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NOTE 1—BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Reflect Scientific, Inc. (the “Company,” “we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all information and footnotes required by GAAP for complete financial statements. The December 31, 2022 consolidated balance sheet data was derived from audited financial statements but do not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2023. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

NOTE 2—RECENT ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company's condensed consolidated financial statements.

NOTE 3—DISAGGREGATION OF REVENUES Our revenue is disaggregated based on product category and geographical region. We recognize revenue from the sale of scientific equipment for the life sciences and manufacturing industries. Our products range from non-mechanical Cyrometrix freezers, chillers, and original equipment manufacturer (“OEM”) value-added products and components for the life sciences industry. The Company’s revenues for the three months ended March 31, 2023 and 2022 are disaggregated as follows: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="11" style="border-bottom: black 1.5pt solid; text-align: center">Three Months Ended March 31, 2023</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">United States</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">International</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Revenues</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; padding-left: 9pt">Freezers and chillers</td> <td style="width: 1%"> </td> <td style="width: 2%">$</td> <td style="width: 12%; text-align: right">45,250</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">-</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">45,250</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">OEM and other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">127,880</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt; text-align: right">67,997</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">195,877</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total Revenues</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">173,130</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">67,997</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">241,127</td> <td style="padding-bottom: 4pt"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="11" style="border-bottom: black 1.5pt solid; text-align: center">Three Months Ended March 31, 2022</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">United States</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">International</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Revenues</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; padding-left: 9pt">Freezers and chillers</td> <td style="width: 1%"> </td> <td style="width: 2%">$</td> <td style="width: 12%; text-align: right">348,458</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">153,236</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">501,694</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">OEM and other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">172,443</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt; text-align: right">79,439</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">251,882</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total Revenues</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">520,901</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">232,675</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">753,576</td> <td style="padding-bottom: 4pt"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="11" style="border-bottom: black 1.5pt solid; text-align: center">Three Months Ended March 31, 2023</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">United States</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">International</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Revenues</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; padding-left: 9pt">Freezers and chillers</td> <td style="width: 1%"> </td> <td style="width: 2%">$</td> <td style="width: 12%; text-align: right">45,250</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">-</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">45,250</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">OEM and other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">127,880</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt; text-align: right">67,997</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">195,877</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total Revenues</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">173,130</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">67,997</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">241,127</td> <td style="padding-bottom: 4pt"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="11" style="border-bottom: black 1.5pt solid; text-align: center">Three Months Ended March 31, 2022</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">United States</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">International</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Total</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Revenues</td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 49%; padding-left: 9pt">Freezers and chillers</td> <td style="width: 1%"> </td> <td style="width: 2%">$</td> <td style="width: 12%; text-align: right">348,458</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">153,236</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 14%; text-align: right">501,694</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">OEM and other</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">172,443</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid; padding-left: 9pt; text-align: right">79,439</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-left: 9pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">251,882</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total Revenues</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">520,901</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 4pt; text-align: right">232,675</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">753,576</td> <td style="padding-bottom: 4pt"> </td></tr> </table>

45250 45250 127880 67997 195877

173130

67997

241127

348458 153236 501694 172443 79439 251882

520901

232675

753576

NOTE 4—INVENTORIES Inventories at March 31, 2023 and December 31, 2022 consisted of the following: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">March 31, 2023</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2022</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Finished goods</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">363,010</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">376,334</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Raw materials</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">593,654</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">527,062</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Total inventories</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right">956,664</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right">903,396</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; "> <td>Less reserve for obsolescence</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(106,044</td> <td>)</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(106,044</td> <td>)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Total inventories, net</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">850,620</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">797,352</td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> Inventory balances are composed of finished goods. Raw materials and work in process inventory are immaterial to the condensed consolidated financial statements.

363010

376334

593654

527062

956664

903396

106044

850620

797352

NOTE 5—LEASES The following was included in our condensed consolidated balance sheet at March 31, 2023 and December 31, 2022: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">March 31, 2023</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">December 31, 2022</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Operating lease right-of-use assets</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">39,736</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">54,265</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; "> <td>Lease liabilities, current portion</td> <td> </td> <td> </td> <td style="text-align: right">42,249</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">57,393</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Lease liabilities, long-term</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; "> <td>Total operating lease liabilities</td> <td> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">42,249</td> <td> </td> <td> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">57,393</td> <td> </td></tr> <tr style="vertical-align: bottom; "> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Weighted-average remaining lease term (months)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right">8</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right">11</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Weighted average discount rate</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right">5.25%</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right">5.25%</td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> Total lease expense for the three months ended March 31, 2023 and 2022 is as follows: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid; text-align: center">Three Months Ended March 31,</td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">2023</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2022</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Operating lease expense</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">15,216</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">15,216</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Variable lease expense</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">4,437</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">2,393</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Total lease expense</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">19,653</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">17,609</td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> As of March 31, 2023, maturities of operating lease liabilities were as follows: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">Year Ending December 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center">Amount</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 82%">2023 – remaining </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">43,089</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Less: imputed interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(840</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total operating lease liabilities</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double">$</td> <td style="border-bottom: black 4.5pt double; text-align: right">42,249</td> <td style="padding-bottom: 4pt"> </td></tr> </table>

39736

54265

42249

57393

42249

57393

P8M

P11M

0.0525

15216

4437

2393

19653

17609

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid">Year Ending December 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center">Amount</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 82%">2023 – remaining </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 15%; text-align: right">43,089</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Less: imputed interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">(840</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Total operating lease liabilities</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double">$</td> <td style="border-bottom: black 4.5pt double; text-align: right">42,249</td> <td style="padding-bottom: 4pt"> </td></tr> </table>

43089

840

42249

NOTE 6—STOCKHOLDERS’ EQUITY Common Stock As of March 31, 2023, the Company was authorized to issue 100,000,000 common shares. As of March 31, 2023 and December 31, 2022, the Company had 85,214,086 common shares issued and outstanding. Restricted Stock Awards Below is a table summarizing the changes in restricted stock awards outstanding during the three months ended March 31, 2023: <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">Restricted Stock Awards</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 70%">Outstanding at December 31, 2022</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">450,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">0.11</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Vested</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Forfeited</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Outstanding at March 31, 2023</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double; padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double; padding-bottom: 4pt; text-align: right">450,000</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double">$</td> <td style="border-bottom: black 4.5pt double; text-align: right">0.11</td> <td style="padding-bottom: 4pt"> </td></tr> </table> Stock-based compensation expense of $6,875 and $12,844 was recorded during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the remaining unrecognized stock-based compensation expense related to non-vested restricted stock awards is $48,125 and is expected to be recognized over 1.75 years.

100000000

85214086

<table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">Restricted Stock Awards</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 70%">Outstanding at December 31, 2022</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 13%; text-align: right">450,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 11%; text-align: right">0.11</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Vested</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Forfeited</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="border-bottom: black 1.5pt solid; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 4pt">Outstanding at March 31, 2023</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double; padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double; padding-bottom: 4pt; text-align: right">450,000</td> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: black 4.5pt double">$</td> <td style="border-bottom: black 4.5pt double; text-align: right">0.11</td> <td style="padding-bottom: 4pt"> </td></tr> </table>

450000

0.11

450000

0.11

6875

12844

48125 P1Y9M

NOTE 7—EARNINGS (LOSS) PER SHARE The computation of weighted average shares outstanding and the basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 consisted of the following: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid"> Three Months Ended March 31,</td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">2023</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2022</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Net income (loss)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">(147,839</td> <td style="width: 1%">)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">206,505</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Weighted average shares outstanding</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">85,214,086</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">84,989,086</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Basic earnings (loss) per share</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">(0.00</td> <td style="text-align: center; padding-bottom: 1.5pt; vertical-align: middle">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">0.00</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Weighted average shares outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right">85,214,086</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right">84,989,086</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">Effect on dilutive stock awards</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">750,000</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Total potential shares outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt; text-align: right">85,214,086</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">85,739,086</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">Diluted earnings (loss) per share</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">(0.00</td> <td style="text-align: center; padding-bottom: 1.5pt; vertical-align: middle">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">0.00</td> <td style="padding-bottom: 1.5pt"> </td></tr> </table> For the three months ended March 31, 2023,there were 450,000 common share equivalents excluded from the diluted earnings per share calculation as their effect is anti-dilutive.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="7" style="border-bottom: black 1.5pt solid"> Three Months Ended March 31,</td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; padding-bottom: 1.5pt; text-align: center">2023</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">2022</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Net income (loss)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">(147,839</td> <td style="width: 1%">)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">206,505</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; "> <td>Weighted average shares outstanding</td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">85,214,086</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">84,989,086</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Basic earnings (loss) per share</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">(0.00</td> <td style="text-align: center; padding-bottom: 1.5pt; vertical-align: middle">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">0.00</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Weighted average shares outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: right">85,214,086</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td> </td> <td style="text-align: right">84,989,086</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">Effect on dilutive stock awards</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">750,000</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 1.5pt">Total potential shares outstanding</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid; padding-bottom: 1.5pt; text-align: right">85,214,086</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1pt solid"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">85,739,086</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">Diluted earnings (loss) per share</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt">$</td> <td style="border-bottom: Black 1.5pt double; padding-bottom: 1.5pt; text-align: right">(0.00</td> <td style="text-align: center; padding-bottom: 1.5pt; vertical-align: middle">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt double">$</td> <td style="border-bottom: Black 1.5pt double; text-align: right">0.00</td> <td style="padding-bottom: 1.5pt"> </td></tr> </table>

-147839

206505

85214086 84989086

85214086

84989086

750000

85214086

85739086

450000

10-Q --12-31

false Q1 0001103090 None