UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended:

March 31, 2025

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

For the transition period from ______ to _______.

Commission file number: 001-38544

CENNTRO INC.

(Exact name of registrant as specified in its charter)

Nevada		93-2211556
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

501 Okerson Road

Freehold, New Jersey 07728

(Address of principal executive offices, including zip code)

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

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

Title of each class:		Trading Symbol(s)	Name of each exchange on which registered:
Common Stock		CENN	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

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

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

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

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

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

The registrant had 30,866,614 of the registrant’s common stock per value $0.0001 per share, issued and outstanding as of May 15, 2025.

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PART I - FINANCIAL INFORMATION	1
Item 1. Condensed Consolidated Financial Statements (Unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosure About Market Risk	41
Item 4. Controls and Procedures	41
PART II - OTHER INFORMATION	41
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3. Defaults Upon Senior Securities	43
Item 4. Mine Safety Disclosures	43
Item 5. Other Information	43
Item 6. Exhibits	43
SIGNATURES	44

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Forward-Looking Statements

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

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

●	general economic and business conditions, including changes in interest rates;

●	prices of other EVs, costs associated with manufacturing EVs and other economic conditions;

●	the effect of an outbreak of disease or similar public health threat, such as the COVID-19 pandemic, on the Company’s business (natural phenomena, including the lingering effects of the COVID-19 pandemic);

●	the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;

●	breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers;

●	the ability of our information technology systems or information security systems to operate effectively;

●	actions by government authorities, including changes in government regulation;

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●	uncertainties associated with legal proceedings;

●	changes in the size of the EV market;

●	future decisions by management in response to changing conditions;

●	the Company’s ability to execute prospective business plans;

●	misjudgments in the course of preparing forward-looking statements;

●	the Company’s ability to raise sufficient funds to carry out its proposed business plan;

●	inability to keep up with advances in EV and battery technology;

●	inability to design, develop, market and sell new EVs and services that address additional market opportunities to generate revenue and positive cash flows;

●	dependency on certain key personnel and any inability to retain and attract qualified personnel;

●	inexperience in mass-producing EVs;

●	inability to succeed in establishing, maintaining and strengthening the Cenntro brand;

●	disruption of supply or shortage of raw materials;

●	the unavailability, reduction or elimination of government and economic incentives;

●	failure to manage future growth effectively; and

●

the other risks and uncertainties detailed from time to time in our filings with the United States Securities and Exchange Commission (“SEC”), including but not limited to those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K as amended for the year ended December 31, 2024, filed with the SEC on April 1, 2025 (the “Form 10-K”).

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

INDEX

	Page
Item 1. Interim Financial Statements	1
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2025 and 2024	1
Condensed Consolidated Balance Sheet as of March 31, 2025 (Unaudited) and December 31, 2024	2
Unaudited Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2025 and 2024	3
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024	4
Notes to the Unaudited Condensed Consolidated Financial Statements	5

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PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CENNTRO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

				For the Three Months Ended March 31,
	Note			2025			2024

Net revenues		2(d	)	$	2,143,058		$	2,342,918
Cost of goods sold					(1,821,531	)		(2,173,711	)
Gross profit					321,527			169,207

OPERATING EXPENSES:
Selling and marketing expenses					(776,717	)		(617,961	)
General and administrative expenses					(4,934,168	)		(5,916,071	)
Research and development expenses					(784,178	)		(1,509,921	)
Total operating expenses					(6,495,063	)		(8,043,953	)

Loss from operations					(6,173,536	)		(7,874,746	)

OTHER INCOME (EXPENSE):
Interest (expense) income, net					(118,688	)		73,242
Loss from long-term investments					(39	)		(13,870	)
Change in fair value of convertible promissory notes and derivative liability					(3,129	)		(705	)
Gain from early termination of lease contract					1,138			-
Change in fair value of equity securities					256,712			234,887
Foreign currency exchange gain (loss), net					404,191			(245,179	)
(Loss) gain from cross-currency swaps					(36,140	)		5,933
Other income, net					295,592			52,552
Net loss from continuing operations before taxes					(5,373,899	)		(7,767,886	)
Income tax benefit					11,632			11,990
Net loss from continuing operations					(5,362,267	)		(7,755,896	)

Discontinued operations:
Loss from discontinued operations, net of tax					(303,390	)		(1,474,327	)

Net loss					(5,665,657	)		(9,230,223	)
Less: net loss attributable to non-controlling interests					(11,321	)		(72	)
Net loss attributable to the Company’s shareholders				$	(5,654,336	)	$	(9,230,151	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment					391,162			(1,001,245	)
Unrealized holding gains for available-for-sale securities					7,500			-
Total comprehensive loss					(5,266,995	)		(10,231,468	)

Less: total comprehensive loss attributable to non-controlling interests					(10,977	)		(144	)
Total comprehensive loss to the Company’s shareholders				$	(5,256,018	)	$	(10,231,324	)

Weighted average number of shares outstanding, basic and diluted					30,866,614			30,828,794

Loss per common share
Continuing operations - basic and diluted					(0.17	)		(0.25	)
Discontinued operations - basic and diluted					(0.01	)		(0.05	)
Net loss per common share - basic and diluted					(0.18	)		(0.30	)

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

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CENNTRO INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	Note			March 31, 2025			December 31, 2024
				(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents				$	8,536,714		$	12,547,168
Restricted cash, current					197,674			273,291
Short-term investment					-			5,505
Accounts receivable, net		3			3,096,130			3,281,865
Inventories		4			25,276,095			24,012,504
Prepayment and other current assets		5			18,098,574			18,075,415
Amounts due from related parties - current		19			11,798			11,729
Assets held for sale, current		1(d	)		7,723,541			7,708,969
Total current assets					62,940,526			65,916,446

Non-current assets:
Long-term time deposit					700,000			700,000
Long-term investments		6			3,730,271			3,710,663
Investment in equity security		7			26,861,031			26,604,319
Property, plant and equipment, net		8			17,593,328			17,401,006
Intangible assets, net		9			6,196,476			6,225,302
Right-of-use assets		14			9,332,719			9,948,831
Other non-current assets, net					1,987,621			2,059,747
Total non-current assets					66,401,446			66,649,868

Total Assets				$	129,341,972		$	132,566,314

LIABILITIES AND EQUITY

LIABILITIES
Current liabilities:
Accounts payable		10		$	4,812,536		$	5,135,710
Short-term loans and current portion of long-term loans		12			237,296			249,614
Accrued expenses and other current liabilities		11			3,935,863			3,647,503
Contractual liabilities		2(d	)		5,102,793			4,121,305
Operating lease liabilities, current		14			3,578,744			3,426,067
Convertible promissory notes		15			9,952,000			9,952,000
Deferred government grant, current					100,647			100,060
Amounts due to related parties		19			1,087,470			26,226
Liabilities held for sale, current		1(d	)		2,200,535			2,455,539
Total current liabilities					31,007,884			29,114,024

Non-current liabilities:
Long-term loans		12			339,307			362,386
Deferred tax liabilities		13			166,865			171,558
Deferred government grant, non-current					1,760,797			1,776,957
Derivative liability - investor warrant		15			12,139,517			12,137,087
Derivative liability - placement agent warrant		15			3,456,528			3,455,829
Operating lease liabilities, non-current		14			7,038,916			7,588,971
Total non-current liabilities					24,901,930			25,492,788

Total Liabilities				$	55,909,814		$	54,606,812

Commitments and contingencies		18

EQUITY
Common stock (No par value; 30,866,614 shares issued and outstanding as of March 31, 2025 and December 31, 2024)					-			-
Additional paid in capital					406,496,754			405,757,103
Accumulated deficit					(324,544,650	)		(318,890,314	)
Accumulated other comprehensive loss					(8,631,181	)		(9,029,499	)
Total equity attributable to shareholders					73,320,923			77,837,290
Non-controlling interests					111,235			122,212
Total Equity				$	73,432,158		$	77,959,502
Total Liabilities and Equity				$	129,341,972		$	132,566,314

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

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CENNTRO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

	Common stock				Additional paid in capital		Accumulated deficit			Accumulated other comprehensive loss			Total shareholders’ equity			Non- controlling interest			Total equity
	Shares		Amount
Balance as of December 31, 2023		30,828,778	$	-	$	402,337,393	$	(274,023,501	)	$	(6,444,485	)	$	121,869,407		$	(4,240	)	$	121,865,167
Share-based compensation		-		-		906,327		-			-			906,327			-			906,327
Net loss		-		-		-		(9,230,151	)		-			(9,230,151	)		(72	)		(9,230,223	)
Fractional shares issued due to reverse stock split		17		-		-		-			-			-			-			-
Foreign currency translation adjustment		-		-		-		-			(1,001,173	)		(1,001,173	)		(72	)		(1,001,245	)
Balance as of March 31, 2024		30,828,795	$	-	$	403,243,720	$	(283,253,652	)	$	(7,445,658	)	$	112,544,410		$	(4,384	)	$	112,540,026

	Common stock				Additional paid in capital		Accumulated deficit			Accumulated other comprehensive loss			Total shareholders’ equity			Non- controlling interest			Total equity
	Shares		Amount
Balance as of December 31, 2024		30,866,614	$	-	$	405,757,103	$	(318,890,314	)	$	(9,029,499	)	$	77,837,290		$	122,212		$	77,959,502
Share-based compensation		-		-		739,651		-			-			739,651			-			739,651
Net loss		-		-		-		(5,654,336	)		-			(5,654,336	)		(11,321	)		(5,665,657	)
Unrealized holding gains for available-for-sale securities		-		-		-		-			7,500			7,500			-			7,500
Foreign currency translation adjustment		-		-		-		-			390,818			390,818			344			391,162
Balance as of March 31, 2025		30,866,614	$	-	$	406,496,754	$	(324,544,650	)	$	(8,631,181	)	$	73,320,923		$	111,235		$	73,432,158

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

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CENNTRO INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities	$	(4,954,514	)	$	(8,864,876	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(519,893	)		(327,589	)
Cash dividend from long-term investment		-			55,645
Proceeds from disposal of property, plant and equipment		20,332			5,264
Proceeds from interest and redemption of equity securities		-			573,441
Net cash (used in) provided by investing activities		(499,561	)		306,761

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank loans		148,330			-
Repayments to bank loans		(183,727	)		-
Loans proceed from third parties		561,886			-
Repayment of loans to third parties		(360,000	)		-
Loans proceed from related parties		1,000,000			-
Net cash provided by financing activities		1,166,489			-

Effect of exchange rate changes on cash, cash equivalents and restricted cash		65,434			(429,029	)

Net decrease in cash, cash equivalents and restricted cash		(4,222,152	)		(8,987,144	)
Cash, cash equivalents and restricted cash at beginning of period		12,960,488			29,571,897
Cash, cash equivalents and restricted cash at end of period	$	8,738,336		$	20,584,753

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		8,536,714			20,154,305
Restricted cash		197,674			329,185
Cash, cash equivalents and restricted cash at end of period, held for sale		3,948			101,263
Total cash, cash equivalents and restricted cash shown in the statement of cashflow		8,738,336			20,584,753

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	14,138		$	130,500
Income tax paid	$	-		$	-

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

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

(a)	Historical and principal activities

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

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

On March 22, 2013, Cenntro Motor Corporation (“CMC”) was registered in the State of Delaware. CMC conducted business to design and develop electric utility vehicles.

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

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

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

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

On March 23, 2022 and January 31, 2023, CEGI entered into Share Purchase Agreements to acquire 65% and 35% of the issued and outstanding shares in Cenntro Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH. For information of the Share Purchase Agreements, see Note 3 of the Company 2023 Form 10-K, “Business Combination”.

On December 16, 2022, Cenntro Electric Group (Europe) GmbH (“CEGE”) invested in Antric GmbH (“Antric”) and became a 25% shareholder of Antric. On August 31, 2023, CAE acquired the remaining 75% shares of Antric and took Antric as a subsidiary of the Company. On August 31, 2023, the Company completed the acquisition with Antric GmbH in Germany. For information of the Share Purchase Agreements, see Note 3 of the Company 2023 Form 10-K, “Business Combination”.

On June 23, 2021, the Company invested RMB2,000,000 (approximately $276,239) in Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) to acquire 20% of its equity interest. On May 8, 2024, the Company entered into a new equity investing agreement to acquire another 60% of Hangzhou Hezhe’s equity interest. For information of the equity investing agreement, see Note 3 “Business Combination”.

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

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

(b)	Reverse recapitalization

On December 30, 2021, the Company consummated a stock purchase transaction (the “Combination”) pursuant to that certain stock purchase agreement, dated as of November 5, 2021 (the “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEGI and CAG HK.

(c)	Redomiciliation of CEGL

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

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

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

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

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

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

As a result of this strategic shift, three European subsidiaries: CEGE, Automotive Europe GmbH (“CAE”), and Cenntro EV Center Italy S.R. (“the disposal group”) were scheduled for structured dissolution.

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

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

	March 31,		December 31,
	2025		2024
	(Unaudited)
Cash and cash equivalents	$	3,948	$	140,029
Accounts receivable, net		1,422,392		1,406,457
Inventories		5,028,171		4,983,432
Prepayment and other current assets		1,119,293		1,035,486
Long-term investment		93,382		89,533
Other non-current assets		56,355		54,032
Total assets classified as held for sale		7,723,541		7,708,969

Accounts payable	$	1,342,356	$	1,534,467
Accrued expenses and other current liabilities		728,531		809,773
Contractual liabilities		129,648		80,696
Operating lease liabilities, current		-		30,603
Total Liabilities classified as held for sale	$	2,200,535	$	2,455,539

The key components of loss from discontinued operations for the three months ended March 31, 2025 and 2024 were as follows:

	For the Three Months ended March 31,
	2025			2024
	(Unaudited)				(Unaudited)
Net revenues	$	97,252			$	1,049,081
Cost of goods sold		(121,962	)			(1,204,017	)
Gross loss		(24,710	)			(154,936	)

Selling and marketing expenses		(67,539	)			(698,802	)
General and administrative expenses		(276,448	)			(445,125	)
Research and development expenses		(2,490	)			(217,909	)
Provision for credit losses		(22,176	)			-
Total operating expenses		(368,653	)			(1,361,836	)

Loss from discontinued operations		(393,363	)			(1,516,772	)

Income from long-term investments		-				350
Foreign currency exchange loss, net		(21,398	)			(114,038	)
Other income, net		111,371				138,091
Loss from discontinued operations before taxes		(303,390	)			(1,492,369	)
Income tax benefit		-				18,042
Loss from discontinued operations, net of tax	$	(303,390	)		$	(1,474,327	)

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

As of March 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	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.
Cenntro Electric CICS, SRL	November 30, 2022	Santo Domingo, Dominican Republic	99% 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”)	May 21, 2019	Herne, Germany	100% owned by Cenntro Inc.
Cenntro Electric B.V.	December 12, 2022	Amsterdam, Netherlands	100% owned by Cenntro Inc.
Cenntro Elektromobilite Araçlar A.Ş	February 21, 2023	Turkey	100% owned by Cenntro Inc.
Cenntro Elecautomotiv, S.L.	July 5, 2022	Barcelona, Spain	100% owned by Cenntro Inc.
Simachinery Equipment Limited (“Simachinery HK”)	June 2, 2011	Hong Kong	100% owned by Cenntro Inc.
Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”) (2)	June 16, 2011	PRC	100% owned by Cenntro Inc.
Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”) (2)	July 12, 2012	PRC	100% owned by Cenntro Inc.
Cenntro EV Center Italy S.R.L.	May 8, 2023	Italy	100% owned by Cenntro Inc.
Antric GmbH	August 21, 2020	Herne, Germany	100% owned by Cenntro Inc.
Pikka Electric Corporation	August 3, 2023	Delaware, U.S.	100% owned by Cenntro Inc.
Centro Technology Corporation	August 24, 2023	California, U.S.	100% owned by Cenntro Inc.
Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”)	July 1, 2021	PRC	80% owned by Cenntro Inc.

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

(2)	As of the issuance date of this report on Form 10-Q, Sinomachinery Zhejiang and Cenntro Machinery were in the process of being deregistered.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)	Basis of presentation

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

Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements have been included. The interim financial information should be read in conjunction with the consolidated financial statements and the notes for the fiscal year ended December 31, 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results for the full year or any future periods.

(b)	Use of estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include estimates and judgments applied in determination of provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

(c)	Fair value measurement

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include:

Level 1—defined as observable inputs such as quoted prices in active markets;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and due to 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 due to related parties, current were approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

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

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

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

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities in the Company’s unaudited condensed consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other expense in the unaudited condensed consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.

In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase warrant shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a practical expedient are: i) private equity funds, which represent the investment in equity security on the unaudited condensed consolidated balance sheet; ii) wealth management products purchased from banks, which represents the available-for-sale investments in short-term investments on the unaudited condensed consolidated balance sheet.

(d)	Revenue recognition

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.

The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance warranty. The warranty is not considered separate performance obligations and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and, therefore, does not believe an accrual for these costs is necessary.

Revenue is recognized upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes).

The Company acts as a principal in the revenue generating process and should recognize revenue on a gross basis. Revenues are measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. Consideration is recorded net of sales returns and VAT. Sales returns is estimated based on historical experiences, which were insignificant for the three months ended March 31, 2025 and 2024. The consideration is fixed, with no variable consideration. All transactions are settled in cash within the normal credit period, and there is no financing component.

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

The following table disaggregated the Company’s revenues by product line for the three months ended March 31, 2025 and 2024:

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Vehicles sales	$	1,837,054		$	2,514,777
Spare-parts sales		242,276			828,785
Other service income		160,980			48,437
Net revenues		2,240,310			3,391,999
Less: Net revenues, discontinued operation		(97,252	)		(1,049,081	)
Net revenues, continuing operation	$	2,143,058		$	2,342,918

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

	For the Three Months Ended March 31,
	2025				2024
	(Unaudited)				(Unaudited)
Primary geographical markets
Asia		$	1,174,031			$	1,104,475
Europe			803,269				1,661,619
America			263,010				625,905
Net revenues			2,240,310				3,391,999
Less: Net revenues, discontinued operation			(97,252	)			(1,049,081	)
Net revenues, continuing operation		$	2,143,058			$	2,342,918

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 three months ended March 31, 2025 and 2024, the Company recognized $374,384 and $890,646 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:

	March 31, 2025			December 31, 2024
	(Unaudited)
Accounts receivable, net	$	4,518,522		$	4,688,322
Less: accounts receivable, net, held for discontinued operation		(1,422,392	)		(1,406,457	)
Accounts receivable, net, held for continuing operation		3,096,130			3,281,865

Contractual liabilities	$	5,232,441		$	4,202,001
Less: contractual liabilities, held for discontinued operation		(129,648	)		(80,696	)
Contractual liabilities, held for continuing operation		5,102,793			4,121,305

(e)	Recently issued accounting standards pronouncements

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

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - ACCOUNTS RECEIVABLE, NET

Accounts receivable, net were summarized as follows:

	March 31, 2025 (Unaudited)			December 31, 2024
Accounts receivable	$	6,580,123		$	6,706,364
Less: provision for credit losses		(2,061,601	)		(2,018,042	)
Total accounts receivable, net		4,518,522			4,688,322
Less: accounts receivable, net, held for discontinued operations		(1,422,392	)		(1,406,457	)
Accounts receivable, net, held for continuing operations	$	3,096,130		$	3,281,865

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

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Balance at the beginning of the period	$	2,018,042		$	1,912,268
Additions		22,176			-
Write-off		(46,807	)		(173,731	)
Foreign exchange		68,190			(42,942	)
Balance at the end of the period		2,061,601			1,695,595
Less: balance of held for discontinued operations		(1,575,737	)		(1,207,428	)
Balance of held for continuing operations	$	485,864		$	488,167

NOTE 4 - INVENTORIES

Inventories were summarized as follows:

	March 31, 2025			December 31, 2024
	(Unaudited)
Raw material	$	10,462,537		$	10,071,694
Work-in-progress		1,764,497			1,395,282
Goods in transit		363,929			129,821
Finished goods		25,815,837			25,655,019
Inventories, gross		38,406,800			37,251,816
Less: Inventory valuation allowance		(8,102,534	)		(8,255,880	)
Total inventories, net		30,304,266			28,995,936
Less: inventories, net, held for discontinued operations		(5,028,171	)		(4,983,432	)
Inventories, net, held for continuing operations	$	25,276,095		$	24,012,504

The changes in inventory valuation allowance were as follows:

	For the Three Months Ended March 31,
	2025				2024
	(Unaudited)				(Unaudited)
Balance at the beginning of the period		$	8,255,880			$	3,504,333
Write-off			(178,428	)			(480	)
Foreign exchange			25,082				(28,614	)
Balance at the end of the period		$	8,102,534			$	3,475,239

NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS

Prepayment and other current assets consisted of the following:

	March 31, 2025			December 31, 2024
	(Unaudited)
Advance to suppliers	$	13,071,186		$	13,435,558
Deductible input value added tax		5,756,125			5,284,726
Others		390,556			390,617
Total prepayment and other current assets		19,217,867			19,110,901
Less: prepayment and other current assets, held for discontinued operations		(1,119,293	)		(1,035,486	)
Prepayment and other current assets, held for continuing operations	$	18,098,574		$	18,075,415

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – LONG-TERM INVESTMENTS

(a)	Equity method investment, net

Equity method investments consisted of the following:

	March 31, 2025			December 31, 2024
	(Unaudited)
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) ⁽¹⁾	$	2,081,059		$	2,068,951
Able 2rent GmbH (DEU) ⁽²⁾		93,382			89,533
Total equity method investment, net		2,174,441			2,158,484
Less: equity method investment, net, held for discontinued operations		(93,382	)		(89,533	)
Equity method investment, net, held for continuing operations	$	2,081,059		$	2,068,951

(1)

On September 25, 2022, the Company invested RMB15,400,000 (approximately $2,122,177) 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 EUR100,000 (approximately $107,960) in Able 2rent GmbH (DEU) to acquire 50% of its equity interest. The Company accounts for the investment under the equity method On March 22, 2022, CAE invested EUR100,000 (approximately $107,960) in Able 2rent GmbH (DEU) to acquire 50% of its equity interest. The Company accounts for the investment under the equity method because it does not have control over Able 2rent GmbH (DEU) as the Company does not participate in its operation and does not serve as member of board of director.

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

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

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

(1)

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

(c)	Debt security investments

On July 24, 2023 the Company purchased a $1,000,000 convertible note (the “Convertible Note”) from third party Acton, Inc. (the “Issuer”), with the interest rate of 5% per annum and due in June 2024. At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible loan as of the date of such conversion by the applicable conversion price. In July and August, 2023, the Company has paid total amount of $600,000 to the Issuer. On August 30, 2024, the two parties made amendment to the purchase agreement to reduce the total purchase price from $1,000,000 to $600,000 and extend the maturity date to July 24, 2025. Before the Maturity Date, the Issuer is entitled to calling for immediate conversion of the Convertible Note (for amount of full principal and accrued interest as of the date of conversion) provided that any of the following three conditions is satisfied: i) The Issuer closes a financing transaction of not less than $3,000,000 with pre-money valuation not lower than $38,250,000; ii) A person or entity, or a group acquires more than fifty percent (50%) of the outstanding voting power of the Issuer or all or substantially all of the assets of the Issuer; iii) The Issuer completes an initial public offering at a major US stock exchange with total market cap not lower than $38,250,000. The balance of debt investments, held for continuing operations was $649,212 and $641,712, respectively, as of March 31, 2025 and December 31, 2024.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – INVESTMENT IN EQUITY SECURITY

Investment in equity security consisted of the following:

	March 31, 2025		December 31, 2024
	(Unaudited)
MineOne Fix Income Investment I L.P ⁽¹⁾	$	26,861,031	$	26,604,319
Total investment in equity security		26,861,031		26,604,319
Less: investment in equity security, held for discontinued operations		-		-
Investment in equity security, held for continuing operations	$	26,861,031	$	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 LP (“MineOne”), over which MineOne Partners Limited is the General Partner. The Company held 100% of the limited partnership equity of MineOne and was entitled to a fixed return of 5% per annum on the investment amount, and had the rights to sell all or any portion of its partnership interest after the second anniversary of the investment if the Company gave at least ten business days’ prior notice to the General Partner and received the consent of General Partner. MineOne focuses on private credit loans, convertible bridge, and personal factoring. The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity fund is measured at fair value with gains and losses recognized in earnings.

For the three months ended March 31, 2025 and 2024, the Company received distribution of nil and $500,000 of investment in MineOne, respectively.

For the three months ended March 31, 2025 and 2024, the Company recorded upward adjustments $256,712 and $234,877 for changes in fair value of the equity investment, held for continuing operations, respectively.

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT, NET

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

	March 31, 2025			December 31,2024
	(Unaudited)
At cost:
Plant and building	$	13,387,052		$	13,272,630
Land		1,063,270			1,063,270
Machinery and equipment		3,595,848			3,575,885
Leasehold improvement		2,420,372			2,129,632
Office equipment		2,773,030			2,497,514
Motor vehicles		1,541,470			1,412,266
Construction in progress		292,929			418,340
Total		25,073,971			24,369,537
Less: accumulated depreciation		(6,490,339	)		(6,019,046	)
Impairment		(990,304	)		(949,485	)
Property, plant and equipment, net		17,593,328			17,401,006
Less: property, plants and equipment, net, held for discontinued operations		-			-
Property, plants and equipment, net, held for continuing operations	$	17,593,328		$	17,401,006

Depreciation expenses charged to the continuing operations for the three months ended March 31, 2025 and 2024 were $447,510 and $385,144, respectively. There’s no depreciation expense of discontinued operations for the three months ended March 31, 2025 and 2024.

Impairment charged to the discontinued operations for the three months ended March 31, 2025 and 2024 were nil and nil, respectively.

NOTE 9 – INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

	March 31, 2025			December 31, 2024
	(Unaudited)
At cost:
Land use right	$	5,463,392		$	5,431,507
Trademark		790,267			757,693
Technology		716,854			687,306
Software		115,787			115,035
Total		7,086,300			6,991,541
Less: accumulated amortization		(889,824	)		(766,239	)
Intangible assets, net		6,196,476			6,225,302
Less: intangible assets, net, held for discontinued operations		-			-
Intangible assets, net, held for continuing operations	$	6,196,476		$	6,225,302

Amortization expenses charged to the continuing operations for the three months ended March 31, 2025 and 2024 were $102,791 and $105,397, respectively.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – ACCOUNTS PAYABLE

	March 31, 2025			December 31, 2024
	(Unaudited)
Professional fees payable	$	2,683,932		$	2,861,695
Payable to suppliers		3,348,566			3,697,743
Others		122,394			110,739
Total accounts payable		6,154,892			6,670,177
Less: accounts payable, held for discontinued operations		(1,342,356	)		(1,534,467	)
Accounts payable, held for continuing operations	$	4,812,536		$	5,135,710

NOTE 11 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities were summarized as follows:

	March 31,2025			December 31, 2024
	(Unaudited)
Accrued litigation compensation	$	1,768,617		$	1,761,275
Accrued interest for convertible promissory note		467,550			270,690
Other taxes payable		441,501			624,404
Accrued expenses		361,133			411,941
Loan from third parties⁽¹⁾		832,206			626,516
Employee payroll and welfare payables		181,558			271,147
Credit card payable		164,568			111,703
Others		447,261			379,600
Total accrued expenses and other current liabilities		4,664,394			4,457,276
Less: accrued expenses and other current liabilities, held for discontinued operations		(728,531	)		(809,773	)
Accrued expenses and other current liabilities, held for continuing operations	$	3,935,863		$	3,647,503

(1)

This mainly represented the loan from Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc., Hongbo Jin, Gregory Hancke Hurzzeitdarlehen and Meiya Xu. On April 30, 2024, February 10, 2025, March 31, 2025 and March 28, 2025, the Company entered agreements with Aqua Pyro Limited, JCE Partners LLC, Bsquare Realty, Inc. and Hongbo Jin to borrow interest-free loans of $258,832, $200,000, $100,000 and $110,000, which were due on April 30, 2025, September 9, 2025, March 31, 2026 and March 27, 2026, respectively. On March 5, 2025, the Company entered an agreement with Gregory Hancke Hurzzeitdarlehen to borrow EUR93,112 (approximately $100,524), with interest rate of 7.5% per annum and due on December 31, 2025. On January 23,2025, the Company entered an agreement with Meiya Xu to borrow RMB400,000 (approximately $55,121), with the interest rate of 3.45% and due on January 23, 2026.

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

								As of March 31, 2025 (Unaudited)				As of December 31, 2024
Bank and other financial institution	Annual Interest Rate			Start	Maturity	Principal		Current portion		Non- current portion		Current portion		Non- current portion
Bank of Multiple Promerica Republic Dominicana ⁽¹⁾		10.00	%	April and June 2024	April and June 2029	$	428,273	$	88,966	$	339,307	$	86,778	$	362,386
Bank of Multiple Promerica Republic Dominicana ⁽²⁾		10.00	%	January and March 2025	May 2025		148,330		148,330		-		162,836		-
Total borrowings							576,603		237,296		339,307		249,614		362,386
Less: borrowings, held for discontinued operations							-		-		-		-		-
Borrowings, held for continuing operations						$	576,603	$	237,296	$	339,307	$	249,614	$	362,386

(1)

On April 30, 2024 and June 21, 2024, the Company 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. The Company should repay the loan monthly in five years after the month the loans were borrowed. As of March 31, 2025, principal amount of $71,727 was repaid. The loan was guaranteed by bank deposit of $500,000, which was due on October 30, 2024 and would extend to the maturity date of the loan.

(2)

In April 2024, the Company 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 March 31, 2025, principal amount of $162,835 was repaid. In January and March 2025, the Company borrowed $148,330 under the credit line, which would be repaid not exceed 180 days after the day the loans were borrowed. The loan was guaranteed by bank deposit of $200,000, which was due on June 12, 2024 and would extend to the maturity date of the loan.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - INCOME TAXES

Australia

CEGL is subject to a tax rate of 25%.

United States

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

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

Europe

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

Hong Kong

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. Effective from April 1, 2018, a two-tier corporate income tax system was officially implemented in Hong Kong, which is 8.25% for the first HK$2.0 million profits, and 16.5% for the subsequent profits, it is exempted from the Hong Kong income tax on its foreign-derived income. CEGI’s subsidiaries, CAG HK and Sinomachinery 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., Ltd qualify as Small and micro enterprises in the PRC, and are entitled to pay a reduced income tax rate of 5%.

Dominican Republic

Cenntro Electric CICS, SRL is subject to a tax rate of 27%.

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. Cenntro Automotive S.A.S. and Cenntro Electric Colombia S.A.S. are subject to a tax rate of 35% for the three months ended March 31, 2025 and 2024.

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

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
PRC	$	2,416,231		$	2,565,619
US		2,382,408			3,690,213
Europe		921,617			2,302,596
Australia		(274,952	)		446,798
Others		231,985			255,029
Total losses before income taxes		5,677,289			9,260,255
Less: losses before income taxes for discontinued operations		(303,390	)		(1,492,369	)
Losses before income taxes for continuing operations	$	5,373,899		$	7,767,886

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - LEASES

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

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

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

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

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Operating leases cost excluding short-term lease expenses		$	807,113		$	1,136,106
Short-term lease expenses			51,529			70,790
Total		$	858,642		$	1,206,896

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

	March 31, 2025 (Unaudited)				March 31, 2024 (Unaudited)
Cash paid for amounts included in the measurement of lease liabilities		$	586,925			$	986,956
Weighted average remaining lease term	4.43 years				6.12 years
Weighted average discount rate			7.55	%			6.37	%

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 March 31, 2025:

	Operating Leases
For the remaining of the year ended December 31, 2025	$	2,940,734
For the years ended December 31,
2026		3,070,324
2027		3,077,639
2028		1,131,158
2029		823,515
2030 and thereafter		1,316,853
Total lease payments		12,360,223
Less: imputed interest		1,742,563
Total		10,617,660
Less: current portion		3,578,744
Non-current portion	$	7,038,916

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

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Operating leases cost excluding short-term lease expenses		$	-		$	159,320
Short-term lease expenses			109,120			41,667
Total		$	109,120		$	200,987

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

	March 31, 2025 (Unaudited)		March 31,2024 (Unaudited)
Cash paid for amounts included in the measurement of lease liabilities	$	31,136	$	191,760
Weighted average remaining lease term		-	0.66 years
Weighted average discount rate		-		2.67	%

No lease liabilities held for discontinued operations under operating leases as of March 31, 2025.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT

Convertible Promissory Note

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

The main terms of the Note are summarized as follows:

Conversion feature

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

Redemption feature

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

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

Contingent interest feature

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

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

The movement of Note during the three months ended March 31, 2025 and 2024 are as follows:

	Liability component
As of December 31, 2023	$	9,956,000
Convertible promissory notes issued during the year		-
Redemption of convertible promissory notes		-
Fair value change recognized		2,000
As of March 31, 2024 (Unaudited)	$	9,958,000

As of December 31, 2024		9,952,000
Convertible promissory notes issued during the year		-
Redemption of convertible promissory notes		-
Fair value change recognized		-
As of March 31, 2025 (Unaudited)	$	9,952,000

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

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT (CONTINUED)

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

Fair Value Assumptions - Convertible Promissory Note	March 31, 2025 (Unaudited)			December 31, 2024
Face value principal payable	$	9,953,381		$	9,953,381
Original conversion price	$	1.2375 per share		$	1.2375 per share
Interest Rate		8.00	%		8.00	%
Expected term (years)		0.81			1.05
Volatility		64.28	%		59.62	%
Market yield (range)		11.43	%		9.24	%
Risk free rate		4.06	%		4.33	%
Issue date	July 20, 2022			July 20, 2022
Maturity date	January 19, 2026			January 19, 2026

Warrant

Accompany with the Note, the Company issued to the same investor warrants to purchase up to 2,473,334 warrant shares of the Company, with an exercise price of $1.61 per share, which may be exercised by the holders on a cashless basis by using Black-Scholes model to determine the net settlement shares.

Additionally, after the Company completed the above Note financing, the Company issued to the placement agent warrants to purchase 247,333 warrant shares of the Company at a same day, as part of the underwriter’s commission. The warrants were issued with an exercise price of $1.77 per share.

Both warrants are exercisable from the date of issuance and have a term of five years from the date of issuance. They were presented as liabilities on the unaudited condensed consolidated balance sheet at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”. The liabilities then, will be remeasured every reporting period with any change to fair value recorded as other income (expense) in the unaudited condensed consolidated statement of operations.

The movement of warrants during the three months ended March 31, 2025 and 2024 are as follows:

	Investor warrants component					Placement agent warrants component
	Shares		Amount			Shares		Amount
As of December 31, 2023		873,810	$	12,189,508			247,333	$	3,456,578
Exercise of warrants		-		-			-		-
Fair value change recognized		-		(993	)		-		(301	)
As of March 31, 2024 (Unaudited)		873,810	$	12,188,515			247,333	$	3,456,277

As of December 31, 2024		870,227	$	12,137,087			247,333	$	3,455,829
Exercise of warrants		-		-			-		-
Fair value change recognized		-		2,430			-		699
As of March 31, 2025 (Unaudited)		870,227	$	12,139,517			247,333	$	3,456,528

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

Fair Value Assumptions – Warrants	March 31, 2025 (Unaudited)			December 31, 2024
Expected term (years)		2.30			2.55
Volatility		60.21	%		62.78	%
Risk free rate		3.89	%		4.32	%
Expected expiry date		July 19, 2027			July 19, 2027

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16- SHARE-BASED COMPENSATION

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

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

Incentive Stock Option Limit: the maximum number of Common Stock that may be issued upon the exercise of incentive stock options (“ISOs”) under the 2023 Plan is 30,000,000 shares of Common Stock.

For the three months ended March 31, 2025 and 2024, the total share-based compensation expenses were comprised of the following:

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
General and administrative expenses	$	651,829	$	770,158
Selling and marketing expenses		15,552		48,485
Research and development expenses		72,270		87,684
Total	$	739,651	$	906,327

A summary of share options activity for the three months ended March 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		2,025,115			14.26		4.81		-
Granted		-			-
Exercised		-			-
Forfeited		(63,453	)		16.80
Expired		(79,307	)		16.82
Outstanding at March 31, 2024 (Unaudited)		1,882,355			14.06		4.39		-

Outstanding at December 31, 2024		1,733,052			13.80		3.65		-
Granted		-			-
Exercised		-			-
Forfeited		(4,682	)		16.80
Expired		(10,010	)		16.80
Outstanding at March 31, 2025 (Unaudited)		1,718,360			13.78		3.47		-
Expected to vest at March 31, 2025 (Unaudited)		251,502			16.88		6.86		-
Exercisable as of March 31, 2025 (Unaudited)		1,466,858			13.22		2.89		-

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 Three Months Ended March 31,
	2025 (Unaudited)	2024 (Unaudited)
Expected volatility	83.41%~86.57%	83.41%~86.57%
Expected dividends yield	0%	0%
Risk-free interest rate per annum	2.97%~3.01%	2.97%~3.01%
The fair value of underlying common stock (per share)	$16.80	$16.80

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

As of March 31, 2025, there was approximately $2,958,604 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 1.00 years.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - CONCENTRATIONS

Continuing operations

(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 three months ended March 31, 2025 and 2024.

	For the Three Months Ended
	March 31, 2025 (Unaudited)					March 31, 2024 (Unaudited)
Customer	Amount		% of Total			Amount		% of Total
A	$	399,065		19	%	$	-		-
B		297,192		14	%		-		-
C		250,777		12	%		*		*
D		*		*			730,158		31	%
E		-		-			262,067		11	%
Total	$	947,034		45	%	$	992,225		42	%

*	Indicates below 10%.

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 March 31, 2025 and December 31, 2024.

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Customer	Amount		% of Total			Amount		% of Total
F	$	1,382,877		39	%	$	1,372,307		36	%
G		415,282		12	%		*		*
Total	$	1,798,159		51	%	$	1,372,307		36	%

*	Indicates below 10%.

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 March 31, 2025 and December 31, 2024.

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Customer	Amount		% of Total			Amount		% of Total
A	$	864,463		17	%	$	-		-
F		817,235		16	%		823,522		20	%
H		850,892		17	%		855,240		21	%
Total	$	2,532,590		50	%	$	1,678,762		41	%

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – CONCENTRATIONS (CONTINUED)

(b)

Suppliers

For the three months ended March 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 Three Months Ended,
	March 31, 2025 (Unaudited)					March 31, 2024 (Unaudited)
Supplier	Amount		% of Total			Amount		% of Total
A	$	588,489		26	%	$	1,207,489		37	%
B		411,272		18	%		-		-
Total	$	999,761		44	%	$	1,207,489		37	%

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

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Supplier	Amount		% of Total			Amount		% of Total
C	$	560,113		12	%	$	767,767		15	%
D		483,558		10	%		-		-
Total	$	1,043,671		22	%	$	767,767		15	%

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 March 31, 2025 and December 31, 2024.

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Supplier	Amount		% of Total			Amount		% of Total
A	$	5,779,342		50	%	$	4,812,746		36	%
D		*		*			2,978,991		22	%
E		2,480,466		21	%		2,465,990		18	%
Total	$	8,259,808		71	%	$	10,257,727		76	%

*	Indicates below 10%.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – CONCENTRATIONS (CONTINUED)

Discontinued operations

(a)

Customers

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

	For the Three Months Ended,
	March 31, 2025 (Unaudited)					March 31, 2024 (Unaudited)
Customer	Amount		% of Total			Amount		% of Total
I	$	23,727		24	%	$	-		-
J		21,694		22	%		528,704		50	%
K		18,166		19	%		-		-
L		-		-			178,630		17	%
M		-		-			266,567		25	%
Total	$	63,587		65	%	$	973,901		92	%

The following table sets forth information as to each customer that accounted for 10% or more of gross accounts receivable for discontinued operation as of March 31, 2025 and December 31, 2024.

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Customer	Amount		% of Total			Amount		% of Total
L	$	374,702		12	%	$	207,020		15	%
N		1,207,988		40	%		1,158,196		82	%
O		565,150		19	%		*		*
Total	$	2,147,840		71	%	$	1,365,216		97	%

The following table sets forth information as to each customer that accounted for 10% or more of advance from customers, held for discontinued operation as of March 31, 2025 and December 31, 2024.

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Customer	Amount		% of Total			Amount		% of Total
P		63,202		49	%		60,597		75	%
Q		59,648		46	%		13,725		17	%
Total	$	122,850		95	%	$	74,322		92	%

*	Indicates below 10%.

(b)

Suppliers

For the three months ended March 31, 2025 and 2024, there’s no suppliers, each of whom accounted for 10% or more of the Company’s total purchases of discontinued operation.

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

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Supplier	Amount		% of Total			Amount		% of Total
F	$	553,768		41	%	$	530,942		35	%
G		394,863		29	%		378,587		25	%
Total	$	948,631		70	%	$	909,529		60	%

*	Indicates below 10%.

As of March 31, 2025 and December 31, 2024, the Company’s material suppliers, each of whom accounted for 10% or more of the Company’s advance of suppliers, held for discontinued operation, were as follows:

	As of March 31, 2025 (Unaudited)					As of December 31, 2024
Supplier	Amount		% of Total			Amount		% of Total
H	$	13,473		13	%	$	12,918		13	%
I		12,378		12	%		11,868		12	%
Total	$	25,851		25	%	$	24,786		25	%

*	Indicates below 10%.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 - COMMITMENTS AND CONTINGENCIES

Litigation

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

Subject to retention of title and an instalment payment agreement, CAE sold 90 vehicles for a total price of EUR 2,185,721.32 (approximately $2,358,611.88) to the French company B-Moville S.A.S. (“B-Moville”) (under a contract dated August 23，2021. B-MOVILLE had already settled an amount of EUR 58,787.33 by the end of 2022 and, therefore, still owed CAE an amount of EUR 2,126,933.99, of which EUR 548,244.11 was owed by the end of 2022 under the instalment agreement. B-Moville had withheld instalment payments due to alleged defects of the vehicles, without specifying the amount of the claims for reduction of the purchase price. B-Moville had handed over the cars to its parent company Swoopin Tech S.A.R.L. (“Swoopin”). Swoopin is insolvent and has been in judicial liquidation since November 2, 2022. The vehicles held by Swoopin were prevented from becoming part of the insolvency estate and being realized by the insolvency administrator. Due to the retention of title clause, the property of the 90 vehicles shall be reclaimed by CAE. In the meantime, Swoopin returned the vehicles to B-Moville. As of 14 May 2023, the insolvency court of Paris opened insolvency proceedings against B-Moville. CAE has filed its claims in the insolvency proceedings. However, the liquidator has advised that there is no prospect of payment to unsecured creditors, including CAE, following its declaration of claims. The recovery of the outstanding amount owed to CAE is deemed highly unlikely. All Receivable of CAE related to the case has been written off.

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

On July 22, 2022, Xiongjian Chen filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey. The complaint alleges eleven causes of action sounding in contract and tort against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG. With respect to the four contract claims, Plaintiff alleges breach of contract claims pertaining to an employment agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL. With respect to the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May 28, 2023, Plaintiff filed an amended complaint. On July 20, 2023 the Defendants filed a motion seeking the dismissal of that amended complaint. On September 22, 2023, the Plaintiff filed to oppose our Motion to Dismiss and Motion to Strike. The Defendants filed our reply briefs by the deadline on November 9, 2023. On January 25, 2024, the Magistrate Judge entered an Order granting Plaintiff’s Motion to Amend and denying our Motion to Strike as moot. On November 12, 2024, District Court issued an Order, dismissing Plaintiff’s all claims except with respect to the promissory estoppel claim against Peter Wang. On November 26, 2024, the defendants filed a Motion for Reconsideration of the Court’s denial of Cenntro’s Motion to Dismiss Plaintiff’s promissory estoppel claim against Peter Wang. Concurrently, on same date Plaintiff moved for reconsideration of the Court’s decision to dismiss the case as against CAG for lack of personal jurisdiction. On December 30, 2024, the Defendant filed a Reply in Further Support of Peter Wang’s Motion for Reconsideration, which, in accordance with the Court’s practices, was filed as part of a Motion for Leave to File a Reply Brief, against which the Plaintiff filed an Opposition on January 17, 2025. We anticipate remote financial consequences will incur to the company.

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

On February 6, 2023, Hangzhou Ronda Tech Co., Limited (“Ronda”), one of Cenntro’s wholly owned subsidiaries, commenced a lawsuit against Fujian Newlongma Automotive Co., Ltd. (“Newlongma”), one of Ronda’s suppliers, in the Hangzhou Yuhang District People’s Court, under which Ronda plead for (i) the termination of the vehicle purchase orders that Ronda placed with Newlongma on February 26, 2022; (ii) recovery of advance payments for total amount of approximately $438,702; and (iii) compensation for damages caused equal to approximately $453,290. The case mediation date was March 3, 2023 and was subsequently docketed on July 3, 2023. Since then, Newlongma filed a jurisdictional objection, and the Court dismissed that jurisdictional objection. Subsequently Newlongma filed a counterclaim and the Court hosted an exchange of evidence between the parties on 17 October 2023, and discovery was also organized on November 14, 2023 and January 16, 2024. On March 5, 2024, the first instance judgment was made, ruling: 1) Newlongma to fully return advance payments plus 100% damage totaling $869,702; 2) Ronda to pay for outstanding invoices totaling $583,813; and 3) to terminate all agreements between the parties, including the vehicle purchase orders which have not been fulfilled. Newlongma was dissatisfied with this third judgment and filed an appeal on March 21, 2024. The appeal was dismissed and the original judgment was upheld by the Court on July 2, 2024. This case was finally settled on January 22, 2025 with Newlongma paid to Ronda the total net amount of $270,898.

On December 18, 2023, Zhejiang Sinomachinery Co., Ltd. filed a lawsuit against Tonghe County Tianxin Agricultural Machinery Co., Ltd. (“Tianxin”), requesting payment for total contract price of CNY461,800 (approximately $65,104) and interest under a disputed contract of sale. On April 17, 2024, the court made the judgement supporting plaintiff’s primary claims, ruling Tianxin to pay Zhejiang Sinomachinery CNY461,800 (approximately $65,104) plus interest and relevant legal expenses within 10 days. On July 3, 2024, the Court accepted Zhejiang Sinomachinery’s application for compulsory execution. On December 1, 2024, Sinomachinery transferred the claim of CNY461,800 against Tianxin, along with CNY20,000 in attorney fees, to Ronda.

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. On April 30, 2024, MHP filed a Notice of Removal of this action from the Superior Court of New Jersey to the U.S. District Court for the District of New Jersey. At the time of this report, the case remains active with parties performing required interrogatories and discovery. The matter is ongoing with outcomes anticipated in 4th quarter of 2025.

On March 28, 2025 BAL Freeway Associates, LLC filed an Unlawful Detainer against Cenntro Automotive Corporation alleging non-payment of rents for commercial leased property in San Bernadino County, Ontario, CA, and praying for judgment for restitution of the premises, declaration of forfeiture of the lease, and payment of outstanding and unpaid rent and other charges of $67,606.59 and damages of $4,168.27, plus interest at legal rate and reasonable attorney’s fees. CAC has engaged legal counsel to negotiate with plaintiff for a settlement. The settlement amount has yet been defined as of the date of this report.

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

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

NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES

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

Name of related parties:		Relationship with the Company
Zhejiang RAP		An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary
Hangzhou Hezhe		An entity significantly influenced by Hangzhou Ronda Tech Co., Limited, the Company’s subsidiary as of March 31, 2024. Since May 8, 2024, Hangzhou Hezhe became a subsidiary of the Company.
Billy Rafael Romero Del Rosario		A shareholder who owns 1% equity interest of Cenntro Electric CICS, SRL and is the CEO of Cenntro Electric CICS, SRL
Zhongchai Holding (Hongkong) Limited(“Zhongchai”)		An entity ultimately controlled by Peter Z. Wang, the CEO of the Company

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CENNTRO INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

Related party transactions

During the three months ended March 31, 2025 and 2024, the Company had the following material related party transactions for the continuing operation.

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)		(Unaudited)
Interest income from a related party
Zhejiang RAP	$	-	$	22,249

Purchase of raw materials from related parties
Hangzhou Hezhe		-		3,764

Interests-free loan from RP
Zhongchai		1,000,000		-

Refund on purchase of raw materials
Hangzhou Hezhe		-		69,486

Prepayment of operating fund to a related party
Billy Rafael Romero Del Rosario ⁽¹⁾		25,384		47,660

Reimbursement from a related party
Billy Rafael Romero Del Rosario		88,665		-

(1)

This was the payment to this related party for daily operating reimbursement with no interest and without expiration date.

Amounts due from Related Parties

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

	March 31, 2025(Unaudited)		December 31, 2024
Zhejiang RAP ⁽¹⁾		11,798		11,729
Total amounts due from related parties		11,798		11,729
Less: amounts due from related parties, held for discontinued operations		-		-
Amounts due from related parties, held for continuing operations	$	11,798	$	11,729

(1)

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

Amounts due to Related Parties - current

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

	March 31, 2025(Unaudited)		December 31, 2024
Zhongchai⁽¹⁾	$	1,000,000	$	-
Billy Rafael Romero Del Rosario		87,470		26,226
Total amounts due to related parties		1,087,470		26,226
Less: amounts due to related parties, held for discontinued operations		-		-
Amounts due to related parties, held for continuing operations	$	1,087,470	$	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.

NOTE 20 - SUBSEQUENT EVENT

The Company has evaluated subsequent events through the date of issuance of the unaudited condensed consolidated financial statements, there were no other subsequent events except for the event mentioned in Note 19 with material financial impact on the unaudited condensed consolidated financial statements.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introductory Note

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

A. Key Components of Results of Operations

Net revenues

Up until December 31, 2021, we generate revenue primarily through the sale of ECVs to our channel partners. Beginning in 2022, we experimented with different go-to-market strategies across regions. In Europe, while we initially tested an EV center approach by acquiring CAE, a German manufacturer and ECV seller, we returned to our distributor-focused model in 2024 given its proven effectiveness. In North America, we implemented a hybrid approach that combines direct sales to end-customers with strategic distributor partnerships. Historically (i.e. up until end of 2021), these revenues were generated solely by the sale of the Metro®. Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™ and Neibor® 150 in Europe, Clubcar, Logistar™ 210 and Logistar™ 260 in Asia, Avantier™ and Logistar™ 400 in the US. Starting from 2024, we witnessed major increase on revenue in the US market as we shift our focus on the North American market sales, actively participate in the ECV incentive programs initiated by state governments, introduced additional new models for the US market.

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

Cost of goods sold

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

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

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Operating expenses

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

Research and Development Expenses

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

Selling and Marketing Expense

Selling and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, freight costs, travel and entertainment expenses and allocated overhead. Marketing programs consist of advertising, tradeshows, events, corporate communications and brand-building activities. We expect our selling and marketing expenses to increase as we introduce our new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally.

General and Administrative Expenses

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

Provision for credit losses

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

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Other income (expenses)

Interest expense, net

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

Income(loss) from long-term investments

Entities over which we have the ability to exercise significant influence but do not have a controlling interest through investment in common shares, or in-substance common shares, are accounted for using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our proportionate share of each such entity’s net income or loss after the date of investment into the statements of operations and comprehensive loss and accordingly adjust the carrying amount of the investment. When our share of losses in the equity of such entity equals or exceeds our interest in the equity of such entity, we do not recognize further losses, unless we have incurred obligations or made payments or guarantees on behalf of such entity. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis.

Discontinued operations

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

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

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Key Operating Metrics

We prepare and analyze operating and financial data to assess the performance of our business and allocate our resources. The following table sets forth our key performance indicators for the three months ended March 31, 2025 and 2024.

	Three Months ended March 31,
	2025			2024
	(Unaudited)
Gross margin of vehicle sales		10.8	%		18.4	%

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

Results of Operations

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

	Three Months ended March 31,
	2025			2024
(Expressed in U.S. Dollars)	(Unaudited)
Combined Statements of Operations Data:
Net revenues		2,143,058			2,342,918
Cost of goods sold		(1,821,531	)		(2,173,711	)
Gross profit		321,527			169,207
Operating Expenses:
Selling and marketing expenses		(776,717	)		(617,961	)
General and administrative expenses		(4,934,168	)		(5,916,071	)
Research and development expenses		(784,178	)		(1,509,921	)
Total operating expenses		(6,495,063	)		(8,043,953	)

Loss from operations		(6,173,536	)		(7,874,746	)

Other Income (Expense):
Interest (expense) income, net		(118,688	)		73,242
Loss from long-term investments		(39	)		(13,870	)
Other income, net		295,592			52,552
Gain from early termination of lease contract		1,138			—
Change in fair value of convertible promissory notes and derivative liability		(3,129	)		(705	)
Change in fair value of equity securities		256,712			234,887
Foreign currency exchange gain (loss), net		404,191			(245,179	)
(Loss) gain from cross-currency swaps		(36,140	)		5,933
Net loss from continuing operations, before tax		(5,373,899	)		(7,767,886	)
Income tax benefit		11,632			11,990
Net loss from continuing operation		(5,362,267	)		(7,755,896	)
Discontinued operations
Loss on discontinued operations, net of tax		(303,390	)		(1,474,327	)
Net loss		(5,665,657	)		(9,230,223	)
Less: net loss attributable to non-controlling interests		(11,321	)		(72	)
Net loss attributable to the Company’s shareholders		(5,654,336	)		(9,230,151	)

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Comparison of the Three months ended March 31, 2025 and 2024

Net Revenues

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

	Three Months Ended March 31,
	2025					2024
	Amount		%			Amount		%
(Expressed in U.S. Dollars)	(Unaudited)
Net revenues:
Vehicle Sales	$	1,811,264		84.5	%	$	1,523,110		65.0	%
Spare-part sales		170,815		8.0	%		788,814		33.7	%
Other sales		160,979		7.5	%		30,994		1.3	%
Total net revenues	$	2,143,058		100.0	%	$	2,342,918		100.0	%

Net revenues for the three months ended March 31, 2025 were approximately $2.1 million, a decrease of approximately $0.2 million or 8.5% from approximately $2.3 million for the three months ended March 31, 2024. The decrease in net revenues in 2025 was primarily attributed to a decrease in spare-part sales by approximately $0.6 million, offset by an increase in vehicle sales by approximately $0.3 million and other sales by approximately $0.1 million. The net revenues in Europe market for the three months ended March 31, 2025 were approximately $0.7 million, an increase of approximately $0.09 million from approximately $0.6 million for the three months ended March 31, 2024. The net revenues in Asia market for the three months ended March 31, 2025 were approximately $1.2 million, an increase of approximately $0.07 million from approximately $1.1 million for the three months ended March 31, 2024.

Additional units were sold during the three months ended March 31, 2025; we sold 129 ECVs, including 20 fully assembled Metro® units, 7 fully assembled Logistar™ 200, 2 fully assembled Logistar™ 100, 32 fully assembled Teemak™ , 2 fully assembled Logistar™ 260, 31 fully assembled Avantier™ units, 4 Clubcar units, 7 Antric® units, 2 fully assembled Logistar™ 210 units, 11 fully assembled Logistar™ 450 units, 5 fully assembled Seres 5 units, 5 fully assembled Joylong-A4 units and 1 fully assembled Joylong-EA6 units compared with 96 ECVs for the three months ended March 31, 2024, including 15 fully assembled Metro® units, 1 fully assembled Logistar™ 200, 18 fully assembled Logistar™ 100, 2 fully assembled Teemak™, 21 fully assembled Logistar™ 260, 4 fully assembled Logistar™ 400, 12 fully assembled Avantier™ units, 20 Clubcar units and 3 Antric® units.

For the three months ended March 31, 2025, we also sold 27 iChassis™ units, other than the 129 ECVs.

Geographically, the vast majority of our net revenues were generated from vehicle sales in Asia during the three months ended March 31, 2025 and 2024. For the three months ended March 31, 2025, net revenues from Europe, North America, and Asia as a percentage of total revenues was 32.9%, 12.3%, and 54.8%, respectively, compared to 26.1%, 26.7%, and 47.2%, respectively for the corresponding period in 2024.

For the three months ended March 31, 2025, net revenues from vehicle sales in Europe, North America, and Asia as a percentage of total vehicle net revenues was 33.1%, 9.5%, and 57.4%, respectively, compared to 37.0%, 41.0%, and 22.0%, respectively, for the corresponding period in 2024.

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Cost of goods sold

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

	Three Months Ended March 31,
	2025						2024
	Amount			%			Amount			%
(Expressed in U.S. Dollars)	(Unaudited)
Cost of goods sold:
Vehicle Sales	$	(1,615,964	)		88.8	%	$	(1,242,102	)		57.2	%
Spare-part sales		(126,400	)		6.9	%		(863,819	)		39.7	%
Other sales		(79,167	)		4.3	%		(67,790	)		3.1	%
Total cost of goods sold	$	(1,821,531	)		100.00	%	$	(2,173,711	)		100.00	%

Cost of goods sold for the three months ended March 31, 2025 was approximately $1.8 million, a decrease of approximately $0.4 million or approximately 16.2% from approximately $2.2 million for the three months ended March 31, 2024. The decrease of cost of vehicle sales was mainly caused by the decreased cost of spare-parts sales of approximately $0.7 million, offset by the increased cost of vehicle sales of approximately $0.4 million.

Gross Profit

Gross profit for the three months ended March 31, 2025 was approximately $0.3 million, an increase of approximately $0.1 million from approximately $0.2 million of gross profit for the three months ended March 31, 2024. For the three months ended March 31, 2025 and 2024, our overall gross margin was approximately 15.0% and 7.2%, respectively. Our gross margin of vehicle sales for the three months ended March 31, 2025 and 2024 was 10.8% and 18.4%, respectively. The increase of our gross profit was caused by the increase in the gross profit of spare-part sales and other sales of approximately $0.1 million and $0.1 million, respectively, offset by a decrease in the gross profit of vehicle sales of approximately $0.09 million.

Selling and Marketing Expenses

Selling and marketing expenses for the three months ended March 31, 2025 were approximately $0.8 million, an increase of approximately $0.2 million or approximately 25.7% from approximately $0.6 million for the three months ended March 31, 2024. The increase in selling and marketing expenses in 2025 was primarily attributed to the increase in freight of approximately $0.4 million, offset by the decrease in salary and social insurance, marketing expense and service fees related to European market and distribution channel research of approximately $0.08 million, $0.05 million and $0.07 million, respectively.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2025 were approximately $4.9 million, a decrease of approximately $1.0 million or approximately 16.6% from approximately $5.9 million for the three months ended March 31, 2024. The decrease in general and administrative expenses in 2025 was primarily attributed to the decrease in legal and professional fee, salary and social insurance, lease expenses, office expenses, and share-based compensation of approximately $0.2 million, $0.1 million, $0.3 million, $0.2 million and $0.1 million, respectively.

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Research and Development Expenses

Research and development expenses for the three months ended March 31, 2025 were approximately $0.8 million, a decrease of approximately $0.7 million or approximately 48.1% from approximately $1.5 million for the three months ended March 31, 2024. The decrease in research and development expenses in 2025 was primarily attributed to the decrease in design and development expenses, salary expense and others of approximately $0.2 million, $0.4 million and $0.1 million, respectively.

Interest expense (income), net

Interest expense (income), net, mainly consists of interest expense to convertible bonds and interest income from deposit. Net interest expense was approximately $0.1 million for the three months ended March 31, 2025, a change of approximately $0.2 million compared to approximately $0.07 million in interest income for the three months ended March 31, 2024. The change was primarily attributable to the combined effect of (i) an increase in interest expense to bank loan of approximately $0.02 million, and (ii) the decrease in interest income of approximately $0.15 million from deposit and $0.02 million from RAP.

Other income, net

Other income, net for the three months ended March 31, 2025 was approximately $0.3 million, representing an increase of approximately $0.2 million compared to approximately $0.05 million of other income, net for the three months ended March 31, 2024. The increase of other income in 2025 compared to 2024 was primarily attributable to an increase of approximately $0.2 million in litigation compensation from Fujian Newlongma Automotive Co., Ltd..

Change in fair value of equity securities

A gain in the change in fair value of equity securities for the three months ended March 31, 2025 was approximately $0.3 million compared to approximately $0.2 million for the three months ended March 31, 2024. The gain was attributed to an upward adjustment of approximately $0.3 million from our investment on partnership shares in MineOne Fix Income Investment I L.P with an original investment value of $25 million.

Non-GAAP Financial Measures

Adjusted EBITDA for the three months ended March 31, 2025 and 2024

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

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

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

•

as a measurement of operating performance because it assists us in comparing the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations;

•

for planning purposes, including the preparation of our internal annual operating budget and financial projections;

•

to evaluate the performance and effectiveness of our operational strategies; and

•

to evaluate our capacity to expand our business.

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

•

such measures do not reflect our cash expenditures;

•

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

•

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

•

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

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

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

	Three Months Ended March 31,
	2025			2024
(Expressed in U.S. Dollars)	(Unaudited)
Net loss from continuing operations	$	(5,362,267	)	$	(7,755,896	)
Interest Expenses (income), net		118,688			(73,242	)
Income tax benefit		(11,632	)		(11,990	)
Depreciation and amortization		550,278			490,540
Share-based compensation expense		739,651			906,327
Change in fair value of convertible promissory notes and derivative liability		3,129			705
Adjusted EBITDA from continuing operations	$	(3,962,153	)	$	(6,443,556	)

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B. Liquidity and Capital Resources

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

As of March 31, 2025 we had approximately $8.5 million in cash and cash equivalents and approximately $3.1 million of accounts receivables as compared to approximately $20.2 million in cash and cash equivalents and $2.5 million in accounts receivable as of March 31, 2024. For the three months ended March 31, 2025 and 2024, net cash used in operating activities was approximately $5.0 million and $8.9 million, respectively.

Short-Term Liquidity Requirements

We believe our cash and cash equivalents will be sufficient for us to continue to execute our business strategy over the twelve months period following the date of issuance of our annual report. Our current business strategy for the next twelve months includes (i) the continued rollout of our new ECV models and green energy related products in North America and Europe, as applicable and (ii) the establishment and development of local distribution channels in the United States and the European Union. Actual results could vary materially as a result of a number of factors, including:

•

The costs of bringing our new facilities into operation;

•

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

•

Our ability to manage the costs of manufacturing our ECVs;

•

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

•

Revenues received from sales of our ECVs;

•

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

•

Our ability to collect future revenues; and

•

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

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

Long-Term Liquidity Requirements

In the long-term, we plan to regionalize the manufacturing and supply chain relating to certain components of our ECVs in the geographic markets in which our ECVs are sold. In the long-term, through our supply chain development know-how, we intend to establish supply chain relationships in North America and the European Union to support anticipated manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially other landed costs elements associated with importing our components and spare parts from China. Currently, the majority of our revenues is derived from the sale of ECVs by private label channel partners that assemble our vehicle kits in their own facilities. As part of our growth strategy, we plan to expand our channel partner network, and local assembly facilities to regionalize our manufacturing and supply chains to better serve our global customers especially to expand our after-sales-market services offerings.

We intend to further expand our technology through continued investment in research and development. Since inception in 2013 through March 31, 2025 we have spent over approximately $95.2 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.

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

Working Capital

As of March 31, 2025, our working capital was approximately $31.9 million, as compared to a working capital of approximately $36.8 million as of December 31, 2024. The approximately $4.9 million decrease in working capital during 2025 was primarily due to (i) the decrease of cash and cash equivalents of approximately $4.0 million, and (ii) the increase in inventories and contractual liabilities of approximately $1.3 million and $1.0 million, offset by the decrease in accounts receivables of approximately $0.2 million.

Cash Flow

	Three Months Ended March 31,
	2025			2024
(Expressed in U.S. Dollars)	(Unaudited)
Net cash used in operating activities	$	(4,954,514	)	$	(8,864,876	)
Net cash (used in) provided by investing activities		(499,561	)		306,761
Net cash provided by financing activities		1,166,489			-
Effect of exchange rate changes on cash, cash equivalents and restricted cash		65,434			(429,029	)
Net decrease in cash, cash equivalents, and restricted cash		(4,222,152	)		(8,987,144	)
Cash and cash equivalents, and restricted cash at beginning of the period-continuing		12,820,459			24,532,655
Cash and cash equivalents, and restricted cash at beginning of the period-discontinued		140,029			5,039,242
Cash and cash equivalents, and restricted cash at end of the period-continuing		8,734,388			20,483,490
Cash and cash equivalents, and restricted cash at end of the period- discontinued	$	3,948		$	101,263

Operating Activities

Our net cash used in operating activities was approximately $5.0 million, $8.9 million for the three months ended March 31, 2025 and 2024, respectively.

Net cash used in operating activities for the three months ended March 31, 2025 was primarily attributable to (i) our net loss of approximately $5.7 million and adjusted for non-cash items of approximately $1.5 million, which primarily consisted of net foreign currency exchange loss, share based compensation expense, change in fair value of equity securities, depreciation and amortization and amortization of operating lease right-of-use asset of approximately $0.3 million, $0.7 million, $0.3 million, $0.6 million and $0.8 million, respectively, (ii) the increase in inventories, and deferred revenue of approximately $0.9 million and $1.0 million, respectively, (iii) decrease in accounts payable, operating lease liabilities and accounts receivable of approximately $0.6 million, $0.6 million and $0.3 million, respectively.

Investing Activities

Net cash used in investing activities was approximately $0.5 million for the three months ended March 31, 2025. Net cash used in by investing activities for the three months ended March 31, 2025 was primarily attributable to purchase of property, plant and equipment of approximately $0.5 million.

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Financing Activities

Net cash provided by financing activities was approximately $1.2 million for the three months ended March 31, 2025. Net cash provided by financing activities for the three months ended March 31, 2025 was primarily attributable to loans proceed from related parties of approximately $1.0 million and loans proceed from third parties of approximately $0.6 million, offset by the repayment of loans to third parties of approximately $0.4 million.

Contractual Obligations

In June 2021, we signed two non-cancellable operating lease agreements for approximately 11,700 square feet and 3,767 square feet, respectively, of two floors of an office building in Hangzhou, China. The lease period for each lease agreement began in June 2021 and ends in May 2025. Pursuant to each agreement, we paid the first six months of our rent obligations in June 2021 and thereafter will be obligated to make rental payments in advance semi-annually. The total annual base rent under these two lease agreements is $186,866 for the term ending May 2023 and $167,521 for the term ending May 2024.

On December 4, 2021, we entered into an entrustment agreement with Cedar Europe GmbH, a company organized under the laws of Germany (“Cedar”) pursuant to which we entrusted Cedar to, in Cedar’s name, obtain a lease agreement for facilities in Germany and operate such lease facility under Cedar’s name in exchange for the Cenntro’s responsibility for all expenditures and costs of the lease. On December 24, 2021, Cedar entered into a lease agreement for an approximately 27,220 square feet facility in Dusseldorf, Germany, where we now house our European Operations Facility. The lease period began on January 1, 2022 and ends on December 31, 2024. Pursuant to such lease agreement, the total annual base rent is €354,787 (or approximately $373,630) for the lease term. On 17 January 2023, Cedar transferred the lease to CEGE, effectively from 1 February, 2023.

On March 22, 2023, we signed a non-cancellable operating lease agreement for approximately 26,579 square feet as a local plant in Colombia, the lease period began on May 1, 2023 and the lease term is two years. The rent is COP 46,796,001.49 (or approximately $11,224.92) per month and the value of the lease fee shall be readjusted in a proportion equal to the consumer price index (CPl) certified by DANE as of December 31 of the immediately preceding year, plus two (2) points. The lease terminated on February 13, 2025.

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

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

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

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

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

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On December 8, 2022, we signed a non-cancellable operating lease agreement for approximately 10,656 square feet as a headquarters and service center in Dominica Republic. The lease period commenced on February 15, 2023 and ends five years. The rent is $9,000 per month and the annual increase is 5%.

On August 31, 2023, we completed the acquisition with Antric GmbH in Germany. On July 20, 2022, Antric signed a non-cancellable operating lease agreement for approximately 4,361 square feet in Bochum, Germany, the lease period ends on December 31, 2026. The monthly rent is €3,605.26 (or approximately $3,796.73). On September 1, 2022, the lease area increased to 7,326 square feet and the monthly rent increased to €6,000.32 (or approximately $6,319.00). The additional deposit is €18,000.96 (or approximately $18,956.99). On January 20, 2023, Antric signed another non-cancellable operating lease agreement for approximately 252 square feet in Bochum, Germany, the lease period starts on February 1, 2023 and ends on December 31, 2026. The monthly rent increased to €6,315.38 (or approximately $6,650.79). On March 27, 2023, Antric signed another non-cancellable operating lease agreement for approximately 2,949 square feet in Bochum, Germany, the lease period starts on April 1, 2023 and ends on December 31, 2026. The monthly rent increased to €8,597.80 (or approximately $9,054.43).

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

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, the reported amounts of revenue and expenses during the reporting period and the related disclosures in the consolidated and combined financial statements and accompanying footnotes. Out of our significant accounting policies, which are described in “Note 2—Summary of Significant Accounting Policies” of our consolidated and combined financial statements for the three months ended March 31, 2025, included elsewhere in this Quarter Report, certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

Basis of presentation

Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements have been included. The interim financial information should be read in conjunction with the financial statements and the notes for the fiscal year ended December 31, 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results for the full year or any future periods.

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Use of estimates

Fair value measurement

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.

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Revenue recognition

The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.

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The following table disaggregated the Company’s revenues by product line for the three months ended March 31, 2025 and 2024:

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Vehicles sales	$	1,837,054		$	2,514,777
Spare-parts sales		242,276			828,785
Other service income		160,980			48,437
Net revenues		2,240,310			3,391,999
Less: Net revenues, discontinued operation		(97,252	)		(1,049,081	)
Net revenues, continuing operation	$	2,143,058		$	2,342,918

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 Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Primary geographical markets
Asia	$	1,174,031		$	1,104,475
Europe		803,269			1,661,619
America		263,010			625,905
Net revenues		2,240,310			3,391,999
Less: Net revenues, discontinued operation		(97,252	)		(1,049,081	)
Net revenues, continuing operation	$	2,143,058		$	2,342,918

Contract Balances

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

	March 31, 2025			December 31, 2024
	(Unaudited)
Accounts receivable, net	$	4,518,522		$	4,688,322
Less: accounts receivable, net, held for discontinued operation		(1,422,392	)		(1,406,457	)
Accounts receivable, net, held for continuing operation		3,096,130			3,281,865

Contractual liabilities	$	5,232,441		$	4,202,001
Less: contractual liabilities, held for discontinued operation		(129,648	)		(80,696	)
Contractual liabilities, held for continuing operation		5,102,793			4,121,305

Recently issued accounting standards pronouncement

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

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

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

Our management, with the participation of our CEO and acting CFO, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025, as required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act. Based on this evaluation, management concluded that the Company’s disclosure controls and procedures was not effective as of March 31, 2025, due to material weaknesses in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) that have been previously identified but continue to exist. See Part II, Item 9A of the 2024 Form 10-K for additional information.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Remediation

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

PART II

ITEM 1.

LEGAL PROCEEDINGS

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

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, we 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.

ITEM 1A.

RISK FACTORS

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

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ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

Trading Arrangements of Section 16 Reporting Persons.

During the quarter ended March 31, 2025, no person who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as amended, with respect to holdings of, and transactions in, the Company’s common shares (i.e. directors and certain officers of the Company) maintained, adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1(c) arrangement”, as those terms are defined in Section 229.408 of the regulations of the SEC.

ITEM 6.

Exhibits

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
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.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)

CENNTRO INC.

Dated: May 15, 2025.

	CENNTRO INC.

	By:	/s/ Peter Z. Wang
		Peter Z. Wang
		Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ Edward Ye
		Edward Ye
		Acting Chief Financial Officer
		(Principal Accounting Officer)