Bank Loans

6 Months Ended

Jun. 30, 2017

Bank Loans [Text Block]

11. Bank Loans

Bank borrowings as of December 31, 2016 and June 30, 2017 consisted of the followings:

		December 31,		June 30,
		2016		2017
Short-term bank borrowings	$	1,439,947	$	1,474,796
Long-term bank borrowings		18,258,528		18,700,410
	$	19,698,475	$	20,175,206

On June 10 and 15, 2016, the Company repaid Bank of Dandong the one-year short term loans of RMB30 million and RMB50 million, respectively, obtained under its banking facilities in June 2015. On June 14, 2016, the Company renewed its banking facilities from Bank of Dandong to provide a maximum amount of RMB130 million (approximately $19.2 million), including three-year long-term loans and three-year revolving bank acceptance and letters of credit bills for the period from June 13, 2016 to June 12, 2019. Under the banking facilities, from June to September 2016, the Company borrowed various three-year bank loans that totaled RMB126.8 million (approximately $18.7 million), bearing fixed interest at 7.2% per annum. The banking facilities were guaranteed by Mr. Xianqian Li, our former CEO, Ms. Xiaoqiu Yu, the wife of the Company’s former CEO, Shenzhen BAK, Mr. Yunfei Li, the Company’s CEO, and Ms. Qinghui Yuan, Mr. Yunfei Li’s wife.

On July 6, 2016, the Company obtained new banking facilities from Bank of Dalian to provide a maximum loan amount of RMB10 million (approximately $1.5 million) and bank acceptance of RMB40 million (approximately $5.9 million) to July 2017. The banking facilities were guaranteed by Shenzhen BAK, Mr. Yunfei Li, our CEO, and Ms. Qinghui Yuan, Mr. Yunfei Li’s wife. On July 6, 2016, the Company borrowed a one-year term bank loan of RMB10 million (approximately $1.5 million), bearing fixed interest at 6.525% per annum. The Company repaid the loan in July 2017 and it was still in progress to extend the banking facilities.

The facilities were also secured by the Company’s assets with the following carrying amounts:

		December 31,		June 30,
		2016		2017
Pledged deposits (note 2)	$	3,064,155	$	3,383,025
Prepaid land use rights (note 9)		7,698,523		7,801,985
Buildings		11,729,172		11,740,821
Machinery and equipment		2,598,882		2,920,192
Construction in progress		6,156,488		6,206,535
		31,247,220		32,052,558

As of June 30, 2017, the Company had unutilized committed banking facilities of $0.1 million.

During the three months ended June 30, 2016 and 2017, interest of $241,652 and $344,552, respectively, was incurred on the Company's bank borrowings.

During the six months ended June 30, 2016 and 2017, interest of $483,990 and $703,512, respectively, was incurred on the Company's bank borrowings.