Cenntro Inc.

CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Cenntro Inc. or the Company was incorporated in the State of Nevada on March 9, 2023, under the Nevada Revised Statutes (the “NRS”). As a holding company with no material operations of its own, Cenntro Inc. conducts operations through its subsidiaries in the United States, Europe, Mexico, Hong Kong, and in the People’s Republic of China, which are referred to as the PRC or China.

Cenntro Automotive Group Limited (“CAG Cayman”) was formed in the Cayman Islands on August 22, 2014. CAG Cayman was the former parent of Cenntro (as defined below), prior to the closing of the Combination (as defined below).

On March 22, 2013, Cenntro Motor Corporation (“CMC”) was registered in the State of Delaware.

On January 28, 2014, Cenntro Automotives Group Limited (“CAG BVI”) was formed in British Virgin Islands to conduct electric vehicle (“EV”) related business worldwide outside of U.S.A. On January 29, 2014, CAG BVI acquired CMC. CMC changed its name from “Cenntro Motor Corporation” to “Cenntro Motors Corporation” on August 5, 2014, and further changed from “Cenntro Motors Corporation” to “Cenntro Automotive Corporation” (“CAC”) on October 7, 2014. CAC’s operations include corporate affairs, administrative, human resources, global marketing and sales, after-market support, homologation, and quality assurance.

Cenntro Automotive Group Limited (“CAG HK”) was established by CAG Cayman on February 15, 2016 in Hong Kong. CAG HK is a non-operating, investment holding company, which conducts business through its subsidiaries in mainland China and Hong Kong.

Cenntro Electric Group, Inc. (“CEGI”) was incorporated in the state of Delaware by CAG Cayman on March 9, 2020.

Cenntro Electric Group Limited, formerly known as Naked Brand Group Limited (“NBG”), was incorporated in Australia on May 11, 2017. NBG changed its name to Cenntro Electric Group Limited on December 30, 2021, in connection with the closing of the Combination. Cenntro Electric Group Limited changed its name to Cenntro Electric Group Pty Limited (“CEGL”) on June 14, 2024.

On March 23, 2022 and January 31, 2023, CEGI entered into Share Purchase Agreements to acquire 65% and 35% of the issued and outstanding shares in Cenntro Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH.

On December 16, 2022, Cenntro Electric Group (Europe) GmbH (“CEGE”) invested in Antric GmbH (“Antric”) and became a 25% shareholder of Antric. On August 31, 2023, CAE acquired the remaining 75% shares of Antric and took Antric as a subsidiary of the Company. On August 31, 2023, the Company completed the acquisition with Antric GmbH in Germany.

On June 23, 2021, the Company invested RMB 2,000,000 (approximately $273,999) in Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) to acquire 20% of its equity interest. On May 8, 2024, the Company entered into a new equity investing agreement to acquire another 60% of Hangzhou Hezhe’s equity interest.

CAC, CEGI and CAG HK and their consolidated subsidiaries are collectively known as “Cenntro”; Cenntro Inc., CEGL, Cenntro and its subsidiaries are collectively known as the “Company”. The Company designs and manufactures purpose–built, electric commercial vehicles (“ECVs”) used primarily in last mile delivery and industrial applications.

The Company is an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by either electricity or hydrogen energy sources. The 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.

On December 30, 2021, the Company consummated a stock purchase transaction (the “Combination”) pursuant to that certain stock purchase agreement, dated as of November 5, 2021 (the “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEGI and CAG HK. Under U.S. generally accepted accounting principles, the Combination is accounted for as a reverse recapitalization.

On February 27, 2024, CEGL completed the redomiciliation of CEGL in accordance with the scheme implementation agreement, between CEGL and Cenntro Inc. (the “Redomiciliation”). As a result of the Redomiciliation, the jurisdiction of incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and CEGL became a wholly-owned subsidiary of Cenntro Inc..

In connection with the Redomiciliation, CEGL transferred its equity interests in its intermediate holding companies directly to Cenntro Inc. As a result, the operating subsidiaries that were previously held through CEGL became direct or indirect subsidiaries of Cenntro Inc., and CEGL no longer holds substantive operating assets and functions as a shell subsidiary within the Group.

The Redomiciliation was effected pursuant to a statutory scheme of arrangement under Australian law (the “Scheme”), whereby on February 27, 2024 (the “Implementation Date”), all of the issued ordinary shares of CEGL were exchanged for newly issued shares of common stock of the Company, on the basis ofone share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) for everyone ordinary shares of CEGL.

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

In November 2024, the Company decided to restructure its European operations by phasing out the existing subsidiary-based direct sales model and implementing a centralized dealership distribution system. This strategic shift aims to appoint qualified regional distributors with proven market penetration capabilities, thereby reducing reliance on maintaining local operational entities.

Concurrently, the Company is reallocating capital and managerial resources to accelerate growth in its core markets of North America and Asia.

As a result of this strategic shift, three European subsidiaries: CEGE, Cenntro Automotive Europe GmbH (“CAE”), and Cenntro EV Center Italy S.R.L (“the disposal group”) were scheduled for structured dissolution in 2024. (i) The Company commenced the wind-down of Cenntro EV Center Italy S.R.L’s operations in 2025 and deregistration was completed as of January 14, 2026; (ii) CAE initiated insolvency proceedings in 2025 and is currently subject to supervision by a court-appointed provisional insolvency administrator; (iii) CEGE continues to be actively marketed for disposal, and the Company remains committed to executing its divestment plan. The Company continues to actively pursue the disposal of CEGE, and as of December 2025, a prospective buyer has submitted a renewed non-binding offer. The transaction is expected to be completed in 2026, subject to completion of due diligence and regulatory approvals.

Accordingly, the consolidated financial statements and notes to the consolidated financial statements reflect the results the disposal group as a discontinued operation for the periods presented in accordance with ASC 210-05, Discontinued Operations represented the disposal group a strategic shift that had a major effect on the Company’s operations and financial results. Further, the related current and non-current assets and liabilities associated with the disposal group are reflected as held for sale in the consolidated balance sheets as of December 31, 2025 and 2024. The numbers in all of the relevant footnote disclosures are also adjusted for the current year and comparative periods. No loss was recognized on the initial measurement of the disposal group as held for sale.

The carrying amounts of the major classes of assets and liabilities of CEGE, CAE and Cenntro EV Center Italy S.R.L. included in assets and liabilities of discontinued operations were as follows:

The key components of loss from discontinued operations for the years ended December 31, 2025 and 2024 were as follows:

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

As of December 31, 2025, Cenntro Inc.’s subsidiaries were as follows:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation and combination.

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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, and the reported amounts of revenue and expenses during the reporting period. Significant accounting estimates reflected in the Company’s consolidated financial statements include estimates and judgments applied in determination of provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include:

Level 1—defined as observable inputs such as quoted prices in active markets;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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.

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.

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.

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.

The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date.

The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities in the Company’s consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other expense in the consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.

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.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a practical expedient are private equity funds, which represent the investment in equity security on the consolidated balance sheet. The Company evaluates whether NAV remains representative of fair value at each reporting date, considering, among other factors, liquidity restrictions, the financial condition of the investee, and the ability to realize returns. Adjustments may be required to reflect the specific characteristics that market participants would consider in pricing the investment.

The Company considers highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Restricted cash consists of cash restricted as to withdrawal or use. Such restricted cash relates to cross-currency swap guarantees card and litigations.

Long-term time deposits comprise of deposits placed with certain bank with maturity ofone tothree years. As of December 31, 2025 and 2024, nil and $700,000, respectively, was pledged with banks as security in relation to the guarantee for the long-term bank loans and restricted to use in Cenntro Electric CICS, S.R.L. (Note 13).

The decrease in pledged deposits tonil as of December 31, 2025 was primarily due to the release of the related bank guarantees following the Company’s disposal of its equity interest in Cenntro Electric CICS, S.R.L. in April 2025.

Accounts receivable are recognized and carried at net realizable value.

Management used an expected credit loss model for the impairment of accounts receivable as of period ends. Management believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines 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. Management measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics with other accounts receivables, management 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.

The Company’s financial assets subject to the current expected credit loss (“CECL”) model mainly include accounts receivable, certain receivable components within other current assets and other non-current assets and debt security investments.

For the years ended December 31, 2025 and 2024, allowance for credit losses recognized by the Company were mainly generated from accounts receivable and certain components within other current assets.

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 comprises 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. For the years ended December 31, 2025 and 2024, write-downs of $2,554,421 and $6,462,514, respectively, were recorded in cost of sales in the consolidated statements of operations and comprehensive loss. Loss on 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. For the years ended December 31, 2025 and 2024, loss on inventory write-off of $2,892,133 andnil, respectively, were recorded in cost of sales in the consolidated statements of operations and comprehensive loss.

The Company used cross-currency swap contracts to manage its exposures to movements in foreign exchange rates primarily related to the RMB or Renminbi. The use of these derivative financial instruments modifies the Company’s exposure to these risks with the goal of reducing the risk or cost to the Company. The Company does not use derivatives for trading purposes and is not a party to leveraged derivative contracts.

Depending on the nature of the underlying risk being hedged, these derivative financial instruments are accounted for either as cash flow, net investment or mark to market hedges against changes in the value of the hedged item. Derivatives are recorded in the Consolidated Balance Sheets at fair value. The fair value is based upon either market quotes for actively traded instruments or independent bids for nonexchange traded instruments. The accounting for changes in fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship. The Company determines whether a derivative instrument meets the criteria for cash flow or net investment hedge accounting treatment on the date the derivative is executed. Derivatives accounted for as mark to market hedges are not designated as hedges for accounting purposes.

Economic Hedges

A derivative instrument whose change in fair value is used to hedge against changes in the value of a hedged item, but which is not designated as a hedge under ASC815 “Derivative Instruments and Hedging Activities”, is accounted for as an economic hedge. These derivatives are recorded at fair value in the Consolidated Balance Sheets when the hedged item is recorded as an asset or liability and then are revalued each accounting period. Changes in the fair value of derivatives accounted for as economic hedges are reported in the “Gain from cross-currency swaps” lines under “Other expense” in the Consolidated Statements of Operations. Cash flows from derivatives not designated as hedges are classified as cash flows from operating activities in the Consolidated Statements of Cash Flows. For the year ended December 31, 2025 and 2024, all of the cross-currency swap contracts were accounted for as economic hedges.

For investments in equity securities whose returns are linked to the performance of underlying assets, the Company elected the fair value option at the date of initial recognition and carried these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss.

The Company determines the appropriate accounting treatment for its investments in equity securities at the time of acquisition and reassesses such determinations when facts and circumstances change. The private equity funds are measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to estimate the fair value of the Fund.

The Company’s available-for-sale investment consist of wealth management products purchased from banks and convertible loans. The Company’s short-term available-for-sale investment are classified as short-term investments on the consolidated balance sheets based on the contractual maturity date which is less than one year. The wealth management products purchased from banks are stated at the net asset value.

The Company’s debt security investments consist of convertible loan. At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible loan as of the date of such conversion by the applicable conversion price. The convertible loans are stated at fair value.

The Company accounted for credit losses on AFS debt securities in accordance with ASC 326-30, Financial Instruments—Credit Losses. Under ASC 326-30, the Company evaluates AFS debt securities at each reporting date to determine whether a decline in fair value below amortized cost is attributable to credit-related factors or non-credit factors. If a credit-related impairment is identified, the Company records an allowance for credit losses through earnings, limited to the difference between amortized cost and fair value. Non-credit related declines remain in accumulated other comprehensive income. If credit quality improves, previously recognized credit losses are reversed through earnings, up to the amount of prior allowance. The Company assesses credit risk based on issuer financial health, market conditions, and macroeconomic factors.

Property, plant and equipment are carried at cost less accumulated depreciation and any impairment. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows:

The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Company considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors.

The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows:

The Company evaluates the recoverability of long-lived assets or asset group with determinable useful lives whenever events or changes in circumstances indicate that an asset or a group of assets’ carrying amount may not be recoverable. The Company measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset group, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The impairment test is performed at the asset group level. There wasno impairment recognized for the years ended December 31, 2025 and 2024, respectively.

Goodwill represents the future economic benefits arising from other assets acquired in a business combination. Goodwill acquired in a business combination is tested for impairment at least annually or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company performs impairment analysis on goodwill as of December 31 every year either beginning with a qualitative assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

In applying the goodwill impairment assessment, the Company 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.

The quantitative impairment test requires significant management judgments, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

Impairment loss for goodwill ofnil and $209,130 was recorded for the years ended December 31, 2025 and 2024.

Equity method investments

Investee companies over which the Company has the ability to exercise significant influence but does not have a controlling interest through investment in common shares or in substance common shares are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate.

Under the equity method, the Company initially records its investment at cost and subsequently recognizes the Company’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated statements of operations and comprehensive loss and accordingly adjusts the carrying amount of the investment. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

Equity investments without readily determinable fair values

For investments in an investee over which the Company does not have significant influence, the Company carries the investment at cost and recognizes income as any dividends declared from distribution of investee’s earnings. The Company reviews the equity investments without readily determinable fair values for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. An impairment loss is recognized in earnings equal to the difference between the investment’s carrying amount and its fair value at the balance sheet date of the reporting period for which the assessment is made. All equity investments, except those accounted for under the equity method of accounting or those resulting in the consolidation of the investee, be accounted for at fair value with all fair value changes recognized in income. For equity investments that do not have readily determinable fair values the Company measures the equity investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company.

Impairment for long-term investment

The Company reviews its long-term investments for impairment whenever an event or circumstance indicates that the carrying amount of an investment may not be recoverable. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its long-term investments.

For equity securities without a readily determinable fair value that are accounted for under the measurement alternative, the Company performs a qualitative assessment to identify impairment indicators. If such indicators are present, the Company estimates the fair value of the investment and recognizes an impairment loss in earnings to the extent that the carrying amount exceeds the fair value. The adjusted carrying amount becomes the new cost basis.

For equity securities measured at fair value, changes in fair value are recognized in earnings, and no separate impairment assessment is required.

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.

The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance warranty. The warranty is not considered separate performance obligations and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and, therefore, does not believe an accrual for these costs is necessary.

Revenue is recognized upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes).

The Company acts as a principal in the revenue generating process and should recognize revenue on a gross basis. Revenues are measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. The transaction price is generally fixed as specified in the contracts. The Company’s contracts do not include explicit rights of return, and variable consideration is not significant.

All transactions are settled in cash within the normal credit period, and there is no financing component.

Shipping, handling costs and freight-out expenses for product shipments that occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and are recorded as selling and marketing expenses. These costs primarily include domestic transportation and other logistics expenses incurred prior to export under EXW, FOB or FCA arrangements, or costs incurred before delivery to customers.

The following table disaggregated the Company’s revenues by product lines for the years ended December 31, 2025 and 2024:

The Company’s revenues are primarily derived from America, Europe and Asia. The following table set forth disaggregation of revenue by customer location.

Contract Balances

Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment.

Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2025 and 2024, the Company recognized $1,085,742 and $1,120,355 revenue that was included in contractual liabilities as of January 1, 2025 and 2024, respectively.

The following table provided information about receivables and contractual liabilities from contracts with customers:

Cost of goods sold mainly consists of production related costs including costs of raw materials, consumables, direct labor, manufacturing overhead, depreciation of property, plant and equipment, manufacturing waste treatment processing fees, cost of finished goods transferred between warehouses and inventory write-downs.

Advertising related expenses, including promotion expenses and production costs of marketing materials, are charged to the consolidated statements of operations and comprehensive loss as incurred, and amounted to $393,963 and $3,569,176 for the continuing operation, andnil and $154,883 for the discontinued operation for the years ended December 31, 2025 and 2024, respectively.

The Company’s PRC based subsidiaries received government subsidies from certain local governments. The Company’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific purpose, such as land fulfillment costs. Other subsidies are the subsidies that the local government has not specified its purpose for and are not tied to future trends or performance of the Company, receipt of such subsidy income is not contingent upon any further actions or performance of the Company and the amounts do not have to be refunded under any circumstances.

Specific subsidies relating to land use rights are accounted for as an income with the subsidy benefit reflected over the related asset useful life. Other subsidies are recognized as other income upon receipt as further performance by the Company is not required.

The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative.

Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

As required by applicable tax law, interest on non-payment of income taxes and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes. The tax returns of the Company and its Germany, Hong Kong and PRC subsidiaries are subject to examination by the relevant local tax authorities. The standard period in which Australian Taxation Office can amend an assessment isfour years and there is no statute of limitation in the case of fraud or evasion. The statutory limitation period in Germany for the issue or correction of assessments isfour years from the end of the year in which the return was filed. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. According to the Departmental Interpretation and Practice Notes No.11 (Revised) of the Hong Kong Inland Revenue Ordinance (the “HK tax laws”), an investigation normally covers thesix years of the assessment prior to the year of the assessment in which the investigation commences. In the case of fraud and willful evasion, the investigation is extended to coverten years of assessment. According to the PRC Tax Administration and Collection Law, the statute of limitations isthree years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended tofive years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation isten years. There is no statute of limitation in the case of tax evasion. U.S. federal tax matters are open to examination for years 2015 through 2025. For the years ended December 31, 2025 and 2024, the Company did not have any material interest or penalties associated with tax positions. The Company didnot have any significant unrecognized uncertain tax positions as of December 31, 2025 or 2024. The Company doesnot expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

The consolidated financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of the Company’s PRC subsidiaries and Simachinery HK is the Renminbi (“RMB”). The functional currency of CAE, CEGE and Antric GmbH is the Euro (“EUR”), and CEGI and the Company’s other subsidiaries in United States and Hong Kong except for Simachinery HK is the USD. The functional currency of Cenntro Electric CICS, S.R.L. was Dominican Peso (“DOP”). The functional currency of Cenntro Automotive S.A.S. and Cenntro Electric Colombia S.A.S. was Colombian Peso (“COP”). The functional currency of Cenntro Elektromobilite Araçlar A.Ş was Turkish Lira (“TRY”). The functional currency of Cennatic Energy S. de R.L. de C.V. was Mexican Peso (“PESO”).

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated financial statements are translated into USD from RMB, EUR, Dominican peso (“DOP”), Colombian peso (“COP”), Turkish lira (“TRY”), and Mexican peso (“MXN”) at their historical exchange rates when the capital transactions occurred. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets. The rates are obtained from H.10 statistical release of the U.S. Federal Reserve Board.

Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from re-measurement at year-end are recognized in foreign currency exchange gain/loss, net on the consolidated statement of operations.

Comprehensive loss includes all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive loss are required to be reported in a financial statement that is presented with the same prominence as other financial statements. For the years presented, comprehensive loss includes net loss, the gain/loss from available for sale debt investments and the foreign currency translation changes.

In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has onlyone reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting.

The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2025 and 2024.

Long-lived assets

The Company’s share-based compensation expenses are recorded in accordance with ASC 718.

Share-based awards to employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a straight-line basis, over the requisite service period, with a corresponding impact reflected in additional paid-in capital.

The estimate of forfeiture rate will be adjusted over the requisite service period to the extent that the actual forfeiture rate differs, or is expected to differ, from such estimates. Changes in estimated forfeiture rate will be recognized through a cumulative catch-up adjustment in the period of change.

The Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20), effective for the year ended June 30, 2025. The Company accounts for its convertible debentures and notes primarily under ASC 470, Debt.

Under the amended guidance, convertible instruments are accounted for as a single liability instrument measured at amortized cost. This simplified approach eliminates the requirement under previous guidance to separately account for beneficial conversion features (“BCF”) or cash conversion features (“CCF”) in equity.

An exception to this single-instrument approach applies if an embedded conversion feature is required to be bifurcated from the host debt instrument and accounted for separately as a derivative under ASC 815, Derivatives and Hedging (“ASC 815”). This is required when the conversion feature’s economic characteristics are not considered clearly and closely related to the host debt, the feature meets the definition of a derivative, and it does not qualify for a scope exception from derivative accounting. If bifurcation is required, the embedded derivative is recognized as a liability and measured at fair value, with subsequent changes in fair value reported in earnings. The portion of the proceeds allocated to the derivative creates a debt discount, which is amortized to interest expense over the term of the debt.

For instruments accounted for as a single liability, debt issuance costs are recorded as a direct deduction from the carrying amount and are amortized to interest expense over the term of the debt using the effective interest method. Upon conversion into shares in accordance with the original contractual terms, the carrying amount of the debt is reclassified to equity, and no gain or loss is recognized in the income statement.

The Company evaluates modifications of convertible debentures and notes to determine whether such modifications are substantial. If a modification is not substantial, it is accounted for as a modification of the existing instrument, with a revised effective interest rate based on the updated cash flows. If a modification is considered substantial, the existing instrument is derecognized and the new instrument is recognized, with any resulting difference recognized in earnings.

Upon extinguishment of convertible debentures and notes, including repayment or settlement, the difference between the carrying amount of the instrument and the consideration paid is recognized as a gain or loss in the consolidated statements of operations.

The Company accounts for derivative financial instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). Derivative instruments are initially recognized at fair value on the consolidated balance sheets and are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.

Derivatives may arise from embedded features within convertible debentures and notes or from freestanding financial instruments. An embedded feature is bifurcated from the host contract and accounted for separately as a derivative when the feature’s economic characteristics and risks are not clearly and closely related to those of the host contract, the feature meets the definition of a derivative, and it does not qualify for a scope exception under ASC 815.

If bifurcation is required, the embedded derivative is recognized as a derivative liability and measured at fair value, with subsequent changes in fair value recognized in earnings. The portion of the proceeds allocated to the derivative creates a debt discount, which is amortized to interest expense over the term of the host debt using the effective interest method.

For freestanding derivative instruments that are classified as liabilities, the Company measures such instruments at fair value at issuance and remeasures them at each reporting date, with changes in fair value recognized in earnings.

The Company evaluates modifications of contracts containing derivative features to determine whether such modifications result in the extinguishment of the original instrument or the continuation of the existing instrument. If the modification is considered substantial, the original derivative is derecognized and a new derivative is recognized at fair value, with any resulting difference recognized in earnings.

Upon settlement or termination of a derivative liability, the difference between the carrying amount of the derivative and the consideration paid is recognized in earnings.

The Company accounts for its lease under ASC 842 Leases, and identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Company’s incremental borrowing rate over a similar term of the lease payments at lease commencement. Some of the Company’s lease agreements contain renewal options; however, the Company do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For the years ended December 31, 2025 and 2024, loss from early termination of lease contract of $717,633 and $2,218,120 were recognized, respectively.

A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company’s shareholders. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and consolidated statements of operations and other comprehensive loss are attributed to controlling and non-controlling interests.

The Company classify the results of a component (or group of components) to be disposed (“disposal group”) as a discontinued operation when the disposal group meets the held-for-sale criteria, is disposed of by sale or is disposed of other than by sale (e.g. abandonment) and when the disposal group represents a strategic shift that has, or will have, a major effect on our operations and our financial results.

We report the operating results and cash flows related to the disposal group as discontinued operations for all periods presented in our consolidated statements of comprehensive loss and consolidated statements of cash flows, respectively.

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net loss or financial position.

The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill.

The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company’s operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. In January 2025, the FASB issued ASU No. 2025-01 to clarify certain provisions of ASU 2024-03, including its effective date and transition guidance. As clarified, the amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The guidance should be applied prospectively, with an option for retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to address the measurement of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The update introduces a practical expedient available to all entities and an accounting policy election specifically for non-public business entities that adopt the practical expedient, aiming to simplify and reduce the cost complexity associated with estimating expected credit losses for such financial assets. The guidance was developed in conjunction with the Private Company Council to respond to stakeholder concerns regarding the burdens of existing credit loss estimation requirements for these transactions. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and related disclosures and expects to adopt the guidance in its fiscal year beginning January 1, 2027.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.

NOTE 3 – BUSINESS COMBINATION

Acquisition of Hangzhou Hezhe’s equity interest

On June 23, 2021, the Company invested RMB 2,000,000 (approximately $273,999) in Hangzhou Hezhe to acquire 20% of its equity interest. On May 8, 2024, the Company entered into a new equity investing agreement to acquire another 60% of Hangzhou Hezhe’s equity interest, with the cash consideration amounted to RMB 3,704,307 (approximately $511,638), and the share transfer was completed on May 21, 2024. The fair value of previously held equity interest is RMB 1,234,769 (approximately $170,546) at the acquisition date. As of December 31, 2024, the Company held 80% of equity interest in Hangzhou Hezhe in total.

The transaction constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805. Cenntro Inc. is deemed to be the accounting acquirer and the assets and liabilities of Hangzhou Hezhe are recorded at the fair value as of the date of the closing. The Company completed the valuations necessary to assess the fair value of the acquired assets and liabilities and the non-controlling interests with the assistance from an independent valuation firm, resulting from which the amounts of goodwill were determined and recognized as of the respective acquisition dates. Loss of $149,872 from this acquisition was recognized for the year ended December 31, 2024 due to the difference between the carrying value of the equity method investment and its fair value as at the closing date.

The following was a summary of the fair values of the assets acquired and liabilities assumed. RMB: USD exchange rate of 7.2401 as of April 30, 2024 was applied:

NOTE 4 - ACCOUNTS RECEIVABLE, NET

Accounts receivable, net were summarized as follows:

The changes in the provision for credit losses were as follows:

NOTE 5 - INVENTORIES

Inventories were summarized as follows:

The changes in inventory valuation allowance were as follows:

NOTE 6 – PREPAYMENT AND OTHER CURRENT ASSETS, NET

Prepayment and other current assets, net consisted of the following:

The changes in the provision for credit losses were as follows:

NOTE 7 – LONG-TERM INVESTMENTS

Equity method investments consisted of the following:

Equity investments without readily determinable fair values, net consisted of the following:

On July 24, 2023, the Company purchased a $1,000,000 convertible note (the “Convertible Note”) from third party Acton, Inc. (the “Issuer”), with the interest rate of 5% per annum and due in June 2024. At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible loan as of the date of such conversion by the applicable conversion price. In July and August 2023, the Company paid a total amount of $600,000 to the Issuer. On August 30, 2024, the two parties made amendments to the purchase agreement to reduce the total purchase amount from $1,000,000 to $600,000 and extend the maturity date to July 24, 2025. On August 7, 2025, the two parties made amendments to extend the maturity date to July 24, 2026. Before the Maturity Date, the Issuer is entitled to calling for immediate conversion of the Convertible Note (for amount of full principal and accrued interest as of the date of conversion) provided that any of the following three conditions is satisfied: i) The Issuer closes a financing transaction of not less than $3,000,000 with pre-money valuation not lower than $38,250,000; ii) A person or entity, or a group acquires more than fifty percent (50%) of the outstanding voting power of the Issuer or all or substantially all of the assets of the Issuer; iii) The Issuer completes an initial public offering at a major US stock exchange with total market cap not lower than $38,250,000. Given Acton’s limited operating scale, declining revenue, weak liquidity and the uncertain recoverability of its assets, management concluded that the recoverability of future cash flows associated with this financial asset is highly uncertain. Accordingly, for the year ended December 31, 2025, the Company recognized full credit loss of this investment. The balance of debt investments, held for continuing operations wasnil and $641,712, respectively, as of December 31, 2025 and 2024.

NOTE 8 – INVESTMENT IN EQUITY SECURITY

Investment in equity security consisted of the following:

For the years ended December 31, 2025 and 2024, the Company received distribution ofnil and $500,000 of investment in MineOne, respectively.

The Company evaluates whether NAV remains representative of fair value at each reporting date, 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 the Company 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 tonil as of December 31, 2025.

NOTE 9 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:

Depreciation expenses charged to the continuing operations for the years ended December 31, 2025 and 2024 were $1,760,825 and $1,588,642, respectively. There’sno depreciation expense of discontinued operations for the years ended December 31, 2025 and 2024.

There’sno impairment loss in property, plant and equipment of continuing operations and discontinued operations for the years ended December 31,2025 and 2024

NOTE 10 – INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

Amortization expenses charged to the continuing operations for the years ended December 31, 2025 and 2024 were $434,200 and $422,221, respectively.

NOTE 11 – ACCOUNTS PAYABLE

NOTE 12 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities were summarized as follows:

NOTE 13 –SHORT-TERM AND LONG-TERM BANK LOANS

(1) On April 30, 2024 and June 21, 2024, Cenntro Electric CICS, S.R.L. borrowed $408,000 and $92,000 from Bank of Multiple Promerica Republic Dominicana, with the interest of 10% and the due date of April 29, 2029 and June 20, 2029, respectively. Cenntro Electric CICS, S.R.L. should repay the loan monthly infive years after the month the loans were borrowed. As of December 31, 2025, Cenntro Electric CICS, S.R.L. was no longer a subsidiary of the Company.

(2) In April 2024, Cenntro Electric CICS, S.R.L. was granted bank facility of DOP10,000,000 (approximately $159,644) or equivalent USD from Bank of Multiple Promerica Republic Dominicana, with the interest of 10%, with the contract term offive years. During the term of this agreement, the facility shall be reviewed on each annual calendar date. As of December 31, 2025, Cenntro Electric CICS, S.R.L. was no longer a subsidiary of the Company.

(3)On December 23, 2025, the Company borrowed RMB 8,500,000 (approximately $1,215,484) from Zhejiang Changxing Rural Commercial Bank Co., Ltd., with the interest of 3.20% per annum, with the period from December 29, 2025 to December 20, 2028.

(4) On May 13, 2025, the Company was granted bank facility of RMB 10,000,000 (approximately $1,404,692) from Industrial and Commercial Bank of China, with the interest of 2.50%, with the period from May 13, 2025 to May 12, 2028. From May 2025 to September 2025, loan principle of $1,516,607 was borrowed from the bank and will be due inone year. From July 2025 to September 2025, loan principal of $623,263 was repaid. On October 14, 2025, an additional loan of $110,802 was borrowed. The loan was pledged by the plants and building and land use right with net value of $15,563,984.

NOTE 14 - INCOME TAXES

Australia

CEGL is subject to a tax rate of 25%.

United States

U.S. subsidiaries are subject to a federal tax rate of 21% and respective state tax rate. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits.

State corporate income tax rate was 0% and 9% in Nevada and New Jersey.

Europe

Subsidiaries in Germany, Spain, Italy, Netherlands and Turkey are subject to a tax rate of 15.825%,25%,24%,19% and 25%, respectively. The German tax rate presented above represents the federal corporate income tax plus solidarity surcharge and does not include municipal trade tax, which varies by jurisdiction.

Hong Kong

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. Effective from April 1, 2018, a two-tier corporate income tax system was officially implemented in Hong Kong, which is 8.25% for the first HK$2.0 million profits, and 16.5% for the subsequent profits, it is exempted from the Hong Kong income tax on its foreign-derived income. CEGI’s subsidiaries, CAG HK and Simachinery HK, are registered in Hong Kong as intermediate holding companies, subject to an income tax rate of 16.5% for taxable income earned in Hong Kong. Payments of dividends from Hong Kong subsidiaries to CEGI are not subject to any Hong Kong withholding tax.

PRC

Pursuant to the tax laws and regulations of the PRC, the Company’s applicable enterprise income tax (“EIT”) rate is 25%. Jiangsu Tooniu Tech Co. Limited and Hangzhou Hengzhong Tech Co., Limited qualify as Small and micro enterprises in the PRC, and are entitled to pay a reduced income tax rate of 5%.

Mexico

Cennatic Energy S. de R.L. de C.V. is subject to a tax rate of 30%.

Colombia

Starting from 2023, the income tax rate of companies in Colombia was gradually increased from 30% to 35% and remaining at 35% in 2024 and 2025. Cenntro Automotive S.A.S. and Cenntro Electric Colombia S.A.S. are subject to a tax rate of 35% for the years ended December 31, 2025 and 2024.

Income tax benefit for years ended December 31, 2025 and 2024 was $52,920 and $35,524.

The components of losses before income taxes are summarized as follows:

Cash paid for income taxes, net of refunds, are summarized as follows. The amounts presented represent cash payments for income taxes made in the respective jurisdictions in which the Company operates.

As the main business operations were concentrated in China, PRC statutory income tax rate was applied. The actual income tax expense reported in the consolidated statements of operations and comprehensive loss for years ended December 31, 2025 and 2024 differs from the amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following:

NOTE 14 - INCOME TAXES (CONTINUED)

The tax effects of temporary differences that give rise to the deferred income tax liabilities balances as of December 31, 2025 and 2024 are as follows:

The valuation allowances as of December 31, 2025 and 2024 were provided for the deferred income tax assets of certain subsidiaries, which were at cumulative loss positions. In assessing the realization of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable.

For entities incorporated in Hong Kong, net losses of $3,483,667 can be carried forward indefinitely.

For entities incorporated in the U.S., federal net operating losses of $72,118,331 can be carried forward indefinitely subject to a limitation in utilization against 80% of annual taxable income. Federal net operating losses of $3,740,668, $1,430,246, $744,848, and $1,512,798 will expire if unused by 2035, 2036, 2037 and 2038, respectively.

For entities incorporated in the PRC, net losses can be carried forward for five years. PRC net losses of $48,778,303 were available to offset future taxable income. Net losses of $2,182,986, $5,393,901, $10,451,706, $13,134,121 and $12,302,644 will expire, if unused, by 2025, 2026, 2027, 2028 and 2029, respectively.

For entities incorporated in German, net losses of $39,831,028 can be carried forward indefinitely.

For entities incorporated in Australia, net losses of $60,900,732 can be carried forward indefinitely.

Internal Revenue Code of 1986, as amended (“IRC”), Section 382 provides that, after an ownership change, the amount of a loss corporation’s taxable income for any post-change year that may be offset by pre-change losses shall not exceed the IRC Section 382 limitation for that year. The IRC Section 382 limitation generally equals the fair market value of the old loss corporation multiplied by the long-term tax-exempt rate. A loss corporation is any corporation that has a net operating loss, a net operating loss carryforward, or a net unrealized built-in loss for the taxable year in which the ownership change occurs. An ownership change is a greater than 50-percentage point increase in ownership by five-percent shareholders.

The Company has not yet performed an IRC Section 382 analysis to determine whether an ownership change has occurred and whether any tax attributes are limited. The Company has recorded a full valuation allowance against its deferred tax assets and does not expect to utilize its tax attributes. Once the Company utilizes its tax attributes, a complete IRC Section 382 analysis will be performed.

Uncertain tax positions

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and 2024, the Company didnot have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months.

NOTE 15 - LEASES

The Company leases offices space under non-cancellable operating leases. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheets.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Loss from early termination of lease contract were 717,633 and 2,218,120 for the years ended December 31, 2025 and 2024, respectively, resulting from the early termination of the Company’s operating leases.

A summary of lease cost of continuing operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

A summary of supplemental information related to operating leases held for continuing operations were as follows:

The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and an amount equal to the lease payments in a similar economic environment.

The following table summarized the maturity of lease liabilities held for continuing operations under operating leases as of December 31, 2025:

A summary of lease cost of discontinued operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

A summary of supplemental information related to operating leases held for discontinued operations were as follows:

No lease liabilities held for discontinued operations under operating leases as of December 31, 2025.

NOTE 16 - CONVERTIBLE PROMISSORY NOTE AND WARRANT

Convertible Promissory Note

On July 20, 2022, the Company issued to investors a convertible promissory note (the “Note”) in the aggregate principal amount of $61,215,000 due on July 19, 2023, unless earlier repurchased, converted or redeemed. On January 3, 2023, August 11, 2023, January 17, 2024 and December 23, 2024, the Company and the investors made amendments to extend the due date to July 19, 2023, January 19, 2024, January 19, 2025 and January 19, 2026, respectively. The Note bears interest at a rate of 8% per annum, and the net proceeds after deducting issuance expenses was $54,069,000.

The main terms of the Note are summarized as follows:

Conversion feature

At any time after the issue date until the Note is no longer outstanding, this Note shall be convertible, in whole or in part, into common stock at the option of the holder, at any time and from time to time.

Redemption feature

If the Company shall carry out one or more subsequent financings in excess of $25,000,000 in gross proceeds, the holder shall have the right to (i) require the Company to first use up to 10% of the gross proceeds of such subsequent financing if the aggregate outstanding principal amount of the Note is in excess of $30,000,000 and (ii) require the Company to first use up to 20% of the gross proceeds of such subsequent financing if the outstanding principal amount of the Note is $30,000,000 or less to redeem all or a portion of this Note for an amount in cash equal to the Mandatory Redemption Amount equal to 1.08 multiplied by the sum of principal amount subject to the mandatory redemption, plus accrued but unpaid interest, plus liquidated damages, if any, and any other amounts.

In addition, if the closing price of the common stock on the principal trading market is below the floor price of $1.00 per share for a period often consecutive trading days, the holder shall have the right to require the Company to redeem the sum of principal amount plus accrued but unpaid interest under the Note.

Contingent interest feature

The Note is subject to certain customary events of default. If any event of default occurs, the outstanding principal amount, plus accrued but unpaid interest, liquidated damages and other amounts owing, shall become immediately due and payable, and at the holder’s election, in cash at the mandatory default amount or in common stock at the mandatory default amount at a conversion price equal to 85% of the 10-day volume weighted average price. Commencing 5 days after the occurrence of any event of default, the interest shall accrue at an interest rate equal to the lesser of 10% per annum or the maximum rate permitted under applicable law.

The financial liability was initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The remaining estimated fair value adjustment is presented as other income (expense) in the consolidated statement of operations, as change in fair value of convertible notes.

Note amendment May 2025

On May 16, 2025, the Company and About Investment Pte. Ltd., a Singapore exempt private company limited by shares (“Holder”) entered into an amendment (the “Note Amendment”) to the Note originally issued by the Company on July 20, 2022, in an original principal amount of $52,237,500.

Pursuant to the Note Amendment, the parties have agreed to amend the floor price of any conversions of the Note to $0.202 per share (equivalent to $12.12 per share after giving effect to the reverse stock split effective on April13, 2026) equal to an eighty percent (80%) discount of the closing bid price of the Company’s common stock during the trading day immediately preceding the Note Amendment, which will be adjusted accordingly in the event of a share split or combination. The terms of the Amended Note continue to grant the Holder the right to convert from time to time at its election, all or any portion of the outstanding balance of the Note into shares of common stock of the Company at the conversion price, which is equal to the lesser of (i) the fixed conversion price or (ii) eighty-five percent (85%) of the ten(10)-day VWAP during the ten (10) consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date, and in each case subject to adjustment set forth in the Note.

Conversion of Note, Exchange Agreement and 2025 Convertible Note

On October 8, 2025, About Investment Pte. Ltd. executed its rights to convert the Note to ordinary shares upon certain default trigger event underlying certain terms of the Note by submitting a conversion notice, resulting in an aggregate of 24,000,000 shares issued with total principal of $11,174,350 applied against the Note. On October 23, 2025, the Company and the Holder further entered into an exchange agreement, pursuant to which the Company issued a new convertible note in a principal amount of $4,000,000 (the “2025 Convertible Note”) in exchange for the cancellation of the existing Note.

The 2025 Convertible Note bears interest at a rate of 8% per annum and matures on January 19, 2026. At any time after the issuance date until the 2025 Convertible Note is no longer outstanding, the 2025 Convertible Note shall be convertible, in whole or in part, into shares of common stock at the option of the Holder, at a fixed conversion price of $0.10 per share (equivalent to $6.0 per share after giving effect to the reverse stock split effective on April13, 2026), subject to adjustment for stock splits or combinations.

Between October 23, 2025 and December 31, 2025, $1,200,000 of principal under the 2025 Convertible Note was converted into 12,000,000 shares (equivalent to 200,000 shares after giving effect to the reverse stock split effective on April13, 2026) of common stock. As of December 31, 2025, outstanding principal was $2,800,000.

The movement of the Note during the year ended December 31, 2025 and 2024 was as follows:

The estimated fair value of and 2025 Convertible Note as of December 31, 2025 and December 31, 2024 was computed using a Binomial lattice model and a Monte Carlo Simulation Model, respectively, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement within the ASC 820 fair value hierarchy. The unobservable inputs utilized for measuring the fair value of the Note and 2025 Convertible Note reflect the Company’s assumptions about the assumptions what market participants would use in valuing the instruments the respective measurement dates, including the Company’s historical stock price volatility, risk-free rates based on U.S. Treasury Strip yields, and yields of comparable debt instruments.

NOTE 16 - CONVERTIBLE PROMISSORY NOTE AND WARRANT (CONTINUED)

We determined the fair value by using the following key inputs to the Binomial Tree Model as of December 31, 2025 and the Monte Carlo Simulation Model as of December 31, 2024:

*On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

Warrant

Accompany with the Note, the Company issued to the same investor warrants to purchase up to 2,473,334 warrant shares (equivalent to 41,222 shares after giving effect to the reverse stock split effective on April 13, 2026) of the Company, with an exercise price of $1.61 per share (equivalent to $96.6 per share after giving effect to the reverse stock split effective on April 13, 2026), which may be exercised by the holders on a cashless basis by using Black-Scholes model to determine the net settlement shares.

Additionally, after the Company completed the above Note financing, the Company issued to the placement agent warrants to purchase 247,333 warrant shares (equivalent to 4,122 shares after giving effect to the reverse stock split effective on April 13, 2026) of the Company at same day, as part of the underwriter’s commission. The warrants were issued with an exercise price of $1.77 per share (equivalent to $106.2 per share after giving effect to the reverse stock split effective on April 13, 2026).

Both warrants are exercisable from the date of issuance and have a term offive years from the date of issuance. They were presented as liabilities on the consolidated balance sheet at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”. The liabilities then will be remeasured every reporting period with any change to fair value recorded as other income (expense) in the consolidated statement of operations.

The movement of warrants during the years ended December 31, 2025 and 2024 were as follows:

*On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

The fair value for thesetwo warrants were computed using the Binomial model with the following assumptions:

NOTE 17- SHARE-BASED COMPENSATION

On the Implementation Date, and pursuant to the Scheme, Cenntro Inc. assumed CEGL’s obligations with respect to the settlement of the options that were issued by CEGL prior to the Implementation Date pursuant to CEGL’s amended and restated 2016 incentive stock option plan and 2022 stock incentive plan (the “Share Option Plans”) by way adoption of a new incentive plan, the Company’s 2023 equity incentive plan (the “2023 Plan”).

Following the Implementation Date, no new options will be issued under the Share Option Plans. The Company has assumed CEGL’s obligations with respect to the settlement of incentive options that were previously issued by CEGL under the 2023 Plan.

Incentive Stock Option Limit: the maximum number of Common Stock that may be issued upon the exercise of incentive stock options (“ISOs”) under the 2023 Plan is 30,000,000 shares (equivalent to 500,000 shares after giving effect to the reverse stock split effective on April 13, 2026) of Common Stock.

For the years ended December 31, 2025 and 2024, the total share-based compensation expenses were comprised of the following:

A summary of share options activity for the years ended December 31, 2025 and 2024 were as follows:

*On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

The Company calculated the fair value of the share options on the grant date and modification date using the Black-Scholes option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table.

The expected volatility is calculated based on the annualized standard deviation of the daily return embedded in historical share prices of the Company. The risk-free interest rate is estimated based on the yield to maturity of US treasury bonds based on the expected term of the incentive shares.

As of December 31, 2025, there was approximately $679,790 of total unrecognized compensation cost from continuing operations related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 0.25 years.

NOTE 18 - COMMON STOCK AND RESTRICTED NET ASSETS

Common stock

As of December 31, 2022, the issued and outstanding ordinary shares are 30,084,199 (equivalent to 501,403 shares after giving effect to the reverse stock split effective on April 13, 2026). During the year ended December 31, 2023, investor warrants were exercised via cashless option by the investors for 360,710 ordinary shares (equivalent to 6,012 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company. On September 1, 2023 the Company held its annual general meeting of shareholders where among other proposals, the shareholders of the Company did approve the consolidation of the common stock of the Company on aone-for-ten (1:10) basis with effect from December 8, 2023.383,869 ordinary shares (equivalent to 6,398 shares after giving effect to the reverse stock split effective on April 13, 2026) were issued during the shares consolidation. As of December 31, 2023, the issued and outstanding ordinary shares are 30,828,778 (equivalent to 513,813 shares after giving effect to the reverse stock split effective on April 13, 2026).

During the year ended December 31, 2024, investor warrants were exercised via cashless option by the investors for 37,819 ordinary shares (equivalent to 630 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company. With Fractional shares of 17 (equivalent to 1 share after giving effect to the reverse stock split effective on April 13, 2026) issued due to reverse stock split, as of December 31, 2024, the issued and outstanding ordinary shares are 30,866,614 (equivalent to 514,444 shares after giving effect to the reverse stock split effective on April 13, 2026).

During the year ended December 31, 2025, investor warrants were exercised via cashless option by the investors for 14,655,367 ordinary shares (equivalent to 244,256 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company.42,390,850 shares (equivalent to 706,514 shares after giving effect to the reverse stock split effective on April13, 2026) were converted from convertible bonds convertible bonds. As of December 31, 2025, the issued and outstanding ordinary shares are 87,912,831 (equivalent to 1,465,214 shares after giving effect to the reverse stock split effective on April13, 2026).

Restricted net assets

A significant portion of the Company’s operations are conducted through its PRC (excluding Hong Kong) subsidiaries. Due to restrictions on the distribution of share capital from the Company’s subsidiaries in PRC, total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were$28,544,279 as of December 31, 2025.

NOTE 19 - NET LOSS PER SHARE

Basic and diluted net loss per share for each of the year presented were calculated as follows:

The Company incurred losses for the years ended December 31, 2025 and 2024, no potential common stock were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company.

NOTE 20 - CONCENTRATIONS

The following table sets forth information as to each customer that accounted for 10% or more of net revenue for continuing operation for the years ended December 31, 2025 and 2024.

The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable, held for continuing operation as of December 31, 2025 and December 31, 2024.

The following table sets forth information as to each customer that accounted for 10% or more of advance from customers, held for continuing operation as of December 31, 2025 and December 31, 2024.

For the years ended December 31, 2025 and 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s total purchases of continuing operation, were as follows:

As of December 31, 2025 and 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s accounts payable of continuing operation, were as follows:

The following table sets forth information as to each supplier that accounted for 10% or more of advance to suppliers, held for continuing operation as of December 31, 2025 and 2024.

NOTE 21 - COMMITMENTS AND CONTINGENCIES

Litigation

The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

On July 22, 2022, Xiongjian Chen filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey. The complaint alleges eleven causes of action sounding in contract and tort against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG. With respect to thefour contract claims, Plaintiff alleges breach of contract claims pertaining to an employment agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL. With respect to theseven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May 28, 2023, Plaintiff filed an amended complaint. On July 20, 2023 the Defendants filed a motion seeking the dismissal of that amended complaint. On September 22, 2023, the Plaintiff filed to oppose our Motion to Dismiss and Motion to Strike. The Defendants filed our reply briefs by the deadline on November 9, 2023. On January 25, 2024, the Magistrate Judge entered an Order granting Plaintiff’s Motion to Amend and denying our Motion to Strike as moot. On November 12, 2024, District Court issued an Order, dismissing Plaintiff’s all claims except with respect to the promissory estoppel claim against Peter Wang. On November 26, 2024, the defendants filed a Motion for Reconsideration of the Court’s denial of Cenntro’s Motion to Dismiss Plaintiff’s promissory estoppel claim against Peter Wang. Concurrently, on same date Plaintiff moved for reconsideration of the Court’s decision to dismiss the case as against CAG for lack of personal jurisdiction. On December 30, 2024, the Defendant filed a Reply in Further Support of Peter Wang’s Motion for Reconsideration, which, in accordance with the Court’s practices, was filed as part of a Motion for Leave to File a Reply Brief, against which the Plaintiff filed an Opposition on January 17, 2025. On May 30, 2025, the Court issued the order denying both sides’ respective motions for reconsideration. On June 10, 2025, Plaintiff’s counsel informed us that they do not intend to file a second amended complaint, which means that CAC, CAG, CEL and CENN will be dismissed from the case; and that the case will proceed to discovery solely on Plaintiff’s one claim against Wang for promissory estoppel. At the in-person conference on August 19, 2025, the Court ordered deadlines for completing various stages of discovery in the case, with May 15, 2026 being the deadline for all fact discovery. We anticipate remote financial consequences will incur to the company.

On July 3, 2025, Cenntro Electric Group (Europe) GmbH (“CEGE”) demanded the return of a EUR 180,000 rental deposit from its former landlord following the termination of a commercial lease on December 31, 2024. Without response from the landlord, CEGE initiated legal proceedings on July 22, 2025, by filing an online payment order (Mahnantrag) with the District Court of Hünfeld, claiming the full deposit amount, statutory interest, and legal fees. On August 4, 2025 the Landlord submitted objection to the default summons. CEGE is currently working on its further action.

NOTE 21 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

On January 2, 2024, MHP Americas, Inc. (“MHP”), through counsel, sent a letter to Cenntro Electric Group Limited (“Cenntro”) demanding payment allegedly owed by Cenntro to MHP in the amount of $1,767,516.91 for unpaid invoices and $3,289,500 for total contract invoices and milestone payments for alleged breaches in connection with the parties’ August 8, 2022, Master Consulting Services Agreement and/or March 9, 2023, Statement of Work. On January 12, 2024, Cenntro, through counsel, responded to the letter denying any breach and disputing the amounts claimed.

On April 10, 2024, CEGL filed a lawsuit against MHP Americas, Inc. (“MHP”) for breach under the Master Consulting Services Agreement and SAP S/4HANA SOW by failure to properly implement the SAP S/4HANA globally as set forth in those contracts, and for breach of implied covenants of good faith and fair dealing, causing Cenntro to suffer significant damages; and demanded a jury trial on all issues which are triable. Under this claim, CEGL is seeking for a remittance of $512,226 paid to date and a recission of the remaining contract with MHP. The litigation was removed to Federal Court on May 7, 2024 where it is pending. At the time of this report, discovery has been completed. Mediation is schedule on November 19, 2025. The mediation scheduled for November 19, 2025 proceeded with counsel representing the Company. No agreement was reached during the mediation session and the parties did not engage in substantive settlement discussions. As of the date of this Annual Report, no further mediation sessions have been scheduled and the parties have not yet agreed on the next procedural steps. The case remains pending before the Court.

On March 28, 2025 BAL Freeway Associates, LLC filed an Unlawful Detainer against Cenntro Automotive Corporation alleging non-payment of rents for commercial leased property in San Bernadino County, Ontario, CA. At the time of this report negotiations between parties have been culminated in a partial settlement with possession begin restored to BAL Freeway Associates on May 31, 2025, and the issue of damages remains outstanding. On June 18, 2025, BAL Freeway filed a First Amended Complaint for Damages for Breach of Contract, seeking full damages resulting from the alleged breach of the Lease, claiming total losses no lower than $4,400,000. Negotiations are ongoing at this stage of the reclassified Civil Matter.

On April 16, 2025, Shenzhen Jiangxin Automation Technology Co., Ltd. (“Jiangxin”) filed a lawsuit with the People’s Court of Yuhang District, Hangzhou, against Hangzhou Ronda Tech Co., Limited (“Ronda”), seeking payment of equipment purchase price totaling RMB 170,555 plus accrued interest. Jiangxin claims that Ronda has failed to pay the remaining balance due under three Equipment Purchase Agreements signed during 2021 and 2022. On September 26, 2025, Ronda submitted its defense and counterclaim, asserting that Jiangxin had not fulfilled its contractual obligations, including the delivery of complete technical documents, installation and test run, and therefore the conditions for payment had not been satisfied. Ronda also reserved the right to terminate the agreements and seek a full refund of all payments made. The case remains pending before the court.

On December 2 2025, Wuxi Hefu Metal Products Technology Co., Ltd. (“Hefu”) filed a lawsuit with the People’s Court of Yuhang District, Hangzhou, against Hangzhou Ronda Tech Co., Limited (“Ronda”), seeking payment of mold development fees totaling RMB 476,314.2 plus accrued interest. Hefu alleges that under the Automotive Parts Product Development Agreement and its supplementary agreement signed on September 20, 2022, it completed the development and delivery of the molds in accordance with the contractual requirements, but Ronda failed to pay the remaining balance of the mold development fees. Hefu further applied for property preservation, and on December 15, 2025, the court issued a ruling to freeze Ronda’s bank deposits in the amount of RMB 476,314.2 or seize other assets of equivalent value. On January 7, 2026, the court organized a pre-trial mediation between the parties. The parties are currently awaiting the mediation proposal from the court. If mediation is unsuccessful, the case will proceed to formal trial. The case remains pending before the court.

NOTE 22 - RELATED PARTY TRANSACTIONS AND BALANCES

The table below sets forth the major related parties and their relationships with the Company:

NOTE 22 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Related party transactions

During the years ended December 31, 2025 and 2024, the Company had the following material related party transactions for the continuing operation.

Amounts due from Related Parties

The following table presents amounts due from related parties as of December 31, 2025 and December 31, 2024.

Amounts due to a related party - current

The following table presents amounts due to a related party as of December 31, 2025 and December 31, 2024.

NOTE 23 - SUBSEQUENT EVENT

On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. Except the events mentioned above, there were no other subsequent events with material financial impact on the consolidated financial statements.

NOTE 24 – CONDENSED COMPANY FINANCIAL STATEMENTS

The condensed parent company financial statements are presented in accordance with Rule 12-04, Schedule I of Regulation S-X, as the net assets of the Company’s consolidated subsidiaries are restricted as to transfer to the parent company in an amount exceeding 25% of the consolidated net assets of the Company.

Basis of presentation

The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements.

Investments in subsidiaries

The Parent Company and its subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation. The results of operations of the Company’s subsidiaries include the impact of discontinued operations. Such amounts are reflected in “share of loss of subsidiaries” in the accompanying condensed parent company statements of operations.

Condensed Balance Sheets

*On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

Condensed Statements of operations

Condensed Statement of Cash Flow