v3.25.2
Concentration of Risk
 6 Months Ended
Jun. 30, 2025
Concentration 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 June 30, 2025 and December 31, 2024, $8,498 and $414,938, respectively, were deposited with various major financial institutions in the United States. The amount in excess of the FDIC insurance was $0 as of June 30, 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 and six months ended June 30, 2025 and during the three and six months ended June 30, 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
June 30,
2025		   For the
Six Months ended
June 30,
2025		   As of
June 30,
2025		 
   Percentage of
Revenue		   Percentage of
Revenue		   Percentage of
Account
Receivable		 
Customer A   <10%   <10%   31%
Customer C   15%   34%   <10%
Customer K   <10%   <10%   11%
Customer L   <10%   10%   <10%
Iluminar   16%   <10%   29%

 

   For the
Three Month ended
June 30,
2024		   For the
Six months ended
June 30,
2024		   As of
December 31,
2024		 
   Percentage of
Revenue		   Percentage of
Revenue		   Percentage of
Account
Receivable		 
Customer A   39%   24%   31%
Customer C   15%   11%   <10 %
Iluminar   17%   18%   35%

 

During the three and six months ended June 30, 2024 and during the three and six months ended June 30, 2024, the major vendors of the Company are as below. Both Megaphoton 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
June 30,
2025		   For the
Six months ended
June 30,
2025		   As of
June 30,
2025		 
   Percentage of
Purchase		   Percentage of
Purchase		   Percentage of
Account
Payable		 
Vendor A   <10%   <10%   11%
Vendor E   <10%   54%   <10%
Vendor F   100%   <10%   <10%
Iluminar   <10%   42%   <10%
Megaphoton Inc.   <10%   <10%   54%

 

   For the
Three Months ended
June 30,
2024		   For the
Six Months ended
June 30,
2024		   As of
December 31,
2024		 
   Percentage of
Purchase		   Percentage of 
Purchase		   Percentage of
Account
Payable		 
Vendor A   29%   48%   20%
Vendor C   57%   38%   13%
Megaphoton Inc.   <10%   <10%   49%
Uninet Global Inc.   <10%   <10%   <10%