UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q10Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017March 31, 2022

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT of 1934

For the transition period from __________ to __________

Commission File Number 000-31377

REFLECT SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

Utah

87-0642556

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)

1266 South 1380 West Orem, Utah 84058

 (Address of principal executive offices) (Zip Code)

(801) 226-4100

 (Registrant’s(Registrant’s telephone number, including area code)

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 [X]   No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definition of “large“large accelerated filer,” “accelerated“accelerated filer,” “smaller“smaller reporting company,” and “emerging“emerging growth company”company” in Rule 12b-2 of the Exchange Act.

Large Accelerated

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [  ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]   No [X]

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every

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Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  

Yes [X]   No [  ]

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Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years:

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

Applicable Only to Corporate Issuers:

Indicate the number of shares outstanding of each of the Registrant’sRegistrant’s classes of common equity, as of the latest practicable date.

Class

Outstanding as of NovemberMay 13, 20172022

65,401,08684,989,086 shares of $0.01 par value common stock on NovemberMay 13, 20172022

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TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

PART II – OTHER INFORMATION

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Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Reflect Scientific, Inc.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2017March 31, 2022

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the 10-K for the period ended December 31, 2021, accompanying notes, and with the historical financial information of the Company.

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REFLECT SCIENTIFIC, INC.

Condensed Consolidated Balance Sheets

ASSETS

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

5

REFLECT SCIENTIFIC, INC.

Condensed Consolidated Balance Sheets (Continued)

LIABILITIES AND STOCKHOLDERS’STOCKHOLDERS’ EQUITY

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

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REFLECT SCIENTIFIC, INC.

Condensed Consolidated Statements of OperationsIncome

(Unaudited)

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

REFLECT SCIENTIFIC,SCIENIFIC, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)Stockholders’ Equity

For the

Nine Three Months Ended March 31, 2022 and 2021

September 30,

COST OF SALES:  Charges to cost of sales are made on product sales once the product has been shippeda first-in first-out method (FIFO).  In addition to the customer, persuasive evidencecomponent costs, some labor costs are allocated to cost of an agreement exists,goods for the price is fixed or determinable,direct labor utilized to build the sub-assemblies and collectability is reasonably assured.  The Company sells its products in both the US and internationally through direct sales and independent distributors.  finished goods.

ACCOUNTS RECEIVABLE:  Accounts receivables are presented net ofThe Company maintains an allowance for doubtful accounts.accounts to provide for losses arising from customers’ inability to make required payments. If there is deterioration of our customers’ credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required. The Company maintains allowancesestimates allowance for doubtful accounts for estimatedbased on the aged receivable balances and historical losses. The Company reviewscharges off uncollectible accounts when management determines there is no possibility of collecting the related receivable. The Company considers accounts receivable to be past due or delinquent based on a periodic basis and makes general and specific allowances when therecontractual terms, which is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection.generally net 30 days. At September 30, 2017March 31, 2022 and December 31, 2016,2021, the Company had accounts receivable, net of the allowance, of $206,000$233,401 and $73,424,$175,649, respectively.  At September 30, 2017March 31, 2022 and December 31, 20162021, the allowance for doubtful accounts was $4,000 and $4,000, respectively.

INVENTORY:

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 fixed assets are depreciated range from 5 to 7 years, except for computer equipment, which is depreciated over a 3-year life.  

INVENTORIES: Inventories are presented net of an allowance for obsolescence and are stated at the lower of cost or market value based upon the average cost inventory method. The Company’sCompany’s inventory consists of parts for scientific vial kits, refrigerant gases, components for detectorsthe imaging and ultra-low temperature freezersinspection systems which it builds, and other scientific items. At September 30, 2017,An allowance is recorded when it is determined that the amount owing is at high risk.At March 31, 2022 and December 31, 2021, the Company had inventory was made upconsisting of $254,258 ofraw materials and finished goods, less annet of allowance, of $695,607 and $624,486, respectively. At March 31, 2022 and December 31, 2021, the allowance for obsolescence of $22,652.  At December 31, 2016, inventory was comprised of $249,619 of finished goods, less an allowance for obsolescence of $22,652.  There were no raw materials or work in progress for either period presented.$106,044 and $106,044, respectively.

INTANGIBLE ASSETS: Costs to obtain or developIntangible assets include trademarks, trade secrets, patents, customer lists and goodwill acquired through acquisition of subsidiaries. The patents have been registered with the United States Patent and Trademarks Office. The costs of obtaining patents are capitalized and amortized over the life of the patents. Patentsas incurred. Intangibles, except for goodwill, are amortized from the date the Company acquires or is awarded the patent over their estimated useful lives, which range from 5 to 15 years.  Anlives. The Company regularly evaluates whether events or circumstances have occurred that indicate possible impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair valuerelies on a number of the intangible assets as determined by projected discounted netfactors, including operating results, business plans, economic projections, and anticipated future cash flows. We performThe Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. Measurement of the amount of impairment, analysis on an annual basis.  if any, is based upon the difference between the asset’s carrying value and estimated fair value. Fair value is determined through various valuation techniques, including cost-based, market and income approaches as considered necessary. The Company’sCompany’s analysis did not indicate any impairment of intangible assets as of the impairment analysis conducted December 31, 2016.2021. As of March 31, 2022 and December 31, 2021, all of the intangible assets were fully amortized.

GOODWILL: Goodwill represents the excess of the Company’s acquisition costJMST assets acquired over the fair value of net assets of the acquisition.acquired. Goodwill is not amortized but instead is tested for impairment, at a reporting unit level, annually orand when events and circumstances warrant an evaluation. The Company evaluates goodwill on an annual basis, as of the end of the fourth quarter, and whenever events and changes in circumstances indicate that there may be a potential impairment. In making this assessment, management relies on a number of factors, including operating results, business plans, economic projections, anticipated future cash flows, business trends and market conditions. The Company’s analysis did not indicate any impairment of Goodwill as of the impairment analysis conducted December 31, 2021.

LEASES: In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method.

triggering event occurs. As describedINCOME TAXES:  Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in ACS 360, the Company has adopted the two step goodwill impairment analysis that includes quantitative factors to determine whetheropinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

STOCK BASED COMPENSATION: The Company, in accordance with ASC 718, Compensation – Stock Compensation, records all share-based payments to employees at the grant-date fair value of the equity instruments issued. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company uses the closing price of the stock, as quoted by NASDAQ, on the date of the grant.  The Company believes this pricing method provides the best estimate of fair the fair value of a reporting unitthe consideration given.  Compensation cost is less than its carrying amount as a basis for determining whether it is necessary to performrecognized over the two-step goodwill impairment test. A fair-value-based test is applied atrequisite service period.

The Company, in accordance with ASC 718, Compensation – Stock Compensation, establishes the overall Company level. The test compares the estimated fair value of equity instruments issued to non-employees for goods and services by using the Company atclosing price of the stock, as quoted by NASDAQ, on the date of the analysis to the carrying value of its net assets.grant.  The analysis also requires various judgments and estimates, including general and macroeconomic conditions, industry and the Company’s targeted market conditions, as well as relevant entity-specific events, such as a change in the market for the Company’s products and services. After considering the qualitative factors that would indicate a need for interim impairment of goodwill and applying the two-step process described in ASC 360, management has determined thatCompany believes this method fairly establishes the value of Company’s assets is not more likely than not less than the carrying value of the Company including goodwill, and that no impairment charge needs be recognized during the reporting periods.goods and/or services received.

RESEARCH AND DEVELOPMENT EXPENSE - The Company accounts for research and development costs in accordance with the Financial Accounting Standards Board's Accounting Standard Codification Topic 730 “Research“Research and Development".  Under ASC 730, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred.  Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved.  Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. 

EARNINGS PER SHARE: The computation of basic earningsprofit and loss per share of common stock is based on the weighted average number of shares outstanding during the period.  Diluted EPS is computed by dividing net earnings by the weighted-average number of common shares and dilutive common stock equivalents during the period.  Common stock equivalents are not used in calculating dilutive EPS when their inclusion would be anti-dilutive.  At September 30, 2017 and 2016,March 31, 2022 the Company had 750,000 common stock equivalents outstanding in the form of restricted stock units (“RSU’s”).  These RSU’s are added to the shares issued and outstanding to calculate the diluted earnings per share.  There were no common stock equivalents.equivalents outstanding at March 31, 2021.

RECENT ACCOUNTING PRONOUNCEMENTS: In May 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-09, "Stock Compensation - Scope of Modification Accounting". This ASU requires all modifications to be accounted for as a modification unless the fair value, vesting conditions and classification of the award as equity or liability are the same as the classification of the original award immediately before the original award is modified. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017 and for interim periods therein. The Company does not believe this ASU will have a material impact on its consolidated financial position, results of operation or cash flows.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, “Leases.”  This ASU requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current accounting treatment.  This ASU changes the guidance on sale-leaseback transactions, initial direct costs and lease execution costs, and, for lessors, modifies the classification criteria and the accounting for sales-type and direct financing leases.  For public business entities, this ASU is effective for annual periods beginning after December 15, 2018, and interim periods therein.  Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial

statements.  The Company is currently evaluating the impact of this ASU on its financial statements and disclosures.

In August 2015, the ASB issued ASU 2015-14, Revenue from Contracts with Customer (Topic 606): Deferral of the Effective Date. This ASU defers the effective date of ASU 2014-09, Revenue from Contracts with Customer (Topic 606) for all entities by one year. As a result, all entities will be required to apply the provisions of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently assessing the adoption date and impact the guidance in this ASU will have, if any, on our consolidated results of operations, cash flows, or financial position.

The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position and cash flows.  Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.

NOTE 3 GOING CONCERN-   LEASES

The Company continues to accumulate significantWe have operating lossesleases for our office and has an accumulated deficit of $19,579,229 at September 30, 2017.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Management has taken a number of actions to reduce expenses. Management is seeking additional funding through the capital markets to facilitate the settlement of the remaining debentures,warehouse facility as well as for an automobile.  We used the lease termination dates of November 30, 2023 for the building and July 7, 2021 for the automobile to

calculate right of use (“ROU”) assets and lease liabilities.  

The following was included in our consolidated condensed balance sheet as of March 31, 2022:

We recognize lease expense on a straight-line basis over the term of the lease.  

Our building lease does not specify an implicit rate of interest.  Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to provide operating capitalborrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates.  As of March 31, 2022, the following disclosures for its operations.  However, there is no assurance that additional funding will be available on acceptable terms, ifremaining lease term and incremental borrowing rates were applicable:

NOTE 4 – INVENTORIES

Inventories are presented net of an allowance for obsolescence and are stated at all.the lower of cost or market value based upon the average cost inventory method.  The Company’s inventory consists of parts for scientific vial kits, refrigerant gases, components for detectors and ultra-low temperature freezers which it builds and other scientific items. At March 31, 2022 and December 31, 2021, the Company had inventory net of allowance, of $695,607 and $624,486, respectively. At March 31, 2022 and December 31, 2021, the allowance for obsolescence was $106,044 and $106,044, respectively.

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Inventories consisted of the following at March 31, 2022 and December 31, 2021:

NOTE 4 –5 -   SUBSEQUENT EVENTS

In accordance with ASC 855-10 management reviewed all material events through the date of this report.  There are no material subsequent events to report.

Item 2. Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-LookingForwardLooking Statements

The Private Securities Litigation Reform Act of 1995 (the “Act”“Act”) provides a safe harbor for forward-looking statements made by or on behalf of our Company. Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,“forward-looking,” including statements contained in this Annual Report and other filings with the Securities and Exchange Commission and in reports to our Company’sCompany’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’sCompany’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’smanagement’s views and assumptions, as

of the time the statements are made, regarding future events and business performance. There can be no assurance however, that management’smanagement’s expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

·●

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest;

·●

Changes in U.S., global or regional economic conditions;

·●

Changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’sCompany’s access to, or increase the cost of, external financing for our operations and investments;

·●

Increased competitive pressures, both domestically and internationally;

·●

Legal and regulatory developments, such as regulatory actions affecting environmental activities;

·●

The imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls;

·●

Adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  The Company believes there have been no other significant changes during the nine monththree-month period ended September 30, 2017,March 31, 2022, to the items disclosed as significant accounting policies in management's Notes to the Financial Statements in the Company's Annual Report on Form 10-K10 for the year ended December 31, 2016.2021.

Plan of Operation and Business Growth

Our revenues during the three month reporting periods increased 52% during 2017 compared to 2016 revenues.  

Our efforts continue to be focused on increasing the sales of our life science consumables and detectors while, at the same time, working to enhance the design of our liquid nitrogen refrigeration products.  Of those liquid nitrogen refrigeration products, the ultra-low temperature freezer is receiving highest priority.  We have received positive feedback of the improvements and enhancements made to the design of the ultra-low temperature freezer. We also continue work on the refrigerated trailer, or “reefer.“reefer.”  We have our first manufactured unit operational, have conducted a number of road tests and are working to develop alliances with contract manufacturers for those products.

We also continue to focus on the expansion of our detector.  We believe that the enhanced functionality ofare receiving considerable interest in our latest detector design, coupled with its low cost, provides us withproduct introduction, which is an ultra-cold chiller used in the manufacture of CBD oil.  This unit improves the efficiency of the manufacturing process and enables the production of a competitive edge over products currently being soldhigher purity in that specialized market.the CBD oil produced.

Concurrent with the development and commercialization of the above products, we have completed our on-line catalog and are making progress in enrolling new distributors for our consumable products.  

An analysis of operating results for the three and nine months ended September 30, 2017March 31, 2022 and 2021 follows.

Results of Operations

Three Months Ended September 30, 2017March 31, 2022 and 20162021

Revenues increased during the quarterthree-month period ended September 30, 2017,March 31, 2022, to $325,870$753,576 from $214,404$562,362 for the quarterthree-month period ended September 30, 2016,March 31, 2021, an increase of $111,466.$191,214.  The increase resultsin revenue is primarily fromattributable to a $167,865 increase in the sale of ultra-low temperature freezers which generated revenue of $106,400 in 2017 but no revenue in 2016. We are continuing work to increase our market penetration in the ultra-low temperature freezer market.

and chillers.  Cost of goods increased in the quarter ending September 30, 2017,March 31, 2022, as compared to September 30, 2016,March 31, 2021, to $84,636$234,289 from $74,581,$143,795, an increase of $10,055. The small cost of goods increase, in comparison to the increase in revenue, is attributable to the sale of ultra-low temperature freezers, which carry higher margins than the specialty laboratory products.$90,494. We realized a gross profit percentage of 69% for the three months ended March 31, 2022, compared to 74% for the three months ended September 30, 2017, compared to 65% for the three months ended September 30, 2016.March 31, 2021.  The gross profit percentage is dependent on the mix of product sales, which varies from quarter to quarter.  The increased sale of freezers and chillers during the 2022 period was offset slightly by higher costs, resulting in the slightly lower margins.  We continue to actively work to obtain more favorable pricing from our vendors in order to increase the margins realized on all product lines.  

Operating expenses decreased to $182,177 inwere $312,782 for the three months ended September 30, 2017, a decreaseMarch 31, 2022, an increase of $7,511$30,718 over the expenses of $189,688$282,064 incurred in the three monththree-month period ended September 30, 2016.March 31, 2021.  The reduction is attributableincrease results from a $33,675 increase in salaries and wages, as we have hired additional personnel to decreasesmeet the demand for freezers and chillers, and a $16,628 increase in licenses, bank feesresearch and auto expenses,development costs, offset in part by small increasesa $19,585 decrease in a number of other expense categories.general and administrative expenses. While we continue to monitor and minimize operating costs, we also realize that certain levels of expenditures are required in order to commercialize the products and achieve market penetration.

The net profitResearch and development expenses for the three months ended March 31, 2022 were $25,325, an increase of $16,628 in expenses for the same period in 2021, as enhancements to the ultra-cold CBD oil chiller continue to be made.  

Salaries and wages for the three months ended March 31, 2022 were $170,279, an increase of $33,675 as compared to the expense for the three month period ended September 30, 2017 was $59,057, an increase of $108,977 fromMarch 31, 2021.  Additional personnel have been hired in order to enable the $49,920 losscompany to meet the sales demand for the three month period ended September 30, 2016.  Management continues toour chillers and freezers.

look for opportunities to increase sales, improve gross marginsGeneral and control ongoing operating expenses.

The net profit of $59,057 for the three month period ended September 30, 2017 represents a profit of $0.00 per share.  This compares to the net loss of $49,920, or $(0.00) per share,administrative expenses for the three months ended September 30, 2016.

Nine Months Ended September 30, 2017 and 2016

Revenues decreased duringMarch 31, 2022 were $117,178, a $19,585 decrease from the nine month period ended September 30, 2017, to $880,072 from $975,761$136,763 for the nine monthsame period ended September 30, 2016, a decrease of $95,489.in 2021.  The decrease results primarily from the sale of ultra-low temperature freezers which generated revenue of $170,253 in 2017 compared to $231,340 in 2016. We are continuing work to increase our market penetration in the ultra-low temperature freezer market.

Due to lower sales during the reporting period, cost of goods decreased in the nine month period ending September 30, 2017, as compared to September 30, 2016, to $266,328 from $286,946, a decrease of $20,618. The change results from lower ultra-low temperature freezer sales, which carry higher margins than the specialty lab products.  We realized a gross profit percentage of 70% for the nine months ended September 30, 2017, compared to 71% for the nine months ended September 30, 2016.  The gross profit percentage is dependent on the mix of product sales, which varies from quarter to quarter. We continue to actively work to obtain more favorable pricing from our vendors in order to increase the margins realized on all product lines.  

Operating expenses decreased to $543,978 in the nine months ended September 30, 2017, a decrease of $76,733 over the expenses of $620,751 incurred in the nine month period ended September 30, 2016.  The reductionexpense level was primarilynot the result of lower expenditures for research and developmentsignificant savings in any one expense category but is, rather, the cumulative result of $27,047, promotion expense of commission expense of $6,783, licenses of $11,031 and promotion expense of $3,313. While we continue to monitor and minimize operating costs, we also realize that certain levels of expenditures are requiredsmall savings in order to commercialize the products and achieve market penetration.  numerous expenses.

The net profitNet income for the nine monththree-month period ended September 30, 2017March 31, 2022 was $69,766, an increase of $2,002$206,506, a $41,263 decrease from the $67,764 profit$282,064 net income for the nine monththree-month period ended September 30, 2016.March 31, 2021.  Management continues to look for opportunities to increase sales, improve gross margins and control ongoing operating expenses.

The net profitincome of $69,766$206,506 for the nine monththree-month period ended September 30, 2017March 31, 2022 represents a profitincome of $0.00 per share.  This compares to the net profitincome of $67,764,$282,064, or $0.00 per share, for the ninethree months ended September 30, 2016.March 31, 2021.

Seasonality and Cyclicality

We do not believe our business is cyclical.

Liquidity and Capital Resources

Our cash resources at September 30, 2017,March 31, 2022, were $175,357,$1,579,533, with accounts receivable of $206,000,$233,329, net of allowance, and inventory of $231,606,$695,607, net of allowance. Our working capital on September 30, 2017,March 31, 2022, was $578,174.$2,281,502.  Working capital on December 31, 20162021 was $508,387.$2,063,516.

For the nine monththree-month period ended September 30, 2017,March 31, 2022, net cash usedprovided by operating activities was $88,607$105,609, which compares to $32,145is a decrease of $158,664 over the $264,273 net cash provided by operating activities for the nine monththree-month period ended September 30, 2016.  March 31, 2021.

Off-Balance Sheet Arrangements

We lease office and warehouse space under a non-cancelable operating lease in Utah.  The office lease has been extended through November 30, 2020.  Future minimum lease payments under the operating lease at September 30, 2017, are $135,277 for that facility.  In addition, on July 7, 2017, the Company entered into an automobile lease with a term of four years.  . Future minimum lease payments under this lease are $30,816 at September 30, 2017.  The lease has an expiration date of July 7, 2021.None.

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

Not required.

Item 4.  Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based upon this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that information required to be disclosed is recorded, processed, summarized and reported within the specified periods, and is accumulated and communicated to management, including our Chief Executive Officer and Principal Financial Officer, to allow for timely decisions regarding required disclosure of material information required to be included in our periodic Securities and Exchange Commission reports.  Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are not effective at that reasonable assurance level as of the end of the period covered by this report based upon our current level of transactions and staff.  However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote

(b)

Changes in Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act.  Management reviewed our internal controls over financial reporting, and there have been no changes in our internal controls over financial reporting for the nine monththree-month period ended September 30, 2017March 31, 2022 that have materially affected, or are like to affect, our internal controls over financial reporting.

PART II  - OTHER INFORMATION

ITEM 1.  Legal Proceedings

None; not applicable.

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

None; not applicable.

Use of Proceeds of Registered Securities

None; not applicable.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the ninethree months ended September 30, 2017,March 31, 2022, we have not purchased any equity securities nor have any officers or directors of the Company.

ITEM 3.  Defaults Upon Senior Securities

None

ITEM 4.  Mine Safety Disclosure

Not applicable.

ITEM 5.  Other Information.

None

ITEM 6.  Exhibits

(a)

Exhibits.

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Exhibits

Additional Exhibits Incorporated by Reference

* Previously filed and incorporated by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Reflect Scientific, Inc.

(Registrant)

Date:

NovemberMay 13, 20172022

By:  /s/ Kim Boyce

Kim Boyce, CEO, President and Director

Date:

NovemberMay 13, 20172022

By:  /s/ Tom Tait

        Tom Tait, Vice President and Director

Date:

NovemberMay 13, 20172022

By:  /s/ Keith MerrellKim Boyce___

        Keith Merrell,Kim Boyce, CFO, Principal Financial

Officer

21