer concentration:
Dell Inc. and affiliates	$	685		14	%	$	278	1	%
Targus Group International, Inc.		1,174		24	%		15,654	77	%
Lenovo Information Products Co., Ltd.		2,947		60	%		4,251	21	%

	$	4,806		98	%	$	20,183	99	%

In March 2009, the Company entered into the Targus Agreement with Targus. The Company began shipments to Targus under the Targus Agreement during the second quarter of fiscal 2010. On January 25, 2011, Targus provided the Company with written notification of non-renewal of the Targus Agreement. As such, there is no revenue from Targus in the second quarter of fiscal 2012 and there can be no assurance that any revenue will be generated from Targus in the future.

The customers comprising 10 percent or more of the Company’s gross accounts receivable due from customers at either July 31, 2011 or January 31, 2011 are listed below (in thousands):


	July 31, 2011				January 31, 2011
Total gross accounts receivable due from customers	$	2,155	100	%	$	3,603	100	%


Customer concentration:
Dell Inc and affiliates		329	15	%		434	12	%
Targus Group International, Inc.		119	6	%		471	13	%
Lenovo Information Products Co., Ltd.		1,696	79	%		2,683	74	%

	$	2,144	100	%	$	3,588	99	%

The suppliers comprising 10 percent or more of the Company’s gross accounts receivable due from suppliers at either July 31, 2011 or January 31, 2011 are listed below (in thousands).


	July 31, 2011				January 31, 2011
Total gross accounts receivable due from suppliers	$	819	100	%	$	791	100	%


Customer concentration:
Edac Power Electronics Co.Ltd.	$	532	65	%	$	532	67	%
Flextronics Electronics		125	15	%		99	13	%
Zheng Ge Electrical Co., Ltd.		122	15	%		122	15	%

	$	779	95	%	$	753	95	%

A significant portion of our inventory purchases is derived from a limited number of contract manufacturers (“CM’s”) and other suppliers. The loss of one or more of our significant CM’s or suppliers could materially adversely affect our operations. For the three and six months ended July 31, 2011 two of our CM’s provided an aggregate of 50 and 88 percent, respectively, of total product costs. For the three months ended July 31, 2010 three of our CM’s provided an aggregate of 95 percent of total product costs. For the six months ended July 31, 2010 two of our CM’s provided an aggregate of 88 percent of total product costs.

At July 31, 2011, approximately $3.5 million or 94 percent, of the Company’s accounts payable of $3.7 million was payable to three contract manufacturers, only one of which provided the majority of the product costs for the three and six months ended July 31, 2011. At July 31, 2011 and January 31, 2011, approximately $1.1 million or 30 percent and 21 percent, respectively, of the Company’s accounts payable was payable to Chicony Power Technology Co., Ltd., (“Chicony”) the manufacturer of the Bronx product which was subject to the Recall. At present we are in litigation with Chicony (see Note 11). At July 31, 2011 and January 31, 2011, approximately $2.0 million and $2.6 million or 53 percent and 51 percent, respectively, of the Company’s accounts payable was payable to Edac Power Electronics Co. Ltd., the manufacturer of the Manhattan product sold to Targus. At the present time we are in negotiations with this supplier to create a long-term payment plan.

Additionally, at July 31, 2011, approximately $0.7 million or 70 percent of total uninvoiced materials and services of $1.0 million, included in accrued liabilities were payable to three of our contract manufacturers. At January 31, 2011 approximately $729,000, or 45 percent, of total uninvoiced materials and services of $1.6 million, included in accrued liabilities were payable to Flextronics Electronics and Zheng Ge Electrical Co., Ltd.