Loans

3 Months Ended

Mar. 31, 2018

Loans [Text Block]

12. Loans

Bank loans:

Bank borrowings as of December 31, 2017 and March 31, 2018 consisted of the followings

		December 31, 2017		March 31, 2018
Long-term bank borrowings	$	19,489,702	$	20,206,205

On June 14, 2016, the Company renewed its banking facilities from Bank of Dandong for loans with a maximum amount of RMB130 million (approximately $20.7 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. The banking facilities were guaranteed by Mr. Yunfei Li (“Mr. Li”), the Company’s CEO, and Ms. Qinghui Yuan, Mr. Li’s wife, Mr. Xianqian Li, the Company’s former CEO, Ms. Xiaoqiu Yu, the wife of the Company’s former CEO, Shenzhen BAK Battery Co., Ltd., the Company’s former subsidiary (“Shenzhen BAK”). Under the banking facilities, the Company borrowed various three-year term bank loans that totaled RMB126.8 million (approximately $20.2 million), bearing fixed interest at 7.2% per annum, left facilities of RMB3.2 million (approximately $0.5 million) for bank acceptance and letters of credit bills. Under the facilities, as of March 31, 2018, the Company borrowed a series of revolving bank acceptance totaled $0.2 million from Bank of Dandong and bank deposit of approximately 50% was pledged against these bank acceptance bills.

On July 6, 2016, the Company obtained banking facilities from Bank of Dalian for loans with a maximum amount of RMB10 million (approximately $1.6 million) and bank acceptance bills of RMB40 million (approximately $6.4 million) to July 5, 2017. The banking facilities were guaranteed by Mr. Li, the Company’s CEO, and Ms. Qinghui Yuan, Mr. Li’s wife, and Shenzhen BAK. Under the banking facilities, on July 6, 2016 the Company borrowed one year short-term loan of RMB10 million (approximately $1.6 million), bearing a fixed interest rate at 6.525% per annum. The Company also borrowed revolving bank acceptance totaled $6.4 million, and bank deposit of 50% was required to secure against these bank acceptance bills. The Company repaid the loan and bank acceptance bills in July and August 2017.

On November 9, 2017, the Company obtained banking facilities from China Everbright Bank Dalian Branch with a maximum amount of RMB100 million (approximately $15.9 million) with the term expiring on November 7, 2018. The banking facilities were secured by the 100% equity in CBAK Power held by BAK Asia. As of March 31, 2018, the Company borrowed a net letter of credit of RMB97.3 million (approximately $15.5 million) to November 5, 2018. Under the facilities, bank deposits of approximately 50% was required to secure against this letter of credit. The Company discounted this letter of credit of even date to China Everbright Bank at a rate of 4.505% .

On August 2, 2017, the Company obtained one-year term facilities from China Merchants Bank with a maximum amount of RMB100 million (approximately $15.9 million) including revolving loans, trade finance, notes discount, and acceptance of commercial bills etc. Any amount drawn under the facilities requires security in the form of cash or banking acceptance bills receivable of at least the same amount. Under the facilities, as of March 31, 2018, the Company borrowed a series of bank acceptance bills from China Merchants Bank totaled RMB62.8 million (approximately $10 million) and pledged $9 million of its bills receivables and $1 million bank deposits.

During the first quarter of 2018, the Company also obtained banking facilities from Bank of Dandong with bank acceptance bills of RMB10 million (approximately $1.6 million) for a term until June 28, 2018. The banking facilities were pledged by its bills receivables totaled $1.6 million. Under the facilities, as of March 31, 2018, the Company borrowed bank acceptance totaled $1.6 million.

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

		December 31, 2017		March 31, 2018
Pledged deposits (note 2)	$	7,808,329	$	9,134,019
Prepaid land use rights (note 9)		8,044,935		8,295,931
Buildings		18,391,993		18,781,963
Machinery and equipment		2,374,748		2,359,392
Bills receivable (note 3)		19,047,471		10,564,411
	$	55,667,476	$	49,135,716

As of March 31, 2018, the Company had unutilized committed banking facilities of $6.2 million.

During the three months ended March 31, 2017 and 2018, interest of $358,960 and $530,456, respectively, was incurred on the Company's bank borrowings.

Other Short-term Loans

Other short-term loans as of December 31, 2017 and March 31, 2018 consisted of the following:

			December 31,		March 31,
	Note		2017		2018
Advance from related parties
– Tianjin BAK New Energy Research Institute Co., Ltd (“Tianjin New Energy”)	(a)	$	11,493,437	$	14,465,652
– Mr. Xiangqian Li, the Company’s Former CEO	(b)		100,000		100,000
– Mr. Yunfei Li, the Company’s CEO	(c)		-		127,484
– Shareholders	(d)		2,151,860		2,230,969
			13,745,297		16,924,105
Advances from unrelated third party
– Mr. Wenwu Yu	(e)		155,215		160,921
– Mr. Mingzhe Li	(e)		44,269		45,896
– Ms. Longqian Peng	(e)		691,669		717,097
			891,153		923,914
		$	14,636,450	$	17,848,019

(a)	The Company received advances from Tianjin New Energy, a related company under the control of Mr. Xiangqian Li, the Company’s former CEO, which was unsecured, non-interest bearing and repayable on demand. On November 1, 2016, Mr. Xiangqian Li ceased to be a shareholder but remained as a general manager of Tianjin New Energy.
(b)	Advances from Mr. Xiangqian Li, the Company’s former CEO, was unsecured, non-interest bearing and repayable on demand.
(c)	Advances from Mr. Yunfei Li, the Company’s CEO, was unsecured, non-interest bearing and repayable on demand.
(d)	The refundable deposits paid by certain shareholders in relation to share purchase (note 1) were unsecured, non-interest bearing and repayable on demand.
(e)	Advances from unrelated third parties were unsecured, non-interest bearing and repayable on demand.