CDT Environmental Technology(CDTG) - 2024 Q4 - Annual Report

Financial Performance - Total revenues decreased by approximately $4.4 million, or 13.0$29.8 million for the year ended December 31, 2024, compared to approximately $34.2 million for the same period in 2023[324]. - Revenues from sewage treatment systems installations decreased by approximately$3.9 million, or 11.9%, to approximately $28.4 million for the year ended December 31, 2024[326]. - Gross profit decreased by approximately$0.1 million, or 1.2%, to approximately $11.2 million for the year ended December 31, 2024[332]. - Total operating expenses increased by approximately$6.5 million, or 233.5%, to approximately $9.2 million for the year ended December 31, 2024[334]. - Net income decreased by approximately$5.6 million, or 80.0%, to approximately $1.4 million for the year ended December 31, 2024, from approximately$7.0 million for the same period in 2023[340]. - Total revenues increased by approximately $5.4 million, or 18.6$34.2 million for the year ended December 31, 2023, compared to approximately $28.8 million for the same period in 2022[342]. - Revenues from sewage treatment systems increased by approximately$5.7 million, or 21.5%, to approximately $32.3 million for the year ended December 31, 2023[344]. - Gross profit increased by approximately$1.1 million, or 11.0%, to approximately $11.4 million for the year ended December 31, 2023[349]. - Total operating expenses decreased by approximately$1.1 million, or 28.9%, to approximately $2.8 million for the year ended December 31, 2023[351]. Cash Flow and Working Capital - Net cash used in operating activities was approximately$1.99 million for the year ended December 31, 2024, a decrease from $3.13 million in 2023[361]. - Working capital as of December 31, 2024, was approximately$26.0 million, with current assets of approximately $77.7 million and current liabilities of approximately$51.6 million[358]. - Net cash provided by investing activities was $545,167 in 2024, an increase from$243,586 in 2023[361]. - Net cash provided by financing activities was approximately $1.0 million for the year ended December 31, 2024, consisting of$2.5 million from loans and $4.3 million from net IPO proceeds[387]. Accounts Receivable and Credit Losses - Accounts receivable increased by approximately$23.1 million in 2024, primarily due to a longer collection cycle caused by delays in government billing approvals[366]. - Days sales outstanding (DSO) increased to 455 days by December 31, 2024, reflecting prolonged delays in the government payment approval process amid economic downturn[368]. - The allowance for doubtful accounts was 14.2% of total accounts receivable as of December 31, 2024[372]. - The allowance for credit loss against accounts receivable was $9,267,851,$3,009,363, and $3,189,642 as of December 31 for the years 2024, 2023, and 2022, representing 17.0$1.4 million, $13.6 million, and$12.2 million for the years ended December 31, 2024, 2023, and 2022, respectively[377]. - As of December 31, 2024, contract assets totaled approximately $40.0 million, with$29.3 million aged over 720 days[380]. - Accounts payable increased by approximately $13.0 million,$9.2 million, and $5.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, primarily due to raw material purchases[384]. - Total contractual obligations as of December 31, 2024, amounted to$5,660,179, with $5,446,210 due within one year[421]. Tax and Other Expenses - Income tax expense decreased by approximately$0.9 million to approximately $0.5 million for the year ended December 31, 2024[339]. - Other expenses, net, amounted to approximately$0.2 million for the year ended December 31, 2023, compared to other income of approximately $41,000 for the same period in 2022[354]. - Income tax expense increased by approximately$0.2 million to approximately $1.4 million for the year ended December 31, 2023[355]. Research and Development - Research and development expenses were$61,786 for the year ended December 31, 2024, $80,948 for 2023, and$112,668 for 2022, indicating a continued investment in R&D to enhance market position[409]. - The company is focused on improving the efficiency of microorganisms in sewage treatment systems and exploring new technologies to enhance water treatment[408]. Company Outlook and Strategy - The company anticipates that current cash resources will be insufficient to execute its business plan for the next twelve months, raising concerns about its ability to operate as a going concern[361]. - The company plans to invest in rural sewage treatments, including building sewage treatment equipment, and explore potential mergers and acquisitions[362]. - The company has enforceable rights to payments for work performed under sewage treatment service contracts, with revenue recognized based on labor costs incurred[398]. - Provisions for estimated losses on uncompleted contracts are recorded in the period when such losses are determined, ensuring accurate financial reporting[401]. - The company has a long history of sewage treatment services, allowing for reasonable estimates of service hours and progress towards completion on fixed-price contracts[399]. - The company has elected to take advantage of the extended transition period for complying with new or revised accounting standards under the JOBS Act[419].