ToughBuilt Industries, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

CONCENTRATIONS

CONCENTRATIONS

9 Months Ended

Sep. 30, 2021

Risks and Uncertainties [Abstract]

CONCENTRATIONS

NOTE 8: CONCENTRATIONS

Concentration of Purchase Order Financing

The Company used a third-party financing company for the quarters ended September 30, 2021which provided letters of credit to vendors for a fee against the purchase orders received by the Company for sale of products to its customers. The letters of credit were issued to the vendors to manufacture Company’s products pursuant to the purchase orders received by the Company.

Concentration of Customers

For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of customers:

	Percentage of						Percentage of
	revenues for the						revenues for the						Percentage of accounts
	Three Months Ended						Nine Months Ended						receivables as of
	September 30,						September 30,						September 30,			December 31,
	2021			2020			2021			2020			2021			2020
Customer 1		12	%		14	%		9	%		16	%		8	%		16	%
Customer 2		10	%		5	%		9	%		10	%		10	%		8	%
Customer 3		15	%		11	%		16	%		15	%		9	%		6	%
Customer 4		35	%		49	%		36	%		30	%		40	%		39	%

Concentration of Suppliers

For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of suppliers:

	Percentage of						Percentage of
	purchases for the						purchases for the						Percentage of accounts
	Three Months Ended						Nine Months Ended						payable as of
	September 30,						September 30,						September 30,			December 31,
	2021			2020			2021			2020			2021			2020
Supplier 1		29	%		30	%		33	%		26	%		24	%		16	%
Supplier 2		28	%		13	%		21	%		19	%		22	%		14	%
Supplier 3		11	%		13	%		11	%		13	%		9	%		6	%
Supplier 4		0	%		12	%		0	%		17	%		0	%		18	%
Supplier 5		10	%		0	%		5	%		0	%		8	%		2	%
Supplier 6		4	%		0	%		14	%		0	%		3	%		0	%

Concentration of Credit Risk

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through September 30, 2021 and 2020. The Company’s bank balances exceeded FDIC insured amounts at times during the nine months ended September 30, 2021 and 2020. The Company’s bank balance exceeded the FDIC insured amounts as of September 30, 2021 by approximately $31 million.

Geographic Concentration

For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following geographic concentrations:

	Percentage of revenues for the						Percentage of revenues for the						Percentage of accounts
	Three Months Ended						Nine Months Ended						receivables as of
	September 30,						September 30,						September 30,			December 31,
	2021			2020			2021			2020			2021			2020
Australia		0	%		2	%		2	%		3	%		0	%		2	%
Canada		3	%		4	%		4	%		5	%		6	%		5	%
Europe		5	%		4	%		9	%		3	%		4	%		3	%
United States of America		80	%		85	%		78	%		80	%		78	%		82	%
Other		12	%		5	%		7	%		9	%		12	%		8	%