Cenntro Inc.

Previous wording

We are an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by either electricity or hydrogen energy sources. Our commercial vehicles are designed to serve a variety of fleet and municipal organizations in support of city services, last-mile delivery and other commercial applications. As of December 31, 2024, we have developed five series of commercial vehicle models, Metro®, Logistar™, Logimax™, Avantier™ and Teemak™. We also provide other delivery platforms including Antric One and iChassie, along with Electric Charger Products. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.

Current wording

We are an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by either electricity or hydrogen energy sources. Our commercial vehicles are designed to serve a variety of fleet and municipal organizations in support of city services, last-mile delivery and other commercial applications. As of December 31, 2025, we have developed six series of commercial vehicle models, Metro®, Logistar™, iChassis™, Avantier™, Teemak™, Bison Motor™ and Antric One. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.

Previous wording

We have also developed and introduced iChassis™: a programmable “smart” chassis that may be controlled by third-party software for various remote controlled or autonomous driving applications. We continue to leverage our technology, vehicle development, and vehicle distribution capabilities with a goal to become a leading provider in the electric commercial vehicle (“ECV”) market. Our greater mission is to provide commercial vehicles that may be powered by sustainable sources while building eco-chains to reduce carbon dioxide for a better environment and quality of life.

Current wording

We have also developed and introduced iChassis™: a programmable “smart” chassis that may be controlled by third-party software for various remote controlled or autonomous driving applications. We are also working on developing hydrogen-powered heavy-duty vehicles to meet the market demand. We continue to leverage our technology, vehicle development, and vehicle distribution capabilities with a goal to become a leading provider in the electric commercial vehicle (“ECV”) market. Our greater mission is to provide commercial vehicles that may be powered by sustainable sources while building eco-chains to reduce carbon dioxide for a better environment and quality of life.

Previous wording

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong alternatives. Prior to COVID-19, battery costs significantly decreased over the past decade. We expect that over the long term, prices will continue to fall. According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021. In real terms, this represented a decline of approximately 89%. We anticipate that battery prices will continue to decrease in the long-term. BNEF further forecasts that average prices are expected to fall by $3/kWh in 2025. Looking ahead, prices are expected to fall further over the next decade amid continued investment in R&D, manufacturing process improvements, and capacity expansion across the supply chain. Lithium prices are expected to ease as more extraction and refining capacity comes online. Based on the updated observed learning rate, BNEF’s 2022 Battery Price Survey predicts that average pack prices should fall below $100/kWh by 2026. By emphasizing investments in technology, supply-chains, vehicle distribution and aftermarket support, we have begun making our own battery packs, preparing battery cell production, by building up vehicle distribution and service networks, and introducing our cloud-based parts distribution systems. As investment in battery technology continues to increase, we believe these cost reductions outlined by BNEF will continue to improve the economics of battery-powered ECVs, like ours.

Current wording

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong alternatives. Prior to COVID-19, battery costs significantly decreased over the past decade. We expect that over the long term, prices will continue to fall. According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021. In real terms, this represented a decline of approximately 89%. We anticipate that battery prices will continue to decrease in the long-term. BNEF further forecasts that average prices are expected to fall by $3/kWh in 2025. Looking ahead, prices are expected to fall further over the next decade amid continued investment in R&D, manufacturing process improvements, and capacity expansion across the supply chain. Lithium prices are expected to ease as more extraction and refining capacity comes online. Battery prices are forecast to drop in 2026, though it’ll be a smaller dip than 2025 due to high costs of raw materials and tariffs. The average price for a battery pack is expected to fall 3% next year to $105 per kilowatt-hour, according to the BNEF survey in 2025. By emphasizing investments in technology, supply-chains, vehicle distribution and aftermarket support, we have begun making our own battery packs, preparing battery cell production, by building up vehicle distribution and service networks, and introducing our cloud-based parts distribution systems. As investment in battery technology continues to increase, we believe these cost reductions outlined by BNEF will continue to improve the economics of battery-powered ECVs, like ours.

Previous wording

In addition to our investment in battery-technology, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles in unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles. Some of our vehicle models have a modular design that allows for local assembly in micro factory facilities that require less capital investment. We manufacture our own vehicle kits for the Metro® in our facilities in China and leverage the economies of scale of and the supply-chain availability in China to manufacture vehicle kits and fully assembled vehicles in our assembly plants in United States and Germany. We believe our distributed manufacturing methodology allows us to execute our business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.

Current wording

In addition to our investment in battery-technology, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles in unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles. Some of our vehicle models have a modular design that allows for local assembly in micro factory facilities that require less capital investment. We manufacture our own vehicle kits for the Metro®, Teemak Series and iClassic Series in our facilities in China and leverage the economies of scale of and the supply-chain availability in China to manufacture vehicle kits and fully assembled vehicles in our assembly plants in United States. We believe our distributed manufacturing methodology allows us to execute our business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.

Previous wording

Our distributed manufacturing model allows us to focus our efforts on the design of ECV models and related technologies while outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated automotive companies. For the last several years, we relied substantially on private label channel partners to assemble and distribute the Metro® from vehicle kits that we manufactured in our facilities. Our vehicle kits and in some cases fully assembled vehicles are completed by third party Original Equipment Manufacturers (“OEMs”) manufacturing partners and, in the case of vehicle kits, assembled in our own facilities in North America and Europe. Our relationships with such third parties, our “manufacturing partners,” have allowed us to forego expensive capital investments in our own facilities and operate within our historic working capital limitations. Throughout 2022 we began to re-align our distribution and marketing strategy away from relying mainly on third-party channel partners to a distribution model that combines wholly-owned EV Centers with local dealers in order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service. Throughout 2024 we have integrated our sales strategy by combining large distributors with our local EV Centers to develop local dealer networks that directly sell to local customers to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.

Current wording

Our distributed manufacturing model allows us to focus our efforts on the design of New Energy Vehicle (“NEV”) models and related technologies while outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated automotive companies. For the past several years, we relied substantially on private label channel partners to assemble and distribute the Metro® from vehicle kits that we manufactured in our facilities. Since 2021, we have expanded our vehicle portfolio beyond the Metro® by leveraging relationships with third party Original Equipment Manufacturers (“OEMs”) manufacturing partners, who complete our vehicle kits and in some case fully assembled vehicles, with final assembly of vehicle kits performed in our own facilities in North America and Europe. Our relationships with such third parties, our “manufacturing partners,” have allowed us to forego expensive capital investments in our own facilities and operate within our historic working capital limitations.

Previous wording

Up until December 31, 2021, our primary revenue stream came from selling ECVs through channel partners. Beginning in 2022, we experimented with different go-to-market strategies across regions. In Europe, while we initially tested an EV center approach by acquiring CAE, a German manufacturer and ECV seller, we returned to our distributor-focused model in 2024 given its proven effectiveness. In North America, we implemented a hybrid approach that combines direct sales to end-customers with strategic distributor partnerships. Historically (i.e. up until end of 2021), these revenues were generated solely by the sale of the Metro®. Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™ and Neibor® 150 in Europe, Clubcar, Logistar™ 210 and Logistar™ 260 in Asia, Avantier™ and Logistar™ 400 in the US. Starting from 2024, we witnessed major increase on revenue in the US market as we shift our focus on the North American market sales, actively participate in the ECV incentive programs initiated by state governments, introduced additional new models for the US market.

Current wording

Up until December 31, 2021, we generate revenue primarily through the sale of ECVs to our channel partners. Beginning in 2022, we experimented with different go-to-market strategies across regions. In Europe, while we initially tested an EV center approach by acquiring CAE, a German manufacturer and ECV seller, we returned to our distributor-focused model in 2024 given its proven effectiveness. In North America, we implemented a hybrid approach that combines direct sales to end-customers with strategic distributor partnerships. Historically (i.e. up until end of 2021), these revenues were generated solely by the sale of the Metro®. Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™, Neibor® 150, Antric® and Avantier™ in Europe, Clubcar, Teemak™, Logistar™ 210, Logistar™ 260 and iChassis™ in Asia, and Avantier™, Logistar™ 210, Logistar™ 400 and Logistar™ 450 in the US, Avantier™ in Africa. We estimate that in year 2026, we will start generating revenue from Bison Motor™, hydrogen-powered heavy-duty vehicles to meet market demand and increased sales from iChassis™ that consists of a programmable “smart” chassis that is currently used by third parties and integrated with their controlling software for various autonomous driving commercial vehicle applications.

Previous wording

Net revenues ended December 31, 2024 and 2023 were generated from (a) vehicles sales, which primarily represent net revenues from sales of Metro® vehicles (including vehicle kits), Logistar™ 200, Logistar™ 210, Logistar™ 210V, Logistar™ 260, Logistar™ 400, Antric®, Avantier™, Logistar™ 100, Neibor® 150 and Clubcar, (b) sales of ECV spare-parts related to our Metro® vehicles, and (c) other sales, which primarily were: (i) the sales of inventory of outsourced ECV batteries and (ii) charges on services provided to channel partners for technical developments and assistance with vehicle homologation or certification.

Current wording

Net revenues ended December 31, 2025 and 2024 were generated from (a) vehicles sales, which primarily represent net revenues from sales of Metro® vehicles (including vehicle kits), Logistar™ 200, Logistar™ 210, Logistar™ 260, Logistar™ 300, Logistar™ 400, Logistar™ 450, Seres 5, Antric®, Avantier™, Logistar™ 100 and Clubcar, (b) sales of ECV spare-parts related to our Metro® vehicles, and (c) other sales, which primarily were: (i) the sales of inventory of outsourced ECV batteries and (ii) charges on services provided to channel partners for technical developments and assistance with vehicle homologation or certification.

Previous wording

Cost of goods sold mainly consists of production-related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of plants and equipment, manufacturing waste treatment processing fees, shipping cost and inventory write-downs. We incur cost of goods sold in relation to (i) vehicle sales and spare-part sales, including, among others, purchases of raw materials, labor costs, and manufacturing expenses that related to ECVs, and (ii) other sales, including cost and expenses that are not related to ECV sales.

Current wording

Cost of goods sold mainly consists of production-related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of plants and equipment, manufacturing waste treatment processing fees, shipping cost, inventory write-downs and inventory write-off. We incur cost of goods sold in relation to (i) vehicle sales and spare-part sales, including, among others, purchases of raw materials, labor costs, and manufacturing expenses that related to ECVs, and (ii) other sales, including cost and expenses that are not related to ECV sales.

Previous wording

Cost of goods sold also includes inventory write-downs. Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and is comprised of direct materials, direct labor cost and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Write-downs are recorded in the cost of goods sold in our statements of operations and comprehensive loss.

Current wording

Cost of goods sold also includes inventory write-downs and write-off. Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and is comprised of direct materials, direct labor cost and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Inventory write-off, including losses from physical inventory counts or obsolescence where no future economic benefit is expected, are recognized in cost of goods sold in the period incurred. Write-downs are recorded in the cost of goods sold in our statements of operations and comprehensive loss.

Previous wording

Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, costs associated with assets acquired for research and development, product development costs, production inspection and testing expenses, product strategic advisory fees, third-party engineering and contractor support costs and allocated overhead. We expect our research and development expenses to increase as we continue to invest in new ECV models, new materials and techniques, vehicle management and control systems, digital control capabilities and other technologies.

Current wording

Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, costs associated with assets acquired for research and development, product development costs, production inspection and testing expenses, product strategic advisory fees, third-party engineering and contractor support costs and allocated overhead. Research and development expenses decreased during the year, primarily due to our cost control measures and the prioritization of key development projects. We expect our research and development expenses to increase as we continue to invest in new ECV models, new materials and techniques, vehicle management and control systems, digital control capabilities and other technologies.

Previous wording

Selling and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, freight costs, travel and entertainment expenses and allocated overhead. Marketing programs consist of advertising, tradeshows, events, corporate communications and brand-building activities. We expect our selling and marketing expenses to increase as we introduce our new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally.

Current wording

Selling and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, freight costs, travel and entertainment expenses and allocated overhead. Marketing programs consist of advertising, tradeshows, events, corporate communications and brand-building activities. Our selling and marketing expenses decreased during the year, primarily due to decrease of revenue, improved cost efficiencies and more targeted marketing initiatives. We expect our selling and marketing expenses to increase as we introduce our new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally.

Previous wording

We adopted ASC 326 Financial Instruments – Credit Losses using the modified retrospective approach through a cumulative-effect adjustment to accumulated deficit from January 1, 2023 and interim periods therein. We use an expected credit loss model for the impairment of accounts receivable as of period ends. We believe the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determine expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. We measure the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, we will evaluate such accounts receivable for expected credit loss on an individual basis. Allowance for credit losses balance are written off and deducted from allowance, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. We expect provision for credit losses to decrease in the future as we shift our sales more to FOB terms, when goods will be delivered only if material payment are received.

Current wording

We adopted ASC 326 Financial Instruments - Credit Losses using the modified retrospective approach through a cumulative-effect adjustment to accumulated deficit from January 1, 2023 and interim periods therein. We use an expected credit loss model for the impairment of accounts receivable as of period ends. We believe the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determine expected credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current conditions and forecasted changes. We measure the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, we will evaluate such accounts receivable for expected credit loss on an individual basis. Allowance for credit losses balance are written off and deducted from allowance, when receivables are deemed uncollectible, after all collection efforts have been exhausted and the potential for recovery is considered remote. We expect provision for credit losses to decrease in the future as we shift our payment terms, when goods will be delivered only if material payment are received.

Previous wording

In applying the goodwill impairment assessment, we may assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, but are not limited to, economic, market and industry conditions, cost factors and overall financial performance of the reporting unit. If after assessing these qualitative factors, the Company determines it is “more-likely-than not” that the fair value is less than the carrying value, a quantitative assessment of goodwill is required.

Current wording

In applying the goodwill impairment assessment, we may assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, but are not limited to, economic, market and industry conditions, cost factors and overall financial performance of the reporting unit. If after assessing these qualitative factors, we determine it is “more-likely-than not” that the fair value is less than the carrying value, a quantitative assessment of goodwill is required.

Previous wording

Change in fair value of equity securities is the change in fair value of the investment on partnership shares in MineOne Fix Income Investment I L.P with an original investment value of $25 million. We subscribed Mineone Fix Income Investment in September 2022, and we expect the fair value of MineOne Fix Income Investment I L.P will continue to grow gradually with lower volatility.

Current wording

Change in fair value of equity securities is the change in fair value of the investment on partnership shares in MineOne Fix Income Investment I L.P with an original investment value of $25 million. As of December 31, 2025, we evaluated whether NAV remains representative of fair value, considering, among other factors, liquidity restrictions, the financial condition of the investee, and the ability to realize returns and concluded that the reported NAV was not representative of fair value as of the balance sheet date. Accordingly we reassessed the fair value of the investment using a market participant perspective and considered the lack of observable market transactions and significant uncertainty regarding recoverability, with a conclusion reached that the fair value of the investment to be fully reduced to nil as of December 31, 2025. For the years ended December 31,2025 and 2024, we recorded downward adjustments of $26,604,319 and upward adjustments $1,043,963 for changes in fair value of the equity investment, held for continuing operations, respectively.

Previous wording

Net revenues for the year ended December 31, 2024 were approximately $31.3 million, an increase of approximately $20.9 million or 200.2% from approximately $10.4 million for the year ended December 31, 2023. The increase in net revenues in 2024 was primarily attributed to the increase in vehicle sales and spare-part sales by approximately $19.3 million and $1.3 million, respectively. The net revenues in US market for the year ended December 31, 2024 were approximately $19.3 million, an increase of approximately $19.0 million from approximately $0.4 million for the year ended December 31, 2023. The increase in net revenues in US market in 2024 was primarily attributed to an increase in vehicle sales by approximately $19.0 million.

Current wording

Net revenues for the year ended December 31, 2025 were approximately $18.1 million, a decrease of approximately $13.2 million or 42.2% from approximately $31.3 million for the year ended December 31, 2024. The decrease in net revenues in 2025 was primarily attributed to the decrease in vehicle sales of approximately $12.1 million due to (i) the average selling price declined from approximately $25,089 to $12,266, mainly due to the suspension of government subsidies, which resulted in a drop in LS400 sales with high average selling price; (ii) the decrease in spare-part sales of approximately $1.1 million due to the decrease in sales of iChassis™. The net revenues in Europe market for the year ended December 31, 2025 were approximately $12.2 million, an increase of approximately $6.5 million from approximately $5.7 million for the year ended December 31, 2024. The net revenues in the Asian market for the year ended December 31, 2025 were approximately $4.0 million, with a slight decrease of approximately $0.6 million from approximately $4.6 million for the year ended December 31, 2024.

Previous wording

For the year ended December 31, 2024, we sold 1,122 ECVs, including 105 fully assembled Metro® units, 15 fully assembled Logistar™ 200 units, 89 fully assembled Logistar™ 100 units, 35 fully assembled Teemak™ units, 58 fully assembled Logistar™ 260 units, 145 fully assembled Logistar™ 400 units, 492 fully assembled Avantier™ units, 2 Neibor® 150 units, 120 Clubcar units, 45 Antric® units, 4 fully assembled Logistar™ 210 units, 1 fully assembled Logistar™ 210V unit, one fully assembled Logistar™ 300 unit, 4 fully assembled Seres 5 units, 5 AX-3 units and 1 AIQAR EQ7 unit, compared with 630 ECVs for the year ended December 31, 2023, including 209 fully assembled Metro® units, 41 fully assembled Logistar™ 200 units, 63 fully assembled Logistar™ 100 units, 10 fully assembled Teemak™ units, 59 fully assembled Logistar™ 260 units, one fully assembled Logistar™ 400 units, 182 fully assembled Avantier™ units, 8 Neibor® 150 units, 42 Clubcar units and 15 Antric® units. In U.S. market, we sold 192 ECVs, including 24 fully assembled Metro® units, 145 fully assembled Logistar™ 400 units, 19 fully assembled Teemak™ units and 4 fully assembled Avantier™ units, compared with 12 ECVs for the year ended December 31, 2023, including 8 fully assembled Metro, 1 fully assembled Logistar™ 400 unit and 3 fully assembled Teemak™ units.

Current wording

For the year ended December 31, 2025, we sold 1,309 ECVs, including 31 fully assembled Metro® units, 46 fully assembled Logistar™ 200 units, 154 fully assembled Logistar™ 100 units, 33 fully assembled Teemak™ units, 11 fully assembled Logistar™ 260 units, 1 fully assembled Logistar™ 400 units, 611 fully assembled Avantier™ units, 112 Clubcar units, 30 Antric® units, 120 Logistar™ 210 units, 113 Logistar™ 450 units, 1 Logistar™ 300 unit, 40 fully assembled Seres 5 units, 5 fully assembled Joylong-A4 units and 1 fully assembled Joylong-EA6 units, compared with 1,122 ECVs for the year ended December 31, 2024, including 105 fully assembled Metro® units, 15 fully assembled Logistar™ 200 units, 89 fully assembled Logistar™ 100 units, 35 fully assembled Teemak™ units, 58 fully assembled Logistar™ 260 units, 145 fully assembled Logistar™ 400 units, 492 fully assembled Avantier™ units, 2 Neibor® 150 units, 120 Clubcar units, 45 Antric® units, 4 fully assembled Logistar™ 210 units, 1 fully assembled Logistar™ 210V unit, one fully assembled Logistar™ 300 unit, 4 fully assembled Seres 5 units, 5 AX-3 units and 1 AIQAR EQ7 unit.

Previous wording

For the year ended December 31, 2024, we also sold 911 iChassis™ units, other than the 1122 ECVs.

Current wording

For the year ended December 31, 2025, we also sold 19 iChassis™ units, other than the 1274 ECVs.

Previous wording

Geographically, the vast majority of our net revenues were generated from vehicle sales in the U.S. during the years ended December 31, 2024. For the year ended December 31, 2024, net revenues from Europe, North America, Asia (including China) and other regions (including Africa and Latin America) as a percentage of total revenues was 18.3%, 66.7%, 14.6% and 0.4%, respectively, compared to 43.8%, 9.8%, 46.1% and 0.3%, respectively for the corresponding period in 2023.

Current wording

Geographically, the vast majority of our net revenues were generated from vehicle sales in Asia and European Union during the years ended December 31, 2025. For the year ended December 31, 2025, net revenues from Europe, North America, Asia (including China) and others as a percentage of total revenues was 67.2%, 10.2%, 22.3% and 0.2%, respectively, compared to 18.3%, 66.7%, 14.6% and 0.4%, respectively for the corresponding period in 2024.

Previous wording

For the year ended December 31, 2024, net revenues from vehicle sales in Europe, North America, Asia (including China) and other regions (including Africa and Latin America) as a percentage of total vehicle net revenues was 19.6%, 73.5%, 6.6% and 0.3%, respectively, compared to 51.0%, 11.0%, 37.6% and 0.4%, respectively, for the corresponding period in 2023.

Current wording

For the year ended December 31, 2025, net revenues from vehicle sales in Europe, North America, Asia (including China) and Africa as a percentage of total vehicle net revenues was 72.0%, 10.6%, 17.2% and 0.2%, respectively, compared to 19.6%, 73.5%, 6.6% and 0.3%, respectively, for the corresponding period in 2024.

Previous wording

Cost of goods sold for the year ended December 31, 2024 was approximately $23.7 million, an increase of approximately $14.9 million or approximately 168.9% from approximately $8.8 million for the year ended December 31, 2023. The increase in cost of goods sold in 2024 was primarily attributable to the increase of cost of vehicle sales of approximately $8.4 million and the increase of inventory write-down of approximately $5.56 million. The increase of cost of vehicle sales was mainly caused by the increased vehicle sales during the year 2024.

Current wording

Cost of goods sold for the year ended December 31, 2025 was approximately $20.4 million, a decrease of approximately $3.3 million or approximately 13.9% from approximately $23.7 million for the year ended December 31, 2024. The decrease in cost of goods sold in 2025 was primarily attributable to the decrease in cost of vehicle sales and spare-part sales of approximately $1.0 million and $1.1 million, respectively, the decrease of inventory write-down of approximately $4.0 million, and partially net off by the increase of inventory write-off of $2.8 million. The decrease in cost of vehicle sales was mainly due to the decreased vehicle sales and spare-part sales during the year 2025.

Previous wording

Gross profit for the year ended December 31, 2024 was approximately $7.6 million, an increase of approximately $6.0 million from approximately $1.6 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, our overall gross margin was approximately 24.3% and 15.5%, respectively. Our gross margin of vehicle sales for years ended December 31, 2024 and 2023 was 24.9% and 18.8%, respectively. The increase of our gross profit was caused by the increase in vehicle sales revenue of approximately $19.3 million, offset by the increase in cost of goods sold of approximately $8.4 million and inventory write down of approximately $5.6 million.

Current wording

Gross loss for the year ended December 31, 2025 was approximately $2.3 million, compared with gross profit of $7.6 million for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, our overall gross margin decreased to approximately negative 12.8% from positive 24.3%, respectively. Our gross margin of vehicle sales for years ended December 31, 2025 and 2024 was negative 3.22% and positive 24.9%, respectively. The decrease of our gross profit was due to the decrease in gross profit of vehicle sales revenue, spare-part sales and other sales of approximately $7.5 million, $0.3 million and $0.04 million, respectively. In addition, the gross loss for the year ended December 31, 2025 was impacted by approximately $2.0 million of inventory write-offs related to battery equipment.

Previous wording

Selling and marketing expenses for the year ended December 31, 2024 were approximately $7.4 million, an increase of approximately $3.2 million or approximately 76.4% from approximately $4.2 million for the year ended December 31, 2023. The increase in selling and marketing expenses in 2024 was primarily attributed to the increase in service fees related to global market and distribution channel research and marketing expense of approximately $0.7 million and $2.8 million, respectively, offset by a decrease in share-based compensation and salary and social insurance of approximately $0.1 million and $0.2 million, respectively.

Current wording

Selling and marketing expenses for the year ended December 31, 2025 were approximately $2.5 million, a decrease of approximately $4.9 million or approximately 65.8% from approximately $7.4 million for the year ended December 31, 2024. The decrease in selling and marketing expenses in 2025 was primarily attributed to the decrease in marketing expense, salary and social insurance and service fees related to global market and distribution channel research of approximately $3.2 million, $1.0 million and $0.6 million, respectively.

Previous wording

Research and development expenses for the year ended December 31, 2024 were approximately $5.2 million, a decrease of approximately $2.6 million or approximately 33.2% from approximately $7.7 million for the year ended December 31, 2023. The decrease in research and development expenses in 2024 was primarily attributed to the decrease in design and development expenditures, share-based compensations and rental expense of approximately $2.7 million, $0.06 million and $0.04 million, offset by the increase in salary and social insurance of approximately $0.3 million.

Current wording

Research and development expenses for the year ended December 31, 2025 were approximately $2.8 million, a decrease of approximately $2.3 million or approximately 45.5% from approximately $5.2 million for the year ended December 31, 2024. The decrease in research and development expenses in 2025 was primarily attributed to the decrease in design and development expenditures, salary and social insurance and others related to miscellaneous expense of approximately $0.5 million, $1.7 million and $0.1 million.

Previous wording

Interest expense, net, consists of interest income on deposit and wealth management products purchased from banks and interest expense on convertible bonds. Net interest expense was approximately $0.2 million for the year ended December 31, 2024, a change of approximately $0.6 million compared to the approximately $0.4 million in interest income for the year ended December 31, 2023. The decrease was primarily attributable to (i) a decrease in interest income of approximately $0.5 million from bank deposit.; (ii) a decrease in interest income of approximately $0.3 million from wealth management products purchased from banks; (iii) offset by a decrease in interest expense to convertible bonds of approximately $0.3 million.

Current wording

Interest expense, net, mainly consists of interest expense on convertible bonds, offset by the interest income from deposit and unpaid purchases from HWE. Net interest expense was approximately $0.5 million for the year ended December 31, 2025, an increase of approximately $0.3 million compared to the approximately $0.2 million in interest expense for the year ended December 31, 2024. The increase was primarily attributable to (i) a decrease in interest income of approximately $0.1 million from bank deposit; (ii) a decrease in interest income of approximately $0.3 million from short-term investment; offset by (iii) a decrease in interest expense to convertible bonds of approximately $0.2 million.

Previous wording

Other expense net for the year ended December 31, 2024 was approximately $0.5 million, representing a change of approximately $1.1 million compared to approximately $0.5 million of other income, net for the year ended December 31, 2023. The change of other income (expense) in 2024 compared to 2023 was primarily attributable to i) the increase in investment loss of approximately $0.7 million and the decrease of approximately $0.4 million in liquidation income from Shengzhou Cenntro Machinery Co., Ltd. and Zhejiang Xbean Tech Co. Ltd. during the year 2023.

Current wording

Other income, net for the year ended December 31, 2025 was approximately $0.4 million, representing a change of approximately $0.9 million compared to approximately $0.5 million of other expense, net for the year ended December 31, 2024. The change of other income (expense) in 2025 compared to 2024 was primarily attributable to the decrease in investment loss of approximately $0.6 million and the increase of approximately $0.3 million in litigation compensation from Fujian Newlongma Automotive Co., Ltd..

Previous wording

Loss from early termination of lease contract for the year ended December 31, 2024 was approximately $2.2 million compared to nil of loss from early termination of lease contract for the year ended December 31, 2023.

Current wording

Loss from early termination of lease contract for the year ended December 31, 2025 was approximately $0.7 million compared to $2.2 million of loss from early termination of lease contract for the year ended December 31, 2024.

Previous wording

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. We define Adjusted EBITDA as net income (or net loss) before net interest expense, income tax expense, depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense and other non-recurring expenses including expenses related to TME Acquisition, expenses related to one-off payment inherited from the original Naked Brand Group, impairment of goodwill, convertible bond issuance fee, loss on redemption of convertible promissory notes, loss on exercise of warrants, and change in fair value of convertible promissory notes and derivative liability.

Current wording

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. We define Adjusted EBITDA as net income (or net loss) before net interest expense, income tax expense, depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense and other non-recurring expenses including expenses impairment of goodwill, loss on exercise of warrants, and change in fair value of convertible promissory notes and derivative liability.

Previous wording

We have historically funded working capital and other capital requirements primarily through bank loans, equity financings and short-term loans. Also, the reverse recapitalization we have completed at the end of December 2021 provided significant funding for the Company’s operations. Cash is required primarily to purchase raw materials, repay debts and pay salaries, office expenses and other operating expenses.

Current wording

We have historically funded working capital and other capital requirements primarily through bank loans, equity financings and short-term loans. Also, the reverse recapitalization we have completed at the end of December 2021 provided significant funding for our operations. Cash is required primarily to purchase raw materials, repay debts and pay salaries, office expenses and other operating expenses.

Previous wording

As of December 31, 2024, we had approximately $12.5 million in cash and cash equivalents, approximately $3.3 million of accounts receivables from continuing operations as compared to approximately $28.8 million in cash and cash equivalents, approximately $2.5 million in accounts receivable from continuing operations as of December 31, 2023. For the years ended December 31, 2024 and 2023, net cash used in operating activities was approximately $21.4 million and $58.5 million, respectively.

Current wording

As of December 31, 2025, we had approximately $4.5 million in cash and cash equivalents, approximately $1.3 million of accounts receivables from continuing operations as compared to approximately $12.5 million in cash and cash equivalents, approximately $3.3 million in accounts receivable from continuing operations as of December 31, 2024. For the years ended December 31, 2025 and 2024, net cash used in operating activities was approximately $12.6 million and $21.4 million, respectively.

Previous wording

We intend to further expand our technology through continued investment in research and development. Since inception in 2013 through December 31, 2024, we have spent over approximately $94.4 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.

Current wording

We intend to further expand our technology through continued investment in research and development. Since inception in 2013 through December 31, 2025, we have spent over approximately $96.7 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.

Previous wording

As of December 31, 2024, our working capital was approximately $36.8 million, as compared to a working capital of approximately $75.6 million as of December 31, 2023. The approximately $38.8 million decrease in working capital during 2024 was primarily due to (i) the decrease of cash and cash equivalents, inventories, short-term investment, the decrease in assets held for sale and current operating lease liabilities of approximately $16.2 million, $5.2 million, $4.2 million, $12.7 million and $0.8 million, respectively and (ii) the increase in prepayment and other current assets and contractual liabilities of approximately $1.2 million and $1.7 million respectively.

Current wording

As of December 31, 2025, our working capital was approximately $19.0 million, as compared to a working capital of approximately $36.8 million as of December 31, 2024. The approximately $28.0 million decrease in working capital during 2025 was primarily due to (i) the decrease of cash and cash equivalents, accounts receivable, prepayment and other current assets, inventories and current assets held for discontinued operations of approximately $8.1 million, $2.0 million, $3.1 million, $2.1 million and $5.0million, respectively and (ii) the increase in short-term loans and accrued expense and other current liabilities of approximately $1.0 million and $5.0 million respectively.

Previous wording

Our net cash used in operating activities was approximately $21.4 million and $58.5 million for the years ended December 31, 2024 and 2023, respectively.

Current wording

Our net cash used in operating activities was approximately $12.6 million and $21.4 million for the years ended December 31, 2025 and 2024, respectively.

Previous wording

Net cash used in operating activities for the year ended December 31, 2024 was primarily attributable to (i) our net loss of approximately $44.9 million and adjusted for non-cash items of approximately $19.9 million, which primarily consisted of amortization of operating lease right-of-use asset, share based compensation expense, depreciation and amortization, foreign currency exchange loss, loss from early termination of lease contract and impairment of slow-moving inventories of approximately $4.6 million, $3.4 million, $2.0 million, $1.1 million, $2.2 million and $6.5 million, respectively, (ii) the decrease in account receivable, inventories, accrued expense and other current liabilities and operating lease liabilities of approximately $1.43 million, $7.9 million, $1.7 million and $4.0 million, respectively, (iii) increase in deferred revenue and prepayments and other assets of approximately $0.5 million and $0.2 million, respectively.

Current wording

Net cash used in operating activities for the year ended December 31, 2025 was primarily attributable to (i) our net loss of approximately $73.0 million and adjusted for non-cash items of approximately $55.4 million, which primarily consisted of depreciation and amortization, amortization of operating lease right-of-use asset, written-down of inventories, provision for credit losses, loss on changes in fair value of convertible promissory notes and derivative liabilities, downwards changes in fair value of equity securities, share- based compensation expense, loss on inventory write-off and gain from disposal of Cenntro Electric CICS, S.R.L.’s equity of approximately $2.2 million, $1.9 million, $2.6 million, $6.0 million, $8.5 million, $26.6 million, $2.8 million, $2.9 million and $1.2 million, respectively, (ii) the decrease in prepayments and other assets and operating lease liabilities of approximately $3.7 million and $0.6 million, respectively, (iii) increase in accrued expense and other current liabilities of approximately $2.4 million.

Previous wording

Net cash provided by financing activities was approximately $1.2 million for the year ended December 31, 2024. Net cash provided by financing activities for the year ended December 31, 2024 was primarily attributable to the proceeds from bank loans of approximately $0.7 million and the loans proceeds from third parties of approximately $0.7 million, offset by the repayment of loans to third parties of approximately $0.1 million.

Current wording

Net cash provided by financing activities was approximately $4.9 million for the year ended December 31, 2025. Net cash provided by financing activities for the year ended December 31, 2025 was primarily attributable to the proceeds from bank loans, related parties and third parties of approximately $3.2 million, $1.0 million and $2.1 million, offset by the repayment of loans to third parties of approximately $0.4 million, the repayment of loans to related parties of approximately $0.2 million and repayment to bank loan of approximately $0.8 million.

Previous wording

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, the reported amounts of revenue and expenses during the reporting period and the related disclosures in the consolidated and combined financial statements and accompanying footnotes. Out of our significant accounting policies, which are described in “Note 2—Summary of Significant Accounting Policies” of our consolidated and combined financial statements for the year ended December 31, 2022, included elsewhere in this Annual Report, certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

Current wording

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, the reported amounts of revenue and expenses during the reporting period and the related disclosures in the consolidated financial statements and accompanying footnotes. Out of our significant accounting policies, which are described in “Note 2—Summary of Significant Accounting Policies” of our consolidated financial statements for the year ended December 31, 2025, included elsewhere in this Annual Report, certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

Previous wording

The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and due to related parties, accounts payable and other current liabilities and short-term loans.

Current wording

The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and to related parties, accounts payable and other current liabilities and short-term loans.

Previous wording

The carrying value of cash and cash equivalents, restricted cash, wealth management products, accounts receivable, prepayment, goodwill and other current assets, accounts payable, other current liabilities and amount due from and due to related parties, current were approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

Current wording

The carrying value of cash and cash equivalents, restricted cash, accounts receivable and other current assets, accounts payable, other current liabilities, bank loans and amount due from and to related parties, current were approximate their fair values because of the short-term nature of these items. The estimated fair values of loans from third parties were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

Previous wording

Available-for-sale investments and currency-cross swap were classified within Level 1 of the fair value hierarchy because they were valued using quoted prices in active markets. Our debt security investments are classified within Level 3 of the fair value hierarchy. As the Issuer is not yet listed and there are no similar companies in the market at the same stage of development for comparison, the Issuer is difficult to value, and the valuation is not considered reliable. Therefore, the Company develop own assumption by future cash flow forecast, which contains principle paid and interests accrued.

Current wording

Currency-cross swap was classified within Level 1 of the fair value hierarchy because they were valued using quoted prices in active markets. As the issuer is not yet listed and there are no similar companies in the market at the same stage of development for comparison, the investment is difficult to value, and the valuation is not considered reliable. Therefore, the Company develop its own assumption by future cash flow forecast, which contains principal paid and interests accrued.

Previous wording

The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. The Company has elected to apply the fair value option to: i) convertible promissory notes payable due to the complexity of the various conversion and settlement options available to notes holders; ii) convertible loan receivable, which was recognized as debt security in long-term investments, and iii) cross-currency swap, which was recognized as short-term investments.

Current wording

The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. The Company has elected to apply the fair value option to: i) convertible promissory notes payable due to the complexity of the various conversion and settlement options available to notes holders; ii) convertible loan receivable, which was recognized as debt security in long-term investments, and iii) currency-cross swap, which was recognized as derivative financial instruments. Specifically, positive fair values of cross-currency swaps are classified as short-term investments in the consolidated balance sheet, and negative fair values of such instruments are recorded in other current liabilities.

Previous wording

In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.

Current wording

In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase warrant shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants, which are classified as Level 3 within the fair value hierarchy. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.