Note 2 - Concentration of Credit Risk and Major Customers

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

NOTE

2.

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. With regard to cash, we maintain our excess cash balances in checking accounts at primarily

two

financial institutions,

one

in the United States and

one

in China. The account in the United States

may

at times exceed federally insured limits. Of the

$1,694

in cash at

September 30, 2020,

approximately

$244

was held at banks located in China. We grant credit to customers in the normal course of business and do

not

require collateral on our accounts receivable.

Our largest customer has

two

divisions that together accounted for

10%

or more of our net sales during the

three

and

nine

months ended

September 30, 2020

and

2019.

One division accounted for approximately

20%

and

21%

of net sales for the

three

and

nine

months ended

September 30, 2020,

respectively, and approximately

19%

and

21%

for the

three

and

nine

months ended

September 30, 2019,

respectively. The other division accounted for approximately

3%

of net sales for both the

three

months and

nine

months ended

September 30, 2020,

and approximately

3%

net sales for the

three

and

nine

months ended

September 30, 2019.

Together they accounted for approximately

23%

and

24%

of net sales for the

three

and

nine

months ended

September 30, 2020,

respectively, and approximately

22%

and

24%

of net sales for both the

three

and

nine

months ended

September 30, 2019,

respectively. Accounts receivable from the customer at

September 30, 2020

and

December 31, 2019

represented approximately

37%

and

36%

of our total accounts receivable, respectively.

Export sales represented approximately

9%

of net sales for both the

three

months ended

September 30, 2020

and

2019.

Export sales represented

10%

and

15%

of net sales for the

nine

months ended

September 30, 2020

and

2019,

respectively.