Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
  1. Homepage
  2. Equities
  3. United States
  4. OTC Markets
  5. VYSTAR
  6. News
  7. Summary
    VYST   US92927N1063

VYSTAR

(VYST)
Delayed OTC Markets  -  01:29 2022-11-28 pm EST
0.002400 USD   -4.00%
10/13Vystar Corp : Other Events, Financial Statements and Exhibits (form 8-K)
AQ
10/13Vystar's Subsidiary, Rotmans going out of business as Steve Rotman retires from Rotmans Furniture
GL
10/13Vystar's Subsidiary, Rotmans going out of business as Steve Rotman retires from Rotmans Furniture
AQ
SummaryQuotesChartsNewsCompanyFinancialsFunds 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news
Days
:
Hours
:
Minutes
:
Seconds

VYSTAR CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

06/08/2022 | 05:30pm EST

OVERVIEW

This analysis of our results of operations should be read in conjunction with the accompanying financial statements. This Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Statements that are predictive in nature and that depend upon or refer to future events or conditions are forward-looking statements. Although we believe that these statements are based upon reasonable expectations, we can give no assurance that projections will be achieved. Please refer to the discussion of forward-looking statements included in Part I of this Report.



About RxAir


RxAir promotes a healthy lifestyle through the use of its innovative, patented ViraTech air purification technology, thereby improving the quality of life of each and every customer. Independently tested by the U.S. Environmental Protection Agency ("EPA") and U.S. Food and Drug Administration ("FDA") certified laboratories, the RxAir has been proven to destroy greater than 99% of bacteria and viruses and reduce concentrations of odors and volatile organic compounds ("VOCs"). The RxAir uses high-intensity germicidal UV lamps that destroy bacteria and viruses instead of just trapping them, setting it apart from ordinary air filtration units. RxAir® and ViraTech® are registered trademarks of Vystar Corp. For more information, visit http://www.RxAir.com.

The Company's RxAir product line use 48 inches of high-intensity germicidal UV lamps that destroy bacteria, viruses and other germs instead of just trapping them, setting it apart from ordinary air filtration units. RxAir is one of the few UV air purifiers that have been proven in independent EPA- and FDA- certified testing laboratories to destroy on the first pass 99.6% of harmful airborne viruses and bacteria. In addition to inactivating airborne viruses that cause influenza (flu) and colds, RxAir's device disarms the airborne pathogens that cause MRSA (staph), strep (whooping cough), tuberculosis (TB), measles, pneumonia and a myriad of other antibiotic-resistant and viral infections.

The RxAir product line includes:



  ? RxAir™ Residential Filterless Air Purifier
  ? RX400 ™ FDA cleared Class II Filterless Air Purifier
  ? RX3000™ Commercial FDA cleared Class II Air Purifier



Vystar produces the RxAir product line with a new world-class manufacturer and an expert U.S. engineer with a full understanding of the RxAir technology. Vystar sells RxAir residential and commercial units through multiple distributors and the Company's website. Once distribution channels are firmly established, Vystar expects the air purification products will produce margins of approximately 70%.

Vystar's Board of Directors have approved preliminary plans to spin off the Air Purification product lines into a separate legal entity which Vystar intends to take public. Vystar anticipates retaining approximately 20% of the shares in the new entity and will distribute the remaining ownership percentage to Vystar shareholders. This plan is expected to be executed in 2022.



About Rotmans


Rotmans, one of the largest independent furniture retailers in the U.S., encompassing over 170,000 square feet in Worcester, Mass., and employing approximately 50 people, was founded and has been under the leadership of the Rotman family for the past 50 years. Rotmans is expected to add approximately $20 million annually to Vystar's top line revenue and enable Vystar to capitalize on the infrastructure already in place for accounting, retail sales facilities and staff, customer service, warehousing, and delivery. Significant marketing and advertising opportunities are available for all of Vystar's brands to Rotmans' thousands of existing customers. Steven Rotman and a group of dedicated employees provide continuity of management and customer-focused values for the Company.



33







About Vytex


Vytex is a multi-patented latex raw material in which the allergy causing proteins are reduced to a level that falls at or below detection based on ASTM approved test methods. Vytex has been available as a raw material commercially for ten years and through that time has a dedicated group of manufacturers who use it in end products such as electrical gloves, condoms, adhesives, etc. Ironically, most use Vytex as it's better for their manufacturing process as an easier to use raw material and not for protein properties. As of mid-2020 Vystar and the Indian Rubber Manufacturers Research Association's (IRMRA) have been actively collaborating to develop viscoelastic deproteinized natural rubber (DPNR) variants having properties for expanding applications in specific new arenas such as green tires, biodegradable and other unique bioelastoplast product lines that desire a new approach. Additionally, this research, while slowed by the COVID-19 pandemic, has also shown attributes with extra low ammonia offerings that are desired and now sampled.

Towards the end of 2020, Vystar entered into a Market Development and Distribution Agreement with Corrie MacColl, Ltd. (CMC Global) to produce, develop and manage the Vytex product and supply lines. This agreement will allow Vystar to expand the market for its Natural Rubber Latex products and has garnered much attention across a broad range of industries including liquid Vytex as well as the newly developed dry rubber Vytex. As of the date of this report, CMC Global has provided numerous opportunities that are in a trial basis or moving towards manufacturing trials in industries that use a significant amount of natural rubber latex, hence Vytex. Additionally Vystar now has a testing supply of Vytex dry rubber for larger trials. The success of early trials and the shipping crisis has led to broader spectrum of manufacturers combining the potential of Cameroon production with strategically placed contract manufactures based on geographical needs. Also Vystar research has shown great strides in specializing liquid Vytex to meet the immediate needs of customers such as low or no nitrosamine and others (discussed below) and additional patents have been proposed.

Vytex researcher Dr. Ranjit Matthan and CMC Global Director John Heath presented at The International Latex Conference which was held virtually July 20 to 22, 2021 and offered a plenary session entitled "Innovations and Sustainability in Natural Rubber Latex - The New Paradigm." The presentation discussed the dramatic effect the COVID-19 pandemic has had on the natural rubber supply chain, and how the industry is reacting the new economic circumstances; including strategy and policy shifts in supply chain management and restoring greater geographic diversification of latex processing and product manufacturing. The R&D association with IRMRA promises quicker laboratory and field-based testing and evaluations downstream. At Vystar, the recalibrated sustainability programme (FSC, nitrosamines & ammonia free, ultralow proteins, no SVHC and green carbon neutrality) emphasize certifications with Corrie MacColl market reach facilitating faster rollouts. Nontraditional/non Hevea brasiliensis based production efforts are likely to continue to face new penetration and high cost-benefit acceptance challenges in this decade. A PDF of the full presentation is available on vytex.com.

Additionally, in August 2021, Dr. Matthan presented new data to the Automotive Tyre Manufacturers' Association including Vytex dry rubber.

In Halcyon Agri (owner of CMC Global), 2020 Corporate Report: "Our group-wide innovation capabilities have enabled us to engage in innovative commercial partnerships. Corrie MacColl is collaborating with Vystar Corporation to transform our Cameroon plantation output into ultra-pure latex with stronger molecular bond that offers enhanced strength, durability and flexibility in the end products. This is achieved by removing non-rubber components and 99.85% of the proteins."



About FEC


Vystar is looking to Fluid Energy as it moves forward in its quest for a cleaner and safer environment. The Company is planning to improve its air purifying by using the ultrasonic technology of Fluid Energy and combining it with its leading UV-C technology. The designs and prototypes are in development. This ultrasonic technology is applied into water products with the same goal. We have working prototypes for our water product targets that have tested beyond expectation for bacterial killing and flow metering. We will begin soon evaluating our ability to eradicate hard water pollution that fouls pools, fountains, and pumps. These products will move us toward living more safely and cleanly in our environment.

Impact of COVID-19 on Our Business

The COVID-19 pandemic has resulted in significant economic disruption and adversely impacted our business. We closed the Rotmans showroom on March 24, 2020. At that time, most of our team members were furloughed. During this period, we paid the cost of enrolled health benefits of those furloughed. We successfully reopened the showroom on June 10, 2020. We continue to work closely with local authorities and follow the guidance of the Centers for Disease Control and Prevention ("CDC"), implementing enhanced cleaning measures, social distancing and the utilization of face masks for the safety of team members, customers and communities.

It has caused, among other things, interruptions in our supply chains and suppliers, including potential problems with inventory availability and the potential result of the volatility or higher cost of product and international freight due to the high demand of products and low supply for an unpredictable period of time.

The COVID-19 pandemic is complex and continues to evolve with the emergence and spread of variants. At this time, we cannot reasonably estimate the duration of the pandemic and its influence on consumers and our business.



34







RESULTS OF OPERATIONS



Comparison of the Three Months Ended March 31, 2022 with the Three Months Ended
March 31, 2021



                                                Three Months Ended March 31,
                                  2022             2021           $ Change         % Change

                                                        CONSOLIDATED

Revenue                        $ 3,839,258     $ 12,868,119     $ (9,028,861 )          -70.2 %

Cost of revenue                  1,660,274        6,076,840       (4,416,566 )          -72.7 %

Gross profit                     2,178,984        6,791,279       (4,612,295 )          -67.9 %

Operating expenses:
Salaries, wages and benefits       908,482        1,949,139       (1,040,657 )          -53.4 %
Share-based compensation           137,948          204,696          (66,748 )          -32.6 %
Agent fees                         418,179        1,251,873         (833,694 )          -66.6 %
Professional fees                  189,403           20,183          169,220            838.4 %
Advertising                        293,488          865,178         (571,690 )          -66.1 %
Rent                               183,727          316,615         (132,888 )          -42.0 %
Service charges                    107,172          224,516         (117,344 )          -52.3 %
Depreciation and
amortization                       150,580          192,009          (41,429 )          -21.6 %
Other operating                    655,614          796,413         (140,799 )          -17.7 %

Total operating expenses         3,044,593        5,820,622       (2,776,029 )          -47.7 %

Loss from operations              (865,609 )        970,657       (1,836,266 )         -189.2 %

Other income (expense):
Interest expense                  (179,309 )       (175,847 )         (3,462 )            2.0 %
Change in fair value of
derivative liabilities              57,000         (129,000 )        186,000           -144.2 %
Gain on settlement of debt,
net                                      -        1,247,635       (1,247,635 )         -100.0 %
Other income, net                   33,952           57,747          (23,795 )          -41.2 %

Total other income
(expense), net                     (88,357 )      1,000,535       (1,088,892 )         -108.8 %

Net income (loss)                 (953,966 )      1,971,192       (2,925,158 )         -148.4 %

Net (income) loss
attributable to
noncontrolling interest            179,612       (1,053,065 )      1,232,677           -117.1 %

Net loss attributable to
Vystar                         $  (774,354 )   $    918,127     $ (1,692,481 )         -184.3 %




Revenues


Revenues for the three months ended March 31, 2022 and 2021 were $3,839,258 and $12,868,119, respectively, for an decrease of $9,028,861 or 70.2%. The decrease in revenues was due to the success of the high impact closing to remodel sale at Rotmans in 2021.

The Company reported a significant decrease in gross profit to $2,178,984 for the three-month period ended March 31, 2022 compared to gross profit of $6,791,279 for the three-month period ended March 31, 2021, a decrease of $4,612,295 or 67.9%. The decrease in gross profit is consistent with the decrease in revenues.

The cost of revenue for the three months ended March 31, 2022 and 2021 was $1,660,274 and $6,076,840, respectively, a decrease of $4,416,566 or 72.7%.



35







Operating Expenses


The Company's operating expenses consist primarily of compensation and support costs for management and administrative staff, and for other general and administrative costs, including professional fees related to accounting, finance, and legal services as well as advertising, rent and other operating expenses. The Company's operating expenses were $3,044,593 and $5,820,622 for the three months ended March 31, 2022 and 2021, respectively, a decrease of $2,776,029 or 47.7%. The decrease was due in part to reduced revenues and the closing of a second warehouse occupied by Rotmans until October 2021.



Other Income (Expense)


Other income (expense) for the three months ended March 31, 2022 was ($88,357) which consisted of interest expense of ($179,309), change in fair value of derivative liabilities of $57,000 and other income, net of $33,952. This compares to other income (expense) of $1,000,535 for the three months ended March 31, 2021, which consisted of interest expense of $175,847, change in fair value of derivative liabilities of ($129,000), gain on settlement of debt, net of $1,247,635 and other income, net of $57,747. Included in gain on settlement of debt, net is PPP loan forgiveness of $1,402,900.



Net Income (Loss)


Net income (loss) was ($953,966) and $1,971,192 for the three months ended March 31, 2022 and 2021, respectively, a decrease of $2,925,158 or 148.4%. Net loss in the quarter ended March 31, 2022 versus net income in the same period in 2021 was due to PPP loan forgiveness of $1,402,900 and increased sales and margins from the operations of a high impact closing to remodel sale at Rotmans in 2021.

LIQUIDITY AND CAPITAL RESOURCES

The Company's financial statements are prepared using the accrual method of accounting in accordance with U.S. GAAP and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, we have incurred significant losses and experienced negative cash flow since inception. At March 31, 2022, the Company had cash of $172,340 and a deficit in working capital of approximately $9.3 million. Further, at March 31, 2022, the accumulated deficit amounted to approximately $52.2 million. We use working capital to finance our ongoing operations, and since those operations do not currently cover all of our operating costs, managing working capital is essential to our Company's future success. Because of this history of losses and financial condition, there is substantial doubt about the Company's ability to continue as a going concern.

A successful transition to profitable operations is dependent upon obtaining sufficient financing to fund the Company's planned expenses and achieving a level of revenue adequate to support the Company's cost structure.

Management plans to finance future operations using cash on hand, as well as increased revenue from RxAir air purifier sales and Vytex license fees. The Company will also raise capital with common stock subscription issuances. The current agreement with a national sales event company has allowed Rotmans to meet its financial obligations and provided the Company flexibility and time needed to develop a new retail furniture sale model.

There can be no assurances that we will be able to achieve projected levels of revenue in 2022 and beyond. If we are not able to achieve projected revenue and obtain alternate additional financing of equity or debt, we would need to significantly curtail or reorient operations during 2022, which could have a material adverse effect on our ability to achieve our business objectives, and as a result, may require the Company to file bankruptcy or cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions.

Our future expenditures will depend on numerous factors, including: the rate at which we can introduce RxAir products and license Vytex NRL raw material and the foam cores made from Vytex to manufacturers and subsequently retailers; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, along with market acceptance of our products, and services and competing technological developments. As we expand our activities and operations, our cash requirements are expected to increase at a rate consistent with revenue growth after we achieve sustained revenue generation.



36







Sources and Uses of Cash



Net cash provided by operating activities was $23,514 for the three months ended March 31, 2022 as compared to net cash used in operating activities of $1,162,325 for the three months ended March 31, 2021. During the three months ended March 31, 2022, cash provided by operations was primarily due to the decrease of inventories and the increase of accounts payable and accrued expenses, and non-cash related add-back of share-based compensation expense, depreciation, amortization and change in fair value of derivative liabilities.

The Company had no cash used in investing activities during the three months ended March 31, 2022 as compared to $17,317 for the three months ended March 31, 2021.

Net cash used in financing activities was $2,349 during the three months ended March 31, 2022, as compared to cash provided of $1,754,962 during the three months ended March 31, 2021. During the three months ended March 31, 2022, cash was provided by related party advances of $40,000 which was offset by the repayment of finance lease obligations of $42,349. During the three months ended March 31, 2021, cash was provided by PPP loan proceeds of $1,402,900, related party term debt in the amount of $395,000 offset by the repayment of finance lease obligations of $42,938.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that may be reasonably likely to have a current or future material effect on our financial condition, liquidity, or results of operations.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; product development, introduction and acceptance; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

© Edgar Online, source Glimpses

All news about VYSTAR
10/13Vystar Corp : Other Events, Financial Statements and Exhibits (form 8-K)
AQ
10/13Vystar's Subsidiary, Rotmans going out of business as Steve Rotman retires from Rotmans..
GL
10/13Vystar's Subsidiary, Rotmans going out of business as Steve Rotman retires from Rotmans..
AQ
09/26VYSTAR CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ..
AQ
09/26Vystar Corporation Reports Earnings Results for the Second Quarter and Six Months Ended..
CI
06/08VYSTAR CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ..
AQ
06/08Vystar Corporation Reports Earnings Results for the First Quarter Ended March 31, 2022
CI
06/01Vystar Corp : Change in Directors or Principal Officers (form 8-K)
AQ
06/01Vystar Corporation Announces Resignation of Ranjit K. Matthan as Director
CI
05/17Vystar Corporation Reports Earnings Results for the Full Year Ended December 31, 2021
CI
More news
Financials (USD)
Sales 2021 27,6 M - -
Net income 2021 -2,70 M - -
Net Debt 2021 12,4 M - -
P/E ratio 2021 -4,00x
Yield 2021 -
Capitalization 3,24 M 3,24 M -
EV / Sales 2020 2,31x
EV / Sales 2021 0,85x
Nbr of Employees 82
Free-Float -
Chart VYSTAR
Duration : Period :
VYSTAR Technical Analysis Chart | MarketScreener
Full-screen chart
Income Statement Evolution
Managers and Directors
Steve Rotman President, Chief Executive Officer, CFO & Director
Joseph C. Allegra Chairman
Bryan Stone Independent Director
Byron L. Novosad Director
Lee Howley Investors Relations Contact