Concentrations and Credit Risk

6 Months Ended

Jun. 30, 2019

Concentrations and Credit Risk [Abstract]

Concentrations and Credit Risk

21. 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 June 30, 2018 and 2019 as follows:

	Three months ended June 30,
	2018				2019
Customer A	$	2,540,634	41.99	%	$	2,633,652	61.66	%
Customer D		1,469,592	24.29	%		*	*
Shenzhen BAK		*	*			769,052	18.01	%

* 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 six months ended June 30, 2018 and 2019 as follows:

	Six months ended June 30,
	2018				2019
Customer A	$	3,702,680	39.55	%	$	3,875,327	41.04	%
Customer D		1,474,860	15.75	%
Customer E		*	*			1,527,998	16.18	%
Customer F		*	*			1,066,260	11.29	%
Customer G		*	*			1,025,998	10.87	%

* 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 as of December 31, 2018 and June 30, 2019 as follows:

	December 31, 2018				June 30, 2019
Customer A	$	1,769,416	11.49	%	$	2,791,799	18.47	%
Customer B		4,283,023	27.82	%		4,290,917	28.38	%
Customer C		2,293,257	14.89	%		2,362,341	15.63	%

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

For the three and six months ended June 30, 2018 and 2019, the Company recorded the following transactions:

	Three months ended June 30,				Six months ended June 30,
	2018		2019		2018		2019
Purchase of inventories from
Shenzhen BAK	$	111,548	$	65,102	$	111,548	$	65,102
Zhengzhou BAK Battery Co., Ltd*		2,116,111		-		2,116,111		-
Sales of finished goods to
BAK Tianjin		17,457		-		27,537		-
Shenzhen BAK		-		685,211		-		769,052

* Mr. Xiangqian Li, the former CEO, is a director of this 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, 2018 and June 30, 2019, 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.