NOTE 4 — Significant Balance Sheet Components

The following table presents the components of the Company’s receivables:

 Schedule of Accounts Receivable

The Company has non-trade receivables from a manufacturing vendor resulting from the sale of components to this vendor who manufactures and assembles final products for the Company.

The Company determines the probability of default for each pool of receivables with similar risk characteristics. The probability of loss is applied to the value of the receivables and an allowance for potential credit losses is recorded with the offset to credit loss expense.

Trade receivables from the customer that purchased white label tablets from the Company accounts for 31% and 69%, respectively, of accounts receivable, net, at March 31, 2024 and December 31, 2023. One additional customer that purchases white label phones from the Company accounts for 44% of accounts receivable, net, at March 31, 2024 and a separate customer accounts for 15% of accounts receivable, net, at December 31, 2023. In October 2023, the Company stopped sales of the white label tablets to its tablet customer as the product reached the end of its life cycle. The tablet customer had a receivable due to the Company of $17,443 at December 31, 2023. In February 2024, an agreement was executed that transferred $11,308 of the receivables to the manufacturer of the tablets in exchange for relieving the Company of a $11,308 accounts payable liability.

The following table presents the components of the Company’s inventory:

 Schedule of Inventory

The Company purchases raw materials in bulk to obtain a lower price. The raw materials are resold to third-party manufacturers.

Distributor returns allowance

The Company records reductions to Cost of Revenues related to future distributor product returns based on the Company’s expectation.

The following table presents the components of the Company’s other assets: 

 Schedule of Other Assets

The following table presents the components of the Company’s accrued liabilities: 

 Schedule of Accrued Expenses