Smart Powerr (US:CREG)2025-05-15 20:36PART I Financial Statements 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 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 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 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 202518 Consolidated Statements of Cash Flows 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 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 stations3079 - A short-term loan of $55.9 million to Xi'an Yingtai was fully collected by January 10, 202576 - 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 202579 - 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 outstanding99121 - 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 stock125126 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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 contract132 - Operating expenses increased by $962,779 (462%) year-over-year, mainly due to a $948,648 rise in financing costs135136 - Net loss increased by $604,663 to $884,460 in Q1 2025, driven by the surge in operating expenses139 Liquidity and Capital Resources 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 suppliers141 - 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 company148151153 Contractual Obligations 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 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 risk159 - 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 PRC160 Controls and Procedures 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 effective162 - There were no material changes to the company's internal control over financial reporting during the fiscal quarter ended March 31, 2025163 PART II Legal Proceedings 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, 2024167168 - 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 judgment169 - A U.S. court entered a default judgment against the company, leading to the issuance of 128,765 shares to settle a claim of $139,066170 Risk Factors 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 information171 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None172 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None173 Mine Safety Disclosures This item is not applicable to the company - Not applicable175 Other Information The company reported no other information for this item - None176 Exhibits 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 Act177183