XML 38 R26.htm IDEA: XBRL DOCUMENT

Concentrations and Credit Risk

9 Months Ended

Sep. 30, 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 September 30, 2016 and 2017 as follows:

			Three months ended September 30,
			2016			2017
	Customer A		34.09%			*
	Customer B		21.64%			53.39%
	Customer C (Shenzhen BAK)		16.39%			*
	Customer D		*			41.51%

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

The Company had the following customers that individually comprised 10% or more of net revenue for the nine months ended September 30, 2016 and 2017 as follows:

			Nine months ended September 30,
			2016			2017
	Customer B		*			65.21%
	Customer D		*			26.99%
	Customer E		21.88%			*
	Customer F		20.56%			*

* 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 September 30, 2017 as follows:

			December 31, 2016						September 30, 2017
	Customer B	$	857,180			35.59%		$	10,471,824			63.57%
	Customer D		*			*			5,095,410			30.93%
	Customer F		1,286,206			53.40%			*			*

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

For the three months and nine months ended September 30, 2016 and 2017, the Company recorded the following transactions:

			Three months ended September 30,						Nine months ended September 30,
			2016			2017			2016			2017
	Purchase of inventories from
	BAK Tianjin	$	(490,783	)	$	-		$	(301,287	)	$	-
	Shenzhen BAK		2,870,445			9,248,609			5,560,117			13,527,981
	Zhengzhou BAK Battery Co., Ltd*		-			-			-

	Sales of finished goods to
	BAK Tianjin		31,496			55,533			295,101			98,233
	Shenzhen BAK		102,322			728			102,322			61,525
	Zhengzhou BAK Battery Co., Ltd*		576			163		$	576			13,811

	Sales of raw materials to Shenzhen BAK		238,106			-			11,752			-

*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 September 30, 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.