Company: CENN
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001140361-25-030576
Chunk: 51

Company: Cenntro Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part II, Item 8
Chunk 51
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 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.

        43

      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 m