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Concentrations and Credit Risk

12 Months Ended

Dec. 31, 2022

28. Concentrations and Credit Risk

(a)

Concentrations

The Company had the following customers that individually comprised 10% or more of net revenue for the years ended December 31, 2021 and 2022 as follows:

	Year ended					Year ended
Sales of finished goods and raw materials	December 31, 2021					December 31, 2022
Customer B	*		*			28,071,738		11.29 %
Customer C		6,089,524		11.56	%		*		*
Customer D		5,508,616		10.46	%		57,856,658		23.26	%
Zhengzhou BAK Battery Co., Ltd (note 17)		8,339,088		15.83	%		53,236,804		21.40	%

*	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 trade receivable (included VAT) as of December 31, 2021 and 2022 as follows:

	December 31, 2021				December 31, 2022
Customer A	$	*	*		$	4,004,880	18.94	%
Customer D		14,443,551	32.76	%		*	*
Zhengzhou BAK Battery Co., Ltd (note 17)		14,583,061	33.08	%		9,156,383	43.30	%

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

The Company had the following suppliers that individually comprised 10% or more of net purchase for the years ended December 31, 2021 and 2022 as follows:

	Year ended December 31, 2021				Year ended December 31, 2022
Supplier A	$	6,550,080	13.92	%	$	32,492,418	13.91	%
Supplier B		5,883,999	12.50	%		*	*
Zhengzhou BAK Battery Co., Ltd (note 17)		5,522,832	11.74	%		26,819,454	11.48	%
Supplier C		*	*			24,720,344	10.58	%

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

The Company had the following suppliers that individually comprised 10% or more of trade payable as of December 31, 2021 and 2022 as follows:

	December 31, 2021				December 31, 2022
Supplier A	$	6,837,722	16.94	%	$	*	*
Supplier B		20,592,979	51.03	%		*	*
Supplier C		*	*			4,064,942	12.50	%
Zhengzhou BAK Battery Co., Ltd (note 17)		*	*			5,629,343	17.31	%

(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 2022 substantially all of the Company’s cash and cash equivalents were held by major financial institutions and online payment platforms located in the PRC, which management believes are of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date. The Company does not require collateral or other securities to support financial instruments that are subject to credit risk.

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.