PharmChem : AMENDED 1st Quarter - 3.31.2022 Financial Statements and OTCIQ Disclosure

PHARMCHEM, INC.

BALANCE SHEETS (AMENDED)

March 31, 2022 and December 31, 2021

	March 31,		December 31,
		2022			2021
Assets	(unaudited)			(audited)
Current assets:	$	2,260,698	$	2,217,270
Cash and cash equivalents
Accounts receivable, net of allowance for		694,816			676,883
doubtful accounts of $15,000 in 2021 and 2020
	241,200			241,200
Income tax receivable
Inventories		239,122			68,009
Prepaid expenses and other current assets		54,435			20,124
Total current assets		3,490,271			3,223,486
Office equipment and leasehold improvements, net		585			627
Deferred tax asset, net		94,996			166,861
Total assets	$	3,585,852	$	3,390,974

Liabilities and Stockholders' Equity

Current Liabilities: Accounts payable

Accrued expenses and other liabilities Deferred revenue

Total liabilities

Commitments and contingencies

Stockholders' equity:

Common stock, $0.001 par value, 25,000,000 shares authorized, 5,103,273 issued and outstanding

Additional paid-in capital Accumulated deficit

Total stockholders' equity

$ 228,193 139,355 99,112

466,660

5,103

13,819,663

(10,705,574)

3,119,192

$ 188,941 265,745 87,772

542,458

5,103

13,819,663

(10,976,250)

2,848,516

Total liabilities and stockholders' equity

$ 3,585,852

$ 3,390,974

1

PHARMCHEM, INC.

STATEMENTS OF INCOME (AMENDED)

Three Months Ended March 31, 2022 and 2021

(unaudited)

		Three Months Ended		Three Months Ended
		March 31,		March 31,
			2022		2021
Sales, net	$	1,540,328	$	1,641,470
Cost of sales		562,142			600,230
Gross profit		978,186			1,041,240
Operating expenses:
Sales and marketing		278,475			104,766
General and administrative		357,675			399,402
Total operating expenses		636,150			504,168
Income from operations		342,036			537,072
Other income (expense):
Dividend and interest income		178			702
Other income (expense)		327			-
Total other income		505			702
Income before provision for income taxes		342,541			537,774
Federal - current		-			118,980
Federal - deferred*		71,865			-
Total provision for income taxes		71,865			118,980
Net income	$	270,676	$	418,794
Earnings per Share		$0.053			$0.072
Diluted Earnings per Share		$0.051			$0.060
Common shares outstanding		5,103,273			5,852,593
Diluted common shares outstanding			5,343,273			6,992,593

*

The financial statements marked "AMENDED" differ from the unaudited financial statements previously presented as a journal entry of $71,865 was made to the March balances, after reconsideration of the correct treatment of the Deferred Tax Asset shown on the balance sheet. The deferred tax asset was reduced and the Provision for income taxes - Federal - deferred was increased by this amount.

2

PHARMCHEM, INC.

STATEMENTS OF CHANGES IN STOCKHOLERS' EQUITY (AMENDED)

Three Months Ended March 31, 2022

(unaudited)

			Additional
	Common		Paid in		Accumulated
	Stock		Capital		Deficit		Total
Balance at December 31, 2020	$5,853	$19,629,983	$(12,126,019)	$7,509,817
Net Income				1,852,080	1,852,080
Dividends Paid				(702,311)	(702,311)
Repurchase of Options		(2,282,619)			(2,282,619)
Repurchase of Common Stock	(750)		(3,527,701)				(3,528,451)
Balance at December 31, 2021	$5,103	$13,819,663	$(10,976,250)	$2,848,516
Net Income					270,676		270,676
Balance at March 31, 2022	$5,103		$13,819,663		$(10,705,574)		$3,119,192

3

PHARMCHEM, INC.

STATEMENTS OF CASH FLOWS (AMENDED)

Three Months Ended March 31, 2022 and 2021

(unaudited)

		March 31,		March 31,
Operating Activities		2022			2021
Net income	$	270,676	$	418,794
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation		42			42
Provision for doubtful accounts		-			-
Net realized (gain) on investments
in marketable securities		-			-
Deferred tax asset		71,865			-
Net changes in operating assets and liabilities:
Accounts receivable		(17,769)			(162,281)
Bad debt recoveries		(164)			-
Inventories		(171,113)			(46,777)
Prepaid expenses and other current assets		(34,311)			13,977
Accounts payable		36,808			103,774
Accrued expenses and other liabilities		(123,946)			(317,413)
Deferred revenue		11,340			7,260
Total Adjustments		(227,248)			(401,418)
Net cash provided by operating activities		43,428			17,376
Investing Activities
NetSuite Capitalization		-			(23,990)
Net cash provided by (used in) investing activities		-			(23,990)
Financing Activities
Dividends paid		-			-
Net cash used in financing activities		-			-
Net (decrease)/increase in cash and equivalents		43,428			(6,614)
Cash and equivalents at beginning of year		2,217,270			7,854,649
Cash and equivalents at end of quarter	$	2,260,698	$	7,848,035
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for federal and state income
taxes	$	-	$	-

4

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