Concentrations

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

Note 10. Concentrations

During the years ended December 31, 2012 and 2011, the Company’s sales were concentrated with a few large customers. Sales to two customers comprised 63% and 20% of total revenues and two customers accounted for 61% and 39% of gross accounts receivable, respectively. During the year ended December 31, 2011, sales to four customers comprised 52%, 16%, 16% and 10% of total revenues and two customers accounted for 62% and 37% of gross accounts receivable, respectively. The Company performs ongoing credit evaluations of certain customers’ financial condition and generally requires no collateral from its customers. The Company’s inventory purchases are concentrated with certain key vendors that produce components according to our engineering specifications. During the year ended December 31, 2012, 39% of purchases were concentrated with one vendor and during the year ended December 31, 2011, 16% of purchases were concentrated with one vendor.