Company: CENN
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001140361-25-019312
Chunk: 2

Company: Cenntro Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 2
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 technologies.

Selling and Marketing Expense

            Selling and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, freight costs, travel and
              entertainment expenses and allocated overhead. Marketing programs consist of advertising, tradeshows, events, corporate communications and brand-building activities. We expect our selling and marketing expenses to increase as we introduce our
              new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally.

General and Administrative Expenses

            General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal,
                human resources, and fees for third-party professional services. While we continue to monitor general and administrative expenses, we expect general and administrative expenses to decrease over the
                next two years in connection with our continued effort to improve efficiency, combining our EV centers with local distribution networks and utilizing well-proven OEMs and supply chains.

            Provision for credit losses

                  We adopted ASC 326 Financial Instruments – Credit Losses using the modified retrospective approach through a cumulative-effect adjustment to accumulated deficit from January 1. 2023 and interim periods
                    therein. We used an expected credit loss model for the impairment of accounts receivable as of period ends. We believes the aging of accounts receivable is a reasonable parameter to estimate expected credit loss, and determines expected
                    credit losses for accounts receivables using an aging schedule as of period ends. The expected credit loss rates under each aging schedule were developed on basis of the average historical loss rates from previous years, and adjusted to
                    reflect the effects of those differences in current conditions and forecasted changes. We measured the expected credit losses of accounts receivable on a collective basis. When an accounts receivable does not share risk characteristics
                    with other accounts receivables, we will evaluate such accounts receivable for expected credit loss on an individual basis. Allowance for credit losses balances are written off and deducted from allowance. when receivables are deemed
                    uncollectible. after all collection efforts have been exhausted and the potential for recovery is considered remote. We expect provision for credit losses to decrease in the future as we shift our sales more to FOB terms, when goods
                    will be delivered only if material payment are received.

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Other income (expenses)

Interest expense, net

            Interest expense, net, consists of interest on outstanding loans and the convertible promissory notes.

            Income(loss) from long-term investments