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BUSINESS CONCENTRATIONS
3 Months Ended
Mar. 31, 2017
Risks and Uncertainties [Abstract]  
BUSINESS CONCENTRATIONS

NOTE 13 - BUSINESS CONCENTRATIONS

 

We purchase our products from several suppliers with approximately 100% and 95% of our purchases supplied from one vendor for the three months ended March 31, 2017 and 2016, respectively.

 

We sell our prescription prenatal vitamin products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. As a result of developments in the pharmaceutical industry that negatively affected independent pharmacies, including such pharmacies’ reliance on third party payors, in 2016, we identified that payment periods for our retail pharmacy distributors were becoming longer than in prior years. As a result, during the third quarter of 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and minimize business risk exposure to any one retail pharmacy. During the third quarter of 2016, we entered into new distribution agreements with our retail pharmacy distributors to effectuate this centralization which were effective September 1, 2016.

 

During the three months ended March 31, 2017, five customers each generated more than 10% of our total revenues and during the three months ended March 31, 2016 three customers each generated more than 10% of our total revenues. Revenue generated from five major customers combined accounted for approximately 72% of our recognized revenue for the three months ended March 31, 2017 and revenue generated from three major customers combined accounted for approximately 61% of our recognized revenue for the three months ended March 31, 2016. During the three months ended March 31, 2017, Pharmacy Innovations TX generated approximately $440,000 of our revenue, Pharmacy Innovations PA generated approximately $937,000 of our revenue, AmerisourceBergen generated approximately $526,000 of our revenue, Cardinal Health generated approximately $553,000 of our revenue and McKesson Corporation generated approximately $428,000 of our revenue. During the three months ended March 31, 2016, Woodstock Pharmaceutical and Compounding generated approximately $1,336,000 of our revenue; Medical Center Pharmacy generated approximately $680,000 of our revenue and Due West Pharmacy generated approximately $1,104,000 of our revenue.