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Smart Powerr (CREG) - 2023 Q3 - Quarterly Report
CREGSmart Powerr (CREG)2023-11-12 16:00

Financial Performance - For the nine months ended September 30, 2023, the Company reported a net loss of 518,069,comparedtoanetlossof518,069, 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,adecreaseof518,069, a decrease of 595,837 compared to a net loss of 1,113,906in2022[160].−NetlossforthethreemonthsendedSeptember30,2023,was1,113,906 in 2022 [160]. - Net loss for the three months ended September 30, 2023, was 180,723, a decrease of 266,914comparedtoanetlossof266,914 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].−Operatingexpensesincreasedby0 [158]. - Operating expenses increased by 53,841 or 9.7% to 606,105fortheninemonthsendedSeptember30,2023,primarilyduetoincreasedauditfeesandprofessionalserviceexpenses[158].−OperatingexpensesforthethreemonthsendedSeptember30,2023,decreasedby606,105 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 146,870comparedtothesameperiodin2022[164].−Netnon−operatingincomefortheninemonthsendedSeptember30,2023,was146,870 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 525,131forthesameperiodin2022[159].−IncometaxexpensefortheninemonthsendedSeptember30,2023,was525,131 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 67,950,506asofSeptember30,2023,whichisexpectedtosatisfyitsliquidityneedsforthenext12months[135].−CashandequivalentsasofSeptember30,2023,were67,950,506 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 68,264,743fortheninemonthsendedSeptember30,2023,comparedto68,264,743 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 60.27millionasofSeptember30,2023[135].−AsofSeptember30,2023,thecompanyreportedanunrestrictedaccumulateddeficitof60.27 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)comparedto(45,077,009) compared to (59,726,943) and (44,558,940)respectivelyasofDecember31,2022,indicatingaslightincreaseindeficitsyear−over−year[181].−Thecompany′stotalcontractualobligationsasofSeptember30,2023,amountto(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 5,368,002duewithinoneyearand5,368,002 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 15,191,337asofSeptember30,2023,upfrom15,191,337 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)untiloperationsresume[140].−TheCompany’ssubsidiaries,includingYinghuaandSifang,areprimarilyengagedinenergy−savingsolutionsandfinancialleasing,withsignificantoperationsderivedfromShanghaiTCHanditssubsidiaries[137].−TheCompany’srevenuerecognitionforsales−typeleasesoccursattheinceptionofthelease,withrevenuerecordedwhencollectionofpaymentsisprobable[150].RegulatoryandEconomicEnvironment−TheCompany′sbusinessoperationsareinfluencedbythepolitical,economic,andlegalenvironmentsinthePRC,whichmayaffectitsfinancialconditionandresults[148].−Thecompany′soperationsareprimarilyinthePRC,makingitsearningssusceptibletofluctuationsinforeigncurrencyexchangerates,particularlybetweentheU.S.dollarandRMB[185].FutureFunding−Managementplanstoraiseadditionalfundsthroughprivateorpublicofferingsorloans,althoughtherearenoguaranteesregardingthesuccessoftheseefforts[136].−ThecompanyenteredapurchaseagreementwithHubeiBangyuNewEnergyTechnologyCo.,Ltd.for145,460) 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].