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Short-term and Long-term Bank Loans

12 Months Ended

Sep. 30, 2016

Short-term and Long-term Bank Loans [Text Block]

12.

Bank Loans

Bank borrowings as of September 30, 2015 and 2016 consisted of the followings

			2015			2016

	Short-term bank borrowings	$	12,585,740		$	1,498,936
	Long-term bank borrowings		-			19,006,505
		$	12,585,740		$	20,505,441

On June 10 and 15, 2016, the Company repaid Bank of Dandong the one-year short term loans of RMB30 million and RMB50 million, respectively, obtained under its banking facilities in June 2015. On June 14, 2016, the Company renewed its banking facilities from Bank of Dandong to provide a maximum amount of RMB130 million (approximately $19.5 million), including three-year long-term loans and three-year revolving bank acceptance and letters of credit bills for the period from June 13, 2016 to June 12, 2019. Under the banking facilities, from June to September 2016, the Company borrowed various three-year bank loans that totaled RMB126.8 million (approximately $19.0 million), bearing fixed interest at 7.2% per annum. The banking facilities were guaranteed by Mr. Xianqian Li, our former CEO, Ms. Xiaoqiu Yu, the wife of the Company’s former CEO, Shenzhen BAK, Mr. Yunfei Li, the Company’s CEO, and Ms. Qinghui Yuan, Mr. Yunfei Li’s wife.

On July 6, 2016, the Company obtained new banking facilities from Bank of Dalian to provide a maximum loan amount of RMB10 million (approximately $1.5 million) and bank acceptance of RMB40 million (approximately $6.0 million) to July 2017. The banking facilities were guaranteed by Shenzhen BAK, Mr. Yunfei Li, our CEO, and Ms. Qinghui Yuan, Mr. Yunfei Li’s wife. On July 6, 2016, the Company borrowed a one-year term bank loan of RMB10 million (approximately $1.5 million), bearing fixed interest at 6.525% per annum.

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

			2015			2016
	Pledged deposits (note 3)	$	1,519,601		$	3,305,305
	Prepaid land use rights (note 10)		8,631,995			8,056,005
	Buildings		13,120,083			12,294,838
	Machinery and equipment		3,831,790			3,041,665
	Construction in progress		6,228,371			6,408,694
			33,331,840			33,106,507

As of September 30, 2016, the Company had unutilized committed banking facilities of $0.2 million.

During the years ended September 30, 2015 and 2016, interest of $527,104 and $1,046,302, respectively, was incurred on the Company's bank borrowings.