SCHEDULE
14C INFORMATION STATEMENT
INFORMATION
STATEMENT PURSUANT TO SECTION 14(C)
OF
THE
SECURITIES EXCHANGE ACT OF 1934
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Preliminary
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for Use of the Commission Only (as permitted by Rule
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Definitive
Information Statement
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HONG
KONG HIGHPOWER TECHNOLOGY, INC.
(Name
of
Registrant as Specified in Its Charter)
Commission
File Number: 000-52383
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of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules 14c-5(g) and
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(2)
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box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
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Filed:
HONG
KONG HIGHPOWER TECHNOLOGY, INC.
BUILDING
A1, LUOSHAN INDUSTRIAL ZONE,
SHANXIA,
PINGHU, LONGGANG,
SHENZHEN,
GUANGDONG, 518111
PEOPLE’S
REPUBLIC OF CHINA
NOTICE
OF CORPORATE ACTION TAKEN BY WRITTEN CONSENT
OF
MAJORITY STOCKHOLDERS WITHOUT SPECIAL MEETING OF THE
STOCKHOLDERS
Dear
Stockholders:
We
are
writing to advise you that stockholders of Hong Kong Highpower Technology,
Inc.,
a Delaware corporation (“Highpower,” “the Company,” “we” or “us”), holding a
majority of the voting rights of our common stock executed a written consent
in
lieu of a special meeting dated May 14, 2008 authorizing our Board of Directors
to take all steps necessary to effect a 5-for-8 reverse stock split of our
common stock (the “Reverse Stock Split”), with our Board of Directors retaining
the discretion of whether to implement the Reverse Stock Split. Our Board of
Directors approved the proposed Reverse Stock Split on May 14, 2008, but our
Board of Directors has not yet determined whether to implement it.
The
accompanying information statement, which describes the Reverse Stock Split
in
more detail, is being furnished to our stockholders for informational purposes
only, pursuant to Section 14(c) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the rules and regulations prescribed
thereunder. The consent that we have received constitutes the only stockholder
approval required for the Reverse Stock Split under the Delaware General
Corporation Law and our Certificate of Incorporation and Bylaws. Accordingly,
the Reverse Stock Split will not be submitted to the other stockholders of
the
Company for a vote.
Our
Board
of Directors has fixed the close of business on May [__], 2008 (the “Record
Date”) as the record date for the determination of stockholders entitled to
notice of the action by written consent. Pursuant to Rule 14c-2 under the
Exchange Act, the Reverse Stock Split will not be implemented until at least
twenty (20) calendar days after the mailing of this information statement to
our
stockholders. This information statement will be mailed on [________], 2008
to
stockholders of record on May [__], 2008.
No
action
is required by you to effectuate this action. The accompanying information
statement is furnished only to inform our stockholders of the action described
above before it takes effect in accordance with Rule 14c-2 promulgated
under the Exchange Act. This letter is the notice required by Section 228 of
the
Delaware General Corporation Law.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
PLEASE
NOTE THAT THE HOLDERS OF A MAJORITY OF OUR OUTSTANDING SHARES OF COMMON STOCK
HAVE VOTED TO AUTHORIZE THE REVERSE STOCK SPLIT. THE NUMBER OF VOTES RECEIVED
IS
SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT AND NO ADDITIONAL VOTES
WILL CONSEQUENTLY BE NEEDED TO APPROVE THIS MATTER.
By
order
of the Board of Directors,
/s/
Dang Yu Pan______________
Dang
Yu
Pan
Chief
Executive Officer and Chairman
of
the
Board of Directors
Shenzhen,
PRC
May
[__],
2008
HONG
KONG HIGHPOWER TECHNOLOGY, INC.
INFORMATION
STATEMENT REGARDING
CORPORATE
ACTION TAKEN BY WRITTEN CONSENT OF
OUR
BOARD OF DIRECTORS AND HOLDERS OF
A
MAJORITY OF OUR COMMON STOCK
IN
LIEU OF SPECIAL MEETING
Hong
Kong
Highpower Technology, Inc. (“Highpower,” “the Company,” “we” or “us”) is
furnishing this information statement to you to provide a description of actions
taken by our Board of Directors on May 14, 2008 and by the holders of a majority
of our outstanding shares of common stock in accordance with the relevant
sections of the General Corporation Law of the State of Delaware (the “Delaware
Code”).
This
information statement is being mailed on [________], 2008 to stockholders of
record on May [__], 2008 (the “Record Date”). The information statement is being
delivered only to inform you of the corporate action described herein before
such action takes effect in accordance with Rule 14c-2 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). No action is
requested or required on your part.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
THIS
IS
NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS' MEETING WILL
BE
HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
PLEASE
NOTE THAT THE HOLDERS OF A MAJORITY OF OUR OUTSTANDING SHARES OF COMMON STOCK
HAVE VOTED TO AUTHORIZE THE REVERSE STOCK SPLIT. THE NUMBER OF VOTES RECEIVED
IS
SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT AND NO ADDITIONAL VOTES
WILL CONSEQUENTLY BE NEEDED TO APPROVE THIS MATTER.
GENERAL
DESCRIPTION OF CORPORATE ACTION
VOTING
AND VOTE REQUIRED
Section
228 of the DGCL provides that the written consent of the holders of outstanding
shares of voting capital stock, having not less than the minimum number of
votes
which would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted, may be substituted
for a meeting. Approval by at least a majority of the outstanding voting power
of our shares of common stock present and voting on the matter at a meeting
would be required to approve the Amendment and Reverse Stock Split.
On
May
14, 2008, we had 20,478,090
shares
of
common stock issued and outstanding. Each stockholder is entitled to one vote
for each share of common stock held by such stockholder. On May 14, 2008, the
following stockholders holding an aggregate of 12,430,595, or 60.7%, of all
eligible votes, delivered an executed written consent authorizing the Amendment
and the Reverse Stock Split:
Stockholder
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No.
of Shares
|
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Dang
Yu Pan
|
|
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7,695,128
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* |
Wen
Liang Li
|
|
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3,255,632
|
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Wen
Wei Ma
|
|
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1,479,835
|
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Total
|
|
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12,430,595
|
* |
*
Includes 2,219,747 shares
over which Dang Yu Pan has voting rights pursuant to a Loan Contract dated
as of
February 5, 2007 with certain stockholders of the Company.
Accordingly,
the written consent executed by the above-listed stockholders satisfies the
stockholder approval requirement for authorization of the Amendment and Reverse
Stock Split. In an effort to minimize the Company's expenses, a special meeting
of the stockholders is not required and will not be held because stockholders
holding a majority of the eligible votes are in favor of the action.
NOTICE
PURSUANT TO DELAWARE CODE SECTION 228
Pursuant
to Delaware Code Section 228, we are required to provide prompt notice of the
taking of a corporate action by written consent to our stockholders who have
not
consented in writing to such action. This information statement serves as the
notice required by Delaware Code Section 228.
COST
OF THIS INFORMATION STATEMENT
The
entire cost of furnishing this information statement will be borne by us. We
will request brokerage houses, nominees, custodians, fiduciaries and other
like
parties to forward this information statement to the beneficial owners of our
common stock held of record by them.
HOUSEHOLDING
OF STOCKHOLDER MATERIALS
Some
banks, brokers and other nominee record holders may be participating in the
practice of ‘‘householding’’ stockholder materials, such as proxy statements,
information statements and annual reports. This means that only one copy of
this
information statement may have been sent to multiple stockholders in your
household. We will promptly deliver a separate copy of this Information
Statement to you if you write or call us at the following address or telephone
number: 5
Building A1, Luoshan Industrial Zone, Shanxia, Pinghu, Longgang, Shenzhen,
Guangdong, 518111, People’s Republic of China,
telephone: (86) 755-89686238. If you want to receive separate copies of
stockholder materials in the future, or if you are receiving multiple copies
and
would like to receive only one copy for your household, you should contact
your
bank, broker, or other nominee record holder, or you may contact us at the
above
address and telephone number.
APPROVAL
OF THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION
TO
EFFECT A 5-FOR-8 REVERSE STOCK SPLIT OF OUR COMMON
STOCK
OVERVIEW
The
Board
of Directors has adopted and the stockholders have approved by written consent
an amendment to our Certificate of Incorporation to effect a 5-for-8 reverse
stock split of all our issued and outstanding shares of common stock, as
determined in the sole discretion of our Board of Directors (the “Reverse Stock
Split”). To effect the Reverse Stock Split, we would file an amendment to the
Certificate of Incorporation with the Secretary of State of Delaware. Our Board
of Directors has the discretion to elect, as it determines to be in the best
interest of the Company and the stockholders, to effect the Reverse Stock Split.
The Board may elect not to implement the Reverse Stock Split in its sole
discretion.
Should
the Board choose to effect the Reverse Stock Split, the number of issued and
outstanding shares of our common stock would be reduced in accordance with
the
approved 5-for-8 exchange ratio for the Reverse Stock Split. The par value
and
number of authorized shares of the common stock will remain unchanged. The
Board
of Directors, in its sole discretion, may effect the Reverse Stock Split by
filing the amendment to the Certificate of Incorporation with the Delaware
Secretary of State, which would occur no sooner than 20 calendar days after
the
date this information statement has been mailed to stockholders. A form of
the
amendment to the Certificate of Incorporation is attached to this Information
Statement as Appendix
A.
No
further action on the part of stockholders would be required to authorize or
effect the Reverse Stock Split.
THE
PURPOSE OF THE REVERSE STOCK SPLIT
On
November 13, 2007, we filed with the Securities and Exchange Commission (the
“SEC”) a registration statement on Form S-1 for a
public
offering of shares of our common stock.
The
registration statement has not yet become effective and
the
price for the offering has not yet been determined. The public offering is
contingent on a number of factors and there can be no assurance that we will
proceed with the offer or sale of the shares or consummate the offering. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This disclosure shall not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
As
of the
close of business on May 14, 2008, we had 100,000,000 shares of common stock
authorized, of which 20,478,090 shares were outstanding. To ensure that the
Company can effect the public offering at a desirable per share price of our
common stock, the Board considered it necessary to effect a reverse stock split
of our common stock to reduce the number of outstanding shares of our common
stock. After consultation with investment bankers and advisors, the Board
approved the 5-for-8 Reverse Stock Split of our common stock. On May 14, 2008,
stockholders holding a majority of the voting power of common stock consented
to
resolutions authorizing our Board of Directors to effect the Reverse Stock
Split
of our outstanding common stock, with our Board of Directors retaining the
discretion of whether to implement the Reverse Stock Split.
The
approval becomes effective twenty (20) days after the mailing of this
information statement to our stockholders. Upon this approval
becoming effective, our Board of Directors will be authorized to implement
or
abandon the Reverse Stock Split as it determines is advisable considering
relevant market conditions at the time of the closing of the contemplated public
offering of common stock. We believe that approval of this discretion to the
Board provides the Board with maximum flexibility to react to prevailing market
conditions and to therefore act in the best interests of the Company and our
stockholders. Our Board of Directors believes that the Reverse Stock Split
is in
the best interests of our company and its stockholders and unanimously approved
the Reverse Stock Split on May 14, 2008, but our Board of Directors has not
yet
determined whether to implement the Reverse Stock Split.
We
anticipate that the Reverse Stock Split may have the effect of increasing,
proportionately, the per share trading price our common stock when, and if,
we
begin trading on the American Stock Exchange on which we have applied for
listing. The decrease in the number of shares of common stock outstanding as
a
consequence of the proposed Reverse Stock Split should increase the per share
price of the common stock, which may encourage greater interest in the common
stock and possibly promote greater liquidity for the Company's stockholders.
However, the increase in the per share price of the common stock as a
consequence of the proposed Reverse Stock Split, if any, may be proportionately
less than the decrease in the number of shares outstanding, and any increased
liquidity due to any increased per share price could be partially or entirely
off-set by the reduced number of shares outstanding after the proposed Reverse
Stock Split. The Reverse Stock Split could result in a per share price that
adequately compensates for the adverse impact of the market factors noted above.
In general, there can be no assurance that the favorable effects described
above
will occur, or that any increase in per share price of the common stock
resulting from the Reverse Stock Split will be maintained for any period of
time.
POTENTIAL
EFFECTS OF THE PROPOSED REVERSE SPLIT
If
the
Board elects to implement the Reverse Stock Split, its immediate effect will
be
to reduce the number of shares of the outstanding common stock and to increase
the market price of such common stock. However, the effect the Reverse Stock
Split upon the market price of the common stock cannot be predicted, and the
history of reverse stock splits for companies in similar circumstances sometimes
improves stock performance, but in many cases does not. There can be no
assurance that the trading price of the common stock, if and when publicly
traded, after the Reverse Stock Split will rise in proportion to the reduction
in the number of shares of our common stock outstanding as a result of the
Reverse Stock Split or remain at an increased level for any period. The trading
price of the common stock may change due to a variety of other factors,
including our operating results, other factors related to our business and
general market conditions.
The
following table summarizes the effect of the Reverse Stock Split on our
authorized and outstanding shares of common stock as well as shares of our
common stock reserved for issuance under outstanding obligations.
|
Prior
to Reverse Stock Split
|
|
After
Reverse Stock Split
|
Authorized
Shares of Common Stock
|
100,000,000
|
|
100,000,000
|
Outstanding
Shares of Common Stock
|
20,478,090
|
|
12,798,807
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EFFECTS
ON OWNERSHIP BY INDIVIDUAL STOCKHOLDERS
After,
and if, the Reverse Stock Split is effected, the number of shares of our common
stock held by each stockholder would be reduced by multiplying the number of
shares held immediately before the Reverse Stock Split by the 5-for-8 exchange
ratio, and then rounding up to the nearest whole share. We would not pay cash
to
each stockholder in respect of any fractional interest in a share resulting
from
the Reverse Stock Split. The Reverse Stock Split would not affect any
stockholder's percentage ownership interests in the Company or proportionate
voting power, except to the extent that interests in fractional shares will
be
rounded up to the nearest whole share.
EFFECT
ON OPTIONS, WARRANTS AND OTHER SECURITIES
The
Company currently has no outstanding options, warrants or other securities
entitling their holders to purchase shares of our common stock. Should any
options, warrants or other convertible securities become outstanding before
the
occurrence of the Reverse Stock Split, proportionate adjustments would be made
based on the terms of the particular security. As an example, proportionate
adjustments would be made to the exercise price per share and the number of
shares issuable upon the exercise of all outstanding options, entitling the
holders to purchase shares of our common stock, which would result in
approximately the same aggregate price being required to be paid for such
options upon exercise immediately preceding the Reverse Stock
Split.
OTHER
EFFECTS ON OUTSTANDING SHARES
The
rights and preferences of the outstanding shares of the common stock will remain
the same should the Reverse Stock Split occur. Each share of common stock issued
pursuant to the Reverse Stock Split would be fully paid and
non-assessable.
REDUCTION
IN STATED CAPITAL
The
Reverse Stock Split would not affect the par value of our common stock. As
a
result, on the effective date of the Reverse Stock Split, the stated capital
on
our balance sheet attributable to our common stock would be reduced in
proportion to the size of the Reverse Stock Split, and the additional paid-in
capital account would be credited with the amount by which the stated capital
is
reduced. Our stockholders’ equity, in the aggregate, would remain
unchanged.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except
in
their capacity as stockholders, none of our officers, directors or any of their
respective affiliates has any interest in the Reverse Stock Split.
AUTHORIZED
SHARES OF COMMON STOCK
General
Should
our Board elect to implement the Reverse Stock Split, it would not change the
number of authorized shares of our common stock as designated by the Certificate
of Incorporation. Therefore, because the number of issued and outstanding shares
of common stock will decrease, the number of shares remaining available for
issuance under our authorized pool of common stock will increase.
Anti-Takeover
The
additional shares of common stock that would become available for issuance
as a
result of the Reverse Stock Split could be used by our management to oppose
a
hostile takeover attempt or delay or prevent changes of control or changes
in or
removal of management, including transactions that are favored by a majority
of
the stockholders or in which the stockholders might otherwise receive a premium
for their shares over then-current market prices or benefit in some other
manner. Although the Reverse Stock Split would be prompted by business and
financial considerations, stockholders nevertheless should be aware that the
Reverse Stock Split could facilitate future efforts by our management to deter
or prevent a change in control of our company. The Board has no plans to use
any
of the additional shares of common stock that would become available should
the
Reverse Stock Split occur, if any, for any such purposes.
In
addition to the anti-takeover implications from the increased number of shares
that would become available for issuance as a result of the Reverse Stock Split,
as discussed above, we are also affected by Delaware anti-takeover laws and
anti-takeover provisions in our charter documents. Other than as discussed
in
this information statement, there are no provisions of our articles, bylaws,
employment agreements or credit agreements have material anti-takeover
consequences.
Delaware
Law Anti-Takeover Law
We
are
subject to Section 203 of the Delaware General Corporation Law. This provision
generally prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date the stockholder became an interested stockholder,
unless:
· |
prior
to such date, the Board of Directors approved either the business
combination or the transaction that resulted in the stockholder becoming
an interested stockholder;
|
· |
upon
consummation of the transaction that resulted in the stockholder
becoming
an interested stockholder, the interested stockholder owned at least
85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the
number of
shares outstanding those shares owned by persons who are directors
and
also officers and by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares
held
subject to the plan will be tendered in a tender or exchange offer;
or
|
· |
on
or subsequent to such date, the business combination is approved
by the
Board of Directors and authorized at an annual meeting or special
meeting
of stockholders and not by written consent, by the affirmative vote
of at
least 66 2/3% of the outstanding voting stock that is not owned by
the
interested stockholder.
|
Section
203 defines a business combination to include:
· |
any
merger or consolidation involving the corporation and the interested
stockholder;
|
· |
any
sale, transfer, pledge or other disposition of 10% or more of the
assets
of the corporation involving the interested stockholder;
|
· |
subject
to certain exceptions, any transaction that results in the issuance
or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
|
· |
any
transaction involving the corporation that has the effect of increasing
the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or
|
· |
the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided
by or
through the corporation.
|
In
general, Section 203 defines an “interested stockholder” as any entity or person
beneficially owning 15% or more of the outstanding voting stock of a
corporation, or an affiliate or associate of the corporation and was the owner
of 15% or more of the outstanding voting stock of a corporation at any time
within three years prior to the time of determination of interested stockholder
status; and any entity or person affiliated with or controlling or controlled
by
such entity or person.
Anti-Takeover
Charter Provisions
Our
Certificate of Incorporation and Bylaws contain provisions that could have
the
effect of discouraging potential acquisition proposals or tender offers or
delaying or preventing a change in control of our company, including changes
a
stockholder might consider favorable. In particular, our Certificate of
Incorporation and Bylaws, as applicable, among other things, will:
· |
provide
our Board of Directors with the ability to alter our Bylaws without
stockholder approval;
|
· |
provide
for an advance notice procedure with regard to the nomination of
candidates for election as directors and with regard to business
to be
brought before a meeting of stockholders; and
|
· |
provide
that vacancies on our Board of Directors may be filled by a majority
of
directors in office, although less than a quorum.
|
Such
provisions may have the effect of discouraging a third-party from acquiring
our
company, even if doing so would be beneficial to its stockholders. These
provisions are intended to enhance the likelihood of continuity and stability
in
the composition of our Board of Directors and in the policies formulated by
them, and to discourage some types of transactions that may involve an actual
or
threatened change in control of our company. These provisions are designed
to
reduce our vulnerability to an unsolicited acquisition proposal and to
discourage some tactics that may be used in proxy fights. We believe that the
benefits of increased protection of our potential ability to negotiate with
the
proponent of an unfriendly or unsolicited proposal to acquire or restructure
us
outweigh the disadvantages of discouraging such proposals because, among other
things, negotiation of such proposals could result in an improvement of their
terms.
However,
these provisions could have the effect of discouraging others from making tender
offers for our shares that could result from actual or rumored takeover
attempts. These provisions also may have the effect of preventing changes in
our
management.
STOCK
CERTIFICATES
As
of the
effective date of the Reverse Stock Split, each certificate representing shares
of our common stock before the Reverse Stock Split would be deemed, for all
corporate purposes, to evidence ownership of the reduced number of shares of
our
common stock resulting from the Reverse Stock Split. All shares, underlying
options and warrants and other securities would also be automatically adjusted
on the Effective Date, if any such securities are outstanding on the effective
date. We
would
not issue fractional shares on account of the Reverse Stock Split. Holders
of
pre-split common stock who would otherwise be entitled to a fraction of a share
on account of the Reverse Stock Split would be entitled to receive, in lieu
of
such fractional share, one full share of common stock.
If
you
hold your shares of common stock in a brokerage account or in "street name,"
you
would not be required to take any further action. If you hold stock
certificates, you would not have to exchange your existing stock certificates
for new stock certificates reflecting the Reverse Stock Split. However, any
stockholder desiring a new form of stock certificate may submit the existing
stock certificate to our transfer agent for cancellation, and obtain a new
form
of certificate. The transfer agent may impose a reasonable fee for a voluntary
exchange of certificates. Stockholders should not destroy any stock
certificate.
Contact
information for our transfer agent is as follows:
Corporate
Stock Transfer
3200
Cherry Creek Dr. South,
Suite
430
Denver,
CO 80209
Telephone:
(303) 282 4800
Facsimile:
(303)
282 5800
FRACTIONAL
SHARES
We
would
not issue fractional shares in connection with the Reverse Stock Split. In
order
to avoid the expense and inconvenience of issuing and transferring fractional
shares of common stock to stockholders who would otherwise be entitled to
receive fractional shares of common stock following the Reverse Split, any
fractional shares which result from the Reverse Stock Split would be rounded
up
to the next whole share.
NO
APPRAISAL RIGHTS
Under
the
Delaware Code, stockholders are not entitled to appraisal rights with respect
to
the amendment to the Certificate of Incorporation to effect the Reverse Stock
Split, and we will not independently provide stockholders with any such
right.
FEDERAL
INCOME TAX CONSEQUENCES
The
following discussion is a summary of certain federal income tax consequences
of
the Reverse Stock Split to us and stockholders of our common stock. This
discussion is based on laws, regulations, rulings and decisions in effect on
the
date hereof, all of which are subject to change (possibly with retroactive
effect) and to differing interpretations. This discussion only applies to
stockholders that are U.S. persons as defined in the Internal Revenue Code
of
1986, as amended, and does not describe all of the tax consequences that may
be
relevant to a stockholder in light of his particular circumstances or to
stockholders subject to special rules (such as dealers in securities, financial
institutions, insurance companies, tax-exempt organizations, foreign individuals
and entities, and persons who acquired their common stock as compensation).
In
addition, this summary is limited to stockholders that hold their common stock
as capital assets. This discussion also does not address any tax consequences
arising under the laws of any state, local or foreign jurisdiction or
alternative minimum tax consequences. The tax treatment of each stockholder
may
vary depending upon the particular facts and circumstances of such stockholder.
We
urge all stockholders to consult their own tax advisers to determine the
particular federal, state, local and foreign tax consequences to each of them
of
the Reverse Stock Split.
We
have
not sought and will not seek an opinion of counsel or a ruling from the Internal
Revenue Service regarding the federal income tax consequences of the Reverse
Stock Split. We believe, however, that because the Reverse Stock Split is not
part of a plan to periodically increase or decrease any stockholder’s
proportionate interest in the assets or earnings and profits of our company,
the
Reverse Stock Split should have the federal income tax effects described below:
· |
The
exchange of pre-split shares for post-split shares should not result
in
recognition of gain or loss for federal income tax purposes.
|
· |
The
stockholder’s aggregate tax basis in the post-split shares would equal
that stockholder’s aggregate tax basis in the pre-split shares.
|
· |
The
stockholder’s holding period for the post-split shares will include such
stockholder’s holding period for the pre-split shares.
|
· |
Provided
that a stockholder held the pre-split shares as a capital asset,
the
post-split shares received in exchange therefor would also be held
as a
capital asset.
|
Our
Company should not recognize gain or loss as a result of the Reverse Stock
Split.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission (“SEC”). In computing the number of shares beneficially
owned by a person and the percentage of ownership of that person, shares of
common stock subject to options and warrants held by that person that are
currently exercisable or become exercisable within 60 days of the date of this
information statement are deemed outstanding even if they have not actually
been
exercised. Those shares, however, are not deemed outstanding for the purpose
of
computing the percentage ownership of any other person.
The
following table sets forth certain information with respect to beneficial
ownership of our common stock based on 20,478,090 issued and outstanding shares
of common stock, by:
· |
Each
person known to be the beneficial owner of 5% or more of the outstanding
common stock of our company;
|
· |
Each
executive officer;
|
· |
All
of the executive officers and directors as a
group.
|
Unless
otherwise indicated, the persons and entities named in the table have sole
voting and sole investment power with respect to the shares set forth opposite
the stockholder’s name, subject to community property laws, where applicable.
Unless otherwise indicated, the address of each stockholder listed in the table
is c/o Hong Kong Highpower Technology, Inc., 5 Building A1, Luoshan Industrial
Zone, Shanxia, Pinghu, Longgang, Shenzhen, Guangdong, 518111, People’s Republic
of China.
Name
and Address
of
Beneficial Owner
|
|
Title
|
|
Amount
and Nature of Beneficial Ownership
|
|
Percent
of Class
|
|
|
|
|
|
|
|
Directors
and Executive Officers
|
|
|
|
|
|
|
Dang
Yu Pan
|
|
Chief
Executive Officer and Chairman
of the Board
|
|
8,287,061
|
(1)
|
40.5%
|
|
|
|
|
|
|
|
Wen
Liang Li
|
|
Vice
President, Chief Technology Officer and Director
|
|
3,255,632
|
|
15.9%
|
|
|
|
|
|
|
|
Wen
Wei Ma
|
|
Vice
President of Manufacturing
|
|
1,479,835
|
|
7.2%
|
|
|
|
|
|
|
|
Yu
Zhi Qiu
|
|
Chief
Financial Officer
|
|
306,325
|
|
1.5%
|
|
|
|
|
|
|
|
Wen
Jia Xiao
|
|
Vice
President of Quality Control
|
|
266,370
|
|
1.3%
|
|
|
|
|
|
|
|
Xinhai
Li
|
|
Director
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Chao
Li
|
|
Director
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Ping
Li
|
|
Director
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Officers
and Directors as a Group
(total
of 8 persons)
|
|
|
|
13,022,528
|
(1) |
63.6%
|
____________
|
(1)
|
Includes
(i) an aggregate of 2,219,747 shares over which Mr. Pan has voting
power
and the right to acquire ownership pursuant to a loan agreement dated
February 5, 2007 between Mr. Pan and other stockholders, including
Yu Zhi
Qiu, Chief Financial Officer, who holds 306,325 shares and, Wen Jia
Xiao,
Vice President of Quality Control, who holds 266,370 shares, and
(ii)
591,933 shares held by a company that is 100% owned by Mr.
Pan.
|
FORWARD-LOOKING
STATEMENTS
This
Information Statement may contain certain “forward-looking” statements (as that
term is defined in the Private Securities Litigation Reform Act of 1995 or
by
the U.S. Securities and Exchange Commission in its rules, regulations and
releases) representing our expectations or beliefs regarding our company. These
forward-looking
statements include, but are not limited to, statements regarding our business,
anticipated financial or operational results, our objectives, the amount and
timing of the contemplated initial public offering of our common stock. For
this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “estimate,” “might,” or “continue” or the
negative or other variations thereof or comparable terminology are intended
to
identify forward-looking statements. These statements, by their nature, involve
substantial risks and uncertainties, certain of which are beyond our control,
and actual results may differ materially depending on a variety of important
factors, including factors discussed in this and other filings of ours with
the
SEC.
ADDITIONAL
INFORMATION
We
will
furnish without charge to any stockholder, upon written or oral request, any
documents filed by us pursuant to the Securities Exchange Act. Requests for
such
documents should be addressed to 5
Building A1, Luoshan Industrial Zone, Shanxia, Pinghu, Longgang, Shenzhen,
Guangdong, 518111, People’s Republic of China.
Documents filed by us pursuant to the Securities Exchange Act may be reviewed
and/or obtained through the Securities and Exchange Commission's Electronic
Data
Gathering Analysis and Retrieval System, which is publicly available through
the
Securities and Exchange Commission's web site (http://www.sec.gov).
APPENDIX
Appendix
A Certificate
of Amendment to the Certificate of Incorporation to Effect Reverse Stock
Split
By
order
of the Board of Directors,
/s/
Dang Yu Pan____________
Dang
Yu
Pan
Chief
Executive Officer and Chairman
of
the
Board of Directors
Shenzhen,
PRC
May
[__],
2008
APPENDIX
A
CERTIFICATE
OF AMENDMENT
TO
CERTIFICATE
OF INCORPORATION
OF
HONG
KONG HIGHPOWER TECHNOLOGY, INC.
a
Delaware corporation
Hong
Kong
Highpower, Inc., a corporation organized and existing under and by virtue of
the
General Corporation Law of the State of Delaware (the “Corporation”),
DOES
HEREBY CERTIFY:
FIRST:
That Article 5 of the Certificate of Incorporation of the Corporation, as
amended, is amended to insert the following paragraph immediately following
the
last sentence of paragraph one:
“Upon
the
filing and effectiveness (the “Effective Time”) of this Certificate of Amendment
with the Delaware Secretary of State, every eight outstanding shares of Common
Stock shall without further action by this Corporation or the holder thereof
be
combined into and automatically become five shares of Common Stock (the “Reverse
Stock Split”). The number of authorized shares of Common Stock of the
Corporation and the par value of the Common Stock shall remain as set forth
in
this Certificate of Incorporation, as amended. No fractional share shall be
issued in connection with the foregoing combination; all shares of Common Stock
that are held by a stockholder will be aggregated for purposes of such
combination and each stockholder shall be entitled to receive the number of
whole shares resulting from the combination of the shares so aggregated. Any
fractions resulting from the Reverse Stock Split computation shall be rounded
up
to the next whole share.
THIRD: The
amendment set forth has been duly approved by the Board of Directors of the
Corporation and by the Stockholder entitled to vote thereon.
FOURTH: That
said
amendment was duly adopted in accordance with the provisions of Section 242
of
the General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, I, the undersigned, being the Chief Executive Officer of the
Corporation, for the purpose of amending the Certificate of Incorporation of
the
Corporation pursuant to Section 242 of the Delaware General Corporation Law,
do
make and file this Certificate of Amendment, hereby declaring and certifying
that the facts herein stated are true and accordingly have hereunto set my
hand,
as of this __ day of _____________ 2008.