Smart Powerr Posts Wider Q3 Loss Amid Strategic Pivot

TL;DR

**CREG's massive cash jump is a head-scratcher given the widening losses; this looks like a speculative bet on a pivot that hasn't proven itself yet.**

AI Summary

Smart Powerr Corp. (CREG) reported a net loss of $300,374 for the three months ended September 30, 2025, an increase from a net loss of $262,731 for the same period in 2024. For the nine months ended September 30, 2025, the company recorded a net loss of $2,429,650, compared to a net loss of $952,285 in the prior year period. Revenue for the three months ended September 30, 2025, was $90,820, with no revenue reported in the comparable 2024 period. The company's cash position significantly increased to $131,877,059 as of September 30, 2025, from $25,341 at December 31, 2024, primarily due to $64,443,002 generated from operating activities and $55,202,004 from investing activities. Total assets grew to $132,973,469 from $121,234,786, while total liabilities decreased to $14,754,746 from $16,503,705. CREG is undergoing a strategic transformation into an energy storage integrated solution provider, actively seeking opportunities in high-growth potential segments like industrial complexes and large-scale renewable energy stations. The company's Erdos TCH joint venture remains non-operational due to renovations and technical upgrades at Erdos Metallurgy Co., Ltd., with compensation of RMB 1 million ($145,524) per month from Erdos, though not yet recognized as income due to collection uncertainty.

Why It Matters

Smart Powerr Corp.'s significant cash increase to $131.8 million and strategic pivot to energy storage solutions could signal a potential turnaround, but the widening net loss and non-operational joint venture raise concerns about execution and profitability. Investors should scrutinize the company's ability to generate sustainable revenue from its new energy storage focus, especially given the competitive landscape dominated by established players like Tesla and Fluence. Employees might face uncertainty during this transition, while customers could benefit from new energy solutions if the strategy is successfully implemented. The broader market will watch if CREG can carve out a niche in the rapidly expanding energy storage sector, impacting regional energy infrastructure development in China.

Risk Assessment

Risk Level: high — The company reported an accumulated deficit of $64,486,033 as of September 30, 2025, and its primary revenue-generating assets (five power generating systems through Erdos TCH) are currently not producing electricity. The strategic transformation into an energy storage integrated solution provider is a high-risk endeavor with no guaranteed success, and the uncertainty of collecting RMB 1 million ($145,524) monthly compensation from Erdos TCH further highlights operational risks.

Analyst Insight

Investors should exercise extreme caution and conduct thorough due diligence before considering an investment in CREG. Monitor the progress of their energy storage transformation, specifically looking for concrete revenue generation and profitability from these new ventures, as the current financial performance and operational status of existing assets present significant risks.

Financial Highlights

debt To Equity

0.12

revenue

$173,659

operating Margin

-1383.1%

total Assets

$132,973,469

total Debt

$14,754,746

net Income

-$2,429,650

eps

N/A

gross Margin

45.87%

cash Position

$131,877,059

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $131,877,059 — Cash (Increased from $25,341 at December 31, 2024)
• $300,374 — Net loss for Q3 2025 (Increased from $262,731 in Q3 2024)
• $2,429,650 — Net loss for nine months ended Sept 30, 2025 (Increased from $952,285 in the prior year period)
• $90,820 — Revenue for Q3 2025 (No revenue reported in Q3 2024)
• $64,486,033 — Accumulated deficit (As of September 30, 2025)
• 20,809,123 — Shares outstanding (As of November 13, 2025)
• $14,754,746 — Total liabilities (Decreased from $16,503,705 at December 31, 2024)
• $118,218,723 — Total stockholders' equity (Increased from $104,731,081 at December 31, 2024)
• $64,443,002 — Net cash generated from operating activities (For the nine months ended September 30, 2025)
• $55,202,004 — Net cash generated from investing activities (For the nine months ended September 30, 2025)

Key Players & Entities

• Smart Powerr Corp. (company) — registrant
• CREG (company) — trading symbol
• Erdos TCH (company) — joint venture subsidiary
• Erdos Metallurgy Co., Ltd. (company) — joint venture partner
• Xi'an TCH Energy Technology Co., Ltd. (company) — subsidiary
• Shanghai TCH Energy Tech Co., Ltd. (company) — subsidiary
• Nevada (regulator) — state of incorporation
• Nasdaq Stock Market LLC (regulator) — exchange where common stock is registered
• SEC (regulator) — filing authority
• Bloomberg (company) — publisher

FAQ

Risk Factors

• JV Non-Operational Status [medium — operational]: The Erdos TCH joint venture remains non-operational due to renovations and technical upgrades at Erdos Metallurgy Co., Ltd. While Erdos is providing compensation of RMB 1 million ($145,524) per month, this income is not yet recognized due to collection uncertainty.
• Increasing Net Losses [high — financial]: The company reported a net loss of $300,374 for Q3 2025, an increase from $262,731 in Q3 2024. For the nine months ended September 30, 2025, the net loss was $2,429,650, significantly up from $952,285 in the prior year period.
• Accumulated Deficit [medium — financial]: The company has an accumulated deficit of $64,486,033 as of September 30, 2025, indicating a history of net losses that have eroded equity.
• Strategic Transformation Uncertainty [medium — market]: Smart Powerr Corp. is undergoing a strategic transformation into an energy storage integrated solution provider. The success of this transformation and the ability to secure opportunities in high-growth segments are critical for future profitability.
• Reliance on Subsidiaries [medium — operational]: The company's operations are conducted through various wholly-owned and partially-owned subsidiaries, including those in the PRC. Any operational disruptions or regulatory changes affecting these subsidiaries could impact the overall business.

Industry Context

Smart Powerr Corp. is positioning itself as an energy storage integrated solution provider, targeting high-growth segments like industrial complexes and large-scale renewable energy stations. This strategic shift places it within the rapidly expanding energy storage market, driven by the global transition to renewable energy and the increasing demand for grid stability and efficiency.

Regulatory Implications

As a company operating in the energy sector and with subsidiaries in the PRC, Smart Powerr Corp. is subject to evolving energy regulations and environmental policies in its operating jurisdictions. Changes in these regulations could impact its business model, operational costs, and market access.

What Investors Should Do

1. Monitor the progress of the strategic transformation into an energy storage provider.
2. Analyze the operational status and revenue recognition of the Erdos TCH joint venture.
3. Evaluate the sustainability of the current cash burn rate against the increasing net losses.
4. Assess the company's ability to generate revenue and achieve profitability from its new energy storage solutions.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported increased net loss and initial revenue generation, alongside a substantial increase in cash reserves.
• 2024-09-30: Prior Year Quarter Comparison — Provided a baseline for revenue and loss comparison, showing no revenue in the prior year's Q3.
• 2024-12-31: Prior Year End Balance Sheet — Established the starting point for asset and liability changes, particularly the significant increase in cash from $25,341.
• 1980-05-08: Company Incorporation — Marks the original founding of the company, highlighting its long history and multiple name changes.
• 2022-03: Name Change to Smart Powerr Corp. — Indicates a recent rebranding and strategic shift, aligning with its current focus.

Glossary

Accumulated deficit

The total net losses of a company over its lifetime that have not been offset by net income. (Indicates the company's historical profitability, with a significant deficit of $64,486,033 as of September 30, 2025.)

Right-of-use asset, net

An asset representing the right to use a leased asset over the lease term, net of accumulated depreciation and impairment. (Reflects the company's lease obligations, with a net value of $74,626 as of September 30, 2025.)

Contract liabilities

Obligations to transfer goods or services to a customer for which the company has received consideration from the customer. (Represents deferred revenue, with $105,352 recorded as of September 30, 2025, indicating future revenue recognition.)

Statutory reserve

A reserve fund that companies are legally required to set aside from their profits. (Shows a stable reserve of $15,191,645, unchanged from the prior year.)

Loss on note conversion

A non-operating expense incurred when convertible debt is converted into equity at a value higher than its carrying amount. (A minor expense of $23,238 in the prior year's nine-month period, not present in the current period.)

OID (Original Issue Discount)

The difference between the face value of a debt instrument and its issue price, when the issue price is lower than the face value. (Indicates that there was no unamortized OID on notes payable as of September 30, 2025.)

Year-Over-Year Comparison

Compared to the prior year period, Smart Powerr Corp. has reported its first revenues, totaling $90,820 for Q3 2025 and $173,659 for the nine months ended September 30, 2025, a significant change from zero revenue in the comparable 2024 periods. However, net losses have also widened, with Q3 2025 losses increasing to $300,374 from $262,731 in Q3 2024, and nine-month losses escalating to $2,429,650 from $952,285. Total liabilities have decreased from $16,503,705 to $14,754,746, while total stockholders' equity has grown from $104,731,081 to $118,218,723, largely driven by a substantial increase in cash and additional paid-in capital.

Key Financial Figures

• $0.001 — ange on which registered Common stock, $0.001 par value CREG The Nasdaq Stock Market

Filing Documents

• ea0263380-10q_smart.htm (10-Q) — 901KB
• ea026338001ex10-64_smart.htm (EX-10.64) — 32KB
• ea026338001ex10-65_smart.htm (EX-10.65) — 32KB
• ea026338001ex10-66_smart.htm (EX-10.66) — 32KB
• ea026338001ex10-67_smart.htm (EX-10.67) — 32KB
• ea026338001ex10-68_smart.htm (EX-10.68) — 32KB
• ea026338001ex10-69_smart.htm (EX-10.69) — 32KB
• ea026338001ex31-1_smart.htm (EX-31.1) — 11KB
• ea026338001ex31-2_smart.htm (EX-31.2) — 11KB
• ea026338001ex32-1_smart.htm (EX-32.1) — 6KB
• image_001.jpg (GRAPHIC) — 69KB
• 0001213900-25-110034.txt ( ) — 6039KB
• creg-20250930.xsd (EX-101.SCH) — 61KB
• creg-20250930_cal.xml (EX-101.CAL) — 42KB
• creg-20250930_def.xml (EX-101.DEF) — 250KB
• creg-20250930_lab.xml (EX-101.LAB) — 526KB
• creg-20250930_pre.xml (EX-101.PRE) — 270KB
• ea0263380-10q_smart_htm.xml (XML) — 562KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 28

– OTHER INFORMATION

PART II – OTHER INFORMATION 29 Item 1.

Legal Proceedings

Legal Proceedings 29 Item 1A.

Risk Factors

Risk Factors 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3. Defaults Upon Senior Securities 29 Item 4. Mine Safety Disclosures 29 Item 5. Other Information 29 Item 6. Exhibits 30

SIGNATURES

SIGNATURES 36 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (this "Report"), including, without limitation, statements under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. These statements are based on management's current expectations, but actual results may differ materially due to various factors, including, but not limited to those discussed under the heading "Risk Factors" in any of our filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act. The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertak

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements SMART POWERR CORP. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 (IN U.S. DOLLARS, EXCEPT FOR SHARE DATA) UNAUDITED AUDITED SEPTEMBER 30, 2025 DECEMBER 31, 2024 ASSETS CURRENT ASSETS Cash $ 131,877,059 $ 25,341 VAT receivable 169,824 165,629 Advance to supplier - 65,214,994 Short term loan receivables - 55,660,132 Other receivables 88,267 49,747 Total current assets 132,135,150 121,115,843 NON-CURRENT ASSETS Right-of-use asset, net 74,626 115,068 Intangible Asset, net 763,693 3,875 Total non-current assets 838,319 118,943 TOTAL ASSETS $ 132,973,469 $ 121,234,786 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 120,078 $ 68,003 Contract liabilities 105,352 - Taxes payable 7,631,151 4,276,597 Accrued interest on notes 2,658 69,103 Notes payable, net of unamortized OID of $ 0 and $ 31,250 , respectively 3,031,656 4,705,696 Accrued liabilities and other payables 3,004,829 3,166,486 Lease liability 60,533 58,529 Payable for purchase of 10 % equity interest of Zhonghong 421,408 410,998 Interest payable on entrusted loans 347,591 341,129 Total current liabilities 14,725,256 13,096,541 NONCURRENT LIABILITIES Income tax payable - 3,350,625 Lease liability 29,490 56,539 Total noncurrent liabilities 29,490 3,407,164 Total liabilities 14,754,746 16,503,705 CONTINGENCIES AND COMMITMENTS STOCKHOLDERS' EQUITY Common stock, $ 0.001 par value; 100,000,000 shares authorized, 24,491,069 and 7,391,996 shares issued and outstanding 35,081 9,161 Additional paid in capital 178,825,164 165,959,857 Statutory reserve 15,191,645 15,191,645 Accumulated other comprehensive loss ( 11,347,134 ) ( 14,373,199 ) Accumulated deficit ( 64,486,033 ) ( 62,056,383 ) Total stockholders' equity 118,218,723 104,731,081 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 132,9

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Smart Powerr Corp. (the "Company" "we" or "SPC") was incorporated in Nevada, and was formerly known as China Recycling Entergy Corporation. The Company was incorporated on May 8, 1980 as Boulder Brewing Company under the laws of the State of Colorado. On September 6, 2001, the Company changed its state of incorporation to the State of Nevada. In 2004, the Company changed its name from Boulder Brewing Company to China Digital Wireless, Inc. and on March 8, 2007, again changed its name from China Digital Wireless, Inc. to China Recycling Energy Corporation, and most recently to Smart Powerr Corp. in March of 2022. The Company, through its subsidiaries, provides energy saving solutions and services, including selling and leasing energy saving systems and equipment to customers, project investment, investment management, economic information consulting, technical services, financial leasing, purchase of financial leasing assets, disposal and repair of financial leasing assets, consulting and ensuring of financial leasing transactions in the Peoples Republic of China ("PRC"). The Company is primarily conducted through its wholly-owned subsidiaries, Yinghua and Sifeng, Sifeng's wholly-owned subsidiaries, Huahong and Shanghai TCH, Shanghai TCH's wholly-owned subsidiaries, Xi'an TCH, Xi'an TCH's wholly-owned subsidiary Erdos TCH and Xi'an TCH's 90 % owned and Shanghai TCH's 10 % owned subsidiary Xi'an Zhonghong New Energy Technology Co., Ltd., and Zhongxun. Shanghai TCH was established as a foreign investment enterprise in Shanghai under the laws of the PRC on May 25, 2004. Xi'an TCH was incorporated in Xi'an, Shaanxi Province under the laws of the PRC in November 2007. Erdos TCH was incorporated in April 2009. Huahong was incorporated in February 2009. Xi'an Zhonghong New Energy Technology Co., Ltd. was incorporated in July 2013. Xi'an TCH owns 90 % and Shanghai TCH owns 10

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