10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 2015
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From            To            

COMMISSION FILE NO.001-34098

HIGHPOWER INTERNATIONAL, INC.

(Exact name of Registrant as specified in its charter)

Delaware	20-4062622
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Building A1, 68 Xinxia Street, Pinghu, Longgang,

Shenzhen, Guangdong, 518111, People’s Republic of China

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)

(86) 755-89686238

(COMPANY’S TELEPHONE NUMBER, INCLUDING AREA CODE)

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 whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x     No ¨

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

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 registrant had 15,101,679 shares of common stock, par value $0.0001 per share, outstanding as of November 16, 2015.

HIGHPOWER INTERNATIONAL, INC.

FORM 10-Q

 FOR THE QUARTERLY PERIOD ENDED September 30, 2015

INDEX

				Page
Part I	Financial Information
	Item 1.	Consolidated Financial Statements
		(a)	Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014 (Audited)	1
		(b)	Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014 (Unaudited)	3
		(c)	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014 (Unaudited)	4
		(d)	Notes to Consolidated Financial Statements (Unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		44
	Item 4.	Controls and Procedures		44
Part II	Other Information
	Item 1.	Legal Proceedings		45
	Item 1A.	Risk Factors		45
	Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds		45
	Item 3.	Default Upon Senior Securities		45
	Item 4.	Mine Safety Disclosures		45
	Item 5.	Other Information		45
	Item 6.	Exhibits		50
Signatures				53

1 

Item 1. Consolidated Financial Statements

HIGHPOWER INTERNATIONAL, INC.AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars except Number of Shares)

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
ASSETS
Current Assets:
Cash and cash equivalents		7,910,185		14,611,892
Restricted cash		12,424,799		15,396,827
Accounts receivable, net		36,175,692		32,316,607
Notes receivable		1,902,394		621,110
Prepayments		4,243,902		3,283,520
Other receivables		743,714		665,828
Inventories		21,992,983		22,268,069
Total Current Assets		85,393,669		89,163,853
Property, plant and equipment, net		50,187,438		50,437,718
Land use right, net		4,081,797		4,305,317
Intangible asset, net		562,500		600,000
Deferred tax assets		1,877,181		1,647,184
TOTAL ASSETS		142,102,585		146,154,072
LIABILITIES AND EQUITY
LIABILITIES
Current Liabilities:
Accounts payable		36,921,440		44,562,647
Deferred income		1,080,230		1,887,409
Short-term loan		15,167,241		15,195,040
Notes payable		34,429,238		29,903,248
Other payables and accrued liabilities		6,655,287		5,896,547
Income taxes payable		1,601,146		1,968,656
Current portion of long-term loan		1,889,615		1,959,248
Total Current Liabilities		97,744,197		101,372,795
Warrant Liability		125,989		1,067,674
Long-term loan		472,404		1,959,247
TOTAL LIABILITIES		98,342,590		104,399,716
COMMITMENTS AND CONTINGENCIES		-		-

1 

HIGHPOWER INTERNATIONAL, INC.AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Stated in US Dollars except Number of Shares)

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
EQUITY
Stockholders’ equity
Preferred stock
(Par value: $0.0001, Authorized: 10,000,000 shares, Issued and outstanding: none)		-		-
Common stock
(Par value: $0.0001, Authorized: 100,000,000 shares, 15,101,679 shares issued and outstanding at September 30, 2015 and 15,084,746 shares issued and outstanding at December 31, 2014)		1,510		1,508
Additional paid-in capital		11,110,723		10,530,430
Statutory and other reserves		3,611,501		3,611,501
Retained earnings		24,362,131		20,675,021
Accumulated other comprehensive income		3,645,117		5,628,657
Total equity for the Company’s stockholders		42,730,982		40,447,117
Non-controlling interest		1,029,013		1,307,239
TOTAL EQUITY		43,759,995		41,754,356
TOTAL LIABILITIES AND EQUITY		142,102,585		146,154,072

See notes to consolidated financial statements

2 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Stated in US Dollars except Number of Shares)

	Three months ended  September 30,						Nine months ended  September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Net sales		37,556,826			44,474,560			108,330,275			111,769,510
Cost of sales		(30,340,151	)		(35,069,440	)		(86,994,126	)		(88,703,954	)
Gross profit		7,216,675			9,405,120			21,336,149			23,065,556
Research and development expenses		(1,963,690	)		(2,056,045	)		(5,635,308	)		(5,844,962	)
Selling and distribution expenses		(1,712,303	)		(1,697,674	)		(5,108,589	)		(4,822,560	)
General and administrative expenses		(3,295,815	)		(3,295,262	)		(9,744,336	)		(10,178,838	)
Foreign currency transaction gain (loss)		1,458,363			(15,369	)		1,902,220			334,326
Gain (loss) on derivative instruments		-			59,785			-			(56,349	)
Total operating expenses		(5,513,445	)		(7,004,565	)		(18,586,013	)		(20,568,383	)
Income from operations		1,703,230			2,400,555			2,750,136			2,497,173
Gain (loss) on change of fair value of warrant liability		510,553			(1,286,335	)		941,685			(1,211,787	)
Other income		154,904			590,117			742,051			1,493,491
Interest expenses		(246,563	)		(458,534	)		(790,681	)		(1,528,077	)
Income before taxes		2,122,124			1,245,803			3,643,191			1,250,800
Income taxes expenses		(270,622	)		(439,659	)		(194,206	)		(628,872	)
Net income		1,851,502			806,144			3,448,985			621,928
Less: net loss attributable to non-controlling interest		(91,843	)		(68,023	)		(238,126	)		(129,588	)
Net income attributable to the Company		1,943,345			874,167			3,687,111			751,516
Comprehensive income
Net income		1,851,502			806,144			3,448,985			621,928
Foreign currency translation (loss) income		(2,024,906	)		19,368			(2,023,640	)		(341,754	)
Comprehensive (loss) income		(173,404	)		825,512			1,425,345			280,174
Less: comprehensive loss attributable to non-controlling interest		(133,677	)		(67,486	)		(278,226	)		(140,213	)
Comprehensive (loss) income attributable to the Company		(39,727	)		892,998			1,703,571			420,387
Income per share of common stock attributable to the Company
- Basic		0.13			0.06			0.24			0.05
- Diluted		0.13			0.06			0.24			0.05
Weighted average number of common stock outstanding
- Basic		15,101,679			15,052,158			15,098,479			14,632,491
- Diluted		15,148,887			15,590,142			15,367,542			15,045,776

See notes to consolidated financial statements

3 

HIGHPOWER INTERNATIONAL, INC.AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

	Nine months ended September 30,
	2015			2014
	(Unaudited)			(Unaudited)
	$			$
Cash flows from operating activities
Net income		3,448,985			621,928
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,038,596			3,161,384
Allowance for doubtful accounts		1,132			103
Loss on disposal of property, plant and equipment		145,572			346,866
Gain on derivative instruments		-			67,748
Deferred income tax		(294,943	)		(830,413	)
Share based payment		535,761			1,064,969
(Gain) loss on change of fair value of warrant liability		(941,685	)		1,211,787
Changes in operating assets and liabilities:
Accounts receivable		(4,671,730	)		(4,404,612	)
Notes receivable		(1,339,122	)		(1,453,621	)
Prepayments		(1,102,578	)		448,249
Other receivable		(104,336	)		339,411
Inventories		(530,357	)		(989,237	)
Accounts payable		(6,233,405	)		10,701,057
Deferred income		242,683			1,635,985
Other payables and accrued liabilities		981,979			(920,591	)
Income taxes payable		(305,698	)		777,753
Net cash flows (used in) provided by operating activities		(6,129,146	)		11,778,766
Cash flows from investing activities
Acquisitions of plant and equipment		(7,250,757	)		(5,864,112	)
Net cash flows used in investing activities		(7,250,757	)		(5,864,112	)
Cash flows from financing activities
Proceeds from short-term bank loans		11,325,212			15,821,648
Repayment of short-term bank loans		(10,916,379	)		(35,934,559	)
Repayment of long-term bank loans		(1,456,099	)		(1,463,605	)
Proceeds from notes payable		49,315,315			34,246,949
Repayment of notes payable		(43,573,196	)		(32,308,636	)
Proceeds from exercise of employee options		44,534			-
Proceeds from issuance of capital stock, net		-			4,633,164
Change in restricted cash		2,491,383			12,900,973
Net cash flows provided by (used in) financing activities		7,230,770			(2,104,066	)
Effect of foreign currency translation on cash and cash equivalents		(552,574	)		18,757
Net (decrease) increase in cash and cash equivalents		(6,701,707	)		3,829,345
Cash and cash equivalents - beginning of period		14,611,892			7,973,459
Cash and cash equivalents - end of period		7,910,185			11,802,804
Supplemental disclosures for cash flow information:
Cash paid for:
Income taxes		794,846			681,533
Interest expenses		822,257			1,489,796
Non-cash transactions
Accounts payable for construction in progress		-			648,385
Reduction of property, plant and equipment cost by realizing deferred income		976,301			669,995

See notes to consolidated financial statements

4 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

1. Organization and basis of presentation

The consolidated financial statements include the financial statements of Highpower International, Inc. (“Highpower”) and its subsidiaries, Hong Kong Highpower Technology Company Limited (“HKHTC”), Shenzhen Highpower Technology Company Limited (“SZ Highpower”), Highpower Energy Technology (Huizhou) Company Limited (“HZ Highpower”), Springpower Technology (Shenzhen) Company Limited (“SZ Springpower”), Ganzhou Highpower Technology Company Limited (“GZ Highpower”), Icon Energy System Company Limited (“ICON”) and Huizhou Highpower Technology Company Limited ("HZ HTC"). Highpower and its subsidiaries are collectively referred to as the “Company”.

Highpower was incorporated in the State of Delaware on January 3, 2006. HKHTC was incorporated in Hong Kong on July 4, 2003. All other subsidiaries are incorporated in the People’s Republic of China (“PRC”).

On May 15, 2013, GZ Highpower increased its paid-in capital from RMB15,000,000 ($2,381,293) to RMB30,000,000 ($4,807,847). SZ Highpower holds 60% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 40%. On November 13, 2014, GZ Highpower increased its paid-in capital from RMB30,000,000 ($4,898,119) to RMB40,000,000 ($6,530,825) and the additional capital of RMB10,000,000 was contributed by SZ Highpower. As of December 31, 2014, SZ Highpower holds 70% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 30%.

In April 2014, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company sold 1,000,000 shares of common stock and warrants exercisable for 500,000 shares of common stock in a registered direct offering at a price of $5.05 per fixed combination for aggregate proceeds of $5.05 million. The shares and warrants were sold in multiples of a fixed combination consisting of (i) one share of common stock and (ii) one immediately exercisable warrant to purchase 0.50 shares of common stock. The net proceeds from the offering were $4,633,164, after deducting fees due the placement agent and offering expenses.

HZ Highpower was dissolved in September 2015.

The subsidiaries of the Company and their principal activities are described as follows:

Name of company	Place and date incorporation	Attributable equity interest held			Principal activities
Hong Kong Highpower Technology Co., Ltd ("HKHTC")	Hong Kong July 4, 2003		100	%	Investment holding and marketing of batteries
Shenzhen Highpower Technology Co., Ltd ("SZ Highpower")	PRC October 8, 2002		100	%	Manufacturing & marketing of batteries
Highpower Energy Technology (Huizhou) Co., Ltd ("HZ Highpower")	PRC January 29, 2008		100	%	Dissolved
Springpower Technology (Shenzhen) Co., Ltd ("SZ Springpower")	PRC June 4, 2008		100	%	Research & manufacturing of batteries
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower")	PRC September 21, 2010		70	%	Processing, marketing and research of battery materials
Icon Energy System Co., Ltd. ("ICON")	PRC February 23, 2011		100	%	Research and production of advanced battery packs and systems
Huizhou Highpower Technology Co., Ltd ("HZ HTC")	PRC March 8, 2012		100	%	Manufacturing & marketing of batteries

5 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies

Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and the unaudited interim consolidated financial statements as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP), have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation. The interim financial information should be read in conjunction with the Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, previously filed with the SEC.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2015, its consolidated results of operations and cash flows for the nine months ended September 30, 2015 and 2014, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Non-controlling interests represent the equity interest in the GZ Highpower that is not attributable to the Company.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenues; the allowance for doubtful receivables; recoverability of the carrying amount of inventory; fair values of financial instruments; and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

6 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable. The Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Company reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the management of the Company considers that the Company’s credit risk is significantly reduced.

No customer accounted for 10% or more of total sales during the nine months ended September 30, 2015 and 2014.

No supplier accounted for 10% or more of total purchase amount during the nine months ended September 30, 2015 and 2014.

As of September 30, 2015, there was one major customer accounted for 10% of the accounts receivable. And none of the Company’s customers accounted for 10% or more of the accounts receivable as of December 31, 2014.

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

Restricted cash

Restricted cash include time deposits and cash security for bank acceptance bills.

Accounts receivable

Accounts receivable are stated at the original amount less an allowance for doubtful receivables, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Bad debts are written off when identified. The Company extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Company does not accrue interest on trade accounts receivable.

Notes receivable

Notes receivable represent banks’ acceptances that have been arranged with third-party financial institutions by certain customers to settle their purchases from us. These banks’ acceptances are non-interest bearing and are collectible within six months.

7 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Inventories

Inventories are stated at lower of cost or market. Cost is determined using the weighted average method. Inventory includes raw materials, packing materials, consumables, work in progress and finished goods. The variable production overhead is allocated to each unit of production on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities.

Property, plant and equipment, net

Property, plant and equipment, net are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life.

Depreciation of property, plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:

Buildings	2.5% -5%
Furniture, fixtures and office equipment	20%
Leasehold improvement	20 - 50%
Machinery and equipment	10%
Motor vehicles	20%

Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress represents capital expenditures for direct costs of construction or acquisition and design fees incurred, and the interest expense directly related to the construction. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated.

Land use rights, net

Land use rights represent payments for the rights to use certain parcels of land for a certain period of time in the PRC. Land use rights are carried at cost and charged to expense on a straight-line basis over the period the rights are granted.

8 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Intangible assets

Intangible assets represent a royalty-bearing, non-exclusive license to use certain patents owned by an unrelated party ("License Provider") to manufacture rechargeable nickel metal hydride batteries for portable consumer applications (“Consumer Batteries”) in the PRC, and a royalty-bearing, non-exclusive worldwide license to use certain patents owned by License Provider to manufacture, sell and distribute Consumer Batteries. The value of the licenses was established based on historic acquisition costs.

An exclusive proprietary technology contributed by the four founding management members of GZ Highpower in exchange for the paid-in capital of GZ Highpower is recorded at the four management members’ historical cost basis of nil.

Intangible assets are amortized over their estimated useful lives, and are reviewed annually for impairment, or more frequently, if indications of possible impairment exist.

Government grants

Government grants are recognized when received and all the conditions for their receipt have been met.

Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets is recognized on the consolidated balance sheet as deferred income and deducted in calculating the carrying amount of the related asset. As of September 30, 2015 and December 31, 2014, the Company recorded deferred income of $1,080,230 and $1,887,409, respectively, for the government grants to purchase non-current assets.

Government grants as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related benefit are recognized as other income in the period in which they become receivable. In the nine months ended September 30, 2015 and 2014, approximately $246,442 and $292,197 of government grants were recognized as other income, respectively.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of domestic sales contracts transfer title and risk of loss to customers upon receipt. The majority of oversea sales contracts transfer title and risk of loss to customers when goods were delivered to the carriers. Revenue is presented net of any sales tax and value added tax.

The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no incentive programs.

Cost of sales

Cost of revenues consists primarily of material costs, employee compensation, depreciation and related expenses, which are directly attributable to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues. 

9 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Shipping and handling

Shipping and handling expenses are recorded as selling expenses when occurred. Shipping and handling expenses relating to sales were $767,108 and $663,069, respectively, for the nine months ended September 30, 2015 and 2014.

Research and development

Research and development expenses include expenses directly attributable to the conduct of research and development programs, including the expenses of salaries, employee benefits, materials, supplies, and maintenance of research equipment. All expenditures associated with research and development are expensed as incurred.

Advertising

Advertising, which generally represents the cost of promotions to create or stimulate a positive image of the Company or a desire to buy the Company’s products and services, is expensed as incurred. No significant advertising expense was recorded for the nine months ended September 30, 2015 and 2014.

Share-based compensation

The Company recognizes compensation expense associated with the issuance of equity instruments to employees for their services. The fair value of the equity instruments is estimated on the date of grant and is expensed in the financial statements over the vesting period. The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and the dividend yield.

Share-based compensation associated with the issuance of equity instruments to nonemployees is measured with the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete.

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Uncertain tax positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. There were no uncertain tax positions as of September 30, 2015 and December 31, 2014.

10 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Comprehensive income

Recognized revenue, expenses, gains and losses are included in net income or loss. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated balance sheet, such items, along with net income or loss, are components of comprehensive income or loss. The components of other comprehensive income or loss are consisted solely of foreign currency translation adjustments, net of the income tax effect.

Foreign currency translation and transactions

Highpower’s functional currency is the United States dollar ("US$"). HKHTC's functional currency is the Hong Kong dollar ("HK$"). The functional currency of the Company’s subsidiaries in the PRC is the Renminbi ("RMB").

Most of the Company’s oversea sales are priced and settled with US$. At the date a foreign currency transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured initially in the functional currency of the recording entity by use of the exchange rate in effect at that date. The increase or decrease in expected functional currency cash flows upon settlement of a transaction resulting from a change in exchange rates between the functional currency and the currency in which the transaction is denominated is recognized as foreign currency transaction gain or loss that is included in determining net income for the period in which the exchange rate changes. At each balance sheet date, recorded balances that are denominated in a foreign currency are adjusted to reflect the current exchange rate.

The Company’s reporting currency is US$. Assets and liabilities of HKHTC and the PRC subsidiaries are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

Segment Reporting

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company’s reportable segments are based on products, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Therefore, the Company categorizes its business into three reportable segments, namely (i) Ni-MH Batteries; (ii) Lithium Batteries; and (iii) New Materials.

11 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Fair value of financial instruments

The carrying values of the Company’s financial instruments, including cash and cash equivalents, restricted cash, trade and other receivables, deposits, trade and other payables, and bank borrowings, approximate their fair values due to the short-term maturity of such instruments.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The Company establishes a fair value hierarchy that requires maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company measures fair value using three levels of inputs that may be used to measure fair value:

-Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

-Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

-Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Warrant Liabilities

For warrants that are not indexed to the Company’s stock, the Company records the fair value of the issued warrants as a liability at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of operations and comprehensive loss. The fair values of these warrants have been determined using the Black-Scholes pricing model. The Black-Scholes pricing model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company.

Derivatives

From time to time the Company may utilize foreign currency forward contracts to reduce the impact of foreign currency exchange rate risk. Management considered that the foreign currency forwards did not meet the criteria for designated hedging instruments and hedged transactions to qualify for cash flow hedge or fair value hedge accounting. The currency forwards therefore are accounted for as derivatives, with fair value changes reported as gain (loss) of derivative instruments in the income statement.

12 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

2. Summary of significant accounting policies (continued)

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive.

Recently issued accounting pronouncements

As of November 16, 2015, the Financial Accounting Standards Board (“FASB”) has issued ASU No. 2015-01 Income Statement-Extraordinary and Unusual Items through ASU No. 2015-16 Business Combinations, which are not expected to have a material impact on the consolidated financial statements upon adoption.

13 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

3. Restricted cash

As of September 30, 2015 and December 31, 2014, restricted cash consisted of the following:

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Securities for bank acceptance bill		11,381,024		10,689,297
Time deposits		1,043,775		4,707,530
		12,424,799		15,396,827

4. Accounts receivable, net

As of September 30, 2015 and December 31, 2014, accounts receivable consisted of the following:

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accounts receivable		38,652,032		34,816,914
Less: allowance for doubtful debts		2,476,340		2,500,307
		36,175,692		32,316,607

The Company recorded bad debt expense of $1,132 and $103, respectively, during the nine months ended September 30, 2015 and 2014. The Company recorded bad debt expense of $236 during the three months ended September 30, 2015, and the Company reversed bad debt expenses of $163 during the three months ended September 30, 2014. The Company wrote off accounts receivable of $nil and $2,948, respectively, in the nine months ended September 30, 2015 and 2014. The Company wrote off accounts receivable of $nil for both three months ended September 30, 2015 and 2014.

5. Prepayments

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Purchase deposits paid		2,138,835		1,793,599
Value-added tax prepayment		401,239		384,008
Rental deposit		424,533		266,556
Deferred insurance fee		117,019		97,005
Advances to staff for operations		244,635		122,452
Other deposits and prepayments		917,641		619,900
		4,243,902		3,283,520

Other deposits and prepayments represent deferred expenses and prepayments to services providers.

14 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

6. Other receivables

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Compensation receivable for land occupation		498,065		516,418
Others		245,649		149,410
		743,714		665,828

7. Inventories

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Raw materials		4,599,155		4,341,675
Work in progress		5,071,096		3,949,778
Finished goods		11,940,131		13,685,166
Packing materials		21,490		20,137
Consumables		361,111		271,313
		21,992,983		22,268,069

Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes. The Company wrote down inventory of $333,672 and $586,748, in the nine months ended September 30, 2015 and 2014. The Company wrote off inventory of $57,876 and wrote down inventory of $381,876 for three months ended September 30, 2015 and 2014, respectively.

15 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

8. Property, plant and equipment, net

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Cost
Construction in progress		1,437,882		715,821
Furniture, fixtures and office equipment		3,942,837		3,754,990
Leasehold improvement		4,130,174		3,763,290
Machinery and equipment		30,063,513		28,180,306
Motor vehicles		1,653,427		1,479,921
Building		24,463,867		25,414,914
		65,691,700		63,309,242
Less: accumulated depreciation		15,504,262		12,871,524
		50,187,438		50,437,718

The Company recorded depreciation expenses of $3,928,655 and $3,051,069 for the nine months ended September 30, 2015 and 2014, respectively, and $1,466,647 and $1,071,176 for the three months ended September 30, 2015 and 2014, respectively.

During the nine months ended September 30, 2015, the Company deducted deferred income related to government grants of $976,301 in calculating the carrying amount of property, plant and equipment. During the year ended December 31, 2014, the Company deducted deferred income related to government grants of $672,675 in calculating the carrying amount of property, plant and equipment.

The buildings comprising the Huizhou facilities were pledged as collateral for bank loans as of September 30, 2015 and December 31, 2014. The carrying amount of the building was $10,011,522 and $10,573,369 as of September 30, 2015 and December 31, 2014, respectively.

As of September 30, 2015, the buildings comprising the Ganzhou facilities were pledged as collateral for line of credit, which were used for short-term loans and bank guarantee promissory notes. The carrying amount of the building was $2,751,710 as of September 30, 2015.

9. Land use rights, net

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Land located in Huizhou		3,381,319			3,505,921
Land located in Ganzhou		1,319,119			1,367,729
		4,700,438			4,873,650
Accumulated amortization		(618,641	)		(568,333	)
Net		4,081,797			4,305,317

As of September 30, 2015, land use rights of the Company included certain parcels of land located in Huizhou City, Guangdong Province, PRC and Ganzhou City, Jiangxi Province, PRC. Land use rights for land in Huizhou City with an area of approximately 126,605 square meters and in Ganzhou City with an area of approximately 58,669 square meters will expire on May 23, 2057 and January 4, 2062, respectively.

16 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

Land use rights are being amortized annually using the straight-line method over a contract term of 50 years. Estimated amortization for the coming years is as follows:

	$
Remaining 2015	23,502
2016	94,009
2017	94,009
2018	94,009
2019	94,009
2020 and thereafter	3,682,259
	4,081,797

The Company recorded amortization expenses of $72,441 and $72,815 for the nine months ended September 30, 2015 and 2014, respectively, and $23,753 and $24,222 for the three months ended September 30, 2015 and 2014, respectively.

The land use right for land located in Huizhou City was pledged as collateral for bank loans as of September 30, 2015 and December 31, 2014.

As of September 30, 2015, the land use right for land located in Ganzhou City was pledged as collateral for line of credit, which was used for short-term loans and bank guarantee promissory notes.

17 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

10. Intangible asset

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Consumer battery license fee		1,000,000			1,000,000
Accumulated amortization		(437,500	)		(400,000	)
Net		562,500			600,000

The Company is amortizing the $1,000,000 cost of the Consumer Battery License Agreement with License Provider over a period of 20 years on the straight line basis over the estimated useful life of the underlying technology, which is based on the Company’s assessment of existing battery technology, current trends in the battery business, potential developments and improvements, and the Company’s current business plan.

As of September 30, 2015 and December 31, 2014, the Company had an exclusive proprietary technology with historical cost of zero but still in use. The exclusive proprietary technology was contributed by four founding management members of GZ Highpower in exchange for the paid-in capital of GZ Highpower. The historical cost basis was recorded at $nil at the four management members’ historical cost basis.

Amortization expenses included in research and development expenses were $37,500 for the nine months ended September 30, 2015 and 2014, and $12,500 for the three months ended September 30, 2015 and 2014.

11. Other payables and accrued liabilities

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accrued expenses		4,228,893		3,649,806
Royalty payable		473,990		580,032
VAT payable		432,260		405,859
Sales deposits received		1,076,126		911,947
Other payables		444,018		348,903
		6,655,287		5,896,547

18 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

12. Taxation

The Company and its subsidiaries file tax returns separately.

1) VAT

Pursuant to the Provisional Regulation of the PRC on VAT and the related implementing rules, all entities and individuals ("taxpayers") that are engaged in the sale of products in the PRC are generally required to pay VAT at a rate of 17% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayers. Further, when exporting goods, the exporter is entitled to a portion of or all the refund of VAT that it has already paid or incurred. The Company’s PRC subsidiaries are subject to VAT at 17% of their revenues.

2) Income tax

United States

Highpower was incorporated in Delaware and is subject to U.S. federal income tax with a system of graduated tax rates ranging from 15% to 35%. As Highpower does not conduct any business in the U.S. or Delaware, it is not subject to U.S. or Delaware state corporate income tax. No deferred U.S. taxes are recorded since all accumulated profits in the PRC will be permanently reinvested in the PRC.

Hong Kong

HKHTC, which is incorporated in Hong Kong, is subject to a corporate income tax rate of 16.5%.

PRC

In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income.

In China, the companies granted with National High-tech Enterprise (“NHTE”) status enjoy 15% income tax rate. This status needs to be renewed every three years. In 2008, SZ Highpower received NHTE status, which was renewed in 2011 and recently renewed in 2014. In 2013, SZ Springpower received NHTE status. In 2014, both GZ Highpower and ICON received NHTE status. If these subsidiaries fail to renew NHTE status, they will be subject to income tax at a rate of 25% after the expiration of NHTE status.

All the other PRC subsidiaries are not entitled to any tax holiday. They were subject to income tax at a rate of 25% for calendar years 2015 and 2014.

19 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

12. Taxation (continued)

The components of the provision for income taxes expenses are:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Current		335,515			720,932			489,149			1,459,285
Deferred		(64,893	)		(281,273	)		(294,943	)		(830,413	)
Total		270,622			439,659			194,206			628,872

The reconciliation of income tax expense computed at the statutory tax rate applicable to the Company to income tax expense is as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Income before tax		2,122,124			1,245,803			3,643,191			1,250,800
Provision for income taxes at applicable income tax rate		518,320			154,019			831,261			73,150
Effect of preferential tax rate		(220,375	)		(332,606	)		(189,125	)		(546,529	)
R&D expenses eligible for super deduction		4,494			74			(551,113	)		(71,531	)
Non-deductible expenses		14,206			43,591			41,107			124,082
Change in valuation allowance		(46,023	)		574,581			62,076			1,049,700
Effective enterprise income tax		270,622			439,659			194,206			628,872

3) Deferred tax assets

Deferred tax assets and deferred tax liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference.

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Tax loss carry-forward		3,970,745			3,798,290
Allowance for doubtful receivables		107,835			111,637
Allowance for inventory obsolescence		221,702			138,458
Difference for sales cut-off		48,387			20,572
Deferred income		162,034			283,111
Property, plant and equipment subsidized by government grant		241,936			100,901
Total gross deferred tax assets		4,752,639			4,452,969
Valuation allowance		(2,875,458	)		(2,805,785	)
Total net deferred tax assets		1,877,181			1,647,184

20 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

13. Notes payable

Notes payable are presented to certain suppliers as a payment against the outstanding trade payables.

Notes payable are mainly bank guarantee promissory notes which are non-interest bearing and generally mature within six months. The outstanding bank guarantee promissory notes are secured by restricted cash deposited in banks and $377,923 notes receivable of Springpower, $1,015,682 note receivable of HZ HTC, and $157,468 note receivable of GZ Highpower. Outstanding notes payable were $34,429,238 and $29,903,248 as of September 30, 2015 and December 31, 2014, respectively.

As of September 30, 2015, the Company issued $nil trade acceptances to suppliers. These trade acceptances are non-interest bearing and mature within six months. No security deposit is needed. The trade acceptance as of December 31, 2014 was $522,466.

14. Short-term loans

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Short- term bank loans guaranteed and repayable within one year		15,167,241		15,195,040

As of September 30, 2015, the above bank borrowings were for working capital and capital expenditure purposes and were secured by personal guarantees executed by certain directors of the Company, a land use right with a carrying amount of $4,081,797, and the building with a carrying amount of $12,763,232.

The loans as of September 30, 2015 were primarily obtained from 8 banks with interest rates ranging from 5.75% to 6.624% per annum. The interest expenses were $620,070 and $1,240,334 for the nine months ended September 30, 2015 and 2014, respectively, and $200,914 and $370,775 for the three months ended September 30, 2015 and 2014, respectively.

15. Lines of credit

The Company entered into various credit contracts and revolving lines of credit, which were used for short-term loans and bank acceptance bills. The following tables summarize the unused lines of credit as of September 30, 2015 and December 31, 2014:

	September 30, 2015 (Unaudited)
Lender	Starting date	Maturity date	Line of credit		Unused line of credit
			$		$
Ping An Bank Co., Ltd	10/20/2014	10/19/2015(i)		11,022,754		3,329,344
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015		4,566,570		4,566,570
Industrial Bank Co., Ltd	7/15/2015	7/15/2016		9,448,075		6,713,634
China Everbright Bank Co., Ltd	6/23/2015	6/22/2016		7,873,396		2,515,922
Bank of China	7/1/2015	6/30/2016		11,472,662		2,010,110
Bank of China	7/13/2015	9/13/2016		14,093,378		6,109,755
China Minsheng Banking Corp.,Ltd	7/16/2015	7/16/2016		4,499,083		1,962,330
Total				62,975,918		27,207,665

(i) The lines of credit from the bank is terminated at the maturity date.

21 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

15. Lines of credit (continued)

	December 31, 2014
Lender	Starting date	Maturity date	Line of credit		Unused line of credit
			$		$
Bank of China	3/10/2014	3/10/2015 (ii)		12,653,474		424,823
Bank of China	7/23/2014	7/23/2015 (ii)		3,965,144		67,516
Ping An Bank Co., Ltd	10/20/2014	10/19/2015		11,428,945		295,818
China Minsheng Banking Corp., LTD	5/22/2014	5/22/2015 (ii)		3,265,413		-
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015		4,734,848		1,750,151
Industrial and Commercial Bank of China	7/26/2012	7/25/2015 (i)		6,530,826		3,918,496
China Citic Bank	6/25/2014	6/25/2015 (i)		8,046,910		6,788,093
Industrial Bank Co., Ltd	10/23/2014	10/23/2015 (iii)		6,530,825		4,430,636
Jiang Su Bank Co., Ltd	10/28/2014	9/11/2015 (i)		4,898,119		4,898,119
Total				62,054,504		22,573,652

(i) The lines of credit from these banks are terminated at maturity dates.

(ii) The lines of credit from these banks are rolled over after maturity dates.

(iii) The lines of credit from Industrial Bank Co., Ltd rolled over before maturity date.

The lines of credits from Bank of China, Ping An Bank, China Minsheng Banking Corp., Ltd, Industrial Bank Co. Ltd, Shenzhen Baoan Guiyin County Bank and China Everbright Bank Co., Ltd are guaranteed by the Company’s Chief Executive Officer, Mr. Dang Yu Pan.

Certain of the agreements governing the Company’s loans include standard affirmative and negative covenants, including restrictions on granting additional pledges on the Company’s property and incurring additional debt and obligations to provide advance notice of major corporate actions, and other covenants including: that the borrower may not serve as a guarantor for more than double its net assets; that the borrower is restricted in certain circumstances from using the loans in connection with related party transactions or other transactions with affiliates; that the borrower must provide monthly reports to certain lenders describing the actual use of loans; that the borrower may need to obtain approval to engage in major corporate transactions; and that the borrower may need to obtain approval to increase overseas investments, guarantee additional debt or incur additional debt by an amount which exceeds 20% of its total net assets should the lender determine that such action would have a material impact on the ability of the borrower to repay the loan. The covenants in these loan agreements could prohibit the Company from incurring any additional debt without consent from its lenders. The Company believes it would be able to obtain consents from the lenders in the event it needed to do so. The agreements governing the Company’s loans may also include covenants that, in certain circumstances, may require the Company’s PRC operating subsidiaries to give notice to, or obtain consent from, certain of their lenders prior to making a distribution of net profit, as well as covenants restricting the ability of the Company’s PRC operating subsidiaries from extending loans. As of September 30, 2015 and December 31, 2014, the Company was in compliance with all material covenants in its loan agreements.

22 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

16. Long-term loans

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Long term loans from Bank of China		2,362,019		3,918,495
Less: current portion of long-term borrowings		1,889,615		1,959,248
Long- term bank loans, net of current portion		472,404		1,959,247

On January 13, 2012, the Company borrowed $8,198,065 (RMB50 million) from the Bank of China, which is guaranteed by the Company’s Chief Executive Officer, Mr. Dang Yu Pan. It is a five-year long-term loan, with an annual interest rate of 5.5%, which was equal to 110% of the benchmark-lending rate of the People’s Bank of China (“PBOC”) as of September 30, 2015. Interest expenses are to be paid quarterly.

The interest expenses were $170,611 and $287,743 for the nine months ended September 30, 2015 and 2014, respectively, and $45,649 and $87,759 for the three months ended September 30, 2015 and 2014, respectively.

The principal is to be repaid quarterly from September 30, 2012. 2% of the principal was repaid on each of September 30, 2012 and December 30, 2012, respectively. Thereafter 6% of the principal is to be repaid every quarter after December 31, 2012 until the maturity date. The repayment schedule of the principal is summarized as in below table:

	$
Remaining 2015		472,404
2016		1,889,615
		2,362,019

17. Share-based Compensation

The 2008 Omnibus Incentive Plan

The 2008 Omnibus Incentive Plan (the "2008 Plan") was approved by the Company’s Board of Directors on October 29, 2008 to be effective at such date, subject to approval of the Company’s stockholders, which occurred on December 11, 2008. The 2008 Plan has a ten year term. The 2008 Plan reserves two million shares of common stock for issuance, subject to adjustment in the event of a recapitalization in accordance with the terms of the 2008 Plan.

The 2008 Plan authorizes the issuance of awards including stock options, restricted stock units (RSUs), restricted stock, unrestricted stock, stock appreciation rights (SARs) and other equity and/or cash performance incentive awards to employees, directors, and consultants of the Company. Subject to certain restrictions, the Compensation Committee of the Board of Directors has broad discretion to establish the terms and conditions for awards under the 2008 Plan, including the number of shares, vesting conditions and the required service or performance criteria. Options and SARs may have a contractual term of up to ten years and generally vest over three to five years with an exercise price equal to the fair market value on the date of grant. Incentive stock options (ISOs) granted must have an exercise price equal to or greater than the fair market value of the Company’s common stock on the date of grant. Repricing of stock options and SARs is permitted without stockholder approval. If a particular award agreement so provides, certain change in control transactions may cause such awards granted under the 2008 Plan to vest at an accelerated rate, unless the awards are continued or substituted for in connection with the transaction. As of September 30, 2015, approximately 569,762 shares of common stock remained available for issuance pursuant to awards granted under the 2008 Plan.

23 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

17. Share-based Compensation (continued)

Options Granted to Employees

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2014		1,105,000			2.87		8.51
Granted		-			-		-
Exercised		(200,000	)		2.41		-
Forfeited		(44,714	)		2.63		-
Canceled		(100,000	)		3.55		-
Outstanding, December 31, 2014		760,286			2.92		7.78
Exercisable, December 31, 2014		413,620			3.16		6.98

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2015		760,286			2.92		7.78
Granted		75,000			4.43		-
Exercised		(16,933	)		2.63		-
Forfeited		(18,048	)		2.63		-
Canceled		-			-		-
Outstanding, September 30, 2015		800,305			3.07		7.23
Exercisable, September 30, 2015		451,658			3.32		6.57

The aggregate intrinsic value of options vested and expected to vest as of September 30, 2015 and December 31, 2014 was approximately $7,000 and $1.4 million, respectively. Intrinsic value is calculated as the amount by which the current market value of a share of common stock exceeds the exercise price multiplied by the number of option shares.

During the nine months ended September 30, 2015, the Company granted options to purchase 75,000 shares to two employees. Nine employees exercised their option to purchase 16,933 shares of the Company’s common stock. During the nine months ended September 30, 2015, three employees had resigned and their options to purchase a total of 18,048 shares of the Company’s common stock were forfeited. These employees had resigned with 3,670 shares vested, which if not exercised with 90 days after termination they will be cancelled. These vested shares were exercised in the period.

During the three months ended September 30, 2015, there were no option grants or option exercises. One employee resigned and their options to purchase a total of 9,484 shares of the Company’s common stock were forfeited.

During the nine months ended September 30, 2014, the Company did not grant any new options to employees. One employee exercised his options to purchase 160,000 shares of the Company’s common stock. As a result, the Company issued 74,052 shares of common stock to this employee by net share settlement. Two employees resigned and their options to purchase a total of 29,204 shares of the Company’s common stock were forfeited.

The estimated fair value of share-based compensation to employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award.

24 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

17. Share-based Compensation (continued)

Restricted Stock Awards Granted to Employees

During the year ended December 31, 2013, the Company granted 246,000 shares of restricted stock to members of the Board of Directors as Restricted Stock Awards (“RSA”) under the 2008 Plan. The RSAs granted in 2013 had the following vesting periods; 30% immediately upon grant, 30% vest on first anniversary of the grant date, and 40% vest on the second anniversary of grant date. The RSAs are governed by agreements between the Company and recipients of the awards. Terms of the agreements are determined by the Compensation Committee. There were no RSAs granted to employees during the nine months ended September 30, 2015 and 2014.

The following table summarizes the restricted stock awards activities for the nine months ended September 30, 2015:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term in Years
			$
Outstanding, January 1, 2015		98,400		2.81		0.77
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding, September 30, 2015		98,400		2.81		0.02
Expected to vest, September 30, 2015		87,441		2.81		0.02

Share-based Compensation to Nonemployees

On July 15, 2013, the Company entered into an agreement with a consulting firm. In return for the consulting firm’s financial advisory service in the coming two years, the Company issued an aggregate of 150,000 shares of the Company’s common stock to the consulting firm on August 15, 2013. The shares were fully vested upon issuance and the fair value of the shares was $171,000 which was based on the closing market price of the Company’s common stock on August 15, 2013. The share-based compensation was being amortized over the consulting service period. In the second quarter of 2014, the service agreement was terminated.

The Company also agreed to issue another 150,000 shares of the Company’s common stock to the consulting firm after a specific financing target is completed. As the financing target was not achieved before the termination of the service agreement in the second quarter of 2014, such 150,000 shares of common stock was not issued to the consulting firm.

Also, in connection with this consulting agreement, on January 17, 2014 the Company issued five year warrants to purchase 200,000 shares of the Company’s common stock. The shares were fully vested upon issuance and the aggregate fair value of the warrants was approximately $390,000, which was calculated using the Black-Scholes pricing model, with the following weighted-average assumptions:

25 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

Expected volatility		83.6	%
Risk-free interest rate		1.64	%
Expected term from grant date (in years)		5.0
Dividend rate		-
Fair value	$	1.95

Expected Term

The expected term of the warrants issued during the nine months ended September 30, 2014, represents the remaining contractual term of the warrants.

Expected Volatility

The expected volatility used for the nine-month period ended September 30, 2014 is based upon the Company’s own trading history.

Risk-Free Interest Rate

The risk-free interest rate assumption is based on U.S. Treasury instruments with a term consistent with the remaining contractual term of the warrants issued during the first three quarters of 2014.

Dividend Yield

The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

Forfeitures

The Company estimates forfeitures at the time of grant and revises the estimates in subsequent periods if actual forfeitures differ from what was estimated. The forfeiture rate is applied to stock options and restricted stock awards. The Company uses historical data to estimate pre-vesting forfeitures and records stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a ratable basis over the requisite service periods of the awards, which are generally the vesting periods. The Company records stock-based compensation expense only for those awards that are expected to vest.

26 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

17. Share-based Compensation (continued)

Total Share-based Compensation Expenses

As of September 30, 2015, the gross amount of unrecognized share-based compensation expense relating to unvested share-based awards held by employees was approximately $0.4 million, which the Company anticipates recognizing as a charge against income over a weighted average period of 1.26 years.

In connection with the grant of stock options, restricted stock awards and warrants to employees and nonemployees, the Company recorded stock-based compensation charges of $535,761 and $nil, respectively, for the nine-month period ended September 30, 2015, and $543,369 and $521,599, respectively, for the nine-month period ended September 30, 2014. The Company recorded stock-based compensation charges of $123,457 and $nil, respectively, for the three-month period ended September 30, 2015 and stock-based compensation charges of $148,725 and $ nil, respectively, for the three-month period ended September 30, 2014.

27 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

18. Earnings per share

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock outstanding that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, restricted shares. The dilutive effect of potential dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The Company excludes potential common stock in the diluted EPS computation in periods of losses from continuing operations, as their effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2015 and 2014, and the nine months ended September 30, 2015 and 2014.

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Numerator:
Net income attributable to the Company		1,943,345		874,167		3,687,111		751,516
Denominator:
Weighted-average shares outstanding
- Basic		15,101,679		15,052,158		15,098,479		14,632,491
- Diluted		15,148,887		15,590,142		15,367,542		15,045,776
Income per common share
- Basic		0.13		0.06		0.24		0.05
- Diluted		0.13		0.06		0.24		0.05

Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

1,632,239 options and warrants outstanding with a total dilutive effect of 269,063 shares were included in the computation of diluted EPS for the nine months ended September 30, 2015. 1,655,797 options and warrants outstanding with a total dilutive effect of 413,286 shares were included in the computation of diluted EPS for the nine months ended September 30, 2014.

1,632,239 options and warrants outstanding with a total dilutive effect of 47,208 shares were included in the computation of diluted EPS for the three months ended September 30, 2015. There were 915,796 shares of stock options and 200,000 shares of warrants with a total dilutive effect of 525,716 shares, which included in the computation of diluted EPS for the three months ended September 30, 2014.

28 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

19. Securities Offering Transaction

In April 2014, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company sold 1,000,000 shares of common stock and warrants exercisable for 500,000 shares of common stock in a registered direct offering at a price of $5.05 per fixed combination for aggregate proceeds of $5.05 million. The shares and warrants were sold in multiples of a fixed combination consisting of (i) one share of common stock and (ii) one immediately exercisable warrant to purchase 0.50 shares of common stock. The net proceeds from the offering were $4,633,164, after deducting fees due the placement agent and offering expenses.

The warrants have an initial exercise price of $6.33 per share and are exercisable until April 17, 2017. The exercise price of the warrants, and in some cases the number of shares issuable upon exercise of the warrants, will be subject to appropriate adjustment in relation to certain events. In addition, if the Company issues shares in the future at a price below $6.33 per share, the exercise price of the warrants will be reduced to such lower price. No adjustment will be made to the number of shares purchasable in such event.

The warrants were classified as a liability. The aggregate fair value of the warrant liability at issuance dates was $1,173,952. The residual balance of $3,459,212 was allocated to common shares issued.

The fair values of the warrants as of April 17, 2014 were calculated using the Black-Scholes pricing model with the following assumptions:

	April 17, 2014
Expected volatility		85.76	%
Risk-free interest rate		0.9	%
Expected term (in years)		3.0
Dividend rate		-
Fair value	$	2.3

The fair value of the investor warrant liability will be re-measured at each period and recorded as a gain or loss on fair value of warrant liability. As of September 30, 2015 and December 31, 2014, the fair value of warrant liability was $125,989 and $1,067,674, respectively. The Company recognized a gain of $941,685 and a loss of $1,211,787 on the change of fair value of warrant liability for the nine months ended September 30, 2015 and 2014. The Company recognized a gain of $510,553 and a loss of $1,286,335 on the change of fair value of warrant liability for the three months ended September 30, 2015 and 2014, respectively.

The fair values of the warrants as of September 30, 2015 and December 31, 2014 were calculated using the Black-Scholes pricing model with the following assumptions:

	September 30, 2015			December 31, 2014
Expected volatility		84.11	%		86.4	%
Risk-free interest rate		0.55	%		0.79	%
Expected term (in years)		1.79			2.29
Dividend rate		-			-
Fair value	$	0.99		$	2.14

In conjunction with the securities offering transaction, the Company issued three year warrants to investment bankers to purchase 40,000 shares of the Company’s common stock at $6.33 per share. The aggregate fair value of the warrants was $94,982, which was recognized as a share-based compensation and resulted in an increase of additional paid-in capital. As such compensation was offering cost, it resulted in a reduction in additional paid-in capital. Hence, such transaction has no net impact on the Company’s financial position as of September 30, 2015.

29 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

20. Defined contribution plan

Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the PRC operating subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries. Except for pension benefits, medical care, employee housing fund and other welfare benefits mentioned above, the Company has no legal obligation for the benefits beyond the contributions made.

The total amounts for such employee benefits, which were expensed as incurred, were $1,350,972 and $1,128,544 for the nine months ended September 30, 2015 and 2014, respectively, and $524,083 and $424,841 for the three months ended September 30, 2015 and 2014, respectively.

21. Non-controlling interest

GZ Highpower is the Company’s majority-owned subsidiary which is consolidated in the Company’s financial statements with a non-controlling interest recognized. GZ Highpower is engaged in processing, marketing and research of battery materials.

On May 15, 2013, GZ Highpower increased its paid-in capital from RMB15,000,000 ($2,381,293) to RMB30,000,000 ($4,807,847). SZ Highpower holds 60% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 40%. On November 13, 2014, GZ Highpower increased its paid-in capital from RMB30,000,000 ($4,898,119) to RMB40,000,000 ($6,530,825) and the additional capital of RMB10,000,000 was contributed by SZ Highpower. As of December 31, 2014, SZ Highpower holds 70% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 30%.

As of September 30, 2015 and December 31, 2014, non-controlling interest related to GZ Highpower in the consolidated balance sheet was $1,029,013 and $1,307,239, respectively.

Non-controlling interest related to GZ Highpower in the consolidated statements of operations was loss of $238,126 and $129,588 for the nine months ended September 30, 2015 and 2014, respectively, and $91,843 and $68,023 for the three months ended September 30, 2015 and 2014.

30 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

22. Commitments and contingencies

Operating leases commitments

The Company leases factory and office premises under various non-cancelable operating lease agreements that expire at various dates through years 2015 to 2026, with options to renew the leases. All leases are on a fixed repayment basis. None of the leases includes contingent rentals. Minimum future commitments under these agreements as of September 30, 2015 are as follows:

	$
Remaining 2015		408,957
2016		1,717,659
2017		670,097
2018		346,690
2019		346,690
2020		346,690
2021 and after		1,849,013
		5,685,796

Rent expenses for the nine months ended September 30, 2015 and 2014 were $1,231,165 and $1,183,430, respectively, and $411,717 and $391,109 for the three months ended September 30, 2015 and 2014.

Capital commitments

The Company has no capital commitments as of September 30, 2015 and December 31, 2014, respectively.

31 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

23. Segment information

The reportable segments are components of the Company that offer different products and are separately managed, with separate financial information available that is separately evaluated regularly by the Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, in determining the performance of the business. The Company categorizes its business into three reportable segments, namely (i) Ni-MH Batteries; (ii) Lithium Batteries; and (iii) New Materials.

The CODM evaluates performance based on each reporting segment’s net sales, cost of sales, gross profit and total assets. Net sales, cost of sales, gross profit and total assets by segments is set out as follows:

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
	$			$		$			$
Net sales
Ni-MH Batteries		20,123,880			22,468,264		50,658,776			57,109,202
Lithium Batteries		16,964,109			21,069,435		55,851,039			51,971,642
New Materials		468,837			936,861		1,820,460			2,688,666
Total		37,556,826			44,474,560		108,330,275			111,769,510
Cost of Sales
Ni-MH Batteries		16,889,621			17,843,761		40,455,557			45,357,950
Lithium Batteries		12,888,378			16,355,265		44,528,861			40,935,690
New Materials		562,152			870,414		2,009,708			2,410,314
Total		30,340,151			35,069,440		86,994,126			88,703,954
Gross Profit
Ni-MH Batteries		3,234,259			4,624,503		10,203,219			11,751,252
Lithium Batteries		4,075,731			4,714,170		11,322,178			11,035,952
New Materials		(93,315	)		66,447		(189,248	)		278,352
Total		7,216,675			9,405,120		21,336,149			23,065,556

	September 30,2015		December 31,2014
	(Unaudited)
	$		$
Total Assets
Ni-MH Batteries		46,515,993		50,275,286
Lithium Batteries		84,115,350		86,339,973
New Materials		11,471,242		9,538,813
Total		142,102,585		146,154,072

32 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Stated in US Dollars)

23. Segment information (continued)

All long-lived assets of the Company are located in the PRC. Geographic information about the sales and accounts receivable based on the location of the Company’s customers is set out as follows:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Net sales
China Mainland		14,926,318		14,000,267		48,241,708		48,426,925
Asia, others		13,014,689		17,678,124		35,094,329		31,942,250
Europe		8,430,503		10,465,002		19,996,003		23,908,064
North America		934,880		2,128,707		4,275,438		6,725,849
South America		143,795		116,227		445,368		317,928
Africa		53,099		43,872		156,906		281,016
Others		53,542		42,361		120,523		167,478
		37,556,826		44,474,560		108,330,275		111,769,510

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Accounts receivable
China Mainland		17,914,478		17,282,481
Asia, others		9,242,073		8,662,503
Europe		8,305,131		5,747,058
North America		548,579		296,572
South America		91,326		211,391
Africa		74,105		81,962
Others		-		34,640
		36,175,692		32,316,607

24. Subsequent event

The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent event is identified.

33 

Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion relates to the financial condition and results of operations of Highpower International, Inc. (the “Company”) and its wholly-owned subsidiary, Hong Kong Highpower Technology Company Limited (“HKHTC”), HKHTC’s wholly-owned subsidiaries Shenzhen Highpower Technology Company Limited (“SZ Highpower”), Icon Energy System Company Limited (“ICON”) and Highpower Energy Technology (Huizhou) Company limited (“HZ Highpower”), which has been dissolved in September, 2015; SZ Highpower’s wholly-owned subsidiary, Huizhou Highpower Technology Company Limited (“HZ HTC”) and its 70%-owned subsidiary Ganzhou Highpower Technology Company Limited (“GZ Highpower”); and SZ Highpower’s and HKHTC’s jointly owned subsidiary, Springpower Technology (Shenzhen) Company Limited (“SZ Springpower”).

Forward-Looking Statements

This management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes that are included in this Quarterly Report and the audited consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “Annual Report”).

This report contains forward-looking statements that involve substantial risks and uncertainties. All statements other than historical facts contained in this report, including statements regarding our future financial position, results of operations, cash flows, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “anticipates,” “believes,” “expects,” “plans,” “intends,” “seeks,” “estimates,” “projects,” “predicts,” “could,” “should,” “would,” “will,” “may,” “might,” and similar expressions, or the negative of such expressions, are intended to identify forward-looking statements. Such statements reflect management’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, economic downturn and uncertainty in Asia and Europe adversely affecting demand for our products; fluctuations in the cost of raw materials; our dependence on, or inability to attract additional, major customers for a significant portion of our net sales; our ability to increase manufacturing capabilities to satisfy orders from new customers; our ability to maintain increased margins; changes in the laws of the PRC that affect our operations; the devaluation of the U.S. Dollar relative to the Renminbi; our dependence on the growth in demand for portable electronic devices and the success of manufacturers of the end applications that use our battery products; our responsiveness to competitive market conditions; our ability to successfully manufacture our products in the time frame and amounts expected; the market acceptance of our battery products, including our lithium products; our ability to successfully develop products for and penetrate the electric transportation market; our ability to continue R&D development to keep up with technological changes; our exposure to product liability, safety, and defect claims; rising labor costs, volatile metal prices, and inflation; changes in foreign, political, social, business and economic conditions that affect our production capabilities or demand for our products; and various other matters, many of which are beyond our control. Actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated should one or more of these risks or uncertainties occur or if any of the risks or uncertainties described elsewhere in this report or in the “Risk Factors” section of our Annual Report occur. Consequently, all of the forward-looking statements made in this filing are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

Overview

Highpower was incorporated in the state of Delaware on January 3, 2006 and was originally organized as a “blank check” shell company to investigate and acquire a target company or business seeking the perceived advantages of being a publicly held corporation. On November 2, 2007, we closed a share exchange transaction, pursuant to which we (i) became the 100% parent of HKHTC and its wholly-owned subsidiary, SZ Highpower, (ii) assumed the operations of HKHTC and its subsidiary and (iii) changed our name to Hong Kong Highpower Technology, Inc. We subsequently changed our name to Highpower International, Inc. in October 2010.

HKHTC was incorporated in Hong Kong in 2003 under the Companies Ordinance of Hong Kong. HKHTC formed HZ Highpower and SZ Springpower in 2008. HZ Highpower has not yet commenced business operations as of August 12, 2014. On October 8, 2013, SZ Springpower further increased its registered capital to $15,000,000. SZ Highpower holds 69.97% of the equity interest of SZ Springpower, and HKHTC holds the remaining 30.03%. In February 2011, HKHTC formed another wholly-owned subsidiary, Icon Energy System Company Limited, a company organized under the laws of the PRC, which commenced operations in July 2011.

34 

SZ Highpower was founded in 2001 in the PRC. SZ Highpower formed GZ Highpower in September 2010. As of September 30, 2015, the paid-in capital of GZ Highpower was RMB40,000,000 ($6,530,825). SZ Highpower holds 70% of the equity interest of GZ Highpower, and the four founding management members of GZ Highpower hold the remaining 30%. SZ Highpower formed HZ HTC in March 2012, which engages in the manufacture of batteries.

Through SZ Highpower, we manufacture Nickel Metal Hydride (“Ni-MH”) batteries for both consumer and industrial applications. We have developed significant expertise in Ni-MH battery technology and large-scale manufacturing that enables us to improve the quality of our battery products, reduce costs, and keep pace with evolving industry standards. In 2008, we commenced manufacturing two lines of Lithium-Ion (“Li-ion”) and Lithium polymer rechargeable batteries through SZ Springpower for higher-end, high-performance applications, such as laptops, digital cameras and wireless communication products. Our automated machinery allows us to process key aspects of the manufacturing process to ensure high uniformity and precision, while leaving the non-key aspects of the manufacturing process to manual labor.

We employ a broad network of sales staff in China and Hong Kong, which target key customers by arranging in-person sales presentations and providing post-sale services. The sales staff works with our customers to better address customers’ needs.

Critical Accounting Policies, Estimates and Assumptions

The Securities and Exchange Commission (“SEC”) defines critical accounting policies as those that are, in management's view, most important to the portrayal of our financial condition and results of operations and those that require significant judgments and estimates.

The preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our estimates on historical experience, actuarial valuations and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Some of those judgments can be subjective and complex and, consequently, actual results may differ from these estimates under different assumptions or conditions. While for any given estimate or assumption made by our management there may be other estimates or assumptions that are reasonable, we believe that, given the current facts and circumstances, it is unlikely that applying any such other reasonable estimate or assumption would materially impact the financial statements. The accounting principles we utilized in preparing our consolidated financial statements conform in all material respects to U.S. generally accepted accounting principles (U.S.GAAP).

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, revenues; the allowance for doubtful receivables; recoverability of the carrying amount of inventory; fair values of financial instruments; and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

Accounts Receivable. Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. Bad debts are written off when identified. The Company extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Company does not accrue interest on trade accounts receivable.

35 

Revenue Recognition. The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of domestic sales contracts transfer title and risk of loss to customers upon receipt. The majority of oversea sales contracts transfer title and risk of loss to customers when goods were delivered to the carriers. Revenue is presented net of any sales tax and value added tax.

The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by the customer. We have no incentive programs.

Inventories. Inventories are stated at the lower of cost or market value. Costs are determined on a weighted-average method. Inventory includes raw materials, packing materials, work-in-process, consumables and finished goods. The variable production overhead is allocated to each unit of production on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities.

Income Taxes. The Company recognizes deferred assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Foreign Currency Translation and Transactions. Highpower International’s functional currency is the United States dollar (“US$”). HKHTC’s functional currency is the Hong Kong dollar (“HK$”). The functional currency of the Company’s subsidiaries in the PRC is the Renminbi (“RMB”).

At the date a foreign currency transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured initially in the functional currency of the recording entity by use of the exchange rate in effect at that date. The increase or decrease in expected functional currency cash flows upon settlement of a transaction resulting from a change in exchange rates between the functional currency and the currency in which the transaction is denominated is recognized as foreign currency transaction gain or loss that is included in determining net income for the period in which the exchange rate changes. At each balance sheet date, recorded balances that are denominated in a foreign currency are adjusted to reflect the current exchange rate.

The Company’s reporting currency is the US$. Assets and liabilities of HKHTC and the PRC subsidiaries are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

Results of Operations

The following table sets forth the consolidated statements of operations of the Company for the three and nine months ended September 30, 2015 and 2014, both in dollars and as a percentage of net sales.

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Consolidated Statements of Operations

(in thousands except share and per share information)

	Three months ended September 30,										Nine months ended September 30,
	2015					2014					2015					2014
Net Sales		37,557		100.0	%		44,474		100.0	%		108,330		100.0	%		111,770		100.0	%
Cost of Sales		(30,340	)	(80.8	)%		(35,069	)	(78.9	)%		(86,994	)	(80.3	)%		(88,704	)	(79.4	)%
Gross profit		7,217		19.2	%		9,405		21.1	%		21,336		19.7	%		23,066		20.6	%
Research and development expenses		(1,963	)	(5.2	)%		(2,056	)	(4.6	)%		(5,635	)	(5.2	)%		(5,845	)	(5.2	)%
Selling and distribution expenses		(1,713	)	(4.6	)%		(1,698	)	(3.8	)%		(5,109	)	(4.7	)%		(4,823	)	(4.3	)%
General and administrative expenses		(3,296	)	(8.8	)%		(3,295	)	(7.4	)%		(9,744	)	(9.0	)%		(10,179	)	(9.1	)%
Foreign currency transaction gain (loss)		1,458		3.9	%		(15	)	(0.03	)%		1,902		1.8	%		334		0.3	%
Gain (loss) on derivative instruments		-		-			60		0.1	%		-		-			(56	)	(0.1	)%
Income from operations		1,703		4.5	%		2,401		5.4	%		2,750		2.5	%		2,497		2.2	%
Gain (loss) on change of fair value of warrant liability		511		1.4	%		(1,286	)	(2.9	)%		942		0.9	%		(1,212	)	(1.1	)%
Other income		155		0.4	%		590		1.3	%		742		0.7	%		1,494		1.3	%
Interest expenses		(247	)	(0.7	)%		(459	)	(1.0	)%		(791	)	(0.7	)%		(1,528	)	(1.4	)%
Income before taxes		2,122		5.7	%		1,246		2.8	%		3,643		3.4	%		1,251		1.1	%
Income tax expenses		(271	)	(0.7	)%		(440	)	(1.0	)%		(194	)	(0.2	)%		(629	)	(0.6	)%
Net income		1,851		4.9	%		806		1.8	%		3,449		3.2	%		622		0.6	%
Less: net loss attributable to non-controlling interest		(92	)	(0.2	)%		(68	)	(0.2	)%		(238	)	(0.2	)%		(130	)	(0.1	)%
Net income attributable to the company		1,943		5.2	%		874		2.0	%		3,687		3.4	%		752		0.7	%
Income per share of common stock attributable to the Company
- Basic		0.13					0.06					0.24					0.05
- diluted		0.13					0.06					0.24					0.05
Weighted average number of common shares outstanding
- Basic		15,101,679					15,052,158					15,098,479					14,632,491
- diluted		15,148,887					15,590,142					15,367,542					15,045,776

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Three months ended September 30, 2015 and 2014

Net sales

We generate revenues from the sale of our Ni-MH batteries, Lithium batteries and new materials for three months ended September 30, 2015. Revenues by segment were as follows:

	Three months ended September 30,
	2015		2014
	(Unaudited)		(Unaudited)
	$		$
Net sales
Ni-MH Batteries		20,123,880		22,468,264
Lithium Batteries		16,964,109		21,069,435
New Materials		468,837		936,861
Total		37,556,826		44,474,560

Net sales for the three months ended September 30, 2015 were $37.6 million compared to $44.5 million for the three months ended September 30, 2014, a decrease of $6.9 million, or 15.6%.The decrease was due to a $4.1 million decrease in net sales of our lithium batteries (resulting from a 10.4 % decrease in the volume, measured in ampere hour, of batteries sold and a 10.1% decrease in the average selling price of such batteries), a $2.3 million decrease in net sales of our Ni-MH batteries (resulting from a 6.1% decrease in the number of Ni-MH battery units sold and a 4.6% decrease in the average selling price of such batteries) and a $50.0% decrease in revenue from our new material business.

Cost of sales

Our cost of goods sold is comprised of raw materials, labor cost (production-related workers), depreciation and amortization of production-related equipment, utilities consumption costs and overhead allocation. Cost of goods sold by segment was as follows:

	Three months ended September 30,
	2015		2014
	(Unaudited)		(Unaudited)
	$		$
Cost of Sales
Ni-MH Batteries		16,889,621		17,843,761
Lithium Batteries		12,888,378		16,355,265
New Materials		562,152		870,414
Total		30,340,151		35,069,440

Cost of sales mainly consists of nickel, cobalt, lithium derived materials, labor, and overhead. Costs of sales were $30.3 million for the three months ended September 30, 2015, as compared to $35.1 million for the comparable period in 2014. As a percentage of net sales, cost of sales increased to 80.8% for the three months ended September 30, 2015 compared to 78.9% for the comparable period in 2014.

Gross profit

Gross profit for the three months ended September 30, 2015 was $7.2 million, or 19.2% of net sales, compared to $9.4 million, or 21.1% of net sales for the comparable period in 2014. Management considers gross profit margin a key performance indicator in managing our business. Gross profit margins are usually a factor of cost of sales, product mix and demand for product. Gross profit of Ni-MH Batteries for the three months ended September 30, 2015 was 16.1% of net sales, compared to 20.6% of net sales for the comparable period in 2014, which was attribute to the decrease in average selling price. Gross profit of Lithium Batteries for the three months ended September 30, 2015 was 24%, which remains stable compared to the comparable period in 2014. The decrease of New Material gross profit margin was affected by the market price.

To cope with pressure on our gross margins we control production costs by preparing budgets for each department and comparing actual costs with our budgeted figures monthly and quarterly. Additionally, we have reorganized the Company’s production structure and have focused more attention on employee training to enhance efficiency. We also intend to expand our market share by investing in greater promotion of our products in regions such as the U.S., Russia, Europe and India, and by expanding our sales team with more experienced sales personnel. We have also begun production capacity expansion for our lithium batteries business to take advantage of the strong demand for such products globally.

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Research and development

Research and development expenses were $2.0 million, or 5.2% of net sales, for the three months ended September 30, 2015, as compared to $2.1 million, or 4.6% of net sales for the comparable period in 2014.

Selling and distribution expenses

Selling and distribution expenses were $1.7 million, or 4.6% of net sales, for the three months ended September 30, 2015 compared to $1.7 million, or 3.8% of net sales, for the comparable period in 2014, an increase of 0.9%. Although selling and distribution expenses are consistent for both periods, its percentage of net sales increased due to a decrease in net sales.

General and administrative expenses

General and administrative expenses were $3.3 million, or 8.8% of net sales, for the three months ended September 30, 2015, compared to $3.3 million, or 7.4% of net sales, for the comparable period in 2014.

Foreign currency transaction gain (loss)

We experienced a gain of $1.5 million for the three months ended September 30, 2015 and a loss of $15,369 for the three months ended September 30, 2014 on the exchange rate difference between the U.S. Dollar and the RMB. The gain in exchange rate difference was due to the depreciation of the RMB relative to the U.S. Dollar over the respective periods.

Loss/Gain on derivative instruments

We experienced no loss on derivative instruments for the three months ended September 30, 2015, as compared to a gain of $59,785 for the comparable period in 2014, which included a loss of $3,414 on settled currency forwards and a gain of $63,199 on unsettled currency forwards.

Interest expenses

Interest expenses were $246,563 for the three months ended September 30, 2015, as compared to $458,534 for the comparable period in 2014. The decrease in interest expense was due to a decrease in long-term borrowing of $2,028,725 comparing the balance as of September 30, 2015 with the comparable period in 2014.

Other income

Other income, which consists of bank interest income, government grants and sundry income, was approximately $154,904 for the three months ended September 30, 2015, as compared to approximately $590,117 for the comparable period in 2014, a decrease of $435,213.

Gain (loss) on fair value change of warrant liabilities

Gain on fair value change of warrant liabilities was $510,553 for the three months ended September 30, 2015, as compared to a loss of $1,286,335, for the comparable period in 2014. It represented the fair value change of 500,000 shares of warrants issued on April 17, 2014.

Income tax expense

During the three months ended September 30, 2015, we recorded provision for income tax expense of $270,622 as compared to income tax expense of $439,659 for the comparable period in 2014. The decrease of income tax expense was due to a decrease of income before tax from the subsidiaries within PRC.

39 

Net income

Net income attributable to the Company (excluding net loss attributable to non-controlling interest) for the three months ended September 30, 2015 was $1.9 million, compared to net income attributable to the Company (excluding net loss attributable to non-controlling interest) of $874,167 for the comparable period in 2014.

Nine Months Ended September 30, 2015 and 2014

Net sales

We generate revenues from the sale of our Ni-MH batteries, Lithium batteries and new materials. Revenues by segment were as follows:

	Nine months ended September 30,
	2015		2014
	(Unaudited)		(Unaudited)
	$		$
Net sales
Ni-MH Batteries		50,658,776		57,109,202
Lithium Batteries		55,851,039		51,971,642
New Materials		1,820,460		2,688,666
Total		108,330,275		111,769,510

Net sales for the nine months ended September 30, 2015 were $108.3 million compared to $111.8 million for the nine months ended September 30, 2014, a decrease of $3.4 million, or 3.1%. The decrease was due to a $6.5 million decrease in net sales of our Ni-MH batteries (resulting from a 6.1% decrease in the number of Ni-MH battery units sold and a 5.6% decrease in the average selling price of such batteries) and a $868,206 decrease in revenue from our new material business, which was offset by a $3.9 million increase in net sales of our lithium batteries (resulting from a 11.8% increase in the volume, measured in ampere hour, of batteries sold which was partly offset a 3.9% decrease in the average selling price of such batteries). The increase in the number of lithium batteries units sold in the nine months ended September 30, 2015 was primarily attributable growth in global demand for mobile and portable products, and electrical vehicles.

Cost of sales

Our cost of goods sold is comprised of raw materials, labor cost (production-related workers), depreciation and amortization of production-related equipment, utilities consumption costs and overhead allocation. Cost of goods sold by segment was as follows:

	Nine months ended September 30,
	2015		2014
	(Unaudited)		(Unaudited)
	$		$
Cost of Sales
Ni-MH Batteries		40,455,557		45,357,950
Lithium Batteries		44,528,861		40,935,690
New Materials		2,009,708		2,410,314
Total		86,994,126		88,703,954

Cost of sales mainly consists of nickel, cobalt, lithium derived materials, labor, and overhead. Costs of sales were $87.0 million for the nine months ended September 30, 2015, as compared to $88.7 million for the comparable period in 2014. As a percentage of net sales, cost of sales increased to 80.3% for the nine months ended September 30, 2015 compared to 79.4% for the comparable period in 2014.

40 

Gross profit

Gross profit for the nine months ended September 30, 2015 was $21.3 million, or 19.7% of net sales, compared to $23.1 million, or 20.6% of net sales for the comparable period in 2014. Management considers gross profit margin a key performance indicator in managing our business. Gross profit margins are usually a factor of cost of sales, product mix and demand for product. The gross profit of Ni-MH Batteries and Lithium Batteries for the nine months ended September 30, 2015 decreased slightly, which was attributable to decrease in the average selling price of such batteries. The decrease of gross profit of New material was affected by the market price.

To cope with pressure on our gross margins we control production costs by preparing budgets for each department and comparing actual costs with our budgeted figures monthly and quarterly. Additionally, we have reorganized the Company’s production structure and have focused more attention on employee training to enhance efficiency. We also intend to expand our market share by investing in greater promotion of our products in regions such as the U.S., Russia, Europe and India, and by expanding our sales team with more experienced sales personnel. We have also begun production capacity expansion for our lithium batteries business to take advantage of the strong demand for such products globally.

Research and development

Research and development expenses were approximately $5.6 million, or 5.2% of net sales, for the nine months ended September 30, 2015 as compared to approximately $5.8 million, or 5.2% of net sales, for the comparable period in 2014.

Selling and distribution expenses

Selling and distribution expenses were $5.1 million, or 4.7% of net sales, for the nine months ended September 30, 2015 compared to $4.8 million, or 4.3% of net sales, for the comparable period in 2014, an increase of 5.9%. Selling and distribution expenses increased due to the expansion of our sales force and marketing activities, participation in industry trade shows, and international travel to promote and sell our products globally.

General and administrative expenses

General and administrative expenses were $9.7 million, or 9.0%of net sales, for the nine months ended September 30, 2015, compared to $10.2 million, or 9.1% of net sales, for the comparable period in 2014. The primary reason for the decrease was due to non-cash share-based compensation expense of $535,761, down from $1.1 million in the first three quarters of 2014.

Foreign currency transaction gain

We experienced a gain of $1.9 million for the nine months ended September 30, 2015 and a gain of $334,326 for the nine months ended September 30, 2014 on the exchange rate difference between the U.S. Dollar and the RMB. The gain in exchange rate difference was due to the depreciation of the RMB relative to the U.S. Dollar over the respective periods.

Loss (gain) on derivative instruments

We experienced no loss on derivative instruments for the nine months ended September 30, 2015, as compared to a loss of $56,349 for the comparable period in 2014, which included a gain of $11,400 on settled currency forwards and a loss of $67,749 on unsettled currency forwards.

Interest expenses

Interest expenses were $790,681 for the nine months ended September 30, 2015, as compared to $1.5 million for the comparable period in 2014. The decrease in interest expense was due to a decrease in long-term borrowing of $2,028,725 comparing the balance as of September 30, 2015 with the comparable period in 2014.

41 

Other income

Other income, which consists of bank interest income, government grants and sundry income, was approximately $742,051 for the nine months ended September 30, 2015, as compared to approximately $1.5 million for the comparable period in 2014, a decrease of $751,440. The decrease was due to a decrease of $546,146 in bank interest income.

Gain (loss) on fair value change of warrant liabilities

Gain on fair value change of warrant liabilities was $941,685 for the nine months ended September 30, 2015, as compared to a loss of $1.2 million for the nine months ended September 30, 2014. It represented the fair value change of 500,000 shares of warrants issued on April 17, 2014.

Income tax expense

During the nine months ended September 30, 2015, we recorded provision for income tax expenses of $194,206 as compared to income tax expense of $628,872 for the comparable period in 2014. The decrease of income tax expense was due to an increase of R&D cost deduction.

Net income

Net income attributable to the Company (excluding net loss attributable to non-controlling interest) for the nine months ended September 30, 2015 was $3.7 million, compared to net income attributable to the Company (excluding net loss attributable to non-controlling interest) of $751,516 for the comparable period in 2014.

42 

Foreign Currency and Exchange Risk

Though the reporting currency is the US$, the Company maintains its financial records in the functional currency of Renminbi (“RMB”). Substantially all of our operations are conducted in the PRC and we pay the majority of our expenses in RMB. Approximately 60% of our sales are made in U.S. Dollars. During the nine months ended September 30, 2015, the exchange rate of the RMB to the U.S. Dollar devaluated 3.7% from the level at the end of December 31, 2014. Future appreciation of the RMB against the U.S. Dollar would increase our costs when translated into U.S. Dollars and could adversely affect our margins unless we make sufficient offsetting sales. Conversion of RMB into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system. Although the PRC government has stated its intention to support the value of the RMB, there can be no assurance that such exchange rate will not continue to appreciate significantly against the U.S. Dollar. Exchange rate fluctuations may also affect the value, in U.S. Dollar terms, of our net assets. In addition, the RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. Due to the volatility of the US Dollar to our functional currency the Company put into place a hedging program to attempt to protect it from significant changes to the US Dollar which affects the value of its US dollar receivables and sales.

Liquidity and Capital Resources

We had cash and cash equivalents of approximately $7.9 million as of September 30, 2015, as compared to $14.6 million as of December 31, 2014. Our funds are kept in financial institutions located in the PRC, which do not provide insurance for amounts on deposit. Moreover, we are subject to the regulations of the PRC which restrict the transfer of cash from the PRC, except under certain specific circumstances. Accordingly, such funds may not be readily available to us to satisfy obligations incurred outside the PRC.

To provide liquidity and flexibility in funding our operations, we borrowed amounts under bank facilities and other external sources of financing. As of September 30, 2015, we had in place general banking facilities with seven financial institutions aggregating $63.0 million. The maturity of these facilities is generally within one year. The facilities are subject to regular review and approval. Certain of these banking facilities are guaranteed by our Chief Executive Officer, Mr. Dang Yu Pan, and contain customary affirmative and negative covenants for secured credit facilities of this type. Interest rates are generally based on the banks’ reference lending rates. No significant commitment fees are required to be paid for the banking facilities. As of September 30, 2015, we had utilized approximately $35.8 million under such general credit facilities and had available unused credit facilities of $27.2 million.

For the nine months ended September 30, 2015, net cash used in operating activities was approximately $6.1 million, as compared to $11.8 million provided by operating activities for the comparable period in 2014. The net cash decrease of $17.9 million used in operating activities is primarily attributable to, among other items, an increase of $16.9 million in cash outflow from accounts payable, an increase of $1.6 million in outflow from prepayment.

Net cash used in investing activities was $7.3 million for the nine months ended September 30, 2015 compared to $5.9 million for the comparable period in 2014. The net increase of $1.4 million of cash used in investing activities was primarily attributable to an increase in cash outflow from acquisition of plant and equipment for increase Auto-equipment.

Net cash provided by financing activities was $7.2 million during the nine months ended September 30, 2015, as compared to $2.1 million used in financing activities for the comparable period in 2014. The net increase of $9.3 million in net cash provided by financing activities was primarily attributable to an increase of $25.0 million in repayment of short-term bank loans, which was partly offset by a decrease of $11.3 million in repayment of notes payable, a decrease of $4.5 million in proceed s from short-term bank loan.

For the nine months ended September 30, 2015 and 2014, our inventory turnover was 5.2 times and 5.9 times, respectively. The average days outstanding of our accounts receivable at September 30, 2015 was 85 days, as compared to 87 days at September 30, 2014. Inventory turnover and average days outstanding are key operating measures that management relies on to monitor our business. In the next 12 months, we expect to expand our research, development and manufacturing of lithium-based batteries and anticipate additional capital expenditures.

43 

We are required to contribute a portion of our employees’ total salaries to the Chinese government’s social insurance funds, including medical insurance, unemployment insurance and job injuries insurance, and a housing assistance fund, in accordance with relevant regulations. Total contributions to the funds were approximately $524,083 and $424,841 for the three months ended September 30, 2015 and 2014, respectively, and $1,350,972 and $1,128,544 in the nine months ended September 30, 2015 and 2014, respectively. We expect the amount of our contribution to the government’s social insurance funds to increase in the future as we expand our workforce and operations.

Based upon our present plans, we believe that cash on hand, cash flow from operations and funds available under our bank facilities will be sufficient to meet our capital needs for the next 12 months. However, our ability to maintain sufficient liquidity depends partially on our ability to achieve anticipated levels of revenue, while continuing to control costs. If we did not have sufficient available cash, we would have to seek additional debt or equity financing through other external sources, which may not be available on acceptable terms, or at all. Failure to maintain financing arrangements on acceptable terms would have a material adverse effect on our business, results of operations and financial condition.

The use of working capital is primarily for the maintenance of our accounts receivable and inventory. We provide our major customers with payment terms ranging from 30 to 90 days. Additionally, our production lead time is approximately 30 to 40 days, from the inspection of incoming materials, to production, testing and packaging. We need to keep a large supply of raw materials, work-in-process and finished goods inventory on hand to ensure timely delivery of our products to customers. We use two methods to support our working capital needs: (i) paying our suppliers under payment terms ranging from 60 to 150 days; and (ii) using short-term bank loans. Upon receiving payment for our accounts receivable, we pay our short-term loans. Our working capital management practices are designed to ensure that we maintain sufficient working capital.

Recent Accounting Pronouncements

The FASB has issued ASU No. 2015-01 Income Statement-Extraordinary and Unusual Items through ASU No. 2015-16 Business Combinations, which are not expected to have a material impact on the consolidated financial statements upon adoption.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures”, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended(the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosure.

Based on an evaluation carried out as of the end of the period covered by this quarterly report, under the supervision and with the participation of our management, including our CEO and CFO, who have concluded that, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of September 30, 2015.

44 

Changes in Internal Control over Financial Reporting

Based on the evaluation of our management as required by paragraph (d) of Rule 13a-15 of the Exchange Act, there were no changes in our internal control over financial reporting that occurred during our quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Any investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described herein and in our Annual Report on Form 10-K as filed with the SEC on March 30, 2015 and all of the information contained in our public filings before deciding whether to purchase our common stock. Other than as set forth below, there have been no material revisions to the “Risk Factors” as set forth in our Annual Report on Form 10-K.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

None.

Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

Credit Line Contract between SZ Springpower and Bank of China, Buji Sub-branch

On July 1, 2015, SZ Springpower entered into a comprehensive credit line contract with Bank of China, Buji Sub-branch, which provides for a revolving line of credit of up to RMB72,857,143 (US$11,472,662), consisting of up to RMB30,000,000 (US$4,724,037) in loans and up to RMB42,857,143 (US$6,748,625) in bank acceptances. SZ Springpower may withdraw the loan, from time to time as needed, but must make specific drawdown application on and before June 30, 2016. SZ Springpower’s loan is guaranteed by SZ Highpower, HZ HTC and our Chief Executive Officer, Dang Yu Pan. The Company’s buildings and a land use right in Ganzhou also serve as collateral for the loan.

The following constitute events of default by SZ Springpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines; failure to use borrowed funds according to the specified purposes; any statement made by SZ Springpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; violation of other rights and obligations under the agreement; or breach of covenants by SZ Springpower or any guarantor in other credit agreements with the bank or affiliated institutions of the bank.

45 

Upon the occurrence of an event of default, the bank may: request SZ Springpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Springpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Springpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the agreement and affiliated specific credit line contracts; terminate or release the agreement, terminate or release in part or in whole any of the affiliated specific credit line contracts as well as the other contracts executed between SZ Springpower and the bank; request compensation from SZ Springpower on the losses thereafter caused; hold SZ Springpower’s deposit account at the bank in custody for repayment of amounts due under the agreement; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

Credit Line Contract between SZ Highpower and Bank of China, Buji Sub-branch

On July 13, 2015, SZ Highpower entered into a comprehensive credit line contract with Bank of China, Buji Sub-branch, which provides for a revolving line of credit of up to RMB89,500,000 (US$14,093,378), consisting of up to RMB40,000,000 (US$6,298,717) in loans, up to RMB12,000,000 (US$1,889,615) in trade financing and up to RMB37,500,000 (US$5,905,047) in bank acceptances. SZ Highpower may withdraw the loan, from time to time as needed, but must make specific drawdown application on and before September 13, 2016. SZ Highpower’s loan is guaranteed by SZ Springpower and our Chief Executive Officer, Dang Yu Pan. The Company’s buildings and a land use right in Huizhou also serve as collateral for the loan.

The following constitute events of default by SZ Highpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines; failure to use borrowed funds according to the specified purposes; any statement made by SZ Highpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; violation of other rights and obligations under the agreement; or breach of covenants by SZ Highpower or any guarantor in other credit agreements with the bank or affiliated institutions of the bank.

Upon the occurrence of an event of default, the bank may: request SZ Highpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Highpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Highpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the agreement and affiliated specific credit line contracts; terminate or release the agreement, terminate or release in part or in whole any of the affiliated specific credit line contracts as well as the other contracts executed between SZ Highpower and the bank; request compensation from SZ Highpower on the losses thereafter caused; hold SZ Highpower’s deposit account at the bank in custody for repayment of amounts due under the agreement; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

Working Capital Loan Contract between SZ Springpower and Bank of China, Buji Sub-branch

On July 14, 2015, SZ Springpower entered into a working capital loan contract with Bank of China, Buji Sub-branch providing for an aggregate loan of RMB20,000,000 (US$3,149,358) to be used by SZ Springpower to purchase raw materials. The term of the loan is 12 months from the first withdrawal date. SZ Springpower must withdraw in 30 days from July 14, 2015, after which time the bank may cancel all or part of the facility. The interest rate will float and adjust every 12 months. Upon the first withdraw and during the first floating period, the interest rate will equal the one year benchmark lending rate promulgated by the People’s Bank of China, plus 1.2625%. The loan is guaranteed by SZ Highpower, HZ HTC, our Chief Executive Officer, Dang Yu Pan and. The Company’s buildings and a land use right in Ganzhou also serve as collateral for the loan.

The following constitute events of default by SZ Springpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines contract; failure to use borrowed funds according to the specified purposes; any statement made by SZ Springpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; breach of covenants in other credit agreements with the bank or affiliated institutions of the bank; any guarantor breaches a contract or defaults under any agreement with the bank or affiliated institutions of the bank; termination of its business or engagement due to any wind-up, cancellation or bankruptcy issues; involvement or potential involvement in significant economic disputes, litigation, arbitration or assets seizure or confiscation, or its involvement in other judicial proceedings or administrative punishment proceedings that have affected or may affect its capacity to perform its obligations under the affiliated specific credit line contract; an abnormal change in any major individual investor or key management member of SZ Springpower or such a person or entity’s becoming subject to investigation or restriction by the judiciary, which have or may affect SZ Springpower’s performance of obligation under affiliated specific credit line contract; Bank of China’s discovery of any situation that may affect the financial position or performance capacities of SZ Springpower or a guarantor after the bank’s annual review of SZ Springpower’s financial position and performance; failure to provide the relevant documentation acceptable to Bank of China about the inflows and outflows of large-sum and abnormal capital in capital recovery account; or being in violation of other rights and obligations under the affiliated specific credit line contract.

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Upon the occurrence of an event of default, the bank may: request SZ Springpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Springpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Springpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the affiliated specific credit line contract as well as other contracts; terminate or release the contract, terminate or release in part or in whole any of the affiliated specific credit line contract as well as the other contracts executed between SZ Springpower and the bank; request compensation from SZ Springpower on the losses thereafter caused; hold SZ Springpower’s deposit account at the bank in custody for repayment of amounts due under the contract; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

Credit Line Contract between SZ Springpower and Industrial Bank Co., Ltd. Longgang, Shenzhen branch

On July 15, 2015, SZ Springpower entered into a comprehensive credit line contract with Industrial Bank Co., Ltd., Longgang Shenzhen Sub-branch, which provides for a revolving line of credit of up to RMB60,000,000 (US$9,448,075). Up to RMB10,000,000 (US$1,574,679) may be used for a working capital, up to RMB60,000,000 (US$9,448,075) may be used for bank acceptance and up to RMB10,000,000 (US$1,574,679) may be used for export loan under mortgage of documents, although the maximum amount that the company may have outstanding under the facility at any given time is RMB60 million. SZ Springpower may withdraw the loan, from time to time as needed, but must make a specific drawdown application on or before July 15, 2016, after which time the bank may cancel all or part of the facilities. The loan is guaranteed by SZ Highpower and our Chief Executive Officer, Dang Yu Pan.

The following constitute events of default under the loan contract: any information provided by or representation or warranty made by SZ Springpower proves to have been untrue, inaccurate, incomplete or misleading; a deterioration or obvious weakening of SZ Springpower’s credit standing or ability to repay the loan; a cross default under certain agreements involving SZ Springpower or a guarantor, or their related parties; SZ Springpower’s violation of any obligations in an affiliated specific credit line contract; SZ Springpower’s failure to timely repay the principal, interest and fees under the contract and any specific contract; SZ Springpower’s suspension of payment, or failure or indication that it is unable to repay, the debt due; SZ Springpower’s termination of its business, liquidation, bankruptcy, dissolution, or revocation or cancellation of it business permit ; SZ Springpower’s involvement in a major business dispute or deteriorated financial situation; or the emergence of any other situation that endanger, damage, or may endanger, damage the bank’s rights and benefits.

Upon the occurrence of an event of default under the CCL Agreement, the bank may: temporarily suspend or permanently terminate SZ Springpower’s credit limit in whole or in part; announce the immediate expiration of all or part of the debts under the contract; terminate the contract and declare all amounts outstanding under the contract immediately due and payable; request overdue interest from SZ Springpower caused by the default; request penalty interest; or request compensation in full from SZ Springpower for the breach.

Credit Line Contract between SZ Highpower and China Minsheng Banking Co., Ltd. Shenzhen Branch

On July 16, 2015, SZ Highpower entered into a comprehensive credit line contract with China Minsheng Banking Co., Ltd. Shenzhen Branch, which provides for a revolving line of credit of up to RMB28,571,429 (US$4,499,083). The amount may be used for bank acceptance and bank guarantee, although the maximum amount that the company may have outstanding under the facility at any given time is RMB28,571,429. SZ Highpower may withdraw from each loan, from time to time as needed, but must make a specific drawdown application on or before July 16, 2016, after which time the bank may cancel all or part of the facilities. The loan is guaranteed by SZ Springpower, HZ HTC and our Chief Executive Officer, Dang Yu Pan.

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The following constitute events of default by SZ Highpower under the loan agreement: the occurrence of significant business difficulties or adverse changes on the financial conditions of SZ Highpower; an adverse change in the SZ Highpower’s business market; any major adjustment of relevant national policies; SZ Highpower violates any other contract or agreement concluded with others, or any commitment or warranty unilaterally made by SZ Highpower, which constitutes breach of other debts or other debts have been or may be announced acceleration by other creditor; the guarantor’s guarantee capacity becomes obviously insufficient, or the guarantor violates the guarantee contract or any obligation specified in the commitments made by the guarantor; any pledged or mortgaged property is damaged or lost, and SZ Highpower fails to provide a new guarantee as required by the bank; SZ Highpower indicates directly or by its conduct that it will not perform its obligations under the contract or other specified contracts with the bank; SZ Highpower’s providing false information or withholding of important financial facts (including balance sheet, profit and loss statement and other important materials), or refusal to accept the bank’s supervision of the use of the loan and the company’s operational and financial activities; SZ Highpower transfers its assets, withdraws funds, evades debts or has any other behavior which damages the bank’s rights and interest; SZ Highpower’s suffering major change in financial conditions, or involving in litigation, arbitration, administrative punishment or other judicial administrative proceedings, which may have adverse impact the execution of the contract; or any adversely affect SZ Highpower’s ability to perform its obligations under the loan facility.

Upon the occurrence of an event of default under the CCL Agreement, the bank may adjust or cancel a credit line, and demand SZ Highpower to prepay all the borrowings having been withdrawn under the contract.

Working Capital Loan Contract between SZ Highpower and Bank of China, Buji Sub-branch

On August 26, 2015, SZ Highpower entered into a working capital loan contract with Bank of China, Buji Sub-branch providing for an aggregate loan of RMB20,000,000 (US$3,149,358) to be used by SZ Highpower to purchase raw materials. The term of the loan is 12 months from the first withdrawal date. SZ Highpower must withdraw in 30 days from August 26, 2015, after which time the bank may cancel all or part of the facility. The interest rate will float and adjust every 12 months. Upon the first withdraw and during the first floating period, the interest rate will equal the one year benchmark lending rate promulgated by the People’s Bank of China, plus 1.2%. The loan is guaranteed by SZ Springpower and our Chief Executive Officer, Dang Yu Pan. The Company’s buildings and a land use right in Huizhou also serve as collateral for the loan.

The following constitute events of default by SZ Highpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines contract; failure to use borrowed funds according to the specified purposes; any statement made by SZ Highpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; breach of covenants in other credit agreements with the bank or affiliated institutions of the bank; any guarantor breaches a contract or defaults under any agreement with the bank or affiliated institutions of the bank; termination of its business or engagement due to any wind-up, cancellation or bankruptcy issues; involvement or potential involvement in significant economic disputes, litigation, arbitration or assets seizure or confiscation, or its involvement in other judicial proceedings or administrative punishment proceedings that have affected or may affect its capacity to perform its obligations under the affiliated specific credit line contract; an abnormal change in any major individual investor or key management member of SZ Highpower or such a person or entity’s becoming subject to investigation or restriction by the judiciary, which have or may affect SZ Highpower’s performance of obligation under affiliated specific credit line contract; Bank of China’s discovery of any situation that may affect the financial position or performance capacities of SZ Highpower or a guarantor after the bank’s annual review of SZ Highpower’s financial position and performance; failure to provide the relevant documentation acceptable to Bank of China about the inflows and outflows of large-sum and abnormal capital in capital recovery account; or being in violation of other rights and obligations under the affiliated specific credit line contract.

Upon the occurrence of an event of default, the bank may: request SZ Highpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Highpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Highpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the affiliated specific credit line contract as well as other contracts; terminate or release the contract, terminate or release in part or in whole any of the affiliated specific credit line contract as well as the other contracts executed between SZ Highpower and the bank; request compensation from SZ Highpower on the losses thereafter caused; hold SZ Highpower’s deposit account at the bank in custody for repayment of amounts due under the contract; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

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Working Capital Loan Contract between SZ Springpower and Bank of China, Buji Sub-branch

On September 17, 2015, SZ Springpower entered into a working capital loan contract with Bank of China, Buji Sub-branch providing for an aggregate loan of RMB10,000,000 (US$1,574,679) to be used by SZ Springpower to purchase raw materials. The term of the loan is 12 months from the first withdrawal date. SZ Springpower must withdraw in 30 days from September 17, 2015, after which time the bank may cancel all or part of the facility. The interest rate will float and adjust every 12 months. Upon the first withdraw and during the first floating period, the interest rate will equal the one year benchmark lending rate promulgated by the People’s Bank of China, plus 1.2%. The loan is guaranteed by SZ Highpower, HZ HTC, our Chief Executive Officer, Dang Yu Pan. The Company’s buildings and a land use right in Ganzhou also serve as collateral for the loan.

The following constitute events of default by SZ Springpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines contract; failure to use borrowed funds according to the specified purposes; any statement made by SZ Springpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; breach of covenants in other credit agreements with the bank or affiliated institutions of the bank; any guarantor breaches a contract or defaults under any agreement with the bank or affiliated institutions of the bank; termination of its business or engagement due to any wind-up, cancellation or bankruptcy issues; involvement or potential involvement in significant economic disputes, litigation, arbitration or assets seizure or confiscation, or its involvement in other judicial proceedings or administrative punishment proceedings that have affected or may affect its capacity to perform its obligations under the affiliated specific credit line contract; an abnormal change in any major individual investor or key management member of SZ Springpower or such a person or entity’s becoming subject to investigation or restriction by the judiciary, which have or may affect SZ Springpower’s performance of obligation under affiliated specific credit line contract; Bank of China’s discovery of any situation that may affect the financial position or performance capacities of SZ Springpower or a guarantor after the bank’s annual review of SZ Springpower’s financial position and performance; failure to provide the relevant documentation acceptable to Bank of China about the inflows and outflows of large-sum and abnormal capital in capital recovery account; or being in violation of other rights and obligations under the affiliated specific credit line contract.

Upon the occurrence of an event of default, the bank may: request SZ Springpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Springpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Springpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the affiliated specific credit line contract as well as other contracts; terminate or release the contract, terminate or release in part or in whole any of the affiliated specific credit line contract as well as the other contracts executed between SZ Springpower and the bank; request compensation from SZ Springpower on the losses thereafter caused; hold SZ Springpower’s deposit account at the bank in custody for repayment of amounts due under the contract; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

Working Capital Loan Contract between SZ Highpower and Bank of China, Buji Sub-branch

On September 17, 2015, SZ Highpower entered into a working capital loan contract with Bank of China, Buji Sub-branch providing for an aggregate loan of RMB20,000,000 (US$3,149,358) to be used by SZ Highpower to purchase raw materials. The term of the loan is 12 months from the first withdrawal date. SZ Highpower must withdraw in 30 days from September 17, 2015, after which time the bank may cancel all or part of the facility. The interest rate will float and adjust every 12 months. Upon the first withdraw and during the first floating period, the interest rate will equal the one year benchmark lending rate promulgated by the People’s Bank of China, plus 1.2%. The loan is guaranteed by SZ Springpower and our Chief Executive Officer, Dang Yu Pan. The Company’s buildings and a land use right in Huizhou also serve as collateral for the loan.

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The following constitute events of default by SZ Highpower under the loan agreement: failure to comply with repayment obligations under the agreement or any affiliated credit lines contract; failure to use borrowed funds according to the specified purposes; any statement made by SZ Highpower in the agreement is untrue or in violation of any commitments in the loan agreement or affiliated loan contracts; failure to provide an additional guarantor as required by the loan agreement; significant business difficulties or risks, deteriorated financial losses or losses of assets, or other financial crisis; breach of covenants in other credit agreements with the bank or affiliated institutions of the bank; any guarantor breaches a contract or defaults under any agreement with the bank or affiliated institutions of the bank; termination of its business or engagement due to any wind-up, cancellation or bankruptcy issues; involvement or potential involvement in significant economic disputes, litigation, arbitration or assets seizure or confiscation, or its involvement in other judicial proceedings or administrative punishment proceedings that have affected or may affect its capacity to perform its obligations under the affiliated specific credit line contract; an abnormal change in any major individual investor or key management member of SZ Highpower or such a person or entity’s becoming subject to investigation or restriction by the judiciary, which have or may affect SZ Highpower’s performance of obligation under affiliated specific credit line contract; Bank of China’s discovery of any situation that may affect the financial position or performance capacities of SZ Highpower or a guarantor after the bank’s annual review of SZ Highpower’s financial position and performance; failure to provide the relevant documentation acceptable to Bank of China about the inflows and outflows of large-sum and abnormal capital in capital recovery account; or being in violation of other rights and obligations under the affiliated specific credit line contract.

Upon the occurrence of an event of default, the bank may: request SZ Highpower or any guarantor to rectify the event of default within a specified time period; reduce, temporarily suspend or permanently terminate SZ Highpower’s credit limit in whole or in part; temporarily suspend or permanently terminate in part or in whole SZ Highpower’s application for specific credit line under the agreement; announce the immediate expiration of all the credit lines granted under the affiliated specific credit line contract as well as other contracts; terminate or release the contract, terminate or release in part or in whole any of the affiliated specific credit line contract as well as the other contracts executed between SZ Highpower and the bank; request compensation from SZ Highpower on the losses thereafter caused; hold SZ Highpower’s deposit account at the bank in custody for repayment of amounts due under the contract; exercise the real rights for security; request repayment from a guarantor; or take any other procedures deemed necessary by the bank.

Item 6. Exhibits

Exhibit Number	Description of Document
10.1	Comprehensive Credit Line Contract dated July 1, 2015 by and between Bank of China, Buji Sub-branch and Springpower Technology (Shenzhen) Company Limited (translated to English).
10.1(a)	Maximum Guarantee Contract dated July 1, 2015 by and between Bank of China, Buji Sub-branch and Shenzhen Highpower Technology (Shenzhen) Co., Ltd (translated to English).
10.1(b)	Maximum Guarantee Contract dated July 1, 2015 by and between Bank of China, Buji Sub-branch and Huizhou Highpower Technology (Shenzhen) Co., Ltd (translated to English).
10.1(c)	Maximum Guarantee Contract dated July 1, 2015 by and between Bank of China, Buji Sub-branch and Pan Dangyu (translated to English).
10.1(d)	Collateral Contract dated July 1, 2015 by and between Bank of China, Buji- Sub-branch and Ganzhou Highpower Technology Co., Ltd (translated to English).
10.2	Comprehensive Credit Line Contract dated July 13, 2015 by and between Bank of China, Buji Sub-branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.2(a)	Maximum Guarantee Contract dated July 13, 2015 by and between Bank of China, Buji Sub-branch and Springpower Technology (Shenzhen) Company Limited (translated to English).

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10.2(b)		Maximum Guarantee Contract dated July 13, 2015 by and between Bank of China, Buji Sub-branch and Pan Dangyu (translated to English).
10.2(c)		Collateral Contract about buildings in Huizhou dated July 13, 2015 by and between Bank of China, Buji- Sub-branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.2(d)		Collateral Contract about a land use right in Huizhou dated July 13, 2015 by and between Bank of China, Buji- Sub-branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.3		Working Capital Loan Contract dated July 14, 2015 by and between Bank of China, Buji Sub-branch and Springpower Technology (Shenzhen) Company Limited (translated to English).
10.4		Basic Credit Line Contract dated July 15, 2015 by and between Industrial Bank Co., Ltd., Longgang, Shenzhen Branch and Springpower Technology (Shenzhen) Company Limited (translated to English).
10.4(a)		Maximum Guarantee Contract dated July 15, 2015 by and between Industrial Bank Co., Ltd., Longgang, Shenzhen Branch and Pan Dangyu (translated to English).
10.4(b)		Maximum Guarantee Contract dated July 15, 2015 by and between Industrial Bank Co., Ltd., Longgang, Shenzhen Branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.5		Comprehensive Credit Line Contract dated July 16, 2015 by and between China Minsheng Banking Co., Ltd. Shenzhen Branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.5(a)		Maximum Guarantee Contract dated July 16, 2015 by and between China Minsheng Banking Co., Ltd. Shenzhen Branch and Springpower Technology (Shenzhen) Company Limited (translated to English).
10.5(b)		Maximum Guarantee Contract dated July 16, 2015 by and between China Minsheng Banking Co., Ltd. Shenzhen Branch and Pan Dangyu (translated to English).
10.5(c)		Maximum Guarantee Contract dated July 16, 2015 by and between China Minsheng Banking Co., Ltd. Shenzhen Branch and Huizhou Highpower Technology Co., Ltd (translated to English).
10.6		Working Capital Loan Contract dated August 26, 2015 by and between Bank of China, Buji Sub-branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
10.7		Working Capital Loan Contract dated September 17, 2015 by and between Bank of China, Buji Sub-branch and Springpower Technology (Shenzhen) Company Limited (translated to English).
10.8		Working Capital Loan Contract dated September 17, 2015 by and between Bank of China, Buji Sub-branch and Shenzhen Highpower Technology Co., Ltd (translated to English).
31.1		Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

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101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

** This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

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HIGHPOWER INTERNATIONAL, INC.

SIGNATURES

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, thereunto duly authorized.

	Highpower International, Inc.
Dated: November 16, 2015		/s/ Dang Yu Pan
	By:	Dang Yu Pan
	Its:	Chairman of the Board and Chief Executive Officer (principal executive officer and duly authorized officer)
		/s/ Henry Sun
	By:	Henry Sun
	Its:	Chief Financial Officer (principal financial and accounting officer)

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EX-10.1

Exhibit 10.1

Comprehensive Credit Line Contract

Reference No. : 2015zhenzhongyinbuexiezi No.0000466

Party A: Springpower Technology (Shenzhen) Co., Ltd

Business Licences: 440306503295562

Legal Representative: Dangyu Pan

Address: Factory A, Chaoshun Industrial Zone, Renmin Road, Fumin Residential Area, Guanlan, BaoAn District,

Postal code: 518000

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen, Telephone: 2802 9923 ; Facsimile: 2802 9923

Party B: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

The parties agree as follow.

Clause 1 Scope of Business

Satisfied by condition precedent defined in this contract, Party A is allowed to apply for recurring, temporary or one-off credit line from Party B in the form of a short-term loan, deposit account overdraft, bank acceptance, trade finance, bank guarantee, or other monetary financing or credit authorization business (“Specific credit line business”).

The trade finance business under this contract is included and limited to: international letter of credit, domestic letter of credit, import bill advance, shipping guarantee, packing credit, export bill purchase, export bill discount, import bill advance under LC, negotiation credit and other international and domestic trade finance business.

The bank guarantee business under this contract is including bank guarantee, standby letter of credit and all sorts of bank guarantee business.

Clause 2 Types and amount of credit line

Party B agrees to offer the following:

Currency in:	Renminbi
Amount:	Renmibi Sixty millions
	RMB  60,000,000.00
Types:	1. Loans : RMB30,000,000.00
	2. Bank Acceptances: RMB30,000,000.00

Clause 3 Usage of credit lines

1. Within the credit line period, under the agreed upper limits on each type of credit line, Party A can use the credit line recurrently. If Party A needs to apply for the one-off credit line, a written application is required. And both parties should agree that Party B has the final say on whether and how the one-off credit line will be granted. Party B will notify Party A in written once the decision is made.

2. This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract

3. Unless otherwise agreed, the following business will not occupy the credit line under this contract.

1) Export bill purchase business with precisely matched bills, documents and certificates

2) Outwards letters of credit, bank guarantee and trade finance business which Party B agreed to act as confirming bank.

3) Any credit line business which guaranteed by Party A by deposits, government bonds, deposit certificates issued by Party B, bank acceptance, guarantee or standby letters of credit accepted by Party B

4) Any other business agreed by both parties.

The above defined businesses, although they will not occupy the credit limits under this contract, they will still be considered as inseparable part of the contract.

Clause 4 Application of specific credit line business

Written applications or separate contracts are required from Party A to apply for a specific credit line.

Clause 5 Period

The credit line defined in clause 2 under this contract will be started from the effective date and end on June 30, 2016.

Upon negotiation, both parties can extend the contract period by signing supplementary contracts. Party B will continue to provide credit lines under supplementary contracts. All terms and conditions under this contract have the equivalent legal effects and restrictions on the supplementary contracts.

The termination of a specific credit line will only occur when all the rights and obligations are fulfilled. The above period has no limitation on specific credit line under this contract.

Clause 6 Condition Precedents of specific credit line business

Party A should fulfill the following conditions precedent before applying for a specific credit line business

1) File the necessary documents, stamps and signatures in Party B in relating to this contract and all the specific credit line contract under this contracts

2) Open the necessary bank account

3) Make sure the required guarantee contracts are properly in place

4) Other conditions precedent required for specific credit line contracts

5) Other conditions precedent required by Party B

Clause 7 Guaranty

For all the liabilities occurred under this contract and the specific credit line contract affiliated to this contract should be guaranteed by the following:

Maximum Amount Guarantee provided by:

1) Shenzhen Highpower Technology Co. Ltd, a guarantee contract is signed separately;

2) Huizhou Highpower Technology Co. Ltd, a guarantee contract is signed separately;

3) Dangyu Pan, a guarantee contract is signed separately;

Collateral on the Maximum Amount

1) The collateral is provided by Ganzhou Highpower Technology Co. Ltd, a collateral contract is signed separately;

Under certain circumstances that Party A or the Guarantor might be unable to fulfill or make Party B believe they are unable to fulfill the contractual capacity, e.g: Guarantee Contracts are invalid, Party A is or will be under significant business difficulties or risks: deteriorated financials, litigation issues which might affect its repayment ability, Guarantors were found default in other contracts with Party B, devaluation, dismissal or damage of collaterals which might cause the value of the collaterals slaked or losses. Party B reserves the right to and Party A has the obligation to additional or replace the guarantor.

Clause 8 Statement and Commitment

1. Party A’s statement:

1) Party A is legally registered and operating, and owning the full civil rights required by this contract.

2) Signing and performing the contract is the true will of Party A, Party A has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Party A. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All documents and information provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities

2. Party A’s commitment:

1) Timely delivery of the financial statements and other relevant information, (including but not limited to annual, quarterly and monthly financial reports.

2) Cooperate in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations

3) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in time. Those circumstances include but are not limited to significant organizational changes, e.g. business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge of the encumbered assets, withdrawal, bankruptcy, dissolution and involvement in significant lawsuits.

5) As for undefined business practice, Party A is committed to follow Party B’s regulation and normal practice in daily operation.

6) Party A committed not to distribute bonus during the credit period

7) Agreed by both parties, for the purpose to ensure the Party B’s claims on credit funds and Party B’s convenience to monitoring the repayment progress, Party A should guarantee the proportion of sales fund received in Party A’s account opened with Party B over Party A’s total sales should be matching to the proportion of Party A’s credit line received from Party B over Party A’s total credit line received from financial institution.

8) At any time, credit balance does not exceed 10 million

Clause 9 Related party and related party transaction of Party A

Party A is not defined as Group Credit Customer by Party B in accordance with “Guidance of Risk Management by Commercial Banks for Granting Credit to Customer Groups”

Clause 10 Breach of Covenants

Any of the following situations would be considered as breach of contract covenant:

1. Party A did not perform the repayment obligation under this contract or the affiliated specific credit line contracts

2. Party A has not used the credit funds according to agreed purposes.

3. Party A’s statement in this contract or the affiliated specific contracts are untrue or in violation with Party A’s commitment in this or the affiliated specific contracts.

4. Under the circumstance defined in 2.4) in Clause 8, Party A refused to provide additional guarantee or replacement of new guarantor

5. Party B is or will be under significant business difficulties or risks: deteriorated financials, significant financial losses and loss of assets (including but not limited asset losses for fulfill guarantee obligations) or other financial crisis.

6. Party A is in violation with other rights and obligations agreed in this contract.

7. Party A breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

8. Guarantors breach the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situation noticed, Party B will perform the following in separate or all at the same time:

1) Request Party A or Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Party A’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Party A’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Party A and Party B.

6) Request compensation from Party A on the losses thereafter caused.

7) Party A’s deposit account in Party B will be hold in custody for debt pay off for the comprehensive credit line and specific credit line under this contract. All the undue liabilities were deeming due and entitled the immediate payoff from Party A’s restricted accounts. If the currency in deposit account is different from the currency of the liabilities, the exchange rate on the date of the hold in custody will be applied.

8) Real rights granted by way of security will be executed.

9) Assume the guarantee responsibility on Guarantors.

10) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

The following annexes and other annexes and single agreements commonly confirmed by both parties shall constitute an integral part of this Agreement and shall have the same equal legal force as this Agreement.

Annex 1: For Opening International L/C.

Annex 2: For Import Bill Advance.

Annex 3: For Packing Loan.

Annex 4: For Export Bill Purchase.

Annex 5: For Export Bill Discount under L/C.

Annex 6: For Opening Letter of Guarantee/ Standby L/C.

Annex 7: For Opening Domestic L/C.

Annex 8: For Seller Bill Advance under Domestic L/C.

Annex 9: For Buyer Bill Advance under Domestic L/C.

Annex 10: For Domestic L/C Negotiation.

Annex 11: For Outward Remittance Advance.

Annex 12: For Order Financing.

Annex 13: For Outward Remittance Advance (Domestic Trade).

Annex 14: Attached Provisions for Individual Cases. 

Clause 15 Other terms and conditions

1. Without Party B’s prior written approval, Party A is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Party A should give the consent that, Party B might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract. Party is exempted from punishment under this circumstance.

Clause 16 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Party A and Party B or their duly authorized agents, together with sealing by the company chop.

This contract will be print and signed in seven copies, Party A and the guarantors hold one copy each, Party B holds three copies, collateral registry authority holds one copy, each copy has the same legal effect.

/s/ Dangyu Pan

Stamp of Party A

Signature of director or authorized representative

/s/ [COMPANY SEAL]

Stamp of Party B

Signature of legal representative or authorized representative

Annex 1: For Opening International L/C

1. In case of any discrepancy between this Annex and the Credit Line Agreement (hereinafter referred to as the Agreement), this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a L/C.

3. Party A agrees Party B to deal with matters under the L/C in accordance with the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (□UCP500/□UCP600, same below) and assume the obligations and responsibilities arising therefrom.

4. Opening and amendment of a L/C:

(1) If Party B accepts Party A’s application for opening a L/C, Party B shall open a L/C according to the Application for Opening an International L/C submitted by Party A.

(2) If Party B requests Party A to submit relevant notes or documents for opening a L/C, such as trade contract, Party B shall not be deemed obliged to open a L/C on the basis of these notes or documents.

(3) Should Party A amend the L/C, Party A shall submit to Party B an Application for Amending International L/C. Party A agrees Party B to deal with matters under the L/C in accordance with the aforesaid Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce and assume the obligations and responsibilities arising therefrom. An amendment of L/C shall be binding upon Party A immediately after it is issued.

(4) Party B has the independent right to judge whether to amend a L/C. Party B has the right to refuse Party A’s application for amendment and to raise opinions on the contents of amendment. If amendment of the L/C involves amount, currency, interest rate or term and Party B thinks strengthening the surety’s obligations, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the surety’s signature and agreement on the Application for Amending International L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

(6) L/C-related contents in the Application for Opening International L/C and the Application for Amending International L/C shall be written in English. In case of any dispute arising from the applicant’s unclear handwriting or ambiguous meaning, Party A shall assume all the responsibilities arising therefrom.

(7) Party A shall pay Party B timely all the expenses arising from opening and amendment of the L/C (including relevant banking charges refused by a foreign beneficiary). The charging method shall comply with the stipulations of Party B.

5. External payment under the L/C:

(1) After receiving a document arrival notice from Party B within the validity of the L/C, Party A shall notify Party B of the document processing opinions within the time limit specified in the notice, or Party A shall be deemed as having no payment refusal opinion on the documents and having agreed Party B’s external payment/payment by acceptance/payment by commitment; if Party A notifies Party B of acceptance of the documents within the time limit specified in the notice and Party B agrees Party A’s document processing opinions, Party B may handle external payment/payment by acceptance/payment by commitment. Party A shall deposit provision according to the stipulations of the Application for Opening International L/C.

If Party A notifies Party B of acceptance of the documents but Party B disagrees Party A’s document processing opinions, Party B shall have the right to decide whether to refuse external payment only depending on whether the documents are compliant; if Party A agrees to provide Party B with full security money or other payment guarantee, Party B shall have the right to decide on waiving or reserving the right of refusal of external payment as the case may be.

(2) If Party A thinks there are nonconformities in the documents and presents a request of refusing external payment /payment by acceptance/payment by commitment to Party B within the time limit specified in the document arrival notice, Party A shall list all the nonconformities and submit two letters of payment refusal causes affixed with Party A’s seal. Party B has the right to deem the nonconformities stated in Party A’s letters of payment refusal causes as all the nonconformities raised by Party A. If Party B agrees the nonconformities raised by Party A, Party B may handle refusal of external payment. If Party B thinks that the nonconformities are not satisfied through review in accordance with international practice or the nonconformities are immaterial and not enough to constitute a reason for refusal of payment, Party B shall have the right to decide on external payment /payment by acceptance/payment by commitment and use the provision deposited by Party A to make external payment directly, and all the obligations and responsibilities arising therefrom shall be assumed by Party A.

(3) If the provision deposited by Party A is not enough to make advance to the accounts payable, Party A shall pay off the accounts payable. The interest rate and calculation of advance shall follow the stipulations of the related application.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) In case of any L/C-related amendment of the import/export trade contract after the L/C is opened, Party A shall notify Party B of such amendment immediately in writing;

(2) When Party B makes advance or payment by acceptance or commitment, Party B shall reserve the right to dispose all the documents/goods under the L/C or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the L/C in accordance with applicable laws and regulations or according to the opinions of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the L/C in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A retires documents or pays Party B in full the advance made by Party B.

With respect to the usance bill accepted or the deferred payment confirmed by Party B, Party A shall not request Party B to stop payment by any excuse and, within the scope permitted by laws and regulations, Party A shall waive the right to, by any excuse, apply to the people’s court for freezing or file a lawsuit for requesting stop payment under the L/C.

(3) The risks of loss, delay, omission or damage of business correspondence and documents under the L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening International L/C and the Application for Amending International L/C.

Annex 2: For Import Bill Advance

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting import bill advance.

3. If Party B accepts Party A’s application for import bill advance, Party B shall pay the presenting bank the documentary bill funds according to the currency and amount specified in the Application for Import Bill Advance accepted by Party B.

4. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the import bill advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the import bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the import bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the documentary bill financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s documentary bill financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means of deferred payment or any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

5. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under import to firstly repay Party B’s financing to Party A.

6. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Import Bill Advance.

Annex 3: For Packing Loan

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting a packing loan.

3. If Party B accepts Party A’s application for a packing loan, Party B shall pay the Party A the loan according to the currency and amount specified in the Application for Packing Loan accepted by Party B.

4. Party A shall use the total loan for purchasing, organizing production and arranging export and transportation of the exported goods under the L/C. Without Party B’s written consent, Party A shall not use the loan for any other purpose.

5. Party A shall satisfy the following conditions before it withdraws money:

(1) present a written withdrawal application prior to expiration of the usage term of the packing loan limit approved by Party B for Party A;

(2) provide relevant documents proving the loan purpose;

(3) submit the L/C original to Party B for keeping; and

(4) meet the preconditions agreed in the Agreement;

6. The payments for goods received by Party A after delivery, presentation of documents and handling exchange collection under the export L/C shall be the prime source of repayment of the loan hereunder. Party A hereby irrevocably agrees to entrust Party B to handle matters concerning exchange collection under the export L/C. Party A agrees Party B offset the loan principal and interest and expenses hereunder automatically with the incomes obtained from exchange collection under the export L/C.

If Party A handles a L/C for a packing loan while it applies to Party B for conducting export bill purchase, Party A agrees Party B to offset the loan principal and interest and expenses hereunder firstly with the incomes obtained from export bill purchase.

If Party A is unable to collect payments for goods on time due to delayed delivery, nonconforming documents or other causes, Party A shall repay the loan principal and interest and expenses hereunder timely with other capital source.

9. In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall timely provide Party B with the instructions of preparing goods with the packing loan and be ready for accepting Party B’s supervision and inspection at any time;

(2) Party A shall, within the validity of the L/C and the document presentation period agreed in the L/C, submit the documents under the L/C to Party B for handling matters concerning export bill purchase under the L/C;

(3) The export collection of Party A under the L/C shall be firstly used for repaying the loan principal and interest and the expenses hereunder.

If Party A is for any reason unable to collect funds, Party A shall unconditionally assume the responsibility of repaying the loan principal and interest and the expenses hereunder;

(4) In case of any serious difficult of production or sales of the goods under export, Party A shall notify Party B timely in written form.

10. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) Party A is for any reason unable to submit all documents under the L/C to Party B, or there are nonconformities detected through Party B’s verification in the documents provided by Party A, and Party A is unable to eliminate these nonconformities;

(2) The funds under the L/C, for any reason, cannot be collected on time according to the provisions of the L/C.

11. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Packing Loan.

Annex 4: For Export Bill Purchase

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting export bill purchase.

3. If Party B accepts Party A’s application for export bill purchase, Party B shall pay Party A the documentary bill funds according to the currency and amount specified in the Application for Export Financing accepted by Party B.

Where it is export bill purchase under the L/C and Party A and Party B conduct a packing loan at the same time, Party A agrees Party B to use the financing funds obtained from export bill purchase firstly for offsetting the principal and interest of the loan provided by Party B and relevant expenses under the packing loan, and Party B shall pay Party A the remaining balance.

4. Party A agrees Party B to use the incomes obtained from processing documents under export bill purchase as a source of documentary repayment for automatically offsetting Party B’s funds financed to Party A.

5. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the L/C /under collection or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

With respect to the export bill purchase of which the documents are nonconforming, where there is any element affecting normal collection of the accounts receivable, Party B shall have the right to request Party A to prepay the documentary bill funds or/and take other remedial measures specified in the Agreement.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under export;

(2) In case of any serious difficult of sales of the goods under export, Party A shall notify Party B timely in written form.

7. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) the foreign bank or payer refuses, delays or deducts payment due to nonconformities in documents or due to any other reason;

(2) there is turbulence, war or financial crisis at the location of the opening bank or the payer, or the opening bank or the payer goes into bankruptcy, or there is any other force majeure event, which may lead to that the foreign bank or payer refuses, delays or deducts payment;

(3) the foreign bank or payer refuses, delays or deducts payment due to loss or delay of documents or telecommunication failure during postal process.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Export Financing.

Annex 5: For Export Bill Discount under L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting export bill discount under L/C.

3. If Party B accepts Party A’s application for export bill discount under L/C, Party B shall pay Party A the discounting funds according to the currency and amount specified in the Application for Export Financing accepted by Party B.

4. Party A agrees Party B to use the incomes obtained from processing documents as a source of repayment for automatically offsetting Party B’s funds financed to Party A.

5. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A has obtained the documents by legitimate, good will and honest ways;

(2) Party A shall assume all responsibilities for the legitimacy of the draft-based transaction.

6. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) The accepting/paying bank has the following cases:

A. The financial status of the accepting/paying bank goes bad and Party B thinks the accepting/paying bank incapable of performing the obligation of payment;

B. The accepting/paying bank is or may be dissolved, revoked, shutdown or announced bankruptcy;

C. The accepting/paying bank is announced freezing of funds by the court or is issued payment injunction by the court;

D. The accepting/paying bank notifies that the funds are frozen or stopped by the court, or other property preservation measures are taken, which result in delayed payment;

E. The main assets of the accepting/paying bank are damaged, sealed, detained, frozen, confiscated, sold by auction, sold off or expropriated;

F. The accepting/paying bank is involved in any major lawsuit or arbitration case and Party B thinks possibly affecting the accepting/paying bank’s ability for performing the obligation of payment;

G. The accepting/paying bank is unable to pay relevant foreign exchange due to the foreign exchange control system of the located country;

H. The located country of the accepting/paying bank has political unrest, natural disaster or financial crisis and Party B thinks possibly cause that the accepting/paying bank is unable to make payment on time.

I. There is any other event at the located country of the accepting/paying bank that Party B thinks possibly affecting the accepting bank’s payment capacity.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Export Financing.

Annex 6: For Opening Letter of Guarantee/ Standby L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a letter of guarantee/standby L/C.

3. Opening and amendment of a letter of guarantee /standby L/C:

(1) If Party B accepts Party A’s application for opening a letter of guarantee / a standby L/C, Party B shall open a letter of guarantee /standby L/C according to both parties’ agreement.

(2) Party B shall refer to the Application for Opening Letter of Guarantee/Standby L/C submitted by Party A according to the detailed contents of the letter of guarantee/standby L/C applied by Party A. The final contents shall be subject to the letter of guarantee/standby L/C opened by Party B.

(3) Should Party A amend the letter of guarantee/standby L/C, Party A shall submit to Party B an Application for Amending Letter of Guarantee/Standby L/C.

(4) If amendment of the letter of guarantee/standby L/C involves amount, currency, interest rate or term or other provisions that Party B thinks necessary to add guarantee, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the counter-guarantor’s signature and agreement on the Application for Amending Letter of Guarantee/Standby L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the letter of guarantee/standby L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

4. Party A agrees, if there is any claim under the letter of guarantee/standby L/C within the validity of the letter of guarantee/standby L/C, and the beneficiary's claim documents comply with the stipulations of the letter of guarantee/standby L/C upon review by Party B, Party B shall have the right to make external payment directly with the provision deposited by Party A, and Party B shall also have the right to positively take Party A’s foreign or RMB account in Party B as provision for external payment.

If the provision deposited by Party A is not enough to make advance to the claim, Party A shall pay off the claim. Party A shall bear the interest from the date of advancement by Party B to the date of actual payment by Party A. The interest rate of advance shall be handled in accordance with the Application for Opening Letter of Guarantee/Standby L/C.

5. In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) If the letter of guarantee/standby L/C is reopened/forwarded by any other bank as having been entrusted, Party A agrees to assume all the risks and responsibilities of the reopening/forwarding bank caused due to reopening/forwarding of the letter of guarantee/standby L/C;

(2) Party A shall notify Party B immediately after occurrence of any case which affects Party B’s guarantee liability, including the execution, amendment, change and termination of the basic contract or basic transaction on which the letter of guarantee/standby L/C is based;

(3) Party A shall coordinate Party B to go through formalities for performance under external guarantee;

(4) The risks of loss, delay, omission or damage of business correspondence and documents under the letter of guarantee/standby L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

(5) Where the letter of guarantee/standby L/C has no definite date of ineffectiveness, no applicable foreign law or practice and no definite amount of guarantee, Party A agrees to make compensation for all risks, responsibilities and losses caused to Party B;

6. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening Letter of Guarantee/Standby L/C and the Application for Amending Letter of Guarantee/Standby L/C.

Annex 7: For Opening Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a domestic L/C.

3. Party A irrevocably assumes the following responsibilities:

(1) Party A is willing to abide by the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and other relevant national laws and regulations. Party A agrees Party B to handle all maters under the L/C in accordance with the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and other relevant national laws and regulations. Party A agrees to assume all the responsibilities arising therefrom.

(2) Party A ensures that all the materials provided for Party B for the purpose of opening the L/C are genuine, complete and effective and the L/C opened has true trade background. If Party A provide Party B with false and/or incomplete and/or ineffective materials, and/or the L/C opened does not have any true trade background, Party A is willing to assume all the responsibilities arising therefrom.

(3) If the goods under the L/C are actually controlled by Party A before Party A pays Party B the funds under the L/C, Party A promises that Party B reserves the ownership of the goods.

(4) All the consequences arising from unclear handwriting or ambiguous meaning in the application shall be assumed by Party A.

4. Opening and amendment of a domestic L/C:

(1) If Party B accepts Party A’s application for opening a domestic L/C, Party B shall open a domestic L/C according to the Application for Opening Domestic L/C submitted by Party A. The final contents shall be subject to the domestic L/C opened by Party B.

(2) If Party B requests Party A to submit relevant notes or documents for opening a domestic L/C, such as trade contract, Party B shall not be deemed obliged to open a domestic L/C on the basis of these notes or documents.

(3) Should Party A amend the domestic L/C, Party A shall submit to Party B an Application for Amending Domestic L/C. Party A agrees Party B to deal with matters under the domestic L/C in accordance with the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and assume the obligations and responsibilities arising therefrom. An Application for Amending Domestic L/C shall be binding upon Party A immediately after it is issued.

(4) Party B has the independent right to judge whether to amend a domestic L/C. Party B has the right to refuse Party A’s application for amendment and to raise opinions on the contents of amendment. If amendment of the domestic L/C involves amount or term and Party B thinks strengthening the surety’s obligations, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the surety’s signature and agreement on the Application for Amending Domestic L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the domestic L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

(6) Domestic L/C-related contents in the Application for Opening Domestic L/C and the Application for Amending Domestic L/C shall be written in Chinese. In case of any dispute arising from the applicant’s unclear handwriting or ambiguous meaning, Party A shall assume all the responsibilities arising therefrom.

(7) Party A shall pay Party B timely all the expenses arising from opening and amendment of the domestic L/C (including relevant banking charges refused by the beneficiary). The charging method shall comply with the stipulations of Party B.

5. Payment under the domestic L/C:

(1) After receiving a document arrival notice from Party B within the validity of the domestic L/C, Party A shall notify Party B of the document processing opinions within the time limit specified in the notice, or Party A shall be deemed as having no payment refusal opinion on the documents and having agreed Party B’s payment/payment by commitment; if Party A notifies Party B of acceptance of the documents within the time limit specified in the notice and Party B agrees Party A’s document processing opinions, Party B may handle payment/payment by commitment. Party A shall deposit provision according to the stipulations of the Application for Opening Domestic L/C.

If Party A notifies Party B of acceptance of the documents but Party B disagrees Party A’s document processing opinions, Party B shall have the right to decide whether to refuse payment only depending on whether the documents are compliant; if Party A agrees to provide Party B with full security money or other payment guarantee, Party B shall have the right to decide on waiving or reserving the right of refusal of payment as the case may be.

(2) If Party A thinks there are nonconformities in the documents and presents a request of refusing payment /payment by commitment to Party B within the time limit specified in the document arrival notice, Party A shall list all the nonconformities and submit two letters of payment refusal causes affixed with Party A’s seal. Party B has the right to deem the nonconformities stated in Party A’s letters of payment refusal causes as all the nonconformities raised by Party A. If Party B agrees the nonconformities raised by Party A, Party B may handle refusal of external payment. If Party B thinks that the nonconformities are not satisfied through review according to practice or the nonconformities are immaterial and not enough to constitute a reason for refusal of payment, Party B shall have the right to decide on payment /payment by commitment and use the provision deposited by Party A to make external payment directly, and all the obligations and responsibilities arising therefrom shall be assumed by Party A.

(3) If the provision deposited by Party A is not enough to make advance to the accounts payable, Party A shall pay off the accounts payable.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) In case of any domestic L/C-related amendment of the trade contract after the domestic L/C is opened, Party A shall notify Party B of such amendment immediately in writing;

(2) With respect to the deferred payment confirmed by Party B, Party A shall not request Party B to stop payment by any excuse and, within the scope permitted by laws, rules and regulations, Party A shall waive the right to, by any excuse, apply to the people’s court for freezing or file a lawsuit for requesting stop payment under the domestic L/C.

(3) The risks of loss, delay, omission or damage of business correspondence and documents under the domestic L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening Domestic L/C and the Application for Amending Domestic L/C.

Annex 8: For Seller Bill Advance under Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Seller bill advance means the short-term financing that the bank provides the seller on the basis of the right of resource reserved in the domestic L/C business according to the documents submitted by the seller after the seller ships the goods.

3. Preconditions for seller bill advance:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting seller bill advance.

(2) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

4. Application for seller bill advance

When the Agreement becomes effective, Party A shall submit an Application for Seller Bill Advance under Domestic L/C for each seller bill advance business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

If Party B accepts Party A’s application for conducting seller bill advance, Party B shall pay Party A the documentary bill funds according to the amount agreed in the Application for Seller Bill Advance under Domestic L/C accepted by Party B.

Documentary bill term and other relevant matters shall be implemented specifically according to the Application for Seller Bill Advance under Domestic L/C hereunder.

6. Party A agrees Party B to use the incomes obtained from processing documents under seller bill advance as a source of documentary repayment for automatically offsetting Party B’s funds financed to Party A.

7. Interest and expenses

To handle the transaction, Party A agrees to pay the negotiating bank interest and expenses, specifically according to the stipulations of the Application for Seller Bill Advance under Domestic L/C hereunder.

8. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the domestic L/C or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

With respect to the seller bill purchase of which the documents are nonconforming, where there is any element affecting normal collection of the accounts receivable of the seller’s goods under the domestic L/C, Party B shall have the right to request Party A to prepay the documentary bill funds or/and take other remedial measures specified in the Agreement.

If the L/C payer refuses, delays or deducts payment due to nonconformities in documents, due to loss, delay or telecommunication failure of documents during postal process, or due to other reasons not attributable to Party B, Party B may claim Party A for the principal and interest, expenses and losses of all financing funds or the insufficient part. Party B also has the right to choose self disposal of the documents and goods under the seller bill advance herein and obtain compensation from the incomes obtained therefrom. Party B has the right to recourse Party A for the insufficient part.

If the incomes from processing documents or self disposal of documents and goods are not enough to repay the total financing funds, Party B shall have the right to make deduction actively from any account opened by Party A with Party A or from other collections. If Party B makes deduction directly from Party A’s account according to relevant stipulations of this Annex and the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate applicable to Party B.

9. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under the seller of the domestic L/C;

(2) In case of any serious difficult of sales of the goods under the seller of the domestic L/C, Party A shall notify Party B timely in written form.

10. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Seller Bill Advance under Domestic L/C.

Annex 9: For Buyer Bill Advance under Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Buyer bill advance means the short-term financing that Party B provides Party A in the domestic L/C business at Party B’s request after Party B receives the documents submitted by the negotiating bank or the presenting bank, for paying the funds under these documents.

3. Preconditions for buyer bill advance:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting buyer bill advance.

(2) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

4. Application for buyer bill advance

Party A shall submit an Application for Buyer Bill Advance under Domestic L/C for each buyer bill advance business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

When the preconditions for buyer bill advance are met and Party B accepts Party A’s application for conducting buyer bill advance, Party B shall represent Party A to make external payment under the L/C according to the amount agreed in the Application for Buyer Bill Advance under Domestic L/C accepted by Party B.

Documentary bill term and other relevant matters shall be implemented specifically according to the Application for Buyer Bill Advance under Domestic L/C hereunder.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the buyer bill advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the buyer bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the buyer bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the documentary bill financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s documentary bill financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means of deferred payment or any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under the domestic L/C to firstly repay Party B’s financing to Party A.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Buyer Bill Advance under Domestic L/C.

Annex 10: For Domestic L/C Negotiation

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Negotiation means the action that Party B pays Party A the consideration after deducting the negotiating interest under the conditions of documents in compliance with the L/C. Negotiation is only limited to the negotiable deferred payment documentary credit.

3. Preconditions for negotiation:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting negotiation.

(2) Party A shall present a written negotiation application;

(3) Party A has completed relevant vouchers and provided relevant documents and materials according to Party B’s requirements;

(4) Party A has handled the legal and administrative examination and approval procedures required for negotiation, and has submitted relevant examination and approval documents to Party B for inspection. Party B has the right to request Party A to provide the copies of the examination and approval documents or the photocopies in compliance with the originals;

(5) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

(6) Party A shall present documents within the presentation period and valid period of the L/C. Party A shall submit to Party B the complete L/C and the amendment original, which shall comply with documents upon review by Party B;

(7) The L/C shall be a negotiable deferred payment documentary credit and Party B is designated as the negotiating bank.

4. Application for negotiation

When the Agreement becomes effective, Party A shall submit an Application for Negotiation of Domestic L/C for each negotiation business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

If Party B accepts Party A’s application for conducting negotiation, Party B shall pay Party A the negotiating funds according to the amount agreed in the Application for Negotiation of Domestic L/C accepted by Party B.

Negotiation term and other relevant matters shall be implemented specifically according to the Application for Negotiation of Domestic L/C.

6. Party A agrees Party B to use the incomes obtained from processing documents under negotiation as a source of repayment by negotiation for automatically offsetting Party B’s funds financed to Party A.

7. Interest and expenses

To handle the transaction, Party A agrees to pay the negotiating bank interest and expenses, specifically according to the stipulations of the Application for Negotiation of Domestic L/C hereunder.

8. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the domestic L/C or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

If the L/C payer refuses, delays or deducts payment due to nonconformities in documents, due to loss, delay or telecommunication failure of documents during postal process, or due to other reasons not attributable to Party B, Party B may claim Party A for the principal and interest, expenses and losses of all financing funds or the insufficient part. Party B also has the right to choose self disposal of the documents and goods under negotiation herein and obtain compensation from the incomes obtained therefrom. Party B has the right to recourse Party A for the insufficient part.

If the incomes from processing documents or self disposal of documents and goods are not enough to repay the total financing funds, Party B shall have the right to make deduction actively from any account opened by Party A with Party A or from other collections. If Party B makes deduction directly from Party A’s account according to relevant stipulations of this Annex and the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate applicable to Party B.

9. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under the seller of the domestic L/C;

(2) In case of any serious difficult of sales of the goods under the seller of the domestic L/C, Party A shall notify Party B timely in written form.

10. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Negotiation of Domestic L/C.

Annex 11: For Outward Remittance Advance

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Outward remittance means that Party A, as the payer of the contract having been signed, makes payment through bank remittance according to the stipulations of the contract. In this Annex and relevant documents of this Annex, financing under outward remittance means the short-term financing that Party B makes advance of import funds for Party A according to the effective voucher and commercial documents under outward remittance in various businesses, including cash on delivery, remittance of profit, dividend and bonus, and advance payment for some types and service trade remittance.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting outward remittance advance.

4. If Party B accepts Party A’s application for outward remittance advance, Party B shall remit the financing funds to the payee indicated in the remittance application submitted by Party A according to the currency and amount agreed in the Application for Financing under Outward Remittance.

5. If Party A has provided Party B with all documents according to Party B’s requirements, it shall not be interpreted that Party B bears the obligation and responsibility of reviewing the genuine and legitimacy of the transaction that Party A is engaged in.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the outward remittance advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the outward remittance advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the outward remittance advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means, including change of the payment method specified in the contract, deferred payment or by any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

(5) The currency used by Party A for performing the obligation of repayment shall be the same as the pricing currency of Party B’s business. When Party B makes deduction actively from Party A’s account according to relevant stipulations of the Contract and if the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate issued by Party B on the date of deduction.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under import to firstly repay Party B’s financing to Party A.

Party A shall perform the obligation of prudence, diligence and care when it disposes the import goods under the Financing Contract. It shall be requested in the Contract for disposing the goods that the buyer of the goods should directly make payment to Party B’s account for repaying the financing principal and interest and other expenses hereunder.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Financing under Outward Remittance.

Annex 12: For Order Financing

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Order financing means the special trade financing that, as having been applied by Party A, Party B provides Party A for procurement, production and shipment of the goods under the order according to the trade contract or order submitted by Party A in order to support the goods preparation and shipment under Party A’s international trade and domestic trade.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting order financing.

4. If Party B accepts Party A’s application for order financing, Party B shall pay Party A the financing funds according to the currency and amount specified in the Application for Order Financing. Party B has the right to charge handling charges according to the rate specified in the Application for Order Financing and charge interest and default interest according to the term, interest rate and method specified therein.

5. Party A shall satisfy the following conditions before it withdraws money:

(1) present a written withdrawal application prior to expiration of the usage term of the order financing limit approved by Party B for Party A;

(2) meet the preconditions agreed in the Agreement.

6. Party A hereby irrevocably agrees as follows:

(1) The funds collected under the order after shipment and presentation of documents shall be the prime source of repayment of financing hereunder. According to the delivery and shipment time requested in the order or trade contract, Party A shall timely handle relevant settlement procedures of accounts receivable through Party B and submit to Party B for review the business invoice, shipping documents, export declaration (if any) and other relevant documents required by Party B. Under L/C or collection, Party B shall send the full unit of original documents to the opening bank (under L/C) or to the outward collection (under collection). Under the mode of sell on credit, Party B shall be the receiving bank and Party B shall be agreed to offset the financing principal and interest and expenses hereunder automatically with the funds collected under the order. If draft is settled under domestic trade, Party A shall handle collection or discount through Party B and agree Party B to offset the financing principal and interest and expenses hereunder automatically with the draft collection or discount funds.

(2) If Party A handles order financing while it applies to Party B for conducting packing loan, documentary bill, export discount, export invoice discounting and domestic invoice discounting or other trade financing business, arty A agrees Party B to offset the loan principal and interest and expenses hereunder firstly with the other financing funds.

(3) If Party A is unable to collect the funds under the order on time due to delayed delivery, nonconforming documents or other causes, Party A shall repay the loan principal and interest and expenses hereunder timely with other capital source.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) The document, order and other relevant documents submitted are genuine, legitimate and effective;

(2) The total financing is for purchasing and organizing the production and arranging the export and transportation of the goods under the related trade contract/order. Without Party B’s written consent, Party A shall not use the financing for any other purpose.

(3) Party A shall timely provide Party B with the instructions of preparing goods and shipment with the order financing and be ready for accepting Party B’s supervision and inspection at any time;

(4) In case of any adverse element affecting payment collection under the order, including but not limited to: serious difficult in production, procurement and sales of the goods under the order, commercial dispute with the buyer or deterioration of the buyer’s operating situations, Party A shall timely notify Party B in written form.

8. Except the situations agreed in the Agreement, Party A’s failure in timely handling relevant settlement procedures of accounts receivable under the order financing through Party B shall constitute or be deemed as an event of default by Party A under the Agreement and this Annex.

9. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Order Financing.

Annex 13: For Outward Remittance Advance (Domestic Trade)

(Specially for RongHuoDa)

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Outward remittance under domestic trade means that Party A, as the buyer of the goods contract having been signed, makes payment through bank remittance according to the stipulations of the contract.

In this Contract and the documents related to this Contract, financing under outward remittance (domestic trade) means that after Party A presents the needs of capital financing, while handling outward remittance for Party A, Party B, as the remitting bank of the remittance under outward remittance (domestic trade), provides Party A with external payment of funds, and later, Party A repays Party B the financing funds.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting outward remittance advance (domestic trade).

4. If Party B accepts Party A’s application for outward remittance advance (domestic trade), Party B shall remit the financing funds to the payee indicated in the remittance application submitted by Party A according to the currency and amount agreed in the Application for Outward Remittance Advance (Domestic Trade).

5. If Party A has provided Party B with all documents according to Party B’s requirements, it shall not be interpreted that Party B bears the obligation and responsibility of reviewing the genuine and legitimacy of the transaction that Party A is engaged in.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under outward remittance advance (domestic trade) or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the outward remittance advance (domestic trade) in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the outward remittance advance (domestic trade) in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means, including change of the payment method specified in the contract, deferred payment or by any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

(5) The currency used by Party A for performing the obligation of repayment shall be the same as the pricing currency of Party B’s business. When Party B makes deduction actively from Party A’s account according to relevant stipulations of the Contract and if the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate issued by Party B on the date of deduction.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods to firstly repay Party B’s financing to Party A.

Party A shall perform the obligation of prudence, diligence and care when it disposes the goods under the Financing Contract. It shall be requested in the Contract for disposing the goods that the buyer of the goods should directly make payment to Party B’s account for repaying the financing principal and interest and other expenses hereunder.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Outward Remittance Advance (Domestic Trade) (Specially for RongHuoDa).

Attachment 14:

If there are discrepancies in contents in the attachment with this contract, this contract should prevail.

Specific to the 2^nd paragraph of Clause 3:” This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract”.

“all the credit line contracts previously signed” here means the contract signed with reference no of “2014zhenzhongyinbuexiezi No. 0000716.

EX-10.1(A)

Exhibit 10.1(a)

Maximum Amount Guaranty Contract

Reference No. : 2015zhenzhongyinbubaoezi No.0037

Guarantor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000466)” and its supplements signed between Creditor and Debtor

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): sixty million

Amount (in numbers): 60,000,000

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

1. Guarantor is legally registered and operating, and owns the full civil rights required by this contract.

2. Signing and performing the contract is the true will of Guarantor, Guarantor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Guarantor. It is Guarantor’s responsibility to complete all required approvals, registrations, permits and filings.

3. All document and information provided by Guarantor to Creditor are true, complete, accurate and effective.

4. Guarantor is willing to cooperate in the check and inspection on its financial conditions performed by Creditor.

5. Guarantor did not conceal any existing liability upon the signing of the contract

6. Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge the encumbered assets, withdrawal, bankruptcy, dissolution and involved in significant law suits.

Clause 10 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 6 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. Experiencing the termination of operation or bankruptcy.

5. In violation with other rights and obligations agreed in this contract.

6. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

Not applicable

Clause 15 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 16 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Guarantor and Creditor or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

[COMPANY SEAL]

Stamp of Guarantor (if Guarantor is a corporation)

Signature of Authorized Representative

July 1, 2015

/s/ [COMPANY SEAL]

Stamp of Creditor (if Creditor is a corporation)

Signature of legal representative or authorized representative

July 1, 2015

EX-10.1(B)

Exhibit 10.1(b)

Maximum Amount Guaranty Contract

Reference No. : 2015zhenzhongyinbubaoezi No.0038

Guarantor: Huizhou Highpower Technology (Shenzhen) Co., Ltd

Business License: 441300000177233

Legal Representative: Dangyu Pan

Address: Xinhu Industrial Zone, Maan town, Huicheng District, Huizhou, Guangdong

Postal code:

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2014zhenzhongyinbuexiezi No 0000466)” and its supplements signed between Creditor and Debtor

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): sixty million

Amount (in numbers): 60,000,000

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

1. Guarantor is legally registered and operating, and owns the full civil rights required by this contract.

2. Signing and performing the contract is the true will of Guarantor, Guarantor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Guarantor. It is Guarantor’s responsibility to complete all required approvals, registrations, permits and filings.

3. All document and information provided by Guarantor to Creditor are true, complete, accurate and effective.

4. Guarantor is willing to cooperate in the check and inspection on its financial conditions performed by Creditor.

5. Guarantor did not conceal any existing liability upon the signing of the contract

6. Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge the encumbered assets, withdrawal, bankruptcy, dissolution and involved in significant law suits.

Clause 10 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 6 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. Experiencing the termination of operation or bankruptcy.

5. In violation with other rights and obligations agreed in this contract.

6. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

Not applicable

Clause 15 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 16 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Guarantor and Creditor or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

[COMPANY SEAL]

Stamp of Guarantor (if Guarantor is a corporation)

Signature of Authorized Representative

July 1, 2015

/s/ [COMPANY SEAL]

Stamp of Creditor (if Creditor is a corporation)

Signature of legal representative or authorized representative

July 1, 2015

EX-10.1(C)

Exhibit 10.1(c)

Maximum Amount Guaranty Contract

(Applicable if guarantor is natural person)

Reference No. : 2015zhenzhongyinbubaoezi No.0039

Guarantor: Dangyu Pan

Type of certification: identification card

Certification number:430104196803184316

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Telephone: 8968 6236 ; Facsimile: 8968 6298

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000466)” and its supplements signed between Creditor and Debtor

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights. 

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): sixty million only

Amount (in numbers): 60,000,000

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

a) Guarantor is a natural person who possesses the capacity for civil rights and civil conducts in People’s Republic of China to perform this contract. Party A can perform the civil conduct independently, no bad credit records such as debt overdue, overdue interest, malicious overdraft on credit card, no criminal records, qualified to be a legal guarantor.

b) Guarantor has full understanding about the terms and conditions set forth in the contract. It is Guarantor’s true will to provide guarantee to debtor.

c) The establishment of this contract will not constitute a breach of covenant of any other previous contract Guarantor engaged in.

d) All documents and information provided by Guarantor to Creditor are true, complete, accurate and effective.

e) Guarantor is willing to cooperate in the checking and inspection of its financial conditions performed by Creditor.

f) Guarantor did not conceal any existing liability upon the signing of the contract

g) Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to losses of assets, transfer, donation, assume responsibility on liabilities, involved in significant law suits or disputes.

h) If the Guarantor is married, make sure the sponsor’s consent is obtained.

Clause 10 Authorization of access to personal information

Guarantor authorizes the access of personal information in the personal credit information database in the People’s Bank of China to Creditor under the following circumstances.

1. Reference check on the Guarantor’s credit status.

2. Reference check on the Guarantor’s guarantee status.

3. After-loan management on the personal credit and guarantee status

4. Accept the credit line application of which the Guarantor guaranteed or to be legal representative or one of the funders.

Clause 11 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 7 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. In violation with other rights and obligations agreed in this contract.

5. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 12 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 13 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 14 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 15 Attachments

Sponsor’s consent.

Clause 16 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 17 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

/s/ Dangyu Pan

Signature of Guarantor and Sponsor

July 1, 2015

/s/ [COMPANY SEAL]

Stamp of Creditor (if Pledgee is a corporation)

Signature of legal representative or authorized representative

July 1, 2015

Consent letter

I (name:Zhoutao Yin, certificate type: identification card , id number: 430104196810294329) am the spose of the guarantor Wenliang Li under the maximum amount guarantee contract (No. : 2015zhenzhongyinbubaoezi No.0035). I agree to undertake the responsibility of the maximum amount guarantee contract by the couple's property.

EX-10.1(D)

Exhibit 10.1(d)

Collateral Contract

Reference No. : 2015zhenzhongyinbudiezi No.0015

Pledgor: Ganzhou Highpower Technology (Shenzhen) Co., Ltd

Business License: 360702110000723

Legal Representative: Ou Hancheng

Address: Shuixi Industrial base, Zhanggong, Ganzhou, Jiangxi

Postal code: 341000

Deposit A/C and financial institutions: Industrial and Commercial Bank, gongjiang Sub-branch, Ganzhou

Telephone: 0797-7373907 ; Facsimile: 0797-7373867

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: LI YANSHAN

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015 zhenzhongyinbuexiezi No 0000466)” and its supplements signed between Creditor and Debtor, Springpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitute the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and end upon the expiration of all the specific creditor’s rights.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): twenty seven million sixty six thousand six hundred and twenty seven only

Amount (in numbers): 27,066,627.00

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

During the period of collateral, if the Collateral is broken or damaged, Pledgee is entitled to the primary rights for compensation from insurance, compensation or subsidy, Pledgee can withdraw the compensation amount even thought the collateral period is undue

If the Collateral is buildings, Pledgor should notify the Pledgee immediately after the Pledgor acknowledged the removal of the building. If the compensation of the removal is through change of property, Pledgor should coordinate the paid off of the principle of creditor’s rights with debtor and Pledgee per Pledgee’s request, or replace the Collateral with the new building or new collateral per Pledgee’s request. After the original Collateral is lost and the new Collateral is not yet registered, Pledgor should provide additional guarantee by qualified guarantor. For the compensation that is in the form of cash, Pledgee is entitled to the primary rights from compensation, and entitled to the right to request the Pledgor to deposit the cash into the appointed custody accounts, and subsequent security by deposit contract should be signed and effected.

Clause 5 The registration

With 30 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 30 days after the change. 

Clause 6 The possession and management of the Collateral

The possession and management of the Collateral will be on the Pledgor, however, the certifications of rights should be under the custody of the Pledgee. Pledgor should accept the inspection and check from time to time.

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Without the written consent of the Pledgee, Pledgor is not allowed to transfer, lend, invest, or restructure the Collateral. With Pledgee’s written consent, the proceedings of disposal should be deposited in the appointed accounts.

Clause 7 The circumstances that the value of the Collaterals is diminished

Before the creditor’s rights has been fully paid off, Pledgee is entitled to the right to stop Pledgor’s behavior, if such behavior is diminishing the value of the underlying assets. Pledgee is entitled to the right to request Pledgor to recover the value of the asset or provide additional guarantee to secure the proportion of lost.

If the Pledgor failed to recover the value of the asset nor can it provide addition guarantee, Pledgee might request early pay-off of the creditor’s rights. Pledgee might execute the rights to assume guarantee responsibility if the Pledgor refused the above.

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 8 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 9 Insurance of the underlying assets (Optional)

Not applicable

Clause 10 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the pledge is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Clause 11 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 12 The realization of the pledgee’s rights

Once guarantee responsibility is assumed, Pledgee is entitled to the right to request the execution immediately. The execution action includes but is not limited to compromise for discount, sale the assets through auction, etc. Pledgor should cooperate on the above mentioned actions. The proceeds received after the cost of execution, should be use to pay off the principle creditor’s rights under the principle contracts.

Under the circumstance that, the expiration of account receivables is earlier than the expiration of the principle creditor’s rights, the amount collected from the pledged account receivables by Pledgor should be deposited in the appointed account. And the deposit should still assume the guarantee responsibility for the undue principle creditor’s rights.

Pledgor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Pledgor should assume responsibility under this contract rather than plea with the execution in order.

Clause 13 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Pledgor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Pledgor remains to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Under the circumstances that, Pledgee provide the letter of credit, trade financing services to debtor under the principle contract, Pledgor won’t be notified but assumed guarantee responsibility. It is the Pledgee’s responsibility to register for the incremental business contract.

Clause 14 Statements and Commitments

Pledgor’s statement:

1. Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

2. Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

3. Signing and performing the contract is the true will of Pledgor, Pledgor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Pledgor. It is Pledgor’s responsibility to complete all required approvals, registrations, permits and filings.

4. All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

5. Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

6. Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

7. If the Collateral is construction in process, Pledgor committed that no other creditor’s rights is attached, if any, a written consent of abortion is obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

Clause 15 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 16 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

2. Pledgor impeded in any form Pledgee’s execution the rights.

3. Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

4. The statements of the Pledgor are untrue or in violation with its commitments

5. Pledgor is in violation with other rights and obligations agreed in this contract.

6. Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

7. Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

1) Request Pledgor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

6) Request compensation from Pledgor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 17 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 18 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 19 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 20 Attachments

Details of underlying assets.

Clause 21 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Pledgor should give the consent that, Pledgee might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. Special agreements between Pledgor and Pledgee, If the realization value of the underlying assets excesses the maximum amount of guarantee specified in Clause 3, Pledgor agree that the primary compensation to Pledgee will not restricted to the amount defined in Clause 3 and Clause 10.Pledgee entitled the compensation from the full proceeds from disposal.

Clause 22 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in six copies, Pledgor and the debtor hold one copy each, Pledgee holds three copies, the registration authority holds one copy, each copy has the same legal effect

Stamp of Pledgor

Signature of director or authorized representative

July 1, 2015

/s/ [COMPANY SEAL]

Stamp of Pledgee (if Pledgee is a corporation)

Signature of legal representative or authorized representative

July 1, 2015

Attachment:

Details of the underlying assets (Ref No: 2015zhenzhongyinbudiezi No.0015)

EX-10.2

Exhibit 10.2

Comprehensive Credit Line Contract

Reference No. : 2015zhenzhongyinbuexiezi No.0000465

Party A: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Party B: Bank of China, Buji Sub-branch.

Legal Representative:DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

The parties agree as follow.

Clause 1 Scope of Business

Satisfied by condition precedent defined in this contract, Party A is allowed to apply for recurring, temporary or one-off credit line from Party B in the form of a short-term loan, deposit account overdraft, bank acceptance, trade finance, bank guarantee, or other monetary financing or credit authorization business (“Specific credit line business”).

The trade finance business under this contract is included and limited to: international letter of credit, domestic letter of credit, import bill advance, shipping guarantee, packing credit, export bill purchase, export bill discount, import bill advance under LC, negotiation credit and other international and domestic trade finance business.

The bank guarantee business under this contract is including bank guarantee, standby letter of credit and all sorts of bank guarantee business.

Clause 2 Types and amount of credit line

Party B agrees to offer the following:

Currency in:	Renminbi
Amount:	Renmibi eighty two millions
	RMB  82,000,000.00
Types:	1. Loans : RMB40,000,000.00
	2.Trade financing: RMB12,000,000.00 3.Bank Acceptances: RMB30,000,000.00

Clause 3 Usage of credit lines

1. Within the credit line period, under the agreed upper limits on each type of credit line, Party A can use the credit line recurrently. If Party A needs to apply for the one-off credit line, a written application is required. And both parties should agree that Party B has the final say on whether and how the one-off credit line will be granted. Party B will notify Party A in written once the decision is made.

2. This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract

3. Unless otherwise agreed, the following business will not occupy the credit line under this contract.

1) Export bill purchase business with precisely matched bills, documents and certificates

2) Outwards letters of credit, bank guarantee and trade finance business which Party B agreed to act as confirming bank.

3) Any credit line business which guaranteed by Party A by deposits, government bonds, deposit certificates issued by Party B, bank acceptance, guarantee or standby letters of credit accepted by Party B

4) Any other business agreed by both parties.

The above defined businesses, although they will not occupy the credit limits under this contract, they will still be considered as inseparable part of the contract.

Clause 4 Application of specific credit line business

Written applications or separate contracts are required from Party A to apply for a specific credit line.

Clause 5 Period

The credit line defined in clause 2 under this contract will be started from the effective date and end on September 13, 2016.

Upon negotiation, both parties can extend the contract period by signing supplementary contracts. Party B will continue to provide credit lines under supplementary contracts. All terms and conditions under this contract have the equivalent legal effects and restrictions on the supplementary contracts.

The termination of a specific credit line will only occur when all the rights and obligations are fulfilled. The above period has no limitation on specific credit line under this contract.

Clause 6 Condition Precedents of specific credit line business

Party A should fulfill the following conditions precedent before applying for a specific credit line business

1) File the necessary documents, stamps and signatures in Party B in relating to this contract and all the specific credit line contract under this contracts

2) Open the necessary bank account

3) Make sure the required guarantee contracts are properly in place

4) Other conditions precedent required for specific credit line contracts

5) Other conditions precedent required by Party B

Clause 7 Guaranty

For all the liabilities occurred under this contract and the specific credit line contract affiliated to this contract should be guaranteed by the following:

Maximum Amount Guarantee provided by:

1) Springpower Technology (Shenzhen) Co. Ltd, a guarantee contract is signed separately;

2) Dangyu Pan, a guarantee contract is signed separately;

Collateral on the Maximum Amount

1) The collateral is provided by Shenzhen Highpower Technology Co. Ltd, a collateral contract is signed separately;

Under certain circumstances that Party A or the Guarantor might be unable to fulfill or make Party B believe they are unable to fulfill the contractual capacity, e.g: Guarantee Contracts are invalid, Party A is or will be under significant business difficulties or risks: deteriorated financials, litigation issues which might affect its repayment ability, Guarantors were found default in other contracts with Party B, devaluation, dismissal or damage of collaterals which might cause the value of the collaterals slaked or losses. Party B reserves the right to and Party A has the obligation to additional or replace the guarantor.

Clause 8 Statement and Commitment

1. Party A’s statement:

1) Party A is legally registered and operating, and owning the full civil rights required by this contract.

2) Signing and performing the contract is the true will of Party A, Party A has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Party A. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All documents and information provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities

2. Party A’s commitment:

1) Timely delivery of the financial statements and other relevant information, (including but not limited to annual, quarterly and monthly financial reports.

2) Cooperate in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations

3) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in time. Those circumstances include but are not limited to significant organizational changes, e.g. business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge of the encumbered assets, withdrawal, bankruptcy, dissolution and involvement in significant lawsuits.

5) As for undefined business practice, Party A is committed to follow Party B’s regulation and normal practice in daily operation.

6) Party A committed not to distribute bonus during the credit period

7) Agreed by both parties, for the purpose to ensure the Party B’s claims on credit funds and Party B’s convenience to monitoring the repayment progress, Party A should guarantee the proportion of sales fund received in Party A’s account opened with Party B over Party A’s total sales should be matching to the proportion of Party A’s credit line received from Party B over Party A’s total credit line received from financial institution.

8) At any time, credit balance does not exceed 100 million

Clause 9 Related party and related party transaction of Party A

Party A is not defined as Group Credit Customer by Party B in accordance with “Guidance of Risk Management by Commercial Banks for Granting Credit to Customer Groups”

Clause 10 Breach of Covenants

Any of the following situations would be considered as breach of contract covenant:

1. Party A did not perform the repayment obligation under this contract or the affiliated specific credit line contracts

2. Party A has not used the credit funds according to agreed purposes.

3. Party A’s statement in this contract or the affiliated specific contracts are untrue or in violation with Party A’s commitment in this or the affiliated specific contracts.

4. Under the circumstance defined in 2.4) in Clause 8, Party A refused to provide additional guarantee or replacement of new guarantor

5. Party B is or will be under significant business difficulties or risks: deteriorated financials, significant financial losses and loss of assets (including but not limited asset losses for fulfill guarantee obligations) or other financial crisis.

6. Party A is in violation with other rights and obligations agreed in this contract.

7. Party A breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

8. Guarantors breach the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situation noticed, Party B will perform the following in separate or all at the same time:

1) Request Party A or Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Party A’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Party A’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Party A and Party B.

6) Request compensation from Party A on the losses thereafter caused.

7) Party A’s deposit account in Party B will be hold in custody for debt pay off for the comprehensive credit line and specific credit line under this contract. All the undue liabilities were deeming due and entitled the immediate payoff from Party A’s restricted accounts. If the currency in deposit account is different from the currency of the liabilities, the exchange rate on the date of the hold in custody will be applied.

8) Real rights granted by way of security will be executed.

9) Assume the guarantee responsibility on Guarantors.

10) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

The following annexes and other annexes and single agreements commonly confirmed by both parties shall constitute an integral part of this Agreement and shall have the same equal legal force as this Agreement.

Annex 1: For Opening International L/C.

Annex 2: For Import Bill Advance.

Annex 3: For Packing Loan.

Annex 4: For Export Bill Purchase.

Annex 5: For Export Bill Discount under L/C.

Annex 6: For Opening Letter of Guarantee/ Standby L/C.

Annex 7: For Opening Domestic L/C.

Annex 8: For Seller Bill Advance under Domestic L/C.

Annex 9: For Buyer Bill Advance under Domestic L/C.

Annex 10: For Domestic L/C Negotiation.

Annex 11: For Outward Remittance Advance.

Annex 12: For Order Financing.

Annex 13: For Outward Remittance Advance (Domestic Trade).

Annex 14: Attached Provisions for Individual Cases. 

Clause 15 Other terms and conditions

1. Without Party B’s prior written approval, Party A is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Party A should give the consent that, Party B might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract. Party is exempted from punishment under this circumstance.

Clause 16 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Party A and Party B or their duly authorized agents, together with sealing by the company chop.

This contract will be print and signed in seven copies, Party A and the guarantors hold one copy each, Party B holds three copies, collateral registry authority holds one copy, each copy has the same legal effect.

/s/ Dangyu Pan

Stamp of Party A

Signature of director or authorized representative

/s/ [COMPANY SEAL]

Stamp of Party B

Signature of legal representative or authorized representative

Annex 1: For Opening International L/C

1. In case of any discrepancy between this Annex and the Credit Line Agreement (hereinafter referred to as the Agreement), this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a L/C.

3. Party A agrees Party B to deal with matters under the L/C in accordance with the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (□UCP500/□UCP600, same below) and assume the obligations and responsibilities arising therefrom.

4. Opening and amendment of a L/C:

(1) If Party B accepts Party A’s application for opening a L/C, Party B shall open a L/C according to the Application for Opening an International L/C submitted by Party A.

(2) If Party B requests Party A to submit relevant notes or documents for opening a L/C, such as trade contract, Party B shall not be deemed obliged to open a L/C on the basis of these notes or documents.

(3) Should Party A amend the L/C, Party A shall submit to Party B an Application for Amending International L/C. Party A agrees Party B to deal with matters under the L/C in accordance with the aforesaid Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce and assume the obligations and responsibilities arising therefrom. An amendment of L/C shall be binding upon Party A immediately after it is issued.

(4) Party B has the independent right to judge whether to amend a L/C. Party B has the right to refuse Party A’s application for amendment and to raise opinions on the contents of amendment. If amendment of the L/C involves amount, currency, interest rate or term and Party B thinks strengthening the surety’s obligations, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the surety’s signature and agreement on the Application for Amending International L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

(6) L/C-related contents in the Application for Opening International L/C and the Application for Amending International L/C shall be written in English. In case of any dispute arising from the applicant’s unclear handwriting or ambiguous meaning, Party A shall assume all the responsibilities arising therefrom.

(7) Party A shall pay Party B timely all the expenses arising from opening and amendment of the L/C (including relevant banking charges refused by a foreign beneficiary). The charging method shall comply with the stipulations of Party B.

5. External payment under the L/C:

(1) After receiving a document arrival notice from Party B within the validity of the L/C, Party A shall notify Party B of the document processing opinions within the time limit specified in the notice, or Party A shall be deemed as having no payment refusal opinion on the documents and having agreed Party B’s external payment/payment by acceptance/payment by commitment; if Party A notifies Party B of acceptance of the documents within the time limit specified in the notice and Party B agrees Party A’s document processing opinions, Party B may handle external payment/payment by acceptance/payment by commitment. Party A shall deposit provision according to the stipulations of the Application for Opening International L/C.

If Party A notifies Party B of acceptance of the documents but Party B disagrees Party A’s document processing opinions, Party B shall have the right to decide whether to refuse external payment only depending on whether the documents are compliant; if Party A agrees to provide Party B with full security money or other payment guarantee, Party B shall have the right to decide on waiving or reserving the right of refusal of external payment as the case may be.

(2) If Party A thinks there are nonconformities in the documents and presents a request of refusing external payment /payment by acceptance/payment by commitment to Party B within the time limit specified in the document arrival notice, Party A shall list all the nonconformities and submit two letters of payment refusal causes affixed with Party A’s seal. Party B has the right to deem the nonconformities stated in Party A’s letters of payment refusal causes as all the nonconformities raised by Party A. If Party B agrees the nonconformities raised by Party A, Party B may handle refusal of external payment. If Party B thinks that the nonconformities are not satisfied through review in accordance with international practice or the nonconformities are immaterial and not enough to constitute a reason for refusal of payment, Party B shall have the right to decide on external payment /payment by acceptance/payment by commitment and use the provision deposited by Party A to make external payment directly, and all the obligations and responsibilities arising therefrom shall be assumed by Party A.

(3) If the provision deposited by Party A is not enough to make advance to the accounts payable, Party A shall pay off the accounts payable. The interest rate and calculation of advance shall follow the stipulations of the related application.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) In case of any L/C-related amendment of the import/export trade contract after the L/C is opened, Party A shall notify Party B of such amendment immediately in writing;

(2) When Party B makes advance or payment by acceptance or commitment, Party B shall reserve the right to dispose all the documents/goods under the L/C or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the L/C in accordance with applicable laws and regulations or according to the opinions of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the L/C in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A retires documents or pays Party B in full the advance made by Party B.

With respect to the usance bill accepted or the deferred payment confirmed by Party B, Party A shall not request Party B to stop payment by any excuse and, within the scope permitted by laws and regulations, Party A shall waive the right to, by any excuse, apply to the people’s court for freezing or file a lawsuit for requesting stop payment under the L/C.

(3) The risks of loss, delay, omission or damage of business correspondence and documents under the L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening International L/C and the Application for Amending International L/C.

Annex 2: For Import Bill Advance

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting import bill advance.

3. If Party B accepts Party A’s application for import bill advance, Party B shall pay the presenting bank the documentary bill funds according to the currency and amount specified in the Application for Import Bill Advance accepted by Party B.

4. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the import bill advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the import bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the import bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the documentary bill financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s documentary bill financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means of deferred payment or any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

5. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under import to firstly repay Party B’s financing to Party A.

6. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Import Bill Advance.

Annex 3: For Packing Loan

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting a packing loan.

3. If Party B accepts Party A’s application for a packing loan, Party B shall pay the Party A the loan according to the currency and amount specified in the Application for Packing Loan accepted by Party B.

4. Party A shall use the total loan for purchasing, organizing production and arranging export and transportation of the exported goods under the L/C. Without Party B’s written consent, Party A shall not use the loan for any other purpose.

5. Party A shall satisfy the following conditions before it withdraws money:

(1) present a written withdrawal application prior to expiration of the usage term of the packing loan limit approved by Party B for Party A;

(2) provide relevant documents proving the loan purpose;

(3) submit the L/C original to Party B for keeping; and

(4) meet the preconditions agreed in the Agreement;

6. The payments for goods received by Party A after delivery, presentation of documents and handling exchange collection under the export L/C shall be the prime source of repayment of the loan hereunder. Party A hereby irrevocably agrees to entrust Party B to handle matters concerning exchange collection under the export L/C. Party A agrees Party B offset the loan principal and interest and expenses hereunder automatically with the incomes obtained from exchange collection under the export L/C.

If Party A handles a L/C for a packing loan while it applies to Party B for conducting export bill purchase, Party A agrees Party B to offset the loan principal and interest and expenses hereunder firstly with the incomes obtained from export bill purchase.

If Party A is unable to collect payments for goods on time due to delayed delivery, nonconforming documents or other causes, Party A shall repay the loan principal and interest and expenses hereunder timely with other capital source.

9. In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall timely provide Party B with the instructions of preparing goods with the packing loan and be ready for accepting Party B’s supervision and inspection at any time;

(2) Party A shall, within the validity of the L/C and the document presentation period agreed in the L/C, submit the documents under the L/C to Party B for handling matters concerning export bill purchase under the L/C;

(3) The export collection of Party A under the L/C shall be firstly used for repaying the loan principal and interest and the expenses hereunder.

If Party A is for any reason unable to collect funds, Party A shall unconditionally assume the responsibility of repaying the loan principal and interest and the expenses hereunder;

(4) In case of any serious difficult of production or sales of the goods under export, Party A shall notify Party B timely in written form.

10. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) Party A is for any reason unable to submit all documents under the L/C to Party B, or there are nonconformities detected through Party B’s verification in the documents provided by Party A, and Party A is unable to eliminate these nonconformities;

(2) The funds under the L/C, for any reason, cannot be collected on time according to the provisions of the L/C.

11. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Packing Loan.

Annex 4: For Export Bill Purchase

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting export bill purchase.

3. If Party B accepts Party A’s application for export bill purchase, Party B shall pay Party A the documentary bill funds according to the currency and amount specified in the Application for Export Financing accepted by Party B.

Where it is export bill purchase under the L/C and Party A and Party B conduct a packing loan at the same time, Party A agrees Party B to use the financing funds obtained from export bill purchase firstly for offsetting the principal and interest of the loan provided by Party B and relevant expenses under the packing loan, and Party B shall pay Party A the remaining balance.

4. Party A agrees Party B to use the incomes obtained from processing documents under export bill purchase as a source of documentary repayment for automatically offsetting Party B’s funds financed to Party A.

5. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the L/C /under collection or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

With respect to the export bill purchase of which the documents are nonconforming, where there is any element affecting normal collection of the accounts receivable, Party B shall have the right to request Party A to prepay the documentary bill funds or/and take other remedial measures specified in the Agreement.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under export;

(2) In case of any serious difficult of sales of the goods under export, Party A shall notify Party B timely in written form.

7. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) the foreign bank or payer refuses, delays or deducts payment due to nonconformities in documents or due to any other reason;

(2) there is turbulence, war or financial crisis at the location of the opening bank or the payer, or the opening bank or the payer goes into bankruptcy, or there is any other force majeure event, which may lead to that the foreign bank or payer refuses, delays or deducts payment;

(3) the foreign bank or payer refuses, delays or deducts payment due to loss or delay of documents or telecommunication failure during postal process.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Export Financing.

Annex 5: For Export Bill Discount under L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting export bill discount under L/C.

3. If Party B accepts Party A’s application for export bill discount under L/C, Party B shall pay Party A the discounting funds according to the currency and amount specified in the Application for Export Financing accepted by Party B.

4. Party A agrees Party B to use the incomes obtained from processing documents as a source of repayment for automatically offsetting Party B’s funds financed to Party A.

5. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A has obtained the documents by legitimate, good will and honest ways;

(2) Party A shall assume all responsibilities for the legitimacy of the draft-based transaction.

6. The following shall constitute or be deemed as Party A’s breach, except otherwise agreed in the Agreement:

(1) The accepting/paying bank has the following cases:

A. The financial status of the accepting/paying bank goes bad and Party B thinks the accepting/paying bank incapable of performing the obligation of payment;

B. The accepting/paying bank is or may be dissolved, revoked, shutdown or announced bankruptcy;

C. The accepting/paying bank is announced freezing of funds by the court or is issued payment injunction by the court;

D. The accepting/paying bank notifies that the funds are frozen or stopped by the court, or other property preservation measures are taken, which result in delayed payment;

E. The main assets of the accepting/paying bank are damaged, sealed, detained, frozen, confiscated, sold by auction, sold off or expropriated;

F. The accepting/paying bank is involved in any major lawsuit or arbitration case and Party B thinks possibly affecting the accepting/paying bank’s ability for performing the obligation of payment;

G. The accepting/paying bank is unable to pay relevant foreign exchange due to the foreign exchange control system of the located country;

H. The located country of the accepting/paying bank has political unrest, natural disaster or financial crisis and Party B thinks possibly cause that the accepting/paying bank is unable to make payment on time.

I. There is any other event at the located country of the accepting/paying bank that Party B thinks possibly affecting the accepting bank’s payment capacity.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Export Financing.

Annex 6: For Opening Letter of Guarantee/ Standby L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a letter of guarantee/standby L/C.

3. Opening and amendment of a letter of guarantee /standby L/C:

(1) If Party B accepts Party A’s application for opening a letter of guarantee / a standby L/C, Party B shall open a letter of guarantee /standby L/C according to both parties’ agreement.

(2) Party B shall refer to the Application for Opening Letter of Guarantee/Standby L/C submitted by Party A according to the detailed contents of the letter of guarantee/standby L/C applied by Party A. The final contents shall be subject to the letter of guarantee/standby L/C opened by Party B.

(3) Should Party A amend the letter of guarantee/standby L/C, Party A shall submit to Party B an Application for Amending Letter of Guarantee/Standby L/C.

(4) If amendment of the letter of guarantee/standby L/C involves amount, currency, interest rate or term or other provisions that Party B thinks necessary to add guarantee, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the counter-guarantor’s signature and agreement on the Application for Amending Letter of Guarantee/Standby L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the letter of guarantee/standby L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

4. Party A agrees, if there is any claim under the letter of guarantee/standby L/C within the validity of the letter of guarantee/standby L/C, and the beneficiary's claim documents comply with the stipulations of the letter of guarantee/standby L/C upon review by Party B, Party B shall have the right to make external payment directly with the provision deposited by Party A, and Party B shall also have the right to positively take Party A’s foreign or RMB account in Party B as provision for external payment.

If the provision deposited by Party A is not enough to make advance to the claim, Party A shall pay off the claim. Party A shall bear the interest from the date of advancement by Party B to the date of actual payment by Party A. The interest rate of advance shall be handled in accordance with the Application for Opening Letter of Guarantee/Standby L/C.

5. In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) If the letter of guarantee/standby L/C is reopened/forwarded by any other bank as having been entrusted, Party A agrees to assume all the risks and responsibilities of the reopening/forwarding bank caused due to reopening/forwarding of the letter of guarantee/standby L/C;

(2) Party A shall notify Party B immediately after occurrence of any case which affects Party B’s guarantee liability, including the execution, amendment, change and termination of the basic contract or basic transaction on which the letter of guarantee/standby L/C is based;

(3) Party A shall coordinate Party B to go through formalities for performance under external guarantee;

(4) The risks of loss, delay, omission or damage of business correspondence and documents under the letter of guarantee/standby L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

(5) Where the letter of guarantee/standby L/C has no definite date of ineffectiveness, no applicable foreign law or practice and no definite amount of guarantee, Party A agrees to make compensation for all risks, responsibilities and losses caused to Party B;

6. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening Letter of Guarantee/Standby L/C and the Application for Amending Letter of Guarantee/Standby L/C.

Annex 7: For Opening Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for opening a domestic L/C.

3. Party A irrevocably assumes the following responsibilities:

(1) Party A is willing to abide by the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and other relevant national laws and regulations. Party A agrees Party B to handle all maters under the L/C in accordance with the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and other relevant national laws and regulations. Party A agrees to assume all the responsibilities arising therefrom.

(2) Party A ensures that all the materials provided for Party B for the purpose of opening the L/C are genuine, complete and effective and the L/C opened has true trade background. If Party A provide Party B with false and/or incomplete and/or ineffective materials, and/or the L/C opened does not have any true trade background, Party A is willing to assume all the responsibilities arising therefrom.

(3) If the goods under the L/C are actually controlled by Party A before Party A pays Party B the funds under the L/C, Party A promises that Party B reserves the ownership of the goods.

(4) All the consequences arising from unclear handwriting or ambiguous meaning in the application shall be assumed by Party A.

4. Opening and amendment of a domestic L/C:

(1) If Party B accepts Party A’s application for opening a domestic L/C, Party B shall open a domestic L/C according to the Application for Opening Domestic L/C submitted by Party A. The final contents shall be subject to the domestic L/C opened by Party B.

(2) If Party B requests Party A to submit relevant notes or documents for opening a domestic L/C, such as trade contract, Party B shall not be deemed obliged to open a domestic L/C on the basis of these notes or documents.

(3) Should Party A amend the domestic L/C, Party A shall submit to Party B an Application for Amending Domestic L/C. Party A agrees Party B to deal with matters under the domestic L/C in accordance with the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China and assume the obligations and responsibilities arising therefrom. An Application for Amending Domestic L/C shall be binding upon Party A immediately after it is issued.

(4) Party B has the independent right to judge whether to amend a domestic L/C. Party B has the right to refuse Party A’s application for amendment and to raise opinions on the contents of amendment. If amendment of the domestic L/C involves amount or term and Party B thinks strengthening the surety’s obligations, Party B shall have the right to demand Party A to add security money, and/or demand Party A to obtain the surety’s signature and agreement on the Application for Amending Domestic L/C, and/or providing maximum guarantee, and/or providing other guarantee, or Party B shall have the right to refuse Party A’s application for such amendment.

(5) Amendment of the domestic L/C may not result in change of Party A’s other rights and obligations under the Agreement and this Annex.

(6) Domestic L/C-related contents in the Application for Opening Domestic L/C and the Application for Amending Domestic L/C shall be written in Chinese. In case of any dispute arising from the applicant’s unclear handwriting or ambiguous meaning, Party A shall assume all the responsibilities arising therefrom.

(7) Party A shall pay Party B timely all the expenses arising from opening and amendment of the domestic L/C (including relevant banking charges refused by the beneficiary). The charging method shall comply with the stipulations of Party B.

5. Payment under the domestic L/C:

(1) After receiving a document arrival notice from Party B within the validity of the domestic L/C, Party A shall notify Party B of the document processing opinions within the time limit specified in the notice, or Party A shall be deemed as having no payment refusal opinion on the documents and having agreed Party B’s payment/payment by commitment; if Party A notifies Party B of acceptance of the documents within the time limit specified in the notice and Party B agrees Party A’s document processing opinions, Party B may handle payment/payment by commitment. Party A shall deposit provision according to the stipulations of the Application for Opening Domestic L/C.

If Party A notifies Party B of acceptance of the documents but Party B disagrees Party A’s document processing opinions, Party B shall have the right to decide whether to refuse payment only depending on whether the documents are compliant; if Party A agrees to provide Party B with full security money or other payment guarantee, Party B shall have the right to decide on waiving or reserving the right of refusal of payment as the case may be.

(2) If Party A thinks there are nonconformities in the documents and presents a request of refusing payment /payment by commitment to Party B within the time limit specified in the document arrival notice, Party A shall list all the nonconformities and submit two letters of payment refusal causes affixed with Party A’s seal. Party B has the right to deem the nonconformities stated in Party A’s letters of payment refusal causes as all the nonconformities raised by Party A. If Party B agrees the nonconformities raised by Party A, Party B may handle refusal of external payment. If Party B thinks that the nonconformities are not satisfied through review according to practice or the nonconformities are immaterial and not enough to constitute a reason for refusal of payment, Party B shall have the right to decide on payment /payment by commitment and use the provision deposited by Party A to make external payment directly, and all the obligations and responsibilities arising therefrom shall be assumed by Party A.

(3) If the provision deposited by Party A is not enough to make advance to the accounts payable, Party A shall pay off the accounts payable.

6. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) In case of any domestic L/C-related amendment of the trade contract after the domestic L/C is opened, Party A shall notify Party B of such amendment immediately in writing;

(2) With respect to the deferred payment confirmed by Party B, Party A shall not request Party B to stop payment by any excuse and, within the scope permitted by laws, rules and regulations, Party A shall waive the right to, by any excuse, apply to the people’s court for freezing or file a lawsuit for requesting stop payment under the domestic L/C.

(3) The risks of loss, delay, omission or damage of business correspondence and documents under the domestic L/C during postal delivery, telecommunication delivery or other delivery process and the risks arising from Party B’s use of a third party service shall be assumed by Party A.

7. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Opening Domestic L/C and the Application for Amending Domestic L/C.

Annex 8: For Seller Bill Advance under Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Seller bill advance means the short-term financing that the bank provides the seller on the basis of the right of resource reserved in the domestic L/C business according to the documents submitted by the seller after the seller ships the goods.

3. Preconditions for seller bill advance:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting seller bill advance.

(2) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

4. Application for seller bill advance

When the Agreement becomes effective, Party A shall submit an Application for Seller Bill Advance under Domestic L/C for each seller bill advance business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

If Party B accepts Party A’s application for conducting seller bill advance, Party B shall pay Party A the documentary bill funds according to the amount agreed in the Application for Seller Bill Advance under Domestic L/C accepted by Party B.

Documentary bill term and other relevant matters shall be implemented specifically according to the Application for Seller Bill Advance under Domestic L/C hereunder.

6. Party A agrees Party B to use the incomes obtained from processing documents under seller bill advance as a source of documentary repayment for automatically offsetting Party B’s funds financed to Party A.

7. Interest and expenses

To handle the transaction, Party A agrees to pay the negotiating bank interest and expenses, specifically according to the stipulations of the Application for Seller Bill Advance under Domestic L/C hereunder.

8. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the domestic L/C or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

With respect to the seller bill purchase of which the documents are nonconforming, where there is any element affecting normal collection of the accounts receivable of the seller’s goods under the domestic L/C, Party B shall have the right to request Party A to prepay the documentary bill funds or/and take other remedial measures specified in the Agreement.

If the L/C payer refuses, delays or deducts payment due to nonconformities in documents, due to loss, delay or telecommunication failure of documents during postal process, or due to other reasons not attributable to Party B, Party B may claim Party A for the principal and interest, expenses and losses of all financing funds or the insufficient part. Party B also has the right to choose self disposal of the documents and goods under the seller bill advance herein and obtain compensation from the incomes obtained therefrom. Party B has the right to recourse Party A for the insufficient part.

If the incomes from processing documents or self disposal of documents and goods are not enough to repay the total financing funds, Party B shall have the right to make deduction actively from any account opened by Party A with Party A or from other collections. If Party B makes deduction directly from Party A’s account according to relevant stipulations of this Annex and the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate applicable to Party B.

9. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under the seller of the domestic L/C;

(2) In case of any serious difficult of sales of the goods under the seller of the domestic L/C, Party A shall notify Party B timely in written form.

10. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Seller Bill Advance under Domestic L/C.

Annex 9: For Buyer Bill Advance under Domestic L/C

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Buyer bill advance means the short-term financing that Party B provides Party A in the domestic L/C business at Party B’s request after Party B receives the documents submitted by the negotiating bank or the presenting bank, for paying the funds under these documents.

3. Preconditions for buyer bill advance:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting buyer bill advance.

(2) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

4. Application for buyer bill advance

Party A shall submit an Application for Buyer Bill Advance under Domestic L/C for each buyer bill advance business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

When the preconditions for buyer bill advance are met and Party B accepts Party A’s application for conducting buyer bill advance, Party B shall represent Party A to make external payment under the L/C according to the amount agreed in the Application for Buyer Bill Advance under Domestic L/C accepted by Party B.

Documentary bill term and other relevant matters shall be implemented specifically according to the Application for Buyer Bill Advance under Domestic L/C hereunder.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the buyer bill advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the buyer bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the buyer bill advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the documentary bill financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s documentary bill financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means of deferred payment or any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under the domestic L/C to firstly repay Party B’s financing to Party A.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Buyer Bill Advance under Domestic L/C.

Annex 10: For Domestic L/C Negotiation

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Negotiation means the action that Party B pays Party A the consideration after deducting the negotiating interest under the conditions of documents in compliance with the L/C. Negotiation is only limited to the negotiable deferred payment documentary credit.

3. Preconditions for negotiation:

(1) Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting negotiation.

(2) Party A shall present a written negotiation application;

(3) Party A has completed relevant vouchers and provided relevant documents and materials according to Party B’s requirements;

(4) Party A has handled the legal and administrative examination and approval procedures required for negotiation, and has submitted relevant examination and approval documents to Party B for inspection. Party B has the right to request Party A to provide the copies of the examination and approval documents or the photocopies in compliance with the originals;

(5) The L/C shall state applicable to the Measures for Settlement by Domestic Letter of Credit of the People’s Republic of China or its updated version effective on the date of opening of the L/C. The format and contents of the L/C shall be reviewed and accepted by Party B.

(6) Party A shall present documents within the presentation period and valid period of the L/C. Party A shall submit to Party B the complete L/C and the amendment original, which shall comply with documents upon review by Party B;

(7) The L/C shall be a negotiable deferred payment documentary credit and Party B is designated as the negotiating bank.

4. Application for negotiation

When the Agreement becomes effective, Party A shall submit an Application for Negotiation of Domestic L/C for each negotiation business (hereinafter referred to as the transaction) applied by Party A.

Transactions hereunder shall be mutually independent and shall comply with this Annex, related L/C and Party A’s application.

5. Payment

If Party B accepts Party A’s application for conducting negotiation, Party B shall pay Party A the negotiating funds according to the amount agreed in the Application for Negotiation of Domestic L/C accepted by Party B.

Negotiation term and other relevant matters shall be implemented specifically according to the Application for Negotiation of Domestic L/C.

6. Party A agrees Party B to use the incomes obtained from processing documents under negotiation as a source of repayment by negotiation for automatically offsetting Party B’s funds financed to Party A.

7. Interest and expenses

To handle the transaction, Party A agrees to pay the negotiating bank interest and expenses, specifically according to the stipulations of the Application for Negotiation of Domestic L/C hereunder.

8. Party A hereby confirms:

Party B shall reserve the right to dispose all the documents/goods under the domestic L/C or other possible security interests or property interests entitled by applicable laws once Party A submits documents to Party B and Party B pays Party A the financing funds. These interests shall be terminated when all the creditor’s rights of Party B are fully repaid.

If the L/C payer refuses, delays or deducts payment due to nonconformities in documents, due to loss, delay or telecommunication failure of documents during postal process, or due to other reasons not attributable to Party B, Party B may claim Party A for the principal and interest, expenses and losses of all financing funds or the insufficient part. Party B also has the right to choose self disposal of the documents and goods under negotiation herein and obtain compensation from the incomes obtained therefrom. Party B has the right to recourse Party A for the insufficient part.

If the incomes from processing documents or self disposal of documents and goods are not enough to repay the total financing funds, Party B shall have the right to make deduction actively from any account opened by Party A with Party A or from other collections. If Party B makes deduction directly from Party A’s account according to relevant stipulations of this Annex and the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate applicable to Party B.

9. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) Party A shall, according to Party B’s requirements, timely provide the instructions of the sales of the goods under the seller of the domestic L/C;

(2) In case of any serious difficult of sales of the goods under the seller of the domestic L/C, Party A shall notify Party B timely in written form.

10. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Negotiation of Domestic L/C.

Annex 11: For Outward Remittance Advance

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Outward remittance means that Party A, as the payer of the contract having been signed, makes payment through bank remittance according to the stipulations of the contract. In this Annex and relevant documents of this Annex, financing under outward remittance means the short-term financing that Party B makes advance of import funds for Party A according to the effective voucher and commercial documents under outward remittance in various businesses, including cash on delivery, remittance of profit, dividend and bonus, and advance payment for some types and service trade remittance.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting outward remittance advance.

4. If Party B accepts Party A’s application for outward remittance advance, Party B shall remit the financing funds to the payee indicated in the remittance application submitted by Party A according to the currency and amount agreed in the Application for Financing under Outward Remittance.

5. If Party A has provided Party B with all documents according to Party B’s requirements, it shall not be interpreted that Party B bears the obligation and responsibility of reviewing the genuine and legitimacy of the transaction that Party A is engaged in.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under the outward remittance advance or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the outward remittance advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the outward remittance advance in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means, including change of the payment method specified in the contract, deferred payment or by any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

(5) The currency used by Party A for performing the obligation of repayment shall be the same as the pricing currency of Party B’s business. When Party B makes deduction actively from Party A’s account according to relevant stipulations of the Contract and if the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate issued by Party B on the date of deduction.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods under import to firstly repay Party B’s financing to Party A.

Party A shall perform the obligation of prudence, diligence and care when it disposes the import goods under the Financing Contract. It shall be requested in the Contract for disposing the goods that the buyer of the goods should directly make payment to Party B’s account for repaying the financing principal and interest and other expenses hereunder.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Financing under Outward Remittance.

Annex 12: For Order Financing

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Order financing means the special trade financing that, as having been applied by Party A, Party B provides Party A for procurement, production and shipment of the goods under the order according to the trade contract or order submitted by Party A in order to support the goods preparation and shipment under Party A’s international trade and domestic trade.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting order financing.

4. If Party B accepts Party A’s application for order financing, Party B shall pay Party A the financing funds according to the currency and amount specified in the Application for Order Financing. Party B has the right to charge handling charges according to the rate specified in the Application for Order Financing and charge interest and default interest according to the term, interest rate and method specified therein.

5. Party A shall satisfy the following conditions before it withdraws money:

(1) present a written withdrawal application prior to expiration of the usage term of the order financing limit approved by Party B for Party A;

(2) meet the preconditions agreed in the Agreement.

6. Party A hereby irrevocably agrees as follows:

(1) The funds collected under the order after shipment and presentation of documents shall be the prime source of repayment of financing hereunder. According to the delivery and shipment time requested in the order or trade contract, Party A shall timely handle relevant settlement procedures of accounts receivable through Party B and submit to Party B for review the business invoice, shipping documents, export declaration (if any) and other relevant documents required by Party B. Under L/C or collection, Party B shall send the full unit of original documents to the opening bank (under L/C) or to the outward collection (under collection). Under the mode of sell on credit, Party B shall be the receiving bank and Party B shall be agreed to offset the financing principal and interest and expenses hereunder automatically with the funds collected under the order. If draft is settled under domestic trade, Party A shall handle collection or discount through Party B and agree Party B to offset the financing principal and interest and expenses hereunder automatically with the draft collection or discount funds.

(2) If Party A handles order financing while it applies to Party B for conducting packing loan, documentary bill, export discount, export invoice discounting and domestic invoice discounting or other trade financing business, arty A agrees Party B to offset the loan principal and interest and expenses hereunder firstly with the other financing funds.

(3) If Party A is unable to collect the funds under the order on time due to delayed delivery, nonconforming documents or other causes, Party A shall repay the loan principal and interest and expenses hereunder timely with other capital source.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to conduct the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

(1) The document, order and other relevant documents submitted are genuine, legitimate and effective;

(2) The total financing is for purchasing and organizing the production and arranging the export and transportation of the goods under the related trade contract/order. Without Party B’s written consent, Party A shall not use the financing for any other purpose.

(3) Party A shall timely provide Party B with the instructions of preparing goods and shipment with the order financing and be ready for accepting Party B’s supervision and inspection at any time;

(4) In case of any adverse element affecting payment collection under the order, including but not limited to: serious difficult in production, procurement and sales of the goods under the order, commercial dispute with the buyer or deterioration of the buyer’s operating situations, Party A shall timely notify Party B in written form.

8. Except the situations agreed in the Agreement, Party A’s failure in timely handling relevant settlement procedures of accounts receivable under the order financing through Party B shall constitute or be deemed as an event of default by Party A under the Agreement and this Annex.

9. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Order Financing.

Annex 13: For Outward Remittance Advance (Domestic Trade)

(Specially for RongHuoDa)

1. In case of any discrepancy between this Annex and the Agreement, this Annex shall prevail.

2. Outward remittance under domestic trade means that Party A, as the buyer of the goods contract having been signed, makes payment through bank remittance according to the stipulations of the contract.

In this Contract and the documents related to this Contract, financing under outward remittance (domestic trade) means that after Party A presents the needs of capital financing, while handling outward remittance for Party A, Party B, as the remitting bank of the remittance under outward remittance (domestic trade), provides Party A with external payment of funds, and later, Party A repays Party B the financing funds.

3. Party A shall meet the preconditions agreed in the Agreement if Party A applies to Party B for conducting outward remittance advance (domestic trade).

4. If Party B accepts Party A’s application for outward remittance advance (domestic trade), Party B shall remit the financing funds to the payee indicated in the remittance application submitted by Party A according to the currency and amount agreed in the Application for Outward Remittance Advance (Domestic Trade).

5. If Party A has provided Party B with all documents according to Party B’s requirements, it shall not be interpreted that Party B bears the obligation and responsibility of reviewing the genuine and legitimacy of the transaction that Party A is engaged in.

6. Party A hereby confirms:

(1) Party B reserves the right to dispose all the documents/goods under outward remittance advance (domestic trade) or other possible security interests or property interests entitled by applicable laws and regulations. If Party A reserves the right to dispose all the documents/goods under the outward remittance advance (domestic trade) in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party A agrees to transfer such right to Party B unconditionally within the maximum limit permitted by applicable laws, and Party A accepts Party B’s all actions and omissions of disposal of documents/goods. If Party B reserves the right to dispose all the documents/goods under the outward remittance advance (domestic trade) in accordance with applicable laws and regulations or according to the award of the competent court or arbitration agency, Party B shall reserve such right until Party A pays Party B in full the financing provided by Party B.

(2) When Party A applies to Party B for bearing documents/goods and repays Party B’s financing with the sales amount, Party A shall act as Party B’s consignee only, including but not limited to keeping relevant documents, handling storage, maintenance, transportation, processing, sales and insurance of goods under the documents, and keeping the payment for goods or depositing the payment for goods to the account designated by Party B. When selling goods to a third person, Party A shall show the third person of its such identity.

(3) Party A shall bear the expenses (including but not limit to insurance, storage, transportation and port charges) of the goods during the custody period. Party A promises to cover insurance for all possible risks according to the market price of the goods. It shall be indicated in the policy original that Party B is the insured and the policy original shall be submitted to Party B for keeping. In case of loss of the insured goods, Party B shall have the right to directly claim the insurance company for compensation.

(4) Without Party B’s permission, Party A shall not dispose the goods by means, including change of the payment method specified in the contract, deferred payment or by any non-monetary method or at a price lower than the market price. Party A shall not mortgage or pledge the goods to any others nor make the goods bound by any lien. Once required by Party B, Party A shall submit to Party B the detailed information of the account or sales revenue of the goods or the goods-related sales contract. Party B has the right to enter the warehouse at any time to examine the actual conditions of the goods or re-occupy the goods.

(5) The currency used by Party A for performing the obligation of repayment shall be the same as the pricing currency of Party B’s business. When Party B makes deduction actively from Party A’s account according to relevant stipulations of the Contract and if the currency of the account is different from the pricing currency, conversion shall be made according to the exchange rate issued by Party B on the date of deduction.

7. Supplementary commitments:

In addition to the contents agreed in the Agreement, in order to continue the business hereunder, Party A hereby makes the following supplementary commitments to Party B:

Party A promises to use the incomes obtained from sales of the goods to firstly repay Party B’s financing to Party A.

Party A shall perform the obligation of prudence, diligence and care when it disposes the goods under the Financing Contract. It shall be requested in the Contract for disposing the goods that the buyer of the goods should directly make payment to Party B’s account for repaying the financing principal and interest and other expenses hereunder.

8. Other specific matters for conducting the business hereunder shall be handled pursuant to the Application for Outward Remittance Advance (Domestic Trade) (Specially for RongHuoDa).

Attachment 14:

If there are discrepancies in contents in the attachment with this contract, this contract should prevail.

Specific to the 2^nd paragraph of Clause 3:” This contract will override all the credit line contracts previously signed by Party A and Party B. Upon the effective date of this contract, all the used and unused credit lines prior to this contract will be considered as used and unused credit lines under this contract”.

“all the credit line contracts previously signed” here means the contract signed with reference no of “2014zhenzhongyinbuexiezi No. 0000162.

EX-10.2(A)

Exhibit 10.2(a)

Maximum Amount Guaranty Contract

Reference No. : 2015zhenzhongyinbubaoezi No.0034

Guarantor: Springpower Technology (Shenzhen) Co., Ltd

Business Licences: 440306503295562

Legal Representative: Dangyu Pan

Address: Factory A, Chaoshun Industrial Zone, Renmin Road, Fumin Residential Area, Guanlan, BaoAn District,

Postal code: 518000

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 2802 9923 ; Facsimile: 2802 9923

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000465)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

2. The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

2. The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and ends upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): One hundred and three million

Amount (in numbers): 103,000,000.00

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

1. Guarantor is legally registered and operating, and owns the full civil rights required by this contract.

2. Signing and performing the contract is the true will of Guarantor, Guarantor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Guarantor. It is Guarantor’s responsibility to complete all required approvals, registrations, permits and filings.

3. All document and information provided by Guarantor to Creditor are true, complete, accurate and effective.

4. Guarantor is willing to cooperate in the check and inspection on its financial conditions performed by Creditor.

5. Guarantor did not conceal any existing liability upon the signing of the contract

6. Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to business splitting, merger and termination, disposal of major assets, restructuring, reorganization, joint venture arrangement with foreign capitals, changing of controlling shareholders or de facto control of Party A, capital reduction, liquidation, re-pledge the encumbered assets, withdrawal, bankruptcy, dissolution and involved in significant law suits.

Clause 10 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 6 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. Experiencing the termination of operation or bankruptcy.

5. In violation with other rights and obligations agreed in this contract.

6. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 11 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 12 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 13 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 14 Attachments

Not applicable

Clause 15 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 16 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Guarantor and Creditor or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

[COMPANY SEAL]

Stamp of Guarantor (if Guarantor is a corporation)

Signature of Authorized Representative

/s/ [COMPANY SEAL]

Stamp of Creditor (if Creditor is a corporation)

Signature of legal representative or authorized representative

EX-10.2(B)

Exhibit 10.2(b)

Maximum Amount Guaranty Contract

(Applicable if guarantor is natural person)

Reference No. : 2015zhenzhongyinbubaoezi No.0035

Guarantor: Dangyu Pan

Type of certification: identification card

Certification number:

Address: Building A2, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Telephone: 8968 6236 ; Facsimile: 8968 6298

Creditor: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both parties agree the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000465)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

2. The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitutes the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and ends upon the expiration of all the specific creditor’s rights.

2. The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and ends upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): One hundred and three million only

Amount (in numbers): 103,000,000.00

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 Types of guaranty

Joint responsibility guaranty.

Clause 5 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the guaranty is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Creditor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Guarantor should assume responsibility under this contract rather than plea with the execution in order.

Clause 6 The responsible period

The responsible period for this contract is two years after the establishment of the creditor’s rights under Clause 2

During the period, Creditor is entitled to the right to request the assumption of responsibility from Guarantor in full or in part on one or on all creditor rights.

Clause 7 The duration of action

During the period that the creditor’s rights have not been paid off when due, Guarantor is assumed responsible under the joint responsibility guarantee. Creditor is entitled to claim the rights within the responsible period defined in Clause 6, the duration of action started upon the request.

Clause 8 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Guarantor assumes guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Guarantor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Guarantor remains obligated to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Guarantor‘s consent is required, Pledgor Guarantor is entitled to the right to reject to assume the guarantee responsibility on the incremental portion.

Under the circumstances that, Creditor provide the letter of credit, trade financing services to debtor under the principle contract, Guarantor won’t be notified but assumed guarantee responsibility. It is the Creditor’s responsibility to registry for the incremental business contract.

Clause 9 Statements and Commitments

Guarantor’s statement:

a) Guarantor is a natural person who possesses the capacity for civil rights and civil conducts in People’s Republic of China to perform this contract. Party A can perform the civil conduct independently, no bad credit records such as debt overdue, overdue interest, malicious overdraft on credit card, no criminal records, qualified to be a legal guarantor.

b) Guarantor has full understanding about the terms and conditions set forth in the contract. It is Guarantor’s true will to provide guarantee to debtor.

c) The establishment of this contract will not constitute a breach of covenant of any other previous contract Guarantor engaged in.

d) All documents and information provided by Guarantor to Creditor are true, complete, accurate and effective.

e) Guarantor is willing to cooperate in the checking and inspection of its financial conditions performed by Creditor.

f) Guarantor did not conceal any existing liability upon the signing of the contract

g) Inform the Creditor in time for any issues might affect Guarantor’s performing capability, which including but not limited to losses of assets, transfer, donation, assume responsibility on liabilities, involved in significant law suits or disputes.

h) If the Guarantor is married, make sure the sponsor’s consent is obtained.

Clause 10 Authorization of access to personal information

Guarantor authorizes the access of personal information in the personal credit information database in the People’s Bank of China to Creditor under the following circumstances.

1. Reference check on the Guarantor’s credit status.

2. Reference check on the Guarantor’s guarantee status.

3. After-loan management on the personal credit and guarantee status

4. Accept the credit line application of which the Guarantor guaranteed or to be legal representative or one of the funders.

Clause 11 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Guarantor is in violation with the previous terms of the contract.

2. The statements of the Guarantor is untrue or in violation with its commitments

3. The occurrence of issues defined under the point 7 of clause 9 which might affect the Guarantor’s financial position and performing capability.

4. In violation with other rights and obligations agreed in this contract.

5. Guarantor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Creditor will perform the following in separate or all at the same time:

1) Request Guarantor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Guarantor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Guarantor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Guarantor and Creditor

6) Request compensation from Guarantor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 12 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 13 Change, Modification, Termination and Partial invalidity

Upon negotiation and agreement by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 14 Applicable Law and Resolution for Dispute

1. This contract is entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 15 Attachments

Sponsor’s consent.

Clause 16 Other terms and conditions

1. Without Creditor’s prior written approval, Guarantor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Guarantor should give the consent that, Creditor might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

Clause 17 Effectiveness of the contract

This contract is established and entered into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in five copies, Guarantor and the debtor hold one copy each, Creditor holds three copies; each copy has the same legal effect

/s/ Dangyu Pan

Signature of Guarantor and Sponsor

/s/ [COMPANY SEAL]

Stamp of Creditor (if Pledgee is a corporation)

Signature of legal representative or authorized representative

EX-10.2(C)

Exhibit 10.2(c)

Collateral Contract

Reference No. : 2015zhenzhongyinbudiezi No.0014A

Pledgor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building 1, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000465)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitute the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and end upon the expiration of all the specific creditor’s rights.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): forty eight million two hundred forty six thousand six hundred and twelve only

Amount (in numbers): 48,246,612.00

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

During the period of collateral, if the Collateral is broken or damaged, Pledgee is entitled to the primary rights for compensation from insurance, compensation or subsidy, Pledgee can withdraw the compensation amount even thought the collateral period is undue

If the Collateral is buildings, Pledgor should notify the Pledgee immediately after the Pledgor acknowledged the removal of the building. If the compensation of the removal is through change of property, Pledgor should coordinate the paid off of the principle of creditor’s rights with debtor and Pledgee per Pledgee’s request, or replace the Collateral with the new building or new collateral per Pledgee’s request. After the original Collateral is lost and the new Collateral is not yet registered, Pledgor should provide additional guarantee by qualified guarantor. For the compensation that is in the form of cash, Pledgee is entitled to the primary rights from compensation, and entitled to the right to request the Pledgor to deposit the cash into the appointed custody accounts, and subsequent security by deposit contract should be signed and effected.

Clause 5 The registration

With 15 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 10 days after the change. 

Clause 6 The possession and management of the Collateral

The possession and management of the Collateral will be on the Pledgor, however, the certifications of rights should be under the custody of the Pledgee. Pledgor should accept the inspection and check from time to time.

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Without the written consent of the Pledgee, Pledgor is not allowed to transfer, lend, invest, or restructure the Collateral. With Pledgee’s written consent, the proceedings of disposal should be deposited in the appointed accounts.

Clause 7 The circumstances that the value of the Collaterals is diminished

Before the creditor’s rights has been fully paid off, Pledgee is entitled to the right to stop Pledgor’s behavior, if such behavior is diminishing the value of the underlying assets. Pledgee is entitled to the right to request Pledgor to recover the value of the asset or provide additional guarantee to secure the proportion of lost.

If the Pledgor failed to recover the value of the asset nor can it provide addition guarantee, Pledgee might request early pay-off of the creditor’s rights. Pledgee might execute the rights to assume guarantee responsibility if the Pledgor refused the above.

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 8 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 9 Insurance of the underlying assets (Optional)

Not applicable

Clause 10 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the pledge is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Clause 11 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 12 The realization of the pledgee’s rights

Once guarantee responsibility is assumed, Pledgee is entitled to the right to request the execution immediately. The execution action includes but is not limited to compromise for discount, sale the assets through auction, etc. Pledgor should cooperate on the above mentioned actions. The proceeds received after the cost of execution, should be use to pay off the principle creditor’s rights under the principle contracts.

Under the circumstance that, the expiration of account receivables is earlier than the expiration of the principle creditor’s rights, the amount collected from the pledged account receivables by Pledgor should be deposited in the appointed account. And the deposit should still assume the guarantee responsibility for the undue principle creditor’s rights.

Pledgor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Pledgor should assume responsibility under this contract rather than plea with the execution in order.

Clause 13 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Pledgor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Pledgor remains to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Under the circumstances that, Pledgee provide the letter of credit, trade financing services to debtor under the principle contract, Pledgor won’t be notified but assumed guarantee responsibility. It is the Pledgee’s responsibility to register for the incremental business contract.

Clause 14 Statements and Commitments

Pledgor’s statement:

1. Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

2. Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

3. Signing and performing the contract is the true will of Pledgor, Pledgor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Pledgor. It is Pledgor’s responsibility to complete all required approvals, registrations, permits and filings.

4. All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

5. Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

6. Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

7. If the Collateral is construction in process, Pledgor committed that no other creditor’s rights is attached, if any, a written consent of abortion is obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

Clause 15 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 16 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

2. Pledgor impeded in any form Pledgee’s execution the rights.

3. Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

4. The statements of the Pledgor are untrue or in violation with its commitments

5. Pledgor is in violation with other rights and obligations agreed in this contract.

6. Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

7. Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

1) Request Pledgor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

6) Request compensation from Pledgor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 17 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 18 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 19 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 20 Attachments

Details of underlying assets.

Clause 21 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Pledgor should give the consent that, Pledgee might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. Special agreements between Pledgor and Pledgee, If the realization value of the underlying assets excesses the maximum amount of guarantee specified in Clause 3, Pledgor agree that the primary compensation to Pledgee will not restricted to the amount defined in Clause 3 and Clause 10.Pledgee entitled the compensation from the full proceeds from disposal.

Clause 22 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in six copies, Pledgor and the debtor hold one copy each, Pledgee holds three copies, the registration authority holds one copy, each copy has the same legal effect

Stamp of Pledgor

Signature of director or authorized representative

July 13, 2015

/s/ [COMPANY SEAL]

Stamp of Pledgee (if Pledgee is a corporation)

Signature of legal representative or authorized representative

July 13, 2015

Attachment:

Details of the underlying assets (Ref No: 2015zhenzhongyinbudiezi No.0014A)

EX-10.2(D)

Exhibit 10.2(d)

Collateral Contract

Reference No. : 2015zhenzhongyinbudiezi No.0014 B

Pledgor: Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building 1, Luoshan Industrial Zone, Longgang District, Shenzhen

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 8968 6236 ; Facsimile: 8968 6298

Pledgee: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 2827 4825 ; Facsimile: 2827 0847

To guarantee the performing of the principle contract stated in Clause 1, both party agrees the following:

Clause 1 Principle Contract

1. The principle contract is “Comprehensive credit contract (2015zhenzhongyinbuexiezi No 0000465)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

2. The principle contract is “Fixed asset loan contract (2012zhenzhongyinbujiezi No 00002)” and its supplements signed between Creditor and Debtor, Shenzhen Highpower Technology (Shenzhen) Co., Ltd

Clause 2 Principle Creditor’s rights and the period

Unless otherwise agreed, the creditor’s rights under the following contracts and the creditor’s rights occurred before the engagement of this contract constitute the principle creditor’s rights of this contract.

1. The creditor’s right occurred under comprehensive contract starting from the date of effectiveness, and end upon the expiration of all the specific creditor’s rights.

2. The creditor’s right occurred under fixed assets loan contract starting from the date of effectiveness, and end upon the repayment date defined on the contract.

Clause 3 The maximum amount guaranteed

1. The maximum amount assumed guaranteed is:

Currency: Renminbi

Amount (Capital letter): thirty five million three hundred and sixty one thousand seven hundred and seven only

Amount (in numbers): 35,361,707.00

2. The principle creditor’s rights under the principle contract constitute the principle creditor’s rights under this contract, which includes: loan principle, interest, compound interest, punitive interest, liquidated damage, the cost for realization of the creditor’s right (includes but not limited to the announcement fee, delivery fees, appraisal fees, legal fees, travel expenses, assessment fees, auction fees, the property preservation fee, compulsory execution fee and etc), as well as the Pledgee’s loss due to the breach of covenants.

The sum of the above terms constitutes the maximum amount of guaranteed for this contract.

Clause 4 The Collateral

For details of the collateral please refer to the appendix” Details of the underlying assets”.

During the period of collateral, if the Collateral is broken or damaged, Pledgee is entitled to the primary rights for compensation from insurance, compensation or subsidy, Pledgee can withdraw the compensation amount even thought the collateral period is undue

If the Collateral is buildings, Pledgor should notify the Pledgee immediately after the Pledgor acknowledged the removal of the building. If the compensation of the removal is through change of property, Pledgor should coordinate the paid off of the principle of creditor’s rights with debtor and Pledgee per Pledgee’s request, or replace the Collateral with the new building or new collateral per Pledgee’s request. After the original Collateral is lost and the new Collateral is not yet registered, Pledgor should provide additional guarantee by qualified guarantor. For the compensation that is in the form of cash, Pledgee is entitled to the primary rights from compensation, and entitled to the right to request the Pledgor to deposit the cash into the appointed custody accounts, and subsequent security by deposit contract should be signed and effected.

Clause 5 The registration

With 15 days after the sign-off of this contract, Pledgor and Pledgee should finish the registry in the authorities.

Pledgor and Pledgee should file a change in registry with the authorities within 10 days after the change. 

Clause 6 The possession and management of the Collateral

The possession and management of the Collateral will be on the Pledgor, however, the certifications of rights should be under the custody of the Pledgee. Pledgor should accept the inspection and check from time to time.

Pledgor should properly maintain the Collateral to ensure the safety and well-being of the Collaterals, Pledgor should take responsibility on daily maintenance and repairs.

Without the written consent of the Pledgee, Pledgor is not allowed to transfer, lend, invest, or restructure the Collateral. With Pledgee’s written consent, the proceedings of disposal should be deposited in the appointed accounts.

Clause 7 The circumstances that the value of the Collaterals is diminished

Before the creditor’s rights has been fully paid off, Pledgee is entitled to the right to stop Pledgor’s behavior, if such behavior is diminishing the value of the underlying assets. Pledgee is entitled to the right to request Pledgor to recover the value of the asset or provide additional guarantee to secure the proportion of lost.

If the Pledgor failed to recover the value of the asset nor can it provide addition guarantee, Pledgee might request early pay-off of the creditor’s rights. Pledgee might execute the rights to assume guarantee responsibility if the Pledgor refused the above.

If the diminished value is due to the irresistible reason, Pledgor should take action to avoid further deteriorate and notify the Pledgee in writing immediately

Clause 8 Interest generated from the account receivables

The interest generated from the pledged account receivables should be assumed responsible to the creditor’s rights after the deduction of the cost of collecting those interests.

Clause 9 Insurance of the underlying assets (Optional)

Not applicable

Clause 10 The guarantee responsibilities

Under the circumstance that, the debtor of principle contract failed to pay off the creditor’s rights when due (on due date or early termination date), the pledge is assumed to be responsible in accordance with this contract.

The due date in the previous sentence means the repayment date agreed in the principle contract. The early termination date is the termination date request by creditor per law or per agreements under the principle contracts.

Clause 11 The realization of the pledgee’s rights

Once guarantee responsibility established, Pledgee is entitled to the right to request the execution of the assumption of the guarantee ‘s responsibility in accordance to law and regulation.

Pledgee should execute the rights within the duration of action.

Clause 12 The realization of the pledgee’s rights

Once guarantee responsibility is assumed, Pledgee is entitled to the right to request the execution immediately. The execution action includes but is not limited to compromise for discount, sale the assets through auction, etc. Pledgor should cooperate on the above mentioned actions. The proceeds received after the cost of execution, should be use to pay off the principle creditor’s rights under the principle contracts.

Under the circumstance that, the expiration of account receivables is earlier than the expiration of the principle creditor’s rights, the amount collected from the pledged account receivables by Pledgor should be deposited in the appointed account. And the deposit should still assume the guarantee responsibility for the undue principle creditor’s rights.

Pledgor’s rights on other guarantee contracts or collateral contracts should not have an impact on the performing of this contract. Pledgor should assume responsibility under this contract rather than plea with the execution in order.

Clause 13 The relationship between this contract and the principle contract

Upon the termination or early termination of the principle contract, Pledgor assumed guarantee responsibility on occurred debt.

The change of principle contract will not be informed to the Pledgor unless under the following circumstances, change of currency, interest rate, amount, period, or other terms which might affect the increase of the amount of the principle creditor’s rights or extend the effective period of the principle contract. Pledgor remains to assume the guarantee responsibility to the changed principle contract.

Under the previous stated circumstance which Pledgor’s consent is required, Pledgor is entitled to the right to reject the assumption of the guarantee responsibility on the incremental portion.

Under the circumstances that, Pledgee provide the letter of credit, trade financing services to debtor under the principle contract, Pledgor won’t be notified but assumed guarantee responsibility. It is the Pledgee’s responsibility to register for the incremental business contract.

Clause 14 Statements and Commitments

Pledgor’s statement:

1. Pledgor is legally registry and operating, and owning the full civil rights required by this contract.

2. Pledgor committed that no joint owner attached on the Collateral, or if any, written consents has been obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

3. Signing and performing the contract is the true will of Pledgor, Pledgor has been granted all necessary authorizations in effect before signing the contract. The contract does not form a default for other contracts signed and performed by Pledgor. It is Pledgor’s responsibility to complete all required approvals, registrations, permits and filings.

4. All documents and information provided by Pledgor to Pledgee are true, complete, accurate and effective.

5. Pledgor did not conceal all the other creditor’s rights, factoring and financing attached to the underlying assets.

6. Under the circumstances that new creditor’s rights are attached on the underlying assets or significant argue and dispute on the underlying contracts, Pledgor should notify Pledgee immediately.

7. If the Collateral is construction in process, Pledgor committed that no other creditor’s rights is attached, if any, a written consent of abortion is obtained. Pledgor agreed to hand over the written consent to Pledgee for custody.

Clause 15 Default of the contract

Pledgor’s absent or delay in the registration procedure will be considered the event of default. Pledgee’s loss from the default should be compensated by Pledgor.

Clause 16 Breach of covenants

Any of the following situations would be considered as breach of contract covenant:

1. Pledgor is in violation with the previous terms of the contract, transferred or disposed all or part of the assets.

2. Pledgor impeded in any form Pledgee’s execution the rights.

3. Under the clause 7 of this contract that diminished of the value of the accounts receivables, and Pledgor cannot provide additional guarantee.

4. The statements of the Pledgor are untrue or in violation with its commitments

5. Pledgor is in violation with other rights and obligations agreed in this contract.

6. Pledgor is or will be under significant business changes such as termination of operation, dismissal or bankruptcy.

7. Pledgor breaches the covenants on other credit line contracts with Party B or other affiliated institutions of Bank of China.

When any of the above mentioned situations noticed, Pledgee will perform the following in separate or all at the same time:

1) Request Pledgor to rectify within a definite time.

2) Reduce, temporarily pause or permanently terminate Pledgor’s Credit limit in part or in all

3) Temporarily pause or permanently terminate in part or in all of Pledgor’s application on specific credit line under this contract.

4) Announce the immediate expiration on all the credit lines granted under this contract and affiliated specific credit line contracts.

5) Terminate or release this contract, terminate or release in part or in all of the affiliated specific credit line contracts as well as the other contracts signed between Pledgor and Pledgee

6) Request compensation from Pledgor on the losses thereafter caused.

7) Assume the guarantee responsibility on Guarantors.

8) Other necessary procedures on Party B’s concern

Clause 17 Rights reserved

Either party might reserve part of or all of the rights under this contract and the affiliated specific credit line contracts, this does not imply the party has surrendered or remitted the unperformed rights and obligations.

Either party might sometimes tolerate, extend or delay the execution of certain rights, this does not deem as the party has surrendered or remitted the rights.

Clause 18 Change, Modification, Termination and Partial invalid

Upon negotiation and agreed by both parties, this contract can be changed and modified, the written record of the changes and modifications should form the inseparable part of this contract.

Unless ruled by law or both parties formed a separate agreement, the contract would not be terminated prior to all the rights and obligations defined are fulfilled.

Unless ruled by law or both parties formed a separate agreement, the void of single terms under this contract should no invalid other contract under this contract.

Clause 19 Applicable Law and Resolution for Dispute

1. This contract entered into according with the People’s Republic of China, and applicable to the law of the People’s Republic of China.

2. The resolution of dispute should be appealed in Party B or other Bank of China subsidiaries defined in this contract or other affiliated contracts

Clause 20 Attachments

Details of underlying assets.

Clause 21 Other terms and conditions

1. Without Pledgee’s prior written approval, Pledgor is not allowed to transfer the rights and obligations under this contract to 3^rd Parties.

2. Pledgor should give the consent that, Pledgee might somehow authorize other affiliated institutions of Bank of China to perform the obligation. The performing party is entitled to all the rights and obligations under this contract and the affiliated credit line contracts, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The title and name of business product is for business purposes, will not used for interpretation of the contract terms and the rights and obligations.

6. Special agreements between Pledgor and Pledgee, If the realization value of the underlying assets excesses the maximum amount of guarantee specified in Clause 3, Pledgor agree that the primary compensation to Pledgee will not restricted to the amount defined in Clause 3 and Clause 10.Pledgee entitled the compensation from the full proceeds from disposal.

Clause 22 Effectiveness of the contract

This contract is established and enters into effective upon signing or sealing by the legal representatives (or person-in-charge) of Pledgor and Pledgee or their duly authorized agents, together with sealing by the company chop.

The pledge is established upon the effectiveness of this contract.

This contract will be printed and signed in six copies, Pledgor and the debtor hold one copy each, Pledgee holds three copies, the registration authority holds one copy, each copy has the same legal effect

Stamp of Pledgor

Signature of director or authorized representative

July 13, 2015

/s/ [COMPANY SEAL]

Stamp of Pledgee (if Pledgee is a corporation)

Signature of legal representative or authorized representative

July 13, 2015

Attachment:

Details of the underlying assets (Ref No: 2015zhenzhongyinbudiezi No.0014B)

Underlying asset: Land use right of industrial land

Amount

Valuation amount: 35,361,707.00

Certification of rights: “Certification of land use right of state-owned land” huifuguoyong(2007) No.13021920300

Location: Shangliao County Ma’an Town Huizhou city

EX-10.3

Exhibit 10.3

Working Capital Loan Contract

Reference No. : 2015zhenzhongyinbujiezi No.00053

Party A: Springpower Technology (Shenzhen) Co., Ltd

Business Licences: 440306503295562

Legal Representative: Dangyu Pan

Address: Factory A, Chaoshun Industrial Zone, Renmin Road, Fumin Residential Area, Guanlan, BaoAn District,

Postal code: 518000

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen, Telephone: 2802 9923 ; Facsimile: 2802 9923

Party B: Bank of China, Buji Sub-branch.

Legal Representative: Li Yanshan

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 0755-2827 4825; Facsimile: 0755-2827 0847

This contract is the affiliated specific credit contract under the “Comprehensive Credit Line Contract” (Reference No.: 2015zhenzhongyinebuxiezi No. 0000466), which is signed by Springpower Technology (Shenzhen) Co., Ltd and Bank of China, Buji Sub-branch.

The parties agree as follow.

Clause 1 Amount

Party B agrees to provide the following loan:

Currency in:	RMB
Amount:	RMB twenty millions only
	RMB  20,000,000.00

Clause 2 Period

The period of the loan is 12 months starting from the first withdrawal date in part or in whole. It is Party A’s obligation to withdraw funds on the date as agreed. Any late withdrawal will not result in delay/extension of repayment.

1

Clause 3 Use of loan

Purpose of loan: Purchase of raw materials

Party A is prohibited from changing the use of loan without Party B’s written approval. The restrictions include but are not limited to changing the use of loan to fixed assets or equity investments, as well as production activities prohibited by the central governments.

Clause 4 lending rate and interest calculations

Lending rate is floating rate, which is reset every six months starting from the first withdrawal date. The rate resetting date is the first day of each floating period.

For each withdrawal in installments:

■ RMB floating rate

A. First withdrawal (during the first floating period) interest rate is the twelve-month benchmark lending interest rate, set by Interbank rates, plus 126.25;

B. On the interest resetting date, the new interest rate is the spot one-year lending interest rate, benchmarked by Interbank rates, plus 126.25 on all outstanding loan amounts.

2. Interest calculation

Interest is calculated starting from the actual withdrawal date on the actual amount of money withdrawn and the number of days outstanding.

Interest calculation formula: Interest = Principal × actual number of days × daily rate.

Daily rate calculation is: daily rate = APR / 360.

3. The method of interest settlement

Interest settlement takes place on the 20th of each month, the 21st is the interest payment date.

If the final loan principal payment date is different from the interest payment date, the borrower should pay off all interest on the principal payment date.

4. Penalty interest

(1) For the loan overdue or violated use the loan purpose, penalty interest rate will apply to the loan amount that is overdue or misappropriated from the date of overdue or misappropriation until the principal and interest are paid off.

On both overdue and misappropriation of loans, a higher penalty interest rate shall be charged.

(2) If the borrower does not pay interest and/or penalty interest by the interest payment date, the interest is calculated based on Clause 3 and 4.

(3) Penalty rate

■ The penalty interest rate on floating-rate loans

According to the floating period and the method of floating as agreed in Clause 1, the penalty interest rate of the overdue loan shall be the agreed interest rate plus 50%, and the penalty interest rate of the misappropriated loan shall be the agreed interest rate plus 100%;

Clause 5 Withdrawal Conditions

Withdrawal must meet the following conditions:

1. This contract and its attachments have become effective.

2. Party A has provided guarantees requested by Party B, and the guarantee contract has become effective and has accomplished legal procedures of approval and registration.

3. Party A has provided Party B with loan documents, seals, personnel list, specimen signature, and complete the relevant evidence.

4. Party A has opened the account for fulfilling this contract requested by Party B.

5. Party A should submit written withdrawal application, documentary proof for using of loans and complete the relevant formalities for withdrawal before 5 banking days.

6. Party A has submitted resolution books and power of attorney signed by the board or other authorities to Party B.

Withdrawal can be refused by Party B if Party A has not met the above conditions, but agreed by Party B.

Clause 6 Date and method of withdrawal

1. All loans should be withdrawn in 30 days from July 14, 2015.

2. Party B has the right to refuse the withdrawal application of unused loan which is over the date of withdrawal.

Clause 7 Payment of the loan

1. The account

The loan should be granted and paid through the account opened by Party A:

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

2. The way of payment

(1) The way of payment should be in accordance with laws and regulations, regulatory requirements and the contract. The way of single payment of the Loan should be approved in written withdrawal application. Party B has the right to change the way of payment or stop providing the loan if the way of payment in the application doesn’t meet the requirement.

(3) Borrower makes the payment on its own.

(4) The change of payment. The way of payment should be changed when the payment, credit rating or other conditions of Party A has changed after submitting withdrawal application. Party A should provide the written change application, should resubmit the withdrawal application and documentary proof for using of loans if the sum, payment object or the use of loans has changed.

3. The specific requirements of entrusted payment

(1) Entrusted payment. Party B pay to the specified account directly which is written in this contract, including the name of account, account number and the sum of payment.

(2) To provide the transaction information. Party A should provide the account of loans, the account information of counterparty and relevant documents when entrusted payment. All document provided to Party B should be true, integral and effective, or Party B does not assume any responsibility for failed transaction, and occurred repayment obligations do not be affected.

(3) Party B’s obligations under the entrusted payment

A. Party B pay to the specified account after examination and approval of Party A’s commission books and other related transaction information when entrusted payment.

B. If Party B found that the proof materials and other related trading purposes material provided by Party A does not comply with this contract or the presence of other defects, Party B has the right to require Party A to supplement, replace, description or re-submit the relevant materials. Before these materials are submitted, Party B has the right to refuse the issuance and payment of the relevant amounts.

C. Party B will assume no responsibility and the generated obligations of Party A will be not affected if Party B cannot pay the loan to the counterparty in time in accordance with payment order of Party A because of the refund by opening bank of the counterparty. Party A hereby authorizes Party B to freeze the fund returned by opening bank of the counterparty. In this case, Party A shall resubmit the payment order and use proven materials and other related transaction materials.

(4) Party A shall not piecemeal way to circumvent the trustee to pay Party B.

5. Party B has right to redefine the terms of payment and loan disbursement or stop the loan if the following situations occurred:

(1) Party A violates the contract to circumvent entrusted payment of Party B by piecemeal way.

(2) Party A's credit status drops or main business profitability is not good.

(3) The use of loan is abnormal.

(4) Party A fails to provide the records and information of the loan requested by Party B timely.

(5) Party A contravenes this section to use the loan.

Clause 8 Repayment

1. Party A shall specify the following account as capital recovery account and provide the information of this account. Party B has the right to ask Party A to explain inflows and outflows of large-sum and abnormal capital, as well as monitor capital recovery account.

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

2. Except otherwise agreed, on the expiry date, Party A must repay all the loans under this contract.

If Party A wants to change the plan of repayment, a written application confirmed in writing by both parties jointly should be submitted in 10 banking days before the loans maturity.

3. Unless otherwise agreed, Party A has the right to decide repayment order of the principal or interest. If there are several expiring loans or overdue loans which are repaid in installment way under this contract, Party B has the right to decide the liquidation sequence of a repayment. Party B has the right to decide the priority of the repayment order if multiple contracts expire at the same time.

4. Unless otherwise agreed, Party A can repay in advance, but Party A should notice Party B in written 15 banking days advance. The amount of the first advance payment used to repay the final maturity of the loan, in reverse order to repay the loans.

5. Party A must deposit funds in the following account three banking days advance of every expiring principle with interest. Party B has the right to take the funds from the account on the expiry date.

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

Clause 9 Guarantee

1. To ensure that borrowing under this agreement is repaid, the following guarantees shall be adopted:

1) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0037) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

2) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0038) signed by HUIZHOU HIGHPOWER TECHNOLOGY CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

3) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0039) signed by DAGNYU PAN (Guarantor) And Party B. Guarantor provides the maximum amount guarantee.

4) This contract is the main contract of mortgage Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0015) signed by GANZHOU HIGHPOWER TECHNOLOGY CO., LTD. (Guarantor) And Party B. Guarantor provides the maximum amount mortgage.

2. Under certain circumstance, Party B believes that will affect the capacity for fulfilling the contract of Party A or Guarantor, or Guarantee Contracts are invalid, revoked or dissolved, or the financial position of Party A/Guarantor deteriorate or Party A/Guarantor involved in litigation issues, or other factors which might affect its repayment ability, or guarantors were found default in other contracts with Party B, or devaluation, dismiss or damage of collaterals which might cause the value of the collaterals slaked or losses, Party B reserves the right to request Party A and Party A has the obligation to add or replace the guarantor.

Clause 10 Statement and Commitment

1. Party A’s statement:

1) Party A is legally register and exist with full capacity for civil rights and civil conduct;

2) Signing and performing the contract is the true will of Party A, Party A has been granted all legal and valid authorizations before signing the contract. The contract does not form a default for other contracts signed and performed by Party A and other legal documents. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All document and information, financial statement, certificates and other materials provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities.

6) Party A and the loan project reach the national environmental standards, not in the list of the enterprises which have problems of energy consumption and pollution, don’t have the risk of energy consumption and pollution.

2. Party A’s commitment:

1) Party A shall submit the financial statements and other relevant information regularly, including but not limited to annual, quarterly and monthly financial reports.

2) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract.

3) Cooperated in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations.

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in written in time. Those circumstances included but not limited to merger, division, decrease of capital, equity transfer, investment, a substantial increase of debt financing, a major asset and credit assignment.

Party A should notify Party B in time, when the following things occurred:

A. changes of articles of association, the scope of business, registered capital and legal representative of Party A or Guarantor.

B. Any form of management mode change, including joint operation, invest and cooperate with foreigners, contract management, reorganization, restructuring, listing plan.

C. Party A is involved in major litigation or arbitration, or property or collateral is seized, detained or regulated, or set new guarantee in collateral.

D. Out of business, dissolution, liquidation, suspend business for rectification, cancellation, revocation of the business license or (be) filed for bankruptcy.

E. Shareholders, directors and senior management personnel suspected of serious cases or economic disputes.

F. Default events in other contracts.

G. Operating difficulties and financial situation has deteriorated.

(5) The repayment to Party B prior to shareholders, and is comparable to other creditors of the same kind debts.

Party A is prohibited to repay the loan to shareholders before paying off the principal and interests under the contract.

(6) If Party A fails to pay principal, interests and fees on time in the fiscal year, any form of dividends is forbidden.

(7) Party A cannot dispose of assets to reduce its debt paying ability and promises the total amount of external guarantee is not 1 time higher than its net assets, and the total amount of external guarantee and the amount of single guarantee shall not exceed the limitation set by the articles of association.

(8) Except the use agreed in this contract or agreed by Party B, Party A is prohibited to transfer the loans to other accounts or related accounts.

Party A should provide documentary proof when the loan is transferred to other accounts or related accounts.

(9) Party B has the right to call the loan advanced according to the situation of capital return of Party A.

Clause 11 disclosure of the affiliated transaction inside Party A 's group

Party A is a Group customer confirmed by Party B according to the "Commercial Bank Group guidelines for customer credit risk management business"(hereinafter referred to as “guideline”). During the credit period, Party A shall promptly report to Party B about more than 10% of net assets associated with the transaction, including but not limited to: the parties to the transaction of the association; trading program and nature of the transaction; the amount of the transaction or the corresponding ratio; pricing policies (including no amount or only nominal amounts of transactions).

Under any of the following circumstances, Party B shall have the right to unilaterally decide to suspend the unused loan and recover part or all of the principal and interest of the loan in advance: use the false contracts which are signed with affiliated parties to discount or pledge at bank and to obtain bank funds or credit with notes receivable and accounts receivable without actual trade background; the occurrence of major mergers, acquisitions and reorganization which are considered by Party B may affect the loan safety; evasion or discarding of bank debts on purpose through affiliated transactions; other circumstances stipulated in article eighteenth of "guidelines".

Clause 12 Breach of Covenants

Each of the following events and issues constitute Party A in the event of default under the contract:

1. Party A did not perform the repayment obligation under this contract;

2. Party A has not used the credit funds according to agreed purposes, or has not paid the loan by agreed way in this contract;

3. Party A’s statements in this contract are untrue or in violation with commitments made by Party A in this contract.

4. Under the circumstance defined in 2.(4) of Clause 10, Party A refused to provide additional guarantee or replacement of a new guarantor.

5. Deterioration of credit, or profitability, debt paying ability, operating ability, cash flow and other financial indicators of Party A deteriorate, breaking the contract index constraint agreed or other financial covenants.

6. Party A breaches other contracts signed with Party B or other affiliated institutions of Bank of China.

7. Guarantors breach contracts, or have default events with Party B or other affiliated institutions of Bank of China.

8. The termination of business or dissolution, revocation or bankruptcy of Party A.

9. Party A is or may be involved in major economic disputes, litigation, arbitration, or its assets were seized, detained or enforced, or investigated or punished by the judicial organ or taxation, industry and commerce administrative organs in accordance with the law, has been or may affect its ability to fulfill the obligations under this contract.

10. Abnormal change, missing, legal restriction of personal liberty and investigation by judicial authorities of Party A’s major individual investors, key management personnel, which have been or may affect Party A to fulfill the obligations under this contract.

11. Party B finds the problems which may affect the borrower or guarantor's financial situation and performance capabilities when reviewing Party A’s financial condition and performance capabilities every year (every year from the effective date of the contract);

12. Party A cannot provide materials to Party B to explain large and abnormal capital inflow and outflow in the account.

13. Party A is in violation with other rights and obligations agreed in this contract.

When any of the above situations occurred, Party B will perform the following in separate or all at the same time according to the specific situation:

1) Require Party A or Guarantor to rectify defaults within a definite time.

2) Reduce completely or partly, pause or terminate Party A’s Credit limit.

3) Pause or terminate completely or partly Party A’s business applications in this contract or in other contracts between Party A and Party B specific credit line under this contract. Pause or terminate completely or partly, or cancel or stop offering, paying and settling the unissued loans and unsettled trade financing.

4) Announce the immediate expiration on all or part of the outstanding loans, principle and interest of trade financing and other accounts payable under this contract or other contracts between Party A and Party B.

5) Terminate or release this contract, terminate or release contracts between Party A and Party B completely or partly.

6) Require compensation from Party A on the losses caused by Party A to Party B.

7) Deduct the fund from Party A’s deposit accounts to pay off the debts to Party B under this contract. All the undue funds in the accounts were considered as acceleration of maturity. If the currency in deposit account is different from the currency of Party B’s loans, the exchange rate on the date of the hold in custody will be applied.

8) Real rights of pledge will be executed.

9) Require Guarantors assume liability of guaranty.

10) Other necessary or probable procedures on Party B’s concern.

Clause 13 Rights reserved

One party does not perform part or all of the rights under this contract, nor does not require the other party to perform, undertake part or all of the obligations and responsibilities, which does not mean the abdication of the right or exemption of the obligation and responsibility.

Any tolerance, extension or delay from one party to another party for exercising of rights under this contract does not affect the rights one party enjoys according to this contract and laws and regulations, and does not mean the abdication of the right.

Clause 14 Changes, Modification, Termination

Upon negotiation and agreed by both parties, this contract can be changed and modified by written. Any of the changes and modifications should form the inseparable part of this contract.

Unless otherwise provided for in any law or regulation or stipulated between the parties, this contract would not be terminated prior to all the rights and obligations are fulfilled.

Unless otherwise provided for in any law or regulation or stipulated between the parties, the invalidation of single terms under this contract should not affect the validation of other terms under this contract.

Clause 15 Applicable Law and Resolution for Dispute

1. This contract is applicable to the laws of People’s Republic of China.

During the performance of this contract or in connection with all disputes relating to this contract, the two parties settled through friendly consultations. If negotiation cannot reach agreement, both parties can apply to the local people's court of Party A or other affiliated institutions of Bank of China.

Clause 16 Attachments

The Appendix hereof and the other appendix confirmed by both parties shall form an integral part of this contract, and shall be of legally equal effect with this contract.

1. Withdrawal application;

Clause 17 Other terms and conditions

1. Without Party B’s written approval, Party A is not allowed to transfer the rights and obligations under this contract to the 3rd Parties.

2. Party A should give the consent that Party B might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The transactions under the contract based on independent interests. According to relevant laws, regulations and regulatory requirements, other parties of the transaction constitutes a connected party or associated persons, any party shall not seek to use this relationship to affect the fair of transaction.

6. The title and name of business in this contract is only for business purposes, will not be used for interpretation of the contract terms, the rights and obligations.

7. In accordance with the provisions of the relevant laws and regulations, supervision, Party B has the right to provide the information of this contract and other relevant information to the credit system of the people's Bank of China and other legally established credit information database, for organizations or individuals who have the appropriate qualifications to query and use.

8. If the drawdown date or the repayment date is in legal holidays, then it is delayed to the first working day after the holidays.

9. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract, Party B has the right to stop or change the contract or its clauses, and Party B is exempted from punishment under this circumstance.

Clause 18 Effective of the contract

This contract enters into force upon the date when it is signed or sealed and affixed with official seals by the legal representatives or entrusted agents of Party A and Party B.

This contract is signed in quadruplicate, each party holds two copies, which have the equal legal effect.

/s/ [Stamp of Party A]

Signature

July 14, 2015

/s/ [Stamp of Party B]

Signature

July 14, 2015

EX-10.4

Exhibit 10.4

Basic Credit Line Contract

Reference: Xing Yin Shen Longgang credit zi (2015) No. 0431

Creditor: Industrial Bank Co., Ltd., Shenzhen Longgang Branch

Address: Parkland, Longxiang Road, Longgang town, Shenzhen

Legal Representative / CEO: Xiaoxia Wen

Contact: Jinlong Huang

Address:

Postal Code:	Fax :
Tel: 0755-33837817	Fax:

Debtor: Springpower Technology (Shenzhen) Co., Ltd.

Address: Building A, Chaoshun Industrial Zone, Renmin Street, Danhu, Guanlan Road, Baoan, Shenzhen

Legal Representative / CEO: Dangyu Pan

Contact:

Address:

Postal Code:	Fax :
Tel: 0755-89686236	Fax:

Contract Location: Industrial Bank Building, Industrial Bank Co., Ltd. Shenzhen Branch

Important Prompt

For protecting your rights and interests, please read, check and confirm the following items carefully before signing:

1. You have the right to sign this contract or you have been given sufficient authority legally.

2. You have read and understood this contract carefully and sufficiently, and have paid attention on assuming, exempting or limiting responsibilities of Industrial Bank Co., Ltd., and the content with bold font.

3. Your company and you understand the meaning of this contract and the relevant legal consequences, and agree to accept these provisions.

4. The contract provided by Industrial Bank Co., Ltd. is a model contract. There is space for modifying, supplementing and deleting.

5. If you have further questions on this contract, please consult Industrial Bank Co., Ltd.

After application, creditor agrees to provide a basic credit line to debtor. To clarify the rights and obligations of both parties, and abide by credit, the contracting parties sign this contract agreed together according to relevant state laws and regulations.

Clause 1 Definitions and interpretation

Except agreed in writing by the contracting parties, the following words in this contract will be explained as follows:

1. Basic credit line: based on comprehensive evaluation of management and risk of debtor, creditor will decide the maximum amount of comprehensive financing principal of debtor, including but not limited local foreign currency, various trade financing (issuing letter of credit, trust receipt, packing loan, export bill purchase, export bill purchase under collection and advanced against inward documentary bills, etc.) bank acceptance bill, notes discounted, notes repo, guarantee (including independent guarantee, demand guarantee, standby letter of credit, etc.) and so on.

2. Valid period of credit line is one uninterrupted period, during which the debtor can conduct business transactions stipulated under the basic credit line, with creditor’s consent. The basic credit line expires when the valid period of credit ends.

3. Balance: creditor will manage and control the balance of various businesses of debtor. The balance is the sum of used credit line, including undue balance and expired outstanding balance, as follows:

(1) Undue balance: the sum of undue outstanding debts which are used by debtor according to this contract.

(2) The due unpaid balance is the debt principal balance that the Creditor granted the Debtor, or is entitled for to perform certain legal responsibilities, but remained unpaid at the expiry date.

4. Macro contract: Basic credit line contract, which is signed by creditor and debtor.

Sub-contract: the specific business contract signed by two parties voluntarily. This contract is the macro contract of any sub-contracts, any sub-contract is an inalienable part of this contract, and has the same legal effect.

5. Principal debt: debt principal, interest and expense resulting from conducting various business transactions under this contract applied by debtor, including but not limited local foreign currency, various trade financing (such as issuing letter of credit, trust receipt, packing loan, export bill purchase, export bill purchase under collection and advanced against inward documentary bills, etc.) bank acceptance bill, notes discounted, notes repo, guarantee (including independent guarantee, demand guarantee, standby letter of credit, etc.) and so on. (Including principal, interest, punitive interest, compound interest, liquidated damages, damage awards, expenses for realizing financial claim, etc.)

Expenses for realizing a financial claim: the money which creditor spends for realizing a financial claim by litigation, arbitration, etc. such as court (arbitration) costs, attorneys’ fees, traveling fees, execution fees, maintenance costs, and other necessary costs for realizing a financial claim.

6. Important transaction which is mentioned in clause 8 (including but not limited): anything which might have a bad effect on the basic organization of debtor’s company, changes of stockholders, contingent liabilities, cash flows, profitability, core business secrets, important assets, significant claims and debts, repayment ability, other transactions which are considered as significant transactions by creditor and/or debtor.

7. Important transaction which is mentioned in clause 8 (including but not limited): anything which may have bad effect on executives’ operational capability, employment and termination of core staff, core business secrets, core competence, basic organization, legality, stability, development, profitability, repayment ability, other things which are considered as significant things by creditor and/or debtor.

8. Workday mentioned in this contract refers to a banking day. If the drawdown date or the repayment date is on a legal holiday, then it is delayed to the first working day after the holiday.

Clause 2 Credit Line

1. The maximum amount of basic credit line is RMB (in words) SIXTY MILLION YUAN ONLY. If debtor uses foreign currency in specific business, the foreign currency will be converted to RMB according to the exchange rate announced by creditor on the date when the applicable sub-contract is signed, and will be included in credit line.

2. Decomposition of credit line

(1) Working capital loan: RMB 10,000,000

(2) Bank acceptance: RMB60,000,000

(3) Export loan under mortgage of documents: RMB 10,000,000

(4) Standby letter of credit:

3. If the Debtor repays the used line of credit within valid period of credit line, the equivalent amount of credit line recovers automatically.

4. The financing balance should not be more than RMB 60,000,000, including all debts used by debtor according to this contract, and the single credit line cannot be more than RMB 60,000,000.

Clause 3 Valid Period and Adjustment of Credit Line

1. Valid period of credit line under this contract is from July 15th 2015 to July 15th 2016.

2. This contract is not the definite obligation of creditor, in any circumstance, creditor has the right to adjust or cancel the credit line and valid period under this contract partly or completely without the consent of debtor. Foregoing “any circumstance” includes but not limited following situations:

(1) debtor has significant operational difficulties and risks;

(2) debtor has significant changes in ownership or contingent debt;

(3) debtor has significant changesin its operational mechanism (including but not limited discrete, merger, termination, etc.);

(4) debtor gets hit with credit downgrade and which increasesrisk of repayment;

(5) the situation and conditions of one transaction, which Debtor works on, have significant changes;

(6) the statements and commitments of debtor mentioned in clause 7 become invalid;

(7) other creditors think it is necessary to change, adjustment or cancel debtor’s credit line.

3. If debtor needs to increase temporary the credit line because of a change of situation or special project, debtor can apply for special credit line from creditor, which can only be used for special project, and should not be used as cycle.

Clause 4 Repayment and adjustment of advance in cash and receipt under different credit line

Creditor has the right to use the funds received under one or more of the lines to repay the advanced money which is used according to this contract, without the consent of debtor and guarantor.

Clause 5 Guarantee Measures

1. The following contracts are guarantee contracts of this contract and sub-contracts.

(1)REF: Xing Yin Shen Longgang credit (guarantee) zi (2015) No. 0431

"Maximum Amount Guaranty Contract" (the name of the contract), guarantor: Shenzhen Highpower Technology Co Ltd, mode: guarantee;

(2) REF: Xing Yin Shen Longgang credit (guarantee) zi (2015) No. 0431A "Maximum Amount Guaranty Contract" (the name of the contract), guarantor: Dangyu Pan, mode: guarantee;

2. Before the signing of guarantee contracts and completing the guarantee procedures, creditor has the right to refuse handling an application for using the credit line under this contract, and providing the loans under this contract and sub-contracts.

3. The maximum guarantee for all debts under the credit line should be provided by the above guarantors (guarantor, mortgagor or pledger), except as agreed by creditor, debtor and guarantor.

4. If following things happen to the guarantor under this contract, creditor has the right to take measures according to clause 9 of this contract.

(1) Guarantor violates the maximum guarantee contract; a deterioration of guarantor’s credit position; or other things, which may damage guarantee ability happen;

(2) Mortgager violates the maximum mortgage contract; damages mortgage intentionally; the value of mortgage might has been reduced obviously; or other things which damage the hypothecation of creditor;

(3) Pledger violates the maximum pledge contract; the value of pledge has been reduced obviously; or the right of pledge has to be cashed in advance; or other things which damage the pledge of creditor.

Clause 6 The Rights and Obligations of Creditor

1. During credit period, if the accumulated total balance used by debtor is less than the maximum capital limit, creditor will review a loan application which is within the limit from debtor.The application will be accepted if it meets each of the conditions and requirements requested by creditor. If Creditor is unable to make a substantive examination because of debtor or any other reasons, it should not constitute a defense. Debtor and guarantor give up considering it as a defense.

2. Creditor has the right to acquire the accounting statements and other operational information of debtor.Debtor should provide its marketing plan, investment plan and demand for funds.Creditor will keep debtor’s business secret.

3. In order to achieve the purpose of financing under this contract, the debtor should provide a full, effective guarantee, which is recognized by creditor. If debtor or guarantor violates the contract, creditor has the right to seize any form of assets of the Debtor or Guarantor that the Creditor possesses

Clause 7 Representations and Commitments of Debtor

Debtor makes the following representations and commitments voluntarily, and assumes legal responsibility for the reality of the content.

1. Debtor is a legal representative, which is established according to the laws of People’s Republic of China, with full capacity for civil conduct. Debtor promises to provide related information requested by creditor.

2. Debtor can perform all obligations and responsibilities under this contract, and will assume the repayment responsibility in any conditions.

3. Debtor has the right to sign this contract, and has acquired all legal approvals and authorities.

4. Signing this contract is allowed by debtor’s articles of association, internal decisions and resolutions of shareholders and board of directors. This contract will not conflict with the articles of association, internal decisions and resolutions of shareholders and board of directors and policies of debtor.

5. Signing and performing this contract is the true willing decision of debtor. Signing and performing the above contract will not violate the laws and regulations, rules and agreements which can limit debtor. This contract is legal and enforceable, and if this contract become invalid because debtor does not have full capacity to sign this contract, debtor should repay all losses of creditor.

6. All documents, financial statements and other information, which are provided by debtor under this contract, are true, complete, accurate and effective.

7. Debtor agrees that bank business under this contract is limited to the regulations, conventions and practices of creditor, and the power of interpretation belongs to creditor.

8. Debtor cannot change its equity structure or major executives without written consent of creditor.

9. If debtor does not perform obligations according to this contract and sub-contract, debtor grants creditor the right to obtain relevant money from any account which is opened in creditor by debtor.

10. In any transactions after signing this contract, if the debtor submits any documents related to a specific transaction to creditor for auditing, debtor promises all documents are true.Creditor neither participates in nor knows the essence of transaction, and will not take any responsibility.

11. The debtor confirms it has no further litigation, arbitration, or administrative litigation in property, liquidation or issues with going out of business, except situations which have been disclosure in writing to creditor.

12. If creditor is involved in litigation, arbitration or another dispute because of performing the obligations under this contract,the litigation or arbitration fees, legal fees and other expenses of creditor will be borne by the debtor.

13. All settlement businesses under this contract should be handled through the settlement account open in creditor.

14. The debtor provides full, effective or other appropriate acceptable guarantee approved by the creditor. For the house mortgage, if the house will be removed, the debtor shall promptly inform the creditor to fulfill obligations; if mortgage houses were demolished, the creditor has the right to require the debtor to pay off the debt in advance, or reset the mortgage and sign a new security agreement. During the loss of the original guarantee and the new mortgage registration has not been completed, the debtor should provide the secured party as guarantees; For the way of compensation to compensate for the demolition of real estate, the creditor will be responsible for requesting relocation compensation as guarantee through the opening margin accounts or certificates of deposit , etc.

Clause 8 Debtor has the obligation to disclosure significant transactions and events to creditor.

1. Debtor should inform creditor of significant transactions and events of debtor in writing timely.

2. If debtor is a group company, debtor should inform creditor of its related transactions which are more than 10% of creditor’s net assets, including but not limited to :

(1) the relationship of the parties in the transaction;

(2) transactions and transaction properties;

(3) the amount of transaction and relevant proportion;

(4) pricing policy.

3. During valid period of this contract, stock transfers, reorganizations, mergers, discrete, shareholding reforms, joint ventures, cooperations, joint operations, contracts, leases, business scope, change of registered capital, major asset transfers, contingent liabilities, or anything which may affect debtor’s ability to assume responsibility should be reported to creditor in writing 30 days in advance.

4. A termination of business, going out of business, bankruptcy, dissolution, cancellation of business license, deterioration of financial situation or involvment in a major business dispute, or anything may affect debtor’s ability to assume responsibility should be reported to creditor in 7 days by writingfrom the date the above thing took place.

5. When debtor becomes involveed in major litigation or arbitration with any third party, or any other significant thing which may affect debtor’s ability to assume responsibility occurs, creditor should be notified in writing within 7 days from the date debtor receives relevant notice.

6. The debtor promises that it will not use its legal dispute with a third party to damage creditor’s rights.

Clause 9 Default and default Liability

1. After this contract comes into force, the creditor and the debtor should perform the obligations as agreed in the contract. If any one party fails to perform or not completely fulfill its obligations of this contract, it should bear the corresponding liability for breach the contract.

2. If any of the following situations occur, creditor has the right to terminate the unused credit line under this contract, and ask the debtor to repay all financing, payable interest and other expenses under this contract immediately.The date the creditor asks the debtor to repay the money is the advanced expiration date:

(1) any information provided by debtor or the statements and commitments stated in clause 7 of this contract are false, inaccurate, incomplete or misleading;

(2) deterioration of debtor’s credit status and obvious weakening of repayment ability (including contingent liability);

(3) the cross default agreed in clause 10 of this contract occurs to the debtor, the affiliated enterprise of the debtor, the guarantor, or the affiliated enterprise of the guarantor;

(4) the debtor violates the obligations agreed to in a sub-contract of this contract;

(5) the debtor fails to repay the principal, interest and expenses of one financing under this contract on schedule;

(6) the debtor stops repaying its own debt, or cannot repay due debt;

(7) stopping doing business, going out of business, being announced bankruptcy, dissolution, cancellation of business license, involving in major business dispute, and deterioration of finance condition and so on;

(8) other thing which may damage creditor’s right.

3. If the debtor defaults, creditor has the right to take one or more following measures:

(1) suspending or reducing the sum of financing, until cancelling all agreed line of financing;

(2) announcing complete or part of debtor’s debt expirein advance;

(3) terminating this contract, and asking debtor to repay all debt and pay relevant expenses;

(4) the debtor should pay punitive interest for overdue debt;

(5) the debtor should pay punitive interest for misappropriation of the loan;

(6) requiring the debtor to pay full compensation for losses.

Clause 10 the cross-defaulting

If one of the following events occurs to the debtor or affiliated enterprises of the debtor, and the guarantor or the affiliated enterprises of the guarantor, it will be considered that debtor default as well, the creditor have the right to recover loan in advance according to this contract or its sub-contract, and require the debtor to be liable for breach of contract according to the contract:

(1) any loan, financing or debt defaults or may default, or be called for repayment in advance;

(2) any guarantee or similar obligation fails to be performed or might fail;

(3) the non-performance or violation of the relevant debt guarantee and other similar obligations of legal document or contract or might;

(4) failure to repay due debts or borrowing/financing;

(5) be declared bankrupt by the legal procedure or may be so declared;

(6) other situations that endanger the safety of the money under this contract.

Clause 11 the continuity of obligation

All obligations of the debtor under this contract have the same effect on its heir apparent, agent, receiver, orassignee, even after a merger, reorganization, or change of name.

Clause 12 accelerated maturity terms of principal and interest

The debtor and the guarantor agree that once the debtor fails to perform the statements and commitments of Clause 7, or the debtor fails to perform any obligation under this contract, the creditor has the right to decide that any other obligations include all outstanding principal, interest (including punitive interest and compound interest) and relevant expenses become due immediately.

Clause 13 The Priority Right of Subrogation Arrangement

The debtor states herein, once the debtor defaults or is unable to repay due principal, interest and fees, and doesnot have enough property to repay advanced money to creditor,creditor has the right of subrogation on any claim, accounts receivable and other property rights of the debtor. The debtor and the guarantor are willing to give up the defense to creditor according to article 28 of “Guarantee Law”.

Clause 14 Offset Arrangement

1. If the debtor or the guarantor fail to repay maturing debt or pay the debt upon early maturity, the creditor has the right to directly withhold money on any account of the debtor to repay the debt. If the currency in the debtor’s account is different from the currency of principal debt, the withholding money will be calculated on the rate of withholding day.

2. Creditor’s rights under this contract will not be offset by any reason or any third party’s offset right.

3. Creditor’s rights under this contract will not be offset by any offset right of the debtor, the guarantor or any third party.

Clause 15 Applicable Law, Jurisdiction and Dispute Resolution

1. Signing, effectiveness, performance, termination, interpretation and dispute settlement of this contract is applicable for the laws of People’s Republic of China.

2. For any dispute of this contract, the debtor and the creditor should resolve through friendly negotiations. If negotiation fails, both parties agree to solve by the following section (2) way:

(2) Applying for arbitration to the Shenzhen Arbitration Commission, resolving the dispute by applicable rules of the Arbitration Commission, the arbitration award is final and binding on both parties. The site selection is in Shenzhen.

3. In the dispute period, the provisions which are not involved in the dispute still should be carried out according to this contract.

Clause 16 Files, Communications and Notifications

1. Any documents, communications and notifications under this contract will be sent to each partyaccording to the address, phone number or other contact methods on the cover of this contract.

2. If the contact method of one party changed, the other party should be informed immediately, otherwise the party which does not inform its change to the other must bear full responsibility for all the consequences.

3. Any documents, communications and notifications are sent according to above address, shall be deemed to arrive on the following dates:

(1) by post (including speed post, ordinary letter, registered mail), it will be deemed to arrive on the sending day after five working days;

(2) by facsimile or other electronic communication, it will be deemed to arrive on sending day;

(3) by personal service, the date of signing is deemed to be arriving date.

Notifications by the way of website, online banking, telephone banking or business outlets announcement should be deemed to arrive on day. The creditor does not need to borne any responsibility for any transmission errors, omissions, or delays of mail, fax, telephone or any other communication system.

4. The two sides agree that the seal of the office seal, financial seal, contract seal, receive seal and credit seal is the effective seal for the documents, communications and notifications. All staff of the debtor have right to receive files, communications and notifications.

Clause 17 Effectiveness, Modification of This Contract and Other Matters

1. The contract will take effect from the date of signature or stamp of both parties.

2. During the effective period of this contract, the creditor’s giving to the debtor and the guarantor ofany tolerance, forgiveness, or delay to use the rights and interests, shall not damage, impact or limit the creditor to share the rights and interests in accordance with relevant laws and regulations and this contract, or be deemed giving up the rights and interests, also do not affect the debtor to borne any obligation under this contract.

3. As a result of national laws and regulations or regulatory policy change, which leads to loan obligations of the creditor under this contract not conforming to the laws and regulations or regulatory requirements, the creditor has the right to unilaterally terminate the contract, announceall of the loan is due in advance, and the debtor should pay off the loan immediately.

4. If the creditor cannot issue the loan or pay on time because of force majeure, the failure of communication or network, or the failure of creditor’s system, the creditor does not assume any responsibility, but should promptly notifythe debtor.

5. The creditor shall have the right to authorize or entrust other branches of industrial bank to perform rights and obligations under this contract (including but not limited to authorized or entrusted bank branches of other related contracts, etc.) according to the debtor’s operation and management, or the loan under this contract as other branch’s to undertake, which is approvedby the debtor, and without prior consent of the debtor.

6. The debtor agrees that the creditor has the right to unilaterally reduce or cancel the unused loan under the contract according to the debtor’s production and operation situation, situation of payment orcredit of other financial institutions. The creditor should notify the debtor five working days before reduce or cancel the loans, without prior consent of the debtor.

7. At any time, any provision of this contract in any way is or becomes illegal, invalid or unenforceable, the legality, validity or enforceability of other provisions under the contract is not affected.

8. The heading of this contract is just for the convenience of reading, which shall not be used for interpretation or any other purposes.

9. The attachment is an integral part of this contract, and the attachment of this contract is equally valid.

10. This contract is triplet, the creditor holds two copies, the debtor holds one copy, with equal legal effect.

Clause 18 The Notarization and Voluntarily to Accept Compulsory Execution

1. The contract should be notarized by the state notary office for if any party request notarization.

2. The notarized contract have the enforcement effect, if the debtor fails to perform the debt, or the creditor realize creditor's rights according to laws and regulations and this contract, the creditor shall have the right to directly apply the people's court with jurisdiction for enforcement.

Clause 19 The Supplementary Terms and Conditions:

1. The parties of this Contract hereby confirm that their domiciles and service methods given herein are their service addresses and methods of relevant legal documents (including but not limited arbitration application, arbitration notice, case filing notice or acceptance notice, statement of defense, written counterclaim, evidence, notice of court session, award, mediation document, execution notice, notice of performance within a time limit, and other legal documents during hearing and execution of arbitration).

Recipient: Pan Dangyu

Detailed Address: Workshop Building A, Shunchao Industrial Zone, Renmin Road, Danhu Community, Guanlan Street, Bao’an District, Shenzhen City

Zip Code: 518111	Tel.: 13510066248
Designated Agent (if any):	Detailed Address:
Zip Code:	Tel.:

The parties of this Contract hereby confirm and agree to send legal documents by personal delivery or by the following methods:

¨ Post; ¨ Fax, No.                              ;  ¨ E-mail, Address:                        ;

¨ SMS, Receiving No.:                            .

The foregoing legal documents shall be deemed as having been served (to the principal if having been served to the designated agent) once they are sent by any means to the address given above. In case of change of any party’s service address and service method, the other party shall be timely notified in written form. If the other party is not timely notified, such change shall be deemed invalid and the party of change shall assume relevant responsibilities arising therefrom.

The credit line occupied under the Basic Credit Line Contract of X.Y.S.L.G.S.X.Z. (2014) No. 0504 shall be brought into the unified credit management of this Contract. In other words, the sum of the credit line hereunder and the credit line under the Basic Credit Line Contract of X.Y.S.L.G.S.X.Z. (2014) No. 0504 shall not exceed RMB 60 million Yuan only (total risk exposure shall not exceed 20 million Yuan). Risk exposure = balance of various businesses having been handed under credit – the principal of the financing business at an amount equivalent to the value of the pledge on the date of pledge in various financing businesses, such as bank acceptance, opening of L/C and loan applied by the Applicant and pledged with the Applicant or a third party’s deposit security or deposit receipt within the valid period of the credit line.

If the Discount Applicant handles discount business (including rediscount business) with the Financer for the commercial bill issued, accepted or endorsed by the Applicant, the Discount Contract between the Discount Applicant and the Financer shall be a subcontract of this Credit Contract and shall be deemed as an indivisible part of this Credit Contract. The discount amount shall be included in the credit line. Meanwhile, the Applicant agrees to assume liability of repayment in accordance with the Discount Contract.

/s/ [COMPANY SEAL]

The Creditor (official seal):

The legal representative (signature):

The Debtor (official seal):

The legal representative (signature):

/s/ Dangyu Pan

EX-10.4(A)

Exhibit 10.4(a)

Maximum Amount Guaranty Contract

(Apply to lines of credit)

Reference: Xing Yin Shen Longgang credit (guarantee) zi (2015) No. 0431A

Creditor: Industrial Bank Co., Ltd. , Shenzhen Longgang Branch

Address: parkland, longxiang road, longgang town,shenzhen

Legal Representative / CEO: Xiaoxia Wen

Contact: Jinlong Huang

Address:

Postal Code:	Fax :
Tel: 0755-33837817	Fax:

Guarantor: Dangyu Pan

Address: Building A1, 68 Xinxia Street, Pinghu, Longgang, Shenzhen, Guangdong, China

Legal Representative / CEO: Dangyu Pan

Contact:

Address:

Postal Code:	Fax :
Tel: 0755-89686939	Fax:

Contract Location: Industrial Bank Building, Industrial Bank Co., Ltd. Shenzhen Branch

Important notes:

For protecting your rights and interests, please read, check and confirm following items carefully before signing:

1. You have the right to sign this contract. Or you have been given sufficient authority legally.

2. You have read and understood this contract carefully and sufficiently, and have paid attention on assuming, exempting or limiting responsibilities of Industrial Bank Co., Ltd., and the content with bold font.

3. Your company and you have understood the meaning of this contract and relevant legal consequence, and agree to accept these provisions.

4. The contract provided by Industrial Bank Co., Ltd. is a model contract. There is space for modifying, supplement and deleting.

5. If you have further questions to this contract, please consult Industrial Bank Co., Ltd.

The guarantor is voluntary as a financier ("creditor") to provide security for the line of credit of the applicant Springpower Technology (Shenzhen) Co., Ltd. (or "debtor"). In order to clarify the rights and duties, abide by credit, the contracting parties signed this contract in accordance with relevant laws and regulations to comply with.

Article 1 definition and interpretation

In addition to agreed in writing by both parties, then:

1. The master contract (as defined below) agreed definitions and interpretations applicable to this contract.

2. The "claims" or called the principal debt, means the debt approval and provided by the creditor, including loans, lending, trade finance (including but not limited to issuing letters of credit, trust receipts, packing loans, export financing, export collection bills and import bills, etc.), bankers' acceptances, discounted bills , bills buyback, guarantees (including the Independent guarantees, see demand guarantees and standby letters of credit, etc.) and other financing business (including principal, interest, penalty interest, compound interest, liquidated damages, damages, cost of achieving the claim).

Under this contract, the claim of the financier and the debt of the applicant mean the same content.

3. The "principal" refers to the principal debt made by the business transacted by the financier, including but not limited to the principal loans, trade finance capital, bankers' acceptances fare, bill discounting, money advanced for credit of letter, the principal part of guaranteed by the creditor for the debtor.

4. The "guaranteed maximum principal" means the amount agreed by both parties in order to clarify the scope of the claims guaranteed by the covenant. Regardless of times and sum of the debt, the guarantor takes joint liability for all debt under the guaranteed maximum principal.

5. The "validity of guarantee" refers to a continuous uninterrupted period agreed by both parties in order to clarify the scope of the claims by the covenant. The debt happened during the period, whether the settlement deadline is over that period or not, the guarantor takes joint liability for all debt under the guaranteed maximum principal.

6. "The cost of the claim for the creditor" refers to the necessary fees of achieving the credit, including take litigation, arbitration and other ways to pay litigation (arbitration) fees, legal fees, travel expenses, execution fees, security fees, and other expenses.

7. "Master Contract" means credit contract (that is, "General Agreement") and all sub-contract signed by the financier and the applicant.

"Sub-contract" means based on the basic or special contract, the contract signed by both parties after getting approval of the creditor, include the content of each sum, the due date and other rights and obligations. The sub-contract is an integral part of the basic or special contract, with the same legal effect. The forms of contract can be different according to business needs, as the application of L/C, bills or other manner considered fit by the creditor. If the master contract and sub-contract has different part, the sub-contract will be effective.

8. This "working day" refers to the bank business day, If a withdrawal or repayment date is not a Business Day, delay to the next business day.

Article 2 the main credit contract of guarantee

The master contract of guarantee is Basic Credit Line Contract (No. XingYin ShenLonggang credit zi (2015) No. 0431), and its sub-contracts. The sum of credit is RMB forty million only, credit period is from July 15^th 2015 to July 15^th 2016.

The guarantor will be borne joint liability for all debts under the master contract.

Article 3 Maximum guarantee principal

1. Under this contract, maximum guarantee principal is RMB (in word) SIXTY MILLION YUAN ONLY.

2. Under the maximum guarantee principal, the guarantor is borne joint liability for all debt balance (including principal, interest, penalty, compound interest, liquidated damages, damages, realization of claims).

Article 4 validity of guarantee

1. Valid period is from July 15^th 2015 to July 15^th 2016.

2. The loan under the contract can be used only when during the period of validity, but the guarantor is borne joint liability for each debt whether the debt is in or over the validity of the guarantee contract.

Article 5 guarantee responsibility

1. The guarantor is borne joint liability under this contract. For whatever reason, if the applicant fails to fulfill due debts under the master contract (including but not limited to early recovery of debts because of the default of the applicant or the guarantor's request), the guarantor shall perform the repayment obligation on behalf of the debtor.

2. If there are several guarantors under this contract, all guarantors shall jointly bear joint responsibility.

3. Main debts expire, the debtor fails to repay the debt and interest, the guarantor shall perform the repayment obligation.

4. Furthering the period of the main debt, if the creditor recovers the debt in advance according to the master contract, the guarantor shall bear joint responsibility for this and other debts under the guarantee contract.

Article 6 scope of guarantee

1. The financial claims under this contract ("the secured claims") refers to all debts provided by the creditor to the debtor, including but not limited to the principal debt, interest (including default interest, compound interest), breach of contract , damages , expenses of claims.

2. On the due date, if the applicant refused to repay the loan, which lead to the debt rights also in the range of the guarantee.

3. The principal , interest and other costs, the time of performance, usage, rights and obligations of the parties as well as any other relevant matters under the contract shall prevail by relevant agreements, contracts, application, notice , various certificates and other records, all kinds of certificates and other relevant legal documents issued or signed without guarantor’s confirmation.

4. In order to avoid ambiguity, all fees of prepare, improve, perform or enforce the contract (including, but not limited to attorney’s fees, litigation or arbitration costs etc.) constitute a part of the secured debt.

Article 7 warranty period

The warranty period under the contract:

1. The warranty period under the contract is calculated according to each financing applied by the applicant. For each financing, the warranty period is ended after two years of the expiration.

2. If there are several financings in one master contract, the warranty period of each financing is ended after two years of the expiration.

3. If the principal debt is repayable in installments, there are several financings in one master contract, each warranty period is calculated in installments, and the guarantor shall bear responsibility for two years from the date of expiry.

4. If any extension agreement is signed by financier and debtor without agreed by the guarantor, the guarantor will still bear responsibility for all financing under the contract within two years from the date of extension expiry.

5. If the financier decides to recover the debts in advance, the warranty period is two years since the date of expiry noticed by the financier.

6. The warranty period of bankers' acceptances, letters of credit and letters of guarantee is two years from the date of advance payments. If advance for several times, warranty period is calculated from each advance payment.

7. The warranty period of commercial bills is two years from the date of discount maturity.

Article 8 on demand

As long as financiers submitted notification of debt collection to the guarantor with the contract number and the amount of debt, the guarantor shall immediately perform the repayment and give up all reasons of defense.

Article 9 declaration and commitment of guarantor

The guarantor voluntarily made the following statement and commitment, and liable for its truthfulness:

1. The guarantor is established under the laws and a validly existing legal company, with full civil capacity. The guarantor follows the creditor's request to provide relevant evidence, permits, certificates and other documents required by the creditor.

2. The guarantor has sufficient capacity to fulfill all the obligations and responsibility under the contract, not because of any instruction, financial conditions change, or any agreement with any party to reduce or waive their commitment to settle the obligation.

3. The guarantor has sufficient power, authority and legal right to sign this contract, the guarantor has obtained and fulfilled all necessary approvals and authorizations of its internal or other relevant procedures to make the contract execution and performance, and has achieved and fulfilled any government department or other authority's approval, registration, authorization, consent, license or other relevant procedures for this contract, and signed this contract with all the necessary approvals, registrations, consents, licenses , authorizations and other related procedures remain fully valid.

4. The guarantor signed the contract in full compliance with the relevant Articles of the guarantor, the internal decisions, shareholders and board resolution. The contract does not conflict with any charter, internal decisions, shareholders resolutions, board resolution and the guarantor's policies.

5. The execution and performance of this contract is based on the guarantor's true intention. Loan facility is compliance with legal and regulatory requirements, execution and performance of this contract does not violate any binding law, regulation, ordinance or the contract. This contract is valid and enforceable, as a result of the guarantor’s defects in the execution and performance of this contract to result in the contract is invalid, the guarantor will immediately and unconditionally make compensation for all losses to the creditor.

6. Under this contract, all the documents, financial statements and other information provided by the guarantor is true, complete, accurate and effective, and continue to fulfill the creditor’s request of the financial indicators.

7. Such as a change in ownership structure or key management personnel or other significant events and significant transactions, the guarantor shall require the prior written consent of the financer.

8. If the guarantor fails to fulfill the contract obligations, the guarantor hereby authorizes the creditor recover the funds from all branches accounts of the guarantor without going through the judicial process.

9. When the guarantor has fulfilled the guarantee responsibilities, the guarantor has the right to recover the money from the applicant without prejudice the repayment in the future. However, if the applicant has the claim of the guarantor and the requirement of repayment from the financier at the same time, the guarantor agreed the applicant to repay the debt of the financier first.

10. If the applicant and the guarantor have or will sign a counter- guarantee contract in respect of the obligations under the contract, the counter-guarantee contract shall not prejudice any rights of the financier in law or in fact under the contract.

11. Before pay off the debts, regardless of any reason lead to reduce the guarantee ability of guarantor, the financier has the right to require the guarantor to provide a new full and effective guarantee.

12. When he applicant fails to fulfill obligations, regardless of the financier has other guarantee right of the debts, (including, but not limited to warranties, mortgage, pledge, guarantees, standby letters of credit and any other form of guarantee), the guarantor shall bear full responsibility to ensure the security and waive all defenses on law and property law.

13. There was no any litigation, arbitration or administrative proceedings for the guarantor’s outstanding or known to occur on the guarantor, and there was no events of liquidation or other similar proceedings whether it comes forward by the guarantor or by a third party.

14. If the creditor is forced into disputes between the guarantor and any other party because of fulfilling the obligations under the contract, the guarantor should pay litigation or arbitration costs, legal costs and other expenses.

15. During warranty period, the guarantor undertakes not to transfer, conceal property, or give up, passive exercise claims in any way.

Article 10 Obligations of disclosing important transactions and events

1.Guarantor should inform financer of significant transactions and events of guarantor in written timely.

2. During valid period of this contract, stock transfer, reorganization, merger, discrete, shareholding reform, joint venture, cooperation, joint operation, contract, lease, business scope, change of registered capital, major asset transfer, contingent liability, or anything which may affect guarantor’s ability of assuming responsibility should be notified to financer in writing 30 days in advance.

3. Termination of business, going out of business, bankruptcy, dissolution, cancellation of business license, deterioration of financial situation or involving in major business dispute, or anything may affect guarantor’s ability to assume responsibility should be noticed to financer in 7 days by written since the date above things take place.

4. When guarantor involves in major litigation or arbitration with any third party, or other significant thing which may affect guarantor’s ability to assume responsibility, financer should be notified by written in 7 days since the date guarantor receives relevant notice.

5. The guarantor promises that it will not use its legal dispute with third party to damage financer’s right.

Article 11 events of default and breach of contract

1. Since this contract comes into force, the financer and the guarantor shall perform the obligations as agreed in the contract, any one party fails to perform or not completely fulfill the obligation of this contract, shall bear the corresponding liability for breach of contract.

2. One of the following circumstances occurs, the financier has the right to require the guarantor immediately to fulfill the repayment obligations:

(1) Any information provided by guarantor and the statements and commitments stated in Article 9 of this contract are false, inaccurate, incomplete and misunderstood.

(2) Deterioration of guarantor’s credit status and obvious weakening of repayment ability (including contingent liability);

(3) the guarantor violates of the foregoing provisions of Article 10, not disclose the significant transactions and events;

(4) Stopping doing business, going out of business, being announced bankruptcy, dissolution, cancellation of business license, involving in major business dispute, and deterioration of finance condition and so on;

(5) Other thing which may damage financer’s right.

3. If the guarantor defaults, financer has the right to take one or more following measures:

(1) require the guarantor to remedy;

(2) require the guarantor to provide a new full and effective guarantee;

(3) require the guarantor to perform guarantee obligation in advance;

(4) require the guarantor to repay all direct or indirect losses for breach of contract.

The guarantor shall make the implementation of the above measures and waive all defenses.

Article 12 the independence of the guarantor’s obligations

1. The guarantor's obligations under this contract have independence with no effect of the relationship between any party and the third party, except there are stipulates.

2. The guarantee contract has independence, regardless of any conditions; the guarantee contract is effective even if the master contract is not effective. If the master contract is confirmed as invalid, then the guarantor still bear the joint liability for the debtor’s debts.

3. If the applicant violates the master contract (including but not limited to the applicant fails to use the loan under the sub-contract) , shall not affect the liability of guarantee, the guarantor cannot require to reduce or waive the responsibility of guarantee.

4. The main creditor under the contract expires or the guarantor fails to perform under this contract, the financier has the right to directly deduct the funds from any account of the guarantor.

5. As under the master contract , there are other guarantees ( including but not limited to guarantee , mortgage , pledge, standby and any other form of security ) , the guarantor agrees that one can give up part of security interest or security interest subordinated ( including the collateral is based on the collateral provided by the debtor) , financier and any mortgagor / pledgor (including the mortgagor / pledgor artificially is the debtor himself) can be varied by agreement and subordinated security interest, the amount of the secured creditor and other content, even if financiers made the above act, the guarantor is still voluntary to bear all responsibility of this contract.

6. The guarantor agrees and acknowledges: the financer and the applicant agree to alter the master contract are deemed to have the prior consent of the guarantor, the guarantor cannot reduce the responsibility because of this.

7. Before the maximum guarantee claims determined, the financer has the right to transfer part or all guarantee rights without the prior consent of the guarantor.

Article 13 the continuity of obligation

1. All the guarantor's obligations under this contract have continuity, for his heir apparent, agent, receiver, the assignee and the main company after merger, reorganization, change the name is completely and equally binding.

2. The guarantor hereby acknowledges, financiers can continuously and cyclically to provide financing to the applicant under the contract, the guarantor has joint for liability of all claims, regardless of the times and sum of each financing.

3. The contract is a continuing guarantee, the guarantor shall bear responsibility of guarantee until the debts is paid off.

4. All or part of the release or discharge of the secured creditor based on any payments, guarantees or other disposition which have been declared invalid or must be repaid, the guarantor’s responsibility will be remain in force.

Article 14 priority subrogation arrangements

The guarantor states that, once the guarantor cannot assume security responsibility, and the guarantor itself has not sufficient property to be repaid, the financier has priority right of any claims against third parties, accounts receivable and other property interests. The guarantor will voluntarily relinquish the defenses against the financier under Article 28 of "security law".

Article 15 offsetting arrangements

The right of the financier under the contract cannot offsetting by the guarantor’s or any other party’s right of offsetting.

Article 16 Applicable Law, Jurisdiction and Dispute Resolution

1. Effective performance, termination, interpretation and dispute settlement etc. of this contract is applicable for china laws.

2. For any dispute about this contract, guarantors and creditors should resolve through friendly consultations; If friendly negotiation fails, the both parties agree to solve by the following section (2) : (2) To Shenzhen Arbitration Commission for arbitration, to resolve the dispute by the rules of the Arbitration Commission, that the arbitration award is final and binding on both parties. The site selection is in Shenzhen.

3. at the disputed period, the part of not involved has still to be carried out.

Article 17 Files, Communications and Notifications

1. Any documents, communication and notification under this contract shall be sent to the other party by the way of address, phone number or other contact methods listed in the cover of this contract.

2. If any above contact method of any party changed, one should notice the other party by any quick way immediately. If one does not notice, one should be borne for the documents, communication and notification sent through old address, phone number or other contact methods listed in the cover of this contract.

3. Any documents, communications and notifications sent by the way of the above address, shall be deemed to arrive on the following dates:

(1) by post (including speed post, ordinary letter, registered mail), it will be deemed to arrive on the day after five working day;

(2) by facsimile or other electronic means of communication, it will be deemed to arrive on day;

(3) by personal delivery, the date of recipient is deemed to be arriving date.

Notifications by the way of website, online banking, telephone banking or business outlets announcement should be deemed to arrive on day. The creditor does not need to borne any responsibility for any transmission errors, omissions, or delays of mail, fax, telephone or any other communication system.

4. The two sides agreed that the seal of the office seal, financial seal, contract seal, receive seal and credit seal is the effective seal for the documents, communications and notifications. All staves of the debtor have right to receive files, communications and notifications.

Article 18 the contract effectiveness and other matters

1. The contract shall take effect from the date of signature or stamp of both parties..

2. Any modification and supplement to this contract is effective, through the guarantor and financiers made mutual consent in writing by the legal representative / responsible person or his authorized representative signature and official seal.

3. After the effective of this contract, the master contract signed by the financier and the applicant does not need to be confirmed by the guarantor.

4. During the effective period of this contract, the creditor gives to the debtor and the guarantor any tolerance, forgiveness, or delay to use the rights and interests, shall not damage, impact or limit the creditor to share the rights and interests in accordance with relevant laws and regulations and this contract, or to be deemed giving up the rights and interests, also do not affect the guarantor to borne any obligation under this contract.

5. The creditor shall have the right to authorize or entrust other branch of industrial bank to perform rights and obligations under this contract (including but not limited to authorized or entrusted bank branches of other related contracts, etc.) according to the debtor’s operation and management, or the loan under this contract as other branch’s to undertake, without prior consent of the guarantor, and the guarantor still bear the responsibility of guarantee.

6. The attachment is an integral part of this contract, and the attachment of this contract is equally valid.

7. During the period of the line of credit, if the series of contracts, agreements and other legal documents are not explicitly for the contract of guarantee, that shall be deemed as a guarantee by the guarantee contract.

8. This contract is triplet, the creditor holds two copies, the guarantor holds one copy, with equal legal effect.

Article 19 the notarization and voluntarily to accept compulsory execution

1. The contract should be in the provisions of the state notary office for notarization if any party request notarization.

2. The notarized contract have the enforcement effect, if the debtor fails to perform the debt or the creditor shall realize creditor's rights according to laws and regulations and this contract, the creditor shall have the right to directly apply the people's court with jurisdiction for enforcement.

Article 20 supplement:

1. The parties of this Contract hereby confirm that their domiciles and service methods given herein are their service addresses and methods of relevant legal documents (including but not limited arbitration application, arbitration notice, case filing notice or acceptance notice, statement of defense, written counterclaim, evidence, notice of court session, award, mediation document, execution notice, notice of performance within a time limit, and other legal documents during hearing and execution of arbitration).

Recipient: Pan Dangyu

Detailed Address: Workshop Building A, Shunchao Industrial Zone, Renmin Road, Danhu Community, Guanlan Street, Bao’an District, Shenzhen City

Zip Code: 518111	Tel.: 13510066248
Designated Agent (if any):	Detailed Address:
Zip Code:	Tel.:

The parties of this Contract hereby confirm and agree to send legal documents by personal delivery or by the following methods:

¨ Post; ¨ Fax, No.                     ;    ¨ E-mail, Address:                         ;

¨ SMS, Receiving No.:                      .

The foregoing legal documents shall be deemed as having been served (to the principal if having been served to the designated agent) once they are sent by any means to the address given above. In case of change of any party’s service address and service method, the other party shall be timely notified in written form. If the other party is not timely notified, such change shall be deemed invalid and the party of change shall assume relevant responsibilities arising therefrom.

If the Surety agrees the Discount Applicant to handle discount business (including rediscount business) with the Financer for the commercial bill issued, accepted or endorsed by the Applicant, the Discount Contract between the Discount Applicant and the Financer shall be a subcontract of the Credit Contract secured with this Contract. The discount amount shall be included in the credit line and belong to the scope of guarantee hereunder. The Surety agrees to assume joint and several liability of guarantee pursuant to this Contract.

The creditor (official seal): /s/ [COMPANY SEAL]

the legal representative (signature):

The guarantor (official seal): /s/ [COMPANY SEAL]

the legal representative (signature):

EX-10.4(B)

Exhibit 10.4(b)

Maximum Amount Guaranty Contract

(Apply to lines of credit)

Reference: Xing Yin Shen Longgang credit (guarantee) zi (2015) No. 0431

Creditor: Industrial Bank Co., Ltd. , Shenzhen Longgang Branch

Address: parkland, longxiang road, longgang town,shenzhen

Legal Representative / CEO: Jinkui Li

Contact: Jinlong Huang

Address:

Postal Code:	Fax :
Tel: 0755-33837817	Fax:

Guarantor: Shenzhen Highpower Technology Co., Ltd.

Address: Building A1, 68 Xinxia Street, Pinghu, Longgang, Shenzhen, Guangdong, China

Legal Representative / CEO: Dangyu Pan

Contact:

Address:

Postal Code:	Fax :
Tel: 0755-89686939	Fax:

Contract Location: Industrial Bank Building, Industrial Bank Co., Ltd. Shenzhen Branch

Important notes:

For protecting your rights and interests, please read, check and confirm following items carefully before signing:

1. You have the right to sign this contract. Or you have been given sufficient authority legally.

2. You have read and understood this contract carefully and sufficiently, and have paid attention on assuming, exempting or limiting responsibilities of Industrial Bank Co., Ltd., and the content with bold font.

3. Your company and you have understood the meaning of this contract and relevant legal consequence, and agree to accept these provisions.

4. The contract provided by Industrial Bank Co., Ltd. is a model contract. There is space for modifying, supplement and deleting.

5. If you have further questions to this contract, please consult Industrial Bank Co., Ltd.

The guarantor is voluntary as a financier ("creditor") to provide security for the line of credit of the applicant Springpower Technology (Shenzhen) Co., Ltd. (or "debtor"). In order to clarify the rights and duties, abide by credit, the contracting parties signed this contract in accordance with relevant laws and regulations to comply with.

Article 1 definition and interpretation

In addition to agreed in writing by both parties, then:

1. The master contract (as defined below) agreed definitions and interpretations applicable to this contract.

2. The "claims" or called the principal debt, means the debt approval and provided by the creditor, including loans, lending, trade finance (including but not limited to issuing letters of credit, trust receipts, packing loans, export financing, export collection bills and import bills, etc.), bankers' acceptances, discounted bills , bills buyback, guarantees (including the Independent guarantees, see demand guarantees and standby letters of credit, etc.) and other financing business (including principal, interest, penalty interest, compound interest, liquidated damages, damages, cost of achieving the claim).

Under this contract, the claim of the financier and the debt of the applicant mean the same content.

3. The "principal" refers to the principal debt made by the business transacted by the financier, including but not limited to the principal loans, trade finance capital, bankers' acceptances fare, bill discounting, money advanced for credit of letter, the principal part of guaranteed by the creditor for the debtor.

4. The "guaranteed maximum principal" means the amount agreed by both parties in order to clarify the scope of the claims guaranteed by the covenant. Regardless of times and sum of the debt, the guarantor takes joint liability for all debt under the guaranteed maximum principal.

5. The "validity of guarantee" refers to a continuous uninterrupted period agreed by both parties in order to clarify the scope of the claims by the covenant. The debt happened during the period, whether the settlement deadline is over that period or not, the guarantor takes joint liability for all debt under the guaranteed maximum principal.

6. "The cost of the claim for the creditor" refers to the necessary fees of achieving the credit, including take litigation, arbitration and other ways to pay litigation (arbitration) fees, legal fees, travel expenses, execution fees, security fees, and other expenses.

7. "Master Contract" means credit contract (that is, "General Agreement") and all sub-contract signed by the financier and the applicant.

"Sub-contract" means based on the basic or special contract, the contract signed by both parties after getting approval of the creditor, include the content of each sum, the due date and other rights and obligations. The sub-contract is an integral part of the basic or special contract, with the same legal effect. The forms of contract can be different according to business needs, as the application of L/C, bills or other manner considered fit by the creditor. If the master contract and sub-contract has different part, the sub-contract will be effective.

8. This "working day" refers to the bank business day, If a withdrawal or repayment date is not a Business Day, delay to the next business day.

Article 2 the main credit contract of guarantee

The master contract of guarantee is Basic Credit Line Contract (No. XingYin ShenLonggang credit zi (2015) No. 0431), and its sub-contracts. The sum of credit is RMB forty million only, credit period is from July 15^th 2015 to July 15^th 2016.

The guarantor will be borne joint liability for all debts under the master contract.

Article 3 Maximum guarantee principal

1. Under this contract, maximum guarantee principal is RMB (in word) SIXTY MILLION YUAN ONLY.

2. Under the maximum guarantee principal, the guarantor is borne joint liability for all debt balance (including principal, interest, penalty, compound interest, liquidated damages, damages, realization of claims).

Article 4 validity of guarantee

1. Valid period is from July 15^th 2015 to July 15^th 2016.

2. The loan under the contract can be used only when during the period of validity, but the guarantor is borne joint liability for each debt whether the debt is in or over the validity of the guarantee contract.

Article 5 guarantee responsibility

1. The guarantor is borne joint liability under this contract. For whatever reason, if the applicant fails to fulfill due debts under the master contract (including but not limited to early recovery of debts because of the default of the applicant or the guarantor's request), the guarantor shall perform the repayment obligation on behalf of the debtor.

2. If there are several guarantors under this contract, all guarantors shall jointly bear joint responsibility.

3. Main debts expire, the debtor fails to repay the debt and interest, the guarantor shall perform the repayment obligation.

4. Furthering the period of the main debt, if the creditor recovers the debt in advance according to the master contract, the guarantor shall bear joint responsibility for this and other debts under the guarantee contract.

Article 6 scope of guarantee

1. The financial claims under this contract ("the secured claims") refers to all debts provided by the creditor to the debtor, including but not limited to the principal debt, interest (including default interest, compound interest), breach of contract , damages , expenses of claims.

2. On the due date, if the applicant refused to repay the loan, which lead to the debt rights also in the range of the guarantee.

3. The principal , interest and other costs, the time of performance, usage, rights and obligations of the parties as well as any other relevant matters under the contract shall prevail by relevant agreements, contracts, application, notice , various certificates and other records, all kinds of certificates and other relevant legal documents issued or signed without guarantor’s confirmation.

4. In order to avoid ambiguity, all fees of prepare, improve, perform or enforce the contract (including, but not limited to attorney’s fees, litigation or arbitration costs etc.) constitute a part of the secured debt.

Article 7 warranty period

The warranty period under the contract:

1. The warranty period under the contract is calculated according to each financing applied by the applicant. For each financing, the warranty period is ended after two years of the expiration.

2. If there are several financings in one master contract, the warranty period of each financing is ended after two years of the expiration.

3. If the principal debt is repayable in installments, there are several financings in one master contract, each warranty period is calculated in installments, and the guarantor shall bear responsibility for two years from the date of expiry.

4. If any extension agreement is signed by financier and debtor without agreed by the guarantor, the guarantor will still bear responsibility for all financing under the contract within two years from the date of extension expiry.

5. If the financier decides to recover the debts in advance, the warranty period is two years since the date of expiry noticed by the financier.

6. The warranty period of bankers' acceptances, letters of credit and letters of guarantee is two years from the date of advance payments. If advance for several times, warranty period is calculated from each advance payment.

7. The warranty period of commercial bills is two years from the date of discount maturity.

Article 8 on demand

As long as financiers submitted notification of debt collection to the guarantor with the contract number and the amount of debt, the guarantor shall immediately perform the repayment and give up all reasons of defense.

Article 9 declaration and commitment of guarantor

The guarantor voluntarily made the following statement and commitment, and liable for its truthfulness:

1. The guarantor is established under the laws and a validly existing legal company, with full civil capacity. The guarantor follows the creditor's request to provide relevant evidence, permits, certificates and other documents required by the creditor.

2. The guarantor has sufficient capacity to fulfill all the obligations and responsibility under the contract, not because of any instruction, financial conditions change, or any agreement with any party to reduce or waive their commitment to settle the obligation.

3. The guarantor has sufficient power, authority and legal right to sign this contract, the guarantor has obtained and fulfilled all necessary approvals and authorizations of its internal or other relevant procedures to make the contract execution and performance, and has achieved and fulfilled any government department or other authority's approval, registration, authorization, consent, license or other relevant procedures for this contract, and signed this contract with all the necessary approvals, registrations, consents, licenses , authorizations and other related procedures remain fully valid.

4. The guarantor signed the contract in full compliance with the relevant Articles of the guarantor, the internal decisions, shareholders and board resolution. The contract does not conflict with any charter, internal decisions, shareholders resolutions, board resolution and the guarantor's policies.

5. The execution and performance of this contract is based on the guarantor's true intention. Loan facility is compliance with legal and regulatory requirements, execution and performance of this contract does not violate any binding law, regulation, ordinance or the contract. This contract is valid and enforceable, as a result of the guarantor’s defects in the execution and performance of this contract to result in the contract is invalid, the guarantor will immediately and unconditionally make compensation for all losses to the creditor.

6. Under this contract, all the documents, financial statements and other information provided by the guarantor is true, complete, accurate and effective, and continue to fulfill the creditor’s request of the financial indicators.

7. Such as a change in ownership structure or key management personnel or other significant events and significant transactions, the guarantor shall require the prior written consent of the financer.

8. If the guarantor fails to fulfill the contract obligations, the guarantor hereby authorizes the creditor recover the funds from all branches accounts of the guarantor without going through the judicial process.

9. When the guarantor has fulfilled the guarantee responsibilities, the guarantor has the right to recover the money from the applicant without prejudice the repayment in the future. However, if the applicant has the claim of the guarantor and the requirement of repayment from the financier at the same time, the guarantor agreed the applicant to repay the debt of the financier first.

10. If the applicant and the guarantor have or will sign a counter- guarantee contract in respect of the obligations under the contract, the counter-guarantee contract shall not prejudice any rights of the financier in law or in fact under the contract.

11. Before pay off the debts, regardless of any reason lead to reduce the guarantee ability of guarantor, the financier has the right to require the guarantor to provide a new full and effective guarantee.

12. When he applicant fails to fulfill obligations, regardless of the financier has other guarantee right of the debts, (including, but not limited to warranties, mortgage, pledge, guarantees, standby letters of credit and any other form of guarantee), the guarantor shall bear full responsibility to ensure the security and waive all defenses on law and property law.

13. There was no any litigation, arbitration or administrative proceedings for the guarantor’s outstanding or known to occur on the guarantor, and there was no events of liquidation or other similar proceedings whether it comes forward by the guarantor or by a third party.

14. If the creditor is forced into disputes between the guarantor and any other party because of fulfilling the obligations under the contract, the guarantor should pay litigation or arbitration costs, legal costs and other expenses.

15. During warranty period, the guarantor undertakes not to transfer, conceal property, or give up, passive exercise claims in any way.

Article 10 Obligations of disclosing important transactions and events

1.Guarantor should inform financer of significant transactions and events of guarantor in written timely.

2. During valid period of this contract, stock transfer, reorganization, merger, discrete, shareholding reform, joint venture, cooperation, joint operation, contract, lease, business scope, change of registered capital, major asset transfer, contingent liability, or anything which may affect guarantor’s ability of assuming responsibility should be notified to financer in writing 30 days in advance.

3. Termination of business, going out of business, bankruptcy, dissolution, cancellation of business license, deterioration of financial situation or involving in major business dispute, or anything may affect guarantor’s ability to assume responsibility should be noticed to financer in 7 days by written since the date above things take place.

4. When guarantor involves in major litigation or arbitration with any third party, or other significant thing which may affect guarantor’s ability to assume responsibility, financer should be notified by written in 7 days since the date guarantor receives relevant notice.

5. The guarantor promises that it will not use its legal dispute with third party to damage financer’s right.

Article 11 events of default and breach of contract

1. Since this contract comes into force, the financer and the guarantor shall perform the obligations as agreed in the contract, any one party fails to perform or not completely fulfill the obligation of this contract, shall bear the corresponding liability for breach of contract.

2. One of the following circumstances occurs, the financier has the right to require the guarantor immediately to fulfill the repayment obligations:

(1) Any information provided by guarantor and the statements and commitments stated in Article 9 of this contract are false, inaccurate, incomplete and misunderstood.

(2) Deterioration of guarantor’s credit status and obvious weakening of repayment ability (including contingent liability);

(3) the guarantor violates of the foregoing provisions of Article 10, not disclose the significant transactions and events;

(4) Stopping doing business, going out of business, being announced bankruptcy, dissolution, cancellation of business license, involving in major business dispute, and deterioration of finance condition and so on;

(5) Other thing which may damage financer’s right.

3. If the guarantor defaults, financer has the right to take one or more following measures:

(1) require the guarantor to remedy;

(2) require the guarantor to provide a new full and effective guarantee;

(3) require the guarantor to perform guarantee obligation in advance;

(4) require the guarantor to repay all direct or indirect losses for breach of contract.

The guarantor shall make the implementation of the above measures and waive all defenses.

Article 12 the independence of the guarantor’s obligations

1. The guarantor's obligations under this contract have independence with no effect of the relationship between any party and the third party, except there are stipulates.

2. The guarantee contract has independence, regardless of any conditions; the guarantee contract is effective even if the master contract is not effective. If the master contract is confirmed as invalid, then the guarantor still bear the joint liability for the debtor’s debts.

3. If the applicant violates the master contract (including but not limited to the applicant fails to use the loan under the sub-contract) , shall not affect the liability of guarantee, the guarantor cannot require to reduce or waive the responsibility of guarantee.

4. The main creditor under the contract expires or the guarantor fails to perform under this contract, the financier has the right to directly deduct the funds from any account of the guarantor.

5. As under the master contract , there are other guarantees ( including but not limited to guarantee , mortgage , pledge, standby and any other form of security ) , the guarantor agrees that one can give up part of security interest or security interest subordinated ( including the collateral is based on the collateral provided by the debtor) , financier and any mortgagor / pledgor (including the mortgagor / pledgor artificially is the debtor himself) can be varied by agreement and subordinated security interest, the amount of the secured creditor and other content, even if financiers made ​​the above act, the guarantor is still voluntary to bear all responsibility of this contract.

6. The guarantor agrees and acknowledges: the financer and the applicant agree to alter the master contract are deemed to have the prior consent of the guarantor, the guarantor cannot reduce the responsibility because of this.

7. Before the maximum guarantee claims determined, the financer has the right to transfer part or all guarantee rights without the prior consent of the guarantor.

Article 13 the continuity of obligation

1. All the guarantor's obligations under this contract have continuity, for his heir apparent, agent, receiver, the assignee and the main company after merger, reorganization, change the name is completely and equally binding.

2. The guarantor hereby acknowledges, financiers can continuously and cyclically to provide financing to the applicant under the contract, the guarantor has joint for liability of all claims, regardless of the times and sum of each financing.

3. The contract is a continuing guarantee, the guarantor shall bear responsibility of guarantee until the debts is paid off.

4. All or part of the release or discharge of the secured creditor based on any payments, guarantees or other disposition which have been declared invalid or must be repaid, the guarantor’s responsibility will be remain in force.

Article 14 priority subrogation arrangements

The guarantor states that, once the guarantor cannot assume security responsibility, and the guarantor itself has not sufficient property to be repaid, the financier has priority right of any claims against third parties, accounts receivable and other property interests. The guarantor will voluntarily relinquish the defenses against the financier under Article 28 of "security law".

Article 15 offsetting arrangements

The right of the financier under the contract cannot offsetting by the guarantor’s or any other party’s right of offsetting.

Article 16 Applicable Law, Jurisdiction and Dispute Resolution

1. Effective performance, termination, interpretation and dispute settlement etc. of this contract is applicable for china laws.

2. For any dispute about this contract, guarantors and creditors should resolve through friendly consultations; If friendly negotiation fails, the both parties agree to solve by the following section (2) : (2) To Shenzhen Arbitration Commission for arbitration, to resolve the dispute by the rules of the Arbitration Commission, that the arbitration award is final and binding on both parties. The site selection is in Shenzhen.

3. at the disputed period, the part of not involved has still to be carried out.

Article 17 Files, Communications and Notifications

1. Any documents, communication and notification under this contract shall be sent to the other party by the way of address, phone number or other contact methods listed in the cover of this contract.

2. If any above contact method of any party changed, one should notice the other party by any quick way immediately. If one does not notice, one should be borne for the documents, communication and notification sent through old address, phone number or other contact methods listed in the cover of this contract.

3. Any documents, communications and notifications sent by the way of the above address, shall be deemed to arrive on the following dates:

(1) by post (including speed post, ordinary letter, registered mail), it will be deemed to arrive on the day after five working day;

(2) by facsimile or other electronic means of communication, it will be deemed to arrive on day;

(3) by personal delivery, the date of recipient is deemed to be arriving date.

Notifications by the way of website, online banking, telephone banking or business outlets announcement should be deemed to arrive on day. The creditor does not need to borne any responsibility for any transmission errors, omissions, or delays of mail, fax, telephone or any other communication system.

4. The two sides agreed that the seal of the office seal, financial seal, contract seal, receive seal and credit seal is the effective seal for the documents, communications and notifications. All staves of the debtor have right to receive files, communications and notifications.

Article 18 the contract effectiveness and other matters

1. The contract shall take effect from the date of signature or stamp of both parties..

2. Any modification and supplement to this contract is effective, through the guarantor and financiers made mutual consent in writing by the legal representative / responsible person or his authorized representative signature and official seal.

3. After the effective of this contract, the master contract signed by the financier and the applicant does not need to be confirmed by the guarantor.

4. During the effective period of this contract, the creditor gives to the debtor and the guarantor any tolerance, forgiveness, or delay to use the rights and interests, shall not damage, impact or limit the creditor to share the rights and interests in accordance with relevant laws and regulations and this contract, or to be deemed giving up the rights and interests, also do not affect the guarantor to borne any obligation under this contract.

5. The creditor shall have the right to authorize or entrust other branch of industrial bank to perform rights and obligations under this contract (including but not limited to authorized or entrusted bank branches of other related contracts, etc.) according to the debtor’s operation and management, or the loan under this contract as other branch’s to undertake, without prior consent of the guarantor, and the guarantor still bear the responsibility of guarantee.

6. The attachment is an integral part of this contract, and the attachment of this contract is equally valid.

7. During the period of the line of credit, if the series of contracts, agreements and other legal documents are not explicitly for the contract of guarantee, that shall be deemed as a guarantee by the guarantee contract.

8. This contract is triplet, the creditor holds two copies, the guarantor holds one copy, with equal legal effect.

Article 19 the notarization and voluntarily to accept compulsory execution

1. The contract should be in the provisions of the state notary office for notarization if any party request notarization.

2. The notarized contract have the enforcement effect, if the debtor fails to perform the debt or the creditor shall realize creditor's rights according to laws and regulations and this contract, the creditor shall have the right to directly apply the people's court with jurisdiction for enforcement.

Article 20 supplement:

1. The parties of this Contract hereby confirm that their domiciles and service methods given herein are their service addresses and methods of relevant legal documents (including but not limited arbitration application, arbitration notice, case filing notice or acceptance notice, statement of defense, written counterclaim, evidence, notice of court session, award, mediation document, execution notice, notice of performance within a time limit, and other legal documents during hearing and execution of arbitration).

Recipient: Pan Dangyu

Detailed Address: Workshop Building A, Shunchao Industrial Zone, Renmin Road, Danhu Community, Guanlan Street, Bao’an District, Shenzhen City

Zip Code: 518111	Tel.: 13510066248
Designated Agent (if any):	Detailed Address:
Zip Code:	Tel.:

The parties of this Contract hereby confirm and agree to send legal documents by personal delivery or by the following methods:

¨ Post; ¨ Fax, No.                        ;   ¨ E-mail, Address:                         ;

¨    SMS, Receiving No.:                         .

The foregoing legal documents shall be deemed as having been served (to the principal if having been served to the designated agent) once they are sent by any means to the address given above. In case of change of any party’s service address and service method, the other party shall be timely notified in written form. If the other party is not timely notified, such change shall be deemed invalid and the party of change shall assume relevant responsibilities arising therefrom.

If the Surety agrees the Discount Applicant to handle discount business (including rediscount business) with the Financer for the commercial bill issued, accepted or endorsed by the Applicant, the Discount Contract between the Discount Applicant and the Financer shall be a subcontract of the Credit Contract secured with this Contract. The discount amount shall be included in the credit line and belong to the scope of guarantee hereunder. The Surety agrees to assume joint and several liability of guarantee pursuant to this Contract.

The creditor (official seal): /s/ [COMPANY SEAL]

the legal representative (signature):

The guarantor (official seal): /s/ [COMPANY SEAL]

the legal representative (signature):

EX-10.5

Exhibit 10.5

Text Encoding: CMBC-HT031 (GS2007)

Comprehensive Credit Granting Contract

(Applicable to corporate credit granting)

No.: GSXZ 2015 SHJZBZEZ No. 008

SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Seal)

CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal)

CHINA MINSHENG BANKING CORP., LTD.

Comprehensive Credit Granting Contract

Credit Receiver: SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. ((hereinafter referred to as Party A)

Address: Bldg. 1, No. 68, Xinsha Road, Pinghu Street, Longgang District, Shenzhen

P. C.:

Legal Representative / Main Principal: Pan Dangyu

Tel.:

Fax:

Opening Bank:

Account No.:

Credit Grantor: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (hereinafter referred to as Party B)

Address: Minsheng Bank Building, Xinzhou No. 11 Street, Futian District, Shenzhen City

P. C.: 518048

Legal Representative / Main Principal: Ou Yangyong

Tel.:

Fax:

In accordance with the Contract Law, the Law on Commercial Banks and other relevant laws and regulations, Party A and Party B make and enter into this Contract upon consensus through consultation on the principles of faithfulness, credit, equality and willingness. Both Parties shall commonly observe this Contract.

Chapter 1 Credit Line and Category

Article 1 During the valid credit period specified in this Contract, the highest credit line Party A may apply Party B for use is (in words) twenty million Yuan only, adopting RMB as the currency.

The line under this Contract shall:

¨ be used by Party A;

¨ be used by Party A and its subordinate wholly-owned or holding companies (hereinafter referred to as its subsidiary companies). Refer to annex 1 for the list of subsidiary companies which can use the comprehensive credit line;

Credit line hereunder means the net amount after deducting the deposit. In other words, the equal financing used after Party A or a third party other than Party A pays the deposit (or pledge of deposit) may not occupy the said line.

Article 2 The highest credit line hereunder shall be used for the following credit category:

RMB business:

x (1) loan;

þ (2) bank acceptance;

x (3) Discount of draft;

þ (4) bank guarantee;

x (5) Others:

Trade financing business:

x (1) foreign currency loan;

x(2) bank guarantee;

x (3) Outward documentary bill;

x (4) Discount of bill;

x (5) Acceptance of draft;

x (6) Opening of L/C;

x (7) Others: ____________

Other business: _________________

Chapter 2 Credit Term

Article 3 The effective term of the highest credit line specified in Article 1 herein shall be one year, from July 16, 2015 to July 16, 2016.

Article 4 Party B is entitled to examine the use of the credit line hereunder at any time. In case of any event of default as specified in Chapter 7 herein, Party B shall have the right to adjust the credit term.

Chapter 3 Guarantee

Article 5 In order to ensure repayment of the creditor’s rights produced herein, the following one or several guarantees are adopted:

x The Mortgagor _________________ and Party B (i.e. the Mortgagee) conclude a Maximum Guarantee Contract of No. _________________;

x The Mortgagor _________________ and Party B (i.e. the Mortgagee) conclude a Maximum Guarantee Contract of No. _________________;

x The Pledgor _________________ and Party B (i.e. the Pledgee) conclude a Maximum Guarantee Contract of No. _____________;

x Party A shall provide maximum guarantee for the credit line used by the subsidiary company listed in the annex.

þ Others: Springpower Technology (Shenzhen) Co., Ltd. and Party B conclude a Maximum Guarantee Contract of 2015 SHJZBZEZ No. 008-1

the Guarantor Huizhou Highpower Technology Co., Ltd. and Party B conclude a Maximum Guarantee Contract of 2015 SHJZBZEZ No. 008-2;

The Guarantor Pan Dangyu and Party B conclude a Maximum Guarantee Contract of 2015 SHJZBZEZ No. 008-3;

Article 6 When Party A and Party B concludes a specific business contract hereunder, Party B has the right to demand Party A to provide any security other than that specified in Article 5 herein.

Article 4 Use of Credit Line

Article 7 Within the credit term and highest credit line specified herein, Party A may use the credit line once or several times. If Party B complies with the stipulations of this Contract through review, Party B shall conclude a relevant specific credit granting business contract or agreement with Party A (hereinafter referred to as the specific business contract).

Article 8 The accumulative balance of all the credit lines used by Party A (the accumulative amount of principals used and not repaid) shall not exceed the highest credit line at any time within the credit term.During the credit term, Party A may apply for reusing the credit line that Party A has repaid. The credit line not used during the credit term shall be cancelled automatically when the credit term expires.

If Party A fails to perform its obligations under this Contract or under the specific business contract, Party B shall have the right to stop Party A continuously using the remaining credit line.

Article 9 Party A must use credit lines within the credit term specified in Article 3 herein. The date of use of a credit line shall not be later than the deadline of the credit term (if the business type specified in the specific business contract is loan/import and export bill purchase, the date of release of each loan shall not be later than the deadline; if the business type specified in the Main Contract is acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods), the date of draft of acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods) shall not be later than the deadline). In case of adjustment of the credit term, the deadline shall be the deadline after this adjustment. The use term of each credit line shall accord with the specific business contract.

Article 10 When this Contract becomes effective, Party A may not use any line hereunder until it meets the following preconditions simultaneously, or Party B shall have the right to refuse conclusion of a specific business contract with Party A.

10.1 Party A has provided documents according to Party B’s requirements, including but not limited to: Party A’s business license, organization code certificate and tax registration certificate which are qualified through annual inspection; Party A’s current effective articles of association; identity certificate and a photocopy of the OD card of the Company's legal representative;

10.2 Guarantee-related documents as the credit guarantee hereunder are effective, and the mortgage right/pledge right has been established;

10.3 Party A has never conducted any event of default, or Party A has conducted any event of default but the default has been solved satisfying Party B or has been exempted by Party B;

10.4 Party A’s commitments given in Chapter 5 herein have been kept prior to the date of withdrawal;

10.5 Party A’s financial conditions when the credit line is applied for use are basically the same as those when this Contract is signed, and there is no material adverse change;

Article 11 The expenses which should be charged under bills, letter of guarantee, international trade financing and other related business, the discount rate under discount of bills, and the interest rate and exchange rate which should be determined in inward and outward documentary bills shall be agreed by Party A and Party B in each specific business contract.

Article 12 In case of any discrepancy between this Contract and the specific business contract made and entered into by and between Party A and Party B, the specific business contract shall prevail.

Chapter 5 Party A’s Commitments

Article 13 Party A’s use of the credit line shall comply with the provisions of laws and the stipulations of this Contract and the specific business contract, and Party B is entitled to check the situations of the specific business at any time.

Article 14 During the credit use period (from the date of signature of this Contract to the date when Party B’s all creditor’s rights are compensated), Party A shall report true financial statements and all relevant information concerning the opening bank, account number and deposit and loan balances according to Party B’s requirements.

Article 15 If providing security for any other’s debts, Party A shall notify Party B in advance, and the performance of the specific business contract made and entered into with Party B shall not be affected.

Article 16 During the credit use period, Party A shall notify Party B 30 days in advance if Party A conducts activity of asset reorganization by means of merger, acquisition, consolidation and division, or any activity changing its operation right in any form, such as contracting and lease, or any activity changing its organization and operation method, or any activity for selling, transferring or disposing its any material asset or equipment in other forms and making major investment. Party A shall repay Party B’s creditor’s rights in advance or implement the responsibility of repaying creditor’s rights according to Party B’s requirements.

Article 17 In case of any event which endangers Party A’s normal operation or constitutes any major threat to performance of the obligation of repayment hereunder (including but not limited to the events specified in sub-clause 10.3 herein), Party A shall notify Party B immediately in written form.

Article 18 In case of change of the domicile or business site of the legal person of Party A, or increase or decrease of Party A’s registered capital, or change of Party A’s legal representative and other senior management personnel, Party A shall notify Party B within seven days after occurrence of the change.

Article 19 Party A shall repay on time the principal and interests of the funds of the specific business under the credit line and pay on time the expenses payable.

Article 20 If Party A uses international trade financing credit line (including packing loan, import and export bill purchase, opening of L/C, letter of guarantee, discount of bill and acceptance of bill of exchange), Party A shall ensure:

1. the settled amount of the import and export business conducted through Party B during the credit period shall not be less than RMB _________________ Yuan, of which the settled amount of the export business shall not be less than RMB _________________ Yuan;

2. When the business is conducted, the latest Uniform Customs and Practice for Documentary Credits, the Uniform Rules for Collections and other related international practices prevailing when this Contract is signed shall be strictly observed. Party B’s reputation and interest shall not be damaged due to any business dispute.

Chapter 6 Party B’s Commitments

Article 21 If Party A’s application for use of a credit line complies with the stipulations of this Contract, Party B shall approve and perform the application timely according to the specific business contract signed.

Article 22 Party B shall not make adjustment of the credit term and the highest credit line bad for Party A, unless otherwise specified in Chapter 7 of this Contract.

Chapter 7 Adjustment of Credit Line and Acceleration

Article 23 Under the following circumstances during the performance period of this Contract, Party B is entitled to adjust or cancel a credit line, and demand Party A to prepay all the borrowings having been withdrawn by Party A under this Contract:

23.1 Party A’s operating status is worsen or Party A has any major operational difficulty;

23.2 there is any major change of the market related to Party A’s operation;

23.3 there is any major adjustment of relevant national policies;

23.4 Party A violates any other contract or agreement concluded with others, or Party A makes any commitment or warranty unilaterally, which constitutes breach of other debts or other debts have been or may be announced acceleration by other creditor;

23.5 the guarantee capacity of the guarantor hereunder becomes obviously insufficient, or the guarantor violates the guarantee contract, or the guarantor violates any obligation specified in the commitments given by the guarantor, or the pledged or mortgaged property hereunder is damaged or its value is obviously decreased, and Party A fails to provide a new guarantee required according to Party B’s requirements;

23.6 during the valid period of this Contract, Party A expressly indicates or indicates by acts that Party A is unable to or fails to perform its obligations specified in this Contract, the specific business contract or Party A’s commitments;

23.7 Party A provides Party B with any balance sheet, statement of profits and losses and other important materials which contain false information or conceal important facts, or Party A refuses Party B’s supervision on Party A’s use of the credit line and relevant production, operation and financial activities;

23.8 Party A transfers its assets, withdraws funds, evades debts or has any other behavior which damages Party B’s rights and interest;

23.9 there is any major change of Party A’s financial conditions, or Party A is involved in litigation, arbitration, administrative punishment or other judicial administrative proceedings, which may have adverse impact for Party A on the execution of this Contract;

23.10 there are any other circumstances under which Party A loses or may lose its ability to perform obligations;

23.11 Party A violates its any commitment given in Chapter 5 herein or fails to perform its obligations under this Contract or the specific business contract.

Article 8 Effectiveness of Contract

Article 24 This Contract shall become effective when both Parties’ legal representatives/main principals or authorized agents sign or seal and both Parties affix their official seals/special contract seals.

Chapter 9 Dispute Settlement

Article 25 Any and all disputes between Party A and Party B arising from and in connection with the execution of this Contract and/or the specific business contract shall be governed by the court at the location where Party B is located, except that there are additional stipulations in the specific business contract for governing of disputes under this Contract.

Chapter 10 Supplementary Provisions

Article 26 All the specific business contracts concluded between Party A or its subsidiary companies listed in Annex 1 of this Contract and Party B for each specific credit granting business on the basis of this Contract shall be deemed as an integral part of this Contract and constitute this Contract as a whole.

Article 27 The Contract has been made out in three originals for Party A, Party B and the guarantor each holding one, which shall be equally authentic.

Article 28 When this Contract is signed, Party B has explained and interpreted in details all the terms and conditions of this Contract to Party A, and both Parties have no objection to the terms and conditions of this Contract. Both Parties have accurate understanding of the legal meaning of their corresponding rights and obligations, limitation of responsibilities or disclaimers.

Article 29 Other provisions agreed by both Parties

The credit category under this Contract includes: bank acceptance bills, with the single deposit ratio not lower than 30% and the maximum term not exceeding 6 months (the maximum term for bank acceptance bill is 12 months); financing letter of guarantee, with the single deposit ratio not lower than 50%. Shupeng Technology (Shenzhen) Co., Ltd., Huizhou Highpower Technology Co., Ltd. and Party A’s legal representative Pan Dangyu shall provide joint liability for Party A’s warranty guarantee for Party B’s debts under this Contract.

Article 30 The credit lines granted to Party A and/or its subsidiary companies in accordance with the Comprehensive Credit Granting Contract or any other contract (“Original Credit Granting Contract”) prior to the signature of this Contract may be performed continuously according to the Original Credit Granting Contract and the relevant specific business contract. However, the outstanding credit line under the Original Credit Granting Contract shall be included in the highest credit line specified in Article 1 herein for calculation and management.

Article 31 Both Parties agree and authorize Party B irrevocably to report relevant information to the financial credit information database established by the State. Such information shall include the name, registered address and other related information of this institution, the transaction records, credit information and bad information (including failure to perform obligations of this Contract, the institution’s performance of obligations and enforcement ruled or judged by the people’s court, and other relevant bad information prescribed by laws and regulations) generated during business activities and performance activities of this institution under this Contract.

This Contract is signed by Party A and Party B in Shenzhen.

Party A: SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Seal) (Seal)

Legal Representative / Main Principal: Pan Dangyu (Signature)

(Or Authorized Agent)	(Signature or Seal)
Date:

Party B: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal) (Seal)

Legal Representative / Main Principal:

(Or Authorized Agent)	(Signature or Seal)
Date:

Annex:

List of subsidiary companies agreed by the Credit Receiver (Party A) for using the lines under the Comprehensive Credit Granting Contract:

1. Full name of the Company:

Address:

Legal Representative:

P. C.:            Tel.:             Fax:  

Opening Bank:                Account No.:

2. Full name of the Company:

Address:

Legal Representative:

P. C.:             Tel.:             Fax:  

Opening Bank:                 Account No.:

3. Full name of the Company:

Address:

Legal Representative:

P. C.:             Tel.:             Fax:

Opening Bank:                 Account No.:

4. Full name of the Company:

Address:

Legal Representative:

P. C.:             Tel.:             Fax:

Opening Bank:                 Account No.:

5. Full name of the Company:

Address:

Legal Representative:

P. C.:             Tel.:             Fax:

Opening Bank:                 Account No.:

Note: the Credit Receiver shall affix its official seal on this page. Where there is any control of the line for use by a subsidiary company, a limit may be indicated or another page may be made for format explanation.

EX-10.5(A)

Exhibit 10.5(a)

Text Encoding: CMBC-HT041 (GS2007)

Maximum Guarantee Contract

(Applicable where the guarantor is a unit)

No.: GGBZ 2015 SHJZBZEZ No. 008-1

Shupeng Technology (Shenzhen) Co.,wd Ltd. (Seal)

CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal)

CHINA MINSHENG BANKING CORP., LTD.

Maximum Guarantee Contract

Guarantor: Shupeng Technology (Shenzhen) Co., Ltd. (hereinafter referred to as Party A)

Address: Workshop Building A, Shunchao Industrial Zone, Renmin Road, Danhu Community, Guanlan Street, Bao’an District, Shenzhen City

P. C.:

Legal Representative / Main Principal: Pan Dangyu

Tel.:

Fax:

Opening Bank:

Account No.:

Creditor: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (hereinafter referred to as Party B)

Address: Minsheng Bank Building, Xinzhou No. 11 Street, Futian District, Shenzhen City

P. C.: 518048

Legal Representative / Main Principal: Ou Yangyong

Tel.:

Fax:

In order to ensure the performance of the Main Contract made and entered into by and between Party B and SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (hereinafter referred to as “Debtor of the Main Contract”), Party A is willing to provide maximum guarantee for all/par of the debts under the Main Contract. IN WITNESS WHEREOF, Party A and Party B conclude and sign this Contract through friendly consultation in accordance with relevant national laws and regulations.

Chapter 1 Category of the Principal Creditor’s Right Guaranteed and Maximum Amount of Debts

Article 1 The Main Contract of this Contract is selected as follows:

þ The Comprehensive Credit Granting Contract of 2015 SHJZBZEZ No. 008 made and entered into by and between Party B and the Debtor of the Main Contract, this Contract, and the specific business contracts, applications IOU, and certificates of creditor’s rights or electronic data under this Contract shall constitute the Main Contract of this Contract;

x All of            continuously made and entered into by and between Party B and the Debtor of the Main Contract during the period of the principal creditor’s right specified in Article 3 herein shall constitute the Main Contract of this Contract. The amount of all the outstanding principals used by the Debtor of this Contract at any time shall not exceed the limit specified in Article 2 herein. However, within this limit, the Debtor of the Main Contract may apply for recycling the limit of all the outstanding principals.

Article 2 The maximum amount of debts guaranteed by Party A is: (currency) RMB, (amount in words): twenty million Yuan only.

The maximum amount of debts is the maximum limit for balance of principals, defined as follows:

The maximum limit for balance of principals is the maximum limit for principals of principal creditor’s rights only. If the principal does not exceed the said limit, Party A is willing to undertake joint guarantee liability for all the accounts payable within the scope specified in Article 6 of this Contract.

Chapter 2 Period of the Principal Creditor’s Right Guaranteed

Article 3 The period of the principal credit’s right guaranteed under this Contract shall be from July 16, 2015 to July 16, 2016. The stipulations of this article have the following meanings:

3.1 If the business specified in the Main Contract is a loan business, the date of release of each loan shall not be later than the expiry date of this period.

3.2 If the business specified in the Main Contract is a business of acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods), the date of draft of acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods) shall not be later than the expiry date of this period.

Chapter 3 Guarantee Method

Article 4 Joint liability guarantee is adopted as the method of guarantee by Party A.

Article 5 Besides the guarantee method specified in this Contract, if there is any other guarantee under the Main Contract (including the Debtor of the Main Contract provides mortgage/pledge guarantee for Party B to the extent of the Debtor’s own property), Party A’s guarantee liability undertaken for Party B shall not be affected by any other guarantee nor be exempted or reduced arising therefrom. Party B is entitled to select to exercise the guarantee right under this Contract first and Party A waives the prior right of defense of any other guarantee. If Party B’s priority to gain compensation from the said mortgage right/pledge right is lost or reduced due to Party B’s waiver of the mortgage right/pledge right for the property of the Debtor of the Main Contract for any reason or due to Party B’s change of the sequence or contents of the mortgage right/pledge right, as promised by Party A, Party A’s guarantee liability undertaken for Party B shall not be exempted or reduced.

Chapter 4 Scope of Guarantee

Article 6 Party A’s guarantee scope: the maximum principal of the principal creditor’s rights specified in Article 2 of this Contract and other accounts payable (including but not limited to interest, default interest, compound interest, penalty, damages, expenses for realizing creditor’s rights and guarantee right (including but not limited to legal cost, attorney fee and business traveling expenses), and all other reasonable expenses payable). Other accounts payable specified in the said scope shall be included in the scope of guarantee liability undertaken by Party A but shall not be included in the maximum limit for balance of principals guaranteed under this Contract.

Article 7 The funds (including the funds Party B obtains from exercising the right specified in sub-clause 12.2 of this Contract) that Party A pays Party B for the purpose for performing Party A’s responsibility under this Contract shall be paid according to the following order: (1) Party B’s expenses for realizing creditor’s rights and guarantee right; (2) damages; (3) penalty; (4) compound interest; (5) default interest; (6) interest; (7) principal. Party B is entitled to change the said order.

Chapter 5 Determination of the Creditor’s Right Guaranteed

Article 8 The creditor’s right guaranteed under this Contract shall be determined under any one of the following circumstances:

8.1 the period of the principal creditor’s right specified in Article 3 of this Contract expires;

8.2 the Main Creditor announces acceleration of all debts under the Main Contract by law or according to relevant stipulations of the Main Contract;

8.3 other circumstances for determining the creditor’s right guaranteed prescribed by law.

Article 9 When the creditor’s right guaranteed under this Contract is determined, the following shall become effective:

9.1 When the creditor’s right guaranteed under this Contract is determined, the outstanding creditor’s right under the Main Contract shall be included in the scope of the creditor’s right guaranteed no matter whether the performance period of the creditor’s right has expired or not or there is any other additional condition.

9.2 When the creditor’s right guaranteed under this Contract is determined, all funds other than principals specified in Article 6 of this Contract shall be included in the scope of the creditor’s right guaranteed no matter whether the funds have been occurred or not;

9.3 From the date when the creditor’s right guaranteed under this Contract is determined to the date of full repayment of the creditor’s right guaranteed, if the Debtor of the Main Contract fails to perform the obligation of repayment of debts, Party B shall have the right to directly claim Party A for compensation and Party A shall repay Party B relevant debts immediately.

Chapter 6 Guarantee Period

Article 10 The guarantee period of the guarantee liability undertaken by Party A shall be two years and the date of start shall be determined according to the following method:

10.1 If the expiry date of the performance period of a debt under the Main Contract is early than or equals to the date of determination of the creditor’s right guaranteed, the guarantee period of the guarantee liability undertaken by Party A for the debt shall start from the date of determination of the creditor’s right guaranteed;

10.2 If the expiry date of the performance period of a debt under the Main Contract is later than the date of determination of the creditor’s right guaranteed, the guarantee period of the guarantee liability undertaken by Party A for the debt shall start from the expiry date of the performance period of this debt;

10.3 The term “expiry date of the performance period of a debt” indicated in the preceding paragraph includes the expiry date of the debt when the Debtor of the Main Contract repays the debt by installments and also includes the expiry date of acceleration announced by the Creditor according to the stipulations of the Main Contract;

10.4 If the business under the Main Contract is a business of letter of credit, bank acceptance bill, letter of guarantee or letter of guarantee for the release of goods, the date of external payment shall be deemed as the expiry date of the performance period of the debt.

Chapter 7 Both Parties’ Rights and Obligations

Article 11 Rights and obligations of Party A

11.1 Party A is a legal person duly established and validly existing, has the capacity for civil rights and the capacity for civil conducts for signing and executing this Contract, and has obtained all necessary licenses, approvals, registration and files required for signature of this Contract;

11.2 All the internal authorization formalities required for Party A for signing this Contract have been completely handled and become fully effective. Party A’s signature of this Contract and performance of its obligations under this Contract shall not conflict with the current articles of association and the internal rules and regulations, or any other contract, agreement and document binding upon Party A.

11.3 Party A shall ensure the authenticity, legitimacy and effectiveness of the documents that Party A provides Party B for demonstrating Party A’s legal identity and its ability for performing the guarantee liability under this Contract;

11.4 When the creditor’s right guaranteed under this Contract is determined, if the Debtor of the Main Contract fails to perform the debt prior to the expiry date of the performance period of the debt, Party A shall have the obligation to make payment to Party b immediately on the date of receiving of Party B’s written notice;

11.5 When giving guarantee under this Guarantee Contract, Party A is not involved in any litigation or arbitration which may be sufficient to affect its ability for undertaking the guarantee liability under this Contract;

11.6 Party A shall not bear the guarantee liability under the Guarantee Contract when the Debtor of the Main Contract has repaid all the debts under the Main Contract on schedule;

11.7 During the guarantee period, Party B may transfer to a third party the creditor’s right under the Main Contract without obtaining Party A’s consent, and Party A shall continue to undertake guarantee liability;

11.8 If the Debtor of the Main Contract and Party B changes the Main Contract through signing an agreement, Party A’s consent may not be obtained if such change does not increase the Debtor’s debts. However, if such change extends the term or increases the amount of principle of the principal creditor’s right guaranteed by Party A or allows transfer of debts by the Debtor of the Main Contract, Party A’s consent shall be obtained. Party A commits to undertake guarantee liability according to the Main Contract after change;

11.9 During the valid period of this Contract, Party B shall be notified thirty days in advance where there is any change of Party A’s operation mechanism, registered capital, equity, or Party A sells, transfers or disposes by any other means its material assets. Party B shall be notified within seven days if Party A's address, name or legal representative is changed;

11.10 If Party A provides guarantee for any other third party during the valid period of this Contract, Party B’s rights and interests shall not be damaged.

11.11 Loans under the Main Contract may be used for borrowing for repaying. Party A is willing to undertake guarantee liability.

11.12 If the Debtor of the Main Contract changes the purpose of the funds at random, Party A shall undertake guarantee liability for the debts under the Main Contract and the default interest and penalty arising from misappropriation of funds.

Article 12 Rights and obligations of Party B

12.1 Party B is entitled to demand Party A at any time to provide the financial reports, financial statements or other data reflecting Party A’s operation conditions and credit status;

12.2 If Party B demands Party a to undertake guarantee liability according to the stipulations of this Contract, Party A authorizes Party B to deduct relevant funds directly from the account opened with the bank institutions of China Minsheng Banking designated by Party A. With respect to the part insufficient for deduction, Party B is entitled to make deduction from any other account opened by Party A with the bank institutions of China Minsheng Banking or demand Party A to make repayment. Party B shall not bear any responsibility for losses on interest and any other losses caused to Party A arising from Party B’s behavior of deduction;

12.3 Party A may not be notified when Party B and the Debtor of the Main Contract sign a specific business contract (or agreement) on a specific credit granting business under the Main Contract.

Chapter 8 Liabilities for Breach of Contract

Article 13 When this Contract becomes effective, Party A and Party B shall perform the obligations specified in this Contract. Any party which fails to wholly or partly perform its obligations specified herein shall undertake relevant liabilities for breach of contract and make compensation for losses caused to the other party.

Chapter 9 Contract Effectiveness, Change and Termination

Article 14 This Contract shall become effective when both Parties’ legal representatives/main principals or authorized agents sign or seal and both Parties affix their official seals/special contract seals.

Article 15 When the Contract comes into force, Party A and Party B shall not change or cancel the Contract in advance at random. Should the Contract be changed or cancelled, a written agreement shall be reached and concluded upon unanimity through consultation.

Chapter 10 Dispute Settlement

Article 16 Any and all disputes between Party A and Party B arising from and in connection with the execution of this Contract shall be settled through consultation between both Parties. Where consultation fails, the dispute shall be governed by the people’s court at the location where Party B is located.

Chapter 11 Supplementary Provisions

Article 17 Notice and service

17.1 Any and all notices or written communications that one party sends to the other party under this Contract, including (but not limited to) any and all written documents or notices which must be sent under this Contract, shall be sent by registered post, fax, special delivery or other means to the address of the other party given on the first page of this Contract;

17.2 If sent by registered post, the forth day after the said document or notice is posted shall be deemed as the date of service and receiving; if sent by fax, the date indicated in the receipt of being sent successfully shall be deemed as the date of service and receiving; if sent by special delivery, the date when the special person sends the said document or notice to the address of the addressee shall be deemed as the date of service and receiving. In case of change of any contact information, the related party shall notify the other party in writing of the contact information changed within seven days after such change. Then, the notices, documents or applications specified herein shall be sent according to the contact information after the change.

Article 18 The validity of this Contract shall be independent of this Contract and may not be affected by the invalidity of the Main Contract.

Article 19 Other provisions agreed by both Parties

Article 20 This Contract has been made out in three originals, for Party A, Party B and the related party each holding one, which shall be equally authentic.

Article 21 When this Contract is signed, Party B has explained and interpreted in details all the terms and conditions of this Contract to Party A, and both Parties have no objection to the terms and conditions of this Contract. Both Parties have accurate understanding of the legal meaning of their corresponding rights and obligations, limitation of responsibilities or disclaimers.

Article 22 Both Parties agree and authorize Party B irrevocably to report relevant information to the financial credit information database established by the State. Such information shall include the name, registered address and other related information of this institution, the transaction records, credit information and bad information (including failure to perform obligations of this Contract, the institution’s performance of obligations and enforcement ruled or judged by the people’s court, and other relevant bad information prescribed by laws and regulations) generated during business activities and performance activities of this institution under this Contract.

This Contract is signed by Party A and Party B in Shenzhen.

Party A: Shupeng Technology (Shenzhen) Co.,wd Ltd. (Seal) (Seal)

Legal Representative / Main Principal: Pan Dangyu (Seal)

Date:

Party B: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal) (Seal)

Legal Representative / Main Principal: Ou Yangyong (Signature)

(Or Authorized Agent) (Signature or Seal)

Date:

EX-10.5(B)

Exhibit 10.5(b)

Text Encoding: CMBC-HT-494 (XW2012)

Maximum Guarantee Contract

No.: 2015 SHJZBZEZ No. 008-3

CHINA MINSHENG BANKING CORP., LTD.

Prompt of Party D: the text of this Contract is announced in Party D’s website (www.cmbc.com.cn). All the Parties hereto must carefully read all the terms and conditions of this Contract before signature of this Contract. In case of any unclear information, please consult us immediately and we will answer you actively. When the text of this Contract is signed by all the Parties, all the Parties hereto shall be deemed to have agreed all the terms and conditions of this Contract and have full understanding of the legal meanings of relevant rights, obligations, limitation of liability and disclaimer.

Maximum Guarantee Contract

Guarantor:       Pan Dangyu             (hereinafter referred to as Party A)

Legal Representative / Principal: ID card No.: 430104196803184316

Address:

P.C.:

Tel.:

Pledgor:                                        (hereinafter referred to as Party B)

Legal Representative / Principal:

Address:

P.C.:

Tel.:

Mortgagor:                                                        (hereinafter referred to as Party C)

Legal Representative / Principal:

Address:

P.C.:

Tel.:

Secured Party: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (hereinafter referred to as Party D)

Principal: Ou Yangyong

Address: Minsheng Bank Building, Xinzhou No. 11 Street, Futian District, Shenzhen City

P. C.: 518048

Tel.:

(If the Guarantor is a natural person, please fill the effective identity certificate name and number after “Legal Representative / Principal”).

In order to ensure the execution of the Main Contract between SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (hereinafter referred to as the Debtor under the Main Contract) and Party D, Party A is willing to provided maximum joint guarantee liability for the debts under the Main Contract; Party B is willing to provide maximum pledge guarantee for the debts under the Main Contract to the extent of its properties; and Party C is willing to provide maximum mortgage guarantee for the debts under the Main Contract to the extent of its properties. In accordance with relevant national laws and regulations, the Parties hereto make and enter into this Contract upon consensus through consultation. All the Parties shall commonly abide by this Contract.

Party A, Party B and Party C are hereinafter referred to collectively as the Guarantor.

Part 1

Chapter 1 Guaranteed principal creditor's right

Article 1 Guaranteed principal creditor's right

The principal creditor's right hereunder is as following 1.1 :

1.1 Party D’s all creditor’s rights (including contingent liabilities) under the Comprehensible Credit Granting Contract of 2015 SHJZBZEZ No. 008 made and entered into by and between the Debtor under the Main Contract and Party D (the contract and the specific business contract produced under the contract commonly constitute the Main Contract of this Contract, hereinafter referred to as the Main Contract). The period of the principal creditor’s rights secured with maximum guarantee is from July 16, 2015 to July 16, 2016.

1.2 Party D’s all creditor’s rights (including contingent liabilities) under all the contracts made and entered into by and between Party D and the Debtor under the Main Contract during the period from                        to                       (period of the principal creditor’s rights) (all these contracts and the specific business contracts under these contracts commonly constitute the Main Contract of this Contract, hereinafter referred to as the Main Contract).

1.3 Party D’s all unpaid creditor’s rights under                     of No.                     (the contract and the specific business contract produced under the contract commonly constitute the Main Contract of this Contract, hereinafter referred to as the Main Contract). The period of the principal creditor’s rights secured with maximum guarantee is from            to                     .

1.4 Others:                                                                

Article 2 Maximum amount of creditor’s rights

2.1 The maximum amount of creditor’s rights guaranteed by the Guarantor is (in words) twenty million Yuan only (in figures) ¥20,000,000.00) and the currency is RMB. The exchange rate of foreign currencies other than RMB shall be converted according to the rate of foreign exchange issued by Party B when the specific business actually occurs.

2.2 The maximum amount of creditor’s rights is the maximum limit of the balance of unpaid creditor’s rights. Provided that the balance of unpaid creditor’s rights is not higher than the said maximum limit, the Guarantor agrees to undertake guarantee liability for all the accounts payable caused within the guarantee scope specified herein.

Chapter 2 Guarantee

Article 3 Party A is willing to provide guarantee for the debts under the Main Contract according to the following        mode:

3.1 Joint liability guarantee.

3.2 Periodic joint liability guarantee, Party A shall bear periodic joint liability guarantee for the principal creditor’s rights of the Debtor under the Main Contract caused during the following            period:

3.2.1 From the date of signature of this Contract to the date when the effective housing ownership certificate and housing other rights certificate of the mortgaged real estate under the Main Contract;

3.2.2 From the date of signature of this Contract to                             ;

3.2.3 Others:                                                       .

Chapter 3 Pledge

Article 4 Party B shall provide maximum pledge guarantee for Party D for all the debts under the Main Contract to the extent of the pledged property specified in the following annex                   . Refer to annex 1 for the pledged property in details.

4.1 List of pledged rights;

4.2 List of pledged movable properties;

4.3 List of pledged fixed deposit account or security deposit account in the card/passbook (hereinafter referred to collectively as the special account);

4.4 List of pledged accounts receivable;

4.5 Others:                                                     .

According to Party D’s requirements, Party B □ shall □ may not (express with “√”in □ for option and “×”in □ for deletion) handle insurance for the pledged property under this Contract. If Party B may not handle insurance for the pledged property under this Contract, the insurance clauses of this Contract shall be inapplicable.

Article 5 Party B shall submit to Party D the pledged property under this Contract (document of title where it is pledged with rights) on the date of signature of this Contract, or Party B shall go through the formalities for pledge registration with the relevant pledge registration organ within fifteen days as of the date of effectiveness of this Contract. If the formalities for pledge registration for the pledged property hereunder are not handled due to causes attributable to Party B, Party D may charge Party B penalty according to the following standard: % of the amount of secured principal creditor’s rights. Should the document of title be endorsed for pledge or transfer according to the provisions of relevant laws, Party B shall endorse the document of title and indicate the pattern “Pledge” prior to delivery of the document of title.

Article 6 Where the pledged property is accounts receivable, Party B shall open with Party D a special account for repayment of loan pledged with accounts receivable, account No.                     , specifically for collecting the accounts receivable that the debtor of the accounts receivable pays Party B. Party B agrees to provide pledge guarantee for Party D with the funds in the special account. Without Party D’s consent, Party B shall have no right to use any money in the special account.

Article 7 Both Party B and Party D confirm that the value of the pledged property hereunder is RMB (in words)                                             (in figures ¥                 ) when this Contract is signed. The (appraisal / agreement) value is provided for reference only and the final value of the pledged property shall accord with the funds (or net incomes) from actual disposal of the pledged property when the right to pledge is realized.

Article 8 In the event that the document of title pledged hereunder expires earlier than the maturity date of the debts under the Main Contract (or Party D announces early maturity according to the stipulations of the Main Contract), Party D may cash or take delivery of goods after the maturity of the pledged document of title, and dispose the cashed money or the incomes obtained from sales of the goods according to any one of the following methods:

8.1 To prepay all the debts guaranteed by Party B under the Main Contract;

8.2 To draw and deposit to a third party;

8.3 To deposit in the fixed deposit account or security deposit account (special account, same below) in the card that Party B opened with Party D, account No. (card No.): , continuously used as pledge guarantee for the creditor’s rights under the Main Contract.

Article 9 The co-owner of the pledged property under this Contract agrees to pledge the pledged property hereunder and agrees to accept the terms and conditions of this Contract.

Pledged property co-owner (1)               , Identity certificate Name and No.:                   

Pledged property co-owner (2)               , Identity certificate Name and No.:                   

Chapter 4 Mortgage

Article 10 Party C is willing to provide maximum mortgage guarantee for all the debts under the Main Contract with the property listed in the following           . Refer to annex 2 for the mortgaged property in details:

1. List of Mortgaged Property (Movable Property);

2. List of Mortgaged Property (Real Estate);

3. List of Mortgaged Property (Transport Means);

4. List of Mortgaged Property (           )

10.1 According to Party D’s requirements, Party C¨shall ¨may not (express with “√”in ¨ for option and “×”in ¨ for deletion) handle insurance for the mortgaged property under this Contract. If Party C may not handle insurance for the mortgaged property under this Contract, the insurance clauses of this Contract shall be inapplicable.

10.2 Where the mortgaged property is a real estate, when the real estate is removed:

10.2.1 If the mortgaged property is removed and compensated through exchange of property right, Party D shall have the right to ask the Debtor under the Main Contract to immediately repay the debts under the Main Contract, or ask Party C to take the exchanged real estate as the mortgaged property hereunder and conclude and sign a new mortgage contract and handle mortgage registration. When the formalities for new mortgage registration are not completed, the Debtor under the Main Contract shall provide other guarantees according to Party D’s requirements.

10.2.2 If the mortgaged property is removed and compensated with compensation money, Party D shall have the right to ask Party C to deposit the compensation money to Party D and sign a pledge contract, and the receipt of the compensation money shall be taken as the guarantee under the Main Contract; or ask Party C to open a special security deposit account with Party D and sign a pledge contract, and the compensation money shall be deposited in the special account as the guarantee under the Main Contract.

Article 11 Both Party C and Party D confirm that the value of the mortgaged property hereunder is RMB (in words)                                          (in figures ¥             ). The (appraisal / agreement) value is provided for reference only and the final value of the mortgaged property shall accord with the funds (or net incomes) from actual disposal of the mortgaged property when the right to mortgage is realized.

Article 12 The co-owner of the mortgaged property under this Contract agrees to mortgage the mortgaged property hereunder and agrees to accept the terms and conditions of this Contract.

Mortgaged property co-owner (1)                , Identity certificate Name and No.:                           

Mortgaged property co-owner (2)               , Identity certificate Name and No.:                        

Article 13 Party C and Party D shall, within fifteen days as of the date of effectiveness of this Contract, go through the formalities for mortgage registration with the relevant mortgage registration organ. If the formalities for mortgage registration for the mortgaged property hereunder are not handled due to causes attributable to Party C, Party D may charge Party C penalty according to the following standard: % of the amount of secured principal creditor’s rights.

Chapter 5 Liability for breach

Article 14 Party A, Party B and Party C shall perform their obligations specified in this Contract. Party A, Party B or Party C’s failure to wholly or partly perform its obligations specified herein shall constitute a default. In case of any default, Party D shall have the right to choose any one or several of the following measures to ask the default party to bear liability for breach:

14.1 The default party shall pay a penalty equivalent to % of the amount of creditor’s rights under the Main Contract. Where the penalty is not enough to make up Party D’s losses, the default party shall make compensation for the actual losses.

14.2 Party D has the right to ask the default party to undertake guarantee liability.

Chapter 6 Miscellaneous

Article 15 Others agreed by the Parties hereto:

15.1 The Guarantor acknowledges and agrees that the creditor’s rights it secures under the Main Contract may be generated between Party D and the Debtor under the Main Contract, and between Party D and the credit-drawing third person designated by the Debtor under the Main Contract (including but not limited to the operating entity of or other third party designated by the Debtor under the Main Contract), to which the Guarantor shall have no objection. The Guarantor agrees to provide guarantee for all the unpaid creditor’s rights of Party D for the credit-drawing person under the Main Contract according to the stipulations of this Contract.

15.2

Article 16 This Contract has been made out in three originals for Party D holding one and for the other parties each holding one, which shall be equally authentic.

Part 2

Chapter 1 Representations and warranties

Article 17 For the purpose of signing and performing this Contract, the Guarantor hereby gives to the other parties hereto the following representations and warranties:

17.1 The Guarantor acknowledges and agrees all the terms and conditions of the Main Contract, and is willing to provide guarantee for the Debtor under the Main Contract;

17.2 The Guarantor has sufficient capacity for civil rights and capacity for civil conducts. The Guarantor has obtained enough authorization for concluding and performing this Contract;

17.3 The Guarantor ensures good credit status and no major bad credit record;

17.4 The Guarantor ensures not to refuse the performance of guarantee obligation for an excuse of any dispute with a third party;

17.5 The Guarantor is willing to accept Party D’s investigation and understanding of the credit status and performance capability of the Guarantor. The Guarantor ensures to provide relevant information and data faithfully, including personal career, marital state, conditions of assets, incomes, expenditures, liabilities and external security;

17.6 The Guarantor ensures that the explanation and certification concerning its credit conditions, financial and accounting statements or other related data and materials provided by Party D are genuine and legitimate and have no false representation and concealed information. During the valid period of this Contract, the Guarantor shall provide financial statements and materials (including but not limited to balance sheet, income statement and cash flow statement) faithfully according to Party D’s requirements and positively coordinate Party D to investigate, understand and supervise the Guarantor’s production, operating and finance conditions;

17.7 During the period of conclusion of this Contract and the valid period of this Contract, the Guarantor shall not provide any third party with guarantee in any form without Party D’s consent;

17.8 The Guarantor ensures that, when this Contract is signed, the Guarantor has never have nor has any litigation, arbitration, administrative proceeding, or any executive proceeding of juridical or administrative authorities which are presented and may have major adverse effect on the Guarantor’s performance of guarantee liability, or other potential major dispute; meanwhile, the Guarantor has no major debt or contingent liability which has not disclosed to Party D;

17.9 If the legal registered name or effective identity certificate number of the Guarantor is changed, the Guarantor shall, within five days as of the date of obtaining of the official document and/or certificate changed, notify Party D in written form and submit the originals and copies of the document/certificate changed to Party D for examination;

17.10 Party B and Party C ensure that they are the lawful owner or disposer of the mortgaged / pledged property under this Contract. If the mortgaged / pledged property hereunder is commonly owned, they have obtained the co-owner’s consent;

17.11 Party B and Party C ensure that the establishment of mortgage / pledge under this Contract will not be restricted nor cause illegal situation;

17.12 Party B and Party C ensure that all the certificates of property right or use right of the mortgaged / pledged property and other effective proof documents that they provide or submit to Party D are genuine, legitimate and valid;

17.13 Party B and Party C ensure that the mortgaged / pledged property under this Contract has not been leased before the establishment of guarantee, or has been leased but Party D was notified in written form. If the mortgaged property hereunder is leased after the establishment of guarantee, Party C shall ensure to obtain Party D’s consent in advance and notify the lessee of the establishment of guarantee;

17.14 Party B and Party C ensure not to conduct any activity in violation of national laws and regulations by taking advantage of the guaranteed property under this Contract.

17.15 Party B and Party C ensure that they have not disposed or established other guarantee for the guaranteed property hereunder prior to the signature of this Contract, or they have established any other guarantee and have notified Party D in written form; there is not other third party’s right to the guaranteed property; without Party D’s written consent, they shall not present, transfer, re-mortgage or dispose the mortgaged property in any other from prior to the cancellation of guarantee pursuant to this Contract.

17.16 Where the mortgaged property under this Contract is a real estate, Party B shall ensure to notify Party D of the renewal information immediately after it obtains the information about removal of the mortgaged real estate;

17.17 Without Party D’s written consent, Party B shall not ask for unfreezing, reporting for loss, withdrawing in advance or disposing the pledged property in any other form by any excuse;

17.18 Where the pledged property under this Contract is a deposit certificate of Party B in other bank, Party B shall ensure to coordinate Party D to complete the formalities for mortgagee of the deposit certificate and other formalities required by Party D prior to delivery of the relevant document of title, and the fixed deposit must be taken with a seal impression or password. Party B shall ensure to provide Party D with the seal impression reserved in the deposit bank. Where the pledged property under this Contract is the right of a deposit certificate or accounts receivable, Party B shall coordinate Party D to complete the formalities for obtaining the deposit bank’s confirmation letter and the accounts receivable debtor’s confirmation letter prior to delivery of the relevant document of title;

17.19 In case of omission or error of the contents registered for guarantee or any change of the registered contents, Party B and Party C agree Party D or others entrusted by Party D to continuously handle the formalities for registration of change according to the actual situations and the conditions after change.

Article 18 For the purpose of signing and performing this Contract, Party D hereby gives the following representations and warranties:

18.1 Party D has obtained sufficient authorization for signing and concluding this Contract;

18.2 Party D promises to keep confidential the other parties’ information and business secrets acquired during the performance of this Contract, unless otherwise prescribed by laws and regulations.

Chapter 2 Guarantee

Article 19 The guarantee scope of any one guarantor shall be the principal of the guaranteed principal creditor’s rights specified in this Contract and other accounts payable. Other accounts payable include interest, default interest, compound interest, penalty, damages, expenses for realization of creditor’s rights and guarantee right (including but not limited to legal cost, attorney fee, business traveling expenses, expenses for settlement of the real estate mortgagor and maintenance cost) and all other reasonable expenses payable. Other accounts payable covered in the said scope shall be listed in the scope of guarantee liability that one guarantor shall undertake but shall not be listed in the maximum limit of balance of the principal secured under this Contract.

Article 20 In the event that the Debtor under the Main Contract changes the loan purpose privately, one guarantor shall bear guarantee liability for the main debts under the Main Contract and the default interest and penalty arising from misappropriation of loan, except that Party D and the Debtor under the Main Contract have malicious collaboration.

Article 21 As agreed by all the Parties hereto, Party D is entitled to announce determination of the principal creditor’s rights under the maximum guarantee in any event of default, except under the circumstances prescribed by laws.

Article 22 Party D is entitled to exercise the guarantee right if (1) the performance period of the debts specified in the Main Contract expires (including early maturity of debts announced by Party D in accordance with the Main Contract) and the Debtor under the Main Contract fails to repay the debts according to the stipulations of the Main Contract; or (2) there is any breach of contract specified in the Main Contract; or (3) there is any circumstance under which the Guarantor shall bear liability for breach according to the stipulations of this Contract.

Article 23 Party D is entitled to exercise the guarantee right for the guaranteed property by the following method:

23.1 Through consultation with the Guarantor, discount the guaranteed property to offset debts or be compensated firstly from the incomes obtaining from selling at auction or selling off the guaranteed property;

23.2 Apply to the people’s court for selling at auction or selling off the guaranteed property, and be compensated firstly from the incomes therefrom;

23.3 Where the pledged property is accounts receivable, besides sub-clause 23.1 and sub-clause 23.2, Party D is entitled to take the following methods for exercising the right to pledge the pledged property:

23.3.1 Party B is compensated firstly from the funds paid by the debtor of the accounts receivable;

23.3.2 Through concluding an agreement with Party B, Party B transfers the accounts receivable under this Contract to Party D for disposal;

23.4 Where the pledged property is the deposit in the special account, Party D is entitled to deduct relevant money directly from the special account for repaying debts;

23.5 Where the pledged property hereunder is any right, besides sub-clause 23.1 and sub-clause 23.2, Party D is entitled to dispose the pledged property unilaterally by the following methods:

23.5.1 Transfer the pledged right or allow others to use the pledged right and be compensated firstly from the transfer fee and licensing fee obtained therefrom;

23.5.2 Cash the document of title or sell of the goods taken, and be compensated firstly from the funds obtained therefrom.

Article 24 At the request of Party D, one guarantor requested must assist Party D in obtaining all necessary approvals or agreements related to realization of the creditor’s rights of Party D, or assist Party D in handling all the necessary procedures.

Article 25 The funds obtained by Party D from exercising the guarantee right under this Contract shall be used for repaying the debts of Party D according to the following order: (1) expenses for realization of creditor’s rights and guarantee right; (2) penalty; (3) damages; (4) compound interest; (5) default interest; (6) interest; (7) principal. Party D is entitled to change this order.

Article 26 Insurance for the guaranteed property

26.1 Should Party B and Party C handle insurance for the guaranteed property according to Party D’s requirements, Party B and Party C shall handle insurance procedures for the guaranteed property taking Party D as the sole beneficiary or insurant in the insurance company which is accepted through consultation. When this Contract is signed, the Guarantor shall submit the original of the insurance policy for the guaranteed property to Party D for keeping.

26.2 The insurance contract shall be accepted by Party D. There shall be no clause damaging or restricting Party D’s rights and interests in the insurance contract. The insurance shall be kept effective all the time before the termination of this Contract and shall not be interrupted or cancelled by any excuse. If insurance is interrupted, Party D shall have the right to handle insurance procedures on behalf and all the expenses arising therefrom shall be borne by the related guarantor. The related guarantor shall not conduct any behavior which may result in the insurance company’s refusal of claim settlement.

26.3 The related guarantor shall not conduct any behavior which may result in the insurance company’s refusal of claim settlement, or the related guarantor shall bear the legal consequences arising therefrom;

26.4 In case of any insurance accident prior to repayment of all the debts by the Debtor under the Contract, the insurance compensation shall be taken as the guaranteed property under this Contract and be deposited in the account designated by Party D.

Article 27 If the Debtor under the Contract and Party D have an agreement to amend the Main Contract, increase of the principal of the principal creditor’s rights, extension of the period of the Main Contract and transfer of debts by the Debtor under the Contract shall be consented by the Guarantor, and the other changes may not be consented by the Guarantor. All the guarantors promise to undertake guarantee liability according to the contract amended.

Article 28 The guarantee liability undertaken by the Guarantor may not be affected by, nor be exempted or reduced due to, other guarantees under the Main Contract and this Contract. Party D is entitled to claim one guarantor for guarantee right. All the guarantors under this Contract waive the priority of defense right for any other guarantee (including but not limited to right of plea for preference claims and defense on the self things of the debtor).

Article 29 As agreed by the Guarantor, Party D has the right to transfer any or all of its principal creditor’s rights under this Contract to a third party. Party D may not obtain the Guarantor’s consent nor notify the Guarantor when Party D transfers its principal creditor’s rights.

Article 30 Where the pledged property is accounts receivable, in addition to other terms and conditions of this Contract, Party B shall also observe the following terms and conditions:

30.1 When this Contract is signed, Party B shall submit to Party D the original of the basic contract which has been concluded under this Contract and the original of relevant document of title for other accounts receivable (if any). Party B shall ensure to submit to Party D all the basic contracts signed after the conclusion of this Contract within five working days after the signature of such a contract;

30.2 If Party B applies to Party D for withdrawing and using the funds in the special account for repayment of pledge loan of the accounts receivable after the debtor of the accounts receivable pays the funds to the special account for repayment of pledge loan of the accounts receivable specified in this Contract, Party B shall submit the proof materials accredited by Party D and supplement relevant accounts receivable to the special account for repayment of pledge loan of the accounts receivable, or Party D shall have the right to refuse Party B’s application;

30.3 In the event that the period for the debtor of the accounts receivable to perform the obligation of payment expires earlier than the expiry date of the performance period of the debts under the Main Contract, Party D may use the money paid by the debtor of the accounts receivable to prepay the principal creditor’s rights secured hereunder or deposit the money to the special account for repayment of pledge loan of the accounts receivable opened by Party B with Party D, when the money may be continuously taken as the pledge guarantee for the principal creditor’s rights secured hereunder or be withdrawn or deposited to a third party.

Article 31 In addition to other terms and conditions of this Contract, Party A shall also observe the following terms and conditions:

31.1 The guarantee period under this Contract shall be from the date of effectiveness of this Contract to two years after the expiry date of the period for performance of debts by the Debtor under the Main Contract specified in the Main Contract. If the business under the Main Contract is bank acceptance or bank guarantee, the date of external payment shall be deemed as the expiry date of the performance period of the debt. If the business is discount of draft, payment refusal date of the draft shall be deemed as the expiry date of the performance period of the debt.

31.2 If Party D requests Party A to undertake guarantee liability according to the stipulations of this Contract, Party D is entitled to choose by itself to exercise the right of set-off directly from the Guarantor’s any other account (including but not limited to current deposit or fixed deposit) opened with any breach of China Minsheng Banking Corp. Ltd. or ask the Debtor under the Main Contract to make repayment continuously. In case of interest loss and any other loss caused due to such deduction behavior, Party D shall bear no liability and shall not be deemed as a waiver of the right for asking the debtor to make repayment continuously and bearing expansion of loss for an excuse of no deduction.

31.3 After Party D claims to exercise the guarantee right and requests Party A to undertake guarantee liability, if Party A agrees to establish new maximum joint guarantee liability pursuant to this Contract to guarantee all the principal creditor’s rights of Party D under the Main Contract, it is unnecessary to make and enter into a new contract for the newly established maximum guarantee.

Article 32 If the Guarantor adds new guaranteed property after the establishment of Party D’s guarantee right under this Contract, all the Parties agree to establish new maximum guarantee for the new guaranteed property pursuant to this Contract to guarantee all the principal creditor’s rights of Party D under the Main Contract, and it is unnecessary to make and enter into a new contract for the newly established maximum guarantee.

If there is any remaining of the guaranteed property after Party D exercises the guarantee right, all the Parties agree to establish new maximum guarantee for the remaining guaranteed property pursuant to this Contract to guarantee all the principal creditor’s rights of Party D under the Main Contract, and it is unnecessary to make and enter into a new contract for the newly established maximum guarantee.

Chapter 3 Rights and obligations

Article 33 Rights and obligations of the Guarantor

33.1 The Guarantor acknowledges and agrees all the terms and conditions of the Main Contract, and is willing to sign this Contract ad provide guarantee for the debts under the Main Contract;

33.2 All the expenses for relevant guarantees under this Contract, including but not limited to the expenses for attorney service, tax, property insurance, notarization, appraisal, evaluation, registration and transfer of household, shall be determined by the Parties hereto through consultation in accordance with relevant laws and regulations;

33.3 If Party D agrees to transfer the guaranteed property under this Contract, the Guarantor shall use the funds obtained from transfer of the guaranteed property to repay Party D all the debts guaranteed under the Main Contract or deposit the funds obtained therefrom to the account opened by Party D as the special pledge, or upon consent by Party D, withdraw and deposit the funds to a third party;

33.4 During the valid period of this Contract, Party D shall be notified in writing immediately when there is any event (including but not limited to major change of financial and assets conditions, or involved in litigation, arbitration or administrative punishment, or any other events which may affect one guarantor’s guarantee capability) which endangers one guarantor’s normal business or has adverse effect on one guarantor’s performance of the guarantee obligation under this Contract;

33.5 Party D shall be notified one month in advance if one guarantor has the following changes, including merger, division, combination, shareholding reform, contracting, lease, joint operation, applying for suspension of business for rectification, applying for dissolution, applying for reconciliation /reorganization /bankruptcy, or transferring or disposing any significant assets in other forms, and other behaviors which are enough to affect Party D’s rights and interests;

33.6 If the Guarantor’s name, legal representative, address or permanent dwelling address, mailing address, work unit or contact information is changed, Party D shall be notified within five days after the change;

33.7 During the period of the loan, the Guarantor agrees and authorizes Party D to provide the individual/enterprise credit information and relevant guarantee conditions provided by the Guarantor for the individual enterprise credit information database of the People’s Bank of China and the credit database established upon approval by the competent credit investigation authorities;

33.8 The mortgaged property under this Contract shall be occupied, managed and used by Party C. Party C shall keep properly and use reasonably the mortgaged property to ensure the mortgaged property under sound conditions without any damage. Party D is entitled to check the conditions of management and use of the mortgaged property;

33.9 If the mortgaged property is or may be infringed by any a third party, Party C shall have the obligation to take measures to avoid infringement. In case of damage to or loss of the mortgaged property, Party C shall notify Party D timely and take measures immediately to prevent expansion of losses. Meanwhile, Party C shall timely submit to Party D the certificates of damage and loss causes issued by the relevant competent authorities;

33.10 In the event that the Debtor under the Main Contract fails to repay debts on time (including Party D announces early maturity of the debts in accordance with the stipulations of the Main Contract) as agreed in the Main Contract, Party A shall perform the obligation of repayment on behalf immediately after Party D requests Party A to undertake guarantee liability;

33.11 If the pledged property is damaged or the value of the pledged property is decreased, which is enough to endanger Party D’s rights, Party D shall have the right to request Party B to provide relevant guarantee. In the event that Party B fails to provide relevant guarantee, Party D may unilaterally sell at auction or sell of the pledged property and use the funds obtained therefrom to prepay all the debts guaranteed by Party B under the Main Contract or withdraw and deposit to a third party;

33.12 Where the guaranteed property under this Contract is the deposit in the special account, Party B shall open a special account with Party D on the date of signature of this Contract and deposit the agreed amount of money in the special account. During the pledge period, deposit interest shall be calculated according to corresponding deposit interest rate of the bank. The fruits produced during the pledge period shall be listed in the pledged property under this Contract.

Article 34 Rights and obligations of Party D

34.1 Party D shall keep confidential the materials provided by the other Parties hereto, unless otherwise prescribed by laws and regulations;

34.2 During the valid period of this Contract, Party D is entitled to ask the Guarantor to coordinate Party D in investigating, understanding and supervising the Guarantor’s production, operating and financial conditions; Party D is entitled to ask the Guarantor to provide financial statements and other relevant materials faithfully;

34.3 Party D is entitled to claim the other Parties hereto for liability for breach or ask the other Parties hereto to make compensation to Party D for the actual losses caused to Party D according to the stipulations of this Contract;

34.5 If Party C’s behavior is enough to reduce the value of the mortgaged property, Party D shall have the right to ask Party C to stop such behavior immediately. When the value of the mortgaged property is reduced, Party D shall have the right to ask Party C to restore the value of the mortgaged property or ask Party C to provide a guarantee equivalent to the value reduced. Where Party C does not recover the value of the mortgaged property nor provide a guarantee, Party D shall have the right to ask the Debtor under the Main Contract to prepay debts or provide a new guarantee in full amount;

34.6 When all the debts within the scope of mortgage guarantee specified in this Contract are fully repaid on schedule, Party D shall assist Party C in handling the formalities for cancellation of mortgage registration. The certificate of property right or use right of the mortgaged property, and relevant effective proof documents, if kept by Party D, shall be returned to Party C;

34.7 Where the guaranteed property under this Contract is the deposit in a special account, Party D shall have the right to freeze the deposit in the said special account. The deposit cannot be unfroze until the debts under the Main Contract are fully repaid, except that Party D deducts money from the account for repaying the debts under the Main Contract as specified in this Contract.

Chapter 4 Effectiveness, amendment and cancellation of the Contract

Article 35 This Contract shall come into force (1) upon the signature or seal by all the Parties to Party A other than Party D; and (2) as of the date when Party D makes signature and affixes its official seal /special seal for contract uses only. However, if one guarantor fails to sign this Contract, this Contract shall not be binding upon the guarantor which has not sign but shall be binding upon the other Parties which have signed.

Article 36 Allowed by law, the validity of this Contract shall be independent of the Main Contract and shall not be affected by the invalidity of the Main Contract.

Chapter 5 Dispute settlement

Article 37 Any and all disputes in connection with this Contract shall be settled by the Parties hereto through consultation. Where consultation fails, the dispute shall be governed by the local people’s court at the location where Party D's dwelling address is located.

Article 38 In the event that Party D adopts litigation proceeding for realizing creditor’s rights due to one party’s breach of contract, the default party shall bear the expenses paid by Party D for realizing creditor’s rights and guarantee right (including but not limited to attorney fee and traveling expenses).

Chapter 6 Supplementary provisions

Article 39 Notice and service

39.1 According to the stipulations of this Contract, any and all notices or written communications that one party sends to the other party shall be given by registered post, fax, special delivery or other communication means to the party's address given in the first page of this Contract;

39.2 If sent by registered post, the 4^th day after the said document or notice is posted shall be deemed as the date of service and receiving; if sent by fax, the date indicated in the receipt of successful delivery shall be deemed as the date of service and receiving; if sent by special delivery, the date when the special delivery person delivers the said document or notice to the receiver shall be deemed as the date of service and receiving. In case of any change of the contact information, the party of the change shall notify the other party in writing of the contact information changed within five days after the occurrence of change. Afterwards, the notices, documents or applications specified in this article shall be sent to the contact information changed.

Article 40 This Contract is composed of Part 1 and Part 2. For the matters not provided herein, the Parties hereto may have additional agreements and conclude a written agreement as an annex to this Contract. Annexes to this Contract are an integral part of this Contract and shall have the same equal legal force as the text of this Contract.

Article 41 Contents of this Contract shall be determined upon consensus through consultation amongst the signatory Parties. Where there are special provisions, the provisions are supplemented and amended in Article 15 of this Contract. In case of any discrepancy between these special provisions and relevant clauses of this Contract, the special provisions given in Article 15 of this Contract shall prevail.

Article 42 Headlines given in this Contract are provided for reading convenience only and shall not affect or restrict the contents and interpretation of relevant terms and conditions.

Article 43 The situations not agreed in this Contract or Party D’s failure to take actions immediately shall not be deemed as a waiver or restriction of Party D’s legal or agreed rights, unless otherwise stated by Party D.

Article 44 Party D may not obtain the Guarantor’s consent nor notify the Guarantor when it concludes a specific business application or a specific business contract with the Debtor under the Main Contract for handling a specific business.

Article 45 Party D has made detailed explanation and interpretation for all the terms and conditions of this Contract to Party A, Party B and Party C before this Contract is signed. Party A, Party B and Party C have no objection to all the terms and conditions of this Contract and they have accurate understanding of the legal meanings of relevant rights, obligations, limitation of liability or exceptions.

This Contract is signed by the Parties hereto on July 16, 2015.

(The remainder of this page is intentionally left blank.)

Party A:			(Seal)
Legal Representative / Principal	Pan Dangyu (Signature)	(Signature or Seal)
(or Authorized Agent)
(Note: signature is required only if Party A is a natural person.)

Party B and Co-owner:	(Seal)
Legal Representative / Principal	(Signature or Seal)
(or Authorized Agent)
(Note: signature is required only if Party B and the co-owner is a natural person.)

Party C and Co-owner:	(Seal)
Legal Representative / Principal	(Signature or Seal)
(or Authorized Agent)
(Note: signature is required only if Party C and the co-owner is a natural person.)

Party D: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Special Seal for Comprehensive Credit Granting Contract Uses Only)

Legal Representative / Principal	Ou Yangyong (Siganture)	(Signature or Seal)
(or Authorized Agent)

EX-10.5(C)

Exhibit 10.5(c)

Text Encoding: CMBC-HT041 (GS2007)

Maximum Guarantee Contract

(Applicable where the guarantor is a unit)

No.: GGBZ 2015 SHJZBZEZ No. 008-2

SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Seal)

CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal)

CHINA MINSHENG BANKING CORP., LTD.

Maximum Guarantee Contract

Guarantor: Huizhou Highpower Technology Co., Ltd. (hereinafter referred to as Party A)

Address: Xinhu Industrial Development Zone, Ma’an Town, Huicheng District, Huizhou City

P. C.:

Legal Representative / Main Principal: Pan Dangyu

Tel.:

Fax:

Opening Bank:

Account No.:

Creditor: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (hereinafter referred to as Party B)

Address: Minsheng Bank Building, Xinzhou No. 11 Street, Futian District, Shenzhen City

P. C.: 518048

Legal Representative / Main Principal: Ou Yangyong

Tel.:

Fax:

In order to ensure the performance of the Main Contract made and entered into by and between Party B and SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (hereinafter referred to as “Debtor of the Main Contract”), Party A is willing to provide maximum guarantee for all/par of the debts under the Main Contract. IN WITNESS WHEREOF, Party A and Party B conclude and sign this Contract through friendly consultation in accordance with relevant national laws and regulations.

Chapter 1 Category of the Principal Creditor’s Right Guaranteed and Maximum Amount of Debts

Article 1 The Main Contract of this Contract is selected as follows:

þ The Comprehensive Credit Granting Contract of 2015 SHJZBZEZ No. 008 made and entered into by and between Party B and the Debtor of the Main Contract, this Contract, and the specific business contracts, applications IOU, and certificates of creditor’s rights or electronic data under this Contract shall constitute the Main Contract of this Contract;

x All of                continuously made and entered into by and between Party B and the Debtor of the Main Contract during the period of the principal creditor’s right specified in Article 3 herein shall constitute the Main Contract of this Contract. The amount of all the outstanding principals used by the Debtor of this Contract at any time shall not exceed the limit specified in Article 2 herein. However, within this limit, the Debtor of the Main Contract may apply for recycling the limit of all the outstanding principals.

Article 2 The maximum amount of debts guaranteed by Party A is: (currency) RMB, (amount in words): twenty million Yuan only.

The maximum amount of debts is the maximum limit for balance of principals, defined as follows:

The maximum limit for balance of principals is the maximum limit for principals of principal creditor’s rights only. If the principal does not exceed the said limit, Party A is willing to undertake joint guarantee liability for all the accounts payable within the scope specified in Article 6 of this Contract.

Chapter 2 Period of the Principal Creditor’s Right Guaranteed

Article 3 The period of the principal credit’s right guaranteed under this Contract shall be from July 16, 2015 to July 16, 2016. The stipulations of this article have the following meanings:

3.1 If the business specified in the Main Contract is a loan business, the date of release of each loan shall not be later than the expiry date of this period.

3.2 If the business specified in the Main Contract is a business of acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods), the date of draft of acceptance of bill/discount/ opening of L/C/ opening of letter of guarantee (or letter of guarantee for the release of goods) shall not be later than the expiry date of this period.

Chapter 3 Guarantee Method

Article 4 Joint liability guarantee is adopted as the method of guarantee by Party A.

Article 5 Besides the guarantee method specified in this Contract, if there is any other guarantee under the Main Contract (including the Debtor of the Main Contract provides mortgage/pledge guarantee for Party B to the extent of the Debtor’s own property), Party A’s guarantee liability undertaken for Party B shall not be affected by any other guarantee nor be exempted or reduced arising therefrom. Party B is entitled to select to exercise the guarantee right under this Contract first and Party A waives the prior right of defense of any other guarantee. If Party B’s priority to gain compensation from the said mortgage right/pledge right is lost or reduced due to Party B’s waiver of the mortgage right/pledge right for the property of the Debtor of the Main Contract for any reason or due to Party B’s change of the sequence or contents of the mortgage right/pledge right, as promised by Party A, Party A’s guarantee liability undertaken for Party B shall not be exempted or reduced.

Chapter 4 Scope of Guarantee

Article 6 Party A’s guarantee scope: the maximum principal of the principal creditor’s rights specified in Article 2 of this Contract and other accounts payable (including but not limited to interest, default interest, compound interest, penalty, damages, expenses for realizing creditor’s rights and guarantee right (including but not limited to legal cost, attorney fee and business traveling expenses), and all other reasonable expenses payable). Other accounts payable specified in the said scope shall be included in the scope of guarantee liability undertaken by Party A but shall not be included in the maximum limit for balance of principals guaranteed under this Contract.

Article 7 The funds (including the funds Party B obtains from exercising the right specified in sub-clause 12.2 of this Contract) that Party A pays Party B for the purpose for performing Party A’s responsibility under this Contract shall be paid according to the following order: (1) Party B’s expenses for realizing creditor’s rights and guarantee right; (2) damages; (3) penalty; (4) compound interest; (5) default interest; (6) interest; (7) principal. Party B is entitled to change the said order.

Chapter 5 Determination of the Creditor’s Right Guaranteed

Article 8 The creditor’s right guaranteed under this Contract shall be determined under any one of the following circumstances:

8.1 the period of the principal creditor’s right specified in Article 3 of this Contract expires;

8.2 the Main Creditor announces acceleration of all debts under the Main Contract by law or according to relevant stipulations of the Main Contract;

8.3 other circumstances for determining the creditor’s right guaranteed prescribed by law.

Article 9 When the creditor’s right guaranteed under this Contract is determined, the following shall become effective:

9.1 When the creditor’s right guaranteed under this Contract is determined, the outstanding creditor’s right under the Main Contract shall be included in the scope of the creditor’s right guaranteed no matter whether the performance period of the creditor’s right has expired or not or there is any other additional condition.

9.2 When the creditor’s right guaranteed under this Contract is determined, all funds other than principals specified in Article 6 of this Contract shall be included in the scope of the creditor’s right guaranteed no matter whether the funds have been occurred or not;

9.3 From the date when the creditor’s right guaranteed under this Contract is determined to the date of full repayment of the creditor’s right guaranteed, if the Debtor of the Main Contract fails to perform the obligation of repayment of debts, Party B shall have the right to directly claim Party A for compensation and Party A shall repay Party B relevant debts immediately.

Chapter 6 Guarantee Period

Article 10 The guarantee period of the guarantee liability undertaken by Party A shall be two years and the date of start shall be determined according to the following method:

10.1 If the expiry date of the performance period of a debt under the Main Contract is early than or equals to the date of determination of the creditor’s right guaranteed, the guarantee period of the guarantee liability undertaken by Party A for the debt shall start from the date of determination of the creditor’s right guaranteed;

10.2 If the expiry date of the performance period of a debt under the Main Contract is later than the date of determination of the creditor’s right guaranteed, the guarantee period of the guarantee liability undertaken by Party A for the debt shall start from the expiry date of the performance period of this debt;

10.3 The term “expiry date of the performance period of a debt” indicated in the preceding paragraph includes the expiry date of the debt when the Debtor of the Main Contract repays the debt by installments and also includes the expiry date of acceleration announced by the Creditor according to the stipulations of the Main Contract;

10.4 If the business under the Main Contract is a business of letter of credit, bank acceptance bill, letter of guarantee or letter of guarantee for the release of goods, the date of external payment shall be deemed as the expiry date of the performance period of the debt.

Chapter 7 Both Parties’ Rights and Obligations

Article 11 Rights and obligations of Party A

11.1 Party A is a legal person duly established and validly existing, has the capacity for civil rights and the capacity for civil conducts for signing and executing this Contract, and has obtained all necessary licenses, approvals, registration and files required for signature of this Contract;

11.2 All the internal authorization formalities required for Party A for signing this Contract have been completely handled and become fully effective. Party A’s signature of this Contract and performance of its obligations under this Contract shall not conflict with the current articles of association and the internal rules and regulations, or any other contract, agreement and document binding upon Party A.

11.3 Party A shall ensure the authenticity, legitimacy and effectiveness of the documents that Party A provides Party B for demonstrating Party A’s legal identity and its ability for performing the guarantee liability under this Contract;

11.4 When the creditor’s right guaranteed under this Contract is determined, if the Debtor of the Main Contract fails to perform the debt prior to the expiry date of the performance period of the debt, Party A shall have the obligation to make payment to Party b immediately on the date of receiving of Party B’s written notice;

11.5 When giving guarantee under this Guarantee Contract, Party A is not involved in any litigation or arbitration which may be sufficient to affect its ability for undertaking the guarantee liability under this Contract;

11.6 Party A shall not bear the guarantee liability under the Guarantee Contract when the Debtor of the Main Contract has repaid all the debts under the Main Contract on schedule;

11.7 During the guarantee period, Party B may transfer to a third party the creditor’s right under the Main Contract without obtaining Party A’s consent, and Party A shall continue to undertake guarantee liability;

11.8 If the Debtor of the Main Contract and Party B changes the Main Contract through signing an agreement, Party A’s consent may not be obtained if such change does not increase the Debtor’s debts. However, if such change extends the term or increases the amount of principle of the principal creditor’s right guaranteed by Party A or allows transfer of debts by the Debtor of the Main Contract, Party A’s consent shall be obtained. Party A commits to undertake guarantee liability according to the Main Contract after change;

11.9 During the valid period of this Contract, Party B shall be notified thirty days in advance where there is any change of Party A’s operation mechanism, registered capital, equity, or Party A sells, transfers or disposes by any other means its material assets. Party B shall be notified within seven days if Party A's address, name or legal representative is changed;

11.10 If Party A provides guarantee for any other third party during the valid period of this Contract, Party B’s rights and interests shall not be damaged.

11.11 Loans under the Main Contract may be used for borrowing for repaying. Party A is willing to undertake guarantee liability.

11.12 If the Debtor of the Main Contract changes the purpose of the funds at random, Party A shall undertake guarantee liability for the debts under the Main Contract and the default interest and penalty arising from misappropriation of funds.

Article 12 Rights and obligations of Party B

12.1 Party B is entitled to demand Party A at any time to provide the financial reports, financial statements or other data reflecting Party A’s operation conditions and credit status;

12.2 If Party B demands Party a to undertake guarantee liability according to the stipulations of this Contract, Party A authorizes Party B to deduct relevant funds directly from the account opened with the bank institutions of China Minsheng Banking designated by Party A. With respect to the part insufficient for deduction, Party B is entitled to make deduction from any other account opened by Party A with the bank institutions of China Minsheng Banking or demand Party A to make repayment. Party B shall not bear any responsibility for losses on interest and any other losses caused to Party A arising from Party B’s behavior of deduction;

12.3 Party A may not be notified when Party B and the Debtor of the Main Contract sign a specific business contract (or agreement) on a specific credit granting business under the Main Contract.

Chapter 8 Liabilities for Breach of Contract

Article 13 When this Contract becomes effective, Party A and Party B shall perform the obligations specified in this Contract. Any party which fails to wholly or partly perform its obligations specified herein shall undertake relevant liabilities for breach of contract and make compensation for losses caused to the other party.

Chapter 9 Contract Effectiveness, Change and Termination

Article 14 This Contract shall become effective when both Parties’ legal representatives/main principals or authorized agents sign or seal and both Parties affix their official seals/special contract seals.

Article 15 When the Contract comes into force, Party A and Party B shall not change or cancel the Contract in advance at random. Should the Contract be changed or cancelled, a written agreement shall be reached and concluded upon unanimity through consultation.

Chapter 10 Dispute Settlement

Article 16 Any and all disputes between Party A and Party B arising from and in connection with the execution of this Contract shall be settled through consultation between both Parties. Where consultation fails, the dispute shall be governed by the people’s court at the location where Party B is located.

Chapter 11 Supplementary Provisions

Article 17 Notice and service

17.1 Any and all notices or written communications that one party sends to the other party under this Contract, including (but not limited to) any and all written documents or notices which must be sent under this Contract, shall be sent by registered post, fax, special delivery or other means to the address of the other party given on the first page of this Contract;

17.2 If sent by registered post, the forth day after the said document or notice is posted shall be deemed as the date of service and receiving; if sent by fax, the date indicated in the receipt of being sent successfully shall be deemed as the date of service and receiving; if sent by special delivery, the date when the special person sends the said document or notice to the address of the addressee shall be deemed as the date of service and receiving. In case of change of any contact information, the related party shall notify the other party in writing of the contact information changed within seven days after such change. Then, the notices, documents or applications specified herein shall be sent according to the contact information after the change.

Article 18 The validity of this Contract shall be independent of this Contract and may not be affected by the invalidity of the Main Contract.

Article 19 Other provisions agreed by both Parties

Article 20 This Contract has been made out in three originals, for Party A, Party B and the related party each holding one, which shall be equally authentic.

Article 21 When this Contract is signed, Party B has explained and interpreted in details all the terms and conditions of this Contract to Party A, and both Parties have no objection to the terms and conditions of this Contract. Both Parties have accurate understanding of the legal meaning of their corresponding rights and obligations, limitation of responsibilities or disclaimers.

Article 22 Both Parties agree and authorize Party B irrevocably to report relevant information to the financial credit information database established by the State. Such information shall include the name, registered address and other related information of this institution, the transaction records, credit information and bad information (including failure to perform obligations of this Contract, the institution’s performance of obligations and enforcement ruled or judged by the people’s court, and other relevant bad information prescribed by laws and regulations) generated during business activities and performance activities of this institution under this Contract.

This Contract is signed by Party A and Party B in Shenzhen.

Party A: SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Seal) (Seal)

Legal Representative / Main Principal: Pan Dangyu (Signature)

Date:

Party B: CHINA MINSHENG BANKING CORP., LTD. SHENZHEN BRANCH (Seal) (Seal)

Legal Representative / Main Principal: Ou Yangyong (Signature)

(Or Authorized Agent) (Signature or Seal)

Date:

EX-10.6

Exhibit 10.6

Working Capital Loan Contract

Reference No. : 2015zhenzhongyinbujiezi No.0059

Party A: Shenzhen Highpower Technology Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building 1, 68 Xinxia Street, Pinghu, Longgang, Shenzhen;

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen, 744557938816

Telephone: 8968 6236; Facsimile: 8968 6298

Party B: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 0755-2827 4825; Facsimile: 0755-2827 0847

This contract is the affiliated specific credit contract under the “Comprehensive Credit Line Contract” (Reference No.: 2015zhenzhongyinebuxiezi No. 0000465), which is signed by Shenzhen Highpower Technology Co., Ltd and Bank of China, Buji Sub-branch.

The parties agree as follow.

Clause 1 Amount

Party B agrees to provide the following loan:

Currency in:	RMB
Amount:	RMB Twenty millions only
	RMB  20,000,000.00

Clause 2 Period

The period of the loan is 12 months starting from the first withdrawal date in part or in whole. It is Party A’s obligation to withdraw funds on the date as agreed. Any late withdrawal will not result in delay/extension of repayment.

Clause 3 Use of loan

Purpose of loan: Purchase of raw materials

Party A is prohibited from changing the use of loan without Party B’s written approval. The restrictions include but are not limited to changing the use of loan to fixed assets or equity investments, as well as production activities prohibited by the central governments.

Clause 4 lending rate and interest calculations

Lending rate is floating rate, which is reset every six months starting from the first withdrawal date. The rate resetting date is the first day of each floating period.

For each withdrawal in installments:

■ RMB floating rate

A. First withdrawal (during the first floating period) interest rate is the twelve-month benchmark lending interest rate, set by Interbank rates, plus 120;

B. On the interest resetting date, the new interest rate is the spot one-year lending interest rate, benchmarked by Interbank rates, plus 120 on all outstanding loan amounts.

2. Interest calculation

Interest is calculated starting from the actual withdrawal date on the actual amount of money withdrawn and the number of days outstanding.

Interest calculation formula: Interest = Principal × actual number of days × daily rate.

Daily rate calculation is: daily rate = APR / 360.

3. The method of interest settlement

Interest settlement takes place on the 20th of each month, the 21st is the interest payment date.

If the final loan principal payment date is different from the interest payment date, the borrower should pay off all interest on the principal payment date.

4. Penalty interest

(1) For the loan overdue or violated use the loan purpose, penalty interest rate will apply to the loan amount that is overdue or misappropriated from the date of overdue or misappropriation until the principal and interest are paid off.

On both overdue and misappropriation of loans, a higher penalty interest rate shall be charged.

(2) If the borrower does not pay interest and/or penalty interest by the interest payment date, the interest is calculated based on Clause 3 and 4.

(3) Penalty rate

■ The penalty interest rate on floating-rate loans

According to the floating period and the method of floating as agreed in Clause 1, the penalty interest rate of the overdue loan shall be the agreed interest rate plus 50%, and the penalty interest rate of the misappropriated loan shall be the agreed interest rate plus 100%;

Clause 5 Withdrawal Conditions

Withdrawal must meet the following conditions:

1. This contract and its attachments have become effective.

2. Party A has provided guarantees requested by Party B, and the guarantee contract has become effective and has accomplished legal procedures of approval and registration.

3. Party A has provided Party B with loan documents, seals, personnel list, specimen signature, and complete the relevant evidence.

4. Party A has opened the account for fulfilling this contract requested by Party B.

5. Party A should submit written withdrawal application, documentary proof for using of loans and complete the relevant formalities for withdrawal before 5 banking days.

6. Party A has submitted resolution books and power of attorney signed by the board or other authorities to Party B.

Withdrawal can be refused by Party B if Party A has not met the above conditions, but agreed by Party B.

Clause 6 Date and method of withdrawal

1. All loans should be withdrawn in 30 days from 26^th Aug 2015.

2. Party B has the right to refuse the withdrawal application of unused loan which is over the date of withdrawal.

Clause 7 Payment of the loan

1. The account

The loan should be granted and paid through the account opened by Party A:

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:744557938816

2. The way of payment

(1) The way of payment should be in accordance with laws and regulations, regulatory requirements and the contract. The way of single payment of the Loan should be approved in written withdrawal application. Party B has the right to change the way of payment or stop providing the loan if the way of payment in the application doesn’t meet the requirement.

(3) Borrower makes the payment on its own.

(4) The change of payment. The way of payment should be changed when the payment, credit rating or other conditions of Party A has changed after submitting withdrawal application. Party A should provide the written change application, should resubmit the withdrawal application and documentary proof for using of loans if the sum, payment object or the use of loans has changed.

3. The specific requirements of entrusted payment

(1) Entrusted payment. Party B pay to the specified account directly which is written in this contract, including the name of account, account number and the sum of payment.

(2) To provide the transaction information. Party A should provide the account of loans, the account information of counterparty and relevant documents when entrusted payment. All document provided to Party B should be true, integral and effective, or Party B does not assume any responsibility for failed transaction, and occurred repayment obligations do not be affected.

(3) Party B’s obligations under the entrusted payment

A. Party B pay to the specified account after examination and approval of Party A’s commission books and other related transaction information when entrusted payment.

B. If Party B found that the proof materials and other related trading purposes material provided by Party A does not comply with this contract or the presence of other defects, Party B has the right to require Party A to supplement, replace, description or re-submit the relevant materials. Before these materials are submitted, Party B has the right to refuse the issuance and payment of the relevant amounts.

C. Party B will assume no responsibility and the generated obligations of Party A will be not affected if Party B cannot pay the loan to the counterparty in time in accordance with payment order of Party A because of the refund by opening bank of the counterparty. Party A hereby authorizes Party B to freeze the fund returned by opening bank of the counterparty. In this case, Party A shall resubmit the payment order and use proven materials and other related transaction materials.

(4) Party A shall not piecemeal way to circumvent the trustee to pay Party B.

5. Party B has right to redefine the terms of payment and loan disbursement or stop the loan if the following situations occurred:

(1) Party A violates the contract to circumvent entrusted payment of Party B by piecemeal way.

(2) Party A's credit status drops or main business profitability is not good.

(3) The use of loan is abnormal.

(4) Party A fails to provide the records and information of the loan requested by Party B timely.

(5) Party A contravenes this section to use the loan.

Clause 8 Repayment

1. Party A shall specify the following account as capital recovery account and provide the information of this account. Party B has the right to ask Party A to explain inflows and outflows of large-sum and abnormal capital, as well as monitor capital recovery account.

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:744557938816

2. Except otherwise agreed, on the expiry date, Party A must repay all the loans under this contract.

If Party A wants to change the plan of repayment, a written application confirmed in writing by both parties jointly should be submitted in 10 banking days before the loans maturity.

3. Unless otherwise agreed, Party A has the right to decide repayment order of the principal or interest. If there are several expiring loans or overdue loans which are repaid in installment way under this contract, Party B has the right to decide the liquidation sequence of a repayment. Party B has the right to decide the priority of the repayment order if multiple contracts expire at the same time.

4. Unless otherwise agreed, Party A can repay in advance, but Party A should notice Party B in written 15 banking days advance. The amount of the first advance payment used to repay the final maturity of the loan, in reverse order to repay the loans.

5. Party A must deposit funds in the following account three banking days advance of every expiring principle with interest. Party B has the right to take the funds from the account on the expiry date.

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:

Clause 9 Guarantee

1. To ensure that borrowing under this agreement is repaid, the following guarantees shall be adopted:

1) This contract is the main contract of Pledge Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0014A) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. And Party B.

2) This contract is the main contract of Pledge Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0014B) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. And Party B.

3) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0034) signed by SPRINGPOWER TECHNOLOGY (SHENZHEN) CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

4) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0035) signed by DAGNYU PAN (Guarantor) And Party B. Guarantor provides the maximum amount guarantee.

2. Under certain circumstance, Party B believes that will affect the capacity for fulfilling the contract of Party A or Guarantor, or Guarantee Contracts are invalid, revoked or dissolved, or the financial position of Party A/Guarantor deteriorate or Party A/Guarantor involved in litigation issues, or other factors which might affect its repayment ability, or guarantors were found default in other contracts with Party B, or devaluation, dismiss or damage of collaterals which might cause the value of the collaterals slaked or losses, Party B reserves the right to request Party A and Party A has the obligation to add or replace the guarantor.

Clause 10 Statement and Commitment

1. Party A’s statement:

1) Party A is legally register and exist with full capacity for civil rights and civil conduct;

2) Signing and performing the contract is the true will of Party A, Party A has been granted all legal and valid authorizations before signing the contract. The contract does not form a default for other contracts signed and performed by Party A and other legal documents. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All document and information, financial statement, certificates and other materials provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities.

6) Party A and the loan project reach the national environmental standards, not in the list of the enterprises which have problems of energy consumption and pollution, don’t have the risk of energy consumption and pollution.

2. Party A’s commitment:

1) Party A shall submit the financial statements and other relevant information regularly, including but not limited to annual, quarterly and monthly financial reports.

2) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract.

3) Cooperated in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations.

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in written in time. Those circumstances included but not limited to merger, division, decrease of capital, equity transfer, investment, a substantial increase of debt financing, a major asset and credit assignment.

Party A should notify Party B in time, when the following things occurred:

A. changes of articles of association, the scope of business, registered capital and legal representative of Party A or Guarantor.

B. Any form of management mode change, including joint operation, invest and cooperate with foreigners, contract management, reorganization, restructuring, listing plan.

C. Party A is involved in major litigation or arbitration, or property or collateral is seized, detained or regulated, or set new guarantee in collateral.

D. Out of business, dissolution, liquidation, suspend business for rectification, cancellation, revocation of the business license or (be) filed for bankruptcy.

E. Shareholders, directors and senior management personnel suspected of serious cases or economic disputes.

F. Default events in other contracts.

G. Operating difficulties and financial situation has deteriorated.

(5) The repayment to Party B prior to shareholders, and is comparable to other creditors of the same kind debts.

Party A is prohibited to repay the loan to shareholders before paying off the principal and interests under the contract.

(6) If Party A fails to pay principal, interests and fees on time in the fiscal year, any form of dividends is forbidden.

(7) Party A cannot dispose of assets to reduce its debt paying ability and promises the total amount of external guarantee is not 1 time higher than its net assets, and the total amount of external guarantee and the amount of single guarantee shall not exceed the limitation set by the articles of association.

(8) Except the use agreed in this contract or agreed by Party B, Party A is prohibited to transfer the loans to other accounts or related accounts.

Party A should provide documentary proof when the loan is transferred to other accounts or related accounts.

(9) Party B has the right to call the loan advanced according to the situation of capital return of Party A.

Clause 11 disclosure of the affiliated transaction inside Party A 's group

Party A is a Group customer confirmed by Party B according to the "Commercial Bank Group guidelines for customer credit risk management business"(hereinafter referred to as “guideline”). During the credit period, Party A shall promptly report to Party B about more than 10% of net assets associated with the transaction, including but not limited to: the parties to the transaction of the association; trading program and nature of the transaction; the amount of the transaction or the corresponding ratio; pricing policies (including no amount or only nominal amounts of transactions).

Under any of the following circumstances, Party B shall have the right to unilaterally decide to suspend the unused loan and recover part or all of the principal and interest of the loan in advance: use the false contracts which are signed with affiliated parties to discount or pledge at bank and to obtain bank funds or credit with notes receivable and accounts receivable without actual trade background; the occurrence of major mergers, acquisitions and reorganization which are considered by Party B may affect the loan safety; evasion or discarding of bank debts on purpose through affiliated transactions; other circumstances stipulated in article eighteenth of "guidelines".

Clause 12 Breach of Covenants

Each of the following events and issues constitute Party A in the event of default under the contract:

1. Party A did not perform the repayment obligation under this contract;

2. Party A has not used the credit funds according to agreed purposes, or has not paid the loan by agreed way in this contract;

3. Party A’s statements in this contract are untrue or in violation with commitments made by Party A in this contract.

4. Under the circumstance defined in 2.(4) of Clause 10, Party A refused to provide additional guarantee or replacement of a new guarantor.

5. Deterioration of credit, or profitability, debt paying ability, operating ability, cash flow and other financial indicators of Party A deteriorate, breaking the contract index constraint agreed or other financial covenants.

6. Party A breaches other contracts signed with Party B or other affiliated institutions of Bank of China.

7. Guarantors breach contracts, or have default events with Party B or other affiliated institutions of Bank of China.

8. The termination of business or dissolution, revocation or bankruptcy of Party A.

9. Party A is or may be involved in major economic disputes, litigation, arbitration, or its assets were seized, detained or enforced, or investigated or punished by the judicial organ or taxation, industry and commerce administrative organs in accordance with the law, has been or may affect its ability to fulfill the obligations under this contract.

10. Abnormal change, missing, legal restriction of personal liberty and investigation by judicial authorities of Party A’s major individual investors, key management personnel, which have been or may affect Party A to fulfill the obligations under this contract.

11. Party B finds the problems which may affect the borrower or guarantor's financial situation and performance capabilities when reviewing Party A’s financial condition and performance capabilities every year (every year from the effective date of the contract);

12. Party A cannot provide materials to Party B to explain large and abnormal capital inflow and outflow in the account.

13. Party A is in violation with other rights and obligations agreed in this contract.

When any of the above situations occurred, Party B will perform the following in separate or all at the same time according to the specific situation:

1) Require Party A or Guarantor to rectify defaults within a definite time.

2) Reduce completely or partly, pause or terminate Party A’s Credit limit.

3) Pause or terminate completely or partly Party A’s business applications in this contract or in other contracts between Party A and Party B specific credit line under this contract. Pause or terminate completely or partly, or cancel or stop offering, paying and settling the unissued loans and unsettled trade financing.

4) Announce the immediate expiration on all or part of the outstanding loans, principle and interest of trade financing and other accounts payable under this contract or other contracts between Party A and Party B.

5) Terminate or release this contract, terminate or release contracts between Party A and Party B completely or partly.

6) Require compensation from Party A on the losses caused by Party A to Party B.

7) Deduct the fund from Party A’s deposit accounts to pay off the debts to Party B under this contract. All the undue funds in the accounts were considered as acceleration of maturity. If the currency in deposit account is different from the currency of Party B’s loans, the exchange rate on the date of the hold in custody will be applied.

8) Real rights of pledge will be executed.

9) Require Guarantors assume liability of guaranty.

10) Other necessary or probable procedures on Party B’s concern.

Clause 13 Rights reserved

One party does not perform part or all of the rights under this contract, nor does not require the other party to perform, undertake part or all of the obligations and responsibilities, which does not mean the abdication of the right or exemption of the obligation and responsibility.

Any tolerance, extension or delay from one party to another party for exercising of rights under this contract does not affect the rights one party enjoys according to this contract and laws and regulations, and does not mean the abdication of the right.

Clause 14 Changes, Modification, Termination

Upon negotiation and agreed by both parties, this contract can be changed and modified by written. Any of the changes and modifications should form the inseparable part of this contract.

Unless otherwise provided for in any law or regulation or stipulated between the parties, this contract would not be terminated prior to all the rights and obligations are fulfilled.

Unless otherwise provided for in any law or regulation or stipulated between the parties, the invalidation of single terms under this contract should not affect the validation of other terms under this contract.

Clause 15 Applicable Law and Resolution for Dispute

1. This contract is applicable to the laws of People’s Republic of China.

During the performance of this contract or in connection with all disputes relating to this contract, the two parties settled through friendly consultations. If negotiation cannot reach agreement, both parties can apply to the local people's court of Party A or other affiliated institutions of Bank of China.

Clause 16 Attachments

The Appendix hereof and the other appendix confirmed by both parties shall form an integral part of this contract, and shall be of legally equal effect with this contract.

1. Withdrawal application;

Clause 17 Other terms and conditions

1. Without Party B’s written approval, Party A is not allowed to transfer the rights and obligations under this contract to the 3rd Parties.

2. Party A should give the consent that Party B might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The transactions under the contract based on independent interests. According to relevant laws, regulations and regulatory requirements, other parties of the transaction constitutes a connected party or associated persons, any party shall not seek to use this relationship to affect the fair of transaction.

6. The title and name of business in this contract is only for business purposes, will not be used for interpretation of the contract terms, the rights and obligations.

7. In accordance with the provisions of the relevant laws and regulations, supervision, Party B has the right to provide the information of this contract and other relevant information to the credit system of the people's Bank of China and other legally established credit information database, for organizations or individuals who have the appropriate qualifications to query and use.

8. If the drawdown date or the repayment date is in legal holidays, then it is delayed to the first working day after the holidays.

9. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract, Party B has the right to stop or change the contract or its clauses, and Party B is exempted from punishment under this circumstance.

Clause 18 Effective of the contract

This contract enters into force upon the date when it is signed or sealed and affixed with official seals by the legal representatives or entrusted agents of Party A and Party B.

This contract is signed in quadruplicate, each party holds two copies, which have the equal legal effect.

/s/ [Stamp of Party A]

Signature

Aug 26, 2015

/s/ [Stamp of Party B]

Signature

Aug 26, 2015

EX-10.7

Exhibit 10.7

Working Capital Loan Contract

Reference No. : 2015zhenzhongyinbujiezi No.00064

Party A: Springpower Technology (Shenzhen) Co., Ltd

Business Licences: 440306503295562

Legal Representative: Dangyu Pan

Address: Factory A, Chaoshun Industrial Zone, Renmin Road, Fumin Residential Area, Guanlan, BaoAn District,

Postal code: 518000

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen,

Telephone: 2802 9923 ; Facsimile: 2802 9923

Party B: Bank of China, Buji Sub-branch.

Legal Representative: Li Yanshan

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 0755-2827 4825; Facsimile: 0755-2827 0847

This contract is the affiliated specific credit contract under the “Comprehensive Credit Line Contract” (Reference No.: 2015zhenzhongyinebuxiezi No. 0000466), which is signed by Springpower Technology (Shenzhen) Co., Ltd and Bank of China, Buji Sub-branch.

The parties agree as follow.

Clause 1 Amount

Party B agrees to provide the following loan:

Currency in:	RMB
Amount:	RMB ten millions only
	RMB  10,000,000.00

Clause 2 Period

The period of the loan is 12 months starting from the first withdrawal date in part or in whole. It is Party A’s obligation to withdraw funds on the date as agreed. Any late withdrawal will not result in delay/extension of repayment.

1

Clause 3 Use of loan

Purpose of loan: Purchase of raw materials

Party A is prohibited from changing the use of loan without Party B’s written approval. The restrictions include but are not limited to changing the use of loan to fixed assets or equity investments, as well as production activities prohibited by the central governments.

Clause 4 lending rate and interest calculations

Lending rate is floating rate, which is reset every six months starting from the first withdrawal date. The rate resetting date is the first day of each floating period.

For each withdrawal in installments:

■ RMB floating rate

A. First withdrawal (during the first floating period) interest rate is the twelve-month benchmark lending interest rate, set by Interbank rates, plus 126.25;

B. On the interest resetting date, the new interest rate is the spot one-year lending interest rate, benchmarked by Interbank rates, plus 126.25 on all outstanding loan amounts.

2. Interest calculation

Interest is calculated starting from the actual withdrawal date on the actual amount of money withdrawn and the number of days outstanding.

Interest calculation formula: Interest = Principal × actual number of days × daily rate.

Daily rate calculation is: daily rate = APR / 360.

3. The method of interest settlement

Interest settlement takes place on the 20th of each month, the 21st is the interest payment date.

If the final loan principal payment date is different from the interest payment date, the borrower should pay off all interest on the principal payment date.

4. Penalty interest

(1) For the loan overdue or violated use the loan purpose, penalty interest rate will apply to the loan amount that is overdue or misappropriated from the date of overdue or misappropriation until the principal and interest are paid off.

On both overdue and misappropriation of loans, a higher penalty interest rate shall be charged.

(2) If the borrower does not pay interest and/or penalty interest by the interest payment date, the interest is calculated based on Clause 3 and 4.

(3) Penalty rate

■ The penalty interest rate on floating-rate loans

According to the floating period and the method of floating as agreed in Clause 1, the penalty interest rate of the overdue loan shall be the agreed interest rate plus 50%, and the penalty interest rate of the misappropriated loan shall be the agreed interest rate plus 100%;

Clause 5 Withdrawal Conditions

Withdrawal must meet the following conditions:

1. This contract and its attachments have become effective.

2. Party A has provided guarantees requested by Party B, and the guarantee contract has become effective and has accomplished legal procedures of approval and registration.

3. Party A has provided Party B with loan documents, seals, personnel list, specimen signature, and complete the relevant evidence.

4. Party A has opened the account for fulfilling this contract requested by Party B.

5. Party A should submit written withdrawal application, documentary proof for using of loans and complete the relevant formalities for withdrawal before 5 banking days.

6. Party A has submitted resolution books and power of attorney signed by the board or other authorities to Party B.

Withdrawal can be refused by Party B if Party A has not met the above conditions, but agreed by Party B.

Clause 6 Date and method of withdrawal

1. All loans should be withdrawn in 30 days from Sep 17, 2015.

2. Party B has the right to refuse the withdrawal application of unused loan which is over the date of withdrawal.

Clause 7 Payment of the loan

1. The account

The loan should be granted and paid through the account opened by Party A:

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

2. The way of payment

(1) The way of payment should be in accordance with laws and regulations, regulatory requirements and the contract. The way of single payment of the Loan should be approved in written withdrawal application. Party B has the right to change the way of payment or stop providing the loan if the way of payment in the application doesn’t meet the requirement.

(3) Borrower makes the payment on its own.

(4) The change of payment. The way of payment should be changed when the payment, credit rating or other conditions of Party A has changed after submitting withdrawal application. Party A should provide the written change application, should resubmit the withdrawal application and documentary proof for using of loans if the sum, payment object or the use of loans has changed.

3. The specific requirements of entrusted payment

(1) Entrusted payment. Party B pay to the specified account directly which is written in this contract, including the name of account, account number and the sum of payment.

(2) To provide the transaction information. Party A should provide the account of loans, the account information of counterparty and relevant documents when entrusted payment. All document provided to Party B should be true, integral and effective, or Party B does not assume any responsibility for failed transaction, and occurred repayment obligations do not be affected.

(3) Party B’s obligations under the entrusted payment

A. Party B pay to the specified account after examination and approval of Party A’s commission books and other related transaction information when entrusted payment.

B. If Party B found that the proof materials and other related trading purposes material provided by Party A does not comply with this contract or the presence of other defects, Party B has the right to require Party A to supplement, replace, description or re-submit the relevant materials. Before these materials are submitted, Party B has the right to refuse the issuance and payment of the relevant amounts.

C. Party B will assume no responsibility and the generated obligations of Party A will be not affected if Party B cannot pay the loan to the counterparty in time in accordance with payment order of Party A because of the refund by opening bank of the counterparty. Party A hereby authorizes Party B to freeze the fund returned by opening bank of the counterparty. In this case, Party A shall resubmit the payment order and use proven materials and other related transaction materials.

(4) Party A shall not piecemeal way to circumvent the trustee to pay Party B.

5. Party B has right to redefine the terms of payment and loan disbursement or stop the loan if the following situations occurred:

(1) Party A violates the contract to circumvent entrusted payment of Party B by piecemeal way.

(2) Party A's credit status drops or main business profitability is not good.

(3) The use of loan is abnormal.

(4) Party A fails to provide the records and information of the loan requested by Party B timely.

(5) Party A contravenes this section to use the loan.

Clause 8 Repayment

1. Party A shall specify the following account as capital recovery account and provide the information of this account. Party B has the right to ask Party A to explain inflows and outflows of large-sum and abnormal capital, as well as monitor capital recovery account.

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

2. Except otherwise agreed, on the expiry date, Party A must repay all the loans under this contract.

If Party A wants to change the plan of repayment, a written application confirmed in writing by both parties jointly should be submitted in 10 banking days before the loans maturity.

3. Unless otherwise agreed, Party A has the right to decide repayment order of the principal or interest. If there are several expiring loans or overdue loans which are repaid in installment way under this contract, Party B has the right to decide the liquidation sequence of a repayment. Party B has the right to decide the priority of the repayment order if multiple contracts expire at the same time.

4. Unless otherwise agreed, Party A can repay in advance, but Party A should notice Party B in written 15 banking days advance. The amount of the first advance payment used to repay the final maturity of the loan, in reverse order to repay the loans.

5. Party A must deposit funds in the following account three banking days advance of every expiring principle with interest. Party B has the right to take the funds from the account on the expiry date.

Account Name: Springpower Technology (Shenzhen) Co., Ltd

Account number:764057938815

Clause 9 Guarantee

1. To ensure that borrowing under this agreement is repaid, the following guarantees shall be adopted:

1) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0037) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

2) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0038) signed by HUIZHOU HIGHPOWER TECHNOLOGY CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

3) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0039) signed by DAGNYU PAN (Guarantor) And Party B. Guarantor provides the maximum amount guarantee.

4) This contract is the main contract of mortgage Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0015) signed by GANZHOU HIGHPOWER TECHNOLOGY CO., LTD.  (Guarantor) And Party B. Guarantor provides the maximum amount mortgage.

2. Under certain circumstance, Party B believes that will affect the capacity for fulfilling the contract of Party A or Guarantor, or Guarantee Contracts are invalid, revoked or dissolved, or the financial position of Party A/Guarantor deteriorate or Party A/Guarantor involved in litigation issues, or other factors which might affect its repayment ability, or guarantors were found default in other contracts with Party B, or devaluation, dismiss or damage of collaterals which might cause the value of the collaterals slaked or losses, Party B reserves the right to request Party A and Party A has the obligation to add or replace the guarantor.

Clause 10 Statement and Commitment

1. Party A’s statement:

1) Party A is legally register and exist with full capacity for civil rights and civil conduct;

2) Signing and performing the contract is the true will of Party A, Party A has been granted all legal and valid authorizations before signing the contract. The contract does not form a default for other contracts signed and performed by Party A and other legal documents. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All document and information, financial statement, certificates and other materials provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities.

6) Party A and the loan project reach the national environmental standards, not in the list of the enterprises which have problems of energy consumption and pollution, don’t have the risk of energy consumption and pollution.

2. Party A’s commitment:

1) Party A shall submit the financial statements and other relevant information regularly, including but not limited to annual, quarterly and monthly financial reports.

2) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract.

3) Cooperated in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations.

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in written in time. Those circumstances included but not limited to merger, division, decrease of capital, equity transfer, investment, a substantial increase of debt financing, a major asset and credit assignment.

Party A should notify Party B in time, when the following things occurred:

A. changes of articles of association, the scope of business, registered capital and legal representative of Party A or Guarantor.

B. Any form of management mode change, including joint operation, invest and cooperate with foreigners, contract management, reorganization, restructuring, listing plan.

C. Party A is involved in major litigation or arbitration, or property or collateral is seized, detained or regulated, or set new guarantee in collateral.

D. Out of business, dissolution, liquidation, suspend business for rectification, cancellation, revocation of the business license or (be) filed for bankruptcy.

E. Shareholders, directors and senior management personnel suspected of serious cases or economic disputes.

F. Default events in other contracts.

G. Operating difficulties and financial situation has deteriorated.

(5) The repayment to Party B prior to shareholders, and is comparable to other creditors of the same kind debts.

Party A is prohibited to repay the loan to shareholders before paying off the principal and interests under the contract.

(6) If Party A fails to pay principal, interests and fees on time in the fiscal year, any form of dividends is forbidden.

(7) Party A cannot dispose of assets to reduce its debt paying ability and promises the total amount of external guarantee is not 1 time higher than its net assets, and the total amount of external guarantee and the amount of single guarantee shall not exceed the limitation set by the articles of association.

(8) Except the use agreed in this contract or agreed by Party B, Party A is prohibited to transfer the loans to other accounts or related accounts.

Party A should provide documentary proof when the loan is transferred to other accounts or related accounts.

(9) Party B has the right to call the loan advanced according to the situation of capital return of Party A.

Clause 11 disclosure of the affiliated transaction inside Party A 's group

Party A is a Group customer confirmed by Party B according to the "Commercial Bank Group guidelines for customer credit risk management business"(hereinafter referred to as “guideline”). During the credit period, Party A shall promptly report to Party B about more than 10% of net assets associated with the transaction, including but not limited to: the parties to the transaction of the association; trading program and nature of the transaction; the amount of the transaction or the corresponding ratio; pricing policies (including no amount or only nominal amounts of transactions).

Under any of the following circumstances, Party B shall have the right to unilaterally decide to suspend the unused loan and recover part or all of the principal and interest of the loan in advance: use the false contracts which are signed with affiliated parties to discount or pledge at bank and to obtain bank funds or credit with notes receivable and accounts receivable without actual trade background; the occurrence of major mergers, acquisitions and reorganization which are considered by Party B may affect the loan safety; evasion or discarding of bank debts on purpose through affiliated transactions; other circumstances stipulated in article eighteenth of "guidelines".

Clause 12 Breach of Covenants

Each of the following events and issues constitute Party A in the event of default under the contract:

1. Party A did not perform the repayment obligation under this contract;

2. Party A has not used the credit funds according to agreed purposes, or has not paid the loan by agreed way in this contract;

3. Party A’s statements in this contract are untrue or in violation with commitments made by Party A in this contract.

4. Under the circumstance defined in 2.(4) of Clause 10, Party A refused to provide additional guarantee or replacement of a new guarantor.

5. Deterioration of credit, or profitability, debt paying ability, operating ability, cash flow and other financial indicators of Party A deteriorate, breaking the contract index constraint agreed or other financial covenants.

6. Party A breaches other contracts signed with Party B or other affiliated institutions of Bank of China.

7. Guarantors breach contracts, or have default events with Party B or other affiliated institutions of Bank of China.

8. The termination of business or dissolution, revocation or bankruptcy of Party A.

9. Party A is or may be involved in major economic disputes, litigation, arbitration, or its assets were seized, detained or enforced, or investigated or punished by the judicial organ or taxation, industry and commerce administrative organs in accordance with the law, has been or may affect its ability to fulfill the obligations under this contract.

10. Abnormal change, missing, legal restriction of personal liberty and investigation by judicial authorities of Party A’s major individual investors, key management personnel, which have been or may affect Party A to fulfill the obligations under this contract.

11. Party B finds the problems which may affect the borrower or guarantor's financial situation and performance capabilities when reviewing Party A’s financial condition and performance capabilities every year (every year from the effective date of the contract);

12. Party A cannot provide materials to Party B to explain large and abnormal capital inflow and outflow in the account.

13. Party A is in violation with other rights and obligations agreed in this contract.

When any of the above situations occurred, Party B will perform the following in separate or all at the same time according to the specific situation:

1) Require Party A or Guarantor to rectify defaults within a definite time.

2) Reduce completely or partly, pause or terminate Party A’s Credit limit.

3) Pause or terminate completely or partly Party A’s business applications in this contract or in other contracts between Party A and Party B specific credit line under this contract. Pause or terminate completely or partly, or cancel or stop offering, paying and settling the unissued loans and unsettled trade financing.

4) Announce the immediate expiration on all or part of the outstanding loans, principle and interest of trade financing and other accounts payable under this contract or other contracts between Party A and Party B.

5) Terminate or release this contract, terminate or release contracts between Party A and Party B completely or partly.

6) Require compensation from Party A on the losses caused by Party A to Party B.

7) Deduct the fund from Party A’s deposit accounts to pay off the debts to Party B under this contract. All the undue funds in the accounts were considered as acceleration of maturity. If the currency in deposit account is different from the currency of Party B’s loans, the exchange rate on the date of the hold in custody will be applied.

8) Real rights of pledge will be executed.

9) Require Guarantors assume liability of guaranty.

10) Other necessary or probable procedures on Party B’s concern.

Clause 13 Rights reserved

One party does not perform part or all of the rights under this contract, nor does not require the other party to perform, undertake part or all of the obligations and responsibilities, which does not mean the abdication of the right or exemption of the obligation and responsibility. 

Any tolerance, extension or delay from one party to another party for exercising of rights under this contract does not affect the rights one party enjoys according to this contract and laws and regulations, and does not mean the abdication of the right.

Clause 14 Changes, Modification, Termination

Upon negotiation and agreed by both parties, this contract can be changed and modified by written. Any of the changes and modifications should form the inseparable part of this contract.

Unless otherwise provided for in any law or regulation or stipulated between the parties, this contract would not be terminated prior to all the rights and obligations are fulfilled.

Unless otherwise provided for in any law or regulation or stipulated between the parties, the invalidation of single terms under this contract should not affect the validation of other terms under this contract.

Clause 15 Applicable Law and Resolution for Dispute

1.      This contract is applicable to the laws of People’s Republic of China.

During the performance of this contract or in connection with all disputes relating to this contract, the two parties settled through friendly consultations. If negotiation cannot reach agreement, both parties can apply to the local people's court of Party A or other affiliated institutions of Bank of China.

Clause 16 Attachments

The Appendix hereof and the other appendix confirmed by both parties shall form an integral part of this contract, and shall be of legally equal effect with this contract.

1. Withdrawal application;

Clause 17 Other terms and conditions

1. Without Party B’s written approval, Party A is not allowed to transfer the rights and obligations under this contract to the 3rd Parties.

2. Party A should give the consent that Party B might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The transactions under the contract based on independent interests. According to relevant laws, regulations and regulatory requirements, other parties of the transaction constitutes a connected party or associated persons, any party shall not seek to use this relationship to affect the fair of transaction.

6. The title and name of business in this contract is only for business purposes, will not be used for interpretation of the contract terms, the rights and obligations.

7. In accordance with the provisions of the relevant laws and regulations, supervision, Party B has the right to provide the information of this contract and other relevant information to the credit system of the people's Bank of China and other legally established credit information database, for organizations or individuals who have the appropriate qualifications to query and use.

8. If the drawdown date or the repayment date is in legal holidays, then it is delayed to the first working day after the holidays.

9. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract, Party B has the right to stop or change the contract or its clauses, and Party B is exempted from punishment under this circumstance.

Clause 18 Effective of the contract

This contract enters into force upon the date when it is signed or sealed and affixed with official seals by the legal representatives or entrusted agents of Party A and Party B.

This contract is signed in quadruplicate, each party holds two copies, which have the equal legal effect.

/s/ [Stamp of Party A]

Signature

Sep 17, 2015

/s/ [Stamp of Party B]

Signature

Sep 17, 2015

EX-10.8

Exhibit 10.8

Working Capital Loan Contract

Reference No. : 2015zhenzhongyinbujiezi No.0063

Party A: Shenzhen Highpower Technology Co., Ltd

Business License: 440307503274740

Legal Representative: Dangyu Pan

Address: Building 1, 68 Xinxia Street, Pinghu, Longgang, Shenzhen;

Postal code: 518111

Deposit A/C and financial institutions: Bank of China, Pinghu Sub-branch, Shenzhen, 744557938816

Telephone: 8968 6236; Facsimile: 8968 6298

Party B: Bank of China, Buji Sub-branch.

Legal Representative: DENG ZHENGBO

Address: 108, Buji Road, Buji Town, Longgang District, Shenzhen; Postal code: 518112

Telephone: 0755-2827 4825; Facsimile: 0755-2827 0847

This contract is the affiliated specific credit contract under the “Comprehensive Credit Line Contract” (Reference No.: 2015zhenzhongyinebuxiezi No. 0000465), which is signed by Shenzhen Highpower Technology Co., Ltd and Bank of China, Buji Sub-branch.

The parties agree as follow.

Clause 1 Amount

Party B agrees to provide the following loan:

Currency in:	RMB
Amount:	RMB Twenty millions only
	RMB  20,000,000.00

Clause 2 Period

The period of the loan is 12 months starting from the first withdrawal date in part or in whole. It is Party A’s obligation to withdraw funds on the date as agreed. Any late withdrawal will not result in delay/extension of repayment.

Clause 3 Use of loan

Purpose of loan: Purchase of raw materials

Party A is prohibited from changing the use of loan without Party B’s written approval. The restrictions include but are not limited to changing the use of loan to fixed assets or equity investments, as well as production activities prohibited by the central governments.

Clause 4 lending rate and interest calculations

Lending rate is floating rate, which is reset every six months starting from the first withdrawal date. The rate resetting date is the first day of each floating period.

For each withdrawal in installments:

■ RMB floating rate

A. First withdrawal (during the first floating period) interest rate is the twelve-month benchmark lending interest rate, set by Interbank rates, plus 120;

B. On the interest resetting date, the new interest rate is the spot one-year lending interest rate, benchmarked by Interbank rates, plus 120 on all outstanding loan amounts.

2. Interest calculation

Interest is calculated starting from the actual withdrawal date on the actual amount of money withdrawn and the number of days outstanding.

Interest calculation formula: Interest = Principal × actual number of days × daily rate.

Daily rate calculation is: daily rate = APR / 360.

3. The method of interest settlement

Interest settlement takes place on the 20th of each month, the 21st is the interest payment date.

If the final loan principal payment date is different from the interest payment date, the borrower should pay off all interest on the principal payment date.

4. Penalty interest

(1) For the loan overdue or violated use the loan purpose, penalty interest rate will apply to the loan amount that is overdue or misappropriated from the date of overdue or misappropriation until the principal and interest are paid off.

On both overdue and misappropriation of loans, a higher penalty interest rate shall be charged.

(2) If the borrower does not pay interest and/or penalty interest by the interest payment date, the interest is calculated based on Clause 3 and 4.

(3) Penalty rate

■ The penalty interest rate on floating-rate loans

According to the floating period and the method of floating as agreed in Clause 1, the penalty interest rate of the overdue loan shall be the agreed interest rate plus 50%, and the penalty interest rate of the misappropriated loan shall be the agreed interest rate plus 100%;

Clause 5 Withdrawal Conditions

Withdrawal must meet the following conditions:

1. This contract and its attachments have become effective.

2. Party A has provided guarantees requested by Party B, and the guarantee contract has become effective and has accomplished legal procedures of approval and registration.

3. Party A has provided Party B with loan documents, seals, personnel list, specimen signature, and complete the relevant evidence.

4. Party A has opened the account for fulfilling this contract requested by Party B.

5. Party A should submit written withdrawal application, documentary proof for using of loans and complete the relevant formalities for withdrawal before 5 banking days.

6. Party A has submitted resolution books and power of attorney signed by the board or other authorities to Party B.

Withdrawal can be refused by Party B if Party A has not met the above conditions, but agreed by Party B.

Clause 6 Date and method of withdrawal

1. All loans should be withdrawn in 30 days from 17^th Sep 2015.

2. Party B has the right to refuse the withdrawal application of unused loan which is over the date of withdrawal.

Clause 7 Payment of the loan

1. The account

The loan should be granted and paid through the account opened by Party A:

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:744557938816

2. The way of payment

(1) The way of payment should be in accordance with laws and regulations, regulatory requirements and the contract. The way of single payment of the Loan should be approved in written withdrawal application. Party B has the right to change the way of payment or stop providing the loan if the way of payment in the application doesn’t meet the requirement.

(3) Borrower makes the payment on its own.

(4) The change of payment. The way of payment should be changed when the payment, credit rating or other conditions of Party A has changed after submitting withdrawal application. Party A should provide the written change application, should resubmit the withdrawal application and documentary proof for using of loans if the sum, payment object or the use of loans has changed.

3. The specific requirements of entrusted payment

(1) Entrusted payment. Party B pay to the specified account directly which is written in this contract, including the name of account, account number and the sum of payment.

(2) To provide the transaction information. Party A should provide the account of loans, the account information of counterparty and relevant documents when entrusted payment. All document provided to Party B should be true, integral and effective, or Party B does not assume any responsibility for failed transaction, and occurred repayment obligations do not be affected.

(3) Party B’s obligations under the entrusted payment

A. Party B pay to the specified account after examination and approval of Party A’s commission books and other related transaction information when entrusted payment.

B. If Party B found that the proof materials and other related trading purposes material provided by Party A does not comply with this contract or the presence of other defects, Party B has the right to require Party A to supplement, replace, description or re-submit the relevant materials. Before these materials are submitted, Party B has the right to refuse the issuance and payment of the relevant amounts.

C. Party B will assume no responsibility and the generated obligations of Party A will be not affected if Party B cannot pay the loan to the counterparty in time in accordance with payment order of Party A because of the refund by opening bank of the counterparty. Party A hereby authorizes Party B to freeze the fund returned by opening bank of the counterparty. In this case, Party A shall resubmit the payment order and use proven materials and other related transaction materials.

(4) Party A shall not piecemeal way to circumvent the trustee to pay Party B.

5. Party B has right to redefine the terms of payment and loan disbursement or stop the loan if the following situations occurred:

(1) Party A violates the contract to circumvent entrusted payment of Party B by piecemeal way.

(2) Party A's credit status drops or main business profitability is not good.

(3) The use of loan is abnormal.

(4) Party A fails to provide the records and information of the loan requested by Party B timely.

(5) Party A contravenes this section to use the loan.

Clause 8 Repayment

1. Party A shall specify the following account as capital recovery account and provide the information of this account. Party B has the right to ask Party A to explain inflows and outflows of large-sum and abnormal capital, as well as monitor capital recovery account.

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:744557938816

2. Except otherwise agreed, on the expiry date, Party A must repay all the loans under this contract.

If Party A wants to change the plan of repayment, a written application confirmed in writing by both parties jointly should be submitted in 10 banking days before the loans maturity.

3. Unless otherwise agreed, Party A has the right to decide repayment order of the principal or interest. If there are several expiring loans or overdue loans which are repaid in installment way under this contract, Party B has the right to decide the liquidation sequence of a repayment. Party B has the right to decide the priority of the repayment order if multiple contracts expire at the same time.

4. Unless otherwise agreed, Party A can repay in advance, but Party A should notice Party B in written 15 banking days advance. The amount of the first advance payment used to repay the final maturity of the loan, in reverse order to repay the loans.

5. Party A must deposit funds in the following account three banking days advance of every expiring principle with interest. Party B has the right to take the funds from the account on the expiry date.

Account Name: Shenzhen Highpower Technology Co., Ltd.

Account number:

Clause 9 Guarantee

1. To ensure that borrowing under this agreement is repaid, the following guarantees shall be adopted:

1) This contract is the main contract of Pledge Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0014A) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. And Party B.

2) This contract is the main contract of Pledge Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUDIEZI0014B) signed by SHENZHEN HIGHPOWER TECHNOLOGY CO., LTD. And Party B.

3) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0034) signed by SPRINGPOWER TECHNOLOGY (SHENZHEN) CO., LTD. (Guarantor) and Party B. Guarantor provides the maximum amount guarantee.

4) This contract is the main contract of Guaranty Contract of Maximum Amount (NO: 2015ZHENZHONGYINBUBAOEZI0035) signed by DAGNYU PAN (Guarantor) And Party B. Guarantor provides the maximum amount guarantee.

2. Under certain circumstance, Party B believes that will affect the capacity for fulfilling the contract of Party A or Guarantor, or Guarantee Contracts are invalid, revoked or dissolved, or the financial position of Party A/Guarantor deteriorate or Party A/Guarantor involved in litigation issues, or other factors which might affect its repayment ability, or guarantors were found default in other contracts with Party B, or devaluation, dismiss or damage of collaterals which might cause the value of the collaterals slaked or losses, Party B reserves the right to request Party A and Party A has the obligation to add or replace the guarantor.

Clause 10 Statement and Commitment

1. Party A’s statement:

1) Party A is legally register and exist with full capacity for civil rights and civil conduct;

2) Signing and performing the contract is the true will of Party A, Party A has been granted all legal and valid authorizations before signing the contract. The contract does not form a default for other contracts signed and performed by Party A and other legal documents. It is Party A’s responsibility to complete all required approvals, registrations, permits and filings.

3) All document and information, financial statement, certificates and other materials provided by Party A to Party B are true, complete, accurate and effective.

4) All the transactions mentioned by Party A for apply specific credit line should be real and not for illegal purposes such as: money laundry.

5) No hidden events regarding Party A and guarantor’s financial and repayment abilities.

6) Party A and the loan project reach the national environmental standards, not in the list of the enterprises which have problems of energy consumption and pollution, don’t have the risk of energy consumption and pollution.

2. Party A’s commitment:

1) Party A shall submit the financial statements and other relevant information regularly, including but not limited to annual, quarterly and monthly financial reports.

2) Any counter-guarantee agreement between the guarantors and Party A will not affect the Party B’s underlying rights under this contract.

3) Cooperated in Party B’s exam and inspection on the utilization of the loan as well as Party A’s financials and operations.

4) Under circumstances Party A or Guarantor’s capability of performing the contract might be affected, Party A should notify Party B in written in time. Those circumstances included but not limited to merger, division, decrease of capital, equity transfer, investment, a substantial increase of debt financing, a major asset and credit assignment.

Party A should notify Party B in time, when the following things occurred:

A. changes of articles of association, the scope of business, registered capital and legal representative of Party A or Guarantor.

B. Any form of management mode change, including joint operation, invest and cooperate with foreigners, contract management, reorganization, restructuring, listing plan.

C. Party A is involved in major litigation or arbitration, or property or collateral is seized, detained or regulated, or set new guarantee in collateral.

D. Out of business, dissolution, liquidation, suspend business for rectification, cancellation, revocation of the business license or (be) filed for bankruptcy.

E. Shareholders, directors and senior management personnel suspected of serious cases or economic disputes.

F. Default events in other contracts.

G. Operating difficulties and financial situation has deteriorated.

(5) The repayment to Party B prior to shareholders, and is comparable to other creditors of the same kind debts.

Party A is prohibited to repay the loan to shareholders before paying off the principal and interests under the contract.

(6) If Party A fails to pay principal, interests and fees on time in the fiscal year, any form of dividends is forbidden.

(7) Party A cannot dispose of assets to reduce its debt paying ability and promises the total amount of external guarantee is not 1 time higher than its net assets, and the total amount of external guarantee and the amount of single guarantee shall not exceed the limitation set by the articles of association.

(8) Except the use agreed in this contract or agreed by Party B, Party A is prohibited to transfer the loans to other accounts or related accounts.

Party A should provide documentary proof when the loan is transferred to other accounts or related accounts.

(9) Party B has the right to call the loan advanced according to the situation of capital return of Party A.

Clause 11 disclosure of the affiliated transaction inside Party A 's group

Party A is a Group customer confirmed by Party B according to the "Commercial Bank Group guidelines for customer credit risk management business"(hereinafter referred to as “guideline”). During the credit period, Party A shall promptly report to Party B about more than 10% of net assets associated with the transaction, including but not limited to: the parties to the transaction of the association; trading program and nature of the transaction; the amount of the transaction or the corresponding ratio; pricing policies (including no amount or only nominal amounts of transactions).

Under any of the following circumstances, Party B shall have the right to unilaterally decide to suspend the unused loan and recover part or all of the principal and interest of the loan in advance: use the false contracts which are signed with affiliated parties to discount or pledge at bank and to obtain bank funds or credit with notes receivable and accounts receivable without actual trade background; the occurrence of major mergers, acquisitions and reorganization which are considered by Party B may affect the loan safety; evasion or discarding of bank debts on purpose through affiliated transactions; other circumstances stipulated in article eighteenth of "guidelines".

Clause 12 Breach of Covenants

Each of the following events and issues constitute Party A in the event of default under the contract:

1. Party A did not perform the repayment obligation under this contract;

2. Party A has not used the credit funds according to agreed purposes, or has not paid the loan by agreed way in this contract;

3. Party A’s statements in this contract are untrue or in violation with commitments made by Party A in this contract.

4. Under the circumstance defined in 2.(4) of Clause 10, Party A refused to provide additional guarantee or replacement of a new guarantor.

5. Deterioration of credit, or profitability, debt paying ability, operating ability, cash flow and other financial indicators of Party A deteriorate, breaking the contract index constraint agreed or other financial covenants.

6. Party A breaches other contracts signed with Party B or other affiliated institutions of Bank of China.

7. Guarantors breach contracts, or have default events with Party B or other affiliated institutions of Bank of China.

8. The termination of business or dissolution, revocation or bankruptcy of Party A.

9. Party A is or may be involved in major economic disputes, litigation, arbitration, or its assets were seized, detained or enforced, or investigated or punished by the judicial organ or taxation, industry and commerce administrative organs in accordance with the law, has been or may affect its ability to fulfill the obligations under this contract.

10. Abnormal change, missing, legal restriction of personal liberty and investigation by judicial authorities of Party A’s major individual investors, key management personnel, which have been or may affect Party A to fulfill the obligations under this contract.

11. Party B finds the problems which may affect the borrower or guarantor's financial situation and performance capabilities when reviewing Party A’s financial condition and performance capabilities every year (every year from the effective date of the contract);

12. Party A cannot provide materials to Party B to explain large and abnormal capital inflow and outflow in the account.

13. Party A is in violation with other rights and obligations agreed in this contract.

When any of the above situations occurred, Party B will perform the following in separate or all at the same time according to the specific situation:

1) Require Party A or Guarantor to rectify defaults within a definite time.

2) Reduce completely or partly, pause or terminate Party A’s Credit limit.

3) Pause or terminate completely or partly Party A’s business applications in this contract or in other contracts between Party A and Party B specific credit line under this contract. Pause or terminate completely or partly, or cancel or stop offering, paying and settling the unissued loans and unsettled trade financing.

4) Announce the immediate expiration on all or part of the outstanding loans, principle and interest of trade financing and other accounts payable under this contract or other contracts between Party A and Party B.

5) Terminate or release this contract, terminate or release contracts between Party A and Party B completely or partly.

6) Require compensation from Party A on the losses caused by Party A to Party B.

7) Deduct the fund from Party A’s deposit accounts to pay off the debts to Party B under this contract. All the undue funds in the accounts were considered as acceleration of maturity. If the currency in deposit account is different from the currency of Party B’s loans, the exchange rate on the date of the hold in custody will be applied.

8) Real rights of pledge will be executed.

9) Require Guarantors assume liability of guaranty.

10) Other necessary or probable procedures on Party B’s concern.

Clause 13 Rights reserved

One party does not perform part or all of the rights under this contract, nor does not require the other party to perform, undertake part or all of the obligations and responsibilities, which does not mean the abdication of the right or exemption of the obligation and responsibility. 

Any tolerance, extension or delay from one party to another party for exercising of rights under this contract does not affect the rights one party enjoys according to this contract and laws and regulations, and does not mean the abdication of the right.

Clause 14 Changes, Modification, Termination

Upon negotiation and agreed by both parties, this contract can be changed and modified by written. Any of the changes and modifications should form the inseparable part of this contract.

Unless otherwise provided for in any law or regulation or stipulated between the parties, this contract would not be terminated prior to all the rights and obligations are fulfilled.

Unless otherwise provided for in any law or regulation or stipulated between the parties, the invalidation of single terms under this contract should not affect the validation of other terms under this contract.

Clause 15 Applicable Law and Resolution for Dispute

1.      This contract is applicable to the laws of People’s Republic of China.

During the performance of this contract or in connection with all disputes relating to this contract, the two parties settled through friendly consultations. If negotiation cannot reach agreement, both parties can apply to the local people's court of Party A or other affiliated institutions of Bank of China.

Clause 16 Attachments

The Appendix hereof and the other appendix confirmed by both parties shall form an integral part of this contract, and shall be of legally equal effect with this contract.

1. Withdrawal application;

Clause 17 Other terms and conditions

1. Without Party B’s written approval, Party A is not allowed to transfer the rights and obligations under this contract to the 3rd Parties.

2. Party A should give the consent that Party B might somehow authorize other affiliated institution of Bank of China to perform the obligation. The performing party entitles all the rights and obligations under this contract, the performing party reserves the rights to appeal a resolution of dispute if necessary.

3. The contract has equivalent restrictions to the successors or inherits of both parties.

4. Unless otherwise agreed, the domicile addresses stated in this contract are for corresponding use; both parties should notify each other in writing about any changes of its domicile addresses.

5. The transactions under the contract based on independent interests. According to relevant laws, regulations and regulatory requirements, other parties of the transaction constitutes a connected party or associated persons, any party shall not seek to use this relationship to affect the fair of transaction.

6. The title and name of business in this contract is only for business purposes, will not be used for interpretation of the contract terms, the rights and obligations.

7. In accordance with the provisions of the relevant laws and regulations, supervision, Party B has the right to provide the information of this contract and other relevant information to the credit system of the people's Bank of China and other legally established credit information database, for organizations or individuals who have the appropriate qualifications to query and use.

8. If the drawdown date or the repayment date is in legal holidays, then it is delayed to the first working day after the holidays.

9. If required by the governing institutions, Party B might not be able to perform the obligations agreed in this contract, Party B has the right to stop or change the contract or its clauses, and Party B is exempted from punishment under this circumstance.

Clause 18 Effective of the contract

This contract enters into force upon the date when it is signed or sealed and affixed with official seals by the legal representatives or entrusted agents of Party A and Party B.

This contract is signed in quadruplicate, each party holds two copies, which have the equal legal effect.

/s/ [Stamp of Party A]

Signature

Sep 17, 2015

/s/ [Stamp of Party B]

Signature

Sep 17, 2015

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Item 601(b) (31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dang Yu Pan, certify that:

1. I have reviewed this quarterly report on Form10-Q of Highpower International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2015
/s/	Dang Yu Pan
By:	Dang Yu Pan
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Item 601(b) (31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Henry Sun, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Highpower International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2015

/s/ Henry Sun

Henry Sun

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Highpower International, Inc. (the “Company”) on Form 10-Q for the quarter ending September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Dang Yu Pan

Dang Yu Pan

Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

November 16, 2015

/s/ Henry Sun

Henry Sun

Chief Financial Officer

(Principal Financial and Accounting Officer)

November 16, 2015

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not filed with the Securities and Exchange Commission as part of the Form 10-Q or as a separate disclosure document and is not incorporated by reference into any filing of Highpower International, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Land use rights, net (Tables) - Land Use Right [Member]

9 Months Ended

Sep. 30, 2015

Finite-Lived Intangible Assets [Line Items]

Schedule of Land Use Rights

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Land located in Huizhou		3,381,319			3,505,921
Land located in Ganzhou		1,319,119			1,367,729
		4,700,438			4,873,650
Accumulated amortization		(618,641	)		(568,333	)
Net		4,081,797			4,305,317

Schedule of Estimated Amortization Expenses

	$
Remaining 2015	23,502
2016	94,009
2017	94,009
2018	94,009
2019	94,009
2020 and thereafter	3,682,259
	4,081,797

XML

Summary of significant accounting policies (Schedule of Depreciation Rates of Plant and Equipment) (Details)	9 Months Ended
	Sep. 30, 2015
Buildings [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	2.50%
Buildings [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	5.00%
Furniture, Fixtures and Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	20.00%
Leasehold Improvement [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	20.00%
Leasehold Improvement [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	50.00%
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	10.00%
Motor Vehicles [Member]
Property, Plant and Equipment [Line Items]
Depreciation rate	20.00%

XML

Securities Offering Transaction (Tables)

9 Months Ended

Sep. 30, 2015

Securities Offering Transaction [Abstract]

Schedule of Fair Values of Warrants

	April 17, 2014
Expected volatility		85.76	%
Risk-free interest rate		0.9	%
Expected term (in years)		3.0
Dividend rate		-
Fair value	$	2.3

	September 30, 2015			December 31, 2014
Expected volatility		84.11	%		86.4	%
Risk-free interest rate		0.55	%		0.79	%
Expected term (in years)		1.79			2.29
Dividend rate		-			-
Fair value	$	0.99		$	2.14

XML

Notes payable (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Short-term Debt [Line Items]
Outstanding notes payable	$ 34,429,238	$ 29,903,248
Trade acceptances to suppliers		$ 522,466
Springpower Technology (Shenzhen) Co., Ltd ("SZ Springpower") [Member]
Short-term Debt [Line Items]
Receivables pledged as collateral for debt	$ 377,923
Huizhou Highpower Technology Co., Ltd ("HZ HTC") [Member]
Short-term Debt [Line Items]
Receivables pledged as collateral for debt	1,015,682
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower") [Member]
Short-term Debt [Line Items]
Receivables pledged as collateral for debt	$ 157,468

XML

Restricted cash (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 12,424,799	$ 15,396,827
Securities for Bank Acceptance Bill [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	11,381,024	10,689,297
Time Deposits [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 1,043,775	$ 4,707,530

XML

Earnings per share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator:
Net income attributable to the Company	$ 1,943,345	$ 874,167	$ 3,687,111	$ 751,516
Denominator:
- Basic	15,101,679	15,052,158	15,098,479	14,632,491
- Diluted	15,148,887	15,590,142	15,367,542	15,045,776
- Basic	$ 0.13	$ 0.06	$ 0.24	$ 0.05
- Diluted	$ 0.13	$ 0.06	$ 0.24	$ 0.05
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options with a dilutive effect	1,632,239	1,655,797	1,632,239	1,655,797
Dilutive effect of options		915,796		413,286
Dilutive effect of warrants		200,000
Total dilutive effect	47,208	525,716	269,063

XML

Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-Based Compensation

Options Granted to Employees

	Number of Shares			Weighted Average Exercise  Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2014		1,105,000			2.87		8.51
Granted		-			-		-
Exercised		(200,000	)		2.41		-
Forfeited		(44,714	)		2.63		-
Canceled		(100,000	)		3.55		-
Outstanding, December 31, 2014		760,286			2.92		7.78
Exercisable, December 31, 2014		413,620			3.16		6.98

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2015		760,286			2.92		7.78
Granted		75,000			4.43		-
Exercised		(16,933	)		2.63		-
Forfeited		(18,048	)		2.63		-
Canceled		-			-		-
Outstanding, September 30, 2015		800,305			3.07		7.23
Exercisable, September 30, 2015		451,658			3.32		6.57

Schedule of Restricted Stock and RSA Award Activities

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term in Years
			$
Outstanding, January 1, 2015		98,400		2.81		0.77
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Outstanding, September 30, 2015		98,400		2.81		0.02
Expected to vest, September 30, 2015		87,441		2.81		0.02

Schedule of Fair Value of Options Granted, Weighted-Average Assumptions

Expected volatility		83.6	%
Risk-free interest rate		1.64	%
Expected term from grant date (in years)		5
Dividend rate		-
Fair value	$	1.95

XML

Restricted cash (Tables)

9 Months Ended

Sep. 30, 2015

Restricted cash [Abstract]

Summary of Restricted Cash Held by Company

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Securities for bank acceptance bill		11,381,024		10,689,297
Time deposits		1,043,775		4,707,530
		12,424,799		15,396,827

XML

Securities Offering Transaction (Details) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 17, 2014	Apr. 30, 2014	Aug. 15, 2013	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Class of Stock [Line Items]
Shares issued to investors		1,000,000
Number of shares covered by warrants		500,000
Shares issued, price per share		$ 5.05
Aggregate proceeds		$ 5,050,000
Shares covered by each warrant		0.50
Proceeds from issuance of capital stock, net		$ 4,633,164					$ 4,633,164
Warrant exercise price		$ 6.33
Warrant Liability		$ 1,173,952		$ 125,989		$ 125,989		$ 1,067,674
Value of shares issued		$ 3,459,212
Gain (loss) on change of fair value of warrant liability				$ 510,553	$ (1,286,335)	$ 941,685	$ (1,211,787)
Warrants issued to investment banker		40,000	150,000
Share-based compensation to investment banker		$ 94,982
Investor Warrants [Member]
Class of Stock [Line Items]
Expected volatility	85.76%					84.11%		86.40%
Risk-free interest rate	0.90%					0.55%		0.79%
Expected term (in years)	3 years					1 year 9 months 14 days		2 years 3 months 14 days
Dividend rate
Fair value	$ 2.3					$ 0.99		$ 2.14
Banker Warrants [Member]
Class of Stock [Line Items]
Warrant exercise price	$ 6.33

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Long-term loans (Details) ¥ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 CNY (¥)	Dec. 31, 2014 USD ($)
Debt Instrument [Line Items]
Less: current portion of long-term borrowings	$ 1,889,615		$ 1,889,615			$ 1,959,248
Long-term bank loans, net of current portion	472,404		$ 472,404			1,959,247
Bank Of China [Member]
Debt Instrument [Line Items]
Long term loan term			5 years
Long-term loans, face amount	8,198,065		$ 8,198,065		¥ 50
Debt instrument frequency of payment			Quarterly
Long term loans from Bank of China	2,362,019		$ 2,362,019			3,918,495
Less: current portion of long-term borrowings	1,889,615		1,889,615			1,959,248
Long-term bank loans, net of current portion	$ 472,404		$ 472,404			$ 1,959,247
Stated interest rate	5.50%		5.50%		5.50%
Interest rate multiple	110.00%		110.00%		110.00%
Interest on long-term loans	$ 45,649	$ 87,759	$ 170,611	$ 287,743
Percent of principle to be paid in prior year			2.00%
Percent of principle to be paid in subsequent periods			6.00%
Repayment schedule of the principal:
Remaining 2015	472,404		$ 472,404
2016	$ 1,889,615		$ 1,889,615

XML

Accounts receivable, net (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounts receivable, net [Abstract]
Allowance for doubtful accounts	$ 236		$ 1,132	$ 103
Reversal of bad debt expense		$ 163
Accounts receivable written off				$ 2,948

XML

Share-based Compensation (Schedule of Restricted Stock Awards) (Details) - Restricted Stock [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2013
Number of Shares
Outstanding, beginning balance	98,400
Granted			246,000
Exercised
Forfeited
Outstanding, ending balance	98,400	98,400
Expected to vest	87,441
Weighted Average Grant Date Fair Value
Outstanding, beginning balance	$ 2.81
Granted
Exercised
Forfeited
Outstanding, ending balance	$ 2.81	$ 2.81
Expected to vest	$ 2.81
Remaining Contractual Term in Years
Outstanding	7 days	9 months 7 days
Expected to vest	7 days

XML

Segment information (Schedule of Geographic Information about Revenues) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 37,556,826	$ 44,474,560	$ 108,330,275	$ 111,769,510
China Mainland [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	14,926,318	14,000,267	48,241,708	48,426,925
Asia, others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	13,014,689	17,678,124	35,094,329	31,942,250
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	8,430,503	10,465,002	19,996,003	23,908,064
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	934,880	2,128,707	4,275,438	6,725,849
South America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	143,795	116,227	445,368	317,928
Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	53,099	43,872	156,906	281,016
Others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 53,542	$ 42,361	$ 120,523	$ 167,478

XML

Non-controlling interest (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2014 USD ($)	Nov. 13, 2014 USD ($)	Nov. 13, 2014 CNY (¥)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	May. 15, 2013 USD ($)	May. 15, 2013 CNY (¥)	Feb. 08, 2012 USD ($)	Feb. 08, 2012 CNY (¥)
Subsidiary or Equity Method Investee [Line Items]
Additional paid-in capital	$ 11,110,723		$ 11,110,723			$ 10,530,430
Non-controlling interest	1,029,013		1,029,013			1,307,239
Net income (loss) attributable to non-controlling interest	(91,843)	$ (68,023)	(238,126)	$ (129,588)
Ganzhou Highpower Technology Company Limited [Member]
Subsidiary or Equity Method Investee [Line Items]
Additional paid-in capital							$ 6,530,825	¥ 40,000,000	$ 4,898,119	¥ 30,000,000	$ 4,807,847	¥ 30,000,000	$ 2,381,293	¥ 15,000,000
Non-controlling interest	1,029,013		1,029,013			$ 1,307,239
Net income (loss) attributable to non-controlling interest	$ (91,843)	$ (68,023)	$ (238,126)	$ (129,588)
Attributable equity interest held	70.00%		70.00%			70.00%			60.00%	60.00%	60.00%	60.00%
Equity interest held by partner						30.00%			40.00%	40.00%	40.00%	40.00%
Ganzhou Highpower Technology Company Limited [Member] | Shenzhen Highpower Technology Company Limited [Member]
Subsidiary or Equity Method Investee [Line Items]
Additional paid-in capital | ¥								¥ 10,000,000
Cash proceeds from contribution | ¥					¥ 10,000,000

XML

Segment information (Schedule of Geographic Information about Accounts Receivable) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	$ 36,175,692	$ 32,316,607
China Mainland [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	17,914,478	17,282,481
Asia, others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	9,242,073	8,662,503
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	8,305,131	5,747,058
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	548,579	296,572
South America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	91,326	211,391
Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable	$ 74,105	81,962
Others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Accounts receivable		$ 34,640

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Share-based Compensation (Schedule of Assumptions Used, Related to Non-Employees) (Details) - Non Employee Stock Option [Member]	9 Months Ended
	Sep. 30, 2014 $ / shares
Weighted Average Assumptions for Fair Values of Stock Options
Expected volatility	83.60%
Risk-free interest rate	1.64%
Expected term from grant date (in years)	5 years
Dividend rate
Fair value	$ 1.95

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Short-term loans (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Short-term Debt [Line Items]
Guaranteed and repayable within one year short-term bank loans	$ 15,167,241		$ 15,167,241		$ 15,195,040
Building pledged as collateral	12,763,232		12,763,232
Interest expenses	$ 200,914	$ 370,775	620,070	$ 1,240,334
Short-term Debt [Member]
Short-term Debt [Line Items]
Land use right pledged as collateral			$ 4,081,797
Minimum interest rate			5.75%
Maximum interest rate			6.624%

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Defined contribution plan

9 Months Ended

Sep. 30, 2015

Defined contribution plan [Abstract]

Defined contribution plan

20. Defined contribution plan

Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the PRC operating subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees' salaries. Except for pension benefits, medical care, employee housing fund and other welfare benefits mentioned above, the Company has no legal obligation for the benefits beyond the contributions made.

The total amounts for such employee benefits, which were expensed as incurred, were $1,350,972 and $1,128,544 for the nine months ended September 30, 2015 and 2014, respectively, and $524,083 and $424,841 for the three months ended September 30, 2015 and 2014, respectively.

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Segment information (Tables)

9 Months Ended

Sep. 30, 2015

Segment information [Abstract]

Schedule of Information by Segments

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
	$			$		$			$
Net sales
Ni-MH Batteries		20,123,880			22,468,264		50,658,776			57,109,202
Lithium Batteries		16,964,109			21,069,435		55,851,039			51,971,642
New Materials		468,837			936,861		1,820,460			2,688,666
Total		37,556,826			44,474,560		108,330,275			111,769,510
Cost of Sales
Ni-MH Batteries		16,889,621			17,843,761		40,455,557			45,357,950
Lithium Batteries		12,888,378			16,355,265		44,528,861			40,935,690
New Materials		562,152			870,414		2,009,708			2,410,314
Total		30,340,151			35,069,440		86,994,126			88,703,954
Gross Profit
Ni-MH Batteries		3,234,259			4,624,503		10,203,219			11,751,252
Lithium Batteries		4,075,731			4,714,170		11,322,178			11,035,952
New Materials		(93,315	)		66,447		(189,248	)		278,352
Total		7,216,675			9,405,120		21,336,149			23,065,556

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Total Assets
Ni-MH Batteries		46,515,993		50,275,286
Lithium Batteries		84,115,350		86,339,973
New Materials		11,471,242		9,538,813
Total		142,102,585		146,154,072

Schedule of Geographic Information about Revenues

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Net sales
China Mainland		14,926,318		14,000,267		48,241,708		48,426,925
Asia, others		13,014,689		17,678,124		35,094,329		31,942,250
Europe		8,430,503		10,465,002		19,996,003		23,908,064
North America		934,880		2,128,707		4,275,438		6,725,849
South America		143,795		116,227		445,368		317,928
Africa		53,099		43,872		156,906		281,016
Others		53,542		42,361		120,523		167,478
		37,556,826		44,474,560		108,330,275		111,769,510

Schedule of Geographic Information about Accounts Receivable

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Accounts receivable
China Mainland		17,914,478		17,282,481
Asia, others		9,242,073		8,662,503
Europe		8,305,131		5,747,058
North America		548,579		296,572
South America		91,326		211,391
Africa		74,105		81,962
Others		-		34,640
		36,175,692		32,316,607

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Taxation (Tables)

9 Months Ended

Sep. 30, 2015

Taxation [Abstract]

Components of Provision for Income Taxes Benefit

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Current		335,515			720,932			489,149			1,459,285
Deferred		(64,893	)		(281,273	)		(294,943	)		(830,413	)
Total		270,622			439,659			194,206	)		628,872

Reconciliation of Income Taxes Benefit (Loss) Computed at Statutory Tax Rate to Income Tax Expenses

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Income before tax		2,122,124			1,245,803			3,643,191			1,250,800
Provision for income taxes at applicable income tax rate		518,320			154,019			831,261			73,150
Effect of preferential tax rate		(220,375	)		(332,606	)		(189,125	)		(546,529	)
R&D expenses eligible for super deduction		4,494			74			(551,113	)		(71,531	)
Non-deductible expenses		14,206			43,591			41,107			124,082
Change in valuation allowance		(46,023	)		574,581			62,076			1,049,700
Effective enterprise income tax		270,622			439,659			194,206			628,872

Schedule of Deferred Tax Assets

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Tax loss carry-forward		3,970,745			3,798,290
Allowance for doubtful receivables		107,835			111,637
Allowance for inventory obsolescence		221,702			138,458
Difference for sales cut-off		48,387			20,572
Deferred income		162,034			283,111
Property, plant and equipment subsidized by government grant		241,936			100,901
Total gross deferred tax assets		4,752,639			4,452,969
Valuation allowance		(2,875,458	)		(2,805,785	)
Total net deferred tax assets		1,877,181			1,647,184

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Share-based Compensation (Schedule of Share-Based Compensation Related to Employees) (Details) - Stock Options Related to Employees [Member] - $ / shares	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Number of Shares
Outstanding, beginning balance		760,286	1,105,000	1,105,000
Granted		75,000
Exercised		(16,933)	(160,000)	(200,000)
Forfeited	(9,484)	(18,048)	(29,204)	(44,714)
Canceled				(100,000)
Outstanding, ending balance	800,305	800,305		760,286	1,105,000
Exercisable, ending balance	451,658	451,658		413,620
Weighted Average Exercise Price
Outstanding, beginning balance		$ 2.92	$ 2.87	$ 2.87
Granted		4.43
Exercised		2.63		$ 2.41
Forfeited		$ 2.63		2.63
Canceled				3.55
Outstanding, ending balance	$ 3.07	$ 3.07		2.92	$ 2.87
Exercisable, ending balance	$ 3.32	$ 3.32		$ 3.16
Remaining Contractual Term in Years
Outstanding		7 years 2 months 23 days		7 years 9 months 11 days	8 years 6 months 4 days
Exercisable, ending balance		6 years 6 months 25 days		6 years 11 months 23 days

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Inventories (Tables)

9 Months Ended

Sep. 30, 2015

Inventories [Abstract]

Schedule of Inventories

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Raw materials		4,599,155		4,341,675
Work in progress		5,071,096		3,949,778
Finished goods		11,940,131		13,685,166
Packing materials		21,490		20,137
Consumables		361,111		271,313
		21,992,983		22,268,069

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Organization and basis of presentation (Schedule of Subsidiaries and Principle Activities) (Details)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2013	May. 15, 2013
Hong Kong Highpower Technology Co., Ltd ("HKHTC") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Jul. 04, 2003
Attributable equity interest held	100.00%
Shenzhen Highpower Technology Co., Ltd ("SZ Highpower") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Oct. 08, 2002
Attributable equity interest held	100.00%
Highpower Energy Technology (Huizhou) Co., Ltd ("HZ Highpower") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Jan. 29, 2008
Attributable equity interest held	100.00%
Springpower Technology (Shenzhen) Co., Ltd ("SZ Springpower") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Jun. 04, 2008
Attributable equity interest held	100.00%
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Sep. 21, 2010
Attributable equity interest held	70.00%	70.00%	60.00%	60.00%
Icon Energy System Co., Ltd. ("ICON") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Feb. 23, 2011
Attributable equity interest held	100.00%
Huizhou Highpower Technology Co., Ltd ("HZ HTC") [Member]
Subsidiary or Equity Method Investee [Line Items]
Date of incorporation	Mar. 08, 2012
Attributable equity interest held	100.00%

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Taxation (Components of Provision for Income Taxes Expenses) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Taxation [Abstract]
Current	$ 335,515	$ 720,932	$ 489,149	$ 1,459,285
Deferred	(64,893)	(281,273)	(294,943)	(830,413)
Effective enterprise income tax	$ 270,622	$ 439,659	$ 194,206	$ 628,872

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Property, plant and equipment, net (Schedule of Plant and Equipment) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Cost
Construction in progress	$ 1,437,882	$ 715,821
Furniture, fixtures and office equipment	3,942,837	3,754,990
Leasehold improvement	4,130,174	3,763,290
Machinery and equipment	30,063,513	28,180,306
Motor vehicles	1,653,427	1,479,921
Building	24,463,867	25,414,914
Property, plant and equipment, cost	65,691,700	63,309,242
Less: accumulated depreciation	15,504,262	12,871,524
Property, plant and equipment, net	$ 50,187,438	$ 50,437,718

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Earnings per share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings per share [Abstract]

Computation of Basic and Diluted Earnings Per Common Share

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Numerator:
Net income attributable to the Company		1,943,345		874,167		3,687,111		751,516
Denominator:
Weighted-average shares outstanding
- Basic		15,101,679		15,052,158		15,098,479		14,632,491
- Diluted		15,148,887		15,590,142		15,367,542		15,045,776
Income per common share
- Basic		0.13		0.06		0.24		0.05
- Diluted		0.13		0.06		0.24		0.05

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Accounts receivable, net

9 Months Ended

Sep. 30, 2015

Accounts receivable, net [Abstract]

Accounts receivable, net

4. Accounts receivable, net

As of September 30, 2015 and December 31, 2014, accounts receivable consisted of the following:

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accounts receivable		38,652,032		34,816,914
Less: allowance for doubtful debts		2,476,340		2,500,307
		36,175,692		32,316,607

The Company recorded bad debt expense of $1,132 and $103, respectively, during the nine months ended September 30, 2015 and 2014. The Company recorded bad debt expense of $236 during the three months ended September 30, 2015, and the Company reversed bad debt expenses of $163 during the three months ended September 30, 2014. The Company wrote off accounts receivable of $nil and $2,948, respectively, in the nine months ended September 30, 2015 and 2014. The Company wrote off accounts receivable of $nil for both three months ended September 30, 2015 and 2014.

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Property, plant and equipment, net (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Depreciation expenses	$ 1,466,647	$ 1,071,176	$ 3,928,655	$ 3,051,069
Reduction of property, plant and equipment cost by realizing deferred income			976,301	$ 669,995	$ 672,675
Building pledged as collateral	12,763,232		12,763,232
Huizhou Facilities [Member]
Property, Plant and Equipment [Line Items]
Building pledged as collateral	10,011,522		10,011,522		$ 10,573,369
Ganzhou Facilities [Member]
Property, Plant and Equipment [Line Items]
Building pledged as collateral	$ 2,751,710		$ 2,751,710

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Short-term loans (Tables)

9 Months Ended

Sep. 30, 2015

Short-term loans [Abstract]

Schedule of Short-Term Loans

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Short- term bank loans guaranteed and repayable within one year		15,167,241		15,195,040

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Subsequent event

9 Months Ended

Sep. 30, 2015

Subsequent event [Abstract]

Subsequent event

24.         Subsequent event

The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent event is identified.

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Segment information

9 Months Ended

Sep. 30, 2015

Segment information [Abstract]

Segment information

23. Segment information

The reportable segments are components of the Company that offer different products and are separately managed, with separate financial information available that is separately evaluated regularly by the Company's chief operating decision maker (“CODM”), the Chief Executive Officer, in determining the performance of the business. The Company categorizes its business into three reportable segments, namely (i) Ni-MH Batteries; (ii) Lithium Batteries; and (iii) New Materials.

The CODM evaluates performance based on each reporting segment's net sales, cost of sales, gross profit and total assets. Net sales, cost of sales, gross profit and total assets by segments is set out as follows:

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
	$			$		$			$
Net sales
Ni-MH Batteries		20,123,880			22,468,264		50,658,776			57,109,202
Lithium Batteries		16,964,109			21,069,435		55,851,039			51,971,642
New Materials		468,837			936,861		1,820,460			2,688,666
Total		37,556,826			44,474,560		108,330,275			111,769,510
Cost of Sales
Ni-MH Batteries		16,889,621			17,843,761		40,455,557			45,357,950
Lithium Batteries		12,888,378			16,355,265		44,528,861			40,935,690
New Materials		562,152			870,414		2,009,708			2,410,314
Total		30,340,151			35,069,440		86,994,126			88,703,954
Gross Profit
Ni-MH Batteries		3,234,259			4,624,503		10,203,219			11,751,252
Lithium Batteries		4,075,731			4,714,170		11,322,178			11,035,952
New Materials		(93,315	)		66,447		(189,248	)		278,352
Total		7,216,675			9,405,120		21,336,149			23,065,556

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Total Assets
Ni-MH Batteries		46,515,993		50,275,286
Lithium Batteries		84,115,350		86,339,973
New Materials		11,471,242		9,538,813
Total		142,102,585		146,154,072

All long-lived assets of the Company are located in the PRC. Geographic information about the sales and accounts receivable based on the location of the Company's customers is set out as follows:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Net sales
China Mainland		14,926,318		14,000,267		48,241,708		48,426,925
Asia, others		13,014,689		17,678,124		35,094,329		31,942,250
Europe		8,430,503		10,465,002		19,996,003		23,908,064
North America		934,880		2,128,707		4,275,438		6,725,849
South America		143,795		116,227		445,368		317,928
Africa		53,099		43,872		156,906		281,016
Others		53,542		42,361		120,523		167,478
		37,556,826		44,474,560		108,330,275		111,769,510

	September 30, 2015		December 31, 2014
	(Unaudited)
	$		$
Accounts receivable
China Mainland		17,914,478		17,282,481
Asia, others		9,242,073		8,662,503
Europe		8,305,131		5,747,058
North America		548,579		296,572
South America		91,326		211,391
Africa		74,105		81,962
Others		-		34,640
		36,175,692		32,316,607

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Accounts receivable, net (Schedule of Accounts Receivable) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Accounts receivable, net [Abstract]
Accounts receivable	$ 38,652,032	$ 34,816,914
Less: allowance for doubtful debts	2,476,340	2,500,307
Accounts receivable, net	$ 36,175,692	$ 32,316,607

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Lines of credit (Tables)

9 Months Ended

Sep. 30, 2015

Lines of credit [Abstract]

Schedule of Lines of Credit

	September 30, 2015 (Unaudited)
Lender	Starting date	Maturity date		Line of credit		Unused line of credit
				$		$
Ping An Bank Co., Ltd	10/20/2014	10/19/2015	(i)		11,022,754		3,329,344
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015			4,566,570		4,566,570
Industrial Bank Co., Ltd	7/15/2015	7/15/2016			9,448,075		6,713,634
China Everbright Bank Co., Ltd	6/23/2015	6/22/2016			7,873,396		2,515,922
Bank of China	7/1/2015	6/30/2016			11,472,662		2,010,110
Bank of China	7/13/2015	9/13/2016			14,093,378		6,109,755
China Minsheng Banking Corp.,Ltd	7/16/2015	7/16/2016			4,499,083		1,962,330
Total					62,975,918		27,207,665

(i) The lines of credit from the bank is terminated at the maturity date.

	December 31, 2014
Lender	Starting date	Maturity date		Line of credit		Unused line of credit
				$		$
Bank of China	3/10/2014	3/10/2015	(ii)		12,653,474		424,823
Bank of China	7/23/2014	7/23/2015	(ii)		3,965,144		67,516
Ping An Bank Co., Ltd	10/20/2014	10/19/2015			11,428,945		295,818
China Minsheng Banking Corp., LTD	5/22/2014	5/22/2015	(ii)		3,265,413		-
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015			4,734,848		1,750,151
Industrial and Commercial Bank of China	7/26/2012	7/25/2015	(i)		6,530,826		3,918,496
China Citic Bank	6/25/2014	6/25/2015	(i)		8,046,910		6,788,093
Industrial Bank Co., Ltd	10/23/2014	10/23/2015	(iii)		6,530,825		4,430,636
Jiang Su Bank Co., Ltd	10/28/2014	9/11/2015	(i)		4,898,119		4,898,119
Total					62,054,504		22,573,652

(i)	The lines of credit from these banks are terminated at maturity dates.
(ii)	The lines of credit from these banks are rolled over after maturity dates.
(iii)	The lines of credit from Industrial Bank Co., Ltd rolled over before maturity date.

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Summary of significant accounting policies (Policy)

9 Months Ended

Sep. 30, 2015

Summary of significant accounting policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and the unaudited interim consolidated financial statements as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP), have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation. The interim financial information should be read in conjunction with the Financial Statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, previously filed with the SEC.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company's consolidated financial position as of September 30, 2015, its consolidated results of operations and cash flows for the nine months ended September 30, 2015 and 2014, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Consolidation

Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Non-controlling interests represent the equity interest in the GZ Highpower that is not attributable to the Company.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenues; the allowance for doubtful receivables; recoverability of the carrying amount of inventory; fair values of financial instruments; and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

Concentrations of credit risk

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Company reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the management of the Company considers that the Company's credit risk is significantly reduced.

No customer accounted for 10% or more of total sales during the nine months ended September 30, 2015 and 2014.

No supplier accounted for 10% or more of total purchase amount during the nine months ended September 30, 2015 and 2014.

As of September 30, 2015, there was one major customer accounted for 10% of the accounts receivable. And none of the Company's customers accounted for 10% or more of the accounts receivable as of December 31, 2014.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

Restricted cash

Restricted cash

Restricted cash include time deposits and cash security for bank acceptance bills.

Accounts receivable

Accounts receivable

Accounts receivable are stated at the original amount less an allowance for doubtful receivables, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Bad debts are written off when identified. The Company extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Company does not accrue interest on trade accounts receivable.

Notes receivable

Notes receivable

Notes receivable represent banks' acceptances that have been arranged with third-party financial institutions by certain customers to settle their purchases from us. These banks' acceptances are non-interest bearing and are collectible within six months.

Inventories

Inventories

Inventories are stated at lower of cost or market. Cost is determined using the weighted average method. Inventory includes raw materials, packing materials, consumables, work in progress and finished goods. The variable production overhead is allocated to each unit of production on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities.

Property, plant and equipment, net

Property, plant and equipment, net

Property, plant and equipment, net are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life.

Depreciation of property, plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:

Buildings	2.5% - 5	%
Furniture, fixtures and office equipment	20	%
Leasehold improvement	20 - 50	%
Machinery and equipment	10	%
Motor vehicles	20	%

Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress represents capital expenditures for direct costs of construction or acquisition and design fees incurred, and the interest expense directly related to the construction. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated.

Land use rights, net

Land use rights, net

Land use rights represent payments for the rights to use certain parcels of land for a certain period of time in the PRC. Land use rights are carried at cost and charged to expense on a straight-line basis over the period the rights are granted.

Intangible assets

Intangible assets

Intangible assets represent a royalty-bearing, non-exclusive license to use certain patents owned by an unrelated party ("License Provider") to manufacture rechargeable nickel metal hydride batteries for portable consumer applications (“Consumer Batteries”) in the PRC, and a royalty-bearing, non-exclusive worldwide license to use certain patents owned by License Provider to manufacture, sell and distribute Consumer Batteries. The value of the licenses was established based on historic acquisition costs.

An exclusive proprietary technology contributed by the four founding management members of GZ Highpower in exchange for the paid-in capital of GZ Highpower is recorded at the four management members' historical cost basis of nil.

Intangible assets are amortized over their estimated useful lives, and are reviewed annually for impairment, or more frequently, if indications of possible impairment exist.

Government grants

Government grants

Government grants are recognized when received and all the conditions for their receipt have been met.

Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets is recognized on the consolidated balance sheet as deferred income and deducted in calculating the carrying amount of the related asset. As of September 30, 2015 and December 31, 2014, the Company recorded deferred income of $1,080,230 and $1,887,409, respectively, for the government grants to purchase non-current assets.

Government grants as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related benefit are recognized as other income in the period in which they become receivable. In the nine months ended September 30, 2015 and 2014, approximately $246,442 and $292,197 of government grants were recognized as other income, respectively.

Revenue recognition

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of domestic sales contracts transfer title and risk of loss to customers upon receipt. The majority of oversea sales contracts transfer title and risk of loss to customers when goods were delivered to the carriers. Revenue is presented net of any sales tax and value added tax.

The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no incentive programs.

Cost of sales

Cost of sales

Cost of revenues consists primarily of material costs, employee compensation, depreciation and related expenses, which are directly attributable to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues.

Shipping and handling

Shipping and handling

Shipping and handling expenses are recorded as selling expenses when occurred. Shipping and handling expenses relating to sales were $767,108 and $663,069, respectively, for the nine months ended September 30, 2015 and 2014.

Research and development

Research and development

Research and development expenses include expenses directly attributable to the conduct of research and development programs, including the expenses of salaries, employee benefits, materials, supplies, and maintenance of research equipment. All expenditures associated with research and development are expensed as incurred.

Advertising

Advertising

Advertising, which generally represents the cost of promotions to create or stimulate a positive image of the Company or a desire to buy the Company's products and services, is expensed as incurred. No significant advertising expense was recorded for the nine months ended September 30, 2015 and 2014.

Share-based compensation

Share-based compensation

The Company recognizes compensation expense associated with the issuance of equity instruments to employees for their services. The fair value of the equity instruments is estimated on the date of grant and is expensed in the financial statements over the vesting period. The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and the dividend yield.

Share-based compensation associated with the issuance of equity instruments to nonemployees is measured with the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete.

Income taxes

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Uncertain tax positions

Uncertain tax positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. There were no uncertain tax positions as of September 30, 2015 and December 31, 2014.

Comprehensive income

Comprehensive income

Recognized revenue, expenses, gains and losses are included in net income or loss. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated balance sheet, such items, along with net income or loss, are components of comprehensive income or loss. The components of other comprehensive income or loss are consisted solely of foreign currency translation adjustments, net of the income tax effect.

Foreign currency translation and transactions

Foreign currency translation and transactions

Highpower's functional currency is the United States dollar ("US$"). HKHTC's functional currency is the Hong Kong dollar ("HK$"). The functional currency of the Company's subsidiaries in the PRC is the Renminbi ("RMB").

Most of the Company's oversea sales are priced and settled with US$. At the date a foreign currency transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured initially in the functional currency of the recording entity by use of the exchange rate in effect at that date. The increase or decrease in expected functional currency cash flows upon settlement of a transaction resulting from a change in exchange rates between the functional currency and the currency in which the transaction is denominated is recognized as foreign currency transaction gain or loss that is included in determining net income for the period in which the exchange rate changes. At each balance sheet date, recorded balances that are denominated in a foreign currency are adjusted to reflect the current exchange rate.

The Company's reporting currency is US$. Assets and liabilities of HKHTC and the PRC subsidiaries are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

Segment Reporting

Segment Reporting

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company's reportable segments are based on products, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Therefore, the Company categorizes its business into three reportable segments, namely (i) Ni-MH Batteries; (ii) Lithium Batteries; and (iii) New Materials.

Fair value of financial instruments

Fair value of financial instruments

The carrying values of the Company's financial instruments, including cash and cash equivalents, restricted cash, trade and other receivables, deposits, trade and other payables, and bank borrowings, approximate their fair values due to the short-term maturity of such instruments.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The Company establishes a fair value hierarchy that requires maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company measures fair value using three levels of inputs that may be used to measure fair value:

-Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

-Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

-Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Warrant Liabilities

Warrant Liabilities

For warrants that are not indexed to the Company's stock, the Company records the fair value of the issued warrants as a liability at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of operations and comprehensive loss. The fair values of these warrants have been determined using the Black-Scholes pricing model. The Black-Scholes pricing model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company.

Derivatives

Derivatives

From time to time the Company may utilize foreign currency forward contracts to reduce the impact of foreign currency exchange rate risk. Management considered that the foreign currency forwards did not meet the criteria for designated hedging instruments and hedged transactions to qualify for cash flow hedge or fair value hedge accounting. The currency forwards therefore are accounted for as derivatives, with fair value changes reported as gain (loss) of derivative instruments in the income statement.

Earnings per share

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

As of November 16, 2015, the Financial Accounting Standards Board (“FASB”) has issued ASU No. 2015-01 Income Statement-Extraordinary and Unusual Items through ASU No. 2015-16 Business Combinations, which are not expected to have a material impact on the consolidated financial statements upon adoption.

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Organization and basis of presentation (Tables)

9 Months Ended

Sep. 30, 2015

Organization and basis of presentation [Abstract]

Subsidiaries and Principal Activities

Name of company	Place and date incorporation	Attributable equity interest held			Principal activities
Hong Kong Highpower Technology Co., Ltd ("HKHTC")	Hong Kong July 4, 2003		100	%	Investment holding and marketing of batteries
Shenzhen Highpower Technology Co., Ltd ("SZ Highpower")	PRC October 8, 2002		100	%	Manufacturing & marketing of batteries
Highpower Energy Technology (Huizhou) Co., Ltd ("HZ Highpower")	PRC January 29, 2008		100	%	Dissolved
Springpower Technology (Shenzhen) Co., Ltd ("SZ Springpower")	PRC June 4, 2008		100	%	Research & manufacturing of batteries
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower")	PRC September 21, 2010		70	%	Processing, marketing and research of battery materials
Icon Energy System Co., Ltd. ("ICON")	PRC February 23, 2011		100	%	Research and production of advanced battery packs and systems
Huizhou Highpower Technology Co., Ltd ("HZ HTC")	PRC March 8, 2012		100	%	Manufacturing & marketing of batteries

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Restricted cash

9 Months Ended

Sep. 30, 2015

Restricted cash [Abstract]

Restricted cash

3. Restricted cash

As of September 30, 2015 and December 31, 2014, restricted cash consisted of the following:

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Securities for bank acceptance bill		11,381,024		10,689,297
Time deposits		1,043,775		4,707,530
		12,424,799		15,396,827

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Summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2015

Summary of significant accounting policies [Abstract]

Schedule of Depreciation Rate of Plant and Equipment

Buildings	2.5% - 5	%
Furniture, fixtures and office equipment	20	%
Leasehold improvement	20 - 50	%
Machinery and equipment	10	%
Motor vehicles	20	%

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Commitments and contingencies (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Commitments and contingencies [Abstract]
Rent expenses	$ 411,717	$ 391,109	$ 1,231,165	$ 1,183,430
Minimum [Member]
Commitments and Contingencies Disclosure [Line Items]
Lease expiration year			2015
Maximum [Member]
Commitments and Contingencies Disclosure [Line Items]
Lease expiration year			2026

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Intangible asset (Tables)

9 Months Ended

Sep. 30, 2015

Other Intangible Assets [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Intangible Assets

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Consumer battery license fee		1,000,000			1,000,000
Accumulated amortization		(437,500	)		(400,000	)
Net		562,500			600,000

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Summary of significant accounting policies (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) segments	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Deferred Revenue
Deferred income	$ 1,080,230		$ 1,887,409
Government grants recognized as other income	246,442	$ 292,197
Shipping and handling
Shipping and handling expenses	$ 767,108	$ 663,069
Segment Reporting
Number of reportable segments | segments	3

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Lines of credit (Details) - USD ($)		9 Months Ended		12 Months Ended
		Sep. 30, 2015		Dec. 31, 2014
Line of Credit Facility [Line Items]
Line of credit		$ 62,975,918		$ 62,054,504
Unused line of credit		$ 27,207,665		$ 22,573,652
Debt covenant, percentage of total net assets		20.00%
Bank of China [Member]
Line of Credit Facility [Line Items]
Starting date		Jul. 01, 2015		Mar. 10, 2014
Maturity date		Jun. 30, 2016		Mar. 10, 2015	[1]
Line of credit		$ 11,472,662		$ 12,653,474
Unused line of credit		$ 2,010,110		$ 424,823
Bank of China [Member]
Line of Credit Facility [Line Items]
Starting date		Jul. 13, 2015		Jul. 23, 2014
Maturity date		Sep. 13, 2016		Jul. 23, 2015	[1]
Line of credit		$ 14,093,378		$ 3,965,144
Unused line of credit		$ 6,109,755		$ 67,516
Ping An Bank Co., Ltd [Member]
Line of Credit Facility [Line Items]
Starting date		Oct. 20, 2014		Oct. 20, 2014
Maturity date		Oct. 19, 2015	[2]	Oct. 19, 2015
Line of credit		$ 11,022,754		$ 11,428,945
Unused line of credit		$ 3,329,344		$ 295,818
China Minsheng Banking Corp., LTD [Member]
Line of Credit Facility [Line Items]
Starting date		Jul. 16, 2015		May 22, 2014
Maturity date		Jul. 16, 2016		May 22, 2015	[1]
Line of credit		$ 4,499,083		$ 3,265,413
Unused line of credit		$ 1,962,330
Shenzhen Baoan Guiyin County Bank [Member]
Line of Credit Facility [Line Items]
Starting date		Nov. 19, 2014		Nov. 19, 2014
Maturity date		Nov. 18, 2015		Nov. 18, 2015
Line of credit		$ 4,566,570		$ 4,734,848
Unused line of credit		$ 4,566,570		$ 1,750,151
Industrial and Commercial Bank of China [Member]
Line of Credit Facility [Line Items]
Starting date				Jul. 26, 2012
Maturity date	[3]			Jul. 25, 2015
Line of credit				$ 6,530,826
Unused line of credit				$ 3,918,496
China Citic Bank [Member]
Line of Credit Facility [Line Items]
Starting date				Jun. 25, 2014
Maturity date	[3]			Jun. 25, 2015
Line of credit				$ 8,046,910
Unused line of credit				$ 6,788,093
China Everbright Bank [Member]
Line of Credit Facility [Line Items]
Starting date		Jun. 23, 2015
Maturity date		Jun. 22, 2016
Line of credit		$ 7,873,396
Unused line of credit		$ 2,515,922
Industrial Bank Co., LTD [Member]
Line of Credit Facility [Line Items]
Starting date		Jul. 15, 2015		Oct. 23, 2014
Maturity date		Jul. 15, 2016		Oct. 23, 2015	[4]
Line of credit		$ 9,448,075		$ 6,530,825
Unused line of credit		$ 6,713,634		$ 4,430,636
Jiang Su Bank Co., LTD [Member]
Line of Credit Facility [Line Items]
Starting date				Oct. 28, 2014
Maturity date	[3]			Sep. 11, 2015
Line of credit				$ 4,898,119
Unused line of credit				$ 4,898,119

[1] The lines of credit from these banks are rolled over after maturity dates.

[2] The lines of credit from the bank is terminated at the maturity date.

[3] The lines of credit from these banks are terminated at maturity dates.

[4] The lines of credit from Industrial Bank Co., Ltd rolled over before maturity date.

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CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 7,910,185	$ 14,611,892
Restricted cash	12,424,799	15,396,827
Accounts receivable, net	36,175,692	32,316,607
Notes receivable	1,902,394	621,110
Prepayments	4,243,902	3,283,520
Other receivables	743,714	665,828
Inventories	21,992,983	22,268,069
Total Current Assets	85,393,669	89,163,853
Property, plant and equipment, net	50,187,438	50,437,718
Land use right, net	4,081,797	4,305,317
Intangible asset, net	562,500	600,000
Deferred tax assets	1,877,181	1,647,184
TOTAL ASSETS	142,102,585	146,154,072
Current Liabilities:
Accounts payable	36,921,440	44,562,647
Deferred income	1,080,230	1,887,409
Short-term loan	15,167,241	15,195,040
Notes payable	34,429,238	29,903,248
Other payables and accrued liabilities	6,655,287	5,896,547
Income taxes payable	1,601,146	1,968,656
Current portion of long-term loan	1,889,615	1,959,248
Total Current Liabilities	97,744,197	101,372,795
Warrant Liability	125,989	1,067,674
Long-term loan	472,404	1,959,247
TOTAL LIABILITIES	$ 98,342,590	$ 104,399,716
COMMITMENTS AND CONTINGENCIES
Stockholders' equity
Preferred stock (Par value: $0.0001, Authorized: 10,000,000 shares, Issued and outstanding: none)
Common stock (Par value: $0.0001, Authorized: 100,000,000 shares, 15,101,679 shares issued and outstanding at September 30, 2015 and 15,084,746 shares issued and outstanding at December 31, 2014)	$ 1,510	$ 1,508
Additional paid-in capital	11,110,723	10,530,430
Statutory and other reserves	3,611,501	3,611,501
Retained earnings	24,362,131	20,675,021
Accumulated other comprehensive income	3,645,117	5,628,657
Total equity for the Company's stockholders	42,730,982	40,447,117
Non-controlling interest	1,029,013	1,307,239
TOTAL EQUITY	43,759,995	41,754,356
TOTAL LIABILITIES AND EQUITY	$ 142,102,585	$ 146,154,072

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Long-term loans (Tables)

9 Months Ended

Sep. 30, 2015

Long-term loans [Abstract]

Schedule of Long-Term Debt

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Long term loans from Bank of China		2,362,019		3,918,495
Less: current portion of long-term borrowings		1,889,615		1,959,248
Long- term bank loans, net of current portion		472,404		1,959,247

Schedule of Maturities of Long-Term Loans

	$
Remaining 2015		472,404
2016		1,889,615
		2,362,019

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Organization and basis of presentation

9 Months Ended

Sep. 30, 2015

Organization and basis of presentation [Abstract]

Organization and basis of presentation

1. Organization and basis of presentation

The consolidated financial statements include the financial statements of Highpower International, Inc. (“Highpower”) and its subsidiaries, Hong Kong Highpower Technology Company Limited (“HKHTC”), Shenzhen Highpower Technology Company Limited (“SZ Highpower”), Highpower Energy Technology (Huizhou) Company Limited (“HZ Highpower”), Springpower Technology (Shenzhen) Company Limited (“SZ Springpower”), Ganzhou Highpower Technology Company Limited (“GZ Highpower”), Icon Energy System Company Limited (“ICON”) and Huizhou Highpower Technology Company Limited ("HZ HTC"). Highpower and its subsidiaries are collectively referred to as the “Company”.

Highpower was incorporated in the State of Delaware on January 3, 2006. HKHTC was incorporated in Hong Kong on July 4, 2003. All other subsidiaries are incorporated in the People's Republic of China (“PRC”).

On May 15, 2013, GZ Highpower increased its paid-in capital from RMB15,000,000 ($2,381,293) to RMB30,000,000 ($4,807,847). SZ Highpower holds 60% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 40%. On November 13, 2014, GZ Highpower increased its paid-in capital from RMB30,000,000 ($4,898,119) to RMB40,000,000 ($6,530,825) and the additional capital of RMB10,000,000 was contributed by SZ Highpower. As of December 31, 2014, SZ Highpower holds 70% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 30%.

In April 2014, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company sold 1,000,000 shares of common stock and warrants exercisable for 500,000 shares of common stock in a registered direct offering at a price of $5.05 per fixed combination for aggregate proceeds of $5.05 million. The shares and warrants were sold in multiples of a fixed combination consisting of (i) one share of common stock and (ii) one immediately exercisable warrant to purchase 0.50 shares of common stock. The net proceeds from the offering were $4,633,164, after deducting fees due the placement agent and offering expenses.

HZ Highpower was dissolved in September 2015.

The subsidiaries of the Company and their principal activities are described as follows:

Name of company	Place and date incorporation	Attributable equity interest held			Principal activities
Hong Kong Highpower Technology Co., Ltd ("HKHTC")	Hong Kong July 4, 2003		100	%	Investment holding and marketing of batteries
Shenzhen Highpower Technology Co., Ltd ("SZ Highpower")	PRC October 8, 2002		100	%	Manufacturing & marketing of batteries
Highpower Energy Technology (Huizhou) Co., Ltd ("HZ Highpower")	PRC January 29, 2008		100	%	Dissolved
Springpower Technology (Shenzhen) Co., Ltd ("SZ Springpower")	PRC June 4, 2008		100	%	Research & manufacturing of batteries
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower")	PRC September 21, 2010		70	%	Processing, marketing and research of battery materials
Icon Energy System Co., Ltd. ("ICON")	PRC February 23, 2011		100	%	Research and production of advanced battery packs and systems
Huizhou Highpower Technology Co., Ltd ("HZ HTC")	PRC March 8, 2012		100	%	Manufacturing & marketing of batteries

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Other receivables (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Other receivables [Abstract]
Compensation receivable for land occupation	$ 498,065	$ 516,418
Others	245,649	149,410
Total Other receivables	$ 743,714	$ 665,828

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Prepayments (Tables)

9 Months Ended

Sep. 30, 2015

Prepayments [Abstract]

Schedule of Prepayments

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Purchase deposits paid		2,138,835		1,793,599
Value-added tax prepayment		401,239		384,008
Rental deposit		424,533		266,556
Deferred insurance fee		117,019		97,005
Advances to staff for operations		244,635		122,452
Other deposits and prepayments		917,641		619,900
		4,243,902		3,283,520

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Intangible asset (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Intangible asset, net	$ 562,500		$ 562,500		$ 600,000
Consumer Battery License Fee [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,000,000		1,000,000		1,000,000
Accumulated amortization	(437,500)		(437,500)		(400,000)
Intangible asset, net	562,500		$ 562,500		$ 600,000
Consumer battery license fee			20 years
Amortization expenses	12,500	$ 12,500	$ 37,500	$ 37,500
Proprietary Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 0		$ 0

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Share-based Compensation

9 Months Ended

Sep. 30, 2015

Share-based Compensation [Abstract]

Share-based Compensation

17. Share-based Compensation

The 2008 Omnibus Incentive Plan 

The 2008 Omnibus Incentive Plan (the "2008 Plan") was approved by the Company's Board of Directors on October 29, 2008 to be effective at such date, subject to approval of the Company's stockholders, which occurred on December 11, 2008. The 2008 Plan has a ten year term. The 2008 Plan reserves two million shares of common stock for issuance, subject to adjustment in the event of a recapitalization in accordance with the terms of the 2008 Plan.

The 2008 Plan authorizes the issuance of awards including stock options, restricted stock units (RSUs), restricted stock, unrestricted stock, stock appreciation rights (SARs) and other equity and/or cash performance incentive awards to employees, directors, and consultants of the Company. Subject to certain restrictions, the Compensation Committee of the Board of Directors has broad discretion to establish the terms and conditions for awards under the 2008 Plan, including the number of shares, vesting conditions and the required service or performance criteria. Options and SARs may have a contractual term of up to ten years and generally vest over three to five years with an exercise price equal to the fair market value on the date of grant. Incentive stock options (ISOs) granted must have an exercise price equal to or greater than the fair market value of the Company's common stock on the date of grant. Repricing of stock options and SARs is permitted without stockholder approval. If a particular award agreement so provides, certain change in control transactions may cause such awards granted under the 2008 Plan to vest at an accelerated rate, unless the awards are continued or substituted for in connection with the transaction. As of September 30, 2015, approximately 569,762 shares of common stock remained available for issuance pursuant to awards granted under the 2008 Plan.

Options Granted to Employees

	Number of Shares			Weighted Average Exercise  Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2014		1,105,000			2.87		8.51
Granted		-			-		-
Exercised		(200,000	)		2.41		-
Forfeited		(44,714	)		2.63		-
Canceled		(100,000	)		3.55		-
Outstanding, December 31, 2014		760,286			2.92		7.78
Exercisable, December 31, 2014		413,620			3.16		6.98

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2015		760,286			2.92		7.78
Granted		75,000			4.43		-
Exercised		(16,933	)		2.63		-
Forfeited		(18,048	)		2.63		-
Canceled		-			-		-
Outstanding, September 30, 2015		800,305			3.07		7.23
Exercisable, September 30, 2015		451,658			3.32		6.57

The aggregate intrinsic value of options vested and expected to vest as of September 30, 2015 and December 31, 2014 was approximately $7,000 and $1.4 million, respectively. Intrinsic value is calculated as the amount by which the current market value of a share of common stock exceeds the exercise price multiplied by the number of option shares. 

During the nine months ended September 30, 2015, the Company granted options to purchase 75,000 shares to two employees. Nine employees exercised their option to purchase 16,933 shares of the Company's common stock. During the nine months ended September 30, 2015, three employees had resigned and their options to purchase a total of 18,048 shares of the Company's common stock were forfeited. These employees had resigned with 3,670 shares vested, which if not exercised with 90 days after termination they will be cancelled. These vested shares were exercised in the period.

During the three months ended September 30, 2015, there were no option grants or option exercises. One employee resigned and their options to purchase a total of 9,484 shares of the Company's common stock were forfeited.

During the nine months ended September 30, 2014, the Company did not grant any new options to employees. One employee exercised his options to purchase 160,000 shares of the Company's common stock. As a result, the Company issued 74,052 shares of common stock to this employee by net share settlement. Two employees resigned and their options to purchase a total of 29,204 shares of the Company's common stock were forfeited.

The estimated fair value of share-based compensation to employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award.

Restricted Stock Awards Granted to Employees

During the year ended December 31, 2013 the Company granted 246,000 shares of restricted stock to members of the Board of Directors as Restricted Stock Awards (“RSA”) under the 2008 Plan. The RSAs granted in 2013 had the following vesting periods; 30% immediately upon grant, 30% vest on first anniversary of the grant date, and 40% vest on the second anniversary of grant date. The RSAs are governed by agreements between the Company and recipients of the awards. Terms of the agreements are determined by the Compensation Committee. There were no RSAs granted to employees during the nine months ended September 30, 2015 and 2014.

The following table summarizes the restricted stock awards activities for the nine months ended September 30, 2015:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term in Years
			$
Outstanding, January 1, 2015		98,400		2.81		0.77
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Outstanding, September 30, 2015		98,400		2.81		0.02
Expected to vest, September 30, 2015		87,441		2.81		0.02

Share-based Compensation to Nonemployees

On July 15, 2013, the Company entered into an agreement with a consulting firm. In return for the consulting firm's financial advisory service in the coming two years, the Company issued an aggregate of 150,000 shares of the Company's common stock to the consulting firm on August 15, 2013. The shares were fully vested upon issuance and the fair value of the shares was $171,000 which was based on the closing market price of the Company's common stock on August 15, 2013. The share-based compensation was being amortized over the consulting service period. In the second quarter of 2014, the service agreement was terminated.

The Company also agreed to issue another 150,000 shares of the Company's common stock to the consulting firm after a specific financing target is completed. As the financing target was not achieved before the termination of the service agreement in the second quarter of 2014, such 150,000 shares of common stock was not issued to the consulting firm.

Also, in connection with this consulting agreement, on January 17, 2014 the Company issued five year warrants to purchase 200,000 shares of the Company's common stock. The shares were fully vested upon issuance and the aggregate fair value of the warrants was approximately $390,000, which was calculated using the Black-Scholes pricing model, with the following weighted-average assumptions:

Expected volatility		83.6	%
Risk-free interest rate		1.64	%
Expected term from grant date (in years)		5
Dividend rate		-
Fair value	$	1.95

Expected Term

The expected term of the warrants issued during the nine months ended September 30, 2014, represents the remaining contractual term of the warrants.

Expected Volatility

The expected volatility used for the nine-month period ended September 30, 2014 is based upon the Company's own trading history.

Risk-Free Interest Rate

The risk-free interest rate assumption is based on U.S. Treasury instruments with a term consistent with the remaining contractual term of the warrants issued during the first three quarters of 2014.

Dividend Yield

The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

Forfeitures

The Company estimates forfeitures at the time of grant and revises the estimates in subsequent periods if actual forfeitures differ from what was estimated. The forfeiture rate is applied to stock options and restricted stock awards. The Company uses historical data to estimate pre-vesting forfeitures and records stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a ratable basis over the requisite service periods of the awards, which are generally the vesting periods. The Company records stock-based compensation expense only for those awards that are expected to vest.

Total Share-based Compensation Expenses

As of September 30, 2015, the gross amount of unrecognized share-based compensation expense relating to unvested share-based awards held by employees was approximately $0.4 million, which the Company anticipates recognizing as a charge against income over a weighted average period of 1.26 years.

In connection with the grant of stock options, restricted stock awards and warrants to employees and nonemployees, the Company recorded stock-based compensation charges of $535,761 and $nil, respectively, for the nine-month period ended September 30, 2015, and $543,369 and $521,599, respectively, for the nine-month period ended September 30, 2014. The Company recorded stock-based compensation charges of $123,457 and $nil, respectively, for the three-month period ended September 30, 2015 and stock-based compensation charges of $148,725 and $nil, respectively, for the three-month period ended September 30, 2014.

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Other receivables (Tables)

9 Months Ended

Sep. 30, 2015

Other receivables [Abstract]

Schedule of Other Receivables

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Compensation receivable for land occupation		498,065		516,418
Others		245,649		149,410
		743,714		665,828

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Securities Offering Transaction

9 Months Ended

Sep. 30, 2015

Securities Offering Transaction [Abstract]

Securities Offering Transaction

19. Securities Offering Transaction

In April 2014, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company sold 1,000,000 shares of common stock and warrants exercisable for 500,000 shares of common stock in a registered direct offering at a price of $5.05 per fixed combination for aggregate proceeds of $5.05 million. The shares and warrants were sold in multiples of a fixed combination consisting of (i) one share of common stock and (ii) one immediately exercisable warrant to purchase 0.50 shares of common stock. The net proceeds from the offering were $4,633,164, after deducting fees due the placement agent and offering expenses.

The warrants have an initial exercise price of $6.33 per share and are exercisable until April 17, 2017. The exercise price of the warrants, and in some cases the number of shares issuable upon exercise of the warrants, will be subject to appropriate adjustment in relation to certain events. In addition, if the Company issues shares in the future at a price below $6.33 per share, the exercise price of the warrants will be reduced to such lower price. No adjustment will be made to the number of shares purchasable in such event.

The warrants were classified as a liability. The aggregate fair value of the warrant liability at issuance dates was $1,173,952. The residual balance of $3,459,212 was allocated to common shares issued.

The fair values of the warrants as of April 17, 2014 were calculated using the Black-Scholes pricing model with the following assumptions:

	April 17, 2014
Expected volatility		85.76	%
Risk-free interest rate		0.9	%
Expected term (in years)		3.0
Dividend rate		-
Fair value	$	2.3

The fair value of the investor warrant liability will be re-measured at each period and recorded as a gain or loss on fair value of warrant liability. As of September 30, 2015 and December 31, 2014, the fair value of warrant liability was $125,989 and $1,067,674, respectively. The Company recognized a gain of $941,685 and a loss of $1,211,787 on the change of fair value of warrant liability for the nine months ended September 30, 2015 and 2014. The Company recognized a gain of $510,553 and a loss of $1,286,335 on the change of fair value of warrant liability for the three months ended September 30, 2015 and 2014, respectively.

The fair values of the warrants as of September 30, 2015 and December 31, 2014 were calculated using the Black-Scholes pricing model with the following assumptions:

	September 30, 2015			December 31, 2014
Expected volatility		84.11	%		86.4	%
Risk-free interest rate		0.55	%		0.79	%
Expected term (in years)		1.79			2.29
Dividend rate		-			-
Fair value	$	0.99		$	2.14

In conjunction with the securities offering transaction, the Company issued three year warrants to investment bankers to purchase 40,000 shares of the Company's common stock at $6.33 per share. The aggregate fair value of the warrants was $94,982, which was recognized as a share-based compensation and resulted in an increase of additional paid-in capital. As such compensation was offering cost, it resulted in a reduction in additional paid-in capital. Hence, such transaction has no net impact on the Company's financial position as of September 30, 2015.

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Taxation (Reconciliation of Income Tax Expense Computed at Statutory Tax Rate to Income Tax Expenses) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Taxation [Abstract]
Income before tax	$ 2,122,124	$ 1,245,803	$ 3,643,191	$ 1,250,800
Provision for income taxes at applicable income tax rate	518,320	154,019	831,261	73,150
Effect of preferential tax rate	(220,375)	(332,606)	(189,125)	(546,529)
R&D expenses eligible for super deduction	4,494	74	(551,113)	(71,531)
Non-deductible expenses	14,206	43,591	41,107	124,082
Change in valuation allowance	(46,023)	574,581	62,076	1,049,700
Effective enterprise income tax	$ 270,622	$ 439,659	$ 194,206	$ 628,872

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2015

Summary of significant accounting policies [Abstract]

Summary of significant accounting policies

2. Summary of significant accounting policies

Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and the unaudited interim consolidated financial statements as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP), have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation. The interim financial information should be read in conjunction with the Financial Statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, previously filed with the SEC.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company's consolidated financial position as of September 30, 2015, its consolidated results of operations and cash flows for the nine months ended September 30, 2015 and 2014, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Non-controlling interests represent the equity interest in the GZ Highpower that is not attributable to the Company.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenues; the allowance for doubtful receivables; recoverability of the carrying amount of inventory; fair values of financial instruments; and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Company reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the management of the Company considers that the Company's credit risk is significantly reduced.

No customer accounted for 10% or more of total sales during the nine months ended September 30, 2015 and 2014.

No supplier accounted for 10% or more of total purchase amount during the nine months ended September 30, 2015 and 2014.

As of September 30, 2015, there was one major customer accounted for 10% of the accounts receivable. And none of the Company's customers accounted for 10% or more of the accounts receivable as of December 31, 2014.

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other liquid investments with initial maturities of three months or less.

Restricted cash

Restricted cash include time deposits and cash security for bank acceptance bills.

Accounts receivable

Accounts receivable are stated at the original amount less an allowance for doubtful receivables, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Bad debts are written off when identified. The Company extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Company does not accrue interest on trade accounts receivable.

Notes receivable

Notes receivable represent banks' acceptances that have been arranged with third-party financial institutions by certain customers to settle their purchases from us. These banks' acceptances are non-interest bearing and are collectible within six months.

Inventories

Inventories are stated at lower of cost or market. Cost is determined using the weighted average method. Inventory includes raw materials, packing materials, consumables, work in progress and finished goods. The variable production overhead is allocated to each unit of production on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities.

Property, plant and equipment, net

Property, plant and equipment, net are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life.

Depreciation of property, plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:

Buildings	2.5% - 5	%
Furniture, fixtures and office equipment	20	%
Leasehold improvement	20 - 50	%
Machinery and equipment	10	%
Motor vehicles	20	%

Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress represents capital expenditures for direct costs of construction or acquisition and design fees incurred, and the interest expense directly related to the construction. Capitalization of these costs ceases and the construction in progress is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Construction in progress is not depreciated.

Land use rights, net

Land use rights represent payments for the rights to use certain parcels of land for a certain period of time in the PRC. Land use rights are carried at cost and charged to expense on a straight-line basis over the period the rights are granted.

Intangible assets

Intangible assets represent a royalty-bearing, non-exclusive license to use certain patents owned by an unrelated party ("License Provider") to manufacture rechargeable nickel metal hydride batteries for portable consumer applications (“Consumer Batteries”) in the PRC, and a royalty-bearing, non-exclusive worldwide license to use certain patents owned by License Provider to manufacture, sell and distribute Consumer Batteries. The value of the licenses was established based on historic acquisition costs.

An exclusive proprietary technology contributed by the four founding management members of GZ Highpower in exchange for the paid-in capital of GZ Highpower is recorded at the four management members' historical cost basis of nil.

Intangible assets are amortized over their estimated useful lives, and are reviewed annually for impairment, or more frequently, if indications of possible impairment exist.

Government grants

Government grants are recognized when received and all the conditions for their receipt have been met.

Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets is recognized on the consolidated balance sheet as deferred income and deducted in calculating the carrying amount of the related asset. As of September 30, 2015 and December 31, 2014, the Company recorded deferred income of $1,080,230 and $1,887,409, respectively, for the government grants to purchase non-current assets.

Government grants as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related benefit are recognized as other income in the period in which they become receivable. In the nine months ended September 30, 2015 and 2014, approximately $246,442 and $292,197 of government grants were recognized as other income, respectively.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, delivery of the product has occurred, title and risk of loss have transferred to the customers and collectability of the receivable is reasonably assured. The majority of domestic sales contracts transfer title and risk of loss to customers upon receipt. The majority of oversea sales contracts transfer title and risk of loss to customers when goods were delivered to the carriers. Revenue is presented net of any sales tax and value added tax.

The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to product resale by customers. The Company has no incentive programs.

Cost of sales

Cost of revenues consists primarily of material costs, employee compensation, depreciation and related expenses, which are directly attributable to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues.

Shipping and handling

Shipping and handling expenses are recorded as selling expenses when occurred. Shipping and handling expenses relating to sales were $767,108 and $663,069, respectively, for the nine months ended September 30, 2015 and 2014.

Research and development

Research and development expenses include expenses directly attributable to the conduct of research and development programs, including the expenses of salaries, employee benefits, materials, supplies, and maintenance of research equipment. All expenditures associated with research and development are expensed as incurred.

Advertising

Advertising, which generally represents the cost of promotions to create or stimulate a positive image of the Company or a desire to buy the Company's products and services, is expensed as incurred. No significant advertising expense was recorded for the nine months ended September 30, 2015 and 2014.

Share-based compensation

The Company recognizes compensation expense associated with the issuance of equity instruments to employees for their services. The fair value of the equity instruments is estimated on the date of grant and is expensed in the financial statements over the vesting period. The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and the dividend yield.

Share-based compensation associated with the issuance of equity instruments to nonemployees is measured with the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete.

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Uncertain tax positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. There were no uncertain tax positions as of September 30, 2015 and December 31, 2014.

Comprehensive income

Recognized revenue, expenses, gains and losses are included in net income or loss. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated balance sheet, such items, along with net income or loss, are components of comprehensive income or loss. The components of other comprehensive income or loss are consisted solely of foreign currency translation adjustments, net of the income tax effect.

Foreign currency translation and transactions

Highpower's functional currency is the United States dollar ("US$"). HKHTC's functional currency is the Hong Kong dollar ("HK$"). The functional currency of the Company's subsidiaries in the PRC is the Renminbi ("RMB").

Most of the Company's oversea sales are priced and settled with US$. At the date a foreign currency transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured initially in the functional currency of the recording entity by use of the exchange rate in effect at that date. The increase or decrease in expected functional currency cash flows upon settlement of a transaction resulting from a change in exchange rates between the functional currency and the currency in which the transaction is denominated is recognized as foreign currency transaction gain or loss that is included in determining net income for the period in which the exchange rate changes. At each balance sheet date, recorded balances that are denominated in a foreign currency are adjusted to reflect the current exchange rate.

The Company's reporting currency is US$. Assets and liabilities of HKHTC and the PRC subsidiaries are translated at the current exchange rate at the balance sheet dates, revenues and expenses are translated at the average exchange rates during the reporting periods, and equity accounts are translated at historical rates. Translation adjustments are reported in other comprehensive income.

Segment Reporting

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company's reportable segments are based on products, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Therefore, the Company categorizes its business into three reportable segments, namely (i) Ni-MH Batteries; (ii) Lithium Batteries; and (iii) New Materials.

Fair value of financial instruments

The carrying values of the Company's financial instruments, including cash and cash equivalents, restricted cash, trade and other receivables, deposits, trade and other payables, and bank borrowings, approximate their fair values due to the short-term maturity of such instruments.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The Company establishes a fair value hierarchy that requires maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company measures fair value using three levels of inputs that may be used to measure fair value:

-Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

-Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

-Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Warrant Liabilities

For warrants that are not indexed to the Company's stock, the Company records the fair value of the issued warrants as a liability at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of operations and comprehensive loss. The fair values of these warrants have been determined using the Black-Scholes pricing model. The Black-Scholes pricing model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company.

Derivatives

From time to time the Company may utilize foreign currency forward contracts to reduce the impact of foreign currency exchange rate risk. Management considered that the foreign currency forwards did not meet the criteria for designated hedging instruments and hedged transactions to qualify for cash flow hedge or fair value hedge accounting. The currency forwards therefore are accounted for as derivatives, with fair value changes reported as gain (loss) of derivative instruments in the income statement.

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive.

Recently issued accounting pronouncements

As of November 16, 2015, the Financial Accounting Standards Board (“FASB”) has issued ASU No. 2015-01 Income Statement-Extraordinary and Unusual Items through ASU No. 2015-16 Business Combinations, which are not expected to have a material impact on the consolidated financial statements upon adoption.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS [Abstract]
Preferred Stock, par value per share	$ 0.0001	$ 0.0001
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value per share	$ 0.0001	$ 0.0001
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	15,101,679	15,084,746
Common Stock, shares outstanding	15,101,679	15,084,746

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Taxation

9 Months Ended

Sep. 30, 2015

Taxation [Abstract]

Taxation

12. Taxation

The Company and its subsidiaries file tax returns separately.

1) VAT

Pursuant to the Provisional Regulation of the PRC on VAT and the related implementing rules, all entities and individuals ("taxpayers") that are engaged in the sale of products in the PRC are generally required to pay VAT at a rate of 17% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayers. Further, when exporting goods, the exporter is entitled to a portion of or all the refund of VAT that it has already paid or incurred. The Company's PRC subsidiaries are subject to VAT at 17% of their revenues.

2) Income tax

United States

Highpower was incorporated in Delaware and is subject to U.S. federal income tax with a system of graduated tax rates ranging from 15% to 35%. As Highpower does not conduct any business in the U.S. or Delaware, it is not subject to U.S. or Delaware state corporate income tax. No deferred U.S. taxes are recorded since all accumulated profits in the PRC will be permanently reinvested in the PRC.

Hong Kong

HKHTC, which is incorporated in Hong Kong, is subject to a corporate income tax rate of 16.5%.

PRC

In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income.

In China, the companies granted with National High-tech Enterprise (“NHTE”) status enjoy 15% income tax rate. This status needs to be renewed every three years. In 2008, SZ Highpower received NHTE status, which was renewed in 2011 and recently renewed in 2014. In 2013, SZ Springpower received NHTE status. In 2014, both GZ Highpower and ICON received NHTE status. If these subsidiaries fail to renew NHTE status, they will be subject to income tax at a rate of 25% after the expiration of NHTE status.

All the other PRC subsidiaries are not entitled to any tax holiday. They were subject to income tax at a rate of 25% for calendar years 2015 and 2014.

The components of the provision for income taxes expenses are:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Current		335,515			720,932			489,149			1,459,285
Deferred		(64,893	)		(281,273	)		(294,943	)		(830,413	)
Total		270,622			439,659			194,206	)		628,872

The reconciliation of income tax expense computed at the statutory tax rate applicable to the Company to income tax expense is as follows:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Income before tax		2,122,124			1,245,803			3,643,191			1,250,800
Provision for income taxes at applicable income tax rate		518,320			154,019			831,261			73,150
Effect of preferential tax rate		(220,375	)		(332,606	)		(189,125	)		(546,529	)
R&D expenses eligible for super deduction		4,494			74			(551,113	)		(71,531	)
Non-deductible expenses		14,206			43,591			41,107			124,082
Change in valuation allowance		(46,023	)		574,581			62,076			1,049,700
Effective enterprise income tax		270,622			439,659			194,206			628,872

3) Deferred tax assets

Deferred tax assets and deferred tax liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference.

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Tax loss carry-forward		3,970,745			3,798,290
Allowance for doubtful receivables		107,835			111,637
Allowance for inventory obsolescence		221,702			138,458
Difference for sales cut-off		48,387			20,572
Deferred income		162,034			283,111
Property, plant and equipment subsidized by government grant		241,936			100,901
Total gross deferred tax assets		4,752,639			4,452,969
Valuation allowance		(2,875,458	)		(2,805,785	)
Total net deferred tax assets		1,877,181			1,647,184

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 16, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Entity Registrant Name	Highpower International, Inc.
Entity Central Index Key	0001368308
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,101,679
Trading Symbol	HPJ

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Notes payable

9 Months Ended

Sep. 30, 2015

Notes payable [Abstract]

Notes payable

13. Notes payable

Notes payable are presented to certain suppliers as a payment against the outstanding trade payables.

Notes payable are mainly bank guarantee promissory notes which are non-interest bearing and generally mature within six months. The outstanding bank guarantee promissory notes are secured by restricted cash deposited in banks and $377,923 notes receivable of Springpower, $1,015,682 note receivable of HZ HTC, and $157,468 note receivable of GZ Highpower. Outstanding notes payable were $34,429,238 and $29,903,248 as of September 30, 2015 and December 31, 2014, respectively.

As of September 30, 2015, the Company issued $nil trade acceptances to suppliers. These trade acceptances are non-interest bearing and mature within six months. No security deposit is needed. The trade acceptance as of December 31, 2014 was $522,466.

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Defined contribution plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Defined contribution plan [Abstract]
Contributions to employee benefits plan	$ 524,083	$ 424,841	$ 1,350,972	$ 1,128,544

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract]
Net sales	$ 37,556,826	$ 44,474,560	$ 108,330,275	$ 111,769,510
Cost of sales	(30,340,151)	(35,069,440)	(86,994,126)	(88,703,954)
Gross profit	7,216,675	9,405,120	21,336,149	23,065,556
Research and development expenses	(1,963,690)	(2,056,045)	(5,635,308)	(5,844,962)
Selling and distribution expenses	(1,712,303)	(1,697,674)	(5,108,589)	(4,822,560)
General and administrative expenses	(3,295,815)	(3,295,262)	(9,744,336)	(10,178,838)
Foreign currency transaction gain (loss)	$ 1,458,363	(15,369)	$ 1,902,220	334,326
Gain (loss) on derivative instruments		59,785		(56,349)
Total operating expenses	$ (5,513,445)	(7,004,565)	$ (18,586,013)	(20,568,383)
Income from operations	1,703,230	2,400,555	2,750,136	2,497,173
Gain (loss) on change of fair value of warrant liability	510,553	(1,286,335)	941,685	(1,211,787)
Other income	154,904	590,117	742,051	1,493,491
Interest expenses	(246,563)	(458,534)	(790,681)	(1,528,077)
Income before taxes	2,122,124	1,245,803	3,643,191	1,250,800
Income taxes expenses	(270,622)	(439,659)	(194,206)	(628,872)
Net income	1,851,502	806,144	3,448,985	621,928
Less: net loss attributable to non-controlling interest	(91,843)	(68,023)	(238,126)	(129,588)
Net income attributable to the Company	1,943,345	874,167	3,687,111	751,516
Comprehensive income
Net income	1,851,502	806,144	3,448,985	621,928
Foreign currency translation (loss) income	(2,024,906)	19,368	(2,023,640)	(341,754)
Comprehensive (loss) income	(173,404)	825,512	1,425,345	280,174
Less: comprehensive loss attributable to non-controlling interest	(133,677)	(67,486)	(278,226)	(140,213)
Comprehensive (loss) income attributable to the Company	$ (39,727)	$ 892,998	$ 1,703,571	$ 420,387
Income per share of common stock attributable to the Company
- Basic	$ 0.13	$ 0.06	$ 0.24	$ 0.05
- Diluted	$ 0.13	$ 0.06	$ 0.24	$ 0.05
Weighted average number of common stock outstanding
- Basic	15,101,679	15,052,158	15,098,479	14,632,491
- Diluted	15,148,887	15,590,142	15,367,542	15,045,776

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Inventories

9 Months Ended

Sep. 30, 2015

Inventories [Abstract]

Inventories

7. Inventories

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Raw materials		4,599,155		4,341,675
Work in progress		5,071,096		3,949,778
Finished goods		11,940,131		13,685,166
Packing materials		21,490		20,137
Consumables		361,111		271,313
		21,992,983		22,268,069

Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes. The Company wrote down inventory of $333,672 and $586,748, in the nine months ended September 30, 2015 and 2014. The Company wrote off inventory of $57,876 and wrote down inventory of $381,876 for three months ended September 30, 2015 and 2014, respectively.

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Other receivables

9 Months Ended

Sep. 30, 2015

Other receivables [Abstract]

Other receivables

6. Other receivables

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Compensation receivable for land occupation		498,065		516,418
Others		245,649		149,410
		743,714		665,828

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Earnings per share

9 Months Ended

Sep. 30, 2015

Earnings per share [Abstract]

Earnings per share

18. Earnings per share

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock outstanding that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, restricted shares. The dilutive effect of potential dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company's common stock can result in a greater dilutive effect from potentially dilutive securities. The Company excludes potential common stock in the diluted EPS computation in periods of losses from continuing operations, as their effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended September 30, 2015 and 2014, and the nine months ended September 30, 2015 and 2014.

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Numerator:
Net income attributable to the Company		1,943,345		874,167		3,687,111		751,516
Denominator:
Weighted-average shares outstanding
- Basic		15,101,679		15,052,158		15,098,479		14,632,491
- Diluted		15,148,887		15,590,142		15,367,542		15,045,776
Income per common share
- Basic		0.13		0.06		0.24		0.05
- Diluted		0.13		0.06		0.24		0.05

Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

1,632,239 options and warrants outstanding with a total dilutive effect of 269,063 shares were included in the computation of diluted EPS for the nine months ended September 30, 2015. 1,655,797 options and warrants outstanding with a total dilutive effect of 413,286 shares were included in the computation of diluted EPS for the nine months ended September 30, 2014.

1,632,239 options and warrants outstanding with a total dilutive effect of 47,208 shares were included in the computation of diluted EPS for the three months ended September 30, 2015. There were 915,796 shares of stock options and 200,000 shares of warrants with a total dilutive effect of 525,716 shares, which included in the computation of diluted EPS for the three months ended September 30, 2014.

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Short-term loans

9 Months Ended

Sep. 30, 2015

Short-term loans [Abstract]

Short-term loans

14. Short-term loans

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Short- term bank loans guaranteed and repayable within one year		15,167,241		15,195,040

As of September 30, 2015, the above bank borrowings were for working capital and capital expenditure purposes and were secured by personal guarantees executed by certain directors of the Company, a land use right with a carrying amount of $4,081,797, and the building with a carrying amount of $12,763,232.

The loans as of September 30, 2015 were primarily obtained from 8 banks with interest rates ranging from 5.75% to 6.624% per annum. The interest expenses were $620,070 and $1,240,334 for the nine months ended September 30, 2015 and 2014, respectively, and $200,914 and $370,775 for the three months ended September 30, 2015 and 2014, respectively.

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Segment information (Schedule of Segment Information about Revenues) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Net sales	$ 37,556,826	$ 44,474,560	$ 108,330,275	$ 111,769,510
Cost of Sales	30,340,151	35,069,440	86,994,126	88,703,954
Gross profit	7,216,675	9,405,120	21,336,149	23,065,556
Ni-MH Batteries [Member]
Segment Reporting Information [Line Items]
Net sales	20,123,880	22,468,264	50,658,776	57,109,202
Cost of Sales	16,889,621	17,843,761	40,455,557	45,357,950
Gross profit	3,234,259	4,624,503	10,203,219	11,751,252
Lithium Batteries [Member]
Segment Reporting Information [Line Items]
Net sales	16,964,109	21,069,435	55,851,039	51,971,642
Cost of Sales	12,888,378	16,355,265	44,528,861	40,935,690
Gross profit	4,075,731	4,714,170	11,322,178	11,035,952
New Materials [Member]
Segment Reporting Information [Line Items]
Net sales	468,837	936,861	1,820,460	2,688,666
Cost of Sales	562,152	870,414	2,009,708	2,410,314
Gross profit	$ (93,315)	$ 66,447	$ (189,248)	$ 278,352

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Intangible asset

9 Months Ended

Sep. 30, 2015

Intangible asset [Abstract]

Intangible asset

10. Intangible asset

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Consumer battery license fee		1,000,000			1,000,000
Accumulated amortization		(437,500	)		(400,000	)
Net		562,500			600,000

The Company is amortizing the $1,000,000 cost of the Consumer Battery License Agreement with License Provider over a period of 20 years on the straight line basis over the estimated useful life of the underlying technology, which is based on the Company's assessment of existing battery technology, current trends in the battery business, potential developments and improvements, and the Company's current business plan.

As of September 30, 2015 and December 31, 2014, the Company had an exclusive proprietary technology with historical cost of zero but still in use. The exclusive proprietary technology was contributed by four founding management members of GZ Highpower in exchange for the paid-in capital of GZ Highpower. The historical cost basis was recorded at $nil at the four management members' historical cost basis.

Amortization expenses included in research and development expenses were $37,500 for the nine months ended September 30, 2015 and 2014, and $12,500 for the three months ended September 30, 2015 and 2014.

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Inventories (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Inventories [Abstract]
Raw materials	$ 4,599,155		$ 4,599,155		$ 4,341,675
Work in progress	5,071,096		5,071,096		3,949,778
Finished goods	11,940,131		11,940,131		13,685,166
Packing materials	21,490		21,490		20,137
Consumables	361,111		361,111		271,313
Inventories	21,992,983		21,992,983		$ 22,268,069
Write down for inventories	$ 57,876	$ 381,876	$ 333,672	$ 586,748

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Property, plant and equipment, net

9 Months Ended

Sep. 30, 2015

Property, plant and equipment, net [Abstract]

Property, plant and equipment, net

8. Property, plant and equipment, net

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Cost
Construction in progress		1,437,882		715,821
Furniture, fixtures and office equipment		3,942,837		3,754,990
Leasehold improvement		4,130,174		3,763,290
Machinery and equipment		30,063,513		28,180,306
Motor vehicles		1,653,427		1,479,921
Building		24,463,867		25,414,914
		65,691,700		63,309,242
Less: accumulated depreciation		15,504,262		12,871,524
		50,187,438		50,437,718

The Company recorded depreciation expenses of $3,928,655 and $3,051,069 for the nine months ended September 30, 2015 and 2014, respectively, and $1,466,647 and $1,071,176 for the three months ended September 30, 2015 and 2014, respectively.

During the nine months ended September 30, 2015, the Company deducted deferred income related to government grants of $976,301 in calculating the carrying amount of property, plant and equipment. During the year ended December 31, 2014, the Company deducted deferred income related to government grants of $672,675 in calculating the carrying amount of property, plant and equipment.

The buildings comprising the Huizhou facilities were pledged as collateral for bank loans as of September 30, 2015 and December 31, 2014. The carrying amount of the building was $10,011,522 and $10,573,369 as of September 30, 2015 and December 31, 2014, respectively.

As of September 30, 2015, the buildings comprising the Ganzhou facilities were pledged as collateral for line of credit, which were used for short-term loans and bank guarantee promissory notes. The carrying amount of the building was $2,751,710 as of September 30, 2015.

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Land use rights, net

9 Months Ended

Sep. 30, 2015

Land use rights, net [Abstract]

Land use rights, net

9. Land use rights, net

	September 30,			December 31,
	2015			2014
	(Unaudited)
	$			$
Cost
Land located in Huizhou		3,381,319			3,505,921
Land located in Ganzhou		1,319,119			1,367,729
		4,700,438			4,873,650
Accumulated amortization		(618,641	)		(568,333	)
Net		4,081,797			4,305,317

As of September 30, 2015, land use rights of the Company included certain parcels of land located in Huizhou City, Guangdong Province, PRC and Ganzhou City, Jiangxi Province, PRC. Land use rights for land in Huizhou City with an area of approximately 126,605 square meters and in Ganzhou City with an area of approximately 58,669 square meters will expire on May 23, 2057 and January 4, 2062, respectively.

Land use rights are being amortized annually using the straight-line method over a contract term of 50 years. Estimated amortization for the coming years is as follows:

	$
Remaining 2015	23,502
2016	94,009
2017	94,009
2018	94,009
2019	94,009
2020 and thereafter	3,682,259
	4,081,797

The Company recorded amortization expenses of $72,441 and $72,815 for the nine months ended September 30, 2015 and 2014, respectively, and $23,753 and $24,222 for the three months ended September 30, 2015 and 2014, respectively.

The land use right for land located in Huizhou City was pledged as collateral for bank loans as of September 30, 2015 and December 31, 2014.

As of September 30, 2015, the land use right for land located in Ganzhou City was pledged as collateral for line of credit, which was used for short-term loans and bank guarantee promissory notes.

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Other payables and accrued liabilities

9 Months Ended

Sep. 30, 2015

Other payables and accrued liabilities [Abstract]

Other payables and accrued liabilities

11. Other payables and accrued liabilities

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accrued expenses		4,228,893		3,649,806
Royalty payable		473,990		580,032
VAT payable		432,260		405,859
Sales deposits received		1,076,126		911,947
Other payables		444,018		348,903
		6,655,287		5,896,547

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Land use rights, net (Amortization Disclosures) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Estimated amortization for the coming years is as follows
Net	$ 4,081,797		$ 4,081,797		$ 4,305,317
Land Use Right [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization expenses	23,753	$ 24,222	72,441	$ 72,815
Estimated amortization for the coming years is as follows
Remaining 2015	23,502		23,502
2016	94,009		94,009
2017	94,009		94,009
2018	94,009		94,009
2019	94,009		94,009
2020 and thereafter	3,682,259		3,682,259
Net	$ 4,081,797		$ 4,081,797		$ 4,305,317

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Segment information (Schedule of Segment Information about Total Assets) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Total Assets	$ 142,102,585	$ 146,154,072
Ni-MH Batteries [Member]
Segment Reporting Information [Line Items]
Total Assets	46,515,993	50,275,286
Lithium Batteries [Member]
Segment Reporting Information [Line Items]
Total Assets	84,115,350	86,339,973
New Materials [Member]
Segment Reporting Information [Line Items]
Total Assets	$ 11,471,242	$ 9,538,813

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Other payables and accrued liabilities (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Other payables and accrued liabilities [Abstract]
Accrued expenses	$ 4,228,893	$ 3,649,806
Royalty payable	473,990	580,032
VAT payable	432,260	405,859
Sales deposits received	1,076,126	911,947
Other payables	444,018	348,903
Other payables and accrued liabilities	$ 6,655,287	$ 5,896,547

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Land use rights, net (Schedule of Land Use Rights) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) m²	Dec. 31, 2014 USD ($)
Finite-Lived Intangible Assets [Line Items]
Net	$ 4,081,797	$ 4,305,317
Land Use Right [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	4,700,438	4,873,650
Accumulated amortization	(618,641)	(568,333)
Net	$ 4,081,797	4,305,317
Lease terms of land use rights	50 years
Land Use Right, Land Located in Huizhou [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 3,381,319	3,505,921
Area of land | m²	126,605
Land rights expiry date	May 23, 2057
Land Use Right Land, Located in Ganzhou [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 1,319,119	$ 1,367,729
Area of land | m²	58,669
Land rights expiry date	Jan. 04, 2062

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Accounts receivable, net (Tables)

9 Months Ended

Sep. 30, 2015

Accounts receivable, net [Abstract]

Schedule of Accounts Receivable

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accounts receivable		38,652,032		34,816,914
Less: allowance for doubtful debts		2,476,340		2,500,307
		36,175,692		32,316,607

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Organization and basis of presentation (Narrative) (Details)	1 Months Ended	9 Months Ended
	Apr. 30, 2014 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Nov. 13, 2014 USD ($)	Nov. 13, 2014 CNY (¥)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	May. 15, 2013 USD ($)	May. 15, 2013 CNY (¥)	Feb. 08, 2012 USD ($)	Feb. 08, 2012 CNY (¥)
Subsidiary or Equity Method Investee [Line Items]
Additional paid-in capital		$ 11,110,723		$ 10,530,430
Class of Stock [Line Items]
Shares issued to investors | shares	1,000,000
Number of shares covered by warrants | shares	500,000
Shares issued, price per share | $ / shares	$ 5.05
Aggregate proceeds	$ 5,050,000
Shares covered by each warrant | shares	0.50
Proceeds from issuance of capital stock, net	$ 4,633,164		$ 4,633,164
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower") [Member]
Subsidiary or Equity Method Investee [Line Items]
Attributable equity interest held		70.00%		70.00%			60.00%	60.00%	60.00%	60.00%
Equity interest held by partner				30.00%			40.00%	40.00%	40.00%	40.00%
Additional paid-in capital					$ 6,530,825	¥ 40,000,000	$ 4,898,119	¥ 30,000,000	$ 4,807,847	¥ 30,000,000	$ 2,381,293	¥ 15,000,000
Ganzhou Highpower Technology Co., Ltd ("GZ Highpower") [Member] | Shenzhen Highpower Technology Company Limited [Member]
Subsidiary or Equity Method Investee [Line Items]
Additional paid-in capital | ¥						¥ 10,000,000

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Long-term loans

9 Months Ended

Sep. 30, 2015

Long-term loans [Abstract]

Long-term loans

16. Long-term loans

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Long term loans from Bank of China		2,362,019		3,918,495
Less: current portion of long-term borrowings		1,889,615		1,959,248
Long- term bank loans, net of current portion		472,404		1,959,247

On January 13, 2012, the Company borrowed $8,198,065 (RMB50 million) from the Bank of China, which is guaranteed by the Company's Chief Executive Officer, Mr. Dang Yu Pan. It is a five-year long-term loan, with an annual interest rate of 5.5%, which was equal to 110% of the benchmark-lending rate of the People's Bank of China (“PBOC”) as of September 30, 2015. Interest expenses are to be paid quarterly.

The interest expenses were $170,611 and $287,743 for the nine months ended September 30, 2015 and 2014, respectively, and $45,649 and $87,759 for the three months ended September 30, 2015 and 2014, respectively.

The principal is to be repaid quarterly from September 30, 2012. 2% of the principal was repaid on each of September 30, 2012 and December 30, 2012, respectively. Thereafter 6% of the principal is to be repaid every quarter after December 31, 2012 until the maturity date. The repayment schedule of the principal is summarized as in below table:

	$
Remaining 2015		472,404
2016		1,889,615
		2,362,019

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Non-controlling interest

9 Months Ended

Sep. 30, 2015

Non-controlling interest [Abstract]

Non-controlling interest

21. Non-controlling interest

GZ Highpower is the Company's majority-owned subsidiary which is consolidated in the Company's financial statements with a non-controlling interest recognized. GZ Highpower is engaged in processing, marketing and research of battery materials.

On May 15, 2013, GZ Highpower increased its paid-in capital from RMB15,000,000 ($2,381,293) to RMB30,000,000 ($4,807,847). SZ Highpower holds 60% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 40%. On November 13, 2014, GZ Highpower increased its paid-in capital from RMB30,000,000 ($4,898,119) to RMB40,000,000 ($6,530,825) and the additional capital of RMB10,000,000 was contributed by SZ Highpower. As of December 31, 2014, SZ Highpower holds 70% of the equity interest of GZ Highpower, and four founding management members of GZ Highpower hold the remaining 30%.

As of September 30, 2015 and December 31, 2014, non-controlling interest related to GZ Highpower in the consolidated balance sheet was $1,029,013 and $1,307,239, respectively.

Non-controlling interest related to GZ Highpower in the consolidated statements of operations was loss of $238,126 and $129,588 for the nine months ended September 30, 2015 and 2014, respectively, and $91,843 and $68,023 for the three months ended September 30, 2015 and 2014.

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Commitments and contingencies (Tables)

9 Months Ended

Sep. 30, 2015

Commitments and contingencies [Abstract]

Schedule of Minimum Future Commitments for Operating Leases

	$
Remaining 2015		408,957
2016		1,717,659
2017		670,097
2018		346,690
2019		346,690
2020		346,690
2021 and after		1,849,013
		5,685,796

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Other payables and accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2015

Other payables and accrued liabilities [Abstract]

Schedule of Other Payables and Accrued Liabilities

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Accrued expenses		4,228,893		3,649,806
Royalty payable		473,990		580,032
VAT payable		432,260		405,859
Sales deposits received		1,076,126		911,947
Other payables		444,018		348,903
		6,655,287		5,896,547

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income	$ 3,448,985	$ 621,928
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,038,596	3,161,384
Allowance for doubtful accounts	1,132	103
Loss on disposal of property, plant and equipment	$ 145,572	346,866
Gain on derivative instruments		67,748
Deferred income tax	$ (294,943)	(830,413)
Share based payment	535,761	1,064,969
(Gain) loss on change of fair value of warrant liability	(941,685)	1,211,787
Changes in operating assets and liabilities:
Accounts receivable	(4,671,730)	(4,404,612)
Notes receivable	(1,339,122)	(1,453,621)
Prepayments	(1,102,578)	448,249
Other receivable	(104,336)	339,411
Inventories	(530,357)	(989,237)
Accounts payable	(6,233,405)	10,701,057
Deferred income	242,683	1,635,985
Other payables and accrued liabilities	981,979	(920,591)
Income taxes payable	(305,698)	777,753
Net cash flows (used in) provided by operating activities	(6,129,146)	11,778,766
Cash flows from investing activities
Acquisitions of plant and equipment	(7,250,757)	(5,864,112)
Net cash flows used in investing activities	(7,250,757)	(5,864,112)
Cash flows from financing activities
Proceeds from short-term bank loans	11,325,212	15,821,648
Repayment of short-term bank loans	(10,916,379)	(35,934,559)
Repayment of long-term bank loans	(1,456,099)	(1,463,605)
Proceeds from notes payable	49,315,315	34,246,949
Repayment of notes payable	(43,573,196)	$ (32,308,636)
Proceeds from exercise of employee options	$ 44,534
Proceeds from issuance of capital stock, net		$ 4,633,164
Change in restricted cash	$ 2,491,383	12,900,973
Net cash flows provided by (used in) financing activities	7,230,770	(2,104,066)
Effect of foreign currency translation on cash and cash equivalents	(552,574)	18,757
Net (decrease) increase in cash and cash equivalents	(6,701,707)	3,829,345
Cash and cash equivalents - beginning of period	14,611,892	7,973,459
Cash and cash equivalents - end of period	7,910,185	11,802,804
Cash paid for:
Income taxes	794,846	681,533
Interest expenses	$ 822,257	1,489,796
Non-cash transactions
Accounts payable for construction in progress		648,385
Reduction of property, plant and equipment cost by realizing deferred income	$ 976,301	$ 669,995

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Prepayments

9 Months Ended

Sep. 30, 2015

Prepayments [Abstract]

Prepayments

5. Prepayments

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Purchase deposits paid		2,138,835		1,793,599
Value-added tax prepayment		401,239		384,008
Rental deposit		424,533		266,556
Deferred insurance fee		117,019		97,005
Advances to staff for operations		244,635		122,452
Other deposits and prepayments		917,641		619,900
		4,243,902		3,283,520

Other deposits and prepayments represent deferred expenses and prepayments to services providers.

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Prepayments (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Prepayments [Abstract]
Purchase deposits paid	$ 2,138,835	$ 1,793,599
Value-added tax prepayment	401,239	384,008
Rental deposit	424,533	266,556
Deferred insurance fee	117,019	97,005
Advances to staff for operations	244,635	122,452
Other deposits and prepayments	917,641	619,900
Total prepayments	$ 4,243,902	$ 3,283,520

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Commitments and contingencies (Schedule of Minimum Future Commitments for Operating Leases) (Details)	Sep. 30, 2015 USD ($)
Commitments and contingencies [Abstract]
Remaining 2015	$ 408,957
2016	1,717,659
2017	670,097
2018	346,690
2019	346,690
2020	346,690
2021 and after	1,849,013
Total minimum future commitments	$ 5,685,796

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Taxation (Schedule of Tax Effect of Each Major Type of Temporary Difference) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Taxation [Abstract]
Tax loss carry-forward	$ 3,970,745	$ 3,798,290
Allowance for doubtful receivables	107,835	111,637
Allowance for inventory obsolescence	221,702	138,458
Difference for sales cut-off	48,387	20,572
Deferred income	162,034	283,111
Property, plant and equipment subsidized by government grant	241,936	100,901
Total gross deferred tax assets	4,752,639	4,452,969
Valuation allowance	(2,875,458)	(2,805,785)
Total net deferred tax assets	$ 1,877,181	$ 1,647,184

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Commitments and contingencies

9 Months Ended

Sep. 30, 2015

Commitments and contingencies [Abstract]

Commitments and contingencies

22. Commitments and contingencies

Operating leases commitments

The Company leases factory and office premises under various non-cancelable operating lease agreements that expire at various dates through years 2015 to 2026, with options to renew the leases. All leases are on a fixed repayment basis. None of the leases includes contingent rentals. Minimum future commitments under these agreements as of September 30, 2015 are as follows:

	$
Remaining 2015		408,957
2016		1,717,659
2017		670,097
2018		346,690
2019		346,690
2020		346,690
2021 and after		1,849,013
		5,685,796

Rent expenses for the nine months ended September 30, 2015 and 2014 were $1,231,165 and $1,183,430, respectively, and $411,717 and $391,109 for the three months ended September 30, 2015 and 2014.

Capital commitments

The Company has no capital commitments as of September 30, 2015 and December 31, 2014, respectively.

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Share-based Compensation (Narrative) (Details) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 17, 2014	Apr. 30, 2014	Aug. 15, 2013	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense				$ 400,000		$ 400,000
Weighted-average recognition period						1 year 3 months 4 days
Share-based compensation						$ 535,761	$ 1,064,969
Shares issued to consultants		40,000	150,000
Fair market value of shares issued			$ 171,000
Compensation expense related to shares issued		$ 94,982
Share-based Goods and Nonemployee Services Transaction, Shares Approved for Issuance			150,000
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options exercised							74,052
Stock Options Related to Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options vested and expected to vest				$ 7,000		$ 7,000		$ 1,400,000
Common stock shares granted						75,000
Exercise price of options granted						$ 4.43
Options forfeited				9,484		18,048	29,204	44,714
Share-based compensation				$ 123,457	$ 148,725	$ 535,761	$ 543,369
Number of options exercised						16,933	160,000	200,000
Stock Options Related to Employees [Member] | Vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options forfeited						3,670
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted									246,000
Restricted Stock Awards [Member] | Vesting Immediately [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage									30.00%
Restricted Stock Awards [Member] | First Anniversary of Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage									30.00%
Restricted Stock Awards [Member] | Second Anniversary of Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage									40.00%
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incentive plan term	5 years
Shares issued to consultants	200,000
Fair market value of shares issued	$ 390,000
Non Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average fair value of options granted							$ 1.95
Share-based compensation							$ 521,599
2008 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for issuance				569,762		569,762
Incentive plan term						10 years
Common stock reserved for issuance				2,000,000		2,000,000
2008 Omnibus Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for plan						3 years
2008 Omnibus Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for plan						5 years

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Property, plant and equipment, net (Tables)

9 Months Ended

Sep. 30, 2015

Property, plant and equipment, net [Abstract]

Schedule of Plant and Equipment, Net

	September 30,		December 31,
	2015		2014
	(Unaudited)
	$		$
Cost
Construction in progress		1,437,882		715,821
Furniture, fixtures and office equipment		3,942,837		3,754,990
Leasehold improvement		4,130,174		3,763,290
Machinery and equipment		30,063,513		28,180,306
Motor vehicles		1,653,427		1,479,921
Building		24,463,867		25,414,914
		65,691,700		63,309,242
Less: accumulated depreciation		15,504,262		12,871,524
		50,187,438		50,437,718

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Lines of credit

9 Months Ended

Sep. 30, 2015

Lines of credit [Abstract]

Lines of credit

15. Lines of credit

The Company entered into various credit contracts and revolving lines of credit, which were used for short-term loans and bank acceptance bills. The following tables summarize the unused lines of credit as of September 30, 2015 and December 31, 2014:

	September 30, 2015 (Unaudited)
Lender	Starting date	Maturity date		Line of credit		Unused line of credit
				$		$
Ping An Bank Co., Ltd	10/20/2014	10/19/2015	(i)		11,022,754		3,329,344
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015			4,566,570		4,566,570
Industrial Bank Co., Ltd	7/15/2015	7/15/2016			9,448,075		6,713,634
China Everbright Bank Co., Ltd	6/23/2015	6/22/2016			7,873,396		2,515,922
Bank of China	7/1/2015	6/30/2016			11,472,662		2,010,110
Bank of China	7/13/2015	9/13/2016			14,093,378		6,109,755
China Minsheng Banking Corp.,Ltd	7/16/2015	7/16/2016			4,499,083		1,962,330
Total					62,975,918		27,207,665

(i) The lines of credit from the bank is terminated at the maturity date.

	December 31, 2014
Lender	Starting date	Maturity date		Line of credit		Unused line of credit
				$		$
Bank of China	3/10/2014	3/10/2015	(ii)		12,653,474		424,823
Bank of China	7/23/2014	7/23/2015	(ii)		3,965,144		67,516
Ping An Bank Co., Ltd	10/20/2014	10/19/2015			11,428,945		295,818
China Minsheng Banking Corp., LTD	5/22/2014	5/22/2015	(ii)		3,265,413		-
Shenzhen Baoan Guiyin County Bank	11/19/2014	11/18/2015			4,734,848		1,750,151
Industrial and Commercial Bank of China	7/26/2012	7/25/2015	(i)		6,530,826		3,918,496
China Citic Bank	6/25/2014	6/25/2015	(i)		8,046,910		6,788,093
Industrial Bank Co., Ltd	10/23/2014	10/23/2015	(iii)		6,530,825		4,430,636
Jiang Su Bank Co., Ltd	10/28/2014	9/11/2015	(i)		4,898,119		4,898,119
Total					62,054,504		22,573,652

(i)	The lines of credit from these banks are terminated at maturity dates.
(ii)	The lines of credit from these banks are rolled over after maturity dates.
(iii)	The lines of credit from Industrial Bank Co., Ltd rolled over before maturity date.

The lines of credits from Bank of China, Ping An Bank, China Minsheng Banking Corp., Ltd, Industrial Bank Co. Ltd, Shenzhen Baoan Guiyin County Bank and China Everbright Bank Co., Ltd are guaranteed by the Company's Chief Executive Officer, Mr. Dang Yu Pan.

Certain of the agreements governing the Company's loans include standard affirmative and negative covenants, including restrictions on granting additional pledges on the Company's property and incurring additional debt and obligations to provide advance notice of major corporate actions, and other covenants including: that the borrower may not serve as a guarantor for more than double its net assets; that the borrower is restricted in certain circumstances from using the loans in connection with related party transactions or other transactions with affiliates; that the borrower must provide monthly reports to certain lenders describing the actual use of loans; that the borrower may need to obtain approval to engage in major corporate transactions; and that the borrower may need to obtain approval to increase overseas investments, guarantee additional debt or incur additional debt by an amount which exceeds 20% of its total net assets should the lender determine that such action would have a material impact on the ability of the borrower to repay the loan. The covenants in these loan agreements could prohibit the Company from incurring any additional debt without consent from its lenders. The Company believes it would be able to obtain consents from the lenders in the event it needed to do so. The agreements governing the Company's loans may also include covenants that, in certain circumstances, may require the Company's PRC operating subsidiaries to give notice to, or obtain consent from, certain of their lenders prior to making a distribution of net profit, as well as covenants restricting the ability of the Company's PRC operating subsidiaries from extending loans. As of September 30, 2015 and December 31, 2014, the Company was in compliance with all material covenants in its loan agreements.