CBAK Energy Technology, Inc. (Parent Company)

12 Months Ended

Dec. 31, 2017

CBAK Energy Technology, Inc. (Parent Company) [Text Block]

25. CBAK Energy Technology, Inc. (Parent Company)

Under PRC regulations, subsidiaries in PRC (“the PRC subsidiaries”) may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC GAAP. In addition, the PRC subsidiaries are required to set aside at least 10% of their after tax net profits each year, if any, to fund the statutory general reserve until the balance of the reserves reaches 50% of their registered capital. The statutory general reserves are not distributable in the form of cash dividends to the Company and can be used to make up cumulative prior year losses, if any, and may be converted into share capital by the issue of new shares to shareholders in proportion to their existing shareholdings, or by increasing the par value of the shares currently held by them, provided that the reserve balance after such issue is not less than 25% of the registered capital. As of September 30, 2016, December 31, 2016 and December 31, 2017 additional transfers of $14,019,489 were required for CBAK Power and CBAK Trading before the statutory general reserve reached 50% of the registered capital of the PRC subsidiaries. As of September 30, 2016, December 31, 2016 and December 31, 2017 there was $1,230,511 appropriation from retained earnings and set aside for statutory general reserves by the PRC subsidiaries. CBAK Trading did not have after tax net profits since its incorporation and therefore no appropriation was made to fund its statutory general reserve as of September 30, 2016, December 31, 2016 and December 31, 2017. CBAK Power had after tax loss of $10,790,255, $1,748,512 and $20,035,942 for the year ended September 30, 2016, transition period for the three months ended December 31, 2016 and year ended December 31, 2017, respectively.

Schedule I of Article 504 of Regulation SX requires the condensed financial information of the registrant (Parent Company) to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender, regulatory agency, foreign government, etc.).

SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CBAK ENERGY TECHNOLOGY, INC.
PARENT COMPANY STATEMENTS OF OPERATIONS
For the years ended September 30, 2016 and December 31, 2017, and the three months ended December 31, 2016
(Unaudited)

		Year ended			Three months			Year   ended
		September 30,			December 31,			December 31,
		2016			2016			2017
REVENUE, net	$	-		$	-		$	-
OPERATING EXPENSES:
Salaries and consulting expenses		(1,565,530	)		(410,239	)		(966,592	)
General and administrative		(439,009	)		(87,185	)		(302,861	)
Total operating expenses		(2,004,539	)		(497,424	)		(1,269,453	)
LOSS FROM OPERATIONS		(2,004,539	)		(497,424	)		(1,269,453	)
OTHER INCOME:		182,708			-			-
LOSS ATTRIBUTABLE TO PARENT COMPANY		(1,821,831	)		(497,424	)		(1,269,453	)
EQUITY IN LOSS OF SUBSIDIARIES		(10,830,363	)		(1,696,973	)		(20,197,888	)
NETLOSS ATTRIBUTABLE TO SHAREHOLDERS	$	(12,652,194	)	$	(2,194,397	)	$	(21,467,341	)

CBAK ENERGY TECHNOLOGY, INC.
PARENT COMPANY BALANCE SHEETS
As of September 30, 2016, December 31, 2016 and 2017
(Unaudited)

		September 30,		December 31,		December 31,
		2016		2016		2017
ASSETS
CURRENT ASSETS:
Other receivables	$	-	$	-	$	-
Total current assets		-		-		-
Interests in subsidiaries		16,684,482		14,253,463		3,744,185
Total assets		16,684,482	$	14,253,463	$	3,744,185
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses and other payables	$	1,594,486	$	1,575,894	$	1,548,209
Total current liabilities		1,594,486		1,575,894		1,548,209
SHAREHOLDERS' EQUITY		15,089,996		12,677,569		2,195,976
Total liabilities and shareholders' equity	$	16,684,482	$	14,253,463	$	3,744,185

CBAK ENERGY TECHNOLOGY, INC.
PARENT COMPANY STATEMENTS OF CASH FLOWS
For the years ended September 30, 2016 and December 31, 2017, and the three months ended December 31, 2016
(Unaudited)

		Year ended			Three months		Year ended
		September 30,			ended December		December
		2016			31, 2016		31,2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	( 12,652,194	)	$	(2,194,397	)	(21,467,341	)
Adjustments to reconcile net loss to net cash used in operating
activities:
Equity in loss of subsidiaries		10,830,363			1,696,973		20,197,888
Share based compensation		1,462,197			345,079		759,292
Change in operating assets and liabilities
Accrued expenses and other payable		(15,697	)		(18,592	)	(27,685	)
Net cash used in operating activities		(375,331	)		(170,937	)	(537,846	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in interest in subsidiaries		(5,141,269	)		170,937		(9,067,432	)
Net cash provided by (used in) investing activities		(5,141,269	)		170,937		(9,067,432	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		5,516,600			-		9,605,278
Net cash provided by financing activities		5,516,600			-		9,605,278
CHANGE IN CASH		-			-		-
CASH, beginning of year		-			-		-
CASH, end of year	$	-		$	-		-

The condensed parent company financial statements have been prepared using the equity method to account for its subsidiaries. Refer to the consolidated financial statements and notes presented above for additional information and disclosures with respect to these financial statements.