CENN filing — read by section

Item 9A. Controls and Procedures

Item 9A. 
 
 Controls and Procedures.

 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.

 76 

 Table

 of Contents 

 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.
 GAAP. 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 assets; 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; 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 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. GAAP.

 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. In 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 Annual 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.

 Changes in Internal Controls over financial reporting

 No change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our
 internal control over financial reporting.

 Item 9B.

 Other Information.

 During the year ended December 31, 2025, 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.

 Item 9C. 
 
 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 None.

 77 

 Table

 of Contents 

 PART III

 Item 10. 
 
 Directors, Executive Officers and Corporate Governance.

 The following table sets forth certain information with respect to our directors, executive officers and significant employees:

 Name

 Age

 Position

 Executive Officers:

 Peter Z. Wang

 71

 Chief Executive Officer, Managing Director and Chairman of the Board

 Edward Ye

 35

 Chief Financial Officer

 Wei Zhong

 47

 Chief Technology Officer

 Ming He

 56

 Treasurer

 Non-Executive Directors:

 Charles Athle Nelson (1)

 73

 Director

 Guangguang “Steve” Qin (1)(2)(3)

 71

 Director

 Benjamin B. Ge (1)(2)(3)

 59

 Director

 (1) 
 
 Member of the Audit Committee

 (2) 
 
 Member of the Compensation Committee

 (3) 
 
 Member of the Nomination and Corporate Governance Committee

 Peter Z. Wang, founded CAG, the former parent company of Cenntro, and served as its Chairman and Chief Executive Officer since 2013. Mr. 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. Mr. 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. Mr. 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. Mr. 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. (NASDAQ: GTEC), a transmission products manufacturing company. Mr. 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. Mr. 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.

 Edward Ye, has served as Cenntro’s Financial Director since December 2019 and became Acting Chief Financial Officer of the Company in March 2024. Prior to joining Cenntro,
 Mr. Ye was a Senior Associate at Deloitte Touche Tohmatsu Limited (“Deloitte”) from September 2012 to August 2017 where he was instrumental in the execution of initial public offerings in the US and Hong Kong. At Deloitte, Mr. Ye served a
 multitude of clients in industries such as education, manufacturing, energy and resources, retail, customer service, real estate, transportation, and telecommunications. Mr. 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, (formerly known as, the Case Business School). He is also a CFA Charterholder.

 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. Mr. 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. Prior to that time, Mr. Zhong served as a communication technology developer for Zhejiang Guangtong Network Technology Co.,
 Ltd. Mr. Zhong holds a bachelor’s degree in Biotechnology from Zhejiang University.

 78 

 Table

 of Contents 

 Ming He, was appointed as Cenntro’s Treasurer in May 2022. Mr. He joined Cenntro Automotive Group, the predecessor of CEGL as Chief Financial Officer in
 February 2014. 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. 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. Mr. 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 also received his bachelor’s degree from Shanghai University of International Business and Economics (f.k.a. Shanghai Institute of Foreign Trade) in 1992.

 Non-Employee Directors

 Charles Athle Nelson, became a member of our Board on December 23, 2025, and serves on the Audit Committee. Mr. Nelson has been active in the capital
 markets for the past 35 years. He began his financial career as a market representative with American International Group and in 1979 joined Dean Witter Reynolds as a Financial Advisor, working with high net worth and institutional clients.
 In 1980, he joined Drexel Burnham and Lambert, and subsequently, at Ladenberg Thalmann and then at Auerbach Pollack and Richardson originated equity and investment banking transactions. Over the last 20 years, Mr. Nelson has been involved
 with financing companies in the fintech, healthcare and bio-pharma spaces through private equity and public financing including listings on the Nasdaq and the NYSE. Mr. Nelson holds a bachelor’s degree in arts from Villanova University and an
 MBA from Rutgers University. We believe Mr. Nelson is qualified to serve on the Board due to his extensive experience in the capital markets and financing matters.

 Guangguang “Steve” Qin , became a member of our Board on May 31, 2025 and serves on the Nomination and Corporate Governance Committee, Audit Committee and
 Compensation Committee. Mr. Qin has over 30 years of experience in investment management across the finance, technology, and healthcare sectors. From 1993 to 1999, Mr. Qin served as Senior Vice President of United Pharmaceutical Industries in
 the United States. From 2001 to 2005, he served as Director and President, Asia-Pacific Region at Bridgecreek International. From 2006 to 2010, he was President of the China Region at PEM Group. From 2011 to 2015, Mr. Qin served as Senior
 Partner at Cybernaut (China) Investment. Between 2015 and 2019, he was Chief Representative for the China Region at American Education Center. From 2016 to 2021, he served as Dean of the West Lake Industrial Research Institute (China). Since
 2016, he has been a Founding Partner of Winyin Capital. Since 2020, he has also served as Director and Founding Partner of Aventa Capital. Mr. Qin holds a B.A. in Philosophy and an M.A. in Ethnology from Minzu University of China. We believe
 Mr. Qin is qualified to serve on the Board due to his past experience in investment management matters.

 Benjamin B. Ge, became a member of our Board following his election at the Company’s annual general meeting on May 31, 2022. Since February 2019, Mr. Ge
 has been the Chief Financial Officer of New Century Science & Technology Limited. Mr. Ge was a Managing Director at Citic Capital Holdings Limited, an alternative investment management and advisory company, from 2016 to 2019. Prior to
 joining Citic Capital, Mr. Ge was Regional Head (China) at Sequoia Capital Operations LLC, a venture capital firm focused on seed stage, mid stage, late stage, and growth investments in the fintech sector, from 2010 to 2016. Mr. Ge was Vice
 President of JP Morgan’s Global Special Opportunity Group from 2007 to 2009 and Vice President of UniCredit China Capital Ltd. from 2005 to 2007. 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. We believes Mr. Ge is qualified to serve on our Board due to his extensive experience in private equity and corporate finance matters.

 79 

 Table

 of Contents 

 Departure of Directors 
 
 On May 15, 2025, Yi Zeng, our non-employee director (the “Director”), notified our board of directors (the “Board”) of his decision to resign his position on the Board and as a member of the
 Audit Committee of the Board, effective immediately. Dr. Zeng’s decision was not the result of any disagreement between Dr. Zeng and the Company on any matters relating to our operations, policies or practices.

 On May 31, 2025, Jiawei “Joe” Tong, our non-employee director, notified the Board of his decision to resign his position on the Board and as chair of the Compensation Committee of the Board, and
 member of the Audit and Nomination and Corporate Governance Committees of the Board, effective immediately. Mr. Tong’s decision was not the result of any disagreement between Mr. Tong and the Company on any matters relating to our operations,
 policies or practices.

 Gang “Gavin” Lin was voted to serve as a member of the Board and Audit Committee of the Board at the annual meeting on August 15, 2025. On December 22, 2025, Mr. Lin, our non-employee director,
 notified the Board of his decision to resign his position as an independent director and a member of the Audit Committee of the Board, effective on December 23, 2025. Mr. Lin’s decision was made solely for personal reasons and not due to any
 disagreement with the Company or the Board on any matter relating to our operations, policies, or practices.

 Term of Office

 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

 We have established three committees under the board of directors: an audit committee, a compensation committee and a nomination and corporate governance committee. We have adopted a charter for
 each of the three committees. 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 Mr. Charles Athle Nelson, Mr. Guangguang “Steve” Qin and Mr. Benjamin B. Ge. Mr. Ge is the chairman of our Audit Committee. We 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. Ge 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:

 ● 
 
 appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

 ● 
 
 reviewing with the independent auditors any audit problems or difficulties and management’s response;

 ● 
 
 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 exposures;

 ● 
 
 reviewing and approving all proposed related party transactions;

 ● 
 
 meeting separately and periodically with management and the independent auditors; and

 ● 
 
 monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

 The Audit Committee operates under a written charter, which satisfies the applicable rules of the SEC and the listing standards of Nasdaq. All audit services to be provided to us and all
 permissible non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm will be approved in advance by the Audit Committee.

 Compensation Committee.

 Our Compensation Committee consists of Mr. Guangguang “Steve” Qin and Mr. Benjamin B. Ge. Mr. Qin 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. Our Chief Executive Officer may not be present at any committee meeting during which his compensation
 is deliberated. The Compensation Committee is responsible for, among other things:

 ● 
 
 reviewing and approving, or recommending to the board for its approval, the compensation for our Chief Executive Officer and other executive officers;

 ● 
 
 reviewing and recommending to the shareholders for determination with respect to the compensation of our directors;

 ● 
 
 reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and

 ● 
 
 selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.

 The Compensation Committee operates under a written charter, which satisfies the applicable rules of the SEC and the listing standards of Nasdaq.

 Nomination Committee.

 Our Nomination and Corporate Governance Committee consists of Mr. Guangguang “Steve” Qin and Mr. Benjamin B. Ge. Mr. Qin is the chairman of our Nomination and Corporate Governance Committee. The
 Nomination and Corporate Governance 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. The Nomination and Corporate
 Governance Committee is responsible for, among other things:

 80 

 Table

 of Contents 

 ● 
 
 selecting and recommending to the board nominees for election by the shareholders or appointment by the board;

 ● 
 
 reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;

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

 ● 
 
 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.

 The Nomination and Corporate Governance Committee operates under a written charter, which satisfies the applicable rules of the SEC and the Nasdaq listing rules.

 Family Relationships

 There are no family relationships between any of our directors or executive officers.

 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.

 Section 16(a) Beneficial Ownership Reporting Compliance

 Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers, and beneficial owners of more than 10% of any class of the Company’s equity securities
 to file reports of ownership and changes in ownership with the Securities and Exchange Commission. These individuals are also required to furnish the Company with copies of all such filings.

 Based solely on a review of the reports filed with the SEC, the Company believes that all required filings under Section 16(a) were timely made during the fiscal year ended December 31, 2025.

 Code of Business Conduct and Ethics

 We 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. The code of ethics codifies the business and ethical principles that govern all aspects of our business. We have never waived any provisions of the code of business ethics. We have previously filed our
 form of code of ethics as an exhibit to our registration statement in connection with our initial public offering. 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 
 .

 Hedging and Pledging Policies

 The Company maintains an insider trading policy (the “Insider Trading Policy”) that prohibits our directors, officers that are subject to Section 16 of the Exchange Act, and certain other
 designated employees from (i) purchasing and selling put options, call options or other derivatives of Company securities and (ii) engaging in short sales of Company securities. In addition, the Insider Trading Policy prohibits our officers
 that are not subject to Section 16 of the Exchange Act, assistants and secretaries of insiders and certain other designated employees from engaging in short sales of Company securities. These prohibitions apply to Company securities held
 directly and indirectly by the aforementioned parties including Company securities granted as part of compensation to such aforementioned parties. There are no categories of hedging transactions that are specifically permitted by the Insider
 Trading Policy.

 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.

 Item 11. 
 
 Executive Compensation.

 Introduction

 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 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 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.

 81 

 Table

 of Contents 

 For the year ended December 31, 2025, Cenntro’s named executive officers (“Named Executive Officers” or “NEOs”) were:

 • 
 
 Peter Z. Wang, Chief Executive Officer;

 • 
 
 Edward Ye, Chief Financial Officer;

 • 
 
 Ming He, Treasurer; and

 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.

 Summary Compensation Table:

 Name and Principal Position

 Fiscal

 Year

 Salary

 ($)

 Bonus

 ($)

 Stock

 Awards

 ($)

 All Other

 Compensation

 ($)

 Total($)

 Peter Z. Wang

 2025

 350,000

 1,234,596

 (1) 
 
 1,584,596

 Chief Executive Officer

 2024

 350,000

 -

 1,234,596

 (1) 
 
 -

 1,584,596

 Edward Ye (2) 

 2025

 94,434

 71,660

 (3)

 166,094

 Chief Financial Officer

 2024

 85,368

 71,660

 (3)

 157,028

 Ming He

 2025

 250,000

 53,774

 (4) 
 
 303,774

 Treasurer

 2024

 250,000

 53,774

 (4)

 303,774

 (1) 
 
 On May 3, 2022, Mr. 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
 87,500 options vested during the years ended December 31, 2025, and December 31, 2024, fair value of which is represented here, respectively.

 (2) 
 
 On March 1, 2024, our Board appointed Mr. Edward Ye as Acting Chief Financial Officer of the Company. Mr. Edmond Cheng served as Chief Financial Officer prior to his resignation from the Company on March 1,
 2024.

 (3) 
 
 On May 3, 2022, Mr. Ye was granted an option to purchase 20,000 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 5,000 and 5,000 options vested during the years ended December 31, 2025, and December 31, 2024,
 fair value of which is represented here, respectively.

 (4) 
 
 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 3,752 options vested during the years ended December 31, 2025, and December 31, 2024,
 fair value of which is represented here, respectively.

 Policies and Practices Related to the Timing of Equity Awards 

 We grant stock options and other equity awards from time to time pursuant to our equity incentive plans. The timing of such awards is generally based on predetermined schedules or compensation
 committee approvals and is not intended to take into account the timing of the release of material nonpublic information (“MNPI”).

 We do not grant equity awards in anticipation of the release of MNPI that is likely to result in changes to the price of our common stock, and do not time the public release of such
 information based on award grant dates. During the fiscal year ended December 31, 2025, we have not made awards to any named executive officer or director during the period beginning four business days before and ending one business day
 after the filing of our periodic or current report, and we have not timed the disclosure of MNPI for the purpose of affecting the value of executive compensation.

 Outstanding Equity Awards at Fiscal Year-End

 The following table summarizes the outstanding equity awards as of December 31, 2025 for each of our Named Executive Officers:

 Name

 Number

 of

 Securities

 Underlying

 Unexercised

 Options

 (#)

 Exercisabe

 Number of

 Securities

 Underlying

 Unexercised

 Options (#)

 Unexercisable

 Equity

 Incentive

 Plan

 Awards:

 Number

 of

 Securities

 Underlying

 Unexercised

 Unearned

 Options

 (#)

 Option

 Exercise

 Price

 ($)

 Option

 Expiration

 Date

 Number

 of

 Shares

 or

 Units

 of

 Stock

 That

 Have

 Not

 Vested

 (#)

 Market

 Value

 of

 Shares

 or

 Units

 of

 Stock

 That

 Have

 Not

 Vested

 ($)

 Equity

 Incentive

 Plan

 Awards:

 Number

 of

 Unearned

 Shares,

 Units,

 or

 Other

 Rights

 That

 Have

 Not

 Vested

 (#)

 Equity

 Incentive

 Plan

 Awards:

 Market

 or

 Payout

 Value of

 Unearned

 Shares,

 Units,

 or

 Other

 Rights

 That

 Have

 Not

 Vested

 ($)

 Peter Z. Wang

 Chief Executive Officer

 23,812

 5,953

 -

 18.4800

 May 03, 2027

 5,953

 810

 -

 -

 304,313

 15,922

 -

 16.8000

 May 03, 2032

 15,922

 2,167

 -

 -

 Edward Ye

 Chief Financial Officer

 18,750

 1,250

 -

 16.8000

 May 03, 2032

 1,250

 170

 -

 -

 21,469

 -

 -

 30.9182

 December 31, 2029

 -

 -

 -

 -

 Ming He

 Treasurer

 14,070

 930

 -

 16.8000

 May 03, 2032

 930

 127

 -

 -

 89,454

 -

 -

 2.7947

 March 07, 2026

 -

 -

 -

 -

 82 

 Table

 of Contents 

 Compensation of Directors

 We review compensation annually for all employees, including our executives. 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 stockholders, and a long-term commitment to us.

 Agreements with Our Named Executive Officers

 Below are descriptions of the material terms of the employment agreements and offer letters with Cenntro’s Named Executive Officers.

 Employment Agreement with Peter Z. Wang

 On August 20, 2017, CAG entered into an employment agreement with Mr. 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 employment agreement provides that Mr. Wang is entitled to an annual base salary (which is currently
 $350,000). Mr. Wang is not entitled to any cash severance under his employment agreement. Mr. Wang’s employment agreement contains customary restrictions on competition, solicitation and the disclosure of confidential information. In
 connection with the closing of the Combination, CAC assumed the rights and obligations of CAG under the employment agreement with Mr. Wang.

 Employment Agreement with Edward Ye

 On March 1, 2024, the Board appointed Edward Ye, the corporate controller of the Company to serve as the Company’s acting CFO with annual compensation of US$91,555 to fill the vacancy created by
 Mr. Cheng effective as of March 1, 2024.

 Mr. Ye, age 34, is a seasoned financial executive who joined the Company in 2019 as Financial Director to the Company before becoming acting CFO. Prior to joining the Company, 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. Ye served a multitude of clients in
 industries such as education, manufacturing, energy and resources, retail, customer service, real estate, transportation, and telecommunications. Mr. 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).

 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 $250,000). Mr. He is not entitled to any cash severance under his employment agreement. Mr. 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.

 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. 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.

 83 

 Table

 of Contents 

 Annual Cash Bonuses

 None of Cenntro’s executive officers were eligible to receive a cash bonus for the year ended December 31, 2025.

 Equity Incentive Awards

 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.

 Cenntro Inc. 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 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 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. 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 25,178 shares of Common Stock were outstanding under the 2023 Plan. As of the date of this Annual Report, options to purchase an aggregate
 of 36,704 shares of Common Stock have been granted and 86 shares of Common Stock have been issued under the 2023 Plan, in each case after giving effect to the Reverse Stock Split effected on April 13, 2026.

 Incentive Stock Option Limit . 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 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.

 Repricing; Cancellation and Re-Grant of Share Awards. The Compensation Committee has the authority to modify outstanding awards under the 2023 Plan.
 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.

 84 

 Table

 of Contents 

 Stock Options. A stock option is the right to purchase a certain number of shares, at a certain exercise price, in the future. 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
 Committee. Stock options granted to certain employees outside of the United States may be settled in cash.

 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 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 NSOs. 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.

 Restricted Share Awards. The terms of any awards of restricted securities under the 2023 Plan will be set forth in a restricted share agreement to be
 entered into between us and the recipient. The Compensation Committee will determine the terms and conditions of the restricted share agreements, which need not be identical. A restricted share award may be subject to vesting requirements or
 transfer restrictions or both. 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 services. 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.

 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 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 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. 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 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.

 Cash-Based Awards. 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 shares of Common Stock, as determined by the Compensation Committee.

 85 

 Table

 of Contents 

 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 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 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 of 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.

 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 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 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.

 Recoupment. 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.

 Item 12. 
 
 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 Common Stock as of the date of this Annual Report, by:

 • 
 
 each of our executive officers and directors;

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

 • 
 
 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.
 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. 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.

 86 

 Table

 of Contents 

 Percentage ownership is based on 87,912,831 shares of Common Stock outstanding as of April 10, 2026 (prior to the Reverse Stock Split effected on April 13, 2026)(1).

 Name and Address of Beneficial Owner (2)

 Amount

 and

 Nature of

 Beneficial

 Ownership

 Percentage

 of

 Beneficial

 Ownership

 5% Shareholders :

 Directors and Executive Officers :

 Peter Z. Wang (3)(4)

 7,504,435

 8.5

 %

 Edward Ye (5)

 41,469

 *

 %

 Wei Zhong (6)

 -

 -

 %

 Ming He (7)

 15,000

 *

 %

 Benjamin B. Ge (8)

 39,780

 *

 %

 Charles Athle Nelson

 -

 -

 Guangguang “Steve” Qin

 -

 -

 All current directors and executive officers as a group (seven persons) (9)

 7,600,684

 8.6

 %

 * 
 
 Represents beneficial ownership of less than 1%.

 1) 
 
 On April 13, 2026, the Company effected a 1-for-60 Reverse Stock Split of its common stock, which became effective upon market open on the Nasdaq Capital Market. The Reverse
 Stock Split was implemented to regain compliance with Nasdaq’s minimum $1.00 bid price requirement. However, there can be no assurance that the Company will be able to timely regain or maintain compliance with Nasdaq’s continued
 listing requirement.

 2) 
 
 Unless otherwise indicated, the address for each beneficial owner listed in the table above is c/o Cenntro Inc., 33 Wood Avenue South, Suite 600, PMB #3572, Iselin, New Jersey 08830.

 3) 
 
 Peter Z. Wang has sole voting and dispositive power over the shares held by Cenntro Enterprise Limited.

 4) 
 
 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.
 Peter Wang, and (iii) 350,000 shares of Common Stock that Mr. Wang has the right to acquire from us within 60 days of April 10, 2026, pursuant to the exercise of stock options granted under the 2023 Plan. Mr. 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.

 5) 
 
 Consists of 41,469 shares of Common Stock that Mr. Ye has the right to acquire from us within 60 days of April 10, 2026, pursuant to the exercise of stock options granted under the 2023 Plan.

 6) 
 
 Consists of 0 shares of Common Stock that Mr. Zhong has the right to acquire from us within 60 days of April 10, 2026, pursuant to the exercise of stock options under the 2023 Plan.

 7) 
 
 Consists of 15,000 shares of Common Stock that Mr. He has the right to acquire from us within 60 days of April 10, 2026, pursuant to the exercise of stock options granted under 2023 Plan.

 8) 
 
 Consists of 29,780 shares of Common Stock beneficially owned by Mr. Ge, and 10,000 shares of Common Stock that Mr. Ge has the right to acquire from us within 60 days of April 10, 2026, pursuant to the
 exercise of stock options granted under the 2023 Plan.

 9) 
 
 Consists of (i) 7,184,215 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 416,469 shares of Common Stock underlying outstanding options, exercisable within 60
 days of April 10, 2026.

 87 

 Table

 of Contents 

 Item 13. 
 
 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.

 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; (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

 Capital injection to a related party

 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). Mr. Gregory Hancke is not entitled to any cash severance under this Managing Director’s contract.

 Loan agreement with a related party

 On April 15, 2025, we, a related party of Greenland Technologies Holding Corporation (“Greenland Technologies”), entered into a loan agreement with Zhongchai Holding (Hong Kong) Limited
 (“Zhongchai Hong Kong”), an indirect wholly owned subsidiary of Greenland Technologies, pursuant to which we may borrow up to $1.0 million, as evidenced by a promissory note dated as of April 15, 2025 (the “Promissory Note”). We intend to use
 the proceeds received from the Promissory Note for working capital purposes. The Promissory Note has a maturity date of April 14, 2026, and accrues interest at a rate of 7.50% per annum. Upon the occurrence of any Default (as defined in the
 Loan Agreement), Zhongchai Hong Kong is entitled to declare the debt, all interest and other amounts payable (the “Default Sum”) under the Loan Agreement to be forthwith due and payable, or alternatively, demand the Default Sum be converted
 into our shares of common stock at the specified conversion price in the loan agreement. The loan agreement contains our customary representations and warranties, and affirmative and negative covenants for a transaction of this type.

 Item 14. 
 
 Principal Accounting Fees and Services.

 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. For the fiscal year ended December 31, 2025, GGF has also been appointed by the Company as the independent registered public accounting firm.

 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.

 Cost of Fees and Services

 The following table sets forth fees billed to us by our current independent auditor GGF for the year ended December 31, 2025 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.

 SERVICES

 2025

 2024

 Audit fees

 $

 635,194

 $

 388,200

 Audit-related fees

 -

 -

 Tax fees

 -

 -

 All other fees

 -

 -

 Total fees

 $

 635,194

 $

 388,200

 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.

 88 

 Table

 of Contents 

 PART IV

 Item 15. 
 
 Exhibits and Financial Statement Schedules.

 (a) 
 
 The following documents are filed as part of this report:

 (1) 
 
 Financial Statements:

 The audited balance sheet of the Company as of December 31, 2025, 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 GGF, independent auditors, are filed herewith.

 (2) 
 
 Financial Schedules:

 None

 Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.

 (3) 
 
 Exhibits:

 The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.

 (b) 
 
 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. 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 apply standards of materiality that differ from those of a reasonable investor; and

 ● 
 
 were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

 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.

 Exhibit

 Number

 Description

 3.1* 

 Amended and Restated Articles of Incorporation of Cenntro Inc., filed with the Secretary of State of the State of Nevada on April 13, 2026.

 3.2 

 Amended and Restated Bylaws of Cenntro Inc., dated November 10, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K12-b, File No. 001-38544, filed
 with the SEC on February 27, 2024).

 3.3* 

 Certificate of Change filed on March 24, 2026

 4.1 

 Exchange Note, dated October 23, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on October 28, 2025)

 10.1 

 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).

 10.2 + 

 Cenntro Inc. 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).

 10.3+ 

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

 89 

 Table

 of Contents 

 10.4+ 

 Employment Agreement, dated as of August 20, 2017, by and between Mr. Ming He and Cenntro Automotive Group Limited (incorporated by reference to Exhibit 10.7 to the Company’s Annual
 Report on Form 10-K, File No. 001-38544, filed with the SEC on April 1, 2024).

 10.5 

 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).

 10.6 + 

 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).

 10.7 

 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).

 10.8 

 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).

 10.9 

 Securities Purchase Agreement, 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).

 10.10 

 Loan Agreement, dated as of April 15, 2025, entered into by and between Zhongchai Holding (Hong Kong) Limited and Cenntro Inc. (incorporated by reference to Exhibit 10.1 to the Current
 Report on Form 8-K filed with the SEC on April 18, 2025)

 10.11 

 Promissory Note, dated as of April 15, 2025, issued by Cenntro Inc. to Zhongchai Holding (Hong Kong) Limited (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K
 filed with the SEC on April 18, 2025)

 10.12 

 Amendment 1 to Senior Secured Convertible Promissory Note, dated as of May 16, 2025 between Cenntro Inc. and About Investment Pte. Ltd. (incorporated by reference to Exhibit 10.1 to the
 Current Report on Form 8-K filed with the SEC on May 21, 2025)

 10.13 

 Exchange Agreement, dated October 23, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 28, 2025)

 10.14 

 Director Offer Letter dated May 30, 2025 by and between Cenntro Inc. and Mr. Guangguang “Steve” Qin (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
 with the SEC on June 4, 2025)

 10.15 

 Director Offer Letter dated December 23, 2025 by and between Cenntro Inc. and Charles Athle Nelson. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
 with the SEC on December 31, 2025)

 10.16 *

 Operating Lease Agreements dated August 30, 2024, by and between Jiangsu Joylong Automobile Co., Ltd., as Landlord, and Jiangsu Tooniu Tech Co., Ltd., as Tenant (JL-20240901)

 10.17* 

 Operating Lease Agreements dated August 30, 2024, by and between Jiangsu Joylong Automobile Co., Ltd., as Landlord, and Jiangsu Tooniu Tech Co., Ltd., as Tenant (JL-20240902)

 10.18* 

 Lease Agreement dated January 15, 2025, by and between Schmidts GmbH & Co. KG Immobilien, as Landlord, and Antric GmbH, as Tenant

 10.19* 

 Operating Lease Agreement dated March 25, 2025, by and between American Quartz Group Inc., as Landlord, and Bison Motors Inc., as Tenant

 10.20* 

 Operating Lease Agreement dated May 19, 2025, by and between Comunidad de Bienes VIDAL PLANAS JOSE Y OTROS CB, as Landlord, and AVANTIER MOTORS SPAIN, S.L., as Tenant

 14.1 

 Cenntro Code of Ethics (incorporated by reference to 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).

 15.1* 

 Consent of GGF CPA LTD, regarding the incorporation by reference the report dated April 15, 2026 in this Annual Report on Form 10-K

 19 

 Cenntro Insider Trading Policy (incorporated by reference to Exhibit 19 to the Company’s Annual Report on Form 10-K, File No. 001-38544, filed with the SEC on April 1, 2024).

 21.1* 

 List of Subsidiaries.

 24.1* 

 Powers of Attorney (the signature page to this Annual Report on Form 10-K).

 31.1* 

 Certification of Principal Executive Officer required by Rule 13a-14(a).

 31.2* 

 Certification of Principal Financial Officer required by Rule 13a-14(a).

 32.1** 

 Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.

 97.1 

 Cenntro Policy Related to Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K, File No. 001-38544, filed with
 the SEC on April 1, 2024).

 101. INS

 Inline XBRL Instance Document.

 101. SCH

 Inline XBRL Taxonomy Extension Schema Document.

 101. CAL

 Inline XBRL Taxonomy Extension Calculation Linkbase Document.

 101. DEF

 Inline XBRL Taxonomy Extension Definition Linkbase Document.

 101. LAB

 Inline XBRL Taxonomy Extension Label Linkbase Document.

 101. PRE

 Inline XBRL Taxonomy Extension Presentation Linkbase Document.

 104

 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 + Management contract or compensatory plan

 * Filed with this annual report on Form 10-K

 ** Furnished with this annual report on Form 10-K

 90 

 Table

 of Contents 

 ITEM 16. 
 
 FORM 10-K SUMMARY

 We have elected not to provide a summary of the information provided in this annual report on Form 10-K.

 SIGNATUR ES

 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 authorized.

 CENNTRO INC.

 By:

 /s/ Peter Z. Wang

 Peter Z. Wang

 Chief Executive Officer

 (Principal Executive Officer)

 By:

 /s/ Edward Ye

 Edward Ye

 Chief Financial Officer

 (Principal Financial and Accounting Officer)

 Each person whose signature appears below constitutes and appoints Peter Z. Wang and Edward Ye, 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.

 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 the
 capacities and on the dates indicated.

 Signature

 Capacity

 Date

 /s/ Peter Z. Wang

 Chairman of the Board and Chief Executive Officer

 April 15, 2026

 Peter Z. Wang

 (Principal Executive Officer)

 /s/ Edward Ye

 Chief Financial Officer

 April 15, 2026

 Edward Ye

 (Principal Financial and Accounting Officer)

 /s/ Benjamin B. Ge

 Director

 April 15, 2026

 Benjamin B. Ge

 /s/ Charles Athle Nelson

 Director

 April 15, 2026

 Charles Athle Nelson

 /s/ Guangguang “Steve” Qin

 Director

 April 15, 2026

 Guangguang “Steve” Qin

 91 

 Table
 of Contents 

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page
 
 Consolidated Financial Statements
 
 Report of Independent Registered Public Accounting Firm (PCAOB ID: 2729 ) 
 F-2
 
 Consolidated Balance Sheets as of December 31, 2025 and 2024 
 F-3
 
 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 
 F-4
 
 Consolidated Statements of Changes in Equity for the years ended December 31, 2025 and 2024 
 F-5
 
 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 
 F-6
 
 Notes to the Consolidated Financial Statements 
 F-7
 
 F-1 

 Table

 of Contents 

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Shareholders of

 Cenntro Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheets of Cenntro Inc. (the “Company”) and its subsidiaries as of December 31, 2025 and 2024, and the related consolidated statements of operations and
 comprehensive loss, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our
 opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years
 in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 Basis for Opinion

 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 consolidated 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 Company’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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ GGF CPA LTD 

 We have served as the Company’s auditor since 2023.

 Guangzhou, the People’s Republic of China 

 April 15, 2026

 F-2 

 Table

 of Contents 

 CENNTRO INC.

 CONSOLIDATED BALANCE SHEETS

 (Expressed in U.S. dollars, except for the number of shares)

 Note
 
 December 31,
 2025
 
 December 31,
 2024
 
 ASSETS

 Current assets:

 Cash and cash equivalents

 $

 4,483,906 
 
 $

 12,547,168 
 
 Restricted cash, current

 154,422 
 
 273,291 
 
 Short-term investment

 - 
 
 5,505 
 
 Accounts receivable, net

 4

 1,281,238 
 
 3,281,865 
 
 Inventories, net

 5

 21,935,893 
 
 24,012,504 
 
 Prepayment and other current assets

 6

 15,013,263 
 
 18,075,415 
 
 Amounts due from related parties, current

 22

 37,705 
 
 11,729 
 
 Assets held for sale, current

 1(d

 )

 2,726,690 
 
 7,708,969 
 
 Total current assets

 45,633,117 
 
 65,916,446 
 
 Non-current assets:

 Long-term time deposit

 - 
 
 700,000 
 
 Long-term investments

 7

 3,853,261 
 
 3,710,663 
 
 Investment in equity securities

 8

 - 
 
 26,604,319 
 
 Property, plant and equipment, net

 9

 15,916,725 
 
 17,401,006 
 
 Intangible assets, net

 10

 6,143,776 
 
 6,225,302 
 
 Right-of-use assets

 15

 1,855,267 
 
 9,948,831 
 
 Other non-current assets, net

 1,027,144 
 
 2,059,747 
 
 Total non-current assets

 28,796,173 
 
 66,649,868 
 
 Total Assets

 $

 74,429,290 
 
 $

 132,566,314 
 
 LIABILITIES AND EQUITY

 LIABILITIES

 Current liabilities:

 Accounts payable

 11

 $

 5,532,563 
 
 $

 5,135,710 
 
 Short-term loans and current portion of long-term loans

 13

 1,259,813 
 
 249,614 
 
 Accrued expenses and other current liabilities

 12

 8,348,095 
 
 3,647,503 
 
 Contractual liabilities

 2(o

 )

 3,021,544 
 
 4,121,305 
 
 Operating lease liabilities, current

 15

 1,434,441 
 
 3,426,067 
 
 Convertible promissory notes

 16

 3,955,897 
 
 9,952,000 
 
 Deferred government grant, current

 110,378 
 
 100,060 
 
 Amounts due to a related party

 22

 889,675 
 
 26,226 
 
 Liabilities held for sale, current

 1(d

 )

 2,103,088 
 
 2,455,539 
 
 Total current liabilities

 26,655,494 
 
 29,114,024 
 
 Non-current liabilities:

 Long-term loans

 13

 1,214,054 
 
 362,386 
 
 Deferred tax liabilities

 14

 142,312 
 
 171,558 
 
 Deferred government grant, non-current

 1,738,449 
 
 1,776,957 
 
 Derivative liability - investor warrant

 16

 - 
 
 12,137,087 
 
 Derivative liability - placement agent warrant

 16

 3,457,055 
 
 3,455,829 
 
 Operating lease liabilities, non-current

 15

 841,449 
 
 7,588,971 
 
 Total non-current liabilities

 7,393,319 
 
 25,492,788 
 
 Total Liabilities

 $

 34,048,813 
 
 $

 54,606,812 
 
 Commitments and contingencies

 21

 EQUITY

 Common stock ($ 0.0001 par value; 1,465,214 and 514,444 shares issued and outstanding as of December 31, 2025 and 2024, respectively)*
 
 18
 
 147 
 
 51 
 
 Additional paid in capital

 437,740,047 
 
 405,757,052 
 
 Accumulated deficit

 ( 391,872,087 
 
 )

 ( 318,890,314 
 
 )

 Accumulated other comprehensive loss

 ( 5,585,439 
 
 )

 ( 9,029,499 
 
 )

 Total equity attributable to shareholders

 40,282,668 
 
 77,837,290 
 
 Non-controlling interests

 97,809 
 
 122,212 
 
 Total Equity

 $

 40,380,477 
 
 $

 77,959,502 
 
 Total Liabilities and Equity

 $

 74,429,290 
 
 $

 132,566,314 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 

 All share and per share am5ounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods
 presented, unless otherwise indicated.

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

 F-3 

 Table

 of Contents 

 CENNTRO INC.

 CONSOLIDATED
 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 (Expressed in U.S. dollars, except for number of shares)

 For the Years Ended December 31,
 
 Note
 
 2025
 
 2024
 
 Net revenues

 2(o

 )

 $

 18,080,161 
 
 $

 31,297,393 
 
 Cost of goods sold

 ( 20,396,258 
 
 )

 ( 23,688,846 
 
 )

 Gross profit

 ( 2,316,097 
 
 )

 7,608,547 
 
 OPERATING EXPENSES:

 Selling and marketing expenses

 ( 2,520,796 
 
 )

 ( 7,364,678 
 
 )

 General and administrative expenses

 ( 20,341,399 
 
 )

 ( 26,321,333 
 
 )

 Research and development expenses

 ( 2,814,163 
 
 )

 ( 5,160,803 
 
 )

 Provision for credit losses

 ( 4,556,311 
 
 )

 ( 393,873 
 
 )

 Impairment of goodwill

 - 
 
 ( 209,130 
 
 )

 Total operating expenses

 ( 30,232,669 
 
 )

 ( 39,449,817 
 
 )

 Loss from operations

 ( 32,548,766 
 
 )

 ( 31,841,270 
 
 )

 OTHER EXPENSE:

 Interest expense, net

 ( 452,990 
 
 )

 ( 183,662 
 
 )

 Loss from long-term investments

 7

 ( 60 
 
 )

 ( 299,772 
 
 )

 Change in fair value of convertible promissory notes and derivative liability

 ( 8,474,719 
 
 )

 7,194 
 
 Change in fair value of equity securities

 ( 26,604,319 
 
 )

 1,019,285 
 
 Foreign currency exchange gain, net

 98,031 
 
 44,481 
 
 Loss from acquisition in relation to the revaluation of the previously held equity interest

 -　 
 
 ( 149,872 
 
 )

 Loss from early termination of lease contract

 ( 717,633 
 
 )

 ( 2,218,120 
 
 )

 Gain on exercise of warrants

 -　 
 
 900 
 
 Loss from cross-currency swaps

 ( 20,225 
 
 )

 ( 9,463 
 
 )

 Loss from Note Amendment

 ( 1,756,137 
 
 )

 - 
 
 Gain from disposal of Cenntro Electric CICS, S.R.L.’s equity

 1,157,556 
 
 - 
 
 Other income (expense), net

 380,129 
 
 ( 518,150 
 
 )

 Net loss from continuing operations before taxes

 ( 68,939,133 
 
 )

 ( 34,148,449 
 
 )

 Income tax benefit

 14

 52,920 
 
 35,524 
 
 Net loss from continuing operations

 ( 68,886,213 
 
 )

 ( 34,112,925 
 
 )

 Discontinued operations:

 Loss from discontinued operations, net of tax

 ( 4,135,717 
 
 )

 ( 10,795,692 
 
 )

 Net loss

 ( 73,021,930 
 
 )

 ( 44,908,617 
 
 )

 Less: net loss attributable to non-controlling interests

 ( 40,157 
 
 )

 ( 41,804 
 
 )

 Net loss attributable to the Company’s shareholders

 $

 ( 72,981,773 
 
 )

 $

 ( 44,866,813 
 
 )

 OTHER COMPREHENSIVE LOSS

 Foreign currency translation adjustment

 3,359,651 
 
 ( 2,627,692 
 
 )

 Unrealized holding gains and losses for available-for-sale securities

 30,000 
 
 41,712 
 
 Total comprehensive loss

 ( 69,632,279 
 
 )

 ( 47,494,597 
 
 )

 Less: total comprehensive loss attributable to non-controlling interests

 ( 36,444 
 
 )

 ( 42,770 
 
 )

 Total comprehensive loss to the Company’s shareholders

 $

 ( 69,595,835 
 
 )

 $

 ( 47,451,827 
 
 )

 Weighted average number of shares outstanding, basic and diluted*

 836,814 
 
 514,023 
 
 Loss per common share

 Continuing operations - Basic and Diluted

 ( 82.27 
 
 )

 ( 66.28 
 
 )

 Discontinued operations - Basic and Diluted

 ( 4.94 
 
 )

 ( 21.00 
 
 )

 Net loss per common share - Basic and Diluted

 ( 87.21 
 
 )

 ( 87.28 
 
 )

 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 

 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods
 presented, unless otherwise indicated.

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

 F-4 

 Table

 of Contents 

 CENNTRO INC. 

 CONSOLIDATED
 STATEMENTS OF CHANGES IN EQUITY

 (Expressed in U.S. dollars, except for number of shares)

 Common
 Stock
 
 Shares*
 
 Amount
 
 Additional
 paid in capital
 
 Accumulated deficit
 
 Accumulated
 other
 comprehensive
 loss
 
 Total
 shareholders’
 equity
 
 Non-
 controlling
 interest
 
 Total equity
 
 Balance as of December 31, 2023

 513,813 
 
 $

 51 
 
 $

 402,337,342 
 
 $

 ( 274,023,501 
 
 )

 $

 ( 6,444,485 
 
 )

 $

 121,869,407 
 
 $

 ( 4,240 
 
 )

 $

 121,865,167 
 
 Share-based compensation

 -

 - 
 
 3,370,634 
 
 - 
 
 - 
 
 3,370,634 
 
 - 
 
 3,370,634 
 
 Net loss

 -

 - 
 
 - 
 
 ( 44,866,813 
 
 )

 - 
 
 ( 44,866,813 
 
 )

 ( 41,804 
 
 )

 ( 44,908,617 
 
 )

 Acquisition of 60 % of Hezhe’s equity interests
 
 -
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 169,206 
 
 169,206 
 
 Exercise of warrants

 630 
 
 -

 49,076 
 
 - 
 
 - 
 
 49,076 
 
 - 
 
 49,076 
 
 Fractional shares issued due to reverse stock split

 1 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 Unrealized holding gains and losses for available-for-sale securities

 -

 - 
 
 - 
 
 - 
 
 41,712 
 
 41,712 
 
 - 
 
 41,712 
 
 Capital contribution from noncontrolling interest holders

 -

 - 
 
 - 
 
 - 
 
 - 
 
 - 
 
 16 
 
 16 
 
 Foreign currency translation adjustment

 -

 - 
 
 - 
 
 - 
 
 ( 2,626,726 
 
 )

 ( 2,626,726 
 
 )

 ( 966 
 
 )

 ( 2,627,692 
 
 )

 Balance as of December 31, 2024

 514,444 
 
 $

 51 
 
 $

 405,757,052 
 
 $

 ( 318,890,314 
 
 )

 $

 ( 9,029,499 
 
 )

 $

 77,837,290 
 
 $

 122,212 
 
 $

 77,959,502 
 
 Share-based compensation

 -

 - 
 
 2,827,050 
 
 - 
 
 - 
 
 2,827,050 
 
 - 
 
 2,827,050 
 
 Net loss

 -

 - 
 
 - 
 
 ( 72,981,773 
 
 )

 - 
 
 ( 72,981,773 
 
 )

 ( 40,157 
 
 )

 ( 73,021,930 
 
 )

 Conversion of convertible bonds into shares

 706,514 
 
 71 
 
 16,668,132 
 
 - 
 
 - 
 
 16,668,203 
 
 - 
 
 16,668,203 
 
 Cashless exercise of warrants

 244,256 
 
 25 
 
 12,487,813 
 
 - 
 
 - 
 
 12,487,838 
 
 - 
 
 12,487,838 
 
 Unrealized holding gains and losses for available-for-sale securities

 -

 - 
 
 - 
 
 - 
 
 30,000 
 
 30,000 
 
 - 
 
 30,000 
 
 Disposal of a subsidiary

 -

 - 
 
 - 
 
 - 
 
 58,122 
 
 58,122 
 
 12,041 
 
 70,163 
 
 Foreign currency translation adjustment

 -　

 - 
 
 - 
 
 - 
 
 3,355,938 
 
 3,355,938 
 
 3,713 
 
 3,359,651 
 
 Balance as of December 31, 2025

 1,465,214 
 
 $

 147 
 
 $

 437,740,047 
 
 $

 ( 391,872,087 
 
 )

 $

 ( 5,585,439 
 
 )

 $

 40,282,668 
 
 $

 97,809 
 
 $

 40,380,477 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated.

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

 F-5 

 Table of Contents 

 CENNTRO INC.

 CONSOLIDATED STATEMENTS OF CASH FLOW

 (Expressed in U.S. dollars, except for number of shares)

 For the Years Ended December 31,

 2025

 2024

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss

 $

 ( 73,021,930 
 
 )

 $

 ( 44,908,617 
 
 )

 Adjustments to reconcile net loss to net cash used in operating activities

 Depreciation and amortization

 2,195,025 
 
 2,010,863 
 
 Amortization of operating lease right-of-use asset

 1,929,089 
 
 4,638,315 
 
 Written-down of inventories

 2,554,421 
 
 6,462,514 
 
 Provision for credit losses

 6,038,031 
 
 393,873 
 
 Loss from note amendment

 1,756,137 
 
 - 
 
 Impairment of goodwill

 - 
 
 209,130 
 
 Gain on exercise of warrants

 - 
 
 ( 900 
 
 )

 Changes in fair value of convertible promissory notes and derivative liabilities

 8,474,719 
 
 ( 7,194 
 
 )

 Changes in fair value of equity securities

 26,604,319 
 
 ( 1,019,285 
 
 )

 Foreign currency exchange loss, net

 ( 58,488 
 
 )

 1,118,313 
 
 Share-based compensation expense

 2,827,050 
 
 3,370,634 
 
 (Gain) loss from disposal of plant and equipment

 ( 38,306 
 
 )

 248,472 
 
 Loss from early termination of lease contract

 717,633 
 
 2,218,120 
 
 Loss from long-term investments

 97,854 
 
 293,658 
 
 Loss on inventory write-off

 2,892,133 
 
 - 
 
 Gain from disposal of Cenntro Electric CICS, S.R.L.’s equity

 ( 1,157,556 
 
 )

 - 
 
 Income from short-term investment

 20,225 
 
 ( 89,992 
 
 )

 Loss from acquisition of Hezhe

 - 
 
 149,872 
 
 Deferred income taxes

 ( 49,955 
 
 )

 ( 47,851 
 
 )

 Changes in operating assets and liabilities:

 Accounts receivable

 57,458 
 
 1,258,199 
 
 Inventories

 118,307 
 
 7,927,826 
 
 Prepayment and other assets

 3,671,027 
 
 ( 195,403 
 
 )

 Other non-current assets

 310,865 
 
 - 
 
 Amounts due from/to related parties

 87,481 
 
 289,221 
 
 Accounts payable

 259,355 
 
 1,027 
 
 Accrued expense and other current liabilities

 2,425,015 
 
 ( 1,707,980 
 
 )

 Contractual liabilities

 ( 689,727 
 
 )

 491,082 
 
 Operating lease liabilities

 ( 639,698 
 
 )

 ( 4,466,209 
 
 )

 Net cash used in operating activities

 ( 12,619,516 
 
 )

 ( 21,362,312 
 
 )

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of short-term investment

 - 
 
 ( 4,169,142 
 
 )

 Purchase of long-term time deposit

 - 
 
 ( 700,000 
 
 )

 Net of cash decrease from disposal of Cenntro Electric CICS, S.R.L.

 ( 10,723 
 
 )

 - 
 
 Proceeds from maturities of short-term investment

 - 
 
 8,433,719 
 
 Purchase of plant and equipment

 ( 756,326 
 
 )

 ( 846,115 
 
 )

 Loans provided to third parties

 ( 504,145 
 
 )

 - 
 
 Repayment of loans from third parties

 183,387 
 
 - 
 
 Loans provided to related parties

 ( 27,826 
 
 )

 - 
 
 Repayment of loans from related parties

 27,826 
 
 - 
 
 Net of cash acquired of 60 % of Hezhe’s equity interests
 
 - 
 
 ( 355,400 
 
 )
 
 Cash dividend received

 - 
 
 55,573 
 
 Proceeds from disposal of property, plant and equipment

 221,140 
 
 79,475 
 
 Redemption of equity securities investment

 - 
 
 1,573,441 
 
 Net cash (used in) provided by investing activities

 ( 866,667 
 
 )

 4,071,551 
 
 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from bank loans

 3,181,356 
 
 662,836 
 
 Repayments of bank loans

 ( 809,810 
 
 )

 ( 50,836 
 
 )

 Loans proceed from third parties

 2,074,583 
 
 708,832 
 
 Repayment of loans from third parties

 ( 388,266 
 
 )

 ( 90,000 
 
 )

 Loans proceed from related parties

 1,000,000 
 
 - 
 
 Repayment of loans to related parties

 ( 160,000 
 
 )

 - 
 
 Net cash provided by financing activities

 4,897,863 
 
 1,230,832 
 
 Effect of exchange rate changes on cash, cash equivalents and restricted cash

 315,023 
 
 ( 551,480 
 
 )

 Net decrease in cash, cash equivalents and restricted cash

 ( 8,273,297 
 
 )

 ( 16,611,409 
 
 )

 Cash, cash equivalents and restricted cash at beginning of year

 12,960,488 
 
 29,571,897 
 
 Cash, cash equivalents and restricted cash at end of year

 $

 4,687,191 
 
 $

 12,960,488 
 
 Reconciliation of cash, cash equivalents and restricted cash:

 Cash and cash equivalents

 4,483,906 
 
 12,547,168 
 
 Restricted cash

 154,422 
 
 273,291 
 
 Cash, cash equivalents and restricted cash at end of year, held for sale

 48,863 
 
 140,029 
 
 Total cash, cash equivalents and restricted cash shown in the statement of cashflow

 $

 4,687,191 
 
 $

 12,960,488 
 
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 Interest paid

 $

 26,019 
 
 $

 577,442 
 
 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 Cashless exercise of warrants

 $

 12,487,838 
 
 $

 49,076 
 
 Conversion of convertible bonds into shares

 $

 16,668,202 
 
 $

 - 
 
 Acquisition of EEE Truck Solutions Group Inc.’s shares with electric vehicles

 693,780 
 
 - 
 
 The accompanying notes are an integral part of these consolidated financial statements.

 F-6 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

 (a) 
 
 Historical and principal activities

 Cenntro Inc. or the Company was incorporated in the State of Nevada on March 9, 2023, under the Nevada Revised Statutes (the “NRS”). As a holding company with no material operations of its
 own, Cenntro Inc. conducts operations through its subsidiaries in the United States, Europe, Mexico, Hong Kong, and in the People’s Republic of China, which are referred to as the PRC or China.

 Cenntro Automotive Group Limited (“CAG Cayman”) was formed in the Cayman Islands on August 22, 2014. CAG Cayman was the former parent of Cenntro (as defined below), prior to the closing of
 the Combination (as defined below).

 On March 22, 2013, Cenntro Motor Corporation (“CMC”) was registered in the State of Delaware.

 On January 28, 2014, Cenntro Automotives Group Limited (“CAG BVI”) was formed in British Virgin Islands to conduct electric vehicle (“EV”) related business worldwide outside of U.S.A. On
 January 29, 2014, CAG BVI acquired CMC. CMC changed its name from “Cenntro Motor Corporation” to “Cenntro Motors Corporation” on August 5, 2014, and further changed from “Cenntro Motors Corporation” to “Cenntro Automotive Corporation” (“CAC”)
 on October 7, 2014. CAC’s operations include corporate affairs, administrative, human resources, global marketing and sales, after-market support, homologation, and quality assurance.

 Cenntro Automotive Group Limited (“CAG HK”) was established by CAG Cayman on February 15, 2016 in Hong Kong. CAG HK is a non-operating, investment holding company, which conducts business
 through its subsidiaries in mainland China and Hong Kong.

 Cenntro Electric Group, Inc. (“CEGI”) was incorporated in the state of Delaware by CAG Cayman on March 9, 2020.

 Cenntro Electric Group Limited, formerly known as Naked Brand Group Limited (“NBG”), was incorporated in Australia on May 11, 2017. NBG changed its name to Cenntro Electric Group Limited on
 December 30, 2021, in connection with the closing of the Combination. Cenntro Electric Group Limited changed its name to Cenntro Electric Group Pty Limited (“CEGL”) on June 14, 2024.

 On March 23, 2022 and January 31, 2023, CEGI entered into Share Purchase Agreements to acquire 65 % and 35 % of the issued and outstanding shares in Cenntro Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH.

 On December 16, 2022, Cenntro Electric Group (Europe) GmbH (“CEGE”) invested in Antric GmbH (“Antric”) and became a 25 % shareholder of Antric. On August 31, 2023, CAE acquired the remaining 75 % shares of Antric and took Antric as a subsidiary of the Company. On August 31, 2023, the Company completed the acquisition with Antric GmbH in Germany.

 On June 23, 2021, the Company invested RMB 2,000,000 (approximately $ 273,999 ) in Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) to acquire 20 % of its equity interest. On May 8, 2024, the Company entered into a new equity investing agreement to acquire another 60 % of Hangzhou Hezhe’s equity interest.

 CAC, CEGI and CAG HK and their consolidated subsidiaries are collectively known as “Cenntro”; Cenntro Inc., CEGL, Cenntro and its subsidiaries are collectively known as the “Company”. The
 Company designs and manufactures purpose–built, electric commercial vehicles (“ECVs”) used primarily in last mile delivery and industrial applications.

 The Company is an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by either electricity or hydrogen energy sources. The commercial vehicles
 are designed to serve a variety of fleet and municipal organizations in support of city services, last-mile delivery and other commercial applications.

 (b) 
 
 Reverse recapitalization

 On December 30, 2021, the Company consummated a stock purchase transaction (the “Combination”) pursuant to that certain stock purchase agreement, dated as of November 5, 2021 (the
 “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEGI and CAG HK. Under U.S. generally accepted accounting principles, the Combination is accounted for as a reverse recapitalization.

 (c) 
 
 Redomiciliation of CEGL

 On February 27, 2024, CEGL completed the redomiciliation of CEGL in accordance with the scheme implementation agreement, between CEGL and Cenntro Inc. (the “Redomiciliation”). As a result of
 the Redomiciliation, the jurisdiction of incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and CEGL became a wholly-owned subsidiary of Cenntro Inc..

 In connection with the Redomiciliation, CEGL transferred its equity interests in its intermediate holding companies directly to Cenntro Inc. As a result, the operating subsidiaries that were
 previously held through CEGL became direct or indirect subsidiaries of Cenntro Inc., and CEGL no longer holds substantive operating assets and functions as a shell subsidiary within the Group.

 The Redomiciliation was effected pursuant to a statutory scheme of arrangement under Australian law (the “Scheme”), whereby on February 27, 2024 (the “Implementation Date”), all of the issued ordinary shares of CEGL were exchanged for newly issued shares of common stock of the Company, on the basis of one share of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) for every one ordinary shares of CEGL.
 
 F-7 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

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

 In November 2024, the Company decided to restructure its European operations by phasing out the existing subsidiary-based direct sales model and implementing a centralized dealership
 distribution system. This strategic shift aims to appoint qualified regional distributors with proven market penetration capabilities, thereby reducing reliance on maintaining local operational entities.

 Concurrently, the Company is reallocating capital and managerial resources to accelerate growth in its core markets of North America and Asia.

 As a result of this strategic shift, three European subsidiaries: CEGE, Cenntro Automotive Europe GmbH (“CAE”), and Cenntro EV Center Italy S.R.L (“the disposal group”) were scheduled for structured dissolution in
 2024. (i) The Company commenced the wind-down of Cenntro EV Center Italy S.R.L’s operations in 2025 and deregistration was completed as of January 14, 2026; (ii) CAE initiated insolvency proceedings in 2025 and is currently subject to
 supervision by a court-appointed provisional insolvency administrator; (iii) CEGE continues to be actively marketed for disposal, and the Company remains committed to executing its divestment plan. The Company continues to actively pursue the
 disposal of CEGE, and as of December 2025, a prospective buyer has submitted a renewed non-binding offer. The transaction is expected to be completed in 2026, subject to completion of due diligence and regulatory approvals.

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

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

 December 31,

 December 31,

 2025

 2024

 Cash and cash equivalents

 $

 48,863 
 
 $

 140,029 
 
 Accounts receivable, net

 144,856 
 
 1,406,457 
 
 Inventories

 1,318,610 
 
 4,983,432 
 
 Prepayment and other current assets, net

 1,214,361 
 
 1,035,486 
 
 Long-term investment

 - 
 
 89,533 
 
 Other non-current assets

 - 
 
 54,032 
 
 Total assets classified as held for sale

 $

 2,726,690 
 
 $

 7,708,969 
 
 Accounts payable

 $

 1,439,004 
 
 $

 1,534,467 
 
 Accrued expenses and other current liabilities

 579,443 
 
 809,773 
 
 Contractual liabilities

 84,641 
 
 80,696 
 
 Operating lease liabilities, current

 - 
 
 30,603 
 
 Total liabilities classified as held for sale

 $

 2,103,088 
 
 $

 2,455,539 
 
 The key components of loss from discontinued operations for the years ended December 31, 2025 and 2024 were as follows:

 For the Years Ended December 31,

 2025

 2024

 Net revenues

 $

 645,976 
 
 $

 3,766,417 
 
 Cost of goods sold

 ( 1,966,383 
 
 )

 ( 9,103,978 
 
 )

 Gross loss

 ( 1,320,407 
 
 )

 ( 5,337,561 
 
 )

 Selling and marketing expenses

 ( 385,372 
 
 )

 ( 2,488,122 
 
 )

 General and administrative expenses

 ( 480,035 
 
 )

 ( 2,737,938 
 
 )

 Research and development expenses

 - 
 
 ( 399,002 
 
 )

 Provision for credit losses

 ( 1,481,720 
 
 )

 - 
 
 Total operating expenses

 ( 2,347,127 
 
 )

 ( 5,625,062 
 
 )

 Loss from discontinued operations

 ( 3,667,534 
 
 )

 ( 10,962,623 
 
 )

 (Loss) income from long-term investments

 ( 97,794 
 
 )

 6,114 
 
 Foreign currency exchange (loss) gain, net

 ( 66,598 
 
 )

 39,291 
 
 Other (loss) income, net

 ( 303,791 
 
 )

 121,526 
 
 Loss from discontinued operations before taxes

 ( 4,135,717 
 
 )

 ( 10,795,692 
 
 )

 Income tax expenses

 - 
 
 - 
 
 Loss from discontinued operations, net of tax

 $

 ( 4,135,717 
 
 )

 $

 ( 10,795,692 
 
 )

 F-8 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

 As of December 31, 2025, Cenntro Inc.’s subsidiaries were as follows:

 Name
 Date of
 Incorporation
 Place of
 Incorporation
 Percentage of direct or
 indirect economic
 interest
 
 Cenntro Electric Group Pty Limited (“CEGL”) 
 May 11, 2017 
 Australia 
 100 % owned by Cenntro Inc.
 
 Cenntro Automotive Corporation (“CAC”)
 March 22, 2013 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Cenntro Electric Group, Inc. (“CEGI”)
 March 9, 2020 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Cennatic Power, Inc. (“Cennatic Power”)
 June 8, 2022 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Cenntro Electric Group (Europe) GmbH (2) 
 January 13, 2022 
 Frankfurt, Germany 
 100 % owned by Cenntro Inc.
 
 Bison Motors Inc. (formerly known as “Teemak Power Corporation”) (1) 
 January 31, 2023 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Avantier Motors Corporation
 November 17, 2017 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Cennatic Energy S. de R.L. de C.V.
 August 24, 2022 
 Monterrey, Mexico 
 100 % owned by Cenntro Inc.
 
 Cenntro Automotive S.A.S.
 January 16, 2023 
 Galapa, Colombia 
 100 % owned by Cenntro Inc.
 
 Cenntro Electric Colombia S.A.S.
 March 29, 2023 
 Atlántico, Colombia 
 100 % owned by Cenntro Inc.
 
 Cenntro Automotive Group Limited (“CAG HK”)
 February 15, 2016 
 Hong Kong 
 100 % owned by Cenntro Inc.
 
 Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”)
 June 5, 2017 
 PRC 
 100 % owned by Cenntro Inc.
 
 Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”)
 May 6, 2016 
 PRC 
 100 % owned by Cenntro Inc.
 
 Zhejiang Cenntro Machinery Co., Limited
 January 20, 2021 
 PRC 
 100 % owned by Cenntro Inc.
 
 Jiangsu Tooniu Tech Co., Limited
 December 19, 2018 
 PRC 
 100 % owned by Cenntro Inc.
 
 Hangzhou Hengzhong Tech Co., Limited
 December 16, 2014 
 PRC 
 100 % owned by Cenntro Inc.
 
 Teemak Power (Hong Kong) Limited (HK)
 May 17, 2023 
 Hong Kong 
 100 % owned by Cenntro Inc.
 
 Avantier Motors (Hong Kong) Limited
 March 13, 2023 
 Hong Kong 
 100 % owned by Cenntro Inc.
 
 Cenntro Automotive Europe GmbH (“CAE”) (2) 
 May 21, 2019 
 Herne, Germany 
 100 % owned by Cenntro Inc.
 
 Cenntro Electric B.V.
 December 12, 2022 
 Amsterdam, Netherlands 
 100 % owned by Cenntro Inc.
 
 Cenntro Elektromobilite Araçlar A.Ş
 February 21, 2023 
 Turkey 
 100 % owned by Cenntro Inc.
 
 Cenntro Elecautomotiv, S.L.
 July 5, 2022 
 Barcelona, Spain 
 100 % owned by Cenntro Inc.
 
 Simachinery Equipment Limited (“Simachinery HK”)
 June 2, 2011 
 Hong Kong 
 100 % owned by Cenntro Inc.
 
 Cenntro EV Center Italy S.R.L. (2) 
 May 8, 2023 
 Italy 
 100 % owned by Cenntro Inc.
 
 Antric GmbH
 August 21, 2020 
 Herne, Germany 
 100 % owned by Cenntro Inc.
 
 Pikka Electric Corporation
 August 3, 2023 
 Delaware, U.S. 
 100 % owned by Cenntro Inc.
 
 Centro Technology Corporation
 August 24, 2023 
 California, U.S. 
 100 % owned by Cenntro Inc.
 
 Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”)
 July 1, 2021 
 PRC 
 80 % owned by Cenntro Inc.
 
 Hangzhou Hezhe International Trading Co., Ltd.
 
 July 15, 2025 
 
 PRC 
 
 80 % owned by Cenntro Inc.
 
 (1) On March 6, 2025, Teemak Power Corporation changed its name to Bison Motors Inc. 
 
 (2) The subsidiaries were scheduled for structured dissolution and were measured as held for sale operations. On January 14, 2026, Cenntro EV Center Italy S.R.L. was deregistered. 
 
 (3) On April 1, 2025, the other shareholder of Cenntro Electric CICS, S.R.L., Billy Rafael Romero Del Rosario increased his shareholding from 10 shares to 29,010 shares through additional capital distribution. As a result, the total number of issued shares in Cenntro Electric CICS, S.R.L. increased from 1,000 to 30,000 , reducing the Company’s equity interest from 99 % to 3.3 %. On April 24, 2025, the Company entered an agreement with Casida Del Rosario Alvarado to dispose its equity interest of Cenntro Electric CICS, S.R.L., with a consideration of DOP 100,000 (approximately $ 1,694 ). For the year ended December 31, 2025, the Company recognized gain of $ 1,157,556 from disposal of Cenntro Electric CICS, S.R.L. 
 
 (4)
 On October 22, 2025 and November 12, 2025, the deregistration of Sinomachinery Zhejiang and Cenntro Machinery was completed, respectively. 
 
 F-9 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 (a) Basis of presentation
 
 The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules
 and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries.
 
 All intercompany balances and transactions have been eliminated in consolidation and combination.
 
 (b) Use of estimates
 
 The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of
 assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant accounting estimates
 reflected in the Company’s consolidated financial statements include estimates and judgments applied in determination of provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets
 and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial
 reporting process, actual results could differ from those estimates.
 
 (c) Fair value measurement
 
 ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to
 which inputs used in measuring fair value are observable in the market. These tiers include:
 
 Level 1—defined as observable inputs such as quoted prices in active markets;
 
 Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
 
 Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
 
 The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and
 to related parties, accounts payable and other current liabilities and short-term loans.
 
 The carrying value of cash and cash equivalents, restricted cash, accounts receivable and other current assets, accounts payable, other current liabilities, bank loans and amount due from and
 to related parties, current were approximate their fair values because of the short-term nature of these items. The estimated fair values of loans from third parties were not materially different from their carrying value as presented due to
 the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.
 
 Currency-cross swap was classified within Level 1 of the fair value hierarchy because they were valued using quoted prices in active markets. As the issuer is not yet listed and there are no
 similar companies in the market at the same stage of development for comparison, the investment is difficult to value, and the valuation is not considered reliable. Therefore, the Company develop its own assumption by future cash flow forecast,
 which contains principal paid and interests accrued.
 
 The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at
 initial recognition. The Company has elected to apply the fair value option to: i) convertible promissory notes payable due to the complexity of the various conversion and settlement options available to notes holders; ii) convertible loan
 receivable, which was recognized as debt security in long-term investments, and iii) currency-cross swap, which was recognized as derivative financial instruments. Specifically, positive fair values of cross-currency swaps are classified as
 short-term investments in the consolidated balance sheet, and negative fair values of such instruments are recorded in other current liabilities.
 
 The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be
 required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option
 election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair
 value on a recurring basis as of each reporting period date.
 
 F-10 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of
 the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities in the Company’s consolidated statement of operations. The estimated fair value adjustment is presented in a 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 warrant shares of the Company. The Company
 utilizes a Binomial model to estimate the fair value of the warrants, which are classified as Level 3 within the fair value hierarchy. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of
 operations.
 
 As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a
 practical expedient are private equity funds, which represent the investment in equity security on the consolidated balance sheet. The Company evaluates whether NAV remains representative of fair value at each reporting date, considering, among
 other factors, liquidity restrictions, the financial condition of the investee, and the ability to realize returns. Adjustments may be required to reflect the specific characteristics that market participants would consider in pricing the
 investment.
 
 (d) Cash and cash equivalents and restricted cash
 
 The Company considers highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
 
 Restricted cash consists of cash restricted as to withdrawal or use. Such restricted cash relates to cross-currency swap guarantees card and litigations.
 
 (e) Long-term time deposits
 
 Long-term time deposits comprise of deposits placed with certain bank with maturity of one to three years . As of December 31, 2025 and 2024, nil and $ 700,000 , respectively, was pledged with banks as security in relation to the guarantee for the long-term bank loans and restricted to use in Cenntro Electric CICS, S.R.L. (Note 13).
 
 The decrease in pledged deposits to nil as of December 31, 2025 was primarily due to the release of the related bank guarantees following the Company’s disposal of its equity interest in Cenntro Electric CICS, S.R.L. in April 2025.
 
 (f) Accounts receivable and allowance for credit losses
 
 Accounts receivable are recognized and carried at net realizable value.
 
 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. Allowance for credit losses balance 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.
 
 The Company’s financial assets subject to the current expected credit loss (“CECL”) model mainly include accounts receivable, certain receivable components within other current assets and
 other non-current assets and debt security investments.
 
 For the years ended December 31, 2025 and 2024, allowance for credit losses recognized by the Company were mainly generated from accounts receivable and certain components within other
 current assets.
 
 (g) Inventories
 
 Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the
 basis of weighted average and comprises direct materials, direct labor cost and an appropriate proportion of overhead.
 
 Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. For the years ended December 31, 2025 and 2024, write-downs of $ 2,554,421 and $ 6,462,514 , respectively, were recorded in cost of sales in the consolidated statements of operations and comprehensive loss. Loss on inventory write-off, including losses from physical inventory counts or obsolescence where no future economic benefit is expected, are recognized in cost of goods sold in the period incurred. For the years ended December 31, 2025 and 2024, loss on inventory write-off of $ 2,892,133 and nil , respectively, were recorded in cost of sales in the consolidated statements of operations and comprehensive loss.
 
 F-11 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (h) Derivative financial instruments
 
 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 derivative financial
 instruments modifies the Company’s exposure to these risks with the goal of reducing the risk or cost to the Company. 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 derivative financial instruments 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, 2025 and 2024, all of the cross-currency swap contracts were accounted for as economic
 hedges.
 
 (i) Investment in equity securities
 
 For investments in equity securities whose returns are linked to the performance of underlying assets, the Company elected the fair value option at the date of initial recognition and carried
 these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss.
 
 The Company determines the appropriate accounting treatment for its investments in equity securities at the time of acquisition and reassesses such determinations when facts and circumstances
 change. 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 estimate the fair value of the Fund.

 (j) 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 accounted for credit losses on AFS debt securities in accordance with ASC 326-30, Financial Instruments—Credit Losses. Under ASC 326-30,
 the Company evaluates AFS debt securities at each reporting date to determine whether a decline in fair value below amortized cost is attributable to credit-related factors or non-credit factors. If a credit-related impairment is identified,
 the Company records an allowance for credit losses through earnings, limited to the difference between amortized cost and fair value. Non-credit related declines remain in accumulated other comprehensive income. If credit quality improves,
 previously recognized credit losses are reversed through earnings, up to the amount of prior allowance. The Company assesses credit risk based on issuer financial health, market conditions, and macroeconomic factors.
 
 (K) Property, plant and equipment, net
 
 Property, plant and equipment are carried at cost less accumulated depreciation and any impairment. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows:
 
 Category

 Estimated useful life

 Land

 Infinite

 Plant and building

 20 years
 
 Machinery and equipment

 5 - 10 years
 
 Office equipment

 3 - 5 years
 
 Motor vehicles

 3 - 5 years
 
 Leasehold improvement

 Over the shorter of the lease term or estimated useful lives

 The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and
 residual values of a major asset or a major category of assets may not be reasonable. Factors that the Company considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not
 limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be
 performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors.
 
 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 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.
 
 (l) Intangible assets, net
 
 Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows: 
 
 Category

 Estimated useful life

 Land use rights

 45.75 - 50 years
 
 Software

 3 years
 
 Technology

 5 years
 
 Trademark

 5 years
 
 (m) Impairment of long-lived assets
 
 The Company evaluates the recoverability of long-lived assets or asset group with determinable useful lives whenever events or changes in circumstances indicate that an asset or a group of assets’ carrying amount may not be recoverable. The Company measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset group, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The impairment test is performed at the asset group level. There was no impairment recognized for the years ended December 31, 2025 and 2024, respectively.
 
 F-12 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (n) Goodwill
 
 Goodwill represents the future economic benefits arising from other assets acquired in a business combination. Goodwill acquired in a business combination is tested for impairment at least
 annually or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company performs impairment analysis on goodwill as of December 31 every year either beginning with a qualitative
 assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for
 which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows. If the fair value of each reporting unit exceeds its
 carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill
 allocated to that reporting unit.
 
 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. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other
 assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.
 
 Impairment loss for goodwill of nil and $ 209,130 was recorded for the years ended December 31, 2025 and 2024.
 
 (o) Long-term investment
 
 Equity method investments 
 
 Investee companies over which the Company has the ability to exercise significant influence but does not have a controlling interest through investment in common shares or in substance common shares are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20 % and 50 %, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate.
 
 Under the 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 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.
 
 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 the carrying amount of an investment may not be recoverable. The Company
 considers available quantitative and qualitative evidence in evaluating potential impairment of its long-term investments.
 
 For equity securities without a readily determinable fair value that are accounted for under the measurement alternative, the Company performs a qualitative assessment to identify impairment
 indicators. If such indicators are present, the Company estimates the fair value of the investment and recognizes an impairment loss in earnings to the extent that the carrying amount exceeds the fair value. The adjusted carrying amount becomes
 the new cost basis.
 
 For equity securities measured at fair value, changes in fair value are recognized in earnings, and no separate impairment assessment is required.
 
 F-13 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (p) Revenue recognition
 
 The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or
 services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations;
 (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
 
 The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.
 
 The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an
 assurance warranty. The warranty is not considered separate performance obligations and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and,
 therefore, does not believe an accrual for these costs is necessary.
 
 Revenue is recognized upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to
 which the Company expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes).
 
 The Company acts as a principal in the revenue generating process and should recognize revenue on a gross basis. Revenues are measured as the amount of consideration the Company expects to
 receive in exchange for transferring products to customers. The transaction price is generally fixed as specified in the contracts. The Company’s contracts do not include explicit rights of return, and variable consideration is not significant.
 
 All transactions are settled in cash within the normal credit period, and there is no financing component.
 
 Shipping, handling costs and freight-out expenses for product shipments that occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than
 separate performance obligations and are recorded as selling and marketing expenses. These costs primarily include domestic transportation and other logistics expenses incurred prior to export under EXW, FOB or FCA arrangements, or costs
 incurred before delivery to customers.
 
 The following table disaggregated the Company’s revenues by product lines for the years ended December 31, 2025 and 2024:
 
 For the Years Ended December 31,

 2025

 2024

 Vehicles sales

 $

 16,646,054 
 
 $

 31,658,358 
 
 Spare-parts sales

 1,730,394 
 
 2,977,323 
 
 Other service income

 349,689 
 
 428,129 
 
 Net revenues

 18,726,137 
 
 35,063,810 
 
 Less: net revenues, discontinued operation

 ( 645,976 
 
 )

 ( 3,766,417 
 
 )

 Net revenues, continuing operation

 $

 18,080,161 
 
 $

 31,297,393 
 
 F-14 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 The Company’s revenues are primarily derived from America, Europe and Asia. The following table set forth disaggregation of revenue by customer location.
 
 For the Years Ended December 31,

 2025

 2024

 Primary geographical markets

 Europe

 $

 12,804,228 
 
 $

 9,485,770 
 
 Asia

 4,035,448 
 
 4,579,104 
 
 America (1)

 1,852,544 
 
 20,888,931 
 
 Others

 33,917 
 
 110,005 
 
 Net revenues

 18,726,137 
 
 35,063,810 
 
 Less: Net revenues, discontinued operation

 ( 645,976 
 
 )

 ( 3,766,417 
 
 )

 Net revenues, continuing operation

 $

 18,080,161 
 
 $

 31,297,393 
 
 (1) The decrease in revenue from the Americas for the year ended December 31, 2025 was primarily attributable to changes in the external trade environment, including increased tariffs and related uncertainties, which adversely affected the Company’s sales activities in the U.S. market. 
 
 Contract Balances 
 
 Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts
 invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment.
 
 Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2025 and 2024, the Company recognized $ 1,085,742 and $ 1,120,355 revenue that was included in contractual liabilities as of January 1, 2025 and 2024, respectively.
 
 The following table provided information about receivables and contractual liabilities from contracts with customers : 
 
 December 31,

 2025

 December 31,

 2024

 Accounts receivable, net

 $

 1,426,094 
 
 $

 4,688,322 
 
 Less: accounts receivable, net, held for discontinued operation

 ( 144,856 
 
 )

 ( 1,406,457 
 
 )

 Accounts receivable, net, held for continuing operation

 1,281,238 
 
 3,281,865 
 
 Contractual liabilities

 $

 3,106,185 
 
 $

 4,202,001 
 
 Less: contractual liabilities, held for discontinued operation

 ( 84,641 
 
 )

 ( 80,696 
 
 )

 Contractual liabilities, held for continuing operation

 3,021,544 
 
 4,121,305 
 
 (q) Cost of goods sold
 
 Cost of goods sold mainly consists of production related costs including costs of raw materials, consumables, direct labor, manufacturing overhead, depreciation of property, plant and
 equipment, manufacturing waste treatment processing fees, cost of finished goods transferred between warehouses and inventory write-downs.

 (r) Advertising and promotional expenses
 
 Advertising related expenses, including promotion expenses and production costs of marketing materials, are charged to the consolidated statements of operations and comprehensive loss as incurred, and amounted to $ 393,963 and $ 3,569,176 for the continuing operation, and nil and $ 154,883 for the discontinued operation for the years ended December 31, 2025 and 2024, respectively.
 
 F-15 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (Expressed in U.S. dollars, except for number of shares)

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (s) Government subsidies
 
 The Company’s PRC based subsidiaries received government subsidies from certain local governments. The Company’s government subsidies consist of specific subsidies and other subsidies.
 Specific subsidies are subsidies that the local government has provided for a specific purpose, such as land fulfillment costs. Other subsidies are the subsidies that the local government has not specified its purpose for and are not tied to
 future trends or performance of the Company, receipt of such subsidy income is not contingent upon any further actions or performance of the Company and the amounts do not have to be refunded under any circumstances.
 
 Specific subsidies relating to land use rights are accounted for as an income with the subsidy benefit reflected over the related asset useful life. Other subsidies are recognized as other
 income upon receipt as further performance by the Company is not required.
 
 (t) Income taxes
 
 The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach,
 deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for
 deferred tax calculation represents management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is
 recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative.
 
 Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to
 estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between
 the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years when the reported amounts
 of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of
 the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely
 than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
 
 As required by applicable tax law, interest on non-payment of income taxes and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes. The tax returns of the Company and its Germany, Hong Kong and PRC subsidiaries are subject to examination by the relevant local tax authorities. The standard period in which Australian Taxation Office can amend an assessment is four years and there is no statute of limitation in the case of fraud or evasion. The statutory limitation period in Germany for the issue or correction of assessments is four years from the end of the year in which the return was filed. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. According to the Departmental Interpretation and Practice Notes No.11 (Revised) of the Hong Kong Inland Revenue Ordinance (the “HK tax laws”), an investigation normally covers the six years of the assessment prior to the year of the assessment in which the investigation commences. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 . In the case of transfer pricing issues, the statute of limitation is ten years . There is no statute of limitation in the case of tax evasion. U.S. federal tax matters are open to examination for years 2015 through 2025 . For the years ended December 31, 2025 and 2024, the Company did not have any material interest or penalties associated with tax positions. The Company did not have any significant unrecognized uncertain tax positions as of December 31, 2025 or 2024. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
 
 (u) Foreign currency translation and transaction
 
 The consolidated financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of the Company’s PRC subsidiaries and Simachinery HK is the Renminbi
 (“RMB”). The functional currency of CAE, CEGE and Antric GmbH is the Euro (“EUR”), and CEGI and the Company’s other subsidiaries in United States and Hong Kong except for Simachinery HK is the USD. The functional currency of Cenntro Electric
 CICS, S.R.L. was Dominican Peso (“DOP”). The functional currency of Cenntro Automotive S.A.S. and Cenntro Electric Colombia S.A.S. was Colombian Peso (“COP”). The functional currency of Cenntro Elektromobilite Araçlar A.Ş was Turkish Lira
 (“TRY”). The functional currency of Cennatic Energy S. de R.L. de C.V. was Mexican Peso (“PESO”).
 
 Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated financial statements are translated into USD from RMB, EUR, Dominican peso (“DOP”), Colombian peso (“COP”), Turkish lira (“TRY”), and Mexican peso (“MXN”) 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 U.S. Federal Reserve Board.
 
 For the Years Ended December 31,

 2025

 2024

 Year end USD: RMB exchange rate

 6.9931 
 
 7.2993 
 
 Average USD: RMB exchange rate

 7.1875 
 
 7.1957 
 
 Year end USD: EUR exchange rate

 1.1736 
 
 1.0351 
 
 Average USD: EUR exchange rate

 1.1306 
 
 1.0820 
 
 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.
 
 F-16 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (Expressed in U.S. dollars, except for number of shares)

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (v) Comprehensive loss
 
 Comprehensive loss includes all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be
 recognized under current accounting standards as components of comprehensive loss are required to be reported in a financial statement that is presented with the same prominence as other financial statements. For the years presented,
 comprehensive loss includes net loss, the gain/loss from available for sale debt investments and the foreign currency translation changes.
 
 (w) Segments
 
 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 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.
 
 The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2025 and 2024. 
 
 Long-lived assets
 
 December 31,

 2025

 2024

 PRC

 $

 18,850,948 
 
 $

 18,870,911 
 
 US

 3,510,019 
 
 8,544,239 
 
 Europe

 1,553,990 
 
 1,971,381 
 
 Mexico

 - 
 
 3,792,146 
 
 Dominican

 - 
 
 395,569 
 
 Others

 811 
 
 893 
 
 Total long-lived assets

 23,915,768 
 
 33,575,139 
 
 Less: long-lived assets, held for discontinued operation

 - 
 
 - 
 
 Long-lived assets, held for continuing operation

 $

 23,915,768 
 
 $

 33,575,139 
 
 (x) Share-based compensation expenses
 
 The Company’s share-based compensation expenses are recorded in accordance with ASC 718.
 
 Share-based awards to employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a
 straight-line basis, over the requisite service period, with a corresponding impact reflected in additional paid-in capital.
 
 The estimate of forfeiture rate will be adjusted over the requisite service period to the extent that the actual forfeiture rate differs, or is expected to differ, from such estimates.
 Changes in estimated forfeiture rate will be recognized through a cumulative catch-up adjustment in the period of change.
 
 (y) Convertible promissory notes
 
 The Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20), effective for the year ended June 30, 2025. The Company accounts for its convertible debentures
 and notes primarily under ASC 470, Debt.
 
 Under the amended guidance, convertible instruments are accounted for as a single liability instrument measured at amortized cost. This simplified approach eliminates the requirement under
 previous guidance to separately account for beneficial conversion features (“BCF”) or cash conversion features (“CCF”) in equity.
 
 An exception to this single-instrument approach applies if an embedded conversion feature is required to be bifurcated from the host debt instrument and accounted for separately as a
 derivative under ASC 815, Derivatives and Hedging (“ASC 815”). This is required when the conversion feature’s economic characteristics are not considered clearly and closely related to the host debt, the feature meets the definition of a
 derivative, and it does not qualify for a scope exception from derivative accounting. If bifurcation is required, the embedded derivative is recognized as a liability and measured at fair value, with subsequent changes in fair value reported in
 earnings. The portion of the proceeds allocated to the derivative creates a debt discount, which is amortized to interest expense over the term of the debt.
 
 For instruments accounted for as a single liability, debt issuance costs are recorded as a direct deduction from the carrying amount and are amortized to interest expense over the term of the
 debt using the effective interest method. Upon conversion into shares in accordance with the original contractual terms, the carrying amount of the debt is reclassified to equity, and no gain or loss is recognized in the income statement.
 
 The Company evaluates modifications of convertible debentures and notes to determine whether such modifications are substantial. If a modification is not substantial, it is accounted for as a
 modification of the existing instrument, with a revised effective interest rate based on the updated cash flows. If a modification is considered substantial, the existing instrument is derecognized and the new instrument is recognized, with any
 resulting difference recognized in earnings.
 
 Upon extinguishment of convertible debentures and notes, including repayment or settlement, the difference between the carrying amount of the instrument and the consideration paid is
 recognized as a gain or loss in the consolidated statements of operations.
 
 (z) Derivative liability
 
 The Company accounts for derivative financial instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). Derivative instruments are initially recognized at fair value on the
 consolidated balance sheets and are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.
 
 Derivatives may arise from embedded features within convertible debentures and notes or from freestanding financial instruments. An embedded feature is bifurcated from the host contract and
 accounted for separately as a derivative when the feature’s economic characteristics and risks are not clearly and closely related to those of the host contract, the feature meets the definition of a derivative, and it does not qualify for a
 scope exception under ASC 815.
 
 If bifurcation is required, the embedded derivative is recognized as a derivative liability and measured at fair value, with subsequent changes in fair value recognized in earnings. The
 portion of the proceeds allocated to the derivative creates a debt discount, which is amortized to interest expense over the term of the host debt using the effective interest method.
 
 For freestanding derivative instruments that are classified as liabilities, the Company measures such instruments at fair value at issuance and remeasures them at each reporting date, with
 changes in fair value recognized in earnings.
 
 The Company evaluates modifications of contracts containing derivative features to determine whether such modifications result in the extinguishment of the original instrument or the
 continuation of the existing instrument. If the modification is considered substantial, the original derivative is derecognized and a new derivative is recognized at fair value, with any resulting difference recognized in earnings.
 
 Upon settlement or termination of a derivative liability, the difference between the carrying amount of the derivative and the consideration paid is recognized in earnings.
 
 (aa) Operating lease
 
 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. For the years ended December 31, 2025 and 2024, loss from early termination of lease contract of $ 717,633 and $ 2,218,120 were recognized, respectively.
 
 (ab) Non-controlling Interest
 
 A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or 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 statements of operations and other comprehensive loss are attributed to controlling and non-controlling interests.
 
 F-17 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (Expressed in U.S. dollars, except for number of shares)

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 (ac) Discontinued operations
 
 The Company classify the results of a component (or group of components) to be disposed (“disposal group”) as a discontinued operation when the disposal group meets the held-for-sale
 criteria, is disposed of by sale or is disposed of other than by sale (e.g. abandonment) and when the disposal group represents a strategic shift that has, or will have, a major effect on our operations and our financial results.
 
 We report the operating results and cash flows related to the disposal group as discontinued operations for all periods presented in our consolidated statements of comprehensive loss and
 consolidated statements of cash flows, respectively.
 
 (ad)
 Reclassification
 
 Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net loss or financial position.
 
 (ae)
 Business Combinations
 
 The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the
 aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as
 incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of
 acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as
 goodwill.
 
 (af) Recently issued accounting standards pronouncements
 
 The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised
 accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company’s operating results and financial statements may not be comparable to the operating
 results and financial statements of other companies who have adopted the new or revised accounting standards.
 
 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures 
 (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years
 beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
 
 In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the
 disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. In January 2025, the FASB issued ASU No. 2025-01 to clarify certain
 provisions of ASU 2024-03, including its effective date and transition guidance. As clarified, the amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning
 after December 15, 2027. The guidance should be applied prospectively, with an option for retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have
 on its consolidated financial statements.
 
 In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to address the measurement of expected credit losses for current accounts receivable and current contract assets arising
 from transactions accounted for under ASC 606. The update introduces a practical expedient available to all entities and an accounting policy election specifically for non-public business entities that adopt the practical expedient, aiming to
 simplify and reduce the cost complexity associated with estimating expected credit losses for such financial assets. The guidance was developed in conjunction with the Private Company Council to respond to stakeholder concerns regarding the
 burdens of existing credit loss estimation requirements for these transactions. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. The Company is
 currently evaluating the impact of adopting this standard on its consolidated financial statements and related disclosures and expects to adopt the guidance in its fiscal year beginning January 1, 2027.
 
 Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s
 consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.
 
 NOTE 3 – BUSINESS COMBINATION

 Acquisition of Hangzhou Hezhe’s equity interest 

 On June 23, 2021, the Company invested RMB 2,000,000 (approximately $ 273,999 ) in Hangzhou Hezhe to acquire 20 % of its equity interest. On May 8, 2024, the Company entered into a new equity investing agreement to acquire another 60 % of Hangzhou Hezhe’s equity interest, with the cash consideration amounted to RMB 3,704,307 (approximately $ 511,638 ), and the share transfer was completed on May 21, 2024. The fair value of previously held equity interest is RMB 1,234,769 (approximately $ 170,546 ) at the acquisition date. As of December 31, 2024, the Company held 80 % of equity interest in Hangzhou Hezhe in total.

 The transaction constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805. Cenntro Inc. is deemed to be the accounting acquirer and the assets and liabilities of Hangzhou Hezhe are recorded at the fair value as of the date of the closing. The Company completed the valuations necessary to assess the fair value of the acquired assets and liabilities and the non-controlling interests with the assistance from an independent valuation firm, resulting from which the amounts of goodwill were determined and recognized as of the respective acquisition dates. Loss of $ 149,872 from this acquisition was recognized for the year ended December 31, 2024 due to the difference between the carrying value of the equity method investment and its fair value as at the closing date.

 The following was a summary of the fair values of the assets acquired and liabilities assumed. RMB: USD exchange rate of 7.2401 as of April 30, 2024 was applied:

 As of May 21, 2024

 RMB

 USD

 Amortization Period

 Current assets (1)

 7,592,974 
 
 1,048,739 
 
 Property and equipment

 1,383,600 
 
 191,102 
 
 3 - 10 years
 
 Goodwill

 48,514 
 
 6,701 
 
 Current liabilities

 ( 2,822,703 
 
 )

 ( 389,871 
 
 )

 Deferred tax liabilities

 ( 28,539 
 
 )

 ( 3,941 
 
 )

 Noncontrolling interest

 ( 1,234,769 
 
 )

 ( 170,546 
 
 )

 Total

 4,939,077 
 
 682,184 
 
 (1) Current assets acquired primarily included cash and cash equivalent of $ 156,237 , inventories of $ 887,447 and other current assets of $ 5,055 . 
 
 F-18 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 4 - ACCOUNTS RECEIVABLE, NET

 Accounts receivable, net were summarized as follows:

 December 31, 2025

 December 31, 2024

 Accounts receivable

 $

 7,307,154 
 
 $

 6,706,364 
 
 Less: provision for credit losses

 ( 5,881,060 
 
 )

 ( 2,018,042 
 
 )

 Total accounts receivable, net

 1,426,094 
 
 4,688,322 
 
 Less: accounts receivable, net, held for discontinued operations

 ( 144,856 
 
 )

 ( 1,406,457 
 
 )

 Accounts receivable, net, held for continuing operations

 $

 1,281,238 
 
 $

 3,281,865 
 
 The changes in the provision for credit losses were as follows:

 For the Years Ended December 31,

 2025

 2024

 Balance at the beginning of the year

 $

 2,018,042 
 
 $

 1,912,268 
 
 Additions

 4,069,452 
 
 393,873 
 
 Write-off

 ( 513,229 
 
 )

 ( 174,198 
 
 )

 Foreign exchange

 306,795 
 
 ( 113,901 
 
 )

 Balance at the end of the year

 5,881,060 
 
 2,018,042 
 
 Less: balance of held for discontinued operations

 ( 3,241,658 
 
 )

 ( 1,534,996 
 
 )

 Balance of held for continuing operations

 $

 2,639,402 
 
 $

 483,046 
 
 NOTE 5 - INVENTORIES

 Inventories were summarized as follows:

 December 31, 2025

 December 31, 2024

 Raw material

 $

 8,128,078 
 
 $

 10,071,694 
 
 Work-in-progress

 1,925,771 
 
 1,395,282 
 
 Goods in transit

 39,682 
 
 129,821 
 
 Finished goods

 22,340,107 
 
 25,655,019 
 
 Inventories, gross

 32,433,638 
 
 37,251,816 
 
 Less: inventory valuation allowance

 ( 9,179,135 
 
 )

 ( 8,255,880 
 
 )

 Total inventories, net

 23,254,503 
 
 28,995,936 
 
 Less: inventories, net, held for discontinued operations

 ( 1,318,610 
 
 )

 ( 4,983,432 
 
 )

 Inventories, net, held for continuing operations

 $

 21,935,893 
 
 $

 24,012,504 
 
 The changes in inventory valuation allowance were as follows:

 For the Years Ended December 31,

 2025

 2024

 Balance at the beginning of the year

 $

 8,255,880 
 
 $

 3,504,333 
 
 Addition

 2,554,421 
 
 6,462,514 
 
 Write-off

 ( 1,850,440 
 
 )

 ( 1,626,613 
 
 )

 Foreign exchange

 219,274 
 
 ( 84,354 
 
 )

 Balance at the end of the year

 $

 9,179,135 
 
 $

 8,255,880 
 
 NOTE 6 – PREPAYMENT AND OTHER CURRENT ASSETS, NET

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

 December 31, 2025

 December 31, 2024

 Advance to suppliers

 $

 9,034,026 
 
 $

 13,435,558 
 
 Deductible input value added tax

 6,303,559 
 
 5,284,726 
 
 Loans to a third party(1)

 1,353,975 
 
 - 
 
 Others

 1,050,703 
 
 1,087,315 
 
 Less: provision for credit losses

 ( 1,514,639 
 
 )

 ( 696,698 
 
 )

 Prepayment and other current assets, net

 16,227,624 
 
 19,110,901 
 
 Less: prepayment and other current assets, net, held for discontinued operations

 ( 1,214,361 
 
 )

 ( 1,035,486 
 
 )

 Prepayment and other current assets, net, held for continuing operations

 $

 15,013,263 
 
 $

 18,075,415 
 
 (1) Loans to a third party mainly represent amounts due from Cenntro Electric CICS, S.R.L. that were reclassified as loans to a third party following the loss of control of Cenntro Electric CICS, S.R.L. in April 2025. Upon deconsolidation, the outstanding receivable balances were no longer eliminated in consolidation and were therefore presented as loans to a third party. These loans are unsecured, non-interest bearing and repayable on demand. The Company assesses the collectability of such balances and records an allowance for expected credit losses in accordance with ASC 326. 
 
 The changes in the provision for credit losses were as follows:

 For the Years Ended December 31,

 2025

 2024

 Balance at the beginning of the year

 $

 696,698 
 
 $

 752,191 
 
 Additions

 1,296,867 
 
 - 
 
 Write-off (1)

 ( 500,511 
 
 )

 ( 35,448 
 
 )

 Foreign exchange

 21,585 
 
 ( 20,045 
 
 )

 Balance at the end of the year

 1,514,639 
 
 696,698 
 
 Less: balance of held for discontinued operations

 ( 1,514,639 
 
 )

 ( 696,698 
 
 )

 Balance of held for continuing operations

 $

 - 
 
 $

 - 
 
 (1) The write-off for the year ended December 31, 2025 mainly related to (i) write-off of previously provided doubtful accounts in Cenntro Machinery, which was deregistered during the year, and (ii) Wuhu Bodge Automobile Co., Ltd., which was also deregistered, leading to the write-off of outstanding receivable balances. 
 
 F-19 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 7 – LONG-TERM INVESTMENTS

 (a) 
 
 Equity method investments, net

 Equity method investments consisted of the following:

 December 31, 2025
 
 December 31, 2024
 
 Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (1) 

 $

 2,159,481 
 
 $

 2,068,951 
 
 Able 2rent GmbH (DEU) (2) 

 108,332 
 
 89,533 
 
 Less: impairment (2) 

 ( 108,332 
 
 )

 - 
 
 Total equity method investment, net

 2,159,481 
 
 2,158,484 
 
 Less: equity method investment, net, held for discontinued operations

 - 
 
 ( 89,533 
 
 )

 Equity method investment, net, held for continuing operations

 $

 2,159,481 
 
 $

 2,068,951 
 
 (1) On September 25, 2022, the Company invested RMB 15,400,000 (approximately $ 2,202,171 ) in Entropy Yu to acquire 99.355 % of the partnership entity’s equity interest. The Company accounts for the investment under the equity method because the Company controls 50 % of voting interests in partnership matters and material matters must be agreed upon by all partners. The Company has the ability to exercise significant influence over Entropy Yu. 
 
 (2) On March 22, 2022, CAE invested EUR 100,000 (approximately $ 117,360 ) in Able 2rent GmbH (DEU) to acquire 50 % of its equity interest. For the year ended December 31, 2025, the Company recognized full impairment of Able 2rent GmbH (DEU). The impairment was primarily due to a sustained decline in the investee’s operating performance and the lack of sufficient, reliable financial and operational information to support the recoverability of the carrying amount. 
 
 (b) 
 
 Equity investment without readily determinable fair values, net

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

 December 31, 2025
 
 December 31, 2024
 
 HW Electro Co., Ltd. (1) 

 $

 1,000,000 
 
 $

 1,000,000 
 
 EEE Truck Solutions Group Inc. (2) 

 693,780 
 
 - 
 
 Total equity investment without readily determinable fair values, net

 1,693,780 
 
 1,000,000 
 
 Less: equity investment without readily determinable fair values, net, held for discontinued operations

 - 
 
 - 
 
 Equity investment without readily determinable fair values, net, held for continuing operations

 $

 1,693,780 
 
 $

 1,000,000 
 
 (1) The Company owned approximately 3% of equity interest in HW Electro Co., Ltd. (“HWE”) at initial investment cost of $ 1,000,000 . 
 
 (2) In 2025, the Company acquired certain investment in a private company through a nonmonetary transaction by transferring the ownership of eight vehicles produced by the Company in the normal business with an aggregate market value of $ 693,780 . Upon the completion of the transaction, the Company obtained 12 % of equity interest in EEE Truck Solutions Group Inc. (the “EEE”), with no significant influence which leads the transaction to be in the scope of ASC 321 and the investment was recorded as an equity investment without readily determinable fair value, with initial cost based on the fair value of the vehicles transferred which is in accordance with ASC 606-10-32-21 through 24 based on the selling price of the goods promised to the customer due to the lack of fair value of the equity interests in EEE acquired. 
 
 (c) 
 
 Debt security investments

 On July 24, 2023, the Company purchased a $ 1,000,000 convertible note (the “Convertible Note”) from third party Acton, Inc. (the “Issuer”), with the interest rate of 5 % per annum and due in June 2024. At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible loan as of the date of such conversion by the applicable conversion price. In July and August 2023, the Company paid a total amount of $ 600,000 to the Issuer. On August 30, 2024, the two parties made amendments to the purchase agreement to reduce the total purchase amount from $ 1,000,000 to $ 600,000 and extend the maturity date to July 24, 2025 . On August 7, 2025, the two parties made amendments to extend the maturity date to July 24, 2026. Before the Maturity Date, the Issuer is entitled to calling for immediate conversion of the Convertible Note (for amount of full principal and accrued interest as of the date of conversion) provided that any of the following three conditions is satisfied: i) The Issuer closes a financing transaction of not less than $ 3,000,000 with pre-money valuation not lower than $ 38,250,000 ; ii) A person or entity, or a group acquires more than fifty percent ( 50 %) of the outstanding voting power of the Issuer or all or substantially all of the assets of the Issuer; iii) The Issuer completes an initial public offering at a major US stock exchange with total market cap not lower than $ 38,250,000 . Given Acton’s limited operating scale, declining revenue, weak liquidity and the uncertain recoverability of its assets, management concluded that the recoverability of future cash flows associated with this financial asset is highly uncertain. Accordingly, for the year ended December 31, 2025, the Company recognized full credit loss of this investment. The balance of debt investments, held for continuing operations was nil and $ 641,712 , respectively, as of December 31, 2025 and 2024.
 
 F-20 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 8 – INVESTMENT IN EQUITY SECURITY

 Investment in equity security consisted of the following:

 December 31, 2025
 
 December 31, 2024
 
 MineOne Fix Income Investment I L.P (1) 

 $

 - 
 
 $

 26,604,319 
 
 Total investment in equity security

 - 
 
 26,604,319 
 
 Less: investment in equity security, held for discontinued operations

 - 
 
 - 
 
 Investment in equity security, held for continuing operations

 $

 - 
 
 $

 26,604,319 
 
 (1) On October 12, 2022, the Company entered into a subscription agreement with MineOne Partners Limited, a partnership incorporated in the British Virgin Islands, for purchase of $ 25 million partnership shares in MineOne Fix Income Investment I L.P (“MineOne”), over which MineOne Partners Limited is the General Partner. The Company held 100 % of the limited partnership equity of MineOne and was entitled to a fixed return of 5 % per annum on the investment amount, and had the rights to sell all or any portion of its partnership interest after the second anniversary of the investment if the Company gave at least ten business days ’ prior notice to the General Partner and received the consent of General Partner (“GP”). MineOne focuses on private credit loans, convertible bridge, and personal factoring. The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity fund is measured at fair value with gains and losses recognized in earnings. 
 
 For the years ended December 31, 2025 and 2024, the Company received distribution of nil and $ 500,000 of investment in MineOne, respectively.

 The Company evaluates whether NAV remains representative of fair value at each reporting date, considering, among other factors, liquidity restrictions, the financial condition of the investee, and the ability to realize returns and concluded that the reported NAV was not representative of fair value as of the balance sheet date. Accordingly the Company reassessed the fair value of the investment using a market participant perspective and considered the lack of observable market transactions and significant uncertainty regarding recoverability, with a conclusion reached that the fair value of the investment to be fully reduced to nil as of December 31, 2025.

 NOTE 9 – PROPERTY, PLANT AND EQUIPMENT, NET

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

 December 31, 2025

 December 31, 2024

 At cost:

 Plant and building

 $

 14,497,063 
 
 $

 13,856,845 
 
 Land

 1,063,270 
 
 1,063,270 
 
 Machinery and equipment

 4,620,424 
 
 3,575,885 
 
 Leasehold improvement

 924,396 
 
 1,545,417 
 
 Office equipment

 2,152,609 
 
 2,497,514 
 
 Motor vehicles

 1,321,308 
 
 1,412,266 
 
 Construction in progress

 117,415 
 
 418,340 
 
 Total

 24,696,485 
 
 24,369,537 
 
 Less: accumulated depreciation

 ( 7,703,231 
 
 )

 ( 6,019,046 
 
 )

 Impairment

 ( 1,076,529 
 
 )

 ( 949,485 
 
 )

 Property, plant and equipment, net

 15,916,725 
 
 17,401,006 
 
 Less: property, plants and equipment, net, held for discontinued operations

 - 
 
 - 
 
 Property, plants and equipment, net, held for continuing operations

 $

 15,916,725 
 
 $

 17,401,006 
 
 Depreciation expenses charged to the continuing operations for the years ended December 31, 2025 and 2024 were $ 1,760,825 and $ 1,588,642 , respectively. There’s no depreciation expense of discontinued operations for the years ended December 31, 2025 and 2024.

 There’s no impairment loss in property, plant and equipment of continuing operations and discontinued operations for the years ended December 31,2025 and 2024

 NOTE 10 – INTANGIBLE ASSETS, NET

 Intangible assets, net consisted of the following:

 December 31, 2025

 December 31, 2024

 At cost:

 Land use right

 $

 5,669,331 
 
 $

 5,431,507 
 
 Trademark

 859,075 
 
 757,693 
 
 Technology

 779,270 
 
 687,306 
 
 Software

 120,258 
 
 115,035 
 
 Total

 7,427,934 
 
 6,991,541 
 
 Less: accumulated amortization

 ( 1,284,158 
 
 )

 ( 766,239 
 
 )

 Intangible assets, net

 6,143,776 
 
 6,225,302 
 
 Less: intangible assets, net, held for discontinued operations

 - 
 
 - 
 
 Intangible assets, net, held for continuing operations

 $

 6,143,776 
 
 $

 6,225,302 
 
 Amortization expenses charged to the continuing operations for the years ended December 31, 2025 and 2024 were $ 434,200 and $ 422,221 , respectively.
 
 F-21 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 11 – ACCOUNTS PAYABLE

 December 31, 2025

 December 31, 2024

 Professional fees payable

 $

 3,665,567 
 
 $

 2,861,695 
 
 Payable to suppliers

 3,306,000 
 
 3,697,743 
 
 Others

 - 
 
 110,739 
 
 Total accounts payable

 6,971,567 
 
 6,670,177 
 
 Less: accounts payable, held for discontinued operations

 ( 1,439,004 
 
 )

 ( 1,534,467 
 
 )

 Accounts payable, held for continuing operations

 $

 5,532,563 
 
 $

 5,135,710 
 
 NOTE 12 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 Accrued expenses and other current liabilities were summarized as follows:

 December 31, 2025
 
 December 31, 2024
 
 Accrued litigation compensation

 $

 1,784,127 
 
 $

 1,761,275 
 
 Loan from third parties (1) 

 2,358,478 
 
 626,516 
 
 Rent payable - early termination of leases

 1,359,804 
 
 - 
 
 Accrued expenses

 548,384 
 
 411,941 
 
 Other taxes payable

 590,976 
 
 624,404 
 
 Employee payroll and welfare payables

 1,627,702 
 
 271,147 
 
 Credit card payable

 167,682 
 
 111,703 
 
 Accrued interest for convertible promissory note

 44,080 
 
 270,690 
 
 Others

 446,305 
 
 379,600 
 
 Total accrued expenses and other current liabilities

 8,927,538 
 
 4,457,276 
 
 Less: accrued expenses and other current liabilities, held for discontinued operations

 ( 579,443 
 
 )

 ( 809,773 
 
 )

 Accrued expenses and other current liabilities, held for continuing operations

 $

 8,348,095 
 
 $

 3,647,503 
 
 (1) This mainly represented the loans from Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc., Hongbo Jin, Gregory Hancke Hurzzeitdarlehen, Meiya Xu, Suleiman International, Commas International Holding, LLC, Barclays West Corporation, Domat (Hong Kong) Holdings Limited and Melton Corporation Limited. From April 30, 2024 to December 22, 2025 the Company entered into agreements with Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc., Hongbo Jin, Suleiman International and Domat (Hong Kong) Holdings Limited to borrow interest-free loans of $ 258,832 , $ 200,000 , $ 100,000 , $ 110,000 , $ 300,000 and $ 350,000 , which were due on April 29, 2026 , March 9, 2027 , March 31, 2026 , March 27, 2026 , April 9, 2026 and December 23, 2026 , respectively. On March 5, 2025, the Company entered an agreement with Gregory Hancke Hurzzeitdarlehen to borrow EUR 99,000 (approximately $ 116,186 ), with interest rate of 7.50 % per annum and due on December 31, 2026 , for which principal of EUR 25,000 (approximately $ 29,340 ) was repaid as of December 31, 2025. On January 23, 2025, the Company entered an agreement with Meiya Xu to borrow RMB 400,000 (approximately $ 57,199 ), with the interest rate of 3.45 % and due on December 31, 2026. On June 20, 2025, the Company entered an agreement with Commas International Holding, LLC to borrow $ 250,000 , with the interest rate of 5.00 % and due on June 18, 2026 . On August 4, 2025 and November 21, 2025, the Company entered an agreement with Barclays West Corporation to borrow $ 405,000 , with the interest rate of 6.00 % and due on August 4, 2026 and November 24, 2026. On November 6, 2025, the Company entered an agreement with Melton Corporation Limited to borrow $ 192,000 , with the interest rate of 8.00 % and due on November 6, 2026 . 
 
 F-22 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 13 –SHORT-TERM AND LONG-TERM BANK LOANS

 As of
 December 31,
 2025
 As of
 December 31,
 2024
 
 Bank and other financial institution
 Annual
 Interest
 Rate
 Start
 Maturity
 Principal
 Current
 portion
 Non-
 current
 portion
 Current
 portion
 Non-
 current
 portion
 
 Bank of Multiple Promerica Republic Dominicana (1) 
 10.00 
 %
 April and June 2024 
 April and June 2029
 $
 - 
 $
 - 
 $
 - 
 $
 86,778 
 $
 362,386 
 
 Bank of Multiple Promerica Republic Dominicana (2) 
 10.00 
 %
 June and July 2024 
 May 2025 
 -
 -
 -
 162,836 
 - 
 
 Zhejiang Changxing Rural Commercial Bank Co., Ltd. (3) 
 3.20 
 %
 December 2025 
 December 2026 , December 2027 and December 2028 
 1,215,484 
 1,430 
 1,214,054 
 -
 - 
 
 Industrial and Commercial Bank of China (4) 
 2.50 
 %
 June to December 2025 
 June to December 2026 
 1,258,383 
 1,258,383 
 -
 -
 - 
 
 Total borrowings
 2,473,867 
 1,259,813 
 1,214,054 
 249,614 
 362,386 
 
 Less: borrowings, held for discontinued operations
 -
 -
 -
 -
 - 
 
 Borrowings, held for continuing operations
 $
 2,473,867 
 1,259,813 
 1,214,054 
 $
 249,614 
 $
 362,386 
 
 (1) On April 30, 2024 and June 21, 2024, Cenntro Electric CICS, S.R.L. borrowed $ 408,000 and $ 92,000 from Bank of Multiple Promerica Republic Dominicana, with the interest of 10 % and the due date of April 29, 2029 and June 20, 2029, respectively. Cenntro Electric CICS, S.R.L. should repay the loan monthly in five years after the month the loans were borrowed. As of December 31, 2025, Cenntro Electric CICS, S.R.L. was no longer a subsidiary of the Company.
 
 (2) In April 2024, Cenntro Electric CICS, S.R.L. was granted bank facility of DOP10,000,000 (approximately $ 159,644 ) or equivalent USD from Bank of Multiple Promerica Republic Dominicana, with the interest of 10 %, with the contract term of five years . During the term of this agreement, the facility shall be reviewed on each annual calendar date. As of December 31, 2025, Cenntro Electric CICS, S.R.L. was no longer a subsidiary of the Company.
 
 (3) On December 23, 2025, the Company borrowed RMB 8,500,000 (approximately $ 1,215,484 ) from Zhejiang Changxing Rural Commercial Bank Co., Ltd., with the interest of 3.20 % per annum, with the period from December 29, 2025 to December 20, 2028. 

 (4) On May 13, 2025, the Company was granted bank facility of RMB 10,000,000 (approximately $ 1,404,692 ) from Industrial and Commercial Bank of China, with the interest of 2.50 %, with the period from May 13, 2025 to May 12, 2028. From May 2025 to September 2025, loan principle of $ 1,516,607 was borrowed from the bank and will be due in one year . From July 2025 to September 2025, loan principal of $ 623,263 was repaid. On October 14, 2025, an additional loan of $ 110,802 was borrowed. The loan was pledged by the plants and building and land use right with net value of $ 15,563,984 .
 
 F-23 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 14 - INCOME TAXES

 Australia 

 CEGL is subject to a tax rate of 25 %.

 United States 

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

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

 Europe 

 Subsidiaries in Germany, Spain, Italy, Netherlands and Turkey are subject to a tax rate of 15.825 %, 25 %, 24 %, 19 % and 25 %, respectively. The German tax rate presented above represents the federal corporate income tax plus solidarity surcharge and does not include municipal trade tax, which varies by jurisdiction.

 Hong Kong 

 In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. Effective from April 1, 2018, a two-tier corporate income tax system was officially implemented in Hong Kong, which is 8.25 % for the first HK$2.0 million profits, and 16.5 % for the subsequent profits, it is exempted from the Hong Kong income tax on its foreign-derived income. CEGI’s subsidiaries, CAG HK and Simachinery HK, are registered in Hong Kong as intermediate holding companies, subject to an income tax rate of 16.5 % for taxable income earned in Hong Kong. Payments of dividends from Hong Kong subsidiaries to CEGI are not subject to any Hong Kong withholding tax.

 PRC 

 Pursuant to the tax laws and regulations of the PRC, the Company’s applicable enterprise income tax (“EIT”) rate is 25 %. Jiangsu Tooniu Tech Co. Limited and Hangzhou Hengzhong Tech Co., Limited qualify as Small and micro enterprises in the PRC, and are entitled to pay a reduced income tax rate of 5 %.

 Mexico 

 Cennatic Energy S. de R.L. de C.V. is subject to a tax rate of 30 %.

 Colombia 

 Starting from 2023, the income tax rate of companies in Colombia was gradually increased from 30 % to 35 % and remaining at 35 % in 2024 and 2025. Cenntro Automotive S.A.S. and Cenntro Electric Colombia S.A.S. are subject to a tax rate of 35 % for the years ended December 31, 2025 and 2024.

 (1) 
 
 Income taxes

 Income tax benefit for years ended December 31, 2025 and 2024 was $ 52,920 and $ 35,524 .

 December 31,

 2025

 December 31,

 2024

 Current tax (benefit) expense

 $

 ( 2,965 
 
 )

 $

 12,327 
 
 Deferred tax benefit

 ( 49,955 
 
 )

 ( 47,851 
 
 )

 Total tax benefit

 ( 52,920 
 
 )

 ( 35,524 
 
 )

 Less: tax expense of discontinued operation

 - 
 
 - 
 
 Tax benefit of continuing operation

 $

 ( 52,920 
 
 )

 $

 ( 35,524 
 
 )

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

 For the Years Ended

 December 31,

 2025

 2024

 PRC

 $

 ( 12,000,684 
 
 )

 $

 ( 16,182,770 
 
 )

 US

 ( 26,402,024 
 
 )

 ( 11,440,101 
 
 )

 Europe

 ( 6,604,383 
 
 )

 ( 14,244,854 
 
 )

 Australia

 ( 27,499,020 
 
 )

 ( 1,406,267 
 
 )

 Others

 ( 568,739 
 
 )

 ( 1,670,149 
 
 )

 Total losses before income taxes

 ( 73,074,850 
 
 )

 ( 44,944,141 
 
 )

 Less: losses before income taxes for discontinued operations

 ( 4,135,717 
 
 )

 ( 10,795,692 
 
 )

 Losses before income taxes for continuing operations

 $

 ( 68,939,133 
 
 )

 $

 ( 34,148,449 
 
 )

 Cash paid for income taxes, net of refunds, are summarized as follows. The amounts presented represent cash payments for income taxes made in the respective jurisdictions in which the Company operates.
 
 For the Years Ended

 December 31,

 2025

 2024

 PRC

 $

 - 
 
 $

 - 
 
 US

 - 
 
 - 
 
 Europe

 - 
 
 - 
 
 Australia

 - 
 
 - 
 
 Others

 - 
 
 - 
 
 Total

 $

 - 
 
 $

 - 
 
 As the main business operations were concentrated in China, PRC statutory income tax rate was applied. The actual income tax expense reported in the consolidated statements of operations and comprehensive loss for years ended December 31, 2025 and 2024 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,

 2025

 2024

 Amount

 Percentage

 Amount

 Percentage

 Loss before provision for income tax

 $

 ( 73,074,850 
 
 )

 $

 ( 44,944,141 
 
 )

 PRC statutory income tax rate

 25 
 
 %

 25 
 
 %

 Income tax expense at the PRC statutory rate

 ( 18,268,712 
 
 )

 25.0 
 
 %

 ( 11,236,035 
 
 )

 25.0 
 
 %

 Effect of preferential tax rate

 549,898 
 
 ( 0.8 
 
 )%

 121,460 
 
 ( 0.3 
 
 )%

 Effect of international tax rates

 1,067,905 
 
 ( 1.5 
 
 )%

 999,558 
 
 ( 2.2 
 
 )%

 Effect of non-deductible expenses

 715,517 
 
 ( 1.0 
 
 )%

 34,568 
 
 ( 0.1 
 
 )%

 Effect of research and development deduction

 ( 158,580 
 
 )

 0.2 
 
 %

 ( 316,368 
 
 )

 0.7 
 
 %

 Fair value change of warrant liability

 ( 87,688 
 
 )

 0.1 
 
 %

 1,035 
 
 0.0 
 
 %

 Impairment loss of goodwill

 - 
 
 0.0 
 
 %

 55,874 
 
 ( 0.1 
 
 )%

 Effect of valuation allowance

 16,128,740 
 
 ( 21.9 
 
 )%

 10,304,384 
 
 ( 22.9 
 
 )%

 Total income tax benefit

 $

 ( 52,920 
 
 )

 0.1 
 
 %

 $

 ( 35,524 
 
 )

 0.1 
 
 %

 F-24 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 14 - INCOME TAXES (CONTINUED)

 (2) 
 
 Deferred taxes liabilities, net

 The tax effects of temporary differences that give rise to the deferred income tax liabilities balances as of December 31, 2025 and 2024 are as follows:

 December 

 31,

 2025

 December 

 31,

 2024

 Deferred income tax assets:

 Impairment loss

 $

 5,653,911 
 
 $

 4,701,765 
 
 Change in fair value of financial instrument

 3,680,165 
 
 1,183,965 
 
 Capitalization of research and experimental costs

 850,838 
 
 - 
 
 Amortization of research and experimental expenses in United States

 - 
 
 1,073,895 
 
 Net operating loss carry forwards

 55,282,430 
 
 43,534,620 
 
 Lease liabilities

 84,428 
 
 - 
 
 Accrued expenses

 ( 138,794 
 
 )

 - 
 
 Total deferred income tax assets

 65,412,978 
 
 50,494,245 
 
 Valuation allowance

 ( 65,412,978 
 
 )

 ( 50,494,245 
 
 )

 Deferred income tax assets, net

 $

 - 
 
 $

 - 
 
 Deferred tax liabilities:

 Assets valuation increase from acquisition

 ( 142,312 
 
 )

 ( 171,558 
 
 )

 Total deferred tax liabilities

 ( 142,312 
 
 )

 ( 171,558 
 
 )

 Net deferred tax liabilities

 ( 142,312 
 
 )

 ( 171,558 
 
 )

 The valuation allowances as of December 31, 2025 and 2024 were provided for the deferred income tax assets of certain subsidiaries, which were at cumulative loss positions. In assessing the
 realization of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is
 dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable.

 For entities incorporated in Hong Kong, net losses of $ 3,483,667 can be carried forward indefinitely.

 For entities incorporated in the U.S., federal net operating losses of $ 72,118,331 can be carried forward indefinitely subject to a limitation in utilization against 80 % of annual taxable income. Federal net operating losses of $ 3,740,668 , $ 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. PRC net losses of $ 48,778,303 were available to offset future taxable income. Net losses of $ 2,182,986 , $ 5,393,901 , $ 10,451,706 , $ 13,134,121 and $ 12,302,644 will expire, if unused, by 2025, 2026, 2027, 2028 and 2029, respectively.

 For entities incorporated in German, net losses of $ 39,831,028 can be carried forward indefinitely.

 For entities incorporated in Australia, net losses of $ 60,900,732 can be carried forward indefinitely.

 Internal Revenue Code of 1986, as amended (“IRC”), Section 382 provides that, after an ownership change, the amount of a loss corporation’s taxable income for any post-change year that may be
 offset by pre-change losses shall not exceed the IRC Section 382 limitation for that year. The IRC Section 382 limitation generally equals the fair market value of the old loss corporation multiplied by the long-term tax-exempt rate. A loss
 corporation is any corporation that has a net operating loss, a net operating loss carryforward, or a net unrealized built-in loss for the taxable year in which the ownership change occurs. An ownership change is a greater than 50-percentage
 point increase in ownership by five-percent shareholders.

 The Company has not yet performed an IRC Section 382 analysis to determine whether an ownership change has occurred and whether any tax attributes are limited. The Company has recorded a full
 valuation allowance against its deferred tax assets and does not expect to utilize its tax attributes. Once the Company utilizes its tax attributes, a complete IRC Section 382 analysis will be performed.

 Uncertain tax positions 

 The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and 2024, the Company did no t have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months.
 
 F-25 

 Table

 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 15 - LEASES

 The Company leases offices space under non-cancellable operating leases. The Company considers those renewal or termination options that are reasonably certain to be exercised in the
 determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are
 not recorded on the balance sheets.

 The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease.

 The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 Loss from early termination of lease contract were 717,633 and 2,218,120 for the years ended December 31, 2025 and 2024, respectively, resulting from the early termination of the Company’s operating leases.

 A summary of lease cost of continuing operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

 For the Years Ended December 31,

 2025

 2024

 Operating leases cost excluding short-term lease expenses

 $

 2,490,512 
 
 $

 3,392,185 
 
 Short-term lease expenses

 195,406 
 
 316,959 
 
 Total

 $

 2,685,918 
 
 $

 3,709,144 
 
 A summary of supplemental information related to operating leases held for continuing operations were as follows:

 December 
 31, 2025
 December 
 31, 2024
 
 Cash paid for amounts included in the measurement of lease liabilities
 $
 1,167,694 
 $
 3,955,966 
 
 Weighted average remaining lease term
 2.05 years
 4.28 years
 
 Weighted average discount rate
 6.42 
 %
 7.58 
 %
 
 The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents
 the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and an amount equal to the lease payments in a similar economic environment.

 The following table summarized the maturity of lease liabilities held for continuing operations under operating leases as of December 31, 2025:

 Operating

 Leases

 For the years ended December 31,

 2026

 1,466,487 
 
 2027

 748,048 
 
 2028

 152,758 
 
 2029

 42,799 
 
 Total lease payments

 2,410,092 
 
 Less: imputed interest

 134,202 
 
 Total

 2,275,890 
 
 Less: current portion

 1,434,441 
 
 Non-current portion

 841,449 
 
 A summary of lease cost of discontinued operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

 For the Years Ended December 31,

 2025

 2024

 Operating leases cost excluding short-term lease expenses

 $

 - 
 
 $

 509,552 
 
 Short-term lease expenses

 240,765 
 
 427,390 
 
 Total

 $

 240,765 
 
 $

 936,942 
 
 A summary of supplemental information related to operating leases held for discontinued operations were as follows:

 December 31, 2025

 December 31,2024

 Cash paid for amounts included in the measurement of lease liabilities

 $

 33,427 
 
 $

 511,628 
 
 Weighted average remaining lease term

 -

 -

 Weighted average discount rate

 - 
 
 3.18 
 
 %

 No lease liabilities held for discontinued operations under operating leases as of December 31, 2025.
 
 F-26 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 16 - CONVERTIBLE PROMISSORY NOTE AND WARRANT

 Convertible Promissory Note

 On July 20, 2022, the Company issued to investors a convertible promissory note (the “Note”) in the aggregate principal amount of $ 61,215,000 due on July 19, 2023 , unless earlier repurchased, converted or redeemed. On January 3, 2023, August 11, 2023, January 17, 2024 and December 23, 2024, the Company and the investors made amendments to extend the due date to July 19, 2023 , January 19, 2024 , January 19, 2025 and January 19, 2026 , respectively. The Note bears interest at a rate of 8 % per annum, and the net proceeds after deducting issuance expenses was $ 54,069,000 .

 The main terms of the Note are summarized as follows:

 Conversion feature 

 At any time after the issue date until the Note is no longer outstanding, this Note shall be convertible, in whole or in part, into common stock at the option of the holder, at any time and from
 time to time.

 Redemption feature 

 If the Company shall carry out one or more subsequent financings in excess of $ 25,000,000 in gross proceeds, the holder shall have the right to (i) require the Company to first use up to 10 % of the gross proceeds of such subsequent financing if the aggregate outstanding principal amount of the Note is in excess of $ 30,000,000 and (ii) require the Company to first use up to 20 % of the gross proceeds of such subsequent financing if the outstanding principal amount of the Note is $ 30,000,000 or less to redeem all or a portion of this Note for an amount in cash equal to the Mandatory Redemption Amount equal to 1.08 multiplied by the sum of principal amount subject to the mandatory redemption, plus accrued but unpaid interest, plus liquidated damages, if any, and any other amounts.

 In addition, if the closing price of the common stock on the principal trading market is below the floor price of $ 1.00 per share for a period of ten consecutive trading days, the holder shall have the right to require the Company to redeem the sum of principal amount plus accrued but unpaid interest under the Note.

 Contingent interest feature 

 The Note is subject to certain customary events of default. If any event of default occurs, the outstanding principal amount, plus accrued but unpaid interest, liquidated damages and other amounts owing, shall become immediately due and payable, and at the holder’s election, in cash at the mandatory default amount or in common stock at the mandatory default amount at a conversion price equal to 85 % of the 10 -day volume weighted average price. Commencing 5 days after the occurrence of any event of default, the interest shall accrue at an interest rate equal to the lesser of 10 % per annum or the maximum rate permitted under applicable law.

 The financial liability was initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The
 remaining estimated fair value adjustment is presented as other income (expense) in the consolidated statement of operations, as change in fair value of convertible notes.

 Note amendment May 2025

 On May 16, 2025, the Company and About Investment Pte. Ltd., a Singapore exempt private company limited by shares (“Holder”) entered into an amendment (the “Note Amendment”) to the Note originally issued by the Company on July 20, 2022, in an original principal amount of $ 52,237,500 .

 Pursuant to the Note Amendment, the parties have agreed to amend the floor price of any conversions of the Note to $ 0.202 per share (equivalent to $ 12.12 per share after giving effect to the reverse stock split effective on April13, 2026) equal to an eighty percent ( 80 %) discount of the closing bid price of the Company’s common stock during the trading day immediately preceding the Note Amendment, which will be adjusted accordingly in the event of a share split or combination. The terms of the Amended Note continue to grant the Holder the right to convert from time to time at its election, all or any portion of the outstanding balance of the Note into shares of common stock of the Company at the conversion price, which is equal to the lesser of (i) the fixed conversion price or (ii) eighty-five percent ( 85 %) of the ten( 10 )-day VWAP during the ten (10) consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date, and in each case subject to adjustment set forth in the Note.

 Conversion of Note, Exchange Agreement and 2025 Convertible Note 

 On October 8, 2025, About Investment Pte. Ltd. executed its rights to convert the Note to ordinary shares upon certain default trigger event underlying certain terms of the Note by submitting a conversion notice, resulting in an aggregate of 24,000,000 shares issued with total principal of $ 11,174,350 applied against the Note. On October 23, 2025, the Company and the Holder further entered into an exchange agreement, pursuant to which the Company issued a new convertible note in a principal amount of $ 4,000,000 (the “2025 Convertible Note”) in exchange for the cancellation of the existing Note.

 The 2025 Convertible Note bears interest at a rate of 8 % per annum and matures on January 19, 2026 . At any time after the issuance date until the 2025 Convertible Note is no longer outstanding, the 2025 Convertible Note shall be convertible, in whole or in part, into shares of common stock at the option of the Holder, at a fixed conversion price of $ 0.10 per share (equivalent to $ 6.0 per share after giving effect to the reverse stock split effective on April13, 2026), subject to adjustment for stock splits or combinations.

 Between October 23, 2025 and December 31, 2025, $ 1,200,000 of principal under the 2025 Convertible Note was converted into 12,000,000 shares (equivalent to 200,000 shares after giving effect to the reverse stock split effective on April13, 2026) of common stock. As of December 31, 2025, outstanding principal was $ 2,800,000 .

 The movement of the Note during the year ended December 31, 2025 and 2024 was as follows:

 Liability component

 As of December 31, 2023

 $

 9,956,000 
 
 Fair value change recognized

 ( 4,000 
 
 )

 As of December 31, 2024

 $

 9,952,000 
 
 Fair value change of the Convertible Note

 9,984,801 
 
 Conversion of convertible bonds into shares

 ( 15,980,904 
 
 )

 As of December 31, 2025

 $

 3,955,897 
 
 The estimated fair value of and 2025 Convertible Note as of December 31, 2025 and December 31, 2024 was computed using a Binomial lattice model and a Monte Carlo Simulation Model, respectively,
 which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement within the ASC 820 fair value hierarchy. The unobservable inputs utilized for measuring the fair value of the Note and 2025
 Convertible Note reflect the Company’s assumptions about the assumptions what market participants would use in valuing the instruments the respective measurement dates, including the Company’s historical stock price volatility, risk-free rates
 based on U.S. Treasury Strip yields, and yields of comparable debt instruments.
 
 F-27 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 16 - CONVERTIBLE PROMISSORY NOTE AND WARRANT (CONTINUED)

 We determined the fair value by using the following key inputs to the Binomial Tree Model as of December 31, 2025 and the Monte Carlo Simulation Model as of December 31, 2024:

 Fair Value Assumptions - Convertible Promissory Note
 December 31, 2025
 December 31,
 2024
 
 Face value principal payable
 $
 2,800,000 
 $
 9,953,381 
 
 Original conversion price*
 $ 6.0 per share
 $ 74.25 per share
 
 Interest Rate
 8.00 
 %
 8.00 
 %
 
 Expected term (years)
 0.05 
 1.05 
 
 Volatility
 59.00 
 %
 59.62 
 %
 
 Market yield (range)
 9.78 
 %
 9.24 
 %
 
 Risk free rate
 0.76 
 %
 4.33 
 %
 
 Issue date
 October 23,2025 
 July 20, 2022 
 
 Maturity date
 January 19, 2026 
 January 19, 2026 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 
 
 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented,
 unless otherwise indicated.

 Warrant

 Accompany with the Note, the Company issued to the same investor warrants to purchase up to 2,473,334 warrant shares (equivalent to 41,222 shares after giving effect to the reverse stock split effective on April 13, 2026) of the Company, with an exercise price of $ 1.61 per share (equivalent to $ 96.6 per share after giving effect to the reverse stock split effective on April 13, 2026), which may be exercised by the holders on a cashless basis by using Black-Scholes model to determine the net settlement shares.

 Additionally, after the Company completed the above Note financing, the Company issued to the placement agent warrants to purchase 247,333 warrant shares (equivalent to 4,122 shares after giving effect to the reverse stock split effective on April 13, 2026) of the Company at same day, as part of the underwriter’s commission. The warrants were issued with an exercise price of $ 1.77 per share (equivalent to $ 106.2 per share after giving effect to the reverse stock split effective on April 13, 2026).

 Both warrants are exercisable from the date of issuance and have a term of five years from the date of issuance. They were presented as liabilities on the 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 statement of operations.

 The movement of warrants during the years ended December 31, 2025 and 2024 were as follows:

 Investor warrants component
 
 Placement agent warrants component
 
 Shares*
 
 Amount
 
 Shares*
 
 Amount
 
 As of December 31, 2023

 14,564 
 
 $

 12,189,508 
 
 4,122 
 
 $

 3,456,578 
 
 Exercise of warrants

 ( 60 
 
 )

 ( 49,976 
 
 )

 - 
 
 - 
 
 Fair value change recognized

 - 
 
 ( 2,445 
 
 )

 - 
 
 ( 749 
 
 )

 As of December 31, 2024

 14,504 
 
 $

 12,137,087 
 
 4,122 
 
 $

 3,455,829 
 
 Exercise of warrants

 ( 14,504 
 
 )

 ( 12,487,838 
 
 )

 - 
 
 - 
 
 Fair value change recognized

 - 
 
 350,751 
 
 - 
 
 1,226 
 
 As of December 31, 2025

 - 
 
 $

 - 
 
 4,122 
 
 $

 3,457,055 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 
 
 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented,
 unless otherwise indicated.

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

 Fair Value Assumptions – Warrants 
 December 31, 2025
 December 31,
 2024
 
 Expected term (years)
 1.55 
 2.55 
 
 Volatility
 60.65 
 %
 62.78 
 %
 
 Risk free rate
 3.52 
 %
 4.32 
 %
 
 Expected expiry date
 July 19, 2027 
 July 19, 2027 
 
 F-28 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 17- SHARE-BASED COMPENSATION

 On the Implementation Date, and pursuant to the Scheme, Cenntro Inc. assumed CEGL’s obligations with respect to the settlement of the options that were issued by CEGL prior to the Implementation
 Date pursuant to CEGL’s amended and restated 2016 incentive stock option plan and 2022 stock incentive plan (the “Share Option Plans”) by way adoption of a new incentive plan, the Company’s 2023 equity incentive plan (the “2023 Plan”).

 Following the Implementation Date, no new options will be issued under the Share Option Plans. The Company has assumed CEGL’s obligations with respect to the settlement of incentive options that
 were previously issued by CEGL under the 2023 Plan.

 Incentive Stock Option Limit: the maximum number of Common Stock that may be issued upon the exercise of incentive stock options (“ISOs”) under the 2023 Plan is 30,000,000 shares (equivalent to 500,000 shares after giving effect to the reverse stock split effective on April 13, 2026) of Common Stock.
 
 For the years ended December 31, 2025 and 2024, the total share-based compensation expenses were comprised of the following:

 For the Years Ended December 31,

 2025

 2024

 General and administrative expenses

 $

 2,487,988 
 
 $

 2,921,063 
 
 Selling and marketing expenses

 62,207 
 
 98,836 
 
 Research and development expenses

 276,855 
 
 350,735 
 
 Total

 $

 2,827,050 
 
 $

 3,370,634 
 
 A summary of share options activity for the years ended December 31, 2025 and 2024 were as follows:
 
 Number
 of
 Share
 Options*
 Weighted
 Average
 Exercise
 Price*
 $
 Weighted
 Average
 Remaining
 Contractual
 Years
 Aggregate
 Intrinsic
 Value
 $
 
 Outstanding at December 31, 2023
 33,752 
 855.6 
 4.81 
 - 
 
 Granted
 - 
 - 
 
 Exercised
 - 
 - 
 
 Forfeited
 ( 1,822 
 )
 1,017.0 
 
 Expired
 ( 3,046 
 )
 1,016.4 
 
 Outstanding at December 31, 2024
 28,884 
 828.0 
 3.65 
 - 
 
 Granted
 - 
 - 
 
 Exercised
 - 
 - 
 
 Forfeited
 ( 326 
 )
 1,317.0 
 
 Expired
 ( 3,381 
 )
 769.8 
 
 Outstanding at December 31, 2025
 25,177 
 829.8 
 3.12 
 - 
 
 Expected to vest at December 31, 2025
 765 
 1,021.1 
 5.69 
 
 - 
 
 Exercisable as of December 31, 2025
 24,412 
 
 803.1 
 3.04 
 - 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 
 
 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise
 indicated.

 The Company calculated the fair value of the share options on the grant date and modification date using the Black-Scholes option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table. 

 For the Years Ended December 31,

 2025

 2024

 Expected volatility

 83.41 %~ 86.57 
 
 %

 83.41 %~ 86.57 
 
 %

 Expected dividends yield

 0 
 
 %
 
 0 
 
 %
 
 Risk-free interest rate per annum

 2.97 %~ 3.01 
 
 %

 2.97 %~ 3.01 
 
 %

 The fair value of underlying common stock (per share)

 $

 16.80 
 
 $

 16.80 
 
 The expected volatility is calculated based on the annualized standard deviation of the daily return embedded in historical share prices of the Company. The risk-free interest rate is estimated
 based on the yield to maturity of US treasury bonds based on the expected term of the incentive shares.

 As of December 31, 2025, there was approximately $ 679,790 of total unrecognized compensation cost from continuing operations related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 0.25 years.
 
 F-29 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 18 - COMMON STOCK AND RESTRICTED NET ASSETS

 Common stock

 As of December 31, 2022, the issued and outstanding ordinary shares are 30,084,199 (equivalent to 501,403 shares after giving effect to the reverse stock split effective on April 13, 2026). During the year ended December 31, 2023, investor warrants were exercised via cashless option by the investors for 360,710 ordinary shares (equivalent to 6,012 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company. On September 1, 2023 the Company held its annual general meeting of shareholders where among other proposals, the shareholders of the Company did approve the consolidation of the common stock of the Company on a one-for-ten (1:10) basis with effect from December 8, 2023. 383,869 ordinary shares (equivalent to 6,398 shares after giving effect to the reverse stock split effective on April 13, 2026) were issued during the shares consolidation. As of December 31, 2023, the issued and outstanding ordinary shares are 30,828,778 (equivalent to 513,813 shares after giving effect to the reverse stock split effective on April 13, 2026).

 During the year ended December 31, 2024, investor warrants were exercised via cashless option by the investors for 37,819 ordinary shares (equivalent to 630 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company. With Fractional shares of 17 (equivalent to 1 share after giving effect to the reverse stock split effective on April 13, 2026) issued due to reverse stock split, as of December 31, 2024, the issued and outstanding ordinary shares are 30,866,614 (equivalent to 514,444 shares after giving effect to the reverse stock split effective on April 13, 2026).

 During the year ended December 31, 2025, investor warrants were exercised via cashless option by the investors for 14,655,367 ordinary shares (equivalent to 244,256 shares after giving effect to the reverse stock split effective on April13, 2026) of the Company. 42,390,850 shares (equivalent to 706,514 shares after giving effect to the reverse stock split effective on April13, 2026) were converted from convertible bonds convertible bonds. As of December 31, 2025, the issued and outstanding ordinary shares are 87,912,831 (equivalent to 1,465,214 shares after giving effect to the reverse stock split effective on April13, 2026).

 Restricted net assets 

 A significant portion of the Company’s operations are conducted through its PRC (excluding Hong Kong) subsidiaries. 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 $28,544,279 as of December 31, 2025.
 
 NOTE 19 - NET LOSS PER SHARE

 Basic and diluted net loss per share for each of the year presented were calculated as follows:

 For the Years Ended December 31,

 2025

 2024

 Numerator:

 Net loss from continuing operations attributable to the Company’s shareholders

 $

 ( 68,846,056 
 
 )

 $

 ( 34,071,121 
 
 )

 Net loss from discontinued operations attributable to the Company’s shareholders

 ( 4,135,717 
 
 )

 ( 10,795,692 
 
 )

 Net loss attributable to the Company’s shareholders

 ( 72,981,773 
 
 )

 ( 44,866,813 
 
 )

 Denominator:

 Weighted average common stock used in computing basic and diluted loss per share

 836,814 
 
 514,023 
 
 Basic and diluted net loss from continuing operations per share

 ( 82.27 
 
 )

 ( 66.28 
 
 )

 Basic and diluted net loss from discontinued operations per share

 ( 4.94 
 
 )

 ( 21.00 
 
 )

 Basic and diluted net loss per share

 $

 ( 87.21 
 
 )

 $

 ( 87.28 
 
 )

 The Company incurred losses for the years ended December 31, 2025 and 2024, no potential common stock were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company.
 
 NOTE 20 - CONCENTRATIONS

 (a) 
 
 Customers

 The following table sets forth information as to each customer that accounted for 10% or more of net revenue for continuing operation for the years ended December 31, 2025 and 2024.

 For the Years ended December 31,
 
 2025
 2024
 
 Customer
 Amount
 % of 
 Total
 Amount
 % of
 Total
 
 A
 $
 4,744,614 
 26 
 %
 $
 - 
 - 
 
 Total
 $
 4,744,614 
 26 
 %
 $
 - 
 - 
 
 The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable, held for continuing operation as of December 31, 2025 and December 31, 2024.

 As of December 31, 2025
 As of December 31,
 2024
 
 Customer
 Amount
 % of Total
 Amount
 % of Total
 
 B
 $
 1,436,228 
 36 
 %
 $
 1,372,307 
 36 
 %
 
 C
 1,023,912 
 26 
 %
 - 
 - 
 
 Total
 $
 2,460,140 
 62 
 %
 $
 1,372,307 
 36 
 %
 
 The following table sets forth information as to each customer that accounted for 10% or more of advance from customers, held for continuing operation as of December 31, 2025 and December 31, 2024.

 As of December 31, 2025
 As of December 31,
 2024
 
 Customer
 Amount
 % of Total
 Amount
 % of Total
 
 B
 $
 793,606 
 26 
 %
 $
 823,522 
 20 
 %
 
 D
 850,822 
 28 
 %
 855,240 
 21 
 %
 
 Total
 $
 1,644,428 
 54 
 %
 $
 1,678,762 
 41 
 %
 
 (b) 
 
 Suppliers

 For the years ended December 31, 2025 and 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s total purchases of continuing operation, were as follows:

 For the Years ended December 31,

 2025

 2024

 Supplier

 Amount

 % of Total

 Amount

 % of Total

 A

 $

 7,801,930 
 
 51 
 
 %

 $

 4,518,174 
 
 23 
 
 %

 B

 * 
 
 * 
 
 6,122,780 
 
 32 
 
 %

 Total

 $

 7,801,930 
 
 51 
 
 %

 $

 10,640,954 
 
 55 
 
 %

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

 As of December 31, 2025

 As of December 31,

 2024

 Supplier

 Amount

 % of Total

 Amount

 % of Total

 C

 $

 687,529 
 
 12 
 
 %

 $

 767,767 
 
 15 
 
 %

 D

 1,056,351 
 
 19 
 
 %

 * 
 
 * 
 
 E 
 
 656,121 
 
 12 
 
 %

 * 
 
 * 
 
 Total

 $

 2,400,001 
 
 43 
 
 %

 $

 767,767 
 
 15 
 
 %

 * 
 
 Indicates below 10%.

 The following table sets forth information as to each supplier that accounted for 10% or more of advance to suppliers, held for continuing operation as of December 31, 2025 and 2024.

 As of December 31, 2025

 As of December 31,

 2024

 Supplier

 Amount

 % of Total 

 Amount

 % of Total 

 A

 $

 2,613,964 
 
 29 
 
 %

 $

 4,812,746 
 
 36 
 
 %

 B

 - 
 
 - 
 
 2,978,991 
 
 22 
 
 %

 F 
 
 2,573,966 
 
 28 
 
 %

 2,465,990 
 
 18 
 
 %

 G 
 
 1,052,064 
 
 12 
 
 %

 - 
 
 - 
 
 Total

 $

 6,239,994 
 
 69 
 
 %

 $

 10,257,727 
 
 76 
 
 %

 F-30 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 21 - COMMITMENTS AND CONTINGENCIES

 Litigation 

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

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

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

 F-31 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 21 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

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

 On April 10, 2024, CEGL filed a lawsuit against MHP Americas, Inc. (“MHP”) for breach under the Master Consulting Services Agreement and SAP S/4HANA SOW by failure to properly implement the SAP S/4HANA globally as set forth in those contracts, and for breach of implied covenants of good faith and fair dealing, causing Cenntro to suffer significant damages; and demanded a jury trial on all issues which are triable. Under this claim, CEGL is seeking for a remittance of $ 512,226 paid to date and a recission of the remaining contract with MHP. The litigation was removed to Federal Court on May 7, 2024 where it is pending. At the time of this report, discovery has been completed. Mediation is schedule on November 19, 2025. The mediation scheduled for November 19, 2025 proceeded with counsel representing the Company. No agreement was reached during the mediation session and the parties did not engage in substantive settlement discussions. As of the date of this Annual Report, no further mediation sessions have been scheduled and the parties have not yet agreed on the next procedural steps. The case remains pending before the Court.

 On March 28, 2025 BAL Freeway Associates, LLC filed an Unlawful Detainer against Cenntro Automotive Corporation alleging non-payment of rents for commercial leased property in San Bernadino County, Ontario, CA. At the time of this report negotiations between parties have been culminated in a partial settlement with possession begin restored to BAL Freeway Associates on May 31, 2025, and the issue of damages remains outstanding. On June 18, 2025, BAL Freeway filed a First Amended Complaint for Damages for Breach of Contract, seeking full damages resulting from the alleged breach of the Lease, claiming total losses no lower than $ 4,400,000 . Negotiations are ongoing at this stage of the reclassified Civil Matter.

 On April 16, 2025, Shenzhen Jiangxin Automation Technology Co., Ltd. (“Jiangxin”) filed a lawsuit with the People’s Court of Yuhang District, Hangzhou, against Hangzhou Ronda Tech Co., Limited (“Ronda”), seeking payment of equipment purchase price totaling RMB 170,555 plus accrued interest. Jiangxin claims that Ronda has failed to pay the remaining balance due under three Equipment Purchase Agreements signed during 2021 and 2022. On September 26, 2025, Ronda submitted its defense and counterclaim, asserting that Jiangxin had not fulfilled its contractual obligations, including the delivery of complete technical documents, installation and test run, and therefore the conditions for payment had not been satisfied. Ronda also reserved the right to terminate the agreements and seek a full refund of all payments made. The case remains pending before the court.

 On December 2 2025, Wuxi Hefu Metal Products Technology Co., Ltd. (“Hefu”) filed a lawsuit with the People’s Court of Yuhang District, Hangzhou, against Hangzhou Ronda Tech Co., Limited (“Ronda”), seeking payment of mold development fees totaling RMB 476,314.2 plus accrued interest. Hefu alleges that under the Automotive Parts Product Development Agreement and its supplementary agreement signed on September 20, 2022, it completed the development and delivery of the molds in accordance with the contractual requirements, but Ronda failed to pay the remaining balance of the mold development fees. Hefu further applied for property preservation, and on December 15, 2025, the court issued a ruling to freeze Ronda’s bank deposits in the amount of RMB 476,314.2 or seize other assets of equivalent value. On January 7, 2026, the court organized a pre-trial mediation between the parties. The parties are currently awaiting the mediation proposal from the court. If mediation is unsuccessful, the case will proceed to formal trial. The case remains pending before the court.
 
 NOTE 22 - RELATED PARTY TRANSACTIONS AND BALANCES

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

 Name of related parties:
 Relationship with the Company
 
 Zhejiang RAP
 An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary 
 
 Billy Rafael Romero Del Rosario
 A shareholder who owns 1% equity interest of Cenntro Electric CICS, S.R.L. and is the CEO of Cenntro Electric CICS, S.R.L. as of December 31, 2024. Since April 1, 2025, Billy Rafael Romero Del Rosario was not a related party of the Company with the disposal of Cenntro Electric CICS, S.R.L. 
 
 Zhongchai Holding (Hong Kong) Limited(“Zhongchai”)
 An entity ultimately controlled by Peter Z. Wang, the CEO of the Company 
 
 Hangzhou Greenland Energy Technologies Co., Ltd.(“Greenland”)
 An entity ultimately controlled by Peter Z. Wang, the CEO of the Company 
 
 HEVI Corp.
 An entity ultimately controlled by Peter Z. Wang, the CEO of the Company 
 
 Hangzhou Hezhe
 An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary since June 23, 2021. On May 8, 2024, Hangzhou Hezhe become a subsidiary of the Company. 
 
 F-32 

 Table
 of Contents 

 CENNTRO INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 22 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

 Related party transactions 

 During the years ended December 31, 2025 and 2024, the Company had the following material related party transactions for the continuing operation.

 For the Years Ended
 December 31,
 
 2025
 
 2024
 
 Interest income from a related party

 Zhejiang RAP

 $

 - 
 
 $

 22,227 
 
 Interest expense to a related party

 Zhongchai

 49,675 
 
 - 
 
 Interests-bearing loan from a related party

 Zhongchai

 1,000,000 
 
 - 
 
 Repayment of Interests-bearing loan to a related party

 Zhongchai

 160,000 
 
 - 
 
 Interests-bearing loan to a related party

 Greenland

 27,826 
 
 - 
 
 Repayment of interests-bearing loan principal and interest from a related party

 Greenland

 28,301 
 
 - 
 
 Prepayment of operating fund to a related party

 Billy Rafael Romero Del Rosario (1) 

 25,384 
 
 675,058 
 
 Reimbursement from a related party

 Billy Rafael Romero Del Rosario

 88,665 
 
 810,873 
 
 Rent income from a related party

 HEVI Corp.

 66,912 
 
 - 
 
 Sales of spare-part to a related party

 HEVI Corp.

 25,462 
 
 - 
 
 Purchase of raw materials from related parties

 Hangzhou Hezhe (2) 

 - 
 
 3,760 
 
 Refund on the purchase of the raw materials

 Hangzhou Hezhe (2) 

 - 
 
 69,417 
 
 (1) This was the payment to this related party for daily operating reimbursement with no interest and without expiration date in Cenntro Electric CICS, S.R.L. As of December 31, 2025, Cenntro Electric CICS, S.R.L. was no longer a subsidiary of the Company. 
 
 (2) The transaction for the year ended December 31, 2024 of this related party consisted of transaction only before it becoming a subsidiary of the Company, which was from January to April 2024. 
 
 Amounts due from Related Parties 

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

 December 31,
 2025
 
 December 31,
 2024
 
 Zhejiang RAP (1) 

 $

 12,243 
 
 $

 11,729 
 
 HEVI CORP. (2) 

 25,462 
 
 - 
 
 Total amounts due from a related party

 37,705 
 
 11,729 
 
 Less: amounts due from a related party, held for discontinued operations

 - 
 
 - 
 
 Amounts due from a related party, held for continuing operations

 $

 37,705 
 
 $

 11,729 
 
 (1) The balance mainly represents the interest income receivable from the related party. 
 
 (2) The balance mainly represents the receivable from sales of spare parts from the related party. 
 
 Amounts due to a related party - current 

 The following table presents amounts due to a related party as of December 31, 2025 and December 31, 2024.

 December 31,
 2025
 
 December 31,
 2024
 
 Zhongchai (1) 

 $

 889,675 
 
 $

 - 
 
 Billy Rafael Romero Del Rosario

 - 
 
 26,226 
 
 Total amounts due to a related party

 889,675 
 
 26,226 
 
 Less: amounts due to a related party, held for discontinued operations

 - 
 
 - 
 
 Amounts due to a related party, held for continuing operations

 $

 889,675 
 
 $

 26,226 
 
 (1) On April 15, 2025, Zhongchai entered into a loan agreement (the “Loan Agreement”) with the Company, which provides for the Company’s capacity to borrow up to $ 1.0 million as evidenced by a promissory note issued by the Company to the Lender dated as of April 15, 2025 (the “Promissory Note”). The Company intends to use the proceeds received from the Promissory Note for working capital purposes. The Promissory Note has a maturity date of April 14, 2026 , and accrues interest at a rate of 7.50 % per annum. Both parties also made supplementary agreement that the period before April 15, 2025 shall be an interest-free period for the Advanced Funds. As of December 31, 2025, loan principal of $ 160,000 was repaid. 
 
 NOTE 23 - SUBSEQUENT EVENT

 On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share.

 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless
 otherwise indicated.

 The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. Except the events mentioned above, there were no other subsequent events with material financial impact
 on the consolidated financial statements.

 F-33 

 Table
 of Contents 

 NOTE 24 – CONDENSED COMPANY FINANCIAL STATEMENTS

 The condensed parent company financial statements are presented in accordance with Rule 12-04, Schedule I of Regulation S-X, as the net assets of the Company’s consolidated subsidiaries are restricted as to transfer to the parent company in an amount exceeding 25 % of the consolidated net assets of the Company.

 Basis of presentation 
 
 The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements.
 
 Investments in subsidiaries 
 
 The Parent Company and its subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation. The results of
 operations of the Company’s subsidiaries include the impact of discontinued operations. Such amounts are reflected in “share of loss of subsidiaries” in the accompanying condensed parent company statements of operations.
 
 Condensed Balance Sheets 

 As of December 31,
 
 2025
 
 2024
 
 ASSETS

 Cash and cash equivalents

 64 
 
 26,960 
 
 Investment of subsidiaries

 49,792,926 
 
 103,625,093 
 
 TOTAL ASSETS

 49,792,990 
 
 103,652,053 
 
 LIABILITIES

 Accounts payable

 1,141,495 
 
 - 
 
 Accrued expenses and other current liabilities

 66,200 
 
 269,847 
 
 Convertible promissory notes

 3,955,897 
 
 9,952,000 
 
 Derivative liability - investor warrant

 - 
 
 12,137,087 
 
 Derivative liability - placement agent warrant

 3,457,055 
 
 3,455,829 
 
 Amount due to related parties

 889,675 
 
 　- 
 
 Total liabilities

 9,510,322 
 
 25,814,763 
 
 Shareholders’ equity

 Common stock ( 0.0001 par value; 1,465,214 and 514,444 shares issued and outstanding as of December 31, 2025 and December 31, 2024)*
 
 147 
 
 51 
 
 Additional paid-in capital

 437,740,047 
 
 405,757,052 
 
 Accumulated deficit

 ( 391,872,087 
 
 )

 ( 318,890,314 
 
 )

 Accumulated other comprehensive loss

 ( 5,585,439 
 
 )

 ( 9,029,499 
 
 )

 Total shareholders’ equity

 40,282,668 
 
 77,837,290 
 
 Total Liabilities and Equity

 49,792,990 
 
 103,652,053 
 
 * On April 13, 2026, the Company effected a 1-for-60 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every sixty (60) shares of the Company’s common stock were automatically combined into one (1) share of common stock, with any fractional shares rounded up to the nearest whole share. 
 
 All share and per share amounts presented in the accompanying consolidated financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise
 indicated.

 Condensed Statements of operations 

 For the years ended December 31,

 2025

 2024

 Operating expense:

 General and administrative expenses

 ( 2,018,906 
 
 )

 ( 558,035 
 
 )

 Interest expense, net

 ( 616,248 )
 
 ( 679,042 )
 
 Loss from Note Amendment

 57,975,110 
 
 - 
 
 Loss on exercise of warrants

 　- 
 
 　 901 
 
 Change in fair value of convertible promissory notes and derivative liability

 ( 68,205,966 
 
 )

 7,193 
 
 Share of loss of subsidiaries

 ( 60,168,683 
 
 )

 ( 43,673,354 
 
 )

 Loss before income tax expense

 ( 73,034,693 )
 
 　( 44,902,337 )
 
 Income tax benefit

 52,920 
 
 35,524 
 
 Net loss

 ( 72,981,773 )
 
 ( 44,866,813 )
 
 Condensed Statement of Cash Flow 

 For the years ended December 31,

 2025

 2024

 Net cash (used in) provided by operating activities

 ( 866,896 )
 
 26,960 
 
 Net cash provided by investing activities

 - 
 
 - 
 
 Net cash provided by financing activities

 840,000 
 
 - 
 
 Net (decrease)/ increase in cash, cash equivalents and restricted cash:

 ( 26,896 )
 
 26,960 
 
 Cash, cash equivalents and restricted cash at the beginning of year

 26,960 
 
 - 
 
 Cash, cash equivalents and restricted cash at the end of year

 64 
 
 26,960 
 
 F-34
Cenntro Inc. 10-K

Item 9A. Controls and Procedures
