Highpower International, Inc. (NASDAQ: HPJ), ("Highpower," or the "Company") a developer, manufacturer, and marketer of lithium and nickel-metal hydride (Ni-MH) rechargeable batteries, and a battery management systems and battery recycling provider, today announced that its wholly-owned subsidiary, Huizhou Highpower Technology Co., Ltd, has entered into an agreement ("Agreement") to acquire up to 50% equity interest in Huizhou Yipeng Energy Technology Co., Ltd. ("Huizhou Yipeng"), an electric vehicle power battery system solutions provider specializing in the plug-in hybrid electric vehicle (PHEV) and electric vehicle (EV) bus market in China.

Pursuant to the Agreement, the Company will invest RMB114.75 million (approximately $17.3 million) consisting of an aggregate of $5.2 million in cash and $12.1 million of power battery equipment into Huizhou Yipeng for a 50% equity interest. On August 10, 2016, the Company consummated the first purchase of  30.4% for RMB 15 million in cash (approximately $2.3 million) and power equipment equivalent to RMB 45 million (approximately $6.8 million). The purchase of the remaining equity interest of 14.6% for RMB 19.75 million in cash (approximately $2.9 million) and power equipment equivalent to RMB 35 million (approximately $5.3 million) is scheduled to close prior to November 5, 2016 subject to Huizhou Yipeng being approved prior to October 31, 2016 to be listed in the catalogue of industrial Standards of Auto Mobile Power Battery Cell, which is formulated by the Ministry of Industry and Information Technology of the People's Republic of China. The Company intends to fund the equity purchase with cash on hand, expected future cash flow, and if needed, approximately $2.0 million in borrowings under existing credit arrangements. Prior to entering into the Agreement, Highpower already held an existing 5% equity interest in Huizhou Yipeng. Highpower also has the right to purchase from existing Huizhou Yipeng shareholders additional equity for $0.4, million which would give Highpower a total of 51% equity interest in Huizhou Yipeng.

Huizhou Yipeng was founded in Huizhou City, Guangdong Province in January 2014, and is a new high-tech enterprise focusing on lithium-ion power battery systems in new energy vehicle application. Mr. Hongze Yu, the CEO of Huizhou Yipeng, has over twenty years of experience in driving growth strategy for companies in the Chinese-vehicle industry. Prior to Huizhou Yipeng, Mr. Yu was co-founder of Beijing JAYA Technology Co., Ltd., a company specializing in smart transportation started in 2005.