Note 7. Revenue and Major Customers

9 Months Ended

Sep. 30, 2015

Notes

Note 7. Revenue and Major Customers

Note 7.            Revenue and Major Customers

            The Company’s largest customer accounted for approximately 30% and 20% of revenues for the nine months ended September 30, 2015 and 2014, respectively, and approximately 25% and 30% for the three months ended September 30, 2015 and 2014, respectively.  For the nine months ended September 30, 2015 and 2014, the top three customers accounted for approximately 74% and 47%, respectively, of the Company’s revenues.  The accounts receivable balance due (which are unsecured) for these three Florida customers at September 30, 2015 and December 31, 2014 was approximately $59,000 and $132,000, respectively.  Florida operations accounted for approximately 96% and 97% of consolidated revenue during the nine months ended September 30, 2015 and 2014, respectively.

A substantial portion of the Company's revenue is derived from services provided under contracts and agreements with existing licensees.  Some of these contracts, especially those contracts with large municipalities, provide for termination of the contract by the customer after giving relatively short notice (in some cases as little as ten days).  In addition, some of these contracts contain liquidated damages clauses, which may or may not be enforceable in the event of early termination of the contracts.  If one or more of these contracts are terminated prior to the expiration of its term, and the Company is not able to replace revenues from the terminated contract or receive liquidated damages pursuant to the terms of the contract, the lost revenue could have a material and adverse effect on its business and financial condition.