Loans

3 Months Ended

Mar. 31, 2020

Loans [Abstract]

Loans

12. Loans

Bank loans:

Bank borrowings as of December 31, 2019 and March 31, 2020 consisted of the followings

	December 31, 2019		March 31, 2020
Short-term bank loan	$	5,730,289	$	5,635,673
Current maturities of long-term bank loans		10,844,463		10,665,405
Long-term bank borrowings		9,519,029		9,361,855
	$	26,093,781	$	25,662,933

On June 4, 2018, the Company obtained banking facilities from China Everbright Bank Dalian Branch with a maximum amount of RMB200 million (approximately $28.3 million) with the term from June 12, 2018 to June 10, 2021, bearing interest at 130% of benchmark rate of the People's Bank of China ("PBOC") for three-year long-term loans, at current rate 6.175% per annum. The loans are repayable in six installments of RMB0.8 million ($0.11 million) on December 10, 2018, RMB24.3 million ($3.43 million) on June 10, 2019, RMB0.8 million ($0.11 million) on December 10, 2019, RMB74.7 million ($10.6 million) on June 10, 2020, RMB0.8 million ($0.11 million) on December 10, 2020 and RMB66.3 million ($9.4 million) on June 10, 2021. Under the facilities, the Company borrowed RMB141.8 million (approximately $20.03 million) as of March 31, 2020. The facilities were secured by the Company's land use rights, buildings, machinery and equipment. The Company repaid the bank loan of RMB0.8 million ($0.11 million), RMB24.3 million ($3.43 million) and RMB0.8 million ($0.11 million) on December 2018, June 2019 and December 2019 respectively. 

On June 28, 2020, the Company entered into a supplemental agreement with China Everbright Bank Dalian Branch to change the repayment schedule. According to the agreement, RMB141.8 million (approximately $20.03 million) loans are repayable in eight instalments consisting of RMB1.09 million ($0.15 million) on June 10, 2020, RMB 1 million ($0.14 million) on December 10, 2020, RMB2 million ($0.28 million) on January 10, 2021, RMB2 million ($0.28 million) on February 10, 2021, RMB2 million ($0.28 million) on March 10, 2021, RMB2 million ($0.28 million) on April 10, 2021, RMB2 million ($0.28 million) on May 10, 2021, and RMB129.7 million ($18.3 million) on June 10, 2021, respectively. The Company repaid RMB1.09 million ($0.15 million) on June 28, 2020.

Further, in August 2018, the Company borrowed a total of RMB60 million (approximately $8.5 million) in the form of bills payable from China Everbright Bank Dalian Branch for a term until August 14, 2019, which was secured by the Company's cash totaled $8.5 million. The Company discounted these two bills payable of even date to China Everbright Bank at a rate of 4.0%. The Company repaid these bills payable in August 2019.

On August 22, 2018, the Company obtained one-year term facilities from China Everbright Bank Dalian Branch with a maximum amount of RMB100 million (approximately $14.1 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 receivables of at least the same amount. Under the facilities, as of December 31, 2018, the Company borrowed a series of bank acceptance bills totaled RMB28.8 million (approximately $4.1 million) for a term until March 7, 2019, which was secured by bills receivable of $4.1 million. The Company repaid the bank acceptance bills on March 7, 2019.

In November 2018, the Company borrowed a total of RMB100 million (approximately $14.1 million) in the form of bills payable from China Everbright Bank Dalian Branch for a term until November 12, 2019, which was secured by the Company's cash totaled RMB 50 million (approximately $7.1 million) and the 100% equity in CBAK Power held by BAK Asia. The Company discounted the bills payable of even date to China Everbright Bank at a rate of 4.0%. The Company repaid these bills payable in November 2019.

The Company also borrowed a series of acceptance bills from Industrial Bank Co., Ltd. Dalian Branch totaled RMB1.5 million (approximately $0.2 million) for various terms through May 21, 2019, which was secured by bills receivable of RMB1.5 million (approximately $0.2 million). The Company repaid the bank acceptance bills on May 21, 2019.

In October 2019, the Company borrowed a total of RMB28 million (approximately $4.0 million) in the form of bills payable from China Everbright Bank Dalian Branch for a term until October 15, 2020, which was secured by the Company's cash totaled RMB28 million (approximately $4.0 million). The Company discounted these bills payable of even date to China Everbright Bank at a rate of 3.30%.

In December 2019, the Company obtained banking facilities from China Everbright Bank Dalian Friendship Branch totaled RMB39.9 million (approximately $5.6 million) for a term until November 6, 2020, bearing interest at 5.655% per annum. The facility was secured by 100% equity in CBAK Power held by BAK Asia and buildings of Hubei BAK Real Estate Co., Ltd., which Mr. Yunfei Li ("Mr. Li"), the Company's CEO holding 15% equity interest. Under the facilities, the Company borrowed RMB39.9 million (approximately $5.6 million) on December 30, 2019.

	December 31, 2019		March 31, 2020
Pledged deposits (note 2)	$	4,021,255	$	3,954,858
Right-of-use assets (note 9)		7,194,195		7,035,733
Buildings		17,683,961		17,257,055
Machinery and equipment		7,196,810		6,888,037
	$	36,096,221	$	35,135,683

As of March 31, 2020, the Company had unutilized committed banking facilities of $6.8 million.

During the three months ended March 31, 2019 and 2020, interest of $381,275 and $397,206, respectively, was incurred on the Company's bank borrowings.

Other Short-term Loans

Other short-term loans as of December 31, 2019 and March 31, 2020 consisted of the following:

		December 31,		March 31,
	Note	2019		2020
Advance from related parties
– Mr. Xiangqian Li, the Company's Former CEO	(a)		100,000		100,000
– Mr. Yunfei Li	(b)		212,470		411,083
– Shareholders	(c)		86,679		85,248
			399,149		596,331
Advances from unrelated third party
– Mr. Wenwu Yu	(d)		30,135		29,637
– Mr. Longqian Peng	(d)		646,273		635,602
– Mr. Shulin Yu	(e)		517,018		508,482
– Jilin Province Trust Co. Ltd	(f)		5,687,204		3,418,127
– Suzhou Zhengyuanwei Needle Ce Co., Ltd	(g)		71,808		70,622
			6,952,438		4,662,470
		$	7,351,587	$	5,258,801

(a) Advances from Mr. Xiangqian Li, the Company's former CEO, was unsecured, non-interest bearing and repayable on demand.

(b) Advances from Mr. Yunfei Li, the Company's CEO, was unsecured, non-interest bearing and repayable on demand.

(c) The earnest money paid by certain shareholders in relation to share purchase (note 1) were unsecured, non-interest bearing and repayable on demand.   In 2019, according to the investment agreements and agreed by the investors, the Company returned partial earnest money of $943,015 (approximately RMB6.7 million) to these investors.   On October 14, 2019, the Company entered into a cancellation agreement with Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen (the creditors). Pursuant to the terms of the cancellation agreement, Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen agreed to cancel and convert the Fifth Debt (note 1) and the Unpaid Earnest Money in exchange for 528,053, 3,536,068, 2,267,798 and 2,267,798 shares of common stock of the Company, respectively, at an exchange price of $0.6 per share. Upon receipt of the shares, the creditors will release the Company from any claims, demands and other obligations relating to the Fifth Debt and the Unpaid Earnest Money.   As of March 31, 2020, earnest money of $85,248 remained outstanding.

(d)	Advances from unrelated third parties were unsecured, non-interest bearing and repayable on demand.
(e)	On June 25, 2019, the Company entered into a loan agreement with Mr. Shulin Yu, an unrelated party, to loan RMB3.6 million (approximately $0.5 million) for a term of one year, bearing annual interest of 10% and the repayment was guaranteed by Mr. Yunfei Li (the Company's CEO) and Mr. Wenwu Wang (the Company's former CFO). As of March 31, 2020, the Company borrowed RMB3.6 million (approximately $0.5 million). On June 22, 2020, the Company and Mr. Shulin Yu entered into a supplemental agreement to extend the loan for one year to June 24, 2021.
(f)	In January 2019, the Company obtained one-year term facilities from Jilin Province Trust Co. Ltd. with a maximum amount of RMB40.0 million (approximately $5.7 million), which was secured by land use rights and buildings of Eodos Liga Energy Co., Ltd. Under the facilities, the Company borrowed a total of RMB39.6 million ($5.7 million) in 2019, bearing annual interest from 11.3% to 11.6%. The Company fully repaid the loan principal and accrued interest in March 2020. In March 2020, the Company obtained additional one-year term facilities from Jilin Province Trust Co. Ltd with a maximum amount of RMB40.0 million (approximately $5.7 million), which was secured by land use rights and buildings of Eodos Liga Energy Co., Ltd. Under the facilities, the Company borrowed RMB24.2 million ($3.4 million) on March 13, 2020, bearing annual interest of 13.5%.
(g)	In 2019, the Company entered into a short term loan agreement with Suzhou Zhengyuanwei Needle Ce Co., Ltd, an unrelated party to loan RMB0.6 million (approximately $0.1 million), bearing annual interest rate of 12%. As of March 31, 2020, loan amount of RMB0.5 million ($70,622) remained outstanding.