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US LIGHTING GROUP, INC.

(USLG)
Delayed OTC Markets  -  12:40 2022-12-01 pm EST
0.1150 USD   +4.55%
11/18U.S. LIGHTING GROUP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)
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11/02U.S. LIGHTING GROUP, INC. Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits (form 8-K/A)
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U.S. LIGHTING GROUP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/15/2022 | 12:50pm EST

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.



General Overview


US Lighting Group, Inc. (the "Company") was originally incorporated in the State of Florida on October 17, 2003, under the name Luxurious Travel Corp., The Company acquired all of the issued and outstanding capital stock of US Lighting Group, Inc. (founded in 2013 in accordance with the laws of the State of Wyoming) on July 13, 2016, and the corporate name was changed on August 9, 2016, to the US Lighting Group, Inc. At the time the Company designed and manufactured commercial LED lighting, both for retrofits and new construction.

Through supplying Original Equipment Manufacturers (OEM's) with electronic components the Company was introduced to the Recreational Vehicle (RV) Industry. Management identified a fast growing and underserved niche of small, tow-behind fully molded fiberglass travel trailers. The Company started developing a new business plan to create a luxury 17' Travel Camper to appeal to young professionals working remotely as well as retirees and other consumers intrigued by the travelling lifestyle.

On January 11, 2021, the Company formed Cortes Campers, LLC ("Cortes Campers"), a wholly owned subsidiary, to operate its new brand of innovative travel trailers. During the second part of 2021 the Company heavily invested in Research and Development as well as production planning for the 17' Camper with the goal of starting camper deliveries in early 2022.

The Company plans to expand its manufacturing footprint, enhance production techniques, and develop more products in the RV, marine, composite housing, and electronics sectors.

Results of Operations for the Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021



Sales


Total sales from continuing operations for the three months ended the June 30, 2022 were $49,000, compared to $1,000 for the three months ended June 30, 2021, an increase of $48,000. The increase in sales is attributed to new sales through our Cortes Campers subsidiary. During the current period all sales revenue was from Cortes Campers subsidiary, whereas most of June 30, 2021, sales are discontinued and presented as part of discontinued operations.



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Cost of Goods Sold


Cost of goods sold from continuing operations for the three months ended the June 30, 2022 were $44,000, compared to $2,000 for the three months ended the June 30, 2021. The June 30, 2022 cost of goods sold relates to camper sales from the Company's Cortes Campers subsidiary, whereas most of June 30, 2021 sales are discontinued and presented as part of discontinued operations.



Operating Expenses


Selling, general and administrative expenses ("SG&A") from continuing operations were $325,000 for the three months ended the June 30, 2022, compared to $358,000 for the three months ended the June 30, 2021, a decrease of $33,000, or 9%. The decrease over the prior year can be primarily attributed to decreased bad debt expense of $40,000 offset partially by increased payroll expense of $5,000.

We had no product development costs for the three months ended the June 30, 2022, compared to $6,000 for the three months ended the June 30, 2021, a decrease of $6,000. The decrease is due to the Company changing its focus to the RV, marine, composite housing, and electronics sectors. We are currently a distributer and not a manufacturer.



Other Income / Expense


During the three months ended the June 30, 2022, we had total other expenses of $80,000, including: other income of $79,000, recognized a realized loss of $49,000 and an unrealized loss of $117,000 from investments, interest income of $1,000 related to investments, and interest expense of $7,000. During the three months ended the June 30, 2021, we had total other income of $204,000. We had other income of $15,000, recognized an unrealized gain of $204,000 from investments, and interest expense of $24,000.



Net Loss


We had a net loss from continuing operations of $400,000 for the three months ended June 30, 2022, compared to $161,000 for the three months ended the June 30, 2021. Our overall net loss from continuing operations increased mainly to the unrealized loss on our investments in the current period compared to the unrealized gain in the prior period. For the three months ended June 30, 2021, we also had $3,915,000 of income from the sale of discontinued operations and a $301,000 net loss from discontinued operations.

Results of Operations for the Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021



Sales


Total sales from continuing operations for the six months ended the June 30, 2022 were $125,000, compared to $2,000 for the six months ended June 30, 2021, an increase of $123,000. The increase in sales is attributed to new sales through our Cortes Campers subsidiary. During the current period all sales revenue was from Cortes Campers subsidiary, whereas most of June 30, 2021, sales are discontinued and presented as part of discontinued operations.



Cost of Goods Sold


Cost of goods sold from continuing operations for the six months ended the June 30, 2022 were $112,000, compared to $3,000 for the six months ended the June 30, 2021. The June 30, 2022 cost of goods sold relates to camper sales from the Company's Cortes Campers subsidiary, whereas most of June 30, 2021 sales are discontinued and presented as part of discontinued operations.



Operating Expenses


Selling, general and administrative expenses ("SG&A") from continuing operations were $591,000 for the six months ended the June 30, 2022, compared to $575,000 for the six months ended the June 30, 2021, an increase of $16,000, or 3%. The increase over the prior year can be attributed to increased personnel costs associated with the Company's Cortes Campers Subsidiary.



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We had no product development costs for the six months ended the June 30, 2022, compared to $39,000 for the six months ended the June 30, 2021, a decrease of $39,000. The decrease is due to the Company changing its focus to the RV, marine, composite housing, and electronics sectors. We are currently a distributer and not a manufacturer.



Other Income / Expense


During the six months ended the June 30, 2022, we had total other expense of $198,000 including: other income of $94,000, recognized a realized loss of $18,000 and unrealized loss of $274,000 from investments, interest income of $3,000 related to investments, and interest expense of $16,000. During the six months ended the June 30, 2021, we had total other income of $187,000. We had other income, related party of $30,000, recognized an unrealized gain of $204,000 from investments, and interest expense, related party of $56,000.



Net Loss


We had a net loss from continuing operations of $776,000 for the six months ended June 30, 2022, compared to $428,000 for the six months ended the June 30, 2021. Our overall net loss from continuing operations increased mainly due to the unrealized loss on our investments in the current period. For the six months ended June 30, 2021, we also had $3,915,000 of income from the sale of discontinued operations and a $182,000 net loss from discontinued operations.

Liquidity and Capital Resources



Changes in Cash Flows


Net cash used in operating activities for the six months ended June 30, 2022, was $732,000, as compared to net cash provided by operating activities of $3,845,000, for the six months ended the June 30, 2021, which included $3,915,000 net income from the sale of discontinued operations.

Net cash provided by investing activities was $1,202,000 for the six months ended June 30, 2022, compared to net cash used of $3,459,000 for the six months ended June 30, 2021. In the prior period we used $3,800,000 to invest in trading securities and $159,000 to purchase property and equipment. This was offset with proceeds of $400,000 from the sale of fixed assets and $100,000 from proceeds from investments. In the current period we received $35,000 from the sale of fixed assets and $988,000 from proceeds from investments..

Net cash used in financing activities for the six months ended June 30, 2022, was $457,000 and included the repayment of $46,000 of loans payable, and repayment of $411,000 of notes payable to a related party. Net cash used in financing activities for the six months ended June 30, 2021, was $408,000 and included proceeds of $308,000 received from the sale of common stock and $177,000 from notes payable. Cash received was offset by the repayment of $159,000 of loans payable, and repayment of $734,000 of notes payable to a related party.




Loans payable for continuing operations consisted of the following as of June
30, 2022:



                                         June 30,
                                           2022
Secured promissory note (a)             $  261,000
Vehicle loans (b)                          118,000
Convertible Notes (c)                       58,000
Total loans payable                        437,000
Loans payable, current portion            (107,000 )

Loans payable, net of current portion $ 330,000

a. On August 26, 2020, the Company entered into a loan agreement with Apex

    Commercial Capital Corp. in the principal amount of $266,000 with interest at
    9.49% per annum and due on September 10, 2030. The loan requires one hundred
    nineteen (119) monthly payments of $2,322, with a final balloon payment on the
    one hundred twentieth (120) month, or September 10, 2030, of $224,835. The
    loan is guaranteed by the Company and the Company's former Chief Executive
    Officer and secured by the Company's real estate. The loan balance on December
    31, 2021, was $263,000. During the six months ended June 30, 2022, the Company
    made principal payments of $2,000, leaving a total of $261,000 owed at June
    30, 2022.




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b. The Company purchases vehicles for employees and research and development

    activities. Generally, vehicles are sold or traded in at the end of the
    vehicle loan period. The aggregate vehicle loan balance on three vehicles was
    $105,000 at December 31, 2020, with an original loan period of 72 to 144
    months, and interest rates of zero percent to 10.99%. During the year ended
    December 31, 2021, the Company purchased a vehicle for $40,000, with a 72
    month loan term, and an interest rate of 4.15%, and made total principal
    payments of $18,000 on its vehicle loans, leaving an aggregate loan balance on
    three vehicles of $127,000 at December 31, 2021. During the six months ended
    June 30, 2022, the Company made principal payments of $9,000, leaving a total
    of $118,000 owed at June 30, 2022.



c. The Company issued convertible secured debentures ("Convertible Notes") to

    accredited investors from December 2019 through June 2020, with interest at
    10% per annum, a term of eighteen months, and secured by all of the assets of
    the Company and its subsidiaries. The Convertible Notes provide a conversion
    right, in which the principal amount of the Convertible Notes, together with
    any accrued but unpaid interest, could be converted into the Company's common
    stock at a conversion price at $0.25 per share. The Convertible Notes balance
    on December 31, 2021, including accrued interest of $10,000, was $60,000. As
    of June 4, 2021, the remaining Convertible Note was no longer convertible into
    shares of common stock since the conversion rights expired on June 4, 2021,
    and the note stopped accruing interest on its maturity date on June 5, 2021.
    The Note has been reclassed from Convertible Note to Loans Payable on the
    balance sheet.



Critical Accounting Policies and Estimates

Refer to our Form 10-K for the year ended December 31, 2021, for a full discussion of our critical accounting policies.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2021 0,07 M - -
Net income 2021 3,05 M - -
Net cash 2021 1,04 M - -
P/E ratio 2021 3,49x
Yield 2021 -
Capitalization 11,3 M 11,3 M -
EV / Sales 2020 5,82x
EV / Sales 2021 129x
Nbr of Employees 4
Free-Float 47,7%
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Managers and Directors
Anthony Corpora President, CEO, Treasurer & Director
Donald O. Retreage Chief Financial Officer
Olga Smirnova Secretary & Director
Patricia Salaciak Director & Marketing Director
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