Company: CENN
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030576
Chunk: 42

Company: Cenntro Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part II, Item 8
Chunk 42
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 a reasonable basis for
        comparing our ongoing results of operations. Management uses Adjusted EBITDA:

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            as a measurement of operating performance because it assists us in comparing the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations;

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            for planning purposes, including the preparation of our internal annual operating budget and financial projections;

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            to evaluate the performance and effectiveness of our operational strategies; and

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            to evaluate our capacity to expand our business.

By providing this non-GAAP financial measure, together with the reconciliation, we believe we are enhancing investors’ understanding of our business and our results of
      operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures
      disclosed by our competitors because not all companies and analysts calculate Adjusted EBITDA in the same manner. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a
      substitute for net income or other financial statement data presented in our financial statements as indicators of financial performance. Some of the limitations are:

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            such measures do not reflect our cash expenditures;

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            such measures do not reflect changes in, or cash requirements for, our working capital needs;

      36

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            although depreciation and amortization are recurring, non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements;
              and

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            the exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be
              an important component of our compensation strategy.

Due to these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for
      these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of stock-based compensation expense and material
      infrequent items. It is reasonable to expect that these items