Concentrations and Credit Risk

3 Months Ended

Mar. 31, 2018

Concentrations and Credit Risk [Text Block]

21. Concentrations and Credit Risk

(a) Concentrations

The Company had the following customers that individually comprised 10% or more of net revenue for the three months ended March 31, 2017 and 2018 as follows:

		Three months ended March 31,
		2017			2018
Customer A	$	*	*	$	1,162,051	35.08%
Customer B		*	*		693,347	20.93%
Customer C		*	*		383,773	11.58%
Customer D		*	*		374,213	11.30%
Customer E		3,110,679	83.71%		*	*

* Comprised less than 10% of net revenue for the respective period.

The Company had the following customers that individually comprised 10% or more of accounts receivable as of December 31, 2017 and March 31, 2018 as follows:

		December 31, 2017			March 31, 2018
Customer F	$	23,835,201	62.08%	$	24,711,459	74.8%
Customer G		4,855,518	12.65%		3,870,731	11.7%
Customer H		4,664,285	12.15%		*	*

* Comprised less than 10% of account receivable for the respective period.

For the three months ended March 31, 2017 and 2018, the Company recorded the following transactions:

		Three months ended March 31,
		2017		2018
Purchase of inventories from
BAK Tianjin	$	-	$	480
Shenzhen BAK		2,362,444		-
Zhengzhou BAK Battery Co., Ltd*		12,457		-
Sales of finished goods to
BAK Tianjin		26,546		10,080
Shenzhen BAK		60,797		-
Zhengzhou BAK Battery Co., Ltd*	$	13,648	$	-

*Mr. Xiangqian Li, the former CEO, is a director of this company.

(b)	Credit Risk
	Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents and pledged deposits. As of December 31, 2017 and March 31, 2018, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, which management believes are of high credit quality.
	For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its customers and, if necessary, maintains reserves for potential credit losses. Historically, such losses have been within management’s expectations.