Smart Powerr (US:CREG)2023-11-12 16:00Financial Performance - For the nine months ended September 30, 2023, the Company reported a net loss of $518,069, compared to a net loss of $1,113,906 for the same period in 2022, indicating a 53% improvement in losses year-over-year [135]. - Net loss for the nine months ended September 30, 2023, was $518,069, a decrease of $595,837 compared to a net loss of $1,113,906 in 2022 [160]. - Net loss for the three months ended September 30, 2023, was $180,723, a decrease of $266,914 compared to a net loss of $447,637 in 2022 [166]. - Total sales for the nine months ended September 30, 2023, and 2022 were $0 [158]. - Operating expenses increased by $53,841 or 9.7% to $606,105 for the nine months ended September 30, 2023, primarily due to increased audit fees and professional service expenses [158]. - Operating expenses for the three months ended September 30, 2023, decreased by $21,888 or 13% to $146,870 compared to the same period in 2022 [164]. - Net non-operating income for the nine months ended September 30, 2023, was $185,176, compared to non-operating expenses of $525,131 for the same period in 2022 [159]. - Income tax expense for the nine months ended September 30, 2023, was $97,140, with an effective income tax rate of 23.1% [160]. Cash and Liquidity - The Company had cash on hand of $67,950,506 as of September 30, 2023, which is expected to satisfy its liquidity needs for the next 12 months [135]. - Cash and equivalents as of September 30, 2023, were $67.95 million, with a current ratio of 5.79:1 and a liability-to-equity ratio of 0.25:1 [167]. - Net cash used in operating activities was $68,264,743 for the nine months ended September 30, 2023, compared to $309,125 in 2022 [168]. - The company believes it 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 [184]. Accumulated Deficit and Obligations - The accumulated deficit of the Company reached $60.27 million as of September 30, 2023 [135]. - As of September 30, 2023, the company reported an unrestricted accumulated deficit of $(60,268,346) and total accumulated deficit of $(45,077,009) compared to $(59,726,943) and $(44,558,940) respectively as of December 31, 2022, indicating a slight increase in deficits year-over-year [181]. - The company's total contractual obligations as of September 30, 2023, amount to $16,429,376, with $5,368,002 due within one year and $11,061,374 in entrusted loans [184]. - The company is required by PRC corporate law to maintain a statutory reserve of at least 10% of its annual after-tax profit, resulting in restricted retained earnings of $15,191,337 as of September 30, 2023, up from $15,168,003 at the end of 2022 [181]. Business Operations and Strategy - The Company is in the process of transforming into an energy storage integrated solution provider and is actively seeking expansion opportunities in high-growth potential industries [132]. - The Company has not recognized any income from its joint venture with Erdos TCH due to uncertainties regarding collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume [140]. - The Company’s subsidiaries, including Yinghua and Sifang, are primarily engaged in energy-saving solutions and financial leasing, with significant operations derived from Shanghai TCH and its subsidiaries [137]. - The Company’s revenue recognition for sales-type leases occurs at the inception of the lease, with revenue recorded when collection of payments is probable [150]. Regulatory and Economic Environment - The Company's business operations are influenced by the political, economic, and legal environments in the PRC, which may affect its financial condition and results [148]. - The company's operations are primarily in the PRC, making its earnings susceptible to fluctuations in foreign currency exchange rates, particularly between the U.S. dollar and RMB [185]. Future Funding - Management plans to raise additional funds through private or public offerings or loans, although there are no guarantees regarding the success of these efforts [136]. - The company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems [170].