ABAT American Battery Technology Company

Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable Polymer Lithium-Ion (PLI) batteries as well as a manufacturer of electric vehicles, today announced financial results for the first Quarter ending March 31, 2010.

First Quarter Financial Highlights

-  Revenue increased 82.9% year-over-year to $19.5 million.

-  Gross profit increased 91.0% year-over-year to $9.6 million.

-  Net income increased 85.1% year-over-year to $7.5 million.

-  Earnings per diluted share increased 47% year-over-year to $0.11.

-  Strong balance sheet with $56.1 million in cash and cash equivalents as of March 31, 2010.

Mr. Zhiguo Fu, CEO of ABAT, stated, "The increase in the portion of our revenue attributable to medium and large capacity batteries and electric vehicles has been beneficial to our overall business. The margins that we are able to achieve in selling larger capacity batteries are significantly greater than the margins we achieve in selling smaller capacity batteries, due primarily to the relative amount of competition in the different markets. We also show significant progress in our newly acquired electric vehicle business, which generated more sales to domestic and overseas customers in the first quarter and enhanced our top-line and bottom-line growth."

First Quarter 2010 Financial Results

The Company had total revenues of $19.5 million for the three months ended March 31, 2010, an increase of $8.9 million or 82.9%, compared to $10.7 million for the three months ended March 31, 2009. The increase in revenues was primarily due to the contribution of sales from the electric vehicle business, which the Company acquired on May 4, 2009. Sales of electric vehicles for the three months ended March 31, 2010 totaled $9.1 million. Sales of batteries to Wuxi ZQ are included in the Company's 2009 financial results and excluded from our 2010 financial results, since the Company acquired ownership of Wuxi ZQ in May 2009. During the quarter ended March 31, 2009 the Company recorded $0.2 million in revenue attributable to sales to Wuxi ZQ.

At April 30, 2010 the Company had a backlog of around $65.0 million for delivery throughout the next 12 months, including a battery backlog of approximately $51.4 million.

During the three months ended March 31, 2010, gross profit was $9.6 million, an increase of 91.0% year-over year. Gross margin in the first quarter of 2010 was 49.2%, compared to 47.1% a year ago. The increase in gross margin is primarily attributable to the 52.0% margin achieved in sales of medium capacity batteries, which produced only  42.8% margin in the same period of 2009.

Operating income in the first quarter of 2010 was $7.0 million, an increase of 69.2% year-over-year, from $4.1 million in the prior year's period.

Pre-tax income of $8.3 million in the first quarter of 2010, including a gain of $1.2 million from change in fair value of warrants, represents an increase of $3.6 million from the same period of 2009.  After taxes of $0.7 million accrued in the three months ended March 31, 2010, the Company's net income increased 85.1% to $7.5 million, or $0.11 per diluted share, from $4.1 million, or $0.07 per diluted share, in the same period of 2009.   

Conference Call

Management will host a conference call at 8:30 am ET on May 12, 2010 to discuss its first quarter financial results. Listeners may access the call by dialing 866-866-1333 or 404-260-1421 for international callers.

A replay of the call will be available from May 12, 2010 through June 11, 2010. Listeners may access the replay by dialing 866-430-1300 or 404-260-1414 for international callers; enter pin:4804300#, then press 4 to listen , then enter confirmation number 201005102187470#.

About Advanced Battery Technologies, Inc.

Advanced Battery Technologies, Inc. (Nasdaq:ABAT), founded in September 2002, develops, manufactures and distributes rechargeable Polymer Lithium-Ion (PLI) batteries. The Company's products include rechargeable PLI batteries for electric automobiles, motorcycles, mine-use lamps, notebook computers, walkie-talkies and other electronic devices. ABAT's batteries combine high-energy chemistry with state-of-the-art polymer technology to overcome many of the shortcomings associated with other types of rechargeable batteries. Early in 2009, the Company acquired Wuxi Angell Autocycle Co. Ltd., an electric vehicle business, and renamed it Wuxi Zhongqiang Autocycle Co., Ltd. ("Wuxi ZQ").  The Company has a New York office, with its executive offices and manufacturing facilities in China. 

Safe Harbor Statement

Certain statements in this release and other written or oral statements made by or on behalf of the Company are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. The forward-looking statements are subject to a number of risks and uncertainties including market acceptance of the Company's services and projects and the Company's continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.

ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	March 31,	December 31,
	2010	2009
	(Unaudited)
Current assets:
Cash and cash equivalents	$56,102,065	$52,923,358
Accounts receivable, net	22,098,595	22,406,927
Inventories, net	5,171,862	3,680,098
Loan receivable	1,600,000	1,600,000
Other receivables	247,946	107,751
Advance to suppliers, net	7,411,700	7,940,129
Total Current Assets	92,632,168	88,658,263
Property, plant and equipment, net	48,683,371	47,248,600
Total Fixed Assets	48,683,371	47,248,600
Other assets:
Investment in unconsolidated entity	783,618	785,057
Investment advance	1,463,100	1,457,034
Deposit for long-term assets	1,601,947	2,860,882
Intangible assets, net	14,151,009	14,317,502
Goodwill	2,482,603	2,472,311
Other assets	57,864	26,705
Total other assets	20,540,141	21,919,491
Total Assets	161,855,680	$157,826,354
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term loan	$ --	2,916,071
Accounts payable	792,427	670,254
Advance from customers	229,823	228,871
Accrued expenses and other payables	1,057,527	1,389,130
Total Current Liabilities	2,079,777	5,204,326
Long term liabilities:
Deferred tax liability	3,468,262	3,468,262
Warrant liability	16,015,461	17,221,335
Total Liabilities	21,563,500	25,893,923
Stockholders' Equity
Preferred stock, $0.001 face value, 5,000,000 shares authorized;
2 shares issued and 2 shares outstanding as of March 31, 2010 and December 31, 2009	$ --	--
Common stock, $0.001 par value, 150,000,000 shares authorized;	68,781	68,778
68,781,112 shares issued and 68,586,531 shares outstanding as of March 31, 2010 and 68,778,112 shares issued and 68,583,531 shares outstanding as of December 31, 2009
Additional paid-in-capital	74,529,711	74,114,122
Accumulated other comprehensive income	5,915,919	5,496,334
Retained earnings	60,277,260	52,752,687
Less: Cost of treasury stock (194,581 shares as of March 31, 2010 and December 31, 2009)	(499,490)	(499,490)
Total Stockholders' Equity	140,292,181	131,932,431
Total Liabilities and Stockholders' Equity	$161,855,680	$157,826,354

ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
	Three Months ended March 31,
	2010	2009
		(Restated)
Revenues	$19,549,017	$10,685,738
Cost of Goods Sold	9,933,316	5,651,189
Gross Profit	9,615,701	5,034,549
Operating Expenses
Selling, general and administrative	2,615,949	896,319
Operating income	6,999,752	4,138,230
Other Income (Expenses)
Interest income	107,198	74,348
Interest (expense)	(39,660)
Equity loss from unconsolidated entity	(1,439)	(9,798)
Change in fair value of warrants	1,205,874	464,686
Total other income (expenses)	1,271,973	529,236
Income Before Income Taxes	8,271,725	4,667,465
Provision for Income Taxes
Income tax-Current	747,152	602,482
Income tax-Deferred	--
Net income	$7,524,573	$4,064,983
Other Comprehensive Income
Foreign currency translation adjustment	419,585	(97,825)
Comprehensive Income	$7,944,159	$3,967,158
Earnings per share
Basic	$0.12	$0.09
Diluted	$0.11	$0.07
Weighted average number of common shares outstanding
Basic	61,538,798	47,055,374
Diluted	68,694,761	54,692,874

ADVANCED BATTERY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	For Three Months ended March 31,
	2010	2009
		(Restated)
Cash Flows From Operating Activities:
Net income	$7,524,573	$4,064,983
Adjustments to reconcile net income to net cash provided by (used in)operating activities:
Depreciation and amortization	1,142,360	190,584
Amortization of deferred consulting expenses	29,094	50,281
Amortization of stock based compensation expense	386,498	261,965
Equity loss of unconsolidated entity	1,439	9,798
Provision for doubtful accounts and inventory valuation allowance	478,549	--
Change in fair value of warrants	(1,205,874)	(464,686)
Changes in operating assets and liabilities:
Accounts receivable	11,639	(2,016,908)
Inventories	(1,478,361)	231,881
Other receivable & prepayments	306,784	227,176
Accounts payable, accrued expenses and other payables	(306,070)	1,294,663
Advances from customers	--	2,706
Net cash provided by (used in) operating activities	6,890,630	3,852,444
Cash Flows From Investing Activities:
Loan receivable	--	(19,355)
Deposit for long-term assets	(184,284)	(1,964,027)
Purchase of property, plant and equipment	(720,245)	(33,353)
Payment made on investment advance	--	(814,946)
Net cash used in investing activities	(904,529)	(2,831,681)
Cash Flows From Financing Activities
Repayment of bank loan	(2,930,000)	--
Purchase of treasury stock	--	(146,627)
Repayment of officer loan	--	(8,846)
Net cash provided by financing activities	(2,930,000)	(155,471)
Effect of exchange rate changes on cash and cash equivalents	122,606	(66,432)
Increase in cash and cash equivalents	3,178,707	798,859
Cash and Cash Equivalents - Beginning of period	52,923,358	32,746,155
Cash and Cash Equivalents - End of period	$56,102,065	$33,545,014
SUPPLEMENTAL CASH FLOW INFORMATION:
During the period, cash was paid for the following:
Interest expense	$47,324	$ --
Income taxes	$787,152	$ --
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock granted for stock based compensation	$72,030	$152,800

CONTACT:  Advanced Battery Technologies, Inc.

          Investor Relations Contact:

          Dan Chang, SVP Finance

          (212) 391-2752

          shuyuan.chang@gmail.com

          Rubenstein Investor Relations

          Tim Clemensen

          (212) 843-9337

          TClemensen@RubensteinIR.com