10-K: Shorepower Technologies Reports Increased Revenue but Continues to Face Losses in Fiscal Year 2024

Shorepower Technologies saw a significant revenue increase in 2024, but net losses persist as the company focuses on expanding its electric vehicle charging infrastructure.

Summary

• Shorepower Technologies, Inc., a transportation electrification company, reported its financial results for the year ended December 31, 2024.
• The company experienced a revenue increase of 225.6%, from $20,109 in 2023 to $65,481 in 2024.
• Despite the revenue growth, the company reported a net loss of $450,318 for 2024, a decrease from the $632,948 loss in 2023.
• The company operates the largest heavy-duty focused network of electrified parking spaces (EPS) in North America, with 60 facilities and approximately 1,800 electrified parking spaces.
• Shorepower has secured approximately $400,000 in grants to upgrade additional sites with total project values of over $1,000,000 and has an additional $1,000,000 in grant applications pending.
• The company is focused on upgrading existing truck stop electrification (TSE) stations and adding electric vehicle supply equipment (EVSE) for heavy-duty trucks and buses.
• Future funding will come from revenues generated from the business or additional investment.
• The company estimates that 20% to 50% of infrastructure build-out costs will have to be contributed by investors and revenues generated from the business, depending on the desired speed of the build out, grant cost share requirements and electric vehicle demand.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While revenue increased significantly, the company continues to operate at a loss and faces challenges in scaling its operations. The successful grant applications are a positive sign, but the company's future depends on securing additional funding and achieving profitability.

Positives

• Significant revenue increase of 225.6% indicates growing market traction.
• Net loss decreased, suggesting improved cost management or operational efficiency.
• Successful in securing grants, providing non-dilutive funding for infrastructure upgrades.
• Established network of facilities provides a foundation for expansion into EV charging.
• Development of new DC fast charger with battery energy storage could provide a competitive advantage.
• The company is a certified minority owned business enterprise (MBE).

Negatives

• The company continues to operate at a net loss.
• Gross margins are negative, indicating that the cost of revenue exceeds total revenue.
• The company relies on future funding from revenues or additional investment.
• The company has material weaknesses in internal control that could adversely affect the Company's ability to record, process, summarize and report financial data.

Risks

• Changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, and competition could adversely affect operations.
• Uncertainty surrounding the future of the Bipartisan Infrastructure Law could impact funding for charging stations.
• Delays in installation of EV charging stations due to state, regional, and local regulations.
• Competition from other EV charging companies, including ChargePoint, ABB, Tesla, and others.
• Cybersecurity threats could result in security and privacy breaches and interruption in service.
• The company's present financial situation raises substantial doubt about its ability to continue as a going concern.

Future Outlook

The company intends to continue to attract new customers and pursue a business model which attracts new customers to our charging stations and encourages existing customers to increase their charging footprint over time as EV penetration increases. The company intends to explore potential high-quality merger and acquisition opportunities in this dynamic marketplace both domestically and overseas.

Management Comments

• We believe that our 20 years of experience in the transportation electrification space provide a competitive advantage in what we anticipate to be an explosive growth period in the electric vehicle industry.

Industry Context

The company operates in the growing electric vehicle charging infrastructure market, facing competition from established players like ChargePoint, Tesla, and others. The company aims to differentiate itself through lower build-out costs, competitive pricing, and securing government grants.

Comparison to Industry Standards

• Comparing Shorepower to industry leaders like ChargePoint (CHPT) and EVgo (EVGO) reveals significant differences in scale and financial performance.
• ChargePoint, with a market capitalization of around $1 billion, reported revenue of $493 million in fiscal year 2023, while EVgo, valued at approximately $300 million, posted revenue of $161 million.
• Shorepower's revenue of $65,481 pales in comparison, highlighting its early stage of development.
• While ChargePoint and EVgo are also not yet profitable, their larger scale allows for greater investment in infrastructure and technology.
• Shorepower's strategy of focusing on heavy-duty vehicles and leveraging government grants could provide a niche advantage, but it needs to significantly scale its operations to compete effectively.

Related Party Transactions

• The company has significant related party transactions with its CEO, Jeff Kim, including promissory notes for funds loaned and accrued compensation.

Stakeholder Impact

• Shareholders: The company's continued losses and reliance on future funding may negatively impact shareholder value.
• Employees: The company's ability to attract and retain employees depends on securing sufficient funding.
• Customers: The company's expansion of EV charging infrastructure will benefit customers by providing more access to charging stations.
• Suppliers: The company's growth will increase demand for components and manufacturing services.

Next Steps

• Continue upgrading the control system at existing sites to generate interim income.
• Focus on charging station upgrades to generate increased revenue.
• Pursue additional government contracts and/or grants.
• Explore potential high-quality merger and acquisition opportunities.

Key Dates

Keywords

electric vehicle charging, truck stop electrification, EVSE, TSE, eTRU, charging stations, transportation electrification, grants, infrastructure, Shorepower Technologies