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].
Smart Powerr (CREG) - 2022 Q3 - Quarterly Report