Company: CENN
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001140361-25-041657
Chunk: 55

Company: Cenntro Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 55
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omial 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.