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Loans
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Loans
14. Loans

 

Bank loans:

 

Bank borrowings as of December 31, 2020 and September 30, 2021 consisted of the followings

 

   December 31,   September 30, 
   2020   2021 
Current maturities of long-term bank loans  $13,739,546   $
     -
 

 

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. As of June 30, 2021, the Company repaid all the bank loan.

 

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. Under the facilities, 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). The Company repaid the bills through April to June 2021.

 

The Company borrowed a series of acceptance bills from Agricultural Bank of China totaled RMB31.0 million (approximately $4.8 million) for various terms to October 2021 to March 2022, which was secured by the Company’s cash totaled RMB31.0 million (approximately $4.81 million) (Note 2). 

 

The Company borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shenyang Branch totaled RMB39.9 million (approximately $6.19 million) for various terms to October 2021 to March 2022, which was secured by the Company’s cash totaled RMB39.2 million (approximately $6.09 million) (Note 2) and the Company’s bills receivable totaled RMB0.7 million (approximately $0.1 million) (Note 3).

 

On April 19, 2021, the Company obtained five-year acceptance bills facilities from Bank of Ningbo Co., Ltd with a maximum amount of RMB84.4 million (approximately $13.1 million). Any amount drawn under the facilities requires security in the form of cash or bank acceptance bills receivable of at least the same amount. Under the facilities, as of September 30, 2021, the Company borrowed a total of RMB30 million (approximately $4.7 million) from Bank of Ningbo Co., Ltd in the form of bills payable for a various term expiring from October 2021 to February 2022, which was secured by the Company’s cash totaled RMB30 million (approximately $4.66 million) (Note 2). 

 

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

 

   December 31,   September 30, 
   2020   2021 
Pledged deposits (note 2)  $8,791,499   $15,552,996 
Bills receivable (note 3)   
-
    100,828 
Right-of-use assets (note 11)   7,500,780    
-
 
Buildings   16,721,178    
-
 
Machinery and equipment   4,926,886    
-
 
   $37,940,343   $15,653,824 

 

During the three months ended September 30, 2020 and 2021, interest of $402,268 and $19, respectively, was incurred on the Company’s bank borrowings.

 

During the nine months ended September 30, 2020 and 2021, interest of $1,190,629 and $306,514, respectively, was incurred on the Company’s bank borrowings.

 

Other Short-term Loans

 

Other short-term loans as of December 31, 2020 and September 30, 2021 consisted of the following:

 

      December 31,   September 30, 
   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    95,574 
– Shareholders  (c)   92,446    93,622 
       471,185    289,196 
Advances from unrelated third party             
– Mr. Wenwu Yu  (d)   16,823    17,037 
– Mr. Longqian Peng  (d)   689,275    296,770 
– Suzhou Zhengyuanwei Needle Ce Co., Ltd  (e)   76,586    77,560 
       782,684    391,367 
      $1,253,869   $680,563 

  

  (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 earnest money of $949,317 (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 September 30, 2021, earnest money of $93,622 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 September 30, 2021, loan amount of RMB0.5 million ($77,560) remained outstanding. 

 

During the three months ended September 30, 2020 and 2021, interest of $137,000 and $2,370 were incurred on the Company’s borrowings from unrelated parties, respectively.

 

During the nine months ended September 30, 2020 and 2021, interest of $427,769 and $7,031 were incurred on the Company’s borrowings from unrelated parties, respectively.