XML 39 R27.htm IDEA: XBRL DOCUMENT

Concentrations and Credit Risk

6 Months Ended

Jun. 30, 2018

Concentrations and Credit Risk [Text Block]

21.

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 June 30, 2017 and 2018 as follows:

		Three months ended June 30,
		2017			2018
Customer A	$	5,536,377	87.33%	$	*	*
Customer B		*	*		2,540,634	41.99%
Customer C		*	*		1,469,592	24.29%

		* 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 six months ended June 30, 2017 and 2018 as follows:

		Six months ended June 30,
		2017			2018
Customer A	$	8,647,056	85.99%	$	*	*
Customer B		*	*		3,702,680	39.55%
Customer C		*	*		1,474,860	15.75%

		* 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, 2017 and June 30, 2018 as follows:

		December 31, 2017			June 30, 2018
Customer A	$	23,835,201	62.08%	$	14,191,574	54.76%
Customer B		*	*		3,485,960	13.45%
Customer C		4,664,285	12.15%
Customer D		4,855,518	12.65%		3,669,960	14.16%

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

		For the three and six months ended June 30, 2017 and 2018, the Company recorded the following transactions:

		Three months ended June 30,				Six months ended June 30,
		2017		2018		2017		2018
Purchase of inventories from

Shenzhen BAK	$	1,916,928	$	111,548	$	4,279,372	$	111,548
Zhengzhou BAK Battery Co., Ltd*		9,074		2,116,111		21,531		2,116,111

Sales of finished goods to
BAK Tianjin		16,154		17,457		42,700		27,537
Shenzhen BAK		-		-		60,797		-
Zhengzhou BAK Battery Co., Ltd*		-		-		13,648		-

*Mr. Xiangqian Li, the former CEO, is a director of this company. As of June 30, 2018 and December 31, 2017, payable to Zhengzhou BAK Battery Co., Ltd were $2,381,546 and nil, respectively, was included in trade accounts and bills payable.

(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, 2017 and June 30, 2018, 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.