Singlepoint Inc.(SING) - 2021 Q4 - Annual Report

Operational Challenges - The company has experienced customer delays and project extensions due to the COVID-19 pandemic, impacting operations and financial position[21] - The solar market is highly competitive, and demand for residential solar energy systems may not rise as anticipated, affecting the company's ability to originate solar service agreements[22] - The company relies on a limited number of suppliers for solar energy system components, and any disruptions could lead to sales delays and loss of customers[23] - The company is focused on providing renewable energy solutions and may face challenges in executing its strategic initiatives effectively[24] - The company is dependent on small- and medium-sized businesses as customers, which may result in higher customer acquisition costs and churn rates[34] - The company faces risks related to potential litigation that could adversely affect its financial position[35] Financial Performance - The company has a history of operating losses and may incur future losses, impacting its ability to achieve profitability[36] - The company expects to increase expenditures for product development and marketing, but without revenue growth, profitability may not be achieved[36] - For the year ended December 31, 2021, total sales decreased to $808,902 from $2,878,161 in 2020, primarily due to lower solar revenues resulting from a new business model[75] - Cost of revenue for 2021 was $736,746, down from $2,204,391 in 2020, reflecting the decrease in revenues from the solar division[76] - Gross profit for 2021 was $72,156, a significant decline from $673,770 in 2020, attributed to lower revenues from the solar division[77] - Total operating expenses increased to $5,687,490 in 2021 from $3,972,882 in 2020, driven by higher professional and legal fees, goodwill impairment, and investor relations expenses[78] - Net loss for 2021 was $5,763,947, compared to a net loss of $4,444,505 in 2020, primarily due to lower revenues and higher operating costs[80] - The net loss attributable to Singlepoint Inc. stockholders for the year ended December 31, 2021, was $5,373,015, compared to a loss of $4,033,717 in 2020, representing an increase of approximately 33.4%[114] Capital and Financing - The company may need to raise additional capital to support operations and growth, but financing may not be available on favorable terms[31] - As of December 31, 2021, the company had a cash need of approximately $3.0 million to continue operations for the next 12 months[83] - Net cash used in operating activities for 2021 was $4,831,629, primarily due to a net loss of $5,373,015[86] - Net cash provided by financing activities increased to $4,869,341 in 2021 from $2,018,724 in 2020, mainly due to proceeds from long-term notes payable and preferred stock sales[88] - The company has not achieved profitable operations and may need to raise capital from stockholders or other sources to sustain operations[81] Stock and Equity - The market price of the company's common stock may be volatile and subject to fluctuations unrelated to its operating performance[48] - The company has never paid cash dividends on its common stock and intends to retain future earnings to fund business development and growth[51] - As of December 31, 2021, there were 58,785,924 shares of common stock outstanding, held by approximately 187 record holders[69] - The company executed a 1 for 75 reverse stock split on March 26, 2021, converting every 75 shares of common stock into one share[69] - The weighted average number of common shares outstanding increased to 43,847,537 in 2021 from 29,456,402 in 2020, reflecting dilution from share issuances[110] - The company holds approximately 22,309,285 shares of Class A Convertible Preferred Stock, which provides significant voting power to executive officers and directors[52] Assets and Liabilities - Total current assets rose to $517,174 in 2021 from $270,131 in 2020, showing improved liquidity[107] - Total liabilities decreased to $3,606,988 in 2021 from $6,113,856 in 2020, indicating a reduction in financial obligations[107] - The accumulated deficit increased to $(86,158,902) in 2021 from $(80,785,887) in 2020, reflecting ongoing losses[107] - The total stockholders' equity (deficit) improved to $(1,238,731) in 2021 from $(3,198,176) in 2020, suggesting a reduction in the equity deficit[107] Acquisitions and Subsidiaries - The company has five subsidiaries as of December 31, 2021, including EnergyWyze LLC (100% interest) and Box Pure Air (51% interest)[117] - The company completed the spin-off of 1606 Corp. on April 7, 2021, transferring inventory valued at $63,456 in exchange for a note receivable[122] - The Company acquired 51% of Box Pure Air, LLC for a purchase price of $414,151, paid with the issuance of 168,350 shares of common stock[154] - From the acquisition of EnergyWyze, LLC, the Company reported total revenue of $240,965 and a net loss of $458,625 from January 26, 2021, through December 31, 2021[161] Goodwill and Impairment - As of December 31, 2021, the total goodwill was $1,702,119, a decrease from $1,893,740 as of December 31, 2020, reflecting an impairment loss of $680,772 during the year[162] - The Company performed a discounted cash flow analysis indicating that cash flows were less than the book value of goodwill for Direct Solar America, leading to the impairment[163] Lease and Operating Agreements - The Company recognized lease liabilities and corresponding right-of-use (ROU) assets based on the present value of unpaid lease payments for existing operating leases longer than twelve months[133] - The Company leases approximately 1,400 square feet of office space in Phoenix, Arizona, at a monthly base rent of $3,688, increasing to $3,758[57]