Turbo Energy(TURB) - 2023 Q2 - Quarterly Report

Unaudited Condensed Consolidated Financial Statements This section presents the interim financial statements and their accompanying notes, providing a comprehensive overview of the company's financial performance and position for the period Condensed Interim Consolidated Statements of Financial Position As of June 30, 2023, Turbo Energy, S.A. reported total assets of €13.16 million, a decrease from €15.24 million at year-end 2022, primarily driven by reductions in inventory and accounts receivable Condensed Consolidated Statements of Financial Position (in Euro) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | € 12,375,984 | € 14,622,280 | | Inventory, net | € 8,742,895 | € 10,106,216 | | Accounts receivable, net | € 1,730,467 | € 3,137,609 | | Total Non-Current Assets | € 787,611 | € 613,595 | | Total Assets | € 13,163,595 | € 15,235,875 | | Total Current Liabilities | € 9,723,009 | € 10,956,354 | | Bank loans - current portion | € 3,636,961 | € 8,010,239 | | Amount due to related parties | € 3,801,385 | € 237,285 | | Total Non-Current Liabilities | € 221,768 | € 363,390 | | Total Liabilities | € 9,944,777 | € 11,319,744 | | Total Shareholders' Equity | € 3,218,818 | € 3,916,131 | | Total Liabilities and Shareholders' Equity | € 13,163,595 | € 15,235,875 | - The company recorded €409,710 in deferred offering costs as of June 30, 2023, related to its upcoming IPO, which were not present at the end of 2022[5] Condensed Interim Consolidated Statements of Operations For the six months ended June 30, 2023, the company experienced a significant downturn, with total revenue dropping to €7.21 million from €14.33 million in the same period of 2022, resulting in a net loss of €697,313 Condensed Consolidated Statements of Operations (in Euro) | Account | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Total Revenue | € 7,211,916 | € 14,334,042 | | Revenue | € 7,019,127 | € 13,789,074 | | Revenue - related parties | € 184,362 | € 544,786 | | Total Cost and Expenses | € 7,702,448 | € 13,304,207 | | Cost of revenues | € 6,013,713 | € 11,973,743 | | Selling and administrative | € 1,684,201 | € 1,310,627 | | Income (loss) from operations | € (490,532) | € 1,029,835 | | Net Loss (Income) | € (697,313) | € 695,033 | | Basic and Diluted Net Income per Share | € (0.01) | € 0.01 | Condensed Interim Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity decreased from €3.92 million at the start of 2023 to €3.22 million by June 30, 2023, primarily due to the net loss for the period and a transfer to the reserve account Changes in Shareholders' Equity for Six Months Ended June 30, 2023 (in Euro) | Description | Share Capital | Reserve | Retained Earnings (Deficit) | Total Equity | | :--- | :--- | :--- | :--- | :--- | | Balance, January 1, 2023 | € 2,504,285 | € 383,268 | € 1,028,578 | € 3,916,131 | | Transfer to reserve | - | € 1,028,578 | € (1,028,578) | € - | | Net loss for the period | - | - | € (697,313) | € (697,313) | | Balance, June 30, 2023 | € 2,504,285 | € 1,411,846 | € (697,313) | € 3,218,818 | Condensed Interim Consolidated Statements of Cash Flows For the first six months of 2023, net cash provided by operating activities was €949,935, a significant improvement from the prior-year period, while investing and financing activities resulted in net cash uses, leading to a slight overall decrease in cash Condensed Consolidated Statements of Cash Flows (in Euro) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | € 949,935 | € (2,675,209) | | Net cash used in investing activities | € (237,166) | € (33,201) | | Net cash provided by (used in) financing activities | € (717,255) | € 2,516,767 | | Net change in cash | € (4,486) | € (191,643) | | Cash - beginning of period | € 502,585 | € 616,445 | | Cash - end of period | € 498,099 | € 424,802 | Notes to Unaudited Condensed Interim Consolidated Financial Statements These notes provide detailed explanations of the company's accounting policies, corporate structure, and specific financial statement items, including its business focus, related-party transactions, debt facilities, stock split, and subsequent Nasdaq IPO NOTE 1 – ENTITY INFORMATION This note details the company's history, including name changes and mergers, culminating in its current identity as Turbo Energy, S.A., and describes its business as designing, developing, and distributing AI-optimized photovoltaic energy equipment - The company designs, develops, and distributes equipment for photovoltaic energy generation, management, and storage, with products managed by an advanced AI-optimized software system to reduce electricity bills and protect against power outages[16] - The company is part of the Umbrella Solar Investment Group, with its majority shareholder being Umbrella Solar Investment, S.A[17] - In February 2023, the company transformed from a Spanish unipersonal limited company (S.L.U.) to a Spanish limited stock company (S.A.)[15] NOTE 2 – MATERIAL ACCOUNTING POLICIES This note outlines the basis of presentation and significant accounting policies, including IFRS compliance, revenue recognition upon shipment, and a disclosed concentration of revenue with a single customer - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and comply with IAS 34, Interim Financial Reporting[22] - Revenue from product sales is recognized at the point in time when control is transferred to the customer, which for most sales occurs upon shipment[28][29] - For the six months ended June 30, 2023 and 2022, a single customer accounted for 11.7% and 12.3% of total revenue, respectively, indicating a concentration of revenue[34] NOTE 10 – RELATED PARTY TRANSACTIONS This note details significant transactions with related parties, primarily the parent company Umbrella Solar Investment, S.A., including a new €3.8 million loan and substantially increased management fees in the first half of 2023 - As of June 30, 2023, the company had a loan of €3.8 million due to its senior partner, Umbrella Solar, with a 5-year term and a market interest rate of 6.25% per year[95] - Management fees paid to the parent company, Umbrella Solar Investment, S.A., increased significantly to €508,590 for the first six months of 2023, compared to €142,433 for the same period in 2022[100] Transactions with Related Parties (in Euro) | Transaction Type | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Sales | € 184,362 | € 544,786 | | Services received | € 508,590 | € 142,433 | | Purchases | - | € 30,696 | NOTE 11 – BANK LOANS This note provides a breakdown of the company's bank loans and lines of credit, showing a significant decrease in total debt from €8.33 million at year-end 2022 to €3.84 million as of June 30, 2023 Bank Loans and Lines of Credit (in Euro) | Liability | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Bank loans | € 440,170 | € 556,386 | | Lines of credit | € 3,404,561 | € 7,778,145 | | Total | € 3,844,731 | € 8,334,531 | - The company's total available credit limit from various banks was €11.05 million as of June 30, 2023, an increase from €9.35 million at the end of 2022[104][105] NOTE 12 – SHARE CAPITAL This note describes the company's share capital structure, highlighting a 20-for-1 forward stock split in February 2023 that increased issued and outstanding ordinary shares to 50,085,700, with all financial statements retrospectively adjusted - In February 2023, the company approved a 20-for-1 forward stock split, increasing issued shares to 50,085,700, with all share and per-share data retrospectively restated[109] - In December 2022, the company issued 50,000,000 ordinary shares (post-split) to its parent company for proceeds of €2,500,000[107] NOTE 17 – REVENUE This note provides a geographical breakdown of revenue, showing a sharp decline in total revenue for the six months ended June 30, 2023, to €7.21 million from €14.33 million in the prior-year period, with Spain remaining the largest but significantly decreased market Revenue by Geographical Market (in Euro) | Region | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Spain | € 5,847,800 | € 12,760,655 | | Europe | € 1,083,065 | € 1,369,875 | | Rest of the world | € 281,051 | € 203,512 | | Total | € 7,211,916 | € 14,334,042 | - Revenue from related parties was €184,362 in the first half of 2023, down from €544,786 in the same period of 2022[130] NOTE 21 – SUBSEQUENT EVENTS This note describes a major event that occurred after the reporting period: the company's successful Initial Public Offering (IPO) on the Nasdaq Capital Market on September 22, 2023, raising gross proceeds of $5 million - On September 22, 2023, the company debuted on the Nasdaq Capital Market under the symbol "TURB"[136] - The company conducted an initial public offering of 1,000,000 American Depositary Shares (ADSs) at $5.00 per ADS, for total gross proceeds of $5,000,000[136]