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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-06-30 · 1245 added, 1303 removed, 1201 unchanged (68% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief

Executive Officer (the Company’s principal executive officer and interim principal accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of

the end of the period covered by this report.

Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed

by the Company in the reports that the Company files or submits 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 the Company’s management, including Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Chief Executive Officer (the Company’s principal executive officer and interim principal accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the

end of the period covered by this report.

Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the

Company in the reports that the Company files or submits 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 the Company’s management, including Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)

under the Exchange Act.

Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in

accordance with U.S.

Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our

provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S.

GAAP, and that our receipts and expenditures are being made only in accordance with the

authorization of our Board and management;

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) under the

Exchange Act.

reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S.

GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our

Board and management;

and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Any system of internal control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met.

Because of the inherent limitations in all internal control systems, no system of internal control over financial reporting can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been

the inherent limitations in all internal control systems, no system of internal control over financial reporting can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting.

Based on this

evaluation, management concluded that Cenntro has limited accounting personnel and other resources with which to address its internal control over financial reporting in accordance with requirements applicable to public companies.

Historically, Cenntro had not retained a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters under U.S.

Based on this evaluation, management concluded that Cenntro has limited

accounting personnel and other resources with which to address its internal control over financial reporting in accordance with requirements applicable to public companies.

Historically, Cenntro had not retained a sufficient number of professionals

with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters under U.S.

Management’s Remediation Initiatives

Management has taken- and is continuing to take-actions to remediate our material weakness and strengthen our internal control over our

financial reporting and risk management.

To that end, in April 2021, we hired an experienced officer, Mr.

Edmond Cheng to be our Chief Financial Officer.

As a result of the Combination, Management has taken- and is continuing to take-actions to remediate our material weakness and is taking steps to strengthen our internal control over financial reporting and risk management.

In 2022, we steadily

increased our finance team resources based in our Freehold, NJ, headquarters.

Management has taken- and is continuing to take-actions to remediate our material weakness and strengthen our internal control over our financial reporting and risk management.

2022, we steadily increased our finance team resources based in our Freehold, NJ, headquarters.

Also in in January 2022, we appointed our Financial Controller for North America who is a CPA license holder.

As of the date of this report, we have a total of six professionals on our finance team in the United States including three

certified public accountants (CPAs) and one staff accountant with public accounting experience who has passed their CPA exams.

As of the date of this report, we have a total of four professionals on our finance team in the United States including two certified public accountants (CPAs) and one staff

accountant with public accounting experience who has passed their CPA exams.

We intend to hire additional professional accountants with greater familiarity with U.S.

GAAP and SEC reporting

requirements.

Additionally, we have retained a consulting firm to assist us in assessing our compliance with The Sarbanes-Oxley Act to help us (i) further develop and implement formal policies, processes and documentation procedures relating

to our financial reporting as well as (ii) address the accounting function’s staffing needs and training and strengthen our internal control processes.

Our material weakness will not be considered remediated until management completes the

design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded that these controls are effective.

GAAP and SEC reporting requirements.

Additionally, we have retained a consulting

firm to assist us in assessing our compliance with The Sarbanes-Oxley Act to help us (i) further develop and implement formal policies, processes and documentation procedures relating to our financial reporting as well as (ii) address the accounting

function’s staffing needs and training and strengthen our internal control processes.

Our material weakness will not be considered remediated until management completes the design and implementation of the measures described above and the controls

operate for a sufficient period of time and management has concluded that these controls are effective.

Changes in Internal Controls over financial reporting

No change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect,

our internal control over financial reporting.

No change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2023 that has materially affected, or is reasonably likely to materially

affect, our internal control over financial reporting.

Other Information.

During the year ended December 31, 2023, no director or officer adopted or terminated a “Rule 10b5-1

trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

The Company has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers and employees, or the registrant itself, that

have been designed to promote compliance with insider trading laws, rules and regulations, and Nasdaq’s listing standards.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Chief Executive Officer, Managing Director and Chairman of the Board

Chief Financial Officer

Marianne McInerney

Chief Marketing Officer

Acting Chief Financial Officer

Chief Technology Officer

Vice President, Corporate Affairs and Corporate Secretary

Corporate Secretary

Non-Executive Directors:

Christopher Thorne (1)(2)(3)

Stephen Markscheid (1)(2)(3)

Jiawei “Joe” Tong (1)(2)(3)

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Wang, founded CAG, the former parent company of Cenntro, and served as its Chairman and Chief Executive Officer since 2013.

Wang began serving as Managing Director, Chairman of the Board, and Chief Executive Officer of the Company immediately following the closing of the Combination in December 2021.

Wang is an entrepreneur and investor in the electric

vehicle and technology industries, and has founded or co-founded a number of companies in his career, including UTStarcom (a global telecom infrastructure provider), which went public in 2000, World Communication Group, an international

telecommunication company, and Sinomachinery Group, a diesel power system (engine and transmission) manufacturer.

Wang was named one of the Outstanding 50 Asian Americans in Business by Asian American Business Development Center in

2004, one of China’s 100 Most Innovative Businessmen by Fast Company Magazine in 2017, and one of the Most Intriguing Entrepreneurs by Goldman Sachs in 2019.

Wang is also the chairman of the board of directors of Cenntro Enterprise

Limited, a principal stockholder of the Company, and Greenland Technologies Holding Corp.

Wang began serving as

Managing Director, Chairman of the Board, and Chief Executive Officer of the Company immediately following the closing of the Combination in December 2021.

Wang is an entrepreneur and investor in the electric vehicle and technology industries,

and has founded or co-founded a number of companies in his career, including UTStarcom (a global telecom infrastructure provider), which went public in 2000, World Communication Group, an international telecommunication company, and Sinomachinery

Group, a diesel power system (engine and transmission) manufacturer.

Wang was named one of the Outstanding 50 Asian Americans in Business by Asian American Business Development Center in 2004, one of China’s 100 Most Innovative Businessmen by

Fast Company Magazine in 2017, and one of the Most Intriguing Entrepreneurs by Goldman Sachs in 2019.

Wang is also the chairman of the board of directors of Cenntro Enterprise Limited, a principal stockholder of the Company, and Greenland

Technologies Holding Corp.

GTEC), a transmission products manufacturing company.

Wang holds Bachelor of Science degrees in Computer Science and Math, as well as a

Master of Science degree in Electrical Engineering, from the University of Illinois at Chicago.

Wang holds Bachelor of Science degrees in Computer Science and Math, as well as a Master of Science degree in Electrical Engineering, from the University of

Illinois at Chicago.

Wang also holds a Master of Business Administration from Nova Southeastern University.

We believe Mr.

Wang is qualified to serve on our

Board due to his extensive leadership and management experience, including his experience serving as founder and Chairman and Chief Executive Officer of CAG.

Edmond Cheng, has served as Cenntro’s President and Chief Financial Officer since April 2021 and became Chief Financial Officer of the

Company immediately following the closing of the Combination in December 2021.

Prior to joining Cenntro, Mr.

Cheng served as the Chief Financial Officer and a Partner of Mithera Capital Management LLC from August 2017 to March 2021.

Cheng was the Chief Financial Officer (Worldwide) of Pactera Technology International Ltd., a leading global IT software and services company, from January 2015 to July 2017.

From 2009 to 2015, Mr.

Cheng served as the Chief Financial

Officer for publicly listed companies including Zoomlion, a Chinese manufacturer of construction machinery and sanitation equipment, UTStarcom, Inc., a global telecom infrastructure provider, and TCL Multimedia Technology Holdings Ltd, a

Chinese manufacturer of televisions and other consumer electronics.

Cheng previously served as the Chief Financial Officer of portfolio companies owned by private equity companies including Temasek Holdings, Hony Capital/Goldman Sachs,

and Blackstone Group.

Cheng brings to the Company extensive financial management expertise in East Asian and U.S.

capital markets, corporate development, cross-border mergers & acquisitions, corporate governance, treasury, and

investors relations.

Cheng received his Executive Master of Business Administration jointly offered by Columbia University, London Business School, and University of Hong Kong in May 2012.

He received a Master of Accounting and a

Bachelor of Business Administration from the University of Hawaii.

Cheng is a member of the American Institute of Certified Public Accountants.

Marianne McInerney, has served as Cenntro’s Executive Vice President and Chief Marketing Officer since June 2021 and became Chief Marketing

Officer of the Company immediately following the closing of the Combination in December 2021.

From 2017 to 2020, Ms.

McInerney was the Assistant Secretary and Director of Public Relations for the U.S.

Department of Transportation and served

under Secretary of Transportation Elaine Chao.

McInerney served as Executive Vice President of CAC, a wholly owned subsidiary, from October 2013 to October 2015.

McInerney was Executive Vice President of GreenTech Automotive, a

subsidiary of WM Industries Corp., from March 2012 to October 2013 and from October 2010 through March 2012, Ms.

McInerney served as Chief Operating Officer at PHC, a North American distribution company focused on bringing Chinese vehicles

McInerney served as a strategic consultant to Azure Dynamics to support the relaunch of the Ford Transit Connect EV, where she was responsible for market positioning, product strategy, and aligning sales strategies

with corporate revenue goals.

McInerney has been immersed in the Automotive and Transportation industry for almost two decades, during which time she has advised multiple original equipment manufacturers on go-to-market strategies,

pricing, marketing, branding and sales, product development and business development and operations.

McInerney is a former President of the American International Automobile Dealers Association, which represents over 11,000 dealer

organizations in the United States on matters ranging from trade, taxation, environment and operations.

McInerney received her bachelor’s degree in Political Science from the University of Dayton.

Wei Zhong, has been Cenntro’s Chief Technology Officer since 2013 and became our Chief Technology Officer immediately following the closing

of the Combination in December 2021.

Wang is qualified to serve on our Board due to his extensive leadership and management experience, including his experience

serving as founder and Chairman and Chief Executive Officer of CAG.

Edward Ye, has served as Cenntro’s Financial Director since December 2019 and became Acting Chief Financial Officer of the Company in March 2024.

joining Cenntro, Mr.

Ye was a Senior Associate at Deloitte Touche Tohmatsu Limited (“Deloitte”) from September 2012 to August 2017 where he assisted in the completion of initial public offerings in the US and Hong Kong.

At Deloitte, Mr.

multitude of clients in industries such as education, manufacturing, energy and resources, retail, customer service, real estate, transportation, and telecommunications.

Ye earned a Bachelor’s degree in Accounting from Hong Kong Baptist

University and a Master of Science in Corporate Finance from Bayes Business School of the City, University of London, (formally known as, the Case Business School).

Wei Zhong, has been Cenntro’s Chief Technology Officer since 2013 and became our Chief Technology Officer immediately following the closing of the Combination in

December 2021.

Zhong has been instrumental in the development of our electric vehicle technologies and models, as well as the development of its supply chain.

Prior to 2013, Mr.

Zhong was employed with Hangzhou

Jiuru Economic Information Consulting Co., Ltd., where he developed software for its enterprise information query platform.

Zhong was employed with Hangzhou Jiuru Economic Information

Consulting Co., Ltd., where he developed software for its enterprise information query platform.

Prior to that time, Mr.

Zhong served as a communication technology developer for Zhejiang Guangtong Network

Technology Co., Ltd.

Zhong holds a bachelor’s degree in Biotechnology from Zhejiang University.

Tsai, has served as Vice President, Corporate Affairs of CAC, a wholly owned subsidiary, since July 2013 and was appointed Vice

President, Corporate Affairs and Company Secretary of CEG, a wholly owned subsidiary, in July 2021.

Tsai was appointed our Vice President, Corporate Affairs and Company Secretary immediately following the closing of the Combination in

December 2021.

Since April 2007, Mr.

Zhong served as a communication technology developer for Zhejiang Guangtong Network Technology Co., Ltd.

Zhong holds a

bachelor’s degree in Biotechnology from Zhejiang University.

Tsai, has served as Vice President, Corporate Affairs of CAC, a wholly owned subsidiary, since July 2013 and was appointed Vice President, Corporate

Affairs and Company Secretary of CEG, a wholly owned subsidiary, in July 2021.

Tsai was appointed our Vice President, Corporate Affairs and Company Secretary immediately following the closing of the Combination in December 2021.

Since April 2007,

Tsai has also been a real estate advisor at Winzone Realty, Inc.

From 2007 to 2009, Mr.

Tsai served as Compliance Director and an investment banker at CapLink Financial Group, LLC, where he managed

broker dealer compliance, supervised sales teams and provided strategic advice.

Tsai served as Compliance Director and an investment banker at CapLink Financial Group, LLC, where he managed broker dealer compliance, supervised sales teams

and provided strategic advice.

From 2006 to 2007, Mr.

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Since joining CAC, Mr.

Tsai has been involved in corporate and communications

strategy and global regulatory matters.

Tsai holds a bachelor’s degree in Business Administration, with a focus on International Sales Marketing, from Baruch College, City University of New York.

Tsai has been involved in corporate and communications strategy and global regulatory matters.

bachelor’s degree in Business Administration, with a focus on International Sales Marketing, from Baruch College, City University of New York.

Ming He, was appointed as Cenntro’s Treasurer in May 2022.

He joined Cenntro Automotive Group, the predecessor of CEGL as Chief

Financial Officer in February 2014.

He joined Cenntro Automotive Group, the predecessor of CEGL as Chief Financial Officer in February

Before his role at CAG, he served as the Chief Financial Officer of Shengkai Innovations, Inc.

from March 2010 through April 2012, which completed its Nasdaq listing and public offerings.

Between January

2007 and February 2010, Mr.

He served as Chief Financial Officer of Zhongchai Machinery, Inc.

Between January 2007 and February 2010, Mr.

Chief Financial Officer of Zhongchai Machinery, Inc.

From October 2004 until January 2007, Mr.

He served as Senior Director at SORL Auto Parts, Inc.

(“SORL"), where he guided SORL’s progress in the

US capital market and closed a public offering in November 2006.

(“SORL"), where he guided SORL’s progress in the US capital market and closed a public offering in

November 2006.

He holds designations of Chartered Financial Analyst and Certified Public Accountant.

He received his Master of Science in Accountancy in 2004 and Master of Business

Administration in 2003 from University of Illinois at Urbana-Champaign.

He received his Master of Science in Accountancy in 2004 and Master of Business Administration in 2003 from University of Illinois at

Urbana-Champaign.

He also received his bachelor’s degree from Shanghai University of International Business and Economics (f.k.a.

Shanghai Institute of Foreign Trade) in 1992.

Zauner, was appointed as Corporate Secretary in December 2022.

Zauner has over five years of experience in assuming

numerous external board appointments across a wide range of industries, where he has advised international and domestic entities on Australian corporate law, governance, and tax compliance.

Zauner is currently the sole trustee and

fiduciary to a fund established by a large Australian mining company.

Prior to working in governance and compliance, Mr.

Zauner acted as a senior tax lawyer at MinterEllison from 2009 to 2016 and as a senior manager at KPMG from 2016 to

Both positions were held in Australia.

Zauner holds a Master of Taxation from the University of New South Wales, a Bachelor of Laws (Hons) from Bond University, and a Certificate in Applied Taxation from the Tax Institute of

Zauner is also a solicitor of the High Court of Australia, an Associate of the Governance Institute of Australia, and a member of the Australian Institute of Company Directors.

The Company believes Mr.

Zauner’s extensive

experience in management and corporate tax compliance with global and Australian-based companies makes him well-suited to serve as an officer of the Company.

Non-Employee Directors

Yi Zeng, became a member of our Board on September 16, 2022 after the resignation of a former board member.

Zeng has over 30 years’ experience in the energy industry, management, marketing and research.

over 30 years’ experience in the energy industry, management, marketing and research.

From 2016 to 2017, Dr.

Zeng served as a non-executive Director of an energy company Range Resources Pty.

Ltd, a former

public company that was listed on both the London and Australian Stock Exchanges.

Ltd, a former public company that was listed on both the

London and Australian Stock Exchanges.

He retired thereafter to enjoy family life.

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Zeng served as an independent consultant for Kori Ltd.

From 2011 to 2012, he was the

managing director of Lomon Pty.

a former public company that was listed on the Australian Stock Exchange.

From 2011 to 2012, he was the managing director of Lomon Pty.

a former public

company that was listed on the Australian Stock Exchange.

From 2007-2009, Dr.

Zeng was the Asia Pacific Regional Marketing Manager of Titanium, BHP Billiton Shanghai, a global energy and

mining company.

Zeng was the Asia Pacific Regional Marketing Manager of Titanium, BHP Billiton Shanghai, a global energy and mining company.

Prior to that Dr.

Zeng served as a Principle and Senior Scientist at BHP Exploration & Mining Technology in Melbourne, Australia from 2000 to 2007.

Zeng served as a Principle

and Senior Scientist at BHP Exploration & Mining Technology in Melbourne, Australia from 2000 to 2007.

Yi Zeng holds a Ph.D.

in Geophysics from Victoria University of

Wellington, New Zealand;

an MSc in Applied Geophysics Exploration from Chengdu College of Geology, China;

in Geophysics from Victoria University of Wellington, New Zealand;

an MSc in Applied Geophysics Exploration from

Chengdu College of Geology, China;

and a BSc in Geophysical Exploration from Chengdu University of Technology, China.

The Company believes Dr.

Zeng’s extensive

experience in management, technical, and research with global and Australian-based companies makes him well suited to serve as a member of the Board.

Christopher Thorne, became a member of our Board following the closing of the Combination on December 30, 2021, and serves on each of our

audit committee, compensation committee and nominating committee.

Thorne has served as Chairman of the Board of Broadline Capital, a global private equity firm focused on growth capital and impact investments primarily in Asia and North

America, since 2005.

Thorne has been the Chairman of the Board for Cytonus Therapeutics since November 2019, Endosphere, Inc.

since December 2010 and has been the Chairman of the Board of Powermers, Inc.

since January 2010.

received his Juris Doctor from Harvard Law School with honors, Master of Business Administration from Harvard Business School with final year honors, and a bachelor’s degree from Harvard University, magna cum laude , where he founded the Harvard Negotiation Law Review and served as president of the university-wide student government.

We believe Mr.

Thorne is qualified to serve on our

Board due to his substantial private equity and board of directors experience.

Jiawei “Joe” Tong, became a member of our Board following the closing of the Combination on December 30, 2021, and serves on each of our

audit committee, compensation committee and nominating committee.

Zeng’s extensive experience in management, technical, and research with global and Australian-based

companies makes him well suited to serve as a member of the Board.

Stephen Markscheid, became a member of our Board on November 1, 2023, and serves on each of our audit committee, compensation committee and nominating committee.

Markscheid has been the Managing Principal of Aerion Capital, a family office, since July 2022.

He currently serves as independent non-executive director of six other publicly listed companies:

FANH), a financial services

provider (since 2007);

Jinko Solar Inc.

JKS), a solar panel manufacturer (since 2010);

Kingwisoft Technology Services Ltd.

8295.HK), an information technology company (since 2016);

Monterey Capital Acquisition Corporation (Nasdaq:

MCAC), a special purpose acquisition company (since 2022);

Four Leaf Acquisition Corporation (Nasdaq:

FORL), a special purpose acquisition company (since 2023);

and Tristar Acquisition I Corp.

TRIS), a special purpose acquisition company

(since 2023).

Markscheid previously served as a director of UGE International (XTSX:UGE), a solar installation company from August 2019 to July 2023.

He is also a trustee emeritus of Princeton-in-Asia.

From 1998 to 2006, he worked for GE Capital.

During his time with GE Capital, Mr.

Markscheid led GE Capital’s business development activities in China and Asia Pacific, primarily acquisitions and direct investments.

Prior to GE Capital, Mr.

Markscheid worked with the Boston Consulting Group

throughout Asia.

He was a banker for ten years in London, Chicago, New York, Hong Kong and Beijing with Chase Manhattan Bank and First National Bank of Chicago.

Markscheid began his career with the US-China Business Council, in Washington D.C.

He earned a BA in East Asian Studies from Princeton University in 1976, an MA in international affairs from Johns Hopkins University in 1980, and an MBA from Columbia University in 1991, where he was class valedictorian.

We believe that

Markscheid’s extensive experience serving on public boards and working with technology companies makes him a qualified to serve on our board of directors.

Jiawei “Joe” Tong, became a member of our Board following the closing of the Combination on December 30, 2021, and serves on each of our audit committee,

compensation committee and nominating committee.

Tong co-founded MeetChina, a leading B2B e-commerce website for China in 1998 and served as its Chief Executive Officer and Director from 1998 to 2003.

joined Telstra Sensis as its President of China, and helped build Fang.com (NASDAQ:

Tong joined Telstra Sensis as

its President of China, and helped build Fang.com (NASDAQ:

SFUN), a leading real-estate company website in China, and Autohome Inc.

ATHM), a leading automotive company website.

Tong joined Ford

Motor Company as its Head of Smart Mobility, China.

Tong holds a bachelor’s degree in Computational Mathematics from Nanjing University, and a Master of Business Administration in Finance and Strategic Marketing from the University of

Pennsylvania’s Wharton School of Business.

We believe Mr.

Tong joined Ford Motor Company as its Head of Smart

Mobility, China.

Tong holds a bachelor’s degree in Computational Mathematics from Nanjing University, and a Master of Business Administration in Finance and Strategic Marketing from the University of Pennsylvania’s Wharton School of Business.

Tong is qualified to serve on our Board due to his past experience with business-to-business enterprises and in the automotive industry.

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Since February 2019, Mr.

Ge has been the

Chief Financial Officer of New Century Science & Technology Limited.

the Chief Financial Officer of New Century Science & Technology Limited.

Ge was a Managing Director at Citic Capital Holdings Limited, an alternative investment management and advisory company, from 2016 to 2019.

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from 2005 to 2007.

Ge received a Bachelor of Economics degree from Southern China Normal University in 1989, as well as an

Associate Diploma of Business in International Trade in 1991, a Post-Graduate Diploma of Finance in 1994, and a Master of Finance degree in 2001 from Royal Melbourne Institute of Technology.

He is member of the Securities Institute of

The Company believes Mr.

Ge received a Bachelor of Economics degree from Southern China Normal University in 1989, as well as an Associate

Diploma of Business in International Trade in 1991, a Post-Graduate Diploma of Finance in 1994, and a Master of Finance degree in 2001 from Royal Melbourne Institute of Technology.

He is member of the Securities Institute of Australia.

Ge is qualified to serve on our Board due to his extensive experience in private equity and corporate finance matters.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.

Our officers are appointed by

our board of directors and hold office until removed by the board.

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws.

Our officers are

appointed by our board of directors and hold office until removed by the board.

Board Committees

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We have adopted a charter for each of the three committees.

our committee charters are posted on our corporate investor relations website.

Copies of our committee charters are posted on our corporate investor relations website.

Each committee’s members and functions are described below.

Audit Committee.

Our Audit Committee consists of Christopher Thorne, Jiawei “Joe” Tong and Benjamin B.

Thorne is the chairman of our audit committee.

determined that these directors satisfy the “independence” requirements of NASDAQ Rule 5605 and Rule 10A-3 under the Securities Exchange Act of 1934.

Our Audit Committee consists of Stephen Markscheid, Jiawei “Joe” Tong and Benjamin B.

Tong is the chairman of our audit committee.

have determined that these directors satisfy the “independence” requirements of NASDAQ Rule 5605 and Rule 10A-3 under the Securities Exchange Act of 1934.

Our board of directors has determined that Mr.

Thorne qualifies as an audit committee

financial expert and has the accounting or financial management expertise as required under Item 407(d)(5)(ii) and (iii) of Regulation S-K.

The audit committee will oversee our accounting and financial reporting processes and the audits of

the financial statements of our company.

Thorne qualifies as an audit committee financial

expert and has the accounting or financial management expertise as required under Item 407(d)(5)(ii) and (iii) of Regulation S-K.

The audit committee will oversee our accounting and financial reporting processes and the audits of the financial

statements of our company.

The audit committee is responsible for, among other things:

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discussing the annual audited financial statements with management and the independent auditors;

reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk

reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

reviewing and approving all proposed related party transactions;

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Compensation Committee.

Our Compensation Committee consists of Christopher Thorne, Jiawei “Joe” Tong and Benjamin B.

Tong is the chairman of our compensation

Our Compensation Committee consists of Stephen Markscheid, Jiawei “Joe” Tong and Benjamin B.

Tong is the chairman of our

compensation committee.

The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.

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Nomination Committee.

Our Nomination Committee consists of Christopher Thorne, Jiawei “Joe” Tong and Benjamin B.

Tong is the chairman of our nomination committee.

Our Nomination Committee consists of Stephen Markscheid, Jiawei “Joe” Tong and Benjamin B.

Tong is the chairman of our nomination

The nomination committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.

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making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board;

advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and

regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.

advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to

the board on all matters of corporate governance and on any remedial action to be taken.

Family Relationships

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Certain Legal Proceedings

To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.

To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past

Code of Ethics

The Company adopted a Code of Ethics applicable to its directors, officers, and employees.

This includes our principal executive officer, principal financial officer, and

principal accounting officer or controller, or persons performing similar functions.

This includes our principal executive officer, principal financial officer, and principal accounting officer or

controller, or persons performing similar functions.

The full text of our Code of Ethics is posted on our website at https://ir.cenntroauto.com/static-files/fd697ea5-17b6-4536-bfe2-5539e84305f3 .

Compensation Recovery Policy

Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those

improper payments from our executive officers.

The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have

misstated its financial results.

Our Board s approved the adoption of the Executive Compensation Recovery Policy (the “Recovery Policy”) in order to comply with the clawback rules adopted by the SEC under the

rule, and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Recovery Rules”).

The Recovery Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from our current and former executive officers as defined in Rule

10D-1 under the Exchange Act (“Covered Officers”) in the event that we are required to prepare an accounting restatement, in accordance with the Recovery Rules.

The recovery of such compensation applies regardless of whether a Covered Officer engaged

in misconduct or otherwise caused or contributed to the requirement of an accounting restatement.

Under the Recovery Policy, our Board may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period

of the three completed fiscal years preceding the date on which we are required to prepare an accounting restatement.

Executive Compensation.

We are an emerging growth company, as defined in the JOBS Act.

As an emerging growth company, we will be exempt from certain requirements related to executive compensation, including, but not limited to, the

requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our

As an emerging growth company, we will be exempt from certain requirements related to executive compensation, including, but not limited

to, the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our

employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

This section provides an overview of CEG’s executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary

This section provides an overview of Cenntro’s executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary

compensation table below.

For the year ended December 31, 2022, CEG’s named executive officers (“Named Executive Officers” or “NEOs”) were:

For the year ended December 31, 2023, Cenntro’s named executive officers (“Named Executive Officers” or “NEOs”) were:

Wang, Chief Executive Officer;

Wei Zhong, Chief Technology Officer;

Edmond Cheng, Chief Financial Officer;

The objective of CEG’s compensation program is to provide a total compensation package to each NEO that will enable CEG to attract, motivate and retain outstanding individuals, align the interests of our

executive team with those of our equity holders, encourage individual and collective contributions to the successful execution of our short- and long-term business strategies and reward NEOs for performance.

Edmond Cheng, Former Chief Financial Officer;

Ming He, Treasurer;

Tsai, Corporate Secretary.

The objective of Cenntro’s compensation program is to provide a total compensation package to each NEO that will enable Cenntro to attract, motivate and retain outstanding individuals, align the

interests of our executive team with those of our equity holders, encourage individual and collective contributions to the successful execution of our short- and long-term business strategies and reward NEOs for performance.

Name and Principal Position

Chief Executive Officer

Chief Financial Officer

Marianne McInerney

Chief Marketing Officer

Represents the amount paid to Mr.

Wang during the year ended December 31, 2021.

Wang was entitled to receive $10,000 per month from January 1, 2021 until July 1, 2021.

Wang’s compensation was increased to $350,000 per year and was paid $29,167 per month through the end of the year.

Represents the amount paid to Mr.

Wang during the year ended December 31, 2022.

Former Chief Financial Officer

Corporate Secretary

On May 3, 2022, Mr.

Wang was granted an option to purchase 3,500,000 Ordinary Shares of the Company under the its 2022 Stock Incentive Plan (the “2022 Plan”), with an exercise price

per share equal to $1.8480 per share of incentive stock options and $1.6800 per share of non-statutory stock options, which is equal to the price per Ordinary Share of the Company on the date of grant of the option, out of which

656,250 options have been vested during the year ended December 31, 2022, fair value of which is represented here.

Represents the amount paid to Mr.

Cheng for services rendered as Chief Financial Officer between April and December 2021.

Represents the amount paid to Mr.

Cheng during the year ended December 31, 2022

Wang was granted an option to purchase 350,000 shares of common stock of the Company under the former 2022 Stock Incentive Plan (the “2022 Plan”), with an exercise price per share equal to

$1.8480 per share of incentive stock options and $1.6800 per share of non-statutory stock options, which is equal to the price per share of common stock of the Company on the date of grant of the option, out of which 87,500 and 65,625 options

vested during the years ended December 31, 2023, and December 31, 2022, fair value of which is represented here, respectively.

Cheng terminated his service as CFO to the Company as of March 1, 2024.

On December 30, 2021, Mr.

Cheng was granted an option to purchase 1,297,063 Ordinary Shares under the 2022 Plan, with an exercise price per share equal to $5.74 per share, which is

equal to the price per Ordinary Share of the Company on the date of grant of the option.

The option grant, and adjustment of exercise price to $1.6800 per share, were approved by shareholders at the Annual General Meeting on May 31,

2022, out of which 324,264 options have been vested during the year ended December 31, 2022, fair value of which is represented here.

On May 3, 2022, Ms.

McInerney was granted an option to purchase 600,000 Ordinary Shares under the 2022 Plan, with an exercise price per share equal to $1.6800 per share, which is

equal to the price per Ordinary Share of the Company on the date of grant of the option.

The option grant was approved by shareholders at the Annual General Meeting on May 31, 2022, out of which 112,500 options have been vested during

the year ended December 31, 2022, fair value of which is represented here.

Cheng was granted an option to purchase 129,706 shares of common stock under the 2022 Plan, with an exercise price per share equal to $5.74 per share, which is equal to the price per share

of common stock of the Company on the date of grant of the option.

The option grant, and adjustment of exercise price to $1.6800 per share, were approved by shareholders at the Annual General Meeting on May 31, 2022, out of which 32,428 and

32,426 options have been vested during the years ended December 31, 2023, and December 31, 2022, fair value of which is represented here, respectively.

On May 3, 2022, Mr.

He was granted an option to purchase 15,000 shares of common stock of the Company under the former 2022 Stock Incentive Plan (the “2022 Plan”), with an exercise price per share equal to $16.800

per share, which is equal to the price per share of common stock of the Company on the date of grant of the option, out of which 3,752 and 2,814 options vested during the years ended December 31, 2023, and December 31, 2022, fair value of

which is represented here, respectively.

On May 3, 2022, Mr.

Tsai was granted an option to purchase 15,000 shares of common stock of the Company under the former 2022 Stock Incentive Plan (the “2022 Plan”), with an exercise price per share equal to $16.800

which is represented here, respectively.

Compensation of Directors

1 unchanged sentence

In setting executive base salaries and bonuses and granting equity incentive awards, we consider

compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and

long-term results that are in the best interests of our shareholders, and a long-term commitment to us.

results that are in the best interests of our stockholders, and a long-term commitment to us.

Agreements with Our Named Executive Officers

3 unchanged sentences

Wang to serve as Chief Executive Officer of CAG.

The initial term of the employment agreement expires on

August 19, 2022 and is automatically renewed for successive one-year periods unless terminated by either party prior to the expiration of any extended term.

The initial term of the employment agreement expires on August

19, 2022 and is automatically renewed for successive one-year periods unless terminated by either party prior to the expiration of any extended term.

The employment agreement provides that Mr.

Wang is entitled to an annual base salary

(which is currently $350,000).

Wang is entitled to an annual base salary (which is

currently $350,000).

Wang is not entitled to any cash severance under his employment agreement.

Wang’s employment agreement contains customary restrictions on competition, solicitation and the disclosure of confidential

In connection with the closing of the Combination, CAC assumed the rights and obligations of CAG under the employment agreement with Mr.

Wang’s employment agreement contains customary restrictions on competition, solicitation and the disclosure of confidential information.

connection with the closing of the Combination, CAC assumed the rights and obligations of CAG under the employment agreement with Mr.

Employment Agreement with Edmond Cheng

2 unchanged sentences

Cheng’s appointment, CAG entered into an offer letter with Mr.

Cheng, which was amended and restated as of June 28, 2021 and further amended on September 3, 2021.

which was amended and restated as of June 28, 2021 and further amended on September 3, 2021.

The initial term of Mr.

Cheng’s employment expires on March 31, 2024 and is automatically renewed for successive one-year periods unless

terminated by either party prior to the expiration of the initial term or any extension thereof.

Cheng’s employment expires on March 31, 2024 and is automatically renewed for successive one-year periods unless terminated by either

party prior to the expiration of the initial term or any extension thereof.

Pursuant to the amended and restated offer letter, Mr.

Cheng will receive an annual base salary of $300,000 and received a one-time signing bonus

Additionally, on December 30, 2021, Mr.

Cheng was granted an option, subject to shareholder approval, to purchase 1,297,063 Ordinary Shares under the 2022 Plan with an exercise price per share equal to $5.74 per share, which is

equal to the price per Ordinary Share of the Company on the date of grant of the option.

Under the amended and restated offer letter, upon termination of his employment without “cause” or a resignation for “good reason” (as such terms are defined in the amended

and restated offer letter), subject to his execution and non-revocation of a release of claims agreement, and his compliance with certain restrictive covenants as described below, Mr.

Cheng will be eligible to receive six months of base

salary (payable in accordance with our customary payroll practice), a prorated annual bonus for the year of termination and continuing COBRA coverage (but not for more than eighteen months, in accordance with applicable law).

Cheng executed CAG’s standard Employee’s Proprietary Information and Inventions and Non-Competition Agreement (“PIIA”) which contains customary restrictions on

competition, solicitation and disclosure of confidential information as well as provisions regarding the assignment of intellectual property.

In connection with the closing of the Combination, CAC assumed the rights and obligations of CAG under the offer letter and PIIA with Mr.

Employment Agreement with Marianne McInerney

On June 1, 2021, Marianne McInerney joined CAG as its Executive Vice President and Chief Marketing Officer.

In connection with Ms.

McInerney’s appointment, CAG entered into an

offer letter with Ms.

The initial term of Ms.

McInerney’s employment expires on June 1, 2022 and is automatically renewed for successive one-year periods unless terminated by either party prior to the expiration of the initial term

or any extension thereof.

Pursuant to the offer letter, Ms.

McInerney received an annual base salary of $250,000.

McInerney executed an Employee’s PIIA which contains customary restrictions on disclosure of confidential information as well as provisions regarding the assignment of

intellectual property.

In connection with the closing of the Combination, CAC assumed the rights and obligations of CAG under the offer letter and PIIA with Ms.

Prior to June 1, 2021, Ms.

McInerney provided consulting services to CEG and received fees at the annual rate of $250,000.

On February 28, 2023, we informed Ms.

McInerney that the Company would not renew her appointment prior to the automatic

renewal of her June 1, 2021, offer letter and thus, Ms.

McInerney’s appointment as Executive Vice President and Chief Marketing Officer will cease as of May 31, 2023.

Prior to May 31, 2023, CEG and Ms.

McInerney entered into an updated

contract to rename her position as Chief Global Strategist and to redirect and focus her portfolio to include international and government relations and incentives.

Cheng will receive an annual base salary of $300,000 and received a one-time signing bonus of $100,000.

Additionally,

on December 30, 2021, Mr.

Cheng was granted an option, subject to shareholder approval, to purchase 129,706 shares of common stock of the Company under the former 2022 Plan with an exercise price per share equal to $5.74 per share, which is equal to

the price per Ordinary Share of the Company on the date of grant of the option.

Cheng executed CAG’s standard Employee’s Proprietary Information and Inventions and Non-Competition Agreement (“PIIA”) which contains customary restrictions on competition,

solicitation and disclosure of confidential information as well as provisions regarding the assignment of intellectual property.

Cheng terminated his service as CFO to the Company as of March 1, 2024.

Employment Agreement with Ming He

On August 20, 2017, CAG entered into an employment agreement with Mr.

He to serve as Chief Financial Officer of CAG.

The initial term of the employment agreement expired on August 19, 2022 has been

automatically renewed for successive one-year periods unless otherwise terminated by either party prior to the expiration of any extended term.

The employment agreement provides that Mr.

He is entitled to an annual base salary (which is currently

He is not entitled to any cash severance under his employment agreement.

He’s employment agreement contains customary restrictions on competition, solicitation and the disclosure of confidential information.

In 2021, CAC assumed

the rights and obligations of CAG under Mr.

He’s employment agreement.

On May 3, 2022, Mr.

He was appointed as Treasurer of the Company.

Employment Agreement with Tony W.

On August 20, 2017, CAC entered into an employment agreement with Mr.

Tsai to serve as VP of Corporate Affairs of CAC.

The initial term of the employment agreement expired on July 11, 2019 and was

automatically renewed for successive one-year periods unless otherwise terminated by either party prior to the expiration of any extended term.

The employment agreement provides that Mr.

Tsai is entitled to an annual base salary (which is currently

Tsai is not entitled to any cash severance under his employment agreement.

Tsai’s employment agreement contains customary restrictions on competition, solicitation and the disclosure of confidential information.

On December 31,

Tsai was appointed as Secretary of the Company.

Health and Welfare Benefits and Perquisites

All of Cenntro’s executive officers were eligible to participate in its employee benefit plans, including its medical, dental, vision, life and disability insurance plans, in

each case on the same basis as all of its other employees.

All of Cenntro’s executive officers were eligible to participate in its employee benefit plans, including its medical, dental, vision, life and disability insurance plans, in each

case on the same basis as all of its other employees.

Cenntro does not maintain any retirement plans or executive-specific benefit or perquisite programs.

Following the closing of the Combination, we provide employees, including our

executive officers, the same benefits.

Following the closing of the Combination, we provide employees, including our executive

officers, the same benefits.

Annual Cash Bonuses

None of Cenntro’s executive officers were eligible to receive a cash bonus for the year ended December 31, 2022, except for Mr.

Cheng who received a signing bonus of $100,000

in connection with his employment with the Company, which bonus was accrued during the year ended December 31, 2021 and paid in early 2022.

None of Cenntro’s executive officers were eligible to receive a cash bonus for the year ended December 31, 2023.

Equity Incentive Awards

Cenntro has historically granted stock options to its employees, including its executive officers, under the 2016 Plan and the 2022 Plan.

Options were granted at a price not

less than the fair market value on the date of grant and generally are exercisable within five years after the date of grant.

Options generally expire eight to ten years from the date of grant.

Pursuant to the Acquisition Agreement, at the closing of the Combination, NBG assumed the 2016 Plan and the options granted and outstanding thereunder and, as a result,

options to purchase an aggregate of 9,225,271 Ordinary Shares under the 2016 Plan, out of which 9,173,803 are outstanding as of the date of this Annual Report.

No new grants will be made under our 2016 Plan and all share awards will be

granted to our employees, including our executive officers, under the 2022 Plan.

Cenntro Electric Group Limited 2022 Stock Incentive Plan

On December 30, 2021, in connection with the Combination, the Board adopted the 2022 Plan, which became effective on that date, and was later approved by shareholders at the

Annual General Meeting on May 31, 2022.

The following is a description of the material terms of the 2022 Plan.

The summary below does not contain a complete description of all provisions of the 2022 Plan and is qualified in its entirety by

reference to the 2022 Plan, a copy of which was filed as Exhibit 10.5 to our Report of Foreign Private Issuer on Form 6-K, filed with the SEC on January 5, 2022, and is incorporated herein by reference.

Cenntro has historically granted stock options to its employees, including its executive officers.

On the Implementation Date, and pursuant to the Scheme, the Company

assumed CEGL’s obligations with respect to the settlement of stock 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 were 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.

2023 Equity Incentive Plan

On the Implementation Date, in connection with the Redomicile, the Board adopted the 2023 Plan, which became effective on that date.

The following is a description of the material

terms of the 2023 Plan.

The summary below does not contain a complete description of all provisions of the 2023 Plan and is qualified in its entirety by reference to the 2023 Plan, a copy of which was filed as Exhibit 10.1 to our Current Report on

Form 8-K12-B, filed with the SEC on February 27, 2024, and is incorporated herein by reference.

Share Awards.

The 2022 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”),

restricted share awards, share unit awards, share appreciation rights, cash-based awards, and performance-based share awards, or collectively, share awards.

ISOs may be granted only to our employees, including officers, and the employees of

our subsidiaries.

All other share awards may be granted to our employees, officers, our non-employee directors, and consultants and the employees and consultants of our subsidiaries and affiliates.

The 2023 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted share awards, share unit

awards, share appreciation rights, cash-based awards, and performance-based share awards, or collectively, share awards.

ISOs may be granted only to our employees, including officers, and the employees of our subsidiaries.

All other share awards may

be granted to our employees, officers, our non-employee directors, and consultants and the employees and consultants of our subsidiaries and affiliates.

Share Reserve.

The aggregate number of Ordinary Shares that may be issued pursuant to share awards under the 2022 Plan will not

exceed the sum of 25,965,234 shares, plus an annual increase on the first day of each fiscal year, for a period of not more than nine (9) years, beginning on January 1, 2023 and ending on (and including) January 1, 2031, in an amount equal to

the lesser of (i) five percent (5%) of the outstanding shares on the last day of the immediately preceding fiscal year or (ii) such lesser amount (including zero) that the compensation committee (as defined below) determines for purposes of

the annual increase for that fiscal year.

The aggregate number of Common Stock that may be issued pursuant to share awards under the 2023 Plan will not exceed the sum

30,000,000 shares.

If restricted securities or securities issued upon the exercise of options are forfeited, then such shares shall again become available for awards under the 2023 Plan.

share units, options or share appreciation rights are forfeited or terminate for any reason before being exercised or settled, or an award is settled in cash without the delivery of shares to the holder, then the corresponding shares will

again become available for awards under the 2022 Plan.

Any shares withheld to satisfy the exercise price or tax withholding obligation pursuant to any award of options or share appreciation rights shall again become available for awards under

the 2022 Plan.

If share units or share appreciation rights are settled, then only the number of shares (if any) actually issued in settlement of such share units or share appreciation rights shall reduce the number of shares available under

the 2022 Plan, and the balance (including any shares withheld to cover taxes) shall again become available for awards under the 2022 Plan.

As of the date of this Annual Report, options to purchase a total of 12,337,063 Ordinary Shares were outstanding under the 2022 Plan.

If share units,

options or share appreciation rights are forfeited or terminate for any reason before being exercised or settled, or an award is settled in cash without the delivery of shares to the holder, then the corresponding shares will again become available

for awards under the 2023 Plan.

Any shares withheld to satisfy the exercise price or tax withholding obligation pursuant to any award of options or share appreciation rights shall again become available for awards under the 2023 Plan.

If share units

or share appreciation rights are settled, then only the number of shares (if any) actually issued in settlement of such share units or share appreciation rights shall reduce the number of shares available under the 2023 Plan, and the balance

(including any shares withheld to cover taxes) shall again become available for awards under the 2023 Plan.

As of the date of this Annual Report, options to purchase a total of 1,937,623 shares of Common Stock were outstanding under the 2023 Plan.

As of the date of this Annual Report,

options to purchase an aggregate of 12,797,063 Ordinary Shares have been granted and no Ordinary Shares have been issued under the 2022 Plan.

options to purchase an aggregate of 2,202,248 shares of Common Stock have been granted and 5,147 shares of Common Stock have been issued under the 2023 Plan.

Incentive Stock Option Limit .

The maximum number of Ordinary Shares that may be issued upon the exercise of ISOs under the 2022 Plan

is 25,965,234 shares.

Grants to Outside Directors.

The fair market value of any awards granted under the 2022 Plan to an outside director as compensation

for services as an outside director during any twelve-month period may not exceed $500,000 on the date of grant, provided that any award granted to an outside director in lieu of an annual cash retainer payment and/or cash meeting fees (if

any) will be excluded from such limit.

An outside director may elect to receive his or her annual cash retainer payments and/or cash meeting fees (if any) in the form of cash, options, share appreciation rights, restricted securities, share

units, or a combination thereof, as determined by our Board.

The maximum number of Common Stock that may be issued upon the exercise of ISOs under the 2023 Plan is

30,000,000 shares of Common Stock.

Administration.

The 2023 Plan will be administered by our Board or a committee appointed by our Board, or the compensation committee.

Subject to the limitations set forth in the 2022 Plan, the compensation committee has the authority to determine, among other things, to whom awards will be granted, the number of shares subject to awards, the term during which an option or

share appreciation right may be exercised and the rate at which the awards may vest or be earned, including any performance criteria to which they may be subject.

The compensation committee also has the authority to determine the

consideration and methodology of payment for awards.

to the limitations set forth in the 2023 Plan, the compensation committee has the authority to determine, among other things, to whom awards will be granted, the number of shares subject to awards, the term during which an option or share

appreciation right may be exercised and the rate at which the awards may vest or be earned, including any performance criteria to which they may be subject.

The compensation committee also has the authority to determine the consideration and

methodology of payment for awards.

Cancellation and Re-Grant of Share Awards.

The compensation committee has the authority to modify outstanding awards under

the 2022 Plan.

Subject to the terms of the 2022 Plan, the compensation committee has the authority to cancel any outstanding share award in exchange for new share awards, cash, or other consideration, without shareholder approval but with the

consent of any adversely affected participant.

The compensation committee has the authority to modify outstanding awards under the

Subject to the terms of the 2023 Plan, the compensation committee has the authority to cancel any outstanding share award in exchange for new share awards, cash, or other consideration, without shareholder approval but with the consent of

any adversely affected participant.

Stock Options.

A stock option is the right to purchase a certain number of shares, at a certain exercise price, in the future.

the 2022 Plan, ISOs and NSOs are granted pursuant to stock option agreements adopted by the compensation committee.

The compensation committee determines the exercise price for a stock option, within the terms and conditions of the 2022 Plan,

provided that the exercise price of a stock option generally cannot be less than one hundred percent (100%) of the fair market value of our Ordinary Shares on the date of grant.

Options granted under the 2022 Plan vest at the rate specified

by the compensation committee.

Under the 2023

Plan, ISOs and NSOs are granted pursuant to stock option agreements adopted by the compensation committee.

The compensation committee determines the exercise price for a stock option, within the terms and conditions of the 2023 Plan, provided that

the exercise price of a stock option generally cannot be less than one hundred percent (100%) of the fair market value of our Common Stock on the date of grant.

Options granted under the 2023 Plan vest at the rate specified by the compensation

Stock options granted to certain employees outside of the United States may be settled in cash.

Stock options granted under the 2022 Plan generally must be exercised by the optionee before the earlier of the expiration of such option or the expiration of a specified

period following the optionee’s termination of employment.

Each stock option agreement will set forth the extent to which the option recipient will have the right to exercise the option following the termination of the recipient’s service

with us, and the right to exercise the option of any executors or administrators of the award recipient’s estate or any person who has acquired such options directly from the award recipient by bequest or inheritance.

Payment of the exercise

price may be made in cash or, if provided for in the stock option agreement evidencing the award, (1) by surrendering, or attesting to the ownership of, shares which have already been owned by the optionee, (2) future services or services

rendered to us or our affiliates prior to the award, (3) by delivery of an irrevocable direction to a securities broker to sell shares and to deliver all or part of the sale proceeds to us in payment of the aggregate exercise price, (4) by

delivery of an irrevocable direction to a securities broker or lender to pledge shares and to deliver all or part of the loan proceeds to us in payment of the aggregate exercise price, (5) by a “net exercise” arrangement, (6) by delivering a

full-recourse promissory note, or (7) by any other form that is consistent with applicable laws, regulations, and rules.

Stock options granted under the 2023 Plan generally must be exercised by the optionee before the earlier of the expiration of such option or the expiration of a specified period

following the optionee’s termination of employment.

Each stock option agreement will set forth the extent to which the option recipient will have the right to exercise the option following the termination of the recipient’s service with us, and the

right to exercise the option of any executors or administrators of the award recipient’s estate or any person who has acquired such options directly from the award recipient by bequest or inheritance.

Payment of the exercise price may be made in cash

or, if provided for in the stock option agreement evidencing the award, (1) by surrendering, or attesting to the ownership of, shares which have already been owned by the optionee, (2) future services or services rendered to us or our affiliates

prior to the award, (3) by delivery of an irrevocable direction to a securities broker to sell shares and to deliver all or part of the sale proceeds to us in payment of the aggregate exercise price, (4) by delivery of an irrevocable direction to a

securities broker or lender to pledge shares and to deliver all or part of the loan proceeds to us in payment of the aggregate exercise price, (5) by a “net exercise” arrangement, (6) by delivering a full-recourse promissory note, or (7) by any other

form that is consistent with applicable laws, regulations, and rules.

Tax Limitations on Incentive Stock Options .

The aggregate fair market value, determined at the time of grant, of our Ordinary Shares

The aggregate fair market value, determined at the time of grant, of our shares of Common Stock

with respect to ISOs that are exercisable for the first time by an option holder during any calendar year under all of our share plans may not exceed $100,000.

Options or portions thereof that exceed such limit will generally be treated as

No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own shares possessing more than ten percent (10%) of our total combined voting power or that of any of our affiliates unless (1) the option exercise

price is at least one hundred ten percent (110%) of the fair market value of the shares subject to the option on the date of grant, and (2) the term of the ISO does not exceed five (5) years from the date of grant.

Options or portions thereof that exceed such limit will generally be treated as NSOs.

ISO may be granted to any person who, at the time of the grant, owns or is deemed to own shares possessing more than ten percent (10%) of our total combined voting power or that of any of our affiliates unless (1) the option exercise price is at

least one hundred ten percent (110%) of the fair market value of the shares subject to the option on the date of grant, and (2) the term of the ISO does not exceed five (5) years from the date of grant.

Restricted Share Awards.

5 unchanged sentences

Restricted securities may be issued for such consideration as the compensation committee may determine, including cash, cash equivalents, full recourse promissory notes, past services and future

Award recipients who are granted restricted securities generally have all of the rights of a shareholder with respect to those shares, provided that dividends and other distributions will not be paid in respect of unvested shares

unless and until the underlying shares vest.

until the underlying shares vest.

Share Unit Awards.

Share unit awards give recipients the right to acquire a specified number of shares (or cash amount) at a future

date upon the satisfaction of certain conditions, including any vesting arrangement, established by the compensation committee and as set forth in a share unit award agreement.

A share unit award may be settled by cash, delivery of shares, a

combination of cash and shares as deemed appropriate by the compensation committee.

Recipients of share unit awards generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the award is

At the compensation committee’s discretion and as set forth in the share unit award agreement, share units may provide for the right to dividend equivalents.

Dividend equivalents may not be distributed prior to settlement of the

share unit to which the dividend equivalents pertain and the value of any dividend equivalents payable or distributable with respect to any unvested share units that do not vest will be forfeited.

Share unit awards give recipients the right to acquire a specified number of shares (or cash amount) at a future date upon

the satisfaction of certain conditions, including any vesting arrangement, established by the compensation committee and as set forth in a share unit award agreement.

A share unit award may be settled by cash, delivery of shares, a combination of

cash and shares as deemed appropriate by the compensation committee.

Recipients of share unit awards generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the award is settled.

At the compensation

committee’s discretion and as set forth in the share unit award agreement, share units may provide for the right to dividend equivalents.

Dividend equivalents may not be distributed prior to settlement of the share unit to which the dividend

equivalents pertain and the value of any dividend equivalents payable or distributable with respect to any unvested share units that do not vest will be forfeited.

Share Appreciation Rights.

Share appreciation rights generally provide for payments to the recipient based upon increases in the

price of our Ordinary Shares over the exercise price of the share appreciation right.

The compensation committee determines the exercise price for a share appreciation right, which generally cannot be less than one hundred percent (100%) of

the fair market value of our Ordinary Shares on the date of grant.

Share appreciation rights generally provide for payments to the recipient based upon increases in the price of our

shares of Common Stock over the exercise price of the share appreciation right.

The compensation committee determines the exercise price for a share appreciation right, which generally cannot be less than one hundred percent (100%) of the fair market

value of our Common Stock on the date of grant.

A share appreciation right granted under the 2023 Plan vests at the rate specified in the share appreciation right agreement as determined by the compensation committee.

compensation committee determines the term of share appreciation rights granted under the 2022 Plan, up to a maximum of ten years.

Upon the exercise of a share appreciation right, we will pay the participant an amount in shares, cash, or a

combination of shares and cash as determined by the compensation committee, equal to the product of (1) the excess of the per share fair market value of our Ordinary Shares on the date of exercise over the exercise price, multiplied by (2)

the number of Ordinary Shares with respect to which the share appreciation right is exercised.

The compensation committee

determines the term of share appreciation rights granted under the 2023 Plan, up to a maximum of ten years.

Upon the exercise of a share appreciation right, we will pay the participant an amount in shares, cash, or a combination of shares and cash as

determined by the compensation committee, equal to the product of (1) the excess of the per share fair market value of our Common Stock on the date of exercise over the exercise price, multiplied by (2) the number of shares of Common Stock with

respect to which the share appreciation right is exercised.

Other Share Awards.

The compensation committee may grant other awards based in whole or in part by reference to our Ordinary Shares.

The compensation committee may grant other awards based in whole or in part by reference to our shares of Common Stock.

The compensation committee will set the number of shares under the share award and all other terms and conditions of such awards.

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A cash-based award is denominated in cash.

The compensation committee may grant cash-based awards in such number

and upon such terms as it shall determine.

Payment, if any, will be made in accordance with the terms of the award, and may be made in cash or in Ordinary Shares, as determined by the compensation committee.

The compensation committee may grant cash-based awards in such number and

upon such terms as it shall determine.

Payment, if any, will be made in accordance with the terms of the award, and may be made in cash or in shares of Common Stock, as determined by the compensation committee.

Performance-Based Awards.

The number of shares or other benefits granted, issued, retainable and/or vested under a share or share

unit award may be made subject to the attainment of performance goals.

The number of shares or other benefits granted, issued, retainable and/or vested under a share or share unit award

may be made subject to the attainment of performance goals.

The compensation committee may utilize any performance criteria selected by it in its sole discretion to establish performance goals.

Changes to Capital Structure.

In the event of a recapitalization, share split, or similar capital transaction, the compensation

committee will make appropriate and equitable adjustments to the number of shares reserved for issuance under the 2022 Plan, the number of shares that can be issued as incentive stock options, the number of shares subject to outstanding

awards and the exercise price under each outstanding option or share appreciation right.

In the event of a recapitalization, share split, or similar capital transaction, the compensation committee

will make appropriate and equitable adjustments to the number of shares reserved for issuance under the 2023 Plan, the number of shares that can be issued as incentive stock options, the number of shares subject to outstanding awards and the exercise

price under each outstanding option or share appreciation right.

Transactions.

If we are involved in a merger or other reorganization, outstanding awards will be subject to the agreement or merger

or reorganization.

Subject to compliance with applicable tax laws, such agreement will provide for (1) the continuation of the outstanding awards by us, if we are a surviving corporation, (2) the assumption or substitution of the outstanding

awards by the surviving corporation or its parent or subsidiary, (3) immediate vesting, exercisability, and settlement of the outstanding awards followed by their cancellation, or (4) settlement of the intrinsic value of the outstanding

awards (whether or not vested or exercisable) in cash, cash equivalents, or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such award or the underlying shares)

followed by cancellation of such awards.

If we are involved in a merger or other reorganization, outstanding awards will be subject to the agreement or merger or

reorganization.

the surviving corporation or its parent or subsidiary, (3) immediate vesting, exercisability, and settlement of the outstanding awards followed by their cancellation, or (4) settlement of the intrinsic value of the outstanding awards (whether or not

vested or exercisable) in cash, cash equivalents, or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such award or the underlying shares) followed by cancellation of

Change of Control.

The compensation committee may provide, in an individual award agreement or in any other written agreement between

a participant and us, that the share award will be subject to acceleration of vesting and exercisability in the event of a change of control.

The compensation committee may provide, in an individual award agreement or in any other written agreement between a

participant and us, that the share award will be subject to acceleration of vesting and exercisability in the event of a change of control.

Transferability.

Unless the compensation committee provides otherwise, no award granted under the 2022 Plan may be transferred in any

manner (prior to the vesting and lapse of any and all restrictions applicable to shares issued under such award), except by will, the laws of descent and distribution, or pursuant to a domestic relations order.

Unless the compensation committee provides otherwise, no award granted under the 2023 Plan may be transferred in any manner

(prior to the vesting and lapse of any and all restrictions applicable to shares issued under such award), except by will, the laws of descent and distribution, or pursuant to a domestic relations order.

Amendment and Termination.

Our Board has the authority to amend, suspend, or terminate the 2022 Plan, provided that such action does

not materially impair the existing rights of any participant without such participant’s written consent.

Our Board has the authority to amend, suspend, or terminate the 2023 Plan, provided that such action does not

materially impair the existing rights of any participant without such participant’s written consent.

No ISOs may be granted after the tenth anniversary of the date our Board adopted the 2023 Plan.

In the event that we are required to prepare restated financial results owing to an executive officer’s intentional

misconduct or grossly negligent conduct, the Board (or a designated committee) has the authority, to the extent permitted by applicable law, to require reimbursement or forfeiture to us of the amount of bonus or incentive compensation

(whether cash-based or equity-based) such executive officer received during the three fiscal years preceding the year the restatement is determined to be required, to the extent that such bonus or incentive compensation exceeds what the

officer would have received based on an applicable restated performance measure or target.

We intend to recoup incentive-based compensation from executive officers to the extent required under the Dodd-Frank Wall Street Reform and Consumer

Protection Act and any rules, regulations and listing standards that may be issued under that act.

2022 Employee Stock Purchase Plan

On December 30, 2021, in connection with the Combination, the Board adopted the Cenntro Electric Group Limited 2022 Employee Stock Purchase Plan (the “ESPP”), which became

effective on that date, and was later approved by shareholders at the Annual General Meeting on May 31, 2022.

The following is a description of the material terms of the ESPP.

The summary below does not contain a complete description of all

provisions of the ESPP and is qualified in its entirety by reference to the ESPP, a copy of which was filed as Exhibit 10.6 to our Report of Foreign Private Issuer on Form 6-K, filed with the SEC on January 5, 2022, and is incorporated herein

by reference.

The ESPP is intended to qualify as an “employee stock purchase plan” under Code Section 423, except as explained below under

“International Participation.” During regularly scheduled “offerings” under the ESPP, participants will be able to request payroll deductions and then expend the accumulated deduction to purchase a number of Ordinary Shares at a discount and

in an amount determined in accordance with the ESPP’s terms.

Shares Available for Issuance.

The aggregate number of Ordinary Shares that may be issued pursuant to the ESPP is equal to 7,789,571

Ordinary Shares.

Administration.

Except as noted below, the ESPP will be administered by our Board or a committee appointed by our Board, or the

compensation committee.

The compensation committee has the authority to construe, interpret and apply the terms of the ESPP, determine eligibility, establish such limitations and procedures as it determines are consistent with the ESPP and

adjudicate any disputed claims under the ESPP.

Each full-time and part-time employee, including our officers and employee directors and employees of participating

subsidiaries, but excluding any employees who are located in China, who is employed by us on the day preceding the start of any offering period is eligible to participate in the ESPP.

The ESPP requires that an employee customarily work more

than 20 hours per week and more than five months per calendar year in order to be eligible to participate in the ESPP.

The ESPP permits an eligible employee to purchase our Ordinary Shares through payroll deductions, which may not be more

than fifteen percent (15%) of the employee’s compensation, or such lower limit as may be determined by the compensation committee from time to time.

However, no employee is eligible to participate in the ESPP if, immediately after electing to

participate, the employee would own shares (including shares such employee may purchase under this plan or other outstanding options) representing five percent (5%) or more of the total combined voting power or value of all classes of our

Ordinary Shares.

Unless provided otherwise by the compensation committee prior to commencement of an offering, the maximum number of Ordinary Shares which may be purchased by a participant during such offering is equal to (i) fifteen percent

(15%) multiplied by (ii) $130,000 divided by the fair market value of an ordinary share on the first day of the offering period.

In addition, no employee is

permitted to accrue, under the ESPP and all similar purchase plans of us or its subsidiaries, a right to purchase shares of us having a value in excess of $25,000 of the fair market value of such shares (determined at the time the right is

granted) for each calendar year.

Employees will be able to withdraw their accumulated payroll deductions prior to the end of the offering period in accordance with the terms of the offering.

Participation in the ESPP will end automatically on

termination of employment.

Offering Periods and Purchase Price.

The ESPP will be implemented through a series of offerings of purchase rights to eligible

Under the ESPP, the compensation committee may specify offerings with a duration of not more than twenty-seven (27) months and may specify shorter purchase periods within each offering.

During each purchase period, payroll

deductions will accumulate, without interest.

On the last day of the purchase period, accumulated payroll deductions will be used to purchase our Ordinary Shares for employees participating in the offering.

The purchase price will be

specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than eighty-five percent (85%) of the fair market value per share of our Ordinary Shares on either the offering date or on the purchase date, whichever is

The fair market value of our Ordinary Shares for this purpose will generally be the closing price on the Nasdaq Capital Market (or such other exchange as our Ordinary Shares may be traded at the relevant time) on the date in question,

or if such date is not a trading day, on the last trading day before the date in question.

Reset Feature.

The compensation committee may specify that, if the fair market value of a share of our Ordinary Shares on any

purchase date within a particular offering period is less than or equal to the fair market value on the start date of that offering period, then the offering period will automatically terminate and the employee in that offering period will

automatically be transferred and enrolled in a new offering period which will begin on the next day following such purchase date.

Changes to Capital Structure.

In the event that there is a specified type of change in our capital structure, such as a share split,

appropriate adjustments will be made to (1) the number of shares reserved under the ESPP, (2) the individual and aggregate participant share limitations described in the plan and (3) the price of shares that any participant has elected to

Corporate Reorganization.

Immediately before a corporate reorganization, the offering period and purchase period then in progress

shall terminate and either our Ordinary Shares will be purchased with the accumulated payroll deductions or the accumulated payroll deductions will be refunded without occurrence of any of our Ordinary Shares purchase, unless the surviving

corporation (or its parent corporation) assumes the ESPP under the plan of merger or consolidation.

International Participation.

To provide us with greater flexibility in structuring our equity compensation programs for our non-U.S.

employees, the ESPP also permits us to grant employees of our non-U.S.

subsidiary entities rights to purchase Ordinary Shares pursuant to other offering rules or sub-plans adopted by the compensation committee in order to achieve tax,

securities law or other compliance objectives.

While the ESPP is intended to be a qualified “employee stock purchase plan” within the meaning of Code Section 423, any such international sub-plans or offerings are not required to satisfy those

tax code requirements and therefore may have terms that differ from the ESPP terms applicable in the U.S.

However, the international sub-plans or offerings are subject to the ESPP terms limiting the overall shares available for issuance,

the maximum payroll deduction rate, maximum purchase price discount and maximum offering period length.

Amendment and Termination.

Our Board and the compensation committee each have the right to amend, suspend or terminate the ESPP at any time.

increase in the aggregate number of Ordinary Shares to be issued under the ESPP is subject to shareholder approval.

Any other amendment is subject to shareholder approval only to the extent required under applicable law or regulation.

Amended and Restated 2016 Incentive Stock Option Plan

In connection with the Combination, the Company assumed CAG’s obligations under the 2016 Plan.

The following is a description of the material terms of the 2016 Plan.

summary below does not contain a complete description of all provisions of the 2016 Plan and is qualified in its entirety by reference to the 2016 Plan, a copy of which was filed as Exhibit 10.7 to our Report of Foreign Private Issuer on Form

6-K, filed with the SEC on January 5, 2022, and is incorporated herein by reference.

CAG’s board of directors adopted the 2016 Plan, and CAG’s shareholders approved the 2016 Plan, on February 10, 2016.

The 2016 Plan provides for the grant of NSOs, share awards, and restricted share purchase offer awards, or collectively, awards, to employees, officers and consultants.

we have granted NSOs under the 2016 Plan, we have not granted any share awards or restricted share purchase offer awards under the 2016 Plan.

Administration .

The 2016 Plan is administered by the Company’s Board, and may be amended, suspended or terminated by the Board,

without shareholder approval, unless either (i) shareholder approval is required by applicable law, regulations or stock exchange listing standards or (ii) the revision or amendment increases the number of shares subject to the 2016 Plan,

decreases the price at which grants may be granted, materially increases the benefits to participants, or changes the class of persons eligible to receive grants under the 2016 Plan.

Authorized Shares .

As of the date of this Annual Report, options to purchase a total of 9,173,803 Ordinary Shares were outstanding

under the 2016 Plan.

The weighted-average exercise price of the options outstanding under the 2016 Plan is $1.1007 per share.

No additional awards and no additional shares are available for future issuance under the 2016 Plan.

2016 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

In the event of a share split, share dividend, combination or reclassification of the shares, recapitalization, merger or

similar event, the 2016 Plan administrator may proportionately adjust the number of shares covered by outstanding awards, the number of shares available for issuance as future awards under the 2016 Plan, and the exercise or purchase price of

outstanding awards.

Nonstatutory Stock Options .

The 2016 Plan administrator determines the exercise price for each stock option and the term of an option

may not exceed ten years.

No option may be transferred by the optionholder other than by will or the laws of descent or distribution.

Each option may be exercised during the optionholder’s lifetime solely by the optionholder.

Options granted

under the 2016 Plan generally vest at the rate of twenty percent each year commencing on the vesting commencement date over five years.

Upon the termination of an optionholder’s service as an employee, non-employee director, or consultant for

any reason other than death or disability, such optionholder may exercise his or her vested options for not less than thirty days and not more than three months after the date service terminates.

In the case of the optionholder’s termination

of service as a result of the optionholder’s death or disability, the option will remain exercisable for not less than six months nor more than one year following such termination.

Notwithstanding the foregoing, no option may be exercised

after the expiration of its term.

Corporate Transactions .

The 2016 Plan provides that, in the event of a proposed dissolution or liquidation of the Company, a merger or

consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company, unless otherwise provided by the Board, all outstanding stock options will terminate if not

assumed by the successor entity or new stock options of the successor entity are substituted therefore.

In the event that we are required to prepare restated financial results owing to an executive officer’s intentional misconduct or

grossly negligent conduct, the Board (or a designated committee) has the authority, to the extent permitted by applicable law, to require reimbursement or forfeiture to us of the amount of bonus or incentive compensation (whether cash-based or

equity-based) such executive officer received during the three fiscal years preceding the year the restatement is determined to be required, to the extent that such bonus or incentive compensation exceeds what the officer would have received based on

an applicable restated performance measure or target.

We intend to recoup incentive-based compensation from executive officers to the extent required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules, regulations and

listing standards that may be issued under that act.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table provides information with respect to the beneficial ownership of our Ordinary Shares as of the date of this report, by:

The following table provides information with respect to the beneficial ownership of our Common stock as of the date of this report, by:

each of our executive officers and directors;

all of our current directors and executive officers as a group;

each person or entity, or group of persons or entities, known by us to own beneficially more than 5% of our Ordinary Shares.

We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for

any other purpose.

In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or

investment power with respect to such security.

each person or entity, or group of persons or entities, known by us to own beneficially more than 5% of our Common Stock.

We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any

other purpose.

with respect to such security.

A person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days.

Except as indicated by the footnotes

below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community

property laws.

Percentage ownership is based on 304,449,091 Ordinary Shares outstanding as of June 25, 2023.

Except as indicated by the footnotes below, we believe, based

on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws.

Percentage ownership is based on 30,828,795 shares of Common Stock outstanding as of March 22, 2024.

Name and Address of Beneficial Owner (1)

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Directors and Executive Officers :

Edmond Cheng (4)

Marianne McInerney

Edward Ye (4)

Wei Zhong (5)

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Jiawei “Joe” Tong (7)

Christopher Thorne (8)

Stephen Markscheid

All current directors and executive officers as a group (eleven persons) (10)

Represents beneficial ownership of less than 1%.

Unless otherwise indicated, the address for each beneficial owner listed in the table above is c/o Cenntro Electric Group Limited, 501 Okerson Road, Freehold, New Jersey 07728.

Represents the Acquisition Shares received by China Leader Group Limited (“CLGL”) following the closing of the Combination, pursuant to the Distribution.

CLGL is wholly owned by

Yeung Heung Yeung, one of the directors of CAG, the former parent company of Cenntro.

Yeung Heung Yeung has sole voting and dispositive power with respect to the Ordinary Shares held by CLGL.

Unless otherwise indicated, the address for each beneficial owner listed in the table above is c/o Cenntro Inc., 501 Okerson Road, Freehold, New Jersey 07728.

Represents the Acquisition Shares received by China Leader Group Limited (“CLGL”) following the closing of the Combination.

CLGL is wholly owned by Yeung Heung Yeung, one of the directors of CAG, the former parent

company of Cenntro.

Yeung Heung Yeung has sole voting and dispositive power with respect to the shares of Common Stock held by CLGL.

Accordingly, Mr.

Yeung may be deemed to

beneficially own the 1,8458,659 Ordinary Shares directly held by CLGL.

Yeung may be deemed to beneficially own the 1,644,312 shares of Common Stock directly held

The address of China Leader is Flat B, 29 Floor, Tower 1, Starcrest, 9 Star Street, Wan Chai, Hong Kong.

Consists of (i) 65,399,935 Acquisition Shares held of record by Cenntro Enterprise Limited, (ii) 6,144,407 Acquisition Shares held of record by Trendway Capital Limited, each of

which is wholly owned by Mr.

Peter Wang, and (iii) 1,093,750 Ordinary Shares that Mr.

Wang has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options granted under the 2022 Plan.

Wang has voting and dispositive power over the securities held by each entity and as a result may be deemed to beneficially own the securities of such entities.

Each of Cenntro Enterprise Limited and Trendway Capital Limited

received such Acquisition Shares presented above following the closing of the Combination, pursuant to the Distribution.

Consists of 486,396 Ordinary Shares that Mr.

Cheng has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options granted under the

Consists of 1,610,170 Ordinary Shares that Mr.

Zhong has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options under the 2016

Consists of 476,253 Ordinary Shares that Mr.

Tsai has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options under the 2016 Plan

and 2022 Plan.

Consists of 66,666 Ordinary Shares that Mr.

Tong has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options granted under the 2022

Consists of 66,666 Ordinary Shares that Mr.

Thorne has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options granted under the

Consists of 941,413 Ordinary Shares that Mr.

He has the right to acquire from us within 60 days of June 25, 2023, pursuant to the exercise of stock options granted under the 2016

Plan and 2022 Plan.

Consists of 295,918 ordinary shares beneficially owned by Mr.

Ge, and 33,333 Ordinary Shares that Mr.

Ge has the right to acquire from us within 60 days of June 25, 2023, pursuant

to the exercise of stock options granted under the 2022 Plan.

Consists of (i) 71,840,260 Ordinary Shares beneficially owned by our directors and executive officers and (ii) 4,995,480 Ordinary Shares underlying outstanding options,

exercisable within 60 days of June 25, 2023.

Consists of (i) 6,539,994 Acquisition Shares held of record by Cenntro Enterprise Limited, (ii) 614,441 Acquisition Shares held of record by Trendway Capital Limited, each of which is wholly owned by Mr.

and (iii) 153,125 shares of Common Stock that Mr.

Wang has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options granted under the 2023 Plan.

Wang has voting and dispositive power over

the securities held by each entity and as a result may be deemed to beneficially own the securities of such entities.

Each of Cenntro Enterprise Limited and Trendway Capital Limited received such Acquisition Shares presented above following

the closing of the Combination, pursuant to the Distribution.

Consists of 30,219 shares of Common Stock that Mr.

Ye has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options granted under the 2023 Plan.

Consists of 161,017 shares of Common Stock that Mr.

Zhong has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options under the 2023 Plan.

Consists of 49,504 shares of Common Stock that Mr.

Tsai has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options under the 2023 Plan.

Consists of 6,666 shares of Common Stock that Mr.

Tong has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options granted under the 2023 Plan

Consists of 96,020 shares of Common Stock that Mr.

He has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of stock options granted under 2023 Plan.

Consists of 29,780 shares of Common Stock beneficially owned by Mr.

Ge, and 33,333 shares of Common Stock that Mr.

Ge has the right to acquire from us within 60 days of March 18, 2024, pursuant to the exercise of

stock options granted under the 2023 Plan.

Consists of (i) 7,184,215 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 503,217 shares of Common Stock underlying outstanding options, exercisable within 60 days of March

Certain Relationships and Related Transactions, and Director Independence.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent we enter into such transactions.

The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an

unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction.

We will require each of our directors and executive officers to complete an annual directors’ and officers’

questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the

part of a director, employee or officer.

Since January 1, 2022, Cenntro has been party to the following material transactions and loans with (a) enterprises that directly or indirectly through

one or more intermediaries, control or are controlled by, or are under common control with, Cenntro;

committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party

under the same or similar circumstances and the extent of the related party’s interest in the transaction.

We will require each of our directors and executive officers to complete an annual directors’ and officers’ questionnaire that elicits

information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or

Other than employment and other agreements set out elsewhere in this annual report, the following summarizes those of transactions since January 1, 2023 to which we have been a

participant in which the amount involved exceeded or will exceed $63,000, and in which any of our directors, executive officers or beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing

persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described in the section entitled “Executive Compensation.” Described below

are certain other transactions with our directors, executive officers and stockholders.

Since January 1, 2023, Cenntro has been party to the following material transactions and loans with (a) enterprises that directly or indirectly through one or more intermediaries,

control or are controlled by, or are under common control with, Cenntro;

(b) associates;

Cenntro, and close members of any such individual’s family;

(d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling Cenntro’s activities, including directors and

senior management and close members of such individuals’ families;

and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person

is able to exercise significant influence.

(c) individuals owning, directly or indirectly, an interest in voting power that gives them significant influence over Cenntro, and close members of any such

individual’s family;

(d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling Cenntro’s activities, including directors and senior management and close members of such

individuals’ families;

and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence.

Commercial Transactions

Purchased raw material from related parties

During the year ended December 31, 2022, Cenntro purchased approximately $1.4 million of batteries for Metro® from Hangzhou Hezhe Energy Technology Co., Ltd., an entity

significantly influenced by Hangzhou Ronda Tech Co., Limited, the subsidiary of the Company.

Financings from related parties

Advances to related parties

During the year ended December 31, 2023, Cenntro purchased approximately $0.2 million of batteries for Metro® from Hangzhou Hezhe Energy Technology Co., Ltd., an entity significantly influenced by

Hangzhou Ronda Tech Co., Limited, the subsidiary of the Company.

Capital injection to a related party

On December 16, 2022, the Company committed an investment of approximately $2.7 million in Antric GmbH to acquire 25% of its equity interest.

During the year ended December

31, 2022, approximately $2 million was paid to Antric GmbH.

On July 28, 2022, Cenntro Electric Group (Europe) GmbH (“CEGE”) entered into an agreement to invest in Antric GmbH whereby CEGE invested EUR 2.5 million to acquire 25% of Antric’s

total share capital.

CEGE made the first payment of approximately $1.3 million on July 28, 2022.

On January 17, 2023, CEGE made a second investment of approximately $0.7 million.

On August 31, 2023, Cenntro Automotive Europe GmbH (“CAE”) entered into

an agreement to invest one euro to acquire 75% of Antric’s total share capital which was fully paid on September 8, 2023.

Employment agreement to a related party

On March 25, 2022, as a result of CEGI’s acquisition of 65% shares of CAE (f.k.a.

TME), CAE entered into a managing director’s contract with Mr.

Gregory Hancke to retain him as

Managing Director (“Geschäftsführer”) of CAE.

The Managing Director’s contract is for two years commencing on the day following the closing of the acquisition transaction, or March 23, 2022.

The term of the contract is not automatically renewed for

successive periods.

The contract provides that Mr.

Gregory Hancke is entitled to an annual base salary of €240,000 (equivalent to approximately $259,599).

Gregory Hancke is not entitled to any cash severance under this Managing Director’s

Principal Accounting Fees and Services.

Dismissal of Marcum Asia CPAs LLP

On April 14, 2023, the Audit Committee of the Company approved the dismissal of Marcum Asia CPAs LLP (“Marcum Asia”) as our independent registered public accounting firm

effective April 17, 2023.

During the fiscal years ended December 31, 2021 (i) there were no disagreements with Marcum Asia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure,

which disagreements, if not resolved to Marcum’s satisfaction, would have caused Marcum Asia to make reference to the subject matter of such disagreements in its reports on our financial statements for such year, and (ii) there were no

reportable events as defined in Item 304(a)(1)(v) of Regulation S-K other than the following:

(a) Material weaknesses in the Company’s internal control over financial reporting that was disclosed in the Company’s 20-F for the year ended

December 31, 2021.

The Company provided the Marcum Asia with a copy of the foregoing disclosures and requested that the Marcum

Asia furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made herein and, if not, stating the respects in which it does not agree.

On April 14, 2023, the Audit Committee of the Company approved the dismissal of Marcum Asia CPAs LLP (“Marcum Asia”) as our independent registered public accounting firm effective

April 17, 2023.

The Company provided the Marcum Asia with a copy of the foregoing disclosures and requested that the Marcum Asia furnish the Company with a letter addressed to the SEC stating whether

it agrees with the statements made herein and, if not, stating the respects in which it does not agree.

A copy of the letter provided by Marcum Asia, dated March 24, 2023, is filed as Exhibit 16.1 to our Form 8-K/A filed on April 26, 2023.

Engagement of Guangzhou Good Faith CPA LTD

On April 14, 2023, the Company, upon the Audit Committee’s approval, engaged the services of Guangzhou Good Faith CPA LTD ("Good Faith”) as the Company’s new independent

registered public accounting firm to audit the Company’s financial statements for the two years ended December 31, 2021, and December 31, 2022.

During each of the Company’s two most recent fiscal years and through the date of this report, the Company or someone on its behalf did not consult Good Faith with respect

to (i) either:

Engagement of GGF CPA LTD (“GGF”) (fka Guangzhou Good Faith CPA LTD)

On April 14, 2023, the Company, upon the Audit Committee’s approval, engaged the services of GGF CPA LTD ("GGF”) as the Company’s new independent registered public accounting firm to

audit the Company’s financial statements for the two years ended December 31, 2021, and December 31, 2022.

During each of the Company’s three most recent fiscal years and through the date of this report, the Company or someone on its behalf did not consult GGF with respect to (i) either:

the application of accounting principles to a specified transaction, either completed or proposed;

or the type of audit opinion that might be rendered on the Company’s financial statements, or (ii) any other matter that was

either the subject of a disagreement or a reportable event as set forth in Items 304(a)(1)(iv) and (v) of Regulation S-K.

or the type of audit opinion that might be rendered on the Company’s financial statements, or (ii) any other matter that was either the subject of a

disagreement or a reportable event as set forth in Items 304(a)(1)(iv) and (v) of Regulation S-K.

Cost of Fees and Services

The following table sets forth fees billed to us by our former independent auditor Marcum Asia for the years ended December 31, 2022 and 2021 for (i) services rendered for the audit of our

annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial

statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

The following table sets forth fees billed to us by our current independent auditor GGF for the year ended December 31, 2023 and former independent auditor Marcum Asia for the years

ended December 31, 2022 for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance

of the audit or review of our consolidated financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

Audit-related fees

All other fees

Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual consolidated financial statements and the review of our interim

consolidated financial statements.

Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual consolidated financial statements and the review of our

interim consolidated financial statements.

Prior to Marcum Asia’s dismissal, Marcum Asia’s engagement was approved by the audit committee of the Board and ratified by the Board.

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The audited balance sheet of the Company as of December 31, 2023, the related statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the year then ended, the

footnotes thereto, and the report of Good Faith, independent auditors, are filed herewith.

footnotes thereto, and the report of GGF, independent auditors, are filed herewith.

Financial Schedules:

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The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.

Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement.

Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the

These representations and warranties:

may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in

the agreements;

may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;

may apply standards of materiality that differ from those of a reasonable investor;

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Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time.

Investors should not

rely on them as statements of fact.

Investors should

not rely on them as statements of fact.

Exhibit Number

Constitution of Cenntro Electric Group Limited ACN 619 054 938 (incorporated by reference to Exhibit 3.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Specimen Ordinary Share Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the

SEC on January 5, 2022).

Stock Purchase Agreement, dated November 5, 2021, by and among Naked Brand Group Limited ACN 619 054 938, Cenntro Automotive Group Limited (Cayman), Cenntro Automotive Group

Limited (Hong Kong), Cenntro Automotive Corporation and Cenntro Electric Group, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC

on November 8, 2021).

Local Sale and Purchase Agreement, dated December 30, 2021, by and between Naked Brand Group Limited and Cenntro Automotive Group Limited (Cayman) (incorporated by reference to

Exhibit 10.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

Amended and Restated Articles of Incorporation of Cenntro Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K12-b, File No.

001-38544, filed with the SEC on February 27,

Scheme Implementation Agreement (dated September 8, 2023 between CEGL and Cenntro Inc.)( incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form

8-K12-b, File No.

001-38544, filed with the SEC on February 27, 2024)

2023 Equity Incentive Plan (and Forms of Stock Option Agreement, Cash-Settled Option Agreement, Restricted Stock Agreement and Restricted Stock Unit Agreement (and each agreement’s Notice of

Exercise and Grant Notice, as applicable)) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K12-b, File No.

001-38544, filed with the SEC on February 27, 2024).

Plant Lease Agreement, dated December 2020, by and between Administrative Commission of Changxing Branch, Huzhou Taihu South Industrial Zone and Cenntro Automotive Group Limited (Hong Kong)

(English Translation) (incorporated by reference to Exhibit 10.8 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Registration Rights Agreement, dated December 30, 2021, by and among Naked Brand Group Limited and the parties thereto (incorporated by reference to Exhibit 10.2 to the

Company’s Report of Foreign Private Issuer on Form 6-K, File No.

Employment Agreement, dated August 20, 2017, by and between Mr.

Wang and Cenntro Automotive Group Limited (incorporated by reference to Exhibit 10.9 to the Company’s Report of Foreign

Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Relationship Agreement, dated December 30, 2021, by and among Naked Brand Group Limited, Peter Z.

Wang, Cenntro Enterprise Limited and Trendway Capital Limited (incorporated by

Amended and Restated Offer Letter, dated June 28, 2021, by and between Edmond Cheng, Cenntro Automotive Group Limited and, for limited purposes, Cenntro Electric Group, Inc (incorporated by

reference to Exhibit 10.10 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on

November 8, 2021).

Cenntro Electric Group Limited 2022 Stock Incentive Plan (and Forms of Stock Option Agreement, Cash-Settled Option Agreement, Restricted Stock Agreement and Restricted Stock

Unit Agreement (and each agreement’s Notice of Exercise and Grant Notice, as applicable)) (incorporated by reference to Exhibit 10.5 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the

SEC on January 5, 2022).

Cenntro Electric Group Limited 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 to the Company’s Report of Foreign Private Issuer on Form 6-K, File

001-38544, filed with the SEC on January 5, 2022).

Cenntro Electric Group Limited Amended and Restated 2016 Incentive Stock Option Plan (incorporated by reference to Exhibit 10.7 to the Company’s Report of Foreign Private Issuer

on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Plant Lease Agreement, dated December 2020, by and between Administrative Commission of Changxing Branch, Huzhou Taihu South Industrial Zone and Cenntro Automotive Group Limited

(Hong Kong) (English Translation) (incorporated by reference to Exhibit 10.8 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Employment Agreement, dated August 20, 2017, by and between Peter Z.

Wang and Cenntro Automotive Group Limited (incorporated by reference to Exhibit 10.9 to the Company’s Report

of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Amended and Restated Offer Letter, dated June 28, 2021, by and between Edmond Cheng, Cenntro Automotive Group Limited and, for limited purposes, Cenntro Electric Group, Inc

(incorporated by reference to Exhibit 10.10 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Addendum to Amended and Restated Offer Letter, dated October 1, 2021, by and between Edmond Cheng and Cenntro Automotive Group Limited (incorporated by reference to Exhibit

10.11 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Offer Letter, dated June 1, 2021, by and between Marianne McInerney and Cenntro Automotive Group Limited (incorporated by reference to Exhibit 10.12 to the Company’s Report of

Foreign Private Issuer on Form 6-K, File No.

Addendum to Amended and Restated Offer Letter, dated October 1, 2021, by and between Mr.

Edmond Cheng and Cenntro Automotive Group Limited (incorporated by reference to Exhibit 10.11 to the

Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Employment Agreement, dated as of August 20, 2017, by and between Mr.

Ming He and Cenntro Automotive Group Limited.

Employment Agreement, dated as of August 17, 2017, by and between Mr.

Tony Tsai and Cenntro Automotive Corporation.

Entrustment Agreement, dated December 4, 2021, by and between Cenntro Electric Group, Inc.

and Cedar Europe GmbH (incorporated by reference to Exhibit 10.21 to the Company’s

Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Lease Agreement for Commercial Space, dated as of December 26, 2021, by and between Cedar Europe GmbH and Stefan Schoppmann (English Translation) (incorporated by reference to

Exhibit 10.22 to the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

and Cedar Europe GmbH (incorporated by reference to Exhibit 10.21 to the Company’s Report of Foreign

Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

Term Sheet, dated December 30, 2021, by and among Naked Brand Group Limited, Bendon Limited and FOH Online Corp (incorporated by reference to Exhibit 10.23 to the Company’s

Report of Foreign Private Issuer on Form 6-K, File No.

Lease Agreement for Commercial Space, dated as of December 26, 2021, by and between Cedar Europe GmbH and Stefan Schoppmann (English Translation) (incorporated by reference to Exhibit 10.22 to

the Company’s Report of Foreign Private Issuer on Form 6-K, File No.

001-38544, filed with the SEC on January 5, 2022).

1 unchanged sentence

and Mosolf SE & Co.

KG (incorporated by reference to Exhibit 10.1 to

the Report of Foreign Private Issuer on Form 6-K filed with the SEC on March 9, 2022).

Lease Agreement, dated January 20, 2022, by and between Jax Industrial One, Ltd., as Landlord, and Cenntro

Automotive Corporation, as Tenant, (incorporated by reference to Exhibit 4.26 to the Annual Report Form 20-F filed by the registrant on April 25, 2022).

First Lease Amendment, dated as of February 17, 2022, by and among Jax Industrial One, Ltd., as Landlord, Cenntro

Automotive Corporation, as Tenant, and Cenntro Electric Group Limited, as Guarantor, (incorporated by reference to Exhibit 4.27 to the Annual Report Form 20-F filed by the registrant on April 25, 2022).

KG (incorporated by reference to Exhibit 10.1 to the Report of

Foreign Private Issuer on Form 6-K filed with the SEC on March 9, 2022).

Lease Agreement, dated January 20, 2022, by and between Jax Industrial One, Ltd., as Landlord, and Cenntro Automotive Corporation, as Tenant, (incorporated by reference to Exhibit 4.26 to the

Annual Report Form 20-F filed by the registrant on April 25, 2022).

First Lease Amendment, dated as of February 17, 2022, by and among Jax Industrial One, Ltd., as Landlord, Cenntro Automotive Corporation, as Tenant, and Cenntro Electric Group Limited, as

Guarantor, (incorporated by reference to Exhibit 4.27 to the Annual Report Form 20-F filed by the registrant on April 25, 2022).

Share and Loan Purchase Agreement, dated as of December 13, 2022, by and among Cenntro Electric Group, Inc.

and Mosolf SE & Co.

KG (incorporated by reference to Exhibit 10.1

to the Report of Foreign Private Issuer on Form 6-K filed with the SEC on December 16, 2022).

Placement Agency Agreement, dated as of July 20, 2022 , by and between Cenntro Electric Group Limited and Univest Securities, LLC, as placement agent (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed with the SEC on July 21, 2022).

Securities Purchase Agreement, dated as dated as of July 20, 2022 , by and among Cenntro Electric Group Limited and certain accredited investors, (incorporated by reference to

Exhibit 10.2 to the Report of Foreign Private Issuer on Form 6-K filed with the SEC on July 21, 2022).

KG (incorporated by reference to Exhibit 10.1 to the Report of

Foreign Private Issuer on Form 6-K filed with the SEC on December 16, 2022).

Placement Agency Agreement, dated as of July 20, 2022 , by and between Cenntro Electric Group Limited and Univest Securities, LLC, as placement agent (incorporated by reference to Exhibit 10.1

to the Report of Foreign Private Issuer on Form 6-K filed with the SEC on July 21, 2022).

Securities Purchase Agreement, dated as dated as of July 20, 2022 , by and among Cenntro Electric Group Limited and certain accredited investors, (incorporated by reference to Exhibit 10.2 to

the Report of Foreign Private Issuer on Form 6-K filed with the SEC on July 21, 2022).

Share and Loan Purchase Agreement, dated as of March 5, 2022, by and among Cenntro Electric Group, Inc.

and Mosolf SE & Co.

KG (incorporated by reference to Exhibit 10.1 to

the Report of Foreign Private Issuer on Form 6-K filed with the SEC on March 9, 2022).

Code of Ethics (incorporated by reference Exhibit 11.1 to the Annual Report on Form 20-F filed by the registrant on June 14, 2019).

KG (incorporated by reference to Exhibit 10.1 to the Report of

Foreign Private Issuer on Form 6-K filed with the SEC on March 9, 2022).

Cenntro Code of Ethics (incorporated by reference Exhibit 14.1 to the Company’s Current Report on Form 8-K12-b, File No.

001-38544, filed with the SEC on February 27, 2024).

Cenntro Insider Trading Policy

List of Subsidiaries.

Consent of Guangzhou Good Faith CPA LTD

Powers of Attorney (the signature page to this registration statement)

2 unchanged sentences

Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.

Cenntro Policy Related to Recovery of Erroneously Awarded Compensation

Inline XBRL Instance Document.

5 unchanged sentences

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

† Information in this exhibit identified by brackets is confidential and has been excluded pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) the

type the Company treats as private or confidential.

+ Management contract or compensatory plan

FORM 10-K SUMMARY

We have elected not to provide a summary of the information provided in this annual report on Form 10-K.

Pursuant to the requirements of Section 13 or 15(d) 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

CENNTRO ELECTRIC GROUP LIMITED

Chief Executive Officer

5 unchanged sentences

Wang and Edmond Cheng, jointly and severally, his or her attorney-in-fact, with the power of substitution,

for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,

hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in

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Chairman of the Board and Chief Executive Officer

June 30, 2023

April 1, 2024

(Principal Executive Officer)

/s/ Edmond Cheng

Chief Financial Officer

June 30, 2023

/s/ Edward Ye

Acting Chief Financial Officer

April 1, 2024

(Principal Accounting Officer)

/s/ Benjamin B.

June 30, 2023

April 1, 2024

/s/ Jiawei “Joe” Tong

June 30, 2023

April 1, 2024

Jiawei “Joe” Tong

/s/ Christopher Thorne

June 30, 2023

Christopher Thorne

June 30, 2023

INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

/s/ Stephen Markscheid

April 1, 2024

Stephen Markscheid

April 1, 2024

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

1 unchanged sentence

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated and Combined Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021

Consolidated and Combined Statements of Changes in Equity for the years ended December 31, 2022 and 2021

Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to the Consolidated and Combined Financial Statements

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022

Consolidated Statements of Changes in Equity for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

Opinion on the Financial Statements

audited the accompanying consolidated balance sheets of Cenntro Electric Group Limited (the “Company”) as of December 31, 2022, and the related consolidated statements of income and comprehensive income, changes in shareholders’

equity, and cash flows for the year then ended, and the related notes to the financial statements (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all

material respects, the consolidated financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in

the United States of America.

We have audited the accompanying consolidated balance sheets of Cenntro Electric Group Limited (the “Company”) as of December 31, 2023, and the related consolidated statements of income and comprehensive

income, changes in shareholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial

statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on the entity’s financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our responsibility is to express an opinion on the entity’s financial statements based on our audit.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the

applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over

financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and

performing procedures that respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to

obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Guangzhou Good Faith CPA LTD

/s/ GGF CPA LTD

We have served as the Company’s auditor since 2023.

Guangzhou, People's Republic of China

June 30, 2023

CENNTRO ELECTRIC GROUP LIMITED

April 1, 2024

BALANCE SHEETS

4 unchanged sentences

Restricted cash

Short-term investment

Accounts receivable, net

3 unchanged sentences

Non-current assets:

Equity method investments

Long-term investments

Investment in equity securities

2 unchanged sentences

Right-of-use assets

Amount due from related parties - non-current

Other non-current assets, net

7 unchanged sentences

Convertible promissory notes

Contingent liabilities

Deferred government grant, current

2 unchanged sentences

Non-current liabilities:

Other non-current liabilities

Contingent liabilities non-current

Deferred tax liabilities

Deferred government grant, non-current

16 unchanged sentences

Total Liabilities and Equity

The accompanying notes are an integral part of these consolidated and combined financial statements.

CENNTRO ELECTRIC GROUP LIMITED

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in U.S.

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Cost of goods sold

Gross (loss) profit

Gross profit (loss)

OPERATING EXPENSES:

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OTHER EXPENSE:

Interest expense, net

Loss on redemption of convertible promissory notes

(Loss) income from equity method investments

Interest (income)/expense, net

Gain (loss) on redemption of convertible promissory notes

(Loss) income from long-term investments

Change in fair value of convertible promissory notes and derivative liability

3 unchanged sentences

Impairment loss of goodwill

Other (expense) income, net

Loss from acquisition of Antric

Loss on exercise of warrants

Gain from cross-currency swaps

Other income/ (expense), net

Loss before income taxes

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Loss per share, basic and diluted

* The share numbers are retroactively stated

for purposes of calculating weighted average number of shares outstanding for loss per share to reflect the outstanding shares of CEGL as if the equity

structure of Cenntro (the accounting acquirer) was stated to reflect the number of shares of CEGL (the accounting acquiree) issued in the Combination.

The accompanying notes are an integral part of these consolidated and combined financial statements.

CENNTRO ELECTRIC GROUP LIMITED

CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY

* On September 1, 2023 the Company held its annual general meeting of shareholders where

among other proposals, the shareholders of the Company did approve the consolidation of the ordinary shares of the Company on a one-for-ten

(1:10) basis with effect from December 8, 2023.

The one-for-ten

reverse stock split decreased the number of outstanding shares and increased net loss per common share.

All per share and share amounts presented have been retroactively adjusted for the effect of this share consolidation for all

periods presented.

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in U.S.

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Balance as of January 1, 2022

Share-based compensation

Exemption of debt due from shareholders

Reduction of capital investment

Reverse recapitalization transaction with Naked Brand Group Limited, net of transaction cost

Liquidation of subsidiary

Foreign currency translation adjustment

Balance as of December 31, 2021

( 109,735,935

5 unchanged sentences

( 112,145,263

Acquisition of 65 % of CAE’s equity interests

Foreign currency translation adjustment

Balance as of December 31, 2022

( 219,824,176

Share-based compensation

Acquisition of 35 % of CAE’s equity

Exercise of warrants

Fractional shares issued due to reverse stock split

Foreign currency translation adjustment

1 unchanged sentence

( 274,023,501

* The share numbers are retroactively stated to reflect the outstanding

shares of CEGL issued in the Combination.

The accompanying notes are an integral part of these consolidated and combined financial statements.

CENNTRO ELECTRIC GROUP LIMITED

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOW

September 1, 2023 the Company held its annual general meeting of shareholders where among other proposals, the shareholders of the Company did approve the consolidation of the ordinary shares of the Company on a one-for-ten (1:10) basis with effect from December 8, 2023.

The one-for-ten reverse stock split decreased the number of outstanding shares and increased net loss per common share.

All per share

and share amounts presented have been retroactively adjusted for the effect of this share consolidation for all periods presented.

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

CONSOLIDATED STATEMENTS OF CASH FLOW

(Expressed in U.S.

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Depreciation and amortization

Amortization of operating lease right-of-use asset

Amortization and interest of operating lease right-of-use asset

Impairment of property, plant and equipment

6 unchanged sentences

Convertible promissory notes issuance costs

Loss on redemption of convertible promissory notes

(Gain) Loss on redemption of convertible promissory notes

Loss on exercise of warrants

Changes in fair value of convertible promissory notes and derivative liabilities

2 unchanged sentences

Share-based compensation expense

Government grants of federal loan forgiven

Gain from disposal of plant and equipment

Gain from disposal of long-term investment

Equity pickup of the equity investment

Loss (Gain) from disposal of plant and equipment

Loss from long-term investments

Income from short-term investment

Loss from acquisition of Antric Gmbh

Deferred income taxes

Changes in operating assets and liabilities:

6 unchanged sentences

Long-term payable

Operating lease liabilities

Operating lease assets and liabilities

Net cash used in operating activities

1 unchanged sentence

Purchase of equity investment

Proceeds from disposal of long-term investment

Cash payment for long-term investment payable

Purchase of plant and equipment

Purchase of convertible note from Acton

Purchase of wealth management products purchased from banks

Purchase of land, plant and equipment

Purchase of land use rights and property

Acquisition of 65 % of CAE’s equity

Acquisition of CAE’s equity interests

Payment of expense for acquisition of CAE’s equity interests

Cash acquired from acquisition of CAE

Acquisition of Antric Gmbh’s equity interests

Cash acquired from acquisition of Antric Gmbh

Purchase of equity securities

Proceeds from disposal of land use rights and property

Proceeds from disposal of property, plant and equipment

Loans provided to third parties

Loans provided to related parties

Repayment of loans from related parties

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Loans proceeds from related parties

Repayment of loans to related parties

Repayment of loans to third parties

Proceeds from bank loans

Repayments of bank loans

Purchase of CAE’s loan

Reduction of capital

Cash proceed from reversed recapitalization

Loan proceeds from Naked Brand Group Limited

Proceed from issuance of convertible promissory notes

6 unchanged sentences

( 124,524,904

( 107,568,161

Cash, cash equivalents and restricted cash at beginning of year

2 unchanged sentences

Interest paid

Income tax paid

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Cashless exercise of warrants

Right of use asset financed by lease liabilities

Exemption of debt due from shareholders

Direct cost related to reverse recapitalization payable

Reduction of capital investment recorded as due to related parties

Non-cash capital injection to Robostreet by i-Chassis

Convention from debt to equity interest of HW Electro Co., Ltd.

Non-cash recognition of new leases

The accompanying notes are an integral part of

these consolidated and combined financial statements.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND

COMBINED FINANCIAL STATEMENTS

these consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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NBG changed its name to Cenntro Electric Group Limited (“CEGL”) on December 30, 2021, in connection with the closing of the Combination.

CAC, CEG and CAG HK and its consolidated subsidiaries are collectively known as “Cenntro”;

CEGL and Cenntro 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.

On March 25, 2022 and January 31, 2023,the Company entered into Share Purchase Agreements to acquire 65 % and 35 % of the issued and outstanding shares in Cenntro

Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH.

On March 25, 2022 and January 31, 2023, CEGL 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 this Annual Report, “Business Combination”.

CAC, CEG and CAG HK and its consolidated subsidiaries are collectively known as

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.

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, CEG and CAG HK, whereby CEGL purchased from CAG Cayman (i) all of the issued and outstanding ordinary shares of

CAG HK, (ii) all of the issued and outstanding shares of common stock, par value $ 0.001 per share, of CAC, and (iii) all of the

issued and outstanding shares of common stock, par value $ 0.01 per share, of CEG, in exchange for an aggregate purchase price

of (i) 174,853,546 newly issuing ordinary shares of CEGL and (ii) the assumption of options to purchase an aggregate of 9,225,271 ordinary shares under the Cenntro Electric Group Limited Amended & Restated 2016 Incentive Stock Option Plan (the “Amended 2016

The Combination closed on December 30, 2021.

Immediately prior to the consummation of the Combination, there were 86,402,708

ordinary shares of NBG issued and outstanding.

In connection with the closing of the Combination, CEGL changed its name from “Naked Brand Group Limited” to “Cenntro Electric Group Limited”.

Promptly following the closing of the Combination, CAG Cayman distributed the Acquisition Shares to the holders of its capital stock in

accordance with (i) the distribution described in the Acquisition Agreement and (ii) CAG Cayman’s Third Amended and Restated Memorandum and Articles of Association.

Pursuant to the Acquisition Agreement, at the closing of the Combination,

NBG assumed the Amended 2016 Plan and each CAG Cayman employee stock option outstanding immediately prior to the closing of the Combination under the Amended 2016 Plan was converted into an option to purchase a number of ordinary shares

equal to the aggregate number of CAG Cayman shares for which such stock option was exercisable immediately prior to the closing of the Combination multiplied by the exchange ratio of 0.71536 (the “Exchange Ratio”), as determined in accordance with the Acquisition Agreement, at an option exercise price equal to the exercise price per share of such stock option

immediately prior to the closing of the Combination divided by the Exchange Ratio.

agreement, dated as of November 5, 2021 (the “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEG and CAG HK.

Cenntro was deemed to be the accounting acquirer given Cenntro effectively controlled the consolidated entity after the Combination.

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recapitalization.

Cenntro is deemed to be the predecessor for accounting purposes and the historical financial statements of Cenntro became CEGL’s historical financial statements, with retrospective adjustments to give effect to the

reverse recapitalization.

The financial statements for periods prior to the consummation of the reverse recapitalization are the combined financial statements of CAC, CEG and CAG HK and its consolidated subsidiaries.

The following table shows the net cash proceeds from the reverse recapitalization:

Reverse recapitalization

transaction costs - paid in FY2021

transaction costs - paid in FY2022

Net cash contributions from reverse recapitalization

As of December 31, 2023, CEGL’s subsidiaries are as follows:

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indirect economic

Cenntro Electric CICS, SRL

November 30, 2022

Santo Domingo, Dominican Republic

Cenntro Automotive Corporation (“CAC”)

March 22, 2013

Delaware, U.S.

100 % owned by CEGL

Cenntro Electric Group, Inc.

March 9, 2020

Delaware, U.S.

100 % owned by CEGL

Cennatic Power, Inc.

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100 % owned by CEGL

Cenntro Automotive Europe GmbH (“CAE”)

Herne, Germany

owned by CEGL

Cenntro Electric Group (Europe) GmbH (“Cenntro Electric”)

Teemak Power Corporation

January 31, 2023

Düsseldorf, Germany

Delaware, U.S.

100 % owned by CEGL

Avantier Motors Corporation

November 27, 2017

Delaware, U.S.

100 % owned by CEGL

Cenntro Electric CICS, SRL

November 30, 2022

Santo Domingo, Dominican Republic

99 % owned by CEGL

Cennatic Energy S.

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Monterrey, Mexico

and 1 % owned by Cennatic Power and CAC, respectively

Cenntro Electric B.V.

December 12, 2022

Amsterdam, Netherlands

100 % owned by CEGL

Cenntro Automotive Corporation (“CAC”)

March 22, 2013

Delaware, U.S.

Cenntro Automotive S.A.S.

January 16, 2023

Galapa, Colombia

100 % owned by CEGL

Cenntro Electric Group, Inc.

Cenntro Electric Colombia S.A.S.

March 29, 2023

Delaware, U.S.

Atlántico, Colombia

100 % owned by CEGL

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100 % owned by CEGL

Simachinery Equipment Limited (“Simachinery HK”)

100 % owned by CAG HK

Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”)

100 % owned by CEGL

Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”)

100 % owned by CEGL

Zhejiang Cenntro Machinery Co., Limited

January 20, 2021

100 % owned by CAG HK

100 % owned by CEGL

Jiangsu Tooniu Tech Co., Limited

December 19, 2018

100 % owned by CAG HK

Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”)

100 % owned by CAG HK

Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”)

100 % owned by CAG HK

100 % owned by CEGL

Hangzhou Hengzhong Tech Co., Limited

December 16, 2014

100 % owned by CEGL

Teemak Power (Hong Kong) Limited (HK)

100 % owned by CEGL

Avantier Motors (Hong Kong) Limited

March 13, 2023

100 % owned by CEGL

Cenntro Automotive Europe GmbH (“CAE”)

Herne, Germany

100 % owned by CEGL

Cenntro Electric B.V.

December 12, 2022

Amsterdam, Netherlands

100 % owned by CEGL

Cenntro Elektromobilite Araçlar A.Ş

February 21, 2023

100 % owned by CEGL

Cenntro Elecautomotiv, S.L.

Barcelona, Spain

100 % owned by CEGL

Cenntro Electric Group (Europe) GmbH (“CEGE”)

January 13, 2022

Düsseldorf, Germany

100 % owned by CEGL

Simachinery Equipment Limited (“Simachinery HK”)

100 % owned by CEGL

Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”)

June 16, 2011

100 % owned by Simachinery HK

100 % owned by CEGL

Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”)

July 12, 2012

100 % owned by Cenntro Hangzhou

Hangzhou Hengzhong Tech Co., Limited

December 16, 2014

100 % owned by Cenntro Hangzhou

Zhejiang Xbean Tech Co., Limited*

December 28, 2016

100 % owned by Sinomachinery Zhejiang

Zhejiang Xbean Tech Co., Limited was in the liquidation process as of December 31, 2022.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

100 % owned by CEGL

Cenntro EV Center Italy S.R.L.

100 % owned by CEGL

August 21, 2020

100 % owned by CEGL

Pikka Electric Corporation

August 3, 2023

Delaware, U.S.

100 % owned by CEGL

Centro Technology Corporation

August 24, 2023

California, U.S.

100 % owned by CEGL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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Basis of presentation

The consolidated and combined financial statements have been prepared in accordance with

accounting principles generally accepted in the United States of America (“U.S.

As an Australian public limited company, the Company is subject to the Corporations Act 2001 (the “Corporations Act”), which requires financial

statements be prepared and audited in accordance with Australian Auditing Standards (“AAS”) and International Financial Reporting Standards (“IFRS”).

The consolidated and combined financial statements are not financial statements for the

purposes of the Corporations Act and are considered “non-IFRS financial information” under the Australian Securities and Investment Commission’s Regulatory guide 230:

‘Disclosing non-IFRS financial information.’ Such non-IFRS financial

information may not be comparable to similarly titled information presented by other entities and should not be construed as an alternative to other financial information prepared in accordance with AAS or IFRS.

The combined financial statements include the combined financial statements of Cenntro from

the dates they were acquired or incorporated, which includes (a) the combined statements of operations and comprehensive loss, changes in equity and cash flows for the periods from January 1, 2021 to December 30, 2021.

The consolidated

financial statements include (a) the consolidated balance sheet as of December 31, 2022 and 2021;

and (b) consolidated statements of operations and comprehensive loss, changes in equity and cash flows for the period from December 31, 2021

to December 31, 2022.

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

The consolidated financial statements have been prepared in accordance with accounting

principles generally accepted in the United States of America (“U.S.

As an Australian public limited company, the Company is subject to the Corporations Act 2001 (the “Corporations Act”), which requires financial statements be

prepared and audited in accordance with Australian Auditing Standards (“AAS”) and International Financial Reporting Standards (“IFRS”).

The consolidated financial statements are not financial statements for the purposes of the

Corporations Act and are considered “non-IFRS financial information” under the Australian Securities and Investment Commission’s Regulatory guide 230:

‘Disclosing non-IFRS financial information.’ Such non-IFRS financial information may

not be comparable to similarly titled information presented by other entities and should not be construed as an alternative to other financial information prepared in accordance with AAS or IFRS.

All intercompany balances and transactions have been eliminated in consolidation and

Use of estimates

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GAAP requires the Company’s management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, and the reported amounts of revenue and expenses during

the reporting period.

The Company continually evaluates these estimates and assumptions based on the most recently available information, historical experience and various other assumptions that the Company believes to be reasonable under

the circumstances.

Significant accounting estimates reflected in the Company’s consolidated and combined financial statements include, but are not limited to, estimates and judgments applied in determination of provision for doubtful

accounts, 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.

that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting

circumstances.

Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, estimates and judgments applied in determination of provision for doubtful accounts, lower of

cost and net realizable value of inventories, impairment losses for long-lived assets and investments, goodwill, 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.

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receivable, prepayments and other current assets, amount due from and due to related parties, accounts payable and accrued expenses and other current liabilities.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, prepayment and other current assets, accounts

payable, accrued expenses and other current liabilities and amount due from and due to related party, current 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 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.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, prepayment, goodwill and other current assets,

accounts payable, accrued expenses and other current liabilities and amount due from and due to 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 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 convertible promissory notes due to the complexity of the various conversion and settlement

options available to notes holders.

The convertible promissory notes accounted for under the fair value option election are each a debt host financial instrument

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) cross-currency swap, which was recognized as 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

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The estimated fair value adjustment is presented in a

respective single line item within other income (expense) in the consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.

respective single line item within other expense in the consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.

In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company.

3 unchanged sentences

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund

The Company’s investments valued at NAV as a practical expedient are private equity funds, which represent the investment in equity securities on the consolidated balance sheet.

The Company’s investments valued at NAV as a practical expedient are:

i) private equity funds, which represent the investment in equity securities on the consolidated balance sheet;

ii) wealth management products purchased

from banks, which represents the available-for-sale investments in short-term investments on the consolidated balance sheet.

Business combination

6 unchanged sentences

(ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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Accounts receivable are recognized and carried at net realizable value.

Provision for doubtful accounts is recorded for periods in which

the Company determines a loss is probable, based on its assessment of specific factors, such as troubled collections, historical experience, accounts aging, ongoing business relations and other factors.

Account balances are charged off

against the provision after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company 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.

Management used an expected credit loss model for the impairment

of accounts receivable as of period ends.

Management believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines expected credit losses for accounts receivables using an aging

schedule as of period ends.

The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to reflect the effects of those differences in current

conditions and forecasted changes.

Management measured the expected credit losses of accounts receivable on a collective basis.

When an accounts receivable does not share risk characteristics with other accounts receivables, management

will evaluate such accounts receivable for expected credit loss on an individual basis.

Doubtful accounts balances are written off and deducted from allowance, when receivables are deemed uncollectible, after all collection efforts have

been exhausted and the potential for recovery is considered remote.

Inventories are stated at the lower of cost or net realizable value.

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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 consolidated and combined statements of operations and comprehensive

Write-downs are recorded in the consolidated statements of operations and comprehensive loss.

Available-for-sale investments and Debt Security investments

The Company’s available-for-sale investment

consist of wealth management products purchased from banks and convertible loans.

The Company’s short-term available-for-sale investment are classified as short-term investments on the consolidated balance sheets based on the

contractual maturity date which is less than one year.

The wealth management products purchased from banks are stated at the net asset value

The Company’s debt security investments consist

of convertible loan.

At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible

loan as of the date of such conversion by the applicable conversion price.

The convertible loans are stated at fair value.

The Company reviews its investments for

other-than-temporary impairment (“OTTI”) based on the specific identification method.

The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments.

If the cost of an

investment exceeds the investment’s fair value, the Company considers, among other factors, general market conditions, expected future performance of the investees, the duration and the extent to which the fair value of the investment

is less than the cost, and the Company’s intent and ability to hold the investment.

OTTI is recognized as a loss in the statement of operations.

There is no OTTI recognized during the years ended December 31, 2023 and 2022.

Cross-currency

The Company used cross-currency swap contracts to

manage its exposures to movements in foreign exchange rates primarily related to the RMB or Renminbi.

The use of these cross-currency swap modifies the Company’s exposure to these risks with the goal of reducing the risk or cost to the

The Company does not use derivatives for trading purposes and is not a party to leveraged derivative contracts.

Depending on the nature of the underlying risk being hedged, these cross-currency swap are accounted for either as cash flow, net

investment or mark to market hedges against changes in the value of the hedged item.

Derivatives are recorded in the Consolidated Balance Sheets at fair value.

The fair value is based upon either market quotes for actively traded

instruments or independent bids for nonexchange traded instruments.

The accounting for changes in fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging

relationship.

The Company determines whether a derivative instrument meets the criteria for cash flow or net investment hedge accounting treatment on the date the derivative is executed.

Derivatives accounted for as mark to market

hedges are not designated as hedges for accounting purposes.

Economic Hedges

A derivative instrument whose change in fair

value is used to hedge against changes in the value of a hedged item, but which is not designated as a hedge under ASC815 “Derivative Instruments and Hedging Activities”, is accounted for as an economic hedge.

These derivatives are

recorded at fair value in the Consolidated Balance Sheets when the hedged item is recorded as an asset or liability and then are revalued each accounting period.

Changes in the fair value of derivatives accounted for as economic

hedges are reported in the “Gain from cross-currency swaps” lines under “Other expense” in the Consolidated Statements of Operations.

Cash flows from derivatives not designated as hedges are classified as cash flows from operating

activities in the Consolidated Statements of Cash Flows.

For the year ended December 31, 2023, all of the cross-currency swap contracts were accounted for as economic hedges.

Investment in equity securities

3 unchanged sentences

comprehensive loss.

The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates

such determinations at each balance sheet date.

The private equity funds are measured at fair value with gains and losses recognized in earnings.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to

measure the fair value of the Fund.

The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date.

private equity funds are measured at fair value with gains and losses recognized in earnings.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the Fund.

The Company evaluates whether an investment is other-than-temporarily impaired based on the specific facts and circumstances.

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The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any

gain or loss is included in the consolidated and combined statements of operations and comprehensive loss.

The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are

gain or loss is included in the consolidated statements of operations and comprehensive loss.

The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

The Company constructs certain of its property including recodifications and improvement of its office buildings and plant.

5 unchanged sentences

Land use rights

45.75 - 50 years

Impairment of long-lived assets

13 unchanged sentences

Impairment loss for long-lived assets of $ 431,319

and $ 6,215 were recorded in the Company’s consolidated and combined statements of operations and comprehensive loss for the

years ended December 31, 2022 and 2021, respectively.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

and $ 3,917,537 were recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended

December 31, 2023 and 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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excess, limited to the total amount of goodwill allocated to that reporting unit.

The Company adopted ASU No.

2017-14, simplifying the Test for Goodwill Impairment on January 1, 2022.

The Company has the option to choose whether it will

apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly.

If the Company chooses to apply a qualitative assessment first, it starts the goodwill impairment

test by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the Company determines that it is more likely than not the fair value of a

reporting unit is less than its carrying amount, the quantitative impairment test is mandatory.

Otherwise, no further testing is required.

The quantitative impairment test consists of comparison of the fair value of a reporting unit to

its carrying amount.

Application of a goodwill impairment test requires significant management judgments, including the identification of reporting units, assigning assets and

In applying the goodwill impairment assessment, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

Qualitative factors may include, but are not limited to, economic, market and industry conditions, cost factors and overall financial performance of the reporting unit.

If after assessing these qualitative factors, the Company

determines it is “more-likely-than not” that the fair value is less than the carrying value, a quantitative assessment of goodwill is required.

The quantitative impairment test requires significant management judgments, including the identification of reporting units, assigning assets and

liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit.

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Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

Impairment loss for goodwill of $ 11,111,886

and nil were recorded for the years ended December 31, 2022 and 2021, respectively.

Investment in equity investees

Impairment loss for goodwill of $ nil and $ 11,111,886 were recorded for the years ended December 31, 2023 and 2022, respectively.

Long-term investment

Equity method investments

Investee companies over which the Company has the ability to exercise

3 unchanged sentences

are also considered in determining whether the equity method of accounting is appropriate.

equity method, the Company initially records its investment at cost and subsequently recognizes the Company’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated and

combined statements of operations and comprehensive loss and accordingly adjusts the carrying amount of the investment.

When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the

Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

The Company reviews its equity method investments for impairment

whenever an event or circumstance indicates that other-than-temporary impairment has occurred.

The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investments.

impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary.

of operations and comprehensive loss and accordingly adjusts the carrying amount of the investment.

When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not

recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

Equity investments without readily

determinable fair values

For investments in an investee over which the

Company does not have significant influence, the Company carries the investment at cost and recognizes income as any dividends declared from distribution of investee’s earnings.

The Company reviews the equity investments without readily

determinable fair values for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable.

An impairment loss is recognized in earnings equal to the difference between the

investment’s carrying amount and its fair value at the balance sheet date of the reporting period for which the assessment is made.

All equity investments, except those accounted for under the equity method of accounting or those

resulting in the consolidation of the investee, be accounted for at fair value with all fair value changes recognized in income.

For equity investments that do not have readily determinable fair values the Company measures the equity

investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company.

Impairment for long-term investment

The Company reviews its long-term investments for impairment whenever an

event or circumstance indicates that other-than-temporary impairment has occurred.

The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its long-term investments.

An impairment charge

is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary.

The adjusted carrying amount of the assets become new cost basis.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

2 unchanged sentences

Revenue recognition

The Company adopted ASC Topic 606 Revenue from Contracts with Customers

with a date of the initial application of January 1, 2018 using the modified retrospective method.

The Company recognizes revenue when goods or services are transferred to

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obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

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

Revenue is recognized at a point in time once the Company has determined that the customer has

obtained control over the product.

Revenue is recognized net of return allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Significant judgement is required to estimate

return allowances.

The Company reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized.

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 Company generates revenue primarily through sales of light-duty

ECVs, sales of ECV parts, and sales of off-road electric vehicles.

Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product.

Revenue is recognized net of return

allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Significant judgement is required to estimate return allowances.

The Company reasonably estimate the possibility of return

based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized.

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 disaggregates the Company’s revenues by product line for the years ended

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Contractual liabilities

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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Foreign currency translation and transaction

The consolidated and combined financial statements are presented in United States dollars (“USD” or “$”).

The functional currency of

certain of CEGL’s PRC subsidiaries is the Renminbi (“RMB”).

The functional currency of CEA is the EUR, and CEGL and its other subsidiaries outside of PRC is the USD.

The consolidated financial statements are presented in

United States dollars (“USD” or “$”).

The functional currency of certain of CEGL’s PRC subsidiaries is the Renminbi (“RMB”).

The functional currency of CAE, CEGE and Antric Gmbh is the EUR, and CEGL and its other subsidiaries in US is

The functional currency of Cenntro Electric CICS, SRL was DOP.

The functional currency of Cenntro Automotive S.A.S.

and Cenntro Electric Colombia S.A.S.

The functional currency of Cenntro Elektromobilite Araçlar A.Ş

Assets and liabilities are translated at the exchange rates as of balance sheet date.

1 unchanged sentence

average exchange rate of the reporting period.

Capital accounts of the consolidated and combined financial statements are translated into USD from RMB at their historical exchange rates when the capital transactions occurred.

adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets.

The rates are obtained from H.10 statistical release of the U.S.

Reserve Board.

Capital accounts of the consolidated financial statements are translated into USD from RMB, EUR, DOP, COP and TRY at their historical exchange rates when the capital transactions occurred.

Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets.

The rates are obtained from H.10 statistical release of the

Federal Reserve Board.

For the Years Ended December 31,

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EUR exchange rate

Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the

dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date.

Foreign exchange gains and losses resulting

from the settlement of such transactions and from re-measurement at year-end are recognized in foreign currency exchange gain/loss, net on the consolidated and combined statement of operations.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Foreign currency transactions denominated in

currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the balance

sheet date are re-measured at the applicable rates of exchange in effect at that date.

Foreign exchange gains and losses resulting from the settlement of such transactions and from re-measurement at year-end are recognized in foreign

currency exchange gain/loss, net on the consolidated statement of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s

Chief Executive Officer, relies upon the consolidated and combined results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company.

As a result of the assessment made by CODM,

the Company has only one reportable segment.

The Company does not distinguish between markets or segments for the purpose of

internal reporting.

Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company.

As a result of the assessment made by CODM, the Company

has only one reportable segment.

The Company does not distinguish between markets or segments for the purpose of internal

The Company’s long-lived assets are substantially located in the PRC and United States.

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The liability remeasured every reporting

period with any change to fair value recorded in the consolidated and combined statements of operations.

period with any change to fair value recorded in the consolidated statements of operations.

Operating lease

The Company adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11.

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other

things (i) allowed the Company to carry forward the historical lease classification;

(ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases and (iii) did not require the Company to

reassess initial direct costs for any existing leases.

Therefore, the Company did not consider its existing land use right that was not previously accounted for as leases under Topic 840.

For all operating leases except for short-term

leases, the Company recognized operating right-of-use assets and operating lease liabilities.

Leases with an initial term of 12 months or less were short-term leases and not recognized as right-of-use assets and lease liabilities on the

consolidated and combined balance sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the

Company’s obligation to make lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments.

interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments.

The operating lease right-of-use

assets also include lease payments made before commencement and exclude lease incentives.

Some of the Company’s lease agreements contained renewal options;

however, the Company did not recognize right-of-use assets or lease liabilities

for renewal periods unless it was determined that the Company was reasonably certain of renewing the lease at inception or when a triggering event occurred.

The Company’s lease agreements did not contain any material residual value

guarantees or material restrictive covenants.

The Company accounts for its lease under ASC 842 Leases, and identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an

identified asset) for a period of time in exchange for consideration.

For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities.

Leases with an initial

term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet.

The Company recognizes lease expense for short-term leases on a straight-line basis over

the lease term.

The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Company’s incremental borrowing rate over a similar term of the lease payments at lease

commencement.

Some of the Company’s lease agreements contain renewal options;

however, the Company do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably

certain of renewing the lease at inception or when a triggering event occurs.

The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments.

Lease expense for lease payments is

recognized on a straight-line basis over the lease term.

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

Non-controlling Interest

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indirectly attributable to the Company’s shareholders.

Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and consolidated and combined statements of operations and other

comprehensive loss are attributed to controlling and non-controlling interests.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and consolidated statements of operations and other comprehensive loss are

attributed to controlling and non-controlling interests.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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Recently issued accounting standards pronouncements

The Group is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

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.

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all

expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Subsequently, the FASB issued ASU No.

2018-19, Codification Improvements

to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards.

Further, the FASB issued ASU No.

2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide

additional guidance on the credit losses standard.

For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early

adoption permitted.

Adoption of the ASUs is on a modified retrospective basis.

The Group will adopt ASU 2016-13 from January 1, 2023.

The Group expects the adoption of this guidance does not have a material impact on the consolidated

financial statements.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a

material impact on the consolidated financial statements upon adoption.

The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of

operations, cash flows or disclosures.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method”.

accounting rules allow entities to expand the use of the portfolio layer method to all financial assets and designate multiple hedged layers within a single closed portfolio.

The new accounting rules also clarify guidance related to hedge

basis adjustments and the related disclosures for these adjustments.

The new accounting rules were effective for the Company starting January 1, 2023.

As the Company does not currently have any fair value hedging programs that leverage

the portfolio layer method, the adoption of the new accounting rules did not have any impact on the Company’s financial condition, results of operations, cash flows or disclosures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

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NOTE 3 – BUSINESS COMBINATION

On March 5, 2022, the

Company entered into a Share and Loan Purchase Agreement (the “Purchase Agreement I”) with Mosolf SE & Co.

KG, a limited liability partnership incorporated under the laws of Germany (“Seller” or “Mosolf” and, together with CEGL and CEG, the

“Parties”), pursuant to which Mosolf agreed to sell to the Company (i) 65 % of the issued and outstanding shares (the “TME Shares”) in

Cenntro Automotive Europe GmbH, previously known as Tropos Motors Europe GmbH, a German limited liability company (“CAE”), and (ii) 100 %

of the shareholder loan (the “Shareholder Loan”) which Mosolf previously provided to CAE (the “CAE Transaction”).

Acquisition of CAE’s equity interests

On March 5, 2022, CEGL

entered into a Share and Loan Purchase Agreement (the “Purchase Agreement I”) with Mosolf SE & Co.

KG, a limited liability partnership incorporated under the laws of Germany (“Seller” or “Mosolf” and, together with CEGL and CEG, the “Parties”),

pursuant to which Mosolf agreed to sell to CEGL (i) 65 % of the issued and outstanding shares (the “TME Shares”) in Cenntro Automotive

Europe GmbH, previously known as Tropos Motors Europe GmbH, a German limited liability company (“CAE”), and (ii) 100 % of the shareholder

loan (the “Shareholder Loan”) which Mosolf previously provided to CAE (the “CAE Transaction”).

CAE was one of Cenntro’s private label channel partners and has been one of Cenntro’s largest customers since 2019.

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closed on March 25, 2022.

At closing of the CAE Transaction, the Company paid Mosolf EUR 3,250,000 (or approximately USD$ 3.6 million) for the purchase of the TME Shares and EUR 11,900,000

At closing of the CAE Transaction, CEGL paid Mosolf EUR 3,250,000 (or approximately USD$ 3.6 million) for the purchase of the TME Shares and EUR 11,900,000

(or approximately USD$ 13.0 million) for the purchase of the Shareholder Loan, for total aggregate consideration of EUR 15,150,000 (or approximately USD$ 16.6

2 unchanged sentences

constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805.

The Company is deemed to be the accounting acquirer and the assets and liabilities of CAE are recorded at the fair value as

of the date of the closing.

On the acquisition date

March 25, 2022, the allocation of the consideration of the assets acquired and liabilities assumed based on their fair value was as follows:

Cash and cash equivalents

Inventories (1)

Other current assets

CEGL is deemed to be the accounting acquirer and the assets and liabilities of CAE are recorded at the fair value as of the

date of the closing.

On December 13, 2022,

CEGL entered into another Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf, pursuant to which Mosolf agreed to sell to CEGL its remaining 35 % of the issued and outstanding shares in CAE in exchange for a purchase price of EUR 1,750,000

(or approximately USD$ 1.86 million) (the “Transaction”).

The Transaction was

closed on January 31, 2023, as a result, CAE became a wholly-owned subsidiary of CEGL.

This transaction was accounted for as equity transactions, no gain or loss was recognized in the consolidated statement of operations.

The difference between the

fair value of the consideration paid and the amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company.

Acquisition of

Antric GmbH’s equity interests

On December 16, 2022, the Company invested EUR 2,500,000

(approximately $ 2,674,500 ) in Antric GmbH, a German company with limited liability, to acquire 25 % of its equity interest, and the investment was accounted for under the equity method.

The Company entered into an agreement with Moritz Heibrock and Eric Diederich (the “Founder”) to acquire the remaining 75 % equity interest of Antric GmbH (“Antric Transaction”), which was closed on August 31, 2023.

The payment terms consisted of (i) purchasing 75 % of the equity interest on the cash consideration of one

euro (EUR 1);

(ii) two hundred euros (EUR 200 ) for every Antric Unit (as defined by the agreement) sold by the Company for a period of ten years

from August 31, 2023, subject to those terms and conditions under that Deed of Sale;

(iii) a cash injection of five hundred thousand euros (EUR 500,000 )

into Antric GmbH by the Company;

and (iv) a loan issued by the Company to Antric for seven hundred thousand euros (EUR 700,000 ) with interest payable to the Company at a rate of 6.5 % per annum for a term of sixty ( 60 ) months.

After the transaction, Antric GmbH became a wholly-owned subsidiary of the Company.

The transaction constitutes a business combination for accounting purposes and is

accounted for using the acquisition method under ASC 805.

The Company is deemed to be the accounting acquirer and the assets and liabilities of Antric GmbH are recorded at the fair value as of the date of the closing.

On the acquisition

date August 31, 2023, total consideration of the transaction was EUR 1,278,327 (approximately $ 1,385,578 ), which was consisted of:

(1) 25 % equity Interest

of Antric previously held by the Company fair valued at EUR 1,042,221 (approximately $ 1,129,663 ) (Loss associated with the "step-acquisition" was recognized in other expenses (see Note 8 (a) (1)), (2) a cash consideration amounted to EUR 1 (approximately $ 1 ), and (3) an

earn-out consideration amounted to EUR 236,106 (approximately $ 255,319 ).

The excess of the purchase price over the net assets acquired was recorded as goodwill, which was $ 223,494 as of December 31, 2023.

Contingent liabilities of $ 256,732 for

earn-out price was recognized as of December 31, 2023.

Fair value of net assets acquired and liabilities assumed

On the acquisition date August 31, 2023, the allocation of the consideration of the assets acquired and liabilities assumed based on their fair value was as

follows (USD:EUR) exchange rate of 1.0839 as of August 31, 2023 was applied:

Cash and Bank Balance

Accounts Receivable

Intangible Assets

Other non-current assets

Loan from CAE

Short Term Borrowing

Trade and Service Liabilities

Deferred Tax Liabilities

Other Liabilities

Total liabilities

Total net assets

Non-controlling interest

Net assets acquired by the Company

The inventories of $ 4,484,007 on the acquisition date was purchased from Cenntro.

Full impairment of goodwill has been provided as of December 31, 2022.

Deferred tax liabilities were calculated based on appreciation fair

value of all intangible assets multiplied by income tax rate.

On December 13, 2022,

the Company entered into another Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf, pursuant to which Mosolf agreed to sell to the Company its remaining 35 % of the issued and outstanding shares in CAE in exchange for a purchase price of EUR 1,750,000

(or approximately USD$ 1.86 million) (the “Transaction”).

The Transaction was closed on January 31, 2023, as a result, CAE became a

wholly-owned subsidiary of the Company.

This transaction was accounted for as equity transactions, no gain or loss was recognized in consolidated statement of operations.

The difference between the fair value of the consideration paid and the

amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company.

NOTE 4 – SHORT-TERM INVESTMENTS

Available-for-sale investment (1)

Cross-currency swap (2)

A vailable-for-sale investment represented wealth management products

purchased from banks, for which the contractual maturity dates are less than one year.

Cross-currency swap was bought by the Company to manage its exposures to

movements in foreign exchange rates primarily related to the RMB .

NOTE 5 - ACCOUNTS RECEIVABLE, NET

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Accounts receivable, net

The changes in the provision for doubtful accounts are as follows:

The changes in the provision for

doubtful accounts are as follows:

For the Years Ended December 31,

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respectively.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

dollars, except for number of shares)

NOTE 6 - PREPAYMENT AND OTHER

CURRENT ASSETS

NOTE 7 – PREPAYMENT AND OTHER CURRENT ASSETS

Prepayment and other current assets consisted of the following:

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Deductible input value added tax

Receivable from a third party (1)

Loans to a third party (2)

Receivable from third parties

Refund for goods and services tax (“GST”) (2)

Prepayment and other current assets

L oan s to a third party represented an

interest-bearing loan to HW Electro Co., Ltd.

with principal amount of $ 1,000,000 as of December 31, 2022, with the

annual interest rate of 5.00 %, which will be due on February 7, 2023 .

On January 31, 2023, the Company entered into a debt conversion agreement with HW Electro Co., Ltd., to convert the loan principal of $ 1,000,000 for 571,930

shares of HW Electro Co., Ltd.’s common stock totaling 3.59 % of its equity interest.

The interest of the loan was

repaid in February 2023 .

G ST is a value-added tax levied on goods and services sold for consumption in Australia.

The balance as of December 31, 2021 was excess GST, which has been refunded in 2022.

NOTE 7 – EQUITY METHOD INVESTMENTS

Receivable from a third party represented the redemption receivable of

equity investment in Micro Money Fund SPC.

The Company redeemed the investment of $ 1,000,000 in November 2023 and

received the payment subsequently in January 2024.

Loans to a third party represented an interest-bearing loan to

HW Electro Co., Ltd.

with principal amount of $ 1,000,000 as of December 31, 2022, with the annual interest rate of 5.00 %, which will be due on February 7, 2023 .

On January 31, 2023, the Company entered into a debt conversion agreement with HW Electro Co., Ltd., to convert the loan principal of $ 1,000,000 for 1,143,860 shares of HW Electro

Co., Ltd.’s common stock totaling 3.00 % of its equity interest.

The interest of the loan was repaid in February 2023 .

NOTE 8 – LONG-TERM INVESTMENTS

Equity method investment, net

Equity method investments consisted of the following:

Antric GmbH (1)

Hangzhou Entropy Yu

Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2)

Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2)

Hangzhou Hezhe Energy Technology Co., Ltd.

1 unchanged sentence

Able 2rent GmbH (DEU) (4)

O n December 16, 2022, the Company invested EUR 2,500,000 (approximately $ 2,674,500 )

in Antric GmbH to

acquire 25 % of its equity interest.

As of December 31, 2022, capital investment of EUR 1,877,083 (approximately $ 2,008,103 )

had been paid to Antric GmbH .

The Company accounts for the investment under the equity method because the Company controls 25 % of voting

interests, and has the ability to exercise significant influence over Antric GmbH .

O n September 25, 2022, the Company invested RMB 15,400,000 (approximately $ 2,232,790 ) 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

On December 16, 2022, the Company

invested EUR 2,500,000 (approximately $ 2,674,500 ) in Antric GmbH to acquire 25 %

of its equity interest.

The Company accounts for the investment under the equity method because the Company controls 25 %

of voting interests, and has the ability to exercise significant influence over Antric GmbH.

On August 31, 2023, the Company acquired the remaining 75 % of its equity interest and Antric GmbH was became a wholly-owned subsidiary of CEGL.

For the year ended December 31, 2023, loss of $ 136,302 from the acquisition of Antric GmbH was recorded .

On September 25, 2022, the Company invested RMB 15,400,000

(approximately $ 2,169,045 ) 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 .

For the year ended December 31, 2022, the Company recognized investment loss of $ 44,301 , based on its proportionate share of equity interest .

O n June 23, 2021, the Company invested RMB 2,000,000 (approximately $ 308,990 ) in

Hangzhou Hezhe to acquire 20 % of its equity interest.

The Company accounts for the investment under the equity

method because the Company controls 33 % of voting interests in board of directors, and has the ability to exercise

significant influence over Hangzhou Hezhe.

For the years ended December 31, 2022 and 2021, the Company recognized investment gain of $ 44,039

and $ 15,167 , respectively, based on its proportionate share of equity interest .

O n March 22, 2022, CAE invested EUR 100,000 (approximately $ 106,980 ) in Able

2rent GmbH (DEU) to acquire 50 % of its equity interest.

The Company accounts for the investment under the equity

method because it does not have control over Able 2rent GmbH (DEU) as the Company does not participate in its operation and does not serve as member of board of director.

For the year ended December 31, 2022, the Company

recognized investment loss of $ 12,389 , based on its proportionate share of equity interest .

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022, the Company recognized investment gain of $ 4 and investment loss of $ 44,301 ,

based on its proportionate share of equity interest .

June 23, 2021, the Company invested RMB 2,000,000 (approximately $ 281,694 ) in Hangzhou Hezhe to acquire 20 %

of its equity interest.

The Company accounts for the investment under the equity method because the Company controls 33 %

of voting interests in board of directors, and has the ability to exercise significant influence over Hangzhou Hezhe.

For the years ended December 31, 2023 and 2022, the Company recognized investment gain of $ 50,991 and $ 44,039

respectively, based on its proportionate share of equity interest.

March 22, 2022, CAE invested EUR 100,000 (approximately $ 110,620 ) in Able 2rent GmbH (DEU) to acquire 50 %

of its equity interest.

The Company accounts for the investment under the equity method because it does not have control over Able 2rent GmbH (DEU) as the Company does not participate in its operation and does not serve as

member of board of director.

For the years ended December 31, 2023 and 2022, the Company recognized investment loss of $ 7,998 and $ 12,389 respectively, based on its proportionate share of equity

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

dollars, except for number of shares)

Equity investment without readily determinable fair values, net

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

HW Electro Co., Ltd.

Robostreet Inc.

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 is holding 1,143,860 shares of HW Electro Co., Ltd.’s for a total

of 3.00 % of its equity interest as of December 31, 2023.

On July 12, 2023, the

Company entered into a share sale and purchase agreement with Robostreet Inc., to acquire 176 shares of

Robostreet Inc.’s for a total of 14.97 % of its equity interest with a consideration of cash of $ 200,000 and three

models of programmable smart chassis for an aggregate value of $ 250,000 .

Debt security investments

On July 24, 2023 the Company purchased a $ 1,000,000 convertible note (the “Convertible Note”) from Acton (the “Issuer”).

As of December 31, 2023, the Company has paid $ 600,000 to the Issuer, the balance of debt investments was $ 611,712 .

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

dollars, except for number of shares)

NOTE 9 – INVESTMENT IN EQUITY SECURITIES

As of December 31, 2023, the balance consisted of the following two equity investments:

Investment on partnership shares in MineOne Fix Income Investment I L.P

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 LP (“MineOne”), over which MineOne Partners Limited is the General Partner.

The Company holds 100 % of the limited partnership equity of MineOne and is entitled to a fixed return of 5 % per annum on the investment amount, and has the rights to sell all or any portion of its partnership interest after the second anniversary of the investment if the Company gives at least

ten business days’ prior notice to the General Partner and receives the consent of General Partner.

MineOne focuses on private credit

loans, convertible bridge, and personal factoring.

MineOne Fix Income Investment I L.P (1)

Micro Money Fund SPC (2)

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 LP (“MineOne”), over which MineOne Partners Limited is the

General Partner.

The Company holds 100 %

of the limited partnership equity of MineOne and is entitled to a fixed return of 5 % per annum on the

investment amount, and has the rights to sell all or any portion of its partnership interest after the second anniversary of the investment if the Company gives at least ten business days’ prior notice to the General Partner and receives 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.

private equity fund is measured at fair value with gains and losses recognized in earnings.

As a practical expedient, the Company NAV or its equivalent to measure the fair value of the Fund.

The NAV of the Fund was $ 25,128,833 as of December 31, 2022.

Net assets of the Partnership were $ 25,019,244 .

For the year ended December 31, 2022, the Company recorded upward adjustments for changes in fair value of this equity investment of $ 19,244 .

Investment on participating shares in Micro Money Fund SPC

On August 11, 2022, the Company invested $ 5 million in Micro Money Fund SPC, for purchase of 4,454.37 of

participating, redeemable, non-voting shares attributable to Micro Money Fund SPII (“the Fund”), a segregated portfolio of Micro Money Fund SPC.

The Company holds 59 % of the limited partnership equity of the Fund, and has the rights to redeem the investment at the option of the Company, but a

redemption gate may be setup to limit the redemption amount if redemption on redemption day in excess of such percentage of the NAV of the relevant portfolio by Micro Money Fund SPC.

The Fund focuses on investments in convertible securities,

publicly traded debt and stock, and combination options and futures trading.

The investment was classified as an equity security because the investment represented the ownership interest in the Fund.

As of December 31, 2022, the investment

consisted of 4,454.37 participating shares of the Fund.

The private equity fund is measured at fair value with gains and losses

recognized in earnings.

As a practical expedient, the Company uses NAV to measure the fair value of the Fund.

The NAV of the Fund was $ 4,869,908

as of December 31, 2022.

Net assets of the Partnership was $ 8,033,816 by taking liabilities into consideration.

For the year ended

December 31, 2022, the Company recorded downward adjustments for changes in fair value of this equity investment of $ 260,049 .

The Company has neither control nor significant influence over MineOne or Micro Money Fund, the Company does not have the power to direct

the activities that most significantly affect the their economic performance, and there is no kick-off rights or right to dissolve the funds .

The private equity fund is

measured at fair value with gains and losses recognized in earnings.

As a practical expedient, the Company uses NAV or its equivalent to measure the fair value of the Fund.

For the year ended December 31, 2023 and 2022, the Company

recorded upward adjustments for changes in fair value of this equity investment of $ 1,041,111 and $ 19,244 , respectively.

On August 11, 2022, the Company

invested $ 5 million in Micro Money Fund SPC, for purchase of 4,454.37 of participating, redeemable, non-voting shares attributable to Micro Money Fund SPII (“the Fund”), a segregated portfolio of Micro Money Fund SPC.

The Company holds 59 % of the limited partnership equity of the Fund, and

has the rights to redeem the investment at the option of the Company, but a redemption gate may be setup to limit the redemption amount if redemption on redemption day in excess of such percentage of the NAV of the relevant

portfolio by Micro Money Fund SPC.

The Fund focuses on investments in convertible securities, publicly traded debt and stock, and combination options and futures trading.

The investment was classified as an equity security because the

investment represented the ownership interest in the Fund.

The private equity fund is measured at fair value with gains and losses recognized in earnings.

As a practical expedient, the Company uses NAV to measure the fair value of the

In November 2023, the Company redeemed investment of $ 1,000,000 and recognized loss of the redemption part of $ 1,361,713 .

For the year ended December 31, 2023 and 2022, the Company recorded downward adjustments for changes in fair value of this

remaining equity investment of $ 2,280,119 and $ 260,049 , respectively.

The Company has neither control nor significant influence over MineOne or Micro

Money Fund, the Company does not have the power to direct the activities that most significantly affect their economic performance, and there is no kick-off rights or right to dissolve the funds.

NOTE 10 – PROPERTY, PLANT AND EQUIPMENT, NET

5 unchanged sentences

Motor vehicles

Construction in progress

accumulated depreciation

Property, plant and equipment, net

O n April 4, 2022, the Company entered an agreement with

Zhejiang HPWINNER Scientific Company Limited to acquire its factory, with an area of 44,451.54 square meters and

the total consideration of RMB 78,968,319 (approximately $ 11,453,436 ) .

Depreciation expenses for the years ended December 31, 2023 and 2022 were $ 1,456,984 and $ 907,739 , respectively.

Impairment loss for the years ended December 31, 2022 and 2021 were $ 550,402 and $ 6,215 , respectively.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Impairment loss

for the years ended December 31, 2023 and 2022 were $ 431,319 and $ 550,402 , respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

5 unchanged sentences

Intangible assets, net

On April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its land use

right, with an area of 56,302 square meters with a useful life of 45.75 years and the total consideration of RMB 31,766,697

(approximately $ 4,605,738 ).

Amortization expenses for the years ended December 31, 2023 and 2022 were $ 213,996 and $ 46,133 , respectively.

Impairment loss for the years ended December 31, 2022 and 2021 were $ 2,995,440 and nil , respectively.

Impairment loss for the years ended December 31, 2023 and 2022 were $ nil and $ 2,995,440 , respectively.

NOTE 12 – OTHER NON-CURRENT ASSETS, NET

Loan to the third party (1)

Receivable from a third party (2)

Deferred cost (2)

Long-term prepayment (4)

1 unchanged sentence

Other non-current assets, net

The balance represents a 5-year loan in the aggregate principal amount of $ 4,439,400 (New Zealand Dollar 7,000,000 ) to the related party, bearing interest of 2.5 % annually and maturing in August 2026.

The balance represents a 5-year loan in the aggregate principal amount of $ 4,439,400 (New Zealand Dollar 7,000,000 ) to the related

party, bearing interest of 2.5 % annually and maturing in August 2026.

As for the resignation of Mr.

Justin Davis-Rice in 2022, the controller of Bendon Limited

and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022.

The company believes that the possibility of the collection is remote and recorded full provision for the loan.

In 2018, the Company signed an agreement with Anhua Automotive Co.

Ltd., (“Anhua”) and paid an initial

non-refundable deposit to participate in Anhua’s bankruptcy recombination process to develop further production capacity in China.

However, due to the irrecoverable deterioration of Anhua’s business and Cenntro’s focus on Europe

and America markets, Cenntro declined to further participate in the recombination process.

Therefore, Cenntro recorded full provision for the deposit.

The balance was written off for the year ended December 31, 2022 .

Justin Davis-Rice

in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022.

Full provision was made as of December 31, 2022, and the balance was written off as of

December 31, 2023.

Since May 2022, the Company entered a series of agreement with Jiangxi ZC Automobile Co., Ltd.

(“Jiangxi ZC”) to cooperate on mold development.

The agreement stipulated that the mold development fee shall be borne by the Company and Jiangxi ZC, with each bearing 50 %, and that Jiangxi ZC would share the ownership of the mold assets with the Company upon completion of the payment.

The Company recognized deferred cost borne by Jiangxi

ZC before it met the cost reorganization criteria.

The balance mainly consisted of the rental deposit.

T he balance mainly represented a six-year period liability insurance for the existing officers and directors in connection with the closing of the Combination .

2 unchanged sentences

Accrued litigation compensation

Accrued professional fees

Accrued expenses

Payable for purchasing the factory

Other taxes payable

Employee payroll and welfare payables

Accrued professional fees

Payable for purchasing the factory

Interest expense of convertible loans

Other taxes payable

Credit card payable

Loans from third parties

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

3 unchanged sentences

United States

subsidiaries CEG, Cennatic Power Inc.

are subject to a federal tax rate of

CAE and Cenntro Electric is subject to a tax rate of 30 %.

subsidiaries are subject to a federal tax rate

21 % and respective state tax rate.

Subsidiaries in Germany, Spain, Italy, Netherlands and Turkey are

subject to a tax rate of 15.8 %, 25 %, 24 %, 19 % and 25 %, respectively .

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong

8 unchanged sentences

Zhejiang Xbean Tech Co., Ltd qualify as Small and micro enterprises in the PRC, and

are entitled to pay a reduced income tax rate of 2.5 %, 2.5 % and 5 % in 2022.

Income tax expenses for the years ended December 31, 2022 and 2021 are nil .

are entitled to pay a reduced income tax rate of 5 % in 2023.

Income tax expenses for the years ended December 31, 2023 and 2022 are $ 8,988 and nil .

The components of the income tax provision are as follows:

For the Years Ended December 31,

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

3 unchanged sentences

activities, PRC statutory income tax rate was applied.

The actual income tax expense reported in the consolidated and combined statements of operations and comprehensive loss for years ended December 31, 2022 and 2021 differs from the

amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following:

The actual income tax expense reported in the consolidated statements of operations and comprehensive loss for years ended December 31, 2023 and 2022 differs from the amount computed

by applying the PRC statutory income tax rate to income before income taxes due to the following:

For the Years Ended December 31,

10 unchanged sentences

of valuation allowance

income tax expense

income tax expense - current

income tax rate

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

1 unchanged sentence

NOTE 14 - INCOME TAXES (CONTINUED)

Deferred taxes assets, net

The tax effects of temporary differences that give rise to the

deferred income tax assets balances as of December 31, 2022 and 2021 are as follows:

Deferred income tax assets:

Deferred taxes assets/(liabilities)

The tax effects of temporary differences that give rise to the net deferred tax liabilities balances as of December 31, 2023 and

2022 are as follows:

Deferred tax assets:

Impairment loss

4 unchanged sentences

Valuation allowance

Deferred income tax assets, net

Deferred tax assets, net

Deferred income tax liabilities:

Intangible assets arising from acquisition

Total deferred tax liabilities

Net deferred tax liabilities

The changes related to valuation allowance are as follows:

3 unchanged sentences

Expire of NOL

Write-off of employee stock ownership plans deferred tax asset

Change in tax rate

Company deregistration

Exchange rate effect

7 unchanged sentences

Federal net operating losses of $ 3,740,668 ,

$ 1,430,246 and $ 744,848

will expire if unused by 2035, 2036 and 2037, respectively.

$ 1,430,246 , $ 744,848 ,

and $ 1,512,798 will expire if unused by 2035, 2036, 2037 and 2038, respectively.

For entities incorporated in the PRC, net losses can be carried forward for five years.

22 unchanged sentences

benefits position will materially change over the next twelve months.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

9 unchanged sentences

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

A summary of lease cost recognized in the Company’s consolidated and combined statements of operations and comprehensive loss is as

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

For the Years Ended December 31,

15 unchanged sentences

Non-current portion

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

10 unchanged sentences

Redemption feature

If the Company shall carry out one or more subsequent financings in excess of US$ 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 US$ 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 US$ 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.

If the Company shall carry out one or more subsequent financings in excess of US$ 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 US$ 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 US$ 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 ordinary shares on the principal trading market is below the floor price of $ 1.00 per share for a period of ten consecutive trading days, the

9 unchanged sentences

reporting period date.

The remaining estimated fair value adjustment is presented as other income (expense) in the consolidated and combined statement of operations, change in fair value of convertible notes.

The remaining estimated fair value adjustment is presented as other income (expense) in the consolidated statement of operations, change in fair value of convertible notes.

The movement of Note during the year ended December 31, 2023 are as follows:

5 unchanged sentences

As of December 31, 2023

The estimated fair value of the Note upon issuance date July 20, 2022 and as of December 31, 2022 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.

The estimated fair value of the Note as of December 31, 2023 and 2022 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

dollars, except for number of shares)

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

9 unchanged sentences

Maturity date

July 19, 2023

January 19, 2025

July 19, 2023

Accompany with the Note, the Company issued to the same investor warrants to purchase up to 24,733,336 ordinary 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 .

Accompany with the Note, the Company issued to the same investor warrants to purchase up to 24,733,336 ordinary 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 2,473,334 ordinary shares of the Company at a same day, as part of the underwriter’s commission .

2 unchanged sentences

They were presented as liabilities on the consolidated balance sheet at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”.

The liabilities then, will be remeasured every reporting period with any change to fair value recorded as other income (expense) in the consolidated and combined statement of operations.

The liabilities then,

will be remeasured every reporting period with any change to fair value recorded as other income (expense) in the consolidated statement of operations.

The movement of warrants during the year ended December 31, 2023 are as follows:

12 unchanged sentences

Risk free rate

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

11 unchanged sentences

expiration dates of the options are between six and eight years from the respective grant dates as stated in the option grant letters.

On March 7 and May 31, 2016, CAG Cayman granted 12,169,840 options and 650,000 options to the employees and

directors of the Company to purchase CAG Cayman’s ordinary shares at exercise prices ranging from $ 0.2000 to $ 1.2092 per share.

The options have a contractual term ranging from six years to eight years .

On August 1 and December 31, 2017, CAG Cayman granted 6,300,000 options and 2,580,000

to the employees and directors of the Company to purchase CAG Cayman’s ordinary shares at exercise prices ranging from $ 1.6500

to $ 1.8792 per share.

In connection with the Combination, CAG Cayman amended and restated the 2016 Plan, adopting the Amended 2016 Plan.

1 unchanged sentence

equal to the aggregate number of shares for which such stock option was exercisable immediately prior to the closing of the Combination multiplied by the Exchange Ratio of 0.71563 .

As a result, the 12,891,130 options granted by CAG Cayman

prior to the closing of the Combination under the 2016 Plan were converted into 9,225,271

As a result, the 12,891,130 options granted

by CAG Cayman prior to the closing of the Combination under the 2016 Plan were converted into 9,225,271

options of CEGL.

3 unchanged sentences

There were, no incremental fair value recorded immediately before and after the modification date.

21, 2023, the Company extended the term and expiration date of each 2016 Option Agreement from eight ( 8 ) years to ten ( 10 ) years from the date of grant pursuant to the terms of the 2016 Plan .

Share options granted by CEGL to employees of the

3 unchanged sentences

On May 3, 2022, CEGL granted 12,797,063 options to the directors of the Company to purchase CEGL’s ordinary shares at exercise prices ranging from $ 1.680 to $ 1.848 per share.

Among them, 297,615 options have a contractual term of five years , 12,499,448 options have a contractual term of ten years .

Among them, 297,615 options have a contractual term of five years , 12,499,448 options have a contractual

term of ten years .

The fair value of option per share grant on May 3, 2022 varied from $ 1.1130 to $ 1.4310 .

3 unchanged sentences

For the Years Ended December 31,

General and administrative expenses

Selling and marketing expenses

Research and development expenses

General and administrative expenses

A summary of share options activity for the years ended December 31, 2023 and 2022 is as follows:

1 unchanged sentence

Outstanding at January 1, 2022

Modification of option as of 30/12/2021

Outstanding at December 31, 2022

Outstanding at December 31, 2022 (After the

“Share Consolidation”)*

Outstanding at December 31, 2023

1 unchanged sentence

Exercisable as of December 31, 2023

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

* On September 1, 2023 the Company held its annual general meeting of shareholders

where among other proposals, the shareholders of the Company did approve the consolidation of the ordinary shares of the Company on a one-for-ten

(1:10) basis with effect from December 8, 2023 (the “Share Consolidation”).

The one-for-ten reverse stock split

decreased the number of outstanding shares and increased net loss per common share.

All per share and share amounts presented have been retroactively adjusted for the effect of this share consolidation for all periods presented.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

8 unchanged sentences

86.28 %- 83.96 %

82.33 %- 93.48 %

Expected dividends yield

2 unchanged sentences

2.97 %- 3.01 %

1.84 %- 2.40 %

The fair value of underlying ordinary shares (per share)

$ 1.21 -$ 2.92

The expected volatility is calculated based on the annualized standard deviation of the daily return embedded in historical share prices

2 unchanged sentences

As of December 31, 2023, there was approximately $ 8,734,833 of total unrecognized compensation cost related to unvested share options.

The unrecognized compensation costs are expected to be recognized over a weighted average

period of approximately 3.15 years.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 2.16 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

7 unchanged sentences

As of December 31, 2022, the issued and outstanding ordinary shares are 30,084,200 .

During the year ended December 31, 2023, investor warrants were exercised via cashless option by the investors for 360,710

ordinary shares of the Company.

On September 1, 2023 the Company held its annual general meeting of shareholders where among other proposals, the shareholders of the Company did approve the consolidation of the ordinary shares of the

Company on a one-for-ten (1:10) basis with effect from December 8, 2023.

383,868 ordinary shares were issued during the shares consolidation.

As of December 31,

2023, the issued and outstanding ordinary shares are 30,828,778 .

The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of CEGL.

4 unchanged sentences

Due to restrictions

on the distribution of share capital from the Company’s subsidiaries in PRC, total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were $ 581,314 as of December 31, 2022.

on the distribution of share capital from the Company’s subsidiaries in PRC, total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were $ nil as of December 31, 2023.

NOTE 19 - NET LOSS PER SHARE

For the year ended December 31, 2021, for the purpose of calculating net loss per share as a result of the reverse

recapitalization as described in Note 1, the weighted-average number of shares used in the calculation reflects the outstanding shares of CEGL as if the equity structure of Cenntro (the

accounting acquirer) was retroactively stated to reflect the number of shares of CEGL (the accounting acquiree) issued in the Combination.

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

4 unchanged sentences

Basic and diluted net loss per share

* On September 1, 2023 the Company

held its annual general meeting of shareholders where among other proposals, the shareholders of the Company did approve the consolidation of the ordinary shares of the Company on a one-for-ten (1:10) basis with effect from December 8, 2023.

The one-for-ten

reverse stock split decreased the number of outstanding shares and increased net loss per common share.

All per share and share amounts presented have been retroactively adjusted for the effect of this share consolidation for all

periods presented.

Company incurred losses for the years ended December 31, 2023 and 2022, no potential ordinary shares were anti-dilutive

and excluded from the calculation of diluted net loss per share of the Company.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

3 unchanged sentences

December 31, 2023 and 2022.

December 31, 2022,

December 31, 2021,

Year ended December 31, 2023

Year ended December 31, 2022

Indicates below 10%.

5 unchanged sentences

Company’s total purchases, were as follows:

December 31, 2022,

December 31, 2021,

Year ended December 31, 2023

Year ended December 31, 2022

Indicates below 10%.

The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of December 31, 2023 and 2022.

1 unchanged sentence

As of December 31, 2022

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Indicates below 10%.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

7 unchanged sentences

position, results of operations or liquidity.

2020, Didier Verriest (“Didier”) filed a four-count complaint with the Superior Court of New Jersey seeking over $ 500,000 for

alleged unpaid compensation expenses related to a breach of contract under the Magnum Agreement (the “Magnum Agreement”) Didier entered with Cenntro, and Magnum Korea Ltd.

On March 5, 2021, Cenntro filed a motion to dismiss as

to Didier’s breach of contract claim.

Within its motion, Cenntro put before the Court a true and accurate copy of the Magnum Agreement, which revealed the payment obligation underlying Didier’s breach of contract claim against Cenntro,

did not exist.

Instead, the express terms of the Magnum Agreement confirmed that the payment obligation rested solely on Magnum.

After briefing and oral argument, by court order dated April 30, 2021, the Court dismissed Plaintiff’s breach

of contract claim against Cenntro, without prejudice.

However, The Court is allowing a separate quantum meruit claim to proceed.

Cenntro filed an answer to Didier’s amended complaint on August 11, 2021.

After filing an answer, the parties

conducted discovery, which included interrogatories, requests for production of documents, and depositions.

On March 17, 2023, Cenntro filed a motion for summary judgment seeking dismissal of Plaintiff’s remaining quantum meruit claim.

May 12, 2023, the Judge granted Cenntro’s motion in its entirety, dismissing Plaintiff’s case with prejudice.

Verriest will have until June 26, 2023 to file a Notice of Appeal, failing which the case will be over.

In October 2021, Sevic Systems SE (“Sevic”), a former channel partner, commenced a lawsuit against Shengzhou Machinery, one of Cenntro’s

Subject to retention of title and an instalment payment agreement, CAE sold 90 vehicles for a total price of EUR 2,185,721.32 to the French

company 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.

SWOOPIN is insolvent and has been in judicial liquidation since November 2, 2022.

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 90 vehicles remain the property of CAE.

In the meantime, SWOOPIN returned the vehicles to B-Moville.

CAE and B-Moville are currently negotiating the amount of the mutual claims.

In October 2021, Sevic Systems SE (“Sevic”), a former channel partner, commenced a lawsuit against Zhangzhou Machinery, one of Cenntro’s

wholly owned subsidiaries, relating to a breach of contract for the sale of goods (the “Sevic Lawsuit”).

Sevic filed its complaint with the People’s Court of Keqiao District, Shaoxing City, Light Textile City (the “People’s Court”).

the Sevic Lawsuit, Sevic alleges that the Shengzhou Machinery provided it with certain unmarketable goods and requests that the People’s Court (i) terminate two signed purchase orders under its contract with Shengzhou Machinery and (ii) award Sevic money damages for the cost of goods of $ 465,400 , as well as interest and incidental losses, including freight and storage costs, for total damages of approximately $ 628,109 .

The Company does not believe that Sevic’s claims have any merit and intends to vigorously defend against such claims.

the Sevic Lawsuit, Sevic alleges that the Shengzhou Machinery provided it with certain unmarketable goods and requests that the People’s Court (i) terminate two signed purchase orders signed on July 22, 2019 under its sales contract with Shengzhou Machinery signed on August 13, 2019 and (ii) award Sevic money damages for the cost of goods of $ 465,400 , as well as interest and incidental losses, including freight and storage costs, for total damages of approximately $ 628,109 .

The parties entered into mediation and on July 27, 2023, the People’s Court issued a civil mediation letter stating that i) both

Sevic and Shengzhou Machinery agreed to terminate (x) two purchase orders signed on July 22, 2019 and (y) the sales contract

signed on August 13, 2019;

ii) Shengzhou Machinery shall pay Sevic a sum of approximately $ 13,908 by August 7, 2023;

voluntarily waived all other claims;

and iv) Sevic shall pay the case acceptance fee and the property preservation application fee totaling approximately $ 3,429 .

After the completion of the meditation, no other disputes were outstanding between the two parties.

On March 25, 2022, Shengzhou Hengzhong Machinery Co., Ltd.

9 unchanged sentences

On April 25, 2023, Tropos Technologies,

filed a motion to dismiss the arbitration demand and claimant intends to file a response in opposition to it by the current deadline of May 23, 2023.

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.

filed a motion to dismiss the arbitration demand.

On May 23, 2023, Shengzhou Machinery filed a response in opposition to the motion to dismiss the arbitration demand.

On January 29, 2024, the arbitrator issued his opinion and order

denying Tropos’ Motion to dismiss.

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.

Sevic claims these rights were acquired under a 2019 IP transfer

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

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 and intends

to appeal it, however, the Company has accrued the related liability according to the judgement made.

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.

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.

The receipt of the final writ has been planned for September

As of now, it is not possible to determine what the outcome of these proceedings will be.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

dollars, except for number of shares)

In July 2022,

Cenntro filed a request for the cancellation of two European Union mark (“EU mark”) which belongs to a third party with

European Union Intellectual Property Office (“EUIPO”).

EUIPO decided in favor of Cenntro in November 2023.

The two trademarks

in question were cancelled and the costs of the cancellation proceedings were borne by the other party.

2022, Xiongjian Chen filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z.

17 unchanged sentences

On May 28, 2023, Plaintiff filed an amended complaint.

The Defendants intend to file a motion directed to the dismissal of that amended complaint.

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

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.

issuance date of this report on Form 10-K, there remains one ongoing civil litigation cases between Hangzhou Ronda Tech

Co., Limited (“Ronda”), one of Cenntro’s wholly owned subsidiaries, and Fujian Newlongma Automotive Co., Ltd.

(“Newlongma”), one of Ronda’s suppliers;

and the other two cases have been withdrawn:

On February 6, 2023, Hangzhou

Ronda Tech Co., Limited (“Ronda”), one of Cenntro’s wholly owned subsidiaries, commenced a lawsuit against Fujian Newlongma Automotive Co., Ltd.

(“Newlongma”), one of Ronda’s suppliers, in the Hangzhou Yuhang District People's Court,

under which Ronda plead for (i) the termination of the vehicle purchase orders that Ronda placed with Newlongma on February 26, 2022;

(ii) recovery of advance payments for total amount of approximately $ 438,702 ;

and (iii) compensation for damages caused equal to approximately $ 453,290 .

The case mediation date was March 3, 2023 and was subsequently docketed on July 3, 2023.

Since then, Newlongma filed a jurisdictional objection, and the

Court dismissed that jurisdictional objection.

Subsequently Newlongma filed a counterclaim and the Court hosted an exchange of evidence between the parties on 17 October 2023, and discovery was also organized on November 14, 2023 and

January 16, 2024.

On March 5, 2024, the first instance judgment was made, ruling:

1) Newlongma to fully return advance payments plus 100 %

damage totaling $ 869,702 ;

2) Ronda to pay for outstanding invoices totaling $ 583,813 ;

and 3) to terminate all agreements between the parties, including the vehicle purchase orders which have not been fulfilled.

Newlongma is dissatisfied

with this third judgment and filed an appeal on March 21, 2024.

We will prepare relevant defense materials.

December 18, 2023, Zhejiang Sinomachinery Co., Ltd.

filed a lawsuit against Tonghe County Tianxin Agricultural Machinery Co., Ltd.

(“Tianxin”), requesting payment for total contract price of CNY 461,800 (approximately US$ 65,104 )

and interest under a disputed contract of sale.

As of today the case is in the first instance proceedings.

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 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.

No lawsuit has been filed yet.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

12 unchanged sentences

Justin Davis-Rice in 2022, it was not a related party as of December 31, 2022.

Chief Technology Officer of the Company

Immediate family of Mr.

Chris Xiongjian Chen, former Chief Operating Officer of CAG Cayman

Peter Wang is a principal shareholder

Devirra Corporation Limited and its subsidiaries (Collectively referred to the “Devirra Group”)

Entities controlled by CAG Cayman

Cenntro Holding Limited

Ultimately controlled by Mr.

Zhejiang Zhongchai Machinery Co., Ltd (“Zhejiang Zhongchai”)

Ultimately controlled by Mr.

An entity significantly influenced by Hangzhou Ronda Tech Co., Limited

An entity significantly influenced by Hangzhou Ronda, CEGL’s subsidiary

Jiangsu Rongyuan

An entity significantly influenced by Hangzhou Ronda Tech Co., Limited

An entity significantly influenced by Hangzhou Ronda, CEGL’s subsidiary

Hangzhou Hezhe Energy Technology Co., Ltd (“Hangzhou Hezhe”)

An entity significantly influenced by Hangzhou Ronda Tech Co., Limited

Zhuhai Hengzhong Industrial Investment Fund (Limited Partner) (“Zhuhai Hengzhong”)

Peter Wang served as General Partner

An entity significantly influenced by Hangzhou Ronda, CEGL’s subsidiary

Shenzhen Yuanzheng Investment Development Co.

4 unchanged sentences

Ultimately controlled by Mr.

Invested by the Company

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Invested by the Company, then it became the CEGL’s wholly-owned subsidiaries on August 31, 2023

Billy Rafael Romero Del Rosario

A shareholder who owns 1 % equity interest of Cenntro Electric CICS, SRL and was the CEO of Cenntro Electric CICS, SRL

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

7 unchanged sentences

Purchase of raw materials from related parties

Jiangsu Rongyuan

Hangzhou Hezhe Energy Technology Co., Ltd

Revenue from sales of equipment to a related party

Hangzhou Hezhe

Service provided by a related party

Shanghai Hengyu

Zhejiang Zhongchai

1 unchanged sentence

Hangzhou Hezhe

Prepayment of operating fund to a related party

Billy Rafael Romero Del Rosario

Repayment of the advance operating fund from a related party

Zhejiang Zhongchai

Consulting service provided by a related party

Shanghai Hengyu

Repayment interest-bearing Loan from a related party

Repayment of interest-bearing Loan from a related party

Shenzhen Yuanzheng

2 unchanged sentences

Yeung Heung Yeung

CENNTRO ELECTRIC GROUP LIMITED

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S.

1 unchanged sentence

NOTE 22 - RELATED PARTY TRANSACTIONS (CONTINUED)

Amounts due from Related Parties – current

Amounts due from Related Parties

The following table presents amounts due from related parties as of December 31, 2023 and 2022.

1 unchanged sentence

Hangzhou Hezhe (1)

Zhejiang Zhongchai (2)

Shanghai Hengyu

Jiangsu Rongyuan (3)

provision for receivable from a related party (3)

Amounts due from related parties, net

The balance mainly represents the prepayment for raw material to the related

The balances mainly represent accounts receivable relating to the sale of

industrial equipment of $ 340,770 and advances to Zhejiang Zhongchai for daily operational purposes of $ 72,027 as of December 31, 2021.

The balances mainly represent advances to related parties for daily

operational purposes.

The business conditions of Jiangsu Rongyuan deteriorated and, as a result, the Company recognized provision for receivables of nil , $ 227,807 and $ 206,187 for the years ended December 31, 2021, 2020 and 2019, respectively.

For the year ended December 31, 2020, the Company wrote

off the balance of provision that it recognized in 2019.

The Company reversed the provision of $ 78,931 for the year

ended December 31, 2021 due to the repayment from the related party.

The balance was written off during the year ended December 31, 2022.

Amounts due from Related Parties – non-current

As of December 31,

Bendon Limited (1)

provision for receivable from a related party

Amounts due from related parties -non-current

The balance represents a 5-year loan in the aggregate principal amount of $ 4,439,400

(New Zealand Dollar 7,000,000 ) to the related party, bearing interest of 2.5 % annually and maturing in August 2026 .

As for the resignation of Mr.

Justin Davis-Rice in 2022,

the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022.

Amounts due to Related Parties

Billy Rafael Romero Del Rosario (2)

The balance mainly represents the prepayment for raw material to the

related party.

The balance mainly represents the prepayment of operating fund to the related

Amounts due to Related Parties - current

The following table presents amounts due to related parties as of December 31, 2023 and 2022.

As of December 31,

CAG Cayman (1)

Yeung Heung Yeung (2)

Shenzhen Yuanzheng (2)

Antric GmbH (1)

1 unchanged sentence

Shanghai Hengyu (2)

CAG Cayman was the parent company of Cenntro before the closing of the Combination.

The balance as of December 31, 2021

represented (i) the interest-free operating funds from CAG Cayman of $ 15,823 ;

and (ii) a reduction of capital

from Cenntro by CAG Cayman of $ 13,930,000 prior to the closing of the Combination.

It was fully repaid

to CAG Cayman in 2022.

The balance represented the interest-bearing loan provided by related parties

to the Company.

The weighted average annual interest rates for the loans was 17.31 % as of December 31, 2021.

It was fully repaid in

The balance represented the capital injection payable to this related party.

3 unchanged sentences

investment of EUR 1,868,750 (approximately $ 1,977,380 ) was paid to Antric GmbH.

The balance represented the payable of purchase of raw material to Jiangsu Rongyuan and service fee payable to

Shanghai Hengyu .

In July 2023 and December 2023, Shanghai Hengyu and Jiangsu Rongyuan were deregistered, respectively.

Thus the balance of these related parties was written off and other income of $ 26,746 was recognized for the year ended December 31, 2023.

NOTE 23 - SUBSEQUENT EVENT

The Company entered into Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf to sell to the Company its remaining 35 % of the issued and outstanding shares in CAE (Note 3).

The Transaction was closed on January 31, 2023, as a result, CAE became a

wholly-owned subsidiary of the Company.

This transaction was accounted for as equity transactions, no gain or loss was recognized in consolidated statement of operations.

The difference between the fair value of the consideration paid

and the amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company.

On January 3 and April 26, 2023, $ 39,583,321 and $ 6,000,000 of convertible promissory notes were redeemed by the investors.

On January 31, 2023, the Company entered into a debt conversion agreement with HW Electro Co., Ltd., to convert the loan principal of

$ 1,000,000 for 571,930

shares of HW Electro Co., Ltd.’s common stock totaling 3.59 % of its equity interest.

The interest of the loan was repaid in

February 2023.

On January and March, 2023, the Company entered into a series of agreement to purchase electric commercial vehicle components, which total contract amount of RMB 121,335,900 (approximately $ 17,592,052 ),

as of the date of issuance of the consolidated and combined financial statements, the Company has paid RMB 26,785,950

(approximately $ 3,883,598 ) as delivery schedule of supplier.

Cenntro Automotive Corporation and BAL Freeway

Associates, LLC, a California Limited Liability Company have entered into a lease agreement for an approximate 64,000 square

foot portion of a larger 124,850 square foot industrial building located within the Rancon Centre Ontario.

The lease term is

for five years , starting from April 1, 2023, and ending on March 31, 2028.

The monthly rent is $ 115,200 .

The Company has evaluated subsequent events through

the date of issuance of the consolidated and combined financial statements, except for the events mentioned above, there were no other subsequent events with material financial impact on the consolidated and combined financial

On February 16, 2024, CEGL issued a press release announcing the Supreme Court of New South Wales, Australia (the “Court”) made orders

to approve CEGL’s proposed scheme of arrangement in relation to which CEGL will redomicile from Australia to the United States (the “Scheme”).

Under the Scheme, CEGL will become a subsidiary of Cenntro Inc.

(the “HoldCo”), a United

States company incorporated in accordance with the laws of the State of Nevada for the purpose of effecting CEGL group’s redomiciliation to the United States.

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

on the consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures