TOUGHBUILT™ ANNOUNCES RECORD THIRD QUARTER 2020 FINNACIAL RESULTS
November 09 2020 - 9:00AM
ToughBuilt Industries, Inc. (“ToughBuilt®” or the “Company”)
(NASDAQ: TBLT; TBLTW) announced today its unaudited financial
results for the third quarter and nine-months ended September 30,
2020.
Operating Results for the Three Months Ended September 30,
2020
|
Net sales for three-month period ended September 30, 2020 were
$16.6 million, an increase of 248% from $4.7 million for the same
period in 2019. |
|
Gross profit increased by 410% to $7.5 million for the three
months ended Sept 30, 2020, from $1.4 million in the same period in
2019. |
|
Income from operations for the three months ended Sept 30, 2020
was $335,000, compared to a loss of $2.4 million for the same
period in 2019. |
|
Net Income was $120,000 for the three months ended Sept 30,
2020, compared to a net loss of $2.6 million in the same period in
2019. |
Operating Results for the Nine Months Ended September 30,
2020
|
Net sales for the nine-month period ended Sept 30, 2020 were
$27.4 million, an increase of 88% from $14.5 million for the same
period in 2019. |
|
Gross profit increased by 203% to $11.6 million in the nine
months ended Sept 30, 2020, from $3.8 million for the same period
in 2019. |
|
Loss from operations for the nine months ended Sept 30, 2020
was $5.3 million, compared to a loss of $6.4 million for the same
period in 2019. |
|
Net loss for the nine-month period ended Sept 30, 2020 was $6.1
million, compared to a net loss of $2.1 million for the same period
in 2019. |
Michael Panosian, ToughBuilt’s Chief Executive
Officer, commented, “ToughBuilt delivered record financial results
across the board, despite the Covid-19 pandemic impacting the
industry globally. I am proud of our tough team and grateful to all
retail partners, international manufacturers and global
distributors for their amazing support and efforts. We continue to
navigate today’s complex business landscape and are encouraged to
implement more development and growth in all Markets.”
“During the third quarter, we increased our
inventory levels to ensure timely delivery of products, increased
our product pipeline, expanded our customer and manufacturing
relationships internationally and utilized our Amazon.com
storefront to create more brand awareness and sales to service our
end users. We remain committed and confident to providing
market-leading innovative quality products for the professionals
and other passionate builders.”
ABOUT TOUGHBUILT INDUSTRIES, INC.
ToughBuilt Industries, Inc. is an advanced
product design, manufacturer and distributor with emphasis on
innovative products. Currently focused on tools and other
accessories for the professional and do-it-yourself construction
industries, the Company markets and distributes various home
improvement and construction product lines for both the
do-it-yourself (DIY) and professional markets within the global
multibillion dollar per year tool market industry under the
TOUGHBUILT™ brand name. The Company’s products are designed
in-house. The Company’s current product line includes three major
categories, with several additional categories in various stages of
development, consisting of Soft Goods & Kneepads and Sawhorses
& Work Products. The Company’s mission is to provide innovative
and superior quality-products to the building and home improvement
communities derived in part from enlightened creativity for our end
users while enhancing performance, improving well-being and
building high brand loyalty. Additional information about the
Company is available at: https://www.toughbuilt.com/.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking
statements.” Such statements may be preceded by the words
“intends,” “may,” “will,” “plans,” “expects,” “anticipates,”
“projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,”
“potential” or similar words. Forward-looking statements are not
guarantees of future performance, are based on certain assumptions
and are subject to various known and unknown risks and
uncertainties, many of which are beyond the Company’s control, and
cannot be predicted or quantified and consequently, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include,
without limitation, risks and uncertainties associated with (i)
market acceptance of our existing and new products, (ii) delays in
bringing products to key markets, (iii) an inability to secure
regulatory approvals for the ability to sell our products in
certain markets, (iv) intense competition in the industry from much
larger, multinational companies, (v) product liability claims, (vi)
product malfunctions, (vii) our limited manufacturing capabilities
and reliance on subcontractors for assistance, (viii) our efforts
to successfully obtain and maintain intellectual property
protection covering our products, which may not be successful, (ix)
our reliance on single suppliers for certain product components,
(x) the fact that we will need to raise additional capital to meet
our business requirements in the future and that such capital
raising may be costly, dilutive or difficult to obtain and (xi) the
fact that we conduct business in multiple foreign jurisdictions,
exposing us to foreign currency exchange rate fluctuations,
logistical and communications challenges, burdens and costs of
compliance with foreign laws and political and economic instability
in each jurisdiction. More detailed information about the Company
and the risk factors that may affect the realization of forward
looking statements is set forth in the Company’s filings with the
Securities and Exchange Commission (SEC), including the Company’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K. Investors and security holders are
urged to read these documents free of charge on the SEC’s web site
at http://www.sec.gov. The Company assumes no obligation to
publicly update or revise its forward-looking statements as a
result of new information, future events or otherwise.
Investor Relations Contact: Andrew J. Barwicki
Investor Relations Tel: 516-662-9461 Andrew@barwicki.com
TOUGHBUILT INDUSTRIES,
INC.CONDENSED BALANCE SHEETS
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
(UNAUDITED) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
8,891,612 |
|
|
$ |
25,063 |
|
Accounts receivable |
|
|
12,584,296 |
|
|
|
2,075,380 |
|
Factor receivables, net |
|
|
2,107,082 |
|
|
|
174,042 |
|
Inventory |
|
|
6,684,030 |
|
|
|
2,215,497 |
|
Prepaid assets |
|
|
1,045,210 |
|
|
|
254,070 |
|
Note receivable |
|
|
1,480,000 |
|
|
|
4,480,000 |
|
Total Current Assets |
|
|
32,792,230 |
|
|
|
9,224,052 |
|
Other Assets |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,352,561 |
|
|
|
1,029,885 |
|
Other assets |
|
|
221,168 |
|
|
|
215,688 |
|
Total Assets |
|
$ |
35,365,959 |
|
|
$ |
10,469,625 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,508,639 |
|
|
$ |
2,536,871 |
|
Accrued expenses |
|
|
548,066 |
|
|
|
364,309 |
|
Factor loan payable |
|
|
1,513,885 |
|
|
|
125,645 |
|
Convertible notes payable, net of discount |
|
|
1,945,065 |
|
|
|
4,216,307 |
|
Total Current Liabilities |
|
|
9,515,655 |
|
|
|
7,243,132 |
|
Total Liabilities |
|
|
9,515,655 |
|
|
|
7,243,132 |
|
|
|
|
|
|
|
|
|
|
Commitment and Contingencies
(Note 5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
Series D Preferred Stock, $1,000 par value, 5,775 shares
authorized, 0 and 5,775 issued, and outstanding at September 30,
2020 and December 31, 2019, respectively. Liquidation preference of
$5,775,000 at December 31, 2019. |
|
|
- |
|
|
|
4,816,485 |
|
Common stock, $0.0001 par value, 200,000,000 shares authorized,
38,414,631 and 3,300,015 shares issued and outstanding at September
30, 2020 and December 31, 2019, respectively |
|
|
3,842 |
|
|
|
330 |
|
Additional paid-in capital |
|
|
75,412,814 |
|
|
|
41,823,048 |
|
Accumulated deficit |
|
|
(49,566,352 |
) |
|
|
(43,413,370 |
) |
Total Shareholders’ Equity |
|
|
25,850,304 |
|
|
|
3,226,493 |
|
Total Liabilities and
Shareholders’ Equity |
|
$ |
35,365,959 |
|
|
$ |
10,469,625 |
|
TOUGHBUILT INDUSTRIES,
INC.CONDENSED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues, net of
allowances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal goods |
|
$ |
5,368,015 |
|
|
$ |
2,527,734 |
|
|
$ |
10,824,861 |
|
|
$ |
6,443,984 |
|
Soft goods |
|
|
11,295,374 |
|
|
|
2,256,353 |
|
|
|
16,587,686 |
|
|
|
8,116,914 |
|
Total revenues, net of
allowances |
|
|
16,663,389 |
|
|
|
4,784,087 |
|
|
|
27,412,547 |
|
|
|
14,560,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal goods |
|
|
2,906,559 |
|
|
|
1,759,091 |
|
|
|
6,559,020 |
|
|
|
4,733,524 |
|
Soft goods |
|
|
6,207,533 |
|
|
|
1,545,027 |
|
|
|
9,225,444 |
|
|
|
5,992,769 |
|
Total cost of goods sold |
|
|
9,114,092 |
|
|
|
3,304,118 |
|
|
|
15,784,464 |
|
|
|
10,726,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
7,549,297 |
|
|
|
1,479,969 |
|
|
|
11,628,083 |
|
|
|
3,834,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
6,423,593 |
|
|
|
3,549,480 |
|
|
|
15,480,432 |
|
|
|
8,807,483 |
|
Research and development |
|
|
789,890 |
|
|
|
391,460 |
|
|
|
1,496,129 |
|
|
|
1,521,503 |
|
Total operating expenses |
|
|
7,213,483 |
|
|
|
3,940,940 |
|
|
|
16,976,561 |
|
|
|
10,328,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
|
335,814 |
|
|
|
(2,460,971 |
) |
|
|
(5,348,478 |
) |
|
|
(6,494,381 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(214,979 |
) |
|
|
(288,152 |
) |
|
|
(804,504 |
) |
|
|
(456,689 |
) |
Change in fair value of warrant derivative |
|
|
- |
|
|
|
59,781 |
|
|
|
- |
|
|
|
4,769,363 |
|
Total other income
(expense) |
|
|
(214,979 |
) |
|
|
(228,371 |
) |
|
|
(804,504 |
) |
|
|
4,312,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
120,835 |
|
|
$ |
(2,689,342 |
) |
|
$ |
(6,152,982 |
) |
|
$ |
(2,181,707 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of Series D
Preferred Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
(1,295,294 |
) |
|
|
- |
|
Common stock deemed
dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,137,190 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to common stockholders |
|
$ |
120,835 |
|
|
$ |
(2,689,342 |
) |
|
$ |
(7,488,276 |
) |
|
|
(4,318,897 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
share attributed to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per common
share |
|
$ |
0.00 |
|
|
$ |
(0.87 |
) |
|
$ |
(0.32 |
) |
|
$ |
(2.27 |
) |
Basic weighted average common
shares outstanding |
|
|
38,414,631 |
|
|
|
3,084,456 |
|
|
|
23,154,481 |
|
|
|
1,906,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per common
share |
|
$ |
0.00 |
|
|
$ |
(0.87 |
) |
|
$ |
(0.32 |
) |
|
$ |
(2.27 |
) |
Diluted weighted average
common shares outstanding |
|
|
38,414,631 |
|
|
|
3,084,456 |
|
|
|
23,154,481 |
|
|
|
1,906,179 |
|
TOUGHBUILT INDUSTRIES,
INC.CONDENSED STATEMENTS OF CASH
FLOWS(UNAUDITED)
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(6,152,982 |
) |
|
$ |
(2,181,707 |
) |
Adjustments to reconcile from
net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
394,322 |
|
|
|
157,652 |
|
Amortization of debt discount and debt issuance cost |
|
|
634,892 |
|
|
|
198,913 |
|
Change in fair value of warrant derivative |
|
|
- |
|
|
|
(4,769,363 |
) |
Stock-based compensation expense |
|
|
315,673 |
|
|
|
273,200 |
|
Changes in operating assets
and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(10,508,916 |
) |
|
|
(689,042 |
) |
Factor receivables, net |
|
|
(1,933,040 |
) |
|
|
597,871 |
|
Inventory |
|
|
(4,468,533 |
) |
|
|
(1,394,524 |
) |
Prepaid assets |
|
|
(218,739 |
) |
|
|
7,486 |
|
Other assets |
|
|
(5,479 |
) |
|
|
(66,415 |
) |
Accounts payable |
|
|
2,971,766 |
|
|
|
82,119 |
|
Accrued expenses |
|
|
183,757 |
|
|
|
(541,834 |
) |
Deferred revenue |
|
|
- |
|
|
|
(107,776 |
) |
Net cash used in operating
activities |
|
|
(18,787,279 |
) |
|
|
(8,433,420 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Proceeds from note receivable |
|
|
3,000,000 |
|
|
|
- |
|
Purchases of property and equipment |
|
|
(1,716,998 |
) |
|
|
(651,795 |
) |
Net cash provided by (used in)
investing activities |
|
|
1,283,002 |
|
|
|
(651,795 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from sales of common stock and warrants, net of costs |
|
|
28,122,740 |
|
|
|
- |
|
Proceeds from exercise of Series A warrants |
|
|
- |
|
|
|
2,172,680 |
|
Proceeds from exercise of Placement Agent warrants |
|
|
- |
|
|
|
16,818 |
|
Proceeds from note payable |
|
|
- |
|
|
|
4,515,000 |
|
Proceeds from factor loan payable |
|
|
1,388,240 |
|
|
|
- |
|
Repayments of factor loan payable |
|
|
|
|
|
|
(623,844 |
) |
Repayments of Series D Preferred Stock |
|
|
(3,140,154 |
) |
|
|
- |
|
Net cash provided by financing
activities |
|
|
26,370,826 |
|
|
|
6,080,654 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
increase in cash |
|
|
8,866,549 |
|
|
|
(3,004,561 |
) |
Cash, beginning of period |
|
|
25,063 |
|
|
|
5,459,884 |
|
Cash, end of period |
|
$ |
8,891,612 |
|
|
$ |
2,455,323 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
|
|
|
|
|
Cash paid during the period
for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
- |
|
|
$ |
- |
|
Income taxes |
|
$ |
- |
|
|
$ |
800 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Cashless exercise of warrants |
|
$ |
244 |
|
|
$ |
- |
|
Issuance of warrants in connection with convertible notes
payable |
|
$ |
- |
|
|
$ |
575,000 |
|
Debt issuance cost paid with warrants |
|
$ |
- |
|
|
$ |
20,000 |
|
Conversion of Series C Preferred Stock to common stock |
|
$ |
13 |
|
|
$ |
3,671,024 |
|
Conversion of convertible notes payable to common stock |
|
$ |
2,906,134 |
|
|
$ |
- |
|
Conversation of Series D Preferred Stock to common stock |
|
$ |
2,971,311 |
|
|
$ |
- |
|
Issuance of common stock for prepaid services |
|
$ |
572,400 |
|
|
$ |
- |
|
Restricted promissory note in connection with convertible notes
payable |
|
$ |
- |
|
|
$ |
4,780,000 |
|
Original issue discount |
|
$ |
- |
|
|
$ |
1,720,000 |
|
Conversion of Series B warrants into common stock |
|
$ |
- |
|
|
$ |
14,584,371 |
|
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