Company: CENN
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001140361-25-019312
Chunk: 7

Company: Cenntro Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 7
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 promissory notes, loss on exercise of warrants, and change in fair value of convertible promissory notes and derivative liability.

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            We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts,
              investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as 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;

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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