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This Management's Discussion and Analysis provides material historical and
prospective disclosures intended to enable investors and other users to assess
NTIC's financial condition and results of operations. Statements that are not
historical are forward-looking and involve risks and uncertainties discussed
under the heading "Part I. Item 1. Business-Forward-Looking Statements" and
under the heading "Part I. Item 1A. Risk Factors." The following discussion of
the results of the operations and financial condition of NTIC should be read in
conjunction with NTIC's consolidated financial statements and the related notes
thereto included under "Part II. Item 8. Financial Statements and Supplementary
Data."


This management report is organized according to the following main sections:

? Company overview. This section provides a brief general description of

The activity of NTIC, relating in particular to developments in recent

fiscal year.

? Subsidiaries and network of joint ventures of NTIC. This section provides a brief

overview of NTIC’s subsidiaries and its network of joint ventures, the joint venture

companies that are considered individually significant for the consolidated financial statements of NTIC

assets and revenues, and how NTIC’s joint ventures are accounted for by NTIC.

? Impact of the COVID-19 pandemic. This section presents a brief summary of the

impacts to date and potential future impacts of the COVID-19 pandemic.

? Global supply chain disruptions. This section provides a brief summary of

impacts to date and potential future impacts of the global supply chain

disturbances.

? Financial overview. This section provides a brief summary of the financial situation of NTIC

the results and financial situation for the 2022 financial year compared to 2021.

? Components of sales and expenses. This section provides a brief description of the

significant items in NTIC’s consolidated statements of income.

? Results of operations. This section provides an analysis of the

items in NTIC’s consolidated statements of income.

? Cash and capital resources. This section provides an analysis of NTIC

liquidity and cash flows and a discussion of the financial condition of NTIC and

financial commitments.

? Inflation and seasonality. This section describes the effects of inflation and

seasonality, if any, on NTIC’s business and operating results.

? Market risk. This section describes the main market risks to which NTIC is exposed.

matter.

? Transactions with related parties. This section describes any material related parties

transactions to which NTIC is a party.

? Critical accounting policies and estimates. This section deals with NTIC

critical accounting policies and estimates, which require NTIC to exercise

subjective or complex judgments in their application. The importance of NTIC

    accounting policies, including its critical accounting estimates, are
    summarized in Note 1 to NTIC's consolidated financial statements.

? Recent accounting statements. This section refers to Note 2 of the NTIC

consolidated financial statements, which summarize the effect of recent

issued accounting statements on the operating and financial results of NTIC

    condition.




Business Overview



NTIC develops and markets proprietary, environmentally beneficial products and
services in over 65 countries either directly or via a network of subsidiaries,
joint ventures, independent distributors, and agents. NTIC's primary business is
corrosion prevention products and services, marketed mainly under the ZERUST®
brand. NTIC has been selling its proprietary ZERUST® products and services to
the automotive, electronics, electrical, mechanical, military, and retail
consumer markets for almost 50 years and, more recently, has also expanded into
the oil and gas industry. Additionally, NTIC markets and sells a portfolio of
proprietary bio-based and certified compostable (fully biodegradable) polymer
resin compounds and finished products under the Natur-Tec® brand. These products
are intended to reduce NTIC's customers' carbon footprint and provide
environmentally sound waste disposal options.



NTIC's ZERUST® rust and corrosion inhibiting products include plastic and paper
packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as
engineered solutions designed specifically for the oil and gas industry. NTIC
also offers worldwide, on-site, technical consulting for rust and corrosion
prevention issues. NTIC's technical service consultants work directly with the
end users of NTIC's ZERUST® rust and corrosion inhibiting products to analyze
their specific needs and develop systems to meet their performance requirements.
In North America, NTIC sells its ZERUST® corrosion prevention solutions through
a network of independent distributors and agents supported by a direct sales
force.



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Internationally, NTIC sells its ZERUST® corrosion prevention solutions through
its wholly-owned subsidiary in China, NTIC (Shanghai) Co., Ltd. (NTIC China),
starting September 1, 2021 its wholly-owned subsidiary in India, HNTI Ltd., its
majority-owned joint venture holding company for NTIC's joint venture
investments in the Association of Southeast Asian Nations (ASEAN) region, NTI
Asean LLC (NTI Asean), certain majority-owned and wholly-owned subsidiaries, and
joint venture arrangements in North America, Europe, and Asia. NTIC also sells
products directly to its European joint venture partners through its
wholly-owned subsidiary in Germany, NTIC Europe GmbH (NTI Europe).



One of NTIC's strategic initiatives is to expand into and penetrate other
markets for its ZERUST® corrosion prevention technologies.  Consequently, for
the past several years, NTIC has focused significant sales and marketing efforts
on the oil and gas industry, as the infrastructure that supports that industry
is typically constructed using metals that are highly susceptible to corrosion.
NTIC believes that its ZERUST® corrosion prevention solutions will minimize
maintenance downtime on critical oil and gas industry infrastructure, extend the
life of such infrastructure, and reduce the risk of environmental pollution due
to leaks caused by corrosion. NTIC markets and sells its ZERUST® rust and
corrosion prevention solutions to customers in the oil and gas industry in a
continuously increasing number of countries either directly, through its
subsidiaries, or through its joint venture partners and other strategic
partners.  The sale of ZERUST® corrosion prevention solutions to customers in
the oil and gas industry typically involves long sales cycles, often including
multi-year trial periods with each customer and a slow integration process
thereafter.



Natur-Tec® bio-based and compostable plastics are manufactured using NTIC's
patented and/or proprietary technologies and are intended to replace
conventional petroleum-based plastics. The Natur-Tec® biopolymer resin compound
portfolio includes formulations that have been optimized for a variety of
applications, including blown-film extrusion, extrusion coating, injection
molding, and engineered plastics. These resin compounds are certified to be
fully biodegradable in a composting environment and are currently being used to
produce finished products, including can liners, shopping and grocery bags, lawn
and leaf bags, branded apparel packaging bags and accessories, and various
foodservice items, such as disposable cutlery, drinking straws, food-handling
gloves, and coated paper products. In North America, NTIC markets its Natur-Tec®
resin compounds and finished products primarily through a network of regional
and national distributors as well as independent agents. NTIC continues to see
significant opportunities for finished bioplastic products and, therefore,
continues to strengthen and expand its North American distribution network for
finished Natur-Tec® bioplastic products.



Internationally, NTIC sells its Natur-Tec® resin compounds and finished products
both directly and through its wholly-owned subsidiary in China and
majority-owned subsidiaries in India and Sri Lanka, and through distributors and
certain joint ventures.


Subsidiaries and network of joint ventures of NTIC




NTIC has ownership interests in 10 operating subsidiaries in North America,
South America, Europe, and Asia, which are listed in "Part I. Item 1. Business"
of this annual report on Form 10-K. The results of these subsidiaries are fully
consolidated in NTIC's consolidated financial statements, including HNTI
Limited, which was consolidated commencing September 1, 2021. On September 21,
2021, NTIC announced that it acquired the remaining 50% ownership interest in
its Indian joint venture, HNTI Limited, for $6.25 million in cash, effective as
of September 1, 2021. As a result of the acquisition of Zerust India, NTIC's
revenues and operating expenses increased and its equity in income from joint
ventures decreased during fiscal 2022 as compared to fiscal 2021. See Note 3 to
NTIC's consolidated financial statements for a discussion of Zerust India.



NTIC participates in 16 active joint venture arrangements in North America,
Europe, and Asia. NTIC has historically funded its investments in joint ventures
with cash generated from operations. NTIC's receives funds from its joint
ventures as fees for services that NTIC provides to its joint ventures and as
dividend distributions. The fees for services provided to joint ventures are
determined based on either a flat fee or a percentage of sales depending on
local laws and tax regulations. With respect to NTIC's joint venture in Germany
(EXCOR), NTIC recognizes an agreed upon quarterly fee for services. NTIC
recognizes equity income from each joint venture based on the overall
profitability of the joint venture. Such profitability is subject to variability
from quarter to quarter, which, in turn, subjects NTIC's earnings to variability
from quarter to quarter. The profits of each joint venture are shared by the
respective joint venture owners in accordance with their respective ownership
percentages. NTIC typically directly or indirectly owns 50% or less of each of
its joint venture entities and, thus, does not control the decisions of these
entities regarding whether to pay dividends and, if paid, what amount is paid in
a given year. The payment of a dividend by an entity is determined by a joint
vote of the owners and is not at the sole discretion of NTIC.



NTIC accounts for the investments and financial results of its joint ventures in
its consolidated financial statements utilizing the equity method of accounting.
NTIC considers EXCOR to be individually significant to NTIC's consolidated
assets and income as of August 31, 2022 and 2021. Therefore, NTIC provides
certain additional information regarding this entity in the notes to NTIC's
consolidated financial statements and in this section of this report. Additional
information related to NTIC's joint ventures is available in "Part I. Item 1.
Business" of this annual report on Form 10-K.



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Impact of the COVID-19 pandemic




The COVID-19 pandemic has negatively impacted the global economy, disrupted
global supply chains and shipping, created significant volatility and disruption
in financial markets and resulted in weakened economic conditions. While as part
of efforts to contain the spread of COVID-19, federal, state, local and foreign
governments imposed various restrictions on the conduct of business and travel
during 2020 and 2021, most of these restrictions have been lifted, except in
China where many remain in place. Because of these restrictions, NTIC continued
to experience softened demand for its products in China during fiscal 2022.



Global supply chain disruptions




Worldwide supply chain disruptions, which were initially brought about by the
impact of the COVID-19 pandemic, have persisted despite the recovery in the
global economy and financial markets. These issues continued during fiscal 2022
and, although these issues have shown some improvement, are expected to continue
to some degree in fiscal 2023. NTIC has experienced longer lead times for raw
materials, has been forced to find new suppliers of certain raw materials, and
has experienced raw material cost increases compared to prior fiscal years.
Additionally, NTIC has experienced significantly longer shipping times and
significant price increases per shipping container compared to prior fiscal
years due to ocean freight capacity issues resulting from increased demand for
shipping and reduced capacity and equipment. These and other issues resulting
from worldwide supply chain disruptions have recently improved but are expected
to continue to some degree in fiscal 2023 and could continue to have a material
adverse effect on NTIC's business, operating results and financial condition.
The precise financial impact and duration, however, cannot be reasonably
estimated at this time.



Financial Overview


NTIC’s management, including its CEO, who is NTIC’s chief operating decision maker, reports and manages NTIC’s operations in two reportable business segments based on products sold, customer base and distribution center: ZERUST® products and services and Natur-Tec® products.

Highlights of NTIC’s fiscal 2022 financial results include the following, with increases or decreases in each case from fiscal 2021:

? NTIC’s consolidated revenue increased by 31.3% in fiscal year 2022 compared to

financial year 2021. The consolidated turnover of NTIC for the financial year 2022 was positive

affected by additional sales resulting from the acquisition of Zerust India and

    increased demand.



? In fiscal year 2022, 77.5% of NTIC’s consolidated net revenue came from

sales of ZERUST® products and services, which increased by 26.1% to $57,459,382

in fiscal year 2022 compared to $45,554,434 in fiscal year 2021. This increase

was due to additional sales following the acquisition of Zerust India,

increased sales to new and existing customers due to increased global demand

compared to the previous year and targeted price increases on certain

our products. Consolidated net revenue of NICT during the 2022 financial year included

$4,608,232 sales made to customers in the oil and gas industry compared to

    $3,793,466 during fiscal 2021.



? Net sales of Natur-Tec® products increased by 52.7% in fiscal 2022 compared to

in fiscal 2021 primarily due to increased sales of finished goods in the North

America and in the majority subsidiary of NTIC in IndiaNatur-Tec India

    Private Limited.



? Cost of goods sold as a percentage of net sales increased to 68.9% during

fiscal 2022 compared to 65.4% in fiscal 2021 mainly due to a

price increases on the raw materials used in NTIC products, as well as an increase

labor and shipping costs that have not been fully passed on to customers.





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? The share of NICTs in joint venture revenues fell from 36.7% to $4,725,918

in fiscal year 2022 compared to $7,465,214 during the 2021 financial year. This decrease

was mainly due to the fact that Zerust India is now a consolidated company

subsidiary in NTIC’s financial statements and an increase in operating income

    expenses and a decrease in gross margins at the joint ventures.



? Joint venture net sales decreased 14% to $104,077,748 during exercise

2022 vs. $120,954,550 during fiscal year 2021. These decreases were

mainly due to lower demand in fiscal year 2022 and Zerust India

acquired since $9,967,464 Zerust India sales were included in NTIC’s net income

    sales in the current fiscal year period.



? Total ICT operating expenses increased by 15.1% to reach $28,414,117 during exercise

2022 vs. $24,679,626 during fiscal year 2021. This increase was mainly

due to $2,375,167 additional expenses due to the acquisition of Zerust India

    during fiscal 2022 and increased personnel, travel, and research and
    development expenses.



? Since NTIC acquired the remaining 50% stake in Zerust India

efficient September 1, 2021NTIC recorded a gain of $3,951,550 during

for fiscal year 2022, which is included in “Revaluation gain on equity acquisition

    method investee" on NTIC's consolidated statements of operations.



? NICT achieved a net result attributable to NTIC of $6,324,700Where $0.66 by

diluted common share, for fiscal 2022, compared to net earnings attributable to

NICT of $6,281,238Where $0.64 per diluted ordinary share, for fiscal year 2021. From

increase for fiscal year 2022, $3,951,550 was due to the gain of Zerust India

    acquisition.



Components of sales and expenses

Here is a description of the main components of net sales and expenses:




Net Sales, Excluding Joint Ventures. NTIC derives net sales from the sale of its
ZERUST® products and services and its Natur-Tec® products. NTIC sells its
ZERUST® products and services and its Natur-Tec® products either directly,
through its subsidiaries, or via a network of joint ventures, independent
distributors, and agents. Net sales, excluding joint ventures represents net
sales by NTIC either directly to end users or to distributors worldwide, but not
sales to NTIC's joint ventures and not sales by NTIC's joint ventures. NTIC
recognizes revenue from the sale of its products primarily upon shipment of the
products.



Net Sales, To Joint Ventures. Net sales, to joint ventures represents net sales
by NTIC to NTIC's joint ventures, but not sales by NTIC either directly to end
users or to distributors or sales by NTIC's joint ventures. NTIC's revenue
recognition policy for sales to its joint ventures is the same as NTIC's policy
for sales to unaffiliated customers. NTIC recognizes revenue from the sale of
its products to joint ventures primarily upon shipment of the products.



Cost of Goods Sold. Most of NTIC's products are manufactured by third parties,
and its cost of goods sold for those products consists primarily of the price
invoiced by its third-party vendors. For the portion of products that NTIC
manufactures, NTIC's cost of goods sold for those products consists primarily of
direct labor, allocated manufacturing overhead, raw materials, and components.
NTIC's margins on its Natur-Tec® resin compounds and finished products are
generally smaller than its margins on its ZERUST® products and services, and
NTIC's margins on its ZERUST® products and services sold into the oil and gas
industry are generally greater than its margins on its traditional ZERUST®
products and services.



Equity in Income from Joint Ventures. NTIC's equity in income from joint
ventures consists of NTIC's share of equity in income from each joint venture
based on the overall profitability of the joint ventures. Such profitability is
subject to variability from quarter to quarter, which, in turn, subjects NTIC's
earnings to variability from quarter to quarter. Traditionally, a portion of the
equity income recorded in a given fiscal year is paid to the owners of the joint
venture entity during the following fiscal year through a dividend. The payment
of a dividend by a joint venture entity is determined by a vote of the joint
venture owners and is not at the sole discretion of NTIC. NTIC typically owns
only 50% or less of its joint venture entities and, thus, does not control the
decisions of these entities regarding whether to pay dividends and, if paid, how
much they should be in a given year.



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Fees for Services Provided to Joint Ventures. NTIC provides certain services to
its joint ventures, including consulting, legal, travel, insurance, technical,
and marketing services based on licensing or other agreements with its joint
ventures. NTIC receives fees for these services it provides to its joint
ventures based primarily on the net sales by NTIC's joint ventures, the latter
of which are not included in NTIC's net sales reflected on NTIC's consolidated
statements of operations. The fees for services received by NTIC from its joint
ventures are generally determined based on either a flat fee or a percentage of
net sales by NTIC's joint ventures depending on local laws and tax regulations.
With respect to EXCOR, NTIC receives an agreed upon fixed quarterly fee for such
services. Under NTIC's agreements with its joint ventures in which the fees for
services are described, amounts are earned when product is shipped from joint
venture facilities, at which point a sale is deemed to have occurred and results
in obligation of the joint venture to pay the royalty and recognition of the fee
by NTIC.


Selling fees. Commercial costs mainly include sales commissions and support costs for the direct sales and NICT distribution system and marketing costs.




General and Administrative Expenses. General and administrative expenses consist
primarily of salaries and benefits and other costs for NTIC's executives,
accounting, stock-based compensation, finance, legal, information technology,
and human resources functions.



Research and Development Expenses. Research and development expenses include
costs associated with the design, development, market analysis, lab testing, and
field trials and enhancements of NTIC's products and services. NTIC expenses all
costs related to product research and development as incurred. Research and
development expenses reflect the net amount after being reduced by
reimbursements related to certain research and development contracts. With
respect to such research and development contracts, NTIC accrues proceeds
received under the contracts and offsets research and development expenses
incurred in equal installments over the timelines associated with completion of
the contracts' specific objectives and milestones.



Remeasurement Gain on Acquisition of Equity Method Investee. Remeasurement gain
on acquisition of equity method investee consists of the gain resulting from the
acquisition of the remaining 50% ownership interest of Zerust India.



Interest Income. Interest income consists of interest earned on investments,
which typically consist of investment-grade, interest-bearing securities and
money market accounts.


Interest charges. Interest expense primarily results from interest associated with any borrowing under NTIC’s line of credit with PNC Bank.




Income Tax Expense. Income tax expense includes federal income taxes, foreign
withholding taxes, income tax of consolidated entities in foreign jurisdictions,
state income tax, and changes to NTIC's deferred tax valuation allowance. NTIC
utilizes the asset and liability method of accounting for income taxes, which
requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax basis of assets
and liabilities that will result in taxable or deductible amounts in the future,
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. NTIC records a tax valuation allowance when it is more likely
than not that some portion or all of its deferred tax assets will not be
realized. NTIC makes this determination based on all available evidence,
including historical data and projections of future results. Income tax expense
is the tax payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.



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Results of Operations


Fiscal 2022 vs. Fiscal 2021




The following table sets forth NTIC's results of operations for fiscal 2022 and
fiscal 2021.



                                            % of                             % of              $               %
                        Fiscal 2022       Net Sales      Fiscal 2021       Net Sales         Change         Change
Net sales, excluding
joint ventures          $ 71,190,801            96.0 %   $ 53,470,623            94.6 %   $ 17,720,178          33.1 %
Net sales, to joint
ventures                   2,968,089             4.0 %      3,023,196             5.4 %        (55,107 )        (1.8 )%
Cost of goods sold        51,090,298            68.9 %     36,920,814            65.4 %     14,169,484          38.4 %
Equity in income from
joint ventures             4,725,918             6.4 %      7,465,214            13.2 %     (2,739,296 )       (36.7 )%
Fees for services
provided to joint
ventures                   5,767,682             7.8 %      5,964,260            10.6 %       (196,578 )        (3.3 )%
Selling expenses          13,038,180            17.6 %     12,016,974            21.3 %      1,021,206           8.5 %
General and
administrative
expenses                  10,600,603            14.3 %      8,262,173            14.6 %      2,338,430          28.3 %
Research and
development expenses       4,775,334             6.4 %      4,400,479             7.8 %        374,855           8.5 %




Net Sales.  NTIC's consolidated net sales increased 31.3% to $74,158,890 during
fiscal 2022 compared to $56,493,819 during fiscal 2021.  NTIC's consolidated net
sales to unaffiliated customers excluding NTIC's joint ventures increased 33.1%
to $71,190,801 during fiscal 2022 compared to $53,470,623 during fiscal 2021.
This increase was primarily a result of $9,967,464 in incremental sales as a
result of the Zerust India acquisition during fiscal 2022 and increased demand
across all market segments.  Net sales to joint ventures decreased 1.8% to
$2,968,089 during fiscal 2022 compared to $3,023,196 during fiscal 2021.



The following table sets forth NTIC's net sales by product segment for fiscal
2022 and fiscal 2021:



                                                                $              %
                         Fiscal 2022      Fiscal 2021         Change        Change
Total ZERUST® sales      $ 57,459,382     $ 45,554,434     $ 11,904,948        26.1 %
Total Natur-Tec® sales     16,699,508       10,939,385        5,760,123        52.7 %
Total net sales          $ 74,158,890     $ 56,493,819     $ 17,665,071        31.3 %




During fiscal 2022, 77.5% of NTIC's consolidated net sales were derived from
sales of ZERUST® products and services, which increased 26.1% to $57,459,382
compared to $45,554,434 during fiscal 2021.



The following table sets forth NTIC's net sales of ZERUST® products for fiscal
2022 and fiscal 2021:



                                                                         $              %
                                  Fiscal 2022      Fiscal 2021         Change        Change
ZERUST® industrial net sales      $ 49,883,060     $ 38,737,771     $ 11,145,289        28.8 %
ZERUST® joint venture net sales      2,968,090        3,023,197          (55,107 )     (1.8% )
ZERUST® oil & gas net sales          4,608,232        3,793,466          814,766        21.5 %
Total ZERUST® net sales             57,459,382     $ 45,554,434     $ 11,904,948        26.1 %




The increase in NTIC's consolidated net sales derived from sales of ZERUST®
products and services was primarily a result of $9,967,464 in incremental sales
as a result of the Zerust India acquisition, increased sales to new and existing
customers due to increased global demand and targeted price increases on certain
products, partially offset by decreased demand in the automotive industry and a
decrease in joint venture net sales, including in particular in Europe which has
been subject to geopolitical uncertainty. Overall, demand for ZERUST® products
and services depends heavily on the overall health of the market segments to
which NTIC sells its products, including the automotive, oil and gas,
agriculture, and mining markets in particular. Beginning in fiscal 2021 and
continuing in fiscal 2022, the automotive industry experienced a microchip
shortage that has decreased the production of vehicles. This decreased
production has decreased demand for ZERUST® products and services within the
automotive industry. The microchip shortage and the corresponding decrease in
the production of vehicles is anticipated to continue into fiscal 2023.



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ZERUST® oil and gas net sales increased 21.5% during fiscal 2022 compared to
fiscal 2021 primarily as a result of new opportunities with new customers,
partially offset by reduced demand as a result of the COVID-19 pandemic. NTIC
anticipates that its sales of ZERUST® products and services into the oil and gas
industry will continue to remain subject to significant volatility from quarter
to quarter as sales are recognized, specifically due to the volatility of oil
prices. Demand for oil and gas products around the world depends primarily on
market acceptance and the reach of NTIC's distribution network. Because of the
typical size of individual orders and overall size of NTIC's net sales derived
from sales of oil and gas products, the timing of one or more orders can
materially affect NTIC's quarterly sales compared to prior fiscal year quarters.



During fiscal 2022, 22.5% of NTIC's consolidated net sales were derived from
sales of Natur-Tec® products, compared to 19.4% during fiscal 2021. Sales of
Natur-Tec® products increased 52.7% to $16,699,508 during fiscal 2022 compared
to $10,939,385 during fiscal 2021 as a result of increased global demand. The
COVID pandemic has adversely impacted demand for Natur-Tec® products from across
the apparel industry, as well as many large users of bioplastics, including
college campuses, stadiums, arenas, restaurants, and corporate office complexes.
NTIC has experienced a recovery in many of these areas to pre-pandemic levels,
but still expects some of these customers will be the last businesses to fully
re-open and operate at full pre-pandemic capacities, and accordingly,
anticipates that the COVID-19 pandemic will continue to adversely affect sales
of Natur-Tec® products into fiscal 2023.



Cost of Goods Sold. Cost of goods sold increased 38.4% in fiscal 2022 compared
to fiscal 2021 primarily as a result of the increase in net sales, as described
above, and price increases on raw materials used in NTIC's products, as well as
increased labor and shipping costs. Cost of goods sold as a percentage of net
sales increased to 68.9% during fiscal 2022 compared to 65.4% during fiscal 2021
primarily due to price increases on raw materials used in NTIC's products, as
well as increased labor and shipping costs. Although NTIC has taken certain
actions to address inflationary pressures and pass on as much of the related
cost increases to its customers as possible, it expects some of these
inflationary pressures to persist into fiscal 2023. Some improvements from these
actions as well as some improvements in gross margin were realized during the
second half of fiscal 2022.



Equity in Income from Joint Ventures. NTIC's equity in income from joint
ventures decreased 36.7% to $4,725,918 during fiscal 2022 compared to $7,465,214
during fiscal 2021. This decrease was primarily due to the fact that Zerust
India is now a consolidated subsidiary within NTIC's financial statements and an
increase in operating expenses and a decrease in gross margins at the joint
ventures. NTIC's equity in income from joint ventures fluctuates based on net
sales and profitability of the joint ventures during the respective periods. Of
the total equity in income from joint ventures, NTIC had equity in income from
joint ventures of $3,236,989 attributable to EXCOR during fiscal 2022 compared
to $4,400,403 attributable to EXCOR during fiscal 2021. NTIC had equity in
income of all other joint ventures of $1,488,929 during fiscal 2022 compared to
$3,064,811 during fiscal 2021.



Fees for Services Provided to Joint Ventures. NTIC recognized fee income for
services provided to joint ventures of $5,767,682 during fiscal 2022 compared to
$5,964,260 during fiscal 2021, representing a decrease of 3.3%, or $196,578. Fee
income for services provided to joint ventures is traditionally a function of
the sales made by NTIC's joint ventures; however, at various joint ventures, the
fee income for services is a fixed amount that does not fluctuate with the
increases in sales which was experienced by certain joint ventures during fiscal
2022. Additionally, during fiscal 2022, NTI Asean recovered $681,859 in
previously written-off fees related to the termination of its joint venture in
China in fiscal 2015, which partially offset decreased fees for services
provided to joint ventures during fiscal 2022. Total net sales of NTIC's joint
ventures decreased $16,876,802 to $104,077,748 during fiscal 2022 compared to
$120,954,550 during fiscal 2021, representing a decrease of 14.0%. This decrease
was primarily a result of decreased demand during fiscal 2022 due in part to
geopolitical uncertainty and the Zerust India acquisition since its sales were
included in NTIC's net sales in fiscal 2022 but not fiscal 2021. Net sales of
NTIC's joint ventures are not included in NTIC's product sales and are not
included in NTIC's consolidated financial statements. Of the total fee income
for services provided to joint ventures, fees of $834,725 were attributable to
EXCOR during fiscal 2022 compared to $920,902 attributable to EXCOR during
fiscal 2021.



Selling Expenses. NTIC's selling expenses increased 8.5% in fiscal 2022 compared
to fiscal 2021 due primarily to incremental expenses due to the Zerust India
acquisition, as well as an increase in travel and personnel expenses compared to
the expenses incurred during fiscal 2021. Selling expenses as a percentage of
net sales decreased to 17.6% for fiscal 2022 compared to 21.3% in fiscal 2021
primarily due to the increase in net sales, partially offset by the increased
selling expenses, as previously described.



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General and Administrative Expenses. NTIC's general and administrative expenses
increased 28.3% in fiscal 2022 compared to fiscal 2021 primarily due to
incremental expenses due to the Zerust India acquisition and transaction
expenses incurred to complete the acquisition, as well as increased travel and
personnel expenses compared to the expenses incurred during fiscal 2021. As a
percentage of net sales, general and administrative expenses decreased to 14.3%
for fiscal 2022 from 14.6% for fiscal 2021 primarily due to the increase in net
sales, partially offset by the increase in general and administrative expenses.



Research and development expenses. NTIC’s research and development expenses increased by 8.5% in fiscal year 2022 compared to fiscal year 2021, mainly due to the increase in personnel and development efforts.

Interest income. NTIC’s interest income decreased to $49,241 in fiscal year 2022 compared to $151,875 in fiscal 2021 primarily due to changes in invested cash balances.




Interest Expense. NTIC's interest expense increased to $89,096 in fiscal 2022
compared to $16,086 in fiscal 2021 due primarily to increased outstanding
borrowings under the line of credit during fiscal 2022 and increased interest
rates during fiscal 2022 compared to fiscal 2021.



Remeasurement Gain on Acquisition of Equity Method Investee. Authoritative
guidance on accounting for business combinations requires that an acquirer
re-measure its previously held equity interest in the acquisition at its
acquisition date fair value and recognize the resulting gain or loss in
earnings. As such, since NTIC acquired the remaining 50% ownership interest of
Zerust India effective September 1, 2021, NTIC recognized a gain of $3,951,550
during fiscal 2022. This gain is included in "Remeasurement gain on acquisition
of equity method investee" on NTIC's consolidated statements of operations.



Income before income tax expense. NTIC had earnings before income tax expense of
$9,059,770 for the 2022 financial year compared to a profit before tax expense of
$8,458,642 for fiscal year 2021.

income tax expense. The income tax expense was $1,873,836 in fiscal year 2022 compared to $1,461,905 in fiscal 2021 for an effective tax rate of 20.7% and 17.3%, respectively.




NTIC considers the earnings of certain foreign joint ventures to be indefinitely
invested outside the United States on the basis of estimates that NTIC's future
domestic cash generation will be sufficient to meet future domestic cash needs.
As a result, U.S. income and foreign withholding taxes have not been recognized
on the cumulative undistributed earnings of $21,256,923 and $24,702,778 as of
August 31, 2022 and August 31, 2021, respectively. To the extent undistributed
earnings of NTIC's joint ventures are distributed in the future, they are not
expected to result in any material additional income tax liability after the
application of foreign tax credits.



Net Income Attributable to NTIC. Net income attributable to NTIC was $6,324,700,
or $0.66 per diluted common share, for fiscal 2022 compared to net income
attributable to NTIC of $6,281,238, or $0.64 per diluted common share, for
fiscal 2021, an increase of $43,462 or $0.02 per diluted share. This increase
was primarily due an increase in gross margin and the remeasurement gain related
to the acquisition of Zerust India of $3,951,550 included in "Remeasurement gain
on acquisition of equity method investee" on NTIC's consolidated statements of
operations, partially offset by increases in operating expenses and cost of
goods sold and decreases in joint venture income contribution.



NTIC anticipates that its earnings will continue to be adversely affected by
both the COVID-19 pandemic and worldwide supply disruptions, among other
factors. Additionally, NTIC anticipates that its quarterly net income will
continue to remain subject to significant volatility primarily due to the
financial performance of its subsidiaries and joint ventures, sales of its
ZERUST® products and services into the oil and gas industry, and sales of its
Natur-Tec® bioplastics products, which sales fluctuate more on a quarterly basis
than the traditional ZERUST® business.



Other comprehensive income – Foreign currency translation adjustment. Changes in the foreign currency translation adjustment are due to the fluctuation of the WE dollar against the euro and other foreign currencies in fiscal year 2022 versus fiscal year 2021.

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Cash and capital resources




Sources of Cash and Working Capital. NTIC's working capital, defined as current
assets less current liabilities, was $23,169,480 as of August 31, 2022,
including $5,333,890 in cash and cash equivalents and $5,590 in available for
sale securities, compared to $25,230,893 as of August 31, 2021, including
$7,680,641 in cash and cash equivalents and $4,634 in available for sale
securities.



NTIC has a revolving line of credit with PNC Bank of $7,000,000, which was
increased from $5,000,000 effective as of May 20, 2022 to allow for financial
flexibility, and was scheduled to decrease back to $5,000,000 effective as of
August 16, 2022. Subsequently, to maintain future financial flexibility, on
August 8, 2022, NTIC and PNC Bank entered into an Amended and Restated Revolving
Line of Credit Note and agreed to keep the line of credit at $7,000,000 until
its maturity date, January 7, 2023. As of August 31, 2022, $5,900,000 was
outstanding under the revolving line of credit, compared to no borrowings
outstanding as of August 31, 2021. Such outstanding borrowings were used
primarily to fund NTIC's acquisition of the remaining ownership interest of
Zerust India. Outstanding advances under the line of credit bear interest at the
daily Bloomberg Short-Term Bank Yield Index (BSBY) rate plus 250 basis points
(2.50%). The line of credit is scheduled to mature on January 7, 2023. The line
of credit is governed under an Amended and Restated Loan Agreement dated August
31, 2021. The loan agreement contains standard covenants, including affirmative
financial covenants, such as the maintenance of a minimum fixed charge coverage
ratio, and negative covenants, which, among other things, limit the incurrence
of additional indebtedness, loans and equity investments, disposition of assets,
mergers and consolidations and other matters customarily restricted in such
agreements. Under the loan agreement, NTIC is subject to a minimum fixed charge
coverage ratio of 1.10:1.00. As of August 31, 2022, NTIC was in compliance with
all debt covenants under the Amended and Restated Loan Agreement. As of August
31, 2022, NTIC did not have any letters of credit outstanding with respect to
the letter of credit sub-facility available under the revolving line of credit
with PNC Bank.



NTIC believes that a combination of its existing cash and cash equivalents,
available for sale securities, forecasted cash flows from future operations,
anticipated distributions of earnings, anticipated fees to NTIC for services
provided to its joint ventures, and funds available through existing or
anticipated financing arrangements will be adequate to fund its existing
operations, investments in new or existing joint ventures or subsidiaries,
capital expenditures, debt repayments, cash dividends, and any stock repurchases
for at least the next 12 months. In fiscal 2023, NTIC expects to continue to
invest directly and through its use of working capital in Zerust India, NTIC
China, Zerust Mexico, NTI Europe, its joint ventures, research and development,
marketing efforts, resources for the application of its corrosion prevention
technology in the oil and gas industry, and its Natur-Tec® bio-plastics
business, although the amounts of these various investments are not known at
this time.



NTIC also expects to use some of its capital resources to continue to transition
some of its joint ventures as needed or appropriate, which may include
additional acquisitions by NTIC of the remaining ownership interests of joint
ventures not owned by NTIC or dissolutions or liquidations of one or more of its
joint ventures. NTIC terminated its joint venture in Russia in May 2022. The
termination of NTIC's joint venture in Russia did not have a material adverse
effect on NTIC's results of operations or financial condition or its joint
venture operations given the immateriality of the operations of this joint
venture.



NTIC traditionally has used the cash generated from its operations,
distributions of earnings from joint ventures and fees for services provided to
its joint ventures to fund NTIC's new technology investments and capital
contributions to new and existing subsidiaries and joint ventures. NTIC's joint
ventures traditionally have operated with little or no debt and have been
self-financed with minimal initial capital investment and minimal additional
capital investment from their respective owners. Therefore, NTIC believes there
is limited exposure by NTIC's joint ventures that could materially impact their
respective operations and/or liquidity.



In order to take advantage of new product and market opportunities to expand its
business and increase its revenues and assist with joint venture transitions,
NTIC may decide to finance such opportunities by additional borrowings under its
revolving line of credit or raising additional financing through the issuance of
debt or equity securities. There is no assurance that any financing transaction
will be available on terms acceptable to NTIC or at all or that any financing
transaction will not be dilutive to NTIC's current stockholders.



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Uses of Cash and Cash Flow. Net cash provided by operating activities during
fiscal 2022 was $1,146,078, which resulted principally from NTIC's net income,
dividends received from joint ventures, depreciation and amortization expense,
stock-based compensation and increases in accounts payable, partially offset by
the remeasurement gain on acquisition of equity method investee, deferred income
tax and equity in income from joint ventures and an increase in accounts
receivable and inventory. Net cash provided by operating activities during
fiscal 2021 was $2,892,940, which resulted principally from NTIC's net income,
dividends received from joint ventures, stock-based compensation, depreciation,
amortization and increases in accounts payable and accrued liabilities,
partially offset by NTIC's equity in income from joint ventures and an increase
in accounts receivable and prepaid expenses and other.



NTIC's cash flows from operations are impacted by significant changes in certain
components of NTIC's working capital, including inventory turnover and changes
in receivables and payables. NTIC considers internal and external factors when
assessing the use of its available working capital, specifically when
determining inventory levels and credit terms of customers. Key internal factors
include existing inventory levels, stock reorder points, customer forecasts and
customer requested payment terms. Key external factors include the availability
of primary raw materials and sub-contractor production lead times. NTIC's
typical contractual terms for trade receivables, excluding joint ventures, are
traditionally 30 days and 90 days for trade receivables from its joint ventures.
Before extending unsecured credit to customers, excluding NTIC's joint ventures,
NTIC reviews customers' credit histories and will establish an allowance for
uncollectible accounts based upon factors surrounding the credit risk of
specific customers and other information. Accounts receivable over 30 days are
considered past due for most customers. NTIC does not accrue interest on past
due accounts receivable. If accounts receivables in excess of the provided
allowance are determined uncollectible, they are charged to selling expense in
the period that the determination is made. Accounts receivable are deemed
uncollectible based on NTIC exhausting reasonable efforts to collect. NTIC's
typical contractual terms for receivables for services provided to its joint
ventures are 90 days. NTIC records receivables for services provided to its
joint ventures on an accrual basis, unless circumstances exist that make the
collection of the balance uncertain, in which case the fee income will be
recorded on a cash basis until there is consistency in payments. This
determination is handled on a case-by-case basis.



NTIC experienced an increase in trade receivables and inventory as of August 31,
2022 compared to August 31, 2021. Trade receivables, excluding joint ventures,
as of August 31, 2022 increased $2,091,353 compared to August 31, 2021,
primarily related to an increase in sales.



Customer outstandings, excluding balances of joint ventures, August 31, 2022 decreased from 3 days on average to 72 days on average in the unpaid balances of these customers at August 31, 2021.




Outstanding trade receivables from joint ventures as of August 31, 2022
increased $73,053 compared to August 31, 2021 primarily due to the timing of
payments. Outstanding balances from trade receivables from joint ventures
increased by an average of 10 days as of August 31, 2022 to an average of 85
days from an average of 75 days from balances outstanding from these customers
compared to August 31, 2021. The average days outstanding of trade receivables
from joint ventures as of August 31, 2022 were primarily due to the receivables
balances at South Korea and Thailand.



Outstanding receivables for services provided to joint ventures as of August 31,
2022 increased $259,990 compared to August 31, 2021, and the average days to pay
increased an average of 20 days to an average of 112 days compared to August 31,
2021.



Net cash used in investing activities during fiscal 2022 was $7,108,174, which
was primarily the result of the purchase of the remaining 50% ownership interest
in Zerust India, purchases of property and equipment, investment in joint
venture and investments in patents. Net cash used in investing activities during
fiscal 2021 was $103,316, which was primarily the result of the purchase of
available for sale securities, purchases of property and equipment and
investments in patents, partially offset by proceeds from the sale of available
for sale securities.



Net cash provided by financing activities for fiscal 2022 was $3,188,377, which
resulted from borrowings under the line of credit and proceeds from the exercise
of stock options and NTIC's employee stock purchase plan, partially offset by
dividends paid on NTIC common stock and dividends received by non-controlling
interest. Net cash used in financing activities for fiscal 2021 was $1,522,209,
which resulted from dividends paid on NTIC common stock and dividends paid to a
non-controlling interest, partially offset by proceeds from NTIC's employee
stock purchase plan and proceeds from stock option exercises.



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Share Repurchase Plan. On January 15, 2015, NTIC's Board of Directors authorized
the repurchase of up to $3,000,000 in shares of NTIC common stock through open
market purchases or unsolicited or solicited privately negotiated transactions.
This program has no expiration date but may be terminated by NTIC's Board of
Directors at any time. No repurchases occurred during fiscal 2022 or fiscal
2021. As of August 31, 2022, up to $2,640,548 in shares of NTIC common stock
remained available for repurchase under NTIC's stock repurchase program.



Cash dividends. During fiscal year 2022, NTIC’s board of directors declared cash dividends on the following dates in the following amounts to registered holders of NTIC common stock on the following record dates:



Declaration Date   Amount      Record Date        Payable Date
October 20, 2021   $  0.07   November 3, 2021   November 17, 2021
January 21, 2022   $  0.07   February 2, 2022   February 16, 2022
April 22, 2022     $  0.07     May 4, 2022        May 18, 2022
July 20, 2022      $  0.07    August 3, 2022     August 17, 2022




On April 23, 2020, NTIC announced the temporary suspension of its quarterly cash
dividend pending clarity on the financial impact of COVID-19 on NTIC. On January
15, 2021, NTIC announced the reinstatement of its quarterly cash dividend.
During fiscal 2021, NTIC's Board of Directors declared cash dividends on the
following dates in the following amounts to holders of record of NTIC common
stock as of the following record dates:



Declaration Date   Amount      Record Date        Payable Date
January 15, 2021   $ 0.065   February 3, 2021   February 17, 2021
April 23, 2021     $ 0.065     May 5, 2021        May 19, 2021
July 21, 2021      $ 0.065    August 4, 2021     August 18, 2021




The declaration of future dividends is not guaranteed and will be determined by
NTIC's Board of Directors in light of conditions then existing, including NTIC's
earnings, financial condition, cash requirements, restrictions in financing
agreements, business conditions, and other factors, including without limitation
the effect of COVID-19 on NTIC's business, operating results and financial
condition.



Capital Expenditures and Commitments. NTIC spent $1,496,674 on capital
expenditures during fiscal 2022, which related primarily to the purchase of new
equipment and facility improvements. NTIC expects to spend an aggregate of
approximately $1,200,000 to $1,500,000 on capital expenditures during fiscal
2023, which it expects will relate primarily to the purchase of new equipment
and facility improvements.



Inflation and Seasonality



Although inflation in the United States and abroad historically has had little
effect on NTIC, inflationary pressures adversely affected NTIC's gross margins
during fiscal 2022 and are expected to persist into fiscal 2023.



NTIC believes there is some seasonality in its business. NTIC's net sales in the
second fiscal quarter were adversely affected by the long Chinese New Year, the
North American holiday season, and overall less corrosion taking place at lower
winter temperatures worldwide.



Market Risk


NICTs are exposed to certain market risks resulting from variations in exchange rates, commodity prices and interest rates.




Because the functional currency of NTIC's foreign operations and investments in
its foreign joint ventures is the applicable local currency, NTIC is exposed to
foreign currency exchange rate risk arising from transactions in the normal
course of business. NTIC's principal exchange rate exposure is with the Euro,
the Japanese Yen, the Indian Rupee, the Chinese Renminbi, the South Korean Won,
and the English Pound against the U.S. Dollar. NTIC's fees for services provided
to joint ventures and dividend distributions from these foreign entities are
paid in foreign currencies and, thus, fluctuations in foreign currency exchange
rates could result in declines in NTIC's reported net income. Since NTIC's
investments in its joint ventures are accounted for using the equity method, any
changes in foreign currency exchange rates would be reflected as a foreign
currency translation adjustment and would not change NTIC's equity in income
from joint ventures reflected in its consolidated statements of operations. NTIC
does not hedge against its foreign currency exchange rate risk.



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Certain raw materials used in NTIC products are exposed to variations in the price of raw materials. The main commodity price exposures are to a variety of plastic resins.




Any outstanding advances under NTIC's revolving line of credit with PNC Bank
bear interest at an annual rate based on daily BSBY plus 2.50%. As of August 31,
2022, NTIC had borrowings of $5,900,000 under the line of credit that existed as
of that date.



Related Party Transactions



Since NTIC's joint ventures are considered related parties, NTIC recorded sales
to its joint ventures as a separate line item on the face of NTIC's consolidated
statements of operations and recorded fees for services provided to its joint
ventures as separate line items on the face of NTIC's consolidated statements of
operations. NTIC also records trade receivables from joint ventures, receivables
for fees for services provided to joint ventures, and NTIC's investments in
joint ventures as separate line items on its consolidated balance sheets.



NTIC established its joint venture network approximately 30 years ago as a
method to increase its worldwide distribution network for ZERUST® rust and
corrosion inhibiting products and services. NTIC participates, either directly
or indirectly, in 16 active joint venture arrangements in North America, Europe,
and Asia. Each of these joint ventures generally manufactures and markets
finished products in the geographic territory to which it is assigned. NTIC's
joint venture partners are knowledgeable in the applicable environmental, labor,
tax, and other requisite regulations and laws of the respective foreign
countries in which they operate, as well as the local customs and business
practices. NTIC's revenue recognition policy for sales to its joint ventures is
the same as its policy for sales to unaffiliated customers.



The fees for services provided to joint ventures are determined based on either
a flat fee or a percentage of sales depending on local laws and tax regulations.
With respect to NTIC's joint venture in Germany, EXCOR, NTIC recognizes an
agreed upon quarterly fee for such services. NTIC records revenue related to
fees for services provided to joint ventures when earned, amounts are
determinable, and collectability is reasonably assured. Under NTIC's agreements
with its joint ventures, fee amounts are earned when product is shipped from
joint venture facilities. NTIC reviews the financial situation of each joint
venture to assist in the likelihood of collections on amounts earned. From time
to time, NTIC elects to account for such fees on a cash basis for certain joint
ventures when uncertainty exists surrounding the collections of such fees. There
are no fees being accounted for in this manner at present. The expenses incurred
in support of its joint ventures are direct expenses that NTIC incurs related to
its joint ventures and include such items as employee compensation and benefit
expenses, travel expense, insurance, consulting expense, legal expense, and lab
supplies and testing expense.


See Note 15 to NTIC’s consolidated financial statements for additional information on related party transactions.

Significant Accounting Policies and Estimates




The preparation of NTIC's consolidated financial statements requires management
to make estimates and judgments that affect the reported amount of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. The Securities and Exchange Commission has defined a company's
most critical accounting policies as those that are most important to the
portrayal of its financial condition and results of operations and those which
require the company to make its most difficult and subjective judgments, often
as a result of the need to make estimates of matters that are inherently
uncertain. Based on this definition, NTIC has identified the following critical
accounting policies. Although NTIC believes that its estimates and assumptions
are reasonable, they are based upon information available when they are made.
Actual results may differ significantly from these estimates under different
assumptions or conditions.



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Principles of Consolidation



NTIC evaluates its voting and variable interests in entities on a qualitative
and quantitative basis. NTIC consolidates entities in which it concludes it has
the power to direct the activities that most significantly impact an entity's
economic success and has the obligation to absorb losses or the right to receive
benefits that could be significant to the entity. All such relationships are
evaluated on an ongoing basis. The consolidated financial statements included in
this report include the accounts of Northern Technologies International
Corporation, its wholly-owned subsidiaries, Northern Technologies Holding
Company, LLC, NTIC (Shanghai) Co., Ltd., NTIC Europe GmbH and ZERUST-EXCOR
MEXICO, S. de R.L. de C.V., NTIC's majority-owned subsidiary in Brazil, Zerust
Prevenção de Corrosão S.A., NTIC's majority-owned holding company, NTI Asean
LLC, and NTIC's majority-owned subsidiary in India, Natur-Tec India Private
Limited, Natur-Tec Lanka, Zerust Singapore Pte Ltd (Zerust Singapore) and Zerust
Vietnam Co. Ltd (Zerust Vietnam). NTIC's consolidated financial statements do
not include the accounts of any of its joint ventures. Effective as of September
1, 2021, HNTI Limited has been consolidated in NTIC's consolidated financial
statements.



Business Combinations



When applicable, NTIC accounts for the acquisition of a business in accordance
with the accounting standards codification guidance for business combinations,
whereby the total consideration transferred is allocated to the assets acquired
and liabilities assumed, including amounts attributable to non-controlling
interests, when applicable, based on their respective estimated fair values as
of the date of acquisition. Goodwill represents the excess of consideration
transferred over the estimated fair value of the net assets acquired in a
business combination.



Assigning estimated fair values to the net assets acquired requires the use of
significant estimates, judgments, inputs, and assumptions regarding the fair
value of intangible assets that are separately identifiable from goodwill,
inventory, and property, plant, and equipment. While the ultimate responsibility
for determining estimated fair values of the acquired net assets resides with
management, for material acquisitions, NTIC may retain the services of certified
valuation specialists to assist with assigning estimated fair values to certain
acquired assets and assumed liabilities, including intangible assets that are
separately identifiable from goodwill, inventory, and property, plant, and
equipment. Estimated fair values of acquired intangible assets that are
separately identifiable from goodwill, inventory, and property, plant, and
equipment are generally based on available historical information, future
expectations, available market data, and assumptions determined to be reasonable
but are inherently uncertain with respect to future events, including economic
conditions, competition, technological obsolescence, the useful life of the
acquired assets, and other factors. These significant estimates, judgments,
inputs, and assumptions include, when applicable, the selection of an
appropriate valuation method depending on the nature of the respective asset,
such as the income approach, the market or sales comparison approach, or the
cost approach; estimating future cash flows based on projected revenues and/or
margins that NTIC expects to generate subsequent to the acquisition; applying an
appropriate discount rate to estimate the present value of those projected cash
flows NTIC expects to generate; selecting an appropriate terminal growth rate
and/or royalty rate or estimating a customer attrition or technological
obsolescence factor where necessary and appropriate given the nature of the
respective asset; assigning an appropriate contributory asset charge where
needed; determining an appropriate useful life and the related depreciation or
amortization method for the respective asset; and assessing the accuracy and
completeness of other historical financial metrics of the acquiree used as
standalone inputs or as the basis for determining estimated projected inputs
such as margins, customer attrition, and costs to hold and sell product.



In determining the estimated fair value of intangible assets that are separately
identifiable from goodwill, NTIC typically utilizes the income approach, which
discounts the projected future cash flows using a discount rate that
appropriately reflects the risks associated with the projected cash flows.
Generally, NTIC estimates the fair value of acquired customer relationships
using the relief from royalty method under the income approach, which is based
on the hypothetical royalty stream that would be received if NTIC were to
license the acquired trade name. For most other acquired intangible assets, NTIC
estimates fair value using the excess earnings method under the income approach,
which is typically applied when cash flows are not directly generated by the
asset, but rather, by an operating group that includes the particular asset. In
certain instances, particularly in relation to developed technology or patents,
NTIC may utilize the cost approach depending on the nature of the respective
intangible asset and the recency of the development or procurement of such
technology. The useful lives and amortization methods for the acquired
intangible assets that are separately identifiable from goodwill are generally
determined based on the period of expected cash flows used to measure the fair
value of the acquired intangible assets and the nature of the use of the
respective acquired intangible asset, adjusted as appropriate for
entity-specific factors including legal, regulatory, contractual, competitive,
economic, and/or other factors such as customer attrition rates and product or
order lifecycles that may limit the useful life of the respective acquired
intangible asset. In determining the estimated fair value of acquired inventory,
NTIC typically utilizes the cost approach for raw materials and the sales
comparison approach for work in process, finished goods, and service parts. In
determining the estimated fair value of acquired property, plant, and equipment,
NTIC typically utilizes the sales comparison approach or the cost approach
depending on the nature of the respective asset and the recency of the
construction or procurement of such asset.



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NTIC may refine the estimated fair values of assets acquired and liabilities
assumed, if necessary, over a period not to exceed one year from the date of
acquisition by taking into consideration new information that, if known as of
the date of acquisition, would have affected the estimated fair values ascribed
to the assets acquired and liabilities assumed. The judgments made in
determining the estimated fair value assigned to assets acquired and liabilities
assumed, as well as the estimated useful life and depreciation or amortization
method of each asset, can materially impact the net earnings of the periods
subsequent to an acquisition through depreciation and amortization, and in
certain instances through impairment charges, if the asset becomes impaired in
the future. During the measurement period, any purchase price allocation changes
that impact the carrying value of goodwill will affect any measurement of
goodwill impairment taken during the measurement period, if applicable. If
necessary, purchase price allocation revisions that occur outside of the
measurement period are recorded within cost of sales, selling expenses or
general and administrative expenses within NTIC's consolidated statements of
operations depending on the nature of the adjustment.



Investments in joint ventures and recoverability of investments in joint ventures




NTIC's investments in its joint ventures are accounted for using the equity
method. NTIC assesses its joint ventures for impairment on an annual basis as of
August 31 of each year as part of its fiscal year end analysis. In addition to
the annual review for impairment, NTIC reviews the operating results of each
joint venture on a quarterly basis in comparison to its historical operating
results and its accrual for fees for services provided to joint ventures. If the
operating results of a joint venture do not meet NTIC's financial performance
expectations, an additional evaluation is performed on the joint venture. In
addition to the annual assessments for impairment, non-periodic assessments for
impairment may occur if cash remittances are less than accrued balances, a joint
venture's management requests capital, or other events occur suggesting anything
other than temporary decline in value. If an investment were determined to be
impaired, then a reserve would be created to reflect the impairment on the
financial results of NTIC. NTIC's evaluation of its investments in joint
ventures requires NTIC to make assumptions about future cash flows of its joint
ventures. These assumptions require significant judgment, and actual results may
differ from assumed or estimated amounts.



Investments at Carrying Value



If NTIC is no longer able to exercise significant influence over operating and
financial policy of a joint venture previously accounted for under the equity
method, it maintains the investment at the carrying value as of the date that
significant influence no longer exists and discontinues accruing the
proportionate earnings or losses of the investment.



Investments are considered to be impaired when a decline in fair value is judged
to be other-than-temporary. Fair value is calculated based on publicly available
market information or other estimates determined by management. NTIC employs a
systematic methodology on a quarterly basis that considers available
quantitative and qualitative evidence in evaluating potential impairment of its
investments. If the cost of an investment exceeds its fair value, NTIC
evaluates, among other factors, general market conditions, credit quality of
debt instrument issuers, the duration and extent to which the fair value is less
than cost, and for equity securities, its intent and ability to hold, or plans
to sell, the investment. NTIC also considers specific adverse conditions related
to the financial health of and business outlook for the investee, including
industry and sector performance, changes in technology, and operational and
financing cash flow factors. Once a decline in fair value is determined to be
other-than-temporary, an impairment charge is recorded to other income
(expense), and a new cost basis in the investment is established.



Revenue Recognition



Revenue is measured based on consideration specified in the contract with a
customer, adjusted for any applicable estimates of variable consideration and
other factors affecting the transaction price, including noncash consideration,
consideration paid or payable to customers, and significant financing
components. While most of NTIC's revenue is contracted with customers through
one-time purchase orders and short-term contracts, NTIC does have long-term
arrangements with certain customers. Revenue from all customers is recognized
when a performance obligation is satisfied by transferring control of a distinct
good or service to a customer. The transaction price for NTIC's products is the
invoiced amount. Revenue is recognized when transfer of control occurs as
defined by the terms in the customer agreement, generally upon shipment of
product.



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With respect to recording revenue related to fees earned for services provided
to NTIC's joint ventures, amounts are earned when product is shipped from joint
venture facilities, at which point a sale is deemed to have occurred and results
in obligation for the joint venture to pay the royalty and recognition of the
fee by NTIC. The support and services NTIC provides its joint ventures include
consulting, travel, insurance, technical and marketing services to existing
joint ventures, legal fees incurred in the establishment of new joint ventures,
registration and promotion and legal defense of worldwide trademarks, and legal
fees incurred in connection with the filing of patent applications based on
licensing or other agreements with its joint ventures. NTIC receives fees for
the services it provides to its joint ventures based primarily on the net sales
by NTIC's joint ventures. The fees for support services received by NTIC from
its joint ventures are generally determined based on either a flat fee or a
percentage of net sales by NTIC's joint ventures depending on local laws and tax
regulations. Under NTIC's agreements with its joint ventures, amounts are earned
when product is shipped from joint venture facilities. NTIC reviews the
financial situation of each of its joint ventures to assist in the likelihood of
collections on amounts earned. NTIC elects to account for these fees on a cash
basis for certain joint ventures when uncertainty exists surrounding the
collections of such fees.



Accounts Receivable



Trade receivables arise from sales of NTIC's products and services to NTIC's
joint ventures and to unaffiliated customers. Trade receivables from joint
ventures arise from sales NTIC makes to its joint ventures of products and the
essential additives required to make ZERUST® industrial corrosion inhibiting
products functional. Receivables for services to NTIC's joint ventures are
contractually based primarily on a percentage of the sales of the joint ventures
and are intended to compensate NTIC for services NTIC provides to its joint
ventures, including consulting, legal, travel, insurance, technical, and
marketing services.



Payment terms for NTIC's unaffiliated customers are determined based on credit
risk and vary by customer. NTIC typically offers standard payment terms of net
30 days to unaffiliated customers. Payment terms for NTIC's joint ventures also
are determined based on credit risk; however, additional consideration is given
to the individual joint venture due to the transportation time associated with
ocean delivery of most products and certain other factors. NTIC typically offers
payment terms to joint ventures of net 90 days. NTIC does not accrue interest on
past due accounts receivable. NTIC reviews the credit histories of its
customers, including its joint ventures, before extending unsecured credit. NTIC
values accounts and notes receivable net of an allowance for doubtful accounts.
Each quarter, NTIC prepares an analysis of its ability to collect outstanding
receivables that provides a basis for an allowance estimate for doubtful
accounts. In doing so, NTIC evaluates the age of its receivables, past
collection history, current financial conditions of key customers and its joint
ventures, and economic conditions. Based on this evaluation, NTIC establishes a
reserve for specific accounts and notes receivable that it believes are
uncollectible, as well as an estimate of uncollectible receivables not
specifically known. Deterioration in the financial condition of any key customer
or joint venture or a significant slowdown in the economy could have a material
negative impact on NTIC's ability to collect a portion or all of the accounts
and notes receivable. NTIC believes that an analysis of historical trends and
its current knowledge of potential collection problems provide NTIC with
sufficient information to establish a reasonable estimate for an allowance for
doubtful accounts. However, since NTIC cannot predict with certainty future
changes in the financial stability of its customers or joint ventures, NTIC's
actual future losses from uncollectible accounts may differ from its estimates.
In the event NTIC determined that a smaller or larger uncollectible accounts
reserve is appropriate, NTIC would record a credit or charge to selling expense
in the period that it made such a determination.



Goodwill Impairment



Goodwill represents the excess purchase price over the fair value of tangible
net assets acquired in acquisitions after amounts have been allocated to
intangible assets. Goodwill is tested for impairment annually (at August 31), or
more frequently when events or changes in circumstances indicate that the asset
might be impaired. Examples of such events or circumstances include, but are not
limited to, a significant adverse change in legal or business climate, an
adverse regulatory action or unanticipated competition.



                                       52
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Recovery of long-lived assets




NTIC reviews its long-lived assets whenever events or changes in circumstances
indicate the carrying amount of the assets may not be recoverable and determines
potential impairment by comparing the carrying value of the assets with expected
net cash flows expected to be provided by operating activities of the business
or related products. If the sum of the expected undiscounted future net cash
flows were less than the carrying value, NTIC would determine whether an
impairment loss should be recognized. An impairment loss would be measured by
comparing the amount by which the carrying value exceeds the fair value of the
asset.


Translation of foreign currencies (accumulated other comprehensive losses)




The functional currency of each international joint venture and subsidiary is
the applicable local currency. The translation of the applicable foreign
currencies into U.S. dollars is performed for balance sheet accounts using
exchange rates in effect at the balance sheet date and for revenue and expense
accounts using an average monthly exchange rate. Translation gains or losses are
reported as an element of accumulated other comprehensive income (loss).



NTIC (excluding NTIC China, Zerust Brazil, Natur-Tec India, Natur-Tec Lanka, NTI
Asean, Zerust Singapore, Zerust Vietnam, Zerust Mexico, Zerust India, NTI
Europe, and NTIC's joint ventures) conducts all foreign transactions based on
the U.S. dollar. Since NTIC's investments in its joint ventures are accounted
for using the equity method, any changes in foreign currency exchange rates
would be reflected as a foreign currency translation adjustment and would not
change the equity in income from joint ventures reflected in NTIC's consolidated
statements of operations.



Stock-Based Compensation



NTIC recognizes compensation cost relating to share-based payment transactions,
including grants of employee stock options and transactions under NTIC's
employee stock purchase plan, in its consolidated financial statements. That
cost is measured based on the fair value of the equity or liability instruments
issued. NTIC measures the cost of employee services received in exchange for
stock options or other stock-based awards based on the grant-date fair value of
the award and recognizes the cost over the period the employee is required to
provide services for the award.



Inventory Valuation



NTIC's inventories consist primarily of production materials and finished goods.
NTIC purchases production materials and finished goods based on forecasted
demand and records inventory at the lower of cost or net realizable value. Cost
is determined by the first-in, first-out (FIFO) method. Management regularly
assesses inventory valuation based on current and forecasted usage, demand and
pricing, shelf life, customer inventory-related contractual obligations, and
other considerations. If actual results differ from management estimates with
respect to the actual or projected selling of inventories at amounts less than
their carrying amounts, NTIC would adjust its inventory balances accordingly.



Income Taxes



NTIC utilizes the asset and liability method of accounting for income taxes,
which requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
consolidated financial statements. Deferred income tax assets and liabilities
are determined based on the differences between the financial statement and tax
basis of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. The effect of a change in tax
rates on deferred tax assets and liabilities is recognized in operations in the
period that includes the enactment date.



NTIC records net deferred tax assets to the extent NTIC believes these assets
will more likely than not be realized. In making such a determination, NTIC
considers all available positive and negative evidence, including future
reversals of existing taxable temporary differences, projected future taxable
income, tax-planning strategies, and results of recent operations, including the
prior three-year history. In the event NTIC determines that it would be able to
realize its deferred income tax assets in the future in excess of their net
recorded amount, NTIC makes an adjustment to the deferred tax asset valuation
allowance, which would reduce the provision for income taxes.



                                       53
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Recent accounting pronouncements

See Note 2 to NTIC’s consolidated financial statements for a discussion of recent accounting pronouncements.



Item 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


NICTs are exposed to certain market risks resulting from variations in exchange rates, commodity prices and interest rates.




Because the functional currency of NTIC's foreign operations and investments in
its foreign joint ventures is the applicable local currency, NTIC is exposed to
foreign currency exchange rate risk arising from transactions in the normal
course of business. NTIC's principal exchange rate exposure is with the Euro,
the Japanese Yen, the Indian Rupee, the Chinese Renminbi, the South Korean Won,
and the English Pound against the U.S. Dollar. NTIC's fees for services provided
to joint ventures and dividend distributions from these foreign entities are
paid in foreign currencies, and, thus, fluctuations in foreign currency exchange
rates could result in declines in NTIC's reported net income. Since NTIC's
investments in its joint ventures are accounted for using the equity method, any
changes in foreign currency exchange rates would be reflected as a foreign
currency translation adjustment and would not change NTIC's equity in income
from joint ventures reflected in its consolidated statements of operations. NTIC
does not hedge against its foreign currency exchange rate risk.



Certain raw materials used in NTIC products are exposed to variations in the price of raw materials. The main commodity price exposures are to a variety of plastic resins.




Any outstanding advances under NTIC's revolving line of credit with PNC Bank
bear interest at an annual rate based on daily BSBY plus 2.50%. As of August 31,
2022, NTIC had borrowings of $5,900,000 under the line of credit that existed as
of that date.























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© Edgar Online, source Previews

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Review of broadcast rules around major sporting events https://www.executivetravel.biz/review-of-broadcast-rules-around-major-sporting-events/ Tue, 15 Nov 2022 08:52:03 +0000 https://www.executivetravel.biz/review-of-broadcast-rules-around-major-sporting-events/
  • The changes would help ensure major moments such as the Olympics, FIFA World Cup and Wimbledon remain accessible on platforms such as BBC iPlayer, ITV Hub and Channel 4’s on-demand service.
  • Comes as a growing number of viewers tune in through digital platforms

Access for sports fans to watch the world’s biggest events on digital platforms could be guaranteed as the government reviews rules that allow broadcasters access to major sporting competitions.

The digital rights review, launched today, will examine whether the government’s rules on unencrypted ‘listed events’ need to be reformed so that public service broadcasters (PSBs) – including the BBC, ITV, Channel 4 and Channel 5 – be guaranteed the opportunity to show certain major events such as the Olympics and the World Cup on their digital platforms rather than focusing solely on traditional television broadcasting as is the case today.

The listed events regime helps to ensure that UK audiences are able to tune in to the biggest sporting moments at no extra cost by giving PSBs the ability to bid for broadcast rights. This means over 40 million people watched Euro 2020 on the BBC and 36 million people watched the Tokyo Olympics last year.

As more people connect through catch-up and streaming services to watch sport, the review will assess whether the inclusion of digital rights can ensure that as many people as possible can continue to access events. such as Wimbledon, the Paralympic Games and the Grand National.

Currently, if, for example, the Olympic 100m final was broadcast live in the middle of the night on the BBC, but all broadcast and catch-up rights were sold to another broadcaster and kept behind a paywall, a large audience might not be able to attend this important event.

Digital Infrastructure Minister Julia Lopez said:

As we have seen during the Women’s Euro and in the run up to the FIFA World Cup, we know that enjoying successful sporting events together means a lot to a lot of people. Everyone should be able to watch these incredible moments of national unity, however they choose to tune in.

As online viewing habits change, it’s only right that we revise our rules and consider whether any updates are needed to ensure our brilliant public service broadcasters can continue to bring major events to the public at no additional cost. .

The Terms of Reference, which set out precisely what the exam will cover, were released today and mark the public launch of the exam.

The government believes that certain sporting events of national interest should be broadcast on free-to-air television so that they can be enjoyed by as wide an audience as possible.

However, it is also important to recognize that the current framework was decided in a different media landscape almost twenty years ago, when only 4% of UK households had internet access.

As such, the review will take into consideration a wider online distribution of sports rights, including video-sharing platforms and social media, which has grown exponentially since the establishment of the current legal framework in 1996. .

In doing so, the review will balance the public’s desire to watch domestic sporting events at no additional cost with the ability for sports organizations to generate revenue from sports rights to reinvest in their sports at all levels.

ENDS

Notes to Editors

  • This issue has been addressed by a number of key players in industry and parliament, including in Ofcom’s report on the future of public service media and in a report by the DCMS committee on major events cultural and sporting.
  • The current list of listed events can be found here. The inclusion of an event on the list does not guarantee the broadcasting of this event on free television, nor the broadcasting of this event in its entirety. No rights holder can be forced to sell their rights, and no broadcaster can be forced to acquire rights.
  • The government has announced its intention to consider whether digital rights should be included within the scope of the listed events regime in its broadcasting white paper, as well as its intention to make qualification for the benefits of the regime specific to public service broadcasters.
  • The government does not currently plan to undertake a full review of the events on the list itself. He believes that the current list strikes an appropriate balance between keeping sporting events free to the public while allowing rights holders to negotiate deals in the best interest of their sport.
  • The government is fully committed to the listed events regime and if there are any changes they will only relate to reflecting where the public chooses to watch the sport.
  • DCMS has already engaged in dialogue with stakeholders from a range of groups who may be interested in the review. The publication of the terms of reference today offers any other interested stakeholder the opportunity to contribute to the review.
  • Stakeholders wishing to contribute to the review are asked to get in touch by emailing Listedevents-digitalrightsreview@dcms.gov.uk. DCMS will provide a list of questions to support submissions. Those wishing to contribute should ensure that their final response is received by 12/15/2022 so that their thoughts can inform the review.
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Ministry of Tourism seeks ‘booster injection’ of 8.7 billion baht https://www.executivetravel.biz/ministry-of-tourism-seeks-booster-injection-of-8-7-billion-baht/ Mon, 14 Nov 2022 22:40:00 +0000 https://www.executivetravel.biz/ministry-of-tourism-seeks-booster-injection-of-8-7-billion-baht/

The TAT has organized a London double-decker bus wrapped in ‘Always Warm’ decoration to offer hop-on hop-off services on November 5-6 and November 9-12 from the London Eye, with stops at the capital’s top attractions.

LONDON: The Department of Tourism and Sports plans to ask the cabinet this month for an 8.7 billion baht budget to support the tourism industry, saying a “reminder” is needed for Thailand attracts 18 to 20 million tourists next year.

Of the total budget, 7.2 billion baht would be allocated to the fifth phase of the “Rao Tiew Duay Kan” (We travel together) campaign to promote domestic tourism, Tourism and Sports Minister Phiphat Ratchakitprakarn said on the sidelines. the holding of the World Travel Market. in London.

Another 1.5 billion baht is earmarked for the Tourism Authority of Thailand (TAT) marketing budget, including 1 billion for overseas business and 500 million for the domestic market.

The TAT was tasked with wrapping up the details of the so-called “New Year’s gift” within two weeks for the proposal to be presented to cabinet on November 28, he said.

“The TAT aims to attract at least 18 million visitors next year, but the government’s target is at least 20 million. This is a conservative projection compared to the Bank of Thailand’s estimate of 25 to 28 million tourists,” Phiphat said.

“However, reaching 20 million visitors or 80% of the tourism revenue we recorded in 2019 is not an easy task next year in a gloomy economic context. We must ask for more budget because a booster injection is necessary. to boost tourism, especially domestic travel.”

The ministry also plans to seek cabinet approval to remove visa requirements for all European visitors and extend the stay of tourists from visa-free countries/territories. Currently, visitors from some European countries require a visa to come to Thailand.

From October 1 this year to March 31, 2023, the period of stay is extended to 45 days from 30 days for tourists from visa-free countries/territories, and 30 days from 15 days for those eligible for a visa on Arrivals.

Now fully reopened to foreign visitors, Thailand no longer requires tourists to present proof of vaccination or ATK test results.

TAT Governor Yuthasak Supasorn said there are concerns about the tourism industry this year and next, including limited airline capacity and the energy crisis in Europe caused by the Russian-Ukrainian war.

Meanwhile, China has maintained strict requirements for its nationals to travel abroad, although some positive signs have emerged recently, Yuthasak said.

Starting with a reduction in the quarantine period, Beijing is allowing more groups of Chinese to travel abroad, including students and people attending company meetings, he said.

The ministry and the TAT hope the mainland will further ease the rules for visitors after Prime Minister Prayut Chan-o-cha spoke with his Chinese counterpart Xi Jinping at the Asia-Pacific Economic Cooperation Summit in Bangkok this week.

In 2019, 11 million Chinese tourists visited Thailand.

“Chinese tourists accounted for 27% of total foreign visitors to Thailand in 2019. With this market gone, it is difficult for the industry to return to previous levels,” Phiphat said.

“We are trying very hard and hope China will reopen for tourism. After discussion with TAT, around 4 million Chinese visitors are expected to visit Thailand next year.”

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Business travel resumes after two years of lull https://www.executivetravel.biz/business-travel-resumes-after-two-years-of-lull/ Sun, 13 Nov 2022 18:31:00 +0000 https://www.executivetravel.biz/business-travel-resumes-after-two-years-of-lull/ With the recovery of businesses after two difficult years of the pandemic, business travel has grown. Executives from companies such as Tata Steel, KPMG, upGrad, Pepsi, Mondelez, Tech Mahindra, Maruti Suzuki and Quess have reported a surge where executives have started traveling to meet other team members and customers in India and abroad. For most companies, business travel has exceeded 2019 or pre-Covid 19 levels, which include domestic and international flights, these executives told ET.

Executives from major travel agencies Thomas Cook and SOTC Travel and Yatra also agree on the trend.

For Thomas Cook and SOTC, this is a massive jump of around 120% in the last quarter of this year compared to the corresponding quarter in 2019 and a 280% year-on-year increase in business travel.

“With the sustained easing of global restrictions/barriers, our business travel growth is currently driven by our international segment – which contributes nearly 70% of our revenue,” said Indiver Rastogi, Group Head. , Global Business Travel, Thomas Cook (India) & SOTC Travel says ET. “In addition to our airline segments, we are seeing strong growth in our ancillary services (hotels, car reservations, etc.), he said.

While for its rival Yatra, which shared indicative figures with ET, business travel is gradually increasing from ₹70 crore in business in October 2021 to the same level as in October 2019 (about ₹190 crore).

“October figures for 2022 are like 2019/pre-pandemic based on indicative figures. Although this year was Diwali in October which generally sees a slight drop in business travel as people return them for celebrations or prefer to stay home with their family,” said Sabina Chopra, chief operating officer, corporate travel and industry relations manager, Yatra.

Even for companies, business travel has increased considerably. KPMG in India is seeing a more than 100% increase in domestic and international work travel compared to the same period last year, according to its chief operating officer, Arjun Vaidyanathan. “Compared to 2019, business travel has increased by almost 25-30%,” he said.

With the start of the hybrid working ecosystem, Mondelez India’s global leadership team has resumed visits to countries like India, Brazil, France and Greece. “The goal has been to connect with colleagues and use this as an opportunity to celebrate company accomplishments, growing snacks leadership, marketing wins, sustainability efforts and more” said Shilpa Vaid, Human Resources Manager at Mondelez India.

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ASA, World Employment Confederation LatAm, Jobandtalent, Optomi, KellyOCG, GetMed, AlliedUP, Job.com, Raines, Workforce Connections, Revature https://www.executivetravel.biz/asa-world-employment-confederation-latam-jobandtalent-optomi-kellyocg-getmed-alliedup-job-com-raines-workforce-connections-revature/ Fri, 11 Nov 2022 19:13:56 +0000 https://www.executivetravel.biz/asa-world-employment-confederation-latam-jobandtalent-optomi-kellyocg-getmed-alliedup-job-com-raines-workforce-connections-revature/

November 11, 2022

The American Staffing Association announced its 2023 elected officials:

  • Chair: Threase BakerAbbtech Professional Resources Inc.
  • First Vice President: Joanie BilyEmployBridge Holding Co.
  • Second Vice President: Jeff BowlingCurative
  • Treasurer: Tom GuibelLaSalle Network
  • Secretary: Janette MarxFast
  • Immediate Past President: Benjamin “Ben” ElliotRandstad

In addition, the ASA Board of Directors elected eight directors:

  • Joanie BilyEmployBridge Holding Co.
  • Jeff BowlingCurative
  • Jeff HarrisUnlimited number
  • Kristen HarrisCreative Portfolio
  • Jason LevantAtWork Group
  • Kelly McCreightHamilton Ryker
  • Pierre QuigleyKelly
  • Joyce RussellAdecco Group American Foundation

The World Employment Confederation LatAm recently agreed to a new institutional structure, new statutes and new governance as part of its efforts to represent the recruitment industry in Latin America, according to an article published on the WEC website. WEC LatAm also recently announced its new Board of Directors:

  • President: Jose Augusto FigueiredoLHH/The Adecco Group
  • Vice-president (representing members of national federations): Fernando CalvetFenaserhtt
  • Vice-President (representing corporate members): Damien WachowiczBayton Group
  • Treasurer: Michael GarciaAcoset
  • Secretary: Alfred BudschitzAge

Jobandtalent, an online recruitment platform, has appointed Gonzalo Berge as Director of Human Resources and Culture. Bergé began his career as a strategic consultant before specializing in people functions in high-growth companies such as Despegar, an online travel agency in Latin America, where he played a key role in leading the company. company through an IPO, Jobandtalent reported. Most recently, Bergé held the position of Director of Human Resources at PedidosYa, a subsidiary of Delivery Hero.

Optomi Professional Services Named Mike Keogh as president of its US-based solutions brand, Provalus. Keogh was most recently president of the Americas division of a global IT company. Laura Knightformer President of Provalus, will expand its reach to the entire Optomi Professional Services family of brands.

KellyOCG named Adelle Harington as Vice President, EMEA, for managed services provider KellyOCG and adjacent workforce solutions, including SOW, direct sourcing and consulting. Harrington will report to the President of KellyOCG Tammy Browning. She has over 19 years of experience. Harrington most recently served as Global Practice Leader for KellyOCG Consulting. She joined Kelly in 2003.

GetMed Staffing named Sara Spanjer as Chief Operating Officer. Spanjer has 15 years of healthcare staffing experience and clinical training as a registered nurse. In 2021, she was named to the SIA’s 40 under 40 list.

AlliedUP, a worker-owned cooperative providing healthcare personnel based in Ontario, California, named Milissa Ales-Barnicoat as CEO. Ales-Barnicoat previously served as Senior Vice President of Enterprise Solutions and Sales at Onward Search, Senior Vice President at Clarity Consultants, and Vice President of Sales and Customer Engagement at CDI Corp. Her previous roles also include Senior Vice President of International Sales and Account Management at The Adecco Group. .

Job.com named Jim Bradley as chief operating officer and Margaux Gilman as Senior Vice President of People and Culture. Bradley was previously administrative director at Kelly Services. Gillman previously served as Director of Human Resources at Gathered Foods.

Announcement of Executive Search Firm Raines International Duncan Finlayson joined its London office as Managing Director. Prior to joining Raines, Finlayson spent five years in the London office of True Search, where he helped build and scale the practice in EMEA.

Rachelle Bauer and Lori Eaton are the founders of Workforce Connections, a new staffing firm based in St. Louis. Together they have over 40 years of experience.

Revature, which operates on the recruit-train-deploy model, announced Tom Baronresponsible for Revature Europe, leading its expansion into the UK.

]]> LIVE FROM COP27 | World Bank Group https://www.executivetravel.biz/live-from-cop27-world-bank-group/ Fri, 11 Nov 2022 10:26:09 +0000 https://www.executivetravel.biz/live-from-cop27-world-bank-group/

The World Bank Group at COP27

Live from Sharm el-Sheikh

November 6-18, 2022

GO TO: LIVE EVENTS SCHEDULE | CLIMATE RESOURCES | FEATURED SPEAKERS

Leaders, experts and activists gather in Sharm el-Sheikh, Egypt for COP 27 amid growing urgency to tackle the climate crisis. The World Bank Group is hosting a number of live events, featuring high profile guests, throughout the conference.

Revisit our week one panels which included the Presidents of Mozambique and Tanzania on scaling up climate finance, a discussion on the importance of a “Methane Sprint” to rapidly reduce emissions, and an in-depth conversation on the importance of investing in people to advance climate goals. We also heard about the need to address climate and development issues together from representatives of South Africa, Morocco and Malawi, and Uganda on the urgency of an energy transition.

Tune in for other great discussions on moving away from coal, the role of women and girls in effective climate action, the importance of climate-smart agriculture and much more.

See below for a list of upcoming events and replays, and set reminders to join us live.

Follow the conversation on social media #ClimateActionWBG

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Chamber appoints Cathy Huskins to lead tourism efforts https://www.executivetravel.biz/chamber-appoints-cathy-huskins-to-lead-tourism-efforts/ Thu, 10 Nov 2022 21:42:43 +0000 https://www.executivetravel.biz/chamber-appoints-cathy-huskins-to-lead-tourism-efforts/
Erwin Record Photo by Bryan Stevens • Cathy Huskins will serve as Director of Tourism for the Unicoi County Chamber of Commerce.

From staff reports

The Unicoi County Chamber of Commerce Board of Directors has appointed Cathy Huskins as its Director of Tourism to lead the chamber’s tourism efforts. She will oversee and assist in the development, implementation and successful execution of the Chamber’s work plan and programs designed to maximize tourism in Unicoi County.

Huskins brings over 22 years of experience to the role, having worked for the Chamber in various capacities since 2000.

“Cathy will bring so much skill and drive to this position. She is a natural leader with a remarkable work ethic, said Amanda Delp, Chief Executive of the Chamber. “We couldn’t ask for a more qualified person to lead our tourism efforts.”

Unicoi County, known for its popular outdoor recreation and scenic natural beauty, continually pops up on the radar of outdoor enthusiasts and visitors looking for a unique adventure. In 2021, the Tennessee State Department of Tourism Development reported that tourism spending in Unicoi County increased by more than 34%.

“Over the past several years, we have seen city and county officials continue to place much greater emphasis on tourism in Unicoi County, recognizing that tourism means money to our community,” Delp added. “With the addition of many new tourism-related businesses like Blue Ridge Paddling, The Peddler’s Rest and Glamping Retro, to name a few, we are seeing a surge in tourism growth in the county. ‘Unicoi.’

The position of Director of Tourism is not an entirely new position for the Chamber. In 2002, the position was created and remained staffed by the House until 2017, when the House suffered significant budget cuts from the City of Erwin and Unicoi County that resulted in the loss of a staff member and forced the House to redefine the job. the titles and descriptions of the other two full-time employees.

“Over the past five years, we have continued to focus our attention on the tourism field, completing as many projects as possible with the limited funds dedicated to promoting tourism,” said Cathy Huskins. “After the height of the Covid pandemic, we have continued to see increased tourism demands and increasing responsibilities.”

The board’s decision to reinstate the position of director of tourism came after months of research and discussion. Noting the significant increase in tourism-related involvement that the Chamber was experiencing, the Board recognized the need to have a dedicated staff member to oversee the tourism portion of the Chamber’s work plan.

“In the past six months alone, the Chamber of Commerce has launched many tourism projects. From applying for and receiving two tourism grants from the Tennessee Department of Tourism Development, to providing business support to our tourism businesses, as well as hosting a travel writer, the Chamber has continued its commitment to promoting Unicoi County as an outdoor adventure tourism destination. and leisure. »

In addition to reinstating the position of Director of Tourism, the Board also voted to add a part-time employee to the Chamber to help increase the number of social media platforms for the Chamber, as well as the social media content creation for the Chamber and tour Unicoi County. The job description for this position is still being developed and House officials plan to fill this position after January 1st.

Tourism growth is not just a trend seen in Unicoi County. The Tennessee Department of Tourism Development reports that as Tennessee’s second-largest industry, tourism generated a record $24 billion in domestic travel spending in 2021, marking the largest visitor spending nationwide in Tennessee history. Tourism helps spur economic development and job growth, which has helped restore and expand the livelihoods of Tennesseans.

“As travel and tourism become an even more important component of Unicoi County’s economy, I am thrilled to take on this role. Unicoi County has been blessed with an abundance of natural beauty and has so to give,” Huskins said. “I want everyone to experience what I do every day.”

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United opens take-out “Club Fly” lounge at Denver airport https://www.executivetravel.biz/united-opens-take-out-club-fly-lounge-at-denver-airport/ Thu, 10 Nov 2022 10:33:06 +0000 https://www.executivetravel.biz/united-opens-take-out-club-fly-lounge-at-denver-airport/

United Airlines launched its new “Club Fly” lounge concept in the newly opened Concourse B at Denver Airport.

Described as a “take-out” lounge, the facility is accessed through automated entry gates, with eligible travelers scanning their boarding pass.

Inside, patrons can help themselves to Illy coffee and soft drinks from a self-service bar, as well as “premium food options curated with a take-out flyer, such as sandwiches, salads and wraps, yogurts, vegetables, fruits and more”.

United said the concept “provides a convenient option for busy travelers who want a high-quality coffee, drink or snack en route to their flight”, and tracked a survey of Mileage Plus members which showed that more half of visitors to airline clubs and lounges “like take-out food or drink”.

The lounge occupies a smaller footprint than a traditional United Club and is inspired by a ski lodge, with artwork and furnishings sourced from local artists and businesses.

It is open to United Club members, as well as those traveling internationally in premium cabins.

The Club Fly facility follows the recent opening of new United lounges in Phoenix Sky Harbor International and Newark Airports – the latter now the largest club lounge in the carrier’s network.

United Opens Network’s Largest Club Lounge at Newark Airport

Commenting on the news, Luc Bondar, Vice President of Marketing and Loyalty for United and President of Mileage Plus, said:

“United Club Fly is synonymous with high convenience. We know there are times when our members are in a rush and use our clubs for a quick drink or snack, so we’ve created this new format to make it easier for them without sacrificing a premium club environment.

“In Denver, more than two-thirds of our customers connect to other locations, making it the ideal city to introduce this concept.”

united.com

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LEATT CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS. (Form 10-Q) https://www.executivetravel.biz/leatt-corp-managements-discussion-and-analysis-of-financial-position-and-results-of-operations-form-10-q/ Wed, 09 Nov 2022 13:18:05 +0000 https://www.executivetravel.biz/leatt-corp-managements-discussion-and-analysis-of-financial-position-and-results-of-operations-form-10-q/

Special note regarding forward-looking statements


This report contains forward-looking statements that are contained principally
in the sections entitled "Our Business," "Risk Factors," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." These
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. These risks and uncertainties
include, but are not limited to, the factors described in the section captioned
"Risk Factors" in our latest annual report on Form 10-K filed with the SEC. In
some cases, you can identify forward-looking statements by terms such as
"anticipates," "believes," "could," "estimates," "expects," "intends," "may,"
"plans," "potential," "predicts," "projects," "should," "would" and similar
expressions intended to identify forward-looking statements. Forward-looking
statements reflect our current views with respect to future events and are based
on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements. These forward-looking statements include, among other things,
statements relating to:

• our expectations in terms of motorsport market growth;

• our expectations regarding the growing demand for protective equipment used in the motorsport market;

• our belief that we will be able to compete effectively with our competitors and increase our market share;

• our expectations regarding increased revenue growth and our ability to achieve profitability resulting from increased production volumes; and

• our future business development, results of operations and financial condition.


Also, forward-looking statements represent our estimates and assumptions only as
of the date of this quarterly report. You should read this quarterly report and
the documents that we reference and filed as exhibits to the quarterly report
completely and with the understanding that our actual future results may be
materially different from what we expect. Except as required by law, we assume
no obligation to update any forward-looking statements publicly, or to update
the reasons actual results could differ materially from those anticipated in any
forward-looking statements, even if new information becomes available in the
future.

Use of Certain Defined Terms

Unless the context otherwise indicates, references in this report to:


• "Leatt," "we," "us," "our," the "Registrant" or the "Company" are to the
combined business of Leatt Corporation, a Nevada corporation, its South African
branch, Leatt SA, and its direct, wholly-owned subsidiaries, Two Eleven and
Leatt Prop;

• “Leatt Prop” refers to Leatt Prop (Pty) Ltda South African company
incorporated under the laws of South Africa with registration number: 2022/523867/07;

• “Leatt SA“are at the branch of the Society known as ‘Leatt Corporation (incorporated in the state of nevada)’ incorporated under the laws of South Africa with registration number: 2007/032780/10;

• “United States” are at Leatt USA, LLCa Nevada LLC;

• “PRC” and “China” must the People’s Republic of China;

• “Two Eleven” refers to Two Eleven Distribution, LLCa Nevada LLC;

• “Securities Act” means the Securities Act of 1933, as amended, and “Exchange Act” means the Securities Exchange Act of 1934, as amended;

• “South Africa” ​​are at Republic of South Africa;

• “WE dollar”, “$” and “US$” correspond to the legal currency of United States;

• “Xceed Holdings” means Xceed Holdings CC., a private company incorporated under the laws of South Africaand 100% owned by The Leatt Family Trustincluding Dr. Christopher J. Leatt, President of the Company, is trustee and beneficiary; and


• "ZAR" refers to the South African Rand, the legal currency of South Africa.
For all ZAR amounts reported, the dollar amount has been calculated on the basis
that $1 = ZAR17.9694 for its September 30, 2022 balance sheet.

                                       13

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Overview of our company


We were incorporated in the State of Nevada on March 11, 2005, under the name
Treadzone, Inc. We were a shell company with little or no operations until March
1, 2006, when we acquired the exclusive global manufacturing, distribution, sale
and use rights to the Leatt-Brace®, pursuant to a license agreement between the
Company and Xceed Holdings, a company controlled by the Company's Chairman and
founder, Dr. Christopher Leatt. On May 25, 2005, we changed our name to Leatt
Corporation in connection with our anticipated acquisition of the Leatt-Brace®
rights. Leatt designs, develops, markets and distributes personal protective
equipment for participants in all forms of motor sports and leisure activities,
including riders of motorcycles, bicycles, snowmobiles and ATVs. The Company
sells its products to customers worldwide through a global network of
distributors and retailers. Leatt also acts as the original equipment
manufacturer for neck braces sold by other international brands.

The Company's flagship products are based on the Leatt-Brace® system, a patented
injection molded neck protection system owned by Xceed Holdings, designed to
prevent potentially devastating injuries to the cervical spine and neck. The
Company has the exclusive global manufacturing, distribution, sale and use
rights to the Leatt-Brace®, pursuant to a license agreement between the Company
and Xceed Holdings, a company owned and controlled by the Company's Chairman and
founder, Dr. Christopher Leatt. The Company also has the right to use apparatus
embodying, employing and containing the Leatt-Brace® technology and has
designed, developed, marketed and distributed other personal protective
equipment using this technology, as well as its own developed technology,
including the Company's new body protection products which it markets under the
Leatt Protection Range brand.

The Company's research and development efforts are conducted at its research
facilities, located at its executive headquarters in Cape Town, South Africa.
The Company employs 3 full-time employees who are dedicated exclusively to
research, development, and testing. The Company also utilizes consultants,
academic institutions and engineering companies as independent contractors or
consultants, from time to time, to assist it with its research and development
efforts. Leatt products have been tested and reviewed internally and by external
bodies. All Leatt products are compliant with applicable European Union
directives, or CE certified, where appropriate. Depending on the market we have
other certifications outside of CE. For the US market our motorcycle helmets
comply with the DOT (FMVSS 218) helmet safety standard and our bicycle helmet
complies with EN1078, as well as CPSC 1203. Our downhill specific bicycle
helmets also comply with ASTM F1952. For our Australian Market our bicycle
helmet complies with AS/NZS 2063. For the UK market our motorcycle helmets
comply with ACU Gold and our Moto 3.5 helmet with JIS T 8133 for the Japanese
Market. For the Brazilian market our Moto 7.5 and Moto 3.5 helmets comply with
NBR 7471.

Our products are predominately manufactured in China in accordance with our
manufacturing specifications, pursuant to outsourced manufacturing arrangements
with third-party manufacturers located there, based on agreed terms. We are also
building manufacturing capacity outside China, namely, in Thailand and
Bangladesh. The Company utilizes outside consultants and its own employees to
ensure the quality of its products through regular on-site product inspections.
Products sold to our international customers are usually shipped directly from
our consolidation warehouse or manufacturers' warehouses to customers or their
import agents.

Leatt earns revenues through the sale of its products through approximately 55
distributors worldwide, who in turn sell its products to retailers. Leatt
distributors are required to follow certain standard business terms and
guidelines for the sale and distribution of Leatt products. Two Eleven and Leatt
SA directly distribute Leatt products to dealers in the United States and South
Africa, respectively.

Main factors affecting our financial performance

We believe the following factors will continue to affect our financial performance:


• Global Economic Fragility - The ongoing turmoil in the global economy,
especially in the U.S., Asia and Europe, may have an impact on our business and
our financial condition, and we may face challenges if economic conditions do
not improve. These economic conditions may impact levels of consumer spending in
the foreseeable future. If demand for our products fluctuates as a result of
these economic conditions or otherwise, our revenue and gross margin could be
harmed.

• Trade Restrictions - We engage in international manufacturing and sales which
exposes us to trade restrictions and disruptions that could harm our business
and competitive position. Most of our products are manufactured in China, and
the U.S. administration has announced tariffs on certain products imported into
the United States with China as the country of origin. While these tariffs have
not had a significant impact on the shipment of our products to international
markets as at September 30, 2022, we believe that the future imposition of, or
significant increases in, the level of tariffs, custom duties, export quotas and
other barriers and restrictions by the U.S. on China or other countries could
disrupt our supply chain, increase the cost of our raw materials and therefore
our pricing, and impose the burdens of compliance with foreign trade laws, any
of which could potentially affect our bottom line and sales. While we are in
continuous discussions with our manufacturers to ensure there are contingencies
in place, we cannot assure you that we will not be adversely affected by changes
in the trade laws of foreign jurisdictions where we sell and seek to sell our
products.

                                       14
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• Fuel Prices - Significant fluctuations in fuel prices could have both a
positive and negative effect on our business and operations. A significant
portion of our revenue is derived from international sales and significant
fluctuations in world fuel prices could significantly increase the price of
shipping or transporting our products which we may not be able to pass on to our
customers. On the other hand, fluctuations in fuel prices lead to higher
commuter costs which may encourage the increased use of motorcycles and bicycles
as alternative modes of transportation and lead to an increase in the market for
our protection products.

• Product Liability Litigation - We face an inherent business risk of exposure
to product liability claims arising from the claimed failure of our products to
help prevent the types of personal injury or death against which they are
designed to help protect. Therefore, we have acquired very costly product
liability insurance worldwide. We have not experienced any material uninsured
losses due to product liability claims, but it is possible that we could
experience material losses in the future. After a two-week trial in the United
States District Court for the Northern District of Ohio (Eastern) ending on
April 17, 2014, a federal jury returned a defense verdict for the Company in the
first Leatt-Brace® product liability lawsuit to be tried in the United States.
The plaintiffs in that case had alleged that defective product design and
failure to warn had caused a motocross rider to suffer multiple mid-thoracic
spine fractures, causing immediate and permanent paraplegia, when he crashed at
a relatively low speed on February 13, 2011. When the accident occurred, he was
wearing a helmet and other safety gear from several different companies,
including the Company's acclaimed Leatt-Brace®. The Company produced evidence at
trial showing that his thoracic paraplegia was an unavoidable consequence of his
fall, not the result of wearing a Leatt-Brace®, and that the neck brace likely
saved his life (or saved him from quadriplegia) by preventing cervical spine
injury. The Company had maintained from the onset that this and a small handful
of other lawsuits are without merit and that it would vigorously defend itself
in each case. In this case, the plaintiffs subsequently appealed the court's
decision, and the parties reached an amicable settlement. Although we carry
product liability insurance, a successful claim brought against us could
significantly harm our business and financial condition and have an adverse
impact on our ability to renew our product liability insurance or secure new
coverage.

• Protection of Intellectual Property - We believe that the continued success of
our business is dependent on our intellectual property portfolio consisting of
globally registered trademarks, design patents and utility patents related to
the Leatt-Brace®. We believe that a loss of these rights would harm or cause a
material disruption to our business and, our corporate strategy is to
aggressively take legal action against any violators of our intellectual
property rights, regardless of where they may be. From time to time, we have had
to enforce our intellectual property rights through litigation, and we may be
required to do so in the future. Such litigation may result in substantial costs
and could divert resources and management attention from the operations of our
business.

• Fluctuations in Foreign Currencies - We are exposed to foreign exchange risk
as our revenues and consolidated results of operations may be affected by
fluctuations in foreign currency as we translate these currencies into U.S.
dollars when we consolidate our financial results. While our reporting currency
is the U.S. Dollar, a portion of our consolidated revenues are denominated in
South African Rand, or ZAR, certain of our assets are denominated in ZAR, and
our research and marketing operations in South Africa utilize South African
labor sources. A decrease in the value of the U.S. dollar in relation to the ZAR
could increase our cost of doing business in South Africa. If the ZAR
depreciates against the U.S. Dollar, the value of our ZAR revenues, earnings and
assets as expressed in our U.S. Dollar financial statements will decline. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk. Furthermore, since 78% of our sales are
derived outside the U.S., where the U.S. dollar is not the primary currency,
significant fluctuations in exchange rates such as the strengthening of the
dollar versus our customers' local currency can adversely affect our ability to
remain competitive in those areas.

• Natural or Man-made Catastrophic Events - We are exposed to natural or
man-made catastrophic events that may disrupt our business and may reduce
consumer demand for our products. A disruption or failure of our systems or
operations in the event of a natural disaster, health pandemic, such as the
outbreak and global spread of COVID-19 or the coronavirus, or a man-made
catastrophic event could cause delays in completing sales, continuing production
or performing other critical functions of our business, particularly if a
catastrophic event occurred at our primary manufacturing locations or our
distributor locations worldwide. Any of these events could severely affect our
ability to conduct normal business operations and, as a result, our operating
results could be adversely affected. There may also be secondary impacts that
are unforeseeable, such as impacts on our consumers and on consumer purchasing
behavior, which could cause delays in new orders, delays in completing sales or
even order cancellations. As the COVID-19 pandemic continues to evolve, we
believe the extent of the impact to our operations will be primarily driven by
the severity and duration of the pandemic, the pandemic's impact on the U.S. and
global economies and the timing, scope and effectiveness of federal, state and
local governmental responses to the pandemic. Due to strong consumer demand for
outdoor product categories since the initial stages of the pandemic, we did not
see any significant material negative impact of COVID-19 on the Company's
results of operations for the nine months ended September 30, 2022. We remain
cautiously optimistic that ongoing efforts to increase the availability of new
COVID-19 vaccines worldwide will mitigate the spread of the virus throughout
Europe and the U.S. (our largest markets) and bring about an end to global
quarantines. The continued mutation and spread of the virus, economic headwinds
caused by global quarantines, or the occurrence of any other catastrophic
events, could have a negative impact on our sales revenue for the coming periods
and beyond.

                                       15
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• Conflict in Ukraine - We are exposed to conflicts that may disrupt our
business and may reduce consumer demand for our products. A disruption or
failure of our systems, government sanctions or operations in the event of a
conflict could directly affect consumer demand for our products, cause delays in
completing sales, shipping of our products, continuing production or performing
other critical functions of our business, particularly if a conflict occurs at
our primary manufacturing locations or our distributor locations worldwide.
Furthermore, a prolonged conflict may have unintended global consequences such
as increased inflation, fuel and transportation costs. While we have conducted
due diligence on our customers in Russia to ensure that they do not fall into
any sanctioned categories, we have seen a delay in the receipt of receivables in
our bank account from the distributors of our products in Russia caused by
enhanced screening of Russian funds in compliance with global sanctions against
Russia for the war in Ukraine. The prolonging or expansion of the conflict could
have an adverse impact on our consumers and on consumer purchasing behavior, and
result in delays of new orders and completing sales, order cancellations, or
payment and shipping delays.  We will continue to monitor this fluid situation
and any adverse impact that it may have on the global economy in general and on
our business operations and especially that of our customers in particular, and
we will develop contingencies as necessary to address any disruptions to our
business operations as they arise.

• Rising Freight Shipping and Logistics Costs - The economic disruption
resulting from the COVID-19 pandemic has had an adverse impact on the global
freight shipping industry and on the cost of shipping our products to our global
network of distributors, dealers and customers, or their import agents, from
warehouses in China. Over the past year, the strong rise in demand for Chinese
exports has outpaced the availability of containers in Asia, creating a
container shortage and huge backlogs in many freight markets around the world,
including the U.S., the Middle East, and East Asia. These container shortages at
Asian ports have exacerbated supply bottlenecks and further increased shipping
costs, by up to 400% in some regions, as companies in Asia are reported to be
paying premium rates to get containers back. Further compounding matters is the
shortage of dockworkers and truck drivers available to load and unload
containers at ports in Europe and the U.S. and to move them to other locations,
resulting in congested ports. We are working closely with our supply chain
management in Asia, our logistics service providers, and our freight forwarders,
to streamline our global shipping and logistics processes, to mitigate any
disruption to our operations. Continued disruption and pricing volatility in the
global shipping and logistics industry could have a negative impact on our
results of operations for the coming periods and beyond.

Operating results


The following summary of our results of operations should be read in conjunction
with our financial statements and the notes thereto for the three and nine-month
periods ended September 30, 2022 and 2021 included herein.

Comparison of the three months ended September 30, 2022 and three months ended
September 30, 2021

The following table summarizes the results of our operations during the three-month periods ended September 30, 2022 and 2021 and provides information regarding the increase or (decrease) of the dollar and the percentage during these periods:

                                       16

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                                   Three Months Ended September 30,                           Percentage
                                   2022                   2021                 Increase       Increase
Item                                                                           (Decrease)     (Decrease)

REVENUES                         $       23,258,752    $        22,100,827   $  1,157,925             5%
COST OF REVENUES                         13,122,213             12,571,692   $    550,521             4%
GROSS PROFIT                             10,136,539              9,529,135   $    607,404             6%
PRODUCT ROYALTY INCOME                       74,411                 58,246   $     16,165            28%
OPERATING EXPENSES
Salaries and Wages                        1,274,554                975,676   $    298,878            31%
Commissions and Consulting                  143,691                144,837   $     (1,146 )          -1%
Professional Fees                           166,537                510,713   $   (344,176 )         -67%
Advertising and Marketing                 1,166,804                633,915   $    532,889            84%
Office Lease and Expenses                   145,499                 99,314   $     46,185            47%
Research and Development Costs              501,604                468,922   $     32,682             7%
Bad Debt Expense                             97,325                 42,197   $     55,128           131%
General and Administrative                  977,796                691,696   $    286,100            41%
Depreciation                                264,923                265,777   $       (854 )           0%
Total Operating Expenses                  4,738,733              3,833,047   $    905,686            24%
INCOME FROM OPERATIONS                    5,472,217              5,754,334   $   (282,117 )          -5%
Other Income                                  7,784                  1,413   $      6,371           451%
INCOME BEOFRE INCOME TAXES                5,480,001              5,755,747   $   (275,746 )          -5%
Income Taxes                              1,391,878              1,467,936   $    (76,058 )          -5%
NET INCOME                       $        4,088,123    $         4,287,811   $   (199,688 )          -5%


Revenues - We earn revenues from the sale of our protective gear comprising of
neck braces, body armor, helmets and other products, parts and accessories both
in the United States and abroad. Revenues for the quarter ended September 30,
2022 were $23.26 million, a 5% increase, compared to $22.10 million for the
quarter ended September 30, 2021. This increase in worldwide revenues is
primarily attributable to a $2.04 million increase in helmet sales, a $1.8
million increase in other products, parts and accessories, that were partially
offset by a $1.85 million decrease in body armor and a $0.81 million decrease in
neck brace sales. Revenues generated from sales to our customers in the United
States increased from $4.31 million, to $5.42 million, for the three months
ended September 30, 2022 and 2021, respectively.  Revenues associated with
international customers were $17.84 million and $17.79 million, or 77% and 81%
of revenues, respectively, for the three months ended September 30, 2022 and
2021, respectively.

The following table presents our revenues by product line for the quarter ended September 30, 2022 and 2021:

                                           Three months ended September 30,
                                2022        % of Revenues        2021        % of Revenues
Neck braces                $  1,894,839                8%   $  2,708,364               12%
Body armor                   10,519,065               45%     12,365,185               56%
Helmets                       4,359,829               19%      2,320,111               11%
Other products, parts and
accessories                   6,485,019               28%      4,707,167               21%
                           $ 23,258,752              100%   $ 22,100,827              100%

Sales of our flagship neck brace accounted for $1.89 million and $2.71 millioni.e. 8% and 12% of our revenues for the quarters ended September 30, 2022 and 2021, respectively. The 30% decline in neck brace revenue is primarily attributable to a 24% decline in neck brace volume sold to our customers globally, compared to the third quarter of 2021, which was a particularly strong quarter for neck brace sales . Volumes of neck brace in the third quarter of 2021 increased by 181% compared to the prior year period.

                                       17

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Our body armor products are comprised of chest protectors, full upper body
protectors, upper body protection vests, back protectors, knee braces, knee and
elbow guards, off-road motorcycle boots and mountain biking shoes. Body armor
sales accounted for $10.52 million and $12.37 million, or 45% and 56% of our
revenues for the quarters ended September 30, 2022 and 2021, respectively. The
15% decrease in body armor revenues during the 2022 third quarter is primarily
the result of a 30% decrease in upper body armor revenues, when compared to the
third quarter of 2021, which was an exceptionally strong quarter for upper body
armor revenues.  Upper body armor revenues in the third quarter of 2021 had
increased by 114% when compared to the prior year period.

Our helmet sales accounted for $4.36 million or 19% of our revenues for the
quarter ended September 30, 2022, as compared to $2.32 million or 11% of our
revenues for the three months ended September 30, 2021. The 88% increase in
helmet sales during the third quarter is primarily due to exceptional global
demand for our redesigned MOTO helmet line-up for off-road motorcycle use.

Our other products, parts and accessories are comprised of goggles, hydration
bags and apparel items including jerseys, pants, shorts and jackets as well as
aftermarket support items required primarily to replace worn or damaged parts
through our global distribution network. Other products, parts and accessories
sales accounted for $6.49 million and $4.71 million, or 28% and 21% of our
revenues for the quarters ended September 30, 2022 and 2021, respectively.  The
38% increase in revenues from the sale of other products, parts and accessories
during the 2022 third quarter is primarily due to a 51% increase in the sales
volume of our MOTO and MTB technical apparel designed for off-road motorcycle
and mountain biking use, respectively.

Cost of Revenues and Gross Profit - Cost of revenues for the quarters ended
September 30, 2022 and 2021 were $13.12 million and $12.57 million,
respectively. Gross Profit for the quarters ended September 30, 2022 and 2021
were $10.14 million and $9.53 million, respectively, or 44% and 43% of revenues,
respectively. Our neck brace products continue to generate a higher gross profit
margin than our other product categories. Although neck brace revenues accounted
for 8% and 12% of our revenues for the quarters ended September 30, 2022 and
2021, respectively, our gross profit improved during the third quarter of 2022
due to a stabilization in global and domestic shipping and logistics costs, when
compared to the three month period ended September 30, 2022.

Product Royalty Income - Product royalty income is earned on sales to
distributors that have royalty agreements in place, as well as on sales of
licensed products by third parties that have licensing agreements in place.
Product royalty income for the quarters ended September 30, 2022 and 2021 were
$74,411 and $58,246, respectively. The 28% increase in product royalty income is
due to an increase in the sale of licensed products by licensees during the 2022
period.

Salaries and Wages - Salaries and wages for the quarters ended September 30,
2022 and 2021 were $1,274,554 and $975,676, respectively. The 31% increase in
salaries and wages during the 2022 period was primarily due to the employment of
additional sales, marketing and brand management personnel in the United States
and abroad as we continue to expand and build our selling activities globally in
order to facilitate growth.  Additionally, share compensation costs relating to
a share issuance made to key personnel contributed to the increase in salaries
and wages for the 2022 period.

Commissions and Consulting Expense - During the quarters ended September 30,
2022 and 2021, commissions and consulting expenses were $143,691 and $144,837,
respectively. The 1% decrease in commissions and consulting expenses is
primarily the result of a decrease in commissions and incentives paid to
external sales representatives in the United States, that were partially offset
by an increase in commissions and incentives paid to internal, Company employed
sales representatives, in line with an increase in sales growth in the region
and our continued drive to build out a strong domestic employee sales force.

Professional Fees - Professional fees consist of costs incurred for audit, tax
and regulatory filings, as well as patent protection and product liability
litigation expenses incurred as the Company continues to expand. Professional
fees for the quarters ended September 30, 2022 and 2021 were $166,537 and
$510,713, respectively. The 67% decrease in professional fees is primarily due
to a decrease in product liability litigation expenses incurred during the 2022
period.

Advertising and Marketing - The Company places paid advertising in various
motorsport and bicycle magazines and online media and sponsors a number of
events, professional teams and individuals to increase product and brand
visibility globally. Advertising and marketing expenses for the quarters ended
September 30, 2022 and 2021 were $1,166,804 and $633,915, respectively. The 84%
increase in advertising and marketing expenditure during the 2022 period is
primarily due to an increase in global coordinated marketing campaigns
undertaken in conjunction with our distribution partners and a return to
industry tradeshows. During the 2022 period, the Company successfully partnered
with its distribution partners in a cost sharing initiative designed to create
synchronized launch campaigns, and returned to trade shows that were previously
not well attended due to COVID-19 related travel restrictions.

                                       18

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Office Lease and Expenses - Office lease and expenses for the quarters ended
September 30, 2022 and 2021 were $145,499 and $99,314, respectively.  The 47%
increase in office lease and expenses during the 2022 period is primarily due to
additional warehouse storage rented in the United States as the Company
continues to expand its Reno, Nevada warehousing capability to accommodate
storage and distribution of its expanding line up of protective gear.

Research and Development Costs - These costs consist of the salaries of
personnel who are directly involved in the research and development of
innovative products, as well as the direct costs associated with developing
these products. Research and development costs for the quarter ended September
30, 2022, increased to $501,604, from $468,922 during the same 2021 quarter. The
7% increase in research and development costs during the 2022 third quarter is
primarily due to the employment of professional product development, design, and
quality control personnel, in order to continue the refinement of the Company's
product categories and the expansion of our pipeline of innovative cutting-edge
products.

Bad Debt Expense - Bad debt expense for the quarters ended September 30, 2022
and 2021 were $97,325 and $42,197, respectively. The 131% increase in bad debt
expense is primarily the result of an increase in the provision for
unrecoverable debts relating to the Company's international sales.

General and Administrative Expenses - General and administrative expenses
consist of insurance, travel, merchant fees, telephone, office and computer
supplies. General and administrative expenses for the quarters ended September
30, 2022 and 2021 were $977,796 and $691,696, respectively. The 41% increase in
general and administrative expenses is primarily due to an increase in product
and general liability insurance premiums paid during the 2022 period and a
significant increase in staff travel activity related to product development,
industry trade shows and domestic customer sales visits, in line with a
relaxation of COVID-19 related travel restrictions.

Depreciation Expense - Depreciation expense for the quarters ended September 30,
2022 and 2021 were $264,923 and $265,777, respectively. The marginal decrease in
depreciation during the 2022 third quarter is primarily due to a decrease in
depreciation expenses relating to mold and tooling items that had been fully
depreciated, and were partially offset by the addition of warehouse racking and
inventory management equipment utilized at the expanded Company's Reno, Nevada
warehouse and the addition of upgrades to the Company's direct to consumer
website to facilitate an increase in selling activity.

Total Operating Expenses - Total operating expenses increased by $905,686, to
$4.74 million, in the quarter ended September 30, 2022, or 24%, compared to
$3.83 million in the 2021 period. This increase is primarily due to increases in
advertising and marketing, salaries and general and administrative costs, that
were partially offset by the decrease in professional fees mentioned in this
report.

Net Income - The net income after income taxes for the quarter ended September
30, 2022 was $4.09 million, as opposed to a net income of $4.29 million for the
quarter ended September 30, 2021. This 5% decrease in net income is primarily
due to the increase in total operating costs, that were partially offset by the
increase in revenues and gross profit discussed above.

Comparison of the nine months ended September 30, 2022 and nine months ended
September 30, 2021

The following table summarizes the results of our operations for the nine-month periods ended September 30, 2022 and 2021 and provides information regarding the increase or (decrease) of the dollar and the percentage during these periods:

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                       Nine Months Ended September 30,                          Percentage
                       2022                  2021                Increase       Increase
Item                                                             (Decrease)     (Decrease)

REVENUES             $      65,425,170    $       49,297,861   $ 16,127,309            33%
COST OF REVENUES            38,017,469            27,523,233   $ 10,494,236            38%
GROSS PROFIT                27,407,701            21,774,628   $  5,633,073            26%
PRODUCT ROYALTY
INCOME                         200,221               141,535   $     58,686            41%
OPERATING EXPENSES
Salaries and Wages           3,897,693             2,813,024   $  1,084,669            39%
Commissions and
Consulting                     456,911               581,485   $   (124,574 )         -21%
Professional Fees              505,305               971,969   $   (466,664 )         -48%
Advertising and
Marketing                    2,526,808             1,669,648   $    857,160            51%
Office Lease and
Expenses                       546,398               273,887   $    272,511            99%
Research and
Development Costs            1,516,147             1,319,183   $    196,964            15%
Bad Debt Expense               101,680                56,290   $     45,390            81%
General and
Administrative               2,399,899             1,830,055   $    569,844            31%
Depreciation                   829,790               744,713   $     85,077            11%
Total Operating
Expenses                    12,780,631            10,260,254   $  2,520,377            25%
INCOME FROM
OPERATIONS                  14,827,291            11,655,909   $  3,171,382            27%
Other Income                     5,592                 1,354   $      4,238           313%
INCOME BEOFRE INCOME
TAXES                       14,832,883            11,657,263   $  3,175,620            27%
Income Taxes                 3,795,085             2,899,966   $    895,119            31%
NET INCOME           $      11,037,798    $        8,757,297   $  2,280,501            26%


Revenues - We earn revenues from the sale of our protective gear comprising of
neck braces, body armor, helmets and other products, parts and accessories both
in the United States and internationally. Revenues for the nine-month period
ended September 30, 2022 were $65.43 million, a 33% increase, compared to
revenues of $49.30 million for the period ended September 30, 2021. This
increase in worldwide revenues is primarily attributable to a $7.54 million
increase in helmet sales, a $5.87 million increase in other products, parts and
accessory sales and a $4.2 million increase in body armor sales, that were
partially offset by a $1.48 million decrease in neck brace sales. Revenues
generated from sales to our customers in the United States decreased from $14.79
million to $14.57 million, for the nine months ended September 30, 2022 and
2021, respectively. Revenues associated with international customers were $50.86
million and $34.51 million, or 78% and 70% of revenues, respectively, for the
nine months ended September 30, 2022 and 2021.

The following table presents our revenues by product line for the nine months ended September 30, 2022 and 2021:

                                            Nine months ended September 30,
                                2022        % of Revenues        2021        % of Revenues
Neck braces                $  4,741,028                7%   $  6,224,054               13%
Body armor                   32,513,336               50%     28,309,938               57%
Helmets                      12,426,220               19%      4,886,324               10%
Other products, parts and
accessories                  15,744,586               24%      9,877,545               20%
                           $ 65,425,170              100%   $ 49,297,861              100%


Sales of our flagship neck brace accounted for $4.74 million and $6.22 million,
or 7% and 13% of our revenues for the nine-month periods ended September 30,
2022 and 2021, respectively. The 24% decrease in neck brace revenues is
primarily attributable to a 25% decrease in the volume of neck braces sold
globally, when compared to the nine months ended September 30, 2021, which was a
particularly strong period for neck brace sales. Neck brace volumes for the
first nine months of 2021 had increased by 67% over the prior year period.

                                       20

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Our body armor products are comprised of chest protectors, full upper body
protectors, upper body protection vests, back protectors, knee braces, knee and
elbow guards, off-road motorcycle boots and mountain biking shoes.  Body armor
sales accounted for $32.51 million and $28.31 million, or 50% and 57% of our
revenues for the nine-month period ended September 30, 2022 and 2021,
respectively. The 15% increase in body armor revenues was primarily the result
of continued global shipments of the off-road motorcycle boots and mountain
biking shoes comprising our footwear category.

Our helmets represented $12.43 and $4.89 millioni.e. 19% and 10% of our revenues for the nine-month periods ended September 30, 2022 and 2021, respectively. The 154% increase in helmet sales in the 2022 period is primarily due to continued strong demand for the company’s expanding and award-winning ATV helmet line and redesigned MOTO helmet offering for use off-road motorcycles in United States and abroad.


Our other products, parts and accessories are comprised of goggles, hydrations
bags and apparel items including jerseys, pants, shorts and jackets as well as
aftermarket support items required primarily to replace worn or damaged parts
through our global distribution network.  Other products, parts and accessories
sales accounted for $15.74 million and $9.88 million, or 24% and 20% of our
revenues for the nine-month periods ended September 30, 2022 and 2021,
respectively. The 59% increase in revenues from the sale of other products,
parts and accessories is primarily due to strong demand for our MOTO and MTB
technical apparel designed for off-road motorcycle and mountain biking use,
respectively.

Cost of Revenues and Gross Profit - Cost of revenues for the nine-month periods
ended September 30, 2022 and 2021 were $38.02 million and $27.52 million,
respectively. Gross Profit for the nine-month periods ended September 30, 2022
and 2021 were $27.41 million and $21.77 million, respectively, or 42% and 44% of
revenues respectively. Our neck brace products continue to generate a higher
gross margin than our other product categories. Neck brace revenues accounted
for 7% and 13% of our revenues for the nine-month periods ended September 30,
2022 and 2021, respectively.  Additionally, revenues associated with
international customers were 78% and 70% of our revenues for the nine months
ended September 30, 2022 and 2021, respectively, with revenues associated with
international distribution customers continuing to generate a lower gross profit
margin than direct dealer sales in the United States.

Product royalty revenue – Product royalty revenue is earned on sales to distributors who have royalty agreements in place, as well as sales of licensed products by third parties who have licensing agreements in place . Revenue from product royalties for the nine-month periods ended September 30, 2022 and 2021 have been $200,221 and $141,535, respectively. The 41% increase in product royalty revenue is due to an increase in the sale of licensed products by licensees in the 2022 period.


Salaries and Wages - Salaries and wages for the nine-month periods ended
September 30, 2022 and 2021 were $3,897,693 and $2,813,024, respectively. The
39% increase in salaries and wages during the 2022 period was primarily due to
the employment of additional sales and warehousing personnel in the United
States as we continue to expand and build our selling activities to facilitate
growth.  Additionally, share compensation costs relating to a share issuance
made to key personnel contributed to the increase in salaries and wages for the
2022 period.

Commissions and Consulting Expense - During the nine-month periods ended
September 30, 2022 and 2021, commissions and consulting expenses were $456,911
and $581,485, respectively. This 21% decrease in commissions and consulting
expenses during the 2022 period is primarily due to a decrease in commissions
and incentives paid to both in-house and external sales representatives in the
United States, in line with a decrease in sales growth in the region.

Professional Fees - Professional fees consist of costs incurred for audit, tax
and regulatory filings, as well as patent protection and product liability
litigation expenses incurred as the Company continues to expand. Professional
fees for the nine-month periods ended September 30, 2022 and 2021 were $505,305
and $971,969, respectively. This 48% decrease in professional fees is primarily
due to a decrease in expenditure on product liability litigation during the 2022
period.

Advertising and Marketing - The Company places paid advertising in various
motorsport magazines and online media, and sponsors a number of events, teams
and individuals to increase product and brand visibility. Advertising and
marketing expenses for the nine-month periods ended September 30, 2022 and 2021
were $2,526,808 and $1,669,648, respectively. The 51% increase in advertising
and marketing expenditure during the 2022 period is primarily due to the
production, execution and synchronization of global marketing campaigns that
incorporate high caliber athlete sponsorships, industry trade shows and event
attendance activities, and other coordinated global marketing plans designed to
market the Company's product offering to a wider group of riders and enthusiasts
and continue building a globally recognizable and respected consumer brand.

                                       21

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Office Lease and Expenses - Office lease and expenses for the nine-month periods
ended September 30, 2022 and 2021 were $546,398 and $273,887, respectively. The
99% increase in office lease and expenses during the 2022 period was primarily
due to additional warehouse storage rented in the United States as the Company
continues to expand its Reno, Nevada warehousing facility to accommodate storage
and sales of its expanding line up of protective gear categories.

Research and Development Costs - These costs consist of the salaries of
personnel who are directly involved in the research and development of
innovative products, as well as the direct costs associated with developing
these products. Research and development costs for the nine-month periods ended
September 30, 2022 and 2021, increased to $1,516,147, from $1,319,183, during
the same 2021 period. The 15% increase in research and development costs during
the 2022 period is primarily due to the employment of industry specific product
development, engineering, design and quality management professionals as the
Company continues to refine its widening product categories and expand a
pipeline of innovative products.

Bad Debt Expense - Bad debt expense for the nine-month periods ended September
30, 2022 and 2021 were $101,680 and $56,290, respectively. This 81% increase in
bad debt expense during the 2022 period is primarily the result of an increase
in the provision for unrecoverable debts relating to the Company's international
customers.

General and Administrative Expenses - General and administrative expenses
consist of insurance, travel, merchant fees, telephone, office and computer
supplies. General and administrative expenses for the nine-month periods ended
September 30, 2022 and 2021 were $2,399,899 and $1,830,055, respectively. The
31% increase in general and administrative expenses during the 2022 period is
primarily as a result of an increase in expenditures on product liability,
general risk and directors' and officers' insurance premiums during the 2022
period, as the Company expands its product offering and due to the increase in
sales over the period.  Additionally, travel expenditures increased in line with
a relaxation of COVID-19 related travel restrictions and an increase in
marketing, industry tradeshow and sales travel activity.

Depreciation Expense - Depreciation Expense for the nine-month periods ended
September 30, 2022 and 2021 were $829,790 and $744,713, respectively. This 11%
increase in depreciation during the 2022 period is primarily due to the addition
of warehouse racking and inventory management equipment utilized at the expanded
Company's Reno, Nevada warehouse and upgrades to the Company's direct to
consumer website in order to facilitate an increase in selling activity.

Total Operating Expenses - Total operating expenses increased by $2.52 million
to $12.78 million, in the nine-month period ended September 30, 2022, compared
to $10.26 million in the nine-month period ended September 30, 2021. This
increase in total operating expenses during the 2022 period is primarily due to
increases in salaries, advertising and marketing, general and administrative,
warehouse leasing, and research and development costs, that were partially
offset by the decrease in professional fees and commissions paid mentioned in
this report.

Net Income - Net income after income taxes for the nine-month period ended
September 30, 2022 was $11.04 million, as opposed to net income after income
taxes of $8.76 million for the nine-month period ended September 30, 2021.  This
increase in net income during the 2022 period is primarily due to the increase
in revenue and gross profit discussed above.

Cash and capital resources

To September 30, 2022we had cash and cash equivalents of $4.84 million and
$0.06 million short-term investments. The following table provides a summary of our cash flows for the periods indicated:


                                                                  September 

30,

                                                               2022         

2021

Net cash provided by operating activities                  $ 1,748,661   $ 

1,145,417

Net cash used in investing activities                      $  (821,740 ) $  (892,662 )
Net cash used in financing activities                      $  (634,379 ) $  (534,948 )
Effect of exchange rate changes on cash and cash
equivalents                                                $  (479,710 ) $   (98,178 )
Net decrease in cash and cash equivalents                  $  (187,168 ) $  (380,371 )
Cash and cash equivalents at the beginning of period       $ 5,022,436   $ 2,967,042
Cash and cash equivalents at the end of period             $ 4,835,268   $ 2,586,671




                                       22
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Cash decreased by $187,168 or 4%, for the nine months ended September 30, 2022,
when compared to cash on hand at December 31, 2021.  The primary sources of cash
for the nine months ended September 30, 2022 were net income of $11,037,798,
decreased prepaid expenses of $2,845,924 and increased income taxes payable of
$2,073,221. The primary uses of cash for the nine months ended September 30,
2022 were increased accounts receivable of $9,925,342, increased inventory of
$4,088,914, decreased accounts payable and accrued expenses of $2,136,609,
capital expenditures of $865,204 and the repayment of a short term loan
amounting to $ 832,089.

The Company is currently meeting its working capital needs through cash on hand,
a revolving line of credit with a bank, as well as internally generated cash
from operations.  Management believes that its current cash and cash equivalent
balances, along with the net cash generated by operations are sufficient to meet
its anticipated operating cash requirements for at least the next twelve months.
There are currently no plans for any major capital expenditures in the next
twelve months. Our long-term financing requirements depend on our growth
strategy, which relates primarily to our desire to increase revenue both in the
U.S. and abroad.

Obligations under material contracts


Pursuant to our Licensing Agreement with Xceed Holdings, a company controlled by
Dr. Christopher Leatt, our founder, chairman and head of research and
development, we pay Xceed Holdings 4% of all neck brace sales revenue billed and
received by the Company on a quarterly basis based on sales of the previous
quarter.  During the quarters ended September 30, 2022 and 2021, the Company
paid an aggregate of $40,062 and $58,085 in licensing fees to Xceed Holdings. In
addition, pursuant to a separate license agreement between the Company and Mr.
J. P. De Villiers, our former director, the Company is obligated to pay a
royalty fee of 1% of all our billed and received neck brace sales revenue, in
quarterly installments, based on sales of the previous quarter, to a trust that
is beneficially owned and controlled by Mr. De Villiers. During the quarters
ended September 30, 2022 and 2021, the Company paid an aggregate of $10,016 and
$14,515, in licensing fees to Mr. De Villiers.

From May 15, 2015 through October 31, 2021, the Company was party to a
consulting agreement, dated July 8, 2015, between the Company and Innovate
Services Limited, or Innovate, a Seychelles limited company in which Dr. Leatt
is an indirect beneficiary, pursuant to which, as amended, Innovate served as
the Company's exclusive research, development and marketing consultant, in
exchange for a monthly fee of $42,233; provided that Dr. Leatt personally
performs the services to be performed by Innovate under the agreement.  Either
party had the right to terminate the agreement for convenience, upon nine
months' prior written notice, or by the Company immediately without notice in
the event of Innovate's breach of an obligation under the contract or if Dr.
Leatt could no longer perform the services. On November 8, 2021, the Company
terminated the agreement with Innovate, effective October 31, 2021, in
connection with the wind-up of Innovate's business operations.  The termination
of the agreement with Innovate will not have an adverse effect on the Company's
research and development operations as the Company simultaneously entered into a
new consulting agreement with Innovation Services Limited, Jersey limited
company beneficially owned by Dr. Leatt, for the same research, development and
marketing  services, and on substantially the same terms and conditions as the
terminated agreement. During the quarters ended September 30, 2022 and 2021, the
Company recognized an aggregate of $0 and $126,699, respectively, in consulting
fees to Innovate.

On November 8, 2021, the Company entered into a consulting agreement with
Innovation Services Limited, a Jersey limited company in which, Dr. Christopher
Leatt, the Company's founder and chairman, is an indirect beneficiary. Pursuant
to the terms of the agreement, Innovation has agreed to serve as the Company's
exclusive research, development and marketing consultant, in exchange for a
monthly fee of $42,233; provided, however, that Dr. Leatt must remain an
Innovation director and beneficiary of a majority of its ownership interests
during the term of the agreement, and Dr. Leatt must remain the Company's
primary point of contact responsible for the oversight, review and delivery of
the services to be performed by Innovation under the agreement. Innovation may
increase its monthly fees, on an annual basis, by no greater than the lesser of:
(a) two and one-half percent (2.5%) of the prior year's annualized fee; or (b) a
percentage equal to then-applicable annual percentage increase in the Consumer
Price Index (CPI) published by the United States Department of Labor's bureau of
labor statistics, plus one-half percent (0.5%).  The parties further agreed that
all intellectual property generated in connection with the services provided
under the consulting agreement will be the sole property of the Company. The
consulting agreement was effective as of November 1, 2021, and will continue
unless terminated by either party in accordance with its terms. Either party has
the right to terminate the consulting agreement upon nine months' prior written
notice, except that the consulting agreement may be terminated by the Company
immediately without notice if the services to be performed by Innovation cease
to be performed by Dr. Leatt, if beneficial ownership in Innovation by Dr.
Leatt's and his immediate family members decreases, or for any other material
breach of the agreement. The parties have agreed to settle any dispute under the
consulting agreement by submission to JAMS for final and binding arbitration
pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance
with the Expedited Procedures in those Rules.  The Company also simultaneously
entered into a side letter agreement, dated November 8, 2021, with Dr. Leatt,
pursuant to which Dr. Leatt agreed, among other things: (1) not to perform
services similar to the services provided under the agreement for any current or
future, direct or indirect competitor of the Company or any similar company; (2)
not to solicit any current or future employees of the Company for employment
with Innovation or any other entity with which he may become affiliated, or to
contact or solicit any current or future stockholder or investor of the Company
in connection with any matter that is not directly related to the ongoing or
future business operations of the Company; and (3) that he will apprise the
Company of any business opportunity that he becomes aware of that could benefit
the Company so that the Company, can in its sole discretion, make a
determination regarding whether to pursue such opportunity in the best interest
of the Company and its stockholders. Dr. Leatt further agreed to continue
dedicating a majority of his time on matters related to performance of his
duties as a director of the Company and to the fulfillment of his obligations to
the Company's research and development efforts under the consulting agreement,
and the Company will have the right to adjust the amount of the fees payable
under the consulting agreement to the extent of any substantial diminution in
his fulfillment of such duties and obligations. Accordingly, effective January
1, 2022, the Company's monthly fee to Innovation, increased to $43,289. During
the quarters ended September 30, 2022 and 2021, the Company recognized an
aggregate of $129,867 and $0, respectively, in consulting fees to Innovation.

                                       23

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Pursuant to a Premium Finance Agreement, dated May 27, 2022, between the Company
and Aon Premium Finance, LLC, or APF, the Company is obligated to pay APF an
aggregate sum of $80,233 in eleven monthly payments on a sliding scale, as
follows, $37,381, $37,381, $1,172, $ 1,172, $ 1,172 and thereafter six payments
of $326, at a 6.360% annual interest rate, commencing on June 1, 2022 and ending
on April 1, 2023. Any late payment during the term of the agreement would be
assessed a late penalty of 5% of the payment amount due, and in the event of
default APF has the right to accelerate the payment due under the agreement. As
of September 30, 2022, the Company had not defaulted on its payment obligations
under this agreement.

Pursuant to a Premium Finance Agreement, dated September 20, 2022, between the
Company and APF, the Company is obligated to pay APF an aggregate sum of
$138,470 in seven payments of $19,781, at a 6.360% annual interest rate,
commencing on October 1, 2022 and ending on April 1, 2023. Any late payment
during the term of the agreement will be assessed a late penalty of 5% of the
payment amount due, and in the event of default APF has the right to accelerate
the payment due under the agreement. As of September 30, 2022, the Company had
not defaulted on its payment obligations under this agreement.

Pursuant to a Premium Finance Agreement, dated October 25, 2022, between the
Company and APF, the Company is obligated to pay APF an aggregate sum of
$1,235,372 in ten payments of $123,537, at a 8.250% annual interest rate,
commencing on December 1, 2022 and ending on September 1, 2023. Any late payment
during the term of the agreement will be assessed a late penalty of 5% of the
payment amount due, and in the event of default APF has the right to accelerate
the payment due under the agreement.

On November 19, 2018, the Company entered into a $1,000,000 revolving line of
credit agreement with a bank. Payments for the advances under the line bear
interest at the LIBOR Daily Floating Rate plus 2.5 percentage points, commencing
January 1, 2019, and any unpaid principal, interest, or other charges
outstanding under the agreement were due and payable on the November 19, 2020,
maturity date.  On November 5, 2020, the Company and the bank agreed to extend
the line of credit facility through November 19, 2021, with retroactive effect
on October 27, 2020.  The renewed line of credit also featured an index floor so
that payments for any future advances will bear interest at the greater of the
LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5
percentage points, and secured the Company's obligations with Company-owned
equipment and fixtures, accounts receivable and inventory in the U.S.. On March
1, 2021, the Company and the bank agreed to an extension of the line of credit
facility through February 28, 2022, with retroactive effect on February 17,
2021, and to increase the facility amount to 1,500,000. On January 21, 2022, the
Company and the bank agreed to extend the line of credit facility through
February 28, 2023 and to replace interest determined by LIBOR Daily Floating
Rate with the Bloomberg Short-Term Bank Yield Index rate. As of September 30,
2022, no amounts were advanced to the Company from the $1,500,000 line of credit
facility.

On December 29, 2021, Two Eleven entered into a Loan and Security agreement with
a bank, effective December 17, 2021, to finance equipment. The Equipment Note
financed under the Loan and Security Agreement has a total value of $272,519,
payable in 36 consecutive monthly installments commencing February 5, 2022, and
continuing to January 5, 2025. Interest shall accrue on the entire principal
amount of this Equipment Note outstanding from time to time at a fixed rate of
3.5370% per annum. The principal and interest amount of each payment shall be
$7,990. As of September 30, 2022, $214,429 of the Equipment Note was
outstanding.

Critical accounting policies


Our discussion and analysis of financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to
make estimates and assumptions that 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 revenues and expenses during the
reporting period. We have identified the following as the items that require the
most significant judgment and often involve complex estimation: revenue
recognition, estimating allowances for doubtful accounts receivable, inventory
valuation, impairment of long-lived assets, leases and accounting for income
taxes.

Revenue and Cost Recognition - The Company's products are sold worldwide to a
global network of distributors and dealers, and directly to consumers when there
are no dealers or distributors in their geographic area or where consumers
choose to purchase directly via the Company's e-commerce website (collectively
the "customers").

                                       24
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Revenues from product sales are recognized when earned, net of applicable
provisions for discounts and returns and allowances in the event of product
defect where no exchange of product is possible. Revenues are recognized when
our performance obligations are satisfied as evidenced by transfer of control of
promised goods to our customers, in an amount that reflects the consideration we
expect to be entitled to in exchange for those goods or services. Product
royalty income, representing less than 1% of total revenues, is recorded as the
underlying product sales occur, in accordance with the related licensing
arrangements.

Our standard distributor payment terms range frompre-payment in full to 60 days
after shipment and subsequent sales of our products by distributors have no
effect on the amount and timing of payments due to us, however, in limited
instances qualified distributors and dealers may be granted extended payment
terms during selected order periods.  In performing such evaluations, we utilize
historical experience, sales performance, and credit risk requirements.
Furthermore, products purchased by distributors may not be returned to us in the
event that any such distributor relationship is terminated.

Since the Company (through its wholly-owned subsidiary) serves as the
distributor of Leatt products in the United States, the Company records its
revenue and related cost of revenue for its product sales in the United States
upon shipment of the merchandise to the dealer or to the ultimate consumer when
there is no dealer in the geographic area or the consumer chooses to purchase
directly from the Company's e-commerce website and the sales order was received
directly from, and paid by, the ultimate consumer. Since the Company (through
its South African branch) serves as the distributor of Leatt products in South
Africa, the Company records its revenue and related cost of revenue for its
product sales in South Africa upon shipment of the merchandise from the branch
to the dealer.  The Company's standard terms and conditions of sale for
non-consumer direct or web-based sales do not allow for product returns other
than under warranty.

International sales (other than in the United States and South Africa) are
generally drop-shipped directly from the third-party manufacturer to the
international distributors. Revenue and related cost of revenue is recognized at
the time of shipment from the manufacturer's port when the shipping terms are
Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and
Insurance to named place ("CIP") as legal title and risk of loss to the product
pass to the distributor. Sales to all customers (distributors, dealers and
consumers) are generally final; however, in limited instances, product may be
returned and exchanged due to product quality issues. Historically, returns due
to product quality issues have not been material and there have been no
distributor terminations that resulted in product returns. Cost of revenues also
includes royalty fees associated with sales of Leatt-Brace products. Product
royalty income is recorded as the underlying product sales occur, in accordance
with the related licensing arrangements.

The Company reviews the reserves for customer returns at each reporting period
and adjusts them to reflect data available at that time. To estimate reserves
for returns, the Company estimates the expected returns and claims based on
historical rates as well as events and circumstances that indicate changes to
historical rates of product returns and claims. Historically, returns due to
product quality issues have not been material and there have been no distributor
terminations that resulted in product returns. The provision for estimated
returns at September 30, 2022 and December 31, 2021 was $-0- and $-0-,
respectively.

Sales commissions are expensed when incurred, which is generally at the time of
sale or cash received from customers, because the amortization period would have
been one year or less. These costs are recorded in commissions and consulting
expenses within operating expenses in the accompanying consolidated statements
of operations and comprehensive income.

Shipping and handling activities associated with outbound freight, after control
over a product has transferred to a customer, are accounted for as a fulfilment
cost and are included in revenues and cost of revenues in the accompanying
consolidated statements of operations and comprehensive income.

Revenue recognized from contracts with customers is recorded net of sales taxes,
value added taxes, or similar taxes that are collected on behalf of local taxing
authorities.

Allowance for Doubtful Accounts Receivable - Accounts receivable consist of
amounts due to the Company from normal business activities. Credit is granted to
substantially all distributors on an unsecured basis. We continuously monitor
collections and payments from customers and maintain an allowance for doubtful
accounts receivable based upon the expected credit losses determined utilizing
historical experience and any specific customer collection issues that have been
identified. In determining the amount of the allowance, we are required to make
certain estimates and assumptions. Accounts receivable balances that are still
outstanding after we have used reasonable collection efforts are written off as
uncollectible. While such credit losses have historically been minimal, within
our expectations and the provisions established, we cannot guarantee that we
will continue to experience the same credit loss rates that we have in the past.
A significant change in the liquidity or financial position of any of our
significant customers could have a material adverse effect on the collectability
of our accounts receivable and our future operating results. The allowance for
doubtful accounts was $372,889 at September 30, 2022 and $291,584 at December
31, 2021.

                                       25
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Inventory Valuation - Inventory is stated at the lower of cost or market. Cost
is determined using the first-in first-out (FIFO) method. Inventory consists
primarily of finished goods. Shipping and handling costs are included in the
cost of inventory. In assessing the inventory value, we make estimates and
judgments regarding reserves required for product obsolescence, aging of
inventory and other issues potentially affecting the saleable condition of
products. In performing such evaluations, we utilize historical experience as
well as current market information.  The reserve for obsolescence was $265,084
at September 30, 2022 and $116,183 at December 31, 2021.

Impairment of Long-Lived Assets - Our long-lived assets include property and
equipment. We evaluate our long-lived assets for recoverability whenever events
or changes in circumstances indicate that an asset may be impaired. In
evaluating an asset for recoverability, we estimate the future cash flow
expected to result from the use of the asset and eventual disposition. If the
expected future undiscounted cash flow is less than the carrying amount of the
asset, an impairment loss, equal to the excess of the carrying amount over the
fair value of the asset, is recognized. We have determined there was no
impairment charge during the quarters ended September 30, 2022 and 2021.

Operating Leases - The Company determines if an arrangement is a lease at
contract inception. Operating leases are included in the right-of-use assets
("ROU''), and lease liability obligations are included in the Company's
consolidated balance sheets. ROU assets represent the Company's right to use an
underlying asset of the lease term and lease liability obligations represent its
obligation to make lease payments arising from the lease. Operating lease ROU
assets and liabilities are recognized at the commencement date, based on the
present value of lease payments over the lease term. As the Company's leases
typically do not provide an implicit rate, the Company estimates its incremental
borrowing rate based on the information available at commencement date in
determining the present value of lease payments. The Company uses the implicit
rate when readily determinable. The ROU asset also includes any lease payments
made and excludes lease incentives and lease direct costs. The Company's lease
terms may include options to extend or terminate the lease when it is reasonably
certain that the Company will exercise that option. Lease expense is recognized
on a straight-line basis over the lease term. Please refer to Note 3 "Leases",
in the Notes to Consolidated Financial Statements for additional information.

Income Taxes - As part of the process of preparing our consolidated financial
statements, we are required to estimate our income tax provision (benefit) in
each of the jurisdictions in which we operate. This process involves estimating
our current income tax provision (benefit) together with assessing temporary
differences resulting from differing treatment of items for tax and accounting
purposes These differences result in deferred tax assets and liabilities, which
are included within our consolidated balance sheets. We regularly evaluate our
ability to recover the reported amount of our deferred income taxes considering
several factors, including our estimate of the likelihood of the Company
generating sufficient taxable income in future years during the period over
which the temporary differences reverse.

Recent accounting pronouncements


See Note 11, "Recent Accounting Pronouncements" in the Notes to Consolidated
Financial Statements for a full description of recent accounting pronouncements,
including the respective dates of adoption, or expected adoption and effects on
our consolidated financial position, results of operations and cash flows.

Off-balance sheet arrangements


We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on its financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to its stockholders.

© Edgar Online, source Previews

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Lucid Group, Inc. Announces $600 Million ATM Program and Up to $915 Million Additional Investment by PIF Subsidiary https://www.executivetravel.biz/lucid-group-inc-announces-600-million-atm-program-and-up-to-915-million-additional-investment-by-pif-subsidiary/ Tue, 08 Nov 2022 22:20:00 +0000 https://www.executivetravel.biz/lucid-group-inc-announces-600-million-atm-program-and-up-to-915-million-additional-investment-by-pif-subsidiary/

NEWARK, Calif., November 8, 2022 /PRNewswire/ — Lucid Group, Inc. (Nasdaq: LCID; “Lucid”) today announced that it has entered into an “at-the-market” program pursuant to a stock distribution agreement, dated November 8, 2022, between the Company and BofA Securities, Inc., Barclays Capital Inc. and Citigroup Global Markets Inc. as managers. Under the Market Program, Lucid can sell up to $600 million of shares of its ordinary shares through the managers. Such sales could be made through ordinary broker transactions, to or through a market maker, in privately negotiated transactions, block transactions, transactions which are deemed to be “offers in the Market” as defined in Rule 415 under the Securities Act of 1933, as amended, or by a combination of these selling methods. The managers may also sell Lucid common stock by any other method permitted by law.

The price, volume and timing of any sale under the Marketplace Program will be determined at Lucid’s sole discretion and in accordance with the terms of the Share Distribution Agreement.

In addition, Lucid entered into an agreement with its majority shareholder and Public Investment Fund (“PIF”) affiliate, Ayar Third Investment Company (“Ayar”), pursuant to which Ayar agreed to purchase from Lucid up to $915 million of shares of its common stock in one or more private placements through at least March 31, 2023. Ayar will pay a price per share equal to the volume-weighted average price to the public of the shares that Lucid actually sold under the program at market price during that calendar quarter. These private placements are not part of this offer and are in addition to the $600 million shares that Lucid may sell under the share distribution agreement. Ayar shall have the right, but not the obligation, to enter into a Subscription Agreement substantially consistent with the Existing Agreement with respect to any increase in the maximum amount of the offering under the Share Distribution Agreement and/ or any new offering to the market of ordinary shares of the Company during the term of the existing agreement. In addition, subject to certain exceptions, Ayar has agreed, among other things, not to offer, sell, pledge or otherwise transfer shares of our common stock for six months after the date of any private placement.

Lucid intends to use the net proceeds of the program at market, as well as private placements from its controlling shareholder, for general corporate purposes, which may include, among other things, capital expenditures and working capital. .

The public offering of shares under Lucid’s in-market program is being made pursuant to Lucid’s effective registration statement on Form S-3, including a base prospectus, filed with the Securities and Exchange. Commission (the “SEC”). The offering is being made solely by means of a prospectus supplement and the accompanying base prospectus. Prospective investors should read the prospectus supplement and the accompanying base prospectus in this registration statement and other documents that Lucid has filed or will file with the SEC for information about Lucid and the offering. You can obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the prospectus supplement and base prospectus may be obtained by contacting BofA Securities NC1-004-03-43 200, Attention: Prospectus Department, 200 North College Street, 3rd Fl Charlotte, North Carolina 28255-0001, or by email at [email protected]; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by phone at (888) 603-5847 or by email at [email protected] ; or Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by phone at 800-831-9146.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any shares of Lucid common stock, and there will be no sale of such securities in any jurisdiction in which such offer, solicitation or sale would be illegal prior to registration. or qualification under the securities laws of such jurisdiction.

About Lucid Group
Lucid’s mission is to inspire the adoption of sustainable energy by creating cutting-edge technologies and the most captivating luxury electric vehicles centered on the human experience.

Investor Relations
[email protected]

Media Contact
[email protected]

Trademarks
This communication contains trademarks, service marks, trade names and copyrights of Lucid Group, Inc. and its subsidiaries and other companies, which are the property of their respective owners.

Forward-looking statements
This communication contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “estimate”, ” plan”, “project”, “plan”, “intend”, “will”, “should”, “expect”, “anticipate”, “believe”, “seek”, “aim”, “continue”, “may”, “may”, “might”, “possible”, “potential”, “predicts” or other similar expressions that predict or indicate future events or trends or are not statements historical matters. These forward-looking statements include, but are not limited to, statements regarding plans and expectations regarding Lucid’s registration statement on Form S-3, the timing, duration and volume of sales in As part of Lucid’s Market Equity Program, the cal end and volume of sales to Lucid’s controlling shareholder, any potential future offerings or capital raises, and the promise of Lucid’s technology. These statements are based on various assumptions, whether or not identified in this communication, and the current expectations of Lucid’s management. These forward-looking statements are not intended to serve, and should not be relied upon by, an investor as a guarantee, assurance or definitive statement of fact or likelihood. Actual events and circumstances are difficult or impossible to predict and may differ from these forward-looking statements. Many real events and circumstances are beyond Lucid’s control. These forward-looking statements are subject to a number of risks and uncertainties, including the factors described under “Risk Factors” in Part II, Item 1A of Lucid’s Quarterly Report on Form 10-Q for the Quarter Ended. on September 30, 2022, and other documents that Lucid has filed or will file with the SEC. If any of these risks materialize, or if Lucid’s assumptions prove incorrect, actual results could differ materially from the results implied by such forward-looking statements. There may be additional risks that Lucid is not currently aware of or that Lucid currently believes to be immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect Lucid’s expectations, plans or forecasts regarding future events and views as of the date of this communication. Lucid anticipates that subsequent events and developments will cause Lucid’s ratings to change. However, while Lucid may choose to update these forward-looking statements at some time in the future, Lucid specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Lucid’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed on forward-looking statements.

SOURCE Lucid Group

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