The following discussion of our operations and financial condition should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.





FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the "safe harbor" provisions under section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Act of 1995. We use forward-looking statements in our description of our plans and objectives for future operations and assumptions underlying these plans and objectives. Forward-looking terminology includes the words "may", "expects", "believes", "anticipates", "intends", "forecasts", "projects", or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based on management's current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Form 10-Q to reflect any change in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based. Factors which could cause such results to differ materially from those described in the forward-looking statements include those set forth under "Item. 1 Description of Business - Risk Factors" and elsewhere in or incorporated by reference into our Annual Report on Form 10-K for the year ended March 31, 2022.





BUSINESS OVERVIEW

The Company is a technology-based developer and manufacturer of diversified lines of products and derives revenue from the production and sale of electronics for medical devices and other applications; environmentally safe chemical products for industrial, medical and cosmetic uses; and, research, development, regulatory and engineering services. The Company has increased internal research and development by utilizing their engineering resources to advance their own proprietary medical device technologies.

The Company is a corporation that was organized under the laws of the State of Delaware on November 24, 1969. Our operations are conducted through ADM and its subsidiary Sonotron.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2022 AS COMPARED TO JUNE 30, 2021.

Revenues for the three months ended June 30, 2022 increased by $200,050. The increase is a result of increased sales of $56,918 in the Chemical segment and $242,118 in the Electronics segment offset by a decrease of $98,986 in the Engineering segment.

Gross profit for the three months ended June 30, 2022 increased by $118,973. The increase in gross profit resulted primarily from increased sales in Electronics and Chemical sales.

We are highly dependent upon certain customers. During the three months ended June 30, 2022, four customers accounted for 82% of our net revenue. Net revenues from foreign customers for the three months ended June 30, 2022 was $125,275 or 14%.

During the three months ended June 30, 2021, two customers accounted for 46% of our net revenue. Net revenues from foreign customers for the three months ended June 30, 2021 was $81,953 or 11%.

The complete loss of or significant reduction in business from, or a material adverse change in the financial condition of any of our customers could cause a material and adverse change in our revenues and operating results.

Loss from operations for the three months ended June 30, 2022 was ($34,625) compared to loss from operations for the three months ended June 31, 2021 of ($42,997).

Other income decreased $2,866 for the three months ended June 30, 2022. The decrease is attributable to less interest earned due to lower cash reserves as compared to June 30, 2021.

The foregoing resulted in a net loss before provision for income taxes for the three months ended June 30, 2022 of $(77,728). Earnings per share were ($0.00) for the three months ended June 30, 2022.


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LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2022, we had cash and cash equivalents of $887,546 as compared to $1,038,498 at March 31, 2022. The $150,952 decrease was primarily the result of cash used in operations during the three-month period in the amount of $164,222, offset with cash provided in financing activities of $13,270. Our cash will continue to be used for increased marketing costs, and increased production labor costs all in an attempt to increase our revenue, as well as increased expenditures for our internal R&D. We expect to have enough cash to fund operations for the next twelve months.

Below is a summary of our cash flow for the three-month ending periods indicated:

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