Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of Earliest event Reported): November 6, 2007 (November 5, 2007)
CHINA
BAK BATTERY, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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000-49712
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86-0442833
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(IRS
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
(Address
of principal executive offices)
(86-755)
8977-0093
(Registrant's
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry
Into A Material Definitive Agreement.
Private
Placement
On
November 5, 2007, China BAK Battery, Inc. (the “Company”) entered into a
securities purchase agreement (the “Securities Purchase Agreement”) with certain
accredited investors (collectively, the “Investors”). Under the Securities
Purchase Agreement, the Company agreed to issue and sell to the Investors
3,500,000 shares of the Company’s common stock (the “Shares”) at a price per
share of $3.90, which represents approximately 7.1% of the issued and
outstanding capital stock of the Company as of and immediately after
consummation of the transactions contemplated by the Securities Purchase
Agreement, for an aggregate purchase price of $13.7 million. The parties will
consummate the transactions contemplated by the Securities Purchase Agreement
as
soon as possible.
Pursuant
to the Securities Purchase Agreement, the Company also entered into a
registration rights agreement (the “Registration Rights Agreement”) with the
Investors, pursuant to which, among other things, the Company agreed to register
the Shares within a pre-defined period. Under
the
terms of the Registration Rights Agreement, the Company is obligated to file
a
registration statement (the “Registration Statement”) under the Securities Act
of 1933 on Form S-3 covering the resale of the Shares issued to the Investors
under the Securities Purchase Agreement. The Company is subject to registration
delay payments in the amounts prescribed by the Registration Rights Agreement
if
it is unable to file the Registration Statement, cause it to become effective
or
maintain its effectiveness as required by the Registration Rights
Agreement.
Other
than with respect to this transaction, none of the Investors have had a material
relationship with the Company or any of the Company’s officers, directors or
affiliates or any associate of any such officer or director.
This
brief description of the terms of the Securities Purchase Agreement and the
Registration Rights Agreement is qualified by reference to the provisions of
such agreements attached to this report as Exhibits 4.1 and 10.1, respectively.
Delivery
of Make Good Shares, Settlement and Release Agreement
On
October 22, 2007, the Company entered into a Delivery of Make Good Shares,
Settlement and Release Agreement (the “Settlement Agreement”) with Mr. Xiangqian
Li, the Company’s Chief Executive Officer, and BAK International, Ltd. (“BAK
International”), a wholly-owned subsidiary of the Company. As previously
disclosed, Mr. Li was a party to a certain Escrow Agreement (the “Escrow
Agreement”), dated January 20, 2005. Pursuant to the Escrow Agreement, Mr. Li
placed 2,179,550 shares of common stock of the Company that he owned at such
date into escrow for the benefit of certain investors who purchased shares
of
common stock of the Company in a private placement in January 2005 in the event
that the Company failed to satisfy certain “performance thresholds,” as defined
in the Escrow Agreement. The Company’s originally reported net income for the
fiscal year ended September 30, 2005 exceeded the performance
threshold
established for such period; accordingly, 50% of the shares placed in escrow
by
Mr. Li, or 1,089,775 shares, were released to Mr. Li pursuant to the Escrow
Agreement’s terms.
A
subsequent change in the Company’s auditor’s policy required recognition by the
Company of a compensation charge in connection with the release of the escrowed
shares back to Mr. Li, which caused the Company’s net income for fiscal year
2005 to fall below the performance threshold. As a result, based on his
understanding that the investors in the January 2005 share issuance would
therefore become entitled to the 1,089,775 shares released to him, Mr. Li
undertook on August 21, 2006 to transfer those shares to such investors on
a pro
rata basis. Notwithstanding this undertaking, however, the 1,089,775 shares
were
not delivered to such investors.
Pursuant
to the Settlement Agreement, Mr. Li agreed to deliver the 1,089,775 shares
to
BAK International; BAK International in turn agreed to deliver the shares to
the
Company. Upon receipt of these shares, the Company agreed to release all claims
and causes of action against Mr. Li and certain other persons regarding the
shares. On October 25, 2007, the 1,089,775 shares were delivered to the Company,
and such shares are now held as treasury shares. Under the terms of the
Settlement Agreement, the Company is obligated to commence negotiations with
the
investors who participated in the Company’s January 2005 private placement in
order to achieve a complete settlement of BAK International’s obligations (and
the Company’s obligations to the extent it has any) under the applicable
agreements with such investors.
This
description of the terms of the Settlement Agreement and the Escrow Agreement
is
qualified by reference to the provisions of these agreements. The Settlement
Agreement is filed herewith as Exhibit 10.2. The Escrow Agreement is
incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K filed January 21, 2005.
Item
3.02 Unregistered
Sales Of Equity Securities.
On
November 6, 2007, the Company entered into the Securities Purchase Agreement
pursuant to which the Company will sell to certain accredited investors
3,500,000 shares of the Company’s common stock at $3.90 per share, which
collectively represent approximately 7.1% of the issued and outstanding capital
stock of the Company as of and immediately after consummation of the
transactions contemplated by the Securities Purchase Agreement, for an aggregate
purchase price of $13.7 million.
The
foregoing securities were issued pursuant to the exemption from registration
provided by Section 4(2) of the Securities Act of 1933 (the “Securities
Act”) for the offer and sale of securities not involving a public offering
and Rule 506 of Regulation D promulgated thereunder. The Investors who
received the securities agreed that (a) they had access to all of the Company’s
information pertaining to the investment and were provided with the opportunity
to ask questions and receive answers regarding the offering, (b) they were
acquiring the securities for their own account for investment and not for the
account of any other person and not with a view to or for any distribution
within the meaning of the Securities Act and (c) they would not sell or
otherwise transfer the purchased securities unless in compliance with state
and
federal securities laws. Each of the Investors represented that they are
accredited investors as defined in Rule 501(a) under the Securities Act and
that
there was no general solicitation or advertising in connection with the offer
and sale of the securities.
Item
7.01 Regulation
FD Disclosure.
Shenzhen
BAK Battery Co., Ltd. ("Shenzhen BAK"), a wholly-owned subsidiary of the
Company, was party to an agreement with A123 Systems Inc. ("A123"). Under this
agreement, Shenzhen BAK agreed to manufacture products for A123 according
to the specifications furnished by, and using, among
other things,
materials consigned by A123 to BAK. This agreement, as amended on August 18,
2005, terminated
in accordance with its terms on August 30,
2007.
Item
9.01 Financial
Statements And Exhibits.
(d) Exhibits.
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Exhibit
No.
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Description
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4.1
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Form
of Registration Rights Agreement, dated November 5, 2007.
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10.1
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Form
of Securities Purchase Agreement,
dated November 5, 2007.
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10.2
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Delivery
of Make Good Shares, Settlement and Release Agreement, by and among
China
BAK Battery, Inc., Xiangqian Li, and BAK International, Ltd., dated
October 22, 2007.
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10.3
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Escrow
Agreement by and among Medina Coffee, Inc., certain investors indicated
therein, Xiangqian Li, and Securities Transfer Corporation, dated
as of
January 20, 2005 (incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K, filed on January 21, 2005 with the
Securities and Exchange Commission in File No.
000-49712).
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CHINA
BAK BATTERY,
INC. |
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By: |
/s/
Xiangqian Li |
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Xiangqian
Li
Chairman,
CEO and President
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Dated:
November 6, 2007
EXHIBIT
INDEX
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Exhibit
No.
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Description
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4.1
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Form
of Registration Rights Agreement, dated November 5, 2007.
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10.1
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Form
of Securities Purchase Agreement,
dated November 5, 2007.
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10.2
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Delivery
of Make Good Shares, Settlement and Release Agreement, by and among
China
BAK Battery, Inc., Xiangqian Li, and BAK International, Ltd., dated
October 22, 2007.
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10.3
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Escrow
Agreement by and among Medina Coffee, Inc., certain investors indicated
therein, Xiangqian Li, and Securities Transfer Corporation, dated
as of
January 20, 2005 (incorporated by reference to Exhibit 10.2 to
the
Company’s Current Report on Form 8-K, filed on January 21, 2005 with the
Securities and Exchange Commission in File No.
000-49712).
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