Annual Report for Fiscal Year Ending 12-31, 2024 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled "Risk Factors," "Cautionary Note Regarding Forward-Looking Statements" or in other parts of this Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

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Overview

Singlepoint is a diversified holding company principally engaged through its subsidiaries in providing renewable energy solutions and energy-efficient applications to drive better health and living. Our primary focus is sustainability by providing an integrated solar energy solution for our customers and clean environment solutions through our air purification business. We conduct our solar operations primarily through our subsidiary, The Boston Solar Company LLC ("Boston Solar"), in which we hold a 100% equity interest.

We conduct our air purification operations through Box Pure Air, LLC ("Box Pure Air"), in which we hold a 100% equity interest.

We also have ownership interests outside of our primary solar and air purification businesses. We consider these subsidiaries to be noncore businesses of ours. These noncore businesses are:

	·	Discount Indoor Garden Supply, Inc. ("DIGS"), in which we hold a 90% equity interest and which provides products and services within the agricultural industry designed to improve yields and efficiencies; and
	·	EnergyWyze LLC ("EnergyWyze"), a wholly owned subsidiary and which is a digital and direct marketing firm focused on customer lead generation in the solar energy industry;
	·	ShieldSaver, LLC ("ShieldSaver"), in which we hold a 51% equity interest and which focuses on efficiently tracking records of vehicle repairs.
	·	Singlepoint Direct Solar, LLC ("Direct Solar America"), in which we hold a 51% equity interest and which works with homeowners and small commercial business to provide solar, battery backup and electric vehicle ("EV") chargers at their location(s).

Recent Developments

Reverse Stock-splits

On August 15, 2024, the Company affected a 1 for 100 reverse stock split of the Company's common stock, and increased the number of the Company's authorized shares of Common Stock from 192,307,693 to 6,000,000,000. At the effective time of the reverse stock split, every 100 shares of issued and outstanding common stock were converted into one (1) share of issued and outstanding common stock. The par value per share of the common stock and the number of authorized or issued and outstanding shares of the Company's preferred stock remained unchanged. As a result of the reverse stock split, the Company further adjusted the share amounts under its employee incentive plan which had no outstanding options and common stock warrant agreements with third parties.

All disclosures of common shares and per common share data in the accompanying financial statements and related notes reflect this reverse stock split for all periods presented.

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Results from Operations

Year ended December 31, 2024, as compared to the year ended December 31, 2023

The following tables set forth our consolidated results of operations for the periods presented (all numbers are approximate).

		Year ended December 31,
		2024				2023
Revenue		$	20,283,000			$	26,320,000
Gross Profit		$	7,399,000			$	7,173,000
Operating Expenses		$	27,423,000			$	23,259,000
Other Expense, net		$	(8,910,000	)		$	(2,680,000	)
Net Loss		$	(28,934,000	)		$	(18,767,000	)

Revenue. For the years ended December 31, 2024, and 2023, we generated revenue of $20,283,000 and $26,320,000, respectively. The decrease was due primarily to an industry-wide decrease in demand amid increased economic uncertainty.

Cost of Revenue. For the years ended December 31, 2024, and 2023, cost of revenue was $12,255,000 and $19,147,000, respectively. The decrease was directly related to the decrease in revenues, partially offset by the Company focusing on selling jobs with larger margins.

Inventory Obsolescence. During the year ended December 31, 2024, the Company recorded inventory obsolescence of $629,000 resulting from slow moving and obsolete inventory.

Gross Profit. As a result of the foregoing, our gross profit was $7,399,000 for the year ended December 31, 2024, compared with $7,173,000, for the year ended December 31, 2023. The increase was due primarily due to the Company focusing on jobs with larger margins.

Operating Expenses. For the years ended December 31, 2024, and 2023, total operating expenses were $27,423,000 and $23,259,000, respectively. The increase was primarily due to impairment expenses in 2024 totaling $9,961,000 related to previously acquired intangible assets and goodwill.

Other Expense, net. For the years ended December 31, 2024, and 2023, other expense was $8,910,000 and $2,680,000, respectively. The increase was due primarily to increases in interest expense, financing costs, amortization of debt discounts, and loss on settlement of liabilities.

Net Loss. For the years ended December 31, 2024, and 2023, net loss was $28,934,000 and $18,767,000, respectively. The increase in net loss is primarily a result of higher operating and other expenses partially offset by higher gross profit.

Liquidity and Capital Resources

As of December 31, 2024, we had cash on hand of approximately $295,000. We anticipate funding our operations for the next 12 months using available cash, cash flow generated from our operations and proceeds from an offering. The Company plans to pay off current liabilities through sales and increasing revenue through sales of Company services and or products, or through financing activities as mentioned above, although there is no guarantee that the Company will ultimately do so. Should we not be able to fulfill our cash needs through the increase of revenue we will need to raise money through the sale of additional shares of common stock, convertible notes, debt or similar instrument(s). Our net losses and need for additional funding raise substantial doubt about the Company's ability to continue as a going concern. The Company's principal sources of liquidity have been cash provided by operating activities, as well capital raised from the sale of securities. The Company's operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses, the Company may not be able to maintain profitability. The Company's ability to continue in existence is dependent on the Company's ability to achieve profitable operations.

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Contractual Obligations and Future Cash Requirements

Our principal contractual obligations expected to give rise to material cash requirements consist of non-cancelable leases for our leased facilities, vehicles, tools and current short term as well as long term debt obligations as well as convertible notes. We lease properties in Boston, Massachusetts from an unrelated party under non-cancelable operating leases dating through 2027. The monthly operating lease payments for real estate range from approximately $5,000 to $20,000 through September 2027. Vehicle leases range from $600 to $1,400 per month through March 2029. Tools lease payments are $2,050 per month and end March 2027. We believe our liquidity resources, our cash on hand and cash generated by operations will be sufficient to cover these obligations.

Consolidated Statements of Cash Flow Data:

		Year Ended December 31, 2024				Year Ended December 31, 2023
Net cash used in operating activities		$	(2,615,000	)		$	(3,646,000	)
Net cash used in investing activities		$	(54,000	)		$	(175,000	)
Net cash provided by financing activities		$	2,205,000			$	4,016,000
Net change in cash		$	(464,000	)		$	195,000
Cash at beginning of year		$	759,000			$	564,000
Cash at end of year		$	295,000			$	759,000

Operating Activities

Cash used in operating activities -

For the year ended December 31, 2024, $2,615,000 net cash used in operating activities was due primarily from our net loss of $28,934,000, non-cash losses (net) on settlement of debt of $4,886,000, and impairment of $9,961,000. This was partially offset by gains on changes in fair value of the derivative liability of $3,369,000, non-cash expenses related to stock-based compensation of $2,308,000, financing costs of 3,289,000, and a $4,349,000 change in operating assets and liabilities

For the year ended December 31, 2023, $3,646,000 of net cash used in operating activities was due primarily from our net loss $18,767,000 and non-cash gains on settlement of debt of $1,766,000 and change in fair value of derivative liability of $735,000. This was partially offset by non-cash expenses related to stock-based compensation of $9,277,000, financing costs of $1,928,000, $1,395,000 loss from conversion of preferred stock into pre-funded warrants, and approximately $2,854,000 change in operating assets and liabilities.

Investing Activities

Cash flow used in investing activities - For the year ended December 31, 2024, net cash used in investing activities was $54,000, primarily due to the purchase of property. For the year ended December 31, 2023, net cash used in investing activities was $175,000 related primarily to purchases of property.

Financing Activities

Cash flow from financing activities - For the year ended December 31, 2024, net cash provided by financing activities was $2,205,000, primarily due to proceeds from the sale of common stock and from issuance of convertible notes, partially offset by payments on debt obligations. For the year ended December 31, 2023, net cash provided by financing activities was $4,016,000, primarily due to proceeds from the sale of common stock and from issuance of convertible notes, partially offset by payments on debt obligations.

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Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Notes to the Consolidated Financial Statements describe the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies, derivates and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements.

Loss Contingencies

The Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates current information available to us to determine whether such accruals should be adjusted.

Income Taxes

The Company recognizes deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return benefits or consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled.

Recent Accounting Pronouncements

See Note 2 of the consolidated financial statements for discussion of Recent Accounting Pronouncements.

Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting Improvements to Reportable Segment Disclosures. The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis. Adoption did not have a material impact on the Company's disclosures.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-09 ("ASU 2023-09"), Income Taxes, which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Adoption did not have any impact on the Company's disclosures.