SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
(Amendment
No. 1)
(Mark
One)
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x
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Annual Report Pursuant To
Section 13 or 15(d) of the Securities Exchange Act of
1934
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For the
fiscal year ended: September 30, 2008
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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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For the
transition period from ____________ to _____________
Commission
File No. 001-32898
China
BAK Battery, Inc.
(Name
of registrant as specified in its charter)
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Nevada
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88-0442833
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
No.)
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BAK
Industrial Park
No.
1 BAK Street
Kuichong
Town, Longgang District
Shenzhen
518119
People’s
Republic of China
(86-755)
8977-0093
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Securities
registered pursuant to Section 12(b) of the Exchange Act:
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Title of each class
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Name of each exchange on which
registered
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Common
stock, par value $0.001 per share
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The
NASDAQ Global Market
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Securities
registered pursuant to Section 12(g) of the Exchange Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes
¨
No
x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes
¨
No
x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
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Large
accelerated filer
o
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Accelerated
filer
x
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Non-accelerated
filer
o
(Do not check if
a smaller reporting company)
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Smaller reporting
company
o
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
Yes
¨
No
x
The
aggregate market value of the 32,701,783 shares of voting and non-voting common
equity stock held by non-affiliates of the registrant was $123.3 million as of
March 31, 2008, the last business day of the registrant’s most recently
completed second fiscal quarter, based on the last sale price of the
registrant’s common stock on such date of $3.77 per share, as reported by The
NASDAQ Stock Market, Inc.
There
were a total of 57,680,231 shares of the registrant’s common stock outstanding
as of December 11, 2008.
Documents
Incorporated by Reference:
None
EXPLANATORY
NOTE:
This
Amendment No. 1 (the “Amended Filing”) to the Annual Report on Form 10-K for the
year ended September 30, 2008 (the “Original Filing”) of China BAK
Battery, Inc. (the “Company”) is filed to correct inadvertent
omissions in the Original Filing. Specifically, this Amended Filing
amends Item 10, “Directors, Executive Officers and Corporate Governance,” to
include the required disclosure of a report not timely filed pursuant to Section
16(a) of the Exchange Act, which was inadvertently omitted from the Original
Filing. Item 10 is also amended to omit disclosure of reports not
timely filed pursuant to Section 16(a) of the Exchange Act, which disclosure was
made in any Annual Report on Form 10-K filed by the Company with the SEC prior
to the filing of the Original Filing, pursuant to Item 405 of Regulation S-K as
promulgated under the Exchange Act. This Amended Filing also
includes required certifications relating to the internal control
over financial reporting of the Company that were inadvertently omitted from
paragraph 4 of Exhibits
31.1
and
31.2
of the Original Filing. For purposes of clarity, the
“Introductory Comment—Terminology” and “Introductory Comment—Forward-Looking
Statements” sections of the Original Filing are repeated in their entirety in
this Amended Filing.
In
accordance with Rule 12b-15 under the Exchange Act, each Item of the Original
Filing that is amended by this Amended Filing is also restated in its entirety,
and this Amended Filing is accompanied by currently dated certifications on
Exhibits
31.1
,
31.2
,
32.1
, and
32.2
by the Company’s
President and Chief Executive Officer and Chief Financial Officer. Except as
described above, this Amended Filing does not amend, update, or change any
Items, financial statements, or other disclosures in the Original Filing, and
does not reflect events occurring after the filing of the Original Filing,
including as to any exhibits to the Original Filing affected by subsequent
events. Information not affected by the changes described above is unchanged and
reflects the disclosures made at the time of the Original Filing.
Accordingly, this Amended
Filing should be read in conjunction with the Original Filing and our other SEC
filings subsequent to the filing of the Original Filing, including any
amendments to those filings. Capitalized terms not defined in the
Amended Filing are as defined by the Original Filing.
Introductory
Comment—Terminology
Throughout
this Annual Report on Form 10-K, or this Report, the terms “we,” “us” or “our”
refers to China BAK Battery, Inc. and its subsidiaries on a consolidated basis;
“BAK International” refers to our Hong Kong subsidiary, BAK International
Limited; “BAK Tianjin” refers to our PRC subsidiary, BAK International (Tianjin)
Ltd.; “Shenzhen BAK” refers to our PRC subsidiary, Shenzhen BAK Battery Co.,
Ltd.; “BAK Electronics” refers to our PRC subsidiary, BAK Electronics (Shenzhen)
Co., Ltd.; “BAK Canada” refers to our Canadian subsidiary, BAK Battery Canada
Ltd.; “BAK Europe” refers to our German subsidiary, BAK Europe GmbH; “BAK India”
refers to our Indian subsidiary, BAK Telecom India Private Limited; “China” or
“PRC” refers to the People’s Republic of China, excluding for the purposes of
this Report only, Taiwan, Hong Kong and Macau; “RMB” or “Renminbi” refers to the
legal currency of China; and “$” or “U.S. dollars” refers to the legal currency
of the United States of America.
Introductory
Comment—Forward-Looking Statements
Statements
contained in this Report include “forward-looking statements” within the meaning
of such term in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which could cause actual
financial or operating results, performances or achievements expressed or
implied by such forward-looking statements not to occur or be realized.
Forward-looking statements made in this Report generally are based on our best
estimates of future results, performances or achievements, predicated upon
current conditions and the most recent results of the companies involved and
their respective industries. Forward-looking statements may be identified by the
use of forward-looking terminology such as “may,” “will,” “could,” “should,”
“project,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,”
“potential,” “opportunity” or similar terms, variations of those terms or the
negative of those terms or other variations of those terms or comparable words
or expressions. Potential risks and uncertainties include, among other things,
such factors as:
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·
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our
anticipated growth strategies and our ability to manage the expansion of
our business operations
effectively;
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·
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our
future business development, results of operations and financial
condition;
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·
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our
ability to fund our operations and manage our substantial short-term
indebtedness;
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our
ability to maintain or increase our market share in the competitive
markets in which we do business;
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·
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our
limited operating history in developing, manufacturing and selling of
lithium-based rechargeable battery
cells;
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·
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our
ability to keep up with rapidly changing technologies and evolving
industry standards, including our ability to achieve technological
advances;
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·
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our
dependence on the growth in demand for the portable electronic devices
that are powered by our products;
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·
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our
ability to diversify our product offering and capture new market
opportunities;
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·
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our
ability to obtain original equipment manufacturer (“OEM”) qualifications
from brand names;
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our
ability to source our needs for skilled labor, machinery and raw materials
economically;
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·
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our
ability to secure raw materials in the future and to manage the costs of
raw materials or to secure alternative or substitute raw
materials;
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·
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uncertainties
with respect to the PRC legal and regulatory
environment;
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·
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our
ability to remediate any material weaknesses in our internal control over
financial reporting;
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our
ability to maintain cost
leadership;
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our
ability to obtain property ownership rights to our
facilities;
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·
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other
risks identified in this Report and in our other reports filed with the
U.S. Securities and Exchange Commission (the
“SEC”).
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Additional
disclosures regarding factors that could cause our results and performance to
differ from results or performance anticipated by this Report are discussed in
Item 1A. “Risk Factors.” Readers are urged to carefully review and consider the
various disclosures made by us in this Report and our other filings with the
SEC. These reports attempt to advise interested parties of the risks and factors
that may affect our business, financial condition and results of operations and
prospects. The forward-looking statements made in this Report speak only as of
the date hereof and we disclaim any obligation to provide updates, revisions or
amendments to any forward-looking statements to reflect changes in our
expectations or future events.
We file
annual, quarterly and other reports, proxy statements and other information with
the SEC. You may obtain and copy any document we file with the SEC at the SEC’s
public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549.
You may obtain information on the operation of the SEC’s public reference
facilities by calling the SEC at 1-800-SEC-0330. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC at its
principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549-1004.
The SEC maintains an Internet website at http://www.sec.gov that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. Our SEC filings, including
exhibits filed therewith, are accessible through the Internet at that
website.
You may
also request a copy of our SEC filings, at no cost to you, by writing or
telephoning us at: BAK Industrial Park, No. 1 BAK Street, Kuichong Town,
Longgang District, Shenzhen, People’s Republic of China, attention Corporate
Secretary, telephone 011 (86-755) 8977-0093. We will not send exhibits to the
documents, unless the exhibits are specifically requested and you pay our fee
for duplication and delivery.
PART
III
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ITEM
10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
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Directors
and Executive Officers
The
following table provides information about our executive officers and directors
and their respective ages and positions as of September 30, 2008. The
directors listed below will serve until our next annual or special meeting of
stockholders at which directors are elected.
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Name
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Age
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Position
Held
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Xiangqian
Li
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40
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Chairman,
President and Chief Executive Officer
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Tony
Shen
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41
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Chief
Financial Officer, Secretary and Treasurer
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Huanyu
Mao
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56
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Director,
Chief Operating Officer and Chief Technical Officer
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Richard
B. Goodner
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62
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Director
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Charlene
Spoede Budd
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69
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Director
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Chunzhi
Zhang
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46
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Director
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Xinggang
Cao
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34
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Vice
President
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Kenneth
G. Broom
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53
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Vice
President
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Xiangqian Li
has served as
the chairman of our board, our president and chief executive officer since
January 20, 2005. He has been a director of BAK International Limited, our Hong
Kong incorporated subsidiary, since November 2004. Mr. Li is the founder and has
served as the chairman of the board of Shenzhen BAK, our wholly owned
subsidiary, since its inception in August 2001, and served as Shenzhen BAK’s
general manager since December 2003. From June 2001 to June 2003, Mr. Li was the
chairman of Huaran Technology Co., Ltd., a PRC-incorporated company engaged in
the car audio business. Mr. Li received a bachelor’s degree in thermal energy
and power engineering from the Lanzhou Railway Institute, China and a doctorate
degree in quantitative economics from Jilin University in China.
Tony Shen
has served as our
chief financial officer, company secretary and treasurer since August 3, 2007.
Mr. Shen joined the Company as Vice President of Strategic Development in May
2007. Prior to joining us, Mr. Shen was Acting CFO at eLong Inc. (NASDAQ: LONG)
from 2006 to 2007. Prior to eLong, Mr. Shen was at China Netcom and its
affiliated companies from 2003 to 2005, where he served as CFO and Vice
President of Finance for Joyzone Networks, an affiliate of China Netcom, and as
General Manager of Overseas Investment Management, China Netcom International.
Prior to joining China Netcom, Mr. Shen served in several senior finance roles
at Solectron Corporation in the United States from 1999 to 2003. Mr. Shen
received a BE in Electrical Engineering from Tsinghua University and an MBA from
Columbia Business School.
Huanyu Mao
has served as a
director of our company since May 12, 2006. He has also served as our chief
technology officer since January 20, 2005 and as our chief operating officer
since June 30, 2005. Dr. Mao has been the chief scientist of Shenzhen BAK since
September 2004. Prior to joining us, between 1997 and September 2004, Dr. Mao
was the chief technology officer of Tianjin Lishen, a leading battery
manufacturer in China. Dr. Mao pioneered core technologies on lithium-ion
battery before its commercialization in 1992 and was the inventor under seven
U.S. patents relating to lithium-ion technology. Dr. Mao received a doctorate
degree in electrochemistry from Memorial University of Newfoundland, Canada
where he focused on conductive polymers.
Richard B. Goodner
has served
as our director since May 12, 2006. Since June 2003, Mr. Goodner has served as
the vice president for legal affairs and general counsel for U.S. Home Systems,
Inc., a public company listed on the Nasdaq Global Market. Since May 2006, Mr.
Goodner also has been a director of Winner Medical Group Inc., a manufacturer of
medical and hygiene disposal products, which shares are traded on the
Over-the-Counter Bulletin Board in the United States. From 1997 to 2003, Mr.
Goodner was a partner in the law firm of Jackson Walker L.L.P. Mr. Goodner holds
a bachelor of arts degree in economics from Eastern New Mexico University and a
law degree from Southern Methodist University.
Charlene Spoede Budd, PhD, CPA, CMA,
CFM, PMP
, has served as our director since June 25, 2007. Dr. Budd is
Professor Emeritus of Accounting at Baylor University, where she was a professor
and Emerson O. Henke Chair of Accounting from 1993 through 2005, and where she
has taught business classes since 1973. She received her PhD in business
administration from The University of Texas-Austin (1982) and her MBA and
undergraduate degrees from Baylor University (1973 and 1972, respectively). She
holds current certifications as a CPA, CMA, CFM, PMP, and in all six
professional categories of the theory of constraints. Dr. Budd has served as a
member or Chair of the Business Environment & Content Subcommittee of the
American Institute of Certified Public Accountants (AICPA) from 2002 to 2008 and
has been the Chair, Finance & Metrics (F&M) Committee of the Theory of
Constraints International Certification Organization (TOC-ICO) from 2005 to the
present. Her latest portfolio/book is
Internal Reporting and Improvement
Initiatives
, Bureau of National Affairs (BNA), Washington, D.C.,
2007.
Chunzhi Zhang
has served as
our director since June 25, 2007. Since mid-2005, Mr. Zhang has served as
General Manager of AASTOCKS.com, Ltd., Shenzhen Branch, an online stock
investment service operating in China. From 2003 through mid-2005, Mr. Zhang
served as General Manager of Shenzhen Sharemax Management Co., Ltd, where he was
involved in brokerage of Hong Kong-listed stocks, asset management and managing
venture capital projects. From 1998 through 2003, Mr. Zhang served as General
Manager of Haixing Security Brokage Co., Ltd, Shenzhen Branch, involved in
securities trading and asset management. Prior to joining Haixing Security
Brokerage, from 1985 through 1996, Mr. Zhang served as Manager in Hong Kong for
China Resources Holding Co., Ltd., an import/export company. Mr. Zhang received
his bachelor degree in Economy from Jilin University in 1985.
Kenneth G. Broom
has served
as our vice president of international OEM Business since October 1, 2007. From
January 2007 to September 2007, he worked as Executive Vice President for BAK
Canada. Prior to joining us, Mr. Broom served as executive vice president of
E-One Moli Energy (Canada) Limited (“E-One”), the only high volume manufacturer
of cylindrical lithium-ion rechargeable cells in North America, from 2003 to
2007. He was also General Manager of Operations of E-One from 1992 to 2003;
while in this role, he managed equipment and product design. He is a member of
the Association of Professional Engineers and Geoscientists of B.C. Mr. Broom
received a bachelor’s degree in chemical engineering from the University of
Waterloo.
Xinggang Cao
has served as
our vice president of China Business since October 1, 2007. Mr. Cao served as
the deputy general manager of our prismatic cells unit from March to September
2007, and as the director of our sales department from September 2006 to March
2007. From May 2003 to September 2006, he served as the manager of our domestic
sales department. Mr. Cao received a master’s degree in business administration
from Jilin University.
Family
Relationships
There are
no family relationships among our directors or officers.
Involvement
in Certain Legal Proceedings
None of
our directors has been subject to any legal proceedings in the past five years
and that may adversely affect his or her ability and/or integrity to serve as
our director.
Promoters
and Certain Control Persons
We did
not have any promoters at any time during the past five fiscal
years.
Section
16(A) Beneficial Ownership Reporting Compliance
Under
U.S. securities laws, directors, certain executive officers and persons holding
more than 10% of our common stock must report their initial ownership of the
common stock, and any changes in that ownership, to the SEC. The SEC
has designated specific due dates for these reports. Based solely on our review
of copies of such reports filed with the SEC and written representations of our
directors and executive offers, we believe that all persons subject to reporting
filed the required reports on time in fiscal years 2007 and 2008, except as
follows: (i) a late Form 4 report filed by Huanyu Mao on January 31, 2008 to
report the grant of an option to purchase 200,000 shares of common stock
pursuant to the Stock Option Plan; (ii) a late Form 4 report filed by Xiangqian
Li on June 5, 2008 to report the grant of an option to purchase 1,080,000 shares
of common stock pursuant to the Stock Option Plan, subject to shareholder
approval of an amendment of the Stock Option Plan to increase the number of
shares available for issuance thereunder; and (iii) a late Form 4 report filed
by Xiangqian Li on December 8, 2008 to report his disposition of beneficial
ownership of 1,089,775 shares of common stock pursuant to the Li Settlement
Agreement.
Code
of Business Conduct and Ethics
We have
adopted a code of business conduct and ethics relating to the conduct of our
business by our employees, officers and directors. We intend to maintain the
highest standards of ethical business practices and compliance with all laws and
regulations applicable to our business, including those relating to doing
business outside the United States.
Material
Changes to Director Nomination Procedures
There
have been no material changes to the procedures by which shareholders may
recommend nominees to our board of directors since such procedures were last
disclosed.
Audit
Committee
We have a
separately-designated standing audit committee established in accordance with
section 3(a)(58)(A) of the Exchange Act. The committee members are Richard B.
Goodner, Charlene Spoede Budd and Chunzhi Zhang.
Audit
Committee Financial Expert
The Board
of Directors has determined that we have an audit committee financial expert
serving on our audit committee. Our audit committee financial expert is Charlene
Spoede Budd. Dr. Budd has been “independent” as that term is defined under the
Nasdaq listing standards at all times during her service on our audit
committee.
SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, in Shenzhen, People’s Republic of China, on January 5,
2009.
CHINA
BAK BATTERY, INC.
Xiangqian
Li
Director,
Chairman of the Board,
President
and Chief Executive Officer
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on
January 5, 2009.
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Signature
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Title
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/s/
Xiangqian Li
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Name:
Xiangqian Li
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Director,
Chairman of the Board, President and Chief Executive Officer (Principal
Executive Officer)
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/s/
Tony Shen
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Name:
Tony Shen
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Chief
Financial Officer, Secretary and Treasurer (Principal Financial Officer
and Principal Accounting Officer)
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/s/
Huanyu Mao
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Name:
Huanyu Mao
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Director,
Chief Operating Officer and Chief Technical Officer
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/s/
Charlene Spoede Budd
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Name:
Charlene Spoede Budd
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Director
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/s/
Chunzhi Zhang
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Name:
Chunzhi Zhang
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Director
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/s/
Richard B. Goodner
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Name:
Richard B. Goodner
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Director
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