Basis of Presentation

Interim Financial Statements

The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2021.

The accompanying financial statements have been prepared using the accrual basis of accounting.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates in these financial statements include the allowance for doubtful receivables, allowance for inventory obsolescence, the estimated useful lives of property and equipment, and stock-based compensation. Actual results could differ from those estimates.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic income (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Dilutive common share equivalents are computed by using the “Treasury Stock Method,” which computes the number of new shares that may potentially be created by unexercised options. Diluted common share equivalents are stock based compensation options. The dilutive common shares derived from stock options are 2,205,473 and 2,241,782, for the three and six months ended June 30, 2022, respectively, are not included in the computation of diluted earnings per share, because to do so would be anti-dilutive.

The following table reconciles the shares outstanding and net income used in the computations of both basic and diluted earnings per share of common stockholders:


	Three Months Ended June 30,					Six Months Ended June 30,
	2022			2021		2022			2021
Net Income (Loss)	$	(1,478,353	)	$	341,085	$	(1,522,803	)	$	108,363
Weighted average shares outstanding during period on which basic earnings per share is calculated		41,615,406			40,692,286		41,615,406			40,692,286
Effect of dilutive shares
Incremental shares under stock-based compensation					2,538,352					2,538,352
Weighted average shares outstanding during period on which diluted earnings per share would be calculated		41,615,406			43,230,638		41,615,406			43,230,638

Earnings per share attributable to common stockholders
Basic earnings per share	$	(0.04	)	$	0.01	$	(0.04	)	$	0.00
Diluted earnings per share	$	(0.04	)	$	0.01	$	(0.04	)	$	0.00

Concentration of Major Customer

Concentration of Major Customer

A significant amount of the revenue is derived from large customers and the government. For the three months ended June 30, 2022, the Company had two (2) customers that accounted for $910,574 or 17.8% and $3,310,128 or 64.6% of revenue, respectively. For the three-month period ended June 30, 2021, the Company had two (2) customers that accounted for $944,509 or 32.4% and $1,071,386 or 36.8% of revenue, respectively. For the six months ended June 30, 2022, the Company had two (2) customers that accounted for $1,826,412 or 19.5% and $5,741,697 or 61.4% of revenue, respectively. For the six-month period ended June 30, 2021, the Company had two (2) customers that accounted for $1,774,644 or 33.4% and $1,664,735 or 31.4% of revenue, respectively.