Financial Performance - For the three months ended March 31, 2024, the company reported a net loss of $279,797, compared to a net loss of $89,504 for the same period in 2023, indicating a significant increase in losses [118]. - The company has an accumulated deficit of $60.78 million as of March 31, 2024, reflecting ongoing financial challenges [118]. - Total sales for the three months ended March 31, 2024, and 2023 were $0 [140]. - Operating expenses increased by $123,602 or 145.7%, totaling $208,430 for the three months ended March 31, 2024, compared to $84,828 for the same period in 2023 [143]. - Net non-operating expenses were $57,187 for the three months ended March 31, 2024, compared to $142 for the same period in 2023 [144]. - Net loss for the three months ended March 31, 2024, was $279,797, an increase of $190,293 from the net loss of $89,504 for the same period in 2023 [145]. - Net cash used in operating activities was $183,519 for the three months ended March 31, 2024, compared to $70,283 for the same period in 2023 [147]. - The company's unrestricted accumulated deficit was $(60,777,199) as of March 31, 2024 [162]. Cash Flow and Liquidity - As of March 31, 2024, the company had cash and equivalents of $68.58 million and a current ratio of 5.75:1 [146]. - The company’s cash flow forecast suggests it will have sufficient cash to fund operations for the next 12 months [118]. - 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 [165]. - The entrusted loan, including interest payable, amounts to $11,193,581 [165]. - As of March 31, 2024, the company has total contractual obligations of $16,222,653, with $5,029,072 due in 1 year or less [165]. Business Strategy and Operations - The company is transitioning to an energy storage integrated solution provider and plans to target new market areas with high growth potential, including industrial complexes and renewable energy sectors [116]. - The company intends to raise additional funds through private or public offerings or bank loans to support its business plan and operations [119]. - The company currently holds five power generating systems that are not producing electricity, indicating a need for operational improvements [118]. - The company is exploring opportunities to apply energy storage technologies to new industries, aiming for disciplined expansion strategies [116]. - The company’s subsidiaries primarily generate revenue from energy-saving solutions and services, with significant reliance on Shanghai TCH and its subsidiaries [130]. Joint Ventures and Risks - The company has not recognized any income from its joint venture with Erdos TCH due to uncertainties in collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume [124]. - The company is exposed to exchange rate risk due to operations primarily conducted in the PRC, affecting earnings when transactions are denominated in RMB [167]. - The company’s financial statements are prepared in accordance with US GAAP, and it faces concentration of credit risk due to its operations in the PRC [132]. Investments - The company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems [149]. - Net cash provided by investing activities was $68,564,217 for the three months ended March 31, 2024, compared to net cash used of $141,070,591 for the same period in 2023 [150]. - The company had a short-term loan of $68,730,851 to Jinan Youkai Engineering Consulting Co., Ltd. as of December 31, 2023 [153].
Smart Powerr (CREG) - 2024 Q1 - Quarterly Report