CETY(US:CETY)2024-08-19 18:56Revenue Performance - For the six months ended June 30, 2024, total revenue was $1,709,151, a decrease of 47.8% compared to $3,274,001 for the same period in 2023, primarily due to lower revenue from the natural gas business and deconsolidation of the Shuya entity [204][209]. - Revenue from the natural gas business amounted to $1,219,629, down 56.3% from $2,796,649 for the same period in 2023, due to economic slowdown in China and strategic focus on non-Chinese markets [212]. - Revenue from the waste-to-energy segment was $331,487, a decrease from $385,404 for the same period in 2023, with expectations for significantly higher revenue in the future [211]. - The engineering and manufacturing segment generated revenue of $9,341, down from $36,332 for the same period in 2023, as the team transitions to establish an innovation center in Europe [210]. Profitability and Loss - Gross profit for the six months ended June 30, 2024, was $429,035, slightly lower than $444,018 for the same period in 2023, with higher margins attributed to non-natural gas operations [204][213]. - The net loss for the six months ended June 30, 2024, was $2,251,278, compared to a net loss of $1,868,163 for the same period in 2023, driven by increased salaries and marketing expenses [205]. - Net loss for the six months ended June 30, 2024, was $2,251,278, an increase from the loss of $1,868,163 in the same period of 2023, driven by higher expenditures in salaries, IT, and legal fees [224]. Expenses - Salaries expense for the six months ended June 30, 2024, totaled $966,843, a significant increase from $535,237 in the same period of 2023, attributed to hiring key personnel and expanding the workforce [216]. - Travel expenses decreased to $81,224 for the six months ended June 30, 2024, compared to $200,139 in the same period of 2023, due to reduced travel related to China NG business development [217]. - Professional fees increased to $353,065 for the six months ended June 30, 2024, from $177,437 in the same period of 2023, primarily due to engaging a new audit firm [218]. - Interest and finance fees decreased to $422,863 for the six months ended June 30, 2024, down from $1,349,594 in the same period of 2023, due to fewer notes and bridge financing [223]. Cash Flow and Financing - Net cash used in operating activities was $(1,612,034) for the six months ended June 30, 2024, compared to $(2,620,809) in 2023, indicating improved cash flow management [224]. - Net cash provided by investing activities increased to $83,160 for the six months ended June 30, 2024, from $14,319 in the same period of 2023 [224]. - Net cash provided by financing activities was $1,828,380 for the six months ended June 30, 2024, down from $3,159,324 in the same period of 2023, reflecting changes in financing strategy [224]. - The company is working to finalize financing for its Vermont project in Q3 2024, as it currently relies on high-cost financing options [223]. Financial Position - The company had a working capital of $300,071 and an accumulated deficit of $25,429,293 as of June 30, 2024, raising concerns about its ability to continue as a going concern [203]. - Stockholder's equity decreased to $4,579,726 as of June 30, 2024, from $5,869,198 as of December 31, 2023, primarily due to the net loss for the year-to-date results [205]. - As of June 30, 2024, the company had $33,000 of deferred revenue expected to be recognized in Q4 2024, and outstanding customer deposits of $41,462 [240]. Strategic Outlook - The company expects larger revenue contributions from waste-to-energy, heat recovery, and engineering, procurement, and construction (EPC) segments in the latter half of the year [206]. - The four-segment strategy is believed to create operational synergies and cross-selling opportunities, with a positive outlook driven by global commitments to renewable energy [208]. - The Company will continue to rely on equity sales of common shares to fund business operations, which may result in dilution for existing stockholders [246]. Accounting and Compliance - Shuya is determined to be a variable interest entity (VIE) of JHJ, leading to its consolidation into the financial statements effective January 1, 2023 [242]. - Following the Termination Agreement on January 1, 2024, Shuya will no longer be consolidated as the Company holds less than 50% of the voting rights [243]. - There are no significant off-balance sheet arrangements that could materially affect the Company's financial condition or results of operations [247]. - The Company believes that recently issued accounting standards will not have a material impact on its consolidated financial position or results of operations upon adoption [248].