XML 38 R26.htm IDEA: XBRL DOCUMENT

Concentrations and Credit Risk

9 Months Ended

Jun. 30, 2016

Concentrations and Credit Risk [Text Block]

20.

Concentrations and Credit Risk

(a)

Concentrations

The Company had two and six customers that individually comprised 10% or more of net revenue for the three months ended June 30, 2015 and 2016, respectively, as follows:

		Three months ended June 30,
		2015			2016
Shenzhen Max Technology Co., Ltd	$	*	*	$	238,959	17.54%
BAK Tianjin		499,290	20.36%		236,598	17.37%
Sysgration Co., Ltd		*	*		231,862	17.02%
Robotics Technology Ltd		*	*		225,754	16.57%
Sunghwa Co., Ltd.		*	*		164,931	12.11%
Emerald Battery Technology Co., Ltd.		*	*		137,305	10.08%
Sichuan Pisen Electronics Co., Ltd	$	1,467,419	59.83%	$	*	*

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

The Company had two and two customers that individually comprised 10% or more of net revenue for the nine months ended June 30, 2015 and 2016, respectively, as follows:

		Nine months ended June 30,
		2015			2016
Guangdong Pisen Electronics Co., Ltd.	$	2,191,904	25.49%	$	*	*
Sichuan Pisen Electronics Co., Ltd		3,444,317	40.06%		*	*
Shandong Tangjun Electric Co., Ltd		*	*		3,774,564	37.51%
Pingxiang Anyuan Tourist Bus Co., Ltd	$	*	*	$	2,459,646	24.45%

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

The Company had two customers that individually comprised 10% or more of accounts receivable as of September 30, 2015 and June 30, 2016, respectively, as follows:

		September 30, 2015			June 30, 2016

Sichuan Pisen Electronics Co., Ltd.	$	3,146,177	65.93%	$	*	*
Guangdong Pisen Electronics Co., Ltd		763,738	16.01%		*	*
Shandong Tangjun Electric Co., Ltd		*	*		2,264,906	42.09%
Pingxiang Anyuan Tourist Bus Co., Ltd	$	*	*	$	2,038,669	37.89%

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

For the three and nine months ended June 30, 2015 and 2016, the Company recorded the following transactions :

		Three months ended June 30,					Nine months ended June 30,
		2015		2016			2015		2016
Purchase of inventories from
BAK Tianjin	$	3,184,578	$	49,095		$	6,744,335	$	3,234,401
Shenzhen BAK		-		2,677,785			-		2,695,016

Sales of finished goods to
BAK Tianjin	$	499,290	$	236,598		$	557,778	$	604,835
Zhengzhou BAK Battery Co., Ltd*		17,137		-			17,137		-

Sales of raw materials to Shenzhen BAK	$	18,030	$	(2,844	)	$	82,680	$	824,673

*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 September 30, 2015 and June 30, 2016, 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.