EDGAR 10-K Filing

Company CIK: 1543623
Filing Year: 2023
Filename: 1543623_10-K_2023_0001213900-23-038626.json

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ITEM 1. BUSINESS
Item 1. Business

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B - UNRESOLVED STAFF COMMENTS.
Not applicable.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
US Nuclear Corp is headquartered in Canoga Park, CA, and occupies a 6,000-square foot leased facility and 8,000 square foot leased facility in Milford, Ohio. The office is divided among the Company’s various disciplines: management, finance, sales, marketing and customer service, with 25% of the available space dedicated to inventory. Each location has a bookkeeper, production manager, assembly supervisor, production workers, and customer service staff.
The Company’s executive offices are located in Canoga Park, CA, at 7051 Eton Avenue, Canoga Park, California 91303. Per the Company’s lease agreement, the lease payment increased to $7,000 on August 1, 2016. Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. He holds an 8% interest in Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties. The following table lists the locations of all its current locations.
Location Address Size
Canoga Park, California 7051 Eton Avenue 6,000 square feet
Canoga Park, CA 91303
Milford, Ohio 1160 U.S. Route 50 8,000 square feet
Milford, OH 45150

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS.
None.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
Market Information
We have already been approved by FINRA for the Over-the-Counter Bulletin Board (“OTCBB”) trading and additionally have also been approved with the Depository Trust and Clearing Corporation or (“DTCC”) for DTC eligibility. Our stock ticker symbol is UCLE on the Over-the-Counter Bulletin Board. For information on shareholders who owns 5% or more of our common stock, as well as the ownership of our officers and directors, please see “Security Ownership of Certain Beneficial Owners and Management”.
Authorized Capital Stock
The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, par value $0.0001 per share, (the “Common Stock”) and 5,000,000 shares of Preferred Stock, (the “Preferred Stock”) par value $0.0001 per share, of which none have been designated or issued. As of December 31, 2022 we had (i) 31,621,242 shares of common stock outstanding, held of record by 53 shareholders, and (ii) no shares of preferred stock outstanding. As of May 10, 2023 there are 35,798,087 shares of common stock outstanding, held of record by 52 shareholders.
Description of Capital Stock
The following is a summary of the rights of our capital stock and certain provisions of our articles of organization, as amended, and by-laws. For more detailed information, please see our articles of organization, as amended, and by-laws filed as exhibits to this Current Report on Form 10-K. Each holder of the Company’s Common Stock is entitled to one vote for each share held on all matters submitted to a vote of shareholders and do not have cumulative voting rights. An election of directors by our shareholders shall be determined by a plurality of the votes cast by the shareholders entitled to vote on the election. The holders of Common Stock are entitled to receive pro rata dividends, when and as declared by the Board of Directors in its discretion, out of funds legally available therefore, but only if all dividends on the Preferred Stock have been paid in accordance with the terms of such Preferred Stock and there exists no deficiency in any sinking fund for the Preferred Stock.
Dividends on the Common Stock are declared by the Board of Directors. The payment of dividends on the Common Stock in the future, if any, will be subordinate to the Preferred Stock and will be determined by the Board of Directors. In addition, the payment of such dividends will depend on the Company’s financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant. The Company has heretofore never paid any dividends and the Board has no plans for the payment of future dividends. The Board presently plans for any future surplus income to be reinvested into growing the Company through additional investment.
Preferred Stock
The Board of Directors is authorized to provide for the issuance of shares of preferred stock in series and, by filing a certificate pursuant to the applicable law of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the shareholders. Any shares of preferred stock so issued would have priority over the common stock with respect to dividend or liquidation rights. Any future issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our Company without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to neither issue any preferred stock nor adopt any series, preferences or other classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holder to block such a transaction, or facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock. Although the Board of Directors is required to make any determination to issue such stock based on its judgment as to the best interests of our stockholders, the Board of Directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. The Board of Directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or stock exchange rules. We have no present plans to issue any preferred stock.
The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company’s Certificate of Incorporation and By-Laws, copies of which have been filed as exhibits to the Company’s Form 10 filed with the Securities Exchange Commission on March 2, 2012, as updated by the Company’s Form 8-K filed with the Securities Exchange Commission on October 15, 2013.
Dividends
We have not paid any dividends on our common stock and do not presently intend to pay cash dividends prior to the consummation of a business combination. The payment of cash dividends in the future, if any, will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to consummation of a business combination, if any. The payment of any dividends subsequent to a business combination, if any, will be within the discretion of our then existing board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, the board of directors does not anticipate paying any cash dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
Recent Sales of Unregistered Securities
During the year ending December 31, 2022, the Company issued 400,000 shares of common stock to Prashant Mehta in connection with the consulting services agreement entered into, by and between US Nuclear Corp and Prashant Mehta.
During the year ending December 31, 2022, the Company issued 625,000 shares of common stock in in relation to debt that was obtained.
During the year ending December 31, 2022, the Company issued 1,600,000 shares of common stock in satisfaction of principle, interest, and fees on a Convertible Note held by a third party.
During the year ending December 31, 2022, the Company issued 203,027 shares of common stock to Carter Terry & Co. in connection with investor relations services provided by the consultant.
During the year ending December 31, 2022, the Company issued 40,000 shares of common stock to Richard Cavalli in connection with investor relations services provided by the consultant.
During the year ending December 31, 2022, the Company issued 200,000 shares of common stock to Howard Isaacs in connection with investor relations services provided by the consultant.
Issuer Purchases of Equity Securities
None.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [Reserved]
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand US Nuclear Corp, our operations and our present business environment. MD&A is provided as a supplement to-and should be read in conjunction with-our consolidated financial statements and the accompanying notes thereto contained in “Item 8. Financial Statements and Supplementary Data” of this report on Form 10-K. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.
We were incorporated in Delaware on February 14, 2012, and on March 2, 2012, we filed a registration statement on Form 10 to register with the U.S. Securities and Exchange Commission as a public company. We were originally organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation.
On April 18, 2012, Richard Chiang, then our sole director and shareholder, entered into a Stock Purchase Agreement whereby Mr. Goldstein of US Nuclear Corp purchased 10,000,000 shares of our common stock from Mr. Chiang, which constituted 100% of our issued and outstanding shares of common stock. Mr. Chiang then resigned from all positions. Subsequently, on May 18, 2012, the Registrant appointed Mr. Chiang to serve as a member of the Board of Directors. He resigned from this position on March 31, 2013.
Since our acquisition of Overhoff Technology in 2006, we have had discussions with other companies in our industry for an acquisition. While we targeted Overhoff due to its unique position in the tritium market, we had not commenced an acquisition since our Overhoff Technology acquisition; we believe in part the reason was due to lack of additional capital, our status as a privately-held entity at the time, and focus on developing our own products. We will seek out companies whom our management believes will provide value to our customers and will complement our business. We will focus on diversifying our product line into a larger range so that our customers and vendors may have a more expansive experience in type, choice, options, price and selection. We also believe that with a more diverse product line we will become more competitive as our industry is intensely competitive.
Generally, our product concentration places a heavy reliance on our Overhoff Technology division. In 2022, we derived 55.9% of our total revenues from sales made by Overhoff to two customers. We expect to encounter a continuation of this trend unless we are successful in diversifying our client base, executing our acquisition strategy and experience increases in business from our Technical Associates division.
Our international revenues were 26.57% of our total revenue in 2022. We expect this to increase over time as we continue to field new orders inquires and engage new customers overseas and recover post-pandemic. We believe that South Korea and China will likely be a larger contributor to revenue within the next few years. While we maintain steady growth domestically, the international side of our business may be a larger component as nuclear technology and rapid development for clean energy grows abroad. Additionally, the Company relies on continued growth and orders from CANDU reactors (Canada Deuterium Uranium), and rapid development of the next generation of nuclear reactors called Molten Salt Reactors, (MSR) and Liquid-Fluoride Thorium Reactors (LFTR), all of which purchase tritium detection and monitor products. There can be no assurances as to our growth projections and our risk profile as we depend upon increased foreign customers for business.
Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. He holds an 8% interest in Gold Team Inc. and spends approximately 5 hours per week with affairs related to Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties at an expense of $7,000 for each facility per month.
On May 31, 2016, we entered into an Asset Purchase Agreement with Electronic Control Concepts (“ECC”) whereby the Company purchased certain tangible and intangible assets of ECC. ECC a small manufacturer of test and maintenance meters for x-ray machines both medical and industrial. We acquired ECC to give a boost to our current x-ray related product and hospital/medical product sales.
Cali From Above (“CFA”) is a US Nuclear Corp subsidiary which was formed and began operations on January 28, 2021. CFA is a commercially recognized aerial mapping, aerial surveying, and airborne inspections company. CFA was formed to expand the Company’s presence in the Unmanned Aerial Vehicle market. The Company believes this market is rapidly growing and changing and feel it is an important growth opportunity. Incorporating as its own subsidiary provides the opportunity to specialize specifically in UAVs and UAV services.
Results of Operations
For the year ended December 31, 2022 compared to the year ended December 31, 2021
Year Ended December 31, Change
$ %
Sales $ 2,091,366 $ 2,137,607 $ (46,241 ) -2.21 %
Cost of goods sold 1,303,298 760,955 542,343 41,61 %
Gross profit 788,068 1,376,652 (588,584 ) -74.69 %
Selling, general and administrative expenses 2,284,099 2,738,841 (454,742 ) -19.91 %
Loss from operations (1,496,031 ) (1,362,189 ) (133,842 ) 8.95 %
Other expense (546,764 ) (514,495 ) (32,269 ) 5.90 %
Loss before provision for income taxes (2,042,795 ) (1,876,684 ) (166,111 ) 8.13 %
Provision for income taxes - - - -
Net income (loss) $ (2,042,795 ) $ (1,876,684 ) $ (166,111 ) 8.13 %
Revenue for the year ended December 31, 2022, was $2,091,366 compared to $2,137,607 for the year ended December 31, 2021. The decrease of $46,241 or 2.21% is considered by management to be indicative of economic conditions as revenue across all subsidiaries post-Coronavirus pandemic remains constant, however growth was slowed in 2022 due to political and economic uncertainties. The revenue breakdown for the year ended December 31, 2022, is as follows:
North America 73.43%
Asia (including Japan) 25.03%
Other 1.54%
Our gross margin for the year ended December 31, 2022 was 37.68% as compared to 64.4% for the year ended December 31, 2021. The decrease in gross margin is due to a slight decrease in sales and an increase to cost of goods sold.
Selling and general and administrative expenses for the year ended December 31, 2022, decreased by $454,742 or 19.91% to $2,284,099; down from $2,738,841 for the year ended December 31, 2021. The decrease is largely attributed to a reduction in payroll costs.
Other expense for the year ended December 31, 2022, was $546,764, an increase of $32,269 from $514,495 for 2021. Other expense in 2022 consists of interest expense and amortization of debt discount. In 2021, other expense consisted of interest expense, write down of investments, interest expense, and equity loss in investment offset by a gain on forgiveness of debt.
Net loss for the year ended December 31, 2022, was $2,042,795 compared to net loss of $1,876,684 for the year ended December 31, 2021.
Liquidity and Capital Resources
Our operations have historically been financed by our majority stockholder. As funds were needed for working capital purposes, our majority stockholder would loan us the needed funds. During the year ended December 31, 2022, the Company’s majority shareholder paid expenses on behalf of the Company of $6,214 and loaned an additional $304,633 to the Company. We anticipate the growth of our business through the sale of our common stock and loans from our majority stockholder, if necessary.
At December 31, 2022, total assets increased by $257,551 or 8.28% from $2,851,186 at December 31, 2021 due to an increase in accounts receivable and inventory.
At December 31, 2022, total liabilities increased by 30.29% to $3,457,041 from $2,409,917 at December 31, 2021 due to an increase in accrued liabilities, accounts payable, accrued compensation paid to officers, convertible notes, note payable to shareholder, and an increase in our line of credit balances.
Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“US GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, 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 bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion 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.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Please see the financial statements beginning on page located elsewhere in this annual report on Form 10-K and incorporated herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, these disclosure controls and procedures were ineffective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible to establish and maintain adequate internal control over financial reporting. Our Officers are responsible to design or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The policies and procedures include:
● maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of assets,
● reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and
● reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
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 the end of the period December 31, 2022. 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. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the fiscal year December 31, 2022, our internal controls over financial reporting were not effective due to the following.
● Lack of proper segregation of duties.
● No formal documentation of our internal controls
● Lack of multiple levels of supervision and review
Changes in Internal Controls over Financial Reporting
Our management has determined that there were no changes made in the implementation of our internal controls over financial reporting during the fourth quarter of the year ended December 31, 2022.
Attestation Report of Independent Public Accounting Firm
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting because as a smaller reporting company we are not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
Not applicable

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
On June 30, 2022, US Nuclear Corp, a Delaware corporation (the “Company”) received notice of resignation by its Chief Financial Officer, Rachel Boulds. Ms. Boulds’ resignation did not result from any disagreement with the Company.
On the same day, the Company appointed its Chief Operating Officer, Richard Landry, to serve as the Chief Financial Officer of the Company effective as of June 30, 2022. Mr. Landry’s compensation will not be altered as a result of his appointment to CFO.
The following table contains information concerning our directors and executive officers through the date of filing of this report.
Name Age Position
Robert I. Goldstein President, Chief Executive Officer, and Chairman of the Board of Directors
Richard Landry Chief Financial Officer
Michael Hastings Member of the Board of Directors
Dell Williamson Member of the Board of Directors
Officers and Directors
Robert I. Goldstein -President, Chief Executive Officer and Chairman of the Board of Directors: Mr. Goldstein entered the radiation detection industry in 1972 as an applications engineer, production manager, and then general manager for Optron Scientific Company, Inc. DBA, Technical Associates. Mr. Goldstein is a physicist and an award- winning specialist in the nuclear radiation detection industry and has more than 30 years of experience in the field. He has authored more than 20 white papers and abstract presentations on industrial research use of radiation measurement equipment and instruments. His work has been approved by US Federal standards set by the EPA (Environmental Protection Agency), FDA (Food and Drug Administration), and NRC (Nuclear Regulatory Commission). Mr. Goldstein has also worked closely with and continues ongoing joint development programs with Los Alamos National Lab and Jefferson National Lab. He was instrumental in the acquisition of Overhoff Technology Corp, at the time, the world’s only tritium detection company, in 2006. His experience in the field of radiation detection ranges from development of instrumentation to design and development for air, water and surface applications. He is also an accomplished inventor having invented miniature radiation detectors for use during surgery. Mr. Goldstein graduated from MIT with a BS in Physics and from Stanford University with an MS in Mechanical Engineering. Mr. Goldstein is affiliated with the following scientific groups: Health Physics Society, American Nuclear Society, DOE (US Department of Energy) Tritium Focus Group, Air Monitoring User’s Group and Health Physics Instrument Committee.
Richard Landry - Chief Financial Officer, Director of Investor Relations and Business Development Consultant: Mr. Landry began his career in the financial world as a proprietary trader while in college; majoring in Mathematics and Applied Physics. Through an investment banking internship, Mr. Landry furthered his experience in Finance, which eventually lead him to Source 1 Capital, where he spear-headed the business development, marketing and assisted in structuring capital for public and private companies. This included advising, marketing, sourcing, evaluating, and conducting due diligence on new opportunities. Mr. Landry has been instrumental in assisting in raising/structuring almost $1.5B worth in new capital & deal flow. He has built-out and devised algorithms/trading strategies for top hedge funds, implemented CRMs for emerging tech companies, established sales growth strategies while maintaining regulatory requirements, worked with some of the largest asset management firms in the world such as; Fosun International and CIM, and was the Chief Compliance Officer of a Chinese tech firm where he assisted in their $150 million capital raise, as well as maintaining their compliance with China’s One Belt One Road Initiative. His responsibilities at US Nuclear Corp include marketing, research on new technologies, oversight of day-to-day activities, raising capital, procuring new contracts, and evaluating/structuring new acquisitions for the company.
Michael Hastings- Member of the Board of Directors: Mr. Hastings has been a corporate finance officer for over thirty years in the medical device industry with C.R. Bard, Inc. (predecessor to Becton Dickinson), and in the industrial battery industry with EnerSys, Inc. (NYSE: ENS). Mr. Hastings retired from EnerSys in 2011 as its Vice President and Treasurer with company revenue of $2 billion and operations in all parts of the world. His responsibilities included global treasury operations including debt and capital transactions; corporate tax; hedging of currencies, interest rate exposures and the price of raw materials; credit management; pension plan investments; and investor relations. He participated fully in due diligence, valuation and negotiation of numerous acquisitions. Mr. Hastings was also a member of the Board of Directors and Chief Financial Officer of MegaGraphite, Inc. - a private graphite exploration company in Canada between 2011 and when it was sold in 2014. Mr. Hastings was a member of the Board of Directors of Organic Transit, Inc., a private solar electric vehicle company in the United States, from 2018 until the company was sold in 2020. Mr. Hastings has no prior business relationship with the Company.
Dell Williamson- Member of the Board of Directors: Mr. Williamson began his career at Overhoff Technology Corporation (“Overhoff”) in 1982. As set forth in prior disclosures, Overhoff is an operating division of the Company, and thus an affiliate or related party of the Company. Mr. Williamson is currently the Vice President for production at Overhoff Technology Corporation. His duties include design, engineering and calibration as well as managing production. Mr. Williamson graduated from Cincinnati Technical College with a degree in electronics technology. He furthered his education and attended the University of Cincinnati where he majored in industrial management and mechanical engineering. Mr. Williamson has become an expert in the use, design and construction of Tritium measurement systems. He serves as the technical interface between the user/scientist and the Overhoff factory. He is a member of the following scientific groups: Health Physics Society, American Nuclear Society, DOE (US Department of Energy) Tritium Focus Group, DOE (US Department of Energy) Air Monitoring User’s Group, DOE (US Department of Energy) Health Physics Instrument Committee. Mr. Williamson has no prior experience in serving as a director of a publicly reporting company.
In particular,
● With respect to Mr. Goldstein, the board considered his perspective and experience with our ongoing strategy and operations that he has obtained through his service to the Company and his ability to evaluate and assist with potential acquisitions and business opportunities.
● With respect to Mr. Hastings, the board considered his extensive managerial and financial expertise, as well as his experience in the medical device industry and his previous experience serving on a board of directors.
● With respect to Mr. Williamson, the board considered his long tenure as Vice President of Overhoff Technology Corporation, as well as his technical and engineering expertise and knowledge he has obtained through his service to the Company.
The Board of Directors and Committees
As of the date of this Report, we had one independent director. We anticipate appointing additional independent directors as required in the future.
Audit Committee
As of the date of this Report, we did not have a standing Audit Committee. We intend to establish an Audit Committee of the Board of Directors, which will consist of independent directors, of which at least one director will qualify as a qualified financial expert as defined in the regulations of the SEC. The Audit Committee’s duties would be to recommend to our Board of Directors the engagement of independent auditors to audit our consolidated financial statements and to review our accounting and auditing principles. The Audit Committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors, if any, and independent public accountants, including their recommendations to improve the system of accounting and internal control. The Audit Committee would at all times be composed exclusively of directors who are, in the opinion of our Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles. As of the date of this Report, we did not have an audit committee financial expert, in light of our size, although we intend to review this issue as the Company grows, especially as the Company implements a standing Audit Committee.
Compensation Committee
As of the date of this Report, we did not have a standing Compensation Committee. We intend to establish a Compensation Committee of the Board of Directors. The Compensation Committee would review and approve our salary and benefits policies, including compensation of executive officers. The Compensation Committee would also administer any stock option plans that we may adopt and recommend and approve grants of stock options under such plans.
Nominating and Corporate Governance Committee
As of the date of this Report, we did not have a standing Nominating and Corporate Governance Committee. We intend to establish a Nominating and Corporate Governance Committee of the Board of Directors to assist in the selection of director nominees, approve director nominations to be presented for stockholder approval at our annual meeting of stockholders and fill any vacancies on our Board of Directors, consider any nominations of director candidates validly made by stockholders, and review and consider developments in corporate governance practices.
Compliance with Section 16(A) of the Securities Exchange Act Of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (“Section 16(a)”), requires our Directors and executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities (collectively, “Section 16 reporting persons”), to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other equity securities. Section 16 reporting persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of any such reports furnished to us, none of the Section 16 reporting persons failed to file on a timely basis reports required by Section 16(a) of the Exchange Act with respect to our most recent fiscal year ended December 31, 2022.
Code of Ethics
As of the date of this Report, we had not adopted a formal, written code of conduct (“Code of Ethics”) within the specific guidelines promulgated by the SEC, although we intend to adopt a Code of Ethics.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation
Our President, CEO and Chairman of the Board of Directors, Robert I. Goldstein and our Chief Financial Officer, Richard Landry are compensated for their services to the Company; no other officer receives compensation from the Company. Until the Company acquires additional capital, it is not anticipated that any other officer other than these three individuals will receive compensation from the Company other than reimbursement for out-of-pocket expenses incurred on behalf of the Company.
The Company has no stock option, retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but our officers and directors may recommend adoption of one or more such programs in the future.
Employment Agreements and Compensation
On November 4, 2014, we entered into a five-year Employment Agreement with our President, Chief Executive Officer and Chairman of the Board of Directors, Robert I. Goldstein. The Agreement calls for a salary of $100,000 per year, with his compensation beginning in fiscal 2015 and payable in January 2016. Mr. Goldstein later agreed to temporarily reduce his compensation to $50,000 for 2015. Compensation for 2016 increased to $100,000 as authorized by the Board of Directors and has remained $100,000 through December 31, 2022.
On February 27, 2019, we entered into an employment agreement with Richard Landry, our COO. Mr. Landry is entitled to receive monthly compensation of $10,000. During 2022, Mr. Landry became our CFO and his monthly compensation has remained the same.
Summary Compensation Table
The following table provides information regarding the compensation of our named executive officers for the years ended December 31, 2022 and 2021.
Name and Principal Position Year Salary Stock
Awards Option
Awards Non-Equity
Incentive
Plan
Compensation Other
Compensation Total
Robert I. Goldstein President, $ 100,000 $ -0- $ -0- $ -0- $ -0- $ 100,000
Chief Executive Officer, and Chairman of the Board of Directors (1) $ 100,000 $ -0- $ -0- $ -0- $ -0- $ 100,000
Richard Landry, $ 120,000 $ -0- $ -0- $ -0- $ -0- $ 120,000
Chief Financial Officer (2) $ 100,000 $ -0- $ -0- $ -0- $ -0- $ 100,000
(1) Mr. Goldstein has accrued unpaid salary.
(2) Mr. Landry has accrued unpaid salary.
Equity Incentive Plan
As of the date of this Report, the Registrant has not entered into any Equity Incentive Plans.
Option Grants in the Last Fiscal Year
No Stock Appreciation Rights (“SARs”) or options to purchase our stock were granted to the Named Executive Officers during fiscal year ended December 31, 2022.
Retirement Plan
We do not currently have any retirement plan, but we expect to adopt one in the near term.
Director Compensation
The following table provides information concerning the compensation of the directors of the Company for the past fiscal year:
Name Fees Earned or
Paid in Cash Stock
Awards All Other
Compensation Total
Robert I. Goldstein $ 0 $ 0 $ 0 $ 0
Michael Hastings $ 0 $ 0 $ 0 $ 0
Dell Williamson $ 0 $ 0 $ 0 $ 0
Audit Committee Financial Expert
The Company does not have an audit committee financial expert.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the date of this Report, there were 35,798,087 shares of common stock issued and outstanding. The following table sets forth certain information regarding the beneficial ownership of the outstanding shares as of the date of this Report, (i) each of our executive officers and directors; and (ii) all of our executive officers and directors as a group.
Except as otherwise indicated, each such person has investment and voting power with respect to such shares, subject to community property laws where applicable. The address for all individuals for whom an address is not otherwise indicated is 7051 Eton Avenue, Canoga Park, CA 91303.
Name of Beneficial Owner Amount and
Nature of
Beneficial
Ownership Percent (%) of
Common
Stock
Robert I. Goldstein, President & CEO, Chairman 10,850,000 34.3 %
Richard Landry, CFO 242,823 *
Michael Hastings, Board Member 639,051 2.0 %
Dell Williamson, Board Member 60,000 *
All Directors and Officers as a Group (5 persons) 11,791,874 37.3 %
* indicates less than 1%
Significant Employees
We are dependent on the experience, knowledge, skill and expertise of our President and CEO Robert I. Goldstein. We are also in large part dependent on Dell Williamson, Manager of the Overhoff Division, and Ivan Mitev, our Chief Engineer at the Overhoff Division, Ian Embry in sales, and Rowena Paredes in accounting. The loss of any of the key personnel listed above could materially and adversely affect our future business efforts. Our success depends in substantial part upon the services, efforts and abilities of Robert I. Goldstein, our Chairman and Chief Executive Officer, due to his experience, history and knowledge of the nuclear radiation industry and his overall insight into our business direction. The loss or our failure to retain Mr. Goldstein, or to attract and retain additional qualified personnel, could adversely affect our operations. We do not currently carry key-man life insurance on Mr. Goldstein or any of our officers and have no present plans to obtain this insurance.
Family Relationships
There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.
Involvement in Certain Legal Proceedings
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.
Meetings of the Board of Directors
Mr. Goldstein was elected director by the former sole stockholder of the Company in April 18, 2012. On March 28, 2014, Dr. Gerald Entine was elected to serve on the Board of Directors. On May 22, 2018, Gerald Entine died, leaving a vacancy on the Board of Directors for the Company. In order to fill the vacancy resulting from Mr. Entine’s death, the Board of Directors consented in lieu of a meeting to nominate Dell Williamson for appointment to the Board of Directors following receipt and review from Mr. Williamson his Confidential Bad Actor Disqualifying Event Statement confirming no “disqualifying event,” as defined under Rule 506(e) of Regulation D under the 1933 Securities Act and confirmation of receipt of the Company’s Insider Trading Policy and related memorandum regarding the same (as disclosed in prior filings). In addition, pursuant to Article IV of the Company’s Bylaws, as amended, the Board of Directors nominated Michael G. Hastings to serve as a director on the Board of Directors following receipt and review of the same disclosures and documents produced by Mr. Williamson, as identified herein. By signing the consent resolution, Mr. Williamson and Mr. Hastings accepted appointment as directors on the Board of Directors. The Board establishes policy and provides strategic direction, oversight, and control of the Company. As of the date of this Form 10-K, the Board of Directors had no standing audit, compensation, nominating or other committees, although the Board intends to establish such committees in the future.
Nominating Committee
We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.
Retirement Plan
We do not currently have any retirement plan, but we expect to adopt one in the near term.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As stated in our Item 2, Properties disclosure on this Form 10-K, the Company’s executive offices are located in Canoga Park, CA, at 7051 Eton Avenue, Canoga Park, California 91303. The lease payment for each facility was $6,000, paid monthly through July 31, 2016. Per the Company’s lease agreement, the lease payment increased to $7,000 on August 1, 2016. Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. Mr. Goldstein holds an 8% interest in Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties.
During the year ended December 31, 2022, the Company’s majority shareholder paid expenses on behalf of the Company of $6,214 and loaned an additional $304,633. The amounts due to Mr. Goldstein are $874,679 and $576,260 as of December 31, 2022 and 2021, respectively.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed by the Company’s current auditor Fruci & Associates II, PLLC, for professional services rendered for the audit of our annual financial statements, review of our quarterly financial statements or services that are normally provided in connection with statutory and regulatory filings were $83,958 and $82,500 for the years ended December 31, 2022 and 2021, respectively.
Audit Related Fees
There were no fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements for the year ended December 31, 2022 or 2021.
Tax Fees
There were no fees billed for professional services for tax compliance, tax advice, tax planning for the year December 31, 2022 or 2021.
All Other Fees
There were no fees billed for other products and services for the year ended December 31, 2022 or 2021.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
15(a)(1). Financial Statements
The following consolidated financial statements, and related notes and Report of Independent Registered Public Accounting Firm are filed as part of this Annual Report:
US Nuclear Corp. and Subsidiaries
Consolidated Financial Statements
For The Years Ended December 31, 2022 and 2021
Contents
Page
Reports of Independent Registered Public Accounting Firms (PCAOB ID: 05525)
Report of Fruci & Associates II, PLLC
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Operations for the years ended December 31, 2022 and 2021
Consolidated Statement of Changes in Shareholders’ Equity for the years ended December 31, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021
Notes to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of US Nuclear Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of US Nuclear Corp. and Subsidiaries (“the Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit and net losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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
The critical audit matters communicated below 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. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Goodwill
Description of the Critical Audit Matter
As discussed in Note 2 to the consolidated financial statements, the Company has goodwill with a carrying value of $570,176 and is tested for impairment annually, or more frequently if impairment indicators arise. During the year ended December 31, 2022, the Company recorded no impairment charge.
Auditing management’s goodwill impairment test was complex and highly judgmental due to the significant estimation required to determine the fair value of the goodwill and underlying business unit. In particular, the fair value estimate was sensitive to significant assumptions, such as the Company’s financial forecast, discount rate, and operating costs, which are impacted by expectations about future market and economic conditions.
How the Critical Audit Matter Was Addressed in the Audit
To test the estimated fair value of the Company’s goodwill and underlying business unit, we performed audit procedures that included, among other things:
● Developed an independent expectation and performed independent assessment of balance.
● Reviewed current financial forecast in light of management’s current plans, and the historical basis of management’s estimates based on its current operating results that would result from changes in the assumptions.
We have served as the Company’s auditor since 2019.
Spokane, Washington
May 11, 2023
US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2022 AND 2021
ASSETS
CURRENT ASSETS
Cash $ 126,109 $ 246,317
Accounts receivable, net 329,858 163,577
Inventories 2,024,664 1,792,312
Prepaid expenses and other current assets 26,370 44,026
TOTAL CURRENT ASSETS 2,507,001 2,246,232
Property and equipment, net 6,501 9,719
Investments 10,059 10,059
Acquisition deposit 15,000 15,000
Goodwill 570,176 570,176
TOTAL ASSETS $ 3,108,737 $ 2,851,186
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 100,398 $ 91,859
Accounts payable - related party 280,000 128,500
Accrued liabilities 688,422 587,941
Accrued compensation - officers 695,000 590,000
Customer deposit 88,694 101,342
Notes payable 9,574 48,541
Convertible notes payable, net of debt discount 412,953 -
Note payable to shareholder 874,679 576,260
Line of credit 307,321 285,474
TOTAL CURRENT LIABILITIES 3,457,041 2,409,917
Note payable, net of current portion -
-
TOTAL LIABILITIES 3,457,041 2,409,917
COMMITMENTS & CONTINGENCIES -
-
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding -
-
Common stock, $0.0001 par value; 100,000,000 shares authorized, 31,621,242 and 28,353,215 shares issued and outstanding 3,162 2,836
Common shares to be issued 39,000 -
Additional paid in capital 14,740,401 13,508,581
Accumulated deficit (15,130,867 ) (13,070,148 )
TOTAL SHAREHOLDERS’ EQUITY (348,304 ) 441,269
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,108,737 $ 2,851,186
The accompanying notes are an integral part of these consolidated financial statements.
US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
Sales $ 2,091,366 $ 2,137,607
Cost of sales 1,303,298 760,955
Gross profit 788,068 1,376,652
Operating expenses
Consulting expense -
592,659
Professional fees 326,118 171,024
Officer compensation 170,000 372,978
Payroll and related expense 957,954 939,061
Selling, general and administrative expenses 830,027 663,119
Total operating expenses 2,284,099 2,738,841
Loss from operations (1,496,031 ) (1,362,189 )
Other income (expense)
Interest expense (63,912 ) (11,001 )
Other income -
2,950
Amortization of debt discount (482,852 ) -
Gain on forgiveness of debt -
329,018
Equity loss in investment -
(835,462 )
Total other income (expense) (546,764 ) (514,495 )
Loss before provision for income taxes (2,042,795 ) (1,876,684 )
Provision for income taxes -
-
Net loss $ (2,042,795 ) $ (1,876,684 )
Deemed dividend for down-round provision in warrants (17,924 ) (52,861 )
Net loss attributed to common stockholders $ (2,060,719 ) $ (1,929,545 )
Weighted average shares outstanding - basic and diluted
29,504,433 27,375,508
Loss per share - basic and diluted
$ (0.07 ) $ (0.07 )
The accompanying notes are an integral part of these consolidated financial statements
US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
Common Stock Common
Shares to be Additional
Paid in Accumulated Total
Shareholders’
Shares Amount Issued Capital Deficit Equity
Balance, December 31, 2020 25,724,844 $ 2,572 $ - $ 11,985,191 $ (11,140,603 ) $ 847,160
Issuance of common stock for services 1,257,300 - 737,262 -
737,388
Issuance of common stock for conversion of convertible debenture and accrued interest 250,000 - 99,975 -
100,000
Issuance of common stock for investment 1,121,071 - 633,293 -
633,405
Deemed dividend for down round provision in warrants - -
- 52,861 (52,861 ) -
Net loss - -
- -
(1,876,684 ) (1,876,684 )
Balance, December 31, 2021 28,353,215 $ 2,835 $ - $ 13,508,582 $ (13,070,148 ) $ 441,269
Issuance of common stock for services 1,043,027 - 197,865 -
197,970
Issuance of common stock for loan incentive 625,000 - 99,957 -
100,019
Issuance of common stock for conversion of debt and accrued interest 1,600,000 - 259,840 -
260,000
Debt discount on issuance of convertible debt - -
- 656,233 -
656,233
Deemed dividend for down-round provision in warrants - -
- 17,924 (17,924 ) -
Common stock to be issued for services - -
39,000 -
-
39,000
Net loss - -
- -
(2,042,795 ) (2,042,795 )
Balance, December 31, 2022 31,621,242 $ 3,162 $ 39,000 $ 14,740,401 $ (15,130,867 ) $ (348,304 )
The accompanying notes are an integral part of these consolidated financial statements.
US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
OPERATING ACTIVITIES
Net loss $ (2,042,795 ) $ (1,876,684 )
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 3,218 2,571
Bad debt expense -
11,000
Issuance of common stock for services 267,246 673,617
Expenses paid directly by majority shareholder -
87,410
Operating lease expense -
55,079
Amortization of debt discounts 482,852 -
Forgiveness of PPP Loan -
(329,018 )
Finance costs 8,750 -
Equity loss in investment -
835,462
Write-down of investments -
-
Changes in operating assets and liabilities:
Accounts receivable (166,281 ) 80,625
Inventories (232,352 ) (474,625 )
Prepaid expenses and other current assets (12,620 ) -
Accounts payable 8,539 30,882
Accounts payable - related parties 151,500 128,500
Accrued liabilities 115,532 322,203
Accrued compensation - officers 105,000 160,000
Customer deposits (12,648 ) (92,969 )
Operating lease liability -
(55,079 )
Net cash used in operating activities (1,324,059 ) (441,026 )
INVESTING ACTIVITIES
Purchase of property and equipment -
(6,446 )
Payment of acquisition deposit -
(15,000 )
Cash paid for investment -
-
Net cash used in investing activities -
(21,446 )
FINANCING ACTIVITIES
Net borrowings (repayments) under lines of credit 26,149 119,600
Proceeds from sale of common stock -
100,000
Proceeds from notes payable -
221,431
Repayments for notes payable (37,217 ) (4,546 )
Proceeds from convertible notes payable 916,500 -
Proceeds from note payable to shareholder 304,633 608,010
Repayments for note payable to shareholder (6,214 ) (563,010 )
Net cash provided by (used in) financing activities 1,203,851 481,485
NET INCREASE (DECREASE) IN CASH (120,208 ) 19,013
CASH
Beginning of period 246,317 227,304
End of period $ 126,109 $ 246,317
Supplemental disclosures of cash flow information
Taxes paid $ -
$ -
Interest paid $ 11,973 $ 11,001
Non-Cash investing and financing activities
Beneficial conversion feature on down-round provision $ 239,044 $ -
Common shares issued for future services $ 39,000 135,859
Deemed dividend on down round provision $ 17,924 $ 52,861
Common stock issued for conversion of convertible debt and accrued interest $ 260,000 $ -
Original issue debt discount $ 751,026 $ -
The accompanying notes are an integral part of these consolidated financial statements.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Note 1 - Organization and Basis of Presentation
Organization and Line of Business
US Nuclear Corp., formerly known as APEX 3, Inc., (the “Company” or “US Nuclear”) was incorporated under the laws of the State of Delaware on February 14, 2012.
On May 31, 2016, the Company entered into an Asset Purchase Agreement with Electronic Control Concepts (“ECC”) whereby the Company purchased certain tangible and intangible assets of ECC.
The Company is engaged in developing, manufacturing and selling radiation detection and measuring equipment. The Company markets and sells its products to consumers throughout the world.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company recorded a net loss of $2,042,795 for the year ended December 31, 2022 and had an accumulated deficit of $15,130,867 as of December 31, 2022, which raises substantial doubt about its ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
Note 2 - Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Cali From Above, LLC, and Optron and its wholly-owned subsidiary, Overhoff Technology Corporation (“Overhoff”), and its wholly-owned subsidiary, Electronic Control Concepts (“ECC”), have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. There were no cash equivalents as of December 31, 2022 and 2021.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the FDIC insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk.
Accounts Receivable
The Company maintains reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded based on the Company’s historical collection history. Allowance for doubtful accounts as of December 31, 2022 and 2021 were $5,000 and $16,000, respectively.
Inventories
Inventories are valued at the lower of cost (determined primarily by the average cost method) or net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. As of December 31, 2022 and 2021, there was no allowance for slow moving or obsolete inventory. The Company periodically assessed its inventory for slow moving and/or obsolete items. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Property and Equipment
Property and Equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:
Furniture and fixtures 5 years
Leasehold improvement Lesser of lease life or economic life
Equipment 5 years
Computers and software 5 years
Long-Lived Assets
The Company applies the provisions of Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at December 31, 2022 and 2021, the Company believes there was no impairment of its long-lived assets.
Goodwill
Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. The entire goodwill balance in the accompanying financial statements resulted from the Company’s acquisition of Overhoff Technology Corporation in 2006. The Company complies with ASC 350, Goodwill and Other Indefinite Lived Intangible Assets, requiring that a test for impairment be performed at least annually. As of December 31, 2022 and 2021 the Company performed the required impairment analysis which resulted in no impairment adjustments. Although the Company experienced a significant decline in revenue due to the effects of COVID-19, management expects that it is more likely than not that its revenue and cost of goods sold will be more in-line with pre-COVID-19 levels in upcoming periods. Significant estimates used in the goodwill impairment analysis may change in the upcoming year if revenues do not rebound and cost of materials continue to increase.
Derivative Financial Instruments
The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. During the years ended December 31, 2022 and 2021, there were no derivative liabilities associated with our convertible notes payable.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Investments
The Company accounts for investments in equity securities without a readily determinable fair value at cost, minus impairment. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company measures the equity security at fair value as of the date that the observable transaction occurred (“the measurement alternative”) in accordance with ASC 321. The Company accounts for investments for which it owns 20% or more, but less than 50% on the equity method in accordance with ASC 323.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments, including cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and line of credit, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has a note payable to shareholder that the carrying amount also approximates fair value.
Revenue Recognition
Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As sales are and have been primarily from the sale of products to customers, and the Company has no significant post-delivery obligations, this new standard did not result in a material recognition of revenue on the Company’s accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.
Revenue from the product sales is recognized under Topic 606 in a manner that reasonably reflects the delivery of its products to customers in return for expected consideration and includes the following elements:
● executed contracts with the Company’s customers that it believes are legally enforceable;
● identification of performance obligations in the respective contract;
● determination of the transaction price for each performance obligation in the respective contract;
● allocation the transaction price to each performance obligation; and
● recognition of revenue only when the Company satisfies each performance obligation.
These five elements, as applied to each of the Company’s revenue category, is summarized below:
● Product sales - revenue is recognized when the Company performs its obligations under the contracts it has with its customers to deliver products at an agreed upon price and it is generally when the control of the product has been transferred to the customer.
Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Sales returns and allowances was $0 and $0 for the years ended December 31, 2022 and 2021, respectively. The Company provides a one-year warranty on all sales. Warranty expense for the years ended December 31, 2022 and 2021 was insignificant. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.
See Notes 11 and 12 for disclosures of revenue disaggregated by geographical area and product line.
Customer Deposits
Customer deposits represent cash paid to the Company by customers before the product has been completed and shipped.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, 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 bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion 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.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.
Stock-Based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718,” Compensation - Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. As of December 31, 2022 and 2021 there were 2,500,000 and 333,333 warrants outstanding, respectively, to purchase shares of common stock. Basic and diluted earnings per share are the same during the years ended December 31, 2022 and 2021 due to the net loss incurred. As of December 31, 2022, the number of potentially dilutive shares issuable on our convertible notes and accrued interest was 6,430,544.
Segment Reporting
FASB ASC Topic 280, Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 11.
Related Parties
The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Reclassifications
Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or shareholders’ equity.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 was issued to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses. Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope. The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold. The expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. This ASU as amended by ASU 2019-10, is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures.
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The adoption had no effect on the Company’s consolidated financial statements and related disclosures.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.
Note 3 - Inventories
Inventory at December 31, 2022 and 2021 consisted of the following:
Raw materials $ 1,244,880 $ 972,759
Work in Progress 409,637 157,024
Finished goods 370,127 662,529
Total inventories $ 2,024,664 $ 1,792,312
At December 31, 2022 and 2021 the inventory reserve was $0.
Note 4 - Property and Equipment
The following are the details of property and equipment at December 31, 2022 and 2021:
Furniture and fixtures $ 148,033 $ 148,033
Leasehold Improvements 50,091 50,091
Equipment 237,418 237,418
Computers and software 39,482 39,482
475,024 475,024
Less accumulated depreciation (468,523 ) (465,305 )
Property and equipment, net $ 6,501 $ 9,719
Depreciation expense for the years ended December 31, 2022 and 2021 was $3,218 and $2,571, respectively. At December 31, 2022 and 2021, the Company had $440,628 of fully depreciated property and equipment that is still in use.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Note 5 - Investments
MIFTEC
On August 3, 2018, the Company closed an agreement by and among, MIFTEC Laboratories, Inc. (“MIFTEC”), a licensee of Magneto-Inertial Fusion Technologies, Inc., (“MIFTI”), and the Company. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC will engage the Company to manufacture equipment pursuant to MIFTEC’s specifications and designs and have the Company as a sales representative for the manufactured equipment. The Company will be the exclusive manufacturer and supplier to MIFTEC of equipment in North America and Asia. In addition, the Company received a 10% ownership interest in MIFTEC. The consideration for the exclusive manufacturing rights and a 10% ownership interest in MIFTEC was $500,000 and 300,000 shares of the Company’s common stock valued at $594,000. The fair value was determined based on the Company’s stock price on August 3, 2018. The Company recorded the value of the 10% interest in MIFTEC at $10,000 and recorded $1,084,000 as the acquisition of manufacturing and supply rights in the accompanying consolidated statement of operations during the year ended December 31, 2018. The Company evaluated this investment for impairment and determined that an impairment of $9,000 was necessary during the year ended December 31, 2019. The carrying value of this investment at December 31, 2022 and 2021 was $1,000 and $1,000, respectively.
MIFTI
In April 2019, the Company also entered into a Cooperative Agreement with MIFTI whereby the Company acquired certain exclusive manufacturing and supply rights, including thermonuclear fusion-powered reactor for production of electricity per MIFTI designs in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The $500,000 is an option to buy a 10% interest in MIFTI for $2,700,000, if completed with 24 months of the agreement date. If the option expires, MIFTI shall issue the Company 500,000 shares of common stock and rescind all other exclusive rights contained in the agreement. The option was rescinded and the Company received 500,000 shares of MIFTI common stock which represents an ownership of approximately 0.56% for its $500,000 investment. The Company evaluated this investment for impairment and determined that an impairment of $499,000 was necessary during the year ended December 31, 2019. The carrying value of this investment at December 31, 2022 and 2021 was $1,000 and $1,000, respectively.
Grapheton
On February 5, 2020, the Company entered into a Stock Purchase Agreement (“SPA”) with Grapheton, Inc., a California corporation (“Grapheton”). The transaction was closed on March 12, 2020. Grapheton is a start-up company that focuses on building energy storage devises, known as supercapacitors, from a new material system. The technology utilized by Grapheton has been proven to provide a compelling advantage in microelectrode arrays with superior electrical and electrochemical properties.
Pursuant to the terms of the SPA, the Corporation will acquire a total of 2,552 shares of Grapheton’s common stock over a two-year period. At closing, the Company was issued at total of 1,452 shares of Grapheton’s common stock for $235,000 and 858,896 shares of the Company’s common stock valued at $601,227.
In connection with the SPA, during the second quarter of 2021 the Company received an additional 1,100 shares of Grapheton’s common stock in exchange for the Company’s issuing an additional 1,121,071 shares of common stock valued at $633,405. In addition, Grapheton fulfilled its requirements under the earn out provision and the Company is obligated to make the first earn out payment of $192,500. This amount is recorded as accrued expense in the accompanying consolidated balance sheet.
An additional “true up” issuance of the Company’s common stock to Grapheton may be made on the second anniversary of the closing of the SPA, based on the valuation of the Company’s common stock on that date by a third-party valuator.
The Company currently owns 35.8% of Grapheton and accounts for its investment in Grapheton using the equity method of accounting is in accordance with ASC 323.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Information regarding Grapheton as of and for the year ended December 31, 2022 is below:
Current assets $ 17,396
Total assets 25,691
Current liabilities 593,333
Total liabilities 593,333
Total stockholders’ equity (567,642 )
Revenue $ -
Operating expenses (760,257 )
Other expenses (246,154 )
Net loss (1,006,411 )
The Company evaluated this investment and recorded a loss attributed to equity investment of $0 during the year ended December 31, 2022. The carrying value of this investment at December 31, 2022 was $8,059.
Note 6 - Notes Payable
In connection with the acquisition of assets from ECC the Company issued a note payable to the owner of ECC. The note accrued interest at 5% per annum, requires quarterly principal and interest payments of $4,518 and is due on April 15, 2021. At December 31, 2022 and 2021, the amount outstanding under this note payable was $5,272 and $5,272, respectively. The Company was in default on payment of the note payable as of December 31, 2022. The Company has communicated with the debt holder, and the amount is considered payable on demand as of December 31, 2022.
In June 2020 the Company received a loan under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act for $107,587. The loan has terms of 24 months and accrues interest at 1% per annum. In February of 2021, the Company received two additional loans totaling $221,431 under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. As of December 31, 2021, the Company has had these loans forgiven in the amount of $329,018 as provided by the CARES Act.
On December 26, 2020, a line of credit held by the company had matured, and based on the terms of the line of credit agreement was converted to a note payable upon demand. The obligation accrues interest at the rate of $10.89 per day until the bank receives full payment. As of December 31, 2022, the balance owed by the Company was $4,302.
On May 5, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $750,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the incentive shares issued as discussed at Note 10, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discounts recorded as of the date of the note was $550,538. At December 31, 2022 and pursuant to the down-round provision of the note and associated warrants, the Company reevaluated the beneficial conversion feature which resulted in additional debt discount recorded of $183,422.
On October 10, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $375,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discounts recorded as of the date of the note was $200,488. At December 31, 2022 and pursuant to the down-round provision of the note and associated warrants, the Company reevaluated the beneficial conversion feature recorded which resulted in additional debt discount recorded of $30,304.
The total debt discount amortization recorded on the Company’s notes for the twelve months ended December 31, 2022 was $482,852.
Future maturities of all notes payable as of December 31, 2022, are as follows:
Years Ending December 31,
904,427
-
-
-
-
Thereafter -
$ 904,427
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Note 7 - Note Payable to Shareholder
Robert Goldstein, the CEO and majority shareholder, has loaned funds to the Company from time to time to cover general operating expenses. These loans are evidenced by unsecured, non-interest-bearing demand notes payable. During the year ended December 31, 2021, the Company’s majority shareholder paid expenses on behalf of the Company of $87,410 and loaned an additional $45,000 to the Company. During the year ended December 31, 2022, the Company’s majority shareholder loaned an additional $304,633 to the Company and was repaid $6,214. The amounts due to Mr. Goldstein are $874,679 and $576,260 as of December 31, 2022 and 2021, respectively
Note 8 - Line of Credit
As of December 31, 2022, the Company had four lines of credit with a maximum borrowing amount of $400,000 with interest ranging from 5.5% to 11.5%. As of December 31, 2022 and 2021, the amounts outstanding under these lines of credit were $307,321 and $285,474, respectively.
Note 9 - Leases
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding.
The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. The leases expired on April 30, 2020 and the Company exercised its renewal option for an additional 12 months. The new lease is not more than 12 months; therefore, the disclosures under ASC 842 are not required. Future minimum lease payments under this agreement for the twelve months ending December 31, 2023 is $168,000. Effective January 1, 2019, the Company adopted the provision of ASC 842 Leases.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
The lease expense for the years ended December 31, 2022 and 2021 was $168,000 and $168,000, respectively. The cash paid under operating leases during the years ended December 31, 2022 and 2021 was $16,500 and $42,000, respectively. At December 31, 2022, $280,000 has been accrued and is shown on the balance sheet as accounts payable- related party. At December 31, 2022, the weighted average remaining lease terms were 0.3 years and the weighted average discount rate was 8%.
Note 10 - Shareholders’ Equity
Common stock
During the year ended December 31, 2022, the Company issued:
● 625,000 shares of common stock valued at $100,019 in relation to the debt that was obtained;
● 1,600,000 shares of common stock valued at $260,000 in satisfaction of convertible debt and interest;
● 1,043,027 shares of common stock to consultants for services rendered valued at $236,970; of which $39,000 is recorded as shares to be issued. Pursuant to ASC 718 the company has allocated a portion of stock-based compensation to prepaid expenses until the services are provided to the Company. The amount allocated to prepaid expense at December 31, 2022 is $9,750. The fair value was determined based on the Company’s stock price on the grant date.
During the year ended December 31, 2021, the Company issued:
● 1,252,300 shares of common stock to consultants for services rendered valued at $737,738. The fair value was determined based on the Company’s stock price on the grant date;
● 250,000 shares of common stock for cash; and
● 1,121,071 shares of common stock for an investment in Grapheton valued at $633,405. The fair value was determined based on the Company’s stock price on the grant date.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Warrants
The following table summarizes the activity related to warrants:
Weighted
Weighted Average
Average Remaining Aggregate
Warrants Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding, December 31, 2020 333,333 $ 0.40 1.50 $ -
Granted -
Forfeited -
Exercised -
Outstanding, December 31, 2021 333,333 $ 0.36 0.90 $ -
Granted 2,500,000 $ 0.14 3.00 $ -
Forfeited (333,333 )
Exercised -
Outstanding, December 31, 2022 2,500,000 $ 0.14 2.56 $ -
Exercisable, December 31, 2022 2,500,000 $ 0.14 2.56 $ -
The above warrants contain a down round provision that requires the exercise price to be adjusted if the Company sells shares of common stock below the current exercise price. During the twelve months ended December 31, 2022, the Company issued shares of common stock for $0.14 therefore, the exercise price of these warrants was adjusted from $0.75 and $0.475 to $0.14 pursuant to the down-round provision in the warrant agreement. The change in fair value between the value of the warrants using the new exercise price versus the old exercise price was calculated to be $17,924. This amount is recorded as a deemed dividend in the accompanying consolidated financial statements during the year ended December 31, 2022.
The following table summarizes information about options outstanding and exercisable as of December 31, 2022
Outstanding and Exercisable
Number of Warrants Exercise Price
2,500,000 $ 0.14
2,500,000
Note 11 - Segment Reporting
ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has two reportable segments: Optron and Overhoff. Optron is located in Canoga Park, California and Overhoff is located in Milford, Ohio. The assets and operations of the Company’s recent acquisition of the assets of Electronic Control Concepts are included with Overhoff in the table below. The assets and operations of the Company’s newest subsidiary, Cali From Above are included with Optron in the table below.
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
The following tables summarize the Company’s segment information for the years ended December 31, 2022 and 2021:
Years Ended
December 31,
Sales
Optron $ 220,368 $ 482,582
Overhoff 1,870,998 1,655,025
Corporate -
-
$ 2,091,366 $ 2,137,607
Gross profit
Optron $ (547,531 ) $ 101,447
Overhoff 1,335,599 1,275,205
Corporate -
-
$ 788,068 $ 1,376,652
Income (loss) from operations
Optron $ (1,484,631 ) $ (799,837 )
Overhoff 486,382 264,763
Corporate (497,782 ) (1,757,739 )
$ (1,496,031 ) $ (1,876,684 )
Interest Expenses
Optron $ 21,725 $ 10,076
Overhoff 6,545 -
Corporate 35,643
$ 63,912 $ 11,001
Net income (loss)
Optron $ (1,506,356 ) $ (799,837 )
Overhoff 479,837 680,892
Corporate (1,016,275 ) (1,763,901 )
$ (2,042,794 ) $ (1,882,846 )
As of December 31,
Total Assets
Optron $ 1,021,817 $ 1,027,669
Overhoff 2,037,988 1,754,485
Corporate 48,932 69,032
$ 3,108,737 $ 2,851,186
Goodwill
Optron $ -
$ -
Overhoff 570,176 570,176
Corporate -
-
$ 570,176 $ 570,176
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
Note 12 - Geographical Sales
The geographical distribution of the Company’s sales for the years ended December 31, 2022 and 2021 is as follows:
Geographical sales
North America $ 1,535,671 $ 1,522,412
Asia 523,434 473,157
South America 5,475 4,932
Other 26,786 137,106
$ 2,091,366 $ 2,137,607
Note 13 - Income Taxes
At December 31, 2022 and 2021, the significant components of the deferred tax assets are summarized below:
Approximate net operating loss carry forwards $ 12,649,000 $ 10,605,000
Deferred tax assets:
Federal net operating loss $ 2,031,310 $ 1,602,310
State net operating loss 846,270 723,270
Tax credit 49,740 49,740
Goodwill (148,373 ) (148,373 )
Total deferred tax assets 2,778,947 2,226,947
Less valuation allowance (2,778,947 ) (2,226,947 )
$ -
$ -
The valuation allowance increased by $552,000 and $526,103 in 2022 and 2021, respectively, due to the Company generating additional net operating losses. The Company’s remaining tax credit carryforwards of $49,740 begin to expire in 2027 and its net operating loss carryforward of approximately $12,649,000 begin to expire in 2027.
Income tax expense reflected in the consolidated statements of income consist of the following for 2022 and 2021:
Current
Federal $ - $ -
State - -
- -
Deferred
Federal - -
State - -
- -
Income tax expense $ - $ -
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
The reconciliation of the effective income tax rate to the federal statutory rate for the years ended December 31, 2022 and 2021 is as follows:
Federal income tax rate 21.0 % 21.0 %
State tax, net of federal benefit 6.0 % 6.0 %
Net operating losses -16.7 % -16.7 %
Permanent differences -10.6 % -10.6 %
Amortization of goodwill 0.3 % 0.3 %
Effective income tax rate 0.0 % 0.0 %
The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2019.
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.
Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations. There were no interest or penalties accrued as of December 31, 2022 and 2021.
Note 14 - Related Party Transactions
The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. Rent expense for the year ended December 31, 2022 and 2021 were $168,000 and $168,000, respectively. As of December 31, 2022 and 2021, the payable to Gold Team Inc. in connection with the above leases was to $280,000 and $128,500, respectively. (See Note 9).
US NUCLEAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021
As of December 31, 2022 and 2021, the Company had accrued compensation payable to its majority shareholder of $695,000 and $590,000, respectively.
During the year ended, December 31, 2021, the company issued 242,823 shares of common stock to Richard Landry in connection with the consulting services agreement entered by and between US Nuclear Corp and Richard Landry.
Also see Note 7.
Note 15 - Concentrations
For the year ended December 31, 2022, two customers accounted for more than 10% of the Company sales, 42.3% and 13.61%, respectively. At December 31, 2022 two customers accounted for more than 10% of the accounts receivable balance, 55.5% and 28.4%, respectively.
For the year ended December 31, 2021, two customers accounted for more than 10% of the Company sales, 30.7% and 15.2%, respectively. At December 31, 2021 two customers accounted for more than 10% of the accounts receivable balance, 23.9% and 15%, respectively.
No vendors accounted for more than 10% of the Company’s purchases for the years ended December 31, 2022 and 2021.
Note 16 - Subsequent Events
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued and has determined that no material subsequent events exist other than the following:
On January 9, 2023, the Company issued 100,000 shares of common stock to a consultant. The shares were valued at their fair value on the date of grant, which is $11,100 or $0.111 per share.
On January 19, 2023, the Company issued 400,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $60,000 or $0.15 per share.
On January 23, the Company issued an aggregate of 260,000 shares to consultants as compensation for investor relations services. The shares were valued at their fair value on the date of grant, which was $37,960 or $0.146 per share.
On February 23, the Company issued 400,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $60,000 or $0.15 per share.
On February 24, the Company issued 200,000 shares of common stock to a consultant. The shares were valued at their fair value on the date of grant, which was $29,200 or $0.146 per share.
Effective March 3, 2023, the Company entered into a Membership Unit Purchase Agreement whereby the Company transferred, assigned, and conveyed the capital account of its wholly-owned subsidiary Cali From Above, in exchange for 65,000,000 shares of INNOVATION NATION, INC., a Nevada Corporation, owned and held by Robert Goldstein. As a result, the Company has divested itself of its ownership of Cali From Above and the Company now holds a 26% interest in Innovation Nation, an OTC reporting company under the symbol (OTC:AVRI).
On March 14, 2023, the Company issued an aggregate of 1,500,000 shares of common stock to our Board members. The shares were valued at their fair value on the date of grant, which was $175,500 or $0.117 per share.
On March 31, 2023, the Company issued 75,000 shares of common stock to a consultant. The shares were valued at their fair value on the date of grant, which was $8,550 or $0.114 per share.
On April 11, 2023, the Company issued 771,845 shares of common stock, by cashless exercise, pursuant to a Warrant Agreement associated with a convertible note payable entered into on May 5, 2022.
15(a)(2). Financial Statement Schedules.
None.
15(a)(3). Exhibits.
Incorporated by reference
Exhibit
Exhibit Description
Filed herewith
Form
Period ending
Exhibit
Filing date
3.1
Certificate of Incorporation
3.1
02/14/2012
3.2
By-Laws
3.2
02/14/2012
3.3
Amendment to Certificate of Incorporation
8-K
3.3
05/29/2012
4.1
Specimen Stock Certificate
4.1
02/14/2012
4.2
Description of Securities
X
10.1
Robert I. Goldstein Employment Agreement
10-Q
10.1
11/11/2014
10.2
Forgiveness of Debt and Conversion Agreement
10-Q
10.2
11/11/2014
23.2
Consent of Independent Auditor
X
31.1
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
X