CETY(CETY)2024-08-19 18:56Revenue Performance - For the six months ended June 30, 2024, total revenue was 3,274,001 for the same period in 2023, primarily due to lower revenue from the natural gas business and deconsolidation of the Shuya entity [204][209]. - Revenue from the natural gas business amounted to 2,796,649 for the same period in 2023, due to economic slowdown in China and strategic focus on non-Chinese markets [212]. - Revenue from the waste-to-energy segment was 385,404 for the same period in 2023, with expectations for significantly higher revenue in the future [211]. - The engineering and manufacturing segment generated revenue of 36,332 for the same period in 2023, as the team transitions to establish an innovation center in Europe [210]. Profitability and Loss - Gross profit for the six months ended June 30, 2024, was 444,018 for the same period in 2023, with higher margins attributed to non-natural gas operations [204][213]. - The net loss for the six months ended June 30, 2024, was 1,868,163 for the same period in 2023, driven by increased salaries and marketing expenses [205]. - Net loss for the six months ended June 30, 2024, was 1,868,163 in the same period of 2023, driven by higher expenditures in salaries, IT, and legal fees [224]. Expenses - Salaries expense for the six months ended June 30, 2024, totaled 535,237 in the same period of 2023, attributed to hiring key personnel and expanding the workforce [216]. - Travel expenses decreased to 200,139 in the same period of 2023, due to reduced travel related to China NG business development [217]. - Professional fees increased to 177,437 in the same period of 2023, primarily due to engaging a new audit firm [218]. - Interest and finance fees decreased to 1,349,594 in the same period of 2023, due to fewer notes and bridge financing [223]. Cash Flow and Financing - Net cash used in operating activities was (2,620,809) in 2023, indicating improved cash flow management [224]. - Net cash provided by investing activities increased to 14,319 in the same period of 2023 [224]. - Net cash provided by financing activities was 3,159,324 in the same period of 2023, reflecting changes in financing strategy [224]. - The company is working to finalize financing for its Vermont project in Q3 2024, as it currently relies on high-cost financing options [223]. Financial Position - The company had a working capital of 25,429,293 as of June 30, 2024, raising concerns about its ability to continue as a going concern [203]. - Stockholder's equity decreased to 5,869,198 as of December 31, 2023, primarily due to the net loss for the year-to-date results [205]. - As of June 30, 2024, the company had 41,462 [240]. Strategic Outlook - The company expects larger revenue contributions from waste-to-energy, heat recovery, and engineering, procurement, and construction (EPC) segments in the latter half of the year [206]. - The four-segment strategy is believed to create operational synergies and cross-selling opportunities, with a positive outlook driven by global commitments to renewable energy [208]. - The Company will continue to rely on equity sales of common shares to fund business operations, which may result in dilution for existing stockholders [246]. Accounting and Compliance - Shuya is determined to be a variable interest entity (VIE) of JHJ, leading to its consolidation into the financial statements effective January 1, 2023 [242]. - Following the Termination Agreement on January 1, 2024, Shuya will no longer be consolidated as the Company holds less than 50% of the voting rights [243]. - There are no significant off-balance sheet arrangements that could materially affect the Company's financial condition or results of operations [247]. - The Company believes that recently issued accounting standards will not have a material impact on its consolidated financial position or results of operations upon adoption [248].