December 8, 2005
By facsimile to (214) 659-4401 and U.S. Mail
Mr. Xiangqian Li
Chairman, President, and Chief Executive Officer
China BAK Battery, Inc.
BAK Industrial Park
No. 1 BAK Street
Kuichong Town, Longgang District
Shenzhen, People`s Republic of China
RE: China BAK Battery, Inc., formerly known as Medina Coffee,
Inc.
Pre-effective Amendment 4 to Registration Statement on Form
SB-2
Filed November 29, 2005
File No. 333-122209
Annual Report on Form 10-KSB for the fiscal year ended
December
31, 2004 and
Subsequent Exchange Act Reports
File No. 0-49712
Dear Mr. Li:
We reviewed the filings and have the comments below.
SB-2/A 4
1. If applicable, comments on the SB-2/A4 are comments on the 10-
KSB
and subsequent Exchange Act reports and vice versa.
Management`s Discussion and Analysis or Plan of Operation, page 17
2. Disclosure on page 29 that China BAK Battery expects to receive
certification by October 2005 is inconsistent with disclosure on
page
34 and elsewhere that China BAK Battery expects to receive
certification by December 2005. Please reconcile the disclosures.
Our Business, page 32
3. Disclosure on page 39 that China BAK Battery has 15 issued
patents
and 121 applications for patents in the People`s Republic of China
or
PRC is inconsistent with disclosure on page 40 that China BAK
Battery
has two issued patents and 40 applications for patents in the PRC.
Please reconcile the disclosures.
Description of Our Common Stock, page 46
4. Disclosure states that China BAK Battery`s articles of
incorporation do not vary the vote necessary for the stockholders
to
act on various matters from the size of the vote required by
Nevada
law. Specify the size of the vote required by Nevada law.
Balance Sheet, page F-2
5. You have included an amount of $3,327,393 below total current
assets on your balance sheet as of September 30, 2004 that is not
labeled. It appears that this amount may have been included
erroneously. Please advise and revise.
Statements of Operations, page F-3
6. Your response and revised disclosure to prior comment 11
disclose
the impact that your manufacturing expansion and new equipment
purchases had on your depreciation. This disclosure is included
in
your disclosure on the changes in depreciation and amortization
that
is presented on the face of your statements of operations below
gross
profit. Additionally, the disclosure in your MD&A on the types of
costs included in your cost of goods sold under "Certain
Accounting
Matters" does not reference depreciation as a cost that is
included
in your cost of goods sold. Based on this, it appears that you do
not allocate a portion of your depreciation expense to cost of
goods
sold in calculating your gross profit. If our understanding is
correct, amend your statements of operations to include in cost of
goods sold the appropriate portion of your depreciation expense.
In
doing so, amend also your MD&A and other disclosures that refer to
your gross profit to discuss your results of operations
consistently
with the information presented on the face of your statements of
operations. If your cost of goods sold does include a portion of
your depreciation expense, revise your disclosure in "Certain
Accounting Matters" to state this. Refer to SAB Topic 11:B.
Note 19. Restatement of Consolidated Financial Statements, page
F-30
7. We read your response to prior comment 15. An Item 4.02 Form
8-K
should be filed within four business days of the triggering event.
File an Item 4.02 Form 8-K referencing each restatement item for
which you have concluded that a restatement is required. Refer to
general instruction B(1) of Form 8-K.
8. We again remind you that when you file your restated Form 10-
QSB/As, you should appropriately address these items:
* Full compliance with APB 20, paragraphs 36 and 37.
* Fully update all affected portions of the document, including
MD&A.
* Updated Item 3 disclosures should include these items:
A discussion of the restatement and the facts and circumstances
surrounding it.
How the restatement impacted the original conclusions of your
chief
executive officer and chief financial officer on the effectiveness
of
your disclosure controls and procedures.
Changes to internal controls over financial reporting.
Anticipated changes to disclosure controls and procedures and/or
internal controls over financial reporting to prevent future
misstatements of a similar nature.
Refer to Items 307 and 308(c) of Regulation S-B.
* Updated certifications, which should reference Form 10-QSB/A,
rather than Form 10-QSB.
Exhibits
9. The response to prior comment 17 represents that the agreement
is
no longer in effect and will not be included as an exhibit.
Please
remove exhibit 10.8 from the exhibit list. You may retain the
exhibit number and indicate that the exhibit is intentionally
omitted.
10. We note that you are requesting confidential treatment for
exhibit 10.4. We assume that you have filed the application with
the Secretary`s Office and await its receipt from that office. We
intend to process concurrently the application and the
registration
statement. Before requesting acceleration of the registration
statement`s effectiveness, you must resolve any issue concerning
the
application and file publicly the portions of the exhibit for
which
you are not requesting confidential treatment.
11. Refer to prior comment 18. As requested previously, confirm
that
Jilin Provincial Huaruan Technology Company, Ltd. is a party to
the
agreement filed as exhibit 10.30 rather than exhibit 10.33 as you
represented in your October 11, 2005 response to comment 24 in our
August 2, 2005 letter.
Other
12. We note that you intend to respond by amendments to prior
comments 21-23. Allow us sufficient time to review the amendments
before requesting acceleration of the registration statement`s
effectiveness.
Closing
File amendments to the SB-2, the 10-KSB, the June 30, 2005
10-
QSB, and the 8-K dated September 14, 2005 and filed September 15,
2005 in response to the comments. To expedite our review, China
BAK
Battery may wish to provide us three marked courtesy copies of the
amendments. Include with the filings any supplemental information
requested and a cover letter tagged as correspondence that keys
the
responses to the comments. If China BAK Battery thinks that
compliance with any of the comments is inappropriate, provide the
basis in the letter. We may have additional comments after review
of
the amendments, the responses to the comments, and any
supplemental
information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since China BAK Battery and its management are
in
possession of all facts relating to the disclosure in the
registration statement, they are responsible for the adequacy and
accuracy of the disclosures that they have made.
If China BAK Battery requests acceleration of the
registration
statement`s effectiveness, China BAK Battery should furnish a
letter
at the time of the request, acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve China BAK Battery from its full responsibility for the
adequacy and accuracy of the registration statement`s disclosures.
* China BAK Battery may not assert our comments or the declaration
of
the registration statement`s effectiveness as a defense in any
proceedings initiated by the Commission or any person under the
United States` federal securities laws.
The Commission`s Division of Enforcement has access to all
information that China BAK Battery provides us in our review of
the
registration statement or in response to our comments on the
registration statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on accounting comments to Meagan L.
Caldwell, Staff Accountant, at (202) 551-3754 or Rufus G. Decker
III,
Accounting Branch Chief, at (202) 551-3769. You may direct
questions
on other comments and disclosure issues to Edward M. Kelly, Senior
Counsel, at (202) 551-3728 or me at (202) 551-3767.
Very truly yours,
Jennifer R. Hardy
Legal
Branch Chief
cc: Nevada Agency and Trust Company
Agent for Service, China BAK Battery, Inc., f/k/a Medina
Coffee,
Inc.
50 West Liberty Street, Suite 880
Reno, NV 89501
Robin Bradford, Esq.
Andrews Kurth LLP
1717 Main Street, Suite 3700
Dallas, TX 75201
Mr. Xiangqian Li
December 8, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE