Microvast Holdings, Inc.

Previous wording

Founded in 2006, Microvast was built on a guiding principle that remains central to our mission today: to innovate lithium-ion battery designs without relying on past technologies. We call this true innovation. We started without preconceived notions of lithium-ion battery creation, unlike many companies that repurposed legacy technologies for new markets like electric vehicles – a process we consider product development rather than true innovation. To understand this difference is to understand what we have set out to achieve.

Current wording

Founded in 2006, Microvast was built on a guiding principle that remains central to our mission today: to innovate lithium-ion battery designs without relying on legacy technologies. This approach allows us to create purpose-built solutions for new markets, rather than repurposing existing ones.

Previous wording

Our mission is to accelerate the global transition to electrification by delivering innovative battery solutions that support the adoption of electric vehicles and renewable energy. A key strategic focus is to be in a position to lead U.S. domestic battery production, reducing reliance on overseas suppliers, and strengthening national energy independence. We believe continuous investment in our technology and operations will deliver long-term targeted revenue and income growth.

Current wording

Our mission is to accelerate the global transition to electrification by delivering innovative battery solutions that support the adoption of electric vehicles and renewable energy. A key strategic focus is to become a leader in U.S. domestic battery production, reducing reliance on overseas suppliers, and strengthening national energy independence. We believe continuous investment in our technology and operations will deliver long-term revenue and income growth.

Previous wording

Through a vertically integrated approach, we have developed proprietary technologies spanning the entire battery system—from the core cell materials, including cathodes, anodes, electrolytes, and separators, to cells, modules, packs, energy storage containers to thermal management systems and advanced software controls. Our expertise has driven advancements in ultra-fast charging, high energy density, long lifespan, and safety—critical factors for commercial transportation and ESS applications.

Current wording

Through a vertically integrated approach, we have developed proprietary technologies spanning the entire battery system—from the core cell materials (cathode, anode, electrolyte, and separator) to cells, modules, packs, energy storage containers, thermal management systems, and advanced software controls. Our expertise has driven advancements in ultra-fast charging, high energy density, long lifespan, and safety—all critical factors for commercial transportation and ESS applications.

Previous wording

In previous years, we made significant investments in our capacity expansion in Clarksville, Tennessee and by the fourth quarter of 2023 had started to install certain sections of the production line. However, progress on certain third party construction workstreams as well as taking delivery and possession of further equipment started to be impacted toward the end of the fourth quarter of 2023 due to the required funding to complete the project not being secured. Ultimately, in the second quarter of 2024, we paused construction efforts on the Clarksville development due to insufficient funding. We made a strategic decision to pivot from the originally planned production of NMC production in Clarksville, Tennessee to the 565Ah lithium iron phosphate ("LFP") battery. We also consolidated our ESS operations previously in Colorado to Clarksville, Tennessee in order to enhance operational efficiencies and speed of deliveries for our U.S. business.

Current wording

We previously made significant investments in our capacity expansion in Clarksville, Tennessee. By the fourth quarter of 2023, certain sections of the production line had begun installation. However, progress on third-party construction and equipment delivery was impacted due to a lack of secured funding. Ultimately, in the second quarter of 2024, we paused construction efforts. We have since made a strategic decision to pivot from the originally planned NMC production in Clarksville to the 565Ah lithium iron phosphate (“LFP”) battery. We also consolidated our ESS operations from Colorado to Clarksville to enhance operational efficiencies and speed up deliveries for our U.S. business.

Previous wording

In August 2024, we introduced the Mega Energizer 6 MWh ("ME6") ESS container, featuring the LFP battery. The shift toward LFP technology for the U.S. ESS market is a strategic decision. The ME6 system offers a cycle life exceeding 10,000 cycles, a lifespan of up to 30 years, compact storage capabilities (6 megawatt hours ("MWh"), and enhanced reliability through IP55, C4, and nitrogen protection features. The adoption of LFP batteries provides lower costs, greater safety, and environmental benefits compared to NMC technology, further supporting our sustainability goals. Although construction progress has been negatively impacted by funding constraints, our goal is that our Clarksville, Tennessee facility will be our major production facility for LFP cells once financing is secured and the facility is completed.

Current wording

In August 2024, we introduced the Mega Energizer 6 (“ME6”), a 6 megawatt-hour (“MWh”) ESS container featuring our proprietary 565Ah LFP battery. The shift toward LFP technology for the U.S. ESS market is a strategic decision, offering lower costs, enhanced safety, and improved environmental performance compared to NMC technology. The ME6 system delivers over 10,000 cycles, a lifespan of up to 30 years, compact energy storage, and enhanced reliability through IP55, C4, and nitrogen protection features.

Previous wording

For the three months ended March 31, 2025, our revenue increased by $35.1 million, reaching $116.5 million, a 43.2% year-over-year increase. Additionally, our order backlog stood at $350.5 million, with the majority of these orders expected to be fulfilled in 2025 and 2026. As we continue to expand production capacity and advance next-generation battery technologies, we remain committed to driving battery innovation, scaling global production, and delivering high-performance sustainable energy solutions that power the future of mobility and energy storage.

Current wording

For the three months ended June 30, 2025, our revenue increased by $7.7 million, reaching $91.3 million, a 9.2% year-over-year increase. Additionally, our order backlog stood at $320.0 million, with the majority of these orders expected to be fulfilled in 2025 and 2026. As we continue to expand production capacity and advance next-generation battery technologies, we remain committed to driving battery innovation, scaling global production, and delivering high-performance sustainable energy solutions that power the future of mobility and energy storage.

Previous wording

In prior periods, the Company disclosed that substantial doubt existed about its ability to continue as a going concern due to uncertainties related to liquidity, capital requirements, and recurring operating losses. However, during the three months period ended March 31, 2025, the Company achieved positive operating income and generated cash inflow form operation, reflecting meaningful progress toward sustainable profitability. This improvement was driven by increased customer demand, improved gross margins, and reduced operating expenses, all of which positively impacted the Company’s liquidity position.

Current wording

In prior periods, the Company disclosed that substantial doubt existed about its ability to continue as a going concern due to uncertainties related to liquidity, capital requirements, and recurring operating losses. However, during the the six months period ended June 30, 2025, the Company achieved positive operating profit and operating cashflow, reflecting meaningful progress toward sustainable profitability. This improvement was driven by increased customer demand, improved gross margins, and reduced operating expenses, all of which positively impacted the Company’s liquidity position.

Previous wording

Our growth depends on being able to meet anticipated demand for our products. As of March 31, 2025, we had a backlog of approximately $350.5 million for our electric vehicles battery systems, equivalent to approximately 1,606.5 MWh. To increase our manufacturing output, address our backlog and capture growing market opportunities, we have made significant investment in capacity expansions in both Huzhou, China and Tennessee, United States.

Current wording

Our growth depends on being able to meet anticipated demand for our products. As of June 30, 2025, we had a backlog of approximately $320.0 million for our electric vehicles battery systems, equivalent to approximately 1,324.2 MWh. To increase our manufacturing output, address our backlog and capture growing market opportunities, we have made significant investment in capacity expansions in both Huzhou, China and Tennessee, United States.

Previous wording

Without access to financing, we are unable to progress the Clarksville expansion project on its intended timetable, and further progress is still contingent on having full access to funding to complete the remaining project work.

Current wording

Additional financing is needed to resume progress for our Clarksville battery production, and further progress is still contingent on having full access to funding to complete the remaining project work.

Previous wording

Future capacity expansions will require significant capital expenditures and will require a corresponding expansion of our supporting infrastructure, further development of our sales and marketing team, an expansion of our customer base and strengthened quality control. This capacity expansion will be carried out in a measured manner based on our ongoing assessment of medium- and long-term demand for our solutions.

Current wording

Future capacity expansions will require significant capital expenditures and will require a corresponding expansion of our supporting infrastructure, further development of our sales and marketing team, an expansion of our customer base and strengthened quality control.

Previous wording

After initially being focused on the Asia & Pacific regions, we have expanded and continue to expand our presence and product promotion to Europe and the U.S. to capitalize on the rapidly growing electric vehicle and battery energy storage markets in those geographies. As we continue to expand our geographic focus to Europe and the U.S., we believe sales of our products in Europe and the U.S. will have the potential to generate higher gross margins because average sales prices for customers in Europe and the U.S. are typically significantly higher than the average sales prices in China. It has been our experience that buyers in Europe and the U.S. are more motivated by the technologies and quality of our products than are buyers in China, making them less sensitive to the price of our products than are similarly situated buyers in China where we are also faced with intense competition from local Chinese battery manufacturers. Therefore, the geographic sources of our revenue will have an impact on our revenue and gross margins.

Current wording

After initially being focused on the Asia & Pacific regions, we have expanded and continue to expand our presence and product promotion to Europe and the U.S. to capitalize on the rapidly growing electric vehicle and battery energy storage markets in those geographies. As we continue to expand our geographic focus to Europe and the U.S., we believe sales of our products in Europe and the U.S. will have the potential to generate higher gross margins because average sales prices for customers in the U.S. are typically significantly higher than the average sales prices in China. It has been our experience that buyers in Europe and the U.S. are more motivated by the technologies and quality of our products than are buyers in China, making them less sensitive to the price of our products than are similarly situated buyers in China where we are also faced with intense competition from local Chinese battery manufacturers. Therefore, the geographic sources of our revenue will have an impact on our revenue and gross margins.

Previous wording

Additionally, government policies and economic incentives play a critical role in shaping demand for electric vehicles (EVs) and energy storage systems (ESS). Incentives such as EV purchase subsidies, tax credits for battery manufacturers, and renewable energy project grants have historically supported market growth. Similarly, carbon emission penalties and fleet-wide regulatory requirements for automakers further drive the adoption of zero-emission transportation and clean energy solutions. These policies expand our total addressable market, creating opportunities for increased sales and broader adoption of our battery technologies. However, changes in these incentives—such as reductions or eliminations of subsidies—could negatively affect demand for our products.

Current wording

Additionally, government policies and economic incentives play a critical role in shaping demand for EVs and ESS. Incentives such as EV purchase subsidies, tax credits for battery manufacturers, and renewable energy project grants have historically supported market growth. Similarly, carbon emission penalties and fleet-wide regulatory requirements for automakers further drive the adoption of zero-emission transportation and clean energy solutions. These policies expand our total addressable market, creating opportunities for increased sales and broader adoption of our battery technologies. However, changes in these incentives—such as reductions or eliminations of subsidies—could negatively affect demand for our products.

Previous wording

As a global company with operations and sales in China, the Asia-Pacific region, Europe, and the U.S., we are also exposed to trade policies, tariffs, and regulatory shifts that could impact our ability to meet projected sales and maintain profit margins. Any significant changes in international trade agreements, supply chain restrictions, or geopolitical tensions may influence production costs, material sourcing, and cross-border sales strategies. Navigating these regulatory complexities is essential to sustaining our competitive position and long-term growth trajectory.

Current wording

As a global company with operations and sales in China, the Asia-Pacific region, Europe, and the U.S., we are also exposed to trade policies, tariffs, and regulatory shifts that could impact our ability to meet projected sales and maintain profit margins. Any significant changes in international trade agreements, supply chain restrictions, or geopolitical tensions may influence production costs, material sourcing, and cross-border sales strategies. Changes in tariff policy in particular, whether threatened or implemented, may raise costs for consumers which could lead to softened consumer demand. In addition, because our manufacturing center is located in China, ongoing trade developments between the United States and China, such as import and export controls, may complicate our ability to rely on those manufacturing centers for continued production. Navigating these regulatory complexities is essential to sustaining our competitive position and long-term growth trajectory.

Previous wording

Our operating expenses consist of selling and marketing (S&M), general and administrative (G&A), and research and development (R&D) expenses.

Current wording

Our operating expenses consist of general and administrative (“G&A”), research and development (“R&D”) expenses, selling and marketing (“S&M”), and impairment loss of long lived assets.

Previous wording

General and administrative expenses. General and administrative expenses primarily comprise personnel-related costs for our executive, legal, finance, human resources, and IT teams, along with professional service fees, depreciation, amortization, and insurance costs. As we scale operations, we anticipate additional expenditures for personnel hiring, infrastructure development, and compliance-related activities. These investments are necessary to support our anticipated growth and ensure operational efficiency.

Current wording

G&A expenses primarily comprise personnel-related costs for our executive, legal, finance, human resources, and IT teams, along with professional service fees, depreciation, amortization, insurance costs and exchange gain/loss due to fluctuations in the Euro/RMB exchange rate. As we scale operations, we anticipate additional expenditures for personnel hiring, infrastructure development, and compliance-related activities. These investments are necessary to support our anticipated growth and ensure operational efficiency.

Previous wording

R&D expenses. R&D expenses primarily include salaries and stock-based compensation for our engineers and scientists, as well as raw material costs for experimental development, utility expenses, and depreciation costs related to R&D activities. As we continue to invest in new product development, advanced battery technologies, and enhanced functionality, we expect R&D expenditures to increase in absolute dollar terms. These investments are critical to maintaining technological leadership and delivering next-generation battery solutions to the market.

Current wording

R&D expenses primarily include salaries and stock-based compensation for our engineers and scientists, as well as raw material costs for experimental development, utility expenses, and depreciation costs related to R&D activities. As we continue to invest in new product development, advanced battery technologies, and enhanced functionality, we expect R&D expenditures to increase in absolute dollar terms. These investments are critical to maintaining technological leadership and delivering next-generation battery solutions to the market.

Previous wording

Selling and marketing expenses. Selling and marketing expenses include personnel-related costs for our sales and marketing teams, including salaries, stock-based compensation, and commission-based incentives. These expenses also cover advertising, promotional activities, and customer engagement efforts to drive product awareness and sales growth. As we continue to expand, we plan to hire additional sales personnel, enhance marketing programs, and strengthen customer relationships. Consequently, selling and marketing expenses are expected to increase in absolute dollar terms over the long term.

Current wording

S&M expenses include personnel-related costs for our sales and marketing teams, including salaries, stock-based compensation, and commission-based incentives. These expenses also cover advertising, promotional activities, and customer engagement efforts to drive product awareness and sales growth. As we continue to expand, we plan to hire additional sales personnel, enhance marketing programs, and strengthen customer relationships. Consequently, S&M expenses are expected to increase in absolute dollar terms over the long term.

Previous wording

Income tax in China is generally calculated at 25% of the estimated assessable profit of our subsidiaries in China, except that two of our Chinese subsidiaries were qualified as “High and New Tech Enterprises” and thus enjoyed a preferential income tax rate of 15%. A federal corporate income tax rate of 21% is applied for our U.S. entity. Income tax in the UK is calculated at an average tax rate of 19% of the estimated assessable profit of our subsidiary in the UK. German enterprise income tax, which is a combination of corporate income tax and trade tax, is calculated at 29.1% of the estimated assessable profit of our subsidiary in Germany.

Current wording

Income tax in China is generally calculated at 25% of the estimated assessable profit of our subsidiaries in China, except that two of our Chinese subsidiaries were qualified as “High and New Tech Enterprises” and thus enjoyed a preferential income tax rate of 15%. A federal corporate income tax rate of 21% is applied for our U.S. entity. The U.S. entity is also subject to Global Intangible Low-Taxed Income, a provision in the U.S. tax code designed to ensure that U.S. multinational companies pay a minimum tax on foreign earnings. Income tax in the UK is calculated at an average tax rate of 19% of the estimated assessable profit of our subsidiary in the UK. German enterprise income tax, which is a combination of corporate income tax and trade tax, is calculated at 29.1% of the estimated assessable profit of our subsidiary in Germany.

Previous wording

Our revenues increased from approximately $81.4 million for the three months ended March 31, 2024 to approximately $116.5 million for the same period in 2025, primarily driven by an increase in sales volume from approximately 353.3 MWh for the three months ended March 31, 2024 to approximately 535.7 MWh for the same period in 2025.

Current wording

Our revenues for the three months ended June 30, 2025 increased by $7.7 million, or 9.2%, compared to the same period in 2024. The increase was primarily driven by a 36.4% increase in sales volume from approximately 301.7 MWh for the three months ended June 30, 2024 to approximately 411.5 MWh for the same period in 2025.

Previous wording

Our cost of revenues for the three months ended March 31, 2025 increased by $9.3 million, or 14.6%, compared to the same period in 2024. The increase in the cost of revenues was primarily driven by an increase in sales volumes, and was partially offset by $1.1 million of decreased share-based compensation expenses.

Current wording

Our cost of revenues for the three months ended June 30, 2025 increased by $3.1 million, or 5.6%, compared to the same period in 2024. The increase in the cost of revenues was primarily driven by an increase in sales volumes, and was partially offset by $1.4 million of decreased share-based compensation expenses.

Previous wording

General and Administrative expenses for the three months ended March 31, 2025 decreased $13.3 million or 56.1% compared to the same period in 2024. The decrease in General and Administrative expenses was primarily due to $7.7 million of decreased share-based compensation expenses and $4.7 million attributed to positive foreign exchange changes due to fluctuations in the Euro exchange rate.

Current wording

General and administrative expenses for the three months ended June 30, 2025 decreased $19.5 million or 83.0% compared to the same period in 2024. The decrease in general and administrative expenses was primarily due to $7.1 million of decreased share-based compensation expenses and $7.2 million attributed to positive foreign exchange changes due to fluctuations in the Euro/RMB exchange rate.

Previous wording

Research and Development expenses for the three months ended March 31, 2025 decreased $3.2 million or 28.2% compared to the same period in 2024. The decrease in Research and Development expenses was primarily due to $1.6 million of decreased share-based compensation expenses and the reductions of U.S. headcount in Q2 2024.

Current wording

Research and development expenses for the three months ended June 30, 2025 decreased $2.4 million or 23.6% compared to the same period in 2024. The decrease in research and development expenses was primarily due to $2.4 million of decreased share-based compensation expenses.

Previous wording

For the three months period ended March 31, 2025, we recorded a gain of $43.2 million mainly due to the change in fair value of the Convertible Loan of $42.9 million, details please see Note 14 – Convertible loan measured at fair value.

Current wording

For the three months period ended June 30, 2025, we recorded a loss of $121.5 million mainly due to the change in fair value of the Convertible Loan of $121.2 million, for details please see Note 14 – Convertible Loan measured at fair value.

Previous wording

Our gross margin increased from 21.2% for the three months ended March 31, 2024 to 36.9% for the same period in 2025. This improvement was driven by higher production utilization, which enhanced the absorption of fixed costs. A more favorable product mix, with a growing share of higher-margin battery solutions, contributed to increased profitability. Additionally, lower raw material prices helped reduce input costs. These factors collectively highlight our ability to scale operations while improving profitability, positioning us for continued margin expansion and long-term financial growth.

Current wording

Our gross profit for the six months ended June 30, 2024 increased to 36.0% from 26.9% in the same period in 2024. This improvement was driven by higher production utilization, which enhanced the absorption of fixed costs. Further, a more favorable product mix, with a growing share of higher-margin battery solutions, contributed to increased gross profit.

Previous wording

As of March 31, 2025, our principal sources of liquidity were our cash and cash equivalents and restricted cash in the amount of $123.0 million.

Current wording

As of June 30, 2025, our principal sources of liquidity were our cash and cash equivalents and restricted cash in the amount of $138.8 million.

Previous wording

The consolidated net cash position as of March 31, 2025 included cash and cash equivalents of $64.4 million and $9.6 million held by our Chinese and European subsidiaries, respectively, that is not available to fund our U.S. operations unless funds are repatriated. Should we need to repatriate to the U.S. part or all of the funds held by our international subsidiaries in the form of a dividend, we would need to accrue and pay withholding taxes. We do not intend to pay any cash dividends on our common stock in the foreseeable future and intend to retain all of the available funds and any future earnings for use in the operation and expansion of our business in China, Europe and the U.S.

Current wording

The consolidated net cash position as of June 30, 2025 included cash and cash equivalents of $67.4 million and $17.3 million held by our Chinese and European subsidiaries, respectively, that is not available to fund our U.S. operations unless funds are repatriated. Should we need to repatriate to the U.S. part or all of the funds held by our international subsidiaries in the form of a dividend, we would need to accrue and pay withholding taxes. We do not intend to pay any cash dividends on our common stock in the foreseeable future and intend to retain all of the available funds and any future earnings for use in the operation and expansion of our business in China, Europe and the U.S.

Previous wording

•Forecasted cash inflow from operations - For the three months ended March 31, 2025, the Group generated operating profit of $18.9 million and generated operating cash flow of $7.2 million. We have an order backlog of $350.5 million with the majority of these orders expected to be fulfilled in 2025 and 2026. Additionally, we expect to generate higher gross margins because we will generate more revenue from Europe and the U.S with higher sales prices. We do not expect significant fluctuations in gross margin, considering our selling prices are secured by the contract backlogs and the market conditions of major raw materials. Thus, we believe that the operating cash flow in the forecasted period will continue to be positive.

Current wording

•Forecasted cash inflow from operations - For the six months ended June 30, 2025, the Group generated $35.1 million of profit from operations and $44.3 million of net cash from operating activities. We have an order backlog of $320.0 million with the majority of these orders expected to be fulfilled in 2025 and 2026. Additionally, we expect to generate higher gross margins because of a more favorable product mix, with a growing share of higher-margin battery solutions contributing to increased profitability. We do not expect significant fluctuations in gross margin, considering our selling prices are secured by the contract backlogs and current market conditions of major raw materials. Thus, we believe that the operating cash flow in the forecasted period will continue to be positive.

Previous wording

•Refinancing of short-term bank borrowings - Historically, we have rolled over or obtained replacement borrowings from existing creditors for short-term bank loans upon the maturity date of the loans if needed. For $37.5 million short-term bank borrowings outstanding as of March 31, 2025 which the Company has successful refinancing experience, if needed, we will be able to refinance them as they become due for the next twelve months. In April and early May 2025, we successfully refinanced loans of $1.4 million that matured.

Current wording

•Refinancing of short-term bank borrowings - Historically, we have rolled over or obtained replacement borrowings from existing creditors for short-term bank loans upon the maturity date of the loans if needed. Of the $83.2 million in short-term bank borrowings as of June 30, 2025, the Company has successfully refinanced $31.7 million and assumes that it will continue to be able to further refinance for the following next twelve months.

Previous wording

To enhance liquidity, we secured a $28.2 million bank loan in the first quarter of 2025, with an additional $1.4 million received in April and early May 2025. Further details can be found in Note 7- Bank Borrowings. Workforce reductions were made in the U.S. during the second and third quarters of 2024, delivering cost savings and enhanced cash flow.

Current wording

To enhance liquidity, we secured a $59.6 million bank loan in the first half year of 2025. Further details can be found in Note 7 - Bank Borrowings. Workforce reductions were made in the U.S. during the second and third quarters of 2024, delivering cost savings and improving the Company's cash position.

Previous wording

Further strategies to strengthen liquidity include optimizing operations, asset sales, and evaluating funding options. The Company achieved income and generated positive cash flow from operations in the first quarter of 2025, and continued execution of its business strategy is expected to support positive cash flow generation over the next twelve months. Additionally, the Group is actively pursuing the sale of non-core U.S. real estate assets, which is expected to enhance liquidity without affecting core operations.

Current wording

Further strategies to strengthen liquidity include optimizing operations, asset sales, and evaluating funding options. The Company achieved positive operating profit and operating cashflow in the first half of 2025, and continued execution of its business strategy is expected to support positive cash flow generation over the next twelve months.

Previous wording

As of March 31, 2025, we had bank borrowings of $127.5 million, the terms of which range from 0.5 to 21 months. The interest rates on our bank borrowings ranged from 2.90% to 4.85% per annum. As of March 31, 2025, we had convertible bonds outstanding of $41.7 million, with interest rates ranging from 3% to 4%. The convertible bonds are all due in 2027. As of March 31, 2025, we also had the Convertible Loan of $61.0 million outstanding at an initial interest rate equal to Term SOFR for the applicable interest period, plus an initial applicable margin of 9.75% per annum, 3.75% of which shall be paid in kind and added to the outstanding principal under the Convertible Loan, with the remaining interest to be paid in cash. See Note 14 - Convertible loan measured at fair value for details. As of March 31, 2025, we were in compliance with all material terms and covenants of our loan agreements, credit agreements and bonds.

Current wording

As of June 30, 2025, we had bank borrowings of $117.3 million, the terms of which range from 0.4 to 24 months. The interest rates on our bank borrowings ranged from 2.70% to 4.85% per annum. As of June 30, 2025, we had convertible bonds outstanding of $41.7 million, with interest rates ranging from 3% to 4%. The convertible bonds are all due in 2027. As of June 30, 2025, we also had the $26.0 million Convertible Loan outstanding at an initial interest rate equal to Term Secured Overnight Financing Rate ("SOFR") for the applicable interest period, plus an initial applicable margin of 9.75% per annum, 3.75% of which shall be paid in kind and added to the outstanding principal under the Convertible Loan, with the remaining interest to be paid in cash. See Note 14 - Convertible loan measured at fair value for details. As of June 30, 2025, we were in compliance with all material terms and covenants of our loan agreements, credit agreements and bonds.

Previous wording

On July 23, 2021, we received $708.4 million from the completion of the Business Combination, $705.1 million net of transaction costs paid by Microvast, Inc. We have used $482.0 million of the net proceeds from the Business Combination to expand our manufacturing facilities and for the purchase of property and equipment associated with our existing manufacturing and R&D facilities. In addition, $212.5 million of the net proceeds were used for working capital as of March 31, 2025.

Current wording

On July 23, 2021, we received $708.4 million from the completion of the Business Combination, $705.1 million net of transaction costs paid by Microvast, Inc. We have used $489.4 million of the net proceeds from the Business Combination to expand our manufacturing facilities and for the purchase of property and equipment associated with our existing manufacturing and R&D facilities. In addition, $206.1 million of the net proceeds were used for working capital as of June 30, 2025.

Previous wording

Our capital expenditures amounted to $6.6 million and $10.2 million for the three months ended March 31, 2025 and 2024, respectively. Our capital expenditures in 2025 and 2024 related primarily to the construction of manufacturing facilities under our Clarksville expansion and Huzhou, China.

Current wording

Our capital expenditures amounted to $7.4 million and $2.9 million for the three months ended June 30, 2025 and 2024, respectively. Our capital expenditures in 2025 and 2024 related primarily to the construction of manufacturing facilities in Clarksville, Tennessee and Huzhou, China.

Previous wording

In 2021, we started our capacity expansion plans in Huzhou, China, Berlin, Germany and Clarksville, Tennessee. The project in Germany was completed in 2021. The China Phase 3.1 capacity expansion was successfully completed in the third quarter of 2023.

Current wording

In 2021, we started our capacity expansion plans in Huzhou, China, Berlin, Germany and Clarksville, Tennessee. The project in Germany was completed in 2021. The China Phase 3.1 capacity expansion was successfully completed in the third quarter of 2023. To support our expanding product portfolio and growing customer demand, we initiated our Huzhou Phase 3.2 capacity expansion in the fourth quarter of 2024 with total anticipated production capacity of 2 GWh annually.

Previous wording

Because of delays in securing additional financing, in the fourth quarter of 2023 we began experiencing slow progress in continuing construction of our Clarksville expansion, slowing down certain construction work streams due to the need for additional financing. This facility was initially intended to produce 53.5Ah cells for our ESS solutions; however, we believe that LFP cells are better suited for our ESS solutions and intend to utilize the Tennessee facility to produce LFP cells instead of 53.5Ah cells. Additionally, our ESS products that were previously developed and assembled in Colorado are now planned to be assembled at our Tennessee facility once the facility is completed. The proceeds from the Business Combination alone were not sufficient to complete the Clarksville expansion and meet our general working capital needs and due to foreign restrictions and adverse tax consequences as well as the working capital needs of Microvast Power Systems Co. Ltd., we are unable to repatriate cash from China to pay our accounts payable in the U.S. and fund the continued expansion of our U.S. operations. We are seeking alternative sources of capital. Until financing is in place, this will limit our growth opportunities, especially in the U.S. market where our customers desire products that meet their domestic content requirements. We are seeking to secure financing to complete the Tennessee facility.

Current wording

Because of delays in securing additional financing, in the fourth quarter of 2023 we began experiencing slow progress in continuing construction of our Clarksville expansion, slowing down certain construction work streams due to the need for additional financing. This facility was initially intended to produce 53.5Ah cells for our ESS solutions; however, we believe that LFP cells are better suited for our ESS solutions and intend to utilize the Tennessee facility to produce LFP cells instead of 53.5Ah cells. Additionally, our ESS products that were previously developed and assembled in Colorado are now planned to be assembled at our Tennessee facility once the facility is completed. The proceeds from the Business Combination alone were not sufficient to complete the Clarksville expansion and meet our general working capital needs, and due to foreign restrictions and adverse tax consequences as well as the working capital needs of Microvast Power Systems Co. Ltd., we are unable to repatriate cash from China to meet obligations in the U.S. and fund the continued expansion of our U.S. operations. We are seeking alternative sources of capital. Until financing is in place, this will limit our growth opportunities, especially in the U.S. market where our customers desire products that meet their domestic content requirements. We are seeking to secure financing to complete the Tennessee facility.

Previous wording

We regularly enter into non-cancelable contractual obligations primarily related to purchases of inventory. As of March 31, 2025, such purchase commitments, which do not qualify for recognition on our unaudited condensed consolidated balance sheets, amount to $62.1 million, most of which is short-term.

Current wording

We regularly enter into non-cancelable contractual obligations primarily related to purchases of inventory. As of June 30, 2025, such purchase commitments, which do not qualify for recognition on our unaudited condensed consolidated balance sheets, amount to $49.8 million, most of which is short-term.

Previous wording

There have not been any other material changes during the three months ended March 31, 2025 to our contractual obligations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

There have not been any other material changes during the three and six months ended June 30, 2025 to our contractual obligations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

During the three months ended March 31, 2025, our operating activities generated $7.2 million in cash. This increase in cash consisted of (1) a net profit of $61.8 million and non-cash charges of $(27.7) million, of which $(43.2) million is due to change in the fair value of warrant and Convertible Loan, $8.0 million is depreciation of property, plant and equipment, $4.8 million is non-cash product warranty and $0.7 million is non-cash share-based compensation expense; and (2) a $26.9 million decrease in cash flows from operating assets and liabilities including $19.4 million cash outflow due to the net increase of accounts receivable and notes receivable, $12.7 million cash outflow from accounts payable and notes payable, $9.2 million cash outflow from accrued and other liabilities and prepaid expense and other current asset, $15.8 million cash inflow due to decrease in inventories, and $1.4 million cash outflow from other operating assets and liabilities.

Current wording

During the six months ended June 30, 2025, our operating activities generated $44.3 million in cash. This increase in cash consisted of (1) a net loss of $44.3 million and non-cash charges of $109.1 million, of which $78.4 million is due to change in the fair value of warrant and Convertible Loan, $16.1 million is depreciation of property, plant and equipment, and $8.5 million is non-cash product warranty; and (2) a $20.5 million decrease in cash flows from operating assets and liabilities including $14.5 million cash outflow due to the net increase of accounts receivable and notes receivable, $8.0 million cash outflow from accrued and other liabilities and prepaid expense and other current asset, $2.5 million cash outflow due to decrease of accounts payable and notes payable, $7.1 million cash inflow due to decrease in inventories, and $2.6 million cash outflow from other operating assets and liabilities.

Previous wording

Compared to the three months ended March 31, 2024, the three months ended March 31, 2025 net cash generated from operating activities benefited from more profitable operations, partially offset primarily by slower collections of accounts and notes Receivable.

Current wording

Compared to the six months ended June 30, 2024, the six months ended June 30, 2025 net cash generated from operating activities benefited from more profitable operations, partially offset primarily by slower collections of accounts and notes receivable.

Previous wording

During the three months ended March 31, 2025, cash used in investing activities totaled $2.3 million. This decrease cash outflow primarily consisted of capital expenditures related to the expansion of our manufacturing facilities and to the purchase of property and equipment associated with our existing manufacturing and R&D facilities.

Current wording

During the six months ended June 30, 2025, cash used in investing activities totaled $5.1 million. This cash outflow primarily consisted of capital expenditures related to the expansion of our manufacturing facilities and to the purchase of property and equipment associated with our existing manufacturing and R&D facilities.