Payables to Former Subsidiaries

9 Months Ended

Sep. 30, 2018

Payables to Former Subsidiaries [Text Block]

6. Payables to Former Subsidiaries

Payable to former subsidiaries as of December 31, 2017 and September 30, 2018 consisted of the following:

		December 31,		September 30,
		2017		2018
BAK Tianjin	$	282,682	$	161,033
BAK Shenzhen		22,020,039		1,094,011
	$	22,302,721	$	1,255,044

Balance as of December 31, 2017 and September 30, 2018 consisted of payables for purchase of inventories from BAK Tianjin and BAK Shenzhen. From time to time, the Company purchased products from these former subsidiaries that they did not produce to meet the needs of its customers.

In the third quarter of 2018, the Company disposed of its patented proprietary technology of high capacity prismatic batteries to BAK Shenzhen at a cash consideration of $13,034,583 (approximately RMB85.1 million). The Company recognized a net gain of $12,296,776, which was included in other income for the three and nine months ended September 30, 2018. The Company and BAK Shenzhen agreed to offset the cash consideration of $13,034,583 against the amount owed by the Company to BAK Shenzhen.