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 endedMarch 31, 20232024
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)
Nevada20-0019425
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
321 South 1250 West, Suite 1
Lindon, Utah84042
(Address of principal executive offices)(Zip Code)

(801) 796-5127
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common, $0.001 Par ValuePFIENASDAQ

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 classTrading Symbol(s)Name of each exchange on which registered
Common, $0.001 Par ValuePFIENASDAQ




As of May 8, 2023,7, 2024, the registrant had 52,390,01753,344,595 shares of common stock issued and 47,351,88747,101,232 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
Condensed Consolidated Statements of OperationsIncome and Comprehensive Income (Loss) (Unaudited)
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited)
Notes to the Condensed Consolidated Financial Statements (Unaudited)
Item 2.  Management's Discussion and Analysis of Financial Condition And Results of Operations
Item 3.  Quantitative and Qualitative Disclosure about Market Risk
Item 4.  Controls and Procedures
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A.  Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6.  Exhibits
Signatures




PART I. FINANCIAL INFORMATION
Item 1 Financial Information
PROFIRE ENERGY, INC. AND SUBSIDIARIESPROFIRE ENERGY, INC. AND SUBSIDIARIESPROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Balance SheetsCondensed Consolidated Balance SheetsCondensed Consolidated Balance Sheets
As of
March 31, 2023December 31, 2022
As ofAs of
March 31, 2024March 31, 2024December 31, 2023
ASSETSASSETS(Unaudited)
CURRENT ASSETSCURRENT ASSETS
CURRENT ASSETS
CURRENT ASSETS
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$7,219,356 $7,384,578 
Short-term investmentsShort-term investments2,071,834 1,154,284 
Accounts receivable, net
Accounts receivable, net
Accounts receivable, netAccounts receivable, net12,308,290 10,886,145 
Inventories, net (note 3)Inventories, net (note 3)10,589,023 10,293,980 
Prepaid expenses and other current assets (note 4)Prepaid expenses and other current assets (note 4)2,650,823 2,314,639 
Total Current AssetsTotal Current Assets34,839,326 32,033,626 
Total Current Assets
Total Current Assets
LONG-TERM ASSETSLONG-TERM ASSETS
Net deferred tax asset
Net deferred tax asset
Net deferred tax asset
Long-term investmentsLong-term investments7,052,725 7,503,419 
Financing right-of-use asset106,760 120,239 
Lease right-of-use asset (note 6)
Lease right-of-use asset (note 6)
Lease right-of-use asset (note 6)
Property and equipment, netProperty and equipment, net10,330,685 10,423,964 
Intangible assets, netIntangible assets, net1,225,154 1,268,907 
GoodwillGoodwill2,579,381 2,579,381 
Total Long-Term AssetsTotal Long-Term Assets21,294,705 21,895,910 
TOTAL ASSETSTOTAL ASSETS$56,134,031 $53,929,536 
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT LIABILITIES
CURRENT LIABILITIESCURRENT LIABILITIES
Accounts payableAccounts payable$1,962,882 $2,955,506 
Accounts payable
Accounts payable
Accrued liabilities (note 5)Accrued liabilities (note 5)2,922,928 3,573,994 
Current financing lease liability (note 6)51,821 53,646 
Current lease liability (note 6)
Income taxes payableIncome taxes payable834,542 205,169 
Total Current LiabilitiesTotal Current Liabilities5,772,173 6,788,315 
LONG-TERM LIABILITIESLONG-TERM LIABILITIES
Net deferred income tax liabilityNet deferred income tax liability701,406 488,858 
Long-term financing lease liability (note 6)56,522 67,883 
Net deferred income tax liability
Net deferred income tax liability
Long-term lease liability (note 6)
TOTAL LIABILITIESTOTAL LIABILITIES6,530,101 7,345,056 
STOCKHOLDERS' EQUITY (note 7)STOCKHOLDERS' EQUITY (note 7)
STOCKHOLDERS' EQUITY (note 7)
STOCKHOLDERS' EQUITY (note 7)
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstandingPreferred 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: 52,390,017 issued and 47,351,887 outstanding at March 31, 2023, and 52,143,901 issued and 47,105,771 outstanding at December 31, 202252,391 52,144 
Preferred stock: $0.001 par value, 10,000,000 shares authorized: no shares issued or outstanding
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: 53,337,589 issued and 47,094,226 outstanding at March 31, 2024, and 53,047,231 issued and 46,803,868 outstanding at December 31, 2023
Treasury stock, at costTreasury stock, at cost(7,336,323)(7,336,323)
Additional paid-in capitalAdditional paid-in capital32,096,662 31,737,843 
Accumulated other comprehensive lossAccumulated other comprehensive loss(3,224,110)(3,294,873)
Retained earningsRetained earnings28,015,310 25,425,689 
TOTAL STOCKHOLDERS' EQUITYTOTAL STOCKHOLDERS' EQUITY49,603,930 46,584,480 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$56,134,031 $53,929,536 

The accompanying notes are an integral part of these condensed consolidated financial statements.
3


PROFIRE ENERGY, INC. AND SUBSIDIARIES     
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)     
For the Three Months Ended March 31,
20242023
(See Note 1)
REVENUES (note 8)
Sales of products, net$12,691,804 $13,759,679 
Sales of services, net949,336 924,949 
Total Revenues13,641,140 14,684,628 
COST OF SALES
Cost of sales - products6,095,004 6,105,506 
Cost of sales - services789,364 746,014 
Total Cost of Sales6,884,368 6,851,520 
GROSS PROFIT6,756,772 7,833,108 
OPERATING EXPENSES
General and administrative4,604,766 4,110,032 
Research and development265,058 274,389 
Depreciation and amortization149,859 142,887 
Total Operating Expenses5,019,683 4,527,308 
INCOME FROM OPERATIONS1,737,089 3,305,800 
OTHER INCOME (EXPENSE)
Gain on sale of assets44,821 53,075 
Other expense(23,339)(9,553)
Interest income71,897 58,047 
Interest expense(2,945)(933)
Total Other Income90,434 100,636 
INCOME BEFORE INCOME TAXES1,827,523 3,406,436 
INCOME TAX EXPENSE(393,148)(816,815)
NET INCOME$1,434,375 $2,589,621 
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation loss$(244,801)$(5,524)
Unrealized gains on investments11,066 76,287 
Total Other Comprehensive Income (Loss)(233,735)70,763 
COMPREHENSIVE INCOME$1,200,640 $2,660,384 
BASIC EARNINGS PER SHARE$0.03 $0.05 
FULLY DILUTED EARNINGS PER SHARE$0.03 $0.05 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING46,884,875 47,174,518 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,482,704 48,612,833 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4


PROFIRE ENERGY, INC. AND SUBSIDIARIES     
Condensed Consolidated Statements of Income and Comprehensive Income (Loss)
(Unaudited)     
For the Three Months Ended March 31,
20232022
(See Note 1)
REVENUES (note 8)
Sales of products, net$13,628,512 $8,878,423 
Sales of services, net924,949 624,717 
Total Revenues14,553,461 9,503,140 
COST OF SALES
Cost of sales - product5,974,339 4,382,700 
Cost of sales - services746,014 563,736 
Total Cost of Sales6,720,353 4,946,436 
GROSS PROFIT7,833,108 4,556,704 
OPERATING EXPENSES
General and administrative4,047,969 3,392,379 
Research and development336,452 308,316 
Depreciation and amortization142,887 167,015 
Total Operating Expenses4,527,308 3,867,710 
INCOME FROM OPERATIONS3,305,800 688,994 
OTHER INCOME (EXPENSE)
Gain on sale of assets53,075 95,842 
Other expense(9,553)(18,081)
Interest income58,047 21,545 
Interest expense(933)(697)
Total Other Income100,636 98,609 
INCOME BEFORE INCOME TAXES3,406,436 787,603 
INCOME TAX EXPENSE(816,815)(160,442)
NET INCOME$2,589,621 $627,161 
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss)$(5,524)$158,359 
Unrealized gains (losses) on investments76,287 (287,126)
Total Other Comprehensive Income (Loss)70,763 (128,767)
COMPREHENSIVE INCOME$2,660,384 $498,394 
BASIC EARNINGS PER SHARE$0.05 $0.01 
FULLY DILUTED EARNINGS PER SHARE$0.05 $0.01 
BASIC WEIGHTED AVG NUMBER OF SHARES OUTSTANDING47,174,518 47,481,439 
FULLY DILUTED WEIGHTED AVG NUMBER OF SHARES OUTSTANDING48,612,833 48,536,418 
PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Treasury StockRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202346,803,868 $53,048 $32,751,749 $(2,844,702)$(9,324,272)$36,202,403 $56,838,226 
Stock based compensation— — 197,443— — — 197,443
Stock issued in exercise of stock options3,869 846 — — — 850 
Stock issued in settlement of RSUs and accrued bonuses286,489 288 324,127 — — — 324,415 
Tax withholdings paid related to stock based compensation— — (308,090)— — — (308,090)
Foreign currency translation— — — (244,801)— — (244,801)
Unrealized gains on investments— — — 11,066 — — 11,066 
Net income— — — — — 1,434,375 1,434,375 
Balance, March 31, 202447,094,226 $53,340 $32,966,075 $(3,078,437)$(9,324,272)$37,636,778 $58,253,484 

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Treasury StockRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202247,105,771 $52,144 $31,737,843 $(3,294,873)$(7,336,323)$25,425,689 $46,584,480 
Stock based compensation— — 223,047— — — 223,047
Stock issued in settlement of RSUs and accrued bonuses246,116 247 378,279 — — — 378,526 
Tax withholdings paid related to stock based compensation— — (242,506)— — — (242,506)
Foreign currency translation— — — (5,524)— — (5,524)
Unrealized gains on investments— — — 76,287 — — 76,287 
Net income— — — — — 2,589,621 2,589,621 
Balance, March 31, 202347,351,887 $52,391 $32,096,662 $(3,224,110)$(7,336,323)$28,015,310 $49,603,930 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Treasury StockRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202247,105,771 $52,144 $31,737,843 $(3,294,873)$(7,336,323)$25,425,689 $46,584,480 
Stock based compensation— — 223,047— — — 223,047
Stock issued in settlement of RSUs and accrued bonuses246,116 247 378,279 — — — 378,526 
Tax withholdings paid related to stock based compensation— — (242,506)— — — (242,506)
Foreign currency translation— — — (5,524)— — (5,524)
Unrealized gains on investments— — — 76,287 — — 76,287 
Net income— — — — — 2,589,621 2,589,621 
Balance, March 31, 202347,351,887 $52,391 $32,096,662 $(3,224,110)$(7,336,323)$28,015,310 $49,603,930 

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Treasury StockRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202147,643,233 $51,720 $30,819,394 $(2,100,467)$(6,107,593)$21,477,929 $44,140,983 
Stock based compensation— — 138,503— — — 138,503
Stock issued in settlement of RSUs and accrued bonuses139,894 140 212,647 — — — 212,787 
Tax withholdings paid related to stock based compensation— — (91,098)— — — (91,098)
Treasury stock repurchased(509,631)— — — (622,263)— (622,263)
Foreign currency translation— — — 158,359 — — 158,359 
Unrealized losses on investments— — — (287,126)— — (287,126)
Net income— — — — — 627,161 627,161 
Balance, March 31, 202247,273,496 $51,860 $31,079,446 $(2,229,234)$(6,729,856)$22,105,090 $44,277,306 
PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended March 31,
20242023
OPERATING ACTIVITIES
Net income$1,434,375 $2,589,621 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense267,654 262,039 
Gain on sale of property and equipment(44,821)(53,075)
Bad debt expense61,684 41,792 
Stock awards issued for services197,443 223,047 
Changes in operating assets and liabilities:
Accounts receivable(23,969)(1,108,889)
Income taxes receivable/payable(804,057)629,371 
Inventories(1,741,768)(292,119)
Prepaid expenses and other current assets(564,253)(335,832)
Deferred tax asset/liability(7,112)212,548 
Accounts payable and accrued liabilities(1,467,314)(1,646,723)
Net Cash Provided by (Used in) Operating Activities(2,692,138)521,780 
INVESTING ACTIVITIES
Proceeds from sale of property and equipment46,097 97,886 
Sale (purchase) of investments199,357 (390,548)
Purchase of property and equipment(776,721)(153,755)
Net Cash Used in Investing Activities(531,267)(446,417)
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability(307,933)(242,506)
Principal paid toward lease liability(10,875)(6,947)
Net Cash Used in Financing Activities(318,808)(249,453)
Effect of exchange rate changes on cash(28,882)8,868 
NET DECREASE IN CASH(3,571,095)(165,222)
CASH AT BEGINNING OF PERIOD10,767,519 7,384,578 
CASH AT END OF PERIOD$7,196,424 $7,219,356 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest$2,945 $933 
Income taxes$1,056,844 $— 
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued in settlement of accrued bonuses$324,415 $378,526 
Common stock issued for stock options$850 $— 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6


PROFIRE ENERGY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended March 31,
20232022
OPERATING ACTIVITIES
Net income$2,589,621 $627,161 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense262,039 281,119 
Gain on sale of property and equipment(53,075)(95,842)
Bad debt expense41,792 28,453 
Stock awards issued for services223,047 138,503 
Changes in operating assets and liabilities:
Accounts receivable(1,108,889)(1,663,295)
Income taxes receivable/payable629,371 439,034 
Inventories(292,119)(530,568)
Prepaid expenses and other current assets(335,832)49,283 
Deferred tax asset/liability212,548 47,030 
Accounts payable and accrued liabilities(1,646,723)(513,227)
Net Cash Provided by (Used in) Operating Activities521,780 (1,192,349)
INVESTING ACTIVITIES
Proceeds from sale of property and equipment97,886 112,982 
Sale (purchase) of investments(390,548)679,636 
Purchase of property and equipment(153,755)(207,848)
Net Cash Provided by (Used in) Investing Activities(446,417)584,770 
FINANCING ACTIVITIES
Value of equity awards surrendered by employees for tax liability(242,506)(91,098)
Cash received in exercise of stock options— — 
Purchase of treasury stock— (622,263)
Principal paid towards lease liability(6,947)(12,629)
Net Cash Used in Financing Activities(249,453)(725,990)
Effect of exchange rate changes on cash8,868 24,766 
NET DECREASE IN CASH(165,222)(1,308,803)
CASH AT BEGINNING OF PERIOD7,384,578 8,188,270 
CASH AT END OF PERIOD$7,219,356 $6,879,467 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest$933 $697 
Income taxes$— $— 
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued in settlement of accrued bonuses$378,526 $212,787 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements (Unaudited)
For the Three Months Ended March 31, 20232024 and 20222023


NOTE 1 - CONDENSED FINANCIAL STATEMENTS

Except where the context otherwise requires, all references herein to the "Company," "Profire," "we," "us," "our," or similar words and phrases are to Profire Energy, Inc. and its wholly owned subsidiaries, taken together.

The accompanying condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments have been made (which include only normal recurring adjustments) which are necessary to present fairly the financial position, results of operations, stockholders' equity, and cash flows at March 31, 20232024 and for all periods presented herein.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements contained in its annual report on Form 10-K for the year ended December 31, 20222023 ("Form 10-K").  The results of operations for the three-month periods ended March 31, 20232024 and 20222023 are not necessarily indicative of the operating results for the full years. Certain amounts in the accompanying March 31, 20222023 condensed consolidated statement of income and comprehensive income (loss) and footnotes have been reclassified to conform to the March 31, 20232024 presentation.

NOTE 2 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Line of Business

This Organization and Summary of Significant Accounting Policies of the Company is presented to assist in understanding the Company's condensed consolidated financial statements. The Company's accounting policies conform to "US GAAP."

The Company provides burner-management products, solutions and services primarily for the oil and gas industry within the US and Canadian markets. The Company has made progress in expansion efforts outside of these markets into other industries with combustion and burner management requirements as well as into other international locations.

Significant Accounting Policies

There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the notes to the consolidated financial statements in the Company's most recent Form 10-K.

Recent Accounting Pronouncements

Accounting Standards Update No. 2023-07 —Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures The update is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments require disclosure of significant segment expenses regularly provided to the chief operating decision maker (CODM) as well as other segment items, extend certain annual disclosures to interim periods, clarify the applicability to single reportable segment entities, permit more than one measure of profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM. The new disclosures have been adopted in this report. See NOTE 10 – SEGMENT INFORMATION.

Accounting Standards Update No. 2023-09 —Income Taxes (Topic 740): Improvements to Income Tax Disclosures The update requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company’s annual reporting periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis, with a retrospective option. We are currently evaluating the effect that adoption of ASU 2023-09 will have on our disclosures.

The Company has evaluated all other recent accounting pronouncements and determined that the adoption of other pronouncements applicable to the Company has not had, ornor is not expected to have, a material impact on the Company's financial position, results of operations, or cash flows.

NOTE 3 – INVENTORIES

Inventories consisted of the following at each balance sheet date:
As of
March 31, 2023December 31, 2022
Raw materials$152,080 $166,927 
Finished goods10,773,616 10,452,930 
Subtotal10,925,696 10,619,857 
Reserve for obsolescence(336,673)(325,877)
Total$10,589,023 $10,293,980 

87

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 20232024 and 20222023
NOTE 3 – INVENTORIES

Inventories consisted of the following at each balance sheet date:
As of
March 31, 2024December 31, 2023
Raw materials$398,568 $338,539 
Finished goods15,802,905 14,171,616 
Subtotal16,201,473 14,510,155 
Reserve for obsolescence(453,656)(450,499)
Total$15,747,817 $14,059,656 

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following at each balance sheet date:
As of As of
March 31, 2023December 31, 2022 March 31, 2024December 31, 2023
Prepaid inventoryPrepaid inventory$1,273,029 $784,420 
Prepaid inventory
Prepaid inventory
Accrued receivablesAccrued receivables866,677 881,176 
Prepaid insurancePrepaid insurance164,951 240,785 
Interest receivablesInterest receivables59,163 72,761 
Tax credits98,586 118,035 
OtherOther188,417 217,462 
TotalTotal$2,650,823 $2,314,639 


NOTE 5 – ACCRUED LIABILITIES

Accrued liabilities consisted of the following at each balance sheet date:
As of
March 31, 2023December 31, 2022
Employee-related payablesEmployee-related payables$1,416,556 $2,404,848 
Employee-related payables
Employee-related payables
Deferred revenue
Deferred revenue
Deferred revenueDeferred revenue466,048 420,827 
Inventory-related payablesInventory-related payables644,629 285,109 
Inventory-related payables
Inventory-related payables
Tax-related payables
Tax-related payables
Tax-related payablesTax-related payables106,002 54,762 
Warranty liabilitiesWarranty liabilities90,248 74,103 
Warranty liabilities
Warranty liabilities
Other
Other
OtherOther199,445 334,345 
TotalTotal$2,922,928 $3,573,994 
Total
Total


8

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023
NOTE 6 – LEASES
As of
Components of lease right-of-use assets and liabilitiesMarch 31, 2024December 31, 2023
Financing lease right-of-use assets$93,843 $106,402 
Operating lease right-of-use assets301,424326,505
Total Lease right-of-use assets$395,267 $432,907 
Financing current lease liability$43,775 $47,492 
Operating current lease liability77,61182,692
Total Current lease liability$121,386 $130,184 
Financing long-term lease liability$55,273 $63,393 
Operating long-term lease liability225,098244,135
Total Long-term lease liability$280,371 $307,528 

We have leases for office equipment and office space. The leases for office equipment are classified as financing leases, and the typical term is between 36 and 60 months. We have the option to extend most office equipment leases, but we do not intend to do so. Accordingly, no extensions have been recognized in the right-of-use asset or lease liability. The office equipment lease payments are not variable, and the lease agreements do not include any non-lease components, residual value guarantees, or restrictions. There are no interest rates implicit in the office equipment lease agreements, so we have used our incremental borrowing rate to determine the discount rate to be applied to our financing leases for the purpose of determining our lease liabilities. The weighted average discount rate applied to our financing leases is 4.50% and the weighted average remaining lease term is 3.32.4 years.

The following table shows the components of financing lease cost:
For the Three Months Ended March 31,
For the Three Months Ended March 31,
For the Three Months Ended March 31,
For the Three Months Ended March 31,
Financing Lease Cost
Financing Lease Cost
Financing Lease CostFinancing Lease Cost20232022
Amortization of right-of-use assetsAmortization of right-of-use assets$7,240 $12,418 
Amortization of right-of-use assets
Amortization of right-of-use assets
Interest on lease liabilities
Interest on lease liabilities
Interest on lease liabilitiesInterest on lease liabilities933 696 
Total financing lease costTotal financing lease cost$8,173 $13,114 
Total financing lease cost
Total financing lease cost


9

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2023 and 2022
The Company leasesWe lease two warehouse spaces, one warehouse space with a two-year lease, and another with a four-year lease, both of which isare recorded as an operating lease. We considerleases. The weighted average discount rate applied to our financing leases is 4.5% and the weighted average remaining lease term is 3.7 years. The remainder of our office space leases are considered to be short-term, and we have elected not to recognize those on our balance sheet under the short-term recognition exemption. Operating lease expense recognized during the three-months ended March 31, 20232024 and March 31, 20222023 was $38,665 and $18,852, respectively.
9

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and $20,652, respectively.2023

Supplemental operating lease information as of March 31, 2023 is as follows:

Operating right of use assets$30,063 
Current operating lease liabilities25,671 
Long-term operating lease liabilities4,392 
Weighted-average remaining lease term in years1.3
Weighted-average discount rate4.5 %

As of March 31, 2023,2024, maturities of lease liabilities are as follows:
Years ending December 31,Years ending December 31,AmountYears ending December 31,Amount
2023$43,439 
2024202440,886 
2025202511,927 
2026202611,927 
202720276,958 
2028
ThereafterThereafter— 
Total future minimum lease paymentsTotal future minimum lease payments$115,137 
Less: Amount representing interestLess: Amount representing interest6,794 
Present value of future paymentsPresent value of future payments$108,343 
Current portionCurrent portion$51,821 
Long-term portionLong-term portion$56,522 




NOTE 7 – STOCKHOLDERS' EQUITY

As of both March 31, 20232024 and December 31, 2022,2023, the Company held 5,038,1306,243,363 shares of its common stock in treasury at a total cost of $7,336,323, respectively.$9,324,272.

On May 9, 2023, the Company announced that its Board of Directors (the "Board") had authorized a share repurchase program allowing the Company to repurchase up to $2,000,000 worth of the Company’s common stock from time to time through April 30, 2024. Purchases under the program were made at the discretion of management pursuant to a Rule 10b5-1 plan. The size and timing of any purchases were dependent on price, market and business conditions and other factors. As of December 2023, the Company had spent the full allotment under the program.

As of March 31, 2023,2024, the Company had 568,985742,855 restricted stock units ("RSUs"), 640,364752,338 performance-based RSUs, and 759,900204,000 stock options outstanding with $651,626$1,289,440 in remaining compensation expense to be recognized over the next 1.51.9 years. See further details below about certain subsets of these outstanding equity-based awards.

2022On June 29, 2023, pursuant to the annual renewal of director compensation, the Board approved a grant of 195,966 RSUs to the Company's independent directors. Half of the RSUs vested immediately on the date of grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date or at the Company's next annual meeting of stockholders, whichever is earlier. The awards will result in total compensation expense of approximately $243,000 to be recognized over the vesting period.

2023 EIP and LTIP

On April 6, 2022,25, 2023, the Compensation Committee of the Board (the "Compensation Committee") approved the 20222023 Executive Incentive Plan (the “2022“2023 EIP”) for Ryan W. Oviatt, the Company's Co-CEO, Co-President, and CFO, Cameron M. Tidball, the Company's Co-CEO and Co-President, and Patrick D. Fisher, the Company's Vice President of Product Development. The 20222023 EIP provided for the potential award of incentive compensation to the participants based on the Company’s financial performance in fiscal 2022.2023. The incentive compensation was payable in cash and stock, and the stock portion of the incentive compensation is intended to constituteconstituted an award under the Company's 2014Company’s 2023 Equity Incentive Plan as amended (the "Plan"“2023 Plan”).

Participants were eligible to receive incentive compensation based upon reaching or exceeding performance goals established by the Compensation Committee for fiscal 2023. The performance goals in the 2023 EIP were based on the Company’s total revenue, EBITDA, and two non-financial factors including revenue source diversification and safety and environmental
10

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 20232024 and 20222023
Participants were eligible to receive incentive compensation based upon reaching or exceeding performance goals established byperformance. Each of the Compensation Committee for fiscal 2022. The performance goals in the 2022 EIP were based on the Company’s total revenue, EBITDA, and a non-financial milestone relating to revenue source diversification. Each of thesediversification performance goals werewill be weighted one third30% while the safety and environment goal will be weighted 10% in calculating incentive compensation amounts.

On March 6, 2023,2024, the Compensation Committee approved the incentive compensation amounts based on achieving certain targets pursuant to the 20222023 EIP. The incentive compensation amounts earned under the 20222023 EIP were paid 50% in cash and 50% in shares of restricted stock under the 2023 Plan. The incentive compensation amounts resultedIn satisfaction of the 50% of the 2023 EIP plan that was payable in stock, the Compensation Committee approvingapproved a one-time bonus for Company executives that was settled by issuing a total of 341,961225,698 shares of common stock, or 192,964121,624 shares net of tax withholding. These shares were fully vested as of March 6, 2023.2024.

In addition to the 20222023 EIP, the Board also approved as a long-term incentive plan the grants of RSU awards to Messrs. Oviatt, Tidball, and Fisher pursuant to the 2023 Plan (the “2023 LTIP”). The 2023 LTIP consists of total awards of up to 287,076 RSUs (“Units”) to Mr. Oviatt, up to 287,076 Units to Mr. Tidball, and up to 50,868 Units to Mr. Fisher, pursuant to two separate restricted stock unit award agreements (collectively, the “2023 LTIP Restricted Stock Unit Award Agreements”) to be entered between the Company and each participant. One such agreement covers 33% of each award recipient’s Units that are subject to time-based vesting, and the other such agreement covers the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period of the 2023 LTIP began on January 1, 2023 and terminates on December 31, 2025 (the “2023 LTIP Performance Vesting Date”).

The Units subject to time-based vesting, including 95,692 Units to Mr. Oviatt, 95,692 Units for Mr. Tidball, and 16,956 Units to Mr. Fisher, will vest in three equal and annual installments beginning December 31, 2023 and ending on December 31, 2025 if the award recipients’ employment continues with the Company through such dates.

The performance-vesting Units, including up to 191,384 Units for Mr. Oviatt, 191,384 Units for Mr. Tidball, and 33,912 Units to Mr. Fisher, may vest over a three-year performance period beginning January 1, 2023 (the “2023 LTIP Performance Period”) based upon the following Company performance metrics:

Performance MetricsWeightTargetAbove TargetOutstanding
Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the 2023 LTIP Performance Period relative to its closing price as of the last trading day in 2022)1/394.2%142.7%191.3%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the 2023 LTIP Performance Period)1/3Third QuartileSecond QuartileFirst Quartile
EBITDA as a Percentage of Total Revenue1/315%17.5%20%

One-third of such performance-vesting Units, consisting of 63,794 Units for Mr. Oviatt, 63,794 Units for Mr. Tidball, and 11,304 Units for Mr. Fisher, may vest for each of the three performance metrics identified in the table above. The number of Units that will vest for each performance metric on the 2023 LTIP Performance Vesting Date shall be determined as follows:
a.if the “Target” level for such performance metric is not achieved, none of the Units relating to such performance metric will vest;
b.if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the Units relating to such performance metric will vest;
c.if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the Units relating to such performance metric will vest; and
d.if the “Outstanding” level for such performance metric is achieved, 100% of the Units relating to such performance metric will vest.

The foregoing summary of the 2023 EIP and the 2023 LTIP Restricted Stock Unit Award Agreements relating to the 2023 LTIP is qualified in its entirety by the text of the 2023 EIP and each of the 2023 LTIP Restricted Stock Unit Award Agreements, which were filed as exhibits to the Quarterly Report on Form 10-Q for the quarter ending March 31, 2023.

2022 LTIP

11

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023
On April 6, 2022, the Compenstion Committee approved as a long-term incentive plan the grants of restricted stock unit awards to Messrs. Oviatt, Tidball, and Fisher (the "2022 LTIP") pursuant to the Company's 2014 Equity Incentive Plan, as amended (the “2022 LTIP”“2014 Plan”). The 2022 LTIP consists of total awards of up to 230,232 RSUs to Mr. Oviatt, up to 230,232 RSUs to Mr. Tidball, and up to 43,023 RSUs to Mr. Fisher, pursuant to two separate restricted stock unit award agreements (collectively, the “2022 LTIP Restricted Stock Unit Award Agreements”) entered into between the Company and each participant. One such agreement covers the 33% of each award recipient’s RSUs that are subject to time-based vesting, and the other such agreement covers the remaining 67% of such award recipient’s RSUs that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested unit. The vesting period of the 2022 LTIP began on January 1, 2022 and terminates on December 31, 2024 (the “2022 LTIP Performance Vesting Date”).

The RSUs subject to time-based vesting, including 76,744 RSUs to Mr. Oviatt, 76,744 RSUs for Mr. Tidball, and 14,341 RSUs to Mr. Fisher, will vest in three equal and annual installments beginning December 31, 2022 and ending on December 31, 2024 if the award recipients’ employment continues with the Company through such dates.

The performance-vesting RSUs, including up to 153,488 RSUs for Mr. Oviatt, 153,488 RSUs for Mr. Tidball, and 28,682 RSUs to Mr. Fisher, may vest at the end of the three-year performance period beginning January 1, 2022 (the "2022 LTIP Performance Period") based upon the following Company performance metrics:


Performance MetricPerformance MetricWeightTargetAbove TargetOutstandingPerformance MetricWeightTargetAbove TargetOutstanding
Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the Performance Period relative to its closing price as of the last trading day in 2021)1/389%136%183%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the Performance Period)1/3Third QuartileSecond QuartileFirst Quartile
Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the 2022 LTIP Performance Period relative to its closing price as of the last trading day in 2021)Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the 2022 LTIP Performance Period relative to its closing price as of the last trading day in 2021)1/389%136%183%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the 2022 LTIP Performance Period)Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the 2022 LTIP Performance Period)1/3Third QuartileSecond QuartileFirst Quartile
EBITDA as a Percentage of Total RevenueEBITDA as a Percentage of Total Revenue1/310%15%20%EBITDA as a Percentage of Total Revenue1/310%15%20%

One-third of such performance-vesting RSUs, consisting of 51,163 RSUs for Mr. Oviatt, 51,163 RSUs for Mr. Tidball, and 9,561 RSUs for Mr. Fisher, may vest for each of the three performance metrics identified in the table above. The number of RSUs that will vest for each performance metric on the 2022 LTIP Performance Vesting Date shall be determined as follows:
a.if the “Target” level for such performance metric is not achieved, none of the RSUs relating to such performance metric will vest;
b.if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the RSUs relating to such performance metric will vest;
c.if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the RSUs relating to such performance metric will vest; and
d.if the “Outstanding” level for such performance metric is achieved, 100% of the RSUs relating to such performance metric will vest.

The foregoing summary of the 2022 EIP and the 2022 LTIP Restricted Stock Unit Award Agreements is qualified in its entirety by the text of the 2022 EIP and each of the 2022 LTIP Restricted Stock Unit Award Agreements, which arewere filed as exhibits to the Company's Form 10-Q for the quarter ending March 31, 2022.



11

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2023 and 2022
2022 RSUs

On June 15, 2022, pursuant to the annual renewal of director compensation, the Board approved a grant of 178,623 RSUs to the Company's independent directors. Half of the RSUs vested immediately on the date of grant and the remaining 50% of the RSUs will vest on the first anniversary of the grant date or at the Company's next annual meeting of stockholders, whichever is earlier. The awards will result in total compensation expense of approximately $234,000 to be recognized over the vesting period.

2021 LTIP

On May 28, 2021, the Board approved as a long-term incentive plan, the grants of restricted stock unit awards to Messrs. Oviatt, Tidball, Fugal, and Fisher pursuant to the 2014 Plan (the “2021 LTIP”). The 2021 LTIP consists of total awards of up to 204,543 RSUs to Mr. Oviatt, up to 204,543 RSUs to Mr. Tidball, up to 85,908 RSUs to Mr. Fugal, and up to 47,973 RSUs to Mr. Fisher, pursuant to two separate restricted stock unit award agreements (collectively, the “2021 LTIP Restricted Stock Unit Award Agreements”) between the Company and each participant. One agreement covers the 33% of each award recipient’s RSUs that are subject to time-based vesting, and the other agreement covers the remaining 67% of such award recipient’s RSUs that may vest based on performance metrics. Upon vesting, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested RSU. The vesting period of the 2021 LTIP began on January 1, 2021 and terminatesterminated on December 31, 2023 (the “2021 LTIP Performance Vesting Date”).
12

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023

The RSUs subject to time-based vesting, including 68,181 RSUs to Mr. Oviatt, 68,181 RSUs for Mr. Tidball, 28,636 RSUs to Mr. Fugal, and 15,991 RSUs to Mr. Fisher, vestvested in three equal annual installments that began on December 31, 2021 and will endended on December 31, 2023 if the award recipients’ employment continues with the Company through such dates.2023.

The performance-vesting RSUs, including up to 136,362 RSUs for Mr. Oviatt, 136,362 RSUs for Mr. Tidball, 57,272 RSUs for Mr. Fugal, and 31,982 RSUs to Mr. Fisher, arewere eligible to vest over a three-year performance period beginning January 1, 2021 based upon the following Company performance metrics:

Performance MetricWeightTargetAbove TargetOutstanding
Total Shareholder Return
1/3135%194%253%
Relative Total Shareholder Return1/3Third QuartileSecond QuartileFirst Quartile
EBITDA as a Percentage of Total Revenue1/310%15%20%

One-third of such performance-vesting RSUs, consisting of 45,454 RSUs for Mr. Oviatt, 45,454 RSUs for Mr. Tidball, 19,091 RSUs for Mr. Jay Fugal, the Company's former Vice President of Operations, and 10,661 RSUs for Mr. Fisher, arewere eligible to vest for each of the three performance metrics identified in the table above. The number of RSUs that will vestvested for each performance metric on the 2021 LTIP Performance Vesting Date shall bewas determined as follows:
if the “Target” level for such performance metric is not achieved, none of the RSUs relating to such performance metric will vest;
if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the RSUs relating to such performance metric will vest;
if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the RSUs relating to such performance metric will vest; and
if the “Outstanding” level for such performance metric is achieved, 100% of the RSUs relating to such performance metric will vest.

Mr. Fugal resigned effective October 31, 2021 from his position as Vice President of Operations to pursue an opportunity as CEO of another company. Accordingly, Mr. Fugal willdid not receive incentive compensation under the 2021 LTIP, and his unvested RSUs have been forfeited.

On March 6, 2024, the Compensation Committee approved the incentive compensation amounts based on achieving certain targets pursuant to the 2021 LTIP. The performance vesting RSUs were settled by issuing a total of 152,354 shares of common stock, or 80,059 shares net of tax withholding.

The foregoing summary of the 2021 LTIP is qualified in its entirety by the text of each of the 2021 LTIP Restricted Stock Unit Award Agreements, which the Company filed as exhibits to its quarterly report on Form 10-Q for the quarter ended June 30, 2021.




12

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2023 and 2022
NOTE 8 – REVENUE

Performance Obligations

Our performance obligations include providing product and servicing our product as well as other combustion related equipment. We recognize product revenue performance obligations in most cases when the product is delivered to the customer. Occasionally, if we are shipping the product on a customer’s account, we recognize revenue when the product has been shipped. At that point in time, the control of the product is transferred to the customer. When we perform service work, we apply the practical expedient that allows us to recognize service revenue when we have the right to invoice the customer for the work completed. We do not engage in transactions acting as an agent. The time needed to complete our performance obligations varies based on the size of the project; however, we typically satisfy our performance obligations within a few months of entering into the applicable sales contract or service contract.

Our customers have the right to return certain unused and unopened products within 90 days for a restocking fee. We provide a warranty on some of our products ranging from 90 days to 2 years, depending on the product. See Note 5 for the amount accrued for expected returns and warranty claims as of March 31, 2023.2024.
13

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023

Contract Balances

We have elected to use the practical expedient in ASC 340-40-25-4 (regarding recognition of the incremental costs of obtaining a contract) for costs related to contracts that are estimated to be completed within one year. All of our current sales contracts and service contracts are expected to be completed within one year, and as a result, we have not recognized a contract asset account. If we had chosen not to use this practical expedient, we would not expect a material difference in the contract balances. Occasionally, we collect milestone payments up front from customers on larger jobs. These payments are classified as deferred revenue until the deliverables have been met and revenue can be properly recognized in our financial statements. Each of the contracts related to these milestone payments is short-term in nature and we expect to recognize associated revenues within one year. As a result, we consider it appropriate to record deferred revenue for these transactions and do not have any other contract liability balances.

Disaggregation of Revenue

We consider all revenue recognized in the income statement to be revenue from contracts with customers. The table below shows revenue by category:
For the Three Months Ended March 31,
20232022
For the Three Months Ended March 31,
For the Three Months Ended March 31,
For the Three Months Ended March 31,
2024
2024
2024
Electronics
Electronics
ElectronicsElectronics$5,980,290 $3,478,112 
ManufacturedManufactured1,210,325 521,128 
Manufactured
Manufactured
Re-Sell
Re-Sell
Re-SellRe-Sell6,437,897 4,879,183 
ServiceService924,949 624,717 
Service
Service
Total RevenueTotal Revenue$14,553,461 $9,503,140 
Total Revenue
Total Revenue

13

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2023 and 2022
NOTE 9 – BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

The following table is a reconciliation of the numerator and denominators used in the earnings per share calculation:
For the Three Months Ended March 31,
20232022
Income (Numerator)Weighted Average Shares (Denominator)Per-Share
Amount
Income (Numerator)Weighted Average Shares (Denominator)Per-Share
Amount
For the Three Months Ended March 31,For the Three Months Ended March 31,
202420242023
Income (Numerator)Income (Numerator)Weighted Average Shares (Denominator)Per-Share
Amount
Income (Numerator)Weighted Average Shares (Denominator)Per-Share
Amount
Basic EPSBasic EPS
Net income available to common stockholders
Net income available to common stockholders
Net income available to common stockholdersNet income available to common stockholders$2,589,621 47,174,518 $0.05 $627,161 47,481,439 $0.01 
Effect of Dilutive SecuritiesEffect of Dilutive Securities
Effect of Dilutive Securities
Effect of Dilutive Securities
Stock options & RSUs
Stock options & RSUs
Stock options & RSUsStock options & RSUs— 1,438,315 — 1,054,979 
Diluted EPSDiluted EPS
Diluted EPS
Diluted EPS
Net income available to common stockholders + assumed conversions
Net income available to common stockholders + assumed conversions
Net income available to common stockholders + assumed conversionsNet income available to common stockholders + assumed conversions$2,589,621 $48,612,833 $0.05 $627,161 $48,536,418 $0.01 





14

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 20232024 and 20222023
NOTE 10 – SEGMENT INFORMATION
We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Our product and services lines are similar in their production processes, customers, and economic characteristics; and we do not manage the business or allocate costs based on individual product or service lines. Revenues are regularly reviewed on a disaggregated basis between our US and Canada subsidiaries; however, individual subsidiary operating performance is not reviewed regularly. Each subsidiary has a different purpose within the consolidated organization as a whole and they are not comparable to one another. As a result, we have concluded that we only have one operating segment, which is the consolidated company as a whole. We record inter-subsidiary revenues and costs for transfer pricing purposes related to income tax planning.

The Company operates in the United States and Canada. Segment information for these geographic areas is as follows:
For the Three Months Ended March 31,
Sales20232022
For the Three Months Ended March 31,
For the Three Months Ended March 31,
For the Three Months Ended March 31,
RevenuesRevenues20242023
Revenue from external customers
Canada
Canada
CanadaCanada$2,136,204 $1,997,251 
United StatesUnited States12,417,257 7,505,889 
Total Consolidated$14,553,461 $9,503,140 
For the Three Months Ended March 31,
Profit (Loss)20232022
Inter-subsidiary revenue
Canada
Canada
CanadaCanada$(490,538)$(352,570)
United StatesUnited States3,080,159 979,731 
Total Consolidated$2,589,621 $627,161 
Inter-subsidiary eliminations
Total Revenue
For the Three Months Ended March 31,
For the Three Months Ended March 31,
For the Three Months Ended March 31,
Income from OperationsIncome from Operations20242023
Canada
United States
Total Income from Operations
Gain on sale of fixed assets
Other expense
Interest income
Interest expense
Income before income taxes
As of
As of
As of
As of
Long-Lived AssetsLong-Lived AssetsMarch 31, 2023December 31, 2022Long-Lived AssetsMarch 31, 2024December 31, 2023
CanadaCanada$5,012,993 $5,067,965 
United StatesUnited States5,424,452 5,476,238 
Total ConsolidatedTotal Consolidated$10,437,445 $10,544,203 
 
NOTE 11 – SUBSEQUENT EVENTS

In accordance with ASC 855 "Subsequent Events," Company management reviewed all material events through the date this report was issued.

On April 25, 2023,9, 2024, the Compensation Committee approved the 20232024 Executive Incentive Plan (the “2023“2024 EIP”) for Messrs. Oviatt, Tidball, and Fisher. The 20232024 EIP provides for the potential award of incentive compensation to the participants based on the Company’s financial performance in fiscal 2023.2024. If earned, the incentive compensation will be payable in cash and stock, and the stock portion of the incentive compensation is intended to constitute an award under the Company’s 2023 Equity Incentive Plan (the “2023 Plan”).Plan. In addition to the 20232024 EIP, the Board also approved as a long-term incentive plan the grants of a restricted stock unit awards to Messrs. Oviatt, Tidball, and Fisher pursuant to the 2023 Plan (the “2023“2024 LTIP”). The 2023 Plan was adopted by the Board of Directors on April 25, 2023, subject to shareholder approval at the annual meeting of stockholders of the Company scheduled for June 14, 2023 (the “Annual Meeting”). The Stock portion of the 2023 EIP and the 2023 LTIP will be forfeited by the executive officers if the Company’s stockholders do not approve the 2023 Plan at the Annual Meeting.

15

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023
2024 EIP

Under the terms of the 20232024 EIP, each participating executive officer has been assigned a target incentive compensation amount for fiscal 2023.2024. The target incentive compensation amount for Mr. Oviatt is equal to 62%65% of his base salary as of December 31, 2023,2024, the target incentive compensation amount for Mr. Tidball is equal to 62%65% of his base salary as of December 31, 2023,2024, and the target incentive compensation for Mr. Fisher is equal to 37%40% of his base salary as of December 31, 2023.2024. Under no circumstance can the participants receive more than two times the assigned target incentive compensation.

Participants will be eligible to receive incentive compensation based upon reaching or exceeding performance goals established by the Compensation Committee for fiscal 2023.2024. The performance goals in the 20232024 EIP are based on the Company’s total revenue, EBITDA, and two non-financial factors including revenue source diversificationstrategic growth initiatives and safety and environmental performance.other. Each of the revenue, EBITDA, and revenue diversificationstrategic growth initiatives performance goals will be weighted 30% while the safety and environmentother goal will be weighted 10% in calculating incentive compensation amounts.

15

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2023 and 2022
The incentive compensation amounts earned under the 20232024 EIP, if any, will be paid 50% in cash and 50% in shares of restricted stock under the 2023 Plan, subject to the 2023 Plan being approved by shareholders as described above.Plan. In no event shall the total award exceed 200% of the target incentive compensation amount for each participant, or exceed any limitations otherwise set forth in the 2023 Plan. The actual incentive compensation amounts, if any, will be determined by the Compensation Committee upon the completion of fiscal 20232024 reporting period and paid by March 15, 2024,2025, subject to all applicable tax withholding.

20232024 LTIP

The 20232024 LTIP consists of total awards of up to 287,076204,651 restricted stock units (“Units”) to Mr. Oviatt, up to 287,076204,651 Units to Mr. Tidball, and up to 50,86836,195 Units to Mr. Fisher, pursuant to two separate restricted stock unit award agreements (collectively, the “Restricted“2024 LTIP Restricted Stock Unit Award Agreements”) to be entered between the Company and each participant. One such agreement will covercovers 33% of each award recipient’s Units that are subject to time-based vesting, and the other such agreement will covercovers the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting, and subject to the 2023 Plan being approved by shareholders as described above, the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period of the 20232024 LTIP began on January 1, 20232024 and terminates on December 31, 20252026 (the “Performance“2024 LTIP Performance Vesting Date”).

The Units subject to time-based vesting, including 95,69268,217 Units to Mr. Oviatt, 95,69268,217 Units for Mr. Tidball, and 16,95612,065 Units to Mr. Fisher, will vest in three equal and annual installments beginning December 31, 2023January 1, 2024 and ending on December 31, 20252026 if the award recipients’ employment continues with the Company through such dates.

The performance-vesting Units, including up to 191,384136,434 Units for Mr. Oviatt, 191,384136,434 Units for Mr. Tidball, and 33,91224,130 Units to Mr. Fisher, may vest over a three-year performance period beginning January 1, 20232024 (the “Performance“2024 LTIP Performance Period”) based upon the following Company performance metrics:

Performance MetricsWeightTargetAbove TargetOutstanding
Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the Performance Period relative to its closing price as of the last trading day in 2022)1/394.2%142.7%191.3%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the Performance Period)1/3Third QuartileSecond QuartileFirst Quartile
EBITDA as a Percentage of Total Revenue1/315%17.5%20%

Performance MetricsWeightTargetAbove TargetOutstanding
Total Shareholder Return (based on the Company’s closing price of its common stock at the end of the 2024 LTIP Performance Period relative to its closing price as of the last trading day in 2023)1/326.0%47.9%77.5%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the 2024 LTIP Performance Period)1/3Third QuartileSecond QuartileFirst Quartile
EBITDA as a Percentage of Total Revenue1/317.5%20.0%22.5%

One-third of such performance-vesting Units, consisting of 63,79445,477 Units for Mr. Oviatt, 63,79445,477 Units for Mr. Tidball, and 11,3048,043 Units for Mr. Fisher, may vest for each of the three performance metrics identified in the table above. The number of Units that will vest for each performance metric on the 2024 LTIP Performance Vesting Date shall be determined as follows:
a.if the “Target” level for such performance metric is not achieved, none of the Units relating to such performance metric will vest;
16

PROFIRE ENERGY, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023
b.if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the Units relating to such performance metric will vest;
c.if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the Units relating to such performance metric will vest; and
d.if the “Outstanding” level for such performance metric is achieved, 100% of the Units relating to such performance metric will vest.

The foregoing summary of the 2023 Executive Incentive Plan2024 EIP and the 2024 LTIP Restricted Stock Unit Award Agreements relating to the 2024 LTIP is qualified in its entirety by the text of the 2023 Executive Incentive Plan2024 EIP and each of the 2024 LTIP Restricted Stock Unit Award Agreements, which arewere filed as exhibits to this Quarterly Report on Form 10-Q for the quarter ending March 31, 2023.2024.

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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity, and capital resources during the three-month periods ended March 31, 20232024 and 2022.2023. This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes to the financial statements contained in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended December 31, 2022.2023.

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are based on management's beliefs and assumptions and on information currently available to management.  For this purpose, any statement contained in this report that is not a statement of historical fact may be deemed to be forward-looking, including, but not limited to, statements relating to our future actions, intentions, plans, strategies, objectives, results of operations, cash flows and the adequacy of or need to seek additional capital resources and liquidity. Words such as "may," "should," "expect," "project," "plan," "anticipate," "believe," "estimate," "intend," "budget," "forecast," "predict," "potential," "continue," "should," "could," "will," or comparable terminology or the negative of such terms are intended to identify forward-looking statements; however, the absence of these words does not necessarily mean that a statement is not forward-looking.  Forward-looking statements by their nature involve known and unknown risks and uncertainties and other factors that may cause actual results and outcomes to differ materially depending on a variety of factors, many of which are not within our control.  Such factors include, but are not limited to, economic conditions generally and in the oil and gas industry in which we and our customers participate; competition within our industry; legislative requirements or changes which could render our products or services less competitive or obsolete; our failure to successfully develop new products and/or services or to anticipate current or prospective customers' needs; price increases; limits to employee capabilities; delays, reductions, or cancellations of contracts we have previously entered into; sufficiency of working capital, capital resources and liquidity and other factors detailed herein and in our other filings with the United States Securities and Exchange Commission (the "SEC" or "Commission"). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. For a more detailed discussion of the principal factors that could cause actual results to be materially different, you should read our risk factors in Item 1A. Risk Factors, included elsewhere in this report.

Forward-looking statements are based on current industry, financial, and economic information which we have assessed but which by its nature is dynamic and subject to rapid and possibly abrupt changes. Due to risks and uncertainties associated with our business, our actual results could differ materially from those stated or implied by such forward-looking statements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements and we hereby qualify all of our forward-looking statements by these cautionary statements.

Forward-looking statements in this report are based only on information currently available to us and speak only as of the date on which they are made. We undertake no obligation to amend this report or revise publicly these forward-looking statements (other than as required by law) to reflect subsequent events or circumstances, whether as the result of new information, future events or otherwise.

The following discussion should be read in conjunction with our financial statements and the related notes contained elsewhere in this report and in our other filings with the Commission.

Overview

We are a technology company providing solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances while mitigating potential environmental impacts related to the operation of these devices. Our legacy business is primarily focused in the upstream, midstream, and downstream transmission segments of the oil and gas industry. However, in recent years, we have completed many installations of our burner-management solutions in other industries thatfor which we believe our solutions will be applicable as we expand our addressable market over time. We specialize in the engineering and design of burner and combustion management systems and solutions used on a variety of natural and forced draft applications. We sell our products and services primarily throughout North America. Our experienced team of sales and service professionals are strategically positioned across the United States and Canada providing support and service for our products.

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Principal Products and Services

Across the energy industry, there are numerous demands for heat generation and control. Applications such as combustors, enclosed flares, gas production units, treaters, glycol and amine reboilers, indirect line-heaters, heated tanks, and process heaters require heat to support the production and or processing function. This heat is generated through the process of combustion, which must be controlled, managed, and supervised. Combustion and the resulting generation of heat are integral to the process of separating, treating, storing, incinerating, and transporting oil and gas. Factors such as specific gravity, the presence of hydrates, temperature and hydrogen sulfide content contribute to the need for heat generation in oil and gas production and processing applications. Our burner-management systems ignite, monitor, and manage pilot and burner systems that are utilized in this process. Our technology affords remote operation, reducing the need for employee interaction with the appliance's burner for purposes such as re-ignition or temperature monitoring. In addition, our burner-management systems can help reduce emissions by safely reigniting a failed flame, thereby improving efficiencies and up-time. Our extensive service and combustion experience provides customers with solutions that are consistent with industry trends and regulatory requirements to mitigate environmental impacts and reduce emissions through optimized burner operation.

Oil and gas companies, including upstream, midstream, downstream, pipeline, and gathering operators, utilize burner-management systems to achieve increased safety, greater operational efficiencies, and improved compliance with industry regulations. Without a burner-management system, a field employee must discover and reignite an extinguished burner flame, then restart the application manually. Therefore, withoutWithout a proper burner-management system, all application monitoring must be accomplished in-person, directly on-site. This requirement for on-site monitoring, in an operational environment with limited field personnel, can result in the potential interruption of production for long periods of time and increased risks associated with reigniting a flame, which can lead to site hazards, including explosions and the possibility of venting gas into the atmosphere. In addition, without a burner-management system, burners often operate for longer durations, frequently with lower efficiency, resulting in increased equipment fatigue and greater expense related to fuel consumption.

We continue to assess regulatory requirements applicable to our customers. We believe thatour burner-management systems and services offer solutions for customers to meet compliance standards where applicable. In addition to product sales, we dispatch specialized service technicians to provide maintenance and installation support throughout the United States and Canada.

We initially developed our first burner-management controller in 2005. Since that time, our systems have become widely adopted throughout the United States and Western Canada. Profire burner-management systems have been designed to comply with widely accepted safety and industrial codes and standards in North America, including those prescribed and certified by the Canadian Standards Association (CSA), Underwriters Laboratories (UL), and Safety Integrity Level (SIL) standards.

Our systems and solutions have been widely adopted by exploration and production companies (E&P), midstream operators, pipeline operators, as well as downstream transmission and utility providers. Our customers include Antero, ATCO, Chesapeake, Chevron, CNRL, Concho Resources,ConocoPhillips, Devon Energy, Dominion Energy, EQT, Kinder Morgan, National Grid, Ovintiv, Oxy, Range Resources, Williams, XTO, and others. Our systems have also been sold and installed in other parts of the world including many countries in South America, Europe, Africa, the Middle East, and Asia. Though firmly established and primarily focused on North American oil and gas markets, we continue to invest in expansion efforts in developing sales in diversified industries where we can utilize our combustion technology can be utilized.technology.

Environmental, Social and Governance Focus

As guiding principles and core to our strategy, our products and solutions are developed with a focus on safety, environmental impacts, reliability, and efficiency. Protecting human life, protecting the environment, and protecting our customers’ investments are essential to our business objectives. Our products play a crucial role in supporting our customers’ existing and future initiatives regarding improving workplace safety and environmental impacts.

Our burner-management technology is designed to monitor, operate, and manage a wide array of complex industrial heat applications. Providing our customers with safety-approved and certified technology, purposefully designed and built to meet regulatory requirements and process needs, is a critical component of our customers’ safety protocols and initiatives.

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Proper burner and combustion management control, coupled with specialized peripheral solutions, increase site and location safety while reducing emissions. ProfireProfire's technology and solutions are integrated into a variety of applications to significantly reduce the release of methane and volatile organic compounds into the environment.

Profire burner-management controls and complementary solutions provide users with the ability to monitor field equipment remotely. This reduces truck rolls and the need for field personnel to travel to and manually inspect burner malfunctions in remote sites and locations. By dramatically reducing the number and frequency of physical trips to site, our automated solutions help our customers improve safety, reduce emissions, and decrease operating costs.

Operator safety is at the heart of our burner-management solution technology. Integration of our solutions and products helps our customers increase the likelihood that their employees return home safe each day. Adding greater physical distance between humans and the combustion process, as well as ensuring fuel gas for combustion equipment issupplies are properly shut off when no flame is present, are two of the critical elements of how our burner-management solutions help protect human life.

Results of Operations

Comparison quarter over quarter

The table below presents certain financial data comparing the most recent quarter to prior quarters:
For the three months ended
March 31, 2023December 31, 2022September 30, 2022June 30, 2022March 31, 2022
For the three months endedFor the three months ended
March 31, 2024March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Total RevenuesTotal Revenues$14,553,461 $13,971,018 $12,829,338 $9,633,148 $9,503,140 
Gross Profit PercentageGross Profit Percentage53.8 %47.0 %47.7 %45.7 %47.9 %Gross Profit Percentage49.5 %53.9 %50.0 %50.9 %53.3 %
Operating ExpensesOperating Expenses$4,527,308 $4,279,751 $4,000,983 $4,308,337 $3,867,709 
Income from OperationsIncome from Operations$3,305,800 $2,292,914 $2,117,893 $94,806 $688,995 
Net IncomeNet Income$2,589,621 $1,825,022 $1,210,748 $284,829 $627,160 
Operating Cash FlowOperating Cash Flow$521,780 $1,712,709 $(1,818,322)$1,814,039 $(1,192,349)

Revenues for the quarter ended March 31, 2023 increased2024 decreased by 53%7% or $5,050,321$1,043,488 compared to the quarter ended March 31, 2022, which was driven by ongoing strong customer demand, increases2023, due to decreases in Profire sales pricesNorth America rig count and improvements in Profire BMS system availability.lower natural gas prices. The first quarter of 20232024 weekly average rig count for North America was 977810 compared to 816977 in the same period of last year, which represents an increase of 20%. Strong oil andyear. Average natural gas prices also have contributeddecreased 19% in the first quarter of 2024 compared to ongoing investmentsthe same period in new technologythe prior year. As indicated by E&P operators. Overallthese industry trends, overall customer demand increasedfor hydrocarbons decreased during the quarter ended March 31, 2023,2024 which caused a decrease in response to these industry trends.revenue for Profire.

Revenues for the quarter ended March 31, 2023 increased2024 decreased by 4%6% or $582,443$854,584 compared to the quarter ended December 31, 2022, which was driven by strong customer demand, higher sales2023, also due to the lower natural gas prices and strength in drilling and completion activity. Thethe first quarter of 2023 weekly average rig count for North America increased by 2% compared to the prior quarter. Overall customer demand increased during the quarter ended March 31, 2023 in response to these industry trends.2024.

Our gross profit margin for the first quarter of 20232024 was up 5.9%down 3.8% from the same quarter of last year and up 6.8%down 4.4% from quarter ended December 31, 2022.2023. The gross margin percentage was impacted by price increases, greater quantities of higher margin products sold, normal fluctuations in product, service and service mix, and product related reserves. The gross margin of the first quarter of 2023 also benefited from greater fixed cost coverage from the increase in revenue over prior quarters.customer mix.

Operating expenses for the quarter ended March 31, 20232024 increased $659,599$492,375 from the same quarter of last year, whichdue primarily results fromto increases in headcount and cost inflation across the business. Operating expenses for the quarter ended March 31, 2023 increased $247,557 from2024 were roughly flat with the prior quarter ended December 31, 2022 primarily due to increases in employee related costs.2023.

Due to the factors discussed above, we reported income from operations of $3,305,800$1,737,089 for the quarter ended March 31, 20232024 compared to income from operations of $688,995$3,305,801 for the same quarter in 20222023 and income from operations of $2,292,914$2,780,784 in the quarter ended December 31, 2022.2023.

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Due to the combination of factors discussed above relating to revenues, gross profit margin and operating expenses, we reported net income of $2,589,621$1,434,375 for the quarter ended March 31, 20232024 compared to net income of $627,160$2,589,621 for the same quarter in 20222023 and net income of $1,825,022$3,290,545 in the quarter ended December 31, 2022.2023.

Operating
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The Company used operating cash flows increased $521,780of $2,692,138 during the quarter ended March 31, 20232024 compared to a decreaseoperating cash flows of $1,192,349$521,780 during the same quarter of 2022 due primarily to the increase in net income2023 and changes in working capital balances.

Operatingoperating cash flows increased $521,780 during the quarter ended March 31, 2023 compared to an increaseof $4,395,818 in operating cash flow of $1,712,709 during the quarter ended December 31, 20222023. The fluctuations in operating cash flows are due primarily to the changes in net income and working capital balances, including a decrease in accounts payable.balances.

Liquidity and Capital Resources

Working capital at March 31, 20232024 was $29,067,153$36,521,702 compared to $25,245,311$35,377,246 at December 31, 2022.2023.

Our liquidity position is impacted by operating, investing and financing activities. During the three months ended March 31, 2023,2024, we generated $521,780used $2,692,138 of cash from operating activities, primarily due to an increasea decrease in net income, which offset an increase in accounts receivablepurchases of inventory and a decrease in accounts payable.payment of income taxes and other liabilities. Operating activity trends consist of cash inflows and outflows related to changes in operating assets and liabilities. During the three months ended March 31, 2023,2024, we used $446,417$531,267 of cash from investing activities to purchase investments, property and equipment. Investing activity trends consist of changes in the mix of our investment portfolio and purchases or sales of fixed assets, and acquisition activities.assets. During the three months ended March 31, 2023,2024, we used $249,453$318,808 of cash in financing activities, primarily related to taxes paid on employee stock awards issuedaward settlements during the quarter. Financing activity trends consist of transactions related to equity awards and purchases of treasury stock pursuant to our completed share repurchase program.awards. The extent to which our liquidity position will be impacted in the future depends on industry trends and developments, which are highly uncertain and cannot be predicted with confidence. As of March 31, 2023,2024, we held $16,343,915$16,233,347 of cash and investments that form our core excess liquidity which could be utilized, if required, due to the issues described above.

Off-Balance Sheet Arrangements

We have not engaged in any off-balance sheet arrangements, nor do we plan to engage in any in the foreseeable future.


Item 3.  Quantitative and Qualitative Disclosure about Market Risk

This section is not required.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Principal Executive Officers and Principal Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act, as of the end of the period covered by this quarterly report on Form 10-Q. Our disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Principal Executive Officers and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on the evaluation performed, our management, including the Principal Executive Officers and Principal Financial Officer, concluded that the disclosure controls and procedures were effective as of March 31, 2023.
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2024.

Changes in Internal Control over Financial Reporting

Our management, with the participation of our Principal Executive Officers and Principal Financial Officer, evaluated the changes in our internal control over financial reporting that occurred during the quarterly period covered by this quarterly report on Form 10-Q. Based on that evaluation, management concluded that no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2023,2024, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

To the best of our knowledge, there are no legal proceedings pending or threatened against us that may have a material impact on us, and there are no actions pending or threatened against any of our directors or officers that are adverse to us.

Item 1A.  Risk Factors

In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the risks discussed in our annual report on Form 10-K for the year ended December 31, 2022,2023, which risks could materially affect our business, financial condition, or future results. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material, adverse effect on our business, financial condition or future results.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

This item is not applicable.

Item 3. Defaults Upon Senior Securities

This item is not applicable.

Item 4. Mine Safety Disclosures

This item is not applicable.

Item 5. Other Information

This item is not applicable.During the quarterly period ended March 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K under the Securities Act).
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Item 6.  Exhibits

Exhibits.  The following exhibits are included as part of this report:
Profire Energy, Inc. 2023 Executive Incentive Plan
Restricted Stock Unit Award Agreement (Performance Vesting) between Profire Energy and Ryan Oviatt dated April 25, 20239, 2024
Restricted Stock Unit Award Agreement (Time Vesting) between Profire Energy and Ryan Oviatt dated April 25, 20239, 2024
Restricted Stock Unit Award Agreement (Performance Vesting) between Profire Energy and Cameron Tidball dated April 25, 20239, 2024
Restricted Stock Unit Award Agreement (Time Vesting) between Profire Energy and Cameron Tidball dated April 25, 20239, 2024
Restricted Stock Unit Award Agreement (Performance Vesting) between Profire Energy and Patrick Fisher dated April 25, 20239, 2024
Restricted Stock Unit Award Agreement (Time Vesting) between Profire Energy and Patrick Fisher dated April 25, 20239, 2024
Profire Energy, Inc. 2024 Executive Incentive Plan
Certification of Co-Principal Executive Officer Pursuant to Rule 13a-14(a) Ryan W. Oviatt
Certification of Co-Principal Executive Officer Pursuant to Rule 13a-14(a) Cameron M. Tidball
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)
Certification of Principal Executive Officers pursuant to 18 U.S.C. Section 1350
Certification of Ryan W. Oviatt, Principal Financial Officer pursuant to 18 U.S.C. Section 1350
Exhibit 101.INS*XBRL Instance Document
Exhibit 101.SCH*XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF*XBRL Taxonomy Definition Linkbase Document
Exhibit 101.LAB*XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*    Filed herewith.
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+ Indicates Management contract, compensatory plan, or arrangement with the Company.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROFIRE ENERGY, INC.
Date:May 9, 20238, 2024By:/s/ Ryan W. Oviatt
Ryan W. Oviatt
Co-Chief Executive Officer and Chief Financial Officer
Date:May 9, 20238, 2024By:/s/ Cameron M. Tidball
Cameron M. Tidball
Co-Chief Executive Officer

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