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Concentrations and Credit Risk

12 Months Ended

Sep. 30, 2015

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 years ended September 30, 2014 and 2015 as follows:

		2014			2015
Tinno Mobile Technology Company Limited	$	13,278,638	10.79%	$	*	*
Sichuan Pisen Electronics Co., Ltd		*	*		6,036,173	43.41%
Guangdong Pisen Electronics Co., Ltd		*	*		2,252,816	16.20%
BAK Tianjin		*	*		1,470,579	10.58%

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 September 30, 2014 and 2015 as follows:

		2014			2015
Sichuan Pisen Electronics Co., Ltd.	$	*	*	$	3,146,177	65.93%
Guangdong Pisen Electronics Co., Ltd.		569,444	56.17%		763,738	16.01%

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 years ended September 30, 2014 and 2015, the Company purchased inventories of $3.3 million and $10.5 million from BAK Tianjin.

For the years ended September 30, 2014 and 2015, the Company generated revenue of

	–	$18,030 and $1,377,004 from Shenzhen BAK, respectively;
	–	$98,459 and $1,470,579 from BAK Tianjin, respectively;
	–	nil and $17,063 from Zhengzhou BAK Battery Co., Ltd, a company with the common director of Mr. Li, the Company’s CEO; and
	–	nil and $298,983 from Tianjin New Energy (Note 12).

For the years ended September 30, 2014 and 2015, the Company purchased inventories of $19,411 and $395,593 from Tianjin BAK New Energy, a company with the common director of Mr. Li, the Company’s CEO.

(b)

Credit Risk

As of September 30, 2014 and 2015, substantially all of the Company’s cash and cash equivalents and pledged deposits 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.