UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB/A

                                 Amendment No. 1

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

                  For the quarterly period ended March 31, 2005

                                    000-49712
                                    ---------
                            (Commission File Number)

                             CHINA BAK BATTERY, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)

                                     Nevada
                                     ------
                 (State or other jurisdiction of Incorporation)

                                   88-0442833
                                   ----------
                        (IRS Employer Identification No.)

                               BAK Industrial Park
                                No. 1 BAK Street
                        Kuichong Town, Lunggang District
                   Shenzhen, People's Republic of China 518119
                   -------------------------------------------
               (Address of principal executive offices) (Zip Code)

                               (86 755) 897-70060
                               ------------------
                 (Issuer telephone number, including area code)

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 for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to the filing requirements for at least the past 90 days.

                                 [X] Yes [ ] No

As of May 12, 2005,  40,978,533  shares of the  Issuer's  $.001 par value common
stock were outstanding.

Transitional Small Business Disclosure Format:

                                  [ ]Yes [X] No



<PAGE>

                              Explanatory Statement

This Amendment No. 1 (the "Amendment") to the Quarterly Report on Form 10-QSB of
China BAK Battery, Inc. (the "Company") for the quarterly period ended March 31,
2005 amends the Quarterly  Report on Form 10-QSB for the quarterly  period ended
March 31, 2005  originally  filed on May 16, 2005 (the "Original  Filing").  The
Company  has  filed  this  Amendment  to  amend  Items  1 and 2 of Part I of the
Original Filing for the following reasons. As a result of comments received from
the Securities and Exchange  Commission  ("the  Commission")  in connection with
another filing with the  Commission by the Company,  the Company has amended its
consolidated balance sheet as of March 31, 2005, the consolidated  statements of
operations  for the three  months  and six  months  ended  March 31,  2005,  the
consolidated  statement  of changes in  stockholders'  equity for the six months
ended March 31, 2005,  the  consolidated  statements of cash flows for the three
months and six months  ended March 31, 2005,  and  extended or modified  certain
notes to the  consolidated  financial  statements  as of such dates and for such
periods  to  provide  additional   information  to  reflect  retroactively  that
1,152,458  shares of common  stock of the Company were  outstanding  immediately
prior  to the  exchange  of  shares  of  the  Company's  common  stock  for  the
outstanding   shares  of  BAK   International   Co.,   Ltd.  and  the  resulting
recapitalization  that  occurred on January 20,  2005.  The  restatement  had no
effect on total  stockholders'  equity in the  consolidated  balance sheet as of
March 31, 2005 or the consolidated  statements of  stockholders'  equity for the
six  months  ended  March 31,  2005.  As a result of further  comments  from the
Commission  in  connection  with such other  filing with the  Commission  by the
Company,  the Company has amended the consolidated  statements of operations for
the three  months and six months  ended  March 31,  2005 and 2004 to  reclassify
depreciation and amortization expense from a separate item in operating expenses
into  cost of goods  sold,  selling  expenses  and  general  and  administrative
expenses.  The effect of the  restatement is to decrease gross profit in each of
the periods presented. This restatement had no effect on operating income or net
income  in any of the  periods  presented.  The  Company  is  also  filing  this
Amendment  to  provide  in  Item  3 of  Part  I  its  conclusion  regarding  its
reevaluation of its disclosure  controls and procedures  pursuant to Rules 13a -
15(e) and 15(d) - 15(e) of the  Securities  Exchange  Act of 1934,  as  amended.
Pursuant to Rule 12b-15 under the  Securities  Exchange Act of 1934, as amended,
the complete text of Items 1, 2 and 3 of Part I, as amended are set forth below.
The remainder of the Original  Filing is reproduced  in this  Amendment  without
further amendment.

This  Amendment  speaks as of the date of the Original  Filing.  This  Amendment
should be read together with other documents that the Company has filed with the
Securities  and  Exchange  Commission  subsequent  to the filing of the Original
Filing. Information in such reports and documents updates and supersedes certain
information contained in this Amendment.  The filing of this Amendment shall not
be deemed an admission that the Original Filing,  when made, included any known,
untrue statement of material fact or knowingly  omitted to state a material fact
necessary to make a statement made therein not misleading.







<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION  PAGE

   ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS...................................1

           Consolidated Balance Sheets as of March 31, 2005 (Unaudited)
              and September 30, 2004 ..........................................1

           Consolidated Statement of Operations
             For the Three Months
             Ended March 31, 2005 and 2004  (Unaudited)........................3

           Consolidated Statement of Operations
             For the Six Months
             Ended March 31, 2005 and 2004  (Unaudited)........................4

           Consolidated Statements of Stockholders' Equity (Unaudited).........5

           Consolidated Statements of Cash Flows for the Three Months
             Ended March 31, 2005 and 2004  (Unaudited)........................7

           Consolidated Statements of Cash Flows for the Six Months
             Ended March 31, 2005 and 2004  (Unaudited)........................9

           Notes to Consolidated Financial Statements (Unaudited).............11

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
              OR PLAN OF OPERATION............................................23

   ITEM 3. CONTROLS AND PROCEDURES............................................29

PART II - OTHER INFORMATION...................................................29

   ITEM 6. EXHIBITS...........................................................29

SIGNATURES....................................................................31







                                       i
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly known as Medina Coffee, Inc.) and Subsidiary
                           Consolidated Balance Sheets

                   As of March 31, 2005 and September 30, 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


                                                    March 31,     September 30,
                                                      2005             2004
                                                       $                $
                                                 -------------    -------------
Assets                                             Restated         (Audited)

Current Assets
   Cash                                             10,886,298        3,212,176
   Cash -Restricted                                 10,555,838        7,120,069
   Accounts Receivable, Net                         30,717,771       20,999,561
   Inventories                                      12,125,092       29,535,985
   Prepaid Expenses                                  1,517,750        1,330,645
   Notes Receivable                                    244,460           18,122
   Accounts Receivable - Related Party                 561,989          911,093
                                                 -------------    -------------
      Total Current Assets                          66,609,198       63,127,651
                                                 -------------    -------------

Long-Term Assets

   Property, Plant, & Equipment                     22,602,319       19,875,583
   Construction in Progress                         31,811,026       23,656,190
   Land Use Rights                                   4,029,038        4,029,038
   Less Accumulated Depreciation                    (3,868,270)      (2,370,774)
                                                 -------------    -------------
      Long-term Assets, Net                         54,574,113       45,190,037
                                                 -------------    -------------

Other Assets

   Other Receivables                                   149,469          225,972
   Intangible Assets, Net                               50,056           58,362
                                                 -------------    -------------
      Total other                                      199,525          284,334
                                                 -------------    -------------


      Total Assets                                 121,382,836      108,602,022
                                                 =============    =============





                                       1
<PAGE>

Liabilities and Stockholder's Equity

Current Liabilities

   Accounts Payable                                  17,810,106      23,570,087
   Bank Loans, Short Term                            28,876,941      27,304,162
   Short Term Loans                                        --         1,812,316
   Notes Payable, Other                              25,222,575      20,772,559
   Land Use Rights Payable                            3,751,028       3,750,756
   Construction Costs Payable                         2,549,304       6,347,846
   Customer Deposits                                    208,450         369,390
   Accrued Expenses                                   3,388,537       5,247,656
   Other Liabilities                                    436,078         181,223
                                                   ------------    ------------
      Total Current Liabilities                      82,243,019      89,355,995
                                                   ------------    ------------

Contingencies and Commitments (Note 6)

Stockholders' Equity

   Capital Stock-$.001 Par Value;                        40,978          31,226
      100,000,000 Shares Authorized;
      40,978,533 and 31,225,642 Shares
      Issued and  outstanding at March 31,
      2005 and September 30, 2004,
      respectively
   Additional Paid In Capital                        27,572,874      12,052,845
   Accumulated Comprehensive Income (Loss)               (1,669)           (144)
   Reserves                                           2,323,673       1,724,246
   Retained Earnings                                  9,203,961       5,437,854
                                                   ------------    ------------
                                                     39,139,817      19,246,027
                                                   ------------    ------------
      Total Liabilities and Stockholders' Equity    121,382,836     108,602,022
                                                   ============    ============






The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






                                       2
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly known as Medina Coffee, Inc.) and Subsidiary
                      Consolidated Statements of Operation

               For the Three Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


                                                            2005         2004
                                                              $            $
                                                         ----------   ----------
                                                          Restated     Restated

Revenues, Net of Returns                                 25,878,407   16,166,081

Cost of Goods Sold                                       20,310,291   12,663,035
                                                         ----------   ----------

Gross Profit                                              5,568,116    3,503,046
                                                         ----------   ----------

Expenses:
   Selling Expense                                        1,018,113      405,381
   General and Administrative Expenses                      723,144    1,452,499
   Research and Development                                 165,770      114,498
   Bad Debts Expense                                        294,252      119,881
                                                         ----------   ----------
      Total Expenses                                      2,201,279    2,092,259
                                                         ----------   ----------

Operating Income                                          3,366,837    1,410,787

Other Expense
   Finance Costs                                            572,064      107,308
   Other Expense                                              8,759        5,559
                                                         ----------   ----------
Net Income Before Provision for Income Taxes              2,786,014    1,297,920

Provision for Income Taxes                                  219,776       97,394
                                                         ----------   ----------

Net Income                                                2,566,238    1,200,526
                                                         ==========   ==========

Net Income per Share - Basic and Diluted                       0.07         0.04
                                                         ==========   ==========

Weighted Average Shares Outstanding                      38,811,224   31,225,642
                                                         ==========   ==========




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.




                                       3
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly known as Medina Coffee, Inc.) and Subsidiary
                      Consolidated Statements of Operation

                For the Six Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


                                                            2005         2004
                                                              $            $
                                                         ----------   ----------
                                                          Restated     Restated

Revenues, Net of Returns                                 51,004,672   31,750,468

Cost of Goods Sold                                       41,053,745   24,829,526
                                                         ----------   ----------

Gross Profit                                              9,950,927    6,920,942
                                                         ----------   ----------

Expenses:
   Selling Expense                                        1,825,979      840,418
   General and Administrative Expenses                    1,874,877    1,955,848
   Research and Development                                 185,791      206,305
   Bad Debts Expense                                        345,487      107,595
                                                         ----------   ----------
      Total Expenses                                      4,232,134    3,110,166
                                                         ----------   ----------

Operating Income                                          5,718,793    3,810,776

Other Expense
   Finance Costs                                            961,714      157,980
   Other Expense                                             24,879       14,558
                                                         ----------   ----------
Net Income Before Provision for Income Taxes              4,732,200    3,638,238

Provision for Income Taxes                                  363,842       97,394
                                                         ----------   ----------

Net Income                                                4,368,358    3,540,844
                                                         ==========   ==========

Net Income per Share - Basic and Diluted                       0.12         0.11
                                                         ==========   ==========

Weighted Average Shares Outstanding                      34,976,754   31,225,642
                                                         ==========   ==========



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       4
<PAGE>
<TABLE>
<CAPTION>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
           Consolidated Statements of Changes in Stockholders' Equity

                For The Six Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

                                                                           Additional
                                                                            Paid-In
                                              Number of      Par Value      Capital
                                               Shares            $              $
                                            ------------   ------------   ------------
                                              Restated       Restated       Restated
<S>                                         <C>            <C>            <C>


Balance - September 30, 2003                  31,225,642         31,226      1,176,927
Capital Contribution                                --             --       10,873,899
Net Income (Loss)                                   --             --             --
Transfer to Reserve                                 --             --             --
Deemed Distribution to Shareholders -               --             --             --
   Intangible Assets
Foreign Currency Translation                        --             --             --
                                            ------------   ------------   ------------
Balance - March 31, 2004                      31,225,642         31,226     12,050,826
                                            ------------   ------------   ------------

Balance September 30, 2004                    31,225,642         31,226     12,052,845
Recapitalization                               1,152,458          1,152           --
Contribution of Cash by Stockholders           8,600,433          8,600     16,991,400
Contribution of Cash from Stockholders
   Acquiring Shares of BAK
   International                                    --             --       11,500,000
Distribution of Cash to Stockholders in
   Connection with Acquisition of Shares
   of BAK Battery                                   --             --      (11,500,000)
Cost of Raising Capital                             --             --       (1,471,371)
Net Income                                          --             --             --
Transfer to Reserves                                --             --             --
Foreign Currency Translation                        --             --             --
                                            ------------   ------------   ------------
Balance - March 31, 2005                      40,978,533         40,978     27,572,874
                                            ============   ============   ============







The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       5
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
           Consolidated Statements of Changes in Stockholders' Equity

                For The Six Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

                                  - Continued -

                                                                            Comprehensive
                                              Retained                          Income      Stockholders
                                              Earnings        Reserves          (Loss)         Equity
                                                  $               $               $               $
                                            ------------    ------------    ------------    ------------
                                              Restated                                        Restated


Balance - September 30, 2003                   3,630,298         651,583             (49)      5,489,985
Capital Contribution                                --              --              --        10,873,899
Net Income (Loss)                              3,540,843            --              --         3,540,843
Transfer to Reserve                             (514,404)        514,404            --              --
Deemed Distribution to Shareholders -               --              --
   Intangible Assets                          (3,866,088)           --              --        (3,866,088)
Foreign Currency Translation                        --              --                49              49
                                            ------------    ------------    ------------    ------------
Balance - March 31, 2004                       2,790,649       1,165,987            --        16,038,688
                                            ------------    ------------    ------------    ------------

Balance September 30, 2004                     5,437,854       1,724,246            (144)     19,246,027
Recapitalization                                  (2,824)           --              --            (1,672)
Contribution of Cash by Stockholders                --              --              --        17,000,000
Contribution of Cash from Stockholders
   Acquiring Shares of BAK
   International                                    --              --              --        11,500,000
Distribution of Cash to Stockholders in
    Connection with Acquisition of Shares
    of BAK Battery                                  --              --              --       (11,500,000)
Cost of Raising Capital                             --              --              --        (1,471,371)
Net Income                                     4,368,358            --              --         4,368,358
Transfer to Reserves                            (599,427)        599,427            --              --
Foreign Currency Translation                        --              --            (1,525)         (1,525)
                                            ------------    ------------    ------------    ------------
Balance - March 31, 2005                       9,203,961       2,323,673          (1,669)     39,139,817
                                            ============    ============    ============    ============
</TABLE>










The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       6
<PAGE>
<TABLE>
<CAPTION>


                                CHINA BAK BATTERY
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                      Consolidated Statements of Cash Flows

               For The Three Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

                                                            2005           2004
                                                              $              $
                                                        -----------    -----------
                                                          Restated
<S>                                                     <C>            <C>
Cash Flows from Operating Activities

Net Income                                                2,566,238      1,200,526

   Adjustments to reconcile net income to net
   cash from operating activities:
    Bad debt expense                                        294,252        119,881
    Depreciation and Amortization                           751,075        399,303

   Changes in Assets and Liabilities:
    Accounts Receivable                                  (4,135,125)    (3,524,821)
    Inventory                                             7,175,667     (6,184,949)
    Prepaid Expenses                                     (1,108,578)    (1,752,136)
    Accounts Receivable - Related Party                     (29,309)          --
    Other Receivables                                       163,110           --
    Note Receivable                                         211,185         (1,414)
    Accounts Payable                                     (2,973,007)     6,290,314
    Customer Deposits                                       (23,594)      (392,609)
    Accrued Expenses                                        804,943      3,422,900
    Construction Costs Payable                           (4,545,101)          --
    Other Liabilities                                       234,584             (9)
    Deferred Expenses                                          --           19,987
                                                        -----------    -----------
Net Cash Flows from Operating Activities                   (613,660)      (403,027)
                                                        -----------    -----------






                                       7
<PAGE>

Cash Flows form Investing Activities
   Recapitalization                                          18,328           --
   Acquisition of Property and Equipment                 (1,425,750)      (529,714)
   Construction in Progress                              (4,784,404)    (3,563,523)
   Investment in Intangible Assets                             --             --
                                                        -----------    -----------
      Net Cash Flows from Investing Activities           (6,191,826)    (4,093,237)
                                                        -----------    -----------

Cash Flows from Financing Activities
   Proceeds from Borrowings                              27,229,641     10,836,727
   Repayment from Borrowings                            (25,694,732)    (6,750,614)
   Cash Pledged to Bank                                  (2,628,818)    (1,226,900)
   Deemed Distributions to Shareholders - Intangible
     Assets                                                    --             --
   Proceeds from Issuance of Capital Stock               15,528,629           --
   Contribution of Cash from Stockholders Acquiring
     Shares of BAK International                         11,500,000           --
   Distribution of Cash to Stockholders in Connection
     with Acquisition of Shares of BAK Battery          (11,500,000)          --
                                                        -----------    -----------
      Net Cash Flows from Financing Activities           14,434,720      2,859,213
                                                        -----------    -----------
Effect of Exchange Rate Changes on Cash                        --              (58)

Net Increase (Decrease) in Cash                           7,629,234     (1,637,109)

Cash - Beginning of Period                                3,257,064      2,511,771
                                                        -----------    -----------

Cash - End of Period                                     10,886,298        874,662
                                                        ===========    ===========

Supplemental Cash Flow Disclosures:
   Interest Paid                                            561,508         73,410
                                                        ===========    ===========
   Income Taxes Paid                                         43,156           --
                                                        ===========    ===========
   Recapitalization                                          (1,672)          --
                                                        ===========    ===========
</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





                                       8
<PAGE>
<TABLE>
<CAPTION>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                      Consolidated Statements of Cash Flows

                For The Six Months Ended March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


                                                           2005           2004
                                                            $              $
                                                       -----------    -----------
                                                         Restated
<S>                                                    <C>            <C>
Cash Flows from Operating Activities

Net Income                                               4,368,358      3,540,844

   Adjustments to reconcile net income to net
   cash from operating activities:
    Bad debt expense                                       345,487        107,595
    Depreciation and Amortization                        1,497,039        589,080

   Changes in Assets and Liabilities:
    Accounts Receivable                                (10,063,697)    (5,958,976)
    Inventory                                           17,410,893     (5,195,713)
    Prepaid Expenses                                      (187,105)    (3,214,680)
    Accounts Receivable - Related Party                    349,104       (506,727)
    Other Receivables                                       76,503       (553,286)
    Note Receivable                                       (226,338)      (258,825)
    Accounts Payable                                    (5,759,981)     9,142,301
    Customer Deposits                                     (160,940)      (617,508)
    Accrued Expenses                                    (1,859,119)     3,515,983
    Construction Costs Payable                          (3,798,542)          --
    Other Liabilities                                      234,855         60,408
    Land Use Right Payable                                     272           --
    Deferred Expenses                                         --           (7,373)
                                                       -----------    -----------
Net Cash Flows from Operating Activities                 2,226,789        643,123
                                                       -----------    -----------

Cash Flows form Investing Activities
   Recapitalization                                         18,328           --
   Acquisition of Property and Equipment               (12,882,847)    (3,335,334)
   Construction in Progress                              2,010,038    (12,150,348)
   Investment in Intangible Assets                            --           (5,685)
                                                       -----------    -----------
     Net Cash Flows from Investing Activities          (10,854,481)   (15,491,367)
                                                       -----------    -----------




                                       9
<PAGE>


Cash Flows from Financing Activities
   Proceeds from Borrowings                             48,749,538     20,843,580
   Repayment from Borrowings                           (44,539,060)   (11,572,559)
   Cash Pledged to Bank                                 (3,435,768)    (1,226,900)
   Deemed Distributions to Shareholders - Intangible
     Assets                                                   --       (3,866,088)
   Proceeds from Issuance of Capital Stock              15,528,629     10,873,899
   Contribution of Cash from Stockholders
     Acquiring Shares of BAK International              11,500,000           --
   Distribution of Cash to Stockholders in
     Connection with Acquisition of Shares of
     BAK Battery                                       (11,500,000)          --
                                                       -----------    -----------
      Net Cash Flows from Financing Activities          16,303,339     15,051,932
                                                       -----------    -----------

Effect of Exchange Rate Changes on Cash                     (1,525)            49
                                                       -----------    -----------

Net Increase (Decrease) in Cash                          7,674,122        203,737

Cash - Beginning of Period                               3,212,176        670,925
                                                       -----------    -----------

Cash - End of Period                                    10,886,298        874,662
                                                       -----------    -----------

Supplemental Cash Flow Disclosures:
         Interest Paid                                     874,703        126,208
                                                       ===========    ===========
         Income Taxes Paid                                 138,014           --
                                                       ===========    ===========
         Recapitalization                                   (1,672)          --
                                                       ===========    ===========
</TABLE>





The  accompanying  notes are an integral  part of these  consolidated  financial
statements.






                                       10
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


1.   BASIS OF PRESENTATION

     The condensed  consolidated financial statements of China BAK Battery, Inc.
(formerly known as Medina Coffee,  Inc.) and Subsidiary (the "Company") included
herein have been prepared by the Company,  without audit,  pursuant to the rules
and regulations of the Securities and Exchange  Commission (the "SEC").  Certain
information and footnote  disclosures  normally included in financial statements
prepared in conjunction with generally accepted accounting  principles have been
condensed  or omitted  pursuant  to such  rules and  regulations,  although  the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not misleading.  These  condensed  consolidated  financial  statements
should be read in  conjunction  with the annual audited  consolidated  financial
statements and the notes thereto included in the Company's annual report on Form
10-KSB, and other reports filed with the SEC.

     The  accompanying   unaudited  interim  consolidated  financial  statements
reflect  all  adjustments  of a normal and  recurring  nature  which are, in the
opinion of  management,  necessary  to present  fairly the  financial  position,
results of  operations  and cash flows of the Company  for the  interim  periods
presented.  The results of  operations  for these  periods  are not  necessarily
comparable  to, or indicative of, results of any other interim period or for the
fiscal year taken as a whole. Factors that affect the comparability of financial
data from year to year and for comparable interim periods include  non-recurring
expenses associated with the Company's registration with the SEC, costs incurred
to raise capital and stock awards.

     The condensed  consolidated financial statements are prepared in accordance
with  generally  accepted  accounting  principles  used in the United  States of
America and include the accounts of BAK  International  Limited and Shenzhen BAK
Battery  Co,  Ltd.  for all  periods  presented.  All  significant  intercompany
balances and transactions have been eliminated on consolidation.

2.   RECAPITALIZATION TRANSACTION

     On January 20, 2005,  China BAK  Battery,  Inc.  (formerly  known as Medina
Coffee,  Inc.) and Subsidiary  completed a stock exchange  transaction  with the
stockholders  of  BAK  International  Limited.,  a  Hong  Kong  company,  or BAK
International.  The  exchange was  consummated  under Nevada law pursuant to the
terms of a Securities  Exchange  Agreement dated effective as of January 3, 2005
by  and  among  China  BAK,  BAK  International  and  the  stockholders  of  BAK
International. Pursuant to the Securities Exchange Agreement, the Company issued
39,826,075  shares  of  common  stock,  par  value  $0.001  per  share,  to  the
stockholders of BAK International  (31,225,642 Shares are original  shareholders
of BAK and 8,600,433 Shares to new investors),  representing approximately 97.2%
of the China BAK post-exchange issued  and outstanding common stock, in exchange





                                       11
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)



2.   RECAPITALIZATION TRANSACTION (cont'd)


for 100% of the  outstanding  capital  stock of BAK  International.  The Company
presently  carries on the business of Shenzhen BAK Battery Co.,  Ltd., a Chinese
corporation and BAK International's wholly-owned subsidiary, or BAK Battery.

     The reverse merger transaction has been accounted for as a recapitalization
of BAK  International  whereby the assets and  liabilities and operations of BAK
Battery become the assets and  liabilities and operations of the Company with no
adjustment  to  the  historical  basis  of the  assets  and  liabilities  of BAK
International and the operations consolidated. The 1,152,458 shares of China BAK
outstanding  prior to the stock exchange are accounted for at the net book value
at the time of the transaction,  approximately negative $1,672. The accompanying
financial  statements reflect the recapitalization of the stockholders equity as
if the transaction occurred as of the beginning of the first period presented.

3.   ORGANIZATION AND PRINCIPAL ACTIVITIES

     BAK  International was incorporated in Hong Kong on December 29, 2003 under
the Companies Ordinance as BATCO International  Limited and subsequently changed
its name to BAK  International  Limited on November 3, 2004. On November 6, 2004
the  shareholders of BAK Battery agreed to purchase for a total of $11.5 million
in cash 96.8% of the outstanding  shares of capital stock of BAK  International,
in the same  proportion  as their  ownership  interest in BAK  Battery,  and BAK
International agreed to purchase for a total of $11.5 million in cash all of the
outstanding  shares of capital  stock of BAK Battery,  31,225,642  shares.  Five
shareholders of BAK Battery with ownership  interests of approximately  1.85% of
the 31,225,642  total  outstanding  shares of BAK Battery elected not to acquire
shares in BAK  International.  The five non  participating  shareholders  of BAK
Battery sold their right to acquire their proportional ownership interest in BAK
International  to other BAK Battery  Shareholders  as well as seven  persons who
were not previously  shareholders of BAK Battery for cash, and the proportionate
interests in BAK International to which the five non participating  shareholders
were  entitled  were  acquired by their  transferees.  After the share  purchase
transactions  between BAK International and the shareholders of BAK Battery were
complete,  there were 31,225,642 shares of BAK International  stock outstanding,
exactly  the same as the  number  of  shares  of  capital  stock of BAK  Battery
outstanding  immediately  prior to the share purchases,  and the shareholders of
BAK International were substantially the same as the shareholders of BAK Battery
prior to the share  purchases.  Consequently,  the share  purchases  between BAK
International  and the  shareholders  of BAK Battery has been accounted for as a
recapitalization  of BAK Battery with no adjustment to the  historical  basis of
the assets and  liabilities  of BAK Battery and the operations  consolidated  as
though the  transaction  occurred as of the  beginning  of the first  accounting
period presented in these financial  statements.




                                       12
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)




3.   ORGANIZATION AND PRINCIPAL ACTIVITIES (cont'd)


     Shenzhen BAK Battery Co.,  Ltd.  ("BAK") was founded on August 3, 2001 as a
China-based  company  specializing  in lithium ion (known as "Li-ion" or "Li-ion
cell")  battery cell  production,  for use in the  replacement  battery  market,
primarily for cell phones in the Peoples Republic of China (PRC).

     On January 20, 2005, BAK  International  closed a private  placement of its
securities with unrelated  investors whereby it issued an aggregate of 8,600,433
shares of common stock for gross proceeds of $17,000,000. The cash and shares of
common stock will be held in escrow until the  completion of the reverse  merger
transaction described in Note 2 and the filing of a registration  statement with
the Securities and Exchange Commission.  In conjunction with this financing, the
Chief  Executive  Officer and major  shareholder  of the Company agreed to place
2,179,550  shares  of the  Company's  common  stock  owned by him into an escrow
account,  of  which  50% are to be  released  to the  investors  in the  private
placement if audited net income for the fiscal year ending September 30, 2005 is
not at least $12,000,000 and of which 50% are to be released to investors in the
private placement if audited net income for the fiscal year ending September 30,
2006 is not at least $27,000,000.

     The  Company  changed  its  year-end  from  December  31 to  September  30,
effective from September 30, 2004.

     In February 2005,  the Company  changed its name from Medina Coffee Inc. to
China BAK Battery, Inc.

     The Company is subject to the  consideration  and risks of operating in the
PRC. These include risks associated with the political and economic environment,
foreign currency exchange and the legal system in the PRC.

     The  economy  of  PRC  differs  significantly  from  the  economies  of the
"western"  industrialized  nations  in such  respects  as  structure,  level  of
development, gross national product, growth rate, capital reinvestment, resource
allocation,   self-sufficiency,  rate  of  inflation  and  balance  of  payments
position,  among  others.  Only  recently  has  the  PRC  government  encouraged
substantial  private  economic  activities.  The Chinese economy has experienced
significant  growth in the past several  years,  but such growth has been uneven
among various sectors of the economy and geographic regions.  Actions by the PRC
government to control inflation have significantly restrained economic expansion
in the recent past.  Similar  actions by the PRC  government in the future could
have a significant adverse effect on economic conditions in PRC.




                                       13
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

3.   ORGANIZATION AND PRINCIPAL ACTIVITIES (cont'd)

     Many laws and  regulations  dealing  with  economic  matters in general and
foreign investment in particular have been enacted in the PRC. However,  the PRC
still does not have a comprehensive  system of laws, and enforcement of existing
laws may be uncertain and sporadic.

     The Company's operating assets and primary sources of income and cash flows
are of  interests  in the PRC.  The PRC  economy  has,  for many  years,  been a
centrally-planned  economy,  operating  on the basis of  annual,  five-year  and
ten-year state plans adopted by central PRC governmental authorities,  which set
out national  production and  development  targets.  The PRC government has been
pursuing economic reforms since it first adopted its "open-door" policy in 1978.
There is no assurance that the PRC government  will continue to pursue  economic
reforms or that  there will not be any  significant  change in its  economic  or
other  policies,  particularly  in the  event  of any  change  in the  political
leadership  of, or the  political,  economic or social  conditions  in, the PRC.
There is also no assurance  that the Company  will not be adversely  affected by
any such  change  in  governmental  policies  or any  unfavorable  change in the
political,  economic or social conditions, the laws or regulations,  or the rate
or method of taxation in the PRC.

     As many of the economic reforms which have been or are being implemented by
the PRC government are  unprecedented  or  experimental,  they may be subject to
adjustment  or  refinement,  which  may have  adverse  effects  on the  Company.
Further,  through state plans and other economic and fiscal measures, it remains
possible  for the PRC  government  to  exert  significant  influence  on the PRC
economy.

     The Company's  financial  instruments  that are exposed to concentration of
credit  risk  consist  primarily  of cash and  cash  equivalents,  and  accounts
receivable from customers.  Cash and cash  equivalents are maintained with major
banks in the PRC. The Company's business activity is primarily with customers in
the PRC.  The Company  periodically  performs  credit  analysis and monitors the
financial condition of its clients in order to minimize credit risk.

     Any  devaluation  of the Renminbi  (RMB)  against the United  States dollar
would consequently have adverse effects on the Company's  financial  performance
and asset values when measured in terms of the United States dollar.  Should the
RMB  significantly  devalue against the United States dollar,  such  devaluation
could have a material  adverse effect on the Company's  earnings and the foreign
currency  equivalent  of such  earnings.  The  Company  does not hedge its RMB -
United States dollar exchange rate exposure.

     On January 1, 1994, the PRC government introduced a single rate of exchange
as quoted daily by the People's Bank of China (the "Unified  Exchange Rate"). No
representation  is made that the RMB amounts have been,  or could be,  converted
into US$ at that or any rate.  This  quotation of exchange  rates does not imply




                                       14
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)



3.   ORGANIZATION AND PRINCIPAL ACTIVITIES (cont'd)

free  convertibility  of RMB to other foreign  currencies.  All foreign exchange
transactions  continue to take place  either  through the Bank of China or other
banks authorized to buy and sell foreign  currencies at the exchange rate quoted
by the  People's  Bank of China.  Approval of foreign  currency  payments by the
People's  Bank of China or other  institutions  requires  submitting  a  payment
application  form  together with  suppliers'  invoices,  shipping  documents and
signed contracts.

4.   RECENTLY ISSUED ACCOUNTING STANDARDS

     In November 2004, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard ("SFAS") No. 151 "Inventory Costs -
an amendment of ARB No. 43, Chapter 4" ("SFAS 151").  This statement  amends the
guidance  in ARB  No.  43,  Chapter  4,  "Inventory  Pricing,"  to  clarify  the
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs,  and wasted  material  (spoilage).  SFAS 151 requires that those items be
recognized as current-period  charges. In addition, this Statement requires that
allocation  of fixed  production  overheads to costs of conversion be based upon
the normal capacity of the production facilities. The provisions of SFAS 151 are
effective for fiscal years  beginning  after June 15, 2005. As such, the Company
is required to adopt these  provisions at the beginning of the fiscal year ended
December 31, 2006. The Company is currently evaluating the impact of SFAS 151 on
its consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 152  "Accounting for Real Estate
Time-Sharing  Transactions  - an  amendment  of FASB  Statements  No. 66 and 67"
("SFAS 152").  This statement amends FASB Statement No. 66 "Accounting for Sales
of Real Estate" to reference the financial accounting and reporting guidance for
real estate  time-sharing  transactions  that is provided in AICPA  Statement of
Position  04-2  "Accounting  for Real Estate  Time-Sharing  Transactions"  ("SOP
04-2").  SFAS 152 also amends FASB  Statement No. 67  "Accounting  for Costs and
Initial  Rental  operations of Real Estate  Projects" to state that the guidance
for incidental  operations and costs incurred to sell real estate  projects does
not apply to real estate  time-sharing  transactions,  with the  accounting  for
those  operations  and costs  being  subject to the  guidance  in SOP 04-2.  The
provisions  of SFAS 152 are effective in fiscal years  beginning  after June 15,
2005.  As such,  the  Company  is  required  to adopt  these  provisions  at the
beginning of the fiscal year ended  December 31, 2006.  The Company is currently
evaluating the impact of SFAS 152 on its consolidated financial statements.






                                       15
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

4.   RECENTLY ISSUED ACCOUNTING STANDARDS (cont'd)

     In December 2004,  the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
Assets - an amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153 replaces the
exception  from fair value  measurement  in APB Opinion  No. 29 for  nonmonetary
exchanges of similar  productive assets with a general exception from fair value
measurement  for  exchanges of  nonmonetary  assets that do not have  commercial
substance.  A nonmonetary  exchange has commercial  substance if the future cash
flows of the  entity are  expected  to change  significantly  as a result of the
exchange. SFAS 153 is effective for all interim periods beginning after June 15,
2005.  As such,  the  Company  is  required  to adopt  these  provisions  at the
beginning  of the fiscal  quarter  ended  September  30,  2005.  The  Company is
currently  evaluating  the  impact  of SFAS  153 on its  consolidated  financial
statements.

     In December  2004,  the FASB issued SFAS No.  123R,  "Share-Based  Payment"
("SFAS  123R").  SFAS 123R  revises  FASB  Statement  No.  123  "Accounting  for
Stock-Based  Compensation"  and supersedes  APB Opinion No. 25  "Accounting  for
Stock  Issued to  Employees".  SFAS 123R  requires  all  public  and  non-public
companies  to measure and  recognize  compensation  expense for all  stock-based
payments  for  services  received at the  grant-date  fair value,  with the cost
recognized over the vesting period (or the requisite service period).  SFAS 123R
is effective for non-small  business  issuers for all interim periods  beginning
after June 15, 2005.  SFAS 123R is effective for small business  issuers for all
interim  periods  beginning  after  December 15, 2005.  As such,  the Company is
required to adopt these  provisions at the beginning of the fiscal quarter ended
September 30, 2005.  Retroactive  application  of the provisions of SFAS 123R to
the beginning of the fiscal year that includes the effective  date is permitted,
but not required. The Company is currently evaluating the impact of SFAS 123R on
its consolidated financial statements.

5.   BANK DEBTS

     During the quarter  ended March 31,  2005,  the Company  entered  into debt
agreements  with two separate  banks in the  aggregate  amount of  approximately
$21,320,000.  The loans are to support the working capital needs of the Company.
Interest is charged on the debt at rates  ranging from 4.75% to 5.22% per annum.
The loans  contain the personal  guaranty of the principal  stockholders  of the
Company.






                                       16
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


6.   CONTINGENCIES AND COMMITMENTS

     A.   Contingent Liabilities

          1.   Land Use and Ownership Certificate:

     According  to  relevant  PRC  laws  and  regulations,   a  land  use  right
certificate,   along  with  government  approvals  for  land  planning,  project
planning,  and construction need to be obtained before  construction of building
is commenced.  An ownership  certificate shall be granted by the government upon
application  under  the  condition  that  the  aforementioned   certificate  and
government approvals are obtained.

     BAK has not yet  obtained  the land use right  certificate  and  government
approvals  relating to the  construction  of BAK Industrial  Park (the Company's
operating  premises).  However,  BAK has  applied  to obtain  the land use right
certificate of approval.

     Management  believes,  under the  condition  that BAK is granted a land use
right certificate and related  approvals,  there should be no legal barriers for
BAK to  obtain  an  ownership  certificate  for  the  premises  presently  under
construction  in BAK Industrial  Park.  However,  in the event that BAK fails to
obtain the land use right certificate relating to BAK Industrial Park and/or the
government approvals required for the construction of BAK Industrial Park, there
is the risk that the buildings  constructed  need to be vacated as  illegitimate
constructions.

     However,  management  believes that this possibility while present, is very
remote. At a result, no provision has been made in the financial  statements for
this potential occurrence.

          2.   2005  -  US$  1,715,399   Guaranteed  for  Shenzhen   Tongli,   a
               non-related  party, 2005 - US$ 1,208,153  Guaranteed for Shenzhen
               Zhengda,   a  non-related  party,  2005  -  US$  3,856,566  Notes
               Receivable Discounted

     The Company sells notes and accounts  receivable from time to time to banks
at a discount.  At the time of the sale all rights and privileges of holding the
note are transferred to the banks or suppliers. When notes are sold, the Company
removes the asset from its book with a  corresponding  expense for the amount of
the discount. The Company remains contingently liable on a portion of the amount
outstanding in the event the note maker defaults.  The company was  contingently
liable at March 31, 2005 and 2004 in the amounts of $3,856,566.

     No  provision  has  been  made  in  the  financial   statements  for  these
contingencies.




                                       17
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

6.   CONTINGENCIES AND COMMITMENTS (cont'd)

     A.   Contingent Liabilities (cont'd)

          3. BAK and  Development  and  Construction  (Group) Company Limited By

Shares  ("Changchun  Co.")  of  Changchun  Economic  &  Technology   Development
District, have entered into a Cross-Guaranty Agreement,  dated February 20, 2004
(the  "Agreement"),  pursuant to which the parties were  obligated to guaranty a
specified amount of each other's indebtedness to specifically identified lending
institutions.  As of  December  22,  2004,  Chang  Chu  Jingkai  had  guaranteed
indebtedness of the Company to Longgang Division,  Shenzhen Branch, Agricultural
Bank of China  (Agricultural  Bank) in the amount of USD$  24,164,220  (The "BAK
Indebtedness").  BAK has not  guaranteed  any  indebtedness  of Changchun Co. in
accordance with the Agreement.  On December 22, 2004, the Company  received from
Changchun Co. a letter of termination pursuant to which the Agreement was deemed
terminated by Changchun Co. and the Company was relieved of all  obligations  to
guaranty any indebtedness of Changchun Co. in the future. The termination of the
Agreement  in no way  effects  Changchun  Co.'s  continuing  guaranty of the BAK
Indebtedness.

          4.   Social Insurance of BAK's Employees:

     BAK is required to cover employees with various types of social  insurance.
Although all insurances  have been purchased for management  employees,  BAK has
not fully covered other employees. Management believes that BAK needs to provide
all employees with the required insurance.

     In the  event  that any  current  employee,  or  former  employee,  files a
complaint  with the  government,  not  only  will BAK be  required  to  purchase
insurance for such employee,  but BAK may be subject to administrative fines. As
the  Company  believes  that  these  fines are  nominal,  no  provision  for any
potential fines has been made in the accompanying financial statement.

     B.   Capital Commitments

     BAK has commitments  under  construction  contracts for the construction of
factory,  office,  and employee  residence  buildings,  amounting to $1,834,065.
These contracts are  contemplated to be completed at various dates up to the end
of the 2005 calendar year.




                                       18
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)


7.   RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS

     a).  Based on comments from the  Securities  and Exchange  Commission,  the
          Company amended the  consolidated  balance sheet as of March 31, 2005,
          the consolidated statements of operations for the three months and six
          months ended March 31, 2005, the consolidated  statement of changes in
          stockholders'  equity for the six months  ended  March 31,  2005,  the
          consolidated  statements  of cash  flows for the three  months and six
          months ended March 31, 2005, and extended or modified certain notes to
          the   consolidated   financial   statements   to  provide   additional
          information  as  detailed  below.  The   restatements   were  made  to
          retroactively  reflect that 1,152,458 shares of common stock of Medina
          Coffee, Inc. were outstanding  immediately prior to the share exchange
          and the resulting recapitalization.  (See Note 2). The restatement had
          no effect on total stockholders  equity in the accompanying  financial
          statements.

     The following table presents the effects of the aforementioned amendment to
     the consolidated financial statements

                                                  As of and for the Six Months
                                                      Ended March 31, 2005
                                                 ------------------------------
                                                                  As previously
                                                  As restated        reported
                                                     (USD$)           (USD$)
                                                 -------------    -------------
     Shares Issued and Outstanding                  40,978,533       39,826,075
     Common Stock                                       40,978           39,826
     Retained Earnings                               9,203,961        9,205,113
     Net Income                                      4,368,358        4,366,686
     Weighted Average Shares Outstanding            34,976,754       34,580,756
     Net Income per Share                                 0.12             0.13
     Net Cash Flows from Operating Activities        2,226,789        2,253,881
     Net Cash Flows from Investing Activities      (10,854,481)     (10,881,572)





                                       19
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

7.   RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd)



                                                    For the Three Months Ended
                                                          March 31, 2005
                                                 -------------------------------
                                                                  As previously
                                                  As restated       reported
                                                     (USD$)           (USD$)
                                                 -------------    -------------
     Net Income                                      2,566,238        2,563,191
     Weighted Average Shares Outstanding            38,811,224       38,010,428
     Net Income per Share                                 0.07             0.07
     Net Cash Flows from Operating Activities         (613,660)        (595,332)
     Net Cash Flows from Investing Activities       (6,191,826)      (6,210,154)


     The following  notes have been  extended or modified to provide  additional
     information - notes 2 and 3.

     b).  Based on further comments from the Securities and Exchange Commission,
          the Company  amended the  consolidated  statements  of  operations  to
          reclassify  depreciation and amortization expense from a separate item
          in operating  expenses into cost of goods sold,  selling  expenses and
          general and administrative expenses. The effect of the restatement was
          to decrease gross profit in each of the years.  The restatement had no
          effect on operating income or net income in any of the years.

     The following table presents the effects of the  aforementioned  amendments
     to the consolidated statements of operations.


                                                    For the Three Months Ended
                                                          March 31, 2005
                                                  ------------------------------
                                                                   As previously
                                                   As restated        reported
                                                      (USD$)           (USD$)
                                                  -------------    -------------
     Gross Profit                                     5,568,116        6,160,443







                                       20
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

7.   RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd)


                                                    For the Three Months Ended
                                                         March 31, 2004
                                                  ------------------------------
                                                                   As previously
                                                   As restated        reported
                                                      (USD$)           (USD$)
                                                  -------------    -------------
     Gross Profit                                     3,503,046        3,886,503

                                                     For the Six Months Ended
                                                         March 31, 2005
                                                  ------------------------------
                                                                   As previously
                                                   As restated        reported
                                                      (USD$)           (USD$)
                                                  -------------    -------------
     Gross Profit                                     9,950,927       11,265,371

                                                     For the Six Months Ended
                                                         March 31, 2004
                                                  ------------------------------
                                                                   As previously
                                                   As restated        reported
                                                      (USD$)           (USD$)
                                                  -------------    -------------
     Gross Profit                                     6,920,942        7,479,201

     Depreciation  expense  is  included  in the  statements  of  operations  as
     follows:

                                                    Three Months Ended March 31,
                                                        2005            2004
                                                    ------------    ------------
                                                          $               $

Cost of Goods Sold                                       592,327         379,232
Selling Expenses                                         121,159           1,577
General and Administrative Expenses                       35,193          18,328
                                                    ------------    ------------
Total Depreciation Expense                               748,679         399,137
                                                    ============    ============



                                       21
<PAGE>

                             CHINA BAK BATTERY, INC.
             (Formerly Known as Medina Coffee, Inc.) and Subsidiary
                   Notes to Consolidated Financial Statements
                             March 31, 2005 and 2004
                        (Amounts Expressed in US Dollars)
                                   (Unaudited)

7.   RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd)

                                                      Six Months Ended March 31,
                                                          2005           2004
                                                      -----------    -----------
                                                           $              $

     Cost of Goods Sold                                 1,300,186        554,035
     Selling Expenses                                     123,008          4,229
     General and Administrative Expenses                   65,539         30,356
                                                      -----------    -----------
     Total Depreciation Expense                         1,488,733        588,620
                                                      ===========    ===========














                                       22
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation

         Results of  operations  for the three  months  ended  March 31, 2005 as
compared to the three months ended March 31, 2004.

Revenues

         Revenues increased to approximately $25.88 million for the three months
ended March 31, 2005 as compared to approximately $16.17 million for same period
of the prior year,  an  increase  of  approximately  $9.71  million or 60%.  Our
revenues  increased  during  the  period  as a result of  inroads  made into the
aluminum  case cell market  where  revenues  increased to  approximately  $ 6.84
million  for the period as  compared  to  approximately  $2.36 in the prior year
period, an increase of $4.48 million.  Revenues relating to steel case batteries
increased to approximately $11.4 million from approximately $9.98 million in the
prior year  period,  an increase  of  approximately  $1.42  million or 14 %. Our
customers  continued to demand price  concessions  during the second  quarter of
fiscal 2005,  while  simultaneously  raising the bar with respect to quality and
service  requirements.  In  response  to  these  conditions,  we  relied  on the
time-tested approach of cost and price containment. The Company was able to gain
market share both domestically and internationally during the period because, in
our  belief,  our  production  volume and  technological  advantage  gives us an
advantage over our competitors with regard to supply ability and cost.

Gross Profit

         Gross   profit  for  the  three   months   ended  March  31,  2005  was
approximately  $5.57 million or 21.5% of revenues as compared to gross profit of
approximately  $3.50  million or 21.7% of  revenues  for the same  period of the
prior year. The slight  reduction in gross profit,  as a percentage of revenues,
resulted  primarily  from a  combination  of increased  unit selling  prices and
increased unit manufacturing  costs stemming from an increase in prices for most
raw materials used in the manufacturing process. Steel case cell battery selling
prices  increased by 6 % during the period,  while cost of steel case cell units
increased by about 12%,  resulting  in an overall  decrease in gross profit from
23.1% to 18.1% of revenues.  In the aluminum case cell market,  price  increases
averaged 1.6% and unit costs increased by 13%, thereby reducing gross profit. As
such,  gross profits in aluminum case segment  decreased  from 23.0% to 14.2% of
revenues.  We did,  however,  gain market  share due in part to our  decision to
maintain low pricing,  the improved quality of our products and the improvements
we made in  manufacturing  efficiencies.  Prior  to 2004,  we sold our  products
primarily  into the  replacement  battery market (as opposed to the OEM market).
Products in the replacement  market face lower prices and,  consequently,  lower
gross profit margins. Our profit margins should increase as we move into the OEM
segment.

         Continued vertical integration of the manufacturing process, increasing
production  efficiencies,  and low labor  costs  collectively  served to contain
costs and we anticipate that these activities will position us to maintain gross
profit  margins at or near the 22% range during our current  fiscal  year.  Cost
savings  realized from the above  initiatives  will help to offset potential raw
material and other price increases during 2005 and beyond.  Management continues
to focus on cost containment and savings  realized based on increased  economies



                                       23
<PAGE>

of scale in order to  maintain  gross  profit  margins  near 2004  levels.  Some
entities include all costs associated with their distribution  system in cost of
goods  sold while  other  companies  may record a portion of their  distribution
costs in selling  expense.  Because of this  disparity in  financial  reporting,
gross margins  between our company and other  companies  may not be  comparable.
With the exception of transportation  and freight charges which we include under
selling  expenses,  we believe we include  most other costs of our  distribution
system.

Selling Expenses

         Selling expenses  increased to approximately $1.0 million for the three
month period ended March 31, 2005 as compared to approximately  $405,000 for the
same period of the prior year,  an increase of  approximately  $613,000 or about
151.1%.  Salaries related to selling efforts increased to approximately $530,000
from  approximately  $134,000 for the same period of the prior year, an increase
of  approximately  $396,000.  More sales and marketing  efforts were required to
continue gaining market share and to grow revenues.  We had 76 employees engaged
in sales and  marketing  as of March 31,  2005 as compared to 63 as of March 31,
2004. In connection with the introduction of a formal and coordinated  marketing
campaign,   marketing   expenses   decreased  to   approximately   $44,000  from
approximately $62,000 incurred in the same period of the prior year, an decrease
of approximately $18,000.  Transportation,  filing fees, promotion,  trademarks,
depreciation  and other  related  selling and  marketing  expenses  increased to
approximately  $435,000 from  approximately  $212,000 for the same period of the
prior year, an increase of approximately $224,000 Marketing or advertising costs
consist  primarily  of promoting  ourselves  and our  products  through  printed
advertisements  in  trade  publications  and  displaying  our  products  through
attendance and industry trade  exhibitions.  We do not pay slotting fees, engage
in cooperative advertising programs,  participate in buydown programs or similar
arrangements.  No material  estimates are required to determine our marketing or
advertising costs.

General and Administrative Expenses

         General and administrative expenses decreased to approximately $723,000
for the three  months  ended March 31, 2005 as  compared to  approximately  $1.5
million  for the same  period of the prior  year,  a decrease  of  approximately
$729,000 or 50.2%.  As a  percentage  of  revenues,  general and  administrative
expenses  were  2.8%  and  9.0%  as of  March  31,  2005  and  March  31,  2004,
respectively.  Despite efforts related to increasing  manufacturing  facilities,
general and administrative expenses remained manageable relative to revenues.

         Salaries  and  benefits,  increased to  approximately  $291,000 for the
three month  period  ended March 31, 2005 from  approximately  $180,000  for the
three month period ended March 31, 2004, an increase of  approximately  $111,000
or 62%. We had 152 employees in machinery and engineering  positions as of March
31,  2005,  as  compared  to 32  employees  as of the same  period for the prior
year.This  increase,   together  with  an  approximately  $238,000  increase  in
professional  and  consulting  fees,  were more than offset by an  approximately
$873,000 reduction in inventory write-downs.



                                       24
<PAGE>

Research and Development Expenses

         Research and development  expenses increased to approximately  $166,000
for the three months ended March 31, 2005 as compared to approximately  $115,000
for the same period of the prior year, an increase of  approximately  $51,000 or
44%. Increase in research and development staff to 108 as of March 31, 2005 from
91 as of the same period of the prior year was the primary factor accounting for
the increase in this category.  New  initiatives,  such as rechargeable  lithium
polymer  batteries   research  and  development,   and  an  increase  in  patent
applications and maintenance  required  incremental staff hiring  contributed to
the increase.

Bad Debts

         Bad debt expense  totaled  approximately  $294,000 for the three months
ended March 31, 2005 as compared to  approximately  $120,000 for the same period
of the prior year, a increase of $174,000 or 145%.  As a percentage of revenues,
bad debts were  approximately 1.1% and 0.7% for the three months ended March 31,
2005 and 2004,  respectively.  We believe  that the  reserve for bad debts as of
March 31,  2005 is  adequate  and will  adjust  future  reserves as we gain more
experience with our customers.

Operating Income

         Operating  income  totaled  approximately  $3.37  million for the three
months  ended March 31, 2005 as compared to  operating  income of  approximately
$1.41   million  for  the  same  period  of  the  prior  year,  an  increase  of
approximately $1.96 million or 138.6%.

         As a percentage of revenues,  operating  income was 13.0% for the three
months ended March 31, 2005 as compared to 8.7% for the same period of the prior
year.  The  growth  in  operating   income  as  a  percentage  of  revenues  was
substantially due to the increase in gross profit.

Finance Costs

         Finance costs increased to  approximately  $572,000 for the three month
period ended March 31, 2005 as compared to  approximately  $107,000 for the same
period of the prior year, an increase of approximately  $465,000 or 435%. We had
approximately  $54 million in short term loans and notes payable as of March 31,
2005 as compared to  approximately  $20.7  million  outstanding  as of March 31,
2004.  Short term loans and notes  payable are  comprised of various  short term
bank loans and promissory notes, with interest ranging from 4.75% to 5.84 %, and
maturities  of  generally  less than  twelve  months.  The  increase in interest
bearing  debt  caused the  increase  in finance  costs.  The funds were used for
working capital purposes based on the increase in revenues.

Net Income

         Primarily  as a  result  of  increased  sales  during  the  period,  we
increased  our  net  income  to  approximately   $2.6  million  as  compared  to
approximately $1.2 million for the same period of the prior year, an increase of
approximately $1.4 million or about 113.8%.



                                       25
<PAGE>

Dividends

         We have not paid out any dividends to date. In determining our dividend
policy,  our Board of Directors  considers current and long term  profitability,
committed and potential cash requirements,  and our overall financial condition.
We do not  anticipate  the payment of any  dividends  in the future based on the
present financial requirements for expansion.  Should we decide in the future to
pay  dividends,  as a  holding  company,  our  ability  to do so and meet  other
obligations  depends upon the receipt of dividends  or other  payments  from our
operating  subsidiaries  and other holdings and  investments.  In addition,  our
operating  subsidiaries,  from time to time, may be subject to  restrictions  on
their ability to make  distributions to us, including as a result of restrictive
covenants in loan  agreements,  restrictions on the conversion of local currency
into U.S. dollars or other hard currency and other regulatory restrictions.

         Results  of  operations  for the six  months  ended  March 31,  2005 as
compared to the six months ended March 31, 2004.

Revenues

         Revenues  increased  to  approximately  $51  million for the six months
ended March 31, 2005 as compared to approximately $32 million for same period of
the prior year,  an increase of  approximately  $19 million or 59%. Our revenues
increased  during the period as a result of inroads made into the aluminum  case
cell market where  revenues  increased to  approximately  $13.39 million for the
period as compared to approximately  $4.25 in the prior year period, an increase
of $9.14  million.  Revenues  relating  to steel  case  batteries  increased  to
approximately $25.54 million from approximately $23.67 million in the prior year
period,  an increase  of  approximately  $1.87  million or 7.9%.  Our  customers
continued to demand price concessions  during the second quarter of fiscal 2005,
while  simultaneously  raising  the bar with  respect  to  quality  and  service
requirements.  In response  to these  conditions,  we relied on the  time-tested
approach of cost containment and price  reductions.  Despite  continued  pricing
pressure resulting in selling price reductions during the year in the steel case
market, we were able to gain market share both domestically and  internationally
during  the  period  because,   in  our  belief,   our  production   volume  and
technological  advantage gives us an advantage over our competitors  with regard
to supply ability and cost.

Gross Profit

         Gross profit for the six months ended March 31, 2005 was  approximately
$10.0 million or 19.5% of revenues as compared to gross profit of  approximately
$6.9  million or 21.8% of revenues  for the same  period of the prior year.  The
decrease  in  gross  profit,  as a  percentage  of  revenues,  resulted  from  a
combination of increased unit selling  prices,  primarily in the aluminum market
and increased unit  manufacturing  costs stemming from an increase in prices for
most raw materials used in the  manufacturing  process.  Steel case cell battery
selling  prices  decreased  by 4.3% during the period,  while cost of steel case
cell units  increased by about 1.5 %, resulting in an overall  decrease in gross
profit from 21.2% to 16.1% of revenues.  In the aluminum case cell market, price
increases averaged 12 % and unit costs increased by 33 %, thereby reducing gross
profit.  As such, gross profits in aluminum case segment decreased from 25.6% to
12.0%  of  revenues.  We did,  however,  gain  market  share  due in part to our




                                       26
<PAGE>

decision to maintain low pricing,  the improved  quality of our products and the
improvements we made in manufacturing  efficiencies.  Prior to 2004, we sold our
products  primarily into the  replacement  battery market (as opposed to the OEM
market). Products in the replacement market face lower prices and, consequently,
lower gross profit  margins.  Our profit margins should increase as we move into
the OEM segment.

         Continued vertical integration of the manufacturing process, increasing
production  efficiencies,  and low labor  costs  collectively  served to contain
costs and we anticipate that these activities will position us to maintain gross
profit  margins at or near the 22% range during our current  fiscal  year.  Cost
savings  realized from the above  initiatives  will help to offset potential raw
material and other price increases during 2005 and beyond.  Management continues
to focus on cost containment and savings  realized based on increased  economies
of scale in order to  maintain  gross  profit  margins  near 2004  levels.  Some
entities include all costs associated with their distribution  system in cost of
goods  sold while  other  companies  may record a portion of their  distribution
costs in selling  expense.  Because of this  disparity in  financial  reporting,
gross margins  between our company and other  companies  may not be  comparable.
With the exception of transportation  and freight charges which we include under
selling  expenses,  we believe we include  most other costs of our  distribution
system.

Selling Expenses

         Selling expenses  increased to  approximately  $1.8 million for the six
month period ended March 31, 2005 as compared to approximately  $840,000 for the
same period of the prior year,  an increase of  approximately  $986,000 or about
117.3%.  Salaries related to selling efforts increased to approximately $918,000
from  approximately  $253,000 for the same period of the prior year, an increase
of  approximately  $665,000.  More sales and marketing  efforts were required to
continue gaining market share and to grow revenues.  We had 76 employees engaged
in sales and  marketing  as of March 31,  2005 as compared to 63 as of March 31,
2004.  Increases in pension expense and depreciation  comprised the remainder of
the increase.

         Marketing or advertising costs consist primarily of promoting ourselves
and our  products  through  printed  advertisements  in trade  publications  and
displaying our products through attendance and industry trade exhibitions. We do
not pay slotting fees, engage in cooperative  advertising programs,  participate
in buydown programs or similar arrangements.  No material estimates are required
to determine our marketing or advertising costs.

General and Administrative Expenses

         General and  administrative  expenses  decreased to approximately  $1.9
million for the six months  ended  March 31,  2005 as compared to  approximately
$2.0 for the same period of the prior year, a decrease of approximately  $81,000
or 4.3%. As a percentage of revenues,  general and administrative  expenses were
3.7% and 6.2% as of March 31,  2005 and March 31,  2004,  respectively.  Despite




                                       27
<PAGE>

efforts   related  to   increasing   manufacturing   facilities,   general   and
administrative expenses remained manageable relative to revenues.

         Salaries and benefits pensions increased to approximately  $864,000 for
the six month  period ended March 31, 2005 from  approximately  $228,000 for the
six month period ended March 31, 2004, an increase of approximately  $636,000 or
279%. We had 152 employees in machinery  and  engineering  positions as of March
31, 2005,  as compared to 32 employees as of the same period for the prior year.
This increase,  together with a smaller  increase in professional and consulting
fees,  were  more  than  offset  by  a  $1.1  million   reduction  in  inventory
write-downs.

Research and Development Expenses

         Research and development  expenses decreased to approximately  $186,000
for the six months  ended March 31, 2005 as compared to  approximately  $206,000
for the same period of the prior year,  a decrease of  approximately  $20,000 or
10%. The Company  engaged in less patent  applications  in the first  quarter of
fiscal 2005 and  enacted  it's new  initiatives,  such as  rechargeable  lithium
polymer batteries research and development, during the second quarter of 2005.

Bad Debts

         Bad debt  expense  totaled  approximately  $345,000  for the six months
ended March 31, 2005 as compared to  approximately  $108,000 for the same period
of the prior year, a increase of $237,000 or 219%.  As a percentage of revenues,
bad debts were  approximately  0.7% and 0.3% for the six months  ended March 31,
2005 and 2004,  respectively.  We believe  that the  reserve for bad debts as of
March 31,  2005 is  adequate  and will  adjust  future  reserves as we gain more
experience with our customers.

Operating Income

         Operating income totaled approximately $5.72 million for the six months
ended  March 31, 2005 as compared to  operating  income of  approximately  $3.81
million  for the same period of the prior  year,  an  increase of  approximately
$1.91 million or 50.1%.

         As a  percentage  of revenues,  operating  income was 11.2% for the six
months  ended  March 31,  2005 as  compared  to 12.0% for the same period of the
prior year.  The  reduction in operating  income as a percentage of revenues was
substantially  due to  the  increase  in  selling  expense  and  depreciation  /
amortization.

Finance Costs

         Finance  costs  increased to  approximately  $961,000 for the six month
period ended March 31, 2005 as compared to  approximately  $158,000 for the same
period of the prior year, an increase of approximately  $803,000 or 508%. We had
approximately  $54 million in short term loans and notes payable as of March 31,
2005 as compared to  approximately  $20.7  million  outstanding  as of March 31,
2004.  Short term loans and notes  payable are  comprised of various  short term
bank loans and promissory  notes,  with interest  ranging from 4.75 % to 5.84 %,




                                       28
<PAGE>

and maturities of generally  less than twelve  months.  The increase in interest
bearing  debt  caused the  increase  in finance  costs.  The funds were used for
working capital purposes based on the increase in revenues.

Net Income

         Primarily  as a  result  of  increased  sales  during  the  period,  we
increased  our  net  income  to  approximately  $4.37  million  as  compared  to
approximately  $3.54  million for the same period of the prior year, an increase
of approximately $828,000 or about 23.4%.

Dividends

         We have not paid out any dividends to date. In determining our dividend
policy,  our Board of Directors  considers current and long term  profitability,
committed and potential cash requirements,  and our overall financial condition.
We do not  anticipate  the payment of any  dividends  in the future based on the
present financial requirements for expansion.  Should we decide in the future to
pay  dividends,  as a  holding  company,  our  ability  to do so and meet  other
obligations  depends upon the receipt of dividends  or other  payments  from our
operating  subsidiaries  and other holdings and  investments.  In addition,  our
operating  subsidiaries,  from time to time, may be subject to  restrictions  on
their ability to make  distributions to us, including as a result of restrictive
covenants in loan  agreements,  restrictions on the conversion of local currency
into U.S. dollars or other hard currency and other regulatory restrictions.

Item 3.  Controls and Procedures

Previously,  in  connection  with our  Quarterly  Report on Form  10-QSB for the
fiscal  quarter  ended March 31, 2005,  filed with the  Securities  and Exchange
Commission  (the  "Commission")  on May 16, 2005, we carried out an  evaluation,
under the supervision and with the  participation  of our management,  including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our  disclosure  controls and procedures as of March
31,  2005,  and  concluded  that our  disclosure  controls and  procedures  were
effective  as of March 31,  2005.  As a result of comments we received  from the
Commission in connection with another filing with the Commission, we amended our
consolidated balance sheet as of March 31, 2005, the consolidated  statements of
operations  for the three  months  and six  months  ended  March 31,  2005,  the
consolidated  statement  of changes in  stockholders'  equity for the six months
ended March 31, 2005,  the  consolidated  statements of cash flows for the three
months and six months  ended March 31, 2005,  and  extended or modified  certain
notes to the  consolidated  financial  statements  as of such dates and for such
periods  to  provide  additional   information  to  reflect  retroactively  that
1,152,458 shares of our common stock were outstanding  immediately  prior to the
exchange  of  shares  of our  common  stock  for the  outstanding  shares of BAK
International  Co.,  Ltd. and the  resulting  recapitalization  that occurred on
January 20, 2005. The restatement had no effect on total stockholders  equity in
the  consolidated  balance  sheet  as of  March  31,  2005  or the  consolidated
statement of changes in stockholders'  equity for the six months ended March 31,
2005.  As a result of  further  comments  we  received  from the  Commission  in
connection with such other filing made with the Commission,  we also amended the
consolidated  statements of operations for the three months and six months ended
March 31, 2005 and 2004 to reclassify depreciation and amortization expense from
a separate item in operating  expenses into cost of goods sold, selling expenses
and general and  administrative  expenses.  The effect of the restatement was to
decrease gross profit in each of the periods  presented.  The restatement had no
effect on operating  income or net income in any of the periods  presented.  For
further details see Note 7 "RESTATEMENT TO CONSOLIDATED FINANCIAL STATEMENTS" to
the consolidated financial statements at Part I, Item I.

We  have  discussed  the  restatements  described  above  with  our  independent
registered public accountants.  Our management is implementing the following set
of changes:

         (1) Engaging outside consultants with technical  accounting  expertise,
         as  needed,   to  ensure  that   accounting   personnel  with  adequate
         experience,  skills and knowledge  are directly  involved in the review
         and accounting for our complex,  non-recurring  transactions  and those
         items for which we have restated our financial  statements as described
         above;

         (2) Additional training of our accounting staff;

         (3)   Involving   both  internal   accounting   personnel  and  outside
         consultants with technical  accounting  expertise,  as needed, early in
         the  evaluation of the  application  of generally  accepted  accounting
         principles in complex, non-recurring transactions;

         (4) Documenting to standards established by senior accounting personnel
         and the principal accounting officer the review, analysis and related
         conclusions with respect to complex, non-recurring transactions and
         those items for which we have restated our financial statements as
         described above; and

         (5) Requiring senior accounting  personnel and the outside  consultants
         with technical  accounting  expertise to review complex,  non-recurring
         transactions to evaluate and approve the accounting  treatment for such
         transactions  and those items for which we have  restated our financial
         statements as described above.

The  Company  began to execute the  remediation  plans  identified  above in the
fourth quarter of calendar year 2005. The Company  engaged  outside  consultants
with technical accounting expertise commencing in October, 2005.

There was no change in our internal control over financial  reporting during the
quarter  ended March 31, 2005 that has  materially  affected,  or is  reasonably
likely to materially  affect,  our internal  control over  financial  reporting,
other than the changes that are described above.

Under the supervision and with the  participation  of our management,  including
our Chairman and Chief  Executive  Officer and our Chief Financial  Officer,  we
reevaluated the effectiveness of our disclosure controls and procedures, as such
term is defined under Rule 13a-15(e)  promulgated under the Securities  Exchange
Act of 1934, as amended,  as of March 31, 2005. As a result of the  restatements
described  above,  our  Chairman  and  Chief  Executive  Officer  and our  Chief
Financial Officer concluded that our disclosure controls and procedures were not
effective as of March 31, 2005.

                                       29
<PAGE>

PART II OTHER INFORMATION

Item 6.  Exhibits

The following documents are filed as part of this report:

31.1     Chief Executive Officer Certification furnished pursuant to Section 302
         of the Sarbanes-Oxley Act of 2002

31.2     Chief Financial Officer Certification furnished pursuant to Section 302
         of the Sarbanes-Oxley Act of 2002

32.1     Chief Executive Officer Certification furnished pursuant to Section 906
         of the Sarbanes-Oxley Act of 2002

32.2     Chief Financial Officer Certification furnished pursuant to Section 906
         of the Sarbanes-Oxley Act of 2002























                                       30
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                           CHINA BAK BATTERY, INC.
                                           (Registrant)



Date:  February 2, 2006                     /s/ Li Xiangqian
                                           -------------------------------------
                                           Li Xiangqian, Chief Executive Officer



Date:  February 2, 2006                     /s/ Han Yongbin
                                           -------------------------------------
                                           Han Yongbin, Chief Financial Officer























                                       31