| Principal Activities, Basis of Presentation and Organization | 1. Principal Activities, Basis of Presentation
and Organization Principal Activities CBAK Energy Technology, Inc. (formerly known as China BAK
Battery, Inc.) (“CBAK” or the “Company”) is a corporation formed in the State of Nevada on October 4, 1999 as
Medina Copy, Inc. The Company changed its name to Medina Coffee, Inc. on October 6, 1999 and subsequently changed its name to China BAK
Battery, Inc. on February 14, 2005. CBAK and its subsidiaries (hereinafter, collectively referred to as the “Company”) are
principally engaged in the manufacture, commercialization and distribution of a wide variety of standard and customized lithium ion (known
as “Li-ion” or “Li-ion cell”) high power rechargeable batteries. Prior to the disposal of BAK International Limited
(“BAK International”) and its subsidiaries (see below), the batteries produced by the Company were for use in cellular telephones,
as well as various other portable electronic applications, including high-power handset telephones, laptop computers, power tools, digital
cameras, video camcorders, MP3 players, electric bicycles, hybrid/electric vehicles, and general industrial applications. After the disposal
of BAK International and its subsidiaries on June 30, 2014, the Company will focus on the manufacture, commercialization and distribution
of high power lithium ion rechargeable batteries for use in cordless power tools, light electric vehicles, hybrid electric vehicles, electric
cars, electric busses, uninterruptable power supplies and other high power applications. The shares of the Company traded in the over-the-counter market
through the Over-the-Counter Bulletin Board from 2005 until May 31, 2006, when the Company obtained approval to list its common stock
on The NASDAQ Global Market, and trading commenced that same date under the symbol “CBAK”. On January 10, 2017, the Company filed Articles of Merger
with the Secretary of State of Nevada to effectuate a merger between the Company and the Company’s newly formed, wholly owned subsidiary,
CBAK Merger Sub, Inc. (the “Merger Sub”). According to the Articles of Merger, effective January 16, 2017, the Merger Sub
merged with and into the Company with the Company being the surviving entity (the “Merger”). As permitted by Chapter 92A.180
of Nevada Revised Statutes, the sole purpose of the Merger was to effect a change of the Company’s name. Effective November 30, 2018, the trading symbol for common
stock of the Company was changed from CBAK to CBAT. Effective at the opening of business on June 21, 2019, the Company’s common
stock started trading on the Nasdaq Capital Market. Basis of Presentation and Organization On November 6, 2004, BAK International, a non-operating holding
company that had substantially the same shareholders as Shenzhen BAK Battery Co., Ltd (“Shenzhen BAK”), entered into a share
swap transaction with the shareholders of Shenzhen BAK for the purpose of the subsequent reverse acquisition of the Company. The share
swap transaction between BAK International and the shareholders of Shenzhen BAK was accounted for as a reverse acquisition of Shenzhen
BAK with no adjustment to the historical basis of the assets and liabilities of Shenzhen BAK. On January 20, 2005, the Company completed a share swap transaction
with the shareholders of BAK International. The share swap transaction, also referred to as the “reverse acquisition” of the
Company, was consummated under Nevada law pursuant to the terms of a Securities Exchange Agreement entered by and among CBAK, BAK International
and the shareholders of BAK International on January, 2005. The share swap transaction has been accounted for as a capital-raising transaction
of the Company whereby the historical financial statements and operations of Shenzhen BAK are consolidated using historical carrying amounts. Also on January 20, 2005, immediately prior to consummating
the share swap transaction, BAK International executed a private placement of its common stock with unrelated investors whereby it issued
an aggregate of 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”), 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, 2015 amounted
to 73,749 shares. Share payments to date have been made in reliance upon the exemptions from registration provided by Section 4(a)(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 September 30, 2022, 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 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. Up to the date of this report, the Company has contributed $2,435,000 to CBAK Trading in
cash. 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 paid in full to CBAK Power through injection of a series of patents and cash. 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. 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. Up to the date of this report, the Company has contributed $23,519,880 to CBAK Energy. 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. On July 31, 2020, BAK Investments formed a wholly owned
subsidiary CBAK New Energy (Nanjing) Co., Ltd. (“CBAK Nanjing”) in China with a registered capital of $100,000,000. Pursuant
to CBAK Nanjing’s articles of association and relevant PRC regulations, BAK Investments was required to contribute the capital
to CBAK Nanjing on or before July 29, 2040. On May 13, 2022, CBAK Nanjing’s registered capital was further increased to $200,000,000
with the same paid up date. Up to the date of this report, the Company has contributed $55,289,915 to CBAK Nanjing. On August 6, 2020, Nanjing CBAK New Energy Technology Co., Ltd. (“Nanjing
CBAK”) was established as a wholly owned subsidiary of CBAK Nanjing with a registered capital of RMB700,000,000 (approximately
$98 million). Pursuant to Nanjing CBAK’s articles of association and relevant PRC regulations, CBAK Nanjing was required to contribute
the capital to Nanjing CBAK on or before August 5, 2040. Up to the date of this report, the Company has contributed RMB352,538,138 (approximately
$49.5 million) to Nanjing CBAK through injection of a series of cash and machines. On November 9, 2020, Nanjing Daxin New Energy Automobile Industry
Co., Ltd (“Nanjing Daxin”) was established as a wholly owned subsidiary of CBAK Nanjing with a register capital of RMB50,000,000
(approximately $7.0 million). Up to the date of this report, the Company has contributed RMB37,000,000 (approximately $5.2 million) to
Nanjing Daxin. 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 $1.4 million (RMB9,000,000) to acquire
9.74% of the equity interests of DJY. CBAK Power has appointed one director to the Board of Directors of DJY. DJY is an unrelated third
party of the Company engaging in researching and manufacturing of raw materials and equipment. On August 4, 2021, Daxin New Energy Automobile Technology
( Jiangsu) Co., Ltd (“Jiangsu Daxin”) was established as a wholly owned subsidiary of Nanjing CBAK with a register capital
of RMB 30,000,000 (approximately $4.7 million). Pursuant to Jiangsu Daxin’s articles of association and relevant PRC regulations,
Nanjing Daxin was required to contribute the capital to Jiangsu Daxin on or before July 30, 2061. Up to the date of this report the Company
has contributed RMB11,584,000 (approximately to $1.7 million) to Jiangsu Daxin. 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 11). 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 $6.2 million) and to accept an investment of RMB22 million (approximately $3.1 million) from Shaoxing Haiji Enterprise
Management & Consulting Partnership (“Shaoxing Haiji”) and an investment of RMB18 million (approximately $2.5 million)
from Mr. Haijun Wu (collectively “management shareholder”). Under the resolution, 10% of the investment injection (RMB4 million
or $0.5 million) will be contributed towards Hitrans’s registered capital and the remaining 90% (RMB36 million or $5.1 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. As of September 30, 2022, RMB10 million (approximately $1.4 million), representing the 25% of the
investments were received. The other 25% of the investments (RMB10 million) and the 50% balance (RMB20 million) were required to be received
before December 31, 2022 and June 30, 2024, respectively. CBAK Power has injected RMB20 million (approximately $2.8 million) to Hitrans
subsequent to the new investment, representing RMB2 million ($0.3 million) towards Hitrans’s registered capital and RMB18 million
($2.5 million) as additional paid-in capital contribution of Hitrans . As of September 30, 2022, CBAK Power’s equity interests in
Hitrans was 74.15% and representing 74.72% of paid up capital. Subsequent to September 30, 2022, CBAK Power has further inject RMB35
million (approximately $4.9 million) to Hitrans, representing RMB3.5 million ($0.5 million) towards Hitrans’s registered capital
and RMB31.5 million ($4.4 million) towards Hitrans additional paid-in capital. As of the report date, CBAK Power’s equity interests
in Hitrans was 74.15%, representing 77.25% of paid-up capital . On July 6, 2018, Guangdong Meidu Hitrans Resources Recycling
Technology Co., Ltd. (“Guangdong Hitrans”) was established as a 80% owned subsidiary of Hitrans with a registered capital
of RMB10 million (approximately $1.6million). 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. On October 9, 2021, Shaoxing Haisheng International Trading
Co., Ltd. (“Haisheng”) was established as a wholly owned subsidiary of Hitrans with a register capital of RMB5 million (approximately
$0.8 million). Pursuant to Haisheng’s articles of association and relevant PRC regulations, Hitrans was required to contribute the
capital to Haisheng on or before May 31, 2025. Up to the date of this report, Hitrans has contributed RMB3.5 million (approximately $0.5
million) to Haisheng. 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 to 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. As of September 30, 2022 and current, Nanjing CBAK, Guanxi Guiwu and Mr. Weidong have
had paid $0.3 million (RMB2 million), $0.8 million (RMB6 million) and $0.3 million (RMB2 million), respectively. Guangxi Guiwu CBAK
has not commenced operations as of the date of the approval of this report. The Company’s condensed consolidated financial statements
have been prepared under US GAAP. The preparation of financial statements in conformity with
US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates. This basis of accounting differs in certain material respects
from that used for the preparation of the books of account of the Company’s principal 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. The interim condensed consolidated financial information as
of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 have been prepared without audit, pursuant to
the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial
statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed
consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, previously filed with the SEC on April 15, 2022. In the opinion of management, all adjustments (which include
all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated
financial position as of September 30, 2022, its interim condensed consolidated results of operations and cash flows for the three months
ended September 30, 2022 and 2021, as applicable, have been made. The interim results of operations are not necessarily indicative of
the operating results for the full fiscal year or any future periods. After
the disposal of BAK International Limited and its subsidiaries, namely Shenzhen BAK, Shenzhen BAK Power Battery Co., Ltd (formerly BAK
Battery (Shenzhen) Co., Ltd.) (“BAK Shenzhen”), BAK International (Tianjin) Ltd. (“BAK Tianjin”), Tianjin Chenhao
Technological Development Limited (a subsidiary of BAK Tianjin established on May 8, 2014, “Tianjin Chenhao”), BAK Battery
Canada Ltd. (“BAK Canada”), BAK Europe GmbH (“BAK Europe”) and BAK Telecom India Private Limited (“BAK India”),
effective on June 30, 2014, and as of September 30, 2022, the Company’s subsidiaries consisted of: i) China BAK Asia Holdings Limited
(“BAK Asia”), a wholly owned limited liability company incorporated in Hong Kong on July 9, 2013; ii) Dalian CBAK Trading
Co., Ltd. (“CBAK Trading”), a wholly owned limited company established on August 14, 2013 in the PRC; iii) Dalian CBAK Power
Battery Co., Ltd. (“CBAK Power”), a wholly owned limited liability company established on December 27, 2013 in the PRC; iv)
CBAK New Energy (Suzhou) Co., Ltd. (“CBAK Suzhou”), a 90% owned limited liability company established on May 4, 2018 in the
PRC; (v) Dalian CBAK Energy Technology Co., Ltd (“CBAK Energy”), a wholly owned limited liability company established on November
21, 2019 in the PRC; (vi) BAK Asia Investments Limited (“BAK Investments”), a wholly owned limited liability company incorporated
in Hong Kong acquired on July 14, 2020; (vii) CBAK New Energy (Nanjing) Co., Ltd. (“CBAK Nanjing”), a wholly owned limited
liability company established on July 31, 2020 in the PRC; (viii) Nanjing CBAK New Energy Technology Co., Ltd, (“Nanjing CBAK”),
a wholly owned limited liability company established on August 6, 2020 in the PRC; (ix) Nanjing Daxin New Energy Automobile Industry Co.,
Ltd (“Nanjing Daxin”), a wholly owned limited liability company established on November 9, 2020; (x) Daxin New Energy Automobile
Technology ( Jiangsu) Co., Ltd (“Jiangsu Daxin”), a wholly owned limited liability company established on August 4, 2021 in
the PRC; (xi) Zhejiang Hitrans Lithium Battery Technology Co., Ltd (“Hitrans”), a 74.15% registered equity interests (representing
74.72% of paid-up capital) owned limited liability company established on December 16, 2015 in the PRC; (xii) Guangdong Meidu Hitrans
Resources Recycling Technology Co., Ltd., a 59.32% owned limited liability company established on July 6, 2018 in the PRC and (xiii) Shaoxing
Haisheng International Trading Co., Ltd. (“Haisheng”), a 74.15% registered equity interests (representing 74.72% of paid-up
capital ) owned limited liability company established on October
9, 2021 in the PRC. The Company continued its business and continued to generate
revenues from sale of batteries via subcontracting the production to BAK Tianjin and BAK Shenzhen, former subsidiaries before the completion
of construction and operation of its facility in Dalian. BAK Shenzhen is now customer of Hitrans. As of the date of this report, Mr. Xiangqian Li is no
longer a director of BAK International and BAK Tianjin. He remained as a director of Shenzhen BAK and BAK Shenzhen. 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 offering expenses of $3.81 million.
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 offering expenses of $5.0 million. 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 the date of this report, Series B warrants, along with Series A-2
warrants, had both expired. As of September 30, 2022, the Company had $17.6 million
bank loans and approximately $97.2 million of other current liabilities (excluding warrants derivative liability). The Company is currently expanding its product lines and manufacturing
capacity in its Dalian Nanjing and Zhejiang plant, which requires more funding to finance the expansion. The Company plans to raise additional
funds through banks borrowing and equity financing in the future to meet its daily cash demands, if required. COVID-19 The
World Health Organization declared the novel coronavirus (“COVID-19”) outbreak as a pandemic in March 2020. The COVID-19 pandemic
has not caused any disruptions to our operations in the first nine months in 2022. Because of the significant uncertainties surrounding
the COVID-19 pandemic, business interruption and the related financial impact caused by government policies remain possible. Going Concern The accompanying condensed consolidated financial
statements have been prepared assuming the Company will continue as a going concern. The Company has accumulated deficit from recurring
net losses incurred for the prior years and significant short-term debt obligations maturing in less than one year as of September 30,
2022. These conditions raise substantial doubt about the C |
