XML 38 R26.htm IDEA: XBRL DOCUMENT

Concentrations and Credit Risk

3 Months Ended

Mar. 31, 2017

Concentrations and Credit Risk [Text Block]

20.	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, 2016 and 2017 as follows:

			Three months ended March 31,
			2016						2017
	Customer A	$	*			*		$	3,110,679			83.71%
	Customer B		1,362,787			42.60%			*			*
	Customer C	$	1,265,844			39.57%		$	*			*

	*	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, 2016 and March 31, 2017 as follows:

			December 31, 2016						March 31, 2017
	Customer A	$	857,180			34.73%		$	4,555,928			76.06%
	Customer B		1,286,206			52.11%			1,151,496			19.22%

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

		For the three months ended March 31, 2016 and 2017, the Company recorded the following transactions:

			Three months ended March 31,
			2016			2017
	Purchase of inventories from
	BAK Tianjin	$	140,400		$	-
	Shenzhen BAK		11,888			2,362,444
	Zhengzhou BAK Battery Co., Ltd*		-			12,457

	Sales of finished goods to
	BAK Tianjin		27,007			26,546
	Shenzhen BAK		215,178			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, 2016 and March 31, 2017, 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.