Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Jul. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
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 | 604 | |
Local Phone Number | 428-7656 | |
Title of 12(b) Security | Ordinary Shares | |
Trading Symbol | CENN | |
Security Exchange Name | NASDAQ | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 304,449,091 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract] | ||
Net revenues | $ 3,470,544 | $ 1,830,633 |
Cost of goods sold | (3,275,800) | (1,467,603) |
Gross profit | 194,744 | 363,030 |
OPERATING EXPENSES: | ||
Selling and marketing expenses | (1,868,985) | (1,095,108) |
General and administrative expenses | (7,358,264) | (8,211,831) |
Research and development expenses | (1,569,919) | (425,359) |
Total operating expenses | (10,797,168) | (9,732,298) |
Loss from operations | (10,602,424) | (9,369,268) |
OTHER EXPENSE: | ||
Interest (expense) income, net | (54,415) | 64,201 |
Income from long-term investment | 19,042 | 5,937 |
Impairment of long-term investment | (1,146,128) | 0 |
Loss on redemption of convertible promissory notes | (2,001) | 0 |
Loss on exercise of warrants | (212,870) | 0 |
Change in fair value of convertible promissory notes and derivative liability | (126,273) | 0 |
Change in fair value of equity securities | 653,016 | 0 |
Other income (expense), net | 358,076 | (49,239) |
Loss before income taxes | (11,113,977) | (9,348,369) |
Income tax expense | 0 | 0 |
Net loss | (11,113,977) | (9,348,369) |
Less: net loss attributable to non-controlling interests | (156,028) | (36,719) |
Net loss attributable to the Company's shareholders | (10,957,949) | (9,311,650) |
OTHER COMPREHENSIVE LOSS | ||
Foreign currency translation adjustment | 337,278 | 253,156 |
Total comprehensive loss | (10,776,699) | (9,095,213) |
Less: total comprehensive loss attributable to non-controlling interests | (180,595) | (57,588) |
Total comprehensive loss to the Company's shareholders | $ (10,596,104) | $ (9,037,625) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 91,847,734 | $ 153,966,777 |
Restricted cash | 92,461 | 130,024 |
Accounts receivable, net | 2,732,834 | 565,398 |
Inventories | 36,546,917 | 31,843,371 |
Prepayment and other current assets | 15,596,764 | 16,138,330 |
Deferred cost- current | 20,026 | 0 |
Amounts due from related parties | $ 343,353 | $ 366,936 |
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Total current assets | $ 147,180,089 | $ 203,010,836 |
Non-current assets: | ||
Long-term investment, net | 5,239,512 | 5,325,741 |
Investment in equity securities | 30,412,211 | 29,759,195 |
Property, plant and equipment, net | 17,265,446 | 14,962,591 |
Intangible assets, net | 4,558,185 | 4,563,792 |
Right-of-use assets | 13,865,063 | 8,187,149 |
Deferred Costs, Noncurrent | 243,251 | 0 |
Other non-current assets, net | 2,306,597 | 2,039,012 |
Total non-current assets | 73,890,265 | 64,837,480 |
Total Assets | 221,070,354 | 267,848,316 |
Current liabilities: | ||
Accounts payable | 2,899,119 | 3,383,021 |
Accrued expenses and other current liabilities | 3,668,415 | 5,048,641 |
Contractual liabilities | 2,656,151 | 2,388,480 |
Operating lease liabilities, current | 2,779,279 | 1,313,334 |
Convertible promissory notes | 17,903,274 | 57,372,827 |
Deferred government grant, current | 56,009 | 26,533 |
Amounts due to related parties | $ 46,900 | $ 716,372 |
Other Liability, Current, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Total current liabilities | $ 30,009,147 | $ 70,249,208 |
Non-current liabilities: | ||
Deferred government grant, non-current | 1,036,172 | 497,484 |
Derivative liability - investor warrant | 12,392,632 | 14,334,104 |
Derivative liability - placement agent warrant | 3,457,067 | 3,456,404 |
Operating lease liabilities, non-current | 11,640,499 | 7,421,582 |
Total non-current liabilities | 28,526,370 | 25,709,574 |
Total Liabilities | 58,535,517 | 95,958,782 |
Commitments and contingencies | ||
EQUITY | ||
Ordinary shares (No par value; 304,449,091 and 300,841,995 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively) | 0 | 0 |
Additional paid in capital | 398,262,089 | 397,497,817 |
Accumulated deficit | (230,782,125) | (219,824,176) |
Accumulated other comprehensive loss | (4,945,127) | (5,306,972) |
Total equity attributable to shareholders | 162,534,837 | 172,366,669 |
Non-controlling interests | 0 | (477,135) |
Total Equity | 162,534,837 | 171,889,534 |
Total Liabilities and Equity | $ 221,070,354 | $ 267,848,316 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
EQUITY | ||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 |
Ordinary shares, shares issued (in shares) | 304,449,091 | 300,841,995 |
Ordinary shares, shares outstanding (in shares) | 304,449,091 | 300,841,995 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net cash used in operating activities | $ (17,363,332) | $ (23,486,438) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equity investment | (622,917) | 0 |
Purchase of plant and equipment | (2,577,292) | (82,799) |
Purchase of land use right and property | (268,993) | 0 |
Acquisition of CAE's equity interests | (1,924,557) | (2,843,003) |
Proceeds from disposal of property, plant and equipment | 0 | 327 |
Loans provided to third parties | (100,000) | (1,047,053) |
Net cash used in investing activities | (5,493,759) | (3,972,528) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of loans to related parties | 0 | (1,750,367) |
Repayment of loans to third parties | 0 | (421,222) |
Purchase of CAE's loan | 0 | (13,228,101) |
Reduction of capital | 0 | (13,930,000) |
Redemption of convertible promissory notes | (39,583,321) | 0 |
Payment of expense for the reverse recapitalization | 0 | (904,843) |
Net cash used in financing activities | (39,583,321) | (30,234,533) |
Effect of exchange rate changes on cash | 283,806 | 97,755 |
Net decrease in cash, cash equivalents and restricted cash | (62,156,606) | (57,595,744) |
Cash, cash equivalents and restricted cash at beginning of period | 154,096,801 | 261,664,962 |
Cash, cash equivalents and restricted cash at end of period | 91,940,195 | 204,069,218 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | 0 | 377,717 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cashless exercise of warrants | $ 2,168,185 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Ordinary Shares [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total Shareholders' Equity [Member] | Non-controlling Interest [Member] | Total |
Beginning balance at Dec. 31, 2021 | $ 0 | $ 374,901,939 | $ (109,735,935) | $ (1,392,699) | $ 263,773,305 | $ 0 | $ 263,773,305 |
Beginning balance (in shares) at Dec. 31, 2021 | 261,256,254 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | $ 0 | 199,416 | 0 | 0 | 199,416 | 0 | 199,416 |
Net loss | 0 | 0 | (9,311,650) | 0 | (9,311,650) | (36,719) | (9,348,369) |
Acquisition of CAE's equity interests | 0 | 0 | 0 | 0 | 0 | 1,555,320 | 1,555,320 |
Foreign currency translation adjustment | 0 | 0 | 0 | 274,025 | 274,025 | (20,869) | 253,156 |
Ending balance at Mar. 31, 2022 | $ 0 | 375,101,355 | (119,047,585) | (1,118,674) | 254,935,096 | 1,497,732 | 256,432,828 |
Ending balance (in shares) at Mar. 31, 2022 | 261,256,254 | ||||||
Beginning balance at Dec. 31, 2022 | $ 0 | 397,497,817 | (219,824,176) | (5,306,972) | 172,366,669 | (477,135) | $ 171,889,534 |
Beginning balance (in shares) at Dec. 31, 2022 | 300,841,995 | 300,841,995 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | $ 0 | 1,153,808 | 0 | 0 | 1,153,808 | 0 | $ 1,153,808 |
Net loss | 0 | 0 | (10,957,949) | 0 | (10,957,949) | (156,028) | (11,113,977) |
Acquisition of CAE's equity interests | 0 | (2,557,721) | 0 | 0 | (2,557,721) | 657,730 | (1,899,991) |
Exercise of warrants | $ 0 | 2,168,185 | 0 | 0 | 2,168,185 | 0 | 2,168,185 |
Exercise of warrants (in shares) | 3,607,096 | ||||||
Foreign currency translation adjustment | $ 0 | 0 | 0 | 361,845 | 361,845 | (24,567) | 337,278 |
Ending balance at Mar. 31, 2023 | $ 0 | $ 398,262,089 | $ (230,782,125) | $ (4,945,127) | $ 162,534,837 | $ 0 | $ 162,534,837 |
Ending balance (in shares) at Mar. 31, 2023 | 304,449,091 | 304,449,091 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) | Mar. 31, 2023 | Mar. 31, 2022 |
Cenntro Automotive Europe GmbH [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Acquisition CAE's equity interests | 35% | 65% |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 3 Months Ended |
Mar. 31, 2023 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES Historical and principal activities Cenntro Automotive Group Limited (“CAG Cayman”) was formed in the Cayman Islands on August 22, 2014. CAG Cayman was the former parent of Cenntro (as defined below), prior to the closing of the Combination (as defined below). Cenntro Automotive Corporation (“CAC”) was incorporated in the state of Delaware on March 22, 2013. CAC became CAG Cayman’s wholly owned company on May 26, 2016. Cenntro Automotive Group Limited (“CAG HK”) was established by CAG Cayman on February 15, 2016 in Hong Kong. CAG HK is a non-operating, investment holding company, which conducts business through its subsidiaries in mainland China and Hong Kong. Cenntro Electric Group, Inc. (“CEG”) was incorporated in the state of Delaware by CAG Cayman on March 9, 2020. Cenntro Electric Group Limited ACN 619 054 938, formerly known as Naked Brand Group Limited (“NBG”), was incorporated in Australia on May 11, 2017, and is the parent company of Cenntro. NBG changed its name to Cenntro Electric Group Limited (“CEGL”) on December 30, 2021, in connection with the closing of the Combination. CAC, CEG and CAG HK and its consolidated subsidiaries are collectively known as “Cenntro”; CEGL and Cenntro are collectively known as the “Company”. The Company designs and manufactures purpose–built, electric commercial vehicles (“ECVs”) used primarily in last mile delivery and industrial applications. On March 25, 2022 and January 31, 2023, the Company entered into Share Purchase Agreements to acquire 65% and 35% of the issued and outstanding shares in Cenntro Automotive Europe GmbH (“CAE”), formerly known as Tropos Motors Europe GmbH. For information of the Share Purchase Agreements, see Note 3 of this Annual Report, “Business Combination”. Reverse recapitalization On December 30, 2021, the Company consummated a stock purchase transaction (the “Combination”) pursuant to that certain stock purchase agreement, dated as of November 5, 2021 (the “Acquisition Agreement”) by and among CEGL (at the time, NBG), CAG Cayman, CAC, CEG and CAG HK, whereby CEGL purchased from CAG Cayman (i) all of the issued and outstanding ordinary shares of CAG HK, (ii) all of the issued and outstanding shares of common stock, par value $0.001 per share, of CAC, and (iii) all of the issued and outstanding shares of common stock, par value $0.01 per share, of CEG, in exchange for an aggregate purchase price of (i) 174,853,546 newly issuing ordinary shares of CEGL and (ii) the assumption of options to purchase an aggregate of 9,225,271 ordinary shares under the Cenntro Electric Group Limited Amended & Restated 2016 Incentive Stock Option Plan (the “Amended 2016 Plan”). The Combination closed on December 30, 2021. Immediately prior to the consummation of the Combination, there were 86,402,708 ordinary shares of NBG issued and outstanding. In connection with the closing of the Combination, CEGL changed its name from “Naked Brand Group Limited” to “Cenntro Electric Group Limited”. Promptly following the closing of the Combination, CAG Cayman distributed the Acquisition Shares to the holders of its capital stock in accordance with (i) the distribution described in the Acquisition Agreement and (ii) CAG Cayman’s Third Amended and Restated Memorandum and Articles of Association. Pursuant to the Acquisition Agreement, at the closing of the Combination, NBG assumed the Amended 2016 Plan and each CAG Cayman employee stock option outstanding immediately prior to the closing of the Combination under the Amended 2016 Plan was converted into an option to purchase a number of ordinary shares equal to the aggregate number of CAG Cayman shares for which such stock option was exercisable immediately prior to the closing of the Combination multiplied by the exchange ratio of 0.71536 (the “Exchange Ratio”), as determined in accordance with the Acquisition Agreement, at an option exercise price equal to the exercise price per share of such stock option immediately prior to the closing of the Combination divided by the Exchange Ratio. Cenntro was deemed to be the accounting acquirer given Cenntro effectively controlled the consolidated entity after the Combination. Under U.S. generally accepted accounting principles, the Combination is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by Cenntro for the net monetary assets of CEGL, accompanied by a recapitalization. Cenntro is deemed to be the predecessor for accounting purposes and the historical financial statements of Cenntro became CEGL’s historical financial statements, with retrospective adjustments to give effect to the reverse recapitalization. The financial statements for periods prior to the consummation of the reverse recapitalization are the combined financial statements of CAC, CEG and CAG HK and its consolidated subsidiaries. As of March 31, 2023, CEGL’s subsidiaries are as follows: 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 Cenntro Automotive S.A.S. January 16, 2023 Galapa, Colombia 100% owned by CEGL Cenntro Electric Colombia S.A.S. March 29, 2023 Atlántico, Colombia 100% owned by CEGL Cenntro Elektromobilite Araçlar A.Ş February 21, 2023 Turkey 100% owned by CEGL Teemak Power Corporation January 31, 2023 Delaware, U.S. 100% owned by CEGL Avantier Motors Corporation November 27, 2017 Delaware, U.S. 100% owned by CEGL Avantier Motors (Hong Kong) Limited March 13, 2023 Hong Kong 100% owned by CEGL * Zhejiang Xbean Tech Co., Limited was in the liquidation process as of March 31, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be read in conjunction with the financial statements and the notes for the fiscal year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year or any future periods. (b) Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include provision for doubtful accounts, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. (c) Revenue recognition The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles. Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Revenue is recognized net of return allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities. Significant judgement is required to estimate return allowances. The Company reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses. The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Vehicles sales $ 2,840,963 $ 1,718,371 Spare-parts sales 598,036 101,424 Other service income 31,545 10,838 Net revenues $ 3,470,544 $ 1,830,633 The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location. For the Three Months Ended March 31, 2023 2022 Primary geographical markets Europe $ 3,061,998 $ 617,601 Asia 276,500 795,549 America 32,046 417,483 Total $ 3,470,544 $ 1,830,633 Contract Balances Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment. Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the three months ended March 31, 2023 and 2022, the Company recognized $98,818 and $723,278 revenue that was included in contractual liabilities as of December 31, 2022 and 2021, respectively. The following table provides information about receivables and contractual liabilities from contracts with customers: March 31, 2023 December 31, 2022 Accounts receivable, net $ 2,732,834 $ 565,398 Contractual liabilities $ 2,656,151 $ 2,388,480 (d) Recently issued accounting standards pronouncement Except for the ASUs (“Accounting Standards Updates”) issued but not yet adopted disclosed in “Note 2 (z) Recent Accounting Standards” of the Company 2022 Form 10-K, there is no ASU issued by the FASB that is expected to have a material impact on the Company’s consolidated results of operations or financial position. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 3 Months Ended |
Mar. 31, 2023 | |
BUSINESS COMBINATION [Abstract] | |
BUSINESS COMBINATION | NOTE 3 – BUSINESS COMBINATION On March 5, 2022, the Company entered into a Share and Loan Purchase Agreement (the “Purchase Agreement I”) with Mosolf SE & Co. KG, a limited liability partnership incorporated under the laws of Germany (“Seller” or “Mosolf” and, together with CEGL and CEG, the “Parties”), pursuant to which Mosolf agreed to sell to the Company (i) 65% of the issued and outstanding shares (the “TME Shares”) in Cenntro Automotive Europe GmbH, previously known as Tropos Motors Europe GmbH, a German limited liability company (“CAE”), and (ii) 100% of the shareholder loan (the “Shareholder Loan”) which Mosolf previously provided to CAE (the “CAE Transaction”). CAE was one of Cenntro’s private label channel partners and has been one of Cenntro’s largest customers since 2019. The CAE Transaction closed on March 25, 2022. At closing of the CAE Transaction, the Company paid Mosolf EUR3,250,000 (or approximately USD$3.6 million) for the purchase of the TME Shares and EUR11,900,000 (or approximately USD$13.0 million) for the purchase of the Shareholder Loan, for total aggregate consideration of EUR15,150,000 (or approximately USD$16.6 million). An aggregate of EUR3,000,000 (or approximately USD$3.3 million) of the purchase price is held in escrow to satisfy amounts payable to any of the buyer indemnified parties in accordance with the terms of the Purchase Agreement I. The transaction constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805. The Company is deemed to be the accounting acquirer and the assets and liabilities of CAE are recorded at the fair value as of the date of the closing. On December 13, 2022, the Company entered into another Share Purchase Agreement (the “Purchase Agreement II”) with Mosolf, pursuant to which Mosolf agreed to sell to the Company its remaining 35% of the issued and outstanding shares in CAE in exchange for a purchase price of EUR1,750,000 (or approximately USD$1.86 million) (the “Transaction”). The Transaction was closed on January 31, 2023, as a result, CAE became a wholly-owned subsidiary of the Company. This transaction was accounted for as equity transactions, no gain or loss was recognized in consolidated statement of operations. The difference between the fair value of the consideration paid and the amount by which the noncontrolling interest was adjusted was recognized in equity attributable to the Company. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 4 - ACCOUNTS RECEIVABLE, NET Accounts receivable, net is summarized as follows: March 31, 2023 December 31, 2022 Accounts receivable $ 4,686,735 $ 2,526,432 Less: provision for doubtful accounts (1,953,901 ) (1,961,034 ) Accounts receivable, net $ 2,732,834 $ 565,398 The changes in the provision for doubtful accounts are as follows: For the Three Months Ended March 31, 2023 2022 Balance at the beginning of the period $ 1,961,034 $ 1,475,983 Additions - - Write-off (11,402 ) - Foreign exchange 4,269 6,362 Balance at the end of the year $ 1,953,901 $ 1,482,345 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES [Abstract] | |
INVENTORIES | NOTE 5 - INVENTORIES Inventories are summarized as follows: March 31, 2023 December 31, 2022 Raw material $ 8,102,206 $ 9,311,419 Work-in-progress 578,233 290,220 Goods in transit 3,073,933 2,364,136 Finished goods 24,792,545 19,877,596 Inventories $ 36,546,917 $ 31,843,371 |
PREPAYMENT AND OTHER CURRENT AS
PREPAYMENT AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 December 31, 2022 Advance to suppliers $ 9,708,922 $ 9,877,337 Deductible input value added tax 4,376,571 4,097,162 Receivable from third parties 681,813 678,887 Loans to a third party 100,000 1,044,181 Others 729,458 440,763 Prepayment and other current assets $ 15,596,764 $ 16,138,330 |
LONG-TERM INVESTMENT, NET
LONG-TERM INVESTMENT, NET | 3 Months Ended |
Mar. 31, 2023 | |
LONG-TERM INVESTMENT, NET [Abstract] | |
LONG-TERM INVESTMENT, NET | NOTE 7 – LONG-TERM INVESTMENT, NET Equity method investments, net The Company had the following equity method investments: March 31, 2023 December 31, 2022 Antric GmbH (1) $ 1,556,672 $ 2,674,500 Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2) 2,199,016 2,189,570 Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3) 391,088 367,272 Able 2rent GmbH (DEU) (4) 92,736 94,399 Total $ 4,239,512 $ 5,325,741 (1) On December 16, 2022, the Company invested EUR2,500,000 (approximately $2,718,000) in Antric GmbH Antric GmbH (2) On September 25, 2022, the Company invested RMB15,400,000 (approximately $2,242,414) in Entropy Yu to acquire 99.355% of the partnership entity’s equity interest. The Company accounts for the investment under the equity method because the Company controls 50% of voting interests in partnership matters and material matters must be agreed upon by all partners. The Company has the ability to exercise significant influence over Entropy Yu . (3) On June 23, 2021, the Company invested RMB2,000,000 (approximately $291,223 in Hangzhou Hezhe to acquire 20% of its equity interest. The Company accounts for the investment under the equity method because the Company controls 33% of voting interests in board of directors, and has the ability to exercise significant influence over Hangzhou Hezhe. (4) On March 22, 2022, CAE invested EUR100,000 (approximately $108,720 in Able 2rent GmbH (DEU) to acquire 50% of its equity interest. The Company accounts for the investment under the equity method because it does not have control over Able 2rent GmbH (DEU) as the Company does not participate in its operation and does not serve as member of board of director. Equity investment without readily determinable fair value The Company had the following equity investment without readily determinable fair value: March 31, 2023 December 31, 2022 HW Electro Co., Ltd. (1) 1,000,000 - Total $ 1,000,000 $ - (1) On January 31, 2023, the Company entered into a convertible debt agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 into 571,930 shares of HW Electro Co., Ltd.’s for a total of 3.59% of its equity interest. |
INVESTMENT IN EQUITY SECURITIES
INVESTMENT IN EQUITY SECURITIES | 3 Months Ended |
Mar. 31, 2023 | |
INVESTMENT IN EQUITY SECURITIES [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | NOTE 8 – INVESTMENT IN EQUITY SECURITIES As of March 31, 2023, the balance consisted of the following two equity investments: March 31, 2023 December 31, 2022 MineOne Fix Income Investment I L.P $ 25,275,956 $ 25,019,244 Micro Money Fund SPC 5,136,255 4,739,951 Total $ 30,412,211 $ 29,759,195 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 9 –PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: March 31, 2023 December 31, 2022 At cost: Plant and building (1) $ 11,502,851 $ 11,453,436 Machinery and equipment 3,248,410 2,413,087 Leasehold improvement 4,442,928 2,956,515 Office equipment 1,366,669 1,192,443 Motor vehicles 422,682 352,972 Total 20,983,540 18,368,453 Less: accumulated depreciation (3,718,094 ) (3,405,862 ) Construction in progress 132,808 - Property, plant and equipment, net $ 17,265,446 $ 14,962,591 Depreciation expenses for the three months ended March 31, 2023 and 2022 were $305,262 and $137,104, respectively. Impairment loss for the three months ended March 31, 2023 and 2022 were $24,369 and nil |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES Australia CEGL is subject to a tax rate of 30%. United States U.S. subsidiaries CEG, Cennatic Power Inc. and CAC are subject to a federal tax rate of 21%. Germany CAE and Cenntro Electric is subject to a tax rate of 30%. Hong Kong In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. Effective from April 1, 2018, a two-tier corporate income tax system was officially implemented in Hong Kong, which is 8.25% for the first HK$2.0 million profits, and 16.5% for the subsequent profits, it is exempted from the Hong Kong income tax on its foreign-derived income. CEG’s subsidiaries, CAG HK and Sinomachinery HK, are registered in Hong Kong as intermediate holding companies, subject to an income tax rate of 16.5% for taxable income earned in Hong Kong. Payments of dividends from Hong Kong subsidiaries to CEG are not subject to any Hong Kong withholding tax. PRC Pursuant to the tax laws and regulations of the PRC, the Company’s applicable enterprise income tax (“EIT”) rate is 25%. Zhejiang Tooniu Tech Co., Ltd, Hangzhou Hengzhong Tech Co., Ltd and. Zhejiang Xbean Tech Co., Ltd qualify as Small and micro enterprises in the PRC, and are entitled to pay a reduced income tax rate of 2.5%, 2.5% and 5% in 2022 and 2023. Income tax expenses for the three months ended March 31, 2023 and 2022 are nil The components of losses before income taxes are summarized as follows: For the Three Months Ended March 31, 2023 2022 PRC $ (1,778,180 ) (1,712,432 ) US (3,554,955 ) (3,122,402 ) Europe (2,904,320 ) (44,753 ) Australia (2,606,972 ) (4,468,782 ) Others (269,550 ) - Total $ (11,113,977 ) (9,348,369 ) |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
LEASES [Abstract] | |
LEASES | NOTE 11 - LEASES The Company leases offices space under non-cancellable operating leases. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. A summary of lease cost recognized in the Company’s consolidated statements of operations and comprehensive loss is as follows: For the Three Months Ended March 31, 2023 2022 Operating leases cost excluding short-term rental expense $ 671,313 $ 238,569 Short-term lease cost 268,721 58,096 Total $ 940,034 $ 296,665 A summary of supplemental information related to operating leases is as follows: March 31, 2023 March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities $ 671,109 $ 112,669 Weighted average remaining lease term 7.26 years 1.78 years Weighted average discount rate 5.41 % 4.08 % The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and an amount equal to the lease payments in a similar economic environment. The following table summarizes the maturity of lease liabilities under operating leases as of March 31, 2023: Operating Leases For the remaining of 2023 $ 2,156,895 Years ended December 31, 2024 2,845,452 2025 2,068,015 2026 2,126,623 2027 2,191,533 2028 6,171,223 Total lease payments 17,559,741 Less: imputed interest 3,139,963 Total 14,419,778 Less: current portion 2,779,279 Non-current portion $ 11,640,499 |
CONVERTIBLE PROMISSORY NOTE AND
CONVERTIBLE PROMISSORY NOTE AND WARRANT | 3 Months Ended |
Mar. 31, 2023 | |
CONVERTIBLE PROMISSORY NOTE AND WARRANT [Abstract] | |
CONVERTIBLE PROMISSORY NOTE AND WARRANT | NOTE 12 - CONVERTIBLE PROMISSORY NOTE AND WARRANT Convertible Promissory Note On July 20, 2022, the Company issued to investors convertible promissory note (“Note”) in the aggregate principal amount of $61,215,000 due on July 19, 2023, unless earlier repurchased, converted or redeemed. The Note bears interest at a rate of 8% per annum, and the net proceed after deducting issuance expenses was $54,069,000. The main terms of the Note are summarized as follows: Conversion feature At any time after the issue date until the Note is no longer outstanding, this Note shall be convertible, in whole or in part, into ordinary shares at the option of the holder, at any time and from time to time. Redemption feature If the Company shall carry out one or more subsequent financings in excess of US$25,000,000 in gross proceeds, the holder shall have the right to (i) require the Company to first use up to 10% of the gross proceeds of such subsequent financing if the aggregate outstanding principal amount of the Note is in excess of US$30,000,000 and (ii) require the Company to first use up to 20% of the gross proceeds of such subsequent financing if the outstanding principal amount of the Note is US$30,000,000 or less to redeem all or a portion of this Note for an amount in cash equal to the Mandatory Redemption Amount equal to 1.08 multiplied by the sum of principal amount subject to the mandatory redemption, plus accrued but unpaid interest, plus liquidated damages, if any, and any other amounts. In addition, if the closing price of the ordinary shares on the principal trading market is below the floor price of $1.00 per share for a period of ten consecutive trading days, the holder shall have the right to require the Company to redeem the sum of principal amount plus accrued but unpaid interest under the Note. Contingent interest feature The Note is subject to certain customary events of default. If any event of default occurs, the outstanding principal amount, plus accrued but unpaid interest, liquidated damages and other amounts owing, shall become immediately due and payable, and at the holder’s election, in cash at the mandatory default amount or in ordinary shares at the mandatory default amount at a conversion price equal to 85% of the 10-day volume weighted average price. Commencing 5 days after the occurrence of any event of default, the interest shall accrue at an interest rate equal to the lesser of 10% per annum or the maximum rate permitted under applicable law. The financial liability was initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The remaining estimated fair value adjustment is presented as other expense in the consolidated statement of operations, change in fair value of convertible notes. The movement of Note during the three months ended March 31, 2023 are as follows: Liability component As of December 31, 2022 $ 57,372,827 Convertible promissory notes issued during the year - Redemption of convertible promissory notes (39,581,320 ) Fair value change recognized 111,767 As of March 31 2023 17,903,274 The estimated fair value of the Note upon issuance date December 31, 2022 and as of March 31, 2023 was computed using a Monte Carlo Simulation Model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement. The unobservable inputs utilized for measuring the fair value of the Note reflects our assumptions about the assumptions that market participants would use in valuing the Note as of the issuance date and subsequent reporting period. We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model: Fair Value Assumptions Convertible Promissory Note March 31, 2023 December 31, 2022 Face value principal payable 17,904,179 57,488,000 Original conversion price 1.2375 1.2375 Interest Rate 8.00 % 8.00 % Expected term (years) 0.30 0.55 Volatility 61.54 % 75.13 % Market yield (range) 25.12 % 18.02 % Risk free rate 4.48 % 4.69 % 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 statement of operations. The movement of warrants during the three months ended March 31, 2023 are as follows: Investor warrants component Placement agent warrants component As of December 31, 2022 $ 14,334,104 $ 3,456,404 Warrants issued during the year - - Exercise of warrants (1,955,315 ) - Fair value change recognized 13,843 663 As of March 31 2023 12,392,632 3,457,067 The fair value for these two warrants were computed using the Binomial model with the following assumptions: Fair Value Assumptions Warrants March 31, 2023 December 31, 2022 Expected term (years) 4.30 4.55 Volatility 75.99 % 77.72 % Risk free rate 3.61 % 4.13 % |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2023 | |
CONCENTRATIONS [Abstract] | |
CONCENTRATIONS | NOTE 13- CONCENTRATIONS (a) Customers The following table sets forth information as to each customer that accounted for 10% or more of net revenue for the three months ended March 31, 2023 and 2022. Three months ended Three months ended March 31, 2023, March 31, 2022, Customer Amount % of Total Amount % of Total A 339,874 10 % - - B 100,211 * 291,780 16 % C - - 550,954 30 % D - - 415,558 23 % Total $ 440,085 10 % $ 1,450,937 69 % * 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 March 31, 2023 and December 31, 2022. As of March 31, 2023, As of December 31, 2022, Customer Amount % of Total Amount % of Total C $ 397,064 * $ 395,360 16 % E 392,094 * 410,321 16 % F 1,216,491 26 % 1,197,023 47 % G 941,745 20 % 12,338 * Total $ 1,730,903 46 % $ 2,015,042 79 % * Indicates below 10%. (b) Suppliers For the three months ended March 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows: Three months ended March 31, 2023, Three months ended March 31, 2022, Supplier Amount % of Total Amount % of Total A $ 4,844,671 56 % $ - - B 1,938 * 2,975,299 50 % Total $ 4,846,609 56 % $ 2,975,299 50 % * Indicates below 10%. The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of March 31, 2023 and December 31, 2022. As of March 31, 2023, As of December 31, 2022, Supplier Amount % of Total Amount % of Total B $ 422,191 14 % $ 420,100 12 % C 692,528 24 % 577,621 17 % Total $ 1,114,719 38 % $ 997,721 29 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - COMMITMENTS AND CONTINGENCIES Litigation The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. In October 2021, Sevic Systems SE (“Sevic”), a former channel partner, commenced a lawsuit against Shengzhou Machinery, one of Cenntro’s wholly owned subsidiaries, relating to a contract for the sale of goods (the “Sevic Lawsuit”). Sevic filed its complaint with the People’s Court of Keqiao District, Shaoxing City, Light Textile City (the “People’s Court”). In the Sevic Lawsuit, Sevic alleges that the Shengzhou Machinery provided it with certain unmarketable goods and requests that the People’s Court (i) terminate two signed purchase orders under its contract with Shengzhou Machinery and (ii) award Sevic money damages for the cost of goods of $465,400, as well as interest and incidental losses, including freight and storage costs, for total damages of approximately $628,109.The Company does not believe that Sevic’s claims have any merit and intends to vigorously defend against such claims. On March 25, 2022, Shengzhou Hengzhong Machinery Co., Ltd. (“Shengzhou”), an affiliate of Cenntro Automotive Corporation, filed a demand for arbitration against Tropos Technologies, Inc., an unrelated entity, with the American Arbitration Association (“AAA”), asserting claims for breach of contract and unjust enrichment. Shengzhou is seeking payment of $1,126,640 (exclusive of interest, costs, and attorneys’ fees) for outstanding invoices owed by Tropos Technologies, Inc. to Shengzhou. As of the date of, Tropos Technologies, Inc. has not yet formally responded to the demand. On February 16, 2023, AAA appointed an arbitrator and both parties are waiting for further proceedings under the arbitration process. On April 25, 2023, Tropos Technologies, Inc. filed a motion to dismiss the arbitration demand. On May 23, 2023, Shengzhou filed a response in opposition to the motion to dismiss the arbitration demand. As of the date of this report, the parties are awaiting further proceedings under the arbitration process. In June 2022, Sevic Systems SE (“Sevic”) filed for injunctive relief in a corporate court in Brussels, Belgium, alleging CAE infringement of Sevic’s intellectual property (“IP”) rights. The injunctive action was also directed against LEIE Center SRL (“LEIE”) and Cedar Europe GmbH (“Cedar”), two distribution partners of CAE. There, Sevic claims it acquired all IP rights to an electric vehicle, the so-called CITELEC model (“CITELEC”), fully and exclusively from the French company SH2M Sarl (“SH2M”) under Mr. Pierre Millet. Sevic claims these rights were acquired under a 2019 IP transfer agreement. According to Sevic, the METRO model (“METRO”) produced by Cenntro Electro Group Ltd. (“Cenntro”) and distributed by CAE derives directly from the CITELEC. The distribution of the METRO was alleged to infringe on Sevic’s IP rights. In its action, Sevic relies on (Belgian) copyright law and unfair business practices. On February 2, 2023, the president of the commercial court of Brussels rendered a judgment, declaring i) the claim against Cedar was inadmissible and ii) The main claim against CAE and LEIE was founded. According to the president’s opinion the CITELEC-model can enjoy copyright protection and determined it was sufficiently proven that Sevic acquired the copyrights of the CITELEC-model. The president then concluded that the distribution of the METRO-model in Belgium constituted a violation of article XI. 165 §1 of the Belgian Code of Economic Law and thereby ordered the cessation of the distribution of the METRO-model, a penalty in the form of a fine of EUR20,000.00 per sold vehicle in Belgium and EUR5,000.00 for each other infringement in Belgium after the judgement was served with a maximum fine of EUR500,000.00 for LEIE and EUR1,000,000.00 fine for CAE. Because CAE has not sold any METRO-models in Belgium, the Company believes the judgement is incorrect and intends to appeal it, however, the Company has accrued the related liability according to the judgement made. On July 22, 2022, Xiongjian Chen (the “Plaintiff”) filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey. The complaint alleges eleven causes of action sounding in contract and tort against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG. With respect to the four contract claims, Plaintiff alleges breach of contract claims pertaining to an employment agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL. With respect to the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion. The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL. On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN. On May 28, 2023, Plaintiff filed an amended complaint. On July 20, 2023 the Defendants filed a motion seeking the dismissal of that amended complaint. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 - RELATED PARTY TRANSACTIONS The table below sets forth the major related parties and their relationships with the Company: Name of related parties: Relationship with the Company Mr. Yeung Heung Yeung A principal shareholder of the Company 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 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 three months ended March 31, 2023 and 2022, the Company had the following material related party transactions. For the three months ended March 31, 2023 2022 Purchase of raw materials from related parties Hangzhou Hezhe Energy Technology Co., Ltd $ 79,773 $ 480,672 Payment on the purchase of the raw materials Hangzhou Hezhe 54,516 497,194 Repayment interest-bearing Loan from a related party Shenzhen Yuanzheng - 419,276 Mr. Yeung Heung Yeung - 209,693 Amounts due from Related Parties The following table presents amounts due from related parties as of March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Hangzhou Hezhe (1) $ 343,353 $ 366,936 Total $ 343,353 $ 366,936 (1) The balance mainly represents the prepayment for raw material to the related party. Amounts due to Related Parties The following table presents amounts due to related parties as of March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Zhejiang RAP $ 20,694 $ 23,882 Jiangsu Rongyuan 23,294 23,194 Shanghai Hengyu 2,912 2,900 Antric GmbH - 666,396 Total $ 46,900 $ 716,372 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT | NOTE 16 - SUBSEQUENT EVENT On April 26, 2023, $6,000,000 of convertible promissory notes were redeemed by the investors. On April 20, 2023, Zhejiang Cenntro Machinery Co., Ltd. has entered an agreement with Changxing County Bureau of Natural Resources and Planning to purchase its land use right, with an area of 12,206 square meters with a useful life of 50 years and the total consideration of RMB1,530,000 (approximately $222,626). CAC has entered into a lease agreement with BAL Freeway Associates, LLC, a California limited liability company, for its approximate 64,000 square foot portion of a larger 124,850 square foot industrial building located within the Rancon Centre Ontario. The lease term is for five years, starting from April 1, 2023, and ending on March 31, 2028. The monthly rent is $115,200. CAC has entered into a lease agreement with Sabatino Abogados S.A.S. for its 2,469.27 square meters warehouse located in Columbia. The lease term starts from May 1, 2023 and ends on April 30, 2025. The monthly rent is COP39,324,371 (approximately $9,602). On June 21, 2022, CAC entered an agreement with Sabatino Abogados S.A.S to acquire lots No. 59, 60, 61 and 62 in Free Trade Zone Zofia, with total area of 7,931.44 square meters and total consideration of COP 4,362,292,000 (approximately $1,063,271). On April 27, 2023, the public deeds of purchase of lots No. 59, 60, 61 and 62 located in the Zofia Free Trade Zone were signed. On June 23 and June 28, 2023, the certificates of Lot 59 and Lot 61 were registered. Zhejiang Cenntro Machinery Co., Ltd. signed a series of contracts with Huzhou Linhai Construction Co., Ltd. of renovation of its factory, with the total contracts amount of RMB16,132,000 (approximately $2,349,001). Subsequently through the date of issuance of the condensed consolidated financial statements, RMB14,093,080 (approximately $2,052,111) has been paid to the constructor. The Company has evaluated subsequent events through the date of issuance of the condensed consolidated financial statements, except for the events mentioned above, there were no other subsequent events with material financial impact on the condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures made are adequate to provide a fair presentation. The interim financial information should be read in conjunction with the financial statements and the notes for the fiscal year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year or any future periods. |
Use of estimates | (b) Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include provision for doubtful accounts, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. |
Revenue recognition | (c) Revenue recognition The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles. Revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Revenue is recognized net of return allowance and any taxes collected from customers, which are subsequently remitted to governmental authorities. Significant judgement is required to estimate return allowances. The Company reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses. The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Vehicles sales $ 2,840,963 $ 1,718,371 Spare-parts sales 598,036 101,424 Other service income 31,545 10,838 Net revenues $ 3,470,544 $ 1,830,633 The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location. For the Three Months Ended March 31, 2023 2022 Primary geographical markets Europe $ 3,061,998 $ 617,601 Asia 276,500 795,549 America 32,046 417,483 Total $ 3,470,544 $ 1,830,633 Contract Balances Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment. Contractual liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the three months ended March 31, 2023 and 2022, the Company recognized $98,818 and $723,278 revenue that was included in contractual liabilities as of December 31, 2022 and 2021, respectively. The following table provides information about receivables and contractual liabilities from contracts with customers: March 31, 2023 December 31, 2022 Accounts receivable, net $ 2,732,834 $ 565,398 Contractual liabilities $ 2,656,151 $ 2,388,480 |
Recently issued accounting standards pronouncements | (d) Recently issued accounting standards pronouncement Except for the ASUs (“Accounting Standards Updates”) issued but not yet adopted disclosed in “Note 2 (z) Recent Accounting Standards” of the Company 2022 Form 10-K, there is no ASU issued by the FASB that is expected to have a material impact on the Company’s consolidated results of operations or financial position. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES [Abstract] | |
Significant Subsidiaries of Company | As of March 31, 2023, 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 Cenntro Automotive S.A.S. January 16, 2023 Galapa, Colombia 100% owned by CEGL Cenntro Electric Colombia S.A.S. March 29, 2023 Atlántico, Colombia 100% owned by CEGL Cenntro Elektromobilite Araçlar A.Ş February 21, 2023 Turkey 100% owned by CEGL Teemak Power Corporation January 31, 2023 Delaware, U.S. 100% owned by CEGL Avantier Motors Corporation November 27, 2017 Delaware, U.S. 100% owned by CEGL Avantier Motors (Hong Kong) Limited March 13, 2023 Hong Kong 100% owned by CEGL * Zhejiang Xbean Tech Co., Limited was in the liquidation process as of March 31, 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s revenues by product line for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Vehicles sales $ 2,840,963 $ 1,718,371 Spare-parts sales 598,036 101,424 Other service income 31,545 10,838 Net revenues $ 3,470,544 $ 1,830,633 The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location. For the Three Months Ended March 31, 2023 2022 Primary geographical markets Europe $ 3,061,998 $ 617,601 Asia 276,500 795,549 America 32,046 417,483 Total $ 3,470,544 $ 1,830,633 |
Receivables and Contractual Liabilities from Contracts with Customers | The following table provides information about receivables and contractual liabilities from contracts with customers: March 31, 2023 December 31, 2022 Accounts receivable, net $ 2,732,834 $ 565,398 Contractual liabilities $ 2,656,151 $ 2,388,480 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS RECEIVABLE, NET [Abstract] | |
Accounts Receivable | Accounts receivable, net is summarized as follows: March 31, 2023 December 31, 2022 Accounts receivable $ 4,686,735 $ 2,526,432 Less: provision for doubtful accounts (1,953,901 ) (1,961,034 ) Accounts receivable, net $ 2,732,834 $ 565,398 The changes in the provision for doubtful accounts are as follows: For the Three Months Ended March 31, 2023 2022 Balance at the beginning of the period $ 1,961,034 $ 1,475,983 Additions - - Write-off (11,402 ) - Foreign exchange 4,269 6,362 Balance at the end of the year $ 1,953,901 $ 1,482,345 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are summarized as follows: March 31, 2023 December 31, 2022 Raw material $ 8,102,206 $ 9,311,419 Work-in-progress 578,233 290,220 Goods in transit 3,073,933 2,364,136 Finished goods 24,792,545 19,877,596 Inventories $ 36,546,917 $ 31,843,371 |
PREPAYMENT AND OTHER CURRENT _2
PREPAYMENT AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | |
Prepayment and Other Current Assets | Prepayment and other current assets consisted of the following: March 31, 2023 December 31, 2022 Advance to suppliers $ 9,708,922 $ 9,877,337 Deductible input value added tax 4,376,571 4,097,162 Receivable from third parties 681,813 678,887 Loans to a third party 100,000 1,044,181 Others 729,458 440,763 Prepayment and other current assets $ 15,596,764 $ 16,138,330 |
LONG-TERM INVESTMENT, NET (Tabl
LONG-TERM INVESTMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
LONG-TERM INVESTMENT, NET [Abstract] | |
Equity Method Investment | The Company had the following equity method investments: March 31, 2023 December 31, 2022 Antric GmbH (1) $ 1,556,672 $ 2,674,500 Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) (2) 2,199,016 2,189,570 Hangzhou Hezhe Energy Technology Co., Ltd. (“Hangzhou Hezhe”) (3) 391,088 367,272 Able 2rent GmbH (DEU) (4) 92,736 94,399 Total $ 4,239,512 $ 5,325,741 (1) On December 16, 2022, the Company invested EUR2,500,000 (approximately $2,718,000) in Antric GmbH Antric GmbH (2) On September 25, 2022, the Company invested RMB15,400,000 (approximately $2,242,414) in Entropy Yu to acquire 99.355% of the partnership entity’s equity interest. The Company accounts for the investment under the equity method because the Company controls 50% of voting interests in partnership matters and material matters must be agreed upon by all partners. The Company has the ability to exercise significant influence over Entropy Yu . (3) On June 23, 2021, the Company invested RMB2,000,000 (approximately $291,223 in Hangzhou Hezhe to acquire 20% of its equity interest. The Company accounts for the investment under the equity method because the Company controls 33% of voting interests in board of directors, and has the ability to exercise significant influence over Hangzhou Hezhe. (4) On March 22, 2022, CAE invested EUR100,000 (approximately $108,720 in Able 2rent GmbH (DEU) to acquire 50% of its equity interest. The Company accounts for the investment under the equity method because it does not have control over Able 2rent GmbH (DEU) as the Company does not participate in its operation and does not serve as member of board of director. |
Equity Investment without Readily Determinable Fair Value | The Company had the following equity investment without readily determinable fair value: March 31, 2023 December 31, 2022 HW Electro Co., Ltd. (1) 1,000,000 - Total $ 1,000,000 $ - (1) On January 31, 2023, the Company entered into a convertible debt agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 into 571,930 shares of HW Electro Co., Ltd.’s for a total of 3.59% of its equity interest. |
INVESTMENT IN EQUITY SECURITI_2
INVESTMENT IN EQUITY SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INVESTMENT IN EQUITY SECURITIES [Abstract] | |
Investments in Equity Securities | As of March 31, 2023, the balance consisted of the following two equity investments: March 31, 2023 December 31, 2022 MineOne Fix Income Investment I L.P $ 25,275,956 $ 25,019,244 Micro Money Fund SPC 5,136,255 4,739,951 Total $ 30,412,211 $ 29,759,195 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | |
Property, Plant and Equipment, Net | Property, plant and equipment, net consisted of the following: March 31, 2023 December 31, 2022 At cost: Plant and building (1) $ 11,502,851 $ 11,453,436 Machinery and equipment 3,248,410 2,413,087 Leasehold improvement 4,442,928 2,956,515 Office equipment 1,366,669 1,192,443 Motor vehicles 422,682 352,972 Total 20,983,540 18,368,453 Less: accumulated depreciation (3,718,094 ) (3,405,862 ) Construction in progress 132,808 - Property, plant and equipment, net $ 17,265,446 $ 14,962,591 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INCOME TAXES [Abstract] | |
Components of Losses Before Income Taxes | The components of losses before income taxes are summarized as follows: For the Three Months Ended March 31, 2023 2022 PRC $ (1,778,180 ) (1,712,432 ) US (3,554,955 ) (3,122,402 ) Europe (2,904,320 ) (44,753 ) Australia (2,606,972 ) (4,468,782 ) Others (269,550 ) - Total $ (11,113,977 ) (9,348,369 ) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
LEASES [Abstract] | |
Summary of Lease Cost | A summary of lease cost recognized in the Company’s consolidated statements of operations and comprehensive loss is as follows: For the Three Months Ended March 31, 2023 2022 Operating leases cost excluding short-term rental expense $ 671,313 $ 238,569 Short-term lease cost 268,721 58,096 Total $ 940,034 $ 296,665 |
Summary of Supplemental Information Related to Operating Leases | A summary of supplemental information related to operating leases is as follows: March 31, 2023 March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities $ 671,109 $ 112,669 Weighted average remaining lease term 7.26 years 1.78 years Weighted average discount rate 5.41 % 4.08 % |
Summary of Maturity of Lease Liabilities Under Operating Leases | The following table summarizes the maturity of lease liabilities under operating leases as of March 31, 2023: Operating Leases For the remaining of 2023 $ 2,156,895 Years ended December 31, 2024 2,845,452 2025 2,068,015 2026 2,126,623 2027 2,191,533 2028 6,171,223 Total lease payments 17,559,741 Less: imputed interest 3,139,963 Total 14,419,778 Less: current portion 2,779,279 Non-current portion $ 11,640,499 |
CONVERTIBLE PROMISSORY NOTE A_2
CONVERTIBLE PROMISSORY NOTE AND WARRANT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Short-Term Debt [Line Items] | |
Movement of Note | The movement of Note during the three months ended March 31, 2023 are as follows: Liability component As of December 31, 2022 $ 57,372,827 Convertible promissory notes issued during the year - Redemption of convertible promissory notes (39,581,320 ) Fair value change recognized 111,767 As of March 31 2023 17,903,274 |
Movement of Warrants | The movement of warrants during the three months ended March 31, 2023 are as follows: Investor warrants component Placement agent warrants component As of December 31, 2022 $ 14,334,104 $ 3,456,404 Warrants issued during the year - - Exercise of warrants (1,955,315 ) - Fair value change recognized 13,843 663 As of March 31 2023 12,392,632 3,457,067 |
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 March 31, 2023 December 31, 2022 Expected term (years) 4.30 4.55 Volatility 75.99 % 77.72 % Risk free rate 3.61 % 4.13 % |
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 March 31, 2023 December 31, 2022 Face value principal payable 17,904,179 57,488,000 Original conversion price 1.2375 1.2375 Interest Rate 8.00 % 8.00 % Expected term (years) 0.30 0.55 Volatility 61.54 % 75.13 % Market yield (range) 25.12 % 18.02 % Risk free rate 4.48 % 4.69 % Issue date July 20, 2022 July 20, 2022 Maturity date July 19, 2023 July 19, 2023 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 three months ended March 31, 2023 and 2022. Three months ended Three months ended March 31, 2023, March 31, 2022, Customer Amount % of Total Amount % of Total A 339,874 10 % - - B 100,211 * 291,780 16 % C - - 550,954 30 % D - - 415,558 23 % Total $ 440,085 10 % $ 1,450,937 69 % * 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 March 31, 2023 and December 31, 2022. As of March 31, 2023, As of December 31, 2022, Customer Amount % of Total Amount % of Total C $ 397,064 * $ 395,360 16 % E 392,094 * 410,321 16 % F 1,216,491 26 % 1,197,023 47 % G 941,745 20 % 12,338 * Total $ 1,730,903 46 % $ 2,015,042 79 % * Indicates below 10%. (b) Suppliers For the three months ended March 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows: Three months ended March 31, 2023, Three months ended March 31, 2022, Supplier Amount % of Total Amount % of Total A $ 4,844,671 56 % $ - - B 1,938 * 2,975,299 50 % Total $ 4,846,609 56 % $ 2,975,299 50 % * Indicates below 10%. The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of March 31, 2023 and December 31, 2022. As of March 31, 2023, As of December 31, 2022, Supplier Amount % of Total Amount % of Total B $ 422,191 14 % $ 420,100 12 % C 692,528 24 % 577,621 17 % Total $ 1,114,719 38 % $ 997,721 29 % |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Related Party Transactions and Balances | The table below sets forth the major related parties and their relationships with the Company: Name of related parties: Relationship with the Company Mr. Yeung Heung Yeung A principal shareholder of the Company 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 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 three months ended March 31, 2023 and 2022, the Company had the following material related party transactions. For the three months ended March 31, 2023 2022 Purchase of raw materials from related parties Hangzhou Hezhe Energy Technology Co., Ltd $ 79,773 $ 480,672 Payment on the purchase of the raw materials Hangzhou Hezhe 54,516 497,194 Repayment interest-bearing Loan from a related party Shenzhen Yuanzheng - 419,276 Mr. Yeung Heung Yeung - 209,693 Amounts due from Related Parties The following table presents amounts due from related parties as of March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Hangzhou Hezhe (1) $ 343,353 $ 366,936 Total $ 343,353 $ 366,936 (1) The balance mainly represents the prepayment for raw material to the related party. Amounts due to Related Parties The following table presents amounts due to related parties as of March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Zhejiang RAP $ 20,694 $ 23,882 Jiangsu Rongyuan 23,294 23,194 Shanghai Hengyu 2,912 2,900 Antric GmbH - 666,396 Total $ 46,900 $ 716,372 |
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) | 3 Months Ended | |
Mar. 31, 2023 $ / shares shares | Dec. 31, 2022 shares | |
Reverse Recapitalization [Abstract] | ||
Shares issued (in shares) | 174,853,546 | |
Ordinary shares issued (in shares) | 304,449,091 | 300,841,995 |
Ordinary shares outstanding (in shares) | 304,449,091 | 300,841,995 |
Amended 2016 Plan [Member] | ||
Reverse Recapitalization [Abstract] | ||
Ordinary shares, option to purchase (in shares) | 9,225,271 | |
Exchange ratio | 0.71536 | |
CAC [Member] | ||
Reverse Recapitalization [Abstract] | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
CEG [Member] | ||
Reverse Recapitalization [Abstract] | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |
NBG [Member] | ||
Reverse Recapitalization [Abstract] | ||
Ordinary shares issued (in shares) | 86,402,708 | |
Ordinary shares outstanding (in shares) | 86,402,708 |
ORGANIZATION AND PRINCIPAL AC_5
ORGANIZATION AND PRINCIPAL ACTIVITIES, Subsidiaries Combination (Details) | 3 Months Ended | |
Mar. 31, 2023 | ||
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] |
Cenntro Automotive S.A.S. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jan. 16, 2023 | |
Place of Incorporation | Galapa, Colombia | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Electric Colombia S.A.S. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Mar. 29, 2023 | |
Place of Incorporation | Atlántico, Colombia | |
Percentage of direct or indirect economic interest | 100% | |
Cenntro Elektromobilite Araclar A.S [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Feb. 21, 2023 | |
Place of Incorporation | Turkey | |
Percentage of direct or indirect economic interest | 100% | |
Teemak Power Corporation [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Jan. 31, 2023 | |
Place of Incorporation | Delaware, U.S. | |
Percentage of direct or indirect economic interest | 100% | |
Avantier Motors Corporation [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Nov. 27, 2017 | |
Place of Incorporation | Delaware, U.S. | |
Percentage of direct or indirect economic interest | 100% | |
Avantier Motors (Hong Kong) Limited [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Date of Incorporation | Mar. 13, 2023 | |
Place of Incorporation | Hong Kong | |
Percentage of direct or indirect economic interest | 100% | |
[1]Zhejiang Xbean Tech Co., Limited was in the liquidation process as of March 31, 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregated Revenue Information [Abstract] | |||
Revenue | $ 3,470,544 | $ 1,830,633 | |
Contract with Customer, Liability, Revenue Recognized | 98,818 | 723,278 | |
Receivables and Contractual Liabilities from Contracts with Customers [Abstract] | |||
Accounts receivable, net | 2,732,834 | $ 565,398 | |
Contractual liabilities | 2,656,151 | $ 2,388,480 | |
Europe [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 3,061,998 | 617,601 | |
Asia [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 276,500 | 795,549 | |
America [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 32,046 | 417,483 | |
Vehicles Sales [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 2,840,963 | 1,718,371 | |
Spare-Parts Sales [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | 598,036 | 101,424 | |
Other Service Income [Member] | |||
Disaggregated Revenue Information [Abstract] | |||
Revenue | $ 31,545 | $ 10,838 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - Mosolf SE & Co [Member] $ in Thousands | Dec. 13, 2022 EUR (€) | Dec. 13, 2022 USD ($) | Mar. 25, 2022 EUR (€) | Mar. 25, 2022 USD ($) | Mar. 05, 2022 |
Acquisition [Abstract] | |||||
Purchase consideration of stock acquired | € 1,750,000 | $ 1,860 | |||
Tropos Motors Europe GmbH [Member] | |||||
Acquisition [Abstract] | |||||
Percentage of issued and outstanding shares acquired | 35% | 35% | 65% | ||
Purchase consideration of stock acquired | € 3,250,000 | $ 3,600 | |||
Consideration of acquisition | 15,150,000 | 16,600 | |||
Shareholder Loan [Member] | |||||
Acquisition [Abstract] | |||||
Percentage of shareholder loan acquired | 100% | ||||
Purchase consideration of stock acquired | 11,900,000 | 13,000 | |||
Purchase price is held in escrow account | € 3,000,000 | $ 3,300 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounts Receivable [Abstract] | |||
Accounts receivable | $ 4,686,735 | $ 2,526,432 | |
Less: provision for doubtful accounts | (1,953,901) | (1,961,034) | |
Accounts receivable, net | 2,732,834 | $ 565,398 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,961,034 | $ 1,475,983 | |
Additions | 0 | 0 | |
Write-off | (11,402) | 0 | |
Foreign exchange | 4,269 | 6,362 | |
Balance at the end of the period | $ 1,953,901 | $ 1,482,345 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
INVENTORIES [Abstract] | ||
Raw material | $ 8,102,206 | $ 9,311,419 |
Work-in-progress | 578,233 | 290,220 |
Goods in transit | 3,073,933 | 2,364,136 |
Finished goods | 24,792,545 | 19,877,596 |
Inventories | $ 36,546,917 | $ 31,843,371 |
PREPAYMENT AND OTHER CURRENT _3
PREPAYMENT AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
PREPAYMENT AND OTHER CURRENT ASSETS [Abstract] | ||
Advance to suppliers | $ 9,708,922 | $ 9,877,337 |
Deductible input value added tax | 4,376,571 | 4,097,162 |
Receivable from third parties | 681,813 | 678,887 |
Loans to a third party | 100,000 | 1,044,181 |
Others | 729,458 | 440,763 |
Prepayment and other current assets | $ 15,596,764 | $ 16,138,330 |
LONG-TERM INVESTMENT, NET, Equi
LONG-TERM INVESTMENT, NET, Equity Method Investments, Net (Details) | 3 Months Ended | ||||||||||||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 16, 2022 USD ($) | Dec. 16, 2022 EUR (€) | Sep. 25, 2022 USD ($) | Sep. 25, 2022 CNY (¥) | Mar. 22, 2022 USD ($) | Mar. 22, 2022 EUR (€) | Jun. 23, 2021 USD ($) | Jun. 23, 2021 CNY (¥) | |||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | $ 4,239,512 | $ 5,325,741 | |||||||||||
Impairment on investment | 1,146,128 | $ 0 | |||||||||||
Antric GmbH [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 1,556,672 | [1] | 2,674,500 | [1] | $ 2,718,000 | € 2,500,000 | |||||||
Percentage of ownership interest, equity method investment | 25% | 25% | |||||||||||
Impairment on investment | 1,146,128 | ||||||||||||
Percentage of voting interests | 25% | 25% | |||||||||||
Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 2,199,016 | [2] | 2,189,570 | [2] | $ 2,242,414 | ¥ 15,400,000 | |||||||
Percentage of ownership interest, equity method investment | 99.355% | 99.355% | |||||||||||
Percentage of voting interests | 50% | 50% | |||||||||||
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | 391,088 | [3] | 367,272 | [3] | $ 291,223 | ¥ 2,000,000 | |||||||
Percentage of ownership interest, equity method investment | 20% | 20% | |||||||||||
Percentage of voting interests | 33% | 33% | |||||||||||
Able 2rent GmbH [Member] | |||||||||||||
Equity Method Investment [Abstract] | |||||||||||||
Equity method investment | $ 92,736 | [4] | $ 94,399 | [4] | $ 108,720 | € 100,000 | |||||||
Percentage of ownership interest, equity method investment | 50% | 50% | |||||||||||
[1]On December 16, 2022, the Company invested EUR2,500,000 (approximately $2,718,000) in Antric GmbH Antric GmbH |
LONG-TERM INVESTMENT, NET, Eq_2
LONG-TERM INVESTMENT, NET, Equity Investment Without Readily Determinable Fair Value (Details) - USD ($) | Jan. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Equity Investment without Readily Determinable Fair Value [Abstract] | ||||
Equity investment without readily determinable fair value | $ 1,000,000 | $ 0 | ||
Loan principal converted | $ 1,000,000 | |||
Shares in debt conversion (in shares) | 571,930 | |||
Percentage of equity interest | 3.59% | |||
HW Electro Co., Ltd. [Member] | ||||
Equity Investment without Readily Determinable Fair Value [Abstract] | ||||
Equity investment without readily determinable fair value | [1] | $ 1,000,000 | $ 0 | |
[1]On January 31, 2023, the Company entered into a convertible debt agreement with HW Electro Co., Ltd., to convert the loan principal of $1,000,000 into 571,930 shares of HW Electro Co., Ltd.’s for a total of 3.59% of its equity interest. |
INVESTMENT IN EQUITY SECURITI_3
INVESTMENT IN EQUITY SECURITIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Investment Income, Net [Abstract] | ||
Investment in equity securities | $ 30,412,211 | $ 29,759,195 |
Investment on Partnership Shares [Member] | ||
Investment Income, Net [Abstract] | ||
Investment in equity securities | 25,275,956 | 25,019,244 |
Investment on Participating Shares [Member] | ||
Investment Income, Net [Abstract] | ||
Investment in equity securities | $ 5,136,255 | $ 4,739,951 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
At Cost [Abstract] | |||
Property, plant and equipment, gross | $ 20,983,540 | $ 18,368,453 | |
Less: accumulated depreciation | (3,718,094) | (3,405,862) | |
Construction in progress | 132,808 | 0 | |
Property, plant and equipment, net | 17,265,446 | 14,962,591 | |
Depreciation expenses | 305,262 | $ 137,104 | |
Impairment loss | (24,369) | $ 0 | |
Plant and Building [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 11,502,851 | 11,453,436 | |
Machinery and Equipment [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 3,248,410 | 2,413,087 | |
Leasehold Improvement [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 4,442,928 | 2,956,515 | |
Office Equipment [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | 1,366,669 | 1,192,443 | |
Motor Vehicles [Member] | |||
At Cost [Abstract] | |||
Property, plant and equipment, gross | $ 422,682 | $ 352,972 |
INCOME TAXES, Federal Tax Rate
INCOME TAXES, Federal Tax Rate (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Zhejiang Tooniu Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 2.50% |
Hangzhou Hengzhong Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 2.50% |
Zhejiang Xbean Tech Co., Limited [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 5% |
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% |
Germany [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 30% |
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$2.0 million | 16.50% |
PRC [Member] | |
Federal Statutory Income Tax Rate [Abstract] | |
Federal tax rate | 25% |
INCOME TAXES, Components of Los
INCOME TAXES, Components of Losses Before Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
INCOME TAXES [Abstract] | ||
Income tax expenses | $ 0 | $ 0 |
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (11,113,977) | (9,348,369) |
PRC [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (1,778,180) | (1,712,432) |
US [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (3,554,955) | (3,122,402) |
Europe [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (2,904,320) | (44,753) |
Australia [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | (2,606,972) | (4,468,782) |
Others [Member] | ||
Components of Losses Before Income Taxes [Abstract] | ||
Losses before income taxes | $ (269,550) | $ 0 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Lease Cost [Abstract] | |||
Operating leases cost excluding short-term rental expense | $ 671,313 | $ 238,569 | |
Short-term lease cost | 268,721 | 58,096 | |
Total | 940,034 | 296,665 | |
Supplemental Information Related to Operating Leases [Abstract] | |||
Cash paid for amounts included in the measurement of lease liabilities | $ 671,109 | $ 112,669 | |
Weighted average remaining lease term | 7 years 3 months 3 days | 1 year 9 months 10 days | |
Weighted average discount rate | 5.41% | 4.08% | |
Maturity of Lease Liabilities [Abstract] | |||
For the remaining of 2023 | $ 2,156,895 | ||
2024 | 2,845,452 | ||
2025 | 2,068,015 | ||
2026 | 2,126,623 | ||
2027 | 2,191,533 | ||
2028 and thereafter | 6,171,223 | ||
Total lease payments | 17,559,741 | ||
Less: imputed interest | 3,139,963 | ||
Total | 14,419,778 | ||
Less: current portion | $ 2,779,279 | $ 1,313,334 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Less: current portion | ||
Non-current portion | $ 11,640,499 | $ 7,421,582 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Non-current portion |
CONVERTIBLE PROMISSORY NOTE A_3
CONVERTIBLE PROMISSORY NOTE AND WARRANT, Convertible Promissory Note (Details) | 3 Months Ended | |||
Jul. 20, 2022 USD ($) | Mar. 31, 2023 USD ($) TradingDays $ / shares | Mar. 31, 2022 | Dec. 31, 2022 USD ($) | |
Movement of Note [Abstract] | ||||
Convertible promissory notes, Beginning Balance | $ 57,372,827 | |||
Convertible promissory notes, Ending Balance | $ 17,903,274 | |||
Convertible Promissory Note [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Net proceeds after deducting issuance expenses | $ 54,069,000 | |||
Mandatory redemption amount multiplier | 1.08 | |||
Number of consecutive trading days | TradingDays | 10 | |||
Conversion price percentage | 85% | |||
Period for volume weighted average price | 10 days | |||
Period considered after occurrence of any event of default | 5 days | |||
Movement of Note [Abstract] | ||||
Convertible promissory notes, Beginning Balance | $ 57,372,827 | |||
Convertible promissory notes issued during the year | 0 | |||
Redemption of convertible promissory notes | (39,581,320) | |||
Fair value change recognized | 111,767 | |||
Convertible promissory notes, Ending Balance | 17,903,274 | |||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Face value principal payable | $ 61,215,000 | $ 17,904,179 | $ 57,488,000 | |
Interest rate | 8% | 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 | 0.3 | 0.55 | ||
Convertible Promissory Note [Member] | Volatility [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.6154 | 0.7513 | ||
Convertible Promissory Note [Member] | Market yield [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.2512 | 0.1802 | ||
Convertible Promissory Note [Member] | Risk Free Rate [Member] | ||||
Fair Value Assumptions - Convertible Promissory Note [Abstract] | ||||
Measurement input | 0.0448 | 0.0469 | ||
Convertible Promissory Note [Member] | Period One [Member] | Minimum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Aggregate outstanding principal amount | $ 30,000,000 | |||
Convertible Promissory Note [Member] | Period One [Member] | Maximum [Member] | ||||
Convertible Promissory Note [Abstract] | ||||
Percentage of issuance cost on principal amount | 10% | |||
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) | 3 Months Ended | |
Mar. 31, 2023 USD ($) Warrant $ / shares shares | Dec. 31, 2022 | |
Warrant [Abstract] | ||
Issued warrants (in shares) | shares | 24,733,336 | |
Exercise price (in dollars per share) | $ / shares | $ 1.61 | |
Warrants exercisable issuance term | 5 years | |
Number of warrants | Warrant | 2 | |
Investor Warrants [Member] | ||
Movement of Warrants [Roll Forward] | ||
Beginning balance | $ 14,334,104 | |
Warrants issued during the year | 0 | |
Exercise of warrants | (1,955,315) | |
Fair value change recognized | 13,843 | |
Ending balance | $ 12,392,632 | |
Placement Agent Warrants [Member] | ||
Warrant [Abstract] | ||
Issued warrants (in shares) | shares | 2,473,334 | |
Exercise price (in dollars per share) | $ / shares | $ 1.77 | |
Movement of Warrants [Roll Forward] | ||
Beginning balance | $ 3,456,404 | |
Warrants issued during the year | 0 | |
Exercise of warrants | 0 | |
Fair value change recognized | 663 | |
Ending balance | $ 3,457,067 | |
Expected Term [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 4.3 | 4.55 |
Volatility [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.7599 | 0.7772 |
Risk Free Rate [Member] | Warrant [Member] | ||
Fair Value Assumptions - Warrants [Abstract] | ||
Measurement input | 0.0361 | 0.0413 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 3,470,544 | $ 1,830,633 | |||
Accounts receivable | 4,686,735 | $ 2,526,432 | |||
Purchases | 3,275,800 | 1,467,603 | |||
Accounts payable | 2,899,119 | $ 3,383,021 | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 440,085 | $ 1,450,937 | |||
Concentration risk, percentage | 10% | 69% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 339,874 | $ 0 | |||
Concentration risk, percentage | 10% | 0% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 100,211 | $ 291,780 | |||
Concentration risk, percentage | [1] | 16% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 0 | $ 550,954 | |||
Concentration risk, percentage | 0% | 30% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Revenue | $ 0 | $ 415,558 | |||
Concentration risk, percentage | 0% | 23% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 46% | 79% | |||
Accounts receivable | $ 1,730,903 | $ 2,015,042 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | [1] | 16% | |||
Accounts receivable | $ 397,064 | $ 395,360 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | [1] | 16% | |||
Accounts receivable | $ 392,094 | $ 410,321 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 26% | 47% | |||
Accounts receivable | $ 1,216,491 | $ 1,197,023 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer G [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 20% | [1] | |||
Accounts receivable | $ 941,745 | $ 12,338 | |||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 56% | 50% | |||
Purchases | $ 4,846,609 | $ 2,975,299 | |||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier A [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 56% | 0% | |||
Purchases | $ 4,844,671 | $ 0 | |||
Purchases [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | [1] | 50% | |||
Purchases | $ 1,938 | $ 2,975,299 | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 38% | 29% | |||
Accounts receivable | $ 1,114,719 | $ 997,721 | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier B [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 14% | 12% | |||
Accounts receivable | $ 422,191 | $ 420,100 | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier C [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Concentration risk, percentage | 24% | 17% | |||
Accounts payable | $ 692,528 | $ 577,621 | |||
[1]Indicates below 10%. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | ||||
Jul. 22, 2022 USD ($) | Mar. 25, 2022 USD ($) | Oct. 31, 2021 USD ($) PurchaseOrder | Feb. 02, 2023 EUR (€) | Jun. 30, 2022 DistributionPartners | |
Litigation [Abstract] | |||||
Total damages | $ | $ 19,000,000 | ||||
BELGIUM | |||||
Litigation [Abstract] | |||||
Penalty amount | € | € 20,000 | ||||
Other infringement fine | € | 5,000 | ||||
Shengzhou [Member] | |||||
Litigation [Abstract] | |||||
Payment for outstanding invoices | $ | $ 1,126,640 | ||||
LEIE [Member] | BELGIUM | Maximum [Member] | |||||
Litigation [Abstract] | |||||
Penalty amount | € | 500,000 | ||||
CAE [Member] | |||||
Litigation [Abstract] | |||||
Number of distribution partners | DistributionPartners | 2 | ||||
CAE [Member] | BELGIUM | Maximum [Member] | |||||
Litigation [Abstract] | |||||
Penalty amount | € | € 1,000,000 | ||||
Sevic Lawsuit [Member] | Damages from Product Defects [Member] | |||||
Litigation [Abstract] | |||||
Number of signed purchase orders terminated | PurchaseOrder | 2 | ||||
Money awarded for cost of goods awarded | $ | $ 465,400 | ||||
Total damages | $ | $ 628,109 |
RELATED PARTY TRANSACTIONS, Rel
RELATED PARTY TRANSACTIONS, Related Parties (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Mr. Yeung Heung Yeung [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | A principal shareholder of the Company |
Zhejiang RAP [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Jiangsu Rongyuan [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | An entity significantly influenced by Hangzhou Ronda Tech Co., Limited |
Shenzhen Yuanzheng Investment Development Co. Ltd ("Shenzhen Yuanzheng") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Controlled by Mr. Yeung Heung Yeung |
Shanghai Hengyu Enterprise Management Consulting Co., Ltd ("Shanghai Hengyu") [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Ultimately controlled by Mr. Peter Wang |
Antric GmbH [Member] | |
Related Parties [Abstract] | |
Relationship with the Company | Invested by the Company |
RELATED PARTY TRANSACTIONS, Tra
RELATED PARTY TRANSACTIONS, Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Hangzhou Hezhe Energy Technology Co., Ltd [Member] | ||
Material Related Party Transactions [Abstract] | ||
Purchase of raw materials from related parties | $ 79,773 | $ 480,672 |
Payment on the purchase of the raw materials | 54,516 | 497,194 |
Shenzhen Yuanzheng [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | 0 | 419,276 |
Mr. Yeung Heung Yeung [Member] | ||
Material Related Party Transactions [Abstract] | ||
Repayment interest-bearing Loan from a related party | $ 0 | $ 209,693 |
RELATED PARTY TRANSACTIONS, Due
RELATED PARTY TRANSACTIONS, Due from Related Parties (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Amounts due from related parties | $ 343,353 | $ 366,936 | |
Hangzhou Hezhe [Member] | |||
Related Party Transaction [Line Items] | |||
Amounts due from related parties | [1] | $ 343,353 | $ 366,936 |
[1]The balance mainly represents the prepayment for raw material to the related party. |
RELATED PARTY TRANSACTIONS, D_2
RELATED PARTY TRANSACTIONS, Due to Related Parties (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Amounts due to related parties | $ 46,900 | $ 716,372 |
Zhejiang RAP [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 20,694 | 23,882 |
Jiangsu Rongyuan [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 23,294 | 23,194 |
Shanghai Hengyu [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | 2,912 | 2,900 |
Antric GmbH [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due to related parties | $ 0 | $ 666,396 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | 3 Months Ended | |||||||||
May 01, 2023 USD ($) m² | May 01, 2023 COP ($) m² | Apr. 26, 2023 USD ($) | Apr. 20, 2023 USD ($) m² | Apr. 20, 2023 CNY (¥) m² | Apr. 01, 2023 USD ($) ft² | Jun. 21, 2022 USD ($) m² | Jun. 21, 2022 COP ($) m² | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Subsequent Event [Abstract] | ||||||||||
Area of Land | m² | 7,931.44 | 7,931.44 | ||||||||
Assets acquired | $ 1,063,271 | $ 4,362,292,000 | ||||||||
Contract amount paid to constructor | $ | $ 2,577,292 | $ 82,799 | ||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of leased-out portion of land | 2,469.27 | 2,469.27 | 64,000 | |||||||
Lease term | 5 years | |||||||||
Monthly rent | $ 9,602 | $ 39,324,371 | $ 115,200 | |||||||
Contract amount | $ 2,349,001 | ¥ 16,132,000 | ||||||||
Contract amount paid to constructor | $ 2,052,111 | ¥ 14,093,080 | ||||||||
Subsequent Event [Member] | Industrial Building Facility [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of leased-out portion of land | ft² | 124,850 | |||||||||
Subsequent Event [Member] | Land Use Right [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Area of Land | m² | 12,206 | 12,206 | ||||||||
Useful life | 50 years | 50 years | ||||||||
Assets acquired | $ 222,626 | ¥ 1,530,000 | ||||||||
Subsequent Event [Member] | Investor [Member] | ||||||||||
Subsequent Event [Abstract] | ||||||||||
Redemption of convertible promissory notes | $ | $ 6,000,000 |