Annual report pursuant to Section 13 and 15(d)

Entity Level Information

v3.23.1
Entity Level Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Entity Level Information

NOTE 14 —Entity Level Information

 

Segment Information—The Company operates in one reporting segment.

 

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the chief operating officer, in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level.

 

The following table summarizes the revenue by region based on ship-to destinations for the periods ended:

    2022     2021  
    For the Years Ended  
    December 31  
    2022     2021  
U.S.   $ 29,444     $ 42,356  
Canada and Latin America     8,975       9,401  
Europe and Middle East     1,202       1,142  
Asia Pacific     30,207       1,671  
Total revenues   $ 69,828     $ 54,570  

 

Long-lived assets located in the United States and Asia Pacific region were $6,861 and $2,370, and $168 and $534 as of December 31, 2022 and 2021, respectively.

 

 

The composition of revenues is as follows:

    2022     2021  
    For the Years Ended  
    December 31  
    2022     2021  
Product Sales   $ 69,797     $ 54,476  
Services     31       94  
Total revenues   $ 69,828     $ 54,570  

 

Concentrations of Credit Risk—The Company’s product revenues are concentrated in the technology industry, which is highly competitive and rapidly changing. Significant technological changes in the industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect the Company’s consolidated operating results. Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with high-quality, federally insured commercial banks in the United States and cash balances are in excess of federal insurance limits at December 31, 2022 and 2021. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling approximately $113 and $932 as of December 31, 2022 and 2021, respectively.

 

Receivables from our tablets customer accounted for 84% of total accounts receivable at December 31, 2022. The Company began selling tablets in the second half of 2022, and the payment cycle for tablets is much longer than the sale of device directly to carriers. The tablets are sold to a customer that imports the product to the U.S., and then is sold gain to another party that brands the product, and then the product is sold to a retailer. The longer time required to deliver the product to the end customer and the longer payment terms for the multiple transactions has resulted in higher accounts receivable balances for the Company’s tablet customer. The customer is making regular payments and the Company believes that the entire accounts receivable balance from the tablet customer is collectable, and that no reserve is required against the outstanding accounts receivable balance. As of December 31, 2021, one carrier customer accounted for 70% of the total accounts receivable balance.

 

Revenue from certain customers in 2022 and 2021 accounted for approximately the following percentage of total revenues:

 

   

For the Years Ended

December 31,

  
    2022     2021  
Customer A     42 %     23 %
Customer B     25 %     23 %
Customer C     9 %     22 %
Customer D     7 %     8 %
Total     83 %     76 %

 

The Company’s tablet customer accounted for 42% of the revenue for 2022. These tablet sales are expected to continue in 2023 and other data devices are being developed to add diversity the Company’s customers. The Company does not believe that the concentration of revenue with one customer creates a significant risk because the Company’s ODM model for tablets allows the Company to only order inventory after the Company has received a purchase commitment from the customer. Should the customer decrease future product orders, the Company can decrease inventory purchases without additional cost.