Financial Performance - For the three months ended March 31, 2023, the Company reported a net loss of $89,504, compared to a net loss of $441,459 for the same period in 2022, indicating a 79.8% improvement in losses year-over-year[130] - Net loss for the three months ended March 31, 2023 was $89,504, a decrease of $351,955 from a net loss of $441,459 for the same period in 2022[159] - Total sales for the three months ended March 31, 2023 and 2022 were $0[156] - Operating expenses decreased by $110,952 or 56.7% to $84,828 for the three months ended March 31, 2023, compared to $195,780 for the same period in 2022[157] - Income tax expense was $4,534 for the three months ended March 31, 2023, compared to $17,707 for the same period in 2022[159] - The Company recorded $88,195 in interest income for the three months ended March 31, 2023, offset by $111,104 in interest expense[158] Cash and Liabilities - The Company had cash on hand of $39,406 and a loan receivable of $140,614,361 (RMB 966.0 million) from Jinan Youkai Engineering Consulting Co., Ltd., which was fully repaid on April 3, 2023[131] - Cash and equivalents as of March 31, 2023 were $39,406, with current liabilities of $24.10 million and a current ratio of 5.85:1[161] - The Company had a liability-to-equity ratio of 0.25:1 as of March 31, 2023[161] - As of March 31, 2023, the company has total contractual obligations of $17,158,397, with $5,601,075 due in 1 year or less[175] - 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[175] Business Strategy and Operations - The Company plans to pursue disciplined and targeted expansion strategies into new market areas, including industrial and commercial complexes and large-scale photovoltaic and wind power stations[128] - The Company is transforming into an energy storage integrated solution provider, exploring applications of energy storage technologies in high-growth potential industries[128] - The Company has not recognized any income from the Erdos TCH joint venture due to uncertainty of collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume[137] - The Company owns 100% of Xi'an Zhonghong New Energy Technology Co., Ltd., which provides energy-saving solutions and services[139] - The Company recorded a loss of $624,133 related to the transfer of the Chengli CDQ WHPG station, which was part of a loan repayment agreement[141] Market and Economic Environment - The Company’s operations are significantly influenced by the political, economic, and legal environments in the People's Republic of China[148] - The company is exposed to exchange rate risk due to operations primarily conducted in the PRC, affecting earnings when transactions are denominated in RMB[177] Accumulated Deficit - As of March 31, 2023, the Company had an accumulated deficit of $59.82 million[130] - The Company’s unrestricted accumulated deficit was $(59,819,037) as of March 31, 2023[172] Cash Flow - Net cash used in operating activities was $70,282 for the three months ended March 31, 2023, compared to $38,420 for the same period in 2022[162] - Net cash used in investing activities was $141,070,591 for the three months ended March 31, 2023, primarily due to a short-term loan to Jinan Youkai Engineering Consulting Co., Ltd[163]

Financial Performance - Net cash used in operating activities decreased to $351,880 in 2022 from $1,612,458 in 2021, primarily due to reduced cash outflow on prepaid expenses by $1,683,855 and increased cash inflow from accrued liabilities by $2,245,459[42]. - Total operating expenses increased to $3,880,433 in 2022, a rise of 380.2% from $808,154 in 2021, mainly driven by increased litigation expenses of $2,281,277 and R&D expenses of $850,000[66]. - Net loss for the year ended December 31, 2022, was $4,457,327, a decrease of $7,772,863 compared to a net loss of $12,230,190 in 2021, attributed to decreased impairment loss on long-term equity investment by $11,625,195[66]. - Net loss for the year was $4,457,327, compared to a net loss of $12,230,190 in the previous year, representing a 63.6% improvement[104]. - Cash at the end of the year was $138,813,673, down from $152,011,887, a decrease of about 8.7%[104]. - Total stockholders' equity decreased from $124,758,185 to $110,793,193, a decline of about 11.2%[100]. - The Company recorded a total income tax expense of $69,652 for the year ended December 31, 2022, compared to a benefit of $(53,140) in 2021[96]. Revenue and Income Recognition - The company has not recognized any income from the Erdos TCH joint venture due to uncertainty of collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume[31]. - The company’s revenue recognition policy states that sales and cost of sales are recognized at the inception of the lease[36]. Assets and Liabilities - Total assets decreased from $153,272,462 to $139,135,705, a decline of approximately 9.2%[100]. - Total current liabilities increased slightly from $23,883,024 to $24,383,887, an increase of approximately 2.1%[100]. - The outstanding principal balance of the Promissory Note as of December 31, 2022, was $5,697,727, with accrued interest of $261,035[86]. - The company’s total contractual obligations amount to $17,361,922, including notes payable and entrusted loans[49]. Investments and Projects - The company entered a Market Research and Project Development Service Agreement for $1,150,000 to assist in market research for the new energy industry[67]. - Xi'an Zhonghong transferred the Xuzhou Huayu Project for RMB 120 million ($17.52 million) and Shenqiu Phase I & II Projects for RMB 127.066 million ($18.55 million) to Mr. Bai as part of a loan repayment[111]. - The total repayment amount for the projects was RMB 247.066 million ($36.07 million), which was settled through the transfer of equity shares of Xi'an Hanneng to HYREF[113]. - The company had an investment of RMB 75 million ($11.63 million) in the HYREF fund, which was fully impaired due to uncertainty regarding collection[118]. Tax and Deferred Tax - The Company has a net operating loss (NOL) carryforward of $2.57 million for U.S. income taxes as of December 31, 2022[94]. - The Company's PRC subsidiaries had $36.47 million in NOL that can be carried forward for five years[95]. - The effective income tax rate for the Company's Chinese subsidiaries was 25% for both 2022 and 2021[92]. - As of December 31, 2022, total deferred tax assets amounted to $17.18 million, a decrease of 13.9% from $19.95 million in 2021[139]. Legal and Litigation - The company accrued $2.20 million in litigation expenses as of December 31, 2022[178]. - Xi'an TCH paid RMB 261 million ($37.58 million) as an out-of-court settlement to Hongyuan[177]. Stock and Financing Activities - The Company sold 3,260,000 shares of common stock at $11.522 per share, raising approximately $38.25 million in proceeds[87]. - The company issued common stock amounting to $37,561,721 during the financing activities[104]. - The Company returned $691,320 in excess proceeds to the CEO in April 2021 after amending the share purchase agreement[87]. - As of December 31, 2022, the Company had 30,411 outstanding warrants with an average exercise price of $14.0[88]. - The company entered into a Note Purchase Agreement on December 4, 2020, issuing a Promissory Note of $3.15 million with an interest rate of 8%[121]. - The company entered an investment banking agreement for a registered securities offering of up to $20 million, with a retainer fee of 15,000 shares[182]. Miscellaneous - The company’s organizational structure includes multiple wholly-owned subsidiaries focused on energy-saving solutions and financial leasing[28]. - The Company believes its R&D efforts are among the best in the waste heat, gas, and pressure to energy industry[172]. - The common welfare fund allows the Company to transfer 5% to 10% of its net income for employee benefits, but the Company does not participate in this fund[175]. - The Company’s sales, purchases, and expenses are denominated in RMB, and the RMB is not freely convertible into foreign currencies under current law[176]. - The present value of lease liabilities is $62,178 as of December 31, 2023[180]. - The CFO's monthly salary is RMB 16,000 ($2,200) with a potential grant of no less than 5,000 shares annually, pending Board approval[181]. - An Exchange Agreement was entered into on January 6, 2023, resulting in the delivery of 63,025 shares for a new Promissory Note of $150,000[183].

Financial Performance - For the nine months ended September 30, 2022, the company reported a net loss of $1,113,906 compared to a net income of $1,386,773 for the same period in 2021[134]. - Net loss for the nine months ended September 30, 2022, was $1,113,906, an increase of net loss of $2,500,679 compared to net income of $1,386,773 in 2021[160]. - Net cash used in operating activities for the nine months ended September 30, 2022, was $309,125, a decrease from $1,583,918 in 2021[167]. - Net non-operating expense for the nine months ended September 30, 2022, was $525,131 compared to non-operating income of $2,063,914 in 2021[159]. - Income tax expense for the nine months ended September 30, 2022, was $36,511, compared to an income tax benefit of $87,051 in 2021[160]. - Net loss for the three months ended September 30, 2022, was $447,637, a decrease of $108,937 compared to $556,574 in 2021[165]. Cash and Liquidity - As of September 30, 2022, the company had $136.22 million in cash, sufficient to meet its estimated liquidity needs for the next 12 months[134]. - Cash and equivalents as of September 30, 2022, were $136.22 million, with a current ratio of 6.45:1 and a liability-to-equity ratio of 0.23:1[166]. - The Company has sufficient cash in the bank of $136.22 million as of September 30, 2022, to meet its working capital needs[184]. Operating Expenses - Operating expenses for the nine months ended September 30, 2022, were $552,264, a decrease of $211,928 or 27.7% compared to $764,192 in 2021[158]. - Operating expenses for the three months ended September 30, 2022, were $168,758, a decrease of $211,282 or 55.6% compared to $380,040 in 2021[163]. Accumulated Deficit and Obligations - The company has an accumulated deficit of $56.38 million as of September 30, 2022[134]. - The Company has an unrestricted accumulated deficit of $(56,382,103) as of September 30, 2022, compared to $(55,281,680) as of December 31, 2021[181]. - Total contractual obligations as of September 30, 2022, amount to $17,098,003, with $5,911,991 due within one year and $11,186,012 due after one year[184]. Business Strategy and Operations - The company is transforming into an energy storage integrated solution provider and plans to expand into new market areas with high growth potential[131]. - The company is actively exploring opportunities to apply energy storage technologies to various industries, including large-scale photovoltaic and wind power stations[131]. - The company intends to raise additional funds through private or public offerings or bank loans to support its business plan[135]. Joint Ventures and Income Recognition - The company has two power generation systems with a total capacity of 45 MW in its joint venture with Erdos Metallurgy Co., Ltd.[141]. - The company has not recognized any income from its joint venture due to uncertainty of collection, despite receiving monthly compensation of RMB 1 million ($145,460) from Erdos during the operational downtime[141]. Regulatory and Dividend Restrictions - The Company relies on dividends from its PRC subsidiaries for working capital, but these subsidiaries are restricted in their ability to pay dividends due to PRC regulations[176]. - The Company’s ability to conduct operations may be adversely affected if its subsidiaries cannot pay dividends or make cash payments when needed[176]. - The Company’s operations are primarily conducted through its subsidiaries, which are subject to PRC regulations on capital transfers and dividend payments[175]. - The Company is subject to covenants and consent requirements that may restrict its subsidiaries' ability to distribute profits[175]. - The Company's PRC subsidiaries are required to set aside at least 10% of their annual after-tax profit as statutory surplus reserves until the cumulative amount reaches 50% of their registered capital[178]. Impact of External Factors - The company’s operations have been adversely impacted by periodic short-term lockdowns and travel restrictions due to COVID-19[132].