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<DESCRIPTION>ADVANCED BATTERY 10-KSB 12/31/2004
<TEXT>
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                            _____________________

                                 FORM 10-KSB
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

     For the fiscal year ended December 31, 2004.

                                      OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

                         Commission File No. 0-13337

                      ADVANCED BATTERY TECHNOLOGIES, INC,
                ----------------------------------------------
               	(Name of Small Business Issuer in its Charter)

          Delaware                                       22-2497491
   ------------------------------------------------------------------------
  (State or other jurisdiction                  (I.R.S. Employer ID Number)
   of incorporation or organization)

              136-14 Northern Blvd., Suite 8E, Flushing, NY 11354
              ---------------------------------------------------
                   (Address of principal executive offices)

          Issuer's Telephone Number, including Area Code: 718-359-6866

        Securities Registered Pursuant to Section 12(b) of the Act: None

	Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, $.001 par value per share

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes  [X]   No  [ ]

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B in this form, and no disclosure will be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State the issuer's revenues for its most recent fiscal year: $ 1,191,509.

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates, computed by reference to the price at which the common
equity was sold, or the average bid and ask prices of such common equity, as
of a specified date within the past 60 days.

The aggregate market value of the Registrant's common stock, $.001 par value,
held by non-affiliates as of March 28, 2005 was $8,441,348.

As of March 28, 2005 the number of shares outstanding of the Registrant's
common stock was 24,237,094 shares, $.001 par value.

     Transitional Small Business Disclosure Format:  Yes [ ]   No  [X]

                  DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>

              FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED

     In addition to historical information, this Annual Report contains
forward-looking statements, which are generally identifiable by use of the
words "believes," "expects," "intends," "anticipates," "plans to,"
"estimates," "projects," or similar expressions. These forward-looking
statements represent Management's belief as to the future of Advanced
Battery Technologies.  Whether those beliefs become reality will depend on
many factors that are not under Management's control.  Many risks and
uncertainties exist that could cause actual results to differ materially
from those reflected in these forward-looking statements. Factors that
might cause such a difference include, but are not limited to, those
discussed in the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Risk Factors That May Affect
Future Results." Readers are cautioned not to place undue reliance on these
forward-looking statement. We undertake no obligation to revise or publicly
release the results of any revision to these forward-looking statements.

                                   PART 1

Item 1.  Business

     Advanced Battery Technologies, Inc. is a holding company with one
subsidiary:   Cashtech Investment Limited, a British Virgin Islands
corporation.  Cashtech Investment Limited has only one asset, which is 70%
of the capital stock of Heilongjiang ZhongQiang Power-Tech Co., Ltd., a
China limited liability company ("ZQ Power-Tech").

     ZQ Power-Tech

     ZQ Power-Tech is a limited liability company that was organized under
the laws of the People's Republic of China in August 2002.  ZQ Power-Tech's
offices and manufacturing facility are located in northern China, in the
Province of Heilongjiang, in the Economy & High-Tech Development Zone of
Shuangcheng, which is a suburb of Harbin.  The location is approximately
1,000 km northeast of Beijing.

     The Harbin Institute of Technology is one of the leading technological
institutions in Asia.  Two of its engineering professors now serve on ZQ
Power-Tech's Scientific Advisory Board, along with a professor of engineering
at the China Engineering Academy.  This close association with the Harbin
Institute of Technology provides ZQ Power-Tech with a rich source of
technological talent, such that ZQ Power-Tech's research staff is filled by
experienced engineers, many with masters and Ph.D degrees.
                                    -1-
<PAGE>

     ZQ Power-Tech designs, manufactures and markets rechargeable polymer
lithium-ion ("PLI") batteries.  PLI batteries produce a relatively high
average of 3.8 volts per cell, which makes them attractive in terms of both
weight and volume.  Additionally, they can be manufactured in very thin
configurations and with large footprints.  PLI cells can be configured in
almost any prismatic shape, and can be made thinner than 0.0195 inches (0.5
mm) to fill virtually any shape efficiently.  This combination of power and
versatility makes rechargeable PLI batteries particularly attractive for
use in consumer products such as portable computers, personal digital
assistants (PDA's) and cellular telephones.

     ZQ Power-Tech's batteries combine high-energy chemistry with state-
of-the-art polymer technology.  Every battery component is solid, which
means that there are no liquids that need to be contained by bulky, heavy
cell housings.  The result is a safe, thin, lightweight rechargeable
battery with a wide operating temperature range.  Similar to lithium-ion
prismatic rechargeable cells, the ZQ Power-Tech polymer cells do not
exhibit a memory problem.  This means that they can be recharged at any
state of charge, without first having to be completely discharged.

     At the present time, ZQ Power-Tech produces only one finished
product.  This is a miner's lamp equipped with a rechargeable PLI battery
that ZQ Power-Tech sells to an agency of the Chinese government.  All of ZQ
Power-Tech's other contracts are for battery cells, which are sold on an
OEM basis as a component of a finished product.  Among ZQ Power-Tech's
current customers are companies that use our batteries in cell phones,
companies that use them in laptop computers, and a company that uses our
batteries in its digital cameras.

     ZQ Power-Tech has produced an automobile battery under a contract
from the government of Harbin.  This rechargeable PLI battery weighs
approximately 500 pounds, and is designed for commuter vehicles.  It
permits a top speed of 120 mph, and a traveling distance of 240 miles per
charge.  The battery discharges 5% of its energy per hour, when not in use,
so daily recharging is necessary.  The battery can be recharged in 3 to 4
hours.  ZQ Power-Tech currently has an order from the Heilongjiang Bus
Company to supply polymer lithium-ion batteries to power its commuter
buses.

     ZQ Power-Tech has focused its initial marketing activities in
southeast Asia, primarily China, Taiwan and Japan.  As it expands its
manufacturing capacity, ZQ Power-Tech intends to expand its marketing
efforts worldwide.

     Backlog

     ZQ Power Tech's backlog of sales orders totaled approximately
$8,000,000 on March 25, 2005.  On March 25, 2004 our backlog of orders
totaled $578,000.
                                    -2-
<PAGE>

     In the summer of 2004 ZQ Power-Tech received a one-year $21 million
order to supply   3.7 volt PLI battery sets for electric cars manufactured
by Aiyingsi Company.  That project has been delayed, however, as Aiyingsi
has not finalized the specifications for the battery.  We expect that order
to be renewed sometime in 2005.

     Marketing

     To date ZQ Power-Tech has conducted most of its marketing direct to
its customers.  ZQ Power-Tech does have one sales agent, Easywood Holdings
Limited of Hong Kong.  Easywood was responsible for approximately 35% of ZQ
Power-Tech's sales in 2004.

     We are currently negotiating marketing relationships with a number of
companies in Asia, Europe and the United States.  Our plan is to
significantly expand our market presence as our facilities reach an
operating level sufficient to service a much higher level of sales.

     Environmental Regulation

     ZQ Power-Tech's operations produce no significant quantity of
effluent or air-borne pollution.  Therefore ZQ Power-Tech does not incur
any significant cost as a result of the environmental regulations of the
Chinese government.

     Intellectual Property

     ZQ Power-Tech owns one Chinese patent and has applied for five more.
 It owns a patent for a cellular phone battery pole plate.  It has applied
for patents on:

     -  A polymer lithium-ion battery and its production method.
     -  A large capacity polymer lithium-ion battery and its production
        method.
     -  An ultra-thin polymer lithium-ion battery for a miner's lamp and its
        production method.
     -  A walkie-talkie lithium-ion battery and its production method.
     -  A mobile phone battery and its production method.

     During 2003 ZQ Power Tech spent $493,114 on research and development
as it completed the formulae for its polymer lithium-ion batteries.  During
2004 our research and development expenditures fell to $65,415, as we
reoriented our focus toward implementing the assembly lines needed to
introduce our products to the market on a mass scale.  We expect our
research and development expenditures to remain modest through 2005, as our
cash resources will continue to be focused on the build-out of our
facility.  However, when the build-out is completed and our cash and
management personnel can again be focused on research, we intend to invest
heavily in the development of a second-generation product line.

                                    -3-
<PAGE>

     The technology utilized in producing polymer lithium-ion batteries is
widely available throughout the world, and is utilized by many competitors,
both great and small.  ZQ Power-Tech's patents give it some competitive
advantage with respect to certain products.  However, the key to
competitive success will be ZQ Power Tech's ability to deliver high quality
products in a cost-efficient manner.  This, in turn, will depend on the
quality and efficiency of the assembly lines that we have been developing
at our plant in Harbin.

     Employees

     Advanced Battery has only two employees:  its Chairman and its
Secretary.   ZQ Power-Tech has 360 employees.  28 are involved in
administration and 8 in marketing.  The remainder are employed in
production capacities.  None of our employees belongs to a collective
bargaining unit.

Item 2.  Properties

     The People's Republic of China has give ZQ Power-Tech a lease to use
the 72,000 square meter campus in Harbin, China where ZQ Power-Tech's
offices and manufacturing facility are located.  The campus is 24 km from
the nearest airport.  The nearest port is Da Lian.  The lease expires in
September 2043.  ZQ Power-Tech is not required to pay any rental for the
property as long as it utilizes the property for manufacturing.

     During 2004 ZQ Power-Tech commenced an ongoing program of expanding
its production facility.  It now has a production capacity of approximately
$20,000,000 per year, depending on the specific products being produced.
Management intends to increase the production capacity to $40,000,000 per
year during 2005.  In addition to building additional factories on its
campus, ZQ Power-Tech has an ongoing training program for production
workers.  ZQ Power-Tech expects that during 2005 it will add 840 production
workers to its current 360 employees, which will significantly increase ZQ
Power-Tech's production capacity.

     In November 2003 ZQ Power-Tech received ISO9001 certification
pertaining to Manufacturing and Quality Control Approval.

Item 3.  Legal Proceedings

     None.

Item 4.  Submission of Matters to a Vote of Security Holders

     Not applicable.
                                    -4-
<PAGE>

                                   PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder
         Matters and Small Business Issuer Purchases of Equity Securities

     (a) Market Information

     The Company's common stock is quoted on the OTC Bulletin Board under
the symbol "ABAT.OB."  Set forth below are the high and low bid prices for
each of the eight quarters in the past two fiscal years.  The reported bid
quotations reflect inter-dealer prices without retail markup, markdown or
commissions, and may not necessarily represent actual transactions.   All
quotations have been adjusted as if the 1-for-10 reverse stock split
implemented in July 2004 had occurred prior to January 1, 2003.


                                    Bid
                             -----------------
Quarter Ending               High          Low

March 31, 2003               $  .10     $  .10
June 30, 2003                $  .35     $  .10
September 30, 2003           $  .30     $  .30
December 31, 2003            $  .30     $  .30

March 31, 2004               $ 1.20     $  .30
June 30, 2004                $ 9.40     $ 1.00
September 30, 2004           $ 7.50     $ 1.75
December 31, 2004            $ 1.85     $  .46

     (b) Shareholders

     Our shareholders list contains the names of 409 registered stockholders
of record of the Company's Common Stock.

     (c)  Dividends

     The Company has never paid or declared any cash dividends on its
Common Stock and does not foresee doing so in the foreseeable future.  The
Company intends to retain any future earnings for the operation and
expansion of the business.  Any decision as to future payment of dividends
will depend on the available earnings, the capital requirements of the
Company, its general financial condition and other factors deemed pertinent
by the Board of Directors.
                                    -5-
<PAGE>

     (d)  Sale of Unregistered Securities

     Advanced Battery did not effect any unregistered sales of equity
securities during the 4th quarter of 2004.

     (e) Repurchase of Equity Securities

     The Company did not repurchase any of its equity securities that were
registered under Section 12 of the Securities Act during the 4th quarter of
2003.

Item 6.  Management's Discussion and Analysis of Results of Operations
         and Financial Condition

     Results of Operations

     During the year ended December 31, 2003 ZQ Power-Tech's activities
were focused on development of its product line and the build-out of its
manufacturing facility.  ZQ Power-Tech recorded its first significant
revenues in the first half of 2004, ending June 30, 2004.  For that six
month period, it recorded sales totaling $968,675.  Most of these sales
were made to five customers.

     The Company's level of sales fell in the second half of 2004 to
$222,834.  The reduction occurred primarily because the Company in the late
summer began focusing on fulfilling one major order from Aiyingsi Company,
only to have the order delayed into 2005 by the customer.   In addition,
deliveries were slow in part because the management personnel at ZQ Power-
Tech were focused on completing additional factory facilities at ZQ Power-
Tech's campus in Heilongjiang.  These facilities have now been completed,
resulting in a substantial increase in the manufacturing capacity of ZQ
Power-Tech.

     Currently, ZQ Power-Tech has a backlog of approximately $8 million,
most of which comes from seven customers.  We do not include in our current
backlog the $21 million order placed by Aiyingsi in 2004, since the
delivery times for that order have been delayed indefinitely. We do expect,
however, that we will commence shipments to Aiyingsi during 2005.

     ZQ Power-Tech realized a 32% gross margin on its sales in 2004,
ranging from 44% in the first quarter to 25% in the third quarter,
reflecting a different mix of products sold in each  quarter.  The gross
margin ratio in the future will depend considerably upon which of ZQ Power-
Tech's products are dominating sales.  So it is premature to predict
whether the 32% level achieved to date will be maintained.

                                    -6-
<PAGE>

     The general and administrative expenses recorded in 2004
substantially exceeded revenue.  This was primarily the result of low
revenue.  However, general and administrative expense of $2,786,900
included a non-cash expense of $2,101,116 attributable to consulting fees
and salaries that were prepaid by the Company issuing common stock to the
consultants and employee.  At December 31, 2004 there remained $1,792,634
in prepaid expenses on the Company's balance sheet, which will be
amortized as expenses over the next three years.   However the expected
increase in ZQ Power-Tech's net sales should result in a better ratio of
expenses to sales.

     The Company's revenue less expenses produced a net loss of $2,349,704
for 2004.  However, because Advanced Battery owns only 70% of ZQ Power-
Tech, the loss was reduced by $89,395 on Advanced Battery's statements of
operations, representing 30% of the loss incurred by ZQ Power-Tech.  If, in
the future, ZQ Power-Tech reports earnings, the earnings will be similarly
discounted by 30% on Advanced Battery's statements of operations, as long
as there remains 30% of ZQ Power-Tech that is not owned by Advanced
Battery.

     Liquidity and Capital Resources

     Until December 2004, the development and initial operations of ZQ
Power-Tech were  financed primarily by contributions to capital made by
Zhiguo Fu, the Company's Chairman.  On December 1, 2004, ZQ Power-Tech
entered into a Loan Agreement with China Financial Bank, and received a
loan of 20 million RMB (approximately $2.4 million).  The Loan Agreement
requires that half of the principal be paid in a balloon in November 2005
and half in November 2006.  Interest at 8.064% per annum is payable
monthly.  $1.9 million of the obligation is secured by a pledge of ZQ
Power-Tech's manufacturing facilities; the remainder of the debt is secured
by a pledge of our realty assets.

     The arrangement with China Financial Bank provided ZQ Power-Tech with
working capital.  Nevertheless, the expansion of its manufacturing
facilities that has been ongoing since early 2004 required that Mr. Fu and
two business associates contribute $4,832,976 to fund construction.  In
January 2005 Advanced Battery compensated Mr. Fu and his associates for 70%
of that contribution by issuing them a total of 11,276,947 common shares.
The remaining 30% of the cash was treated as a contribution to the capital
of ZQ Power-Tech, 30% of which is owned by Mr. Fu.

     At December 31, 2004 ZQ Power-Tech had a working capital deficit of
$1,752,645, an increase in the deficit of $1,736,424 during 2004.  Among
the principal factors in the deficit were customer deposits totaling
$814,282 provided by ten customers.  These deposits will be amortized as
products are delivered to the customers, all of whose orders are scheduled
for delivery no later than September 2005.  Also a factor in our working
capital deficit is an unsecured note payable to a Chinese institutional
lender in the amount of $328,670.  The note was due in January 2005 and is
now payable on demand.  To date, the lender has not taken any action to
collect the debt.

                                    -7-
<PAGE>

     Despite its negative working capital, ZQ Power-Tech has sufficient
liquidity to fund its near-term operations.  The principal capital resource
available is $8,348,133 in property, plant and equipment, construction in
process, and real property rights, which ZQ Power-Tech owns subject only to
the China Financial Bank lien for $2.4 million.  Based on the substantial
backlog of orders that ZQ Power-Tech has accumulated, it believes that
additional secured financing will be available to it on favorable terms
when needed.  Until then, if short-term cash shortages occur, Mr. Fu has
committed to provide financing as needed.

     Based upon the financial resources available to ZQ Power-Tech,
management believes that it has sufficient capital and liquidity to sustain
operations for the foreseeable future.

     Application of Critical Accounting Policies

     In preparing our financial statements we are required to formulate
working policies regarding valuation of our assets and liabilities and to
develop estimates of those values.  In our preparation of the financial
statements for 2004, there were two estimates made which were (a) subject
to a high degree of uncertainty and (b) material to our results.  The first
was our determination, detailed in Note 11 to the Financial Statements,
that we should record a valuation allowance for the full value of the
deferred tax asset created by our net operating loss carryforward.  The
primary reason for the determination was our lack of certainty as to
whether ZQ Power-Tech would carry on profitable operations in the future.
The second estimate was our determination, detailed in Note 20 to the
Financial Statements, that we had no need of a reserve for warranty costs.
The primary reason for the determination was the fact that we have
received no warranty claims to date.

     We made no material changes to our critical accounting policies in
connection with the preparation of financial statements for 2004.

     Impact of Accounting Pronouncements

     There were no recent accounting pronouncements that have had a
material effect on the Company's financial position or results of
operations.  There was one recent accounting pronouncement that may have a
material effect on the Company's financial position or results of
operations.

     In December 2004, the FASB issued SFAS No. 123R "Share-Based
Payment." This Standard addresses the accounting for transactions in which
a company receives employee services in exchange for (a) equity instruments
of the company or (b) liabilities that are based on the fair value of the
company's equity instruments or that may be settled by the issuance of such
equity instruments. This Standard eliminates the ability to account for
share-based compensation transactions using Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and requires

                                    -8-
<PAGE>

that such transactions be accounted for using a fair-value-based method.
The Standard is effective for periods beginning after June 15, 2005. The
Standard may adversely affect the Company's results of operations if the
Company issues a material amount of capital stock for services, as it did
during 2004.

     Off-Balance Sheet Arrangements

     We do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial
condition or results of operations.

     Risk Factors That May Affect Future Results

     You should carefully consider the risks described below before buying
our common stock.  If any of the risks described below actually occurs,
that event could cause the trading price of our common stock to decline,
and you could lose all or part of your investment.

     I.  RISKS ATTENDANT TO OUR BUSINESS

     WE MAY BE UNABLE TO GAIN A SUBSTANTIAL SHARE OF THE MARKET FOR
BATTERIES.

     We have only one product line, rechargeable polymer lithium-ion
batteries.  We first marketed our batteries in the Spring of 2004, and have
reported modest revenue to date.  There are many companies, both large and
small, involved in the market for rechargeable batteries.  It will be
difficult for us to establish a reputation in the market so that
manufacturers chose to use our batteries rather than those of our
competitors.  Unless we are able to expand our sales volume significantly,
we will not be able to operate efficiently and our business will fail.

     WE MAY BE UNABLE TO SATISFY OUR CURRENT DEBTS.

     Our current liabilities are far in excess of the book value of our
current assets.  At December 31, 2004 our current liabilities totaled
$3,048,490 and our current assets totaled $1,295,845, only $758,332 of
which were liquid assets.  We are engaged in efforts to negotiate
compromises and extensions with our major creditors.  If those negotiations
are unsuccessful, however, our business may fail.

     WE LACK SUFFICIENT CAPITAL TO FULLY CARRY OUT OUR BUSINESS PLAN.

     In order to make our operations cost-efficient, it is necessary that
we expand our operations.  At the present time, however, our capital
resources are sparse.  In order to expand our operations, we will need an
infusion of capital to fund the build-out of our manufacturing facility and
an accumulation of inventory.  We are engaged in discussions with potential

                                    -9-
<PAGE>

sources of capital, and have recently obtained a $2.4 million loan.  It is
not clear whether the proceeds of that loan will be sufficient to permit us
to expand to an efficient operating point.

     OUR BUSINESS AND GROWTH WILL SUFFER IF WE ARE UNABLE TO HIRE AND
RETAIN KEY PERSONNEL THAT ARE IN HIGH DEMAND.

     Our future success depends on our ability to attract and retain
highly skilled engineers, technical, marketing and customer service
personnel, especially qualified personnel for our operations in China.
Qualified individuals are in high demand in China, and there are
insufficient experienced personnel to fill the demand.  Therefore we may
not be able to successfully attract or retain the personnel we need to
succeed.

     WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY,
WHICH COULD CAUSE US TO BE LESS COMPETITIVE.

     We are continuously designing and developing new technology. We rely
on a combination of copyright and trade secret laws and restrictions on
disclosure to protect our intellectual property rights. Unauthorized use of
our technology could damage our ability to compete effectively.  In China,
monitoring unauthorized use of our products is difficult and costly.  In
addition, intellectual property law in China is less developed than in the
United States and historically China has not protected intellectual
property to the same extent as it is protected in other jurisdictions, such
as the United States. Any resort to litigation to enforce our intellectual
property rights could result in substantial costs and diversion of our
resources, and might be unsuccessful.

     WE MAY HAVE DIFFICULTY ESTABLISHING ADEQUATE MANAGEMENT AND FINANCIAL
CONTROLS IN CHINA.

     The People's Republic of China has only recently begun to adopt the
management and financial reporting concepts and practices that investors in
the United States are familiar with.  We may have difficulty in hiring and
retaining employees in China who have the experience necessary to implement
the kind of management and financial controls that are expected of a United
States public company.  If we cannot establish such controls, we may
experience difficulty in collecting financial data and preparing financial
statements, books of account and corporate records and instituting business
practices that meet U.S. standards.

                                    -10-
<PAGE>


     CAPITAL OUTFLOW POLICIES IN CHINA MAY HAMPER OUR ABILITY TO PAY
DIVIDENDS TO SHAREHOLDERS IN THE UNITED STATES.

     The People's Republic of China has adopted currency and capital
transfer regulations. These regulations require that we comply with complex
regulations for the movement of capital. Although Chinese governmental
policies were introduced in 1996 to allow the convertibility of RMB into
foreign currency for current account items, conversion of RMB into foreign
exchange for capital items, such as foreign direct investment, loans or
securities, requires the approval of the State Administration of Foreign
Exchange. We may be unable to obtain all of the required conversion
approvals for our operations, and Chinese regulatory authorities may impose
greater restrictions on the convertibility of the RMB in the future.
Because most of our future revenues will be in RMB, any inability to obtain
the requisite approvals or any future restrictions on currency exchanges
will limit our ability to fund our business activities outside China or to
pay dividends to our shareholders.

     WE HAVE LIMITED BUSINESS INSURANCE COVERAGE.

     The insurance industry in China is still at an early stage of
development. Insurance companies in China offer limited business insurance
products, and do not, to our knowledge, offer business liability insurance.
As a result, we do not have any business liability insurance coverage for
our operations. Moreover, while business disruption insurance is available,
we have determined that the risks of disruption and cost of the insurance
are such that we do not require it at this time. Any business disruption,
litigation or natural disaster might result in substantial costs and
diversion of resources.

     TRADE BARRIERS AND TAXES MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS
AND OPERATIONS.

     We may experience barriers to conducting business and trade in our
targeted markets in the form of delayed customs clearances, customs duties
and tariffs. In addition, we may be subject to repatriation taxes levied
upon the exchange of income from local currency into foreign currency, as
well as substantial taxes of profits, revenues, assets or payroll, as well
as value-added tax. The markets in which we plan to operate may impose
onerous and unpredictable duties, tariffs and taxes on our business and
products.  Any of these barriers and taxes could have an adverse effect on
our finances and operations.

     CURRENCY FLUCTUATIONS MAY ADVERSELY AFFECT OUR BUSINESS.

     We generate revenues and incur expenses and liabilities in Chinese
RMB. However we report our financial results in the United States in U.S.
Dollars.  As a result, we are subject to the effects of exchange rate
fluctuations between these currencies.  Recently, there have been
suggestions made to the Chinese government that it should adjust the
exchange rate and end the linkage that in recent years has held the RMB-
U.S. dollar exchange rate constant. If the RMB exchange rate is adjusted or
is allowed to float freely against the U.S. dollar, our revenues, which are
denominated in RMB, may fluctuate significantly in U.S. dollar terms. We
have not entered into agreements or purchased instruments to hedge our
exchange rate risks.
                                    -11-
<PAGE>

II.  RISKS ATTENDANT TO OUR MANAGEMENT

     OUR BUSINESS DEVELOPMENT WOULD BE HINDERED IF WE LOST THE SERVICES OF
OUR CHAIRMAN.

     Zhiguo Fu is the Chief Executive Officer of Advanced Battery
Technologies and of its operating subsidiary, ZQ Power-Tech.  Mr. Fu is
responsible for strategizing not only our business plan but also the means
of financing it.  Mr. Fu has also, from time to time, provided his personal
funds to meet the working capital needs of ZQ Power-Tech.  If Mr. Fu were
to leave Advanced Battery Technologies or become unable to fulfill his
responsibilities, our business would be imperiled.  At the very least,
there would be a delay in the development of Advanced Battery Technologies
until a suitable replacement for Mr. Fu could be retained.

     ADVANCED BATTERY TECHNOLOGIES IS NOT LIKELY TO HOLD ANNUAL SHAREHOLDER
MEETINGS IN THE NEXT FEW YEARS.

     Delaware corporation law provides that members of the board of
directors retain authority to act until they are removed or replaced at a
meeting of the shareholders.  A shareholder may petition the Delaware Court
of Chancery to direct that a shareholders meeting be held.  But absent such
a legal action, the board has no obligation to call a shareholders meeting.
 Unless a shareholders meeting is held, the existing directors elect
directors to fill any vacancy that occurs on the board of directors.  The
shareholders, therefore, have no control over the constitution of the board
of directors, unless a shareholders meeting is held.

     Since it became a public company, Advanced Battery Technologies has
never held an annual meeting of shareholders.  Management does not expect
to hold annual meetings of shareholders in the next few years, due to the
expense involved.  The current members of the Board of Directors were
appointed to that position by the current and previous directors.  If other
directors are added to the Board in the future, it is likely that the
current directors will appoint them.  As a result, the shareholders of
Advanced Battery Technologies will have no effective means of exercising
control over the operations of Advanced Battery Technologies.

     RELATED PARTY TRANSACTIONS MAY OCCUR ON TERMS THAT ARE NOT FAVORABLE
TO ADVANCED BATTERY TECHNOLOGIES.

     Zhiguo Fu, directly and through his family, controls almost 44% of
the outstanding common stock of Advanced Battery Technologies.  For the
foreseeable future, therefore, he will control the operations of Advanced
Battery Technologies.  Mr. Fu also owns 30% of the outstanding stock of ZQ
Power-Tech, and was responsible for structuring the transaction in which

                                    -12-
<PAGE>

Advanced Battery Technologies acquired its 70% of ZQ Power-Tech.  From time
to time, Mr. Fu has loaned money to ZQ Power-Tech, and contributed to its
capital, when needed.  It is likely that Mr. Fu will engage in other
transactions with Advanced Battery Technologies and/or ZQ Power-Tech,
including transfers of all or part of his interest in ZQ Power-Tech to
Advanced Battery Technologies.  It is unlikely that the Board of Directors
will obtain independent confirmation that the terms of such related party
transactions are fair.  If the terms are unfair to Advanced Battery
Technologies, the transactions could harm our operating results.

     YOUR ABILITY TO BRING AN ACTION AGAINST US OR AGAINST OUR DIRECTORS,
OR TO ENFORCE A JUDGMENT AGAINST US OR THEM, WILL BE LIMITED BECAUSE WE
CONDUCT ALL OF OUR OPERATIONS IN CHINA AND BECAUSE MOST OF OUR DIRECTORS
RESIDE OUTSIDE OF THE UNITED STATES.

     We conduct substantially all of our operations in China through our
wholly-owned subsidiary. Most of our directors reside in China and
substantially all of the assets of those persons are located outside of the
United States. As a result, it may be difficult or impossible for you to
bring an action against us or against these individuals in the United
States in the event that you believe that your rights have been infringed
under the securities laws or otherwise. Even if you are successful in
bringing an action of this kind, the laws of the United States and of China
may render you unable to enforce a judgment against our assets or the
assets of our directors.


Item 7.   Financial Statements

     The Company's financial statements, together with notes and the
Independent Auditors' Report, are set forth immediately following Item 14
of this Form 10-KSB.

Item 8.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

     Not Applicable

Item 8A.  Controls and Procedures

     Zhiguo Fu, our Chief Executive Officer, and Guohua Wan, our Chief
Financial Officer, performed an evaluation of the Company's disclosure
controls and procedures as of December 31, 2004.  Based on their
evaluation, they concluded that the controls and procedures in place are
sufficient to assure that material information concerning the Company which
could affect the disclosures in the Company's quarterly and annual reports
is made known to them by the other officers and employees of the Company,
and that the communications occur with promptness sufficient to assure the
inclusion of the information in the then-current report.

     There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect those controls
subsequent to the date on which Mr. Fu and Ms. Wan performed their
evaluation.

                                    -13-
<PAGE>

                                  PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.

     The officers and directors of the Company are:
                                                            Director
 Name               Age     Position with the Company       Since
-----------------------------------------------------------------------------
Zhiguo Fu            55     Chairman, Chief Executive       2004
                              Officer

Guohua Wan           52     Director, Chief Financial       2004
        				Officer

Ming Liu             29     Director, Secretary             2004

Yongguo Yang         32     Director                        2004

Guopeng Gao          32     Director                        2005

     Directors hold office until the annual meeting of the Company's
stockholders and the election and qualification of their successors.
Officers hold office, subject to removal at any time by the Board, until the
meeting of directors immediately following the annual meeting of stockholders
and until their successors are appointed and qualified.

     Zhiguo Fu.  Mr. Fu organized ZQ Power-Tech in 2002, and has served as
its Chairman since then.  In 1993 Mr. Fu founded Heilongjiang Goangsha Group,
and he served as its Chairman until 2000.  During that period Heilongjiang
Goangsha Group had over 3,000 employees and was engaged in several hundred
construction projects.  Heilongjiang Goangsha Group was sold in 2000, at
which time it had annual revenue in excess of $25 million.  Previously Mr. Fu
had twenty years experience in construction management.

     Guohua Wan.  Since 2003 Ms. Wan has been the General Manager of ZQ
Power-Tech.  From 1999 until 2003 Ms. Wan was Vice President and Chief
Financial Officer of Harbin Ridaxing Science and Technology Co., Ltd.

     Ming Liu.  Since 2003 Mr. Liu has been the Secretary to the Board of ZQ
Power-Tech.  From 1999 until 2003 Mr. Liu was Vice President of Harbin
Ridaxing Science and Technology Co., Ltd.

                                    -14-
<PAGE>

     Yongguo Yang.  Since 2003 Mr. Yang has served as Managing Director of
Easywood Holdings Limited, a trading company located in Hong Kong.  From 2000
to 2003 Mr. Yang served as Managing Director or Ruiyuan International Co.,
Inc., which was also a trading company located in Hong Kong.

     Guopeng Gao.  Since 2002 Mr. Gao has served as Vice President of ZQ
Power-Tech.  From 2000 until 2002, Mr. Gao was Technical Manager for
Heilongjiang Shuangtai Electric Co. Ltd.

Audit Committee

     The Board of Directors has not appointed an Audit Committee.  The Board
of Directors does not have an audit committee financial expert.  The Board of
Directors has not been able to recruit an audit committee financial expert to
join the Board of Directors because of the Company's poor financial
condition.

Code of Ethics

     The Company does not have a written code of ethics applicable to its
executive officers.  The Board of Directors has not adopted a written code of
ethics because there are so few members of management.

Section 16(a) Beneficial Ownership Reporting Compliance

     None of the officers, directors or beneficial owners of more than 10%
of the Company's common stock failed to file on a timely basis the reports
required by Section 16(a) of the Exchange Act during the year ended December
31, 2004.

Item 10.  Executive Compensation

     The following table sets forth all compensation awarded to, earned by,
or paid by Advanced Battery Technologies and its subsidiaries to Zhiguo Fu,
its Chief Executive Officer, for services rendered in all capacities to the
Company during the years ended December 31, 2004, 2003 and 2002.  There were
no other executive officers whose total salary and bonus for the fiscal year
ended December 31, 2004 exceeded $100,000.

                                    -15-
<PAGE>

                                 Compensation
                                Year    Salary
                               ----------------
Zhiguo Fu                       2004    $70,000
                                2003     $8,712
                                2002     $2,904

     Employment Agreements

     All of our employment arrangements with our executives are on an at
will basis.

     Equity Grants

     The following tables set forth certain information regarding the stock
options acquired by the Company's Chief Executive Officer during the year
ended December 31, 2004 and those options held by him on December 31, 2004.

                 Option Grants in the Last Fiscal Year

                              Percent
                              of total                      Potential Realizable
                Number of     options                         value at assumed
                securities    granted to                      annual rates of
                underlying    employees  Exercise             appreciation of
                option        in fiscal  Price     Expiration for option term
Name            granted       year       ($/share)   Date        5%      10%
-------------------------------------------------------------------------------
Zhiguo Fu         0              N.A.       N.A.      N.A.       0        0

                 Aggregated Fiscal Year-End Option Values

                  Number of securities underlying    Value of unexercised
                  unexercised options at fiscal      in-the-money options
                  year-end (#)                       at fiscal year-end ($)
Name              (All exercisable)                  (All exercisable)
---------------------------------------------------------------------------
Zhiguo Fu                 0                                  0

     Remuneration of Directors

     None of the members of the Board of Directors receives remuneration for
service on the Board.
                                    -16-
<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information known to us with respect to
the beneficial ownership of our common stock as of the date of this
prospectus by the following:

     *  each shareholder known by us to own beneficially more than 5% of our
        common stock;

     *  Zhiguo Fu, our Chief Executive Officer

     *  each of our directors; and

     *  all directors and executive officers as a group.

     There are 24,237,094 shares of our common stock outstanding on the
date of this report.  Except as otherwise indicated, we believe that the
beneficial owners of the common stock listed below have sole voting power
and investment power with respect to their shares,  subject to community
property laws where applicable.  Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission.

     In computing the number of shares beneficially owned by a person and
the percent ownership of that person, we include shares of common stock
subject to options or warrants held by that person that are currently
exercisable or will become exercisable within 60 days. We do not, however,
include these "issuable" shares in the outstanding shares when we compute
the percent ownership of any other person.

                              Amount and
                              Nature of
Name and Address              Beneficial              Percentage
of Beneficial Owner(1)        Ownership               of Class
-------------------------------------------------------------------
Zhiguo Fu                     10,618,022(2)              43.8%
Guohua Wan                       180,994                  0.7%
Ming Liu                          17,787                  0.1%
Yongguo Yang                           0                   --
Guopeng Gao                      180,994                  0.7%

All officers and directors
 as a group (5 persons)       10,997,797                 45.4%
_____________________________

(1)  The address of each shareholder, unless otherwise noted, is c/o ZQ
Power-Tech, Weiyou Road, Shuangcheng Heilongjiang 150100, People's
Republic of China.

(2)  Includes 1,067,633 shares owned by Mr. Fu's spouse.

                                    -17-
<PAGE>


Equity Compensation Plan Information

     The information set forth in the table below regarding equity
compensation plans (which include individual compensation arrangements) was
determined as of December 31, 2004.


                               Number of         Weighted
                               securities to     average         Number of
                               be issued upon    exercise        securities
                               exercise of       price of        remaining
                               outstanding       outstanding     for future
                               options,          options,        issuance under
                               warrants and      warrants        compensation
                               rights            and rights      plans
-------------------------------------------------------------------------------
Equity compensation plans
approved by security
holders..........                0                  -                      0

Equity compensation plans
not approved by security
holders(1)....                   0                  -              2,650,000
                              ----                ---              ---------

   Total..............           0                  -              2,650,000

___________________________

(1)  The Board of Directors adopted the 2004 Equity Incentive Plan in 2004.
     The Plan authorizes the Board to issue up to 5,000,000 common shares
     during the ten year period of the Plan.  The shares may be awarded to
     employees or directors of Advanced Battery Technologies or its
     subsidiaries as well as to consultants to those entities.  The shares
     may be awarded as outright grants or in the form of options, restricted
     stock or performance shares.

Item 12.  Certain Relationships and Related Transactions

     On January 20, 2005 Advanced Battery Technologies entered into a
contract with its Chairman, Zhiguo Fu, as well as Zhijie Fu and Wenhua
Yang.  The contract acknowledged that these three individuals had provided
$4,832,976 to fund the construction of plant facilities owned by ZQ Power-
Tech Co.  Since Advanced Battery Technologies owns 70% of ZQ Power-Tech,
the contract provided that Advanced Battery Technologies would issue a
total of 11,276,947 shares to satisfy $3,383,084 (70%) of the loan from the
investors to ZQ Power-Tech.  The investors agreed that the remaining 30%
would be a contribution to the capital of ZQ Power-Tech.

     We believe the above transaction was as favorable to us as we could
have obtained from unrelated third parties.

                                    -18-
<PAGE>

Item 13.  Exhibit List and Reports on Form 8-K

     (a) Financial Statements

         Report of Independent Registered Accounting Firm

         Consolidated Balance Sheets - December 31, 2004

         Consolidated Statements of Operations - Years ended December 31,
          2004 and 2003

         Consolidated Statements of Stockholders' Equity  - Years ended
          December 31, 2004 and 2003

         Consolidated Statements of Cash Flows - Years ended December 31,
          2004 and 2003

         Notes to Consolidated Financial Statements

     (b) Exhibit List

3-a  Amended and Restated Certificate of Incorporation - filed as an
     exhibit to the Current Report on Form 8-K dated July 12, 2004 and
     incorporated herein by reference.

3-b  By-laws - filed as an exhibit to the Company's 1986 Proxy Statement
     dated November 7, 1986 and incorporated herein by reference.

10-a 2004 Equity Incentive Plan - filed as an exhibit to the Registration
     Statement on Form S-8 (333-118574) and incorporated herein by
     reference.

10-b Loan Agreements (2) dated November 20, 2004 with China Financial Bank
     Harbin Branch.

21   Subsidiaries - none

31   Rule 13a-14(a) Certifications

32   Rule 13a-14(b) Certifications
_________________________________________

     (c) Reports on Form 8-K

     Report dated December 1, 2004 - Item 2.03:  Creation of a Direct
Financial Obligation
                                    -19-
<PAGE>

Item 14.  Principal Accountant Fees and Services

     Advanced Battery Technologies retained PKF Hong Kong SAR as it principal
accountant on September 28, 2004.  Prior to that date, PKF had not performed
any services for Advanced Battery Technologies or its subsidiaries.

     Audit Fees

     PKF billed $40,000 in connection with the audit of the Company's
financial statements for the year ended December 31, 2004.  Also included are
services performed in connection with the reviews of the Company's financial
statements for the third quarter of 2004 as well as those services normally
provided by the accountant in connection with the Company's statutory and
regulatory filings for 2004.

     Audit-Related Fees

     PKF  billed the Company $1,039 for any Audit-Related fees in 2004.

     Tax Fees

     PKF billed $0 to the Company in 2004 for professional services rendered
for tax compliance, tax advice and tax planning.

     All Other Fees

     PKF billed the Company $0 for other services in 2004.

     It is the policy of the Company that all services other than audit,
review or attest services must be pre-approved by the Board of Directors.  All
of the services described above were approved by the Board of Directors.

                                    -20-
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Advanced Battery Technologies, Inc.

We have audited the accompanying consolidated balance sheet of
Advanced Battery Technologies, Inc. and its subsidiaries as of
December 31, 2004 and the related consolidated statements of
operations, stockholders' equity and cash flows for the year
then ended.  These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Advanced Battery Technologies, Inc. and
its subsidiaries as of December 31, 2004 and the results of
their operations and their cash flows for the year then ended in
conformity with accounting principles generally accepted in the
United States of America.


                                      PKF
                                      Certified Public Accountants
Hong Kong
February 28, 2005
                                                                F-1
<PAGE>

                         Independent Auditors' Report


To the Board of Directors and Stockholders of
Heilongjiang ZhongQiang Power-Tech Co., Ltd.

We have audited the accompanying balance sheets of Heilongjiang ZhongQiang
Power-Tech Co., Ltd. (A Development Stage Company) as of December 31, 2003
and 2002 and the related statements of operations, changes in stockholders'
equity and cash flows for the year ended December 31, 2003, the period from
August 20, 2002 (date of inception) to December 31, 2002, and the period from
August 20, 2002 (date of inception) to December 31, 2003.  These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Heilongjiang ZhongQiang
Power-Tech Co., Ltd. (A Development Stage Company) as of December 31, 2003
and 2002 and the results of their operations and cash flows for the year
ended December 31, 2003, the period from August 20, 2002 (date of inception)
to December 31 2002, and the period from August 20, 2002 (date of inception)
to December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.

                                  Rosenberg Rich Baker Berman & Company

Bridgewater, New Jersey
January 10, 2004

                                                                F-2
<PAGE>


                      ADVANCED BATTERY TECHNOLOGIES, INC.
                          CONSOLIDATED BALANCE SHEET
                              DECEMBER 31, 2004


                                                          USD

ASSETS

Current assets
 Cash and cash equivalents                            758,015
 Accounts receivable                                      317
 Inventories (Note 4)                                 233,493
 Prepayments, deposits and other receivables          304,020
                                                    ---------
 Total current assets                               1,295,845

Property, plant and equipment, net (Note 5)         3,234,887

Construction in process                             4,110,865
Deposits for acquisition of property, plant
 and equipment                                        575,512
Rights to use land and power, net (Note 6)            426,869
Patents, net (Note 7)                                 103,704
Prepaid expenses (Note 3)                           1,792,634
                                                   ----------
Total assets                                       11,540,316
                                                   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Accounts payable                                      36,869
 Accrued expenses and other payables                  211,217
 Notes payable (Note 8)                               361,463
 Other loans payable (Note 9)                         328,670
 Current maturities of long-term debts (Note 10)    1,238,120
 Customer deposits                                    814,282
 Welfare payable                                       57,869
                                                    ---------
 Total current liabilities                          3,048,490

Long-term debts, less current maturities (Note 10)  1,214,925
                                                    ---------
Total liabilities                                   4,263,415

Minority interests                                  1,662,113

Stockholders' equity
 Common stock (Note 13)                                12,940
 Preferred stock (Note 14)                                  -
 Additional paid-in capital (Note 15)               8,381,036
 Accumulated deficit                               (2,791,591)
 Accumulated other comprehensive income                12,403
                                                    ---------
 Total stockholders' equity                         5,614,788
                                                    ---------
 Total liabilities and stockholders' equity        11,540,316
                                                   ==========

See Notes to the consolidated financial statements

                                                                F-3
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS


                                               Year ended December 31,
                                               2004               2003
                                             --------           --------
                                                USD                USD

Revenues                                     1,191,509            11,292

Cost of sales                                 (809,266)           (9,388)
                                             ---------          --------
Gross profit                                   382,243             1,904

Other income                                    61,689               227
Selling expenses                               (25,671)           (2,790)
General and administrative expenses         (2,786,900)         (109,913)
Research and development costs                 (65,415)         (493,114)
Interest expense                                (5,045)           (5,027)
                                             ---------         ---------
Loss before minority interests              (2,439,099)         (608,713)

Minority interests                              89,395           182,614
                                             ---------         ---------
Net loss                                    (2,349,704)         (426,099)
                                             =========         =========

Basic net loss per share (Note 12)               (0.23)            (0.05)
                                             =========         =========


See Notes to consolidated financial statements

                                                                F-4
<PAGE>

                       ADVANCED BATTERY TECHNOLOGIES, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
                                                                                         Accumulated
                                                               Additional                other
                            Common stock     Preferred Stock   paid-in      Accumulated  comprehensive
                         Shares    Amount    Shares   Amount   capital      deficit      income
                                      USD               USD       USD             USD            USD
                                                                                               (Note)
------------------------------------------------------------------------------------------------------
<S>                      <C>       <C>          <C>      <C>       <C>         <C>            <C>

At January 1, 2003
 (Note 13)             9,042,582  2,400,000        -       -       14,461      (22,554)        15,457

Additional paid-in
 capital from
 exchange of
 property,
 plant and
 equipment                     -          -        -       -      414,433            -            963

Issue of common
 stock in
 private placement,
 net of nil offering
 costs                         -  3,600,000        -       -            -            -         24,312

Loss before minority
 interests                     -          -        -       -            -     (608,713)             -

Minority interests
 in a subsidiary
 (Note2(ii))                   - (1,800,000)       -       -     (128,668)     189,380        (12,220)
                    ---------------------------------------------------------------------------------
At December 31, 2003
 and January 1, 2004
 (Note 13)             9,042,582  4,200,000        -       -      300,226     (441,887)        28,512

Shares issued for
 acquisition          10,800,000 (4,180,157) 806,113     806    4,179,351            -              -
 of a subsidiary
 (Note 2(ii))

Reverse split of
 outstanding
 common stock
 (Note 13(i))        (17,883,543)   (17,884)       -       -       17,884            -              -

Conversion of
 preferred stock
 (Note 13(ii))         8,061,130      8,061)(806,113)   (806)      (7,255)           -              -

Shares issued to
 employees
 (Note 13(iii))        2,425,000      2,425        -       -    2,257,575            -              -

Shares issued to
consultants
 (Note 13(iv))           495,000        495        -       -    1,633,255            -              -

Exchange difference
 arising from
 translation
 of financial
 statements of
 foreign
 subsidiary                    -          -        -       -            -            -        (16,109)

Net loss                       -          -        -       -            -   (2,349,704)             -
                    ---------------------------------------------------------------------------------
At December 31, 2004  12,940,169     12,940        -       -    8,381,036   (2,791,591)        12,403
                    =================================================================================

Note:  Accumulated other comprehensive income represents gain on foreign currency
       translation.  The comprehensive loss and income for the years ended
       December 31, 2004 and 2003 were USD16,109 and USD25,275 respectively.

</TABLE>


See Notes to consolidated financial statements

                                                                F-5
<PAGE>

                      ADVANCED BATTERY TECHNOLOGIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                             Year ended December 31,
                                              2004             2003
                                            -------          -------
                                              USD              USD

Cash flows from operating activities :
 Net loss                                   (2,349,704)      (426,099)
 Adjustments to reconcile net loss
  to net cash provided by/(used in)
  operating activities:
  Loss on disposal of property, plant
   and equipment                                 3,278              -
  Depreciation and amortization                192,114        118,715
  Amortization of prepaid expenses             541,116              -
  Compensation expense settled by
   issuance of common stock                  1,560,000              -
  Minority interests                           (89,395)      (182,614)
 Changes in operating assets and
  liabilities :
  Increase in accounts receivable                 (256)           (61)
  Increase in inventories                     (130,718)      (102,775)
  Decrease/(increase) in prepayments,
   deposits and other receivable                27,418       (331,438)
  Decrease/(increase) in tax receivable         28,495        (28,495)
  Increase in accounts payable, accrued
   expensesand other payable                   198,629         49,458
  Increase in customer deposits                814,213             69
  Increase in welfare payable                   37,322         20,546
  Effect of foreign exchange rate changes         (900)          (320)

 Net cash provided by/(used in) operating    ---------      ---------
  activities                                   831,612       (883,014)
                                             ---------      ---------
 Cash flows from investing activities :
  Deposit for acquisition of property,
   plant and equipment                        (575,512)             -
  Purchase of property, plant and equipment   (913,625)      (240,780)
  Additions to construction in process      (1,298,017)    (2,820,630)
  Purchase of patents                          (10,560)       (97,417)
  Purchase of rights to use land and power           -         (2,446)
                                             ---------      ---------
 Net cash used in investing activities      (2,797,714)    (3,161,273)
                                             ---------      ---------
 Cash flows from financing activities :
  New bank loans raised                      2,409,754              -
  Repayment from/(advances to) officers         99,420       (102,246)
  Increase in other loans payable              143,436        185,234
  Increase/(decrease) in other loans
   receivable                                   95,024        (95,024)
  (Repayment to)/advances from employee        (53,101)        53,101
  Increase in long-term debts                   21,543         21,748
  Net proceeds from issuance of common stock         -      3,624,633
  Increase in notes payable                          -        362,463
                                             ---------      ---------
 Net cash provided by financing activities   2,716,076      4,049,909
                                             ---------      ---------

Net increase in cash and cash equivalents      749,974          5,622

Effect on foreign exchange rate changes            (22)             -

Cash and cash equivalents, beginning of year     8,063          2,441
                                             ---------      ---------
Cash and cash equivalents, end of year         758,015          8,063
                                             =========      =========

See Notes to consolidated financial statements

                                                                F-6
<PAGE>

                      ADVANCED BATTERY TECHNOLOGIES, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   DESCRIPTION OF THE COMPANY

     The Company was incorporated in the State of Delaware on January 16,
1984.

     Following the reverse takeover transactions as detailed in note 2(ii),
the Company is now engaging in the business of designing, manufacturing
and marketing of rechargeable polymer lithium-ion batteries through its
subsidiaries, Cashtech Investment Limited ("Cashtech") and Heilongjiang
Zhong Qiang Power-Tech Co., Ltd. ("ZQ Power-Tech").  Cashtech is a
British Virgin Islands corporation and ZQ Power-Tech is a limited
liability company established in the People's Republic of China (the
"PRC") in which Cashtech owns 70% interest.

     On July 12, 2004, the name of the Company was changed from Buy It
Cheap.com to Advanced Battery Technologies, Inc. ("ABAT").

     On July 20, 2004, the Company's board of directors approved a change in
the Company's fiscal year-end from June 30 to December 31.


2.   BASIS OF PREPARATION

     (i)  The accompanying consolidated financial statements of ABAT and its
subsidiaries (the "Group") have been prepared in accordance with
generally accepted accounting principles in the United States of
America.

     (ii) On March 1, 2004, the previous stockholders holding 70% ownership
of ZQ Power-Tech agreed to the transfer of their shares to obtain
100% ownership in Cashtech.  Cashtech is the legal parent of ZQ
Power-Tech since inception, with the transaction being treated as
a reverse merger and recapitalization of ZQ Power-Tech, which is
treated as the accounting acquirer.

     On May 6, 2004, ABAT completed a share exchange (the "Exchange")
with the stakeholders of Cashtech (the "Shareholders").  In the
Exchange, ABAT acquired 100% of the outstanding capital stock of
Cashtech from the Shareholders in exchange for the issuance of
9,720,000 shares of common stock and 725,503 shares of Series D
preferred stock of ABAT to the Shareholders.  Each share of
Series D preferred stock is convertible into 100 shares of common
stock.  In conjunction with the Exchange, ABAT also issued a
total of 1,080,000 shares of common stock and 80,610 shares of Series
D preferred stock to an advisor as compensation for its services provided.

                                                                F-7
<PAGE>
                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.   BASIS OF PREPARATION (CONT'D)

     The Exchange resulted in a change of control of ABAT.  Upon
completion of the Exchange and the related share issuance, ABAT
has a total of 19,842,582 shares of common stock and 806,113
shares of Series D preferred stock (convertible into 80,611,300
common stock) issued and outstanding, or a total of 100,453,882
common stock outstanding on a fully-diluted basis.  As the
Exchange resulted in the former stakeholders of Cashtech owned
greater than 50% of the common stock of ABAT on a fully-diluted
basis, the Exchange has been treated as a reverse takeover with
Cashtech as the accounting acquirer and ABAT as the accounting
acquiree.

     The purchase method under reverse takeover accounting has been
applied for the share exchange between Cashtech and ZQ Power-Tech
and the Exchange.  These consolidated financial statements issued
under the name of the legal parent, ABAT, are a continuation of
the financial statements of ZQ Power-Tech.  The comparative
figures are those of ZQ Power-Tech.  The 30% minority interests
in ZQ Power-Tech was reflected in the comparative figures as if
the current group structure was already in existence.

     ZQ Power-Tech had been in the development stages from the date of
inception (August 20, 2002) to December 31, 2003 and was
considered as a normal operating company starting from January 1,
2004.

     (iii)   The Group has accumulated deficit as at December 31, 2004.
However, based on the substantial backlog of orders of
approximately USD8 million that the Group has accumulated, the
management of the Group believes that these orders will generate
sufficient revenue and cash flows to enable the Group to continue
as a going concern.


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of consolidation

     The consolidated financial statements for the year ended December 31,
2004 include the accounts of the Company and its subsidiaries.  All
significant inter-company balances and transactions are eliminated in
consolidation.

                                                                F-8
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

     Use of estimates

     In preparing the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of
America, the management makes estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the dates of the consolidated
financial statements, as well as the reported amounts of revenues and
expenses during the reporting year.  Significant estimates required to
be made by the management include the recoverability of long-lived
assets and the valuation of inventories.  Actual results could differ
from those estimates.

     Cash and cash equivalents

     Cash equivalents are highly liquid investments and have maturities of
three months or less at the date of purchase.

     Inventories

     Inventories are valued at the lower of cost or market with cost
determined on a first-in first-out basis.

     Property, plant and equipment

     Property, plant and equipment are stated at cost less accumulated
depreciation and amortization.  Maintenance, repairs and betterments,
including replacement of minor items, are charged to expense; major
additions to physical properties are capitalized.  Depreciation and
amortization are provided using the straight-line method over the
estimated useful lives :-

     Buildings and improvements                         39 years
     Machinery, equipment and motor vehicles          5-10 years

     Rights to use land and power

     Rights to use land and power are stated at cost less accumulated
amortization.  Amortization is provided using the straight-line method
over the respective terms of the leases.

     Patents

     Patents are capitalized when the Company determines that there will
be a future benefit derived from such assets, and are stated at cost.
Amortization is provided using the straight-line method over the
estimated useful life of the assets of forty years.

                                                                F-9
<PAGE>
                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

     Prepaid expenses

     Prepaid expenses represent the aggregate fair value of the Company's
common stock issued in return for the consultancy works and services provided
by certain consultants and a Company's employee to the Company.  The fair
value is determined by reference to the closing price of the Company's
common stock as quoted on the OTC Bulletin Board ("OTCBB") at the date of
issuance.  The prepaid expenses are amortized on a straight-line basis
over the respective terms of the agreements.

     Amortization for the years ended December 31, 2004 and 2003 was
USD541,116 and nil respectively.

     Impairment of long-lived assets

     The Company evaluates long-lived assets for impairment when events or
changes in circumstances indicate, in management's judgment, that the
carrying value of such assets may not be recoverable.

     The impairment of long-lived assets is measured pursuant to the
guidelines of Statement of Financial Accounting Standard (SFAS) No.144
"Accounting for the Impairment or Disposal of Long-Lived Assets".  When
an indicator of impairment has occurred, management's estimate of
undiscounted cash flows attributable to the assets is compared to the
carrying value of the assets to determine whether impairment has
occurred.  If an impairment of the carrying value has occurred, the
amount of the impairment recognized in the financial statements is
determined by estimating the fair value of the assets and recording a
loss of the amount that the carrying value exceeds the estimated fair
value.

     Income taxes

     The Company accounts for income tax under the provisions of SFAS No.
109 "Accounting for Income Taxes", which requires recognition of
deferred tax assets and liabilities for the expected future tax
consequences of the events that have been included in the financial
statements or tax returns.  Deferred income taxes are recognised for
all significant temporary differences between tax and financial
statements bases of assets and liabilities.  Valuation allowances are
established against net deferred tax assets when it is more likely than
not that some portion or all of the deferred tax asset will not be
realized.

                                                                F-10
<PAGE>

                      ADVANCED BATTERY TECHNOLOGIES, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

     Revenue recognition

     Revenue is recognized upon shipment of product, at which time title of
goods has been transferred to the buyer and there exist no significant
obligations of the Company other than normal warranty support.

     Government grants

Depending on the nature of the grant, the Company either records the
grant as revenue or a decrease of the related costs.  The Company
recorded in other income a grant of USD60,244 and nil for the years
ended December 31, 2004 and 2003 respectively.

     Research and development costs

     Research and development costs are charged to operations as incurred.

     Concentration of credit risk

     Concentration of credit risk is limited to accounts receivable and is
subject to the financial conditions of major customer.  The Company
does not require collateral or other security to support accounts
receivable.  The Company conducts periodic reviews of its clients'
financial condition and customer payment practices to minimize
collection risk on accounts receivable.

     Fair value of financial instruments

     The carrying amounts of certain financial instruments, including cash
and cash equivalents, accounts receivable, accounts payable, notes
payable and other loans payable approximate fair value due to the
short-term nature of these items.  The carrying amounts of bank
borrowings approximate the fair value based on the Company's expected
borrowing rate for debt with similar remaining maturities and
comparable risk.

     Foreign currency translation

     The Group uses China Renminbi ("RMB") as the functional currency, which
is not freely convertible into foreign currencies.  Transactions
denominated in currencies other than RMB are translated into RMB at the
applicable rates of exchange prevailing at the dates of the
transactions, quoted by the People's Bank of China (the "PBOC").
Monetary assets and liabilities denominated in other currencies are
translated into RMB at rates of exchange quoted by the PBOC prevailing
at the balance sheet date.  Exchange gains or losses arising from
changes in exchange rates subsequent to the transactions dates for
monetary assets and liabilities denominated in other currencies are
included in the determination of net income for the respective period.

                                                                F-11
<PAGE>

                       ADVANCED BATTERY TECHNOLOGIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

     Foreign currency translation (cont'd)

For financial reporting purposes, RMB has been translated into United
States dollars ("USD") as the reporting currency.  Assets and
liabilities are translated at the exchange rate in effect at period
end.  Income statement accounts are translated at the average rate of
exchange prevailing during the period.  Translation adjustments arising
from the use of different exchange rates from period to period are
included as a component of stockholders' equity as "Accumulated other
comprehensive income".  Gains and losses resulting from foreign
currency transactions are included in other comprehensive
income/(loss).

     New accounting pronouncements

     (i) The Statement of Financial Accounting Standard No.150, "Accounting
for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" ("SFAS 150") was issued in May 2003.  This
statement affects the classification, measurement and disclosure
requirements of the following three types of freestanding financial
instruments :-

     1)   mandatory redeemable shares, which the issuing company is
          obligated to buy back with cash or other assets;

     2)   instruments that do or may require the issuer to buy back
          some of its shares in exchange for cash or other assets,
          which include put options and forward purchase contracts; and

     3)   obligations that can be settled with shares, the monetary
          value of which is fixed, tied solely or predominantly to a
          variable such as a market index, or varies inversely with the
          value of the issuers' shares.

     In general, SFAS 150 is effective for all financial instruments
entered into or modified after May 31, 2003, and otherwise is effective
at the beginning of the first interim period beginning after June 15,
2003.  The adoption of this statement had no impact on the Company's
results of operations or financial position.

     (ii) Financial Accounting Standards Board Interpretation No. 46,
"Consolidation of Variable Interest Entities ("VIE")" ("FIN 46"), was
issued in January 2003.  FIN 46 requires that if an entity is the
primary beneficiary of a variable interest entity, the assets,
liabilities and results of operations of the variable interest entity
should be included in the consolidated financial statements of the
entity.  The provisions of FIN 46 are effective immediately for all
arrangements entered into after January 31, 2003.

                                                                F-12
<PAGE>

                    ADVANCED BATTERY TECHNOLOGIES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

     In December 2003, the Financial Accounting Standards Board ("FASB")
completed deliberations on proposed modifications to FIN 46 and re-
issued FIN 46 ("Revised Interpretation") resulting in multiple
effective dates based on the nature as well as the creation date of
the VIE. VIEs created after January 31, 2003 but prior to January 1,
2004 may be accounted for either based on the original interpretation
or the Revised Interpretation.  The adoption of these interpretations
had no impact on the Company's results of operation or financial
position.

     (iii)  SFAS 132 (revised 2003), "Employer's Disclosure about Pensions
and Other Post-Retirement Benefits" was issued in December 2003.  SFAS 132
(revised) revised employer's disclosure about pension plans and other
post-retirement benefit plans.  SFAS 132 (revised) requires additional
disclosures in annual financial statements about the types of plan
assets, investment strategy, measurement dates, plan obligations, cash
flows, and components of net periodic benefit cost of defined benefit
pension plans and other post-retirement benefit plans.  The annual
disclosure requirements are effective for fiscal years ended after
December 15, 2003. SFAS 132 (revised) also requires interim disclosure
of the elements of net periodic benefit cost and the total amount of
contributions paid or expected to be paid during the current fiscal
year if significantly different from amounts previously disclosed.
The interim disclosure requirements of SFAS 132 (revised) are
effective for interim periods beginning after December 15, 2003.  The
adoption of this standard had no impact on the Company's results of
operation or financial position.

     (iv)  In December 2004, the FASB issued SFAS No. 123R "Share-Based
Payment." This Standard addresses the accounting for transactions in
which a company receives employee services in exchange for (a) equity
instruments of the company or (b) liabilities that are based on the
fair value of the company's equity instruments or that may be settled
by the issuance of such equity instruments. This Standard eliminates
the ability to account for share-based compensation transactions using
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and requires that such transactions be accounted
for using a fair-value-based method. The Standard is effective for
periods beginning after June 15, 2005. The Company is currently
assessing the impact of this Standard on its results of operations and
financial position.

     (v)  In November 2004, the FASB issued SFAS No. 151 "Inventory costs -
an amendment of ARB No. 43, Chapter 4".  SFAS 151 amends ARB 43, Chapter
4, to clarify that abnormal amounts of idle facility expense, freight,
handling costs and wasted materials (spoilage) should be recognized as
current-period charges.  SFAS No. 151 is effective for inventory costs
incurred during fiscal year beginning after June 15, 2005.  The adoption
of this standard has no impact on the Company's results of operation or
financial position.
                                                                F-13
<PAGE>

                    ADVANCED BATTERY TECHNOLOGIES, INC.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   INVENTORIES

                             USD

Raw materials              50,333
Packing materials          38,669
Finished goods            144,491
                          -------
                          233,493
                          =======

     No allowance for inventories was made for the years ended December 31,
2004 and 2003.


5.   PROPERTY, PLANT AND EQUIPMENT, NET

                                        USD

Building and improvements            2,071,961
Machinery and equipment              1,342,185
Motor vehicles                         114,261
                                     ---------
                                     3,528,407
Less : Accumulated depreciation
       and amortization               (293,520)
                                     ---------
                                     3,234,887
                                     =========

     (i)  At December 31, 2004, buildings and motor vehicles with net book
values of USD1,955,284 and USD88,467 respectively were pledged to
the banks for loans granted to the Group (Note 10).

     (ii) Depreciation and amortization expenses for the years ended
December 31, 2004 and 2003 amounted to USD175,080 and USD102,800
respectively and USD58,259 and nil of these expenses were
included in cost of sales.

     (iii) During the year ended December 31, 2004, improvements with
carrying amount of USD3,278 were disposed of at nil consideration
resulting in a loss of USD3,278.  There was no disposal in the
year ended December 31, 2003.

                                                                F-14
<PAGE>

                    ADVANCED BATTERY TECHNOLOGIES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.   RIGHTS TO USE LAND AND POWER

     The rights to use land and power at cost, less accumulated
amortization, consists of the following:

                                 USD

Right to use land              420,760
Right to use power              42,287
                               -------
                               463,047
Less : Accumulated
       amortization            (36,178)
                               -------
                               426,869

     The Group leases two pieces of land per real estate contract from the
PRC Government for a period from August 2003 to September 2043, on
which the office and production facilities of ZQPT are situated.  This
right to use land was pledged to a bank for the bank loans granted to
the Group (Note 10).

     The Group leases power from the local government for a period from July
2003 to July 2013.

     Amortization expense was USD14,451 and USD14,494 for the years ended
December 31, 2004 and 2003 respectively.


7.   PATENTS

     The patents at cost, less accumulated amortization, consist of the
following:

                                   USD

Patents                          107,708
Less : Accumulated amortization    4,004
                                 -------
                                 103,704
                                 =======

     Amortization expense was USD2,583 and USD1,421 for the years ended
December 31, 2004 and 2003 respectively.

                                                                F-15
<PAGE>

                   ADVANCED BATTERY TECHNOLOGIES, INC.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   PATENTS (CONT'D)

     The estimated aggregate amortization expenses for patents for each of
the five succeeding years is as follows:


                 Year               USD

                 2005              2,693
                 2006              2,693
                 2007              2,693
                 2008              2,693
                 2009              2,693
                                 -------
                                  13,465
                                 =======


8.   NOTES PAYABLE

     The notes payable represents an unsecured demand loan from Shuangcheng
National Owned Assets Operation Ltd. with monthly interest rate of
0.57525% and no fixed term of repayment.


9.   OTHER LOANS PAYABLE

     The loans due to non-related third parties are interest-free, unsecured
and repayable on demand.


10.  LONG-TERM DEBTS

     (i)  Long-term debts comprise of the followings:

                                             USD

     Bank loans                         2,409,754
     Car loans                             43,291
                                        ---------
                                        2,453,045
                                        =========
                                                                F-16
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.  LONG-TERM DEBTS (CONT'D)

     The Group is obliged to make the following principal payments:

                                                    USD
                    Years ending December 31 :-
                                          2005   1,238,120
                                          2006   1,214,925
                                                 ---------
                                                 2,453,045
                                                 =========

     (ii) The bank loans were secured by the Group's buildings (Note 5) and
right to use land (Note 6), bore interest at 8.064% per annum and are
repayable in 2 yearly instalments commencing from November 2005.

     (iii) The car loans were secured by the Group's motor vehicles (Note
5), bore interest ranging from 4.1% to 5.4% per annum and are repayable in
24 monthly instalments commencing from December 2003, April 2004 and October
2004 respectively.

11.  INCOME TAXES

     No provision for income tax is made as the Company's operating
subsidiary in the PRC has no assessable profits throughout the years.

     Income tax can be reconciled to the loss before minority interests as
follow :

                                         Year ended December 31,
                                         2004                2003
                                       -------             -------
                                          USD                 USD

Loss before minority interests        (2,439,099)         (608,713)
                                       =========           =======
Expected income tax credit at PRC
 enterprise income tax rate of 33%      (804,903)         (200,875)
Expenses not deductible for tax
 purposes                                818,763           156,693
Differences in tax depreciation
 expenses and book depreciation
 expenses                                (29,259)           15,211
Valuation allowances                      15,399            28,971
                                        --------           -------
Income tax                                     -                 -
                                        ========           =======

                                                                F-17
<PAGE>

                      ADVANCED BATTERY TECHNOLOGIES, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11.  INCOME TAXES (CONT'D)

     The major components of deferred tax as of December 31, 2004 are as
follows:
                                    USD

Tax losses                        44,370
Less : Valuation allowances      (44,370)
                                  ------
                                       -
                                  ======

     At December 31, 2004, the Company had tax losses amounting to
USD134,456 which can be carried forward for five years from the year of
loss.

     The management determined that these tax losses incurred by the
operating subsidiary did not meet the realization criteria and therefore
a valuation allowance of USD44,370 was made against the deferred tax
asset.


12.  BASIC NET LOSS PER SHARE

     (i)  The basic net loss per share is calculated using the net loss and
the weighted average number of common stock outstanding during
the year.

                                      Year ended December 31,
                                     2004                 2003
                                   -------              -------
Net loss (USD)                   (2,349,704)           (426,099)
                                 ==========           =========
Weighted average common stock
 outstanding                     10,080,357           9,141,130#
                                 ==========           =========

Basic net loss per share (USD)        (0.23)              (0.05)
                                 ==========           =========

     #  The number represents the number of shares issued by ABAT
for the Exchange (after taking into account the reverse stock split
as disclosed in Note 13(i)).

     (ii)   The diluted net loss per share is not presented as there is
no dilutive effect for the years ended December 31, 2004 and
2003.

                                                                F-18
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. COMMON STOCK                          No. of           Amount
                                          shares              USD
                                         ---------      ---------
Authorized :
 Common stock at USD0.001 par value
  (Note 13(i))                           60,000,000        60,000
 Issued and outstanding :
  At January 1, 2004 ABAT share
   capital before the Exchange            9,042,582         9,043
 Shares issued for the Exchange
  (Note 2(ii))                           10,800,000        10,800
 Reverse split of outstanding
  common stock (Note 13(i))             (17,883,543)      (17,884)
 Conversion of preferred stock
  (Note 13(ii))                           8,061,130         8,061
 Shares issued to employees
  (Note 13(iii))                          2,425,000         2,425
 Shares issued to consultants
  (Note 13(iv))                             495,000           495
                                         ----------       -------
 At December 31, 2004                    12,940,169        12,940
                                         ==========       =======

     Notes :

     (i)  Pursuant to a resolution adopted by the Company to amend the
certificate of incorporation, on July 12, 2004, the Company filed a
restated certificate of incorporation with the Secretary of State
of Delaware.  The restated certificate of incorporation amended the
certificate of incorporation and :

     (a)  The authorized number of shares of capital stock was
increased from 20,000,000 common stock and 2,000,000 preferred stock
to 60,000,000 common stock and 5,000,000 preferred stock.

     (b)  There was a reverse split of the outstanding common stock
for a 1-for-10 basis, effective on July 12, 2004.  The fractional shares
resulting from the reverse split were purchased by the Company.

     (ii) Subsequent to the reverse stock split on July 12, 2004, the
holders of the Company's preferred stock converted their shares into
8,061,130 shares of common stock.

     (iii) 200,000 of these shares were issued to an employee of the Company
for the provision of services for a term of two years commencing on
July 11, 2004.

     The remaining 2,225,000 shares were issued to 11 employees of the
Company for the provision of services during the year ended December
31, 2004.

                                                                F-19
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.  COMMON STOCK (CONT'D)

     (iv) The Company entered into several consulting agreements (the
"Agreements") with various consultants.  In consideration of the
consulting services provided, the Company agreed to issue in
aggregate 495,000 of the Company's common stock to the consultants.
The details of the consulting agreements are as follows :

                                         Number of
                                         shares of
                                         common
Services provided       Terms            stock issued    Date of issuance
-----------------------------------------------------------------------------
Marketing, sales
 channeling, market      June 29, 2004 to     220,000    September 14, 2004
 research and
 promotion services      June 28, 2006

Provision of technical
 market                  July 23, 2004        100,000    July 30, 2004
 information and         to
 technical research      July 22, 2007
 and development
 services

Provision of industry
 and market              September 8, 2004    125,000    September 9, 2004
 information in the      to
 PRC                     September 7, 2005

Coordination and
 business                September 8, 2004     50,000    September 14, 2004
 development services    to
 in the                  September 7, 2006
 United States
                                             -------
                                             495,000
                                             =======

14. PREFERRED STOCK

                            No. of shares              Amount
                                                          USD
Authorized :
 Preferred stock at
  USD0.001 par value
  (Note 13(i))                5,000,000                 5,000
                              =========                 =====
 Issued and outstanding :
  At January 1, 2004                  -                     -
 Shares issued for the
  Exchange (Note 2(ii))         806,113                   806
 Conversion to common
  stock (Note 13(ii))          (806,113)                 (806)
                              ---------                 -----
At December 31, 2004                  -                     -
                              =========                 =====

     Each preferred stock is convertible into 10 shares of common stock
(after taking into account the reverse stock split as disclosed in Note
13(i)).

                                                                F-20
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.  ADDITIONAL PAID-IN CAPITAL

     Included in the additional paid-in capital is an amount of USD3,890,830
which represents the excess of the aggregate fair value of the
Company's common stock issued to employees (Note 13(iii)) and
consultants under the Agreements (Note 13(iv)), over the par value of
the stock issued.  The fair value is determined by reference to the
closing price of the Company's common stock quoted on the OTCBB at the
dates of issuance of common stock.

16.  SUPPLEMENTAL CASH FLOW INFORMATION

                                      Year ended December 31,
                                      2004              2003
                                    -------           -------
                                        USD               USD

Interest paid                         5,045             5,027
Income taxes                              -                 -

Non-cash transaction
 Capital increase in exchange of
  property, plant and equipment           -           415,396


     Other than the above-mentioned, during the year ended December 31,
2004, there were non-cash transactions regarding the issues of the
Company's common stock and preferred stock for the acquisition of
Cashtech and the issues of the Company's common stock for the provision
of services and consultancy works by various employees and consultants,
the details of which are set out in notes 2(ii), 13(iii) and 13(iv)
respectively.

17.  EQUITY INCENTIVE PLAN

     (i)  The Company adopted the 2004 Equity Incentive Plan (the "Plan")
on August 24, 2004.  The purpose of the Plan is to promote the
success and enhance the value of the Company by linking the personal
interests of the participants of the Plan (the "Participants") to those
of the Company's shareholders, and by providing the Participants with
an incentive for outstanding performance.  The Plan is further intended
to attract and retain the services of the Participants upon whose judgment,
interest, and special efforts the successful operation of the Group is
dependent.  The Company has reserved 5,000,000 shares of common stock
for the options and awards under the Plan.

     Subject to the terms and provisions of the Plan, the Board of
Directors, at any time and from time to time, may grant shares of
stock to eligible persons in such amounts and upon such terms and
conditions as the Board of Directors shall determine.

                                                                F-21
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.  EQUITY INCENTIVE PLAN (CONT'D)

     The Committee appointed by the Board of Directors to administer
the Plan shall have the authority to determine all matters
relating to the options to be granted under the Plan including
selection of the individuals to be granted awards or stock
options, the number of stocks, the date, the termination of the
stock options or awards, the stock option term, vesting schedules
and all other terms and conditions thereof.

     (ii) As mentioned in notes 13(iii) and 13(iv), ABAT issued a total of
2,225,000 and 495,000 common stocks to 11 employees and various
consultants respectively. The shares granted to the employees and
125,000 shares entitled by a consultant were issued under the Plan.

     (iii) Other than the transaction as detailed in note 17(ii), no options
or awards have been made, exercised or lapsed during the year
ended December 31, 2004.

18.  COMMITMENTS

     (i)  At December 31, 2004, the Group had capital commitments in
respect of acquisition of property, plant and equipment, which
are contracted for but not provided in the financial statements,
amounting to USD832,953.

     (ii) At December 31, 2004, the Group had agreed to pay USD144,585 to
Harbin Institute of Technology for the research and development
of polymer lithium-ion batteries for motor vehicles.


19.  RELATED PARTY TRANSACTIONS

     During the year ended December 31, 2004, the Group sold goods amounting
to USD420,790 to a related company in which a director of the Company
has a controlling interest.  The transaction was entered into in the
normal course of business and at normal commercial terms.


20.  WARRANTIES

     The Group warrants that all equipment manufactured by it will be free
from defects in material and workmanship under normal use for a period
of one year from the date of shipment.  The Group's experience for
costs and expenses in connection with such warranties has been minimal
and during the year ended December 31, 2004, no amounts have been
considered necessary to reserve for warranty costs at this time.

                                                                F-22
<PAGE>

                     ADVANCED BATTERY TECHNOLOGIES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21.  SUBSEQUENT EVENT

     On January 20, 2005, the Company entered into a contract with its
chairman, Zhiguo Fu, as well as Zhijie Fu and Wenhua Yang.  The
contract acknowledged that these three individuals had provided
USD4,832,976 to fund the construction of plant facilities owned by ZQ
Power-Tech.  Since the Company has a 70% interest in ZQ Power-Tech, the
contract provided that the Company would issue a total of 11,276,947
shares to satisfy USD3,383,084 (i.e. 70%) of the loan from the three
individuals to ZQ Power-Tech.  The individuals agreed that the
remaining 30% of the loan would be a contribution to the capital of ZQ
Power-Tech.

                                                                F-23
<PAGE>

                                 SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                 Advanced Battery Technologies, Inc.

                                 By: /s/ Zhiguo Fu
                                 -----------------------------------
                                 Zhiguo Fu, Chief Executive Officer

     In accordance with the Exchange Act, this Report has been signed
below on March 31, 2005 by the following persons, on behalf of the Registrant
and in the capacities and on the dates indicated.

/s/ Zhiguo Fu
___________________________
Zhiguo Fu, Director,
Chief Executive Officer

/s/ Guohua Wan
____________________________
Guohua Wan, Director,
Chief Financial and Chief
Accounting Officer

/s/ Ming Liu
____________________________
Ming Liu, Director

/s/ Yongguo Yang
_____________________________
Yongguo Yang, Director

/s/ Guopeng Gao
_____________________________
Guopeng Gao, Director


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>abat10k2004exh10b.txt
<DESCRIPTION>EXH 10B - 12/31/04
<TEXT>
                                LOAN AGREEMENT

1.  Parties: The undersigned is Heilongjiang Zhongqiang Power Tech. Co.,
    Ltd, the Borrower, and the Lender is China Financial Bank Harbin Branch.

2.  Date of Agreement: Nov. 20, 2004.

3.  Term, Principal amount and Purpose.

     3.1. Total loan amount is: 16,000,000.00 RMB ($1,932,368.00 USD).
     3.2. Purpose: These money use for purchasing machines and
          equipments for manufacturing battery only.
     3.3. Term: From Nov. 23, 2004 to Nov. 22, 2006.
     3.4. Lender promises to give Borrower this amount of money within
          5 hours after this agreement is signed.
     3.5. Borrower promises to repay by using the money as following
          (but not limited to):
           a). Sales income
           b). Other incomes
           c). Sell off guaranty
     3.6. Borrower promises to repay both principal and interest to
          Lender after the term finished.

4.  Interest Rate and Payment on Principal:

     4.1. The interest rate on this loan is 0.672% per month.
     4.2. The interest will start calculating after the Principal reach
          to the Borrower's account. The borrower will pay the interest by
          month.
     4.3. Prepayment .Borrower has the right to prepay the whole
          outstanding amount at any time. If Borrower pays early, or if this
          loan is refinanced or replaced by a new note, Lender will calculate
          the interest to the date that Borrower repays the whole Principal.

5.  Guaranty. Borrower uses it's properties, including workshops and
    office buildings, as Guaranty.

6.  Responsibility.

     6.1. Borrower's Responsibility
           a). Borrower promises to use the Principal only as the Purpose
               described above(3.2).
           b). Borrower will not use the Principal for any illegal operations.
           c). Before Borrower repays the Principal, any big
               management  actions occurred by Borrower, such as Merge, Split,
               Acquire etc,  need to report to Lender within 30 days.
           d). If Borrower faces a serious situation such as Dissolution or
               Shutout, Borrower promises to repay the Principal at once.
           e). Borrower should send monthly financial report and bank statement
               to Lender, and cooperate with Lender in investigating and
               checking Borrower's manufacture, operating and financial status.
     6.2. Lender's Responsibility
           a). Lender promises to give the money to Borrower on time.
           b). Lender shall not disclose any confidential information received
               from Borrower, including Borrower's debts, financial statement,
               manufacture and operating status.

7.  Changes

     7.1. If for any reasons Borrow wants to extend the Loan Term, Borrower
          needs to send an application to Lender in writing within 30
          days before the Principal Repay Date.
     7.2. If Borrower wants to transfer the debt under this agreement
          (the Principal) to a third Party, Borrower will need an agreement in
          writing from Lender. Before Lender and the third Party sign the new
          Loan Agreement, this agreement is still survive.
     7.3. Each Party need to inform the other Party in writing if they want to
          change any items in this agreement and then sign another agreement.

8.  If Borrower use the Principal for purpose other than it mentioned
    in this agreement (3.2), Lender has the right to stop this Loan and
    take back all the Principal and Interest at once. Plus, Lender has the
    right to charge a penalty fee for 0.0448% multiply the Principal per day.

9.  If Borrower couldn't repay the Principal and Interest on time, Lender has
    the right to change an extra Interest Rate at 0.0336% per day.

10. If Lender couldn't obey Item 5 in this agreement to lend the Principal to
    Borrower on time, Lender will pay Borrower a penalty fee for 0.01%
    multiply the Principal per day.

11. If there is any disagreement between two Parties during the Term, they
    should negotiate on that. If it doesn't work, each Party has the right to
    lawsuit the other Party.

12. If Borrower changes the address, mailing address, aitificial person and
    other registration information, Lender will need a written notice within
    7 days.

13. After negotiation, Borrower agrees to repay the principal as following
    step:

     13.1. Borrower will repay half of the Principal, 8 million RMB
           ($966,184.00 USD) by Nov. 23, 2005.
     13.2. Borrower will repay the rest of the Principal, 8 million RMB
           ($966,184.00 USD) by Nov. 23, 2006.

14. This agreement has two copies. Each Party has one and shall be an original.


Borrower: Heilongjiang Zhongqiang Power Tech. Co., Ltd
Address:  1 Weiyou Road, Shuangcheng City, Harbin, China. 150100
          Tel: 86-451-53118471

Lender:   China Financial Bank Harbin Branch
Address:  378 Xuanhua Street, Nangang Dist. Harbin, China. 150001
          Tel: 86-451-87520285



                                LOAN AGREEMENT

1.  Parties: The undersigned is Heilongjiang Zhongqiang Power Tech. Co.,
    Ltd, the Borrower, and the Lender is China Financial Bank Harbin Branch.

2.  Date of Agreement: Nov. 20, 2004.

3.  Term, Principal amount and Purpose.

     3.1. Total loan amount is: 4,000,000.00 RMB ($483,092.00 USD).
     3.2. Purpose: These money use for purchasing machines and equipments for
          manufacturing battery only.
     3.3. Term: From Nov. 23, 2004 to Nov. 22, 2006.
     3.4. Lender promises to give Borrower this amount of money within 5 hours
          after this agreement is signed.
     3.5. Borrower promises to repay by using the money as following (but not
          limited to):
           a). Sales income
           b). Other incomes
           c). Sell off guaranty
     3.6. Borrower promises to repay both principal and interest to Lender
          after the term finished.

4.  Interest Rate and Payment on Principal:
     4.1. The interest rate on this loan is 0.672% per month.
     4.2. The interest will start calculating after the Principal reach to the
          Borrower's account. The borrower will pay the interest by month.
     4.3. Prepayment .Borrower has the right to prepay the whole outstanding
          amount at any time. If Borrower pays early, or if this loan is
          refinanced or replaced by a new note, Lender will calculate the
          interest to the date that Borrower repays the whole Principal.

5.  Guaranty. Borrower uses part of it's land as Guaranty.

6.  Responsibility.
     6.1. Borrower's Responsibility
           a). Borrower promises to use the Principal only as the Purpose
               described above(3.2).
           b). Borrower will not use the Principal for any illegal operations.
           c). Before Borrower repays the Principal, any big management
               actions occurred by Borrower, such as Merge, Split, Acquire
               etc,  need to report to Lender within 30 days.
           d). If Borrower faces a serious situation such as Dissolution or
               Shutout, Borrower promises to repay the Principal at once.
           e). Borrower should send monthly financial report and bank
               statement to Lender, and cooperate with Lender in investigating
               and checking Borrower's manufacture, operating and financial
               status.
     6.2. Lender's Responsibility
           a). Lender promises to give the money to Borrower on time.
           b). Lender shall not disclose any confidential information received
               from Borrower, including Borrower's debts, financial statement,
               manufacture and operating status.

7.  Changes
     7.1. If for any reasons Borrow wants to extend the Loan Term, Borrower
          needs to send an application to Lender in writing within 30
          days before the Principal Repay Date.
     7.2. If Borrower wants to transfer the debt under this agreement (the
          Principal) to a third Party, Borrower will need an agreement in
          writing from Lender. Before Lender and the third Party sign the new
          Loan Agreement, this agreement is still survive.
     7.3. Each Party need to inform the other Party in writing if they want to
          change any items in this agreement and then sign another agreement.

8.  If Borrower use the Principal for purpose other than it mentioned
    in this agreement (3.2), Lender has the right to stop this Loan and
    take back all the Principal and Interest at once. Plus, Lender has the
    right to charge a penalty fee for 0.0448% multiply the Principal per day.

9.  If Borrower couldn't repay the Principal and Interest on time, Lender has
    the right to change an extra Interest Rate at 0.0336% per day.

10. If Lender couldn't obey Item 5 in this agreement to lend the Principal to
    Borrower on time, Lender will pay Borrower a penalty fee for 0.01%
    multiply the Principal per day.

11. If there is any disagreement between two Parties during the Term, they
    should negotiate on that. If it doesn't work, each Party has the
    right to lawsuit the other Party.

12. If Borrower changes the address, mailing address, aitificial person
    and other registration information, Lender will need a written notice
    within 7 days.

13. After negotiation, Borrower agrees to repay the principal as following
    step:
     13.1. Borrower will repay half of the Principal, 2 million RMB
           ($241,546.00 USD) by Nov. 23, 2005.
     13.2. Borrower will repay the rest of the Principal, 2 million RMB
           ($241,546.00 USD) by Nov. 22, 2006.

14. This agreement has two copies. Each Party has one and shall be an original.



Borrower: Heilongjiang Zhongqiang Power Tech. Co., Ltd
Address:  1 Weiyou Road, Shuangcheng City, Harbin, China. 150100
Tel:      86-451-53118471

Lender:   China Financial Bank Harbin Branch
Address:  378 Xuanhua Street, Nangang Dist. Harbin, China. 150001
          Tel: 86-451-87520285

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>abat10k2004exh31.txt
<DESCRIPTION>EXH 31 - 12/31/04
<TEXT>
                  EXHIBIT 31: Rule 13a-14(a) Certifications

I, Zhiguo Fu, certify that:

           1.  I have reviewed this annual report on Form 10-KSB of Advanced
Battery Technologies, Inc.;

           2.  Based on my knowledge, this  report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

           3.   Based on my knowledge, the financial statements, and other
financial information included in this  report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
small business issuer as of, and for, the periods presented in this  report;

           4.  The small business issuer's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small
business issuer and have:

           a)  Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,  to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this  report is being
prepared;

           b)  Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation;
and

           c) Disclosed in this report any change in the small business issuer's
internal controls over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and

           5.  The small business issuer's other certifying officers and I have
disclosed, based on our most recent evaluation of internal controls over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

           a)  All significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting which are
reasonably likely to  adversely affect the small business issuer's ability to
record, process, summarize and report financial information; and


           b)  Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal controls over financial reporting.

Date: March ___, 2005		       /s/ Zhiguo Fu
                                       ----------------------------------
                                       Zhiguo Fu, Chief Executive Officer

I, Guohua Wan, certify that:

           1.  I have reviewed this annual report on Form 10-KSB of Advanced
Battery Technologies, Inc.;

           2.  Based on my knowledge, this  report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;

           3.   Based on my knowledge, the financial statements, and other
financial information included in this  report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
small business issuer as of, and for, the periods presented in this  report;

           4.  The small business issuer's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small
business issuer and have:

           a)  Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,  to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this  report is being
prepared;

           b)  Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation;
and

           c) Disclosed in this report any change in the small business issuer's
internal controls over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and

           5.  The small business issuer's other certifying officers and I have
disclosed, based on our most recent evaluation of internal controls over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

           a)  All significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting which are
reasonably likely to  adversely affect the small business issuer's ability to
record, process, summarize and report financial information; and

           b)  Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business issuer's
internal controls over financial reporting.

Date: March ___, 2005		       /s/ Guohua Wan
                                       ------------------------------------
                                       Guohua Wan, Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>abat10k2004exh32.txt
<DESCRIPTION>EXH 32 - 12/31/04
<TEXT>
                  EXHIBIT 32: Rule 13a-14(b) Certifications


The undersigned officers certify that this report fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934, and
that the information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of Advanced
Battery Technologies, Inc.

A signed original of this written statement required by Section 906 has been
provided to Advanced Battery Technologies, Inc. and will be retained by
Advanced Battery Technologies, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.

March ___, 2005                 /s/ Zhiguo Fu
                                -------------------------------------
                                Zhiguo Fu (Chief executive officer)

March ___, 2005                 /s/ Guohua Wan
                                -------------------------------------
                                Guohua Wan (Chief financial officer)








18


F-5
F-39




</TEXT>
</DOCUMENT>
</SUBMISSION>
