Concentrations of Risk

3 Months Ended

Mar. 31, 2020

Concentrations of Risk

NOTE 11. Concentrations of Risk

The Company is exposed to the following concentrations of risk

(a) Major customers

For the three months ended March 31, 2020, three customers accounted for more than 10% of the Company’s total revenues, representing approximately 45%, 37% and 16% of its total revenues, and 94%, 5% and 0% of accounts receivable in aggregate at March 31, 2020.

Customer	Net sales for the three months ended March 31, 2020			Accounts receivable balance as of March 31, 2020
A	$	72,912	*	$	73,082
B	$	61,188		$	3,969
C	$	26,436		$	-

For the three months ended March 31, 2019, two customers accounted for more than 10% of the Company’s total revenues, represented approximately 46% and 41% of its total revenues and 23% and 60% of accounts receivable in aggregate at March 31, 2019, respectively.

Customer	Net sales for the three months ended March 31, 2019		Accounts receivable balance as of March 31, 2019
B	$	58,299	$	14,886
C	$	52,523	$	39,300

*Related party transactions (see Note 7).

(b) Major suppliers

For the three months ended March 31, 2020, one supplier accounted for more than 10% of the Company’s total net purchase, representing approximately 25% of total net purchase, and 0% of accounts payable in aggregate at March 31, 2020, respectively:

Supplier	Net purchase for the three months ended March 31, 2020		Accounts payable balance as of March 31, 2020
A	$	27,863	$	-

For the three months ended March 31, 2019, one supplier accounted for more than 10% of the Company’s total net purchase, representing approximately 17% of total net purchase, and 0% of accounts payable in aggregate at March 31, 2019, respectively:

Supplier	Net purchase for the three months ended March 31, 2019		Accounts payable balance as of March 31, 2019
B	$	15,385	$	-

(c) Credit risk

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d) Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from finance lease. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of March 31, 2020 and December 31, 2019 borrowing under finance lease was at fixed rate.