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Share-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Share-Based Compensation [Abstract] |
Share-based Compensation | 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 (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 September 30, 2023, there was no unrecognized stock-based compensation associated with the above restricted shares and 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. 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, 2023, 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 nil and $23,778 for three and nine months ended September 30, 2022, respectively, in respect of the restricted shares granted on August 23, 2019. All the restricted share units granted in respect of the restricted share units granted on August 23, 2019 had been vested on March 2022. As of September 30, 2023, there was no unrecognized stock-based compensation associated with the above restricted share units. 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 to an employee of the Company. In accordance with the vesting schedule of the grant, the restricted share units 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 share units 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 $11,247 and nil for the three months ended September 30, 2022 and 2023, respectively, in respect of the restricted share units granted on October 23, 2020 of which allocated to research and development expenses. The Company recorded non-cash share-based compensation expense of $33,374 and $6,529 for the nine months ended September 30, 2022 and 2023, respectively, in respect of the restricted share units granted on October 23, 2020 of which allocated to research and development expenses. As of September 30, 2023, non-vested restricted share units granted on October 23, 2020 are as follows:
Non-vested share units as of January 1, 2023 |  |  | 16,665 |
Granted |  |  | - |
Vested |  |  | (16,665 | )
Non-vested share units as of September 30, 2023 |  |  | - |
All the restricted share units granted on October 23, 2020 had been vested on April 30, 2023. As of September 30 2023, there was no unrecognized stock-based compensation with the above restricted share units and 16,665 vested shares were to be issued. 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 2,750,002 share units of the Company’s common stock to certain employees, officers and directors of the Company, of which options to obtain 350,000 share units were given to the Company’s executive officers and directors with an option exercise price of $1.96 based on fair market value. The vesting of shares each year is subject to certain financial performance indicators. The shares will be vested semi-annually in 10 equal installments over a five year period with the first vesting on May 30, 2022. The options will expire on the 70-month anniversary of the grant date. 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 106.41%, risk free interest rate of 1.26%, and dividend yield of 0%. The fair value of 350,000 stock options to directors of the Company was $479,599 at the grant date. For the three and nine months ended September 30, 2022 and 2023, the Company recorded nil as stock compensation expenses. 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 106.41%, risk-free interest rate of 1.26% and dividend yield of 0%. The fair value of 2,400,002 stock options to certain employees and officers of the Company was $2,805,624 at the grant date. During the three and nine months ended September 30, 2022 and 2023, the Company recorded nil as stock compensation expenses. As of September 30, 2023, there was unrecognized stock-based compensation $1,988,846 associated with the above options granted. 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 894,000 restricted share units and 2,124,000 options to certain employees, officers and directors of the Company, of which 230,000 restricted share units and 460,000 options were granted to the Company’s executive officers and directors. The restricted share units will vest semi-annually on June 30, 2023 and December 31, 2023. The fair value of these restricted shares units was $0.95 per share on April 11, 2023. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method. The option exercise price was $0.9780. The shares will be vested semi-annually in 4 equal installments over a 2 year period with the first vesting on June 30, 2024. The options will expire on the 70-month anniversary of the grant date. The Company recorded non-cash share-based compensation expense of $146,660 and $695,040 for the three and nine months ended September 30, 2023, respectively, in respect of the restricted share units granted on April 11, 2023. 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 5.83 years, volatility of 106.59%, risk free interest rate of 3.51% and dividend yield of 0%. The fair value of options of the Company was $838,190 at the grant date. During the three and nine months ended September 30, 2023, the Company recorded $119,865 and $224,095 as share-based compensation expenses. As of September 30, 2023, non-vested restricted share units granted on April 11, 2023 are as follows:
Non-vested share units as of April 11, 2023 |  |  |
Granted |  |  | 894,000 |
Vested |  |  | (443,000 | )
Forfeited |  |  | (8,000 | )
Non-vested share units as of September 30, 2023 |  |  | 443,000 |
As of September 30, 2023, there was unrecognized stock-based compensation $760,755 associated with the above restricted share units and options granted and nil vested shares were to be issued. 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 40,000 restricted share units and 160,000 options to employees of the Company. The restricted share units will vest semi-annually on October 15, 2023 and April 15, 2023. The fair value of these restricted shares units was $0.88 per share on August 22, 2023. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method. The option exercise price was $0.8681. The shares will be vested semi-annually in 4 equal installments over a 2 year period with the first vesting on February 15, 2025. The options will expire on the 70-month anniversary of the grant date. The Company recorded non-cash share-based compensation expense of $31,215 for the three and nine months ended September 30, 2023, respectively, in respect of the restricted share units granted on April 11, 2023. 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 5.83 years, volatility of 106.34%, risk free interest rate of 4.47% and dividend yield of 0%. The fair value of options of the Company was $56,521 at the grant date. During the three and nine months ended September 30, 2023, the Company recorded $2,954 as share-based compensation expenses. As of September 30, 2023, non-vested restricted share units granted on August 22, 2023 are as follows:
Non-vested share units as of August 22, 2023 |  |  |
Granted |  |  | 40,000 |
Vested |  |  | - |
Forfeited |  |  | - |
Non-vested share units as of September 30, 2023 |  |  | 40,000 |
As of September 30, 2023, there was unrecognized stock-based compensation $74,435 associated with the above restricted share units and options granted and nil vested shares were to be issued. 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, 2023 |  |  | 2,200,044 |  |  | $ | 1.96 |  |  | $ | - |  |  |  | 4.7 |
Exercisable at January 1, 2023 |  |  | 549,958 |  |  |  | 1.96 |  |  | $ | - |  |  |  | 4.7 |
Granted |  |  | 2,284,000 |  |  |  | 0.97 |  |  |  | - |  |  |  | 5.8 |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | 20,000 |  |  |  | 0.98 |  |  |  | - |  |  |  | 5.8 |
Outstanding at September 30, 2023 |  |  | 4,464,044 |  |  | $ | 1.46 |  |  | $ | - |  |  |  | 4.5 |
Exercisable at September 30, 2023 |  |  | 549,958 |  |  | $ | 1.96 |  |  | $ | - |  |  |  | 4.0 |
* | The intrinsic value of the stock options at September 30, 2023 is the amount by which the market value of the Company’s common stock of $0.82 as of September 30, 2023 exceed the average exercise price of the option. As of September 30, 2023, the intrinsic value of the outstanding and exercisable stock options was $nil.
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, 2022 and 2023.

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