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Concentrations and Credit Risk

9 Months Ended

Jun. 30, 2015

Concentrations and Credit Risk [Text Block]

18.

Concentrations and Credit Risk

(a)

Concentrations

The Company had one and two customers that individually comprised 10% or more of net revenue for the three months ended June 30, 2014 and 2015, respectively, as follows:

		Three months ended June 30,
		2014			2015
Dongguan Yulong Telecom Technology Co., Ltd	$	6,657,646	13.87%	$	*	*
Sichuan Pisen Electronics Co., Ltd		*	*		1,467,419	59.83%
BAK Tianjin		*	*		499,290	20.36%

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

The Company had one and two customers that individually comprised 10% or more of net revenue for the nine months ended June 30, 2014 and 2015, respectively, as follows:

		Nine months ended June 30,
		2014			2015
Tinno Mobile Techonlogy Company Limited	$	13,278,638	10.88%	$	*	*
Guangdong Pisen Electronics Co., Ltd		*	*		2,191,904	25.49%
Sichuan Pisen Electronics Co., Ltd		*	*		3,444,317	40.06%

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

The Company had one and four customers that individually comprised 10% or more of accounts receivable as of September 30, 2014 and June 30, 2015, respectively, as follows:

		September 30, 2014			June 30, 2015
Guangdong Pisen Electronics Co., Ltd.	$	569,444	56.17%	$	969,049	18.39%
Sichuan Pisen Electronics Co., Ltd.		*	*		2,019,876	38.33%
Dongguan Juda Electronics Co., Ltd		*	*		1,045,492	19.84%
Shenzhen Max Technology Co., Ltd		*	*		653,941	12.41%

After the disposal of BAK International (Note 1) and prior to the completion of the new manufacturing site in Dalian, the Company generated its revenues from sale of batteries via subcontracting the production to BAK Tianjin, a former subsidiary. For the three and nine months ended June 30, 2015, the Company purchased inventories of $3.1 million and $6.7 million from BAK Tianjin.

For the three and nine months ended June 30, 2015, the Company generated revenue of

		•	$18,030 and $82,680 from Shenzhen BAK, respectively;

		•	$499,290 and $557,778 from BAK Tianjin, respectively; and

		•	$17,137 and $17,137 from Zhengzhou BAK Battery Co., Ltd, a company with the common director of Mr. Xiangqian Li, the Company's CEO.

(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 September 30, 2014 and June 30, 2015, 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.