x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the fiscal year ended December 31, 2008. | |
OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
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Delaware
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22-2497491
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(State
or other jurisdiction
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(I.R.S.
Employer ID Number)
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of
incorporation or organization)
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|
·
|
correct
the Commission File Number on it
cover;
|
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·
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edit
Item 7: Management’s Discussion and Analysis to add one
sentence to “Results of Operations – Year Ended December 31, 2008 Compared
to Year Ended December 31, 2007,” and one sentence to “Results of
Operations – Year Ended December 31, 2007 Compared to Year Ended December
31, 2006;”
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|
·
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edit
Notes 7, 14 and 15 in the Notes to Consolidated Financial
Statements;
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·
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add
Note 23 to the Notes to Consolidated Financial Statements;
and
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·
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amend
Exhibits 31.1, 31.2 and 32.
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Ø
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In
July 2006 ZQ Power-Tech received its first commercial order for bus
batteries, as a Chinese bus manufacturer ordered five PLI battery
packages.
|
Ø
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In
March 2007 ZQ Power-Tech signed a sales contract with Beijing Guoqiang
Global Technology Development Co. Ltd. to supply a total of 3,000 PLI
battery sets for use in electric garbage trucks that were designed for the
2008 Olympics. Shipments commenced in May 2007 and continued
until February 2008. The full contract was valued at
$10,000,000.
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Ø
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In
July 2007 ZAP, a manufacturer of zero emissions vehicles located in the
U.S., placed an order to pay $5.168 million for ZQ Power-Tech batteries
for use in ZAP’s vehicles.
|
Ø
|
In
March 2008 ZQ Power-Tech announced that it had collaborated with Wuxi
Angell on the development of an electric hybrid motorcycle that utilizes
ZQ Power-Tech batteries. Three versions of the hybrid
motorcycle were introduced to the U.S. market in February
2009.
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Ø
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In
October 2008 ZQ Power-Tech signed a five year sales agreement with Veken
USA Co. Ltd., a China-based manufacturer. Under the contract ZQ
Power-Tech will provide lithium-ion polymer batteries for use in hybrid
scooters distributed by Veken in Europe and the U.S. Wuxi
Angell will be responsible for assembling the
scooters.
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-
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A
cellular phone battery pole plate.
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-
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A
polymer lithium-ion battery and its production method.
|
-
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A
large capacity polymer lithium-ion battery and its production
method.
|
-
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An
ultra-thin polymer lithium-ion battery for a miner’s lamp and its
production method.
|
-
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A
walkie-talkie lithium-ion battery and its production
method.
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-
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A
mobile phone battery and its production method.
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-
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a
nano material lithium ion battery and its production
process.
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·
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a
limited availability of market quotations for our common
stock;
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·
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a
limited amount of news and analyst coverage for our company;
and
|
·
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a
decreased ability to issue additional securities or obtain additional
financing in the future.
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Bid
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||||||||
Quarter Ending
|
High
|
Low
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||||||
March
31, 2007
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$ | 2.03 | $ | .60 | ||||
June
30, 2007
|
$ | 3.13 | $ | 1.21 | ||||
September
30, 2007
|
$ | 5.98 | $ | 2.51 | ||||
December
31, 2007
|
$ | 9.45 | $ | 3.17 | ||||
March
31, 2008
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$ | 5.50 | $ | 3.50 | ||||
June
30, 2008
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$ | 6.40 | $ | 2.99 | ||||
September
30, 2008
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$ | 6.00 | $ | 2.99 | ||||
December
31, 2008
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$ | 3.40 | $ | 1.17 |
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
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Weighted
average exercise price of outstanding options, warrants and
rights
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Number
of securities remaining available for future issuance under equity
compensation plans
|
|||
Equity
compensation plans approved by security holders
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0
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N.A.
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0
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||
Equity
compensation plans not approved by security holders
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0
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N.A.
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1,480,000(1)
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||
Total
|
0
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N.A.
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1,480,000
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(1)
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In
2006 the Board of Directors adopted the 2006 Equity Incentive
Plan. The Plan authorizes the Board to issue up to 8,000,000
common shares during the ten year period of the Plan. The
shares may be awarded to employees or directors of Advanced Battery
Technologies or its subsidiaries as well as to consultants to those
entities. The shares may be awarded as outright grants or in
the form of options, restricted stock or performance
shares. 1,480,000 shares remain available for issuance under
the plan.
|
Period
|
Total
Number of Shares Purchased
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Average
Price Paid per Share
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs(1)
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Maximum
Number of Shares that May Yet Be Purchased Under Plans or
Programs
|
October
1, 2008- October 31, 2008
|
0
|
N.A.
|
0
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4,000,000
|
November
1, 2008 – November 30, 2008
|
0
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N.A.
|
0
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4,000,000
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December
1, 2009 – December 31, 2008
|
119,510
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$ 2.47
|
119,510
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3,880,490
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Total
|
$ 2.47
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119,510
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3,880,490
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(1)
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In
December 2008 the Board of Directors announced a stock repurchase program
under which the Company may purchase up to 4 million shares of its common
stock. Purchases will be made, from time to time, in the open
market, depending on several factors, including price, prevailing market
conditions, and other investment opportunities. The program
will expire on November 30,
2009.
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2008
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2007
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2006
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2005
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2004
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||||||||||||||||
Revenue
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$ | 45,172,111 | $ | 31,897,618 | $ | 16,329,340 | $ | 4,222,960 | $ | 1,191,509 | ||||||||||
Net
Income/(Loss)
|
$ | 16,096,120 | $ | 10,205,406 | $ | 8,040,752 | $ | (157,637 | ) | $ | (2,349,704 | ) | ||||||||
Net
Income/(Loss) Per Share – Diluted
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$ | 0.31 | $ | 0.21 | $ | 0.17 | $ | (0.01 | ) | $ | (0.23 | ) | ||||||||
Total
Assets
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$ | 77,752,231 | $ | 38,723,210 | $ | 22,521,982 | $ | 17,158,364 | $ | 11,540,316 | ||||||||||
Long-Term
Debt
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-- | $ | 411,263 | $ | 384,413 | -- | $ | 1,214,925 | ||||||||||||
Shareholders’
Equity
|
$ | 76,454,596 | $ | 36,476,504 | $ | 23,206,350 | $ | 9,086,632 | $ | 5,614,788 | ||||||||||
Shareholders’
Equity Per Share
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$ | 1.40 | $ | 0.73 | $ | 0.47 | $ | 0.22 | $ | 0.23 |
ITEM
7
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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·
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New
Customers. Our revenue in 2008 included $10,331,311 sold
to customers that had not purchased from us in prior
years. This expansion of our customer base is primarily a
result of the efforts of our growing network of independent sales
agents.
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·
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Vehicle
Batteries. Our sales of batteries for use in motorized
vehicles increased by 70% from 2007 to 2008. We expect growth
in this area to continue, primarily due to our expanding relationship with
Wuxi Angell.
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·
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Miner’s
Lamps. Our one end product, our miner’s lamp, has fueled
a significant portion of our growth. In 2008 our sales of
miner’s lamps and batteries for miner’s lamps totaled $10,777,298,
compared to $5,534,798 in
2007.
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·
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Small Capacity
Batteries.
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$4,727,223
(10.5%)
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·
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Medium
Capacity Batteries:
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$16,200,079
(35.9%)
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·
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Large
Capacity Batteries:
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$13,467,511
(29.8%)
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·
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Other
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$10,777,298
(23.8%)
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·
|
In
the case of employees, the period of amortization is based on a vesting
schedule included in the employees’ contracts. The average
vesting period for the employees is 18.5 years. To date, no one
of the employees of ZQ Power-Tech who received stock awards has terminated
employment; so the amortization has been proportional to that
schedule.
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·
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In
the case of consultants, the period of amortization is based on the term
of the consulting contracts, although amortization will be accelerated if
the consulting relationship ceases. Again, to date, the
consultants who received stock have remained involved in the Company’s
affairs, so there has been no acceleration of
amortization.
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·
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The
first was our determination, detailed in Note 20 to the Financial
Statements, that we had no need of a reserve for warranty
costs. The primary reason for the determination was the fact
that we have received no warranty claims to date.
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·
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The
second was our determination, detailed in Note 14 to the Financial
Statements, to amortize the stock compensation that we gave to our
employees in 2005 and 2006 over an average of 18.5 years. The
determination was based on the senior status of the employees, the vesting
period under their employment contracts, and our expectation that they
will remain employed by ZQ Power-Tech for at least that
period.
|
·
|
The
third was our determination, detailed in Note 7 to the Financial
Statements, to record an impairment loss on our investment in Beyond
E-Tech. The determination was based on Beyond E-Tech’s
projection of cash flows for the next five
years.
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ITEM
7A
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QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
|
Report
of Independent Registered Public Accounting Firm
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22
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Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
23
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Consolidated
Statements of Income and Other Comprehensive Income for the
years ended December 31, 2008, 2007 and 2006
|
24
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Consolidated
Statements of Changes in Stockholders’ Equity for the years ended
December 31, 2008, 2007 and 2006
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25
|
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008,
2007 and 2006
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26
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|
|
Notes
to Consolidated Financial Statements
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27
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ADVANCED
BATTERY TECHNOLOGIES, INC.
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||||||||
CONSOLIDATED
BALANCE SHEETS
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||||||||
ASSETS
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||||||||
December
31,
|
||||||||
2008
|
2007
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|||||||
Current
assets:
|
||||||||
Cash and cash
equivalents
|
$ | 32,746,155 | $ | 2,704,823 | ||||
Accounts
receivable, net
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14,708,078 | 16,026,604 | ||||||
Inventories,
net
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1,748,115 | 1,159,474 | ||||||
Loan
receivable
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1,600,000 | - | ||||||
Other
receivables
|
240,726 | 84,950 | ||||||
Advance
to suppliers
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246,163 | 1,608,967 | ||||||
Total
Current Assets
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51,289,237 | 21,584,818 | ||||||
Property,
plant and equipment, net of accumulated depreciation of $2,803,788
as of December 31, 2008 and $2,016,275 as of December 31,
2007
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16,635,843 | 13,243,236 | ||||||
Total
Fixed Assets
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16,635,843 | 13,243,236 | ||||||
Other
assets:
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||||||||
Investment
in unconsolidated entity
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1,037,550 | - | ||||||
Investment
advance
|
3,000,000 | - | ||||||
Security
deposit
|
6,000 | 6,000 | ||||||
Deposit
for long-term assets
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1,748,363 | - | ||||||
Intangible
assets, net
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1,548,158 | 1,563,037 | ||||||
Goodwill
|
2,487,080 | 2,326,119 | ||||||
Total
other assets
|
9,827,151 | 3,895,156 | ||||||
Total
Assets
|
$ | 77,752,231 | $ | 38,723,210 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 415,850 | $ | 406,454 | ||||
Customer
deposits
|
80,479 | 75,116 | ||||||
Accrued
expenses and other payables
|
784,070 | 618,173 | ||||||
Loan
from officers
|
17,236 | 735,700 | ||||||
Total
Current Liabilities
|
1,297,635 | 1,835,444 | ||||||
Long-term
liabilities:
|
||||||||
Note
payable
|
- | 411,263 | ||||||
Total
Liabilities
|
1,297,635 | 2,246,707 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders'
Equity
|
||||||||
Common
stock, $0.001 par value, 60,000,000 shares authorized; 54,781,577
shares issued and 54,662,067 shares outstanding as of December 31, 2008
and
49,688,998 shares issued and outstanding as of December 31,
2007
|
54,782 | 49,689 | ||||||
Additional
paid-in-capital
|
39,289,991 | 18,029,891 | ||||||
Accumulated
other comprehensive income
|
6,012,475 | 3,099,994 | ||||||
Retained
earnings
|
31,393,050 | 15,296,930 | ||||||
Less:
Cost of treasury stock (119,510 shares)
|
(295,702 | ) | - | |||||
Total
Stockholders' Equity
|
76,454,596 | 36,476,504 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 77,752,231 | $ | 38,723,210 |
ADVANCED
BATTERY TECHNOLOGIES, INC.
|
||||||||||||
CONSOLIDATED
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
|
||||||||||||
YEAR
ENDED DECEMBER 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(Restated)
|
(Restated)
|
|||||||||||
Revenues
|
$ | 45,172,111 | $ | 31,897,618 | $ | 16,329,340 | ||||||
Cost
of Goods Sold
|
23,122,610 | 18,039,861 | 7,344,642 | |||||||||
Gross
Profit
|
22,049,501 | 13,857,757 | 8,984,698 | |||||||||
Operating
Expenses
|
||||||||||||
Research
& Development expenses
|
4,463 | 383,871 | 181,257 | |||||||||
Selling,
general and administrative
|
3,263,409 | 3,283,230 | 1,423,621 | |||||||||
Operating
income
|
18,781,629 | 10,190,656 | 7,379,820 | |||||||||
Other
Income (Expenses)
|
||||||||||||
Interest
income (expenses)
|
124,487 | 14,750 | (237,148 | ) | ||||||||
Equity (loss)
from unconsolidated entity
|
(90,707 | ) | - | - | ||||||||
Other
income (expenses)
|
3,118 | - | (9,282 | ) | ||||||||
Total
other income (expenses)
|
36,898 | 14,750 | (246,430 | ) | ||||||||
Income
Before Income Taxes
|
18,818,527 | 10,205,406 | 7,133,390 | |||||||||
Provision
for Income Taxes (Benefit)
|
2,722,407 | - | (907,362 | ) | ||||||||
Net
Income
|
$ | 16,096,120 | $ | 10,205,406 | $ | 8,040,752 | ||||||
Other
Comprehensive Income
|
||||||||||||
Foreign
currency translation adjustment
|
2,912,481 | 2,125,410 | 844,251 | |||||||||
Comprehensive
Income
|
$ | 19,008,602 | $ | 12,330,816 | $ | 8,885,003 | ||||||
Earnings
per share
|
||||||||||||
Basic
|
$ | 0.37 | $ | 0.25 | $ | 0.21 | ||||||
Diluted
|
$ | 0.31 | $ | 0.21 | $ | 0.17 | ||||||
Weighted
average number of common shares outstanding
|
||||||||||||
Basic
|
43,493,492 | 40,924,452 | 37,474,371 | |||||||||
Diluted
|
51,671,992 | 49,677,285 | 46,569,371 |
ADVANCED
BATTERY TECHNOLOGIES, INC.
|
||||||||||||||||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||||||||
FOR
THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006
|
||||||||||||||||||||||||||||||||||||
Accumulated
Other
|
Unearned
|
|||||||||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Comprehensive
|
Stock-based
|
Treasury
Stock
|
Retained
|
Comprehensive
|
||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
Paid
in Capital
|
Income
|
Compensation
|
at Cost
|
Earnings
(Deficit)
|
Income
(loss)
|
Total
|
||||||||||||||||||||||||||||
Balance
at January 1,2006
|
25,337,116 | $ | 25,337 | $ | 12,343,864 | $ | 130,333 | $ | (1,905,933 | ) | $ | (2,949,228 | ) | $ | 7,644,373 | |||||||||||||||||||||
Stock
issued for acquisition of minority interests
|
11,780,594 | 11,781 | 5,878,516 | 5,890,297 | ||||||||||||||||||||||||||||||||
Stock
issued for acquisition of a patent
|
4,400,000 | 4,400 | - | 4,400 | ||||||||||||||||||||||||||||||||
Stock
issued for consulting services
|
60,000 | 60 | (60 | ) | - | |||||||||||||||||||||||||||||||
Stock
issued under employee equity incentive plan
|
8,050,000 | 8,050 | 5,198,950 | (5,207,000 | ) | - | ||||||||||||||||||||||||||||||
Reclassification
from unearned
stock-based
compensation
to
additional paid-in capital on
adoption of FAS
123R
|
(7,112,933 | ) | 7,112,933 | - | ||||||||||||||||||||||||||||||||
Comprehensive
income (loss)
|
||||||||||||||||||||||||||||||||||||
Net
income for the year
|
8,040,752 | 8,040,752 | 8,040,752 | |||||||||||||||||||||||||||||||||
Other
comprehensive income, net of tax
|
||||||||||||||||||||||||||||||||||||
Foreign
currency translation adjustments
|
844,251 | 844,251 | 844,251 | |||||||||||||||||||||||||||||||||
Comprehensive
income (loss)
|
8,885,003 | |||||||||||||||||||||||||||||||||||
Amortization
of prepaid consulting expenses
|
357,335 | 357,335 | ||||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||
Amortization
of stock-based compensation
|
424,942 | 424,942 | ||||||||||||||||||||||||||||||||||
Balance
December 31, 2006 (Restated)
|
49,627,710 | 49,628 | 17,090,614 | 974,584 | - | - | 5,091,524 | - | 23,206,350 | |||||||||||||||||||||||||||
Stock
issued under employee equity incentive plan
|
61,288 | 61 | 70,939 | (71,000 | ) | - | ||||||||||||||||||||||||||||||
Reclassification
from unearned
stock-based
compensation
to
additional paid-in capital on
adoption of FAS
123R
|
(71,000 | ) | 71,000 | - | ||||||||||||||||||||||||||||||||
Comprehensive
income (loss)
|
||||||||||||||||||||||||||||||||||||
Net
income for the year
|