pfie-20220930

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, 2022
☐	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, 2022, the registrant had 52,078,283 shares of common stock issued and 47,040,153 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		22

PART I. FINANCIAL INFORMATION

Item 1 Financial Information


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
	As of
	September 30, 2022		December 31, 2021
ASSETS	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	5,639,865	$	8,188,270
Short-term investments	867,658		1,013,683

Accounts receivable, net	8,933,905		6,262,799
Inventories, net (note 3)	10,205,207		7,185,248
Prepaid expenses and other current assets (note 4)	2,642,512		1,025,276
Income tax receivable	—		560,445
Total Current Assets	28,289,147		24,235,721
LONG-TERM ASSETS
Net deferred tax asset	185,772		163,254
Long-term investments	7,944,181		8,259,809

Financing right-of-use asset	132,760		65,280
Property and equipment, net	10,374,126		11,185,539
Intangible assets, net	1,312,660		1,549,138
Goodwill	2,579,381		2,579,381
Total Long-Term Assets	22,528,880		23,802,401
TOTAL ASSETS	$	50,818,027	$	48,038,122

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,008,126	$	1,822,559
Accrued liabilities (note 5)	3,157,221		1,872,348
Current financing lease liability (note 6)	53,084		30,214
Income taxes payable	570,430		—
Total Current Liabilities	5,788,861		3,725,121
LONG-TERM LIABILITIES
Net deferred income tax liability	480,105		136,106
Long-term financing lease liability (note 6)	80,684		35,912
TOTAL LIABILITIES	6,349,650		3,897,139

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: 52,078,283 issued and 47,040,153 outstanding at September 30, 2022, and 51,720,142 issued and 47,643,233 outstanding at December 31, 2021	52,079		51,720
Treasury stock, at cost	(7,336,323)		(6,107,593)
Additional paid-in capital	31,570,226		30,819,394
Accumulated other comprehensive loss	(3,418,272)		(2,100,467)
Retained earnings	23,600,667		21,477,929
TOTAL STOCKHOLDERS' EQUITY	44,468,377		44,140,983
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	50,818,027	$	48,038,122

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,
	2022		2021		2022		2021
REVENUES (note 8)
Sales of products, net	$	11,895,881	$	6,296,736	$	29,634,986	$	16,328,810
Sales of services, net	933,457		646,462		2,330,639		1,741,020
Total Revenues	12,829,338		6,943,198		31,965,625		18,069,830

COST OF SALES
Cost of sales - product	5,960,311		3,217,655		14,873,075		8,666,168
Cost of sales - services	750,151		606,075		2,013,825		1,451,775
Total Cost of Sales	6,710,462		3,823,730		16,886,900		10,117,943

GROSS PROFIT	6,118,876		3,119,468		15,078,725		7,951,887

OPERATING EXPENSES
General and administrative	3,413,048		2,980,945		10,591,986		8,319,353
Research and development	435,059		290,657		1,105,571		848,993
Depreciation and amortization	152,876		166,155		479,473		500,492
Total Operating Expenses	4,000,983		3,437,757		12,177,030		9,668,838

INCOME (LOSS) FROM OPERATIONS	2,117,893		(318,289)		2,901,695		(1,716,951)

OTHER INCOME (EXPENSE)
Gain on sale of assets	12,887		31,685		323,570		144,078
Other income (expense)	(6,839)		(2,984)		(43,567)		1,755
Interest income	45,107		33,067		86,959		82,698
Total Other Income	51,155		61,768		366,962		228,531

INCOME (LOSS) BEFORE INCOME TAXES	2,169,048		(256,521)		3,268,657		(1,488,420)

INCOME TAX BENEFIT (EXPENSE)	(958,300)		348,767		(1,145,919)		582,000

NET INCOME (LOSS)	$	1,210,748	$	92,246	$	2,122,738	$	(906,420)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)	$	(591,282)	$	(263,908)	$	(723,209)	$	39,183
Unrealized gains (losses) on investments	(172,802)		(20,811)		(594,596)		26,744
Total Other Comprehensive Income (Loss)	(764,084)		(284,719)		(1,317,805)		65,927

COMPREHENSIVE INCOME (LOSS)	$	446,664	$	(192,473)	$	804,933	$	(840,493)

BASIC EARNINGS (LOSS) PER SHARE	$	0.03	$	—	$	0.04	$	(0.02)
FULLY DILUTED EARNINGS (LOSS) PER SHARE	$	0.02	$	—	$	0.04	$	(0.02)

BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING	47,036,012		48,239,236		47,201,611		48,095,404
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING	48,558,207		49,328,808		48,761,346		48,095,404

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, 2021	47,643,233	$	51,720	$	30,819,394	$	(2,100,467)	$	(6,107,593)	$	21,477,929	$

SEC Form 10-Q filed by Profire Energy Inc.