NOTE f—SIGNIFICANT CUSTOMERS

The Company sells its products primarily through distributors and directly to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who incorporate the Company’s products into consumer products. The Company’s future performance will depend, in part, on the continued success of its distributors in marketing and selling its products. The loss of the Company’s distributors and the Company’s inability to obtain satisfactory replacements in a timely manner

may

harm the Company’s sales and results of operations. In addition, the Company expects that a limited number of customers, varying in identity from period-to-period, will account for a substantial portion of its revenues in any period. The loss of, or reduced demand for products from, any of the Company’s major customers could have a material adverse effect on the Company’s business, financial condition and results of operations.

The following table represents the Company’s sales, as a percentage of the Company’s total revenues, for the

three

and

nine

month periods ended

September 30, 2018

and

2017,

of the Company’s significant customers:

	Three months ended September 30,				Nine months ended September 30,
	Unaudited
Major customers/ distributors	2018		2017		2018		2017
VTech Holdings Ltd.		21%		24%		23%		28%

Nexty Electronics ¹ ²		12%		15%		12%		12%

Ascend Technology Inc. ¹ ³		29%		24%		27%		22%

¹ Distributor.

² Nexty Electronics sells the Company’s products to a limited number of customers;

one

of those customers – Panasonic – accounted for

10%

and

13%

of the Company’s total revenues for the

three

month periods ended

September 30, 2018

and

2017,

respectively, and

10%

of the Company’s total revenues for both the

nine

month periods ended

September 30, 2018

and

2017,

respectively.

³ Ascend Technology sells the Company’s products to a limited number of customers;

one

of those customers – Avaya – accounted for

10%

and

of the Company’s total revenues for the

three

month periods ended

September 30, 2018

and

2017,

respectively, and

and

of the Company’s total revenues for the

nine

month periods ended

September 30, 2018

and

2017,

respectively.