Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-38544 | ||
Entity Registrant Name | CENNTRO ELECTRIC GROUP LIMITED | ||
Entity Central Index Key | 0001707919 | ||
Entity Incorporation, State or Country Code | C3 | ||
Entity Tax Identification Number | 00-0000000 | ||
Entity Address, Address Line One | 501 Okerson Road | ||
Entity Address, City or Town | Freehold | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07728 | ||
City Area Code | 732 | ||
Local Phone Number | 820-6757 | ||
Title of 12(b) Security | Ordinary Shares | ||
Trading Symbol | CENN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 285,558,362 | ||
Entity Common Stock, Shares Outstanding | 304,449,091 | ||
Auditor Firm ID | 2729 | ||
Auditor Name | Guangzhou Good Faith CPA LTD | ||
Auditor Location | Guangzhou, People's Republic of China |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 153,966,777 | $ 261,069,414 |
Restricted cash | 130,024 | 595,548 |
Accounts receivable, net | 565,398 | 2,047,560 |
Inventories | 31,843,371 | 8,139,816 |
Prepayment and other current assets | 16,138,330 | 7,989,607 |
Amounts due from related parties - current | 366,936 | 1,232,634 |
Total current assets | 203,010,836 | 281,074,579 |
Non-current assets: | ||
Equity method investments | 5,325,741 | 329,197 |
Investment in equity securities | 29,759,195 | 0 |
Property, plant and equipment, net | 14,962,591 | 1,301,226 |
Intangible assets, net | 4,563,792 | 3,313 |
Right-of-use assets | 8,187,149 | 1,669,381 |
Amount due from related parties - non-current | 0 | 4,834,973 |
Other non-current assets, net | 2,039,012 | 2,151,700 |
Total non-current assets | 64,837,480 | 10,289,790 |
Total Assets | 267,848,316 | 291,364,369 |
Current liabilities: | ||
Accounts payable | 3,383,021 | 3,678,823 |
Accrued expenses and other current liabilities | 5,048,641 | 4,183,263 |
Contractual liabilities | 2,388,480 | 1,943,623 |
Operating lease liabilities, current | 1,313,334 | 839,330 |
Convertible promissory notes | 57,372,827 | 0 |
Deferred government grant, current | 26,533 | 0 |
Amounts due to related parties | 716,372 | 15,756,028 |
Total current liabilities | 70,249,208 | 26,401,067 |
Non-current liabilities: | ||
Other non-current liabilities | 0 | 700,000 |
Deferred government grant, non-current | 497,484 | 0 |
Derivative liability - investor warrant | 14,334,104 | 0 |
Derivative liability - placement agent warrant | 3,456,404 | 0 |
Operating lease liabilities, non-current | 7,421,582 | 489,997 |
Total non-current liabilities | 25,709,574 | 1,189,997 |
Total liabilities | 95,958,782 | 27,591,064 |
Commitments and contingencies | ||
EQUITY | ||
Ordinary shares (No par value; 300,841,995 and 261,256,254 shares issued and outstanding as of December 31, 2022 and 2021, respectively) | 0 | 0 |
Additional paid in capital | 397,497,817 | 374,901,939 |
Accumulated deficit | (219,824,176) | (109,735,935) |
Accumulated other comprehensive loss | (5,306,972) | (1,392,699) |
Total equity attributable to shareholders | 172,366,669 | 263,773,305 |
Non-controlling interests | (477,135) | 0 |
Total Equity | 171,889,534 | 263,773,305 |
Total Liabilities and Equity | $ 267,848,316 | $ 291,364,369 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
EQUITY | ||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 |
Ordinary shares, shares issued (in shares) | 300,841,995 | 261,256,254 |
Ordinary shares, shares outstanding (in shares) | 300,841,995 | 261,256,254 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
Net revenues | $ 8,941,835 | $ 8,576,832 | |
Cost of goods sold | (9,455,805) | (7,073,391) | |
Gross (loss) profit | (513,970) | 1,503,441 | |
OPERATING EXPENSES: | |||
Selling and marketing expenses | (6,525,255) | (1,034,242) | |
General and administrative expenses | (32,822,709) | (14,972,682) | |
Research and development expenses | (6,362,770) | (1,478,256) | |
Provision for doubtful accounts | (5,986,308) | (469,702) | |
Impairment loss of right-of-use assets | (371,695) | 0 | |
Impairment loss of intangible assets | (2,995,440) | 0 | |
Reverse of deferred tax liabilities | 898,632 | 0 | |
Impairment loss of property, plant and equipment | (550,402) | (6,215) | |
Total operating expenses | (54,715,947) | (17,961,097) | |
Loss from operations | (55,229,917) | (16,457,656) | |
OTHER EXPENSE: | |||
Interest expense, net | (844,231) | (1,069,581) | |
Loss on redemption of convertible promissory notes | (7,435) | 0 | |
(Loss) income from equity method investments | (12,651) | 15,167 | |
Change in fair value of convertible promissory notes and derivative liability | (37,774,928) | 0 | |
Change in fair value of equity securities | (240,805) | 0 | |
Convertible bond issuance cost | (5,589,336) | 0 | |
Foreign currency exchange loss, net | (409,207) | 0 | |
Impairment loss of goodwill | (11,111,886) | 0 | |
Other (expense) income, net | (924,867) | 1,090,263 | |
Loss before income taxes | (112,145,263) | (16,421,807) | |
Income tax expenses | 0 | 0 | |
Net loss | (112,145,263) | (16,421,807) | |
Less: net loss attributable to non-controlling interests | (2,057,022) | 0 | |
Net loss attributable to the Company's shareholders | (110,088,241) | (16,421,807) | |
OTHER COMPREHENSIVE LOSS | |||
Foreign currency translation adjustment | (3,889,706) | 512,140 | |
Total comprehensive loss | (116,034,969) | (15,909,667) | |
Less: total comprehensive loss attributable to non-controlling interests | (2,032,455) | 0 | |
Total comprehensive loss to the Company's shareholders | $ (114,002,514) | $ (15,909,667) | |
Weighted average number of shares outstanding, basic (in shares) | [1] | 263,323,238 | 175,090,266 |
Weighted average number of shares outstanding, diluted (in shares) | [1] | 263,323,238 | 175,090,266 |
Loss per share, basic (in dollars per share) | [1] | $ (0.42) | $ (0.09) |
Loss per share, diluted (in dollars per share) | [1] | $ (0.42) | $ (0.09) |
[1]The share numbers are retroactively stated for purposes of calculating weighted average number of shares outstanding for loss per share to reflect the outstanding shares of CEGL as if the equity structure of Cenntro (the accounting acquirer) was stated to reflect the number of shares of CEGL (the accounting acquiree) issued in the Combination. |
CONSOLIDATED AND COMBINED STA_2
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN 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, 2020 | $ 0 | $ 103,113,793 | $ (93,314,128) | $ (1,904,839) | $ 7,894,826 | $ (28,638) | $ 7,866,188 | ||
Beginning balance (in shares) at Dec. 31, 2020 | [1] | 174,853,546 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | $ 0 | 1,128,325 | 0 | 0 | 1,128,325 | 0 | 1,128,325 | ||
Exemption of debt due from shareholders | 0 | (426,781) | 0 | 0 | (426,781) | 0 | (426,781) | ||
Net loss | 0 | 0 | (16,421,807) | 0 | (16,421,807) | 0 | (16,421,807) | ||
Reduction of capital investment | 0 | (13,930,000) | 0 | 0 | (13,930,000) | 0 | (13,930,000) | ||
Reverse recapitalization transaction with Naked Brand Group Limited, net of transaction cost | $ 0 | 285,016,602 | 0 | 0 | 285,016,602 | 0 | 285,016,602 | ||
Reverse recapitalization transaction with Naked Brand Group Limited, net of transaction cost (in shares) | [1] | 86,402,708 | |||||||
Liquidation of subsidiary | $ 0 | 0 | 0 | 0 | 0 | 28,638 | 28,638 | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 512,140 | 512,140 | 0 | 512,140 | ||
Ending balance at Dec. 31, 2021 | $ 0 | 374,901,939 | (109,735,935) | (1,392,699) | 263,773,305 | 0 | $ 263,773,305 | ||
Ending balance (in shares) at Dec. 31, 2021 | 261,256,254 | [1] | 261,256,254 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | $ 0 | 4,031,629 | 0 | 0 | 4,031,629 | 0 | $ 4,031,629 | ||
Exercise of warrants | $ 0 | 18,549,864 | 0 | 0 | 18,549,864 | 0 | 18,549,864 | ||
Exercise of warrants (in shares) | [1] | 39,534,273 | |||||||
Exercise of share-based award | $ 0 | 14,385 | 0 | 0 | 14,385 | 0 | 14,385 | ||
Exercise of share-based award (in shares) | [1] | 51,468 | |||||||
Net loss | $ 0 | 0 | (110,088,241) | 0 | (110,088,241) | (2,057,022) | (112,145,263) | ||
Acquisition of 65% of CAE's equity interests | 0 | 0 | 0 | 0 | 0 | 1,555,320 | 1,555,320 | ||
Foreign currency translation adjustment | 0 | 0 | 0 | (3,914,273) | (3,914,273) | 24,567 | (3,889,706) | ||
Ending balance at Dec. 31, 2022 | $ 0 | $ 397,497,817 | $ (219,824,176) | $ (5,306,972) | $ 172,366,669 | $ (477,135) | $ 171,889,534 | ||
Ending balance (in shares) at Dec. 31, 2022 | 300,841,995 | [1] | 300,841,995 | ||||||
[1]The share numbers are retroactively stated to reflect the outstanding shares of CEGL issued in the Combination. |
CONSOLIDATED AND COMBINED STA_3
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | Dec. 31, 2022 |
Cenntro Automotive Europe GmbH [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Acquisition CAE's equity interests | 65% |
CONSOLIDATED AND COMBINED STA_4
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOW - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (112,145,263) | $ (16,421,807) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 953,872 | 632,256 |
Amortization of operating lease right-of-use asset | 1,616,853 | 636,921 |
Impairment of property, plant and equipment | 550,402 | 6,215 |
Impairment of intangible assets | 2,995,440 | 0 |
Reversal of deferred tax liabilities | (898,632) | 0 |
Impairment of right-of-use assets | 371,695 | 0 |
Impairment of goodwill | 11,111,886 | 0 |
Written-down of inventories | 2,155,400 | 1,265,890 |
Provision for doubtful accounts | 5,986,308 | 469,702 |
Convertible promissory notes issuance costs | 5,589,336 | 0 |
Loss on redemption of convertible promissory notes | 7,435 | 0 |
Changes in fair value of convertible promissory notes and derivative liabilities | 37,774,928 | 0 |
Changes in fair value of equity securities | 240,805 | 0 |
Foreign currency exchange loss, net | 409,207 | 14,212 |
Share-based compensation expense | 4,031,629 | 1,128,325 |
Government grants of federal loan forgiven | 0 | (53,619) |
Gain from disposal of plant and equipment | (10,334) | (55,087) |
Gain from disposal of long-term investment | 0 | (508,156) |
Equity pickup of the equity investment | 12,651 | (15,167) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 233,570 | (2,002,919) |
Inventories | (20,483,127) | (5,087,563) |
Prepayment and other assets | (6,753,851) | (2,687,994) |
Amounts due from/to related parties | (1,190,573) | (128,640) |
Accounts payable | (2,144,725) | (128,508) |
Accrued expense and other current liabilities | 1,358,858 | 1,376,950 |
Contractual liabilities | 633,825 | 286,499 |
Long-term payable | (700,000) | 700,000 |
Operating lease liabilities | (1,108,721) | (903,096) |
Net cash used in operating activities | (69,401,126) | (21,475,586) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equity investment | (4,256,276) | (310,038) |
Proceeds from disposal of long-term investment | 0 | 465,941 |
Cash payment for long-term investment payable | 0 | (909,808) |
Purchase of plant and equipment | (3,285,072) | (756,269) |
Purchase of land use rights and property | (16,456,355) | 0 |
Acquisition of 65% of CAE's equity interests | (3,612,717) | 0 |
Payment of expense for acquisition of CAE's equity interests | (348,987) | 0 |
Cash acquired from acquisition of CAE | 1,118,700 | 0 |
Purchase of equity securities | (30,000,000) | 0 |
Proceeds from disposal of land use rights and property | 0 | 7,812,967 |
Proceeds from disposal of property, plant and equipment | 309 | 75,934 |
Loans provided to third parties | (1,323,671) | 0 |
Loans provided to related parties | 0 | (232,529) |
Repayment of loans from related parties | 1,280,672 | 1,088,441 |
Net cash (used in) provided by investing activities | (56,883,397) | 7,234,639 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loans proceeds from related parties | 0 | 5,020,218 |
Repayment of loans to related parties | (1,726,614) | (6,493,707) |
Repayment of loans to third parties | (1,113,692) | (3,928,380) |
Proceeds from bank loans | 0 | 53,619 |
Purchase of CAE's loan | (13,228,101) | 0 |
Reduction of capital | (13,930,000) | 0 |
Cash proceed from reversed recapitalization | 0 | 247,382,859 |
Loan proceeds from Naked Brand Group Limited | 0 | 30,000,000 |
Proceed from issuance of convertible promissory notes | 54,069,000 | 0 |
Redemption of convertible promissory notes | (3,727,500) | 0 |
Proceed from exercise of share-based awards | 14,386 | 0 |
Payment of expense for the reverse recapitalization | (904,843) | (883,300) |
Net cash provided by financing activities | 19,452,636 | 271,151,309 |
Effect of exchange rate changes on cash | (736,274) | 205,566 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (107,568,161) | 257,115,928 |
Cash, cash equivalents and restricted cash at beginning of year | 261,664,962 | 4,549,034 |
Cash, cash equivalents and restricted cash at end of year | 154,096,801 | 261,664,962 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | (369,410) | (830,837) |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cashless exercise of warrants | 18,549,864 | 0 |
Right of use asset financed by lease liabilities | 0 | 1,206,244 |
Exemption of debt due from shareholders | 0 | 426,781 |
Direct cost related to reverse recapitalization payable | 0 | 904,843 |
Reduction of capital investment recorded as due to related parties | $ 0 | $ 13,930,000 |
CONSOLIDATED AND COMBINED STA_5
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOW (Parenthetical) | Dec. 31, 2022 |
Cenntro Automotive Europe GmbH [Member] | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Percentage of CAE's equity interests | 65% |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
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. The following table shows the net cash proceeds from the reverse recapitalization: Reverse recapitalization Cash – NBG $ 247,382,859 Less: transaction costs - paid in FY2021 (883,300 ) transaction costs - paid in FY2022 (904,843 ) Net cash contributions from reverse recapitalization $ 245,594,716 As of December 31, 2022, CEGL’s subsidiaries are as follows: Name Date of Incorporation Place of Incorporation Percentage of direct or indirect economic interest Cenntro Electric CICS, SRL November 30, 2022 Santo Domingo, Dominican Republic 100% owned by CEGL Cennatic Power, Inc. (“Cennatic Power”) June 8, 2022 Delaware, U.S. 100% owned by CEGL Cenntro Automotive Europe GmbH (“CAE”) May 21, 2019 Herne, Germany 65% owned by CEGL Cenntro Electric Group (Europe) GmbH (“Cenntro Electric”) January 13, 2022 Düsseldorf, Germany 100% owned by CEGL Cennatic Energy S. de R.L. de C.V. August 24, 2022 Monterrey, Mexico 99% and 1% owned by Cennatic Power and CAC, respectively Cenntro Electric B.V. December 12, 2022 Amsterdam, Netherlands 100% owned by CEGL Cenntro Automotive Corporation (“CAC”) March 22, 2013 Delaware, U.S. 100% owned by CEGL Cenntro Electric Group, Inc. (“CEG”) March 9, 2020 Delaware, U.S. 100% owned by CEGL Cenntro Automotive Group Limited (“CAG HK”) February 15, 2016 Hong Kong 100% owned by CEGL Simachinery Equipment Limited (“Simachinery HK”) June 2, 2011 Hong Kong 100% owned by CAG HK Zhejiang Cenntro Machinery Co., Limited January 20, 2021 PRC 100% owned by CAG HK Jiangsu Tooniu Tech Co., Limited December 19, 2018 PRC 100% owned by CAG HK Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”) June 5, 2017 PRC 100% owned by CAG HK Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”) May 6, 2016 PRC 100% owned by CAG HK Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”) June 16, 2011 PRC 100% owned by Simachinery HK Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”) July 12, 2012 PRC 100% owned by Cenntro Hangzhou Hangzhou Hengzhong Tech Co., Limited December 16, 2014 PRC 100% owned by Cenntro Hangzhou Zhejiang Xbean Tech Co., Limited* December 28, 2016 PRC 100% owned by Sinomachinery Zhejiang * Zhejiang Xbean Tech Co., Limited was in the liquidation process as of December 31, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As an Australian public limited company, the Company is subject to the Corporations Act 2001 (the “Corporations Act”), which requires financial statements be prepared and audited in accordance with Australian Auditing Standards (“AAS”) and International Financial Reporting Standards (“IFRS”). The consolidated and combined financial statements are not financial statements for the purposes of the Corporations Act and are considered “non-IFRS financial information” under the Australian Securities and Investment Commission’s Regulatory guide 230: ‘Disclosing non-IFRS financial information.’ Such non-IFRS financial information may not be comparable to similarly titled information presented by other entities and should not be construed as an alternative to other financial information prepared in accordance with AAS or IFRS. The combined financial statements include the combined financial statements of Cenntro from the dates they were acquired or incorporated, which includes (a) the combined statements of operations and comprehensive loss, changes in equity and cash flows for the periods from January 1, 2021 to December 30, 2021. The consolidated financial statements include (a) the consolidated balance sheet as of December 31, 2022 and 2021; and (b) consolidated statements of operations and comprehensive loss, changes in equity and cash flows for the period from December 31, 2021 to December 31, 2022. All intercompany balances and transactions have been eliminated in consolidation and combination. (b) Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company continually evaluates these estimates and assumptions based on the most recently available information, historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Significant accounting estimates reflected in the Company’s consolidated and combined financial statements include, but are not limited to, estimates and judgments applied in determination of provision for doubtful accounts, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. (c) Fair value measurement ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include: Level 1—defined as observable inputs such as quoted prices in active markets; Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, prepayments and other current assets, amount due from and due to related parties, accounts payable and accrued expenses and other current liabilities. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, prepayment and other current assets, accounts payable, accrued expenses and other current liabilities and amount due from and due to related party, current approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles. The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. The Company has elected to apply the fair value option to convertible promissory notes due to the complexity of the various conversion and settlement options available to notes holders. The convertible promissory notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a practical expedient are private equity funds, which represent the investment in equity securities on the consolidated balance sheet. (d) Business combination The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill. (e) Cash and cash equivalents and restricted cash The Company considers highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Restricted cash consists of cash restricted as to withdrawal or use. Such restricted cash relates to certain credit card and lease guarantees. (f) Accounts receivable and provision for doubtful accounts Accounts receivable are recognized and carried at net realizable value. Provision for doubtful accounts is recorded for periods in which the Company determines a loss is probable, based on its assessment of specific factors, such as troubled collections, historical experience, accounts aging, ongoing business relations and other factors. Account balances are charged off against the provision after all means of collection have been exhausted and the potential for recovery is considered remote. (g) Inventories Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor cost and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Write-downs are recorded in the consolidated and combined statements of operations and comprehensive loss. (h) Investment in equity securities For investments in equity securities with a variable interest rate indexed to the performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss. The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity funds are measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the Fund. The Company evaluates whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include the market value of the security in relation to its cost basis, the financial condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. (i) Property, plant and equipment, net Property, plant and equipment are carried at cost less accumulated depreciation and any impairment. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows: 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 The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Company considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the consolidated and combined statements of operations and comprehensive loss. The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized. The Company constructs certain of its property including recodifications and improvement of its office buildings and plant. Depreciation is recorded at the time assets are ready for the intended use. (j) Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows: Category Estimated useful life Land use rights 45.75 years Software 3 years (k) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets or asset group with determinable useful lives whenever events or changes in circumstances indicate that an asset or a group of assets’ carrying amount may not be recoverable. The Company measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset group, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The impairment test is performed at the asset group level. Impairment loss for long-lived assets of $3,917,537 and $6,215 were recorded in the Company’s consolidated and combined statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021, respectively. (l) Goodwill Goodwill represents the future economic benefits arising from other assets acquired in a business combination. Goodwill acquired in a business combination is tested for impairment at least annually or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company performs impairment analysis on goodwill as of December 31 every year either beginning with a qualitative assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company adopted ASU No. 2017-14, simplifying the Test for Goodwill Impairment on January 1, 2022. The Company has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. If the Company chooses to apply a qualitative assessment first, it starts the goodwill impairment test by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of comparison of the fair value of a reporting unit to its carrying amount. Application of a goodwill impairment test requires significant management judgments, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Impairment loss for goodwill of $11,111,886 and nil (m) Investment in equity investees Investee companies over which the Company has the ability to exercise significant influence but does not have a controlling interest through investment in common shares or in substance common shares are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, the Company initially records its investment at cost and subsequently recognizes the Company’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated and combined statements of operations and comprehensive loss and accordingly adjusts the carrying amount of the investment. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company reviews its equity method investments for impairment whenever an event or circumstance indicates that other-than-temporary impairment has occurred. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis. (n) Revenue recognition The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. The Company recognizes revenue when goods or services are transferred to 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 years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 Vehicles sales $ 8,235,053 $ 7,287,478 Spare-parts sales 304,506 195,350 Other service income 402,276 1,094,004 Net revenues $ 8,941,835 $ 8,576,832 The Company’s revenues are primarily derived from Europe, America and Asia. The following table sets forth disaggregation of revenue by customer location. For the Years Ended December 31, 2022 2021 Primary geographical markets Europe $ 7,052,452 $ 4,380,752 America 697,452 3,420,636 Asia 1,191,931 729,868 Oceania - 45,576 Total $ 8,941,835 $ 8,576,832 Contract Balances Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment. Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2022 and 2021, the Company recognized $1,105,076 and $1,051,832 revenue that was included in contractual liabilities as of January 1, 2022 and 2021, respectively. The following table provides information about receivables and contractual liabilities from contracts with customers: December 31, 2022 December 31, 2021 Accounts receivable, net $ 565,398 $ 2,047,560 Contractual liabilities $ 2,388,480 $ 1,943,623 (o) Cost of goods sold Cost of goods sold mainly consists of production related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of property, plant and equipment, manufacturing waste treatment processing fees and inventory write-downs. (p) Government grants (q) Income taxes The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As required by applicable tax law, interest on non-payment of income taxes and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes. The tax returns of the Company and its Germany, Hong Kong and PRC subsidiaries are subject to examination by the relevant local tax authorities. The standard period in which Australian Taxation Office can amend an assessment is four years and there is no statute of limitation in the case of fraud or evasion. The statutory limitation period in Germany for the issue or correction of assessments is four years from the end of the year in which the return was filed. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. 2014 through 2022 (r) Foreign currency translation and transaction The consolidated and combined financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of CEGL’s PRC subsidiaries is the Renminbi (“RMB”). The functional currency of CEA is the EUR, and CEGL and its other subsidiaries outside of PRC is the USD. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated and combined financial statements are translated into USD from RMB at their historical exchange rates when the capital transactions occurred. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets. The rates are obtained from H.10 statistical release of the U.S. Federal Reserve Board. For the Years Ended December 31, 2022 2021 Period end USD: RMB exchange rate 6.8972 6.3726 Average USD: RMB exchange rate 6.7290 6.4508 Period end USD: EUR exchange rate 0.9348 0.8835 Average USD: EUR exchange rate 0.9493 0.8453 (s) Comprehensive loss Comprehensive loss includes all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive loss are required to be reported in a financial statement that is presented with the same prominence as other financial statements. For the years presented, comprehensive loss includes net loss and the foreign currency translation changes. (t) Segments In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated and combined results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2022 and 2021. Long-lived assets December 31, 2022 2021 PRC $ 18,018,954 $ 2,177,091 US 9,125,535 527,469 Dominican 469,740 - Others 99,303 269,360 Total $ 27,713,532 $ 2,973,920 (u) Share-based compensation expenses The Company’s share-based compensation expenses are recorded in accordance with ASC 718 and ASC 710. Share-based awards to employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a straight-line basis, over the requisite service period, with a corresponding impact reflected in additional paid-in capital. The estimate of forfeiture rate will be adjusted over the requisite service period to the extent that the actual forfeiture rate differs, or is expected to differ, from such estimates. Changes in estimated forfeiture rate will be recognized through a cumulative catch-up adjustment in the period of change. (v) Convertible promissory notes The Company has elected the fair value option to account for its convertible promissory notes issued during 2022. In accordance with ASC 825, the convertible promissory notes are marked-to-market at each reporting date with changes in fair value recorded as a component of other income (expense), in the consolidated statements of operations and comprehensive loss. We disclose the nature and terms, the income statement effects, the valuation methods and assumptions of the convertible promissory notes in Note 15 to our consolidated financial statements. (w) Derivative liability Warrants recorded as liabilities at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”. The liability remeasured every reporting period with any change to fair value recorded in the consolidated and combined statements of operations. (x) Operating lease The Company adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases and (iii) did not require the Company to reassess initial direct costs for any existing leases. Therefore, the Company did not consider its existing land use right that was not previously accounted for as leases under Topic 840. For all operating leases except for short-term leases, the Company recognized operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less were short-term leases and not recognized as right-of-use assets and lease liabilities on the consolidated and combined balance sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Some of the Company’s lease agreements contained renewal options; however, the Company did not recognize right-of-use assets or lease liabilities for renewal periods unless it was determined that the Company was reasonably certain of renewing the lease at inception or when a triggering event occurred. The Company’s lease agreements did not contain any material residual value guarantees or material restrictive covenants. (y) Non-controlling Interest A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company’s shareholders. Non-controlling interests are presented as a separate co |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2022 | |
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 the acquisition date March 25, 2022, the allocation of the consideration of the assets acquired and liabilities assumed based on their fair value was as follows: Amount Cash and cash equivalents $ 1,118,700 Inventories (1) 6,144,219 Other current assets 3,209,947 Intangible assets 3,075,800 Goodwill (2) 11,409,990 Other non-current assets 580,748 Total assets 25,539,404 Loan from CAE (13,072,150 ) Deferred tax liabilities (3) (922,740 ) Other liabilities (6,419,070 ) Total liabilities (20,413,960 ) Total net assets 5,125,444 Less: Non-controlling interest 1,555,320 Net assets acquired by the Company 3,570,124 (1) The inventories of $ 4,484,007 (2) Full impairment of goodwill has been provided as of December 31, 2022. (3) Deferred tax liabilities were calculated based on appreciation fair value of all intangible assets multiplied by income tax rate. On December 13, 2022, the Company entered into another Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf, pursuant to which Mosolf agreed to sell to the Company its remaining 35% of the issued and outstanding shares in CAE in exchange for a purchase price of 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. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 4 - ACCOUNTS RECEIVABLE, NET Accounts receivable, net is summarized as follows: December 31, December 31, Accounts receivable $ 2,526,432 $ 3,523,543 Less: provision for doubtful accounts (1,961,034 ) (1,475,983 ) Accounts receivable, net $ 565,398 $ 2,047,560 The changes in the provision for doubtful accounts are as follows: For the Years Ended December 31, 2022 2021 Balance at the beginning of the year $ 1,475,983 $ 1,121,115 Additions 1,394,591 391,189 Write-off (922,632 ) (86,170 ) Foreign exchange 13,092 49,849 Balance at the end of the year $ 1,961,034 $ 1,475,983 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 5 - INVENTORIES Inventories are summarized as follows: December 31, December 31, Raw material $ 9,311,419 $ 2,055,844 Work-in-progress 290,220 1,110,469 Goods in transit 2,364,136 50,795 Finished goods 19,877,596 4,922,708 Inventories $ 31,843,371 $ 8,139,816 For the years ended December 31, 2022 and 2021, the impairment loss recognized by the Company for slow-moving inventory with cost lower than net realizable value was $2,155,400 and $1,265,890, respectively. |
PREPAYMENT AND OTHER CURRENT AS
PREPAYMENT AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
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: December 31, 2022 December 31, 2021 Advance to suppliers $ 9,877,337 $ 3,686,708 Deductible input value added tax 4,097,162 1,196,186 Loans to a third party (1) 1,044,181 - Receivable from third parties 678,887 348,773 Refund for goods and services tax (“GST”) (2) - 2,488,528 Others 440,763 269,412 Prepayment and other current assets $ 16,138,330 $ 7,989,607 (1) L oan 1,000,000 5.00 February 7, 2023 1,000,000 571,930 3.59 (2) G ST is a value-added tax levied on goods and services sold for consumption in Australia. The balance as of December 31, 2021 was excess GST, which has been refunded in 2022. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY METHOD INVESTMENTS [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 7 – EQUITY METHOD INVESTMENTS December 31, December 31, Antric GmbH (1) $ 2,674,500 $ - Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2) 2,189,570 - Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3) 367,272 329,197 Able 2rent GmbH (DEU) (4) 94,399 - Total $ 5,325,741 $ 329,197 (1) O n December 16, 2022, the Company invested EUR 2,500,000 2,674,500 Antric GmbH to acquire 25 1,877,083 2,008,103 Antric GmbH . The Company accounts for the investment under the equity method because the Company controls 25 Antric GmbH (2) O n September 25, 2022, the Company invested RMB 15,400,000 2,232,790 Entropy Yu to acquire 99.355 50 Entropy Yu . For the year ended December 31, 2022, the Company recognized investment loss of $ 44,301 . (3) O n June 23, 2021, the Company invested RMB 2,000,000 308,990 20 33 44,039 15,167 (4) O n March 22, 2022, CAE invested EUR 100,000 106,980 50 12,389 |
INVESTMENT IN EQUITY SECURITIES
INVESTMENT IN EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENT IN EQUITY SECURITIES [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | NOTE 8 – INVESTMENT IN EQUITY SECURITIES As of December 31, 2022, the balance consisted of the following two equity investments: Investment on partnership shares in MineOne Fix Income Investment I L.P On October 12, 2022, the Company entered into a subscription agreement with MineOne Partners Limited, a partnership incorporated in the British Virgin Islands, for purchase of $25 million partnership shares in MineOne Fix Income Investment I LP (“MineOne”), over which MineOne Partners Limited is the General Partner. The Company holds 100% of the limited partnership equity of MineOne and ten Investment on participating shares in Micro Money Fund SPC On August 11, 2022, the Company invested $5 million in Micro Money Fund SPC, for purchase of 4,454.37 of participating, redeemable, non-voting shares attributable to Micro Money Fund SPII (“the Fund”), a segregated portfolio of Micro Money Fund SPC. The Company holds 59% of the limited partnership equity of the Fund, and The Company has neither control nor significant influence over MineOne or Micro Money Fund, the Company does not have the power to direct the activities that most significantly affect the their economic performance, and there is no kick-off rights or right to dissolve the funds |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 9 –PROPERTY, PLANT AND EQUIPMENT, NET P roperty, plant and equipment December 31, December 31, At cost: Plant and building (1) $ 11,453,436 $ - Machinery and equipment 2,413,087 2,068,056 Leasehold improvement 2,956,515 899,538 Office equipment 1,192,443 818,703 Motor vehicles 352,972 301,079 Total 18,368,453 4,087,376 Less: accumulated depreciation (3,405,862 ) (2,786,150 ) Property, plant and equipment, net $ 14,962,591 $ 1,301,226 (1) O n April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its factory, with an area of 44,451.54 78,968,319 ) Depreciation expenses for the years ended December 31, 2022 and 2021 were $907,739 and $589,576, respectively. Impairment loss for the years ended December 31, 2022 and 2021 were $550,402 and $6,215, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS, NET [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 10 –INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following: December 31, 2022 December 31, 2021 At cost: Land use right (1) $ 4,605,738 $ - Software 119,550 129,392 Total 4,725,288 129,392 Less: accumulated amortization (161,496 ) (126,079 ) Intangible assets, net $ 4,563,792 $ 3,313 (1) On April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its land use right, with an area of 56,302 45.75 31,766,697 4,605,738 Amortization expenses for the years ended December 31, 2022 and 2021 were $46,133 and $42,679, respectively. Impairment loss for the years ended December 31, 2022 and 2021 were $2,995,440 and nil |
OTHER NON-CURRENT ASSETS, NET
OTHER NON-CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET [Abstract] | |
OTHER NON-CURRENT ASSETS, NET | NOTE 11 – OTHER NON-CURRENT ASSETS, NET December 31, December 31, Loan to the third party $ 4,591,717 $ - Receivable from a third party (2) - 2,353,827 Long-term prepayment (3) 1,280,974 1,587,693 Deposit 758,038 564,007 Total 6,630,729 4,505,527 Less: provision for loan to the third party and receivable from a third party (1) & (4,591,717 ) (2,353,827 ) Other non-current assets, net $ 2,039,012 $ 2,151,700 (1) The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026. As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022. The company believes that the possibility of the collection is remote and recorded full provision for the loan. (2) In 2018, the Company signed an agreement with Anhua Automotive Co. Ltd., (“Anhua”) and paid an initial non-refundable deposit to participate in Anhua’s bankruptcy recombination process to develop further production capacity in China. However, due to the irrecoverable deterioration of Anhua’s business and Cenntro’s focus on Europe and America markets, Cenntro declined to further participate in the recombination process. Therefore, Cenntro recorded full provision for the deposit. The balance was written off for the year ended December 31, 2022 (3) T he balance mainly represented a six-year |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 12 – Accrued expenses and other current liabilities are summarized as follow: December 31, December 31, Accrued litigation compensation $ 1,590,484 $ - Accrued professional fees 919,525 2,429,843 Accrued expenses 797,969 - Payable for purchasing the factory 588,645 - Employee payroll and welfare payables 452,904 561,469 Interest expense of convertible loans 383,250 - Other taxes payable 118,469 48,672 Credit card payable 22,908 510,151 Loans from third parties - 419,642 Others 174,487 213,486 Total $ 5,048,641 $ 4,183,263 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 13 - 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 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. (1) Income taxes Income tax expenses for the years ended December 31, 2022 and 2021 are nil The components of losses before income taxes are summarized as follows: For the Years Ended December 31, 2022 2021 PRC $ (7,386,251 ) $ (5,477,857 ) US (17,254,945 ) (9,234,455 ) Europe (20,130,854 ) - Australia (67,392,512 ) (1,128,325 ) Others 19,300 (581,170 ) Total $ (112,145,263 ) $ (16,421,807 ) As the main business operations were concentrated in China, and other losses except for PRC losses are caused by non-operating activities, PRC statutory income tax rate was applied. The actual income tax expense reported in the consolidated and combined statements of operations and comprehensive loss for years ended December 31, 2022 and 2021 differs from the amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following: For the Years Ended December 31, 2022 2021 Loss before provision for income tax $ (112,145,263 ) $ (16,421,807 ) PRC statutory income tax rate 25 % 25 % Income tax expense at the PRC statutory rate (28,036,316 ) (4,105,452 ) Effect of preferential tax rate 161,592 279,886 Effect of international tax rates (2,255,963 ) 420,450 Effect of non-deductible expenses 1,069,009 396,826 Effect of research and development deduction (568,446 ) (204,807 ) Fair value change of warrant liability 3,912,074 - Impairment loss of goodwill 2,777,972 - Effect of valuation allowance 22,940,078 3,213,097 Total income tax expense - - Effective income tax rate 0 % 0 % (2) Deferred taxes assets, net The tax effects of temporary differences that give rise to the deferred income tax assets balances as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 Deferred income tax assets: Impairment loss $ 3,532,162 $ 2,013,232 Change in fair value of financial instrument 912,340 - Capitalization of research and experimental costs 369,687 - Net operating loss carry forwards 28,818,841 12,646,183 Total deferred income tax assets 33,633,030 14,659,415 Valuation allowance (33,633,030 ) (14,659,415 ) Deferred income tax assets, net $ - $ - The changes related to valuation allowance are as follows: For the Years Ended December 31, 2022 2021 Balance at the beginning of the year $ 14,659,415 $ 19,072,736 Additions during the year 22,940,078 3,213,097 Expire of NOL (1,318,979 ) (1,243,653 ) Write-off of employee stock ownership plans deferred tax asset - (4,981,854 ) Change in tax rate (91,423 ) (959,106 ) Company deregistration - (708,266 ) Exchange rate effect (2,556,061 ) 266,461 Balance at the end of the year $ 33,633,030 $ 14,659,415 The valuation allowances as of December 31, 2022 and 2021 were provided for the deferred income tax assets of certain subsidiaries, which were at cumulative loss positions. In assessing the realization of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. For entities incorporated in Hong Kong, net losses of $978,187 can be carried forward indefinitely. For entities incorporated in the U.S., federal net operating losses of $27,588,978 can be carried forward indefinitely subject to a limitation in utilization against 80% of annual taxable income. Federal net operating losses of $3,740,668, $1,430,246 and $744,848 will expire if unused by 2035, 2036 and 2037, respectively. For entities incorporated in the PRC, net losses can be carried forward for five years. PRC net losses of $39,109,412 were available to offset future taxable income. Net losses of $13,755,682, $5,696,704, $2,326,371, $6,302,877 and $11,027,780 will expire, if unused, by 2023, 2024, 2025, 2026, and 2027, respectively. For entities incorporated in German, net losses of $14,748,048 can be carried forward indefinitely. For entities incorporated in Australia, net losses of $28,967,850 can be carried forward indefinitely. Internal Revenue Code of 1986, as amended (“IRC”), Section 382 provides that, after an ownership change, the amount of a loss corporation’s taxable income for any post-change year that may be offset by pre-change losses shall not exceed the IRC Section 382 limitation for that year. The IRC Section 382 limitation generally equals the fair market value of the old loss corporation multiplied by the long-term tax-exempt rate. A loss corporation is any corporation that has a net operating loss, a net operating loss carryforward, or a net unrealized built-in loss for the taxable year in which the ownership change occurs. An ownership change is a greater than 50-percentage point increase in ownership by five-percent shareholders. The Company has not yet performed an IRC Section 382 analysis to determine whether an ownership change has occurred and whether any tax attributes are limited. The Company has recorded a full valuation allowance against its deferred tax assets and does not expect to utilize its tax attributes. Once the Company utilizes its tax attributes, a complete IRC Section 382 analysis will be performed. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. CAE GmbH was not yet subject to a tax audit, but a tax audit for 2019 has been recently announced. As of December 31, 2022 and 2021, the Company did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES [Abstract] | |
LEASES | NOTE 14 - LEASES The Company leases offices space under non-cancellable operating leases. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. A summary of lease cost recognized in the Company’s consolidated and combined statements of operations and comprehensive loss is as follows: For the Years Ended December 31, 2022 2021 Operating leases cost excluding short-term rental expense $ 1,616,853 $ 682,616 Short-term lease cost 238,386 4,974 Total $ 1,855,239 $ 687,590 A summary of supplemental information related to operating leases is as follows: December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 1,108,721 $ 879,788 Weighted average remaining lease term 8.36 years 2.00 years Weighted average discount rate 4.27 % 3.80 % 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 December 31, 2022: For the year ending December 31, Operating 2023 $ 1,341,954 2024 1,296,713 2025 1,043,197 2026 1,086,121 2027 1,119,334 2028 and thereafter 4,679,951 Total lease payments 10,567,270 Less: imputed interest 1,832,354 Total 8,734,916 Less: current portion 1,313,334 Non-current portion $ 7,421,582 |
CONVERTIBLE PROMISSORY NOTE AND
CONVERTIBLE PROMISSORY NOTE AND WARRANT | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE PROMISSORY NOTE AND WARRANT [Abstract] | |
CONVERTIBLE PROMISSORY NOTE AND WARRANT | NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT Convertible Promissory Note On July 20, 2022, the Company issued to investors convertible promissory note (“Note”) in the aggregate principal amount of $61,215,000 due on July 19, 2023, unless earlier repurchased, converted or redeemed. 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 income (expense) in the consolidated and combined statement of operations, change in fair value of convertible notes. The movement of Note during the year ended December 31, 2022 are as follows: Liability component As of December 31, 2021 $ - Convertible promissory notes issued during the year 38,966,261 Redemption of convertible promissory notes (3,720,064 ) Fair value change recognized 22,126,630 As of December 31, 2022 $ 57,372,827 The estimated fair value of the Note upon issuance date July 20, 2022 and as of December 31, 2022 was computed using a Monte Carlo Simulation Model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement. The unobservable inputs utilized for measuring the fair value of the Note reflects our assumptions about the assumptions that market participants would use in valuing the Note as of the issuance date and subsequent reporting period. We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model: Fair Value Assumptions - Convertible Promissory Note December 31, 2022 July 20, 2022 Face value principal payable 57,488,000 61,215,000 Original conversion price 1.2375 1.2375 Interest Rate 8.00 % 8.00 % Expected term (years) 0.55 1.00 Volatility 75.13 % 71.29 % Market yield (range) 18.02 % 18.02 % Risk free rate 4.69 % 2.96 % Issue date July 20, 2022 July 20, 2022 Maturity date July 19, 2023 July 19, 2023 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 . 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 and combined statement of operations. The movement of warrants during the year ended December 31, 2022 are as follows: Investor warrants component Placement agent warrants component As of December 31, 2021 $ - $ - Warrants issued during the year 19,333,739 1,358,336 Exercise of warrants (18,549,865 ) - Fair value change recognized 13,550,230 2,098,068 As of December 31, 2022 14,334,104 3,456,404 The fair value for these two warrants were computed using the Binomial model with the following assumptions: Fair Value Assumptions – Warrants December 31, 2022 July 20, 2022 Expected term (years) 4.55 5.00 Volatility 77.72 % 75.85 % Risk free rate 4.13 % 3.24 % |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 16 - SHARE-BASED COMPENSATION Share based compensation expenses for periods prior to the consummation of the Combination relate to the share options granted by CAG Cayman to the employees and directors of Cenntro. Share options granted by CAG Cayman to employees of the Company On February 10, 2016, CAG Cayman adopted the 2016 Share Incentive Option Plan (the “2016 Plan”), which allowed CAG Cayman to grant options to the employees and directors of Cenntro to purchase up to 14,139,360 ordinary shares of CAG Cayman subject to vesting requirements. On April 17, 2018, CAG Cayman expanded the share reserve under the 2016 Plan, increasing the number of ordinary shares available for issuance under the 2016 Plan by an additional 10,484,797 ordinary shares for a total 24,624,157 ordinary shares. the options granted under the 2016 Plan became exercisable during the term of the optionee’s service with CAG Cayman in five equal annual instalments of 20% each. The expiration dates of the options are between six the respective grant dates as stated in the option grant letters. On March 7 and May 31, 2016, CAG Cayman granted 12,169,840 options and 650,000 options to the employees and directors of the Company to purchase CAG Cayman’s ordinary shares at exercise prices ranging from $0.2000 to $1.2092 per share. The options have a contractual term ranging from six years to eight years. On August 1 and December 31, 2017, CAG Cayman granted 6,300,000 options and 2,580,000 to the employees and directors of the Company to purchase CAG Cayman’s ordinary shares at exercise prices ranging from $1.6500 to $1.8792 per share. In connection with the Combination, CAG Cayman amended and restated the 2016 Plan, adopting the Amended 2016 Plan. In connection with the closing of the Combination, each employee stock option outstanding under the Amended 2016 Plan immediately prior to the closing of the Combination was converted into an option to purchase a number of ordinary shares equal to the aggregate number of shares for which such stock option was exercisable immediately prior to the closing of the Combination multiplied by the closing of the Combination exercise price per share of such stock option immediately prior to the closing of the Combination divided by the Exchange Ratio The conversion of the incentive stock options of CAG Cayman under the Amended 2016 Plan into incentive stock options of CEGL was deemed a modification at closing of the Combination, which is the modification date. There were, no incremental fair value recorded immediately before and after the modification date. Share options granted by CEGL to employees of the Company On May 3, 2022, CEGL adopted the 2022 Share Incentive Plan (the “2022 Plan”), which allowed CEGL to grant options to the employees and directors of the Company to purchase up to 25,965,234 ordinary shares of CEGL subject to vesting requirement. On May 3, 2022, CEGL granted 12,797,063 options to the directors of the Company to purchase CEGL’s ordinary shares at exercise prices ranging from $1.680 to $1.848 per share. Among them, 297,615 options have a contractual term of five years, 12,499,448 options have a contractual term of ten years. The fair value of option per share grant on May 3, 2022 varied from $1.1130 to $1.4310. The aggregate grant date fair value of the options grant was $18,217,956. For the year ended December 31, 2022 and 2021, the total share-based compensation expenses were comprised of the following: For the Years Ended December 31, 2022 2021 Selling and marketing expenses $ 504,199 $ - Research and development expenses 284,805 152,694 General and administrative expenses 3,242,625 975,631 Total $ 4,031,629 $ 1,128,325 A summary of share options activity for the years ended December 31, 2022 and 2021 is as follows: Number of Share Options Weighted Average Exercise Price US$ Weighted Average Remaining Contractual Years Aggregate Intrinsic Value US$ Outstanding at January 1, 2021 18,976,130 0.98 3.56 24,410,306 Granted - - Exercised - - Forfeited (5,492,000 ) 1.42 Expired (593,000 ) 1.19 Modification of option as of 30/12/2021 9,225,271 1.10 Outstanding at December 31, 2021 9,225,271 1.10 2.60 42,799,081 Granted 12,797,063 1.68 Exercised (51,468 ) 0.28 Forfeited (334,167 ) 1.68 Expired (33,333 ) 1.68 Outstanding at December 31, 2022 21,603,366 1.44 5.99 721,210 Expected to vest at December 31, 2022 10,130,075 1.71 9.16 - Exercisable as of December 31, 2022 11,473,291 1.20 3.19 721,210 The Company calculated the fair value of the share options on the grant date and modification date using the Black-Scholes option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table. For the Years Ended December 31, 2022 2021 Modification Before Modification Expected volatility 86.28%~83.96% 58.09%-91.85% 82.33%-93.48% Expected dividends yield 0% 0% 0% Risk-free interest rate per annum 2.97%~3.01% 0.06%-1.36% 1.84%-2.40% The fair value of underlying ordinary shares (per share) $1.68 $5.74 $1.21-$2.92 The expected volatility is calculated based on the annualized standard deviation of the daily return embedded in historical share prices of the Company. The risk-free interest rate is estimated based on the yield to maturity of US treasury bonds based on the expected term of the incentive shares. As of December 31, 2022, there was approximately $15,043,377 of total unrecognized compensation cost related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 3.15 years. |
ORDINARY SHARES AND RESTRICTED
ORDINARY SHARES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
ORDINARY SHARES AND RESTRICTED NET ASSETS [Abstract] | |
ORDINARY SHARES AND RESTRICTED NET ASSETS | NOTE 17 - ORDINARY SHARES AND RESTRICTED NET ASSETS Ordinary shares 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 issued 174,853,546 shares to CAG Cayman as consideration for the Combination. In 2022, 51,468 ordinary shares were exercised under the 2016 Share Incentive Option Plan, and 39,534,273 ordinary shares were issued for exercise of the investor warrants. As of December 31, 2022, the issued and outstanding ordinary shares are 300,841,995. The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of CEGL. Each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote. Restricted net assets A significant portion of the Company’s operations are conducted through its PRC (excluding Hong Kong) subsidiaries. Due to restrictions on the distribution of share capital from the Company’s subsidiaries in PRC, total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were $581,314 as of December 31, 2022. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE [Abstract] | |
NET LOSS PER SHARE | NOTE 18 - NET LOSS PER SHARE For the year ended December 31, 2021, for the purpose of calculating net loss per share as a result of the reverse recapitalization as described in Note 1, the weighted-average number of shares used in the calculation reflects the outstanding shares of CEGL as if the equity structure of Cenntro (the accounting acquirer) was retroactively stated to reflect the number of shares of CEGL (the accounting acquiree) issued in the Combination. Basic and diluted net loss per share for each of the year presented were calculated as follows: For the Years Ended December 31, 2022 2021 Numerator: Net loss attributable to the Company’s shareholders (110,088,241 ) (16,421,807 ) Denominator: Weighted average ordinary shares used in computing basic and diluted loss per share 263,323,238 175,090,266 Basic and diluted net loss per share (0.42 ) (0.09 ) The Company incurred losses for the years ended December 31, 2022 and 2021, no potential ordinary shares were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2022 | |
CONCENTRATIONS [Abstract] | |
CONCENTRATIONS | NOTE 19 - CONCENTRATIONS (a) Customers The following table sets forth information as to each customer that accounted for 10% or more of net revenue for the years ended December 31, 2022 and 2021. Year ended Year ended December 31, 2022, December 31, 2021, Customer Amount % of Total Amount % of Total A 1,304,969 15 % - - B - - 3,543,423 41 % C 419,928 * 2,556,537 30 % D 265,972 * 848,399 10 % Total $ 1,990,869 15 % $ 6,948,359 81 % * Indicates below 10%. The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable as of December 31, 2022 and 2021. As of December 31, 2022, As of December 31, 2021, Customer Amount % of Total Amount % of Total B $ 410,321 16 % $ 2,084,879 59 % E 1,197,023 47 % - - F 395,360 16 % - - G - - 864,106 25 % Total $ 2,002,704 79 % $ 2,948,985 84 % (b) Suppliers For the years ended December 31, 2022 and 2021, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows: Year ended December 31, 2022, Year ended December 31, 2021, Supplier Amount % of Total Amount % of Total A $ 6,078,079 26 % $ 2,219,792 21 % B 2,885,202 12 % - - Total $ 8,963,281 38 % $ 2,219,792 21 % The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of December 31, 2022 and 2021. As of December 31, 2022, As of December 31, 2021, Supplier Amount % of Total Amount % of Total A $ 420,100 12 % $ - - C 577,621 17 % - - Total $ 997,721 29 % $ - - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 - COMMITMENTS AND CONTINGENCIES Litigation The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. On July 12, 2020, Didier Verriest (“Didier”) filed a four-count complaint with the Superior Court of New Jersey seeking over $500,000 for alleged unpaid compensation expenses related to a breach of contract under the Magnum Agreement (the “Magnum Agreement”) Didier entered with Cenntro, and Magnum Korea Ltd. (“Magnum”). On March 5, 2021, Cenntro filed a motion to dismiss as to Didier’s breach of contract claim. Within its motion, Cenntro put before the Court a true and accurate copy of the Magnum Agreement, which revealed the payment obligation underlying Didier’s breach of contract claim against Cenntro, did not exist. Instead, the express terms of the Magnum Agreement confirmed that the payment obligation rested solely on Magnum. After briefing and oral argument, by court order dated April 30, 2021, the Court dismissed Plaintiff’s breach of contract claim against Cenntro, without prejudice. However, The Court is allowing a separate quantum meruit claim to proceed. Cenntro filed an answer to Didier’s amended complaint on August 11, 2021. After filing an answer, the parties conducted discovery, which included interrogatories, requests for production of documents, and depositions. On March 17, 2023, Cenntro filed a motion for summary judgment seeking dismissal of Plaintiff’s remaining quantum meruit claim. On May 12, 2023, the Judge granted Cenntro’s motion in its entirety, dismissing Plaintiff’s case with prejudice. Mr. Verriest will have until June 26, 2023 to file a Notice of Appeal, failing which the case will be over. In October 2021, Sevic Systems SE (“Sevic”), a former channel partner, commenced a lawsuit against Shengzhou Machinery, one of Cenntro’s wholly owned subsidiaries, relating to a breach of contract for the sale of goods (the “Sevic Lawsuit”). Sevic filed its complaint with the People’s Court of Keqiao District, Shaoxing City, Light Textile City (the “People’s Court”). 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. 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 and claimant intends to file a response in opposition to it by the current deadline of May 23, 2023. In June 2022, Sevic Systems SE (“Sevic”) filed for injunctive relief in a corporate court in Brussels, Belgium, alleging CAE infringement of Sevic’s intellectual property (“IP”) rights. The injunctive action was also directed against LEIE Center SRL (“LEIE”) and Cedar Europe GmbH (“Cedar”), two distribution partners of CAE. There, Sevic claims it acquired all IP rights to an electric vehicle, the so-called CITELEC model (“CITELEC”), fully and exclusively from the French company SH2M Sarl (“SH2M”) under Mr. Pierre Millet. Sevic claims these rights were acquired under a 2019 IP transfer agreement. According to Sevic, the METRO model (“METRO”) produced by Cenntro Electro Group Ltd. (“Cenntro”) and distributed by CAE derives directly from the CITELEC. The distribution of the METRO, therefore, allegedly infringes on Sevic’s IP rights. In its action, Sevic relies on (Belgian) copyright law and unfair business practices. On February 2, 2023, the president of the commercial court of Brussels rendered a judgment, declaring i) the claim against Cedar was inadmissible and ii) The main claim against CAE and LEIE was founded. According to the president’s opinion the CITELEC-model can enjoy copyright protection and determined it was sufficiently proven that Sevic acquired the copyrights of the CITELEC-model. The president then concluded that the distribution of the METRO-model in Belgium constituted a violation of article XI. 165 §1 of the Belgian Code of Economic Law and thereby ordered the cessation of the distribution of the METRO-model, a penalty in the form of a fine of EUR20,000.00 per sold vehicle in Belgium and EUR5,000.00 for each other infringement in Belgium after the judgement was served with a maximum fine of EUR500,000.00 for LEIE and EUR1,000,000.00 fine for CAE. Because CAE has not sold any METRO-models in Belgium, the Company believes the judgement is incorrect and intends to appeal it, however, the Company has accrued the related liability according to the judgement made. On July 22, 2022, Xiongjian Chen filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey. The complaint alleges eleven causes of action sounding in contract and tort against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG. With respect to the four contract claims, Plaintiff alleges breach of contract claims pertaining to an employment agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL. With respect to the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May 28, 2023, Plaintiff filed an amended complaint. The Defendants intend to file a motion directed to the dismissal of that amended complaint. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 21 - RELATED PARTY TRANSACTIONS The table below sets forth the major related parties and their relationships with the Company: Name of related parties: Relationship with the Company Mr. Peter Wang Chairman, Chief Executive Officer, and principal shareholder of the Company Mr. Yeung Heung Yeung A principal shareholder of the Company Bendon Limited Controlled by Mr. Justin Davis-Rice, a director of CEGL. As for the resignation of Mr. Justin Davis-Rice in 2022, it was not a related party as of December 31, 2022. Mr. Zhong Wei Chief Technology Officer of the Company Ms. Xu Cheng Immediate family of Mr. Chris Xiongjian Chen, former Chief Operating Officer of CAG Cayman CAG Cayman Mr. Peter Wang is a principal shareholder Devirra Corporation Limited and its subsidiaries (Collectively referred to the “Devirra Group”) Entities controlled by CAG Cayman Cenntro Holding Limited Ultimately controlled by Mr. Peter Wang Zhejiang Zhongchai Machinery Co., Ltd (“Zhejiang Zhongchai”) Ultimately controlled by Mr. Peter Wang 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 Zhuhai Hengzhong Industrial Investment Fund (Limited Partner) (“Zhuhai Hengzhong”) Mr. Peter Wang served as General Partner Shenzhen Yuanzheng Investment Development Co. Ltd (“Shenzhen Yuanzheng“) Controlled by Mr. Yeung Heung Yeung Shanghai Hengyu Enterprise Management Consulting Co., Ltd (“Shanghai Hengyu”) Ultimately controlled by Mr. Peter Wang Antric GmbH Invested by the Company Related party transactions During the years ended December 31, 2022 and 2021, the Company had the following material related party transactions. For the Years Ended December 31, 2022 2021 Interest income from a related party Zhejiang RAP $ 13,434 $ 23,114 Bendon Limited 113,021 39,296 Purchase of raw materials from related parties Jiangsu Rongyuan - 24,799 Hangzhou Hezhe Energy Technology Co., Ltd 1,413,262 1,219,621 Revenue from sales of equipment to a related party Zhejiang Zhongchai 119,963 - Payment on the purchase of the raw materials Hangzhou Hezhe 1,015,036 2,027,483 Repayment of the advance operating fund from a related party Zhejiang Zhongchai 276,266 - Consulting service provided by a related party Shanghai Hengyu 5,053 29,919 Repayment interest-bearing Loan from a related party Shenzhen Yuanzheng 395,523 - Mr. Yeung Heung Yeung 1,331,091 - Interest expense on loans provided by related parties Mr. Yeung Heung Yeung 2,532 132,000 Mr. Zhong Wei - 6,039 Others 1,075 40,005 Amounts due from Related Parties – current The following table presents amounts due from related parties as of December 31, 2022 and 2021. As of December 31, 2022 2021 Hangzhou Hezhe (1) 366,936 817,640 Zhejiang Zhongchai (2) - 412,797 Shanghai Hengyu - 2,197 Jiangsu Rongyuan (3) - 166,911 Total 366,936 1,399,545 Less: provision for receivable from a related party (3) - (166,911 ) Amounts due from related parties, net $ 366,936 $ 1,232,634 (1) The balance mainly represents the prepayment for raw material to the related party. (2) The balances mainly represent accounts receivable relating to the sale of industrial equipment of $340,770 and advances to Zhejiang Zhongchai for daily operational purposes of $72,027 as of December 31, 2021. (3) The balances mainly represent advances to related parties for daily operational purposes. The business conditions of deteriorated and, as a result, the Company recognized provision for receivables of nil The balance was written off during the year ended December 31, 2022. Amounts due from Related Parties – non-current As of December 31, 2022 2021 Bendon Limited (1) $ - $ 4,834,973 Total - 4,834,973 Less: provision for receivable from a related party - - Amounts due from related parties -non-current $ - $ 4,834,973 (1) The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026 As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022. Amounts due to Related Parties The following table presents amounts due to related parties as of December 31, 2022 and 2021. As of December 31, 2022 2021 CAG Cayman (1) $ - $ 13,945,823 Mr. Yeung Heung Yeung (2) - 1,328,559 Shenzhen Yuanzheng (2) - 416,509 Antric GmbH (3) 666,396 - Zhejiang RAP 23,882 40,034 Jiangsu Rongyuan 23,194 25,103 Shanghai Hengyu 2,900 - Total $ 716,372 $ 15,756,028 (1) CAG Cayman was the parent company of Cenntro before the closing of the Combination. The balance as of December 31, 2021 the interest-free It was fully repaid to CAG Cayman in 2022. (2) The balance represented the interest-bearing loan provided by related parties to the Company. The weighted average annual interest rates for the loans was 17.31% as of December 31, 2021. It was fully repaid in 2022. (3) The balance represented the capital injection payable to this related party. On December 16, 2022, the Company invested EUR 2,500,000 2,674,500 Antric GmbH to acquire 25 1,868,750 1,977,380 Antric GmbH . |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT | NOTE 22 - SUBSEQUENT EVENT The Company entered into Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf to sell to the Company its remaining 35% of the issued and outstanding shares in CAE (Note 3). The Transaction was closed on January 31, 2023, as a result, CAE became a wholly-owned subsidiary of the Company. This transaction was accounted for as equity transactions, no gain or loss was recognized in consolidated statement of operations. The difference between the fair value of the consideration paid and the amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company. On January 3 and April 26, 2023, $39,583,321 and $6,000,000 of convertible promissory notes were redeemed by the investors. On January 31, 2023, the Company entered into a debt conversion agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 for 571,930 shares of HW Electro Co., Ltd.’s common stock totaling 3.59% of its equity interest. The interest of the loan was repaid in February 2023. On January and March, 2023, the Company entered into a series of agreement to purchase electric commercial vehicle components, which total contract amount of RMB121,335,900 (approximately $17,592,052), as of the date of issuance of the consolidated and combined financial statements, the Company has paid RMB26,785,950 (approximately $3,883,598) as delivery schedule of supplier. Cenntro Automotive Corporation and BAL Freeway Associates, LLC, a California Limited Liability Company have entered into a lease agreement for an approximate 64,000 square foot portion of a larger 124,850 square foot industrial building located within the Rancon Centre Ontario. The lease term is for five years, starting from April 1, 2023, and ending on March 31, 2028. The monthly rent is $115,200. The Company has evaluated subsequent events through the date of issuance of the consolidated and combined financial statements, except for the events mentioned above, there were no other subsequent events with material financial impact on the consolidated and combined financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of presentation | (a) Basis of presentation The consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As an Australian public limited company, the Company is subject to the Corporations Act 2001 (the “Corporations Act”), which requires financial statements be prepared and audited in accordance with Australian Auditing Standards (“AAS”) and International Financial Reporting Standards (“IFRS”). The consolidated and combined financial statements are not financial statements for the purposes of the Corporations Act and are considered “non-IFRS financial information” under the Australian Securities and Investment Commission’s Regulatory guide 230: ‘Disclosing non-IFRS financial information.’ Such non-IFRS financial information may not be comparable to similarly titled information presented by other entities and should not be construed as an alternative to other financial information prepared in accordance with AAS or IFRS. The combined financial statements include the combined financial statements of Cenntro from the dates they were acquired or incorporated, which includes (a) the combined statements of operations and comprehensive loss, changes in equity and cash flows for the periods from January 1, 2021 to December 30, 2021. The consolidated financial statements include (a) the consolidated balance sheet as of December 31, 2022 and 2021; and (b) consolidated statements of operations and comprehensive loss, changes in equity and cash flows for the period from December 31, 2021 to December 31, 2022. All intercompany balances and transactions have been eliminated in consolidation and combination. |
Use of estimates | (b) Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company continually evaluates these estimates and assumptions based on the most recently available information, historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Significant accounting estimates reflected in the Company’s consolidated and combined financial statements include, but are not limited to, estimates and judgments applied in determination of provision for doubtful accounts, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. |
Fair value measurement | (c) Fair value measurement ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include: Level 1—defined as observable inputs such as quoted prices in active markets; Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, prepayments and other current assets, amount due from and due to related parties, accounts payable and accrued expenses and other current liabilities. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, prepayment and other current assets, accounts payable, accrued expenses and other current liabilities and amount due from and due to related party, current approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles. The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. The Company has elected to apply the fair value option to convertible promissory notes due to the complexity of the various conversion and settlement options available to notes holders. The convertible promissory notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a practical expedient are private equity funds, which represent the investment in equity securities on the consolidated balance sheet. |
Business combination | (d) Business combination The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill. |
Cash and cash equivalents and restricted cash | (e) Cash and cash equivalents and restricted cash The Company considers highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Restricted cash consists of cash restricted as to withdrawal or use. Such restricted cash relates to certain credit card and lease guarantees. |
Accounts receivable and provision for doubtful accounts | (f) Accounts receivable and provision for doubtful accounts Accounts receivable are recognized and carried at net realizable value. Provision for doubtful accounts is recorded for periods in which the Company determines a loss is probable, based on its assessment of specific factors, such as troubled collections, historical experience, accounts aging, ongoing business relations and other factors. Account balances are charged off against the provision after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventories | (g) Inventories Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor cost and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Write-downs are recorded in the consolidated and combined statements of operations and comprehensive loss. |
Investment in equity securities | (h) Investment in equity securities For investments in equity securities with a variable interest rate indexed to the performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss. The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity funds are measured at fair value with gains and losses recognized in earnings. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the Fund. The Company evaluates whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include the market value of the security in relation to its cost basis, the financial condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. |
Property, plant and equipment, net | (i) Property, plant and equipment, net Property, plant and equipment are carried at cost less accumulated depreciation and any impairment. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows: 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 The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable. Factors that the Company considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset or asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the useful lives of major competitors. The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the consolidated and combined statements of operations and comprehensive loss. The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized. The Company constructs certain of its property including recodifications and improvement of its office buildings and plant. Depreciation is recorded at the time assets are ready for the intended use. |
Intangible assets, net | (j) Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows: Category Estimated useful life Land use rights 45.75 years Software 3 years |
Impairment of long-lived assets | (k) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets or asset group with determinable useful lives whenever events or changes in circumstances indicate that an asset or a group of assets’ carrying amount may not be recoverable. The Company measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows expected to result from the use of the assets or asset group and their eventual disposition. The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets or asset group, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The impairment test is performed at the asset group level. Impairment loss for long-lived assets of $3,917,537 and $6,215 were recorded in the Company’s consolidated and combined statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021, respectively. |
Goodwill | (l) Goodwill Goodwill represents the future economic benefits arising from other assets acquired in a business combination. Goodwill acquired in a business combination is tested for impairment at least annually or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company performs impairment analysis on goodwill as of December 31 every year either beginning with a qualitative assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company adopted ASU No. 2017-14, simplifying the Test for Goodwill Impairment on January 1, 2022. The Company has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. If the Company chooses to apply a qualitative assessment first, it starts the goodwill impairment test by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of comparison of the fair value of a reporting unit to its carrying amount. Application of a goodwill impairment test requires significant management judgments, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Impairment loss for goodwill of $11,111,886 and nil |
Investment in equity investees | (m) Investment in equity investees Investee companies over which the Company has the ability to exercise significant influence but does not have a controlling interest through investment in common shares or in substance common shares are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%, and other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, the Company initially records its investment at cost and subsequently recognizes the Company’s proportionate share of each equity investee’s net income or loss after the date of investment into the consolidated and combined statements of operations and comprehensive loss and accordingly adjusts the carrying amount of the investment. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company reviews its equity method investments for impairment whenever an event or circumstance indicates that other-than-temporary impairment has occurred. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its equity method investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis. |
Revenue recognition | (n) Revenue recognition The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. The Company recognizes revenue when goods or services are transferred to 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 years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 Vehicles sales $ 8,235,053 $ 7,287,478 Spare-parts sales 304,506 195,350 Other service income 402,276 1,094,004 Net revenues $ 8,941,835 $ 8,576,832 The Company’s revenues are primarily derived from Europe, America and Asia. The following table sets forth disaggregation of revenue by customer location. For the Years Ended December 31, 2022 2021 Primary geographical markets Europe $ 7,052,452 $ 4,380,752 America 697,452 3,420,636 Asia 1,191,931 729,868 Oceania - 45,576 Total $ 8,941,835 $ 8,576,832 Contract Balances Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment. Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2022 and 2021, the Company recognized $1,105,076 and $1,051,832 revenue that was included in contractual liabilities as of January 1, 2022 and 2021, respectively. The following table provides information about receivables and contractual liabilities from contracts with customers: December 31, 2022 December 31, 2021 Accounts receivable, net $ 565,398 $ 2,047,560 Contractual liabilities $ 2,388,480 $ 1,943,623 |
Cost of goods sold | (o) Cost of goods sold Cost of goods sold mainly consists of production related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of property, plant and equipment, manufacturing waste treatment processing fees and inventory write-downs. |
Government grants | (p) Government grants |
Income taxes | (q) Income taxes The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As required by applicable tax law, interest on non-payment of income taxes and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes. The tax returns of the Company and its Germany, Hong Kong and PRC subsidiaries are subject to examination by the relevant local tax authorities. The standard period in which Australian Taxation Office can amend an assessment is four years and there is no statute of limitation in the case of fraud or evasion. The statutory limitation period in Germany for the issue or correction of assessments is four years from the end of the year in which the return was filed. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. 2014 through 2022 |
Foreign currency translation and transaction | (r) Foreign currency translation and transaction The consolidated and combined financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of CEGL’s PRC subsidiaries is the Renminbi (“RMB”). The functional currency of CEA is the EUR, and CEGL and its other subsidiaries outside of PRC is the USD. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated and combined financial statements are translated into USD from RMB at their historical exchange rates when the capital transactions occurred. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets. The rates are obtained from H.10 statistical release of the U.S. Federal Reserve Board. For the Years Ended December 31, 2022 2021 Period end USD: RMB exchange rate 6.8972 6.3726 Average USD: RMB exchange rate 6.7290 6.4508 Period end USD: EUR exchange rate 0.9348 0.8835 Average USD: EUR exchange rate 0.9493 0.8453 |
Comprehensive loss | (s) Comprehensive loss Comprehensive loss includes all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive loss are required to be reported in a financial statement that is presented with the same prominence as other financial statements. For the years presented, comprehensive loss includes net loss and the foreign currency translation changes. |
Segments | (t) Segments In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated and combined results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2022 and 2021. Long-lived assets December 31, 2022 2021 PRC $ 18,018,954 $ 2,177,091 US 9,125,535 527,469 Dominican 469,740 - Others 99,303 269,360 Total $ 27,713,532 $ 2,973,920 |
Share-based compensation expenses | (u) Share-based compensation expenses The Company’s share-based compensation expenses are recorded in accordance with ASC 718 and ASC 710. Share-based awards to employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a straight-line basis, over the requisite service period, with a corresponding impact reflected in additional paid-in capital. The estimate of forfeiture rate will be adjusted over the requisite service period to the extent that the actual forfeiture rate differs, or is expected to differ, from such estimates. Changes in estimated forfeiture rate will be recognized through a cumulative catch-up adjustment in the period of change. |
Convertible promissory notes | (v) Convertible promissory notes The Company has elected the fair value option to account for its convertible promissory notes issued during 2022. In accordance with ASC 825, the convertible promissory notes are marked-to-market at each reporting date with changes in fair value recorded as a component of other income (expense), in the consolidated statements of operations and comprehensive loss. We disclose the nature and terms, the income statement effects, the valuation methods and assumptions of the convertible promissory notes in Note 15 to our consolidated financial statements. |
Derivative liability | (w) Derivative liability Warrants recorded as liabilities at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”. The liability remeasured every reporting period with any change to fair value recorded in the consolidated and combined statements of operations. |
Operating lease | (x) Operating lease The Company adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases and (iii) did not require the Company to reassess initial direct costs for any existing leases. Therefore, the Company did not consider its existing land use right that was not previously accounted for as leases under Topic 840. For all operating leases except for short-term leases, the Company recognized operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less were short-term leases and not recognized as right-of-use assets and lease liabilities on the consolidated and combined balance sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Some of the Company’s lease agreements contained renewal options; however, the Company did not recognize right-of-use assets or lease liabilities for renewal periods unless it was determined that the Company was reasonably certain of renewing the lease at inception or when a triggering event occurred. The Company’s lease agreements did not contain any material residual value guarantees or material restrictive covenants. |
Non-controlling Interest | (y) Non-controlling Interest A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company’s shareholders. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and consolidated and combined statements of operations and other comprehensive loss are attributed to controlling and non-controlling interests. |
Recently issued accounting standards pronouncements | (z) Recently issued accounting standards pronouncements The Group is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Group will adopt ASU 2016-13 from January 1, 2023. The Group expects the adoption of this guidance does not have a material impact on the consolidated financial statements. Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | |
Net Cash Proceeds from Reverse Recapitalization | The following table shows the net cash proceeds from the reverse recapitalization: Reverse recapitalization Cash – NBG $ 247,382,859 Less: transaction costs - paid in FY2021 (883,300 ) transaction costs - paid in FY2022 (904,843 ) Net cash contributions from reverse recapitalization $ 245,594,716 |
Significant Subsidiaries of Company | As of December 31, 2022, CEGL’s subsidiaries are as follows: Name Date of Incorporation Place of Incorporation Percentage of direct or indirect economic interest Cenntro Electric CICS, SRL November 30, 2022 Santo Domingo, Dominican Republic 100% owned by CEGL Cennatic Power, Inc. (“Cennatic Power”) June 8, 2022 Delaware, U.S. 100% owned by CEGL Cenntro Automotive Europe GmbH (“CAE”) May 21, 2019 Herne, Germany 65% owned by CEGL Cenntro Electric Group (Europe) GmbH (“Cenntro Electric”) January 13, 2022 Düsseldorf, Germany 100% owned by CEGL Cennatic Energy S. de R.L. de C.V. August 24, 2022 Monterrey, Mexico 99% and 1% owned by Cennatic Power and CAC, respectively Cenntro Electric B.V. December 12, 2022 Amsterdam, Netherlands 100% owned by CEGL Cenntro Automotive Corporation (“CAC”) March 22, 2013 Delaware, U.S. 100% owned by CEGL Cenntro Electric Group, Inc. (“CEG”) March 9, 2020 Delaware, U.S. 100% owned by CEGL Cenntro Automotive Group Limited (“CAG HK”) February 15, 2016 Hong Kong 100% owned by CEGL Simachinery Equipment Limited (“Simachinery HK”) June 2, 2011 Hong Kong 100% owned by CAG HK Zhejiang Cenntro Machinery Co., Limited January 20, 2021 PRC 100% owned by CAG HK Jiangsu Tooniu Tech Co., Limited December 19, 2018 PRC 100% owned by CAG HK Hangzhou Ronda Tech Co., Limited (“Hangzhou Ronda”) June 5, 2017 PRC 100% owned by CAG HK Hangzhou Cenntro Autotech Co., Limited (“Cenntro Hangzhou”) May 6, 2016 PRC 100% owned by CAG HK Zhejiang Sinomachinery Co., Limited (“Sinomachinery Zhejiang”) June 16, 2011 PRC 100% owned by Simachinery HK Shengzhou Cenntro Machinery Co., Limited (“Cenntro Machinery”) July 12, 2012 PRC 100% owned by Cenntro Hangzhou Hangzhou Hengzhong Tech Co., Limited December 16, 2014 PRC 100% owned by Cenntro Hangzhou Zhejiang Xbean Tech Co., Limited* December 28, 2016 PRC 100% owned by Sinomachinery Zhejiang * Zhejiang Xbean Tech Co., Limited was in the liquidation process as of December 31, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Estimated Useful Lives | Estimated useful lives are as follows: 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 |
Estimated Useful Lives of Intangible Assets | Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows: Category Estimated useful life Land use rights 45.75 years Software 3 years |
Disaggregation of Revenue | The following table disaggregates the Company’s revenues by product line for the years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 Vehicles sales $ 8,235,053 $ 7,287,478 Spare-parts sales 304,506 195,350 Other service income 402,276 1,094,004 Net revenues $ 8,941,835 $ 8,576,832 The Company’s revenues are primarily derived from Europe, America and Asia. The following table sets forth disaggregation of revenue by customer location. For the Years Ended December 31, 2022 2021 Primary geographical markets Europe $ 7,052,452 $ 4,380,752 America 697,452 3,420,636 Asia 1,191,931 729,868 Oceania - 45,576 Total $ 8,941,835 $ 8,576,832 |
Receivables and Contractual Liabilities from Contracts with Customers | The following table provides information about receivables and contractual liabilities from contracts with customers: December 31, 2022 December 31, 2021 Accounts receivable, net $ 565,398 $ 2,047,560 Contractual liabilities $ 2,388,480 $ 1,943,623 |
Foreign Currency Translation Rates | Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated and combined financial statements are translated into USD from RMB at their historical exchange rates when the capital transactions occurred. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the balance sheets. The rates are obtained from H.10 statistical release of the U.S. Federal Reserve Board. For the Years Ended December 31, 2022 2021 Period end USD: RMB exchange rate 6.8972 6.3726 Average USD: RMB exchange rate 6.7290 6.4508 Period end USD: EUR exchange rate 0.9348 0.8835 Average USD: EUR exchange rate 0.9493 0.8453 |
Long-lived Assets by Geographic Segment | The following table presents long-lived assets by geographic segment as of December 31, 2022 and 2021. Long-lived assets December 31, 2022 2021 PRC $ 18,018,954 $ 2,177,091 US 9,125,535 527,469 Dominican 469,740 - Others 99,303 269,360 Total $ 27,713,532 $ 2,973,920 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS COMBINATION [Abstract] | |
Assets Acquired and Liabilities Assumed | On the acquisition date March 25, 2022, the allocation of the consideration of the assets acquired and liabilities assumed based on their fair value was as follows: Amount Cash and cash equivalents $ 1,118,700 Inventories (1) 6,144,219 Other current assets 3,209,947 Intangible assets 3,075,800 Goodwill (2) 11,409,990 Other non-current assets 580,748 Total assets 25,539,404 Loan from CAE (13,072,150 ) Deferred tax liabilities (3) (922,740 ) Other liabilities (6,419,070 ) Total liabilities (20,413,960 ) Total net assets 5,125,444 Less: Non-controlling interest 1,555,320 Net assets acquired by the Company 3,570,124 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | |
Accounts Receivable | Accounts receivable, net is summarized as follows: December 31, December 31, Accounts receivable $ 2,526,432 $ 3,523,543 Less: provision for doubtful accounts (1,961,034 ) (1,475,983 ) Accounts receivable, net $ 565,398 $ 2,047,560 The changes in the provision for doubtful accounts are as follows: For the Years Ended December 31, 2022 2021 Balance at the beginning of the year $ 1,475,983 $ 1,121,115 Additions 1,394,591 391,189 Write-off (922,632 ) (86,170 ) Foreign exchange 13,092 49,849 Balance at the end of the year $ 1,961,034 $ 1,475,983 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are summarized as follows: December 31, December 31, Raw material $ 9,311,419 $ 2,055,844 Work-in-progress 290,220 1,110,469 Goods in transit 2,364,136 50,795 Finished goods 19,877,596 4,922,708 Inventories $ 31,843,371 $ 8,139,816 |
PREPAYMENT AND OTHER CURRENT _2
PREPAYMENT AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | |
Prepayment and Other Current Assets | Prepayment and other current assets consisted of the following: December 31, 2022 December 31, 2021 Advance to suppliers $ 9,877,337 $ 3,686,708 Deductible input value added tax 4,097,162 1,196,186 Loans to a third party (1) 1,044,181 - Receivable from third parties 678,887 348,773 Refund for goods and services tax (“GST”) (2) - 2,488,528 Others 440,763 269,412 Prepayment and other current assets $ 16,138,330 $ 7,989,607 (1) L oan 1,000,000 5.00 February 7, 2023 1,000,000 571,930 3.59 (2) G ST is a value-added tax levied on goods and services sold for consumption in Australia. The balance as of December 31, 2021 was excess GST, which has been refunded in 2022. |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY METHOD INVESTMENTS [Abstract] | |
Equity Method Investment | December 31, December 31, Antric GmbH (1) $ 2,674,500 $ - Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2) 2,189,570 - Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3) 367,272 329,197 Able 2rent GmbH (DEU) (4) 94,399 - Total $ 5,325,741 $ 329,197 (1) O n December 16, 2022, the Company invested EUR 2,500,000 2,674,500 Antric GmbH to acquire 25 1,877,083 2,008,103 Antric GmbH . The Company accounts for the investment under the equity method because the Company controls 25 Antric GmbH (2) O n September 25, 2022, the Company invested RMB 15,400,000 2,232,790 Entropy Yu to acquire 99.355 50 Entropy Yu . For the year ended December 31, 2022, the Company recognized investment loss of $ 44,301 . (3) O n June 23, 2021, the Company invested RMB 2,000,000 308,990 20 33 44,039 15,167 (4) O n March 22, 2022, CAE invested EUR 100,000 106,980 50 12,389 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
Property, Plant and Equipment, Net | P roperty, plant and equipment December 31, December 31, At cost: Plant and building (1) $ 11,453,436 $ - Machinery and equipment 2,413,087 2,068,056 Leasehold improvement 2,956,515 899,538 Office equipment 1,192,443 818,703 Motor vehicles 352,972 301,079 Total 18,368,453 4,087,376 Less: accumulated depreciation (3,405,862 ) (2,786,150 ) Property, plant and equipment, net $ 14,962,591 $ 1,301,226 (1) O n April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its factory, with an area of 44,451.54 78,968,319 ) |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS, NET [Abstract] | |
Intangible Assets, Net | Intangible assets, net consisted of the following: December 31, 2022 December 31, 2021 At cost: Land use right (1) $ 4,605,738 $ - Software 119,550 129,392 Total 4,725,288 129,392 Less: accumulated amortization (161,496 ) (126,079 ) Intangible assets, net $ 4,563,792 $ 3,313 (1) On April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its land use right, with an area of 56,302 45.75 31,766,697 4,605,738 |
OTHER NON-CURRENT ASSETS, NET (
OTHER NON-CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET [Abstract] | |
Other Non-Current Assets, Net | December 31, December 31, Loan to the third party $ 4,591,717 $ - Receivable from a third party (2) - 2,353,827 Long-term prepayment (3) 1,280,974 1,587,693 Deposit 758,038 564,007 Total 6,630,729 4,505,527 Less: provision for loan to the third party and receivable from a third party (1) & (4,591,717 ) (2,353,827 ) Other non-current assets, net $ 2,039,012 $ 2,151,700 (1) The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026. As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022. The company believes that the possibility of the collection is remote and recorded full provision for the loan. (2) In 2018, the Company signed an agreement with Anhua Automotive Co. Ltd., (“Anhua”) and paid an initial non-refundable deposit to participate in Anhua’s bankruptcy recombination process to develop further production capacity in China. However, due to the irrecoverable deterioration of Anhua’s business and Cenntro’s focus on Europe and America markets, Cenntro declined to further participate in the recombination process. Therefore, Cenntro recorded full provision for the deposit. The balance was written off for the year ended December 31, 2022 (3) T he balance mainly represented a six-year |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities are summarized as follow: December 31, December 31, Accrued litigation compensation $ 1,590,484 $ - Accrued professional fees 919,525 2,429,843 Accrued expenses 797,969 - Payable for purchasing the factory 588,645 - Employee payroll and welfare payables 452,904 561,469 Interest expense of convertible loans 383,250 - Other taxes payable 118,469 48,672 Credit card payable 22,908 510,151 Loans from third parties - 419,642 Others 174,487 213,486 Total $ 5,048,641 $ 4,183,263 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES [Abstract] | |
Components of Losses Before Income Taxes | The components of losses before income taxes are summarized as follows: For the Years Ended December 31, 2022 2021 PRC $ (7,386,251 ) $ (5,477,857 ) US (17,254,945 ) (9,234,455 ) Europe (20,130,854 ) - Australia (67,392,512 ) (1,128,325 ) Others 19,300 (581,170 ) Total $ (112,145,263 ) $ (16,421,807 ) |
Income Tax Expenses | As the main business operations were concentrated in China, and other losses except for PRC losses are caused by non-operating activities, PRC statutory income tax rate was applied. The actual income tax expense reported in the consolidated and combined statements of operations and comprehensive loss for years ended December 31, 2022 and 2021 differs from the amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following: For the Years Ended December 31, 2022 2021 Loss before provision for income tax $ (112,145,263 ) $ (16,421,807 ) PRC statutory income tax rate 25 % 25 % Income tax expense at the PRC statutory rate (28,036,316 ) (4,105,452 ) Effect of preferential tax rate 161,592 279,886 Effect of international tax rates (2,255,963 ) 420,450 Effect of non-deductible expenses 1,069,009 396,826 Effect of research and development deduction (568,446 ) (204,807 ) Fair value change of warrant liability 3,912,074 - Impairment loss of goodwill 2,777,972 - Effect of valuation allowance 22,940,078 3,213,097 Total income tax expense - - Effective income tax rate 0 % 0 % |
Deferred Income Tax Assets | The tax effects of temporary differences that give rise to the deferred income tax assets balances as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 Deferred income tax assets: Impairment loss $ 3,532,162 $ 2,013,232 Change in fair value of financial instrument 912,340 - Capitalization of research and experimental costs 369,687 - Net operating loss carry forwards 28,818,841 12,646,183 Total deferred income tax assets 33,633,030 14,659,415 Valuation allowance (33,633,030 ) (14,659,415 ) Deferred income tax assets, net $ - $ - |
Changes Related to Valuation Allowance | The changes related to valuation allowance are as follows: For the Years Ended December 31, 2022 2021 Balance at the beginning of the year $ 14,659,415 $ 19,072,736 Additions during the year 22,940,078 3,213,097 Expire of NOL (1,318,979 ) (1,243,653 ) Write-off of employee stock ownership plans deferred tax asset - (4,981,854 ) Change in tax rate (91,423 ) (959,106 ) Company deregistration - (708,266 ) Exchange rate effect (2,556,061 ) 266,461 Balance at the end of the year $ 33,633,030 $ 14,659,415 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES [Abstract] | |
Summary of Lease Cost | A summary of lease cost recognized in the Company’s consolidated and combined statements of operations and comprehensive loss is as follows: For the Years Ended December 31, 2022 2021 Operating leases cost excluding short-term rental expense $ 1,616,853 $ 682,616 Short-term lease cost 238,386 4,974 Total $ 1,855,239 $ 687,590 |
Summary of Supplemental Information Related to Operating Leases | A summary of supplemental information related to operating leases is as follows: December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 1,108,721 $ 879,788 Weighted average remaining lease term 8.36 years 2.00 years Weighted average discount rate 4.27 % 3.80 % |
Summary of Maturity of Lease Liabilities Under Operating Leases | The following table summarizes the maturity of lease liabilities under operating leases as of December 31, 2022: For the year ending December 31, Operating 2023 $ 1,341,954 2024 1,296,713 2025 1,043,197 2026 1,086,121 2027 1,119,334 2028 and thereafter 4,679,951 Total lease payments 10,567,270 Less: imputed interest 1,832,354 Total 8,734,916 Less: current portion 1,313,334 Non-current portion $ 7,421,582 |
CONVERTIBLE PROMISSORY NOTE A_2
CONVERTIBLE PROMISSORY NOTE AND WARRANT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Debt [Line Items] | |
Movement of Note | The movement of Note during the year ended December 31, 2022 are as follows: Liability component As of December 31, 2021 $ - Convertible promissory notes issued during the year 38,966,261 Redemption of convertible promissory notes (3,720,064 ) Fair value change recognized 22,126,630 As of December 31, 2022 $ 57,372,827 |
Movement of Warrants | The movement of warrants during the year ended December 31, 2022 are as follows: Investor warrants component Placement agent warrants component As of December 31, 2021 $ - $ - Warrants issued during the year 19,333,739 1,358,336 Exercise of warrants (18,549,865 ) - Fair value change recognized 13,550,230 2,098,068 As of December 31, 2022 14,334,104 3,456,404 |
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: Fair Value Assumptions – Warrants December 31, 2022 July 20, 2022 Expected term (years) 4.55 5.00 Volatility 77.72 % 75.85 % Risk free rate 4.13 % 3.24 % |
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: Fair Value Assumptions - Convertible Promissory Note December 31, 2022 July 20, 2022 Face value principal payable 57,488,000 61,215,000 Original conversion price 1.2375 1.2375 Interest Rate 8.00 % 8.00 % Expected term (years) 0.55 1.00 Volatility 75.13 % 71.29 % Market yield (range) 18.02 % 18.02 % Risk free rate 4.69 % 2.96 % Issue date July 20, 2022 July 20, 2022 Maturity date July 19, 2023 July 19, 2023 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION [Abstract] | |
Share-based Compensation Expenses | For the year ended December 31, 2022 and 2021, the total share-based compensation expenses were comprised of the following: For the Years Ended December 31, 2022 2021 Selling and marketing expenses $ 504,199 $ - Research and development expenses 284,805 152,694 General and administrative expenses 3,242,625 975,631 Total $ 4,031,629 $ 1,128,325 |
Share Options Activity | A summary of share options activity for the years ended December 31, 2022 and 2021 is as follows: Number of Share Options Weighted Average Exercise Price US$ Weighted Average Remaining Contractual Years Aggregate Intrinsic Value US$ Outstanding at January 1, 2021 18,976,130 0.98 3.56 24,410,306 Granted - - Exercised - - Forfeited (5,492,000 ) 1.42 Expired (593,000 ) 1.19 Modification of option as of 30/12/2021 9,225,271 1.10 Outstanding at December 31, 2021 9,225,271 1.10 2.60 42,799,081 Granted 12,797,063 1.68 Exercised (51,468 ) 0.28 Forfeited (334,167 ) 1.68 Expired (33,333 ) 1.68 Outstanding at December 31, 2022 21,603,366 1.44 5.99 721,210 Expected to vest at December 31, 2022 10,130,075 1.71 9.16 - Exercisable as of December 31, 2022 11,473,291 1.20 3.19 721,210 |
Fair Value Assumptions | The assumptions used in the valuation model are summarized in the following table. For the Years Ended December 31, 2022 2021 Modification Before Modification Expected volatility 86.28%~83.96% 58.09%-91.85% 82.33%-93.48% Expected dividends yield 0% 0% 0% Risk-free interest rate per annum 2.97%~3.01% 0.06%-1.36% 1.84%-2.40% The fair value of underlying ordinary shares (per share) $1.68 $5.74 $1.21-$2.92 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE [Abstract] | |
Calculation of Basic and Diluted Net Loss Per Share | Basic and diluted net loss per share for each of the year presented were calculated as follows: For the Years Ended December 31, 2022 2021 Numerator: Net loss attributable to the Company’s shareholders (110,088,241 ) (16,421,807 ) Denominator: Weighted average ordinary shares used in computing basic and diluted loss per share 263,323,238 175,090,266 Basic and diluted net loss per share (0.42 ) (0.09 ) |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CONCENTRATIONS [Abstract] | |
Customer and Purchase Concentration Risks | (a) Customers The following table sets forth information as to each customer that accounted for 10% or more of net revenue for the years ended December 31, 2022 and 2021. Year ended Year ended December 31, 2022, December 31, 2021, Customer Amount % of Total Amount % of Total A 1,304,969 15 % - - B - - 3,543,423 41 % C 419,928 * 2,556,537 30 % D 265,972 * 848,399 10 % Total $ 1,990,869 15 % $ 6,948,359 81 % * Indicates below 10%. The following table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable as of December 31, 2022 and 2021. As of December 31, 2022, As of December 31, 2021, Customer Amount % of Total Amount % of Total B $ 410,321 16 % $ 2,084,879 59 % E 1,197,023 47 % - - F 395,360 16 % - - G - - 864,106 25 % Total $ 2,002,704 79 % $ 2,948,985 84 % (b) Suppliers For the years ended December 31, 2022 and 2021, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows: Year ended December 31, 2022, Year ended December 31, 2021, Supplier Amount % of Total Amount % of Total A $ 6,078,079 26 % $ 2,219,792 21 % B 2,885,202 12 % - - Total $ 8,963,281 38 % $ 2,219,792 21 % The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of December 31, 2022 and 2021. As of December 31, 2022, As of December 31, 2021, Supplier Amount % of Total Amount % of Total A $ 420,100 12 % $ - - C 577,621 17 % - - Total $ 997,721 29 % $ - - |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Related Party Transactions and Balances | The table below sets forth the major related parties and their relationships with the Company: Name of related parties: Relationship with the Company Mr. Peter Wang Chairman, Chief Executive Officer, and principal shareholder of the Company Mr. Yeung Heung Yeung A principal shareholder of the Company Bendon Limited Controlled by Mr. Justin Davis-Rice, a director of CEGL. As for the resignation of Mr. Justin Davis-Rice in 2022, it was not a related party as of December 31, 2022. Mr. Zhong Wei Chief Technology Officer of the Company Ms. Xu Cheng Immediate family of Mr. Chris Xiongjian Chen, former Chief Operating Officer of CAG Cayman CAG Cayman Mr. Peter Wang is a principal shareholder Devirra Corporation Limited and its subsidiaries (Collectively referred to the “Devirra Group”) Entities controlled by CAG Cayman Cenntro Holding Limited Ultimately controlled by Mr. Peter Wang Zhejiang Zhongchai Machinery Co., Ltd (“Zhejiang Zhongchai”) Ultimately controlled by Mr. Peter Wang 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 Zhuhai Hengzhong Industrial Investment Fund (Limited Partner) (“Zhuhai Hengzhong”) Mr. Peter Wang served as General Partner Shenzhen Yuanzheng Investment Development Co. Ltd (“Shenzhen Yuanzheng“) Controlled by Mr. Yeung Heung Yeung Shanghai Hengyu Enterprise Management Consulting Co., Ltd (“Shanghai Hengyu”) Ultimately controlled by Mr. Peter Wang Antric GmbH Invested by the Company Related party transactions During the years ended December 31, 2022 and 2021, the Company had the following material related party transactions. For the Years Ended December 31, 2022 2021 Interest income from a related party Zhejiang RAP $ 13,434 $ 23,114 Bendon Limited 113,021 39,296 Purchase of raw materials from related parties Jiangsu Rongyuan - 24,799 Hangzhou Hezhe Energy Technology Co., Ltd 1,413,262 1,219,621 Revenue from sales of equipment to a related party Zhejiang Zhongchai 119,963 - Payment on the purchase of the raw materials Hangzhou Hezhe 1,015,036 2,027,483 Repayment of the advance operating fund from a related party Zhejiang Zhongchai 276,266 - Consulting service provided by a related party Shanghai Hengyu 5,053 29,919 Repayment interest-bearing Loan from a related party Shenzhen Yuanzheng 395,523 - Mr. Yeung Heung Yeung 1,331,091 - Interest expense on loans provided by related parties Mr. Yeung Heung Yeung 2,532 132,000 Mr. Zhong Wei - 6,039 Others 1,075 40,005 Amounts due from Related Parties – current The following table presents amounts due from related parties as of December 31, 2022 and 2021. As of December 31, 2022 2021 Hangzhou Hezhe (1) 366,936 817,640 Zhejiang Zhongchai (2) - 412,797 Shanghai Hengyu - 2,197 Jiangsu Rongyuan (3) - 166,911 Total 366,936 1,399,545 Less: provision for receivable from a related party (3) - (166,911 ) Amounts due from related parties, net $ 366,936 $ 1,232,634 (1) The balance mainly represents the prepayment for raw material to the related party. (2) The balances mainly represent accounts receivable relating to the sale of industrial equipment of $340,770 and advances to Zhejiang Zhongchai for daily operational purposes of $72,027 as of December 31, 2021. (3) The balances mainly represent advances to related parties for daily operational purposes. The business conditions of deteriorated and, as a result, the Company recognized provision for receivables of nil The balance was written off during the year ended December 31, 2022. Amounts due from Related Parties – non-current As of December 31, 2022 2021 Bendon Limited (1) $ - $ 4,834,973 Total - 4,834,973 Less: provision for receivable from a related party - - Amounts due from related parties -non-current $ - $ 4,834,973 (1) The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026 As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022. Amounts due to Related Parties The following table presents amounts due to related parties as of December 31, 2022 and 2021. As of December 31, 2022 2021 CAG Cayman (1) $ - $ 13,945,823 Mr. Yeung Heung Yeung (2) - 1,328,559 Shenzhen Yuanzheng (2) - 416,509 Antric GmbH (3) 666,396 - Zhejiang RAP 23,882 40,034 Jiangsu Rongyuan 23,194 25,103 Shanghai Hengyu 2,900 - Total $ 716,372 $ 15,756,028 (1) CAG Cayman was the parent company of Cenntro before the closing of the Combination. The balance as of December 31, 2021 the interest-free It was fully repaid to CAG Cayman in 2022. (2) The balance represented the interest-bearing loan provided by related parties to the Company. The weighted average annual interest rates for the loans was 17.31% as of December 31, 2021. It was fully repaid in 2022. (3) The balance represented the capital injection payable to this related party. On December 16, 2022, the Company invested EUR 2,500,000 2,674,500 Antric GmbH to acquire 25 1,868,750 1,977,380 Antric GmbH . |
ORGANIZATION AND PRINCIPAL AC_3
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% | 65% |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES, Reverse, Recapitalization (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 29, 2021 shares | |
Reverse Recapitalization [Abstract] | |||
Shares issued (in shares) | 174,853,546 | ||
Ordinary shares issued (in shares) | 300,841,995 | 261,256,254 | |
Ordinary shares outstanding (in shares) | 300,841,995 | 261,256,254 | |
Cash - NBG | $ | $ 0 | $ 247,382,859 | |
Less: transaction costs - paid in FY2021 | $ | (883,300) | ||
transaction costs - paid in FY2022 | $ | (904,843) | ||
Net cash contributions from reverse recapitalization | $ | $ 245,594,716 | ||
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 | 86,402,708 | |
Ordinary shares outstanding (in shares) | 86,402,708 | 86,402,708 |
ORGANIZATION AND PRINCIPAL AC_5
ORGANIZATION AND PRINCIPAL ACTIVITIES, Subsidiaries Combination (Details) | 12 Months Ended | |
Dec. 31, 2022 | ||
Cenntro Electric CICS, SRL [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Nov. 30, 2022 | |
Place of Incorporation | Santo Domingo, Dominican Republic | |
Percentage of direct or indirect economic interest | 100% | |
Cennatic Power, Inc. (Cennatic Power) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jun. 08, 2022 | |
Place of Incorporation | Delaware, U.S. | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Automotive Europe GmbH (CAE) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | May 21, 2019 | |
Place of Incorporation | Herne, Germany | |
Percentage of direct or indirect economic interest | 65% | |
Cenntro Electric Group (Europe) GmbH (Cenntro Electric) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jan. 13, 2022 | |
Place of Incorporation | Düsseldorf, Germany | |
Percentage of direct or indirect economic interest | 100% | |
Cennatic Energy S. de R.L. de C.V. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Aug. 24, 2022 | |
Place of Incorporation | Monterrey, Mexico | |
Cennatic Energy S. de R.L. de C.V. and Cennatic Power, Inc. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage of direct or indirect economic interest | 99% | |
Cennatic Energy S. de R.L. de C.V. and Cenntro Automotive Corporation [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage of direct or indirect economic interest | 1% | |
Cenntro Electric B.V. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Dec. 12, 2022 | |
Place of Incorporation | Amsterdam, Netherlands | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Automotive Corporation (CAC) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Mar. 22, 2013 | |
Place of Incorporation | Delaware, U.S. | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Electric Group, Inc. (CEG) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Mar. 09, 2020 | |
Place of Incorporation | Delaware, U.S. | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Automotive Group Limited (CAG HK) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Feb. 15, 2016 | |
Place of Incorporation | Hong Kong | |
Percentage of direct or indirect economic interest | 100% | |
Simachinery Equipment Limited (Simachinery HK) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jun. 02, 2011 | |
Place of Incorporation | Hong Kong | |
Percentage of direct or indirect economic interest | 100% | |
Zhejiang Cenntro Machinery Co., Limited [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jan. 20, 2021 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Jiangsu Tooniu Tech Co., Limited [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Dec. 19, 2018 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Hangzhou Ronda Tech Co., Limited (Hangzhou Ronda) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jun. 05, 2017 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Hangzhou Cenntro Autotech Co., Limited (Cenntro Hangzhou) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | May 06, 2016 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Zhejiang Sinomachinery Co., Limited (Sinomachinery Zhejiang) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jun. 16, 2011 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Shengzhou Cenntro Machinery Co., Limited (Cenntro Machinery) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jul. 12, 2012 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Hangzhou Hengzhong Tech Co., Limited [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Dec. 16, 2014 | |
Place of Incorporation | PRC | |
Percentage of direct or indirect economic interest | 100% | |
Zhejiang Xbean Tech Co., Limited [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Dec. 28, 2016 | [1] |
Place of Incorporation | PRC | [1] |
Percentage of direct or indirect economic interest | 100% | [1] |
[1]Zhejiang Xbean Tech Co., Limited was in the liquidation process as of December 31, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property, Plant and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 20 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 10 years |
Office Equipment [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 5 years |
Motor Vehicles [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 3 years |
Motor Vehicles [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 5 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 3 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 10 years |
Others [Member] | |
Property and Equipment [Abstract] | |
Useful lives | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Intangible Assets, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Land Use Rights [Member] | |
Intangible Assets, Net, Useful Lives [Abstract] | |
Intangible asset, estimated useful life | 45 years 9 months |
Software [Member] | |
Intangible Assets, Net, Useful Lives [Abstract] | |
Intangible asset, estimated useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Impairment of Long-Lived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impairment of long lived assets [Abstract] | ||
Impairment loss for long-lived assets | $ 3,917,537 | $ 6,215 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Abstract] | ||
Impairment loss for goodwill | $ 11,111,886 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investment in Equity Investees (Details) - Investee Companies [Member] | Dec. 31, 2022 |
Minimum [Member] | |
Equity Method Investment [Abstract] | |
Ownership interest | 20% |
Maximum [Member] | |
Equity Method Investment [Abstract] | |
Ownership interest | 50% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregated Revenue Information [Abstract] | ||
Revenue | $ 8,941,835 | $ 8,576,832 |
Contract with Customer, Liability, Revenue Recognized | 1,105,076 | 1,051,832 |
Receivables and Contractual Liabilities from Contracts with Customers [Abstract] | ||
Accounts receivable, net | 565,398 | 2,047,560 |
Contractual liabilities | 2,388,480 | 1,943,623 |
Europe [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 7,052,452 | 4,380,752 |
America [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 697,452 | 3,420,636 |
Asia [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 1,191,931 | 729,868 |
Oceania [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 0 | 45,576 |
Vehicles Sales [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 8,235,053 | 7,287,478 |
Spare-Parts Sales [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | 304,506 | 195,350 |
Other Service Income [Member] | ||
Disaggregated Revenue Information [Abstract] | ||
Revenue | $ 402,276 | $ 1,094,004 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) | 12 Months Ended | ||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Income Tax Expense [Abstract] | |||
Interest or penalties associated with tax position | $ 0 | $ 0 | |
Unrecognized tax positions | $ 0 | $ 0 | |
Australian Taxation Office [Member] | |||
Income Tax Expense [Abstract] | |||
Period of tax assessment years from investigation | 4 years | ||
Germany [Member] | |||
Income Tax Expense [Abstract] | |||
Period of tax assessment years for issue or correction from investigation | 4 years | ||
Hong Kong [Member] | |||
Income Tax Expense [Abstract] | |||
Period of prior tax assessment years from investigation | 6 years | ||
Extended period of prior tax assessment years from investigation | 10 years | ||
PRC [Member] | |||
Income Tax Expense [Abstract] | |||
Statute of limitations related to income tax examinations | 3 years | ||
Statute of limitations related to income tax examinations, under special circumstance | 5 years | ||
Statute of limitations related to income tax examinations, underpayment of taxes | ¥ | ¥ 100,000 | ||
Statute of limitations related to income tax examinations, transfer pricing issues | 10 years | ||
U.S. Federal [Member] | |||
Income Tax Expense [Abstract] | |||
Open tax examination years | 2014 2015 2016 2017 2018 2019 2020 2021 2022 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency Translation and Transaction (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
RMB [Member] | ||
Foreign Currency Translation [Abstract] | ||
Average USD: exchange rate | 6.729 | 6.4508 |
Period end USD: exchange rate | 6.8972 | 6.3726 |
EUR [Member] | ||
Foreign Currency Translation [Abstract] | ||
Average USD: exchange rate | 0.9493 | 0.8453 |
Period end USD: exchange rate | 0.9348 | 0.8835 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Segments (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | |
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Number of reportable segments | Segment | 1 | |
Long-lived assets | $ 27,713,532 | $ 2,973,920 |
PRC [Member] | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Long-lived assets | 18,018,954 | 2,177,091 |
US [Member] | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Long-lived assets | 9,125,535 | 527,469 |
Dominican [Member] | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Long-lived assets | 469,740 | 0 |
Others [Member] | ||
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Long-lived assets | $ 99,303 | $ 269,360 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) | Dec. 13, 2022 EUR (€) | Dec. 13, 2022 USD ($) | Mar. 25, 2022 EUR (€) | Mar. 25, 2022 USD ($) | Mar. 05, 2022 | |
Assets Acquired and Liabilities Assumed [Abstract] | ||||||
Inventory purchased form parent | $ 4,484,007 | |||||
Mosolf SE & Co [Member] | ||||||
Acquisition [Abstract] | ||||||
Purchase consideration of stock acquired | € 1,750,000 | $ 1,860,000 | ||||
Assets Acquired and Liabilities Assumed [Abstract] | ||||||
Cash and cash equivalents | 1,118,700 | |||||
Inventories (1) | [1] | 6,144,219 | ||||
Other current assets | 3,209,947 | |||||
Intangible assets | 3,075,800 | |||||
Goodwill (2) | [2] | 11,409,990 | ||||
Other non-current assets | 580,748 | |||||
Total assets | 25,539,404 | |||||
Loan from CAE | (13,072,150) | |||||
Deferred tax liabilities (3) | [3] | (922,740) | ||||
Other liabilities | (6,419,070) | |||||
Total liabilities | (20,413,960) | |||||
Total net assets | 5,125,444 | |||||
Less: Non-controlling interest | 1,555,320 | |||||
Net assets acquired by the Company | 3,570,124 | |||||
Tropos Motors Europe GmbH [Member] | Mosolf SE & Co [Member] | ||||||
Acquisition [Abstract] | ||||||
Percentage of issued and outstanding shares acquired | 35% | 35% | 65% | |||
Purchase consideration of stock acquired | € 3,250,000 | 3,600,000 | ||||
Consideration of acquisition | 15,150,000 | 16,600,000 | ||||
Shareholder Loan [Member] | Mosolf SE & Co [Member] | ||||||
Acquisition [Abstract] | ||||||
Percentage of shareholder loan acquired | 100% | |||||
Purchase consideration of stock acquired | 11,900,000 | 13,000,000 | ||||
Purchase price is held in escrow account | € 3,000,000 | $ 3,300,000 | ||||
[1]The inventories of $ 4,484,007 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable [Abstract] | ||
Accounts receivable | $ 2,526,432 | $ 3,523,543 |
Less: provision for doubtful accounts | (1,961,034) | (1,475,983) |
Accounts receivable, net | 565,398 | 2,047,560 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at the beginning of the year | 1,475,983 | 1,121,115 |
Additions | 1,394,591 | 391,189 |
Write-off | (922,632) | (86,170) |
Foreign exchange | 13,092 | 49,849 |
Balance at the end of the year | $ 1,961,034 | $ 1,475,983 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INVENTORIES [Abstract] | ||
Raw material | $ 9,311,419 | $ 2,055,844 |
Work-in-progress | 290,220 | 1,110,469 |
Goods in transit | 2,364,136 | 50,795 |
Finished goods | 19,877,596 | 4,922,708 |
Inventories | 31,843,371 | 8,139,816 |
Impairment loss | $ 2,155,400 | $ 1,265,890 |
PREPAYMENT AND OTHER CURRENT _3
PREPAYMENT AND OTHER CURRENT ASSETS (Details) - USD ($) | 12 Months Ended | |||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||||
Advance to suppliers | $ 9,877,337 | $ 3,686,708 | ||
Deductible input value added tax | 4,097,162 | 1,196,186 | ||
Loans to a third party | [1] | 1,044,181 | 0 | |
Receivable from third parties | 678,887 | 348,773 | ||
Refund for goods and services tax ("GST") | [2] | 0 | 2,488,528 | |
Others | 440,763 | 269,412 | ||
Prepayment and other current assets | 16,138,330 | $ 7,989,607 | ||
HW Electro Co., Ltd. [Member] | ||||
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||||
Aggregate principal amount | $ 1,000,000 | |||
Annual interest rate | 5% | |||
Maturity period | Feb. 07, 2023 | |||
HW Electro Co., Ltd. [Member] | Subsequent Event [Member] | ||||
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||||
Aggregate principal amount | $ 1,000,000 | |||
Annual interest rate | 3.59% | |||
Conversion shares (in shares) | 571,930 | |||
[1] L oan 1,000,000 5.00 February 7, 2023 1,000,000 571,930 3.59 ST is a value-added tax levied on goods and services sold for consumption in Australia. The balance as of December 31, 2021 was excess GST, which has been refunded in 2022. |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details) | 12 Months Ended | ||||||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) | 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 | $ 5,325,741 | $ 329,197 | |||||||||||
Payments for capital investment | 30,000,000 | 0 | |||||||||||
Gain (loss) from equity method investments | (12,651) | 15,167 | |||||||||||
Antric GmbH [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 2,674,500 | [1] | 0 | [1] | $ 2,674,500 | € 2,500,000 | |||||||
Percentage of ownership interest, equity method investment | 25% | 25% | |||||||||||
Payments for capital investment | 2,008,103 | € 1,877,083 | |||||||||||
Percentage of voting interests | 25% | 25% | |||||||||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 2,189,570 | [2] | 0 | [2] | $ 2,232,790 | ¥ 15,400,000 | |||||||
Percentage of ownership interest, equity method investment | 99.355% | 99.355% | |||||||||||
Percentage of voting interests | 50% | 50% | |||||||||||
Gain (loss) from equity method investments | (44,301) | ||||||||||||
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 367,272 | [3] | 329,197 | [3] | $ 308,990 | ¥ 2,000,000 | |||||||
Percentage of ownership interest, equity method investment | 20% | 20% | |||||||||||
Percentage of voting interests | 33% | 33% | |||||||||||
Gain (loss) from equity method investments | 44,039 | 15,167 | |||||||||||
Able 2rent GmbH [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 94,399 | [4] | $ 0 | [4] | $ 106,980 | € 100,000 | |||||||
Percentage of ownership interest, equity method investment | 50% | 50% | |||||||||||
Gain (loss) from equity method investments | $ (12,389) | ||||||||||||
[1]O n December 16, 2022, the Company invested EUR 2,500,000 2,674,500 Antric GmbH to acquire 25 1,877,083 2,008,103 Antric GmbH . The Company accounts for the investment under the equity method because the Company controls 25 Antric GmbH n September 25, 2022, the Company invested RMB 15,400,000 2,232,790 Entropy Yu to acquire 99.355 50 Entropy Yu . For the year ended December 31, 2022, the Company recognized investment loss of $ 44,301 . n June 23, 2021, the Company invested RMB 2,000,000 308,990 20 33 44,039 15,167 n March 22, 2022, CAE invested EUR 100,000 106,980 50 12,389 |
INVESTMENT IN EQUITY SECURITI_2
INVESTMENT IN EQUITY SECURITIES (Details) | 12 Months Ended | |||
Oct. 12, 2022 USD ($) | Aug. 11, 2022 USD ($) shares | Dec. 31, 2022 USD ($) Investment shares | Dec. 31, 2021 USD ($) | |
Investment Income, Net [Abstract] | ||||
Number of equity investments | Investment | 2 | |||
Purchase of equity investment | $ 4,256,276 | $ 310,038 | ||
Net asset value of the fund | 29,759,195 | 0 | ||
Changes in fair value of equity investment | $ (240,805) | $ 0 | ||
Investment on Partnership Shares [Member] | ||||
Investment Income, Net [Abstract] | ||||
Purchase of equity investment | $ 25,000,000 | |||
Percentage of limited partnership equity | 100% | |||
Percentage of fixed return on investment | 5% | |||
Notice period for sale of partnership interest | 10 days | |||
Net asset value of the fund | $ 25,128,833 | |||
Net assets of the Partnership | 25,019,244 | |||
Changes in fair value of equity investment | $ 19,244 | |||
Investment on Participating Shares [Member] | ||||
Investment Income, Net [Abstract] | ||||
Purchase of equity investment | $ 5,000,000 | |||
Percentage of limited partnership equity | 59% | |||
Number of participating shares purchased (in shares) | shares | 4,454.37 | 4,454.37 | ||
Net asset value of the fund | $ 4,869,908 | |||
Net assets of the Partnership | 8,033,816 | |||
Changes in fair value of equity investment | $ (260,049) |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) | 12 Months Ended | ||||
Apr. 04, 2022 USD ($) ft² | Apr. 04, 2022 CNY (¥) ft² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | ||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | $ 18,368,453 | $ 4,087,376 | |||
Less: accumulated depreciation | (3,405,862) | (2,786,150) | |||
Property, plant and equipment, net | 14,962,591 | 1,301,226 | |||
Depreciation expenses | 907,739 | 589,576 | |||
Impairment loss | (550,402) | (6,215) | |||
Plant and Building [Member] | |||||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | [1] | 11,453,436 | 0 | ||
Area of Land | ft² | 44,451.54 | 44,451.54 | |||
Assets acquired | $ 11,453,436 | ¥ 78,968,319 | |||
Machinery and Equipment [Member] | |||||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | 2,413,087 | 2,068,056 | |||
Leasehold Improvement [Member] | |||||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | 2,956,515 | 899,538 | |||
Office Equipment [Member] | |||||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | 1,192,443 | 818,703 | |||
Motor Vehicles [Member] | |||||
At Cost [Abstract] | |||||
Property, plant and equipment, gross | $ 352,972 | $ 301,079 | |||
[1]O n April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its factory, with an area of 44,451.54 78,968,319 ) |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) | 12 Months Ended | ||||
Apr. 04, 2022 USD ($) m² | Apr. 04, 2022 CNY (¥) m² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | ||
Intangible Assets [Abstract] | |||||
Total | $ 4,725,288 | $ 129,392 | |||
Less: accumulated amortization | (161,496) | (126,079) | |||
Intangible assets, net | 4,563,792 | 3,313 | |||
Amortization expenses | 46,133 | 42,679 | |||
Impairment loss | (2,995,440) | 0 | |||
Land Use Right [Member] | |||||
Intangible Assets [Abstract] | |||||
Total | [1] | $ 4,605,738 | 0 | ||
Area of land | m² | 56,302 | 56,302 | |||
Useful life | 45 years 9 months | ||||
Assets acquired | $ 4,605,738 | ¥ 31,766,697 | |||
Software [Member] | |||||
Intangible Assets [Abstract] | |||||
Total | $ 119,550 | $ 129,392 | |||
Useful life | 3 years | ||||
[1]On April 4, 2022, the Company entered an agreement with Zhejiang HPWINNER Scientific Company Limited to acquire its land use right, with an area of 56,302 45.75 31,766,697 4,605,738 |
OTHER NON-CURRENT ASSETS, NET_2
OTHER NON-CURRENT ASSETS, NET (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 NZD ($) | Dec. 31, 2021 USD ($) | ||
Other Non-current Assets, Net [Abstract] | ||||
Loan to the third party | [1] | $ 4,591,717 | $ 0 | |
Receivable from a third party | [2] | 0 | 2,353,827 | |
Long-term prepayment | [3] | 1,280,974 | 1,587,693 | |
Deposit | 758,038 | 564,007 | ||
Total | 6,630,729 | 4,505,527 | ||
Less: provision for loan to the third party and receivable from a third party | [1],[2] | (4,591,717) | (2,353,827) | |
Other non-current assets, net | $ 2,039,012 | $ 2,151,700 | ||
Period of liability insurance policy for existing officers and directors | 6 years | |||
Loan to Third Party [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 5 years | |||
Aggregate principal amount | $ 4,439,400 | $ 7,000,000 | ||
Interest rate | 2.50% | 2.50% | ||
[1]The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026. As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022. The company believes that the possibility of the collection is remote and recorded full provision for the loan.[2]In 2018, the Company signed an agreement with Anhua Automotive Co. Ltd., (“Anhua”) and paid an initial non-refundable deposit to participate in Anhua’s bankruptcy recombination process to develop further production capacity in China. However, due to the irrecoverable deterioration of Anhua’s business and Cenntro’s focus on Europe and America markets, Cenntro declined to further participate in the recombination process. Therefore, Cenntro recorded full provision for the deposit. The balance was written off for the year ended December 31, 2022.[3] T he balance mainly represented a six-year |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued expenses and other current liabilities [Abstract] | ||
Accrued litigation compensation | $ 1,590,484 | $ 0 |
Accrued professional fees | 919,525 | 2,429,843 |
Accrued expenses | 797,969 | 0 |
Payable for purchasing the factory | 588,645 | 0 |
Employee payroll and welfare payables | 452,904 | 561,469 |
Interest expense of convertible loans | 383,250 | 0 |
Other taxes payable | 118,469 | 48,672 |
Credit card payable | 22,908 | 510,151 |
Loans from third parties | 0 | 419,642 |
Others | 174,487 | 213,486 |
Total | $ 5,048,641 | $ 4,183,263 |
INCOME TAXES, Federal Tax Rate
INCOME TAXES, Federal Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal Statutory Income Tax Rate [Abstract] | ||
Federal tax rate | 25% | 25% |
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% | |
Australia [Member] | ||
Federal Statutory Income Tax Rate [Abstract] | ||
Federal tax rate | 30% | |
United States [Member] | ||
Federal Statutory Income Tax Rate [Abstract] | ||
Federal tax rate | 21% | |
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$2.0 million | 16.50% | |
PRC [Member] | ||
Federal Statutory Income Tax Rate [Abstract] | ||
Federal tax rate | 25% | |
Germany [Member] | ||
Federal Statutory Income Tax Rate [Abstract] | ||
Federal tax rate | 30% |
INCOME TAXES, Components of Los
INCOME TAXES, Components of Losses Before Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES [Abstract] | ||
Income tax expenses | $ 0 | $ 0 |
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (112,145,263) | (16,421,807) |
PRC [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (7,386,251) | (5,477,857) |
US [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (17,254,945) | (9,234,455) |
Europe [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (20,130,854) | 0 |
Australia [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (67,392,512) | (1,128,325) |
Others [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | $ 19,300 | $ (581,170) |
INCOME TAXES, Statutory Income
INCOME TAXES, Statutory Income Tax Rate to Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statutory Income Tax Rate to Income Before Income Taxes [Abstract] | ||
Loss before provision for income tax | $ (112,145,263) | $ (16,421,807) |
PRC statutory income tax rate | 25% | 25% |
Income tax expense at the PRC statutory rate | $ (28,036,316) | $ (4,105,452) |
Effect of preferential tax rate | 161,592 | 279,886 |
Effect of international tax rates | (2,255,963) | 420,450 |
Effect of non-deductible expenses | 1,069,009 | 396,826 |
Effect of research and development deduction | (568,446) | (204,807) |
Fair value change of warrant liability | 3,912,074 | 0 |
Impairment loss of goodwill | 2,777,972 | 0 |
Effect of valuation allowance | 22,940,078 | 3,213,097 |
Total income tax expense | $ 0 | $ 0 |
Effective income tax rate | 0% | 0% |
PRC [Member] | ||
Statutory Income Tax Rate to Income Before Income Taxes [Abstract] | ||
Loss before provision for income tax | $ (7,386,251) | $ (5,477,857) |
PRC statutory income tax rate | 25% |
INCOME TAXES, Deferred Taxes As
INCOME TAXES, Deferred Taxes Assets, Net (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets [Abstract] | |||
Impairment loss | $ 3,532,162 | $ 2,013,232 | |
Change in fair value of financial instrument | 912,340 | 0 | |
Capitalization of research and experimental costs | 369,687 | 0 | |
Net operating loss carry forwards | 28,818,841 | 12,646,183 | |
Total deferred income tax assets | 33,633,030 | 14,659,415 | |
Valuation allowance | (33,633,030) | (14,659,415) | $ (19,072,736) |
Deferred income tax assets, net | $ 0 | $ 0 |
INCOME TAXES, Valuation Allowan
INCOME TAXES, Valuation Allowance (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance [Roll Forward] | ||
Balance at the beginning of the year | $ 14,659,415 | $ 19,072,736 |
Additions during the year | 22,940,078 | 3,213,097 |
Expire of NOL | (1,318,979) | (1,243,653) |
Write-off of employee stock ownership plans deferred tax asset | 0 | (4,981,854) |
Change in tax rate | (91,423) | (959,106) |
Company deregistration | 0 | (708,266) |
Exchange rate effect | (2,556,061) | 266,461 |
Balance at the end of the year | 33,633,030 | 14,659,415 |
Unrecognized uncertain tax positions | 0 | 0 |
Unrecognized liabilities, interest or penalties | 0 | $ 0 |
Hong Kong [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 978,187 | |
United States [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | $ 27,588,978 | |
Percentage of annual taxable income | 80% | |
United States [Member] | 2035 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | $ 3,740,668 | |
United States [Member] | 2036 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 1,430,246 | |
United States [Member] | 2037 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 744,848 | |
PRC [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 39,109,412 | |
PRC [Member] | 2023 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 13,755,682 | |
PRC [Member] | 2024 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 5,696,704 | |
PRC [Member] | 2025 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 2,326,371 | |
PRC [Member] | 2026 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 6,302,877 | |
PRC [Member] | 2027 [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 11,027,780 | |
Germany [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | 14,748,048 | |
Australia [Member] | ||
Valuation Allowance [Roll Forward] | ||
Operating loss carryforwards | $ 28,967,850 |
LEASES (Details)
LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease Cost [Abstract] | ||
Operating leases cost excluding short-term rental expense | $ 1,616,853 | $ 682,616 |
Short-term lease cost | 238,386 | 4,974 |
Total | 1,855,239 | 687,590 |
Supplemental Information Related to Operating Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 1,108,721 | $ 879,788 |
Weighted average remaining lease term | 8 years 4 months 9 days | 2 years |
Weighted average discount rate | 4.27% | 3.80% |
Maturity of Lease Liabilities [Abstract] | ||
2023 | $ 1,341,954 | |
2024 | 1,296,713 | |
2025 | 1,043,197 | |
2026 | 1,086,121 | |
2027 | 1,119,334 | |
2028 and thereafter | 4,679,951 | |
Total lease payments | 10,567,270 | |
Less: imputed interest | 1,832,354 | |
Total | 8,734,916 | |
Less: current portion | $ 1,313,334 | $ 839,330 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Less: current portion | |
Non-current portion | $ 7,421,582 | $ 489,997 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Non-current portion |
CONVERTIBLE PROMISSORY NOTE A_3
CONVERTIBLE PROMISSORY NOTE AND WARRANT, Convertible Promissory Note (Details) | 12 Months Ended | ||
Jul. 20, 2022 USD ($) | Dec. 31, 2022 USD ($) TradingDays $ / shares | Dec. 31, 2021 USD ($) | |
Convertible Promissory Note [Abstract] | |||
Net proceeds after deducting issuance expenses | $ 54,069,000 | $ 0 | |
Movement of Note [Abstract] | |||
Convertible promissory notes, Beginning Balance | 0 | ||
Convertible promissory notes, Ending Balance | $ 57,372,827 | 0 | |
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% | ||
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 | $ 0 | ||
Convertible promissory notes issued during the year | 38,966,261 | ||
Redemption of convertible promissory notes | (3,720,064) | ||
Fair value change recognized | 22,126,630 | ||
Convertible promissory notes, Ending Balance | 57,372,827 | $ 0 | |
Fair Value Assumptions - Convertible Promissory Note [Abstract] | |||
Face value principal payable | $ 61,215,000 | $ 57,488,000 | |
Interest rate | 8% | 8% | |
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% | ||
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 | 1 | 0.55 | |
Convertible Promissory Note [Member] | Volatility [Member] | |||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | |||
Measurement input | 0.7129 | 0.7513 | |
Convertible Promissory Note [Member] | Market yield [Member] | |||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | |||
Measurement input | 0.1802 | 0.1802 | |
Convertible Promissory Note [Member] | Risk Free Rate [Member] | |||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | |||
Measurement input | 0.0296 | 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% | ||
Convertible Promissory Note [Member] | Period Two [Member] | Maximum [Member] | |||
Convertible Promissory Note [Abstract] | |||
Percentage of issuance cost on principal amount | 20% | ||
Aggregate outstanding principal amount | $ 30,000,000 |
CONVERTIBLE PROMISSORY NOTE A_4
CONVERTIBLE PROMISSORY NOTE AND WARRANT, Warrant (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) Warrant $ / shares shares | Jul. 20, 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 | $ 0 | |
Warrants issued during the year | 19,333,739 | |
Exercise of warrants | (18,549,865) | |
Fair value change recognized | 13,550,230 | |
Ending balance | $ 14,334,104 | |
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 | $ 0 | |
Warrants issued during the year | 1,358,336 | |
Exercise of warrants | 0 | |
Fair value change recognized | 2,098,068 | |
Ending balance | $ 3,456,404 | |
Expected Term [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 4.55 | 5 |
Volatility [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.7772 | 0.7585 |
Risk Free Rate [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.0413 | 0.0324 |
SHARE-BASED COMPENSATION, Share
SHARE-BASED COMPENSATION, Share Options (Details) | 12 Months Ended | |||||||||
May 03, 2022 USD ($) $ / shares shares | Dec. 30, 2021 shares | Apr. 17, 2018 Installment shares | Dec. 31, 2017 $ / shares shares | Aug. 01, 2017 $ / shares shares | May 31, 2016 $ / shares shares | Mar. 07, 2016 $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 10, 2016 shares | |
Share-Based Compensation [Abstract] | ||||||||||
Share-based compensation expenses | $ | $ 4,031,629 | $ 1,128,325 | ||||||||
Selling and Marketing Expenses [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Share-based compensation expenses | $ | 504,199 | 0 | ||||||||
Research and Development Expenses [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Share-based compensation expenses | $ | 284,805 | 152,694 | ||||||||
General and Administrative Expenses [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Share-based compensation expenses | $ | $ 3,242,625 | $ 975,631 | ||||||||
Amended 2016 Plan [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Options granted (in shares) | 12,891,130 | |||||||||
Exchange ratio | 0.71563 | |||||||||
Options converted (in shares) | 9,225,271 | |||||||||
Employees and Directors [Member] | 2016 Plan [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Shares authorized (in shares) | 24,624,157 | |||||||||
Number of additional shares available for issuance (in shares) | 10,484,797 | |||||||||
Number of equal annual instalments | Installment | 5 | |||||||||
Percentage of each equal annual instalments | 20% | |||||||||
Options granted (in shares) | 2,580,000 | 6,300,000 | 650,000 | 12,169,840 | ||||||
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 1.65 | $ 1.65 | $ 0.2 | $ 0.2 | ||||||
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 1.8792 | $ 1.8792 | $ 1.2092 | $ 1.2092 | ||||||
Employees and Directors [Member] | 2016 Plan [Member] | Minimum [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Options expiration period | 6 years | |||||||||
Options contractual term | 6 years | |||||||||
Employees and Directors [Member] | 2016 Plan [Member] | Maximum [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Shares authorized (in shares) | 14,139,360 | |||||||||
Options expiration period | 8 years | |||||||||
Options contractual term | 8 years | |||||||||
Employees and Directors [Member] | 2022 Plan [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Options granted (in shares) | 12,797,063 | |||||||||
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 1.68 | |||||||||
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 1.848 | |||||||||
Fair value of options granted | $ | $ 18,217,956 | |||||||||
Employees and Directors [Member] | 2022 Plan [Member] | Contractual Term of Option One [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Options granted (in shares) | 297,615 | |||||||||
Options contractual term | 5 years | |||||||||
Employees and Directors [Member] | 2022 Plan [Member] | Contractual Term of Option Two [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Options granted (in shares) | 12,499,448 | |||||||||
Options contractual term | 10 years | |||||||||
Employees and Directors [Member] | 2022 Plan [Member] | Minimum [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Fair value of option grant (in dollars per share) | $ / shares | $ 1.113 | |||||||||
Employees and Directors [Member] | 2022 Plan [Member] | Maximum [Member] | ||||||||||
Share-Based Compensation [Abstract] | ||||||||||
Shares authorized (in shares) | 25,965,234 | |||||||||
Fair value of option grant (in dollars per share) | $ / shares | $ 1.431 |
SHARE-BASED COMPENSATION, Sha_2
SHARE-BASED COMPENSATION, Share Options Activity (Details) - Stock Options [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 30, 2021 | |
Number of Share Options [Roll Forward] | ||||
Outstanding, beginning balance (in shares) | 9,225,271 | 18,976,130 | ||
Granted (in shares) | 12,797,063 | 0 | ||
Exercised (in shares) | (51,468) | 0 | ||
Forfeited (in shares) | (334,167) | (5,492,000) | ||
Expired (in shares) | (33,333) | (593,000) | ||
Outstanding, ending balance (in shares) | 21,603,366 | 9,225,271 | 18,976,130 | |
Modification of option (in shares) | 9,225,271 | |||
Expected to vest, period end (in shares) | 10,130,075 | |||
Exercisable, period end (in shares) | 11,473,291 | |||
Weighted Average Exercise Price [Abstract] | ||||
Outstanding, beginning balance (in dollars per share) | $ 1.1 | $ 0.98 | ||
Granted (in dollars per share) | 1.68 | 0 | ||
Exercised (in dollars per share) | 0.28 | 0 | ||
Forfeited (in dollars per share) | 1.68 | 1.42 | ||
Expired (in dollars per share) | 1.68 | 1.19 | ||
Outstanding, ending balance (in dollars per share) | 1.44 | $ 1.1 | $ 0.98 | |
Modification of option (in dollars per share) | $ 1.1 | |||
Expected to vest, period end (in dollars per share) | 1.71 | |||
Exercisable, period end (in dollars per share) | $ 1.2 | |||
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | ||||
Outstanding, weighted average remaining contractual term | 5 years 11 months 26 days | 2 years 7 months 6 days | 3 years 6 months 21 days | |
Expected to vest, weighted average remaining contractual term | 9 years 1 month 28 days | |||
Exercisable, weighted average remaining contractual term | 3 years 2 months 8 days | |||
Outstanding, aggregate intrinsic value | $ 721,210 | $ 42,799,081 | $ 24,410,306 | |
Expected to vest, aggregate intrinsic value | 0 | |||
Exercisable, aggregate intrinsic value | $ 721,210 |
SHARE-BASED COMPENSATION, Assum
SHARE-BASED COMPENSATION, Assumptions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unrecognized Compensation Cost [Abstract] | ||
Total unrecognized compensation cost | $ 15,043,377 | |
Unrecognized compensation cost, recognition period | 3 years 1 month 24 days | |
Stock Options [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected dividends yield | 0% | |
The fair value of underlying ordinary shares (in dollars per share) | $ 1.68 | |
Stock Options [Member] | Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected dividends yield | 0% | |
The fair value of underlying ordinary shares (in dollars per share) | $ 5.74 | |
Stock Options [Member] | Before Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected dividends yield | 0% | |
Stock Options [Member] | Minimum [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 86.28% | |
Risk-free interest rate per annum | 2.97% | |
Stock Options [Member] | Minimum [Member] | Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 58.09% | |
Risk-free interest rate per annum | 0.06% | |
Stock Options [Member] | Minimum [Member] | Before Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 82.33% | |
Risk-free interest rate per annum | 1.84% | |
The fair value of underlying ordinary shares (in dollars per share) | $ 1.21 | |
Stock Options [Member] | Maximum [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 83.96% | |
Risk-free interest rate per annum | 3.01% | |
Stock Options [Member] | Maximum [Member] | Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 91.85% | |
Risk-free interest rate per annum | 1.36% | |
Stock Options [Member] | Maximum [Member] | Before Modification [Member] | ||
Assumptions Used in Valuing Stock Options [Abstract] | ||
Expected volatility | 93.48% | |
Risk-free interest rate per annum | 2.40% | |
The fair value of underlying ordinary shares (in dollars per share) | $ 2.92 |
ORDINARY SHARES AND RESTRICTE_2
ORDINARY SHARES AND RESTRICTED NET ASSETS (Details) | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) Vote shares | Dec. 31, 2021 shares | Dec. 29, 2021 shares | Dec. 31, 2020 shares | ||
Ordinary Shares [Abstract] | |||||
Ordinary shares issued (in shares) | 300,841,995 | 261,256,254 | |||
Ordinary shares outstanding (in shares) | 300,841,995 | 261,256,254 | |||
Number of votes entitled for each share of ordinary share | Vote | 1 | ||||
Restricted Net Assets [Abstract] | |||||
Restricted net assets of PRC subsidiaries | $ | $ 581,314 | ||||
Ordinary Shares [Member] | |||||
Ordinary Shares [Abstract] | |||||
Ordinary shares outstanding (in shares) | [1] | 300,841,995 | 261,256,254 | 174,853,546 | |
Exercised (in shares) | [1] | (51,468) | |||
Exercise of warrants (in shares) | [1] | 39,534,273 | |||
2016 Plan [Member] | Ordinary Shares [Member] | |||||
Ordinary Shares [Abstract] | |||||
Exercised (in shares) | (51,468) | ||||
NBG [Member] | |||||
Ordinary Shares [Abstract] | |||||
Ordinary shares issued (in shares) | 86,402,708 | 86,402,708 | |||
Ordinary shares outstanding (in shares) | 86,402,708 | 86,402,708 | |||
CAG Cayman [Member] | CEGL [Member] | |||||
Ordinary Shares [Abstract] | |||||
Number of common stock shares issued in business consideration (in shares) | 174,853,546 | ||||
[1]The share numbers are retroactively stated to reflect the outstanding shares of CEGL issued in the Combination. |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Numerator [Abstract] | |||
Net loss attributable to the Company's shareholders | $ (110,088,241) | $ (16,421,807) | |
Denominator [Abstract] | |||
Weighted average ordinary shares used in computing basic loss per share (in shares) | [1] | 263,323,238 | 175,090,266 |
Weighted average ordinary shares used in computing diluted loss per share (in shares) | [1] | 263,323,238 | 175,090,266 |
Basic net loss per share (in dollars per share) | [1] | $ (0.42) | $ (0.09) |
Diluted net loss per share (in dollars per share) | [1] | $ (0.42) | $ (0.09) |
Ordinary shares of anti-dilutive and excluded from diluted net loss per share (in shares) | 0 | 0 | |
[1]The share numbers are retroactively stated for purposes of calculating weighted average number of shares outstanding for loss per share to reflect the outstanding shares of CEGL as if the equity structure of Cenntro (the accounting acquirer) was stated to reflect the number of shares of CEGL (the accounting acquiree) issued in the Combination. |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 8,941,835 | $ 8,576,832 | |
Accounts receivable | 2,526,432 | 3,523,543 | |
Accounts payable | 3,383,021 | 3,678,823 | |
Purchases | 9,455,805 | 7,073,391 | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 1,990,869 | $ 6,948,359 | |
Concentration risk, percentage | 15% | 81% | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 1,304,969 | $ 0 | |
Concentration risk, percentage | 15% | 0% | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 0 | $ 3,543,423 | |
Concentration risk, percentage | 0% | 41% | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 419,928 | $ 2,556,537 | |
Concentration risk, percentage | [1] | 30% | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Revenue | $ 265,972 | $ 848,399 | |
Concentration risk, percentage | [1] | 10% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 79% | 84% | |
Accounts receivable | $ 2,002,704 | $ 2,948,985 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 16% | 59% | |
Accounts receivable | $ 410,321 | $ 2,084,879 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 47% | 0% | |
Accounts receivable | $ 1,197,023 | $ 0 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 16% | 0% | |
Accounts receivable | $ 395,360 | $ 0 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer G [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 0% | 25% | |
Accounts receivable | $ 0 | $ 864,106 | |
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 38% | 21% | |
Purchases | $ 8,963,281 | $ 2,219,792 | |
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 26% | 21% | |
Purchases | $ 6,078,079 | $ 2,219,792 | |
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 12% | 0% | |
Purchases | $ 2,885,202 | $ 0 | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 29% | 0% | |
Accounts receivable | $ 997,721 | $ 0 | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 12% | 0% | |
Accounts receivable | $ 420,100 | $ 0 | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier C [Member] | |||
Concentration of Credit Risk [Abstract] | |||
Concentration risk, percentage | 17% | 0% | |
Accounts payable | $ 577,621 | $ 0 | |
[1]Indicates below 10%. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 12 Months Ended | |||||
Jul. 22, 2022 USD ($) Contract Complaint Claim | Mar. 25, 2022 USD ($) | Jul. 12, 2020 USD ($) | Oct. 31, 2021 USD ($) PurchaseOrder | Dec. 31, 2022 | Feb. 02, 2023 EUR (€) | Jun. 30, 2022 DistributionPartners | |
Litigation [Abstract] | |||||||
Total damages | $ 19,000,000 | ||||||
Number of complaint causes in contract and tort against defendants | Complaint | 11 | ||||||
Number of contract claims | Contract | 4 | ||||||
Number of tort claims | Claim | 7 | ||||||
Period to amend complaint by plaintiff | 30 days | ||||||
BELGIUM | Subsequent Event [Member] | |||||||
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 | Subsequent Event [Member] | Maximum [Member] | |||||||
Litigation [Abstract] | |||||||
Penalty amount | € | 500,000 | ||||||
CAE [Member] | |||||||
Litigation [Abstract] | |||||||
Number of distribution partners | DistributionPartners | 2 | ||||||
CAE [Member] | BELGIUM | Subsequent Event [Member] | Maximum [Member] | |||||||
Litigation [Abstract] | |||||||
Penalty amount | € | € 1,000,000 | ||||||
Magnum Agreement [Member] | |||||||
Litigation [Abstract] | |||||||
Alleged unpaid compensation expenses related to a breach of contract | $ 500,000 | ||||||
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, Rel
RELATED PARTY TRANSACTIONS, Related Parties (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Mr. Peter Wang [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Chairman, Chief Executive Officer, and principal shareholder of the Company |
Mr. Yeung Heung Yeung [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | A principal shareholder of the Company |
Bendon Limited [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Controlled by Mr. Justin Davis-Rice, a director of CEGL. As for the resignation of Mr. Justin Davis-Rice in 2022, it was not a related party as of December 31, 2022. |
Mr. Zhong Wei [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Chief Technology Officer of the Company |
Ms. Xu Cheng [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Immediate family of Mr. Chris Xiongjian Chen, former Chief Operating Officer of CAG Cayman |
CAG Cayman [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Mr. Peter Wang is a principal shareholder |
Devirra Corporation Limited and its Subsidiaries (Collectively referred to the "Devirra Group") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Entities controlled by CAG Cayman |
Cenntro Holding Limited [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Ultimately controlled by Mr. Peter Wang |
Zhejiang Zhongchai Machinery Co., Ltd ("Zhejiang Zhongchai") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Ultimately controlled by Mr. Peter Wang |
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 |
Zhuhai Hengzhong Industrial Investment Fund (Limited Partner) ("Zhuhai Hengzhong") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Mr. Peter Wang served as General Partner |
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, Tra
RELATED PARTY TRANSACTIONS, Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Zhejiang RAP [Member] | ||
Material Related Party Transactions [Abstract] | ||
Interest income from a related party | $ 13,434 | $ 23,114 |
Bendon Limited [Member] | ||
Material Related Party Transactions [Abstract] | ||
Interest income from a related party | 113,021 | 39,296 |
Jiangsu Rongyuan [Member] | ||
Material Related Party Transactions [Abstract] | ||
Purchase of raw materials from related parties | 0 | 24,799 |
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | ||
Material Related Party Transactions [Abstract] | ||
Purchase of raw materials from related parties | 1,413,262 | 1,219,621 |
Payment on the purchase of the raw materials | 1,015,036 | 2,027,483 |
Zhejiang Zhongchai [Member] | ||
Material Related Party Transactions [Abstract] | ||
Revenue from sales of equipment to a related party | 119,963 | 0 |
Repayment of the advance operating fund from a related party | 276,266 | 0 |
Shanghai Hengyu [Member] | ||
Material Related Party Transactions [Abstract] | ||
Consulting service provided by a related party | 5,053 | 29,919 |
Shenzhen Yuanzheng [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | 395,523 | 0 |
Mr. Yeung Heung Yeung [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | 1,331,091 | 0 |
Interest expense on loans provided by related parties | 2,532 | 132,000 |
Mr. Zhong Wei [Member] | ||
Material Related Party Transactions [Abstract] | ||
Interest expense on loans provided by related parties | 0 | 6,039 |
Others [Member] | ||
Material Related Party Transactions [Abstract] | ||
Interest expense on loans provided by related parties | $ 1,075 | $ 40,005 |
RELATED PARTY TRANSACTIONS, Due
RELATED PARTY TRANSACTIONS, Due from Related Parties (Details) | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 NZD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | ||
Amount due from Related Parties - Current [Abstract] | ||||||
Amounts due from related parties before provision for receivable | $ 366,936 | $ 1,399,545 | ||||
Less: provision for receivable from a related party | [1] | 0 | (166,911) | |||
Amounts due from related parties, net | 366,936 | 1,232,634 | ||||
Accounts receivable relating to the sale of industrial equipment | 678,887 | 348,773 | ||||
Amount due from Related Parties, Noncurrent [Abstract] | ||||||
Amounts due from related parties before provision for receivable | 0 | 4,834,973 | ||||
Less: provision for receivable from a related party | 0 | 0 | ||||
Amounts due from related parties -non-current | $ 0 | 4,834,973 | ||||
5 - Year Loan [Member] | ||||||
Amount due from Related Parties, Noncurrent [Abstract] | ||||||
Loan term | 5 years | |||||
Aggregate principal amount | $ 4,439,400 | $ 7,000,000 | ||||
Bearing interest rate | 2.50% | 2.50% | ||||
Maturity period | Aug. 31, 2026 | |||||
Hangzhou Hezhe [Member] | ||||||
Amount due from Related Parties - Current [Abstract] | ||||||
Amounts due from related parties before provision for receivable | [2] | $ 366,936 | 817,640 | |||
Zhejiang Zhongchai [Member] | ||||||
Amount due from Related Parties - Current [Abstract] | ||||||
Amounts due from related parties before provision for receivable | [3] | 0 | 412,797 | |||
Accounts receivable relating to the sale of industrial equipment | 340,770 | |||||
Advances to related party | 72,027 | |||||
Shanghai Hengyu [Member] | ||||||
Amount due from Related Parties - Current [Abstract] | ||||||
Amounts due from related parties before provision for receivable | 0 | 2,197 | ||||
Jiangsu Rongyuan [Member] | ||||||
Amount due from Related Parties - Current [Abstract] | ||||||
Amounts due from related parties before provision for receivable | [1] | 0 | 166,911 | |||
Provision for receivable from advances to related party | 0 | $ 227,807 | $ 206,187 | |||
Reversal of provision for receivable from related party | 78,931 | |||||
Bendon Limited [Member] | ||||||
Amount due from Related Parties, Noncurrent [Abstract] | ||||||
Amounts due from related parties before provision for receivable | [4] | $ 0 | $ 4,834,973 | |||
[1]The balances mainly represent advances to related parties for daily operational purposes. The business conditions of Jiangsu Rongyuan deteriorated and, as a result, the Company recognized provision for receivables of nil August 2026 |
RELATED PARTY TRANSACTIONS, D_2
RELATED PARTY TRANSACTIONS, Due to Related Parties (Details) | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 16, 2022 USD ($) | Dec. 16, 2022 EUR (€) | ||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | $ 716,372 | $ 15,756,028 | ||||
Reduction of capital investment | 0 | 13,930,000 | ||||
Payment for capital investments | 0 | 232,529 | ||||
CAG Cayman [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | [1] | 0 | 13,945,823 | |||
Operating funds | 15,823 | |||||
Reduction of capital investment | 13,930,000 | |||||
Mr. Yeung Heung Yeung [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | [2] | 0 | 1,328,559 | |||
Shenzhen Yuanzheng [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | [2] | 0 | $ 416,509 | |||
Weighted average annual interest rates | 17.31% | |||||
Antric GmbH [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | [3] | 666,396 | $ 0 | |||
Equity method investments, related party | $ 2,674,500 | € 2,500,000 | ||||
Percentage of equity interest acquired, related party | 25% | 25% | ||||
Payment for capital investments | 1,977,380 | € 1,868,750 | ||||
Zhejiang RAP [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | 23,882 | 40,034 | ||||
Jiangsu Rongyuan [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | 23,194 | 25,103 | ||||
Shanghai Hengyu [Member] | ||||||
Amounts due to Related Parties [Abstract] | ||||||
Amounts due to related parties | $ 2,900 | $ 0 | ||||
[1]CAG Cayman was the parent company of Cenntro before the closing of the Combination. The balance as of December 31, 2021represented (i) the interest-freeoperating funds from CAG Cayman of $15,823; and (ii) a reduction of capital from Cenntro by CAG Cayman of $13,930,000 prior to the closing of the Combination. It was fully repaid to CAG Cayman in 2022.[2]The balance represented the interest-bearing loan provided by related parties to the Company. The weighted average annual interest rates for the loans was 17.31% as of December 31, 2021.It was fully repaid in 2022.[3]The balance represented the capital injection payable to this related party. On December 16, 2022, the Company invested EUR 2,500,000 2,674,500 25 1,868,750 1,977,380 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | 3 Months Ended | 12 Months Ended | ||||||
Apr. 26, 2023 USD ($) | Apr. 01, 2023 USD ($) ft² | Jan. 31, 2023 USD ($) shares | Jan. 03, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Subsequent Event [Abstract] | ||||||||
Payment for purchase of electric commercial vehicle components | $ 3,285,072 | $ 756,269 | ||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Abstract] | ||||||||
Percentage of Equity Interests Sold | 35% | |||||||
Loan principal converted | $ 1,000,000 | |||||||
Shares in debt conversion (in shares) | shares | 571,930 | |||||||
Percentage of equity interest | 3.59% | |||||||
Contract amount | $ 17,592,052 | ¥ 121,335,900 | ||||||
Payment for purchase of electric commercial vehicle components | $ 3,883,598 | ¥ 26,785,950 | ||||||
Area of leased-out portion of industrial building | ft² | 64,000 | |||||||
Lease term | 5 years | |||||||
Monthly rent | $ 115,200 | |||||||
Subsequent Event [Member] | Industrial Building Facility [Member] | ||||||||
Subsequent Event [Abstract] | ||||||||
Area of leased-out portion of industrial building | ft² | 124,850 | |||||||
Subsequent Event [Member] | Investor [Member] | ||||||||
Subsequent Event [Abstract] | ||||||||
Redemption of convertible promissory notes | $ 6,000,000 | $ 39,583,321 |