Special note on forward-looking statements
The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a secure port for forward-looking statements made by or on behalf of our company. Our company and our representatives may, from time to time, make written or oral statements that are “forward-looking,” including statements contained in this annual report and other submissions to the Securities and Exchange Commission and reports to shareholders of the our company. Management believes that all statements that express expectations and projections regarding future matters, as well as developments outside the control of our company, including changes in global economic conditions, are forward-looking statements within the meaning of the Act. These statements are made based on management’s opinions and assumptions, from the time the statements are made, about future events and business performance. There is no guarantee, however, that management’s expectations will necessarily be met. Factors that may affect forward-looking statements include a wide range of factors that could materially affect future evolution and performance, including:
Changes in company-wide strategies, which can lead to changes in the types or combination of businesses in which our company participates or decides to invest;
Changes in US economic conditions, global or regional;
Changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, that may prevent or increase our company’s access to external financing for our operations and investments ;
Increased competitive pressures, both nationally and internationally;
Legal and regulatory developments, such as regulatory actions affecting environmental activities;
The imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls;
Adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which can lead to increased costs or disruption of operations.
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This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated in light of their inherent uncertainty.
Critical accounting policies and estimates
The preparation of financial statements and related information in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited financial statements and the accompanying notes. Management bases its estimates on historical experience and various other hypotheses that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company believes that there were no other significant changes during the three-month period ended March 31, 2022 in the items disclosed as significant accounting policies in the notes to management’s financial statements on the Company’s Form 10. for the year ended December 31, 2021..
Business operation and growth plan
Our efforts continue to focus on increasing sales of our life science consumables and at the same time working to improve the design of our liquid nitrogen refrigeration products. Of these liquid nitrogen refrigeration products, the ultra low temperature freezer is receiving the highest priority. We have received positive feedback on the improvements and improvements made to the design of the ultra low temperature freezer. We also continue to work on the refrigerated trailer, or “reefer”.
We are receiving considerable interest in our latest product introduction, which is an ultra-cold refrigerator used in the manufacture of CBD oil. This unit improves the efficiency of the manufacturing process and allows the production of a higher purity in the CBD oil produced.
In parallel with the development and marketing of the above products, we have completed our online catalog and are advancing in the registration of new distributors for our consumable products.
The following is an analysis of the operating results for the three months ended March 31, 2022 and 2021.
Results of operations
Three months ended March 31, 2022 and 2021
During the three months ended March 31, 2022 2021 Foreign exchange income $ 753,576 $ 562,362 $ 191,214 Cost of goods sold 234,289 143,795 90,494 Gross profit 519,287 418,567 100,720 Expenditure operation 312,782 282,064 $ 30,718 247. ——— —————————————– ——— ———————
Revenue increased during the three-month period ended March 31, 2022 to $ 753,576 from $ 562,362 for the three-month period ended March 31, 2021, an increase of $ 191,214. The increase in revenue is primarily due to a $ 167,865 increase in the sale of freezers and refrigerators. The cost of goods increased during the quarter ended March 31, 2022, compared to March 31, 2021, to $ 234,289 from $ 143,795, an increase of $ 90,494. We achieved a gross profit rate of 69% for the three months ended March 31, 2022, compared to 74% for the three months ended March 31, 2021. The gross profit percentage depends on the sales combination of products, which varies by quarter. the fourth. The increase in the sale of freezers and refrigerators during the period 2022 was slightly offset by higher costs, resulting in slightly lower margins. We continue to work actively to get more favorable prices from our vendors in order to increase the margins made on all product lines.
Operating expenses were $ 312,782 during the three months ended March 31, 2022, an increase of $ 30,718 over the $ 282,064 expenses incurred in the three-month period ended March 31, 2021. L The increase stems from a $ 33,675 increase in salaries and wages. they have hired additional staff to meet the demand for freezers and refrigerators, and a $ 16,628 increase in research and development costs, partly offset by a $ 19,585 decrease in general and administrative expenses. While we continue to monitor and minimize operating costs, we also realize that certain levels of spending are required to market products and achieve market penetration.
Research and development expenses for the three months ended March 31, 2022 were $ 25,325, an increase of $ 16,628 in expenses for the same period in 2021, as improvements continue to be made to the CBD ultrafred oil cooler. .
Salaries and wages for the three months ended March 31, 2022 were $ 170,279, an increase of $ 33,675 compared to the expense for the three-month period ended March 31, 2021. Additional staff has been hired so that the company can cope with sales. demand for our refrigerators and freezers.
General and administrative expenses for the three months ended March 31, 2022 were $ 117,178, a decrease of $ 19,585 from $ 136,763 in the same period in 2021.
The lower level of spending was not the result of significant savings in any category of expenses, but rather the cumulative result of small savings in numerous expenses.
Net income for the three-month period ended March 31, 2022 was $ 206,506, a decrease of $ 41,263 from net income of $ 282,064 for the three-month period ended March 31, 2021. Management continues to search opportunities to increase sales, improve gross margins, and control ongoing operating expenses.
Net income of $ 206,506 for the three-month period ended March 31, 2022 represents revenue of $ 0.00 per share. This compares to net income of $ 282,064, or $ 0.00 per share, during the three months ended March 31, 2021.
Seasonality and cyclicity
We do not believe that our business is cyclical.
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Liquidity and capital resources
Our cash resources as of March 31, 2022 were $ 1,579,533, with receivables of $ 233,329, net of provisions, and an inventory of $ 695,607, net of provisions. Our working capital as of March 31, 2022 was $ 2,281,502. Working capital as of December 31, 2021 was $ 2,063,516.
For the three-month period ended March 31, 2022, the net cash provided for operating activities was $ 105,609, a decrease of $ 158,664 from the $ 264,273 in net cash provided for operating activities. for the three-month period ended March 31, 2021.
Off-balance sheet arrangements
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