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Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed
by the Registrant ☒
Filed
by a party other than the Registrant ☐
Check
the appropriate box:
☐
Preliminary
Proxy Statement
☐
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive
Proxy Statement
☐
Definitive
Additional Materials
☐
Soliciting
Material under 240.14a-12
CBAK
ENERGY TECHNOLOGY, INC.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
☒
No
fee required
☐
Fee
paid previously with preliminary materials.
☐
Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on December 6, 2024
To
the Stockholders of CBAK ENERGY TECHNOLOGY, INC.:
You are cordially invited to attend the 2024 Annual Meeting of Stockholders
(the Annual Meeting) of CBAK Energy Technology, Inc., a Nevada corporation (the Company) that will be held
on Friday, December 6, 2024, at 9:00 a.m., local time, at BAK Industrial Park, Meigui Street, Huayuankou Economic Zone, Dalian City, 116450,
China.
We
are now filing this proxy statement on Schedule 14A (the “Proxy Statement”) with the Securities and Exchange Commission (“SEC”)
in order to provide the disclosures required by the rules and regulations of the SEC in connection with the Annual Meeting, which will
be held for the following purposes:
1.
To
elect five (5) persons to the Board of Directors of the Company, each to serve until the
next annual meeting of stockholders of the Company or until such person shall resign, be
removed or otherwise leave office;
2.
To
ratify the appointment of ARK Pro CPA Co as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2024;
3.
To transact such other business as may properly come before the Annual
Meeting or at any postponement or adjournment of the Annual Meeting.
The
foregoing items of business are more fully described in the proxy statement accompanying this Notice or made available over the Internet.
We are not aware of any other business to come before the Annual Meeting.
Only stockholders of record at the close of business on October 8,
2024 (the Record Date) are entitled to notice and to vote at the Annual Meeting and any adjournment or postponement thereof.
It
is important that your shares are represented at the Annual Meeting. We urge you to review the attached Proxy Statement and, whether
or not you plan to attend the Annual Meeting in person, please vote your shares promptly by casting your vote via the Internet or, if
you receive a full set of proxy materials by mail or request one be mailed to you, and prefer to mail your proxy or voter instructions,
please complete, sign, date, and return your proxy or vote instruction form in the pre-addressed envelope provided, which requires no
additional postage if mailed in the United States. You may revoke your vote by submitting a subsequent vote over the Internet or by mail
before the Annual Meeting, or by voting in person at the Annual Meeting.
If
you plan to attend the Annual Meeting, please notify us of your intentions. This will assist us with meeting preparations. If your shares
are not registered in your own name and you would like to attend the Annual Meeting, please follow the instructions contained in the
Notice of Internet Availability of Proxy Materials that is being mailed to you and any other information forwarded to you by your broker,
trust, bank, or other holder of record to obtain a valid proxy from it. This will enable you to gain admission to the Annual Meeting
and vote in person.
This Proxy Statement and the accompanying proxy are being furnished
with respect to the solicitation of proxies by the Board of Directors of CBAK Energy Technology, Inc., a Nevada corporation (the Company
or we), for the Companys Annual Meeting of Stockholders (the Annual Meeting). The Annual Meeting is
to be held at 9:00 a.m., local time, on Friday, December 6, 2024, and at any adjournment(s) or postponement(s) thereof, at the principal
executive offices of the Company, located at BAK Industrial Park, Meigui Street, Huayuankou Economic Zone, Dalian City, 116450, China.
The approximate date on which the Proxy Statement and the accompanying
notice and form of proxy are intended to be sent or made available to stockholders is on or about October 11, 2024.
QUESTIONS
AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Why
am I receiving these materials?
Our records indicate that you owned your shares of Company common stock,
par value $0.001 per share (the Common Stock) at the close of business on October 8, 2024 (the Record Date).
You have been sent this Proxy Statement and the enclosed proxy because the Company is soliciting your proxy to vote your shares of Common
Stock at the Annual Meeting on the proposals described in this Proxy Statement.
What
proposals will be voted at the Annual Meeting?
The
following proposals will be voted on at the Annual Meeting:
(1)
The election of five (5)
persons to the Board of Directors of the Company, each to serve until the next annual meeting of stockholders of the Company or until
such person shall resign, be removed or otherwise leave office (Proposal 1);
(2)
The ratification of the appointment of ARK Pro CPA Co as the
Companys independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal 2);
We
will also consider any other business that properly comes before the Annual Meeting or at any postponement or adjournment of the Annual
Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the enclosed proxy card or voter instruction
card will vote the shares they represent using their judgment.
1
What
are the recommendations of the Board of Directors?
Our
Board of Directors unanimously recommends that you vote:
(1)
“For” the election
of the nominated directors (Proposal 1);
(2)
For the ratification of the appointment of ARK Pro CPA
Co as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal 2);
Will
there be any other items of business on the agenda?
The
Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. Nonetheless, in case there
is an unforeseen need, the accompanying proxy gives discretionary authority to the persons named on the proxy with respect to any other
matters that might be brought before the Annual Meeting or at any postponement or adjournment of the Annual Meeting. Those persons intend
to vote that proxy in accordance with their judgment. If for any reason any of the nominees are not available as candidates for director,
and our Board of Directors has not reduced the authorized number of directors on our Board of Directors, the persons named as proxy holders
will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors.
Who
is entitled to vote at the Annual Meeting?
All owners of our Common Stock as of the close of business on the Record
Date are entitled to vote their shares of Common Stock at the Annual Meeting and any adjournment or postponement thereof. As of the Record
Date, a total of 89,939,190 shares of Common Stock are outstanding and eligible to vote at the Annual Meeting. Each share of Common Stock
is entitled to one vote on each matter properly brought before the Annual Meeting. The enclosed proxy card or voting instruction card
shows the number of shares you are entitled to vote at the Annual Meeting.
Stockholder
of Record: Shares Registered in Your Name
If
on the Record Date your shares were registered directly in your name with the Company, then you are a stockholder of record. As a stockholder
of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, to ensure
your vote is counted, we encourage you to vote either by Internet or by filling out and returning the enclosed proxy card.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If on the Record Date your shares were held in an account at a brokerage
firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in street name and these
proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of
record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker or other agent
on how to vote the shares in your account. A broker is entitled to vote shares held for a beneficial owner on routine matters,
such as a proposal to ratify an independent registered public accounting firm (Proposal 2). However, absent instructions from the beneficial
owners of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters, such
as Proposal 1. We strongly encourage you to vote.
2
How
do I vote?
Your
shares may only be voted at the Annual Meeting if you are present in person or are represented by proxy. Whether or not you plan to attend
the Annual Meeting, we encourage you to vote by proxy to ensure that your shares will be represented.
You
may vote using any of the following methods:
●
By
Internet
. You may vote by using the Internet in accordance with the instructions provided on the Notice of Internet Availability
of Proxy Materials. The Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders
to vote their shares and to confirm that their instructions have been properly recorded.
●
By
Mail
. Stockholders of record of Common Stock as of the Record Date may submit proxies
by completing, signing and dating their proxy cards and mailing them in the accompanying
pre-addressed envelopes. If you return your signed proxy but do not indicate your voting
preferences, your shares will be voted on your behalf FOR the five nominees
to the Board of Directors (Proposal 1), and FOR the ratification of ARK Pro
CPA Co as our independent registered public accounting firm for our fiscal year ending
December 31, 2024 (Proposal 2). Stockholders who hold shares beneficially in street name
and have requested to receive printed proxy materials may provide voting instructions by
mail by completing, signing and dating the voting instruction forms provided by their brokers,
banks or other nominees and mailing them in the accompanying pre-addressed envelopes.
●
In
person at the Annual Meeting.
Shares held in your name as the stockholder of record may
be voted in person at the Annual Meeting or at any postponement or adjournment of the Annual
Meeting. Shares held beneficially in street name may be voted in person only if you obtain
a legal proxy from the broker, bank or nominee that holds your shares giving you the right
to vote the shares.
Even if you plan to attend the Annual Meeting, we recommend that
you also submit your proxy or voting instructions by mail or Internet so that your vote will
be counted if you later decide not to attend the Annual Meeting
.
Can
I change my vote or revoke my proxy?
If
you are a stockholder of record, you may revoke your proxy at any time prior to the vote at the Annual Meeting. If you submitted your
proxy by mail, you must file with our Secretary a written notice of revocation or deliver, prior to the vote at the Annual Meeting, a
valid, later-dated proxy. If you submitted your proxy by the Internet, you may revoke your proxy with a later Internet proxy. Attendance
at the Annual Meeting will not have the effect of revoking a proxy unless you give written notice of revocation to the Secretary before
the proxy is exercised or you vote by written ballot at the Annual Meeting. If you are a beneficial owner, you may vote by submitting
new voting instructions to your broker, bank or nominee, or, if you have obtained a legal proxy from your broker, bank or nominee giving
you the right to vote your shares, by attending the meeting and voting in person.
Who
may attend the Annual Meeting?
All
stockholders that were stockholders of the Company as of the Record Date, or their authorized representatives, may attend the Annual
Meeting. Admission to the Annual Meeting will be on a first-come, first-served basis. If your shares are held in the name of a brokerage
firm, bank, dealer or other similar organization that holds your shares in “street name” and you plan to attend the Annual
Meeting, you should obtain a legal proxy from the broker, bank or nominee that holds your shares to ensure your admission.
3
What
constitutes a quorum and how will votes be counted?
The
Annual Meeting will be held if a quorum, consisting of thirty-three and one-third percent (33-1/3%) of the outstanding shares of Common
Stock entitled to vote as of the Record Date, is represented in person or by proxy. Abstentions and broker “non-votes” will
be counted for purposes of determining a quorum.
A broker non-vote occurs when a nominee, such as a bank
or broker, holding shares for a beneficial owner, does not vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from the beneficial owner. Under the rules of the New York Stock
Exchange, absent instructions from the beneficial owners, banks and brokers who hold shares in street name for beneficial owners have
the authority to vote only on routine corporate matters, such as the ratification of the appointment of ARK Pro CPA Co as our independent
registered public accounting firm for our fiscal year ending December 31, 2024 (Proposal 2) without instructions from the beneficial owner
of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares
held for a beneficial owner on certain non-routine matters, such as the uncontested election of our directors (Proposal
1).
Broker
non-votes are counted for purposes of determining whether or not a quorum exists for the transaction of business at the Annual Meeting
or any postponement or adjournment of the Annual Meeting, but will not be counted for purposes of determining the number of shares represented
and voted with respect to an individual proposal. Thus, if you do not give your broker specific voting instructions, your shares may
not be voted on these “non-routine” matters and the effect of a broker non-vote varies depending on the vote required with
respect to an individual proposal.
How
are proxies being solicited and who will pay for the solicitation of proxies?
This
proxy solicitation is being made by the Company on behalf of the Board of Directors of the Company and will be paid for by the Company.
We will reimburse brokerage firms, banks and other persons representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Proxies may be solicited by certain of our directors, officers and regular employees
personally or by telephone, facsimile or electronic mail. No additional compensation will be paid to these persons for such services.
I
am a stockholder, and I only received a copy of the Notice of Internet Availability of Proxy Materials (“Notice”) in the
mail. How may I obtain a full set of the proxy materials?
In
accordance with the “notice and access” rules of the SEC, we may furnish proxy materials, including this Proxy Statement,
to our stockholders of record and beneficial owners of shares by providing access to such documents on the Internet instead of mailing
printed copies. Stockholders will not receive printed copies of the proxy materials unless they request them. Instead, the Notice, which
was mailed to our stockholders, will instruct you as to how you may access and review all of the proxy materials on the Internet. If
you would like to receive a paper or electronic copy of our proxy materials, you should follow the instructions for requesting such materials
in the Notice.
I
share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional
copy of the proxy materials?
We
have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy
of the Notice and, if applicable, the proxy materials to multiple stockholders who share the same address unless we received contrary
instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs and fees. Stockholders who
participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will
deliver promptly a separate copy of the Notice and, if applicable, the proxy materials to any stockholder at a shared address to which
we delivered a single copy of any of these documents. To receive a separate copy of the Notice and, if applicable, these proxy materials,
stockholders may contact:
Corporate
Secretary
CBAK
Energy Technology, Inc.
BAK
Industrial Park,
Meigui
Street, Huayuankou Economic Zone,
Dalian
City, 116450, China
Telephone:
86-411-39185985; Fax: 86-411-39185980
E-mail:
ir@cbak.com.cn
Stockholders
who hold shares in street name (as described above) may contact their brokerage firm, bank, broker-dealer or other similar organization
to request information about householding.
Whom
should I contact with other questions?
You
may obtain information from us by making a request by telephone or in writing at the address of our Corporate Secretary set forth above.
4
Important
Notice Regarding the Availability of Proxy Materials for
the Annual Meeting
to Be Held on December 6, 2024:
The Notice of Annual
Meeting of Stockholders, Proxy Statement and 2023 Annual Report are available at https://onlineproxyvote.com/CBAT/2024
5
SECURITIES
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 our Common Stock as of the close of business
on the Record 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:
Names of Management and Names of Certain Beneficial Owners
(1)
Amount and Nature of Beneficial Ownership
(1)
Number
(2)
Percent
(3)
Officers and Directors
Yunfei Li
(5) (6) (7) (10)
11,210,871
12.49
%
J. Simon Xue
(4)
65,000
0.07
%
Martha C. Agee
(4)
65,000
0.07
%
Jianjun He
(4)
65,000
0.07
%
Xiangyu Pei
(9)
255,000
0.32
%
Jiewei Li
(11)
10,000
0.02
%
All executive officers and directors as a group (6 persons)
11,670,871
13.04
%
Principal Stockholders
Dawei Li
(7) (8)
6,733,359
7.49
%
*
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 Record Date, through the exercise or conversion of any stock option, convertible security,
warrant or other right (a Presently Exercisable security).
(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 persons spouse) with respect to all shares of Common Stock listed as owned by that person or entity.
(3)
A total of 89,939,190 shares of Common Stock are considered to be outstanding on the Record 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, each of our independent directors was granted 10,000 restricted share units, or RSUs, of the Companys common stock, which vested in two equal installments on June 30 and December 31, 2023, respectively. On April 11, 2023, 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.
(5)
On June 30, 2015, Mr. Yunfei Li was granted 30,000 restricted shares of
the Companys Common Stock, under the 2015 Plan. The restricted shares vest over a three-year period in 12 equal quarterly installments
with the first vesting date on June 30, 2015. On April 19, 2016, pursuant to the 2015 Plan, the Company granted Mr. Yunfei Li an aggregate
of 150,000 restricted shares of the Companys Common Stock. The restricted shares vest semi-annually in 6 equal installments over
a three-year period with the first vesting on December 31, 2016. On February 17, 2017, we signed a letter of understanding with each of
eight individual investors, including our CEO, Mr. Yunfei Li, whereby these stockholders 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 stockholders paid us a total of $2.1 million as refundable deposits, among which, Mr. Yunfei Li agreed to
subscribe new shares totaling $1.12 million and pay a refundable deposit of $0.2 million. In April and May 2017, we received cash of $9.6
million from these stockholders. 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 746,018 shares that were issued to Mr. Yunfei Li, our CEO. On June 22, 2017, we issued the
shares to the investors.
6
On August 23, 2019, pursuant to the 2015 Plan,
the Company granted Mr. Yunfei Li an aggregate of 400,000 restricted share units of the Companys 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.
Includes 20,000 options vested on May 30, 2022
and 20,000 options vested on November 30, 2022. On November 29, 2021, pursuant to the 2015 Plan, the Company granted Mr. Yunfei Li an
aggregate of 200,000 performance-based stock options to purchase the Companys Common Stock. Subject to continued service and attainment
of the performance goals relating to the Companys 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 20,000 options on May 30 and November 30, 2022, respectively. However, the performance criteria for 2022 and 2023 were not met, and
thus, no portion of the option was vested in 2023 or 2024.
Includes 75,000 options vested on June 30, 2024. On April 11, 2023, pursuant
to the 2015 plan, the Company granted Mr. Yunfei Li an aggregate of 150,000 restricted share units of the Companys Common Stock.
The share units vest in two equal installments on June 30 and December 31, 2023, respectively. Also, on April 11, 2023, pursuant to the
2015 plan, the Company granted Mr. Yunfei Li an aggregate of 300,000 options to purchase Common Stock. The options vest in four equal
installments semi-annually with the first portion vesting on June 30, 2024.
(6)
On January 7, 2019, we entered into a cancellation agreement with Mr. Yunfei Li and Mr. Dawei Li, who loaned an aggregate of approximately $5.2 million (the First Debt) to the Companys subsidiary, CBAK Power. Pursuant to the terms of the cancellation agreement, the creditors agreed to cancel the First Debt in exchange for an aggregate of 5,098,040 shares of Common Stock of the Company at an exchange price of $1.02 per share. According to the amount of loan, 3,431,373 and 1,666,667 shares were issued to Mr. Dawei Li and Mr. Yunfei Li, respectively. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating to the First Debt.
(7)
On July 26, 2019, we entered into a cancellation
agreement with Mr. Dawei Li, Mr. Yunfei Li and Asia EVK, who loaned an aggregate of approximately $7.1 million to CBAK Power (collectively,
the Third Debt and Fourth Debt). Pursuant to the terms of the cancellation agreement, the creditors agreed
to cancel the Third Debt and Fourth Debt in exchange for an aggregate of 7,092,219 shares of Common Stock of the Company at an exchange
price of $1.05 per share. According to the amount of loan, 1,384,717, 2,938,067 and 2,769,435 shares were issued to Mr. Dawei Li, Mr.
Yunfei Li and Asia EVK, respectively. 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.
(8)
On October 14, 2019, we entered into a cancellation agreement with Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen, who loaned an aggregate of approximately $4.2 million to CBAK Power (the Fifth Debt) and the unpaid earnest money of approximately $1.0 million. Pursuant to the terms of the cancellation agreement, the creditors agreed to cancel the Fifth Debt and convert the unpaid earnest money in exchange for an aggregate of 8,599,717 shares of Common Stock of the Company at an exchange price of $0.6 per share. According to the amount of loan, 528,053, 3,536,068, 2,267,798 and 2,267,798 shares were issued to Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen, respectively. 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.
7
(9)
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 Companys 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.
Includes 15,000 options vested on May 30, 2022
and 15,000 options vested on November 30, 2022. 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 Companys Common Stock. Subject to continued service and attainment of
the performance goals relating to the Companys 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 and 2023 were not met, and
thus, no portion of the option was vested in 2023 or 2024.
Includes 25,000 options vested on June 30, 2024. 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 Companys Common Stock.
The share units vest in two equal installments on June 30 and December 31, 2023, respectively. 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 portion vesting on June 30, 2024.
(10)
On April 27, 2020, the Company entered into a
cancellation agreement with Mr. Yunfei Li, Mr. Ping Shen and Asia EVK (the creditors), who loaned an aggregate of approximately $4.3 million
to CBAK Power (the Sixth Debt). Pursuant to the terms of the cancellation agreement, Mr. Yunfei Li, Mr. Ping Shen and Asia
EVK agreed to cancel the Sixth Debt in exchange for 2,062,619, 4,714,557 and 2,151,017 shares of Common Stock, respectively, at an exchange
price of $0.48 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations
relating to the Sixth Debt.
(11)
Includes 2,000 options vested on each of May 30, 2022 and November 30,
2022.
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 Companys
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 the option as to 2,000 shares on May 30, 2022 and 2,000 shares on November 30, 2022.
The performance criteria for 2022 and 2023 were not met, and thus, no portion of the option was vested in 2023 or 2024.
Includes 5,000 options vested on June 30, 2024. 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 Companys Common Stock.
The share units vest in two equal installments on June 30 and December 31, 2023, respectively. Also, 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 portion vesting on June 30, 2024.
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.
8
PROPOSAL
1. - ELECTION OF DIRECTORS
Our
Board of Directors is responsible for establishing broad corporate policies and monitoring the overall performance of the Company. It
selects the Company’s executive officers, delegates authority for the conduct of the Company’s day-to-day operations to those
officers, and monitors their performance. Members of the Board of Directors are kept informed of the Company’s business by participating
in Board of Directors and Committee meetings, by reviewing analyses and reports, and through discussions with the Chairman and other
officers.
Effective
December 8, 2006, Article V of our articles of incorporation was amended so that the number of our directors shall be determined in accordance
with our Bylaws instead of in accordance with provisions contained in our articles of incorporation. At the Annual Meeting, five (5)
directors will be elected, each to hold office until the next annual meeting of stockholders or his or her earlier death or resignation
or until his or her successor, if any, is elected or appointed. The individuals who have been nominated for election to the Board of
Directors at the Annual Meeting are listed in the table below. Each of the nominees is a current director of the Company.
If,
as a result of circumstances not now known or foreseen, any of the nominees is unavailable to serve as a nominee for the office of Director
at the time of the Annual Meeting, the holders of the proxies solicited by this Proxy Statement may vote those proxies either (i) for
the election of a substitute nominee who will be duly designated by the proxy holders or by the present Board of Directors or (ii) for
the balance of the nominees, leaving a vacancy. Alternatively, the size of the Board may be reduced accordingly. The Board of Directors
has no reason to believe that any of the nominees will be unwilling or unable to serve, if elected as a Director. To be elected, each
of the five nominees proposed for election as directors at the Annual Meeting must receive at least a plurality of the votes cast at
the Annual Meeting.
Director
Selection
There have been no material changes to the procedures by which stockholders
may recommend nominees to our Board of Directors since such procedures were last disclosed. As provided in its Charter, the Nominating
and Corporate Governance Committee of the Companys Board of Directors is responsible for identifying individuals qualified to become
Board members and recommending to the Board nominees for election as directors. The Nominating and Corporate Governance Committee considers
recommendations for director nominees, including those submitted by the Companys stockholders, on the bases described below. Stockholders
may recommend nominees by writing to the Nominating and Corporate Governance Committee c/o the Secretary at BAK Industrial Park, Meigui
Street, Huayuankou Economic Zone, Dalian City, 116450, China; via email at IR@cbak.com.cn; or via fax at (86)411-39185980. Stockholder
recommendations will be promptly provided to the chairman of the Nominating and Corporate Governance Committee. To be considered by the
Nominating and Corporate Governance Committee for inclusion in the proxy for the 2025 annual meeting, recommendations must be received
by the Secretary of the Company not later than the close of business on December 31, 2024.
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 (“NASDAQ”). For a description of the qualifications
that the Nominating and Corporate Governance Committee seeks in potential nominees, please see “Director Qualifications”
below.
9
The
names, the positions with the Company and the ages as of the Record Date of the individuals who are our nominees for election as directors
are:
Name
Age
Position/s
Director
Since
Yunfei Li
58
Chairman, President and Chief Executive Officer
March 2016
Jianjun He
52
Director
November 2013
J. Simon Xue
70
Director
February 2016
Martha C. Agee
69
Director
November 2012
Xiangyu Pei
35
Director
September 2021
Director
Qualifications
Qualifications,
Attributes, Skills and Experience to be Represented on the Board of Directors 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 of Directors. 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 of Directors 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
experience as a Chief Executive Officer or President. 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.
Board
Diversity Matrix
The
matrix below summarizes the gender and ethnic diverse attributes on our Board.
Board
Diversity Matrix (As of Record Date)
Country
of Principal Executive Offices
China
Foreign
Private Issuer
No
Disclosure
Prohibited under Home Country Law
No
Total
Number of Directors
5
Female
Male
Non-Binary
Did
Not
Disclose
Gender
Part
I: Gender Identity
Directors
2
3
0
0
Part
II: Demographic Background
Underrepresented
Individual in Home Country Jurisdiction
1
LGBTQ+
0
Did
Not Disclose Demographic Background
0
10
Biographical
Information and Summary of Qualifications of Nominees for Director
Yunfei Li
has
served as the chairman of our board, our president and chief executive officer since March 1, 2016. Mr. Yunfei Li has more than 20 years
of management experience in industries of real estate development, battery and new energy. Since May 2014, he has been Vice President
of the Companys subsidiary, CBAK Power in charge of the companys construction of manufacturing facilities, government relationship
and development of new customers. From May 2010 to May 2014, Mr. Yunfei Li held management positions of various new energy development
and real estate development companies in China. Prior to that, he was Director of Construction Department, Director of Comprehensive
Management Department and Assistant to President of Shenzhen BAK Battery Co., Ltd., a former subsidiary of the Company, from March 2003
to May 2010. Mr. Yunfei Li holds a bachelors degree in civil engineering from Liao Yuan Vocational Technical College.
Director Qualifications
:
With over 17 years of leadership experience at our company, Mr. Yunfei Li spearheads our growth through his extensive senior management
expertise and deep understanding of our industry and business operations.
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 bachelors degree in auditing and obtained a masters degree from Jilin University in 2005.
Director
Qualifications
: Mr. He, Chair of the Nominating and Corporate Governance Committee, has more than 15 years of experience in accounting
and finance and is an associate member of the Chinese Institute of Certificate Public Accounts. He also has more than three years’
experience acting as CFO of a Nasdaq listed company.
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, BK Electronics Co., Ltd., Valence Energy-Tech (Suzhou) Co., A123 Systems Inc. and International
Battery Inc. He enjoys 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.
Director Qualifications
:
Dr. Xue, Chair of the Compensation Committee, 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.
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 bachelors degree in accounting in 1976 and Juris Doctorate degree in 1988 from Baylor University.
Director
Qualifications
: Ms. Agee, Chair of the Audit Committee, was previously Certified Public Accountant, worked as Chief Accountant for
a political sub-division for five and a half years and worked as Supervisor of Accounting for a large retail chain with 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.
11
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. 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.
Director
Qualifications
: Having served at the Company since 2017, Ms. Pei brings to the Board of Directors substantial experience in various
aspects of our business and industry and strong management skills.
Each
director holds office until the earlier of his or her death, resignation, removal from office by the stockholders, or his or her respective
successor is duly elected and qualified. There are no arrangements or understandings between any of our nominees or directors and any
other person pursuant to which any of our nominees or directors have been selected for their respective positions. No nominee or director
is related to any executive officer or any other nominee or director.
No
director of the Company is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries. There are no family relationships among our directors or officers.
Other
than as described above, no director has held any directorship during the past five years with any other public company.
For
information as to the shares of the Common Stock held by each nominee, see “Securities Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters—Securities Ownership of Certain Beneficial Owners and Management.”
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;
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;
12
ii.
Engaging
in any type of business practice; or
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:
i.
Any
federal or state securities or commodities law or regulation; or
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
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.
Director
Independence
Our
Board of Directors has determined that each of our non-employee directors, Mr. Xue, Ms. Agee and Mr. He, is an “independent director”
as defined by the applicable rules of the SEC and NASDAQ. Each of our non-employee directors serves on the Board’s committees,
and therefore all of the members of our board committees are independent as defined under Rule 5605(a)(2) of the NASDAQ Listing Rules.
There were and are no transactions, relationships or arrangements not otherwise disclosed in this Proxy Statement that were considered
by the Board of Directors under the applicable independence definitions in determining that each of these directors is independent.
Governance
Structure
Currently, our Chief Executive Officer is also our Chairman. The Board
of Directors believes that, at this time, having a combined Chief Executive Officer and Chairman is the appropriate leadership structure
for the Company. In making this determination, the Board of Directors considered, among other matters, Mr. Yunfei Lis experience
and tenure of having been officers of the Company since 2003, and believed that Mr. Yunfei Li is highly qualified to act as both Chairman
and Chief Executive Officer due to his experience, knowledge, and personality. Among the benefits of a combined Chief Executive Officer/Chairman
considered by the Board of Directors is that such structure promotes clearer leadership and direction for our company and allows for a
single, focused chain of command to execute our strategic initiatives and business plans.
13
The
Board of Directors’ Role in Risk Oversight
The
Board of Directors oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls
are maintained, and that the Company’s business is conducted wisely and in compliance with applicable laws and regulations and
proper governance. Included in these responsibilities is the Board of Directors’ oversight of the various risks facing the Company.
In this regard, the Board of Directors seeks to understand and oversee critical business risks. The Board of Directors does not view
risk in isolation. Risks are considered in virtually every business decision and as part of the Company’s business strategy. The
Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential
for the Company to be competitive on a global basis and to achieve its objectives.
While
the Board oversees risk management, Company management is charged with managing risk. The Company has robust internal processes and a
strong internal control environment to identify and manage risks and to communicate with the Board of Directors. The Board of Directors
and the Audit Committee monitor and evaluate the effectiveness of the internal controls and the risk management program at least annually.
Management communicates routinely with the Board of Directors, Board Committees and individual Directors on the significant risks identified
and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.
The
Board implements its risk oversight function both as a whole and through Committees. Much of the work is delegated to various Committees,
which meet regularly and report back to the full Board. All Committees play significant roles in carrying out the risk oversight function.
In particular:
●
The
Audit Committee oversees risks related to the Company’s financial statements, the financial
reporting process, accounting and legal matters. The Audit Committee oversees the internal
audit function. The Audit Committee members meet separately with representatives of the Company’s
independent auditing firm; and
●
The
Compensation Committee evaluates the risks and rewards associated with the Company’s
compensation philosophy and programs. The Compensation Committee reviews and approves compensation
programs with features that mitigate risk without diminishing the incentive nature of the
compensation. Management discusses with the Compensation Committee the procedures that have
been put in place to identify and mitigate potential risks in compensation.
●
The
Nominating and Corporate Governance Committee evaluates risk associated with management decisions
and strategic direction and reports concerns to the full Board. In addition, this committee
evaluates the performance of independent directors and makes suggestions to the full Board
concerning director qualifications and number of independent directors. The committee also
oversees the Company’s ethics programs, including the Code of Business Ethics and Conduct.
Required
Vote
To
be elected, each nominee for director must receive at least a plurality of the votes cast at the Annual Meeting (assuming a quorum is
present) with respect to that nominee’s election. Abstentions and broker “non-votes” will not be counted as a vote
cast with respect to a nominee.
Recommendation
of the Board of Directors
The
Board of Directors recommends a vote “FOR” the election of the nominees set forth in Proposal 1.
14
BOARD
MEETINGS AND COMMITTEES OF THE BOARD
Meetings
and Committees
Our
Board of Directors currently has three standing Committees which, pursuant to delegated authority, 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 as that term is defined under the NASDAQ listing standards
applicable to each of these committees. From time to time, the Board may establish other committees.
During the fiscal year ended December 31, 2023, the Board held 3 meeting
and took action by unanimous written consent 5 times. Each of our directors serving on the Board during 2023 attended at least 75% of
the meetings held by the Board and by the committees on which such director served during 2023. We do not have a policy requiring Board
members to attend the annual meeting of our stockholders. Two members of the Board attended our 2023 annual meeting of stockholders.
Each
committee acts pursuant to written charters approved by the Board. Each of the charters for our Audit, Compensation and Nominating and
Corporate Governance Committees contains a definition for determining whether members of the respective Committee are independent for
purposes of that committee. Current copies of these charters are posted on our Internet website at www.cbak.com.cn.
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, which was established in accordance with Section
3(a)(58)(A) of the Exchange Act, oversees our accounting and financial reporting processes and the audits of the financial statements
of our company. During the fiscal year ended December 31, 2023, the Audit Committee held 2 meeting and took action by unanimous written
consent 4 times. 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.
15
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 Compensation Committee hold 1 meeting during the fiscal year ended December 31, 2023 and took action by unanimous written consent
2 times during the fiscal year ended December 31, 2023.
The
purpose of our Compensation Committee is to 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;
●
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 rules
at all times during their service on such Committee. The Nominating and Corporate Governance Committee hold 1 meetings during the fiscal
year ended December 31, 2023 and took action by unanimous written consent 1 time during the fiscal year ended December 31, 2023.
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 proxy statement. 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, 2023, 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.
16
REPORT
OF THE AUDIT COMMITTEE
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023
The
Audit Committee of the Board is comprised of three non-employee Directors, each of whom has been determined by the Board to be “independent”
meeting the independence requirements of the Listing Rules of NASDAQ and the SEC. The Board has determined, based upon an interview of
Martha Agee and a review of Ms. Agee’s responses to a questionnaire designed to elicit information regarding her experience in
accounting and financial matters, that Ms. Agee shall be designated as an “Audit Committee financial expert” within the meaning
of SEC Regulation S-K, as Ms. Agee has past employment experience in finance or accounting, requisite professional certification in accounting,
or any other comparable experience or background which results in her financial sophistication. The Audit Committee assists the Board’s
oversight of the integrity of the Company’s financial reports, compliance with legal and regulatory requirements, the qualifications
and independence of the Company’s independent registered public accounting firm, the audit process, and internal controls. The
Audit Committee operates pursuant to a written charter adopted by the Board. The Audit Committee is responsible for overseeing the corporate
accounting and financing reporting practices, recommending the selection of the Company’s registered public accounting firm, reviewing
the extent of non-audit services to be performed by the auditors, and reviewing the disclosures made in the Company’s periodic
financial reports. The Audit Committee also reviews and recommends to the Board that the audited financial statements be included in
the Company’s Annual Report on Form 10-K.
Within this framework, the Audit Committee has reviewed and discussed
with management the Companys audited financial statements as of and for the fiscal year ended December 31, 2023. The Audit Committee
also has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements
of the Public Company Accounting Oversight Board Auditing Standard and the SEC. In addition, the Audit Committee has received the written
disclosures and letter from the independent registered public accounting firm required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountants communications with the Audit Committee concerning independence,
has discussed with the independent registered public accounting firm, ARK Pro CPA Co, the independence of that firm and has considered
whether the provision of non-audit services was compatible with maintaining the independence of that firm.
Based on the review and discussions referred to above, the Audit Committee
had recommended to the Board that the audited financial statements be included in the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 for filing with the SEC.
/s/
The Audit Committee
Martha C. Agee, Chair
J. Simon Xue
Jianjun He
17
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 persons
for services rendered in all capacities during the noted periods.
Stock
Option
Salary
Awards
Awards
Total
Name and Principal Position
Year
($)
(1)
($)
($)
(2)(3)
($)
Yunfei Li
2022
117,658
60,000
-
177,658
President, Chief Executive Officer
(4)
2023
150,913
170,250
-
321,164
Jiewei Li
67,958
11,350
-
79,308
Chief Financial Officer and Secretary
(5)
2023
Xiangyu Pei
2022
88,556
27,000
-
115,556
Former Interim Chief Financial Officer
(6)
2023
87,744
56,750
-
144,494
(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 RMB7.0719
(fiscal year 2023 exchange rate) and $1.00 to RMB6.7264 (fiscal year 2022 exchange rate).
(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 25 of the Notes
to Consolidated Financial Statements in our Form 10-K for information, including assumptions made, regarding the valuation of equity awards.
(3)
On November 29, 2021, the Company granted (i) Mr. Yunfei Li performance-based options to purchase a total of 200,000 shares of Common Stock, (ii) Mr. Jiewei Li performance-based options to purchase a total of 20,000 shares of Common Stock, and (iii) Ms. Xiangyu Pei performance-based options to purchase a total of 150,000 shares of Common Stock, under the Companys 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 150,000 restricted share units (the RSUs) to Mr. Yunfei 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. Yunfei Li an option to purchase 300,000 shares of common stock. The option vest in four equal installments semi-annually with the first installment vesting on June 30, 2024.
(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.
(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.
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. We entered into an employment agreement with Mr.
Yunfei Li on March 1, 2016. On August 23, 2019, the Board of Directors appointed Ms. Xiangyu Pei as the Interim Chief Financial Officer,
and we entered into an employment agreementwith Ms. Xiangyu Pei for a three-year term. 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. Ms. Xiangyu Pei resigned as the Interim Chief
Financial Officer on August 22, 2023. We also have entered into a standard employment agreement with Mr. Jiewei Li.
18
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 2023
The following table sets forth the equity awards outstanding at December
31, 2023 for each of our named executive officers. As of December 31, 2023, there were no outstanding stock awards for named executive
officers.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
Option Awards
Equity
incentive
plan
awards:
Number of
Number of
Number of
securities
securities
securities
underlying
underlying
underlying
unexercised
Option
unexercised
unexercised
unearned
exercise
Option
options (#)
options (#)
options
price
expiration
Name
Grant Date
exercisable
unexercisable
(#)
($)
date
Yunfei Li, President,
11/29/2021
40,000
-
80,000
(1)
1.96
09/26/2027
Chief Executive Officer
4/11/2023
-
-
300,000
(1)
0.978
06/22/2029
Jiewei Li,
11/29/2021
4,000
-
8,000
1.96
09/26/2027
Chief Financial Officer
4/11/2023
-
-
20,000
0.978
06/22/2029
Xiangyu Pei, Former Interim
11/29/2021
30,000
-
60,000
(2)
1.96
09/26/2027
Chief Financial officer
4/11/2023
-
-
100,000
(2)
0.978
06/22/2029
19
Pay versus Performance
We believe that performance-based compensation
leads to results that are consistent with stockholder and customer interests.
For each covered fiscal year, these
are the names of the CEO and each non-CEO Named Executive Officers whose compensation is included in the Pay versus Performance table
below:
Year
CEO
Non-CEO NEOs
2023
Yunfei Li
Jiewei Li, Xiangyu Pei
2022
Yunfei Li
Xiangyu Pei
2021
Yunfei Li
Xiangyu Pei
The table below provides pay and performance data for the three most
recently completed fiscal years. The use of the term compensation actually paid (CAP) is required and defined
by the SECs rules and does not reflect the actual amount of compensation earned or paid during the applicable year.
Year
Summary Compensation Table Total for CEO
Compensation Actually Paid to CEO(1)
Average Summary Compensation Table Total for Other NEOs
Average Compensation Actually Paid to Other NEOs(2)
Value of $100 Investment Based on: Company Total Shareholder Return
Net Income (Loss)
2023
$
321,164
548,962
$
79,308
93,757
$
20.75
$
(8,539,327
)
2022
177,658
235,853.85
115,556
155,306.32
$
19.57
$
(11,327,811
)
2021
$
293,557
911,229.67
$
169,066
524,584.00
$
30.83
$
61,559,144
(1)
Amounts deducted or added to calculate the compensation actually paid
to Yunfei Li for each of the following fiscal years
Plus: FV
as of fiscal
year end of
stock and
option
awards
granted in
covered
year
Plus:
Change in
FVof
outstanding
unvested
stock and
option
awards
from prior
years
Plus:
Change in
FV of
stock and
option
awards
from prior
years that
vested in
the
covered
year
Plus:
For awards
granted
in the
covered
year that
vested
during
the
covered
year
Less: FV
at prior
fiscal
year- end
of stock
and option
awards
forfeited
during
the
covered
year
Compensation
actually paid
$
$
$
$
$
$
$
$
2023
79,308
-7,989
13,302
-56
-
11,350
-2158
93,757
2022
115,556.00
-2,555.00
0
33,905.32
8,400.00
-
-
155,306.32
2021
169,066.00
-64,182.00
234,000.00
105,000.00
80,700.00
-
-
524,584.00
Relationship between Financial Performance
Measures and Executive Compensation Actually Paid
As illustrated in the above table, for the fiscal
year ended December 31, 2023, the summary compensation table total for our PEO and average summary compensation table for our non-PEO
NEOs were $321,164 and $79,308, respectively, and the amounts actually paid to our PEO and average amounts actually paid to our non-PEO
NEOs based on CAP were $548,962 and $93,757, respectfully. During such period, the cumulative total shareholder return (TSR)
of our Common Stock for an initial fixed $100 investment was $20.75.
For the fiscal year ended December 31, 2022, the
summary compensation table total for our PEO and average summary compensation table for our non-PEO NEOs were $177,658 and $115,556, respectively,
and the amounts actually paid to our PEO and average amounts actually paid to our non-PEO NEOs based on CAP were $235,853.85 and $155,306.32,
respectfully. During such period, the cumulative total shareholder return (TSR) of our Common Stock for an initial fixed
$100 investment was $19.57.
For the fiscal year ended December 31, 2021, the
summary compensation table total for our PEO and average summary compensation table for our non-PEO NEOs were $293,557 and $169,066, respectively.
The amounts actually paid to our PEO and average amounts actually paid to our non-PEO NEOs based on CAP were also $911,229.67 and $524,584.00,
respectfully. During such period, the cumulative TSR of our Common Stock for an initial fixed $100 investment was $30.83.
The Companys fiscal 2021 net income of $61,559,144 decreased
to net loss of $11,327,811 in fiscal 2022. The Company had a net loss of $8,539,327 in fiscal 2023.
Compensation of Directors
On April 11, 2023, pursuant to the 2015
Plan, each of our independent directors was granted 10,000 restricted share units, or RSUs, of the Companys common stock, which
vested in two equal installments on June 30 and December 31, 2023, respectively. On the same date, each of our independent directors was
granted an option to purchase 20,000 shares of common stock, which vest in four equal installments semi-annually with the first installment
vesting on June 30, 2024.
The following table sets forth the total compensation earned by our
non-employee directors during our fiscal year ended December 31, 2023:
Fees
Earned or
Paid in
Stock
Cash
Awards
Total
Name
($)
($)
($)
J. Simon Xue
20,000
12,740
32,740
Martha C. Agee
20,000
12,740
32,740
Jianjun He
20,000
12,740
32,740
We do not maintain a medical, dental or retirement benefits plan for
the directors.
21
Except as disclosed in this annual report, we
have not compensated, and will not compensate, our non-independent directors, Mr. Yunfei Li and Ms. Xiangyu Pei, 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.
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 2023, except that one Form 4, covering one transaction, was filed late by Mr. Yunfei
Li, our Chief Executive Officer and Chairman, and one Form 4, covering one transaction, was filed late by Ms. Xiangyu Pei, our Director
and former Interim Chief Financial Officer.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Transactions with Related Persons
The following is a summary of reportable transactions
in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average
of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or
indirect material interest (other than compensation described under Item 11 Executive Compensation).
Name of Entity or Individual
Relationship with the Company
New Era Group Zhejiang New Energy Materials Co., Ltd.
Mr.
Xiangqian Li, the Companys former CEO, is a director of Zhengzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly
owned subsidiary of BAK SZ.
(b)
Mr.
Xiangqian Li, the Companys former CEO, is a director of Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd.
On September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. (Nanjing CBAK) entered into an Equity Transfer Agreement
(the Equity Transfer Agreement) with Shenzhen BAK Battery Co., Ltd. (SZ BAK), under which SZ BAK shall sell
a five percent (5%) equity interest in Shenzhen BAK Power Battery Co., Ltd. (BAK SZ) to Nanjing CBAK for a purchase price
of RMB260 million (approximately $35.7 million).
(c)
On
September 27, 2023, Hitrans entered into an Equity Transfer Contract (the Equity Transfer Contract) with Mr. Shengyang
Xu, pursuant to which Hitrans will initially acquire a 26% equity interest in Zhejiang Shengyang Renewable Resources Technology Co.,
Ltd. (Zhejiang Shengyang) from Mr. Xu, an individual who currently holds 97% of Zhejiang Shengyang, for a price of RMB28.6
million (approximately $3.9 million) (the Initial Acquisition). Neither Mr. Xu, nor Zhejiang Shengyang is related to the
Company.
(d)
Zhengzhou
BAK Battery Co., Ltd has 51% equity interest in Fuzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary
of BAK SZ.
22
Related party transactions
The Company entered into the following significant related party transactions:
For the
year ended
December31,
2022
For the
year ended
December31,
2023
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd
$
26,819,454
$
10,999,732
Purchase of materials from Zhejiang Shengyang Renewable Resources Technology Co., Ltd.
20,303,783
12,725,193
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd
53,236,804
27,872,002
Sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd
8,681,496
66,560
Sales of batteries to Fuzhou BAK Battery Co., Ltd
-
105,010
Related party balances
Apart from the above, the Company recorded the following significant
related party balances as of December 31, 2022 and 2023:
Receivables from former subsidiary
December31,
2022
December31,
2023
Receivables from Shenzhen BAK Power Battery Co., Ltd
$
5,518,052
$
74,946
Balance as of December 31, 2022 and 2023 represented trade receivable
for sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd.
Other balances due from/ (to) related parties
December31,
2022
December31,
2023
Trade receivable, net Zhengzhou BAK Battery Co., Ltd (i)
$
9,156,383
$
12,441,715
Bills receivable Issued by Zhengzhou BAK Battery Co., Ltd (ii)
$
2,941,683
$
-
Trade payable, net Zhengzhou BAK Battery Co., Ltd (iii)
$
5,629,343
$
803,685
Trade payable, net Zhejiang Shengyang Renewable Resources Technology Co., Ltd
$
3,201,814
$
3,489,324
Deposit paid for acquisition of long-term investments Shenzhen BAK Power Battery Cp., Ltd
$
-
7,101,492
Dividend payable to non-controlling interest of Hitrans
$
1,290,942
$
1,256,745
(i)
Representing
trade receivable from sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd. Up to the date of this report, Zhengzhou BAK
Battery Co., Ltd. repaid $7.4 million to the Company.
(ii)
Representing
bills receivable issued by Zhengzhou BAK Battery Co., Ltd. The Company endorsed the bills receivable as of December 31, 2022 to suppliers
for settling trade payable subsequent to December 31, 2022.
(iii)
Representing
trade payable on purchase of batteries from Zhengzhou BAK Battery Co., Ltd.
23
Payables to a former subsidiary
Payables to a former subsidiary as of December 31, 2022 and 2023 consisted
of the following:
December31,
December31,
2022
2023
Payables to Shenzhen BAK Power Battery Co., Ltd
$
(358,067
)
$
(411,111
)
Balance as of December 31, 2022 and 2023 consisted of payables for
purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.
Guarantees for the Company
On January 17, 2022, we obtained a one-year term
facility from Agricultural Bank of China with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 105%
of benchmark rate of the Peoples Bank of China (PBOC) for short-term loans, which is 3.85% per annum. The facility
was guaranteed by the Companys CEO, Mr. Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui Yuan and secured by an unrelated third
party, Jiangsu Credits Financing Guarantee Co., Ltd. We borrowed RMB10 million (approximately $1.4 million) on the same date for a term
until January 16, 2023. We repaid the loan early on January 5, 2023. On January 6, 2023, we borrowed a one-year term loan of RMB10 million
(approximately $1.4 million) for a period of one year until 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.
On February 9, 2022, we obtained a one-year term facility from Jiangsu
Gaochun Rural Commercial Bank with a maximum amount of RMB10 million (approximately $1.4 million) bearing interest at 124% of benchmark
rate of the Peoples Bank of China (PBOC) for short-term loans, which is 4.94% per annum. The facility was guaranteed
by the Companys CEO, Mr. Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui Yuan. We borrowed RMB10 million (approximately $1.4
million) on February 17, 2022 for a term until January 28, 2023. We repaid the loan early on January 16, 2023. On January 17, 2023, we
borrowed a one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 129% of benchmark rate of PBOC for short-term
loans, which is 4.70% per annum for a term until January 13, 2024.
On March 8, 2022, we obtained a one-year term
facility from China Zheshang Bank Co., Ltd. Shangyu Branch with a maximum amount of RMB10 million (approximately $1.4 million) bearing
interest at 5. 5% per annum. The facility was guaranteed by 100% equity in CBAK Power held by BAK Asia and the Companys CEO, Mr.
Yunfei Li. The Company borrowed RMB10 million (approximately $1.6 million) on the same date. On May 17, 2022, we repaid the loan principal
and related loan interests.
On April 28, 2022, we obtained a three-year term facility from Industrial
and Commercial Bank of China Nanjing Gaochun branch, with a maximum amount of RMB12 million (approximately $1.7 million) with the term
from April 21, 2022 to April 21, 2025. The facilities were guaranteed by our CEO, Mr. Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui
Yuan. Under the facility, we borrowed RMB10 million (approximately $1.4 million) on April 29, 2022, bearing interest at 3.95% per annum
for a term until April 29, 2023. We repaid RMB10 million (approximately $1.4 million) on April 19, 2023. On April 20, 2023, we borrowed
another one-year loan of RMB10 million (approximately $1.4 million) bearing interest at 102.5% of benchmark rate of PBOC for short-term
loans, which is 3.90% per annum for a term until April 19, 2024.
24
On June 22, 2022, we obtained another one-year
term facility from China Zheshang Bank Co., Ltd. Shangyu Branch with a maximum amount of RMB10 million (approximately $1.4 million) bearing
interest at 4.5% per annum. The facility was guaranteed by 100% equity in CBAK Power held by BAK Asia and our CEO, Mr. Yunfei Li. The
Company borrowed RMB10 million (approximately $1.4 million) on the same date for a term until June 21, 2023. We repaid the loan on November
10, 2022.
On September 25, 2022, we entered into a new one-year
term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately $1.3 million) bearing interest
rate at 4.81% per annum. The facility was guaranteed by 100% equity in CBAK Nanjing held by BAK Investment and our CEO, Mr. Yunfei Li
and Mr. Yunfei Lis wife Ms. Qinghui Yuan. We borrowed RMB9 million (approximately $1.3 million) on September 27, 2022 for a term
until September 24, 2023. We repaid the loan on September 24, 2023.
We entered into another one-year term facility
with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately $1.2 million) bearing interest rate at
4.6% per annum for a period from September 27, 2023 to August 31, 2024. The facility was guaranteed by 100% equity in CBAK Nanjing held
by BAK Investment and the Companys CEO, Mr. Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui Yuan. We borrowed RMB9 million
(approximately $1.3 million) on September 27, 2023 for a term until September August 31, 2024.
On January 7, 2023, we obtained a two-year term
facility from Postal Savings Bank of China, Nanjing Tianhe 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 Companys CEO, Mr. Yunfei Li, Mr. Yunfei
Lis wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd. We borrowed RMB5 million (approximately $0.7 million) on January
12, 2023 for a term of one year until January 11, 2024, bearing interest at 3.65% per annum.We repaid the above early on June 15,
2023. On June 27, 2023, we entered into another loan agreement for one year from June 27, 2023 to June 26, 2024 under the two-year term
facility for a maximum loan amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.65% per annum. The Company
borrowed RMB10 million (approximately $1.4 million)on the same date. The loan was guaranteed by our CEO, Mr. Yunfei Li, Mr. Yunfei
Lis wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd.
On April 19, 2023, we and Bank of Nanjing Gaochun
Branch entered into a short-term loan agreement for one year from April 10, 2023 to April 9, 2024 for RMB10 million (approximately $1.4
million) bearing interest rate at 3.7% per annum. We borrowed RMB10 million (approximately $1.4 million) on April 23, 2023. The loan was
guaranteed by our CEO, Mr. Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui Yuan.
On July 31, 2023, we obtained a three-year term
facility from Bank of China Gaochun Branch, with a maximum amount of RMB10 million (approximately $1.4 million) with the term from July
31, 2023 to July 30, 2026. The facility was guaranteed by our CEO, Mr, Yunfei Li and Mr. Yunfei Lis wife Ms. Qinghui Yuan. Under
the facility, we borrowed RMB10 million (approximately $1.4 million) on July 31, 2023, bearing interest rate at 3.15% per annum.
Promoters and Certain Control Persons
We did not have any promoters
at any time during the past five fiscal years.
PROPOSAL 2. RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Audit Committee has selected ARK Pro CPA Co to serve as the
Companys independent auditors for the fiscal year ending December 31, 2024. We are asking our stockholders to ratify our companys
selection of ARK Pro CPA Co as our independent registered public accountants at the Annual Meeting. Although ratification is not
required by our amended and restated bylaws or otherwise, the Board of Directors is submitting the selection of ARK Pro CPA Co to
our stockholders for ratification as a matter of good corporate governance practice. If the selection is not ratified, the Audit Committee
will consider whether it is appropriate to select another registered public accounting firm. Even if the selection is ratified, the Audit
Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that
such a change would be in the best interests of our company and our stockholders.
We expect representatives
of ARK Pro CPA Co to be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so,
and will be available to respond to appropriate questions from stockholders.
Independent Registered Public Accounting Firms
Fees and Services
On July 18, 2023,
the Board of Directors of the Company approved the dismissal of Centurion ZD CPA Co. (Centurion)as
independent registered public accounting firm of the Company, and approved the appointment of ARK Pro CPA Co
(ARK) as its independent registered public accounting firm.
Audit Fees
Centurion billed us $513,721 and $
256,813
and for the fiscal years ended December 31, 2022 and 2023, respectively, 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 and assistance
with the Securities Act filings.
ARK billed us $62,000 for the fiscal year ended December 31, 2023 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.
25
Audit-Related Fee
s
The fees for the audit-related services billed
and to be billed by Centurion for the year ended December 31, 2022 and 2023 amounted to $2,500 and nil, respectively.
We did not engage ARK to provide assurance or related services during the year ended December 31, 2023.
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 Companys 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.
Required Vote
Ratification of ARK Pro CPA Co as our Companys independent
registered public accountant for the fiscal year ending December 31, 2024 requires the affirmative vote of a majority of the votes cast
(meaning the number of shares of Common Stock voted for this proposal must exceed the number of shares of Common Stock voted
against this proposal). Abstentions will have no effect on this proposal because an abstention does not count as a vote
cast. There will be no broker non-votes for this proposal because brokers have discretion to vote the shares held for the
beneficial owners.
Recommendation of the Board
The Board of Directors recommends a vote FOR ratification
of the selection of ARK Pro CPA Co as the Companys independent registered public accounting firm for the fiscal year ending
December 31, 2024.
26
OTHER MATTERS
Our Board of Directors is
not aware of any business to come before the Annual Meeting other than those matters described above in this Proxy Statement. However,
if any other matters should properly come before the Annual Meeting, it is intended that proxies in the accompanying form will be voted
in accordance with the judgment of the person or persons voting the proxies.
STOCKHOLDER COMMUNICATIONS
The Company has a process
for stockholders who wish to communicate with the Board of Directors. Stockholders who wish to communicate with the Board of Directors
may write to it at the Companys address given above. These communications will be reviewed by one or more employees of the Company
designated by the Board of Directors, who will determine whether they should be presented to the Board of Directors. The purpose of this
screening is to allow the Board of Directors to avoid having to consider irrelevant or inappropriate communications.
STOCKHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING
If you wish to have a proposal
included in our proxy statement for next years annual meeting in accordance with Rule 14a-8 under the Exchange Act, your proposal
must be received by the Secretary of the Company at BAK Industrial Park, Meigui Street, Huayuankou Economic Zone, Dalian City, 116450,
China, no later than December 31, 2024. A proposal which is received after the applicable date or which otherwise fails to meet the requirements
for stockholder proposals established by the SEC will not be included. The submission of a stockholder proposal does not guarantee that
it will be included in the proxy statement.
ANNUAL REPORT ON FORM 10-K
We will furnish without
charge to each person solicited by this Proxy Statement, on the written request of such person, a copy of our Annual Report on Form 10-K
with any amendments, including the financial statements and financial statement schedules, as filed with the SEC for our most recent fiscal
year. Such written requests should be directed to the Secretary of the Company, at our address listed on the top of page one of this Proxy
Statement.
A copy of our Annual Report on Form 10-K, with any amendments, is also made available on our website at
www.cbak.com.cn
after it is filed with the SEC.
October 11, 2024
By Order of the Board of Directors
/s/ Yunfei Li
Chairman
27
CBAK ENERGY TECHNOLOGY, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 6, 2024
Annual Meeting Proxy Card
This Proxy is Solicited on Behalf of the Board
of Directors
The undersigned stockholder of CBAK ENERGY TECHNOLOGY, INC., a Nevada
corporation (the Company), acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, dated
October 11, 2024, and hereby constitutes and appoints Mr. Yunfei Li, the Companys Chairman, President and Chief Executive Officer,
and Mr. Jiewei Li, the Companys Chief Financial Officer, or either of them acting singly in the absence of the other, with full
power of substitution in either of them, the proxies of the undersigned to vote with the same force and effect as the undersigned all
shares of the Companys Common Stock which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on December 6, 2024 (the Annual Meeting), and at any adjournment or adjournments thereof, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said proxies may do or cause to be done by virtue thereof with respect to the following
matters:
The undersigned hereby instructs
said proxies or their substitutes:
The Board of Directors recommends that you vote FOR the following:
1.
Elect as Directors the nominees listed below:
01 Yunfei Li
FOR ☐
AGAINST☐
ABSTAIN☐
02 J. Simon Xue
FOR☐
AGAINST☐
ABSTAIN☐
03 Martha C. Agee
FOR☐
AGAINST☐
ABSTAIN☐
04 Jianjun He
FOR☐
AGAINST☐
ABSTAIN☐
05 Xiangyu Pei
FOR☐
AGAINST☐
ABSTAIN☐
The Board of Directors recommends that you vote FOR the following:
2.
Ratify
the selection of ARK Pro CPA Co as the Companys independent registered public accounting firm for fiscal year ending December
31, 2024.
FOR☐
AGAINST☐
ABSTAIN☐
NOTE
: In their discretion, the proxies
are authorized to vote upon such other business as may properly come before the Annual Meeting, and any adjournment or adjournments thereof.
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES
OF COMMON STOCK COVERED HEREBY WILL BE VOTED AS SPECIFIED HEREIN. IF NO SPECIFICATION IS MADE, SUCH SHARES WILL BE VOTED FOR
THE ELECTION OF ALL NOMINATED DIRECTORS (PROPOSAL 1), AND
For the ratification
of the appointment of ARK Pro CPA Co as the Companys independent registered public accounting firm for the fiscal year ending
December 31, 2024 (Proposal 2).
IN THEIR DISCRETION, THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE ANNUAL
MEETING and any adjournment or adjournments thereof.
I (we) acknowledge receipt of the Notice of Annual Meeting of Stockholders
and the Proxy Statement dated October 11, 2024, and ratify all that the proxies, or either of them, or their substitutes may lawfully
do or cause to be done by virtue hereof and revoke all former proxies.
If you are voting by mail, please sign, date
and mail this proxy immediately in the enclosed envelope. You are also permitted and encouraged to vote online by following the instructions
on the Notice of Internet Availability of Proxy Materials that was separately mailed to you.
Name
Name (if joint)
Date _____________, 2024
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as it appears hereon. When signing as joint tenants, all parties in the joint tenancy must sign. When a proxy is given by a corporation, it should be signed by an authorized officer and the corporate seal affixed. No postage is required if returned in the enclosed envelope, if mailed in the United States.
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FUND
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