REFLECT SCIENTIFIC, INC. [RSCF] Filings

10-K 1 rscf-20231231.htm ANNUAL REPORT ON FORM 10K FOR THE YEAR ENDED DECEMBER 31, 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File No. 000-31377

REFLECT SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

Utah		87-0642556
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1266 South 1380 West, Orem, UT		84058
(Address of principal executive offices)		(Zip Code)

(801) 226-4100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: $0.01 par value common stock.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions 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 ☐
Non-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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s common shares held by non-affiliates (based upon the closing price of such shares as reported on OTC Bulletin Board of the National Association of Securities Dealers, Inc.) was approximately $2.9 million. Shares held by each executive officer and director and by each person who owns 10% or more of the outstanding common shares have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of March 26, 2024, there were a total of 85,664,086 common shares of the registrant issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

A description of “Documents Incorporated by Reference” is contained in Part IV, Item 15, of this Annual Report.

REFLECT SCIENTIFIC, INC.

Annual Report on Form 10-K

Year Ended December 31, 2023

TABLE OF CONTENTS

PART I

Item 1.	Business	4
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	10
Item 1C.	Cybersecurity	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosure	10

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Reserved	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A	Quantitative and Qualitative Disclosure about Market Risk	16
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	16
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	17
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	18

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	18
Item 11.	Executive Compensation	20
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	21
Item 13.	Certain Relationships and Related Transactions, and Director Independence	22
Item 14.	Principal Accounting Fees and Services	22

PART IV

Item 15.

Exhibits and Financial Statement Schedules

Forward-Looking Statements

When used in this Annual Report on Form 10-K, the words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements specifically include, but are not limited to, our expectations regarding strategic business initiatives, our intentions to defend our intellectual property rights, continue our research and development, seek regulatory approvals and plans regarding sales and marketing.

We caution readers not to place undue reliance on the forward-looking statements, which speak only as of the date of this Annual Report, are based on certain assumptions and expectations which may or may not be valid or actually occur and which involve various risks and uncertainties, including but not limited to competitive products and pricing, difficulties in product development, commercialization and technology, changes in the regulation of life science products, or other necessary approvals to sell future products and other risk described elsewhere herein. If and when sales of our new product lines commence, sales may not reach the levels anticipated. As a result, our actual results for future periods could differ materially from those anticipated or projected. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

PART I

Item 1. Description of Business

Business Development

History

Reflect Scientific, Inc., a Utah corporation (the “Company,” “we,” “our,” “us” and words of similar import), was organized under the laws of the State of Utah on November 3, 1999, under the name “Cole, Inc.” On December 30, 2003, we acquired Reflect Scientific, Inc., a California corporation. We changed our name to “Reflect Scientific, Inc.” and succeeded to the business operations of our wholly-owned subsidiary, that involved 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.

On November 29, 2005, we announced the execution of a Letter of Intent to acquire Cryomastor Corporation, a California corporation (“Cryomastor” [sometimes called “Cryometrix,” its amended name]).

Effective as of April 4, 2006, we entered into a Purchase Agreement (the “JMST Agreement”) with JM SciTech, LLC, a limited liability company organized under the laws of the State of Colorado, and doing business as JMST Systems (“JMST”); David Carver, an individual (“Carver”); and Julie Martin, an individual (“Martin”) (JMST, Carver and Martin are sometimes hereinafter referred to collectively as “Sellers”). Pursuant to the JMST Agreement, we purchased and JMST sold all right, title and interest in and to the JMST Technology (the “JMST Technology”), as described in the JMST Agreement; and Carver conveyed and assigned any rights he had in and to certain patents (the “Carver Patents”) and related intellectual assets as described in the JMST Agreement (collectively, including the Carver Patents, referred to herein as the “Carver Technology”). JMST had created a line of chemical detection instruments that are used in the pharmaceutical, biotechnology and homeland security markets. The patented technology allows researchers to accurately analyze chemical formulations for their composition and identity.

On June 27, 2006, we completed the acquisition of Cryomastor pursuant to an Agreement and Plan of Merger (the “Cryomastor Merger Agreement”), which became our wholly-owned subsidiary; changed its name to “Cryometrix, Inc.”;

and succeeded to its business operations, which involved the manufacture and sale of ultra-low temperature freezer systems powered by liquid nitrogen for use in bio-repositories associated with the biotech andpharmaceutical industries, as well as government facilities, universities and many other diverse applications that require a large number of reliable and energy efficient freezers.

Our Business

Overview

Reflect Scientific is engaged in the manufacture and distribution of innovative products targeted at the life science market. Our customers include hospitals, diagnostic laboratories, pharmaceutical and biotech companies, cold chain management, universities, government and private sector research facilities, chemical and industrial companies.

Our goal is to provide our customers with the best solution for their needs. This philosophy extends into our business strategies and acquisition plans. Through a series of strategic acquisitions, we acquired technology that has enabled us to expand our line of products to align with, and capitalize on, market needs. Our growing product portfolio includes ultra-low temperature freezers, blast freezers, solvent chillers and refrigerated transportation in addition to supplying OEM products to the life sciences industry.

Our Cryometrix brand ultra-low temperature and blast freezers innovative design enables our customers to save substantially on energy costs related to cryogenic storage. Ultra-low temperature freezers are used worldwide for the storage of vaccines, DNA, RNA, proteins and many other biological and chemical substances. There is a growing need for energy efficient, reliable ultra-low temperature storage units. Our Cryometrix freezers are targeted to this growing market and we have had tremendous success in blood storage and pharmaceutical manufacturing applications. The application of this technology for use in refrigerated trailers (commonly called “reefers”) used to transport goods which need to be maintained in a cold environment significantly broadens the market for this technology. The utilization of this technology in reefers eliminates the current method of cooling, which uses engines run on hydrocarbon fuels. The Cryometrix technology is pollutant free and is more efficient and cost effective than the technologies currently used. Reflect Scientific has added a new product line of solvent chillers. Solvent chillers are used in natural products extraction for optimizing product yield and purity.

Products

Reflect Scientific designs, develops and sells scientific equipment for the life sciences and manufacturing industries. Since Reflect Scientific’s inception in 1993, our focus is and has been on providing value added products, analytic testing supplies and equipment, and stand-alone products for the life sciences and industrial marketplace. ReflectScientific’s products range from non-mechanical Cyrometrix™ freezers and value-added products and components for the life sciences industry to tools and analytical services for industrial manufacturing.

Our Cryometrix freezers use an entirely different technology for cooling that requires far less power and has significantly fewer moving parts. Less power consumption and fewer parts (i.e., less chance for wear or malfunction) translates into an immediate realization of cost savings to the customer. Management believes that there is no mechanical freezer that can match the temperature uniformity and rapid cooling of our Cryometrix freezer. These attributes are why these freezers are being sold into the pharmaceutical market – they meet customer needs that cannot be fulfilled by current freezer technology.

All of Reflect Scientific’s products and services are developed with one key factor in mind: Providing a superior cost/benefit to the customer verses other products in the same market space. With years of experience in the life science and industrial manufacturing markets, Reflect Scientific has been able to develop not only unique patentable products, but products that we believe offer a superior value proposition to the customer.

We have developed a business model with a focus on excellence in the design and development of products and solutions for life science and industrial manufacturing industries. We outsource the majority of our manufacturing, allowing us to concentrate our efforts on product innovation across multiple lines and industries. Our strength is in developing and providing value added products which we believe offer immediate and verifiable benefits and cost saving solutions.

We have found a number of companies that can manufacture products to our specification, allowing us to focus on our core competencies of development and design, and maintain a flexible corporate structure capable of taking advantage of new opportunities without the large capital investment required to acquire tooling and manufacturing equipment. Our focus on development and design expertise, as opposed to manufacturing of products, enables us to innovate along multiple industry lines and customize our products to meet specific needs in a variety of industrial settings. Our products are sold in the biotechnology, natural products, pharmaceutical, cold chain management and medical industries, as well as manufacturing industries, such as automotive.

Cryometrix Freezers

Our Cryometrix ultra-low temperature and blast freezers are, we believe, a technological breakthrough that provides energy savings and other critically important benefits to cryo-storage customers in the life science related industries. Ultra-low temperature and blast freezers are used in many applications for the storage and fast freezing protocols of everything from blood to cancer vaccines. These types of freezers are used by hospitals and biotechnology research facilities.

The only ultra-low temperature freezers currently available are produced by a limited number of companies and rely on a mechanical process for cooling. Because of inadequacies in the mechanical process, we believe there is loss of inventory each year because of the problems related to reliability inherent with mechanical freezers.

Our freezers incorporate a disruptive technology. They are based on a complete divergence from the technology currently used in ultra-low temperature freezers. Through the advantages of our technology, we believe our freezers solve the current inadequacies and provide immediate cost savings and reliability for our clients. Current cryogenic storage equipment falls short of customer expectations in a variety of key performance criteria.

* High energy usage – a growing problem with rising energy costs

Inflexible temperature range control– existing units cannot be easily modified for colder requirements (colder temperatures are an industry trend)

* Sample inventory is at risk in the event of a power failure

Poor temperature uniformity –samples in different areas of the freezer can experience wide variations in temperatures which is undesirable from a regulatory standpoint.

* Frost build-up

Our Cryometrixultra low temperature and blast freezer uses a patented design and technology which is powered by liquid nitrogen. Through the use of a liquid nitrogen powered freezer system we are able to address the market need for:

* Low energy requirements

* Flexible temperature control – wide range of usable temperatures

* Power failures have little effect - uses passive liquid nitrogen technology rather than electrically powered compressors.

* Uniform temperatures throughout freezer – more usable storage volume

* Much larger storage volume per area of floor space occupied – reduced facilities cost

* Reliable and essentially maintenance free, further lowering cost of ownership

* Environmental issues related to pollution using the current refrigerated trailer (“reefer”) technology

Cryometrix freezers are powered by liquid nitrogen. The competition’s freezers, including those developed by Thermo Fisher Scientific and Sanyo Corporation, are compressor based, with hydrofluorocarbon (HFC) refrigerants and electric compressors. This basic technology difference results in the following Cryometrix advantages:

The Cryometrixfreezer cooling medium is nitrogen, an all-green element that makes up 78% of our atmosphere. Many competitors use refrigerants that are harmful to the environment.

Cryometrix freezers cool extremely fast compared to the competition. One particular Cryometrix freezer will cool to -80C in eight minutes, an order of magnitude faster than the competition.

The inherent Cryometrix technology provides a much more uniform temperature throughout the freezer than competitors’ compressor-based freezers.

When power is lost, the competitors’ freezers immediately fail to operate. Cryometrix freezers, when placed in manual freezing mode, continue to maintain a cold temperature for days and even weeks.

Cryometrixfreezers are more reliable than the competition. Those well-versed in mean time between failure analysis calculate potential failures mainly based on the number of moving parts. Compressor-based freezers have many moving parts and are not as reliable in theory or in practice as Cryometrix freezers, which have almost no moving parts.

The adaptation of the freezer technology to reefers for transporting perishable items opens a significant new market. Trailers can easily be retrofitted with the Cryometrix unit, which operates pollution free, more efficiently, and provides a cost savings compared to the diesel-powered units currently used. The non-polluting Cryometrix unit provides significant benefits over any other unit currently marketed.

A new development using a similar liquid nitrogen cooling technology is the solvent chiller. Solvent chillers are used for providing chilled solvent for extracting a final commercial product from plant materials. The extraction solvent is rapidly chilled to a temperature that will optimize the extraction purity and recovery of the final product of interest. Solvent chillers are currently being sold into the CBD extraction market.

Other Products

In addition to our Cryometrix freezers, we market our Visacon OEM products, LCGCVials.com vial products, GCFerules.com OEM GC consumable products, and HPLC Detectors.com UV detector products into the chromatography market. These are highly technical products and encompass a vast array of sizes, configurations and uses. These products represent a stable supplies business but they do not represent a significant growth opportunity for the Company.

Competition

The environment for our products and services is intensely competitive. Although the complexity of the products we produce limits the number of companies we compete with, the companies with competing technology are generally larger and often subsidiaries or divisions of very large multinational companies. Our competitor’s size and association with large multinational companies gives them advantages over us in the ability to access potential customers. Many potential customers already purchase products either directly from our competitors or from another subsidiary of these large multinational companies, creating natural inroads to sales that we do not possess.

Given our relative size versus our competitors, we are often required to seek niche markets for our products or focus on selling consumable components to be used by our competitors. We believe, however, that our technology and experience in the ultra-low freezers space allows us to be competitive in those markets. As our ultra-low freezer products are new to the marketplace, the products long term commercial acceptance is still unknown. Most of our products compete against

multiple competitors, with our refrigeration products competing primarily against Thermo Fisher Scientific and Sanyo Corporation. Although our Cryometrix freezer products are considered to be in theultra-cold freezer market space, we do not believe that they compete directly with freezer products sold by these companies because ourCryometrix freezers use a completely different technology, liquid nitrogen cooling, to achieve very fast cooling rates and stable settemperatures. Freezer products sold by Thermo Fisher Scientific and Sanyo Corporation cannot achieve the same rates of cooling. OurCryometrix freezers compete with other ultra-cold freezer products based on technical merit – their ability to meet freezing parametersultra-cold freezer market space, we do not believe that they compete directly with freezer products sold by these companies because our Cryometrix freezers use a completely different technology, liquid nitrogen cooling, to achieve very fast cooling rates and stable set temperatures. Freezer products sold by Thermo Fisher Scientific and Sanyo Corporation cannot achieve the same rates of cooling. For additional disclosure about our Cryometrix products, see the discussion under the subheading “Cryometrix Freezers” above.

The product lines other than our Cryometrix freezers face competition from many laboratory supply companies, with Thermo Fisher Scientific being by far the largest. We estimate our market share in this segment to be well under five percent. However, because of the OEM nature of much of our chromatography business, we sell to several of the large chromatography supply companies.

Growth Plan

While we will continuously evaluate acquisitions of businesses and technologies to grow our revenues in the life science and green technology markets, our primary focus will be the continued growth of our own product lines through increasing market share and the addition of new innovative products to enhance our current offerings.

We seek to expand the applications for our products and equipment into additional markets as we develop brand recognition. We hope to be able to obtain market leverage from our existing products and name recognition as we use our existing offerings and product strengths to position us as a key supplier of cryogenic storage, blast freezing and cold chain management solutions. This strategic plan will also enable us to further diversify our customer base.

Manufacturing, Supplies, and Quality Control

Many of our products are manufactured by strategic selection of third-party manufacturers. By outsourcing our manufacturing, we are able to reduce the overall cost position of our products. We manufacture our lower volume products that are less labor and parts intensive in our facility in Orem, Utah.

In addition, we engage in light manufacturing (assembly, filling and repackaging) for many of our chromatography supplies. We also do the final assembly and design for our Cryometrix brand freezers. The freezer shells, doors, shelving, heat exchangers and electronics are produced by contracted vendors. We sell directly to OEM customers and end users.

Regulation and Environmental Compliance

Presently, none of our products are in highly regulated industries.

Sources and Availability of Raw Materials and Names of Principal Suppliers

Sources and availability of key materials and intermediates continue to remain stable. Where supply is considered a critical success factor for our business, we have certified primary vendors in place and have identified secondary vendors.

Dependence on One or a Few Major Customers

We have four major customers who represented 35 percent and 51 percent of our sales volume in 2023 and 2022, respectively. In our 2023 fiscal year, these customers represented 17 percent;7 percent; 6 percent; and 4 percent of our revenues, respectively.

Our customers purchase our products via purchase orders describing the quantity and price of the products being purchased in a given transaction.  The Company has strong relationships with each of its customers and does not believe this concentration poses a significant risk due to those long-term relationships and the uniqueness of the products they purchase from us.

Need for any Governmental Approval of Principal Products or Services

No products presently being manufactured or sold by us are subject to prior governmental approvals.

Effect of Existing or Probable Governmental Regulations on the Business

Our Registration Statement on Form 10, as amended, was initially filed on March 30, 2021, which became effective 60 days after filing with the Securities and Exchange Commission, our securities are registered pursuant to Section 12(g) of the Exchange Act. Issuers with securities registered under Section 12(g) are subject to numerous regulatory requirements under the Exchange Act. For example, we will be subject to the Sarbanes-Oxley Act of 2002. This Act creates a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and strengthens auditor independence. It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members appointment, compensation and oversight of the work of public companies’ auditors; prohibits certain insider trading during pension fund blackout periods; and establishes a federal crime of securities fraud, among other provisions.

Section 14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with the rules and regulations of the Securities and Exchange Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders of our Company at a special or annual meeting thereof or pursuant to a written consent will require our Company to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Securities and Exchange Commission at least 10 days prior to the date that definitive copies of this information are forwarded to our stockholders.

Upon effectiveness of our Registration Statement on Form 10, as amended, we will also be required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Securities Exchange Commission on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; changes in executive officers and directors; and bankruptcy) in a Current Report on Form 8-K.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration

We regard intellectual property (“IP”) as a strategic asset that allows us to maintain a highly competitive position in the market. All patents and trademarks relating to acquired technologies have been assigned to us. Where appropriate, we seek patent protection for inventions and developments made by our personnel and incorporated into our products or otherwise falling within our fields of interest. We protect some of our technology as proprietary trade secrets and, where appropriate, we use trademarks or registered trademarks used in connection with our products.

There are currently 32 patents assigned to Reflect Scientific, Inc. All of our patents cover our Cryometrix product line of nitrogen-based equipment for processing, storage and transportation of bio-pharma products. All patents are utility patents within the jurisdiction of the United States, with expiration dates ranging from December 2028 to December 2041. We have a strong commitment to maintaining our IP portfolio and pursuing additional IP to expand our product protection.

Research and Development Costs During the Last Two Fiscal Years

During the year ended December 31, 2023, we expended $29,542 for research and development. During the year ended December 31, 2022, we expended $73,425 for research and development. The majority of the research and development on our products is performed by independent contractors who have been enhancing technologies, primarily on the reefer unit and the detectors. We expect research and development cost to increase in the future with the development work required to update and make improvements on our Cryometrix freezers.

Employees

As of March 26,2024, subsequent to the balance sheet date, we had 7 full-time and 1 part-time employees. None of our employees are represented under a collective bargaining agreement. We believe our relations with our employees to be good.

Reports to Security Holders

You may read and copy any materials that we file with the Securities and Exchange Commission at the Securities and Exchange Commissions’ Public Reference Room at 100 F Street, N.E., Washington, D.C.20549. You may also find all of the reports that we have filed electronically with the Securities and Exchange Commission at their Internet site www.sec.gov.

Item 1A. Risk Factors

Not applicable for Registrant.

Item 1B. Unresolved Staff Comments

None. Not applicable.

Item 1C. Cybersecurity

Strategy, Governance and Risk Management

Reflect Scientific maintains a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats, including the assessment of cybersecurity risks related to third-party vendors and suppliers. This program is integrated within the Company’s enterprise risk management process and the results of the risk assessment, which occurs at least annually, along with mitigation strategies, are discussed with the senior management.

The underlying controls of the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and the International Organization Standardization (“ISO”) 27001 Information Security.

Item 2. Description of Property

Reflect Scientific conducts all of its business operations from one facility, located in Orem, Utah. This is a combination warehouse and office facility with 6,000 square feet of space. As of December 31, 2023, we lease this facility at $6,742 per month (with semi-annual rent increases) through the end of the lease term on November 30, 2026.

Item 3. Legal Proceedings

None.

Item 4. Mine Safety Disclosure

Not applicable.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters and Registrant Purchases of Equity Securities.

Market Information

Since July 6, 2005, our common stock has been listed under the symbol “RSCF” on the OTCBB. Prior to July 6, 2005, our stock traded under the symbol “COLH” since its initial listing on May 24, 2001.

As of March 26, 2024, there were 85,664,086 shares of our common stock outstanding. On March 26, 2024, the high and low bid price for our common stock was $0.0679 and $0.0651, respectively.

Holders

The number of record holders of our common stock as of March 26, 2024, was approximately 107. This number does not include an indeterminate number of stockholders whose shares may be held by brokers in street name.

Dividends

We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the foreseeable future. Our future dividend policy cannot be ascertained with any certainty. There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our securities.

Securities Authorized for Issuance under Equity Compensation Plans

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options,warrants and rights	Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	-	-	None
Equity compensation plans not approved by security holders	-	-	None
Total	-	-	None

Recent Sales of Unregistered Securities

None.

Use of Proceeds of Registered Securities

There were no proceeds received during the calendar year ended December 31, 2023 and 2022, from the sale of registered securities.

Issuance of Equity Securities by Us

In December 2021, the board approved the issuance of 1,000,000 shares of restricted stock to its patent attorney, 250,000 shares to vest on the grant date with an additional 250,000 shares to vest on each of the next three anniversary dates. In December 2022, this issuance was modified from 1,000,000 shares of restricted stock to 925,000 shares of restricted

stock. In December 2023, this issuance was modified to accelerate the vesting of the shares of restricted stock. As of December 31, 2023, 925,000 shares have vested with no additional shares to vest remaining.

Item 6. Reserved.

We are not required to provide information under this item.

Item 7. Management’s Discussion and Analysis or Plan of Operation

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Plan of Operations provided below, including information regarding the Company’s financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operations that are not historical facts are hereby identified as "forward-looking statements."

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and notes included in this report as Part II, Item 8.

Critical Accounting Policies

Reflect Scientific’s accounting policies are more fully described in Note 2 of the consolidated financial statements. As discussed in Note 2, 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 about the future events that affect the amounts reported in the consolidated financial statements and the 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.

We consider the following estimates to be critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.

Accounts Receivable

Accounts receivable consist of trade receivables arising from credit sales to customers in the normal course of business. These receivables are recorded at the time of sale, net of an allowance for current expected credit losses. In accordance with ASC Topic 326, “Financial Instruments – Credit Losses,” the Company estimates expected credit losses based on historical bad debt experience, the aging of accounts receivable, the current creditworthiness of our customers, prevailing economic conditions, and reasonable and supportable forward-looking information. Accounts receivable balances are written off when they are determined to be uncollectible.

Inventories

The Company’s inventory consists of parts for scientific vial kits, refrigerant gases, components for the imaging and inspection systems which it builds, and other scientific items. The Company values inventory at each balance sheet date to ensure that it is carried at the lower of cost or net realizable value with cost determined based on the average cost basis. The Company periodically evaluates the value of items in inventory and provides write-downs to inventory based on its estimate of market conditions.

Goodwill

performance, including an assessment of cash flows in comparison to actual and projected results of prior periods. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on our qualitative analysis, or if we elect to skip this step, we perform a Step 1 quantitative analysis to determine the fair value of the reporting unit.

Impairment of Long-Lived Assets

The Company reviews its right-of-use (“ROU”) assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Stock-Based Compensation

We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with ASC Topic 718, “Share-Based Payments.”Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized on a straight-line basis over the employee’s requisite service period, which is generally the vesting period. Restricted stock awards are valued based on the closing stock price on the date of grant (intrinsic value method). The Company has elected to recognize forfeitures as they occur.

Overview

During the year ended December 31, 2023, revenue decreased by 47.1% compared to the year ended December 31, 2022. The revenue decline was primarily due to a reduced demand for freezer and chiller sales, influenced by a decline in customer capital expenditures amid the prevailing economic conditions.

Contractual Obligations

The Company leases office/warehouse space in Orem, Utah. The following summarizes future minimum lease payments under the operating lease at December 31, 2023:

Year Ending December 31,	Amount
2024	$	85,309
2025		98,532
2026		101,708
Total		285,549
Less: imputed interest		(42,905	)
Total operating lease liability	$	242,644

Results of Operations

The following table sets forth key components of our results of operations during the years ended December 31, 2023 and 2022, both in dollars and as a percentage of our revenues.

	For the Years Ended December 31,
	2023						2022
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	1,080,154			100.0	%	$	2,041,297			100.0	%
Cost of goods sold		483,733			44.8	%		822,147			40.3	%
Gross profit		596,421			55.2	%		1,219,150			59.7	%

Operating Expenses
Salaries and wages		645,517			59.8	%		636,038			31.2	%
General and administrative		388,640			36.0	%		419,589			20.5	%
Research and development		29,542			2.7	%		73,425			3.6	%
Total Operating Expenses		1,063,699			98.5	%		1,129,052			55.3	%

Income (loss) from operations		(467,278	)		(43.3)	%		90,098			4.4	%

Other income		8,562			0.8	%		-			-	%

Net income (loss) before income taxes		(458,716	)		(42.5)	%		90,098			4.4	%
Income tax expense		(312	)		(0.0)	%		(702	)		(0.0)	%
Net income (loss)	$	(459,028	)		(42.5)	%	$	89,396			4.4	%

Revenues. Revenues decreased by $961,143, or 47.1%, to $1,080,154 for the year ended December 31, 2023, as compared to $2,041,297 for the year ended December 31, 2022. Such decrease was primarily due to a reduced demand for freezer and chiller sales, influenced by a decline in customer capital expenditures amid the prevailing economic conditions.

Cost of goods sold. Cost of goods sold decreased by $338,414, or 41.2%, to $483,733 for the year ended December 31, 2023, as compared to $822,147 for the year ended December 31, 2022. Such decrease was primarily due to decreased freezer and chillers sales.

Gross profit. Our gross profit as a percentage of sales decreased to 55.2% for the year ended December 31, 2023, as compared to 59.7% for the year ended December 31, 2022. The decrease in gross profit percentage was primarily due to the decrease in freezer and chiller sales, which have better margins than other products, and increased product costs.

Salaries and wages. Salaries and wages increased by $9,479, or 1.5%, to $645,517 for the year ended December 31, 2023, as compared to $636,038 for the year ended December 31, 2022. Such increase was primarily due to increased stock-based compensation, offset by decreased employee headcount.

General and administrative. General and administrative expenses decreased by $30,949, or 7.4%, to $388,640 for the year ended December 31, 2023, as compared to $419,589 for the year ended December 31, 2022. Such decrease was primarily due to decreased advertising, marketing, and travel expenditures, partially offset by increased public filing costs and rent expense.

Research and development. Research and development expenses decreased by $43,883, or 59.8%, to $29,542 for the year ended December 31, 2023, as compared to $73,425 for the year ended December 31, 2022. Such decrease was primarily a result of decreased enhancements to the ultra-cold CBD oil chiller as a result of the decline in operations.

Other income. Other income was $8,562 for the year ended December 31, 2023, as compared to $0 for the year ended December 31, 2022. Such increase was from interest income earned on our business savings accounts as a result of improved interest rates.

Net income (loss). As a result of the cumulative effect of the factors described above, our net loss was $459,028 for the year ended December 31, 2023, as compared to net income of $89,396 for the year ended December 31, 2022. Management continues to look for opportunities to increase sales, improve gross margins and control ongoing operating expenses.

Liquidity and Capital Resources

As of December 31, 2023 and 2022, our current assets exceeded current liabilities by $1,773,784 and $2,179,237, respectively, and we had cash and cash equivalents of $1,277,951 and $1,381,927, respectively. To date, we have financed our operations primarily through revenue generated from operations, cash proceeds from financing activities, borrowings, and equity contributions by our shareholders.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the period indicated:

	Years Ended December 31,
	2023			2022
Net cash used in operating activities	$	(103,976	)	$	(91,997	)
Net cash provided by investing activities		-			-
Net cash provided by financing activities		-			-
Net change in cash and cash equivalents		(103,976	)		(91,997	)
Cash and cash equivalents at beginning of period		1,381,927			1,473,924
Cash and cash equivalents at end of period	$	1,277,951		$	1,381,927

Net cash used in operating activities was $103,976 and $91,997 for the years ended December 31, 2023 and 2022, respectively. Significant factors affecting operating cash flows was primarily a result of decreased accounts receivable and the net loss during the year ended December 31, 2023, partially offset by increased customer deposits.

We continue working to enhance our on-line ordering system to increase sales, develop the market for our ultra-low temperature freezers, work with current vendors to obtain more favorable pricing, and locate new vendors to provide opportunities to further reduce our cost of goods.

We will continue to focus our efforts on our core business activities while pursuing capital resources and evaluating potential future acquisitions which fit within and enhance our core business.

Off-Balance Sheet Arrangements

None noted.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to Registrant.

Item 8. Financial Statements

The financial statements of the Company are set forth immediately following the signature page to this Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

As of the end of the period covered by this Annual Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief/Principal Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”). Based on this evaluation, our Chief Executive Officer and Chief 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 President 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 Chief Financial Officer have concluded that our disclosure controls and procedures are not effective due to the material weakness in the Company’s internal control. 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.

Management’s Annual Report on 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). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on this evaluation, our management concluded that, as of December 31, 2023, our internal control over financial reporting was not effective due to the lack of segregation of duties inherent in a small company.

Inherent Limitations over Internal Controls

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Changes in internal control over financial reporting

We have made no change in our internal control over financial reporting during the last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report on Form 10-K.

Item 9B. Other Information

None; not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None; not applicable.

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

Identification of Directors and Executive Officers

The following table sets forth the names of all of our current directors and executive officers. These persons will serve until the next annual meeting of the stockholders or until their successors are elected or appointed and qualified, or their prior resignation or termination.

Name	Positions Held	Date of Election or Designation	Date of Termination or Resignation
Kim Boyce	President &
	Director	12/2003	*

Tom Tait	Vice President,
	Secretary and Director	01/2005	*

William G. Moon	Director	04/2011	*

* These persons presently serve in the capacities indicated.

Business Experience

Kim Boyce - CEO, Director

Mr. Boyce, 70,founded Reflect Scientific in 1993 and has over 40 years of experience in manufacturing, sales, distribution and management. His prior experience includes executive roles with Grace/Alltech Scientific, where he served as manager – distribution and sales and manager – plant operations. He also co-founded Labtech Scientific Products in Northern California, a distribution company specializing in equipment for use in life science and environmental related industries. He has an accomplished track record in strategic business development in a variety of markets, including the pharmaceutical and biotechnology sectors and cold chain management. Mr. Boyce received his technical training at DeAnza College in Cupertino, CA and his business training at San Jose State University.

Thomas Tait - Vice President, Secretary, Director

Mr. Tait, 69, serves as Vice President. Mr. Tait brings experience with accelerated product development, “lean” process management tools, strategic market analysis, and acquisition integration. Mr. Tait joined us from Danaher Company where he was a Business Manager over a $120 million in sales product line. Prior assignments have included General Manager of HyperQuan Inc., Product Manager J&W Scientific and Project Manager Varian Inc. He also co-founded ChiraTech Inc, a high technology Company that was sold to Thermo Electron Corporation. Mr. Tait holds an MBA in Technology Management from the University of Phoenix and a BS in Chemistry from Clarkson University. He also holds patents in Optics and MEMS technologies.

William G. Moon, Director

Mr. Moon, 75, has over 30 years experience in startup and engineering related companies. His leadership experience includes assisting in the formation of what became the world’s largest disk drive company, Quantum Corporation, with over 10,000 employees. He was Principal Engineer and Vice President of Engineering for over twenty years, during which time he co-designed numerous standard-setting disk drives. During that time, he was a co-founder of a wholly owned Quantum subsidiary, Plus Development, and was key in the invention of the Hardcard, the first hard drive on a plug-in card. He helped create a partnership with Panasonic for the world’s first totally automated disk drive assembly plant in Japan, producing over 100 million disk drives. Prior to that, Mr. Moon designed memory products at Hewlett Packard Labs in their Disk Memory Division. Over the past five years Mr. Moon has served as technical advisor to several companies and has sat on several boards.

We believe that, based on education and experience all of our directors are qualified to serve.

Significant Employees

There are no employees who are not executive officers who are expected to make a significant contribution to our Company’s business.

Family Relationships

There are no family relationships between our officers and directors.

Involvement in Certain Legal Proceedings

During the past five years, no director, person nominated to become a director, executive officer, promoter or control person of our Company:

(1) was a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;

(2) was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(4) was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires that our executive officers and directors and persons who beneficially own more than 10% of our common stock, file initial reports of stock ownership and reports of changes in stock ownership with the Securities and Exchange Commission. Officers, directors, and greater than 10% owners are required by applicable regulations to furnish our Company with copies of all Section 16(a) forms that they file.

Based solely on a review of the copies of such forms furnished to us or written representations from certain persons, we believe that during our calendar year ended December 31, 2023, all filing requirements applicable to our officers, directors and 10% stockholders were met by such persons.

Code of Ethics

We have adopted a Code of Ethics that applies to all of our directors and executive officers serving in any capacity for our Company, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, which Code of Ethics was attached to our Form 10-K annual Report for the year ended December 31, 2003. See Part IV, Item 15.

Nominating Committee

We have not established a Nominating and Corporate Governance Committee because we believe that the three members currently comprising our Board of Directors are able to effectively manage the issues normally considered by a Nominating and Corporate Governance Committee.

Audit Committee

Due to the size and status of our Company we have no Audit Committee, and are not required to have an audit committee. We do not believe the lack of an Audit Committee will have any adverse effect on our financial statements, based upon our current operations. We will assess whether an audit committee may be necessary in the future.

Item 11. Executive Compensation

The following table sets forth the aggregate compensation paid by us for services rendered during the periods indicated:

SUMMARY COMPENSATION TABLE

Name and Principal Position

Year

Salary

($)

Bonus

($)

Stock Awards

($)

Option Awards

($)

Non-Equity Incentive Plan

Compensation($)

Nonqualified Deferred Compensation

($)

All Other Compensation($)

Total

Earnings

($)

Kim Boyce CEO & Director

12/31/23

12/31/22

$102,200

$106,459

$102,200

$106,459

Tom Tait VP & Director

12/31/23

12/31/22

$14,400

$15,000

$14,400

$15,000

William Moon

VP and Director

12/31/23

12/31/22

$48,000

$76,000

$48,000

$76,000

Outstanding Equity Awards

As of December 31, 2023, there are no outstanding equity awards.

Compensation of Directors

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
None	None	None	None	None	None	None	None

Item 12. Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of March 24, 2023, the names, addresses and number of shares of common stock beneficially owned by all persons known to the management of Reflect Scientific to be beneficial owners of more than 5% of the outstanding shares of common stock, and the names and number of shares beneficially owned by all directors of Reflect Scientific and all executive officers and directors of Reflect Scientific as a group (except as indicated, each beneficial owner listed exercises sole voting power and sole dispositive power over the shares beneficially owned).

For purposes of this table, information as to the beneficial ownership of shares of common stock is determined in accordance with the rules of the Securities and Exchange Commission and includes general voting power and/or investment power with respect to securities. Except as otherwise indicated, all shares of our common stock are beneficially owned, and sole investment and voting power is held, by the person named. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock, which such person has the right to acquire within 60 days after the date hereof. The inclusion herein of such shares listed beneficially owned does not constitute an admission of beneficial ownership.

All percentages are calculated based upon a total number of 85,664,086 shares of common stock outstanding as of March 26, 2024, plus, in the case of the individual or entity for which the calculation is made, that number of options or warrants owned by such individual or entity that are currently exercisable or exercisable within 60 days.

		Amount and Nature of	Percentage of Outstanding
Title of Class	Name and Address of Beneficial Owner	Beneficial Owner	Common stock

	Principal Shareholders

Common Stock	Kim Boyce 1270 South 1380 West Orem, Utah 84058	43,637,250	50.9%

	Officers and Directors

Common Stock	Kim Boyce	43,637,250	50.9%
Common Stock	Tom Tait	900,000	1.1%
Common Stock	William Moon.	1,100,000	1.3%
	All directors and executive officers of the Company as a group (three individuals)	45,637,250	53.3%

Changes in Control

There are no current or planned transactions that would or are expected to result in a change of control of our Company.

Securities Authorized for Issuance under Equity Compensation Plans

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	-	-	None
Equity compensation Plans not approved by security holders	-	-	None
Total	-	-	None

The 2007 Equity Inventive Plan as amended on December 31, 2009, authorized the Company to issue 12,000,000 shares of stock options and restricted stock under an equity plan. The plan had an expiration date of December 31, 2019. No stock or option awards were outstanding at the time the plan expired.

Item 13. Certain Relationships and Related Transactions

Transactions with Related Persons

During the years ended December 31, 2023 and 2022, there were no related party transactions.

Parents of the Issuer

None; however Kim Boyce, our President and a director, may be deemed to be our “Parent” by virtue of his substantial shareholdings in our Company.

Transactions with Promoters and Control Persons

There were no material transactions, or series of similar transactions, during our Company’s last five fiscal years, or any currently proposed transactions, or series of similar transactions, to which we or any of our subsidiaries was or is to be a party and in which any promoter or founder of ours or any member of the immediate family of any of the foregoing persons, had an interest.

Item 14. Principal Accounting Fees and Services

The following is a summary of the fees billed to us by our principal accountants during the fiscal years ended December 31, 2023 and 2022:

Fee Category		2023		2022
Audit Fees	$	51,500	$	53,000
Audit-related Fees	$	-	$	-
Tax Fees	$	2,600	$	2,350
All Other Fees	$	-	$	-
Total Fees	$	54,100	$	55,350

Audit Fees – Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

Audit-related Fees – Consists of fees for assurance and related services by our principal accountants that are reasonably

related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”

Tax Fees – Consists of fees for professional services rendered by our principal accountants for tax compliance.

All Other Fees – Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

We do not have an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, we do require approval in advance of the performance of professional services to be provided to us by our principal accountant. Additionally, all services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

The Board of Directors has received from our auditors the matters required to be discussed by PCAOB Auditing Standard No. 16 (Communications with Audit Committees).

PART IV

Item 15. Exhibits

Exhibits

Exhibit No.	Title of Document	Location if other than attached hereto
3.1	Articles of Incorporation	10-SB Registration Statement*
3.2	Articles of Amendment to Articles of Incorporation	10-SB Registration Statement*
3.3	By-Laws	10-SB Registration Statement*
3.4	Articles of Amendment to Articles of Incorporation	8-K Current Report dated December 31, 2003*
3.5	Articles of Amendment to Articles of Incorporation	8-K Current Report dated December 31, 2003*
3.6	Articles of Amendment	September 30, 2004 10-QSB Quarterly Report*
3.7	By-Laws Amendment	September 30, 2004 10-QSB Quarterly Report*
4.1	Debenture	8-K Current Report dated June 29, 2008*
4.2	Form of Purchasers Warrant	8-K Current Report dated June 29, 2008*
4.3	Registration Rights Agreement	8-K Current Report dated June 29, 2008*
4.4	Form of Placement Agreement	8-K Current Report dated June 29, 2008*
10.1	Securities Purchase Agreement	8-K Current Report dated June 29, 2008*
10.2	Placement Agent Agreement	8-K Current Report dated June 29, 2008*
10.3	JMST Purchase Agreement	8-k Current Report dated April 4, 2006*
10.4	Cryomastor Merger Agreement	8-K Current Report dated April 19, 2006*
10.5	Image Labs Merger Agreement	8-K Current Report dated November 15, 2006*
10.6	All Temp Merger Agreement	8-K Current Report dated November 17, 2006*
	Debenture Settlement	8-K Current Report dated August 17, 2010
14	Code of Ethics	December 31, 2003 10-K Annual Report*
21	Subsidiaries of the Company	December 31, 2006 10-K Annual Report*
31.1	302 Certification of Kim Boyce	This Filing
31.2	302 Certification of Kim Boyce	This Filing
32	906 Certifications	This Filing

* Previously filed with the Securities and Exchange Commission in the form indicated and incorporated by reference

Additional Exhibits Incorporated by Reference

*	Reflect California Reorganization	8-K Current Report dated December 31, 2003
*	JMST Acquisition	8-K Current Report dated April 4, 2006
*	Cryomastor Reorganization	8-K Current Report dated June 27, 2006
*	Image Labs Merger Agreement Signing	8-K Current Report dated November 15, 2006
*	All Temp Merger Agreement Signing	8-K Current Report dated November 17, 2006
*	All Temp Merger Agreement Closing	8-KA Current Report dated November 17, 2006
*	Image Labs Merger Agreement Closing	8-KA Current Report dated November 15, 2006
*	Debenture Placement	8-K Current Reported dated June 29, 2007

* Previously filed and incorporated by reference.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the Company caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

REFLECT SCIENTIFIC, INC.

Date:	03/29/2024		By:	/s/Kim Boyce
				Kim Boyce, Chief Executive Officer and Director

Date:	03/29/2024		By:	/s/Kim Boyce
				Kim Boyce, Chief Financial Officer (Principal Accounting Officer)

In accordance with the Securities Exchange Act, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:

REFLECT SCIENTIFIC, INC.

Date:	03/29/2024	By:	/s/Kim Boyce
			Kim Boyce, CEO and Director

Date:	03/29/2024	By:	/s/Tom Tait
			Tom Tait, Vice President and Director

Date:	03/29/2024	By:	/s/William Moon
			William Moon, Director

FINANCIAL STATEMENTS

		Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 3627)		26
Consolidated Balance Sheets as of December 31, 2023 and 2022		27
Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022		28
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022		29
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022		30
Notes to Consolidated Financial Statements		31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Reflect Scientific, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Reflect Scientific, Inc. and subsidiaries (“the Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company’s auditor since 2015.

Draper, UT

March 29, 2024

REFLECT SCIENTIFIC, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2023			December 31, 2022
ASSETS

Current Assets
Cash and cash equivalents	$	1,277,951		$	1,381,927
Accounts receivable, net		108,191			129,329
Inventories, net		972,293			797,352
Prepaid expenses and other current assets		11,715			20,221
Total Current Assets		2,370,150			2,328,829

Operating lease right-of-use assets		235,653			54,265
Goodwill		60,000			60,000
Other long-term assets		3,100			3,100
TOTAL ASSETS	$	2,668,903		$	2,446,194

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	86,241		$	78,969
Customer deposits		447,444			13,230
Current portion of operating lease liabilities		62,681			57,393
Total Current Liabilities		596,366			149,592

Operating lease liabilities, net of current portion		179,963			-
TOTAL LIABILITIES		776,329			149,592

Stockholders' Equity
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; none issued and outstanding as of December 31, 2023 and 2022		-			-
Common stock, $0.01 par value, 100,000,000 shares authorized; 85,664,086 and 85,214,086 shares issued and outstanding as of December 31, 2023 and 2022, respectively		856,640			852,140
Additional paid-in capital		20,302,681			20,252,181
Accumulated deficit		(19,266,747	)		(18,807,719	)
TOTAL STOCKHOLDERS’ EQUITY		1,892,574			2,296,602
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,668,903		$	2,446,194

The accompanying notes are an integral part of these consolidated financial statements.

REFLECT SCIENTIFIC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended December 31,
	2023			2022
Revenues	$	1,080,154		$	2,041,297
Cost of goods sold		483,733			822,147
Gross profit		596,421			1,219,150

Operating Expenses
Salaries and wages		645,517			636,038
General and administrative		388,640			419,589
Research and development		29,542			73,425
Total Operating Expenses		1,063,699			1,129,052

INCOME (LOSS) FROM OPERATIONS		(467,278	)		90,098

Other income		8,562			-

NET INCOME (LOSS) BEFORE INCOME TAXES		(458,716	)		90,098
INCOME TAX EXPENSE		(312	)		(702	)
NET INCOME (LOSS)	$	(459,028	)	$	89,396

Earnings (loss) per common share
Basic	$	(0.01	)	$	0.00
Diluted	$	(0.01	)	$	0.00

Weighted average shares outstanding
Basic		85,217,785			84,990,935
Diluted		85,217,785			85,440,935

The accompanying notes are an integral part of these consolidated financial statements.

REFLECT SCIENTIFIC, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Equity
Balance at December 31, 2021		84,989,086	$	849,890	$	20,226,931		$	(18,897,115	)	$	2,179,706
Stock-based compensation		-		-		27,500			-			27,500
Common stock issued in vesting of RSUs		225,000		2,250		(2,250	)		-			-
Net income		-		-		-			89,396			89,396
Balance at December 31, 2022		85,214,086		852,140		20,252,181			(18,807,719	)		2,296,602
Stock-based compensation		-		-		55,000			-			55,000
Common stock issued in vesting of RSUs		450,000		4,500		(4,500	)		-			-
Net loss		-		-		-			(459,028	)		(459,028	)
Balance at December 31, 2023		85,664,086	$	856,640	$	20,302,681		$	(19,266,747	)	$	1,892,574

The accompanying notes are an integral part of these consolidated financial statements.

REFLECT SCIENTIFIC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(459,028	)	$	89,396
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		55,000			27,500
Amortization of right-of-use assets		61,494			56,218
Changes in operating assets and liabilities:
Accounts receivable		21,138			46,320
Inventories		(174,941	)		(172,866	)
Prepaid expenses and other current assets		8,506			11,085
Accounts payable and accrued expenses		7,272			12,132
Customer deposits		434,214			(105,336	)
Operating lease liabilities		(57,631	)		(56,446	)
Net cash used in operating activities		(103,976	)		(91,997	)

CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by investing activities		-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities		-			-

NET CHANGE IN CASH AND CASH EQUIVALENTS		(103,976	)		(91,997	)

CASH AND CASH EQUIVALENTS
Beginning of the period		1,381,927			1,473,924
End of the period	$	1,277,951		$	1,381,927

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Operating lease right-of-use asset and liability remeasurement	$	242,882		$	-
Common stock issued in vesting of RSUs	$	4,500		$	2,250

The accompanying notes are an integral part of these consolidated financial statements.

REFLECT SCIENTIFIC, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

NOTE 1—ORGANIZATION AND NATURE 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.

The Company is engaged in the manufacture and distribution of innovative products targeted at the life sciences market. Our customers include hospitals, diagnostic laboratories, pharmaceutical and biotech companies, cold chain management, universities, government and private sector research facilities, chemical and industrial companies.

Our Cryometrix brand ultra-low temperature and blast freezers innovative design enables our customers to save substantially on energy costs related to cryogenic storage. Ultra-low temperature freezers are used worldwide for the storage of vaccines, DNA, RNA, proteins and many other biological and chemical substances. There is a growing need for energy efficient reliable ultra-low temperature storage units. Our Cryometrix freezers are targeted to this growing market and we have had tremendous success in blood storage and pharmaceutical manufacturing applications. The application of this technology for use in refrigerated trailers (commonly called “reefers”) used to transport good which need to be maintained in a cold environment significantly broadens the market for this technology. The utilization of this technology in reefers eliminates the current method of cooling, which uses engines run on hydrocarbon fuels. The Cryometrix technology is pollutant free and is more efficient and cost effective than the technologies currently used. Reflect Scientific has added a new product line of solvent chillers. Solvent chillers are used in natural products extraction for optimizing product yield and purity.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits.

Revenue Recognition

The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five-step approach: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as a performance obligation is satisfied.

We sell our specialty science and environmental lab supplies through direct sales and through distributor relationships. We sell our ultra-low temperature freezers through consultants and commission-only sales personnel. Revenue is recognized at a point in time when control of the promised goods or services is transferred to the customer, generally at the time of shipment or customer acceptance, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. This core principle is achieved through the following steps:

Identify the contract with the customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

Identify the performance obligations in the contract. Generally, our contracts with our laboratory supply customers do not include multiple performance obligations to be completed over a period of time. Our performance obligations generally relate to delivering specialty laboratory products to a customer, subject to the shipping terms of the contract.

Ultra-low temperature freezers sold to customers are built to order. Generally, 50% of the value of the contract is paid by the customer prior to work beginning on manufacturing the freezer. Upon completion of manufacturing and testing the customer will then sign an acceptance of the unit and make payment of the remaining balance on the contract, at which title passes to the customer. The customer may either arrange to transport the unit with a carrier he uses or ask the Company to arrange such shipment, the charges of which are the responsibility of the customer. A customer may, after accepting the unit, request that it be upgraded with additional hardware or software options. Those options are installed under a new contract, with the deposit and final payment requirements being the same as on the original order.

Any warranty obligations associated with the sale of our products are assurance-type warranties that are a guarantee of the product’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. We do not typically offer extended warranty or service plans.

Determine the transaction price. The transaction price is determined based on the consideration that the Company is entitled to receive in exchange for transferring the goods or services to the customer. The Company includes in the transaction price an amount of variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable considerations including discounts and estimated returns, are deducted from gross sales in determining net sales at the time revenues are recorded. Historically, we have not had any significant returns.

Allocate the transaction price to performance obligations in the contract. We typically do not have multiple performance obligations in our laboratory supply contracts with customers. As such, we generally recognize revenue upon transfer of the product to the customer's control at contractually stated pricing. The freezers likewise do not have milestone or percentage of completion clauses in the contract, so revenue is only recognized when the work has been completed.

Recognize revenue when or as we satisfy a performance obligation. We generally satisfy performance obligations at a point in time upon either shipment or, with our freezers, upon final acceptance of the unit by the customer, in accordance with the terms of each contract with the customer. We do not have significant service revenue.

We have elected to use the practical expedient in ASC 340 (regarding recognition of the incremental costs of obtaining a contact) and expense any costs of obtaining a contract as incurred as our contracts are typically completed in one year or less.

We do require customer deposits to be made on freezer purchases when an order is placed. The deposits are recognized a revenue when our performance obligation is completed, or they are refunded by the Company in the event of an order cancellation. The Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. As of December 31, 2023 and 2022, we had customer deposits of$447,444 and $13,230, respectively.

Cost of Revenue

The Company includes product costs (i.e., material, direct labor and overhead costs), shipping and handling expense, and production-related expenses in cost of revenues.

Accounts Receivable

Property and Equipment

Property and equipment are stated at cost. Expenditure for minor repairs, maintenance, and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the property and equipment are depreciated range from 5 to 7 years, except for computer equipment, which is depreciated over a 3-year life.

Inventories

$106,044.

Goodwill

Goodwill represents the excess of purchase price over the fair value of the net assets acquired. We evaluate goodwill for impairment annually on December 31, or more frequently if an event occurs or circumstances that indicate the goodwill is not recoverable. When impairment indicators are identified, we may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units has fallen below their carrying value. This assessment is based on several factors, including industry and market conditions, overall financial performance, including an assessment of cash flows in comparison to actual and projected results of prior periods. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on our qualitative analysis, or if we elect to skip this step, we perform a Step 1 quantitative analysis to determine the fair value of the reporting unit. As of December 31, 2023 and 2022, there were no impairments of goodwill.

Impairment of Long-Lived Assets

Leases

The Company accounts for leases in accordance with ASC Topic 842, “Leases.” The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes ROU assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset.

Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability.

When calculating the present value of minimum lease payments, we account for leases as one single lease component if a lease has both lease and non-lease fixed cost components. Variable lease and non-lease cost components are expensed as incurred.

We do not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories:

Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date.

Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly.

Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.

Cash, receivables, inventory, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature.

Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets and goodwill, which are re-measured when the derived fair value is below carrying value in the consolidated balance sheets.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive are not included in diluted earnings (loss) per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period.

Stock-Based Compensation

Research and Development

The Company accounts for research and development costs in accordance with ASC Topic 730“Research and Development.” Under the provisions of ASC 730, research and development costs are expensed as incurred. As of December 31, 2023 and 2022, research and development costs amounted to$29,542 and $73,425, respectively.

Advertising and Marketing

Costs for advertising and marketing are expensed as incurred. As of December 31, 2023 and 2022, advertising and marketing expenses amounted to$45,826 and $77,311, respectively.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC Topic 740, “Accounting for Income Taxes,” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. As a smaller reporting company, the guidance was effective for our fiscal years beginning after December 15, 2022. The adoption of this guidance did not have an impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. We are currently evaluating the impact this standard will have on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied retrospectively. We are currently evaluating the impact this standard will have on our consolidated financial statements.

We currently believe there are no other issued and not yet effective accounting standards that are materially relevant to our consolidated financial statements.

NOTE 3—DISAGGREGATION OF REVENUES

Our revenue is disaggregated based on product category and geographical region. We recognize revenue from the sale of scientific equipment for the life sciences and manufacturing industries. Our products range from non-mechanical Cyrometrix freezers, chillers, and original equipment manufacturer (“OEM”) value-added products and components for the life sciences industry.

The Company’s revenues for the years ended December 31, 2023 and 2022 are disaggregated as follows:

	For the Year Ended December 31, 2023
	United States		International		Total
Revenues
Freezers and chillers	$	366,069	$	-	$	366,069
OEM and other		509,886		204,199		714,085
Total Revenues	$	875,955	$	204,199	$	1,080,154

	For the Year Ended December 31, 2022
	United States		International		Total
Revenues
Freezers and chillers	$	793,953	$	262,001	$	1,126,428
OEM and other		722,194		263,149		914,869
Total Revenues	$	1,516,147	$	525,150	$	2,041,297

NOTE 4—INVENTORIES

Inventories at December 31, 2023 and 2022 consisted of the following:

	December 31,			December 31,
	2023			2022
Finished goods	$	493,565		$	376,334
Raw materials		584,772			527,062
Total inventories		1,078,337			903,396
Less reserve for obsolescence		(106,044	)		(106,044	)
Total inventories, net	$	972,293		$	797,352

Inventory balances are composed of finished goods and raw materials. Work in process inventory is immaterial to the consolidated financial statements.

NOTE 5—LEASES

The Company conducts all of its business operations from one facility, located in Orem, Utah. This is a combination warehouse and office facility with 6,000 square feet of space. On September 1, 2023, the Company entered into a lease amendment to renew its office and warehouse space. The lease renewal commenced on December 1, 2023 and shall expire on November 30, 2026, with an option to extend the term an additional three years. Under the terms of the lease renewal, the Company will lease the premises at the monthly rate of $5,422 for the first year, with scheduled semi-annual rent increases through the end of the lease term. The lease agreement contains customary events of default, representations, warranties, and covenants. The remeasurement of the ROU asset and liability associated with this operating lease was $242,882.

The following was included in our consolidated balance sheet at December 31, 2023 and 2022:

	December 31,			December 31,
	2023			2022
Operating lease right-of-use assets	$	235,653		$	54,265

Lease liabilities, current portion		62,681			57,393
Lease liabilities, long-term		179,963			-
Total operating lease liabilities	$	242,644		$	57,393

Weighted-average remaining lease term (months)		35			11
Weighted average discount rate		10.50	%		5.25	%

Total lease expense for the years ended December 31, 2023 and 2022 is as follows:

	For the Years Ended December 31,
	2023		2022
Operating lease expense	$	69,524	$	60,864
Variable lease expense		18,911		6,457
Total lease expense	$	88,435	$	67,321

As of December 31, 2023, maturities of operating lease liabilities were as follows:

Year Ending December 31,	Amount
2024	$	85,309
2025		98,532
2026		101,708
Total		285,549
Less: imputed interest		(42,905	)
Total operating lease liabilities	$	242,644

NOTE 6—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at December 31, 2023 and 2022 consisted of the following:

	December 31, 2023		December 31, 2022
Trade accounts payable	$	56,931	$	55,011
Credit cards payable		29,310		23,958
Total accounts payable and accrued expenses	$	86,241	$	78,969

NOTE 7—CONCENTRATIONS OF RISK

Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents and accounts receivable.

The Company places its cash and cash equivalents with high-quality, major financial institutions in order to limit the amount of credit exposure. For accounts receivable, the Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

Cash in Excess of Federally Insured Amount

Accounts at each financial institution are insured by the FDIC up to $250,000. There were $527,951 and $1,131,927 on deposit that exceeded the FDIC limits at December 31, 2023 and 2022, respectively. The Company has not experienced

any losses in these accounts and believes it is not exposed to any significant credit risk with respect to its cash balances.

Sales and Accounts Receivable

The Company has four major customers who represent a significant portion of revenue. These four customers represented 35% and 51% of total sales revenue for the year ended December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, accounts receivable balances from these customers represent 3% and 71% respectively, of the total receivables. In addition, at December 31, 2023, the Company had accounts receivable balances from three non-major customers representing 77% of the total receivables. The Company has strong relationships with each of these customers and does not believe this concentration poses a significant risk due to those long-term relationships and uniqueness of the products they purchase from the Company. We have identified primary and secondary sources for each of the products we purchase for resale and for the raw materials we use to manufacture our products, so do not anticipate any difficulty in filling the orders placed by our customers.

NOTE 8—STOCKHOLDERS’ EQUITY

Preferred Stock

In November 2004 the Company amended its Articles of Incorporation so as to authorize 5,000,000 shares of preferred stock. Of this total, 750,000 shares have been designated as “Series A Convertible Preferred Stock”. The following is a description of the rights of the Series A Convertible Preferred Stock:

Dividends. The holders of the Series A Preferred Stock would be entitled to dividends at the rate of eight percent per year of the liquidation preference of $1.00 per share,payable annually, if and when declared by the board of directors. Dividends are not cumulative, and the board of directors is under no obligation to declare dividends.

Conversion Rights. The Series A Preferred Stock may be convertible into the Company’s common stock by dividing $1.00 plus any unpaid dividends by 50% of the five day average closing bid price of the common shares.

As of December 31, 2023 and 2022, the Company had no shares of the preferred stock are issued and outstanding.

Common Stock

As of December 31, 2023 and 2022, the Company was authorized to issue 100,000,000 common shares. As of December 31, 2023 and 2022, the Company had 85,664,086 and 85,214,086 common shares issued and outstanding, respectively.

Restricted Stock Awards

On December 28, 2021, the Company granted 1,000,000 shares of restricted common stock to its patent attorney. The restricted stock vest over three years, with 250,000 shares vesting immediately on the grant date and 250,000 shares vesting on the next three anniversary dates. In December 2022, this issuance was modified from 1,000,000 shares of restricted common stock to 925,000 shares of restricted common stock. In accordance with ASC 718, the Company measured the incremental fair value, as the difference between the estimated fair value immediately after the modification as compared to the estimated fair value immediately before the modification, noting no increase in the incremental value. In December 2023, this issuance was modified to accelerate the vesting of the shares of restricted stock. As of December 31, 2023, 925,000 shares have vested with no additional shares to vest remaining.

Below is a table summarizing the changes in restricted stock awards outstanding during the years ended December 31, 2023 and 2022:

	Restricted Stock Awards			Weighted-Average Exercise Price
Outstanding at December 31, 2021		750,000		$	0.11
Granted		-			-
Modified		(75,000	)		(0.11	)
Vested		(225,000	)		(0.11	)
Outstanding at December 31, 2022		450,000		$	0.11
Granted		-			-
Modified		-			-
Vested		(450,000	)		(0.11	)
Outstanding at December 31, 2023		-			-

Stock-based compensation expense of $55,000 and $27,500 was recorded during the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, the remaining unrecognized stock-based compensation expense related to non-vested restricted stock awards is $0.

NOTE 9—EARNINGS (LOSS) PER SHARE

The computation of weighted average shares outstanding and the basic and diluted earnings per share for the years ended December 31, 2023 and 2022 consisted of the following:

	For the Years Ended December 31,
	2023			2022
Net income (loss)	$	(459,028	)	$	89,396
Basic weighted average shares outstanding		85,217,785			84,990,935
Basic earnings (loss) per share	$	(0.01	)	$	0.00

Weighted average shares outstanding		85,217,785			84,990,935
Effect on dilutive stock awards		-			450,000
Diluted weighted average shares outstanding		85,217,785			85,440,935
Diluted earnings (loss) per share	$	(0.01	)	$	0.00

NOTE 10—INCOME TAXES

The components of the provision for income taxes for the years ended December 31, 2023 and 2022, consisted of the following:

	December 31, 2023		December 31, 2022
Current Federal and State	$	312	$	702
Deferred Federal and State		-		-
Total provision for income taxes	$	312	$	702

Deferred income tax assets and liabilities at December 31, 2023 and 2022, consisted of the following temporary differences and carry-forward items:

	December 31, 2023			December 31, 2022
Deferred tax assets (liabilities)
Loss carryforward	$	2,956,107		$	2,862,544
Property and equipment		(1,219	)		(33,988	)
Other		3,986			5,994
Valuation Allowance		(2,958,874	)		(2,834,550	)
Total net deferred income tax assets (liabilities)	$	-		$	-

The difference between the income tax expense (benefit) reported and amounts computed by applying the statutory federal rate of 21.0% to pretax income for the years ended December 31, 2023 and 2022, consisted of the following:

	December 31, 2023			December 31, 2022
Federal tax	$	(96,330	)	$	18,921
Meals and entertainment		3,875			4,625
Charitable contributions		111			1,369
Depreciation and amortization		(1,219	)		(33,988	)
Other		-			-
Change in valuation allowance		93,251			8,371
Total (benefit) provision for income taxes	$	312		$	702

At December 31, 2023, the Company had net operating loss carryforwards of approximately $7,649,929 that may be available to reduce future years’ taxable income indefinitely.