x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
For
the Quarterly Period Ended September 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 September 30, 2009 (Unaudited) and December 31,
2008
|
2
|
||||
(b)
|
Statements
of Comprehensive Income for the Three and Nine months Ended September 30,
2009 and 2008 (Unaudited)
|
4
|
||||
(c)
|
Statements
of Cash Flows for the Nine months Ended September 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
|
34
|
||||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
41
|
||||
Item
4.
|
Controls
and Procedures
|
42
|
||||
Part II
|
Other
Information
|
|||||
Item
1.
|
Legal
Proceedings
|
43
|
||||
Item
1A.
|
Risk
Factors
|
43
|
||||
Item
2.
|
Unregistered
Sale of Equity Securities and Use of Proceeds
|
43
|
||||
Item
3.
|
Default
Upon Senior Securities
|
43
|
||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
43
|
||||
Item
5.
|
Other
Information
|
43
|
||||
Item
6.
|
Exhibits
|
44
|
||||
Signatures
|
45
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ |
$
|
|||||||
ASSETS
|
||||||||
Current Assets
:
|
||||||||
Cash and cash
equivalents
|
7,203,175 | 4,175,780 | ||||||
Restricted cash
|
4,552,798 | 4,845,478 | ||||||
Accounts
receivable
|
11,260,286 | 8,765,593 | ||||||
Notes receivable
|
400,876 | 429,815 | ||||||
Prepaid expenses and other
receivables – Note
8
|
4,191,720 | 1,732,709 | ||||||
Deferred
charges – Stock-based compensation – Note 9
|
- | 216,667 | ||||||
Inventories – Note 10
|
10,437,454 | 11,208,697 | ||||||
Total
Current Assets
|
38,046,309 | 31,374,739 | ||||||
Deferred
tax assets – Note
6
|
137,400 | 104,556 | ||||||
Plant
and equipment, net – Note 11
|
9,962,416 | 7,778,477 | ||||||
Leasehold
land, net – Note 12
|
3,002,530 | 3,050,510 | ||||||
Intangible
asset, net – Note
13
|
862,500 | 900,000 | ||||||
Currency
forward – Note
7
|
- | 116,157 | ||||||
TOTAL
ASSETS
|
52,011,155 | 43,324,439 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
LIABILITIES
|
||||||||
Current Liabilities
:
|
||||||||
Non-trading foreign currency
derivatives liabilities
|
5,335 | 293,830 | ||||||
Accounts payable
|
15,152,492 | 8,306,123 | ||||||
Other payables and accrued
liabilities – Note 14
|
9,067,162 | 3,139,275 | ||||||
Income taxes
payable
|
812,688 | 476,330 | ||||||
Bank borrowings – Note 15
|
6,495,909 | 14,829,228 | ||||||
Total Current
Liabilities
|
31,533,586 | 27,044,786 | ||||||
COMMITMENTS
AND CONTINGENCIES – Note
17
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$ | $ | |||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Preferred
stock
|
||||||||
Par
value: US$0.0001
|
||||||||
Authorized:
10,000,000 shares
|
||||||||
Issued
and outstanding: none
|
- | - | ||||||
Common stock
|
||||||||
Par
value : US$0.0001
|
||||||||
Authorized:
100,000,000 shares
|
||||||||
Issued
and outstanding: 2009 – 13,562,597 shares (2008
- 13,562,596 shares)
|
1,356 | 1,356 | ||||||
Additional paid-in
capital
|
5,048,194 | 5,048,194 | ||||||
Accumulated other comprehensive
income
|
1,987,709 | 1,595,091 | ||||||
Retained earnings
|
13,440,310 | 9,635,012 | ||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
20,477,569 | 16,279,653 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
52,011,155 | 43,324,439 |
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Net
sales
|
21,056,149 | 20,473,472 | 47,811,438 | 57,326,510 | ||||||||||||
Cost
of sales
|
(15,835,110 | ) | (16,961,664 | ) | (37,120,495 | ) | (47,731,537 | ) | ||||||||
Gross
profit
|
5,221,039 | 3,511,808 | 10,690,943 | 9,594,973 | ||||||||||||
Depreciation
|
(50,120 | ) | (49,792 | ) | (169,309 | ) | (130,448 | ) | ||||||||
Selling
and distribution costs
|
(767,194 | ) | (799,666 | ) | (1,879,001 | ) | (1,761,386 | ) | ||||||||
General
and administrative costs, including stock-based
compensation
|
(1,464,392 | ) | (1,915,367 | ) | (3,613,654 | ) | (4,256,468 | ) | ||||||||
Loss
on exchange rate difference
|
(6,813 | ) | (159,310 | ) | (62,402 | ) | (994,985 | ) | ||||||||
Income
from operations
|
2,932,520 | 587,673 | 4,966,577 | 2,451,686 | ||||||||||||
Change
in fair value of currency forwards – Note 3
|
(7,483 | ) | - | (117,106 | ) | 29,102 | ||||||||||
Change
in fair value of warrants – Note 4
|
- | (204,750 | ) | - | (276,000 | ) | ||||||||||
Other
income – Note 3
|
289,843 | 101,179 | 378,432 | 325,833 | ||||||||||||
Interest
expenses – Note 4
|
(199,125 | ) | (159,063 | ) | (279,622 | ) | (559,830 | ) | ||||||||
Other
expenses – Note 5
|
(52,878 | ) | - | (223,963 | ) | - | ||||||||||
Income
before taxes
|
2,962,877 | 325,039 | 4,724,318 | 1,970,791 | ||||||||||||
Income
taxes – Note 6
|
(529,201 | ) | (35,683 | ) | (919,020 | ) | (266,861 | ) | ||||||||
Net
income for the period
|
2,433,676 | 289,356 | 3,805,298 | 1,703,930 | ||||||||||||
Other
comprehensive income
|
||||||||||||||||
-
Foreign currency translation gain
|
(99,446 | ) | 109,161 | 392,618 | 857,900 | |||||||||||
Comprehensive
income
|
2,334,230 | 398,517 | 4,197,916 | 2,561,830 | ||||||||||||
Earnings
per share of common stock
|
||||||||||||||||
-
Basic
|
0.18 | 0.02 | 0.28 | 0.13 | ||||||||||||
-
Diluted
|
0.18 | 0.02 | 0.28 | 0.13 | ||||||||||||
Weighted
average common shares outstanding
|
||||||||||||||||
-
Basic
|
13,562,597 | 13,562,596 | 13,621,466 | 13,088,737 | ||||||||||||
-
Diluted
|
13,612,097 | 13,615,096 | 13,673,966 | 13,108,644 |
Nine
months ended
September
30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$ | $ | |||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
3,805,298 | 1,703,930 | ||||||
Adjustments
to reconcile net income to net cash flows
|
||||||||
provided
by operating activities:
|
||||||||
Amortization
of intangible asset
|
37,500 | 37,500 | ||||||
Amortization
of leasehold land
|
47,073 | - | ||||||
Bad
debts written off
|
58,407 | 4,445 | ||||||
Depreciation
|
648,681 | 548,884 | ||||||
Change
in fair value of currency forwards
|
117,106 | (29,102 | ) | |||||
Change
in fair value of warrants
|
- | 276,000 | ||||||
Loss
on disposal of plant and equipment
|
24,713 | 43,704 | ||||||
Stock
based compensation
|
216,667 | 173,333 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
decrease in -
|
||||||||
Accounts
receivable
|
(2,440,816 | ) | 5,859,341 | |||||
Notes
receivable
|
31,136 | 332,982 | ||||||
Deposit,
prepaid expenses and other receivables
|
(2,421,799 | ) | (1,381,578 | ) | ||||
Inventories
|
900,504 | (954,510 | ) | |||||
Increase
(decrease) in -
|
||||||||
Accounts
payable
|
6,723,770 | (3,361,758 | ) | |||||
Other
payables and accrued liabilities
|
5,861,389 | 1,029,025 | ||||||
Income
tax payable
|
298,038 | 1,159,544 | ||||||
|
||||||||
Net
cash flows provided by operating activities
|
13,907,667 | 5,441,740 | ||||||
Cash
flows from investing activities
|
||||||||
Acquisition
of plant and equipment
|
(2,757,805 | ) | (2,523,600 | ) | ||||
Proceeds
from disposal of plant and equipment
|
- | 393 | ||||||
Net
cash flows used in investing activities
|
(2,757,805 | ) | (2,523,207 | ) | ||||
Cash
flows from financing activities
|
||||||||
Proceeds
from issuance of common stock
|
- | 1,486,400 | ||||||
Proceeds
from / (repayment) new short-term bank loans
|
3,478,236 | (1,437,492 | ) | |||||
Repayment
of short-term bank loans
|
(11,956,136 | ) | (5,298,812 | ) | ||||
Net
advancement of other bank borrowings
|
- | 3,487,980 | ||||||
Decrease
in restricted cash
|
348,706 | 1,243,154 | ||||||
|
||||||||
Net
cash flows used in financing activities
|
(8,129,194 | ) | (518,770 | ) | ||||
Net
increase in cash and cash equivalents
|
3,020,668 | 2,399,763 | ||||||
Effect
of foreign currency translation on cash and cash
equivalents
|
6,727 | 145,593 | ||||||
Cash
and cash equivalents - beginning of period
|
4,175,780 | 1,489,262 | ||||||
Cash
and cash equivalents - end of period
|
7,203,175 | 4,034,618 |
Nine
months ended
September
30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$ | $ | |||||||
Supplemental
disclosures of cash flow information :
|
||||||||
Cash paid for :
|
||||||||
Interest
|
279,622 | 559,830 | ||||||
Income
taxes
|
620,983 | 137,530 |
1.
|
Corporation information
and
reorganization
|
1.
|
Corporation information
and reorganization
(Continued)
|
2.
|
Summary
of significant accounting policies
|
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 (Continued)
|
2.
|
Summary of significant
accounting policies (Continued)
|
2009
|
2008
|
|||||||
Company
A
|
21 | % | 22 | % | ||||
Company
B
|
10 | % | * | |||||
* Less
than 10%
|
||||||||
31 | % | 22 | % |
2.
|
Summary of significant
accounting policies (Continued)
|
Percentage of accounts receivable
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Company
A
|
24 | % | 17 | % | ||||
Company
B
|
* | 14 | % | |||||
Company
C
|
10 | % | 13 | % | ||||
Company
D
|
12 | % | * | |||||
* Less
than 10%
|
||||||||
Largest
receivable balances
|
46 | % | 44 | % |
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)
|
2.
|
Summary of significant
accounting policies (Continued)
|
September
30,
|
||||||||
2009
|
2008
|
|||||||
Quarter
end RMB : US$ exchange rate
|
6.8178 | 6.8325 | ||||||
Average
quarterly RMB : US$ exchange rate
|
6.8425 | 6.9566 |
2.
|
Summary of significant
accounting policies (Continued)
|
2.
|
Summary of significant
accounting policies (Continued)
|
2.
|
Summary of significant
accounting policies (Continued)
|
2.
|
Summary of significant
accounting policies (Continued)
|
3.
|
Other
income
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$ |
$
|
$
|
$
|
|||||||||||||
Bank
interest income
|
9,748 | 56,266 | 42,517 | 135,311 | ||||||||||||
Gain
on forward contract
|
- | 6,049 | - | 17,141 | ||||||||||||
Government
sponsor
|
210,726 | - | 210,726 | - | ||||||||||||
Other
interest income
|
- | 3,379 | - | 20,597 | ||||||||||||
Sundry
income
|
69,369 | 35,485 | 125,189 | 152,784 | ||||||||||||
|
289,843 | 101,179 | 378,432 | 325,833 |
4.
|
Interest
expenses
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Interest
on trade related bank loan
|
72,016 | 128,316 | 135,419 | 476,776 | ||||||||||||
Interest
on short-term bank loans
|
127,109 | 30,747 | 144,203 | 83,054 | ||||||||||||
199,125 | 159,063 | 279,622 | 559,830 |
5.
|
Other
expenses
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$ | $ | $ | $ | |||||||||||||
Foreign
exchange contract expenses
|
52,878 | - | 223,963 | - | ||||||||||||
52,878 | - | 223,963 | - |
6.
|
Income
taxes
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$ |
$
|
$
|
$
|
|||||||||||||
PRC
income taxes
|
542,205 | 196,231 | 950,513 | 484,349 | ||||||||||||
Deferred
tax benefit
|
(13,004 | ) | (160,548 | ) | (31,493 | ) | (217,488 | ) | ||||||||
529,201 | 35,683 | 919,020 | 266,861 |
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Temporary
difference on :-
|
||||||||
Recognized
of expenses
|
(120,371 | ) | (93,300 | ) | ||||
Accelerated
tax depreciation on intangible asset
|
(17,029 | ) | (11,256 | ) | ||||
Deferred
tax assets, net
|
(137,400 | ) | (104,556 | ) | ||||
Recognized
in the balance sheet:
|
||||||||
Net deferred tax
assets
|
(137,400 | ) | (104,556 | ) |
7.
|
Risk
Management Activities, Including
Derivative
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Currency
forwards (notional amount $Nil million), consisting
of a put and a call
|
- | 116,157 |
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Foreign
exchange contracts, net
|
||||||||||||||||
Gains
recognized in Other income, net
|
- | 6,049 | - | 17,141 | ||||||||||||
Gains
recognized in Other expenses, net
|
52,878 | - | 223,963 | - |
7.
|
Risk Management Activities,
Including Derivative (continued)
|
8.
|
Prepaid
expenses and other receivables
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Purchase
deposits paid
|
820,272 | 88,459 | ||||||
Advance
to staff
|
177,044 | 143,595 | ||||||
Other
deposits and prepayments
|
1,652,560 | 495,325 | ||||||
Value-added
tax prepayment
|
55,434 | - | ||||||
Other
receivables
|
1,486,410 | 1,005,330 | ||||||
4,191,720 | 1,732,709 |
9.
|
Deferred
charges – Stock-based compensation
|
As
of
|
||||||||
September 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
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Raw
materials
|
3,422,253 | 1,708,431 | ||||||
Work
in progress
|
2,217,019 | 1,434,517 | ||||||
Finished
goods
|
4,776,247 | 8,049,138 | ||||||
Consumables
|
- | 16,611 | ||||||
Packing
materials
|
21,935 | - | ||||||
10,437,454 | 11,208,697 |
11.
|
Plant
and equipment
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Cost
|
||||||||
Furniture,
fixtures and office equipment
|
821,763 | 598,496 | ||||||
Leasehold
improvement
|
2,792,408 | 712,120 | ||||||
Machinery
and equipment
|
8,275,015 | 8,155,270 | ||||||
Motor
vehicles
|
692,632 | 476,910 | ||||||
12,581,818 | 9,942,796 | |||||||
Accumulated
depreciation
|
||||||||
Furniture,
fixtures and office equipment
|
326,918 | 235,613 | ||||||
Leasehold
improvement
|
- | 220,746 | ||||||
Machinery
and equipment
|
2,002,479 | 1,486,624 | ||||||
Motor
vehicles
|
290,005 | 221,336 | ||||||
2,619,402 | 2,164,319 | |||||||
Net
|
||||||||
Furniture,
fixtures and office equipment
|
494,845 | 362,883 | ||||||
Leasehold
improvement
|
2,792,408 | 491,374 | ||||||
Machinery
and equipment
|
6,272,536 | 6,668,646 | ||||||
Motor
vehicles
|
402,627 | 255,574 | ||||||
9,962,416 | 7,778,477 |
|
The
components of depreciation charged
are:
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Included
in factory overheads
|
174,554 | 194,795 | 479,372 | 459,813 | ||||||||||||
Included
in operating expenses
|
50,120 | 49,792 | 169,309 | 130,448 | ||||||||||||
224,674 | 244,587 | 648,681 | 590,261 |
12.
|
Leasehold
land
|
At
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Cost
|
3,112,765 | 3,112,765 | ||||||
Accumulated
amortization
|
(110,235 | ) | (62,255 | ) | ||||
Net
|
3,002,530 | 3,050,510 |
13.
|
Intangible
asset
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Cost
|
||||||||
Consumer
battery license fee
|
1,000,000 | 1,000,000 | ||||||
Accumulated
amortization
|
(137,500 | ) | (100,000 | ) | ||||
Net
|
862,500 | 900,000 |
13.
|
Intangible
asset (Continued)
|
14.
|
Other
payables and accrued liabilities
|
As
of
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
Accrued
expenses
|
1,575,447 | 1,072,331 | ||||||
Royalty
payable
|
1,104,915 | 1,540,900 | ||||||
Sales
deposits received
|
6,354,664 | 388,261 | ||||||
Value-added
tax payables
|
- | 105,833 | ||||||
Other
payables
|
32,136 | 31,950 | ||||||
9,067,162 | 3,139,275 |
15.
|
Bank
borrowings
|
As of
|
||||||||
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$ | |||||||
Secured:
|
||||||||
Repayable
within one year
|
||||||||
Short
term bank loans
|
1,860,969 | 2,969,939 | ||||||
Other
trade related bank loans
|
4,634,940 | 11,859,289 | ||||||
6,495,909 | 14,829,228 |
|
(a)
|
charge
over bank deposits of $4,552,798 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 $3,002,530;
and
|
|
(d)
|
other
financial covenant:-
|
16.
|
Pension
plans
|
17.
|
Commitments
and contingencies
|
Year
ending September 30
|
$
|
|||
2009
|
172,510 | |||
2010
|
509,952 | |||
682,462 |
$ | ||||
Purchase
of plant and equipment
|
224,449 |
17.
|
Commitments and contingencies
(Continued)
|
As of
|
||||||
September
30,
|
December
31,
|
|||||
2009
|
2008
|
|||||
(Unaudited)
|
(Audited)
|
|||||
$ | $ | |||||
Bills
discounted
|
-
|
- |
18.
|
Segment
Information
|
Nine months ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net
revenue
|
$
|
$ | ||||||
Hong
Kong and China
|
22,082,229 | 23,619,551 | ||||||
Asia
|
2,598,107 | 3,859,153 | ||||||
Europe
|
15,666,163 | 20,979,729 | ||||||
North
America
|
7,195,782 | 8,482,758 | ||||||
South
America
|
41,979 | 155,278 | ||||||
Africa
|
61,444 | - | ||||||
Others
|
165,734 | 230,041 | ||||||
47,811,438 | 57,326,510 |
As of
|
||||||||
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Accounts
receivable
|
$
|
$
|
||||||
Hong
Kong and China
|
6,532,529 | 5,012,471 | ||||||
Asia
|
555,356 | 169,376 | ||||||
Europe
|
2,590,347 | 2,695,166 | ||||||
North
America
|
1,571,780 | 875,022 | ||||||
South
America
|
10,274 | 13,558 | ||||||
|
11,260,286 | 8,765,593 |
19.
|
Subsequent
Events
|
Director
|
For
|
Against
|
Withheld
|
Abstain
|
Elected
|
||||||||||||
Dang
Yu Pan
|
10,173,476
|
0
|
16,408
|
0
|
Yes
|
||||||||||||
Wen
Liang Li
|
10,173,476
|
0
|
16,408
|
0
|
Yes
|
||||||||||||
Chao
Li
|
10,173,476
|
0
|
16,408
|
0
|
Yes
|
||||||||||||
Xinhai
Li
|
10,173,476
|
0
|
16,408
|
0
|
Yes
|
||||||||||||
Ping
Li
|
10,173,476
|
0
|
16,408
|
0
|
Yes
|
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:
November 12, 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
|