Business Description

NOTE 1. BACKGROUND AND BASIS OF PRESENTATION 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 previously announced 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”). As of December 31, 2025, the Company’s major subsidiaries are as follows: Subsidiaries Place of incorporation Date of incorporation Percentage of ownership Microvast, Inc. (“ Microvast ”) Delaware, USA October 2006 100 % Microvast Power Solutions, Inc (“ MP Solutions ”) Texas, USA July 2013 100 % Microvast Power Systems Co., Ltd. (“ MPS ”) Huzhou, PRC December 2006 100 % Microvast GmbH (“ MV GmbH ”) Germany May 2016 100 % Huzhou Hongwei New Energy Automobile Co., Ltd. (“ Hongwei ”) Huzhou, PRC December 2016 100 % Microvast Energy, Inc. (“ MV Energy ”) Colorado, USA July 2022 100 % The Company is 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. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”). All intercompany transactions and balances have been eliminated upon consolidation. The accompanying consolidated financial statements of the Company have been prepared on a going concern basis, which assumes that the Company will continue to realize its assets and settle its liabilities in the ordinary course of business. For the years ended December 31, 2025, 2024, and 2023, the Company incurred net losses of $29,218, $195,457, and $106,412, and generated cash flows from operating activities of $75,908, $2,814, and used cash flow in operating activities of $75,303, respectively. As of December 31, 2025, the Company had stockholders’ equity of $410,513, including an accumulated deficit of $1,122,176, cash and cash equivalents of $104,963, restricted cash of $64,275 and other current assets of $279,485. As of December 31, 2025, the Company had outstanding bank borrowings of $106,279, with $93,052 due within the next 12 months, a bond payable of $41,693 that matures in January 2027, a convertible loan with repayment amount of $26,454 that matures in May 2026, and other current liabilities of $254,360. Additionally, as of December 31, 2025, the Company had $37,167 in purchase commitments primarily related to inventory, and $16,435 in capital commitments with $14,153 due within the next 12 months. Based on the Company's current business plan, the existing cash and assets held for sale may not be sufficient to fund operations through the next twelve months. These conditions and events raise substantial doubt about the Company's ability to continue as a going concern. The Company's primary plans to alleviate the substantial doubt include 1) obtaining sufficient funding through operations; it is anticipated that the Company will continue to generate cash through operations in the forecasted period in consideration of the existing contract backlog and anticipated market conditions; and 2) refinancing short-term borrowings; historically, the Company, on an as needed basis, has rolled over or obtained replacement borrowings from existing creditors for its short-term bank loans upon the maturity date of the loans. Subsequent to December 31, 2025, the Company has successfully refinanced loans of $7,722 that matured and anticipates that it will continue to be able to do so for the next twelve months.…