x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the Quarterly Period Ended June 30, 2009
|
|
OR
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
20-4062622
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
Page
|
||||||
Part I
|
Financial
Information
|
|||||
Item
1.
|
Financial
Statements
|
|||||
(a)
|
Balance
Sheets as of June 30, 2009 (Unaudited) and December 31,
2008
|
2
|
||||
(b)
|
Statements
of Comprehensive Income for the Three and Six Months Ended June 30, 2009
and 2008 (Unaudited)
|
4
|
||||
(c)
|
Statements
of Cash Flows for the Six Months Ended June 30, 2009 and 2008
(Unaudited)
|
5
|
||||
(d)
|
Notes
to Financial Statements (Unaudited)
|
7
|
||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
29
|
||||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
||||
Item
4.
|
Controls
and Procedures
|
37
|
||||
Part II
|
Other
Information
|
|||||
Item
1.
|
Legal
Proceedings
|
37
|
||||
Item
1A.
|
Risk
Factors
|
37
|
||||
Item
2.
|
Unregistered
Sale of Equity Securities and Use of Proceeds
|
37
|
||||
Item
3.
|
Default
Upon Senior Securities
|
38
|
||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
38
|
||||
Item
5.
|
Other
Information
|
38
|
||||
Item
6.
|
Exhibits
|
38
|
||||
Signatures
|
39
|
As of
|
||||||||
June
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
ASSETS
|
||||||||
Current Assets
:
|
||||||||
Cash and cash
equivalents
|
1,321,072 | 4,175,780 | ||||||
Restricted cash
|
4,119,107 | 4,845,478 | ||||||
Accounts
receivable
|
9,723,528 | 8,765,593 | ||||||
Notes receivable
|
577,699 | 429,815 | ||||||
Prepaid expenses and other
receivables – Note
8
|
3,513,894 | 1,732,709 | ||||||
Deferred
charges – Stock-based compensation – Note 9
|
- | 216,667 | ||||||
Inventories – Note
10
|
7,870,800 | 11,208,697 | ||||||
Total Current
Assets
|
27,126,100 | 31,374,739 | ||||||
Deferred tax assets – Note 6
|
124,365 | 104,556 | ||||||
Plant and equipment, net –
Note
11
|
9,014,536 | 7,778,477 | ||||||
Leasehold
land, net – Note
12
|
3,018,289 | 3,050,510 | ||||||
Intangible
asset, net – Note
13
|
875,000 | 900,000 | ||||||
Currency
forward – Note
7
|
7,333 | 116,157 | ||||||
TOTAL
ASSETS
|
40,165,623 | 43,324,439 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
LIABILITIES
|
||||||||
Current Liabilities
:
|
||||||||
Non-trading
foreign currency derivatives liabilities
|
65,487 | 293,830 | ||||||
Accounts payable
|
9,243,613 | 8,306,123 | ||||||
Other payables and accrued
liabilities – Note
14
|
6,735,102 | 3,139,275 | ||||||
Income taxes
payable
|
333,799 | 476,330 | ||||||
Bank borrowings – Note
15
|
5,644,282 | 14,829,228 | ||||||
Total Current
Liabilities
|
22,022,283 | 27,044,786 | ||||||
COMMITMENTS
AND CONTINGENCIES – Note
17
|
As of
|
||||||||
June
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Preferred
Stock
|
||||||||
Par
value: $0.0001
|
||||||||
Authorized:
10,000,000 shares
|
||||||||
Issued
and outstanding: none
|
- | - | ||||||
Common stock
|
||||||||
Par
value : $0.0001
|
||||||||
Authorized: 100,000,000
shares
|
||||||||
Issued
and outstanding: 2009 –13,562,596 shares (2008
–13,562,596 shares)
|
1,356 | 1,356 | ||||||
Additional paid-in
capital
|
5,048,194 | 5,048,194 | ||||||
Accumulated other comprehensive
income
|
2,087,155 | 1,595,091 | ||||||
Retained
earnings
|
11,006,635 | 9,635,012 | ||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
18,143,340 | 16,279,653 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
40,165,623 | 43,324,439 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Net
sales
|
15,445,484 | 19,021,476 | 26,755,289 | 36,853,038 | ||||||||||||
Cost
of sales
|
(12,371,676 | ) | (15,646,609 | ) | (21,285,385 | ) | (30,769,873 | ) | ||||||||
Gross
profit
|
3,073,808 | 3,374,867 | 5,469,904 | 6,083,165 | ||||||||||||
Depreciation – Notes 2 and
11
|
(68,075 | ) | (31,285 | ) | (119,189 | ) | (80,656 | ) | ||||||||
Selling
and distribution costs
|
(580,458 | ) | (547,697 | ) | (1,111,807 | ) | (961,720 | ) | ||||||||
General
and administrative costs, including stock-based
compensation
|
(1,046,340 | ) | (1,571,405 | ) | (2,149,262 | ) | (2,341,101 | ) | ||||||||
Loss
on exchange rate difference
|
(22,865 | ) | (330,788 | ) | (55,589 | ) | (835,675 | ) | ||||||||
Income
from operations
|
1,356,070 | 893,692 | 2,034,057 | 1,864,013 | ||||||||||||
Change
in fair value of currency forwards – Note7
|
(21,510 | ) | - | (109,623 | ) | 29,102 | ||||||||||
Change
in fair value of warrants – Note 5
|
- | (71,250 | ) | - | (71,250 | ) | ||||||||||
Other
income – Note
3
|
21,774 | 120,120 | 88,589 | 224,654 | ||||||||||||
Interest
expenses – Note
4
|
(39,377 | ) | (194,017 | ) | (80,497 | ) | (400,767 | ) | ||||||||
Other
expenses - Note
5
|
(119,549 | ) | - | (171,085 | ) | - | ||||||||||
Income
before taxes
|
1,197,408 | 748,545 | 1,761,441 | 1,645,752 | ||||||||||||
Income
taxes – Note
6
|
(228,752 | ) | (64,298 | ) | (389,819 | ) | (231,178 | ) | ||||||||
Net
income for the period
|
968,656 | 684,247 | 1,371,622 | 1,414,574 | ||||||||||||
Other
comprehensive income
|
||||||||||||||||
-
Foreign currency translation gain
|
456,215 | 516,654 | 492,064 | 748,739 | ||||||||||||
Comprehensive
income
|
1,424,871 | 1,200,901 | 1,863,686 | 2,163,313 | ||||||||||||
Earnings
per share of common stock
|
||||||||||||||||
-
Basic and diluted
|
0.07 | 0.05 | 0.10 | 0.11 | ||||||||||||
-
Diluted
|
0.07 | 0.05 | 0.10 | 0.11 | ||||||||||||
Weighted
average number of shares of common stock outstanding
|
||||||||||||||||
-
Basic
|
13,762,217 | 12,899,560 | 13,651,389 | 12,849,203 | ||||||||||||
-
Diluted
|
13,812,547 | 12,906,483 | 13,703,889 | 12,852,665 |
Six months ended June 30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$
|
$
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
1,371,622 | 1,414,574 | ||||||
Adjustments
to reconcile net income to net cash provided by operating activities
:
|
||||||||
Amortization
of intangible asset
|
25,000 | 25,000 | ||||||
Amortization
of leasehold land
|
31,331 | - | ||||||
Bad
debts written off
|
- | 1,258 | ||||||
Depreciation
|
424,007 | 345,674 | ||||||
Change
in fair value of currency forwards
|
109,623 | (29,102 | ) | |||||
Loss
on disposal of plant and equipment
|
6,834 | 17,551 | ||||||
Share
based payment
|
216,667 | 114,584 | ||||||
Changes
in operating assets and liabilities :
|
||||||||
(Increase)
decrease in -
|
||||||||
Accounts
receivable
|
(850,943 | ) | 4,209,356 | |||||
Notes
receivable
|
(146,046 | ) | 90,315 | |||||
Deposit,
prepaid expenses and other receivables
|
(1,743,845 | ) | (2,761,398 | ) | ||||
Inventories
|
3,451,450 | (4,701,466 | ) | |||||
Increase
(decrease) in -
|
||||||||
Accounts
payable
|
835,955 | 1,973,774 | ||||||
Other
payables and accrued liabilities
|
3,532,852 | 1,127,082 | ||||||
Income
taxes payable
|
(165,841 | ) | 226,163 | |||||
Net
cash flows provided by operating activities
|
7,098,666 | 2,053,365 | ||||||
Cash
flows from investing activities
|
||||||||
Acquisition
of plant and equipment
|
(1,569,989 | ) | (1,935,077 | ) | ||||
Deposit
paid for acquisition of machinery
|
- | - | ||||||
Net
cash flows used in investing activities
|
(1,569,989 | ) | (1,935,077 | ) | ||||
Cash
flows from financing activities
|
||||||||
Proceeds
from issuance of common stock
|
- | 1,963,067 | ||||||
Proceeds
from new short-term bank loans
|
2,626,113 | - | ||||||
Repayment
of short-term bank loans
|
- | (1,423,993 | ) | |||||
Repayment
from other loans
|
(11,936,980 | ) | 2,475,343 | |||||
Net
(repayment) advancement of other bank borrowings
|
- | (670,659 | ) | |||||
Increase
(Decrease) in restricted cash
|
779,112 | (1,026,983 | ) | |||||
Net
cash flows (used in) provided by financing activities
|
(8,531,755 | ) | 1,316,775 | |||||
Net
(decrease) increase in cash and cash equivalents
|
(3,003,078 | ) | 1,435,063 | |||||
Effect
of foreign currency translation on cash and cash
equivalents
|
148,370 | 75,279 | ||||||
Cash
and cash equivalents - beginning of period
|
4,175,780 | 1,489,262 | ||||||
Cash
and cash equivalents - end of period
|
1,321,072 | 2,999,604 |
Six months ended June 30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$
|
$
|
|||||||
Supplemental
disclosures for cash flow information :
|
||||||||
Cash
paid for :
|
||||||||
Interest
|
80,497 | 400,767 | ||||||
Income
taxes
|
- | 5,015 |
1.
|
Organization
and Basis of Presentation
|
1.
|
Organization and Basis of
Presentation (continued)
|
1.
|
Organization and Basis of
Presentation (continued)
|
Name of company
|
Place and date of
incorporation
|
Attributable equity
interest held
|
Principal activities
|
|||
Hong
Kong Highpower Technology Co., Ltd. (“HKHTC”)
|
Hong
Kong
July
4, 2003
|
100%
|
Investment
holding
|
|||
Shenzhen
Highpower Technology Co., Ltd. (“SZ Highpower”)
|
PRC
October
8, 2002
|
100%
|
Manufacturing
of batteries
|
|||
HZ
Highpower Technology Co., Ltd.
(“HZ
Highpower”)
|
PRC
January
29, 2008
|
100%
|
Inactive
|
|||
Spring
Power Technology (Shenzhen) Co., Ltd. (“SZ Spring Power”)
|
|
PRC
June
4, 2008
|
|
100%
|
|
Manufacturing
of batteries
|
2.
|
Summary
of significant accounting policies
|
2.
|
Summary of significant
accounting policies (continued)
|
|
(a)
|
Comparative
amounts
|
2.
|
Summary of significant
accounting policies (continued)
|
2009
|
2008
|
|||||||
Company
A
|
22 | % | 22 | % | ||||
Company
B
|
13 | % | * | |||||
* Less
than 10%
|
||||||||
35 | % | 22 | % |
Percentage of accounts
receivable
|
||||||||
June 30,
|
June 30,
|
|||||||
2009
|
2008
|
|||||||
Company
A
|
24 | % | 40 | % | ||||
Company
B
|
11 | % | 32 | % | ||||
Largest
receivable balances
|
35 | % | 72 | % |
2
|
Summary of significant
accounting policies (continued)
|
Furniture,
fixtures and office equipment
|
20 | % | ||
Leasehold
improvement
|
50 | % | ||
Machinery
and equipment
|
10 | % | ||
Motor
vehicles
|
20 | % |
2.
|
Summary of significant
accounting policies (continued)
|
2.
|
Summary of significant
accounting policies (continued)
|
June 30, 2009
|
June 30,2008
|
|||||||
Quarter
end RMB : US$ exchange rate
|
6.8186 | 6.8670 | ||||||
Average
quarterly RMB : US$ exchange rate
|
6.8535 | 7.0225 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Bank
interest income
|
7,627 | 41,032 | 32,769 | 79,045 | ||||||||||||
Gain
on forward contract
|
- | 11,092 | - | 11,092 | ||||||||||||
Other
interest income
|
- | 6,501 | - | 17,218 | ||||||||||||
Sundry
income
|
14,147 | 61,495 | 55,820 | 117,299 | ||||||||||||
21,774 | 120,120 | 88,589 | 224,654 |
4.
|
Interest
expenses
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Interest
on trade related bank
loan
|
35,203 | 164,479 | 63,403 | 348,460 | ||||||||||||
Interest
on short-term bank loans
|
4,174 | 29,538 | 17,094 | 52,307 | ||||||||||||
39,377 | 194,017 | 80,497 | 400,767 |
5.
|
Other
expenses
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Foreign
exchange contract expenses
|
119,549 | - | 171,085 | - | ||||||||||||
119,549 | - | 171,085 | - |
6.
|
Income
taxes
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
PRC
income taxes
|
238,382 | 17,937 | 408,380 | 288,118 | ||||||||||||
Deferred
tax benefit
|
(9,630 | ) | 46,361 | (18,489 | ) | (56,940 | ) | |||||||||
228,752 | 64,298 | 389,819 | 231,178 |
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Temporary
difference on:
|
||||||||
Reorganization
of expenses
|
(109,134 | ) | (93,300 | ) | ||||
Accelerated
tax depreciation on intangible asset
|
(15,231 | ) | (11,256 | ) | ||||
Deferred
tax assets, net
|
(124,365 | ) | (104,556 | ) | ||||
Presented
in the balance sheet:
|
||||||||
Net
deferred tax assets
|
(124,365 | ) | (104,556 | ) |
7.
|
Risk
Management Activities, Including
Derivative
|
At of
|
||||||||
June
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Currency
forwards (notional amount $4 million), consisting of a put and a
call
|
7,333 | 116,157 |
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Foreign
exchange contracts, net
|
||||||||||||||||
Loss
recognized in Other expenses, net
|
119,549 | - | 171,085 | - |
8.
|
Prepaid
expenses and other
receivables
|
At of
|
||||||||
June
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Purchase
deposits paid
|
1,534,596 | 88,459 | ||||||
Advance
to staff
|
213,278 | 143,595 | ||||||
Other
deposits and prepayments
|
39,094 | 495,325 | ||||||
Other
receivables
|
1,726,926 | 1,005,330 | ||||||
3,513,894 | 1,732,709 |
9.
|
Deferred
charges – Stock-based
compensation
|
At of
|
||||||||
June 30
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Cost
|
||||||||
Stock-based
compensation – consulting fee
|
520,000 | 520,000 | ||||||
Accumulated
amortization
|
520,000 | 303,333 | ||||||
Net
|
- | 216,667 |
10.
|
Inventories
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Raw
materials
|
2,104,424 | 1,708,431 | ||||||
Work
in progress
|
1,734,580 | 1,434,517 | ||||||
Finished
goods
|
4,015,399 | 8,049,138 | ||||||
Packing
materials
|
16,397 | 16,611 | ||||||
7,870,800 | 11,208,697 |
11.
|
Plant
and equipment
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Cost
|
||||||||
Furniture,
fixtures and office equipment
|
729,518 | 598,496 | ||||||
Leasehold
improvement
|
1,299,012 | 712,120 | ||||||
Machinery
and equipment
|
8,872,944 | 8,155,270 | ||||||
Motor
vehicles
|
504,024 | 476,910 | ||||||
11,405,498 | 9,942,796 | |||||||
Accumulated
depreciation
|
||||||||
Furniture,
fixtures and office equipment
|
294,102 | 235,613 | ||||||
Leasehold
improvement
|
- | 220,746 | ||||||
Machinery
and equipment
|
1,830,415 | 1,486,624 | ||||||
Motor
vehicles
|
266,445 | 221,336 | ||||||
2,390,962 | 2,164,319 | |||||||
Net
|
||||||||
Furniture,
fixtures and office equipment
|
435,416 | 362,883 | ||||||
Leasehold
improvement
|
1,299,012 | 491,374 | ||||||
Machinery
and equipment
|
7,042,529 | 6,668,646 | ||||||
Motor
vehicles
|
237,579 | 255,574 | ||||||
9,014,536 | 7,778,477 |
|
The
components of depreciation charged
are:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$ | $ |
$
|
$ | |||||||||||||
Included
in factory overheads
|
118,715 | 159,594 | 304,818 | 265,018 | ||||||||||||
Included
in operating expenses
|
68,075 | 37,285 | 119,189 | 80,656 | ||||||||||||
186,790 | 196,879 | 424,007 | 345,674 |
12.
|
Leasehold
land
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ |
$
|
|||||||
Cost
|
3,112,765 | 3,112,765 | ||||||
Accumulated
amortization
|
(94,476 | ) | (62,255 | ) | ||||
Net
|
3,018,289 | 3,050,510 |
13.
|
Intangible
asset
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Cost
|
||||||||
Consumer
battery license fee
|
1,000,000 | 1,000,000 | ||||||
Accumulated
amortization
|
(125,000 | ) | (100,000 | ) | ||||
Net
|
875,000 | 900,000 |
13.
|
Intangible asset (continued)
|
14.
|
Other
payables and accrued liabilities
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Accrued
expenses
|
1,252,783 | 1,072,331 | ||||||
Royalty
payable
|
922,238 | 1,540,900 | ||||||
Sales
deposits received
|
4,533,234 | 388,261 | ||||||
Value-added
tax payables
|
- | 105,833 | ||||||
Other
payables
|
26,847 | 31,950 | ||||||
6,735,102 | 3,139,275 |
15.
|
Bank
borrowings
|
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Secured:
|
||||||||
Repayable within one
year
|
||||||||
Short term bank
loans
|
1,851,367 | 2,969,939 | ||||||
Other trade related bank
loans
|
3,792,915 | 11,859,289 | ||||||
5,644,282 | 14,829,228 |
|
(a)
|
charge
over bank deposits of $4,119,107 which is included in restricted cash on
the Balance sheet;
|
|
(b)
|
personal
guarantee executed by the directors of the
Company;
|
|
(c)
|
the
legal charge over leasehold land with carrying amount $3,018,289 (see Note
12); and
|
|
(d)
|
other
financial covenant
|
16.
|
Pension
plans
|
17.
|
Commitments
and contingencies
|
Period
ending June 30,
|
$ | |||
2009
|
276,097 | |||
2010
|
235,653 | |||
511,750 |
$ | ||||
Purchase
of plant and equipment
|
187,526 |
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Bills
discounted
|
- | - |
18.
|
Segment
Information
|
Six
months ended June 30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$ | $ | |||||||
Net
revenue
|
||||||||
Hong
Kong and China
|
12,157,121 | 13,346,458 | ||||||
Asia
|
1,573,266 | 2,719,708 | ||||||
Europe
|
9,002,647 | 15,306,697 | ||||||
North
America
|
3,818,465 | 5,187,455 | ||||||
South
America
|
41,911 | 159,329 | ||||||
Others
|
161,879 | 133,391 | ||||||
26,755,289 | 36,853,038 |
At of
|
||||||||
June 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
Accounts
receivable
|
||||||||
Hong
Kong and China
|
5,009,263 | 5,012,471 | ||||||
Asia
|
626,535 | 169,376 | ||||||
Europe
|
2,472,255 | 2,695,166 | ||||||
North
America
|
85,628 | 875,022 | ||||||
South
America
|
1,519,566 | 13,558 | ||||||
Others
|
10,281 | - | ||||||
9,723,528 | 8,765,593 |
|
·
|
EBITDA
(1) does not reflect our cash expenditures or future requirements for
capital expenditures or contractual commitments; (2) does not reflect
changes in, or cash requirements for, our working capital needs;
(3) does not reflect the interest expense, or the cash requirements
necessary to service interest or principal payments, on our debt;
(4) does not reflect income taxes or the cash requirements for any
tax payments; and (5) does not reflect all of the costs associated
with operating our business;
|
|
·
|
although
depreciation and amortization are non-cash charges, the assets being
depreciated and amortized often will have to be replaced in the future,
and EBITDA does not reflect any cash requirements for such replacements;
and
|
|
·
|
other
companies may calculate EBITDA differently than we do, limiting its
usefulness as a comparative
measure.
|
Three Months Ended
|
Six Months Ended
|
||||||||
June 30,
|
June 30,
|
||||||||
2009
|
2008
|
2009
|
2008
|
||||||
$
|
$
|
$
|
$
|
||||||
Net
income (loss)
|
968,656
|
684,247
|
1,371,622
|
1,414,574
|
|||||
Interest
expense
|
39,377
|
194,047
|
80,497
|
400,767
|
|||||
Income
taxes
|
228,752
|
64,298
|
389,819
|
231,178
|
|||||
Depreciation
|
186,790
|
190,879
|
424,007
|
345,674
|
|||||
Amortization
|
114,731
|
71,398
|
273,888
|
99,462-
|
|||||
EBITDA
|
1,538,306
|
1,204,869
|
2,539,833
|
2,491,655
|
Exhibit
Number
|
Description of Document
|
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
|
*
|
This
exhibit shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933 or the Securities Exchange Act of
1934, whether made before or after the date hereof and irrespective of any
general incorporation language in any
filings.
|
Hong Kong Highpower Technology, Inc. | ||
Dated:
August 13, 2009
|
/s/ |
Dang
Yu Pan
|
By: |
Dang Yu Pan
|
|
Its: |
Chairman
of the Board and Chief Executive
Officer |
|
/s/ |
Henry Ngan
|
|
By: |
Henry
Ngan
|
|
Its: |
Chief
Financial
Officer
|