v3.26.1
Concentration of Risk
 9 Months Ended
Sep. 30, 2025
Concentration of Risk [Abstract]  
Concentration of risk

Note 17 — 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 September 30, 2025 and December 31, 2024, $59,473 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 September 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 nine months ended September 30, 2025 and during the three and nine months ended September 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 13— Related party transactions.

 

   For the
Three Months
ended
September 30,
2025		   For the
Nine Months
ended
September 30,
2025		   As of
September 30,
2025		 
   Percentage
of
Revenue		   Percentage
of
Revenue		   Percentage
of
Account
Receivable		 
Customer A   <10%   <10%   34%
Customer C   43%   34%   <10%
Customer M   15%   <10%   <10%
Customer N   11%   <10%   <10%
Iluminar   <10%   <10%   30%

 

 

   For the
Three Months
ended
September 30,
2024		   For the
Nine Months
ended
September 30,
2024		   As of
December 31,
2024		 
   Percentage
of
Revenue		   Percentage
of
Revenue		   Percentage of
Account
Receivable		 
Iluminar   37%   25%   35%
Customer A   15%   21%   31%
Customer C   <10%   10%   <10%

 

During the three and nine months ended September 30, 2025 and during the three and nine months ended September 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 13— Related party transactions, and all purchases from Uninet Global Inc. are products originally manufactured by Megaphoton Inc.

 

   For the
Three Months
ended September  30,
2025		   For the
Nine Months
ended
September  30,
2025		   As of
September 30,
2025		 
   Percentage of
Purchase		   Percentage of
Purchase		   Percentage of
Account
Payable		 
Vendor A   <10%   <10%   10%
Vendor E   <10%   54%   <10%
Iluminar   <10%   42%   <10%
Megaphoton Inc.   <10%   <10%   55%

 

   For the
Three  Months
ended September 30,
2024		   For the
Nine Months
ended
September 30,
2024		   As of
December 31,
2024		 
   Percentage of
Purchase		   Percentage of
Purchase		   Percentage of
Account
Payable		 
Vendor A   31%   42%   20%
Vendor B   25%   <10%   <10%
Vendor E   18%   31%   <10%
Vendor F   11%   <10%   <10%
Megaphoton Inc.   <10%   <10%   49%