mvst-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_______to_______

Commission File Number: 001-38826

Microvast Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware						83-2530757
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


12603 Southwest Freeway, Suite 300 Stafford, Texas						77477
(Address of principal executive offices)						(Zip Code)

(281) 491-9505

(Registrant’s telephone number, including area code)


N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common stock, par value $0.0001 per share

MVST

The Nasdaq Stock Market LLC

Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share

MVSTW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 5, 2025, there were 325,341,389 shares of the Company’s common stock, par value $0.0001, issued and outstanding.

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MICROVAST HOLDINGS, INC.

FORM 10-Q

For the Quarter Ended March 31, 2025

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		Page
PART I. FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited)	1

	Unaudited Condensed Consolidated Balance Sheets	1

	Unaudited Condensed Consolidated Statements of Operations	3

	Unaudited Condensed Consolidated Statements of Comprehensive P rofit/(Loss)	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders ’ Equity	5

	Unaudited Condensed Consolidated Statements of Cash Flows	6

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	41

PART II. OTHER INFORMATION		43

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report ("Report") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our future results of operations and financial position, our operational performance, our anticipated growth and business strategy, our future capital expenditures and debt service obligations, the projected costs, prospects and plans and objectives of management for future operations, including regarding expected growth and demand for our batteries and energy storage, solutions and introduction of new batteries and energy storage solutions, the adoption of such offerings by customers, our expectations relating to backlog, pipeline and contracted backlog, our ability to implement our remediation plan in connection with the material weakness in our internal control over financial reporting, current expectations relating to legal proceedings, and anticipated impacts and benefits from the Inflation Reduction Act of 2022, as well as any other proposed or recently enacted legislation. In some cases, you may also identify forward-looking statements by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “plan,” “project,” “predict,” “outlook” “should,” “will,” “would,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. Such forward-looking statements are based upon the current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors identified elsewhere in this Report, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•our ability to remain a going concern;

•risk that we may not be able to execute our growth strategies or achieve profitability;

•risk that we may be unable to meet our future capital requirements and we may require additional capital to support our business growth, and this capital might not be available on acceptable terms, or at all;

•potential difficulties in maintaining manufacturing capacity and establishing expected mass manufacturing capacity in the future;

•risks relating to delays, disruptions and quality control problems in our manufacturing operations;

•restrictions in our existing and any future credit facilities;

•risks of operations in China;

•the effects of mechanics liens filed by contractors that we do not have sufficient funds to pay;

•the effects of existing and future litigation;

•changes in general economic conditions, including increases in interest rates and associated Federal Reserve policies, a potential economic recession, and the impact of inflation on our business;

•changes in the highly competitive market in which we compete, including with respect to our competitive landscape, technology evolution or regulatory changes;

•changes in availability and price of raw materials;

•labor relations, including the ability to attract, hire and retain key employees and contract personnel;

•heightened awareness of environmental issues and concern about global warming and climate change;

•risk that we are unable to secure or protect our intellectual property;

•risk that our customers or third-party suppliers are unable to meet their obligations fully or in a timely manner;

•risks related to possible future reductions in pricing or order volume or loss of one or more of our significant customers;

•risks relating to our status as a relatively low-volume purchaser as well as from supplier concentration and limited supplier capacity;

•risk that our customers will adjust, cancel or suspend their orders for our products;

•risks relating to our ability to attract new customers and retain existing customers;

•risks related to our lengthy sales cycle for our products;

•risk of product liability or regulatory lawsuits or proceedings relating to our products or services;

•our ability to maintain and enhance our reputation and brand recognition;

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•the effectiveness of our information technology and operational technology systems and practices to detect and defend against evolving cyberattacks;

•changing laws regarding cybersecurity and data privacy, and any cybersecurity threat or event;

•the effects and associated cost of compliance with existing and future laws and governmental regulations, such as the IRA;

•risks relating to whether renewable energy technologies are suitable for widespread adoption or if sufficient demand for our offerings does not develop or takes longer to develop than we anticipate;

•economic, financial and other impacts such as a pandemic, including global supply chain disruptions; and

•the impact of geopolitical events, including the ongoing conflicts between Russia and Ukraine and in the Middle East; and

•tariffs imposed on products of the PRC into the United States may lead to increased costs and impact our business.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2024 in Part I, Item 1A.

Actual results, performance or achievements may differ materially, and potentially adversely, from any forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as forward-looking statements are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control.

All information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof except as may be required under applicable securities laws. Forecasts and estimates regarding our industry and end markets are based on sources we believe to be reliable, however, there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

All references to the “Company,” “we,” “us” or “our” refer to Microvast Holdings, Inc. and its consolidated subsidiaries other than certain historical information which refers to the business of Microvast prior to the consummation of the Business Combination.

iii

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	90,898	$	73,007
Restricted cash, current	32,096		36,572
Accounts receivable (net of allowance for credit losses of $6,523 and $5,090 as of March 31, 2025 and December 31, 2024, respectively)	135,654		120,626
Notes receivable	10,362		7,579
Inventories, net	129,059		143,327
Prepaid expenses and other current assets	30,027		27,019
Assets held for sale	19,896		19,896
Total Current Assets	447,992		428,026
Restricted cash, non-current	—		22
Property, plant and equipment, net	485,157		478,189
Land use rights, net	11,366		11,371
Acquired intangible assets, net	2,496		2,607
Operating lease right-of-use assets	18,205		17,628
Other non-current assets	17,716		14,024
Total Assets	$	982,932	$	951,867

Liabilities
Current liabilities:
Accounts payable	$	56,771	$	64,940
Notes payable	47,901		51,756
Accrued expenses and other current liabilities	104,136		98,456
Advance from customers	44,204		43,678
Amounts due to related parties	—		5
Short-term bank borrowings	86,241		70,666
Income tax payables	653		652
Total Current Liabilities	339,906		330,153
Long-term bonds payable	41,693		43,157
Long-term bank borrowings	41,302		41,062
Warrant liability	64		290
Share-based compensation liability	98		98
Operating lease liabilities	14,793		14,596
Convertible loan measured at fair value	60,996		104,613
Other non-current liabilities	29,845		30,003
Total Liabilities	$	528,697	$	563,972

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - continued

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	March 31, 2025		December 31, 2024
Commitments and contingencies (Note 16)

Stockholders’ Equity
Common Stock (par value of US$0.0001 per share, 750,000,000 and 750,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 325,216,389 and 324,831,634 shares issued, and 323,528,889 and 323,144,134 shares outstanding as of March 31, 2025 and December 31, 2024)	$	33	$	33
Additional paid-in capital	1,513,685		1,512,982
Statutory reserves	6,032		6,032
Accumulated deficit	(1,031,168)		(1,092,958)
Accumulated other comprehensive loss	(34,347)		(38,194)
Total Equity	$	454,235	$	387,895
Total Liabilities and Equity	$	982,932	$	951,867

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	Three Months Ended March 31,
	2025		2024

Revenues	$	116,491	$	81,351
Cost of revenues	(73,475)		(64,126)
Gross profit	43,016		17,225
Operating expenses:
General and administrative expenses	(10,453)		(23,794)
Research and development expenses	(8,248)		(11,492)
Selling and marketing expenses	(6,799)		(5,591)
Total operating expenses	(25,500)		(40,877)
Subsidy income	1,416		534
Profit/(loss) from operations	18,932		(23,118)
Other income and expenses:
Interest income	177		119
Interest expense	(1,188)		(1,732)
Changes in fair value of warrant liability and convertible loan	43,160		42
Gain on debt restructuring	389		—
Other income/(expense), net	320		(136)
Profit/(loss) before provision for income taxes	61,790		(24,825)
Income tax expense	—		—
Net profit/(loss)	$	61,790	$	(24,825)
Less: net profit/(loss) attributable to noncontrolling interests	—		—
Net profit/(loss) attributable to Microvast Holdings, Inc.'s stockholders	$	61,790	$	(24,825)
Net profit/(loss) per common share
Basic	$	0.19	$	(0.08)
Diluted	$	0.05	$	(0.08)
Weighted average shares used in calculating net profit/(loss) per share of common stock
Basic	323,430,721		315,367,121
Diluted	374,425,026		315,367,121

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE PROFIT/(LOSS)

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	Three Months Ended March 31,
	2025		2024
Net profit/(loss)	$	61,790	$	(24,825)
Foreign currency translation adjustment	3,847		(5,117)
Comprehensive profit/(loss)	$	65,637	$	(29,942)
Comprehensive profit/(loss) attributable to non-controlling interests	—		—
Total comprehensive profit/(loss) attributable to Microvast Holding, Inc.'s stockholders	$	65,637	$	(29,942)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	Three Months Ended March 31, 2025
	Common Stock			Additional paid-in capital		Accumulated deficit		Accumulated other Comprehensive loss		Statutory reserves		Total Microvast Holdings, Inc. Stockholders’ Equity
	Shares	Amount

Balance as of December 31, 2024	323,144,134	$	33	$	1,512,982	$	(1,092,958)	$	(38,194)	$	6,032	$	387,895
Net profit	—	—		—		61,790		—		—		61,790
Issuance of common stock in connection with vesting of share-based awards	384,755	—		—		—		—		—		—
Share-based compensation	—	—		703		—		—		—		703
Foreign currency translation adjustments	—	—		—		—		3,847		—		3,847
Balance as of March 31, 2025	323,528,889	$	33	$	1,513,685	$	(1,031,168)	$	(34,347)	$	6,032	$	454,235


	Three Months Ended March 31, 2024
	Common Stock			Additional paid-in capital		Accumulated deficit		Accumulated other Comprehensive loss		Statutory reserves		Total Microvast Holdings, Inc. Stockholders’ Equity
	Shares	Amount

Balance as of December 31, 2023	315,006,942	$	32	$	1,481,241	$	(897,501)	$	(25,614)	$	6,032	$	564,190
Net loss	—	—		—		(24,825)		—		—		(24,825)
Issuance of common stock in connection with vesting of share-based awards	501,653	—		—		—		—		—		—
Share-based compensation	—	—		11,898		—		—		—		11,898
Foreign currency translation adjustments	—	—		—		—		(5,117)		—		(5,117)
Balance as of March 31, 2024	315,508,595	$	32	$	1,493,139	$	(922,326)	$	(30,731)	$	6,032	$	546,146

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities
Net profit/(loss)	$	61,790	$	(24,825)
Adjustments to reconcile net profit/(loss) to net cash used in operating activities:
Loss/(gain) on disposal of property, plant and equipment	95		(34)
Gain on debt restructuring	(389)		—
Depreciation of property, plant and equipment	7,985		7,470
Amortization of land use right and intangible assets	192		194
Noncash lease expenses	666		664
Share-based compensation	703		11,865
Changes in fair value of warrant and convertible loan	(43,160)		(42)
Allowance of credit losses	1,358		578
Product warranty	4,825		3,269
Changes in operating assets and liabilities:
Notes receivable	(5,263)		10,577
Accounts receivable	(14,108)		12,011
Inventories	15,783		16,341
Prepaid expenses and other current assets	(2,402)		4,305
Amounts due to related parties	(5)		—
Operating lease right-of-use assets	(654)		(323)
Other non-current assets	(1,388)		(275)
Notes payable	(4,150)		1,042
Accounts payable	(8,547)		(27,843)
Advance from customers	462		(1,694)
Accrued expenses and other liabilities	(6,812)		(10,623)
Operating lease liabilities	(340)		(500)
Other non-current liabilities	528		(126)
Net cash generated from operating activities	7,169		2,031

Cash flows from investing activities
Purchases of property, plant and equipment	(2,346)		(10,241)
Proceeds on disposal of property, plant and equipment	14		152
Proceeds from maturity of short-term investments	—		5,564
Net cash used in investing activities	(2,332)		(4,525)

Cash flows from financing activities
Proceeds from borrowings	28,187		18,780
Repayment of bank borrowings	(13,062)		(12,520)
Repayment of bonds payable	(1,375)		—
Deferred payment related to purchases of property, plant and equipment	(4,287)		—
Net cash generated from financing activities	9,463		6,260
Effect of exchange rate changes	(907)		(5,251)
Increase/ (decrease) in cash, cash equivalents and restricted cash	13,393		(1,485)

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MICROVAST HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)


	Three Months Ended March 31,
	2025		2024
Cash, cash equivalents and restricted cash at beginning of the period	109,601		88,189
Cash, cash equivalents and restricted cash at end of the period	$	122,994	$	86,704


	Three Months Ended March 31,
	2025		2024
Reconciliation to amounts on unaudited condensed consolidated balance sheets
Cash and cash equivalents	$	90,898	$	39,451
Restricted cash	32,096		47,253
Total cash, cash equivalents and restricted cash	$	122,994	$	86,704


Non-cash investing and financing activities
Payable for purchase of property, plant and equipment	$	51,960	$	92,817

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MICROVAST HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Microvast, Inc. was incorporated under the laws of the State of Texas in the United States of America on October 12, 2006 and re-domiciled to the State of Delaware on December 31, 2015. On July 23, 2021 (the “Closing Date”), Microvast, Inc. and Tuscan Holdings Corp. (“Tuscan”) consummated the merger (the “Merger” or the "Business Combination"), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated February 1, 2021, between Tuscan, Microvast, Inc. and TSCN Merger Sub Inc., a Delaware corporation (“Merger Sub”).

Pursuant to the Merger Agreement, the Merger Sub merged with and into Microvast, Inc., with Microvast, Inc. surviving the Merger. As a result of the Merger, Tuscan was renamed “Microvast Holdings, Inc.” (the “Company”). The Merger was accounted for as a reverse recapitalization as Microvast, Inc. was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”).

The Company and its subsidiaries (collectively, the “Group”) are primarily engaged in developing, manufacturing, and selling lithium-ion battery technologies for use in commercial electric vehicles and battery energy storage systems across the globe.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and use of estimates

The accompanying unaudited condensed consolidated financial statements include the accounts of Microvast Holdings, Inc. and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial reporting. Accordingly, certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024, included in the Annual Report on Form 10-K filed with the SEC on March 31, 2025, which contains a more complete discussion of the Company’s accounting policies and other relevant information.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements have been included. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for any future interim period or the full fiscal year ending December 31, 2025.

The December 31, 2024 condensed consolidated balance sheet data included herein was derived from the Company’s audited financial statements.

There have been no material changes to the Company’s significant accounting policies as disclosed in Note 2 to the audited consolidated financial statements for the year ended December 31, 2024.

Significant accounting estimates include, but are not limited to, allowances for credit losses, write-down of obsolete inventories, impairment of property, plant and equipment, product warranties, fair value measurement of Convertible Loan and share based compensation. Actual results could differ materially from those estimates.

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MICROVAST HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued

Going concern

The accompanying unaudited condensed consolidated financial statements of the Group have been prepared on a going concern basis, which assumes that the Group will continue to realize its assets and settle its liabilities in the ordinary course of business.

As of March 31, 2025, the Group had working capital of $108,086, stockholders’ equity of $454,235 (including an accumulated deficit of $1,031,168), and cash and cash equivalents of $90,898. As of March 31, 2025, the Group held outstanding borrowings of $127,543, with $86,241 due within the next 12 months, and other current liabilities of $253,665, which include accounts payable, notes payable, accrued expenses and other current liabilities. Additionally, as of March 31, 2025, the Group had $62,085 in purchase commitments primarily related to inventory, and $52,060 in capital commitments with $26,165 due within the next 12 months.

These conditions and events raise substantial doubt about the Group’s ability to continue as a going concern.

Management’s primary plans to alleviate the substantial doubt are as described below.

• Forecasted cash inflow from operations - As of March 31, 2025, the Group has performed a review of its cash flow forecast for the next twelve months from the date of issuance of its unaudited condensed consolidated financial statements. For the three months ended March 31, 2025, the Group incurred net profit from operation of $18,932 and generated cash flow of $7,169 from its operating activities. The Group believes that its operating cash flow in the forecasted period will continue to grow. Management believes the forecast is based on reasonable assumptions including: i) there is no significant uncertainty on the execution of the existing contract backlog in the forecasted period, and ii) despite the potential fluctuation of the raw material prices, the gross margin in the forecasted period is not expected to significantly decline considering the selling price secured by the contract backlogs and the market conditions of major raw materials.

• Refinancing of short-term bank borrowings - While there can be no assurance that the Group will be able to refinance its short-term bank borrowings as they become due, historically, the Group has rolled over or obtained replacement borrowings from existing creditors for its short-term bank loans upon the maturity date of the loans if needed. For $37,483 short-term bank borrowings outstanding as of March 31, 2025, for which the Company has successful refinancing experience, the Group assumes that it will continue to be able to do so for the next twelve months.

The below factors are considered by the management in assessing whether the plan is probable of being effectively implemented.

• The refinancing of these loans have regularly occurred historically, even during the Group’s financially distressed periods.

• These loans were borrowed by Microvast Power Systems Co., Ltd.('MPS'), the Group’s main operating subsidiary. MPS generated profit and positive cash flow during the twelve months ended December 31, 2024 and the three months ended March 31, 2025, and has shown improvement in operations comparing to the earlier periods.

• In April and early May 2025, the Group successfully refinanced loans of $1,378 that matured.

• The Group has established long-term relationships with those banks and has never defaulted on repayments historically.

Based on the above, the Group concluded that it is probable that management’s plans will alleviate the substantial doubt about the Group’s ability to continue as a going concern and that adequate sources of liquidity will exist to fund the Company’s working capital and capital expenditures requirements and to meet its short term debt obligations, and other liabilities and commitments as they become due. Therefore, the accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

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MICROVAST HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued

Revenue recognition

Nature of Goods and Services

The Group’s revenue consists primarily of sales of lithium-ion batteries. The obligation of the Group is to provide the battery products. Revenue is recognized at the point of time when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Group expects to be entitled to in exchange for the goods or services.

Disaggregation of revenue

For the three months ended March 31, 2025 and 2024, the Group derived revenues from geographic regions as follows:


	Three Months Ended March 31,
	2025		2024
China	$	44,126	$	27,192
Other Asia & Pacific countries	5,925		23,294
Asia & Pacific	50,051		50,486
Europe	60,050		28,921
U.S.	6,390		1,944
Total	$	116,491	$	81,351

Contract balances

Contract balances include accounts receivable and advances from customers. Accounts receivable represent cash not received from customers and are recorded when the rights to consideration are unconditional. The allowance for credit losses reflects the best estimate of probable losses inherent to the accounts receivable balance. Contract liabilities, recorded in advance from customers in the consolidated balance sheets, represent payment received in advance or payment received related to a material right provided to a customer to acquire additional goods or services at a discount in a future period. During the three months ended March 31, 2025 and 2024, the Group recognized $3,163 and $3,922 of revenue previously included in advance from customers as of January 1, 2025 and January 1, 2024, respectively.

Operating leases

The Company determines whether an arrangement is or contains a lease at inception. Operating leases are recognized in the condensed consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities, initially measured at the present value of lease payments over the lease term. As the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at the commencement date. The rate is estimated using a portfolio approach that approximates the interest rate on a collateralized basis over similar terms and in a similar economic environment. Lease expense is recognized on a straight-line basis over the lease term.

The Company has elected the package of practical expedients permitted under ASC 842, which allows entities not to reassess:

•Whether existing or expired contracts contain a lease;

•Lease classification; and

•Initial direct costs for any leases existing at the adoption date.

Table of Contents

MICROVAST HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued

Operating leases - continued

Additionally, the Company elected the practical expedient not to separate lease and non-lease components, and for leases other than real estate (e.g., printing machines and electronic appliances) with terms of 12 months or less, elected the short-term lease exemption.

As of March 31, 2025, the Company recorded ROU assets of $18,205 and operating lease liabilities of $18,211, including current portion in the amount of $3,418, which was recorded under accrued expenses and other current liabilities on the balance sheet.

Lessor accounting

The Company also acts as a lessor, primarily through leasing arrangements with customers related to the sale of vehicles. These arrangements are classified as sales-type leases. Revenue from the sale of leased products is recognized at lease inception, and interest income is recognized over the lease term using the effective interest method. For the three months period ended March 31, 2025 and 2024, the Company recognize sales-type lease revenue $4,131 and $1,071 separately, which are included in products sales in the accompanying consolidated statements of operations. As of March 31, 2025, the Company recorded net investment in sales-type leases of $8,629 including current portion in the amount of $4,328, which was recorded under accounts receivables on the balance sheet.

Assets held for sale

Assets to be disposed of by sale are reported at the lower of the carrying value or fair value less cost to sell when the Company has committed to a sale agreement and such assets would be reported separately as assets held for sale in the unaudited condensed consolidated balance sheets.

Debt restructuring

A debt restructuring is the modification of debt in which a creditor grants a concession it would not otherwise consider to a debtor that is experiencing financial difficulties. These modifications may include an extension of the maturity date, a reduction of the face amount or maturity amount of the debt or a reduction of accrued interest. During the three months ended March 31, 2025, the Company recorded a gain of $389 on payable concessions in the unaudited condensed consolidated statements of operations.

Convertible Loan measured at fair value

The Company has elected the fair value option to account for the Convertible Loan (as defined below) described in Note 14 – Convertible loan measured at fair value herein, and records changes in fair value in the unaudited condensed consolidated statements of operations, with the exception of changes in fair value due to instrument-specific credit risk which, if present, will be recorded as a component of other comprehensive income. Interest expense related to the Convertible Loan is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Convertible Loan was expensed as incurred. A gain of $42,934 was recognized for the three months ended March 31, 2025. The fair value of the Convertible Loan was determined by using a discounted cash flow model for the bond component and a Black-Scholes-Merton model for the conversion option, which is considered a Level 3 fair value measurement.

Table of Contents

MICROVAST HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued

Warrant

The Company accounts for warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. As the Private Warrants (as defined below in Note 10) meet the definition of a derivative as contemplated in ASC 815, the Company classifies the Private Warrants as liabilities. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statements of operations. The Private Warrants are valued using a Monte Carlo simulation model on the basis of the quoted market price of the Company’s publicly-traded warrants.

Recent accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company is currently assessing the impact of this guidance, however, the Company do not expect a material impact to the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures" (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amended guidance requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the financial statements. In addition, the guidance requires disclosure of selling expenses and its definition. The new guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance can be applied either prospectively or retrospectively. The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact to the consolidated financial statements.

NOTE 3. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


	March 31, 2025		December 31, 2024
Accounts receivable	$	142,177	$	125,716
Allowance for credit losses	(6,523)		(5,090)
Accounts receivable, net

SEC Form 10-Q filed by Microvast Holdings Inc.