CBAK Energy Reports Third Quarter 2021 Unaudited Financial Results

DALIAN,China,Nov. 12,2021 -- 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 million was from high power lithium batteries business,a 51% year-over-year growth in high power lithium battery revenues over the same 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 Incomewas $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 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 revenueswere $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

($ thousands)

2021

Third

Quarter

2020

Third

Quarter

% Change

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 expenseswere $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 expenseswere $1.8 million,an increase of 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 efforts in optimizing performance and cost-efficiency for battery products.

Sales and marketing expenses were $0.5 million,an increase of 223% from $0.2 million in the same period of 2020. Given the growth in revenues from high power lithium batteries,we increased salaries and benefits for sales and marketing employees.

General and administrative expenseswere $2.2 million,an increase of 191% from $0.7 million in the same period of 2020. The Company's rental expenses increased as it rented spaces for manufacturing,warehouse,and staff accommodation for the Nanjing production facility.

Recovery of doubtful accountswas $0.2 million,compared to a recovery of doubtful accounts of $0.4 million in the same period of 2020.

Operating Losswas $3.2 million,compared to operating profit of $0.4 million in the same period of 2020.

Finance income,netwas $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 liabilitieswas $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,715 in the same period of 2020.

Basic and diluted earnings per sharewere 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'smanagement will host an earnings conference call at 8:00 AM U.S. Eastern Time onFriday,November 12,2021 (9:00 PMBeijing/Hong Kong Time onNovember 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 ID5182755.

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. InJanuary 2006,CBAK Energy became the first lithium battery manufacturer inChinalisted on the Nasdaq Stock Market. CBAK Energy has multiple operating subsidiaries inDalianandNanjing,as well as a large-scale R&D and production base inDalian.

For more information,please visitwww.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 inChina. 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)

December31,

September30,

2020

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

$

21,320

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

14,689

Additional paid-in capital

225,278,113

241,232,244

Statutory reserves

1,230,511

1,511

Accumulated deficit

(183,984,311)

(131,654,694)

Accumulated other comprehensive loss

(239,609)

1,240,354

56,703

126,238,659

Less: Treasury shares

(4,066,610)

(4,610)

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

$

142,052

CBAK Energy Technology,Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In $ except for number of shares)

Three months ended

September30,

Nine months ended

September30,

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)

(9,901)

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

-

57,000

Income (loss) before income tax and

discontinued operations

41,715

20,023,221

(3,563)

52,351,612

Income tax expense

-

-

-

-

Net income (loss)

41,612

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

41,612

– 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

$

(2,667)

$

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

59,010

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