Executive Summary

Quarter ended February 28, 2023: Sales were $1.10M, gross profit $0.51M, and net loss ($0.37M), with diluted EPS of ($0.06); sales declined 18% and profitability deteriorated year over year as SG&A increased materially .
The Board concluded prior FY2022 financial statements should no longer be relied upon due to errors (inventory overstatement and revenue/cost recognition issues) and plans restatements, elevating accounting/control risk .
Liquidity was tight: operating cash flow was ($1.23M) for the quarter; management added a $10% CEO line of credit ($350k on Apr 28, 2023, later increased to $500k and then $750k), highlighting near‑term funding needs .
No formal guidance or call transcript was found; management disclosed substantial doubt about going concern pending improved cash generation and capital raising .

What Went Well and What Went Wrong

What Went Well

Sales of $1.10M with 97% from product sales suggests ongoing commercial activity despite macro and internal-control challenges .
Cost of sales fell 13% YoY, partially cushioning gross profit pressure amid revenue decline .
Management secured insider financing (CEO line of credit at 10% and short-term notes), demonstrating access to liquidity in a constrained funding environment .
- “We anticipate that our short-term and medium-term cash flow needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs.”

What Went Wrong

SG&A rose 360% YoY (to $787k) driven by contractor spend, payroll, and rent, flipping operating profit to a loss and compressing cash flow .
Net income swung from $0.47M in the prior year period to a ($0.37M) loss; diluted EPS moved from ~$0.00 to ($0.06) .
Material accounting/control issues: Board non‑reliance on FY2022 statements due to inventory and percent‑complete errors; disclosure controls deemed not effective .

Financial Results

Metric	Three months ended Feb 28, 2022 (oldest)	Three months ended Feb 28, 2023 (newest)
Revenue ($USD)	$1,333,245	$1,098,598
Gross Profit ($USD)	$648,926	$505,332
Gross Margin (%)	48.7% (=$648,926/$1,333,245)	46.0% (=$505,332/$1,098,598)
Operating Expenses ($USD)	$260,615	$876,594
Operating Income (Loss) ($USD)	$388,311	($371,262)
Other Income ($USD)	$84,900	$0
Net Income (Loss) ($USD)	$473,211	($371,262)
EPS – Basic ($USD)	— (not presented)	($0.06)
EPS – Diluted ($USD)	$0.002	($0.06)

KPIs and Balance Sheet/Liquidity

Metric	Nov 30, 2022 (oldest)	Feb 28, 2023 (newest)
Cash ($USD)	$1,260,199	$260,461
Contract Asset ($USD)	$43,528	$584,018
Inventories ($USD)	$347,207	$561,491
Contract Liabilities – Customer Deposits ($USD)	$2,842,356	$2,415,172
Accounts Receivable, net ($USD)	$74,167	$30,878
Accounts Payable ($USD)	$627,976	$933,082
Cash from Operations (quarter) ($USD)	—	($1,232,303)
Short‑Term Note Payable ($USD)	—	$300,000
Customer concentration (% of revenue)	100% (two customers)	97% (two customers)

Segment breakdown: Not disclosed; results presented on a consolidated basis .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	None provided	None provided	Maintained (no guidance)
Gross Margin	FY/Quarter	None provided	None provided	Maintained (no guidance)
OpEx	FY/Quarter	None provided	None provided	Maintained (no guidance)
Liquidity/Financing	FY/Quarter	N/A	Plan to fund needs via debt/equity; 10% CEO line of credit established post‑quarter	New disclosure of financing path
Tax rate	FY/Quarter	None provided	None provided	Maintained (no guidance)

Earnings Call Themes & Trends

No Q2 2023 earnings call transcript or prior two quarters’ calls were found. Themes below reflect MD&A and filings narrative.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period	Trend
Supply chain/commodities	Risks from commodity and component availability; inflation and rate increases increasing costs (10‑K)	No new specific updates; costs managed with lower cost of sales YoY	Stable risk; partial COGS reduction YoY
Tariffs/macro	Trade/tariff uncertainty and macro headwinds (10‑K)	No incremental quarter‑specific update in 10‑Q narrative	Ongoing macro vigilance
Customer concentration	Reliance on few anchor customers (10‑K)	Two customers = 97% revenue; AR concentrated (98% across three customers)	Persistent concentration risk
Liquidity/financing	Need for external financing; going concern (10‑K)	Cash from ops ($1.23M) negative; short‑term note and CEO line of credit path	Elevated financing activity
Internal controls	Weaknesses and restatement needed for FY2022	Board non‑reliance on FY2022; remediation intent	Heightened remediation focus
Product focus	EV rapid charging and modular zero‑carbon solutions	Same; continued development and sales	Consistent strategy

Management Commentary

Strategic focus: “We are focused on designing, optimizing, developing, and producing modular, scalable, zero‑carbon green renewable solutions… initial focus is on mobile and stationary electric vehicle rapid charging.”
Liquidity plan: “We anticipate that our short‑term and medium‑term cash flow needs will be satisfied through the issuance of debt or the sale of our securities…”
Controls/remediation: Disclosure controls “were not effective… due to… material weaknesses… and a restatement needed for our November 30, 2022 financial statements… We intend to remediate… by engaging a third‑party firm…”
Restatement decision: The Board concluded FY2022 Renewable Innovations financial statements “should no longer be relied upon” and intends to file amended reports .

Q&A Highlights

No Q2 2023 earnings call transcript or analyst Q&A was found for REII during the period; therefore, no call‑driven clarifications or tone changes can be assessed [List 0 transcripts found].

Estimates Context

S&P Global consensus estimates for Q2 2023 were unavailable due to missing Capital IQ mapping for REII; as a result, we cannot assess beats/misses versus Wall Street consensus for revenue, EPS, or EBITDA [GetEstimates error: Missing CIQ mapping].

Key Takeaways for Investors

Revenue contracted 18% YoY while SG&A rose 360% YoY, driving an operating loss; near‑term thesis hinges on cost discipline and scaling revenue without outsized opex growth .
Cash burn is material (CFO of ($1.23M)); financing reliance persists via insider lines and short‑term notes at 10%—monitor dilution and debt terms as liquidity vector until operations inflect .
Accounting/control risk elevated: FY2022 non‑reliance and planned restatements plus identified control weaknesses—wait for amended filings and remediation progress as potential stock catalysts (positive or negative) .
Customer concentration remains high (97% revenue from two customers); order execution and collections from a narrow base are key operational risks to watch .
Product focus on EV rapid charging/green hydrogen remains intact; proof‑points in deployments and backlog conversion will be more important than narrative until the model scales .
With no formal guidance or call, positioning is event‑driven: track amended 10‑K/A and 8‑K/A filings, auditor transitions, and financing updates for near‑term trading signals .
Medium‑term thesis requires progress on internal controls, diversified customer base, and margin trajectory; risk‑reward will be sensitive to restatement outcomes and capital access costs .

Document and Prior Periods Coverage

8‑K Item 2.02/4.02 (Results of Operations and Financial Condition; Non‑Reliance) filed June 1, 2023 read in full .
10‑Q for quarter ended February 28, 2023 read in full; includes comparative three months ended February 28, 2022 –.
8‑Ks on line of credit amendments (Sept 6 and Sept 29, 2023) and auditor changes (June 23, 2023; Sept 11, 2023) read in full for context – – – –.
No Q2 2023 earnings call transcript or press release found; prior two quarters’ detailed earnings documents were not available in the catalog searched [ListDocuments results].

RENEWABLE INNOVATIONS, INC. (REII)·Q2 2023 Earnings Summary