UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: March 31, 2025

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

For the transition period from _____________ to _____________

Commission File Number: 001-32898

CBAK ENERGY TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

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

(Address of principal executive offices, Zip Code)

(86)(411)-3918-5985

(Registrant’s telephone number, including area code)

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

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

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

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

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

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

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

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

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

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 19, 2025 is as follows:

Class of Securities |  | Shares Outstanding
Common Stock, $0.001 par value |  | 89,939,662

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. | 43
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 52
Item 4. | Controls and Procedures. | 52
PART II
| OTHER INFORMATION |
Item 1. | Legal Proceedings. | 53
Item 1A. | Risk Factors. | 53
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 53
Item 3. | Defaults Upon Senior Securities. | 53
Item 4. | Mine Safety Disclosures. | 53
Item 5. | Other Information. | 53
Item 6. | Exhibits. | 53

i

PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

CBAK ENERGY TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED

MARCH 31, 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 March 31, 2025 (unaudited) |  | 2
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2025 (unaudited) |  | 3
Condensesd Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2024 and 2025 (unaudited) |  | 4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2025 (unaudited) |  | 5
Notes to the Condensed Consolidated Financial Statements (unaudited) |  | 6

1

CBAK Energy Technology, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of December 31, 2024 and March 31, 2025

(Unaudited)

(In US$ except for number of shares)

|  | Note |  | December 31, 2024 |  |  | March 31, 2025 |
Assets |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  | $ | 6,724,360 |  |  | $ | 4,052,010 |
Pledged deposits |  | 2 |  |  | 54,061,642 |  |  |  | 43,482,693 |
Term deposits |  | 3 |  |  | 4,237,090 |  |  |  | 5,530,030 |
Trade and bills receivable, net |  | 4 |  |  | 32,938,918 |  |  |  | 40,835,093 |
Inventories |  | 5 |  |  | 22,851,027 |  |  |  | 30,803,486 |
Prepayments and other receivables |  | 6 |  |  | 20,004,966 |  |  |  | 17,991,265 |
Receivables from former subsidiary |  | 17 |  |  | 12,399 |  |  |  | 9,011 |
Income tax recoverable |  |  |  |  | 566,458 |  |  |  | 455,342 |
Total current assets |  |  |  |  | 141,396,860 |  |  |  | 143,158,930 |
Property, plant and equipment, net |  | 7 |  |  | 85,486,829 |  |  |  | 84,283,683 |
Construction in progress |  | 8 |  |  | 42,526,859 |  |  |  | 51,527,443 |
Long-term investments, net |  | 9 |  |  | 2,246,494 |  |  |  | 2,313,725 |
Prepaid land use rights |  | 10 |  |  | 11,075,973 |  |  |  | 11,056,715 |
Intangible assets, net |  | 11 |  |  | 382,962 |  |  |  | 268,398 |
Deposit paid for acquisition of long-term investments |  | 13 |  |  | 15,864,318 |  |  |  | 15,949,095 |
Operating lease right-of-use assets, net |  | 10 |  |  | 3,237,849 |  |  |  | 2,906,652 |
Total assets |  |  |  | $ | 302,218,144 |  |  | $ | 311,464,641 |
Liabilities |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |
Trade and bills payable |  | 14 |  |  | 84,724,386 |  |  |  | 93,398,948 |
Short-term bank borrowings |  | 15 |  |  | 26,087,350 |  |  |  | 29,301,628 |
Other short-term loans |  | 15 |  |  | 335,715 |  |  |  | 335,905 |
Accrued expenses and other payables |  | 16 |  |  | 58,285,635 |  |  |  | 50,305,373 |
Payable to a former subsidiary, net |  | 17 |  |  | 419,849 |  |  |  | 418,211 |
Deferred government grants, current |  | 18 |  |  | 556,214 |  |  |  | 559,186 |
Product warranty provisions |  | 19 |  |  | 23,426 |  |  |  | 23,000 |
Operating lease liability, current |  | 10 |  |  | 1,268,405 |  |  |  | 1,159,373 |
Total current liabilities |  |  |  |  | 171,700,980 |  |  |  | 175,501,624 |
Long-term bank borrowings |  | 15 |  |  | - |  |  |  | 4,131,890 |
Deferred government grants, non-current |  | 18 |  |  | 7,580,255 |  |  |  | 10,272,610 |
Product warranty provisions |  | 19 |  |  | 420,688 |  |  |  | 417,565 |
Operating lease liability, non-current |  | 10 |  |  | 2,449,056 |  |  |  | 2,397,859 |
Total liabilities |  |  |  |  | 182,150,979 |  |  |  | 192,721,548 |
Commitments and contingencies |  | 26 |  |  |  |  |  |  |  |
Shareholders’ equity |  |  |  |  |  |  |  |  |  |
Common stock $0.001 par value; 500,000,000 authorized; 90,083,396 issued and 89,939,190 outstanding as of December 31, 2024; and 90,083,868 issued and 89,939,662 outstanding as of March 31, 2025 |  |  |  |  | 90,083 |  |  |  | 90,083 |
Donated shares |  |  |  |  | 14,101,689 |  |  |  | 14,101,689 |
Additional paid-in capital |  |  |  |  | 247,842,445 |  |  |  | 247,869,511 |
Statutory reserves |  | 21 |  |  | 1,230,511 |  |  |  | 3,042,602 |
Accumulated deficit |  |  |  |  | (122,605,730 | ) |  |  | (125,997,055 | )
Accumulated other comprehensive loss |  |  |  |  | (14,919,345 | ) |  |  | (14,248,434 | )
|  |  |  |  | 125,739,653 |  |  |  | 124,858,396 |
Less: Treasury shares |  |  |  |  | (4,066,610 | ) |  |  | (4,066,610 | )
Total shareholders’ equity |  |  |  |  | 121,673,043 |  |  |  | 120,791,786 |
Non-controlling interests |  |  |  |  | (1,605,878 | ) |  |  | (2,048,693 | )
Total equity |  |  |  |  | 120,067,165 |  |  |  | 118,743,093 |
Total liabilities and shareholder’s equity |  |  |  | $ | 302,218,144 |  |  | $ | 311,464,641 |

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 months ended March 31, 2024 and 2025

(Unaudited)

(In US$ except for number of shares)

|  |  |  | Three months ended March 31, |
|  | Note |  | 2024 |  |  | 2025 |
Net revenues |  | 28 |  | $ | 58,822,432 |  |  | $ | 34,938,901 |
Cost of revenues |  |  |  |  | (40,041,385 | ) |  |  | (30,137,167 | )
Gross profit |  |  |  |  | 18,781,047 |  |  |  | 4,801,734 |
Operating expenses: |  |  |  |  |  |  |  |  |  |
Research and development expenses |  |  |  |  | (2,815,518 | ) |  |  | (3,023,961 | )
Sales and marketing expenses |  |  |  |  | (1,724,032 | ) |  |  | (896,050 | )
General and administrative expenses |  |  |  |  | (4,092,527 | ) |  |  | (3,804,137 | )
Allowance of credit losses and bad debts written off |  |  |  |  | 114,013 |  |  |  | 58,395 |
Total operating expenses |  |  |  |  | (8,518,064 | ) |  |  | (7,665,753 | )
Operating income (loss) |  |  |  |  | 10,262,983 |  |  |  | (2,864,019 | )
Finance income, net |  |  |  |  | 9,663 |  |  |  | 45,120 |
Other income, net |  |  |  |  | 367,438 |  |  |  | 712,792 |
Share of (loss) income of equity investee |  |  |  |  | (18,824 | ) |  |  | 55,125 |
Income (loss) before income tax |  |  |  |  | 10,621,260 |  |  |  | (2,050,982 | )
Income tax expenses |  | 20 |  |  | (1,048,786 | ) |  |  | - |
Net income (loss) |  |  |  |  | 9,572,474 |  |  |  | (2,050,982 | )
Less: Net loss attributable to non-controlling interests |  |  |  |  | 263,976 |  |  |  | 471,748 |
Net income attributable to shareholders of CBAK Energy Technology, Inc. |  |  |  | $ | 9,836,450 |  |  | $ | (1,579,234 | )
Net income (loss) |  |  |  |  | 9,572,474 |  |  |  | (2,050,982 | )
Other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |
– Foreign currency translation adjustment |  |  |  |  | (1,906,048 | ) |  |  | 699,844 |
Comprehensive income (loss) |  |  |  |  | 7,666,426 |  |  |  | (1,351,138 | )
Less: Comprehensive loss attributable to non-controlling interests |  |  |  |  | 274,223 |  |  |  | 442,816 |
Comprehensive income (loss) attributable to CBAK Energy Technology, Inc. |  |  |  | $ | 7,940,649 |  |  | $ | (908,322 | )
Income (loss) per share |  | 25 |  |  |  |  |  |  |  |
– Basic |  |  |  | $ | 0.11 |  |  | $ | (0.02 | )
– Diluted |  |  |  | $ | 0.11 |  |  | $ | (0.02 | )
Weighted average number of shares of common stock: |  | 25 |  |  |  |  |  |  |  |
– Basic |  |  |  |  | 89,925,024 |  |  |  | 89,938,690 |
– Diluted |  |  |  |  | 90,123,965 |  |  |  | 89,938,690 |

See accompanying notes to the condensed consolidated financial statements.

3

CBAK Energy Technology, Inc. and Subsidiaries,

Condensed Consolidated Statements of Changes in Shareholders’ Equity

For the three months ended March 31, 2024 and 2025

(Unaudited)

(In US$ except for number of shares)

|  | Common stock issued |  |  |  |  |  | Additional |  |  | Statutory |  |  |  |  |  | Accumulated other |  |  | Non- |  |  | Treasury shares |  |  | Total |
|  | Number of |  |  |  |  |  | Donated |  |  | paid-in |  |  | reserves |  |  | Accumulated |  |  | comprehensive |  |  | controlling |  |  | Number of |  |  |  |  |  | shareholders’ |
|  | shares |  |  | Amount |  |  | shares |  |  | capital |  |  | (Note 21) |  |  | deficit |  |  | Income (loss) |  |  | interests |  |  | shares |  |  | Amount |  |  | equity |
Balance as of January 1, 2024 |  |  | 90,063,396 |  |  | $ | 90,063 |  |  | $ | 14,101,689 |  |  | $ | 247,465,817 |  |  | $ | 1,230,511 |  |  | $ | (134,395,762 | ) |  | $ | (11,601,403 | ) |  | $ | 634,036 |  |  |  | (144,206 | ) |  | $ | (4,066,610 | ) |  | $ | 113,458,341 |
Net income (loss) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 9,836,450 |  |  |  | - |  |  |  | (263,976 | ) |  |  | - |  |  |  | - |  |  |  | 9,572,474 |
Share-based compensation for employee and director stock awards |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 116,582 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 116,582 |
Foreign currency translation adjustment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,895,801 | ) |  |  | (10,247 | ) |  |  |  |  |  |  |  |  |  |  | (1,906,048 | )
Balance as of March 31, 2024 |  |  | 90,063,396 |  |  | $ | 90,063 |  |  | $ | 14,101,689 |  |  | $ | 247,582,399 |  |  | $ | 1,230,511 |  |  | $ | (124,559,312 | ) |  | $ | (13,497,204 | ) |  | $ | 359,813 |  |  |  | (144,206 | ) |  | $ | (4,066,610 | ) |  | $ | 121,241,349 |
Balance as of January 1, 2025 |  |  | 90,083,396 |  |  |  | 90,083 |  |  |  | 14,101,689 |  |  |  | 247,842,445 |  |  |  | 1,230,511 |  |  |  | (122,605,730 | ) |  |  | (14,919,345 | ) |  |  | (1,605,878 | ) |  |  | (144,206 | ) |  | $ | (4,066,610 | ) |  | $ | 120,067,165 |
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,579,234 | ) |  |  | - |  |  |  | (471,748 | ) |  |  | - |  |  |  | - |  |  |  | (2,050,982 | )
Exercise of stock options |  |  | 472 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Share-based compensation for employee and director stock awards |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 27,066 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 27,066 |
Appropriation to statutory reserves |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,812,091 |  |  |  | (1,812,091 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Foreign currency translation adjustment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 670,911 |  |  |  | 28,933 |  |  |  |  |  |  |  |  |  |  |  | 699,844 |
Balance as of March 31, 2025 |  |  | 90,083,868 |  |  | $ | 90,083 |  |  | $ | 14,101,689 |  |  | $ | 247,869,511 |  |  | $ | 3,042,602 |  |  | $ | (125,997,055 | ) |  | $ | (14,248,434 | ) |  | $ | (2,048,693 | ) |  |  | (144,206 | ) |  | $ | (4,066,610 | ) |  | $ | 118,743,093 |

See accompanying notes to the condensed consolidated financial statements.

4

CBAK Energy Technology, Inc. and subsidiaries

Condensed consolidated statements of cash flows

For the three months ended March 31, 2024 and 2025

(Unaudited)

(In US$)

|  | Three months ended March 31, |
|  | 2024 |  |  | 2025 |
Cash flows from operating activities |  |  |  |  |  |
Net income (loss) |  | $ | 9,572,474 |  |  | $ | (2,050,982 | )
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 2,231,605 |  |  |  | 2,123,633 |
Allowance for credit losses |  |  | (116,248 | ) |  |  | (58,395 | )
Write-down of inventories |  |  | 538,883 |  |  |  | 934,424 |
Share-based compensation |  |  | 116,582 |  |  |  | 27,066 |
Share of loss (income) of an equity investee |  |  | 18,824 |  |  |  | (55,125 | )
Amortization of operating lease right-of-use assets |  |  | 297,613 |  |  |  | 292,950 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Trade and bills receivable |  |  | (8,188,661 | ) |  |  | (7,717,786 | )
Inventories |  |  | 4,085,626 |  |  |  | (8,748,990 | )
Prepayments and other receivables |  |  | (82,300 | ) |  |  | 1,987,955 |
Trade and bills payable |  |  | (2,015,325 | ) |  |  | 8,206,996 |
Accrued expenses and other payables and product warranty provisions |  |  | (460,200 | ) |  |  | (4,441,468 | )
Lease liabilities |  |  | 361,498 |  |  |  | (124,846 | )
Trade receivable from and payables to a former subsidiary |  |  | 37,966 |  |  |  | 3,447 |
Income tax recoverable |  |  | 1,048,832 |  |  |  | - |
Net cash provided by (used in) operating activities |  |  | 7,447,169 |  |  |  | (9,621,121 | )
Cash flows from investing activities |  |  |  |  |  |  |  |
Deposit paid for acquisition of long-term investment |  |  | (4,934,830 | ) |  |  | - |
Purchases of property, plant and equipment and construction in progress |  |  | (7,901,180 | ) |  |  | (12,689,383 | )
Government subsidy |  |  | - |  |  |  | 2,786,615 |
Net cash used in investing activities |  |  | (12,836,010 | ) |  |  | (9,902,768 | )
Cash flows from financing activities |  |  |  |  |  |  |  |
Proceeds from bank borrowings |  |  | 20,801,840 |  |  |  | 24,337,737 |
Repayment of bank borrowings |  |  | (16,700,355 | ) |  |  | (17,143,957 | )
Proceeds from finance leases |  |  | 1,115,216 |  |  |  | - |
Principal payments on finance leases |  |  | (717,223 | ) |  |  | - |
Placement of term deposits |  |  | (20,891,913 | ) |  |  | (1,268,009 | )
Net cash (used in) provided by financing activities |  |  | (16,392,435 | ) |  |  | 5,925,771 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash |  |  | (784,780 | ) |  |  | 346,819 |
Net decrease in cash and cash equivalents and restricted cash |  |  | (22,566,056 | ) |  |  | (13,251,299 | )
Cash and cash equivalents and restricted cash at the beginning of period |  |  | 58,822,816 |  |  |  | 60,786,002 |
Cash and cash equivalents and restricted cash at the end of period |  | $ | 36,256,760 |  |  | $ | 47,534,703 |
Supplemental non-cash investing and financing activities: |  |  |  |  |  |  |  |
Transfer of construction in progress to property, plant and equipment |  | $ | 1,132,046 |  |  | $ | 461,234 |
Lease liabilities arising from obtaining right-of-use assets |  | $ | 2,348,281 |  |  | $ | - |
Cash paid during the period for: |  |  |  |  |  |  |  |
Income taxes |  | $ | - |  |  | $ | - |
Interest, net of amounts capitalized |  | $ | 159,549 |  |  | $ | 155,212 |

See accompanying notes to the condensed consolidated financial statements.

5

CBAK Energy Technology, Inc. and subsidiaries

Notes to the condensed consolidated financial statements

For the three months ended March 31, 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 October 4, 1999 as Medina Copy, Inc. The Company changed its name to Medina Coffee, Inc. on October 6, 1999 and subsequently changed its name to China BAK Battery, Inc. on February 14, 2005. CBAK and its subsidiaries (hereinafter, collectively referred to as the “Company”) are principally engaged in the manufacture, commercialization and distribution of a wide variety of standard and customized lithium-ion (known as “Li-ion” or “Li-ion cell”) high power rechargeable batteries. Prior to the disposal of BAK International Limited (“BAK International”) and its subsidiaries (see below), the batteries produced by the Company were for use in cellular telephones, as well as various other portable electronic applications, including high-power handset telephones, laptop computers, power tools, digital cameras, video camcorders, MP3 players, electric bicycles, hybrid/electric vehicles, and general industrial applications. After the disposal of BAK International and its subsidiaries on June 30, 2014, the Company will focus on the manufacture, commercialization and distribution of high power lithium-ion rechargeable batteries for use in cordless power tools, light electric vehicles, hybrid electric vehicles, electric cars, electric busses, uninterruptable power supplies and other high power applications.

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.

6

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 1,720,087 shares of common stock for gross proceeds of $17,000,000. In conjunction with this financing, Mr. Xiangqian Li, the Chairman and Chief Executive Officer of the Company (“Mr. Li”) until March 1, 2016, agreed to place 435,910 shares of the Company’s common stock owned by him into an escrow account pursuant to an Escrow Agreement dated January 20, 2005 (the “Escrow Agreement”). Pursuant to the Escrow Agreement, 50% of the escrowed shares were to be released to the investors in the private placement if audited net income of the Company for the fiscal year ended September 30, 2005 was not at least $12,000,000, and the remaining 50% was to be released to investors in the private placement if audited net income of the Company for the fiscal year ended September 30, 2006 was not at least $27,000,000. If the audited net income of the Company for the fiscal years ended September 30, 2005 and 2006 reached the above-mentioned targets, the 435,910 shares would be released to Mr. Li in the amount of 50% upon reaching the 2005 target and the remaining 50% upon reaching the 2006 target.

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.

While the 217,955 escrow shares relating to the 2005 performance threshold were previously released to Mr. Li, Mr. Li executed a further undertaking on August 21, 2006 to return those shares to the escrow agent for the distribution to the relevant investors. However, such shares were not returned to the escrow agent, but, pursuant to a Delivery of Make Good Shares, Settlement and Release Agreement between the Company, BAK International and Mr. Li entered into on October 22, 2007 (the “Li Settlement Agreement”), such shares were ultimately delivered to the Company as described below. Because the Company failed to satisfy the performance threshold for the fiscal year ended September 30, 2006, the remaining 217,955 escrow shares relating to the fiscal year 2006 performance threshold were released to the relevant investors. As Mr. Li has not retained any of the shares placed into escrow, and as the investors party to the Escrow Agreement are only shareholders of the Company and do not have and are not expected to have any other relationship to the Company, the Company has not recorded a compensation charge for the years ended September 30, 2005 and 2006.

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 $7,955,358 respectively, as set out in the consolidated statements of changes in shareholders’ equity.

In November 2007, Mr. Li delivered the 217,955 shares related to the 2005 performance threshold to BAK International pursuant to the Li Settlement Agreement; BAK International in turn delivered the shares to the Company. Such shares (other than those issued to investors pursuant to the 2008 Settlement Agreements, as described below) are now held by the Company. Upon receipt of these shares, the Company and BAK International released all claims and causes of action against Mr. Li regarding the shares, and Mr. Li released all claims and causes of action against the Company and BAK International regarding the shares. Under the terms of the Li Settlement Agreement, the Company commenced negotiations with the investors who participated in the Company’s January 2005 private placement in order to achieve a complete settlement of BAK International’s obligations (and the Company’s obligations to the extent it has any) under the applicable agreements with such investors.

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.

7

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 50% of the number of the escrow shares related to the 2005 performance threshold these investors had claimed; aggregate settlement payments as of June 30, 2015amounted to 73,749 shares. Share payments to date have been made in reliance upon the exemptions from registration provided by Section 4(2) and/or other applicable provisions of the Securities Act of 1933, as amended. In accordance with the 2008 Settlement Agreements, the Company filed a registration statement covering the resale of such shares which was declared effective by the SEC on June 26, 2008.

Pursuant to the Li Settlement Agreement, the 2008 Settlement Agreements and upon the release of the 217,955 escrow shares relating to the fiscal year 2006 performance threshold to the relevant investors, neither Mr. Li or the Company have any obligations to the investors who participated in the Company’s January 2005 private placement relating to the escrow shares.

As of March 31, 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 217,955 shares related to the 2006 performance threshold to the relevant investors in fiscal year 2007 and the Company also have transferred 73,749 shares relating to the 2005 performance threshold to the investors who had entered the “2008 Settlement Agreements” with us in fiscal year 2008, pursuant to “Li Settlement Agreement” and “2008 Settlement Agreements”, neither Mr. Li nor the Company had any remaining obligations to those related investors who participated in the Company’s January 2005 private placement relating to the escrow shares.

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 $500,000. Pursuant to CBAK Trading’s articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Trading on or before August 14, 2015. On March 7, 2017, the name of Dalian BAK Trading Co., Ltd was changed to Dalian CBAK Trading Co., Ltd (“CBAK Trading”). On August 5, 2019, CBAK Trading’s registered capital was increased to $5,000,000. Pursuant to CBAK Trading’s amendment articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Trading on or before August 1, 2033. On December 12, 2023, CBAK Trading changed its name to Dalian CBAK New Energy Co., Ltd (“CBAK New Energy”). Up to the date of this report, the Company has contributed $2,435,000 to CBAK New Energy in cash. CBAK New Energy principally engaged in investment holding.

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 $30,000,000. Pursuant to CBAK Power’s articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Power on or before December 27, 2015. On March 7, 2017, the name of Dalian BAK Power Battery Co., Ltd was changed to Dalian CBAK Power Battery Co., Ltd (“CBAK Power”). On July 10, 2018, CBAK Power’s registered capital was increased to $50,000,000. On October 29, 2019, CBAK Power’s registered capital was further increased to $60,000,000. Pursuant to CBAK Power’s amendment articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Power on or before December 31, 2021. Up to the date of this report, the Company has contributed $60,000,000 to CBAK Power through injection of a series of patents and cash. CBAK Power principal engaged in development and manufacture of high-power lithium batteries.

On May 4, 2018, CBAK New Energy (Suzhou) Co., Ltd (“CBAK Suzhou”) was established as a 90% owned subsidiary of CBAK Power with a registered capital of RMB10,000,000 (approximately $1.5 million). The remaining 10% equity interest was held by certain employees of CBAK Suzhou. Pursuant to CBAK Suzhou’s articles of association, each shareholder is entitled to the right of the profit distribution or responsible for the loss according to its proportion to the capital contribution. Pursuant to CBAK Suzhou’s articles of association and relevant PRC regulations, CBAK Power was required to contribute the capital to CBAK Suzhou on or before December 31, 2019. Up to the date of this report, the Company has contributed RMB9.0 million (approximately $1.3 million), and the other shareholders have contributed RMB1.0 million (approximately $0.1 million) to CBAK Suzhou through injection of a series of cash. In April 14, 2023, CBAK Power and Nanjing BFD Energy Technology Co., Ltd entered into shares transfer agreement to transfer the 90% shares of CBAK Suzhou owned by CBAK Power to Nanjing BFD, no gain or loss was incurred for the transfer. CBAK Suzhou is dormant as of the date of the report.

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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 $50,000,000. Pursuant to CBAK Energy’s articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Energy on or before November 20, 2022, the Company has extended the paid up time to January 31, 2054. Up to the date of this report, the Company has contributed $23,519,880 to CBAK Energy. CBAK Energy is dormant as of the date of the report.

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$1. BAK Asia Investments Limited is a holding company without any other business operations. BAK Investments principally engaged in investment holding.

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 $100,000,000. Pursuant to CBAK Nanjing’s articles of association and relevant PRC regulations, BAK Investments was required to contribute the capital to CBAK Nanjing on or before July 29, 2040. Up to the date of this report, the Company has contributed $55,289,915 to CBAK Nanjing. CBAK Nanjing principally engaged in investment holding.

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 RMB700,000,000 (approximately $101.3 million). Pursuant to Nanjing CBAK’s articles of association and relevant PRC regulations, CBAK Nanjing was required to contribute the capital to Nanjing CBAK on or before August 5, 2040. Up to the date of this report, the Company has contributed RMB352.5 million (approximately $51.0 million) to Nanjing CBAK. Nanjing CBAK principally engaged in development and manufacture of larger-sized cylindrical lithium batteries.

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 RMB50,000,000 (approximately $7.2 million). Up to the date of this report, the Company has contributed RMB37 million (approximately $5.4 million) to Nanjing Daxin. On March 6, 2023, Nanjing Daxin changed its name to Nanjing BFD Energy Technology Co., Ltd (“Nanjing BFD”). The Company has paid in full to Nanjing BFD through injection of a series of cash. Nanjing BFD principally engaged in development and manufacture of sodium-ion batteries.

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 $1.3 million (RMB9,000,000) to acquire 9.74% of the equity interests of DJY. CBAK Power has appointed one director to the Board of Directors of DJY. DJY is an unrelated third party of the Company engaging in researching and manufacturing of raw materials and equipment.

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 RMB30,000,000 (approximately $4.3 million). Pursuant to Jiangsu Daxin’s articles of association and relevant PRC regulations, Nanjing Daxin was required to contribute the capital to Jiangsu Daxin on or before July 30, 2061. Jiangsu Daxin was dissolved on December 22, 2023, no gain or loss resulted from the dissolution.

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 81.56% of registered equity interests (representing 75.57% of paid-up capital) of Hitrans (the “Acquisition”). The Acquisition was completed on November 26, 2021 (Note 12). After the completion of the Acquisition, Hitrans became a 81.56% registered equity interests (representing 75.57% of paid-up capital) owned subsidiary of the Company.

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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 RMB40 million to RMB44 million (approximately $6.4 million) and to accept an investment of RMB22 million (approximately $3.2 million) from Shaoxing Haiji Enterprise Management & Consulting Partnership (“Shaoxing Haiji”) and an investment of RMB18 million (approximately $2.6 million) from Mr. Haijun Wu (collectively “management shareholder”). Under the resolution, 10% of the investment injection (RMB4 million or $0.6 million) will be contributed towards Hitrans’s registered capital and the remaining 90% (RMB36 million or $5.2 million) will be treated as additional paid-in capital contribution of Hitrans. 25% of the investments from the management shareholder were required to be in place before August 15, 2022, 25% of the investments were required to be in place before December 31, 2022 and the 50% balance (RMB20 million) were required to be received June 30, 2024. As of December 31, 2023 and 2024, RMB10 million (approximately $1.4 million), representing the 25% of the investments were received. Shaoxing Haiji and Mr. Haijun Wu are currently in negotiations with other shareholders of Hitrans to extend the payment due date for the remaining unpaid 25% and 50% of the Management Shareholder Investments to May 31, 2029. CBAK Power equity interest in Hitrans was diluted to 74.15% (representing 77.57% of paid-up capital) after the above transaction.

On December 8, 2022, CBAK Power entered into equity interest transfer agreements with five individuals to disposal in aggregate 6.82% of Hitrans equity interests for a total consideration of RMB30,000,000 (approximately $4.3 million). The transaction was completed on December 30, 2022. CBAK Power equity interest in Hitrans was 67.33% (representing 69.12% of paid up-capital) after the disposal.

On March 26, 2024, CBAK New Energy entered into an agreement with CBAK Power to acquire the same 67.33% equity interest in Hitrans. The registration of this equity transfer with the local government was also completed on the same date. As a result of this transaction, CBAK New Energy has become the controlling shareholder of Hitrans, while CBAK Power no longer holds any equity interest in Hitrans. As of March 31, 2025, CBAK New Energy’s equity interests in Hitrans was 67.33% (representing 69.12% of paid-up capital).

On July 6, 2018, Guangdong Meidu Hitrans Resources Recycling Technology Co., Ltd. (“Guangdong Hitrans”) was established as a 80% owned subsidiary of Hitrans with a registered capital of RMB10 million (approximately $1.6 million). The remaining 20% registered equity interest was held by Shenzhen Baijun Technology Co., Ltd. Pursuant to Guangdong Hitrans’s articles of association, each shareholder is entitled to the right of the profit distribution or responsible for the loss according to its proportion to the capital contribution. Pursuant to Guangdong Hitrans’s articles of association and relevant PRC regulations, Hitrans was required to contribute the capital to Guangdong Hitrans on or before December 30, 2038. Up to the date of this report, Hitrans has contributed RMB1.72 million (approximately $0.3 million), and the other shareholder has contributed RMB0.25 million (approximately $0.04 million) to Guangdong Hitrans through injection of a series of cash. Guangdong Hitrans was established under the laws of the People’s Republic of China as a limited liability company on July 6, 2018 with a registered capital RMB10 million (approximately $1.5 million). Guangdong Hitrans is based in Dongguan, Guangdong Province, and is principally engaged in the business of resource recycling, waste processing, and R&D, manufacturing and sales of battery materials. Guangdong Hitrans was dissolved on January 30, 2024, no gain or loss resulted from the dissolution.

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 RMB5 million (approximately $0.8 million). Pursuant to Haisheng’s articles of association and relevant PRC regulations, Hitrans was required to contribute the capital to Haisheng on or before May 31, 2025. Up to the date of this report, Hitrans has contributed RMB3.5 million (approximately $0.5 million) to Haisheng. Haisheng principally engaged in the business of cathode materials trading.

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.

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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 RMB50 million (approximately $6.9 million). Pursuant to CBAK Shangqiu’s articles of association and relevant PRC regulations, CBAK Power was required to contribute the capital to Shangqiu on or before July 24, 2043. Up to the date of this report, CBAK Power has contributed RMB17.8 million ($2.5 million) to Shangqiu. CBAK Shangqiu principally engaged in manufacture and sales of lithium-ion batteries.

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 $2,000,000. Pursuant to CBAK Shenzhen’s articles of association and relevant PRC regulations, BAK Investments was required to contribute the capital to CBAK Shenzhen on or before October 17, 2029. Up to the date of this report, nil contribution was made by BAK Investments.

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 RMB50,000,000 (approximately $6.8 million). Pursuant to its articles of association and relevant PRC regulations, Hitrans was required to contribute the capital on or before January 2, 2030. Up to the date of this report, Hitrans has contributed RMB0.5 million ($6,886.5) to Yuanchuang. Yuanchuang is designated to engage in the business of manufacturing and marketing of NCM cathode materials for application in NCM lithium-ion batteries.

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 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, for gross proceeds of approximately $49.16 million, before deducting fees to the placement agent and other estimated offering expenses of $3.81 million payable by the Company. In addition, the placement agent for this transaction also received warrants (“Placement Agent Warrants”) for the purchase of up to 379,592 shares of the Company’s common stock at an exercise price of $6.475 per share exercisable for 36 months after 6 months from the issuance.

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 8,939,976 shares of common stock of the Company at a per share purchase price of $7.83. In addition, the Company 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. The Company 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 estimated offering expenses of $5.0 million payable by the Company. In addition, the placement agent for this transaction also received warrants (“Placement Agent Warrants”) for the purchase of up to 446,999 shares of the Company’s common stock at an exercise price of $9.204 per share exercisable for 36 months after 6 months from the issuance.

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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.

As of August 31, 2021, the Company had not received any notices from the investors to exercise Series B warrants. As of March 31, 2025, all of the warrants were expired.

As of March 31, 2025, the Company had $33.4 million bank loans and approximately $146.2 million of other current liabilities.

The Company is currently expanding its product lines and manufacturing capacity in its Dalian, Nanjing and Zhejiang 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 and significant short-term debt obligations maturing in less than one year as of March 31, 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.

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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. The table below presents the activity of the deferred batteries development and sales of batteries revenue during the three months ended March 31, 2024 and 2025, respectively:

|  | March 31, |
|  | 2024 |  |  | 2025 |
Balance at beginning of year |  | $ | 784,000 |  |  | $ | 4,831,774 |
Development fees collected/ deposits received |  |  | - |  |  |  | 2,723,692 |
Development and sales of batteries revenue recognized |  |  | - |  |  |  | (1,338,383 | )
Exchange realignment |  |  | - |  |  |  | 24,130 |
Balance at end of period |  | $ | 784,000 |  |  | $ | 6,241,213 |

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.

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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 also 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.

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 March 31, 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 March 31, 2025, substantially all of the Company’s short-term deposits amounting to $4,237,090 and $5,530,030, respectively, had been placed in reputable financial institutions in the PRC.

4. | Trade and Bills Receivable, net

Trade and bills receivable as of December 31, 2024 and March 31, 2025:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Trade receivable |  | $ | 28,569,823 |  |  | $ | 28,727,788 |
Less: Allowance for credit losses |  |  | (2,841,728 | ) |  |  | (2,577,221 | )
|  |  | 25,728,095 |  |  |  | 26,150,567 |
Bills receivable |  |  | 7,210,823 |  |  |  | 14,684,526 |
|  | $ | 32,938,918 |  |  | $ | 40,835,093 |

Included in trade and bills receivables are retention receivables of $71,207 and $71,587 as of December 31, 2024 and March 31, 2025. Retention receivables are interest-free and recoverable either at the end of the retention period of three to five years since the sales of the EV batteries or 200,000 km since the sales of the motor vehicles (whichever comes first).

An analysis of the allowance for the credit losses are as follows:

Balance as at January 1, 2025 |  | $ | 2,841,728 |
Current period provision, net |  |  | 11,539 |
Written-off |  |  | (290,727 | )
Foreign exchange adjustment |  |  | 14,681 |
Balance as at March 31, 2025 |  | $ | 2,577,221 |

14

5. | Inventories

Inventories as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Raw materials |  | $ | 3,538,167 |  |  | $ | 6,536,801 |
Work in progress |  |  | 5,034,330 |  |  |  | 8,412,573 |
Finished goods |  |  | 14,278,530 |  |  |  | 15,854,112 |
|  | $ | 22,851,027 |  |  | $ | 30,803,486 |

During the three months ended March 31, 2024 and 2025 write-downs of obsolete inventories to lower of cost or net realizable value of $538,883 and $934,424, respectively, were charged to cost of revenues.

6. | Prepayments and Other Receivables

Prepayments and other receivables as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
VAT recoverable |  | $ | 2,444,726 |  |  | $ | 2,898,590 |
Prepayments to suppliers |  |  | 7,992,672 |  |  |  | 6,806,532 |
Deposits |  |  | 83,754 |  |  |  | 83,496 |
Staff advances |  |  | 76,096 |  |  |  | 143,986 |
Prepaid operating expenses |  |  | 501,218 |  |  |  | 501,507 |
Interest receivable |  |  | 92,515 |  |  |  | 202,311 |
Receivables from customers for non-operating agency-based service |  |  | 8,845,759 |  |  |  | 7,321,568 |
Other receivables |  |  | 258,219 |  |  |  | 254,720 |
|  |  | 20,294,959 |  |  |  | 18,212,710 |
Less: Allowance for credit losses |  |  | (289,993 | ) |  |  | (221,445 | )
|  | $ | 20,004,966 |  |  | $ | 17,991,265 |

An analysis of the allowance for credit losses are as follows:

Balance as at January 1, 2025 |  | $ | 289,993 |
Current period provision, net |  |  | (69,934 | )
Foreign exchange adjustment |  |  | 1,386 |
Balance as of March 31, 2025 |  | $ | 221,445 |

7. | Property, Plant and Equipment, net

Property, plant and equipment as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, 2024 |  |  | March 31, 2025 |
Buildings |  | $ | 44,590,499 |  |  | $ | 44,850,015 |
Leasehold improvements |  |  | 8,058,360 |  |  |  | 8,234,169 |
Machinery and equipment |  |  | 84,267,956 |  |  |  | 82,521,157 |
Office equipment |  |  | 2,235,605 |  |  |  | 2,085,283 |
Motor vehicles |  |  | 803,560 |  |  |  | 755,565 |
|  |  | 139,955,980 |  |  |  | 138,446,189 |
Impairment |  |  | (16,755,682 | ) |  |  | (16,842,225 | )
Accumulated depreciation |  |  | (37,713,469 | ) |  |  | (37,320,281 | )
Carrying amount |  | $ | 85,486,829 |  |  | $ | 84,283,683 |

15

During the three months ended March 31, 2024 and 2025, the Company incurred depreciation expense of $2,542,062 and $2,068,756, respectively.

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 no impairment during the three months ended March 31, 2024 and 2025.

8. | Construction in Progress

Construction in progress as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Construction in progress |  | $ | 29,819,111 |  |  | $ | 34,066,477 |
Prepayment for acquisition of property, plant and equipment |  |  | 12,707,748 |  |  |  | 17,460,966 |
Carrying amount |  | $ | 42,526,859 |  |  | $ | 51,527,443 |

Construction in progress as of December 31, 2024 and March 31, 2025 mainly comprised capital expenditures for the construction of the facilities and production lines of CBAK Power, Nanjing CBAK and Hitrans.

For the three months ended March 31, 2024 and 2025, the Company capitalized interest of $195,278 and $91,289, respectively, to the cost of construction in progress.

9. | Long-term investments, net

Long-term investments as of December 31, 2024 and March 31, 2025, consisted of the following:

|  | December 31, 2024 |  |  | March 31, 2025 |
Investments in equity method investees |  | $ | 1,625,793 |  |  | $ | 1,689,706 |
Investments in non-marketable equity |  |  | 620,701 |  |  |  | 624,019 |
|  | $ | 2,246,494 |  |  | $ | 2,313,725 |

The following is the carrying value of the long-term investments:

|  | December 31, 2024 |  |  | March 31, 2025 |
|  | Carrying Amount |  |  | Economic Interest |  |  | Carrying Amount |  |  | Economic Interest |
Investments in equity method investees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (b) |  | $ | 1,625,793 |  |  |  | 26 | % |  | $ | 1,689,706 |  |  |  | 26 | %
Investments in non-marketable equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hunan DJY Technology Co., Ltd |  | $ | 620,701 |  |  |  |  |  |  | $ | 624,019 |  |  |  |  |

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(a) | Investments in Guangxi Guiwu CBAK New Energy Technology Co., Ltd

Balance as of January 1, 2024 |  |  | 254,475 |
Proceeds from disposal of investment |  |  | (278,114 | )
Loss from investment |  |  | (18,777 | )
Profit from disposal |  |  | 45,749 |
Foreign exchange adjustment |  |  | (3,333 | )
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 20%, 60% and 20% equity interests and voting rights, respectively. Guangxi Guiwu engages in the business of recycling power batteries. The Company applies the equity method of accounting to account for the equity investments in common stock, over which it has significant influence but does not own a majority equity interest or otherwise control. Pursuant to the Company’s articles of association and relevant PRC regulations, each party was required to contribute the capital on or before December 31, 2023.

On April 19, 2024, NJ CABK entered into an equity transfer agreement with Chilwee Group Co., Ltd, an unrelated third party to the Company to disposal its equity interest in Guangxi Guiwu at consideration of RMB2 million (approximately $0.3 million). NJ CBAK recorded a gain on disposal of $45,749.

For the three months ended March 31, 2024, share of loss from the above equity investment was $18,824.

(b) | Investments in Zhejiang Shengyang Renewable Resources Technology Co., Ltd.

Balance as at January 1, 2024 |  | $ | 1,672,136 |
Profit (loss) from investment |  |  | - |
Foreign exchange adjustment |  |  | (46,343 | )
Balance as of December 31, 2024 |  | $ | 1,625,793 |
Profit from investment |  |  | 55,125 |
Foreign exchange adjustment |  |  | 8,788 |
Balance as of March 31, 2025 |  | $ | 1,689,706 |

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 26% equity interest in Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (“Zhejiang Shengyang”) from Mr. Xu, an individual who currently holds 97% of Zhejiang Shengyang, for a price of RMB28.6 million (approximately $3.9 million) (the “Initial Acquisition”). Hitrans shall pay the Initial Acquisition price in two (2) installments as follows: (i) 50% of the price due within five business days following the execution of the Equity Transfer Contract and satisfaction of other conditions precedent set forth in the same; and (ii) the remaining 50% of the price due within five business days following Mr. Xu successful transfer to Hitrans of the 26% equity interest in Zhejiang Shengyang. Within fifteen business days after Hitrans has paid 50% of the price, or RMB14.3 million, the parties shall complete the registration of equity change with the local governmental authorities. Zhejiang Shengyang is a material suppliers of Hitrans since June 2020. On November 6, 2023, Hitrans completed the registration of 26% equity interest of Zhejiang Shengyang. The Company recorded an impairment loss of $2.4 million (RMB16.7 million) from the investment to Zhejinag Shengyang for the year ended December 31, 2023. The Company recorded share of income of nil and $55,125 from the investment in Zhejiang Shengyang for the three months ended March 31, 2024 and 2025, respectively.

And within three months following the Initial Acquisition, Mr. Xu, an related third party shall transfer an additional 44% equity interest in Zhejiang Shengyang to Hitrans at the same price per share as that of the Initial Acquisition (the “Follow-on Acquisition”). The parties shall enter into another agreement to detail the terms of the Follow-on Acquisition. As of the date of this report, the Follow-on Acquisition was not completed. The management team of Hitrans is currently in negotiations with Mr. Xu regarding a potential postponement of the payment and equity transfer.

17

Investments in non-marketable equity

|  | December 31, 2024 |  |  | March 31, 2025 |
Cost |  | $ | 1,232,978 |  |  | $ | 1,239,567 |
Impairment |  |  | (612,277 | ) |  |  | (615,548 | )
Carrying amount |  | $ | 620,701 |  |  | $ | 624,019 |

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 $1.40 million (RMB9,000,000) to acquire 9.74% of the equity interests of DJY. CBAK Power along with other three new investors has appointed one director on behalf of the Investors to the Board of Directors of DJY. DJY is unrelated third party of the Company engaging in in research and development, production and sales of products and services to lithium battery positive cathode materials producers, including the raw materials, fine ceramics, equipment and industrial engineering.

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 RMB5 million (approximately $0.7 million), in which each party holding 10%, 60% and 30% equity interests of CBAK Education, respectively. The investment is for training skillful workforce for Nanjing CBAK. CBAK Education commenced its operation in 2023, nil capital contribution was made by Nanjing CBAK as of the report date.

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. No impairment was recorded on the non-marketable equity securities for the three months ended March 31, 2024 and 2025.

10. | Lease

(a) | Prepaid land use rights

|  | Prepaid land |
|  | lease payments |
Balance as of January 1, 2024 |  | $ | 11,712,704 |
Amortization charge for the year |  |  | (316,811 | )
Foreign exchange adjustment |  |  | (319,920 | )
Balance as of December 31, 2024 |  |  | 11,075,973 |
Amortization charge for the period |  |  | (78,305 | )
Foreign exchange adjustment |  |  | 59,047 |
Balance as of March 31, 2025 |  | $ | 11,056,715 |

In August 2014 and November 2021, the Company acquired land use rights to build a factory of the Company in Dalian and Zhejiang, PRC.

18

Lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 36 to 50 years, and no ongoing payments will be made under the terms of these land leases.

Amortization expenses of the prepaid land use rights were $79,399 and $78,305 for the three months ended March 31, 2024 and 2025, respectively.

No impairment loss was made to the carrying amounts of the prepaid land use right for the three months ended March 31, 2024 and 2025.

(b) | Operating lease

In April 2018, Hitrans entered into a lease agreement for staff quarters spaces in Zhejiang with a five year term, commencing on May 1, 2018 and expiring on April 30, 2023. The monthly rental payment is approximately RMB18,000 ($2,605) per month. In 2018, lump sum payments were made to landlord for the rental of staff quarter spaces and no ongoing payments will be made under the terms of these leases.

On April 6, 2021, Nanjing CBAK entered into a lease agreement for warehouse space in Nanjing with a three year term, commencing on April 15, 2021 and expiring on April 14, 2024. The monthly rental payment is approximately RMB97,743 ($14,146) per month. The lease was renewed for one year with a monthly rental of RMB86,913 (approximately $11,907) to May 14, 2025.

On June 1, 2021, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and oxygen, commencing on July 1, 2021. The monthly rental payment is approximately RMB5,310 ($773) per month.

On December 9, 2021, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a three year term, commencing on December 10, 2021 and expiring on December 9, 2024. The monthly rental payment is approximately RMB10,400 ($1,514) per month for the first year, RMB10,608 ($1,544) and RMB 10,820 ($1,575) per month from the second year and third year, respectively.

On March 1, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a three year term, commencing on March 1, 2022 and expiring on February 28, 2027. The monthly rental payment is approximately RMB15,840 ($2,306) per month for the first year, with 2% increase per year.

On August 1, 2022, Hitrans entered into a lease agreement for warehouse spaces in Zhejiang with a one and half years term, commencing on August 1, 2022 and expiring on January 31, 2024. The monthly rental payment is RMB60,394 ($8,792) per month.

On October 20, 2022, CBAK Power entered into a lease agreement for staff quarters spaces in Dalian with a five year term, commencing on October 20, 2022 and expiring on October 19, 2025. The monthly rental payment is RMB61,905 ($9,012) per month.

On December 20, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a five year term commencing on December 20, 2022 and expiring on December 19, 2027. The monthly rental payment is RMB52,000 ($7,570) per month for the first year, with 2% increase per year.

On December 30, 2022, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and oxygen to December 29, 2027. The monthly rental payment is approximately RMB7,265 ($1,058) per month. The lease was early terminated in June 2024.

On April 20, 2023, Hitrans entered into another lease agreement for extra staff quarters spaces in Zhejiang with a three year term commencing on May 1, 2023 and expiring on April 30, 2026. The monthly rental payment is RMB25,688 ($3,519) per month. On July 1, 2024, Hitrans entered into an amendment to early terminate the lease and entered into a new lease for a period of two years from July 1, 2024 to June 30, 2026. The monthly rental payment is RMB12,844 ($1,760) per month.

19

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 RMB160,743 ($22,649) per month. The lease was renewed for three years to August 31, 2027 with the same monthly rental.

Shangqiu entered into a lease agreement for staff quarters spaces in Shangqiu with a six-year term commencing on October 1, 2023 and expiring on September 30, 2029. The monthly rental payment is approximately RMB11,400 ($1,584) per month. On January 1, 2025, Shangqiu entered into an amendment to reduce the leased space and shorten the lease term to December 31, 2025. The new monthly rental is RMB7,717 ($1,003) per month.

The Company entered into a lease agreement for manufacturing and factory spaces in Shangqiu with a terms of six years, commencing on January 1, 2024 to December 31, 2029. The monthly rental payment is RMB265,487 ($36,769) per month.

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 RMB19,309 ($2,674) per month.

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 RMB1,062 ($146) per month.

The Company entered into a lease agreement for staff quarters spaces in Nanjing from March 1, 2024 to February 28, 2026. The monthly rental is RMB22,155 ($3,081) per month. On March 1, 2025, the month rental was reduced to RMB19,936 ($2,740) per month.

The Company has entered into a lease agreement for staff quarters spaces in Shangqiu from May 16, 2024 to December 31, 2029 for a monthly rental of RMB19,404 ($2,765).

The Company entered into another lease for staff quarters spaces in Nanjing from June 1, 2024 to May 31, 2025. The monthly rental payment is RMB39,633 ($5,511) per month. The Company have the intention to extend the lease on its expiration.

Operating lease expenses for the three months ended March 31, 2024 and 2025 for the capitation agreement was as follows:

|  | March 31, 2024 |  |  | March 31, 2025 |
Operating lease cost – straight line |  | $ | 311,260 |  |  | $ | 308,290 |

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2025:

|  | Operating leases |
Remainder of 2025 |  | $ | 1,256,655 |
2026 |  |  | 881,094 |
2027 |  |  | 485,967 |
2028 |  |  | 451,230 |
2029 |  |  | 448,620 |
Thereafter |  |  | 438,784 |
Total undiscounted cash flows |  |  | 3,962,350 |
Less: imputed interest |  |  | (405,118 | )
Present value of lease liabilities |  | $ | 3,557,232 |

20

Lease term and discount rate:

|  | December 31, 2024 |  |  | March 31, 2025 |
Weighted-average remaining lease term (years) |  |  |  |  |  |
Land use rights |  |  | 35.9 |  |  |  | 35.7 |
Operating leases |  |  | 4.16 |  |  |  | 3.98 |
Weighted-average discount rate |  |  |  |  |  |  |  |
Land use rights |  |  | Nil |  |  |  | Nil |
Operating lease |  |  | 4.33 | % |  |  | 4.32 | %
Finance lease |  |  | 2.9 | % |  |  | Nil |

Supplemental cash flow information related to leases where the Company was the lessee for the three months ended March 31, 2024 wand 2025 was as follows:

|  | March 31, 2024 |  |  | March 31, 2025 |
Operating cash outflows from operating assets |  | $ | 69,957 |  |  | $ | 137,184 |

11. | Intangible Assets, net

Intangible assets as of December 31, 2024 and March 31, 2025 consisted of the followings:

|  | December 31, 2024 |  |  | March 31, 2025 |
Computer software at cost |  | $ | 169,054 |  |  | $ | 169,959 |
Sewage discharge permit |  |  | 1,667,907 |  |  |  | 1,676,820 |
|  |  | 1,836,961 |  |  |  | 1,846,779 |
Accumulated amortization |  |  | (1,453,999 | ) |  |  | (1,578,381 | )
|  | $ | 382,962 |  |  | $ | 268,398 |

Amortization expenses were $117,845 and $116,117 for the three months ended March 31, 2024 and 2025, respectively.

Total future amortization expenses for finite-lived intangible assets were estimated as follows:

Remainder of 2025 |  | $ | 199,149 |
2026 |  |  | 16,277 |
2027 |  |  | 10,469 |
2028 |  |  | 8,907 |
2029 |  |  | 8,512 |
Thereafter |  |  | 25,084 |
Total |  | $ | 268,398 |

No impairment loss was made to the carrying amounts of the intangible assets for the three months ended March 31, 2024 and 2025.

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 81.56% of registered equity interests (or representing 75.57% of paid-up capital) of Hitrans (the “Acquisition Agreement”). The transfer of 81.56% registered equity interests (representing 75.57% of paid-up capital) of Zhejiang Hitrans to CBAK Power has been registered with the local government and acquisition was completed on November 26, 2021.

Upon the closing of the Acquisition, CBAK Power became the largest shareholder of Hitrans holding 81.56% of the Company’s registered equity interests (representing 75.57% of paid-up capital of the Company). As required by applicable Chinese laws, CBAK Power and Management Shareholders are obliged to make capital contributions of RMB11.1 million ($1.7 million) and RMB0.4 million ($0.06 million), respectively, for the unpaid portion of Hitrans’s registered capital in accordance with the articles of association of Hitrans.

21

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. The following table summarizes the estimated aggregate fair values of the assets acquired and liabilities assumed as of the closing date, November 26, 2021.

Cash and bank |  | $ | 7,323,654 |
Debts product |  |  | 3,144 |
Trade and bills receivable, net |  |  | 37,759,688 |
Inventories |  |  | 13,616,922 |
Prepayments and other receivables |  |  | 1,384,029 |
Income tax recoverable |  |  | 47,138 |
Amount due from trustee |  |  | 11,788,931 |
Property, plant and equipment, net |  |  | 21,190,890 |
Construction in progress |  |  | 2,502,757 |
Intangible assets, net |  |  | 1,957,187 |
Prepaid land use rights, noncurrent |  |  | 6,276,898 |
Leased assets, net |  |  | 48,394 |
Deferred tax assets |  |  | 1,715,998 |
Short term bank loan |  |  | (8,802,402 | )
Other short term loans – CBAK Power |  |  | (20,597,522 | )
Trade accounts and bills payable |  |  | (38,044,776 | )
Accrued expenses and other payables |  |  | (7,439,338 | )
Deferred government grants |  |  | (290,794 | )
Land appreciation tax |  |  | (464,162 | )
Deferred tax liabilities |  |  | (333,824 | )
Net assets |  |  | 29,642,812 |
Less: Waiver of dividend payable |  |  | 1,250,181 |
Total net assets acquired |  |  | 30,892,993 |
Non-controlling interest (24.43%) |  |  | (7,547,158 | )
Goodwill |  |  | 1,606,518 |
Total identifiable net assets |  |  | 24,952,353 |

The components of the consideration transferred to effect the Acquisition are as follows:

|  | RMB |  |  | USD |
Cash consideration for 60% registered equity interest (representing 54.39% of paid-up capital) of Hitrans from Meidu Graphene |  |  | 118,000,000 |  |  |  | 18,547,918 |
Cash consideration for 21.56% registered equity interest (representing 21.18% of paid-up capital) of Hitrans from Hitrans management |  |  | 40,744,376 |  |  |  | 6,404,435 |
Total Purchase Consideration |  |  | 158,744,376 |  |  |  | 24,952,353 |

The transaction resulted in a purchase price allocation of $1,606,518 to goodwill, representing the financial, strategic and operational value of the transaction to the Company. Goodwill is attributed to the premium that the Company paid to obtain the value of the business of Hitrans and the synergies expected from the combined operations of Hitrans and the Company, the assembled workforce and their knowledge and experience in provision of raw materials used in manufacturing of lithium batteries. The total amount of the goodwill acquired is not deductible for tax purposes and was fully impaired as of December 31, 2023.

| 13. | Deposit paid for acquisition of long-term investments

Deposit paid for acquisition of long-term investments as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Investments in non-marketable equity |  | $ | 15,864,318 |  |  | $ | 15,949,095 |

22

On September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. (“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 (5%) equity interest in Shenzhen BAK Power Battery Co., Ltd. (“BAK SZ”) to Nanjing CBAK for a purchase price of RMB260 million (approximately $35.7 million) (the “Target Equity”). Pursuant to the terms of the Equity Transfer Agreement, Nanjing CBAK will pay the Target Equity in three (3) installments as follows: (i) RMB40 million (approximately $5.5 million) due prior to December 31, 2023; (ii) RMB90 million (approximately $12.4 million) due prior to September 30, 2024, and (iii) the remaining Target Equity balance of RMB130 million (approximately $17.8 million) due following SZ BAK’s successful transfer to Nanjing CBAK of the five percent (5%) equity interest in BAK SZ. Upon Nanjing CBAK having paid RMB130 million of the Target Equity, the parties shall work together to complete the registration of equity change with the local governmental authorities. The Company has contributed RMB115.8 million (approximately $15.9 million) as of March 31, 2025 and up to the date of this report. The Equity Transfer Agreement may be terminated in writing through negotiation by all parties and the deposit paid was refundable on demand. The equity transfer process take longer than expected. Nanjing CBAK and SZ BAK have entered into supplemental agreement on March 7, 2025 to extend the transaction period.

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 March 31, 2025 consisted of the followings:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Trade payable |  | $ | 26,317,312 |  |  | $ | 35,298,012 |
Bills payable |  |  |  |  |  |  |  |
– Bank acceptance bills |  |  | 57,297,394 |  |  |  | 56,985,326 |
– Letter of credit |  |  | 1,109,680 |  |  |  | 1,115,610 |
|  | $ | 84,724,386 |  |  | $ | 93,398,948 |

All the bills payable are of trading nature and will mature within one year from the issue date.

The bank acceptance bills were pledged by:

| (i) | the Company’s pledged deposits (Note 2) and term deposits (Note 3) ;

| (ii) | $1.4 million and $8.4 million of the Company’s bills receivable as of December 31, 2024 and March 31, 2025, respectively (Note 4).

15. | Loans

Bank loans:

Bank borrowings as of December 31, 2024 and March 31, 2025 consisted of the followings:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Short-term bank borrowings |  | $ | 26,087,350 |  |  | $ | 29,301,628 |
Long-term bank borrowings |  |  | - |  |  |  | 4,131,890 |
|  | $ | 26,087,350 |  |  | $ | 33,433,518 |

23

In January 2023, the Company 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, the Company 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 the Company’s land use rights and buildings. Under the facility, the Company has borrowed RMB159.9 million (approximately $21.9 million) and RMB153.7 million (approximately $21.2 million) as of December 31, 2024 and March 31, 2025, respectively, bearing interest at 3.45% per annum expiring through April 2025 to March 2026.

On January 17, 2022, the Company 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. The Company borrowed RMB10 million (approximately $1.4 million) on January 20, 2022 for a term until January 16, 2023. The Company repaid RMB10 million (approximately $1.4 million) early on January 5, 2023. On January 6, 2023, the Company 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. The Company repaid the loan on January 4, 2024.

On February 9, 2022, the Company 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. The Company borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January 28, 2023. The Company repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, the Company 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. The Company repaid the loan on January 13, 2024.

On April 28, 2022, the Company 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, the Company 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. The Company repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, the Company 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. The Company repaid the loan on April 19, 2024.

The Company 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. The Company borrowed RMB9 million (approximately $1.3 million ) on September 27, 2023 for a term until August 31, 2024. The Company repaid the loan on August 31, 2024.

On November 8, 2022, the Company entered into a short-term loan agreement with China CITIC Bank Shaoxing Branch to August 9, 2023 with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 4.35% per annum. The Company borrowed RMB10 million (approximately $1.4 million) on the same date. The Company has repaid RMB5 million (approximately $0.7 million), RMB0.2 million (approximately $0.1 million) and RMB4.8, million (approximately $0.7 million) on November 16, 2022, December 27, 2022 and August 9, 2023, respectively. The Company entered into another short-term loan agreement with China CITIC Bank Shaoxing Branch for a one-year short-term loan agreement with a maximum amount of RMB0.2 million (approximately $0.1 million) for December 27, 2022 to December 27, 2023, bearing interest rate at 4.20% per annum. The Company entered into another 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. The Company repaid the loan on May 2, 2024.

24

On January 7, 2023, the Company 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 New Energy (Nanjing) Co., Ltd. The Company 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. The Company repaid the above early on June 15, 2023. On June 27, 2023, the Company 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. The Company 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 New Energy (Nanjing) Co., Ltd. The Company repaid the loan on June 26, 2024.

On March 29, 2023, the Company 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. The Company borrowed RMB5 million (approximately $0.7 million) on the same date. The loan was secured by the Company’s buildings in Dalian. The Company repaid RMB 5 million (approximately $0.7 million) on March 27, 2024. On March 28, 2024, the Company borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing interest rate at 3.45% per annum. The Company early repaid the loan on August 21, 2024.

On April 19, 2023, the Company 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. The Company 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. The Company repaid the loan on April 9, 2024.

On July 31, 2023, the Company 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, the Company borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum. The Company repaid the loan on July 22, 2024

On August 3, 2023, the Company 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. The Company borrowed RMB10 million (approximately $1.4 million) on September 27, 2023. The loan was secured by the Company’s buildings in Dalian. The Company repaid the loan on August 2, 2024.

On January 24, 2024, the Company 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. The Company borrowed RMB5 million (approximately $0.7 million) on the same date. The Company early repaid the loan on September 27, 2024.

On March 26, 2024, the Company 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. The Company borrowed RMB5 million (approximately $0.7 million) on the same date. The Company early repaid the loan on September 27, 2024.

25

On April 9, 2024, the Company 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. The Company borrowed RMB5.5 million (approximately $0.8 million) on the same date. The Company early repaid the loan on January 24, 2025.

On June 24, 2024, the Company 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 facility was guaranteed by the Company’s former CEO, Mr, Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, the Company borrowed RMB10 million (approximately $1.4 million) on June 24, 2024, bearing interest rate at 3.0% per annum. The Company early repaid the loan on August 23, 2024.

On September 29, 2024, the Company 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. The Company borrowed RMB15 million (approximately $2.1 million) on the same date.

On December 31, 2024, the Company 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. The Company borrowed RMB10 million (approximately $1.4 million) on the same date.

On January 17, 2025, the Company 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 the Company. The Company has borrowed RMB40 million (approximately $5.5 million) as of March 31, 2025, bearing interest rate at 2.85%-3.6% per annum, of which RMB10 million (approximately $1.4 million) repayable on January 16, 2026 and the remaining RMB30 million (approximately $4.1 million) repayable on September 25, 2027.

On January 20, 2025, the Company 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. As of March 31, 2025, the Company has borrowed RMB10 million (approximately $1.4 million) under this loan agreement.

On February 19, 2025, the Company 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. NJ CBAK borrowed RMB4 million (approximately $0.6 million) on February 20, 2025 for a term until February 19, 2026, bearing interest rate at 2.98% per annum.

On February 25, 2025, the Company 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. The Company borrowed RMB10 million (approximately $1.4 million) on the same date.

The Company obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB390 million (approximately $53.7 million) with the term from June 28, 2023 to April 29, 2025. The Company borrowed a series of acceptance bills totaling RMB112.8 million (approximately $15.5 million) for various terms expiring through April to September 2025, which was secured by the Company’s pledged deposit of RMB74.8 million (approximately $10.3 million) (note 2), term deposit of RMB24.7 million (approximately $3.3 million) (note 3) and the Company’s bills receivables of RMB14.0 million (approximately $1.9 million) (note 4).

The Company obtained another banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB300 million (approximately $41.3 million) with the term from December 14, 2023 to April 29, 2025. The Company borrowed a series of acceptance bills totaling RMB100.0 million (approximately $13.8 million) for various terms expiring through April to September 2025, which was secured by the Company’s pledged deposit of RMB63.2 million (approximately $8.7 million) (note 2), term deposit of RMB2.2 million (approximately $0.3 million (note 3) and the Company’s bills receivables of RMB34.9 million (approximately $4.8 million) (note 4).

26

The Company borrowed a series of acceptance bills from Bank of Nanjing totaling RMB57.6 million (approximately $7.9 million) for various terms expiring through May to September 2025, which was secured by the Company’s pledged deposit of RMB45.0 million (approximately $6.1 million) (note 2) and term deposit of RMB13.3 million (approximately $1. million) (note 3).

The Company borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shangyu Branch totaling RMB70.2 million (approximately $9.7 million) for various terms expiring through April to September 2025, which was secured by the Company’s pledged deposit of RMB59.3 million (approximately $8.2 million) (note 2) and the Company’s bills receivables of RMB11.8 million (approximately $1.5 million) (note 4).

The Company borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB73.0 million (approximately $10.1 million) expiring through April to September 2025, which was secured by the Company’s pledged deposit of RMB73.0 million (approximately $10.1 million) (note 2).

The facilities were also secured by the Company’s assets with the following carrying amounts:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Pledged deposits (note 2) |  | $ | 54,061,642 |  |  | $ | 43,435,383 |
Short-term deposits (note 3) |  |  | 2,000,000 |  |  |  | 5,530,030 |
Bills receivables (note 4) |  |  | 1,395,874 |  |  |  | 8,355,747 |
Right-of-use assets (note 10) |  |  | 4,982,972 |  |  |  | 4,969,842 |
Buildings |  |  | 3,818,112 |  |  |  | 3,790,807 |
Construction-in-progress |  |  | - |  |  |  | 18,914,806 |
|  | $ | 66,258,600 |  |  | $ | 84,996,615 |

As of March 31, 2025, the Company had no unutilized committed banking facilities.

During the three months ended March 31, 2024 and 2025, interest of $296,866 and $246,501 were incurred on the Company’s bank borrowings, respectively.

Other short-term loans:

Other short-term loans as of December 31, 2024 and March 31, 2025 consisted of the following:

|  |  |  | December 31, |  |  | March 31, |
|  | Note |  | 2024 |  |  | 2025 |
Advance from related parties |  |  |  |  |  |  |  |
– Mr. Xiangqian Li, the Company’s Former CEO |  | (a) |  | $ | 100,000 |  |  | $ | 100,000 |
– Mr. Yunfei Li, the Company’s Former CEO |  | (b) |  |  | 158,889 |  |  |  | 158,668 |
|  |  |  |  | 258,889 |  |  |  | 258,668 |
Advances from unrelated third party |  |  |  |  |  |  |  |  |  |
– Mr. Wenwu Yu |  | (c) |  |  | 1,347 |  |  |  | 1,354 |
– Ms. Longqian Peng |  | (c) |  |  | 6,980 |  |  |  | 7,018 |
– Suzhou Zhengyuanwei Needle Ce Co., Ltd |  | (d) |  |  | 68,499 |  |  |  | 68,865 |
|  |  |  |  | 76,826 |  |  |  | 77,237 |
|  |  |  | $ | 335,715 |  |  | $ | 335,905 |

(a) | Advances from Mr. Xiangqian Li, the Company’s former CEO, was unsecured, non-interest bearing and repayable on demand.

(b) | Advances from Mr. Yunfei Li, the Company’s former CEO, was unsecured, non-interest bearing and repayable on demand.

(c) | Advances from unrelated third parties were unsecured, non-interest bearing and repayable on demand.

(d) | In 2019, the Company entered into a short term loan agreement with Suzhou Zhengyuanwei Needle Ce Co., Ltd, an unrelated party to loan RMB0.6 million (approximately $0.1 million), bearing annual interest rate of 12%. As of March 31, 2025, loan amount of RMB0.5 million ($68,865) remained outstanding.

During the three months ended March 31, 2024 and 2025, interest of $2,114 and $2,062 were incurred on the Company’s borrowings from unrelated parties, respectively.

27

16. | Accrued Expenses and Other Payables

Accrued expenses and other payables as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Construction costs payable |  | $ | 11,570,384 |  |  | $ | 9,018,797 |
Equipment purchase payable |  |  | 10,871,081 |  |  |  | 10,015,861 |
Liquidated damages* |  |  | 1,210,119 |  |  |  | 1,210,119 |
Accrued staff costs |  |  | 6,253,168 |  |  |  | 5,892,613 |
Customer deposits |  |  | 6,856,137 |  |  |  | 7,766,116 |
Deferred revenue |  |  | 4,831,774 |  |  |  | 6,241,213 |
Accrued expenses |  |  | 2,059,252 |  |  |  | 2,072,634 |
Interest payables |  |  | 69,927 |  |  |  | 74,095 |
Other tax payables |  |  | 1,175,339 |  |  |  | 831,208 |
Dividend payable to non-controlling interest to Hitrans |  |  | 1,221,915 |  |  |  | 1,228,445 |
Payables to suppliers for non-operating agency-based service |  |  | 11,981,065 |  |  |  | 5,833,023 |
Other payable |  |  | 185,474 |  |  |  | 121,249 |
|  | $ | 58,285,635 |  |  | $ | 50,305,373 |

* | On August 15, 2006, the SEC declared effective a post-effective amendment that the Company had filed on August 4, 2006, terminating the effectiveness of a resale registration statement on Form SB-2 that had been filed pursuant to a registration rights agreement with certain shareholders to register the resale of shares held by those shareholders. The Company subsequently filed Form S-1 for these shareholders. On December 8, 2006, the Company filed its Annual Report on Form 10-K for the year ended September 30, 2006 (the “2006 Form 10-K”). After the filing of the 2006 Form 10-K, the Company’s previously filed registration statement on Form S-1 was no longer available for resale by the selling shareholders whose shares were included in such Form S-1. Under the registration rights agreement, those selling shareholders became eligible for liquidated damages from the Company relating to the above two events totaling approximately $1,051,000. As of December 31, 2024 and March 31, 2025, no liquidated damages relating to both events have been paid.

On November 9, 2007, the Company completed a private placement for the gross proceeds to the Company of $13,650,000 by selling 3,500,000 shares of common stock at the price of $3.90 per share. Roth Capital Partners, LLC acted as the Company’s exclusive financial advisor and placement agent in connection with the private placement and received a cash fee of $819,000. The Company may have become liable for liquidated damages to certain shareholders whose shares were included in a resale registration statement on Form S-3 that the Company filed pursuant to a registration rights agreement that the Company entered into with such shareholders in November 2007. Under the registration rights agreement, among other things, if a registration statement filed pursuant thereto was not declared effective by the SEC by the 100th calendar day after the closing of the Company’s private placement on November 9, 2007, or the “Effectiveness Deadline”, then the Company would be liable to pay partial liquidated damages to each such investor of (a) 1.5% of the aggregate purchase price paid by such investor for the shares it purchased on the one month anniversary of the Effectiveness Deadline; (b) an additional 1.5% of the aggregate purchase price paid by such investor every thirtieth day thereafter (pro rated for periods totaling less than thirty days) until the earliest of the effectiveness of the registration statement, the ten-month anniversary of the Effectiveness Deadline and the time that the Company is no longer required to keep such resale registration statement effective because either such shareholders have sold all of their shares or such shareholders may sell their shares pursuant to Rule 144 without volume limitations; and (c) 0.5% of the aggregate purchase price paid by such investor for the shares it purchased in the Company’s November 2007 private placement on each of the following dates: the ten-month anniversary of the Effectiveness Deadline and every thirtieth day thereafter (prorated for periods totaling less than thirty days), until the earlier of the effectiveness of the registration statement and the time that the Company no longer is required to keep such resale registration statement effective because either such shareholders have sold all of their shares or such shareholders may sell their shares pursuant to Rule 144 without volume limitations. Such liquidated damages would bear interest at the rate of 1% per month (prorated for partial months) until paid in full.

28

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 $561,174 for the November 2007 registration rights agreement. As of December 31, 2024 and March 31, 2025, the Company had settled the liquidated damages with all the investors and the remaining provision of approximately $159,000 was included in other payables and accruals.

17. | Balances and Transactions with Related Parties

The principal related parties with which the Company had transactions during the years presented are as follows:

Name of Entity or Individual |  | Relationship with the Company
New Era Group Zhejiang New Energy Materials Co., Ltd. |  | Shareholder of company’s subsidiary
Zhengzhou BAK Battery Co., Ltd |  | Note a
Shenzhen BAK Battery Co., Ltd (“SZ BAK”) |  | Former subsidiary and refer to Note b
Shenzhen BAK Power Battery Co., Ltd (“BAK SZ”) |  | Former subsidiary and refer to Note b
Zhejiang Shengyang Renewable Resources Technology Co., Ltd. |  | Note c
Fuzhou BAK Battery Co., Ltd |  | Note d
Zhengzhou BAK Electronics Co., Ltd |  | Note e
Zhengzhou BAK New Energy Vehicle Co., Ltd |  | Note f

(a) | Mr. Xiangqian Li, the Company’s former CEO, is a director of Zhengzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary of BAK SZ.

(b) | Mr. Xiangqian Li, the Company’s former CEO, is a director of Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd. On September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. (“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 (5%) equity interest in Shenzhen BAK Power Battery Co., Ltd. (“BAK SZ”) to Nanjing CBAK for a purchase price of RMB260 million (approximately $35.7 million) (note 14).

(c) | On 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 26% equity interest in Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (“Zhejiang Shengyang”) from Mr. Xu, an individual who currently holds 97% of Zhejiang Shengyang, for a price of RMB28.6 million (approximately $3.9 million) (the “Initial Acquisition”). Neither Mr. Xu, nor Zhejiang Shengyang is related to the Company.

(d) | Zhengzhou BAK Battery Co., Ltd has 51% equity interest in Fuzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary of BAK SZ.

(e) | Mr. Xiangqian Li, the Company’s former CEO, is a director of BAK SZ, which has 95% equity interests in Zhengzhou BAK Electronics Co., Ltd.

(f) | Shenzhen BAK Battery Co., Ltd was the former shareholder of Zhengzhou BAK New Energy Vehicle Co., Ltd to April 10, 2023.

29

Related party transactions

The Company entered into the following significant related party transactions:

|  | For the three months ended March 31, 2024 |  |  | For the three months ended March 31, 2025 |
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd |  | $ | 2,572,553 |  |  | $ | 4,132 |
Purchase of batteries from Fuzhou BAK Battery Co., Ltd |  |  | - |  |  |  | 3,369 |
Purchase of materials from Zhejiang Shengyang |  |  | 1,546,870 |  |  |  | 2,055,636 |
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd |  |  | 4,985,896 |  |  |  | 1,150,068 |
Sales of cathode raw materials to BAK SZ |  |  | - |  |  |  | 4,620 |
Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd |  |  | 97,002 |  |  |  | 176,512 |
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd in relation to non-operating agency-based service |  |  | - |  |  |  | 2,168,931 |
Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd in relation to non-operating agency-based service |  |  | - |  |  |  | 125,680 |
Sales of cathode raw materials to BAK SZ in relation to non-operating agency-based service |  |  | - |  |  |  | 4,748 |
Sales of batteries to Fuzhou BAK Battery Co., Ltd |  |  | 76,279 |  |  |  | - |

Related party balances

Apart from the above, the Company recorded the following significant related party balances as of December 31, 2024 and March 31, 2025:

Receivables from former subsidiary

|  | December 31, 2024 |  |  | March 31, 2025 |
Receivables from BAK SZ |  | $ | 12,399 |  |  | $ | 9,011 |

Balance as of December 31, 2024 and March 31, 2025 represented trade receivable for sales of cathode raw materials to BAK SZ.

Other balances due from/ (to) related parties

|  | December 31, 2024 |  |  | March 31, 2025 |
Trade receivable, net – Zhengzhou BAK Battery Co., Ltd (i) |  | $ | 5,970,184 |  |  | $ | 1,683,730 |
Trade receivable, net – Zhengzhou BAK Electronics Co., Ltd. (ii) |  | $ | 135,012 |  |  | $ | 206,850 |
Trade receivable, net – Zhengzhou BAK New Energy Vehicle Co. Ltd |  | $ | - |  |  |  | 19,807 |
Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (iii) |  | $ | 459,905 |  |  | $ | 126,128 |
Prepayment to supplier – Zhengzhou BAK Battery Co., Ltd (iv) |  | $ | 3,738,228 |  |  | $ | 3,753,527 |
Prepayment to supplier – Zhengzhou BAK New Energy Vehicle Co., Ltd (v) |  | $ | 205,496 |  |  | $ | - |
Receivable from non-operating agency-based service – Zhengzhou BAK Battery Co., Ltd (vi) |  | $ | - |  |  | $ | 2,069,888 |
Receivable from non-operating agency-based service – Zhengzhou BAK Electronics Co., Ltd (vi) |  | $ | - |  |  | $ | 127,505 |
Trade payable, net – Zhengzhou BAK Battery Co., Ltd (vii) |  | $ | 66,084 |  |  | $ | 66,409 |
Trade payable, net – Zhejiang Shengyang (viii) |  | $ | 1,486,765 |  |  | $ | 1,627,196 |
Payable for non-operating agency-based service – Zhejiang Shengyang (ix) |  | $ | 1,338,794 |  |  | $ | 391,235 |
Deposit paid for acquisition of long-term investments – BAK SZ (note 13) |  | $ | 15,864,318 |  |  | $ | 15,949,095 |
Dividend payable to non-controlling interest of Hitrans (note 16) |  | $ | 1,221,915 |  |  | $ | 1,228,445 |

(i) | Representing trade receivable from sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd. Up to the date of this report, Zhengzhou BAK Battery Co., Ltd. repaid $1.6 million to the Company.

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(ii) | Representing trade receivables from sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd. Up to the date of this report, Zhengzhou BAK Electronics Co., Ltd repaid $63,053 to the Company.

(iii) | Representing bills receivable issued by Zhengzhou BAK Battery Co., Ltd.as of December 31, 2024 and March 31, 2025 were pledged to bank as security for issuance of bills payable (note 14).

(iv) | Representing the prepayments to Zhengzhou BAK Battery Co., Ltd for purchase of batteries. The balance was not utilized up to the date of this report.

(v) | Representing the prepayments for purchase of raw materials for manufacturing. The contract was cancelled on December 10, 2024 and the prepayment was refunded to the Company in March 2025.

(vi) | Representing receivables from for non-operating agency-based services. Up to the date of this report, Zhengzhou BAK Battery Co., Ltd and Zhengzhou BAK Electronic Co., Ltd repaid $1.2 million and $43,385 respectively to the Company.

(vii) | Representing trade payables on purchase of batteries. Up to the date of this report, the Company settled nil to Zhengzhou BAK Battery Co., Ltd.

(viii) | Representing trade payables on purchase of materials for manufacturing from Zhejiang Shengyang. Up to the date of this report, the Company settled $0.8 million to Zhejiang Shengyang.

(ix) | Representing payables on purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service. Up to the date of this report, the Company settled nil to Zhejiang Shengyang.

Payables to a former subsidiary

Payables to a former subsidiary as of December 31, 2024 and March 31, 2025 consisted of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Payables to Shenzhen BAK Power Battery Co., Ltd |  | $ | (419,849 | ) |  | $ | (418,211 | )

Balance as of December 31, 2024 and March 31, 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 March 31, 2025 consist of the following:

|  | December 31, |  |  | March 31, |
|  | 2024 |  |  | 2025 |
Total government grants |  | $ | 8,136,469 |  |  | $ | 10,831,796 |
Less: Current portion |  |  | (556,214 | ) |  |  | (559,186 | )
Non-current portion |  | $ | 7,580,255 |  |  | $ | 10,272,610 |

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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 RMB46,150,000 pursuant to an agreement with the Management Committee dated July 2, 2013 for costs of land use rights and to be used to construct the new manufacturing site in Dalian. Part of the facilities had been completed and was operated in July 2015 and the Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.

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 RMB47.1 million (approximately $6.82 million) subsidy from Gaochun EDZ. The Company will recognize the government subsidies as income or offsets them against the related expenditures when there are no present or future obligations for the subsidized projects.

For the year ended December 31, 2021, the Company recognized RMB10 million ($1.6 million) as other income after moving of the Company facilities to Nanjing. Remaining subsidy of RMB37.1 million (approximately $5.9 million) was granted to facilities the construction works and equipment in Nanjing. The construction works have been completed in November 2021 and the production line was fully operated in January 2022. The Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.

On November 2, 2023, the Company received a subsidiary of RMB8.4 million ($1.2 million) for its development of new production line. The Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.

On December 12, 2024, Hitrans received RMB11.42 million ($1.6 million) from Development and Reform Bureau of Shangyu District, Shaoxing for the purpose to facilitate the development of new production line. Hitrans received additional RMB20.3 million ($2.8 million) on March 26, 2025 from Development and Reform Bureau of Shangyu District, Shaoxing for the same nature. The Company will recognize the subsidies as income or offsets them against the related expenditures when there are no present or future obligations for the subsidized projects.

Government grants were recognized in the consolidated statements of operations as follows:

|  | Three months ended March 31, |
|  | 2024 |  |  | 2025 |
Cost of revenues |  | $ | 108,710 |  |  | $ | 126,183 |
Research and development expenses |  |  | 9,430 |  |  |  | 9,300 |
General and administrative expenses |  |  | 4,118 |  |  |  | 4,062 |
Other income (expenses), net |  |  | 213,843 |  |  |  | 143,963 |
|  | $ | 336,101 |  |  | $ | 283,508 |

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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 |  |  | March 31, 2025 |
Balance at beginning of year/ period |  | $ | 546,444 |  |  | $ | 444,114 |
Warranty costs incurred |  |  | (245,328 | ) |  |  | (18,652 | )
Provision for the year/ period |  |  | 156,832 |  |  |  | 12,742 |
Foreign exchange adjustment |  |  | (13,834 | ) |  |  | 2,361 |
Balance at end of year/ period |  |  | 444,114 |  |  |  | 440,565 |
Less: Current portion |  |  | (23,426 | ) |  |  | (23,000 | )
Non-current portion |  | $ | 420,688 |  |  | $ | 417,565 |

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 March 31, |
|  | 2024 |  |  | 2025 |
PRC income tax |  | $ |  |  |  | $ |  |
Current income tax expenses, net |  |  | 1,048,786 |  |  |  | - |
Deferred income tax expenses |  |  | - |  |  |  | - |
|  | $ | 1,048,786 |  |  | $ | - |

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 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal corporate income taxes on dividends from foreign subsidiaries; (4) providing modification to subpart F provisions and new taxes on certain foreign earnings such as Global Intangible Low-Taxed Income (GILTI). Except for the one-time transition tax, most of these provisions go into effect starting January 1, 2018.

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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 80% deemed paid foreign tax credit (FTC) and a 50% deduction of the current year inclusion with the full amount of the Section 78 gross-up subject to limitation. This new provision is effective for tax years of foreign corporations beginning after December 31, 2017. The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The Company has made an accounting policy choice of treating taxes due on future U.S. inclusions in taxable amount related to GILTI as a current period expense when incurred. As of December 31, 2024 and March 31, 2025, the Company does not have any aggregated positive tested income; and as such, does not have additional provision amount recorded for GILTI tax.

No provision for income taxes in the United States has been made as CBAK had no taxable income for the three months ended March 31, 2024 and 2025.

Hong Kong Tax

The Company’s subsidiaries in Hong Kong are subject to Hong Kong profits tax rate of 16.5% and did not have any assessable profits arising in or derived from Hong Kong for the three months ended March 31, 2024 and 2025 and accordingly no provision for Hong Kong profits tax was made in these periods.

PRC Tax

The CIT Law in China applies an income tax rate of 25% to all enterprises but grants preferential tax treatment to High-New Technology Enterprises. CBAK Power was regarded as a “High-new technology enterprise” pursuant to a certificate jointly issued by the relevant Dalian Government authorities. Under the preferential tax treatment, CBAK Power was entitled to enjoy a tax rate of 15% for the years from 2024 to 2026 provided that the qualifying conditions as a High-new technology enterprise were met. Hitrans was regarded as a “High-new technology enterprise” pursuant to a certificate jointly issued by the relevant Zhejiang Government authorities. Under the preferential tax treatment, Hitrans was entitled to enjoy a tax rate of 15% for the years from 2024 to 2026 provided that the qualifying conditions as a High-new technology enterprise were met. Nanjing CBAK was regarded as a “High-new technology enterprise” pursuant to a certificate jointly issued by the relevant Nanjing Government authorities. Under the preferential tax treatment, Nanjing CBAK was entitled to enjoy a tax rate of 15% for the years from 2023 to 2025 provided that the qualifying conditions as a High-new technology enterprise were met.

A reconciliation of the provision for income taxes determined at the statutory income tax rate to the Company’s income taxes is as follows:

|  | For the three months ended March 31, |
|  | 2024 |  |  | 2025 |
Income (loss) before income taxes |  | $ | 10,621,260 |  |  | $ | (2,050,982 | )
United States federal corporate income tax rate |  |  | 21 | % |  |  | 21 | %
Income tax expenses (credit) computed at United States statutory corporate income tax rate |  |  | 2,230,465 |  |  |  | (430,706 | )
Reconciling items: |  |  |  |  |  |  |  |
Rate differential for PRC earnings |  |  | 474,162 |  |  |  | (55,525 | )
Tax effect of entity at preferential tax rate |  |  | (1,591,440 | ) |  |  | 35,016 |
Non-deductible expenses |  |  | 234,402 |  |  |  | 133,519 |
Share based payments |  |  | 24,482 |  |  |  | 5,684 |
Utilization of tax loss |  |  | - |  |  |  | (593,482 | )
Valuation allowance on deferred tax assets |  |  | (323,285 | ) |  |  | 905,494 |
Income tax expenses |  | $ | 1,048,786 |  |  | $ | - |

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(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 March 31, 2025 are presented below:

|  | December 31, 2024 |  |  | March 31, 2025 |
Deferred tax assets |  |  |  |  |  |
Trade receivable |  | $ | 723,916 |  |  |  | 599,685 |
Inventories |  |  | 591,678 |  |  |  | 554,632 |
Property, plant and equipment |  |  | 1,992,540 |  |  |  | 1,950,005 |
Non-marketable equity securities |  |  | 91,842 |  |  |  | 92,332 |
Equity method investment |  |  | 343,850 |  |  |  | 337,404 |
Intangible assets |  |  | 133,684 |  |  |  | 139,604 |
Accrued expenses, payroll and others |  |  | 614,417 |  |  |  | 587,464 |
Provision for product warranty |  |  | 66,617 |  |  |  | 66,085 |
Net operating loss carried forward |  |  | 38,116,873 |  |  |  | 37,697,925 |
Valuation allowance |  |  | (42,522,990 | ) |  |  | (41,883,250 | )
Deferred tax assets, non-current |  | $ | 152,427 |  |  |  | 141,886 |
Deferred tax liabilities, non-current |  |  |  |  |  |  |  |
Long-lived assets arising from acquisitions |  | $ | 152,427 |  |  | $ | 141,886 |

As of December 31, 2024, the Company’s U.S. entity had net operating loss carry forwards of $103,580,741, of which $102,293 available to reduce future taxable income which will expire in various years through 2035 and $103,478,448 available to offset capital gains recognized in the succeeding 5 tax years. As of March 31, 2025, the Company’s PRC subsidiaries had net operating loss carry forwards of $58,274,371, which will expire in various years through 2025 to 2034. Management believes it is more likely than not that the Company will not realize these potential tax benefits as these operations will not generate any operating profits in the foreseeable future. As a result, a valuation allowance was provided against the full amount of the potential tax benefits.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

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 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes.

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 10% of the profit for the year of the PRC subsidiary. The aggregate amount allocated to the reserves will be limited to 50% of registered capital for certain subsidiaries. Statutory reserve can be used for expanding the capital base of the PRC subsidiary by means of capitalization issue.

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, $1,230,511 and $3,042,602 representing the PRC statutory reserve of the subsidiary as of December 31, 2024 and March 31, 2025, respectively, are also considered under restriction for distribution.

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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 $1,798,803 (RMB12,903,713) and $787,754 (RMB5,729,888) for the three months ended March 31, 2024 and 2025, respectively.

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 March 31, 2025, there was no unrecognized stock-based compensation associated with the above restricted shares. As of March 31, 2025, 1,667 vested shares were to be issued.

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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 March 31, 2025, there was no unrecognized stock-based compensation associated with the above restricted shares and 4,167 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 months ended March 31, 2024 and 2025, 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. For the three months ended March 31, 2024 and 2025, the Company recorded nil as stock compensation expenses.

As of March 31, 2025, there was unrecognized stock-based compensation $662,116 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.

37

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. The Company recorded $102,932 and $20,249 as share-based compensation expenses in respect of the stock options granted on April 11, 2023 for the three months ended March 31, 2024 and 2025, respectively.

All the restricted share units granted on April 11, 2023 had been vested on December 31, 2023. As of March 31, 2025, there was unrecognized stock-based compensation of $21,572 associated with the above option granted.

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 instalments over a two 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 $6,757 and nil for the three months ended March 31, 2024 and 2025, respectively, in respect of the restricted share units granted on August 22, 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 months ended March 31, 2024 and 2025, the Company recorded $6,893 and $6,817, respectively, as share-based compensation expenses in respect of the stock options granted on August 22, 2023.

As of March 31, 2025, there was unrecognized stock-based compensation of $13,336 associated with the above option granted.

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 |  |  | 1,455,170 |  |  | $ | 1.31 |  |  | $ | - |  |  |  | 3.4 |
Exercisable at January 1, 2025 |  |  | 1,434,958 |  |  | $ | 1.35 |  |  | $ | - |  |  |  | 3.4 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | (60,000 | ) |  |  | 0.98 |  |  |  | - |  |  |  | - |
Outstanding at March 31, 2025 |  |  | 1,395,170 |  |  | $ | 1.32 |  |  | $ | - |  |  |  | 3.2 |
Exercisable at March 31, 2025 |  |  | 1,434,958 |  |  | $ | 1.35 |  |  | $ | - |  |  |  | 3.1 |

| * | The intrinsic value of the stock options at March 31, 2025 is the amount by which the market value of the Company’s common stock of $0.8 as of March 31, 2025 do not exceeds the average exercise price of the option.

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 months ended March 31, 2024 and 2025.

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| 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:

|  | For the three months ended March 31, |
|  | 2024 |  |  | 2025 |
Net income (loss) |  | $ | 9,572,474 |  |  | $ | (2,050,982 | )
Less: Net loss attributable to non-controlling interests |  |  | 263,976 |  |  |  | 471,748 |
Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. |  |  | 9,836,450 |  |  |  | (1,579,234 | )
Weighted average shares outstanding -basic (note) |  |  | 89,925,024 |  |  |  | 89,938,690 |
Dilutive unvested shares unit |  |  | 198,941 |  |  |  | - |
Weighted average shares outstanding–- diluted |  |  | 90,123,965 |  |  |  | 89,938,690 |
Income (loss) per share |  |  |  |  |  |  |  |
- Basic |  | $ | 0.11 |  |  | $ | (0.02 | )
- Diluted |  | $ | 0.11 |  |  | $ | (0.02 | )

Note: | Including 2,214,000 unvested share options

For the three months ended March 31, 2024, all the outstanding warrants were anti-dilutive and excluded from shares used in the diluted computation.

For the three months ended March 31, 2025, all the unvested options were anti-dilutive and excluded from shares used in the diluted computation.

26. | Commitments and Contingencies

(i) | Capital Commitments

As of December 31, 2024 and March 31, 2025, the Company had the following contracted capital commitments:

|  | December 31, 2024 |  |  | March 31, 2025 |
For construction of buildings |  | $ | 1,677,191 |  |  | $ | 5,924,250 |
For purchases of equipment |  |  | 53,300,030 |  |  |  | 69,928,476 |
Capital injection |  |  | 254,204,390 |  |  |  | 261,442,303 |
|  | $ | 309,181,611 |  |  | $ | 337,295,029 |

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(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 $1.5 million (RMB10,257,030), including equipment cost of $1.3 million (RMB9,072,000) and interest amount of $0.2 million (RMB1,185,030). In August 2021, CBAK Power and Haoneng reached an agreement that the term of the purchase contract will be extended to December 31, 2023 under which CBAK Power and its related parties shall execute the purchase of equipment in an amount not lower than $2.4 million (RMB15,120,000) from Haoneng, or CBAK Power has to pay 15% of the amount equal to RMB 15,120,000 ($2.2 million) net of the purchased amount to Haoneng. Haoneng withdrew the filed lawsuit after the agreement. As of March 31, 2025, the equipment was not received by CBAK Power, CBAK Power has included the equipment cost of $2.2 million (RMB15,120,000) under capital commitments.

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 March 31, 2024 and 2025 as follows:

|  | Three months ended March 31, |
Sales of finished goods and raw materials |  | 2024 |  |  | 2025 |
Customer A |  | $ | 30,141,709 |  |  |  | 51.2 | % |  | $ | * |  |  |  | * |
Customer B |  |  | * |  |  |  | * |  |  |  | 10,731,179 |  |  |  | 30.7 | %

* | Comprised less than 10% of net revenue for the respective period.

The Company had the following customers that individually comprised 10% or more of net trade receivable (included VAT) as of December 31, 2024 and March 31, 2025 as follows:

|  | December 31, 2024 |  |  | March 31, 2025 |
Customer B |  | $ | 10,676,044 |  |  |  | 41.5 | % |  | $ | 9,814,866 |  |  |  | 37.5 | %
Customer C |  |  | * |  |  |  | * |  |  |  | 3,799,674 |  |  |  | 14.5 | %
Zhengzhou BAK Battery Co., Ltd (note 17) |  |  | 5,970,184 |  |  |  | 23.2 | % |  |  | * |  |  |  | * |

* | Comprised less than 10% of net accounts receivable for the respective period.

The Company had the following suppliers that individually comprised 10% or more of net purchase for the three months ended March 31, 2024 and 2025 as follows:

|  | Three months ended March 31, |
|  | 2024 |  |  | 2025 |
Supplier A |  | $ | 3,242,455 |  |  |  | 10.1 | % |  | $ | * |  |  |  | * |
Supplier B |  |  | * |  |  |  | * |  |  |  | 3,619,451 |  |  |  | 11.2 | %

* | Comprised less than 10% of net purchase for the respective period.

The Company had the following suppliers that individually comprised 10% or more of trade payable as of December 31, 2024 and March 31, 2025 as follows:

|  | December 31, 2024 |  |  | March 31, 2025 |
Supplier B |  | $ | 3,263,562 |  |  |  | 12.4 | % |  | $ | * |  |  |  | * |

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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 March 31, 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’s chief operating decision maker has been identified as the Chief Executive Officer (“CEO”) who reviews financial information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance of the Company.

The Company determined that for the three months ended March 31, 2024 and 2025, it operated in two operating segments namely CBAK and Hitrans. CBAK’s segment mainly includes the manufacture, commercialization and distribution of a wide variety of standard and customized lithium-ion rechargeable batteries for use in a wide array of applications. Hitrans’ segment mainly includes the development and manufacturing of NCM precursor and cathode materials.

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 and net income. Net revenue, cost of revenues, operating expenses, operating income, finance income (expense), other income (expenses) and net income (loss) by segment for the three months ended March 31, 2024 and 2025 were as follows:

For the three months ended March 31, 2024 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 44,837,869 |  |  | $ | 13,984,563 |  |  | $ | - |  |  | $ | 58,822,432 |
Cost of revenues |  |  | (26,379,347 | ) |  |  | (13,662,038 | ) |  |  | - |  |  |  | (40,041,385 | )
Gross profit |  |  | 18,458,522 |  |  |  | 322,525 |  |  |  | - |  |  |  | 18,781,047 |
Total operating expenses |  |  | (5,979,471 | ) |  |  | (1,422,456 | ) |  |  | (1,116,137 | ) |  |  | (8,518,064 | )
Operating income (loss) |  |  | 12,479,051 |  |  |  | (1,099,931 | ) |  |  | (1,116,137 | ) |  |  | 10,262,983 |
Finance income (expenses), net |  |  | 11,721 |  |  |  | (1,997 | ) |  |  | (61 | ) |  |  | 9,663 |
Other income, net |  |  | 240,443 |  |  |  | 108,171 |  |  |  | - |  |  |  | 348,614 |
Income tax expenses |  |  | (1,048,786 | ) |  |  | - |  |  |  | - |  |  |  | (1,048,786 | )
Net income (loss) |  |  | 11,682,429 |  |  |  | (993,757 | ) |  |  | (1,116,198 | ) |  |  | 9,572,474 |

For the three months ended March 31, 2025 |  | CBAT |  |  | Hitrans |  |  | Corporate unallocated (note) |  |  | Consolidated |
Net revenues |  | $ | 20,363,338 |  |  | $ | 14,575,563 |  |  | $ | - |  |  | $ | 34,938,901 |
Cost of revenues |  |  | (15,643,236 | ) |  |  | (14,493,931 | ) |  |  | - |  |  |  | (30,137,167 | )
Gross profit |  |  | 4,720,102 |  |  |  | 81,632 |  |  |  | - |  |  |  | 4,801,734 |
Total operating expenses |  |  | (4,829,636 | ) |  |  | (2,200,311 | ) |  |  | (635,806 | ) |  |  | (7, 665,753 | )
Operating loss |  |  | (109,534 | ) |  |  | (2,118,679 | ) |  |  | (635,806 | ) |  |  | (2,864,019 | )
Finance income (expenses), net |  |  | 223,119 |  |  |  | (178,000 | ) |  |  | 1 |  |  |  | 45,120 |
Other income, net |  |  | 223,276 |  |  |  | 544,641 |  |  |  | - |  |  |  | 767,917 |
Income tax expenses |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Net income (loss) |  |  | 336,861 |  |  |  | (1,752,038 | ) |  |  | (635,805 | ) |  |  | (2,050,982 | )
As of March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Identifiable long-lived assets |  |  | 103,679,699 |  |  |  | 46,363,192 |  |  |  | - |  |  |  | 150,042,891 |
Total assets |  |  | 208,847,927 |  |  |  | 102,574,484 |  |  |  | 42,230 |  |  |  | 311,464,641 |

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.

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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. Revenue from these products is as follows:

|  | For the three months ended March 31, |
|  | 2024 |  |  | 2025 |
High power lithium batteries used in: |  |  |  |  |  |
Electric vehicles |  | $ | 480,181 |  |  | $ | 537,507 |
Light electric vehicles |  |  | 1,510,292 |  |  |  | 2,844,874 |
Residential energy supply & uninterruptable supplies |  |  | 42,847,396 |  |  |  | 16,980,957 |
|  |  | 44,837,869 |  |  |  | 20,363,338 |
Materials used in manufacturing of lithium batteries |  |  |  |  |  |  |  |
Cathode |  |  | 9,186,193 |  |  |  | 11,261,199 |
Precursor |  |  | 4,798,370 |  |  |  | 3,314,364 |
|  |  | 13,984,563 |  |  |  | 14,575,563 |
Total revenue |  | $ | 58,822,432 |  |  | $ | 34,938,901 |

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:

|  | For the three months ended March 31, |
|  | 2024 |  |  | 2025 |
Mainland China |  | $ | 23,690,763 |  |  | $ | 32,117,416 |
Europe |  |  | 32,893,914 |  |  |  | 75,246 |
Others |  |  | 2,237,755 |  |  |  | 2,746,239 |
Total |  | $ | 58,822,432 |  |  | $ | 34,938,901 |

Substantially all of the Company’s long-lived assets are located in the PRC.

29. | Subsequent events

The Company has evaluated subsequent events from March 31, 2025 to the date the financial statements were issued and has determined that there are no items to disclose.

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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.;

| ● | “RMB” are to Renminbi, the legal currency of China;

| ● | “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 reduced to 67.33% of registered equity interests (representing 72.99% of paid-up capital as of March 31, 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 have a wide range of applications on batteries that would be applied to electric vehicles, electric tools, high-end digital products and storage, among others.

As of March 31, 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.

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Financial Performance Highlights for the Quarter Ended March 31, 2025

The following are some financial highlights for the quarter ended March 31, 2025:

| ● | Net revenues: Net revenues decreased by $23.8 million, or 40.6%, to $34.9 million for the three months ended March 31, 2025, from $58.8 million for the same period in 2024.
| ● | Gross profit: Gross profit was $4.8 million, representing a decrease of $14.0 million, or 74.4% for the three months ended March 31, 2025, from gross profit of $18.8 million for the same period in 2024.
| ● | Operating income (loss): Operating loss was $2.9 million for the three months ended March 31, 2025, reflecting an increase of $13.1 million from an operating income of $10.3 million for the same period in 2024.
| ● | Net income (loss): Net loss was $2.1 million for the three months ended March 31, 2025, compared to a net income of $9.6 million for the same period in 2024.
| ● | Fully diluted income (loss) per share: Fully diluted loss per share was $0.02 for the three months ended March 31, 2025, as compared to fully diluted income per share of $0.11 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.

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 enjoyed a preferential tax rate of 15% from 2024 to 2026. CBAK Nanjing obtained “High and New Technology Enterprise” certificate in late 2023 and has enjoyed 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 March 31, 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 March 31, |  |  | Change |
|  | 2024 |  |  | 2025 |  |  | $ |  |  | % |
Net revenues |  | $ | 58,822 |  |  | $ | 34,939 |  |  |  | -23,883 |  |  |  | -41 | %
Cost of revenues |  |  | (40,041 | ) |  |  | (30,137 | ) |  |  | 9,904 |  |  |  | -24 | %
Gross profit |  |  | 18,781 |  |  |  | 4,802 |  |  |  | -13,979 |  |  |  | -74 | %
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development expenses |  |  | (2,816 | ) |  |  | (3,024 | ) |  |  | -208 |  |  |  | 7 | %
Sales and marketing expenses |  |  | (1,724 | ) |  |  | (896 | ) |  |  | 828 |  |  |  | -48 | %
General and administrative expenses |  |  | (4,092 | ) |  |  | (3,804 | ) |  |  | 289 |  |  |  | -7 | %
Allowance of credit losses, net |  |  | 114 |  |  |  | 58 |  |  |  | -56 |  |  |  | -49 | %
Total operating expenses |  |  | (8,518 | ) |  |  | (7,666 | ) |  |  | 853 |  |  |  | -10 | %
Operating income (loss) |  |  | 10,263 |  |  |  | (2,864 | ) |  |  | -13,126 |  |  |  | -128 | %
Finance income, net |  |  | 10 |  |  |  | 45 |  |  |  | 35 |  |  |  | 350 | %
Other income, net |  |  | 367 |  |  |  | 713 |  |  |  | 346 |  |  |  | 94 | %
Share of (loss) income of equity investee |  |  | (19 | ) |  |  | 55 |  |  |  | 74 |  |  |  | -389 |
Income (loss) before income tax |  |  | 10,621 |  |  |  | (2,051 | ) |  |  | -12,671 |  |  |  | -119 | %
Income tax expenses |  |  | (1,049 | ) |  |  | - |  |  |  | 1,049 |  |  |  | -100 | %
Net income (loss) |  |  | 9,572 |  |  |  | (2,051 | ) |  |  | -11,622 |  |  |  | -121 | %
Less: Net loss attributable to non-controlling interests |  |  | 264 |  |  |  | 472 |  |  |  | 208 |  |  |  | 79 | %
Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. |  | $ | 9,836 |  |  | $ | (1,579 | ) |  |  | -11,414 |  |  |  | -116 | %

Net revenues. Net revenues decreased by $23.9 million, or 41%, to $34.9 million for the three months ended March 31, 2025, from $58.8 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 March 31, |  |  | Change |
|  | 2024 |  |  | 2025 |  |  | $ |  |  | % |
High power lithium batteries used in: |  |  |  |  |  |  |  |  |  |  |  |
Electric vehicles |  | $ | 480 |  |  |  | 538 |  |  |  | 58 |  |  |  | 12 | %
Light electric vehicles |  |  | 1,510 |  |  |  | 2,845 |  |  |  | 1,335 |  |  |  | 88 | %
Residential energy supply & uninterruptable supplies |  |  | 42,848 |  |  |  | 16,981 |  |  |  | -25,867 |  |  |  | -60 | %
|  |  | 44,838 |  |  |  | 20,364 |  |  |  | -24,474 |  |  |  | -55 | %
Materials used in manufacturing of lithium batteries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cathode |  |  | 9,186 |  |  |  | 11,261 |  |  |  | 2,075 |  |  |  | 23 | %
Precursor |  |  | 4,798 |  |  |  | 3,314 |  |  |  | -1,484 |  |  |  | -31 | %
|  |  | 13,984 |  |  |  | 14,575 |  |  |  | 591 |  |  |  | 4 | %
Total |  | $ | 58,822 |  |  | $ | 34,939 |  |  |  | -23,883 |  |  |  | -41 | %

Net revenues from sales of batteries for electric vehicles were approximately $0.5 million for each of the three months ended March 31, 2025 and 2024.

45

Net revenues from sales of batteries for light electric vehicles were $2.8 million for the three months ended March 31, 2025, as compared to $1.5 million in the same period of 2024, an increase of $1.3 million, or 88%. We strive to continue to penetrate the market for batteries used in light electric vehicles, especially the international market such as India and Vietnam. We believe that our sales campaign in the international market will contribute to a rebound in our sales volume in this sector.

Net revenues from sales of batteries for residential energy supply & uninterruptable power supplies were $17.0 million in the three months ended March 31, 2025, as compared with $42.8 million in the same period in 2024, representing a decrease of $25.8 million, or 60%. The substantial decline primarily stems from our Dalian facilities, where a major portion of customers are in the residential energy supply sector. These facilities are currently undergoing a product portfolio upgrade, transitioning from Model 26650 to Model 40135 for our customers.

Net revenues from sales of materials used in manufacturing of lithium batteries were $14.6 million for the three months ended March 31, 2025, as compared to $14.0 million for the same period of 2024, representing a small increase of $0.5 million, or 4%.

Cost of revenues. Cost of revenues decreased to $30.1 million for the three months ended March 31, 2025, as compared to $40.0 million for the same period in 2024, a decrease of $9.9 million, or 25%. The cost of revenues decreased in line with revenues. We write down the inventory value whenever there is an indication that it is impaired.

Gross profit. Gross profit for the three months ended March 31, 2025 was $4.8 million, or 13.7% of net revenues as compared to gross profit of $18.8 million, or 31.9% 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 been our primary sources of net revenue. 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 increased to approximately $3.0 million for the three months ended March 31, 2025, as compared to approximately $2.8 million for the same period in 2024, an increase of $0.3 million, or 9%. The increase was driven by higher salaries and social insurance expenses due to a growing number of employees at Nanjing CBAK and CBAK Power’s development of series 46 batteries. This was partially offset by a decrease of approximately $0.1 million in outsourced consultancy services, which were replaced by our in-house research and development team. We incurred $2.2 million in salaries and social insurance cost (including share-based compensation) for the three months ended March 31, 2025 compared to $1.8 million for the three months ended March 31, 2024.

Sales and marketing expenses. Sales and marketing expenses decreased to approximately $0.9 million for the three months ended March 31, 2025, as compared to approximately $1.7 million for the same period in 2024, a decrease of approximately $0.8 million, or 48%. The marketing expenses decreased corresponding to the decrease of revenue and remains at 3% for each of the three months ended March 31, 2024 and 2024, as a percentage of revenues.

General and administrative expenses. General and administrative expenses decreased to $3.8 million, or 11% of revenues, for the three months ended March 31, 2025, as compared to $4.1 million, or 7% of revenues, for the same period in 2024, representing a decrease of $0.3 million, or 7%. The decrease resulted from a $0.2 million reduction in consultant service expenses.

Allowance on expected credit losses, net. The expected credit losses expenses reversed by $58,395 for the three months ended March 31, 2025, as compared to a reversal of $114,013 for the same period in 20243. We determine the allowance based on the current expected credit loss model. The allowance for credit losses is adjusted each period for changes in expected lifetime credit losses.

Operating (loss) income. As a result of the above, our operating loss totaled $2.9 million for the three months ended March 31, 2025, as compared to an operating income of $10.3 million for the same period in 2024, representing a decrease in income of $13.1 million, or 128%.

Finance income (expenses), net. Finance expenses, net was $39,093 for the three months ended March 31, 2025, as compared to finance income of $9,663 for the same period in 2024.

Other income, net. Other income was $0.7 million for the three months ended March 31, 2025, as compared to $0.4 million for the same period in 2024. For the three months ended March 31, 2025, we generated $0.5 million from agency-based services provided and received $0.1 million government assistance. For the three months ended March 31, 2024, we received government assistance of $0.2 million and generated $0.1 million from trading of materials.

Income tax. Income tax expenses were nil and $1.1 million for the three months ended March 31, 2025 and 2024, respectively. The income tax expenses for the three months ended March 31, 2024 were incurred by our batteries segment.

Net income (loss). As a result of the foregoing, we had a net loss of $2.1 million for the three months ended March 31, 2025, compared to net income of $9.6 million for the same period in 2024.

46

Liquidity and Capital Resources

We had 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, advance from our related and unrelated parties, investors and issuance of capital stock and other equity-linked securities.

We incurred a net loss of $2.1 million for the three months ended March 31, 2025. As of March 31, 2025, we had cash and cash equivalents of $47.5 million. Our total current assets were $143.2 million and our total current liabilities were $175.5 million as of March 31, 2025, resulting in a net working capital deficit of $32.3 million.

As of March 31, 2025, we had an accumulated deficit of $126.1 million. We had an accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of March 31, 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.

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.

Lending from Financial Institutions

In January 2023, we 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, we 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 our land use rights and buildings. Under the facility, we has borrowed RMB159.9 million (approximately $21.9 million) and RMB153.7 million (approximately $21.2 million) as of December 31, 2024 and March 31, 2025, respectively, bearing interest at 3.45% per annum expiring through April 2025 to March 2026.

On January 17, 2022, we 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 our 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. We borrowed RMB10 million (approximately $1.4 million) on January 20, 2022 for a term until January 16, 2023. We repaid RMB10 million (approximately $1.4 million) early on January 5, 2023. On January 6, 2023, we 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. We repaid the loan on January 4, 2024.

On February 9, 2022, we 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 our former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. We borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January 28, 2023. We repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, we 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. We repaid the loan on January 13, 2024.

On April 28, 2022, we 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 our former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, We 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. We repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, We 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. We repaid the loan on April 19, 2024.

We 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 our former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. We borrowed RMB9 million (approximately $1.3 million ) on September 27, 2023 for a term until August 31, 2024. We repaid the loan on August 31, 2024.

47

On November 8, 2022, We entered into a short-term loan agreement with China CITIC Bank Shaoxing Branch to August 9, 2023 with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 4.35% per annum. We borrowed RMB10 million (approximately $1.4 million) on the same date. We has repaid RMB5 million (approximately $0.7 million), RMB0.2 million (approximately $0.1 million) and RMB4.8, million (approximately $0.7 million) on November 16, 2022, December 27, 2022 and August 9, 2023, respectively. We entered into another short-term loan agreement with China CITIC Bank Shaoxing Branch for a one-year short-term loan agreement with a maximum amount of RMB0.2 million (approximately $0.1 million) for December 27, 2022 to December 27, 2023, bearing interest rate at 4.20% per annum. We entered into another 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. We repaid the loan on May 2, 2024.

On January 7, 2023, we 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 our former CEO, Mr. Yunfei Li, Mr. Yunfei Li’s wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd. We 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. We repaid the above early on June 15, 2023. On June 27, 2023, we 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. We borrowed RMB10 million (approximately $1.4 million) on the same date. The loan was guaranteed by our former CEO, Mr. Yunfei Li, Mr. Yunfei Li’s wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd. We repaid the loan on June 26, 2024.

On March 29, 2023, we 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. We borrowed RMB5 million (approximately $0.7 million) on the same date. The loan was secured by our buildings in Dalian. We repaid RMB 5 million (approximately $0.7 million) on March 27, 2024. On March 28, 2024, we borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing interest rate at 3.45% per annum. We early repaid the loan on August 21, 2024.

On April 19, 2023, we 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. We borrowed RMB10 million (approximately $1.4 million) on April 23, 2023. The loan was guaranteed by our former CEO, Mr. Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. We repaid the loan on April 9, 2024.

On July 31, 2023, we 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 our former CEO, Mr, Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, we borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum. We repaid the loan on July 22, 2024

On August 3, 2023, we 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. We borrowed RMB10 million (approximately $1.4 million) on September 27, 2023. The loan was secured by our buildings in Dalian. We repaid the loan on August 2, 2024.

On January 24, 2024, we 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. We borrowed RMB5 million (approximately $0.7 million) on the same date. We early repaid the loan on September 27, 2024.

On March 26, 2024, we 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. We borrowed RMB5 million (approximately $0.7 million) on the same date. We early repaid the loan on September 27, 2024.

On April 9, 2024, we 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. We borrowed RMB5.5 million (approximately $0.8 million) on the same date. We early repaid the loan on January 24, 2025.

On June 24, 2024, we 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 facility was guaranteed by our former CEO, Mr, Yunfei Li and Mr. Yunfei Li’s wife Ms. Qinghui Yuan. Under the facility, we borrowed RMB10 million (approximately $1.4 million) on June 24, 2024, bearing interest rate at 3.0% per annum. We early repaid the loan on August 23, 2024.

On September 29, 2024, we 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. We borrowed RMB15 million (approximately $2.1 million) on the same date.

48

On December 31, 2024, we 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. We borrowed RMB10 million (approximately $1.4 million) on the same date.

On January 17, 2025, we 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 our land use right and buildings. We have borrowed RMB40 million (approximately $5.5 million) as of March 31, 2025, bearing interest rate at 2.85%-3.6% per annum, of which RMB10 million (approximately $1.4 million) repayable on January 16, 2026 and the remaining RMB30 million (approximately $4.1 million) repayable on September 25, 2027.

On January 20, 2025, we 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. As of March 31, 2025, we have borrowed RMB10 million (approximately $1.4 million) under this loan agreement.

On February 19, 2025, we 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. NJ CBAK borrowed RMB4 million (approximately $0.6 million) on February 20, 2025 for a term until February 19, 2026, bearing interest rate at 2.98% per annum.

On February 25, 2025, we 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. We borrowed RMB10 million (approximately $1.4 million) on the same date.

We obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB390 million (approximately $53.7 million) with the term from June 28, 2023 to April 29, 2025. We borrowed a series of acceptance bills totaling RMB112.8 million (approximately $15.5 million) for various terms expiring through April to September 2025, which was secured by our pledged deposit of RMB74.8 million (approximately $10.3 million, term deposit of RMB24.7 million (approximately $3.3 million) and our bills receivables of RMB14.0 million (approximately $1.9 million).

We obtained another banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB300 million (approximately $41.3 million) with the term from December 14, 2023 to April 29, 2025. We borrowed a series of acceptance bills totaling RMB100.0 million (approximately $13.8 million) for various terms expiring through April to September 2025, which was secured by our pledged deposit of RMB63.2 million (approximately $8.7 million), term deposit of RMB2.2 million (approximately $0.3 million) and our bills receivables of RMB34.9 million (approximately $4.8 million).

We borrowed a series of acceptance bills from Bank of Nanjing totaling RMB57.6 million (approximately $7.9 million) for various terms expiring through May to September 2025, which was secured by our pledged deposit of RMB45.0 million (approximately $6.1 million) and term deposit of RMB13.3 million (approximately $1. million).

We borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shangyu Branch totaling RMB70.2 million (approximately $9.7 million) for various terms expiring through April to September 2025, which was secured by our pledged deposit of RMB59.3 million (approximately $8.2 million) and our bills receivables of RMB11.8 million (approximately $1.5 million).

We borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB73.0 million (approximately $10.1 million) expiring through April to September 2025, which was secured by our pledged deposit of RMB73.0 million (approximately $10.1 million).

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, 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; (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 (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. 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.

49

Summary of Cash Flows

We currently are expanding our product lines and manufacturing capacity in our Dalian, Nanjing and Zhejiang 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 bank 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 such 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 following table sets forth a summary of our cash flows for the periods indicated:

(All amounts in thousands of U.S. dollars)

|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2025 |
Net cash provided by (used in) operating activities |  | $ | 7,447 |  |  | $ | (9,621 | )
Net cash used in investing activities |  |  | (12,836 | ) |  |  | (9,903 | )
Net cash (used in) provided by financing activities |  |  | (16,392 | ) |  |  | 5,926 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash |  |  | (785 | ) |  |  | 347 |
Net decrease in cash and cash equivalents and restricted cash |  |  | (22,566 | ) |  |  | (13,251 | )
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 |  | $ | 36,257 |  |  | $ | 47,535 |

Operating Activities

Net cash used in operating activities was $9.7 million in the three months ended March 31, 2025. The net cash used in operating activities for the three months ended March 31, 2025 was mainly attributable to our increase of inventories of $8.7 million, an increase of trade and bills receivable of $7.4 million offset by a decrease of prepayments and other receivables and an increase in trade and bills payable of $8.2 million.

Net cash provided by operating activities was $7.4 million in the three months ended March 31, 2024 was mainly attributable to our net income of $12.4 million (excluding non-cash depreciation and amortization, write-down of inventories, share-based compensation and impairment loss of equity investee), increase of inventories of $4.1 million offset by an increase of trade and bills receivable of $8.2 million, an increase in trade and bills payable of $2.0 million.

Investing Activities

Net cash used in investing activities was $9.9 million for the three months ended March 31, 2025. The net cash used in investing activities comprised the purchases of property, plant and equipment and construction in progress $12.7 million offset by $2.8 million government subsidy received.

Net cash used in investing activities was $12.8 million for the three months ended March 31, 2024. The net cash used in investing activities comprised the purchases of property, plant and equipment and construction in progress $7.9 million and $4.9 million on deposit paid for acquisition of long-term investments.

Financing Activities

Net cash provided by financing activities was $5.9 million in the three months ended March 31, 2025. The net cash used in financing activities for the three months ended March 31, 2025 was mainly attributable to $24.3 million proceeds from bank borrowings offset by repayment of bank borrowings of $17.1 million and $1.3 million net movement of short-term time deposits.

Net cash used in financing activities was $16.4 million in the three months ended March 31, 2024. This was mainly attributable to $20.8 million advances from bank borrowings, $1.1 million from finance lease, offset by repayment of bank borrowings of $16.7 million, repayment of $0.7 million of principal payments on finance leases and $20.9 million placement of short-term time deposits.

50

As of March 31, 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 |  | $ | 21,454 |  |  | $ | 21,176 |
Jiangsu Gaochun Rural Commercial Bank |  |  | 4,132 |  |  |  | 551 |
Zhejiang Shangyu Rural Commercial Bank |  |  | 10,545 |  |  |  | 5,509 |
|  |  | 36,131 |  |  |  | 27,236 |
Short-term credit facilities: |  |  |  |  |  |  |  |
Zhejiang Shangyu Rural Commercial Bank |  |  | 2,066 |  |  |  | 2,066 |
China Everbright Bank Co., Ltd. Shaoxing Branch |  |  | 1,377 |  |  |  | 1,377 |
China Construction Bank Co., LTD. Shaoxing Branch |  |  | 1,377 |  |  |  | 1,377 |
Ningbo Bank Co., Ltd Nanjing Gaochun Branch |  |  | 1,377 |  |  |  | 1,377 |
|  |  | 6,197 |  |  |  | 6,197 |
Other lines of credit: |  |  |  |  |  |  |  |
Bank of Ningbo Co., Ltd |  |  | 1,116 |  |  |  | 1,116 |
China Zheshang Bank Co., Ltd. Shenyang Branch |  |  | 15,542 |  |  |  | 15,542 |
Bank of Nanjing Gaochun Branch |  |  | 8,239 |  |  |  | 8,239 |
China Zheshang Bank Co., Ltd. Shenyang Branch |  |  | 13,475 |  |  |  | 13,475 |
China Zheshang Bank Co., Ltd Shangyu Branch |  |  | 9,670 |  |  |  | 9,670 |
Bank of Communications Co., Ltd Shaoxing Branch |  |  | 10,059 |  |  |  | 10,059 |
|  |  | 58,101 |  |  |  | 58,101 |
Total |  | $ | 100,429 |  |  | $ | 91,534 |

Capital Expenditures

We incurred capital expenditures of $12.6 million and $7.9 million in the three months ended March 31, 2025 and 2024, respectively. Our capital expenditures were used primarily to construct or upgrade our Dalian, Nanjing and Zhejiang facilities.

We estimate that our total capital expenditures in fiscal year 2025 will reach approximately $50 million. Such funds will be mainly used to construct new plants with new product lines and battery module packing lines.

Critical Accounting Policies and Estimates

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.

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.

51

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 March 31, 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 March 31, 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 an 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 March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

52

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.

Other than as previously disclosed in current reports on Form 8-K, there were no unregistered sales of equity securities or repurchase of common stock during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Securities Trading Plans of Directors and Executive Officers

During the fiscal quarter ended March 31, 2025, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

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).

53

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: May 19, 2025

| CBAK ENERGY TECHNOLOGY, INC.
| By: | /s/ Zhiguang Hu
|  | Zhiguang Hu
|  | Chief Executive Officer
| By: | /s/ Jiewei Li
|  | Jiewei Li
|  | Chief Financial Officer

54

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