Company: CENN
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001140361-25-041657
Chunk: 53

Company: Cenntro Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 53
---
 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 a related party, 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 a related party, 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 a 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