|12 Months Ended|
Dec. 31, 2020
|Risks and Uncertainties [Abstract]|
NOTE 11: CONCENTRATIONS
Concentration of Purchase Order Financing
The Company used a third-party financing company for the years ended December 31, 2020 and 2019, respectively, which provided letters of credit to vendors for a fee against the purchase orders received by the Company for sale of products to its customers. The letters of credit were issued to the vendors to manufacture Company’s products pursuant to the purchase orders received by the Company.
Concentration of Customers
The Company sold its products to four customers that accounted for approximately 70% and 69% of the total revenues for the years ended December 31, 2020 and 2019, respectively. The same four customers accounted for 68% and 78% of the total accounts receivable balance due to the Company at December 31, 2020 and 2019, respectively.
Concentration of Suppliers
The Company purchased products from four vendors for the year ended December 31, 2020 that accounted for approximately 71% of its total cost of goods sold.
The Company purchased products from four vendors for the year ended December 31, 2019 that accounted for approximately 76% of its total cost of goods sold.
Concentration of Credit Risk
The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2020. The Company’s bank balances exceeded FDIC insured amounts at times during the years ended December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, the Company’s bank balance exceeded the FDIC insured amounts by $1,944,850 and $0 respectively.
Geographical distribution of net revenue consisted of the following for the years ended December 31, 2020 and 2019, respectively, as follows:
The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef