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

Company: Cenntro Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 15
---
 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 financial statements and the notes for the fiscal year ended December 31, 2024. The results of operations for the three
              months ended March 31, 2025 are not necessarily indicative of the results for the full year or any future periods.

            37

            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