Financial Performance - For the nine months ended September 30, 2024, the Company reported a net loss of 952,285,comparedtoanetlossof518,069 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,upfrom180,723 in the same period of 2023, reflecting a year-over-year increase of about 45.3% [132]. - The Company had an accumulated deficit of 61.45millionasofSeptember30,2024[132].−Netnon−operatingexpensesfortheninemonthsendedSeptember30,2024,were190,577, compared to non-operating income of 185,176forthesameperiodin2023[157].−IncometaxexpensefortheninemonthsendedSeptember30,2024,was14,168, compared to 97,140forthesameperiodin2023,witheffectivetaxratesof1.5952,285, an increase of 434,216comparedtoanetlossof518,069 for the same period in 2023 [159]. - Net cash used in operating activities for the nine months ended September 30, 2024, was 330,673,asignificantdecreasefrom68,264,743 for the same period in 2023 [169]. - Operating expenses for the three months ended September 30, 2024, were 188,295,anincreaseof41,425 or 28.21% compared to 146,870forthesameperiodin2023[164].−TotaloperatingexpensesfortheninemonthsendedSeptember30,2024,were747,540, an increase of 141,435or23.34606,105 for the same period in 2023 [156]. - Net loss for the three months ended September 30, 2024, was 262,731,anincreaseof82,008 compared to a net loss of 180,723forthesameperiodin2023[167].BusinessStrategyandOperations−TheCompanyistransitioningtobecomeanenergystorageintegratedsolutionproviderandisactivelyseekingopportunitiesinhigh−growthpotentialindustries,includinglarge−scalephotovoltaicandwindpowerstations[130].−TheCompanyplanstoraiseadditionalfundsthroughprivateorpublicofferingsorbankloanstosupportitsbusinessstrategy[133].−TheCompanyhasnotrecognizedanyincomefromErdosTCHduetouncertaintiesregardingcollection,despitereceivingmonthlycompensationofRMB1million(145,460) until operations resume [138]. - The Company entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for 82.3milliontopurchaseenergystoragebatterysystems,withaprepaymentof66.8 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 69.12million,withacurrentratioof5.73:1andaliability−to−equityratioof0.25:1[168].−TheCompanyhassufficientcashandaccesstocommercialloanstomeetitsworkingcapitalneeds,supportedbytheChinesegovernment′sbackingforenergy−savingbusinesses[186].−TotalcontractualobligationsasofSeptember30,2024,amountto16,373,727, including notes payable of 4,978,821andentrustedloansof11,333,512 [186]. - As of September 30, 2024, the Company reported an unrestricted accumulated deficit of 61,449,656andrestrictedretainedearningsof15,191,645 [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].
