UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-34625 SMART POWERR CORP. (Exact name of registrant as specified in its charter) Nevada 90-0093373 (State o ...

Core Viewpoint - Smart Powerr Corp. has regained compliance with Nasdaq's minimum bid price requirement, closing at or above $1.00 for 10 consecutive business days from July 18 to July 31, 2025 [1][2]. Company Overview - Smart Powerr Corp. is based in Xi'an, China, specializing in waste energy recycling and energy efficiency solutions for energy-intensive industries [3]. - The company employs a Build-Operate-Transfer (BOT) model to provide energy-saving and recovery facilities, focusing on nonferrous metal plants [3]. - Smart Powerr Corp. aims to expand into market areas where it currently does not operate, pursuing disciplined and targeted growth strategies [3].

Core Points - Smart Powerr Corp. has announced a reverse stock split at a ratio of 1-for-10 to comply with Nasdaq's minimum bid price requirement [2] - The reverse stock split will reduce the total number of outstanding shares from approximately 25.3 million to about 2.53 million [3] - The reverse stock split will not change the par value per share and will affect all issued and outstanding shares uniformly [4] Company Overview - Smart Powerr Corp. is based in Xi'an, China, and specializes in waste energy recycling and energy efficiency solutions for energy-intensive industries [5] - The company employs a Build-Operate-Transfer (BOT) model to provide energy-saving and recovery facilities, focusing on nonferrous metal plants [5] - Smart Powerr Corp. aims for disciplined and targeted expansion into market areas it currently does not serve [5]

PART I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 financial statements show a substantial cash increase and new revenue, despite a widened net loss, reflecting its ongoing business transformation [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's total assets and cash significantly increased due to loan collections and supplier advances, while stockholders' equity also grew from a common stock offering Consolidated Balance Sheet Highlights (in U.S. Dollars) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Current Assets** | | | | | Cash | $129,596,314 | $25,341 | +$129,570,973 | | Advance to supplier | - | $65,214,994 | -$65,214,994 | | Short term loan receivables | - | $55,660,132 | -$55,660,132 | | **Total Assets** | **$130,747,730** | **$121,234,786** | **+$9,512,944** | | **Total Liabilities** | **$16,451,503** | **$16,503,705** | **-$52,202** | | **Total Stockholders' Equity** | **$114,296,227** | **$104,731,081** | **+$9,565,146** | [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2025, the company generated new revenue but experienced a widened net loss, primarily due to a significant rise in operating expenses, leading to a worsened net loss per share Q1 2025 vs. Q1 2024 Performance (in U.S. Dollars) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $20,625 | $0 | | Gross Profit | $8,819 | $0 | | Loss from Operations | ($1,162,390) | ($208,430) | | Net Loss | ($884,460) | ($279,797) | | Basic and Diluted Net Loss per Share | ($0.09) | ($0.03) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased significantly as of March 31, 2025, primarily driven by the issuance of common stock, partially offset by the net loss for the period - The company issued **15,329,851 shares** of common stock, raising **$9,865,400** during the first quarter of 2025[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company's cash position dramatically improved during Q1 2025, fueled by significant net cash inflows from operating, investing, and financing activities Summary of Cash Flows (in U.S. Dollars) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $64,627,345 | ($183,519) | | Net Cash from Investing Activities | $55,202,004 | $68,564,217 | | Net Cash from Financing Activities | $9,865,400 | - | | **Net Increase in Cash** | **$129,570,973** | **$68,544,897** | | **Cash, End of Period** | **$129,596,314** | **$68,577,267** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business transformation, resolution of significant receivables, and ongoing legal matters, alongside subsequent equity plan and share resale filings - The company is transforming from an energy-saving solutions provider to an energy storage integrated solution provider, targeting industries like industrial complexes, large-scale PV and wind power stations[30](index=30&type=chunk)[79](index=79&type=chunk) - A short-term loan of **$55.9 million** to Xi'an Yingtai was fully collected by January 10, 2025[76](index=76&type=chunk) - A purchase agreement with Bangyu for **$82.3 million** was terminated, and the company reclaimed an advance payment of **RMB 476.0 million** (approx. **$67.2 million**) in March 2025[79](index=79&type=chunk) - In November 2024, the company's subsidiary Xi'an TCH repaid the principal of an entrusted loan amounting to **RMB 77 million** (approx. **$10.55 million**), with interest still outstanding[99](index=99&type=chunk)[121](index=121&type=chunk) - Subsequent to the quarter end, on April 18, 2025, the company filed a Form S-8 for its Omnibus Equity Plan and on April 30, 2025, filed a Form S-1 for the resale of **8,029,851 shares** of common stock[125](index=125&type=chunk)[126](index=126&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2025 net loss to a surge in operating expenses, while highlighting improved liquidity and new revenue, alongside PRC regulations affecting cash transfers from subsidiaries [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For Q1 2025, the company recorded new sales from an operation and maintenance contract, but a significant increase in operating expenses, primarily financing costs, led to a widened net loss - Total sales for Q1 2025 were **$20,625**, derived from a new 10-year Operation and Maintenance contract[132](index=132&type=chunk) - Operating expenses increased by **$962,779** (**462%**) year-over-year, mainly due to a **$948,648** rise in financing costs[135](index=135&type=chunk)[136](index=136&type=chunk) - Net loss increased by **$604,663** to **$884,460** in Q1 2025, driven by the surge in operating expenses[139](index=139&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly strengthened as of March 31, 2025, driven by positive cash flows from all activities, with management asserting sufficient funds for future operations despite PRC dividend restrictions Liquidity Position as of March 31, 2025 | Metric | Amount (in millions) | | :--- | :--- | | Cash and equivalents | $129.60 | | Working capital | $116.81 | | Current Ratio | 9.96:1 | - The increase in net cash from operating activities was mainly driven by the recovery of **$65.6 million** in advance payments to suppliers[141](index=141&type=chunk) - The company's PRC subsidiaries are required to allocate **10%** of annual after-tax income to a statutory reserve fund until it reaches **50%** of registered capital, which restricts dividend distributions to the parent company[148](index=148&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Contractual Obligations](index=36&type=section&id=Contractual%20Obligations) As of March 31, 2025, the company's primary contractual obligations due within one year total approximately **$5.1 million**, mainly consisting of notes payable principal and interest, which the company believes it can meet Contractual Obligations due within 1 year (as of March 31, 2025) | Obligation | Amount | | :--- | :--- | | Notes payable – Principal | $4,705,696 | | Interest payable of notes payable | $69,103 | | Interest payable of Entrusted loan | $343,131 | | **Total** | **$5,117,930** | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, detailed market risk disclosure is not required, but the primary risk identified is foreign currency exchange rate fluctuations between the U.S. dollar and Chinese RMB - The company is a smaller reporting company and is not required to provide detailed information on market risk[159](index=159&type=chunk) - The company's main market risk is foreign currency exchange rate risk between the U.S. dollar and the Chinese RMB, as its operations are in the PRC[160](index=160&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during Q1 2025 - Based on an evaluation as of September 30, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[162](index=162&type=chunk) - There were no material changes to the company's internal control over financial reporting during the fiscal quarter ended March 31, 2025[163](index=163&type=chunk) PART II [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company details ongoing litigation, including a stock repurchase case awaiting retrial, the repayment of a **RMB 77 million** loan principal, and a U.S. default judgment resulting in share issuance - The company is awaiting a court decision on a retrial petition regarding a stock repurchase lawsuit with BIPC (Hongyuan) and has accrued **$2.1 million** for potential litigation expenses as of December 31, 2024[167](index=167&type=chunk)[168](index=168&type=chunk) - On November 29, 2024, the company paid **RMB 77 million** (approx. **$10.81 million**) to Beijing Hongyuan Recycling Energy Investment Center, settling the principal of a loan from a 2021 judgment[169](index=169&type=chunk) - A U.S. court entered a default judgment against the company, leading to the issuance of **128,765 shares** to settle a claim of **$139,066**[170](index=170&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, this section is not required, and no material changes to risk factors from the prior annual report were reported - The company is a smaller reporting company and is not required to provide this information[171](index=171&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[172](index=172&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[173](index=173&type=chunk) [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[175](index=175&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[176](index=176&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q report, including corporate governance documents, material contracts, and officer certifications - The report includes a comprehensive list of exhibits, such as corporate governance documents, securities purchase agreements, employment agreements, and certifications required by the Sarbanes-Oxley Act[177](index=177&type=chunk)[183](index=183&type=chunk)

Core Viewpoint - Smart Powerr Corp. has entered a strategic cooperation agreement with Shidai Huazhi (Jiangsu) Energy Technology Co., Ltd. to enhance urban energy infrastructure and support the "dual carbon" goal through integrated solutions in photovoltaic, energy storage, charging, and inspection [1][7] Group 1: Strategic Cooperation Details - The cooperation will focus on constructing integrated infrastructure for photovoltaic, energy storage, charging, and inspection, including ultra-fast charging stations that can save over one million yuan in electricity bills annually and reduce carbon emissions by more than one thousand tons per year [3] - Shidai Huazhi's actual controller, Mr. Huang Shilin, brings significant industry experience from his previous role at Contemporary Amperex Technology Co., Limited (CATL), enhancing the collaboration's operational advantages in energy storage [2] Group 2: Technological Innovations - The partnership aims to develop intelligent microgrid systems utilizing AC-DC hybrid technologies, with expectations that by 2026, adjustable resource response electricity in the microgrid will exceed 30%, contributing to a trillion-level "energy internet +" industrial cluster [4] - The energy closed-loop mode of "self-generation for self-use + surplus power feeding into the grid" will be explored, potentially creating a market scale of hundreds of trillions of yuan before 2030 [5] Group 3: Operational Management - Shidai Huazhi will establish a software management platform for intelligent inspection and ultra-fast charging stations, ensuring stable operation throughout the project lifecycle [6] - The chairman of CREG emphasized that this cooperation is a significant step in constructing a new power system and aims to provide replicable solutions for global energy transition [6] Group 4: Future Outlook - The two parties plan to explore further cooperation at the capital level, including the establishment of a joint venture subsidiary, anticipating explosive growth in the integrated industry of photovoltaic, energy storage, charging, and inspection [7]

Core Viewpoint - Smart Powerr Corp. has signed a strategic cooperation agreement with Shidai Huazhi (Jiangsu) Energy Technology Co., Ltd. to enhance urban energy infrastructure and support the "dual carbon" goal through integrated solutions in photovoltaic, energy storage, charging, and inspection [1][8]. Group 1: Strategic Cooperation Details - The cooperation will focus on constructing integrated infrastructure for photovoltaic, energy storage, charging, and inspection, including ultra-fast charging stations that can save over 1 million yuan in electricity bills annually and reduce carbon emissions by over 1,000 tons per year [3]. - Shidai Huazhi's expertise in energy storage will be leveraged to create a demonstration urban energy infrastructure solution [2]. Group 2: Technological Innovations - The collaboration aims to build intelligent microgrid systems with self-regulating capabilities, expecting that by 2026, adjustable resource response electricity in the microgrid will exceed 30% [4]. - The two parties will explore an energy closed-loop model to improve urban energy management efficiency, potentially leading to a market scale of hundreds of trillions of yuan before 2030 [5]. Group 3: Operational Management - Shidai Huazhi will develop a software management platform for intelligent inspection and ultra-fast charging stations, ensuring stable operation throughout the project lifecycle [6]. Group 4: Future Outlook - The partnership may extend to capital-level cooperation, including the establishment of a joint venture subsidiary, as the integrated industry of photovoltaic, energy storage, charging, and inspection is expected to experience explosive growth [8].

Financial Performance - The Company reported a net loss of $1,559,012 for the year ended December 31, 2024, compared to a net loss of $746,786 for 2023, indicating an increase in losses of approximately 108.5%[299] - Total operating expenses for 2024 were $1,093,468, up from $798,473 in 2023, reflecting a year-over-year increase of approximately 37%[324] - The net loss for the year ended December 31, 2024, was $1,559,012, an increase of $812,226 from a net loss of $746,786 in 2023, driven by increased operating expenses and impairment provisions[330] - Net non-operating expenses for 2024 were $451,547, a significant decline from non-operating income of $148,387 in 2023, largely due to a $200,000 bad debt provision[328] - The company reported a total accumulated deficit of $46,864,738 as of December 31, 2024, compared to $45,305,726 in 2023[348] Operational Status - The Company currently holds five power generating systems that are not producing electricity, indicating a need for operational improvements[299] - The company incurred an operating loss of $1.1 million and generated negative operating cash flows of $10.8 million for the year ended December 31, 2024[338] Cash Flow and Liquidity - The cash flow forecast suggests the Company will have sufficient cash to fund operations for the next 12 months[299] - As of December 31, 2024, the company had cash and equivalents of $25,341, with current liabilities of $13.10 million and a current ratio of 9.25:1[331] - Net cash used in operating activities decreased to $10,764,096 in 2024 from $68,099,899 in 2023, mainly due to reduced cash outflow related to an entrusted loan[332] - The company believes it has sufficient cash and access to commercial institutions to meet its working capital needs as of December 31, 2024[350] Strategic Direction - The Company is transitioning to an energy storage integrated solution provider and is exploring opportunities in high-growth potential industries such as large-scale photovoltaic and wind power stations[298] - The Company plans to pursue disciplined and targeted expansion strategies in market areas currently not served[298] Revenue Generation - Total sales for the years ended December 31, 2024 and 2023 were reported as $0, indicating no revenue generation during these periods[324] - The Company has not recognized any income from Erdos TCH due to uncertainties regarding collection, despite expecting compensation of RMB 1 million ($145,460) per month until operations resume[307] Financial Instruments and Guarantees - The company has not entered into any financial guarantees or derivative contracts that are indexed to its shares[349] Accounting Standards - The Company’s financial statements are prepared in accordance with US GAAP and in US Dollars[296]

Financial Performance - For the nine months ended September 30, 2024, the Company reported a net loss of $952,285, compared to a net loss of $518,069 for the same period in 2023, indicating an increase in losses of approximately 83.6% year-over-year [132]. - The net loss for the three months ended September 30, 2024, was $262,731, up from $180,723 in the same period of 2023, reflecting a year-over-year increase of about 45.3% [132]. - The Company had an accumulated deficit of $61.45 million as of September 30, 2024 [132]. - Net non-operating expenses for the nine months ended September 30, 2024, were $190,577, compared to non-operating income of $185,176 for the same period in 2023 [157]. - Income tax expense for the nine months ended September 30, 2024, was $14,168, compared to $97,140 for the same period in 2023, with effective tax rates of 1.5% and 23.1%, respectively [158]. - Net loss for the nine months ended September 30, 2024, was $952,285, an increase of $434,216 compared to a net loss of $518,069 for the same period in 2023 [159]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $330,673, a significant decrease from $68,264,743 for the same period in 2023 [169]. - Operating expenses for the three months ended September 30, 2024, were $188,295, an increase of $41,425 or 28.21% compared to $146,870 for the same period in 2023 [164]. - Total operating expenses for the nine months ended September 30, 2024, were $747,540, an increase of $141,435 or 23.34% compared to $606,105 for the same period in 2023 [156]. - Net loss for the three months ended September 30, 2024, was $262,731, an increase of $82,008 compared to a net loss of $180,723 for the same period in 2023 [167]. Business Strategy and Operations - The Company is transitioning to become an energy storage integrated solution provider and is actively seeking opportunities in high-growth potential industries, including large-scale photovoltaic and wind power stations [130]. - The Company plans to raise additional funds through private or public offerings or bank loans to support its business strategy [133]. - The Company has not recognized any income from Erdos TCH due to uncertainties regarding collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume [138]. - The Company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems, with a prepayment of $66.8 million made in 2023 [172]. - Erdos TCH, a joint venture, has two power generation systems with a total capacity of 18 MW in Phase I and three systems with a total capacity of 27 MW in Phase II [138]. Financial Position and Liquidity - Cash and equivalents as of September 30, 2024, were $69.12 million, with a current ratio of 5.73:1 and a liability-to-equity ratio of 0.25:1 [168]. - The Company has sufficient cash and access to commercial loans to meet its working capital needs, supported by the Chinese government's backing for energy-saving businesses [186]. - Total contractual obligations as of September 30, 2024, amount to $16,373,727, including notes payable of $4,978,821 and entrusted loans of $11,333,512 [186]. - As of September 30, 2024, the Company reported an unrestricted accumulated deficit of $61,449,656 and restricted retained earnings of $15,191,645 [184]. Regulatory and Environmental Factors - The Company’s subsidiaries primarily conduct operations in the PRC, which may influence its business and financial condition due to the local political and economic environment [147]. - The Company's operations are primarily in the PRC, making its earnings susceptible to fluctuations in foreign currency exchange rates, particularly between RMB and the U.S. dollar [187]. - The Company is required to maintain a statutory reserve by appropriating 10% of its annual after-tax profit until it reaches 50% of its registered capital, impacting dividend distribution [182]. Accounting and Reporting - The Company's financial statements are prepared in accordance with US GAAP, and significant inter-company accounts and transactions have been eliminated in consolidation [143].

Financial Performance - For the six months ended June 30, 2024, the company reported a net loss of $689,554, compared to a net loss of $337,346 for the same period in 2023, indicating a 104.5% increase in losses year-over-year[130]. - Net loss for the six months ended June 30, 2024, was $689,554, an increase of $352,208 compared to a net loss of $337,346 for the same period in 2023[153]. - Net loss for the three months ended June 30, 2024, was $409,757, an increase of $161,915 compared to a net loss of $247,842 for the same period in 2023[159]. - Net non-operating expenses for the six months ended June 30, 2024, were $116,141, compared to non-operating income of $184,381 for the same period in 2023[152]. - Total operating expenses for the six months ended June 30, 2024, were $559,237, an increase of $100,002 or 21.78% compared to $459,235 for the same period in 2023[151]. - Operating expenses for the three months ended June 30, 2024, totaled $350,803, a decrease of $23,604 or 6.30% compared to $374,407 for the same period in 2023[157]. - Income tax expense for the three months ended June 30, 2024, was nil, compared to $57,958 for the same period in 2023[158]. Financial Position - The accumulated deficit as of June 30, 2024, stands at $61.19 million, reflecting the ongoing financial challenges faced by the company[130]. - As of June 30, 2024, the company reported an unrestricted accumulated deficit of $(61,186,925) and total accumulated deficit of $(45,995,280) compared to $(60,497,371) and $(45,305,726) respectively as of December 31, 2023[176]. - The company maintains a statutory reserve of $15,191,645, which is restricted retained earnings and cannot be distributed as cash dividends[176]. - The company is required to allocate at least 10% of its annual after-tax profit to a surplus reserve until it reaches 50% of its registered capital, which restricts the ability to distribute cash dividends[173][174]. - The company's contractual obligations as of June 30, 2024, total $16,334,466, including notes payable of $5,129,312 and entrusted loans of $11,143,634[179]. - Cash and equivalents as of June 30, 2024, were $68.10 million, with a current ratio of 5.68:1 and a liability-to-equity ratio of 0.25:1[161]. Cash Flow and Investments - Net cash used in operating activities for the six months ended June 30, 2024, was $248,132, a significant decrease from $69,042,292 for the same period in 2023[162]. - Net cash provided by investing activities for the six months ended June 30, 2024, was $68,542,364, compared to net cash used in investing activities of $69,994,412 for the same period in 2023[164]. - The company made a prepayment of $66.8 million to Hubei Bangyu New Energy Technology Co., Ltd. for energy storage battery systems as part of its expansion into energy storage solutions[163]. Business Strategy and Operations - The company is transitioning to an energy storage integrated solution provider, targeting high-growth potential industries such as large-scale photovoltaic and wind power stations[128]. - The company plans to pursue disciplined and targeted expansion strategies in market areas currently not served, indicating a focus on growth and diversification[128]. - The company is actively exploring opportunities to apply energy storage technologies to new industries, indicating a strategic shift towards innovation and market expansion[128]. - The company currently holds five power generating systems that are not producing electricity, highlighting operational challenges[130]. - The company has not recognized any income from its joint venture with Erdos TCH due to uncertainties in collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume[135]. Funding and Financial Support - Management intends to raise additional funds through private or public offerings or bank loans to support its business plan and operations[131]. - The company believes it has sufficient cash and access to loans to meet its working capital needs, supported by the Chinese government's backing for energy-saving businesses[179]. Currency and Market Risks - The company's operations are primarily in the PRC, making its earnings susceptible to foreign currency exchange rate fluctuations, particularly between the U.S. dollar and RMB[181].

Financial Performance - For the three months ended March 31, 2024, the company reported a net loss of $279,797, compared to a net loss of $89,504 for the same period in 2023, indicating a significant increase in losses [118]. - The company has an accumulated deficit of $60.78 million as of March 31, 2024, reflecting ongoing financial challenges [118]. - Total sales for the three months ended March 31, 2024, and 2023 were $0 [140]. - Operating expenses increased by $123,602 or 145.7%, totaling $208,430 for the three months ended March 31, 2024, compared to $84,828 for the same period in 2023 [143]. - Net non-operating expenses were $57,187 for the three months ended March 31, 2024, compared to $142 for the same period in 2023 [144]. - Net loss for the three months ended March 31, 2024, was $279,797, an increase of $190,293 from the net loss of $89,504 for the same period in 2023 [145]. - Net cash used in operating activities was $183,519 for the three months ended March 31, 2024, compared to $70,283 for the same period in 2023 [147]. - The company's unrestricted accumulated deficit was $(60,777,199) as of March 31, 2024 [162]. Cash Flow and Liquidity - As of March 31, 2024, the company had cash and equivalents of $68.58 million and a current ratio of 5.75:1 [146]. - The company’s cash flow forecast suggests it will have sufficient cash to fund operations for the next 12 months [118]. - The company has sufficient cash and access to loans to meet its working capital needs, supported by the Chinese government's backing for energy-saving businesses [165]. - The entrusted loan, including interest payable, amounts to $11,193,581 [165]. - As of March 31, 2024, the company has total contractual obligations of $16,222,653, with $5,029,072 due in 1 year or less [165]. Business Strategy and Operations - The company is transitioning to an energy storage integrated solution provider and plans to target new market areas with high growth potential, including industrial complexes and renewable energy sectors [116]. - The company intends to raise additional funds through private or public offerings or bank loans to support its business plan and operations [119]. - The company currently holds five power generating systems that are not producing electricity, indicating a need for operational improvements [118]. - The company is exploring opportunities to apply energy storage technologies to new industries, aiming for disciplined expansion strategies [116]. - The company’s subsidiaries primarily generate revenue from energy-saving solutions and services, with significant reliance on Shanghai TCH and its subsidiaries [130]. Joint Ventures and Risks - The company has not recognized any income from its joint venture with Erdos TCH due to uncertainties in collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume [124]. - The company is exposed to exchange rate risk due to operations primarily conducted in the PRC, affecting earnings when transactions are denominated in RMB [167]. - The company’s financial statements are prepared in accordance with US GAAP, and it faces concentration of credit risk due to its operations in the PRC [132]. Investments - The company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems [149]. - Net cash provided by investing activities was $68,564,217 for the three months ended March 31, 2024, compared to net cash used of $141,070,591 for the same period in 2023 [150]. - The company had a short-term loan of $68,730,851 to Jinan Youkai Engineering Consulting Co., Ltd. as of December 31, 2023 [153].