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Concentrations and Credit Risk

6 Months Ended

Jun. 30, 2021

Risks and Uncertainties [Abstract]

Concentrations and Credit Risk

24.

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 June 30, 2020 and 2021 as follows:

	Three months ended June 30,
	2020				2021
Customer A	$	2,584,606	55.89	%	$	*	*
Customer B		1,626,944	35.18	%		880,947	14.96	%
Customer E		*	*			1,917,054	32.55	%
Customer F		*	*			1,505,794	25.57	%

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

The Company had the following customers that individually comprised 10% or more of net revenue for the six months ended June 30, 2020 and 2021 as follows:

	Six months ended June 30,
	2020				2021
Customer A	$	4,677,699	40.59	%	$	2,908,330	19.00	%
Customer B		2,009,845	17.44	%		1,589,682	10.39	%
Customer C		3,767,605	32.69	%		*	*
Customer D		*	*			2,279,538	14.89	%
Customer E		*	*			2,279,103	14.89	%
Customer F		*	*			1,905,460	12.45	%

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 June 30, 2021 as follows:

	December 31, 2020				June 30, 2021
Customer A	$	3,148,737	11.23	%	$	5,995,134	28.16	%
Zhengzhou BAK Battery Co., Ltd (note a)		15,258,164	54.42	%		6,422,003	30.16	%

The Company had the following suppliers that individually comprised 10% or more of net purchase for the three months ended June 30, 2020 and 2021 as follows:

	Three months ended June 30,
	2020				2021
Supplier A	$	294,786	23.52	%	$	*	*

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

The Company had the following suppliers that individually comprised 10% or more of net purchase for the six months ended June 30, 2020 and 2021 as follows:

	Six months ended June 30,
	2020				2021
Zhengzhou BAK Battery Co., Ltd (note a)	$	*	*		$	1,259,309	10.05	%
Shenzhen BAK		3,841,680	64.96	%		*	*

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 June 30, 2021 as follows:

	December 31, 2020				June 30, 2021
Supplier B	$	9,272,478	47.40	%	$	*	*
Supplier C		2,017,814	10.32	%		967,239	18.61	%
Supplier D		*	*			708,637	13.63	%

Apart from the above, for the three and six months ended June 30, 2020 and 2021, the Company recorded the following transactions:

	Three months ended June 30,				Six months ended June 30,
	2020		2021		2020		2021
Sales of finished goods and raw materials to
BAK Shenzhen (note b)		-		18,402		69,226		18,402
Zhengzhou BAK Battery Co., Ltd (note a)		-		33,292		-		141,582
Zhengzhou BAK Electronics Co., Ltd (note c)		-		-		-		412,353

Apart from the above, the Company recorded the following as of December 31, 2020 and June 30, 2021:

	December 31, 2020		June 30, 2021
Trade accounts and bills receivables, net
Zhengzhou BAK Electronics Co., Ltd (note c)	$	-	$	467,748
Zhengzhou BAK New Energy Vehicle Co., Ltd (note d)		1,759,050		871,633

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 $1,240,814 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 $46,450 to the Company.
d	Mr. Xiangqian Li is a director of Zhengzhou BAK New Energy Vehicle Co., Ltd. For the three and six months ended June 30, 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 $32,515 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 June 30, 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.