Annual report pursuant to Section 13 and 15(d)

Commitments and contingencies

v3.7.0.1
Commitments and contingencies
12 Months Ended
Dec. 31, 2016
Commitments and contingencies [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
23.
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 2017 to 2021, with an option to renew the lease. All leases are on a fixed repayment basis. None of the leases include contingent rentals. Minimum future commitments under these agreements as of December 31, 2016 are as follows:
 
For the years ending December 31
 
$
 
2017
 
 
2,329,897
 
2018
 
 
2,033,393
 
2019
 
 
1,574,790
 
2020
 
 
920,280
 
2021
 
 
920,280
 
 
 
 
7,778,640
 
 
Rent expenses for the years ended December 31, 2016 and 2015 were $1,858,577 and $1,639,444, respectively.
 
Investment commitment
 
On June 30, 2016, the Company entered into the Equity Purchase Agreement with Yipeng and the shareholders. Up to the date of issuance of this consolidated financial statements, the Company postponed the second closing as a result of the unfulfilled contract conditions (See Note 10).
 
Contingencies
 
On January 14, 2016, FirsTrust China, Ltd (“FirsTrust”) filed an amended complaint in the Delaware Chancery Court (amending its initial complaint filed February 25, 2015) naming Highpower as the defendant asserting a cause of action for breach of contract and conversion of stock, and seeking damages in the form of issuance of 150,000 shares or the value of such shares, plus interest thereon, attorneys’ fees and costs and expenses. On February 4, 2016, Highpower filed an answer, affirmative defenses and counterclaim against FirsTrust asserting claims for equitable rescission, declaratory relief and breach of contract, and seeking rescission of the contract, return of the 200,000 warrants and 150,000 shares of Highpower stock previously issued to FirsTrust, plus interest, attorneys’ fees and costs and expenses. On January 24, 2017, the court denied FirsTrust’s motion for judgment on the pleadings. The parties are continuing with pre-trial discovery, as well as settlement discussions. The Company believes that it has meritorious defenses and counterclaims and intends to defend and prosecute them vigorously.