ITEM
1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
As
previously disclosed, on July 24, 2019, CBAK Energy Technology, Inc. (the “Company”) entered into a securities purchase
agreement with Atlas Sciences, LLC (the “Lender”), pursuant to which the Company issued a promissory note (the “First
Note”) to the Lender. The First Note has an original principal amount of $1,395,000, bears interest at a rate of 10% per
annum and would mature 12 months after the issue date, unless earlier paid or redeemed in accordance with its terms. The Company
received proceeds of $1,250,000 after an original issue discount of $125,000 and payment of the Lender’s expenses of $20,000.
On
December 30, 2019, the Company entered into another securities purchase agreement with the Lender, pursuant to which the Company
issued a promissory note (the “Second Note” and together with the “First Note”, the “Notes”)
to the Lender, which has an original principal amount of $1,670,000, bears interest at a rate of 10% per annum and will mature
12 months after the issue date, unless earlier paid or redeemed in accordance with its terms. The Company received proceeds of
$1,500,000 after an original issue discount of $150,000 and payment of Lender’s expenses of $20,000.
Pursuant
to the Notes, beginning on the date that is six (6) months after the Purchase Price Date of the respective Note (as defined in
the Notes), Lender will have the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of outstanding
balance of each Note up to $250,000.00 per calendar month.
Starting
on January 27, 2020, the Company entered into multiple exchange agreements with the Lender (the “Exchange Agreements”).
Pursuant to each Exchange Agreement, the parties partitioned a new promissory note in various original principal amounts from
the outstanding balance of the Notes and exchanged the partitioned promissory note for the issuance of shares of the Company’s
common stock to the Lender. Each above exchange was entered into and consummated through mutual negotiations between the parties
on a case-by-case basis and in each case, the Company had the option to decide whether to agree to exchange the debt into its
common stock.
In
order to reduce the transaction costs, on October 12, 2020, the Company and the Lender entered into certain Amendment to
Promissory Notes (the “Amendment”), pursuant to which the Lender has the right at any time until the outstanding
balance of the Notes has been paid in full, at its election, to convert all or any portion of the outstanding balance of the
Notes into shares of common stock of the Company. The conversion price for each conversion will be calculated pursuant to the
following formula: 80% multiplied by the lowest closing price of the Company common stock during the ten (10) trading days
immediately preceding the applicable conversion (the “Conversion Price”). Notwithstanding the foregoing, in no
event will the Conversion Price be less than $1.00. In addition, the total cumulative number of shares of common stock issued
to the Lender under the Notes including all shares of common stock that have been previously issued pursuant to the Exchange
Agreements may not exceed the limitation under Nasdaq Listing Rule 5635(d) (“Nasdaq 19.99% Cap”). Once the
Nasdaq 19.99% Cap is reached, any remaining outstanding balance of the Notes must be repaid in cash.
The
foregoing descriptions of the Amendment are not complete and are qualified in their entireties by reference to the full text of
the Amendment, copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.