Microvast Holdings, Inc.

Previous 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.

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 intelligent battery management systems. 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

One of our innovations is our high-energy nickel manganese cobalt (NMC) 53.5Ah battery cell, which offers an energy density of approximately 235 Wh/kg and supports over 6,000 full-depth (0–100% state of charge or “SOC”) charge/discharge cycles at a 1C rate (equivalent to a full cycle in approximately 1 hour) while maintaining over 80% state of health (“SOH”). These characteristics make it well suited for long-range commercial vehicle and utility-scale ESS applications. To bring this product to market, we have made substantial investments in fully automated production capacity in Huzhou, China, improving manufacturing throughput and operational efficiency.

Current wording

One of our innovations is our high-energy nickel manganese cobalt (NMC) 53.5Ah battery cell, which offers an energy density of approximately 235 Wh/kg and supports over 6,000 cycles at a 1C rate while maintaining over 80% state of health (“SOH”). These characteristics make it well suited for long-range commercial vehicle and utility-scale ESS applications. To bring this product to market, we have made substantial investments in fully automated production capacity in Huzhou, China, improving manufacturing throughput and operational efficiency.

Previous wording

Building on this platform, we have developed a portfolio of NMC cells optimized for distinct operating needs. Our 48Ah cell is engineered for high-power, fast-charging use cases, capable of sustaining a 3C continuous charge and discharge (equivalent to a full cycle in approximately 20 minutes) while delivering more than 8,000 cycles with a SOH above 80%. This makes it a preferred solution for mission-critical applications such as buses or logistics fleets requiring rapid turnaround.

Current wording

Building on this platform, we have developed a portfolio of NMC cells optimized for distinct operating needs. Our 48Ah cell is engineered for high-power, fast-charging use cases, capable of sustaining a 3C continuous charge and discharge while delivering more than 8,000 cycles with a SOH above 80%. This makes it a preferred solution for mission-critical applications such as buses or logistics fleets requiring rapid turnaround.

Previous wording

The 55Ah cell strikes a balance between energy and power density, offering an energy density near 250 Wh/kg and supporting 3C operation of over 6,000 cycles with an SOH above 80% under full SOC cycling. Its dual-optimized profile enables deployment across a variety of demanding commercial and specialty vehicle platforms.

Current wording

The 55Ah cell strikes a balance between energy and power density, offering an energy density of approximately 250 Wh/kg and supporting 3C operation of over 6,000 cycles with a SOH above 80%. Its dual-optimized profile enables deployment across a variety of demanding commercial and specialty vehicle platforms.

Previous wording

For applications where extended range and high energy density are paramount, we have introduced a 120Ah cell with energy density of approximately 270 Wh/kg. Under 1C charge/discharge conditions, the 120Ah cell maintains more than 5,000 full-depth charge/discharge cycles with SOH retention above 80%. With the integration of the high-voltage control box and thermal management systems, including pump and coolant, the complete power solution achieves a system-level energy density of approximately 200 Wh/kg. It is ideal for heavy-duty vehicles operating in long-haul scenarios where volumetric and gravimetric energy constraints are critical.

Current wording

For applications where extended range and high energy density are paramount, we have introduced a 120Ah cell with energy density of approximately 270 Wh/kg. Under 1C charge/discharge conditions, the 120Ah cell maintains more than 5,000 cycles with SOH above 80%. With the integration of the high-voltage control box and thermal management systems, including pump and coolant, the complete power solution achieves a system-level energy density of approximately 200 Wh/kg. It is ideal for heavy-duty vehicles operating in long-haul scenarios where volumetric and gravimetric energy constraints are critical.

Previous 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.

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 our former Colorado facility, which was sold in the quarter ended September 30, 2024, to Clarksville to enhance operational efficiencies for our U.S. business.

Previous 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.

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, compact energy storage, and enhanced reliability through IP55, C4, and nitrogen protection features.

Previous 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.

Current wording

For the three months ended September 30, 2025, our revenue increased by $21.9 million, reaching $123.3 million, a 21.6% year-over-year increase. Additionally, our order backlog stood at $237.7 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 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.

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 nine months period ended September 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 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.

Current wording

Our growth depends on being able to meet anticipated demand for our products. As of September 30, 2025, we had a backlog of approximately $237.7 million for our electric vehicle battery systems, equivalent to approximately 1,045.5 MWh. To increase our manufacturing output, address our backlog and capture growing market opportunities, we have made significant investment in capacity expansions in both our Huzhou, China facility with further investment planned in our Clarksville, Tennessee facility, contingent on receipt of sufficient funding.

Previous wording

In the third quarter of 2023, we successfully completed a 2 GWh cell, module, and pack production line for our 53.5Ah cell technology at our Huzhou, China facility. This Phase 3.1 line has been operating safely and efficiently, providing a stable manufacturing base for revenue generation in our commercial vehicle segment. In addition to the 53.5Ah cell, this line also supports the production of our 48Ah high-power cells and is scheduled to begin pilot production of 55Ah cells by the end of 2025.

Current wording

In the third quarter of 2023, we successfully completed a 2 GWh cell, module, and pack production line (Phase 3.1) for our 53.5Ah cell technology at our Huzhou, China facility. This Phase 3.1 line has been operating safely and efficiently, providing a stable manufacturing base for revenue generation in our commercial vehicle segment. In addition to the 53.5Ah cell, this line also supports the production of our 48Ah high-power cells and is scheduled to begin pilot production of 55Ah cells by the end of 2025.

Previous wording

To support our expanding product portfolio, we are building a second 2 GWh production line at our Huzhou, China facility. While this new line is primarily configured for the manufacturing of our next-generation 120Ah high-energy cells, it has been designed with flexible tooling and process architecture to accommodate multiple cell formats, including the 53.5Ah, 48Ah, and 55Ah variants. Installation completion is expected by year-end, with commissioning and pilot production to follow. This investment enhances our agile manufacturing capability and reinforces our commitment to delivering high-performance solutions across diverse application scenarios.

Current wording

To support our expanding product portfolio, we are building a second 2 GWh production line (Phase 3.2) at our Huzhou, China facility. While this new Phase 3.2 line is primarily configured for the manufacturing of our next-generation 120Ah high-energy cells, it has been designed with flexible tooling and process architecture to accommodate multiple cell formats, including the 53.5Ah, 48Ah, and 55Ah variants. The clean rooms and utility equipment installation have been completed for Phase 3.2. Production equipment installation completion is expected by year-end, with commissioning and pilot production to follow. This investment enhances our agile manufacturing capability and reinforces our commitment to delivering high-performance solutions across diverse application scenarios.

Previous 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.

Current wording

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

Previous wording

Cost of revenues includes direct and indirect materials, manufacturing overhead (including depreciation, freight and logistics), warranty reserves and expenses, write-down of obsolete inventories, and labor costs and related personnel expenses, including stock-based compensation and other related expenses that are directly attributable to the manufacturing of products.

Current wording

Cost of revenues includes direct and indirect materials, manufacturing overhead (including depreciation, freight and logistics), warranty reserves and expenses, write-down of obsolete inventories, and labor costs and related personnel expenses, including share-based compensation and other related expenses that are directly attributable to the manufacturing of products.

Previous 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.

Current wording

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

Previous 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.

Current wording

R&D expenses primarily include salaries and share-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

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.

Current wording

S&M expenses include personnel-related costs for our sales and marketing teams, including salaries, share-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

We are subject to income taxes in the U.S. and foreign jurisdictions in which we do business, namely China, Germany and the UK. These foreign jurisdictions have statutory tax rates different from those in the U.S. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws. We regularly assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S. Internal Revenue Service and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense may become necessary. Any such adjustments could have a significant impact on our results of operations.

Current wording

We are subject to income taxes in the U.S. and foreign jurisdictions in which we do business, namely China, Germany, the UK, and other European countries. These foreign jurisdictions have statutory tax rates different from those in the U.S. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws. We regularly assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S. Internal Revenue Service and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense may become necessary. Any such adjustments could have a significant impact on our results of operations.

Previous 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.

Current wording

Our revenues for the three months ended September 30, 2025 increased by $21.9 million, or 21.6%, compared to the same period in 2024. The increase was primarily driven by a 15.6% increase in sales volume from approximately 434.0 MWh for the three months ended September 30, 2024 to approximately 501.7 MWh for the same period in 2025.

Previous 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.

Current wording

Our cost of revenues for the three months ended September 30, 2025 increased by $9.1 million, or 13.4%, 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 $0.7 million of decreased share-based compensation expenses.

Previous wording

Our gross profit for the three months ended June 30, 2025 increased to 34.7% from 32.5% in the same period in 2024. This improvement was driven by higher production utilization, which enhanced fixed costs absorption, as well as favorable product mix, highlighted by a growing share of higher-margin battery solutions. These factors contributed to the expansion in gross profit.

Current wording

Our gross profit for the three months ended September 30, 2025 increased to 37.6% of revenue from 33.2% of revenue in the same period in 2024. This improvement was driven by higher production utilization, which enhanced fixed costs absorption, as well as favorable product mix, highlighted by a growing share of higher-margin battery solutions. These factors contributed to the expansion in gross profit.

Previous wording

Research and development expenses for the six months ended June 30, 2025 decreased $5.6 million, or 26.1%, compared to the same period in 2024. The decrease in research and development expenses was primarily due to $4.0 million of decreased share-based compensation expenses and the reduction of personnel costs associated with lower employee headcount.

Current wording

Research and development expenses for the three months ended September 30, 2025 decreased $2.9 million or 27.5% compared to the same period in 2024. The decrease in R&D expenses was primarily due to $1.5 million of decreased share-based compensation expenses and a $1.0 million reduction of personnel costs associated with lower employee headcount.

Previous 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.

Current wording

For the three months ended September 30, 2025, we recorded a loss of $12.6 million mainly due to the change in fair value of the Convertible Loan of $12.8 million, for details please see Note 14 – Convertible Loan measured at fair value.

Previous wording

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Current wording

Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

Previous wording

Our revenues for the six months ended June 30, 2025 increased by $42.8 million, or 25.9%, compared to the same period in 2024. This increase was primarily driven by an increase in sales volume, from approximately 654.9 MWh for the six months ended June 30, 2024 to approximately 947.2 MWh for the same period in 2025.

Current wording

Our revenues for the nine months ended September 30, 2025 increased by $64.7 million, or 24.3%, compared to the same period in 2024. This increase was primarily driven by an increase in sales volume, from approximately 1,088.9 MWh for the nine months ended September 30, 2024 to approximately 1,448.9 MWh for the same period in 2025.

Previous wording

Our cost of revenues for the six months ended June 30, 2025 increased by $12.5 million, or 10.4%, 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 $2.5 million of decreased share-based compensation expenses.

Current wording

Our cost of revenues for the nine months ended September 30, 2025 increased by $21.6 million, or 11.5%, 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 $3.2 million of decreased share-based compensation expenses.

Previous 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.

Current wording

Our gross profit for the nine months ended September 30, 2024 increased to 36.6% of revenue from 29.3% of revenue 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

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.

Current wording

Research and development expenses for the nine months ended September 30, 2025 decreased $8.6 million, or 26.5%, compared to the same period in 2024. The decrease in R&D expenses was primarily due to $5.4 million of decreased share-based compensation expenses and a $1.9 million reduction of personnel costs associated with lower employee headcount.

Previous wording

Selling and marketing expenses for the six months ended June 30, 2025 were stable compared to the same period in 2024.

Current wording

Selling and marketing expenses for the nine months ended September 30, 2025 were stable compared to the same period in 2024.

Previous wording

The impairment loss of long-lived assets for the three months ended June 30, 2025 decreased $86.7 million or 98.5% compared to the same period in 2024. The decrease was driven by the Company's decision in the first half of 2024 to pause the construction of the manufacturing facility in Clarksville, Tennessee until additional funding for the remaining capital expenditure is secured. During that time, the Company reassessed the recoverability of the long-lived assets in U.S. and recognized an $88.0 million impairment loss.

Current wording

The impairment loss of long-lived assets for the nine months ended September 30, 2025 decreased $86.6 million, or 98.4%, compared to the same period in 2024. The decrease was primarily due to the impairment incurred in second quarter of 2024 related to the Company pausing the construction of the manufacturing facility in Clarksville, Tennessee until additional funding for the remaining capital expenditure is secured.

Previous wording

For the six months period ended June 30, 2025, we recorded a loss of $78.4 million mainly due to the change in fair value of the Convertible Loan of $78.2 million, for details please see Note 14 – Convertible Loan measured at fair value.

Current wording

For the nine months period ended September 30, 2025, we recorded a loss of $91.0 million mainly due to the change in fair value of the Convertible Loan, for details please see Note 14 – Convertible Loan measured at fair value.

Previous 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.

Current wording

As of September 30, 2025, our principal sources of liquidity were our cash and cash equivalents and restricted cash in the amount of $142.6 million.

Previous 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.

Current wording

The consolidated net cash position as of September 30, 2025 included cash and cash equivalents of $59.0 million and $22.0 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

In accordance with Accounting Standards Update ("ASU") No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40),” management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date of the consolidated financial statements are issued and has determined that our ability to continue as a going concern is dependent on our ability to generate cash from future operations and additional capital. In light of operating requirements under our current business plan, we are projecting that the existing cash and assets available for sale and equity securities will not be sufficient to fund our operations through the next twelve months. These conditions and events raise substantial doubt about the our ability to continue as a going concern.

Current wording

In accordance with Accounting Standards Update ("ASU") No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40),” management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date of the consolidated financial statements are issued. Considering operating requirements under our current business plan, we are projecting that the existing cash and assets available for sale and equity securities will not be sufficient to fund our operations through the next twelve months. These conditions and events raise substantial doubt about our ability to continue as a going concern.

Previous wording

To alleviate the conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern, management developed primary plans as described below.

Current wording

To alleviate the conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern, management has adopted a plan to mitigate this risk, including implementation of a Controlled Equity Offering, as described in Note 18 - Subsequent Events to the consolidated financial statements. The primary plans are as described below.

Previous 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.

Current wording

•Forecasted cash inflow from operations - For the nine months ended September 30, 2025, the Group generated $48.1 million of profit from operations and $59.5 million of net cash from operating activities. We have an order backlog of $237.7 million with the majority of these orders expected to be fulfilled in 2025 and 2026. 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. 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.

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 $84.4 million in short-term bank borrowings as of September 30, 2025, we have successfully refinanced $23.5 million and assumes that it will continue to be able to further refinance for the following next twelve months.

Previous wording

Based on the above, we concluded that it is probable that these plans will alleviate substantial doubt about the Group’s ability to continue as a going concern and that adequate sources of liquidity will exist to fund the working capital and capital expenditures requirements and to meet our short term debt obligations, and other liabilities and commitments as they become due.

Current wording

Based on the above, we concluded that it is probable that these plans, when fully implemented, will alleviate substantial doubt about the Group’s ability to continue as a going concern and that adequate sources of liquidity will exist to fund the working capital and capital expenditures requirements and to meet our short term debt obligations, and other liabilities and commitments as they become due.

Previous 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.

Current wording

To enhance liquidity, we secured a $70.1 million bank loan during the nine months ended September 30, 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 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.

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 during the nine months ended September 30, 2025, and continued execution of its business strategy is expected to support positive cash flow generation over the next twelve months.