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Concentration of Business and Credit Risk
12 Months Ended
Dec. 31, 2018
Risks and Uncertainties [Abstract]  
Concentration of Business and Credit Risk

(5) Concentration of Business and Credit Risk

 

Most of the Company's bank accounts are in banks located in the PRC and are not covered by any type of protection similar to that provided by the Federal Deposit Insurance Corporation ("FDIC") on funds held in U.S. banks. The Company's bank account in the United States is covered by FDIC insurance.

 

Because the Company's operations are located in the PRC, this may give rise to significant foreign currency risks due to fluctuations in and the volatility of foreign exchange rates between U.S. dollars and RMB.

 

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, trade accounts receivables and inventories, the balances of which are stated on the balance sheet. The Company places its cash in banks located in China. Concentration of credit risk with respect to trade accounts receivables is limited due to the diversity of the Company's customers who are located in different regions of China. The Company does not require collateral or other security to support financial instruments subject to credit risk.

 

Sales to certain customers generated over 10% of the Company's total net sales. Sales to one Company for the year ended December 31, 2018 were approximately 91% of the Company's net sales.

 

Sales to certain customers generated over 10% of the Company's total net sales. Sales to one Company for the year ended December 31, 2017 were approximately 68% of the Company's net sales. Sales to another Company for the year ended December 31, 2017 were approximately 20% of the Company's net sales.

 

For the year ended December 31, 2018, one supplier accounted for approximately 93% of total purchases.

 

For the year ended December 31, 2017, three suppliers accounted for approximately 93% of total purchases.