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Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Information [Abstract]  
Segment Information

28. Segment Information

 

The Group’s chief operating decision maker has been identified as the Chief Executive Officer (“CEO”) who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Company.

 

As a result of the Hitrans acquisition discussed in Note 11, the Group determined that Hitrans met the criteria for separate reportable segment given its financial information is separately reviewed by the Group’s CEO. As a result, the Group determined that it operated in two operating segments namely CBAT and Hitrans upon completion of acquisition. CBAT’s segment mainly includes the manufacture, commercialization and distribution of a wide variety of standard and customized lithium ion rechargeable batteries for use in a wide array of applications. Hitrans’ segment mainly includes the development and manufacturing of NCM precursor and cathode materials.

 

The Company primarily operates in the PRC and substantially all of the Company’s long-lived assets are located in the PRC.

 

The Company’s chief operating decision maker evaluates performance based on each reporting segment’s net revenue, cost of revenues, operating expenses, operating income, finance income (expense), other income and net income. Net revenue, cost of revenues, operating expenses, operating income, finance income (expense), other income and net income by segment for the three and nine months ended September 30, 2021 and 2022 were as follows:

 

For the three months ended September 30, 2021  CBAT   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $9,562,190   $
-
   $9,562,190 
Cost of revenues   (8,430,808)   
-
    (8,430,808)
Gross profit   1,131,382    
-
    1,131,382 
Total operating expenses   (3,941,349)   (364,079)   (4,305,428)
Operating loss   (2,809,967)   (364,079)   (3,174,046)
Finance income, net   128,381    959    129,340 
Other income, net   69,970    22,997,957   23,067,927 
Income tax (expense) credit   
-
    
-
    - 
Net (loss) income   (2,611,616)   22,634,837    20,023,221 

For the three months ended September 30, 2022  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $25,845,959   $31,875,733   $-   $57,721,692 
Cost of revenues   (23,603,029)   (30,658,215)   -    (54,261,244)
Gross profit   2,242,930    1,217,518    -    3,460,448 
Total operating expenses   (2,485,812)   (2,352,448)   (104,921)   (4,943,181)

Operating loss

   (242,882)   (1,134,930)   (104,921)   (1,482,733)
Finance income (expenses), net   214,947    (134,115)   606,513    687,345 
Other (expenses) income, net   1,092,252    (2,083,604)   936,000    (55,352)
Income tax credit   -    2,012    -    2,012 
Net income (loss)   1,064,317    (3,350,637)   1,437,592    (848,728)

 

For the nine months ended September 30, 2021  CBAT   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $24,867,393   $-   $24,867,393 
Cost of revenues   (20,798,931)   -    (20,798,931)
Gross profit   4,068,462    -    4,068,462 
Total operating expenses   (8,468,184)   (1,525,717)   (9,993,901)
Operating loss   (4,399,722)   (1,525,717)   (5,925,439)
Finance income, net   166,532    7,910    174,442 
Other income, net   1,619,194    56,483,415    58,102,609 
Income tax (expense) credit   -    
-
    
-
 
Net (loss) income   (2,613,996)   54,965,608    52,351,612 

  

For the nine months ended September 30, 2022  CBAT   Hitrans   Corporate
unallocated
(note)		   Consolidated 
Net revenues  $66,582,060   $127,685,590   $-   $194,267,650 
Cost of revenues   (60,519,919)   (119,435,621)   -    (179,955,540)
Gross profit   6,062,141    8,249,969    -    14,312,110 
Total operating expenses   (8,754,644)   (7,382,703)   (848,268)   (16,985,615)
Operating (loss) income   (2,692,503)   867,266    (848,268)   (2,673,505)
Finance income (expenses), net   405,773    (333,680)   (224)   71,869 
Other (expenses) income, net   871,588    (2,036,682)   4,699,000    3,533,906 
Income tax expenses   -    (84,230)   -    (84,230)
Net (loss) income   (1,415,142)   (1,587,326)   3,850,508    848,040 
                     
As of September 30, 2022        
 
    
 
    
 
 
Identifiable long-lived assets   91,615,396    25,844,129    
-
    117,459,525 
Total assets   176,060,305    75,154,979    257,852    251,473,136 

 

Note:The Company does not allocate its assets located and expenses incurred outside China to its reportable segments because these assets and activities are managed at a corporate level.

 

Net revenues by product:

 

The Company’s products can be categorized into high power lithium batteries and materials used in manufacturing of lithium batteries. For the product sales of high power lithium batteries, the Company manufactured five types of Li-ion rechargeable batteries: aluminum-case cell, battery pack, cylindrical cell, lithium polymer cell and high-power lithium battery cell. The Company’s battery products are sold to packing plants operated by third parties primarily for use in mobile phones and other electronic devices. For the product sales of materials used in manufacturing of lithium batteries, the Company, via its subsidiary, Hitrans, manufactured cathode materials and precursor for use in manufacturing of cathode. Revenue from these products is as follows:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2021   2022   2021   2022 
High power lithium batteries used in:                
Electric vehicles  $6   $19,688   $101,378   $19,991 
Light electric vehicles   227,333    1,146,370    335,896    1,906,578 
Uninterruptable supplies   9,335,146    24,679,901    23,911,865    64,655,491 
Trading of raw material used in lithium batteries   (295)   
-
    518,254    
-
 
    9,562,190    25,845,959    24,867,393    66,582,060 
                     
Materials used in manufacturing of lithium batteries                    
Cathode   
-
    11,195,810    
-
    66,082,467 
Precursor   
-
    20,679,923    
-
    61,603,123 
    
-
    31,875,733    
-
    127,685,590 
Total consolidated revenue  $9,562,190   $57,721,692   $24,867,393   $194,267,650 

  

Net revenues by geographic area:

 

The Company’s operations are located in the PRC. The following table provides an analysis of the Company’s sales by geographical markets based on locations of customers:

 

   Three months ended   Nine months ended 
   September 30,   September 30, 
   2021   2022   2021   2022 
Mainland China  $8,302,259    42,538,023   $21,304,496   $157,154,465 
Europe   1,042,996    15,033,148    3,322,534    36,908,248 
Others   216,935    150,521    240,363    204,937 
Total  $9,562,190   $57,721,692   $24,867,393   $194,267,650 

 

Substantially all of the Company’s long-lived assets are located in the PRC.