Cenntro Inc.: Form 10-Q for the period ended Jun 30, 2025

Introductory Note

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company,” “Cenntro,” “we,” “us” or “our” are references to the combined business Cenntro Inc. and its subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.

A. Key Components of Results of Operations

Net revenues

Up until December 31, 2021, we generate revenue primarily through the sale of ECVs to our channel partners. Beginning in 2022, we experimented with different go-to-market strategies across regions. In Europe, while we initially tested an EV center approach by acquiring CAE, a German manufacturer and ECV seller, we returned to our distributor-focused model in 2024 given its proven effectiveness. In North America, we implemented a hybrid approach that combines direct sales to end-customers with strategic distributor partnerships. Historically (i.e. up until end of 2021), these revenues were generated solely by the sale of the Metro®. Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™ and Neibor® 150 in Europe, Clubcar, Logistar™ 210 and Logistar™ 260 in Asia, Avantier™ and Logistar™ 400 in the US.

Net revenues during the six months ended 2025 and 2024 were generated from (a) vehicles sales, which primarily represent net revenues from sales of Metro® vehicles (including vehicle kits), Logistar™ 200, Logistar™ 210, Logistar™ 260, Logistar™ 400, Logistar™ 450, Antric®, Avantier™, Logistar™ 100 and Clubcar, (b) sales of ECV spare-parts related to our Metro® vehicles, and (c) other sales, which primarily were: (i) the sales of inventory of outsourced ECV batteries, and (ii) charges on services provided to channel partners for technical developments and assistance with vehicle homologation or certification.

Cost of goods sold

Cost of goods sold mainly consists of production-related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of plants and equipment, manufacturing waste treatment processing fees and inventory write-downs. We incur cost of goods sold in relation to (i) vehicle sales and spare-part sales, including, among others, purchases of raw materials, labor costs, and manufacturing expenses that related to ECVs, and (ii) other sales, including cost and expenses that are not related to ECV sales.

Cost of goods sold also includes inventory write-downs. Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and is comprised of direct materials, direct labor cost and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Write-downs are recorded in the cost of goods sold in our statements of operations and comprehensive loss.

Operating expenses

Our operating expenses consist of general and administrative, selling and marketing expenses, and research and development expenses. General and administrative expenses are the most significant components of our operating expenses. Operating expenses also include provision for credit losses.

Research and Development Expenses

Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, costs associated with assets acquired for research and development, product development costs, production inspection and testing expenses, product strategic advisory fees, third-party engineering and contractor support costs and allocated overhead. We expect our research and development expenses to increase as we continue to invest in new ECV models, new materials and techniques, vehicle management and control systems, digital control capabilities and other technologies.

Selling and Marketing Expenses

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, trade shows, events, corporate communications, and brand-building activities. We expect our selling and marketing expenses to remain at the current level, as we have stabilized our blended sales channel mix, especially in Europe, by strengthening e-commerce and distributor networks, which reduces the reliance on high-cost direct selling.

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 is written off when receivables are deemed uncollectible, following the exhaustion of all collection efforts and a determination that recovery. 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.

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

Entities over which we have the ability to exercise significant influence but do not have a controlling interest through investment in common shares, or in-substance common shares, are accounted for using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our proportionate share of each such entity’s net income or loss after the date of investment into the statements of operations and comprehensive loss and accordingly adjust the carrying amount of the investment. When our share of losses in the equity of such entity equals or exceeds our interest in the equity of such entity, we do not recognize further losses, unless we have incurred obligations or made payments or guarantees on behalf of such entity. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis.

Discontinued operations

We classify the results of a component (or group of components) to be disposed (“disposal group”) as a discontinued operation when the disposal group meets the held-for-sale criteria, is disposed of by sale or is disposed of other than by sale (e.g. abandonment) and when the disposal group represents a strategic shift that has, or will have, a major effect on our operations and our financial results.

We report the operating results related to the disposal group as discontinued operations for all periods presented in our consolidated statements of comprehensive loss, respectively.

Key Operating Metrics

We prepare and analyze operating and financial data to assess the performance of our business and allocate our resources. The following table sets forth our key performance indicators for the six months ended June 30, 2025 and 2024.

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Gross margin of vehicle sales. Gross margin of vehicle sales is defined as gross profit of vehicle sales divided by total revenue of vehicle sales.

Results of Operations

The following table sets forth a summary of our statements of operations for the periods indicated:

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Comparison of the Three and Six months ended June 30, 2025 and 2024

Net Revenues

The following table presents our net revenue components by amount and as a percentage of the total net revenues for the periods presented.

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Net revenues for the six months ended June 30, 2025 were approximately $8.5 million, a decrease of approximately $1.1 million or 11.5% from approximately $9.7 million for the six months ended June 30, 2024. The decrease in net revenues in 2025 was primarily attributed to the decrease in spare-part sales by approximately $1.5 million due to the decrease in sales of iChassis™, offset by the increase in vehicle sales of approximately $0.2 million due to the improvement of sales volume and the increase in other sales of approximately $0.2 million. The net revenues in Europe market for the six months ended June 30, 2025 were approximately $5.6 million, an increase of approximately $4.0 million from approximately $1.6 million for the six months ended June 30, 2024. The net revenues in Asia market for the six months ended June 30, 2025 were approximately $1.9 million, a decrease of approximately $0.4 million from approximately $2.3 million for the six months ended June 30, 2024.

Net revenues for the three months ended June 30, 2025 were approximately $6.4 million, a decrease of approximately $0.9 million or 12.4% from approximately $7.3 million for the three months ended June 30, 2024. The decrease in net revenues in 2025 was primarily attributed to the decrease in spare-part sales by approximately $0.8 million due to the decrease in sales of iChassis™ and the decrease in vehicle sales of approximately $0.1 million. The net revenues in Europe market for the three months ended June 30, 2025 were approximately $4.8 million, an increase of approximately $3.9 million from approximately $1.0 million for the three months ended June 30, 2024. The net revenues in Asia market for the three months ended June 30, 2025 were approximately $0.8 million, a decrease of approximately $0.4 million from approximately $1.2 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, we sold 559 ECVs, including 30 fully assembled Metro® units, 28 fully assembled Logistar™ 200 units, 58 fully assembled Logistar™ 100 units, 33 fully assembled Teemak™ units, 2 fully assembled Logistar™ 260 units, 1 fully assembled Logistar™ 400 units, 80 fully assembled Logistar™ 450 units, 7 fully assembled Logistar™ 210 units, 222 fully assembled Avantier™ units, 14 Antric® units, 57 Clubcar units, 21 fully assembled Seres 5 units, 5 fully assembled Joylong-A4 units and 1 fully assembled Joylong-EA6 units, compared with 265 ECVs for the six months end ed June 30, 2024, including 17 fully assembled Metro® units, 6 fully assembled Logistar™ 200, 49 fully assembled Logistar™ 100, 16 fully assembled Teemak™, 29 fully assembled Logistar™ 260, 37 fully assembled Logistar™ 400, 56 fully assembled Avantier™ units, 2 fully assembled Logistar™ 210 units, 39 Clubcar units and 14 Antric® units.

For the six months ended June 30, 2025, we also sold 56 iChassis™ units, other than the 559 ECVs.

For the three months ended June 30, 2025, we sold 430 ECVs, including 10 fully assembled Metro® units, 21 fully assembled Logistar™ 200 units, 56 fully assembled Logistar™ 100 units, 1 fully assembled Teemak™ units, 1 fully assembled Logistar™ 400 units, 5 fully assembled Logistar™ 210 units, 191 fully assembled Avantier™ units, 7 Antric® units, 53 Clubcar units, 69 fully assembled Logistar™ 450 units and 16 fully assembled Seres 5 units, compared with 169 ECVs for the three months ended June 30, 2024, including 2 fully assembled Metro® units, 5 fully assembled Logistar™ 200, 31 fully assembled Logistar™ 100, 14 fully assembled Teemak™, 8 fully assembled Logistar™ 260 , 33 fully assembled Logistar™ 400, 44 fully assembled Avantier™ units, 2 fully assembled Logistar™ 210 units, 19 Clubcar units and 11 Antric® units.

For the three months ended June 30, 2025, we also sold 29 iChassis™ units, other than the 430 ECVs.

Geographically, the vast majority of our net revenues were generated from vehicle sales in the Asia and European Union during the six months ended June 30, 2025. For the six months ended June 30, 2025, net revenues from Europe, North America, Asia (including China) and Africa as a percentage of total revenues was 65.8%, 11.2%, 22.6% and 0.4%, respectively, compared to 16.6%, 59.6%, 23.8% and nil, respectively for the corresponding period in 2024.

The vast majority of our net revenues were generated from vehicle sales in the Asia during the three months ended June 30, 2025. For the three months ended June 30, 2025, net revenues from Europe, North America, Asia (including China) and Africa as a percentage of total revenues was 76.8%, 10.9%, 11.8% and 0.5%, respectively, compared to 13.5%, 70.2%, 16.3% and nil, respectively for the corresponding period in 2024.

For the six months ended June 30, 2025, net revenues from vehicle sales in Europe, North America, Asia (including China) and Africa as a percentage of total vehicle net revenues was 68.3%, 11.0%, 20.3% and 0.4%, respectively, compared to 19.4%, 74.8%, 5.8% and nil, respectively, for the corresponding period in 2024.

For the three months ended June 30, 2025, net revenues from vehicle sales in Europe, North America, Asia (including China) and Africa as a percentage of total vehicle net revenues was 78.8%, 11.5%, 9.2% and 0.6%, respectively, compared to 15.0%, 83.1%, 1.9% and nil, respectively, for the corresponding period in 2024.

Cost of goods sold

The following table presents our cost of goods sold by amount and as a percentage of the total cost of goods sold for the periods presented.

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Cost of goods sold for the six months ended June 30, 2025 was approximately $8.2 million, an increase of approximately $0.3 million or approximately 4.3% from approximately $7.9 million for the six months ended June 30, 2024. The increase of cost of vehicle sales was mainly caused by the increase in the cost of vehicle sales of approximately $2.5 million, offset by the decrease in the cost of spare-part sales and inventory write-down of approximately $1.5 million and $0.8 million, respectively.

Cost of goods sold for the three months ended June 30, 2025 was approximately $6.4 million, an increase of approximately $0.7 million or approximately 12.0% from approximately $5.7 million for the three months ended June 30, 2024. The increase of cost of vehicle sales was mainly caused by the increase in the cost of vehicle sales of approximately $2.1 million, offset by the decrease in the cost of spare-part sales and inventory write-down of approximately $0.7 million and $0.8 million, respectively.

Gross Profit/(Loss)

Gross Profit for the six months ended June 30, 2025 was approximately $0.3 million, a decrease of approximately $1.4 million from approximately $1.7 million of gross profit for the six months ended June 30, 2024. For the six months ended June 30, 2025 and 2024, our overall gross margin was approximately 3.5% and 18.1%, respectively. Our gross margin of vehicle sales for the six months ended June 30, 2025 and 2024 was 1.3% and 21.4%, respectively. The decrease of our overall gross profit was caused by the decrease in the gross profit of our vehicle sales of approximately $2.3 million, offset by the decrease in the inventory write-down of approximately $0.8 million.

Gross loss for the three months ended June 30, 2025 was approximately $0.02 million, a change of approximately $1.6 million from approximately $1.6 million of gross profit for the three months ended June 30, 2024. For the three months ended June 30, 2025 and 2024, our overall gross margin was approximately -0.3% and 21.6%, respectively. Our gross margin of vehicle sales for the three months ended June 30, 2025 and 2023 was -1.5% and 22.1%, respectively. The decrease of our overall gross profit was caused by the decrease in the gross profit of our vehicle sales of approximately $2.2 million and the decrease in the gross profit of our spare-part sales of approximately $0.1 million, offset by the decrease in the inventory write-down of approximately $0.8 million.

Selling and Marketing Expenses

Selling and marketing expenses for the six months ended June 30, 2025 were approximately $1.0 million, a decrease of approximately $0.2 million or approximately 17.3% from approximately $1.2 million for the six months ended June 30, 2024. The decrease in selling and marketing expenses in 2025 was primarily attributed to the decrease in salary expenses, share-based compensations and service fee related to European market and distribution channel research of approximately $0.2 million, $0.1 million and $0.1 million, respectively, offset by the increase in freight of approximately $0.2 million.

Selling and marketing expenses for the three months ended June 30, 2025 were approximately $0.3 million, a decrease of approximately $0.4 million or approximately 61.8% from approximately $0.6 million for the three months ended June 30, 2024. The decrease in selling and marketing expenses in 2025 was primarily attributed to the decrease in expenses, service fee and freight of approximately $0.1 million, $0.1 million and $0.2 million, respectively.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2025 were approximately $10.1 million, a decrease of approximately $2.9 million or approximately 22.2% from approximately $13.0 million for the six months ended June 30, 2024. The decrease in general and administrative expenses in 2025 was primarily attributed to a decrease in salary expense, office expenses, leasing cost, freight, rental expense and share-based compensation of approximately $1.4 million, $0.5 million, $0.5 million, $0.2 million, $0.1 million and $0.2 million, respectively.

General and administrative expenses for the three months ended June 30, 2025 were approximately $5.2 million, a decrease of approximately $1.9 million or approximately 26.9% from approximately $7.1 million for the three months ended June 30, 2024. The decrease in general and administrative expenses in 2025 was primarily attributed to a decrease in salary and social insurance, office expenses, freight, leasing cost, rental expense and share-based compensation of approximately $1.2 million, $0.3 million, $0.1 million, $0.2 million, $0.1 million and $0.1 million, respectively, offset by the increase in legal and professional fee of approximately $0.2 million.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2025 were approximately $1.4 million, a decrease of approximately $1.1 million or approximately 43.6% from approximately $2.5 million for the six months ended June 30, 2024. The decrease in research and development expenses in 2025 was primarily attributed to the decrease in design and development expenditures, share-based compensations, miscellaneous expenses and salary expense of approximately $0.1 million, $0.03 million, $0.09 million and $0.8 million, respectively.

Research and development expenses for the three months ended June 30, 2025 were approximately $0.6 million, a decrease of approximately $0.4 million or approximately 37.1% from approximately $1.0 million for the three months ended June 30, 2024. The decrease in research and development expenses in 2025 was primarily attributed the decrease in salary expense of approximately $0.4 million.

Interest expense, net

Interest expense, net, mainly consists of interest expense on convertible bonds, offset by the interest income from deposit, short-term investment and unpaid purchases from HWE. Net interest expense was approximately $0.3 million for the six months ended June 30, 2025, representing an increase of approximately $0.3 million compared to the approximately $0.02 million in interest expense for the six months ended June 30, 2024.

Interest expense, net, mainly consists of interest expense on convertible bonds, offset by the interest income from deposit, short-term investment and unpaid purchases from HWE. Net interest expense was approximately $0.2 million for the three months ended June 30, 2025, representing an increase of approximately $0.06 million compared to the approximately $0.1 million in interest income for the three months ended June 30, 2024.

Other income (expense), net

Other income, net for the six months ended June 30, 2025 was approximately $0.2 million, representing a change of approximately $0.4 million compared to approximately $0.2 million of other expense, net for the six months ended June 30, 2024. The change of other income (expense) in 2025 compared to 2024 was primarily attributable to i) the decrease in loss on disposal of PPE and other loss of approximately $0.07 million and $0.08 million, respectively, ii) an increase of approximately $0.06 million in income from government subsidies, iii) an increase of approximately $0.2 million in litigation compensation from Fujian Newlongma Automotive Co., Ltd.

Other expense, net for the three months ended June 30, 2025 was approximately $0.07 million, representing a decrease of approximately $0.1 million compared to approximately $0.2 million of other expense, net for the three months ended June 30, 2024. The decrease of other expense in 2025 compared to 2024 was primarily attributable to the decrease in loss on disposal of PPE and other loss of approximately $0.06 million and $0.07 million, respectively.

Change in fair value of equity securities

A loss in the change in fair value of equity securities for the six months ended June 30, 2025 was approximately $0.1 million.

A loss in the change in fair value of equity securities for the three months ended June 30, 2025 was approximately $0.1 million.

Loss from Note Amendment

A loss from Note Amendment for the six months ended June 30, 2025 was approximately $1.8 million.

A loss from Note Amendment for the three months ended June 30, 2025 was approximately $1.8 million.

Gain from disposal of Cenntro Electric CICS, SRL’s equity

A gain from disposal of Cenntro Electric CICS, SRL’s equity for the six months ended June 30, 2025 was approximately $1.2 million.

A gain from disposal of Cenntro Electric CICS, SRL’s equity for the three months ended June 30, 2025 was approximately $1.2 million.

Non-GAAP Financial Measures

Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024

In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA, a non-GAAP measure is useful in evaluating operational performance. We use Adjusted EBITDA to evaluate ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing operating performance.

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. We define Adjusted EBITDA as net income (or net loss) before net interest expense, income tax expense, depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense and other non-recurring expenses including expenses related to TME Acquisition, expenses related to one-off payment inherited from the original Naked Brand Group, impairment of goodwill, convertible bond issuance fee, loss on redemption of convertible promissory notes, and change in fair value of convertible promissory notes and derivative liability.

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:

• 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;
• for planning purposes, including the preparation of our internal annual operating budget and financial projections;
• to evaluate the performance and effectiveness of our operational strategies; and
• 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:

• such measures do not reflect our cash expenditures;
• such measures do not reflect changes in, or cash requirements for, our working capital needs;
• 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
• 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 will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and may complicate comparisons of our internal operating results and operating results of other companies over time. In addition, Adjusted EBITDA may include adjustments for other items that we do not expect to regularly occur in future reporting periods. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below helps management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is net loss:

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B. Liquidity and Capital Resources

We have historically funded working capital and other capital requirements primarily through bank loans, equity financings and short-term loans. Also, the reverse recapitalization we have completed at the end of December 2021 provided significant funding for the Company’s operations. Our Cash is required primarily to purchase raw materials, and pay salaries, office expenses and other operating expenses.

As of June 30, 2025, we had approximately $6.0 million in cash and cash equivalents, approximately $3.2 million of accounts receivables, and approximately $25.4 million of inventory as compared to approximately $12.5 million in cash and cash equivalents, $3.3 million in accounts receivable, and $24.0 million in inventory as of December 31, 2024. For the six months ended June 30, 2025 and 2024, net cash used in operating activities was approximately $9.4 million and $12.7 million, respectively.

Short-Term Liquidity Requirements

We are looking at measures to generate operating efficiency as well as increasing the inventory turns in containing the growth of working capital for reducing negative net cash used in operating activities. With the cash improvement initiatives, we believe our cash and cash equivalents will be sufficient for us to continue to execute our business strategy over the twelve months period following the date of issuance of this 10Q. Our current business strategy for the next twelve months includes (i) the continued rollout of our new ECV models in North America and Europe, as applicable, (ii) the establishment of local assembly facilities in the United States and the European Union and (iii) additional plants and equipment for the expansion of our Changxing factory1. Actual results could vary materially as a result of a number of factors, including:

• The costs of bringing our new facilities into operation;
• The timing and costs involved in rolling out new ECV models to market;

1 NTD: Company to provide any additional business plans requiring material capital over the next twelve months.

• Our ability to manage the costs of manufacturing our ECVs;
• The costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities;
• Revenues received from sales of our ECVs;
• The costs of additional general and administrative personnel, including accounting and finance, legal and human resources, as well as costs related to litigation, investigations, or settlements;
• Our ability to collect future revenues; and
• Other risks discussed in the section titled “Risk Factors.”

For the twelve months from the date hereof, we also plan to continue implementing measures to increase revenues and control operating costs and expenses, implementing comprehensive budget controls and operational assessments, implementing enhanced vendor review and selection processes as well as enhancing internal controls.

Long-Term Liquidity Requirements

In the long-term, we plan to regionalize the manufacturing and supply chain relating to certain components of our ECVs in several geographic markets. Through our supply chain development know-how, we intend to establish supply chain relationships especially in the North America to support anticipated manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially other landed costs elements associated with importing our components and spare parts from China. As part of our growth strategy, we plan to expand our channel partner network, and local assembly facilities to regionalize our manufacturing and supply chains to better serve our global customers, especially to expand our after-sales-market services offerings.

We intend to further expand our technology through continued investment in research and development. Since inception in 2013 through June 30, 2025, we have spent over approximately $95.8 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.

For our long-term business plan, we plan to fund current and future planned operations mainly through cash on hand, cash flow from operations, lines of credit and additional equity and debt financings to the extent available on commercially favorable terms.

Working Capital

As of June 30, 2025, our working capital was approximately $26.0 million, as compared to a working capital of approximately $36.8 million as of December 31, 2024. The approximately $10.8 million decrease in working capital during 2025 was primarily due to (i) the decrease of cash and cash equivalents of approximately $6.6 million, and (ii) the increase in inventories, short term loans, contractual liabilities, accrued expense and other current liabilities, operating lease liabilities, convertible bonds and amounts due to related parties of approximately $1.4 million, $1.0 million, $0.6 million, $0.6 million, $1.4 million, $0.3 million and $1.0 million.

Cash Flow

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Operating Activities

Our net cash used in operating activities was approximately $9.4 million, $12.7 million for the six months ended June 30, 2025 and 2024, respectively.

Net cash used in operating activities for the six months ended June 30, 2025 was primarily attributable to (i) our net loss of approximately $15.6 million and adjusted for non-cash items of approximately $7.5 million, which primarily consisted of share based compensation expense, net foreign currency exchange loss, depreciation and amortization, impairment of slow-moving inventories, gain from disposal of Cenntro Electric CICS, SRL’s equity, loss from Note Amendment, change in fair value of convertible promissory notes and derivative liability, allowance for doubtful receivables and amortization of operating lease right-of-use asset of approximately $1.5 million, $1.0 million, $1.1 million, $1.4 million, $1.2 million, $1.8 million, $0.1 million, $2.5 million and $1.7 million, respectively, (ii) the increase in inventories, accounts receivable, prepayment and other current assets of approximately $0.3 million, $0.3 million and $0.5 million, respectively, (iii) increase in deferred revenue, accrued expense and other current liabilities and other non-current assets of approximately $1.2 million , $0.4 million and $0.1 million, respectively, (iv) decrease in accounts payable and operating lease liabilities of approximately $1.4 million and $0.8 million, respectively.

Investing Activities

Net cash used in investing activities was approximately $0.6 million for the six months ended June 30, 2025. Net cash used in investing activities for the six months ended June 30, 2025 was primarily attributable to cash paid in purchase of plant and equipment of approximately $0.6 million.

Financing Activities

Net cash provided by financing activities was approximately $2.9 million for the six months ended June 30, 2025. Net cash provided by financing activities for the six months ended June 30, 2025 was primarily attributable to the proceeds from bank loans, related parties and third parties of approximately $1.4 million, $1.0 million and $1.1 million, offset by the repayment of loans to third parties of approximately $0.4 million and repayment to bank loan of approximately $0.2 million.

Contractual Obligations

In June 2021, we signed two non-cancellable operating lease agreements for approximately 11,700 square feet and 3,767 square feet, respectively, of two floors of an office building in Hangzhou, China. These two leases renewed on May 2025. The lease period for each lease agreement began in June 2025 and ends in May 2026. Pursuant to each agreement, we paid the first six months of our rent obligations in May 2025 and thereafter will be obligated to make rental payments in advance semi-annually. The total annual base rent under these two lease agreements is $144,528 for the term ending May 2026.

On December 4, 2021, we entered into an entrustment agreement with Cedar Europe GmbH, a company organized under the laws of Germany (“Cedar”) pursuant to which we entrusted Cedar to, in Cedar’s name, obtain a lease agreement for facilities in Germany and operate such lease facility under Cedar’s name in exchange for the Cenntro’s responsibility for all expenditures and costs of the lease. On December 24, 2021, Cedar entered into a lease agreement for an approximately 27,220 square feet facility in Dusseldorf, Germany, where we now house our European Operations Facility. The lease period began on January 1, 2022 and ends on December 31, 2024. Pursuant to such lease agreement, the total annual base rent is €354,787 (or approximately $373,630) for the lease term. On 17 January 2023, Cedar transferred the lease to CEGE, effectively from 1 February, 2023.

On February 16, 2022, we signed a non-cancellable operating lease agreement for apartment 53D in the building at 555 Tenth Avenue, New York, NY 10018. The term is one year and one month, beginning on March 5, 2022 and ending on April 4, 2023. The monthly rent is $5,750. On February 1, 2023, we signed a renewal lease agreement. The term of this lease is one year, beginning on April 5, 2023 and ending on April 4, 2024. The lease was not renewed after April 4, 2024. The monthly rent is $5,950.

On March 23, 2022, we completed the acquisition of TME, and change its name to Cenntro Automotive Europe GmbH ("CAE”). TME signed a non-cancellable operating lease agreement for approximately 5,212 square meters in 2019, the lease period starts on July 1, 2019 and ends on June 30, 2024, the monthly rent is €18,891 (or approximately $19,894).

On December 29, 2022, we signed a non-cancellable operating lease agreement with BAL Freeway Associates, LLC for approximately 64,000 square feet as a facility in Ontario, California. The lease period commenced on April 1, 2023 and ends five years following a one-month rent abatement period. The base rent for the first year is $115,200 per month. The monthly rent for the following four years is $119,808, $124,600.32, $129,584.33 and $134,767.71, respectively.

On December 15, 2022, we signed a non-cancellable operating lease agreement for approximately 41,160 square feet as a facility in Howell, New Jersey. The lease period began on February 1, 2023 and ends five years, the first annual base rent is $493,920 and the annual increase is 3%.

On August 4, 2022, we signed a non-cancellable operating lease agreement in Mexico as a facility. For the first 12 months, the rentable area is 58,413 square feet. Starting on the month 13 to month 18, the rentable area is 85,554 square feet, and as of month 19 of the Rent Commencement Date and for the remainder of the initial term, the rentable area is 112,694 square feet. The lease period commenced on January, 2023 and ends 8.5 years. The monthly rent is $29,225.38 and the annual increase is the higher of a) the consumer price index, or b) 2.5%.

On August 31, 2023, we completed the acquisition with Antric GmbH in Germany. On July 20, 2022, Antric signed a non-cancellable operating lease agreement for approximately 4,361 square feet in Bochum, Germany, the lease period ends on December 31, 2026. The monthly rent is €3,605.26 (or approximately $3,796.73). On September 1, 2022, the lease area increased to 7,326 square feet and the monthly rent increased to €6,000.32 (or approximately $6,319.00). The additional deposit is €18,000.96 (or approximately $18,956.99). On January 20, 2023, Antric signed another non-cancellable operating lease agreement for approximately 252 square feet in Bochum, Germany, the lease period starts on February 1, 2023 and ends on December 31, 2026. The monthly rent increased to €6,315.38 (or approximately $6,650.79). On March 27, 2023, Antric signed another non-cancellable operating lease agreement for approximately 2,949 square feet in Bochum, Germany, the lease period starts on April 1, 2023 and ends on December 31, 2026. The monthly rent increased to €8,597.80 (or approximately $9,054.43).

On September 1, 2024, we signed two non-cancellable operating lease agreements for approximately 5,398,050 square feet as office building and facility in Jiangsu, China. The lease period commenced on September 1, 2024 and ends on December 31, 2026. The total monthly rent is approximately $22,435.

On March 25, 2025, we signed a non-cancellable operating lease agreement for approximately 100,860 square feet as a facility in Barstow, California. The lease period commenced on June 1, 2025 and ends three years. The base rent for the first year is $12,000 per month. The monthly rent for the following two years is $12,360 and $12,731, respectively.

On May 19, 2025, we signed a non-cancellable operating lease agreement for approximately 100,860 square feet as a shop in Barcelona, Spain. The lease period commenced on May 19, 2025 and ends eighteen months. The rent-free period is from May 19, 2025 to June 30, 2025. The monthly rent is €2,154 (or approximately $2,357) and the rent will be adjusted annually based on the Consumer Price Index (CPI) published by the Spanish National Bureau of Statistics.

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our Audited 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 leasing, hedging or product development services with us.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements, the reported amounts of revenue and expenses during the reporting period and the related disclosures in the consolidated and combined financial statements and accompanying footnotes. Out of our significant accounting policies, which are described in “Note 2—Summary of Significant Accounting Policies” of our consolidated and combined financial statements for the six months ended June 30, 2025, included elsewhere in this Semi-annual Report, certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimates and assumptions. While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

Basis of presentation

The accompanying consolidated balance sheet as of December 31, 2024, which has been derived from audited financial statements, and the unaudited condensed consolidated financial statements as of June 30, 2025 and for the three months and six months ended June 30, 2025 and 2024 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Certain information and disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements have been included. The interim financial information should be read in conjunction with the consolidated financial statements and the notes for the fiscal year ended December 31, 2024. The results of operations for the three months and six months ended June 30, 2025 are not necessarily indicative of the results for the full year or any future periods.

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include estimates and judgments applied in determination of provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

Fair value measurement

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include:

Level 1—defined as observable inputs such as quoted prices in active markets;

Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and due to related parties, accounts payable and other current liabilities and short-term loans.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable and other current assets, accounts payable, other current liabilities, bank loans and amount due from and due to related parties, current were approximate fair value because of the short-term nature of these items. The estimated fair values of loan from third party, and amount due from related party, non-current were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles.

Available-for-sale investments and currency-cross swap were classified within Level 1 of the fair value hierarchy because they were valued using quoted prices in active markets. Our debt security investments are classified within Level 3 of the fair value hierarchy. As the Issuer is not yet listed and there are no similar companies in the market at the same stage of development for comparison, the Issuer is difficult to value, and the valuation is not considered reliable. Therefore, the Company develop own assumption by future cash flow forecast, which contains principle paid and interests accrued.

The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. The Company has elected to apply the fair value option to: i) convertible promissory notes payable due to the complexity of the various conversion and settlement options available to notes holders; ii) convertible loan receivable, which was recognized as debt security in long-term investments, and iii) currency-cross swap, which was recognized as derivative financial instruments in short-term investments.

The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date.

The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as changes in fair value of convertible promissory notes and derivative liabilities in the Company’s unaudited condensed consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other expense in the unaudited condensed consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.

In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company. The Company utilizes a Binomial model to estimate the fair value of the warrants and are considered a Level 3 fair value measurement. The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations.

As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment. The Company’s investments valued at NAV as a practical expedient are: i) private equity funds, which represent the investment in equity security on the unaudited condensed consolidated balance sheet; ii) wealth management products purchased from banks, which represents the available-for-sale investments in short-term investments on the unaudited condensed consolidated balance sheet.

Revenue recognition

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.

The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance warranty. The warranty is not considered separate performance obligations and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and, therefore, does not believe an accrual for these costs is necessary.

Revenue is recognized upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes).

The Company acts as a principal in the revenue generating process and should recognize revenue on a gross basis. Revenues are measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. Consideration is recorded net of sales returns and VAT. Sales returns is estimated based on historical experiences, which were insignificant for the six months ended June 30, 2025 and 2024. The consideration is fixed, with no variable consideration. All transactions are settled in cash within the normal credit period, and there is no financing component.

Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses.

The following table disaggregates the Company’s revenues by product line for the six months ended June 30, 2025 and 2024:

(Unaudited)

(Unaudited)

The Company’s revenues are derived from Europe, Asia and America. The following table sets forth disaggregation of revenue by customer location.

(Unaudited)

(Unaudited)

Contract Balances

Timing of revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has an unconditional right to the payment.

Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration. The consideration received remains a contractual liability until goods or services have been provided to the customer. For the six months ended June 30, 2025 and 2024, the Company recognized $568,035 and $923,815 revenue that was included in contractual liabilities as of January 1, 2025 and 2024, respectively.

The following table provides information about receivables and contractual liabilities from contracts with customers:

(Unaudited)

Recently issued accounting standards pronouncement

The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company’s operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ended December 31, 2024. The adoption has no significant impact on the Company’s financial statements and disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis with optional retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to address the measurement of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The update introduces a practical expedient available to all entities and an accounting policy election specifically for non-public business entities that adopt the practical expedient, aiming to simplify and reduce the cost complexity associated with estimating expected credit losses for such financial assets. The guidance was developed in conjunction with the Private Company Council to respond to stakeholder concerns regarding the burdens of existing credit loss estimation requirements for these transactions. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. The Company will adopt the new guidance in accordance with the effective dates specified in ASU 2025-05.

As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Roles 12a-15(e) or 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and acting Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Material Weaknesses in Internal Control over Financial Reporting

There are inherent limitations on the effectiveness of any system of internal controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective internal controls and procedures can only provide reasonable assurance of achieving their control objectives.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Our management, with the participation of our CEO and acting CFO, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025, as required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act. Based on this evaluation, management concluded that the Company’s disclosure controls and procedures was not effective as of June 30, 2025, due to material weaknesses in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) that have been previously identified but continue to exist. See Part II, Item 9A of the 2024 Form 10-K for additional information.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the second quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Remediation

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. While management has taken steps to remediate these control weaknesses, the material weaknesses are still unresolved. Consequently, our internal control over financial reporting was not effective as of June 30, 2025.

Unless and until these material weaknesses are remediated, or if new material weaknesses arise in the future, material misstatements could occur and go undetected in our interim or annual Consolidated Financial Statements, and we may be required to restate our financial statements. In addition, we may experience delays in satisfying our reporting obligations or to comply with United States Securities and Exchange Commission rules and regulations, which could result in, among other things, regulatory or enforcement actions, securities litigation, limitations on our ability to access capital markets, debt rating agency downgrades or rating withdrawals, or loss in confidence of our investors, any one of which could adversely affect the valuation of our common stock and our business prospects. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting.

You should carefully consider the risks discussed in the section entitled “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could materially affect our business, financial condition, or future results. The risks described in the Form 10-K are not the only risks facing the company. Additional risks and uncertainties not currently known to us or that we do not currently deem material, may also materially adversely affect our business, results of operations, cash flows, and financial position.