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Advanced Battery Technologies From Wikipedia, the free encyclopedia Jump to navigationJump to search Advanced Battery Technologies, Inc

Industry Electric vehicles rechargeable lithium-ion batteries.

Founded 2002[1]

Headquarters New York City

Key people Zhiguo Fu (CEO) Revenue US$ 106.22 million (2011)[2][3]

Operating income

 US$ 37.84 million (2011)

Net income

 US$ 36.71 million (2011)

Number of employees 1,176[4]

Advanced Battery Technologies Inc., was a business with executive offices Beijing, China and Flushing, NY with three other campuses in mainland China (Dongguan, Wuxi and Harbin) that specialized in the development and manufacturing/assembly of rechargeable polymer lithium-ion (PLI) batteries and electric vehicles, electric bikes and electric scooters.

Before disappearing, ABAT raised nearly $90,000,000 in various stock offerings over a period of years and worked its way up from the OTC to NASDAQ.[4] When ABAT was called out by several short seller reports[5] for filing fraudulent SEC filings by reporting grossly exaggerated revenues and net profits, ABAT's stock price started crumbling from $5.00/share to under 50 cents/share and various Class Action lawsuits commenced.[6] Eventually ABAT was delisted from the NASDAQ and deregistered by the SEC and found in contempt of Court in the Delaware Court of Chancery in Court Case 9542-VCMR.[7] [8] Although ABAT did settle the Class Action lawsuit, shareholders received less than 1/3 of a penny per share even though the stock had dropped more than $4.00 per share. [9]

(As Judge McMahon who presided over this case has noted in similar cases, it is nearly impossible for Court-Appointed Receivers to do their work in the PRC. Judge McMahon described efforts of a Court-appointed Receiver as a "meaningless exercise . . . .. with broad and unspecified powers and no means of being paid whatever he is supposed to do (chase money that has not been repatriated to China (is my guess). Plaintiff will need to convince Judge Francis with citations, more persuasive than citations than those offered to me, that the entry of any particular remedy is both warranted and likely to afford the Plaintiffs (and not some lawyer acting as a "special purpose receiver" some meaningful relief." [10]) ABAT's CEO was Zhigou Fu who led the company from a market cap of $250,000,000 to zero and completely wiped out all shareholders. During the Course of the Class Action, Zhigou Fu wrote 2 letters to shareholders promising that the company would resume their filings and resume following SEC rules once the Class Actions were completed. However, like many Chinese Reverse Mergers, ABAT did not follow US laws and eventually broke many and ultimately was deregistered by the SEC. In the words of activist shareholder Joel Caplan in Court Transcripts without SEC and governmental intervention, ABAT would be free "to waltz back to China with $100,000,000 with impunity and without consequence[11]. Like dozens if not hundreds of other Chinese Reverse Mergers, ABAT hid in China and the money that was raised disappeared.

On 23 July 2015, the Delaware Chancery Court appointed Robert Seiden as the Court-Appointed Receiver over Advanced Battery Technologies.[12][13] The company from 2003-2014 had manufactured electric bicycles, electric scooters, and electric sports utility vehicles and lithium-ion batteries. The company claimed in its SEC Filings that it exported its products to Europe, the United States, and Asia.[14][15] After a 3 year Court battle, the Delaware Court of Chancery awarded Southpaw Hedge Fund and a group of private shareholders known as the Duschesneau Shareholder Group a "put-option" valued at $27.50/share based on forensic accounting of the fabricated SEC reports that ABAT had filed with the SEC over 8 years before they went "illegally dark..[5] The Court-appointed Receiver, Robert Seiden, after several years was able to negotiate an inadequate Settlement with Chairman Zhigou Fu of about 35 cents per share. Like many Chinese Reverse Merger companies that came to the United States, the capital raised was never recovered and the company ceased communicating with the SEC and its shareholders after raising nearly $100,000,000 based on reporting fabricated profits of $35,000,000 annually. Equitable tolling principles may still apply in this case in light of a pattern of deception over more than a decade of Chinese companies seeking US capital based on false pretenses and fictitious filings. [16]

Contents • 1Products and technologies • 2Market penetration • 3Recent activities • 4Allegations of fraud • 5See also • 6References • 7External links

Products and technologies Advanced Battery Technologies before it got deregistered and went out of business was most known for its development and manufacturing of lithium iron phosphate batteries. ABAT manufactured customized mini golf carts and shuttles, e-bicycles, PLI batteries for electric buses and e-scooters fitted with unique lithium iron phosphate batteries.[17] According to Market Wire, the batteries combined "high-energy chemistry with state-of-the-art polymer technology to overcome many of the shortcomings associated with other types of rechargeable batteries."[18]

Market penetration Before it was discovered to be a fraud, ABAT claimed to sell its product lines across the globe, mostly as generic and re-branded product. ABAT according to SEC filings consisted of three campuses in Harbin, China, Wuxi, China and Dongguan, China The facilities in Harbin and Dongguan manufactured small and large PLI battery cells and the facility in Wuxi, China assembled electric bikes and scooters. ABAT touted a massive $85,000,000 dollar opening of its plant in Dongguan and was hyped in United States and Chinese media at the time. A video of this event was uploaded to the YouTube Channel of Activist investor Joel Caplan who was the only American investor to attend the event.[19] As that factory closed two years later, it was apparently yet another ruse to cover up their massive accounting fraud which went undetected by EFP Rotenberg and Joseph Bagell, the two auditors for Advanced Battery Technologies. Prior to ceasing operations once the fraud was discovered, ABAT's scooter line contained numerous models and prototypes as seen in this catalogue[20] which were re-branded and sold under many brands such as Jinan Qingqi, Lynx, Ecobahn, Wuxi Huina and several others. ABAT's generic models such as ZQTD-690 were listed in its catalogue and displayed in its warehouses. In Spain, Wuxi scooters sold under the ABAT name through ABAT CONNECTION company in Alicante, Spain until as a gateway to the European market before disolving. In Denmark Wuxi was re-branded as Lynx Scooters, in Russia under the Ecobahn name, in Poland under Pollana.

Other distributors and re-sellers are found in The Netherlands, Slovenia, Czech Republic, Italy, Turkey, India, Singapore to name only a few and confirmed.[21] During the uncertainty of whether ABAT was perpetrating a fraud on the market, another activist investor researched all of the distributors that ABAT claimed and published the report.[22] During the years of court proceedings from 2011-2015, ABAT released several press releases claiming innocence and updates of ongoing operations while still not meeting the rules of NASDAQ or the SEC. Despite having some kind of business, ABAT did not meet the rules of NASDAQ and was delisted[23] and subsequently after 3 years did not meet the rules of the SEC and was deregistered on October 14, 2015.[24] $100,000,000 of capital disappeared.

Recent activities[edit]

It is now apparent that ABAT was yet another "fraud on the market. " According to the Receiver Report, ABAT's chairman Zhigou Fu suffered a heart attack during the Summer of 2016 and the company had numerous lawsuits against it in the PRC.[25] Despite raising $100,000,000 between 2008-2011 and despite reporting massive net profits of more than $35,000,000, the company claimed insolvency to the Receiver. This enigma has never been resolved.[26] ABAT's market cap went from $250,000,000 to zero and shareholders lost everything who held their shares that relied on Mr. Zhigou Fu's letters to the shareholders which turned out to be nothing but empty promises. Apparently, Advanced Battery Technologies never was making the $35,000,000 in net profit they claimed as once the capital from investors stopped, the company was unable to function on its own without further capital and was apparently insolvent. This was yet another case of China stock fraud. So far the principles and masterminds behind this huge "financially engineered stock scheme" remain at large.. Shareholders were victims of international theft and the Receiver is unable to do anything as US Judgements are not enforceable in China. The Wall Street Journal estimates that over 1 billion dollars of US capital was lost in Chinese Reverse Mergers such as ABAT. US laws have not changed and the US economy and US investors remain at risk with any investments in China. According to Judge McMahon, the Chinese are not honest or transparent when it comes to business dealing in the United States and companies such as ABAT were merely vehicles to gain access to US markets and then disappear. Many of the press releases of ABAT from 2007-2014 can now be seen as complete lies and exaggerations given that ABAT disappeared and did not live up to any of its promises to shareholders to get current with their financials. Furthermore, ABAT's claim to have opened an $85,000,000 battery facility was yet another total exaggeration which attempted to cover up ABAT's gross misrepresentation of its financial picture. All the SEC reports and press releases were signed by Mr. Zhigou Fu who suffered a heart attack in late Summer of 2016. Mr. Zhigou Fu's current situation is not known as he has not communicated with the shareholders in 3 years. • In May 2009 ABAT acquired Wuxi Angell Autocycle, an electric and hybrid electric scooter and E Bike manufacturer based in Wuxi, China. Previous to the acquisition ABAT was an investor and supplier to Wuxi Angell, providing batteries, engines, controllers and other parts to the company. • In June 2011 ABAT signed a $14.7 million deal to supply 24,000 electric vehicles, including motorized bicycles and scooters, to Wuxi Hao Jie Vehicle Co.[27][28] In December 2011 ABAT opened a state-of-the-art battery facility in Dongguan claiming in numerous Press Releases that the facility cost 83 million and would generate about 25 million in net profit per year. The amount spent to buy and renovate the facility and purchase equipment was claimed to be 83 million dollars but that number was not verifiable. Given that the company is insolvent and taken over by the Chinese government it appears that that number was an "absolutely absurd exaggeration." In 2015, the Delaware Chancery Court appointed a Receiver over ABAT prompted by its failure to provide books and records to shareholders to value their shares. The company was determined to be in Contempt of Court and a Receiver with broad, global powers was appointed by the Judge in Delaware. The Receiver, Robert W. Seiden, a lawyer and former prosecutor from New York, was appointed by Vice Chancellor Master LeGrow to bring ABAT into compliance with the courts orders. Currently, Vice-Chancellor Montgomery Reeves is overseeing the case. The Receiver met with Mr. Fu and his CFO in the US and China, and visited the facilities of ABAT and determined that the company was essentially insolvent (as officially reported in court filings in the Delaware Chancery court). The Receiver seized chairman Fu's US residence in Queens, New York in July 2016 in the case filed in state Supreme Court entitled Robert W Seiden Receiver for Advanced Battery Technologies Inc. - v. - Zhiguo Fu et al. The Receiver and Zhigiou Fu eventually reached a settlement and signed a final settlement agreement that results in a payment to the Receiver of approximately $2 million US dollars. While this Settlement agreement required that the payment be received in 4 months time, due to bureacracy issues in the PRC, the full amount was not received for nearly 15 months. The total value of the settlement was approximately 35 cents/share on a $27.50 put-option from the Court. After lawyer fees were distributed, the shareholders received less than 10 cents/share after a 7 year ordeal. True and correct accounting was never verified and nearly $100,000,000 went missing. Accoring to activist Shareholder Joel Caplan in Court Transcripts dating back to 2013, this was part of "ongoing systemic and formulaic "fraud on the market" committed by unknown bad actors who benefit from lax oversight by the SEC and books and records that are protected by Chinese state-secrecy laws. [29] The following is a direct excerpt from the Court Transcript: MR. CAPLAN: Right. And it is compounded by the fact that this is happening with a large number of Chinese companies. So when that number $225 million is multiplied by 10 or 20, it is a huge amount of money that is leaving the country, and there is no recourse. THE COURT: It is interesting, because if what you are talking about is a widespread phenomenon that is detrimental to the United States economy, it ought to be of interest to someone at some level of government. A Court of Law dealing with a discrete situation is probably not the best forum for working out the policy issue of whether, I don't know, Chinese companies ought to be able to distribute stock in the United States. It might be an issue of interest to the business press if there is in fact this broad-based, widespread phenomenon happening, over and over again, these companies are turning out to go bust, and all the investment from the United States ends up in China and there is no return. I would think that somebody from Bloomberg or the Wall Street Journal would be very interested in that.” (Transcript December 13, 2013, page 18)[30] The Receiver filed a motion with the Delaware Chancery court seeking final court approval for the settlement in early December 2016. Advanced Battery Technologies was de-listed as publicly traded on 30 December 2015, because the company failed to remain current in its SEC required financial filings, such as forms Q and K.[31] Seeking Alpha went so far as to call the stock defunct, and there has been no evidence that the company still exists since 2015.[32]

An article in the online magazine Penny Stocks Weekly in May 2016 provided the most current information available about the company's stock at that time. The article said, "This company does not file any reports and therefore there is no way to verify the number of shares that are outstanding. This means that the value of any shares held is in question, and once said value is realized, it tends to be worthless more often than it is worth more. Another investor blog commented "Given the lack of available information, any further analysis of this company's share structure would be meaningless."[33]

Allegations of fraud

In March 2011 anonymous bloggers who, by their own admission, stood to gain if ABAT's stock price declined, accused the company of fraudulently misrepresenting its business interests – pointing out discrepancies between Advanced Battery Technologies filings with the Securities and Exchange Commission and China's State Administration of Industry and Commerce, while also questioning the reliability of distributor relationships and related party transactions. Multiple articles followed in financial opinion and analysis sites.[34] While no fraud was ever proved, and a formal rebuttal was issued, the company failed to file its third quarter 2011 financial statements and was subsequently de-listed from trading on the NASDAQ exchange.[35][36] Advanced Battery made only one formal response to the allegations against it. The Class Action suits against ABAT are being heard in the Southern District Court of New York by the Honorable Judge Colleen McMahon. Motions to dismiss the case on inadequate substance to the plaintiffs allegations have been filed by Advanced Battery and its 2 accounting firms EFP Rotenberg and Friedman/Bagell. According to Pacer.gov under case # 1:11-cv-02279 in October 2012, a "Settlement in Principle" was achieved between the parties. In late April 2013, a "Stipulation of Settlement Letter" was submitted by Pomerantz Law Firm to settle the case for $275,000 as long as ABAT will meet certain contingencies or show good faith to do so by mid-June 2013. According to the docket, on 7/18/2013, under Docket 106, Judge McMahon denied the Plaintiffs motion for leave to file a second amended complaint. Then on 7/30/2013, as a result of the parties failure to make a motion to certify a class and due to the pending settlement, Judge McMahon struck the motion under Docket entry 94 from the record without prejudice. Subsequently, on 8/19/2013, under Docket entry 108 the Plaintiffs appealed the previous decision of Docket 106 to the US Court of Appeals which is available to read under Court of Appeals Docket #: 13-3173. On 9/12/2013, under Docket entry 110, "The Court is putting this action on an expedited trial schedule. The parties must be ready for trial by December 1, 2013. All discovery must be complete by November 15, 2013. Depositions and document productions may be taken on three days' notice. The parties must apprise the Court of any discovery disputes within 24 hours so that they may be referred to Magistrate Judge Debra Freeman. No extensions will be granted. Should all of the conditions for settlement be met in the interim, the Court will entertain a motion for approval of that settlement."[37] On 26 March 2014, the Class Action case 1:11-cv-02279 against ABAT was settled for $275,000 with $115,000 going to expenses (Pomerantz did not accept a fee for their services) and the rest to be divided up between the class which is estimated to be between 1000-1500 people. On 26 March 2014, Pomerantz made a motion to end the appeal against ABAT's auditors which was accepted by the Court.[38] Judge McMahon ordered that the case be removed from her docket on 24 March 2014. Shortly after that as a result of ABAT not resuming their required filings with the SEC and due to a lack of required shareholder meetings, a group of shareholders raised an additional complaint against the company in the Delaware Court of Chancery where ABAT was incorporated. See also[edit] • Jinan Qingqi • Sino-Forest Corporation • Focus Media Holding • N share References[edit] 1. ^ http://www.globenewswire.com/newsroom/news.html?d=225608 Advanced Battery Announces $10 Million Share Repurchase Program[dead link] 2. ^ "Income Statement". Yahoo Financial. Retrieved 8 July 2011. 3. ^ https://finance.yahoo.com/q/ks?s=ABAT+Key+Statistics Key Statistics 4. ^ "Profile". Yahoo Financial. Retrieved 8 July 2011. 5. ^ guest. "Are Advanced Battery Technologies' Financial Statements Accurate? | Alternative Energy Stocks". Retrieved 14 June 2020. 6. ^ "Initial Complaint Filed 4/4/2011 by Rosen Law Firm | Complaint | Government". Scribd. Retrieved 15 June 2020. 7. ^ "Advanced Battery Technology Hearing Part 1 | U.S. Securities And Exchange Commission | Settlement (Litigation)". Scribd. Retrieved 11 March 2020. 8. ^ "SEC Action: Advanced Battery Technologies, Inc., et al" (PDF). SEC Releases Related to Delinquent Filings Archive: 2015. 31 December 2015. Retrieved 11 March 2020. 9. ^ "Judge Approves Class Action Settlement for ABAT | Class Action | Lawsuit". Scribd. Retrieved 15 June 2020. 10. ^ "Judge McMahon on Receiverships". Scribd. Retrieved 15 June 2020. 11. ^ "Transcript With Judge Mcmahon on the China Hustle Tip of the Iceberg | U.S. Securities And Exchange Commission | Settlement (Litigation)". Scribd. Retrieved 15 June 2020. 12. ^ https://courtconnect.courts.delaware.gov/ under Southpaw Credit Opportunity Master Fund LP v. Advanced Battery Technologies, Inc., Case No. 9542-VCMR 13. ^ "Receivers Report November | Settlement (Litigation) | Social Institutions". Scribd. Retrieved 11 March 2020. 14. ^ http://www.thestreet.com/story/11171718/1/advanced-battery-stock-soars-abat.htmlAdvanced Battery Stock Soars (ABAT) 15. ^ Although, the various SEC reporting was inaccurate and fictitious and ABAT never was producing or selling the amount it claimed. There is some question whether this company still functions in any capacity at all. In July 2016 its website ceased to function. Also, some financial websites have stopped listing its ticker symbol. The company had gone through a significant downshift in sales and was forced top close its Wuxi factory, but has kept open is Dongguan and Harbin factories in a minor capacity state. The company was put in Receivership after a group of shareholders filed a complaint with the Delaware Court of Chancery. The Court appointed Receiver is Robert Seiden who has also been appointed to be a Receiver for several other fraudulent Chinese companies. It is not clear if the Chinese authorities are cooperating with Mr. Seiden or his team of international lawyers. The chairman is working with the banks and the Chinese government to dissolve the company and conclude the business. 16. ^ "Revised Order Granting Plaintiff's Motion for Contempt and Consolidation". Scribd. Retrieved 15 June 2020. 17. ^ "Products". Archived from the original on 24 July 2011. Retrieved 8 July 2011. 18. ^ http://www.marketwatch.com/story/tech-stock-highlight-for-advanced-battery-available-on-microstockprofit-2011-07-20?reflink=MW_news_stmp Tech Stock Highlight for Advanced Battery Available on MicroStockProfit 19. ^ Caplan, Joel. "Opening of ABAT's Dongguan Facility". 20. ^ "ABAT 2011-2012 CATALOGUE". Scribd. Retrieved 15 June 2020. 21. ^ Advanced Battery Technologies Distributor Relationships – Independent Research [1]Archived 6 April 2012 at the Wayback Machine 22. ^ "Updated ABAT SEC 10-K Distributor Report - Final Draft (1) | Form 10 K | Investing | Free 30-day Trial". Scribd. Retrieved 15 June 2020. 23. ^ Inc, Advanced Battery Technologies (21 November 2011). "Advanced Battery Technologies, Inc. Receives Delisting Notification From NASDAQ". GlobeNewswire News Room. Retrieved 15 June 2020. 24. ^ Caplan, Joel. "SEC Document" (PDF). 25. ^ "Receivers Report November | Settlement (Litigation) | Social Institutions". Scribd. Retrieved 15 June 2020. 26. ^ "Receivers Report November | Settlement (Litigation) | Social Institutions". Scribd. Retrieved 15 June 2020. 27. ^ http://www.mysanantonio.com/business/article/Advanced-Battery-Technologies-inks-deal-in-China-1412734.php#ixzz1RYbegSbtIt[permanent dead link] Advanced Battery Technologies inks deal in China 28. ^ "Advanced Battery Technologies inks deal in China". ASSOCIATED PRESS. Retrieved 8 July 2011. 29. ^ "Transcript With Judge Mcmahon on the China Hustle Tip of the Iceberg | U.S. Securities And Exchange Commission | Settlement (Litigation)". Scribd. Retrieved 15 June 2020. 30. ^ "Transcript With Judge Mcmahon on the China Hustle Tip of the Iceberg | U.S. Securities And Exchange Commission | Settlement (Litigation)". Scribd. Retrieved 15 June 2020. 31. ^ Google Finance, at https://www.google.com/finance?cid=664620 . 32. ^ Seeking Alpha website, at http://seekingalpha.com/symbol/ABAT . 33. ^ Penny Stock Weekly, online at http://www.pennystocksweekly.com/fundamental_stock_reports.php?symbol=ABAT . 34. ^ Seeking Alpha: Advanced Battery Technologies 35. ^ Newswire: Advanced Battery Technologies Responds to Allegations by Variant View Research [2] 36. ^ Market Watch: Advanced Battery Technologies and Ener1 Delisted and Pushing For Credibility [3] 37. ^ http://www.pacer.gov under Case 1:11-cv-02279 and Court of Appeals Docket #: 13-3173 38. ^ http://www.pacer.gov under Case 1:11-cv-02279 and Court of Appeals Docket #: 13-3173 External links[edit]

• • — Preceding unsigned comment added by 77.127.51.59 (talk) 21:22, 13 January 2021 (UTC)

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