Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
(Exact name of registrant as specified in its charter)
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification Number)
|
Title of each class:
|
Trading Symbol(s)
|
Name of each exchange on which registered:
|
|
|
|
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
☒
|
Smaller reporting company
|
|
Emerging growth company
|
|
1 |
|
1 |
|
21 |
|
43 |
|
43 |
|
44 |
|
44 |
|
44 |
|
45 |
|
45 |
|
45 |
|
45 |
|
45 |
|
46 |
● |
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;
|
● |
the ability of our information technology systems or information security systems to operate effectively;
|
● |
actions by government authorities, including changes in government regulation;
|
● |
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 Security 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, 2022, filed with the SEC on June 30, 2023 and as amended on July 6, 2023 (the “Form 10-K/A”).
|
For the Three Months Ended March 31,
|
||||||||||||
Note
|
2023
|
2022
|
||||||||||
Net revenues
|
2(c)
|
$
|
|
$
|
|
|||||||
Cost of goods sold
|
(
|
)
|
(
|
)
|
||||||||
Gross profit
|
|
|
||||||||||
OPERATING EXPENSES:
|
||||||||||||
Selling and marketing expenses
|
(
|
)
|
(
|
)
|
||||||||
General and administrative expenses
|
(
|
)
|
(
|
)
|
||||||||
Research and development expenses
|
(
|
)
|
(
|
)
|
||||||||
Total operating expenses
|
(
|
)
|
(
|
)
|
||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||||||
OTHER EXPENSE:
|
||||||||||||
Interest (expense) income, net
|
(
|
)
|
|
|||||||||
Income from long-term investment
|
|
|
||||||||||
Impairment of long-term investment
|
(
|
)
|
|
|||||||||
Loss on redemption of convertible promissory notes
|
(
|
)
|
|
|||||||||
Loss on exercise of warrants
|
(
|
)
|
|
|||||||||
Change in fair value of convertible promissory notes and derivative liability
|
(
|
)
|
|
|||||||||
Change in fair value of equity securities
|
|
|
||||||||||
Other income (expense), net
|
|
(
|
)
|
|||||||||
Loss before income taxes
|
(
|
)
|
(
|
)
|
||||||||
Income tax expense
|
10
|
|
|
|||||||||
Net loss
|
(
|
)
|
(
|
)
|
||||||||
Less: net loss attributable to non-controlling interests
|
(
|
)
|
(
|
)
|
||||||||
Net loss attributable to the Company’s shareholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
OTHER COMPREHENSIVE LOSS
|
||||||||||||
Foreign currency translation adjustment
|
|
|
||||||||||
Total comprehensive loss
|
(
|
)
|
(
|
)
|
||||||||
Less: total comprehensive loss attributable to non-controlling interests
|
(
|
)
|
(
|
)
|
||||||||
Total comprehensive loss to the Company’s shareholders
|
$
|
(
|
)
|
$
|
(
|
)
|
Note
|
Mach 31,
2023
|
December 31,
2022
|
||||||||||
(Unaudited)
|
||||||||||||
ASSETS
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||||||
Restricted cash
|
|
|
||||||||||
Accounts receivable, net
|
4
|
|
|
|||||||||
Inventories
|
5
|
|
|
|||||||||
Prepayment and other current assets
|
6
|
|
|
|||||||||
Deferred cost- current |
||||||||||||
|
14
|
|
|
|||||||||
Total current assets
|
|
|
||||||||||
Non-current assets:
|
||||||||||||
Long-term investment, net
|
7
|
|
|
|||||||||
Investment in equity securities
|
8
|
|
|
|||||||||
Property, plant and equipment, net
|
9
|
|
|
|||||||||
Intangible assets, net
|
|
|
||||||||||
Right-of-use assets
|
11
|
|
|
|||||||||
Deferred cost- non-current |
||||||||||||
Other non-current assets, net
|
|
|
||||||||||
Total non-current assets
|
|
|
||||||||||
Total Assets
|
$
|
|
$
|
|
||||||||
LIABILITIES AND EQUITY
|
||||||||||||
LIABILITIES
|
||||||||||||
Current liabilities:
|
||||||||||||
Accounts payable
|
$
|
|
$
|
|
||||||||
Accrued expenses and other current liabilities
|
|
|
||||||||||
Contractual liabilities
|
|
|
||||||||||
Operating lease liabilities, current
|
11
|
|
|
|||||||||
Convertible promissory notes
|
12
|
|
|
|||||||||
Deferred government grant, current
|
|
|
||||||||||
|
15
|
|
|
|||||||||
Total current liabilities
|
|
|
||||||||||
Non-current liabilities:
|
||||||||||||
Deferred government grant, non-current
|
|
|
||||||||||
Derivative liability - investor warrant
|
12
|
|
|
|||||||||
Derivative liability - placement agent warrant
|
12
|
|
|
|||||||||
Operating lease liabilities, non-current
|
11
|
|
|
|||||||||
Total non-current liabilities
|
|
|
||||||||||
Total Liabilities
|
$
|
|
$
|
|
||||||||
Commitments and contingencies
|
14
|
|||||||||||
EQUITY
|
||||||||||||
Ordinary shares (
|
|
|
||||||||||
Additional paid in capital
|
|
|
||||||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||||||
Total equity attributable to shareholders
|
|
|
||||||||||
Non-controlling interests
|
|
(
|
)
|
|||||||||
Total Equity
|
$
|
|
$
|
|
||||||||
Total Liabilities and Equity
|
$
|
|
$
|
|
For the Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of equity investment
|
(
|
)
|
|
|||||
Purchase of plant and equipment
|
(
|
)
|
(
|
)
|
||||
Purchase of land use right and property
|
(
|
)
|
|
|||||
Acquisition of CAE’s equity interests
|
(
|
)
|
(
|
)
|
||||
Proceeds from disposal of property, plant and equipment
|
|
|
||||||
Loans provided to third parties
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayment of loans to related parties
|
|
(
|
)
|
|||||
Repayment of loans to third parties
|
|
(
|
)
|
|||||
Purchase of CAE’s loan
|
|
(
|
)
|
|||||
Reduction of capital
|
|
(
|
)
|
|||||
Redemption of convertible promissory notes
|
(
|
)
|
|
|||||
Payment of expense for the reverse recapitalization
|
|
(
|
)
|
|||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
Effect of exchange rate changes on cash
|
|
|
||||||
Net decrease in cash, cash equivalents and restricted cash
|
(
|
)
|
(
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
|
$
|
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$
|
|
$
|
|
||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Cashless exercise of warrants
|
$
|
|
$
|
|
Ordinary shares
|
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, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
Share-based compensation
|
-
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net loss
|
-
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Acquisition of
|
-
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Balance as of March 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
Ordinary shares
|
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, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||
Share-based compensation
|
-
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net loss
|
-
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Acquisition of
|
-
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Exercise of warrants
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Balance as of March 31, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
Name
|
Date of
Incorporation
|
Place of
Incorporation
|
Percentage of direct or
indirect economic
interest
|
|||
Cenntro Electric CICS, SRL
|
|
|
|
|||
Cennatic Power, Inc. (“Cennatic Power”)
|
|
|
|
|||
Cenntro Automotive Europe GmbH (“CAE”)
|
|
|
|
|||
Cenntro Electric Group (Europe) GmbH (“Cenntro Electric”)
|
|
|
|
|||
Cennatic Energy S. de R.L. de C.V.
|
|
|
|
|||
Cenntro Electric B.V.
|
|
|
|
|||
Cenntro Automotive Corporation (“CAC”)
|
|
|
|
|||
Cenntro Electric Group, Inc. (“CEG”)
|
|
|
|
|||
Cenntro Automotive Group Limited (“CAG HK”)
|
|
|
|
|||
Simachinery Equipment Limited (“Simachinery HK”)
|
|
|
|
|||
Zhejiang Cenntro Machinery Co., Limited
|
|
|
|
|||
Jiangsu Tooniu Tech Co., Limited
|
|
|
|
|||
Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”)
|
|
|
|
|||
Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”)
|
|
|
|
|||
Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”)
|
|
|
|
|||
Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”)
|
|
|
|
|||
Hangzhou Hengzhong Tech Co., Limited
|
|
|
|
|||
Zhejiang Xbean Tech Co., Limited *
|
|
|
|
|||
Cenntro Automotive S.A.S.
|
|
|
|
|||
Cenntro Electric Colombia S.A.S.
|
|
|
|
|||
Cenntro Elektromobilite Araçlar A.Ş
|
|
|
|
|||
Teemak Power Corporation
|
|
|
|
|||
Avantier Motors Corporation
|
|
|
|
|||
Avantier Motors (Hong Kong) Limited
|
|
|
|
* |
|
(a) |
Basis of presentation
|
(b) |
Use of estimates
|
(c) |
Revenue recognition
|
For the Three Months
Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Vehicles sales
|
$
|
|
$
|
|
||||
Spare-parts sales
|
|
|
||||||
Other service income
|
|
|
||||||
Net revenues
|
$
|
|
$
|
|
For the Three Months
Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Primary geographical markets
|
|
|||||||
Europe
|
$
|
|
$
|
|
||||
Asia
|
|
|
||||||
America
|
|
|
||||||
Total
|
$
|
|
$
|
|
March 31,
2023
|
December 31,
2022
|
|||||||
Accounts receivable, net
|
$
|
|
$
|
|
||||
Contractual liabilities
|
$
|
|
$
|
|
(d) |
Recently issued accounting standards pronouncement
|
March 31,
2023
|
December 31,
2022
|
|||||||
Accounts receivable
|
$
|
|
$
|
|
||||
Less: provision for doubtful accounts
|
(
|
)
|
(
|
)
|
||||
Accounts receivable, net
|
$
|
|
$
|
|
For the Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Balance at the beginning of the period
|
$
|
|
$
|
|
||||
Additions
|
|
|
||||||
Write-off
|
(
|
)
|
|
|||||
Foreign exchange
|
|
|
||||||
Balance at the end of the year
|
$
|
|
$
|
|
March 31,
2023
|
December 31,
2022
|
|||||||
Raw material
|
$
|
|
$
|
|
||||
Work-in-progress
|
|
|
||||||
Goods in transit
|
|
|
||||||
Finished goods
|
|
|
||||||
Inventories
|
$
|
|
$
|
|
March 31,
2023
|
December 31,
2022
|
|||||||
Advance to suppliers
|
$
|
|
$
|
|
||||
Deductible input value added tax
|
|
|
||||||
Receivable from third parties
|
|
|
||||||
Loans to a third party
|
|
|
||||||
Others
|
|
|
||||||
Prepayment and other current assets
|
$
|
|
$
|
|
March 31,
2023
|
December 31,
2022
|
|||||||
Antric GmbH (1)
|
$
|
|
$
|
|
||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2)
|
|
|
||||||
Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3)
|
|
|
||||||
Able 2rent GmbH (DEU) (4)
|
|
|
||||||
Total
|
$
|
|
$
|
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
March 31,
2023
|
December 31,
2022
|
|||||||
HW Electro Co., Ltd. (1)
|
|
|
||||||
Total
|
$
|
|
$
|
|
(1) |
|
March 31,
2023
|
December 31,
2022
|
|||||||
MineOne Fix Income Investment I L.P
|
$
|
|
$
|
|
||||
Micro Money Fund SPC
|
|
|
||||||
Total
|
$
|
|
$
|
|
March 31,
2023
|
December 31,
2022
|
|||||||
At cost:
|
||||||||
Plant and building (1)
|
$
|
|
$
|
|
||||
Machinery and equipment
|
|
|
||||||
Leasehold improvement
|
|
|
||||||
Office equipment
|
|
|
||||||
Motor vehicles
|
|
|
||||||
Total
|
|
|
||||||
Less: accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Construction in progress
|
|
|
||||||
Property, plant and equipment, net
|
$
|
|
$
|
|
For the Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
PRC
|
$
|
(
|
)
|
(
|
)
|
|||
US
|
(
|
)
|
(
|
)
|
||||
Europe
|
(
|
)
|
(
|
)
|
||||
Australia
|
(
|
)
|
(
|
)
|
||||
Others
|
(
|
)
|
|
|||||
Total
|
$
|
(
|
)
|
(
|
)
|
For the Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Operating leases cost excluding short-term rental expense
|
$
|
|
$
|
|
||||
Short-term lease cost
|
|
|
||||||
Total
|
$
|
|
$
|
|
March 31,
2023
|
March 31,
2022
|
|||||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
||||
Weighted average remaining lease term
|
|
|
||||||
Weighted average discount rate
|
|
%
|
|
%
|
Operating
Leases
|
||||
For the remaining of 2023
|
$
|
|
||
Years ended December 31,
|
||||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028 and thereafter
|
|
|||
Total lease payments
|
|
|||
Less: imputed interest
|
|
|||
Total
|
|
|||
Less:
|
|
|||
|
$
|
|
Liability component
|
||||
As of December 31, 2022
|
$
|
|
||
Convertible promissory notes issued during the year
|
|
|||
Redemption of convertible promissory notes
|
(
|
)
|
||
Fair value change recognized
|
|
|||
As of March 31, 2023
|
|
Fair Value Assumptions - Convertible Promissory Note
|
March 31,
2023
|
December 31,
2022
|
||||||
Face value principal payable
|
|
|
||||||
Original conversion price
|
|
|
||||||
Interest Rate
|
|
%
|
|
%
|
||||
Expected term (years)
|
|
|
||||||
Volatility
|
|
%
|
|
%
|
||||
Market yield (range)
|
|
%
|
|
%
|
||||
Risk free rate
|
|
%
|
|
%
|
||||
Issue date
|
|
|
||||||
Maturity date
|
|
|
Investor warrants
component
|
Placement agent
warrants component
|
|||||||
As of December 31, 2022
|
$
|
|
$
|
|
||||
Warrants issued during the year
|
|
|
||||||
Exercise of warrants
|
(
|
)
|
|
|||||
Fair value change recognized
|
|
|
||||||
As of March 31, 2023
|
|
|
Fair Value Assumptions – Warrants
|
March 31,
2023
|
December 31,
2022
|
||||||
Expected term (years)
|
|
|
||||||
Volatility
|
|
%
|
|
%
|
||||
Risk free rate
|
|
%
|
|
%
|
(a) |
Customers
|
Three months ended
|
Three months ended
|
|||||||||||||||
March 31, 2023,
|
March 31, 2022,
|
|||||||||||||||
Customer
|
Amount
|
% of Total
|
Amount
|
% of Total
|
||||||||||||
A
|
|
|
%
|
|
|
|||||||||||
B
|
|
|
|
|
%
|
|||||||||||
C
|
|
|
|
|
%
|
|||||||||||
D
|
|
|
|
|
%
|
|||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
* |
|
As of March 31, 2023,
|
As of December 31, 2022,
|
||||||||||||||||
Customer
|
Amount
|
% of Total
|
Amount
|
% of Total
|
|||||||||||||
C
|
$ |
|
|
$ |
|
|
%
|
||||||||||
E |
|
|
|
|
%
|
||||||||||||
F |
|
|
%
|
|
|
%
|
|||||||||||
G |
% |
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
* |
Indicates below 10%.
|
(b) |
Suppliers
|
Three months ended
March 31, 2023,
|
Three months ended
March 31, 2022,
|
|||||||||||||||
Supplier
|
Amount
|
% of Total
|
Amount
|
% of Total
|
||||||||||||
A
|
$
|
|
|
%
|
$
|
|
|
|||||||||
B
|
|
|
|
|
%
|
|||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
* |
Indicates below 10%.
|
As of March 31, 2023,
|
As of December 31, 2022,
|
|||||||||||||||
Supplier
|
Amount
|
% of Total
|
Amount
|
% of Total
|
||||||||||||
B
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
C
|
|
|
%
|
|
|
%
|
||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
Name of related parties:
|
Relationship with the Company
|
|
Mr. Yeung Heung Yeung
|
|
|
Zhejiang RAP
|
|
|
Jiangsu Rongyuan
|
|
|
Hangzhou Hezhe Energy Technology Co., Ltd (“Hangzhou Hezhe”)
|
|
|
Shenzhen Yuanzheng Investment Development Co. Ltd (“Shenzhen Yuanzheng“)
|
|
|
Shanghai Hengyu Enterprise Management Consulting Co., Ltd (“Shanghai Hengyu”)
|
|
|
Antric GmbH
|
|
For the three months ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Purchase of raw materials from related parties
|
||||||||
Hangzhou Hezhe Energy Technology Co., Ltd
|
$ |
|
$ |
|
||||
Payment on the purchase of the raw materials
|
||||||||
Hangzhou Hezhe
|
|
|
||||||
Repayment interest-bearing Loan from a related party
|
||||||||
Shenzhen Yuanzheng
|
|
|
||||||
Mr. Yeung Heung Yeung
|
|
|
March 31, 2023
|
December 31,
2022
|
|||||||
Hangzhou Hezhe (1)
|
$ |
|
$ |
|
||||
Total
|
$ |
|
$ |
|
(1) |
|
March 31, 2023
|
December 31,
2022
|
|||||||
Zhejiang RAP
|
$
|
|
$
|
|
||||
Jiangsu Rongyuan
|
|
|
||||||
Shanghai Hengyu
|
|
|
||||||
Antric GmbH
|
|
|
||||||
Total
|
$
|
|
$
|
|
Three Months ended March 31,
|
||||||||
2023
|
2022
|
|||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||
Gross margin of vehicle sales
|
1.63
|
%
|
19.7
|
%
|
Three Months ended March 31,
|
||||||||
2023
|
2022
|
|||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||
Combined Statements of Operations Data:
|
||||||||
Net revenues
|
3,470,544
|
1,830,633
|
||||||
Cost of goods sold
|
(3,275,800
|
)
|
(1,467,603
|
)
|
||||
Gross profit/(loss)
|
194,744
|
363,030
|
||||||
Operating Expenses:
|
||||||||
Selling and marketing expenses
|
(1,868,985
|
(1,095,108
|
)
|
|||||
General and administrative expenses
|
(7,333,895
|
)
|
(8,211,831
|
)
|
||||
Research and development expenses
|
(1,569,919
|
)
|
(425,359
|
)
|
||||
Impairment of PPE
|
(24,369
|
)
|
-
|
|||||
Total operating expenses
|
(10,797,168
|
)
|
(9,732,298
|
)
|
||||
Loss from operations
|
(10,602,424
|
)
|
(9,369,268
|
)
|
||||
Other Income (Expense):
|
||||||||
Interest expense, net
|
(54,415
|
)
|
64,201
|
|||||
(Loss) Income from equity method investments
|
19,042
|
5,937
|
||||||
Other (expense) income, net
|
358,075
|
(49,239
|
)
|
|||||
Loss on redemption of convertible promissory notes
|
(2,100
|
)
|
-
|
|||||
Loss on exercise of warrants
|
(212,870
|
)
|
-
|
|||||
Change in fair value of convertible promissory notes and derivative liability
|
(126,272
|
)
|
-
|
|||||
Change in fair value of equity securities
|
653,016
|
-
|
||||||
Impairment of Long-term investments
|
(1,146,128
|
)
|
-
|
|||||
Loss before income taxes
|
(11,113,977
|
)
|
(9,348,369
|
)
|
||||
Income tax expense
|
—
|
—
|
||||||
Net loss
|
(11,113,977
|
)
|
(9,348,369
|
)
|
||||
Less: net loss attributable to non-controlling interests
|
(156,028
|
)
|
(36,719
|
)
|
||||
Net loss attributable to shareholders of the Company
|
(10,957,949
|
)
|
(9,311,650
|
)
|
Three Months Ended March 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||||||||||
Net revenues:
|
||||||||||||||||
Vehicle Sales
|
$
|
2,840,963
|
81.9
|
%
|
$
|
1,718,371
|
93.9
|
%
|
||||||||
Spare-part sales
|
598,036
|
17.2
|
%
|
101,424
|
5.5
|
%
|
||||||||||
Other sales
|
31,545
|
0.9
|
%
|
10,838
|
0.6
|
%
|
||||||||||
Total net revenues
|
$
|
3,470,544
|
100.00
|
%
|
$
|
1,830,633
|
100.00
|
%
|
Three Months Ended March 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||||||||||
Cost of goods sold:
|
||||||||||||||||
Vehicle Sales
|
$
|
(2,794,761
|
)
|
85.3
|
%
|
$
|
(1,379,605
|
)
|
94.0
|
%
|
||||||
Spare-part sales
|
(464,224
|
)
|
14.2
|
%
|
(98,024
|
)
|
6.7
|
%
|
||||||||
Other sales
|
(16,814
|
)
|
0.5
|
%
|
10,025
|
-0.7
|
%
|
|||||||||
Inventory write-down
|
-
|
-
|
-
|
-
|
||||||||||||
Total cost of goods sold
|
$
|
(3,275,799
|
)
|
100.00
|
%
|
$
|
(1,467,603
|
)
|
100.00
|
%
|
• |
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.
|
• |
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.
|
Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||
Net loss
|
$
|
(11,113,977
|
)
|
$
|
(9,348,369
|
)
|
||
Interest expense, net
|
54,415
|
(64,201
|
)
|
|||||
Income tax expense
|
—
|
—
|
||||||
Depreciation and amortization
|
330,632
|
140,430
|
||||||
Share-based compensation expense
|
1,153,808
|
199,416
|
||||||
Loss on redemption of convertible promissory notes
|
2,001
|
-
|
||||||
Loss on exercise of warrants
|
212,870
|
|||||||
Change in fair value of convertible promissory notes and derivative liability
|
126,272
|
-
|
||||||
Expenses related to one-off payment inherited from the original Naked Brand Group
|
8,299,178
|
|||||||
Adjusted EBITDA
|
$
|
(9,233,979
|
)
|
$
|
(773,546
|
)
|
• |
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.”
|
Quarter Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
(Expressed in U.S. Dollars)
|
(Unaudited)
|
|||||||
Net cash used in operating activities
|
$
|
(17,363,332
|
)
|
$
|
(23,486,437
|
)
|
||
Net cash (used in) provided by investing activities
|
(5,493,759
|
)
|
(3,972,528
|
)
|
||||
Net cash provided by financing activities
|
(39,583,321
|
)
|
(30,234,533
|
)
|
||||
Effect of exchange rate changes on cash
|
283,807
|
97,755
|
||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
(62,156,605
|
)
|
(57,595,743
|
)
|
||||
Cash and cash equivalents, and restricted cash at beginning of the year
|
154,096,801
|
261,664,962
|
||||||
Cash and cash equivalents, and restricted cash at end of the period
|
$
|
91,940,195
|
$
|
204,069,218
|
Buildings
|
20 years
|
|
Machinery and equipment
|
5-10 years
|
|
Office equipment
|
5 years
|
|
Motor vehicles
|
3-5 years
|
|
Leasehold improvement
|
3-10 years
|
|
Others
|
3 years
|
Category
|
Estimated useful life
|
Land use rights
|
45.75 years
|
Software
|
3 years
|
March 31,
2023
|
December 31,
2022
|
|||||||
Antric GmbH (1)
|
$
|
1,556,672
|
$
|
2,674,500
|
||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2)
|
2,199,016
|
2,189,570
|
||||||
Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3)
|
391,088
|
367,272
|
||||||
Able 2rent GmbH (DEU) (4)
|
92,736
|
94,399
|
||||||
Total
|
$
|
4,239,512
|
$
|
5,325,741
|
(1) |
On December 16, 2022, the Company invested EUR2,500,000 (approximately $2,718,000) in Antric GmbH to acquire 25% of its equity interest. The Company accounts for the investment under the equity method
because the Company controls 25% of voting interests, and has the ability to exercise significant influence over Antric GmbH. For the three months ended March 31, 2023, the Company recorded impairment on investment of Antric GmbH of
$1,146,128.
|
(2) |
On September 25, 2022, the Company invested RMB15,400,000 (approximately $2,242,414) 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.
|
(3) |
On June 23, 2021, the Company invested RMB2,000,000 (approximately $291,223 in Hangzhou Hezhe to acquire 20% of its equity interest. The Company accounts for the investment under the equity method because
the Company controls 33% of voting interests in board of directors, and has the ability to exercise significant influence over Hangzhou Hezhe.
|
(4) |
On March 22, 2022, CAE invested EUR100,000 (approximately $108,720 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.
|
March 31,
2023
|
December 31,
2022
|
|||||||
HW Electro Co., Ltd. (1)
|
1,000,000
|
-
|
||||||
Total
|
$
|
1,000,000
|
$
|
-
|
(1) |
On January 31, 2023, the Company entered into a convertible debt agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 into 571,930 shares of HW Electro Co.,
Ltd.’s for a total of 3.59% of its equity interest.
|
For the Three Months Ended March 31,
|
||||||||
2023
|
2022
|
|||||||
Period end USD: RMB exchange rate
|
|
|
6.8676
|
|
|
|
6.3393
|
|
Average USD: RMB exchange rate
|
|
|
6.8423
|
|
|
|
6.3478
|
|
Period end USD: EUR exchange rate
|
0.9198
|
0.9015
|
||||||
Average USD: EUR exchange rate
|
0.9320
|
0.8916
|
For the Periods Ended
|
||||||||||||||||||||||||
Unaudited 31 March 2023
|
31 December 2022
|
|||||||||||||||||||||||
Balance Sheet:
|
U.S. GAAP
|
IFRS
Difference
|
IFRS
|
U.S. GAAP
|
IFRS
Difference
|
IFRS
|
||||||||||||||||||
Current assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
91,847,734
|
-
|
91,847,734
|
153,966,777
|
-
|
153,966,777
|
||||||||||||||||||
Restricted cash
|
92,461
|
-
|
92,461
|
130,024
|
-
|
130,024
|
||||||||||||||||||
Accounts receivable, net
|
2,732,834
|
-
|
2,732,834
|
565,398
|
-
|
565,398
|
||||||||||||||||||
Inventories
|
36,546,917
|
-
|
36,546,917
|
31,843,371
|
-
|
31,843,371
|
||||||||||||||||||
Prepayment and other current assets
|
15,596,764
|
-
|
15,596,764
|
16,138,330
|
-
|
16,138,330
|
||||||||||||||||||
Deferred cost-current
|
20,026
|
-
|
20,026
|
-
|
-
|
-
|
||||||||||||||||||
Amount due from related parties
|
343,353
|
-
|
343,353
|
366,936
|
-
|
366,936
|
||||||||||||||||||
Total current assets
|
147,180,089
|
-
|
147,180,089
|
203,010,836
|
-
|
203,010,836
|
||||||||||||||||||
Non-current assets
|
||||||||||||||||||||||||
Long-term investment, net
|
5,239,512
|
-
|
5,239,512
|
5,325,741
|
-
|
5,325,741
|
||||||||||||||||||
Investment in equity securities
|
30,412,211
|
-
|
30,412,211
|
29,759,195
|
-
|
29,759,195
|
||||||||||||||||||
Property, plant and equipment, net
|
17,265,446
|
-
|
17,265,446
|
14,962,591
|
-
|
14,962,591
|
||||||||||||||||||
Intangible assets, net
|
4,558,185
|
-
|
4,558,185
|
4,563,792
|
-
|
4,563,792
|
||||||||||||||||||
Right-of-use assets
|
13,865,063
|
-
|
13,865,063
|
8,187,149
|
-
|
8,187,149
|
||||||||||||||||||
Deferred cost- non-current
|
243,251
|
-
|
243,251
|
-
|
-
|
-
|
||||||||||||||||||
Other non-current assets, net
|
2,306,597
|
-
|
2,306,597
|
2,039,012
|
-
|
2,039,012
|
||||||||||||||||||
Total non-current assets
|
73,890,265
|
-
|
73,890,265
|
64,837,480
|
-
|
64,837,480
|
||||||||||||||||||
Total assets
|
221,070,354
|
-
|
221,070,354
|
267,848,316
|
-
|
267,848,316
|
||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Accounts payable
|
2,899,119
|
-
|
2,899,119
|
3,383,021
|
-
|
3,383,021
|
||||||||||||||||||
Accrued expense and other current liabilities
|
3,668,415
|
-
|
3,668,415
|
5,048,641
|
-
|
5,048,641
|
||||||||||||||||||
Contractual liabilities
|
2,656,151
|
-
|
2,656,151
|
2,388,480
|
-
|
2,388,480
|
||||||||||||||||||
Operating lease liabilities, current
|
2,779,279
|
-
|
2,779,279
|
1,313,334
|
-
|
1,313,334
|
||||||||||||||||||
Convertible promissory notes
|
17,903,274
|
-
|
17,903,274
|
57,372,827
|
-
|
57,372,827
|
||||||||||||||||||
Deferred government grant, current
|
56,009
|
-
|
56,009
|
26,533
|
-
|
26,533
|
||||||||||||||||||
Amount due to related parties
|
46,900
|
-
|
46,900
|
716,372
|
-
|
716,372
|
||||||||||||||||||
Total current liabilities
|
30,009,147
|
-
|
30,009,147
|
70,249,208
|
-
|
70,249,208
|
||||||||||||||||||
Non-current liabilities
|
||||||||||||||||||||||||
Deferred government grant, non-current
|
1,036,172
|
-
|
1,036,172
|
497,484
|
-
|
497,484
|
||||||||||||||||||
Derivative liability - investor warrant
|
12,392,632
|
-
|
12,392,632
|
14,334,104
|
-
|
14,334,104
|
||||||||||||||||||
Derivative liability - placement agent warrant
|
3,457,067
|
-
|
3,457,067
|
3,456,404
|
-
|
3,456,404
|
||||||||||||||||||
Operating lease liabilities, non-current
|
11,640,499
|
-
|
11,640,499
|
7,421,582
|
-
|
7,421,582
|
||||||||||||||||||
Total non-current liabilities
|
28,526,370
|
-
|
28,526,370
|
25,709,574
|
-
|
25,709,574
|
||||||||||||||||||
Total liabilities
|
58,535,517
|
-
|
58,535,517
|
95,958,782
|
-
|
95,958,782
|
||||||||||||||||||
Equity
|
||||||||||||||||||||||||
Ordinary shares (No par value; 304,449,091 and 300,841,995 shares issued and outstanding as of 31 March 2023 and 31 December 2022, respectively)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Additional paid-in capital
|
398,262,089
|
183,529,388
|
(1)
|
581,791,477
|
397,497,817
|
182,125,475
|
(1)
|
579,623,292
|
||||||||||||||||
Accumulated other comprehensive loss
|
(4,945,127
|
)
|
4,945,127
|
-
|
(5,306,972
|
)
|
5,306,972
|
-
|
||||||||||||||||
Reserves
|
-
|
20,955,416
|
(2)
|
20,955,416
|
-
|
21,997,484
|
(2)
|
21,997,484
|
||||||||||||||||
Accumulated deficit
|
(230,782,125
|
)
|
(209,429,931
|
)
|
(440,212,056
|
)
|
(219,824,176
|
)
|
(209,429,931
|
)
|
(429,254,107
|
)
|
||||||||||||
Total Stockholders' Equity
|
162,534,837
|
-
|
162,534,837
|
172,366,669
|
-
|
172,366,669
|
||||||||||||||||||
Non-controlling interests
|
-
|
-
|
-
|
(477,135
|
)
|
-
|
(477,135
|
)
|
||||||||||||||||
Total Equity
|
162,534,837
|
-
|
162,534,837
|
171,889,534
|
-
|
171,889,534
|
||||||||||||||||||
Total Liabilities and Equity
|
221,070,354
|
-
|
221,070,354
|
267,848,316
|
-
|
267,848,316
|
(1) |
Includes (i) $(28,458,264) (2022: $(27,304,456)) in share-based compensation payments. (ii) $2,557,721 recognized in 2023 from the acquisition of 35% of CAE’s equity interest, and (iii) additional equity of
$209,429,931 recognized in 2021 from the difference between the deemed transaction price and net assets acquired related to the Combination under IFRS.
|
(2) |
Includes (i) a reclassification of Accumulated other comprehensive loss under U.S. GAAP of $(4,945,127) (2022: $(5,306,972)), (ii) a reclassification of Additional paid-in capital under U.S. GAAP of
$28,458,264 (2022: $27,304,456) in share-based compensation payments to Reserves under IFRS, and (iii) a reclassification of Additional paid-in capital under U.S. GAAP of $(2,557,721) recognized in 2023 from the acquisition of 35% of
CAE’s equity interest to Reserve under IFRS.
|
a) |
The reclassification of “Accumulated other comprehensive loss” under U.S. GAAP to “Reserves” under IFRS;
|
b) |
The reclassification of amounts of share-based payments from “Additional paid-in capital” under U.S. GAAP to “Reserves” under IFRS;
|
c) |
The reclassification of the amount recognized from the acquisition of 35% of CAE’s equity interest from “Additional paid-in capital” under U.S. GAAP to “Reserves” under IFRS; and
|
d) |
Additional equity recognized from the difference between the total deemed transaction price and net assets acquired related to the Combination under IFRS.
|
e) |
In 2021, the Company was deemed to have incurred non-cash listing costs of approximately $209.4 million as a result of the IFRS accounting treatment of the Combination, as Cenntro was deemed to have
received a 67% controlling interest in CEGL (formerly NBG) and the Group was deemed to have incurred listing costs equaling the difference between the total deemed transaction price and total net assets. Under U.S. GAAP, the Combination
is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by Cenntro for the net assets of CEGL (formerly NBG), accompanied by a recapitalization).
|
For the Three Months Ended
|
||||||||||||||||||||||||
Unaudited 31 March 2023
|
Unaudited 31 March 2022
|
|||||||||||||||||||||||
U.S. GAAP
|
IFRS
Difference
|
IFRS
|
U.S. GAAP
|
IFRS
Difference
|
IFRS
|
|||||||||||||||||||
Net revenues
|
3,470,544
|
-
|
3,470,544
|
1,830,633
|
-
|
1,830,633
|
||||||||||||||||||
Cost of goods sold
|
(3,275,800
|
)
|
-
|
(3,275,800
|
)
|
(1,467,603
|
)
|
-
|
(1,467,603
|
)
|
||||||||||||||
Gross (Loss) Profit
|
194,744
|
-
|
194,744
|
363,030
|
-
|
363,030
|
||||||||||||||||||
Selling and marketing expenses
|
(1,868,985
|
)
|
-
|
(1,868,985
|
)
|
(1,095,108
|
)
|
-
|
(1,095,108
|
)
|
||||||||||||||
General and administrative expenses
|
(7,358,264
|
)
|
-
|
(7,358,264
|
)
|
(8,211,831
|
)
|
-
|
(8,211,831
|
)
|
||||||||||||||
Research and development expenses
|
(1,569,919
|
)
|
-
|
(1,569,919
|
)
|
(425,359
|
)
|
-
|
(425,359
|
)
|
||||||||||||||
Total operating expenses
|
(10,797,168
|
)
|
-
|
(10,797,168
|
)
|
(9,732,298
|
)
|
-
|
(9,732,298
|
)
|
||||||||||||||
Loss from operations
|
(10,602,424
|
)
|
-
|
(10,602,424
|
)
|
(9,369,268
|
)
|
-
|
(9,369,268
|
)
|
||||||||||||||
Interest (expense) income, net
|
(54,415
|
)
|
-
|
(54,415
|
)
|
64,201
|
-
|
64,201
|
||||||||||||||||
Income from long-term investment
|
19,042
|
-
|
19,042
|
5,937
|
-
|
5,937
|
||||||||||||||||||
Impairment of long-term investment
|
(1,146,128
|
)
|
(1,146,128
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Loss on redemption of convertible promissory notes
|
(2,001
|
)
|
-
|
(2,001
|
)
|
-
|
-
|
-
|
||||||||||||||||
Loss on exercise of warrants
|
(212,870
|
)
|
(212,870
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability
|
(126,273
|
)
|
-
|
(126,273
|
)
|
-
|
-
|
-
|
||||||||||||||||
Change in fair value of equity securities
|
653,016
|
653,016
|
-
|
-
|
-
|
|||||||||||||||||||
Other income (expense), net
|
358,076
|
-
|
358,076
|
(49,239
|
)
|
-
|
(49,239
|
)
|
||||||||||||||||
Loss before income taxes
|
(11,113,977
|
)
|
-
|
(11,113,977
|
)
|
(9,348,369
|
)
|
-
|
(9,348,369
|
)
|
||||||||||||||
Income tax expense
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Net loss
|
(11,113,977
|
)
|
-
|
(11,113,977
|
)
|
(9,348,369
|
)
|
-
|
(9,348,369
|
)
|
||||||||||||||
Less: net loss attributable to non-controlling interests
|
(156,028
|
)
|
-
|
(156,028
|
)
|
(36,719
|
)
|
-
|
(36,719
|
)
|
||||||||||||||
Net loss attributable to the Company’s shareholders
|
(10,957,949
|
)
|
-
|
(10,957,949
|
)
|
(9,311,650
|
)
|
-
|
(9,311,650
|
)
|
||||||||||||||
-
|
||||||||||||||||||||||||
Other comprehensive loss
|
-
|
|||||||||||||||||||||||
Foreign currency translation adjustment
|
337,278
|
-
|
337,278
|
253,156 253,156
|
-
|
253,156 253,156
|
||||||||||||||||||
Total comprehensive loss
|
(10,776,699
|
)
|
-
|
(10,776,699
|
)
|
(9,095,213
|
)
|
-
|
(9,095,213
|
)
|
||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests
|
(180,595
|
)
|
-
|
(180,595
|
)
|
(57,588
|
)
|
-
|
(57,588
|
)
|
||||||||||||||
Total comprehensive loss attributable to the Company’s shareholders
|
(10,596,104
|
)
|
-
|
(10,596,104
|
)
|
(9,037,625
|
)
|
-
|
(9,037,625
|
)
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
Exhibits
|
Exhibit
No.
|
Description of Exhibit
|
|
Certification of Principal Executive Officer required by Rule 13a-14(a).
|
||
Certification of Principal Financial Officer required by Rule 13a-14(a).
|
||
Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
||
101.INS*
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
101.SCH*
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104*
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
Dated: July 25, 2023. | ||
CENNTRO ELECTRIC GROUP LIMITED
|
||
By:
|
/s/ Peter Z. Wang
|
|
Peter Z. Wang
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
By:
|
/s/ Edmond Cheng
|
|
Edmond Cheng
|
||
Chief Financial Officer
|
||
(Principal Accounting Officer)
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial
reporting.
|
Dated: July 25, 2023
|
||
By:
|
/s/ Peter Z. Wang
|
|
Peter Z. Wang
|
||
Chairman and Chief Executive Officer
|
||
(Principal Executive Officer)
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial
reporting.
|
Dated: July 25, 2023
|
||
By:
|
/s/ Edmond Cheng
|
|
Edmond Cheng
|
||
Chief Financial Officer
|
||
(Principal Accounting Officer and Principal Financial Officer)
|
Dated: July 25, 2023
|
||
By:
|
/s/ Peter Z. Wang
|
|
Peter Z. Wang
|
||
Chairman and Chief Executive Officer
|
||
By:
|
/s/ Edmond Cheng
|
|
Edmond Cheng
|
||
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
EQUITY | ||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 |
Ordinary shares, shares issued (in shares) | 304,449,091 | 300,841,995 |
Ordinary shares, shares outstanding (in shares) | 304,449,091 | 300,841,995 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) |
Ordinary Shares [Member] |
Additional Paid in Capital [Member] |
Accumulated Deficit [Member] |
Accumulated Other Comprehensive Loss [Member] |
Total Shareholders' Equity [Member] |
Non-controlling Interest [Member] |
Total |
---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2021 | $ 0 | $ 374,901,939 | $ (109,735,935) | $ (1,392,699) | $ 263,773,305 | $ 0 | $ 263,773,305 |
Beginning balance (in shares) at Dec. 31, 2021 | 261,256,254 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | $ 0 | 199,416 | 0 | 0 | 199,416 | 0 | 199,416 |
Net loss | 0 | 0 | (9,311,650) | 0 | (9,311,650) | (36,719) | (9,348,369) |
Acquisition of CAE's equity interests | 0 | 0 | 0 | 0 | 0 | 1,555,320 | 1,555,320 |
Foreign currency translation adjustment | 0 | 0 | 0 | 274,025 | 274,025 | (20,869) | 253,156 |
Ending balance at Mar. 31, 2022 | $ 0 | 375,101,355 | (119,047,585) | (1,118,674) | 254,935,096 | 1,497,732 | 256,432,828 |
Ending balance (in shares) at Mar. 31, 2022 | 261,256,254 | ||||||
Beginning balance at Dec. 31, 2022 | $ 0 | 397,497,817 | (219,824,176) | (5,306,972) | 172,366,669 | (477,135) | $ 171,889,534 |
Beginning balance (in shares) at Dec. 31, 2022 | 300,841,995 | 300,841,995 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | $ 0 | 1,153,808 | 0 | 0 | 1,153,808 | 0 | $ 1,153,808 |
Net loss | 0 | 0 | (10,957,949) | 0 | (10,957,949) | (156,028) | (11,113,977) |
Acquisition of CAE's equity interests | 0 | (2,557,721) | 0 | 0 | (2,557,721) | 657,730 | (1,899,991) |
Exercise of warrants | $ 0 | 2,168,185 | 0 | 0 | 2,168,185 | 0 | 2,168,185 |
Exercise of warrants (in shares) | 3,607,096 | ||||||
Foreign currency translation adjustment | $ 0 | 0 | 0 | 361,845 | 361,845 | (24,567) | 337,278 |
Ending balance at Mar. 31, 2023 | $ 0 | $ 398,262,089 | $ (230,782,125) | $ (4,945,127) | $ 162,534,837 | $ 0 | $ 162,534,837 |
Ending balance (in shares) at Mar. 31, 2023 | 304,449,091 | 304,449,091 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Cenntro Automotive Europe GmbH [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Acquisition CAE's equity interests | 35.00% | 65.00% |
ORGANIZATION AND PRINCIPAL ACTIVITIES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES |
NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES
Historical and principal activities
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).
Cenntro Automotive Corporation (“CAC”) was incorporated in the state of Delaware on March 22, 2013. CAC became CAG Cayman’s wholly owned company on May 26, 2016.
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. (“CEG”) was incorporated in the state of Delaware by CAG Cayman on March 9, 2020.
Cenntro Electric Group Limited ACN 619 054 938, formerly known as Naked Brand Group Limited (“NBG”), was incorporated in Australia on May 11, 2017, and is the parent
company of Cenntro. NBG changed its name to Cenntro Electric Group Limited (“CEGL”) on December 30, 2021, in connection with the closing of the Combination.
CAC, CEG and CAG HK and its consolidated subsidiaries are collectively known as “Cenntro”; CEGL and Cenntro are collectively known as the “Company”. The Company
designs and manufactures purpose–built, electric commercial vehicles (“ECVs”) used primarily in last mile delivery and industrial applications.
On March 25, 2022 and January 31, 2023, the Company entered into Share Purchase Agreements to acquire 65% and 35% of the issued and outstanding shares in Cenntro
Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH. For information of the Share Purchase Agreements, see Note 3 of this Annual Report, “Business Combination”.
Reverse recapitalization
On December 30, 2021, the Company consummated a stock purchase transaction (the “Combination”) pursuant to that certain stock purchase agreement, dated as of November
5, 2021 (the “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEG and CAG HK, whereby CEGL purchased from CAG Cayman (i) all of the issued and outstanding ordinary shares of CAG HK, (ii) all of the issued and
outstanding shares of common stock, par value $0.001 per share, of CAC, and (iii) all of the issued and outstanding shares of common
stock, par value $0.01 per share, of CEG, in exchange for an aggregate purchase price of (i) 174,853,546 newly issuing ordinary shares of CEGL and (ii) the assumption of options to purchase an aggregate of 9,225,271 ordinary shares under the Cenntro Electric Group Limited Amended & Restated 2016 Incentive Stock Option Plan (the “Amended 2016 Plan”). The Combination closed on
December 30, 2021. Immediately prior to the consummation of the Combination, there were 86,402,708 ordinary shares of NBG issued and
outstanding. In connection with the closing of the Combination, CEGL changed its name from “Naked Brand Group Limited” to “Cenntro Electric Group Limited”.
Promptly following the closing of the Combination, CAG Cayman distributed the Acquisition Shares to the holders of its capital stock in accordance with (i) the
distribution described in the Acquisition Agreement and (ii) CAG Cayman’s Third Amended and Restated Memorandum and Articles of Association. Pursuant to the Acquisition Agreement, at the closing of the Combination, NBG assumed the Amended 2016 Plan
and each CAG Cayman employee stock option outstanding immediately prior to the closing of the Combination under the Amended 2016 Plan was converted into an option to purchase a number of ordinary shares equal to the aggregate number of CAG Cayman
shares for which such stock option was exercisable immediately prior to the closing of the Combination multiplied by the exchange ratio of 0.71536
(the “Exchange Ratio”), as determined in accordance with the Acquisition Agreement, at an option exercise price equal to the exercise price per share of such stock option immediately prior to the closing of the Combination divided by the Exchange
Ratio.
Cenntro was deemed to be the accounting acquirer given Cenntro effectively controlled the consolidated entity after the Combination. Under U.S. generally accepted
accounting principles, the Combination is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by Cenntro for the net monetary assets of CEGL, accompanied by a recapitalization. Cenntro is deemed to be the
predecessor for accounting purposes and the historical financial statements of Cenntro became CEGL’s historical financial statements, with retrospective adjustments to give effect to the reverse recapitalization. The financial statements for
periods prior to the consummation of the reverse recapitalization are the combined financial statements of CAC, CEG and CAG HK and its consolidated subsidiaries.
As of March 31, 2023, CEGL’s subsidiaries are as follows:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated
financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be
read in conjunction with the financial statements and the notes for the fiscal year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year or any
future periods.
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include provision for doubtful accounts, lower of cost and net
realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants.
Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.
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. Revenue is recognized at a point
in time once the Company has determined that the customer has obtained control over the product. Revenue is recognized net of return allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities.
Significant judgement is required to estimate return allowances. The Company reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the
amount of net revenues recognized.
Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate
performance obligations and recorded as sales and marketing expenses.
The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022:
The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location.
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, 2023 and 2022, the Company recognized $98,818 and $723,278 revenue that was
included in contractual liabilities as of December 31, 2022 and 2021, respectively.
The following table provides information about receivables and contractual liabilities from contracts with customers:
Except for the ASUs (“Accounting Standards Updates”) issued but not yet adopted disclosed in “Note 2 (z) Recent Accounting Standards” of the Company 2022 Form 10-K,
there is no ASU issued by the FASB that is expected to have a material impact on the Company’s consolidated results of operations or financial position.
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BUSINESS COMBINATION |
3 Months Ended |
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Mar. 31, 2023 | |
BUSINESS COMBINATION [Abstract] | |
BUSINESS COMBINATION |
NOTE 3 – BUSINESS COMBINATION
On March 5, 2022, the Company entered into a Share and Loan Purchase Agreement (the “Purchase Agreement I”) with Mosolf SE & Co. KG, a limited liability
partnership incorporated under the laws of Germany (“Seller” or “Mosolf” and, together with CEGL and CEG, the “Parties”), pursuant to which Mosolf agreed to sell to the Company (i) 65% of the issued and outstanding shares (the “TME Shares”) in Cenntro Automotive Europe GmbH, previously known as Tropos Motors Europe GmbH, a German limited liability company (“CAE”), and
(ii) 100% of the shareholder loan (the “Shareholder Loan”) which Mosolf previously provided to CAE (the “CAE Transaction”). CAE was one
of Cenntro’s private label channel partners and has been one of Cenntro’s largest customers since 2019.
The CAE Transaction closed on March 25, 2022. At closing of the CAE Transaction, the Company paid Mosolf EUR3,250,000 (or approximately USD$3.6 million) for the purchase of the TME Shares
and EUR11,900,000 (or approximately USD$13.0
million) for the purchase of the Shareholder Loan, for total aggregate consideration of EUR15,150,000 (or approximately USD$16.6 million). An aggregate of EUR3,000,000
(or approximately USD$3.3 million) of the purchase price is held in escrow to satisfy amounts payable to any of the buyer indemnified
parties in accordance with the terms of the Purchase Agreement I.
The transaction constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805. The Company is deemed to be
the accounting acquirer and the assets and liabilities of CAE are recorded at the fair value as of the date of the closing.
On December 13, 2022, the Company entered into another Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf, pursuant to which Mosolf agreed to sell to
the Company its remaining 35% of the issued and outstanding shares in CAE in exchange for a purchase price of EUR1,750,000 (or approximately USD$1.86
million) (the “Transaction”). The Transaction was closed on January 31, 2023, as a result, CAE became a wholly-owned subsidiary of the Company. This transaction was accounted for as equity transactions, no gain or loss was recognized in
consolidated statement of operations. The difference between the fair value of the consideration paid and the amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company.
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ACCOUNTS RECEIVABLE, NET |
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ACCOUNTS RECEIVABLE, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE, NET |
NOTE 4 - ACCOUNTS RECEIVABLE, NET
Accounts receivable, net is summarized as follows:
The changes in the provision for doubtful accounts are as follows:
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INVENTORIES |
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INVENTORIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES |
NOTE 5 - INVENTORIES
Inventories are summarized as follows:
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PREPAYMENT AND OTHER CURRENT ASSETS |
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PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAYMENT AND OTHER CURRENT ASSETS |
NOTE 6 - PREPAYMENT AND OTHER CURRENT
ASSETS
Prepayment and other current assets consisted of the following:
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LONG-TERM INVESTMENT, NET |
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LONG-TERM INVESTMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENT, NET |
NOTE 7 – LONG-TERM INVESTMENT, NET
Equity method investments, net
The Company had the following equity method investments:
Equity investment without readily determinable fair value
The Company had the following equity investment without readily determinable fair value:
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INVESTMENT IN EQUITY SECURITIES |
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INVESTMENT IN EQUITY SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||
INVESTMENT IN EQUITY SECURITIES |
NOTE 8 – INVESTMENT IN EQUITY SECURITIES
As of March 31, 2023, the balance consisted of the following two equity investments:
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PROPERTY, PLANT AND EQUIPMENT, NET |
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PROPERTY, PLANT AND EQUIPMENT, NET |
NOTE 9 –PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consisted of the following:
Depreciation expenses for the three months ended March 31, 2023 and 2022 were $305,262 and $137,104, respectively.
Impairment loss for the three months ended March 31, 2023 and 2022 were $24,369
and
, respectively. |
INCOME TAXES |
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INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
NOTE 10 - INCOME TAXES
Australia
CEGL is subject to a tax rate of 30%.
United States
U.S. subsidiaries CEG, Cennatic Power Inc. and CAC are subject to a federal tax rate of 21%.
Germany
CAE and Cenntro Electric is subject to a tax rate of 30%.
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. CEG’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 CEG 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%. Zhejiang Tooniu Tech Co., Ltd, Hangzhou Hengzhong Tech Co., Ltd and. Zhejiang Xbean Tech Co., Ltd qualify as Small and micro enterprises in the PRC, and are entitled to
pay a reduced income tax rate of 2.5%, 2.5%
and 5% in 2022 and 2023.
Income tax expenses for the three months ended March 31, 2023 and 2022 are
.The components of losses before income taxes are summarized as follows:
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
NOTE 11 - 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 recognized in the Company’s consolidated statements of operations and comprehensive loss is as follows:
A summary of supplemental information related to operating leases is as follows:
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 summarizes the maturity of lease liabilities under operating leases as of March 31, 2023:
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CONVERTIBLE PROMISSORY NOTE AND WARRANT |
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CONVERTIBLE PROMISSORY NOTE AND WARRANT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE PROMISSORY NOTE AND WARRANT |
NOTE 12 - 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. 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 ordinary shares 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 US$25,000,000 in gross proceeds, the holder shall have the right to (i) require the Company to first use up to 10%
of the gross proceeds of such subsequent financing if the aggregate outstanding principal amount of the Note is in excess of US$30,000,000
and (ii) require the Company to first use up to 20% of the gross proceeds of such subsequent financing if the outstanding principal
amount of the Note is US$30,000,000 or less to redeem all or a portion of this Note for an amount in cash equal to the Mandatory
Redemption Amount equal to 1.08 multiplied by the sum of principal amount subject to the mandatory redemption, plus accrued but unpaid
interest, plus liquidated damages, if any, and any other amounts.
In addition, if the closing price of the ordinary shares on the principal trading market is below the floor price of $1.00 per share for a period of ten consecutive trading days, the
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 ordinary shares 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 expense in the consolidated statement of operations, change in fair value of convertible notes.
The movement of Note during the three months ended March 31, 2023 are as follows:
The estimated fair value of the Note upon issuance date December 31, 2022 and as of March 31, 2023 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.
We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model:
Warrant
Accompany with the Note, the Company issued to the same investor warrants to purchase up to 24,733,336 ordinary shares of the Company, with an exercise price of $1.61
per share, which may be exercised by the holders on a cashless basis by using Black-Scholes model to determine the net settlement shares.
Additionally, after the Company completed the above Note financing, the Company issued to the placement agent warrants to purchase 2,473,334 ordinary shares of the Company at a same day, as part of the underwriter’s commission. 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 consolidated balance sheet at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”. The liabilities then,
will be remeasured every reporting period with any change to fair value recorded as other income (expense) in the consolidated statement of operations.
The movement of warrants during the three months ended March 31, 2023 are as follows:
The fair value for these two warrants were computed
using the Binomial model with the following assumptions:
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CONCENTRATIONS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONCENTRATIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONCENTRATIONS |
NOTE 13- CONCENTRATIONS
The following table sets forth information as to each customer that accounted for 10% or more of net revenue for the three months ended March 31, 2023 and 2022.
The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable as of March 31, 2023 and December 31,
2022.
For the three months ended March 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows:
The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of March 31, 2023 and December 31, 2022.
|
COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 14 - 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.
In October 2021, Sevic Systems SE (“Sevic”), a former channel partner,
commenced a lawsuit against Shengzhou Machinery, one of Cenntro’s wholly owned subsidiaries, relating to a contract for the sale of goods (the “Sevic Lawsuit”). Sevic filed its complaint with the People’s Court of Keqiao District, Shaoxing City,
Light Textile City (the “People’s Court”). In the Sevic Lawsuit, Sevic alleges that the Shengzhou Machinery provided it with certain unmarketable goods and requests that the People’s Court (i) terminate two signed purchase orders under its contract with Shengzhou Machinery and (ii) award Sevic money damages for the cost of goods of $465,400, as well as interest and incidental losses, including freight and storage costs, for total damages of approximately $628,109.The Company does not believe that Sevic’s claims have any merit and intends to vigorously defend against such claims.
On March 25, 2022, Shengzhou Hengzhong Machinery Co., Ltd. (“Shengzhou”), an affiliate of Cenntro Automotive Corporation, filed a demand for arbitration against Tropos
Technologies, Inc., an unrelated entity, with the American Arbitration Association (“AAA”), asserting claims for breach of contract and unjust enrichment. Shengzhou is seeking payment of $1,126,640 (exclusive of interest, costs, and attorneys’ fees) for outstanding invoices owed by Tropos Technologies, Inc. to Shengzhou. As of the date of, Tropos Technologies, Inc. has not yet
formally responded to the demand. On February 16, 2023, AAA appointed an arbitrator and both parties are waiting for further proceedings under the arbitration process. On April 25, 2023, Tropos Technologies, Inc. filed a motion to dismiss the
arbitration demand. On May 23, 2023, Shengzhou filed a response in opposition to the motion to dismiss the arbitration demand. As of the date of this report, the parties are awaiting further proceedings under the arbitration process.
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 was
alleged to infringe 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 and intends to appeal it, however, the Company has accrued the related liability according to the judgement made.
On July 22, 2022, Xiongjian Chen (the “Plaintiff”) filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro
Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey. The complaint alleges eleven causes of action sounding in contract and tort
against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG. With respect to the four contract claims, Plaintiff alleges breach of contract claims pertaining to an employment
agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL. With respect to the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of
Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages
(including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants
moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal
jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May
28, 2023, Plaintiff filed an amended complaint. On July 20, 2023 the Defendants filed a motion seeking the dismissal of that amended complaint.
|
RELATED PARTY TRANSACTIONS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS |
NOTE 15 - RELATED PARTY TRANSACTIONS
The table below sets forth the major related parties and their relationships with the Company:
Related party transactions
During the three months ended March 31, 2023 and 2022, the Company had the following material related party transactions.
Amounts due from Related Parties
The following table presents amounts due from related parties as of March 31, 2023 and December 31, 2022.
Amounts due to Related Parties
The following table presents amounts due to related parties as of March 31, 2023 and December 31, 2022.
|
SUBSEQUENT EVENT |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT |
NOTE 16 - SUBSEQUENT EVENT
On April 26, 2023, $6,000,000 of convertible promissory
notes were redeemed by the investors.
On April 20, 2023, Zhejiang Cenntro Machinery Co., Ltd. has entered an agreement with Changxing County Bureau of Natural Resources and Planning to purchase its land
use right, with an area of 12,206 square meters with a useful life of 50 years and the total consideration of RMB1,530,000 (approximately $222,626).
CAC has entered into a lease agreement with BAL Freeway Associates, LLC, a California limited liability company, for its approximate 64,000 square foot portion of a larger 124,850
square foot industrial building located within the Rancon Centre Ontario. The lease term is for five years, starting from April 1, 2023,
and ending on March 31, 2028. The monthly rent is $115,200.
CAC has entered into a lease agreement with Sabatino Abogados S.A.S. for its 2,469.27 square meters warehouse located in Columbia. The lease term starts from May 1, 2023 and ends on April 30, 2025. The monthly rent is COP39,324,371 (approximately $9,602).
On June 21, 2022, CAC entered an agreement with Sabatino Abogados S.A.S to acquire lots No. 59, 60, 61 and 62 in Free Trade Zone Zofia, with total area of 7,931.44 square meters and total consideration of COP 4,362,292,000
(approximately $1,063,271). On April 27, 2023, the public deeds of purchase of lots No. 59, 60, 61 and 62 located in the Zofia Free Trade
Zone were signed. On June 23 and June 28, 2023, the certificates of Lot 59 and Lot 61 were registered.
Zhejiang Cenntro Machinery Co., Ltd. signed a series of contracts with Huzhou Linhai Construction Co., Ltd. of renovation of its factory, with the total contracts
amount of RMB16,132,000 (approximately $2,349,001).
Subsequently through the date of issuance of the condensed consolidated financial statements, RMB14,093,080 (approximately $2,052,111) has been paid to the constructor.
The Company has evaluated subsequent events through the date of issuance of the condensed consolidated financial statements, except for the events mentioned above,
there were no other subsequent events with material financial impact on the condensed consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation |
The accompanying consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated
financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be
read in conjunction with the financial statements and the notes for the fiscal year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year or any
future periods.
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Use of estimates |
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include provision for doubtful accounts, lower of cost and net
realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants.
Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.
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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. Revenue is recognized at a point
in time once the Company has determined that the customer has obtained control over the product. Revenue is recognized net of return allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities.
Significant judgement is required to estimate return allowances. The Company reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the
amount of net revenues recognized.
Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate
performance obligations and recorded as sales and marketing expenses.
The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022:
The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location.
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, 2023 and 2022, the Company recognized $98,818 and $723,278 revenue that was
included in contractual liabilities as of December 31, 2022 and 2021, respectively.
The following table provides information about receivables and contractual liabilities from contracts with customers:
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Recently issued accounting standards pronouncements |
Except for the ASUs (“Accounting Standards Updates”) issued but not yet adopted disclosed in “Note 2 (z) Recent Accounting Standards” of the Company 2022 Form 10-K,
there is no ASU issued by the FASB that is expected to have a material impact on the Company’s consolidated results of operations or financial position.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Subsidiaries of Company |
As of March 31, 2023, CEGL’s subsidiaries are as follows:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue |
The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022:
The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location.
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Receivables and Contractual Liabilities from Contracts with Customers |
The following table provides information about receivables and contractual liabilities from contracts with customers:
|
ACCOUNTS RECEIVABLE, NET (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable |
Accounts receivable, net is summarized as follows:
The changes in the provision for doubtful accounts are as follows:
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INVENTORIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Inventories are summarized as follows:
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PREPAYMENT AND OTHER CURRENT ASSETS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepayment and Other Current Assets |
Prepayment and other current assets consisted of the following:
|
LONG-TERM INVESTMENT, NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investment |
The Company had the following equity method investments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Investment without Readily Determinable Fair Value |
The Company had the following equity investment without readily determinable fair value:
|
INVESTMENT IN EQUITY SECURITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
INVESTMENT IN EQUITY SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||
Investments in Equity Securities |
As of March 31, 2023, the balance consisted of the following two equity investments:
|
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net |
Property, plant and equipment, net consisted of the following:
|
INCOME TAXES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Losses Before Income Taxes |
The components of losses before income taxes are summarized as follows:
|
LEASES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lease Cost |
A summary of lease cost recognized in the Company’s consolidated statements of operations and comprehensive loss is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Supplemental Information Related to Operating Leases |
A summary of supplemental information related to operating leases is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Maturity of Lease Liabilities Under Operating Leases |
The following table summarizes the maturity of lease liabilities under operating leases as of March 31, 2023:
|
CONVERTIBLE PROMISSORY NOTE AND WARRANT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Movement of Note |
The movement of Note during the three months ended March 31, 2023 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Movement of Warrants |
The movement of warrants during the three months ended March 31, 2023 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assumptions |
The fair value for these two warrants were computed
using the Binomial model with the following assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assumptions |
We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model:
|
CONCENTRATIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONCENTRATIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer and Purchase Concentration Risks |
The following table sets forth information as to each customer that accounted for 10% or more of net revenue for the three months ended March 31, 2023 and 2022.
The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable as of March 31, 2023 and December 31,
2022.
For the three months ended March 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows:
The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of March 31, 2023 and December 31, 2022.
|
RELATED PARTY TRANSACTIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions and Balances |
The table below sets forth the major related parties and their relationships with the Company:
Related party transactions
During the three months ended March 31, 2023 and 2022, the Company had the following material related party transactions.
Amounts due from Related Parties
The following table presents amounts due from related parties as of March 31, 2023 and December 31, 2022.
Amounts due to Related Parties
The following table presents amounts due to related parties as of March 31, 2023 and December 31, 2022.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES, Historical and Principal Activities (Details) |
Jan. 31, 2023 |
Mar. 25, 2022 |
---|---|---|
Cenntro Automotive Europe GmbH (CAE) [Member] | Tropos Motors Europe GmbH [Member] | ||
Historical and Principal Activities [Abstract] | ||
Percentage of issued and outstanding shares acquired | 35.00% | 65.00% |
ORGANIZATION AND PRINCIPAL ACTIVITIES, Reverse, Recapitalization (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
$ / shares
shares
|
Dec. 31, 2022
shares
|
|
Reverse Recapitalization [Abstract] | ||
Shares issued (in shares) | 174,853,546 | |
Ordinary shares issued (in shares) | 304,449,091 | 300,841,995 |
Ordinary shares outstanding (in shares) | 304,449,091 | 300,841,995 |
Amended 2016 Plan [Member] | ||
Reverse Recapitalization [Abstract] | ||
Ordinary shares, option to purchase (in shares) | 9,225,271 | |
Exchange ratio | 0.71536 | |
CAC [Member] | ||
Reverse Recapitalization [Abstract] | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
CEG [Member] | ||
Reverse Recapitalization [Abstract] | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |
NBG [Member] | ||
Reverse Recapitalization [Abstract] | ||
Ordinary shares issued (in shares) | 86,402,708 | |
Ordinary shares outstanding (in shares) | 86,402,708 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Disaggregated Revenue Information [Abstract] | |||
Revenue | $ 3,470,544 | $ 1,830,633 | |
Contract with Customer, Liability, Revenue Recognized | 98,818 | 723,278 | |
Receivables and Contractual Liabilities from Contracts with Customers [Abstract] | |||
Accounts receivable, net | 2,732,834 | $ 565,398 | |
Contractual liabilities | 2,656,151 | $ 2,388,480 | |
Europe [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 3,061,998 | 617,601 | |
Asia [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 276,500 | 795,549 | |
America [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 32,046 | 417,483 | |
Vehicles Sales [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 2,840,963 | 1,718,371 | |
Spare-Parts Sales [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 598,036 | 101,424 | |
Other Service Income [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | $ 31,545 | $ 10,838 |
BUSINESS COMBINATION (Details) - Mosolf SE & Co [Member] $ in Thousands |
Dec. 13, 2022
EUR (€)
|
Dec. 13, 2022
USD ($)
|
Mar. 25, 2022
EUR (€)
|
Mar. 25, 2022
USD ($)
|
Mar. 05, 2022 |
---|---|---|---|---|---|
Acquisition [Abstract] | |||||
Purchase consideration of stock acquired | € 1,750,000 | $ 1,860 | |||
Tropos Motors Europe GmbH [Member] | |||||
Acquisition [Abstract] | |||||
Percentage of issued and outstanding shares acquired | 35.00% | 35.00% | 65.00% | ||
Purchase consideration of stock acquired | € 3,250,000 | $ 3,600 | |||
Consideration of acquisition | 15,150,000 | 16,600 | |||
Shareholder Loan [Member] | |||||
Acquisition [Abstract] | |||||
Percentage of shareholder loan acquired | 100.00% | ||||
Purchase consideration of stock acquired | 11,900,000 | 13,000 | |||
Purchase price is held in escrow account | € 3,000,000 | $ 3,300 |
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Accounts Receivable [Abstract] | |||
Accounts receivable | $ 4,686,735 | $ 2,526,432 | |
Less: provision for doubtful accounts | (1,953,901) | (1,961,034) | |
Accounts receivable, net | 2,732,834 | $ 565,398 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,961,034 | $ 1,475,983 | |
Additions | 0 | 0 | |
Write-off | (11,402) | 0 | |
Foreign exchange | 4,269 | 6,362 | |
Balance at the end of the period | $ 1,953,901 | $ 1,482,345 |
INVENTORIES (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
INVENTORIES [Abstract] | ||
Raw material | $ 8,102,206 | $ 9,311,419 |
Work-in-progress | 578,233 | 290,220 |
Goods in transit | 3,073,933 | 2,364,136 |
Finished goods | 24,792,545 | 19,877,596 |
Inventories | $ 36,546,917 | $ 31,843,371 |
PREPAYMENT AND OTHER CURRENT ASSETS (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||
Advance to suppliers | $ 9,708,922 | $ 9,877,337 |
Deductible input value added tax | 4,376,571 | 4,097,162 |
Receivable from third parties | 681,813 | 678,887 |
Loans to a third party | 100,000 | 1,044,181 |
Others | 729,458 | 440,763 |
Prepayment and other current assets | $ 15,596,764 | $ 16,138,330 |
LONG-TERM INVESTMENT, NET, Equity Method Investments, Net (Details) |
3 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 16, 2022
USD ($)
|
Dec. 16, 2022
EUR (€)
|
Sep. 25, 2022
USD ($)
|
Sep. 25, 2022
CNY (¥)
|
Mar. 22, 2022
USD ($)
|
Mar. 22, 2022
EUR (€)
|
Jun. 23, 2021
USD ($)
|
Jun. 23, 2021
CNY (¥)
|
|||||||||||
Equity Method Investment [Abstract] | |||||||||||||||||||||
Equity method investment | $ 4,239,512 | $ 5,325,741 | |||||||||||||||||||
Impairment on investment | 1,146,128 | $ 0 | |||||||||||||||||||
Antric GmbH [Member] | |||||||||||||||||||||
Equity Method Investment [Abstract] | |||||||||||||||||||||
Equity method investment | 1,556,672 | [1] | 2,674,500 | [1] | $ 2,718,000 | € 2,500,000 | |||||||||||||||
Percentage of ownership interest, equity method investment | 25.00% | 25.00% | |||||||||||||||||||
Impairment on investment | 1,146,128 | ||||||||||||||||||||
Percentage of voting interests | 25.00% | 25.00% | |||||||||||||||||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) [Member] | |||||||||||||||||||||
Equity Method Investment [Abstract] | |||||||||||||||||||||
Equity method investment | 2,199,016 | [2] | 2,189,570 | [2] | $ 2,242,414 | ¥ 15,400,000 | |||||||||||||||
Percentage of ownership interest, equity method investment | 99.355% | 99.355% | |||||||||||||||||||
Percentage of voting interests | 50.00% | 50.00% | |||||||||||||||||||
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | |||||||||||||||||||||
Equity Method Investment [Abstract] | |||||||||||||||||||||
Equity method investment | 391,088 | [3] | 367,272 | [3] | $ 291,223 | ¥ 2,000,000 | |||||||||||||||
Percentage of ownership interest, equity method investment | 20.00% | 20.00% | |||||||||||||||||||
Percentage of voting interests | 33.00% | 33.00% | |||||||||||||||||||
Able 2rent GmbH [Member] | |||||||||||||||||||||
Equity Method Investment [Abstract] | |||||||||||||||||||||
Equity method investment | $ 92,736 | [4] | $ 94,399 | [4] | $ 108,720 | € 100,000 | |||||||||||||||
Percentage of ownership interest, equity method investment | 50.00% | 50.00% | |||||||||||||||||||
|
LONG-TERM INVESTMENT, NET, Equity Investment Without Readily Determinable Fair Value (Details) - USD ($) |
Jan. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
||
---|---|---|---|---|---|
Equity Investment without Readily Determinable Fair Value [Abstract] | |||||
Equity investment without readily determinable fair value | $ 1,000,000 | $ 0 | |||
Loan principal converted | $ 1,000,000 | ||||
Shares in debt conversion (in shares) | 571,930 | ||||
Percentage of equity interest | 3.59% | ||||
HW Electro Co., Ltd. [Member] | |||||
Equity Investment without Readily Determinable Fair Value [Abstract] | |||||
Equity investment without readily determinable fair value | [1] | $ 1,000,000 | $ 0 | ||
|
INVESTMENT IN EQUITY SECURITIES (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Investment Income, Net [Abstract] | ||
Investment in equity securities | $ 30,412,211 | $ 29,759,195 |
Investment on Partnership Shares [Member] | ||
Investment Income, Net [Abstract] | ||
Investment in equity securities | 25,275,956 | 25,019,244 |
Investment on Participating Shares [Member] | ||
Investment Income, Net [Abstract] | ||
Investment in equity securities | $ 5,136,255 | $ 4,739,951 |
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
At Cost [Abstract] | |||
Property, plant and equipment, gross | $ 20,983,540 | $ 18,368,453 | |
Less: accumulated depreciation | (3,718,094) | (3,405,862) | |
Construction in progress | 132,808 | 0 | |
Property, plant and equipment, net | 17,265,446 | 14,962,591 | |
Depreciation expenses | 305,262 | $ 137,104 | |
Impairment loss | (24,369) | $ 0 | |
Plant and Building [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 11,502,851 | 11,453,436 | |
Machinery and Equipment [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 3,248,410 | 2,413,087 | |
Leasehold Improvement [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 4,442,928 | 2,956,515 | |
Office Equipment [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 1,366,669 | 1,192,443 | |
Motor Vehicles [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | $ 422,682 | $ 352,972 |
INCOME TAXES, Federal Tax Rate (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Zhejiang Tooniu Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 2.50% |
Hangzhou Hengzhong Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 2.50% |
Zhejiang Xbean Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 5.00% |
Australia [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 30.00% |
United States [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 21.00% |
Germany [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 30.00% |
Hong Kong [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate for below HK$2.0 million | 8.25% |
Federal tax rate for above HK$2.0 million | 16.50% |
PRC [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 25.00% |
INCOME TAXES, Components of Losses Before Income Taxes (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
INCOME TAXES [Abstract] | ||
Income tax expenses | $ 0 | $ 0 |
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (11,113,977) | (9,348,369) |
PRC [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (1,778,180) | (1,712,432) |
US [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (3,554,955) | (3,122,402) |
Europe [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (2,904,320) | (44,753) |
Australia [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (2,606,972) | (4,468,782) |
Others [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | $ (269,550) | $ 0 |
LEASES (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Lease Cost [Abstract] | |||
Operating leases cost excluding short-term rental expense | $ 671,313 | $ 238,569 | |
Short-term lease cost | 268,721 | 58,096 | |
Total | 940,034 | 296,665 | |
Supplemental Information Related to Operating Leases [Abstract] | |||
Cash paid for amounts included in the measurement of lease liabilities | $ 671,109 | $ 112,669 | |
Weighted average remaining lease term | 7 years 3 months 3 days | 1 year 9 months 10 days | |
Weighted average discount rate | 5.41% | 4.08% | |
Maturity of Lease Liabilities [Abstract] | |||
For the remaining of 2023 | $ 2,156,895 | ||
2024 | 2,845,452 | ||
2025 | 2,068,015 | ||
2026 | 2,126,623 | ||
2027 | 2,191,533 | ||
2028 and thereafter | 6,171,223 | ||
Total lease payments | 17,559,741 | ||
Less: imputed interest | 3,139,963 | ||
Total | 14,419,778 | ||
Less: current portion | $ 2,779,279 | $ 1,313,334 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Less: current portion | ||
Non-current portion | $ 11,640,499 | $ 7,421,582 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Non-current portion |
CONVERTIBLE PROMISSORY NOTE AND WARRANT, Convertible Promissory Note (Details) |
3 Months Ended | |||
---|---|---|---|---|
Jul. 20, 2022
USD ($)
|
Mar. 31, 2023
USD ($)
TradingDays
$ / shares
|
Mar. 31, 2022 |
Dec. 31, 2022
USD ($)
|
|
Movement of Note [Abstract] | ||||
Convertible promissory notes, Beginning Balance | $ 57,372,827 | |||
Convertible promissory notes, Ending Balance | $ 17,903,274 | |||
Convertible Promissory Note [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Net proceeds after deducting issuance expenses | $ 54,069,000 | |||
Mandatory redemption amount multiplier | 1.08 | |||
Number of consecutive trading days | TradingDays | 10 | |||
Conversion price percentage | 85.00% | |||
Period for volume weighted average price | 10 days | |||
Period considered after occurrence of any event of default | 5 days | |||
Movement of Note [Abstract] | ||||
Convertible promissory notes, Beginning Balance | $ 57,372,827 | |||
Convertible promissory notes issued during the year | 0 | |||
Redemption of convertible promissory notes | (39,581,320) | |||
Fair value change recognized | 111,767 | |||
Convertible promissory notes, Ending Balance | 17,903,274 | |||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Face value principal payable | $ 61,215,000 | $ 17,904,179 | $ 57,488,000 | |
Interest rate | 8.00% | 8.00% | 8.00% | |
Issue date | Jul. 20, 2022 | Jul. 20, 2022 | ||
Maturity date | Jul. 19, 2023 | Jul. 19, 2023 | ||
Convertible Promissory Note [Member] | Minimum [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Face value principal payable | $ 25,000,000 | |||
Convertible Promissory Note [Member] | Maximum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Floor price (in dollars per share) | $ / shares | $ 1 | |||
Accrue interest rate | 10.00% | |||
Convertible Promissory Note [Member] | Original Conversion Price [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 1.2375 | 1.2375 | ||
Convertible Promissory Note [Member] | Expected Term [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.3 | 0.55 | ||
Convertible Promissory Note [Member] | Volatility [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.6154 | 0.7513 | ||
Convertible Promissory Note [Member] | Market yield [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.2512 | 0.1802 | ||
Convertible Promissory Note [Member] | Risk Free Rate [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.0448 | 0.0469 | ||
Convertible Promissory Note [Member] | Period One [Member] | Minimum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Aggregate outstanding principal amount | $ 30,000,000 | |||
Convertible Promissory Note [Member] | Period One [Member] | Maximum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Percentage of issuance cost on principal amount | 10.00% | |||
Convertible Promissory Note [Member] | Period Two [Member] | Maximum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Percentage of issuance cost on principal amount | 20.00% | |||
Aggregate outstanding principal amount | $ 30,000,000 |
CONVERTIBLE PROMISSORY NOTE AND WARRANT, Warrant (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
Warrant
$ / shares
shares
|
Dec. 31, 2022 |
|
Warrant [Abstract] | ||
Issued warrants (in shares) | shares | 24,733,336 | |
Exercise price (in dollars per share) | $ / shares | $ 1.61 | |
Warrants exercisable issuance term | 5 years | |
Number of warrants | Warrant | 2 | |
Investor Warrants [Member] | ||
Movement of Warrants [Roll Forward] | ||
Beginning balance | $ 14,334,104 | |
Warrants issued during the year | 0 | |
Exercise of warrants | (1,955,315) | |
Fair value change recognized | 13,843 | |
Ending balance | $ 12,392,632 | |
Placement Agent Warrants [Member] | ||
Warrant [Abstract] | ||
Issued warrants (in shares) | shares | 2,473,334 | |
Exercise price (in dollars per share) | $ / shares | $ 1.77 | |
Movement of Warrants [Roll Forward] | ||
Beginning balance | $ 3,456,404 | |
Warrants issued during the year | 0 | |
Exercise of warrants | 0 | |
Fair value change recognized | 663 | |
Ending balance | $ 3,457,067 | |
Expected Term [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 4.3 | 4.55 |
Volatility [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.7599 | 0.7772 |
Risk Free Rate [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.0361 | 0.0413 |
CONCENTRATIONS (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 3,470,544 | $ 1,830,633 | |||||
Accounts receivable | 4,686,735 | $ 2,526,432 | |||||
Purchases | 3,275,800 | 1,467,603 | |||||
Accounts payable | 2,899,119 | $ 3,383,021 | |||||
Revenue [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 440,085 | $ 1,450,937 | |||||
Concentration risk, percentage | 10.00% | 69.00% | |||||
Revenue [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 339,874 | $ 0 | |||||
Concentration risk, percentage | 10.00% | 0.00% | |||||
Revenue [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 100,211 | $ 291,780 | |||||
Concentration risk, percentage | [1] | 16.00% | |||||
Revenue [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 0 | $ 550,954 | |||||
Concentration risk, percentage | 0.00% | 30.00% | |||||
Revenue [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Revenue | $ 0 | $ 415,558 | |||||
Concentration risk, percentage | 0.00% | 23.00% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 46.00% | 79.00% | |||||
Accounts receivable | $ 1,730,903 | $ 2,015,042 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | [1] | 16.00% | |||||
Accounts receivable | $ 397,064 | $ 395,360 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | [1] | 16.00% | |||||
Accounts receivable | $ 392,094 | $ 410,321 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 26.00% | 47.00% | |||||
Accounts receivable | $ 1,216,491 | $ 1,197,023 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer G [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 20.00% | [1] | |||||
Accounts receivable | $ 941,745 | $ 12,338 | |||||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 56.00% | 50.00% | |||||
Purchases | $ 4,846,609 | $ 2,975,299 | |||||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 56.00% | 0.00% | |||||
Purchases | $ 4,844,671 | $ 0 | |||||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | [1] | 50.00% | |||||
Purchases | $ 1,938 | $ 2,975,299 | |||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 38.00% | 29.00% | |||||
Accounts receivable | $ 1,114,719 | $ 997,721 | |||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 14.00% | 12.00% | |||||
Accounts receivable | $ 422,191 | $ 420,100 | |||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier C [Member] | |||||||
Concentration of Credit Risk [Abstract] | |||||||
Concentration risk, percentage | 24.00% | 17.00% | |||||
Accounts payable | $ 692,528 | $ 577,621 | |||||
|
COMMITMENTS AND CONTINGENCIES (Details) |
1 Months Ended | ||||
---|---|---|---|---|---|
Jul. 22, 2022
USD ($)
|
Mar. 25, 2022
USD ($)
|
Oct. 31, 2021
USD ($)
PurchaseOrder
|
Feb. 02, 2023
EUR (€)
|
Jun. 30, 2022
DistributionPartners
|
|
Litigation [Abstract] | |||||
Total damages | $ | $ 19,000,000 | ||||
BELGIUM | |||||
Litigation [Abstract] | |||||
Penalty amount | € | € 20,000 | ||||
Other infringement fine | € | 5,000 | ||||
Shengzhou [Member] | |||||
Litigation [Abstract] | |||||
Payment for outstanding invoices | $ | $ 1,126,640 | ||||
LEIE [Member] | BELGIUM | Maximum [Member] | |||||
Litigation [Abstract] | |||||
Penalty amount | € | 500,000 | ||||
CAE [Member] | |||||
Litigation [Abstract] | |||||
Number of distribution partners | DistributionPartners | 2 | ||||
CAE [Member] | BELGIUM | Maximum [Member] | |||||
Litigation [Abstract] | |||||
Penalty amount | € | € 1,000,000 | ||||
Sevic Lawsuit [Member] | Damages from Product Defects [Member] | |||||
Litigation [Abstract] | |||||
Number of signed purchase orders terminated | PurchaseOrder | 2 | ||||
Money awarded for cost of goods awarded | $ | $ 465,400 | ||||
Total damages | $ | $ 628,109 |
RELATED PARTY TRANSACTIONS, Related Parties (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Mr. Yeung Heung Yeung [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | A principal shareholder of the Company |
Zhejiang RAP [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Jiangsu Rongyuan [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Shenzhen Yuanzheng Investment Development Co. Ltd ("Shenzhen Yuanzheng") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Controlled by Mr. Yeung Heung Yeung |
Shanghai Hengyu Enterprise Management Consulting Co., Ltd ("Shanghai Hengyu") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Ultimately controlled by Mr. Peter Wang |
Antric GmbH [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Invested by the Company |
RELATED PARTY TRANSACTIONS, Transactions (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | ||
Material Related Party Transactions [Abstract] | ||
Purchase of raw materials from related parties | $ 79,773 | $ 480,672 |
Payment on the purchase of the raw materials | 54,516 | 497,194 |
Shenzhen Yuanzheng [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | 0 | 419,276 |
Mr. Yeung Heung Yeung [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | $ 0 | $ 209,693 |
RELATED PARTY TRANSACTIONS, Due from Related Parties (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
||
---|---|---|---|---|
Related Party Transaction [Line Items] | ||||
Amounts due from related parties | $ 343,353 | $ 366,936 | ||
Hangzhou Hezhe [Member] | ||||
Related Party Transaction [Line Items] | ||||
Amounts due from related parties | [1] | $ 343,353 | $ 366,936 | |
|
RELATED PARTY TRANSACTIONS, Due to Related Parties (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Related Party Transaction [Line Items] | ||
Amounts due to related parties | $ 46,900 | $ 716,372 |
Zhejiang RAP [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 20,694 | 23,882 |
Jiangsu Rongyuan [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 23,294 | 23,194 |
Shanghai Hengyu [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 2,912 | 2,900 |
Antric GmbH [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | $ 0 | $ 666,396 |
SUBSEQUENT EVENT (Details) |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
May 01, 2023
USD ($)
m²
|
May 01, 2023
COP ($)
m²
|
Apr. 26, 2023
USD ($)
|
Apr. 20, 2023
USD ($)
m²
|
Apr. 20, 2023
CNY (¥)
m²
|
Apr. 01, 2023
USD ($)
ft²
|
Jun. 21, 2022
USD ($)
m²
|
Jun. 21, 2022
COP ($)
m²
|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
|
|
Subsequent Event [Abstract] | ||||||||||
Area of Land | m² | 7,931.44 | 7,931.44 | ||||||||
Assets acquired | $ 1,063,271 | $ 4,362,292,000 | ||||||||
Contract amount paid to constructor | $ | $ 2,577,292 | $ 82,799 | ||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of leased-out portion of land | 2,469.27 | 2,469.27 | 64,000 | |||||||
Lease term | 5 years | |||||||||
Monthly rent | $ 9,602 | $ 39,324,371 | $ 115,200 | |||||||
Contract amount | $ 2,349,001 | ¥ 16,132,000 | ||||||||
Contract amount paid to constructor | $ 2,052,111 | ¥ 14,093,080 | ||||||||
Subsequent Event [Member] | Industrial Building Facility [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of leased-out portion of land | ft² | 124,850 | |||||||||
Subsequent Event [Member] | Land Use Right [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of Land | m² | 12,206 | 12,206 | ||||||||
Useful life | 50 years | 50 years | ||||||||
Assets acquired | $ 222,626 | ¥ 1,530,000 | ||||||||
Subsequent Event [Member] | Investor [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Redemption of convertible promissory notes | $ | $ 6,000,000 |
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