Loans

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Loans

12. Loans

Bank loans:

Bank borrowings as of December 31, 2020 and March 31, 2021 consisted of the followings

	December 31,		March 31,
	2020		2021
Current maturities of long-term bank loans	$	13,739,546	$	13,688,805

On June 4, 2018, the Company obtained banking facilities from China Everbright Bank Dalian Branch with a maximum amount of RMB200 million (approximately $30.63 million) bearing interest at 130% of benchmark rate of the People’s Bank of China (“PBOC”) for three-year long-term loans with the term from June 12, 2018 to June 10, 2021, at current rate 6.175% per annum. The facilities were secured by the Company’s land use rights, buildings, machinery and equipment. According to the original repayment schedule, the loans are repayable in six installments of RMB0.8 million ($0.12 million) on December 10, 2018, RMB24.3 million ($3.72 million) on June 10, 2019, RMB0.8 million ($0.12 million) on December 10, 2019, RMB74.7 million ($11.44 million) on June 10, 2020, RMB0.8 million ($0.12 million) on December 10, 2020 and RMB66.3 million ($10.16 million) on June 10, 2021. The Company repaid the bank loan of RMB0.8 million ($0.12 million), RMB24.3 million ($3.72 million) and RMB0.8 million ($0.12 million) in 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 modification agreement, the remaining RMB141.8 million (approximately $21.72 million) loans are repayable in eight instalments consisting of RMB1.09 million ($0.17 million) on June 10, 2020, RMB1 million ($0.15 million) on December 10, 2020, RMB2 million ($0.31 million) on January 10, 2021, RMB2 million ($0.31 million) on February 10, 2021, RMB2 million ($0.31 million) on March 10, 2021, RMB2 million ($0.31 million) on April 10, 2021, RMB2 million ($0.31 million) on May 10, 2021, and RMB129.7 million ($19.9 million) on June 10, 2021, respectively. The Company repaid the bank loan of RMB1.09 million ($0.17 million) and RMB51 million ($7.8 million) in June and December 2020, respectively.

Under the facilities, as of March 31, 2021, outstanding loan balance owing to China Everbright Bank Dalian Branch was RMB89.7 million (approximately $13.7 million). The Company repaid RMB50 million ($7.63 million) and RMB39.7 million ($6.07 million) in April and May 2021 to the bank, respectively.

On October 15, 2019, the Company borrowed a total of RMB28 million (approximately $4.12 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 $4.12 million). The Company discounted the bills payable of even date to China Everbright Bank at a rate of 3.3%. The Company repaid the bills on October 15, 2020.

In December 2019, the Company obtained banking facilities from China Everbright Bank Dalian Friendship Branch totaled RMB39.9 million (approximately $6.1 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. The Company repaid the bank loan of RMB39.9 million (approximately $6.1 million) in December 2020.

In October to December 2020, the Company borrowed a series of acceptance bills from China Merchants Bank totaled RMB13.5 million (approximately $2.07 million) for various terms through April to June 2021, which was secured by the Company’s cash totaled RMB13.5 million (approximately $2.07 million) (Note 2).

In December 2020 to March 2021, the Company borrowed a series of acceptance bills from Agricultural Bank of China totaled RMB65.2 million (approximately $9.94 million) for various terms to June to September 2021, which was secured by the Company’s cash totaled RMB65.2 million (approximately $9.94 million) (Note 2). 

In January to March 2021, the Company borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shenyang Branch totaled RMB28.0 million (approximately $4.27 million) for various terms to July to September 2021, which was secured by the Company’s cash totaled RMB28.0 million (approximately $4.27 million) (Note 2).

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

	December 31,		March 31,
	2020		2021
Pledged deposits (note 2)	$	8,791,499	$	16,278,065
Right-of-use assets (note 9)		7,500,780		7,430,212
Buildings		16,721,178		17,187,727
Machinery and equipment		4,926,886		4,904,473
	$	37,940,343	$	45,800,477

As of March 31, 2021, the Company had unutilized committed banking facilities of $4.9 million.

During the three months ended March 31, 2020 and 2021, interest of $397,206 and $ 213,583, respectively, was incurred on the Company’s bank borrowings.

Other Short-term Loans

Other short-term loans as of December 31, 2020 and March 31, 2021 consisted of the following:

			December 31,		March 31,
	Note		2020		2021
Advance from related parties
– Mr. Xiangqian Li, the Company’s Former CEO		(a)	$	100,000	$	100,000
– Mr. Yunfei Li		(b)		278,739		133,928
– Shareholders		(c)		92,446		92,105
				471,185		326,033
Advances from unrelated third party
– Mr. Wenwu Yu		(d)		16,823		16,761
– Ms. Longqian Peng		(d)		689,275		686,729
– Suzhou Zhengyuanwei Needle Ce Co., Ltd		(e)		76,586		76,303
				782,684		779,793
			$	1,253,869	$	1,105,826

(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 $966,579 (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, 2021, earnest money of $92,105 remained outstanding.

(d) Advances from unrelated third parties were unsecured, non-interest bearing and repayable on demand.

(e) 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, 2021, loan amount of RMB0.5 million ($76,303) remained outstanding.

During the three months ended March 31, 2020 and 2021, interest of $154,976 and $2,314 were incurred on the Company’s borrowings from unrelated parties, respectively.