In evaluating us and our common stock, we urge you to carefully consider the risks and other information set forth below and elsewhere in this Report, as well as the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and other reports that we have filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. Risks related to our liquidity and indebtedness Our history of operating losses and negative cash flows from operations has raised substantial doubt about our ability to continue as a going concern. We have expressed substantial doubt about our ability to continue as a going concern due to our history of operating losses and negative cash flows from operations. Our unaudited consolidated financial statements for the six months ended June 30, 2026 have been prepared assuming we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the normal course of business. As of June 30, 2026, we had an accumulated deficit of $1,086.0 million and stockholders’ equity of $543.1 million. During the six months ended June 30, 2026, we used $33.3 million of cash in operating activities, an unfavorable change of $77.6 million from $44.3 million generated in the prior-year period, driven in part by a 28.8% decline in revenue and a decrease in gross margin from 36.0% to 30.4%. In addition, as of June 30, 2026, $104.2 million of our $118.6 million of borrowings were due within the next 12 months, and the $41.7 million of bonds payable issued by our Chinese subsidiary to a Chinese governmental entity is repayable on or before January 31, 2027. Our ability to continue operating as a going concern depends on, among other things, our ability to generate sufficient revenue and cash flows from operations, the rate of revenue growth, our ability to manage operating expenses, our ability to refinance or extend maturing borrowings and our ability to obtain additional financing. Factors that could further adversely impact our future revenue and cash generation include, but are not limited to, reduced customer demand, declining sales volume, rising material costs, supply chain disruptions, increased competition, adverse macroeconomic conditions and the loss of key customer relationships. If we are not successful in maintaining demand for our products, or if operating conditions further constrain our cash generation, we may experience additional adverse impacts to revenue, profitability and liquidity. The substantial doubt about our ability to continue as a going concern may adversely affect the price of our common stock, our ability to raise capital or enter into strategic transactions and partnerships and market perception. In particular, our financial condition may cause customers, suppliers, and other partners to reduce their purchases of our products, demand more favorable payment or contract terms, limit the inventory or orders they are willing to commit to, or cease doing business with us altogether. Any such actions could further reduce our revenue, disrupt operations and materially and adversely affect our liquidity and results of operations. Our substantial indebtedness and debt service obligations could adversely affect our competitiveness, our liquidity, our operations and our ability to obtain additional financing. As of June 30, 2026, our bank borrowings were $118.6 million, our bonds payable were $41.7 million and $104.2 million of our borrowings were due within the next 12 months. Our bonds payable consist of convertible bonds issued by 42 Table of Contents our Chinese subsidiary to a Chinese governmental entity, and the entire outstanding $41.7 million balance is repayable, together with accrued interest, on or before January 31, 2027. We pledged our 12.39% equity holding in our Chinese subsidiary to the lender to facilitate the issuance of these bonds, and the applicable interest rate increases to 12% if we default in repaying the bonds when due. Our total current liabilities included other current liabilities of $197.9 million. We also had outstanding purchase commitments of $37.5 million and capital commitments of $13.2 million, of which $10.7 million were due within 12 months. During the six months ended June 30, 2026, we secured $69.4 million of bank borrowings, of which $48.2 million represented refinanced debt. There can be no assurance that we will be able to repay our indebtedness when due, or that we will be able to refinance our indebtedness, in whole or in part, on acceptable terms, or at all. Our high level of indebtedness and corresponding cash debt service obligations could, among other things: •heighten our vulnerability to downturns in our business, adverse general economic conditions, and competitive pressures in the battery technology market; •require us to dedicate a larger portion of our cash flow from operations to interest and principal payments on near-term maturities, limiting the availability of cash for other purposes; •expose us to the loss of a portion of our equity interest in our principal operating subsidiary in China, or to dilution of that interest, if we fail to repay the bonds at maturity and the bondholder elects to dispose of the pledged equity interests or to convert the bonds into equity interests of our Chinese subsidiary; •limit our ability to invest in our business and future business opportunities, including the completion of the Clarksville expansion; •limit our ability to refinance our indebtedness, particularly given our going-concern qualification and negative operating cash flows; •limit our flexibility in planning for, or reacting to, changes in our business and industry; •increase our cost of borrowing; •place us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged; and •impair our ability to obtain additional financing for working capital, capital expenditures, debt repayments or general corporate purposes. Our ability to meet our cash requirements, including our debt service obligations, is dependent upon our ability to maintain and improve our operating performance, which is subject to general economic and competitive conditions and to financial, business and other factors, many of which are beyond our control. Our existing liquidity and capital resources may not be sufficient to sustain our business and service our debt obligations, and if our operating results do not meet our expectations or if we experience adverse developments that we do not currently anticipate, we could face liquidity constraints that materially and adversely affect our business, results of operations and financial condition. Our plans to mitigate the substantial doubt may not be effectively implemented, and cost-reduction and restructuring actions may themselves strain near-term liquidity. In response to the substantial doubt about our ability to continue as a going concern, management has developed plans intended to improve our liquidity position, including: •implementing operating cost reduction initiatives across all areas of the business; •reducing or deferring certain discretionary capital expenditures; •negotiating extensions or restructurings of debt obligations within our China operating entities; •refinancing short-term bank borrowings as they mature; and •evaluating additional financing alternatives, including potential capital-raising transactions and strategic opportunities. Certain elements of these plans have not been fully implemented and depend on factors outside our control, including the willingness of lenders to agree to extensions or restructurings, the availability of financing on acceptable terms and the successful execution of cost-reduction initiatives. Management has concluded that these plans cannot be deemed probable of being effectively implemented and, accordingly, substantial doubt about our ability to continue as a 43 Table of Contents going concern has not been alleviated. The cash costs associated with restructuring actions, including severance payments, facility exit costs and contract termination fees, may further strain our near-term liquidity and could accelerate the timing of a covenant breach or the need for additional financing. There can be no assurance that the initiatives described above will produce the expected benefits or will be sufficient to allow us to maintain liquidity and operations in the ordinary course. Additional financing may not be available on acceptable terms, or at all, and we may be required to significantly reduce, restructure or cease operations or pursue alternatives including proceedings under the U.S. Bankruptcy Code. We are evaluating additional financing alternatives, including potential capital-raising transactions through debt or equity securities. However, recent equity market conditions and our business performance have rendered equity funding unfavorable as a primary liquidity mechanism. Our current indebtedness and the restrictive covenants in our loan agreements may further limit the types and terms of additional financing available to us. We may not be able to timely secure additional financing on favorable terms, or at all, due to, among other things, our history of operating losses and negative cash flows, the substantial doubt about our ability to continue as a going concern, general macroeconomic conditions, market volatility and the terms of our existing indebtedness. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could suffer significant dilution. If we are unable to obtain adequate financing when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited. Without additional sources of financing, our ability to continue as a going concern would be materially and adversely impacted, and we may be required to significantly reduce, restructure or cease our operations or to pursue other alternatives, including, but not limited to, commencing a case under the U.S. Bankruptcy Code. Any such outcome would have a material adverse effect on holders of our common stock, who would likely lose all or substantially all of their investment. The substantial doubt about our ability to continue as a going concern may adversely affect our relationships with customers, suppliers and partners, our ability to attract and retain qualified personnel and our ability to raise capital or enter into strategic transactions. The substantial doubt about our ability to continue as a going concern, and any public disclosure thereof, may adversely affect the willingness of customers, suppliers, and partners to do business with us. In particular, our financial condition may cause customers and partners to reduce their purchases of our products, demand more favorable payment or contract terms, seek alternative suppliers or cease doing business with us altogether. Suppliers may tighten credit terms, require prepayment or cash-on-delivery, reduce allocation of components or decline to extend trade credit. In addition, the substantial doubt may make it more difficult for us to attract and retain qualified personnel, as current and prospective employees may seek employment with companies perceived to be more financially stable. The loss of key personnel in engineering, manufacturing, sales, or management could disrupt operations and impair our ability to execute on our business strategy. The substantial doubt may also impair our ability to raise capital, enter into strategic transactions or partnerships or negotiate with counterparties on favorable terms. Any of these effects could reduce revenue, increase costs, disrupt operations or further adversely affect our liquidity, financial condition and results of operations. Restrictive covenants, the need for waivers or amendments, cross-default provisions, and acceleration of our indebtedness could adversely affect our liquidity. Our loan agreements, credit agreements, and bonds payable contain restrictive covenants and customary events of default that may limit our operational and financial flexibility. As of June 30, 2026, the Company was in compliance with all material terms and covenants under its loan agreements, credit agreements, and bonds. However, such compliance does not alleviate the substantial doubt about our ability to continue as a going concern. Our projected cash flows may not be sufficient to meet our debt obligations over the next twelve months, and our ability to satisfy the $104.2 million of near-term maturities depends on the continued refinancing or extension of maturing borrowings. Such refinancing or extension depends on negotiations with lenders and other factors outside our control, and management has concluded that the refinancing plan cannot be deemed probable. As of June 30, 2026, assets with an aggregate carrying value of $183.2 million were pledged to secure our bank facilities, and $19.8 million of machinery and equipment was separately pledged to secure bank acceptance notes. Outstanding liens totaled $1.8 million. 44 Table of Contents Our debt arrangements contain cross-default provisions whereby a default under one agreement could result in default under the agreements covering other borrowings. The occurrence of a default under any of our borrowing arrangements would permit our lenders to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable. If our lenders accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets or liquidity to repay those borrowings. Future non-compliance with financial covenants may limit our access to existing facilities, require us to seek waivers or amendments that may not be available on acceptable terms or at all or result in an acceleration of debt obligations, any of which would further adversely impact liquidity. If we are unable to meet our liquidity requirements, we could be forced to sell assets, restructure or refinance our debt, or raise additional capital on unfavorable terms. Our ability to meet our liquidity requirements depends in part on our ability to generate cash from operations, refinance or extend maturing borrowings, and obtain additional capital. As of June 30, 2026, cash held by our Chinese subsidiaries ($39.7 million) and European subsidiaries ($23.5 million) cannot currently be repatriated to fund our U.S. operations or the Clarksville expansion due to foreign regulatory restrictions, adverse tax consequences, and localized working capital needs. As a result, the cash and cash equivalents available to fund our U.S. operations and capital commitments are substantially less than our consolidated cash balance of $127.8 million. If we are unable to generate sufficient operating cash flow or obtain additional financing, we could be forced to sell assets, including assets previously held for sale, restructure or refinance our debt or raise additional capital through sales of equity or debt on terms that may be dilutive or otherwise unfavorable. We have previously funded U.S. investment requirements from held-for-sale asset proceeds. We may be unable to take any of these actions on satisfactory terms, in a timely manner, or at all, due to, among other things, our high level of indebtedness, our operating performance and the restrictions in our existing debt agreements. Any of these actions may not be sufficient to allow us to service our debt obligations or maintain our operations, and our failure to generate sufficient operating cash flow to pay our debt obligations could have a material adverse effect on our business, financial condition and results of operations. We may not remain in compliance with the continued listing requirements for The Nasdaq Stock Market. If we do not maintain compliance, or regain compliance following any period of non-compliance, our common stock may be delisted, which could affect the market price and liquidity for our common stock and reduce our ability to raise additional capital. Our common stock is listed on The Nasdaq Capital Market. In order to maintain that listing, we must satisfy Nasdaq’s continued listing requirements, including the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Beginning on July 13, 2026, the closing bid price of our common stock has been below $1.00 per share. We anticipate that, if the closing bid price of the common stock remains below $1.00 per share for 30 consecutive business days, we will receive a noncompliance letter from the Listing Qualifications Staff of the Nasdaq notifying us that we are not in compliance with the Minimum Bid Price Requirement. As of the date of this filing, we have not received any such letter from Nasdaq. We will continue to monitor the closing bid price of our common stock and, if we become non-compliant, will seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance period. Any non-compliance may be costly, divert management’s time and attention, and could have a material adverse effect on our business, reputation, financing and results of operations. A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, materially adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of our common stock may decline further and stockholders may lose some or all of their investment. Declines in our market capitalization or operating performance may result in material non-cash impairment charges. As of June 30, 2026, our long-lived assets had a carrying amount of $537.8 million. We assess our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When a triggering event is identified, we compare the undiscounted estimated future cash flows from the operation and eventual disposition of the asset group to its carrying amount. If the carrying amount exceeds the 45 Table of Contents undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. During the six months ended June 30, 2026, we recorded a $24.0 thousand impairment loss on long-lived assets. However, our long-lived asset base of $537.8 million remains substantial relative to our market capitalization and recent operating cash flows. Declines in market capitalization, revenue, operating performance or other adverse changes in circumstances, including further deterioration of the business outlook, sustained declines in sales volume or inability to execute on cost-reduction initiatives, may indicate that the carrying amount of our long-lived assets is not recoverable and could result in material non-cash impairment charges in future periods, which could have a material adverse effect on our financial condition and results of operations. As of June 30, 2026, we had deferred tax assets of $5.4 million. The going-concern conclusion and our recent operating losses may constitute significant negative evidence regarding the recoverability of our deferred tax assets, which could require an increase in the valuation allowance and result in an additional non-cash charge to income tax expense.