UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2005
[ ] Transition Report pursuant to 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period to
Commission File No. 0-13337
ADVANCED BATTERY TECHNOLOGIES, INC.
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(Name of Small Business Issuer in Its Charter)
DELAWARE 22-2497491
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
136-14 Northern Blvd., Suite 8E, Flushing, NY 11354
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(Address of principal executive offices)
718-359-6866
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports); and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]
The number of shares outstanding of each of the issuer's class of
equity as of the latest practicable date is stated below:
Title of each class of Common Stock Outstanding as of November 14 , 2005
----------------------------------------------------------------------------
Common Stock, $0.001 par value 25,337,116
Transitional Small Business Disclosure Format(check one): Yes [ ] No [X]
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.................. 3
Item 2. Management's Discussion and Analysis or Plan of
Operation.......................................... 10
Item 3. Controls and Procedures............................ 11
PART II - OTHER INFORMATION..................................... 12
Item 1. Legal Proceedings.................................. 13
Item 2. Changes in Securities and Use of Proceeds.......... 13
Item 3. Defaults Upon Senior Securities.................... 13
Item 4. Submission of Matters To a Vote of Security
Holders........................................... 13
Item 5. Other Information.................................. 13
Item 6. Exhibits........................................... 13
PART I - FINANCIAL INFORMATION
ADVANCED BATTERY TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
September 30, 2005
(Unaudited)
USD
------------------
ASSETS
Current assets
Cash and cash equivalents 259,767
Accounts receivable 128,889
Inventories 282,227
Prepayments, deposits and other receivable 843,485
----------
Total current assets 1,514,368
Property, plant and equipment, net 11,230,342
Construction in process 795,143
Deposits for acquisition of property, plant and
equipment 20,001
Rights to use land and power, net 426,704
Patents, net 104,293
Prepaid expenses 2,756,528
----------
Total assets 16,847,379
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 384,620
Accrued expenses and other payables 527,004
Notes payable 370,737
Other loans payable 294,231
Current maturities of long-term debts 1,882,791
Customer deposits 328,505
Welfare payable 100,939
----------
Total current liabilities 3,888,827
Long-term debts, less current maturities 1,235,788
----------
Total liabilities 5,124,615
----------
Minority interests 1,691,779
----------
Stockholders' equity
Common stock (Note 3) 25,337
Additional paid-in capital 13,786,123
Accumulated deficit (3,892,085)
Accumulated other comprehensive income (Note 4) 111,610
----------
Total stockholders' equity 10,030,985
----------
Total liabilities and stockholders' equity 16,847,379
==========
See the accompanying notes to the unaudited consolidated financial
statements
-3-
ADVANCED BATTERY TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
---------------------- ---------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
USD USD USD USD
Revenue 1,337,027 116,383 1,604,795 1,085,058
Cost of sales (852,448) (87,815) (1,050,576) (697,933)
---------- ---------- ---------- ----------
Gross profit 484,579 28,568 554,219 387,125
Other income 29 428 1,408 533
Selling expenses (4,878) (11,453) (13,129) (25,195)
General and administrative
expenses (519,172) (273,023) (1,496,811) (621,142)
Research and development costs (19,108) (19,441) (44,622) (56,458)
Interest expense (4,196) (2,497) (114,411) (10,369)
---------- ---------- ---------- ----------
Loss before minority interests (62,746) (277,418) (1,113,346) (325,506)
Minority interests (95,251) 31,246 12,852 45,672
---------- ---------- ---------- ----------
Net loss (157,997) (246,172) (1,100,494) (279,834)
========== ========== ========== ==========
Net loss per share (Note 6) (0.01) (0.02) (0.05) (0.03)
========== ========== ========== ==========
See the accompanying notes to the unaudited consolidated financial
statements
-4-
ADVANCED BATTERY TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
September 30,
2005 2004
----------- -----------
(Unaudited) (Unaudited)
USD USD
Cash flows from operating activities:
Net loss (1,100,494) (279,834)
Adjustments to reconcile net loss to net
cash (used in)/provided by operating
activities:
Depreciation and amortization 285,252 110,135
Amortization of prepaid expenses 1,070,506 173,265
Minority interests (12,852) (45,672)
Changes in operating assets and liabilities:
Increase in accounts receivable (128,564) (30,478)
(Increase)/decrease in prepayments,
deposits and other receivable (531,665) 37,499
Increase in inventories (42,744) (144,553)
Increase in accounts payable and
accrued expenses 657,173 376,675
(Decrease)/increase in customer deposits (506,772) 672,920
Increase in welfare payable 41,585 27,498
--------- ---------
Net cash (used in)/provided by operating
activities (268,575) 897,455
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (3,556,117) (162,862)
Purchase of construction in process (636,949) (1,140,438)
Purchase of patents - (10,585)
--------- ---------
Net cash used in investing activities (4,193,066) (1,313,885)
--------- ---------
Cash flows from financing activities:
Net proceeds from long-term debt 602,492 26,646
(Decrease)/increase in other loans payable (42,871) 302,315
Repayment from officers - 141,343
Loans from three individuals 3,383,084 -
--------- ---------
Net cash provided by financing activities 3,942,705 470,304
--------- ---------
Net (decrease)/increase in cash and cash
equivalents (518,936) 53,874
Effect of foreign exchange rate changes 20,688 -
Cash and cash equivalents, beginning of period 758,015 8,063
--------- ---------
Cash and cash equivalents, end of period 259,767 61,937
========= =========
See the accompanying notes to the unaudited consolidated financial
statements
-5-
ADVANCED BATTERY TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
(i) The accompanying consolidated financial statements of
Advanced Battery Technologies, Inc. ("ABAT") and its
subsidiaries (the "Group") have been prepared in accordance
with generally accepted accounting principles in the United
States of America for interim consolidated financial
information. Accordingly, they do not include all the
information and notes necessary for comprehensive consolidated
financial statements.
In the opinion of the management of ABAT, all adjustments
necessary for a fair presentation of the financial position
and the results of operations and cash flows for the interim
periods have been included. Interim results are not necessarily
indicative of results for a full year.
(ii) The Company has two subsidiaries, Cashtech Investment
Limited ("Cashtech"), a British Virgin Island corporation,
and Heilongjiang ZhongQiang Power-Tech Co., Ltd. ("ZQ
Power-Tech"). ZQ Power-Tech is a limited liability company
established in the People's Republic of China (the "PRC")
in which Cashtech owns 70% interest as of September 30, 2005.
(iii) On March 1, 2004, the previous stockholders holding 70%
ownership of ZQ Power-Tech agreed to the transfer of their
shares to obtain 100% ownership in Cashtech. Cashtech is
the legal parent of ZQ Power-Tech since inception, with the
transaction being treated as a reverse merger and
recapitalization of ZQ Power-Tech, which is treated as the
accounting acquirer.
On May 6, 2004, ABAT completed a share exchange with the
stakeholders of Cashtech. This share exchange has been
treated as a reverse takeover with Cashtech taken as the
accounting acquirer and ABAT as the accounting acquiree.
The purchase method under reverse takeover accounting has
been applied for the above two share exchanges. These
consolidated financial statements issued under the name of
the legal parent, ABAT, are a continuation of the financial
statements of ZQ Power-Tech.
(iv) The Group has accumulated deficit as at September 30, 2005.
However, based on the substantial backlog of orders of
approximately $27 million that the Group has accumulated,
the management of the Group believes that these orders will
generate sufficient revenue and cash flows to enable the
Group to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company are set forth in
the section "Summary of significant accounting policies" of the
consolidated financial statements of the Company included in the
Company's Form 10-KSB submitted to the United States Securities
and Exchange Commission on March 31, 2005.
-6-
New accounting pronouncement
In May 2005, the Financial Accounting Standards Board ("FASB")
issued FASB Statement No. 154 "Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB
Statement No. 3". This statement replaces APB Opinion No. 20
"Accounting Changes" and FASB Statement No. 3 "Reporting
Accounting Changes in Interim Financial Statements", and changes
the requirements for the accounting for and reporting of a change
in accounting principle. It applies to all voluntary changes in
accounting principle and to changes required by an accounting
pronouncement which does not include specific transition
provisions. FASB No. 154 requires retrospective application to
prior periods' financial statements of changes in accounting
principle, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change.
When it is impracticable to determine the period-specific effects
of an accounting change on one or more individual prior periods
presented, this statement requires that the new accounting
principle be applied to the balances of assets and liabilities as
of the beginning of the earliest period for which retrospective
application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings for that period
rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a
change in accounting principle to all prior periods, this
statement requires that the new accounting principle be applied
as if it were adopted prospectively from the earliest date
applicable.
The adoption of the statement had no impact on the Company's
results of operation or financial position.
3. COMMON STOCK No. of shares Amount
USD
Authorized: -
Common stock at US$0.001 par value 60,000,000 60,000
========== =======
Issued and outstanding:
At January 1, 2005 12,940,169 12,940
Shares issued for settlement of loan
(Note 3(i)) 11,276,947 11,277
Shares issued to a consultant
(Note 3(ii)) 20,000 20
Shares issued to employees
(Note 3(iii)) 1,100,000 1,100
---------- -------
At September 30, 2005 25,337,116 25,337
========== =======
Notes:
(i) On January 20, 2005, the Company entered into a contract
with its chairman, Zhiguo Fu, as well as Zhijie Fu and
Wenhua Yang. The contract acknowledged that these three
individuals had provided $4,832,976 to fund the
construction of plant facilities owned by ZQ Power-Tech.
Since the Company has a 70% interest in ZQ Power-Tech, the
contract provided that the Company would issue a total of
11,276,947 shares of common stock to satisfy $3,383,084
(i.e. 70%) of the loan from the three individuals to ZQ
Power-Tech. The number of shares to be issued was based
upon US$0.30 per share, which represented the closing price
of the Company's common stock on the OTC Bulletin Board on
January 19, 2005.
-7-
Accordingly, the Company issued 11,276,947 shares of common
stock to the three individuals on January 20, 2005. The
excess of the loan amount over the par value of the stock
issued was included in additional paid-in capital.
(ii) The Company entered into an agreement with a consultant for
the provision of consultancy services in connection with
the operation of the businesses of the Company for a period
from January 24, 2005 to June 30, 2005. As full
compensation for the services to be rendered, the Company
issued to the consultant 20,000 shares of its common stock
on January 24, 2005. An amount of $10,380, which
represents the aggregate fair value of the shares in excess
of par value, was included in additional paid-in capital.
(iii) On June 1, 2005, 1,100,000 shares of common stock were
issued to 4 employees of the Company for the provision of
services for a term of five years commencing on the same
date. An amount of $2,022,900, which represents the
aggregate fair value of the shares in excess of par value,
was included in additional paid-in capital.
4. ACCUMULATED OTHER COMPREHENSIVE INCOME
The comprehensive income for the nine months ended September 30,
2005 of US$99,207 represents gain on foreign currency translation.
5. PATENTS
On May 31, 2005, ZQ Power-Tech issued 18,350,000 shares of stock
with par value of RMB1 each to Mr. Fu Zhiguo in return for a
patent transferred by Mr. Fu. The patent was appraised by a PRC
appraiser to have a value of $2,216,987 (equivalent to
RMB18,350,000) on May 25, 2005. As a result, the Company's
interest in ZQ Power-Tech was diluted from 70% to 51.2% at the
same date.
On September 11, 2005, ZQ Power-Tech agreed with Mr. Fu to
rescind the aforementioned transaction. Mr. Fu is returning the
shares to ZQ Power-Tech. As a result, the Company now owns 70%
of the capital stock of ZQ Power-Tech, as it did before the May
31 transaction.
Mr. Fu has also agreed to contribute the patent to the capital of
ZQ Power-Tech without compensation.
6. NET LOSS PER SHARE
(i) The basic net loss per share is calculated using the net
loss and the weighted average number of common shares
outstanding during the interim periods.
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
------------------------- --------------------------
Net loss USD(157,997) USD(246,172) USD(1,100,494) USD(279,834)
=========== =========== ============= ===========
Weighted average
number of shares
outstanding 25,337,116 10,328,321 23,450,589 9,707,902
=========== =========== ============= ===========
Basic net loss per
share USD(0.01) USD(0.02) USD(0.05) USD(0.03)
=========== =========== ============= ===========
(ii) The diluted net loss per share is not presented as there
was no dilutive effect for either interim period.
-8-
7. SUPPLEMENTAL CASH FLOW INFORMATION
Nine months ended
September 30,
2005 2004
USD USD
--------- ---------
Interest paid 114,411 10,369
Income taxes - -
Other than the above-mentioned information, during the nine
months ended September 30, 2005, the Group had the following non-
cash transactions:
(i) The Company issued 20,000 of its common stock to a
consultant for the provision of consultancy work, the
details of which are set out in note 3(ii).
(ii) The Company issued a total of 1,100,000 of its common stock
to 4 employees for the provision of services, the details
of which are set out in note 3(iii).
(iii) The Company's chairman Mr. Zhiguo Fu contributed a patent
to the capital of ZQ Power-Tech without compensation, the
details of which are set out in note 5.
8. COMMITMENTS
(i) At September 30, 2005, the Group had capital commitments
amounting to $6,537 in respect of acquisition of property,
plant and equipment which are contracted for but not
provided in the financial statements.
(ii) At September 30, 2005, the Group had agreed to pay $135,937
to Harbin Institute of Technology for the research and
development of polymer lithium-ion batteries for motor
vehicles.
9. WARRANTIES
The Group warrants that all batteries manufactured by it will be
free from defects in material and workmanship under normal use
for a period of one year from the date of shipment. The Group's
experience for costs and expenses in connection with such
warranties has been minimal and during the nine months ended
September 30, 2005, no amounts have been considered necessary to
reserve for warranty costs.
10. RELATED PARTY TRANSACTIONS
During the period ended September 30, 2005, the Group sold goods
amounting to $618,744 to a related company in which a director of
the Company has a controlling interest. The transaction was
entered into in the normal course of business and on normal
commercial terms.
-9-
Item 1. Management's Discussion and Analysis or Plan of Operation
Forward Looking Statements
The information in this discussion contains forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements include statements
regarding our capital needs, business strategy and expectations. Any
statements contained herein that are not statements of historical facts
may be deemed to be forward-looking statements. Readers are cautioned
that there are risks and uncertainties which may cause actual future
results to differ from the results anticipated in these forward-looking
statements. A detailed discussion of some of the risks that may cause
such a difference has been set forth in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2004 in the section
numbered "Item 6" under the heading "Risk Factors That May Affect
Future Results." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's opinions
only as of the date hereof. We disclaim any obligation to publicly
update these statements, or disclose any difference between its actual
results and those reflected in these statements.
RECENT BUSINESS EVENTS
Business Overview
Advanced Battery Technologies, Inc. is a holding company with one
subsidiary: Cashtech Investment Limited, a British Virgin Islands
corporation. Cashtech Investment Limited has only one asset, which is
70% of the capital stock of Heilongjiang ZhongQiang Power-Tech Co.,
Ltd., a China limited liability company ("ZQ Power-Tech").
ZQ Power-Tech designs, manufactures and markets rechargeable
polymer lithium-ion ("PLI") batteries. PLI batteries produce a
relatively high average of 3.8 volts per cell, which makes them
attractive in terms of both weight and volume. Additionally, they can
be manufactured in very thin configurations and with large footprints.
PLI cells can be configured in almost any prismatic shape, and can be
made thinner than 0.0195 inches (0.5 mm) to fill virtually any shape
efficiently. The Company's products include rechargeable PLI batteries
for electric automobiles, motorcycles, mine-use lamps, notebook
computers, walkie- talkies and other personal electronic devices.
ZQ Power-Tech focused its initial marketing activities in
Southeast Asia, primarily China, Taiwan and Japan in 2004. After we
expanded our manufacturing capacity in April 2005, ZQ Power-Tech
started to expand its marketing efforts in North America and worldwide.
In June 2005, ZQ Power Tech. started to establish a network of sales
offices in the Middle East and Africa by an agreement with IGT, Inc. of
Dubai, U.A.E.
Polymer Lithium Ion Battery Development Program
On November 10, 2005, the Company announced that the
manufacturing and product tests using Altair Nanotechnologies Inc.'s
nano-structured lithium titanate spinel electrode materials have been
successful. The company announced further progress in its Polymer
Lithium Ion Battery Development Program:
1. Advanced Battery Technologies has contracted with Harbin
University of Science and Technology to design the electrical
controls and management system for a sedan conversion using Altair's
advanced nanotechnology electrode materials in its lithium polymer
batteries.
2. Advanced Battery Technologies also has entered into a cooperative
agreement with the Beijing Institute of Technology for the
development and testing of four electric buses to be built by
Advanced Battery as prototypes for the 2008 Olympic Electric Bus
Program.
-10-
Cooperation with BIT to Develop All-electric Buses
On September 7, 2005, ZQ Power-Tech signed a cooperation contract
with the Beijing Institute of Technology ("BIT") to develop all-
electric buses with enhanced power systems and design, including the
building of low and super-low floors to facilitate and expedite
customer use. The buses are being designed to operate in large and
mid-sized cities, both in China and abroad.
The cooperation agreement provides that BIT will provide the
technology and ABAT will build the prototypes. The buses will use
ABAT's advanced rechargeable PLI batteries. BIT will design the
materials and develop the manufacturing procedures. The agreement also
envisions the development of buses for long distance travel, with
enhanced design and comfort.
The timelines require the completion of the low floor and super-
low floor prototypes in the first half of 2006, with testing to be
completed in August 2006. Once testing is complete, ABAT will both
supply the batteries and manufacture the buses. The parties expect to
showcase their all-electric bus at the 2008 Olympics.
ABAT's Holding Percentage Changed
On May 31, 2005, ZQ Power-Tech issued 18,350,000 shares of stock
with par value of RMB1 each to Mr. Fu Zhiguo in return for a patent
transferred by Mr. Fu. The patent was appraised by a PRC appraiser to
have a value of $2,216,987 (equivalent to RMB18,350,000) on May 25,
2005. The patent provides ZQ Power-Tech with the core technology that
distinguishes its batteries from those of competitors. As a result of
the transaction, the Company's interest in ZQ Power-Tech was diluted
from 70% to 51.2% at the same date, which constituted a deemed disposal
by the Company of its partial interest in ZQ Power-Tech.
On September 11, 2005, ZQ Power-Tech agreed with Mr. Fu to rescind
the aforementioned transaction. Mr. Fu is returning the shares to ZQ
Power-Tech. As a result, the Company now owns 70% of the capital stock
of ZQ Power-Tech, as it did before the May 31 transaction.
Mr. Fu has also agreed to contribute the patent to the capital
of ZQ Power-Tech without compensation.
New Employees Training
The Company finished the training of the newly hired 900 employees,
which started in the second quarter. As a result, the new production
lines can now reach their anticipated manufacturing capacity, and the
Company can now manufacture enough products to begin to satisfy its
backlog of orders.
RESULTS OF OPERATIONS
Revenues
During the first quarter of this year, the Company closed its old
production lines to focus on completion of a new production facility.
The Company completed its new production facility in the second quarter,
then focused on the fine tuning of the new production lines and the
training of newly hired employees. As a result, revenues during the
first and second quarters of 2005 were minimal. Most revenues for the
nine months ended September 30, 2005 were generated in the third
quarter, especially in September 2005.
Revenues for the three months ended September 30, 2005 were
$1,337,027, as contrasted with revenue of $116,383 for the three months
ended September 30, 2004. Revenues for the nine months ended September
30, 2005 were $1,604,795, compared to revenues of $1,085,058 during the
first nine months of 2004. The increases were due to the completion in
August 2005 of the process of training new employees to man the
production lines installed in the Spring of 2005. With the new staff
of trained employees, our production lines are now reaching their
anticipated manufacturing capacity. In September 2005, therefore, the
Company made bulk shipments of products that represented 75% of the
Company's revenue for the first nine months of 2005. We expect revenue
to continue to grow, as we begin to satisfy our backlog of orders.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months
ended September 30, 2005 were $524,050 and for the three months ended
September 30, 2004 were $284,476. Likewise, the Company incurred
selling, general and administrative expenses of $1,509,940 in the nine
months ended September 30, 2005, compared to selling, general and
administrative expenses of $646,337 in the first nine months of 2004.
The increase during 2005 was due to the expansion of facilities and the
increase in the number of employees. In addition, during 2005 we
amortized $1,070,506 of prepaid expenses attributable to stock that we
issued in 2004 and 2005 to certain consultants and employees.
Net Loss
Net loss for the three months ended September 30, 2005 was
$157,997, compared to net loss of $246,172 realized in the three months
ended September 30, 2004. Net loss for the nine months ended September
30, 2005 was $1,100,494, compared to a net loss of $279,834 in the nine
months ended September 30, 2004.The increase of net loss was due to the
increase in expenses related to capacity expansion and the amortization
of prepaid expenses.
-11-
LIQUIDITY AND CAPITAL RESOURCES
Until December 2004, the development and initial operations of ZQ
Power-Tech were financed primarily by contributions to capital made by
Zhiguo Fu, the Company's Chairman. On December 1, 2004, ZQ Power-Tech
entered into a Loan Agreement with Harbin Commercial Bank, and received
a loan of RMB20 million (approximately $2.4 million). The Loan
Agreement requires that half of the principal be paid in a balloon in
November 2005 and half in November 2006. Interest at 8.064% per annum
is payable monthly. $1.9 million of the obligation is secured by a
pledge of ZQ Power-Tech's manufacturing facilities; the remainder of
the debt is secured by a pledge of our realty assets.
The arrangement with Harbin Commercial Bank provided ZQ Power-Tech
with working capital. Nevertheless, the expansion of its manufacturing
facilities that has been ongoing since early 2004 required that Mr. Fu
and two business associates contribute $4,832,976 to fund construction.
In January 2005 Advanced Battery compensated Mr. Fu and his associates for
70% of that contribution by issuing them a total of 11,276,947 common
shares.
Despite its negative working capital, the Company believes that it
has sufficient liquidity to fund its near-term operations. The
principal capital resource available is $12,472,190 in property, plant
and equipment, construction in process, related deposits and real
property rights, which ZQ Power-Tech owns subject only to the Harbin
Commercial Bank lien for $2.4 million. Based on the substantial
backlog of orders that ZQ Power-Tech has accumulated, it believes that
additional secured financing will be available to it on favorable terms
when needed. Until then, if short-term cash shortages occur, Mr. Fu has
committed to provide financing as needed.
Based upon the financial resources available to ZQ Power-Tech,
management believes that it has sufficient capital and liquidity to
sustain operations for the foreseeable future.
Item 3. Controls and Procedures
We carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of
the period covered by this report. The evaluation was undertaken in
consultation with our accounting personnel. Based on that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures are currently effective to
ensure that information required to be disclosed by us in the reports
that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
As we develop new business or if we engage in an extraordinary
transaction, we will review our disclosure controls and procedures and
make sure that they remain adequate.
There were no changes in the internal controls over our financial
reporting that occurred during the period covered by this report that
have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
-12-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
Exhibits
31.1 Certification of the Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of the Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of the Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
-13-
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ADVANCED BATTERY TECHNOLOGIES, INC.
(Registrant)
Date: November 14, 2005 By: /s/ Zhiguo Fu
------------------------------------
Name: Zhiguo Fu
Title: Chief Executive Officer and
Chairman of the Board
Date: November 14, 2005 By: /s/ Guohua Wan
-------------------------------------
Name: Guohua Wan
Title: Chief Financial Officer