Unless otherwise indicated by the context, any reference herein to the "Company", "Profire", "we", our""our" or "us" means Profire Energy, Inc., a Nevada corporation, and its corporate subsidiaries and predecessors. Unless otherwise indicated by the context, all dollar amounts stated in this report on Form 10-K are in U.S. dollars.

Forward-looking statements are predictions and not guarantees of future performance or events.  Forward-looking statements are based on our assessment of current industry, financial and economic information, all of which we have assessed but which by its nature isare dynamic andfactors subject to rapid and possibly abrupt changes.  Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements and we hereby qualify all our forward-looking statements by these cautionary statements.

These forward-lookingForward-looking statements in this report are based only on information currently available to us and speak only as of their dates and should not be unduly relied upon.the date on which they are made.  We undertake no obligation to amend this report or publicly revise these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Exchange Act)as required by law) to reflect subsequent events or circumstances, whether as the result of new information, future events or otherwise.

The following discussion should be read in conjunction with our financial statements and the related notes contained elsewhere in this report and in our other filings with the Commission.

During the fiscal yearyears ended December 31, 20172021 and December 31, 2020, no single customer accounted for more than 10% of our total revenues. DuringNonetheless, the nine-month transition period ended December 31, 2016, the following customer accounted for more than 10% of our total revenues. The loss of a major customer could have a material adverse effect on our business, financial condition, results of operations and cash flows:flows.

We have filed or acquired several patent applications for various product innovations, both domestically and internationally. Management willinnovations. We intend to continue to assess the strategic and financial value of each potential patent as we develop various intellectual properties. The provisional and/

We are required to obtain certain safety certifications/ratings for our combustion- and chemical-managementcombustion-management systems before they are released to the market. We have received the appropriate certifications including CSA, Intertek, and UL certifications for our burner-management and chemical-management systems.

We believe that our products and services can improvehelp our customers achieve and maintain regulatory compliance for our customers. Regulations concerningand in some instances, exceed industry standards, regarding emissions, safe burner ignition methods, data logging, or other regulatory dimensionssafety or

environmental compliance requirements or standards that could be related to our products, may impact our customers and markets. Examples of such regulations include:

Our burner-management system's design enables our products tosystems help companies become compliantcomply with the aforementionedthese regulations and other regulations. While these industryclean air and emissions reduction initiatives and requirements. On behalf of our customers, we monitor regulatory requirements that impact their businesses and industries. We are relatively new, we intend to continue following their implementationcurrently monitoring the impact of the Methane Waste Prevention Act of 2021, the Clean Energy and enforcement.Sustainability Accelerator Act, EPA New Source Performance Standards as part of 40 CFR Subpart OOOO and OOOOa, and others. We believe our burner-management systems and ancillary products can help customers meet the more stringent standards being proposed. We have assigned sales and service professionals to these specific geographic areas to ensure we have a strong presence in the Statesstates and Provincesprovinces with specific safety and emissions regulations.

In light of this regulatory environment, weWe are focused on providing products and services that exceed existing regulatory and industry safety standards; therefore, westandards. We believe demand for our products may increase as regulators and our customers continue to tighten safety and efficiency standards in the industry.industry and as our customers demand technological solutions. In addition to satisfying regulatory and safety requirements, we believe oil and gas companiesour customers continue to recognize the operational efficiencies that can be realized through the use of our burner-management systems and related products. However, significant changes in the regulatory environment could materially impact our results of operations and financial condition. For example, a significant portion of our historical Canadian sales has been aided by such regulation, resultingcondition in a higher estimated penetration rate for our products there, and we anticipate such regulatory pressures to continue. Consequently, ifeither positive or negative ways depending on the regulatory environment were to become significantly less stringent, we may experience a decline

We place strong emphasis on product-oriented research and development relating to the development of new or improved products and systems. During the fiscal yearyears ended December 31, 20172021 and the nine-month transition period ended December 31, 2016,2020, we spent $1,221,211$1,120,080 and $757,880,$1,299,103, respectively, on research and development programs.

Our business is affected by local, provincial, state, federal and foreign laws and other regulations relating to the gas and electric safety standards and codes presently existing in the oil and gas industry, as well as laws and regulations relating to worker safety and environmental protection.

During the fiscal yearyears ended December 31, 20172021 and the nine-month transition period ended December 31, 2016,2020, respectively, we did not incur material direct costs to comply with applicable environmental laws. There can be no assurance, however, that this will continue to be the case in the future as environmental laws and regulations relating to the oil and natural gas industry are routinely subject to change.

As of December 31, 2017,2021, we had a total of 98 employees, 8690 of whom were full-time employees.

Our principal customers are oil and natural gas exploration and production companies that operate in the upstream and midstream space and the OEM'soriginal equipment manufacturers, or OEM’s, that supply the exploration and production companies with burner relatedthe required production and processing equipment. Thus, the results of our operations and financial condition depend on the level of capital spending by our customers. The energy industry's level of capital spending is tied tosignificantly influenced by the prevailing

We depend on our customers' willingness to make operating and capital expenditures to transport, refine and produce oil and natural gas. Industry conditions are influenced by numerous factors over which we have no control, such as:

These and gasother industry conditions could influence our customers’ willingness to make operating and the consequent impact on the transportation, refinementcapital expenditures to transport, refine and production ofproduce oil and natural gas could cause a decline in the demand for our products and services, which could have a material adverse effect on our business.  Major declines in oil and natural gas prices since July 2014 (when prices were at approximately $100 per barrel) have resulted in substantial declines in capital spending and drilling programs across the industry. As a result of these declines in oil and natural gas prices over the last couple years, most exploration and production companies have reduced drilling programs from the historic levels seen in 2014.

A portion of our consolidated revenue and consolidated operating income is in Canadian dollars.  As a result, we are subject to significant risks, including:

Our future business strategies may include growth through the acquisitions of other businesses. We may not be able to identify attractive acquisition opportunities or successfully acquire those opportunities that are identified. Even if there is successwe are successful in integrating future acquisitions into existing operations, we may not derive the benefits, such as administrative or operational synergy or earnings, obtained, that were expected from such acquisitions, which may result in the commitment of capital resources without the expected returns on the capital. TheAdditionally, the competition for acquisition opportunities may increase which in turn would increase our cost of making acquisitions.

In pursuing our business strategy, from time to time we evaluate targets and enter into agreements regarding possiblefor potential acquisitions. To be successful, weWe conduct due diligence to identify valuation issues and potential loss contingencies, negotiate transaction terms, complete transactions and manage post-closing matters such as the integration of acquired businesses. WeHowever, we may incur unanticipated costs or expenses following a completed acquisition, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, litigation, and other liabilities.

The risks associated with our past or future acquisitions also include the following:

There can be no assurance as to the extent to which theThe anticipated benefits of these acquisitions willmay not be realized, if at all, or thatand we may incur significant time and costs beyond those anticipated will not be required with the integration of new acquisitions to the existing business. If we are unable to accomplish the integration and management of the combined business successfully, or achieve a substantial portion of the anticipated benefits of these acquisitions within the time frames anticipated by management,Management, it could have a material adverse effect on our business and financial condition.

Many of these factors will beare outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues, and diversion of management'sManagement's time and attention. They may also delay the realization of the benefits we anticipate when we enter into a transaction. Failure to implement our acquisition strategy, including successfully integrating acquired businesses, could have a material adverse effect on our business and financial condition.

Our operations are subject to hazards inherent in our technology's use in oilfield service operations, oilfield development and oil production activities, including fire, explosions, blowouts, spills and damage or loss from natural disasters, each of which could result in substantial damage to the oil-producing formations and oil wells, production facilities, other property, equipment and the environment, or in personal injury or loss of life. These hazards could also result in the suspension of purchasing, or in claims by employees, customers or third parties which could have a material adverse effect on our financial condition.

Some of these risks are either not insurable or insurance is available only at rates that we consider uneconomical. Although we will maintain liability insurance in an amount that we consider consistent with industry practice, the nature of these risks is such that liabilities could exceed policy limits. We may not always be successful in obtaining contractual indemnification from

If the laws and regulations governing oil and natural gas exploration and production were to become less stringent, we could experience a decline in the demand for our products, which we would expect would materially and adversely impact our results of operations and financial condition. These regulations are subject to change and new regulations may curtail or eliminate customer activities in certain areas where we currently operate. We cannot determine the extent to which new legislation may impact customer activity levels, and ultimately, the demand for our products and services.

Furthermore, our operations are affected by local, provincial, state, federal, and foreign laws and other regulations relating to oil, gas and electric standards. Such standards can be related to safety, environmental protection, or other regulatory dimensions for the oil and gas industry. We cannot predict the level of enforcement of existing laws and regulations, how such existing laws and regulations may be interpreted by enforcement agencies or court rulings, whether additional laws and regulations will be adopted, or the effect such changes may have on us,Less stringent standards could adversely impact our business orand financial conditions.

Our international operations involve additional risks not associated with our domestic operations.  We intend to continue our expansion into international oil and gas producing areas. The effect on our international operations from the risks we describe will not be the same in all countries and jurisdictions. Risks associated with our operations outside of the United States include risks of:

Most of our products are used in hazardous production applications and involve exposure to inherent risks, including explosions and fires, where an accident or a failure of a product could result in liability for personal injury, loss of life, property damage, pollution or other environmental hazards or loss of production. Litigation may arise from a catastrophic occurrence at

The oil industry experiences significant product liability claims. As an installer and servicer of oilfield combustion management technologies and related products, we face an inherent business risk of exposure to product liability claims in the event that our products, or the equipment into which our products are incorporated, could malfunction and result in personal injury or death. We may be named in product liability claims even if there is no evidence that our technology, products or services caused or contributed to the accidents. Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the awarding of damages. In addition, we may be required to participate in recalls involving our products if any of our products prove to be defective, or we may voluntarily initiate a recall or make payments related to such claims as a result of various industry or business practices, or in an effort to maintain good customer relationships. We cannot be certain that ourOur product liability insurance willmay not be sufficient to cover all product liability claims, that such claims will notmay exceed our insurance coverage limits, or that such insurance willmay not continue to be available on commercially reasonable terms, if at all. Any product liability claim brought against us could have a material adverse effect on our reputation and business.

Although we maintain insurance protection for certain risks in our business and operations, we are not fully insured against all possible risks, nor are all such risks insurable. It is possible an unexpected judgment could be rendered against us in cases infor which we could be uninsured or underinsured and damages could be beyond the amounts we currently have reserved or anticipate incurring. Significant increases in the cost of insurance and more restrictive coverage may have an adverse impact on our results of operations. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable or that our insurance coverage willmay not be adequate to cover future claims and assessments that may arise.

We provide warranties as to the proper operation and conformance to specifications of the products we sell. Failure of our products to operate properly or to meet specifications may increase our costs by requiring additional engineering resources and services, replacement of parts and equipment, or monetary reimbursement to a customer. We have inIn the past we have received warranty claims and we expect to continue to receive them in the future. To the extent that we incur substantial warranty claims in any period, our reputation, our ability to obtain future business, and our earnings could be adversely affected.

We purchase equipment provided by a limited number of manufacturers. During periods of high demand, these manufacturers may not be able to meet our requests for timely delivery, resulting in delayed deliveries of equipment and higher prices for equipment. There are a limited number of suppliers for certain materials used in burner managementburner-management systems, our largest product line. Although these materials are generally available, supply disruptions may occur due to factors beyond our

control. Such disruptions, delayed deliveries, and higher prices could limit our ability to meet our customers' needs, or could increase the related costs, thus possibly reducing our revenues and profits.

As part of our efforts to streamline operations and to cut costs, weWe outsource our manufacturing processes and other functions and continue to evaluate additional outsourcing.outsourcing in order to maintain efficient operations. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may precludeprevent us from fulfilling our customers' orders on a timely basis. The ability of these manufacturers to perform is largely outside of our control. Additionally, changing or replacing our contract manufacturers or other outsourcers could cause disruptions or delays.

We are exposed to risks of loss in the event of delay, cancellation, and nonpayment by our customers. Our customers are subject to their own operating and regulatory risks and may be highly leveraged. We may experience financial losses in our dealings with other parties. Any delay and any increases in the cancellation of contracts or nonpayment by our customers and/or counterparties could adversely affect our results of operations and financial condition. In addition, the same factors that may lead to a reduction in our potential customers' spending may also increase our exposure to the risks of nonpayment and nonperformance by our existing customers. A significant reduction in our customers' liquidity may result in a decrease in their ability to pay or otherwise perform their obligations to us. Any increase in nonpayment or nonperformance by our customers, either as a result of recent changes in financial and economic conditions or otherwise, could have an adverse impact on theour operating results and adversely affect our liquidity.

Our success dependsmay depend, in part, on our ability to obtain and maintain patent and other intellectual property protection with respect to our proprietary technology and products. In recent years, patent rights have been the subject of significant litigation. As a result, the issuance, scope, validity, enforceability and commercial value of the patent rights is highly uncertain. Pending and future patent applications may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the same, especially in jurisdictions in which we hope to secure protection, may diminish the value of patents or narrow the scope of patent protection.  Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications, in the U.S.United States and other jurisdictions,jurisdictions. As a result, such discoveries are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we weremay not have been the first to make the inventions claimed in our patents or pending patent applications, or that we or weremay not have been the first to file for patent protection of such inventions.

Even if the patent applications we rely on are issued as patents, they may not issuebe issued in a form that will provide us with any meaningful protection, prevent competitors from competing with us, or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its scope, validity or enforceability, and patents may be challenged in the courts or patent offices in the U.S.United States and abroad.internationally. Such challenges may result in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop, or prevent us from stopping, others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.  As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours, or otherwise provide us with a competitive advantage.

While we are not currently engaged in any material intellectual property litigation, in the future we may commence lawsuits against others if we believe they have infringed our rights.  We cannot be assured that we wouldmay not be successful in any such litigation.  Our involvement in any intellectual property litigation could require the expenditure of substantial time and other resources, may

adversely affect the development of sales of our products or intellectual property, our capital resources, or may divert the efforts of our technical and management personnel, and could have a material adverse effect on our business, results of operations, and financial condition.

Filing, prosecuting and defending our patents throughout the world would be prohibitively expensive to us.expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection, to develop their own products, and may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as in the U.S.  TheseUnited States. Competitors' products may compete with our products in jurisdictions where we do not have any issued patents, and our intellectual property rights may not be effective or sufficient to prevent them from so competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries may not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of any patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce any patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

Some of our proprietary intellectual property is not protected by any patent, copyrightpatents or patent or copyright applications,copyrights, and, despite our precautions, it may be possible for third parties to obtain and use such intellectual property without authorization. We rely upon confidential proprietary information, including trade secrets, unpatented know-how, technology, software, and other proprietary information, to develop and maintain our competitive position. Any disclosure to, or misappropriation by, third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in the market. We seek to protect our confidential proprietary information, in part, by confidentiality agreements with our employees and our collaborators and consultants. We also have agreements with our employees and selected consultants that obligate them to assign their inventions to us.

These agreements are designed to protect our proprietary information; however, we cannot be certain that our trade secrets and other confidential information will notcould be disclosed or that competitors will notcould otherwise gain access to our trade secrets, or that technology relevant to our business will notcould be independently developed by a person that is not a party to such agreements. Furthermore, if the employees, consultants or collaborators that are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets through such breaches or violations. Further, our trade secrets could be disclosed, misappropriated or otherwise become known or be independently discovered by our competitors. In addition, intellectual property laws in foreign countries may not protect trade secrets and confidential information to the same extent as the laws of the U.S.United States. If we are unable to prevent disclosure of the intellectual property related to our technologies to third parties, we may not be able to establish or maintain a competitive advantage in our market, which would harm our ability to protect our rights and have a material adverse effect on our business.

Our commercial success depends upon our ability and the ability of our distributors, contract manufacturers, and suppliers to manufacture, market, and sell our products, and to use our proprietary technologies without infringing, misappropriating, or otherwise violating the proprietary rights or intellectual property of third parties. While we are not aware of any issued or pending patent applications that could restrict our ability to operate, we may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology. Third parties may assert infringement claims against us based on existing or future intellectual property rights. If we are found to infringe a third party's intellectual property rights, we may be temporarily or permanently prohibited from commercializing our products that are held to be infringing. We might, if possible, also be forced to redesign our products so that we no longer infringe the third partythird-party intellectual property rights, or we could be required to obtain a license from such third party to continue developing and marketing our products and technology. We may also elect to enter into such a license in order to settle pending or threatened litigation. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us, and we could require usbe required to pay significant royalties and other

fees. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations, which could materially harm our business.

Even if we are successful in defending against intellectual property claims, litigation or other legal proceedings relating to such claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially increasedecrease our operating lossesprofits and reduce our resources

To remain competitive in the market for oilfield combustion managementand other emissions control technologies, we must continue to develop and commercialize new products. If we are not able to develop commercially competitive products in a timely manner in response to industry demands, our business and revenues will be adversely affected. Our future ability to develop new products depends on our ability to:

We may encounter resource constraints or technical or other difficulties that could delay introduction of new products and services. Our competitors may introduce new products before we do and achieve a competitive advantage.

Additionally, the time and expense invested in product development may not result in commercial products or provide revenues. Our inability to enhance existing products in a timely manner or to develop and introduce new products that incorporate new technologies, conform to stringent regulatory standards and performance requirements, and achieve market acceptance in a timely manner, could negatively impact our competitive position. New product development or modification is costly, involves significant research, development, time and expense, and may not necessarily result in the successful commercialization of any new products. Moreover, we may experience operating losses after new products are introduced and commercialized because of high start-up costs, unexpected manufacturing costs or problems, or lack of demand.

New developments in technology may negatively affect the development or sale of some or all of our products or make our products obsolete. Our success depends upon our ability to design, develop and market new or modified combustion management technologies and related products.

Our development to date has largely depended, and in the future will continue to largely depend, on the efforts of our senior management. We currently do not have key-person insurance on any of our senior management team. Thus, the loss of any member of our senior management could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations, and financial condition.

Our ability to remain productive and profitable depends substantially on our ability to attract and retain skilled employees.  Our ability to scale our operations is in part, and at times, impacted bydepends on our ability to increase our labor force. The demand for skilled oilfield

employees is high and the supply is limited. As a result of the volatility of the oil fieldoilfield services and technology industry, our ability to offer competitive wages and retain skilled employees may be diminished.

A portion of our total compensation program for key personnel has historically included awards of options to buy our common stock or other equity-based awards. If the price of our common stock performs poorly, such performance may adversely affect our ability to retain or attract key personnel. In addition, if we are unable to continue to provide attractive equity compensation awards or other compensation incentives for any reason, we may be unable to retain and motivate existing personnel and recruit new personnel.

A significant percentageWe may not be able to expand our market share in our existing markets or successfully enter new or contiguous markets especially in light of our outstanding common stock is "restricted" and therefore subject to the resale restrictions set forth in Rule 144 of the rules and regulations promulgated by the SEC under the Securities Act of 1933.  These factorsindustry volatility. In addition, such expansion could adversely affect our profitability and results of operations. If we are unable to enter into new markets, our business could be materially and adversely affected.

The market price of our common stock has been volatile and fluctuates widely in price in response to various factors which are beyond our control. The price of our common stock is not necessarily indicative of our operating performance or long-term business prospects. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Factors such as the following could cause the market price of our common stock to fluctuate substantially:

The realization of any of these risks and other factors beyond our control could cause the market price of our common stock to decline significantly. In particular, the market price of our common stock may be influenced by variations in oil and gas prices, because demand for our products and services is closely related to those products.commodity prices. The stock market in general experiences, from time to time, extreme price and volume fluctuations. Periodic and/or continuous market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. Price volatility may be worse if the trading volume of our common stock is low.

If any significant number of our outstanding shares of our common stock are sold, such sales could have a depressive effect on the market price of our stock. We are unable to predict the effect, if any, that the sale of shares, or the availability of shares for future sale, will have on the market price of the shares prevailing from time to time. Sales of substantial amounts of shares in the public market, or the perception that such sales could occur, could depress prevailing market prices for the shares. Such sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price which we deem appropriate.

Although we believe our historical efforts have strengthened our internal control over financial reporting (and we concluded that our internal controls over financial statementsreporting were reliable, notwithstanding the material weakness we reported),effective as of December 31, 2021, we cannot be certain that our revised internal control practices will ensure that we will have or maintain adequate internal control over our financial reporting in future periods. Any failure to have or maintain such internal controls could adversely impact our ability to report our financial results accurately and on a timely basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations.

Our articles of incorporation authorize the issuance of up to 10,000,000 shares of "blank check"“blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board.Board of Directors. Our Board of Directors is empowered, without stockholder approval, to authorize the issuance of a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for theour Board of Directors to authorize preferred stock with voting or other rights or preferences that could impede the success of any attempt to effect a change in control of our company.Company. Any aspect of the foregoing, alone or together, could delay or prevent unsolicited takeovers and changes in control or changes in our management.

We have never declared or paid any cash dividends or distributions on our common stock. We currently intend to retain our future earnings to support operations and to finance expansion and, therefore, we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any payment of cash dividends in the future will be dependent on the amount of funds legally available, our earnings, financial condition, capital requirements, and other factors that our Board of Directors may deem relevant. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

In addition to the control share law, Nevada has a substantial ownership interestbusiness combination law which prohibits certain business combinations between Nevada corporations and “interested stockholders” for two years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s Board of Directors approves the combination in our common stockadvance. For purposes of Nevada law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the availabilitytwo previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s

assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders. The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of our common stock toCompany from doing so if it cannot obtain the investing public may be limited.

Our common stock is listed on The NASDAQthe Nasdaq Capital Market. There are a number of continued listing requirements that we must satisfy in order to maintain our listing on The NASDAQthe Nasdaq Capital Market. Although we intend to comply with all of the continued listing requirements, it is possible we may fail to do so. If we fail to maintain compliance with all applicable continued listing requirements for The NASDAQthe Nasdaq Capital Market and NASDAQ determinesthey determine to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, our ability to obtain financing, to repay any future debt we could incur, and fund our operations.

Not applicable.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in matters may arise from time to time that may harm our business. As of December 31, 2017,2021, Management is not aware of any pending legal, judicial or administrative proceedings to which the Company or any of its subsidiaries is a party or of which any properties of the Company or its subsidiaries is the subject that we believe could have a material impact on our operations or financial statements.

Not applicable.

The Company's common stock is traded on the NASDAQ Capital Market under the symbol "PFIE." As of March 6, 2018,7, 2022, there were approximately 9181 shareholders of record for our common stock. The number of record shareholders was determined from the records of our stock transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, registered clearing houses or agencies, banks, or other fiduciaries. We have never declared dividends and we have no intention of doing so in the foreseeable future.

The Company has not declared or paid any dividends in the past two years and does not intend to do so in the foreseeable future.

 

Total revenues increased 86%by 23% which was primarily driven by improved customer demand associated with modest recoveries from the COVID-19 pandemic and associated macro industry challenges. The average oil price in 2021 was $68.14 per barrel compared to $39.16 per barrel in 2020, representing an increase of 74%. The 2021 weekly average of the onshore rig count for North America was 595, up 18% from a weekly average of 505 rigs in 2020. Although oil prices have recovered from the historic lows of 2020, which were caused by a flood of supply from Russia and Saudi Arabia and a dramatic drop in global demand due to the hard workCOVID-19 pandemic, the operating environment in 2021 continued to be characterized by uncertainty surrounding economic recovery from the COVID-19 pandemic and geopolitical factors. This uncertainty continued to create strain in oil supply and demand dynamics. As a result of our salesthese extraordinary macro pressures and service teamsuncertainties, exploration and production companies remain cautious and have not invested in new production at the same pace as they did prior to capitalize on the rebound ofpandemic when oil prices were last at their current historic levels. Despite this ongoing challenges, we were able to increase revenue and increased capital spending from our customers. We are continuing to focus our resources in geographic areas that we believe have the greatest potential for improved revenues and return on investment.business activity year over year.

Total cost of goods sold increased, as expectedin large part, due to the increase in revenues. As a percentage of revenue, cost of goods sold decreased by 2%, which is largely attributableincreased during 2021 due to changes in product mix and improved inventory management.product related services as well as due to inflationary pressures for both direct and indirect costs. We continue to work with our suppliers in an effort to control our inventory costs which hasand limit the largest impact on margin.impacts of inflation. As a result of the aforementionedthese changes, total gross profit increased by $9,863,508 or 2%$1,874,814 during 2021 compared to 2020, but as a percentage of revenues, between the periods.total gross profit decreased due to factors described above.

General and administrative expenses increased by $1,605,684$892,374 or 16% between the periods,8% during 2021 compared to 2020 but decreased as compared with the 86% increase in revenues. The majoritya percentage of revenue because we were able to keep the increase in generalfixed costs lower than the growth in revenues during the same period. The increase in 2021 was driven primarily by employee costs as we unwound some of the significant, but temporary, cost reduction measures implemented in 2020 in response to the COVID-19 pandemic and administrative expenses was due to an expanding labor force required to meet the resulting oil market supply and demand dynamics. Increases also resulted from our customers.supply chain challenges and rising inflation.

Management is committed to maintaining strong liquidity in an effort to be conservative and be able to respond quickly to any unforeseen changes in the industry.industry or economic conditions. The Company currently has no long-term debt, and does not have any immediate plans that would require long-term financing. While Managementmanagement believes sources of financing are available if needed, we cannot be

We acquired land for a new office building and research and development facility in Canada in June of 2018. In addition,the first quarter of 2020, we do not have any material commitments for capital expenditures.completed the construction of this new building in Acheson, Canada. Excluding the cost of the land, the total cost of the building was approximately $4,600,000 USD. We completed the sale of the old office building in Canada in January 2021 and received overall cash proceeds from the sale of $1,154,714 CAD.

The global COVID-19 pandemic continued to impact our business in 2021 and as a result, we have remained focused on reinvesting in and building back our corporate structure as we continue to navigate the uncertainty caused by the pandemic and the resulting oil market supply and demand imbalance. The extent to which the global COVID-19 pandemic will continue to affect our liquidity position will depend on future developments, which are highly uncertain and cannot be predicted with confidence. As of December 31, 2021, we hold $17,461,762 of cash and investments that form our core excess liquidity which could be utilized, if required, due to an increase in employee options being exercised and repurchasing fewer shares of our own stock. As discussed in Note 3 to the financial statements, during the year the Company repurchased 2,448,425 shares of our common stock for a total price of $3,307,544. The net increase in cash was caused primarily by the aforementioned activities.issues described above.

We have not engaged in any off-balance sheet arrangements, nor do we plan to engage in any in the foreseeable future.