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Concentrations and Credit Risk

9 Months Ended

Sep. 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 September 30, 2020 and 2021 as follows:

	Three months ended September 30,
	2020				2021
Sales of finished goods and raw materials
Customer A	$	1,588,192	14.95	%	$	*	*
Customer C		1,278,893	12.04	%		3,103,626	32.46	%
Customer D		*	*			1,081,071	11.31	%
Zhengzhou BAK Battery Co., Ltd (note a)		4,269,312	40.20	%		*	*
Zhengzhou BAK New Energy Technology Co., Ltd (note d)		1,896,207	17.85	%		*	*

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 nine months ended September 30, 2020 and 2021 as follows:

	Nine months ended September 30,
	2020				2021
Sales of finished goods and raw materials
Customer A	$	5,793,828	26.16	%	$	2,583,245	10.39	%
Customer B		*	*			2,777,456	11.17	%
Customer C		2,908,728	13.13	%		4,693,308	18.87	%
Customer D		*	*			3,360,174	13.51	%
Customer E		3,787,585	17.10	%		*	*
Zhengzhou BAK Battery Co., Ltd (note a)		4,269,312	19.28	%		*	*

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 (net) as of December 31, 2020 and September 30, 2021 as follows:

	December 31, 2020				September 30, 2021
Customer A	$	3,148,737	11.23	%	$	2,845,127	12.94	%
Customer C		*	*			3,538,038	16.10	%
Zhengzhou BAK Battery Co., Ltd (note a)		15,258,164	54.42	%		4,562,413	20.76	%

Comprised less than 10% of account receivable (net) for the respective period.

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

	Three months ended September 30,
	2020				2021
Supplier A	$	*	*		$	810,963	13.29	%
Supplier B		4,329,602	72.65	%		704,401	11.54	%

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

	Nine months ended September 30,
	2020				2021
Supplier B		4,329,602	36.47	%		*	*
Shenzhen BAK (note b)		3,841,680	32.35	%		*	*

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 September 30, 2021 as follows:

	December 31, 2020				September 30, 2021
Supplier B	$	9,272,478	47.40	%	$	*	*
Supplier C		2,017,814	10.32	%		970,564	17.99	%
Supplier D		*	*			709,952	13.16	%

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

	Three months ended September 30,				Nine months ended September 30,
	2020		2021		2020		2021
Purchase of inventories from
Zhengzhou BAK Battery Co., Ltd (note a)		-		477,185		-		1,736,494

Sales of finished goods and raw materials to
BAK Shenzhen (note b)		-		-				18,402
Zhengzhou BAK Electronics Co., Ltd (note c)		-		746		-		413,099
Zhengzhou BAK Battery Co., Ltd (note a)		-		6,982				148,564

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

	December 31, 2020		September 30, 2021
Trade accounts and bills receivables, net
Zhengzhou BAK Electronics Co., Ltd (note c)	$	-		422,080
Zhengzhou BAK New Energy Technology Co., Ltd (note d)		1,759,050		840,675

	Notes:
	a	Mr. Xiangqian Li, the Company’s former CEO, is a director of Zhengzhou BAK Battery Co., Ltd.
	b	Mr. Xiangqian Li is a director of BAK Shenzhen and Shenzhen BAK.
	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 $27,839 to the Company.
	d	Mr. Xiangqian Li, is a director of Zhengzhou BAK New Energy Technology Co., Ltd. Up to the date of this report, Zhengzhou BAK New Energy Technology Co., Ltd repaid $219,943 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 September 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.