UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 13, 2018

 

HIGHPOWER INTERNATIONAL, INC.

_____________________________________________________

(Exact name of registrant as specified in its charter)

  

Delaware 001-34098 20-4062622
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

 

Building A1, Luoshan Industrial Zone, Shanxia, Pinghu, Longgang, Shenzhen, Guangdong, 518111, China

(Address, including zip code, of principal executive offices)

 

Registrant’s telephone number, including area code (86) 755-89686238

 

 

(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 under the Exchange Act (17 CFR 240.14a-12)

 

¨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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On November 13, 2018, Highpower International, Inc. (the “Company”) issued a press release announcing financial results for the period ended September 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and the information therein is incorporated herein by reference.

 

Item 7.01 Regulation FD Disclosure.

 

The information under Item 2.02 above is incorporated herein by reference. 

 

The information reported under Items 2.02 and 7.01 in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being "furnished" and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.   Description
99.1   Press Release dated November 13, 2018.

 

 

 

 

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 hereunto duly authorized.

 

Dated: November 13, 2018 Highpower International, Inc.
     
  /s/ Sunny Pan
  By:  Sunny Pan
  Its: Chief Financial Officer

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1    Press Release dated November 13, 2018.

 

 

 

Exhibit 99.1

  

Highpower International Reports Unaudited Third Quarter, First Nine Months 2018 Financial Results

 

SAN DIEGO, CALIFORNIA and SHENZHEN, China, November 13, 2018 /PRNewswire/ -- Highpower International, Inc. (NASDAQ: HPJ) ("Highpower" or the "Company"), a developer, manufacturer, and marketer of lithium ion and nickel-metal hydride (Ni-MH) rechargeable batteries, battery management systems, and a provider of battery recycling, today announced its financial results for the third quarter ended September 30, 2018.

 

Third Quarter 2018 Highlights (all results compared to prior year period)

 

·Net sales for the third quarter of 2018 increased 26.8% to $90.6 million from $71.4 million. Excluding the impact of Ganzhou Highpower Technology Co., Ltd. ("GZ Highpower"), net sales increased 41.8% to $90.6 million from $63.9 million.
·Lithium business net sales increased 39.1% to $68.6 million from $49.3 million.
·Gross margin increased to 19.3% of net sales compared to 19.0%.
·Net income attributable to the Company increased 21.7% to $6.1 million, or $0.39 per diluted share, compared to $5.0 million, or $0.32 per diluted share. Excluding GZ Highpower, net income attributable to the Company increased 29.4% to $6.1 million from $4.7 million.

 

Mr. George Pan, Chairman and CEO of Highpower International, commented, “During the third quarter of 2018, we once again achieved net sales growth that surpassed our guidance thanks to healthy growth in both our lithium ion and Ni-MH battery businesses. New and existing customers in the high-end consumer product, industrial application, and artificial intelligence product industries in particular grew our lithium ion battery business. In addition, our Ni-MH battery business benefited from increased demand generated by the trend of consumer electronics providers switching from one-time-use batteries and nickel-cadmium batteries to clean re-chargeable batteries.

 

“The high price of raw materials in the third quarter declined slightly quarter over quarter. We were also able to improve production efficiency and scale, which helped us maintain our gross margin from the prior year period. At the same time, we are concerned about the uncertain impacts from global trade conflicts in the near future. However, we will spare no effort to execute on our strategy of producing higher quality and safer battery products and services while managing our prices, operations, and customer expectations to minimize the impact,” Mr. Pan concluded.

 

Third Quarter and First Nine Months of 2018 Financial Results

 

Net Sales

 

Net sales for the third quarter of 2018 increased 26.8% to $90.6 million from $71.4 million in the prior year period. The increase was driven by sales in the Company's lithium business, which grew 39.1% to $68.6 million from $49.3 million in the prior year period. In addition, sales in the Ni-MH business grew 53.9% year over year to $22.0 million. Excluding the impact of GZ Highpower, net sales increased 41.8% to $90.6 million from $63.9 million.

 

 

 

 

Net sales increased 24.4% to $205.3 million in the first nine months ended September 30, 2018, compared to $165.0 million in the same period of 2017. Excluding the impact of GZ Highpower, net sales increased 34.3% to $205.3 million from $152.9 million.

 

Gross Profit

 

Gross profit for the third quarter of 2018 increased 29.1% to $17.5 million from $13.6 million in the prior year period. Gross margin was 19.3% and 19.0% for the third quarters of 2018 and 2017, respectively. Excluding GZ Highpower, gross margin was 19.3% compared to 19.8%.

 

Gross profit for the first nine months of 2018 increased 2.3% to $36.4 million from $35.6 million in the prior year period. Gross margin was 17.7% and 21.6% for the nine months ended September 30, 2018 and 2017, respectively. Excluding GZ Highpower, gross margin was 17.7% compared to 21.8%.

 

Operating Expenses

 

·Research and development (R&D) expenses for the third quarter of 2018 increased to $3.5 million from $2.4 million in the prior year period. As a percentage of net sales, R&D expenses increased to 3.9% from 3.4% in the prior year period.

 

During the first nine months of 2018, research and development expenses increased to $9.7 million, or 4.7% of net sales, from $6.4 million, or 3.9% of net sales, for the prior year period.

 

·Selling and distribution expenses for the third quarter of 2018 increased to $2.6 million from $1.9 million in the prior year period. As a percentage of net sales, selling and distribution expenses increased to 2.9% from 2.6% in the prior year period.

 

During the first nine months of 2018, selling and distribution expenses increased to $6.7 million, or, 3.3% of net sales, from $5.2 million, or 3.2% of net sales, for the nine months ended September 30, 2017.

 

·General and administrative expenses for the third quarter of 2018 increased to $5.8 million from $4.0 million in the prior year period. The increase was mainly due to an increase in compensation. As a percentage of net sales, general and administrative expenses increased to 6.4% from 5.5% in the prior year period.

 

During the first nine months of 2018, general and administrative expenses increased to $13.8 million, or 6.7% of net sales, from $10.0 million, or 6.1% of net sales, for the nine months ended September 30, 2017.

 

Net Income

 

Net income attributable to the Company for the third quarter of 2018 increased 21.7% to $6.1 million from $5.0 million in the prior year period. Net income attributable to the Company per diluted share for the third quarter of 2018 increased to $0.39 from $0.32 in the prior year period. Excluding GZ Highpower, net income attributable to the Company increased 29.4% to $6.1 million from $4.7 million in the prior year period.

 

 

 

 

For the quarter ended September 30, 2018 and 2017, the Company's weighted average diluted shares outstanding used in computing diluted share were 15,597,257 and 15,518,764, respectively.

 

Net income attributable to the Company for the first nine months of 2018 decreased 35.4% to $7.7 million from $11.9 million in the prior year period. Net income attributable to the Company per diluted share for the first nine months of 2018 decreased to $0.49 from $0.77 in the prior year period. Excluding GZ Highpower, net income attributable to the Company for the first nine months of 2018 decreased 31.4% to $7.7 million from $11.2 million in the prior year period.

 

For the nine months ended September 30, 2018 and 2017, the Company's weighted average diluted shares outstanding used in computing diluted share were 15,600,546 and 15,563,012, respectively.

 

EBITDA

 

EBITDA for the third quarter of 2018 increased 23.0% to $9.0 million from $7.3 million in the prior year period. EBITDA for the first nine months of 2018 decreased 22.6% to $14.6 million from $18.8 million in the prior year period.

 

A table reconciling EBITDA, a non-GAAP financial measure, to the appropriate GAAP measure is included with the Company's financial information below.

 

Balance Sheet Highlights        
   September 30,   December 31, 
($ in millions, except per share data)  2018   2017 
   (Unaudited)     
   $   $ 
Cash  $8.0   $14.5 
Total Current Assets  $193.6   $156.0 
Total Assets  $263.8   $220.3 
           
Total Current Liabilities  $192.7   $152.3 
Total Liabilities  $192.7   $153.1 
Total Equity  $71.1   $67.2 
Total Liabilities and Equity  $263.8   $220.3 
Book Value Per Share  $4.57   $4.33 

 

Financial Outlook

 

For the fourth quarter of 2018, the Company expects net revenues to grow around 30% year over year, excluding the impact from GZ Highpower. Gross margin is expected to be similar to that of the third quarter of 2018. The Company will closely monitor all potential risks and uncertain impacts related to the trade conflict between the U.S. and China, raw material prices, and exchange rates.

 

 

 

 

Conference Call Details

The Company will hold a conference call on Tuesday, November 13, 2018, at 10:00 AM Eastern Time, or 11:00 PM Beijing Time, to discuss the financial results. Participants may access the call by dialing the following numbers:

 

United States and Canada: 877-407-3108

International: 201-493-6797

 

To listen to the live webcast, please go to www.highpowertech.com and click on the conference call link, or go to https://78449.themediaframe.com/dataconf/productusers/hpj/mediaframe/27472/indexl.html. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

 

About Highpower International, Inc.

Highpower International was founded in 2001 and produces high-quality Nickel-Metal Hydride (Ni-MH) and lithium-based rechargeable batteries used in a wide range of applications such as electric buses, bikes, energy storage systems, power tools, medical equipment, digital and electronic devices, personal care products, and lighting, etc. Highpower's target customers are Fortune 500 companies and top 20 companies in each vertical segment. With advanced manufacturing facilities located in Shenzhen, Huizhou, and Ganzhou of China, Highpower is committed to clean technology, not only in the products it makes, but also in the processes of production. The majority of Highpower International's products are distributed to worldwide markets mainly in the United States, Europe, China and Southeast Asia.

 

Use of Non-GAAP Measures

The Company has supplemented its reported GAAP (generally accepted accounting principles) financial information with non-GAAP measures. EBITDA was derived by taking earnings before interest expense (net), taxes, depreciation and amortization. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The Company believes this non-GAAP measure is useful to investors as it provides a basis for evaluating the Company's operating results in the ordinary course of its operations. This non-GAAP measure is not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with U.S. GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with, and not in lieu of, the corresponding GAAP measures. EBITDA is reconciled in the table below to the most directly comparable measure as reported in accordance with GAAP.

 

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 that are not historical facts. Such forward-looking statements include the proposed transaction regarding Ganzhou Highpower, approval by Highpower’s board and Highpower’s resulting equity ownership, Highpower’s cash position and growth, production capacity, research and development efforts, strategic partnerships and business and financial expectations. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results to differ materially from the results expressed or implied by such statements, including, without limitation, t inability to successfully expand our production capacity and improve production efficiency and scale; fluctuations in the cost of raw materials; risks and uncertainties related to the trade conflict between the U.S. and China; 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; fluctuations in exchange rates; our ability to maintain increased margins; our dependence on the growth in demand for smart wearable devices and energy storage systems, and other digital products 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 solutions, including our lithium ion batteries; and our ability to continue R&D development to keep up with technological changes. For a discussion of these and other risks and uncertainties see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's public filings with the SEC. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.

 

 

 

 

CONTACT:

 

Highpower International, Inc.

Sunny Pan

Chief Financial Officer

Tel: +86-755-8968-6521

Email: ir@highpowertech.com

 

Yuanmei Ma

Investor Relations Manager

Tel: +1-909-214-2482

Email: ir@highpowertech.com

 

ICR, Inc.

Rose Zu

Tel: +1-646-931-0303

Email: ir@highpowertech.com

 

 

 

 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

 

   September 30,   December 31, 
   2018   2017 
   (Unaudited)     
   $   $ 
ASSETS          
Current Assets:          
Cash   7,981,782    14,502,171 
Restricted cash   31,622,572    25,953,946 
Accounts receivable, net   81,610,241    58,252,999 
Amount due from a related party   259,995    1,165,838 
Notes receivable   273,164    2,606,517 
Advances to suppliers   4,487,495    6,050,531 
Prepayments and other receivables   8,804,905    4,268,527 
Foreign exchange derivative assets   -    236,436 
Inventories   58,567,663    42,946,644 
           
Total Current Assets   193,607,817    155,983,609 
           
Property, plant and equipment, net   51,452,906    46,520,776 
Long-term prepayments   3,778,665    3,715,445 
Land use rights, net   2,444,474    2,639,631 
Other assets   719,028    748,431 
Deferred tax assets, net   1,260,108    750,267 
Long-term investments   10,535,177    9,906,379 
           
TOTAL ASSETS   263,798,175    220,264,538 
           
LIABILITIES AND EQUITY          
           
LIABILITIES          
Current Liabilities:          
Accounts payable   69,311,491    60,368,012 
Deferred government grants   472,949    309,638 
Short-term loans   24,318,587    10,128,646 
Non-financial institution borrowings   8,701,075    10,756,158 
Notes payable   54,989,994    54,859,478 
Foreign exchange derivative liabilities   480,459    - 
Amount due to related parties   6,127,007    - 
Other payables and accrued liabilities   24,279,551    12,243,345 
Income taxes payable   3,972,006    3,609,391 
           
Total Current Liabilities   192,653,119    152,274,668 
           
Income taxes payable, noncurrent   -    777,685 
           
TOTAL LIABILITIES   192,653,119    153,052,353 
           
COMMITMENTS AND CONTINGENCIES   -    - 

 

 

 

 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

 

   September 30,   December 31, 
   2018   2017 
   (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, 15,559,658 shares issued and outstanding at September 30, 2018 and 15,509,658 at December 31, 2017, respectively)   1,556    1,551 
Additional paid-in capital   13,657,599    12,709,756 
Statutory and other reserves   6,549,815    6,549,815 
Retained earnings   52,190,975    44,481,568 
Accumulated other comprehensive (loss) income   (1,254,889)   3,469,495 
           
TOTAL EQUITY   71,145,056    67,212,185 
           
TOTAL LIABILITIES AND EQUITY   263,798,175    220,264,538 

 

 

 

 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Stated in US Dollars)

 

  

Three months ended

September 30,

  

Nine months ended

September 30,

 
   2018   2017   2018   2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
   $   $   $   $ 
Net sales   90,557,479    71,405,560    205,264,892    164,972,338 
Cost of sales   (73,047,063)   (57,845,224)   (168,878,223)   (129,405,402)
Gross profit   17,510,416    13,560,336    36,386,669    35,566,936 
                     
Research and development expenses   (3,535,882)   (2,433,928)   (9,690,479)   (6,385,144)
Selling and distribution expenses   (2,625,016)   (1,859,762)   (6,721,762)   (5,220,985)
General and administrative expenses   (5,796,496)   (3,959,731)   (13,821,494)   (10,034,694)
Foreign currency transaction gain (loss)   1,925,179    (816,593)   2,581,418    (1,645,095)
Total operating expenses   (10,032,215)   (9,070,014)   (27,652,317)   (23,285,918)
                     
Income from operations   7,478,201    4,490,322    8,734,352    12,281,018 
                     
Changes in fair value of warrant liability   -    -    -    259 
Changes in fair value of foreign exchange derivative assets (liabilities)   (410,061)   (146,481)   (831,486)   (146,481)
Government grants   261,538    345,941    1,580,037    904,753 
Other income (expense)   27,998    (251,166)   108,140    44,480 
Equity in earnings of investees   184,803    1,087    501,123    106,412 
Gain on dilution in equity method investee   -    5,071    -    496,396 
Gain on sales of long-term investment   -    1,664,377    -    1,664,377 
Interest (expense) income   (518,912)   57,663    (1,073,578)   (926,185)
Income before taxes   7,023,567    6,166,814    9,018,588    14,425,029 
                     
Income taxes expenses   (909,539)   (1,013,919)   (1,309,181)   (2,197,392)
Net income   6,114,028    5,152,895    7,709,407    12,227,637 
                     
Less: net income attributable to non-controlling interest   -    128,702    -    296,558 
Net income attributable to the Company   6,114,028    5,024,193    7,709,407    11,931,079 
                     
Comprehensive income                    
Net income   6,114,028    5,152,895    7,709,407    12,227,637 
Foreign currency translation (loss) gain   (3,392,724)   1,258,937    (4,724,384)   2,743,650 
Comprehensive income   2,721,304    6,411,832    2,985,023    14,971,287 
                     
Less: comprehensive income attributable to non-controlling interest   -    139,461    -    317,807 
Comprehensive income attributable to the Company   2,721,304    6,272,371    2,985,023    14,653,480 
                     
Earnings per share of common stock attributable to the Company                    
- Basic   0.39    0.33    0.50    0.78 
- Diluted   0.39    0.32    0.49    0.77 
                     
Weighted average number of common stock outstanding                    
- Basic   15,559,658    15,369,674    15,542,076    15,270,898 
- Diluted   15,597,257    15,518,764    15,600,546    15,563,012 

 

Reconciliation of Net Income to EBITDA

 

  

Three months ended

September 30,

  

Nine months ended

September 30,

 
   2018   2017   2018   2017 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
   $   $   $   $ 
Net income attributable to the Company   6,114,028    5,024,193    7,709,407    11,931,079 
                     
Interest expenses   518,912    (57,663)   1,073,578    926,185 
Income taxes expenses   909,539    1,013,919    1,309,181    2,197,392 
Depreciation and Amortization   1,490,646    1,362,196    4,494,518    3,792,178 
                     
EBITDA   9,033,125    7,342,645    14,586,684    18,846,834 

 

 

 

 

HIGHPOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

 

   Nine Months Ended September 30, 
   2018   2017 
   (Unaudited)   (Unaudited) 
   $   $ 
Cash flows from operating activities          
Net income   7,709,407    12,227,637 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:          
Depreciation and amortization   4,494,518    3,792,178 
(Reversal) allowance for doubtful accounts, net   (787,034)   48,866 
Loss on disposal of property, plant and equipment   223,040    57,277 
Deferred tax   (581,710)   153,625 
Changes in fair value of foreign exchange derivative assets (liabilities)   741,786    166,387 
Equity in earnings of investees   (501,123)   (106,412)
Gain on dilution in equity method investee   -    (496,396)
Gain on sales of long-term investment   -    (1,664,377)
Share based compensation   735,348    86,921 
Changes in fair value of warrant liability   -    (259)
Changes in operating assets and liabilities:          
Accounts receivable   (25,743,046)   (8,517,071)
Other assets   (8,097)   - 
Notes receivable   2,305,455    (5,543,798)
Advances to suppliers   1,289,133    - 
Prepayments and other receivables   (4,568,639)   (8,775,985)
Amount due from a related party   885,886    7,691,900 
Amount due to related parties   -    (1,557,682)
Inventories   (18,990,697)   (11,753,127)
Accounts payable   9,857,431    7,049,819 
Deferred government grants   256,932    11,637 
Other payables and accrued liabilities   13,135,351    1,394,691 
Income taxes payable   (223,682)   156,744 
Net cash flows used in operating activities   (9,769,741)   (5,577,425)
           
Cash flows from investing activities          
Acquisitions of property, plant and equipment   (9,796,130)   (7,297,901)
Proceeds from sale of long-term investment   -    10,453,475 
Payment for long-term investment   (321,067)   - 
Net cash flows (used in) provided by investing activities   (10,117,197)   3,155,574 
           
Cash flows from financing activities          
Proceeds from short-term loans   21,427,063    8,797,727 
Repayments of short-term loans   (5,866,424)   (17,594,229)
Proceeds from a related party   6,031,465    - 
Proceeds from non-financial institution borrowings   -    10,306,243 
Repayments of non-financial institution borrowings   (1,528,888)   (3,828,033)
Proceeds from notes payable   86,130,613    62,193,463 
Repayments of notes payable   (82,740,379)   (48,408,417)
Proceeds from exercise of employee options   -    635,484 
Net cash flows provided by financing activities   23,453,450    12,102,238 
Effect of foreign currency translation on cash and restricted cash   (4,418,275)   2,591,502 
Net (decrease) increase in cash and restricted cash   (851,763)   12,271,889 
Cash and restricted cash - beginning of period   40,456,117    20,538,033 
Cash and restricted cash - end of period   39,604,354    32,809,922 
           
Supplemental disclosures for cash flow information:          
Cash paid for:          
Income taxes   2,114,573    1,464,592 
Interest expenses   1,285,288    1,402,447 
Non-cash transactions          
Shares issued for legal case settlement   212,500    - 
Offset of deferred government grant and property, plant and equipment   66,398    171,403