Company: CENN
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001140361-25-011607
Chunk: 8

Company: Cenntro Inc.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 1
Chunk 8
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10-K, as a firm registered with the PCAOB (PCAOB ID:2729), is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. GGF,
          whose audit report is included in this report, is headquartered in Guangzhou, China. While our auditor is based in the PRC and is registered with PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable
          to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading of our securities to be prohibited under the HFCA Act, and
          ultimately result in a determination by a securities exchange to delist the Company’s securities. The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and resumed regular inspections in 2023 and beyond, as
          well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act, if needed.

          8

Transfers of Cash to and from Our Subsidiaries

Cash transfers through the Company since inception are primarily attributed to: 1) capital contribution from CEGL to its subsidiaries; 2) shareholder loans from CEGL to its
          subsidiaries; or 3) payment from one group company to another through intercompany transactions. During the year ended December 31, 2024, the total material cash transfer of other assets within the organization was approximately USD$17.1 million.
          An aggregate amount of USD 3.7 million was transferred from operating subsidiaries to the holding companies as repayment to intercompany advances. As of the date of this report, none of our operating subsidiaries have made any dividend or
          distributions to the holding company or through the intermediate holding companies, or to investors including U.S. investors.

Our subsidiaries are permitted to pay dividends to us only out of their accumulated profits. Additionally, each of our subsidiaries in the PRC must make appropriations from
          after-tax profit to a statutory surplus reserve fund. The reserve fund requires an annual appropriation of 10% of after-tax profit (determined under accounting principles generally accepted in the PRC at each year-end) after offsetting
          accumulated losses from prior years until such reserve reaches 50% of the subsidiary’s registered capital. The reserve