UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: March 31, 2023

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

For the transition period from _____________ to _____________

Commission File Number: 001-32898

CBAK ENERGY TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		88-0442833
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

BAK Industrial Park, Meigui Street
Huayuankou Economic Zone
Dalian City, Liaoning Province,
People’s Republic of China, 116450

(Address of principal executive offices, Zip Code)

(86)(411)-3918-5985

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		CBAT		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☒
Non-accelerated filer ☐		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 8, 2023 is as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		89,007,525

CBAK ENERGY TECHNOLOGY, INC.

TABLE OF CONTENTS

PART I
	FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	54
Item 4.	Controls and Procedures.	54
PART II
	OTHER INFORMATION
Item 1.	Legal Proceedings.	56
Item 1A.	Risk Factors.	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	56
Item 3.	Defaults Upon Senior Securities.	56
Item 4.	Mine Safety Disclosures.	56
Item 5.	Other Information.	56
Item 6.	Exhibits.	56

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

FINANCIAL STATEMENTS

CBAK ENERGY TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTNS ENDED

MARCH 31, 2022 AND 2023

CBAK ENERGY TECHNOLOGY, INC.

AND SUBSIDIARIES

TABLE OF CONTENTS

Contents		Page(s)
Condensed Consolidated Balance Sheets as of December 31, 2022 and March 31, 2023 (unaudited)		2
Condensed Consolidated Statements of Operations and Comprehensive Income (loss) for the three months ended March 31, 2022 and 2023 (unaudited)		3
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2022 and 2023 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2023 (unaudited)		5
Notes to the Condensed Consolidated Financial Statements (unaudited)		6 - 43

CBAK Energy Technology, Inc. and Subsidiaries

Condensed consolidated Balance Sheets

As of December 31, 2022 and March 31, 2023

(Unaudited)

(In US$ except for number of shares)

	Note		December 31, 2022			March 31, 2023
						(Unaudited)
Assets
Current assets
Cash and cash equivalents			$	6,519,212		$	7,535,193
Pledged deposits		2		30,836,864			35,601,854
Trade and bills receivable, net		3		27,413,575			28,109,643
Inventories		4		49,446,291			50,777,816
Prepayments and other receivables		5		5,915,080			6,121,156
Receivables from a former subsidiary, net		15		5,518,052			1,818,269
Income tax recoverable				57,934			58,273
Total current assets				125,707,008			130,022,204

Property, plant and equipment, net		6		90,004,527			88,433,232
Construction in progress		7		9,954,202			15,174,189
Long-term investments, net		8		945,237			950,770
Prepaid land use rights		9		12,361,163			12,350,586
Intangible assets, net		10		1,309,058			1,195,435
Operating lease right-of-use assets, net				1,264,560			1,140,996
Deferred tax assets, net		19		2,486,979			2,902,856
Total assets			$	244,032,734		$	252,170,268

Liabilities
Current liabilities
Trade and bills payable		13	$	67,491,435		$	77,765,458
Short-term bank borrowings		14		14,907,875			18,634,717
Other short-term loans		14		689,096			602,337
Accrued expenses and other payables		15		25,605,661			22,372,971
Payables to a former subsidiary, net		16		358,067			355,913
Deferred government grants, current		17		1,299,715			847,584
Product warranty provisions		18		26,215			24,663
Warrants liability		25		136,000			51,000
Operating lease liability, current		9		575,496			479,875
Finance lease liability, current		9		844,297			485,279
Total current liabilities				111,933,857			121,619,797

Deferred government grants, non-current		17		5,577,020			5,513,425
Product warranty provisions		18		450,613			471,016
Operating lease liability, non-current		9		607,222			546,461
Accrued expenses and other payables, non-current		15		1,085,525			1,091,878
Total liabilities				119,654,237			129,242,577

Commitments and contingencies		26

Shareholders’ equity
Common stock $0.001 par value; 500,000,000 authorized; 89,135,064 issued and 88,990,858 outstanding as of December 31, 2022; 89,151,731 issued and 89,007,525 outstanding as of March 31, 2023				89,135			89,151
Donated shares				14,101,689			14,101,689
Additional paid-in capital				246,240,998			246,245,879
Statutory reserves				1,230,511			1,230,511
Accumulated deficit				(131,946,705	)		(133,327,060	)
Accumulated other comprehensive loss				(8,153,644	)		(7,498,971	)
				121,561,984			120,841,199
Less: Treasury shares				(4,066,610	)		(4,066,610	)
Total shareholders’ equity				117,495,374			116,774,589
Non-controlling interests				6,883,123			6,153,102
Total equity				124,378,497			122,927,691

Total liabilities and shareholder’s equity			$	244,032,734		$	252,170,268

See accompanying notes to the condensed consolidated financial statements.

CBAK Energy Technology, Inc. and Subsidiaries

Condensed consolidated Statements of Operations and Comprehensive Income (Loss)

For the three months ended March 31, 2022 and 2023

(Unaudited)

(In US$ except for number of shares)

			Three months ended March 31,
	Note		2022			2023
Net revenues		28	$	80,196,298		$	42,396,701
Cost of revenues				(74,879,944	)		(39,490,957	)
Gross profit				5,316,354			2,905,744
Operating expenses:
Research and development expenses				(3,313,124	)		(2,455,328	)
Sales and marketing expenses				(829,674	)		(721,004	)
General and administrative expenses				(2,237,374	)		(2,479,135	)
Provision for doubtful accounts				(271,443	)		(131,167	)
Total operating expenses				(6,651,615	)		(5,786,634	)
Operating loss				(1,335,261	)		(2,880,890	)
Finance income, net				5,014			5,311
Other income, net				285,204			183,213
Changes in fair value of warrants liability				1,632,000			85,000
Income (loss) before income tax				586,957			(2,607,366	)
Income tax credit		19		93,546			402,884
Net income (loss)				680,503			(2,204,482	)
Less: Net (income) loss attributable to non-controlling interests				(236,050	)		824,127
Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc.			$	444,453		$	(1,380,355	)

Net income (loss)				680,503			(2,204,482	)
Other comprehensive income
– Foreign currency translation adjustment				432,193			748,779
Comprehensive income (loss)				1,112,696			(1,455,703	)
Less: Comprehensive (income) loss attributable to non-controlling interests				(277,059	)		730,021
Comprehensive income (loss) attributable to CBAK Energy Technology, Inc.			$	835,637		$	(725,682	)

Income (loss) per share		24
– Basic			$	0.01		$	(0.02	)
– Diluted			$	0.01		$	(0.02	)

Weighted average number of shares of common stock:		24
– Basic				88,713,841			89,013,359
– Diluted				88,734,957			89,013,359

See accompanying notes to the condensed consolidated financial statements.

CBAK Energy Technology, Inc. and Subsidiaries

Condensed consolidated Statements of Changes in Shareholders’ Equity

For the three months ended March 31, 2022 and 2023

(Unaudited)

(In US$ except for number of shares)

	Common stock issued						Additional		Statutory					Accumulated other		Non-		Treasury shares						Total
	Number				Donated		paid-in		reserves		Accumulated			comprehensive		controlling		Number						shareholders’
	of shares		Amount		shares		capital		(Note 20)		deficit			Income (loss)		interests		of shares			Amount			equity

Balance as of January 1, 2022		88,849,222	$	88,849	$	14,101,689	$	241,946,362	$	1,230,511	$	(122,498,259	)	$	2,489,017	$	7,593,014		(144,206	)	$	(4,066,610	)	$	140,884,573

Net income		-		-		-		-		-		444,453			-		236,050		-			-			680,503

Share-based compensation for employee and director stock awards		-		-		-		34,779		-		-			-		-		-			-			34,779

Foreign currency translation adjustment		-		-		-		-		-		-			391,184		41,009		-			-			432,193

Balance as of March 31, 2022		88,849,222	$	88,849	$	14,101,689	$	241,981,141	$	1,230,511	$	(122,053,806	)	$	2,880,201	$	7,870,073		(144,206	)	$	(4,066,610	)	$

SEC Form 10-Q filed by CBAK Energy Technology Inc.