Thunder Power Holdings, Inc 10-Q for FY2025 Q3
Thunder Power Holdings, Inc. (AIEV)
About this 10-Q
Thunder Power Holdings, Inc filed this 10-Q on November 13, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $428.14K
- compared with a net loss of $912.32K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.02 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | Emerging growth company |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
As of November 11, 2025, 70,724,664 shares of the registrant’s
common stock were issued and
Thunder Power Holdings, Inc.
TABLE OF CONTENTS
| PAGE NUMBER | ||
| PART I - FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 34 |
| Item 4. | Controls and Procedures | 34 |
| PART II - OTHER INFORMATION | 35 | |
| Item 1. | Legal Proceedings | 35 |
| Item 1A. | Risk Factors | 35 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 3. | Defaults upon Senior Securities | 35 |
| Item 4. | Mine Safety Disclosures | 35 |
| Item 5. | Other Information | 35 |
| Item 6. | Exhibits | 36 |
| SIGNATURES | 37 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include those that express a belief, expectation or intention, as well as those that are not statements of historical fact. Forward-looking statements include information regarding our future plans and goals, as well as our expectations with respect to:
| ● | Our business strategy and future growth prospects; |
| ● | Our industry; |
| ● | Our future profitability, cash flows and liquidity; |
| ● | Our financial strategy, budget, projections and operating results; |
| ● | The amount, nature and timing of our capital expenditures and the impact of such expenditures on our performance; |
| ● | The availability and terms of capital; |
| ● | Our research, development and production activities; |
| ● | The market for our future products and services; |
| ● | Competition and government regulations; |
| ● | General economic conditions. |
These forward-looking statements may be accompanied by words such as “believe,” “budget,” “estimate,” “anticipate,” “expect,” “intend,” “plan,” “may,” “likely,” “will,” “future,” “potential,” “project,” “predict,” “pursue,” “target,” “seek,” “objective,” “continue,” “would,” “could” or “should,” or, similar expressions that are predictions of or indicate future events or trends that do not relate to historical matters.
The forward-looking statements in this Quarterly Report speak only as of the date of this Quarterly Report, or such other date as specified herein. We disclaim any obligation to update these statements unless required by law, and we caution you not to place undue reliance on them. Forward-looking statements are not assurances of future performance and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the following:
| ● | Competitive conditions in our industry; |
| ● | A decline in demand for electronic vehicles; |
| ● | The price and availability of competitor’s products and services, including those manufactured or provided by manufacturers of non-electric vehicles; |
| ● | Our ability to obtain permits, approval and authorizations from governmental and third parties, and the effect of or changes to U.S. government regulations; |
| ● | Changes in availability and cost of capital; |
| ● | The price and availability of debt and equity financing (including changes in interest rates); |
ii
| ● | Our ability to finance, consummate, integrate and realize the benefits expected from our past or future acquisitions, including related synergies; |
| ● | Uncertainty related to the timing, pace and extent of an economic recovery in the United States and elsewhere, which in turn will likely affect demand for our products and services; |
| ● | Changes in general economic and geopolitical conditions; |
| ● | Inflationary factors, such as increases in labor costs, material costs and overhead costs; |
| ● | Our ability to successfully implement our business plan; |
| ● | Our ability to complete growth projects on time and on budget; |
| ● | Introduction of new technologies or services by competitors in our industry, including using new technologies subject to patent or other intellection property protections; |
| ● | Operating hazards, natural disasters, weather-related delays and other matters beyond our control; |
| ● | Acts of terrorism, war or political or civil unrest in the United States or beyond; |
| ● | Loss or corruption of our information or a cyberattack on our computer systems; |
| ● | Federal, state and local regulations impacting any aspect of our research, production and development activities, including public pressure on governmental bodies and regulatory agencies to regulate our industry; |
| ● | The effects of existing and future laws and governmental regulations (or the interpretation thereof) on us, and on our current or future suppliers; and |
| ● | The effects of any future litigation. |
Our forward-looking statements speak only as of the date they were made and, except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements because of new information, future events or other factors. All of our forward-looking information involves risks and uncertainties that could cause actual results to differ materially from the results expected. For important information, including identification of factors that could cause actual results to differ materially from those anticipated in these forward-looking statements, please refer to the “Risk Factors” section as described in the final proxy statement/prospectus pursuant to rule 424(b)(3) filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2025 and in other filings made by the Company with the SEC from time to time.
CERTAIN TERMS
References in this Quarterly Report to “we,” “us,” “our,” or the “Company” refer to Thunder Power Holdings, Inc. following the consummation of the Business Combination (as defined below) between the Company (f/k/a “Feuture Light Acquisition Corporation”) and Thunder Power Holdings Limited, a British Virgin Islands company. References to our “management” or our “management team” refer to our officers and directors. References to “TP Holdings” refer to Thunder Power Holdings Limited, a British Virgin Islands company, prior to the consummation of the Business Combination. References to “FLFV” refer to Feutune Light Acquisition Corporation, a Delaware blank check company, prior to the consummation of the Business Combination. References to the “Sponsor” refer to Feutune Light Sponsor LLC, the sponsor of FLFV. References to the “Merger Sub” refer to Feutune Light Merger Sub, Inc. prior to the consummation of the Business Combination. References to the “Business Combination” or “Merger” refer to the business combination between FLFV, TP Holdings and Merger Sub, pursuant to an Agreement and Plan of Merger (as amended on March 19, 2024 and April 5, 2024, the “Merger Agreement”).
iii
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THUNDER POWER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2025 and December 31, 2024
(Expressed in U.S. dollar, except for the number of shares)
| September 30, 2025 | December 31, 2024 | |||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Short-term investments | ||||||||
| Prepaid expenses for forward purchase contract | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Right of use assets | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Amount due to related parties | $ | $ | ||||||
| Other payable and accrued expenses | ||||||||
| Lease liabilities, current | ||||||||
| Underwriter fee payable | ||||||||
| Total Current Liabilities | ||||||||
| Lease liabilities, non-current | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 12) | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock ($ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated loss | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
1
THUNDER POWER HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS
For the three and nine months ended September 30, 2025 and 2024
(Expressed in U.S. dollar, except for the number of shares and loss per share)
| For three months ended September 30, | For nine months ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Other expenses, net | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||
| Foreign currency exchange (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expenses | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency adjustments | ( | ) | ||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares – basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
2
THUNDER POWER HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the three and nine months ended September 30, 2025 and 2024
(Expressed in U.S. dollar, except for the number of shares)
| Common stock | Additional | Accumulated other | Total | |||||||||||||||||||||
| Number of stock | Amount | paid-in capital | Accumulated loss | comprehensive income (loss) | shareholders’ equity | |||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Capital injection from shareholders | ||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Capital injection from shareholders | ||||||||||||||||||||||||
| Reverse recapitalization (Note 1) | ||||||||||||||||||||||||
| Issuance of common stock to a financial advisor | ( | ) | ||||||||||||||||||||||
| Issuance of common stock to independent directors | ||||||||||||||||||||||||
| Share-based compensation | — | |||||||||||||||||||||||
| Settlement of working capital loans | ||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Payment of offering cost | — | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of ordinary shares pursuant to forward purchase contracts | ( | ) | ||||||||||||||||||||||
| Issuance of ordinary shares pursuant to a private placement | ( | ) | ||||||||||||||||||||||
| Share-based compensation to a non-employee (Note 10) | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Foreign exchange adjustments | — | |||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Foreign exchange adjustments | — | |||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Foreign exchange adjustments | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Reversal of exercise tax payable | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Foreign exchange adjustments | — | |||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
THUNDER POWER HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2025 and 2024
(Expressed in U.S. dollar)
| For nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities: | ||||||||
| Purchase of short-term investments | ( | ) | ||||||
| Cash acquired in reverse capitalization | ||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Subscription fees received from shareholders | ||||||||
| Payment of extension loans | ( | ) | ||||||
| Borrowings from related parties | ||||||||
| Repayment of borrowings to related parties | ( | ) | ||||||
| Payment of offering cost | ( | ) | ||||||
| Proceeds of prepayment shortfall under forward purchase contract | ||||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rates on cash | ||||||||
| Net increase (decrease) in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income tax | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Transfer of advance of subscription fees from shareholders to equity | $ | $ | ||||||
| Payable of expenses directly related to the business combination | $ | $ | ||||||
| Share based compensation to a nonemployee as part of offering cost | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
4
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS DESCRIPTION
History of Thunder Power Holdings Limited (“TP Holdings”)
TP Holdings is a company
incorporated under the laws and regulations of the British Virgin Islands with limited liability on
TP Holdings has one wholly-owned subsidiary, Thunder Power New Energy Vehicle Development Company Limited (“TP NEV”) which was established in accordance with laws and regulations of British Virgin Islands on October 19, 2016.
TP Holdings together with TP NEV, are engaged in design, development and manufacturing of high-performance electric vehicles. As of September 30, 2025 and December 31, 2024, its operations activities were carried out in Taiwan and its management team are currently located in Taiwan and USA.
History of Feutune Light Acquisition Corporation (“FLFV”)
FLFV is a blank check company incorporated as a Delaware company on January 19, 2022. FLFV was formed for the purpose of entering into a merger, stock exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses. On July 3, 2023, FLFV incorporated Feutune Light Merger Sub, Inc (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of FLFV. Merger Sub is a holding company with no operations.
Reverse recapitalization
On June 21, 2024, FLFV consummated its business combination with TP Holdings (the “Business Combination”), pursuant to that certain Agreement and Plan of Merger, dated as of October 26, 2023 (as amended on March 19, 2024 and April 5, 2024, the “Merger Agreement”). The combined company changed its name to “Thunder Power Holdings, Inc.” (the “Company”).
Upon closing of the Business
Combination, the Company acquired all of the issued and outstanding securities of TP Holdings in exchange for (i)
Immediately after giving
effect to the Business Combination, there were (i)
We also capitalized offering
cost of $
Following the consummation of the Business Combination, the combined Company’s common stock began trading on the Nasdaq Global Market (the “Nasdaq”) under the symbol “AIEV” on June 24, 2024.
5
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
The reverse recapitalization is equivalent to the issuance of securities by TP Holdings for the net monetary assets of FLFV, accompanied by a recapitalization. The Company debited equity for the fair value of the net liabilities of FLFV. In the subsequent financial statements after the Business Combination, the amounts of assets and liabilities for the period before the reverse recapitalization in financial statements, are presented as those of TP Holdings and recognized and measured at their pre-combination carrying amounts. The equity account of TP Holdings was carried forward in the reverse recapitalization, subject to adjustments to reflect the par value of the outstanding capital stock of FLFV.
As part of the Business Combination,
the Company issued
Initial Insiders were comprised of Feutune Light Sponsor LLC (the “Sponsor”), US Tiger Securities, Inc. (“US Tiger”) and certain officers and directors of the Company. The Private Shareholders referred to the Sponsor and US Tiger. The Public Shareholders referred to the shareholders who held the public shares that were issued in the initial public offering of FLFV.
Upon closing of the Business
Combination, the Company issued an aggregated
In connection with the Business
Combination, FLFV engaged a third party financial advisor to assist FLFV in locating target businesses, holding meetings with its
shareholders to discuss a potential business combination and the target business’ attributes, introduce FLFV to potential investors
that are interested in purchasing securities, assist FLFV in obtaining shareholder approval for the business combination and assist with
press releases and public filings in connection with a business combination. On June 21, 2024, the Company issued
Entry into share exchange agreement
On December 19, 2024, the
Company entered into a Share Exchange Agreement (the “Agreement”) with certain shareholders (the “TW Company Shareholders”)
of Electric Power Technology Limited, a Taiwan corporation (“TW Company”). On January 27, 2025, the Company and TW Shareholders
have agreed to execute an amendment to the Agreement (the “Amendment”, and together with the Agreement, the “Amended
Agreement”). Pursuant to the Amended Agreement, TW Company Shareholders will exchange
The closing of the Exchange is subject to customary conditions, including receipt of all necessary regulatory approvals and the approval of the Company’s shareholders. The Agreement contains customary representations, warranties and covenants by the parties. The Agreement may be terminated: (1) by mutual consent of the parties; (2) by either party upon material breach by the other party that remains uncured for 10 days after notice; (3) if the closing has not occurred within 90 days of signing (subject to extension for regulatory approvals); or (4) by either party if a court or regulatory authority permanently enjoins the transaction. The closing must occur no later than October 31, 2025 according to the Amended Agreement. While the Company has not received any indication from any of its contractual parties to end the transaction it intends to enter into a supplemental agreement to extend the term of the Amended Agreement.
On April 17, 2025, the Nasdaq Stock Market LLC (the “Nasdaq”)
notified the Company that the Nasdaq Hearings Panel (the “Panel”) has determined to affirm the denial of the Company’s
request to continue its listing of the Company’s common stock, par value $
6
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), as determined by the Financial Accounting Standards Board (“FASB”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
Certain information and note disclosures normally included in the condensed consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. As such, the information included in these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements as of December 31, 2024 that was issued on March 31, 2025. In the opinion of the Company’s management, these unaudited condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of September 30, 2025 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year ending December 31, 2025. The Company’s reporting currency is the U.S. Dollar.
Basis of consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.
Fair value of financial instruments
The Company’s financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are described below:
| Level 1 — | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| Level 2 — | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |
| Level 3 — | inputs to the valuation methodology are unobservable and significant to the fair value. |
As of September 30, 2025 and December 31, 2024, financial instruments of the Company primarily comprised of current assets and current liabilities including cash, short-term investments, other current assets, amount due to related parties, other payables, lease liabilities and underwriter fee payable. The carrying amount of these current assets and current liabilities approximate their fair values because of the short-term nature of these instruments.
7
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet.
The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”).
In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of shareholders’ equity.
Translation of amounts from TWD into US$ has been made at the following exchange rates for the respective periods:
| September 30, 2025 | December 31, 2024 | |||||||
| TWD exchange rate for balance sheet items, except for equity accounts | ||||||||
| For nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| TWD exchange rate for items in the statements of operations and comprehensive loss, and statements of cash flows | ||||||||
Prepaid expenses for forward purchase contract
On June 11, 2024, FLFV and
TP Holdings entered into an agreement with (i) Meteora Capital Partners, LP (“MCP”), (ii) Meteora Select Trading Opportunities
Master, LP (“MSTO”), and (iii) Meteora Strategic Capital, LLC (“MSC” and, collectively with MCP and MSTO, the
“Seller”, or, the “Meteora”) (the “Forward Purchase Agreement”). For purposes of the Forward Purchase
Agreement, (i) FLFV is referred to as the “Counterparty” prior to the consummation of the Business Combination, while the
Company is referred to as the “Counterparty” after the consummation of the Business Combination and (ii) “Shares”
means shares of the Class A common stock, par value $
Pursuant to the terms of
the Forward Purchase Agreement, the Seller intends, but is not obligated, to purchase up to
The Forward Purchase Agreement
provides for a prepayment shortfall in an amount in U.S. dollars equal to
8
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Prepaid expenses for forward purchase contract (cont.)
The Seller in its sole discretion
may sell Recycled Shares at any time following June 11, 2024 and at any sales price, without payment by the Seller of any early termination
obligation until such time as the proceeds from such sales equal
The Seller will purchase
“Additional Shares” from the Counterparty at any date prior to the Valuation Date at the Initial Price, with such number of
Shares to be specified in a Pricing Date Notice as Additional Shares subject to
The Forward Purchase Agreement
provides that the Seller will be paid directly an aggregate cash amount (the “Prepayment Amount”) equal to (x) the product
of (i) the number of Shares as set forth in a Pricing Date Notice and (ii) the redemption price per share of $
The reset price (the “Reset
Price”) will initially be $
9
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Prepaid expenses for forward purchase contract (cont.)
From time to time and on any date following the Trade Date (any such date, an “OET Date”) and subject to the terms and conditions in the Forward Purchase Agreement, the Seller may, in its absolute discretion, terminate the Transaction in whole or in part by providing written notice to the Counterparty (the “OET Notice”), by the later of (a) the fifth Local Business Day following the OET Date and (b) no later than the next Payment Date following the OET Date, (which will specify the quantity by which the number of Shares will be reduced (such quantity, the “Terminated Shares”)). The effect of an OET Notice will be to reduce the number of Shares by the number of Terminated Shares specified in such OET Notice with effect as of the related OET Date. As of each OET Date, the Counterparty will be entitled to an amount from the Seller, and the Seller will pay to the Counterparty an amount, equal to the product of (x) the number of Terminated Shares and (y) the Reset Price in respect of such OET Date (except that no amount will be due to Counterparty upon any Shortfall Sale). The payment date may be changed within a quarter at the mutual agreement of the parties.
The “Valuation Date” is the earlier to occur of (a) the date that is 36 months after the Closing Date, (b) the date specified by the Seller in a written notice to be delivered to the Counterparty at the Seller’s discretion (which Valuation Date will not be earlier than the day such notice is effective) after the occurrence of any of (v) a Shortfall Variance Registration Failure, (w) a VWAP Trigger Event, (x) a Delisting Event, (y) a Registration Failure or (z) unless otherwise specified therein, upon any Additional Termination Event, and (c) the date specified by the Seller in a written notice to be delivered to the Counterparty at the Seller’s sole discretion (which Valuation Date will not be earlier than the day such notice is effective). The Valuation Date notice will become effective immediately upon its delivery from the Seller to the Counterparty in accordance with the Forward Purchase Agreement.
On June 15, 2024, the Sellers
issued a pricing date notice to the Company, pursuant to which the Sellers had
On July 2, 2024, the Sellers
purchased and the Company issued additional
10
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Income taxes
The Company accounts for income taxes in accordance with the asset and liability method, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes. The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the statements of operations, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An uncertain tax position
is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than
The Company may be subject to income taxes in the U.S. and foreign jurisdictions, when applicable. The Company is incorporated in the State of Delaware and is required to pay either income tax or franchise tax, whichever is applicable, to the State of Delaware on an annual basis. The Company is also registered as a foreign corporation with the State of New Jersey Department of the Treasury. The Company would be subject to New Jersey state tax laws if it has operation in the State of New Jersey.
Under the current and applicable laws of BVI, both TP Holdings and TP NEV are not subject to tax on income or capital gains. As of September 30, 2025 and December 31, 2024, there were no temporary differences and no deferred tax asset or liability recognized. The Company does not believe that there was any uncertain tax positions as of September 30, 2025 and December 31, 2024.
Segment reporting
The Company uses the management approach to determine operating segment. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM’’) for making decisions, allocation of resource and assessing performance. The Company operates and manages its business as a single operating and reportable segment. The Company’s CODM has been identified as the Chief Executive Officer who reviews the consolidated net loss when making decisions about allocating resources and assessing performances of the Company. Significant segment expenses are the same as these presented under the operating costs and expenses in the unaudited condensed consolidated statements of operations and comprehensive loss, and the difference between net revenue less the significant segment expenses and consolidated net income are the other segment items. The CODM reviews and utilizes these financial metrics together with non-financial metrics to make operation decisions, such as the determination of the fee rate at which the Company charges for its products and services and the allocation of budget between operating costs and expense.
For the three and nine months ended September 30, 2025 and 2024, the Company has not generated revenues from operating activities.
11
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently adopted accounting standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items, require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280. The Company adopted ASU 2023-07 for the annual period ending December 31, 2025, retrospectively to all periods presented in the consolidated financial statement. The adoption of this standard did not have a material impact to our results of operations, cash flows or financial condition.
In March 2024, the FASB issued ASU 2024-02, “Codification Improvements – Amendments to Remove References to the Concept Statements” (“ASU 2024-02”). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. The Company adopted ASU 2024-02 for the annual period ending December 31, 2025. The adoption of this standard did not have a material impact to our results of operations, cash flows or financial condition.
Recently issued accounting standards
In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU.
12
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently issued accounting standards (cont.)
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material impact on its unaudited condensed consolidated financial position, statements of operations and cash flows.
Significant risks and uncertainties
Credit risk
Assets that potentially subject
the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such
assets to credit risk is their carrying amount as at the balance sheet dates. As of September 30, 2025, the Company held cash of $
Bank accounts in each bank
in Taiwan is insured by the government authority with the maximum limit of TW$
13
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. GOING CONCERN
As of September 30, 2025, the Company continues to face significant uncertainties regarding its ability to continue as a going concern. These uncertainties include:
| ● | Operating Losses: The Company has incurred significant operating losses since its inception and continues to face challenges in generating sufficient revenue to cover its operational costs. |
| ● | Prepaid Forward Contract: The Company has recorded a prepaid forward contract as a current asset. While the settlement of the prepaid forward contract in shares may result in a capital increase, the uncertainty surrounding the timing and the market conditions under which these shares would be issued or converted may affect the Company’s ability to meet short-term obligations. This lack of cash inflow and potential delay in conversion creates an additional challenge to the Company’s liquidity and raises uncertainty about its ability to continue as a going concern. |
| ● | Suspension of Trading: On April 21, 2025, the Company’s shares were suspended from trading on Nasdaq. The suspension of trading has impacted the Company’s ability to access the capital markets and raises concerns about its liquidity and ability to raise funds or attract investors. This event further exacerbates the Company’s financial position and its ability to meet future obligations. |
| ● | Principal shareholder on-going legal proceedings: There is uncertainty surrounding the legal situation. Prior to the reporting period, the shareholder was previously in a position to provide financial support, the latest judgement issued has introduced significant uncertainty about his future involvement and ability to continue supporting the Company. While a court judgment has been issued, the case remains subject to potential appeal. The outcome of the legal matter, including its impact on the Company’s governance and access to future financial support, remains uncertain. |
Management has taken certain steps to address these concerns, including: (i) Exploring new financing options, including potential debt extensions or new equity capital, (ii) Exploring avenues to resolve the shareholder’s legal situation or secure alternative sources of financial support, and (iii) Continuing to evaluate options for business restructuring or reducing operating costs.
However, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these unaudited condensed financial statements. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing, resolve the legal matters affecting its shareholder, and ultimately generate sufficient cash flows from operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset and the amounts or classification of liabilities that may result from the outcome of this uncertainty.
14
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. OTHER CURRENT ASSETS
Other current assets consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Payments made on behalf of a third party(a) | $ | $ | ||||||
| Prepaid expenses | ||||||||
| $ | $ | |||||||
| (a) |
5. OPERATING LEASE
As of September 30, 2025, TP Holdings had one 24-month office spaces lease agreement in Hong Kong with Thunder Power (Hong Kong) Limited (“TP HK”), a related party of the Company (Note 9). The lease agreement is non-cancellable, expiring in March 2027. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of the incremental borrowing rate.
For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. The Company records the straight-line lease expense and any contingent rent, if applicable, in general and administrative expenses on the unaudited condensed consolidated statements of operations and comprehensive loss.
The lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For short-term leases, the Company records operating lease expense in its unaudited condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred.
The table below presents the operating lease related assets and liabilities recorded on the consolidated balance sheets.
| September 30, 2025 | December 31, 2024 | |||||||
| Right of use assets | $ | $ | ||||||
| Operating lease liabilities, current | $ | $ | ||||||
| Operating lease liabilities, non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
15
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5. OPERATING LEASE (cont.)
Other information about the Company’s leases is as follows:
| For nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
For the three months ended
September 30, 2025 and 2024, operating lease expenses were $
The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2025:
| September 30, 2025 | ||||
| For the three months ending December 31, 2025 | $ | |||
| For the year ending December 31, 2026 | ||||
| For the year ending December 31, 2027 | ||||
| Total lease payments | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
6. OTHER PAYABLE AND ACCRUED EXPENSES
Other payable and accrued expenses consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Accrued professional expenses incurred for Business Combination (a) | $ | $ | ||||||
| Accrued exercise tax on repurchases of common stocks (b) | $ | |||||||
| Others | ||||||||
| $ | $ | |||||||
| (a) |
| (b) |
16
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. EQUITY
Common Stock
The Company has
As part of the Business Combination
between the FLFV and TP Holdings, the Company issued
Upon closing of the Business
Combination on June 21, 2024, the Sponsor had provided a total of $
In connection with the Business
Combination, FLFV engaged a third party financial advisor to assist FLFV in locating target businesses, holding meetings with its
shareholders to discuss a potential business combination and the target business’ attributes, introduce FLFV to potential investors
that are interested in purchasing securities, assist FLFV in obtaining shareholder approval for the business combination and assist with
press releases and public filings in connection with a business combination. On June 21, 2024, the Company issued
Upon closing of the Business
Combination, the Company issued an aggregated
In March 2024, April 2024
and June 2024, the Company entered into certain private placement agreements with certain investors, pursuant to which the Company issued
On July 2, 2024, the Sellers
purchased and the Company issued additional
On August 20, 2024, the Company
entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration
Rights Agreement”) with Westwood Capital Group LLC, a Delaware limited liability company (“Westwood”), pursuant to which
Westwood has committed to purchase, subject to certain limitations, up to $
As of September 30, 2025
and December 31, 2024, the Company had
17
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. EQUITY (cont.)
Preferred Stock
The Company has
Warrants
Warrants issued in connection with FLFV’s initial public offering (“IPO”)
In connection with FLFV’s
IPO on June 21, 2022, FLFV issued
The Warrants became exercisable after the consummation of the Business Combination on June 21, 2024. No Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common stock issuable upon exercise of the Warrants and a current prospectus relating to such common stock.
The Company may call the
Warrants for redemption at a price of $
| ● | in whole and not in part; |
| ● | upon not less than |
| ● | if, and only if, the reported last sale price of the common stock equals or exceeds $ |
The Company accounted for
the Warrants as equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity” and ASC 815-40,
“Derivatives and Hedging: Contracts in Entity’s Own Equity”. The Company accounted for the Warrants as an expense
of the IPO resulting in a charge directly to stockholders’ equity. The Company estimates that the fair value of the Public Warrants
and Private Warrants to be approximately $
18
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. EQUITY (cont.)
Warrants (cont.)
Other Warrants
Upon closing of the Business
Combination on June 21, 2024, the Sponsor had provided a total of $
As of September 30, 2025
and December 31, 2024, the Company had issued and outstanding warrants to purchase
Rights
On June 21, 2022, FLFV issued
On June 21, 2024, the Company
issued
8. INCOME TAXES
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
British Virgin Islands
Under the current and applicable laws of BVI, TP Holdings and TP NEV are not subject to tax on income or capital gains.
Hong Kong
TP HK is incorporated in
Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted
in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$
19
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES (cont.)
Taiwan
TP TW is incorporated in
Taiwan and is subject to Taiwan corporate income tax on the taxable income as reported in its statutory financial statements adjusted
in accordance with relevant Taiwan tax laws. The applicable tax rate for the first TW$
For the three and nine months ended September 30, 2025 and 2024, the Company did not incur income tax expenses.
Deferred tax assets and deferred tax liabilities as of September 30, 2025 and December 31, 2024 consist of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Net operating losses carryforwards | $ | $ | ||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets | $ | $ | ||||||
As of September 30, 2025,
the Company had net operating loss carrying forwards of $
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September 30, 2025 and December 31, 2024, the Company did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. For the three and nine months ended September 30, 2025 and 2024, the Company did not incur any interest and penalties related to potential underpaid income tax expenses.
20
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
9. RELATED PARTY TRANSACTIONS AND BALANCES
a.
| Relationship with the Company | ||
| Thunder Power (Hong Kong) Limited (“TP HK”) | ||
| Thunder Power Electric Vehicle (Hong Kong) Limited (“TPEV HK”) | ||
| Mr. Wellen Sham | ||
| Ms. Ling Houng Sham | ||
| Feutune Light Sponsor LLC (“FLFV Sponsor”) |
b. Related party transactions:
For the three months ended
September 30, 2025 and 2024, TP HK charged operating lease expenses of $
For three months ended September
30, 2025, the Company borrowed $
For nine months ended September
30, 2025, the Company borrowed $
For three and nine months
ended September 30, 2024, the Company borrowed $
For three and nine months
ended September 30, 2024, the Company borrowed $ and $
c.
| Nature | September 30, 2025 | December 31, 2024 | ||||||||
| TP HK(1) | $ | $ | ||||||||
| Mr. Wellen Sham(2) | ||||||||||
| Ms. Ling Houng Sham (2) | ||||||||||
| FLFV Sponsor(3) | ||||||||||
| $ | $ | |||||||||
| (1) |
| (2) | The balance due to Mr. Wellen Sham represented the promissory notes of $ |
The promissory notes issued to Mr. Wellen Sham matured through
September 2026 with interest rate ranging between
| (3) |
21
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. SHARE-BASED COMPENSATION
Share options
In October 2014, TP Holdings adopted a Thunder Power Holdings Limited Share Option Plan (the “2014 Plan”), As of December 31, 2024, the 2014 Plan existed to the extent that there are options/awards outstanding thereunder.
On June 17, 2024, the stockholders of the Company voted to approve the 2024 Omnibus Equity Incentive Plan (the “2024 Plan”), which became effective at the closing of the Business Combination. All outstanding options to purchase share of TP Holdings granted under the 2014 Plan has rolled over into the 2024 Plan and became options to purchase share of Common Stock of the Company. Such options granted under the 2014 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock options and the terms of the 2024 Plan (including the terms of the Prior Plan attached as an exhibit to the 2024 Plan).
The total number of shares
of the Company’s Common Stock reserved and available for grant and issuance pursuant to awards under the 2024 Plan equals
For the three and nine months ended September 30, 2025 and 2024, the transaction activities of share options were as below:
| Number of options | Weighted average exercise price per option | |||||||
| Outstanding at December 31, 2023 | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at March 31, 2024 | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at June 30, 2024 | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at September 30, 2024 | $ | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at March 31, 2025 | $ | |||||||
| Forfeited | $ | |||||||
| Outstanding at June 30, 2025 | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at September 30, 2025 | $ | |||||||
22
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. SHARE-BASED COMPENSATION (cont.)
The following table summarizes information with respect to outstanding share options to employees as of September 30, 2025.
| Number of options | Weighted average remaining contractual term (years) | |||||||
| Outstanding at September 30, 2025 | $ | |||||||
For the three and nine months ended September 30, 2025 and 2024, the Company did not charge share-based compensation expenses.
11. CONTINGENT CONSIDERATION
On June 21, 2024, the Company
entered into an escrow agreement (the “Escrow Agreement”) with Mr. Wellen Sham, Yuanmei Ma and CST, pursuant to which, among
other things, (1) CST will act as the escrow agent under the Escrow Agreement; (2) at the closing of the Business Combination, the Company
deposited with CST
The Earnout Shares shall
be released or otherwise forfeited as follows: (i) an aggregate of
The Earnout Shares are determined
as contingent consideration in connection with the reverse recapitalization. In addition, the issuance of Earnout Shares does not meet
any condition to be classified as a liability under ASC 815, thus it should be classified as an equity financial instrument, and measure
at fair value using the quoted market price on grant date, June 11, 2024, which was $
As of December 31, 2024, the sales/revenues condition for the year of 2024 described above was not met. Currently the Company could not reasonably assess the performance condition for the year ending December 31, 2025. The Company will recognize share-based compensation expenses with corresponding account charged to additional paid-in capital upon the vesting of Earnout Shares.
23
THUNDER POWER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. COMMITMENT AND CONTINGENCIES
The Company’s principal shareholder was involved in 11 legal proceedings that went to first trial, among which six cases were ended in acquittals, and five cases were in process of second trial. Currently, the outcome of the five cases cannot be reasonably estimated.
From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of income or liquidity.
24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Our mission is to power the future of sustainable transportation by creating stylish, innovative and cost-efficient premium electric vehicles centered around differentiated designs and solutions tailored for every lifestyle. We are a technology innovator and a developer of premium electric vehicles (“EVs”). We have developed several proprietary technologies which are the building blocks of the Thunder Power family of EVs.
We focus on the development and manufacturing of premium EVs with differentiated designs and solutions for every lifestyle. Four models are currently featured in our phased development and roll-out strategy: the limited-edition coupe, (the “Coupe” or “488”), long-range Sedan (the “Sedan”), compact city car (the “City Car” or “Chloe”) and the long-range SUV (the “SUV”, and together with the Coupe, Sedan, and City Car, the “Models”). We intend to target not just consumers who desire EVs, but consumers who desire practical and innovative EVs, as well as consumers who seek a luxury experience. We believe that by leveraging our modular integration concept starting with the modularized chassis system patented by us, we are creating a family of EVs (excluding the City Car) which share common parts and modules which we believe requires lower investment and reduced design and production time as opposed to those of traditional automotive manufacturers. We intend to first create the initial design for our Sedan, and then scale upwards to create the Coupe and scale downward to create the City Car. In time, we expect to round off our offering with the SUV.
We expect to offer to the market eco-friendly, premium EVs positioned to earn market share based on design, quality, comfort, range, and price. Among other advantages, we believe that our proprietary technologies will significantly increase the driving range for our EVs while allowing for faster recharging and lower costs of ownership.
Business Combination
On June 21, 2024, Feutune Light Acquisition Corporation (“FLFV”) consummated the business combination with Thunder Power Holdings Limited (“TP Holdings”), pursuant to the Merger Agreement (the “Business Combination”). Following the Business Combination, the combined company changed its name to “Thunder Power Holdings, Inc.” (the “Company”), which is organized under the laws of the State of Delaware.
Upon consummation of the Business Combination, FLFV acquired all of the issued and outstanding securities of TP Holdings in exchange for (i) 40,000,000 shares of common stock, and (ii) earn out payments consisting of up to an additional 20,000,000 shares of common stock (the “Earnout Shares”) if the Company met certain revenue performance target in the following years through December 31, 2026 (see “Note 12 – Contingent Consideration”).
Following the consummation of the Business Combination, the combined Company’s common stock began trading on the Nasdaq Global Market (the “Nasdaq”) under the symbol “AIEV” on June 24, 2024.
The reverse recapitalization is equivalent to the issuance of securities by TP Holdings for the net monetary assets of FLFV, accompanied by a recapitalization. The Company debited equity for the fair value of the net liabilities of FLFV. In the subsequent financial statements after the Business Combination, the amounts of assets and liabilities for the period before the reverse recapitalization in financial statements, are presented as those of TP Holdings and recognized and measured at their pre-combination carrying amounts.
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Recent Developments
On December 19, 2024, the Company entered into a Share Exchange Agreement (the “Agreement”) with certain shareholders (the “TW Company Shareholders”) of Electric Power Technology Limited, a Taiwan corporation (“TW Company”). On January 27, 2025, the Company and TW Company Shareholders have agreed to execute an amendment to the Share Exchange Agreement (the “First Amendment”, together with the Agreement, the “Amended Agreement”), amending, among other things, the share exchange ratio as 119 shares of the Company’s common stock for every 100 ordinary shares of TW Company. Pursuant to the Amended Agreement, TW Company Shareholders will exchange 31,626,082 ordinary shares in TW Company for 37,635,039 shares of newly issued common stock in the Company, with a par value of $0.0001 per share (the proposed transaction, the “Transaction”). On June 26, 2025, the Company held its 2025 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the shareholders voted to approve, among others, the Exchange. The closing of the Exchange is subject to customary conditions, including receipt of all necessary regulatory approvals and the approval of the Company’s shareholders. The Agreement contains customary representations, warranties and covenants by the parties. The closing must occur no later than October 31, 2025. The Agreement may be terminated: (1) by mutual consent of the parties; (2) by either party upon material breach by the other party that remains uncured for 10 days after notice; (3) if the closing has not occurred within 90 days of signing (subject to extension for regulatory approvals); or (4) by either party if a court or regulatory authority permanently enjoins the transaction.
On April 17, 2025, the Nasdaq Stock Market LLC (the “Nasdaq”) notified the Company that the Nasdaq Hearings Panel (the “Panel”) has determined to affirm the denial of the Company’s request to continue its listing of the Company’s common stock, par value $0.0001 per share (“Common Stock”), and that trading of the Company’s Common Stock was suspended at the open of trading on April 21, 2025. On July 21, 2025, Nasdaq filed a Form 25 with the Securities and Exchange Commission to delist the Company’s securities from Nasdaq. The delisting became effective on July 31, 2025. As of the date of this report, the Company’s common stock are traded on the over-the-counter market under the symbol “AIEV”.
Key Factors Affecting Our Results of Operations
We believe that our performance and future success will depend on several Company specific factors, including those key factors discussed below and other factors in the section under the heading “Risk Factors” of the annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025.
Our ability to evaluate our business and future prospects
We are an early-stage company with an early stage/limited operating history, operating in a rapidly evolving and highly regulated market. Furthermore, we have not released any commercially available vehicle, and we have no experience manufacturing or selling a commercial product at scale. Because we have not generated revenue from the sale of EVs, and because of the capital-intensive nature of our business, we expect to continue to incur substantial operating losses for the foreseeable future.
Our ability to develop different models of vehicles
We currently have four models featured in our phased development strategy and our revenue in the foreseeable future will be significantly dependent on a limited number of models. Although we have other vehicle models on our product roadmap, we currently do not expect to introduce another vehicle model until at least 2030. We expect to rely on sales from the Coupe, the Sedan, the City Car, and the SUV, among other sources of financing, for the capital that will be required to develop and commercialize future models. To the extent that production of the models is delayed, reduced or is not well-received by the market for any reason, our revenue and cash flow would be adversely affected, we may need to seek additional financing earlier than we expect, and such financing may not be available to us on commercially reasonable terms, or at all.
Our ability to control the substantial costs associated with our operations
We will require significant capital to develop and grow our business. We have incurred and expect to continue to incur significant expenses as we build our brand and develop and market our vehicles; expenses relating to developing and manufacturing our vehicles, tooling and expanding our manufacturing facilities; research and development expenses (including expenses related to the development of the current and future products), raw material procurement costs; and general and administrative expenses as we scale our operations. As a company, we do not have historical experience forecasting and budgeting for any of these expenses, and these expenses could be significantly higher than we currently anticipate. In addition, any disruption to our manufacturing operations, obtaining necessary equipment or supplies, expansion of our manufacturing facilities, or the procurement of permits and licenses relating to our expected manufacturing, sales and distribution model could significantly increase our expenses.
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Our ability to develop a third-party retail product distribution and a full-service network
We anticipate utilizing third-party retail product distribution and full-service networks to execute on such plans in all markets. If our use of third-party retail production and full-service networks is not effective, our results of operations and financial conditions could be adversely affected.
Key Components of Results of Operations
The following section presents the key components of our results of operations by the nature of corresponding operating activities for the periods indicated. You should read this financial information in conjunction with those presented elsewhere in this report including our financial statements and notes to our financial statements.
Revenues
We have not generated revenue from the sale of EVs. We expect to generate revenue from the sale of our EV models, the sale and/or licensing of our technologies, and from research and development services.
Cost of revenues
Although we have no revenue, we have incurred costs associated with trying to generate revenue such as general and administrative expenses, liquidity and financing expenses and other operating activities as further described below.
General and administrative expenses
General and administrative expenses primarily consist of personnel salary and welfare expenses and professional and consulting expenses. Over the next several years, we anticipate an increase in our general and administrative expenses with our launch of production lines of our EV cars. Additionally, we expect to incur higher costs related to professional and consulting expenses associated with being a publicly traded company.
Taxation
The Company is incorporated in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis. The Company is also registered as a foreign corporation with the State of New Jersey Department of the Treasury. The Company would be subject to income tax under New Jersey state tax laws if it has operations in New Jersey.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IRA applies only to repurchases that occur after December 31, 2022.
Our operating subsidiary Thunder Power New Electric Vehicles (TPNEV) are under the current and applicable laws of BVI and is not subject to tax on income or capital gains.
TP HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong.
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TP TW is incorporated in Taiwan and is subject to Taiwan corporate income tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Taiwan tax laws. The applicable tax rate for the first TW$120,000 of assessable profits is exempt from tax and assessable profits above TWD$120,000 (approximately $3,940) will be subject to the rate of 20% for resident companies in Taiwan.
For the three months ended September 30, 2025 and 2024
The following table sets forth a summary of our results of operations for the three months ended September 30, 2025 and 2024. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
| For three months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenues | $ | — | $ | — | ||||
| Operating expenses | ||||||||
| General and administrative expenses | (428,053 | ) | (912,314 | ) | ||||
| Total operating expenses | (428,053 | ) | (912,314 | ) | ||||
| Other expenses | ||||||||
| Other expenses, net | (84 | ) | — | |||||
| Foreign currency exchange expenses | (2 | ) | (3 | ) | ||||
| Total other expenses, net | (86 | ) | (3 | ) | ||||
| Loss before income taxes | (428,139 | ) | (912,317 | ) | ||||
| Income tax expenses | — | — | ||||||
| Net loss | $ | (428,139 | ) | $ | (912,317 | ) | ||
General and administrative expenses. For the three months ended September 30, 2025 and 2024, our general and administrative expenses were approximately $0.4 million and $0.9 million, respectively. The decrease in general and administrative expenses was primarily due to a decrease of approximately $0.4 million in professional and consulting expenses. We incurred higher professional and consulting expenses in the three months ended September 30, 2024 because we just closed business combination in the end of June 2024.
Net loss. As a result of the foregoing, we incurred a net loss of approximately $0.4 million and $0.9 million for the three months ended September 30, 2025 and 2024, respectively.
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For the nine months ended September 30, 2025 and 2024
The following table sets forth a summary of our results of operations for the nine months ended September 30, 2025 and 2024. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
| For nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenues | $ | — | $ | — | ||||
| Operating expenses | ||||||||
| General and administrative expenses | (1,685,789 | ) | (2,474,043 | ) | ||||
| Total operating expenses | (1,685,789 | ) | (2,474,043 | ) | ||||
| Other income (expenses) | ||||||||
| Other expenses, net | (786 | ) | — | |||||
| Interest income | 27 | — | ||||||
| Foreign currency exchange income (expenses) | 3 | (213 | ) | |||||
| Total other expenses, net | (756 | ) | (213 | ) | ||||
| Loss before income taxes | (1,686,545 | ) | (2,474,256 | ) | ||||
| Income tax expenses | — | — | ||||||
| Net loss | $ | (1,686,545 | ) | $ | (2,474,256 | ) | ||
General and administrative expenses. For the nine months ended September 30, 2025 and 2024, our general and administrative expenses were approximately $1.7 million and $2.5 million, respectively. The decrease in general and administrative expenses was primarily because we incurred share-based compensation expenses of approximately $1.0 million upon closing of the Business Combination in June 2024 as we issued 900,000 shares of Common Stock to three FLFV’s independent directors and transferred 429,350 shares of Common Stock from Sponsor to FLFV’s officers, directors, secretary and their designees, partially offset by an increase of approximately $0.2 million in other expenses.
Net loss. As a result of the foregoing, we incurred a net loss of approximately $1.7 million and $2.5 million for the nine months ended September 30, 2025 and 2024.
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Liquidity and Capital Resources
To date, we have financed our operating activities primarily through cash raised in loans from related parties (see “Note 10 – Related Party Transactions and Balances”), and equity financing including private placements. As of September 30, 2025, our cash was $16,441.
As of September 30, 2025, the Company continues to face significant uncertainties regarding its ability to continue as a going concern. These uncertainties include:
| ● | Operating Losses: The Company has incurred significant operating losses since its inception and continues to face challenges in generating sufficient revenue to cover its operational costs. |
| ● | Prepaid Forward Contract: The Company has recorded a prepaid forward contract as a current asset. While the settlement of the prepaid forward contract in shares may result in a capital increase, the uncertainty surrounding the timing and the market conditions under which these shares would be issued or converted may affect the Company’s ability to meet short-term obligations. This lack of cash inflow and potential delay in conversion creates an additional challenge to the Company’s liquidity and raises uncertainty about its ability to continue as a going concern. |
| ● | Suspension of Trading: On April 21, 2025, the Company’s shares were suspended from trading on Nasdaq. The suspension of trading has impacted the Company’s ability to access the capital markets and raises concerns about its liquidity and ability to raise funds or attract investors. This event further exacerbates the Company’s financial position and its ability to meet future obligations. |
| ● | Principal shareholder on-going legal proceedings: There is uncertainty surrounding the legal situation. Prior to the reporting period, the shareholder was in a position to provide financial support. the latest judgement issued has introduced significant uncertainty about his future involvement and ability to continue supporting the Company. While a court judgment has been issued, the case remains subject to potential appeal. The outcome of the legal matter, including its impact on the Company’s governance and access to future financial support, remains uncertain. |
Management has taken certain steps to address these concerns, including: (i) exploring new financing options, including potential debt extensions or new equity capital, (ii) exploring avenues to resolve the shareholder’s legal situation or secure alternative sources of financial support, and (iii) continuing to evaluate options for business restructuring or reducing operating costs.
However, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these unaudited condensed financial statements. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing, resolve the legal matters affecting its shareholder, and ultimately generate sufficient cash flows from operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset and the amounts or classification of liabilities that may result from the outcome of this uncertainty.
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Cash Flows
The following table sets forth a summary of our cash flows for the periods presented:
| For nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (1,368,298 | ) | $ | (905,358 | ) | ||
| Net cash (used in) provided by investing activities | (1,400 | ) | 929,302 | |||||
| Net cash provided by (used in) financing activities | 1,333,239 | (187,840 | ) | |||||
| Effect of exchange rates on cash | 284 | 625 | ||||||
| Net decrease in cash | (36,175 | ) | (163,271 | ) | ||||
| Cash at beginning of period | 52,616 | 196,907 | ||||||
| Cash at end of period | $ | 16,441 | $ | 33,636 | ||||
Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2025 was approximately $1.4 million, primarily attributable to net loss of approximately $1.7 million, adjusted for an increase of approximately $0.2 million in due to related parties and an increase of approximately $0.1 million in other payable and accrued expenses.
Net cash used in operating activities for the nine months ended September 30, 2024 was approximately $0.9 million, primarily attributable to net loss of approximately $2.5 million, adjusted for non-cash share-based compensation expenses of approximately $1.0 million and an increase of $0.4 million in accrued expenses and other current liabilities incurred for professional consulting expenses since the closing of the Business Combination.
Investing activities
For the nine months ended September 30, 2025, we reported cash used in investing activities of $1,400, which was used in purchase of short-term investments.
For the nine months ended September 30, 2024, we reported cash provided by investing activities of approximately $0.9 million, which was from the reverse acquisition we closed with FLFV in June 2024.
Financing Activities
For the nine months ended September 30, 2025, we reported cash provided by financing activities of approximately $1.3 million, which were primarily provided by borrowings of approximately $1.3 million from our controlling shareholder and his family member.
For the nine months ended September 30, 2024, we reported cash used in financing activities of approximately $0.2 million, which were primarily provided by subscription fees of $0.4 million from shareholders in the private placements raised by TP Holdings, borrowings of approximately $0.7 million from our controlling shareholder, and proceeds of approximately $0.2 million from investors pursuant to Forward Purchase Agreement, partially offset by payment of offering cost of approximately $0.9 million and payment of approximately $0.4 million of extension loans on behalf of Feutune Light Sponsor LLC (the “Sponsor”).
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Commitment and Contingencies
On June 21, 2024, the Company entered into an escrow agreement (the “Escrow Agreement”) with Mr. Wellen Sham, Yuanmei Ma and CST, pursuant to which, among other things, (1) CST will act as the escrow agent under the Escrow Agreement; (2) at the closing of the Business Combination, the Company deposited with CST 20,000,000 shares of common stock as Earnout Shares, to be held by CST in a segregated escrow account (“Earnout Escrow Account”); and (3) if any portion of the Earnout Shares becomes eligible for release in accordance with the terms of the Escrow Agreement, CST will release the applicable portion of the Earnout Shares from the Earnout Escrow Account in accordance with the terms of the Escrow Agreement and disburse to each eligible recipient the applicable portion of Earnout Shares therefrom.
The Earnout Shares shall be released or otherwise forfeited as follows: (i) an aggregate of 5,000,000 Earnout Shares (the “Tranche 1 Earnout Shares”) will be vested, if and only if, on the occurrence that the amount of sales/revenues of the Company for any of the fiscal years (such fiscal year is referred to as “Tranche 1 Fiscal Year”) ending from December 31, 2023 to December 31, 2025 is no less than $42,200,000 as evidenced by the audited financial statements of the Company prepared in accordance with U.S. GAAP for the Tranche 1 Fiscal Year that is contained in an annual report on Form 10-K filed by the Company with the SEC (the “Tranche 1 Annual Report”); (ii) an aggregate of 15,000,000 Earnout Shares (the “Tranche 2 Earnout Shares”) will be vested, if and only if, on the occurrence that the amount of sales/revenues of the Company for any of the fiscal years (such fiscal year is referred to as “Tranche 2 Fiscal Year”) ending from December 31, 2023 to December 31, 2026 is no less than $415,000,000 as evidenced by the audited financial statements of the Company prepared in accordance with U.S. GAAP for the Tranche 2 Fiscal Year that is contained in an annual report on Form 10-K filed by the Company with the SEC (the “Tranche 2 Annual Report”); (iii) Within five (5) business days following the determination that all or any portion of the Tranche 1 Earnout Shares or Tranche 2 Earnout Shares become vested, the Company, together with Mr. Sham and Ms. Ma, shall instruct the Escrow Agent to irrevocably and unconditionally release the vested tranche of Earnout Shares from the Escrow Account in accordance with the terms of the Escrow Agreement to certain of the Company’s shareholders. Each tranche of Earnout Shares may be released only once, but more than one tranche can be released in any year in accordance with the Escrow Agreement.
The Earnout Shares are determined as contingent consideration in connection with the reverse recapitalization. In addition, the issuance of Earnout Shares does not meet any condition to be classified as a liability under ASC 815, thus it should be classified as an equity financial instrument, and measure at fair value using the quoted market price on grant date, June 11, 2024, which was $2.56 per share.
The sales/revenue condition for the year of 2024 described above was not met. Currently the Company could not reasonably assess the performance condition for the year ending December 31, 2025.
Other than the above, in the normal course of business, we are subject to loss contingencies, such as certain legal proceedings, claims and disputes. We record a liability for such loss contingencies when the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to the shares of our common stock and classified as shareholder’s equity or that are not reflected in our unaudited condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in product development services with us.
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Research and Development
We have incurred minimal research and development expenses for the three and nine months ended September 30, 2025 and 2024. The researched and development expenses were recorded in “general and administrative expenses” in the unaudited condensed consolidated statements of operations and comprehensive loss.
Critical Accounting Estimates
We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and various assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.
The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. You should read the description of critical accounting policies, judgments and estimates in conjunction with our unaudited condensed consolidated financial statements and other disclosures included in this report.
We do not have critical accounting estimates that are related to us. A list of accounting policies, judgements and estimates that are relevant to us is included in notes to our unaudited condensed consolidated financial statements included elsewhere in this report (see “Note 2 – Summary of Significant Accounting Policies”).
Recently Issued Accounting Pronouncements
The Company has evaluated all recently issued accounting pronouncements and believes such pronouncements do not have a material effect on the Company’s unaudited condensed consolidated financial statements. A list of recently issued accounting pronouncements that are relevant to us is included in the notes to our unaudited condensed consolidated financial statements included elsewhere in this report (see “Note 2 – Summary of Significant Accounting Policies”).
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, the Company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and other procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms, and that such information is collected and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our Chief Executive Officer (the principal executive officer) and our Chief Financial Officer (the principal financial officer), the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective, at the reasonable assurance level, as of September 30, 2025, we identified the material weakness that we are lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP technical accounting issues and prepare and review financial statements and related disclosures in accordance with U.S. GAAP and reporting requirements set forth by the SEC. Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring a consulting firm with U.S. GAAP experience to strengthen our financial reporting function; (ii) establishing an ongoing program to provide sufficient and appropriate training for financial reporting and accounting personnel, especially training related to U.S. GAAP and SEC reporting requirement.
Limitations on Controls and Procedures
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
This Quarterly Report does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three and nine months ended September 30, 2025, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings
For a description of our material pending legal proceedings related to the Company, or its officers, and directors, please see Item 3 of the Company’s Annual Report on Form 10-K, filed with SEC on March 31, 2025.
Item 1A. Risk Factors
We are subject to various risks and uncertainties in the course of our business. In addition to other information contained elsewhere in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025, which could materially affect our business, financial condition, or future results. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in the Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104* | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 13, 2025 | THUNDER POWER HOLDINGS, INC. | |
| /s/ Pok Man Ho | ||
| Name: | Pok Man Ho | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) | ||
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Exhibit 31.1
CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher Nicoll, certify that:
| 1. | I have reviewed this report on Form 10-Q of Thunder Power Holdings Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 13, 2025 | ||
| /s/ Christopher Nicoll | ||
| Name: | Christopher Nicoll | |
| Title: | Chief Executive Officer | |
| (principal executive officer) | ||
Exhibit 31.2
CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Pok Man Ho, certify that:
| 1. | I have reviewed this report on Form 10-Q of Thunder Power Holdings Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 13, 2025 | ||
| /s/ Pok Man Ho | ||
| Name: | Pok Man Ho | |
| Title: | Interim Chief Financial Officer | |
| (principal financial officer and principal accounting officer) | ||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certifies, in her capacity as Chief Executive Officer and interim Chief Financial Officer of Thunder Power Holdings Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of her knowledge:
| (1) | The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: November 13, 2025 | ||
| /s/ Christopher Nicoll | ||
| Name: | Christopher Nicoll | |
| President and Chief Executive Officer | ||
| (principal executive officer) | ||
| /s/ Pok Man Ho | ||
| Name: | Pok Man Ho | |
| Title: | Interim Chief Financial Officer | |
| (principal financial officer and principal | ||
| accounting officer) | ||
This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.