pfie-20210930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 30, 2021
☐	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 001-36378

PROFIRE ENERGY, INC.

(Exact name of registrant as specified in its charter)


Nevada			20-0019425
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
321 South 1250 West, Suite 1
Lindon, Utah			84042
(Address of principal executive offices)			(Zip Code)

(801) 796-5127

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐			Accelerated Filer ☐
Non-accelerated filer ☒			Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common, $0.001 Par Value

PFIE

NASDAQ

As of November 1, 2021, the registrant had 51,658,386 shares of common stock issued and 48,105,774 shares of common stock outstanding, par value $0.001.

PROFIRE ENERGY, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	4

	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows (Unaudited)	7

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	8

Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations		16

Item 3. Quantitative and Qualitative Disclosure about Market Risk		20

Item 4. Controls and Procedures		20

PART II — OTHER INFORMATION

Item 1. Legal Proceedings		21

Item 1A. Risk Factors		21

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		21

Item 3. Defaults Upon Senior Securities		21

Item 4. Mine Safety Disclosures		21

Item 5. Other Information		21

Item 6. Exhibits		22

Signatures		23

PART I. FINANCIAL INFORMATION

Item 1 Financial Information


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
	As of
	September 30, 2021		December 31, 2020
ASSETS	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	9,129,416	$	9,148,312
Short-term investments	1,420,884		2,388,601

Accounts receivable, net	4,632,245		3,719,508
Inventories, net (note 3)	7,472,750		8,414,772
Prepaid expenses and other current assets (note 4)	1,184,717		1,678,428
Income tax receivable	1,092,282		486,154
Total Current Assets	24,932,294		25,835,775
LONG-TERM ASSETS
Net deferred tax asset	—		—
Long-term investments	7,939,582		6,064,294

Financing right-of-use asset	19,798		50,094
Property and equipment, net	11,401,978		12,021,811
Intangible assets, net	1,604,821		1,771,870
Goodwill	2,579,381		2,579,381
Total Long-Term Assets	23,545,560		22,487,450
TOTAL ASSETS	$	48,477,854	$	48,323,225

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,495,216	$	1,178,979
Accrued liabilities (note 5)	1,422,372		1,196,870
Current financing lease liability (note 6)	20,927		39,451

Total Current Liabilities	2,938,515		2,415,300
LONG-TERM LIABILITIES
Net deferred income tax liability	572,721		522,870
Long-term financing lease liability (note 6)	—		12,669
TOTAL LIABILITIES	3,511,236		2,950,839

STOCKHOLDERS' EQUITY (note 7)
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding	—		—
Common stock: $0.001 par value, 100,000,000 shares authorized: 51,654,386 issued and 48,242,008 outstanding at September 30, 2021, and 51,384,961 issued and 47,972,583 outstanding at December 31, 2020	51,654		51,385
Treasury stock, at cost	(5,353,019)		(5,353,019)
Additional paid-in capital	30,727,928		30,293,472
Accumulated other comprehensive loss	(2,082,997)		(2,148,924)
Retained earnings	21,623,052		22,529,472
TOTAL STOCKHOLDERS' EQUITY	44,966,618		45,372,386
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	48,477,854	$	48,323,225

The accompanying notes are an integral part of these condensed consolidated financial statements.


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
REVENUES (note 8)
Sales of goods, net	$	6,296,736	$	3,517,280	$	16,328,810	$	14,377,377
Sales of services, net	646,462		482,826		1,741,020		1,429,350
Total Revenues	6,943,198		4,000,106		18,069,830		15,806,727

COST OF SALES
Cost of goods sold-product	3,217,655		2,141,888		8,666,168		7,919,959
Cost of goods sold-services	606,075		337,795		1,451,775		1,114,804
Total Cost of Goods Sold	3,823,730		2,479,683		10,117,943		9,034,763

GROSS PROFIT	3,119,468		1,520,423		7,951,887		6,771,964

OPERATING EXPENSES
General and administrative	2,980,945		2,247,614		8,319,353		8,273,925
Research and development	290,657		433,800		848,993		1,073,074
Depreciation and amortization	166,155		168,507		500,492		496,976
Total Operating Expenses	3,437,757		2,849,921		9,668,838		9,843,975

LOSS FROM OPERATIONS	(318,289)		(1,329,498)		(1,716,951)		(3,072,011)

OTHER INCOME (EXPENSE)
Gain on sale of property and equipment	31,685		36,483		144,078		193,938
Other income (expense)	(2,984)		(48,349)		1,755		(49,667)
Interest income	33,067		103,364		82,698		255,289
Total Other Income	61,768		91,498		228,531		399,560

LOSS BEFORE INCOME TAXES	(256,521)		(1,238,000)		(1,488,420)		(2,672,451)

INCOME TAX BENEFIT	348,767		180,252		582,000		440,936

NET INCOME (LOSS)	$	92,246	$	(1,057,748)	$	(906,420)	$	(2,231,515)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	$	(263,908)	$	233,170	$	39,183	$	(336,986)
Unrealized gains (losses) on investments	(20,811)		(36,840)		26,744		(121,319)
Total Other Comprehensive Income (Loss)	(284,719)		196,330		65,927		(458,305)

TOTAL COMPREHENSIVE LOSS	$	(192,473)	$	(861,418)	$	(840,493)	$	(2,689,820)

BASIC EARNINGS (LOSS) PER SHARE	$	—	$	(0.02)	$	(0.02)	$	(0.05)
FULLY DILUTED EARNINGS (LOSS) PER SHARE	$	—	$	(0.02)	$	(0.02)	$	(0.05)

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING	48,239,236		47,933,318		48,095,404		47,717,114
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING	49,328,808		47,933,318		48,095,404		47,717,114

The accompanying notes are an integral part of these condensed consolidated financial statements.


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2020	47,972,583	$	51,385	$	30,293,472	$	(2,148,924)	$	(5,353,019)	$	22,529,472	$	45,372,386
Stock based compensation	—	—		125,043		—		—		—		125,043

Stock issued in settlement of RSUs	49,113	49		(49)		—		—		—		—
Tax withholdings paid related to stock based compensation	—	—		(26,629)		—		—		—		(26,629)

Foreign currency translation	—	—		—		139,606		—		—		139,606
Unrealized losses on investments	—	—		—		(7,974)		—		—		(7,974)
Net loss	—	—		—		—		—		(601,500)		(601,500)
Balance, March 31, 2021	48,021,696	$	51,434	$	30,391,837	$	(2,017,292)	$	(5,353,019)	$	21,927,972	$	45,000,932
Stock based compensation	—	—		207,084		—		$	—	—		207,084

Stock issued in settlement of RSUs	217,312	217		(217)		—		—		—		—
Tax withholdings paid related to stock based compensation	—	—		(16,200)		—		—		—		(16,200)

Foreign currency translation	—	—		—		163,485		—		—		163,485
Unrealized gains on investments	—	—		—		55,529		—		—		55,529
Net loss	—	—		—		—		—		(397,166)		(397,166)
Balance, June 30, 2021	48,239,008	$	51,651	$	30,582,504	$	(1,798,278)	$	(5,353,019)	$	21,530,806	$	45,013,664
Stock based compensation	—	—		142,754		—		—		—		142,754
Stock issued in exercise of stock options	3,000	3		2,670		—		—		—		2,673



Foreign currency translation	—	—		—		(263,908)		—		—		(263,908)
Unrealized losses on investments	—	—

SEC Form 10-Q filed by Profire Energy, Inc.