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<div> <div> <div> <div> <div> <div> Note 1 - Basis of presentation The consolidated balance sheet as of December 31, 2021 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 10, 2022. The consolidated balance sheet as of March 31, 2022 and the consolidated statements of operations and comprehensive income for the three months ended March 31, 2022 and 2021, changes in stockholders' equity for the three months ended March 31, 2022, cash flows for the three months ended March 31, 2022 and 2021, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of March 31, 2022 and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2021 as filed with the Securities and Exchange Commission in the Company's Form 10-K. </div> </div> </div> </div> </div> </div>

<div> <div> <div> Note 2 - Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in first-out (FIFO) method. Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, the Company must make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, the Company utilizes historical experience as well as current market information. The reserve for obsolescence was $129,839 at March 31, 2022 and $116,183 at December 31, 2021. </div> </div> </div>

129839

116183

<div> <div> <div> <div> <div> Note 3 - Operating Leases - Right-of-Use Assets and Lease Liability Obligations The Company has three non-cancelable operating leases, for office and warehousing space, that expires in June 2022 and January 2027, respectively. Rent expense for these operating leases is recognized over the term of the lease on a straight-line basis. A lease for office machinery lapsed on March 31, 2022. Below is a summary of the Company's Operating Right-of-Use Assets and Operating Lease liabilities as of March 31, 2022 and December 31, 2021: </div> </div> </div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:80%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> </tr> </table> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:80%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2022</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2021</td> <td style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Assets</td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Operating lease ROU assets</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right">1,393,213</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Liabilities</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:12%;text-align:right"> </td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:12%;text-align:right"> </td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Operating lease liabilities, current</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">279,148</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">318,621</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Operating lease liabilities, net of current portion</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:12%;text-align:right">1,008,801</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:12%;text-align:right">1,074,592</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff;padding-left:5.4pt">Total operating lease liabilities</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">1,393,213</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div> </div> </div> </div> </div> </div> <div> <div> During the three months ended March 31, 2022 and 2021 the Company recognized $99,318 and $54,149, respectively, in operating lease expenses, which are included in office lease and expenses in the Company's consolidated statements of operations and comprehensive income. Generally, the Company's lease agreements do not specify an implicit rate. Therefore, the Company estimates the incremental borrowing rate, which is defined as the interest rate the Company 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, and December 31, 2021 the following disclosures for the remaining lease terms and incremental borrowing rates were applicable: </div> </div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt"> <tr> <td style="border-bottom:1.5pt solid #000000">Supplemental disclosure</td> <td style="text-align:center;border-bottom:1.5pt solid #000000">March 31, 2022</td> <td style="text-align:center;border-bottom:1.5pt solid #000000">December 31, 2021</td> </tr> <tr> <td style="background-color:#e6efff">Weighted average remaining lease term</td> <td style="text-align:center;background-color:#e6efff">5 years</td> <td style="text-align:center;background-color:#e6efff">5 years</td> </tr> <tr> <td>Weighted average discount rate</td> <td style="text-align:center">4.08%</td> <td style="text-align:center">4.08%</td> </tr> </table> </div> </div> <div/> Maturities of lease liabilities as of March 31, 2022 were as follows: <div> <div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;white-space:nowrap">Year ended December 31,</td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom;white-space:nowrap;width:15%">Amounts under Operating Leases</td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Remaining 2022</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">216,472</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2023</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:15%;text-align:right">273,449</td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2024</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">281,664</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2025</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:15%;text-align:right">290,098</td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2026</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">298,791</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2027</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:15%;text-align:right">25,455</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Total minimum lease payments</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">1,385,929</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Less: amount representing interest</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:15%;text-align:right">(97,980</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left">)</td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Total operating lease liabilities</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div> </div> Supplemental cash flow information for the three months ended March 31, 2022 and 2021 are as follows: <div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">Three months</td> <td style="text-align:center;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">Three months</td> <td style="text-align:center;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">ended March 31,</td> <td style="text-align:center;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">ended March 31,</td> <td style="text-align:center;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:14.0391%;white-space:nowrap">2022</td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:14.0391%;white-space:nowrap">2021</td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;background-color:#e6efff">Cash paid for amounts included in the measurement of lease liabilities</td> <td style="vertical-align:bottom;width:0.920598%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right;background-color:#e6efff">82,817</td> <td style="vertical-align:bottom;width:2.07135%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1.03567%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right;background-color:#e6efff">59,285</td> <td style="vertical-align:bottom;width:1.95627%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%">Right-of-use assets obtained in exchange for lease obligations</td> <td style="vertical-align:bottom;width:0.920598%;text-align:left">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right">-</td> <td style="vertical-align:bottom;width:2.07135%;text-align:left"> </td> <td style="vertical-align:bottom;width:1.03567%;text-align:left">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right">15,170</td> <td style="vertical-align:bottom;width:1.95627%;text-align:left"> </td> </tr> </table> </div> </div> </div> </div> </div>

<table border="0" cellpadding="0" cellspacing="0" style="width:80%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> </tr> </table> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:80%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2022</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2021</td> <td style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Assets</td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Operating lease ROU assets</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right">1,393,213</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Liabilities</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:12%;text-align:right"> </td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:12%;text-align:right"> </td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Operating lease liabilities, current</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">279,148</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">318,621</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Operating lease liabilities, net of current portion</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:12%;text-align:right">1,008,801</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:12%;text-align:right">1,074,592</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff;padding-left:5.4pt">Total operating lease liabilities</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:12%;text-align:right;background-color:#e6efff">1,393,213</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div>

1287949

1393213

279148

318621

1008801

1074592

1287949

1393213

99318

54149

<div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt"> <tr> <td style="border-bottom:1.5pt solid #000000">Supplemental disclosure</td> <td style="text-align:center;border-bottom:1.5pt solid #000000">March 31, 2022</td> <td style="text-align:center;border-bottom:1.5pt solid #000000">December 31, 2021</td> </tr> <tr> <td style="background-color:#e6efff">Weighted average remaining lease term</td> <td style="text-align:center;background-color:#e6efff">5 years</td> <td style="text-align:center;background-color:#e6efff">5 years</td> </tr> <tr> <td>Weighted average discount rate</td> <td style="text-align:center">4.08%</td> <td style="text-align:center">4.08%</td> </tr> </table> </div> </div>

P5Y

0.0408

<div> <div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;white-space:nowrap">Year ended December 31,</td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom;white-space:nowrap;width:15%">Amounts under Operating Leases</td> <td style="border-bottom:0.75pt solid #000000;text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Remaining 2022</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">216,472</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2023</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:15%;text-align:right">273,449</td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2024</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">281,664</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2025</td> <td style="vertical-align:bottom;width:1%;text-align:left"> </td> <td style="vertical-align:bottom;width:15%;text-align:right">290,098</td> <td style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2026</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">298,791</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2027</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:15%;text-align:right">25,455</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Total minimum lease payments</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">1,385,929</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Less: amount representing interest</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left">$</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:15%;text-align:right">(97,980</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left">)</td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Total operating lease liabilities</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:15%;text-align:right;background-color:#e6efff">1,287,949</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div> </div> </div>

216472

273449

281664

290098

298791

25455

1385929

97980

1287949

<div> <div> <div> <div> <table border="0" cellpadding="0" cellspacing="0" style="width:100%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">Three months</td> <td style="text-align:center;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">Three months</td> <td style="text-align:center;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">ended March 31,</td> <td style="text-align:center;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;width:14.0391%;white-space:nowrap">ended March 31,</td> <td style="text-align:center;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:0.920598%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:14.0391%;white-space:nowrap">2022</td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2.07135%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1.03567%;white-space:nowrap"> </td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:14.0391%;white-space:nowrap">2021</td> <td style="text-align:center;border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1.95627%"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%;background-color:#e6efff">Cash paid for amounts included in the measurement of lease liabilities</td> <td style="vertical-align:bottom;width:0.920598%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right;background-color:#e6efff">82,817</td> <td style="vertical-align:bottom;width:2.07135%;text-align:left;background-color:#e6efff"> </td> <td style="vertical-align:bottom;width:1.03567%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right;background-color:#e6efff">59,285</td> <td style="vertical-align:bottom;width:1.95627%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom;width:65.9379%">Right-of-use assets obtained in exchange for lease obligations</td> <td style="vertical-align:bottom;width:0.920598%;text-align:left">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right">-</td> <td style="vertical-align:bottom;width:2.07135%;text-align:left"> </td> <td style="vertical-align:bottom;width:1.03567%;text-align:left">$</td> <td style="vertical-align:bottom;width:14.0391%;text-align:right">15,170</td> <td style="vertical-align:bottom;width:1.95627%;text-align:left"> </td> </tr> </table> </div> </div> </div> </div> 82817 59285

15170

<div> <div> <div> <div> Note 4 - Revolving line of Credit facility On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two-Eleven Distribution, LLC. On March 1, 2021, the Company executed an amendment to the line of credit. The amendment took retroactive effect to February 17, 2021 and extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment agreement for the line of credit to extend the line of credit facility through February 28, 2023, and to replace interest determined by LIBOR daily Floating Rate with the Bloomberg short-term Bank Yield Index Rate. As of March 31, 2022, and December 31, 2021, respectively there were no advances of the line of credit leaving $1,500,000 and $1,500,000 available for advances. </div> </div> </div> </div>

1000000

interest at the LIBOR Daily Floating Rate plus 2.5 percentage points

0.025

at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points.

1500000

<div> <div> <div> Note 5 - Short-term Loan The Company carries product liability insurance policies with a U.S. and South African-based insurance carrier. The Company finances payment of both of its product liability insurance premiums over the period of coverage which is generally twelve months. The U.S. short-term loan is payable in monthly installments of $102,078 over eleven months including interest at 4.650% and the South African short-term loan is payable in monthly installments of $6,414, over a ten-month period at a flat interest rate of 3.10%. <div/> The Company carries various short-term insurance policies in the U.S. The Company finances payment of its short-term insurance premiums over the period of coverage, which is generally twelve months. The short-term loan is payable in eleven payments of $19,860 at 4.350% annual interest rate. </div> </div> </div>

102078

0.04650

6414

0.0310

19860

0.04350

<div> Note 6 - Note payable Two Eleven entered into a Note Payable with a bank effective December 17, 2021 in the principal amount of $272,519, secured by equipment. The Note is payable in 36 consecutive monthly installments of $7,990, including interest at a fixed rate of 3.5370%, commencing February 5, 2022, and continuing to January 5, 2025. As of March 31, 2022 and December 31, 2021, the amounts of $258,125 and $272,519 were outstanding, respectively. <table border="0" cellpadding="0" cellspacing="0" style="width:70%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap">March 31,</td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="1" style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="2" style="vertical-align:bottom;text-align:center;white-space:nowrap">December 31,</td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap">2022</td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="1" style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="2" style="vertical-align:bottom;text-align:center;white-space:nowrap">2021</td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom">Liabilities</td> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td colspan="1" style="vertical-align:bottom"> </td> <td colspan="2" style="vertical-align:bottom"> </td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Note payable, current</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">88,168</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">83,270</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Note payable, net off current portion</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:17%;text-align:right">169,957</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:17%;text-align:right">189,249</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">258,125</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">272,519</td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> Principal maturities of note payable as of March 31, 2022 were as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;font-size:10pt;width:70%;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap">Year ended December 31,</td> <td colspan="1" style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td colspan="2" style="text-align:center;vertical-align:bottom;white-space:nowrap">Amounts under Notes Payable</td> <td colspan="1" style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Remaining 2022</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">65,834</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2023</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right">90,535</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2024</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">93,790</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2025</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:32%;text-align:right">7,966</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">258,125</td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table> </div>

272519

P36M 7990

0.035370

258125

272519

<table border="0" cellpadding="0" cellspacing="0" style="width:70%;border-collapse:collapse;font-size:10pt;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap">March 31,</td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="1" style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="2" style="vertical-align:bottom;text-align:center;white-space:nowrap">December 31,</td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap">2022</td> <td style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="1" style="vertical-align:bottom;text-align:center;white-space:nowrap"> </td> <td colspan="2" style="vertical-align:bottom;text-align:center;white-space:nowrap">2021</td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom">Liabilities</td> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td colspan="1" style="vertical-align:bottom"> </td> <td colspan="2" style="vertical-align:bottom"> </td> <td colspan="1" style="vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Note payable, current</td> <td style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">88,168</td> <td style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">83,270</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Note payable, net off current portion</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:17%;text-align:right">169,957</td> <td style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:17%;text-align:right">189,249</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">258,125</td> <td style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:17%;text-align:right;background-color:#e6efff">272,519</td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table>

88168

83270

169957

189249

258125

272519

<table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;font-size:10pt;width:70%;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap">Year ended December 31,</td> <td colspan="1" style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td colspan="2" style="text-align:center;vertical-align:bottom;white-space:nowrap">Amounts under Notes Payable</td> <td colspan="1" style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Remaining 2022</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">65,834</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2023</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right">90,535</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">2024</td> <td colspan="1" style="vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff"> </td> <td colspan="2" style="vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">93,790</td> <td colspan="1" style="vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">2025</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:1%;text-align:left"> </td> <td colspan="2" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:32%;text-align:right">7,966</td> <td colspan="1" style="border-bottom:0.75pt solid #000000;vertical-align:bottom;width:2%;text-align:left"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff"> </td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:1%;text-align:left;background-color:#e6efff">$</td> <td colspan="2" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:32%;text-align:right;background-color:#e6efff">258,125</td> <td colspan="1" style="border-bottom:2.25pt double #000000;vertical-align:bottom;width:2%;text-align:left;background-color:#e6efff"> </td> </tr> </table>

65834

90535

93790

7966

258125

<div> <div> Note 7 - Revenue and Cost Recognition </div> <div> <div> The Company's products are sold worldwide to a global network of distributors and dealers, and directly to consumers when there are no dealers or distributors in their geographic area or where consumers choose to purchase directly via the Company's e-commerce website (collectively the "customers"). Revenues from product sales are recognized when earned, net of applicable provisions for discounts and returns and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized when our performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. The Company's standard distributor payment terms range from pre-payment in full to 60 days after shipment and subsequent sales of our products by distributors have no effect on the amount and timing of payments due to us, however, in limited instances qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, we utilize historical experience, sales performance, and credit risk requirements. Furthermore, products purchased by distributors may not be returned to us in the event that any such distributor relationship is terminated. Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when there is no dealer in the geographic area or the consumer chooses to purchase directly from the Company's e-commerce website and the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty. <div/> International sales (other than in the United States and South Africa) are generally drop-shipped directly from the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned and exchanged due to product quality issues. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in material product returns. Cost of revenues also includes royalty fees associated with sales of Leatt-Brace products. Product royalty income is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. In the following table, revenue is disaggregated by the source of revenue: <div> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;font-size:10pt;width:100%;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td colspan="1" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom;white-space:nowrap"> </td> <td colspan="10" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom;white-space:nowrap">Three months ended March 31,</td> <td colspan="1" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap;padding-left:5.4pt"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2022</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">% of Revenues</td> <td style="text-align:center;vertical-align:bottom;border-right:1.5pt solid #000000;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap;padding-left:5.4pt"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2021</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">% of Revenues</td> <td style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Consumer and athlete direct revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt">$</td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">595,479</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">2%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt">$</td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">570,701</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">5%</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Dealer direct revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">5,003,608</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">21%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">5,566,732</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">43%</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">International distributor revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">18,629,021</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">77%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">6,759,042</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">52%</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%;padding-left:5.4pt">$</td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">24,228,108</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">100%</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%;padding-left:5.4pt">$</td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">12,896,475</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">100%</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> </tr> </table> </div> The Company reviews the reserves for customer returns at each reporting period and adjusts them to reflect data available at that time. To estimate reserves for returns, the Company estimates the expected returns and claims based on historical rates as well as events and circumstances that indicate changes to historical rates of product returns and claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. The provision for estimated returns at March 31, 2022 and December 31, 2021 was $0, and $0, respectively. Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to substantially all distributors on an unsecured basis. The Company continuously monitors collections and payments from customers and maintains an allowance for doubtful accounts receivable based upon the expected credit losses determined utilizing historical experience and any specific customer collection issues that have been identified. In determining the amount of the allowance, the Company is required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after the Company used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates as in the past. A significant change in the liquidity or financial position of any of the Company's significant customers could have a material adverse effect on the collectability of the Company's accounts receivable and future operating results. The allowance of doubtful accounts was $306,110 at March 31, 2022 and $291,584 at December 31, 2021. Sales commissions are expensed when incurred, which is generally at the time of sale, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expense in the accompanying consolidated statements of operations and comprehensive income. Shipping and handling activities associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are included in revenues and cost of revenues in the accompanying consolidated statements of operations and comprehensive income. Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities. </div> </div> </div>

0.01

<div> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;font-size:10pt;width:100%;border-color:#000000"> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td colspan="1" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom;white-space:nowrap"> </td> <td colspan="10" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom;white-space:nowrap">Three months ended March 31,</td> <td colspan="1" style="text-align:center;border-bottom:1.5pt solid #000000;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap;padding-left:5.4pt"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2022</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">% of Revenues</td> <td style="text-align:center;vertical-align:bottom;border-right:1.5pt solid #000000;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap;padding-left:5.4pt"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">2021</td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap"> </td> <td style="text-align:center;vertical-align:bottom;white-space:nowrap">% of Revenues</td> <td style="text-align:center;vertical-align:bottom"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">Consumer and athlete direct revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt">$</td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">595,479</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">2%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt">$</td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">570,701</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">5%</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom">Dealer direct revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">5,003,608</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">21%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">5,566,732</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;vertical-align:bottom;width:12%">43%</td> <td style="text-align:left;vertical-align:bottom;width:2%"> </td> </tr> <tr> <td style="vertical-align:bottom;background-color:#e6efff">International distributor revenues</td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">18,629,021</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">77%</td> <td style="text-align:left;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff;padding-left:5.4pt"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">6,759,042</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> <td style="text-align:left;vertical-align:bottom;width:1%;background-color:#e6efff"> </td> <td style="text-align:right;vertical-align:bottom;width:12%;background-color:#e6efff">52%</td> <td style="text-align:left;vertical-align:bottom;width:2%;background-color:#e6efff"> </td> </tr> <tr> <td style="vertical-align:bottom"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%;padding-left:5.4pt">$</td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">24,228,108</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">100%</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%;border-right:1.5pt solid #000000"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%;padding-left:5.4pt">$</td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">12,896,475</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:1%"> </td> <td style="text-align:right;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:12%">100%</td> <td style="text-align:left;border-bottom:1.5pt solid #000000;vertical-align:bottom;width:2%"> </td> </tr> </table> </div>

595479

0.02

570701

0.05

5003608

0.21

5566732

0.43

18629021

0.77

6759042

0.52

24228108

12896475

306110

291584

<div> <div> <div> <div> <div> <div> <div> <div> Note 8 - Income Taxes The Company uses the asset and liability approach to account for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes included taxes currently payable, if any, plus the net change during the period in deferred tax assets and liabilities recorded by the Company. The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes ("Standard"), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of March 31, 2022, the Company has no unrecognized tax benefits. </div> </div> </div> </div> </div> </div> </div> </div>

0.50

<div> <div> <div> <div> <div> Note 9 - Net Income Per Share of Common Stock Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common stock shares and dilutive potential common shares outstanding during the period. For the three months ended March 31, 2022, the Company had 510,000 potential common shares, consisting of 120,000 preferred shares, and options to purchase 390,000 shares, outstanding that were dilutive. </div> </div> </div> </div> </div>

510000

120000

390000

78000

40000

82530

120240

360720

<div> <div> <div> <div> <div> Note 11 - Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements - In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2021-10 Government Assistance (Topic 832): "Disclosures by Business Entities About Government Assistance," which requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution model by analogy. The standard is effective for annual periods beginning after December 15, 2021. The Company adopted the standard effective January 1, 2022. The adoption of the standard had no impact on the Company's consolidated financial statements. Accounting Pronouncements Not Yet Adopted - The Company evaluated all ASU's issued by the FASB for consideration of their applicability. ASU's not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company's consolidated financial statements. </div> </div> </div> </div> </div>

Recently Adopted Accounting Pronouncements - In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2021-10 Government Assistance (Topic 832): "Disclosures by Business Entities About Government Assistance," which requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution model by analogy. The standard is effective for annual periods beginning after December 15, 2021. The Company adopted the standard effective January 1, 2022. The adoption of the standard had no impact on the Company's consolidated financial statements.

Accounting Pronouncements Not Yet Adopted - The Company evaluated all ASU's issued by the FASB for consideration of their applicability. ASU's not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company's consolidated financial statements.

<div> <div> <div> <div> <div> <div> <div> <div> Note 12 - Litigation In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that the liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company. </div> </div> </div> </div> </div> </div> </div> </div>

<div> <div> <div> <div> <div> Note 13 - Risks and Uncertainties As the COVID-19 pandemic continues to evolve, the Company believes the extent of the impact to its operations will be primarily driven by the severity and duration of the pandemic, the pandemic's impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. Due to strong consumer demand for outdoor product categories, the Company did not see any significant material negative impact of COVID-19 on the Company's results of operations for the quarter ended March 31, 2022. The Company remains cautiously optimistic that ongoing efforts to increase the availability of new COVID-19 vaccines worldwide will mitigate the spread of the virus throughout Europe and the U.S. (our largest markets) and bring about an end to global quarantines. The continued mutation and spread of the virus, economic headwinds caused by global quarantines or the occurrence of any other catastrophic events, could have a negative impact on sales revenue for the coming periods and beyond. </div> </div> </div> </div> </div>

<div> <div> Note 14 - Subsequent Events The Company has evaluated all subsequent events through the date the financial statements were released. On February 24, 2022, the Company entered into a new lease agreement for warehousing space in South Africa, commencing on April 1, 2022 and expiring in August 2023. The lease agreement requires the Company to pay monthly rent of $1,769 for the first eleven months and $1,910 for the following six months. The Company expects to recognize an operating lease right-of-use asset and operating lease liability of $26,372 and $26,372 as of the effective date of the lease. The estimated interest rate for this lease agreement as of April 1, 2022 is 3.750%. </div> </div>

1769

1910

26372

0.03750