☒ | 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 |
CENNTRO ELECTRIC GROUP LIMITED |
(Exact name of registrant as specified in its charter) |
Australia | N/A | |
(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: | |
Ordinary Shares | CENN | The Nasdaq Capital Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
Emerging growth company | ☒ |
1 | |
1 | |
39 | |
39 | |
● | 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 June 30, | For the Six Months Ended June 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
Note | 2023 | 2022 | 2023 | 2022 | Note | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Net revenues | 2(c) | $ | 4,237,520 | $ | 3,204,689 | $ | 7,708,064 | $ | 5,035,322 | 2(c) | $ | 5,762,831 | $ | 2,096,590 | $ | 13,470,895 | $ | 7,131,912 | ||||||||||||||||||||||
Cost of goods sold | (3,090,275 | ) | (3,036,237 | ) | (6,366,075 | ) | (4,503,840 | ) | (5,045,364 | ) | (2,730,920 | ) | (11,411,439 | ) | (7,234,760 | ) | ||||||||||||||||||||||||
Gross profit | 1,147,245 | 168,452 | 1,341,989 | 531,482 | 717,467 | (634,330 | ) | 2,059,456 | (102,848 | ) | ||||||||||||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||||||||||||||||||
Selling and marketing expenses | (2,742,749 | ) | (1,531,460 | ) | (4,611,734 | ) | (2,626,568 | ) | (2,626,829 | ) | (1,633,340 | ) | (7,238,563 | ) | (4,259,908 | ) | ||||||||||||||||||||||||
General and administrative expenses | (9,285,213 | ) | (12,014,453 | ) | (16,643,477 | ) | (20,226,284 | ) | (9,071,910 | ) | (6,220,227 | ) | (25,715,387 | ) | (26,446,511 | ) | ||||||||||||||||||||||||
Research and development expenses | (2,143,070 | ) | (1,389,153 | ) | (3,712,989 | ) | (1,814,512 | ) | (1,634,796 | ) | (1,796,268 | ) | (5,347,785 | ) | (3,610,780 | ) | ||||||||||||||||||||||||
Total operating expenses | (14,171,032 | ) | (14,935,066 | ) | (24,968,200 | ) | (24,667,364 | ) | (13,333,535 | ) | (9,649,835 | ) | (38,301,735 | ) | (34,317,199 | ) | ||||||||||||||||||||||||
Loss from operations | (13,023,787 | ) | (14,766,614 | ) | (23,626,211 | ) | (24,135,882 | ) | (12,616,068 | ) | (10,284,165 | ) | (36,242,279 | ) | (34,420,047 | ) | ||||||||||||||||||||||||
OTHER EXPENSE: | ||||||||||||||||||||||||||||||||||||||||
Interest income (expense), net | 1,262 | 222,672 | (53,153 | ) | 286,873 | |||||||||||||||||||||||||||||||||||
(Loss) income from long-term investment | (148,645 | ) | 4,941 | (129,603 | ) | 10,878 | ||||||||||||||||||||||||||||||||||
Interest (expense) income, net | (84,573 | ) | (110,659 | ) | (137,726 | ) | 176,214 | |||||||||||||||||||||||||||||||||
(Loss) Income from long-term investment | (107,069 | ) | 36,441 | (236,672 | ) | 47,319 | ||||||||||||||||||||||||||||||||||
Loss from acquisition of Antric Gmbh | (1,316,772 | ) | - | (1,316,772 | ) | - | ||||||||||||||||||||||||||||||||||
Impairment of long-term investment | 7(1) | (8,538 | ) | - | (1,154,666 | ) | - | 7(1) | (2,668 | ) | - | (1,157,334 | ) | - | ||||||||||||||||||||||||||
Gain (loss) on redemption of convertible promissory notes | 1,900 | - | (101 | ) | - | |||||||||||||||||||||||||||||||||||
Gain on redemption of convertible promissory notes | 966 | - | 865 | - | ||||||||||||||||||||||||||||||||||||
Loss on exercise of warrants | (14,745 | ) | - | (227,615 | ) | - | (1,134 | ) | - | (228,749 | ) | - | ||||||||||||||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 199,698 | - | 73,425 | - | 15,143 | 4,280,538 | 88,568 | 4,280,538 | ||||||||||||||||||||||||||||||||
Convertible bond issuance cost | - | (5,589,336 | ) | - | (5,589,336 | ) | ||||||||||||||||||||||||||||||||||
Change in fair value of equity securities | 8 | 60,452 | - | 713,468 | - | 8 | (1,879,593 | ) | 19,052 | (1,166,125 | ) | 19,052 | ||||||||||||||||||||||||||||
Other (expense) income, net | (1,119,295 | ) | 784,220 | (761,219 | ) | 734,981 | ||||||||||||||||||||||||||||||||||
Other expense, net | (111,815 | ) | (3,483,975 | ) | (873,034 | ) | (2,748,994 | ) | ||||||||||||||||||||||||||||||||
Loss before income taxes | (14,051,698 | ) | (13,754,781 | ) | (25,165,675 | ) | (23,103,150 | ) | (16,103,583 | ) | (15,132,104 | ) | (41,269,258 | ) | (38,235,254 | ) | ||||||||||||||||||||||||
Income tax (expense) benefit | 11 | (25,468 | ) | 48,861 | (25,468 | ) | 48,861 | |||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 11 | 384 | 43,366 | (25,084 | ) | 92,228 | ||||||||||||||||||||||||||||||||||
Net loss | (14,077,166 | ) | (13,705,920 | ) | (25,191,143 | ) | (23,054,289 | ) | (16,103,199 | ) | (15,088,738 | ) | (41,294,342 | ) | (38,143,026 | ) | ||||||||||||||||||||||||
Less: net loss attributable to non-controlling interests | (2,682 | ) | (633,922 | ) | (158,710 | ) | (670,641 | ) | (534 | ) | (668,512 | ) | (159,244 | ) | (1,339,153 | ) | ||||||||||||||||||||||||
Net loss attributable to the Company’s shareholders | $ | (14,074,484 | ) | $ | (13,071,998 | ) | $ | (25,032,433 | ) | $ | (22,383,648 | ) | $ | (16,102,665 | ) | $ | (14,420,226 | ) | $ | (41,135,098 | ) | $ | (36,803,873 | ) | ||||||||||||||||
OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (2,824,971 | ) | (4,078,240 | ) | (2,487,693 | ) | (3,825,086 | ) | (931,345 | ) | (3,686,137 | ) | (3,419,038 | ) | (7,511,222 | ) | ||||||||||||||||||||||||
Total comprehensive loss | (16,902,137 | ) | (17,784,160 | ) | (27,678,836 | ) | (26,879,375 | ) | (17,034,544 | ) | (18,774,875 | ) | (44,713,380 | ) | (45,654,248 | ) | ||||||||||||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests | (2,683 | ) | (483,216 | ) | (183,278 | ) | (540,805 | ) | (534 | ) | (454,156 | ) | (183,812 | ) | (994,960 | ) | ||||||||||||||||||||||||
Total comprehensive loss to the Company’s shareholders | $ | (16,899,454 | ) | $ | (17,300,944 | ) | (27,495,558 | ) | (26,338,570 | ) | $ | (17,034,010 | ) | $ | (18,320,719 | ) | $ | (44,529,568 | ) | $ | (44,659,288 | ) |
Note | June 30, 2023 | December 31, 2022 | Note | September 30, 2023 | December 31, 2022 | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 60,390,172 | $ | 153,966,777 | $ | 44,645,341 | $ | 153,966,777 | ||||||||||||||||
Restricted cash | 92,461 | 130,024 | 198,041 | 130,024 | ||||||||||||||||||||
Accounts receivable, net | 4 | 2,646,333 | 565,398 | 4 | 4,645,738 | 565,398 | ||||||||||||||||||
Inventories | 5 | 41,798,511 | 31,843,371 | 5 | 43,081,772 | 31,843,371 | ||||||||||||||||||
Prepayment and other current assets | 6 | 18,339,914 | 16,138,330 | 6 | 17,360,617 | 16,138,330 | ||||||||||||||||||
Deferred cost- current | 10,273 | - | ||||||||||||||||||||||
Deferred cost -current | 14,281 | - | ||||||||||||||||||||||
Amounts due from a related party | 16 | 212,320 | 366,936 | 16 | 210,335 | 366,936 | ||||||||||||||||||
Total current assets | 123,489,984 | 203,010,836 | 110,156,125 | 203,010,836 | ||||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Long-term investment, net | 7 | 4,959,769 | 5,325,741 | |||||||||||||||||||||
long-term investment, net | 7 | 3,557,697 | 5,325,741 | |||||||||||||||||||||
Investment in equity securities | 8 | 30,472,663 | 29,759,195 | 8 | 28,593,070 | 29,759,195 | ||||||||||||||||||
Property, plant and equipment, net | 9 | 18,508,847 | 14,962,591 | 9 | 20,132,381 | 14,962,591 | ||||||||||||||||||
Intangible assets, net | 10 | 6,439,333 | 4,563,792 | 10 | 6,384,532 | 4,563,792 | ||||||||||||||||||
Right-of-use assets | 12 | 19,734,961 | 8,187,149 | 12 | 20,679,376 | 8,187,149 | ||||||||||||||||||
Deferred cost - non-current | 207,974 | - | 206,700 | - | ||||||||||||||||||||
Other non-current assets, net | 2,232,206 | 2,039,012 | 2,152,968 | 2,039,012 | ||||||||||||||||||||
Total non-current assets | 82,555,753 | 64,837,480 | 81,706,724 | 64,837,480 | ||||||||||||||||||||
Total Assets | $ | 206,045,737 | $ | 267,848,316 | $ | 191,862,849 | $ | 267,848,316 | ||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 3,364,228 | $ | 3,383,021 | $ | 4,842,645 | $ | 3,383,021 | ||||||||||||||||
Accrued expenses and other current liabilities | 3,543,840 | 5,048,641 | 3,663,756 | 5,048,641 | ||||||||||||||||||||
Contractual liabilities | 3,314,661 | 2,388,480 | 3,084,737 | 2,388,480 | ||||||||||||||||||||
Operating lease liabilities, current | 12 | 4,303,890 | 1,313,334 | 12 | 4,548,226 | 1,313,334 | ||||||||||||||||||
Convertible promissory notes | 13 | 11,904,153 | 57,372,827 | 13 | 9,953,562 | 57,372,827 | ||||||||||||||||||
Deferred government grant, current | 53,046 | 26,533 | 52,721 | 26,533 | ||||||||||||||||||||
Amounts due to related parties | 16 | 41,302 | 716,372 | 16 | 37,951 | 716,372 | ||||||||||||||||||
Total current liabilities | 26,525,120 | 70,249,208 | 26,183,598 | 70,249,208 | ||||||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||
Deferred government grant, non-current | 968,079 | 497,484 | 948,971 | 497,484 | ||||||||||||||||||||
Derivative liability - investor warrant | 13 | 12,205,830 | 14,334,104 | 13 | 12,191,457 | 14,334,104 | ||||||||||||||||||
Derivative liability - placement agent warrant | 13 | 3,456,137 | 3,456,404 | 13 | 3,455,328 | 3,456,404 | ||||||||||||||||||
Operating lease liabilities, non-current | 12 | 16,001,387 | 7,421,582 | 12 | 17,074,145 | 7,421,582 | ||||||||||||||||||
Total non-current liabilities | 32,631,433 | 25,709,574 | 33,669,901 | 25,709,574 | ||||||||||||||||||||
Total Liabilities | $ | 59,156,553 | $ | 95,958,782 | $ | 59,853,499 | $ | 95,958,782 | ||||||||||||||||
Commitments and contingencies | 15 | 15 | ||||||||||||||||||||||
EQUITY | ||||||||||||||||||||||||
Ordinary shares (No par value; 304,449,091 and 300,841,995 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) | - | - | ||||||||||||||||||||||
Ordinary shares (No par value; 304,449,091 and 300,841,995 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) | - | - | ||||||||||||||||||||||
Additional paid in capital | 399,517,411 | 397,497,817 | 401,672,121 | 397,497,817 | ||||||||||||||||||||
Accumulated deficit | (244,856,609 | ) | (219,824,176 | ) | (260,959,274 | ) | (219,824,176 | ) | ||||||||||||||||
Accumulated other comprehensive loss | (7,770,097 | ) | (5,306,972 | ) | (8,701,442 | ) | (5,306,972 | ) | ||||||||||||||||
Total equity attributable to shareholders | 146,890,705 | 172,366,669 | 132,011,405 | 172,366,669 | ||||||||||||||||||||
Non-controlling interests | (1,521 | ) | (477,135 | ) | (2,055 | ) | (477,135 | ) | ||||||||||||||||
Total Equity | $ | 146,889,184 | $ | 171,889,534 | $ | 132,009,350 | $ | 171,889,534 | ||||||||||||||||
Total Liabilities and Equity | $ | 206,045,737 | $ | 267,848,316 | $ | 191,862,849 | $ | 267,848,316 |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net cash used in operating activities | $ | (35,499,138 | ) | $ | (29,071,262 | ) | $ | (45,588,906 | ) | $ | (47,671,865 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Purchase of equity investment | (680,932 | ) | - | (680,932 | ) | (3,616,188 | ) | |||||||||
Purchase of equity securities | - | (5,000,000 | ) | |||||||||||||
Purchase of plant and equipment | (5,082,473 | ) | (145,857 | ) | (7,329,509 | ) | (1,479,712 | ) | ||||||||
Purchase of land use right and property | (2,200,559 | ) | (9,260,497 | ) | (2,183,430 | ) | (16,764,322 | ) | ||||||||
Purchase of other intangible assets | (7,502 | ) | - | |||||||||||||
Acquisition of CAE’s equity interests | (1,924,557 | ) | (3,612,717 | ) | (1,924,557 | ) | (3,612,717 | ) | ||||||||
Cash acquired from acquisition of CAE | - | 1,118,700 | - | 1,118,700 | ||||||||||||
Acquisition of Antric Gmbh’s equity interests | (1 | ) | - | |||||||||||||
Cash acquired from acquisition of Antric Gmbh | 1,376 | - | ||||||||||||||
Payment of expense for Acquisition of CAE’s equity interests | - | (348,987 | ) | - | (348,987 | ) | ||||||||||
Proceeds from disposal of property, plant and equipment | - | 320 | 842 | 314 | ||||||||||||
Loans provided to third parties | (100,000 | ) | (5,149,884 | ) | (790,000 | ) | (1,276,617 | ) | ||||||||
Repayment of loans from related parties | - | 286,920 | - | 281,436 | ||||||||||||
Net cash used in investing activities | (9,988,521 | ) | (17,112,002 | ) | (12,913,713 | ) | (30,698,093 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Repayment of loans to related parties | - | (1,741,868 | ) | - | (1,734,016 | ) | ||||||||||
Repayment of loans to third parties | - | (1,155,829 | ) | - | (1,128,070 | ) | ||||||||||
Repayment of bank loans | (602,477 | ) | - | |||||||||||||
Purchase of CAE’s loan | - | (13,228,101 | ) | - | (13,228,101 | ) | ||||||||||
Reduction of capital | - | (13,930,000 | ) | - | (13,930,000 | ) | ||||||||||
Proceed from issuance of convertible promissory notes | - | 54,069,000 | ||||||||||||||
Redemption of convertible promissory notes | (45,583,321 | ) | - | (47,534,119 | ) | - | ||||||||||
Proceed from exercise of share-based awards | - | 14,386 | ||||||||||||||
Payment of expense for the reverse recapitalization | - | (904,843 | ) | - | (904,843 | ) | ||||||||||
Net cash used in financing activities | (45,583,321 | ) | (30,960,641 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (48,136,596 | ) | 23,158,356 | |||||||||||||
Effect of exchange rate changes on cash | (2,543,188 | ) | (981,467 | ) | (2,614,204 | ) | (5,456,870 | ) | ||||||||
Net decrease in cash, cash equivalents and restricted cash | (93,614,168 | ) | (78,125,372 | ) | (109,253,419 | ) | (60,668,472 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 154,096,801 | 261,664,962 | 154,096,801 | 261,664,962 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 60,482,633 | $ | 183,539,590 | $ | 44,843,382 | $ | 200,996,490 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||||||
Interest paid | $ | 1,051,054 | $ | 374,745 | $ | 1,200,673 | $ | 371,999 | ||||||||
Income tax paid | $ | 4,903 | $ | - | $ | 4,829 | $ | - | ||||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||||||
Right of use assets obtained in exchange for operating lease obligations | $ | - | $ | 7,613,564 | ||||||||||||
Convention from debt to equity interest of HW Electro Co., Ltd. | $ | 1,000,000 | $ | - | ||||||||||||
Cashless exercise of warrants | $ | 2,168,185 | $ | - | $ | 2,168,185 | $ | - |
Ordinary shares | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive loss | Total shareholders’ equity | Non- controlling interest | Total equity | Ordinary shares | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive loss | Total shareholders’ equity | Non- controlling interest | Total equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | 261,256,254 | $ | - | $ | 374,901,939 | $ | (109,735,935 | ) | $ | (1,392,699 | ) | $ | 263,773,305 | $ | - | $ | 263,773,305 | 261,256,254 | $ | - | $ | 374,901,939 | $ | (109,735,935 | ) | $ | (1,392,699 | ) | $ | 263,773,305 | $ | - | $ | 263,773,305 | ||||||||||||||||||||||||||||||
Share-based compensation | - | - | 1,309,856 | - | - | 1,309,856 | - | 1,309,856 | - | - | 2,624,302 | - | - | 2,624,302 | - | 2,624,302 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | (22,383,648 | ) | - | (22,383,648 | ) | (670,641 | ) | (23,054,289 | ) | - | - | - | (36,803,873 | ) | - | (36,803,873 | ) | (1,339,153 | ) | (38,143,026 | ) | ||||||||||||||||||||||||||||||||||||||||
Acquisition of 65% of CAE’s equity interests | - | - | - | - | - | - | 1,555,320 | 1,555,320 | - | - | - | - | - | - | 1,555,320 | 1,555,320 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of share-based award | 51,468 | - | 14,385 | - | - | 14,385 | - | 14,385 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | (3,954,922 | ) | (3,954,922 | ) | 129,836 | (3,825,086 | ) | - | - | - | - | (7,855,415 | ) | (7,855,415 | ) | 344,193 | (7,511,222 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | 261,256,254 | $ | - | $ | 376,211,795 | $ | (132,119,583 | ) | $ | (5,347,621 | ) | $ | 238,744,591 | $ | 1,014,515 | $ | 239,759,106 | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | 261,307,722 | $ | - | $ | 377,540,626 | $ | (146,539,808 | ) | $ | (9,248,114 | ) | $ | 221,752,704 | $ | 560,360 | $ | 222,313,062 |
Ordinary shares | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive loss | Total shareholders’ equity | Non- controlling interest | Total equity | Ordinary shares | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive loss | Total shareholders’ equity | Non- controlling interest | Total equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | 300,841,995 | $ | - | $ | 397,497,817 | $ | (219,824,176 | ) | $ | (5,306,972 | ) | $ | 172,366,669 | $ | (477,135 | ) | $ | 171,889,534 | 300,841,995 | $ | - | $ | 397,497,817 | $ | (219,824,176 | ) | $ | (5,306,972 | ) | $ | 172,366,669 | $ | (477,135 | ) | $ | 171,889,534 | ||||||||||||||||||||||||||||
Share-based compensation | - | - | 2,410,291 | - | - | 2,410,291 | - | 2,410,291 | - | - | 4,565,001 | - | - | 4,565,001 | - | 4,565,001 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | (25,032,433 | ) | - | (25,032,433 | ) | (158,710 | ) | (25,191,143 | ) | - | - | - | (41,135,098 | ) | - | (41,135,098 | ) | (159,244 | ) | (41,294,342 | ) | ||||||||||||||||||||||||||||||||||||||||
Acquisition of 35% of CAE’s equity interests | - | - | (2,558,882 | ) | - | - | (2,558,882 | ) | 658,892 | (1,899,990 | ) | - | - | (2,558,882 | ) | - | - | (2,558,882 | ) | 658,892 | (1,899,990 | ) | ||||||||||||||||||||||||||||||||||||||||||
Exercise of warrants | 3,607,096 | - | 2,168,185 | - | - | 2,168,185 | - | 2,168,185 | 3,607,096 | - | 2,168,185 | - | - | 2,168,185 | - | 2,168,185 | ||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | (2,463,125 | ) | (2,463,125 | ) | (24,568 | ) | (2,487,693 | ) | - | - | - | - | (3,394,470 | ) | (3,394,470 | ) | (24,568 | ) | (3,419,038 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2023 | 304,449,091 | $ | - | $ | 399,517,411 | $ | (244,856,609 | ) | $ | (7,770,097 | ) | $ | 146,890,705 | $ | (1,521 | ) | $ | 146,889,184 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2023 | 304,449,091 | $ | - | $ | 401,672,121 | $ | (260,959,274 | ) | $ | (8,701,442 | ) | $ | 132,011,405 | $ | (2,055 | ) | $ | 132,009,350 |
Name | Date of Incorporation | Place of Incorporation | Percentage of direct or indirect economic interest | |||
Cenntro Automotive Corporation (“CAC”) | March 22, 2013 | Delaware, U.S. | 100% owned by CEGL | |||
Cenntro Electric Group, Inc. (“CEG”) | March 9, 2020 | Delaware, U.S. | 100% owned by CEGL | |||
Cennatic Power, Inc. (“Cennatic Power”) | June 8, 2022 | Delaware, U.S. | 100% owned by CEGL | |||
Teemak Power Corporation | January 31, 2023 | Delaware, U.S. | 100% owned by CEGL | |||
Avantier Motors Corporation | November 27, 2017 | Delaware, U.S. | 100% owned by CEGL | |||
Cenntro Electric CICS, SRL | November 30, 2022 | Santo Domingo, Dominican Republic | 99% owned by CEGL | |||
Cennatic Energy S. de R.L. de C.V. | August 24, 2022 | Monterrey, Mexico | 100% owned by CEGL | |||
Cenntro Automotive S.A.S. | January 16, 2023 | Galapa, Colombia | 100% owned by CEGL | |||
Cenntro Electric Colombia S.A.S. | March 29, 2023 | Atlántico, Colombia | 100% owned by CEGL | |||
Cenntro Automotive Group Limited (“CAG HK”) | February 15, 2016 | Hong Kong | 100% owned by CEGL | |||
Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”) | June 5, 2017 | PRC | 100% owned by CEGL | |||
Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”) | May 6, 2016 | PRC | 100% owned by CEGL | |||
Zhejiang Cenntro Machinery Co., Limited | January 20, 2021 | PRC | 100% owned by CEGL | |||
Jiangsu Tooniu Tech Co., Limited | December 19, 2018 | PRC | 100% owned by CEGL | |||
Hangzhou Hengzhong Tech Co., Limited | December 16, 2014 | PRC | 100% owned by CEGL | |||
Teemak Power (Hong Kong) Limited (HK) | May 17, 2023 | Hong Kong | 100% owned by CEGL | |||
Avantier Motors (Hong Kong) Limited | March 13, 2023 | Hong Kong | 100% owned by CEGL | |||
Cenntro Automotive Europe GmbH (“CAE”) | May 21, 2019 | Herne, Germany | 100% owned by CEGL | |||
Cenntro Electric B.V. | December 12, 2022 | Amsterdam, Netherlands | 100% owned by CEGL | |||
Cenntro Elektromobilite Araçlar A.Ş | February 21, 2023 | Turkey | 100% owned by CEGL | |||
Cenntro Elecautomotiv, S.L. | July 5, 2022 | Barcelona, Spain | 100% owned by CEGL | |||
Cenntro Electric Group (Europe) GmbH (“Cenntro Electric”) | January 13, 2022 | Düsseldorf, Germany | 100% owned by CEGL | |||
Simachinery Equipment Limited (“Simachinery HK”) | June 2, 2011 | Hong Kong | 100% owned by CEGL | |||
Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”) | June 16, 2011 | PRC | 100% owned by CEGL | |||
Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”) | July 12, 2012 | PRC | 100% owned by CEGL | |||
Cenntro EV Center Italy S.R.L. | May 8, 2023 | Italy | 100% owned by CEGL | |||
Antric Gmbh | August 21, 2020 | Germany | 100% owned by CEGL | |||
Pikka Electric Corporation | August 3, 2023 | Delaware, U.S. | 100% owned by CEGL | |||
Centro Technology Corporation | August 24, 2023 | California, U.S. | 100% owned by CEGL |
(a) | Basis of presentation |
(b) | Use of estimates |
(c) | Revenue recognition |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Vehicles sales | $ | 7,226,049 | $ | 4,852,930 | $ | 12,732,639 | $ | 6,766,480 | ||||||||
Spare-parts sales | 344,702 | 84,626 | 586,632 | 207,860 | ||||||||||||
Other service income | 137,313 | 97,766 | 151,624 | 157,572 | ||||||||||||
Net revenues | $ | 7,708,064 | $ | 5,035,322 | $ | 13,470,895 | $ | 7,131,912 |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Primary geographical markets | Primary geographical markets | Primary geographical markets | ||||||||||||||
Europe | $ | 5,531,486 | $ | 2,963,630 | $ | 10,035,492 | $ | 5,621,459 | ||||||||
Asia | 2,079,876 | 1,644,209 | 2,983,555 | 1,052,819 | ||||||||||||
America | 96,702 | 427,483 | 451,848 | 457,634 | ||||||||||||
Total | $ | 7,708,064 | $ | 5,035,322 | $ | 13,470,895 | $ | 7,131,912 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Accounts receivable, net | $ | 2,646,333 | $ | 565,398 | $ | 4,645,738 | $ | 565,398 | ||||||||
Contractual liabilities | $ | 3,314,661 | $ | 2,388,480 | $ | 3,084,737 | $ | 2,388,480 |
(d) | Recently issued accounting standards pronouncement |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Accounts receivable | $ | 4,619,959 | $ | 2,526,432 | $ | 6,504,871 | $ | 2,526,432 | ||||||||
Less: provision for doubtful accounts | (1,973,626 | ) | (1,961,034 | ) | (1,859,133 | ) | (1,961,034 | ) | ||||||||
Accounts receivable, net | $ | 2,646,333 | $ | 565,398 | $ | 4,645,738 | $ | 565,398 |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Balance at the beginning of the period | $ | 1,961,034 | $ | 1,475,983 | $ | 1,961,034 | $ | 1,475,983 | ||||||||
Additions | - | - | - | - | ||||||||||||
Write-off | (47,980 | ) | (926,890 | ) | (104,583 | ) | (939,898 | ) | ||||||||
Foreign exchange | 60,572 | (46,928 | ) | 2,682 | (22,820 | ) | ||||||||||
Balance at the end of the year | $ | 1,973,626 | $ | 502,165 | $ | 1,859,133 | $ | 513,265 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Raw material | $ | 9,749,814 | $ | 9,311,419 | $ | 10,887,735 | $ | 9,311,419 | ||||||||
Work-in-progress | 592,029 | 290,220 | 689,410 | 290,220 | ||||||||||||
Goods in transit | 1,672,061 | 2,364,136 | 3,071,554 | 2,364,136 | ||||||||||||
Finished goods | 29,784,607 | 19,877,596 | 28,433,073 | 19,877,596 | ||||||||||||
Inventories | $ | 41,798,511 | $ | 31,843,371 | $ | 43,081,772 | $ | 31,843,371 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Advance to suppliers | $ | 10,466,450 | $ | 9,877,337 | $ | 10,788,647 | $ | 9,877,337 | ||||||||
Deductible input value added tax | 6,287,180 | 4,097,162 | 4,616,475 | 4,097,162 | ||||||||||||
Receivable from third parties | 645,735 | 678,887 | 641,779 | 678,887 | ||||||||||||
Loans to a third party | 100,000 | 1,044,181 | 790,000 | 1,044,181 | ||||||||||||
Others | 840,549 | 440,763 | 523,716 | 440,763 | ||||||||||||
Prepayment and other current assets | $ | 18,339,914 | $ | 16,138,330 | $ | 17,360,617 | $ | 16,138,330 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Antric GmbH (1) | $ | 1,414,402 | $ | 2,674,500 | $ | - | $ | 2,674,500 | ||||||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2) | 2,082,664 | 2,189,570 | 2,069,884 | 2,189,570 | ||||||||||||
Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3) | 372,301 | 367,272 | 398,733 | 367,272 | ||||||||||||
Able 2rent GmbH (DEU) (4) | 90,402 | 94,399 | 89,080 | 94,399 | ||||||||||||
Total | $ | 3,959,769 | $ | 5,325,741 | $ | 2,557,697 | $ | 5,325,741 |
(1) | On December 16, 2022, the Company invested EUR2,500,000 (approximately |
(2) | On September 25, 2022, the Company invested RMB15,400,000 (approximately |
(3) | On June 23, 2021, the Company invested RMB2,000,000 (approximately |
(4) | On March 22, 2022, CAE invested EUR100,000 (approximately |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
HW Electro Co., Ltd. (1) | $ | 1,000,000 | $ | - | $ | 1,000,000 | $ | - | ||||||||
Total | $ | 1,000,000 | $ | - | $ | 1,000,000 | $ | - |
(1) | On January 31, 2023, the Company entered into a debt convention agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 into 571,930 shares of HW Electro Co., Ltd.’s for a total of 3.40% of its equity interest. |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
MineOne Fix Income Investment I L.P | $ | 25,535,522 | $ | 25,019,244 | $ | 25,797,938 | $ | 25,019,244 | ||||||||
Micro Money Fund SPC | 4,937,141 | 4,739,951 | 2,795,132 | 4,739,951 | ||||||||||||
Total | $ | 30,472,663 | $ | 29,759,195 | $ | 28,593,070 | $ | 29,759,195 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
At cost: | ||||||||||||||||
Plant and building (1) | $ | 11,277,399 | $ | 11,453,436 | $ | 11,210,678 | $ | 11,453,436 | ||||||||
Machinery and equipment | 3,365,935 | 2,413,087 | 3,386,866 | 2,413,087 | ||||||||||||
Leasehold improvement | 5,708,695 | 2,956,515 | 7,278,301 | 2,956,515 | ||||||||||||
Office equipment | 1,336,770 | 1,192,443 | 1,609,484 | 1,192,443 | ||||||||||||
Motor vehicles | 790,491 | 352,972 | 971,756 | 352,972 | ||||||||||||
Property, plant and equipment, gross | 22,479,290 | 18,368,453 | 24,457,085 | 18,368,453 | ||||||||||||
Less: accumulated depreciation | (3,970,443 | ) | (3,405,862 | ) | (4,324,704 | ) | (3,405,862 | ) | ||||||||
Property, plant and equipment, net | $ | 18,508,847 | $ | 14,962,591 | $ | 20,132,381 | $ | 14,962,591 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
At cost: | ||||||||||||||||
Land use right | $ | 6,530,731 | $ | 4,605,738 | $ | 6,497,234 | $ | 4,605,738 | ||||||||
Software | 113,712 | 119,550 | 120,344 | 119,550 | ||||||||||||
Total | 6,644,443 | 4,725,288 | 6,617,578 | 4,725,288 | ||||||||||||
Less: accumulated amortization | (205,110 | ) | (161,496 | ) | (233,046 | ) | (161,496 | ) | ||||||||
Intangible assets, net | $ | 6,439,333 | $ | 4,563,792 | $ | 6,384,532 | $ | 4,563,792 |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
US | $ | 12,622,663 | $ | 13,134,395 | ||||||||||||
Europe | 10,832,103 | 3,541,599 | ||||||||||||||
Australia | 10,830,171 | 15,107,255 | ||||||||||||||
PRC | $ | 5,349,328 | 1,919,622 | 5,953,627 | 6,452,005 | |||||||||||
US | 7,935,561 | 7,703,997 | ||||||||||||||
Australia | 5,534,092 | 11,799,089 | ||||||||||||||
Europe | 5,833,519 | 1,680,442 | ||||||||||||||
Others | 513,175 | - | 1,030,694 | - | ||||||||||||
Total | $ | 25,165,675 | 23,103,150 | $ | 41,269,258 | $ | 38,235,254 |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Operating leases cost excluding short-term rental expense | $ | 1,830,796 | $ | 740,871 | $ | 3,415,206 | $ | 1,189,026 | ||||||||
Short-term lease cost | 487,482 | 38,277 | 637,353 | 136,028 | ||||||||||||
Total | $ | 2,318,278 | $ | 779,148 | $ | 4,052,559 | $ | 1,325,054 |
June 30, 2023 | June 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 1,817,787 | $ | 552,812 | $ | 2,836,188 | $ | 663,112 | ||||||||
Weighted average remaining lease term | 6.42 years | 8.87 years | 6.34 years | 8.60 years | ||||||||||||
Weighted average discount rate | 6.09 | % | 2.87 | % | 6.23 | % | 3.25 | % |
Operating Leases | Operating Leases | |||||||
For the remaining of 2023 | $ | 2,164,170 | $ | 1,172,649 | ||||
Years ended December 31, | ||||||||
2024 | 4,450,712 | 4,751,817 | ||||||
2025 | 3,657,598 | 4,030,334 | ||||||
2026 | 3,734,252 | 4,083,280 | ||||||
2027 | 3,860,963 | 4,218,766 | ||||||
2028 and thereafter | 6,626,757 | 7,953,619 | ||||||
Total lease payments | 24,494,452 | 26,210,465 | ||||||
Less: imputed interest | 4,189,175 | 4,588,094 | ||||||
Total | 20,305,277 | 21,622,371 | ||||||
Less: current portion | 4,303,890 | 4,548,226 | ||||||
Non-current portion | $ | 16,001,387 | $ | 17,074,145 |
Liability component | Liability component | |||||||
As of December 31, 2022 | $ | 57,372,827 | $ | 57,372,827 | ||||
Convertible promissory notes issued during the year | - | - | ||||||
Redemption of convertible promissory notes | (45,583,220 | ) | (47,534,984 | ) | ||||
Fair value change recognized | 114,546 | 115,719 | ||||||
As of June 30, 2023 | 11,904,153 | |||||||
As of September 30, 2023 | 9,953,562 |
Fair Value Assumptions - Convertible Promissory Note | June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||
Face value principal payable | 11,904,179 | 57,488,000 | 9,953,381 | 57,488,000 | ||||||||||||
Original conversion price | 1.2375 | 1.2375 | 1.2375 | 1.2375 | ||||||||||||
Interest Rate | 8.00 | % | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||
Expected term (years) | 0.05 | 0.55 | 0.30 | 0.55 | ||||||||||||
Volatility | 63.10 | % | 75.13 | % | 55.25 | % | 75.13 | % | ||||||||
Market yield (range) | 9.63 | % | 18.02 | % | 15.42 | % | 18.02 | % | ||||||||
Risk free rate | 1.12 | % | 4.69 | % | 5.50 | % | 4.69 | % | ||||||||
Issue date | July 20, 2022 | July 20, 2022 | July 20, 2022 | July 20, 2022 | ||||||||||||
Maturity date | July 19, 2023 | July 19, 2023 | January 19, 2024 | July 19, 2023 |
Investor warrants component | Placement agent warrants component | Investor warrants component | Placement agent warrants component | |||||||||||||
As of December 31, 2022 | $ | 14,334,104 | $ | 3,456,404 | $ | 14,334,104 | $ | 3,456,404 | ||||||||
Warrants issued during the year | - | - | - | - | ||||||||||||
Exercise of warrants | (1,940,570 | ) | - | (1,939,436 | ) | - | ||||||||||
Fair value change recognized | (187,704 | ) | (267 | ) | (203,211 | ) | (1,076 | ) | ||||||||
As of June 30, 2023 | 12,205,830 | 3,456,137 | ||||||||||||||
As of September 30, 2023 | 12,191,457 | 3,455,328 |
Fair Value Assumptions – Warrants | June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||
Expected term (years) | 4.05 | 4.55 | 3.80 | 4.55 | ||||||||||||
Volatility | 76.02 | % | 77.72 | % | 77.97 | % | 77.72 | % | ||||||||
Risk free rate | 4.19 | % | 4.13 | % | 4.63 | % | 4.13 | % |
(a) | Customers |
Six months ended | Six months ended | Nine Months ended | Nine Months ended | |||||||||||||||||||||||||||||
June 30, 2023, | June 30, 2022, | September 30, 2023, | September 30, 2022, | |||||||||||||||||||||||||||||
Customer | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||
A | $ | 1,414,701 | 18 | % | $ | 728,109 | 14 | % | $ | 2,219,933 | 16 | % | $ | 399 | * | % | ||||||||||||||||
B | 285,603 | * | 684,643 | 14 | % | 314,420 | * | 747,625 | 10 | % | ||||||||||||||||||||||
C | 16,868 | * | 807,952 | 16 | % | |||||||||||||||||||||||||||
D | - | - | 539,786 | 11 | % | |||||||||||||||||||||||||||
Total | $ | 1,717,172 | 18 | % | $ | 1,450,937 | 55 | % | $ | 2,534,353 | 16 | % | $ | 748,024 | 10 | % |
* | Indicates below 10%. |
As of June 30, 2023, | As of December 31, 2022, | As of September 30, 2023, | As of December 31, 2022, | |||||||||||||||||||||||||||||
Customer | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||
C | $ | 577,839 | 13 | % | $ | - | - | $ | 2,265,727 | 35 | % | $ | 12,338 | * | ||||||||||||||||||
D | 376,054 | * | 395,360 | 16 | % | 1,184,267 | 18 | % | 1,197,023 | 47 | % | |||||||||||||||||||||
E | 612,525 | 13 | % | 12,338 | * | 433,281 | * | 410,321 | 16 | % | ||||||||||||||||||||||
F | 445,598 | 10 | % | 410,321 | 16 | % | - | - | 395,360 | 16 | % | |||||||||||||||||||||
G | 1,221,862 | 26 | % | 1,197,023 | 47 | % | ||||||||||||||||||||||||||
Total | $ | 3,233,878 | 62 | % | $ | 2,015,042 | 79 | % | $ | 3,883,275 | 53 | % | $ | 2,015,042 | 79 | % |
* | Indicates below 10%. |
(b) | Suppliers |
Six months ended June 30, 2023, | Six months ended June 30, 2022, | Nine Months ended September 30, 2023, | Nine Months ended September 30, 2022, | |||||||||||||||||||||||||||||
Supplier | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||
A | $ | 4,645,216 | 33 | % | $ | - | - | $ | 5,593,765 | 26 | % | $ | 1,919,050 | 13 | % | |||||||||||||||||
B | 2,644,958 | 19 | % | - | - | 3,078,975 | 14 | % | 8,038 | * | ||||||||||||||||||||||
C | 1,734,260 | 12 | % | 308,918 | * | 31,223 | * | 5,265,348 | 37 | % | ||||||||||||||||||||||
D | 27,436 | * | 4,030,226 | 45 | % | |||||||||||||||||||||||||||
Total | $ | 9,051,870 | 64 | % | $ | 4,030,226 | 45 | % | $ | 8,703,963 | 40 | % | $ | 7,192,436 | 50 | % |
* | Indicates below 10%. |
As of June 30, 2023, | As of December 31, 2022, | As of September 30, 2023, | As of December 31, 2022, | |||||||||||||||||||||||||||||
Supplier | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||
E | $ | 695,586 | 21 | % | $ | 577,621 | 17 | % | ||||||||||||||||||||||||
D | 417,448 | 12 | % | 420,100 | 12 | % | $ | 674,183 | 14 | % | $ | 577,621 | 17 | % | ||||||||||||||||||
C | 391,765 | * | 420,100 | 12 | % | |||||||||||||||||||||||||||
Total | $ | 1,113,034 | 33 | % | $ | 997,721 | 29 | % | $ | 1,065,948 | 14 | % | $ | 997,721 | 29 | % |
Name of related parties: | Relationship with the Company | |
Mr. Yeung Heung Yeung | A principal shareholder of the Company | |
Shenzhen Yuanzheng Investment Development Co. Ltd (“Shenzhen Yuanzheng“) | Controlled by Mr. Yeung Heung Yeung | |
Zhejiang RAP | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited | |
Jiangsu Rongyuan | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited | |
Hangzhou Hezhe Energy Technology Co., Ltd (“Hangzhou Hezhe”) | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited | |
Bendon Limited | Controlled by Mr. Justin Davis-Rice, a director of CEGL. As for the resignation of Mr. Justin Davis-Rice in the second half of 2022, it was not a related party as of | |
Shanghai Hengyu Enterprise Management Consulting Co., Ltd (“Shanghai Hengyu”) | Ultimately controlled by Mr. Peter Wang | |
Antric GmbH | Invested by the Company. On August 22, 2023, the Company acquired the remaining equity interests, thus it was 100% controlled by CEGL and not a related party as of September 30, 2023. |
For the Six Months Ended June 30, | For the Nine Months Ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Interest income from a related party | ||||||||||||||||
Zhejiang RAP | $ | 6,524 | $ | 6,976 | $ | 9,639 | $ | 10,264 | ||||||||
Bendon Limited | - | 58,260 | - | 90,972 | ||||||||||||
Purchase of raw materials from related parties | ||||||||||||||||
Hangzhou Hezhe | 196,908 | 1,254,934 | 196,603 | 1,402,983 | ||||||||||||
Service provided by a related party | ||||||||||||||||
Shanghai Hengyu | - | 5,248 | - | 5,147 | ||||||||||||
Zhejiang Zhongchai | - | 4,322 | - | 4,239 | ||||||||||||
Interest expense on loans provided by related parties | ||||||||||||||||
Mr. Yeung Heung Yeung | - | 2,532 | - | 2,532 | ||||||||||||
Others | - | 1,116 | - | 1,095 | ||||||||||||
Payment on the purchase of the raw materials | ||||||||||||||||
Hangzhou Hezhe | 53,839 | - | 54,979 | 1,245,317 | ||||||||||||
Repayment of interest-bearing Loan from related parties | ||||||||||||||||
Shenzhen Yuanzheng | - | 410,777 | - | 402,925 | ||||||||||||
Yeung Hueng Yeung | - | 1,331,091 | ||||||||||||||
Yueng Hueng Yueng | - | 1,331,091 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Hangzhou Hezhe (1) | $ | 212,320 | $ | 366,936 | $ | 210,335 | $ | 366,936 | ||||||||
Total | $ | 212,320 | $ | 366,936 | $ | 210,335 | $ | 366,936 |
(1) | The balance mainly represents the prepayment for raw material to the related party. |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Zhejiang RAP | $ | 16,483 | $ | 23,882 | $ | 13,284 | $ | 23,882 | ||||||||
Jiangsu Rongyuan | 22,061 | 23,194 | 21,926 | 23,194 | ||||||||||||
Shanghai Hengyu | 2,758 | 2,900 | 2,741 | 2,900 | ||||||||||||
Antric GmbH | - | 666,396 | - | 666,396 | ||||||||||||
Total | $ | 41,302 | $ | 716,372 | $ | 37,951 | $ | 716,372 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Six Months ended June 30, | Nine Months ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | ||||||||||||||
Gross margin of vehicle sales | 16.7 | % | 8.7 | % | 16.3 | % | -3.6 | % | ||||||||
Three Months ended June 30, | Six Months ended June 30, | Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
Combined Statements of Operations Data: | ||||||||||||||||||||||||||||||||
Net revenues | 4,237,520 | 3,204,689 | 7,708,064 | 5,035,322 | 5,762,831 | 2,096,590 | 13,470,895 | 7,131,912 | ||||||||||||||||||||||||
Cost of goods sold | (3,090,275 | ) | (3,036,237 | ) | (6,366,075 | ) | (4,503,840 | ) | (5,045,364 | ) | (2,730,920 | ) | (11,411,439 | ) | (7,234,760 | ) | ||||||||||||||||
Gross profit/(loss) | 1,147,245 | 168,452 | 1,341,989 | 531,482 | 717,467 | (634,330 | ) | 2,059,456 | (102,848 | ) | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Selling and marketing expenses | (2,742,749 | ) | (1,531,460 | ) | (4,611,734 | ) | (2,626,568 | ) | (2,626,829 | ) | (1,633,340 | ) | (7,238,563 | ) | (4,259,908 | ) | ||||||||||||||||
General and administrative expenses | (9,285,213 | ) | (12,014,453 | ) | (16,643,477 | ) | (20,226,284 | ) | (9,071,910 | ) | (6,220,227 | ) | (25,715,387 | ) | (26,446,511 | ) | ||||||||||||||||
Research and development expenses | (2,143,070 | ) | (1,389,153 | ) | (3,712,989 | ) | (1,814,512 | ) | (1,634,796 | ) | (1,796,268 | ) | (5,347,785 | ) | (3,610,780 | ) | ||||||||||||||||
Total operating expenses | (14,171,032 | ) | (14,935,066 | ) | (24,968,200 | ) | (24,667,364 | ) | (13,333,535 | ) | (9,649,835 | ) | (38,301,735 | ) | (34,317,199 | ) | ||||||||||||||||
Loss from operations | (13,023,787 | ) | (14,766,614 | ) | (23,626,211 | ) | (24,135,882 | ) | (12,616,068 | ) | (10,284,165 | ) | (36,242,279 | ) | (34,420,047 | ) | ||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||
Interest expense, net | 1,262 | 222,672 | (53,153 | ) | 286,873 | (84,573 | ) | (110,659 | ) | (137,726 | ) | 176,214 | ||||||||||||||||||||
(Loss) Income from equity method investments | (148,645 | ) | 4,941 | (129,603 | ) | 10,878 | (107,069 | ) | 36,441 | (236,672 | ) | 47,319 | ||||||||||||||||||||
Other (expense) income, net | (1,119,295 | ) | 784,220 | (761,219 | ) | 734,981 | (111,815 | ) | (3,483,975 | ) | (873,034 | ) | (2,748,994 | ) | ||||||||||||||||||
Loss on redemption of convertible promissory notes | 1,900 | (101 | ) | - | 966 | 865 | - | |||||||||||||||||||||||||
Loss from acquisition of Antric | (1,316,772 | ) | - | (1,316,772 | ) | - | ||||||||||||||||||||||||||
Convertible bond issuance cost | (5,589,336 | ) | (5,589,336 | ) | ||||||||||||||||||||||||||||
Loss on exercise of warrants | (14,745 | ) | (227,615 | ) | - | (1,134 | ) | (228,749 | ) | - | ||||||||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 199,698 | 73,425 | - | 15,143 | 4,280,538 | 88,568 | 4,280,538 | |||||||||||||||||||||||||
Change in fair value of equity securities | 60,452 | 713,468 | - | (1,879,593 | ) | 19,052 | (1,166,125 | ) | 19,052 | |||||||||||||||||||||||
Impairment of Long-term investments | (8,538 | ) | (1,154,666 | ) | - | (2,668 | ) | - | (1,157,334 | ) | - | |||||||||||||||||||||
Loss before income taxes | (14,051,698 | ) | (13,754,781 | ) | (25,165,675 | ) | (23,103,150 | ) | (16,103,583 | ) | (15,132,104 | ) | (41,269,258 | ) | (38,235,254 | ) | ||||||||||||||||
Income tax expense | (25,468 | ) | 48,861 | (25,468 | ) | 48,861 | 384 | 43,366 | (25,084 | ) | 92,228 | |||||||||||||||||||||
Net loss | (14,077,166 | ) | (13,705,920 | ) | (25,191,143 | ) | (23,054,289 | ) | (16,103,199 | ) | (15,088,738 | ) | (41,294,342 | ) | (38,143,026 | ) | ||||||||||||||||
Less: net loss attributable to non-controlling interests | (2,682 | ) | (633,922 | ) | (158,710 | ) | (670,641 | ) | (534 | ) | (668,512 | ) | (159,244 | ) | (1,339,153 | ) | ||||||||||||||||
Net loss attributable to shareholders of the Company | (14,074,484 | ) | (13,071,998 | ) | (25,032,433 | ) | (22,383,648 | ) | (16,102,665 | ) | (14,420,226 | ) | (41,135,098 | ) | (36,803,873 | ) |
Three Months ended June 30, | Six Months ended June 30, | Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||||||||||||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vehicle Sales | $ | 4,385,086 | 103.5 | % | $ | 3,134,559 | 97.8 | % | $ | 7,226,049 | 93.7 | % | $ | 4,852,930 | 96.4 | % | $ | 5,506,589 | 95.6 | % | $ | 1,913,550 | 91.3 | % | $ | 12,732,639 | 94.5 | % | $ | 6,766,480 | 94.9 | % | ||||||||||||||||||||||||||||||||
Spare-part sales | -253,334 | -6.0 | % | -16,798 | -0.5 | % | 344,702 | 4.5 | % | 84,626 | 1.7 | % | 241,930 | 4.2 | % | 123,234 | 5.9 | % | 586,632 | 4.4 | % | 207,860 | 2.9 | % | ||||||||||||||||||||||||||||||||||||||||
Other sales | 105,768 | 2.5 | % | 86,928 | 2.7 | % | 137,313 | 1.8 | % | 97,766 | 1.9 | % | 14,312 | 0.2 | % | 59,806 | 2.9 | % | 151,624 | 1.1 | % | 157,572 | 2.2 | % | ||||||||||||||||||||||||||||||||||||||||
Total net revenues | $ | 4,237,520 | $ | 3,204,689 | 100.00 | % | $ | 7,708,064 | 100.00 | % | $ | 5,035,322 | 100.00 | % | $ | 5,762,831 | 100.00 | % | $ | 2,096,590 | 100.00 | % | $ | 13,470,895 | 100.00 | % | $ | 7,131,912 | 100.00 | % |
Three Months ended June 30, | Six Months ended June 30, | Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||||||||||||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vehicle Sales | $ | (3,228,346 | ) | 104.5 | % | $ | (2,452,858 | ) | 80.8 | % | $ | (6,023,108 | ) | 94.6 | % | $ | (3,832,462 | ) | 85.1 | % | $ | (4,639,338 | ) | 92.0 | % | $ | (2,590,747 | ) | 94.9 | % | $ | (10,662,446 | ) | 93.4 | % | $ | (6,423,209 | ) | 88.8 | % | ||||||||||||||||||||||||
Spare-part sales | 263,139 | -8.5 | % | 51,385 | -1.7 | % | (201,085 | ) | 3.2 | % | (46,639 | ) | 1.0 | % | (383,722 | ) | 7.6 | % | (118,420 | ) | 4.3 | % | (584,807 | ) | 5.1 | % | (165,059 | ) | 2.3 | % | ||||||||||||||||||||||||||||||||||
Other sales | (125,068 | ) | 4.0 | % | (36,297 | ) | 1.2 | % | (141,882 | ) | 2.2 | % | (26,272 | ) | 0.6 | % | (22,304 | ) | 0.4 | % | (33,193 | ) | 1.2 | % | (164,186 | ) | 1.5 | % | (59,465 | ) | 0.8 | % | ||||||||||||||||||||||||||||||||
Inventory write-down | (598,467 | ) | 19.7 | % | - | - | (598,467 | ) | 13.3 | % | - | - | 11,440 | -0.4 | % | - | - | (587,027 | ) | 8.1 | % | |||||||||||||||||||||||||||||||||||||||||||
Total cost of goods sold | $ | (3,090,275 | ) | 100.00 | % | (3,036,237 | ) | 100.00 | % | $ | (6,366,075 | ) | 100.00 | % | $ | (4,503,840 | ) | 100.00 | % | $ | (5,045,364 | ) | 100.00 | % | (2,730,920 | ) | 100.00 | % | $ | (11,411,439 | ) | 100.00 | % | $ | (7,234,760 | ) | 100.00 | % |
Three Months ended June 30, | Six Months ended June 30, | Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
Net loss | $ | (14,077,166 | ) | $ | (13,705,920 | ) | $ | (25,191,143 | ) | $ | (23,054,289 | ) | $ | (16,103,199 | ) | $ | (15,088,738 | ) | $ | (41,294,342 | ) | $ | (38,143,026 | ) | ||||||||
Interest expense, net | (1,262 | ) | (222,672 | ) | 53,153 | (286,873 | ) | 84,573 | 110,659 | 137,726 | (176,214 | ) | ||||||||||||||||||||
Income tax expense | 25,468 | (48,861 | ) | 25,468 | (48,861 | ) | (384 | ) | (43,366 | ) | 25,084 | (92,228 | ) | |||||||||||||||||||
Depreciation and amortization | 455,779 | 344,507 | 786,411 | 484,937 | 425,218 | 431,290 | 1,213,489 | 916,227 | ||||||||||||||||||||||||
Share-based compensation expense | 1,256,484 | 1,110,440 | 2,410,291 | 1,309,856 | 2,154,710 | 1,314,446 | 4,565,001 | 2,624,302 | ||||||||||||||||||||||||
Loss on redemption of convertible promissory notes | (1,900 | ) | 101 | - | (966 | ) | - | (865 | ) | - | ||||||||||||||||||||||
Loss on exercise of warrants | 14,745 | 227,615 | 1,134 | - | 228,749 | |||||||||||||||||||||||||||
Convertible bond issuance fee | - | 5,589,336 | - | 5,589,336 | ||||||||||||||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | (199,697 | ) | (73,425 | ) | - | (15,143 | ) | (4,280,538 | ) | (88,568 | ) | (4,280,538 | ) | |||||||||||||||||||
Loss from acquisition of Antric | 1,316,772 | - | 1,316,772 | - | ||||||||||||||||||||||||||||
Expenses related to TME Acquisition | 348,987 | 348,987 | - | - | -- | 348,987 | ||||||||||||||||||||||||||
Expenses related to one-off payment inherited from the original Naked Brand Group | 8,299,178 | - | - | - | 8,299,178 | |||||||||||||||||||||||||||
Adjusted EBITDA | (12,527,549 | ) | (12,173,520 | ) | $ | (21,761,529 | ) | $ | (12,947,065 | ) | (12,135,425 | ) | (11,966,911 | ) | $ | (33,896,954 | ) | $ | (24,913,976 | ) |
• | Other risks discussed in the section titled “Risk Factors.” |
Six Months Ended June 30, | Nine Months ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Expressed in U.S. Dollars) | (Unaudited) | (Unaudited) | ||||||||||||||
Net cash used in operating activities | $ | (35,499,138 | ) | $ | (29,071,262 | ) | $ | (45,588,906 | ) | $ | (47,682,208 | ) | ||||
Net cash (used in) provided by investing activities | (9,988,522 | ) | (17,112,002 | ) | (12,913,713 | ) | (30,687,751 | ) | ||||||||
Net cash provided by financing activities | (45,583,321 | ) | (30,960,641 | ) | (48,136,596 | ) | 23,158,355 | |||||||||
Effect of exchange rate changes on cash | (2,543,188 | ) | (981,467 | ) | (2,614,204 | ) | (5,456,868 | ) | ||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (93,614,168 | ) | (78,125,372 | ) | (109,253,419 | ) | (60,668,472 | ) | ||||||||
Cash and cash equivalents, and restricted cash at beginning of the year | 154,096,801 | 261,664,962 | 154,096,801 | 261,664,962 | ||||||||||||
Cash and cash equivalents, and restricted cash at end of the period | $ | 60,482,633 | $ | 183,539,590 | $ | 44,843,382 | $ | 200,996,490 |
For the Six Months Ended June 30, | For the Nine Months ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Vehicles sales | $ | 7,226,049 | $ | 4,852,930 | $ | 12,732,639 | $ | 6,766,480 | ||||||||
Spare-parts sales | 344,702 | 84,626 | 586,632 | 207,860 | ||||||||||||
Other service income | 137,313 | 97,766 | 151,624 | 157,572 | ||||||||||||
Net revenues | $ | 7,708,064 | $ | 5,035,322 | $ | 13,470,895 | $ | 7,131,912 |
For the Six Months Ended June 30, | For the Nine Months ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Primary geographical markets | Primary geographical markets | |||||||||||||||
Europe | $ | 5,531,486 | $ | 2,963,630 | $ | 10,035,492 | $ | 5,621,459 | ||||||||
Asia | 2,079,876 | 1,644,209 | 2,983,555 | 1,052,819 | ||||||||||||
America | 96,702 | 427,483 | 451,848 | 457,634 | ||||||||||||
Total | $ | 7,708,064 | $ | 5,035,322 | $ | 13,470,895 | $ | 7,131,912 |
June 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
Accounts receivable, net | $ | 2,646,333 | $ | 565,398 | $ | 4,645,738 | $ | 565,398 | ||||||||
Contractual liabilities | $ | 3,314,661 | $ | 2,388,480 | $ | 3,084,737 | $ | 2,388,480 |
For the Periods Ended | ||||||||||||||||||||||||
Unaudited 30 June 2023 | 31 December 2022 | |||||||||||||||||||||||
Balance Sheet: | U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | ||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | 60,390,172 | - | 60,390,172 | 153,966,777 | - | 153,966,777 | ||||||||||||||||||
Restricted cash | 92,461 | - | 92,461 | 130,024 | - | 130,024 | ||||||||||||||||||
Accounts receivable, net | 2,646,333 | - | 2,646,333 | 565,398 | - | 565,398 | ||||||||||||||||||
Inventories | 41,798,511 | - | 41,798,511 | 31,843,371 | - | 31,843,371 | ||||||||||||||||||
Prepayment and other current assets | 18,339,914 | - | 18,339,914 | 16,138,330 | - | 16,138,330 | ||||||||||||||||||
Deferred cost-current | 10,273 | - | 10,273 | - | - | - | ||||||||||||||||||
Amount due from a related party | 212,320 | - | 212,320 | 366,936 | - | 366,936 | ||||||||||||||||||
Total current assets | 123,489,984 | - | 123,489,984 | 203,010,836 | - | 203,010,836 | ||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||
Long-term investment, net | 4,959,769 | - | 4,959,769 | 5,325,741 | - | 5,325,741 | ||||||||||||||||||
Investment in equity securities | 30,472,663 | - | 30,472,663 | 29,759,195 | - | 29,759,195 | ||||||||||||||||||
Property, plant and equipment, net | 18,508,847 | - | 18,508,847 | 14,962,591 | - | 14,962,591 | ||||||||||||||||||
Intangible assets, net | 6,439,333 | - | 6,439,333 | 4,563,792 | - | 4,563,792 | ||||||||||||||||||
Right-of-use assets | 19,734,961 | - | 19,734,961 | 8,187,149 | - | 8,187,149 | ||||||||||||||||||
Deferred cost - non-current | 207,974 | - | 207,974 | - | - | - | ||||||||||||||||||
Other non-current assets, net | 2,232,206 | - | 2,232,206 | 2,039,012 | - | 2,039,012 | ||||||||||||||||||
Total non-current assets | 82,555,753 | - | 82,555,753 | 64,837,480 | - | 64,837,480 | ||||||||||||||||||
Total assets | 206,045,737 | - | 206,045,737 | 267,848,316 | - | 267,848,316 | ||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | 3,364,228 | - | 3,364,228 | 3,383,021 | - | 3,383,021 | ||||||||||||||||||
Accrued expense and other current liabilities | 3,543,840 | - | 3,543,840 | 5,048,641 | - | 5,048,641 | ||||||||||||||||||
Contractual liabilities | 3,314,661 | - | 3,314,661 | 2,388,480 | - | 2,388,480 | ||||||||||||||||||
Operating lease liabilities, current | 4,303,890 | - | 4,303,890 | 1,313,334 | - | 1,313,334 | ||||||||||||||||||
Convertible promissory notes | 11,904,153 | - | 11,904,153 | 57,372,827 | - | 57,372,827 | ||||||||||||||||||
Deferred government grant, current | 53,046 | - | 53,046 | 26,533 | - | 26,533 | ||||||||||||||||||
Amount due to related parties | 41,302 | - | 41,302 | 716,372 | - | 716,372 | ||||||||||||||||||
Total current liabilities | 26,525,120 | - | 26,525,120 | 70,249,208 | - | 70,249,208 | ||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||
Deferred government grant, non-current | 968,079 | - | 968,079 | 497,484 | - | 497,484 | ||||||||||||||||||
Derivative liability - investor warrant | 12,205,830 | - | 12,205,830 | 14,334,104 | - | 14,334,104 | ||||||||||||||||||
Derivative liability - placement agent warrant | 3,456,137 | - | 3,456,137 | 3,456,404 | - | 3,456,404 | ||||||||||||||||||
Operating lease liabilities, non-current | 16,001,387 | - | 16,001,387 | 7,421,582 | - | 7,421,582 | ||||||||||||||||||
Total non-current liabilities | 32,631,433 | - | 32,631,433 | 25,709,574 | - | 25,709,574 | ||||||||||||||||||
Total liabilities | 59,156,553 | - | 59,156,553 | 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 June 30, 2023 and December 31, 2022, respectively) | - | - | - | - | - | - | ||||||||||||||||||
Additional paid-in capital | 399,517,411 | 182,274,066 | (1) | 581,791,477 | 397,497,817 | 182,125,475 | (1) | 579,623,292 | ||||||||||||||||
Accumulated other comprehensive loss | (7,770,097 | ) | 7,770,097 | - | (5,306,972 | ) | 5,306,972 | - | ||||||||||||||||
Reserves | - | 19,385,768 | (2) | 19,385,768 | - | 21,997,484 | (2) | 21,997,484 | ||||||||||||||||
Accumulated deficit | (244,856,609 | ) | (209,429,931 | ) | (454,286,540 | ) | (219,824,176 | ) | (209,429,931 | ) | (429,254,107 | ) | ||||||||||||
Total Stockholders' Equity | 146,890,705 | - | 146,890,705 | 172,366,669 | - | 172,366,669 | ||||||||||||||||||
Non-controlling interests | (1,521 | ) | - | (1,521 | ) | (477,135 | ) | - | (477,135 | ) | ||||||||||||||
Total Equity | 146,889,184 | - | 146,889,184 | 171,889,534 | - | 171,889,534 | ||||||||||||||||||
Total Liabilities and Equity | 206,045,737 | - | 206,045,737 | 267,848,316 | - | 267,848,316 |
For the Three Months Ended | ||||||||||||||||||||||||
Unaudited 30 June 2023 | Unaudited 30 June 2022 | |||||||||||||||||||||||
U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | |||||||||||||||||||
Net revenues | 4,237,520 | - | 4,237,520 | 3,204,689 | - | 3,204,689 | ||||||||||||||||||
Cost of goods sold | (3,090,275 | ) | - | (3,090,275 | ) | (3,036,237 | ) | - | (3,036,237 | ) | ||||||||||||||
Gross profit | 1,147,245 | - | 1,147,245 | 168,452 | - | 168,452 | ||||||||||||||||||
Selling and marketing expenses | (2,742,749 | ) | - | (2,742,749 | ) | (1,531,460 | ) | - | (1,531,460 | ) | ||||||||||||||
General and administrative expenses | (9,285,213 | ) | - | (9,285,213 | ) | (12,014,453 | ) | - | (12,014,453 | ) | ||||||||||||||
Research and development expenses | (2,143,070 | ) | - | (2,143,070 | ) | (1,389,153 | ) | - | (1,389,153 | ) | ||||||||||||||
Total operating expenses | (14,171,032 | ) | - | (14,171,032 | ) | (14,935,066 | ) | - | (14,935,066 | ) | ||||||||||||||
Loss from operations | (13,023,787 | ) | - | (13,023,787 | ) | (14,766,614 | ) | - | (14,766,614 | ) | ||||||||||||||
Interest income (expense), net | 1,262 | - | 1,262 | 222,672 | - | 222,672 | ||||||||||||||||||
(Loss) income from long-term investment | (148,645 | ) | - | (148,645 | ) | 4,941 | - | 4,941 | ||||||||||||||||
Impairment of long-term investment | (8,538 | ) | (8,538 | ) | - | - | - | |||||||||||||||||
Gain (loss) on redemption of convertible promissory notes | 1,900 | - | 1,900 | - | - | - | ||||||||||||||||||
Loss on exercise of warrants | (14,745 | ) | - | (14,745 | ) | - | - | - | ||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 199,698 | - | 199,698 | - | - | - | ||||||||||||||||||
Change in fair value of equity securities | 60,452 | 60,452 | - | - | - | |||||||||||||||||||
Other (expense) income, net | (1,119,295 | ) | - | (1,119,295 | ) | 784,220 | - | 784,220 | ||||||||||||||||
Loss before income taxes | (14,051,698 | ) | - | (14,051,698 | ) | (13,754,781 | ) | - | (13,754,781 | ) | ||||||||||||||
Income tax expense | (25,468 | ) | - | (25,468 | ) | 48,861 | - | 48,861 | ||||||||||||||||
Net loss | (14,077,166 | ) | - | (14,077,166 | ) | (13,705,920 | ) | - | (13,705,920 | ) | ||||||||||||||
Less: net loss attributable to non-controlling interests | (2,682 | ) | - | (2,682 | ) | (633,922 | ) | - | (633,922 | ) | ||||||||||||||
Net loss attributable to the Company’s shareholders | (14,074,484 | ) | - | (14,074,484 | ) | (13,071,998 | ) | - | (13,071,998 | ) | ||||||||||||||
- | ||||||||||||||||||||||||
Other comprehensive loss | - | |||||||||||||||||||||||
Foreign currency translation adjustment | (2,824,971 | ) | - | (2,824,971 | ) | (4,078,240 | ) | - | (4,078,240 | ) | ||||||||||||||
Total comprehensive loss | (16,902,137 | ) | - | (16,902,137 | ) | (17,784,160 | ) | - | (17,784,160 | ) | ||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests | (2,683 | ) | - | (2,683 | ) | (483,216 | ) | - | (483,216 | ) | ||||||||||||||
Total comprehensive loss attributable to the Company’s shareholders | (16,899,454 | ) | - | (16,899,454 | ) | (17,300,944 | ) | - | (17,300,944 | ) |
For the Six Months Ended | ||||||||||||||||||||||||
Unaudited 30 June 2023 | Unaudited 30 June 2022 | |||||||||||||||||||||||
U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | |||||||||||||||||||
Net revenues | 7,708,064 | - | 7,708,064 | 5,035,322 | - | 5,035,322 | ||||||||||||||||||
Cost of goods sold | (6,366,075 | ) | - | (6,366,075 | ) | (4,503,840 | ) | - | (4,503,840 | ) | ||||||||||||||
Gross (Loss) Profit | 1,341,989 | - | 1,341,989 | 531,482 | - | 531,482 | ||||||||||||||||||
Selling and marketing expenses | (4,611,734 | ) | - | (4,611,734 | ) | (2,626,568 | ) | - | (2,626,568 | ) | ||||||||||||||
General and administrative expenses | (16,643,477 | ) | - | (16,643,477 | ) | (20,226,284 | ) | - | (20,226,284 | ) | ||||||||||||||
Research and development expenses | (3,712,989 | ) | - | (3,712,989 | ) | (1,814,512 | ) | - | (1,814,512 | ) | ||||||||||||||
Total operating expenses | (24,968,200 | ) | - | (24,968,200 | ) | (24,667,364 | ) | - | (24,667,364 | ) | ||||||||||||||
Loss from operations | (23,626,211 | ) | - | (23,626,211 | ) | (24,135,882 | ) | - | (24,135,882 | ) | ||||||||||||||
Interest (expense) income, net | (53,153 | ) | - | (53,153 | ) | 286,873 | - | 286,873 | ||||||||||||||||
(Loss) income from long-term investment | (129,603 | ) | - | (129,603 | ) | 10,878 | - | 10,878 | ||||||||||||||||
Impairment of long-term investment | (1,154,666 | ) | (1,154,666 | ) | - | - | - | |||||||||||||||||
Loss on redemption of convertible promissory notes | (101 | ) | - | (101 | ) | - | - | - | ||||||||||||||||
Loss on exercise of warrants | (227,615 | ) | (227,615 | ) | - | - | - | |||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 73,425 | - | 73,425 | - | - | - | ||||||||||||||||||
Change in fair value of equity securities | 713,468 | 713,468 | - | - | - | |||||||||||||||||||
Other (expense) income, net | (761,219 | ) | - | (761,219 | ) | 734,981 | - | 734,981 | ||||||||||||||||
Loss before income taxes | (25,165,675 | ) | - | (25,165,675 | ) | (23,103,150 | ) | - | (23,103,150 | ) | ||||||||||||||
Income tax expense | (25,468 | ) | - | (25,468 | ) | 48,861 | - | 48,861 | ||||||||||||||||
Net loss | (25,191,143 | ) | - | (25,191,143 | ) | (23,054,289 | ) | - | (23,054,289 | ) | ||||||||||||||
Less: net loss attributable to non-controlling interests | (158,710 | ) | - | (158,710 | ) | (670,641 | ) | - | (670,641 | ) | ||||||||||||||
Net loss attributable to the Company’s shareholders | (25,032,433 | ) | - | (25,032,433 | ) | (22,383,648 | ) | - | (22,383,648 | ) | ||||||||||||||
- | ||||||||||||||||||||||||
Other comprehensive loss | - | |||||||||||||||||||||||
Foreign currency translation adjustment | (2,487,693 | ) | - | (2,487,693 | ) | (3,825,086 | ) | - | (3,825,086 | ) | ||||||||||||||
Total comprehensive loss | (27,678,836 | ) | - | (27,678,836 | ) | (26,879,375 | ) | - | (26,879,375 | ) | ||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests | (183,278 | ) | - | (183,278 | ) | (540,805 | ) | - | (540,805 | ) | ||||||||||||||
Total comprehensive loss attributable to the Company’s shareholders | (27,495,558 | ) | - | (27,495,558 | ) | (26,338,570 | ) | - | (26,338,570 | ) |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
For the Periods Ended | ||||||||||||||||||||||||
Unaudited 30 September 2023 | 31 December 2022 | |||||||||||||||||||||||
Balance Sheet: | U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | ||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | 44,645,341 | - | 44,645,341 | 153,966,777 | - | 153,966,777 | ||||||||||||||||||
Restricted cash | 198,041 | - | 198,041 | 130,024 | - | 130,024 | ||||||||||||||||||
Accounts receivable, net | 4,645,738 | - | 4,645,738 | 565,398 | - | 565,398 | ||||||||||||||||||
Inventories | 43,081,772 | - | 43,081,772 | 31,843,371 | - | 31,843,371 | ||||||||||||||||||
Prepayment and other current assets | 17,360,617 | - | 17,360,617 | 16,138,330 | - | 16,138,330 | ||||||||||||||||||
Deferred cost -current | 14,281 | - | 14,281 | - | - | - | ||||||||||||||||||
Amounts due from a related party | 210,335 | - | 210,335 | 366,936 | - | 366,936 | ||||||||||||||||||
Total current assets | 110,156,125 | - | 110,156,125 | 203,010,836 | - | 203,010,836 | ||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||
Long-term investment, net | 3,557,697 | - | 3,557,697 | 5,325,741 | - | 5,325,741 | ||||||||||||||||||
Investment in equity securities | 28,593,070 | - | 28,593,070 | 29,759,195 | - | 29,759,195 | ||||||||||||||||||
Property, plant and equipment, net | 20,132,381 | - | 20,132,381 | 14,962,591 | - | 14,962,591 | ||||||||||||||||||
Intangible assets, net | 6,384,532 | - | 6,384,532 | 4,563,792 | - | 4,563,792 | ||||||||||||||||||
Right-of-use assets | 20,679,376 | - | 20,679,376 | 8,187,149 | - | 8,187,149 | ||||||||||||||||||
Deferred cost - non-current | 206,700 | - | 206,700 | - | - | - | ||||||||||||||||||
Other non-current assets, net | 2,152,968 | - | 2,152,968 | 2,039,012 | - | 2,039,012 | ||||||||||||||||||
Total non-current assets | 81,706,724 | - | 81,706,724 | 64,837,480 | - | 64,837,480 | ||||||||||||||||||
Total assets | 191,862,849 | - | 191,862,849 | 267,848,316 | - | 267,848,316 | ||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Accounts payable | 4,842,645 | - | 4,842,645 | 3,383,021 | - | 3,383,021 | ||||||||||||||||||
Accrued expense and other current liabilities | 3,663,756 | - | 3,663,756 | 5,048,641 | - | 5,048,641 | ||||||||||||||||||
Contractual liabilities | 3,084,737 | - | 3,084,737 | 2,388,480 | - | 2,388,480 | ||||||||||||||||||
Operating lease liabilities, current | 4,548,226 | - | 4,548,226 | 1,313,334 | - | 1,313,334 | ||||||||||||||||||
Convertible promissory notes | 9,953,562 | - | 9,953,562 | 57,372,827 | - | 57,372,827 | ||||||||||||||||||
Deferred government grant, current | 52,721 | - | 52,721 | 26,533 | - | 26,533 | ||||||||||||||||||
Amount due to related parties | 37,951 | - | 37,951 | 716,372 | - | 716,372 | ||||||||||||||||||
Total current liabilities | 26,183,598 | - | 26,183,598 | 70,249,208 | - | 70,249,208 | ||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||
Deferred government grant, non-current | 948,971 | - | 948,971 | 497,484 | - | 497,484 | ||||||||||||||||||
Derivative liability - investor warrant | 12,191,457 | - | 12,191,457 | 14,334,104 | - | 14,334,104 | ||||||||||||||||||
Derivative liability - placement agent warrant | 3,455,328 | - | 3,455,328 | 3,456,404 | - | 3,456,404 | ||||||||||||||||||
Operating lease liabilities, non-current | 17,074,145 | - | 17,074,145 | 7,421,582 | - | 7,421,582 | ||||||||||||||||||
Total non-current liabilities | 33,669,901 | - | 33,669,901 | 25,709,574 | - | 25,709,574 | ||||||||||||||||||
Total liabilities | 59,853,499 | - | 59,853,499 | 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 September 30, 2023 and December 31, 2022, respectively) | - | - | - | - | - | - | ||||||||||||||||||
Additional paid-in capital | 401,672,121 | 180,119,356 | (1) | 581,791,477 | 397,497,817 | 182,125,475 | (1) | 579,623,292 | ||||||||||||||||
Accumulated other comprehensive loss | (8,701,442 | ) | 8,701,442 | - | (5,306,972 | ) | 5,306,972 | - | ||||||||||||||||
Reserves | - | 20,609,133 | (2) | 20,609,133 | - | 21,997,484 | (2) | 21,997,484 | ||||||||||||||||
Accumulated deficit | (260,959,274 | ) | (209,429,931 | ) | (470,389,205 | ) | (219,824,176 | ) | (209,429,931 | ) | (429,254,107 | ) | ||||||||||||
Total Stockholders' Equity | 132,011,405 | - | 132,011,405 | 172,366,669 | - | 172,366,669 | ||||||||||||||||||
Non-controlling interests | (2,055 | ) | - | (2,055 | ) | (477,135 | ) | - | (477,135 | ) | ||||||||||||||
Total Equity | 132,009,350 | - | 132,009,350 | 171,889,534 | - | 171,889,534 | ||||||||||||||||||
Total Liabilities and Equity | 191,862,849 | - | 191,862,849 | 267,848,316 | - | 267,848,316 |
(1) | Includes (i) $(31,869,457) (2022: $(27,304,456)) in share-based compensation payments. (ii) $2,558,882 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 $(8,701,442) (2022: $(5,306,972)), (ii) a reclassification of Additional paid-in capital under U.S. GAAP of $31,869,457 (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 $(2,558,882) recognized in 2023 from the acquisition of 35% of CAE’s equity interest to Reserve under IFRS. |
For the Three Months Ended | ||||||||||||||||||||||||
Unaudited 30 September 2023 | Unaudited 30 September 2022 | |||||||||||||||||||||||
U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | |||||||||||||||||||
Net revenues | 5,762,831 | - | 5,762,831 | 2,096,590 | - | 2,096,590 | ||||||||||||||||||
Cost of goods sold | (5,045,364 | ) | - | (5,045,364 | ) | (2,730,920 | ) | - | (2,730,920 | ) | ||||||||||||||
Gross profit | 717,467 | - | 717,467 | (634,330 | ) | - | (634,330 | ) | ||||||||||||||||
Selling and marketing expenses | (2,626,829 | ) | - | (2,626,829 | ) | (1,633,340 | ) | - | (1,633,340 | ) | ||||||||||||||
General and administrative expenses | (9,071,910 | ) | - | (9,071,910 | ) | (6,220,227 | ) | - | (6,220,227 | ) | ||||||||||||||
Research and development expenses | (1,634,796 | ) | - | (1,634,796 | ) | (1,796,268 | ) | - | (1,796,268 | ) | ||||||||||||||
Total operating expenses | (13,333,535 | ) | - | (13,333,535 | ) | (9,649,835 | ) | - | (9,649,835 | ) | ||||||||||||||
Loss from operations | (12,616,068 | ) | - | (12,616,068 | ) | (10,284,165 | ) | - | (10,284,165 | ) | ||||||||||||||
Interest (expense) income, net | (84,573 | ) | - | (84,573 | ) | (110,659 | ) | - | (110,659 | ) | ||||||||||||||
(Loss) Income from long-term investment | (107,069 | ) | - | (107,069 | ) | 36,441 | - | 36,441 | ||||||||||||||||
Loss from acquisition of Antric Gmbh | (1,316,772 | ) | - | (1,316,772 | ) | - | - | - | ||||||||||||||||
Impairment of long-term investment | (2,668 | ) | - | (2,668 | ) | - | - | - | ||||||||||||||||
Gain on redemption of convertible promissory notes | 966 | - | 966 | - | - | - | ||||||||||||||||||
Loss on exercise of warrants | (1,134 | ) | - | (1,134 | ) | - | - | - | ||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 15,143 | - | 15,143 | 4,280,538 | - | 4,280,538 | ||||||||||||||||||
Convertible bond issuance cost | - | - | - | (5,589,336 | ) | - | (5,589,336 | ) | ||||||||||||||||
Change in fair value of equity securities | (1,879,593 | ) | - | (1,879,593 | ) | 19,052 | - | 19,052 | ||||||||||||||||
Other expense, net | (111,815 | ) | - | (111,815 | ) | (3,483,975 | ) | - | (3,483,975 | ) | ||||||||||||||
Loss before income taxes | (16,103,583 | ) | - | (16,103,583 | ) | (15,132,104 | ) | - | (15,132,104 | ) | ||||||||||||||
Income tax expense | 384 | - | 384 | 43,366 | - | 43,366 | ||||||||||||||||||
Net loss | (16,103,199 | ) | - | (16,103,199 | ) | (15,088,738 | ) | - | (15,088,738 | ) | ||||||||||||||
Less: net loss attributable to non-controlling interests | (534 | ) | - | (534 | ) | (668,512 | ) | - | (668,512 | ) | ||||||||||||||
Net loss attributable to the Company’s shareholders | (16,102,665 | ) | - | (16,102,665 | ) | (14,420,226 | ) | - | (14,420,226 | ) | ||||||||||||||
- | ||||||||||||||||||||||||
Other comprehensive loss | - | |||||||||||||||||||||||
Foreign currency translation adjustment | (931,345 | ) | - | (931,345 | ) | (3,686,137 | ) | - | (3,686,137 | ) | ||||||||||||||
Total comprehensive loss | (17,034,544 | ) | - | (17,034,544 | ) | (18,774,875 | ) | - | (18,774,875 | ) | ||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests | (534 | ) | - | (534 | ) | (454,156 | ) | - | (454,156 | ) | ||||||||||||||
Total comprehensive loss attributable to the Company’s shareholders | (17,034,010 | ) | - | (17,034,010 | ) | (18,320,719 | ) | - | (18,320,719 | ) |
For the Nine Months Ended | ||||||||||||||||||||||||
Unaudited 30 September 2023 | Unaudited 30 September 2022 | |||||||||||||||||||||||
U.S. GAAP | IFRS Difference | IFRS | U.S. GAAP | IFRS Difference | IFRS | |||||||||||||||||||
Net revenues | 13,470,895 | - | 13,470,895 | 7,131,912 | - | 7,131,912 | ||||||||||||||||||
Cost of goods sold | (11,411,439 | ) | - | (11,411,439 | ) | (7,234,760 | ) | - | (7,234,760 | ) | ||||||||||||||
Gross profit | 2,059,456 | - | 2,059,456 | (102,848 | ) | - | (102,848 | ) | ||||||||||||||||
Selling and marketing expenses | (7,238,563 | ) | - | (7,238,563 | ) | (4,259,908 | ) | - | (4,259,908 | ) | ||||||||||||||
General and administrative expenses | (25,715,387 | ) | - | (25,715,387 | ) | (26,446,511 | ) | - | (26,446,511 | ) | ||||||||||||||
Research and development expenses | (5,347,785 | ) | - | (5,347,785 | ) | (3,610,780 | ) | - | (3,610,780 | ) | ||||||||||||||
Total operating expenses | (38,301,735 | ) | - | (38,301,735 | ) | (34,317,199 | ) | - | (34,317,199 | ) | ||||||||||||||
Loss from operations | (36,242,279 | ) | - | (36,242,279 | ) | (34,420,047 | ) | - | (34,420,047 | ) | ||||||||||||||
Interest (expense) income, net | (137,726 | ) | - | (137,726 | ) | 176,214 | - | 176,214 | ||||||||||||||||
(Loss) income from long-term investment | (236,672 | ) | - | (236,672 | ) | 47,319 | - | 47,319 | ||||||||||||||||
Loss from acquisition of Antric Gmbh | (1,316,772 | ) | - | (1,316,772 | ) | - | - | - | ||||||||||||||||
Impairment of long-term investment | (1,157,334 | ) | - | (1,157,334 | ) | - | - | - | ||||||||||||||||
Gain on redemption of convertible promissory notes | 865 | - | 865 | - | - | - | ||||||||||||||||||
Loss on exercise of warrants | (228,749 | ) | - | (228,749 | ) | - | - | - | ||||||||||||||||
Change in fair value of convertible promissory notes and derivative liability | 88,568 | - | 88,568 | 4,280,538 | - | 4,280,538 | ||||||||||||||||||
Convertible bond issuance cost | - | - | - | (5,589,336 | ) | - | (5,589,336 | ) | ||||||||||||||||
Change in fair value of equity securities | (1,166,125 | ) | - | (1,166,125 | ) | 19,052 | - | 19,052 | ||||||||||||||||
Other expense, net | (873,034 | ) | - | (873,034 | ) | (2,748,994 | ) | - | (2,748,994 | ) | ||||||||||||||
Loss before income taxes | (41,269,258 | ) | - | (41,269,258 | ) | (38,235,254 | ) | - | (38,235,254 | ) | ||||||||||||||
Income tax (expense) benefit | (25,084 | ) | - | (25,084 | ) | 92,228 | - | 92,228 | ||||||||||||||||
Net loss | (41,294,342 | ) | - | (41,294,342 | ) | (38,143,026 | ) | - | (38,143,026 | ) | ||||||||||||||
Less: net loss attributable to non-controlling interests | (159,244 | ) | - | (159,244 | ) | (1,339,153 | ) | - | (1,339,153 | ) | ||||||||||||||
Net loss attributable to the Company’s shareholders | (41,135,098 | ) | - | (41,135,098 | ) | (36,803,873 | ) | - | (36,803,873 | ) | ||||||||||||||
- | ||||||||||||||||||||||||
Other comprehensive loss | - | |||||||||||||||||||||||
Foreign currency translation adjustment | (3,419,038 | ) | - | (3,419,038 | ) | (7,511,222 | ) | - | (7,511,222 | ) | ||||||||||||||
Total comprehensive loss | (44,713,380 | ) | - | (44,713,380 | ) | (45,654,248 | ) | - | (45,654,248 | ) | ||||||||||||||
Less: total comprehensive loss attributable to non-controlling interests | (183,812 | ) | - | (183,812 | ) | (994,960 | ) | - | (994,960 | ) | ||||||||||||||
Total comprehensive loss attributable to the Company’s shareholders | (44,529,568 | ) | - | (44,529,568 | ) | (44,659,288 | ) | - | (44,659,288 | ) |
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 Company 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). |
ITEM 1. | LEGAL PROCEEDINGS |
1) | On February 6, 2023, Ronda commenced a lawsuit against Newlongma in the Hangzhou Yuhang District People's Court, under which Ronda plead for (i) the termination of the vehicle purchase orders that Ronda placed with Newlongma on February 26, 2022; (ii) recovery of advance payments for total amount of approximately $438,702; and (iii) compensation for damages caused equal to approximately $453,290. The case mediation date was March 3, 2023 and was subsequently docketed on July 3, 2023. Since then, Newlongma filed a jurisdictional objection, and the Court dismissed that jurisdictional objection. As of the date of this report on Form 10-Q, the proceeding trial date has not been set. |
2) | On March 30, 2023, Ronda filed a lawsuit against Newlongma in the Hangzhou Yuhang District People's Court, pleading for compensation of damages for cost of auto parts for approximately $301,514. The case was docketed on July 19, 2023. and the trial date was set on August 15, 2023. |
3) | On May 8, 2023, Newlongma filed a complaint against Ronda in the Longyan Yongding District People's Court, pleading for (i) termination of the cooperation agreement between Ronda and Newlongma; (ii) retention of the advance payments by Ronda for total amount of approximately $543,977; and (iii) Ronda’s payment of outstanding bills for $604,396. Ronda filed a jurisdictional objection, and the Court dismissed that jurisdictional objection. Ronda has since appealed that ruling. As of the date of this report on Form 10-Q, the proceeding trial date has not been set yet. |
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: | ||
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) |