Cenntro Inc.

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. CAE, CEGE and Antric were fully liquidated for the six months ended June 30, 2026.

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 was 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 the court formally opened insolvency proceedings for CAE on June 18, 2026; (iii) CEGE initiated insolvency proceedings in June 2026, and the court appointed a provisional insolvency administrator on June 9, 2026. Upon CEGE and CAE entering insolvency, the Company lost full governance control over their 25% and 75% equity interests in Antric respectively, leading to consequential deconsolidation of Antric effective June 18, 2026. However, Antric does not qualify for discontinued operations presentation standalone, as its revenue, asset scale and strategic weight are immaterial to the consolidated group and its exit does not constitute a separate strategic shift under ASC 205-20.

Accordingly, the unaudited condensed consolidated financial statements and notes 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 unaudited condensed consolidated balance sheets as of December 31, 2025. As of June 30, 2026, all assets and liabilities of CEGE and CAE were fully derecognized following deconsolidation on June 9 and June 18, 2026, respectively, with no held-for-sale balances remaining on the balance sheet. 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. For the six months ended June 30, 2026, total deconsolidation loss of $4.7 million was recorded, including $2.3 million from CEGE presented in discontinued operations and $0.5 million from CAE presented in discontinued operations, and $1.9 million from Antric presented in continuing operations.

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 six months ended June 30, 2026 and 2025 were as follows:

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

As of June 30, 2026, Cenntro Inc.’s subsidiaries were as follows:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated balance sheet as of December 31, 2025, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements have been included. The interim financial information should be read in conjunction with the consolidated financial statements and the notes for the fiscal year ended December 31, 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results for the full year or any future periods.

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

The preparation of the unaudited condensed 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 unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant accounting estimates reflected in the Company’s unaudited condensed 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; and ii) 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 unaudited condensed 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.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 unaudited condensed consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other expense in the unaudited condensed 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 unaudited condensed 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 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 line for the six months ended June 30, 2026 and 2025:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

Contract 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 six months ended June 30, 2026 and 2025, the Company recognized $365,239 and $568,035 revenue that was included in contractual liabilities as of January 1, 2026 and 2025, respectively.

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

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 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 unaudited condensed 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 unaudited condensed consolidated financial statements. The Company is currently evaluating the impact of adopting this standard on its unaudited condensed consolidated financial statements and related disclosures and expects to adopt the guidance in its fiscal year beginning January 1, 2027.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments in this update improve interim financial reporting by clarifying and simplifying certain disclosure requirements and aligning interim reporting with existing annual disclosure requirements in specific areas. The amendments are intended to reduce complexity while maintaining decision-useful information for investors. The Company is currently evaluating the impact of adopting this standard on its unaudited condensed consolidated financial statements and related disclosures and expects to adopt the guidance when it becomes effective for the Company.

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 unaudited condensed consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.

NOTE 3 - ACCOUNTS RECEIVABLE, NET

Accounts receivable, net were summarized as follows:

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

NOTE 4 - INVENTORIES

Inventories were summarized as follows:

The changes in inventory valuation allowance were as follows:

NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS

Prepayment and other current assets consisted of the following:

On October 31, 2025, the Company entered into a working capital loan contract with Changyue to lend principal amount of RMB1,800,000 ($265,287), with an annual interest rate of 3.0% and due on December 30, 2025, and the loan remains past due as of June 30, 2026. Management is actively following up with Changyue regarding repayment and expects to recover the outstanding balance based on the current repayment arrangement.

Multiple interest-free intercompany drawdowns to former group entity CICS totaling $1,023,216 over several prior fiscal years. Full allowance for credit losses was recorded for this balance due to unrecoverability, resulting in no carrying value as of June 30, 2026 and December 31, 2025.

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

Impairment loss of prepayment and other current assets was $2,917,428 andnil, respectively, for the six months ended June 30, 2026 and 2025.

NOTE 6 – 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.

On May 14, 2026, Acton, Inc. was filed a Certificate of Dissolution with the Nevada Secretary of State, ending all corporate powers of the issuer. Accordingly, the Company wrote off the full carrying value of this debt security investment for the six months ended June 30, 2026.

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET

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

Depreciation expenses charged to the continuing operations for the six months ended June 30, 2026 and 2025 were $854,350 and $894,429, respectively. There’sno depreciation expense of discontinued operations for the six months ended June 30, 2026 and 2025.

There’sno impairment loss in property, plant and equipment of continuing operations and discontinued operations for the six months ended June 30, 2026 and 2025. For the six months ended June 30, 2026, the impairment of property, plant and equipment, which was fully held by CAE, was fully written off due to the liquidation of CAE.

NOTE 8 – INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

Amortization expenses charged to the continuing operations for the six months ended June 30, 2026 and 2025 were $224,932 and $211,496, respectively.

NOTE 9 – ACCOUNTS PAYABLE

NOTE 10 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities were summarized as follows:

The loans details were as follows:

NOTE 11 –SHORT-TERM AND LONG-TERM BANK LOANS

NOTE 12 - 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 12.6% 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 six months ended June 30, 2026 and 2025.

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

NOTE 13 - 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.

A summary of lease cost of continuing operations recognized in the Company’s unaudited condensed 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 June 30, 2026.

A summary of lease cost of discontinued operations recognized in the Company’s unaudited condensed 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 June 30, 2026.

NOTE 14 - 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 unaudited condensed 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 April 13, 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, and further extended to January 19, 2027. 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 April 13, 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 April 13, 2026) of common stock. As of December 31, 2025, outstanding principal was $2,800,000.

The movement of Note during the six months ended June 30, 2026 and 2025 are as follows:

The estimated fair value of and 2025 Convertible Note as of June 30, 2026 and June 30, 2025 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 14 - CONVERTIBLE PROMISSORY NOTE AND WARRANT (CONTINUED)

We determined the fair value by using the following key inputs to the Binomial Tree Model as of June 30, 2026 and December 31, 2025:

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, 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 a same day, as part of the underwriter’s commission. The warrants were issued with an exercise price of $1.77 per share.

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 unaudited condensed 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 unaudited condensed consolidated statement of operations.

The movement of warrants during the six months ended June 30, 2026 and 2025 are 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 unaudited condensed 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 15- 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 six months ended June 30, 2026 and 2025, the total share-based compensation expenses were comprised of the following:

A summary of share options activity for the six months ended June 30, 2026 and 2025 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 unaudited condensed 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 June 30, 2026, there wasno total unrecognized compensation cost from continuing operations related to unvested share options.

NOTE 16 – CONCENTRATIONS

Continuing operations

The following table sets forth information as to each customer that accounted for 10% or more of net revenue for continuing operation for the six months ended June 30, 2026 and 2025.

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 June 30, 2026 and December 31, 2025.

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 June 30, 2026 and December 31, 2025.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL NOTE 16 –

CONCENTRATIONS (CONTINUED)

For the six months ended June 30, 2026 and 2025, 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 June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025.

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Litig ation

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 (the “Plaintiff”) 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, monetary 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. The corporate defendants have since been dismissed, leaving the Company’s Chief Executive Officer, Wang, as the sole defendant. Under an executive indemnification agreement, the Company may, subject to its terms and applicable law, be required to cover certain defense costs and liabilities arising from claims related to Wang’s service. At the in-person conference on August 20, 2025, the Court ordered deadlines for completing various stages of discovery in the case, initially setting May 15, 2026 as the deadline for all fact discover. The schedule was later adjourned due to Wang’s change of counsel. On July 24, 2026, the parties advised the Court that a dispute over Plaintiff’s proposed spoliation interrogatories remained pending and that party depositions would begin after the related spoliation issues are resolved. The Company anticipate remote financial consequences will incur to the company.

NOTE 17 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

On January 2, 2024, MHP Americas, Inc. (“MHP”), through counsel, sent a letter to Cenntro Electric Group Limited (“CEGL”) demanding payment allegedly owed by CEGL 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, CEGL, through counsel, responded to the letter denying any breach and disputing the amounts claimed.

On April 10, 2024, CEGL filed a lawsuit against 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 CEGL 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. Following the completion of discovery, the mediation scheduled for November 19, 2025 proceeded with counsel representing CEGL. No agreement was reached during the mediation session, and the parties did not engage in substantive settlement discussions. On July 17, 2026, MHP filed a motion for summary judgment seeking judgment on its breach of contract counterclaim in the amount of $1,767,516.91 and dismissal of CEGL’s claims. The motion 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. On June 29, 2026, the court issued a first-instance judgment, ordering Ronda to pay Jiangxin RMB 140,000 withinten days after the judgment becomes effective, while dismissing Jiangxin’s remaining claims, including its claim for accrued interest, and dismissing all of Ronda’s counterclaims. The first-instance judgment is subject to appeal and has not yet become final. The Company will continue to monitor the status of any appeal proceedings and enforcement of the judgment.

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 5, 2026, Ronda filed a counterclaim against Hefu, seeking the return of previously paid mold development fees of RMB 730,680, plus interest, alleging that Hefu’s products had quality issues and failed to satisfy the contractual requirements. On January 7, 2026, the court organized a pre-trial mediation between the parties. On March 25, 2026, the court held a hearing. On April 22, 2026, the court issued a first-instance judgment ordering Ronda to pay Hefu RMB 476,314.20 in mold fees, plus overdue payment interest from December 11, 2025 until full payment, and rejected all of Ronda’s counterclaims. On May 6, 2026, Ronda filed an appeal seeking reversal of the first-instance judgment and support for its counterclaim for the return of previously paid mold development fees of RMB 730,680, plus interest. The second-instance hearing was held on August 11, 2026, but no judgment has been issued, and the court has granted the parties atwo-month mediation period.

On March 4, 2026, American Quartz Group, Inc. (“AQGI”) filed an Unlawful Detainer action against Bison Motors Inc. (“Bison”) seeking possession of the premises. Bison subsequently filed a demurrer in response. On March 25, 2026, Bison filed a separate complaint against AQGI asserting claims including forcible detainer and conversion, seeking restoration of possession, return of inventory, and damages. On April 2, 2026, AQGI dismissed the Unlawful Detainer action. Bison’s separate action against AQGI remains pending, and Bison subsequently filed an ex parte application for temporary injunctive relief to restore its access to and use of the premises. Following a hearing held on May 12, 2026, the court granted Bison’s ex parte application and ordered AQGI not to interfere with Bison’s access to and use of the premises. On May 22, 2026, AQGI filed a new Unlawful Detainer action against Bison, seeking possession of the premises, past-due rent of US$148,413.12, daily damages, attorneys’ fees and forfeiture of the lease agreement. On June 12, 2026, Bison filed a demurrer to AQGI’s new Unlawful Detainer complaint, asserting that the underlying three-day notice was defective. Following a hearing held on July 17, 2026, the court overruled Bison’s demurrer and ordered Bison to file an answer to AQGI’s complaint by July 27, 2026. On July 27, 2026, Bison served its answer, denying AQGI’s material allegations, disputing the validity of the underlying three-day notice and asserting multiple affirmative defenses. AQGI’s new Unlawful Detainer action remains pending, and no trial date has been set.

On October 24, 2025, Ride Man LLC (“Ride Man”) filed a civil complaint against Cenntro Automotive Corporation and Cenntro, Inc. (collectively, the “Company”) in the Superior Court of New Jersey, Ocean County, alleging breach of warranty and violations of the New Jersey Consumer Fraud Act in connection with the purchase of certain commercial electric vehicles. Ride Man alleges that four Logistar 400 vehicles purchased from the Company were defective and failed to perform as warranted, and that the Company did not fulfill its repair and warranty obligations. The complaint seeks rescission of the purchase, refund of the purchase price, and recovery of related damages and costs. On April 29, 2026, the court entered defaults against both defendants. On July 17, 2026, the Company moved to vacate the defaults. The Company also sought dismissal of the disclaimed implied warranty claims and the insufficiently pleaded New Jersey Consumer Fraud Act claim. The motion is scheduled for consideration on August 14, 2026 and remains pending.

NOTE 18 - RELATED PARTY TRANSACTIONS AND BALANCES

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

NOTE 18 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Related party transactions

During the six months ended June 30, 2026 and 2025, 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 June 30, 2026 and December 31, 2025.

Amounts due to a Related Party

The following table presents amounts due to a related party as of June 30, 2026 and December 31, 2025.

NOTE 19 - 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 April 13, 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 share 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 April 13, 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 April 13, 2026) of the Company.42,390,850 shares (equivalent to 706,514 shares after giving effect to the reverse stock split effective on April 13, 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 April 13, 2026).

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 238 fractional shares rounded up to the nearest whole share.

On May 12, 2026, the Company completed an offshore private placement, issuing 1,000,000 shares of $0.0001 par common stock tofive individual investors for aggregate gross proceeds of $3.93 million.

As of June 30, 2026, the issued and outstanding ordinary shares are 2,465,452.

On July 22, 2026, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, effective July 20, 2026, in connection of the increase of the authorized shares of common stock from 16,666,667 shares, par value $0.0001 per share, to 3,000,000,000 shares, par value $0.0001 per share, and preferred stock from 1,666,667 shares, par value $0.0001 per share, to 100,000,000 shares, par value $0.0001 per share (the “Capital Stock Increase”). No other changes were made to the Company’s Amended and Restated Certificate of Incorporation.

NOTE 20 - SUBSEQUENT EVENT

On July 22, 2026, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, effective July 20, 2026, in connection of the increase of the authorized shares of common stock from 16,666,667 shares, par value $0.0001 per share, to 3,000,000,000 shares, par value $0.0001 per share, and preferred stock from 1,666,667 shares, par value $0.0001 per share, to 100,000,000 shares, par value $0.0001 per share (the “Capital Stock Increase”). No other changes were made to the Company’s Amended and Restated Certificate of Incorporation.

The Company has evaluated subsequent events through the date of issuance of the unaudited condensed consolidated financial statements, there were no subsequent events with material financial impact on the unaudited condensed consolidated financial statements.