Credit Risk and Concentrations

12 Months Ended

Dec. 31, 2022

Credit Risk and Concentrations [Abstract]

Credit Risk and Concentrations

Note 7 — Credit Risk and Concentrations

Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited.

The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash.

The following table sets forth the percentages of sales derived by SGS from those customers that accounted for at least 10% of sales for the years ended December 31, 2022, and 2021 (in thousands of dollars):

	The Years Ended
	December 31, 2022					December 31, 2021
	$		%			$		%
Customer A		4,388		26	%		4,826		44	%
Customer B		10,421		61	%		2,946		27	%

As of December 31, 2022, Customer A and Customer B represented approximately 61% and 30% of total accounts receivable, respectively.

As of December 31, 2021, Customer A represented approximately 72% of total accounts receivable. One other customer represented approximately 11% of total accounts receivable.

For the year ended December 31, 2022, three vendors represented approximately 41%, 35%, and 12% of total purchases. Purchases from these vendors during the year ended December 31, 2022, were $9.5 million, $8.1 million, and $2.9 million respectively.

For the year ended December 31, 2021, three vendors represented approximately 36%, 25%, and 25% of total purchases. Purchases from these vendors during the year ended December 31, 2021, were $3.8 million, $2.6 million, and $2.6 million respectively. 

Geographic and Technology Concentration

The Company had geographic diversity between April 1, 2021, and June 30, 2022, using a colocation datacenter in North Carolina. After June 30, 2022, the Company had consolidated its mining operations exclusively in New York.

Further, the Company had concentrated exposure to the Ethereum blockchain infrastructure through its mining operations during the periods presented. On September 15, 2022, the Ethereum blockchain transitioned to proof-of-stake which adversely affected our business and our ability to generate revenues. The Company is no longer able to mine Ethereum. TTM Digital assets operations are classified as discontinued operations.