Note 8 - Concentrations of Credit Risk

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

8

–

Con

centrations of credit r

isk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high-credit quality financial institutions. At

July 31, 2020,

we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately

$14.0

million.

For the

three

months ending

July 31, 2020,

two

customers, both distributors, accounted for approximately

18%

and

13%

of net sales. These same

two

distributors accounted for

15%

and

12%,

respectively, of net sales for the

nine

months ending

July 31, 2020.

The

two

distributors had accounts receivable balances that accounted for

21%

and

14%,

respectively, of the total net accounts receivable balance at

July 31, 2020.

For the

three

months ending

July 31, 2019,

two

customers, a wireless carrier and

one

of the aforementioned distributors, accounted for approximately

35%

and

11%,

respectively, of net sales. This same wireless carrier and a different distributor accounted for approximately

19%

and

23%,

respectively, of net sales for the

nine

months ending

July 31, 2019.

At

July 31, 2019,

the wireless carrier and

one

of the distributors had accounts receivable balances that accounted for approximately

47%

and

11%,

respectively, of the total net accounts receivable balance. Although these customers have been on-going major customers of the Company, the written agreements with these customers do

not

have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.