CENN Cenntro Inc

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Cenntro Electric Group Ltd

ACN 619 054 938

Scheme Booklet

for the proposed scheme of arrangement between Cenntro Electric Group Ltd ACN 619 054 938 (Cenntro) and the holders of ordinary shares in Cenntro in relation to the proposed re-domiciliation of Cenntro to the United States.

The Board unanimously recommends that you vote in favour of the Scheme

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR URGENT ATTENTION.

If you are in any doubt as to how to deal with this Scheme Booklet, please consult your legal, financial, taxation or other professional adviser immediately. If after reading this Scheme Booklet you have any questions about the Scheme, please call the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST).

 

This Scheme Booklet provides Shareholders with information about the proposed acquisition by Cenntro Inc. (HoldCo) of all Shares by way of a scheme of arrangement to effect a re-domiciliation of Cenntro to the United States.

This Scheme Booklet is important and requires your immediate attention. You should read this Scheme Booklet in full before making any decision as to how to vote at the Scheme Meeting.

This Scheme Booklet is the explanatory statement for the Scheme for the purposes of section 412(1) of the Corporations Act.

A copy of this Scheme Booklet has been registered by ASIC for the purposes of section 412(6) of the Corporations Act. ASIC has been given the opportunity to comment on this Scheme Booklet in accordance with section 411(2) of the Corporations Act. Neither ASIC, nor any of its officers, takes any responsibility for the contents of this Scheme Booklet.

ASIC has been requested to provide a statement, in accordance with section 411(17)(b) of the Corporations Act, that it has no objection to the Scheme. If ASIC provides that statement, it will be produced to the Court at the Second Court Hearing.

The fact that, under section 411(1) of the Corporations Act, the Court has ordered that the Scheme Meeting be convened and has approved the explanatory statement required to accompany the Notice of Scheme Meeting does not mean that the Court:

Capitalised terms used in this Scheme Booklet are defined in Section 9.1 of this Scheme Booklet. Section 9.2 also sets out some rules of interpretation which apply to this Scheme Booklet.

This Scheme Booklet is not a disclosure document for the purposes of Chapter 6D of the Corporations Act and does not constitute, nor contain, an offer to Shareholders or a solicitation of an offer from Shareholders, in any jurisdiction.

This Scheme Booklet has been prepared without reference to the investment objectives, financial and taxation situation or particular needs of any Shareholder, or any other person. The information and recommendations contained in this Scheme Booklet do not constitute, and should not be taken as, financial product or a tax opinion or other tax advice. The Cenntro Board encourages you to seek independent legal, financial and taxation advice before making any investment decision and any decision as to whether or not to vote in favour of the Scheme Resolution.

This Scheme Booklet should be read in its entirety before making a decision on whether or not to vote in favour of the Scheme Resolution. In particular, it is important that you consider the potential risks if the Scheme does not proceed, as set out in Sections 3.13 and 6 of this Scheme Booklet, and the views of the Independent Expert set out in the Independent Expert’s Report contained in Attachment A.

If you are in any doubt as to the course you should follow, you should consult an independent and appropriately licensed and authorised professional adviser.

This Scheme Booklet contains both historical and forward-looking statements (including in the Independent Expert’s Report). Forward-looking statements or statements of intent in relation to future events in this Scheme Booklet (including in the Independent Expert’s Report) should not be taken to be forecasts or predictions that those events will occur. Forward-looking statements generally may be identified by the use of forward looking words such as ‘believe’, ‘aim’, ‘expect’, ‘anticipate’, ‘intending’, ‘foreseeing’, ‘likely’, ‘should’, ‘planned’, ‘may’, ‘estimate’, ‘potential’, or other similar words. Similarly, statements that describe the objectives, plans, goals, intentions or expectations of Cenntro or HoldCo are or may be forward-looking statements. You should be aware that such statements are only opinions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to Cenntro and HoldCo and/or the industry in which they operate, as well as general economic conditions, prevailing exchange rates and interest rates and conditions in financial markets.

Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement and deviations are both normal and to be expected. Neither Cenntro, HoldCo nor any of their respective officers, directors, employees or advisers nor any person named in this Scheme Booklet or involved in the preparation of this Scheme Booklet make any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward-looking statement. Accordingly, you are cautioned not to place undue reliance on those statements.

The forward-looking statements in this Scheme Booklet reflect views held only at the date of this Scheme Booklet. Subject to any continuing obligations under the Listing Rules or the Corporations Act, Cenntro, HoldCo and their respective officers, directors, employees and advisers, disclaim any obligation or undertaking to distribute after the date of this Scheme Booklet any updates or revisions to any forward-looking statements to reflect:

Except as outlined below, the information contained in this Scheme Booklet has been provided by Cenntro and is its responsibility alone. Except as outlined below, neither HoldCo nor any of its respective officers, employees or advisers assume any responsibility for the accuracy or completeness of such information.

The HoldCo Information has been prepared by, and is the responsibility of, HoldCo. Neither Cenntro nor any of its Subsidiaries, directors, officers, employees or advisers assume any responsibility for the accuracy or completeness of such information.

Lonergan Edwards has prepared, and is responsible for, the Independent Expert’s Report and the summary of the Independent Expert’s Report. None of Cenntro, its Subsidiaries, HoldCo, nor their respective officers, employees or advisers assume any responsibility for the accuracy or completeness of the information contained in the Independent Expert’s Report, except, in the case of Cenntro, in relation to the information which it has provided to the Independent Expert.

A copy of the complete Independent Expert’s Report is included as Attachment A.

No consenting party has withdrawn their consent to be named before the date of this Scheme Booklet.

The release, publication or distribution of this Scheme Booklet in jurisdictions other than Australia may be restricted by law or regulation in such other jurisdictions and persons outside of Australia who come into possession of this Scheme Booklet should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable laws or regulations.

This Scheme Booklet has been prepared in accordance with the laws of the Commonwealth of Australia and the information contained in this Scheme Booklet may not be the same as that which would have been disclosed if this Scheme Booklet had been prepared in accordance with the laws and regulations of a jurisdiction outside of Australia.

No action has been taken to register or qualify the HoldCo Shares or otherwise permit a public offering of such securities in any jurisdiction outside Australia.

Based on the information available to Cenntro as at the date of this Scheme Booklet, Scheme Shareholders whose addresses are shown in the Share Register on the Record Date as being in the following jurisdictions outside of Australia will be entitled to have HoldCo Shares issued to them pursuant to the Scheme subject to the qualifications, if any, set out below and in Section 8.8 in respect of that jurisdiction:

Nominees, custodians and other Shareholders who hold Cenntro Shares on behalf of a beneficial owner resident outside of Australia, New Zealand, Canada, Hong Kong, China, Singapore, Cyprus, United Kingdom or the United States may not forward this Scheme Booklet (or any accompanying documents) to anyone outside of these countries without the prior written consent of Cenntro.

Ineligible Foreign Shareholders, will not be issued HoldCo Shares. Instead, the HoldCo Shares to which Ineligible Foreign Shareholders would otherwise be entitled to under the Scheme will be issued to the Sale Agent and sold through the Share Sale Facility, with the net cash proceeds from the sale of such HoldCo Shares sold through the Share Sale Facility, after deducting brokerage and other costs of sale and any taxes which may be required to be withheld under applicable laws, (Share Sale Facility Proceeds) being remitted to the Ineligible Foreign Shareholders. Refer to Sections 3.3 and 3.4 for further details on Ineligible Foreign Shareholders and the Share Sale Facility.

The HoldCo Shares have not been registered under the U.S. Securities Act or under the securities laws of any state or other jurisdiction of the United States.

HoldCo is relying on Section 3(a)(10) of the U.S. Securities Act in connection with the consummation of the Scheme and the issuance of HoldCo Shares. Section 3(a)(10) of the U.S. Securities Act provides an exemption for registration of securities issued in exchange for other securities where the terms and conditions of the issuance and exchange have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of the issuance at which all persons to whom the securities will be issued have the right to appear. Approval of the Scheme by the Court will be relied upon by Cenntro and HoldCo for the purposes of qualifying for the exemption under Section 3(a)(10) of the U.S. Securities Act.

Persons who are Affiliates of Cenntro and who hold Shares prior to the Effective Date of the Scheme and who are Affiliates of HoldCo and hold Shares after the Effective Date of the Scheme will be subject to certain restrictions on resale in a U.S. public market including:

HoldCo Shares issued pursuant to the Scheme have neither been approved nor disapproved by the SEC, or by any other securities regulatory authority of any U.S. state or of any international jurisdiction.

This Scheme Booklet has not been filed with or reviewed by the SEC or any United States state securities authority and none of them has passed upon or endorsed the merits of the Scheme or the accuracy, adequacy or completeness of this Scheme Booklet. Any representation to the contrary is a criminal offence.

Cenntro Shareholders in the United States should note that the Scheme will be conducted in accordance with the laws of Australia. As a result, it may be difficult for you to enforce your rights, including any claim you may have arising under U.S. federal securities laws, as Cenntro is presently located outside the U.S. and some of its officers and directors may be residents of a foreign country. As such, you may not be able to take legal action against Cenntro or its officers and directors in Australia for violations of U.S. securities laws and it may be difficult to compel Cenntro and its officers and directors to subject themselves to a U.S. court’s judgement.

You should be aware that HoldCo may, subject to the requirements of the Nevada Revised Statutes and the U.S. Securities Act, purchase securities other than under the Scheme, such as in open market or privately negotiated purchases.

All financial amounts in this Scheme Booklet are expressed in U.S. currency unless otherwise stated.

Any discrepancies between totals in tables or financial statements, or in calculations, graphs or charts are due to rounding.

All financial and operational information set out in this Scheme Booklet is current as at the date of this Scheme Booklet, unless otherwise stated.

All securities numbers reported in this Scheme Booklet remain subject to rounding of fractional entitlements as a result of the 10:1 share consolidation undertaken by Cenntro which will be fully effected on 15 December 2023.

At the Second Court Hearing, the Court will consider whether to approve the Scheme following the votes at the Scheme Meeting.

Any diagrams, charts, graphs or tables appearing in this Scheme Booklet are illustrative only and may not be drawn to scale. Unless stated otherwise, all data contained in diagrams, charts, graphs and tables is based on information available as at the Last Practicable Date.

All times and dates referred to in this Scheme Booklet are references to times and dates in Australian Eastern Daylight Time (AEDT), unless otherwise indicated. All times and dates relating to the implementation of the Scheme referred to in this Scheme Booklet may change and, among other things, are subject to all necessary approvals from Regulatory Authorities.

Cenntro may collect personal information in the process of implementing the Scheme. The type of information that it may collect about you includes your name, contact details and information on your security holding in Cenntro and the names of persons appointed by you to act as a proxy, attorney or corporate representative at the Scheme Meeting. The collection of some of this information is required or authorised by the Corporations Act.

The primary purpose of the collection of personal information is to assist Cenntro to conduct the Scheme Meeting and implement the Scheme. Without this information, Cenntro may be hindered in its ability to issue this Scheme Booklet and implement the Scheme. Personal information of the type described above may be disclosed to the Share Registry, third party service providers (including print and mail service

providers and parties otherwise involved in the conduct of the Scheme Meeting), authorised securities brokers, professional advisers, related bodies corporate of Cenntro, Regulatory Authorities, and also where disclosure is otherwise required or allowed by law.

Shareholders who are individuals and the other individuals in respect of whom personal information is collected as outlined above have certain rights to access the personal information collected in relation to them. If you would like to obtain details of the information about you held by Cenntro, please contact the Share Registry.

Shareholders who appoint an individual as their proxy, corporate representative or attorney to vote at the Scheme Meeting should ensure that they inform such an individual of the matters outlined above.

If you have any questions in relation to this Scheme Booklet or the Scheme, you should call the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST).

This Scheme Booklet is dated 14 December 2023.

All references to time in this Scheme Booklet are references to AEDT time unless otherwise stated.

This Scheme Booklet contains information about the proposed re-domiciliation of Cenntro to the United States by way of the Scheme under which HoldCo, a new corporation formed under the laws of Nevada, United States, will acquire all of the Cenntro Shares.

Following implementation of the Scheme, HoldCo will become the ultimate parent company of the Cenntro Group. It is intended that:

This Scheme Booklet provides important information for Shareholders to consider before voting in favour of the Scheme Resolution at the relevant Scheme Meeting to be held on Wednesday, 24 January 2024 at 4.00pm (EST), Thursday, 25 January 2024 at 5.00am (CST), and Thursday, 25 January 2024 at 8.00am (AEDT) at 323A Fairfield Road, Unit 10, Freehold, New Jersey, 07728 and online at www.virtualshareholdermeeting.com/CENN2023SM.

If the Scheme is implemented, Eligible Scheme Shareholders will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be credited to each Scheme Shareholder’s account with the Exchange Agent. If you are a Street-name Holder, you will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be initially issued to the Clearance Nominee (DTC’s nominee) and held through the facilities of DTC.

Ineligible Foreign Shareholders will not be issued HoldCo Shares. Instead, the HoldCo Shares to which Ineligible Foreign Shareholders would otherwise be entitled to under the Scheme will be issued to the Sale Agent and sold through the Share Sale Facility, with the Share Sale Facility Proceeds being remitted to the Ineligible Foreign Shareholders.

Street-name Holders resident in jurisdictions outside of Australia and its external territories, New Zealand, Hong Kong, Singapore, China, Canada, United Kingdom, Cyprus or the United States are not considered Ineligible Foreign Shareholders. If you are a Street-name Holder, you will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be initially issued to the Clearance Nominee (DTC’s nominee) and held through the facilities of DTC.

Refer to Sections 3.3 and 3.4 for further details on Ineligible Foreign Shareholders and the Share Sale Facility.

If you are a Shareholder, you will have a say on whether the Scheme is implemented. Your vote is important to ensure that the Scheme is successful.

The Cenntro Board unanimously recommends that Shareholders vote IN FAVOUR of the Scheme Resolution. The reasons supporting this recommendation are set out in Section 2.2 of this Scheme Booklet.

The Independent Expert has concluded that the Scheme is, on balance, in the best interests of Shareholders.

However, you are not obliged to follow the recommendation of the Cenntro Board or the conclusions of the Independent Expert. There are certain factors that may lead you to vote against the Scheme Resolution. Some of these factors are set out in Section 2.3 of this Scheme Booklet.

You should read this Scheme Booklet carefully in full, including the reasons to vote in favour of or against the Scheme Resolution (as set out in Section 2), before making any decision on how to vote.

Answers to various frequently asked questions about the Scheme Resolution are set out in Section 1. If you have any additional queries about this Scheme Booklet or the Scheme please call the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST), visit www.cenntroauto.com or contact your legal, financial, taxation or other professional adviser.

The Scheme Meeting will be held on Wednesday, 24 January 2024 at 4.00pm (EST), Thursday, 25 January 2024 at 5.00am (CST) and Thursday, 25 January 2024 at 8.00am (AEDT) at 323A Fairfield Road, Unit 10, Freehold, New Jersey, 07728 and online at www.virtualshareholdermeeting.com/CENN2023SM.

Shareholders who participate in the Scheme Meeting via the online platform will be able to listen to the Scheme Meeting, cast a vote online and ask questions via text. Only Shareholders that login with their unique 16-digit control number will be able to vote and ask questions via text. No Shareholders can speak during the Scheme Meeting.

The business of the Scheme Meeting is to consider and, if thought fit, pass the Scheme Resolution to approve the Scheme. The Scheme Resolution must be approved by:

Please refer to Section 3 and the Notice of Scheme Meeting set out in Attachment D for further information.

Following approval of the Scheme by Shareholders, the Court must also approve the Scheme and has discretion as to whether or not the Scheme is approved.

If you are registered as a Shareholder on the Share Register at 7.00 pm on Tuesday, 23 January 2024 (AEDT), you will be entitled to attend and vote at the Scheme Meeting.

All Shareholders are encouraged to vote either by completing and returning the Proxy Form or alternatively by attending the Scheme Meeting in person, attending online or by proxy, attorney or corporate representative. The Scheme Booklet provides information on how to lodge your Proxy Form (if applicable).

Generally, persons whose Shares are held in ‘street-name’ by a bank, broker or nominee may direct the bank, broker or nominee to vote the relevant Shares or may submit a ‘legal proxy’ to vote the Shares by one of the following methods:

IN PERSON: To vote in person, you must attend the Scheme Meeting. All persons who attend the Scheme Meeting in person and who are entitled to vote at the Scheme Meeting will be admitted and given a voting card at the point of entry to the meeting, once they have disclosed their name and address.

ONLINE: Scheme Shareholders or their validly appointed proxies, attorneys or corporate representatives, may attend and vote at the Scheme Meeting via the online meeting platform at www.virtualshareholdermeeting.com/CENN2023SM. The online platform may be accessed via a computer or mobile or tablet device with internet access. The online platform will allow a Scheme Shareholder or its authorised proxies, attorneys and corporate representatives to watch the Scheme Meeting live and cast an online vote.

Participants will be able to log in to the online platform 30 minutes before the start of the Scheme Meeting. It is recommended that participants log in at least 15 minutes before the scheduled start time for the Scheme Meeting.

More information about how to use the online platform (including how to vote and submit questions online during the Scheme Meeting) is available at www.virtualshareholdermeeting.com/CENN2023SM.

BY PROXY: You may appoint a person or, if you are entitled to cast two or more votes at the Scheme Meeting, two persons, as your proxy to attend and vote on your behalf at the Scheme Meeting. Where you appoint two proxies, the appointment may specify the proportion or number of votes that each proxy may exercise. If the appointment does not specify the proportion or number of votes that each proxy may exercise, each proxy may exercise half of the votes that you are entitled to cast at the Scheme Meeting. Any fractions of votes resulting from an appointment will be disregarded. Each proxy will have the right to vote on the poll and also to speak at the Scheme Meeting.

A proxy need not be a Shareholder of Cenntro. A proxy may be an individual or a body corporate. If a body corporate is appointed, the Proxy Form must indicate the full name of the body corporate and the full name or title of the individual representative of the body corporate for the Scheme Meeting.

A vote given in accordance with the terms of a proxy appointment is valid despite the revocation of that appointment, unless notice in writing of the revocation has been received by the Share Registry before the start or resumption of the meeting. A proxy is not revoked by the principal attending and taking part in the meeting, unless the principal actually votes at the meeting on the resolution for which the proxy was proposed to be used. If you wish to appoint a second proxy, a second proxy form should be used and you should clearly indicate on the second proxy form that it is a second proxy and not a revocation of your first proxy. You can obtain a second proxy form from the Share Registry.

If you hold your Shares in street name and you wish to vote by proxy, please follow the directions provided to you by your bank, broker or other nominee in order to instruct your bank, broker or other nominee how to vote your Shares.

If you return your Proxy Form:

The chair of the meeting intends to vote all valid undirected proxies which nominate the chair in favour of the Scheme Resolution.

Proxies of Shareholders will be admitted to the Scheme Meeting and given a voting card on providing at the point of entry to the meeting, written evidence of their name and address.

Your appointment of a proxy does not preclude you from attending in person or online, revoking the proxy and voting at the Scheme Meeting.

You must deliver the signed and completed Proxy Form (together with the power of attorney or other authority (if any) under which the Proxy Form is signed, or a certified copy of that power of attorney) to the Share Registry before Monday, 22 January 2024 at 4.00pm (EST), Tuesday, 23 January 2024 at 5.00am (CST), and Tuesday, 23 January 2024 at 8.00am (AEDT) (or, if the meeting is adjourned or postponed, no later than 48 hours before the resumption of the meeting in relation to the resumed part of the meeting) in any of the following ways:

Shareholders may lodge their proxy online at www.proxyvote.com and following the instructions on the website. You will require the information on your Proxy Form to lodge your proxy through the website.

Broadridge Financial Solutions, Inc., Vote Processing

c/o Broadridge

51 Mercedes Way

Edgewood, NY 11717

United States

 

A return envelope, which requires no postage be paid if mailed within the United States, is enclosed for your convenience.

For Intermediary Online subscribers only (custodians) please visit intermediaryonline.com to submit your voting intentions.

If a Proxy Form is completed under power of attorney or other authority, the power of attorney or other authority, or a certified copy of the power of attorney or other authority, must accompany the completed Proxy Form unless the power of attorney or other authority has previously been noted by the Share Registry.

If you hold Shares jointly with one or more other persons, in order for your direct vote or proxy appointment to be valid, each of you must sign the voting form.

BY ATTORNEY: You may appoint an attorney to attend and vote at the Scheme Meeting on your behalf. your attorney need not be another Shareholder. Each attorney will have the right to vote on the poll and also to speak at the Scheme Meeting.

The power of attorney appointing your attorney to attend and vote at the Scheme Meeting must be duly executed by you and specify your name, the company (that is, Cenntro), and the attorney, and also specify the meeting at which the appointment may be used. The appointment may be a standing one.

The power of attorney, or a certified copy of the power of attorney, should be lodged at the registration desk on the day of the Scheme Meeting or delivered by post or by facsimile to the Share Registry before Monday, 22 January 2024 at 4.00pm (EST), Tuesday, 23 January 2024 at 5.00am (CST), and Tuesday, 23 January 2024 at 8.00am (AEDT) (or, if the meeting is adjourned or postponed, no later than 48 hours before the resumption of the meeting in relation to the resumed part of the meeting).

Attorneys of Shareholders will be admitted to the meeting and given a voting card on providing at the point of entry to the meeting, written evidence of their appointment, their name and address, and the name of their appointors.

Your appointment of an attorney does not preclude you from attending in person or online and voting at the meeting.

BY CORPORATE REPRESENTATIVE: If you are a body corporate, you may appoint an individual to act as your body corporate representative. The appointment must comply with the requirements of section 250D of the Corporations Act, meaning that Cenntro will require a certificate of appointment of body corporate representative to be executed by you in accordance with the Corporations Act.

A form of certificate may be obtained from the Share Registry by calling the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside

the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST). The certificate of appointment may set out restrictions on the representative’s powers.

If a certificate is completed under a power of attorney or other authority, the power of attorney or other authority, or a certified copy of the power of attorney or other authority, must accompany the completed certificate unless the power of attorney or other authority has previously been noted by the Share Registry.

Body corporate representatives of Shareholders will be admitted to the Scheme Meeting and given a voting card on providing at the point of entry to the meeting, written evidence of their appointment, their name and address and the name of their appointors.

Further information on the Scheme Meeting can be found in the Notice of Scheme Meeting in Attachment D.

If you have any questions after reading this Scheme Booklet, please call the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST), or contact your legal, financial, taxation or other professional adviser.

14 December 2023

Dear Shareholder,

On 11 September 2023, Cenntro announced its proposal to seek Shareholder approval of a scheme of arrangement (Scheme) under which Cenntro will re-domicile from Australia to the United States. This will occur through Cenntro, Inc. (HoldCo) (a new corporation formed under the laws of Nevada, United States) acquiring all of the Shares and, in exchange, Eligible Scheme Shareholders will receive one HoldCo Share for each Share held as at the Record Date, which will be credited to each Eligible Scheme Shareholder’s account with the Exchange Agent. If you are a Street-name Holder, you will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be initially issued to the Clearance Nominee (DTC’s nominee) and held through the facilities of DTC.

If the Scheme is implemented, Cenntro will become a wholly owned subsidiary of HoldCo. Promptly following implementation of the Scheme, Cenntro will be delisted from Nasdaq. HoldCo Shares will be listed on Nasdaq on the Implementation Date, subject to authorisation for listing being obtained from Nasdaq and official notice of issuance of HoldCo Shares from HoldCo.

On behalf of the Cenntro Board, I am pleased to invite you to take part in the Scheme Meeting that will be held on Wednesday, 24 January 2024 at 4.00pm (EST), Thursday, 25 January 2024 at 5.00am (CST), and Thursday, 25 January 2024 at 8.00am (AEDT) at 323A Fairfield Road, Unit 10, Freehold, New Jersey, 07728 and online at www.virtualshareholdermeeting.com/CENN2023SM to consider and vote on the Scheme.

The Cenntro Directors have considered the advantages and disadvantages of the Proposed Transaction and are of the unanimous view that the advantages significantly outweigh the disadvantages and risks.

The Cenntro Board considers that the advantages of the Proposed Transaction are that it is likely to:

The Cenntro Board believes that the potential disadvantages and risks of the Proposed Transaction include the following:

You should carefully read this Scheme Booklet in full (including the advantages, disadvantages and risks of the Proposed Transaction outlined in Section 2) before making any decision as to whether and how vote on the Scheme Resolution.

Cenntro has engaged Lonergan Edwards to prepare the Independent Expert’s Report for this Scheme Booklet. The Independent Expert has concluded the Scheme is in the best interests of Shareholders.

A full copy of the Independent Expert’s Report is also included in Attachment A.

For the reasons set out in this Scheme Booklet, the Board unanimously recommends that you vote in favour of the Scheme Resolution at the Scheme Meeting.

Each member of the Cenntro Board that holds or controls Shares intends to vote in favour of the Scheme.

Your vote is important regardless of how many Shares you own. If you wish for the Scheme to proceed, it is important that you vote in favour of the Scheme Resolution at the Scheme Meeting.

This Scheme Booklet sets out important information regarding the Scheme, and I encourage you to consider it carefully and in its entirety.

If you require any further information, please call the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST).

On behalf of the Cenntro Board, I thank you for your continued support as a Shareholder. Cenntro encourages you to vote in favour of the Scheme, which Cenntro believe to be in the best interests of Shareholders.

Yours sincerely,

 

Peter Wang

Executive Chairman

This Section 1 answers some frequently asked questions about the Proposed Transaction. It is not intended to address all relevant issues for Shareholders. This Section 1 should be read together with all other parts of this Scheme Booklet (including the risk factors in Section 6).

The Scheme has a number of advantages and disadvantages which may affect Shareholders in different ways, depending on their individual circumstances. Shareholders should seek professional advice on their particular circumstances, as appropriate.

Section 2.2 provides a summary of some of the reasons why the Cenntro Directors have unanimously recommended you vote in favour of the Scheme Resolution.

Section 2.2 should be read in conjunction with Section 2.3 which sets out reasons why you may wish to vote against the Scheme Resolution.

You should read this Scheme Booklet in full, including the Independent Expert’s Report, before deciding how to vote at the Scheme Meeting. While the Cenntro Directors acknowledge the reasons to vote against Scheme Resolution, they believe the advantages of the Scheme Resolution significantly outweigh the disadvantages.

The Cenntro Directors unanimously recommend that Cenntro Shareholders vote in favour of the Scheme having considered the advantages, disadvantages and risks associated with the Scheme in arriving at this recommendation.

The Cenntro Directors believe that the re-domiciliation of the Cenntro Group to the U.S. is in the best interests of Shareholders as it is likely to:

Each member of the Cenntro Board intends to vote for the Scheme in respect of their personal holdings of Cenntro Shares, and any proxies placed at their discretion.

The Independent Expert has concluded that the Scheme is in the best interests of Shareholders as, in the Independent Expert’s opinion, the advantages of the Scheme outweigh the disadvantages, both of which are summarised in section IV of the Independent Expert’s Report.

A copy of the Independent Expert’s Report is set out in Attachment A. Shareholders are encouraged to read the Independent Expert’s Report carefully, including the assumptions, qualifications and disclaimers on which the Independent Expert’s conclusions are based.

The Cenntro Board considers that U.S. market participants can be more knowledgeable regarding electric light and medium-duty vehicles. As a result, they may be able to more clearly evaluate the performance and future prospects of Cenntro, as compared to its peers. The Cenntro Board believes that changing the country of incorporation of the parent company of the Cenntro Group from Australia to the U.S. may result in an increased valuation.

Furthermore, the Cenntro Board believes that by redomiciling to Nevada, United States, Cenntro will have greater access to lower-cost debt or equity capital in the U.S. market, which is larger and more diverse than the Australian capital market. This may enable Cenntro to finance its future growth at a lower cost.

Cenntro is currently an Australian incorporated company listed on Nasdaq.

Given that more than 50% of Cenntro Shares are beneficially owned by U.S. persons and a majority of Cenntro’s assets (as well as officers and directors) are located in the U.S., Cenntro lost its status as a “foreign private issuer” under U.S. federal securities law, effective 1 January 2023. As a result, Cenntro would be required to comply with reporting and other obligations pursuant to U.S. securities law as if it were a U.S. domestic company, including the preparation and filing of its financial statements pursuant to U.S. generally accepted accounting principles, rather than the International Financial Reporting Standards, Cenntro will also have to meet corporate governance requirements of Nasdaq and the U.S. Securities and Exchange Commission applicable to U.S. domestic companies.

Following implementation of the Scheme, Cenntro will be delisted from Nasdaq and HoldCo, a new corporation formed under the laws of Nevada, United States, will be listed on Nasdaq, which will streamline and reduce overhead costs of the Cenntro Group, particularly in respect of reporting, compliance, and audit costs, which are increased significantly due to Cenntro being a company incorporated in Australia.

Cenntro estimates that the re-domiciliation could generate cost savings of approximately A$0.8 million per annum once fully implemented.

Cenntro’s current business and the majority of corporate senior management team are already located in the United States and the re-domiciliation will align its corporate and operations structure. This is expected to make the overall structure more easily understandable by potential investors that prefer domestically domiciled companies with familiar corporate governance and financial reporting standards.

The Cenntro Directors further consider that re-domiciling the Cenntro Group to the United States will provide access to a broader range of investors that are familiar with and have a stronger interest in domestically listed electric vehicle companies. Cenntro may also qualify for incentives under the current Inflation Reduction Act of 2022, or any future incentives provided by the U.S. Federal and State Governments. This may improve the affordability of Cenntro’s electric vehicles and assist with competing in the U.S. automobile market, potentially leading to the acceleration of top line growth.

If the Scheme is implemented, Eligible Scheme Shareholders will receive HoldCo Shares, and will hold an equivalent proportional interest, in HoldCo as they held in Cenntro prior to the implementation of the Proposed Transaction (subject to rounding and the Share Sale Facility).

The Scheme has some potential disadvantages and risks that Shareholders should consider in deciding whether to vote in favour of the Scheme Resolution, as set out in this Section 2. The Cenntro Board believes the benefits of the Scheme outweigh the disadvantages and unanimously recommend that Shareholders vote in favour of the Scheme Resolution. In addition, the Independent Expert has concluded that the Scheme is, on balance, in the best interests of Shareholders.

However, Shareholders are not obliged to follow the recommendation of the Cenntro Board, or the conclusions of the Independent Expert. Set out below are some of the reasons that may lead you to vote against the Scheme Resolution. This Section should be read in conjunction with Section 6, which sets out some the risks associated with the Scheme.

Despite the view of the Cenntro Directors and the Independent Expert, you may believe that the Scheme is not in the best interests of Shareholders or not in your individual best interests.

Shareholders may believe that it is in the best interests of Shareholders for Cenntro to remain as a company domiciled in Australia.

On implementation of the Scheme, Eligible Scheme Shareholders will become holders of HoldCo Shares. HoldCo, a new corporation formed under the laws of Nevada, United States, will not be subject to all of the provisions of the Corporations Act (to which Cenntro is currently subject and with which Shareholders may be more familiar). The rights of holders of HoldCo Shares will instead be governed by the laws of the State of Nevada, including the Nevada Revised Statutes Chapter 78: Private Corporations (Nevada Corporation Law), U.S. federal securities laws, the Nasdaq Listing Rules and HoldCo’s certificate of incorporation and by-laws.

Shareholders receiving HoldCo Shares in exchange for their Shares may also have reduced takeover protection under Nevada and U.S. laws, compared to the protection available under Australian law.

Currently, Australian-resident Shareholders may take action to enforce the provisions of the Cenntro’s Constitution or securities laws applicable to Cenntro in Australian courts, applying Australian law. After implementation of the Scheme, such actions with respect to HoldCo will be determined in accordance with U.S. law, and the courts of the State of Nevada.

In addition, HoldCo’s articles of incorporation authorise the HoldCo Board to issue, without the approval of HoldCo Shareholders, one or more classes of preferred stock having such designations, preferences, limitations and relative rights, including preferences over HoldCo Shares respective dividends and distributions, as the HoldCo Board determines. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of HoldCo Shares and repurchase or redemption rights or liquidation preferences granted to holders of preferred stock could affect the residual value of HoldCo Shares.

A non-exhaustive comparison of the rights of holders of Shares and the rights of holders of HoldCo Shares is set out in Section 5.4.

HoldCo may be exposed to increased litigation as a U.S. public company and a Nevada corporation, as the U.S. corporate legal environment is generally more litigious as compared to Australia. Under Nevada Revised Statutes 78.745 to 78.752, Nevada Rules of Civil Procedure 23.1 and applicable common law, a shareholder must meet certain eligibility and standing requirements to bring a derivative action, but settlement or dismissal of a derivative action requires the approval of the Court and notice to shareholders of the proposed dismissal.

Shareholders in the U.S. are entitled to commence class action suits on their own behalf and on behalf of any other similarly situated shareholders to enforce an obligation owed to the shareholders directly where the requirements for maintaining a class action under applicable Nevada Law or the Federal Rules of Civil Procedure have been met.

There is a risk that any material or costly dispute or litigation could adversely affect HoldCo’s reputation, financial performance or value.

Implementation of the Scheme may give rise to U.S. and Australian taxation consequences for certain Shareholders.

These taxation consequences are dependent on the personal circumstances of each Shareholder. Accordingly, each Shareholder should seek their own taxation advice prior to voting on the Scheme.

Shareholders who are tax residents in Australia and United States citizens and tax residents may refer to Sections 8.2 and 8.3 for a summary of certain potential tax implications of the Scheme.

Cenntro estimates that the cost of implementing the re-domiciliation as being approximately U.S.$1.4 million. These are one-off costs that have mostly been incurred by Cenntro as at the date of this Scheme Booklet.

Cenntro is a company incorporated in Australia admitted to the Nasdaq.

On Monday, 11 September 2023, Cenntro announced a proposal to re-domicile to the United States by way of a scheme of arrangement, involving HoldCo as the proposed acquirer and new ultimate parent company for the Cenntro Group. Immediately prior to that announcement, Cenntro and HoldCo entered into an agreement containing the key terms of the proposal (the Scheme Implementation Agreement). A copy of the Scheme Implementation Agreement is included as Attachment E.

If the Scheme is approved and implemented, all of the existing Shares will be transferred to HoldCo in exchange for the Scheme Consideration, and Cenntro will become a wholly owned subsidiary of HoldCo. Cenntro will then be de-listed from Nasdaq.

In conjunction with the Scheme, HoldCo is seeking a listing on Nasdaq. If the listing is approved, following implementation of the Scheme, HoldCo Shares will be traded on Nasdaq.

This Scheme Booklet contains important information that you should consider before voting on the Scheme Resolution. The Cenntro Board encourages you to read this Scheme Booklet in its entirety and recommends that you vote in favour of the Scheme Resolution.

This Section 3 contains an overview of the Scheme, a copy of which is included in Attachment C.

The key steps to implement the Scheme are:

These steps are discussed further below and in Section 7. The expected dates for the key steps are set out in the ‘Important dates and times’ section of this Scheme Booklet (but those dates are indicative only and subject to change).

If the Scheme is implemented, Eligible Scheme Shareholders will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be credited to each Eligible Scheme Shareholder’s account with the Exchange Agent. If you are a Street-name Holder, you will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be initially issued to the Clearance Nominee (DTC’s nominee) and held through the facilities of DTC.

Beneficial owners who hold their Shares electronically through a stockbroker or bank custodian are considered Street-name Holders. In the case of Street-name Holders, ownership of HoldCo Shares will be recorded in book entry form by your street name intermediary/custodian without the need for any additional action on your part. DTC will credit the respective DTC Participant (including your intermediary/custodian) with book entry interests in respect of the HoldCo Shares. The underlying HoldCo Shares will be issued to the Clearance Nominee, DTC’s nominee (the current registered legal holder of your Shares) in exchange for the Scheme Shares held by it.

If you:

your HoldCo Shares will be credited to your account with Cenntro’s Exchange Agent upon the Scheme becoming Effective.

Ineligible Foreign Shareholders will not be issued HoldCo Shares. Instead, the HoldCo Shares to which Ineligible Foreign Shareholders would otherwise be entitled to under the Scheme will be issued to the Sale Agent and sold through the Share Sale Facility, with the Share Sale Facility Proceeds being remitted to the Ineligible Foreign Shareholders.

Street-name Holders resident in jurisdictions outside of Australia and its external territories, New Zealand, Hong Kong, Singapore, China, Canada, United Kingdom, Cyprus or the United States are not considered Ineligible Foreign Shareholders. If you are a Street-name Holder, you will receive one HoldCo Share for each Scheme Share held as at the Record Date, which will be initially issued to the Clearance Nominee (DTC’s nominee) and held through the facilities of DTC.

The Scheme Consideration will be issued on the Implementation Date.

The HoldCo Shares are currently expected to trade on Nasdaq on the Implementation Date, subject to authorisation for listing being obtained from Nasdaq and official notice of issuance of HoldCo Shares by HoldCo.

The Implementation Date is currently expected to be Monday, 12 February 2024.

An account statement detailing the issue of HoldCo Shares can be despatched to Scheme Shareholders upon request after the Implementation Date.

Scheme Shareholders may be unable to trade until they receive the account statement confirming the number of HoldCo Shares held and their Account Number. It is the responsibility of each Scheme Shareholder to confirm their holding before trading in their securities. HoldCo Shareholders who sell their securities before they receive their account statement do so at their own risk.

Cenntro and HoldCo disclaim all liability (to the maximum extent permitted by law) to persons who trade HoldCo Shares before receiving their account statements.

HoldCo will issue the HoldCo Shares that cannot be issued to Ineligible Foreign Shareholders to the Sale Agent and sold for the benefit of the relevant person.

Cenntro will appoint the Sale Agent for the purpose of selling the above HoldCo Shares through the Share Sale Facility on Nasdaq following the Implementation Date.

Cenntro will, as soon as practicable, distribute to each Ineligible Foreign Shareholder their respective proportion of those net proceeds by (at its discretion):

Brokerage fees will be deducted from the sale proceeds of HoldCo Shares sold through the Share Sale Facility by the Sale Agent.

The final Share Sale Facility Proceeds will be remitted to the relevant Scheme Shareholders based on a volume weighted average price per HoldCo Share, so that each Scheme Shareholder entitled to such proceeds will receive the same price per HoldCo Share.

Having regard to the current trading volume of Shares on Nasdaq and to ensure that the sale of HoldCo Shares takes place in an orderly market and does not unnecessarily impact the price of HoldCo Shares, it is anticipated that the completion of the sale of HoldCo Shares through the Share Sale Facility and the distribution of the Share Sale Facility Proceeds may require several months. Interest will not be paid on any Share Sale Facility Proceeds. The Share Sale Facility Proceeds will be paid in U.S. dollars.

The Sale Agent will sell the HoldCo Shares at such a price and on such other terms as the Sale Agent determines in good faith (and at the risk of Ineligible Foreign Shareholders) having due regard for the desire to achieve the best price reasonably available at the time of sale.

There is no guarantee that there will be a liquid market for HoldCo Shares. Prices for HoldCo Shares may rise and fall during the sale period and will depend on many factors, including the demand for and supply of HoldCo Shares. Cenntro, HoldCo and the Sale Agent give no assurance as to the price that will be achieved for the sale of HoldCo Shares described above. The actual price achieved may be more or less than the market value of Cenntro Shares as at the date of this Scheme Booklet.

The payment of the Share Sale Facility Proceeds from the sale of HoldCo Shares will be in full satisfaction of the rights of Ineligible Foreign Shareholders.

On Thursday, 14 December 2023, the Court ordered that the Scheme Meeting be convened in accordance with the Notice of Scheme Meeting. The Notice of Scheme Meeting is set out as Attachment D. The Court order does not constitute an endorsement of, or any other expression of opinion on, the Scheme or this Scheme Booklet.

The purpose of the Scheme Meeting is for Shareholders to consider whether to approve the Scheme Resolution. Shareholders who are registered on the Register as of Tuesday, 23 January 2024 at 3.00am (EST), Tuesday, 23 January 2024 at 4.00pm (CST), and Tuesday, 23 January 2024 at 7.00pm (AEDT), are entitled to vote at the Scheme Meeting.

Further details on how to vote are provided in in the Notice of Scheme Meeting included as Attachment D.

The Scheme will only become Effective if it is approved by:

Approval by the requisite majorities of Shareholders requires the Scheme Resolution to be passed at the Scheme Meeting by:

U.S. backup withholding may apply to Share Sale Facility Proceeds payable to a U.S. Holder if such holder fails to provide its correct taxpayer identification number or otherwise fails to certify its exemption from backup withholding.

In conjunction with the implementation of the Scheme, HoldCo Shares will be listed on Nasdaq, subject to authorisation for listing being obtained from Nasdaq and official notice of issuance of HoldCo Shares from HoldCo.

If the Scheme is implemented and HoldCo Shares are authorised for listing on Nasdaq, trading in HoldCo’s Shares will commence on the Implementation Date. Once listing occurs, HoldCo Shareholders may trade their HoldCo Shares on Nasdaq.

The Cenntro Directors unanimously recommend that Shareholders vote in favour of the Scheme subject to the Independent Expert continuing to conclude the Scheme to be in the best interests of Shareholders.

The Cenntro Directors believe that the reasons to vote in favour of the Scheme outweigh the reasons to vote against.

See Section 2.2 above for key reasons for vote in favour of the Scheme and other relevant considerations for Shareholders.

In considering whether to vote in favour of the Scheme, the Cenntro Directors encourage you to:

Each member of the Cenntro Board intends to vote all Shares held by them or controlled by them in favour of the Scheme subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Cenntro.

Cenntro commissioned the Independent Expert to prepare a report on which the Scheme is, in the Independent Expert’s opinion, in the best interests of Scheme Shareholders.

The Independent Expert’s Report is contained in Attachment A. The Cenntro Board encourages you to read the Independent Expert’s Report in full before voting in favour of the Scheme Resolution.

The implementation of the Scheme is still subject to a number of Conditions Precedent. The Conditions Precedent are set out in full in clause 3.1 of the Scheme Implementation Agreement, a copy of which is set out in Attachment E.

The Scheme will not proceed unless all the Conditions Precedent are satisfied or waived (if applicable) in accordance with the Scheme Implementation Agreement. As at the Last Practicable Date, the Cenntro Directors are not aware of any reason why these Conditions Precedent would not be satisfied or waived with the agreement of HoldCo.

A summary of the Conditions Precedent is included in Section 7.2(a).

If the Scheme does not become Effective, Shareholders will retain their Shares and Cenntro will continue as a company domiciled in Australia, with its Shares trading on Nasdaq.

The costs of the Scheme have been estimated by Cenntro to be approximately U.S.$1.4 million. Approximately U.S.$0.4 million of these costs are expected to be payable by Cenntro during the period between the date of this Scheme Booklet and when the Scheme becomes Effective and is implemented.

As a Shareholder, you have the following choices available:

Vote in favour of the Scheme Resolution

To follow the unanimous recommendation of the Cenntro Directors, you should vote in favour of the Scheme Resolution at the Scheme Meeting on Thursday, 25 January 2024.

For a summary of how to vote on the Scheme Resolution, please refer to the Section “Overview of this Scheme Booklet” (commencing on page 11 of this Scheme Booklet)

Vote against the Scheme Resolution

If, despite the unanimous recommendation of the Cenntro Directors, you do not support the Scheme, you may vote against the Scheme Resolution at the Scheme Meeting on Thursday, 25 January 2024.

However, if all the Conditions Precedents for the Scheme is satisfied or waived (if applicable) and the Scheme becomes Effective, the Scheme will bind all Shareholders, including those who vote against the Scheme Resolution and those who do not vote at all.

Sell your Shares

The existence of the Scheme does not preclude you from selling some or all of your Shares on-market for cash, if you wish, provided you do so before close of trading on Nasdaq on the Effective Date (currently proposed to be Thursday, 2 February 2024).

Cenntro intends to apply to Nasdaq for the Shares to be suspended from official quotation from the close of trading on the Effective Date. You will not be able to sell your Shares on-market after this time.

Shareholders who sell some or all of their Shares:

Do nothing

Shareholders who elect to not vote at the Scheme Meeting on Thursday, 25 January 2024 or do not sell their Shares on-market will:

Under sections 169 and 173 of the Corporations Act, any Shareholder has a right to inspect, and to ask for a copy of, the Share Register which contains details of the names and addresses of each Shareholder.

Cenntro may require a Shareholder to provide reasons for their request prior to providing a copy of the Share Register, and a Shareholder must not use any information obtained for an improper purpose. A copy of the Share Register will be given to any Shareholder upon request and payment of the prescribed fee under the Corporations Act where Cenntro is satisfied that the details provided are not likely to be used for an improper purpose.

The terms of the Scheme provide that each Scheme Shareholder is taken to have authorised Cenntro to warrant to HoldCo that:

Under the terms of the Scheme, Cenntro undertakes that it will provide such warranty to HoldCo as agent and attorney of each Scheme Shareholder.

Subject to the Scheme becoming Effective, each Scheme Shareholder irrevocably appoints Cenntro and each of the Cenntro Directors and secretaries (jointly and each of them individually) as its attorney and agent for the purpose of:

No brokerage or stamp duty will be payable by Scheme Shareholders on the transfer of their Scheme Shares to HoldCo under the Scheme. However, if you participate in the Share Sale Facility, brokerage fees will be deducted from the final proceeds.

Except for tax file numbers and except as prohibited by law, all instructions, notifications or elections by each Shareholder to Cenntro binding or deemed binding between the Shareholder and Cenntro relating to Cenntro or Shares, including instructions, notifications or elections relating to:

will be deemed from the Implementation Date (except to the extent determined otherwise by HoldCo in its sole discretion) to be made by the Scheme Shareholder to HoldCo and to be a binding instruction, notification or election to, and accepted by, HoldCo in respect of any HoldCo Shares provided to that Scheme Shareholder until and unless that instruction, notification or election is revoked or amended in writing addressed to HoldCo or its agent.

On a date after the Implementation Date, HoldCo will apply for the termination of the official quotation of Shares on Nasdaq and for Cenntro to be removed from the official list of Nasdaq.

As at the date of this Scheme Booklet, Cenntro has:

As noted in Section 4.4, at the annual general meeting of Shareholders held on 1 September 2023, Shareholders resolved to approve a consolidation of the issued capital of Cenntro under section 254H of the Corporations Act on the basis that every 10 Shares be consolidated into one Share with effect from 1 December 2023. As a result of administration delays associated with effecting the consolidation via DTC, the 10:1 a Share consolidation was not effected until 8 December 2023 (EST). In connection with implementation of the consolidation, all fractions of Shares will be rounded up to the nearest whole Share on 15 December 2023 (EST). The numbers of Options, Warrants and Shares over which the Note is convertible into identified above are presented on a post-consolidation basis, meaning they have been adjusted on the same 10:1 basis as the Share consolidation such that they are exercisable over the same proportion of Shares as before the consolidation.

In processing the consolidation, all fractions of Options, Warrants and Shares were rounded up to the nearest whole Option, Warrant or Share (as applicable).

Cenntro and HoldCo intend to enter into binding agreements with each:

The number of:

To the extent that an Option Holder, Warrant Holder or Note Holder does not agree to replace their existing Options, Warrants or Notes (as the case may be) with HoldCo Options, HoldCo Warrants or HoldCo Notes (as the case may be) and the Scheme proceeds, HoldCo will consider undertaking other courses of action available to it, including (if available) the compulsory acquisition or cancellation of the Options, Warrants and / or Notes.

Alternatively, HoldCo may not take any action, in which case the Options, Warrants and Notes will continue on their current terms.

The Proposed Transaction will not otherwise result in an acceleration or vesting or change in material terms of any Options or Warrants.

The Merger Agreement contemplated that, among other related transactions, (i) all of the shareholders of Bendon would exchange all the outstanding ordinary shares of Bendon for Shares and (ii) Naked would merge into Merger Sub and continue as the surviving company under Nevada law, such that Bendon and Naked would become wholly-owned subsidiaries of Cenntro.

In particular, the Merger Agreement provided that each issued and outstanding share of Naked common stock issued and outstanding immediately prior to the effective time of the merger contemplated by the Merger Agreement were automatically converted into the right to receive a specified number of Shares. The Merger Agreement then set out the procedures which holders of the issued and outstanding shares of Naked common stock were required to follow in order to receive the Shares to which they were entitled (which included the surrender of the share certificates relating to those shares of Naked common stock).

Following the completion of the Merger Agreement, 37 holders of issued and outstanding shares of Naked common stock (Unexchanged Naked Holders) failed to surrender the share certificates relating to their shares of Naked common stock. Neither Cenntro nor the exchange agent under the Merger Agreement have current contact details for the Unexchanged Naked Holders and, accordingly, Cenntro has been unable to issue to the Unexchanged Naked Holders the Shares to which they are entitled (Unexchanged Naked Holders Shares). The aggregate number of Unexchanged Naked Holders Shares is 6².

As at the Last Practicable Date, the right of the Unexchanged Naked Holders to receive Unexchanged Naked Holders Shares remains unextinguished and perpetual.

Neither HoldCo nor Cenntro propose to take any action in relation to the Unexchanged Naked Holders Shares or the rights of Unexchanged Naked Holders under the Merger Agreement, meaning that those rights will continue on their current terms.

Should a Unexchanged Naked Holder validly surrender its share certificates relating to its shares of Naked common stock, Cenntro will issue to that holder the relevant number of Unexchanged Naked Holders Shares and HoldCo and Cenntro will subsequently consider either entering into a binding agreement with such Unexchanged Naked Holder to acquire such Unexchanged Naked Holders Shares, or compulsorily acquiring such Shares under the Corporations Act.

If you have questions in relation to the Scheme, you should refer to Section 1 (Frequently asked questions), visit the Cenntro website at www.cenntroauto.com or contact the Shareholder information line on 1300 918 436 (within Australia), +1 866 682 6148 (within the U.S. Toll Free), +1 781 896 1223 (outside the U.S.) or +61 3 9415 4322 (outside Australia) Monday to Friday between 8.30am to 5.00pm (AEDT) and 9.00am to 5.00pm (EST).

Alternatively, you can contact your financial, legal, taxation or other professional advisor.

Cenntro is an emerging designer, producer, distributor, and service provider of commercial vehicles powered by sustainable energy, electricity or hydrogen. Cenntro’s commercial vehicles are designed and made to serve a variety of fleets, corporate and governmental organisations in support of goods delivery, city services and other commercial applications. Cenntro has designed and developed five series of commercial vehicle models, Metro^®, Logistar™, LogiMax, Avantier, and Teemak, generating vehicle sales revenues of approximately U.S.$8.2 million for the year ended 31 December, 2022, primarily from sales of its Metro^® model. Cenntro has also developed iChassis, a programmable “smart” chassis that can be controlled by third-party software for various remotely controlled or autonomous driving applications. Cenntro intends to roll out these vehicles and products (including iChassis) across global markets, and leverage its technology, vehicle development, and vehicle distribution capabilities to become a leading provider in the electric commercial vehicle (ECV) market.

With the global trend toward reducing the number of internal combustion engine vehicles, electric-battery and fuel cell technologies stand out as strong alternatives. Battery costs have decreased significantly over the past decade and, in the long run, prices are expected to continue to fall. According to research service Bloomberg NEF (BNEF), lithium-ion battery pack prices decreased from above $1,100 per kilowatt-hour in 2010 to $137/kWh in 2020 in real terms, representing a decline of approximately 89%. Although battery pack prices have recently increased and may continue to increase in the near-term due to the rising price of lithium as a result of inflationary pressures contributed to by COVID-19 and other factors, Cenntro anticipates that battery prices will continue to decrease in the long-term. As public investment in the battery technology market continues to increase, Cenntro believes these cost reductions will continue to improve the economics of battery powered ECVs.

Cenntro has designed and developed a line of vehicle models to seek to meet market demand and which are fit for various commercial applications, which includes five series of commercial vehicle models that it intends to sell at scale on global markets.

Logistar™ Series are the vehicles Cenntro intends to manufacture for on-road applications with the gross vehicle weight rate (GVWR) under 19,500 lbs. Logistar™ Series will initially consist of Logistar 100 (LS100), Logistar 200 (LS200), Logistar 260 (LS260), Logistar 300 (LS300), and Logistar 400 (LS400). Cenntro believes that LS100, LS200, and LS260 will meet European Union regulatory requirements and will mainly target European markets, and LS300 and LS400 will meet U.S. regulatory requirements and will mainly target North American markets.

LogiMax™ Series are the vehicles Cenntro intends to introduce as vehicle models of U.S. Class 8 with GVWR over 26,000 lbs. Cenntro plans to implement two vehicle models in this series, being the LogiMax 800 (LM800) and LogiMax 864H (LM864H). LM800 will be powered by electricity and LM864H will be a hybrid model powered either by electricity or hydrogen. Cenntro believes that both the LM800 and LM864H will meet the U.S. regulatory requirements for North American markets.

Metro^® Series are the vehicle models of Metro and Metro L. Cenntro began pilot production of its first-generation, U.S. Class 1 (0-6,000 lbs.), electric light-duty commercial vehicle, the Metro^®, in 2018, and, as of 31 December 2022, Cenntro has delivered approximately 2,790 units of Metro^®. The Metro^® is a customisable ECV used in commercial applications such as city services, campus use and goods delivery. The Metro^® has been developed to be cost-effective and energy efficient, implementing a number of design elements including a lightweight structure and efficient power system. Cenntro is in process to develop a new generation of its Metro^® vehicle for better performance and efficiency.

Teemak™ Series are the vehicles Cenntro intends to introduce for off-road applications for utility or leisure use, and for agricultural and forestry uses.

Cenntro intends to scale the introduction of the iChassis™, an open-platform and programmable (“smart”) chassis product. The iChassis™ is designed to be a basic modular building block for use by automakers and special vehicle upfitters in the design of automated or autonomous driving vehicles. The Cenntro iChassis is intended to allow third-party developers to integrate detection devices (i.e., lidar, radar, ultra-sound, infrared and other sensory devices) and third-party or proprietary decision-making software to allow for vehicles based on the programmable chassis to be driven autonomously.

Cenntro intends to implement an asset-light manufacturing business models through which it either makes semi-knock down vehicle kits from its centralised manufacturing facilities which are then used for local final assembly (distributed manufacturing model) or works with automakers who will make completed vehicles that meet Cenntro’s design and specifications (OEM manufacturing model). With its distributed manufacturing model, some of Cenntro’s vehicle models have a modular design that allows for local assembly in small factory facilities.

With its OEM manufacturing model, Cenntro has engaged an automobile manufacturer, Dongfeng Motors Corporation, to produce vehicle kits and completed vehicles for it. In some cases, Cenntro provides technology and vehicle modules to the OEM contractors.

Cenntro believes its distributed manufacturing and OEM manufacturing methodologies allow it to execute its business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.

Cenntro has also leased five facilities in, Jacksonville and Freehold in United States, Changxing and Yangzhong in China, and Herne in Germany.

Cenntro has historically outsourced the vast majority of the marketing and sales of its vehicles to third party “channel partners” and relied substantially on private label channel partners to assemble the ECVs from vehicle kits. Cenntro believes a well-developed distribution and service infrastructure is very important to an automobile manufacturer and, therefore, intends to establish its own distribution and service in the future.

Cenntro believes an effective and efficient parts distribution system is important for vehicle after-market support and customer satisfaction. Cenntro has invested resources to, and is in the process of, building a cloud-based parts distribution system, to enable Cenntro to provide and deliver spare parts to its service providers and customers. Cenntro has setup two production-side parts warehouses in Changxing and Yangzhong, which store the parts produced or sourced locally and used to manufacture its ECVs. Cenntro has also leased four remote parts warehouses, located in Dusseldorf in Germany, Barcelona in Spain, and Freehold and Jacksonville in the U.S.

One of the key components in the ECV industry is the battery. Cenntro believes that the battery will be a key differentiator not just because of cost but also because of the technology going into the battery to extend the range and safety of ECVs.

Cenntro has leased a facility in Monterrey, Mexico in which Cenntro intends to install purposely built production lines to enable battery manufacturing.

As at the date of this Scheme Booklet, the Cenntro Board consists of the following persons:

Further information about the Directors, their experience and qualifications can be obtained by visiting the Cenntro website at www.cenntroauto.com.

As at the date of this Scheme Booklet, the senior management team of Cenntro consists of the following persons:

Further information about Cenntro’s senior management team, their experience and qualifications can be obtained by visiting the Cenntro website at www.cenntroauto.com.

As at 8 December 2023, Cenntro has the following securities on issue³:

At the annual general meeting of Shareholders held on 1 September 2023, Shareholders resolved to approve the ‘Stock Split Proposal’, comprising a consolidation of the issued capital of Cenntro under section 254H of the Corporations Act on the basis that every 10 Shares be consolidated into one Share with effect from 1 December 2023. As a result of administration delays associated with effecting the consolidation via DTC, the 10:1 Share consolidation was not effected until 8 December 2023 (EST). In connection with the implementation of the consolidation, all fractions of Shares will be rounded up to the nearest whole Share on 15 December 2023 (EST). The numbers of Options, Warrants and Shares over which the Note is convertible into identified in the table above are presented on a post-consolidation basis, meaning they have been adjusted on the same 10:1 basis as the Share consolidation such that they are exercisable over the same proportion of Shares as before the consolidation.

In processing the consolidation, all fractions of Options, Warrants and Shares were rounded up to the nearest whole Option, Warrant or Share (as applicable).

As at the Last Practicable Date, Cenntro has Shareholders in the following jurisdictions:

As at the Last Practicable Date, Cenntro had the following substantial Shareholders (being Shareholders who hold 5% or more of the Shares)⁴:

As at 8 December 2023, the Directors had the following Relevant Interests in Cenntro securities⁵:

Each Director intends to vote all Shares held or controlled by them in favour of the Scheme, subject to the Independent Expert continuing to consider the Scheme to be in the best interests of Shareholders.

No Director acquired or disposed of a Relevant Interest in any Share in the four month period ending on the date immediately prior to the date of this Scheme Booklet.

As at the date immediately prior to the date of this Scheme Booklet, the Directors had the following Relevant Interests in HoldCo securities:

No Director acquired or disposed of a Relevant Interest in any securities in HoldCo in the four month period ending on the date immediately prior to the date of this Scheme Booklet.

No payment or other benefit is proposed to be made or given to any Director, company secretary or executive officer of Cenntro as compensation for the loss of, or as consideration for or in connection with his or her retirement from, office in Cenntro in connection with the Scheme, other than in his or her capacity as a Shareholder.

There are no agreements or arrangements made between any Director and any other person in connection with, or conditional on, the outcome of the Scheme, other than in their capacity as a Shareholder.

None of the Directors have any interest in any contract entered into by HoldCo, other than in their capacity as a Shareholder.

None of the Directors have agreed to receive, or is entitled to receive, any benefit from HoldCo, which is conditional on, or is related to, the Scheme, other than in their capacity as a Shareholder.

A summary of the trading prices of Shares on Nasdaq for various periods leading up to, and following, announcement of the Scheme on Nasdaq is set out below.⁶

This Section 4.11 sets out summary financial information in relation to Cenntro for the purpose of this Scheme Booklet. The financial information has been extracted from Cenntro’s 2021 and 2022 Annual Reports.

The historical financial information of Cenntro in this Section 4.11 is presented in an abbreviated form and does not contain all the disclosures, presentations, statements or comparatives that are usually provided in an annual report prepared in accordance with the Corporations Act.

Cenntro considers that for the purposes of this Scheme Booklet, the historical financial information presented in an abbreviated form is more meaningful to Shareholders. The historical financial information of Cenntro has been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) (and not in accordance with Australian Accounting Standards (AAS) and International Financial Reporting Standards (IFRS)). Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

As noted above, the historical financial information in this Section 4.11 has been prepared in accordance with U.S. GAAP. As an Australian public limited company, Cenntro is subject to the Corporations Act, which requires that financial statements be prepared and audited in accordance with AAS and IFRS and lodged with ASIC. The historical financial information in this Section 4.11 is considered ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information.’ Such non-IFRS financial information may not be comparable to similarly titled information presented by other entities and should not be construed as an alternative to other financial information prepared in accordance with AAS or IFRS.

Cenntro believes that its historical financial information determined in accordance with U.S. GAAP, a non-IFRS measure, is useful in evaluating operational performance. Cenntro uses U.S. GAAP financial information to evaluate ongoing operations, for internal planning and forecasting purposes and for informing its investors based in the United States.

The historical financial information in this Section 4.11 is not a measurement of Cenntro’s financial performance under IFRS and should not be considered as an alternative to performance measures derived in accordance with IFRS.

By providing this non-IFRS financial information, together with the reconciliation, Cenntro believes it is enhancing Shareholders understanding of its business and results of operations, as well as assisting Shareholders in evaluating how Cenntro is executing its strategic initiatives. Cenntro cautions Shareholders that amounts presented in accordance with U.S. GAAP may not be comparable to similar measures presented in accordance with IFRS.

Further detail regarding Cenntro’s financial performance can be found in the audited financial statements for the years ended 31 December 2022 and 31 December 2021. Copies of these statements can be obtained from the SEC website at www.sec.gov or Cenntro website at www.cenntroauto.com.

The following table presents the historical consolidated statement of profit or loss and other comprehensive income for Cenntro for the financial years ended 31 December 2021 and 31 December 2022.

The following table presents the historical consolidated statement of financial position for Cenntro for the financial years ended 31 December 2021 and 31 December 2022.

The following table presents the historical consolidated statement of cash flows for Cenntro for the financial years ended 31 December 2021 and 31 December 2022.