Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies:

Concentration Risk, Credit Risk, Policy

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to credit risk, consist of cash equivalents and accounts receivable.  The Company’s policy is to limit the amount of credit exposure to any one financial institution.  The Company places investments with financial institutions evaluated as being creditworthy, or investing in short-term money market which are exposed to minimal interest rate and credit risk.  Cash balances are maintained with several banks.  Certain operating accounts may exceed the Federal Deposit Insurance Corporation (FDIC) limits.

The Company sells its products to customers involved in a variety of industries including information technology, medical devices and diagnostic systems, industrial controls and instrumentation and retail systems.  While the Company does not require collateral from its customers, it does perform continuing credit evaluations of its customers’ financial condition.

Earnings Per Share, Policy

LOSS PER SHARE

Loss per share is computed on the basis of the weighted average number of shares and common stock equivalents outstanding during the period.  In the calculation of diluted loss per share, shares outstanding are adjusted to assume conversion of the Company’s non-interest bearing convertible stock and exercise of options as if they were dilutive.  In the calculation of basic loss per share, weighted average numbers of shares outstanding are used as the denominator.

The Company had net loss allocable to common stockholders for the three and nine months ended September 30, 2015 and 2014.  Loss per share is computed as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Numerator:
Net loss available to common shareholders	$	(1,440,000	)	$	(905,000	)	$	(2,756,000	)	$	(3,068,000	)
Denominator:
Weighted average shares used to compute net loss available to common shareholders per common share basic and dilutive		3,587,000			3,587,000			3,587,000			3,587,000
Basic and dilutive net loss per share to common shareholder	$	(0.40	)	$	(0.25	)	$	(0.77	)	$	(0.86	)

All options outstanding to purchase shares of common stock and shares of common stock issuable on the assumed conversion of the eligible preferred stock were excluded from the diluted loss per common share calculation for the three and nine months ended September 30, 2015 and 2014, as the inclusion of these options and shares would have been antidilutive.