[10-Q] CBAK Energy Technology, Inc. Quarterly Earnings Report
CBAK Energy Technology (CBAT)
For the nine months, net revenues were $136,386,794, with an operating loss of $10,426,268 and a net loss attributable to CBAK of $2,001,695. Cash and cash equivalents were $10,476,254. Total assets were $363,863,064 against total liabilities of $245,406,770, and shareholders’ equity was $118,456,294.
Management disclosed substantial doubt about the company’s ability to continue as a going concern due to accumulated deficits, a working capital deficiency (current liabilities $228,002,695 vs. current assets $157,693,410), and significant short‑term obligations. The company is expanding manufacturing capacity and noted bank loans of $34,330,525 and approximately $198,400,000 of other current liabilities. A stock repurchase program was authorized up to $20,000,000; the company repurchased shares for $1,500,000 and retired them on August 13, 2025. Shares outstanding were 88,645,836 as of November 7, 2025.
- None.
- Going concern disclosure: management cites substantial doubt due to working capital deficiency and significant short‑term obligations as of September 30, 2025.
Insights
Going concern and short-term obligations weigh on liquidity.
CBAK Energy reported Q3 net income of
Cash was
The company authorized a repurchase program up to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended:
For the transition period from _____________ to _____________
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices, Zip Code)
(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 | ||
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.
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).
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 ☐ | ||
| 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 ☐
The number of shares outstanding of each of the issuer’s classes of common stock, as of November 7, 2025 is as follows:
| Class of Securities | Shares Outstanding | |
| Common Stock, $0.001 par value |
CBAK ENERGY TECHNOLOGY, INC.
TABLE OF CONTENTS
| PART I | ||
| FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 47 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 63 |
| Item 4. | Controls and Procedures. | 63 |
| PART II | ||
| OTHER INFORMATION | ||
| Item 1. | Legal Proceedings. | 64 |
| Item 1A. | Risk Factors. | 64 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 64 |
| Item 3. | Defaults Upon Senior Securities. | 64 |
| Item 4. | Mine Safety Disclosures. | 64 |
| Item 5. | Other Information. | 65 |
| Item 6. | Exhibits. | 65 |
i
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
CBAK ENERGY TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2025
CBAK ENERGY TECHNOLOGY, INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
| Contents | Page(s) | |
| Condensed Consolidated Balance Sheets as of December 31, 2024 and September 30, 2025 (unaudited) | 2 | |
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2025 (unaudited) | 3 | |
| Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2025 (unaudited) | 4-5 | |
| Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2025 (unaudited) | 6 | |
| Notes to the Condensed Consolidated Financial Statements (unaudited) | 7 |
1
CBAK Energy Technology, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of December 31, 2024 and September 30, 2025
(Unaudited)
(In US$ except for number of shares)
| Note | December 31, 2024 | September 30, 2025 | ||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | $ | ||||||||
| Pledged deposits | 2 | |||||||||
| Term deposits | 3 | |||||||||
| Trade and bills receivable, net | 4 | |||||||||
| Inventories | 5 | |||||||||
| Prepayments and other receivables | 6 | |||||||||
| Receivables from former subsidiary | 17 | |||||||||
| Income tax recoverable | ||||||||||
| Total current assets | ||||||||||
| Property, plant and equipment, net | 7 | |||||||||
| Construction in progress | 8 | |||||||||
| Long-term investments, net | 9 | |||||||||
| Prepaid land use rights | 10 | |||||||||
| Intangible assets, net | 11 | |||||||||
| Deposit paid for acquisition of long-term investments | 13 | |||||||||
| Operating lease right-of-use assets, net | 10 | |||||||||
| Total assets | $ | $ | ||||||||
| Liabilities | ||||||||||
| Current liabilities | ||||||||||
| Trade and bills payable | 14 | |||||||||
| Short-term bank borrowings | 15 | |||||||||
| Other short-term loans | 15 | |||||||||
| Accrued expenses and other payables | 16 | |||||||||
| Payable to a former subsidiary, net | 17 | |||||||||
| Deferred government grants, current | 18 | |||||||||
| Product warranty provisions | 19 | |||||||||
| Operating lease liability, current | 10 | |||||||||
| Total current liabilities | ||||||||||
| Long-term bank borrowings | 15 | |||||||||
| Deferred government grants, non-current | 18 | |||||||||
| Product warranty provisions | 19 | |||||||||
| Operating lease liability, non-current | 10 | |||||||||
| Total liabilities | ||||||||||
| Commitments and contingencies | 26 | |||||||||
| Shareholders’ equity | ||||||||||
| Common stock $ | ||||||||||
| Donated shares | ||||||||||
| Additional paid-in capital | ||||||||||
| Statutory reserves | 21 | |||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||
| Less: Treasury shares | ( | ) | ||||||||
| Total shareholders’ equity | ||||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||||
| Total equity | ||||||||||
| Total liabilities and shareholder’s equity | $ | $ | ||||||||
See accompanying notes to the condensed consolidated financial statements.
2
CBAK Energy Technology, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
For the three and nine months ended September 30, 2024 and 2025
(Unaudited)
(In US$ except for number of shares)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
| Note | 2024 | 2025 | 2024 | 2025 | ||||||||||||||
| Net revenues | 28 | $ | $ | $ | $ | |||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Sales and marketing expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Allowance for expected credit losses, net | ( | ) | ||||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||||
| Finance (loss) income, net | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income, net | ||||||||||||||||||
| Share of (loss) income of equity investee | ( | ) | ( | ) | ||||||||||||||
| Gain on disposal of equity investee | ||||||||||||||||||
| (Loss) income before income tax | ( | ) | ( | ) | ||||||||||||||
| Income tax (expenses) credit | 20 | ( | ) | ( | ) | |||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||||||||
| Less: Net loss attributable to non-controlling interest | ||||||||||||||||||
| Net income (loss) attributable to CBAK Energy Technology, Inc. | $ | $ | $ | $ | ( | ) | ||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||||||||
| Other comprehensive loss | ||||||||||||||||||
| – Foreign currency translation adjustment | ||||||||||||||||||
| Comprehensive income (loss) | ( | ) | ||||||||||||||||
| Less: Comprehensive loss attributable to non-controlling interest | ||||||||||||||||||
| Comprehensive income attributable to CBAK Energy Technology, Inc. | $ | $ | $ | $ | ||||||||||||||
| Income (loss) per share | 25 | |||||||||||||||||
| – Basic | $ | $ | $ | $ | ( | ) | ||||||||||||
| – Diluted | $ | $ | $ | $ | ( | ) | ||||||||||||
| Weighted average number of shares of common stock: | 25 | |||||||||||||||||
| – Basic | ||||||||||||||||||
| – Diluted | ||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
3
CBAK Energy Technology, Inc. and Subsidiaries
Condensed consolidated statements of changes in shareholders’ equity (deficit)
For the three months ended September 30, 2024 and 2025
(Unaudited)
(In US$ except for number of shares)
| Common stock issued | Additional | Accumulated other |
Non- | Treasury shares | Total shareholders’ |
|||||||||||||||||||||||||||||||||||||||
| Number of | Donated | paid-in | Statutory | Accumulated | comprehensive | Controlling | Number of | equity | ||||||||||||||||||||||||||||||||||||
| shares | Amount | shares | capital | reserves | deficit | income (loss) | interest | shares | Amount | (deficit) | ||||||||||||||||||||||||||||||||||
| Balance as of July 1, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
| Net income (loss) | - | - | ( |
) | - | - | ( |
) | ||||||||||||||||||||||||||||||||||||
| Share-based compensation for employee and director stock awards | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( |
) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
| Balance as of July 1, 2025 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||
| Net income (loss) | - | - | ( |
) | - | - | ||||||||||||||||||||||||||||||||||||||
| Exercise of stock option | ( |
) | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation for employee and director stock award | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( |
) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | - | $ | ||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
4
CBAK Energy Technology, Inc. and Subsidiaries
Condensed consolidated statements of changes in shareholders’ equity (deficit)
For the nine months ended September 30, 2024 and 2025
(Unaudited)
(In US$ except for number of shares)
| Common stock issued | Additional | Accumulated other | Non- | Treasury shares | Total shareholders’ | |||||||||||||||||||||||||||||||||||||||
| Number of | Donated | paid-in | Statutory | Accumulated | comprehensive | Controlling | Number of | equity | ||||||||||||||||||||||||||||||||||||
| shares | Amount | shares | capital | reserves | deficit | Income (loss) | interest | shares | Amount | (deficit) | ||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation for employee and director stock awards | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Common stock issued to employees and directors for stock awards | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Exercise of stock option | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation for employee and director stock awards | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Appropriation to statutory reserves | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | - | $ | ||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
5
CBAK Energy Technology, Inc. and subsidiaries
Condensed consolidated statements of cash flows
For the nine months ended September 30, 2024 and 2025
(Unaudited)
(In US$)
| Nine months ended September 30, | ||||||||
| 2024 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | ( | ) | |||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Allowance for expected credit losses | ( | ) | ( | ) | ||||
| Amortization of operating lease | ||||||||
| Write-down of inventories | ||||||||
| Share-based compensation | ||||||||
| Share of loss (profit) on equity investee | ( | ) | ||||||
| (Gain) loss on disposal of property, plant and equipment | ( | ) | ||||||
| Gain on disposal on equity investee | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and bills receivable | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Prepayments and other receivable | ( | ) | ||||||
| Trade and bills payable | ||||||||
| Accrued expenses and other payables and product warranty provisions | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Trade receivable from and payables to former subsidiaries | ||||||||
| Income tax payable (recoverable) | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Deposit paid for acquisition of long-term investment | ( | ) | ||||||
| Proceeds from disposal of an equity method investees | ||||||||
| Proceeds from disposal of property, plant and equipment | ||||||||
| Purchases of property, plant and equipment and construction in progress | ( | ) | ( | ) | ||||
| Government subsidy | ||||||||
| Acquisition of land use right | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Borrowings from banks | ||||||||
| Repayment of bank borrowings | ( | ) | ( | ) | ||||
| Placement of term deposits | ( | ) | ( | ) | ||||
| Withdrawal of term deposits | ||||||||
| Repurchase of common stock | ( | ) | ||||||
| Proceeds from finance lease | ||||||||
| Principal payments of finance leases | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | ||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | ( | ) | ||||||
| Cash and cash equivalents and restricted cash at the beginning of period | ||||||||
| Cash and cash equivalents and restricted cash at the end of period | $ | $ | ||||||
| Supplemental non-cash investing and financing activities: | ||||||||
| Transfer of construction in progress to property, plant and equipment | $ | $ | ||||||
| Lease liabilities arising from obtaining right-of-use assets | $ | $ | ||||||
| Cash paid during the year for: | ||||||||
| Income taxes | $ | $ | ||||||
| Interest, net of amounts capitalized | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
6
CBAK Energy Technology, Inc. and subsidiaries
Notes to the condensed consolidated financial statements
For the three and nine months ended September 30, 2024 and 2025
(Unaudited)
(In US$ except for number of shares)
| 1. | Principal Activities, Basis of Presentation and Organization |
Principal Activities
CBAK Energy Technology, Inc. (formerly known
as China BAK Battery, Inc.) (“CBAK” or the “Company”) is a corporation formed in the State of Nevada on
The shares of the Company traded in the over-the-counter market through the Over-the-Counter Bulletin Board from 2005 until May 31, 2006, when the Company obtained approval to list its common stock on The NASDAQ Global Market, and trading commenced that same date under the symbol “CBAK”.
On January 10, 2017, the Company filed Articles of Merger with the Secretary of State of Nevada to effectuate a merger between the Company and the Company’s newly formed, wholly owned subsidiary, CBAK Merger Sub, Inc. (the “Merger Sub”). According to the Articles of Merger, effective January 16, 2017, the Merger Sub merged with and into the Company with the Company being the surviving entity (the “Merger”). As permitted by Chapter 92A.180 of Nevada Revised Statutes, the sole purpose of the Merger was to effect a change of the Company’s name.
Effective November 30, 2018, the trading symbol for common stock of the Company was changed from CBAK to CBAT. Effective at the opening of business on June 21, 2019, the Company’s common stock started trading on the Nasdaq Capital Market.
Basis of Presentation and Organization
On November 6, 2004, BAK International, a non-operating holding company that had substantially the same shareholders as Shenzhen BAK Battery Co., Ltd (“Shenzhen BAK”), entered into a share swap transaction with the shareholders of Shenzhen BAK for the purpose of the subsequent reverse acquisition of the Company. The share swap transaction between BAK International and the shareholders of Shenzhen BAK was accounted for as a reverse acquisition of Shenzhen BAK with no adjustment to the historical basis of the assets and liabilities of Shenzhen BAK.
On January 20, 2005, the Company completed a share swap transaction with the shareholders of BAK International. The share swap transaction, also referred to as the “reverse acquisition” of the Company, was consummated under Nevada law pursuant to the terms of a Securities Exchange Agreement entered by and among CBAK, BAK International and the shareholders of BAK International on January 20, 2005. The share swap transaction has been accounted for as a capital-raising transaction of the Company whereby the historical financial statements and operations of Shenzhen BAK are consolidated using historical carrying amounts.
Also on January 20, 2005, immediately prior to
consummating the share swap transaction, BAK International executed a private placement of its common stock with unrelated investors
whereby it issued an aggregate of
Under accounting principles generally accepted in the United States of America (“US GAAP”), escrow agreements such as the one established by Mr. Li generally constitute compensation if, following attainment of a performance threshold, shares are returned to a company officer. The Company determined that without consideration of the compensation charge, the performance thresholds for the year ended September 30, 2005 would be achieved. However, after consideration of a related compensation charge, the Company determined that such thresholds would not have been achieved. The Company also determined that, even without consideration of a compensation charge, the performance thresholds for the year ended September 30, 2006 would not be achieved.
7
While the
At the time the escrow shares relating to the
2006 performance threshold were transferred to the investors in fiscal year 2007, the Company should have recognized a credit to donated
shares and a debit to additional paid-in capital, both of which are elements of shareholders’ equity. This entry is not material
because total ordinary shares issued and outstanding, total shareholders’ equity and total assets do not change; nor is there any
impact on income or earnings per share. Therefore, previously filed consolidated financial statements for the fiscal year ended September
30, 2007 will not be restated. This share transfer has been reflected in these financial statements by reclassifying the balances of
certain items as of October 1, 2007. The balances of donated shares and additional paid-in capital as of October 1, 2007 were credited
and debited by $
In November 2007, Mr. Li delivered the
Beginning on March 13, 2008, the Company entered into settlement agreements (the “2008 Settlement Agreements”) with certain investors in the January 2005 private placement. Since the other investors have never submitted any claims regarding this matter, the Company did not reach any settlement with them.
Pursuant to the 2008 Settlement Agreements, the
Company and the settling investors have agreed, without any admission of liability, to a settlement and mutual release from all claims
relating to the January 2005 private placement, including all claims relating to the escrow shares related to the 2005 performance threshold
that had been placed into escrow by Mr. Li, as well as all claims, including claims for liquidated damages relating to registration rights
granted in connection with the January 2005 private placement. Under the 2008 Settlement Agreement, the Company has made settlement payments
to each of the settling investors of the number of shares of the Company’s common stock equivalent to
Pursuant to the Li Settlement Agreement, the
2008 Settlement Agreements and upon the release of the
8
As of September 30, 2025, the Company had not received any claim from the other investors who have not been covered by the “2008 Settlement Agreements” in the January 2005 private placement.
As the Company has transferred the
On August 14, 2013, Dalian BAK Trading Co., Ltd
was established as a wholly owned subsidiary of China BAK Asia Holding Limited (“BAK Asia”) with a registered capital of
$
On December 27, 2013, Dalian BAK Power Battery
Co., Ltd was established as a wholly owned subsidiary of BAK Asia with a registered capital of $
On May 4, 2018,
CBAK New Energy (Suzhou) Co., Ltd (“CBAK Suzhou”) was established as a
On November 21, 2019, Dalian CBAK Energy Technology
Co., Ltd (“CBAK Energy”) was established as a wholly owned subsidiary of BAK Asia with a registered capital of $
On July 14, 2020, the Company acquired BAK Asia
Investments Limited (“BAK Investments”), a company incorporated under Hong Kong laws, from Mr. Xiangqian Li, the Company’s
former CEO, for a cash consideration of HK$
On July 31, 2020, BAK Investments formed a wholly
owned subsidiary CBAK New Energy (Nanjing) Co., Ltd. (“CBAK Nanjing”) in China with a registered capital of $
9
On August 6, 2020, Nanjing CBAK New Energy Technology
Co., Ltd. (“Nanjing CBAK”) was established as a wholly owned subsidiary of CBAK Nanjing with a registered capital of RMB
On November 9, 2020, Nanjing Daxin New Energy
Automobile Industry Co., Ltd (“Nanjing Daxin”) was established as a wholly owned subsidiary of CBAK Nanjing with a register
capital of RMB
On April 21, 2021, CBAK Power, along with Shenzhen
BAK Power Battery Co., Ltd (“BAK SZ”), Shenzhen Asian Plastics Technology Co., Ltd (“SZ Asian Plastics”) and
Xiaoxia Liu, entered into an investment agreement with Junxiu Li, Hunan Xintao New Energy Technology Partnership, Xingyu Zhu, and Jiangsu
Saideli Pharmaceutical Machinery Manufacturing Co., Ltd for an investment in Hunan DJY Technology Co., Ltd (“DJY”). CBAK
Power has paid approximately $
On August 4, 2021, Daxin New Energy Automobile
Technology (Jiangsu) Co., Ltd (“Jiangsu Daxin”) was established as a wholly owned subsidiary of Nanjing CBAK with a register
capital of RMB
On July 20, 2021,
CBAK Power entered into a framework agreement relating to CBAK Power’s investment in Zhejiang Hitrans Lithium Battery Technology
Co., Ltd (“Hitrans”, formerly known as Zhejinag Meidu Hitrans Lithium Battery Technology Co., Ltd), pursuant to which CBAK
Power agreed to acquire
On July 8, 2022, Hitrans held its second shareholder
meeting (“the shareholder meeting”) in 2022 to pass a resolution to increase the registered capital of Hitrans from RMB
10
On December 8, 2022, CBAK Power entered into
equity interest transfer agreements with five individuals to disposal in aggregate
On March 26, 2024, CBAK New Energy entered into
an agreement with CBAK Power to acquire the same
On July 6, 2018, Guangdong Meidu Hitrans Resources
Recycling Technology Co., Ltd. (“Guangdong Hitrans”) was established as a
On July 28, 2021, Hitrans Holdings, was established as a wholly owned subsidiary of CBAK, under the laws of the Cayman Islands, formerly named as “CBAK Energy Technology, Inc.,” was renamed as “Hitrans Holdings Co., Ltd.” (“Hitrans Holdings”) on February 29, 2024. Hitrans Holdings does not have any significant operations as of the date of this report.
On October 9, 2021, Shaoxing Haisheng International
Trading Co., Ltd. (“Haisheng”) was established as a wholly owned subsidiary of Hitrans with a registered capital of RMB
On July 7, 2023, Hong Kong Nacell Holdings Company Limited was established as a wholly owned subsidiary of Hitrans Holdings, incorporated under the laws of Hong Kong, was renamed as “Hong Kong Hitrans Holdings Company Limited” (“Hong Kong Hitrans”) on March 22, 2024. Hong Kong Hitrans does not have any significant operations as of the date of this report.
On July 12, 2023, CBAK Energy Lithium Holdings was established as a wholly owned subsidiary of CBAK, incorporated under the laws of the Cayman Islands was renamed as “CBAK Energy Lithium Holdings Co. Ltd” on February 29, 2024. CBAK Energy Lithium Holdings does not have any significant operations as of the date of this report.
On July 25, 2023, CBAK New Energy (Shangqiu) Co., Ltd (“CBAK
Shangqiu”) was established as a wholly owned subsidiary of CBAK Power with a registered capital of RMB
11
On February 26, 2024, CBAK Energy Investments Holdings (“CBAK Energy Investments”) was established as a wholly owned subsidiary of CBAK, under the laws of the Cayman Islands. CBAK Energy Investments does not have any significant operations as of the date of this report.
On October 29, 2024, Shenzhen CBAK Sodium Battery
New Energy Co., Ltd (“CBAK Shenzhen”) was established as a wholly owned subsidiary of BAK Investments with a registered capital
of $
On January 9, 2025, Anhui Yuanchuang New Energy
Materials Co., Ltd. (“Yuanchuang”) was established as a wholly owned subsidiary of Hitrans with a registered capital of RMB
On April 30, 2025, the Company established a subsidiary in Malaysia, CBAK ENERGY Lithium Battery Malaysia SDN. BHD. (“CBAK Malaysia”). CBAK Malaysia will focus on the manufacturing and sales of cylindrical lithium cells, targeting overseas markets outside of China. CBAK Malaysia does not have operations as of the date of this report.
The Company’s condensed consolidated financial statements have been prepared under US GAAP.
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company and its subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liability established in the PRC or Hong Kong. The accompanying condensed consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company’s subsidiaries to present them in conformity with US GAAP.
On December 8,
2020, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company issued
in a registered direct offering, an aggregate of
On February 8, 2021, the Company entered into
another securities purchase agreement with the same investors, pursuant to which the Company issued in a registered direct offering,
an aggregate of
On May 10, 2021, the Company entered into that Amendment No. 1 to the Series B Warrant (the “Series B Warrant Amendment”) with each of the holders of the Company’s outstanding Series B warrants. Pursuant to the Series B Warrant Amendment, the term of the Series B warrants was extended from May 11, 2021 to August 31, 2021.
12
As of August 31, 2021, the Company had not received any notices from the investors to exercise Series B warrants. As of September 30, 2025, all of the warrants were expired.
On May 20, 2025, the Company authorized a stock
repurchase program (the “Stock Repurchase Program”) under which the Company may repurchase up to $
As of September 30, 2025, the Company had $
The Company is currently expanding its production lines and manufacturing capacity in its Dalian, Nanjing, Zhejiang and Anhui plant which requires more funding to finance the expansion. The Company plans to raise additional funds through banks borrowings and equity financing in the future to meet its daily cash demands, if required.
Outbreaks of viruses or other health epidemics and outbreaks
The Company business has been and may continue to be adversely affected by the outbreak of a widespread health epidemic, such as COVID-19 avian flu or African swine flu. The Company’s manufacturing facilities in Dalian, Nanjing and Shaoxing did not produce at full capacity when restrictive measures were in force during 2022, which negatively affected our operational and financial results. China began to modify its zero-COVID policy at the end of 2022, and most of the travel restrictions and quarantine requirements were lifted in December 2022.
The extent of the impact of the outbreaks of viruses or other health epidemics that will continue to have on the Company’s business is highly uncertain and difficult to predict and quantify, as the actions that the Company, other businesses and governments may take to contain the spread of possible health epidemics and outbreak continue to evolve. Because of the significant uncertainties surrounding, the extent of the future business interruption and the related financial impact cannot be reasonably estimated at this time.
As of the date of issuance of the Company’s condensed financial statements, the extent to which the possible health epidemics and outbreaks may in the future materially impact the Company’s financial condition, liquidity or results of operations is uncertain. The Company is monitoring and assessing the evolving situation closely and evaluating its potential exposure.
Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has accumulated deficit from recurring net losses, a working capital deficiency and significant short-term debt obligations maturing in less than one year as of September 30, 2025. These conditions raise substantial doubt about the Company ability to continue as a going concern. The Company’s plan for continuing as a going concern included improving its profitability, and obtaining additional debt financing, loans from existing directors and shareholders for additional funding to meet its operating needs. There can be no assurance that the Company will be successful in the plans described above or in attracting equity or alternative financing on acceptable terms, or if at all. These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
13
Revenue Recognition
The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial.
Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers.
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the categories: discounts and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer.
Contract liabilities
The Company’s contract liabilities consist
of deferred revenue associated with batteries development, services contracts and deposits received from customers allocated to the performance
obligations that are unsatisfied. Changes in contract liability balances were not materially impacted by business acquisition, change
in estimate of transaction price or any other factors during any of the years presented.
| September 30, | ||||||||
| 2024 | 2025 | |||||||
| Balance at beginning of year | $ | $ | ||||||
| Development fees collected/ deposits received | ||||||||
| Development and sales of batteries revenue recognized | ( | ) | ||||||
| Exchange realignment | ||||||||
| Balance at end of period | $ | $ | ||||||
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. The Company adopted ASU 2023-07 beginning January 1, 2024 for annual disclosure and adopted beginning January 1, 2025 for interim periods. The adoption did not have material impact on the Company’s condensed consolidated financial statement.
14
Recently Issued But Not Yet Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on the Company’s condensed consolidated financial statement presentations and disclosures.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which requires additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance will be effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s condensed consolidated financial statement presentation and disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326), that provides a practical expedient in developing forecasts as part of estimating expected credit losses. The amendment permits the Company to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual and interim periods beginning after December 15, 2025. Early adoption is permitted and is effective on a prospective basis. The Company is currently evaluating the impact that the adoption of this guidance on the Company’s condensed consolidated financial statement presentations and disclosures.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.
| 2. | Pledged deposits |
Pledged deposits as of December 31, 2024 and September 30, 2025 consisted of pledged deposits with banks for bills payable (note 14).
| 3. | Short-term deposits |
Short-term deposits represent time deposits placed with banks with
maturities longer than three months but less than one year. Interest earned is recorded as finance income in the consolidated financial
statement. As of December 31, 2024 and September 30, 2025, substantially all of the Company’s short-term deposits amounting to $
| 4. | Trade and Bills Receivable, net |
Trade and bills receivable as of December 31, 2024 and September 30, 2025:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Trade receivable | $ | $ | ||||||
| Less: Allowance for credit losses | ( | ) | ( | ) | ||||
| Bills receivable | ||||||||
| $ | $ | |||||||
Included in trade and bills receivables are retention
receivables of $
15
An analysis of the allowance for the credit losses is as follows:
| Balance as at January 1, 2025 | $ | |||
| Current period provision, net | ( | ) | ||
| Written-off | ( | ) | ||
| Foreign exchange adjustment | ||||
| Balance as at September 30, 2025 | $ |
| 5. | Inventories |
Inventories as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work in progress | ||||||||
| Finished goods | ||||||||
| $ | $ | |||||||
During the three months ended September 30, 2024 and 2025, write-downs
of obsolete inventories to lower of cost or net realizable value of $
During the nine months ended September 30, 2024
and 2025, write-downs of obsolete inventories to lower of cost or net realizable value of $
| 6. | Prepayments and Other Receivables |
Prepayments and other receivables as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| VAT recoverable | $ | $ | ||||||
| Prepayments to suppliers | ||||||||
| Deposits | ||||||||
| Staff advances | ||||||||
| Prepaid operating expenses | ||||||||
| Interest receivable | ||||||||
| Receivables from customers for non-operating agency-based service | ||||||||
| Prepayment for common stock repurchase | ||||||||
| Other receivables | ||||||||
| Less: Allowance for credit losses | ( | ) | ( | ) | ||||
| $ | $ | |||||||
16
An analysis of the allowance for credit losses is as follows:
| Balance as at January 1, 2025 | $ | |||
| Current period provision, net | ( | ) | ||
| Foreign exchange adjustment | ||||
| Balance as of September 30, 2025 | $ |
| 7. | Property, Plant and Equipment, net |
Property, plant and equipment as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, 2024 | September 30, 2025 | |||||||
| Buildings | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Machinery and equipment | ||||||||
| Office equipment | ||||||||
| Motor vehicles | ||||||||
| Impairment | ( | ) | ( | ) | ||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Carrying amount | $ | $ | ||||||
During the three months ended September 30, 2024
and 2025, the Company incurred depreciation expense of $
During the nine months ended September 30, 2024
and 2025, the Company incurred depreciation expense of $
During the course of the Company’s strategic review of its operations, the Company assessed the recoverability of the carrying value of the Company’s property, plant and equipment. The impairment charge, if any, represented the excess of carrying amounts of the Company’s property, plant and equipment over the estimated discounted cash flows expected to be generated by the Company’s production facilities. The Company believes that there was impairment during the three and nine months ended September 30, 2024 and 2025.
| 8. | Construction in Progress |
Construction in progress as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Construction in progress | $ | $ | ||||||
| Prepayment for acquisition of property, plant and equipment | ||||||||
| Carrying amount | $ | $ | ||||||
Construction in progress as of December 31, 2024 and September 30, 2025 mainly comprised capital expenditures for the construction of the facilities and production lines of CBAK Power, Nanjing CBAK, Hitrans and Yuanchuang.
For the three months ended September 30, 2024
and 2025, the Company capitalized interest of $
For the nine months
ended September 30, 2024 and 2025, the Company capitalized interest of $
17
| 9. | Long-term investments, net |
Long-term investments as of December 31, 2024 and September 30, 2025, consisted of the following:
| December 31, 2024 | September 30, 2025 | |||||||
| Investments in equity method investees | $ | $ | ||||||
| Investments in non-marketable equity | ||||||||
| $ | $ | |||||||
The following is the carrying value of the long-term investments:
| December 31, 2024 | September 30,
2025 | |||||||||||||||
| Carrying Amount | Economic Interest | Carrying Amount | Economic Interest | |||||||||||||
| Investments in equity method investees | ||||||||||||||||
| Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (b) | $ | % | $ | % | ||||||||||||
| Investments in non-marketable equity | ||||||||||||||||
| Hunan DJY Technology Co., Ltd | $ | $ | ||||||||||||||
| (a) |
| Balance as of January 1, 2024 | ||||
| Proceeds from disposal of investment | ( | ) | ||
| Loss from investment | ( | ) | ||
| Profit from disposal | ||||
| Foreign exchange adjustment | ( | ) | ||
| Balance as of December 31, 2024 | $ |
In August 2022, Nanjing CBAK, along with two
unrelated third parties of the Company, Guangxi Guiwu Recycle Resources Company Limited (“Guangxi Guiwu”) and Mr. Weidong
Xu, an unrelated third party entered into an investment agreement to jointly set up a new company - Guangxi Guiwu CBAK New Energy Technology
Co., Ltd (“Guangxi Guiwu CBAK”) in which each party holding
On April 19, 2024, Nanjing CABK entered into an equity transfer agreement
with Chilwee Group Co., Ltd, an unrelated third party to the Company to dispose of its equity interest in Guangxi Guiwu at consideration
of RMB
For the three and nine months ended September 30, 2024, share of loss
from the above equity investment was $
18
| (b) |
| Balance as at January 1, 2024 | $ | |||
| Profit (loss) from investment | ||||
| Foreign exchange adjustment | ( | ) | ||
| Balance as of December 31, 2024 | $ | |||
| Profit from investment | ||||
| Foreign exchange adjustment | ||||
| Balance as of September 30, 2025 | $ |
In September 27, 2023, Hitrans, entered into
an Equity Transfer Contract (the “Equity Transfer Contract”) with Mr. Shengyang Xu, pursuant to which Hitrans will initially
acquire a
The Company recorded share of income of and
$
And within three months following the Initial
Acquisition, Mr. Xu, an related third party shall transfer an additional
Investments in non-marketable equity
| December 31, 2024 | September 30, 2025 | |||||||
| Cost | $ | $ | ||||||
| Impairment | ( | ) | ( | ) | ||||
| Carrying amount | $ | $ | ||||||
On April 21, 2021, CBAK Power, along with Shenzhen
BAK Power Battery Co., Ltd (BAK Shenzhen), Shenzhen Asian Plastics Technology Co., Ltd (SZ Asian Plastics) and Xiaoxia Liu (collectively
the “Investors”), entered into an investment agreement with Junxiu Li, Hunan Xintao New Energy Technology Partnership, Xingyu
Zhu, and Jiangsu Saideli Pharmaceutical Machinery Manufacturing Co., Ltd for an investment in Hunan DJY Technology Co., Ltd (“DJY”),
a privately held company. CBAK Power has paid $
19
On November 28, 2022, Nanjing CBAK along with
Shenzhen Education for Industry Investment Co., Ltd. and Wenyuan Liu, an individual investor, set up Nanjing CBAK Education For Industry
Technology Co., Ltd (“CBAK Education”) with a registered capital of RMB
Non-marketable equity securities are investments in privately held companies without readily determinable market value. The Company measures investments in non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. The Company adjusts the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of other operating income (expense), net. impairment was recorded on the non-marketable equity securities for the three and nine months ended September 30, 2024 and 2025.
| 10. | Lease |
| (a) |
| Prepaid land | ||||
| lease payments | ||||
| Balance as of January 1, 2024 | $ | |||
| Amortization charge for the year | ( | ) | ||
| Foreign exchange adjustment | ( | ) | ||
| Balance as of December 31, 2024 | $ | |||
| Addition for the period | ||||
| Amortization charge for the period | ( | ) | ||
| Foreign exchange adjustment | ||||
| Balance as of September 30, 2025 | $ | |||
In August 2014 and November 2021, the Company acquired land use rights to build a factory of the Company in Dalian and Zhejiang, PRC.
Yuanchuang acquired a land use rights on May 13, 2025 to build a factory in Anhui, PRC for cathode materials manufacturing.
Lump sum payments were made upfront to acquire
the leased land from the owners with lease periods of
Amortization expenses of the prepaid land use
rights were $
Amortization expenses of the prepaid land use
rights were $
No impairment loss was made to the carrying amounts of the prepaid land use right for the three and nine months ended September 30, 2024 and 2025.
20
| (b) | Operating lease |
On April 6, 2021, Nanjing CBAK entered into a
lease agreement for warehouse space in Nanjing with a
On June 1, 2021, Hitrans entered into a lease
agreement with liquid gas supplier for a
On December 9,
2021, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a
On March 1, 2022, Hitrans entered into a lease
agreement for extra staff quarters spaces in Zhejiang with a
On August 1, 2022, Hitrans entered into a lease
agreement for warehouse spaces in Zhejiang with a
On October 20, 2022, CBAK Power entered into
a lease agreement for staff quarters spaces in Dalian with a
On December 20, 2022, Hitrans entered into a
lease agreement for extra staff quarters spaces in Zhejiang with a
On December 30, 2022, Hitrans entered into a
lease agreement with liquid gas supplier for a
On April 20, 2023, Hitrans entered into another
lease agreement for extra staff quarters spaces in Zhejiang with a
Nanjing CBAK entered into a lease agreement for
office and factory spaces in Nanjing for a period of one year, commencing on August 1, 2023 and expiring on July 31, 2024. The monthly
rental payment is approximately RMB
CBAK Shangqiu entered into a lease agreement
for staff quarters spaces in Shangqiu with a six-year term commencing on
CBAK Shangqiu entered into a lease agreement
for manufacturing and factory spaces in Shangqiu with a terms of
21
On March 1, 2024, Hitrans entered into a lease
agreement with liquid gas supplier for forty-five months for supplying liquid nitrogen until December 11, 2027. The monthly rental payment
is approximately RMB
On April 26, 2024, Hitrans entered into a lease
agreement with liquid gas supplier for a five-year term for supplying liquid argon to April 25, 2029. The monthly rental payment is approximately
RMB
Nanjing CBAK entered into a lease agreement for
staff quarters spaces in Nanjing from March 1, 2024 to February 28, 2026. The monthly rental is RMB
CBAK Shangqiu entered
into a lease agreement for staff quarters spaces in Shangqiu from May 16, 2024 to December 31, 2029 for a monthly rental of RMB
CBAK Nanjing entered into another lease for staff
quarters spaces in Nanjing from June 1, 2024 to May 31, 2025. The monthly rental payment is RMB
BAK Asia entered into a lease for office in Hong
Kong from June 16, 2025 to June 30, 2028. The monthly rental payment is HKD
Operating lease expenses for the three and nine months ended September 30, 2024 and 2025 for the capitation agreement was as follows:
| Three months
ended September 30, | Nine months ended
September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Operating lease cost – straight line | $ | $ | $ | $ | ||||||||||||
| Negative contingent rent | ( | ) | ( | ) | ||||||||||||
| $ | $ | $ | $ | |||||||||||||
The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2025:
| Operating leases | ||||
| Remainder of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
22
Lease term and discount rate:
| December 31, 2024 | September 30, 2025 | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Land use rights | ||||||||
| Operating leases | ||||||||
| Weighted-average discount rate | ||||||||
| Land use rights | ||||||||
| Operating lease | % | % | ||||||
| Finance lease | % | |||||||
Supplemental cash flow information related to leases where the Company was the lessee for the three and nine months ended September 30, 2024 wand 2025 was as follows:
| Three months
ended September 30, | Nine months ended
September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Operating cash outflows from operating assets | $ | $ | $ | $ | ||||||||||||
| 11. | Intangible Assets, net |
Intangible assets as of December 31, 2024 and September 30, 2025 consisted of the followings:
| December 31, 2024 | September 30, 2025 | |||||||
| Computer software at cost | $ | $ | ||||||
| Sewage discharge permit | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Amortization expenses were $
Amortization expenses were $
Total future amortization expenses for finite-lived intangible assets were estimated as follows:
| Remainder of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ |
impairment loss was made to the carrying amounts of the intangible assets for the three and nine months ended September 30, 2024 and 2025.
23
| 12. | Acquisition of subsidiaries |
On July 20, 2021, CBAK Power entered into a framework
agreement relating to CBAK Power’s investment in Hitrans, pursuant to which CBAK Power acquires
Upon the closing
of the Acquisition, CBAK Power became the largest shareholder of Hitrans holding
The Company completed the valuations necessary
to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, resulting from which the amount of
goodwill was determined and recognized as of the respective acquisition date.
| Cash and bank | $ | |||
| Debts product | ||||
| Trade and bills receivable, net | ||||
| Inventories | ||||
| Prepayments and other receivables | ||||
| Income tax recoverable | ||||
| Amount due from trustee | ||||
| Property, plant and equipment, net | ||||
| Construction in progress | ||||
| Intangible assets, net | ||||
| Prepaid land use rights, noncurrent | ||||
| Leased assets, net | ||||
| Deferred tax assets | ||||
| Short term bank loan | ( | ) | ||
| Other short term loans – CBAK Power | ( | ) | ||
| Trade accounts and bills payable | ( | ) | ||
| Accrued expenses and other payables | ( | ) | ||
| Deferred government grants | ( | ) | ||
| Land appreciation tax | ( | ) | ||
| Deferred tax liabilities | ( | ) | ||
| Net assets | ||||
| Less: Waiver of dividend payable | ||||
| Total net assets acquired | ||||
| Non-controlling interest ( | ( | ) | ||
| Goodwill | ||||
| Total identifiable net assets |
The components of the consideration transferred to effect the Acquisition are as follows:
| RMB | USD | |||||||
| Cash consideration for | ||||||||
| Cash consideration for | ||||||||
| Total Purchase Consideration | ||||||||
The transaction resulted in a purchase price
allocation of $
24
| 13. | Deposit paid for acquisition of long-term investments |
Deposit paid for acquisition of long-term investments as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Investments in non-marketable equity | $ | $ | ||||||
On September 27, 2023, Nanjing CBAK entered into
an Equity Transfer Agreement (the “Equity Transfer Agreement”) with Shenzhen BAK Battery Co., Ltd. (“SZ BAK”),
under which SZ BAK shall sell a five percent (
SZ BAK and BAK SZ were the Company’s former subsidiary up to June 30, 2014. Mr, Xiangqian Li, the Company’s former CEO, is the director of SZ BAK and BAK SZ.
The Company will measure the investments in BAK SZ as non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis upon the completion. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.
| 14. | Trade and Bills Payable |
Trade and bills payable as of December 31, 2024 and September 30, 2025 consisted of the followings:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Trade payable | $ | $ | ||||||
| Bills payable | ||||||||
| – Bank acceptance bills | ||||||||
| – Letter of credit | ||||||||
| $ | $ | |||||||
All the bills payable are of trading nature and will mature within one year from the issue date.
The bank acceptance bills were secured by:
| (i) | the Company’s pledged deposits (Note 2) and term deposits (Note 3) ; |
| (ii) | $ |
| (iii) | The Company’s buildings (Note 7) and prepaid land use rights (Note 10). |
25
| 15. | Loans |
Bank loans:
Bank borrowings as of December 31, 2024 and September 30, 2025 consisted of the followings:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Short-term bank borrowings | $ | $ | ||||||
| Long-term bank borrowings | ||||||||
| $ | $ | |||||||
In
January 2023, Hitrans renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of
RMB
On January 17, 2022, Nanjing CBAK obtained a one-year term facility
from Agricultural Bank of China with a maximum amount of RMB
On February 9, 2022, NJ CBAK obtained a one-year
term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB
On April 28, 2022, Nanjing CBAK obtained a three-year
term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch, with a maximum amount of RMB
Nanjing CBAK entered into another one-year term facility with Jiangsu
Gaochun Rural Commercial Bank with a maximum amount of RMB
Hitrans entered into a loan agreement with China
CITIC Bank Shaoxing Branch for a short-term loan of RMB
On January 7, 2023, Nanjing CBAK obtained a two-year
term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum amount of RMB
26
On March 28, 2024, CBAK New Energy and Bank of
China Limited entered into a short-term loan agreement for one year from March 29, 2023 to March 28, 2024 for a maximum loan amount to
RMB
On April 19, 2023, Nanjing CBAK and Bank of Nanjing
Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023 to April 9, 2024 for RMB
On July 31, 2023, Nanjing CBAK obtained a three-year
term facility from Bank of China Gaochun Branch, with a maximum amount of RMB
On August 3, 2023, CBAK Energy and Bank of China entered into a short
term loan agreement for one year from August 3, 2023 to August 2, 2024 for a maximum amount of RMB
On January 24, 2024, Hitrans entered into a short-term
credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to January 17, 2025 with an amount of RMB
On March 26, 2024, Hitrans entered into a short-term
credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to March 25, 2025 with an amount of RMB
On April 9, 2024,
Hitrans and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from April 9, 2024 to April
7, 2025 for a maximum loan amount to RMB
On June 24, 2024, CBAK Nanjing and Bank of China
entered into a short-term loan agreement, with a maximum amount of RMB
On September 29, 2024, Hitrans and Zhejiang Shangyu
Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement for RMB
27
On
December 31, 2024, Hitrans and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB
On
January 17, 2025, Hitrans entered into a long-term Maximum Pledge Agreement with Zhejiang Shangyu Rural Commercial Bank, for the period
from January 17, 2025 to September 25, 2027, with a maximum facility amount of RMB
On January 20, 2025, Nanjing CBAK entered into
an unsecured revolving loan agreement with Bank of Ningbo Co., Ltd. Gaochun Branch with a maximum amount of RMB
On
February 19, 2025, Nanjing CBAK obtained a RMB
On
February 25, 2025, Hitrans entered into a short-term factoring loan agreement with China Construction Bank Co., Ltd for a maximum amount
of RMB
On June 28, 2025,
Nanjing CBAK entered into a short-term loan agreement with Agricultural Bank of China Co., Limited for RMB
On June 30, 2025, CBAK Power obtained a banking facility from China
Guangfa Bank Co., Ltd with a maximum amount of RMB
On
July 30, 2025, Hitrans entered into a short-term loan agreement with Industrial Bank Co., Ltd for RMB
On August 21, 2025, CBAK Power entered into a short-term loan agreement
with China Construction Bank for RMB
CBAK Power and Nanjing CBAK obtained banking facilities
from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB
28
Hitrans renewed the banking facilities from China
Zheshang Bank Co., Ltd. Shangyu Branch with a maximum amount of RMB
Nanjing CBAK borrowed a series of acceptance bills
from Bank of Nanjing totaling RMB
Nanjing CBAK borrowed a series of acceptance bills
from Bank of Ningbo totaling RMB
Hitrans borrowed a series of acceptance bills from Bank of Communications
Co., Ltd. Shangyu Branch totaling RMB
Hitrans borrowed a series of acceptance bills
from China CITIC Bank Co., Ltd totaling RMB
Hitrans borrowed a series of acceptance bills
from Zhejiang Shangyu Rural Commercial Bank Co., Ltd totaling RMB
CBAK Power borrowed a series of acceptance bills
from Industrial and Commercial Bank of China totaling RMB
Hitrans borrowed a series of acceptance bills
from Industrial Bank totaling RMB
Nanjing CBAK borrowed a series of acceptance bills
from Agricultural Bank of China totaling RMB
Nanjing CBAK obtained a letter of credit from
Bank of Ningbo of RMB
The facilities were also secured by the Company’s assets with the following carrying amounts:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Pledged deposits (note 2) | $ | $ | ||||||
| Short-term deposits (note 3) | ||||||||
| Bills receivables (note 4) | ||||||||
| Right-of-use assets (note 10) | ||||||||
| Buildings (note 7) | ||||||||
| Construction-in-progress (note 8) | ||||||||
| $ | $ | |||||||
29
As of September 30, 2025, the Company had $
During the three months ended September 30, 2024
and 2025, interest of $
During the nine months ended September 30, 2024
and 2025, interest of $
Other short-term loans:
Other short-term loans as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||||
| Note | 2024 | 2025 | ||||||||
| Advance from related parties | ||||||||||
| – Mr. Xiangqian Li, the Company’s Former CEO | (a) | $ | $ | |||||||
| – Mr. Yunfei Li, the Company’s Former CEO | (b) | |||||||||
| Advances from unrelated third party | ||||||||||
| – Mr. Wenwu Yu | (c) | |||||||||
| – Ms. Longqian Peng | (c) | |||||||||
| – Suzhou Zhengyuanwei Needle Ce Co., Ltd | (d) | |||||||||
| $ | $ | |||||||||
| (a) |
| (b) |
| (c) |
| (d) |
During the three months ended September 30, 2024
and 2025, interest of $
During the nine months ended September 30, 2024
and 2025, interest of $
30
| 16. | Accrued Expenses and Other Payables |
Accrued expenses and other payables as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Construction costs payable | $ | $ | ||||||
| Equipment purchase payable | ||||||||
| Liquidated damages* | ||||||||
| Accrued staff costs | ||||||||
| Customer deposits | ||||||||
| Deferred revenue | ||||||||
| Accrued expenses | ||||||||
| Interest payables | ||||||||
| Other tax payables | ||||||||
| Dividend payable to non-controlling interest to Hitrans | ||||||||
| Payables to suppliers for non-operating agency-based service | ||||||||
| Other payable | ||||||||
| $ | $ | |||||||
| * |
On November 9, 2007, the Company completed a
private placement for the gross proceeds to the Company of $
On December 21, 2007, pursuant to the registration
rights agreement, the Company filed a registration statement on Form S-3, which was declared effective by the SEC on May 7, 2008. As
a result, the Company estimated liquidated damages amounting to $
31
| 17. | Balances and Transactions with Related Parties |
The principal related parties with which the Company had transactions during the years/ periods presented are as follows:
| Name of Entity or Individual | Relationship with the Company | |
| New Era Group Zhejiang New Energy Materials Co., Ltd. | ||
| Zhengzhou BAK Battery Co., Ltd (“Zhengzhou BAK”) | ||
| Shenzhen BAK Battery Co., Ltd (“SZ BAK”) | ||
| Shenzhen BAK Power Battery Co., Ltd (“BAK SZ”) | ||
| Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (“Zhejiang Shengyang”) | ||
| Fuzhou BAK Battery Co., Ltd (“Fuzhou BAK”) | ||
| Zhengzhou BAK Electronics Co., Ltd | ||
| Zhengzhou BAK New Energy Vehicle Co., Ltd |
| (a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
Related party transactions
The Company entered into the following significant related party transactions:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Purchase of batteries from Zhengzhou BAK | $ | $ | $ | $ | ||||||||||||
| Purchase of batteries from Fuzhou BAK | ||||||||||||||||
| Purchase of materials from Zhejiang Shengyang | ||||||||||||||||
| Sub-contracting services provided by Fuzhou BAK | ||||||||||||||||
| Sales of cathode raw materials to Zhengzhou BAK | ||||||||||||||||
| Sales of cathode raw materials to BAK SZ | ||||||||||||||||
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd | ||||||||||||||||
| Sales of cathode raw materials to Zhengzhou BAK in relation to non-operating agency-based service | ||||||||||||||||
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd in relation to non-operating agency-based service | ||||||||||||||||
| Sales of cathode raw materials to BAK SZ in relation to non-operating agency-based service | ||||||||||||||||
| Sales of batteries to Fuzhou BAK | ||||||||||||||||
| Sales of batteries to Zhengzhou BAK New Energy Vehicle Co., Ltd. | ||||||||||||||||
32
Related party balances
Apart from the above, the Company recorded the following significant related party balances as of December 31, 2024 and September 30, 2025:
Receivables from former subsidiary
| December 31, 2024 | September 30, 2025 | |||||||
| Receivables from BAK SZ | $ | $ | ||||||
Balance as of December 31, 2024 and September 30, 2025 represented trade receivable for sales of cathode raw materials to BAK SZ.
Other balances due from/ (to) related parties
| December 31, 2024 | September 30, 2025 | |||||||
| Trade receivable, net – Zhengzhou BAK (i) | $ | $ | ||||||
| Trade receivable, net – Zhengzhou BAK Electronics Co., Ltd. (ii) | $ | $ | ||||||
| Trade receivable, net – Zhengzhou BAK New Energy Vehicle Co. Ltd | $ | $ | ||||||
| Bills receivable – Issued by Zhengzhou BAK (iii) | $ | $ | ||||||
| Prepayment to supplier – Zhengzhou BAK (iv) | $ | $ | ||||||
| Prepayment to supplier – Zhengzhou BAK New Energy Vehicle Co., Ltd (v) | $ | $ | ||||||
| Trade payable, net – Zhengzhou BAK (vi) | $ | $ | ||||||
| Trade payable, net – Zhejiang Shengyang (vii) | $ | $ | ||||||
| Trade payable, net –Fuzhou BAK (viii) | $ | $ | ||||||
| Payable for non-operating agency-based service – Zhejiang Shengyang (ix) | $ | $ | ||||||
| Deposit paid for acquisition of long-term investments – BAK SZ (note 13) | $ | $ | ||||||
| Dividend payable to non-controlling interest of Hitrans (note 16) | $ | $ | ||||||
| (i) |
| (ii) |
| (iii) |
| (iv) |
| (v) |
| (vi) |
| (vii) |
| (viii) |
| (ix) |
33
Payables to a former subsidiary
Payables to a former subsidiary as of December 31, 2024 and September 30, 2025 consisted of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Payables to Shenzhen BAK Power Battery Co., Ltd | $ | ( | ) | $ | ( | ) | ||
Balance as of December 31, 2024 and September 30, 2025 consisted of payables for purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.
| 18. | Deferred Government Grants |
Deferred government grants as of December 31, 2024 and September 30, 2025 consist of the following:
| December 31, | September 30, | |||||||
| 2024 | 2025 | |||||||
| Total government grants | $ | $ | ||||||
| Less: Current portion | ( | ) | ( | ) | ||||
| Non-current portion | $ | $ | ||||||
Government grants that are received in advance are deferred and recognized in the consolidated statements of operations over the period necessary to match them with the costs that they are intended to compensate. Government grants in relation to the achievement of stages of research and development projects are recognized in the consolidated statements of operations when amounts have been received and all attached conditions have been met. Non-refundable grants received without any further obligations or conditions attached are recognized immediately in the consolidated statements of operations.
On October 17, 2014, the Company received a subsidy
of RMB
On June 23, 2020, BAK Asia, the Company wholly-owned
Hong Kong subsidiary, entered into a framework investment agreement with Jiangsu Gaochun Economic Development Zone Development Group
Company (“Gaochun EDZ”), pursuant to which the Company intended to develop certain lithium battery projects that aim to have
a production capacity of 8Gwh. Gaochun EDZ agreed to provide various support to facilitate the development and operation of the projects.
As of the date of this report, the Company received RMB
For the year ended December 31, 2021, the Company
recognized RMB
On November 2, 2023, the Company received a subsidiary
of RMB
On December 12,
2024, Hitrans received RMB
34
Government grants were recognized in the consolidated statements of operations as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Cost of revenues | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Other income, net | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| 19. | Product Warranty Provisions |
The Company maintains a policy of providing after sales support for certain of its new EV and LEV battery products introduced since October 1, 2015 by way of a warranty program. The limited cover covers a period of six to twenty four months for battery cells, a period of twelve to twenty seven months for battery modules for light electric vehicles (LEV) such as electric bicycles, and a period of three years to eight years (or 120,000 or 200,000 km if reached sooner) for battery modules for electric vehicles (EV). The Company accrues an estimate of its exposure to warranty claims based on both current and historical product sales data and warranty costs incurred. The Company assesses the adequacy of its recorded warranty liability at least annually and adjusts the amounts as necessary.
Warranty expense is recorded as a component of sales and marketing expenses. Accrued warranty activity consisted of the following:
| December 31, 2024 | September 30, 2025 | |||||||
| Balance at beginning of year/ period | $ | $ | ||||||
| Warranty costs incurred | ( | ) | ( | ) | ||||
| Provision for the year/ period | ||||||||
| Foreign exchange adjustment | ( | ) | ||||||
| Balance at end of year/ period | ||||||||
| Less: Current portion | ( | ) | ( | ) | ||||
| Non-current portion | $ | $ | ||||||
| 20. | Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities |
| (a) | Income taxes in the consolidated statements of comprehensive loss (income) |
The Company’s provision for income taxes expenses consisted of:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| PRC income tax: | ||||||||||||||||
| Current income tax (credit) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Deferred income tax expenses (credit) | ||||||||||||||||
| $ | $ | ( | ) | $ | $ | ( | ) | |||||||||
35
United States Tax
CBAK is a Nevada corporation that is subject
to U.S. federal tax and state tax. On December 31, 2017 the U.S. government enacted comprehensive tax legislation commonly referred to
as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including,
but not limited to, (1) reducing the U.S. federal corporate income tax rate from
The Global Intangible Low-taxed Income (GILTI)
is a new provision introduced by the Tax Cuts and Jobs Act. U.S. shareholders, who are domestic corporations, of controlled foreign corporations
(CFCs) are eligible for up to an
provision for income taxes in the United States has been made as CBAK had no taxable income for the three and nine months ended September 30, 2024 and 2025.
Hong Kong Tax
The Company’s subsidiaries in Hong Kong
are subject to Hong Kong profits tax rate of
PRC Tax
The CIT Law in China applies an income tax rate
of
Malaysia Tax
CBAK Malaysia is subject to income tax laws of
Malaysia at the statutory rate of
A reconciliation of the provision for income taxes determined at the statutory income tax rate to the Company’s income taxes is as follows:
| Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| (Loss) income before income taxes | $ | ( |
) | $ | $ | $ | ( |
) | ||||||||
| United States federal corporate income tax rate | % | % | % | % | ||||||||||||
| Income tax expenses (credit) computed at United States statutory corporate income tax rate | ( |
) | ( |
) | ||||||||||||
| Reconciling items: | ||||||||||||||||
| Rate differential for PRC earnings | ( |
) | ( |
) | ||||||||||||
| Tax effect of entity at preferential tax rate | ( |
) | ( |
) | ( |
) | ||||||||||
| Non-taxable (income) expenses, net | ||||||||||||||||
| Share based payments | ||||||||||||||||
| (Under provision) over provision of income tax for prior year, net | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Utilization of tax losses | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Valuation allowance on deferred tax assets | ||||||||||||||||
| Income tax expenses (credit) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||
36
| (b) | Deferred tax assets and deferred tax liabilities |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2024 and September 30, 2025 are presented below:
| December 31, 2024 | September 30, 2025 | |||||||
| Deferred tax assets | ||||||||
| Trade receivable | $ | $ | ||||||
| Inventories | ||||||||
| Property, plant and equipment | ||||||||
| Non-marketable equity securities | ||||||||
| Equity method investment | ||||||||
| Intangible assets | ||||||||
| Accrued expenses, payroll and others | ||||||||
| Provision for product warranty | ||||||||
| Net operating loss carried forward | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, non-current | $ | $ | ||||||
| Deferred tax liabilities, non-current | ||||||||
| Long-lived assets arising from acquisitions | $ | $ | ||||||
As of September 30, 2025, the Company’s U.S. entity had net operating
loss carry forwards of $
The impact of an uncertain income tax positions
on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant
tax authority. An uncertain income tax position will not be recognized if it has less than a
| 21. | Statutory reserves |
As stipulated by
the relevant laws and regulations in the PRC, company established in the PRC (the “PRC subsidiary”) is required to maintain
a statutory reserve made out of profit for the year based on the PRC subsidiary’ statutory financial statements which are prepared
in accordance with the accounting principles generally accepted in the PRC. The amount and allocation basis are decided by the director
of the PRC subsidiary annually and is not to be less than
In addition, as a result of the relevant PRC
laws and regulations which impose restriction on distribution or transfer of assets out of the PRC statutory reserve, $
37
| 22. | Fair Value of Financial Instruments |
ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments. Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates currently available. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The fair value of share options was determined using the Binomial Model, with level 3 inputs (Note 24).
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, pledged deposits, trade accounts and bills receivable, other receivables, balances with former subsidiaries, notes payable, other short-term loans, short-term and long-term bank loans and other payables approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments approximate the market rate of interest.
| 23. | Employee Benefit Plan |
Full time employees of the Company in the PRC
participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing
fund and other welfare benefits are provided to the employees. The Company accrues for these benefits based on certain percentages of
the employees’ salaries, up to a maximum amount specified by the local government. The total employee benefits expensed as incurred
were $
| 24. | Share-based Compensation |
Restricted Shares and Restricted Share Units
Restricted shares granted on June 30, 2015
On June 12, 2015,
the Board of Director approved the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) for Employees,
Directors and Consultants of the Company and its Affiliates. The maximum aggregate number of Shares that may be issued under the Plan
is ten million (
On June 30, 2015, pursuant to the 2015 Plan,
the Compensation Committee of the Company’s Board of Directors granted an aggregate of
38
All the restricted shares granted in respect of the restricted shares granted on June 30, 2015 have been vested on March 31, 2018.
As of September 30, 2025, there was unrecognized
stock-based compensation associated with the above restricted shares. As of September 30, 2025,
Restricted shares granted on April 19, 2016
On April 19, 2016, pursuant to the Company’s
2015 Plan, the Compensation Committee of the Board of Directors of the Company granted an aggregate of
All the restricted shares granted in respect of the restricted shares granted on April 16, 2016 had been vested on June 30, 2019.
As of September 30, 2025, there was no unrecognized
stock-based compensation associated with the above restricted shares and
Employees Stock Ownership Program on November 29, 2021
On November 29, 2021, pursuant to the Company’s
2015 Plan, the Compensation Committee granted options to obtain an aggregate of
The fair value of the stock options granted to
directors of the Company is estimated on the date of the grant using the Binomial Model. The fair value of the options was calculated
using the following assumptions: estimated life of six months to five years, volatility of
The fair value
of the stock options granted to certain employees and officers of the Company is estimated on the date of the grant using the Binomial
Model. The fair value of the options was calculated using the following assumptions: estimated life of six months to five years, volatility
of
As of September 30, 2025, there was unrecognized
stock-based compensation $
Restricted share units granted and stock ownership program on April 11, 2023
On April 11, 2023, pursuant to the Company’s
2015 Plan, the Compensation Committee granted an aggregate of
The fair value of the stock options granted to
directors and certain employees and officers of the Company is estimated on the date of the grant using the Binomial Model. The fair
value of the options was calculated using the following assumptions: estimate life of
39
During the three months ended September 30, 2024
and 2025, the Company recorded $
During the nine months ended September 30, 2024
and 2025, the Company recorded $
All the restricted share units granted on April
11, 2023 had been vested on December 31, 2023. As of September 30, 2025, there was unrecognized stock-based compensation of $
Restricted share units granted and stock ownership program on August 22, 2023
On August 22, 2023, pursuant to the Company’s
2015 Plan, the Compensation Committee granted an aggregate of
The fair value of the stock options granted to
directors and certain employees and officers of the Company is estimated on the date of the grant using the Binomial Model. The fair
value of the options was calculated using the following assumptions: estimate life of
The Company recorded non-cash share-based compensation
expense of $
The Company recorded non-cash share-based compensation
expense of $
As of September 30, 2025, there was
unrecognized stock-based compensation of $
Stock option activity under the Company’s stock-based compensation plans is shown below:
| Number of Shares | Average Exercise Price per Share | Aggregate Intrinsic Value* | Weighted Average Remaining Contractual Term in Years | |||||||||||||
| Outstanding at January 1, 2025 | $ | | $ | | ||||||||||||
| Exercisable at January 1, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Outstanding at September 30, 2025 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||||||
| * |
40
As the Company itself is an investment holding company which is not expected to generate operating profits to realize the tax benefits arising from its net operating loss carried forward, no income tax benefits were recognized for such stock-based compensation cost under the stock option plan for the three and nine months ended September 30, 2024 and 2025.
| 25. | Income (Loss) Per Share |
Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).
The following is the calculation of income (loss) per share:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Net income (loss) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Less: Net loss attributable to non-controlling interests | ||||||||||||||||
| Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. | $ | $ | $ | $ | ( | ) | ||||||||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Dilutive unvested restricted stock and share option | ||||||||||||||||
| Weighted average shares outstanding - diluted | ||||||||||||||||
| Income per share | ||||||||||||||||
| - Basic | $ | $ | $ | $ | ( | ) | ||||||||||
| - Diluted | $ | $ | $ | $ | ( | ) | ||||||||||
For the three and nine months ended September 30, 2024, all the outstanding warrants were anti-dilutive and excluded from shares used in the diluted computation.
41
| 26. | Commitments and Contingencies |
| (i) | Capital Commitments |
As of December 31, 2024 and September 30, 2025, the Company had the following contracted capital commitments:
| December 31, 2024 | September 30, 2025 | |||||||
| For construction of buildings | $ | $ | ||||||
| For purchases of equipment | ||||||||
| Capital injection | ||||||||
| $ | $ | |||||||
| (ii) | Litigation |
During its normal course of business, the Company may become involved in various lawsuits and legal proceedings. However, litigation is subject to inherent uncertainties, and an adverse result may arise from time to time will affect its operation. Other than the legal proceedings set forth below, the Company is currently not aware of any such legal proceedings or claims that the Company believe will have an adverse effect on the Company’s operation, financial condition or operating results.
In December 2020, CBAK Power received notice
from Court of Dalian Economic and Technology Development Zone that Haoneng filed another lawsuit against CBAK Power for failure to pay
pursuant to the terms of the purchase contract. Haoneng sought a total amount of $
| 27. | Concentrations and Credit Risk |
| (a) | Concentrations |
The Company had the following customers that individually comprised 10% or more of net revenue for the three months ended September 30, 2024 and 2025 as follows:
| Three months ended September 30, | ||||||||||||||||
| Sales of finished goods and raw materials | 2024 | 2025 | ||||||||||||||
| Customer A | $ | % | $ | |||||||||||||
| Customer B | % | * | * | |||||||||||||
| Customer C | * | % | ||||||||||||||
| Zhengzhou BAK Battery Co., Ltd | % | * | * | |||||||||||||
42
The Company had the following customers that individually comprised 10% or more of net revenue for the nine months ended September 30, 2024 and 2025 as follows:
| Nine months ended September 30, | ||||||||||||||||
| Sales of finished goods and raw materials | 2024 | 2025 | ||||||||||||||
| Customer A | $ | % | $ | % | ||||||||||||
| Customer B | % | * | * | |||||||||||||
| * |
The Company had the following customers that individually comprised 10% or more of net trade receivable (included VAT) as of December 31, 2024 and September 30, 2025 as follows:
| December 31, 2024 | September 30, 2025 | |||||||||||||||
| Customer A | $ | % | $ | % | ||||||||||||
| Zhengzhou BAK (note 17) | % | % | ||||||||||||||
| * |
The Company had the following suppliers that individually comprised 10% or more of net purchase for the three months ended September 30, 2024 and 2025 as follows:
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| Supplier A | $ | $ | % | |||||||||||||
| Supplier B | % | |||||||||||||||
| Supplier C | % | |||||||||||||||
| Supplier D | % | |||||||||||||||
The Company had the following suppliers that individually comprised 10% or more of net purchase for the nine months ended September 30, 2024 and 2025 as follows:
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| Supplier A | $ | $ | % | |||||||||||||
| Supplier B | * | * | % | |||||||||||||
| %* |
The Company had the following suppliers that individually comprised 10% or more of trade payable as of December 31, 2024 and September 30, 2025 as follows:
| December 31, 2024 | September 30, 2025 | |||||||||||||||
| Supplier A | $ | $ | % | |||||||||||||
| Supplier B | % | |||||||||||||||
| Supplier D | % | |||||||||||||||
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| (b) | Credit Risk |
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents and pledged deposits. As of December 31, 2024 and September 30, 2025 substantially all of the Company’s cash and cash equivalents were held by major financial institutions and online payment platforms located in the PRC, which management believes are of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date. The Company does not require collateral or other securities to support financial instruments that are subject to credit risk.
For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its customers and, if necessary, maintains reserves for potential credit losses.
| 28. | Segment Information |
The Company determined
that for the three and nine months ended September 30 2024 and 2025, it operated in
The Company primarily operates in the PRC and substantially all of the Company’s long-lived assets are located in the PRC.
The Company’s chief operating decision maker evaluates performance
based on each reporting segment’s net revenue, cost of revenues, operating expenses, operating income (loss), finance income (expense),
other income (expenses) and net income (loss).
| For the three months ended September 30, 2024 | CBAT | Hitrans | Corporate unallocated (note) | Consolidated | ||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Finance income (expense), net | ( | ) | ( | ) | ||||||||||||
| Other (expenses) income, net | ||||||||||||||||
| Income tax expenses | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
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| For the three months ended September 30, 2025 | CBAT | Hitrans | Corporate unallocated (note) | Consolidated | ||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit (loss) | ||||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expenses) income, net | ||||||||||||||||
| Income tax credit | ||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||
| For the nine months ended September 30, 2024 | CBAT | Hitrans | Corporate unallocated (note) | Consolidated | ||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Finance income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Other income, net | ||||||||||||||||
| Income tax expenses | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||
| For the nine months ended September 30, 2025 | CBAT | Hitrans | Corporate unallocated (note) | Consolidated | ||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross profit | ||||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income, net | ||||||||||||||||
| Income tax credit | ||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| As of September 30, 2025 | ||||||||||||||||
| Identifiable long-lived assets | ||||||||||||||||
| Total assets | ||||||||||||||||
Note: The Company does not allocate its assets located and expenses incurred outside China to its reportable segments because these assets and activities are managed at a corporate level.
45
Net revenues by product:
The Company’s products can be categorized
into high power lithium batteries and materials used in manufacturing of lithium batteries. For the product sales of high power lithium
batteries, the Company manufactured high-power cylindrical lithium battery cell and battery packs. The Company’s battery products
are sold to end users in electric vehicles, light electric vehicles and energy storage sectors. For the product sales of materials used
in manufacturing of lithium batteries, the Company, via its subsidiary, Hitrans, manufactured cathode materials and Precursor for use
in manufacturing of cathode.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| High power lithium batteries used in: | ||||||||||||||||
| Electric vehicles | $ | $ | $ | $ | ||||||||||||
| Light electric vehicles | ||||||||||||||||
| Residential energy supply & uninterruptable supplies | ||||||||||||||||
| Materials used in manufacturing of lithium batteries | ||||||||||||||||
| Cathode | ||||||||||||||||
| Precursor | ||||||||||||||||
| Total consolidated revenue | $ | $ | $ | $ | ||||||||||||
Net revenues by geographic area:
The Company’s operations are located in the PRC. The following table provides an analysis of the Company’s sales by geographical markets based on locations of customers:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Mainland China | $ | $ | $ | $ | ||||||||||||
| Europe | ||||||||||||||||
| India | ||||||||||||||||
| Africa | ||||||||||||||||
| Others | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Substantially all of the Company’s long-lived assets are located in the PRC.
| 29. | Subsequent events |
The Company has evaluated subsequent events from September 30, 2025 to the date the financial statements were issued and has determined that there are no items to disclose.
46
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.
Special Note Regarding Forward Looking Statements
Statements contained in this report include “forward-looking statements” within the meaning of such term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A, “Risk Factors” described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.
Use of Terms
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:
| ● | “BAK Asia” are to our Hong Kong subsidiary, China BAK Asia Holdings Limited; |
| ● | “CBAK Power” are to our PRC subsidiary, Dalian CBAK Power Battery Co., Ltd.; |
| ● | “CBAK Shangqiu” are to our PRC subsidiary, CBAK New Energy (Shangqiu) Co., Ltd.; |
| ● | “Company”, “we”, “us” and “our” are to the combined business of CBAK Energy Technology, Inc., a Nevada corporation, and its consolidated subsidiaries; |
| ● | “Exchange Act” are to the Securities Exchange Act of 1934, as amended. |
| ● | “Hitrans” are to our 67.33% owned PRC subsidiary, Zhejiang Hitrans Lithium Battery Technology (we hold 67.33% of registered equity interests of Hitrans, representing 72.99% of paid-up capital). |
| ● | “Nanjing BFD” are to our PRC subsidiary, Nanjing BFD New Energy Technology Co., Ltd., a company that was previously named Nanjing Daxin New Energy Automobile Industry Co., Ltd. until February 24, 2023; |
| ● | “Nanjing CBAK” are to our PRC subsidiary, Nanjing CBAK New Energy Technology Co., Ltd.; |
| ● | “NCM” are to nickel cobalt manganese. |
| ● | “RMB” are to Renminbi, the legal currency of China; |
47
| ● | “SEC” are to the United States Securities and Exchange Commission; and |
| ● | “U.S. dollar”, “$” and “US$” are to the legal currency of the United States; |
Overview
We are a manufacturer of new energy high power lithium and sodium batteries that are mainly used in light electric vehicles, electric vehicles, energy storage such as residential energy supply & uninterruptible power supply (UPS) application, and other high-power applications. Our primary product offerings consist of new energy high power lithium and sodium batteries. In addition, after completing the acquisition of 81.56% of registered equity interests (such ownership percentage thereafter reduced to 67.33% of registered equity interests (representing 72.99% of paid-up capital as of September 30, 2025)) of Hitrans in November 2021, we entered the business of developing and manufacturing NCM precursor and cathode materials. Hitrans is a leading developer and manufacturer of ternary precursor and cathode materials in China, whose products are widely used in batteries for electric vehicles, electric tools, high-end digital products and storage, among others.
As of September 30, 2025, we report financial and operational information in two segments: (i) production of high-power lithium and sodium battery cells, and (ii) manufacture and sale of materials used in high-power lithium battery cells.
We currently conduct our business primarily through (i) CBAK Power; (ii) Nanjing CBAK; (iii) CBAK Shangqiu; (iv) Nanjing BFD; and (v) Hitrans.
Financial Performance Highlights for the Quarter Ended September 30, 2025
The following are some financial highlights for the quarter ended September 30, 2025:
| ● | Net revenues: Net revenues increased by $16.3 million, or 37%, to $60.9 million for the three months ended September 30, 2025, from $44.6 million for the same period in 2024. |
| ● | Gross profit: Gross profit was $4.9 million, representing a decrease of $2.1 million, for the three months ended September 30, 2025 from gross profit of $7.0 million for the same period in 2024. |
| ● | Operating loss: Operating loss was $4.0 million for the three months ended September 30, 2025, reflecting an increase in loss of $3.2 million from of $0.8 million for the same period in 2024. |
| ● | Net income: Net income was $2.7 million for the three months ended September 30, 2025, compared to $0.02 million for the same period in 2024. |
| ● | Fully diluted income (loss) per share: Fully diluted income per share was $0.03 for the three months ended September 30, 2025, as compared to fully diluted loss per share of $0.0 for the same period in 2024. |
Financial Statement Presentation
Net revenues. The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
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Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred it the expected amortization period of the asset that it would have recognized is on year or less or the amount is immaterial.
Revenue from product sales is recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers.
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the categories: discounts and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer.
Cost of revenues. Cost of revenues consists primarily of material costs, employee remuneration for staff engaged in production activity, share-based compensation, depreciation and related expenses that are directly attributable to the production of products. Cost of revenues also includes write-downs of inventory to lower of cost and net realizable value.
Research and development expenses. Research and development expenses primarily consist of remuneration for R&D staff, share-based compensation, depreciation and maintenance expenses relating to R&D equipment, and R&D material costs.
Sales and marketing expenses. Sales and marketing expenses consist primarily of remuneration for staff involved in selling and marketing efforts, including staff engaged in the packaging of goods for shipment, warranty expenses, advertising cost, depreciation, share-based compensation and travel and entertainment expenses. We do not pay slotting fees to retail companies for displaying our products, engage in cooperative advertising programs, participate in buy-down programs or similar arrangements.
General and administrative expenses. General and administrative expenses consist primarily of employee remuneration, share-based compensation, professional fees, insurance, benefits, general office expenses, depreciation, liquidated damage charges and bad debt expenses.
Finance costs, net. Finance costs consist primarily of interest income and interest on bank loans, net of capitalized interest.
Income tax expenses. Our subsidiaries in PRC are subject to an income tax rate of 25%, except that Hitrans and CBAK Power were each recognized as a “High and New Technology Enterprise” and enjoy a preferential tax rate of 15% from 2024 to 2026. CBAK Nanjing obtained “High and New Technology Enterprise” certificate in late 2023 and has enjoy a preferential tax rate of 15% for three years starting from 2023. Our Hong Kong subsidiaries are subject to profits tax at a rate of 16.5%. However, because we did not have any assessable income derived from or arising in Hong Kong, the entities had not paid any such tax.
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Results of Operations
Comparison of Three Months Ended September 30, 2024 and 2025
The following tables set forth key components of our results of operations for the periods indicated.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Three Months Ended September 30, | Change | |||||||||||||||
| 2024 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 44,628 | $ | 60,924 | 16,296 | 37 | % | |||||||||
| Cost of revenues | (37,674 | ) | (56,048 | ) | (18,374 | ) | 49 | % | ||||||||
| Gross profit | 6,954 | 4,876 | (2,078 | ) | -30 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | (3,434 | ) | (3,861 | ) | (427 | ) | 12 | % | ||||||||
| Sales and marketing expenses | (1,023 | ) | (1,333 | ) | (310 | ) | 30 | % | ||||||||
| General and administrative expenses | (2,779 | ) | (3,873 | ) | (1,094 | ) | 39 | % | ||||||||
| Allowance for expected credit losses, net | (546 | ) | 157 | 703 | -129 | % | ||||||||||
| Total operating expenses | (7,782 | ) | (8,910 | ) | (1,128 | ) | 14 | % | ||||||||
| Operating loss | (828 | ) | (4,034 | ) | (3,206 | ) | 387 | % | ||||||||
| Finance expenses, net | (40 | ) | (220 | ) | (180 | ) | 450 | % | ||||||||
| Other income, net | 522 | 6,152 | 5,630 | 1,079 | % | |||||||||||
| Share of loss of equity investee | - | - | - | n/a | ||||||||||||
| Gain on disposal of equity investee | - | - | - | n/a | ||||||||||||
| (Loss) income before income tax | (346 | ) | 1,898 | 2,244 | -649 | % | ||||||||||
| Income tax (expense) credit | (340 | ) | 184 | 524 | -154 | % | ||||||||||
| Net (loss) income | (686 | ) | 2,082 | 2,768 | -403 | % | ||||||||||
| Less: Net loss attributable to non-controlling interests | 703 | 568 | (135 | ) | -19 | % | ||||||||||
| Net income attributable to shareholders of CBAK Energy Technology, Inc. | $ | 17 | $ | 2,650 | 2,633 | 15,488 | % | |||||||||
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Net revenues. Net revenues increased by $16.3 million, or 37%, to $60.9 million for the three months ended September 30, 2025, from $44.6 million for the same period in 2024.
The following table sets forth the breakdown of our net revenues by end-product applications.
(All amounts in thousands of U.S. dollars other than percentages)
| Three months ended September 30, | Change | |||||||||||||||
| 2024 | 2025 | $ | % | |||||||||||||
| High power lithium batteries used in: | ||||||||||||||||
| Electric vehicles | $ | 334 | $ | 57 | (277 | ) | -83 | % | ||||||||
| Light electric vehicles | 4,913 | 18,173 | 13,260 | 270 | % | |||||||||||
| Residential energy supply & uninterruptable supplies | 28,215 | 15,479 | (12,736 | ) | -45 | % | ||||||||||
| 33,462 | 33,709 | 247 | 1 | % | ||||||||||||
| Materials used in manufacturing of lithium batteries | ||||||||||||||||
| Cathode | 9,342 | 26,055 | 16,713 | 179 | % | |||||||||||
| Precursor | 1,824 | 1,160 | (664 | ) | -36 | % | ||||||||||
| 11,166 | 27,215 | 16,049 | 144 | % | ||||||||||||
| Total | $ | 44,628 | $ | 60,924 | 16,296 | 37 | % | |||||||||
Net revenues from sales of batteries for electric vehicles were approximately $0.3 million and $0.06 million for the three months ended September 30, 2024 and 2025, respectively.
Net revenues from sales of batteries for light electric vehicles were $18.2 million for the three months ended September 30, 2025, as compared to $4.9 million in the same period of 2024, marking an increase of $13.3 million, or 270%. We strive to continue to penetrate the market for batteries used in light electric vehicles, especially the international markets such as India and Vietnam. We believe that our sales campaign in the international markets has contributed to a rebound in our sales volume in this sector.
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Net revenues from sales of batteries for residential energy supply & uninterruptable power supplies were $15.5 million in the three months ended September 30, 2025, as compared with $28.2 million in the same period in 2024, representing a decrease of $12.7 million, or 45%. The substantial decline primarily stems from production changes at our Dalian facilities, where a major portion of its customers are in the residential energy supply sector. These facilities are currently undergoing a product portfolio upgrade, transitioning from Model 26650, a battery model used for about two decades, to Model 40135, a much larger and modern model that the current market prefers, for our customers.
Net revenues from sales of materials used in manufacturing of lithium batteries were $27.2 million for the three months ended September 30, 2025, as compared to $11.2 million for the same period of 2024, representing an increase of $16.0 million, or 144%. The Company’s raw materials division, Hitrans, has been making significant efforts to expand its market presence. In the third quarter and the first half of 2025, Hitrans successfully secured several new customers, which contributed to the growth in net revenues from raw materials sales. Additionally, a slight decline in raw material prices for Hitrans’s products during the first half of 2025 further stimulated customer demand and encouraged order placements.
Cost of revenues. Cost of revenues increased to $56.1 million for the three months ended September 30, 2025, as compared to $37.7 million for the same period in 2024, an increase of $18.4 million, or 49%. The cost of revenues includes write down of obsolete inventories of $1.2 million for the three months ended September 30, 2025, as compared to write down of obsolete inventories of $1.4 million for the same period in 2024. We write down the inventory value whenever there is an indication that it is impaired.
Gross profit. Gross profit for the three months ended September 30, 2025 was $4.9 million, or 8.0% of net revenues as compared to gross profit of $7.0 million, or 15.6% of net revenues, for the same period in 2024. The significant decline in gross profits aligns with the substantial drop in sales of batteries for residential energy supply and uninterruptible power supplies, which have a higher gross profit margin compared to other products. We expect gross profit margins to gradually recover upon the upgrade from Model 26650 to Model 40135.
Research and development expenses. Research and development expenses were $3.9 million for the three months ended September 30, 2025, increased by $0.5 million as compared to $3.4 million for the three months ended September 30, 2024. The increase primarily resulted from the increase of materials and consumables used for the development of series 40 batteries. The materials and consumables used were $0.9 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively.
Sales and marketing expenses. Sales and marketing expenses increased to $1.3 million for the three months ended September 30, 2025, as compared to approximately $1.0 million for the same period in 2024, an increase of approximately $0.3 million, or 30%. The increase was mainly resulted from the delivery and declaration expenses incurred for the sales to India and Africa. The delivery and declaration expenses for these countries were higher compared to others.
General and administrative expenses. General and administrative expenses increased to $3.9 million, or 6.4% of revenues, for the three months ended September 30, 2025, increased by $1.1 million as compared to $2.8 million, or 6.2% of revenues, for the same period in 2024. The increase primarily resulted from salaries and social insurance expenses due to a growing number of employees at Nanjing CBAK and CBAK Power on the new production lines. We incurred $1.8 million in salaries and social insurance cost (including share-based compensation) during the three months ended September 30, 2025 compared to $1.4 million during the three months ended September 30, 2024. With the expansion of our business, operating expenses, including lease expenses, travelling, utilities and other tax increased by $0.3 million for the three months ended September 30, 2025 compared to the same period in 2024.
Allowance for expected credit losses, net. We have a reversal on allowance of credit loss of $0.2 million for the three months ended September 30, 2025 compared to an allowance of $0.5 million for the three months ended September 30, 2024. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions.
Operating loss. As a result of the above, our operating loss was $4.0 million for the three months ended September 30, 2025, as compared to $0.8 million for the same period in 2024, representing a $3.2 million increase in loss or 387%.
Finance income (expenses), net. Finance expenses, net was $219,768 for the three months ended September 30, 2025, as compared to $40,350 for the same period in 2024. The finance expenses increase mainly resulted from the decrease in the interest capitalization for the three months ended September 30, 2025. We capitalized interest on bank borrowings of $7,252 and $169,159 to the cost of construction in progress for the three months ended September 30, 2025 and 2024, respectively.
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Other income (expenses), net. Other income was $6.2 million for the three months ended September 30, 2025, compared to $0.5 million for the same period in 2024. For the three months ended September 30, 2025, we received a $5.0 million compensation from a cancelled order from our customer.
Income tax credit (expenses). Income tax credit was $0.2 million compared to an income tax expense of $0.3 million for the three months ended September 30, 2025 and 2024, respectively. The income tax credit was from our batteries segment on the finalization of the income tax for the fiscal 2024 whereas tax expense for the three months ended September 30, 2024 were incurred by our batteries segment.
Net income (loss). As a result of the foregoing, we had a net income of $2.7 million for the three months ended September 30, 2025, compared to a net income of $17,647 for the same period in 2024.
Comparison of Nine Months Ended September 30, 2024 and 2025
The following tables set forth key components of our results of operations for the periods indicated.
(All amounts, other than percentages, in thousands of U.S. dollars)
| Nine Months Ended September 30, | Change | |||||||||||||||
| 2024 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 151,244 | $ | 136,387 | (14,857 | ) | -10 | % | ||||||||
| Cost of revenues | (112,780 | ) | (122,247 | ) | (9,467 | ) | 8 | % | ||||||||
| Gross profit | 38,464 | 14,140 | (24,324 | ) | -63 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | (9,205 | ) | (10,499 | ) | (1,294 | ) | 14 | % | ||||||||
| Sales and marketing expenses | (4,115 | ) | (3,180 | ) | 935 | -23 | % | |||||||||
| General and administrative expenses | (10,002 | ) | (11,028 | ) | (1,026 | ) | 10 | % | ||||||||
| Allowance for expected credit losses, net | 241 | 140 | (101 | ) | -42 | % | ||||||||||
| Total operating expenses | (23,081 | ) | (24,567 | ) | (1,486 | ) | 6 | % | ||||||||
| Operating income (loss) | 15,383 | (10,427 | ) | (25,810 | ) | -168 | % | |||||||||
| Finance income (expenses), net | 658 | (338 | ) | (996 | ) | -151 | % | |||||||||
| Other income, net | 1,031 | 7,218 | 6,187 | 600 | % | |||||||||||
| Share of (loss) income of equity investee | (19 | ) | 34 | 53 | -279 | % | ||||||||||
| Gain on disposal of equity investee | 46 | - | (46 | ) | -100 | % | ||||||||||
| Income (loss) before income tax | 17,099 | (3,513 | ) | (20,612 | ) | -121 | % | |||||||||
| Income tax (expense) credit | (2,189 | ) | 184 | 2,373 | -108 | % | ||||||||||
| Net income (loss) | 14,910 | (3,329 | ) | (18,239 | ) | -122 | % | |||||||||
| Less: Net loss attributable to non-controlling interests | 1,389 | 1,327 | (62 | ) | -4 | % | ||||||||||
| Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. | $ | 16,299 | $ | (2,002 | ) | (18,301 | ) | -112 | % | |||||||
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Net revenues. Net revenues decreased by $14.9 million, or 10%, to $136.4 million for the nine months ended September 30, 2025, from $151.2 million for the same period in 2024.
The following table sets forth the breakdown of our net revenues by end-product applications.
(All amounts in thousands of U.S. dollars other than percentages)
| Nine months ended September 30, | Change | |||||||||||||||
| 2024 | 2025 | $ | % | |||||||||||||
| High power lithium batteries used in: | ||||||||||||||||
| Electric vehicles | $ | 1,013 | 737 | (276 | ) | -27 | % | |||||||||
| Light electric vehicles | 8,249 | 23,444 | 15,195 | 184 | % | |||||||||||
| Residential energy supply & uninterruptable supplies | 104,636 | 50,981 | (53,655 | ) | -51 | % | ||||||||||
| 113,898 | 75,162 | (38,736 | ) | -34 | % | |||||||||||
| Materials used in manufacturing of lithium batteries | ||||||||||||||||
| Cathode | 26,777 | 54,609 | 27,832 | 104 | % | |||||||||||
| Precursor | 10,569 | 6,616 | (3,953 | ) | -37 | % | ||||||||||
| 37,346 | 61,225 | 23,879 | 64 | % | ||||||||||||
| Total | $ | 151,244 | 136,387 | (14,857 | ) | -10 | % | |||||||||
Net revenues from sales of batteries for electric vehicles were approximately $1.0 million and $0.7 million for the nine months ended Septembers 30, 2024 and 2025, respectively.
Net revenues from sales of batteries for light electric vehicles were $23.4 million for the nine months ended September 30, 2025, as compared to $8.2 million in the same period of 2024, marking an increase of $15.2 million, or 184%. We strive to continue to penetrate the market for batteries used in light electric vehicles, especially the international markets such as India and Vietnam. We believe that our sales campaign in the international market has contributed to a rebound in our sales volume in this sector.
Net revenues from sales of batteries for residential energy supply & uninterruptable power supplies were $51.0 million in the nine months ended September 30, 2025, as compared with $104.6 million in the same period in 2024, representing a decrease of $53.7 million, or 51%. The substantial decline primarily stems from production changes at our Dalian facilities, where a major portion of its customers are in the residential energy supply sector. These facilities are currently undergoing a product portfolio upgrade, transitioning from Model 26650, a battery model used for about two decades, to Model 40135, a much larger and modern model that the current market prefers, for our customers.
Net revenues from sales of materials used in manufacturing of lithium batteries were $61.2 million for the nine months ended September 30, 2025, as compared to $37.3 million for the same period of 2024, an increase of $23.9 million or 64%. The Company’s raw materials division, Hitrans, has been making significant efforts to expand its market presence. During the nine months ended September 30, 2025, Hitrans successfully secured several new customers, which contributed to the growth in net revenues from raw materials sales. Additionally, a slight decline in raw material prices for Hitrans’s products during the first half of 2025 further stimulated customer demand and encouraged order placements.
Cost of revenues. Cost of revenues increased to $122.2 million for the nine months ended September 30, 2025, as compared to $112.8 million for the same period in 2024, an increase of $9.5 million, or 8%. The cost of revenues includes write off of obsolete inventories of $3.7 million for nine months ended September 30, 2025, as compared to $3.4 million for the same period in 2024. We write down the inventory value whenever there is an indication that it is impaired.
Gross profit. Gross profit for the nine months ended September 30, 2025 was $14.1 million, or 10.4% of net revenues as compared to gross profit of $38.5 million, or 25.4% of net revenues, for the same period in 2024. The gross profit decreased as our Dalian facilities received fewer orders for Model 26650, resulting in lower production line utilization and higher unit costs.
Research and development expenses. Research and development expenses increased to $10.5 million for the nine months ended September 30, 2025, as compared to approximately $9.2 million for the same period in 2024, an increase of $1.3 million, or 14%. The increase primarily resulted from an increase of $0.5 million in salaries and social insurance expenses due to a growing number of employees at Nanjing CBAK and CBAK Power’s development of series 40 batteries as well as a $0.7 million increase in materials and consumables used by batteries segment and Hitrans.
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Sales and marketing expenses. Sales and marketing expenses decreased to approximately $3.2 million for the nine months ended September 30, 2025, as compared to approximately $4.1 million for the same period in 2024, a decrease of approximately $0.9 million, or 23%. The marketing expenses decreased corresponding to the decrease of revenue and remains at 3% for each of the nine months ended September 30, 2024 and 2025, as a percentage of revenues.
General and administrative expenses. General and administrative expenses increased to $11.0 million, or 8.1% of revenues, for the nine months ended September 30, 2025, as compared to $10.0 million, or 6.6% of revenues, for the same period in 2024, representing an increase of $1.0 million, or 10% increase. The increase primarily resulted from salaries and social insurance expenses due to a growing number of employees at Nanjing CBAK and CBAK Power on the new production lines. We incurred $4.7 million in salaries and social insurance cost (including share-based compensation) during the nine months ended September 30, 2025 compared to $4.9 million during the nine months ended September 30, 2024. With the expansion of our business, operating expenses, including lease expenses, travelling, utilities and other tax increased by $0.2 million for the nine months ended September 30, 2025 compared to the same period in 2024.
Allowance for expected credit losses, net. We had $0.1 million on allowance for expected credit losses for the nine months ended September 30, 2025 compared to $0.2 million for the nine months ended September 30, 2024. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions.
Operating income (loss). As a result of the above, our operating loss was $10.4 million for the nine months ended September 30, 2025 compared to an operating income of $15.4 million for the nine months ended September 30, 2024, representing a decrease in income of $25.8 million, or 168%.
Finance income (expenses), net. Finance expenses, net was $0.3 million for the nine months ended September 30, 2025, as compared to a finance income, net $0.7 million for the same period in 2024, representing a decrease in income of $1.0 million. The finance expenses increase mainly resulted from decrease of our interest income from our term-deposits. We capitalized interest on bank borrowings of $189,129 and $640,938 to the cost of construction in progress for the nine months ended September 30, 2025 and 2024, respectively.
Other income (expenses), net. Other income was $7.2 million and $1.0 million for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025, we received a $5.0 million compensation from a cancelled order from a customer and $0.6 million from trading of materials and received $1.1 million government assistance. For the nine months ended September 30, 2024, we received government assistance of $0.5 million and $0.2 million income from trading of materials.
Income tax credit (expense). Income tax credit was $0.2 million for the nine months ended September 30, 2025 compared to an income tax expense of $2.2 million for the nine months ended September 30, 2024. The income tax credit and expenses were incurred by our batteries segment.
Net income (loss). As a result of the foregoing, we had a net loss of $2.0 million for the nine months ended September 30, 2025 compared to a net income of $16.3 million for the same period in 2024.
Liquidity and Capital Resources
We have financed our liquidity requirements from a variety of sources, including short-term bank loans, other short-term loans and bills payable under bank credit agreements, advances from our related and unrelated parties, investors and issuance of capital stock and other equity-linked securities.
We incurred a net loss of $2.0 million for the nine months ended September 30, 2025. As of September 30, 2025, we had cash and cash equivalents of $63.3 million. Our total current assets were $157.7 million and our total current liabilities were $228.0 million as of September 30, 2025, resulting in a net working capital deficit of $70.3 million.
As of September 30, 2025, we had an accumulated deficit of $126.4 million. We had an accumulated deficit from recurring net losses, a working capital deficiency and significant short-term debt obligations maturing in less than one year as of September 30, 2025. These factors raise substantial doubts about our ability to continue as a going concern. The report from our independent registered public accounting firm for the year ended December 31, 2024 included an explanatory paragraph in respect of the substantial doubt of our ability to continue as a going concern.
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These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Lending from Financial Institutions
In January 2023, Hitrans renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB160.0 million (approximately $22.1 million) with the term from January 2023 to December 2027. On January 22, 2025, Hitrans and Bank of Communications entered into a new banking facilities for another five years from January 22, 2025 to January 22, 2030 for a maximum guarantee of loan amount to RMB155.8 million (approximately $21.5 million). The facility was secured by Hitrans’s land use rights and buildings. Under the facility, Hitrans borrowed RMB159.9 million (approximately $21.9 million) and RMB147.7 million (approximately $20.7 million ) as of December 31, 2024 and September 30, 2025, respectively, bearing interest at 2.5% to 3.45% per annum expiring through January to June 2026.
On January 17, 2022, Nanjing CBAK obtained a one-year term facility from Agricultural Bank of China with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 105% of benchmark rate of the People’s Bank of China (“PBOC”) for short-term loans, which is 3.85% per annum. The facility was guaranteed by the Company’s former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan and secured by an unrelated third party, Jiangsu Credits Financing Guarantee Co., Ltd. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on January 20, 2022 for a term until January 16, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) early on January 5, 2023. On January 6, 2023, Nanjing CBAK borrowed a one-year term loan of RMB10 million (approximately $1.4 million) for a period of one year to January 4, 2024, bearing interest at 120% of benchmark rate of the PBOC for short-term loans, which is 3.85% per annum, while other terms and guarantee remain the same. Nanjing CBAK repaid the loan on January 4, 2024.
On February 9, 2022, NJ CBAK obtained a one-year term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 124% of benchmark rate of the People’s Bank of China (“PBOC”) for short-term loans, which is 4.94% per annum. The facility was guaranteed by the Company’s former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January 28, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, Nanjing CBAK borrowed a one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 129% of benchmark rate of PBOC for short-term loans, which is 4.70% per annum for a term until January 13, 2024. Nanjing CBAK repaid the loan on January 13, 2024.
On April 28, 2022, Nanjing CBAK obtained a three-year term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch, with a maximum amount of RMB12 million (approximately $1.7 million) with the term from April 21, 2022 to April 21, 2025. The facility was guaranteed by the Company’s former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.5 million) on April 29, 2022, bearing interest at 3.95% per annum for a term until April 29, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, Nanjing CBAK borrowed another one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 102.5% of benchmark rate of PBOC for short-term loans, which is 3.90% per annum for a term until April 19, 2024. Nanjing CBAK repaid the loan on April 19, 2024.
Nanjing CBAK entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately $1.2 million) bearing interest rate at 4.6% per annum for a period from September 27, 2023 to August 31, 2024. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment and the Company’s former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Nanjing CBAK borrowed RMB9 million (approximately $1.3 million ) on September 27, 2023 for a term until August 31, 2024. Nanjing CBAK repaid the loan on August 31, 2024.
Hitrans entered into a loan agreement with China CITIC Bank Shaoxing Branch for a short-term loan of RMB4.8 million (approximately $0.7 million) from August 10, 2023 to May 2, 2024, bearing interest rate at 4.3% per annum. Hitrans repaid the loan on May 2, 2024.
On January 7, 2023, Nanjing CBAK obtained a two-year term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) for a period from January 7, 2023 to January 6, 2025. The facility was guaranteed by the Company’s former CEO, Mr. Yunfei Li, Mr. Yunfei Li’s wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK borrowed RMB5 million (approximately $0.7 million) on January 12, 2023 for a term of one year until January 11, 2024, bearing interest at 3.65% per annum. Nanjing CBAK repaid the above early on June 15, 2023. On June 27, 2023, Nanjing CBAK entered into another loan agreement for one year from June 27, 2023 to June 26, 2024 under the two-year term facility for a maximum loan amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.65 % pr annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on the same date. The loan was guaranteed by the Company’s former CEO, Mr. Yunfei Li, Mr. Yunfei Li’s wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK repaid the loan on June 26, 2024.
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On March 28, 2024, CBAK New Energy and Bank of China Limited entered into a short-term loan agreement for one year from March 29, 2023 to March 28, 2024 for a maximum loan amount to RMB5 million (approximately $0.7 million) bearing interest rate at 3.65% per annum. CBAK New Energy borrowed RMB5 million (approximately $0.7 million) on the same date. The loan was secured by CBAK Power’s buildings in Dalian. CBAK New Energy repaid RMB5 million (approximately $0.7 million) on March 27, 2024. On March 28, 2024, CBAK New Energy borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing interest rate at 3.45% per annum. CBAK New Energy early repaid the loan on August 21, 2024.
On April 19, 2023, Nanjing CBAK and Bank of Nanjing Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023 to April 9, 2024 for RMB10 million (approximately $1.4 million) bearing interest rate at 3.7% per annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on April 23, 2023. The loan was guaranteed by the Company’s former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Nanjing CBAK repaid the loan on April 9, 2024.
On July 31, 2023, Nanjing CBAK obtained a three-year term facility from Bank of China Gaochun Branch, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from July 31, 2023 to July 30, 2026. The facility was guaranteed by the Company’s former CEO, Mr, Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum. Nanjing CBAK repaid the loan on July 22, 2024.
On August 3, 2023, CBAK Energy and Bank of China entered into a short term loan agreement for one year from August 3, 2023 to August 2, 2024 for a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.55% per annum. CBAK Energy borrowed RMB10 million (approximately $1.4 million) on September 27, 2023. The loan was secured by CBAK Power’s buildings in Dalian. CBAK Energy repaid the loan on August 2, 2024.
On January 24, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to January 17, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.
On March 26, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to March 25, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.
On April 9, 2024, Hitrans and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from April 9, 2024 to April 7, 2025 for a maximum loan amount to RMB5.5 million (approximately $0.8 million) bearing interest rate at 4.05% per annum. Hitrans borrowed RMB5.5 million (approximately $0.8 million) on the same date. Hitrans early repaid the loan on January 24, 2025.
On June 24, 2024, CBAK Nanjing and Bank of China entered into a short-term loan agreement, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from June 24, 2024 to June 20, 2025.The loan was guaranteed by the Company’s former CEO, Mr, Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, CBAK Nanjing borrowed RMB10 million (approximately $1.4 million) on June 24, 2024, bearing interest rate at 3.0% per annum. CBAK Nanjing early repaid the loan on August 23, 2024.
On September 29, 2024, Hitrans and Zhejiang Shangyu Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement for RMB15 million (approximately $2.0 million) with the term of one year from September 29, 2024 to September 26, 2025 bearing 4.00% interest rate. Hitrans borrowed RMB15 million (approximately $2.1 million) on the same date. Hitrans repaid the loan on September 26, 2025.
On December 31, 2024, Hitrans and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB10 million (approximately $1.4 million) with the term of one year from December 31, 2024 to December 30, 2025 bearing 2.9% interest rate. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date.
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On January 17, 2025, Hitrans entered into a long-term Maximum Pledge Agreement with Zhejiang Shangyu Rural Commercial Bank, for the period from January 17, 2025 to September 25, 2027, with a maximum facility amount of RMB76.56 million (approximately $10.54 million). The facility was secured by the land use right and buildings of Hitrans. Hitrans has borrowed RMB43.9 million (approximately $6.2 million) as of September 30, 2025, bearing interest rate at 2.85%-3.6% per annum, of which RMB10 million (approximately $1.4 million) repayable on January 16, 2026, RMB30 million (approximately $4.2 million) repayable on September 25, 2027 and the remaining RMB3.9 million (approximately $0.5 million) repayable on June 20, 2027.
On January 20, 2025, Nanjing CBAK entered into an unsecured revolving loan agreement with Bank of Ningbo Co., Ltd. Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 2.8% per annum (LPR interest rate -30 bp), with a one-year loan period ending on January 20, 2026. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) under this loan agreement on January 20, 2025. Nanjing CBAK early repaid the loan on September 20, 2025.
On February 19, 2025, Nanjing CBAK obtained a RMB30 million facility (approximately $4.1 million) from Jiangsu Gaochun Rural Commercial Bank, with the term from February 19, 2025 to September 23, 2027. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment. Nanjing CBAK borrowed RMB3 million (approximately $0.4 million ) as of September 30, 2025, bearing interest rate at 2.98% per annum, repayable on May 19, 2026.
On February 25, 2025, Hitrans entered into a short-term factoring loan agreement with China Construction Bank Co., Ltd for a maximum amount of RMB10 million (approximately $1.4 million) for a period of one year from February 28, 2025 to February 27, 2026, bearing interest of 3.7% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date.
On June 28, 2025, Nanjing CBAK entered into a short-term loan agreement with Agricultural Bank of China Co., Limited for RMB12 million (approximately $1.7 million) from June 28, 2025 to June 26, 2026, bearing interest 2.60% per annum. Nanjing CBAK borrowed RMB12 million (approximately $1.7 million) on the same date. Nanjing CBAK early repaid the loan on July 18, 2025.
On June 30, 2025, CBAK Power obtained a banking facility from China Guangfa Bank Co., Ltd with a maximum amount of RMB100 million (approximately $14 million) for a term to June 12, 2026 for short-term borrowings and issuance of acceptance bills to settle materials suppliers, guaranteed by Power’s buildings and pledged deposits. CBAK Power borrowed HKD 10 million (approximately $1.4 million) from the above facility as of September 30, 2025, bearing interest at 2.15% per annum, repayable on August 14, 2026. CBAK Power has borrowed a series of bills $103.0 million (approximately $14.5 million) for various terms expiring through January to March 2026, which was secured by CBAK Power’s buildings and ledged deposit of RMB20.6 million (approximately $2.9 million).
On July 30, 2025, Hitrans entered into a short-term loan agreement with Industrial Bank Co., Ltd for RMB10 million (approximately $1.4 million) for a period of one year bearing interest of 3% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on July 31, 2025.
On August 21, 2025, CBAK Power entered into a short-term loan agreement with China Construction Bank for RMB10 million (approximately $1.4 million) for a period of one year, bearing interest of 2.2% per annum. CBAK Power borrowed RMB10 million (approximately $1.4 million) on August 29, 2025 and repayable on August 19, 2026.
CBAK Power and Nanjing CBAK obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB690 million (approximately $96.3 million) with the term to March 16, 2026. CBAK Power and Nanjing CBAK borrowed a series of acceptance bills totaling RMB108.3 million (approximately $15.2 million) for various terms expiring through October 2025 to March 2026, which was secured by the CBAK Power’s and Nanjing CBAK’s pledged deposit of RMB104.9 million (approximately $14.7 million) and CBAK Power’s and Nanjing CBAK’s bills receivables of RMB7.2 million (approximately $1.0 million).
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Hitrans renewed the banking facilities from China Zheshang Bank Co., Ltd. Shangyu Branch with a maximum amount of RMB150 million (approximately $20.9 million) with the term to May 28, 2026. Hitrans borrowed a series of acceptance bills totaling RMB93.9 million (approximately $13.2 million) for various terms expiring through October 2025 to March 2026, which was secured by Hitrans’s pledged deposit of RMB93.9 million (approximately $13.2 million).
Nanjing CBAK borrowed a series of acceptance bills from Bank of Nanjing totaling RMB40.5 million (approximately $5.7 million) for various terms expiring through October 2025 to March 2026, which was secured by Nanjing CBAK’s pledged deposit of RMB30.7 million (approximately $4.3 million) and the balance guaranteed by 100% equity in CBAK Nanjing held by BAK Investment.
Nanjing CBAK borrowed a series of acceptance bills from Bank of Ningbo totaling RMB24.5 million (approximately $3.4 million) for various terms expiring through October 2025 to March 2026, which was secured by Nanjing CBAK’s pledged deposit of RMB24.5 million (approximately $3.4 million).
Hitrans borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB43.2 million (approximately $6.1 million) expiring through October 2025 to February 2026, which was secured by Hitrans’s pledged deposit of RMB43.2 million (approximately $6.1 million).
Hitrans borrowed a series of acceptance bills from China CITIC Bank Co., Ltd totaling RMB3.2 million (approximately $0.5 million) expiring in November 2025, which was secured by Hitrans’s pledged deposit of RMB1.4 million (approximately $0.2 million) and bills receivables of RMB1.8 million (approximately $0.2 million).
Hitrans borrowed a series of acceptance bills from Zhejiang Shangyu Rural Commercial Bank Co., Ltd totaling RMB20.0 million (approximately $2.8 million) expiring through October 2025 to March 2026, which was secured by Hitrans’s pledged deposit of RMB20.0 million (approximately $2.8 million).
CBAK Power borrowed a series of acceptance bills from Industrial and Commercial Bank of China totaling RMB10.9 million (approximately $1.5 million) expiring through January to March 2026, which was secured by CBAK Power’s pledged deposit of RMB10.9 million (approximately $1.5 million).
Hitrans borrowed a series of acceptance bills from Industrial Bank totaling RMB16.0 million (approximately $2.3 million) expiring in March 2026, which was secured by Hitrans’s pledged deposit of RMB11.0 million (approximately $1.5 million).
Nanjing CBAK borrowed a series of acceptance bills from Agricultural Bank of China totaling RMB26.5 million (approximately $3.7 million) expiring through January to March 2026, which was secured by Nanjing CBAK’s pledged deposit of RMB7.8 million (approximately $1.1 million) and the balance guaranteed by 100% equity in CBAK Naning held by BAK Investment.
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Nanjing CBAK obtained a letter of credit from Bank of Ningbo of RMB5 million (approximately $0.7 million) for settlement of materials purchase bearing interest rate at 1.15% per for a period of one year from to September 18, 2026, which was secured by Nanjing CBAK’s pledged deposit of RMB5 million (approximately $0.7 million).
As of September 30, 2025, we had unutilized committed banking facilities of $20.2 million. We plan to renew these loans upon maturity and intend to raise additional funds through bank borrowings in the future to meet our daily cash demands, if required.
Equity and Debt Financings from Investors
We have also obtained funds through private placements, registered direct offerings and other equity and note financings.
On December 8, 2020, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we issued in a registered direct offering, an aggregate of 9,489,800 shares of common stock of the Company at a per share purchase price of $5.18, and warrants to purchase an aggregate of 3,795,920 shares of common stock of the Company at an exercise price of $6.46 per share exercisable for 36 months from the date of issuance (collectively, the “2020 Warrants”), for gross proceeds of approximately $49.16 million, before deducting fees to the placement agent and other offering expenses payable by the Company.
On February 8, 2021, we entered into another securities purchase agreement with the same investors, pursuant to which we issued in a registered direct offering, an aggregate of 8,939,976 shares of common stock of the Company at a per share purchase price of $7.83. In addition, we issued to the investors (i) in a concurrent private placement, the Series A-1 warrants to purchase a total of 4,469,988 shares of common stock, at a per share exercise price of $7.67 and exercisable for 42 months from the date of issuance; (ii) in the registered direct offering, the Series B warrants to purchase a total of 4,469,988 shares of common stock, at a per share exercise price of $7.83 and exercisable for 90 days from the date of issuance; and (iii) in the registered direct offering, the Series A-2 warrants to purchase up to 2,234,992 shares of common stock, at a per share exercise price of $7.67 and exercisable for 45 months from the date of issuance. We received gross proceeds of approximately $70 million from the registered direct offering and the concurrent private placement, before deducting fees to the placement agent and other offering expenses payable by the Company.
As of December 31, 2024, all the warrants described above had expired without being exercised.
Summary of Cash Flows
We currently are expanding our production lines and manufacturing capacity in our Dalian, Nanjing, Zhejiang and Anhui facilities, which requires additional funding to finance the expansion. We may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. We plan to renew our existing loans upon maturity, if required, and plan to raise additional funds through bank borrowings and equity financing in the future to meet our daily cash demands, if required. However, there can be no assurance that we will be successful in obtaining this financing. If our existing cash and bank borrowing are insufficient to meet our requirements, we may seek to sell equity securities, debt securities or borrow from lending institutions. We can make no assurance that financing will be available in the amounts we need or on terms acceptable to us, if at all. The sale of equity securities, including convertible debt securities, would dilute the interests of our current shareholders. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders. If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer.
The accompanying condensed consolidated financial statements have been prepared assuming we will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty related to our ability to continue as a going concern.
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The following table sets forth a summary of our cash flows for the periods indicated:
(All amounts in thousands of U.S. dollars)
| Nine Months Ended September 30, | ||||||||
| 2024 | 2025 | |||||||
| Net cash provided by operating activities | $ | 30,078 | $ | 18,747 | ||||
| Net cash used in investing activities | (20,112 | ) | (29,054 | ) | ||||
| Net cash (used in) provided by financing activities | (21,463 | ) | 10,202 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 538 | 2,668 | ||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (10,959 | ) | 2,563 | |||||
| Cash and cash equivalents and restricted cash at the beginning of period | 58,823 | 60,786 | ||||||
| Cash and cash equivalents and restricted cash at the end of period | $ | 47,864 | $ | 63,349 | ||||
Operating Activities
Net cash provided by operating activities was $18.7 million in the nine months ended September 30, 2025. The net cash provided by operating activities for the nine months ended September 30, 2025 was mainly attributable to our net income of $5.8 million (before non-cash depreciation and amortization, recovery from doubtful debts, write-down of inventories and share-based compensation), $8.9 million decrease of prepayments and other receivables and $31.1 million increase of trade and bills payable offset by the increase of trade and bills receivable and inventories by $29.4 million.
Net cash provided by operating activities was $30.1 million in the nine months ended September 30, 2024. The net cash provided by operating activities for the nine months ended September 30, 2024 was mainly attributable to our net income of $24.1 million (before non-cash depreciation and amortization, allowance for expected credit losses, write-down of inventories, share-based compensation, gain on disposal of machines and investment in equity investees) and $6.3 million increased of trade and bills payable.
Investing Activities
Net cash used in investing activities was $29.1 million for the nine months ended September 30, 2025. The net cash used in investing activities comprised mainly the purchases of property, plant and equipment, construction in progress and land use right $32.0 million offset by the government subsidy $2.8 million received.
Net cash used in investing activities was $20.1 million for the nine months ended September 30, 2024. The net cash used in investing activities comprised the purchases of property, plant and equipment and construction in progress $11.5 million and $9.1 million on deposit paid for acquisition of long-term investments.
Financing Activities
Net cash provided by financing activities was $10.2 million in the nine months ended September 30, 2025. The net cash provided by financing activities was mainly attributable to $45.8 million bank borrowings, $43.6 million from the maturity of the term deposits offset by $38.5 million repayment of bank borrowings and $39.2 million placement of term deposits.
Net cash used in financing activities was $21.5 million in the nine months ended September 30, 2024. The net cash used in financing activities was mainly attributable to $13.5 million, net on placement of term deposits, $47.9 million repayment of bank borrowings and $2.1 million repayment on finance leases offset by $40.9 million advances from bank borrowings and $1.1 million proceeds from finance lease.
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As of September 30, 2025, the principal amounts outstanding under our credit facilities and lines of credit were as follows:
(All amounts in thousands of U.S. dollars)
| Maximum amount available | Amount borrowed | |||||||
| Long-term credit facilities: | ||||||||
| Shaoxing Branch of Bank of Communications Co., Ltd | $ | 21,876 | $ | 20,736 | ||||
| Jiangsu Gaochun Rural Commercial Bank | 4,213 | 421 | ||||||
| Zhejiang Shangyu Rural Commercial Bank | 10,752 | 6,165 | ||||||
| 36,841 | 27,322 | |||||||
| Short-term credit facilities: | ||||||||
| Agricultural Bank of China Nanjing Gaochun Branch | 1,404 | 1,404 | ||||||
| Zhejiang Shangyu Rural Commercial Bank | 1,404 | 1,404 | ||||||
| China Everbright Bank Co., Ltd. Shaoxing Branch | 1,404 | 1,404 | ||||||
| China Construction Bank Co., LTD. Shaoxing Branch | 10,949 | 1,404 | ||||||
| Ningbo Bank Co., Ltd Nanjing Gaochun Branch | 1,391 | 1,391 | ||||||
| 16,552 | 7,007 | |||||||
| Other lines of credit: | ||||||||
| Bank of Ningbo Co., Ltd | 4,140 | 4,140 | ||||||
| China Zheshang Bank Co., Ltd. Shenyang Branch | 15,206 | 15,206 | ||||||
| Bank of Nanjing Gaochun Branch | 5,684 | 5,684 | ||||||
| Zhejiang Shangyu Rural Commercial Bank | 2,809 | 2,809 | ||||||
| China Zheshang Bank Co., Ltd Shangyu Branch | 13,184 | 13,184 | ||||||
| Bank of Communications Co., Ltd Shaoxing Branch | 6,068 | 6,068 | ||||||
| China Citicbank Bank Shaoxing Shengzhong Branch | 451 | 451 | ||||||
| Industrial and Commercial Bank of China Co., Ltd. Dalian Zhuanghe Branch | 1,524 | 1,524 | ||||||
| China Guofa Bank Co., Ltd. Dalian Ganjingzi Branch | 15,546 | 14,469 | ||||||
| Agricultural Bank of China Nanjing Gaochun Branch | 3,792 | 3,717 | ||||||
| Industrial Bank Co., Ltd. Shaoxing Branch | 2,248 | 2,248 | ||||||
| 70,652 | 69,500 | |||||||
| Total | $ | 124,045 | $ | 103,829 | ||||
Capital Expenditures
We incurred capital expenditures of $11.5 million and $32.1 million in the nine months ended September 30, 2024 and 2025, respectively. Our capital expenditures were used primarily to construct or upgrade our Dalian, Nanjing, Zhejiang and Auhui facilities.
We estimate that our total capital expenditures in fiscal year 2025 will reach approximately $50.0 million. Such funds have been and will continue to be used to construct new plants with new product lines and battery module packing lines.
Critical Accounting Policies
Our condensed consolidated financial information has been prepared in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (1) the reported amounts of our assets and liabilities, (2) the disclosure of our contingent assets and liabilities at the end of each fiscal period and (3) the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.
There were no material changes to the critical accounting policies previously disclosed in our audited consolidated financial statements for the year ended December 31, 2024 included in the Annual Report on Form 10-K filed on March 17, 2025.
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Changes in Accounting Standards
Please refer to Note 1 to our condensed consolidated financial statements, “Principal Activities, Basis of Presentation and Organization—Recently Adopted Accounting Standards” and “—Recently Issued But Not Yet Adopted Accounting Pronouncements” for a discussion of relevant pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.
Management conducted its evaluation of disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial Officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of September 30, 2025.
As we disclosed in our Annual Report on Form 10-K filed with the SEC on March 17, 2025, during our assessment of the effectiveness of internal control over financial reporting as of December 31, 2024, management identified the following material weaknesses in our internal control over financial reporting:
| ● | We did not have appropriate policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements. |
| ● | We do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements. |
In order to cure the foregoing material weaknesses, we have taken or are taking the following remediation measures:
| ● | We are in the process of hiring a permanent chief financial officer with significant U.S. GAAP and SEC reporting experience. Ms. Xiangyu Pei was appointed by the Board of Directors of the Company as the Interim Chief Financial Officer on August 23, 2019. Ms. Xiangyu Pei resigned as our Interim Chief Financial Officer on August 22, 2023 but has continued to serve in the Company’s finance department and on the board of director. Mr. Jiewei Li was appointed as the Company’s Chief Financial Officer on August 22, 2023. |
| ● | We have regularly offered our financial personnel trainings on internal control and risk management. We have regularly provided trainings to our financial personnel on U.S. GAAP accounting guidelines. We plan to continue to provide trainings to our financial team and our other relevant personnel on the U.S. GAAP accounting guidelines applicable to our financial reporting requirements. |
We intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that we will be able to do so. Designing and implementing effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weaknesses that we have identified.
Changes in Internal Control over Financial Reporting
Except for the matters described above, there were no changes in our internal controls over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The information set forth in Note 26 “Commitments and Contingencies—(ii) Litigation” to our condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q is incorporated by reference herein.
ITEM 1A. RISK FACTORS.
There are no material changes from the risk factors previously disclosed in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Unregistered Sales of Equity Securities
Other than as previously disclosed in current reports on Form 8-K, there were no unregistered sales of equity securities during the period covered by this report.
Issuer Repurchases of Equity Securities
Our common stock repurchase activity for the three months ended September 30, 2025 was as follows:
| Period | Total Number of Shares Purchased | Average Price Paid Per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan(2) | ||||||||||||
| July 1, 2025 to July 31, 2025 | 225,269 | $ | 1.168 | 225,269 | $ | 18,499,765 | ||||||||||
| August 1, 2025 to August 31, 2025 | - | - | - | $ | 18,499,765 | |||||||||||
| September 1, 2025 to September 30, 2025 | - | - | - | $ | 18,499,765 | |||||||||||
| Total | 225,269 | 225,269 | ||||||||||||||
| (1) | Average price paid per share excludes broker commissions and fees. |
| (2) | On May 20, 2025, our board of directors authorized the repurchase of up to $20 million in shares of our outstanding common stock. The stock repurchase program will end on May 20, 2026 and may be suspended, modified, or discontinued by the board of directors at any time. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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ITEM 5. OTHER INFORMATION.
Securities Trading Plans of Directors and Executive Officers
During the fiscal quarter ended September 30,
2025, no director or officer, as defined in Rule 16a-1(f),
ITEM 6. EXHIBITS.
The following exhibits are filed as part of this report or incorporated by reference:
| Exhibit No. | Description | |
| 31.1 | Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 10, 2025
| CBAK ENERGY TECHNOLOGY, INC. | ||
| By: | /s/ Zhiguang Hu | |
| Zhiguang Hu | ||
| Chief Executive Officer | ||
| By: | /s/ Jiewei Li | |
| Jiewei Li | ||
| Chief Financial Officer | ||
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FAQ
What were CBAT’s Q3 2025 results?
How did CBAT perform for the nine months ended September 30, 2025?
Did CBAT issue a going concern warning?
What is CBAT’s liquidity and debt position?
What is the status of CBAT’s share repurchase program?
How many CBAT shares are outstanding?
Is CBAT investing in capacity expansion?
