================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 11, 2006
China BAK Battery, Inc.
(Exact Name of Registrant as Specified in Charter)
Nevada 000-49712 88-0442833
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
BAK Industrial Park 518119
No. 1 BAK Street, Longgang District (Zip Code)
Shenzhen
Peoples Republic of China
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (86-755) 8977-0093
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act
(17 CFR 240.14a-12(b))
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
Item 1.01. Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
On January 11, 2006, one of our wholly-owned subsidiaries, Shenzhen BAK
Battery Co., Ltd. ("Shenzhen BAK Battery"), executed a Loan Agreement (the "Loan
Agreement") among Shenzhen Tongli Hi-tech Co., Ltd. ("Shenzhen Tongli Hi-tech"),
Shenzhen Nanshan Branch of Guangdong Development Bank (the "Bank") and Shenzhen
BAK Battery Co., Ltd., under which Shenzhen BAK Battery is jointly and severally
liable for the loan from the Bank to Shenzhen Tongli Hi-tech, an unrelated
party. The loan to Shenzhen Tongli Hi-tech is in the amount of US $618,000,
bears interest at a fixed annual rate of 6.138% and matures on January 11, 2007.
Events constituting a breach of the Loan Agreement by Shenzhen Tongli
Hi-tech include: (a) failure to pay principal or interest when due; (b)
prepayment of the loan without the prior consent of the Bank; (c) failure to use
the loan in the stipulated manner; (d) failure to timely provide correct and
complete financial reports and other required information; (e) without the prior
consent of the Bank, revoke its business license or scope of business, or sell,
rent and transfer its assets or provide a material guaranty to another party;
and (f) failure to notify the Bank in writing of certain events including
litigation or bankruptcy.
In the event of a breach of the Loan Agreement, the Bank may, among
other things, take any of the following actions against Shenzhen BAK Battery:
(a) declare all outstanding principal and accrued interest under the Loan
Agreement immediately due and payable; (b) impose compound interest up to a
maximum rate of 3.069 percent per annum on any principal or interest not paid
when due including any principal and interest declared immediately due and
payable; and (c) directly demand payment of any due but unpaid principal and
interest or deduct the amount of any due but unpaid principal and interest from
Shenzhen BAK Battery's bank account.
On January 11, 2006, Shenzhen BAK Battery also entered into a Guaranty
Contract with the Bank pursuant to which Shenzhen BAK Battery guaranteed the
loan made to Shenzhen Tongli Hi-tech under the Loan Agreement for a period that
extends until two years after the maturity date of the loan.
Item 1.02 Termination of a Material Definitive Agreement
On January 11, 2006, Shenzhen BAK Battery repaid in full its loan from
the Agricultural Bank of China in the outstanding principal amount of
US$6,178,942 borrowed under the Loan Agreement dated July 29, 2005. Shenzhen BAK
Battery did not incur any penalties in connection with the repayment of this
loan. The Loan Agreement was terminated.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
- --------------- ---------------------------------------------------------------
Exhibit No. Description of Exhibit
- --------------- ---------------------------------------------------------------
10.1 Summary of Loan Agreement dated January 11, 2006 by and among
Shenzhen Tongli Hi-tech Co., Ltd., Shenzhen Nanshan Branch of
Guangdong Development Bank and Shenzhen BAK Battery Co., Ltd.
- --------------- ----------------------------------------------------------------
10.2 Summary of Guaranty Contract dated January 11, 2006 between
Shenzhen Nanshan Branch of Guangdong Development Bank and
Shenzhen BAK Battery Co., Ltd.
- --------------- ---------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHINA BAK BATTERY, INC.
Date: January 17, 2006 By: /s/ Yongbin Han
-----------------------
Yongbin Han
Chief Financial Officer
EXHIBIT INDEX
- --------------- ---------------------------------------------------------------
Exhibit No. Description of Exhibit
- --------------- ---------------------------------------------------------------
10.1 Summary of Loan Agreement dated January 11, 2006 by and among
Shenzhen Tongli Hi-tech Co., Ltd., Shenzhen Nanshan Branch of
Guangdong Development Bank and Shenzhen BAK Battery Co., Ltd.
- --------------- ----------------------------------------------------------------
10.2 Summary of Guaranty Contract dated January 11, 2006 between
Shenzhen Nanshan Branch of Guangdong Development Bank and
Shenzhen BAK Battery Co., Ltd.
- --------------- ---------------------------------------------------------------