# EDGAR Filing Document

**Accession Number:** 0001117171
**File Stem:** 0001213900-26-036952
**Filing Date:** 2026-3
**Character Count:** 666767
**Document Hash:** 43b0d9f7c27cb4cf4afa04ad6aa31307
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-036952.hdr.sgml**: 20260331

**ACCESSION NUMBER**: 0001213900-26-036952

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 175

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260331

**DATE AS OF CHANGE**: 20260331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CBAK Energy Technology, Inc.
- **CENTRAL INDEX KEY:** 0001117171
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 880442833
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32898
- **FILM NUMBER:** 26817711

**BUSINESS ADDRESS:**
- **STREET 1:** BAK INDUSTRIAL PARK, MEIGUI STREET
- **STREET 2:** HUAYUANKOU ECONOMIC ZONE
- **CITY:** DALIAN
- **STATE:** F4
- **ZIP:** 116422
- **BUSINESS PHONE:** (86)(411)6251-0619

**MAIL ADDRESS:**
- **STREET 1:** BAK INDUSTRIAL PARK, MEIGUI STREET
- **STREET 2:** HUAYUANKOU ECONOMIC ZONE
- **CITY:** DALIAN
- **STATE:** F4
- **ZIP:** 116422

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CHINA BAK BATTERY INC
- **DATE OF NAME CHANGE:** 20050214

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MEDINA COFFEE INC
- **DATE OF NAME CHANGE:** 20000626

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

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

For the fiscal year ended: **<u>December 31, 2025</u>**

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

For the transition period from ____________to _____________

Commission File No. **<u>001-32898</u>**

**<u>CBAK ENERGY TECHNOLOGY, INC.</u>**

(Exact Name of Registrant as Specified in Its Charter)

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

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CBAK Industrial Park, Meigui Street,<br> Huayuankou**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Economic Zone, Dalian City, Liaoning <br> Province, China** | **116450** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of principal executive offices) | (Zip Code) |

---

**<u>(86) (411)-3918-5985</u>**

(Registrant's telephone number, including area code)

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 | The Nasdaq Stock Market LLC |

---

Securities registered pursuant to Section 12(g) of the Act: **<u>None</u>**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 ☒ <br> Non-Accelerated Filer ☐ Smaller reporting company ☒ <br> 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

As of June 30, 2025 (the last business day of the registrant's most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant's common stock held by non-affiliates (based upon the closing sale price of $1.18 per share) was approximately $91.1 million. Shares of the registrant's common stock held by each executive officer and director and by each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There were a total of 88,645,836 shares of the registrant's common stock outstanding as of March 25, 2026.

**DOCUMENTS INCORPORATED BY REFERENCE**

None.

![](ea028334901_img1.jpg)

**CBAK ENERGY TECHNOLOGY, INC.**

**Annual Report on Form 10-K**

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
| Item 1. | [Business](#a_001) | 1 |
| Item 1A. | [Risk Factors](#a_002) | 15 |
| Item 1B. | [Unresolved Staff Comments](#a_003) | 36 |
| Item 1C. | [Cybersecurity](#a_004) | 36 |
| Item 2. | [Properties](#a_005) | 37 |
| Item 3. | [Legal Proceedings](#a_006) | 37 |
| Item 4. | [Mine Safety Disclosures](#a_007) | 37 |
|  | **[PART II](#a_008)** | 38 |
| Item 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#a_009) | 38 |
| Item 6. | [\[Reserved\]](#a_010) | 38 |
| Item 7. | [Management's Discussion And Analysis Of Financial Condition And Results Of Operations](#a_011) | 39 |
| Item 7A. | [Quantitative And Qualitative Disclosures About Market Risk](#a_012) | 54 |
| Item 8. | [Financial Statements and Supplementary Data](#a_013) | F-1 |
| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#a_014) | 55 |
| Item 9A. | [Controls and Procedures](#a_015) | 55 |
| Item 9B. | [Other Information](#a_016) | 56 |
| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#a_017) | 56 |
|  | **[PART III](#a_018)** | 57 |
| Item 10. | [Directors, Executive Officers and Corporate Governance](#a_019) | 57 |
| Item 11. | [Executive Compensation](#a_020) | 62 |
| Item 12. | [Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters](#a_021) | 65 |
| Item 13. | [Certain Relationships and Related Transactions, And Director Independence](#a_022) | 68 |
| Item 14. | [Principal Accountant Fees and Services](#a_023) | 70 |
|  | **[PART IV](#a_024)** | 71 |
| Item 15. | [Exhibits, Financial Statement Schedules](#a_025) | 71 |
| Item 16. | [Form 10-K Summary](#a_026) | 73 |

---

i

**INTRODUCTORY NOTE**

**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.;

● "China" and "PRC" are to the People's Republic of China;

● "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.

● "EUR" are to euro, the official currency of the euro area;

● "Hitrans" are to our 73.46% owned PRC subsidiary, Zhejiang Hitrans Lithium Battery Technology (we hold 73.46% of registered equity interests of Hitrans, representing 79.64% 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;

● "NCM" are to nickel cobalt manganese;

● "R&D" are to research and development;

● "RMB" are to Renminbi, the legal currency of China;

● "SEC" are to the United States Securities and Exchange Commission;

● "Securities Act" are to the Securities Act of 1933, as amended; and

● "U.S. dollar", "$" and "US$" are to the legal currency of the United States.

ii

**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 and Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Forward-looking statements made in this report generally are based on our best estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "could," "should," "project," "expect," "believe," "estimate," "anticipate," "intend," "continue," "potential," "opportunity" or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions.

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. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

**Disclosures Related to Our China-Based Operations**

CBAK Energy Technology, Inc. is a holding company incorporated in Nevada, the United States, with no material operations of its own. We conduct our business through our operating subsidiaries in China. This structure involves unique risks to investors, and you may never directly hold equity interests in the operating entities.

There are significant legal and operational risks and uncertainties associated with having substantially all operations in China. The PRC government has significant authority to exert influence on the ability of a company with substantial operations in China, like us, to conduct its business, accept foreign investments or be listed on a U.S. stock exchange. For example, we face risks associated with PRC regulatory approvals of offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy, as well as with U.S. regulations, for instance, the risk relating to lack of inspection from the U.S. Public Company Accounting Oversight Board, or PCAOB, on our auditors, which is further discussed below under "—The Holding Foreign Companies Accountable Act" and in various risk factors in "Item 1A. Risk Factors." The PRC government may also intervene with or influence our operations as the government deems appropriate to further regulatory, political and societal goals. The PRC government publishes from time to time new policies that can significantly affect our industry in which we operate and we cannot rule out the possibility that it will not in the future further release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Any such action, once taken by the PRC government, could cause the value of our common stock to significantly decline or in extreme cases, become worthless.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to a significant degree of interpretation by PRC regulatory agencies and courts. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. Therefore, it is possible that our existing operations may be found not to be in full compliance with relevant laws and regulations in the future. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.

iii

The PRC government has initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity ("VIE") structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. We do not believe that our subsidiaries in China are directly subject to these regulatory actions or statements, as we have not carried out any monopolistic behavior, we have never adopted a VIE structure, and our business does not involve any restricted industry or implicate cybersecurity.

*For additional information, see "Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China can change quickly" on page 16, "Risk Factors—Risks Related to Doing Business in China—Changes in U.S. and Chinese regulations or in relations between the United States and China may adversely impact our business, our operating results, our ability to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice" on page 18 and Risk Factors—Risks Related to Doing Business in China—There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations" on page 19.*

**The Holding Foreign Companies Accountable Act**

In December 2021, the SEC adopted rules (the "Final Rules") to implement the Holding Foreign Companies Accountable Act (the "HFCAA"). The HFCAA includes requirements for the SEC to identify issuers who file annual reports with audit reports issued by independent registered public accounting firms located in foreign jurisdictions that the Public Company Accounting Oversight Board ("PCAOB") is unable to inspect or investigate completely because of a position taken by a non-U.S. authority in the accounting firm's jurisdiction ("Commission-Identified Issuers"). The HFCAA also requires that, to the extent that the PCAOB has been unable to inspect an issuer's independent registered public accounting firm for three consecutive years since 2021, the SEC shall prohibit the issuer's securities registered in the United States from being traded on any national securities exchange or over-the-counter markets in the United States. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed into law, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our former auditor, Centurion ZD CPA & Co. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 10-K for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it was unable to inspect or investigate completely registered public accounting firms. For this reason, we have not been identified as a Commission-Identified Issuer after we filed on April 14, 2023 the annual report on Form 10-K for the fiscal year ended December 31, 2022 and do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 10-K. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. Our current auditor, ARK Pro CPA & Co, is headquartered in Hong Kong. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA, as amended.

For additional information, see "*Risk Factor—Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our former auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our former auditor in the past has deprived our investors of the benefits of such inspections. Our common stock may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of our common stock, or the threat of its being delisted, may materially and adversely affect the value of your investment*" *on page 15.*

iv

**Permissions Required from the PRC Authorities for Our Business Operations and Securities Offering**

In addition to regular business licenses, we are required to obtain the pollutants discharge permit to operate our business in the PRC. We believe that our PRC operating subsidiaries have obtained all requisite permissions for our operations in all material aspects from relevant Chinese authorities and none of the requisite permissions for our operations in all material aspects have been denied by the Chinese authorities. However, we cannot assure you that our PRC subsidiaries are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our present or future business. If our PRC subsidiaries (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and our PRC subsidiaries are required to obtain such permissions or approvals in the future, we could be subject to fines, legal sanctions or an order to suspend our PRC operating subsidiaries' business, which may materially and adversely affect the business, financial condition and results of operations of us.

In connection with our previous issuance of securities, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we believe that we and our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory Commission ("CSRC"), (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China (the "CAC"), and (iii) have not received or were denied such requisite permissions by any PRC authority. We cannot guarantee that the regulators will agree with us. As of the date hereof, we have not been involved in any investigations for cybersecurity review made by the CAC, and we have not received any inquiry, notice, warning, or sanctions in such respect.

However, the PRC government has indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. The CSRC published the Trial Measures and Listing Guidelines on February 17, 2023, designed to regulate overseas securities offerings by PRC domestic companies. On February 24, 2023, the CSRC, together with the Ministry of Finance, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the "Provisions." The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies," and came into effect on March 31, 2023 together with the Trial Measures.

Although the Trial Measures, Listing Guidelines, and Revised Provisions have been in effect since March 2023, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. Notwithstanding the foregoing, as of the date of this report, we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, or sanction from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations.

For additional information, see *"Risk Factor—Risks Related to Doing Business in China—The PRC government has increasingly strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers, which could result in a material change in our operations and our common stock could decline in value or become worthless." on page 16.*

v

**Cash and Asset Flows Through Our Organization**

Under relevant PRC laws and regulations, we are permitted to provide funding from the proceeds of our overseas capital raising activities to our PRC subsidiaries only through loans or capital contributions. In the fiscal years ended December 31, 2025 and 2024, we transferred $7.3 million and $2.4 million to our PRC subsidiaries as capital contribution, respectively. As of December 31, 2025, CBAK Energy Technology, Inc., the Nevada issuer, had made cumulative capital contributions of $148.3 million to our existing PRC subsidiaries, which were accounted as long-term investments by us.

Before Hitrans was acquired by us in November 2021, it declared dividends twice. In January 2020, Hitrans declared dividends for the years ended December 31, 2018 and 2019. A dividend of $2,958,048 was declared and paid to its shareholder Zhejiang Meidu Graphene Technology Co., Ltd. For other shareholders, a total dividend of $2,480,944 was declared in January 2020 of which $1,250,181 was waived by us upon the completion of its acquisition and the balance remains unpaid as of the date of this report. In March 2018, Hitrans declared a dividend of $1,333,135 for the year ended December 31, 2017, among which $533,254 was paid in July 2018 and the remaining $799,881 was paid in 2019. Except for the above dividends, we and our PRC subsidiaries have not previously declared or paid any cash dividend or dividend in kind, and have no plan to declare or pay any dividends in the near future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Under PRC laws and regulations, we are subject to various restrictions on intercompany fund transfers and foreign exchange control. To the extent our cash is in the PRC or held by a PRC entity, the funds may not be available for the distribution of dividends to our investors, or for other use outside of the PRC, due to the restrictions and limitations on our ability imposed by the PRC government to transfer cash. The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Our PRC subsidiaries receive substantially revenue in RMB, EUR and USD. Our PRC subsidiaries may pay dividends only out of their accumulated after-tax profits, if any, upon satisfaction of relevant statutory conditions and procedures and determined in accordance with Chinese accounting standards and regulations. If the PRC foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy the foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders. Additionally, we may make loans to our PRC subsidiaries subject to the approval from or registration with PRC governmental authorities and limitation on amount, or we may make additional capital contributions to our PRC subsidiaries. PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using our funds to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect the liquidity of our PRC subsidiaries and our ability to fund and expand our business in the PRC, and cause the value of our securities to significantly decline or become worthless. We cannot assure you that the PRC government will not intervene in or impose restrictions on our ability to make intercompany cash transfers.

For additional information, see *"Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China can change quickly" On page 16 and "Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent CBAK Energy Technology, Inc. from making additional capital contributions or loans to its PRC subsidiaries" on page 21.*

**Summary of Risk Factors**

Investing in our securities involves a high degree of risk. The following is a summary of significant risk factors and uncertainties that may affect our business, which are discussed in more detail below under "*Item 1A. Risk Factors*" included in this annual report on Form 10-K:

● The PRC government exerts substantial influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China can change quickly with little advance notice.

vi

● The PRC government has increasingly strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers, which could result in a material change in our operations and our common stock could decline in value or become worthless.

● Changes in U.S. and Chinese regulations or in relations between the United States and China may adversely impact our business, our operating results, our ability to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice.

● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.

● CBAK Energy Technology, Inc., as a holding company incorporated in Nevada, the United States, without material operations of its own, relies on dividends and other distributions on equity paid by its PRC operating subsidiaries for its cash needs.

● Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

● Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

● There are inherent risks associated with new product development and our efforts to develop and market new products could fail.

● Our failure, if any, to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable, resulting in loss of market share to our competitors.

● Maintaining our R&D activities and manufacturing operations require significant capital expenditures, and our inability or failure to maintain our operations could have a material adverse impact on our market share and ability to generate revenue.

● We face intense competition from other battery manufacturers and cathode material and precursor producers, many of which have significantly greater resources.

● We are dependent on a limited number of customers for a significant portion of our revenues, including international customers across multiple continents, and this dependence is likely to continue.

● We face risks associated with the marketing, distribution and sale of our products internationally, including in new markets such as Africa, and if we are unable to effectively manage these risks, they could impair our ability to expand our business abroad.

● Our expansion into the African market subjects us to significant operational, regulatory, political, and economic risks that could materially and adversely affect our business, financial condition, and results of operations.

vii

● Our business depends on the growth in demand for light electric vehicles, electric vehicles, energy storage, such as residential energy supply and UPS application, and other high-power electric devices.

● Our success, in part, depends on the success of manufacturers of the end applications that use our products, and our failure to gain acceptance of our products from such manufacturers could materially and adversely affect our results of operations and profitability.

● We have engaged in transactions with related parties, and such transactions present potential conflicts of interest that could have an adverse effect on our business and results of operations.

● While certain of our subsidiaries maintain product liability insurance, we do not maintain comprehensive product liability insurance across all our operations to cover all claims against our product quality. Defects in our products could result in a loss of customers and decrease in revenue, unexpected expenses and a loss of market share.

● We do not have long-term purchase commitments from our customers, which may result in significant uncertainties and volatility with respect to our revenue from period to period.

● We rely significantly on technology and systems to support our production, supply chain, payments, financial reporting and other key aspects of our business. Any failure, inadequacy, interruption or security failure of those systems could have a material adverse effect on our business, reputation and brand, financial condition, and results of operations.

● We and our independent public accounting firm identified material weaknesses in our internal control over financial reporting as of December 31, 2025. If we fail to remediate the material weaknesses, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our shares may be adversely affected.

● Numerous factors, many of which are beyond our control, may cause the market price of common stock to fluctuate significantly.

● Techniques employed by short sellers may drive down the market price of the common stock of CBAK Energy Technology, Inc.

● Other risks identified in this report and in our other reports filed with the SEC, including those identified in "*Item 1A. Risk Factors*" below.

**Enforceability of Civil Liabilities**

There is uncertainty as to whether the courts of China would:

● recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

● entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

The recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our shares of common stock.

viii

**PART I**

**ITEM 1. BUSINESS.**

**Overview of Our Business**

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, as well as battery pack products. In addition, after completing the acquisition of 81.56% of registered equity interests (such ownership percentage reduced to 73.46% of registered equity interests (representing 79.64% of paid-up capital as of December 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 December 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 generated revenues of $195.2 million and $176.6 million for the fiscal years ended December 31, 2025 and 2024, respectively. We had a net loss of $10.4 million in the fiscal year ended December 31, 2025 compared to a net income of $9.6 million in the fiscal year ended 2024. As of December 31, 2025, we had an accumulated deficit of $133.8 million and net assets of $109.5 million.

***Expansion of Manufacturing Capabilities***

We have three major manufacturing centers for new energy batteries, including lithium and sodium batteries in Nanjing, Dalian and Shangqiu, and a manufacturing plant for precursors and cathode materials in Shaoxing.

In June 2020, our wholly-owned subsidiary, BAK Asia entered into a framework investment agreement with Jiangsu Gaochun Economic Development Zone Development Group Company ("Gaochun EDZ"), a company affiliated with the local government of Gaochun Economic Development Zone in Nanjing, Jiangsu, PRC. According to the agreement, we intended to develop certain lithium battery projects within Gaochun EDZ which are expected to have a total production capacity of approximately 20 GWh per year after completion (the "Nanjing Project"). As of December 31, 2025, we had received government subsidies in an amount of RMB61.0 million (approximately $8.7 million) from Gaochun EDZ. We plan to utilize the targeted total capacity of approximately 20 GWh per year to produce lithium batteries or sodium batteries for the light electric vehicle (LEV), electric vehicle (EV), and energy storage sectors. The Company expects to achieve such capacity expansion under the Nanjing Project through two phases of construction. In Phase I, we secured plant rentals and completed interior construction by 2021, featuring two production lines. One line is dedicated to manufacturing model 32140 lithium batteries, while the other is versatile, capable of producing either model 32140 lithium or sodium batteries. The completed Phase I plants span roughly 27,173 square meters, and the two production lines constructed during Phase I have been put into operation. Our actual production capacity for Phase I stands at 1.5 GWh annually when both lines are assigned to lithium battery production. Phase II, our long-term expansion plan, aims to add another three large manufacturing plants and augment our annual production capacity by an additional 18 GWh. We planned to add two production lines to the first large manufacturing plant at Phase II initially. As of December 31, 2025, the first two production lines at Phase II had commenced mass production. Currently in the ramp-up phase, we expect to achieve the full capacity of 3 GWh from these two production lines by early 2027, which will bring the total capacity in our Nanjing Project to 4.5 GWh. The Nanjing project is fueled by strong client demand and a surge in orders. Our existing two production lines at Phase I are already operating at full capacity, and the production capacity of the new Phase II lines has been fully allocated to pending production orders.

While demand for the model 32140 cells produced at our Nanjing facility continues to grow and remains robust, we are concurrently optimizing the product portfolio at our Dalian plant. Our Dalian-manufactured model 26650 batteries historically enjoyed strong demand across European and American markets, but the model 26650—originally introduced in 2006—is nearing the end of its lifecycle, resulting in a contracting market share. Thus, we have redirected capital expenditure away from the 26650 lines, successfully transitioning to a new production line for a new model 40135 with a designed capacity of 2.3 GWh. Mass production commenced in 2025. Following the completion of the ramp-up phase, the total production capacity at our Dalian facility is projected to reach 3.3 GWh by early 2027. We have already secured a robust order book for the 40135 cells and anticipate this transition will serve as a significant revenue driver for the Dalian plant upon reaching full capacity utilization.

Currently, our Hitrans facilities possess a manufacturing capacity of 13,000 metric tons for NCM precursors and 13,000 metric tons for NCM cathode materials. Of the cathode capacity, 10,000 metric tons are currently generated through a leased facility. To expand our proprietary infrastructure, Hitrans is constructing a new 10,000-metric-ton cathode manufacturing plant, slated for completion in September 2026 and expected to be fully operational in the first half of 2027. Additionally, Hitrans has already completed construction of a major new precursor plant featuring a capacity of 37,000 metric tons, which is anticipated to commence production in 2027.

***Development of New Battery Models***

Our primary battery portfolio currently features a diverse range of lithium-ion cells (Models 26650, 26700, 32140, and 40135) and an advanced 32140 sodium-ion cell. The lithium-ion models offer scalable power specifications, making them highly suitable for light electric vehicles, as well as residential and UPS energy storage applications. Concurrently, our sodium-ion cells provide a distinct competitive advantage in extreme environments, featuring exceptional low-temperature resilience and fast-charging capabilities. In-house testing demonstrates that our 32140 sodium-ion cells maintain an 85% capacity retention rate at -40°C and can charge to 90% capacity in just 10 minutes.

To maintain our competitive position, our R&D team is dedicated to developing a range of larger cylindrical battery models such as model 60115, 60135 and 60150. Larger cylindrical batteries typically offer superior performance at lower manufacturing costs. Based on different client demand, we may produce sodium versions of these models.

***Acquisition of a Raw Materials Manufacturer***

On July 20, 2021, CBAK Power, a wholly-owned Chinese subsidiary of the Company, entered into a framework agreement relating to CBAK Power's investment in Zhejiang 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.

CBAK Power paid approximately RMB40.74 million ($6.4 million) in cash to acquire 21.56% of registered equity interests (representing 21.18% of paid-up capital) of Hitrans from Hitrans management shareholders. In addition, CBAK Power entered into a loan agreement with Hitrans to lend Hitrans approximately RMB131 million ($20.6 million) (the "Hitrans Loan") by remitting approximately RMB131 million ($20.6 million) into the account of Shaoxing Intermediate People's Court to remove the freeze on Zhejiang Meidu Graphene Technology Co., Ltd. ("Meidu Graphene")'s 60% of registered equity interests (representing 54.39% of paid-up capital) of Hitrans which freeze was imposed as a result of a lawsuit for Hitrans's failure to make payments in connection with the purchase of land use rights, plants, equipment, pollution discharge permit and other assets (the "Assets"). CBAK Power assigned RMB118 million ($18.5 million) of the Hitrans Loan to Mr. Junnan Ye as consideration for the acquisition of 60% of registered equity interests (representing 54.39% of paid-up capital) of Hitrans from Mr. Ye who, acting as an intermediary, first purchased the 60% of registered equity interests (representing 75.57% of paid-up capital) of Hitrans from Meidu Graphene. After such assignment, Hitrans shall repay Mr. Ye at least RMB70 million ($10.84 million) within two months of obtaining title to the Assets and the rest RMB48 million ($7.43 million) by December 31, 2021, along with a fixed interest of RMB3.5 million ($0.54 million) which can be reduced by up to RMB1 million ($0.15 million) if the loan is repaid before its due date. Hitrans shall repay the remaining approximately RMB13 million ($2.01 million) of the Hitrans Loan to CBAK Power at an interest rate of 6% per annum. As of January 29, 2022, Hitrans repaid all the loan principal of RMB118 million ($18.5 million) and interest of RMB3.5 million ($0.54 million) to Mr. Ye.

Prior to the Acquisition, CBAK Power and Hangzhou Juzhong Daxin Asset Management Co., Ltd. ("Juzhong Daxin") entered into a framework investment agreement (the "Letter of Intent") for a potential acquisition of Hitrans, and CBAK Power paid RMB20 million ($3.10 million) to Juzhong Daxin as a security deposit under the Letter of Intent. On July 27, 2021, Juzhong Daxin returned RMB7 million ($1.1 million) of the security deposit to CBAK Power. Juzhong Daxin has refused to refund an additional RMB3 million ($0.5 million), claiming that the amount was a justified risk premium for their facilitation of the acquisition. CBAK Power believes this assertion is baseless and has initiated legal proceedings against Juzhong Daxin to recover the outstanding RMB3 million. As of December 31, 2025, CBAK Power had not recovered the RMB3 million from Juzhong Daxin.

As part of the Acquisition, Hitrans obtained title to the Assets. Upon the closing of the Acquisition, CBAK Power became the largest shareholder of Hitrans holding 81.56% of its registered equity interests (representing 75.57% of paid-up capital). As required by applicable Chinese laws, CBAK Power is obliged to make capital contributions for the portion of Hitrans's registered capital subscribed but unpaid in accordance with the articles of association of Hitrans.

On July 8, 2022, Hitrans held a shareholder meeting to pass a resolution to increase the registered capital of Hitrans from RMB40 million to RMB44 million (approximately $6.2 million) and to accept an investment of RMB22 million (approximately $3.1 million) from Shaoxing Haiji Enterprise Management & Consulting Partnership ("Shaoxing Haiji") and another investment of RMB18 million (approximately $2.5 million) from Mr. Haijun Wu (collectively, the "Management Shareholder Investments"). Under the resolution, 10% of the Management Shareholder Investments (RMB4 million or $0.5 million) will be counted towards Hitrans's registered capital and the remaining 90% (RMB36 million or $5.1 million) will be treated as additional paid-in capital. 25% of the Management Shareholder Investments was required to be in place before August 15, 2022. As of September 30, 2022, RMB10 million (approximately $1.4 million), representing 25% of the Management Shareholder Investments was received. Another 25% (RMB10 million) and 50% (RMB20 million) of the Management Shareholder Investments were required to be received before December 31, 2022 and June 30, 2024, respectively. As of December 31, 2025, the 25% (RMB10 million) of the Management Shareholder 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. In addition, in 2022, CBAK Power injected an additional RMB60 million (approximately $8.7 million) in Hitrans comprising RMB6 million ($0.9 million) towards Hitrans's registered capital and RMB54 million ($7.8 million) as additional paid-in capital.

On December 8, 2022, CBAK Power entered into agreements with five investors (together, the "Hitrans Investors") to transfer an aggregate of 6.8% equity interests CBAK Power holds in Hitrans to these Hitrans Investors. Among the five investors, four of them invested RMB5 million (approximately $0.7 million) each to obtain 1.2% equity interests, respectively, while the fifth investor paid RMB10 million (approximately $1.5 million) to acquire 2.3% equity interests. Following an internal restructuring on March 27, 2024, CBAK New Energy, our wholly-owned subsidiary, acquired the entire 67.33% equity interest in Hitrans from CBAK Power. In November 2025, CBAK New Energy entered into an equity transfer agreement with New Era Group Zhejiang New Energy Materials Co., Ltd. to acquire an additional 6.1% equity interest in Hitrans for a total consideration of RMB 21.07 million (approximately $3.0 million). Upon the completion of this transaction in December 2025, our equity interest in Hitrans increased from 67.33% to 73.46%, representing 79.64% of paid-up capital.

***Trends in End Applications of Our Products***

Our business, financial condition and results of operations depend on whether end-application manufacturers are willing to use our products. We target the battery markets for light electric vehicles, electric vehicles, energy storage (such as residential energy supply & UPS application), and other high-power electric devices. However, our revenues derived from a specific end-application have been fluctuating depending on various factors such as governmental policies, technological changes, evolving industry standards and customer needs and preferences. After the acquisition of Hitrans, we have broadened our target markets to include battery manufacturers, offering them cathode materials and precursors.

In recent years, the majority of our revenue has been driven by sales of cells used in light electric vehicles, residential energy supply and UPS applications. Engineered for uncompromising safety and high energy density, our cylindrical lithium batteries are optimized for light electric vehicles that demand superior mechanical resilience and efficient thermal management. Furthermore, their highly adaptable form factor and inherent structural stability make them the ideal power solution for demanding energy storage applications—such as portable power stations and residential energy systems—where reliability and safety are absolute priorities. As a result, our top customers in recent years have predominantly come from these sectors, and we expect this trend to continue given the growing demand for our batteries.

Starting in 2025, our Nanjing BFD subsidiary initiated dedicated battery pack integration operations. By assembling individual cells into complete, plug-and-play battery systems, we bypass intermediate integrators to serve end-users directly. Currently, these manufactured pack units are predominantly engineered for, and utilized within, the light electric vehicle battery swapping infrastructure throughout the African market.

**Our Corporate History and Structure**

CBAK Energy Technology, Inc. was incorporated in the State of Nevada on October 4, 1999. The shares of common stock of CBAK Energy Technology, Inc. traded in the over-the-counter market through the Over-the-Counter Bulletin Board between 2005 and May 31, 2006. On May 31, 2006, CBAK Energy Technology, Inc. obtained approval to list its common stock on the Nasdaq Global Market, and trading commenced on the same date under the symbol "CBAK." Effective November 30, 2018, the trading symbol for the common stock of CBAK Energy Technology, Inc. changed from CBAK to "CBAT." Effective June 21, 2019, CBAK Energy Technology, Inc.'s common stock started trading on the Nasdaq Capital Market ("Nasdaq").

We currently conduct our business primarily through (i) CBAK Power; (ii) Nanjing CBAK (as defined below); (iii) CBAK Shangqiu (as defined below); (iv) Nanjing BFD; and (v) Hitrans. All of CBAK Energy Technology, Inc.'s subsidiaries are listed below:

● CBAK Energy Investments Holdings ("CBAK Energy Investments"), our wholly owned subsidiary, was incorporated on February 26, 2024 under the laws of the Cayman Islands. CBAK Energy Investments does not have any significant operations as of the date of this report.

● CBAK Energy Lithium Battery Holdings Co., Ltd. ("CBAK Energy Lithium Holdings"), our wholly owned subsidiary, incorporated on July 12, 2023 under the laws of the Cayman Islands in the name of "Hitrans Holdings," was renamed as "CBAK Energy Lithium Battery Holdings Co., Ltd" on February 29, 2024.

● CBAK Energy Technology Limited, our wholly owned subsidiary, was incorporated on September 1, 2025 under the laws of the Cayman Islands. CBAK Energy Technology Limited does not have any significant operations as of the date of this report.

● CBAK Energy C.A. Inc. ("CBAK Energy California"), our wholly owned subsidiary, was incorporated on November 17, 2025 under the laws of the State of California, the United States. CBAK Energy California does not have any significant operations as of the date of this report.

*BAK Asia and its subsidiaries*

 

● BAK Asia, or China BAK Asia Holdings Limited, an investment holding company formed under the laws of Hong Kong on July 9, 2013.

● CBAK Power, or Dalian CBAK Power Battery Co., Ltd., wholly-owned by BAK Asia, located in Dalian, China, incorporated on December 27, 2013, focuses on the development and manufacture of high-power lithium batteries.

● CBAK Shanqiu or CBAK New Energy (Shangqiu) Co., Ltd., wholly-owned by CBAK Power, located in Shangqiu, China, incorporated on July 25, 2023, focuses on the development and manufacture of high-power lithium batteries.

● Dalian CBAK Energy Technology Co., Ltd. ("CBAK Energy"), wholly-owned by BAK Asia, located in Dalian, China, incorporated on November 21, 2019. CBAK Energy does not have any significant operations as of the date of this report.

● CBAK Energy Lithium Battery Malaysia Sdn. Bhd. ("CBAK Lithium Battery Malaysia"), wholly-owned by BAK Asia, located in Malaysia, was incorporated on April 30, 2025. CBAK Lithium Battery Malaysia does not have any significant operations as of the date of this report.

*Hitrans Holdings and its subsidiaries*

 

● Hitrans Holdings Co., Ltd. ("Hitrans Holdings"), our wholly owned subsidiary, incorporated on July 28, 2021 under the laws of the Cayman Islands, previously named "CBAK Energy Technology, Inc.", was renamed as "Hitrans Holdings Co., Ltd." on February 29, 2024. Hitrans Holdings owns 100% equity interests of Hong Kong Hitrans.

 

● Hong Kong Hitrans Holdings Company Limited ("Hong Kong Hitrans"), a direct, wholly owned subsidiary of Hitrans Holdings, was incorporated on July 7, 2023 under the laws of Hong Kong, previously named "Hong Kong Nacell Holdings Company Limited", was renamed as "Hong Kong Hitrans Holdings Company Limited" on March 28, 2024. Hong Kong Hitrans had no significant operations as of the date of this report.

● Dalian CBAK New Energy Co., Ltd. ("CBAK New Energy"), wholly-owned by BAK Investments, located in Dalian, China, incorporated on August 14, 2013, previously named Dalian CBAK Trading Co., Ltd. until December 12, 2023, was transferred from BAK Asia to BAK Investments on December 26, 2023. On March 5, 2024, CBAK New Energy was transferred from BAK Investments to Hong Kong Hitrans. CBAK New Energy does not have any significant operations as of the date of this report.

● Hitrans, or Zhejiang Hitrans Lithium Battery Technology Co., Ltd, 73.46% owned by CBAK Power, located in Shangyu, Shaoxing, China, incorporated on December 16, 2015, principally engaged in the business of research and development, production and sales of cathode materials and precursors for NCM lithium batteries.

● Shaoxing Haisheng International Trading Co., Ltd. ("Haisheng"), wholly-owned by Hitrans, located in Shangyu, Shaoxing, China, incorporated on October 9, 2021, principally engaged in the business of cathode raw materials trading.

● Anhui Yuanchuang New Energy Materials Co., Ltd. ("Yuanchuang"), a wholly-owned subsidiary of Hitrans, located in Fuyang, Anhui, China, incorporated on January 9, 2025, focuses on the production of cathode materials for NCM lithium batteries.

*BAK Investments and its subsidiaries:*

● BAK Investments or BAK Asia Investments Limited, an investment holding company formed under the laws of Hong Kong;

● CBAK New Energy (Nanjing) Co., Ltd ("CBAK Nanjing"), wholly-owned by BAK Investments located in Nanjing, China, incorporated on July 31, 2020. CBAK Nanjing does not have any significant operations as of the date of this report.

● Nanjing CBAK or Nanjing CBAK New Energy Technology Co., Ltd., wholly owned by CBAK Nanjing, located in Nanjing, China, incorporated on August 6, 2020, focuses on the development and manufacture of larger-sized cylindrical lithium batteries.

● Nanjing BFD or Nanjing BFD New Energy Technology Co., Ltd, wholly-owned by CBAK Nanjing, incorporated on November 9, 2020, formally known as Nanjing Daxin, renamed on March 8, 2023, focuses on the development and manufacture of battery packs. Nanjing BFD's original business of the development and manufacture of electric bicycle, motorcycle and automotive spare parts has been gradually marginalized.

● Shenzhen CBAK Sodium Battery New Energy Co., Ltd ("CBAK Shenzhen"), a wholly-owned subsidiary of BAK Investments, located in Shenzhen, China, incorporated on October 29, 2024, focuses on the research and development of sodium batteries.

● CBAK New Energy (Suzhou) Co., Ltd ("CBAK Suzhou"), 90% owned by Nanjing BFD, located in Suzhou, China, incorporated on May 4, 2018, used to focus on the development and manufacture of new energy high power battery packs. CBAK Suzhou currently does not employee any local staff. Since its lease expired in October 2019, CBAK Suzhou has stopped using the facilities located at its registered address. Some of its business has been transferred to our subsidiaries in Dalian, and CBAK Suzhou's remaining assets are temporarily stored in our facilities in Dalian. We plan to dissolve CBAK Suzhou as soon as practicable.

Almost all of our business operations are conducted primarily through our Chinese subsidiaries. The chart below presents our current corporate structure:

![](ea028334901_img2.jpg)

**Change of Domicile**

On September 23, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with CBAK Energy Technology Limited ("CBAT Cayman"), an exempted company incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of the Company, pursuant to which the Company will merge with and into CBAT Cayman, with CBAT Cayman continuing as the surviving company (the "Redomicile Merger"). Upon consummation of the Redomicile Merger, CBAT Cayman will succeed, without interruption, to all of the Company's assets, liabilities, contractual rights and obligations. Each issued and outstanding share of the Company's common stock will be cancelled in exchange for one ordinary share in the capital of CBAT Cayman.

On March 18, 2026, the Company held a Special Meeting of Stockholders at which the Company's stockholders approved the Redomicile Merger.

The change of the Company's place of incorporation from Nevada to the Cayman Islands is expected to (i) allow the Company to reduce operational, administrative, legal and accounting costs over the long term because CBAT Cayman is expected to qualify as a "foreign private issuer" under the rules and regulations of the SEC and be exempt from certain rules under the Exchange Act, and (ii) more closely align the Company's corporate structure with its international corporate strategy and the corporate structure of those prominent issuers who are listed on Nasdaq or NYSE with a substantial portion of their operations located in China. The Company expects to complete the Redomicile Merger in the first half of 2026 and, upon completion, expects to qualify as a foreign private issuer as of June 30, 2026.

The only governmental or regulatory approvals required to complete the Redomicile Merger are compliance with U.S. federal and state securities laws and Nevada corporate law (including the filing of articles of merger with the Secretary of State of the State of Nevada), together with the requisite filing of the plan of merger and other ancillary documents with the Registrar of Companies in the Cayman Islands pursuant to the Cayman Companies Act. The Company has confirmed with the CSRC that the Redomicile Merger and the issuance of ordinary shares by CBAT Cayman in connection therewith will not be subject to a post-transaction filing procedure with the CSRC. It is a condition to the completion of the Redomicile Merger that CBAT Cayman's ordinary shares be authorized for listing on Nasdaq, subject to official notice of issuance and satisfaction of other standard conditions, and the Company expects that the ordinary shares will continue to trade under the symbol "CBAT."

The Redomicile Merger will be accounted for as a legal reorganization with no change in ultimate ownership interest immediately before and after the transaction, and all assets and liabilities will be recorded at historical cost as an exchange between entities under common control. After the Redomicile Merger, CBAT Cayman, as successor to the Company, will continue to be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Internal Revenue Code. The Company intends the Redomicile Merger to qualify as a reorganization qualifying as a statutory merger within the meaning of Section 368(a) of the Code, and assuming it so qualifies, stockholders of the Company will not recognize gain or loss for U.S. federal income tax purposes as a result of the Redomicile Merger.

**Our Products**

Our cylindrical lithium batteries are manufactured using lithium iron phosphate (LFP) materials. While LFP cells offer a lower energy density compared to batteries utilizing nickel-cobalt-manganese (NCM) materials, they provide significant advantages in terms of longer cycle life and enhanced safety. Additionally, we offer cylindrical sodium batteries using LiMO₂ materials, specifically designed to meet the demands of ultra-low temperatures and fast-charging applications.

We currently are manufacturing the following batteries, which can be used for various applications:

---

| | |
|:---|:---|
| **Battery Cell Type** | **End applications\*** |
| Cylindrical Lithium Battery (LFP) | Light electric vehicle |
| Cylindrical Sodium Battery | Electric car |
|  | Energy Storage including Residential Energy Supply and UPS |

---

On November 29, 2021, we announced the completion of the acquisition of 81.56% equity interests (such ownership percentage reduced to 73.46% of registered equity interests (representing 79.64% of paid-up capital as of December 31, 2025)) of Hitrans. We since then have incorporated the manufacture and sale of the following materials used in high power lithium batteries as part of our operations:

---

| | |
|:---|:---|
| **Material Type** | **End applications\*** |
| Cathode | High-power NCM lithium battery |
| Precursor | NCM cathode materials |

---

Precursors are in general made from nickel salts, cobalt salts and manganese salts, and are used in manufacturing cathode materials. Cathode materials are crucial raw materials to manufacture lithium-ion batteries.

**Sales and Marketing**

Currently, commercial strategy for our battery segment is driven by our integrated marketing divisions in Dalian and Nanjing. Having successfully established a comprehensive sales network throughout China, these teams are actively accelerating our global footprint by developing robust international distribution channels across Europe, North America, Africa, Southeast Asia, and South Asia.

Hitrans, our raw materials production unit, concentrates its marketing efforts on the domestic Chinese market, with a particular focus on South and East China, targeting players in the NCM lithium industry.

We also engage in marketing activities such as attending industry-specific conferences and exhibitions to promote our products and brand name. We believe these activities are beneficial to promoting our products and brand name among key industry participants.

**Suppliers**

The primary raw materials used in the manufacture of lithium-ion batteries include electrode materials, steel cases, caps, foils, electrolytes and separators. The primary raw materials used in our materials business include graphite, iron phosphate and lithium phosphate. The cost of these raw materials is a key factor in pricing our products. We source such raw materials from a number of suppliers across China. We are seeking to identify alternative raw material suppliers to the extent there are viable alternatives and to expand our use of alternative raw materials.

We aim to maintain multiple supply sources for each of our key raw materials to ensure that supply problems with any one supplier will not materially disrupt our operations. In addition, we constantly strive to develop strategic relationships with new suppliers to secure a stable supply of materials and introduce competition in our supply chain, thereby increasing our ability to negotiate better pricing and reducing our exposure to possible price fluctuations.

**Intellectual Property**

As of December 31, 2025, CBAK Power held 171 patents in the PRC, which will expire between 2026 to 2042. Among the 171 patents, two were acquired by BAK Asia, from an unrelated third party at RMB1 and were contributed as paid-in capital to CBAK Power. As of December 31, 2025, CBAK Energy held 9 patents in the PRC, all of which will expire between 2030 and 2040; Nanjing CBAK held 54 patents in the PRC, all of which will expire between 2031 and 2044; Nanjing BFD held 49 patents in the PRC, all of which will expire between 2028 and 2042; and Hitrans held 28 patents in the PRC, all of which will expire between 2028 and 2045.

We have registered the following Internet and WAP domain name: www.cbak.com.cn.

We also have unpatented proprietary technologies for our product offerings and key stages of the manufacturing process. Our management and key technical personnel have entered into agreements requiring them to keep confidential all information relating to our customers, methods, business and trade secrets during their terms of employment with us and thereafter and to assign to us their inventions, technologies and designs they develop during their term of employment with us.

We have institutionalized our efforts to safeguard our intellectual property rights by establishing an internal department that includes professionals such as attorneys, engineers, information managers and archives managers responsible for handling matters relating to our intellectual property rights. We have published internally a series of rules to protect our intellectual property rights.

While our intellectual property rights in the aggregate are important to our business operations, we do not believe that our business would be materially affected by the expiration of any particular intellectual property right.

**Seasonality**

Seasonality does not materially affect our business or operating results. As our battery cell and battery material products have a wide range of applications, we have not experienced significant seasonal fluctuations in market demands or sales recently. Market demands for our products generally slightly drop during the Chinese New Year holiday, a major national holiday in China.

**Customers**

Currently, major customers for our high -power lithium batteries business include Anker Innovations, Spiro Mobility, Scania (which became our direct ordering entity following its acquisition of a Northvolt business unit that originally procured our products, subsequently operating under the name Bucida), Ather Energy, Shenzhen ACE Battery, DAT Bike and Inverted Energy. We believe that our revenue and market share will increase as we gradually expand our high-power battery production to meet the growing demand for these batteries.

***Geography of Sales***

Our revenues are generated from both domestic and international customers, but the percentage contribution from each group varies significantly from year to year. The following table sets forth certain information relating to our total revenues by location of our customers for the last two fiscal years:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fiscal Years ended** | **Fiscal Years ended** | **Fiscal Years ended** | **Fiscal Years ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  |<br>**Amount** | **% of Net**<br>**Revenues** |<br>**Amount** | **% of Net**<br>**Revenues** |
|  | **(in thousands of U.S. dollars, except percentages)** | **(in thousands of U.S. dollars, except percentages)** | **(in thousands of U.S. dollars, except percentages)** | **(in thousands of U.S. dollars, except percentages)** |
| Mainland China | $147280627 | 75 | $98925752 | 56 |
| Europe | 7526077 | 4 | 65746989 | 37 |
| India | 16551510 | 9 | 8051905 | 5 |
| Africa | 17037599 | 9 |  |  |
| Others | 6793493 | 3 | 3889963 | 2 |
| Total | $195189306 | 100 | $176614609 | 100 |

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**Competition**

We face intense competition from high-power lithium battery makers and raw materials manufacturers in China. The following table sets forth our major competitors in the battery market broken down by battery models as well as in the materials market, as of December 31, 2025:

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| | |
|:---|:---|
| **Product Type** |  |
| Model 26650/ 26700 China | Shandong Goldencell; EVPS; Power Long Battery |
| Model 32140 China | Gotion Hi-tech; EVE Battery |
| Model 40135 China | EVE Battery; Great Power; Do-Fluoride |
| Battery Pack China | Greenway; Ampace |
| Cathode & Precursor China | Beijing Easpring; Ronbay Technology; Huayou Cobalt |

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We believe that we are able to leverage our cutting-edge battery manufacturing techniques and R&D capabilities to compete favorably with our competitors. Compared to other Chinese battery makers, we believe we have higher consistency and safety in product quality, which enables us to compete favorably with our competitors.

**Research and Development**

The development of advanced electric vehicles and new-type energy storage in China has created a significant demand for the R&D of next-generation advanced lithium, sodium and other type of batteries and their key materials, which must be characterized by high energy density, high security, long-lasting life, and low cost. Furthermore, the training of technical talent in this field is equally important.

We have strategically restructured our innovation pipeline by establishing a centralized R&D Institute. This new institute seamlessly integrates research personnel from our Dalian and Nanjing bases and wholly incorporates the staff, equipment, and proprietary technological achievements of BAK Tianjin. Drawing on BAK Tianjin's extensive pedigree—which includes the successful development and distribution of high-power lithium-ion batteries for electric mobility and energy storage applications dating back to as early as December 2006—our R&D capabilities are now fully unified. Furthermore, to support future scaling, we are currently investing in the construction of a larger, next-generation R&D center as a primary initiative within our Phase II Nanjing Project.

Our R&D personnel developed model 32140 and 40135 lithium cells in house which have become one of the best large cylindrical battery models in the world. Furthermore, our R&D team successfully developed model 32140 sodium cell, making us one of only a few companies in the world that are capable of mass producing sodium-ion batteries. Our sodium cells can be used in ultra-low temperature conditions and have fast-charging capability. Actual testing data shows that our model 32140 sodium cells retain 85% capacity under -40℃ and could be charged to 90% capacity within 10 minutes.

To defend and advance our market positioning, we are broadening our cylindrical battery lineup with next-generation, large-format models, including the 60115, 60135, and 60150. These advanced form factors offer substantially higher energy capacities than our preceding product generations. Ultimately, this structural transition unlocks significant manufacturing efficiencies—driving down unit production costs while elevating overall performance—expressly designed to capture expanding demand within the LEV and energy storage sectors.

In addition to our efforts to develop new batteries at lower cost and higher energy density, we are also focusing on the research and development of high-nickel low-cobalt materials featuring high energy density, low cost and broader applications. We operate an advanced R&D center in Shaoxing that is focused on battery materials. Additionally, we invested significant R&D resources to develop single-crystal high-voltage products as well as high-rate materials which can enable a 15C discharge rate.

**Human Capital**

We had a total of approximately 1,739 employees as of December 31, 2025, all of whom are full-time employees. The following table sets forth the number of our employees by function.

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| | |
|:---|:---|
| **Function** | **Number** |
| Production | 1067 |
| Research and development | 379 |
| Sales and marketing | 46 |
| General and administrative | 247 |
| **Total** | 1739 |

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Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages.

We believe we maintain good relations with our employees.

**Available Information**

We make available free of charge, on or through our investor relations website, http://ir.cbak.com.cn, our annual reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and amendments to such filings, as soon as reasonably practicable after each is electronically filed with, or furnished to, the SEC. The SEC maintains a website that contains our reports, proxy and information statements, and our other SEC filings. The address of the SEC's website is www.sec.gov. Information appearing on our website is not part of any report that we file with the SEC.

**Regulations**

 

*Company Law*

The establishment, operation and management of corporate entities in mainland China are governed by the Company Law of the People's Republic of China, or the China Company Law, which was adopted by the Standing Committee of the National People's Congress ("SCNPC") in December 1993, implemented in July 1994, and subsequently amended in December 1999, August 2004, October 2005, December 2013, October 2018 and December 2023. Under the China Company Law, companies are generally classified into two categories: limited liability companies and companies limited by shares. The China Company Law also applies to foreign-invested limited liability companies and foreign-invested companies limited by shares. Pursuant to the China Company Law, where laws on foreign investment have other stipulations, such stipulations shall prevail.

*Foreign Investment Law*

On March 15, 2019, the National People's Congress approved the Foreign Investment Law of the PRC, or the "Foreign Investment Law," which came into effect on January 1, 2020, repealing simultaneously the Law of the PRC on Sino-foreign Equity Joint Ventures, the Law of the PRC on Wholly Foreign-owned Enterprises, and the Law of the PRC on Sino-foreign Cooperative Joint Ventures. The Foreign Investment Law adopts the management system of pre-establishment national treatment and negative list for foreign investment. Regulations for the Implementation of the Foreign Investment Law of the PRC came into effect on January 1, 2020. Policies in support of enterprises shall apply equally to foreign-funded enterprises according to laws and regulations. Pursuant to Foreign Investment Law and the Negative List, promulgated jointly by MOFCOM and NDRC on December 27, 2021, and became effective on January 1, 2022, foreign investors shall not invest in sectors that forbid foreign investment as specified in the Negative List. In sectors under the Negative List where foreign investment is restricted, foreign investors shall comply with the special administrative measures for restrictive access set in the Negative List on equity ratio, senior management, etc., when making investments. Where a foreign investor or enterprise with foreign investment invests in a field other than those in the Negative List, it shall register by the principle of consistency of domestic and foreign investment. Fair competition for foreign investment enterprises to participate in government procurement activities shall be protected. The Foreign Investment Law also stipulates the protection of intellectual property rights and trade secrets.

Notice on the Implementation of Foreign Investment Law and the Registration of Foreign-funded Enterprises was issued by the SAMR on December 31, 2019. According to such notice, the SAMR conducts business registration, and the applicant shall apply for the registration of foreign-funded enterprises through the enterprise registration system. The registration authority shall conduct a formal examination on relevant application materials.

The Measures for Reporting Foreign Investment Information were adopted by the MOFCOM on December 19, 2019, approved by the SAMR, and became effective on January 1, 2020. According to such measures, when a foreign investor directly or indirectly conducts investment activities in China, the foreign investor or foreign-invested enterprise shall submit investment information to the competent department of commerce in accordance with the measures.

None of our PRC subsidiaries' business falls within the Negative List, and therefore, all of our PRC subsidiaries are able to conduct their business without being subject to restrictions imposed by foreign investment laws and regulations in China.

 

 

*Regulations Relating to Intellectual Property*

*Copyright*

China has adopted comprehensive legislation governing intellectual property rights, including trademarks and copyrights. China is a signatory to the primary international conventions on intellectual property rights and has been a member of the Agreement on Trade Related Aspects of Intellectual Property Rights since its accession to the WTO in December 2001.

In September 1990, the SCNPC promulgated the Copyright Law of the People's Republic of China, effective in June 1991 and amended in 2001, 2010 and 2020 respectively. The amended Copyright Law extends copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary registration system administered by the Copyright Protection Centre of China.

In order to further implement the Computer Software Protection Regulations, promulgated by the State Council in December 2001 and amended in 2011 and 2013 respectively, the National Copyright Administration issued Computer Software Copyright Registration Procedures in February 2002, which specify detailed procedures and requirements with respect to the registration of software copyrights.

*Trademark*

According to the Trademark Law of the People's Republic of China, promulgated by the SCNPC in August 1982, and amended in 1993, 2001, 2013 and 2019 respectively, the Trademark Office of China National Intellectual Property Administration is responsible for the registration and administration of trademarks and is also responsible for resolving trademark disputes in China. Registered trademarks are valid for ten years from the date the registration is approved. A registrant may apply to renew a registration within twelve months before the expiration date of the registration. If the registrant fails to apply in a timely manner, a grace period of six additional months may be granted. If the registrant fails to apply before the grace period expires, the registered trademark shall be deregistered. Renewed registrations are valid for ten years. In April 2014, the State Council issued the revised Implementation of the Trademark Law, which specified the requirements of applying for trademark registration and review.

*Patent*

According to the Patent Law of the People's Republic of China promulgated by the SCNPC in 1984 and amended in 1992, 2000, 2008 and 2020, respectively, a patentable invention or a utility model must meet three criteria: novelty, inventiveness and practicability. A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application date.

*Domain Names*

In May 2012, the China Internet Network Information Center issued the Implementing Rules for Domain Name Registration setting forth the detailed rules for registration of domain names. In August 2017, China's Ministry of Industry and Information Technology promulgated the Administrative Measures on Internet Domain Names, or the Domain Name Measures. The Domain Name Measures regulate the registration of domain names, such as the top-level domain name ".cn".

*Regulations Relating to Foreign Exchange*

Pursuant to the Foreign Exchange Administration Regulations, as amended in August 2008, the RMB is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside the PRC, unless SAFE's prior approval is obtained and prior registration with SAFE is made. In May 2013 SAFE promulgated the Circular of the SAFE on Printing and Distributing the Administrative Provision on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents which provides for and simplifies the operational steps and regulations on foreign exchange matters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement and sales of foreign exchange.

Pursuant to the Circular on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicles or the SAFE Circular 37, promulgated by SAFE and which became effective on July 4, 2014, (a) a PRC resident shall register with the local SAFE branch before he or she contributes assets or equity interests in an overseas special purpose vehicle, or Overseas Special Purpose Vehicles (SPV), that is directly established or controlled by the PRC Resident for the purpose of conducting investment or financing; and (b) following the initial registration, the PRC Resident is also required to register with the local SAFE branch for any major change, in respect of the Overseas SPV, including, among other things, a change of the Overseas SPV's PRC Resident shareholder(s), name of the Overseas SPV, term of operation, or any increase or reduction of the Overseas SPV's registered capital, share transfer or swap, and merger or division. Pursuant to SAFE Circular 37, failure to comply with these registration procedures may result in penalties.

Pursuant to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or the SAFE Notice 13, which was promulgated on February 13, 2015 and with effect from June 1, 2015, the foreign exchange registration under domestic direct investment and the foreign exchange registration under overseas direct investment is directly reviewed and handled by banks in accordance with the SAFE Notice 13, and the SAFE and its branches shall perform indirect regulation over the foreign exchange registration via banks

*Regulations Relating to Dividend Distributions*

According to the PRC Company Law and Foreign Investment Law, each of our PRC subsidiaries, as a foreign invested enterprise, or FIE, are required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as "resident" for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied.

*Regulations Relating to Overseas Listings*

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters.

On December 24, 2021, the China Securities Regulatory Commission, or the CSRC, issued Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the "Administration Provisions"), and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the "Measures"), which were published for public comments only, for which the comment period expired on January 23, 2022.

The Administration Provisions and Measures (collectively, the "Draft Rules Regarding Overseas Listing") for overseas listings lay out specific requirements for filing documents and include unified regulation management, strengthening regulatory coordination, and cross-border regulatory cooperation. Domestic companies seeking to list abroad must carry out relevant security screening procedures if their businesses involve such supervision. Companies endangering national security are among those off-limits for overseas listings.

However, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its supporting guidelines are formal regulations issued based on the Draft Rules Regarding Overseas Listing. The State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), although still in draft form, has effectively been replaced by the Trial Measures and its supporting guidelines. The Trial Measures and its supporting guidelines, reiterate the basic principles of the Draft Rules Regarding Overseas Listing and impose substantially the same requirements for the overseas securities offering and listing by domestic enterprises. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, which was promulgated on February 17, 2023 and became effective on the same day, the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. The Opinions, the Trial Measures and any related implementing rules to be enacted may subject us to additional compliance requirements in future financial activities.

In August 2006, six PRC regulatory authorities, including the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, amended in June 2009. The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to the MOFCOM for approval. The M&A Rules also require that an Overseas SPV formed for overseas listing purposes and controlled directly or indirectly by the PRC Citizens shall obtain the approval of the CSRC prior to overseas listing and trading of such Overseas SPV's securities on an overseas stock exchange.

Based on current PRC laws and regulations, our corporate structure and arrangements are not subject to the M&A Rules. However, there are substantial uncertainties as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.

*Regulations Relating to Employment*

The Labor Law of the People's Republic of China, or the Labor Law, which became effective in January 1995 and was amended in 2018, and the Employment Contract Law of the People's Republic of China, or the Employment Contract Law, effective in January 2008 and amended in 2012, require employers to provide written contracts to their employees, restrict the use of temporary workers and aim to give employees long-term job security. Employers must pay their employees' wages equal to or above local minimum wage standards, establish labor safety and workplace sanitation systems, comply with state labor rules and standards and provide employees with appropriate training on workplace safety. In September 2008, the State Council promulgated the Implementing Regulations for the PRC Employment Contract Law which became effective immediately and interprets and supplements the provisions of the Employment Contract Law.

Under the Labor Contract Law, an employer shall limit the number of dispatched workers so that they do not exceed a certain percentage of its total number of workers. In January 2014, the MOHRSS issued the Interim Provisions on Labor Dispatching, which became effective in March 2014, pursuant to which it provides that the number of dispatched workers used by an employer shall not exceed 10% of the total number of its employees.

The PRC governmental authorities have passed a variety of laws and regulations regarding social insurance and housing funds from time to time, including, among others, the Social Insurance Law of the People's Republic of China, the Regulation of Insurance for Labor Injury, the Regulations of Insurance for Unemployment, the Provisional Insurance Measures for Maternal Employees, the Interim Administrative Provisions on Registration of Social Insurance and the Administrative Regulations on the Housing Provident Fund. Pursuant to these laws and regulations, enterprises in the PRC shall provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, occupational injury insurance and medical insurance, as well as housing fund and other welfare plans. Failure to comply with such laws and regulations may result in various fines and legal sanctions and supplemental contributions to the local social insurance and housing fund regulatory authorities.

*Regulations Relating to Environmental Protection*

The Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989, and amended on April 24, 2014.

As we conduct our manufacturing activities in China, we are subject to the requirements of PRC environmental laws and regulations on air emission, wastewater discharge, solid waste and noise. The major environmental regulations applicable to us include the PRC Environmental Protection Law, the PRC Law on the Prevention and Control of Water Pollution and its Implementation Rules, the PRC Law on the Prevention and Control of Air Pollution and its Implementation Rules, the PRC Law on the Prevention and Control of Solid Waste Pollution, and the PRC Law on the Prevention and Control of Noise Pollution. We aim to comply with environmental laws and regulations. We have built environmental treatment facilities concurrently with the construction of our manufacturing facilities, where waste air, wastewater and waste solids we generate can be treated in accordance with the relevant requirements. We outsource the disposal of solid waste we generate in the Dalian facility to a third-party contractor. Certain key materials used in manufacturing, such as cobalt dioxide, electrolyte and separators, have proven innocuous to worker's health and safety as well as the environment. We are not subject to any admonitions, penalties, investigations or inquiries imposed by the environmental regulators, nor are we subject to any claims or legal proceedings to which we are named as a defendant for violation of any environmental law or regulation. We are not aware of any threatened claim, action or legal proceedings that would have a material adverse effect on our business, financial condition or results of operations.

*Regulations Relating to Tax in the PRC*

*Income Tax*

The PRC Enterprise Income Tax Law was promulgated in March 2007 and amended in December 2018. The PRC Enterprise Income Tax Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. Under the PRC Enterprise Income Tax Law, an enterprise established outside China with "de facto management bodies" within China is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation regulations to the PRC Enterprise Income Tax Law, a "de facto management body" is defined as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.

In April 2009, the Ministry of Finance, or MOF, and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business, or the Circular 59. In December 2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or the Circular 698. Both Circular 59 and Circular 698 became effective retroactively as of January 2008. In March 2011, SAT issued the Notice on Several Issues Regarding the Income Tax of Non-PRC Resident Enterprises, or the SAT Circular 24, effective in April 2011. By promulgating and implementing these circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-resident enterprise.

In February 2015, SAT issued the Notice on Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises, or the SAT Circular 7, to supersede existing provisions in relation to the indirect transfer as set forth in Circular 698, while the other provisions of Circular 698 remain in force. SAT Circular 7 introduces a new tax regime that is significantly different from that under Circular 698. SAT Circular 7 extends its tax jurisdiction to capture not only indirect transfers as set forth under Circular 698 but also transactions involving transfer of immovable property in China and assets held under the establishment, and placement in China, of a foreign company through the offshore transfer of a foreign intermediate holding company. SAT Circular 7 also addresses transfer of the equity interest in a foreign intermediate holding company broadly. In addition, SAT Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings. However, it also brings challenges to both the foreign transferor and transferee of the indirect transfer as they have to determine whether the transaction should be subject to PRC tax and to file or withhold the PRC tax accordingly. In October 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, amended in June 2018. The SAT Circular 37 superseded the Non-resident Enterprises Measures and SAT Circular 698 as a whole and partially amended some provisions in SAT Circular 24 and SAT Circular 7. SAT Circular 37 purports to clarify certain issues in the implementation of the above regime, by providing, among others, the definition of equity transfer income and tax basis, the foreign exchange rate to be used in the calculation of withholding amount, and the date of occurrence of the withholding obligation. Specifically, SAT Circular 37 provides that where the transfer income subject to withholding at source is derived by a non-PRC resident enterprise in installments, the installments may first be treated as recovery of costs of previous investments. Upon recovery of all costs, the tax amount to be withheld must then be computed and withheld.

*Value-Added Tax*

The PRC Provisional Regulations on Value-Added Tax were promulgated by the State Council on December 13, 1993, which became effective on January 1, 1994 and were subsequently amended from time to time. The Detailed Rules for the Implementation of the PRC Provisional Regulations on Value-Added Tax (2011 Revision) was promulgated by the Ministry of Finance on December 25, 1993 and subsequently amended on December 15, 2008 and October 28, 2011. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations on Business Tax and Amending the PRC Provisional Regulations on Value-Added Tax. Pursuant to these regulations, rules and decisions, all enterprises and individuals engaged in sale of goods, provision of processing, repair, and replacement services, sales of services, intangible assets, real property, and the importation of goods within the PRC territory are VAT taxpayers. On March 21, 2019, the Ministry of Finance, the SAT, and the General Administration of Customs jointly issued the Announcement on Relevant Policies on Deepen the Reform of Value-Added Tax. Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price, starting from April 1, 2019, VAT rate was lowered to 13%. On September 30, 2019, the Ministry of Finance and the State Taxation Administration jointly issued the Announcement on Clarifying the VAT Additional Deduction Policy for the Living Services, pursuant to which, from October 1, 2019 to December 31, 2021, the taxpayers engaging in providing living services are allowed to deduct additional 15% of the deductible input VAT amount for the current period from the payable tax. For aforementioned taxpayers providing production and living services relating to Announcement on Policies for Deepening the VAT Reform and Announcement on Clarifying the VAT Additional Deduction Policy for the Living Services, the input VAT additional deduction policies is further extended to December 31, 2022 according to the regulations. From January 1, 2023 to December 31, 2024, the VAT Additional Deduction policy is implemented in accordance with the following provisions: (i). Taxpayers in the productive service industry are allowed to add 5% of the current deductible input tax to offset the taxable amount; (ii). Taxpayers in the lifestyle service industry are allowed to deduct 10% of the current deductible input tax to offset the taxable amount. On December 25, 2024, the prevailing VAT regulations were enacted into the Value-Added Tax Law of the People's Republic of China, which came into effect on January 1, 2026.

*Export Tax Rebate Policies*

 

Pursuant to the Announcement on Adjustments to Export Tax Rebate Policies (Announcement [2024] No. 15) jointly issued by the Ministry of Finance and the SAT, which took effect on December 1, 2024, and remained in force throughout 2025, the PRC government implemented a phased reduction (the "Phase-out Policy") of export tax rebates for specific categories of goods. Under this policy, the export tax rebate rate for certain products, including but not limited to photovoltaic products, lithium-ion batteries, and certain non-metallic mineral products, was reduced from 13% to 9%. Furthermore, export tax rebates for aluminum, copper, and chemically modified oils and fats were entirely eliminated.

Following these adjustments, in January 2026, the Ministry of Finance and the SAT announced further optimizations to the export rebate structure to curb industrial overcapacity. Effective April 1, 2026, the export VAT rebate for photovoltaic products will be canceled (reduced to 0%), while the rebate for battery products will be reduced to 6%, with a scheduled complete elimination by January 1, 2027. These changes represent a strategic shift towards high-quality growth and may impact the net cost of exported goods depending on the enterprise's ability to pass through these costs to international customers.

**ITEM 1A. RISK FACTORS.**

**RISKS RELATED TO DOING BUSINESS IN CHINA**

***The PCAOB had historically been unable to inspect our former auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our former auditor in the past has deprived our investors of the benefits of such inspections. Our common stock may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of our common stock, or the threat of its being delisted, may materially and adversely affect the value of your investment.***

Our current auditor, ARK Pro CPA & Co, as well as our former auditor, Centurion ZD CPA & Co, the independent registered public accounting firms that issue the audit reports included elsewhere in this annual report, as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, are currently subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess their compliance with the applicable professional standards. Both our current and former auditors are located in Hong Kong, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in our common stock were deprived of the benefits of such PCAOB inspections until 2022. The inability of the PCAOB to conduct inspections of auditors in Hong Kong in the past has made it more difficult to evaluate the effectiveness of our independent registered public accounting firms' audit procedures or quality control procedures as compared to auditors that are subject to the PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our common stock would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in our common stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

Pursuant to the HFCAA, as amended, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our common stock from being traded on a national securities exchange or in the over-the-counter trading markets in the United States.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor was subject to that determination. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 10-K for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. For this reason, we have not been identified as a Commission-Identified Issuer after we filed on April 14, 2023 the annual report on Form 10-K for the fiscal year ended December 31, 2022 and we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 10-K for the fiscal year ended December 31, 2025.

Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. In accordance with the HFCAA, as amended, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our common stock when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our common stock. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

***The PRC government exerts substantial influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China can change quickly.***

While an increasing portion of our products are sold in international markets, including Europe, North America, Southeast Asia, South Asia and Africa, substantially all of our operations currently are conducted in the PRC. Accordingly, our financial condition and results of operations are affected to a significant extent by the economic, political and legal developments in the PRC. The PRC economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, and control of foreign exchange and allocation of resources. The PRC government has implemented various measures to encourage economic growth and to guide the allocation of resources. Some of these measures may benefit the overall PRC economy but may also have a negative effect on us. Our financial condition and results of operations could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. However, the PRC government has actively encouraged foreign capital to invest in China and has an open mindset welcoming a free-market economy in areas unrelated to military and national security.

The Chinese government in recent years has published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will not in the future release regulations or policies regarding our industry that could require us or our PRC subsidiaries to seek permission from Chinese authorities to continue to operate our business in China, which may adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government have indicated an intent to increase the government's oversight and control over offerings of companies with significant operations in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us. Any such action, once taken by the Chinese government, could significantly limit or completely hinder our ability to offer our securities, and could cause the value of such securities to significantly decline or become worthless.

For example, in July 2021, the Chinese government provided new guidance on China-based companies raising capital outside of China, including through arrangements via VIEs. In light of such developments, the SEC has imposed enhanced disclosure requirements on China-based companies seeking to register securities with the SEC. Although we have never adopted a VIE structure and our business in China does not involve any type of restricted industry under Chinese regulations, any future Chinese, U.S. or other rules and regulations that place restrictions on capital raising or other activities by companies with extensive operations in China could adversely affect our business. If the business environment in China deteriorates from the perspective of domestic or international investment, or if relations between China and the United States or other governments deteriorate, the Chinese government may intervene with our operations, and our business in China, as well as the value of our securities, may also be adversely affected.

***The PRC government has increasingly strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers, which could result in a material change in our operations and our common stock could decline in value or become worthless.***

The PRC government has indicated an intent to take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For example, on July 6, 2021, the relevant PRC government authorities made public the Opinions on Strictly Scrutinizing Illegal Securities Activities in Accordance with the Law, or the Opinions. These Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision of overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based over-seas-listed companies.

On December 24, 2021, the CSRC issued the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), collectively the Draft Overseas Listing Regulations, for public comment until January 23, 2022.

Following issuance of the Draft Overseas Listing Regulations, on February 17, 2023, the CSRC issued the Notice on Filing Arrangements for Overseas Securities Offering and Listing by Domestic Companies (the "CSRC Filing Notice"), stating that the CSRC has published the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures") and five supporting guidelines (the "Listing Guidelines"), collectively the Trial Measures and Listing Guidelines. Among others, the Trial Measures and Listing Guidelines provide that overseas offerings and listings by PRC domestic companies shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) require submission of relevant
 materials that contain a filing report and a legal opinion, providing truthful, accurate and complete information on matters including
 but not limited to the shareholders of the issuer. Where the filing documents are complete and in compliance with stipulated requirements,
 the CSRC shall, within 20 working days after receipt of filing documents, conclude the filing procedure and publish filing results
 on the CSRC website. Where filing documents are incomplete or do not conform to stipulated requirements, the CSRC shall request supplementation
 and amendment thereto within five working days after receipt of the filing documents. The issuer should then complete supplementation
 and amendment within 30 working days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) abide by laws, administrative
 regulations and relevant state rules concerning foreign investment in China, state-owned asset administration, industry regulation
 and outbound investment, and shall not disrupt the PRC domestic market order, harm state or public interests or undermine the lawful
 rights and interests of PRC domestic investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) abide by national secrecy
 laws and relevant provisions. Necessary measures shall be taken to fulfill confidentiality obligations. Divulgence of state secrets
 or working secrets of government agencies is strictly prohibited. Provision of personal information and important data, etc., to
 overseas parties in relation to overseas offering and listing of PRC domestic companies shall be in compliance with applicable laws,
 administrative regulations and relevant state rules; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) be made in strict compliance
 with relevant laws, administrative regulations and rules concerning national security in the spheres of foreign investment, cybersecurity,
 data security, etc., and issuers shall duly fulfill their obligations to protect national security. If the intended overseas offering
 and listing necessitates a national security review, relevant security review procedures shall be completed according to the law
 before the application for such offering and listing is sub-mitted to any overseas parties such as securities regulatory agencies
 and trading venues;

The Trial Measures came into effect on March 31, 2023. PRC domestic companies seeking to offer and list securities (which, for the purposes of the Trial Measures, are defined thereunder as equity shares, depository receipts, corporate bonds convertible to equity shares, and other equity securities that are offered and listed overseas, either directly or indirectly, by PRC domestic companies) in overseas markets, either via direct or indirect means, must file with the CSRC with-in three working days after their application for an overseas listing is submitted.

The Trial Measures provide that where a PRC domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic entity responsible, file with the CSRC. The Trial Measures stipulate that an overseas listing will be determined as "indirect" if the issuer meets both of the following conditions: (1) 50% or more of any of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year are accounted for by PRC domestic companies ("Condition I"), and (2) the main parts of the issuer's business activities are conducted in the PRC, or its main places of business are located in the PRC, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in the PRC ("Condition II"); whether Chinese citizens from Taiwan, Hong Kong, and Macau are included in the foregoing specification is not specified. The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall be made on a 'substance over form' basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer's PRC counsel should follow the principle of 'sub-stance over form' in order to identify and argue whether the issuer should complete a filing under the Trial Measures. Sub-sequent securities offerings of an issuer in (i) the same overseas market where it has previously offered and listed securities, and (ii) an overseas market other than one where the issuer has previously offered and listed securities shall be filed with the CSRC within three working days after offerings are completed. Additionally, the Trial Measures stipulate that after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report to the CSRC within three working days after the occurrence and public disclosure of (i) a change of control thereof, (ii) investigations of or sanctions imposed on the issuer by overseas securities regulators or relevant competent authorities, (iii) changes of listing status or transfers of listing segment, and (iv) a voluntary or mandatory delisting.

The CSRC Filing Notice states that, beginning from March 31, 2023, PRC domestic enterprises which have already issued and listed securities overseas and fall within the scope of filing under the Trial Measures shall be considered "existing enterprises" ("Existing Listed Enterprises"). Existing Listed Enterprises are not required to complete filings immediately; rather, Existing Listed Enterprises should complete filings if they are subsequently involved in matters require filings, such as follow-on financing activities, in accordance with the Trial Measures.

There is a possibility that we may be deemed as an Existing Listed Enterprise as defined under the CSRC Filing Notice, and that future offerings of listed securities or listings outside China by us may be subject to CSRC filing requirements in accordance with the Trial Measures.

If a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings and fines. In addition, the controlling shareholders, actual controllers, the person directly in charge, and other directly liable persons of such domestic company may also be subject to administrative penalties, including warnings and fines. These regulatory authorities may also impose restrictions and penalties on the Company's operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our common stock.

On February 24, 2023, the CSRC, together with the Ministry of Finance, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the "Provisions." The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies," and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by our Company, or our PRC subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Although the Trial Measures, Listing Guidelines and Revised Provisions have been in effect since March 31, 2023, there remain substantial uncertainties surrounding their enforcement. We cannot assure you that, if required, we would be able to complete the filings and fully comply with the relevant new rules on a timely basis, if at all. The PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas, and any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause the value of such securities to significantly decline or become worthless.

***Changes in U.S. and Chinese regulations or in relations between the United States and China may adversely impact our business, our operating results, our ability to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice.***

The U.S. government, including the SEC, has made statements and taken certain actions that led to changes to United States and international relations, and will impact companies with connections to the United States or China. The SEC has issued statements primarily focused on companies with significant China-based operations, such as us. For example, on July 30, 2021, Gary Gensler, former Chairman of the SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations. The statement also addressed risks inherent in companies with VIE structures. We have never adopted a VIE structure and are not in any industry that is subject to foreign ownership limitations by China. However, it is possible that the Company's filings with the SEC may be subject to enhanced review by the SEC.

In response to the SEC's July 30, 2021 statement, the CSRC announced on August 1, 2021, that "it is our belief that Chinese and U.S. regulators shall continue to enhance communication with the principle of mutual respect and cooperation, and properly address the issues related to the supervision of China-based companies listed in the U.S. so as to form stable policy expectations and create benign rules framework for the market." The CSRC pledged to continue to collaborate "closely with different stakeholders including investors, companies, and relevant authorities to further promote transparency and certainty of policies and implementing measures," and emphasized that it "has always been open to companies' choices to list their securities on international or domestic markets in compliance with relevant laws and regulations." If any new legislation, executive orders, laws and/or regulations are implemented, if the U.S. or Chinese governments take retaliatory actions due to the recent U.S.-China tension or if the Chinese government exerts more oversight and control over securities offerings that are conducted in the United States, such changes could have an adverse effect on our business, financial condition and results of operations, our ability to raise capital and the value of our securities.

August 9, 2023, the Biden administration released an executive order and an advanced notice of proposed rule-making (the "ANPRM") providing a conceptual framework for outbound investment controls focused on China. Further to this ANPRM, on June 21, 2024, the U.S. Department of the Treasury (the "Treasury") issued a proposed rule on outbound U.S. investments involving China that generally follows the ANPRM. On October 28, 2024, the Treasury issued a Final Rule to implement the executive order of August 9, 2023. The Final Rule became effective on January 2, 2025. The Final Rule targets investments involving persons and entities associated with "countries of concern," including China, and it imposes investment prohibition and notification requirements on a wide range of investments in companies engaged in certain types of activities relating to three sectors: (1) advanced microchips and microelectronics, (2) quantum computing, and (3) artificial intelligence systems ("Covered Activities"), with persons from countries of concern engaged in these Covered Activities defined as "Covered Foreign Persons." Investments by U.S. persons subject to the Final Rule, which are defined as "covered transactions," include acquisitions of equity interests, certain debt financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment fund. The Final Rule excludes some investments from the scope of covered transactions, including those in publicly traded securities listed on a national stock exchange. The Final Rule is aimed at exerting greater U.S. government oversight over U.S. direct and indirect investments involving China, and may introduce new hurdles and uncertainties for cross-border collaborations, investments, and funding opportunities of China-based issuers including us. We do not believe we are a Covered Foreign Person under the Final Rule. However, if we were to be deemed a Covered Foreign Person engaged in Covered Activities, the Final Rule could limit our ability to raise capital from U.S. investors generally, in which case our ability to raise such capital may be significantly and negatively affected, which could be detrimental to our business, financial condition and prospects.

Since early 2025, the United States and China have imposed new or higher tariffs on goods imported from each other, including tariff increases announced by both countries. If the United States or China continues imposing such tariffs, or if additional tariffs or trade restrictions are implemented by the United States or by China, the resulting trade barriers could have a significant adverse impact on our business. The adoption and expansion of trade restrictions and tariffs, quotas and embargoes, sanctions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies, has the potential to adversely impact costs, our suppliers and the world economy in general, which in turn could have a material adverse effect on our business, results of operations and financial condition.

We cannot foresee whether and how developments in similar policy actions or any other policy actions taken by the U.S. or Chinese government will impact our business and financial performance. In addition, changes in political, business, economic and trade relations between the U.S. and China, including the potential for heightened tensions under the current U.S. administration, may trigger negative customer sentiment towards western brands in China, potentially resulting in a negative impact on our business, results of operations and financial condition.

***There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.***

Substantially all of our operations are conducted in the PRC, and are governed by PRC laws, rules and regulations. Our PRC subsidiaries are subject to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding nature of such decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation. Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

***PRC laws and regulations establish complex procedures in connection with certain acquisitions of China-based companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions or mergers in China.***

On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce ("MOFCOM"), the State-Owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC, and the State Administration of Foreign Exchange, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle formed for the purpose of an overseas listing of securities of a PRC company obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings through special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles.

The regulations also established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time consuming and complex, including requirements in some instances that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, or that the approval from the MOFCOM be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies.

Moreover, according to the Anti-Monopoly Law of the People's Republic of China promulgated on August 30, 2007 and the Provisions on Thresholds for Reporting of Concentrations of Undertakings (the "Prior Reporting Rules") issued by the State Council in August 2008 and amended in September 2018, the concentration of business undertakings by way of mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the anti-monopoly enforcement agency of the State Council when the applicable threshold is crossed and such concentration shall not be implemented without the clearance of prior reporting. In addition, the Regulations on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprise by Foreign Investors (the "Security Review Rules") issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review by structuring the transaction through, among other things, trusts, entrustment or contractual control arrangements.

In the event that our acquisition of other companies in China falls within the scope of these regulations, compliance with these regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

***CBAK Energy Technology, Inc., as a holding company incorporated in Nevada, the United States, without material operations of its own, relies on dividends and other distributions on equity paid by its PRC operating subsidiaries for its cash needs.***

CBAK Energy Technology, Inc. is a holding company, and we conduct substantially all of our operations through our PRC subsidiaries. CBAK Energy Technology, Inc. relies on dividends and other distributions on equity paid by its PRC subsidiaries for its cash needs, including the funds necessary to pay dividends and other cash distributions to its stockholders, to service any debt it may incur and to pay its operating expenses. Current regulations in the PRC permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. According to the articles of association of our PRC subsidiaries, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profit based on the PRC accounting standards and regulations each year to its statutory general reserve, until the balance in the reserve reaches 50% of the registered capital of the company. Funds in the reserve are not distributable to CBAK Energy Technology, Inc. in forms of cash dividends, loans or advances. In addition, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to CBAK Energy Technology, Inc., which in turn will adversely affect its available cash.

In addition, our PRC subsidiaries' ability to pay dividends and other cash distributions is subject to foreign exchange restrictions in China. For example, to address persistent capital outflows and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any.

As a matter of fact, we have never declared or paid any dividends to CBAK Energy Technology, Inc.'s stockholders, nor do we have any present plan to pay any cash dividends on the common stock in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

***Fluctuations in exchange rates could adversely affect our business and the value of our securities.***

The value of our securities will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be exchanged into U.S. dollars, as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

While very limited hedging transactions were historically available to us in China to reduce our exposure to exchange rate fluctuations, we have recently begun implementing risk management strategies. In 2025, our operating entities, CBAK Power and Nanjing CBAK, entered into foreign currency forward contracts and option swaps with commercial banks to mitigate such exposure. Additionally, Hitrans entered into commodity contracts to mitigate raw materials price fluctuations. However, the availability and effectiveness of these hedging transactions may still be limited, and we may not be able to successfully hedge all of our exposure. Furthermore, utilizing these derivative instruments introduces new risks, including counterparty credit risk, potential margin call requirements, and the risk that the instruments may not perfectly correlate with our actual foreign currency needs. If these hedging strategies are ineffective, or if our foreign currency exchange losses are magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies, fluctuations in exchange rates may have a material adverse effect on our financial condition, results of operations, and your investment.

***Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.***

Substantially all of our current operations are conducted in China. Moreover, most of our current directors and officers are nationals or residents of China. All or a substantial portion of the assets of these persons are located outside the United States and in the PRC. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons. In addition, uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.

***PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent CBAK Energy Technology, Inc. from making additional capital contributions or loans to its PRC subsidiaries.***

CBAK Energy Technology, Inc., as an offshore holding company, is permitted under PRC laws and regulations to provide funding to its PRC subsidiaries through loans or capital contributions. However, loans by CBAK Energy Technology, Inc. to its PRC subsidiaries to finance their activities cannot exceed statutory limits and must be registered with the local counterpart of the State Administration of Foreign Exchange and capital contributions to its PRC subsidiaries are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System, and registration with other governmental authorities in China.

The State Administration of Foreign Exchange promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or Circular 19, effective on June 1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. According to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of bank loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether the State Administration of Foreign Exchange will permit such capital to be used for equity investments in the PRC in actual practice. The State Administration of Foreign Exchange promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to grant loans to non-associated enterprises. Violations of Circular 19 and Circular 16 could result in administrative penalties. Circular 19 and Circular 16 may significantly limit our ability to transfer any foreign currency CBAK Energy Technology, Inc. holds to its PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

In light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans or future capital contributions by us to our PRC subsidiaries. As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries when needed. If we fail to complete such registrations or obtain such approvals, our ability to use foreign currency and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

***Failure to comply with PRC regulations relating to the investment in offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to distribute profits to us or otherwise materially adversely affect us.***

On July 14, 2014, SAFE issued the Circular on Relevant Issues Relating to Domestic Residents' Investment and Financing and Roundtrip Investment through Special Purpose Vehicles ("Circular 37"), which replaced the Circular 75, promulgated by SAFE on October 21, 2005. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in Circular 37 as a "special purpose vehicle."

We have notified substantial beneficial owners of our company who we know are PRC residents to comply with the registration obligation. However, we may not be aware of the identities of all our beneficial owners who are PRC residents. In addition, we do not have control over our beneficial owners and cannot assure you that all of our PRC resident beneficial owners will comply with Circular 37. The failure of our beneficial owners who are PRC residents to register or amend their SAFE registrations in a timely manner pursuant to Circular 37 or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in Circular 37 may subject such beneficial owners or our PRC subsidiaries to fines and legal sanctions. Failure to register or amend the registration may also limit our ability to contribute additional capital to our PRC subsidiaries or receive dividends or other distributions from our PRC subsidiaries or other proceeds from disposal of our PRC subsidiaries, or we may be penalized by SAFE. These risks may have a material adverse effect on our business, financial condition and results of operations.

***Under the Enterprise Income Tax Law, we may be classified as a "resident enterprise" of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.***

On March 16, 2007, the National People's Congress of China passed a new Enterprise Income Tax Law, or the EIT Law, and on November 28, 2007, the State Council of China passed its implementing rules, which took effect on January 1, 2008. Under the EIT Law, an enterprise established outside of China with "de facto management bodies" within China is considered a "resident enterprise," meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as "substantial and overall management and control over the production and operations, personnel, accounting, and properties" of the enterprise.

On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a "non-domestically incorporated resident enterprise" if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders. In addition, the SAT issued the Announcement of the State Administration of Taxation on Issues concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions in January 2014 to provide more guidance on the implementation of Circular 82. This bulletin further provides that, among other things, an entity that is classified as a "resident enterprise" in accordance with the circular shall file the application for classifying its status of residential enterprise with the local tax authorities where its main domestic investors are registered. From the year in which the entity is determined to be a "resident enterprise," any dividend, profit and other equity investment gains from other resident enterprises within China in previous years (on or after January 1, 2008) shall be taxed in accordance with the enterprise income tax law and its implementing rules.

We may be deemed to be a resident enterprise by Chinese tax authorities. If the PRC tax authorities determine that we are a "resident enterprise" for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as "tax-exempt income," we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new "resident enterprise" classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC stockholders from transferring our shares. If we were treated as a "resident enterprise" by the PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be used as a credit to reduce our U.S. tax.

***We and our stockholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.***

In October 2017, the State Administration of Taxation issued the Bulletin on Issues Concerning the Withholding of Non-PRC Resident Enterprise Income Tax at Source, or Bulletin 37, which replaced the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises issued by the State Administration of Taxation on December 10, 2009, and partially replaced and supplemented rules under the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7, issued by the State Administration of Taxation on February 3, 2015. Pursuant to Bulletin 7, an "indirect transfer" of PRC assets, including a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of the underlying PRC assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to Bulletin 7, "PRC taxable assets" include assets attributed to an establishment in China, immoveable properties located in China, and equity investments in PRC resident enterprises and any gains from the transfer of such asset by a direct holder, who is a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining whether there is a "reasonable commercial purpose" of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the business model and organizational structure; the replicability of the transaction by direct transfer of PRC taxable assets; and the tax situation of such indirect transfer and applicable tax treaties or similar arrangements. In the case of an indirect offshore transfer of assets of a PRC establishment, the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place of business being transferred, and may consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to immoveable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. Pursuant to Bulletin 37, the withholding agent shall declare and pay the withheld tax to the competent tax authority in the place where such withholding agent is located within 7 days from the date of occurrence of the withholding obligation, while the transferor is required to declare and pay such tax to the competent tax authority within the statutory time limit according to Bulletin 7. Late payment of applicable tax will subject the transferor to default interest. Both Bulletin 37 and Bulletin 7 do not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a transaction through a public stock exchange.

There is uncertainty as to the application of Bulletin 37 or previous rules under Bulletin 7. We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments. Our company may be subject to filing obligations or taxes if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under Bulletin 37 and Bulletin 7. For transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiary may be requested to assist in the filing under Bulletin 37 and Bulletin 7. As a result, we may be required to expend valuable resources to comply with Bulletin 37 and Bulletin 7 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

***We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.***

We are subject to the Foreign Corrupt Practice Act ("FCPA"), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, have agreements with third parties, and make most of our sales in China. The PRC also strictly prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, or distributors of our subsidiaries, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our subsidiaries may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our subsidiaries liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

**RISKS RELATED TO OUR BUSINESS**

***Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.***

Our independent auditors have added an explanatory paragraph to their audit opinion issued in connection with our financial statements included in this annual report which states that the financial statements were prepared assuming that we would continue as a going concern. As discussed in Note 1 to the consolidated financial statements included herein, we had a working capital deficiency, accumulated deficit from recurring net losses incurred and significant short-term debt obligations maturing in less than one year as of December 31, 2025. These conditions raise substantial doubt about our ability to continue as a going concern. We plan to improve our profitability, renew our bank borrowings upon maturity and raise additional funds through bank borrowings and equity financing to meet our daily cash demands. However, there can be no assurance that we will be successful in executing such plans or obtaining additional equity or debt financing on acceptable terms. The audited consolidated financial statements included in this report do not include any adjustments that might result from the outcome of this uncertainty.

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***The acquisition of a controlling Interest in Hitrans has not fully delivered the anticipated benefits, as its financial performance has historically faced challenges in meeting initial expectations; however, Hitrans's operational results reached an inflection point in the third quarter of 2025 and have since demonstrated a recovery trend. Additionally, it continues to provide strategic value, including market presence and potential synergies with our existing operations. We remain focused on leveraging Hitrans's capabilities and exploring opportunities to enhance its contribution to our overall business.***

We consummated the acquisition of 81.56% of registered equity interests (representing 75.57% of paid-up capital) in Hitrans in November 2021. As of December 31, 2025, our ownership had reduced to 73.46% of registered equity interests (representing 79.64% of paid-up capital) as a result of Hitrans's subsequent equity financings and our sale of certain equity interests in Hitrans. We have fully paid the registered capital of Hitrans that we had subscribed for.

While Hitrans's revenue initially declined following the acquisition, performance began to stabilize and trend upward starting in the second half of 2025. Net revenue from sales of cathode materials and precursors increased from $40.0 million for the fiscal year ended December 31, 2024, to $89.2 million for the fiscal year ended December 31, 2025.

Acquisitions generally pose risks such as (i) the need to integrate and manage the businesses and products acquired with our own business and products; (ii) additional demands on our resources, systems, procedures and controls; (iii) disruption of our ongoing business; (iv) potential unknown or unquantifiable liabilities associated with the target company; and (v) diversion of management's attention from other business concerns. This acquisition involved substantial investment of funds from our previous equity financings and resulted in one-time charges and expenses. If we are unable to sustain the recent recovery momentum of Hitrans, our operating results could be negatively impacted.

Additionally, we have recognized impairment losses for long-lived assets of $0.5 million and nil for the years ended December 31, 2024 and 2025, respectively. Such impairment charges represented the excess of carrying amounts of long-lived assets over the estimated fair value of the production facilities in Hitrans for the production of materials used in manufacturing of lithium batteries. We also recognized impairment losses for goodwill of $1.6 million for the year ended December 31, 2022 due to the underperformance of the Hitrans segment. Any additional impairment of goodwill or other intangible assets acquired in connection with Hitrans's acquisition or in another acquisition or charges to earnings associated with any acquisition or investment activity, may materially reduce our earnings.

***We may face additional impairment charges if economic environments in which our businesses operate and key economic and business assumptions substantially change.***

Assessment of the potential impairment of property, plant and equipment and other identifiable intangible assets is an integral part of our normal ongoing review of operations. Testing for potential impairment of long-lived assets is dependent on numerous assumptions and reflects our best estimates at a particular point in time, which may vary from testing date to testing date. The economic environments in which our businesses operate and key economic and business assumptions with respect to projected product selling prices and materials costs, market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on both the existence and magnitude of impairments, as well as the time at which such impairments are recognized. Future changes in the economic environment and the economic outlook for the assets being evaluated could also result in impairment charges. Any significant asset impairments would adversely impact our financial results.

***If we cannot continue to develop new products in a timely manner, and at favorable margins, we may not be able to compete effectively.***

The battery industry has been notable for the pace of innovations in product life, product design and applied technology. We have made, and will continue to make, investments in research and development with the goal of further innovation. The successful development and introduction of new products and line extensions face the uncertainty of customer acceptance and reaction from competitors, as well as the possibility of cannibalization of sales of our existing products. In addition, our ability to create new products and line extensions and to sustain existing products is affected by whether we can:

● develop and fund research and technological innovations;

● receive and maintain necessary intellectual property protections;

● obtain governmental approvals and registrations;

● comply with governmental regulations; and

● anticipate customer needs and preferences successfully.

The failure to develop and launch successful new products could hinder the growth of our business and any delay in the development or launch of a new product could also compromise our competitive position. If competitors introduce new or enhanced products that significantly outperform ours, or if they develop or apply manufacturing technology which permits them to manufacture at a significantly lower cost relative to ours, we may be unable to compete successfully in the market segments affected by these changes.

***There are inherent risks associated with new product development and our efforts to develop and market new products could fail.***

In June 2020, our wholly-owned subsidiary, BAK Asia entered into a framework investment agreement with Gaochun EDZ. According to this agreement, we intended to develop certain lithium battery projects which are expected to have a total production capacity of approximately 20 GWh per year with support from Gaochun EDZ. See also "*Item 1. Business—Expansion of Manufacturing Capabilities*" for additional information on our cooperation with Gaochun EDZ. We have put into operation two production lines of model 32140 large-sized cylindrical "tabless" batteries with an actual production capacity of 1.5 GWh per year. Model 32140 batteries can be used in light electric vehicles, electric vehicles and energy storage. We also announced in June 2023 that we had succeeded in mass-producing Model 32140 sodium-ion cylindrical batteries, making us one of only a few companies in the world that have the capacity to mass produce sodium-ion batteries. We are actively ramping up production capacity across two new Model 32140 lines at our Nanjing facility and a newly commissioned large-format Model 40135 line at our Dalian facility. Concurrently, we continue to drive future innovation by accelerating the development of our next-generation cylindrical cell series, which includes Models 60115, 60135, and 60150.

In addition, we have been gradually phasing out our light electric vehicle business. In 2020, we ventured into developing light electric vehicle projects. On November 9, 2020, we established our new subsidiary, Nanjing BFD, formally named Nanjing Daxin, to launch and develop our light electric vehicle business. However, the development of this new line of business was not successful due to the competitive landscape and evolving market preferences. Jiangsu Daxin, a subsidiary wholly-owned by Nanjing BFD, incorporated on August 4, 2021 and focused on the development and manufacture of electric bicycle, motorcycle and automotive spare parts, was dissolved on December 22, 2023. Nanjing BFD has shifted away from the development and manufacture of electric bicycles, motorcycles and automotive spare parts and pivoted towards the manufacture of sodium-ion batteries since 2023. Beginning in 2025, Nanjing BFD's primary operational focus shifted to battery pack assembly. This business unit is dedicated to integrating our individual cells into finished, fully functional battery systems for our end customers.

By assembling individual cells into complete, plug-and-play battery systems, we seek to bypass intermediate integrators and serve end-users directly. Currently, these manufactured pack units are predominantly engineered for, and utilized within, the light electric vehicle battery swapping infrastructure throughout the African market. The battery pack integration business requires us to develop new capabilities in systems integration, supply chain management for pack-level components, quality assurance for assembled systems, and direct engagement with end-users, all of which carry execution risk. Moreover, our initial focus on the African market for battery swapping infrastructure introduces additional risks specific to that market, including limited infrastructure, evolving regulatory frameworks, political instability, currency volatility, and challenges in establishing reliable distribution and after-sales service networks in a new geographic region.

We cannot provide assurance that market acceptance of our new products will occur due to the highly competitive nature of the business, or our future business ventures will not fail. The Company has operated and competed in industries where there are frequent introductions of new products and line extensions and such product introductions often require significant investment and support. The ability of the Company to understand end user needs and preferences is key to maintaining and improving the competitiveness of its product offerings. The development and introduction of new products, as well as the renovation of current products and product lines, require substantial and effective research, development and marketing expenditures, which the Company may be unable to recoup if the new or renovated products do not gain widespread market acceptance. There are inherent risks associated with new product development and marketing efforts, including product development or launch delays, product performance issues during development, changing regulatory frameworks that affect the new products in development and the availability of key raw materials included in such products. These inherent risks could result in the failure of new products and product line extensions to achieve anticipated levels of market acceptance, additional costs resulting from failed product introductions and the Company not being first to market. As the Company continues to focus on innovation and renovation of its products, the Company's business, financial condition or results of operations could be adversely affected in the event that the Company is not able to effectively develop and introduce new or renovated products and line or brand extensions.

***Our failure, if any, to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable, resulting in loss of market share to our competitors.***

The lithium-based battery market, as well as the battery materials industry, are characterized by changing technologies and evolving industry standards, which are difficult to predict. This, coupled with frequent introduction of new products and models, has shortened product life cycles and may render our products obsolete or unmarketable. Our ability to adapt to evolving industry standards and anticipate future standards will be a significant factor in maintaining and improving our competitive position and our prospects for growth. To achieve this goal, we have invested and plan to continue investing significant financial resources in our R&D infrastructure. Currently, we have facilities in Dalian, Nanjing and Shaoxing, China, which have about 379 R&D staffers and over 9,151 square meters of space dedicated to R&D activities.

R&D activities, however, are inherently uncertain, and we might encounter practical difficulties in commercializing our research results. Accordingly, our significant investment in our R&D infrastructure may not bear fruit. On the other hand, our competitors may improve their technologies or even achieve technological breakthroughs that would render our products obsolete or less marketable. Therefore, our failure to effectively keep up with rapid technological changes and evolving industry standards by introducing new and enhanced products may cause us to lose our market share and to suffer a decrease in our revenue.

***Maintaining our R&D activities and manufacturing operations requires significant capital expenditures, and our inability or failure to maintain our operations could have a material adverse impact on our market share and ability to generate revenue.***

We incurred capital expenditures of approximately $44.6 million and $17.2 million for the years ended December 31, 2025 and 2024, respectively. We may incur significant additional capital expenditures as a result of unanticipated expenses, regulatory changes and other events that impact our business. If we are unable or fail to timely obtain capital on acceptable terms and adequately maintain our manufacturing capacity, we could lose customers and there could be a material adverse impact on our market share and our ability to generate revenue.

***We face intense competition from other battery manufacturers and cathode material and precursor producers, many of which have significantly greater resources.***

The market for batteries used in residential energy storage & UPS applications, electric vehicles and light electric vehicles is intensely competitive and is characterized by frequent technological changes and evolving industry standards. We expect competition to become more intense. Increased competition may result in declines in average selling prices, causing a decrease in gross profit margins. We have faced and will continue to face competition from manufacturers of traditional rechargeable batteries, such as lead-acid batteries, other manufacturers of lithium-ion batteries and companies engaged in the development of batteries incorporating new technologies. Other manufacturers of high-power lithium batteries currently include Gotion Hi-tech, EVE Battery, Shandong Goldencell, EVPS, Power Long Battery, Great Power, Do-Fluoride, Greenway and Ampace.

Many of these existing competitors have greater financial, personnel, technical, manufacturing, marketing, sales and other resources than we do. As a result, these competitors may be in a stronger position to respond quickly to market opportunities, new or emerging technologies and evolving industry standards. Many of our competitors are developing a variety of battery technologies, such as lithium polymer, prismatic cells, cylindrical cells and fuel cell batteries, which are expected to compete with our existing product lines. Other companies undertaking R&D activities of solid-polymer lithium-ion batteries have developed prototypes and are constructing commercial scale production facilities. It is possible that our competitors will be able to introduce new products with more desirable features than ours and their new products will gain market acceptance. If our competitors successfully do so, we may not be able to maintain our competitive position and our future success would be materially and adversely affected.

The market for cathode materials and precursors has been evolving rapidly. Rapid and ongoing changes in technology and product standards could render our cathode materials and precursor products less competitive, or even obsolete, particularly if we fail to continue to improve the performance of our cathode materials and precursor products. Competing technologies that outperform our cathode materials and precursor products in one or more performance attributes could be developed and successfully introduced. We are aware of certain companies, including Beijing Easpring Material Technology Co., Ltd. and Ningbo Ronbay Lithium Battery Material Co., Ltd. using cell chemistry technology similar to our technology and these or other companies have introduced or could introduce products that compete directly with our products and could in the future outperform our products in one or more performance attributes, could be offered to our customers as a cheaper alternative to our products or may result in increased pricing pressure on our products.

***We are dependent on a limited number of customers for a significant portion of our revenues, including international customers across multiple continents, and this dependence is likely to continue.***

We have been dependent on a limited number of customers for a significant portion of our revenue. Our top five customers accounted for approximately 66.1% and 37.1% of our revenues for the years ended December 31, 2024 and 2025, respectively. Dependence on a few customers could make it difficult to negotiate attractive prices for our products and could expose us to the risk of substantial losses if a single prominent customer stops purchasing our products.

Currently, major customers for our high-power lithium batteries business include Anker Innovations, Spiro Mobility, Bucida, Ather Energy, Shenzhen ACE Battery, DAT Bike, and Inverted Energy. These customers are based in, or conduct significant operations across, multiple international markets, including Europe, Africa, and South and Southeast Asia. As a result, our revenue is subject to not only customer concentration risk, but also to the financial health, market conditions, and regulatory environments affecting these specific international customers and the markets in which they operate. For instance, the financial difficulties, operational disruptions, or strategic shifts of any one of these major customers could materially and adversely affect our revenue and results of operations. Moreover, our reliance on customers operating across a broad range of international jurisdictions subjects us to additional risks, including the impact of foreign economic conditions, trade restrictions, sanctions, and geopolitical instability on customer demand.

We expect that a limited number of customers will continue to contribute a significant portion of our sales in the near future. Our ability to maintain close relationships with these top customers is essential to the growth and profitability of our business. If we fail to sell our products to one or more of these top customers in any particular period, or if a large customer purchases fewer of our products, defers orders or fails to place additional orders with us, or if we fail to develop additional major customers, our revenue could decline, and our results of operations could be adversely affected.

***In addition to our own production, we also rely on a few battery suppliers to fulfill our customers' orders. If we fail to effectively manage our relationships with, or lose the services of these suppliers and we cannot substitute suitable alternative suppliers, our operations would be materially adversely affected.***

We generate part of our revenues by outsourcing some of our customers' orders to other suppliers for certain battery models that we do not produce. If our business relationship with these suppliers changes negatively or their financial condition deteriorates, or their operating environment changes, our business may be harmed in many ways. Suppliers may also unilaterally terminate battery supply to us or increase the prices. As a result, we are not assured of an uninterrupted supply of certain types of high-power lithium batteries of acceptable quality or at acceptable prices from suppliers. On the other hand, we may not be able to substitute them with suitable alternative contract manufacturers in a timely manner on commercially acceptable terms or at all. We may be forced to default on the agreements with our customers. This may negatively impact our revenues and adversely affect our reputation and relationships with our customers, causing a material adverse effect on our financial condition, results of operations and prospects.

***Failure by us to maintain and strengthen relationships with certain contract battery material producer may materially adversely affect our ability to fulfill customer orders and our results of operations.***

We outsource the production of a portion of our battery material products to a third-party supplier in Xianyang city, Shaanxi province. Our ability to meet the demands of our customers for battery material products would be affected, if our relationship with this supplier changes negatively, or operations at this supplier are disrupted. This could negatively impact our revenues and adversely affect our reputation and relationships with our customers, causing a material adverse effect on our financial condition, results of operations and prospects.

***Our business depends on the growth in demand for light electric vehicles, electric vehicles, energy storage, such as residential energy supply and UPS application, and other high-power electric devices.***

As the demand for our battery cell and battery materials is directly related to the market demand for high-power electric devices, a fast-growing high-power electric devices market will be critical to the success of our business. In anticipation of an expected increase in the demand for high-power electric devices such as electric vehicles, light electric vehicles, and energy storage including residential energy supply and UPS application in the next few years, we are building new manufacturing facilities in Nanjing and have invested in the R&D capability of our acquired battery materials business. However, the markets we have targeted, primarily those in the PRC, may not achieve the level of growth we expect. If this market fails to achieve our expected level of growth, we may have excess production capacity and may not be able to generate enough revenue to maintain our profitability.

***We face risks associated with the marketing, distribution and sale of our products internationally, including in new markets such as Africa, and if we are unable to effectively manage these risks, they could impair our ability to expand our business abroad.***

For the years ended December 31, 2024 and 2025, we derived 44% and 25%, respectively, of our sales from outside the PRC mainland. We deem overseas markets as an important revenue source for us, and have been actively pursuing opportunities to expand our customer base overseas. Currently, our commercial strategy for our battery segment is driven by our integrated marketing divisions in Dalian and Nanjing. Having successfully established a comprehensive sales network throughout China, these teams are actively accelerating our global footprint by developing robust international distribution channels across Europe, North America, Southeast Asia, South Asia and Africa. In addition, our Nanjing BFD subsidiary has commenced battery pack integration operations targeting the African market.

The marketing, international distribution and sale of our products expose us to a number of risks, including:

● fluctuations in currency exchange rates;

● difficulty in engaging and retaining distributors that are knowledgeable about, and can function effectively in, overseas markets;

● increased costs associated with maintaining marketing efforts in various countries;

● difficulty and cost relating to compliance with the different commercial and legal requirements of the overseas markets in which we offer our products;

● inability to obtain, maintain or enforce intellectual property rights;

● trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make us less competitive in some countries;

● geopolitical instability, armed conflict, terrorism, sanctions, and trade restrictions affecting markets in which we or our customers operate, including, but not limited to, the ongoing conflict in the Middle East and related disruptions to global trade and logistics; and

● operational and logistical challenges particular to emerging markets, including infrastructure limitations, political instability, less predictable legal and regulatory environments, and challenges in establishing effective distribution, servicing, and warranty support networks.

Our expansion into new geographic markets, particularly the African market for battery pack products and the diversification of our customer base across Europe, North America, South Asia, and Southeast Asia, increases our exposure to these risks. If we are unable to effectively manage these risks, our ability to expand our international operations and our business, financial condition, and results of operations could be materially and adversely affected.

***Our expansion into the African market subjects us to significant operational, regulatory, political, and economic risks that could materially and adversely affect our business, financial condition, and results of operations.***

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Our Nanjing BFD subsidiary has commenced battery pack integration operations targeting the African market, with manufactured pack units predominantly engineered for, and utilized within, the light electric vehicle battery swapping infrastructure throughout the region. In 2025, approximately 9% of our revenue was derived from the African market. As this represents our initial entry into the African market, we face a number of risks and uncertainties specific to operating in this region, any of which could materially and adversely affect our business, financial condition, and results of operations.

Many countries in Africa have limited transportation, logistics, energy, and telecommunications infrastructure compared to the markets in which we have historically operated, which may impair our ability to deliver products reliably, maintain consistent supply chains, and support the battery swapping infrastructure on which our products depend. The regulatory environment governing electric vehicles, battery technologies, energy storage, and related industries in many African countries is at an early stage of development and may change rapidly or unpredictably, creating uncertainty regarding necessary permits, product liability standards, environmental requirements, and import and export controls obligations. In addition, certain countries in Africa have experienced, and may continue to experience, political instability, civil unrest, armed conflict, terrorism, government expropriation, sanctions, and abrupt changes in government leadership or policy, any of which could disrupt our operations, threaten the safety of our personnel, damage or destroy our assets, and impair our ability to enforce contractual rights.

Establishing reliable distribution channels and after-sales service networks in the African market presents significant challenges. We currently deploy expatriate employees from our PRC subsidiaries to multiple African countries to provide local after-sales services. These expatriate personnel are employed and compensated by our PRC subsidiaries and return to China periodically, subjecting us to additional risks, including difficulties in recruiting and retaining qualified personnel, compliance with immigration and labor laws across multiple African jurisdictions, exposure to health and safety risks, and the logistical complexity of managing a geographically dispersed expatriate workforce. Our operations spanning multiple African countries also subject us to a complex web of legal and regulatory requirements, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and applicable PRC anti-bribery laws, export control regulations, trade sanctions, tax laws, and transfer pricing rules. Any failure to comply with applicable laws and regulations could result in civil or criminal penalties, reputational harm, and disruption of our operations.

We have limited operating history and institutional knowledge with respect to the African market, and we may face competition from established local and international participants with greater familiarity with local market conditions and more established distribution networks. There can be no assurance that our products and services will sustain market acceptance in Africa. If any of the foregoing risks materialize, individually or in combination, our business, financial condition, results of operations, and prospects could be materially and adversely affected.

***Our success, in part, depends on the success of manufacturers of the end applications that use our products, and our failure to gain acceptance of our products from such manufacturers could materially and adversely affect our results of operations and profitability.***

As we target the battery markets for light electric vehicles, electric vehicles, energy storage including but not limited to residential energy supply & UPS application, and other high-power electric devices, our future success in part depends on whether end-application manufacturers are willing to use batteries that incorporate our products. To secure acceptance of our products, we must constantly develop and introduce more reliable and cost-effective battery cells and battery materials with enhanced functionality to meet evolving industry standards. We generated approximately $37.2 million revenues from light electric vehicle and electric vehicle customers in 2025. In 2025, our sales of cathode materials and precursors reached $89.2 million. However, we cannot guarantee that the market demand for our products will not decline.

Even if a manufacturer decides to use batteries that incorporate our products, the manufacturer may not be able to market and sell its products successfully. The manufacturer's inability to market and sell its products successfully, whether from lack of market acceptance or otherwise, could materially and adversely affect our business and prospects because this manufacturer may not order new products from us. If we cannot achieve the expected level of sales, we will not be able to make sufficient profits to offset the expenditures we have incurred to expand our production capacity or develop new technologies, nor will we be able to grow our business. Accordingly, our business, financial condition, results of operations and future success would be materially and adversely affected.

***We have engaged in transactions with related parties, and such transactions present potential conflicts of interest that could have an adverse effect on our business and results of operations.***

As a public company, we are unable to control or predict transfers of our common stock by our shareholders, nor can we control whether our suppliers, customers, or their respective controlling persons acquire or dispose of our common stock. There was a change in the shareholder who beneficially owns more than 10% of our outstanding common stock in December 2025. See Item 12 "*Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters*" in this annual report for further details. To our knowledge, the individual who beneficially owns the new shareholder that holds more than 10% of our outstanding common stock and is our largest shareholder, Gimli Group Limited, is a family member of a controlling person of certain of our suppliers and customers for certain products, and also holds an equity interest in one of our suppliers. Although such individual and the related entities had existing supplier and customer relationships with us prior to the change in our principal shareholder, these relationships may give rise to potential conflicts of interest in our future commercial dealings. Further, we may in the future enter into additional transactions with entities affiliated with Gimli Group Limited or the individual who beneficially owns Gimli Group Limited. Such transactions present potential for conflicts of interest, as the interests of these entities may not align with the interests of the Company and our unaffiliated shareholders with respect to the negotiation of, and certain other matters related to, our purchases from, sales to and other transactions with such entities. Conflicts of interest may also arise in connection with the exercise of contractual remedies under these transactions, such as for events of default.

All transactions with related parties are subject to our internal policies governing conflicts of interest and related-party approvals. We believe that the terms of such transactions are fair and reflect arm's-length pricing. However, we cannot assure you that third parties, including regulators, auditors, or investors, will not challenge our assessment or conclude that such arrangements were not conducted on an arm's-length basis. Moreover, we cannot assure you that any past, present, or future principal shareholder has not or will not exercise significant influence over matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, in a manner that prioritizes its own interests over those of our shareholders as a whole. Any such actions could have a material adverse effect on our business and results of operations.

***We may not be able to accurately plan our production based on our sales contracts, which may result in excess product inventory or product shortages.***

Our sales contracts for battery cells typically provide for a non-binding, three (3)-month forecast on the quantity of products that our customers may purchase from us. Our sales contracts for battery materials typically provide for a non-binding, two (2)-month forecast on the quantity of products that our customers may purchase from us. We typically have only a 15-day to 30-day lead time to manufacture battery cell products and 25-day lead time to produce battery material products to meet our customers' requirements once our customers place orders with us. To meet the short delivery deadline, we generally make significant decisions on our production level and timing, procurement, facility requirements, personnel needs and other resources requirements based on our estimate in light of this forecast, our past dealings with such customers, market conditions and other relevant factors. Our customers' final purchase orders may not be consistent with our estimates. If the final purchase orders substantially differ from our estimates, we may have excess product inventory or product shortages. Excess product inventory could result in unprofitable sales or write-offs as our products are susceptible to obsolescence and price declines. Producing additional products to make up for any product shortages within a short time frame may be difficult, making us unable to fill out the purchase orders. In either case, our results of operation would fluctuate from period to period.

***A change in our product mix may cause our results of operations to differ substantially from the anticipated results in any particular period.***

Our overall profitability may not meet expectations if our products, customers or geographic mix are substantially different than anticipated. Our profit margins vary among products, customers and geographic markets. Consequently, if our mix of any of these is substantially different from what is anticipated in any particular period, our profitability could be lower than anticipated.

***Manufacturing or use of our products may cause accidents, which could result in significant production interruption, delay or claims for substantial damages.***

Due to the high energy density inherent in lithium-based batteries, our batteries can pose certain safety risks, including the risk of fire. Although we incorporate safety procedures in the research, development, manufacture and transportation of batteries that are designed to minimize safety risks, the manufacture or use of our products may still cause accidents. Any accident, whether occurring at the manufacturing facilities or from the use of our products, may result in significant production interruption, delays or claims for substantial damages caused by personal injuries or property damages.

***We may not be able to substantially increase our manufacturing output in order to maintain our cost competitiveness.***

We believe that our ability to offer products at lower costs—leveraging economies of scale from fully operational production lines—while maintaining prices above the market average has been a key driver of o our past success and will be vital to our future growth. We believe this is one of our competitive advantages over our competitors. We need to increase our manufacturing output to a level that will enable us to substantially reduce the cost of our products on a per unit basis through economies of scale. However, our ability to substantially increase our manufacturing output is subject to significant constraints and uncertainties, including:

● the need to raise significant additional funds to purchase and prepay raw materials or to build additional manufacturing facilities, which we may be unable to obtain on reasonable terms or at all;

● delays and cost overruns as a result of a number of factors, many of which may be beyond our control, such as increases in raw material prices and problems with equipment vendors;

● delays or denial of required approvals by relevant government authorities;

● diversion of significant management attention and other resources; and

● failure to execute our expansion plan effectively.

If we are unable to increase our manufacturing output because of any of the risks described above, we may be unable to maintain our competitive position or achieve the growth we expect. Moreover, even if we expand our manufacturing output, we may not be able to generate sufficient customer demand for our products to support our increased production output.

***We may incur significant costs because of the warranties we supply with our battery products.***

With respect to the sale of our battery products, we typically offer warranties against any defects due to product malfunction or workmanship for a period of six (6) months-to-five (5) years from the date of purchase, including a period of six (6) to twenty-four (24) months for battery cells, and a period of twelve (12) to twenty-seven (27) months for battery modules for electric bicycles, and a period of three (3) years to five (5) years (or 120,000 or 200,000 km if reached sooner) for battery modules for electric vehicles. Beginning in 2025, we also provide warranties for our battery pack products, generally under a "2+1" year model based on time or battery cycles. Under certain agreements, we are responsible for replacements, logistics, and labor costs for defective units, and may be subject to product recalls if defect rates exceed specified thresholds. Additionally, we may be liable for substantial indemnification in the event of safety-related incidents caused by our products. We provide a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issues. There is no assurance that future warranty claims will be consistent with past history, and in the event that we experience a significant increase in warranty claims, there is no assurance that our reserves will be sufficient. This could have a material adverse effect on our business, financial condition and results of operations.

***While certain of our subsidiaries maintain product liability insurance, we do not maintain comprehensive product liability insurance across all our operations to cover all claims against our product quality. Defects in our products could result in a loss of customers and decrease in revenue, unexpected expenses and a loss of market share.***

Certain of our subsidiaries maintain product liability insurance, but we do not maintain comprehensive product liability insurance across all our operations to provide against all claims against us based on our product quality. As a result, to the extent that our products are not covered by insurance or if the insurance coverage is insufficient, defects in our products could result in a loss of customers and decrease in revenue, unexpected expenses and a loss of market share. Furthermore, if any of our products are found to have reliability, quality or compatibility problems, we will be required to accept returns, provide replacements, provide refunds, or pay damages. We may be required to incur substantial amounts to indemnify our customers in respect of their product quality claims against us that are not covered by insurance, which would materially and adversely affect the results of our operations and severely damage our reputation.

***We do not have insurance coverage against all the damages or losses of our facilities.***

We currently have insurance coverage for certain buildings located at our facilities in Dalian. We are discussing with multiple insurance service providers aiming to secure comprehensive insurance coverage for the remaining properties. If we were to suffer any losses or damages to any of the facilities before the purchase of insurance policies that provide adequate coverage, our business, financial condition and results of operations may be materially and adversely affected. In addition, our subsidiary, Hitrans, maintains property insurance coverage against certain property and inventory damages and losses.

However, such insurance may not adequately compensate us for any such losses and will not address a loss of customers as a result of property damages and consequent disruptions to operations or may have large deductibles insufficient to support our continuing operations. If damages or losses exceed the insurance coverage, we may not be able to return to operation for an extended period of time, potentially even threatening our viability. In addition, insurance coverage is expensive, may be difficult to obtain and may not be available in the future on acceptable terms or at all. A significant increase in the cost of insurance coverage could adversely affect our business, financial condition and results of operations.

***We depend on third parties to supply key raw materials and components to us. Failure to obtain a sufficient supply of these raw materials and components in a timely fashion and at reasonable costs could significantly delay our production and shipments, which would cause us to breach our sales contracts with our customers.***

We purchase from Chinese domestic suppliers for certain key raw materials and components such as electrolytes, electrode materials and separators for our battery cell products and purchase from Chinese domestic suppliers for graphite, iron phosphate and lithium phosphate. We have purchased raw materials and components on the basis of purchase orders. In the absence of firm and long-term contracts, we may not be able to obtain a sufficient supply of these raw materials and components from our existing suppliers or alternates in a timely fashion or at a reasonable cost. If we fail to secure a sufficient supply of key raw materials and components in a timely fashion, it would result in a significant delay in our production and shipments, which may cause us to breach our sales contracts with our customers. Furthermore, failure to obtain sufficient supply of these raw materials and components at a reasonable cost could also harm our revenue and gross profit margins.

***Fluctuations in prices and availability of raw materials, particularly Ni, Co, Mn, Li2CO3, LiPF6 and LiFePO4, could increase our costs or cause delays in shipments, which would adversely impact our business and results of operations.***

Our operating results could be adversely affected by increases in the cost of raw materials, particularly Ni, Co, Mn, Li2CO3, LiPF6 and LiFePO4, the primary cost component of our battery products, battery material products or other product parts or components. The prices of Ni, Co, Mn, Li2CO3, LiPF6 and LiFePO4 are not stable.

Although we are not dependent on single suppliers for the supply of any raw materials, we mostly purchase raw materials through individual purchase orders or short-term contracts and not pursuant to long-term contracts. As such, our third-party suppliers may not be able to satisfy our requirements during a period of sustained or growing demand.

In addition, our battery cell products historically have not been able to fully offset the effects of higher costs of raw materials through price increases to customers or by way of productivity improvements. As a result, a significant increase in the price of one or more raw materials, parts or components or the inability to successfully implement price increases/surcharges to mitigate such cost increases could have a material adverse effect on our results of operations.

***We do not have long-term purchase commitments from our customers, which may result in significant uncertainties and volatility with respect to our revenue from period to period.***

We do not have long-term purchase commitments from our customers and the term of our sales contracts with our customers is typically one year or less. Furthermore, these contracts leave certain major terms such as price and quantity of products open to be determined in each purchase order. These contracts also allow parties to re-adjust the contract price for substantial changes in market conditions. As a result, if our customers hold stronger bargaining power than us or the market conditions are in their favor, we may not be able to enjoy the price downside protection or upside gain. Furthermore, our customers may decide not to continue placing purchase orders with us in the future at the same level as in prior periods. As a result, our results of operations may vary from period to period and may fluctuate significantly in the future.

***Compliance with environmental regulations can be expensive, and our failure to comply with these regulations may result in adverse publicity and a material adverse effect on our business.***

As a manufacturer, we are subject to various PRC environmental laws and regulations on air emission, wastewater discharge, solid waste and noise. Although we believe that our operations are in substantial compliance with current environmental laws and regulations, we may not be able to comply with these regulations at all times as the PRC environmental legal regime is evolving and becoming more stringent. Therefore, if the PRC government imposes more stringent regulations in the future, we will have to incur additional substantial costs and expenses in order to comply with new regulations, which may negatively affect our results of operations. If we fail to comply with any of the present or future environmental regulations in material aspects, we may suffer from negative publicity and may be required to pay substantial fines, suspend or even cease operations. Failure to comply with PRC environmental laws and regulations may materially and adversely affect our business, financial condition and results of operations.

***We rely significantly on technology and systems to support our production, supply chain, payments, financial reporting and other key aspects of our business. Any failure, inadequacy, interruption or security failure of those systems could have a material adverse effect on our business, reputation and brand, financial condition, and results of operations.***

The satisfactory performance, reliability and availability of our technology systems are critical to our business. A failure or malfunction of our information technology system can result in substantial losses, damage and harm to our business, operations or brand. To manage our operations and personnel, we will need to continue to improve and expand our operational and financial systems, transaction processing and internal controls and business processes; in doing so, we could encounter transitional issues and incur substantial additional expenses. The failure of our information systems to operate effectively, problems with transitioning to upgraded or replacement systems or expanding them, or a breach in security of these systems, could materially adversely affect the promptness and accuracy of our manufacturing process, products delivery, transaction processing, financial accounting and reporting, the efficiency of our operations and our ability to properly forecast earnings and cash requirements. We could be required to make significant additional expenditures to remediate any such failure, problem or breach. Any such events could have a material adverse effect on our business, financial condition, and results of operations.

Further, we house a portion of our systems offsite at third-party data centers. Our data centers may be subject to cyber-attacks or other technology-related incidents, and also break-ins, sabotage and intentional acts of vandalism that could cause disruptions in our ability to serve our customers and protect data. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural disaster, intentional sabotage or other anticipated problems could result in lengthy interruptions to our operations. Any errors or vulnerability in our systems or damage to or failure of our systems, or a third-party data center hosting our data, could result in interruptions in our operations and could have a material adverse effect on our business, financial condition, and results of operations.

In addition, we may now and in the future implement new systems to increase efficiency and profitability. We may encounter transitional issues and incur substantial additional expenses in connection with any implementation or change to existing processes, any of which could have a material adverse effect on our business, financial condition, and results of operations.

***System security risk issues, and disruption of our internal operations or information technology systems, could have a material adverse effect on our business, financial condition, and results of operations.***

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External parties, such as experienced computer programmers and hackers, or even internal users (including both employees and non-employees with authorized access), may be able to penetrate or create systems disruptions or cause shutdowns of our networks, systems and applications or those of third-party vendors. We collect and store identifiable information about our employees, customers and others, and sometimes rely upon third-party service providers to maintain or process data on our behalf and to provide security for the information in their possession. Such compromise of such information could subject us to governmental investigations and/or enforcement actions, fines and penalties, litigation, claims and other liabilities, and harm our reputation, which could have a material adverse effect on our business, financial condition and results of operations. Moreover, we could incur significant expenses or disruptions of our operations in connection with system failures, timeliness of applying updates to vulnerable systems or other factors within or beyond our control. Such failures or breaches in our information systems could also result in the disclosure, misappropriation or misuse of or unauthorized access to our confidential, proprietary, or personal information, disruption of our operations or damage to our networks and systems. An increasing number of companies have recently disclosed breaches of their security, some of which have involved increasingly sophisticated and highly targeted attacks on portions of their sites.

Although we take steps to protect our networks, systems, applications and data, we or our service providers may be unable to anticipate, defend against, or timely identify and respond to such activity, including but not limited to hacking, malware, viruses, social engineering (such as phishing or other scams), extortion, account takeover attacks, denial or degradation of service attacks, supply chain attacks, computer and network vulnerabilities or the negligence and malfeasance of individuals with authorized access to our data. In addition, sophisticated hardware and operating system software and applications that we buy or license from third parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the security and operation of the systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated with the outsourced services provided to us, could be significant, and efforts to address these problems could result in interruptions, delays or cessation of service that may impede our production, supply chain, sales, financial reporting or other critical functions and have a material adverse effect on our business, financial condition and results of operations.

In addition, the Chinese government and governments in other jurisdictions have enacted laws or regulations that require companies to notify individuals about certain types of security incidents or breaches, and any such disclosures may lead to negative publicity. It is also possible that security breaches affecting our competitors or others in our industry could also result in negative publicity that indirectly harms our reputation. Increasing public, industry, and governmental focus on privacy and data security may continue to lead to additional guidance or legislative and regulatory action. As a result, we may have to modify our business systems and practices with the goal of further improving data security, which could result in reduced net revenue, increased expenditures and operating complexity. Any compromise of our security or security breach could result in a violation of applicable privacy and other laws, significant legal and financial exposure or damage to our reputation, which could have a material adverse effect on our business, financial condition, and results of operations.

We currently do not carry insurance to cover any potential claims or expenses related to security breaches that affect us. In addition, we cannot assure investors that the limitations on liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities with respect to any particular claim. Any imposition of liability that is not covered by insurance would increase our operating expenses and reduce our net income, if any, or increase our net loss.

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***The use of technology based on artificial intelligence presents risks relating to confidentiality, creation of inaccurate and flawed outputs and emerging regulatory risk, any or all of which may adversely affect our business and results of operations.***

As with many technological innovations, artificial intelligence ("AI") presents great promise but also risks and challenges that could adversely affect our business. Sensitive, proprietary, or confidential information of the Company and employees, could be leaked, disclosed, or revealed as a result of or in connection with the use of generative AI technologies by our employees or vendors. Any such information input into a third-party generative AI or machine learning platform could be revealed to others, including if information is used to train the third party's generative AI or machine learning models. Additionally, where a generative AI or machine learning model ingests personal information and makes connections using such data, those technologies may reveal other sensitive, proprietary, or confidential information generated by the model. Moreover, generative AI or machine learning models may create incomplete, inaccurate, or otherwise flawed outputs, some of which may appear correct. Due to these issues, these models could lead us to make flawed decisions that could result in adverse consequences to us, including exposure to reputational and competitive harm, customer loss, and legal liability. In addition, uncertainty in the legal regulatory regime relating to AI may require significant resources to modify and maintain business practices to comply with applicable law, the nature of which cannot be determined at this time. Several jurisdictions have already proposed or enacted laws governing AI. These obligations may prevent or limit our ability to use AI in our business, lead to regulatory fines or penalties, or require us to change our business practices. If we cannot use AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Any of these factors could adversely affect our business, financial condition, and results of operations.

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***Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lose their services.***

Our future success heavily depends on the continued service of our senior executives and other key employees. In particular, we rely on the expertise and experience of our Chief Executive Officer, Mr. Zhiguang Hu and our Chief Financial Officer, Mr. Jiewei Li. If one or more of our other senior executives are unable or unwilling to continue to work for us in their present positions, we may encounter similar problems, but on a compounded basis. Moreover, if any of our current or former senior executives joins a competitor or forms a competing company, we may lose customers, suppliers, know-how and key personnel. Each of our executive officers has entered into an employment agreement with us, which contains non-competition and confidentiality clauses. However, if any dispute arises between our current or former executive officers and the Company, it is hard to predict the extent to which any of these agreements could be enforced in China, where these executive officers reside, in light of the uncertainties with China's legal system.

***The success of our business depends on our ability to attract, train and retain highly skilled employees and key personnel.***

Because of the highly specialized, technical nature of our business, we must attract, train and retain a sizable workforce comprising highly skilled employees and other key personnel. Since our industry is characterized by high demand and intense competition for talent, we may have to pay higher salaries and wages and provide greater benefits in order to attract and retain highly skilled employees or other key personnel that we will need to achieve our strategic objectives. Our ability to train and integrate new employees into our operations may not meet the requirements of our growing business. Our failure to attract, train or retain highly skilled employees and other key personnel in numbers that are sufficient to satisfy our needs would materially and adversely affect our business.

***We have experienced significant management changes which could increase our control risks and have a material adverse effect on our ability to do business and our results of operations.***

Since 2019, we have had a number of changes in our senior management, including multiple changes in our Chief Financial Officer. The magnitude of these past and potential changes and the short time interval in which they have occurred or may occur, particularly during a time of economic or financial crisis, add to the risks of control failures, including a failure in the effective operation of our internal control over financial reporting or our disclosure controls and procedures. Control failures could result in material adverse effects on our financial condition and results of operations. It may take time for the new management team to become sufficiently familiar with our business and each other to effectively develop and implement our business strategies. The turnover of key management positions could further harm our financial performance and results of operations. Management attention may be diverted from regular business concerns by reorganizations.

***We and our independent public accounting firm identified material weaknesses in our internal control over financial reporting as of December 31, 2025. If we fail to remediate the material weaknesses, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our shares may be adversely affected.***

To implement Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on the company's internal control over financial reporting in their annual reports on Form 10-K. A report of our management is included under Item 9A of this annual report. In addition, as we became an "accelerated filer" in 2023, our independent registered public accounting firm is required to attest to and report on the effectiveness of our internal control over financial reporting. Our management has identified the following material weaknesses in our internal control over financial reporting: (i) we did not have appropriate policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements, and (ii) 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. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. We have taken measures and plan to continue to take measures to remedy the material weaknesses. We have regularly offered our financial personnel trainings on internal control and risk management, and we have regularly provided trainings to our financial personnel on U.S. GAAP accounting guidelines. However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to address any control deficiency could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, effective internal control over financial reporting is important to prevent fraud. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares, may be adversely affected.

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***Geopolitical instability, including the armed conflict in the Middle East and related military actions involving Iran, could disrupt global supply chains, increase costs, and adversely affect our business and results of operations.***

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Our operations and the markets we serve are subject to risks arising from geopolitical instability. Recent developments, including military actions involving Iran and the broader armed conflict in the Middle East, have heightened global uncertainty and could adversely impact our business in several ways.

Armed conflict in the Middle East may disrupt global shipping routes, particularly through the Red Sea and the Suez Canal, leading to delays and increased costs for the transportation of our products and raw materials. Additionally, the imposition or expansion of international sanctions, export controls, or trade restrictions in connection with geopolitical conflicts could limit our ability to transact with certain customers, suppliers, or markets, or could otherwise impair our international operations.

We currently sell our products and serve customers across Europe, North America, Southeast Asia, South Asia, and Africa. The breadth of our international operations exposes us to the direct and indirect effects of regional conflicts, including disruptions to the operations or financial condition of our customers and supply chain partners. In particular, any expansion of the Middle East conflict that impacts trade routes serving the African or South Asian markets, where we are actively expanding our presence, could be particularly disruptive to our business. We cannot predict the duration or escalation of these or other geopolitical conflicts, and any such conflicts could have a material adverse effect on our business, financial condition, and results of operations.

***Our business has been and may continue to be adversely affected by the outbreaks of viruses or other health epidemics and outbreaks.***

Our business could be materially and adversely affected by the outbreak of a widespread health epidemic, such as COVID-19, avian flu or African swine flu. For instance, in response to COVID-19 China imposed widespread lockdowns, closure of workplaces and restrictions on mobility and travel to contain the spread of the virus. In early 2022, a wave of infections caused by the Omicron variant emerged in Shanghai, and a series of restrictions and quarantines were implemented in Shanghai and other regions to contain the spread. Our manufacturing facilities did not produce at full capacity when restrictive measures were in force for the areas where our manufacturing operations were located during 2022. Especially, our manufacturing operations, among others, cannot be conducted remotely and often require on-site access to materials and equipment.

The possible health epidemics and outbreaks could have a material adverse impact on our or our customers' business operations including reduction or suspension of operations in China, the U.S. or certain parts of the world. Given the general slowdown in economic conditions globally, volatility in the capital markets as well as the general negative impact of the health concerns arising from outbreaks of viruses or other illnesses on the global market, we cannot assure you that we will be able to maintain the growth rate we have experienced or projected.

**RISKS RELATED TO COMMON STOCK**

***Numerous factors, many of which are beyond our control, may cause the market price of common stock to fluctuate significantly.***

There are numerous factors, many of which are beyond our control, may cause the market price of common stock of CBAK Energy Technology, Inc. to fluctuate significantly. These factors include:

● our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;

● changes in financial estimates by us or by any securities analysts who might cover the common stock;

● speculation about our business in the press or the investment community;

● significant developments relating to our relationships with our customers or suppliers;

● stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industries;

● customer demand for our products;

● investor perceptions of our industry in general and our company in particular;

● the operating and stock performance of comparable companies;

● general economic conditions and trends;

● major catastrophic events;

● announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;

● changes in accounting standards, policies, guidance, interpretation or principles;

● loss of external funding sources;

● sales of our shares, including sales by our directors, officers or significant shareholders; and

● additions or departures of key personnel.

In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company's securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

***Techniques employed by short sellers may drive down the market price of the common stock of CBAK Energy Technology, Inc.***

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, a number of targets of such efforts are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

We were the subject of certain unfavorable allegations. Although we believe such allegations are untrue, inaccurate or inflated, we have expended resources to investigate such allegations and defend ourselves and we may need to expend more resources in connection with these or other allegations in the future, which could be costly and time-consuming and could distract our management from growing our business. The allegations against us may severely impact our stock price and disrupt our business operations. Any investment in the common stock of CBAK Energy Technology, Inc. could be greatly reduced or even rendered worthless due to such allegations.

***If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for shares of CBAK Energy Technology, Inc. and make obtaining future debt or equity financing more difficult for us.***

CBAK Energy Technology, Inc.'s common stock is traded and listed on the Nasdaq under the symbol "CBAT", which was changed from "CBAK" on November 30, 2018. The common stock may be delisted if we fail to maintain certain Nasdaq listing requirements.

On October 1, 2025, we received notice from the Listing Qualifications Department of Nasdaq indicating that, for the preceding 30 consecutive business days, the bid price for the common stock had closed below the minimum $1.00 per share and as a result, CBAK Energy Technology, Inc. was no longer in compliance with the Nasdaq Listing Rule 5550(a)(2). Subsequently, on March 17, 2026, the Company received a notification letter from the Listing Qualifications Department of Nasdaq stating that the Company had regained compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq. Nasdaq determined that, from February 17, 2026 to March 16, 2026, the closing bid price of the Company's common stock had been at $1.00 per share or greater. Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and the matter is now closed.

Although we have recently regained compliance with Nasdaq's minimum bid price requirement, we cannot assure you that we will be able to maintain such compliance or continue to comply with other requirements for continued listing on the Nasdaq in the future. If the common stock loses its status on the Nasdaq, the common stock would likely trade in the over-the-counter market. If our shares were to trade on the over-the-counter market, selling the common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts' coverage of us may be reduced. In addition, in the event the common stock is delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in the common stock, further limiting the liquidity of the common stock. These factors could result in lower prices and larger spreads in the bid and ask prices for the common stock. Such delisting from the Nasdaq and continued or further declines in our share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions.

***If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.***

U.S. public companies that have substantially all of their operations in China, particularly companies like us which have completed so-called reverse merger transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies have also been subject to shareholder lawsuits and SEC enforcement actions, and have been conducting internal and external investigations into the allegations. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from growing our company. If such allegations are not proven to be groundless, our company and business operations will be severely and your investment in our stock could be rendered worthless.

***The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency that is located in China where substantially all of our operations and business are located have conducted any due diligence on our operations or reviewed or cleared any of our disclosures.***

 ****

We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Unlike public reporting companies whose operations are located primarily in the United States, however, substantially all of our operations are located in China. Since substantially all of our operations and business take place in China, it may be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosures. These same obstacles are not present for similar companies whose operations or business take place entirely or primarily in the United States. Furthermore, our SEC reports and other disclosures and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review of China Securities Regulatory Commission, a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any due diligence on our company and with the understanding that none of our SEC reports, other filings or any of our other public pronouncements has been reviewed or otherwise been scrutinized by any local regulator.

**GENERAL RISK FACTORS**

***We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could cause our loss of significant rights and inability to continue providing our existing product offerings.***

Our success also depends largely on our ability to use and develop our technology and know-how without infringing the intellectual property rights of third parties. The validity and scope of claims relating to lithium-ion battery technology patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly expensive and time-consuming. If there is a successful claim of infringement against us, we may be required to pay substantial damages to the party claiming infringement, develop non-infringing technologies or enter into royalty or license agreements that may not be available on acceptable terms, if at all. Our failure to develop non-infringing technologies or license the proprietary rights on a timely basis would harm our business. Protracted litigation could result in our customers, or potential customers, deferring or limiting their purchase or use of our products until resolution of such litigation. Parties making the infringement claim may also obtain an injunction that can prevent us from selling our products or using technology that contains the allegedly infringing contents. Any intellectual property litigation could have a material adverse effect on our business, results of operation and financial condition.

***Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.***

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the U.S. Federal Deposit Insurance Corporation (the "FDIC"); on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership; the following week, a syndicate of U.S. banks infused $30 billion in First Republic Bank; and later that same week, the Swiss Central Bank provided $54 billion in covered loan and short-term liquidity facilities to Credit Suisse Group AG, all in an attempt to reassure depositors and calm fears of a banking contagion. Our ability to effectively run our business could be adversely affected by general conditions in the global economy and in the financial services industry.

Various macroeconomic factors could adversely affect our business, including fears concerning the banking sector, changes in inflation, interest rates and overall economic conditions and uncertainties. A severe or prolonged economic downturn could result in a variety of risks, including our ability to raise additional funding on a timely basis or on acceptable terms. A weak or declining economy could also impact third parties upon whom we depend to run our business. Increasing concerns over bank failures and bailouts and their potential broader effects and potential systemic risk on the global banking sector generally and its participants may adversely affect our access to capital and our business and operations more generally.

**ITEM 1B. UNRESOLVED STAFF COMMENTS.**

Not applicable.

**ITEM 1C. CYBERSECURITY**

We have taken a multifaceted approach to addressing cybersecurity risks, including leadership from our senior management and Board of Directors, direct supervision and operational execution from our information technology ("IT") department and active involvement of employees. The Company's senior management devotes significant resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats. We periodically assess the threat landscape and take a holistic view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection and mitigation. Our IT team reviews cybersecurity risks, and we have a set of Company-wide policies and procedures concerning cybersecurity matters, including policies related to encryption standards, remote access, multi factor authentication, confidential information, the use of the internet, social media, email and wireless devices and incident response.

The Company's Chief Executive Officer is responsible for developing and implementing our information security measures and overseeing our IT department. The Company has established a physical firewall, with physical gateways that filter suspicious files and data flows entering and exiting our Company's network. In addition, the computers in our R&D department are equipped with behavior control software, which makes emails and files sent from the R&D computers in an encrypted state and inaccessible without specific authorization from designated supervisors.

The Company's IT department is directly responsible for cybersecurity matters and routinely reports to the senior management. In the event of a cybersecurity incident, the IT department will initially report to the Company's senior management, including our Chief Executive Officer. If the incident is assessed as a material threat or incident to our information systems, our senior management will escalate the issue to the Board of Directors. Given that our core operations are in manufacturing and involve limited network-related activities, we believe that our existing cybersecurity measures are adequate. The Company's Board of Directors and senior management are committed to continuously evaluating and upgrading our cybersecurity prevention, detection, and mitigation strategies in line with the evolution of our business needs and cybersecurity risks.

In the fiscal year ended December 31, 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents. For additional information about these risks, see "*Risks Related to Our Business—We rely significantly on technology and systems to support our production, supply chain, payments, financial reporting and other key aspects of our business. Any failure, inadequacy, interruption or security failure of those systems could have a material adverse effect on our business, reputation and brand, financial condition, and results of operations*" and "*Risks Related to Our Business—System security risk issues, and disruption of our internal operations or information technology systems, could have a material adverse effect on our business, financial condition, and results of operations*" in Item 1A-Risk Factors.

**ITEM 2. PROPERTIES.**

We have completed the construction of the facilities in our Dalian site with a total area of 83,584 square meters comprising manufacturing facilities, warehousing and packaging facilities and administrative offices at the BAK Industrial Park in Dalian. Of that space, approximately 55,463 square meters are manufacturing facilities. Our power battery manufacturing plant and packing plant in Dalian started commercial production in July 2015. In 2025, we further expanded our Dalian operations by constructing two additional buildings. Construction for these two new facilities commenced on March 23, 2025, and was completed on November 10, 2025.

We have completed the construction facilities for the Phase One of our Nanjing site, which occupies an area of 27,141 square meters. The Phase Two of our Nanjing site occupies an area of 61,434 square meter, includes 53,854 square meters of manufacturing facilities.

In November 2021, the Company completed the acquisition of Hitrans. Hitrans owns a manufacturing facility, warehousing, R&D and administrative offices in Zhejiang with a total area of 72,005 square meters. Of that space, approximately 10,204 square meters are manufacturing facilities. Yuanchuang acquired a land use right on May 13, 2025 to build a factory in Anhui, PRC for cathode materials manufacturing. The construction was in progress with a total area of 34,522 square meters.

In July 2023, we secured a rental agreement for a facility in Shangqiu, Henan, PRC, spanning an area of 22,000 square meters. This space includes 12,000 square meters allocated for production purposes, specifically aimed at expanding our capacity to manufacture model 26700 cells. This strategic move is in response to the escalating demand for our battery products. Additionally, Nanjing BFD has leased a property covering 6,610 square meters.

We believe that our facilities, including those under construction, meet our current business needs and will meet the needs of our expanded operations in the future.

The following tables sets forth the breakdown of our facilities as of December 31, 2025 based on use.

---

| | | |
|:---|:---|:---|
| **Facility** | **Usage** | **Area<br> (m<sup>2</sup>)** |
| Constructions completed – facilities owned | Manufacturing | 65667 |
|  | R&D and administrative | 98815 |
|  | Warehousing | 20443 |
|  | Other facilities | 5186 |
|  | **Total** | 190111 |
| Constructions–completed - facilities rented | Manufacturing | 98080 |
|  | Warehousing | 12798 |
|  | Administrative | 6414 |
|  | Other facilities | 6307 |
|  | **Total** | 117185 |

---

The following table presents the total acreage of facilities controlled by each of our major operating subsidiaries as of December 31, 2025:

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| | | |
|:---|:---|:---|
|  |  | **Area<br> (m<sup>2</sup>)** |
| Dalian CBAK Power facilities site area | **Total** | 83584 |
| Nanjing CBAK facility site area | **Total** | 88575 |
| Nanjing BFD facilities site area | **Total** | 6610 |
| Hitrans facilities site area | **Total** | 106527 |
| Shangqiu facilities site area | **Total** | 22000 |

---

See also "*Item 1. Business—Overview of Our Business—Expansion of Manufacturing Capabilities*" for more information related to the construction of our Nanjing facilities.

We currently have insurance coverage for certain buildings located at our facilities in Dalian. We are discussing with multiple insurance service providers aiming to secure comprehensive insurance coverage for the remaining properties. In addition, our subsidiary, Hitrans, maintains property insurance coverage against certain property and inventory damages and losses.

See also "*Risk Factors—Risks Related to Our Business—While certain of our subsidiaries maintain product liability insurance, we do not maintain comprehensive product liability insurance across all our operations to cover all claims against our product quality. Defects in our products could result in a loss of customers and decrease in revenue, unexpected expenses and a loss of market share*."

**ITEM 3. LEGAL PROCEEDINGS.**

See Note 28. "*Commitments and Contingencies—(ii) Litigation*" to our audited consolidated financial statements included in this report.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**PART II**

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.**

**Market Information**

Effective June 21, 2019, the Company's Common Stock started trading on the Nasdaq under the symbol "CBAT."

**Approximate Number of Holders of Our Common Stock**

As of March 25, 2026, there were approximately 48 holders of record of our common stock, which do not include the number of stockholders holding shares of our common stock in "street name."

**Dividend Policy**

We have never declared or paid any dividends, nor do we have any present plan to pay any cash dividends on our common stock in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

As we are a holding company, we rely on dividends paid to us by our subsidiaries in the PRC through our Hong Kong subsidiaries, BAK Asia, BAK Investments and Hong Kong Hitrans. In accordance with its articles of association, each of our subsidiaries in the PRC is required to allocate to its statutory general reserve at least 10% of its respective after-tax profits determined in accordance with the PRC accounting standards and regulations. Each of our subsidiaries in the PRC may stop allocations to its general reserve if such reserve has reached 50% of its registered capital. Allocations to the reserve can only be used for making up losses and other specified purposes and may not be paid to us in the form of loans, advances, or cash dividends. Dividends paid by our PRC subsidiaries to BAK Asia, BAK Investments and Hong Kong Hitrans, our Hong Kong subsidiaries, will not be subject to Hong Kong capital gains or other income tax under current Hong Kong laws and regulations because they will not be deemed to be assessable income derived from or arising in Hong Kong. Such dividends, however, may be subject to a 10% withholding tax in the PRC.

Our board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they become due, as provided in Chapter 78.288 of the Nevada Revised Statutes. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

**Recent Sales of Unregistered Securities**

There were no unregistered sales of equity securities during the 2025 fiscal year that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the 2025 fiscal year.

**Issuer Purchases of Equity Securities**

Our common stock repurchase activity for the three months ended December 31, 2025 was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total<br> Number of<br> Shares<br> Purchased** | **Average<br> Price <br> Paid Per<br> Share(1)** | **Total<br> Number of<br> Shares<br> Purchased <br> as Part of<br> Publicly<br> Announced<br> Plan** | **Approximate<br> Dollar<br> Value of Shares<br> that May <br> Yet Be<br> Purchased <br> Under the<br> Plan(2)** |
| October 1, 2025 to October 31, 2025 |  | $- |  | $18499765 |
| November 1, 2025 to November 30, 2025 |  |  |  | $18499765 |
| December 1, 2025 to December 31, 2025 |  | &nbsp;&nbsp;&nbsp;&nbsp;- |  | $18499765 |
| Total |  | $- |  | $18499765 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Average price paid per
 share excludes broker commissions and fees.

&nbsp;&nbsp;&nbsp;&nbsp;(2) On May 20, 2025, our board
 of directors authorized the repurchase of up to $20 million in shares of our outstanding common stock. The stock repurchase program
 will end on May 20, 2026 and may be suspended, modified, or discontinued by the board of directors at any time.

**ITEM 6. [RESERVED]**

**ITEM 7. 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. In addition to historical information, the following discussion contains certain forward-looking information. See "Special Note Regarding Forward Looking Statements" above for certain information concerning those forward-looking statements. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.*

**Overview**

Our core operations encompass the comprehensive research, development, manufacturing, and commercialization of advanced energy solutions. Operating as a vertically integrated manufacturer, our portfolio spans upstream active materials—specifically lithium-ion precursors and cathode materials—through the production of high-power lithium-ion and sodium-ion cells, and the final assembly of turnkey battery systems. These highly engineered products are strategically targeted for deployment across the following primary sectors:

● Electric vehicles ("EV"), such as electric cars, electric buses, hybrid electric cars and buses;

● Light electric vehicles ("LEV"), such as electric bicycles, electric motors, electric tricycles and smaller-sized electric cars; and

● Energy storage including but not limited to residential energy supply & uninterruptible power supply application, and other high-power applications.

During 2025, market demand for our Dalian-manufactured model 26650 lithium-ion batteries gradually contracted, reflecting the natural lifecycle of a product introduced in 2006. In contrast, demand for our model 32140 cells, produced in Nanjing, heavily exceeded available supply. To capitalize on these market shifts, we are updating the Dalian facility's portfolio with the introduction of the model 40135, while expanding the Nanjing facility's output through our Phase II line additions. Currently, the Dalian center houses three model 26650 production lines (1.0 GWh annual capacity) and one new model 40135 line (2.3 GWh annual capacity) that is actively ramping up. In Nanjing, our Phase I lines deliver 1.5 GWh of model 32140 cells annually, while the two higher-speed Phase II lines provide an additional 3.0 GWh. Furthermore, we currently lease a manufacturing center in Shangqiu, operating two production lines that yield 0.5 GWh of model 26700 cells annually. Model 26700 is a variant to model 26650, and is suitable to backup battery units ("BBU") at data centers.

We generated revenues from the manufacture and sale of high-power lithium and sodium batteries as well as raw materials for lithium batteries in the aggregate amounts of $176.6 million and $195.2 million for the fiscal years ended December 31, 2024 and 2025, respectively. We recorded a net income of $9.6 million and a net loss $11.0 million during the fiscal years ended December 31, 2024 and 2025, respectively. New revenues derived from the sale of materials used in manufacturing of lithium batteries, through the acquired subsidiary, Hitrans, as well as the continuous climb of sales in batteries used in residential energy supply and UPS and light-electric-vehicle related products, contributed to our total net revenues.

For more details, see "*Item 1. Business—Overview of Our Business*." Specifically, total net revenue from sales of batteries for residential energy supply and uninterruptable supplies was $68.8 million for the fiscal year ended December 31, 2025, as compared to $124.6 million for fiscal year ended December 31, 2024. Net revenue from sales of cathode materials and precursors was $89.2 million for the fiscal year ended December 31, 2025, as compared to $40.0 million for fiscal year ended December 31, 2024. In addition, net revenues from sales of batteries for light electric vehicles was $36.4 million for the fiscal year ended December 31, 2025, as compared to $10.3 million for fiscal year ended December 31, 2024, an increase of $26.0 million, or 252%. We believe the government's new energy policies will, in the long run, encourage the production of new energy vehicles, optimize the industry's structure, enhance technical standards and strengthen the industry's competitiveness, which ultimately will foster strategic development of new energy vehicles. In addition, our latest development of Model 32140 and 40135 battery and our planned investment in the R&D of Series 60 batteries will help us regain competitiveness in the energy storage, LEV and EV markets with the appropriate products. With the demand for new energy growing, we are confident in our ability to secure additional orders from the expanding market.

The Dalian manufacturing center, which originally commenced commercial operations in July 2015, currently maintains two legacy production lines yielding an annual capacity of 1.0 GWh for our model 26650 cells. To execute our next-generation expansion strategy, we have successfully completed the construction of a new, large-format cylindrical cell production line dedicated to the model 40135. This advanced line adds 2.3 GWh of design capacity and is currently undergoing its production ramp-up phase, with the facility projected to achieve its maximum aggregate capacity of 3.3 GWh by early 2027.

In 2020, we initiated a two-phase construction strategy for our Nanjing manufacturing campus. Phase I commenced operations in the second half of 2021, encompassing approximately 27,173 square meters, and has since steadily scaled to an annualized production capacity of 1.5 GWh. Construction of Phase II, which comprises three primary manufacturing plants, began in 2022. We are currently deploying production infrastructure within the first of these three Phase II plants. Following rigorous equipment installation and commissioning protocols in 2025, we officially commenced operations for two new production lines yielding a combined annual capacity of 3.0 GWh. We project these lines will complete their operational ramp-up and achieve maximum capacity utilization by early 2027. Upon the full operational integration of all three Phase II plants, the aggregate capacity of the Nanjing campus is projected to reach approximately 20 GWh, systematically addressing escalating client demand.

Furthermore, driven by surging order volumes in 2023, we executed a strategic lease for supplemental manufacturing space in Shangqiu, Henan Province, PRC. This facility operates two production lines dedicated to our model 26700 cells—an advanced variant of the 26650 with an architecture suitable for data center uninterruptible power supply (UPS) applications—providing 0.5 GWh of annual capacity. Notably, capital improvement costs for this facility were fully absorbed by the lessor, and subject to specific regulatory criteria, applicable lease expenditures are eligible for local tax offsets. Moving forward, we anticipate this highly optimized capacity expansion will drive sustained margin expansion and profitability across our battery segment.&nbsp;&nbsp;&nbsp;&nbsp;

We acquired 81.56% of registered equity interests (representing 75.57% of paid-up capital) in Hitrans, a leading developer and manufacturer of NCM precursor and cathode materials in China, in November 2021. As of December 31, 2025, our equity interests in Hitrans had reduced to 73.46% (representing 79.64% of paid-up capital) after Hitrans accepted investments from several investors. See "*Item 1. Business—Overview of Our Business—Acquisition of A Raw Materials Manufacturer*" for more information on the acquisition.

The consolidated financial statements contained in this annual report 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 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.

**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, sub-contracting charges, 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 for Hitrans, CBAK Power, Nanjing CBAK and Nanjing BFD have been recognized as a "High and New Technology Enterprise" and enjoyed a preferential tax rate of 15% for three years from the approval date, expiring in 2025 to 2026. Our Hong Kong subsidiaries, BAK Asia, BAK Investment and Hong Kong Hitrans, 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, BAK Asia, BAK Investment and Hong Kong Hitrans had not paid any such tax. CBAK Lithium Battery Malaysia is subject to income tax laws of Malaysia at the statutory rate of 24%. We did not have any assessable income derived from or arising in Malaysia for the year ended December 31, 2025.

**Results of Operations**

***Comparison of Years Ended December 31, 2025 and 2024***

The following table sets forth key components of our results of operations for the years indicated, both in dollars and as a percentage of our revenue.

(All amounts, other than percentages, in thousands of U.S. dollars)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Year Ended December 31,*** | ***Year Ended December 31,*** | ***Change*** | ***Change*** |
|  | ***2024*** | ***2025*** | ***$*** | *%*** |
| Net revenues | $176615 | $195189 |  | 11% |
| Cost of revenues | (134839) | (176767) |  | 31% |
| Gross profit | 41776 | 18422 |  | -56% |
| Operating expenses: |  |  |  |  |
| Research and development expenses | (13010) | (15802) |  | 22% |
| Sales and marketing expenses | (5198) | (5077) |  | -2% |
| General and administrative expenses | (13948) | (16195) |  | 16% |
| Impairment charge on property, plant and equipment | (475) |  |  | -100% |
| Provision of expected credit losses, net | (356) | 210 |  | -159% |
| Total operating expenses | (32987) | (36864) |  | 12% |
| Operating income (loss) | 8789 | (18442) |  | -310% |
| Finance income (expenses), net | 1283 | (673) |  | -152% |
| Share of (loss) income of equity investee | (19) | 145 |  | -863% |
| Gain on disposal of equity investee | 45 |  |  | -100% |
| Other income, net | 1046 | 8273 |  | 691% |
| Change in fair value of financial derivatives |  | (440) |  | n/a |
| Income (loss) before income tax | 11144 | (11137) |  | -200% |
| Income tax (expense) credit | (1559) | 185 |  | -112% |
| Net income (loss) | 9585 | (10952) |  | -214% |
| Less: Net loss attributable to non-controlling interests | 2205 | 1574 |  | -29% |
| Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. | $11790 | (9378) |  | -180% |

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***Net revenues***. Net revenues were $176.8 million for the fiscal year ended December 31, 2024 as compared to $195.2 million for the fiscal year ended December 31, 2025, an increase of $18.6 million, or 11%.

The following table sets forth the breakdown of our net revenues by end-product applications.

(All amounts, other than percentage, in thousands of U.S. dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended** | **Years Ended** | |
|  | | |<br>**Change** |
|  | **December 31,**<br>**2024** | **December 31,**<br>**2025** | **%** |
| High-power lithium batteries used in: |  |  |  |
| Electric vehicles | $1682 | $796) | -53% |
| Light electric vehicles | 10319 | 36363 | 252% |
| Residential Energy Supply & Uninterruptable supplies | 124588 | 68823 | -45% |
|  | 136589 | 105982) | -22% |
| Materials used in manufacturing of lithium batteries |  |  |  |
| Cathode | 34229 | 82483 | 141% |
| Precursor | 5797 | 6724 | 16% |
|  | 40026 | 89207 | 123% |
| Total | $176615 | $195189 | 11% |

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Net revenues from sales of batteries for electric vehicles were $0.8 million for the fiscal year ended December 31, 2025, as compared to $1.7 million for 2024, a decrease of $0.9 million or 53%.

Net revenues from sales of batteries for light electric vehicles was approximately $10.3 million for the fiscal year ended December 31, 2024, as compared $36.4 million for 2025, representing an increase of $26.0 million, or 252%. We strive to continue to penetrate the market for batteries used in light electric vehicles, especially the international market such as India, Vietnam and Africa. We believe that our sales campaign in the international market has contributed to a rebound in our sales volume in this sector.

Net revenues from sales of batteries for residential energy supply & uninterruptable supplies was $68.8 million for the fiscal year ended December 31, 2025, as compared to $124.6 million for fiscal year ended December 31, 2024. The substantial decline primarily stems from production changes at our Dalian facilities, where a major portion of its customers are in the residential energy supply sector. These facilities are currently undergoing a product portfolio upgrade, transitioning from Model 26650, a battery model used for about two decades, to Model 40135, a much larger and modern model that the current market prefers, for our customers.

Net revenues from sales of materials for use in manufacturing of lithium battery cells were $89.2 million for the fiscal year ended December 31, 2025, as compared to $40.0 million for 2024, an increase of $49.2 million, or 123%. This increase primarily resulted from the successful acquisition of new customers and a highly favorable raw material pricing environment.

***Cost of revenues*.** Cost of revenues increased to $176.8 million for the fiscal year ended December 31, 2025, as compared to $134.8 million for 2024, an increase of $41.9 million, or 31.1%. The cost of revenues includes written down of obsolete inventories of $6.6 million for the year ended December 31, 2025, as compared to write down of obsolete inventories of $4.9 million for the same period in 2024. We write down the inventory value whenever there is an indication that it is impaired.

***Gross profit.*** Gross profit for the year ended December 31, 2025 was $18.4 million, or 9.4% of net revenues as compared to gross profit of $41.8 million, or 24% of net revenues, for the fiscal year ended December 31, 2024. The significant decline in gross profits aligns with the substantial drop in sales of batteries for residential energy supply and uninterruptible power supplies, which have a higher gross profit margin compared to other products. We expect gross profit margins to gradually recover upon the upgrade from Model 26650 to Model 40135.

***Research and development expenses*.** Research and development expenses increased to $15.8 million for the year ended December 31, 2025, as compared to $13.0 million for 2024, an increase of $2.8 million, or 22%. The increase primarily resulted from the increase of materials and consumables used for the development of series 40 batteries and the increase in salaries and social insurance expenses due to a growing number of employees at CBAK Power and Nanjing CBAK. The materials and consumables used were $1.8 million for the years ended December 31, 2025 compared to $1.0 million for the same period in 2024. The salaries and social insurance increased by $0.8 million for the year ended December 31, 2025, compared to same period in 2024.

***Sales and marketing expenses*.** Sales and marketing expenses were $5.1 million and $5.2 million for the years ended December 31, 2025, and 2024, respectively. As a percentage of revenues, sales and marketing expenses were 2.6% and 2.9% of revenues for the years ended December 31, 2025 and 2024, respectively.

***General and administrative expenses.*** General and administrative expenses were $16.2 million and $13.9 million for the years ended December 31, 2025 and 2024, respectively, representing an increase of $2.3 million, or 16.1%. The increase primarily resulted from salaries and social insurance expenses, utilities and depreciation changes due to Nanjing CBAK and CBAK Power new production lines. We incurred $6.6 million in salaries and social insurance cost for the year ended December 31, 2025 compared to $6.3 million for the same period in 2024. With the expansion of our business, operating expenses, including office supplies, utilities and depreciation increased by $1.3 million for the years ended December 31, 2025. We have incurred an extra $0.5 million on business consultancy services in fiscal 2025.

***Long-lived assets impairment charge.*** During the course of our strategic review of our operations, we assessed the recoverability of the carrying value of our long-lived assets which resulted in impairment losses of nil and $0.5 million for the years ended December 31, 2025 and 2024, respectively. The impairment charge represented the excess of carrying amounts of our long-lived assets over the estimated fair value of the Company's production facilities in Hitrans for the production of materials used in manufacturing of lithium batteries, due to underperformance of Hitrans reporting unit. No impairment charge on production facilities in Dalian, Nanjing and Shangqiu.

***Provision for expected credit losses.*** Reversal of expected credit losses was $0.2 million for the year ended December 31, 2025, as compared to $0.4 million for 2024. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions.

***Operating income (loss).*** As a result of the above, our operating loss was $18.4 million for the year ended December 31, 2025, as compared to an operating income of $8.8 million for 2024.

***Finance income (expenses), net.*** Finance expenses, net was $0.7 million for the year ended December 31, 2025, compared to a finance income of $1.3 million for the year ended December 31, 2024. The finance expenses increase mainly resulted from increase in interest expenses from our bank borrowings.

***Other income, net.*** Other income was $8.3 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively. We received a $5.0 million compensation from a cancelled order from our customer in 2025.

***Loss on derivatives instruments.*** Loss on derivatives instruments was $0.4 million and nil for the years ended December 31, 2025 and 2024, respectively. We have entered into foreign currency forward contracts and options swaps and commodity contracts to mitigate our exposures to exchange rate and raw materials price fluctuations.

***Income tax credit (expenses).*** Income tax credit was $0.2 million for the year ended December 31, 2025, compared to an income tax expense of $1.6 million for the year ended December 31, 2024. The income tax credit and expense in 2025 and 2024, respectively, were incurred by our batteries segment.

***Net income (loss).*** As a result of the foregoing, we had a net loss of $11.0 million for the year ended December 31, 2025, compared to a net income of $9.6 million for the year ended December 31, 2024.

**Liquidity and Capital Resources**

We have financed our liquidity requirements from a variety of sources, including 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.

As of December 31, 2025, we had cash and cash equivalents and restricted cash of $75.7 million. Our total current assets were $180.6 million and our total current liabilities were $299.8 million, resulting in a net working capital deficit of $119.2 million.

*Lending from Financial Institutions*

In January 2023, Hitrans renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB160.0 million (approximately $22.1 million) with the term from January 2023 to December 2027. On January 22, 2025, Hitrans and Bank of Communications entered into a new banking facility for another five years from January 22, 2025 to January 22, 2030 for a maximum guarantee of loan amount to RMB155.8 million (approximately $21.5 million). The facility was secured by Hitrans's land use rights and buildings. On October 24, 2025, Hitrans and Bank of Communications renewed the facility to a maximum guarantee of loan amount to RMB162.0 million (approximately $23.1 million). Under the facility, Hitrans borrowed RMB137.2 million (approximately $19.6 million) as of December 31, 2025, bearing interest at 2.5% to 3.45% per annum expiring through January to June 2026.

On January 17, 2022, Nanjing CBAK obtained a one-year term facility from Agricultural Bank of China with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 105% of benchmark rate of the People's Bank of China ("PBOC") for short-term loans, which is 3.85% per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan and secured by an unrelated third party, Jiangsu Credits Financing Guarantee Co., Ltd. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on January 20, 2022 for a term until January 16, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) early on January 5, 2023. On January 6, 2023, Nanjing CBAK borrowed a one-year term loan of RMB10 million (approximately $1.4 million) for a period of one year to January 4, 2024, bearing interest at 120% of benchmark rate of the PBOC for short-term loans, which is 3.85% per annum, while other terms and guarantee remain the same. Nanjing CBAK repaid the loan on January 4, 2024.

On February 9, 2022, NJ CBAK obtained a one-year term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 124% of benchmark rate of the People's Bank of China ("PBOC") for short-term loans, which is 4.94% per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January 28, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, Nanjing CBAK borrowed a one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 129% of benchmark rate of PBOC for short-term loans, which is 4.70% per annum for a term until January 13, 2024. Nanjing CBAK repaid the loan on January 13, 2024.

On April 28, 2022, Nanjing CBAK obtained a three-year term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch, with a maximum amount of RMB12 million (approximately $1.7 million) with the term from April 21, 2022 to April 21, 2025. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.5 million) on April 29, 2022, bearing interest at 3.95% per annum for a term until April 29, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, Nanjing CBAK borrowed another one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 102.5% of benchmark rate of PBOC for short-term loans, which is 3.90% per annum for a term until April 19, 2024. Nanjing CBAK repaid the loan on April 19, 2024.

Nanjing CBAK entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately $1.2 million) bearing interest rate at 4.6% per annum for a period from September 27, 2023 to August 31, 2024. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment and the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. NJ CBAK borrowed RMB9 million (approximately $1.3 million) on September 27, 2023 for a term until August 31, 2024. Nanjing CBAK repaid the loan on August 31, 2024.

Hitrans entered into a loan agreement with China CITIC Bank Shaoxing Branch for a short-term loan of RMB4.8 million (approximately $0.7 million) from August 10, 2023 to May 2, 2024, bearing interest rate at 4.3% per annum. Hitrans repaid the loan on May 2, 2024.

On January 7, 2023, Nanjing CBAK obtained a two-year term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) for a period from January 7, 2023 to January 6, 2025. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK borrowed RMB5 million (approximately $0.7 million) on January 12, 2023 for a term of one year until January 11, 2024, bearing interest at 3.65% per annum. Nanjing CBAK repaid the above early on June 15, 2023. On June 27, 2023, Nanjing CBAK entered into another loan agreement for one year from June 27, 2023 to June 26, 2024 under the two-year term facility for a maximum loan amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.65 % pr annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on the same date. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK repaid the loan on June 26, 2024.

On March 28, 2024, CBAK New Energy and Bank of China Limited entered into a short-term loan agreement for one year from March 29, 2023 to March 28, 2024 for a maximum loan amount to RMB5 million (approximately $0.7 million) bearing interest rate at 3.65% per annum. CBAK New Energy borrowed RMB5 million (approximately $0.7 million) on the same date. The loan was secured by CBAK Power's buildings in Dalian. CBAK New Energy repaid RMB5 million (approximately $0.7 million) on March 27, 2024. On March 28, 2024, CBAK New Energy borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing interest rate at 3.45% per annum. CBAK New Energy early repaid the loan on August 21, 2024.

On April 19, 2023, Nanjing CBAK and Bank of Nanjing Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023 to April 9, 2024 for RMB10 million (approximately $1.4 million) bearing interest rate at 3.7% per annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on April 23, 2023. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Nanjing CBAK repaid the loan on April 9, 2024.

On July 31, 2023, Nanjing CBAK obtained a three-year term facility from Bank of China Gaochun Branch, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from July 31, 2023 to July 30, 2026. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum. Nanjing CBAK repaid the loan on July 22, 2024.

On August 3, 2023, CBAK Energy and Bank of China entered into a short term loan agreement for one year from August 3, 2023 to August 2, 2024 for a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.55% per annum. CBAK Energy borrowed RMB10 million (approximately $1.4 million) on September 27, 2023. The loan was secured by CBAK Power's buildings in Dalian. CBAK Energy repaid the loan on August 2, 2024.

On January 24, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to January 17, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.

On March 26, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to March 25, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.

On April 9, 2024, Hitrans and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from April 9, 2024 to April 7, 2025 for a maximum loan amount to RMB5.5 million (approximately $0.8 million) bearing interest rate at 4.05% per annum. Hitrans borrowed RMB5.5 million (approximately $0.8 million) on the same date. Hitrans early repaid the loan on January 24, 2025.

On June 24, 2024, CBAK Nanjing and Bank of China entered into a short-term loan agreement, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from June 24, 2024 to June 20, 2025.The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, CBAK Nanjing borrowed RMB10 million (approximately $1.4 million) on June 24, 2024, bearing interest rate at 3.0% per annum. CBAK Nanjing early repaid the loan on August 23, 2024.

On September 29, 2024, Hitrans and Zhejiang Shangyu Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement for RMB15 million (approximately $2.0 million) with the term of one year from September 29, 2024 to September 26, 2025 bearing 4.00% interest rate. Hitrans borrowed RMB15 million (approximately $2.1 million) on the same date. Hitrans repaid the loan on September 26, 2025.

On December 31, 2024, Hitrans and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB10 million (approximately $1.4 million) with the term of one year from December 31, 2024 to December 30, 2025 bearing 2.9% interest rate. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date. Hitrans repaid the loan on December 30, 2025.

On January 17, 2025, Hitrans entered into a long-term Maximum Pledge Agreement with Zhejiang Shangyu Rural Commercial Bank, for the period from January 17, 2025 to September 25, 2027, with a maximum facility amount of RMB76.56 million (approximately $10.54 million). The facility was secured by the land use right and buildings of Hitrans. Hitrans has borrowed RMB38.9 million (approximately $5.5 million) as of December 31, 2025, bearing interest rate at 2.85% - 2.96% per annum, of which RMB10 million (approximately $1.4 million) repayable on January 16, 2026, RMB3.9 million (approximately $0.5 million) repayable on June 20, 2027 and the remaining RMB25 million (approximately $3.6 million) repayable on September 25, 2027. Hitrans repaid RMB10 million (approximately $1.4 million) on January 16, 2026.

On January 20, 2025, Nanjing CBAK entered into an unsecured revolving loan agreement with Bank of Ningbo Co., Ltd. Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 2.8% per annum (LPR interest rate -30 bp), with a one-year loan period ending on January 20, 2026. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) under this loan agreement on January 20, 2025. Nanjing CBAK early repaid the loan on September 20, 2025.

On February 19, 2025, Nanjing CBAK obtained a RMB30 million facility (approximately $4.1 million) from Jiangsu Gaochun Rural Commercial Bank, with the term from February 19, 2025 to September 23, 2027. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment. Nanjing CBAK borrowed RMB3 million (approximately $0.4 million) as of December 31, 2025, bearing interest rate at 2.98% per annum, repayable on May 19, 2026.

On February 25, 2025, Hitrans entered into a short-term factoring loan agreement with China Construction Bank Co., Ltd for a maximum amount of RMB10 million (approximately $1.4 million) for a period of one year from February 28, 2025 to February 27, 2026, bearing interest of 3.7% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date. Hitrans repaid the factoring loan in February 2026.

Hitrans obtained another 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 November 28, 2025 to November 27, 2026, bearing interest of 3.1% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date.

On June 28, 2025, Nanjing CBAK entered into a short-term loan agreement with Agricultural Bank of China Co., Limited for RMB12 million (approximately $1.7 million) from June 28, 2025 to June 26, 2026, bearing interest 2.60% per annum. Nanjing CBAK borrowed RMB12 million (approximately $1.7 million) on the same date. Nanjing CBAK early repaid the loan on July 18, 2025.

On June 30, 2025, CBAK Power obtained a banking facility from China Guangfa Bank Co., Ltd with a maximum amount of RMB100 million (approximately $14 million) for a term to June 12, 2026 for short-term borrowings and issuance of acceptance bills to settle materials suppliers, guaranteed by Power's buildings and pledged deposits. CBAK Power borrowed HKD10 million (approximately $1.4 million) from the above facility, bearing interest at 2.65% per annum, repayable on August 14, 2026. CBAK Power early repaid the loan on November 14, 2025.

CBAK Power has borrowed a series of acceptance bills totaling RMB123.3 million (approximately $17.6 million) for various terms expiring through January to June 2026, which was secured by CBAK Power's buildings and pledged deposit of RMB35.2 million (approximately $5.0 million).

On July 30, 2025, Hitrans entered into a short-term loan agreement with Industrial Bank Co., Ltd for RMB10 million (approximately $1.4 million) for a period of one year bearing interest of 3% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on July 31, 2025.

On August 21, 2025, CBAK Power entered into a short-term loan agreement with China Construction Bank for RMB10 million (approximately $1.4 million) for a period of one year, bearing interest of 2.2% per annum. CBAK Power borrowed RMB10 million (approximately $1.4 million) on August 29, 2025 and repayable on August 21, 2026.

On December 17, 2025, Nanjing BFD entered into a short-term loan agreement with Bank of China Co., Limited for RMB10 million (approximately $1.4 million) from December 17, 2025 to December 16, 2026, bearing interest 2.30% per annum. The loan was guaranteed by CBAK Nanjing. Nanjing BFD borrowed RMB10 million (approximately $1.4 million) on the same date.

CBAK Power and Nanjing CBAK obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB690 million (approximately $96.3 million) with the term to March 16, 2026. CBAK Power and Nanjing CBAK borrowed a series of acceptance bills totaling RMB105.9 million (approximately $15.1 million) for various terms expiring through January to June 2026, which was secured by the CBAK Power's and Nanjing CBAK's pledged deposit of RMB108.2 million (approximately $15.4 million).

Hitrans borrowed a series of acceptance bills totaling RMB98.8 million (approximately $14.1 million) for various terms expiring through January to June 2026, which was secured by Hitrans's pledged deposit of RMB98.9 million (approximately $14.1 million).

Nanjing CBAK borrowed a series of acceptance bills from Bank of Nanjing totaling RMB77.3 million (approximately $11.0 million) for various terms expiring through March to June 2026, which was secured by Nanjing CBAK's pledged deposit of RMB75.4 million (approximately $10.8 million) and the balance guaranteed by 100% equity of CBAK Nanjing held by BAK Investment.

Nanjing CBAK borrowed a series of acceptance bills from Bank of Ningbo totaling RMB0.4 million (approximately $63,549) for various terms expiring in March 2026, which was secured by Nanjing CBAK's pledged deposit of RMB0.4 million (approximately $63,549).

Hitrans borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB33.1 million (approximately $4.7 million) expiring through February 2026 to June 2026, which was secured by Hitrans's pledged deposit of RMB33.1 million (approximately $4.7 million).

Hitrans borrowed a series of acceptance bills from Zhejiang Shangyu Rural Commercial Bank Co., Ltd totaling RMB34.3 million (approximately $4.9 million) expiring through February to June 2026, which was secured by Hitrans's pledged deposit of RMB34.3million (approximately $4.9 million).

CBAK Power borrowed a series of acceptance bills from Industrial and Commercial Bank of China totaling RMB52.7 million (approximately $7.5 million) expiring through January to June 2026, which was secured by CBAK Power's pledged deposit of RMB52.9 million (approximately $7.5 million).

Hitrans borrowed a series of acceptance bills from Industrial Bank totaling RMB16.0 million (approximately $2.3 million) expiring in March 2026, which was secured by Hitrans's pledged deposit of RMB11.0 million (approximately $1.6 million).

Nanjing CBAK borrowed a series of acceptance bills from Agricultural Bank of China totaling RMB27.8 million (approximately $3.9 million) expiring through January to June 2026, which was secured by Nanjing CBAK's pledged deposit of RMB7.8 million (approximately $1.1 million) and the balance guaranteed by 100% equity in CBAK Naning held by BAK Investment.

Nanjing CBAK obtained serval letter of credit from Bank of Ningbo totaled RMB15.0 million (approximately $2.1 million) for settlement of materials purchase for a period of one year expiring through September to November 2026, which was secured by Nanjing CBAK's pledged deposit of RMB15.0 million (approximately $2.1 million).

Hitrans borrowed an acceptance bill from Bank of Ningbo of RMB10 million (approximately $1.4 million) expiring in June 2026, which was secured by Hitran's bills receivables of RMB10 million (approximately $1.4 million).

*Equity and Debt Financings from Investors*

We have also obtained funds through private placements, registered direct offerings and other equity and debt financings in the past:

On July 28, 2016, the Company entered into securities purchase agreements with Mr. Jiping Zhou and Mr. Dawei Li to issue and sell an aggregate of 2,206,640 shares of common stock of the Company, at $2.5 per share, for an aggregate consideration of approximately $5.52 million. On August 17, 2016, the Company issued the foregoing shares to the two investors.

On February 17, 2017, we signed a letter of understanding with each of eight individual investors, including our former CEO, Mr. Yunfei Li, whereby these shareholders agreed in principle to subscribe for new shares of our common stock totaling $10 million. The issue price was determined with reference to the market price prior to the issuance of new shares. In January 2017, the shareholders paid us a total of $2.1 million as refundable earnest money, among which, Mr. Yunfei Li agreed to subscribe new shares totaling $1.12 million and pay a refundable earnest money of $0.2 million. In April and May 2017, we received cash of $9.6 million from these shareholders. On May 31, 2017, we entered into a securities purchase agreement with these investors, pursuant to which we agreed to issue an aggregate of 6,403,518 shares of common stock to these investors, at a purchase price of $1.50 per share, for an aggregate price of $9.6 million, including 764,018 shares issued to Mr. Yunfei Li. On June 22, 2017, we issued the shares to the investors. The issuance of the shares to the investors was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act. In 2019, according to the securities purchase agreement and agreed by the investors, we returned partial earnest money of $966,579 (approximately RMB6.7 million) to these investors.

On January 7, 2019, each of Mr. Dawei Li and Mr. Yunfei Li entered into an agreement with CBAK Power and Tianjin New Energy whereby Tianjin New Energy assigned its rights to loans to CBAK Power of approximately $3.4 million (RMB23,980,950) and $1.7 million (RMB11,647,890) (totaled $5.1 million, the "First Debt") to Mr. Dawei Li and Mr. Yunfei Li, respectively. On the same date, the Company entered into a cancellation agreement with Mr. Dawei Li and Mr. Yunfei Li. Pursuant to the terms of the cancellation agreement, Mr. Dawei Li and Mr. Yunfei Li agreed to cancel the First Debt in exchange for 3,431,373 and 1,666,667 shares of common stock of the Company, respectively, at an exchange price of $1.02 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the First Debt.

On April 26, 2019, each of Mr. Jun Lang, Ms. Jing Shi and Asia EVK Energy Auto Limited ("Asia EVK") entered into an agreement with CBAK Power and Tianjin New Energy whereby Tianjin New Energy assigned its rights to loans to CBAK Power of approximately $0.3 million (RMB2,225,082), $0.1 million (RMB 912,204) and $5.2 million (RMB35,406,036) (collectively $5.7 million, the "Second Debt") to Mr. Jun Lang, Ms. Jing Shi and Asia EVK, respectively. On the same date, the Company entered into a cancellation agreement with Mr. Jun Lang, Ms. Jing Shi and Asia EVK (the creditors). Pursuant to the terms of the Cancellation Agreement, the creditors agreed to cancel the Second Debt in exchange for 300,534, 123,208 and 4,782,163 shares of common stock of the Company, respectively, at an exchange price of $1.1 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the Second Debt.

On June 28, 2019, each of Mr. Dawei Li and Mr.Yunfei Li entered into an agreement with CBAK Power to loan approximately $1.4 million (RMB10,000,000) and $2.5 million (RMB18,000,000), respectively, to CBAK Power for a term of six months (collectively $3.9 million, the "Third Debt"). The loan was unsecured, non-interest bearing and repayable on demand. On July 16, 2019, each of Asia EVK and Mr. Yunfei Li entered into an agreement with CBAK Power and Dalian Zhenghong Architectural Decoration and Installation Engineering Co. Ltd. (the Company's construction contractor) whereby Dalian Zhenghong Architectural Decoration and Installation Engineering Co. Ltd. assigned its rights to the unpaid construction fees owed by CBAK Power of approximately $2.8 million (RMB20,000,000) and $0.4 million (RMB2,813,810) (collectively $3.2 million, the "Fourth Debt") to Asia EVK and Mr. Yunfei Li, respectively. On July 26, 2019, we entered into a cancellation agreement with Mr. Dawei Li, Mr. Yunfei Li and Asia EVK (the creditors). Pursuant to the terms of the cancellation agreement, Mr. Dawei Li, Mr. Yunfei Li and Asia EVK agreed to cancel the Third Debt and Fourth Debt in exchange for 1,384,717, 2,938,067 and 2,769,435 shares of common stock of the Company, respectively, at an exchange price of $1.05 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the Third Debt and Fourth Debt.

On October 10, 2019, each of Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen entered into an agreement with CBAK Power and Zhengzhou BAK New Energy Vehicle Co., Ltd. (the Company's supplier) whereby Zhengzhou BAK New Energy Vehicle Co., Ltd. assigned its rights to the unpaid inventories cost owed by CBAK Power of approximately $2.1 million (RMB15,000,000), $1.0 million (RMB7,380,000) and $1.0 million (RMB7,380,000) (collectively $4.2 million, the "Fifth Debt") to Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen, respectively.

On October 14, 2019, we entered into a cancellation agreement with Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen (the creditors). Pursuant to the terms of the cancellation agreement, Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen agreed to cancel and convert the Fifth Debt and the unpaid earnest money in exchange for 528,053, 3,536,068, 2,267,798 and 2,267,798 shares of common stock of the Company, respectively, at an exchange price of $0.6 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the Fifth Debt and the unpaid earnest money.

On April 27, 2020, we entered into a cancellation agreement with Mr. Yunfei Li, Asia EVK and Mr. Ping Shen, who loaned an aggregate of approximately $4.3 million to CBAK Power (the "Sixth Debt"). Pursuant to the terms of the cancellation agreement, the creditors agreed to cancel the Sixth Debt in exchange for an aggregate of 8,928,193 shares of common stock of the Company at an exchange price of $0.48 per share. According to the amount of loan, 2,062,619, 2,151,017 and 4,714,557 shares were issued to Mr. Yunfei Li, Asia EVK and Mr. Pin Shen, respectively. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the Sixth Debt.

On July 24, 2019, we entered into a securities purchase agreement with Atlas Sciences, LLC (the "Lender"), pursuant to which we issued a promissory note (the "Note I") to the Lender. The Note I has an original principal amount of $1,395,000, bears interest at a rate of 10% per annum and will mature 12 months after the issuance, unless earlier paid or redeemed in accordance with its terms. The Company received proceeds of $1,250,000 after an original issue discount of $125,000 and payment of Lender's expenses of $20,000.

On December 30, 2019, we entered into a second securities purchase agreement with Atlas Sciences, LLC, pursuant to which the Company issued a promissory note (the "Note II") to the Lender. The Note II has an original principal amount of $1,670,000, bears interest at a rate of 10% per annum and will mature 12 months after the issuance, unless earlier paid or redeemed in accordance with its terms. We received proceeds of $1,500,000 after an original issue discount of $150,000 and payment of Lender's expenses of $20,000.

On January 27, 2020, we entered into an exchange agreement (the "First Exchange Agreement") with the Lender, pursuant to which we and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 (the "Partitioned Promissory Note) from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for the issuance of 160,256 shares of the Company's common stock, par value $0.001 per share, to the Lender.

On February 20, 2020, we entered into another exchange agreement (the "Second Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 (the "Partitioned Promissory Note") from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for the issuance of 207,641 shares of the Company's common stock, par value $0.001 per share, to the Lender.

On April 28, 2020, we entered into a third exchange agreement (the "Third Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 (the "Partitioned Promissory Note") from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for the issuance of 312,500 shares of the Company's common stock, par value $0.001 per share, to the Lender.

On June 8, 2020, we entered into a fourth exchange agreement (the "Fourth Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 271,739 shares of the Company's common stock, par value $0.001 per share to the Lender.

On June 10, 2020, we entered into a fifth exchange agreement (the "Fifth Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $150,000 from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 407,609 shares of the Company's common stock, par value $0.001 per share to the Lender.

On July 6, 2020, we entered into a sixth exchange agreement (the "Sixth Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $250,000 from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 461,595 shares of the Company's common stock, par value $0.001 per share to the Lender.

On July 8, 2020, we entered into certain exchange agreement with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $250,000 from the outstanding balance of certain promissory note that the Company issued to the Lender on December 30, 2019, which has an original principal amount of $1,670,000, and (ii) exchange the partitioned promissory note for the issuance of 453,161 shares of the Company's common stock, par value $0.001 per share to the Lender.

On July 29, 2020, we entered into a seventh exchange agreement (the "Seventh Exchange Agreement") with the Lender, pursuant to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $365,000 from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 576,802 shares of the Company's common stock, par value $0.001 per share to the Lender.

On October 12, 2020, we entered into an amendment to promissory notes (the "Amendment") with the Lender, pursuant to which the Lender has the right at any time until the outstanding balance of the notes has been paid in full, at its election, to convert all or any portion of the outstanding balance of the notes into shares of common stock of the Company. The conversion price for each conversion will be calculated pursuant to the following formula: 80% multiplied by the lowest closing price of the Company common stock during the ten (10) trading days immediately preceding the applicable conversion. Notwithstanding the foregoing, in no event will the conversion price be less than $1.00.

According to the Amendment, on October 13, 2020, we exchanged part of the outstanding balances of the notes for the issuance of 709,329 shares of the Company's common stock, par value $0.001 per share to the Lender.

On October 20, 2020, the Company exchanged the remaining balance of $778,252 under the notes for the issuance of 329,768 shares of common stock, par value $0.001 per share to the Lender.

On November 5, 2020, Tillicum Investment Company Limited entered into an agreement with CBAK Nanjing and Shenzhen ESTAR Industrial Company Limited (the Company's equipment supplier) whereby Shenzhen ESTAR Industrial Company Limited assigned its rights to the unpaid equipment cost owed by CBAK Power of approximately $$11.17 million (RMB75,000,000) (the "Seventh Debt") to Tillicum Investment Company Limited.

On November 11, 2020, we entered into a cancellation agreement with Tillicum Investment Company Limited. Pursuant to the terms of the cancellation agreement, Tillicum Investment Company Limited agreed to cancel the Seventh Debt in exchange for 3,192,291 shares of common stock of the Company, at an exchange price of $3.5 per share. Upon receipt of the shares, the creditor released the Company from any claims, demands and other obligations relating to the Seventh Debt.

On December 8, 2020, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we issued in a registered direct offering, an aggregate of 9,489,800 shares of common stock of the Company at a per share purchase price of $5.18, and warrants to purchase an aggregate of 3,795,920 shares of common stock of the Company at an exercise price of $6.46 per share exercisable for 36 months from the date of issuance (collectively, the "2020 Warrants"), for gross proceeds of approximately $49.16 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

On February 8, 2021, we entered into another securities purchase agreement with the same investors, pursuant to which we issued in a registered direct offering, an aggregate of 8,939,976 shares of common stock of the Company at a per share purchase price of $7.83. In addition, we issued to the investors (i) in a concurrent private placement, the Series A-1 warrants to purchase a total of 4,469,988 shares of common stock, at a per share exercise price of $7.67 and exercisable for 42 months from the date of issuance; (ii) in the registered direct offering, the Series B warrants to purchase a total of 4,469,988 shares of common stock, at a per share exercise price of $7.83 and exercisable for 90 days from the date of issuance; and (iii) in the registered direct offering, the Series A-2 warrants to purchase up to 2,234,992 shares of common stock, at a per share exercise price of $7.67 and exercisable for 45 months from the date of issuance. We received gross proceeds of approximately $70 million from the registered direct offering and the concurrent private placement, before deducting fees to the placement agent and other offering expenses payable by the Company.

On May 10, 2021, we 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, we had not received any notices from investors to exercise the Series B warrants, which, along with the Series A-2 warrants, had expired. As of December 31, 2025, all of the warrants expired.

We currently are expanding our product lines and manufacturing capacity in our Dalian, Nanjing and Zhejiang facilities, which require more 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)

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,**<br>**2024** | **December 31,**<br>**2025** |
| Net cash provided by operating activities | $39704 | $48554 |
| Net cash used in investing activities | (23432) | (45715) |
| Net cash provided by (used in) financing activities | (11686) | 8004 |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | (2623) | 4047 |
| Net increase in cash and cash equivalents and restricted cash | 1963 | 14891 |
| Cash and cash equivalents and restricted cash at the beginning of the year | 58823 | 60786 |
| Cash and cash equivalents and restricted cash at the end of the year | $60786 | $75677 |

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***Operating Activities***

Net cash provided by operating activities was $48.6 million for the year ended December 31, 2025. The net cash provided by operating activities was mainly attributable to our net income of $4.4 million (before loss on disposal of property, plant and equipment, share of income of equity investee, gain on disposal of equity investee and excluding non-cash depreciation and amortization, write-down of inventories, share-based compensation, changes in expected credit losses and changes in fair value of financial derivatives), increase of our trade and bills payable by $63.7 million, an increase of accrued expenses and other payables and product warranty provision of $11.0 million, decrease of prepayment and other receivables by $5.4 million offset by increase of trade and bills receivable of $2.8 million, increase of inventories of $33.9 million.

Net cash provided by operating activities was $39.7 million for the year ended December 31, 2024. The net cash provided by operating activities was mainly attributable to our net income of $23.4 million (before loss on disposal of property, plant and equipment, impairment charge of long-lived assets, share of loss of equity investee, gain on disposal of equity investee and excluding non-cash depreciation and amortization, write-down of inventories, share-based compensation and changes in expected credit losses), increase of our trade and bills payable by $4.6 million, an increase of accrued expenses and other payables and product warranty provision of $23.7 million, decrease of inventories by $6.3 million offset by increase of trade and bills receivable of $5.4 million, increase of prepayment and other receivables of $12.4 million.

***Investing Activities***

Net cash used in investing activities was $45.7 million in the fiscal year ended December 31, 2025. The net cash used in investing activities comprised the purchases of property, plant and equipment, construction in progress and land use right $45.8 million and $2.9 million on cash paid for acquiring equity interest of Hitrans without change of control offset by $2.8 million received from PRC government for funding our capital expenditure.

Net cash used in investing activities was $23.4 million in the fiscal year ended December 31, 2024. The net cash used in investing activities comprised the purchases of property, plant and equipment and construction in progress $17.2 million and $9.1 million on deposit paid for acquisition of long-term investments offset by $2.3 million received from PRC government for funding our capital expenditure.

***Financing Activities***

Net cash provided by financing activities was $8.0 million for the fiscal year ended December 31, 2025. The net cash provided by financing activities was mainly attributable to $51.2 million bank borrowings, $43.4 million from the maturity of the term deposits offset by $45.8 million repayment of bank borrowings, $39.2 million placements of term deposits and $1.5 million used for repurchase of common stock.

Net cash used in financing activities was $11.7 million in the fiscal year ended December 31, 2024. The net cash used in financing activities was mainly comprised of repayment of bank borrowings of $52.1 million, $2.8 million repayment on finance lease and $4.3 million net movement from the placement of term deposit offset by $46.4 million bank borrowings and $1.1 million from finance lease.

As of December 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)

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| | | |
|:---|:---|:---|
|  | ***Maximum amount available*** | ***Amount borrowed*** |
| **Long-term credit facilities:** | | |
| Zhejiang Shangyu Rural Commercial | $10911 | $5543 |
| **Short-term credit facilities:** |  |  |
| China Construction Bank Co., Ltd Dalian Zhuanghe Branch | 2561 | 1425 |
| Jiangsu Gaochun Rural Commercial Bank | 4275 | 427 |
| Bank of China Gaochun Branch | 1425 | 1425 |
| Bank of Communications Co., Ltd Shaoxing Branch | 22199 | 19555 |
| China Construction Bank Co., Ltd Shaoxing Branch | 2850 | 2850 |
| Industrial Bank Co., Ltd Shaoxing Shangyu Branch | 1425 | 1425 |
|  | 34735 | 27107 |
| **Other lines of credit:** |  |  |
| China Construction Bank Co., Ltd Dalian Zhuanghe Branch | 8551 | 8551 |
| Industrial and Commercial Bank of China Co., Ltd. Dalian Zhuanghe Branch | 7515 | 7515 |
| China Guangfa Bank Co., Ltd. Dalian Ganjingzi Branch | 19269 | 17569 |
| Bank of Nanjing Gaochun Branch | 11018 | 11018 |
| China Zheshang Bank Co., Ltd Shenyang Branch | 15088 | 15088 |
| Agricultural Bank of China Nanjing Gaochun Branch | 3968 | 3968 |
| Bank of Ningbo Co., Ltd | 2201 | 2201 |
| Industrial Bank Co., Ltd. Shaoxing Branch | 2281 | 2281 |
| Bank of Communications Co., Ltd Shaoxing Branch | 4715 | 4715 |
| China Zheshang Bank Co., Ltd Shangyu Branch | 14085 | 14085 |
| Bank of Ningbo Co., Ltd | 1425 | 1425 |
| Zhejiang Shangyu Rural Commercial Bank | 4885 | 4885 |
|  | 95001 | 93301 |
| Total | $140647 | $125951 |

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***Capital Expenditures***

We incurred capital expenditures of $17.2 million and $45.8 million in the fiscal years ended December 31, 2024 and 2025, respectively. Our capital expenditures in 2025 were primarily allocated to the construction of our Dalian, Nanjing, Zhejiang and Anhui facilities. The table below sets forth the breakdown of our capital expenditures by use for the periods indicated.

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

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,**<br>**2024** | **December 31,**<br>**2025** |
| Purchase of property, plant and equipment and construction in progress | $17187 | $44652 |

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We estimate that our total capital expenditures in fiscal year 2026 will reach approximately $50 million. Such funds will be used to construct new plants with new production lines and battery module packing lines.

**Critical Accounting Policies and Estimates**

Our 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.

When reviewing our financial statements, the following should also be considered: (1) our selection of critical accounting policies, (2) the judgment and other uncertainties affecting the application of those policies, and (3) the sensitivity of reported results to changes in conditions and assumptions. We believe the following accounting policies involve the most significant judgment and estimates used in the preparation of our financial statements.

We consider the following to be the most critical accounting policies:

*Revenue Recognition*

We recognize revenues when our 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. We recognize 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 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 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 our customer.

*Impairment of Long-lived Assets*

Long-lived assets, which include property, plant and equipment, prepaid land use rights, leased assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

*Trade and Bills Receivable and current expected credit losses*

Trade and bills receivable are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing trade accounts receivable.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables and net investments in leases. The Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company has identified the relevant risk characteristics of trade receivables and other current assets which include size, type of the services or the products the Company provides, or a combination of these characteristics, the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit quality of the Company's receivables. This is assessed at each quarter based on the Company's specific facts and circumstances. All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Company's control. Additionally, external data and macroeconomic factors are also considered.

The Company provides an allowance against trade receivable based on the expected credit loss approach and writes off trade receivables when they are deemed uncollectible. The Company considers the historical credit loss experience, customer specific facts and economic conditions in assessing the expected credit losses. Other key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact the Company's receivables. Additionally, external data and macroeconomic factors are also considered. This is assessed at each quarter based on the Company's specific facts and circumstances.

Outstanding trade receivable balances are reviewed individually for collectability. Trade receivable balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

*Inventories*

Inventories are stated at the lower of cost or net realizable value. The cost of inventories is determined using the weighted average cost method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In case of finished goods and work in progress, cost includes an appropriate share of production overhead based on normal operating capacity. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

We record adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference between the cost of the inventory and the estimated net realizable value. At the point of loss recognition, a new cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

*Warranties*

We provide a manufacturer's warranty on all our products. We accrue a warranty reserve for the products sold, which includes our best estimate of the projected costs to repair or replace items under warranty. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given our relatively short history of sales of our current products, and changes to our historical or projected warranty experience may cause material changes to the warranty reserve in the future. The portion of the warranty reserve expected to be incurred within the next 12 months is included within accrued liabilities and other while the remaining balance is included within other long-term liabilities on the consolidated balance sheets.

*Government Grants*

Our subsidiaries in China receive government subsidies from local Chinese government agencies in accordance with relevant Chinese government policies. In general, we present the government subsidies received as part of income unless the subsidies received are earmarked to compensate a specific expense, which have been accounted for by offsetting the specific expense, such as research and development expense, interest expenses, depreciation and removal costs. Unearned government subsidies received are deferred for recognition until the criteria for such recognition could be met.

Grants applicable to long-lived assets are amortized over the life of the depreciable facilities constructed on it. For research and development expenses, we match and offset the government grants with the expenses of the research and development activities as specified in the grant approval document in the corresponding period when such expenses are incurred.

*Share-based Compensation*

We adopted the provisions of ASC Topic 718 which requires us to measure and recognize compensation expenses for an award of an equity instrument based on the grant-date fair value. The cost is recognized over the vesting period (or the requisite service period). ASC Topic 718 also requires us to measure the cost of a liability classified award based on its current fair value. The fair value of the award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period are recognized as compensation cost over that period. Further, ASC Topic 718 requires us to estimate forfeitures in calculating the expense related to stock-based compensation.

The fair value of each option award is estimated on the date of grant using the Black-Scholes Option Valuation Model. The expected volatility was based on the historical volatilities of our listed common stocks in the United States and other relevant market information. We use historical data to estimate share option exercises and employee departure behavior used in the valuation model. The expected terms of share options granted is derived from the output of the option pricing model and represents the period of time that share options granted are expected to be outstanding. Since the share options once exercised will primarily trade in the U.S. capital market, the risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect at the time of grant.

**Changes in Accounting Standards**

Please refer to note 2 to our consolidated financial statements, "Summary of Significant Accounting Policies and Practices–Recently Adopted Accounting Standards," for a discussion of relevant pronouncements.

**Exchange Rates**

The financial records of our PRC subsidiaries are maintained in RMB. In order to prepare our financial statements, we have translated RMB amounts into U.S. dollars. The amounts of our assets and liabilities on our balance sheets are translated using the closing exchange rate as of the date of the balance sheet. Revenues, expenses, gains and losses are translated using the average exchange rate prevailing during the period covered by such financial statements. Adjustments resulting from the translation, if any, are included in our cumulative other comprehensive income in our stockholders' equity section of our balance sheet. All other amounts that were originally booked in RMB and translated into U.S. dollars were translated using the closing exchange rate on the date of recognition. Consequently, the exchange rates at which the amounts in those comparisons were computed varied from year to year.

The exchange rates used to translate amounts in RMB into U.S. dollars in connection with the preparation of our financial statements were as follows:

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| | | |
|:---|:---|:---|
|  | **RMB per U.S. Dollar** | **RMB per U.S. Dollar** |
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **December 31,**<br>**2024** | **December 31,**<br>**2025** |
| Balance sheet items, except for equity accounts | 7.2994 | 7.0169 |
| Amounts included in the statement of income and comprehensive loss and statement of cash flows | 7.1913 | 7.1883 |

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**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Not applicable.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA** 

**FINANCIAL STATEMENTS**

**CBAK ENERGY TECHNOLOGY, INC. AND SUBSIDIARIES**

**CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED**

**DECEMBER 31, 2024 AND 2025**

**CBAK ENERGY TECHNOLOGY, INC.**

**AND SUBSIDIARIES**

**<u>**TABLE OF CONTENTS**</u>**

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| | |
|:---|:---|
| **Contents** | **Page(s)** |
| [Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 3299)](#ab_032) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2024 and 2025](#ab_027) | F-8 |
| [Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2024 and 2025](#ab_028) | F-9 |
| [Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2024 and 2025](#ab_029) | F-10 |
| [Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2025](#ab_030) | F-11 |
| [Notes to the Consolidated Financial Statements](#ab_031) | F-12 |

---

![](ea028334901_img5.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and the Board of Directors of CBAK Energy Technology, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of CBAK Energy Technology, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2025, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2025, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 31, 2026, expressed an adverse opinion on the Company's internal control over financial reporting because of material weaknesses.

**Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of December 31, 2025. All these factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1 to the consolidated financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](ea028334901_img6.jpg)

***<u>亞泰匯才會計師事務所</u>***

*ARK Pro CPA & Co*

 

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

*Going concern*

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of December 31, 2025. The Company has contractual obligations such as commitments for purchases of equipment, building constructions cost, payable, capital injection to subsidiaries and short-term loan (collectively "obligations"). Currently management's forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures and, if necessary, obtaining additional debt financing, loans from existing directors and shareholders and private placements of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to access such financing, the Company can manage cash outflows to meet the obligations through reductions in capital expenditures and other operating expenditures.

We identified management's assessment of the Company's ability to continue as a going concern as a critical audit matter. Management made judgments to conclude that it is probable that the Company's plans will be effectively implemented and will provide the necessary cash flows to fund the Company's obligations as they become due. Specifically, the judgments with the highest degree of impact and subjectivity in determining it is probable that the Company's plans will be effectively implemented included the revenue growth and gross margin assumptions underlying its forecast operating cash flows, its ability to reduce capital expenditures and other operating expenditures, its ability to access funding from the capital market and its ability to obtaining loans from existing directors and shareholders. Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following, among others: (i) testing the effectiveness of controls relating to management's assessment of the Company's ability to continue as a going concern, including controls relating to evaluate the appropriateness of management's process for developing the estimates of forecast operating cash flows; (ii) testing key assumptions underlying management's forecast operating cash flows, including revenue growth, gross margin and operating expenses assumptions; (iii) evaluating the probability that the Company will be able to access funding from the capital market; (iv) evaluating the probability that the Company will be able to reduce capital expenditures and other operating expenditures if required; and (v) evaluating the probability that the Company will be able to obtain the loans from existing directors and shareholders.

***<u>亞泰匯才會計師事務所</u>***

*ARK Pro CPA & Co*

 

*Inventory write-down*

 

As described in Note 6 of the consolidated financial statements, inventories are stated at the lower of cost or net realizable value, with cost determined on a weighted average cost method. Write-down of potential obsolete or slow- moving inventories is recorded based on management's assumptions about future demands and market conditions. For the year ended December 31, 2025, the Company recorded inventory write-downs of $6.6 million. Inventories include items that have been written down to the Company's best estimate of their realizable value, which includes consideration of various factors.

We identified the inventory write-down as a critical audit matter. The Company's determination of future markdowns is subjective. Specifically, there was a high degree of subjective auditor judgment in evaluating how the Company's merchandising strategy and related inventory markdown assumptions affected the realizable value of inventory.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following, among others: (i) testing the effectiveness of controls relating to management's assessment on inventory write-down process, including controls relating to evaluate the appropriateness of management's process for developing the estimates of net realizable value; (ii) observing the physical condition of inventories during inventory counts; (iii) testing the reasonableness of the assumptions about quality, damages, future demand, selling prices and market conditions by considering with historical trends and consistency with evidence obtained in other areas of the audit; and corroborating the assumptions with individuals within the product team; and (iv) assessing the Company's adjustments of inventory costs to net realizable value for slow-moving and obsolete inventories by (1) comparing the historical estimate for net realizable value adjustments to actual adjustments of inventory costs, and (2) analyzing sales subsequent to the measurement date.

*Assessment of impairment of long-lived assets*

As discussed in Note 2 (k), Note 8, 11 and 12 to the consolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of these assets may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is generally measured based on either quoted market price, if available, or discounted cash flow analyses. Based upon the analysis performed, no impairment for long-lived assets for the year ended December 31, 2025.

We identified the assessment of impairment of long-lived assets as a critical audit matter because of the significant estimates and assumptions management used in the projections of future cash flows, including the expected production and sales volumes, production costs, operating expenses and discount rates applied to these forecasted future cash flows. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort.

***<u>亞泰匯才會計師事務所</u>***

*ARK Pro CPA & Co*

 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following, among others: (i) testing the effectiveness of controls relating to management's impairment assessment of long-lived assets, including controls relating to fair value determination of the long-lived assets; (ii) evaluating the appropriateness of the valuation model, by reviewing the valuation report and the calculation schedules prepared by the management and third party valuation specialists engaged by the Company (iii) comparing the methodology used by the Company to industry practice and testing the completeness and accuracy of the underlying data used in the projections; (iv) assessing the reasonableness of the significant assumptions used in the calculations, which comprised of, amongst others, expected production and sales volumes, production costs, operating expenses and discount rates, by comparing them to external industry outlook reports from a number of sources and by analyzing the historical accuracy of management's estimates; (v) evaluating the competence, capabilities and objectivity of the professionals engaged by the Company; and (vi) involving our valuation specialists to assist us with assessing the appropriateness of the valuation methodologies and the reasonableness of assumptions used, including the discount rates.

 

*Assessment of allowance for current expected credit losses ("CECL")*

As discussed in Note 2 (e), Note 5 and 7, the Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company has identified the relevant risk characteristics of trade receivables and other current assets which include size, type of the services or the products the Company provides, or a combination of these characteristics, the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit quality of the Company's receivables. This is assessed at each quarter based on the Company's specific facts and circumstances. All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Company's control. Additionally, external data and macroeconomic factors are also considered. As of December 31, 2025, the expected credit loss provision recorded in current assets was $1.1 million.

We identified the assessment of allowances for CECL as a critical audit matter due to the involvement of subjective judgment and management estimates in evaluating the CECL of the current asset items, and the significance to the Company's consolidated financial position.

 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following, among others: (i) testing the effectiveness of controls relating to the assessment of allowances for CECL and assessing management's method for developing the allowance for doubtful accounts (credit losses); (ii) evaluating the appropriateness of the valuation model, by reviewing the valuation report and the calculation schedules prepared by the management and third party valuation specialists engaged by the Company; (iii) testing the accuracy of management's basic input in calculating CECL including aging report, historical write-offs and recoveries, on a sample basis; (iv) engaging independent valuation specialist with specialized skills and knowledge, to evaluate the reasonableness of significant assumptions and judgments made by management to estimate the allowance for credit loss, including the Company's assessment on significant factors, and the basis of estimated loss rates applied with reference to historical default rates and forward-looking information; (v) sending confirmations to debtors to confirm the accuracy of the basic information and other receivable accounts; (vi) evaluating subsequent collections occurring after the balance sheet date; and (vii) evaluating the competence, capabilities and objectivity of the professionals engaged by the Company.

/s/ ARK Pro CPA & Co

ARK Pro CPA & Co

We have served as the Company's auditor since 2023.

Hong Kong, China

March 31, 2026

PCAOB ID: 3299

![](ea028334901_img3.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and the Board of Directors of CBAK Energy Technology, Inc.

**Opinion on Internal Control over Financial Reporting**

We have audited CBAK Energy Technology, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, CBAK Energy Technology, Inc. and subsidiaries (the "Company") has not maintained effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management's assessment:

The Company did not have appropriate policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements, and there was insufficient accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States of America, or U.S. GAAP, commensurate with the financial reporting requirements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2025, the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes. These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report dated March 31, 2026, which expressed an unqualified opinion thereon.

**Basis for Opinion**

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

![](ea028334901_img4.jpg)

***<u>亞泰匯才會計師事務所</u>***

*ARK Pro CPA & Co*

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control over Financial Reporting**

A Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ARK Pro CPA & Co

ARK Pro CPA & Co

We have served as the Company's auditor since 2023.

Hong Kong, China

March 31, 2026

PCAOB ID: 3299

**CBAK Energy Technology, Inc. and Subsidiaries**

**Consolidated Balance Sheets**

**As of December 31, 2024 and 2025**

(In US$ except for number of shares)

---

| | | | |
|:---|:---|:---|:---|
|  | ***Note*** | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| **Assets** | | | |
| *Current assets* |  |  |  |
| Cash and cash equivalents |  | $6724360 | $8301149 |
| Pledged deposits | 3 | 54061642 | 67376113 |
| Term deposits | 4 | 4237090 | - |
| Trade and bills receivable, net | 5 | 32938918 | 38405398 |
| Inventories | 6 | 22851027 | 50602287 |
| Prepayments and other receivables | 7 | 20004966 | 15170915 |
| Receivables from former subsidiary | 18 | 12399 | 4389 |
| Income tax recoverable |  | 566458 | 778460 |
| Total current assets |  | 141396860 | 180638711 |
| Property, plant and equipment, net | 8 | 85486829 | 179058801 |
| Construction in progress | 9 | 42526859 | 32046421 |
| Long-term investments, net | 10 | 2246494 | 2485580 |
| Prepaid land use rights | 11 | 11075973 | 12308864 |
| Intangible assets, net | 12 | 382962 | 71654 |
| Deposit paid for acquisition of long-term investments | 14 | 15864318 | 16503014 |
| Operating lease right-of-use assets, net | 11 | 3237849 | 3068591 |
| Total assets |  | $302218144 | $426181636 |
| **Liabilities** |  |  |  |
| *Current liabilities* |  |  |  |
| Trade and bills payable | 15 | $84724386 | $153345745 |
| Short-term bank borrowings | 16 | 26087350 | 28532938 |
| Other short-term loans | 16 | 335715 | 337156 |
| Accrued expenses and other payables | 17 | 58285635 | 113651948 |
| Payable to a former subsidiary, net | 18 | 419849 | 407506 |
| Deferred government grants, current | 19 | 556214 | 578606 |
| Product warranty provisions | 20 | 23426 | 339136 |
| Operating lease liability, current | 11 | 1268405 | 1347803 |
| Finance lease liability, current | 11 | - | 1307170 |
| Total current liabilities |  | 171700980 | 299848008 |
| Long-term bank borrowings | 16 | - | 4118628 |
| Deferred government grants, non-current | 19 | 7580255 | 10195428 |
| Product warranty provisions | 20 | 420688 | 446553 |
| Operating lease liability, non-current | 11 | 2449056 | 2093428 |
| Total liabilities |  | 182150979 | 316702045 |
| **Commitments and contingencies** | 28 |  |  |
| **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; 88,645,836 issued and outstanding as of December 31, 2025 |  | 90083 | 88646 |
| Donated shares |  | 14101689 | 7955358 |
| Additional paid-in capital |  | 247842445 | 248500176 |
| Statutory reserves | 23 | 1230511 | 3042602 |
| Accumulated deficit |  | (122605730) | (133795940) |
| Accumulated other comprehensive loss |  | (14919345) | (13112769) |
|  |  | 125739653 | 112678073 |
| Less: Treasury shares |  | (4066610) | - |
| Total shareholders' equity |  | 121673043 | 112678073 |
| Non-controlling interests |  | (1605878) | (3198482) |
| Total equity |  | 120067165 | 109479591 |
| Total liabilities and shareholder's equity |  | $302218144 | $426181636 |

---

See accompanying notes to the consolidated financial statements.

**CBAK Energy Technology, Inc. and Subsidiaries**

**Consolidated Statements of Operations and Comprehensive Income (Loss)**

**For the years ended December 31, 2024 and 2025**

(In US$ except for number of shares)

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| | | | |
|:---|:---|:---|:---|
|  | |  ***Year ended*** | ***Year ended*** |
|  |<br>***Note*** | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Net revenues | 30 | $176614609 | $195189306 |
| Cost of revenues |  | (134839364) | (176766718) |
| Gross profit |  | 41775245 | 18422588 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development expenses |  | (13010082) | (15801613) |
| &nbsp;&nbsp;&nbsp;Sales and marketing expenses |  | (5197888) | (5076891) |
| &nbsp;&nbsp;&nbsp;General and administrative expenses |  | (13947727) | (16195504) |
| &nbsp;&nbsp;&nbsp;Impairment charge on long-lived assets |  | (475220) |  |
| &nbsp;&nbsp;&nbsp;Allowance of credit losses and bad debts written off |  | (356179) | 210177 |
| &nbsp;&nbsp;&nbsp;Total operating expenses |  | (32987096) | (36863831) |
| Operating income (loss) |  | 8788149 | (18441243) |
| Finance income (expenses), net |  | 1283090 | (673344) |
| Other income, net |  | 1045552 | 8272923 |
| Share of (loss) income of equity investee |  | (18777) | 145097 |
| Gain on disposal on equity investee |  | 45749 |  |
| Loss on derivatives instruments |  | - | (440054) |
| Income (loss) before income tax |  | 11143763 | (11136621) |
| Income tax expenses | 22 | (1558613) | 184686 |
| Net income (loss) |  | 9585150 | (10951935) |
| Less: Net loss attributable to non-controlling interests |  | 2204882 | 1573816 |
| &nbsp;&nbsp;&nbsp;Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. |  | $11790032 | $(9378119) |
| Net income (loss) |  | 9585150 | (10951935) |
| Other comprehensive loss |  |  |  |
| &nbsp;&nbsp;&nbsp;– Foreign currency translation adjustment |  | (3352974) | 1787788 |
| Comprehensive income (loss) |  | 6232176 | (9164147) |
| &nbsp;&nbsp;&nbsp;Less: Comprehensive loss attributable to non-controlling interests |  | 2239914 | 1592604 |
| &nbsp;&nbsp;&nbsp;Comprehensive income (loss) attributable to CBAK Energy Technology, Inc. |  | $8472090 | $(7571543) |
| Income (loss) per share | 27 |  |  |
| &nbsp;&nbsp;&nbsp;– Basic |  | $0.13 | $(0.10) |
| &nbsp;&nbsp;&nbsp;– Diluted |  | $0.13 | $(0.10) |
| Weighted average number of shares of common stock: | 27 |  |  |
| &nbsp;&nbsp;&nbsp;– Basic |  | 89928357 | 89247119 |
| &nbsp;&nbsp;&nbsp;– Diluted |  | 90158312 | 89247119 |

---

See accompanying notes to the consolidated financial statements.

**CBAK Energy Technology, Inc. and Subsidiaries**

**Consolidated Statements of Changes in Shareholders' Equity**

**For the years ended 2024 and 2025**

(In US$ except for number of shares)

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | ***Common stock issued*** | ***Common stock issued*** | | ***Additional*** | ***Statutory*** | | ***Accumulated other*** | ***Non-*** | ***Treasury shares*** | ***Treasury shares*** | ***Total*** |
|  | ***Number*** | | | | | | | | ***Number*** | | |
|  | ***of shares*** |<br>***Amount*** |<br>***Donated***<br>***shares*** | ***paid-in***<br>***capital*** | ***reserves***<br>***(Note 23)*** |<br>***Accumulated***<br>***deficit*** | ***comprehensive***<br>***Income (loss)*** | ***controlling***<br>***interests*** | ***of shares*** |<br>***Amount*** | ***shareholders'***<br>***equity*** |
| **Balance as of January 1, 2024** | **900063396** | $**90063** | $**14101689** | $**247465817** | $**1230511** | $**(134395762)** | $**(11601403)** | $**634036** | **(144206)** | $**(4066610)** | $**113458341** |
| Net income (loss) |  |  |  |  |  | 11790032 |  | (2204882) |  |  | 9585150 |
| Share-based compensation for employee and director stock awards |  |  |  | 376648 |  |  |  |  |  |  | 376648 |
| Common stock issued to employees and directors for stock award | 20000 | 20 |  | (20) |  |  |  |  |  |  |  |
| Foreign currency translation adjustment | - | - | - | - | - | - | (3317942) | (35032) |  |  | (3352974) |
| **Balance as of December 31, 2024** | **90083396** | $**90083** | $**14101689** | $**247842445** | $**1230511** | $**(122605730)** | $**(14919345)** | $**(1605878)** | **(144206)** | $**(4066610)** | $**120067165** |
| Net loss |  |  |  |  |  | (9378119) |  | (1573816) |  |  | (10951935) |
| Exercise of stock option | 19896 | 20 |  | 20 |  |  |  |  |  |  |  |
| Share-based compensation for employee and director stock awards |  |  |  | 76804 |  |  |  |  |  |  | 76804 |
| Repurchase of common stock | (1457456) | (1457) | (6146331) | 580947 |  |  |  |  | 144206 | 4066610 | 1500231 |
| Appropriation to statutory reserves |  |  |  |  | 1812091 | (1812091) |  |  |  |  |  |
| Foreign currency translation adjustment | - | - | - | - | - | - | 1806576 | (18788) | - | - | 1787788 |
| **Balance as of December 31, 2025** | 88645836 | $88646 | $7955358 | $248500176 | $3042602 | $(133795940) | $(13112769) | $(3198482) | **-** | $**-** | $109479591 |

---

See accompanying notes to the consolidated financial statements.

**CBAK Energy Technology, Inc. and subsidiaries** 

**Consolidated statements of cash flows**

**For the years ended December 31, 2024 and 2025**

(In US$)

---

| | | |
|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** |
|  | ***December 31,<br> 2024*** | ***December 31, <br> 2025*** |
| **Cash flows from operating activities** | | |
| Net income (loss) | $9585150 | (10951935) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| Depreciation and amortization | 7954793 | 9503305 |
| Allowance for expected credit losses | (264181) | (210177) |
| Write-down of inventories | 4927140 | 6607039 |
| Share-based compensation | 376648 | 76804 |
| Loss on disposal of property, plant and equipment | 428308 | 53434 |
| Impairment charge on long-lived assets | 475220 | - |
| Change in fair value of derivatives instruments | - | 200068 |
| Share of loss (income) of an equity investee | 18777 | (145097) |
| Gain on disposal of an equity investee | (45749) | - |
| Amortization of operating lease right-of-use assets | 1215995 | 1072492 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Trade and bills receivable | (5376670) | (3899151) |
| &nbsp;&nbsp;&nbsp;Inventories | 6295598 | (33886698) |
| &nbsp;&nbsp;&nbsp;Prepayments and other receivables | (12462243) | 5402245 |
| &nbsp;&nbsp;&nbsp;Trade and bills payable | 4648150 | 63655464 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other payables and product warranty provisions | 23749383 | 11055969 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | (2433194) | 197097 |
| &nbsp;&nbsp;&nbsp;Trade receivable from and payables to a former subsidiary | 61379 | 8305 |
| &nbsp;&nbsp;&nbsp;Income tax recoverable | 549956 | (184685) |
| &nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 39704460 | 48554479 |
| **Cash flows from investing activities** |  |  |
| Deposit paid for acquisition of long-term investment | (9094322) | - |
| Purchases of property, plant and equipment and construction in progress | (17186872) | (44652643) |
| Proceeds on disposal of property, plant and equipment | 215320 | 149201 |
| Cash paid for acquiring equity interest of a subsidiary without change of control |  | (2931471) |
| Proceeds from disposal of an equity method investee | 278114 | - |
| Government subsidy | 2355555 | 2819721 |
| Acquisition of land use right | - | (1099537) |
| Net cash used in investing activities | (23432205) | (45714729) |
| **Cash flows from financing activities** |  |  |
| Proceeds from bank borrowings | 46395506 | 51177399 |
| Repayment of bank borrowings | (52076815) | (45794934) |
| Repayment of borrowings from shareholders | (2781) | - |
| Proceeds from finance leases | 1112455 | - |
| Principal payments on finance leases | (2814095) | (116857) |
| Repurchase of common stock | - | (1500231) |
| Placement of term deposits | (39525810) | (39200279) |
| Withdrawal of term deposits | 35225027 | 43439398 |
| Net cash (used in) provided by financing activities | (11686513) | 8004496 |
| **Effect of exchange rate changes on cash and cash equivalents and restricted cash** | (2622556) | 4047014 |
| **Net increase in cash and cash equivalents and restricted cash** | 1963186 | 14891260 |
| **Cash and cash equivalents and restricted cash at the beginning of year** | 58822816 | 60786002 |
| **Cash and cash equivalents and restricted cash at the end of year** | $60786002 | $75677262 |
| Supplemental non-cash investing and financing activities: |  |  |
| Transfer of construction in progress to property, plant and equipment | $5328646 | $96184653 |
| Lease liabilities arising from obtaining right-of-use assets | $3538732 | $809777 |
| Cash paid during the year for: |  |  |
| Income taxes | $2189247 | $- |
| Interest, net of amounts capitalized | $408028 | $871632 |

---

See accompanying notes to the consolidated financial statements.

**CBAK Energy Technology, Inc. and subsidiaries**

**Notes to the consolidated financial statements**

**For the years ended December 31, 2024 and 2025**

(In US$ except for number of shares)

**1.** **Principal Activities, Basis of Presentation and Organization** 

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 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 ("SZ BAK"), entered into a share swap transaction with the shareholders of SZ BAK for the purpose of the subsequent reverse acquisition of the Company. The share swap transaction between BAK International and the shareholders of SZ BAK was accounted for as a reverse acquisition of SZ BAK with no adjustment to the historical basis of the assets and liabilities of SZ 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 SZ BAK are consolidated using historical carrying amounts.

Also on January 20, 2005, immediately prior to consummating the share swap transaction, BAK International executed a private placement of its common stock with unrelated investors whereby it issued an aggregate of 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.

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 December 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"). The Company has contributed $2,435,000 to CBAK New Energy in cash as of December 31, 2025. 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. The Company has made full contribution 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 ("Nanjing BFD") 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 December 31, 2025 and under the dissolve process.

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$1.00. 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 million. 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. The Company has contributed $55,289,915 to CBAK Nanjing as of December 31, 2025. 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 million (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. The Company has contributed RMB352.5 million (approximately $51.0 million) to Nanjing CBAK as of December 31, 2025. 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 million (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 and dedicated batteries pack integration operations.

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 million) to acquire 9.74% of the equity interests of DJY. CBAK Power has appointed one director to the Board of Directors of DJY. DJY engaged in researching and manufacturing of raw materials and equipment.

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 Zhejiang 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 an 81.56% registered equity interests (representing 75.57% of paid-up capital) owned subsidiary of the Company.

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, 2024 and 2025, 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.

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 million (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. In November 2025, CBAK New Energy entered into an equity transfer agreement with New Era Group Zhejiang New Energy Materials Co., Ltd to acquire an additional 6.1364% equity interests in Hitrans for a total consideration of RMB21.1 million (approximately $2.9 million). Upon the completion of this transaction and as of December 31, 2025, CBAK New Energy's equity interests in Hitrans increased from 67.33% to 73.46% (representing 79.64% of paid-up capital).

On July 6, 2018, Guangdong Meidu Hitrans Resources Recycling Technology Co., Ltd. ("Guangdong Hitrans") was established as an 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. Hitrans has made full contribution to Haisheng through injection of a series of cash. 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.

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. CBAK Power has contributed RMB18.0 million ($2.6 million) to Shangqiu as of December 31, 2025. 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 million. 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. BAK Investments made nil contribution as of December 31, 2025.

On January 9, 2025, Anhui Yuanchuang New Energy Materials Co., Ltd. was established as a wholly owned subsidiary of Hitrans with a registered capital of RMB50 million (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. Hitrans has made full contribution to Yuanchuang as of December 31, 2025. Yuanchuang is designated to engage in the business of manufacturing and marketing of Nickel Cobalt Manganese ("NCM") cathode materials for application in NCM lithium-ion batteries.

On April 30, 2025, the Company established a subsidiary in Malaysia, CBAK ENERGY Lithium Battery Malaysia SDN. BHD. ("CBAK Malaysia"). CBAK Malaysia will focus on the manufacturing and sales of cylindrical lithium cells, targeting overseas markets outside of China. CBAK Malaysia does not have operations as of the date of this report.

CBAK Energy C.A. Inc. ("CBAK Energy California") was incorporated on November 17, 2025 under the laws of the State of California, the United States as a wholly owned subsidiary of CBAK Energy Technology, Inc. CBAK Energy California does not have any significant operations as of the date of this report.

The Company's 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 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.

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 December 31, 2025, all of the warrants were expired.

On May 20, 2025, the Company authorized a stock repurchase program (the "Stock Repurchase Program") under which the Company may repurchase up to $20 million of shares of its common stock. The Stock Repurchase Program will end on May 20, 2026. Repurchases under the Stock Repurchase Program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The Stock Repurchase Program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to the exact number of shares that will be repurchased by the Company. The Stock Repurchase Program may be suspended, modified or terminated by the Company at any time and for any reason, without prior notice. The Company completed the shares repurchase and the repurchased shares were retired on August 13, 2025. The total cost for the repurchase was $1.5 million, with an average share price of $1.14 per unit.

As of December 31, 2025, the Company had $32.7 million bank loans and approximately $271.3 million of other current liabilities.

The Company is currently expanding its product lines and manufacturing capacity in its Dalian, Nanjing, Zhejiang and Anhui plant which requires more funding to finance the expansion. The Company plans to raise additional funds through banks borrowings and equity financing in the future to meet its daily cash demands, if required.

*Outbreaks of viruses or other health epidemics and outbreaks*

 

The Company business has been and may continue to be adversely affected by the outbreak of a widespread health epidemic, such as COVID-19 avian flu or African swine flu. The Company's manufacturing facilities in Dalian, Nanjing and Shaoxing did not produce at full capacity when restrictive measures were in force during 2022, which negatively affected our operational and financial results. China began to modify its zero-COVID policy at the end of 2022, and most of the travel restrictions and quarantine requirements were lifted in December 2022.

The extent of the impact of the outbreaks of viruses or other health epidemics that will continue to have on the Company's business is highly uncertain and difficult to predict and quantify, as the actions that the Company, other businesses and governments may take to contain the spread of possible health epidemics and outbreak continue to evolve. Because of the significant uncertainties surrounding, the extent of the future business interruption and the related financial impact cannot be reasonably estimated at this time.

As of the date of issuance of the Company's 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 consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of December 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 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Summary of Significant Accounting Policies and Practices** 

&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Principles of Consolidations* 

 

The consolidated financial statements include the financial statements of the Company and its subsidiaries up to the date of disposal. All significant intercompany balances and transactions have been eliminated prior to consolidation.

&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Cash and Cash Equivalents* 

Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use, and have original maturities less than three months. The Company considers all highly liquid debt instruments, with initial terms of less than three months to be cash equivalents.

As of December 31, 2024 and 2025, cash held in accounts managed by online payment platforms such as Alipay amounted to $6,451 and $22,774 respectively, which have been classified as cash and cash equivalents in the consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Pledged deposit* 

 

Pledged deposit primarily represents bank deposits for bank notes amounted to $54.1 million and $67.4 million as of December 31, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Short-term deposit* 

 

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, 2025, substantially all of the Company's short-term deposits amounting to $4,237,090 and nil, respectively, had been placed in reputable financial institutions in the PRC.

 

&nbsp;&nbsp;&nbsp;&nbsp;*(e)* *Trade and Bills Receivable and current expected credit losses* 

Trade and bills receivable are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing trade accounts receivable.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables and net investments in leases. The Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company has identified the relevant risk characteristics of trade receivables and other current assets which include size, type of the services or the products the Company provides, or a combination of these characteristics, the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit quality of the Company's receivables. This is assessed at each quarter based on the Company's specific facts and circumstances. All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Company's control. Additionally, external data and macroeconomic factors are also considered.

The Company adopted this ASC 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. The Company provides an allowance against trade receivable based on the expected credit loss approach and writes off trade receivables when they are deemed uncollectible. The Company considers the historical credit loss experience, customer specific facts and economic conditions in assessing the expected credit losses. Other key factors that influence the expected credit loss analysis include customer geographical, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact the Company's receivables. Additionally, external data and macroeconomic factors are also considered. This is assessed at each quarter based on the Company's specific facts and circumstances.

Outstanding trade receivable balances are reviewed individually for collectability. Trade receivable balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

&nbsp;&nbsp;&nbsp;&nbsp;*(f)* *Inventories* 

Inventories are stated at the lower of cost or net realizable value. The cost of inventories is determined using the weighted average cost method, and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In case of finished goods and work in progress, the cost includes an appropriate share of production overhead based on normal operating capacity. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

The Company records adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference between the cost of the inventory and the estimated net realizable value. At the point of loss recognition, a new cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

&nbsp;&nbsp;&nbsp;&nbsp;*(g)* *Property, Plant and Equipment* 

Property, plant and equipment (except construction in progress) are stated at cost less accumulated depreciation and impairment charges. Depreciation is calculated based on the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the assets as follows:

---

| | |
|:---|:---|
| Buildings | 5 – 35 years |
| Machinery and equipment | 1 – 15 years |
| Leasehold improvement | Over the shorter of lease term of the estimated useful lives of the assets |
| Office equipment | 1 – 5 years |
| Motor vehicles | 5 – 12 years |

---

The cost and accumulated depreciation of property, plant and equipment sold are removed from the consolidated balance sheets and resulting gains or losses are recognized in the consolidated statements of operations and comprehensive income (loss).

Construction in progress mainly represents expenditures in respect of the Company's corporate campus, including offices, factories and staff dormitories, under construction. All direct costs relating to the acquisition or construction of the Company's corporate campus and equipment, including interest charges on borrowings, are capitalized as construction in progress. No depreciation is provided in respect of construction in progress.

A long-lived asset to be disposed of by abandonment continues to be classified as held and used until it is disposed of.

&nbsp;&nbsp;&nbsp;&nbsp;*(h)* *Lease* 

 

The Company accounts for leases in accordance with ASC 842, Leases ("ASC 842"), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Company elected not to apply the recognition requirements of ASC 842 to short-term leases. The Company also elected not to separate non-lease components from lease components, therefore, it will account for lease component and the non-lease components as a single lease component when there is only one vendor in the lease contract.

The Company determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset which the Company does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. Right of use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate ("IBR"), because the interest rate implicit in most of the Company's leases is not readily determinable. The IBR is a hypothetical rate based on the Company's understanding of what its credit rating would be to borrow and resulting interest the Company would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Company's lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;*(i)* *<u>Prepaid land use rights</u>* 

The land use rights are operating leases with lease terms vary from 36 to 50 years. Land use rights acquired are assessed in accordance with ASC 842 if they meet the definition of lease.

&nbsp;&nbsp;&nbsp;&nbsp;*(ii)* *<u>Operating lease</u>* 

The lease terms of operating leases vary from more than a year to five years. Operating leases are included in operating lease right of use assets, and the corresponding operating lease liabilities are included within current and non-current operating lease liabilities on the Company's consolidated balance sheets. As of December 31, 2024 and 2025, all of the Company's ROU assets were generated from leased assets in the PRC and Hong Kong.

&nbsp;&nbsp;&nbsp;&nbsp;*(iii)* *<u>Finance lease</u>* 

Finance leases are included in property, plant and equipment, net, current and non-current finance lease liabilities on the Company's consolidated balance sheets. As of December 31, 2024 and 2025, all of the Company's finance lease assets were generated from leased assets in the PRC.

&nbsp;&nbsp;&nbsp;&nbsp;*(i)* *Foreign Currency Transactions and Translation* 

The reporting currency of the Company is the United States dollar ("US dollar"). The financial records of the Company's PRC operating subsidiaries are maintained in their local currency, the Renminbi ("RMB"), which is the functional currency. The financial records of the Company's subsidiaries established in other countries are maintained in their local currencies. Assets and liabilities of the subsidiaries are translated into the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates, and income and expense items are translated using the average rate for the period. The translation adjustments are recorded in accumulated other comprehensive loss under shareholders' equity.

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the period are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of operations.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People's Bank of China (the "PBOC") or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:

---

| | |
|:---|:---|
| Year ended December 31, 2024 |  |
| Balance sheet, except for equity accounts | RMB 7.2994 to US$1.00 |
| Income statement and cash flows | RMB 7.1913 to US$1.00 |

---

---

| | |
|:---|:---|
| Year ended December 31, 2025 |  |
| Balance sheet, except for equity accounts | RMB 7.0169 to US$1.00 |
| Income statement and cash flows | RMB 7.1883 to US$1.00 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*(j)* *Intangible Assets* 

Intangible assets are stated in the balance sheet at cost less accumulated amortization and impairment, if any. The costs of the intangible assets are amortized on a straight-line basis over their estimated useful lives. The respective amortization periods for the intangible assets are as follows:

Computer software 1 - 10 years <br> Sewage discharge permit 5 - 7 years

&nbsp;&nbsp;&nbsp;&nbsp;*(k)* *Impairment of Long-lived Assets (including amortizable intangible assets) other than goodwill* 

Long-lived assets, which include property, plant and equipment, prepaid land use rights, leased assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is generally measured based on either quoted market price, if available, or discounted cash flow analyses.

&nbsp;&nbsp;&nbsp;&nbsp;*(l)* *Long-term investments* 

The Company's long-term investments include equity investments in entities and non-marketable equity.

Investments in entities in which the Company can exercise significant influence and holds an investment in voting common stock or in substance common stock (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323, Investments — Equity Method and Joint Ventures ("ASC 323"). Under the equity method, the Company initially records its investments at fair value. The Company subsequently adjusts the carrying amount of the investments to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after the date of investment. The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary.

Equity securities with readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock are measured at fair value, with changes in fair value reported through earnings.

Equity securities without readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.

Available-for-sale debt security investments are reported at estimated fair value with the aggregate unrealized gains and losses, net of tax, reflected in accumulated other comprehensive loss in the consolidated balance sheets. Gain or losses are realized when the investments are sold or when dividends are declared or payments are received or when other than temporarily impaired.

Held-to-maturity debt security investment are reported at amortized cost. The securities are held to collect contractual cash flows, and the Company has the positive intent and ability to hold those securities to maturity.

The Company monitors its investments measured under equity method for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information.

&nbsp;&nbsp;&nbsp;&nbsp;*(m)* *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.

Practical expedients and exemption

The Company has not occurred any costs to obtain contracts, and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

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 years ended December 31, 2024 and 2025, respectively:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Balance at beginning of year | $784000 | $4831774 |
| Development fees collected/ deposits received | 4108620 | 11942887 |
| Development and sales of batteries revenue recognized |  | (1354284) |
| Exchange realignment | (60846) | 421608 |
| Balance at end of year | $4831774 | $15841985 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*(n)* *Cost of Revenues* 

Cost of revenues consists primarily of material costs, sub-contracting charges, employee remuneration for staff engaged in production activity, share-based compensation, depreciation and related expenses, which are directly attributable to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues.

&nbsp;&nbsp;&nbsp;&nbsp;*(o)* *Income Taxes* 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations and comprehensive loss in the period that includes the enactment date.

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.

&nbsp;&nbsp;&nbsp;&nbsp;*(p)* *PRC Value-Added Tax ("VAT")* 

The Company has been subject to VAT within the normal course of its restaurant business nationwide since May 1, 2016.

Entities that are VAT general taxpayers are permitted to offset qualified input VAT paid to suppliers against their output VAT upon receipt of appropriate supplier VAT invoices on an entity-by-entity basis. When the output VAT exceeds the input VAT, the difference is remitted to tax authorities, usually on a monthly basis; whereas when the input VAT exceeds the output VAT, the difference is treated as a VAT asset which can be carried forward indefinitely to offset future net VAT payables. VAT related to purchases and sales which have not been settled at the balance sheet date is disclosed separately as an asset and liability, respectively, on the consolidated balance sheets. VAT assets are classified as Prepayments and other receivables if they are expected to be used within one year. The Company reviews the outstanding balance of VAT assets for recoverability assessment.

&nbsp;&nbsp;&nbsp;&nbsp;*(q)* *Non-controlling Interests* 

For the Company's non-wholly owned subsidiary, a non-controlling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Company's consolidated balance sheets and have been separately disclosed in the Company's consolidated statements of comprehensive loss to distinguish the interests from that of the Company. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;*(r)* *Research and Development and Advertising Expenses* 

Research and development and advertising expenses are expensed as incurred. Research and development expenses consist primarily of remuneration for research and development staff, depreciation and material costs for research and development. Advertising expenses was $1,706,096 and $350,150 for the years ended December 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;*(s)* *Bills Payable* 

Bills payable represent bills issued by financial institutions to the Company's vendors. The Company's vendors receive payments from the financial institutions directly upon maturity of the bills and the Company is obliged to repay the face value of the bills to the financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;*(t)* *Warranties* 

The Company provides a manufacturer's warranty on all its products. It accrues a warranty reserve for the products sold, which includes management's best estimate of the projected costs to repair or replace items under warranty. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the Company's relatively short history of sales of its current products, and changes to its historical or projected warranty experience may cause material changes to the warranty reserve in the future.

&nbsp;&nbsp;&nbsp;&nbsp;*(u)* *Government Grants* 

The Company's subsidiaries in China receive government subsidies from local Chinese government agencies in accordance with relevant Chinese government policies. In general, the Company presents the government subsidies received as part of other income unless the subsidies received are earmarked to compensate a specific expense, which have been accounted for by offsetting the specific expense, such as research and development expense, interest expenses, depreciation and removal costs. Unearned government subsidies received are deferred for recognition until the criteria for such recognition could be met.

Grants applicable to long-lived assets are amortized over the life of the depreciable facilities constructed on it. For research and development expenses, the Company matches and offsets the government grants with the expenses of the research and development activities as specified in the grant approval document in the corresponding period when such expenses are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;*(v)* *Share-based Compensation* 

The Company adopted the provisions of ASC Topic 718 which requires the Company to measure and recognize compensation expenses for an award of an equity instrument based on the grant-date fair value. The cost is recognized over the vesting period (or the requisite service period). ASC Topic 718 also requires the Company to measure the cost of a liability classified award based on its current fair value. The fair value of the award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period are recognized as compensation cost over that period. Further, ASC Topic 718 requires the Company to estimate forfeitures in calculating the expense related to stock-based compensation.

The fair value of each option award is estimated on the date of grant using the Black-Scholes Option Valuation Model. The expected volatility was based on the historical volatilities of the Company's listed common stocks in the United States and other relevant market information. The Company uses historical data to estimate share option exercises and employee departure behavior used in the valuation model. The expected terms of share options granted is derived from the output of the option pricing model and represents the period of time that share options granted are expected to be outstanding. Since the share options once exercised will primarily trade in the U.S. capital market, the risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect at the time of grant.

&nbsp;&nbsp;&nbsp;&nbsp;*(w)* *Retirement and Other Postretirement Benefits* 

Contributions to retirement schemes (which are defined contribution plans) are charged to cost of revenues, research and development expenses, sales and marketing expenses and general and administrative expenses in the statement of operations and comprehensive loss as and when the related employee service is provided.

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. Chinese labor regulations require that the PRC subsidiary of the Company make contributions to the government for these benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The Company has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $6,524,654 (RMB46,920,747) and $5,228,027 (RMB37,580,625) for the years ended December 31, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;*(x)* *Derivatives and hedging* 

ASC Topic 815, Derivatives and Hedging ("ASC 815"), requires all contracts which meet the definition of a derivative to be recognized on the balance sheet as either assets or liabilities and recorded at fair value. Changes in the fair value of derivative financial instruments are either recognized periodically in earnings or in other comprehensive income (loss) depending on the use of the derivative and whether it qualifies for hedge accounting. Changes in fair values of derivatives not qualified as hedges are reported in earnings.

The Company periodically enters into foreign currency forward and option contracts to mitigate its exposure to fluctuations in foreign exchange rates, as well as commodity contracts to manage its exposure to fluctuations in raw material prices. The Company does not use derivative financial instruments for speculative or trading purposes

The derivative contracts entered into by the Company are not designated as hedging instruments for accounting purposes. Accordingly, these contracts are recorded at fair value, with the corresponding changes in fair value recognized immediately in earnings.

&nbsp;&nbsp;&nbsp;&nbsp;*(y)* *Income (loss) per Share* 

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted income (loss) per share 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 income (loss) per share is 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).

&nbsp;&nbsp;&nbsp;&nbsp;*(z)* *Use of Estimates* 

The preparation of the consolidated financial statements in accordance with US GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include revenue recognition, the recoverability of the carrying amount of long-lived assets, depreciable lives of long-lived assets, allowance for current expected credit loss, unrecognized tax benefits, impairment on inventories, valuation allowance for receivables and deferred tax assets, provision for warranty and sales returns, valuation of share-based compensation expense and warrants liability. Actual results could differ from those estimates.

&nbsp;&nbsp;&nbsp;&nbsp;*(aa)* *Commitments and Contingencies* 

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

&nbsp;&nbsp;&nbsp;&nbsp;*(bb)* *Comprehensive Income (Loss)* 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;*(cc)* *Recent Accounting Pronouncements* 

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 consolidated financial statement presentations and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company adopted ASU2023-09 beginning January 1, 2025. The adoption did not have material impact on the Company's consolidated financial statement presentations and disclosures.

Recently Issued But Not Yet Adopted Accounting Pronouncements

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 consolidated financial statement presentation and disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326), that provides a practical expedient in developing forecasts as part of estimating expected credit losses. The amendment permits the Company to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual and interim periods beginning after December 15, 2025. Early adoption is permitted and is effective on a prospective basis. The Company is currently evaluating the impact that the adoption of this guidance on the Company's consolidated financial statement presentations and disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging – Hedge Accounting Improvements (Topic 815), which amends certain aspects of the hedge accounting guidance to better align financial reporting with the economics of an entity's risk management activities. The ASU is effective for annual and interim periods beginning after December 13, 2026. Early adoption is permitted and is effective on a prospective basis. The Company is currently evaluating the impact that the adoption of this guidance on the Company's consolidated financial statement presentations and disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, to improve generally accepted accounting principles by establishing authoritative guidance on the accounting for government grants received by business entities. The amendments establish the accounting for a government grant received by a business entity, including guidance for a grant related to an asset and to income. The guidance is effective for fiscal years beginning after December 15, 2028, with early adoption permitted, and it can be applied using (a) a modified prospective approach; (b) a modified retrospective approach or (c) a retrospective approach. The Company is currently evaluating the impact that the adoption of this guidance on the Company's consolidated financial statement presentations and disclosures.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Pledged deposits** 

Pledged deposits as of December 31, 2024 and 2025 consisted of pledged deposits with banks for bills payable (note 15).

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **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 2025, substantially all of the Company's short-term deposits amounting to $4,237,090 and nil, respectively, had been placed in reputable financial institutions in the PRC.

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Trade and Bills Receivable, net** 

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

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| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Trade receivable | $28569823 | $28884493 |
| Less: Allowance for credit losses | (2841728) | (1062148) |
|  | 25728095 | 27822345 |
| Bills receivable | 7210823 | 10583053 |
|  | $32938918 | $38405398 |

---

Included in trade and bills receivables are retention receivables of $71,207 and $51,392 as of December 31, 2024 and 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, 2024 | $3198249 |
| Current period provision, net | 512123 |
| Reversal – recoveries by cash | (653568) |
| Written-off | (130465) |
| Foreign exchange adjustment | (84611) |
| Balance as at December 31, 2024 | $2841728 |
| Current period provision, net | (132517) |
| Reversal – recoveries by cash | (9968) |
| Written-off | (1706341) |
| Foreign exchange adjustment | 69246 |
| Balance as at December 31, 2025 | $1062148 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Inventories** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Raw materials | $3538167 | $11897761 |
| Work in progress | 5034330 | 12055586 |
| Finished goods | 14278530 | 26648940 |
|  | $22851027 | $50602287 |

---

During the years ended December 31, 2024 and 2025 write-downs of obsolete inventories to lower of cost or net realizable value of $4,927,140 and $6,607,039, respectively, were charged to cost of revenues.

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Prepayments and Other Receivables** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| VAT recoverable | $2444726 | $10495495 |
| Prepayments to suppliers | 7992672 | 1873852 |
| Deposits | 83754 | 120779 |
| Staff advances | 76096 | 191657 |
| Prepaid operating expenses | 501218 | 850680 |
| Interest receivable | 92515 | 124101 |
| Receivables from customers for non-operating agency-based service | 8845759 | 1529183 |
| Other receivables | 258219 | 3439 |
|  | 20294959 | 15189186 |
| Less: Allowance for credit losses | (289993) | (18271) |
|  | $20004966 | $15170915 |

---

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

---

| | |
|:---|:---|
| Balance as at January 1, 2024 | $290228 |
| Current period provision, net | 7729 |
| Foreign exchange adjustment | (7964) |
| Balance as at December 31, 2024 | 289993 |
| Reversal – recoveries by cash | (41734) |
| Written- off | (208672) |
| Current period provision, net | (25957) |
| Foreign exchange adjustment | 4641 |
| Balance as at December 31, 2025 | $18271 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **Property, Plant and Equipment, net** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Buildings | $44590499 | $89341079 |
| Leasehold improvements | 8058360 | 8790749 |
| Machinery and equipment | 84267956 | 144739898 |
| Office equipment | 2235605 | 2529257 |
| Motor vehicles | 803560 | 868261 |
|  | 139955980 | 246269244 |
| Impairment | (16755682) | (17375954) |
| Accumulated depreciation | (37713469) | (49834489) |
| Carrying amount | $85486829 | $179058801 |

---

During the years ended December 31, 2024 and 2025, the Company incurred depreciation expense of $7,757,226 and $9,421,735 respectively.

During the course of the Company's strategic review of its operations in the years ended December 31, 2024 and 2025, the Company assessed the recoverability of the carrying value of certain property, plant and equipment which resulted in impairment losses of approximately $475,220 and nil, respectively. The impairment charge represented the excess of carrying amounts of the Company's property, plant and equipment over the estimated fair value of the Company's production facilities in Hitrans primarily for the production of materials used in manufacturing of lithium batteries due to underperformance of Hitrans reporting unit. No impairment charge was recorded on the Company's production facilities in Dalian, Nanjing and Shangqiu in the years ended December 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **Construction in Progress** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Construction in progress | $29819111 | $19914272 |
| Prepayment for acquisition of property, plant and equipment | 12707748 | 12132149 |
| Carrying amount | $42526859 | $32046421 |

---

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

For the years ended December 31, 2024 and 2025, the Company capitalized interest of $854,395 and $198,760 respectively, to the cost of construction in progress.

&nbsp;&nbsp;&nbsp;&nbsp;**10.** **Long-term investments, net** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Investments in equity method investees | $1625793 | $1839890 |
| Investments in non-marketable equity | 620701 | 645690 |
|  | $2246494 | $2485580 |

---

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2025*** | ***December 31, 2025*** |
|  | **Carrying<br> Amount** | **Economic Interest** | **Carrying Amount** | **Economic Interest** |
| <u>Investments in equity method investees</u> |  |  |  |  |
| Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (b) | $1625793 | 26% | $1839890 | 26% |
| <u>Investments in non-marketable equity (c)</u> |  |  |  |  |
| Hunan DJY Technology Co., Ltd | $620701 |  | $645690 |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in Guangxi Guiwu CBAK New Energy Technology Co., Ltd

---

| | |
|:---|:---|
| Balance as of January 1, 2024 | $254475 |
| Proceeds from disposal of investment | (278114) |
| Loss from investment | (18777) |
| Profit from disposal | 45749 |
| Foreign exchange adjustment | (3333) |
| 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 year ended December 31, 2024.

For the year ended December 31, 2024, share of loss from the above equity investment was $18,777.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Investments in Zhejiang Shengyang Renewable Resources Technology Co., Ltd.

---

| | |
|:---|:---|
| Balance as of January 1, 2024 | $1672136 |
| Income (loss) from investment |  |
| Foreign exchange adjustment | (46343) |
| Balance as of December 31, 2024 | $1625793 |
| Income from investment | 145097 |
| Foreign exchange adjustment | 69000 |
| Balance as of December 31, 2025 | $1839890 |

---

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 supplier of Hitrans since June 2020. On November 6, 2023, Hitrans completed the registration of 26% equity interest of Zhejiang Shengyang.

The Company recorded share of income of nil and $145,097 from the investment in Zhejiang Shengyang for the years ended December, 2024 and 2025, respectively.

And within three months following the Initial Acquisition, Mr. Xu 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.

(c) Investments in non-marketable equity

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Cost | $1232978 | $1282618 |
| Impairment | (612277) | (636928) |
| Carrying amount | $620701 | $645690 |

---

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 (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 million) 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 years ended December 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**11.** **Lease** 

&nbsp;&nbsp;&nbsp;&nbsp;(a) Prepaid land use rights

---

| | |
|:---|:---|
|  | ***Prepaid land*** |
|  | ***lease <br> payments*** |
| Balance as of January 1, 2024 | $11712704 |
| Amortization charge for the year | (316811) |
| Foreign exchange adjustment | (319920) |
| Balance as of December 31, 2024 | 11075973 |
| Addition for the year | 1099537 |
| Amortization charge for the period | (331189) |
| Foreign exchange adjustment | 464543 |
| Balance as of December 31, 2025 | $12308864 |

---

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

Yuanchuang acquired a land use right on May 13, 2025 to build a factory in Anhui, PRC for cathode materials manufacturing.

Lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 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 $316,811 and $331,189 for the years ended December 31, 2024 and 2025, respectively.

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

&nbsp;&nbsp;&nbsp;&nbsp;(b) Operating lease

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 and further extend for three years with a monthly rental of RMB94,156 (approximately $12,983) from May 14, 2025 to May 14, 2028.

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 five 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 three 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 RMB28,000 ($3,860) 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 RMB14,000 ($1,995) per month.

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.

CBAK 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, CBAK 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.

CBAK Shangqiu entered into a lease agreement for manufacturing and factory spaces in Shangqiu with a term of six years, commencing on January 1, 2024 to December 31, 2029. The monthly rental payment is RMB265,487 ($36,769) per month. The landlord unconditionally forgave the accrued annual rent due to unsatisfied performance from the leasing spaces. The Company recognized the forgiveness as gains for the year ended December 31, 2025.

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.

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

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

Nanjing CBAK 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.

BAK Asis entered into a lease for office in Hong Kong from June 16, 2025 to June 30, 2028. The monthly rental payment was HKD10,000 ($1,290) per month.

Operating lease expenses for the years ended December 31, 2024 and 2025 for the capitation agreement was as follows:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| Operating lease cost – straight line | $1270656 | $747513 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(c) Company as lessee - Finance lease

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Property, plant and equipment, at cost | $- | $4924746 |
| Accumulated depreciation |  | (2569405) |
| Impairment | &nbsp;&nbsp;&nbsp;&nbsp; - | (2355341) |
| Property, plant and equipment, net under finance lease | - | - |
| Finance lease liabilities, current |  | 1307170 |
| Finance lease liabilities, non-current | - | - |
| Total finance lease liabilities | $- | $1307170 |

---

The components of finance lease expenses for the years ended December 31, 2024 and 2025 were as follows:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Finance lease cost: |  |  |
| Depreciation of assets | $- | $- |
| Interest of lease liabilities | 79309 | 1708 |
| Total lease expenses | $79309 | $1708 |

---

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

---

| | | |
|:---|:---|:---|
|  | ***Operating<br> leases*** | ***Finance<br> leases*** |
| 2026 | $1097829 | $1316821 |
| 2027 | 1190354 |  |
| 2028 | 558013 |  |
| 2029 | 464157 |  |
| 2030 | 454024 |  |
| Thereafter | - | - |
| Total undiscounted cash flows | 3764377 | 1316821 |
| Less: imputed interest | (323146) | (9651) |
| Present value of lease liabilities | $3441231 | $1307170 |

---

Lease term and discount rate:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| **Weighted-average remaining lease term (years)** | | |
| Land use rights | 35.9 | 36.3 |
| Operating leases | 4.16 | 3.13 |
| Finance lease |  | 0.92 |
| **Weighted-average discount rate** |  |  |
| Land use rights | Nil | Nil |
| Operating lease | 4.33% | 4.19% |
| Finance lease | 2.9 | 0.8% |

---

Supplemental cash flow information related to leases where the Company was the lessee for the year ended December 31, 2024 and 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| Operating cash outflows from operating assets | $866001 | $893742 |

---

**12.** **Intangible Assets, net** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Computer software at cost | $169054 | $1735057 |
| Sewage discharge permit | 1667907 | 175861 |
|  | 1836961 | 1910918 |
| Accumulated amortization | (1453999) | (1839264) |
|  | $382962 | $71654 |

---

Amortization expenses were $470,219 and $315,191 for the years ended December 31, 2024 and 2025, respectively.

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

---

| | |
|:---|:---|
| 2026 | $16842 |
| 2027 | 10833 |
| 2028 | 9217 |
| 2029 | 8808 |
| 2030 | 8808 |
| Thereafter | 17146 |
| Total | $71654 |

---

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

**13.** **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.

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 | $7323654 |
| Debts product | 3144 |
| Trade and bills receivable, net | 37759688 |
| Inventories | 13616922 |
| Prepayments and other receivables | 1384029 |
| Income tax recoverable | 47138 |
| Amount due from trustee | 11788931 |
| Property, plant and equipment, net | 21190890 |
| Construction in progress | 2502757 |
| Intangible assets, net | 1957187 |
| Prepaid land use rights, noncurrent | 6276898 |
| Leased assets, net | 48394 |
| Deferred tax assets | 1715998 |
| Short term bank loan | (8802402) |
| Other short term loans – CBAK Power | (20597522) |
| Trade accounts and bills payable | (38044776) |
| Accrued expenses and other payables | (7439338) |
| Deferred government grants | (290794) |
| Land appreciation tax | (464162) |
| Deferred tax liabilities | (333824) |
| **Net assets** | 29642812 |
| *Less: Waiver of dividend payable* | 1250181 |
| Total net assets acquired | 30892993 |
| Non-controlling interest (24.43%) | (7547158) |
| Goodwill | 1606518 |
| Total identifiable net assets | $24952353 |

---

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 | 118000000 | 18547918 |
| Cash consideration for 21.56% registered equity interest (representing 21.18% of paid-up capital) of Hitrans from Hitrans management | 40744376 | 6404435 |
| **Total Purchase Consideration** | 158744376 | 24952353 |

---

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.

**14.** **Deposit paid for acquisition of long-term investments** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Investments in non-marketable equity | $15864318 | $16503014 |

---

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, 2024; (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 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. The Company has contributed RMB115.8 million (approximately $16.5 million) as of December 31, 2025 and up to the date of this report.

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.

**15.** **Trade and Bills Payable** 

Trade and bills payable as of December 31, 2024 and 2025 consisted of the followings:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Trade payable | $26317312 | $60046427 |
| Bills payable |  |  |
| – Bank acceptance bills | 57297394 | 91161622 |
| – Letter of credit | 1109680 | 2137696 |
|  | $84724386 | $153345745 |

---

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

The bills payable were secured by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company's pledged deposits (Note 3);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) $1.4 million of the Company's bills receivable as of December 31, 2024 and 2025 (Note 5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Company's buildings (Note 8) and prepaid
 land use rights (Note 11)

&nbsp;&nbsp;&nbsp;&nbsp;**16.** **Loans** 

*<u>Bank loans</u>:*

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Short-term bank borrowings | $26087350 | $28532938 |
| Long-term bank borrowings | - | 4118628 |
|  | $26087350 | $32651566 |

---

In January 2023, Hitrans renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB160.0 million (approximately $22.1 million) with the term from January 2023 to December 2027. On January 22, 2025, Hitrans and Bank of Communications entered into a new banking facility for another five years from January 22, 2025 to January 22, 2030 for a maximum guarantee of loan amount to RMB155.8 million (approximately $21.5 million). The facility was secured by Hitrans's land use rights and buildings. On October 24, 2025, Hitrans and Bank of Communications renewed the facility to a maximum guarantee of loan amount to RMB162.0 million (approximately $23.1 million). Under the facility, Hitrans borrowed RMB137.2 million (approximately $19.6 million) as of December 31, 2025, bearing interest at 2.5% to 3.45% per annum expiring through January to June 2026.

On January 17, 2022, Nanjing CBAK obtained a one-year term facility from Agricultural Bank of China with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 105% of benchmark rate of the People's Bank of China ("PBOC") for short-term loans, which is 3.85% per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan and secured by an unrelated third party, Jiangsu Credits Financing Guarantee Co., Ltd. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on January 20, 2022 for a term until January 16, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) early on January 5, 2023. On January 6, 2023, Nanjing CBAK borrowed a one-year term loan of RMB10 million (approximately $1.4 million) for a period of one year to January 4, 2024, bearing interest at 120% of benchmark rate of the PBOC for short-term loans, which is 3.85% per annum, while other terms and guarantee remain the same. Nanjing CBAK repaid the loan on January 4, 2024.

On February 9, 2022, NJ CBAK obtained a one-year term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 124% of benchmark rate of the People's Bank of China ("PBOC") for short-term loans, which is 4.94% per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January 28, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, Nanjing CBAK borrowed a one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 129% of benchmark rate of PBOC for short-term loans, which is 4.70% per annum for a term until January 13, 2024. Nanjing CBAK repaid the loan on January 13, 2024.

On April 28, 2022, Nanjing CBAK obtained a three-year term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch, with a maximum amount of RMB12 million (approximately $1.7 million) with the term from April 21, 2022 to April 21, 2025. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.5 million) on April 29, 2022, bearing interest at 3.95% per annum for a term until April 29, 2023. Nanjing CBAK repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, Nanjing CBAK borrowed another one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 102.5% of benchmark rate of PBOC for short-term loans, which is 3.90% per annum for a term until April 19, 2024. Nanjing CBAK repaid the loan on April 19, 2024.

Nanjing CBAK entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately $1.2 million) bearing interest rate at 4.6% per annum for a period from September 27, 2023 to August 31, 2024. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment and the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. NJ CBAK borrowed RMB9 million (approximately $1.3 million) on September 27, 2023 for a term until August 31, 2024. Nanjing CBAK repaid the loan on August 31, 2024.

Hitrans entered into a loan agreement with China CITIC Bank Shaoxing Branch for a short-term loan of RMB4.8 million (approximately $0.7 million) from August 10, 2023 to May 2, 2024, bearing interest rate at 4.3% per annum. Hitrans repaid the loan on May 2, 2024.

On January 7, 2023, Nanjing CBAK obtained a two-year term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) for a period from January 7, 2023 to January 6, 2025. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK borrowed RMB5 million (approximately $0.7 million) on January 12, 2023 for a term of one year until January 11, 2024, bearing interest at 3.65% per annum. Nanjing CBAK repaid the above early on June 15, 2023. On June 27, 2023, Nanjing CBAK entered into another loan agreement for one year from June 27, 2023 to June 26, 2024 under the two-year term facility for a maximum loan amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.65 % pr annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on the same date. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK Nanjing. Nanjing CBAK repaid the loan on June 26, 2024.

On March 28, 2024, CBAK New Energy and Bank of China Limited entered into a short-term loan agreement for one year from March 29, 2023 to March 28, 2024 for a maximum loan amount to RMB5 million (approximately $0.7 million) bearing interest rate at 3.65% per annum. CBAK New Energy borrowed RMB5 million (approximately $0.7 million) on the same date. The loan was secured by CBAK Power's buildings in Dalian. CBAK New Energy repaid RMB5 million (approximately $0.7 million) on March 27, 2024. On March 28, 2024, CBAK New Energy borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing interest rate at 3.45% per annum. CBAK New Energy early repaid the loan on August 21, 2024.

On April 19, 2023, Nanjing CBAK and Bank of Nanjing Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023 to April 9, 2024 for RMB10 million (approximately $1.4 million) bearing interest rate at 3.7% per annum. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on April 23, 2023. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Nanjing CBAK repaid the loan on April 9, 2024.

On July 31, 2023, Nanjing CBAK obtained a three-year term facility from Bank of China Gaochun Branch, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from July 31, 2023 to July 30, 2026. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum. Nanjing CBAK repaid the loan on July 22, 2024.

On August 3, 2023, CBAK Energy and Bank of China entered into a short term loan agreement for one year from August 3, 2023 to August 2, 2024 for a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.55% per annum. CBAK Energy borrowed RMB10 million (approximately $1.4 million) on September 27, 2023. The loan was secured by CBAK Power's buildings in Dalian. CBAK Energy repaid the loan on August 2, 2024.

On January 24, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to January 17, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.

On March 26, 2024, Hitrans entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year to March 25, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. Hitrans borrowed RMB5 million (approximately $0.7 million) on the same date. Hitrans early repaid the loan on September 27, 2024.

On April 9, 2024, Hitrans and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from April 9, 2024 to April 7, 2025 for a maximum loan amount to RMB5.5 million (approximately $0.8 million) bearing interest rate at 4.05% per annum. Hitrans borrowed RMB5.5 million (approximately $0.8 million) on the same date. Hitrans early repaid the loan on January 24, 2025.

On June 24, 2024, CBAK Nanjing and Bank of China entered into a short-term loan agreement, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from June 24, 2024 to June 20, 2025.The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, CBAK Nanjing borrowed RMB10 million (approximately $1.4 million) on June 24, 2024, bearing interest rate at 3.0% per annum. CBAK Nanjing early repaid the loan on August 23, 2024.

On September 29, 2024, Hitrans and Zhejiang Shangyu Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement for RMB15 million (approximately $2.0 million) with the term of one year from September 29, 2024 to September 26, 2025 bearing 4.00% interest rate. Hitrans borrowed RMB15 million (approximately $2.1 million) on the same date. Hitrans repaid the loan on September 26, 2025.

On December 31, 2024, Hitrans and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB10 million (approximately $1.4 million) with the term of one year from December 31, 2024 to December 30, 2025 bearing 2.9% interest rate. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date. Hitrans repaid the loan on December 30, 2025.

On January 17, 2025, Hitrans entered into a long-term Maximum Pledge Agreement with Zhejiang Shangyu Rural Commercial Bank, for the period from January 17, 2025 to September 25, 2027, with a maximum facility amount of RMB76.56 million (approximately $10.54 million). The facility was secured by the land use right and buildings of Hitrans. Hitrans has borrowed RMB38.9 million (approximately $5.5 million) as of December 31, 2025, bearing interest rate at 2.85% - 2.96% per annum, of which RMB10 million (approximately $1.4 million) repayable on January 16, 2026, RMB3.9 million (approximately $0.5 million) repayable on June 20, 2027 and the remaining RMB25 million (approximately $3.6 million) repayable on September 25, 2027. Hitrans repaid RMB10 million (approximately $1.4 million) on January 16, 2026.

On January 20, 2025, Nanjing CBAK entered into an unsecured revolving loan agreement with Bank of Ningbo Co., Ltd. Gaochun Branch with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 2.8% per annum (LPR interest rate -30 bp), with a one-year loan period ending on January 20, 2026. Nanjing CBAK borrowed RMB10 million (approximately $1.4 million) under this loan agreement on January 20, 2025. Nanjing CBAK early repaid the loan on September 20, 2025.

On February 19, 2025, Nanjing CBAK obtained a RMB30 million facility (approximately $4.1 million) from Jiangsu Gaochun Rural Commercial Bank, with the term from February 19, 2025 to September 23, 2027. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment. Nanjing CBAK borrowed RMB3 million (approximately $0.4 million) as of December 31, 2025, bearing interest rate at 2.98% per annum, repayable on May 19, 2026.

On February 25, 2025, Hitrans entered into a short-term factoring loan agreement with China Construction Bank Co., Ltd for a maximum amount of RMB10 million (approximately $1.4 million) for a period of one year from February 28, 2025 to February 27, 2026, bearing interest of 3.7% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date. Hitrans repaid the factoring loan in February 2026.

Hitrans obtained another 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 November 28, 2025 to November 27, 2026, bearing interest of 3.1% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on the same date.

On June 28, 2025, Nanjing CBAK entered into a short-term loan agreement with Agricultural Bank of China Co., Limited for RMB12 million (approximately $1.7 million) from June 28, 2025 to June 26, 2026, bearing interest 2.60% per annum. Nanjing CBAK borrowed RMB12 million (approximately $1.7 million) on the same date. Nanjing CBAK early repaid the loan on July 18, 2025.

On June 30, 2025, CBAK Power obtained a banking facility from China Guangfa Bank Co., Ltd with a maximum amount of RMB100 million (approximately $14 million) for a term to June 12, 2026 for short-term borrowings and issuance of acceptance bills to settle materials suppliers, guaranteed by Power's buildings and pledged deposits. CBAK Power borrowed HKD10 million (approximately $1.4 million) from the above facility, bearing interest at 2.65% per annum, repayable on August 14, 2026. CBAK Power early repaid the loan on November 14, 2025.

CBAK Power has borrowed a series of acceptance bills totaling RMB123.3 million (approximately $17.6 million) for various terms expiring through January to June 2026, which was secured by CBAK Power's buildings and pledged deposit of RMB35.2 million (approximately $5.0 million) (note 3).

On July 30, 2025, Hitrans entered into a short-term loan agreement with Industrial Bank Co., Ltd for RMB10 million (approximately $1.4 million) for a period of one year bearing interest of 3% per annum. Hitrans borrowed RMB10 million (approximately $1.4 million) on July 31, 2025.

On August 21, 2025, CBAK Power entered into a short-term loan agreement with China Construction Bank for RMB10 million (approximately $1.4 million) for a period of one year, bearing interest of 2.2% per annum. CBAK Power borrowed RMB10 million (approximately $1.4 million) on August 29, 2025 and repayable on August 21, 2026.

On December 17, 2025, Nanjing BFD entered into a short-term loan agreement with Bank of China Co., Limited for RMB10 million (approximately $1.4 million) from December 17, 2025 to December 16, 2026, bearing interest 2.30% per annum. The loan was guaranteed by CBAK Nanjing. Nanjing BFD borrowed RMB10 million (approximately $1.4 million) on the same date.

CBAK Power and Nanjing CBAK obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB690 million (approximately $96.3 million) with the term to March 16, 2026. CBAK Power and Nanjing CBAK borrowed a series of acceptance bills totaling RMB105.9 million (approximately $15.1 million) for various terms expiring through January to June 2026, which was secured by the CBAK Power's and Nanjing CBAK's pledged deposit of RMB108.2 million (approximately $15.4 million) (note 3).

Hitrans borrowed a series of acceptance bills totaling RMB98.8 million (approximately $14.1 million) for various terms expiring through January to June 2026, which was secured by Hitrans's pledged deposit of RMB98.9 million (approximately $14.1 million) (note 3).

Nanjing CBAK borrowed a series of acceptance bills from Bank of Nanjing totaling RMB77.3 million (approximately $11.0 million) for various terms expiring through March to June 2026, which was secured by Nanjing CBAK's pledged deposit of RMB75.4 million (approximately $10.8 million) (note 3) and the balance guaranteed by 100% equity of CBAK Nanjing held by BAK Investment.

Nanjing CBAK borrowed a series of acceptance bills from Bank of Ningbo totaling RMB0.4 million (approximately $63,549) for various terms expiring in March 2026, which was secured by Nanjing CBAK's pledged deposit of RMB0.4 million (approximately $63,549) (note 3).

Hitrans borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB33.1 million (approximately $4.7 million) expiring through February 2026 to June 2026, which was secured by Hitrans's pledged deposit of RMB33.1 million (approximately $4.7 million) (note 3).

Hitrans borrowed a series of acceptance bills from Zhejiang Shangyu Rural Commercial Bank Co., Ltd totaling RMB34.3 million (approximately $4.9 million) expiring through February to June 2026, which was secured by Hitrans's pledged deposit of RMB34.3million (approximately $4.9 million) (note 3).

CBAK Power borrowed a series of acceptance bills from Industrial and Commercial Bank of China totaling RMB52.7 million (approximately $7.5 million) expiring through January to June 2026, which was secured by CBAK Power's pledged deposit of RMB52.9 million (approximately $7.5 million) (note 3).

Hitrans borrowed a series of acceptance bills from Industrial Bank totaling RMB16.0 million (approximately $2.3 million) expiring in March 2026, which was secured by Hitrans's pledged deposit of RMB11.0 million (approximately $1.6 million) (note 3).

Nanjing CBAK borrowed a series of acceptance bills from Agricultural Bank of China totaling RMB27.8 million (approximately $3.9 million) expiring through January to June 2026, which was secured by Nanjing CBAK's pledged deposit of RMB7.8 million (approximately $1.1 million) (note 3) and the balance guaranteed by 100% equity in CBAK Naning held by BAK Investment.

Nanjing CBAK obtained serval letter of credit from Bank of Ningbo totaled RMB15.0 million (approximately $2.1 million) for settlement of materials purchase for a period of one year expiring through September to November 2026, which was secured by Nanjing CBAK's pledged deposit of RMB15.0 million (approximately $2.1 million) (note 3).

Hitrans borrowed an acceptance bill from Bank of Ningbo of RMB10 million (approximately $1.4 million) expiring in June 2026, which was secured by Hitran's bills receivables of RMB10 million (approximately $1.4 million) (note 5).

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Pledged deposits (note 3) | $54061642 | $67376113 |
| Short-term deposits (note 4) | 2000000 | - |
| Bills receivables (note 5) | 1395874 | 1449358 |
| Right-of-use assets (note 11) | 4982972 | 5019028 |
| Buildings (note 8) | 3818112 | 43200786 |
|  | $66258600 | $117045285 |

---

As of December 31, 2025, the Company had $14.7 million unutilized committed banking facilities.

During the years ended December 31, 2024 and 2025, interest of $1,115,354 and $1,070,392 were incurred on the Company's bank borrowings, respectively.

*<u>Other short-term loans</u>:*

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

---

| | | | |
|:---|:---|:---|:---|
|  |  | ***December 31,*** | ***December 31,*** |
|  | ***Note*** | ***2024*** | ***2025*** |
| Advance from related parties |  |  |  |
| – Mr. Xiangqian Li, the Company's Former CEO | (a) | $100000 | $100000 |
| – Mr. Yunfei Li, the Company's Former CEO | (b) | 158889 | 157236 |
|  |  | 258889 | 257236 |
| Advances from unrelated third party |  |  |  |
| – Mr. Wenwu Yu | (c) | 1347 | 1401 |
| – Ms. Longqian Peng | (c) | 6980 | 7262 |
| – Suzhou Zhengyuanwei Needle Ce Co., Ltd | (d) | 68499 | 71257 |
|  |  | 76826 | 79920 |
|  |  | $335715 | $337156 |

---

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;(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 December 31, 2025, loan amount of RMB0.5 million ($71,257) remained outstanding.

During the years ended December 31, 2024 and 2025, interest of $8,343 and $8,463 were incurred on the Company's borrowings from unrelated parties, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**17.** **Accrued Expenses and Other Payables** 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Construction costs payable | $11570384 | $14311903 |
| Equipment purchase payable | 10871081 | 51082600 |
| Liquidated damages\* | 1210119 | 1210119 |
| Accrued staff costs | 6253168 | 8633536 |
| Customer deposits | 6856137 | 12816577 |
| Deferred revenue (note 2m) | 4831774 | 15841985 |
| Accrued expenses | 2059252 | 3161542 |
| Interest payables | 69927 | 82157 |
| Other tax payables | 1175339 | 1318816 |
| Dividend payable to non-controlling interest to Hitrans | 1221915 | 1271109 |
| Payables to suppliers for non-operating agency-based service | 11981065 | 2632714 |
| Derivatives liabilities (note 21) | - | 728423 |
| Other payable | 185474 | 560467 |
|  | $58285635 | $113651948 |

---

\* 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 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.

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 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.

&nbsp;&nbsp;&nbsp;&nbsp;**18.** **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 |
| Shenzhen Bak New Material Technology Co., Ltd | Note a |
| Zhengzhou BAK Battery Co., Ltd ("Zhenghzhou BAK") | Note b |
| Shenzhen BAK Battery Co., Ltd ("SZ BAK") | Former subsidiary and refer to Note c, d |
| Shenzhen BAK Power Battery Co., Ltd ("BAK SZ") | Former subsidiary and refer to Note c, d |
| Zhejiang Shengyang Renewable Resources Technology Co., Ltd. ("Zhejiang Shengyang") | Note e |
| Fuzhou BAK Battery Co., Ltd ("Fuzhou Bak") | Note d, f |
| Zhengzhou BAK Electronics Co., Ltd | Note d, g |
| Zhengzhou BAK New Energy Vehicle Co., Ltd | Note h |
| Shenzhen BAK Medical Technology Co., Ltd ("SZ BAK Medical") | Note d, i |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Ms. Xiuzhu Li, one of the major shareholder of CBAK effective from December 3, 2025, is the major shareholder of Shenzhen BAK New Material Technology Co., Ltd, holding 46.32% equity interest.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Mr. Xiangqian Li, the Company's former CEO, is a director of Zhengzhou BAK and Zhengzhou BAK is a wholly owned subsidiary of BAK SZ.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Mr. Xiangqian Li, the Company's former CEO, is a director of SZ BAK and BAK SZ. SZ BAK and BAK SZ were the former subsidiaries of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;(d) An immediate family member of Ms. Xiuzhu Li has major interests in serval entities set forth in the above table.

&nbsp;&nbsp;&nbsp;&nbsp;(e) Hitrans has 26% equity interest in Zhejiang Shengyang (note 10).

&nbsp;&nbsp;&nbsp;&nbsp;(f) Zhengzhou BAK has 51% equity interest in Fuzhou BAK.

&nbsp;&nbsp;&nbsp;&nbsp;(g) BAK SZ has 100% equity interests in Zhengzhou BAK Electronics Co.,
Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;(h) SZ BAK was the former shareholder of Zhengzhou BAK New Energy Vehicle Co., Ltd to April 10, 2023.

(i) SZ BAK Medical is a wholly owned subsidiary of SZ BAK.

**<u>Related party transactions</u>**

The Company entered into the following significant related party transactions:

---

| | | |
|:---|:---|:---|
|  | ***For the <br> year ended<br> December 31,<br> 2024*** | ***For the<br> year ended<br> December 31,<br> 2025*** |
| Purchase of batteries from Zhengzhou BAK | $7049867 | $6628052 |
| Purchase of batteries from Fuzhou BAK | 69133 | 302809 |
| Purchase of materials from Zhejiang Shengyang | 4352197 | 5452798 |
| Sub-contracting services provided by Fuzhou BAK |  | 1783617 |
| Purchase of materials from Shenzhen BAK New Material Technology Co., Ltd |  | 798972 |
| Purchase of materials from SZ BAK Medical |  | 370224 |
| Purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service | 1794581 |  |
| Sales of cathode raw materials to Zhengzhou BAK | 18661537 | 15196930 |
| Sales of cathode raw materials to BAK SZ | 31783 | 11388 |
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd | 388430 | 908156 |
| Sales of cathode raw materials to Zhengzhou BAK in relation to non-operating agency-based service |  | 2248560 |
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd in relation to non-operating agency-based service |  | 134252 |
| Sales of cathode raw materials to BAK SZ in relation to non-operating agency-based service |  | 4805 |
| Sales of batteries to Fuzhou BAK | 76090 |  |
| Sales of batteries to Zhengzhou BAK | 12232 | 1933 |

---

**<u>Related party balances</u>**

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

*<u>Receivables from former subsidiary</u>*

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31,<br> 2025*** |
| Receivables from BAK SZ | $12399 | $4389 |

---

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

*<u>Other balances due from/ (to) related parties</u>*

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Trade receivable, net – Zhengzhou BAK (i) | $5970184 | $4836152 |
| Trade receivable, net – Zhengzhou BAK Electronics Co., Ltd. (i) | $135012 | $237446 |
| Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (ii) | $459905 | $- |
| Prepayment to supplier – Zhengzhou BAK (iii) | $3738228 | $- |
| Prepayment to supplier – Zhengzhou BAK New Energy Vehicle Co., Ltd (iv) | $205496 | $- |
| Trade payable, net – Zhengzhou BAK (v) | $66084 | $4453603 |
| Trade payable, net – Zhejiang Shengyang (vi) | $1486765 | $1136860 |
| Trade payable, net - Shenzhen BAK New Material Technology Co., Ltd (vi) | $147210 | $164887 |
| Trade payable, net – SZ BAK Medical (vi) | $- | $428572 |
| Payable for non-operating agency-based service – Zhejiang Shengyang (vii) | $1338794 | $- |
| Deposit paid for acquisition of long-term investments – BAK SZ (note 15) | $15864318 | $16503014 |
| Dividend payable to non-controlling interest of Hitrans (note 17) | $1221915 | $1271109 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(i) Representing trade receivable from sales of cathode raw materials.

(ii) Representing bills receivable issued by Zhengzhou BAK as of December 31, 2024 were pledged to bank as security for issuance of bills payable (note 15).

&nbsp;&nbsp;&nbsp;&nbsp;(iii) Representing the prepayments to Zhengzhou BAK for purchase of batteries.

&nbsp;&nbsp;&nbsp;&nbsp;(iv) 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.

&nbsp;&nbsp;&nbsp;&nbsp;(v) Representing trade payables on purchase of batteries.

&nbsp;&nbsp;&nbsp;&nbsp;(vi) Representing trade payables on purchase of materials for manufacturing

&nbsp;&nbsp;&nbsp;&nbsp;(vii) Representing payables on purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service.

*<u>Payables to a former subsidiary</u>*

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Payables to BAK SZ | $(419849) | $(407506) |

---

Balance as of December 31, 2024 and 2025 consisted of payables for purchase of inventories.

&nbsp;&nbsp;&nbsp;&nbsp;**19.** **Deferred Government Grants** 

Deferred government grants as of December 31, 2024 and 2025 consist of the following:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Total government grants | $8136469 | $10774034 |
| Less: Current portion | (556214) | (578606) |
| Non-current portion | $7580255 | $10195428 |

---

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 facilitates the development and operation of the projects. Since 2020, the Company accumulatively received RMB61.0 million (approximately $8.7 million) subsidy from Gaochun EDZ and government to facilitate the construction works and equipment in Nanjing. The Company recognized RMB10 million ($1.6 million) as other income after moving the Company facilities to Nanjing in 2020. For the remaining subsidy, 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:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Cost of revenues | $535405 | $510729 |
| Research and development expenses | 16433 | 16440 |
| General and administrative expenses | 37626 | 37642 |
| Other income (expenses), net | 672802 | 1469378 |
|  | $1262266 | $2034189 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**20.** **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,<br> 2024*** | ***December 31,<br> 2025*** |
| Balance at beginning of year | $546444 | $444114 |
| Warranty costs incurred | (245328) | (54579) |
| Provision (reversal) for the year | 156832 | 370557 |
| Foreign exchange adjustment | (13834) | 25597 |
| Balance at end of year | 444114 | 785689 |
| Less: Current portion | (23426) | (339136) |
| Non-current portion | $420688 | $446553 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**21.** **Financial derivatives** 

The Company uses a variety of derivative financial instruments and physical contracts to manage its exposure to foreign currency and commodity price fluctuations.

Foreign currency forward and option contracts

The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of foreign exchange rate fluctuations. The Company adjusts its non-designated hedges quarterly. The nominal value of approximately nil and $42.2 million contracts with maturities of three to twelve months were held as of December 31, 2024 and 2025, respectively.

Commodity contracts

The commodity derivatives (net of their cash collateral) are determined on a counterparty-by-counterparty basis. The Company entered into commodity contracts during the year ended December 31, 2025, resulting in recognized losses of $196,823. The Company did not hold any outstanding commodity contracts as of December 31, 2024 and 2025.

The fair value of the financial derivatives as of December 31, 2024 and 2025 were as follows:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| **Derivatives not designed as hedging instruments** |  |  |
| Derivatives liabilities - Foreign exchange contracts, accrued expenses and other payables (note 17) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $728423 |

---

The gain (loss) related to the Company's derivative instruments for the years ended December 31, 2024 and 2025 were as follows:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| Foreign currency forward and option contracts | $- | $(243231) |
| Commodity contract | - | (196823) |
|  | $- | $(440054) |

---

Refer to note 24 for detailed disclosures regarding fair value measurements.

&nbsp;&nbsp;&nbsp;&nbsp;**22.** **Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Income taxes in the consolidated statements of comprehensive loss(income)* 

The Company's provision for income taxes expenses consisted of:

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| PRC income tax | $— | $— |
| Current income tax expenses (credit), net | 1558613 | (184686) |
| Deferred income tax expenses | - | - |
|  | $1558613 | $(184686) |

---

**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.

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 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 and CBAK Energy California had no taxable income for the years ended December 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 years ended December 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 and Nanjing BFD were 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.

**Malaysia Tax**

CBAK Malaysia is subject to income tax laws of Malaysia at the statutory rate of 24%. CBAK Malaysia was newly incorporated on April 30, 2025 and did not have any operations as of the date of this report. There was no assessable profits arising in or derived from Malaysia for the year ended December 31, 2025.

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

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31,<br> 2024*** | ***Year ended<br> December 31,<br> 2025*** |
| Income (loss) before income taxes | $11143763 | $(11136621) |
| United States federal corporate income tax rate | 21% | 21% |
| Income tax expenses (credit) computed at United States statutory corporate income tax rate | 2340190 | (2338690) |
| Reconciling items: |  |  |
| Over provision of deferred taxation in prior year |  |  |
| Rate differential for PRC earnings | 524791 | (373565) |
| Tax effect of entity at preferential tax rate | (1751421) | 496840 |
| Non-deductible (income) expenses | (108841) | 331509 |
| Share based payments | 79096 | 16129 |
| Utilization of tax loss | (1640692) | (600199) |
| Tax effect of utilization of tax losses previously not recognised | (274323) | (809655) |
| Valuation allowance on deferred tax assets | 3156312 | 3092945 |
| Decrease in opening deferred tax assets resulting from a decrease in applicable tax rate | (766499) | - |
| Income tax expenses (credit) | $1558613 | $(184686) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(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 2025 are presented below:

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31, <br> 2025*** |
| **Deferred tax assets** | | |
| Trade receivable | $723916 | 662239 |
| Inventories | 591678 | 927350 |
| Property, plant and equipment | 1992540 | 1868073 |
| Non-marketable equity securities | 91842 | 95539 |
| Equity method investment | 343850 | 335398 |
| Intangible assets | 133684 | 151340 |
| Accrued expenses, payroll and others | 614417 | 865885 |
| Provision for product warranty | 66617 | 117854 |
| Net operating loss carried forward | 38116873 | 18761298 |
| Valuation allowance | (42522990) | (23659551) |
| **Deferred tax assets, non-current** | $152427 | 125425 |
| **Deferred tax liabilities, non-current** |  |  |
| Long-lived assets arising from acquisitions | $152427 | $125425 |

---

As of December 31, 2025, the Company's U.S. entity had net operating loss carry forwards of $3,812,589. As of December 31, 2025, the Company's PRC subsidiaries had net operating loss carry forwards of $67,737,362, 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.

&nbsp;&nbsp;&nbsp;&nbsp;**23.** **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 2025, are also considered under restriction for distribution.

&nbsp;&nbsp;&nbsp;&nbsp;**24.** **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 commodity contracts was determined by quoted market prices in active markets within level 1.

The fair value of foreign currency option was determined using the Black-Scholes model, with level 2 inputs (Note 21).

The fair value of share options was determined using the Binomial Model, with level 3 inputs (Note 26).

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.

&nbsp;&nbsp;&nbsp;&nbsp;**25.** **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 $6,524,654 (RMB46,920,747) and $5,228,027 (RMB37,580,625) for the years ended December 31, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**26.** **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 December 31, 2025, there was no unrecognized stock-based compensation associated with the above restricted shares. As of December 31, 2025, 1,667 vested shares were to be issued.

Restricted shares granted on April 19, 2016

On April 19, 2016, pursuant to the Company's 2015 Plan, the Compensation Committee of the Board of Directors of the Company granted an aggregate of 500,000 restricted shares of the Company's common stock, par value $0.001, to certain employees, officers and directors of the Company, of which 220,000 restricted shares were granted to the Company's executive officers and directors. There are three types of vesting schedules. First, if the number of restricted shares granted is below 3,000, the shares will vest annually in 2 equal installments over a two-year period with the first vesting on June 30, 2017. Second, if the number of restricted shares granted is larger than or equal to 3,000 and is below 10,000, the shares will vest annually in 3 equal installments over a three year period with the first vesting on June 30, 2017. Third, if the number of restricted shares granted is above or equal to 10,000, the shares will vest semi-annually in 6 equal installments over a three year period with the first vesting on December 31, 2016. The fair value of these restricted shares was $2.68 per share on April 19, 2016. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method.

All the restricted shares granted in respect of the restricted shares granted on April 16, 2016 had been vested on June 30, 2019.

As of December 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. During the year ended December 31, 2024 and 2025, the Company recorded nil as stock compensation expenses, respectively.

The fair value of the stock options granted to certain employees and officers of the Company is estimated on the date of the grant using the Binomial Model. The fair value of the options was calculated using the following assumptions: estimated life of six months to five years, volatility of 106.41%, risk-free interest rate of 1.26% and dividend yield of 0%. The fair value of 2,400,002 stock options to certain employees and officers of the Company was $2,805,624 at the grant date. During the years ended December 31, 2024 and 2025, the Company recorded nil as stock compensation expenses, respectively.

As of December 31, 2025, there was no unrecognized stock-based compensation associated with the above options granted.

Restricted share units granted and stock ownership program on April 11, 2023

On April 11, 2023, pursuant to the Company's 2015 Plan, the Compensation Committee granted an aggregate of 894,000 restricted share units and 2,124,000 options to certain employees, officers and directors of the Company, of which 230,000 restricted share units and 460,000 options were granted to the Company's executive officers and directors. The restricted share units will vest semi-annually on June 30, 2023 and December 31, 2023. The fair value of these restricted shares units was $0.95 per share on April 11, 2023. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method. The option exercise price was $0.9780. The shares will be vested semi-annually in 4 equal installments over a 2 year period with the first vesting on June 30, 2024. The options will expire on the 70-month anniversary of the grant date.

The 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 $341,054 and $59,936 as share-based compensation expenses in respect of the stock options granted on April 11, 2023 for the years ended December 31, 2024 and 2025, respectively.

All the restricted share units granted on April 11, 2023 had been vested on December 31, 2024. As of December 31, 2025, there was no unrecognized stock-based compensation 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 $7,872 and nil for the years ended December 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. For the years ended December 31, 2024 and 2025, the Company recorded $27,722 and $16,868, respectively, as share-based compensation expenses in respect of the stock options granted on August 22, 2023.

As of December 31, 2025, there was unrecognized stock-based compensation $3,285 associated with the above options granted.

Stock option activity under the Company's stock-based compensation plans is shown below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Shares** | **Average<br> Exercise Price<br> per Share** | **Aggregate<br> Intrinsic<br> Value\*** | **Weighted <br> Average<br> Remaining<br> Contractual<br> Term in<br> Years** |
| Outstanding at January 1, 2025 | 1455170 | 1.31 |  | 3.4 |
| Exercisable at January 1, 2025 | 1434958 | 1.35 | $- | 3.4 |
| Granted |  |  | &nbsp;&nbsp;&nbsp;&nbsp;- |  |
| Exercised | 112500 | 0.98 |  |  |
| Forfeited | (631170) | 1.86 | - | - |
| Outstanding at December 31, 2025 | 80000 | $0.96 | $- | 0.3 |
| Exercisable at December 31, 2025 | 2066458 | $1.24 | $- | 2.5 |

---

\* The intrinsic value of the stock options at December 31, 2025 is the amount by which the market value of the Company's common stock of $0.84 as of December 31, 2025 exceeds the average exercise price of the option. As of December 31, 2025, the intrinsic value of the outstanding and exercisable stock options was nil.

As the Company itself is an investment holding company which is not expected to generate operating profits to realize the tax benefits arising from its net operating loss carried forward, no income tax benefits were recognized for such stock-based compensation cost under the stock option plan for the year ended December 31, 2024 and 2025.

**27.** **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:

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31,<br> 2024*** | ***Year ended<br> December 31,<br> 2025*** |
| Net income (loss) | $9585150 | $(10951935) |
| Less: Net loss attributable to non-controlling interests | 2204882 | 1573816 |
| Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. | 11790032 | (9378119) |
| Weighted average shares outstanding - basic (note) | 89928357 | 89247119 |
| Dilutive unvested shares unit | 229955 | - |
| Weighted average shares outstanding–- diluted | 90158312 | 89247119 |
| Income (loss) per share |  |  |
| - Basic | $0.13 | $(0.10) |
| - Diluted | $0.13 | $(0.10) |

---

Note: Including 5,384 vested restricted shares granted pursuant to the 2015 Plan that were not yet issued

For the years ended December 31, 2024 and 2025, unvested options were anti-dilutive and excluded from shares used in the diluted computation.

&nbsp;&nbsp;&nbsp;&nbsp;**28.** **Commitments and Contingencies** 

&nbsp;&nbsp;&nbsp;&nbsp;*(i)* *Capital Commitments* 

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| For construction of buildings | $1677191 | $733869 |
| For purchases of equipment | 53300030 | 26187817 |
| Capital injection | 254204390 | 257370802 |
|  | $309181611 | $284292488 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*(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, 2024 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 December 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.

**29.** **Concentrations and Credit Risk** 

&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Concentrations* 

The Company had the following customers that individually comprised 10% or more of net revenue for the years ended December 31, 2024 and 2025 as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | ***Year ended*** | ***Year ended*** | ***Year ended*** | ***Year ended*** |
| <br>**Sales of finished goods and raw materials** | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2025*** | ***December 31, 2025*** |
| Customer A | $27752479 | 15.7% | 22131274 | 11.3% |
| Customer B | 57563897 | 32.6% | \* | \* |
| Zhengzhou BAK (note 18) | 18661537 | 10.6% | \* | \* |

---

\* 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 2025 as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2025*** | ***December 31, 2025*** |
| Customer A | $10676044 | 41.5% | $3932534 | 14.1% |
| Zhengzhou BAK (note 18) | 5970184 | 23.2% | 4836152 | 17.4% |

---

\* 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 years ended December 31, 2024 and 2025 as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Year ended<br> December 31, 2024*** | ***Year ended<br> December 31, 2024*** | ***Year ended<br> December 31, 2025*** | ***Year ended<br> December 31, 2025*** |
| Supplier A | $10171281 | 10.1% | $\* | \*% |
| Supplier B | 11864125 | 11.7% | \* | \*% |
| Supplier C | \* | \* | 17542987 | 10.0% |
| Supplier D | \* | \* | 22179727 | 12.6% |

---

\* 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 2025 as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***December 31, 2024*** | ***December 31, 2024*** | ***December 31, 2025*** | ***December 31, 2025*** |
| Supplier B | $3263562 | 12.4% | $\* | \* |
| Supplier D | \* | \* | 7202042 | 12.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;*(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 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.

&nbsp;&nbsp;&nbsp;&nbsp;**30.** **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 years ended December 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 (expense) and net income (loss). Net revenue, cost of revenues, operating expenses, operating income (loss), finance income (expense), other income (expenses) and net income (loss) by segment for the years ended December 31, 2024 and 2025 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***For the year ended December 31, 2024*** | ***CBAT*** | ***Hitrans*** | ***Corporate<br> unallocated<br> (note)*** | ***Consolidated*** |
| Net revenues | $136588803 | $40025806 | $- | $176614609 |
| Cost of revenues | (93535812) | (41303552) |  | (134839364) |
| Gross profit (loss) | 43052991 | (1277746) |  | 41775245 |
| Total operating expenses | (22848626) | (8539324) | (1599146) | (32987096) |
| Operating income (loss) | 20204365 | (9817070) | (1599146) | 8788149 |
| Finance income (expenses), net | 1275246 | 7954 | (110) | 1283090 |
| Other income (expenses), net | (490229) | 1562753 |  | 1072524 |
| Income tax expenses | (1558613) |  |  | (1558613) |
| Net income (loss) | 19430769 | (8246363) | (1599256) | 9585150 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***For the year ended December 31, 2025*** | ***CBAT*** | ***Hitrans*** | ***Corporate<br> unallocated<br> (note)*** | ***Consolidated*** |
| Net revenues | $105982389 | $89206917 | $- | $195189306 |
| Cost of revenues | (92257111) | (84509607) |  | (176766718) |
| Gross profit | 13725278 | 4697310 |  | 18422588 |
| Total operating expenses | (24208471) | (11055459) | (1599901) | (36863831) |
| Operating loss | (10483193) | (6358149) | (1599901) | (18441243) |
| Finance income (expenses), net | 60979 | (732875) | (1448) | (673344) |
| Other income (expenses), net | 6729459 | 1248507 |  | 7977966 |
| Income tax credit | 184686 |  |  | 184686 |
| Net loss | (3508069) | (5842517) | (1601349) | (10951935) |
| As of December 31, 2025 |  |  |  |  |
| Identifiable long-lived assets | 174672705 | 51881626 |  | 226554331 |
| Total assets | 306247018 | 119783830 | 150788 | 426181636 |

---

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.

***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:

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31,<br> 2024*** | ***Year ended<br> December 31,<br> 2025*** |
| High power lithium batteries used in: |  |  |
| Electric vehicles | $1681651 | $796173 |
| Light electric vehicles | 10319176 | 36363411 |
| Residential energy supply & uninterruptable supplies | 124587976 | 68822805 |
|  | 136588803 | 105982389 |
| Materials used in manufacturing of lithium batteries |  |  |
| Cathode | 34228998 | 82483022 |
| Precursor | 5796808 | 6723895 |
|  | 40025806 | 89206917 |
| Total consolidated revenue | $176614609 | $195189306 |

---

***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:

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31,<br> 2024*** | ***Year ended<br> December 31,<br> 2025*** |
| Mainland China | $98925752 | $147280627 |
| Europe | 65746989 | 7526077 |
| India | 8051905 | 16551510 |
| Africa |  | 17037599 |
| Others | 3889963 | 6793493 |
| Total | $176614609 | $195189306 |

---

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

**31.** **Restricted Net Assets** 

The Company's ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company's subsidiaries incorporated in PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company's subsidiaries.

In accordance with the PRC Regulations on Enterprises with Foreign Investment, a foreign invested enterprise established in the PRC is required to provide certain statutory reserve funds, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profits as reported in the enterprise's PRC statutory financial statements. A foreign invested enterprise is required to allocate at least 10% of its annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of its registered capital based on the enterprise's PRC statutory financial statements. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserved funds can only be used for specific purposes and are not distributable as cash dividends.

Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide statutory surplus fund at least 10% of its annual after-tax profits until such statutory surplus fund has reached 50% of its registered capital based on the enterprise's PRC statutory financial statements. A domestic enterprise is also required to provide discretionary surplus fund, at the discretion of the board of directors, from the net profits reported in the enterprise's PRC statutory financial statements. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends.

As a result of these PRC laws and regulations that require annual appropriations of 10% of after-tax profits to be set aside prior to payment of dividends as general reserve fund or statutory surplus fund, the Company's PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The balance of statutory reserves were $1,230,511 and 3,042,602 as of December 31, 2024 and 2025, respectively.

Amounts restricted include paid-in capital, additional paid-in capital and statutory reserve funds, less accumulated deficit, totaling approximately $339,900,456 and $349,527,050 as of December 31, 2024 and 2025, respectively. Therefore, in accordance with Securities and Exchange Commission Regulation S-X Rules 4-08 (e) (3), the condensed parent company only financial statements as of December 31, 2024 and 2025 and for the years ended December 31, 2024 and 2025 are disclosed in Note 32.

&nbsp;&nbsp;&nbsp;&nbsp;**32.** **Parent Company Only Condensed Financial Information** 

Schedule I of Article 504 of Regulation SX requires the condensed financial information of the registrant (Parent Company) to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Regulation S-X Rule 4-08 (e)(3), General Notes to Financial Statements and concluded that it was applicable for the Company to disclose the financial information for the Company only. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender, regulatory agency, foreign government, etc.).

The subsidiaries did not pay any dividend to CBAK for the years ended December 31, 2024 and 2025. Certain information and disclosures generally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The disclosures contain supplemental information relating to the operations of CBAK, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of CBAK. CBAK did not have significant capital and other commitments, or guarantees as of December 31, 2024 and 2025.

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CBAK ENERGY TECHNOLOGY, INC.

PARENT COMPANY STATEMENTS OF OPERATIONS

For the years ended December 31, 2024 and 2025

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31, <br> 2024*** | ***Year ended<br> December 31, <br> 2025*** |
| REVENUE, net | $- | $- |
| OPERATING EXPENSES: |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and consulting expenses | 522236 | 225644 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1076909 | 1375705 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (1599145) | (1601349) |
| LOSS FROM OPERATIONS | (1599145) | (1601349) |
| LOSS ATTRIBUTABLE TO PARENT COMPANY | (1599145) | (1601349) |
| EQUITY IN (LOSS) INCOME OF SUBSIDIARIES | 13389177 | (7776770) |
| NET INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS | $11790032 | $(9378119) |

---

CBAK ENERGY TECHNOLOGY, INC.

PARENT COMPANY BALANCE SHEETS

As of December 31, 2024 and 2025

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31,<br> 2025*** |
| ASSETS |  |  |
| Interests in subsidiaries | $123176663 | $114163707 |
| Cash and cash equivalents | 30956 | 54458 |
| &nbsp;&nbsp;&nbsp;Total assets | $123207619 | $114218165 |
| LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other payables | 1534576 | 1540092 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 1534576 | 1540092 |
| SHAREHOLDERS' EQUITY | 121673043 | 112678073 |
| &nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $123207619 | $114218165 |

---

CBAK ENERGY TECHNOLOGY, INC.

PARENT COMPANY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2024 and 2025

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | ***Year ended<br> December 31,<br> 2024*** | ***Year ended<br> December 31,<br> 2025*** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $11790032 | $(9378119) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity (income) loss of subsidiaries | (13389177) | 7776770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation | 376648 | 76804 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other payable | (52169) | 5516 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1274666) | (1519029) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Increase in interest in subsidiaries | 1278700 | 3042762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 1278700 | 3042762 |
| CASH FLOWS FROM FINNCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Repurchase of common stock | - | (1500231) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | - | (1500231) |
| CHANGE IN CASH AND CASH EQUIVALENTS | 4034 | 23502 |
| CASH AND CASH EQUIVALENTS, beginning of year | 26922 | 30956 |
| CASH AND CASH EQUIVALENTS, end of year | $30956 | $54458 |

---

The condensed parent company financial statements have been prepared using the equity method to account for its subsidiaries. Refer to the consolidated financial statements and notes presented above for additional information and disclosures with respect to these financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;**33.** **Subsequent events** 

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

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.**

None.

**ITEM 9A. 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 December 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 our 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 December 31, 2025.

**Management's Annual Report on Internal Control over Financial Reporting**

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the framework set forth in the report entitled Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company's internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company's internal control over financial reporting as of December 31, 2025 were not effective because of the following material weaknesses in our internal control over financial reporting has been identified:

– 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 were 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 fourth quarter of our fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Report of Independent Registered Public Accounting Firm**

ARK Pro CPA & Co, our independent registered public accounting firm has issued an attestation report regarding the effectiveness of our internal controls over financial reporting which is included under Item 8 above.

**ITEM 9B. OTHER INFORMATION.**

We have no information to disclose that was required to be disclosed in a report on Form 8-K during the fourth quarter of fiscal year 2025, but was not reported.

During the fiscal quarter ended December 31, 2025, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.**

Not applicable.

**PART III**

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**

**Directors and Executive Officers**

The following sets forth the name and position of each of our current executive officers and directors.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Zhiguang Hu | 43 Male | President and Chief Executive Officer |
| Jiewei Li | 35 Male | Director, Chief Financial Officer and Secretary |
| Xiangyu Pei | 35 Female | Director |
| Martha C. Agee | 70 Female | Independent Director |
| J. Simon Xue | 71 Male | Independent Director |
| Jianjun He | 53 Male | Independent Director |

---

***Zhiguang Hu*** is a long-term employee who has been with the Company since 2004 and has led our sales and marketing department, contributing significantly to the revenue growth of the Company's battery business in recent years. Mr. Hu has served as our President and Chief Executive Officer since October 2024. Since June 2023, he has held the position of Deputy General Manager in the Company's Sales and Marketing Department. Prior to this role, he served as the Director of Sales and Marketing at our subsidiary, Dalian CBAK Power Battery Co., Ltd., from January 2014 to May 2023. His experience also includes serving as the Director of the Sales and Marketing Department at BAK International (Tianjin) Co., Ltd. from January 2012 to December 2013, a former subsidiary of the Company. Before that, he was the Sales Manager at BAK International (Tianjin) Co., Ltd. from January 2008 to December 2011. Additionally, he managed Overseas Business and Key Accounts at Shenzhen BAK Battery Co., Ltd., another former subsidiary of the Company, from July 2004 to December 2007. Mr. Hu graduated from Lanzhou Business College (now Lanzhou University of Finance and Economics) in July 2004, earning a degree in Business Administration.

***Jiewei Li*** has served as our Chief Financial Officer and Secretary of the Company since August 2023, and as our director since May 2025. Mr. Li has also been the Company's investor relations manager since 2021. Prior to joining the Company, from 2018 to 2021, Mr. Li had worked at multiple fund management companies in China where he focused on structuring various investment products. Before that, from 2014 to 2018, he had worked for several renowned American real estate developers in their fund management departments, responsible for capital market affairs. Mr. Li received a Master's Degree in Political and Public Administration from the Chinese University of Hong Kong in 2014.

***Xiangyu Pei*** served as our Interim Chief Financial Officer from August 23, 2019 to August 22, 2023. After resigning as our Interim Chief Financial Officer, she has continued to serve in our finance department. Ms. Pei has served as our director since September 2021. Prior to that, she served as the financial controller of the Company's subsidiary, CBAK Power since 2017. Ms. Pei was also the Company's secretary from 2017 to August 2023. While serving as our Interim Chief Financial Officer, she oversaw auditing, accounting, financial reporting and investor relations for the Company. Ms. Pei received a PhD in World Economics from Jilin University in China.

 ****

***Martha C. Agee*** has served as our director since November 15, 2012. Since 1997, Ms. Agee has been a senior lecturer of business law at Hankamer School of Business of Baylor University where she teaches courses in the Legal Environment of Business, International Business Law, and Healthcare Law & Ethics for graduate and undergraduate students. Prior to that, Ms. Agee practiced law from 1988 to 1996. Ms. Agee obtained her bachelor's degree in accounting in 1976 and Juris Doctor degree in 1988 from Baylor University.

 ****

***J. Simon Xue*** has served as our director since February 1, 2016. Dr. Xue has approximately 40 years of experience in nuclear chemistry, solid state chemistry, superconductivity and materials for lithium ion batteries. Within his research career, he has spent 21 years in the research and development of lithium ion battery. Dr. Xue is retired but remains a member of energy storage strategic division of the Expert Committee for "Chinese Industrial Association of Power Sources", energy storage strategic division. Prior to that, Dr. Xue was a director of Altair Nanotechnologies Inc., a Delaware company, between August 2011 and April 2012. From 2010 to 2011, he served as the chief executive officer of Yintong Energy Co., Ltd., a subsidiary of Canon Investment Holdings Ltd. Dr. Xue has also held positions at Ultralife, Duracell, B&K Electronics Co., Ltd., Valence Energy-Tech (Suzhou) Co., A123 Systems Inc. and International Battery Inc. He has an extensive reputation in the whole product chain of lithium ion battery in China, including materials, equipment, cell manufacturing and testing. He has authored or co-authored over 50 scientific articles, 12 patents relevant to battery chemistry and materials and participated, presented and hosted more than 30 battery or material related international conferences. Dr. Xue completed his Ph.D. program in Solid State Chemistry in McMaster University in 1992.

 ****

 ****

***Jianjun He*** has served as our director since November 4, 2013. Mr. He has more than 16 years of experience in accounting and finance and is an associate member of the Chinese Institute of Certificate Public Accounts. Mr. He has been the Managing Director of Jilin Cybernaut Lvke Investment and Management Co., Ltd., an investment consulting firm in China, since January 1, 2013. From June 30, 2009 to December 31, 2012, Mr. He served as the Chief Financial Officer of THT Heat Transfer Technology, Inc. (Nasdaq: THTI) ("THT Heat"), a provider of heat exchangers and heat exchange solutions in China. Mr. He was the Chief Financial Officer of Siping City Juyuan Hanyang Plate Heat Exchanger Co. Ltd, a wholly owned subsidiary of THT Heat from 2007 to December 2012. From 1999 to 2007, Mr. He worked as senior financial officer in Jilin Grain Group, a state-owned enterprise engaged in the grain processing and trading business. Mr. He graduated from Changchun Taxation College in 1995 with a bachelor's degree in auditing and obtained a master's degree from Jilin University in 2005.

There are no agreements or understandings for any of our executive officers or director to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

Directors are elected until their successors are duly elected and qualified.

**Director Qualifications**

Directors are responsible for overseeing the Company's business consistent with their fiduciary duty to shareholders. This significant responsibility requires highly skilled individuals with various qualities, attributes and professional experience. The Board believes that there are general requirements for service on the Company's board of directors (the "Board of Directors" or the "Board") that are applicable to all directors and that there are other skills and experience that should be represented on the Board as a whole but not necessarily by each director. The Board and the Nominating and Corporate Governance Committee of the Board consider the qualifications of directors and director candidates individually and in the broader context of the Board's overall composition and the Company's current and future needs.

***Qualifications for All Directors***

In identifying and evaluating nominees, the Nominating and Corporate Governance Committee may consult with the other Board members, management, consultants, and other individuals likely to possess an understanding of the Company's business and knowledge of suitable candidates. In making its recommendations, the Nominating and Corporate Governance Committee assesses the requisite skills and qualifications of nominees and the composition of the Board as a whole in the context of the Board's criteria and needs. In evaluating the suitability of individual Board members, the Nominating and Corporate Governance Committee may take into account many factors, including general understanding of marketing, finance and other disciplines relevant to the success of a publicly traded company in today's business environment; understanding of the Company's business and technology; the international nature of the Company's operations; educational and professional background; and personal accomplishment. The Nominating and Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company's business and represent stockholder interests through the exercise of sound judgment, using its diversity of experience. The Nominating and Corporate Governance Committee also ensures that a majority of nominees would be "independent directors" as defined under the applicable rules of the SEC and The NASDAQ Stock Market LLC.

***Qualifications, Attributes, Skills and Experience to be Represented on the Board as a Whole***

In its assessment of each potential candidate, including those recommended by stockholders, the Nominating and Corporate Governance Committee considers the nominee's judgment, integrity, experience, independence, understanding of the Company's business or other related industries and such other factors the Nominating and Corporate Governance Committee determines are pertinent in light of the current needs of the Board. The Nominating and Corporate Governance Committee also takes into account the ability of a Director to devote the time and effort necessary to fulfill his or her responsibilities to the Company.

The Board and the Nominating and Corporate Governance Committee require that each Director be a recognized person of high integrity with a proven record of success in his or her field. Each Director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and to dealing responsibly with social issues. In addition to the qualifications required of all Directors, the Board assesses intangible qualities including the individual's ability to ask difficult questions and, simultaneously, to work collegially.

The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole, in light of the Company's current needs and business priorities. The Company's services are performed in various countries and in significant areas of future growth located outside of the United States. Accordingly, the Board believes that international experience or specific knowledge of key geographic growth areas and diversity of professional experiences should be represented on the Board. In addition, the Company's business is multifaceted and involves complex financial transactions. Therefore, the Board believes that the Board should include some Directors with a high level of financial literacy and some Directors who possess relevant business and leadership experience. Our business involves complex technologies in a highly specialized industry. Therefore, the Board believes that extensive knowledge of the Company's business and industry should be represented on the Board.

***Summary of Qualifications of Directors***

Set forth below is a narrative disclosure that summarizes some of the specific qualifications, attributes, skills and experiences of our directors. For more detailed information, please refer to the biographical information for each director set forth above.

<u>Mr. Li,</u> has extensive experience in capital markets, fund management, and investment product structuring across both U.S. and Chinese markets, combined with his deep institutional knowledge gained through serving in multiple senior roles at the Company.

<u>Ms. Pei</u>, has been with the Company since 2017 and served as the Company's interim chief financial officer from August 23, 2019 to August 22, 2023. She contributes valuable financial expertise and management insights to the Board.

<u>Ms. Agee</u>, Chair of the Audit Committee, was previously a Certified Public Accountant, worked as Chief Accountant for political sub-division for five and a half years and worked as Supervisor of Accounting for a large retail chain where the responsibilities included hiring, training, and supervision of accounting staff; preparation and analysis of 17 monthly financial statements and quarterly consolidated financial statements; budgeting, and internal auditing.

<u>Dr. Xue</u>, Chair of the Compensation Committee, has approximately 40 years' experience in nuclear chemistry, solid state chemistry, superconductivity and materials for lithium-ion batteries. Within his research career, he has spent 21 years in the research and development of lithium-ion battery.

<u>Mr. He</u>, Chair of the Nominating and Corporate Governance Committee, has more than 15-year experience in accounting and finance and is an associate member of the Chinese Institute of Certificate Public Accounts.

**Family Relationships**

There are no family relationships among our directors or officers.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or executive officers has been the subject of the follow events, during the past ten years:

1) A petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

2) Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

3) The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Acting as a futures commission
 merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any
 other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment
 adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company,
 bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with
 such activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Engaging in any type of
 business practice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Engaging in any activity
 in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities
 laws or Federal commodities laws;

4) The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3)i in the preceding paragraph or to be associated with persons engaged in any such activity;

5) Was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;

6) Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7) Was the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any federal or state securities
 or commodities law or regulation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Any law or regulation respecting
 financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement
 or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Any law or regulation prohibiting
 mail or wire fraud or fraud in connection with any business entity; or

8) Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

**Board Composition and Committees**

Our Board of Directors is comprised of Jiewei Li, Xiangyu Pei, Martha C. Agee, J. Simon Xue and Jianjun He.

Martha Agee, J. Simon Xue and Jianjun He each serves on our Board of Directors as an "independent director" as defined by as defined by Rule 5605(a)(2) of the NASDAQ Listing Rules. Our Board has determined that Martha Agee possesses the accounting or related financial management experience that qualifies her as financially sophisticated within the meaning of Rule 5605(c)(2)(A) of the NASDAQ Listing Rule and that she is an "audit committee financial expert" as defined by the rules and regulations of the SEC.

Our Board currently has three standing committees which perform various duties on behalf of and report to the Board: (i) audit committee, (ii) compensation committee and (iii) nominating and corporate governance committee. Each of the three standing committees is comprised entirely of independent directors. From time to time, the Board may establish other committees.

***Audit Committee***

Our Audit Committee consists of three members: Martha C. Agee, J. Simon Xue and Jianjun He. Pursuant to the determination of our Board of Directors, Ms. Agee serves as the chair of the Audit Committee and as our Audit Committee financial expert as that term is defined by the applicable SEC rules. Each director who has served or is serving on our Audit Committee was or is "independent" as that term is defined under the NASDAQ listing rules for Audit Committee members at all times during their service on such Committee.

The Audit Committee oversees our accounting and financial reporting processes and the audits of the financial statements of our Company. The Audit Committee is responsible for, among other things:

● the appointment, compensation, retention and oversight of the work of the independent auditor;

● reviewing and pre-approving all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor;

● reviewing and approving all proposed related-party transactions;

● discussing the interim and annual financial statements with management and our independent auditors;

● reviewing and discussing with management and the independent auditor (a) the adequacy and effectiveness of the Company's internal controls, (b) the Company's internal audit procedures, and (c) the adequacy and effectiveness of the Company's disclosure controls and procedures, and management reports thereon;

● reviewing reported violations of the Company's code of conduct and business ethics; and

● reviewing and discussing with management and the independent auditor various topics and events that may have significant financial impact on the Company or that are the subject of discussions between management and the independent auditors.

***Compensation Committee***

Our Compensation Committee consists of three members: Martha C. Agee, J. Simon Xue and Jianjun He, with Mr. Xue serving as chair. Each director who has served or is serving on our Compensation Committee was or is "independent" as that term is defined under the NASDAQ listing rules at all times during their service on such Committee.

The purpose of our Compensation Committee discharge the responsibilities of the Company's Board of Directors relating to compensation of the Company's executives, to produce an annual report on executive compensation for inclusion in the Company's proxy statement, if required, and to oversee and advise the Board on the adoption of policies that govern the Company's compensation programs, including stock and benefit plans. Our chief executive officer may not be present at any Compensation Committee meeting during which his compensation is deliberated. The Compensation Committee is responsible for, among other things:

● reviewing and approving the compensation structure for corporate officers at the level of corporate vice president and above;

● overseeing an evaluation of the performance of the Company's executive officers and approve the annual compensation, including salary, bonus, incentive and equity compensation, for the executive officers;

● reviewing and approving chief executive officer goals and objectives, evaluate chief executive officer performance in light of these corporate objectives, and set chief executive officer compensation consistent with Company philosophy;

● making recommendations to the Board regarding the compensation of board members; and

● reviewing and making recommendations concerning long-term incentive compensation plans, including the use of equity-based plans. Except as otherwise delegated by the Board of Directors, the Compensation Committee will act on behalf of the Board of Directors as the "Committee" established to administer equity-based and employee benefit plans, and as such will discharge any responsibilities imposed on the Compensation Committee under those plans, including making and authorizing grants, in accordance with the terms of those plans.

***Nominating and Corporate Governance Committee***

Our Nominating and Corporate Governance Committee consists of three members: Martha C. Agee, J. Simon Xue and Jianjun He, with Mr. He serving as chair. Each director who has served or is serving on our Nominating and Corporate Governance Committee was or is "independent" as that term is defined under the NASDAQ listing standards at all times during their service on such Committee.

The purpose of the Nominating and Corporate Governance Committee is to determine the slate of director nominees for election to the Company's Board of Directors, to identify and recommend candidates to fill vacancies occurring between annual shareholder meetings, and to review the Company's policies and programs that relate to matters of corporate responsibility, including public issues of significance to the Company and its members. The Nominating and Corporate Governance Committee is responsible for, among other things:

● annually presenting to the Board a list of individuals recommended for nomination for election to the Board at the annual meeting of stockholders, and for appointment to the committees of the Board;

● annually reviewing the composition of each committee and present recommendations for committee memberships to the Board as needed; and

● annually evaluating and reporting to the Board of Directors on the performance and effectiveness of the Board of Directors to facilitate the directors fulfillment of their responsibilities in a manner that serves the interests of the Company's shareholders.

**Code of Business Ethics and Conduct**

We have adopted a Code of Business Ethics and Conduct relating to the conduct of our business by our employees, officers and directors. We intend to maintain the highest standards of ethical business practices and compliance with all laws and regulations applicable to our business, including those relating to doing business outside the United States. A copy of the Code of Business Conduct and Ethics has been filed as Exhibit 14.1 to our Quarterly Report on Form 10-Q filed on August 22, 2006 and is hereby incorporated by reference into this annual report. The Code of Business Conduct and Ethics is also available on our website at www.cbak.com.cn. During the fiscal year ended December 31, 2025, there were no amendments to or waivers of our Code of Business Ethics and Conduct. If we effect an amendment to, or waiver from, a provision of our Code of Business Ethics and Conduct, we intend to satisfy our disclosure requirements by posting a description of such amendment or waiver on our Internet website at www.cbak.com.cn or via a current report on Form 8-K.

**Delinquent Section 16(a) Reports**

Under U.S. securities laws, directors, certain executive officers and persons beneficially owning more than 10% of our Common Stock must report their initial ownership of the Common Stock, and any changes in that ownership, to the SEC. The SEC has designated specific due dates for these reports. Based solely on our review of copies of such reports filed with the SEC and written representations of our directors and executive offers, we believe that all persons subject to reporting filed the required reports on time in fiscal year 2025, except one Form 4, covering one transaction, was filed late by Yunfei Li; and one Form 3, covering one transaction, was filed late by Gimli Group Ltd.

**ITEM 11. EXECUTIVE COMPENSATION.**

**Summary Compensation Table**

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named executive officers for services rendered in all capacities during the noted periods. No other executive officers received total compensation in excess of $100,000 during the fiscal year ended December 31, 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | <br>**Year** |<br>**Salary**<br>**($)<sup>(1)</sup>** | **Stock**<br>**Awards**<br>**($)** | **Option**<br>**Awards**<br>**($)<sup>(2)(3)</sup>** |<br>**Total**<br>**($)** |
| Zhiguang Hu | 2025 | 116856 |  | 14670 | 131526 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer<sup>(4)</sup> | 2024 | 121387 |  | 11294 | 132681 |
| Jiewei Li | 2025 | 83469 |  | 9780 | 93249 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer, Director and Secretary<sup>(5)</sup> | 2024 | 91047 |  | 7529 | 98576 |
| Xiangyu Pei | 2025 | 83469 |  | 48900 | 132369 |
| &nbsp;&nbsp;&nbsp;Director and Former Interim Chief Financial Officer<sup>(6)</sup> | 2024 | 100587 |  | 37645 | 138232 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) The amounts reported in
 this table have been converted from RMB to U.S. dollars based on the average conversion rate between the U.S. dollar and RMB for
 the applicable fiscal year, or $1.00 to RMB7.1883 (fiscal year 2025 exchange rate) and $1.00 to RMB7.1913 (fiscal year 2024 exchange
 rate).

&nbsp;&nbsp;&nbsp;&nbsp;(2) The value of performance-vesting
 stock options is computed assuming achievement of performance goals based on probable outcomes of such performance goals under ASC
 Topic 718. Amount shown does not reflect compensation actually received or that may be realized in the future by the recipients.
 In accordance with SEC regulations, such amount reflects the aggregate grant date fair value computed in accordance with FASB ASC
 Topic 718 for stock and option awards made in the referenced fiscal year. This performance-based option award is subject to performance
 and service-vesting requirements. See Note 26. "*Share-Based Compensation*" of the Notes to Consolidated Financial Statements in this annual report for information,
 including assumptions made, regarding the valuation of equity awards.

&nbsp;&nbsp;&nbsp;&nbsp;(3) On November 29, 2021, the
 Company granted (i) Mr. Jiewei Li performance-based options to purchase a total of 20,000 shares of common stock, and (ii) Ms. Xiangyu
 Pei performance-based options to purchase a total of 150,000 shares of common stock, under the Company's 2015 Equity Incentive
 Plan, with an exercise price of $1.96 per share.

(4) On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted 15,000 RSUs to Mr.
 Zhiguang Hu. Each RSU represents a contingent right to receive one share of common stock. The RSUs vested in two equal installments
 on June 30 and December 31, 2023, respectively. On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted Mr. Zhiguang Hu an option
 to purchase 30,000 shares of common stock. The option vest in four equal installments semi-annually with the first installment vesting
 on June 30, 2024, the second installment vesting on December 31, 2024, the third installment vesting on June 30, 2025 and the fourth
 installment vesting on December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(5) On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted 10,000 RSUs to Mr.
 Jiewei Li. Each RSU represents a contingent right to receive one share of common stock. The RSUs vested in two equal installments
 on June 30 and December 31, 2023, respectively. On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted Mr. Jiewei Li an option
 to purchase 20,000 shares of common stock. The option vest in four equal installments semi-annually with the first installment vesting
 on June 30, 2024, the second installment vesting on December 31, 2024, the third installment vesting on June 30, 2025 and the fourth
 installment vesting on December 31, 2025.

(6) On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted 50,000 RSUs to Ms.
 Pei. Each RSU represents a contingent right to receive one share of common stock. The RSUs vested in two equal installments on
 June 30 and December 31, 2023, respectively. On
 April 11, 2023, pursuant to the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan, the Company granted Ms. Pei an option to
 purchase 100,000 shares of common stock. The option vest in four equal installments semi-annually with the first installment vesting
 on June 30, 2024, the second installment vesting on December 31, 2024, the third installment vesting on June 30, 2025 and the fourth
 installment vesting on December 31, 2025.

**Summary of Employment Agreements**

The base salary shown in the Summary Compensation Table is described in each named executive officer's respective employment agreement. The material terms of those employment agreements are summarized below.

We entered into employment agreements with three-year initial terms with our named executive officers in the form of our standard employment agreements. Each of our standard employment agreements is automatically extended by a year at the expiration of the initial term and at the expiration of every one-year extension, until terminated in accordance with the termination provisions of the agreements, which are described below.

Our standard employment agreement permits us to terminate the executive's employment for cause, at any time, without notice or remuneration, for certain acts of the executive, including but not limited to a conviction or plea of guilty to a felony, negligence or dishonesty to our detriment and failure to perform agreed duties after a reasonable opportunity to cure the failure. An executive may terminate his employment upon one month's written notice if there is a material reduction in his authority, duties and responsibilities or if there is a material reduction in his annual salary before the next annual salary review. Furthermore, we may terminate the executive's employment at any time without cause by giving one month's advance written notice to the executive officer. If we terminate the executive's employment without cause, the executive will be entitled to a termination payment of up to three months of his or her then base salary, depending on the length of such executive's employment with us. Specifically, the executive will receive salary continuation for: (i) one month following a termination effective prior to the first anniversary of the effective date of the employment agreement; (ii) two months following a termination effective prior to the second anniversary of the effective date; and (iii) three months following a termination effective prior to or any time after the third anniversary of the effective date. The employment agreements provide that the executive will not participate in any severance plan, policy, or program of the Company.

Our standard employment agreement contains customary non-competition, confidentiality, and non-disclosure covenants. Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use, except as required in the performance of his duties in connection with the employment, any confidential information, technical data, trade secrets and know-how of our company or the confidential information of any third party, including our affiliated entities and our subsidiaries, received by us. The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice and to assign all right, title and interest in them to us. In addition, each executive officer has agreed to be bound by non-competition restrictions set forth in his or her employment agreement. Specifically, each executive officer has agreed not to, while employed by us and for a period of one year following the termination or expiration of the employment agreement,

● approach our clients, customers or contacts or other persons or entities, and not to interfere with the business relationship between us and such persons and/or entities;

● assume employment with or provide services as a director for any of our competitors, or engage in any business which is in direct or indirect competition with our business; or

● solicit the services of any of our employees.

**Outstanding Equity Awards at Fiscal Year-End 2025**

The following table sets forth the equity awards outstanding at December 31, 2025 for each of our named executive officers. As of December 31, 2025, there were no outstanding stock awards for named executive officers.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | |
| <br>**Name** | <br>**Grant Date** |<br><br><br>**Number of**<br>**securities**<br>**underlying**<br>**unexercised**<br>**options (#)**<br>**exercisable** |<br><br><br>**Number of**<br>**securities**<br>**underlying**<br>**unexercised**<br>**options (#)**<br>**unexercisable** | **Equity**<br>**incentive**<br>**plan**<br>**awards:**<br>**Number of**<br>**securities**<br>**underlying**<br>**unexercised**<br>**unearned**<br>**options**<br>**(#)** |<br><br><br><br>**Option**<br>**exercise**<br>**price**<br>**($)** | <br>**Option**<br>**expiration**<br>**date** |
| Zhiguang Hu, | 4/11/2023 | 15000 |  | 15000 | 0.978 | 06/22/2029 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer |  |  |  |  |  |  |
| Jiewei Li, | 11/29/2021 | 4000 |  | 8000 | 1.96 | 09/26/2027 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer and Director | 4/11/2023 | 10000 |  | 10000 | 0.978 | 06/22/2029 |
| Xiangyu Pei, |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Director and Former Interim | 11/29/2021 | 30000 |  | 60000 | 1.96 | 09/26/2027 |
| &nbsp;&nbsp;&nbsp;Chief Financial officer | 4/11/2023 | 50000 |  | 50000 | 0.978 | 06/22/2029 |

---

**Compensation of Directors**

On April 11, 2023, pursuant to the 2015 Plan, each of our independent directors was granted 10,000 restricted share units, or RSUs, of the Company's common stock, which vested in two equal installments on June 30 and December 31, 2023, respectively. On the same date, each of our independent directors was granted an option to purchase 20,000 shares of common stock, which vest in four equal installments semi-annually with the first installment vesting on June 30, 2024, the second installment vesting on December 31, 2024, the third installment vesting on June 30, 2025 and the fourth installment vesting on December 31, 2025.

The following table sets forth the total compensation earned by our non-employee directors during our fiscal year ended December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Name** | **Fees**<br>**Earned or**<br>**Paid in**<br>**Cash**<br>**($)** |<br>**Option**<br>**Awards**<br>**($)** |<br><br>**Total**<br>**($)** |
| J. Simon Xue | 20000 | 9780 | 29780 |
| Martha C. Agee | 20000 | 9780 | 29780 |
| Jianjun He | 20000 | 9780 | 29780 |

---

We do not maintain a medical, dental or retirement benefits plan for the directors.

Except as otherwise disclosed, we have not compensated, and will not compensate our non-independent directors for serving as our directors, although they are entitled to reimbursements for reasonable expenses incurred in connection with attending our board meetings.

The directors may determine remuneration to be paid to the directors with interested members of the Board refraining from voting. The Compensation Committee will assist the directors in reviewing and approving the compensation structure for the directors.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.**

**Securities Ownership of Certain Beneficial Owners and Management**

The following table sets forth information known to us with respect to the beneficial ownership of the Company's common stock as of the close of business on March 25, 2026 (the "Reference Date") for: (i) each person known by us to beneficially own more than 5% of our voting securities, (ii) each named executive officer, (iii) each of our directors and nominees, and (iv) all of our named executive officers and directors as a group:

---

| | | |
|:---|:---|:---|
| | **<u>Amount and Nature of<br> Beneficial Ownership <sup>(1)</sup></u>** | **<u>Amount and Nature of<br> Beneficial Ownership <sup>(1)</sup></u>** |
| <br>**<u>Names of Management and Names of Certain Beneficial Owners <sup>(1)</sup></u>** | **<u>Number <sup>(2)</sup></u>** | **<u>Percent <sup>(3)</sup></u>** |
| **Officers and Directors** | | |
| Zhiguang Hu <sup>(4)</sup> | 63638 | \*% |
| J. Simon Xue <sup>(5)</sup> | 60000 | \*% |
| Martha C. Agee <sup>(5)</sup> | 80000 | \*% |
| Jianjun He <sup>(5)</sup> | 80000 | \*% |
| Xiangyu Pei <sup>(6)</sup> | 417983 | \*% |
| Jiewei Li <sup>(7)</sup> | 34000 | \*% |
| All executive officers and directors as a group (6 persons) | 735621 | \*% |
| **Principal Stockholders** |  |  |
| Gimli Group Limited <sup>(8)</sup> | 10413371 | 11.75% |

---

\* Denotes less than 1% of the outstanding shares of common stock.

(1) The number of shares beneficially owned is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power, and also any shares which the individual has the right to acquire within 60 days of the Reference Date, through the exercise or conversion of any stock option, convertible security, warrant or other right (a "Presently Exercisable" security). Including those shares in the table does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Unless otherwise indicated,
 each person or entity named in the table has sole voting power and investment power (or shares that power with that person's
 spouse) with respect to all shares of common stock listed as owned by that person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;(3) A total of 88,645,836 shares
 of common stock are considered to be outstanding on the Reference Date. For each beneficial owner above, any Presently Exercisable
 securities of such beneficial owner have been included in the denominator, pursuant to Rule 13d-3(d)(1) under the Securities Exchange
 Act of 1934, as amended, or the Exchange Act.

---

| | |
|:---|:---|
| (4) | On April 11, 2023, pursuant to the 2015 plan, the Company granted Mr. Zhiguang Hu an aggregate of 15,000 restricted share units of the Company's common stock. The share units vest in two equal installments on June 30 and December 31, 2023, respectively. |
|  | Includes a total of 30,000 outstanding options. On April 11, 2023, pursuant to the 2015 plan, the Company granted Mr. Zhiguang Hu an aggregate of 30,000 options to purchase common stock. The options vest in four equal installments semi-annually with the first installment (7500) vesting on June 30, 2024, the second installment (7500) vesting on December 31, 2024, the third installment (7500) vesting on June 30, 2025 and the fourth installment (7500) vesting on December 31, 2025. |

---

&nbsp;&nbsp;&nbsp;&nbsp;(5) On April 11, 2023, pursuant
 to the 2015 Plan, each of our independent directors was granted 10,000 restricted share units, or RSUs, of the Company's common
 stock, which vested in two equal installments on June 30 and December 31, 2023, respectively. On the same date, each of our independent
 directors was granted an option to purchase 20,000 shares of common stock, which vest in four equal installments semi-annually with
 the first installment (5,000) vesting on June 30, 2024, the second installment (5,000) vesting on December 31, 2024, the third installment
 (5,000) vesting on June 30, 2025 and the fourth installment (5,000) vesting on December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(6) On
 April 19, 2016, Ms. Pei was granted 50,000 restricted shares under the 2015 Plan. Such shares vest semi-annually in 6 equal installments
 over a three-year period with the first vesting on December 31, 2016. On August 23, 2019, pursuant to the 2015 Plan, the Company
 granted Ms. Pei an aggregate of 180,000 restricted share units of the Company's common stock. The share units vest semi-annually
 in 6 equal installments over a three-year period with the first vesting on September 30, 2019. On
 April 11, 2023, pursuant to the 2015 plan, the Company granted Ms. Xiangyu Pei an aggregate of 50,000 restricted share units of the
 Company's common stock. The share units vest in two equal installments on June 30 and December 31, 2023, respectively. Includes
 a total of 130,000 outstanding options, comprised of:

● On November 29, 2021, pursuant to the 2015 Plan, the Company granted Ms. Pei an aggregate of 150,000 performance-based stock options to purchase the Company's common stock. Subject to continued service and attainment of the performance goals relating to the Company's operating results for each of the fiscal years ending December 31, 2021, 2022, 2023, 2024 and 2025, the options will vest semi-annually in 10 equal installments over a 5-year period with the first vesting on May 30, 2022. The options will expire on the 70-month anniversary of the grant date. The performance goals for 2021 were met, resulting in vesting of 15,000 options on May 30 and November 30, 2022, respectively. However, the performance criteria for 2022, 2023, 2024 and 2025 were not met, and thus, no additional portion of the option was vested; and

● Also, on April 11, 2023, pursuant to the 2015 plan, the Company granted Ms. Xiangyu Pei an aggregate of 100,000 options to purchase common stock. The options vest in four equal installments semi-annually with the first installment (25,000) vesting on June 30, 2024, the second installment (25,000) vesting on December 31, 2024, the third installment (25,000) vesting on June 30, 2025 and the fourth installment (25,000) vesting on December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(7) On
 April 11, 2023, pursuant to the 2015 plan, the Company granted Mr. Jiewei Li an aggregate of 10,000 restricted share units of
 the Company's common stock. The share units vest in two equal installments on June 30 and December 31, 2023, respectively. Includes
 a total of 24,000 outstanding options, comprised of:

● On November 29, 2021, Mr. Jiewei Li was granted an option to purchase 20,000 shares of common stock. The option vests in 10 equal semi-annual installments based on the Company's satisfaction of certain performance criteria for each of the fiscal year ending December 31, 2021, 2022, 2023, 2024 and 2025. The performance criteria for 2021 were met, resulting in vesting of 2,000 options on each of May 30, 2022 and November 30, 2022. The performance criteria for 2022, 2023, 2024 and 2025 were not met, and thus, no additional portion of the option was vested; and

● On April 11, 2023, pursuant to the 2015 plan, the Company granted Mr. Jiewei Li an aggregate of 20,000 options to purchase common stock. The options vest in four equal installments semi-annually with the first installment (5,000) vesting on June 30, 2024, the second installment (5,000) vesting on December 31, 2024, the third installment (5,000) vesting on June 30, 2025 and the fourth installment (5,000) vesting on December 31, 2025.

(8) On December 3, 2025, Gimli Group Limited received 10,413,371 shares of common stock of the Company from Mr. Yunfei Li. Pursuant to the associated
 stock transfer agreement, the transfer was effected without consideration. The registered address of Gimli Group Limited is ICS
 Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands. Ms. Xiuzhu Li is the
 sole director of Gimli Group Limited, and has voting and dispositive power over the securities held by it.

**Changes in Control**

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

**Securities Authorized for Issuance Under Equity Compensation Plans**

***2015 Equity Incentive Plan (the "2015 Plan")***

The 2015 Plan had expired as of December 31, 2025.

The following table sets forth certain information about the securities authorized for issuance under the 2015 Plan as of December 31, 2025. Options exercisable for all of the securities shown in column (a) below were granted under our 2015 Plan. No awards were granted under the Company's 2023 Equity Incentive Plan as of December 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  |<br><br>**Number of**<br>**securities to**<br>**be issued<br> upon**<br>**exercise of**<br>**outstanding<br> options,**<br>**warrants**<br>**and rights**<br>**(a)** |<br><br><br>**Weighted-<br> average**<br>**exercise price**<br>**of outstanding<br> options,**<br>**warrants**<br>**and rights**<br>**(b)** | **Number of**<br>**securities**<br>**remaining**<br>**available for**<br>**future**<br>**issuance<br> under equity**<br>**compensation**<br>**plans<br> (excluding**<br>**securities**<br>**reflected in**<br>**column** |
| Equity compensation plans approved by security holders | 2066458 | $1.24 | 2552415 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 2066458 | $1.24 | 2552415 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Amounts include 80,000
 outstanding options.

&nbsp;&nbsp;&nbsp;&nbsp;(b) The weighted-average exercise
 price is calculated based solely on the exercise price of the outstanding options and does not reflect shares that will be issued
 upon the vesting of outstanding RSUs, which have no exercise price.

On June 12, 2015, shareholders of the Company approved 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 2015 Plan is ten million (10,000,000) shares.

On June 30, 2015, pursuant to the 2015 Plan, the Company granted an aggregate of 690,000 restricted shares of the Company's common stock to certain employees, officers and directors of the Company. In accordance with the vesting schedule of the grant, the restricted shares vest in twelve equal quarterly installments on the last day of each fiscal quarter beginning on June 30, 2015 and ending on March 31, 2018.

On April 19, 2016, pursuant to the 2015 Plan, the Company granted an aggregate of 500,000 restricted shares of the Company's common stock to certain employees, officers and directors of the Company. The restricted shares vest semi-annually in 6 equal installments over a three-year period with the first vesting on December 31, 2016.

On August 23, 2019, pursuant to the 2015 plan, the Company granted an aggregate of 1,887,000 restricted share units of the Company's common stock to certain employees, officers and directors of the Company. There are two types of vesting schedules, (i) the share units will vest semi-annually in 6 equal installments over a three-year period with the first vesting on September 30, 2019; (ii) the share units will vest annually in 3 equal installments over a three-year period with the first vesting on March 31, 2020.

On October 23, 2020, pursuant to the Company's 2015 Plan, the Compensation Committee granted an aggregate of 100,000 restricted share units of the Company's common stock to an employee of the Company. The restricted shares will vest semi-annually in six equal installments over a three-year period with the first vesting on October 30, 2020.

On November 29, 2021, pursuant to the 2015 Plan, the Compensation Committee granted an aggregate of 2,750,002 performance-based stock options to purchase the Company's common stock to certain employees, officers and directors of the Company. Subject to continued service and attainment of the performance goals, these options will vest 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.

On April 11, 2023, pursuant to the 2015 Plan, the Compensation Committee granted an aggregate of (i) 894,000 restricted share units and (ii) 2,124,000 options to purchase the Company's common stock, to certain employees, officers and directors of the Company. Such restricted share units vested in two equal installments on June 30 and December 31, 2023, respectively. The options vest in four equal installments semi-annually with the first installment vesting on June 30, 2024.

On August 22, 2023, pursuant to the 2015 Plan, the Compensation Committee granted an aggregate of (i) 40,000 restricted share units and (ii) 160,000 options to purchase the Company's common stock, to two employees. Such restricted share units vest in two equal installments on October 15, 2023 and April 15, 2024, respectively. The options vest in four equal installments semi-annually with the first installment vesting on February 15, 2025.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.**

**Transactions with Related Persons**

The following is a summary of reportable transactions in which we were or are to be a participant, and in which any related person had or will have a direct or indirect material interest (other than compensation described under the section "Executive Compensation").

---

| | |
|:---|:---|
| **Name of Entity or Individual** | **Relationship with the Company** |
| New Era Group Zhejiang New Energy Materials Co., Ltd. | Shareholder of company's subsidiary |
| Shenzhen Bak New Material Technology Co., Ltd | Note a |
| Zhengzhou BAK Battery Co., Ltd ("Zhenghzhou BAK") | Note b |
| Shenzhen BAK Battery Co., Ltd ("SZ BAK") | Former subsidiary and refer to Note c, d |
| Shenzhen BAK Power Battery Co., Ltd ("BAK SZ") | Former subsidiary and refer to Note c, d |
| Zhejiang Shengyang Renewable Resources Technology Co., Ltd. ("Zhejiang Shengyang") | Note e |
| Fuzhou BAK Battery Co., Ltd ("Fuzhou Bak") | Note d, f |
| Zhengzhou BAK Electronics Co., Ltd | Note d, g |
| Zhengzhou BAK New Energy Vehicle Co., Ltd | Note h |
| Shenzhen BAK Medical Technology Co., Ltd ("SZ BAK Medical") | Note d, i |

---

(a) Ms. Xiuzhu Li, one of the major shareholder of CBAK effective from December 3, 2025, is the major shareholder of Shenzhen BAK New Material Technology Co., Ltd, holding 46.32% equity interest.

(b) Mr. Xiangqian Li, the Company's former CEO, is a director of Zhengzhou BAK and Zhengzhou BAK is a wholly owned subsidiary of BAK SZ.

(c) Mr. Xiangqian Li, the Company's former CEO, is a director of SZ BAK and BAK SZ. SZ BAK and BAK SZ were the former subsidiaries of the Company.

(d) An immediate family member of Ms. Xiuzhu Li has major interests in serval entities set forth in the above table.

(e) Hitrans
 has 26% equity interest in Zhejiang Shengyang.

(f) Zhengzhou
 BAK has 51% equity interest in Fuzhou BAK.

(g) BAK
 SZ has 100% equity interests in Zhengzhou BAK Electronics Co., Ltd.

(h) SZ
 BAK was the former shareholder of Zhengzhou BAK New Energy Vehicle Co., Ltd to April 10, 2023.

(i) SZ
 BAK Medical is a wholly owned subsidiary of SZ BAK.

**<u>Related party transactions</u>**

The Company entered into the following significant related party transactions:

---

| | | |
|:---|:---|:---|
|  | ***For the <br> year ended<br> December 31,<br> 2024*** | ***For the<br> year ended<br> December 31,<br> 2025*** |
| Purchase of batteries from Zhengzhou BAK | $7049867 | $6628052 |
| Purchase of batteries from Fuzhou BAK | 69133 | 302809 |
| Purchase of materials from Zhejiang Shengyang | 4352197 | 5452798 |
| Sub-contracting services provided by Fuzhou BAK |  | 1783617 |
| Purchase of materials from Shenzhen BAK New Material Technology Co., Ltd |  | 798972 |
| Purchase of materials from SZ BAK Medical |  | 370224 |
| Purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service | 1794581 |  |
| Sales of cathode raw materials to Zhengzhou BAK | 18661537 | 15196930 |
| Sales of cathode raw materials to BAK SZ | 31783 | 11388 |
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd | 388430 | 908156 |
| Sales of cathode raw materials to Zhengzhou BAK in relation to non-operating agency-based service |  | 2248560 |
| Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd in relation to non-operating agency-based service |  | 134252 |
| Sales of cathode raw materials to BAK SZ in relation to non-operating agency-based service |  | 4805 |
| Sales of batteries to Fuzhou BAK | 76090 |  |
| Sales of batteries to Zhengzhou BAK | 12232 | 1933 |

---

**<u>Related party balances</u>**

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

*<u>Receivables from former subsidiary</u>*

---

| | | |
|:---|:---|:---|
|  | ***December 31, <br> 2024*** | ***December 31,<br> 2025*** |
| Receivables from BAK SZ | $12399 | $4389 |

---

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

*<u>Other balances due from/ (to) related parties</u>*

---

| | | |
|:---|:---|:---|
|  | ***December 31,<br> 2024*** | ***December 31,<br> 2025*** |
| Trade receivable, net – Zhengzhou BAK (i) | $5970184 | $4836152 |
| Trade receivable, net – Zhengzhou BAK Electronics Co., Ltd. (i) | $135012 | $237446 |
| Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (ii) | $459905 | $- |
| Prepayment to supplier – Zhengzhou BAK (iii) | $3738228 | $- |
| Prepayment to supplier – Zhengzhou BAK New Energy Vehicle Co., Ltd (iv) | $205496 | $- |
| Trade payable, net – Zhengzhou BAK (v) | $66084 | $4453603 |
| Trade payable, net – Zhejiang Shengyang (vi) | $1486765 | $1136860 |
| Trade payable, net - Shenzhen BAK New Material Technology Co., Ltd (vi) | $147210 | $164887 |
| Trade payable, net – SZ BAK Medical (vi) | $- | $428572 |
| Payable for non-operating agency-based service – Zhejiang Shengyang (vii) | $1338794 | $- |
| Deposit paid for acquisition of long-term investments – BAK SZ | $15864318 | $16503014 |
| Dividend payable to non-controlling interest of Hitrans | $1221915 | $1271109 |

---

(i) Representing
 trade receivable from sales of cathode raw materials.

(ii) Representing
 bills receivable issued by Zhengzhou BAK as of December 31, 2024 were pledged to bank as security for issuance of bills payable.

(iii) Representing
 the prepayments to Zhengzhou BAK for purchase of batteries.

(iv) 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.

(v) Representing
 trade payables on purchase of batteries.

(vi) Representing
 trade payables on purchase of materials for manufacturing.

(vii) Representing
 payables on purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service.

*<u>Payables to a former subsidiary</u>*

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

---

| | | |
|:---|:---|:---|
|  | ***December 31,*** | ***December 31,*** |
|  | ***2024*** | ***2025*** |
| Payables to BAK SZ | $(419849) | $(407506) |

---

Balance as of December 31, 2024 and 2025 consisted of payables for purchase of inventories.

**Promoters and Certain Control Persons**

We did not have any promoters at any time during the past five fiscal years.

**Director Independence**

J. Simon Xue, Martha C. Agee and Jianjun He each serves on our Board as an "independent director" as defined by Rule 5605(a)(2) of the NASDAQ Listing Rule.

**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**

***Audit Fees***

ARK billed us $479,000 and $615,000 for the fiscal year ended December 31, 2024 and 2025 for professional services rendered for the audit of our annual financial statements, including reviews of the interim financial statements included in our quarterly reports on Form 10-Q.

***Audit-Related Fee****s*

The fees for the audit-related services billed and to be billed by ARK for the year ended December 31, 2024 and 2025 amounted to $25,000 and $25,000.

***Tax Fees***

We did not engage our principal accountants to provide tax compliance, tax advice or tax planning services during the last two fiscal years.

***All Other Fees***

We did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.

**Pre-Approval Policies and Procedures**

All auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by our independent auditors must be approved by the Audit Committee in advance, except non-audit services (other than review and attestation services) if such services fall within exceptions established by the SEC. The Audit Committee will pre-approve any permissible non-audit services to be provided by the Company's independent auditors on behalf of the Company that do not fall within any exception to the pre-approval requirements established by the SEC. The Audit Committee may delegate to one or more members the authority to pre-approve permissible non-audit services, but any such delegate or delegates must present their pre-approval decisions to the Audit Committee at its next meeting. All of our accountants' services described above were pre-approved by the Audit Committee or by one or more members under the delegate authority described above.

**PART IV**

**ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.**

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **List of Documents Filed as a Part of This Report:** 

&nbsp;&nbsp;&nbsp;&nbsp;(1) Consolidated Financial
 Statements:

The financial statements are set forth under Item 8 of this annual report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Financial Statement Schedules:

Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included in the consolidated financial statements or notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Index to Exhibits

See exhibits listed under Item 15(b) below.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Exhibits:** 

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 2.1 | [Articles of Merger (incorporated by reference to Exhibit 2.1 to the registrant's Current Report on Form 8- K filed on January 17, 2017)](http://www.sec.gov/Archives/edgar/data/1117171/000106299317000243/exhibit2-1.htm) |
| 3.1 | [Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant's Annual Report on Form 10-K filed on December 8, 2006)](http://www.sec.gov/Archives/edgar/data/1117171/000127528706006401/cb8173ex31.htm) |
| 3.2 | [By-laws of the registrant (incorporated by reference to Exhibit 3.2 to the registrant's Annual Report on Form 10-K filed on December 19, 2007)](http://www.sec.gov/Archives/edgar/data/1117171/000114420407068207/v097140_ex3-2.htm) |
| 3.3 | [Certificate of Change Pursuant to NRS 78.209 filed by the Company on October 22, 2012 (incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on October 26, 2012)](http://www.sec.gov/Archives/edgar/data/1117171/000106299312004303/exhibit3-1.htm) |
| 3.4 | [Certificate of Amendment to Articles of Incorporation filed by the Company on June 23, 2015 (incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on June 26, 2015)](http://www.sec.gov/Archives/edgar/data/1117171/000106299315003597/exhibit3-1.htm) |
| 3.5 | [Certificate of Amendment to Articles of Incorporation filed by the Company on December 9, 2021 (incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on December 13, 2021)](http://www.sec.gov/Archives/edgar/data/1117171/000121390021064962/ea152183ex3-1_cbakenergy.htm) |
| 4.1 | [Description of Securities Registered Pursuant to Section 12 of the Exchange Act](ea028334901ex4-1.htm) |
| 10.1 | [Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form8-K filed on January 3, 2011)](http://www.sec.gov/Archives/edgar/data/1117171/000114420411000196/v206993_ex10-1.htm) |
| 10.2 | [CBAK Energy Technology, Inc. 2015 Equity Incentive Plan (incorporated by reference to Appendix D to the registrant's Definitive Proxy Statement on Schedule 14A filed April 24, 2015).](http://www.sec.gov/Archives/edgar/data/1117171/000106299315002157/def14a.htm) |
| 10.3 | [Form of Restricted Share Units Award Agreement Under 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on August 29, 2019)](http://www.sec.gov/Archives/edgar/data/1117171/000121390019016949/f8k082319ex10-1_cbak.htm) |
| 10.4 | [Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 99.1 to the registrant's Current Report on Form 8-K filed on July 6, 2015)](http://www.sec.gov/Archives/edgar/data/1117171/000106299315003703/exhibit99-1.htm) |
| 10.5 | [English translation of Framework Agreement Relating to Dalian CBAK Power Battery Co., Ltd.'s Investment in Zhejiang Meidu Hitrans Lithium Battery Technology Co., Ltd., dated July 20, 2021 (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on July 26, 2021)](http://www.sec.gov/Archives/edgar/data/1117171/000121390021038526/ea144728ex10-1_cbakenergy.htm) |
| 10.6 | [CBAK Energy Technology, Inc. 2023 Equity Incentive Plan (incorporated by reference to Appendix A to the registrant's Definitive Proxy Statement on Schedule 14A filed on October 20, 2023)](http://www.sec.gov/Archives/edgar/data/1117171/000101376223005464/ea186987-def14a_cbakenergy.htm) |
| 10.7 | [Form of Restricted Share Award Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 to the registrant's Annual Report on Form 10-K filed on March 15, 2024)](https://www.sec.gov/Archives/edgar/data/1117171/000121390024023050/ea020151201ex10-10_cbak.htm) |
| 10.8 | [Form of Restricted Stock Unit Award Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 to the registrant's Annual Report on Form 10-K filed on March 15, 2024)](https://www.sec.gov/Archives/edgar/data/1117171/000121390024023050/ea020151201ex10-11_cbak.htm) |
| 10.9 | [Form of Share Option Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 to the registrant's Annual Report on Form 10-K filed on March 15, 2024)](https://www.sec.gov/Archives/edgar/data/1117171/000121390024023050/ea020151201ex10-12_cbak.htm) |
| 10.10 | [Agreement and Plan of Merger by and between CBAK Energy Technology, Inc. and CBAK Energy Technology Limited, dated September 23, 2025 (incorporated by reference to Exhibit 2.1 to the registrant's Current Report on Form 8-K filed on September 24, 2025)](http://www.sec.gov/Archives/edgar/data/1117171/000121390025090854/ea025855801ex2-1_cbak.htm) |

---

---

| | |
|:---|:---|
| 14.1 | [Code of Business Conduct and Ethics of the registrant (incorporated by reference to Exhibit 14.1 to the registrant's Quarterly Report on Form 10-Q filed on August 22, 2006)](http://www.sec.gov/Archives/edgar/data/1117171/000119312506177328/dex141.htm) |
| 19 | [Insider Trading Policy of the registrant (incorporated by reference to Exhibit 19 to the registrant's Annual Report on Form 10-K filed on March 17, 2025)](http://www.sec.gov/Archives/edgar/data/1117171/000121390025024539/ea023411801ex19_cbakenergy.htm) |
| 21.1 | [List of subsidiaries of the registrant.](ea028334901ex21-1.htm) |
| 23.1 | [Consent of ARK Pro CPA & Co](ea028334901ex23-1.htm) |
| 31.1 | [Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028334901ex31-1.htm) |
| 31.2 | [Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028334901ex31-2.htm) |
| 32.1 | [Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028334901ex32-1.htm) |
| 32.2 | [Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028334901ex32-2.htm) |
| 97.1 | [Clawback Policy (incorporated by reference to Exhibit 97.1 to the registrant's Annual Report on Form 10-K filed on March 15, 2024)](https://www.sec.gov/Archives/edgar/data/1117171/000121390024023050/ea020151201ex97-1_cbak.htm) |
| 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). |

---

**(c) Financial Statement Schedule**

See Item 15(a) above.

**ITEM 16. FORM 10-K SUMMARY**

None.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) 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: March 31, 2026

**CBAK ENERGY TECHNOLOGY, INC.**

---

| | |
|:---|:---|
| By: | /s/ Zhiguang Hu |
|  | Zhiguang Hu |
|  | Chief Executive Officer |

---

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Zhiguang Hu | Chief Executive Officer | March 31, 2026 |
| Zhiguang Hu | (Principal Executive Officer) |  |
| /s/ Jiewei Li | Chief Financial Officer and Director | March 31, 2026 |
| Jiewei Li | (Principal Financial and Accounting Officer) |  |
| /s/ J. Simon Xue | Director | March 31, 2026 |
| J. Simon Xue |  |  |
| /s/ Martha C. Agee | Director | March 31, 2026 |
| Martha C. Agee |  |  |
| /s/ Jianjun He | Director | March 31, 2026 |
| Jianjun He |  |  |
| /s/ Xiangyu Pei | Director | March 31, 2026 |
| Xiangyu Pei |  |  |

---

 ****

## Exhibit 4.1

**Exhibit 4.1**

**DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE EXCHANGE ACT**

The following summary describes our common stock, par value $0.001 per share (the "Common Stock"), of CBAK Energy Technology, Inc. (the "Company," "we," "us," and "our"), which are the only securities of the Company registered pursuant to Section 12 of the Exchange Act.

**DESCRIPTION OF COMMON STOCK**

The following summary describes the material terms of our Common Stock. This summary does not purport to be complete and is qualified in its entirety by reference to our Articles of Incorporation, Certificate of Change Pursuant to NRS 78.209, Certificate of Amendment to Articles of Incorporation filed on June 23, 2015, Certificate of Amendment to Articles of Incorporation filed on December 9, 2021, Articles of Merger and By-laws incorporated by reference as Exhibits 3.1, 3.3, 3.4, 3.5, 2.1 and 3.2, respectively, to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to read the foregoing exhibits and the applicable provisions of the Nevada Revised Statutes, Chapter 78, for a complete description of our Common Stock.

**Authorized Capital Stock**

The Company is authorized to issue up to 500,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share (the "Preferred Stock"). The Common Stock may be issued from time to time for such consideration as may be fixed by the Board of Directors, provided that the consideration fixed is not less than par value.

The Board of Directors is authorized, at any time and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series with such designations, preferences, voting powers and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed in the resolution or resolutions providing for the issuance of such Preferred Stock adopted by the Board of Directors, and as are not stated and expressed in the Company's articles of incorporation or any amendment thereto. As of December 31, 2025, there were 88,645,836 shares of Common Stock and no Preferred Stock outstanding.

**Voting Rights**

Each outstanding share of Common Stock entitles the holder thereof to one vote per share on all matters coming before the stockholders for a vote. Our articles of incorporation do not permit cumulative voting for the election of directors. Likewise, our articles of incorporation do not vary the size of the vote necessary for the stockholders to act on various matters from the size of the vote required by Nevada law, which means, unless a different vote is required by express provisions of Nevada law, an action by the stockholders on a matter other than the election of directors shall be approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. The directors of a Nevada corporation are elected at the annual meeting of the stockholders by a plurality of the votes cast at the election.

**Dividends**

The holders of shares of our Common Stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend or otherwise authorized any cash or other distribution with respect to the shares of our Common Stock and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into dollars or other hard currency and other regulatory restrictions.

**Liquidation**

In the event of our liquidation, dissolution or winding up, holders of our Common Stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.

**Rights and Preferences**

Our Common Stock has no preemptive or subscription rights, and no redemption, sinking fund, or conversion provisions.

**Fully Paid and Nonassessable**

All of the issued and outstanding shares of our Common Stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our Common Stock are issued, the relative interests of existing stockholders will be diluted.

**Anti-takeover Effects of Our Articles of Incorporation and Bylaws**

Our articles of incorporation and bylaws, as amended, contain certain provisions that may have the effect of entrenching our existing board members, delaying, deferring or preventing a future takeover or change in control of the company unless such takeover or change in control is approved by the board of directors. These provisions include:

● *Special Meetings of Stockholders* — Our articles of incorporation provide that special meetings of the stockholders can only be called by our president or any other executive officer, or the board of directors, or any member thereof, the record holder or holders of at least 10% of all shares entitled to vote at the meeting, and our bylaws provide that a special meeting will be called by the president or secretary at the written request of our stockholders holding not less than 30% of all the shares issued, outstanding and entitled to vote.

● *Advance Notice Procedures* — At an annual meeting, our stockholders elect a board of directors and transact such other business as may properly be brought before the meeting. By contrast, at a special meeting, our stockholders may transact only the business for the purposes specified in the notice of the meeting unless all of our stockholders entitled to vote are present at the special meeting and consent.

● *Contracts and Transactions with Interested Directors* — We may enter into a contract or a transaction with an entity in which our directors or officers have a financial or other interest as long as such relationship has been disclosed to, or is known by, our board of directors, or is otherwise fair to the Company at the time it is authorized or approved.

● *Amendment of Bylaws* — Our Bylaws may be amended by our board of directors alone.

● *Authorized but Unissued Shares* — Our board of directors may cause us to issue our authorized but unissued shares of Common Stock or Preferred Stock in the future without stockholders' approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of a majority of the voting power of our outstanding capital stock by means of a proxy contest, tender offer, merger or otherwise.

**Anti-Takeover Effects of Nevada Law**

*Nevada Business Combination Statute*

We are subject to the "business combination" provisions of Sections 78.411 to 78.444 of the Nevada Revised Statutes. In general, such provisions prohibit a Nevada corporation with at least 200 stockholders from engaging in various "combination" transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status or the combination is approved by the board of directors and thereafter is approved at a meeting of stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders, and extends beyond the expiration of the two-year period, unless (a) the combination was approved by the board of directors prior to the person becoming an interested stockholder; (b) the transaction by which the person first became an interested stockholder was approved by the board of directors before the person became an interested stockholder; (c) the combination is later approved by a majority of the voting power held by disinterested stockholders; or (d) if the consideration to be paid by the interested stockholder is at least equal to the highest of: (i) the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, or (ii) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher.

A "combination" is generally defined to include mergers or consolidations or any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an "interested stockholder" or any affiliate or associate of an interested stockholder having: (a) an aggregate market value equal to more than 5% of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to more than 5% of the aggregate market value of all outstanding voting shares of the corporation, and (c) more than 10% of the earning power or net income of the corporation.

An "interested stockholder" is generally defined to mean a beneficial owner of at least 10% of the outstanding voting power or an affiliate or associate of the corporation that has been a 10% beneficial owner within the preceding 2 years. The statutes could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

*Nevada Acquisition of Controlling Interest Statute*

Nevada's Acquisition of Controlling Interest Statute (NRS Sections 78.378-78.3793) applies only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, which conduct business directly or indirectly in Nevada and whose articles of incorporation or bylaws in effect 10 days following the acquisition of a controlling interest by an acquiror do not prohibit its application. As of the date of this prospectus, we do not believe we have 100 stockholders of record who are residents of Nevada, although there can be no assurance that in the future the acquisition of controlling interest statutes will not apply to us.

Nevada's Acquisition of Controlling Interest Statute, prohibits an acquiror, under certain circumstances, from voting shares of a target corporation's stock after crossing certain threshold ownership percentages, unless the acquiror obtains the approval of the target corporation's stockholders. The statute specifies three thresholds that constitute a controlling interest: (a) at least one-fifth but less than one-third; (b) at least one-third but less than a majority; and (c) a majority or more, of the outstanding voting power. Once an acquiror crosses one of these thresholds, shares which it acquired in the transaction exceeding the threshold (or within ninety days preceding the date thereof) become "control shares" which could be deprived of the right to vote until a majority of the disinterested stockholders restore that right.

A special stockholders meeting may be called at the request of the acquiror to consider the voting rights of the acquiror's shares. If the acquiror requests a special meeting and gives an undertaking to pay the expenses of said meeting, then the meeting must take place no earlier than 30 days (unless the acquiror requests that the meeting be held sooner) and no more than 50 days (unless the acquiror agrees to a later date) after the delivery by the acquiror to the corporation of an information statement which sets forth the range of voting power that the acquiror has acquired or proposes to acquire and certain other information concerning the acquiror and the proposed control share acquisition.

If no such request for a stockholders meeting is made, consideration of the voting rights of the acquiror's shares must be taken at the next special or annual stockholders meeting. If the stockholders fail to restore voting rights to the acquiror, or if the acquiror fails to timely deliver an information statement to the corporation, then the corporation may, if so provided in its articles of incorporation or bylaws, call certain of the acquiror's shares for redemption at the average price paid for the control shares by the acquiror.

In the event the stockholders restore full voting rights to a holder of control shares that owns a majority of the voting stock, then all other stockholders who do not vote in favor of restoring voting rights to the control shares may demand payment for the "fair value" of their shares as determined by a court in dissenters rights proceeding pursuant to Chapter 92A of the Nevada Revised Statutes.

**Listing**

Our Common Stock is listed on Nasdaq Capital Market under the symbol "CBAT."

**Transfer Agent and Registrar**

Our transfer agent and registrar is Securities Transfer Corporation, 2901 N Dallas Parkway, Suite 380, Plano, Texas 75093.

**Warrants**

As of December 31, 2025, the Company had no outstanding warrants.

## Exhibit 21.1

**Exhibit 21.1**

**LIST OF SUBSIDIARIES**

---

| | | |
|:---|:---|:---|
| <br>**Name of Subsidiary** | **Jurisdiction of**<br>**Incorporation or**<br>**Organization** | <br>**Percentage of**<br>**Ownership** |
| CBAK Energy Investments Holdings | Cayman Islands | 100% |
| CBAK Energy Lithium Battery Holdings Co., Ltd. | Cayman Islands | 100% |
| CBAK Energy Technology Limited | Cayman Islands | 100% |
| CBAK Energy C.A. Inc. | California, the United States | 100% |
| BAK Asia Investments Limited | Hong Kong | 100% |
| CBAK New Energy (Nanjing) Co., Ltd | PRC | 100% |
| Shenzhen CBAK Sodium Battery New Energy Co., Ltd. | PRC | 100% |
| Nanjing BFD New Energy Technology Co., Ltd. | PRC | 100% |
| Nanjing CBAK New Energy Technology Co., Ltd | PRC | 100% |
| CBAK New Energy (Suzhou) Co., Ltd. | PRC | 90% |
| China BAK Asia Holdings Limited | Hong Kong | 100% |
| Dalian CBAK Energy Technology Co., Ltd. | PRC | 100% |
| Dalian CBAK Power Battery Co., Ltd. | PRC | 100% |
| CBAK New Energy (Shangqiu) Co., Ltd. | PRC | 100% |
| CBAK Energy Lithium Battery Malaysia Sdn. Bhd. | Malaysia | 100% |
| Hitrans Holdings Co., Ltd. | Cayman Islands | 100% |
| Hong Kong Hitrans Holdings Company Limited | Hong Kong | 100% |
| Dalian CBAK New Energy Co., Ltd. | PRC | 100% |
| Zhejiang Hitrans Lithium Battery Technology Co., Ltd ("Hitrans") | PRC | 67.33% |
| Anhui Yuanchuang New Energy Materials Co., Ltd. | PRC | 100% owned by Hitrans |
| Shaoxing Haisheng International Trading Co., Ltd. | PRC | 100% owned by Hitrans |

---

## Exhibit 23.1

**Exhibit 23.1**

![](ea028334901_ex23-1img1.jpg)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-280746) and the Registration Statements on Form S-8 (File No. 333-137747, No. 333-153649, No. 333-153650, No. 333-205218 and No. 333-278741) of CBAK Energy Technology, Inc. (the "Company") of our report dated March 31, 2026, relating to the Company's consolidated financial statements (which report expresses an unqualified opinion with an emphasis paragraph on the substantial doubt about the Company's ability to continue as a going concern) and the effectiveness of the Company's internal control over financial reporting, which appears in this Annual Report on Form 10-K of the Company for the year ended December 31, 2025.

/s/ ARK Pro CPA & Co

ARK Pro CPA & Co

Hong Kong, China

March 31, 2026

![](ea028334901_ex23-1img2.jpg)

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS**

I, Zhiguang Hu, certify that:

1. I have reviewed this annual report on Form 10-K of CBAK Energy
Technology, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| Date: March 31, 2026 |
| /s/ Zhiguang Hu |
| Zhiguang Hu |
| Chief Executive Officer |
| *(Principal Executive Officer)* |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS**

I, Jiewei Li, certify that:

1. I have reviewed this annual report on Form 10-K of CBAK Energy
Technology, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 31, 2026

---

| |
|:---|
| /s/ Jiewei Li |
| Jiewei Li |
| Chief Financial Officer |
| *(Principal Financial and Accounting Officer)* |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned, Zhiguang Hu, the Chief Executive Officer of CBAK ENERGY TECHNOLOGY, INC. (the "Company"), DOES HEREBY CERTIFY that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2025 (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;2. Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement on this 31st day of March, 2026.

---

| |
|:---|
| /s/ Zhiguang Hu |
| Zhiguang Hu |
| Chief Executive Officer |
| *(Principal Executive Officer)* |

---

A signed original of this written statement required by Section 906 has been provided to CBAK Energy Technology, Inc. and will be retained by CBAK Energy Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned, Jiewei Li, the Chief Financial Officer of CBAK ENERGY TECHNOLOGY, INC. (the "Company"), DOES HEREBY CERTIFY that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2025 (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;2. Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement this 31st day of March, 2026.

---

| |
|:---|
| /s/ Jiewei Li |
| Jiewei Li |
| Chief Financial Officer |
| *(Principal Financial and Accounting Officer)* |

---

A signed original of this written statement required by Section 906 has been provided to CBAK Energy Technology, Inc. and will be retained by CBAK Energy Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.