|3 Months Ended|
Mar. 31, 2017
|Risks and Uncertainties [Abstract]|
NOTE 12 CONCENTRATIONS.
The Company has historically purchases a substantial amount of its products from two vendors; Citizens Watch Company of America, Inc., and Bulova Corporation. During the three months ended March 31, 2017, purchases from Citizens accounted for 25% and purchases from Bulova accounted for 16%, of the total products purchased as compared to 33% and 23%, respectively, for the three months ended March 31, 2016. Although we continue to add additional product vendors and we continue to expand our product line and vendor relationships, due to continued high concentration and reliance on these two vendors, the loss of one of these two vendors could adversely affect the Company's operations.
The Company generates revenues from two segments: product sales and services. We sell many products through various distribution portals, which include Amazon and Paypal/eBay. During the three months ended March 31, 2017, these two portals accounted for 44% and 43%, respectively of our total product sales as compared to 70% and 4% in the three months ended March 31, 2016. The sharp increase in Paypal/eBay concentration is due to our acquisition of the Black Helmet Apparel business in December 2016. Due to high concentration and reliance on these portals, the loss of a working relationship with either of these two portals could adversely affect the Company's operations.
A substantial amount of payments for our products sold are processed through PayPal. A disruption in PayPal payment processing could have an adverse effect on the Company's operations and cash flow.
The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At March 31, 2017 and December 31, 2016, respectively, the Company had no cash balances in excess of the FDIC insured limit.
Concentration of Funding
During the three months ended March 31, 2017, the Company's funding was provided by the convertible notes to a related party officer and director. See Note 6.
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://www.xbrl.org/2003/role/presentationRef