v3.25.1
Concentration of Risk
 3 Months Ended 12 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Concentrations of Risk [Abstract]    
Concentration of risk

Note 14 — Concentration of risk

 

Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

 

As of March 31, 2025 and December 31, 2024, $16,224 and $414,938, respectively, were deposited with various major financial institutions in the United States. The amount in excess of the FDIC insurance was nil as of March 31, 2025 and December 31, 2024.

 

Accounts receivable is typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations.

Customer and vendor concentration risk

 

During the three months ended March 31, 2025 and 2024, the major customers of the Company are as below. Iluminar is a related party of the Company since April 11, 2023, as disclosed in Note 11— Related party transactions.

 

    For the
Three Months ended
March 31,
2025		     As of
March 31,
2025  		 
    Percentage of
Revenue		     Percentage of
Account
Receivable  		 
Customer A   <10%   33%
Customer C   42%   <10%
Customer K   <10%   10%
Customer L   14%   <10%
Iluminar   <10%   30%

  

   For the
Three Month ended
March 31,
2024		   As of
March 31,
2024		 
   Percentage of
Revenue		   Percentage of
Account
Receivable		 
Customer C   <10%   18%
Customer G   <10%   41%
Customer H   <10%   16%
Customer I   <10%   13%
Customer J   15%   <10%
Iluminar   19%   23%

  

During the three months ended March 31, 2025 and 2024, the major vendors of the Company are as below. Both Ilumionar and Uninet Global Inc. are related parties of the Company (Megaphoton is no longer a related party of the Company after April 2023), as disclosed in Note 11— Related party transactions, and all purchases from Uninet Global Inc. are products originally manufactured by Megaphoton Inc.

 

   For the
Three Months
ended
March 31, 2025		   As of
March 31,
2025		 
   Percentage of Purchase   Percentage of Account  Payable 
Vendor A   <10%   12%
Vendor E   42%   <10%
Iluminar   33%   <10%
Megaphoton Inc.   <10%   53%

 

   For the
Three Months
ended
March 31,
2024		   As of
March 31,
2024		 
   Percentage of Purchase   Percentage of Account  Payable 
Vendor A   88%   <10%
Vendor C   11%   <10%
Megaphoton Inc.   <10%   52%
Uninet Global Inc.   <10%   27%

Note 15 — Concentration of risk

 

Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

 

As of December 31, 2024 and 2023, $414,938 and $219,553, respectively, were deposited with various major financial institutions in the United States. The amount in excess of the FDIC insurance was nil as of December 31, 2024 and 2023.

 

Accounts receivable is typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations.

 

Customer and vendor concentration risk

 

During the years ended December 31, 2024 and 2023, the major customers of the Company are as below. Iluminar is a related party of the Company since April 11, 2023, as disclosed in Note 12— Related party transactions.

 

    For the
year ended
December 31,
2024		     As of
December 31,
2024		  
    Percentage of
Revenue		     Percentage of
Account
Receivable		  
Customer A     12 %     31 %
Customer C     12 %     <10 %
Iluminar     17 %     35 %

 

   For the
year ended
December 31,
2023		   As of
December 31,
2023		 
   Percentage of
Revenue		   Percentage of
Account
Receivable		 
Customer C   13%   13%
Customer G   

<10

%   31%
Customer H   

<10

%   12%
Customer I   

<10

%   10%
Iluminar   

<10

%   18%

During the years ended December 31, 2024 and 2023, the major vendors of the Company are as below. Both Megaphoton, Ilumionar and Uninet Global Inc. are related parties of the Company (Megaphoton is no longer a related party of the Company after April 2023), as disclosed in Note 12— Related party transactions, and all purchases from Uninet Global Inc. are products originally manufactured by Megaphoton Inc.

 

   For the
year ended
December 31,
2024		   As of
December 31,
2024		 
   Percentage of
Purchase		   Percentage of
Account 
Payable		 

Vendor A

   53%   20%

Vendor C

   22%   13%
Iluminar   

<10

%   <10%
Megaphoton Inc.   

<10

%   49%

 

   For the
year ended
December 31,
2023		   As of
December 31,
2023		 
   Percentage of
Purchase		   Percentage of
Account 
Payable		 
Vendor A   52%   <10%
Vendor B   25%   <10%
Megaphoton Inc.   <10%   57%
Uninet Global Inc.   <10%   20%