Socket Mobile (SCKT) 10-Q 16 Nov 20 2020 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2020	Nov. 11, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Entity File Number	1-13810
Entity Registrant Name	Socket Mobile, Inc.
Entity Central Index Key	0000944075
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	39700 Eureka Drive
Entity Address, City or Town	Newark
Entity Address, State or Province	CA
Entity Address, Country	US
Entity Address, Postal Zip Code	94560
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,080,145

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenues	$ 4,108,738	$ 4,980,060	$ 11,044,448	$ 14,668,757
Cost of revenues	1,835,333	2,343,758	5,185,802	7,002,971
Gross profit	2,273,405	2,636,302	5,858,646	7,665,786
Operating expenses:
Research and development	680,797	1,015,051	2,420,945	2,906,271
Sales and marketing	658,265	785,295	2,148,221	2,312,305
General and administrative	485,465	706,485	1,741,311	2,052,882
Goodwill impairment charges	4,427,000		4,427,000
Total operating expenses	6,251,527	2,506,831	10,737,477	7,271,458
Operating income (loss)	(3,978,122)	129,471	(4,878,831)	394,328
Interest expense, net	(23,864)	(25,562)	(51,505)	(83,371)
Other income			70,000
Net income (loss) before income taxes	(4,001,986)	103,909	(4,860,336)	310,957
Income tax expense	(800)	(9,611)	(800)	(85,030)
Net income (loss)	$ (4,002,786)	$ 94,298	$ (4,861,136)	$ 225,927
Net income (loss) per share:
Basic	$ (0.62)	$ 0.02	$ (0.76)	$ 0.04
Diluted	$ (0.62)	$ 0.01	$ (0.76)	$ 0.04
Weighted average shares outstanding:
Basic	6,037,559	5,999,487	6,020,363	5,979,715
Diluted	6,037,559	6,317,270	6,020,363	6,236,673

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,774,845	$ 958,860
Accounts receivable, net	2,359,415	2,837,006
Inventories, net	3,362,314	3,178,908
Prepaid expenses and other current assets	317,043	312,127
Deferred cost on shipments to distributors	178,631	233,823
Total current assets	7,992,248	7,520,724
Property and equipment:
Machinery and office equipment	2,330,311	2,195,405
Computer equipment	1,339,065	1,336,445
Property and equipment, gross	3,669,376	3,531,850
Accumulated depreciation	(2,834,619)	(2,667,340)
Property and equipment, net	834,757	864,510
Goodwill		4,427,000
Other long-term assets	169,932	202,611
Deferred tax assets	5,506,934	5,506,934
Operating lease right-of-use assets	704,416	936,708
Total assets	15,208,287	19,458,487
Current liabilities:
Accounts payable and accrued expenses	2,014,944	2,084,848
Accrued payroll and related expenses	402,192	566,350
Deferred revenue on shipments to distributors	556,854	611,029
Short term portion of deferred service revenue	25,991	32,900
Bank lines of credit		1,412,449
Notes payable – current portion	682,850	333,333
Subordinated convertible notes payable, net of discount	168,645
Subordinated convertible notes payable, net of discount-related party	1,264,840
Operating lease – current portion	471,006	419,288
Finance lease – current portion		8,291
Total current liabilities	5,587,322	5,468,488
Long-term portion of operating lease	384,180	715,062
Long-term portion of deferred service revenue	29,194	40,711
Long-term portion of notes payable	375,850
Total liabilities	6,376,546	6,224,261
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value: Authorized – 20,000,000 shares, Issued and outstanding – 6,050,655 shares at September 30, 2020 and 6,017,674 shares at December 31, 2019	6,051	6,018
Additional paid-in capital	61,525,589	61,066,971
Accumulated deficit	(52,699,899)	(47,838,763)
Total stockholders’ equity	8,831,741	13,234,226
Total liabilities and stockholders’ equity	$ 15,208,287	$ 19,458,487

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
LIABILITIES AND STOCKHOLDERS' EQUITY
Common stock par value	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	6,050,655	6,017,674
Common stock, shares outstanding	6,050,655	6,017,674

Stockholders' Equity (Unaudited

Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2018	$ 5,883	$ 60,523,901	$ (48,125,349)	$ 12,404,435
Beginning Balance (in shares) at Dec. 31, 2018	5,883,109
Restricted stock grants	116	(116)
Restricted stock grants (in shares)	$ 116,050			116,050
Net gain (loss)			11,839	11,839
Ending Balance at Mar. 31, 2019	$ 5,999	$ 60,645,750	(48,113,510)	12,538,239
Ending Balance (in shares) at Mar. 31, 2019	5,999,159
Beginning Balance at Dec. 31, 2018	$ 5,883	60,523,901	(48,125,349)	$ 12,404,435
Beginning Balance (in shares) at Dec. 31, 2018	5,883,109
Restricted stock grants				124,285
Net gain (loss)				$ 225,927
Ending Balance at Sep. 30, 2019	$ 6,000	60,916,306	(47,899,422)	13,022,884
Ending Balance (in shares) at Sep. 30, 2019	5,999,653
Beginning Balance at Mar. 31, 2019	$ 5,999	60,645,750	(48,113,510)	12,538,239
Beginning Balance (in shares) at Mar. 31, 2019	5,999,159
Net gain (loss)			119,790	119,790
Ending Balance at Jun. 30, 2019	$ 5,999	60,782,785	(47,993,720)	12,795,064
Ending Balance (in shares) at Jun. 30, 2019	5,999,159
Stock options exercised	$ 1	513		514
Stock options exercised (in shares)	494
Stock-based compensation		133,008		133,008
Net gain (loss)			94,298	94,298
Ending Balance at Sep. 30, 2019	$ 6,000	60,916,306	(47,899,422)	13,022,884
Ending Balance (in shares) at Sep. 30, 2019	5,999,653
Beginning Balance at Dec. 31, 2019	$ 6,018	61,066,971	(47,838,763)	13,234,226
Beginning Balance (in shares) at Dec. 31, 2019	6,017,674
Repurchase of common stock	$ (5)	(8,491)		8,496
Repurchase of common stock (in shares)	(4,967)
Cancellation of restricted stocks	$ (3)	3
Cancellation of restricted stocks (in shares)	(3,200)
Net gain (loss)			(90,327)	(90,327)
Ending Balance at Mar. 31, 2020	$ 6,010	61,190,548	(47,929,090)	13,267,468
Ending Balance (in shares) at Mar. 31, 2020	6,009,507
Beginning Balance at Dec. 31, 2019	$ 6,018	61,066,971	(47,838,763)	$ 13,234,226
Beginning Balance (in shares) at Dec. 31, 2019	6,017,674
Restricted stock grants				389,680
Stock-based compensation				$ 392,985
Net gain (loss)				(4,861,136)
Ending Balance at Sep. 30, 2020	$ 6,051	61,525,589	(52,699,899)	8,831,741
Ending Balance (in shares) at Sep. 30, 2020	6,050,655
Beginning Balance at Mar. 31, 2020	$ 6,010	61,190,548	(47,929,090)	13,267,468
Beginning Balance (in shares) at Mar. 31, 2020	6,009,507
Cancellation of restricted stocks	$ (1)	472		471
Cancellation of restricted stocks (in shares)	(398)
Stock-based compensation		131,369		131,369
Net gain (loss)			(768,023)	(768,023)
Ending Balance at Jun. 30, 2020	$ 6,009	61,322,389	(48,697,113)	12,631,285
Ending Balance (in shares) at Jun. 30, 2020	6,009,109
Stock options exercised	$ 42	73,649		73,691
Stock options exercised (in shares)	41,546
Stock-based compensation		129,551		129,551
Net gain (loss)			(4,002,786)	(4,002,786)
Ending Balance at Sep. 30, 2020	$ 6,051	$ 61,525,589	$ (52,699,899)	$ 8,831,741
Ending Balance (in shares) at Sep. 30, 2020	6,050,655

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) (USD $) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating activities
Net income (loss)	$ (4,861,136)	$ 225,927
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation	392,985	392,008
Depreciation and amortization	436,970	333,451
Deferred tax expenses (benefits)		112,068
Goodwill impairment charges	4,427,000
Changes in operating assets and liabilities:
Accounts receivable	477,591	(695,032)
Inventories	(183,406)	(255,910)
Prepaid expenses and other current assets	(4,916)	(98,477)
Accounts payable and accrued expenses	(69,904)	256,535
Accrued payroll and related expenses	(164,158)	122,151
Net deferred revenue on shipments to distributors	1,017	132,797
Deferred service revenue	(18,426)	14,807
Net change in operating lease	(46,872)	(33,160)
Net cash provided by operating activities	386,745	507,165
Investing activities
Purchases of equipment	(374,538)	(437,083)
Net cash used in investing activities	(374,538)	(437,083)
Financing activities
Payments on finance leases	(8,291)	(11,655)
Common stock repurchase and related expenses	(8,025)
Proceeds from borrowings under bank line of credit agreement	5,630,000	13,038,000
Repayments of borrowings under bank line of credit agreement	(7,042,449)	(12,925,817)
Repayments of bank term loan	(333,333)	(375,000)
Proceeds from notes payable	1,208,700
Repayments of notes payable	(150,000)
Proceeds from subordinated convertible notes payable, net of discount	168,645
Proceeds from subordinated convertible notes payable, net of discount-related party	1,264,840
Stock options exercised	73,691	514
Net cash (used in) provided by financing activities	803,778	(273,958)
Net increase (decrease) in cash and cash equivalents	815,985	(203,876)
Cash and cash equivalents at beginning of period	958,860	1,084,991
Cash and cash equivalents at end of period	1,774,845	881,115
Supplemental disclosure of cash flow information
Cash paid for interest	$ 42,403	$ 81,060

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Basis of Presentation	NOTE 1 Basis of Presentation The accompanying unaudited condensed financial statements of Socket Mobile, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. While the COVID-19 pandemic has impacted the Company’s reported results for the quarter and nine months ended September 30, 2020, the long-term impact that the pandemic may have on the Company’s business, results of operations, financial position or cash flows remain uncertain. The Company may experience constrained supply or slowed customer demand that could materially adversely impact the Company’s business, results of operations and overall financial performance in future periods. Furthermore, the impacts of a potential worsening of the economic conditions and the continued volatility in the financial markets remain unknown. See “Item 1A. Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on the Company’s business. The Company evaluates and addresses the impacts of the COVID-19 pandemic frequently.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Summary of Significant Accounting Policies	NOTE 2 — Summary of Significant Accounting Policies The Company’s accounting policies are set forth in “Note 1. Organization and Summary of Significant Accounting Policies” of the Company’s Notes to Financial Statements included in the 2019 Annual Report on Form 10-K. Included herein are certain updates to those policies. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At September 30, 2020 and December 31, 2019, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity. Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 “Revenue from Contracts with Customers” and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At September 30, 2020, the deferred revenue and deferred cost on shipments to distributors were $479,299 and $178,631, respectively, compared to $611,029 and $233,823, respectively, at December 31, 2019. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company’s Statements of Operations. The most significant impact was the recognition of operating lease right-of-use assets and liabilities for the office space lease. Goodwill Review In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU) 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The Company tests its goodwill for impairment annually as of September 30th or more frequently when events or circumstances indicate that the carrying value of the Company’s single reporting unit more likely than not exceeds its fair value. As of September 30, 2020, the Company experienced a triggering event due to a drop in its stock price, which had been negatively impacted by the economic downturn caused by COVID-19 pandemic and performed a quantitative analysis for potential impairment of its goodwill. The Company's fair value measurement approach combines the income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to its present value, and market valuation technique. The income valuation technique uses estimates and assumptions including the projected future cash flows, discount rate reflecting the risk attributable to the Company, perpetual growth rate, and projected future economic and market conditions. Under the market approach, the principal assumption included an estimate for a control premium. As a result of the analysis, the Company determined the carrying value exceeded its fair value and recorded a non-cash goodwill impairment charge of $4,427,000 at September 30, 2020. No income tax benefit related to this goodwill impairment charge is recorded at September 30, 2020. Recently Issued Financial Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption.

Note 3 - Inventories

Note 3 - Inventories	9 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
Inventories	NOTE 3 — Inventories Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Raw materials and sub-assemblies $ 3,661,671 $ 3,767,588 Finished goods 398,282 241,681 Inventory reserves (697,639 ) (830,361 ) Inventory, net $ 3,362,314 $ 3,178,908

Note 4 - Bank Financing Arrange

Note 4 - Bank Financing Arrangements	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Bank Financing Arrangements	NOTE 4 — Bank Financing Arrangements Sixth Financing Agreement On June 14, 2019, the Company entered into the Sixth Amended and Restated Business Financing Agreement with the Bank. The Bank waived the default which occurred for the month ended April 30, 2019 when the Company’s Asset Coverage Ratio was 1.13 to 1.00, instead of the required 1.25 to 1.00. The Bank also increased the Eligible Receivable threshold for Ingram Micro from 50% to 60% of domestic receivables, and from 35% to 50% of all receivables (including both domestic and foreign receivables). Seventh Financing Agreement On January 8, 2020, the Company entered into the Seventh Amended and Restated Business Financing Agreement with the Bank which extends the maturity date of the Company’s revolving line of credit to January 31, 2022. Eighth Financing Agreement On August 28, 2020, the Company entered into the Eighth Amended and Restated Business Financing Agreement with the Bank. The Bank consented to the issuance of subordinated debt in the amount less than $2,000,000, at the annual interest rate less than 10% and maturing no sooner than 3 years. The Asset Coverage Ratio was 1.63 to 1.0 on September 30, 2020. During the nine months ended September 30, 2020, total repayments of the term loan was $333,333. Total amount borrowed under the domestic and international lines was $5,630,000 and the total repayments was $7,042,449. At September 30, 2020, the available borrowing capacity was approximately $1,643,000. There were no amounts outstanding under the term loan and bank credit facilities at September 30, 2020. Interest expense on the term loan for three and nine months ended September 30, 2020 was $229 and $6,152, respectively. Interest expense on the amounts drawn under the Company’s bank credit lines during the three and nine months ended September 30, 2020 was $1,077 and $20,461. Accrued interest payable related to the amounts outstanding under the bank credit facilities at September 30, 2020 was $373.

Note 5 - Term loans

Note 5 - Term loans	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Term loans	NOTE 5 — Term loans PPP Loan On April 20, 2020, the Company received $1,058,700 of loan proceeds under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid, Relief, and Economic Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account the current business activity and the ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria. The loan has a fixed interest rate of 1% and matures in two years. Payments of principal and interest are deferred for a period of six months from the date on which the PPP loan is distributed. As of September 30, 2020, pursuant to the existing loan agreement, all of the payments expected between July 1, 2020 and June 30, 2021, or $682,850, are classified as the current portion of the note payable and the remaining balance $375,850 is classified as the long-term note payable. The PPP loan was primarily used to cover payroll costs, rent, and utility costs during the covered period. Pursuant to the CARES Act and implementing rules and regulations, the Company has applied to its bank, Western Alliance for the PPP loan to be forgiven. The Company has used the proceeds of the PPP loan for purposes consistent with the PPP. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, the Company cannot assure that it will be eligible for forgiveness of the loan. Any PPP loan balance remaining following forgiveness by the SBA will be fully re-amortized over the remaining term of the loan. Economic Injury Disaster Loan (EIDL) On June 26, 2020, the Company executed the standard loan documents required for a securing loan of $150,000 offered by the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Proceeds of the EIDL are being used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue from the date of inception. Installment payments, including principal and interest, are due monthly beginning June 26, 2021 (twelve months from the date of the EIDL) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the EIDL. The EIDL is secured by a security interest on all of the Company’s assets. An immaterial amount of interest expense related to the loan during the nine months ended September 30, 2020 was recognized. On June 23, 2020, the Company received $10,000 from US Small Business Administration as part of Economic Injury Disaster Loan (“EIDL”). This was a grant and does not need to be repaid. The Company recorded it as other income in Q2. On August 28, 2020, the Company paid off the Economic Injury Disaster Loan in full.

Note 6 - Secured Subordinated C

Note 6 - Secured Subordinated Convertible Notes Payable	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Secured Subordinated Convertible Notes Payable	NOTE 6 — Secured Subordinated Convertible Notes Payable On August 31, 2020, the Company completed a secured subordinated convertible note financing of $1,530,000, including $1,350,000 from officers, directors, and family members. Because the Financing involved such parties related to the Company, a special committee of the Board comprising the Board’s disinterested directors approved the Financing. The funds raised are used to increase the Company’s working capital balances. The notes have a three-year term that accrue interest at 10% per annum and mature on August 30, 2023. The interest on the notes is payable quarterly in cash. The holder of each note may require the Company to repay the principal amount of the note plus accrued interest at any time after August 31, 2021. The principal amount of each note is convertible at any time, at the option of the holder, into shares of the Company’s common stock at a conversion price of $1.46 per share, which was the market closing price of the common stock on Friday, August 28, 2020, the closing date of the financing. The notes did not contain a beneficial conversion feature because the conversion price is lower than the market closing price on the date of the notes payable. The notes are secured by the assets of the Company and are subordinated to amounts outstanding under the Company’s working capital bank line of credit with Western Alliance Bank. Total issuance costs associated with the financing is $96,515, and the costs are presented in the balance sheet as a direct deduction from the notes payable balance of $1,530.000 as a contra-liability. The issuance costs are amortized over three years, the term of the notes payable, and the amortization expense is reported as interest expense. Accrued interest expense at September 30, 2020 was $12,575.

Note 7 - Segment Information an

Note 7 - Segment Information and Concentrations	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Segment Information and Concentrations	NOTE 7 — Segment Information and Concentrations Segment Information The Company operates in the mobile barcode scanning and RFID/NFC data capture market. Mobile scanning typically consists of mobile devices such as smartphones or tablets, with mobile scanning or NFC peripherals for data collection, and third-party vertical applications software. The Company distributes its products in the United States and foreign countries primarily through distributors, resellers, and online. The Company markets its products primarily through application developers whose applications are designed to work with Company’s products. Revenues for the geographic areas for three months ended September 30, 2020 and 2019 were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenues: Americas $ 3,290,992 $ 3,283,745 $ 8,676,626 $ 10,937,316 Europe 567,977 817,420 1,383,518 1,915,343 Asia Pacific 249,769 878,895 984,304 1,816,098 Total revenues $ 4,108,738 $ 4,980,060 $ 11,044,448 $ 14,668,757 Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations. Major Customers Customers who accounted for at least 10% of the Company’s total revenues for the three and nine months ended September 30, 2020 and 2019 were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Ingram Micro Inc. 30 % 34 % 32 % 39 % BlueStar, Inc. 29 % 16 % 23 % 18 % Nippon Primex, Inc. * 12 % * * Ingram Micro Pan Europe GmBH * 10 % * * Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company invests its cash in demand deposit accounts in banks. To date, the Company has not experienced losses on the investments. The Company’s trade accounts receivables are primarily with distributors. The Company performs ongoing credit evaluations of its customers’ financial condition but generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. Customers who accounted for at least 10% of the Company’s accounts receivable balances at September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Ingram Micro Inc. 35 % 45 % BlueStar, Inc. 33 % 32 % ScanSource, Inc. 11 % * Ingram Micro Pan Europe GmbH 10 % * *Customer accounted for less than 10% of the Company’s accounts receivable balances Concentration of Suppliers Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to increased demand, or to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. If the Company were unable to procure certain of such materials, it could have a material adverse effect upon its results. At September 30, 2020, 38% of the Company’s accounts payable balances was concentrated in the top three suppliers. For the three months ended September 30, 2020, the top three suppliers accounted for 64% of the inventory purchases.

Note 8 - Stock-Based Compensati

Note 8 - Stock-Based Compensation	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	NOTE 8 — Stock-Based Compensation The Company recognizes the compensation cost in the financial statements for all stock-based awards to employees, including grants of stock options and restricted stocks, based on the fair value of the awards as of the date that the awards are issued. Compensation cost for stock-based awards is recognized on a straight-line basis over the vesting period. The fair values of stock options are generally determined using a binomial lattice valuation model which incorporates assumptions about expected volatility, risk-free interest rate, dividend yield, and expected life. There were 37,000 stock options at the price of $1.08 granted for the nine months ended September 30, 2020, compared to 213,400 shares at the weighted average price of $2.04 granted for the nine months ended September 30, 2019. The restricted stocks are issued to employees and consultants and are held in escrow by the Company until the shares vest on the schedule of 15% after year one, 20% after year two, 25% after year three and 40% after year four, subject to the employees and consultants being a continuing service provider on the vesting dates. If the service or employment is terminated, unvested shares revert to the Company. Shares are registered at grant, so share owners may vote at the annual stockholder meeting. Restricted stocks are granted at zero cost basis. Compensation cost of the restricted stocks is recognized on a straight-line basis over the 4-year vesting period. For the nine months ended September 30, 2020 and 2019, the Company awarded 389,680 and 124,285 shares of restricted stock, respectively, leaving a balance of 301,631 available shares as of September 30, 2020. Due to the existence of restrictions on sale or transfer until the stocks vest, the Company does not count the restricted stocks as issued and outstanding shares until they vest. Total stock-based compensation expense for the three and nine months ended September 30, 2020 was $129,551 and $392,985, respectively.

Note 9 - Net Income (Loss) Per

Note 9 - Net Income (Loss) Per Share Applicable to Common Stockholders	9 Months Ended
	Sep. 30, 2020
Income Statement [Abstract]
Net Income (Loss) Per Share Applicable to Common Stockholders	NOTE 9 — Net Income (Loss) Per Share Applicable to Common Stockholders The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2020* 2019 2020* 2019 Numerator: Net income (loss) $ (4,002,786 )* $ 94,298 $ (4,861,136 )* $ 225,927 Net income (loss) allocated to restricted stock award 264,275 — 263,128 — Net income (loss) available to common stockholders $ (3,738,511 )* $ 94,298 $ (4,598,008 )* $ 225,927 Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 6,037,559 5,999,487 6,020,363 5,979,715 Effect of dilutive stock options — 317,783 — 256,958 Diluted 6,037,559 6,317,270 6,020,363 6,236,673 Net income (loss) per share applicable to common stockholders: Basic $ (0.62 )* $ 0.02 $ (0.76 )* $ 0.04 Diluted $ (0.62 )* $ 0.01 $ (0.76 )* $ 0.04 *Amounts for 2020 include goodwill impairment charges of $4.43 million recorded as of September 30, 2020. Additional information regarding goodwill impairment is contained in "Note 2 - Summary of Significant Accounting Policies." For the three and nine months ended September 30, 2020, the shares used in computing diluted net loss per share do not include 2,599,187 dilutive stock options and shares of restricted stock, nor 1,047,945 dilutive conversion shares as the effect is anti-dilutive given the Company’s loss. In the three and nine months ended September 30, 2019, 2,128,547 and 2,189,372, respectively, stock options were excluded in the calculation of diluted net income per share.

Note 10 - Taxes

Note 10 - Taxes	9 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Taxes	NOTE 10 — Taxes The Company recorded no deferred tax benefit for the losses in the three and nine months ended September 30, 2020. In the three and nine months ended September 30, 2019, the Company recorded deferred tax expenses of $9,611 and $85,030, respectively. During the three months ended September 30, 2019, the Company also recorded a tax refund of $27,838 resulted of AMT paid in the prior years.

Note 11 - Commitments and Conti

Note 11 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 11 — Commitments and Contingencies Operating Leases The Company adopted ASU 2016-02, Leases (Topic 842) effective January 1, 2019 and restated its reported results in January 2018, including the recognition of additional operating lease right-of-use assets and liabilities. On January 1, 2018, the Company recorded operating lease right-of-use assets and operating lease liabilities in the amount of approximately $1.57 million and $1.85 million, respectively. The Company leases office space under a non-cancelable operating lease that provides the Company approximately 37,100 square feet in Newark, California. The lease agreement expires on June 30, 2022. Monthly base rent increases four percent per year annually on July 1 st In June 2020, the Company also signed a new two-year equipment operating lease agreement. The Company will pay $1,519 in monthly installments starting in September of 2020 through June 2022. On September 30, 2020, the balances of right-of-use assets and liabilities for the operating leases were approximately $0.70 million and $0.86 million, respectively, compared to approximately $0.94 million, and $1.13 million, respectively, at December 31, 2019. Cash payments included in the measurement of our operating lease liabilities were $121,976 and $356,513 for the three- and nine-month periods ended September 30, 2020, respectively, compared to $117,268 and $342,785, respectively, for the same periods a year ago. Future minimum lease payments under the operating leases of the office and copier at September 30, 2020 are shown below: Annual minimum payments: Amount 2020 (October 1, 2020 to December 31, 2020) $ 126,516 2021 515,822 2022 262,789 Total minimum payments 905,127 Less: Amount attributable to interest (49,941 ) Total operating lease liabilities 855,186 Less: Current portion of operating lease (471,006 ) Long-term portion of operating lease $ 384,180 Finance Leases The new standard, ASU 2016-02 classifies lessee leases into two types, operating and finance. The Company leases certain of its equipment under finance leases. The leases are collateralized by the underlying assets. At September 30, 2020, the Company has no equipment subject to financing arrangement, compared to equipment with a cost of $100,584 at December 31, 2019. The accumulated depreciation of the assets associated with the finance leases as of September 30, 2020 and December 31, 2019, amounted to zero and $92,571 respectively. Purchase Commitments As of September 30, 2020, the Company has non-cancelable purchase commitments for inventory to be used in the ordinary course of business of approximately $3,252,000. Legal Matters The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. The Company is currently not a party to any material legal proceedings.

Note 12 - Subsequent Events

Note 12 - Subsequent Events	9 Months Ended
	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	NOTE 12 — Subsequent Events On November 5, 2020, the Company filed a shelf registration statement No. 333-249873 on Form S-3 to register securities through the Securities and Exchange Commission. The statement consists of a maximum of 1,047,942 shares of Common Stock at the conversion price of $1.46 per share that are issuable by the registrant upon the conversion of subordinated convertible notes issued on August 31, 2020 and maturing on August 30, 2023. On November 12, 2020, the Company filed the Amendment No. 1 to its Registration Statement on Form S-3 (File No. 333-249873) to amend the Information Incorporated by Reference section by listing additional current reports on Form 8-K that were filed with the SEC on January 14, 2020 and February 12, 2020. There are no changes to the prospectus. As of November 12, 2020, the Company has issued 29,663 shares of common stock for the exercise of stock options. As of November 12, 2020, the Company repurchased and retired 173 shares of restricted stocks covering employee’s tax withholding obligation for the shares vested.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements.
Cash Equivalents and Fair Value of Financial Instruments	Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At September 30, 2020 and December 31, 2019, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity.
Revenue Recognition and Deferred Revenue	Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 “Revenue from Contracts with Customers” and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At September 30, 2020, the deferred revenue and deferred cost on shipments to distributors were $479,299 and $178,631, respectively, compared to $611,029 and $233,823, respectively, at December 31, 2019.
Leases	Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company’s Statements of Operations. The most significant impact was the recognition of operating lease right-of-use assets and liabilities for the office space lease.
Goodwill Review	Goodwill Review In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU) 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The Company tests its goodwill for impairment annually as of September 30th or more frequently when events or circumstances indicate that the carrying value of the Company’s single reporting unit more likely than not exceeds its fair value. As of September 30, 2020, the Company experienced a triggering event due to a drop in its stock price, which had been negatively impacted by the economic downturn caused by COVID-19 pandemic and performed a quantitative analysis for potential impairment of its goodwill. The Company's fair value measurement approach combines the income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to its present value, and market valuation technique. The income valuation technique uses estimates and assumptions including the projected future cash flows, discount rate reflecting the risk attributable to the Company, perpetual growth rate, and projected future economic and market conditions. Under the market approach, the principal assumption included an estimate for a control premium. As a result of the analysis, the Company determined the carrying value exceeded its fair value and recorded a non-cash goodwill impairment charge of $4,427,000 at September 30, 2020. No income tax benefit related to this goodwill impairment charge is recorded at September 30, 2020.
Recently Issued Financial Accounting Standards	Recently Issued Financial Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
Inventory components	Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Raw materials and sub-assemblies $ 3,661,671 $ 3,767,588 Finished goods 398,282 241,681 Inventory reserves (697,639 ) (830,361 ) Inventory, net $ 3,362,314 $ 3,178,908

Segment Information and Concent

Segment Information and Concentrations (Tables)	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Revenue by geographic areas	Revenues for the geographic areas for three months ended September 30, 2020 and 2019 were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenues: Americas $ 3,290,992 $ 3,283,745 $ 8,676,626 $ 10,937,316 Europe 567,977 817,420 1,383,518 1,915,343 Asia Pacific 249,769 878,895 984,304 1,816,098 Total revenues $ 4,108,738 $ 4,980,060 $ 11,044,448 $ 14,668,757
Major customers accounted for at least 10% of total revenues	Customers who accounted for at least 10% of the Company’s total revenues for the three and nine months ended September 30, 2020 and 2019 were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Ingram Micro Inc. 30 % 34 % 32 % 39 % BlueStar, Inc. 29 % 16 % 23 % 18 % Nippon Primex, Inc. * 12 % * * Ingram Micro Pan Europe GmBH * 10 % * *
Major customers accounted for at least 10% of net accounts receivable balances	Customers who accounted for at least 10% of the Company’s accounts receivable balances at September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Ingram Micro Inc. 35 % 45 % BlueStar, Inc. 33 % 32 % ScanSource, Inc. 11 % * Ingram Micro Pan Europe GmbH 10 % * *Customer accounted for less than 10% of the Company’s accounts receivable balances

Net Income (Loss) Per Share App

Net Income (Loss) Per Share Applicable to Common Stockholders (Tables)	9 Months Ended
	Sep. 30, 2020
Net income (loss) per share:
Net Income (Loss) Per Shares Applicable To Common Stockholders	The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2020* 2019 2020* 2019 Numerator: Net income (loss) $ (4,002,786 )* $ 94,298 $ (4,861,136 )* $ 225,927 Net income (loss) allocated to restricted stock award 264,275 — 263,128 — Net income (loss) available to common stockholders $ (3,738,511 )* $ 94,298 $ (4,598,008 )* $ 225,927 Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 6,037,559 5,999,487 6,020,363 5,979,715 Effect of dilutive stock options — 317,783 — 256,958 Diluted 6,037,559 6,317,270 6,020,363 6,236,673 Net income (loss) per share applicable to common stockholders: Basic $ (0.62 )* $ 0.02 $ (0.76 )* $ 0.04 Diluted $ (0.62 )* $ 0.01 $ (0.76 )* $ 0.04 *Amounts for 2020 include goodwill impairment charges of $4.43 million recorded as of September 30, 2020. Additional information regarding goodwill impairment is contained in "Note 2 - Summary of Significant Accounting Policies."

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Future minimum payments for operating leases	Future minimum lease payments under the operating leases of the office and copier at September 30, 2020 are shown below: Annual minimum payments: Amount 2020 (October 1, 2020 to December 31, 2020) $ 126,516 2021 515,822 2022 262,789 Total minimum payments 905,127 Less: Amount attributable to interest (49,941 ) Total operating lease liabilities 855,186 Less: Current portion of operating lease (471,006 ) Long-term portion of operating lease $ 384,180

Inventory Components (Details)

Inventory Components (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Notes to Financial Statements
Raw materials and sub-assemblies	$ 3,661,671	$ 3,767,588
Finished goods	398,282	241,681
Inventory reserves	(697,639)	(830,361)
Inventories, net	$ 3,362,314	$ 3,178,908

Bank Financing Arrangements (De

Bank Financing Arrangements (Details Narrative)	3 Months Ended	9 Months Ended
	Sep. 30, 2020USD ($)	Sep. 30, 2020USD ($)
Term Loan for Stock Repurchase
Amount repaid		$ 333,333
Interest expense	$ 229	6,152
Domestic Line of Credit
Amount borrowed		4,865,000
Amount repaid		6,069,915
Interest expense	1,077	17,909
Accrued interest payable	373	373
Remaining borrowing capacity	1,314,575	1,314,575
Foreign Line of Credit
Amount borrowed		765,000
Amount repaid		972,534
Interest expense	0	2,552
Remaining borrowing capacity	$ 328,742	$ 328,742

Term loans (Details)

Term loans (Details) - USD ($)	Aug. 28, 2020	Jun. 26, 2020	Jun. 23, 2020	Apr. 20, 2020	Sep. 30, 2020	Sep. 30, 2019
Loan repayment					$ 150,000
Paycheck Protection Program Loan
Loan proceeds				$ 1,058,700
Current portion of notes payable					682,850
Long-term portion of notes payable					$ 375,850
Economic Injury Disaster Loan
Loan proceeds		$ 150,000
Loan repayment	$ 150,000
Grant proceeds			$ 10,000

Secured Subordinated Convertibl

Secured Subordinated Convertible Notes Payable (Details Narrative) - USD ($)	Aug. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Related Party Convertible Notes Payable Details Narrative
Convertible notes issued	$ 1,530,000
Convertible notes issued – related party	$ 1,350,000
Subordinated convertible notes payable, net of discount-related party		$ 1,264,840
Subordinated convertible notes payable, net of discount		$ 168,645
Conversion price convertible at any time	$ 1.46	$ 1.46
Annual interest rate on short term convertible notes payable, compounded quarterly		10.00%
Secured subordinated convertible notes payable maturity date	Aug. 30, 2023
Accrued interest on secured subordinated convertible notes payable		$ 12,575
Convertible note issuance costs		$ 96,515

Revenues By Geographic Areas (D

Revenues By Geographic Areas (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues	$ 4,108,738	$ 4,980,060	$ 11,044,448	$ 14,668,757
United States
Revenues	3,290,992	3,283,745	8,676,626	10,937,316
Europe
Revenues	567,977	817,420	1,383,518	1,816,098
Asia Pacific
Revenues	$ 249,769	$ 878,895	$ 984,304	$ 1,915,343

Major customers accounted for a

Major customers accounted for at least 10% of total revenues (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Ingram Micro Inc.
Percent of total revenues	30.00%	34.00%	32.00%	39.00%
Threshold percentage for disclosure	10.00%	10.00%	10.00%	10.00%
BlueStar, Inc.
Percent of total revenues	29.00%	16.00%	23.00%	18.00%
Threshold percentage for disclosure	10.00%	10.00%	10.00%	10.00%
Nippon Primex, Inc.
Percent of total revenues		12.00%
Threshold percentage for disclosure	10.00%	10.00%	10.00%	10.00%
Ingram Micro Pan Europe GmBH
Percent of total revenues		10.00%
Threshold percentage for disclosure	10.00%	10.00%	10.00%	10.00%

Major Customers as a Percentage

Major Customers as a Percentage of Net Accounts Receivable Balances (Details)	Sep. 30, 2020	Dec. 31, 2019
Ingram Micro Inc.
Percent of net accounts receivable balances	35.00%	45.00%
Threshold percentage for disclosure	10.00%	10.00%
BlueStar, Inc.
Percent of net accounts receivable balances	33.00%	32.00%
Threshold percentage for disclosure	10.00%	10.00%
ScanSource, Inc.
Percent of net accounts receivable balances	11.00%
Threshold percentage for disclosure	10.00%	10.00%
Ingram Micro Pan Europe GmBH
Percent of net accounts receivable balances	10.00%
Threshold percentage for disclosure	10.00%	10.00%

Concentration of Suppliers (Det

Concentration of Suppliers (Details Narrative)	3 Months Ended
	Sep. 30, 2020
Risks and Uncertainties [Abstract]
Accounts payable balances with top three suppliers	38.00%
Percentage of inventory purchases from top three suppliers	64.00%

Stock-Based Compensation (Detai

Stock-Based Compensation (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Notes to Financial Statements
Stock-based compensation expenses	$ 129,551	$ 131,369	$ 133,008	$ 392,985
Stock options granted				37,000	213,400
Restricted stock granted				389,680	124,285
Shares available for future grant	301,631			301,631

Net Income (Loss) per Share A_2

Net Income (Loss) per Share Applicable to Common Stockholders (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net income (loss)	$ (4,002,786)	$ (768,023)	$ (90,327)	$ 94,298	$ 119,790	$ 11,839	$ (4,861,136)	$ 225,927
Net income (loss) allocated to restricted stock award	264,275						263,128
Net income (loss) available to common stockholders	$ (3,738,511)			$ 94,298			$ (4,598,008)	$ 225,927
Denominator: Weighted average common shares outstanding used in computing net income (loss) per share:
Basic	6,037,559			5,999,487			6,020,363	5,979,715
Effect of dilutive stock options				317,783				256,958
Diluted	6,037,559			6,317,270			6,020,363	6,236,673
Net income (loss) per share applicable to common stockholders:
Basic	$ (0.62)			$ 0.02			$ (0.76)	$ 0.04
Diluted	$ (0.62)			$ 0.01			$ (0.76)	$ 0.04

Securities Excluded from Calcul

Securities Excluded from Calculation of Diluted Net Loss Per Share (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock Options and Restricted Stocks
Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share	2,599,187	2,128,547	2,599,187	2,189,372
Convertible Note Conversion Shares
Antidilutive Securities Excluded from Calculation of Diluted Net Income (Loss) Per Share	1,047,945		1,047,945

Taxes (Details)

Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income tax expense	$ (800)	$ (9,611)	$ (800)	$ (85,030)
Tax refund from AMT paid		$ 27,838		$ 27,838

Commitments and Contingencies_2

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jan. 01, 2018
Notes to Financial Statements
Rental expense for operating lease	$ 103,208	$ 103,208	$ 309,626	$ 309,626
Operating lease cash payments			356,513	$ 342,785
Non-cancelable purchase commitments for inventory	3,252,000		3,252,000
Original cost of equipment under finance leases					$ 100,584
Finance lease accumulated depreciation					92,571
Operating lease right-of-use asset	704,416		704,416		936,708	$ 1,570,000
Operating lease right-of-use liabilities	$ 855,186		$ 855,186		$ 1,134,350	$ 1,850,000

Future Minimum Payments For Ope

Future Minimum Payments For Operating Leases (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019	Jan. 01, 2018
Annual minimum payments:
2020 (October 1, 2020 to December 31, 2020)	$ 126,516
2021	515,822
2022	262,789
Total minimum payments	905,127
Less: Amount attributable to interest	(49,941)
Total operating lease liabilities	855,186	$ 1,134,350	$ 1,850,000
Less: Current portion of operating lease	(471,006)	(419,288)
Long term portion of operating lease	$ 384,180	$ 715,062

Subsequent Events (Details Narr

Subsequent Events (Details Narrative)	9 Months Ended
	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent events	On November 5, 2020, the Company filed a shelf registration statement No. 333-249873 on Form S-3 to register securities through the Securities and Exchange Commission. The statement consists of a maximum of 1,047,942 shares of Common Stock at the conversion price of $1.46 per share that are issuable by the registrant upon the conversion of subordinated convertible notes issued on August 31, 2020 and maturing on August 30, 2023.   On November 12, 2020, the Company filed the Amendment No. 1 to its Registration Statement on Form S-3 (File No. 333-249873) to amend the Information Incorporated by Reference section by listing additional current reports on Form 8-K that were filed with the SEC on January 14, 2020 and February 12, 2020. There are no changes to the prospectus.   As of November 12, 2020, the Company has issued 29,663 shares of common stock for the exercise of stock options.   As of November 12, 2020, the Company repurchased and retired 173 shares of restricted stocks covering employee’s tax withholding obligation for the shares vested.