China Power Equipment (OTC BB:CPQQ)

The Company has funded its operations and capital expenditures using cash generated from operations and funds raised from issuing convertible preferred stock. It will continue its investment in the development and enhancement of the production facilities for amorphous alloy cores and transformers. Cash generated from operations and funds raised from issuing convertible preferred stock will be used to fulfill such commitments.

China Power Equipment believes its existing cash will be sufficient to maintain its operations at the present level for at least the next 12 months.

We have funded our operations and capital expenditures using cash generated from operations and funds raised from issuing convertible preferred stock. We will continue our investment in the development and enhancement of our production facilities for amorphous alloy cores and transformers. We believe our existing cash and cash equivalents will be sufficient to maintain our operations at the present level for at least the next 12 months.

Source: 2009 10K

Note: This is similar verbiage CPQQ made during 2009, yet they still raised capital in December 2009.

Although restrictions are in place, put forth by investors in a recent private placement, that could limit financing activities:

 The Company may not effect any financing involving issuance of convertible securities with a conversion price based on the trading prices of the Company’s stock after the issuance of such securities or subject to reset provisions depending on a future event; or issuance of securities in transactions granting to purchasers the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such purchaser in such offering, which restrictions shall be valid for the period which is the lesser of 18 months from the Closing Date or until the date when the Buyers hold less than 20% of the Shares.

 Source: 8K (December 4,  2009)