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Concentrations and Credit Risk

12 Months Ended

Sep. 30, 2016

Concentrations and Credit Risk [Text Block]

21.

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, 2015 and 2016 as follows:

			2015						2016
	Customer A	$	6,036,172			43.41%		$	*			*
	Customer B		2,252,816			16.20%			*			*
	BAK Tianjin		1,470,579			10.58%			*			*
	Customer C		*			*			3,574,273			34.47%
	Customer D		*			*			2,442,816			23.56%

* 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, 2015 and 2016 as follows:

			2015						2016
	Customer B	$	3,146,177			65.93%		$	*			*
	Customer A		763,738			16.01%			*			*
	Customer C		*			*			1,529,703			64.21%

For the years ended September 30, 2015 and 2016, the Company recorded the following transactions:

			2015			2016
	Purchase of inventories from
	BAK Tianjin	$	10,536,887		$	2,743,618
	Shenzhen BAK		-			5,565,461
	Tianjin BAK New Energy (Note 13)		395,593			-

	Sales of finished goods to
	BAK Tianjin		1,470,579			636,331
	Shenzhen BAK		-			102,322
	Tianjin BAK New Energy (Note 13)		298,983			-
	Zhengzhou BAK Battery Co., Ltd *		17,063			576

	Sales of raw materials to
	Shenzhen BAK		1,377,004			836,425

* 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 2016, 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.

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.