SolarMax Technology(SMXT) - 2024 Q1 - Quarterly Results

Executive Summary & Company Overview Report Announcement & CEO Commentary SolarMax Technology, Inc. reported its first quarter 2024 financial results, with CEO David Hsu noting that year-over-year comparisons were significantly impacted by a one-time surge in residential solar demand in Q1 2023 and unusually heavy rains in Q1 2024, alongside a substantial one-time, non-cash stock-based compensation expense of $17.2 million related to the company's initial public offering - Q1 2024 revenue was impacted by a one-time surge in customer demand in Q1 2023 due to anticipated changes in California solar rebate regulations and unusually heavy and frequent rains in southern California during Q1 2024[3][4] - A one-time, non-cash stock-based compensation expense of $17.2 million resulted from the completion of the initial public offering, allocated as $1.3 million to cost of revenue and $15.9 million to operating expense[4] First Quarter 2024 Financial Highlights SolarMax experienced a significant decline in Q1 2024 financial performance compared to Q1 2023, reporting a net loss of $19.3 million, primarily driven by reduced revenues and a substantial increase in operating expenses due to a one-time stock-based compensation charge Q1 2024 Financial Highlights (YoY Comparison) | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Revenues | $5.8 million | $12.9 million | -55.0% | | Gross profit (loss) | ($0.5) million | $2.1 million | -123.8% | | Total operating expense | $18.4 million | $1.5 million | +1126.7% | | Net loss | $19.3 million | N/A (was profit) | N/A | - The net loss of $19.3 million included a one-time, non-cash impact of $17.2 million in stock-based compensation expense related to the vesting of stock options triggered by the Company's initial public offering[8] About SolarMax Technology Inc. SolarMax is an integrated solar and renewable energy company, founded in 2008, with operations in the United States and China, focusing on photovoltaic and battery backup systems in the U.S. and solar farm projects and EPC services in China, with all recent revenues generated by its U.S. operations - SolarMax is an integrated solar and renewable energy company, founded in 2008, engaged in solar business in the United States and China[5] - United States operations primarily consist of the sale and installation of photovoltaic and battery backup systems for residential and commercial customers, and sales of LED systems and services[5] - China operations consist primarily of identifying and procuring solar farm projects for resale to third parties and performing EPC services[5] - All of SolarMax' revenues for 2022, 2023, and the first quarter of 2024 were generated by its United States operations[5] Financial Statements Condensed Consolidated Balance Sheets As of March 31, 2024, SolarMax's total assets increased to $54.69 million from $48.66 million at December 31, 2023, primarily driven by an increase in cash and the introduction of short-term investments, while total liabilities decreased significantly from $64.54 million to $55.28 million, leading to a substantial improvement in the stockholders' deficit, reducing it from ($15.89) million to ($0.59) million Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2024 | December 31, 2023 | Change | | :-------------------------------- | :--------------- | :---------------- | :----- | | Total Assets | $54,692,062 | $48,655,201 | +$6,036,861 | | Cash and cash equivalents | $4,929,781 | $2,539,312 | +$2,390,469 | | Short-term investments | $7,000,000 | - | +$7,000,000 | | Total Liabilities | $55,277,300 | $64,543,029 | -$9,265,729 | | Total Stockholders' Deficit | ($585,238) | ($15,887,828) | +$15,302,590 | | Additional paid-in capital | $90,563,721 | $55,786,634 | +$34,777,087 | - The significant reduction in stockholders' deficit was largely due to an increase in additional paid-in capital[14] Condensed Consolidated Statements of Operations For the three months ended March 31, 2024, SolarMax reported a net loss of $19.27 million, a significant reversal from a net income of $0.74 million in the prior year period, primarily due to a 55% decrease in revenues and a substantial increase in operating expenses, which included a $17.2 million non-cash stock-based compensation expense Condensed Consolidated Statements of Operations Highlights (YoY Comparison) | Income Statement Item | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Revenues | $5,764,074 | $12,868,478 | -55.2% | | Cost of revenues | $6,228,481 | $10,796,141 | -42.3% | | Gross profit (loss) | ($464,407) | $2,072,337 | -122.4% | | Total operating expense | $18,416,332 | $1,545,126 | +1092.9% | | Operating income (loss) | ($18,880,739) | $527,211 | -3681.9% | | Net income (loss) | ($19,271,787) | $742,815 | N/A (loss from profit) | | Basic EPS | ($0.46) | $0.02 | N/A | | Diluted EPS | ($0.46) | $0.02 | N/A | - Cost of revenues for Q1 2024 included a stock-based compensation expense of $1,264,690[16] - General and administrative expenses for Q1 2024 included a stock-based compensation expense of $15,945,597[16] Additional Information Forward-Looking Statements This section contains standard forward-looking statements, cautioning that actual future results may differ materially from expectations due to various risks and uncertainties, and advises readers to consult the Company's Annual Report on Form 10-K and Quarterly Report on Form 10-Q for a detailed discussion of risk factors - The press release contains forward-looking statements based on certain assumptions, describing the Company's future plans, strategies, and expectations[7] - Important factors could cause the Company's actual results and financial condition to differ materially from those indicated in the forward-looking statements[7][9] - Readers are advised to refer to 'Cautionary Note on Forward-Looking Statements', 'Item 1A. Risk Factors' in the Annual Report on Form 10-K, and 'Management's Discussion and Analysis of Financial Condition and Results of Operations' in the Form 10-Q for detailed risk and uncertainties[9] Contact Information Provides contact information for investor inquiries - For more information, contact Stephen Brown, CFO[10] - Contact phone number: (951) 300-0711[10]