Twin Vee PowerCats (VEEE)

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Twin Vee PowerCats (VEEE) - 2021 Q4 - Annual Report
2022-03-31 17:47
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-40623 TWIN VEE POWERCATS CO. (Exact name of registrant as specified in its charter) Delaware 27-1417610 (State or other jurisdiction of ...
Twin Vee PowerCats (VEEE) - 2021 Q3 - Quarterly Report
2021-11-15 20:26
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OR FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Commission file number: 001-40623 TWIN VEE POWERCATS CO. (Exact Name of Registrant as Specified in Its Charter) Delawar ...
Twin Vee PowerCats (VEEE) - 2021 Q2 - Quarterly Report
2021-08-24 21:28
Part I [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2021, show significant revenue growth, improved net income, and positive cash flow from operations [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2021, total assets increased to $6.31 million, driven by inventories and property, while liabilities grew due to a PPP loan and accounts payable Condensed Balance Sheet Data (in USD) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $2,899,841 | $1,834,942 | | Inventories | $1,539,514 | $936,676 | | Cash | $406,642 | $891,816 | | **Total Assets** | **$6,312,615** | **$4,504,566** | | **Total Current Liabilities** | $2,044,221 | $1,440,067 | | Accounts Payable | $1,190,147 | $799,280 | | Paycheck Protection Program Loan | $608,224 | $0 | | **Total Liabilities** | **$4,580,975** | **$2,955,726** | | **Total Stockholders' Equity** | **$1,731,640** | **$1,548,840** | [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) Net sales grew significantly for both three and six-month periods ended June 30, 2021, leading to a positive net income for the three-month period and substantial growth for the six-month period Operating Results (in USD) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $3,297,571 | $1,720,604 | $6,505,214 | $4,387,461 | | **Gross Profit** | $1,316,144 | $695,448 | $2,804,050 | $1,864,682 | | **(Loss) Income from Operations** | ($116,933) | ($824) | $37,829 | $138,212 | | **Net Income (Loss)** | $50,851 | ($23,524) | $182,800 | $55,132 | | **Basic and Dilutive EPS** | $0.01 | ($0.01) | $0.05 | $0.01 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, operating cash flow turned positive, while investing activities increased, and financing activities were primarily from a PPP loan Cash Flow Summary (in USD) | Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,045 | ($314,367) | | Net cash used in investing activities | ($604,990) | ($119,692) | | Net cash provided by financing activities | $114,771 | $586,044 | | **Net change in cash** | **($485,174)** | **$151,985** | | **Cash at end of period** | **$406,642** | **$367,559** | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Financial%20Statements) Key notes highlight single vendor reliance, related-party leases, significant customer concentration, and the completion of an $18 million IPO in July 2021 - The company is dependent on a single vendor for all engines, with purchases totaling **$1.31 million** in the first six months of 2021[45](index=45&type=chunk) - The company leases its office and warehouse facilities from an LLC whose sole member is the company's CEO, Joseph C. Visconti[51](index=51&type=chunk) - In July 2021, the company completed its Initial Public Offering (IPO), selling 3,000,000 shares at **$6.00 per share** for gross proceeds of **$18,000,000**[69](index=69&type=chunk) - Customer concentration is significant, with five customers representing **64% of total sales** during the first six months of 2021[67](index=67&type=chunk) [Management's Discussion and Analysis (MD&A)](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes sales growth to economic recovery despite component shortages, with stable gross margins, increased operating expenses, and improved liquidity post-IPO [Business Overview](index=17&type=section&id=Overview) Twin Vee designs and manufactures power catamaran boats, increasing production and developing new emission-free electric propulsion models - The company is developing emission-free 240 and 280 electric propulsion models, intended for launch in the first half of 2022[77](index=77&type=chunk) - Production has increased from one boat per week during the COVID-19 slowdown in early 2020 to **two and a half boats per week** as of Q2 2021[77](index=77&type=chunk) - The company sells its boats through a network of **10 independent dealers** in 14 locations across North America and the Caribbean[76](index=76&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) For the first six months of 2021, net sales and gross profit increased significantly, with net income rising 232% despite higher operating expenses Comparison of Six Months Ended June 30, 2021 and 2020 (in USD) | Metric | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $6,505,214 | $4,387,461 | $2,117,753 | 48% | | **Gross Profit** | $2,804,050 | $1,864,682 | $939,368 | 50% | | **Operating Expenses** | $2,766,221 | $1,726,470 | $1,039,751 | 60% | | **Net Income** | $182,800 | $55,132 | $127,668 | 232% | - The increase in operating expenses is attributed to a higher headcount in 2021 compared to 2020 (when headcount was reduced due to COVID-19) and a doubling of professional services fees in preparation for the IPO[83](index=83&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased as of June 30, 2021, but working capital significantly improved, with the July 2021 IPO providing substantial additional capital Liquidity Data (in USD) | Metric | June 30, 2021 | December 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Cash | $406,642 | $891,816 | (54.4%) | | Current Assets | $2,899,841 | $1,834,942 | 58.0% | | Current Liabilities | $2,044,221 | $1,440,067 | 42.0% | | **Working Capital** | **$855,620** | **$394,875** | **116.7%** | - Cash flow from operations turned positive to approximately **$5,000** for the first six months of 2021, compared to a use of **($314,000)** in the prior year period, driven by net income offset by increased inventory[92](index=92&type=chunk) [Critical Accounting Policies](index=22&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGMENTS%20AND%20ESTIMATES) Critical accounting policies include revenue recognition, inventory valuation, and the treatment of the PPP loan as an in-substance government grant - Revenue is recognized when the product is released to the carrier for transport to a dealer, with dealer incentives recorded as a reduction of revenue[36](index=36&type=chunk)[99](index=99&type=chunk) - The company accounts for its Paycheck Protection Program (PPP) loan as an in-substance government grant, recognizing it in other income as the related costs are incurred[108](index=108&type=chunk) - Inventories are stated at the lower of cost (using FIFO) or net realizable value, requiring estimates for inventory obsolescence[102](index=102&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of June 30, 2021, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2021[113](index=113&type=chunk) - Material weaknesses were identified relating to (i) lack of segregation of duties and (ii) insufficient level of review of internally prepared financial statements[115](index=115&type=chunk) - These control deficiencies resulted in an inventory error of approximately **$227,000** and other errors in balances for inventory, property and equipment, and accounts payable[115](index=115&type=chunk) - A remediation plan is being executed, including the retention of a full-time controller, but the weaknesses are not yet considered remediated[116](index=116&type=chunk)[117](index=117&type=chunk) Part II [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including dependence on dealers and a single engine supplier, supply chain disruptions, internal control weaknesses, and concentrated ownership influence [Business and Operational Risks](index=25&type=section&id=Business%20and%20Operational%20Risks) Operational risks include reliance on independent dealers and a single engine supplier, potential supply chain disruptions, and a large fixed cost base - The company depends on its network of independent dealers, with the top five dealers accounting for **33% of boats sold** in fiscal 2020[132](index=132&type=chunk) - The company relies on a single manufacturer, Suzuki Motor of America, Inc., for its engines and has experienced shortages of 150-horsepower motors due to the COVID-19 pandemic[139](index=139&type=chunk) - The company may be required to repurchase inventory from dealers who default on their floor plan financing arrangements[136](index=136&type=chunk) [Product and Market Risks](index=31&type=section&id=Product%20and%20Market%20Risks) The company faces risks from intense competition, volatile demand, and the need for successful new product introductions, particularly electric models - The powerboat industry is highly competitive and cyclical, with demand highly sensitive to general economic conditions and consumer discretionary spending[149](index=149&type=chunk)[175](index=175&type=chunk) - Future success depends on the successful introduction of new products, including the development of the Twin 240E, a fully electric boat with a proprietary powertrain system[153](index=153&type=chunk)[154](index=154&type=chunk) [Public Company and Ownership Risks](index=34&type=section&id=Public%20Company%20and%20Ownership%20Risks) Risks include material weaknesses in internal controls, significant influence by the CEO and parent company, and reduced reporting requirements as an emerging growth company - The company has identified material weaknesses in its internal control over financial reporting, including lack of segregation of duties and insufficient review, which could result in a material misstatement of financial statements[182](index=182&type=chunk)[185](index=185&type=chunk) - The parent company owns approximately **57.14%** of the outstanding common stock, and the CEO has significant influence over management and corporate matters[165](index=165&type=chunk) - As an "emerging growth company," the company is exempt from certain reporting requirements, including the auditor attestation of internal controls required by Section 404(b) of the Sarbanes-Oxley Act[194](index=194&type=chunk) [Use of Proceeds from Initial Public Offering](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company closed its IPO in July 2021, raising $16.4 million net, with proceeds allocated for electric boat development, larger boat production, and a new testing center - The company closed its IPO on July 22, 2021, raising approximately **$16.4 million** in net proceeds[211](index=211&type=chunk) Planned Use of IPO Net Proceeds (in USD) | Use of Proceeds | Allocated Amount | | :--- | :--- | | Production & marketing of larger boats | ~$1,500,000 | | Design & development of electric boats | ~$2,500,000 | | Design & development of electric propulsion system | ~$6,000,000 | | Acquisition & development of waterfront testing center | ~$3,500,000 | | Working capital | Balance | [Other Disclosures](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, and other disclosures are not applicable - The company is not presently a party to any material legal proceedings[120](index=120&type=chunk)