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Concentrations and Credit Risk

3 Months Ended

Mar. 31, 2023

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 March 31, 2022 and 2023 as follows:

	Three months ended March 31,
Sales of finished goods and raw materials	2022					2023
Customer A	*		*			13,947,344		32.90		%
Customer B		27,993,072		34.91	%		*		*
Zhengzhou BAK Battery Co., Ltd (note 15)		25,823,532		32.20	%		9,323,839		21.99	%

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, 2022 and March 31, 2023 as follows:

	December 31, 2022				March 31, 2023
Customer A	$	4,004,880	18.94	%	$	*	*
Customer C		*	*			3,283,494	14.18	%
Zhengzhou BAK Battery Co., Ltd (note 15)		9,156,383	43.30	%		14,251,802	61.56	%

*	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 three months ended March 31, 2022 and 2023 as follows:

	Three months ended March 31,
	2022				2023
Supplier A	$	*	*		$	5,532,709	15.38	%
Supplier B		20,631,815	25.30	%		*	*
Supplier C		19,332,674	23.71	%		6,580,232	18.29	%

*	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, 2022 and March 31, 2023 as follows:

	December 31, 2022				March 31, 2023
Supplier A	$	4,064,942	12.50	%	$	4,702,179	13.16	%
Supplier C		*	*			5,612,973	15.71	%
Zhengzhou BAK Battery Co., Ltd (note 15)		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, 2022 and March 31, 2023, 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.