4. Customer Concentrations and Accounts Receivable

Accounts receivables are presented on the Condensed Consolidated Balance Sheets, net of estimated credit losses. The Company applies the aging method by pooling receivables based on levels of delinquency and applying historical loss rates on what has been historically uncollectible by aging categories. The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts of future losses, as necessary. Additionally, the allowance for credit loss calculation includes subjective adjustments for qualitative risk factors that could likely cause estimated credit losses to differ from historical experience. The factors include assessments of various economic conditions, significant events that occurred, geographic location, size and credit ratings of the customers. The Company may also record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position. Accounts deemed uncollectible are written off against the allowance for credit loss.

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In accordance with ASC 326, the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit loss that reflects its best estimate of the current expected credit losses (“CECL”) on a quarterly basis.

Changes in the CECL allowance for accounts receivable are as follows (in thousands):

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Lone Star Power Solutions, LLC (“Lone Star”), Cal Microturbine and E-Finity Distributed Generation (“E-Finity”), three of the Company’s domestic distributors, and Optimal Group Australia Pty Ltd (“Optimal”), one of the Company’s international distributors, accounted for 16%, 13%, 11% and 11% of revenue for the three months ended June 30, 2024, respectively. Horizon Power Systems (“Horizon”), E-Finity and Optimal accounted for 15%, 10% and 13% of revenue for the three months ended June 30, 2023, respectively.

Additionally, Optimal, E-Finity, Lone Star and RSP Systems, accounted for 16%, 13%, 12% and 11% of net accounts receivable as of June 30, 2024. Supernova Energy Services SAS (“Supernova”) and Capstone Engineered Solutions (“CES”), two of the Company’s international distributors, accounted for 14% and 11% of net accounts receivable as of March 31, 2024, respectively. The Company recorded a credit loss expense of $146,000 and zero during the three months ended June 30, 2024 and 2023, respectively.