DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2026

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

5. DISCONTINUED OPERATIONS

On March 18, 2026, the Group entered into an agreement to dispose its interests in Chijet Inc. and its subsidiaries (the “Disposed Group”) to an unrelated third party for a cash consideration of US$1. The disposal was completed on March 20, 2026. As of June 30, 2026, the Disposed Group has been fully disposed of and no assets or liabilities related to the discontinued operations remained in the Company’s consolidated balance sheets. Accordingly, the gain or loss on disposal has been recognized in the results of discontinued operations for the six months ended June 30, 2026. The Disposed Group represented the Company’s new energy vehicle business and constituted a strategic shift that had a major effect on the Company’s operations and financial results, as it generated substantially all of the Company’s historical revenues. For a discussion of the accounting policies applied to the classification and measurement of the disposal group, and the significant estimates involved, see Note 2(c) and Note 2(f).

For the period from January 1, 2026 through the disposal date, the Disposed Group incurred a net loss from operations of approximately US$5.6 million. Upon completion of the disposal, the Company recognized a gain on disposal of approximately US$258.8 million. The US$1 consideration represented the equity consideration for the Disposed Group. Immediately prior to disposal, the Disposed Group had total assets of approximately US$465.6 million and total liabilities of approximately US$723.5 million, resulting in net liabilities of approximately US$257.9 million. Accordingly, the gain on disposal arose principally from the derecognition of the Disposed Group’s net liabilities upon loss of control, rather than from the cash consideration received. The gain also reflects the derecognition of non-controlling interests and the reclassification of accumulated other comprehensive income attributable to the Disposed Group.

The results of discontinued operations for the period from January 1, 2026 through March 20, 2026 and the six months ended June 30, 2025 consisted of:

		For the Period Ended				For the Six Months Ended
		March 20, 2026				June 30, 2025
		US$’000				US$’000
		(Unaudited)				(Unaudited)
Revenues		$	432			$	599
Less: Cost of revenues			(420	)			(7,760	)
Gross profit (loss)			12				(7,161	)
Total operating expenses			1,992				59,065
Loss from discontinued operations			(1,980	)			(66,226	)
Total other (loss) income, net			(3,631	)			6,834
Loss from discontinued operations before income taxes			(5,611	)			(59,392	)
Income tax expenses from operations			-				-
Net loss from discontinued operations		$	(5,611	)		$	(59,392	)

Assets and liabilities of discontinued operations as of March 20, 2026 and December 31, 2025 consisted of:

		March 20, 2026				December 31, 2025
		US$’000				US$’000
		(Unaudited)
Cash and cash equivalents		$	566			$	799
Restricted cash			141				139
Accounts and notes receivable, net			1,030				584
Accounts and notes receivable from related parties, net			92				92
Inventory, net			4,437				4,713
Amounts due from related parties			30,853				32,087
Other current assets			49,789				49,511
Other current assets from related parties			35				34
Current assets held for sale			35,365				34,821
Property, plant and equipment, net			122,730				120,843
Intangible assets, net			131,340				129,323
Land-use-right, net			79,587				78,365
Long-term investments			3,537				3,483
Goodwill			2,779				2,736
Other assets			3,300				3,249
Total assets of discontinued operations			465,581				460,779

Accounts and notes payable			18,907				18,661
Accounts and notes payable to related parties			46,011				45,304
Loans attributable to related parties			281,627				277,302
Contract liabilities			2,575				2,473
Contract liabilities to related parties			936				922
Long-term payables, current			100,875				99,326
Accruals and other current liabilities			86,138				83,835
Accruals and other current liabilities to related parties			118,912				113,081
Accrued post-employment and termination benefits			63,574				64,366
Other liabilities			3,929				3,832
Total liabilities of discontinued operations			723,484				709,102

Total net assets		$	(257,903	)		$	(248,323	)

Reconciliation to gain on disposal:
Total cash consideration received		$	-
Noncontrolling interest derecognized on deconsolidation			3,777
Accumulated other comprehensive income reclassified on disposal			(2,852	)
Less: Total net assets of the disposed group			(257,903	)
Gain on sale of discontinued operations, net of income tax		$	258,828

Net cash flows attributable to discontinued operations were as follows:

		For the Period Ended				For the Six Months Ended
		March 20, 2026				June 30, 2025
		US$’000				US$’000
		(Unaudited)				(Unaudited)
Net cash provided by operating activities		$	3,679			$	3,300
Net cash used in investing activities			(707	)			(261	)
Net cash used in financing activities			-				(1,789	)
Net increase in cash and cash equivalents		$	2,972			$	1,250