CBAK Energy Technology, Inc. Leases Disclosure
| 11. | Lease |
| (a) | Prepaid land use rights |
| Prepaid land | ||||
| lease payments | ||||
| Balance as of January 1, 2024 | $ | 11,712,704 | ||
| Amortization charge for the year | (316,811 | ) | ||
| Foreign exchange adjustment | (319,920 | ) | ||
| Balance as of December 31, 2024 | 11,075,973 | |||
| Addition for the year | 1,099,537 | |||
| Amortization charge for the period | (331,189 | ) | ||
| Foreign exchange adjustment | 464,543 | |||
| Balance as of December 31, 2025 | $ | 12,308,864 | ||
In August 2014 and November 2021, the Company acquired land use rights to build a factory of the Company in Dalian and Zhejiang, PRC.
Yuanchuang acquired a land use right on May 13, 2025 to build a factory in Anhui, PRC for cathode materials manufacturing.
Lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 36 to 50 years, and no ongoing payments will be made under the terms of these land leases.
Amortization expenses of the prepaid land use rights were $316,811 and $331,189 for the years ended December 31, 2024 and 2025, respectively.
impairment loss was made to the carrying amounts of the prepaid land use right for the years ended December 31, 2024 and 2025.
| (b) | Operating lease |
On April 6, 2021, Nanjing CBAK entered into a lease agreement for warehouse space in Nanjing with a three year term, commencing on April 15, 2021 and expiring on April 14, 2024. The monthly rental payment is approximately RMB97,743 ($14,146) per month. The lease was renewed for one year with a monthly rental of RMB86,913 (approximately $11,907) to May 14, 2025 and further extend for three years with a monthly rental of RMB94,156 (approximately $12,983) from May 14, 2025 to May 14, 2028.
On June 1, 2021, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and oxygen, commencing on July 1, 2021. The monthly rental payment is approximately RMB5,310 ($773) per month.
On December 9, 2021, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a three year term, commencing on December 10, 2021 and expiring on December 9, 2024. The monthly rental payment is approximately RMB10,400 ($1,514) per month for the first year, RMB10,608 ($1,544) and RMB 10,820 ($1,575) per month from the second year and third year, respectively.
On March 1, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a five year term, commencing on March 1, 2022 and expiring on February 28, 2027. The monthly rental payment is approximately RMB15,840 ($2,306) per month for the first year, with 2% increase per year.
On August 1, 2022, Hitrans entered into a lease agreement for warehouse spaces in Zhejiang with a one and half years term, commencing on August 1, 2022 and expiring on January 31, 2024. The monthly rental payment is RMB60,394 ($8,792) per month.
On October 20, 2022, CBAK Power entered into a lease agreement for staff quarters spaces in Dalian with a three year term, commencing on October 20, 2022 and expiring on October 19, 2025. The monthly rental payment is RMB61,905 ($9,012) per month.
On December 20, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a five year term commencing on December 20, 2022 and expiring on December 19, 2027. The monthly rental payment is RMB52,000 ($7,570) per month for the first year, with 2% increase per year.
On December 30, 2022, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and oxygen to December 29, 2027. The monthly rental payment is approximately RMB7,265 ($1,058) per month. The lease was early terminated in June 2024.
On April 20, 2023, Hitrans entered into another lease agreement for extra staff quarters spaces in Zhejiang with a three year term commencing on May 1, 2023 and expiring on April 30, 2026. The monthly rental payment is RMB28,000 ($3,860) per month. On July 1, 2024, Hitrans entered into an amendment to early terminate the lease and entered into a new lease for a period of two years from July 1, 2024 to June 30, 2026. The monthly rental payment is RMB14,000 ($1,995) per month.
Nanjing CBAK entered into a lease agreement for office and factory spaces in Nanjing for a period of one year, commencing on August 1, 2023 and expiring on July 31, 2024. The monthly rental payment is approximately RMB160,743 ($22,649) per month. The lease was renewed for three years to August 31, 2027 with the same monthly rental.
CBAK Shangqiu entered into a lease agreement for staff quarters spaces in Shangqiu with a six-year term commencing on October 1, 2023 and expiring on September 30, 2029. The monthly rental payment is approximately RMB11,400 ($1,584) per month. On January 1, 2025, CBAK Shangqiu entered into an amendment to reduce the leased space and shorten the lease term to December 31, 2025. The new monthly rental is RMB7,717 ($1,003) per month.
CBAK Shangqiu entered into a lease agreement for manufacturing and factory spaces in Shangqiu with a term of six years, commencing on January 1, 2024 to December 31, 2029. The monthly rental payment is RMB265,487 ($36,769) per month. The landlord unconditionally forgave the accrued annual rent due to unsatisfied performance from the leasing spaces. The Company recognized the forgiveness as gains for the year ended December 31, 2025.
On March 1, 2024, Hitrans entered into a lease agreement with liquid gas supplier for forty-five months for supplying liquid nitrogen until December 11, 2027. The monthly rental payment is approximately RMB19,309 ($2,674) per month.
On April 26, 2024, Hitrans entered into a lease agreement with liquid gas supplier for a five-year term for supplying liquid argon to April 25, 2029. The monthly rental payment is approximately RMB1,062 ($146) per month.
Nanjing CBAK entered into a lease agreement for staff quarters spaces in Nanjing from March 1, 2024 to February 28, 2026. The monthly rental is RMB22,155 ($3,081) per month. On March 1, 2025, the month rental was reduced to RMB19,936 ($2,740) per month.
CBAK Shangqiu entered into a lease agreement for staff quarters spaces in Shangqiu from May 16, 2024 to December 31, 2029 for a quarter rental of RMB19,404 ($2,765).
Nanjing CBAK entered into another lease for staff quarters spaces in Nanjing from June 1, 2024 to May 31, 2025. The monthly rental payment is RMB39,633 ($5,511) per month.
BAK Asis entered into a lease for office in Hong Kong from June 16, 2025 to June 30, 2028. The monthly rental payment was HKD10,000 ($1,290) per month.
Operating lease expenses for the years ended December 31, 2024 and 2025 for the capitation agreement was as follows:
| December 31,
2024 | December 31,
2025 | |||||||
| Operating lease cost – straight line | $ | 1,270,656 | $ | 747,513 | ||||
| (c) | Company as lessee - |
| December 31, | December 31, | |||||||
| 2024 | 2025 | |||||||
| Property, plant and equipment, at cost | $ | $ | 4,924,746 | |||||
| Accumulated depreciation | (2,569,405 | ) | ||||||
| Impairment | (2,355,341 | ) | ||||||
| Property, plant and equipment, net under finance lease | ||||||||
| Finance lease liabilities, current | 1,307,170 | |||||||
| Finance lease liabilities, non-current | ||||||||
| Total finance lease liabilities | $ | $ | 1,307,170 | |||||
The components of finance lease expenses for the years ended December 31, 2024 and 2025 were as follows:
| December 31, | December 31, | |||||||
| 2024 | 2025 | |||||||
| Finance lease cost: | ||||||||
| Depreciation of assets | $ | $ | ||||||
| Interest of lease liabilities | 79,309 | 1,708 | ||||||
| Total lease expenses | $ | 79,309 | $ | 1,708 | ||||
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2025:
| Operating leases |
Finance leases |
|||||||
| 2026 | $ | 1,097,829 | $ | 1,316,821 | ||||
| 2027 | 1,190,354 | |||||||
| 2028 | 558,013 | |||||||
| 2029 | 464,157 | |||||||
| 2030 | 454,024 | |||||||
| Thereafter | ||||||||
| Total undiscounted cash flows | 3,764,377 | 1,316,821 | ||||||
| Less: imputed interest | (323,146 | ) | (9,651 | ) | ||||
| Present value of lease liabilities | $ | 3,441,231 | $ | 1,307,170 | ||||
Lease term and discount rate:
| December 31, 2024 | December 31, 2025 | |||||||
| Weighted-average remaining lease term (years) | ||||||||
| Land use rights | 35.9 | 36.3 | ||||||
| Operating leases | 4.16 | 3.13 | ||||||
| Finance lease | 0.92 | |||||||
| Weighted-average discount rate | ||||||||
| Land use rights | ||||||||
| Operating lease | 4.33 | % | 4.19 | % | ||||
| Finance lease | 2.9 | 0.8 | % | |||||
Supplemental cash flow information related to leases where the Company was the lessee for the year ended December 31, 2024 and 2025 was as follows:
| December 31,
2024 |
December 31,
2025 |
|||||||
| Operating cash outflows from operating assets | $ | 866,001 | $ | 893,742 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2021 | Apr 15, 2022 | |
| 2020 | Apr 13, 2021 | |
| 2019 | May 14, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.