10.

Significant Risk Concentrations

Significant Customers

CCIntegration, Inc. had revenue of

$1.2

million or approximately

14%

of total revenue for the

three

months ended

June 30, 2020.

other customers accounted for

10%

or more of total revenue for each of the

three

and

six

months ended

June 30, 2020

and

2019.

Honeywell International, Inc. and affiliated entities (“Honeywell”) had accounts receivable balances of

$1.1

million or approximately

18%

of total accounts receivable at

June 30, 2020

and

$1.2

million or approximately

13%

of total accounts receivable at

December 31, 2019.

other customer accounted for

10%

or more of total accounts receivable at

June 30, 2020

December 31, 2019.

Significant Supplier

Effective

March 1, 2019,

pursuant to a new Global Partnership Agreement with Microsoft Corporation (“Microsoft”), we are authorized to sell Windows Embedded operating systems in Canada, the United States, Argentina, Brazil, Chile, Mexico, Peru, Venezuela, Puerto Rico, Columbia, and several Caribbean countries. Of our total revenue,

79%

2019

and

75%

2018

resulted from the sale of Windows IoT operating systems. Our existing distribution agreement for sales of Windows IoT operating systems in the European Union, the European Free Trade Association, Turkey, and Africa, expired on

June 30, 2019

and was

not

renewed thereafter. We generated approximately

of our Partner Solutions software sales under this agreement in

2019.

We have also entered into OEM distributor agreements (“ODAs”) with Microsoft pursuant to which we are licensed to sell Microsoft Windows Mobile operating systems to customers in North America, South America, Central America (excluding Cuba), Japan, Taiwan, Europe, the Middle East, and Africa. The ODAs to sell Windows Mobile operating systems are effective through

April 30, 2022.

Software sales under these agreements constitute a significant portion of our Partner Solutions revenue and total revenue. There is

automatic renewal provision in any of these agreements, and these agreements can be terminated unilaterally by Microsoft at any time.

Microsoft currently offers a rebate program to sell Microsoft Windows Embedded operating systems pursuant to which we earn money for achieving certain predefined objectives. In accordance with Microsoft rebate program rules:

•

For the

three

and

six

months ended

June 30, 2020

and

2019,

respectively, we allocated

20%

of rebates to reduce cost of sales, with the remaining

80%

potentially available to offset qualified marketing expenses related to Microsoft Azure products in the period that expenditures are claimed and approved.

Under this rebate program, we recorded rebate credits as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Reductions to cost of revenue	$	41	$	71	$	154	$	153
Reductions to marketing expense	$	721	$	16	$	940	$	430

There was a balance of approximately

$168,000

in qualified outstanding rebate credits at

June 30, 2020

, which will be accounted for as a reduction in marketing expense in the period in which qualified program expenditures are claimed and approved.