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Concentrations and Credit Risk

9 Months Ended

Sep. 30, 2022

27. 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, 2021 and 2022 as follows:

	Three months ended September 30,
	2021				2022
Sales of finished goods and raw materials
Customer A	$	3,103,626	32.46	%	$	*	*
Customer C		*	*			5,935,356	10.28	%
Customer D		1,081,071	11.31	%		*	*
Customer E		*	*			9,097,887	15.76	%
Customer F		*	*			16,259,769	28.17	%

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, 2021 and 2022 as follows:

	Nine months ended September 30,
	2021				2022
Sales of finished goods and raw materials
Customer A	$	4,693,308	18.87	%	$	*	*
Customer B		*	*			23,190,022	11.94	%
Customer C		2,777,456	11.17	%		*	*
Customer D		3,360,174	13.51	%		*	*
Customer E		*	*			24,844,997	12.79	%
Customer F		*	*			22,263,958	11.46	%
Customer G		2,583,245	10.39	%		*	*
Customer H		2,541,248	10.22	%		*	*
Zhengzhou BAK Battery Co., Ltd (note a)		*	*			52,064,148	26.80	%

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, 2021 and September 30, 2022 as follows:

	December 31,				September 30,
	2021				2022
Customer B	$	14,443,551	32.76	%	$	*	*
Zhengzhou BAK Battery Co., Ltd (note 16)		14,583,061	33.08	%		10,894,917	53.59	%

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, 2021 and 2022 as follows:

	Three months ended September 30,
	2021				2022
Supplier C	$	*	*		$	5,449,408	10.72	%
Supplier D		*	*			5,271,460	10.37	%
Supplier F		810,963	13.29	%		*	*
Supplier G		704,401	11.54	%		*	*
Zhengzhou BAK Battery Co., Ltd (note 16)		*	*			10,624,282	20.90	%

The Company had the following suppliers that individually comprised 10% or more of net purchase for the nine months ended September 30, 2021 and 2022 as follows:

	Nine months ended September 30,
	2021			2022
Supplier A	$	*	*	$	30,906,898	16.05	%
Shenzhen BAK (note b)		*	*		19,851,008	10.31	%
Zhengzhou BAK Battery Co., Ltd (note 16)		*	*		25,743,966	13.37	%

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, 2021 and September 30, 2022 as follows:

	December 31,				September 30,
	2021				2022
Supplier A	$	6,837,722	16.94	%	$	5,895,560	18.31	%
Supplier B		20,592,979	51.03	%		*	*
Supplier C		*	*			3,803,753	11.81	%
Supplier E		*	*			3,424,539	10.63	%

(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, 2021 and September 30, 2022, 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.