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Share-based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Compensation

17.

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 (10,000,000) Shares.

On June 30, 2015, pursuant to the 2015 Plan, the Compensation Committee of the Company’s Board of Directors granted an aggregate of 690,000 restricted shares of the Company’s common stock, par value $0.001, to certain employees, officers and directors of the Company with a fair value of $3.24 per share on June 30, 2015. In accordance with the vesting schedule of the grant, the restricted shares will vest in twelve equal quarterly installments on the last day of each fiscal quarter beginning on June 30, 2015 (i.e. last vesting period: quarter ended March 31, 2018). The Company recognizes the share-based compensation expenses on a graded-vesting method.

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 March 31, 2021, there was no unrecognized stock-based compensation associated with the above restricted shares. As of March 31, 2021, 1,667 vested shares were to be issued.

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 500,000 restricted shares of the Company’s common stock, par value $0.001, to certain employees, officers and directors of the Company, of which 220,000 restricted shares were granted to the Company’s executive officers and directors. There are three types of vesting schedules. First, if the number of restricted shares granted is below 3,000, the shares will vest annually in 2 equal installments over a two year period with the first vesting on June 30, 2017. Second, if the number of restricted shares granted is larger than or equal to 3,000 and is below 10,000, the shares will vest annually in 3 equal installments over a three year period with the first vesting on June 30, 2017. Third, if the number of restricted shares granted is above or equal to 10,000, the shares will vest semi-annually in 6 equal installments over a three year period with the first vesting on December 31, 2016. The fair value of these restricted shares was $2.68 per share on April 19, 2016. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method.

As of March 31, 2021, there was no unrecognized stock-based compensation associated with the above restricted shares and 4,167 vested shares were to be issued.

Restricted share units granted on August 23, 2019

On August 23, 2019, pursuant to the Company’s 2015 Plan, the Compensation Committee granted an aggregate of 1,887,000 restricted share units of the Company’s common stock to certain employees, officers and directors of the Company, of which 710,000 restricted share units were granted to the Company’s executive officers and directors. There are two types of vesting schedules, (i) the share units will vest semi-annually in 6 equal installments over a three year period with the first vesting on September 30, 2019; (ii) the share units will vest annual in 3 equal installments over a three year period with the first vesting on March 31, 2021. The fair value of these restricted shares was $0.9 per share on August 23, 2019. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method.

The Company recorded non-cash share-based compensation expense of $300,135 for three months ended March 31, 2020, in respect of the restricted shares granted on August 23, 2019 of which $254,890, $9,125 and $36,120 were allocated to general and administrative expenses, sales and marketing expenses and research and development expenses.

The Company recorded non-cash share-based compensation expense of $93,786 for three months ended March 31, 2021, in respect of the restricted shares granted on August 23, 2019 of which $75,794, $2,982 and $15,010 were allocated to general and administrative expenses, sales and marketing expenses and research and development expenses.

As of March 31, 2021, non-vested restricted share units granted on August 23, 2019 are as follows:

Non-vested shares as of January 1, 2021	855,504
Vested	(288,498	)
Forfeited	-
Non-vested shares as of March 31, 2021	567,006

As of March 31, 2021, there was unrecognized stock-based compensation of $159,302 associated with the above restricted shares. As of March 31, 2021, 288,498 vested shares were to be issued.

Restricted share units granted on October 23, 2020

On October 23, 2020, pursuant to the Company’s 2015 Plan, the Compensation Committee granted an aggregate of 100,000 restricted share units of the Company’s common stock to an employee of the Company. In accordance with the vesting schedule of the grant, the restricted shares will vest semi-annually in 6 equal installments over a three year period with the first vesting on October 30, 2020. The fair value of these restricted shares was $3 per share on October 23, 2020. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method.

The Company recorded non-cash share-based compensation expense of nil and $55,032 for three months ended March 31, 2020 and 2021, in respect of the restricted shares granted on October 23, 2020 of which allocated to research and development expenses.

As of March 31, 2021, non-vested restricted share units granted on October 23, 2020 are as follows:

Non-vested share units as of January 1, 2021	83,333
Granted		-
Vested		-
Non-vested share units as of March 31, 2021		83,333

As of March 31, 2021, there was unrecognized stock-based compensation $152,777 associated with the above restricted share units and no vested shares were to be issued.

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 month ended March 31, 2020 and 2021.