Reflect Scientific, Inc 10-Q for FY2022 Q1
Reflect Scientific, Inc. (RSCF)
About this 10-Q
Reflect Scientific, Inc filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).
Headline figures
Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $753.58K
- up 34.0% from $562.36K a year earlier
- Net income
- $206.51K
- down 16.7% from net income of $247.77K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from __________ to __________
Commission File Number
(Exact name of registrant as specified in its charter)
| | |
| (State or Other Jurisdiction of | (I.R.S. Employer Identification No.) |
| incorporation or organization) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
| Title of class | Ticker symbol | Name of exchange on which registered |
| | | OTCQB |
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.
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 definition 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 [ ] |
| | 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 [ ]
Indicate by check mark whether the Registrant has submitted electronically on its corporate Web site, if any, every
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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).
Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years:
Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Not applicable.
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date.
Class
Outstanding as of May 13, 2022
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TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
| Item 1: | Financial Statements | |
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| | Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited), and December 31, 2021 | 5 - 6 |
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| | Condensed Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 (unaudited) | 7 |
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| | Condensed Consolidated Statement of Stockholders’ Equity for the three | |
| | months ended March 31, 2022 and 2021 (unaudited) | 8 |
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| | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited) | 9 |
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| | Notes to Condensed Consolidated Financial Statements | 10 |
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| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
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| Item 3: | Quantitative and Qualitative Disclosure about Market Risk | 18 |
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| Item 4: | Controls and Procedures | 18 |
PART II – OTHER INFORMATION
| Item 1: | Legal Proceedings | 19 |
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| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
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| Item 3: | Defaults Upon Senior Securities | 19 |
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| Item 4: | Mine Safety Disclosure | 19 |
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| Item 5: | Other Information | 19 |
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| Item 6: | Exhibits | 19 - 20 |
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| Signatures | 21 | |
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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Reflect Scientific, Inc.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2022
The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the 10-K for the period ended December 31, 2021, accompanying notes, and with the historical financial information of the Company.
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REFLECT SCIENTIFIC, INC.
Condensed Consolidated Balance Sheets
ASSETS
| | | March 31, 2022 (Unaudited) | | December 31, 2021 |
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| CURRENT ASSETS | | | | |
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| Cash | $ | | $ | |
| Accounts receivable, net | | | | |
| Inventory, net | | | | |
| Prepaid assets | | | | |
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| Total Current Assets | | | | |
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| OTHER ASSETS | | | | |
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| Operating lease right-of-use assets | | | | |
| Goodwill | | | | |
| Deposits | | | | |
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| Total Other Assets | | | | |
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| TOTAL ASSETS | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
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REFLECT SCIENTIFIC, INC.
Condensed Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS’ EQUITY
| | | March 31, 2022 (Unaudited) | | December 31, 2021 |
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| CURRENT LIABILITIES | | | | |
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| Accounts payable and accrued expense | $ | | $ | |
| Contract liabilities | | | | |
| Operating lease liabilities – short term | | | | |
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| Total Current Liabilities | | | | |
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| LONG-TERM LIABILITIES | | | | |
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| Operating lease liability – long-term | | | | |
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| Total Liabilities | | | | |
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| STOCKHOLDERS’ EQUITY | | | | |
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| Preferred stock, $ | | | ||
| Common stock, $ issued and outstanding at March 31, 2022 and December 31, 2021, respectively | | | | |
| Additional paid in capital | | | | |
| Accumulated deficit | | ( | | ( |
| Total Stockholders’ Equity | | | | |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
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REFLECT SCIENTIFIC, INC.
Condensed Consolidated Statements of Income
(Unaudited)
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| NET INCOME | $ | | $ | |
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| NET INCOME PER SHARE – BASIC | $ | | $ | |
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| NET INCOME PER SHARE - DILUTED | $ | | $ | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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REFLECT SCIENIFIC, INC.
Condensed Consolidated Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2022 and 2021
| | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
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| | Shares | Amount | | | |
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| Balance, December 31, 2021 | | $ | $ | $( | $ | ||
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| Stock-based compensation | - | | |
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| Net income for the three-month period ended March 31, 2022 | - | | |
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| Balance, March 31, 2022 | | $ | $ | $( | $ |
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| | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total | |
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| Balance, December 31, 2020 | | $ | $ | $( | $ |
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| Net income for the three-month period ended March 31, 2021 | - | | | ||
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| Balance, March 31, 2021 | | $ | $ | $( | $ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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REFLECT SCIENTIFIC, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | For the Three Months Ended March 31, | ||
| | | 2022 | | 2021 |
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| CASH FLOWS FROM OPERATING ACTIVITIES | | | | |
| Net income | $ | | $ | |
| Adjustments to reconcile net income to net cash provided by | | | | |
| (used in) operating activities: | | | | |
| Stock-based compensation | | | | |
| Amortization of operating lease right-of-use asset | | | | |
| Gain on forgiveness | | | ( | |
| Changes in operating assets and liabilities: | | | | |
| Accounts receivable | | ( | | |
| Inventory | | ( | | ( |
| Prepaid expenses | | | | |
| Accounts payable and accrued expenses | | | | |
| Operating lease liabilities | | ( | | ( |
| Customer deposits | | ( | | |
| Net Cash from Operating Activities | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | |
| Net Cash from investing activities | | | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | |
| Net cash from financing activities | | | ||
| NET CHANGE IN CASH | | | | |
| CASH AT BEGINNING OF PERIOD | | | | |
| CASH AT END OF PERIOD | $ | | $ | |
| SUPPLEMENTAL CASH FLOW INFORMATION: | | | | |
| Cash Paid For: | | | | |
| Interest | $ | $ | ||
| Income taxes | $ | $ |
The accompanying notes are an integral part of these condensed consolidated financial statements.
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REFLECT SCIENTIFIC, INC.
Notes to the Condensed Consolidated Financial Statements
March 31, 2022
(Unaudited)
NOTE 1 -
BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s most recent audited consolidated financial statements and notes thereto included in its December 31, 2021 financial statements. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
NOTE 2 -
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND LINE OF BUSINESS:
Reflect Scientific, Inc. (the Company) was incorporated under the laws of the State of Utah on November 3, 1999 as Cole, Inc. The Company was organized to engage in any lawful activity for which corporations may be organized under the Utah Revised Business Corporation Act. On December 30, 2003 the Company changed its name to Reflect Scientific, Inc.
Reflect Scientific designs, develops and sells scientific equipment for the Life Science and Manufacturing industries. The Company’s business activities include the manufacture and distribution of unique laboratory consumables and disposables such as filtration and purification products, customized sample handling vials, electronic wiring assemblies, high temperature silicone, graphite and vespel/graphite sealing components for use by original equipment manufacturers (“OEM”) in the chemical analysis industries, primarily in the field of gas/liquid chromatography.
SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION:The accompanying consolidated financial statements include the accounts of Reflect Scientific, Inc. and its wholly owned subsidiary, Cryometrix. Intercompany transactions and accounts have been eliminated in consolidation.
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USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
REVENUE RECOGNITION: We have applied the new revenue standard to all contracts from the date of initial application. We recognize revenue when or as we satisfy a performance obligation. We generally satisfy performance obligations at a point in time upon shipment of goods or, with our freezers, upon final acceptance of the unit by the customer, in accordance with the terms of each contract with the customer.
A part of our customer base is made up of international customers. The table below allocates revenue between domestic and international customers.
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COST OF SALES: Charges to cost of sales are made on a first-in first-out method (FIFO). In addition to the component costs, some labor costs are allocated to cost of goods for the direct labor utilized to build the sub-assemblies and finished goods.
ACCOUNTS RECEIVABLE: The Company maintains an allowance for doubtful accounts to provide for losses arising from customers’ inability to make required payments. If there is deterioration of our customers’ credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required. The Company estimates allowance for doubtful accounts based on the aged receivable balances and historical losses. The Company charges off uncollectible accounts when management determines there is no possibility of collecting the related receivable. The Company considers accounts receivable to be past due or delinquent based on contractual terms, which is generally net 30 days. At March 31, 2022 and December 31, 2021, the Company had accounts receivable, net of the allowance, of $
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LEASES: In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method.
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INCOME TAXES: Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
STOCK BASED COMPENSATION: The Company, in accordance with ASC 718, Compensation – Stock Compensation, records all share-based payments to employees at the grant-date fair value of the equity instruments issued. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company uses the closing price of the stock, as quoted by NASDAQ, on the date of the grant. The Company believes this pricing method provides the best estimate of fair the fair value of the consideration given. Compensation cost is recognized over the requisite service period.
The Company, in accordance with ASC 718, Compensation – Stock Compensation, establishes the value of equity instruments issued to non-employees for goods and services by using the closing price of the stock, as quoted by NASDAQ, on the date of the grant. The Company believes this method fairly establishes the value of the goods and/or services received.
EARNINGS PER SHARE: The computation of basic profit and loss per share of common stock is based on the weighted average number of shares outstanding during the period. Diluted EPS is computed by dividing net earnings by the weighted-average number of common shares and dilutive common stock equivalents during the period. Common stock equivalents are not used in calculating dilutive EPS when their inclusion would be anti-dilutive. At March 31, 2022 the Company had
NOTE 3 - LEASES
We have operating leases for our office and warehouse facility as well as for an automobile. We used the lease termination dates of
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calculate right of use (“ROU”) assets and lease liabilities.
The following was included in our consolidated condensed balance sheet as of March 31, 2022:
| Leases | As of March 31, 2022 |
| Assets | |
| ROU operating lease assets | $ |
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| Liabilities | |
| Operating lease liabilities - current portion | $ |
| Operating lease liabilities | |
| Total operating lease liabilities | $ |
We recognize lease expense on a straight-line basis over the term of the lease.
| Lease Cost | Three Months Ended March 31, 2022 |
| Operating lease cost | |
| Administrative expenses | $ |
| Rent expense | |
| Total operating lease cost | $ |
Our building lease does not specify an implicit rate of interest. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of March 31, 2022, the following disclosures for remaining lease term and incremental borrowing rates were applicable:
| Supplemental Disclosures | Three Months Ended March 31, 2022 |
| Weighted average remaining lease term | |
| Weighted average discount rate | |
NOTE 4 – INVENTORIES
Inventories are presented net of an allowance for obsolescence and are stated at the lower of cost or market value based upon the average cost inventory method. The Company’s inventory consists of parts for scientific vial kits, refrigerant gases, components for detectors and ultra-low temperature freezers which it builds and other scientific items. At March 31, 2022 and December 31, 2021, the Company had inventory net of allowance, of $
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Inventories consisted of the following at March 31, 2022 and December 31, 2021:
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NOTE 5 - SUBSEQUENT EVENTS
In accordance with ASC 855-10 management reviewed all material events through the date of this report. There are no material subsequent events to report.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Special Note Regarding ForwardLooking Statements
The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor 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 filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance however, that management’s expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:
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Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest;
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Changes in U.S., global or regional economic conditions;
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Changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments;
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Increased competitive pressures, both domestically and internationally;
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Legal and regulatory developments, such as regulatory actions affecting environmental activities;
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The imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls;
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Adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may 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 are illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. The Company believes there have been no other significant changes during the three-month period ended March 31, 2022, to the items disclosed as significant accounting policies in management's Notes to the Financial Statements in the Company's Form 10 for the year ended December 31, 2021.
Plan of Operation and Business Growth
Our efforts continue to be focused on increasing the sales of our life science consumables while, at the same time, working to enhance the design of our liquid nitrogen refrigeration products. Of those liquid nitrogen refrigeration products, the ultra-low temperature freezer is receiving highest priority. We have received positive feedback of the improvements and enhancements made to the design of the ultra-low temperature freezer. We also continue work on the refrigerated trailer, or “reefer.”
We are receiving considerable interest in our latest product introduction, which is an ultra-cold chiller used in the manufacture of CBD oil. This unit improves the efficiency of the manufacturing process and enables the production of a higher purity in the CBD oil produced.
Concurrent with the development and commercialization of the above products, we have completed our on-line catalog and are making progress in enrolling new distributors for our consumable products.
An analysis of operating results for the three months ended March 31, 2022 and 2021 follows.
Results of Operations
Three Months Ended March 31, 2022 and 2021
| | | For the three months ended March 31, | ||||
| | | 2022 | | 2021 | | Change |
| Revenues | $ | 753,576 | $ | 562,362 | $ | 191,214 |
| Cost of goods sold | | 234,289 | | 143,795 | | 90,494 |
| Gross profit | | 519,287 | | 418,567 | | 100,720 |
| Operating expenses | | 312,782 | | 282,064 | | 30,718 |
| Net income (loss) | $ | 206,506 | $ | 247,768 | $ | (41,263) |
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Revenues 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 attributable to a $167,865 increase in the sale of freezers and chillers. Cost of goods increased in the quarter ending March 31, 2022, as compared to March 31, 2021, to $234,289 from $143,795, an increase of $90,494. We realized a gross profit percentage 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 is dependent on the mix of product sales, which varies from quarter to quarter. The increased sale of freezers and chillers during the 2022 period was offset slightly by higher costs, resulting in the slightly lower margins. We continue to actively work to obtain more favorable pricing from our vendors in order to increase the margins realized on all product lines.
Operating expenses were $312,782 for the three months ended March 31, 2022, an increase of $30,718 over the expenses of $282,064 incurred in the three-month period ended March 31, 2021. The increase results from a $33,675 increase in salaries and wages, as we have hired additional personnel to meet the demand for freezers and chillers, and a $16,628 increase in research and development costs, offset in part 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 expenditures are required in order to commercialize the 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 enhancements to the ultra-cold CBD oil chiller continue to be made.
Salaries and wages for the three months ended March 31, 2022 were $170,279, an increase of $33,675 as compared to the expense for the three month period ended March 31, 2021. Additional personnel have been hired in order to enable the company to meet the sales demand for our chillers and freezers.
General and administrative expenses for the three months ended March 31, 2022 were $117,178, a $19,585 decrease from the $136,763 for the same period in 2021. The lower expense level was not the result of significant savings in any one expense category but is, 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 $41,263 decrease from the $282,064 net income for the three-month period ended March 31, 2021. Management continues to look for opportunities to increase sales, improve gross margins and control ongoing operating expenses.
The net income of $206,506 for the three-month period ended March 31, 2022 represents income of $0.00 per share. This compares to net income of $282,064, or $0.00 per share, for the three months ended March 31, 2021.
Seasonality and Cyclicality
We do not believe our business is cyclical.
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Liquidity and Capital Resources
Our cash resources at March 31, 2022, were $1,579,533, with accounts receivable of $233,329, net of allowance, and inventory of $695,607, net of allowance. Our working capital on March 31, 2022, was $2,281,502. Working capital on December 31, 2021 was $2,063,516.
For the three-month period ended March 31, 2022, net cash provided by operating activities was $105,609, which is a decrease of $158,664 over the $264,273 net cash provided by operating activities for the three-month period ended March 31, 2021.
Off-Balance Sheet Arrangements
None.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
Not required.
Item 4. Controls and Procedures
(a)
Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that information required to be disclosed is recorded, processed, summarized and reported within the specified periods, and is accumulated and communicated to management, including our Chief Executive Officer and Principal Financial Officer, to allow for timely decisions regarding required disclosure of material information required to be included in our periodic Securities and Exchange Commission reports. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are not effective at that reasonable assurance level as of the end of the period covered by this report based upon our current level of transactions and staff. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote
(b)
Changes in Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act. Management reviewed our internal controls over financial reporting, and there have been no changes in our internal controls over financial reporting for the three-month period ended March 31, 2022 that have materially affected, or are like to affect, our internal controls over financial reporting.
18
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
None; not applicable.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None; not applicable.
Use of Proceeds of Registered Securities
None; not applicable.
Purchases of Equity Securities by Us and Affiliated Purchasers
During the three months ended March 31, 2022, we have not purchased any equity securities nor have any officers or directors of the Company.
ITEM 3. Defaults Upon Senior Securities
None
ITEM 4. Mine Safety Disclosure
Not applicable.
ITEM 5. Other Information.
None
ITEM 6. Exhibits
(a)
Exhibits.
| Exhibit No. | Title of Document | Location if other than attached hereto |
| Articles of Incorporation | 10-SB Registration Statement* | |
| Articles of Amendment to Articles of Incorporation | 10-SB Registration Statement* | |
| By-Laws | 10-SB Registration Statement* | |
| Articles of Amendment to Articles of Incorporation | 8-K Current Report dated December 31, 2003* | |
| Articles of Amendment to Articles of Incorporation | 8-K Current Report dated December 31, 2003* | |
| Articles of Amendment | September 30, 2004 10-QSB Quarterly Report* | |
| By-Laws Amendment | September 30, 2004 10-QSB Quarterly Report* | |
| Debenture | 8-K Current Report dated June 29, 2007* | |
| Form of Purchasers Warrant | 8-K Current Report dated June 29, 2007* | |
| Registration Rights Agreement | 8-K Current Report dated June 29, 2007* | |
| Form of Placement Agreement | 8-K Current Report dated June 29, 2007* | |
| Securities Purchase Agreement | 8-K Current Report dated June 29, 2007* | |
| Placement Agent Agreement | 8-K Current Report dated June 29, 2007* | |
| Code of Ethics | December 31, 2003 10-KSB Annual Report* | |
| Subsidiaries of the Company | December 31, 2004 10-KSB Annual Report* |
19
| Exhibit No. | Title of Document | Location if other than attached hereto |
| 302 Certification of Kim Boyce |
| |
| 302 Certification of Keith Merrell |
| |
| 906 Certification |
|
Exhibits
Additional Exhibits Incorporated by Reference
| | | |
| * | 8-K Current Report dated December 31, 2003 | |
| * | 8-K Current Report dated April 4, 2006 | |
| * | 8-K Current Report dated September 27, 2006 | |
| * | 8-K Current Report dated November 15, 2006 | |
| * | 8-K Current Report dated November 17, 2006 | |
| * | 8-KA Current Report dated November 17, 2006 | |
| * | 8-KA Current Report dated November 15, 2006 |
* Previously filed and incorporated by reference.
20
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.
Reflect Scientific, Inc.
(Registrant)
Date:
May 13, 2022
By: /s/ Kim Boyce
Kim Boyce, CEO, President and Director
Date:
May 13, 2022
By: /s/ Tom Tait
Tom Tait, Vice President and Director
Date:
May 13, 2022
By: /s/ Kim Boyce___
Kim Boyce, CFO, Principal Financial Officer
21
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kim Boyce certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Reflect Scientific, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Dated: 05/13/2022 Signature:/s/Kim Boyce
Kim Boyce
Chief Executive Officer and Director
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kim Boyce, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Reflect Scientific, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
Dated: 05/13/2022 Signature:/s/Kim Boyce
Kim Boyce
Principal Financial Officer and CFO
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Reflect Scientific, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), We, Kim Boyce, our Chief Executive Officer and director and Kim Boyce, our Chief/Principal Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: 05/13/2022 /s/Kim Boyce
Kim Boyce
Chief Executive Officer and Director
Dated:05/13/2022 /s/Kim Boyce
Kim Boyce
Principal Financial Officer and CFO