CENN 10-Q Quarterly Report Sept. 30, 2025 | Alphaminr
CENNTRO ELECTRIC GROUP Ltd
ALPHAMINR

CENN 10-Q Quarter ended Sept. 30, 2025

Balance Sheet
Cash Flow
Income Statement
Debt
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2025

OR

☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to _______.

Commission file number: 001-38544

CENNTRO INC.
(Exact name of registrant as specified in its charter)

Nevada

93-2211556
(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification Number)

33 Wood Avenue South , Suite 600, PMB #3572

Iselin , New Jersey 08830

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code ( 732 ) 820-6757

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:
Trading Symbol(s)
Name of each exchange on which
registered:
Common Stock, $0.0001 par value per share
CENN
The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒

Emerging growth company
☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

The registrant had 87,912,831 of the registrant’s common stock per value $0.0001 per share, issued and outstanding as of November 12, 2025.

TABLE OF CONTENTS

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Forward-Looking Statements

This Quarterly Report of Cenntro Inc. (“we,” “us,” “our,” “Cenntro” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future; projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of machinery to equip a new production facility; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; plans relating to our electric vehicles (“EVs”); and plans and intentions to regain compliance with the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), including, among other things, through a reverse stock split.

We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:

●
general economic and business conditions, including changes in interest rates;
●
prices of other EVs, costs associated with manufacturing EVs and other economic conditions;
●
the effect of an outbreak of disease or similar public health threat, or natural phenomena on the Company’s business;
●
the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;
●
breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers;
●
the ability of our information technology systems or information security systems to operate effectively;
●
actions by government authorities, including changes in government regulation and ongoing and anticipated changes in the United States political environment, including those resulting from the current presidential administration, and its control of Congress;
●
the implementation of changes to the existing tariff regime by the current presidential administration and measures taken in response to such tariffs by foreign governments;
●
risks associated with obtaining orders and executing upon such orders or the unavailability, reduction, elimination and adverse application of government subsidies and incentives or any challenge to or failure by the federal government, states or other governmental entities to adopt or enforce regulations such as the California Air Resource Board’s Advanced Clean Fleet regulation;
●
changes in attitude toward environmental, social, and governance matters among regulators, investors, and parties with which we do business
●
uncertainties associated with legal proceedings;
●
changes in the size of the EV market;
●
future decisions by management in response to changing conditions;
●
the Company’s ability to execute prospective business plans;
●
misjudgments in the course of preparing forward-looking statements;
●
the Company’s ability to raise sufficient funds to carry out its proposed business plan;

●
inability to keep up with advances in EV and battery technology;
●
inability to design, develop, market and sell new EVs and services that address additional market opportunities to generate revenue and positive cash flows;
●
dependency on certain key personnel and any inability to retain and attract qualified personnel;
●
inexperience in mass-producing EVs;
●
inability to succeed in establishing, maintaining and strengthening the Cenntro brand;
●
disruption of supply or shortage of raw materials and supply chain disruptions, including constraints on steel, semiconductors and other material inputs and resulting cost increases impacting our Company;
●
our ability to receive sufficient proceeds from our current and any future financing arrangements to meet our immediate liquidity needs and the potential costs, dilution and restrictions resulting from any such financing; our ability to maintain compliance with the listing requirements of the Nasdaq and the impact of any steps we have taken, including reverse splits of our common stock, on our operations, stock price and future access to funds
●
the unavailability, reduction or elimination of government and economic incentives;
●
failure to manage future growth effectively; and
●
the other risks and uncertainties detailed from time to time in our filings with the United States Securities and Exchange Commission (“SEC”), including but not limited to those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 1, 2025 (the “Form 10-K”).

Forward-looking statements speak only as of the date hereof. Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.

INDEX

Page
1
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2
3
4
5

PART I

ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CENNTRO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Expressed in U.S. dollars, except for number of shares and per share data)

For the Three Months Ended September 30,
For the Nine Months Ended September 30,
Note
2025
2024
2025
2024
Net revenues
2(d)

$
4,570,218
$
16,230,299
$
13,120,194
$
25,888,046
Cost of goods sold
( 4,466,900
)
( 9,932,846
)
( 12,714,253
)
( 17,843,769
)
Gross profit
103,318
6,297,453
405,941
8,044,277


OPERATING EXPENSES:


Selling and marketing expenses
( 811,999
)
( 4,361,736
)
( 1,816,296
)
( 5,575,705
)
General and administrative expenses
( 4,091,359
)
( 7,092,014
)
( 14,193,281
)
( 20,078,895
)
Research and development expenses
( 518,852
)
( 1,401,991
)
( 1,951,891
)
( 3,942,865
)
Provision for credit losses
( 1,554,841
)
-
( 3,590,184
)
-
Total operating expenses
( 6,977,051
)
( 12,855,741
)
( 21,551,652
)
( 29,597,465
)


Loss from operations
( 6,873,733
)
( 6,558,288
)
( 21,145,711
)
( 21,553,188
)


OTHER INCOME (EXPENSE):



Interest expense, net
( 112,706
)
( 34,198
)
( 387,790
)
( 58,744
)
Loss from long-term investments
( 26
)
( 94
)
( 62
)
( 30,282
)
Change in fair value of convertible promissory notes and derivative liability
421,038
( 6,725
)
283,748
1,807
Loss from Note Amendment
-
-
( 1,756,137
)
-
Loss from early termination of lease contract
( 538,317
)
-
( 537,179
)
-
Change in fair value of equity securities
262,416
262,417
778,693
756,868
Foreign currency exchange gain, net
242,904
1,670,234
1,214,236
1,042,064
Loss from acquisition of Hezhe
-
-
-
( 149,872
)
Gain from disposal of Cenntro Electric CICS, SRL’s equity
-
-
1,157,556
-
Gain (loss) from cross-currency swaps
4,401
( 705
)
( 5,294
)
882
Gain on exercise of warrants
-
910
-
910
Other income (expense), net
200,566
( 647,434
)
425,780
( 799,888
)
Net loss from continuing operations before taxes
( 6,393,457
)
( 5,313,883
)
( 19,972,160
)
( 20,789,443
)
Income tax benefit
12,969
12,334
40,009
29,082
Net loss from continuing operations
( 6,380,488
)
( 5,301,549
)
( 19,932,151
)
( 20,760,361
)


Discontinued operations:


Loss from discontinued operations, net of tax
( 334,600
)
( 3,680,038
)
( 2,343,802
)
( 6,645,244
)

Net loss
( 6,715,088
)
( 8,981,587
)
( 22,275,953
)
( 27,405,605
)
Less: net loss attributable to non-controlling interests
( 8,797
)
( 9,815
)
( 25,989
)
( 20,855
)
Net loss attributable to the Company’s shareholders
$
( 6,706,291
)
$
( 8,971,772
)
$
( 22,249,964
)
$
( 27,384,750
)


OTHER COMPREHENSIVE INCOME (LOSS)


Foreign currency translation adjustment
( 51,102
)
916,164
1,437,788
( 461,126
)
Unrealized holding gains for available-for-sale securities
7,500
-
22,500
-
Total comprehensive loss
( 6,758,690
)
( 8,065,423
)
( 20,815,665
)
( 27,866,731
)


Less: total comprehensive loss attributable to non-controlling interests
( 8,207
)
( 5,226
)
( 23,731
)
( 13,070
)
Total comprehensive loss attributable to the Company’s shareholders
$
( 6,750,483
)
$
( 8,060,197
)
$
( 20,791,934
)
$
( 27,853,661
)
Weighted average number of shares outstanding, basic and diluted
51,217,179
30,841,106
39,568,669
30,832,928


Loss per common share


Continuing operations - basic and diluted
( 0.12
)
( 0.17
)
( 0.50
)
( 0.67
)
Discontinued operations - basic and diluted
( 0.02
)
( 0.12
)
( 0.06
)
( 0.22
)
Net loss per common share - basic and diluted
( 0.14
)
( 0.29
)
( 0.56
)
( 0.89
)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1
CENNTRO INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars, except for number of shares)

Note
September 30,
2025
December 31,
2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
4,438,499
$
12,547,168
Restricted cash, current
96,563
273,291
Short-term investment
1,022
5,505
Accounts receivable, net
3
1,598,288
3,281,865
Inventories, net
4
24,290,180
24,012,504
Prepayment and other current assets, net
5
17,056,889
18,075,415
Amounts due from a related party - current
19
12,026
11,729
Assets held for sale, current
1(d)

4,793,741
7,708,969
Total current assets
52,287,208
65,916,446
Non-current assets:
Long-term time deposit
-
700,000
Long-term investments
6
3,785,501
3,710,663
Investment in equity security
7
27,383,012
26,604,319
Property, plant and equipment, net
8
16,731,523
17,401,006
Intangible assets, net
9
6,162,330
6,225,302
Right-of-use assets, net
14
5,254,900
9,948,831
Other non-current assets, net
1,105,265
2,059,747
Total non-current assets
60,422,531
66,649,868
Total Assets
$
112,709,739
$
132,566,314
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities:
Accounts payable
10
$
3,717,431
$
5,135,710
Short-term loans and current portion of long-term loans
12
906,026
249,614
Accrued expenses and other current liabilities
11
5,221,917
3,647,503
Contractual liabilities
2(d)
3,699,047
4,121,305
Operating lease liabilities, current
14
3,240,088
3,426,067
Convertible promissory notes
15
7,466,000
9,952,000
Deferred government grant, current
108,426
100,060
Amounts due to a related party
19
873,575
26,226
Liabilities held for sale, current
1(d)

2,121,321
2,455,539
Total current liabilities
27,353,831
29,114,024
Non-current liabilities:
Long-term loans
12
-
362,386
Deferred tax liabilities
13
155,191
171,558
Deferred government grant, non-current
1,734,810
1,776,957
Derivative liability - investor warrant
15
-
12,137,087
Derivative liability - placement agent warrant
15
3,456,913
3,455,829
Operating lease liabilities, non-current
14
3,866,042
7,588,971
Total non-current liabilities
9,212,956
25,492,788
Total Liabilities
$
36,566,787
$
54,606,812
Commitments and contingencies
18
EQUITY
Common stock ( No par value; 51,912,831 and 30,866,614 shares issued and outstanding as of September 30, 2025 and December 31, 2024)
-
-
Additional paid in capital
424,686,055
405,757,103
Accumulated deficit
( 341,140,278
)
( 318,890,314
)
Accumulated other comprehensive loss
( 7,513,347
)
( 9,029,499
)
Total equity attributable to shareholders
76,032,430
77,837,290
Non-controlling interests
110,522
122,212
Total Equity
$
76,142,952
$
77,959,502
Total Liabilities and Equity
$
112,709,739
$
132,566,314

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2
CENNTRO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in U.S. dollars, except for number of shares)


Common stock
Additional
paid in
capital
Accumulated
deficit
Accumulated
other
comprehensive
loss
Total
shareholders’
equity
Non-
controlling
interest
Total
equity
Shares
Amount
Balance as of December 31, 2023
30,828,778
$
-
$
402,337,393
$
( 274,023,501
)
$
( 6,444,485
)
$
121,869,407
$
( 4,240
)
$
121,865,167
Share-based compensation
-
-
2,643,214
-
-
2,643,214
-
2,643,214
Net loss
-
-
-
( 27,384,750
)
-
( 27,384,750
)
( 20,855
)
( 27,405,605
)
Acquisition of 60 % of Hezhe’s equity interests
-
-
-
-
-
-
169,206
169,206
Fractional shares issued due to reverse stock split
17
-
-
-
-
-
-
-
Exercise of warrants
37,819
-
49,076
-
-
49,076
-
49,076
Foreign currency translation adjustment
-
-
-
-
( 468,911
)
( 468,911
)
7,785
( 461,126
)
Balance as of September 30, 2024 (unaudited)
30,866,614
$
-
$
405,029,683
$
( 301,408,251
)
$
( 6,913,396
)
$
96,708,036
$
151,896
$
96,859,932


Common stock
Additional
paid in
capital
Accumulated
deficit
Accumulated
other
comprehensive
loss
Total
shareholders’
equity
Non-
controlling
interest
Total equity
Shares
Amount
Balance as of December 31, 2024
30,866,614
$
-
$
405,757,103
$
( 318,890,314
)
$
( 9,029,499
)
$
77,837,290
$
122,212
$
77,959,502
Share-based compensation
-
-
2,147,262
-
-
2,147,262
-
2,147,262
Conversion of convertible bonds into shares
6,390,850
-
4,293,852
-
-
4,293,852
-
4,293,852
Cashless exercise of warrant
14,655,367
-
12,487,838
-
-
12,487,838
-
12,487,838
Net loss
-
-
-
( 22,249,964
)
-
( 22,249,964
)
( 25,989
)
( 22,275,953
)
Unrealized holding gains for available-for-sale securities
-
-
-
-
22,500
22,500
-
22,500
Disposal of a subsidiary
-
-
-
-
58,122
58,122
12,041
70,163
Foreign currency translation adjustment
-
-
-
-
1,435,530
1,435,530
2,258
1,437,788
Balance as of September 30, 2025 (unaudited)
51,912,831
$
-
$
424,686,055
$
( 341,140,278
)
$
( 7,513,347
)
$
76,032,430
$
110,522
$
76,142,952

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3
CENNTRO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)


For the Nine Months Ended September 30,

2025
2024

(Unaudited)
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities
$
( 10,781,365
)
$
( 12,912,011
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment
( 737,481
)
( 720,445
)
Net of cash acquired of 60 % of Hezhe’s equity interests
-
( 355,400
)
Purchase of short-term investment
-
( 4,167,970
)
Proceeds from short-term investment
-
8,431,348
Net of cash decrease of disposal of Cenntro Electric CICS, SRL
( 10,723
)
-
Cash dividend from long-term investment
-
55,573
Proceeds from disposal of property, plant and equipment
165,565
41,495
Proceeds from interest and redemption of equity securities
-
1,573,441
Loans provided to a related party
( 27,701
)
-
Repayment of loans from a related party
27,701
-
Net cash (used in) provided by investing activities
( 582,639
)
4,858,042
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank loans
1,664,938
662,836
Repayments to bank loans
( 806,990
)
( 38,600
)
Loans proceed from third parties
1,416,238
708,832
Repayment of loans to third parties
( 376,793
)
( 90,000
)
Loans proceed from a related party
1,000,000
-
Repayment of loans to a related party
( 160,000
)
-
Net cash provided by financing activities
2,737,393
1,243,068
Effect of exchange rate changes on cash, cash equivalents and restricted cash
205,487
70,752
Net decrease in cash, cash equivalents and restricted cash
( 8,421,124
)
( 6,740,149
)
Cash, cash equivalents and restricted cash at beginning of period
12,960,488
29,571,897
Cash, cash equivalents and restricted cash at end of period
$
4,539,364
$
22,831,748
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents
4,438,499
22,358,115
Restricted cash
96,563
309,263
Cash, cash equivalents and restricted cash at end of period, held for sale
4,302
164,370
Total cash, cash equivalents and restricted cash shown in the statement of cashflow
4,539,364
22,831,748
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid
$
14,932
$
553,654
Income tax paid
$
-
$
-
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANCACTION:
Conversion of convertible bonds into shares
$
4,293,852
$
-
Cashless exercise for warrants
$
12,487,838
$
49,076

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

(a)
Historical 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, Australia, 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.  CMC conducted business to design and develop electric utility vehicles.
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. For information of the Share Purchase Agreements, see Note 3 of the Company 2023 Form 10-K, “Business Combination”.
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. For information of the Share Purchase Agreements, see Note 3 of the Company 2023 Form 10-K, “Business Combination”.
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. For information of the equity investing agreement, see Note 3 of the Company 2024 Form 10-K, “Business Combination”.

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.

(b)
Reverse recapitalization

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.

(c)
Redomiciliation of CEGL

On February 27, 2024, CEGL completed the redomiciliation of CEGL in accordance with the scheme implementation agreement, between CEGL and Cenntro (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 as a result of CEGL becoming a subsidiary of the Company.

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 of one share of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) for every one ordinary shares of CEGL.

5
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

(d)
Discontinued Operations - CEGE, CAE and Cenntro EV Center Italy S.R.L

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, Automotive Europe GmbH (“CAE”), and Cenntro EV Center Italy S.R. (“the disposal group”) were scheduled for structured dissolution.

Accordingly, the unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements reflect the results the disposal group as a discontinued operation for the periods presented in accordance with ASC 210-05, Discontinued Operations represented the disposal group a strategic shift that had a major effect on the Company’s operations and financial results. Further, the related current and non-current assets and liabilities associated with the disposal group are reflected as held for sale in the unaudited condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. The numbers in all of the relevant footnote disclosures are also adjusted for the current year and comparative periods. No loss was recognized on the initial measurement of the disposal group as held for sale.

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

September 30,
December 31,

2025
2024

(Unaudited)
Cash and cash equivalents
$
4,302
$
140,029
Accounts receivable, net
1,276,020
1,406,457
Inventories
2,303,551
4,983,432
Prepayment and other current assets, net
1,209,868
1,035,486
Long-term investment
-
89,533
Other non-current assets
-
54,032
Total assets classified as held for sale
$
4,793,741
$
7,708,969
Accounts payable
$
1,459,110
$
1,534,467
Accrued expenses and other current liabilities
577,577
809,773
Contractual liabilities
84,634
80,696
Operating lease liabilities, current
-
30,603
Total liabilities classified as held for sale
$
2,121,321
$
2,455,539

The key components of loss from discontinued operations for the nine months ended September 30, 2025 and 2024 were as follows:

For the Nine Months ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Net revenues
$
390,612
$
2,555,785
Cost of goods sold
( 1,110,616
)
( 5,317,974
)
Gross loss
( 720,004
)
( 2,762,189
)





Selling and marketing expenses
( 205,709
)
( 2,075,600
)
General and administrative expenses
( 467,634
)
( 1,866,996
)
Research and development expenses
-
( 349,288
)
Provision for credit losses
( 472,939
)
-
Total operating expenses
( 1,146,282
)
( 4,291,884
)


Loss from discontinued operations
( 1,866,286
)
( 7,054,073
)


(Loss) income from long-term investments
( 96,839
)
2,020
Foreign currency exchange (loss) gain, net
( 66,549
)
66,762
Other (loss) income, net
( 314,128
)
321,980
Loss from discontinued operations before taxes
( 2,343,802
)
( 6,663,311
)
Income tax benefit
-
18,067
Loss from discontinued operations, net of tax
$
( 2,343,802
)
$
( 6,645,244
)

6
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

As of September 30, 2025, Cenntro Inc.’s subsidiaries were as follows:
Name
Date of
Incorporation
Place of
Incorporation
Percentage of direct or
indirect economic
interest
Cenntro Electric Group Pty Limited (“CEGL”)
May 11, 2017
Australia
100 % owned by Cenntro Inc.
Cenntro Automotive Corporation (“CAC”)
March 22, 2013
Delaware, U.S.
100 % owned by Cenntro Inc.
Cenntro Electric Group, Inc. (“CEGI”)
March 9, 2020
Delaware, U.S.
100 % owned by Cenntro Inc.
Cennatic Power, Inc. (“Cennatic Power”)
June 8, 2022
Delaware, U.S.
100 % owned by Cenntro Inc.
Cenntro Electric Group (Europe) GmbH (3)
January 13, 2022
Frankfurt, Germany
100 % owned by Cenntro Inc.
Bison Motors Inc. (formerly known as “Teemak Power Corporation”) (1)
January 31, 2023
Delaware, U.S.
100 % owned by Cenntro Inc.
Avantier Motors Corporation
November 17, 2017
Delaware, U.S.
100 % owned by Cenntro Inc.
Cennatic Energy S. de R.L. de C.V.
August 24, 2022
Monterrey, Mexico
100 % owned by Cenntro Inc.
Cenntro Automotive S.A.S.
January 16, 2023
Galapa, Colombia
100 % owned by Cenntro Inc.
Cenntro Electric Colombia S.A.S.
March 29, 2023
Atlántico, Colombia
100 % owned by Cenntro Inc.
Cenntro Automotive Group Limited (“CAG HK”)
February 15, 2016
Hong Kong
100 % owned by Cenntro Inc.
Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”)
June 5, 2017
PRC
100 % owned by Cenntro Inc.
Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”)
May 6, 2016
PRC
100 % owned by Cenntro Inc.
Zhejiang Cenntro Machinery Co., Limited
January 20, 2021
PRC
100 % owned by Cenntro Inc.
Jiangsu Tooniu Tech Co., Limited
December 19, 2018
PRC
100 % owned by Cenntro Inc.
Hangzhou Hengzhong Tech Co., Limited
December 16, 2014
PRC
100 % owned by Cenntro Inc.
Teemak Power (Hong Kong) Limited (HK)
May 17, 2023
Hong Kong
100 % owned by Cenntro Inc.
Avantier Motors (Hong Kong) Limited
March 13, 2023
Hong Kong
100 % owned by Cenntro Inc.
Cenntro Automotive Europe GmbH (“CAE”) (3)
May 21, 2019
Herne, Germany
100 % owned by Cenntro Inc.
Cenntro Electric B.V.
December 12, 2022
Amsterdam, Netherlands
100 % owned by Cenntro Inc.
Cenntro Elektromobilite Araçlar A.Ş
February 21, 2023
Turkey
100 % owned by Cenntro Inc.
Cenntro Elecautomotiv, S.L.
July 5, 2022
Barcelona, Spain
100 % owned by Cenntro Inc.
Simachinery Equipment Limited (“Simachinery HK”)
June 2, 2011
Hong Kong
100 % owned by Cenntro Inc.
Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”) (2)
June 16, 2011
PRC
100 % owned by Cenntro Inc.
Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”) (2)
July 12, 2012
PRC
100 % owned by Cenntro Inc.
Cenntro EV Center Italy S.R.L. (3)
May 8, 2023
Italy
100 % owned by Cenntro Inc.
Antric GmbH
August 21, 2020
Herne, Germany
100 % owned by Cenntro Inc.
Pikka Electric Corporation
August 3, 2023
Delaware, U.S.
100 % owned by Cenntro Inc.
Centro Technology Corporation
August 24, 2023
California, U.S.
100 % owned by Cenntro Inc.
Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”)
July 1, 2021
PRC
80 % owned by Cenntro Inc.

(1)
On March 6, 2025, Teemak Power Corporation changed its name to Bison Motors Inc.

(2)
On October 22, 2025 and November 12, 2025, Sinomachinery Zhejiang and Cenntro Machinery were deregistered, respectively.

(3)
The subsidiaries were scheduled for structured dissolution and were measured as held for sale operations.

(4)
On April 1, 2025, the other shareholder of Cenntro Electric CICS, SRL, Billy Rafael Romero Del Rosario increased his shareholding from 10 shares to 29,010 shares through additional capital distribution. As a result, the total number of issued shares in Cenntro Electric CICS, SRL increased from 1,000 to 30,000 , reducing the Company’s equity interest from 99 % to 3.3 %. On April 24, 2025, the Company entered an agreement with Casida Del Rosario Alvarado to dispose its equity interest of Cenntro Electric CICS, SRL, with a consideration of DOP 100,000 (approximately $ 1,694 ). For the nine months ended September 30, 2025, the Company recognized gain of $ 1,157,556 from disposal of Cenntro Electric CICS, SRL.
7
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)
Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2024, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of September 30, 2025 and for the three months and nine months ended September 30, 2025 and 2024 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, 2024. The results of operations for the three months and nine months ended September 30, 2025 are not necessarily indicative of the results for the full year or any future periods.

(b)
Use of estimates

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.

(c)
Fair value measurement

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 due to a related party, 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 due to a related party, current were approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from a related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

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

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

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.

8
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.

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: i) private equity funds, which represent the investment in equity security on the unaudited condensed consolidated balance sheet; ii) wealth management products purchased from banks, which represents the available-for-sale investments in short-term investments on the unaudited condensed consolidated balance sheet.

(d)
Revenue recognition

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. Consideration is recorded net of sales returns and VAT. Sales returns is estimated based on historical experiences, which were insignificant for the nine months ended September 30, 2025 and 2024. The consideration is fixed, with no variable consideration. All transactions are settled in cash within the normal credit period, and there is no financing component.

Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses.

The following table disaggregated the Company’s revenues by product line for the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Vehicles sales
$
12,389,471
$
25,483,836
Spare-parts sales
818,955
2,783,954
Other service income
302,380
176,041
Net revenues
13,510,806
28,443,831
Less: net revenues, discontinued operation
( 390,612
)
( 2,555,785
)
Net revenues, continuing operation
$
13,120,194
$
25,888,046

9
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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.

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Primary geographical markets
Europe
$
9,732,252
$
7,260,544
Asia
2,494,237
4,080,473
America
1,250,477
17,071,721
Others
33,840
31,093
Net revenues
13,510,806
28,443,831
Less: Net revenues, discontinued operation
( 390,612
)
( 2,555,785
)
Net revenues, continuing operation
$
13,120,194
$
25,888,046

Contract Balances

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

Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the nine months ended September 30, 2025 and 2024, the Company recognized $ 1,048,505 and $ 946,071 revenue that was included in contractual liabilities as of January 1, 2025 and 2024, respectively.

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

September 30,
2025
December 31,
2024
(Unaudited)
Accounts receivable, net
$
2,874,308
$
4,688,322
Less: accounts receivable, net, held for discontinued operation
( 1,276,020
)
( 1,406,457
)
Accounts receivable, net, held for continuing operation
1,598,288
3,281,865
Contractual liabilities
$
3,783,681
$
4,202,001
Less: contractual liabilities, held for discontinued operation
( 84,634
)
( 80,696
)
Contractual liabilities, held for continuing operation
3,699,047
4,121,305

(e)
Recently issued accounting standards pronouncements

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 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ended December 31, 2024. The adoption has no significant impact on the Company’s financial statements and disclosure.

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

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis with optional retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

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

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.

10
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - ACCOUNTS RECEIVABLE, NET

Accounts receivable, net were summarized as follows:

September 30, 2025
(Unaudited)
December 31,
2024
Accounts receivable
$
7,422,670
$
6,706,364
Less: provision for credit losses
( 4,548,362
)
( 2,018,042
)
Total accounts receivable, net
2,874,308
4,688,322
Less: accounts receivable, net, held for discontinued operations
( 1,276,020
)
( 1,406,457
)
Accounts receivable, net, held for continuing operations
$
1,598,288
$
3,281,865

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

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Balance at the beginning of the period
$
2,018,042
$
1,912,268
Additions
2,789,532
-
Write-off
( 510,731
)
( 179,430
)
Foreign exchange
251,519
16,308
Balance at the end of the period
4,548,362
1,749,146
Less: balance of held for discontinued operations
( 2,199,190
)
( 1,247,038
)
Balance of held for continuing operations
$
2,349,172
$
502,108

NOTE 4 - INVENTORIES

Inventories were summarized as follows:

September 30, 2025
December 31, 2024
(Unaudited)
Raw material
$
10,126,340
$
10,071,694
Work-in-progress
1,501,849
1,395,282
Goods in transit
436,928
129,821
Finished goods
23,375,568
25,655,019
Inventories, gross
35,440,685
37,251,816
Less: inventory valuation allowance
( 8,846,954
)
( 8,255,880
)
Total inventories, net
26,593,731
28,995,936
Less: inventories, net, held for discontinued operations
( 2,303,551
)
( 4,983,432
)
Inventories, net, held for continuing operations
$
24,290,180
$
24,012,504

The changes in inventory valuation allowance were as follows:

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Balance at the beginning of the period
$
8,255,880
$
3,504,333
Addition
1,267,513
5,684,056
Write-off
( 793,302
)
( 1,081,060
)
Foreign exchange
116,863
( 3,437
)
Balance at the end of the period
$
8,846,954
$
8,103,892

NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS, NET

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

September 30, 2025
December 31, 2024
(Unaudited)
Advance to suppliers
$
11,702,868
$
13,435,558
Deductible input value added tax
5,806,507
5,284,726
Loans to a third party
1,023,216 -
Others
1,707,387
1,115,282
Less: provision for credit losses
( 1,973,221
)
( 724,665 )
Prepayment and other current assets, net
18,266,757
19,110,901
Less: prepayment and other current assets, net, held for discontinued operations
( 1,209,868
)
( 1,035,486
)
Prepayment and other current assets, net, held for continuing operations
$
17,056,889
$
18,075,415

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

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Balance at the beginning of the period
$
696,698
$
752,191
Additions
1,273,591
-
Write-off
( 16,696
)
( 35,438
)
Foreign exchange
19,628
7,912
Balance at the end of the period
1,973,221
724,665
Less: balance of held for discontinued operations
( 1,973,221
)
( 724,665
)
Balance of held for continuing operations
$
-
$
-

11
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – LONG-TERM INVESTMENTS

(a)
Equity method investments, net

Equity method investments consisted of the following:

September 30, 2025
December 31, 2024
(Unaudited)
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (1)
$
2,121,289
$
2,068,951
Able 2rent GmbH (DEU) (2)
108,322
89,533
Less: impairment (2)
( 108,322
)
-
Total equity method investment, net
2,121,289
2,158,484
Less: equity method investment, net, held for discontinued operations
-
( 89,533
)
Equity method investment, net, held for continuing operations
$
2,121,289
$
2,068,951

(1)
On September 25, 2022, the Company invested RMB 15,400,000 (approximately $ 2,163,225 ) in Entropy Yu to acquire 99.355 % of the partnership entity’s equity interest. The Company accounts for the investment under the equity method because the Company controls 50 % of voting interests in partnership matters and material matters must be agreed upon by all partners. The Company has the ability to exercise significant influence over Entropy Yu.

(2)
On March 22, 2022, CAE invested EUR 100,000 (approximately $ 117,350 ) in Able 2rent GmbH (DEU) to acquire 50 % of its equity interest. For the nine months ended September 30, 2025, the Company recognized full impairment of Able 2rent GmbH (DEU).

(b)
Equity investment without readily determinable fair values, net

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

September 30, 2025
December 31, 2024
(Unaudited)
HW Electro Co., Ltd. (1)
$
1,000,000
$
1,000,000
Total equity investment without readily determinable fair values, net
1,000,000
1,000,000
Less: equity investment without readily determinable fair values, net, held for discontinued operations
-
-
Equity investment without readily determinable fair values, net, held for continuing operations
$
1,000,000
$
1,000,000

(1)
On January 31, 2023, the Company entered into a debt convention agreement with HW Electro Co., Ltd., to convert the loan principal of $ 1,000,000 into HW Electro Co., Ltd.’s shares. The Company held 1,143,860 shares of HW Electro Co., Ltd.’s for a total of 3.00 % of its equity interest as of September 30, 2025.

(c)
Debt security investments

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 . The balance of debt investments, held for continuing operations was $ 664,212 and $ 641,712 , respectively, as of September 30, 2025 and December 31, 2024.

12
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – INVESTMENT IN EQUITY SECURITY

Investment in equity security consisted of the following:

September 30, 2025
December 31, 2024
(Unaudited)
MineOne Fix Income Investment I L.P (1)
$
27,383,012
$
26,604,319
Total investment in equity security
27,383,012
26,604,319
Less: investment in equity security, held for discontinued operations
-
-
Investment in equity security, held for continuing operations
$
27,383,012
$
26,604,319

(1)
On October 12, 2022, the Company entered into a subscription agreement with MineOne Partners Limited, a partnership incorporated in the British Virgin Islands, for purchase of $ 25 million partnership shares in MineOne Fix Income Investment I L.P (“MineOne”), over which MineOne Partners Limited is the General Partner. The Company held 100 % of the limited partnership equity of MineOne and was entitled to a fixed return of 5 % per annum on the investment amount, and had the rights to sell all or any portion of its partnership interest after the second anniversary of the investment if the Company gave at least ten business days ’ prior notice to the General Partner and received the consent of General Partner. MineOne focuses on private credit loans, convertible bridge, and personal factoring. The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity fund is measured at fair value with gains and losses recognized in earnings.

For the nine months ended September 30, 2025 and 2024, the Company received distribution of nil and $ 500,000 of investment in MineOne, respectively.

For the nine months ended September 30, 2025 and 2024, the Company recorded upward adjustments of $ 778,693 and $ 756,868 for changes in fair value of the equity investment, held for continuing operations, respectively.

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT, NET

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

September 30, 2025
December 31, 2024
(Unaudited)
At cost:
Plant and building
$
13,546,667
$
13,272,630
Land
1,063,270
1,063,270
Machinery and equipment
4,439,194
3,575,885
Leasehold improvement
2,380,996
2,129,632
Office equipment
2,169,161
2,497,514
Motor vehicles
1,386,578
1,412,266
Construction in progress
115,339
418,340
Total
25,101,205
24,369,537
Less: accumulated depreciation
( 7,293,245
)
( 6,019,046
)
Impairment
( 1,076,437
)
( 949,485
)
Property, plant and equipment, net
16,731,523
17,401,006
Less: property, plants and equipment, net, held for discontinued operations
-
-
Property, plants and equipment, net, held for continuing operations
$
16,731,523
$
17,401,006

Depreciation expenses charged to the continuing operations for the nine months ended September 30, 2025 and 2024 were $ 1,339,829 and $ 1,289,126 , respectively. There’s no depreciation expense of discontinued operations for the nine months ended September 30, 2025 and 2024.

There’s no impairment loss of continuing operations for the nine months ended September 30, 2025 and 2024.Impairment loss charged to the discontinued operations for the nine months ended September 30, 2025 and 2024 were nil and $ 4,368 , respectively.

NOTE 9 – INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

September 30, 2025
December 31, 2024
(Unaudited)
At cost:
Land use right
$
5,569,068
$
5,431,507
Trademark
859,002
757,693
Technology
779,204
687,306
Software
118,172
115,035
Total
7,325,446
6,991,541
Less: accumulated amortization
( 1,163,116
)
( 766,239
)
Intangible assets, net
6,162,330
6,225,302
Less: intangible assets, net, held for discontinued operations
-
-
Intangible assets, net, held for continuing operations
$
6,162,330
$
6,225,302

Amortization expenses charged to the continuing operations for the nine months ended September 30, 2025 and 2024 were $ 322,935 and $ 316,388 , respectively.

13
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – ACCOUNTS PAYABLE


September 30, 2025
December 31, 2024

(Unaudited)
Professional fees payable
$
2,462,501
$
2,861,695
Payable to suppliers
2,585,740
3,697,743
Others
128,300
110,739
Total accounts payable
5,176,541
6,670,177
Less: accounts payable, held for discontinued operations
( 1,459,110
)
( 1,534,467
)
Accounts payable, held for continuing operations
$
3,717,431
$
5,135,710

NOTE 11 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities were summarized as follows:


September 30, 2025
December 31, 2024

(Unaudited)
Accrued litigation compensation
$
1,772,376
$
1,761,275
Loan from third parties (1)
1,678,643
626,516
Accrued expenses
651,450
411,941
Other taxes payable
493,893
624,404
Employee payroll and welfare payables
682,171
271,147
Credit card payable
162,642
111,703
Accrued interest for convertible promissory note
106,786
270,690
Others
251,533
379,600
Total accrued expenses and other current liabilities
5,799,494
4,457,276
Less: accrued expenses and other current liabilities, held for discontinued operations
( 577,577
)
( 809,773
)
Accrued expenses and other current liabilities, held for continuing operations
$
5,221,917
$
3,647,503

(1)
This mainly represented the loan from Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc., Hongbo Jin, Gregory Hancke Hurzzeitdarlehen, Meiya Xu, Suleiman International, Commas International Holding, LLC and Barclays West Corporation. From April 30, 2024 to August 4, 2025 the Company entered into agreements with Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc., Hongbo Jin and Suleiman International to borrow interest-free loans of $ 258,832 , $ 200,000 , $ 100,000 , $ 110,000 and $ 300,000 , which were due on April 30, 2026 , March 9, 2026 , March 31, 2026 , March 27, 2026 and April 9, 2026 , respectively. On March 5, 2025, the Company entered an agreement with Gregory Hancke Hurzzeitdarlehen to borrow EUR 99,000 (approximately $ 116,177 ), with interest rate of 7.50 % per annum and due on December 31, 2025 , for which principal of EUR 15,000 (approximately $ 17,603 ) was repaid as of September 30, 2025. On January 23, 2025, the Company entered an agreement with Meiya Xu to borrow RMB 400,000 (approximately $ 56,188 ), with the interest rate of 3.45 % and due on January 23, 2026 . On June 20, 2025, the Company entered an agreement with Commas International Holding, LLC to borrow $ 250,000 , with the interest rate of 5.00 % and due on June 20, 2026 . On August 4, 2025, the Company entered an agreement with Barclays West Corporation to borrow $ 290,000 , with the interest rate of 6.00 % and due on August 4, 2026 .

NOTE 12 –SHORT-TERM AND LONG-TERM BANK LOANS

As of
September 30,
2025
(Unaudited)
As of
December 31,
2024
Bank and other financial institution
Annual
Interest
Rate
Start
Maturity
Principal
Current
portion
Non-
current
portion
Current
portion
Non-
current
portion
Bank of Multiple Promerica Republic Dominicana (1)
10.00
%
April and June 2024
April and June 2029
$
-
$
-
$
-
$
86,778
$
362,386
Bank of Multiple Promerica Republic Dominicana (2)
10.00
%
June and July 2024
May 2025
-
-
-
162,836
-
Industrial and Commercial Bank of China (3)
2.50
%
May and September 2025
May and September 2026
906,026
906,026
-
-
-
Total borrowings
906,026
906,026
-
249,614
362,386
Less: borrowings, held for discontinued operations
-
-
-
-
-
Borrowings, held for continuing operations
$
906,026
$
906,026
$
-
$
249,614
$
362,386

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

(2)      In April 2024, Cenntro Electric CICS, SRL was granted bank facility of DOP10,000,000 (approximately $ 159,644 ) or equivalent USD from Bank of Multiple Promerica Republic Dominicana, with the interest of 10 %, with the contract term of five years . During the term of this agreement, the facility shall be reviewed on each annual calendar date. As of September 30, 2025, Cenntro Electric CICS, SRL was no longer a subsidiary of the Company.

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

14
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - INCOME TAXES

Australia

CEGL is subject to a tax rate of 25 %.

United States

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

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

Europe

Subsidiaries in Germany, Spain, Italy, Netherlands and Turkey are subject to a tax rate of 15.825 %, 25 %, 24 %, 19 % and 25 %, respectively.

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 nine months ended September 30, 2025 and 2024.

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


For the Nine Months
Ended September 30,

2025
2024
(Unaudited)
(Unaudited)
PRC
$
8,851,873
$
10,352,769
US
7,417,548
4,861,383
Europe
4,327,197
9,407,782
Australia
1,266,820
1,705,205
Others
452,524
1,125,615
Total losses before income taxes
22,315,962
27,452,754
Less: losses before income taxes for discontinued operations
( 2,343,802
)
( 6,663,311
)
Losses before income taxes for continuing operations
$
19,972,160
$
20,789,443

15
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - 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:

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Operating leases cost excluding short-term lease expenses
$
2,022,079
$
3,392,185
Short-term lease expenses
77,580
316,959
Total
$
2,099,659
$
3,709,144

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

September 30, 2025
(Unaudited)
September 30, 2024
(Unaudited)
Cash paid for amounts included in the measurement of lease liabilities
$
865,409
$
2,252,795
Weighted average remaining lease term
4.53 years
5.58 years
Weighted average discount rate
7.16
%
6.28
%

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 September 30, 2025:

Operating
Leases
For the remaining of the year ended December 31, 2025
$
1,958,102
For the years ended December 31,
2026
1,713,759
2027
1,494,884
2028
918,266
2029
827,443
2030 and thereafter
1,216,452
Total lease payments
8,128,906
Less: imputed interest
1,022,776
Total
7,106,130
Less: current portion
3,240,088
Non-current portion
$
3,866,042

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:

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
Operating leases cost excluding short-term lease expenses
$
-
$
289,372
Short-term lease expenses
238,440
271,370
Total
$
238,440
$
560,742

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

September 30, 2025
(Unaudited)
September 30,2024
(Unaudited)
Cash paid for amounts included in the measurement of lease liabilities
$
33,101
$
415,371
Weighted average remaining lease term
-
0.19 years
Weighted average discount rate
-
3.18
%

No lease liabilities held for discontinued operations under operating leases as of September 30, 2025.

16
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT

Convertible Promissory Note

On July 20, 2022, the Company issued to investors convertible promissory note (“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 amendment 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 proceed 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 of ten 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, change in fair value of convertible notes.

Note amendment
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 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 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.

The Note continues to contains an ownership limitation, pursuant to which the Company shall not effect any issuance of shares of common stock to the extent that such issuance would cause the Holder, together with its affiliates, to beneficially own a number of common shares exceeding 9.99 % of the number of shares of common stock outstanding on such date, including shares of common stock issuable upon such conversion under the Note.

The movement of Note during the nine months ended September 30, 2025 and 2024 were as follows:

Liability component
As of December 31, 2023
$
9,956,000
Convertible promissory notes issued during the period
-
Redemption of convertible promissory notes
-
Fair value change recognized
( 4,000
)
As of September 30, 2024 (Unaudited)
$
9,952,000
As of December 31, 2024
9,952,000
Convertible promissory notes issued during the period
-
Note amendment
1,756,137
Exercise
( 3,606,554
)
Fair value change recognized
( 635,583
)
As of September 30, 2025 (Unaudited)
$
7,466,000

The estimated fair value of the Note as of September 30, 2025 and December 31, 2024 was computed using a Monte Carlo Simulation Model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement. The unobservable inputs utilized for measuring the fair value of the Note reflects our assumptions about the assumptions that market participants would use in valuing the Note as of the issuance date and subsequent reporting period.

17
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT (CONTINUED)

We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model :

Fair Value Assumptions - Convertible Promissory Note
September 30, 2025
(Unaudited)
December 31,
2024
Face value principal payable
$
6,346,827
$
9,953,381
Original conversion price
$
1.2375 per share
$
1.2375 per share
Interest Rate
8.00
%
8.00
%
Expected term (years)
0.30
1.05
Volatility
50.17
%
59.62
%
Market yield (range)
11.57
%
9.24
%
Risk free rate
3.85
%
4.33
%
Issue date
July 20, 2022
July 20, 2022
Maturity date
January 19, 2026
January 19, 2026

Warrant

Accompany with the Note, the Company issued to the same investor warrants to purchase up to 2,473,334 warrant shares 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 of the Company at same day, as part of the underwriter’s commission. The warrants were issued with an exercise price of $ 1.77 per share.

Both warrants are exercisable from the date of issuance and have a term of five 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 nine months ended September 30, 2025 and 2024 were as follows:

Investor warrants component
Placement agent warrants component
Shares
Amount
Shares
Amount
As of December 31, 2023
873,810
$
12,189,508
247,333
$
3,456,578
Exercise of warrants
( 3,583
)
( 49,986
)
-
-
Fair value change recognized
-
1,719
-
474
As of September 30, 2024 (Unaudited)
870,227
$
12,141,241
247,333
$
3,457,052
As of December 31, 2024
870,227
$
12,137,087
247,333
$
3,455,829
Exercise of warrants
( 870,227
)
( 12,487,838
)
-
-
Fair value change recognized
-
350,751
-
1,084
As of September 30, 2025 (Unaudited)
-
$
-
247,333
$
3,456,913

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

Fair Value Assumptions – Warrants
September 30, 2025
(Unaudited)
December 31,
2024
Expected term (years)
1.80
2.55
Volatility
60.91
%
62.78
%
Risk free rate
3.63
%
4.32
%
Expected expiry date
July 19, 2027
July 19, 2027

18
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16- 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 of Common Stock.

For the nine months ended September 30, 2025 and 2024, the total share-based compensation expenses were comprised of the following:

For the Nine Months Ended September 30,
2025
2024
(Unaudited)
(Unaudited)
General and administrative expenses

$
1,889,508


$
2,234,708

Selling and marketing expenses
46,655
145,455
Research and development expenses

211,099

263,051
Total

$
2,147,262


$
2,643,214


A summary of share options activity for the nine months ended September 30, 2025 and 2024 were as follows:

Number
of
Share
Options
Weighted
Average
Exercise
Price
$
Weighted
Average
Remaining
Contractual
Years
Aggregate
Intrinsic
Value
$
Outstanding at December 31, 2023
2,025,115
14.26
4.81
-
Granted
-
-
Exercised
-
-
Forfeited
( 85,335
)
16.99
Expired
( 161,363
)
16.96
Outstanding at September 30, 2024 (Unaudited)
1,778,417
13.88
3.89
-
Outstanding at December 31, 2024
1,733,052
13.80
3.65
-
Granted
-
-
Exercised
-
-
Forfeited
( 17,414
)
22.58
Expired
( 187,766
)
12.27
Outstanding at September 30, 2025 (Unaudited)
1,527,872
13.89
3.28
-
Expected to vest at September 30, 2025 (Unaudited)
140,948
16.87
6.38
-
Exercisable as of September 30, 2025 (Unaudited)
1,386,924
13.28
2.96
-

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.

For the Nine Months Ended September 30,
2025
(Unaudited)
2024
(Unaudited)
Expected volatility
83.41 %~ 86.57
%
83.41 %~ 86.57
%
Expected dividends yield
0
%
0
%
Risk-free interest rate per annum
2.97 %~ 3.01
%
2.97 %~ 3.01
%
The fair value of underlying common stock (per share)
$ 16.80
$ 16.80

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 September 30, 2025, there was approximately $ 1,375,347 of total unrecognized compensation cost from continuing operations related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 0.50 years.

19
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17 - CONCENTRATIONS


(a)
Customers

The following table sets forth information as to each customer that accounted for 10% or more of net revenue for continuing operation for the nine months ended September 30, 2025 and 2024.

For the Nine Months Ended
September 30, 2025
(Unaudited)
September 30, 2024
(Unaudited)
Customer
Amount
% of Total
Amount
% of Total
A
$
4,723,242
36
%
$
-
-
Total
$
4,723,242
36
%
$
-
-

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 September 30, 2025 and December 31, 2024.

As of September 30, 2025
(Unaudited)
As of December 31,
2024
Customer
Amount
% of Total
Amount
% of Total
B
$
1,418,294
36
%
$
1,372,307
36
%
C
1,023,912
26
%
-
-
Total
$
2,442,206
62
%
$
1,372,307
36
%

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 September 30, 2025 and December 31, 2024.

As of September 30, 2025
(Unaudited)
As of December 31,
2024
Customer
Amount
% of Total
Amount
% of Total
B
$
817,235
22
%
$
823,522
20
%
D
850,853
23
%
855,240
21
%
Total
$
1,668,088
45
%
$
1,678,762
41
%

20
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17 – CONCENTRATIONS (CONTINUED)

(b)
Suppliers

For the nine months ended September 30, 2025 and 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s total purchases of continuing operation, were as follows:

For the Nine Months Ended,
September 30,
2025
(Unaudited)
September 30,
2024
(Unaudited)
Supplier
Amount
% of Total
Amount
% of Total
A
$
5,582,582
52
%
$
9,645,436
54
%
B
*
*
1,929,796
11
%
Total
$
5,582,582
52
%
$
11,575,232
65
%

*
Indicates below 10%.

As of September 30, 2025 and December 31, 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s accounts payable of continuing operation, were as follows:

As of September 30, 2025
(Unaudited)
As of December 31,
2024
Supplier
Amount
% of Total
Amount
% of Total
E
$
*
*
$
767,767
15
%
C
483,558
13
%
*
*
D
443,788
12
%
*
*
Total
$
927,346
25
%
$
767,767
15
%

*
Indicates below 10%.

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 September 30, 2025 and December 31, 2024.

As of September 30, 2025
(Unaudited)
As of December 31,
2024
Supplier
Amount
% of Total
Amount
% of Total
A
$
4,969,906
42
%
$
4,812,746
36
%
G
*
*
2,978,991
22
%
F
2,528,445
21
%
2,465,990
18
%
Total
$
7,498,351
63
%
$
10,257,727
76
%

*
Indicates below 10%.
21
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 - COMMITMENTS AND CONTINGENCIES

Litigation

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

Subject to retention of title and an instalment payment agreement, CAE sold 90 vehicles for a total price of EUR 2,185,721.32 (approximately $ 2,564,943.97 to the French company B-Moville S.A.S. (“B-Moville”) (under a contract dated August 23, 2021. B-MOVILLE had already settled an amount of EUR 58,787.33 by the end of 2022 and, therefore, still owed CAE an amount of EUR 2,126,933.99 , of which EUR 548,244.11 was owed by the end of 2022 under the instalment agreement. B-Moville had withheld instalment payments due to alleged defects of the vehicles, without specifying the amount of the claims for reduction of the purchase price. B-Moville had handed over the cars to its parent company Swoopin Tech S.A.R.L. (“Swoopin”). Swoopin is insolvent and has been in judicial liquidation since November 2, 2022. The vehicles held by Swoopin were prevented from becoming part of the insolvency estate and being realized by the insolvency administrator. Due to the retention of title clause, the property of the 90 vehicles shall be reclaimed by CAE. In the meantime, Swoopin returned the vehicles to B-Moville. As of 14 May 2023, the insolvency court of Paris opened insolvency proceedings against B-Moville. CAE has filed its claims in the insolvency proceedings. However, the liquidator has advised that there is no prospect of payment to unsecured creditors, including CAE, following its declaration of claims. The recovery of the outstanding amount owed to CAE is deemed highly unlikely. All Receivable of CAE related to the case has been written off.

In June 2022, Sevic Systems SE (“Sevic”) filed for injunctive relief in a corporate court in Brussels, Belgium, alleging CAE infringement of Sevic’s intellectual property (“IP”) rights. The injunctive action was also directed against LEIE Center SRL (“LEIE”) and Cedar Europe GmbH (“Cedar”), two distribution partners of CAE. There, Sevic claims it acquired all IP rights to an electric vehicle, the so-called CITELEC model (“CITELEC”), fully and exclusively from the French company SH2M Sarl (“SH2M”) under Mr. Pierre Millet. Sevic claims these rights were acquired under a 2019 IP transfer agreement. According to Sevic, the METRO model (“METRO”) produced by Cenntro Electro Group Ltd. (“Cenntro”) and distributed by CAE derives directly from the CITELEC. The distribution of the METRO, therefore, allegedly infringes on Sevic’s IP rights. In its action, Sevic relies on (Belgian) copyright law and unfair business practices. On February 2, 2023, the president of the commercial court of Brussels rendered a judgment, declaring i) the claim against Cedar was inadmissible and ii) The main claim against CAE and LEIE was founded. According to the president’s opinion the CITELEC-model can enjoy copyright protection and determined it was sufficiently proven that Sevic acquired the copyrights of the CITELEC-model. The president then concluded that the distribution of the METRO-model in Belgium constituted a violation of article XI. 165 §1 of the Belgian Code of Economic Law and thereby ordered the cessation of the distribution of the METRO-model, a penalty in the form of a fine of EUR 20,000.00 per sold vehicle in Belgium and EUR 5,000.00 for each other infringement in Belgium after the judgement was served with a maximum fine of EUR 500,000.00 for LEIE and EUR 1,000,000.00 fine for CAE. Because CAE has not sold any METRO-models in Belgium, the Company believes the judgement is incorrect but has accrued the related liability according to the judgement made. On April 17, 2023 CAE filed a writ of appeal. The introductory hearing was scheduled for May 22, 2023. The judge did not give any legal assessment at the hearing. All parties have been granted deadlines for written pleadings. On January 29, 2025, CAE rejected the late delivered final writ by lawyers of Sevic, which should have been received by September 2, 2024. As of now, it is not possible to determine what the outcome of these proceedings will be.

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

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

On February 12, 2025, Cenntro Automotive Corporation (“CAC”) submitted an application for arbitration with China International Economic and Trade Arbitration Commission, against Anhui Deepway Technology Co., Ltd. (“Deepway”), requesting an economic damage of RMB 320,000 and continuation of performance of the Strategic Cooperation Agreement signed between the two parties in July 2024. Both parties reached a settlement on September 3, 2025 that CAC returns the sample vehicle to Deepway, and Deepway reimburses CAC a total amount of RMB 700,000 to cover shipping, legal and other related expenses incurred associated with this disputed agreement. The arbitration was subsequently withdrawn.
22
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

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

On April 10, 2024, CEGL filed a lawsuit against MHP Americas, Inc. (“MHP”) for breach under the Master Consulting Services Agreement and SAP S/4HANA SOW by failure to properly implement the SAP S/4HANA globally as set forth in those contracts, and for breach of implied covenants of good faith and fair dealing, causing Cenntro to suffer significant damages; and demanded a jury trial on all issues which are triable. Under this claim, CEGL is seeking for a remittance of $ 512,226 paid to date and a recission of the remaining contract with MHP. The litigation was removed to Federal Court on May 7, 2024 where it is pending. At the time of this report, discovery has been completed. Mediation is schedule on November 19, 2025.

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 early stage of the reclassified Civil Matter.

CAE has filed an action in court Landgericht Bochum against Delivrium s.r.o., a company in Louny, Czech Republic (“Delivrium”) for a claim arising from a purchase contract by and between Delivrium and CAE for a dispute of € 956,760 under which CAE is requesting payment and acceptance of vehicles previously ordered by Delivrium.

On April 14, 2025, KW Infrastruktur GmbH filed a lawsuit against Cenntro Automotive Europe GmbH (“CAE”) at the District Court of Bochum, requesting repayment of the purchase price of EUR 158,277.99 plus 9 % interest over the base interest rate, against the return of six electric commercial vehicles delivered by CAE on December 23, 2022. As of the date of this report, CAE is preparing documents and arguments to defend.

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 Ronga has failed to pay the remaining balance due under three Equipment Purchase Agreements signed during 2021 and 2022. On September 26, 2025, Ronda submitted its defense and counterclaim, asserting that Jiangxin had not fulfilled its contractual obligations, including the delivery of complete technical documents, installation and test run, and therefore the conditions for payment had not been satisfied. Ronda also reserved the right to terminate the agreements and seek a full refund of all payments made. The case remains pending before the court.

NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES

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

Name of related parties:
Relationship with the Company
Zhejiang RAP
An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary
Billy Rafael Romero Del Rosario
A shareholder who owns 1% equity interest of Cenntro Electric CICS, SRL and is the CEO of Cenntro Electric CICS, SRL as of December 31, 2024. Since April 1, 2025,  Billy Rafael Romero Del Rosario was not a related party of the Company with the disposal of Cenntro Electric CICS, SRL.
Zhongchai Holding (Hongkong) Limited(“Zhongchai”)
An entity ultimately controlled by Peter Z. Wang, the CEO of the Company
Hangzhou Greenland Energy Technologies Co., Ltd.(“Greenland”)
An entity ultimately controlled by Peter Z. Wang, the CEO of the Company
HEVI Corp.
An entity ultimately controlled by Peter Z. Wang, the CEO of the Company
Hangzhou Hezhe
An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary since June 23, 2021. On May 8, 2024, Hangzhou Hezhe become a subsidiary of the Company.

23
CENNTRO INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Related party transactions

During the nine months ended September 30, 2025 and 2024, the Company had the following material related party transactions for the continuing operation.

For the Nine Months Ended
September 30,
2025
2024
(Unaudited)
(Unaudited)
Interest income from a related party
Zhejiang RAP
$
-
$
22,220
Interest expense to a related party
Zhongchai
33,575
-
Interests-bearing loan from a related party
Zhongchai
1,000,000
-
Repayment of Interests-bearing loan to a related party
Zhongchai
160,000
-
Interests-bearing loan to a related party
Greenland
27,701
-
Repayment of interests-bearing loan principal and interest from a related party
Greenland
28,174
-
Prepayment of operating fund to a related party
Billy Rafael Romero Del Rosario (1)
25,378
413,437
Reimbursement from a related party
Billy Rafael Romero Del Rosario
88,646
-
Rent income from a related party
HEVI Corp.
66,912
-
Purchase of raw materials from related parties
Hangzhou Hezhe (2)
-
3,759
Refund on the purchase of the raw materials
Hangzhou Hezhe (2)
-
69,397

(1)
This was the payment to this related party for daily operating reimbursement with no interest and without expiration date in Cenntro Electric CICS, SRL. As of September 30, 2025, Cenntro Electric CICS, SRL was no longer a subsidiary of the Company.

(2)
The transaction for the nine months ended September 30, 2024 of this related party consisted of transaction only before it becoming a subsidiary of the Company, which was from January to April 2024.

Amounts due from a Related Party

The following table presents amounts due from related parties as of September 30, 2025 and December 31, 2024.

September 30,
2025
(Unaudited)
December 31,
2024
Zhejiang RAP (1)
$
12,026
$
11,729
Total amounts due from a related party
12,026
11,729
Less: amounts due from a related party, held for discontinued operations
-
-
Amounts due from a related party, held for continuing operations
$
12,026
$
11,729

(1)
The balance mainly represents the interest income receivable from the related party.

Amounts due to a Related Party - current

The following table presents amounts due to related parties as of September 30, 2025 and December 31, 2024.

September 30,
2025
(Unaudited)
December 31,
2024
Zhongchai (1)
$
873,575
$
-
Billy Rafael Romero Del Rosario
-
26,226
Total amounts due to a related party
873,575
26,226
Less: amounts due to a related party, held for discontinued operations
-
-
Amounts due to a related party, held for continuing operations
$
873,575
$
26,226

(1)
On April 15, 2025, Zhongchai entered into a loan agreement (the “Loan Agreement”) with the Company, which provides for the Company’s capacity to borrow up to $ 1.0 million as evidenced by a promissory note issued by the Company to the Lender dated as of April 15, 2025 (the “Promissory Note”). The Company intends to use the proceeds received from the Promissory Note for working capital purposes. The Promissory Note has a maturity date of April 14, 2026 , and accrues interest at a rate of 7.50 % per annum. Both parties also made supplementary agreement that the period before April 15, 2025 shall be an interest-free period for the Advanced Funds. As of September 30, 2025, loan principal of $ 160,000 was repaid.

NOTE 20 - SUBSEQUENT EVENT

The Company and About Investment Pte. Ltd., a Singapore exempt private company limited by shares (“About Pte”) have entered into certain exchange agreement dated October 23, 2025 (the “Exchange Agreement”), pursuant to which About Pte agreed to exchange the outstanding principal balance on a senior secured convertible note originally issued on July 20, 2022, assigned to About Pte and amended from time to time to extend the maturity date to January 19, 2026, as previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on May 21, 2025. In consideration for the exchange, About Pte received a new secured convertible promissory note issued on October 23, 2025, in the principal amount of $ 4,000,000 , with an interest rate of 8 % per annum and a maturity date of January 19, 2026 (the “Exchange Note”). Under the terms of the Exchange Note, in the event of default, interest shall accrue at the lesser of (i) 10 % per annum or (ii) the maximum rate permitted by applicable law. Upon cure of the default, the interest rate shall revert to the original rate of 8 % per annum. Additionally, an event of default may, at the holder’s election, trigger an acceleration of the note’s maturity, in which case 110 % of the then-outstanding principal amount, together with all accrued and unpaid interest, shall become immediately due and payable.

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

24
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introductory Note

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company,” “Cenntro,” “we,” “us” or “our” are references to the combined business Cenntro Inc. and its subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.

A. Key Components of Results of Operations

Net revenues

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

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

Cost of goods sold

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

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

25
Operating expenses

Our operating expenses consist of general and administrative, selling and marketing expenses, and research and development expenses. General and administrative expenses are the most significant components of our operating expenses. Operating expenses also include provision for doubtful accounts.

Research and Development Expenses

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

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, freight costs, travel and entertainment expenses and allocated overhead. Marketing programs consist of advertising, trade shows, events, corporate communications, and brand-building activities. We expect our selling and marketing expenses to remain at the current level, as we have stabilized our blended sales channel mix, especially in Europe, by strengthening e-commerce and distributor networks, which reduces the reliance on high-cost direct selling.

General and Administrative Expenses

General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, and fees for third-party professional services. While we continue to monitor general and administrative expenses, we expect general and administrative expenses to decrease over the next two years in connection with our continued effort to improve efficiency, combining our EV centers with local distribution networks and utilizing well-proven OEMs and supply chains.

Provision for credit losses

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

Other income (expenses)

Interest expense, net

Interest expense, net, consists of interest on outstanding loans and the convertible promissory notes.

26
Discontinued operations

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

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

Key Operating Metrics

We prepare and analyze operating and financial data to assess the performance of our business and allocate our resources. The following table sets forth our key performance indicators for the nine months ended September 30, 2025 and 2024.

Nine Months ended September 30,
2025
2024
(Expressed in U.S. Dollars)
(Unaudited)
Gross margin of vehicle sales
1.15
%
33.06
%

Gross margin of vehicle sales. Gross margin of vehicle sales is defined as gross profit of vehicle sales divided by total revenue of vehicle sales.

27
Results of Operations

The following table sets forth a summary of our statements of operations for the periods indicated:

Three Months ended September 30,
Nine Months ended September 30,
2025
2024
2025
2024
(Expressed in U.S. Dollars)
(Unaudited)
(Unaudited)
Combined Statements of Operations Data:
Net revenues
4,570,218
16,230,299
13,120,194
25,888,046
Cost of goods sold
(4,466,900
)
(9,932,846
)
(12,714,253
)
(17,843,769
)
Gross profit
103,318
6,297,453
405,941
8,044,277
Operating Expenses:
Selling and marketing expenses
(811,999
)
(4,361,736
)
(1,816,296
)
(5,575,705
)
General and administrative expenses
(4,091,359
)
(7,092,014
)
(14,193,281
)
(20,078,895
)
Research and development expenses
(518,852
)
(1,401,991
)
(1,951,891
)
(3,942,865
)
Provision for credit losses
(1,554,841
)
-
(3,590,184
)
-
Total operating expenses
(6,977,051
)
(12,855,741
)
(21,551,652
)
(29,597,465
)

Loss from operations
(6,873,733
)
(6,558,288
)
(21,145,711
)
(21,553,188
)

















Other Income (Expense):
Interest expense, net
(112,706
)
(34,198
)
(387,790
)
(58,744
)
Loss from early termination of lease contract
(538,317
)
-
(537,179
)
-
Loss from acquisition of Hezhe
-
-
-
(149,872
)
Gain on exercise of warrants
-
910
-
910
Change in fair value of convertible promissory notes and derivative liability
421,038
(6,725
)
283,748
1,807
Loss from Note Amendment
-
-
(1,756,137
)
-
Change in fair value of equity securities
262,416
262,417
778,693
756,868
Foreign currency exchange gain, net
242,904
1,670,234
1,214,236
1,042,064
Gain/(loss) from cross-currency swaps
4,401
(705
)
(5,294
)
882
Loss from long-term investment
(26
)
(94
)
(62
)
(30,282
)
Gain from disposal of Cenntro Electric CICS, SRL’s equity
-
-
1,157,556
-
Other (expense) income, net
200,566
(647,434
)
425,780
(799,888
)
Net loss from continuing operations before tax
(6,393,457
)
(5,313,883
)
(19,972,160
)
(20,789,443
)
Income tax benefit
12,969
12,334
40,009
29,082
Net loss from continuing operations
(6,380,488
)
(5,301,549
)
(19,932,151
)
(20,760,361
)
Discontinued operations
Loss from discontinued operations, net of tax
(334,600
)
(3,680,038
)
(2,343,802
)
(6,645,244
)
Net loss
(6,715,088
)
(8,981,587
)
(22,275,953
)
(27,405,605
)
Less: net loss attributable to non-controlling interests
(8,797
)
(9,815
)
(25,989
)
(20,855
)
Net loss attributable to the Company’s shareholders
(6,706,291
)
(8,971,772
)
(22,249,964
)
(27,384,750
)

28
Comparison of the Three and Nine months ended September 30, 2025 and 2024

Net Revenues

The following table presents our net revenue components for continuing operations by amount and as a percentage of the total net revenues for the periods presented.

Three Months ended September 30,
Nine Months ended September 30,
2025
2024
2025
2024
Amount
%
Amount
%
Amount
%
Amount
%
(Expressed in U.S. Dollars)
(Unaudited)
(Unaudited)
Net revenues:
Vehicle Sales
$
4,186,289
91.6
%
$
15,400,773
94.9
%
$
12,076,351
92.0
%
$
23,098,277
89.2
%
Spare-part sales
311,426
6.8
%
777,553
4.8
%
741,463
5.7
%
2,663,456
10.3
%
Other sales
72,503
1.6
%
51,973
0.3
%
302,380
2.3
%
126,313
0.5
%
Total net revenues
$
4,570,218
100.0
%
$
16,230,299
100.0
%
$
13,120,194
100.0
%
$
25,888,046
100.0
%

Net revenues for the nine months ended September 30, 2025 were approximately $13.1 million, a decrease of approximately $12.8 million or 49.3% from approximately $25.9 million for the nine months ended September 30, 2024. The decrease in net revenues in 2025 was primarily attributed to the decrease in spare-part sales by approximately $1.9 million due to the decrease in sales of iChassis™ and the decrease in vehicle sales of approximately $11.0 million due to the decrease of sales volume and average selling price from approximately $22,970 to $12,437, offset by the increase in other sales of approximately $0.2 million. The net revenues in Europe market for the nine months ended September 30, 2025 were approximately $9.3 million, an increase of approximately $4.6 million from approximately $4.7 million for the nine months ended September 30, 2024. The net revenues in Asia market for the nine months ended September 30, 2025 were approximately $2.5 million, a decrease of approximately $1.6 million from approximately $4.1 million for the nine months ended September 30, 2024.

Net revenues for the three months ended September 30, 2025 were approximately $4.6 million, a decrease of approximately $11.7 million or 71.8% from approximately $16.2 million for the three months ended September 30, 2024. The decrease in net revenues in 2025 was primarily attributed to the decrease in spare-part sales by approximately $0.5 million due to the decrease in sales of iChassis™ and the decrease in vehicle sales of approximately $11.2 million due to the decrease of sales volume and average selling price from approximately $20,999 to $10,161. The net revenues in Europe market for the three months ended September 30, 2025 were approximately $3.7 million, an increase of approximately $0.6 million from approximately $3.1 million for the three months ended September 30, 2024. The net revenues in Asia market for the three months ended September 30, 2025 were approximately $0.3 million, a decrease of approximately $0.7 million from approximately $1.3 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we sold 971 ECVs, including 31 fully assembled Metro® units, 45 fully assembled Logistar™ 200 units, 112 fully assembled Logistar™ 100 units, 33 fully assembled Teemak™ units, 8 fully assembled Logistar™ 260 units, 1 fully assembled Logistar™ 400 units, 449 fully assembled Avantier™ units, 3 Clubcar units, 24 Antric® units, 50 Logistar™ 210 units, 105 Logistar™ 450 units, 33 fully assembled Seres 5 units, 5 fully assembled Joylong-A4 units and 1 fully assembled Joylong-EA6 units, compared with 1082 ECVs for the nine months ended September 30, 2024, including 117 fully assembled Metro® units, 62 fully assembled Logistar™ 200 units, 110 fully assembled Logistar™ 100 units, 23 fully assembled Teemak™ units, 68 fully assembled Logistar™ 260 units, 115 fully assembled Logistar™ 400 units, 445 fully assembled Avantier™ units, 20 Neibor® 150 units, 82 Clubcar units, 33 Antric® units, 3 Logistar™ 210 units, 1 Logistar™ 210V units and 3 Neibor® 200 units.

29
For the nine months ended September 30, 2025, we also sold 87 iChassis™ units other than the 971 ECVs.

For the three months ended September 30, 2025, we sold 412 ECVs, including 1 fully assembled Metro® units, 17 fully assembled Logistar™ 200, 54 fully assembled Logistar™ 100, 6 fully assembled Logistar™ 260, 227 fully assembled Avantier™, 16 Clubcar units, 10 Antric® units, 43 Logistar™ 210 units, 25 Logistar™ 450 units, 1 Logistar™ 300 units, and 12 fully assembled Seres 5 units, compared with 817 ECVs for the three months ended September 30, 2024, including 100 fully assembled Metro® units, 56 fully assembled Logistar™ 200, 61 fully assembled Logistar™ 100, 7 fully assembled Teemak™, 39 fully assembled Logistar™ 260, 78 fully assembled Logistar™ 400, 389 fully assembled Avantier™, 20 Neibor® 150 units, 3 Neibor® 200 units, 43 Clubcar units, 19 Antric® units, 1 Logistar™ 210 units, and 1 Logistar™ 210V units.

For the three months ended September 30, 2025, we also sold 31 iChassis™ units other than the 412 ECVs.

Geographically, the vast majority of our net revenues were generated from vehicle sales in Asia and European Union during the nine months ended September 30, 2025. For the nine months ended September 30, 2025, net revenues from Europe, North America, Asia (including China) and Africa as a percentage of total revenues was 71.2%, 9.5%, 19.0% and 0.3%, respectively, compared to 18.2%, 65.9%, 15.8% and 0.1%, respectively for the corresponding period in 2024.

The vast majority of our net revenues were generated from vehicle sales in Asia and European Union during the three months ended September 30, 2025. For the three months ended September 30, 2025, net revenues from Europe, North America, Asia (including China) and Africa as a percentage of total revenues was 81.3%, 6.4%, 12.3% and nil, respectively, compared to 19.1%, 69.7%, 11.0% and 0.2%, respectively for the corresponding period in 2024.

For the nine months ended September 30, 2025, net revenues from vehicle sales in Europe, North America, Asia (including China) and Africa as a percentage of total vehicle net revenues was 74.4%, 9.5%, 15.8% and 0.3%, respectively, compared to 19.6%, 73.8%, 6.5% and 0.1%, respectively, for the corresponding period in 2024.

For the three months ended September 30, 2025, net revenues from vehicle sales in Europe, North America, Asia (including China) and Africa as a percentage of total vehicle net revenues was 86.1%, 6.6%, 7.3% and nil, respectively, compared to 19.8%, 73.4%, 6.8% and 0.1%, respectively, for the corresponding period in 2024.

Cost of goods sold

The following table presents our cost of goods sold for continuing operations by amount and as a percentage of the total cost of goods sold for the periods presented.

Three Months ended September 30,
Nine Months ended September 30,
2025
2024
2025
2024
Amount
%
Amount
%
Amount
%
Amount
%
(Expressed in U.S. Dollars)
(Unaudited)
(Unaudited)
Cost of goods sold:
Vehicle Sales
$
(4,024,438
)
90.1
%
$
(7,557,993
)
76.1
%
$
(10,858,037
)
85.4
%
$
(11,885,232
)
66.6
%
Spare-part sales
(257,355
)
5.8
%
(472,425
)
4.8
%
(568,118
)
4.5
%
(2,257,515
)
12.7
%
Other sales
(58,098
)
1.3
%
(51,435
)
0.5
%
(209,252
)
1.6
%
(124,138
)
0.7
%
Inventory write-down
(127,009
)
2.8
%
(1,850,993
)
18.6
%
(1,078,846
)
8.5
%
(3,576,884
)
20.0
%
Total cost of goods sold
$
(4,466,900
)
100.0
%
$
(9,932,846
)
100.0
%
$
(12,714,253
)
100.0
%
$
(17,843,769
)
100.0
%

30
Cost of goods sold for the nine months ended September 30, 2025 was approximately $12.7 million, a decrease of approximately $5.1 million or approximately 28.7% from approximately $17.8 million for the nine months ended September 30, 2023.  The decrease of cost of goods sold was mainly caused by (i) the decrease in vehicle sales and spare-part sales of approximately $1.0 million and $1.7 million, respectively, due to the decrease of sales, (ii) the decrease of inventory write-down of approximately $2.5 million.

Cost of goods sold for the three months ended September 30, 2025 was approximately $4.5 million, a decrease of approximately $5.5 million or approximately 55.0% from approximately $10.0 million for the three months ended September 30, 2024. The decrease of cost of goods sold was mainly caused by  (i) the decrease in vehicle sales and spare-part sales of approximately $3.5 million and $0.5 million, respectively, due to the decrease of sales, (ii) the decrease of inventory write-down of approximately $1.7 million.

Gross Profit

Gross Profit for the nine months ended September 30, 2025 was approximately $0.4 million, a decrease of approximately $7.6 million from approximately $8.0 million of gross loss for the nine months ended September 30, 2024. For the nine months ended September 30, 2025 and 2024, our overall gross margin was approximately 3.1% and 31.1%, respectively. Our gross margin of vehicle sales for the nine months ended September 30, 2025 and 2024 was 1.2% and 33.1%, respectively. The decrease of our overall gross profit was mainly caused by the decrease in the gross profit of our vehicle sales and spare-part sales of approximately $7.5 million and $0.2 million, respectively, offset by the increase in the gross profit of other sales of approximately $0.1 million.

Gross Profit for the three months ended September 30, 2025 was approximately $0.1 million, a decrease of approximately $6.2 million from approximately $6.3 million of gross profit for the three months ended September 30, 2024. For the three months ended September 30, 2025 and 2024, our overall gross margin was approximately 2.3% and 38.8%, respectively. Our gross margin of vehicle sales for the three months ended September 30, 2025 and 2023 was 0.8% and 38.9%, respectively. The decrease of our overall gross profit was mainly caused by the decrease in the gross profit of our vehicle sales and spare-part sales of approximately $6.0 million and $0.3 million, respectively.

Selling and Marketing Expenses

Selling and marketing expenses for the nine months ended September 30, 2025 were approximately $1.8 million, a decrease of approximately $3.8 million or approximately 67.4% from approximately $5.6 million for the nine months ended September 30, 2024. The decrease in selling and marketing expenses in 2025 was primarily attributed to the decrease in marketing expenses, marketing related professional fee, share-based compensations and salary expense of approximately $2.7 million, $0.9 million, $0.1 million and $0.6 million, respectively, offset by the increase in after-sale services of approximately $0.6 million.

Selling and marketing expenses for the three months ended September 30, 2025 were approximately $0.8 million, a decrease of approximately $3.6 million or approximately 81.4% from approximately $4.4 million for the three months ended September 30, 2024. The decrease in selling and marketing expenses in 2025 was primarily attributed to the decrease in marketing expenses, salary expense, freight and marketing related professional fee of approximately $2.6 million, $0.4 million, $0.2 million and $0.7 million, respectively, offset by the increase in after-sale services of approximately $0.5 million.

General and Administrative Expenses

General and administrative expenses for the nine months ended September 30, 2025 were approximately $14.2 million, a decrease of approximately $5.9 million or approximately 29.3% from approximately $20.1 million for the nine months ended September 30, 2024. The decrease in general and administrative expenses in 2025 was primarily attributed to the decrease in in legal and professional fee, salary and social insurance expense, office expenses, travelling fee, freight, leasing cost, rental expense, others expense related to garage liability insurance and share-based compensations of approximately $0.5 million, $1.4 million, $1.0 million, $0.3 million, $0.4 million, $1.2 million, $0.3 million, $0.4 million and $0.5 million, respectively.

31
General and administrative expenses for the three months ended September 30, 2025 were approximately $4.1 million, a decrease of approximately $3.0 million or approximately 42.3% from approximately $7.1 million for the three months ended September 30, 2024. The decrease in general and administrative expenses in 2025 was primarily attributed to a decrease in legal and professional fee, leasing cost, office expense, travelling fee, freight, rental expense, leasehold improvement depreciation, others related to garage liability insurance and share-based compensation of approximately $0.5 million, $0.7 million, $0.5 million, $0.2 million, $0.3 million, $0.1 million, $0.2 million, $0.3 million and $0.1 million, respectively.

Research and Development Expenses

Research and development expenses for the nine months ended September 30, 2025 were approximately $2.0 million, a decrease of approximately $2.0 million or approximately 50.5% from approximately $3.9 million for the nine months ended September 30, 2023. The decrease in research and development expenses in 2025 was primarily attributed to the decrease in design and testing material expenditures, salary expense and miscellaneous expenses of approximately $0.6 million, $1.3 million and $0.1 million.

Research and development expenses for the three months ended September 30, 2025 were approximately $0.5 million, a decrease of approximately $0.9 million or approximately 63.0% from approximately $1.4 million for the three months ended September 30, 2024. The decrease in research and development expenses in 2025 was primarily attributed to the decrease in design and development expenditures and salary expense of approximately $0.4 million and $0.5 million, respectively.

Interest expense, net

Interest expense, net, mainly consists of interest expense on convertible bonds, offset by the interest income from deposit, short-term investment and unpaid purchases from HWE. Net interest expense was approximately $0.4 million for the nine months ended September 30, 2025, an increase of approximately $0.3 million compared to the approximately $0.06 million in interest expense for the nine months ended September 30, 2024. The increase was primarily attributable to the decrease in interest income from deposit of approximately $0.4 million, offset by the increase on interest income on short-term investment of approximately $0.03 million.

Interest expense, net, mainly consists of interest expense on convertible bonds, offset by the interest income from deposit, short-term investment and unpaid purchases from HWE. Net interest expense was approximately $ 0.1 million for the three months ended September 30, 2025, an increase of approximately $0.08 million compared to the approximately $0.03 million in interest expense for the three months ended September 30, 2024. The increase was primarily attributable to an increase in interest expense to convertible bonds of approximately $0.07 million, and (ii) the decrease on interest income from deposit of approximately $0.3 million, offset by the increase on interest income from short-term investment of approximately $0.2 million.

Other income (expense), net

Other income, net for the nine months ended September 30, 2025 was approximately $0.4 million, representing a change of approximately $1.2 million compared to approximately $0.8 million of other expense, net for the nine months ended September 30, 2024. The change of other income (expense) in 2025 compared to 2024 was primarily attributable to i) the decrease in loss on disposal of PPE, loss on investment and other loss of approximately $0.09 million, $0.6 million and $0.1 million, respectively, ii) an increase of approximately $0.3 million in litigation compensation from Fujian Newlongma Automotive Co., Ltd.

Other income, net for the three months ended September 30, 2025 was approximately $0.2 million, representing a change of approximately $0.8 million compared to approximately $0.6 million of other expense, net for the three months ended September 30, 2024. The change of other income (expense) in 2025 compared to 2024 was primarily attributable to the decrease in loss on investment of approximately $0.6 million.

32
Change in fair value of convertible promissory notes and derivative liability

A gain in the change in fair value of convertible promissory notes and derivative liability for the nine months ended September 30, 2025 was approximately $0.3 million.

A gain in the change in fair value of convertible promissory notes and derivative liability for the three months ended September 30, 2025 was approximately $0.4 million.

Change in fair value of equity securities

A gain in the change in fair value of equity securities for the nine months ended September 30, 2025 was approximately $0.8 million compared to approximately $0.8 million of a gain in the change in fair value of equity securities for the nine months ended September 30, 2024.

A gain in the change in fair value of equity securities for the three months ended September 30, 2025 was approximately $0.3 million compared to approximately $0.3 million of a gain in the change in fair value of equity securities for the three months ended September 30, 2024.

Loss from Note Amendment

The amount recorded as loss on extinguishment of convertible bonds amendment occurred in May, 2025, based on which the Parties agreed to materially change the terms and conditions of the original convertible bonds issued in July, 2022, refer to Note 15 for details. We considered the amendment as an extinguishment of the original convertible bonds.

A loss from Note Amendment for the nine months ended September 30, 2025 was approximately $1.8 million.

A loss from Note Amendment for the three months ended September 30, 2025 was nil.

Gain from disposal of Cenntro Electric CICS, SRL’s equity

A gain from disposal of Cenntro Electric CICS, SRL’s equity for the nine months ended September 30, 2025 was approximately $1.2 million.

A gain from disposal of Cenntro Electric CICS, SRL’s equity for the three months ended September 30, 2025 was nil.

Non-GAAP Financial Measures

Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024

In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA, a non-GAAP measure is useful in evaluating operational performance. We use Adjusted EBITDA to evaluate ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing operating performance.

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

33
We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations. Management uses Adjusted EBITDA:

•
as a measurement of operating performance because it assists us in comparing the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations;
•
for planning purposes, including the preparation of our internal annual operating budget and financial projections;
•
to evaluate the performance and effectiveness of our operational strategies; and
•
to evaluate our capacity to expand our business.

By providing this non-GAAP financial measure, together with the reconciliation, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate Adjusted EBITDA in the same manner. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our financial statements as indicators of financial performance. Some of the limitations are:


•
such measures do not reflect our cash expenditures;

•
such measures do not reflect changes in, or cash requirements for, our working capital needs;

•
although depreciation and amortization are recurring, non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and

•
the exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy.

Due to these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of stock-based compensation expense and material infrequent items. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and may complicate comparisons of our internal operating results and operating results of other companies over time. In addition, Adjusted EBITDA may include adjustments for other items that we do not expect to regularly occur in future reporting periods. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below helps management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is net loss:

Three Months ended September 30,
Nine Months ended September 30,
2025
2024
2025
2024
(Expressed in U.S. Dollars)
(Unaudited)
(Unaudited)
Net loss
$
(6,715,088
)
$
(8,981,587
)
$
(22,275,953
)
$
(27,405,605
)
Interest expense, net
112,706
34,198
387,790
58,744
Income tax benefit
(12,969
)
(12,334
)
(40,009
)
(29,082
)
Depreciation and amortization
556,839
630,270
1,662,764
1,605,514
Share-based compensation expense
687,674
870,095
2,147,262
2,643,214
Gain on exercise of warrants
-
(910
)
-
(910
)
Change in fair value of convertible promissory notes and derivative liability
(421,038
)
6,725
(283,748
)
(1,807
)
Gain from Note Amendment
-
-
1,756,137
-
Adjusted EBITDA
$
(5,791,876
)
$
(7,453,543
)
$
(16,645,757
)
$
(23,129,932
)

34
B. Liquidity and Capital Resources

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

As of September 30, 2025, we had approximately $4.4 million in cash and cash equivalents, approximately $1.6 million of accounts receivable. and approximately $24.3 million of inventory as compared to approximately $22.4 million in cash and cash equivalents, $3.5 million in accounts receivable, and $23.6 million in inventory as of September 30, 2024. For the nine months ended September 30, 2025 and 2024, net cash used in operating activities was approximately $10.8 million and $12.9 million, respectively.

Short-Term Liquidity Requirements

We are looking at measures to generate operating efficiency as well as increasing the inventory turns in containing the growth of working capital for reducing negative net cash used in operating activities. With the cash improvement initiatives, we believe our cash and cash equivalents will be sufficient for us to continue to execute our business strategy over the twelve months period following the date of issuance of this 10Q. Our current business strategy for the next twelve months includes (i) the continued rollout of our new ECV models in North America and Europe, as applicable, (ii) the establishment of local assembly facilities in the United States and the European Union and (iii) additional plants and equipment for the expansion of our Changxing factory 1 . Actual results could vary materially as a result of a number of factors, including:


•
The costs of bringing our new facilities into operation;

•
The timing and costs involved in rolling out new ECV models to market;

•
Our ability to manage the costs of manufacturing our ECVs;

•
The costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities;

•
Revenues received from sales of our ECVs;

•
The costs of additional general and administrative personnel, including accounting and finance, legal and human resources, as well as costs related to litigation, investigations, or settlements;

•
Our ability to collect future revenues; and

•
Other risks discussed in the section titled “Risk Factors.”

For the twelve months from the date hereof, we also plan to continue implementing measures to increase revenues and control operating costs and expenses, implementing comprehensive budget controls and operational assessments, implementing enhanced vendor review and selection processes as well as enhancing internal controls.

35
Long-Term Liquidity Requirements

In the long-term, we plan to regionalize the manufacturing and supply chain relating to certain components of our ECVs in several geographic markets. Through our supply chain development know-how, we intend to establish supply chain relationships especially in the North America to support anticipated manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially other landed costs elements associated with importing our components and spare parts from China. As part of our growth strategy, we plan to expand our channel partner network, and local assembly facilities to regionalize our manufacturing and supply chains to better serve our global customers, especially to expand our after-sales-market services offerings.

We intend to further expand our technology through continued investment in research and development. Since inception in 2013 through September 30, 2025, we have spent over approximately $96.3 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.

For our long-term business plan, we plan to fund current and future planned operations mainly through cash on hand, cash flow from operations, lines of credit and additional equity and debt financings to the extent available on commercially favorable terms.

1 NTD: Company to provide any additional business plans requiring material capital over the next twelve months.

Working Capital

As of September 30, 2025, our working capital was approximately $24.9 million, as compared to a working capital of approximately $36.8 million as of December 31, 2024. The approximately $11.9 million decrease in working capital during 2025 was primarily due to (i) the decrease of cash and cash equivalents, restricted cash, accounts receivable, prepayment and other current assets, accounts payable, contractual liabilities, operating lease liabilities, convertible bonds,  current assets held for discontinued operations and current assets held for discontinued operations of approximately $8.1 million, $0.2 million, $1.7 million, $1.0 million, $1.4 million, $0.4 million, $0.2 million, $2.5 million, $2.9 million and $0.3 million, and (ii) the increase in inventories, short-term loans, accrued expense and other current liabilities and amount due to related parties of approximately $0.3 million, $0.7 million, $1.6 million and $0.9 million.

Cash Flow

Nine Months ended September 30,
2025
2024
(Expressed in U.S. Dollars)
(Unaudited)
Net cash used in operating activities
$
(10,781,365
)
$
(12,912,011
)
Net cash (used in) provided by investing activities
(582,639
)
4,858,042
Net cash (used in) provided by financing activities
2,737,393
1,243,068
Effect of exchange rate changes on cash
205,487
70,752
Net (decrease) increase in cash, cash equivalents, and restricted cash
(8,421,124
)
(6,740,149
)
Cash and cash equivalents, and restricted cash at beginning of the period-continuing
12,820,459
22,667,378
Cash and cash equivalents, and restricted cash at beginning of the period-discontinued
140,029
6,904,519
Cash and cash equivalents, and restricted cash at end of the period-continuing
$
4,535,062
$
22,667,378
Cash and cash equivalents, and restricted cash at end of the period- discontinued
4,302
164,370

Operating Activities

Our net cash used in operating activities was approximately $10.8 million and $12.9 million for the nine months ended September 30, 2025 and 2024, respectively.

36
Net cash used in operating activities for the nine months ended September 30, 2025 was primarily attributable to (i) our net loss of approximately $22.3 million and adjusted for non-cash items of approximately $9.7 million, which primarily consisted of depreciation and amortization, amortization of operating lease right-of-use asset, impairment of slow-moving inventories, allowance for doubtful receivables, write-offs of doubtful receivables, foreign currency exchange loss, share based compensation expense, loss from debt extinguishment, change in fair value of convertible promissory notes and derivative liability, change in fair value of equity securities, loss from disposal of land use right and property, plant and equipment, loss from early termination of lease contract and loss from dilution of Cenntro Electric CICS, SRL’s equity of approximately $1.7 million, $2.0 million, $1.3 million, $4.1 million, $0.5 million, $1.2 million, $2.1 million, $1.8 million, $0.3 million, $0.8 million, $0.1 million, $0.5 million and $1.2 million respectively, (ii) the decrease in inventories, accounts receivable, prepayment and other current assets, accounts payable and operating lease liabilities of approximately $1.4 million, $0.3 million, $1.2 million, $1.6 million and $0.9 million, respectively, (iii) the increase in other non-current assets, amount due to related parties and accrued expense and other current liabilities of approximately $0.2 million, $0.1 million and $1.1 million, respectively.

Investing Activities

Net cash used in investing activities was approximately $0.6 million for the nine months ended September 30, 2025. Net cash used in investing activities for the nine months ended September 30, 2025 was primarily attributable to cash paid in purchase of plant and equipment of approximately $0.7 million, offset by the proceeds from disposal of property, plant and equipment of approximately $0.2 million.

Financing Activities

Net cash provided by financing activities was approximately $2.7 million for the nine months ended September 30, 2025. Net cash provided by financing activities for the nine months ended September 30, 2025 was primarily attributable to the proceeds from bank loans, related parties and third parties of approximately $1.7 million, $1.0 million and $1.4 million, offset by the repayment of loans to third parties of approximately $0.4 million, the repayment of loans to related parties of approximately $0.2 million and repayment to bank loan of approximately $0.8 million.

Contractual Obligations

In June 2021, we signed two non-cancellable operating lease agreements for approximately 11,700 square feet and 3,767 square feet, respectively, of two floors of an office building in Hangzhou, China. These two leases renewed on May 2025. The lease period for each lease agreement began in June 2025 and ends in May 2026. Pursuant to each agreement, we paid the first six months of our rent obligations in May 2025 and thereafter will be obligated to make rental payments in advance semi-annually. The total annual base rent under these two lease agreements is $144,528 for the term ending May 2026.

On February 16, 2022, we signed a non-cancellable operating lease agreement for apartment 53D in the building at 555 Tenth Avenue, New York, NY 10018. The term is one year and one month, beginning on March 5, 2022 and ending on April 4, 2023. The monthly rent is $5,750. On February 1, 2023, we signed a renewal lease agreement. The term of this lease is one year, beginning on April 5, 2023 and ending on April 4, 2024. The lease was not renewed after April 4, 2024. The monthly rent is $5,950.

On March 23, 2022, we completed the acquisition of TME, and change its name to Cenntro Automotive Europe GmbH (“CAE”). TME signed a non-cancellable operating lease agreement for approximately 5,212 square meters in 2019, the lease period starts on July 1, 2019 and ends on June 30, 2024, the monthly rent is €18,891 (or approximately $19,894).

On December 29, 2022, we signed a non-cancellable operating lease agreement with BAL Freeway Associates, LLC for approximately 64,000 square feet as a facility in Ontario, California. The lease period commenced on April 1, 2023 and ends five years following a one-month rent abatement period. The base rent for the first year is $115,200 per month. The monthly rent for the following four years is $119,808, $124,600.32, $129,584.33 and $134,767.71, respectively. The lease terminated on May 31, 2025.

On December 15, 2022, we signed a non-cancellable operating lease agreement for approximately 41,160 square feet as a facility in Howell, New Jersey. The lease period began on February 1, 2023 and ends five years, the first annual base rent is $493,920 and the annual increase is 3%.

37
On August 4, 2022, we signed a non-cancellable operating lease agreement in Mexico as a facility. For the first 12 months, the rentable area is 58,413 square feet. Starting on the month 13 to month 18, the rentable area is 85,554 square feet, and as of month 19 of the Rent Commencement Date and for the remainder of the initial term, the rentable area is 112,694 square feet. The lease period commenced on January, 2023 and ends 8.5 years. The monthly rent is $29,225.38 and the annual increase is the higher of a) the consumer price index, or b) 2.5%.

On September 1, 2024, we signed two non-cancellable operating lease agreements for approximately 5,398,050 square feet as office building and facility in Jiangsu, China. The lease period commenced on September 1, 2024 and ends on December 31, 2026. The total monthly rent is approximately $22,435.

On January 15, 2025, Antric signed a non-cancellable operating lease agreement for approximately 4,392 square feet in Bochum, Germany. The lease has no particular termination date. The monthly base rent is €3,616.29 (or approximately $4,243.72).

On March 25, 2025, we signed a non-cancellable operating lease agreement for approximately 100,860 square feet as a facility in Barstow, California. The lease period commenced on June 1, 2025 and ends three years. The base rent for the first year is $12,000 per month. The monthly rent for the following two years is $12,360 and $12,731, respectively.

On May 19, 2025, we signed a non-cancellable operating lease agreement for approximately 2,906 square feet as a shop in Barcelona, Spain. The lease period commenced on May 19, 2025 and ends eighteen months. The rent-free period is from May 19, 2025 to June 30, 2025. The monthly rent is €2,154 (or approximately $2,357) and the rent will be adjusted annually based on the Consumer Price Index (CPI) published by the Spanish National Bureau of Statistics.

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our Audited Financial Statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, the reported amounts of revenue and expenses during the reporting period and the related disclosures in the consolidated and combined financial statements and accompanying footnotes. Out of our significant accounting policies, which are described in “Note 2—Summary of Significant Accounting Policies” of our consolidated and combined financial statements for the nine months ended September 30, 2025, included elsewhere in this Semi-annual Report, certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2024, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of September 30, 2025 and for the three months and nine months ended September 30, 2025 and 2024 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

38
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, 2024. The results of operations for the three months and nine months ended September 30, 2025 are not necessarily indicative of the results for the full year or any future periods.

Use of estimates

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.

Fair value measurement

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 due to a related party, 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 due to a related party, current were approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from a related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

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

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

39
The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date.

The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities in the Company’s 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 and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.

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: i) private equity funds, which represent the investment in equity security on the unaudited condensed consolidated balance sheet; ii) wealth management products purchased from banks, which represents the available-for-sale investments in short-term investments on the unaudited condensed consolidated balance sheet.

Revenue recognition

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. Consideration is recorded net of sales returns and VAT. Sales returns is estimated based on historical experiences, which were insignificant for the nine months ended September 30, 2025 and 2024. The consideration is fixed, with no variable consideration. All transactions are settled in cash within the normal credit period, and there is no financing component.

40
Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses.

The following table disaggregated the Company’s revenues by product line for the nine months ended September 30, 2025 and 2024:

For the Nine Months ended
September 30,
2025
2024
(Unaudited)
(Unaudited)
Vehicles sales
$
12,389,471
$
25,483,836
Spare-parts sales
818,955
2,783,954
Other service income

302,380
176,041
Net revenues
13,510,806
28,443,831
Less: Net revenues, discontinued operation
(390,612
)
(2,555,785
)
Net revenues, continuing operation
$
13,120,194
$
25,888,046

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

For the Nine Months ended
September 30,
2025
2024
(Unaudited)
(Unaudited)
Primary geographical markets
Europe
$
9,732,252
$
7,260,544
Asia
2,494,237
4,080,473
America
1,250,477
17,071,721
Others
33,840
31,093
Net revenues
13,510,806
28,443,831
Less: Net revenues, discontinued operation
(390,612
)
(2,555,785)
Net revenues, continuing operation
$
13,120,194
$
25,888,046

Contract Balances

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

Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the nine months ended September 30, 2025 and 2024, the Company recognized $1,048,505 and $946,071 revenue that was included in contractual liabilities as of January 1, 2025 and 2024, respectively.

41
The following table provided information about receivables and contractual liabilities from contracts with customers:

September 30,
2025
December 31,
2024
(Unaudited)
(Unaudited)
Accounts receivable, net
$
2,874,308
$
4,688,322
Less: accounts receivable, net, held for discontinued operation
(1,276,020
)
(1,406,457
)
Accounts receivable, net, held for continuing operation
1,598,288
3,281,865
Contractual liabilities
$
3,783,681
$
4,202,001
Less: contractual liabilities, held for discontinued operation
(84,634
)
(80,696
)
Contractual liabilities, held for continuing operation
3,699,047
4,121,305

Recently issued accounting standards pronouncement

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 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ended December 31, 2024. The adoption has no significant impact on the Company’s financial statements and disclosure.

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

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis with optional retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

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

42
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

ITEM 4.
CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Roles 12a-15(e) or 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and acting Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

43
Material Weaknesses in Internal Control over Financial Reporting

There are inherent limitations on the effectiveness of any system of internal controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective internal controls and procedures can only provide reasonable assurance of achieving their control objectives.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Our management, with the participation of our CEO and acting CFO, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025, as required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act. Based on this evaluation, management concluded that the Company’s disclosure controls and procedures was not effective as of September 30, 2025, due to material weaknesses in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) that have been previously identified but continue to exist. See Part II, Item 9A of the 2024 Form 10-K for additional information.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the second quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Remediation

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. While management has taken steps to remediate these control weaknesses, the material weaknesses are still unresolved. Consequently, our internal control over financial reporting was not effective as of September 30, 2025.

Unless and until these material weaknesses are remediated, or if new material weaknesses arise in the future, material misstatements could occur and go undetected in our interim or annual Consolidated Financial Statements, and we may be required to restate our financial statements. In addition, we may experience delays in satisfying our reporting obligations or to comply with United States Securities and Exchange Commission rules and regulations, which could result in, among other things, regulatory or enforcement actions, securities litigation, limitations on our ability to access capital markets, debt rating agency downgrades or rating withdrawals, or loss in confidence of our investors, any one of which could adversely affect the valuation of our common stock and our business prospects. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting.

PART II

ITEM 1.
LEGAL PROCEEDINGS

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. Please refer to the description as contained in “Item 8 Financial Statements and Supplementary Data” on page F-1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and the information described below.

44
In June 2022, Sevic Systems SE (“Sevic”) filed for injunctive relief in a corporate court in Brussels, Belgium, alleging CAE infringement of Sevic’s intellectual property (“IP”) rights. The injunctive action was also directed against LEIE Center SRL (“LEIE”) and Cedar Europe GmbH (“Cedar”), two distribution partners of CAE. There, Sevic claims it acquired all IP rights to an electric vehicle, the so-called CITELEC model (“CITELEC”), fully and exclusively from the French company SH2M Sarl (“SH2M”) under Mr. Pierre Millet. Sevic claims these rights were acquired under a 2019 IP transfer agreement. According to Sevic, the METRO model (“METRO”) produced by Cenntro Electro Group Ltd. (“Cenntro”) and distributed by CAE derives directly from the CITELEC. The distribution of the METRO, therefore, allegedly infringes on Sevic’s IP rights. In its action, Sevic relies on (Belgian) copyright law and unfair business practices. On February 2, 2023, the president of the commercial court of Brussels rendered a judgment, declaring i) the claim against Cedar was inadmissible and ii) The main claim against CAE and LEIE was founded. According to the president’s opinion the CITELEC-model can enjoy copyright protection and determined it was sufficiently proven that Sevic acquired the copyrights of the CITELEC-model. The president then concluded that the distribution of the METRO-model in Belgium constituted a violation of article XI. 165 §1 of the Belgian Code of Economic Law and thereby ordered the cessation of the distribution of the METRO-model, a penalty in the form of a fine of EUR20,000.00 per sold vehicle in Belgium and EUR5,000.00 for each other infringement in Belgium after the judgement was served with a maximum fine of EUR500,000.00 for LEIE and EUR1,000,000.00 fine for CAE. Because CAE has not sold any METRO-models in Belgium, the Company believes the judgement is incorrect but has accrued the related liability according to the judgement made. On April 17, 2023 CAE filed a writ of appeal. The introductory hearing was scheduled for May 22, 2023. The judge did not give any legal assessment at the hearing. All parties have been granted deadlines for written pleadings. On January 29, 2025, CAE rejected the late delivered final writ by lawyers of Sevic, which should have been received by September 2, 2024. As of the date hereof, the Company believes is not possible to determine what the outcome of these proceedings will be.

On July 22, 2022, Xiongjian Chen (“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 the four 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 the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May 28, 2023, Plaintiff filed an amended complaint. On July 20, 2023 the Defendants filed a motion seeking the dismissal of that amended complaint. On September 22, 2023, the Plaintiff filed to oppose our Motion to Dismiss and Motion to Strike. The Defendants filed our reply briefs by the deadline on November 9, 2023. On January 25, 2024, the Magistrate Judge entered an Order granting Plaintiff’s Motion to Amend and denying our Motion to Strike as moot. On November 12, 2024, District Court issued an Order, dismissing Plaintiff’s all claims except with respect to the promissory estoppel claim against Peter Wang. On November 26, 2024, the defendants filed a Motion for Reconsideration of the Court’s denial of Cenntro’s Motion to Dismiss Plaintiff’s promissory estoppel claim against Peter Wang. Concurrently, on same date Plaintiff moved for reconsideration of the Court’s decision to dismiss the case as against CAG for lack of personal jurisdiction. On December 30, 2024, the Defendant filed a Reply in Further Support of Peter Wang’s Motion for Reconsideration, which, in accordance with the Court’s practices, was filed as part of a Motion for Leave to File a Reply Brief, against which the Plaintiff filed an Opposition on January 17, 2025. On May 30, 2025, the Court issued an order denying both sides’ respective motions for reconsideration. On June 10, 2025, Plaintiff’s counsel informed the Company that they do not intend to file a second amended complaint, which we believe 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. On July 14, 2025, Wang filed his answer to Plaintiff’s first amended complaint. At the in-person conference on August 19, 2025, the Court ordered deadlines for completing various stages of discovery in the case, with May 15, 2026 being the deadline for all fact discovery. We anticipate remote financial consequences will be incurred by the Company.

45
ITEM 1A.
RISK FACTORS

You should carefully consider the risks discussed in the section entitled “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could materially affect our business, financial condition, or future results. The risks described in the Form 10-K are not the only risks facing the company. Additional risks and uncertainties not currently known to us or that we do not currently deem material, may also materially adversely affect our business, results of operations, cash flows, and financial position.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There have been no sales of unregistered equity securities that we have not previously disclosed in filings with the U.S. Securities and Exchange Commission.

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.
MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.
OTHER INFORMATION

Trading Arrangements of Section 16 Reporting Persons.

During the quarter ended September 30, 2025, no person who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as amended, with respect to holdings of, and transactions in, the Company’s common shares (i.e. directors and certain officers of the Company) maintained, adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1(c) arrangement”, as those terms are defined in Section 229.408 of the regulations of the SEC.

ITEM 6.
Exhibits

EXHIBIT INDEX

Exhibit
No.
Description of Exhibit
Certification of Principal Executive Officer required by Rule 13a-14(a).
Certification of Principal Financial Officer required by Rule 13a-14(a).
Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.
101.INS*
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)

*
Filed herewith.
**
Furnished herewith.

46
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CENNTRO INC.
Dated: November 12, 2025.
CENNTRO INC.
By:
/s/ Peter Z. Wang
Peter Z. Wang
Chief Executive Officer
(Principal Executive Officer)
By:
/s/ Edward Ye
Edward Ye
Acting Chief Financial Officer
(Principal Accounting Officer)


47
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TABLE OF CONTENTS
Part IItem 1. Condensed Consolidated Financial Statements (unaudited)Note 1 Organization and Principal ActivitiesNote 1 Organization and Principal Activities (continued)Note 2 Summary Of Significant Accounting PoliciesNote 2 Summary Of Significant Accounting Policies (continued)Note 3 - Accounts Receivable, NetNote 4 - InventoriesNote 5 Prepayment and Other Current Assets, NetNote 6 Long-term InvestmentsNote 7 Investment in Equity SecurityNote 8 Property, Plant and Equipment, NetNote 9 Intangible Assets, NetNote 10 Accounts PayableNote 11 Accrued Expenses and Other Current LiabilitiesNote 12 Short-term and Long-term Bank LoansNote 13 - Income TaxesNote 14 - LeasesNote 15 - Convertible Promissory Note and WarrantNote 15 - Convertible Promissory Note and Warrant (continued)Note 16- Share-based CompensationNote 17 - ConcentrationsNote 17 Concentrations (continued)Note 18 - Commitments and ContingenciesNote 18 - Commitments and Contingencies (continued)Note 19 - Related Party Transactions and BalancesNote 19 - Related Party Transactions and Balances (continued)Note 20 - Subsequent EventItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart IIItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Mine Safety DisclosuresItem 5. Other InformationItem 6. Exhibits

Exhibits

31.1* Certification of Principal Executive Officer required by Rule 13a-14(a). 31.2* Certification of Principal Financial Officer required by Rule 13a-14(a). 32.1** Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.