8-K
CBAK Energy Technology, Inc. (CBAT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event
Reported): November 12, 2021
| CBAK ENERGY TECHNOLOGY, INC. | ||
|---|---|---|
| (Exact name of registrant as specified in its charter) | ||
| Nevada | 001-32898 | 86-0442833 |
| --- | --- | --- |
| (State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
| BAK Industrial Park, Meigui Street | ||
| --- | ||
| Huayuankou Economic Zone | ||
| Dalian, China, 116450 | ||
| (Address, including zip code, of principal executive offices) | ||
| (86)(411)-3918-5985 | ||
| (Registrant’s telephone number, including area code) | ||
| (Former name or former address, if changed since last report) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value | CBAT | Nasdaq Capital Market |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Indicate by check mark whether the registrant is an emerging growth company<br> as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange<br> Act of 1934 (§240.12b-2 of this chapter).<br><br> <br>Emerging growth company o<br><br><br> <br><br><br> <br>If an emerging growth company, indicate by check mark if the registrant<br> has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant<br> to Section 13(a) of the Exchange Act. o | |
| --- |
ITEM 2.02. Results of Operations
and Financial Condition.
On November 12, 2021, CBAK Energy Technology, Inc. (the “Company”) released its results of operations for its fiscal third quarter ended September 30, 2021. A copy of the press release issued by the Company concerning the foregoing results is furnished hereto as Exhibit 99.1.
The information in Item 2.02 of this Current Report on Form 8-K and the exhibit attached hereto are intended to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. Except as shall be expressly set forth by specific reference in such filing, the information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
ITEM 9.01. Financial Statements
and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated November 12, 2021 |
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CBAK ENERGY TECHNOLOGY, INC. | ||
|---|---|---|
| Date: November 12, 2021 | By: | /s/Xiangyu Pei |
| Xiangyu Pei | ||
| Interim Chief Financial Officer |
Exhibit 99.1
CBAK Energy Reports Third Quarter 2021 UnauditedFinancial Results
Q3 Revenue from high power lithium batteriesgrew 51% YoY to $9.6 million
DALIAN, China, November 12, 2021 /PRNewswire/ — CBAK Energy Technology, Inc. (NASDAQ: CBAT) ("CBAK Energy," or the "Company") a leading lithium-ion battery manufacturer and electric energy solution provider in China, today reported its unaudited financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial Highlights
| • | Net revenues were $9.6 million. Excluding revenues from raw material trades, approximately $9.6<br>million was from high power lithium batteries business, a 51% year-over-year growth in high power lithium battery revenues over the same<br>period of 2020. |
|---|---|
| • | Gross profit was $1.1 million, a decrease of 17% from $1.4 million in the same period of 2020. |
| --- | --- |
| • | Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020. |
| --- | --- |
| • | Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020. |
| --- | --- |
Yunfei Li, Chairman and Chief Executive Officer of the Company, noted: “We are very pleased with our robust battery sales in the third quarter. Notably, revenues from high-power lithium batteries totaled $9.6 million, representing 51% year-over-year growth. These results attest to the quality and level of recognition our industry-leading products have in the market.
Mr. Li continued: “As scheduled, we are expanding our production capacity despite global energy shortage and commodity price hikes. This is a much-needed action as the new capacity will yield positive business outcomes and augment our ability to supply. Additionally, in order to address growing and diversified demands for batteries, we made meaningful progress in research and development while extending our product portfolio. Our operations and growth strategies are well on track, which we believe solidifies our market-leading position and capabilities to deliver long-term growth in this thriving industry.”
Xiangyu Pei, Interim Chief Financial Officer of the Company, noted: “Our financial performance for high-power lithium batteries remained solid in the third quarter, a testament to the strong demand for our advanced and dependable products. Despite the increase in commodity prices, raw material cost was carefully managed through our previous contracts that have locked prices for certain materials. As evidenced by our healthy financial position and vigorous growth, we have the capabilities for executing our growth strategies that will push us further on the path to consistent, sustainable success.”
Third Quarter 2021 Business Highlights &Recent Developments
| • | In August, the Company secured performance certification from the world’s leading testing, inspection<br>and certification company SGS for its special 26650 lithium-ion battery, specifically designed for use in ultra-low temperatures. |
|---|
Third Quarter 2021 Financial Results
Net revenues were $9.6 million. Revenues from high power lithium batteries was approximately $9.6 million, representing 51% year-over-year growth compared to the same period of 2020. The Company did not have new raw material trades in this quarter and had a minor adjustment in revenues from previous raw material trades, and the new production line installation in Dalian plant had a temporarily adverse impact on existing production.
| Net Revenues by End-product Applications<br> ($ thousands) | 2021<br> <br>Third Quarter | 2020<br> <br>Third Quarter | % Change<br> YoY | |||||
|---|---|---|---|---|---|---|---|---|
| High power lithium batteries used in: | ||||||||
| Uninterruptable supplies | $ | 9,336 | $ | 5,920 | 58 | |||
| Light electric vehicles | 227 | 23 | 887 | |||||
| Electric vehicles | 1 | 408 | (100 | ) | ||||
| Total high power lithium batteries | $ | 9,563 | $ | 6,351 | 51 | |||
| Raw materials used in lithium batteries | (1 | ) | 4,269 | (100 | ) | |||
| Total | $ | 9,562 | $ | 10,620 | (10 | ) |
Cost of revenues was $8.4 million, a decrease of 9% from $9.2 million in the same period of 2020.
Gross profit was $1.1 million, a decrease of 18% from $1.4 million in the same period of 2020. Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020. The inflation in raw material prices resulted in the increase in production costs.
Total operating expenses were $4.3 million, an increase of 339% from $1.0 million in the same period of 2020. Most of the increase in all expense categories was due to growing headcount and research and development expenses associated with the Nanjing production facility, along with the expiration of the Chinese government’s COVID-19 relief policy that had reduced social insurance contributions during the pandemic.
| ● | Research and development expenses were $1.8 million, an increase of<br>307% from $0.4 million in the same period of 2020. The increase in research and development expenses was also due to the Company’s<br>efforts in optimizing performance and cost-efficiency for battery products. |
|---|---|
| ● | Sales and marketing expenses were $0.5 million, an increase of 223%<br>from $0.2 million in the same period of 2020. Given the growth in revenues from high power lithium batteries, we increased salaries and<br>benefits for sales and marketing employees. |
| --- | --- |
| ● | General and administrative expenses were $2.2 million, an increase<br>of 191% from $0.7 million in the same period of 2020. The Company’s rental expenses increased as it rented spaces for manufacturing,<br>warehouse, and staff accommodation for the Nanjing production facility. |
| --- | --- |
| ● | Recovery of doubtful accounts was $0.2 million, compared to a recovery<br>of doubtful accounts of $0.4 million in the same period of 2020. |
| --- | --- |
Operating Loss was $3.2 million, compared to operating profit of $0.4 million in the same period of 2020.
Finance income, net was $0.1 million, compared to finance expenses of $0.4 million in the same period of 2020, and was a result of lower loan balances and interest income generated from vehicle leasing in 2021.
Change in fair value of warrant liabilities was $23.0 million, compared to nil in the same period of 2020. The change in fair value of warrant liabilities is mainly due to share price decline.
Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020.
Basic and diluted earnings per share were both $0.23. In comparison, basic and diluted earnings per share in the same period of 2020 were both $0.00.
Cash and cash equivalents were $2.0 million as of September 30, 2021, compared to $33.3 million as of June 30, 2021.
Conference Call
CBAK's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Friday, November 12, 2021 (9:00 PM Beijing/Hong Kong Time on November 12, 2021).
For participants who wish to join the call, please register in advance for the conference using the link provided below at least 15 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an email with detailed instructions to join the conference call.
Participant Online Registration:
http://apac.directeventreg.com/registration/event/9955106
Once completing the registration, please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.
Additionally, a live and archived webcast of the conference call will be available at: https://edge.media-server.com/mmc/p/3k3p9eyw.
A replay of the conference call may be accessed by phone approximately two hours after the conclusion of the live call at the following numbers until November 20, 2021. To access the replay, please reference the conference ID 5182755.
| International | +61-2-8199-0299 |
|---|---|
| United States | +1-855-452-5696 |
| Hong Kong, China | +852-800-963-117 |
| Mainland, China | +86-800-870-0206 |
| +86-400-632-2162 |
About CBAK Energy
CBAK Energy Technology, Inc. (NASDAQ:CBAT）is a leading high-tech enterprise in China engaged in the development, manufacturing, and sales of new energy high power lithium batteries. The applications of the Company's products and solutions include light electric vehicles, electric vehicles, electric tools, energy storage, uninterruptible power supply (UPS), and other high-power applications. In January 2006, CBAK Energy became the first lithium battery manufacturer in China listed on the Nasdaq Stock Market. CBAK Energy has multiple operating subsidiaries in Dalian and Nanjing, as well as a large-scale R&D and production base in Dalian.
For more information, please visit www.cbak.com.cn.
Safe Harbor Statement
This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of CBAK Energy Technology, Inc. and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes", "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ materially. These factors include but are not limited to: the ability of the Company to meet its contract or agreement obligations; the uncertain market for the Company's lithium battery cells; business, macroeconomic, technological, regulatory, or other factors affecting the profitability of battery cells designed for energy storage; and risks related to CBAK Energy's business and risks related to operating in China. Please refer to CBAK Energy's most recent Annual Report on Form 10-K, as well as other SEC reports that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. CBAK Energy's actual results could differ materially from those contained in the forward-looking statements. CBAK Energy undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless expressly requested by applicable law.
For investor and media inquiries, please contact:
In China:
CBAK Energy Technology, Inc.
Investor Relations Department
Phone: 86-411-39185985
Email: ir@cbak.com.cn
The Blueshirt Group
Ms. Feifei Shen
Phone: +86 13466566136
Email: feifei@blueshirtgroup.com
The Blueshirt Group
Ms. Suwen Feng
Phone: +86 13917110134
Email: suwen@blueshirtgroup.com
In the United States:
The Blueshirt Group
Ms. Julia Qian
Phone: +1 973-619-3227
Email: Julia@blueshirtgroup.com
CBAK Energy Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In $ except for number of shares)
| September 30, | |||||
|---|---|---|---|---|---|
| 2021 | |||||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 11,681,750 | $ | 1,993,531 | ||
| Pledged deposits | 8,989,748 | 15,552,996 | |||
| Trade accounts and bills receivable, net | 29,571,274 | 22,231,442 | |||
| Inventories | 5,252,845 | 9,249,455 | |||
| Prepayments and other receivables | 7,439,544 | 9,715,578 | |||
| Investment in sales-type lease, net | 235,245 | 838,649 | |||
| Total current assets | 63,170,406 | 59,581,651 | |||
| Property, plant and equipment, net | 41,040,370 | 42,050,589 | |||
| Construction in progress | 30,193,309 | 49,246,115 | |||
| Non-marketable equity securities | - | 702,807 | |||
| Deposit paid for acquisition of a subsidiary | - | 8,349,118 | |||
| Loan to unrelated third party - Hitrans | - | 20,326,775 | |||
| Operating lease right-of-use assets, net | - | 1,981,422 | |||
| Prepaid land use right- non current | 7,500,780 | 7,465,426 | |||
| Intangible assets, net | 11,807 | 21,418 | |||
| Investment in sales-type lease, net | 850,407 | 980,731 | |||
| Total assets | 142,767,079 | $ | 190,706,052 | ||
| Liabilities | |||||
| Current liabilities | |||||
| Trade accounts and bills payable | 28,352,292 | $ | 21,050,320 | ||
| Current maturities of long-term bank loans | 13,739,546 | - | |||
| Other short-term loans | 1,253,869 | 680,563 | |||
| Accrued expenses and other payables | 11,645,459 | 15,796,594 | |||
| Payables to former subsidiaries, net | 626,990 | 361,874 | |||
| Deferred government grants, current | 151,476 | 153,402 | |||
| Product warranty provisions | 155,888 | 124,670 | |||
| Operating lease liability, current | - | 753,404 | |||
| Warrants liability | 17,783,000 | 10,474,000 | |||
| Total current liabilities | 73,708,520 | 49,394,827 | |||
| Deferred government grants, non-current | 7,304,832 | 8,833,848 | |||
| Operating lease liability | - | 801,266 | |||
| Product warranty provision | 1,835,717 | 1,873,626 | |||
| Long term tax payable | 7,511,182 | 7,606,677 | |||
| Total liabilities | 90,360,251 | 68,510,244 | |||
| Commitments and contingencies | |||||
| Shareholders’ equity | |||||
| Common stock 0.001 par value; 500,000,000 authorized; 53,220,902 issued and 53,076,696 outstanding as of December 31, 2020, 88,555,390 issued and 88,411,184 outstanding as of September 30, 2021 | 79,310 | 88,555 | |||
| Donated shares | 14,101,689 | 14,101,689 | |||
| Additional paid-in capital | 225,278,113 | 241,232,244 | |||
| Statutory reserves | 1,230,511 | 1,230,511 | |||
| Accumulated deficit | (183,984,311 | ) | (131,654,694 | ) | |
| Accumulated other comprehensive loss | (239,609 | ) | 1,240,354 | ||
| 56,465,703 | 126,238,659 | ||||
| Less: Treasury shares | (4,066,610 | ) | (4,066,610 | ) | |
| Total shareholders’ equities | 52,399,093 | 122,172,049 | |||
| Non-controlling interests | 7,735 | 23,759 | |||
| Total of equities | 52,406,828 | 122,195,808 | |||
| Total liabilities and shareholders’ equity | 142,767,079 | $ | 190,706,052 |
All values are in US Dollars.
CBAK Energy Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operationsand Comprehensive Income (Loss)
(In $ except for number of shares)
| Three months ended | Nine months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||
| Net revenues | $ | 10,620,656 | $ | 9,562,190 | $ | 22,146,177 | $ | 24,867,393 | ||||
| Cost of revenues | (9,245,811 | ) | (8,430,808 | ) | (20,477,719 | ) | (20,798,931 | ) | ||||
| Gross profit | 1,374,845 | 1,131,382 | 1,668,458 | 4,068,462 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | (446,162 | ) | (1,815,756 | ) | (1,130,316 | ) | (3,344,817 | ) | ||||
| Sales and marketing expenses | (157,485 | ) | (510,386 | ) | (351,963 | ) | (1,262,999 | ) | ||||
| General and administrative expenses | (741,785 | ) | (2,158,183 | ) | (2,614,349 | ) | (5,823,560 | ) | ||||
| Recovery of (provision for) doubtful accounts | 364,168 | 178,897 | (63,534 | ) | 437,475 | |||||||
| Total operating expenses | (981,264 | ) | (4,305,428 | ) | (4,160,162 | ) | (9,993,901 | ) | ||||
| Operating profit (loss) | 393,581 | (3,174,046 | ) | (2,491,704 | ) | (5,925,439 | ) | |||||
| Finance (expenses) income, net | (357,739 | ) | 129,340 | (1,171,030 | ) | 174,442 | ||||||
| Other income, net | 5,873 | 69,970 | 152,171 | 1,619,194 | ||||||||
| Impairment of non-marketable equity securities | - | (43 | ) | - | (690,585 | ) | ||||||
| Change in fair value of warrants | - | 22,998,000 | - | 57,174,000 | ||||||||
| Income (loss) before income tax and discontinued operations | 41,715 | 20,023,221 | (3,510,563 | ) | 52,351,612 | |||||||
| Income tax expense | - | - | - | - | ||||||||
| Net income (loss) | 41,715 | 20,023,221 | (3,510,563 | ) | 52,351,612 | |||||||
| Less: Net income (loss) attributable to non-controlling interests | 2,532 | (3,487 | ) | (2,386 | ) | (21,995 | ) | |||||
| Net income (loss) attributable to shareholders of CBAK Energy Technology, Inc. | $ | 44,247 | $ | 20,019,734 | $ | (3,512,949 | ) | $ | 52,329,617 | |||
| Other comprehensive income (loss) | ||||||||||||
| Net loss | 41,715 | 20,023,221 | (3,510,563 | ) | 52,351,612 | |||||||
| – Foreign currency translation adjustment | 846,695 | 243,258 | 574,526 | 1,473,992 | ||||||||
| Comprehensive income (loss) | 888,410 | 20,266,479 | (2,936,037 | ) | 53,825,604 | |||||||
| Less: Comprehensive loss (income) attributable to non-controlling interests | 3,465 | (3,404 | ) | (630 | ) | (16,024 | ) | |||||
| Comprehensive income (loss) attributable to CBAK Energy Technology, Inc. | $ | 891,875 | $ | 20,263,075 | $ | (2,936,667 | ) | $ | 53,809,580 | |||
| (Loss) Income per share | ||||||||||||
| – Basic | $ | 0.00 | $ | 0.23 | $ | (0.06 | ) | $ | 0.60 | |||
| – Diluted | $ | 0.00 | $ | 0.23 | $ | (0.06 | ) | $ | 0.60 | |||
| Weighted average number of shares of common stock: | ||||||||||||
| – Basic | 64,909,894 | 88,419,998 | 59,569,498 | 87,043,490 | ||||||||
| – Diluted | 65,400,058 | 88,709,210 | 59,569,498 | 87,349,010 |