Twin Vee PowerCats (US:VEEE)2022-11-09 00:48Financial Performance - Net sales for the three months ended September 30, 2022, were $8,812,021, a 114.0% increase from $4,118,246 in the same period of 2021[20]. - Gross profit for the nine months ended September 30, 2022, was $9,215,640, up 108.1% from $4,414,126 in the same period of 2021[20]. - For the nine months ended September 30, 2022, net sales reached $23,217,634, a 119% increase compared to the same period in 2021[78]. - Gross profit for the three months ended September 30, 2022, was $3,334,074, representing a 107% increase from $1,610,076 in the same period in 2021[98]. - The gas-powered boat segment generated net sales of $23,218,666, while the electric boat segment reported a loss from operations of $2,180,296 for the nine months ended September 30, 2022[78]. - The company reported a net loss of $2,617,208 for the nine months ended September 30, 2022, compared to a net loss of $200,477 for the same period in 2021[26]. - Net loss for the three months ended September 30, 2022, was $877,109, compared to a net loss of $383,277 for the same period in 2021, reflecting a 131% increase[107]. Assets and Liabilities - Total current assets increased to $26,248,656 as of September 30, 2022, compared to $13,073,346 as of December 31, 2021, representing a 100.0% increase[18]. - Total liabilities rose to $5,444,979 as of September 30, 2022, compared to $3,899,484 as of December 31, 2021, reflecting a 39.7% increase[18]. - Total stockholders' equity increased to $29,778,711 as of September 30, 2022, from $16,699,700 as of December 31, 2021, representing an increase of 78.2%[18]. - Cash and cash equivalents increased significantly to $19,975,562 as of September 30, 2022, from $6,975,302 as of December 31, 2021, marking a 186.5% increase[18]. - Total inventory increased to $4,393,238 as of September 30, 2022, from $1,799,769 at the end of 2021, with raw materials accounting for $4,138,044[45]. Operating Expenses - Operating expenses for the three months ended September 30, 2022, totaled $4,191,034, an increase of 116.5% compared to $1,932,610 in the same period of 2021[20]. - Total operating expenses for the nine months ended September 30, 2022, were $11,592,732, up 147% from $4,698,831 in the prior year[112]. - Salaries and wage-related expenses increased by 148%, or $4,741,478, to $7,938,954 for the nine months ended September 30, 2022, compared to $3,197,476 in the same period in 2021[114]. - Professional fees increased to $573,592 for the nine months ended September 30, 2022, from $217,591 in 2021, attributed to expenses related to being a public company[116]. Research and Development - The company incurred research and design expenses of $283,936 for the three months ended September 30, 2022, compared to $61,091 in the same period of 2021, indicating a 364.5% increase[20]. - Research and design expenses for the electric boat segment were $680,288 for the nine months ended September 30, 2022, compared to $61,091 in the same period of 2021, reflecting a significant increase[115]. Cash Flow - The company generated net cash provided by financing activities of $14,896,218 during the nine months ended September 30, 2022, compared to $16,153,814 in the same period of 2021[26]. - The company reported a net cash used in operating activities of $2,584,381 for the nine months ended September 30, 2022, compared to $743,435 for the same period in 2021[26]. - Cash and cash equivalents increased by 186.4% to $19,975,562 as of September 30, 2022, from $6,975,302 as of December 31, 2021[124]. Internal Controls and Compliance - The company has identified material weaknesses in internal controls over financial reporting, which are being addressed through a remediation plan that includes hiring additional staff and implementing a new operating system[150][164]. - Management evaluated the effectiveness of disclosure controls and procedures as of September 30, 2022, and concluded they were not effective due to material weaknesses[149]. - The company is continuing to develop and refine its internal controls to ensure compliance with SEC rules and GAAP[164]. Strategic Developments - The company formed a new subsidiary, Fix My Boat, Inc., to utilize a franchise model for marine mechanics across the country[28]. - The company anticipates revenues from fully integrated electric boats to commence in late 2023, with ongoing development efforts for prototype engines and boats[88]. - The company has signed a two-year lease for a warehouse facility to build prototype boats, with monthly rent starting at $6,600[82]. - Forza's operations have primarily focused on finalizing the design and engineering of the electric sport boat and preparing for its launch[169]. Risks and Challenges - The company is subject to risks from changes in economic conditions, including inflation and geopolitical factors, which could adversely impact business and operating results[156][157]. - There is a risk that weaknesses in internal controls could adversely affect financial reporting and investor confidence, potentially impacting stock price[166]. - The anticipated fully electric sport boat has not yet been developed, and there is uncertainty regarding market interest and successful mass production[168].