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Concentrations and Credit Risk

3 Months Ended

Mar. 31, 2021

Risks and Uncertainties [Abstract]

Concentrations and Credit Risk

22.

Concentrations and Credit Risk

(a)

Concentrations

The Company had the following customers that individually comprised 10% or more of net revenue for the three months ended March 31, 2020 and 2021 as follows:

	Three months ended March 31,
	2020				2021
Customer A	$	2,093,093	30.33	%	$	2,903,261	30.83	%
Customer B		*	*			1,789,045	19.00	%
Customer C		*	*			1,348,200	14.32	%
Customer D		3,796,267	55.01	%		*	*

* Comprised less than 10% of net revenue for the respective period.

The Company had the following customers that individually comprised 10% or more of accounts receivable as of December 31, 2020 and March 31, 2021 as follows:

	December 31, 2020				March 31, 2021
Customer A	$	3,148,737	11.23	%	$	6,335,867	28.13	%
Zhengzhou BAK Battery Co., Ltd (note a)		15,258,164	54.42	%		8,437,625	37.46	%

The Company had the following suppliers that individually comprised 10% or more of net purchase for the three months ended March 31, 2020 and 2021 as follows:

	Three months ended March 31,
	2020				2021
Supplier A	$	*	*		$	659,513	10.21	%
Zhengzhou BAK Battery Co., Ltd (note a)		*	*			1,259,309	19.49	%
Shenzhen BAK (note b)		3,841,680	82.43	%		*	*

* Comprised less than 10% of net purchase for the respective period.

The Company had the following suppliers that individually comprised 10% or more of accounts payable as of December 31, 2020 and March 31, 2021 as follows:

	December 31, 2020				March 31, 2021
Supplier B	$	9,272,478	47.40	%	$	1,728,201	19.08	%
Supplier C		2,017,814	10.32	%		950,038	10.49	%
Supplier D		*	*			947,819	10.46	%

Apart from the above, for the three months ended March 31, 2020 and 2021, the Company recorded the following transactions:

	Three months ended March 31,
	2020		2021

Sales of finished goods and raw materials to
BAK Shenzhen (note b)	$	69,226	$	-
Zhengzhou BAK Battery Co., Ltd (note a)		-		108,290
Zhengzhou BAK Electronics Co., Ltd. (note c)		-		412,353

Apart from the above, the Company recorded the following as of December 31, 2020 and March 31, 2021:

	December 31, 2020		March 31, 2021
Trade accounts and bills receivables, net
Zhengzhou BAK Electronics Co., Ltd (note c)	$	-	$	461,024
Zhengzhou BAK New Energy Vehicle Co., Ltd (note d)		1,759,050		911,599

Notes:
a	Mr. Xiangqian Li, the Company’s former CEO, is a director of Zhengzhou BAK Battery Co., Ltd. Up to the date of this report, Zhengzhou BAK Battery Co., Ltd. repaid $2,327,491 to the Company.
b	Mr. Xiangqian Li is a director of Shenzhen BAK and BAK Shenzhen.
c	BAK Shenzhen has 95% equity interests in Zhengzhou BAK Electronics Co., Ltd. Up to the date of this report, Zhengzhou BAK Electronics Co., Ltd. repaid nil to the Company.
d	Mr. Xiangqian Li is a director of Zhengzhou BAK New Energy Vehicle Co., Ltd. For the three months ended March 31, 2020 and 2021, sales of finished goods and raw materials to Zhengzhou BAK New Energy Vehicle Co., Ltd were nil. Up to the date of this report, Zhengzhou BAK New Energy Technology Co., Ltd repaid nil to the Company.

(b)

Credit Risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents and pledged deposits. As of December 31, 2020 and March 31, 2021, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, which management believes are of high credit quality.

For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its customers and, if necessary, maintains reserves for potential credit losses. Historically, such losses have been within management’s expectations.