Doesn't look good!:
Sales to our top two customers accounted for approximately 43% of total revenue in 2015, and sales to our top three customers accounted for 45% of total revenue in 2014. One customer accounted for 30% of the Company’s total revenue in 2015. Three customers accounted for approximately 43% of our accounts receivable balance as of December 31, 2015, and three customers accounted for approximately 55% of our accounts receivable balance as of December 31, 2014. One customer accounted for approximately 19% and 25%, respectively, of our accounts receivable balance at year end 2015 and 2014. A significant amount of revenue is received from a relatively small group of our customers. As discussed in more detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report, as of January 2015, one of these customers was acquired by another company. This resulted in the loss of this customer and the revenue it generated. As also discussed in Item 7, during 2014, we generated approximately 56% of our UR revenues (approximately $1.2 million) from a third-party partner we were assisting to work through its backlog. As of the end of February 2015, Prime notified us that it had worked through its entire backlog. We have received no additional overflow business from this third-party partner since the end of February 2015. Currently, we have no way to predict whether Prime will send us additional work in the future, or the volume of any work it might send. In a letter dated October 23, 2015, our largest customer, AmTrust notified us it would be terminating the services provided by the Company before the end of 2015. The loss of this customer has significantly impacted our profitability and liquidity during the fiscal year ended December 31, 2015. During the twelve-month period ended December 31, 2015 and 2014, fees generated from this customer were approximately $2,564,042 and $1,804,095 respectively. We anticipate the loss of these customers will continue to have a significant negative impact until such time as we are able to find new customers to replace the revenue generated from Prime and AmTrust.
We cannot guarantee that our other significant customers won’t, at some point, terminate or reduce our services. The loss of one or more of these significant customers will likely have an adverse impact on our business, results of operations, cash flows and financial condition, perhaps materially, until such time as we are able to retain new customers to replace them.
