Core Viewpoint - Smart Powerr Corp. has signed a strategic cooperation agreement with Shidai Huazhi (Jiangsu) Energy Technology Co., Ltd. to enhance urban energy infrastructure and support the "dual carbon" goal through integrated solutions in photovoltaic, energy storage, charging, and inspection [1][8]. Group 1: Strategic Cooperation Details - The cooperation will focus on constructing integrated infrastructure for photovoltaic, energy storage, charging, and inspection, including ultra-fast charging stations that can save over 1 million yuan in electricity bills annually and reduce carbon emissions by over 1,000 tons per year [3]. - Shidai Huazhi's expertise in energy storage will be leveraged to create a demonstration urban energy infrastructure solution [2]. Group 2: Technological Innovations - The collaboration aims to build intelligent microgrid systems with self-regulating capabilities, expecting that by 2026, adjustable resource response electricity in the microgrid will exceed 30% [4]. - The two parties will explore an energy closed-loop model to improve urban energy management efficiency, potentially leading to a market scale of hundreds of trillions of yuan before 2030 [5]. Group 3: Operational Management - Shidai Huazhi will develop a software management platform for intelligent inspection and ultra-fast charging stations, ensuring stable operation throughout the project lifecycle [6]. Group 4: Future Outlook - The partnership may extend to capital-level cooperation, including the establishment of a joint venture subsidiary, as the integrated industry of photovoltaic, energy storage, charging, and inspection is expected to experience explosive growth [8].

Core Viewpoint - Smart Powerr Corp. has entered a strategic cooperation agreement with Shidai Huazhi (Jiangsu) Energy Technology Co., Ltd. to enhance urban energy infrastructure and support the "dual carbon" goal through integrated solutions in photovoltaic, energy storage, charging, and inspection [1][7] Group 1: Strategic Cooperation Details - The cooperation will focus on constructing integrated infrastructure for photovoltaic, energy storage, charging, and inspection, including ultra-fast charging stations that can save over one million yuan in electricity bills annually and reduce carbon emissions by more than one thousand tons per year [3] - Shidai Huazhi's actual controller, Mr. Huang Shilin, brings significant industry experience from his previous role at Contemporary Amperex Technology Co., Limited (CATL), enhancing the collaboration's operational advantages in energy storage [2] Group 2: Technological Innovations - The partnership aims to develop intelligent microgrid systems utilizing AC-DC hybrid technologies, with expectations that by 2026, adjustable resource response electricity in the microgrid will exceed 30%, contributing to a trillion-level "energy internet +" industrial cluster [4] - The energy closed-loop mode of "self-generation for self-use + surplus power feeding into the grid" will be explored, potentially creating a market scale of hundreds of trillions of yuan before 2030 [5] Group 3: Operational Management - Shidai Huazhi will establish a software management platform for intelligent inspection and ultra-fast charging stations, ensuring stable operation throughout the project lifecycle [6] - The chairman of CREG emphasized that this cooperation is a significant step in constructing a new power system and aims to provide replicable solutions for global energy transition [6] Group 4: Future Outlook - The two parties plan to explore further cooperation at the capital level, including the establishment of a joint venture subsidiary, anticipating explosive growth in the integrated industry of photovoltaic, energy storage, charging, and inspection [7]

Financial Performance - The Company reported a net loss of $1,559,012 for the year ended December 31, 2024, compared to a net loss of $746,786 for 2023, indicating an increase in losses of approximately 108.5%[299] - Total operating expenses for 2024 were $1,093,468, up from $798,473 in 2023, reflecting a year-over-year increase of approximately 37%[324] - The net loss for the year ended December 31, 2024, was $1,559,012, an increase of $812,226 from a net loss of $746,786 in 2023, driven by increased operating expenses and impairment provisions[330] - Net non-operating expenses for 2024 were $451,547, a significant decline from non-operating income of $148,387 in 2023, largely due to a $200,000 bad debt provision[328] - The company reported a total accumulated deficit of $46,864,738 as of December 31, 2024, compared to $45,305,726 in 2023[348] Operational Status - The Company currently holds five power generating systems that are not producing electricity, indicating a need for operational improvements[299] - The company incurred an operating loss of $1.1 million and generated negative operating cash flows of $10.8 million for the year ended December 31, 2024[338] Cash Flow and Liquidity - The cash flow forecast suggests the Company will have sufficient cash to fund operations for the next 12 months[299] - As of December 31, 2024, the company had cash and equivalents of $25,341, with current liabilities of $13.10 million and a current ratio of 9.25:1[331] - Net cash used in operating activities decreased to $10,764,096 in 2024 from $68,099,899 in 2023, mainly due to reduced cash outflow related to an entrusted loan[332] - The company believes it has sufficient cash and access to commercial institutions to meet its working capital needs as of December 31, 2024[350] Strategic Direction - The Company is transitioning to an energy storage integrated solution provider and is exploring opportunities in high-growth potential industries such as large-scale photovoltaic and wind power stations[298] - The Company plans to pursue disciplined and targeted expansion strategies in market areas currently not served[298] Revenue Generation - Total sales for the years ended December 31, 2024 and 2023 were reported as $0, indicating no revenue generation during these periods[324] - The Company has not recognized any income from Erdos TCH due to uncertainties regarding collection, despite expecting compensation of RMB 1 million ($145,460) per month until operations resume[307] Financial Instruments and Guarantees - The company has not entered into any financial guarantees or derivative contracts that are indexed to its shares[349] Accounting Standards - The Company’s financial statements are prepared in accordance with US GAAP and in US Dollars[296]

Financial Performance - For the nine months ended September 30, 2024, the Company reported a net loss of $952,285, compared to a net loss of $518,069 for the same period in 2023, indicating an increase in losses of approximately 83.6% year-over-year [132]. - The net loss for the three months ended September 30, 2024, was $262,731, up from $180,723 in the same period of 2023, reflecting a year-over-year increase of about 45.3% [132]. - The Company had an accumulated deficit of $61.45 million as of September 30, 2024 [132]. - Net non-operating expenses for the nine months ended September 30, 2024, were $190,577, compared to non-operating income of $185,176 for the same period in 2023 [157]. - Income tax expense for the nine months ended September 30, 2024, was $14,168, compared to $97,140 for the same period in 2023, with effective tax rates of 1.5% and 23.1%, respectively [158]. - Net loss for the nine months ended September 30, 2024, was $952,285, an increase of $434,216 compared to a net loss of $518,069 for the same period in 2023 [159]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $330,673, a significant decrease from $68,264,743 for the same period in 2023 [169]. - Operating expenses for the three months ended September 30, 2024, were $188,295, an increase of $41,425 or 28.21% compared to $146,870 for the same period in 2023 [164]. - Total operating expenses for the nine months ended September 30, 2024, were $747,540, an increase of $141,435 or 23.34% compared to $606,105 for the same period in 2023 [156]. - Net loss for the three months ended September 30, 2024, was $262,731, an increase of $82,008 compared to a net loss of $180,723 for the same period in 2023 [167]. Business Strategy and Operations - The Company is transitioning to become an energy storage integrated solution provider and is actively seeking opportunities in high-growth potential industries, including large-scale photovoltaic and wind power stations [130]. - The Company plans to raise additional funds through private or public offerings or bank loans to support its business strategy [133]. - The Company has not recognized any income from Erdos TCH due to uncertainties regarding collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume [138]. - The Company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems, with a prepayment of $66.8 million made in 2023 [172]. - Erdos TCH, a joint venture, has two power generation systems with a total capacity of 18 MW in Phase I and three systems with a total capacity of 27 MW in Phase II [138]. Financial Position and Liquidity - Cash and equivalents as of September 30, 2024, were $69.12 million, with a current ratio of 5.73:1 and a liability-to-equity ratio of 0.25:1 [168]. - The Company 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 [186]. - Total contractual obligations as of September 30, 2024, amount to $16,373,727, including notes payable of $4,978,821 and entrusted loans of $11,333,512 [186]. - As of September 30, 2024, the Company reported an unrestricted accumulated deficit of $61,449,656 and restricted retained earnings of $15,191,645 [184]. Regulatory and Environmental Factors - The Company’s subsidiaries primarily conduct operations in the PRC, which may influence its business and financial condition due to the local political and economic environment [147]. - The Company's operations are primarily in the PRC, making its earnings susceptible to fluctuations in foreign currency exchange rates, particularly between RMB and the U.S. dollar [187]. - The Company is required to maintain a statutory reserve by appropriating 10% of its annual after-tax profit until it reaches 50% of its registered capital, impacting dividend distribution [182]. Accounting and Reporting - The Company's financial statements are prepared in accordance with US GAAP, and significant inter-company accounts and transactions have been eliminated in consolidation [143].

Financial Performance - For the six months ended June 30, 2024, the company reported a net loss of $689,554, compared to a net loss of $337,346 for the same period in 2023, indicating a 104.5% increase in losses year-over-year[130]. - Net loss for the six months ended June 30, 2024, was $689,554, an increase of $352,208 compared to a net loss of $337,346 for the same period in 2023[153]. - Net loss for the three months ended June 30, 2024, was $409,757, an increase of $161,915 compared to a net loss of $247,842 for the same period in 2023[159]. - Net non-operating expenses for the six months ended June 30, 2024, were $116,141, compared to non-operating income of $184,381 for the same period in 2023[152]. - Total operating expenses for the six months ended June 30, 2024, were $559,237, an increase of $100,002 or 21.78% compared to $459,235 for the same period in 2023[151]. - Operating expenses for the three months ended June 30, 2024, totaled $350,803, a decrease of $23,604 or 6.30% compared to $374,407 for the same period in 2023[157]. - Income tax expense for the three months ended June 30, 2024, was nil, compared to $57,958 for the same period in 2023[158]. Financial Position - The accumulated deficit as of June 30, 2024, stands at $61.19 million, reflecting the ongoing financial challenges faced by the company[130]. - As of June 30, 2024, the company reported an unrestricted accumulated deficit of $(61,186,925) and total accumulated deficit of $(45,995,280) compared to $(60,497,371) and $(45,305,726) respectively as of December 31, 2023[176]. - The company maintains a statutory reserve of $15,191,645, which is restricted retained earnings and cannot be distributed as cash dividends[176]. - The company is required to allocate at least 10% of its annual after-tax profit to a surplus reserve until it reaches 50% of its registered capital, which restricts the ability to distribute cash dividends[173][174]. - The company's contractual obligations as of June 30, 2024, total $16,334,466, including notes payable of $5,129,312 and entrusted loans of $11,143,634[179]. - Cash and equivalents as of June 30, 2024, were $68.10 million, with a current ratio of 5.68:1 and a liability-to-equity ratio of 0.25:1[161]. Cash Flow and Investments - Net cash used in operating activities for the six months ended June 30, 2024, was $248,132, a significant decrease from $69,042,292 for the same period in 2023[162]. - Net cash provided by investing activities for the six months ended June 30, 2024, was $68,542,364, compared to net cash used in investing activities of $69,994,412 for the same period in 2023[164]. - The company made a prepayment of $66.8 million to Hubei Bangyu New Energy Technology Co., Ltd. for energy storage battery systems as part of its expansion into energy storage solutions[163]. Business Strategy and Operations - The company is transitioning to an energy storage integrated solution provider, targeting high-growth potential industries such as large-scale photovoltaic and wind power stations[128]. - The company plans to pursue disciplined and targeted expansion strategies in market areas currently not served, indicating a focus on growth and diversification[128]. - The company is actively exploring opportunities to apply energy storage technologies to new industries, indicating a strategic shift towards innovation and market expansion[128]. - The company currently holds five power generating systems that are not producing electricity, highlighting operational challenges[130]. - 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[135]. Funding and Financial Support - Management intends to raise additional funds through private or public offerings or bank loans to support its business plan and operations[131]. - The company believes it has sufficient cash and access to loans to meet its working capital needs, supported by the Chinese government's backing for energy-saving businesses[179]. Currency and Market Risks - The company's operations are primarily in the PRC, making its earnings susceptible to foreign currency exchange rate fluctuations, particularly between the U.S. dollar and RMB[181].

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].

Financial Performance - For the year ended December 31, 2023, the company reported a net loss of $746,786, a significant improvement from a net loss of $4,457,327 in 2022, indicating a reduction in losses by approximately 83.2%[295] - The company has an accumulated deficit of $60.50 million as of December 31, 2023[295] - Total sales for the years ended December 31, 2023 and 2022 were $0[314] - Operating expenses decreased by $3,081,960 or 79.4% from $3,880,433 in 2022 to $798,473 in 2023, primarily due to reduced R&D and litigation expenses[315] - Net non-operating income for 2023 was $148,387, a significant improvement from non-operating expenses of $507,242 in 2022[316] - Net loss for 2023 was $746,786, a decrease of $3,710,541 compared to a net loss of $4,457,327 in 2022[317] - The effective income tax rate for 2023 was 14.9%, compared to 1.6% in 2022[317] - The company's unrestricted accumulated deficit as of December 31, 2023, was $60,497,371, with total accumulated deficit of $45,305,726[335] Cash Flow and Liquidity - The company’s cash flow forecast indicates sufficient cash to fund operations for the next 12 months from the date of issuance of the financial statements[295] - As of December 31, 2023, the company had cash and equivalents of $32,370 and current liabilities of $23.87 million, resulting in a current ratio of 5.72:1[319] - Net cash used in operating activities was $68,099,899 in 2023, compared to $351,880 in 2022, primarily due to increased cash outflow on advance to suppliers[320] - The company 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[338] - The company has a history of achieving financing objectives due to stable cash inflows and good credit ratings[338] Business Strategy and Operations - The company is transitioning to an energy storage integrated solution provider and is actively seeking opportunities in high-growth potential industries, including large-scale photovoltaic and wind power stations[294] - The company plans to pursue disciplined and targeted expansion strategies in market areas currently not served[294] - The company intends to raise additional funds through private or public offerings or bank loans to support its operations and business plan[296] Joint Ventures and Contracts - The company has not recognized any income from its joint venture, Erdos TCH, due to uncertainties regarding the collection of compensation during its operational hiatus[299] - Erdos TCH has a total power capacity of 45 MW, with two systems in Phase I (18 MW) and three systems in Phase II (27 MW)[299] - The company holds five power generating systems through Erdos TCH, which are currently not producing electricity[295] - The company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for $82.3 million to purchase energy storage battery systems, with a prepayment of $65.9 million made as of December 31, 2023[321] - As of December 31, 2023, the company has total contractual obligations of $16,438,052, with $5,225,033 due within one year and $11,213,019 in entrusted loans[338] - The company had a short-term loan of $68,730,851 to Jinan Youkai Engineering Consulting Co., Ltd. as of December 31, 2023, with repayment expected in January 2024[324] Subsidiaries - The company’s subsidiaries include Yinghua and Sifang, with Sifang's registered capital at $29.80 million[297]

Financial 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].

Financial Performance - For the six months ended June 30, 2023, the Company reported a net loss of $337,346, compared to a net loss of $666,269 for the same period in 2022, indicating a 49.3% improvement in losses year-over-year[137]. - For the three months ended June 30, 2023, the Company had a net loss of $247,842, slightly higher than the net loss of $224,810 for the same period in 2022, reflecting a 10.2% increase in quarterly losses[137]. - The Company has an accumulated deficit of $60.08 million as of June 30, 2023, highlighting ongoing financial challenges[137]. - Total sales for the six months ended June 30, 2023 and 2022 were $0[162]. - Operating expenses for the six months ended June 30, 2023 were $459,235, an increase of $75,729 or 19.7% compared to $383,506 in 2022[163]. - Net cash used in operating activities was $69,042,292 for the six months ended June 30, 2023, compared to $167,599 in 2022[174]. - Income tax expense for the six months ended June 30, 2023 was $62,492, compared to $23,557 in 2022[166]. - The consolidated effective income tax rate for the six months ended June 30, 2023 was 22.7%, compared to 3.7% in 2022[166]. - The Company has an unrestricted accumulated deficit of $(60,082,175) as of June 30, 2023, compared to $(59,726,943) as of December 31, 2022[186]. - The total accumulated deficit stands at $(44,896,286) as of June 30, 2023, compared to $(44,558,940) as of December 31, 2022[186]. Liquidity and Financial Position - As of June 30, 2023, the Company had cash on hand of $456,155 and a loan receivable of $67,120,596 (RMB 485.0 million), which was fully repaid on July 3, 2023, ensuring liquidity for the next 12 months[138]. - As of June 30, 2023, the Company had cash and equivalents of $456,155 and a current ratio of 5.75:1[173]. - The Company believes it has sufficient cash and access to loans to meet its working capital needs as of June 30, 2023[189]. Business Strategy and Operations - The Company is transitioning to become an energy storage integrated solution provider, targeting high-growth potential industries such as industrial complexes and renewable energy sectors[135]. - The Company aims to implement disciplined expansion strategies in market areas currently not served, focusing on energy storage technologies[135]. - The Company plans to raise additional funds through private or public offerings or bank loans to support its business transformation and expansion efforts[139]. - The Company has not recognized any income from its joint venture with Erdos TCH due to uncertainties regarding collection, despite ongoing compensation of RMB 1 million ($145,460) per month until operations resume[144]. - The Company’s subsidiaries, including Xi'an TCH and Zhonghong, are primarily engaged in providing energy-saving solutions and services, contributing significantly to the Company’s consolidated assets and liabilities[152]. Financial Obligations and Regulations - The Company's contractual obligations total $16,451,051 as of June 30, 2023, with $5,460,094 due within one year[189]. - The Company has not entered into any financial guarantees or derivative contracts that would affect its financial obligations[187]. - PRC regulations require foreign-invested enterprises to allocate at least 10% of their annual after-tax profit to surplus reserves until it reaches 50% of registered capital[183]. - The Company's PRC subsidiaries are restricted from distributing cash dividends until statutory reserves are met, which may affect the Company's ability to conduct operations[181]. - The Company relies on dividends from its PRC subsidiaries for working capital, but these subsidiaries have not transferred any earnings to the Company to date[179]. Exchange Rate Impact - Exchange rate fluctuations may impact the Company's earnings, as operations are primarily conducted in RMB[190].

Financial Performance - For the three months ended March 31, 2023, the Company reported a net loss of $89,504, compared to a net loss of $441,459 for the same period in 2022, indicating a 79.8% improvement in losses year-over-year[130] - Net loss for the three months ended March 31, 2023 was $89,504, a decrease of $351,955 from a net loss of $441,459 for the same period in 2022[159] - Total sales for the three months ended March 31, 2023 and 2022 were $0[156] - Operating expenses decreased by $110,952 or 56.7% to $84,828 for the three months ended March 31, 2023, compared to $195,780 for the same period in 2022[157] - Income tax expense was $4,534 for the three months ended March 31, 2023, compared to $17,707 for the same period in 2022[159] - The Company recorded $88,195 in interest income for the three months ended March 31, 2023, offset by $111,104 in interest expense[158] Cash and Liabilities - The Company had cash on hand of $39,406 and a loan receivable of $140,614,361 (RMB 966.0 million) from Jinan Youkai Engineering Consulting Co., Ltd., which was fully repaid on April 3, 2023[131] - Cash and equivalents as of March 31, 2023 were $39,406, with current liabilities of $24.10 million and a current ratio of 5.85:1[161] - The Company had a liability-to-equity ratio of 0.25:1 as of March 31, 2023[161] - As of March 31, 2023, the company has total contractual obligations of $17,158,397, with $5,601,075 due in 1 year or less[175] - 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[175] Business Strategy and Operations - The Company plans to pursue disciplined and targeted expansion strategies into new market areas, including industrial and commercial complexes and large-scale photovoltaic and wind power stations[128] - The Company is transforming into an energy storage integrated solution provider, exploring applications of energy storage technologies in high-growth potential industries[128] - The Company has not recognized any income from the Erdos TCH joint venture due to uncertainty of collection, despite receiving monthly compensation of RMB 1 million ($145,460) until operations resume[137] - The Company owns 100% of Xi'an Zhonghong New Energy Technology Co., Ltd., which provides energy-saving solutions and services[139] - The Company recorded a loss of $624,133 related to the transfer of the Chengli CDQ WHPG station, which was part of a loan repayment agreement[141] Market and Economic Environment - The Company’s operations are significantly influenced by the political, economic, and legal environments in the People's Republic of China[148] - The company is exposed to exchange rate risk due to operations primarily conducted in the PRC, affecting earnings when transactions are denominated in RMB[177] Accumulated Deficit - As of March 31, 2023, the Company had an accumulated deficit of $59.82 million[130] - The Company’s unrestricted accumulated deficit was $(59,819,037) as of March 31, 2023[172] Cash Flow - Net cash used in operating activities was $70,282 for the three months ended March 31, 2023, compared to $38,420 for the same period in 2022[162] - Net cash used in investing activities was $141,070,591 for the three months ended March 31, 2023, primarily due to a short-term loan to Jinan Youkai Engineering Consulting Co., Ltd[163]