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Concentrations and Credit Risk

3 Months Ended

Dec. 31, 2016

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 three months ended December 31, 2015 and 2016 as follows:

			Three months ended December 31,
			2015						2016
	Customer A	$	2,436,471			44.29%		$	*			*
	Customer B		1,202,286			21.86%			*			*
	Customer C		947,653			17.23%			*			*
	Tianjin New Energy (note 12)		*			*			2,352,577			67.21%
	Customer D		*			*			559,646			15.99%

* 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, 2016 and December 31, 2016 as follows:

			September 30, 2016						December 31, 2016
	Customer A	$	1,529,703			64.21%		$	1,286,206			52.11%
	Customer D		*			*			857,180			34.73%

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

For the three months ended December 31, 2015 and 2016, the Company recorded the following transactions:

			Three months ended December 31,
			2015			2016
	Purchase of inventories from
	BAK Tianjin	$	3,044,905		$	-
	Shenzhen BAK		5,344			1,547,424
	Sales of finished goods to
	BAK Tianjin		341,230			7,296
	Shenzhen BAK		-			30,601
	Zhengzhou BAK Battery Co., Ltd*		-			2,693

	Sales of raw materials to
	Shenzhen BAK		598,319			-

*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, 2016 and December 31, 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.