Note 15 - Business and Credit Concentrations

9 Months Ended

Sep. 30, 2011

Concentration Risk Disclosure [Text Block]

15.   Business and Credit Concentrations

We are currently dependent on three customers, which collectively comprised approximately 24% of net sales for the three months ended September 30, 2011.  One customer individually represented greater than 5% but less than 10% and one customer individually represented greater than 10% but less than 15% of net sales and no customer represented greater than 15% of net sales for the three months ended September 30, 2011.  For the three months ended September 30, 2010, three customers collectively comprised approximately 26% of net sales.  Of these, two customers individually represented greater than 5% but less than 10% and one customer individually represented greater than 10% but less than 20% of net sales and no customer represented greater than 20% of net sales for the three months ended September 30, 2010. 

For the nine months ended September 30, 2011, we were dependent on two customers, which collectively comprised approximately 26% of net sales.  Of these, one customer individually represented greater than 5% but less than 10% of net sales for the period, and one customer represented greater than 10% but less than 20% of net sales and no customer represented greater than 20% of net sales.  For the nine months ended September 30, 2010, two customers collectively comprised approximately 25% of net sales.  Of these, one customer individually represented greater than 5% but less than 10% of net sales for the period, and one customer represented greater than 10% but less than 20% of net sales and no customer represented greater than 20% of net sales.

Additionally, we have one customer with an outstanding accounts receivable balance that is greater than 10% but less than 20% of total accounts receivable at September 30, 2011.  The loss of this individual customer or a combination of customers or a significant impairment or reduction in such customers' business, including, but not limited to, as a result of the current economic climate, would have a material adverse effect on consolidated net sales, results of operations, financial condition and competitive market position of the Company.

A significant portion of our inventory purchases are from a small group of suppliers in China; approximately 35% of our total inventory purchased for the nine months ended September 30, 2011 was from two Chinese suppliers.  Many of our industry suppliers are located in China.  We do not anticipate any changes in the relationships with our suppliers.  If such change were to occur, we have alternative sources available; however, a loss of our primary supplier or significant impairment to its business, including, but not limited to, due to the current economic climate, could adversely affect our business during the period in which we would have to find an alternative source for such supplies.