Concentration of Credit Risk

12 Months Ended

Dec. 31, 2015

Concentration Risk Disclosure [Text Block]

Note 9 – Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash deposits and trade accounts receivable.

The Company maintains cash balances at several banks located in the northeastern United States of which, at times, may exceed insurance limits and expose the Company to credit risk. As part of its cash management process, the Company periodically reviews the relative credit standing of these banks.

Credit risk with respect to trade accounts receivable was concentrated with two of the Company’s customers in both 2015 and 2014, respectively. These customers accounted for approximately 38% and 49% of the Company’s outstanding trade accounts receivable at December 31, 2015 and 2014, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition, uses credit insurance and requires collateral, such as letters of credit, to mitigate its credit risk. The deterioration of the financial condition of one or more of its major customers could adversely impact the Company’s operations. From time to time where the Company determines that circumstances warrant, such as when a customer agrees to commit to a large blanket purchase order, the Company extends payment terms beyond its standard payment terms.

The Company’s largest customer accounted for approximately 16% of the Company’s sales in each of the years ended December 31, 2015 and 2014, respectively. This customer accounted for approximately 16% and 26% of the Company’s outstanding trade accounts receivable at December 31, 2015 and 2014, respectively. A second customer accounted for approximately 11% of the Company’s sales in the year ended December 31, 2015. A third customer accounted for approximately 10% of the Company’s sales in the year ended December 31, 2015. A fourth customer accounted for approximately 16% of the Company’s sales in the year ended December 31, 2014. A fifth customer accounted for approximately 12% of the Company’s sales in the year ended December 31, 2014. A sixth customer accounted for approximately 26% and 23% of the Company’s trade accounts receivable at December 31, 2015 and 2014, respectively. The Company had sales outside the United States of approximately 3% and 4% in each of years ended December 31, 2015 and 2014, respectively.