UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

(Mark One)

[x] ANNUAL☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 20152023

 

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission file number000-54617

 

US NUCLEAR CORP.

(Exact name of registrant as specified in its charter)

 

Delaware45-4535739

State or other jurisdiction of
Incorporation or organization

 __________________________________

(I.R.S. Employer
Identification No.)

 

c/o Robert I. Goldstein

7051 Eton Avenue

Canoga Park, CA 91303

(Address of principal executive offices)

 

(818) 883-7043

(Registrant’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act:

None.

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock, $0.0001 par value per share

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [_] No [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes  [_] No [X]

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [_]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [_]

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

 

(Check one):

Large accelerated filerAccelerated Filer [_]filer Accelerated Filer [_]
Non-accelerated Filer [_]filerSmaller Reporting Company [X]reporting company

(Do not check if a smaller reporting company.)

Emerging growth company 
 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If the securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ 

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [_]  No [X]☒ 

  

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant'sregistrants most recently completed second fiscal quarter. $248,490$3,093,191 as of June 30, 2015.2023.

 

The number of shares of the Registrant’s common stock outstanding as of April 5, 2016May 9, 2024, was 13,475,000.44,391,778. 

 

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Table of Contents

US NUCLEAR CORP.

2015 FORM 10-K

TABLE OF CONTENTS

 

TABLE OF CONTENTS

Page
PART I
  Page
 PART IItem 1.
Business1
Item 1.1A.BusinessRisk Factors46
Item 1A.1B.Risk FactorsUnresolved Staff Comments1118
Item 2.1C.PropertiesCybersecurity3218
Item 3.2.Legal ProceedingsProperties3218
Item 3.Legal Proceedings18
Item 4.Mine Safety Disclosures3218
 PART II
PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities3219
Item 6.Selected Financial Data[ReseRved]3621
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations3621
Item 7A.Quantitative and Qualitative Disclosures About Market Risk4125
Item 8.Financial Statements and Supplementary Data4125
Item 9.Changes In and Disagreements With Accountants on Accounting and Financial Disclosure4125
Item 9A.Controls and Procedures4225
Item 9B.Other Information4326
 PART IIIItem 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections26
PART III
Item 10.Directors, Executive Officers and Corporate Governance4327
Item 11.Executive Compensation4730
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters5032
Item 13.Certain Relationships and Related Transactions and Director Independence5233
Item 14.Principal Accountant Fees and Services53
 PART IV
Item 15.Exhibits, Financial Statement Schedules5533
  
 SIGNATURESPART IV
Item 15.56Exhibits, Financial Statement SchedulesF-1
SIGNATURES35

 

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PART I

 

Special Note Regarding Forward-Looking Statements

 

Information included or incorporated by reference in this Annual Report on Form 10-K contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements may contain the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, and are subject to numerous known and unknown risks and uncertainties. Additionally, statements relating to implementation of business strategy, future financial performance, acquisition strategies, capital raising transactions, performance of contractual obligations, and similar statements may contain forward-looking statements.  In evaluating such statements, prospective investors and shareholders should carefully review various risks and uncertainties identified in this Report, including the matters set forth under the captions “Risk Factors” and in the Company’s other SEC filings. These risks and uncertainties could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements. The Company disclaims any obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

 

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risk Factors Related to Our Business” below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room, 100 F. Street, NE, Washington, D.C. 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

 

We disclaim any obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

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ITEM 1. BUSINESS

 

Corporate History

 

US Nuclear Corp f/k/a APEX 3 Inc., was incorporated in the State of Delaware on February 14, 2012, and has since amended its name to US Nuclear Corp., (“US Nuclear”) on May 4, 2012 with the State of Delaware. US Nuclear Corp was formed as a vehicle to pursue a business combination with an operating company that would have perceived benefits of becoming a publicly traded corporation. Optron Scientific was incorporated in the State of California in 1971 and is the operating company of US Nuclear Corp with two divisions, Optron Scientific Company, Inc., doing business as (“DBA”) Technical Associates and Overhoff Technology Corporation, both of which design, manufacture and market detection and monitor systems that are used to detect and identify radioactive material, leaks, waste, contamination, biohazards, nuclear material, as well as products used in airports, cargo, screening as ports and borders, government buildings, hospitals, and other critical infrastructure, as well as by the military and emergency responder services The company uses a wide range of technologies including x-ray, trace detection, millimeter-wave, infra-red, tritium detection, and diagnostics in its product applications.

1

US Nuclear Corp is a smaller reporting company under SEC Rule 405 because it is currently not trading, has a public float of zeroless than $250 million and has annual revenues of less than $50$100 million during the most recently completed fiscal year for which audited financial statements are available.  As a smaller reporting company, pursuant to Rule 8-01 of Regulation S-X, the Company is only required to produce financial statements as follows: (a) audited balance sheet as of the end of each of the most recent two fiscal years, or as of a date within 135 days if the issuer has existed for a period of less than one fiscal year, (b) audited statements of income, cash flows and changes in stockholders'stockholders’ equity for each of the two fiscal years preceding the date of the most recent audited balance sheet (or such shorter period as the registrant has been in business), and (c) interim reviewed financial statements for the current period if the filing is more than 135 days after the end of your fiscal year.  Any and all amendments shall include updated interim or audited financial statements if the financial statements in the prior filing are more than 135 days old.

 

On October 15, 2013, US Nuclear Corp f/k/a APEX 3 Inc., a Delaware corporation (the "Company"“Company”), entered into an Agreement and Plan of Merger between the Company, Robert I. Goldstein, US Nuclear Acquisition Corp ("(“Merger Sub"Sub”), a California corporation and Optron Scientific Company, Inc. dba Technical Associates, ("(“Optron Scientific"Scientific”) a California corporation and the parent company of Overhoff Technology Corp. The Agreement and Plan of Merger provided for the acquisition by the Company of all of the outstanding shares of Optron Scientific through a reverse merger of Merger Sub into Optron Scientific, the surviving corporation. We have filed the Agreement and Plan of Merger as Exhibits 3.4 and 2.1 with this statement and with the State of California.

As part of the Agreement and Plan of Merger with Optron Scientific the parties agreed to an exchange of shares, in which all of the 98,372 issued and outstanding shares of Optron Scientific were exchanged for 9,150,000 shares of the Company.

 

Prior to the share exchange, Mr. Goldstein was the sole owner of 98,372 shares of Optron Scientific Company, Inc., which represented all of the outstanding shares of Optron Scientific Company, Inc. Mr. Goldstein was the owner of 9,150,000 shares of US Nuclear Corp prior to the merger, and 9,150,000 shares of US Nuclear Corp were issued to him as a result of the merger in exchange for 98,372 shares of Optron Scientific Company, Inc.

 

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In conjunction with the Agreement and Plan of Merger, US Nuclear Corp, Optron Scientific and Robert I. Goldstein entered into a Cancellation Agreement which provided for the cancellation of 9,150,000 shares of US Nuclear Corp held by Robert I. Goldstein, in consideration of his entering into the Agreement and Plan of Merger, which provided for his right to acquire 9,150,000 shares of US Nuclear Corp after it had the value of the ownership of Optron Scientific. As part of the consideration for the merger transaction, the share value of Mr. Goldstein'sGoldstein’s shares of the Company prior to the merger was estimated at the par value of the shares, or 9,150,000 times the par value of .0001 per share. After the merger, the newly issued 9,150,000 shares of the Company held by Mr. Goldstein had a value of 85.51 percent of the total value of the outstanding stock of the Company after its acquisition of all of the stock of Optron Scientific. The Agreement and Plan of Merger was signed by Mr. Goldstein in his individual capacity and as President and Chief Executive Officer of the Company and as President and Chief Executive Officer of Optron Scientific, and of Merger Sub. The Cancellation Agreement was signed by Mr. Goldstein in his individual capacity and as President, and Chief Executive Officer of the Company and of Optron Scientific. The Corporate Secretary of each of the companies, Darian B. Andersen, also signed on behalf of each of the companies. The remaining 1,550,000 outstanding shares of US Nuclear Corp, which are held by Richard Chiang, were unaffected by the Cancellation Agreement. 

 

2

Following the merger, we began to provide a full line of radiation detection equipment and services to clientsclients’ industries that range from nuclear reactor plants, universities, local and state hospitals, government agencies, and emergency medical technicians or EMT/first responders. The Company’s nuclear radiation safety detection equipment company has its roots from the famous Manhattan Project of the 1940s. In 1971, Allen Goldstein, the father to our current President and CEO, Robert Goldstein, acquired the assets of Technical Associates and incorporated the company. The Company designed and built the first industrial grade radiation monitors and continues to innovate its legacy with new product engineering for radiation measurement and safety instruments. The Company designs and manufactures nuclear radiation detection and safety equipment, survey meters, air and water monitors, port security equipment and tritium air monitors. The Company’s customers are diverse groups such as Homeland Security, Lawrence Livermore Labs, Los Alamos National Labs, Department of Defense, FBI, CIA, US Navy, Chevron Corporation, Bechtel Corporation, Biotechnology Laboratories, Hospitals, Universities, and Civil Emergency Management departments such as Fire, Paramedics and Law Enforcement. The Company is headquartered in Canoga Park, California and the Company can be accessed through its websites on the Internet at usnuclearcorp.com, tech-associates.com and overhoff.com.

 

The Company’s twofour divisions consisting of Optron Scientific Company Inc., DBA Technical Associates, and Overhoff Technology Corporation, Electronic Control Concepts, and Cali From Above, offer over 200 products that service and address the nuclear power industry, domestically and internationally. Technical Associates specializes in the design and manufacture of radiation detection equipment monitors and hand held devices, whilehand-held devices. Overhoff Technology Corporation specializes in the design and manufacture of tritium air monitors and water monitors. Electronic Control Concepts specializes in test and maintenance meters for x-ray machines for both medical and industrial users. Cali From Above offers specialized inspection services from height and difficult-to-access locations with the use of unmanned aerial vehicles (UAVs).

 

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Technology and Products

 

The Company designs and develops both technologies in-house by its CEO, Robert I. Goldstein as well as offers products from other manufacturers. Mr. Goldstein’s extensive experience of over forty years in the field of nuclear radiation detection has allowed the Company to achieve significant recognition that has been approved by US Federal standards set by the Environmental Protection Agency (EPA), Food and Drug Administration (FDA) and the Nuclear Regulatory Commission (NRC). The Company has complete ownership of all of its technology and there are no licenses held by any outside party. No persons, company, vendor, distributor or contractor holds any title or claim to any of the Company’s work or technology. The Company believes that its technology and business is defensible due to the fact that the barriers of entry are high and technically complex. The Company has sought out niche markets in its business by becoming a leading category player in devices such as Tritium equipment. The Company’s products consist of radiation water monitors, tritium monitors, air and water monitors, nano-second x-ray monitors, and vehicle, personnel, exit and room monitors. The Company also offers handheld survey meters/dosimeters, and port security equipment, along with supporting software and services.

 

Radiation Water Monitors

 

US Nuclear Corp’s radiation water monitors allow detection of radioactive materials in drinking water, ground water, rainfall, rivers, and lakes. In order to detect radioactive materials, the emitted radiation must travel from the radiation emitter to the detector. Alpha, Beta, Gamma, and Neutron radiation moves well through air, but poorly through water. The complexity of detecting radiation in water and developing an efficient monitor has given the Company’s monitors a reasonable edge against competitors, and for this reason, has limited competition in the water monitor business. The Company has invested more than ten years developing highly sensitive detectors for this market, giving it a clear advantage over competitors. The Company’s radiation water monitors are used to check for radioactive materials being released as liquid effluent in drain pipes by universities, hospitals, pharmaceutical companies, oil and gas extraction facilities, industrial chemical plants, and nuclear reactor plants.

 

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Tritium Monitors

 

US Nuclear Corp is one of very few companies that currently operate within the tritium space. The Company’s Overhoff Technology Corp unit is a leading manufacturer of tritium detection and monitors. The demand for tritium detection and monitors are steadily increasing as countries develop solutions to their energy needs.  In addition to CANDU reactors (Canada Deuterium Uranium), the next generation of nuclear reactors called Molten Salt Reactors, (MSR) and Liquid-Fluoride Thorium Reactors (LFTR) utilize fuels other than traditional uranium and plutonium sources. Thorium, which is more significantly abundant than uranium, is very difficult to use to create nuclear weapons, is favored by many governments, and as a source of conventional energy it has been proven to be highly effective. By way of energy production, MSR and LFTRs produce high amounts of tritium which need to be constantly monitored for detection. Additionally, the waste products of LFTR reactors are less hazardous than the current light-water uranium-plutonium reactors, and thus, LFTR reactors provide higher level of safety and security against terrorist threats. The Company expects that a significant portion of its future sales and business strategy is tied to the growth of MSR and LFTRs, as well as from CANDU reactors.

 

3

Tritium is produced naturally in the upper atmosphere when cosmic rays strike nitrogen molecules in the air. More commonly, tritium is produced during nuclear weapons explosions, and as a byproduct in reactors producing electricity.  Generally, tritium has several important uses; its most significant contribution is its use as a component in the triggering mechanism in thermonuclear weapons. Very large quantities of required for the maintenance of nuclear weapons capabilities. Tritium is also produced commercially in nuclear reactors, as well as used in various self-luminescent devices, such as exit signs in buildings, aircraft dials, gauges, luminous paints, and wristwatches. In the mid-1950s and early 1960s, tritium was widely dispersed during above-ground testing of nuclear weapons. Today, sources of tritium come from commercial nuclear reactors, research reactors, and government weapons production plants. Tritium may also be released as steam from these facilities or may leak into the underlying soil and ground water. Additionally, self-luminescent devices illegally disposed in municipal landfills come into contact with water which pass through water ways, carrying dangerous levels of tritium. Tritium holds a very dangerous health risk and high levels of exposure to tritium increases risk of developing cancer. To combat tritium leaks and to maintain acceptable levels, the Company has developed several tritium monitors to gauge tritium in water and in the air. 

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Alpha, Beta, Gamma and Tritium Monitors

 

US Nuclear Corp’s radiation water monitors allow detection of radioactive materials in drinking water, ground water, rainfall, rivers, and lakes. In order to detect radioactive materials, the emitted radiation must travel from the radiation emitter to the detector. Alpha, Beta, Gamma, and Neutron radiation moves well through air, but poorly through water. The complexity of detecting radiation in water and developing an efficient monitor has given the Company’s monitors a reasonable edge against competitors, and for this reason, has limited competition in the water monitor business. The Company has invested more than ten years developing highly sensitive detectors for this market, giving it a clear advantage over competitors. The Company’s radiation water monitors are used to check for radioactive materials being released as liquid effluent in drain pipes by universities, hospitals, pharmaceutical companies, oil and gas extraction facilities, industrial chemical plants, and nuclear reactor plants.

 

For the past 20 years, Overhoff Technology has been devoted exclusively to the design, manufacturing and servicing of Tritium monitors. OveroffOverhoff Technology has leading control over market share in the Tritium monitor space as the top maker of Tritium monitors. Tritium monitors are a highly delicate process and are particularly dependent on the selection of the finest materials such as Teflon for low leakage insulators and nafion membranes for separation of noble gas from Tritium. The Company’s Overhoff DC amplifiers called “electrometers” are stable with the ability to register small currents down to the femto-ampere level, 10-13 to 10-15ampre range. The Overhoff electrometer also has the unique ability to reject false counts from Radon gas. Because Tritium is a radioactive material, the Nuclear Regulatory Commission (“NRC”) regulations and state health agencies require Tritium to be measured at every nuclear power plant, all national laboratories, in the nuclear powerednuclear-powered Navies of the United States, France and the United Kingdom, at weapons facilities, at pharmaceutical and pesticide research facilities, and at Fusion Power research sites.

 

DroneRAD Aerial Radiation Detection

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US Nuclear Corp has partnered with FlyCam UAV (a drone manufacturer). The two companies have married their two technologies with the NEO, an all-weather UAV octocopter capable of carrying a number of radiation and chemical detection sensors. With the advent of merging FlyCam UAV’s NEO and US Nuclear Corp sensor technology aerial radiation and chemical detection is now a reality. The DroneSensor system (the first of its kind) uses state-of-the-art industrial grade drones carrying radiation & chemical sensors. Wireless transmission to ground station provides real-time data. Having these UAV mounted sensors quickly and efficiently surveying large areas for contamination eliminates risk to human life.

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4

Nano-Second X-Ray Monitors

The Company has introduced a hand held TBM-IC-PLUSE-X survey meter for the US Navy. These new meters protect sailors and the general public from the new Nano-Second X-Ray machines now being deployed to check for welding and corrosion flaws in military hardware from fighter jets to battle ships.


Air and Water Monitors

The Company’s Overhoff Air Monitors come in both hand-held portables and mid-to large-sized air and stack monitors. These are classified as Dual Ion Chamber style detectors or Dual Proportional Detectors. The sample flows into one chamber where ionization current is measured, and at the same time a sealed background detector of the same volume measures the ionization current due to any external gamma emitters plus the addition of background from radioactive minerals in the soil with cosmic rays. The current from the background chamber is subtracted from the current in the main sample chamber to give the net tritium level without distortion from radon or gamma in the background. In nuclear power plants, radioactive noble gases are also in the air stream in small or large quantities. Overhoff combats this problem using Dow Chemical Nafion® tubing which physically separates the noble gases from the tritium oxide prior to measurement. The Company is currently expecting a large number of its users and larger numbers of its competitor’s customers will need to replace or supplement their current air and stack monitors to combat the two biggest pollution nuclides now coming out of nuclear power plants, tritium and C-14. As of today, only US Nuclear Corp offers these full-service monitors.

 

The Company’s Overhoff Air Monitors come in both hand-held portables and mid-to large-sized air and stack monitors. These are classified as Dual Ion Chamber style detectors or Dual Proportional Detectors. The sample flows into one chamber where ionization current is measured, and at the same time a sealed background detector of the same volume measures the ionization current due to any external gamma emitters plus the addition of background from radioactive minerals in the soil with cosmic rays. The current from the background chamber is subtracted from the current in the main sample chamber to give the net tritium level without distortion from radon or gamma in the background. In nuclear power plants, radioactive noble gases are also in the air stream in small or large quantities. Overhoff combats this problem using Dow Chemical Nafion® tubing which physically separates the noble gases from the tritium oxide prior to measurement. The Company is currently expecting a large number of its users and larger numbers of its competitor’s customers will need to replace or supplement their current air and stack monitors to combat the two biggest pollution nuclides now coming out of nuclear power plants, tritium and C-14. As of today, only US Nuclear Corp offers these full service monitors.

Vehicle Monitors, Personnel Monitors, Exit Monitors and Room Monitors

 

The Company’s suite of radiation monitors can be used in various scenarios where humans may come into contact with radiation contamination. The Company’s Vehicle Monitors, Personnel Monitors, Exit Monitors and Room Monitors are effective tools in detection of radiation in hospitals where radioactivity is used in many departments such as nuclear medicine, oncology, blood labs, and imaging. Since radiation is also used in diagnosing and treating cancer, and since some cancers can develop in any organ, each department in a hospital becomes involved, from ophthalmology to thoracic medicine. Additionally, the Company’s monitors are used to check hospital laundry to detect any radiation on clothes as well as in trash bins before they are picked up by the applicable waste management team. Lastly, the Company’s monitors can be placed in the entrance of hospitals in case there is an incident at a nearby nuclear power plant. These monitors are the first line of defense against further contamination, by providing early warning detection; doctors can provide treatment without placing other patients and staff in direct contact with patients who are contaminated with radiation.

 

Radon Air Monitors and Radon Switch Products

 

The Company produces a full line of radon air monitors and switches that are used to determine the radon content in the air in basements, mills, mines, buildings, or anywhere that radon concentration is a concern. The radon switch products activate and controls radon mitigation fans. These switches have a built-in computer storage with data storage. The Company also makes a radon tritium monitor that is a portable instrument used for detection and measurement of airborne Vadose zone, between the top of the ground surface to the water table.

 

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Handheld Survey Meters and Personal Dosimeters, Pocket Micro-R Meters

 

The Company’s survey meters are light-weight, hand-held radiation detectors. They function as general purposegeneral-purpose radiation survey meters, but also serve as special purpose survey meters. For example, the Company’s radon monitors are used in mines where workers are at risk for breathing radon gas along with air. The Company’s surface monitors are used in hospitals, research labs, even in high school chemistry and physics labs to check for radioactive contamination on lab benches. Friskers are used to check if worker’s hands or shoe bottoms have picked up any radiation contamination and the Company’s Gamma survey meter check packages at post offices or airports for radiation, along with scrap metals at collection points and again before it is accepted for processing.

Port Security Equipment

 

Due to increased terror threats from IED (Improvised Explosive Devices), dirty bombs and potential radioactive materials following 9/11 at shipping ports, we began utilizing passive detectors to review radiation emanating from inside containers. While other port security scanners generally use radioactive materials or x-ray generating machines to check everything from shipping containers, Federal Express, USPS (United States Postal Service) packages, and luggage for contraband, our scanner solutions do not use radiation, allowing for safe usage by investigators. We were approached by the FDA after the events of 9/11, and we designed our P-8Neon Quick-Scan X-ray detector to provide complete scanning without releasing any harmful radiation in the process. Our RAD-CANSCAN machines can measure which shipping containers hold radioactive materials by mapping inside the container so that TSA personnel will know the results without having to open each container. Additionally, our TBM-6SPE is a multi-detector system that lets an investigator check specifically for each of the four main emissions of radiation, Alpha, Beta, Gamma and Neutrons.

Due to increased terror threats from IED (Improvised Explosive Devices), dirty bombs and potential radioactive materials following 9/11 at shipping ports, we began utilizing passive detectors to review radiation emanating from inside containers. While other port security scanners generally use radioactive materials or x-ray generating machines to check everything from shipping containers, Federal Express, USPS (United States Postal Service) packages, and luggage for contraband, our scanner solutions do not use radiation, allowing for safe usage by investigators. We were approached by the FDA after the events of 9/11, and we designed our P-8Neon Quick-Scan X-ray detector to provide complete scanning without releasing any harmful radiation in the process. Our RAD-CANSCAN machines can measure which shipping containers hold radioactive materials by mapping inside the container so that TSA personnel will know the results without having to open each container. Additionally, our TBM-6SPE is a multi-detector system that lets an investigator check specifically for each of the four main emissions of radiation, Alpha, Beta, Gamma and Neutrons.

5

Software

 

The Company’s Overhoff Overview software program provides centralized radiation and environmental monitoring for entire facilities within one building or several square miles allowing monitoring of a nuclear power plant or subway station. Overview accepts data from networked radiation detectors, environmental monitors and webcams, and allows the user to view and generate reports on the data, as well as track maintenance due on instruments. Additionally, Overview lets the user see real-time monitoring for differential pressure on containment boxes or rooms. Our software measures gamma and neutron radiation levels, airborne radioactivity levels, temperature and humidity in the facility, status of security doors, wind speed and direction, and barometric pressure.

 

Risk Factors

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(b) Item 1A

 

Risk Factors

Risks Related to Our Business and Industry

 

Our business is intensely competitive and our revenues are unpredictable as a small company.

 

We compete with a formidable group of competitors in our business, many of which have greater resources and capabilities than our company. There are numerous companies that have established businesses and command larger market share such as Thermo Fisher Scientific, Canberra Industries, and Mirion Technologies, Ludlum Measurements, Smiths Detection and Lab Impex Systems Ltd. Many of these companies have products and services that compete directly with ours and many of them are supported with larger marketing budgets and sales staff that can provide stronger sales coverage and support to customers than our capabilities. Furthermore, competitors may have technological advantages and may be able to implement new technologies more rapidly than our Company. Additionally, to the extent of our bookings, we cannot accurately predict to a large degree of certainty what annual revenues and income outlook may be. Due to our relatively small size, many factors may contribute to differences in the future and therefore cannot be assured in any manner. The market for nuclear radiation safety equipment is dependent upon a number of factors beyond the Company’s control, which cannot be accurately predicted. Some of these factors include pricing, competition from new entrants, newer technologies, market regulation and government policy, as well as overall market demand. Other factors include fossil fuel energy prices that may have an effect upon nuclear energy demand. Lower oil, natural gas, and coal prices may result in less favorable decisions to pursue nuclear energy as a source of energy.  

 

We rely heavily on our international customers for business and expect to continue to rely on international customers in the future.

 

Our international revenues were 54%11.43% of our total revenue in 2015. We expect this to continue to increase as we continue2023. This was a decrease of 15.14% from 2022 and was a result of management’s inability to field new orders and inquires and engage new customers overseas.overseas due to political and economic reasons. We believe that South Korea and China will likely be larger contributors to revenue within the next few years. While we maintain steady growth domestically, the international side of our business may be a larger component as nuclear technology and rapid development for clean energy grows abroad. There can be no assurances as to our growth projections and our risk profile as we depend upon increased foreign customers for business.

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Government Regulation

 

Although the sales of our equipment are not generally regulated by any local or federal government agency, the nuclear power industry itself is highly regulated by the Nuclear Regulatory Commission. As an independent agency of the United States government, the NRC is responsible for overseeing reactor safety, security, reactor licensing, renewal, radioactive material safety, and spent fuel disposal. The effects of the NRC’s policies therefore have an effect on our business. The impact of any negative decision in the nuclear power industry will ultimately affect us. We may also be affected by foreign government policy and regulation not covered by the NRC.

 

Nuclear Power, Fossil Fuel and Renewal Energy

 

While the conventional Fission based nuclear power industry is a key component in the context of energy supply in the world today there are other competing energy sources that carry less potential risk hazards. Competing energy sources such as fossil fuels, solar, wind and water are strong threats to nuclear power. Each one has its benefits and conversely a negative side. The current landscape of nuclear power according to the Nuclear Regulatory Commission, or NRC, states that as of May 2014,2023, there were 3032 countries worldwide operating 435436 nuclear reactors in operation in the world, with 7257 new reactors under construction in 1511 countries. Within the United States, there are 10093 nuclear power plants providing 20%19% of the country’s total electric energy generation. Additionally, 3128 of the 50 US states generate electricity from nuclear power plants, and four states, New Jersey,Hampshire, South Carolina, Connecticut, and VermontIllinois rely on nuclear power for more than 50 percent of their electricity.

The United States produced approximately 27%30% of the world’s gross nuclear-generated electricity in 20102023 with France at 17%18%, China 16%, Japan 12%,9% Russia 6%, Germany 5%8%, South Korea 5%7%, Ukraine 3%, Canada 3%, Sweden 2%, Spain 2%, the United Kingdom 3% and the rest of the world at 15%11%. The growth in newHowever, only two conventional nuclear power plantplants were under construction in 2023, the United States has been slower dueVogtle Plants, in eastern Georgia. As of 2023, about 30 countries are considering, planning, or starting nuclear power programs. These range from sophisticated economies to issues relateddeveloping nations. Bangladesh, Egypt and Turkey are all constructing their first nuclear power plants. In July 2022, the European Parliament endorsed labeling all nuclear energy projects “green”, allowing them access to domestic policyloans and subsidies. In the effectscontext of the Fukushima Dai-ichiemissions, nuclear plant accident, foreign countries such as Russia have planspower is considered to build 26 new plants by 2020.be green and clean. It produces zero carbon emissions and does not produce other noxious greenhouse gases. It is difficult to predict if these plans domestically and internationally will materialize or be postponed indefinitely ifwere negative market forces to develop.

 

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Nuclear Fusion Power Research and Prototypes

While it will be some years before commercial fusion power plants will be supplying electricity, already in 2023, the US Department of energy (DOE) lists 124 active fusion power laboratories working to make energy by fusing Tritium and Deuterium, resulting a growing market for Tritium detection equipment.

Opponents to Nuclear Energy are formidable due to concerns over safety.

 

Maintaining the demand for our products and future growth in demand will depend in part upon continued acceptance of nuclear technology as a means of generating electricity. In many cases, countries have embraced nuclear technology because alternate means of energy have either been at a high cost with heavy pollution, or other means have not been practical. However, incidents involving nuclear energy production, such as overheating reactors, radiation leaks and reactor melt-downs, can cause a significant decrease in public acceptance of nuclear technology. Events at the Fukushima Daiichi nuclear complex in Japan on March 11, 2011 may have adverse long termlong-term effects in some countries decision to either continue using nuclear power or suspend its nuclear power program. While the long termlong-term impact is unclear, several countries have suspended operations at existing nuclear power plants. Specifically, on May 30, 2011, Germany announced that in addition to the permanent closure of eight reactors an additional six reactors will be taken off-line by 2021 and that all remaining reactorswith only three nuclear power plants left with a license to be shut-down by 2022.operate at full capacity, the nuclear phase out in Germany is almost complete. Switzerland has made a policy decision to phase out of their 5 reactors by 2034. Italy, while not having any operating reactors, has implemented a moratorium on nuclear power. The ultimate results of these safety reviews and/or public resistance to nuclear technology may lead to suspension or cancellation of permitting and development activities, license extensions of existing nuclear facilities, and possibly even the closure of operating nuclear facilities by one or more countries. Lack of public acceptance of nuclear technology would adversely affect the demand for nuclear power and therefore demand for radiation detection equipment. 

 

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Continued growth of CANDU reactors and rapid development of next generation Molten Salt (MSR) and Liquid-Fluoride Thorium Reactors (LFTR).

 

The Company relies on continued growth and orders from CANDU reactors (Canada Deuterium Uranium), and rapid development of the next generation of nuclear reactors called Molten Salt Reactors, (MSR) and Liquid-Fluoride Thorium Reactors (LFTR), for its tritium-based equipment. MSR and LFTR are new types of reactors that utilize thorium as a fuel rather than traditional uranium or plutonium. Thorium is a more abundant element than uranium. Many countries with heavy energy needs such as China have begun to adopt MSR and LFTR programs. However, the numbers of these types of reactors are still small in numbers and there can be no assurances that they will ever reach large numbers capable of sustaining rapid growth and development for nuclear-radiation safety products such as our tritium equipment. If CANDU reactors experience adverse events such as long termlong-term inactivity due to political or environmental concerns, or economic issues, and if MSR and LFTR reactors fail to develop beyond its current growth forecasts worldwide, the Company will experience lower demand for its products which would have an adverse effect on the Company’s sales and profitability.

 

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Failure to make accretive acquisitions and successfully integrate them could adversely affect our future financial results.

 

As part of our growth strategy, we plan to seek, when management deems advantageous to the Company, to acquire complementary (including competitive) businesses, facilities or technologies and enter into joint ventures.  Our goal is to make such acquisitions, integrate these acquired assets into our operations and reduce operating expenses.  The process of integrating these acquired assets into our operations may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for the ongoing development of our business.  We cannot assure you that the anticipated benefits of any acquisitions will be realized.  In addition, future acquisitions by us could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which can materially and adversely affect our operating results and financial position.  Acquisitions also involve other risks, including entering geographic markets in which we have no or limited prior experience and the potential loss of key employees.

 

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We have filed a provisional patent for our product based on our tritium products but hold no current patents on our products, and our business employs proprietary technology and information which may be difficult to protect and may infringe on the intellectual property rights of third parties.

 

In general, we rely primarily on a combination of trade secrets, copyright and trademark laws, and confidentiality procedures to protect our technology. Due to the technological change that characterizes our business, we believe that the improvement of existing products, reliance upon trade secrets and unpatented proprietary know-how and the development of new products are generally as important as patent protection in establishing and maintaining a competitive advantage.

 

We have currently filed a provisional utility-type patent on our tritium products to protect our intellectual property, but currently rely on trade secrets, proprietary know-how and technology that we seek to protect, in part, by confidentiality agreements with prospective joint venture partners, employees and consultants.  We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. Other than the provisional patent, we currently do not hold patents from the United States Patent and Trademark Office on any of our products we manufacture. Our success depends, in part, on our ability to keep competitors from reverse engineering our products, maintain trade secrecy and operate without infringing on the proprietary rights of third parties.  We cannot assure you that the patents of others will not have an adverse effect on our ability to conduct our business, that any of our trade secrets and applications will be protected, that we will develop additional proprietary technology that is defensible against theft or will provide us with competitive advantages or will not be challenged by third parties.  Further, we cannot assure you that others will not independently develop similar or superior technologies, duplicate elements of our technology or design around it.

 

It is possible that we may need to acquire licenses to, or to contest the validity of, issued or pending patents or claims of third parties.  We cannot assure you that any license acquired under such patents would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest.  In addition, we could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party’s patents or in defending the validity or enforceability of any patents we may seek in the future, or in bringing patent infringement suits against other parties.

 

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In December, 2013, we were granted a registered trademark of the US Nuclear Corp name and logo from the United States Patent and Trademark Office and consider it important to the protection of our US Nuclear Corp brands. We have not been, nor are we currently involved in or aware of any litigation regarding any of our intellectual property.

 

Our failure to obtain capital may significantly restrict our proposed operations.

 

We will need to raise more capital to expand our business. It is anticipated that we will require an additional capital raise of $5 million dollars over the next twelve months to fund our business plans. Future sources of capital may not be available to us when we need it or may be available only on unacceptable terms. 

 

We are subject to the risk that certain key personnel, including key employees named below, on whom we depend, in part, for our operations, will cease to be involved with us.  The loss of any these individuals would adversely affect our financial condition and the results of our operations.

 

We are dependent on the experience, knowledge, skill and expertise of our President and CEO Robert I. Goldstein. We are also in large part dependent on current CFO, and Secretary Rachel Boulds.Michael Hastings. The loss of any of the key personnel listed above could materially and adversely affect our future business efforts. Our success depends in substantial part upon the services, efforts and abilities of Robert I. Goldstein, our Chairman and Chief Executive Officer, due to his experience, history and knowledge of the nuclear radiation industry and his overall insight into our business direction. The loss or our failure to retain Mr. Goldstein, or to attract and retain additional qualified personnel, could adversely affect our operations.  We do not currently carry key-man life insurance on Mr. Goldstein or any of our officers and have no present plans to obtain this insurance.  See “Management.” 

 

The loss of any of our executive officers could adversely affect our business.

 

We depend to a large extent on the efforts and continued employment of our executive officers, oneofficers. The loss of these officers, Rachel Boulds maintains employment at other companies, and her other responsibilitiesany executive officer could take precedence over her duties to us. The time Ms. Boulds plans to devote toadversely disrupt our business will primarily be based upon the financial accounting duties as CFO, and Secretary. 

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Competition from other radiation detection or related companies could result in a decrease of our business and a decrease in our financial performance.

 

We operate in thea highly competitive industry. Many of our current and potential competitors, including larger multinational companies, domestic manufacturing companies with multiple product lines in radiation detection products have existed longer and have larger customer bases, greater brand recognition and significantly greater financial, marketing, personnel, technical and other resources than US Nuclear Corp. In addition, many of these competitors may be able to devote significantly greater resources to:

 

· research and development of new products

research and development of new products

 

· attracting and retaining key employees;

attracting and retaining key employees;

 

· maintaining a large budget for marketing and promotional expenses

maintaining a large budget for marketing and promotional expenses

 

providing more favorable credit terms to suppliers and channel distributors

· providing more favorable credit terms to suppliers and channel distributors

 

The relative lack of public company experience of our management team may put us at a competitive disadvantage.

As a company with a class of securities registered under the Exchange Act, we are subject to reporting and other legal, accounting, corporate governance, and regulatory requirements imposed by the Exchange Act and rules and regulations promulgated under the Exchange Act.  Our Chairman and CEO lacks public company experience which could impair our ability to comply with these legal, accounting, and regulatory requirements.  Such responsibilities include complying with Federal securities laws and making required disclosures on a timely basis.  Our senior management may not be able to implement and effect programs and policies in an effective and timely manner that adequately responds to such increased legal and regulatory compliance and reporting requirements. Our failure to do so could lead to the imposition of fines and penalties and further result in the deterioration of our business. 

Regulations, including those contained in and issued under the Sarbanes-Oxley Act of 2002 (“SOX”) and the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), increase the cost of doing business and may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to obtain or retain listing of our Common Stock.

 

We are a public company.  The current regulatory climate for public companies, even small and emerging growthsmaller reporting companies such as ours, may make it difficult or prohibitively expensive to attract and retain qualified officers, directors and members of board committees required to provide for our effective management in compliance with the rules and regulations which govern publicly-held companies, including, but not limited to, certifications from executive officers and requirements for financial experts on boards of directors. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting these roles.  For example, the enactment of the Sarbanes-Oxley Act of 2002 has resulted in the issuance of a series of new rules and regulations and the strengthening of existing rules and regulations by the SEC.  Further, recent and proposed regulations under Dodd-Frank heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters.  We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, the management of our business could be adversely affected.

 

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Our internal controls over financial reporting may not be effective, and our independent auditors may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business.   

We are subject to various SEC reporting and other regulatory requirements. We have incurred and will continue to incur expenses and, to a lesser extent, diversion of our management’s time in our efforts to comply with SOX Section 404 regarding internal controls over financial reporting.  Our management’s evaluation over our internal controls over financial reporting may determine that material weaknesses in our internal control exist.  If, in the future, management identifies material weaknesses, or our external auditors are unable to attest that our management’s report is fairly stated or to express an opinion on the effectiveness of our internal controls, this could result in a loss of investor confidence in our financial reports, have an adverse effect on our stock price, and subject us to sanctions or investigation by regulatory authorities. 

Limitations on director and officer liability and our indemnification of our officers and directors may discourage stockholders from bringing suit against a director.  

 

Our Certificate of Incorporation and By-Laws provide, with certain exceptions as permitted by Delaware corporation law, that a director or officer shall not be personally liable to us or our stockholders for breach of fiduciary duty as a director, except for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or unlawful payments of dividends. These provisions may discourage stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on our behalf against a director. In addition, our Certificate of Incorporation and By-Laws provide for mandatory indemnification of directors and officers to the fullest extent permitted by governing state law.   

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We may incur a variety of costs to engage in future acquisitions of companies, products or technologies, to grow our business, to expand into new markets, or to provide new services.  As such, the anticipated benefits of those acquisitions may never be realized.

 

It is management’s intention to acquire other businesses to grow our customer base, to expand into new markets, and to provide new product lines.  We may make acquisitions of, or significant investments in, complementary companies, products or technologies, although no additional material acquisitions or investments are currently pending.  Acquisitions may be accompanied by risks such as: 

difficulties in assimilating the operations and employees of acquired companies;

 

diversion of our management’s attention from ongoing business concerns;
difficulties in assimilating the operations and employees of acquired companies;

 

our potential inability to maximize our financial and strategic position through the successful incorporation of acquired technology and rights into our products and services;
diversion of our management’s attention from ongoing business concerns;

 

additional expense associated with amortization of acquired assets;
our potential inability to maximize our financial and strategic position through the successful incorporation of acquired technology and rights into our products and services;

 

additional expense associated with understanding and development of acquired business;
additional expense associated with amortization of acquired assets;

 

maintenance and implementation of uniform standards, controls, procedures and policies;
additional expense associated with understanding and development of acquired business;

 

impairment of existing relationships with employees, suppliers and customers as a result of the integration of new management employees.
maintenance and implementation of uniform standards, controls, procedures and policies; and

 

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We must attract and retain skilled personnel.  If we are unable to hire and retain technical, sales and marketing, and operational employees, our business could be harmed.

Our revenues are generated by the sales of our radiation detection products from our direct sales, sales to catalogs, distributors and to a lesser extent, our website. Our ability to manage our growth will be particularly dependent on our ability to develop and retain an effective sales force and qualified technical and managerial personnel. We intend to hire additional employees, including engineers, sales and marketing employees and operational employees.  The competition for engineers, qualified sales, technical, and managerial personnel in the technology and manufacturing community, is intense, and we may not be able to hire and retain sufficient qualified personnel.  In addition, we may not be able to maintain the quality of our operations, control our costs, maintain compliance with all applicable regulations, and expand our internal management, technical, information and accounting systems in order to support our desired growth, which could have an adverse impact on our operations.

Our revenues are generated by the sales of our radiation detection products from our direct sales, sales to catalogs, distributors and to a lesser extent, our website.  Our ability to manage our growth will be particularly dependent on our ability to develop and retain an effective sales force and qualified technical and managerial personnel. We intend to hire additional employees, including engineers, sales and marketing employees and operational employees.  The competition for engineers, qualified sales, technical, and managerial personnel in the technology and manufacturing community, is intense, and we may not be able to hire and retain sufficient qualified personnel.  In addition, we may not be able to maintain the quality of our operations, control our costs, maintain compliance with all applicable regulations, and expand our internal management, technical, information and accounting systems in order to support our desired growth, which could have an adverse impact on our operations.

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Our failure to manage growth effectively could harm our ability to attract and retain key personnel and adversely impact our operating results.

 

There can be no assurance that we will be able to manage our expansion through acquisitions effectively. Our current and planned personnel, systems, procedures and controls may not be adequate to support and effectively manage our future operations, especially as we employ personnel in multiple geographic locations. We may not be able to hire, train, retain, motivate and manage required personnel, which may limit our growth, damage our reputation and negatively affect our financial performance and harm our business.

 

If we obtain financing, existing shareholder interests may be diluted.

 

If we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our shareholders will be diluted. In addition, any new securities could have rights, preferences and privileges senior to those of our common stock. Furthermore, we cannot assure you that additional financing will be available when and to the extent we require or that, if available, it will be on acceptable terms.

  

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Our President and Chief Executive Officer has not previously received an annual salary or other compensation.

Robert I. Goldstein, in his role as President, CEO and Chairman of the Board of Directors has not received an annual salary or other compensation from our company for his services. As of November 4, 2014, we have entered into a 5-year employment agreement with Mr. Goldstein to secure his services as President, CEO and Chairman of the Board of Directors in the amount of $100,000 per year, payable at the end of each fiscal year, with his compensation beginning in fiscal 2015 and payable in January 2016. Mr. Goldstein later agreed to reduce his compensation to $50,000 beginning in 2015. The absence of his compensation in previous years should be taken into consideration when reviewing our historical financial statements in determining whether to invest in our Company. The impact of his compensation to our financial condition is unknown. We cannot make any assurances that his annual salary or other compensation will not create an adverse event on our financial condition.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.”

We are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements are time-consuming and expensive and could have a negative effect on our business, results of operations and financial condition.

As a public company, we are subject to the reporting requirements of the Exchange Act, and requirements of SOX. The cost of complying with these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. SOX requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we must commit significant resources, may be required to hire additional staff and need to continue to provide effective management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join the Company and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

As an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) enacted on April 5, 2012, we may take advantage of certain temporary exemptions from various reporting requirements including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of SOX (and rules and regulations of the SEC thereunder, which we refer to as Section 404) and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

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When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We will remain an “emerging growth company” for up to five years, although we may cease to be an emerging growth company earlier under certain circumstances. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — JOBS Act” for additional information on when we may cease to be deemed to be an emerging growth company. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

A large percentage of our business come from international operations and may affect financial results in U.S. dollar terms and could negatively impact our financial results.

A large percentage of our revenues come from international operations. As of 2015, our revenues generated from international operations were 54% of total revenue. We expect this trend to continue into the near future and have no system in place to combat currency risk.

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Risks Related to Our Common Stock

 

Our stock price may be volatile or may decline regardless of our operating performance, and the price of our common stock may fluctuate significantly.

 

Once our shares begin trading, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, theThe market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

 

competition from other radiation detection companies or related businesses;

changes in government regulations, general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the nuclear power industry;

changes in key personnel;

entry into new geographic markets;

actions and announcements by us or our competitors or significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments;

 competition from other radiation detection companies or related businesses;

changes in government regulations, general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the nuclear power industry;

changes in key personnel;

entry into new geographic markets;

actions and announcements by us or our competitors or significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments;

changes in operating performance and stock market valuations of other radiation detection and related companies;

 investors’ perceptions of our prospects and the prospects of the nuclear power industry;

fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and those expected by investors;

 

the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and those expected by investors;

 

announcements relating to litigation;
the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

financial guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
announcements relating to litigation;

 

changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;

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the development and sustainability of an active trading market for our common stock;
financial guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

 

future sales of our common stock by our officers, directors and significant stockholders; and
changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;

 

changes in accounting principles affecting our financial reporting.
the development and sustainability of an active trading market for our common stock;

future sales of our common stock by our officers, directors and significant stockholders; and

changes in accounting principles affecting our financial reporting.

 

These and other factors may lower the market price of our common stock, regardless of our actual operating performance.

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The stock markets and trading facilities, including the OTC Bulletin Board, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities in many companies. In the past, stockholders of some companies have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

 

Our Common Stock is subject to risks arising from restrictions on reliance on Rule 144 by shell companies or former shell companies.

 

Under a regulation of the SEC known as “Rule 144,” a person who has beneficially owned restricted securities of an issuer and who is not an affiliate of that issuer may sell them without registration under the Securities Act provided that certain conditions have been met. One of these conditions is that such person has held the restricted securities for a prescribed period, which will be 6 months or 1 year, depending on various factors. The holding period for our common stock would be 1 year if our common stock could be sold under Rule 144. However, Rule 144 is unavailable for the resale of securities issued by an issuer that is a shell company (other than a business c-ombinationcombination related shell company) or that has been at any time previously a shell company. The SEC defines a shell company as a company that has (a) no or nominal operations and (b) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. Until the merger, we were a shell company.

 

The SEC has provided an exception to this unavailability if and for as long as the following conditions are met:

The SEC has provided an exception to this unavailability if and for as long as the following conditions are met:
 The issuer of the securities that was formerly a shell company has ceased to be a shell company,

The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,

  

The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,

 

At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company known as “Form 10 Information.”
The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and

 

At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company known as “Form 10 Information.”

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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

 

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our common stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.

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Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation

As a public company, we are required to evaluate our internal controls over financial reporting. Furthermore, at such time as we cease to be an “emerging growth company,” as more fully described in these Risk Factors, we shall also be required to comply with Section 404. At such time, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.

 

We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors, potentially decreasing our stock price.

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee compensation.

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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we may choose “opt out” of such extended transition period, and as a result, we would then comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards would be irrevocable

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We may remain an “emerging growth company” for up to five years, although we may cease to be an emerging growth company earlier under certain circumstances.  We cannot predict or estimate the amount of additional costs we may incur as a result of the change in our status under the JOBS Act or the timing of such costs.

The Company is an Emerging Growth Company under the JOBS Act of 2012, but the Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(B) of the JOBS Act. 

Our management and other affiliates have significant control of our Common Stock and could control our actions in a manner that conflicts with the interests of other stockholders.

 

Our executive officers, directors and their affiliated entities together will beneficially own approximately 75%37.3% of our Common Stock, representing approximately 77% of the voting power of our outstanding capital stock.Stock. As a result, these stockholders, acting together, will be able to exercise considerable influence over matters requiring approval by our stockholders, including the election of directors, and may not always act in the best interests of other stockholders. Such a concentration of ownership may have the effect of delaying or preventing a change in our control, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices.

 

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Penny Stock Considerations

 

Our shares likely will be "penny stocks"“penny stocks” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

 

13

Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser'spurchaser’s written consent to the transaction prior to the sale. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:

Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

 

Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

 

Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value and information regarding the limited market in penny stocks;
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;

 

Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account.
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and

 

Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and operating results. In addition, current and potential stockholders could lose confidence in our financial reporting, which could have an adverse effect on our stock price.

 

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud.  If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed.

 

Upon the effectiveness of the Company’s contemplated current report under the Securities Exchange Act of 1934, we will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accounting firm addressing these assessments.

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During the course of our testing, we may identify deficiencies which we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404.  In addition, if we fail to maintain the adequacy of our internal accounting controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404.  Failure to achieve and maintain an effective internal control environment could cause us to face regulatory action and also cause investors to lose confidence in our reported financial information, either of which could have an adverse effect on our stock price.

 

We do not expect to pay any cash dividends for the foreseeable future.

 

The continued operation and growth of our business will require substantial cash. Accordingly, we do not anticipate that we will pay any cash dividends on shares of our Common Stock for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition, contractual restrictions relating to indebtedness we may incur, restrictions imposed by applicable law and other factors our Board of Directors deems relevant. Accordingly, if you purchase shares in this offering, realization of a gain on your investment will depend on the appreciation of the price of our Common Stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our Common Stock.

 

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OTC Bulletin Board Qualification for Quotation

 

On February 6, 2015, we were issued our ticker symbol, UCLE on the OTC Bulletin Board from FINRA. On March 20, 2015, we were approved for DTC eligibility by the Depository Trust and Clearing Corporation,) ("DTCC"(“DTCC”).

 

Holders

 

As of the date of this 10-K, we had 3751 holders of record of our Common Stock.

 

Quantitative and Qualitative Disclosures about Market Risk

 

We have not utilized anyentered into derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. In 2022, we entered into two convertible debt instruments that included stock purchase warrants. Though there were no derivatives associated with the Notes, the instruments are affected by changes in market interest rates. We believe that adequate controls are in place to monitor any hedging activities. We do not have any borrowings and, consequently, we are not affected by changes in market interest rates. While we do have significant sales outside the United States, all of our sales are settled with US currency, and we do not currently own assets and operate facilities in countries outside the United States and, consequently, we are not affected by foreign currency fluctuations or exchange rate changes.  Overall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations.

 

Off-Balance Sheet Arrangements

 

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

 

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Critical Accounting Policies

 

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growtha “smaller reporting company,” we have the option to delay adoption of new or revised accounting standards until those standards would otherwise apply to private companies, until the earlier of the date that (i) we are no longer an emerging growtha smaller reporting company or (ii) we affirmatively and irrevocably opt out of the extended transition period for complying with such new or revised accounting standards. We have elected to opt out of this extended transition period. As noted, this election is irrevocable.  

 

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("(“US GAAP"GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations.

 

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Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

Recent Accounting Pronouncements

  

In April 2014,June 2016, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08),ASU 2016-13, PresentationFinancial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360)Instruments. ASU 2014-08 amends2016-13 was issued to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses.  Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope.  The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the requirements for reporting discontinued operationsexpected credit loss impairment method without recognition threshold.  The expected credit losses estimate will be based upon historical information, current conditions, and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operationsreasonable and financial results should be presentedsupportable forecasts.  This ASU as discontinued operations. This new accounting guidanceamended by ASU 2019-10, is effective for annual periodsfiscal years beginning after December 15, 2014.2022.  The Company has determined that this ASU does not have a material effect on the Company’s consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluating the impact of adoptingthis ASU 2014-08will have on the Company's results of operations orits consolidated financial condition.statements.

 

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In May 2014,November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-092023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2014-09),Revenue from Contracts with Customers2023-07). ASU 2014-09 will eliminate transaction-2023-07 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The main provisions of ASU 2023-07 require a public entity to disclose on an annual and industry-specificinterim basis: (i) significant segment expenses provided to the chief operating decision maker, (ii) an amount representing the difference between segment revenue recognition guidanceless segment expenses disclosed under current U.S. GAAPthe significant segment expense principle and replace iteach reported measure of segment profit or loss and a description of its composition, (iii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required under Topic 280 in interim periods, (iv) clarify that if the chief operating decision maker uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit, (v) the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (vi) all disclosures required by ASU 2023-07 and all existing segment disclosures under Topic 280 for an entity with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.single reportable segment. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09new guidance is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting.

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In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) -Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02,Consolidation (Topic 810): Amendments to the Consolidation Analysis.ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In September, 2015, the FASB issued ASU No. 2015-16,Business Combinations (Topic 805).Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

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In November 2015, the FASB issued ASU No. 2015-17,Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840,Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currentlystill evaluating the effect this standardimpact ASU 2023-07 will have on itsthe Company’s consolidated financial statements.statement disclosures.

 

Other recent accounting pronouncements issued byIn December 2023, the FASB including its Emerging Issues Task Force,issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the American Institutetransparency and decision usefulness of Certified Public Accountants,income tax disclosures. The main provisions of ASU 2023-09 require a public entity to disclose on an annual basis (i) specific prescribed categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, (iii) the amount of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes, (iv) the Securitiesamount of income taxes paid, net of refunds received, disaggregated by individual jurisdictions in which income taxes paid is equal to greater than 5 percent of total income taxes paid, (v) income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and Exchange Commission did notforeign, and (vi) income tax expense or are not believedbenefit from continuing operations disaggregated by managementfederal, state, and foreign. ASU 2023-09 also removes certain disclosure requirements related to unrecognized tax benefits and cumulative unrecognized temporary differences. The new guidance is effective for the fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact ASU 2023-09 will have a material impact on the Company's present or futureCompany’s consolidated financial statements.statement disclosures.

 

Authorization of Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that we will not do so in the future.

 

Control by Management

 

As of December 31, 2015,2023, management currently owns 75%37.1% of all the issued and outstanding capital stock of the Company. Consequently, management has the ability to control the operations of the Company and will have the ability to control substantially all matters submitted to stockholders for approval, including:

 

•Election of the board of directors;

Election of the board of directors;

 

•Removal of any directors;

Removal of any directors;

 

•Amendment of the Company’s certificate of incorporation or bylaws; and

Amendment of the Company’s certificate of incorporation or bylaws; and

 

     •Adoption of measures that could delay or prevent a change in control orimpede a merger, takeover or other business combination.

Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination.

 

This Report Contains Forward-Looking Statements Andand Information Relating Toto Us, Our Industry and To Other Businesses.

 

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ITEM 1B- UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 1C- CYBERSECURITY

We have a cross-departmental approach to addressing cybersecurity risk, including input from employees and our Board of Directors (the "Board"). The Board and senior management are devoting resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape to respond to emerging threats in a timely and effective manner. Our cybersecurity risk management program will leverage the National Institute of Standards and Technology (NIST) framework, which organizes cybersecurity risks into five categories: identify, protect, detect, respond and recover. Our IT security reviews such as policies related to encryption standards, antivirus protection, remote access, multifactor authentication, confidential information and the use of the internet, social media, email and wireless devices go through an internal review process and are approved by appropriate members of management. In addition to assessing our own cybersecurity preparedness, we also consider and evaluate cybersecurity risks associated with the use of third-party service providers. The internal business owners of hosted applications are required to document user access reviews at least annually and provide from the vendor a System and Organization Controls (SOC) 1 or SOC 2 report. If a third-party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. Our assessment of risks associated with the use of third-party providers is part of our overall cybersecurity risk management framework. We face a number of cybersecurity risks in connection with our business. Although such risks have not materially affected us, including our business strategy, results of operations or financial condition, to date, we have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks.

ITEM 2. PROPERTIES

 

US Nuclear Corp is headquartered in Canoga Park, CA, and occupies a 6,000 square6,000-square foot leased facility and 8,000 square foot leased facility in Milford, Ohio. The office is divided among the Company’s various disciplines: management, finance, sales, marketing and customer service, with 25% of the available space dedicated to inventory.Each location has a bookkeeper, production manager, assembly supervisor, production workers, and customer service staff.

The Company’s executive offices are located in Canoga Park, CA, at 7051 Eton Avenue, Canoga Park, California 91303. ThePer the Company’s lease agreement, the lease payment for each facility was $6,000, paid monthly through April 30, 2015. The payment for the Canoga Park location was reducedincreased to $2,000 beginning May$7,000 on August 1, 2015.2016. Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. He holds an 8% interest in Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties. The following table lists the locations of all its current locations.

 

LocationAddressAddressSize
Canoga Park, California7051 Eton Avenue6,000 square feet
 Canoga Park, CA 91303 
Milford, Ohio1160 U.S. Route 508,000 square feet
 Milford, OH 45150 

ITEM 3. LEGAL PROCEEDINGS.

 

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

 

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS

 

Market Information

 

We have already been approved by FINRA for the Over-the-Counter Bulletin Board ("OTCBB"(“OTCBB”) trading and additionally have also been approved with the Depository Trust and Clearing Corporation or ("DTCC"(“DTCC”) for DTC eligibility. Our stock ticker symbol is UCLE on the Over-the-Counter Bulletin Board. For information on shareholders who owns 5% or more of our common stock, as well as the ownership of our officers and directors, please see “Security Ownership of Certain Beneficial Owners and Management”.

 

The following table sets forth the range of low and high prices for our common stock for the each of the periods indicated as reported and summarized by the OTCQB. These prices are based on interdealer bid and asked prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Our common stock commenced trading on May 18, 2015.

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Fiscal Year Ended December 31, 2015
Quarter Ended High $ Low $
March 31, 2015 $- $-
June 30, 2015 $0.51 $0.06
September30, 2015 $0.39 $0.20
December 31, 2015 $0.61 $0.15

Authorized Capital Stock

 

The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, par value $.0001$0.0001 per share, (the “Common Stock”) and 5,000,000 shares of Preferred Stock, (the “Preferred Stock”) par value $.0001$0.0001 per share, of which none have been designated or issued.As of December 31, 2015,2023, we had (i) 13,475,00040,173,778 shares of common stock outstanding, held of record by 3751 shareholders, and (ii) no shares of preferred stock outstanding. As of April 5, 2016,15, 2024, there are 13,475,00044,391,778 shares of common stock outstanding, held of record by 3751 shareholders.  

 

Description of Capital Stock

 

The following is a summary of the rights of our capital stock and certain provisions of our articles of organization, as amended, and by-laws.  For more detailed information, please see our articles of organization, as amended, and by-laws filed as exhibits to this Current Report on Form 10-K. Each holder of the Company’s Common Stock areis entitled to one vote for each share held on all matters submitted to a vote of shareholders and do not have cumulative voting rights.  An election of directors by our shareholders shall be determined by a plurality of the votes cast by the shareholders entitled to vote on the election.  The holders of Common Stock are entitled to receive pro rata dividends, when and as declared by the Board of Directors in its discretion, out of funds legally available therefore, but only if all dividends on the Preferred Stock have been paid in accordance with the terms of such Preferred Stock and there exists no deficiency in any sinking fund for the Preferred Stock.

 

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Dividends on the Common Stock are declared by the Board of Directors. The payment of dividends on the Common Stock in the future, if any, will be subordinate to the Preferred Stock and will be determined by the Board of Directors. In addition, the payment of such dividends will depend on the Company’s financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.  The Company has heretofore never paid any dividends and the Board has no plans for the payment of future dividends.  

The Board presently plans for any future surplus income to be reinvested into growing the Company through additional investment.

 


Preferred Stock

 

The Board of Directors is authorized to provide for the issuance of shares of preferred stock in series and, by filing a certificate pursuant to the applicable law of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the shareholders. Any shares of preferred stock so issued would have priority over the common stock with respect to dividend or liquidation rights. Any future issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our Company without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to neither issue any preferred stock nor adopt any series, preferences or other classification of preferred stock.

 

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The issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holder to block such a transaction, or facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock. Although the Board of Directors is required to make any determination to issue such stock based on its judgment as to the best interests of our stockholders, the Board of Directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. The Board of Directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or stock exchange rules. We have no present plans to issue any preferred stock.

 

The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirety by the provisions of the Company’s Certificate of Incorporation and By-Laws, copies of which have been filed as exhibits to the Company’s Form 10 filed with the Securities Exchange Commission on March 2, 2012, as updated by the Company’s Form 8-K filed with the Securities Exchange Commission on October 15, 2013.

 

Dividends

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Dividends

We have not paid any dividends on our common stock and do not presently intend to pay cash dividends prior to the consummation of a business combination. The payment of cash dividends in the future, if any, will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to consummation of a business combination, if any. The payment of any dividends subsequent to a business combination, if any, will be within the discretion of our then existing board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, the board of directors does not anticipate paying any cash dividends in the foreseeable future. 

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

 

Recent Sales of Unregistered Securities

 

On April 30, 2015,During the twelve months ended December 31, 2023, the Company issued 10,000 shares of its common stock to a director for services valued at $1,000. The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.issued:

 

On November 23, 2015, the Company issued 175,000 shares of its common stock for services valued at $35,000. The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.

2,600,000 shares of common stock to its Directors and President, valued at $239,080; and

 

On October 31, 2015, the Company issued 25,000 shares of its common stock to its CFO for services valued at $5,750. The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.

2,083,000 shares of common stock valued at $350,891 in satisfaction of convertible debt and interest; and

 

2,580,300 shares of common stock to consultants for services rendered valued at $215,085. The fair value was determined based on the Company’s stock price on the grant date; and

771,845 and 517,391 shares of common stock in a cashless exercise of 1,500,000 and 1,000,000 warrants, respectively.

Issuer Purchases of Equity Securities

None.

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None.

20

ITEM 6. SELECTED FINANCIAL DATA[Reserved]

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand US Nuclear Corp, our operations and our present business environment. MD&A is provided as a supplement to—and should be read in conjunction with—our consolidated financial statements and the accompanying notes thereto contained in “Item 8. Financial Statements and Supplementary Data” of this report on Form 10-K.This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

 

We were incorporated in Delaware on February 14, 2012, and on March 2, 2012, we filed a registration statement on Form 10 to register with the U.S. Securities and Exchange Commission as a public company.  We were originally organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

 

On April 18, 2012, Richard Chiang, then our sole director and shareholder, entered into a Stock Purchase Agreement whereby Mr. Goldstein of US Nuclear Corp purchased 10,000,000 shares of our common stock from Mr. Chiang, which constituted 100% of our issued and outstanding shares of common stock. Mr. Chiang then resigned from all positions. Subsequently, on May 18, 2012, the Registrant appointed Mr. Chiang to serve as a member of the Board of Directors. He resigned from this position on March 31, 2013.

 

Since our acquisition of Overhoff Technology in 2006, we have had discussions with other companies in our industry for an acquisition. While we targeted Overhoff due to its unique position in the tritium market, we had not commenced an acquisition since our Overhoff Technology acquisition; we believe in part the reason was due to lack of additional capital, our status as a privately-held entity at the time, and focus on developing our own products. We will seek out companies whom our management believes will provide value to our customers and will complement our business. We will focus on diversifying our product line into a larger range so that our customers and vendors may have a more expansive experience in type, choice, options, price and selection. We also believe that with a more diverse product line we will become more competitive as our industry is intensely competitive.

 

Our currentGenerally, our product concentration places a heavy reliance on our Overhoff Technology division; wheredivision. In 2023, we derived 19%50.81% of our total revenues in 2015 from one customer.sales made by Overhoff to three customers. We expect to encounter a continuation of this trend unless we are successful in diversifying our client base, executing our acquisition strategy and experience increases in business from our Technical Associates division.

 

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Our international revenues were 54%12.8% of our total revenue in 2015.2023. We expect this to increase over time as we continue to field new orders, inquires, and engage new customers overseas.overseas and recover post-pandemic. We believe that South Korea and China will likely be a larger contributor to revenue within the next few years. While we maintain steady growth domestically, the international side of our business may be a larger component as nuclear technology and rapid development for clean energy grows abroad. Additionally, the Company relies on continued growth and orders from CANDU reactors (Canada Deuterium Uranium), and rapid development of the next generation of nuclear reactors called Molten Salt Reactors, (MSR) and Liquid-Fluoride Thorium Reactors (LFTR), all of which purchase tritium detection and monitor products. There can be no assurances as to our growth projections and our risk profile as we depend upon increased foreign customers for business.

 

Additionally, we are inexperienced as a public company and may find it difficult to meet all of the challenges and expenses of being a public company.  As we commencing as a public company, we plan to raise capital by offering shares of our common stock or convertible debt to investors.  For the next twelve months, we anticipate we will need approximately $5,000,000 in additional capital to fund our business plans. If we do not raise the required capital we may not meet our expenses and there can be no assurance that we will be able to do so and if we do, we may find the cost of such financing to be burdensome on the Company. Additionally, we may not be able to execute on our business plans due to unforeseen market forces such as lower natural gas prices, difficulty attracting qualified executive staff, general downturn in our sector or by competition as we operate in an extremely competitive market for all of our product offerings.21

 

Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. He holds an 8% interest in Gold Team Inc. and spends approximately 5 hours per week with affairs related to Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties at an expense of $6,000$7,000 for each facility per month. 

 

On September 30, 2014,May 31, 2016, we entered into a Forgiveness of Debt and Conversionan Asset Purchase Agreement with Electronic Control Concepts (“ECC”) whereby the Company purchased certain tangible and intangible assets of ECC. ECC is a small manufacturer of test and maintenance meters for x-ray machines both medical and industrial. We acquired ECC to give a boost to our current x-ray related product and hospital/medical product sales.

On March 3, 2023, the Company divested itself of its wholly owned subsidiary, Cali From Above, through a Membership Interest Purchase Agreement with the Company’s President and Chief Executive Officer, and ChairmanRobert Goldstein. Consideration received by the Company was 65,000,000 shares of Averox, Inc. (OTC:AVRI), resulting in the Company owning 26% of the Boardissued and outstanding shares of Directors, Robert I. Goldstein. We owed Mr. Goldstein, $868,828 in related party debt. Pursuant to thiscommon stock of AVRI. The Company and Cali From Above also signed a Cooperation Agreement Mr. Goldstein agreed to forgive $668,828whereby the Company holds exclusive sourcing and we agreed to convert the balancemanufacturing rights for Cali From Above products, thus making Cali From Above a new customer of the debt, $200,000 into restricted shares of our Company at $0.20 cents per share. We then issued Mr. Goldstein 1,000,000 shares of our restricted common stock.Company.

 

On October 16, 2014, our Chief Financial Officer, and Secretary, Darian B. Andersen resigned, effective, October 31, 2014. Mr. Andersen has been of service to the Company for more than 2 years. Our relationship with him was considered to be positive and his departure from our company was because of his desire to continuing pursuing his work as a legal attorney. On that same day, we retained the services of Rachel Boulds, as our Chief Financial Officer, and Secretary to fill the void left by Mr. Andersen. Ms. Boulds is an experienced accountant and former auditor for public companies having been employed at PCAOB member firms.

On November 4, 2014, we entered into a five-year Employment Agreement with our President, Chief Executive Officer and Chairman of the Board of Directors, Robert I. Goldstein. The Agreement calls for a salary of $100,000 per year, payable at the end of the fiscal year, with his compensation beginning in fiscal 2015 and payable in January 2016. Mr. Goldstein later agreed to reduce his compensation to $50,000 beginning in 2015.

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Results of Operations

For the year ended December 31, 20152023, compared to the year ended December 31, 20142022

 

 Year Ended December 31,Change
 20152014$%
     
Sales$2,652,878$1,637,100$1,015,77862.0%
Cost of goods sold1,246,182904,874341,30837.7%
Gross profit1,406,696732,226674,47092.1%
Selling, general and administrative expenses982,3901,036,892(54,502)-5.3%
Gain (loss) from operations424,306(304,666)728,972239.3%
Other expense(24,890)(16,839)(8,051)47.8%
Gain (loss) before provision for income taxes399,416(321,505)720,921224.2%
Provision for income taxes--- 
Net loss$399,416$(321,505)$720,921224.2%
  Year Ended December 31,  Change 
  2023  2022  $  % 
             
Sales $2,231,095  $2,091,366  $139,729   6.68%
Cost of goods sold  1,306,789   1,303,298   3,491   0.27%
Gross profit  924,306   788,068   136,238   17.29%
Operating expenses  2,565,950   2,284,099   281,851   12.34%
Loss from operations  (1,641,644)  (1,496,031)  (145,613)  9.73%
                 
Other expense  (1,792,160)  (546,764)  (1,245,396)  227.78%
Loss before provision for income taxes  (3,433,804)  (2,042,795)  (1,391,009)  68.09%
                 
Provision for income taxes  -   -         
Net income (loss) $(3,433,804) $(2,042,795) $(1,391,009)  68.09%

 

22

Revenue for the year ended December 31, 20152023, was $2,652,878$2,231,095 compared to $1,637,100$2,091,366 for the year ended December 31, 2014.2022. The increase of $1,015,778$139,729 or 62.0%6.68% is a resultconsidered by management to be indicative of an increaseimproving post-Coronavirus pandemic economic conditions, however growth was slowed in revenue from our Overhoff subsidiary of $1,049,140. The increase in Overhoff’s revenue was a result of a large international sale that occurred during the year ended December 31, 2015. We were not able2022 due to secure such a large order during the year ended December 31, 2014.political and economic uncertainties. The revenue breakdown for the year ended December 31, 20152023, is as follows:


North America 46%88.58%

Asia (Including(including Japan) 35%7.72%

Other 19%3.70%

 

Our gross margin for the year ended December 31, 20152023, was 53%41.43% as compared to 45%37.68% for the year ended December 31, 2014.2022. The increase in gross margin is due to a largerslight increase in revenue over the increase in costsales of goods.certain products with higher gross margins.

 

General and administrative expenseOperating expenses for the year ended December 31, 2015 decreased2023, increased by 5.3% over 2014$281,851 or 12.34% to $982,390 down$2,565,950; up from $1,036,892$2,284,099 for the year ended December 31, 2014.2022. The decreaseincrease is mainlylargely attributed to a concentrated effort to reduce company spending.payroll costs and an increase in professional fees.

 

Other expense for the year ended December 31, 20152023, was $24,890,$1,792,160, an increase of $8,051$1,245,396 from $16,839$546,764 for 2014.2022. Other expense in 2023 consists of interest expense, amortization of debt discount, equity loss in investment, loss on deconsolidation, loss on an investment deposit, loss on extinguishment of debt, loss on conversion of stock, and gain on debt forgiveness. In 2022, other expense consisted of interest expense and amortization of debt discounts. The increase in 2023 was largely due to interest expense and additional debt discounts recorded related to the down round provisions of our lines of credit.convertible notes payable.

 

Net incomeloss for the year ended December 31, 20152023, was $399,416$3,433,804 compared to a net loss of $321,505$2,042,795 for the year ended December 31, 2014. The increase in net income of $720,921 which resulted in the change from a loss to a gain was attributed to obtaining higher sales while lowering cost of goods sold and selling, general and administrative expenses.2022.  

 

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Liquidity and Capital Resources

 

Our operations have historically been financed by our majority stockholder. As funds were needed for working capital purposes, our majority stockholder would loan us the needed funds. During the year ended December 31, 2015, our2023, the Company’s majority stockholdershareholder loaned $403,600 to the Company $243,293, $52,629 of whichand was repaid.repaid $58,000. We anticipate funds the growth ofmeeting our businesscapital needs through the sales of sharessale of our common stock and loans from our majority stockholder, if necessary.

 

At December 31, 2015,2023, total assets increaseddecreased by 10.5% to $3,498,619$251,861 or 8.10% from $3,166,112$3,108,737 at December 31, 2014 principally related2022, primarily due to a decrease in inventory.

At December 31, 2023, total liabilities increased by 39.99% to $4,839,495 from $3,457,041 at December 31, 2022 due to an increase in cash.accrued liabilities, accounts payable, accrued compensation paid to officers, note payable to shareholder, and an increase in our line of credit balances.

 

AtCash Flow

The following table summarizes our cash flows for the periods indicated below:

  For the Year Ended  For the Year Ended 
  December 31,  December 31, 
  2023  2022 
Cash used in operating activities  (263,444)  (1,324,059)
Cash used in investing activities  (24,546)  - 
Cash provided by financing activities  314,721   1,203,851 

23

Cash Used in Operating Activities

During the year ended December 31, 2015, total liabilities decreased by 12.5% to $757,479 from $866,138 at2023, and December 31, 2014 principally related to a decrease2022, cash used in operating activities of $263,444 and $1,324,059, respectively, primarily reflected our net income for the period, adjusted by non-cash charges such as depreciation, common stock issued for services, debt discounts and financing costs, loss on extinguishment of debt, loss on conversion of stock, as well as changes in accounts receivable, prepaids, deposits, accounts payable, and customer depositsaccrued expenses.

Cash Used by Investing Activities

During the year ended December 31, 2023, cash used in investing activities was $24,546, which consisted of the purchase of office equipment, cash paid for an investment, and a note receivable. During the year ended December 31, 2022, no cash was used in investing activities.

Cash Provided by Financing Activities

During the year ended December 31, 2023, cash provided by financing activities was $314,721, which consisted of net borrowings from lines of credit, shareholder debt, notes payable, offset by an increase inrepayments on our convertible notes. During the note payable toyear ended December 31, 2022, cash provided by financing activities was $1,203,851, which primarily consisted of net borrowings from lines of credit, shareholder debt, and convertible notes.

 

Critical Accounting Policies

 

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("(“US GAAP"GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

24

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.

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We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

·have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

·comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

·submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

·disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

As an emerging growth company, the company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

The Company is an Emerging Growth Company under the JOBS Act of 2012, but the Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(B) of the JOBS Act. 

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Off-Balance Sheet Arrangements

 

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

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

Please see the financial statements beginning on page F-1 located elsewhere in this annual report on Form 10-K and incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

On May 28, 2015, the board of directors and majority shareholders of the Company dismissed Anton & Chia, LLP as the independent registered public accounting firm and engaged Malone Bailey LLP.None

 

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

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ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2015,2023, these disclosure controls and procedures were effective.ineffective.

 

25

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible to establishfor establishing and maintainmaintaining adequate internal controlcontrols over financial reporting. Our Officers are responsible to design or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The policies and procedures include:

maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of assets,
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

 

maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of assets,

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period December 31, 2015.2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”COSO-2017”) in Internal Control – Integrated Framework. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the fiscal year December 31, 2015,2023, our internal controls over financial reporting were effective at a reasonable assurance level.

During the year ended December 31, 2014, that Company’s internal controls were deemed not affective, primarilyeffective due to a lack of segregation of duties and the timely and accurate reconciliation of accounts. During the current year management has determined that it has taken the appropriate steps and implemented the necessary procedures to eliminate all material weaknesses. The company has multiple levels of review in the accounting function including multiple accounting staff, as well as the CEO, CFO and an outside accountant. In addition, to the multiple levels of review and over sight staff works diligently at the end of each quarter to ensure a timely and accurate close of all accounts.following.

 

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TableNo formal documentation of Contentsour internal controls

 

Lack of multiple levels of supervision and review

Changes in Internal Controls over Financial Reporting

 

Our management has determined that there were no changes made in the implementation of our internal controls over financial reporting during the fourth quarter of the year ended December 31, 2015.2023.

 

Attestation Report of Independent Public Accounting Firm

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting because as a smaller reporting company we are not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

ITEM 9B. OTHER INFORMATION

 

Not applicable.applicable

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable

26

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 

On June 30, 2022, US Nuclear Corp, a Delaware corporation (the “Company”) received notice of resignation by its Chief Financial Officer, Rachel Boulds. Ms. Boulds’ resignation did not result from any disagreement with the Company.

 

On the same day, the Company appointed its Chief Operating Officer, Richard Landry, to serve as the Chief Financial Officer of the Company effective as of June 30, 2022. On August 12, 2023, Mr. Landry’s resigned his position as CFO. Mr. Landry’s resignation did not result from any disagreement with the Company.

On August 12, 2023, the Board appointed Michael Hastings as Chief Financial Officer. Mr. Hastings remains a member of the Board of Directors.

Effective October 6, 2023, Michael Pope was appointed as a director of the Company. On the same day, Dell Williamson’s position on the Board of Directors was changed to Board Observor.

The following table contains information concerning our directors and executive officers asthrough the date of April 14, 2016.filing of this report.

 

Name Age Position
Robert I. Goldstein 6775 President, Chief Executive Officer, and Chairman of the Board of Directors
     
Rachel BouldsMichael Pope 4643 Chief Financial Officer and SecretaryMember of the Board of Directors
     
Dr. Gerald EntineMichael Hastings 7281 MemberChief Financial Officer, and member of the Board of Directors

 

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Officers and Directors

 

Robert I. Goldstein –President, Chief Executive Officer and Chairman of the Board of Directors: Mr. Goldstein entered the radiation detection industry in 1972 as an applications engineer, production manager, and then general manager for Optron Scientific Company, Inc. DBA, Technical AssociatesAssociates. Mr. Goldstein is a physicist and an awardaward- winning specialist in the nuclear radiation detection industry and has more than 30 years of experience in the field. He has authored more than 20 white papers and abstract presentations on industrial research use of radiation measurement equipment and instruments. His work has been approved by US Federal standards set by the EPA (Environmental Protection Agency), FDA (Food and Drug Administration), and NRC (Nuclear Regulatory Commission). Mr. Goldstein has also worked closely with and continues ongoing joint development programs with Los Alamos National Lab and Jefferson National Lab. He was instrumental in the acquisition of Overhoff Technology Corp, at the time, the world’s only tritium detection company, in 2006. His experience in the field of radiation detection ranges from development of instrumentation to design and development for air, water and surface applications. He is also an accomplished inventor having invented miniature radiation detectors for use during surgery. Mr. Goldstein graduated from MIT with a BS in Physics and from Stanford University with an MS in Mechanical Engineering. Mr. Goldstein is affiliated with the following scientific groups: Health Physics Society, American Nuclear Society, DOE (US Department of Energy) Tritium Focus Group, Air Monitoring User’s Group and Health Physics Instrument Committee.

 

27

Rachel Boulds –Michael Hastings– Chief Financial Officer and Secretary: Ms. Boulds has been engaged in private practice as an accountant and consultant. She specializes in preparation of full disclosure financial statements for public companies to comply with GAAP and SEC requirements. From August 2004 through July 2009, she was employed as an audit senior for HJ & Associates, LLC, where she performed audits and reviews for public and private companies, including the preparation of financial statements to comply with GAAP and SEC requirements. From 2003 through 2004, Ms. Boulds was employed as an audit senior for Mohler, Nixon and Williams. From September 2001, through July 2003, Ms. Boulds worked as an ABAS associate for PriceWaterhouseCoopers. From April 2000 through February 2001, she was employed an eCommerce accountant for the Walt Disney Group’s GO.com division. Ms. Boulds holds a B.S. in accounting from San Jose State University, 2001 and is licensed as a CPA in the state of Utah and California.

Dr. Gerald Entine– Member of the Board of Directors: Dr. Entine isMr. Hastings has been a corporate finance officer for over thirty years in the foundermedical device industry with C.R. Bard, Inc. (predecessor to Becton Dickinson), and former majority stockholderin the industrial battery industry with EnerSys, Inc. (NYSE: ENS). Mr. Hastings retired from EnerSys in 2011 as its Vice President and Treasurer with company revenue of RMD, Inc$2 billion and RMD Instruments, LLC, whichoperations in all parts of the world. His responsibilities included global treasury operations including debt and capital transactions; corporate tax; hedging of currencies, interest rate exposures and the price of raw materials; credit management; pension plan investments; and investor relations. He participated fully in due diligence, valuation and negotiation of numerous acquisitions. Mr. Hastings was also a member of the Board of Directors and Chief Financial Officer of MegaGraphite, Inc. - a private graphite exploration company in Canada between 2011 and when it was sold to Dynasilin 2014. Mr. Hastings was a member of the Board of Directors of Organic Transit, Inc., a private solar electric vehicle company in the United States, from 2018 until the company was sold in 2020. Mr. Hastings has no prior business relationship with the Company.

Michael Pope – Member of the Board of Directors: Mr. Pope serves as the CEO and Chairman at Boxlight Corporation in 2008. He still retains(Nasdaq:BOXL), a substantial interest in Dynasil. He has more than 40 yearsglobal provider of experience in both applied and basic scientific research in optics, nuclear sensors and instrumentation and related physics or biophysics-based technologies. Dr. Entine received his B.Sc. and M.A. in Physics from the University of Pennsylvania. He then received his Ph.D. in physics from the University of California at Berkeley under the direction of two Nobel Laureates: Dr. Melvin Calvin and Dr. Owen Chamberlain. Dr. Entine then joined Tyco Laboratories, a highinteractive technology research center in Boston, and conducted studies in semiconductor sensors until 1974, whensolutions, where he founded RMD with technology that RMD acquired from Tyco. Dr. Entine continues to be involved in research, and has been an executive since July 2015 and director since September 2014. Mr. Pope has led Boxlight through eleven acquisitions from 2016 to 2022, a Nasdaq IPO in November 2017, and revenue growth to over $200 million. Mr. Pope previously served as Managing Director at Vert Capital, a private equity and advisory firm from October 2011 to October 2016, managing portfolio holdings in the Principal Investigatoreducation, consumer products, technology, and digital media sectors. Prior to joining Vert Capital, from May 2008 to October 2011, Mr. Pope was Chief Financial Officer and Chief Operating Officer for the Taylor Family in Salt Lake City, managing family investment holdings in consumer products, professional services, real estate, and education. He also held positions including senior SEC reporting at Omniture (previously listed on over a hundred research contractsNasdaq and grants funded privatelyacquired by Adobe (Nasdaq:ADBE) in 2009) and by government. His publications include works in PhysicsAssurance Associate at Grant Thornton. Mr. Pope holds an active CPA license and Instrumentation, Basic Chemistry, and Medicine & Biophysics. Dr. Entine retired from his position as Division Manager of Radiation Monitoring Devices in 2011, at which time the division had a staff of about 90 of which half had Ph.D.'s. He now consults for several technical firms.

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When considering whether the directors have the experience, qualifications, attributes and skills, taken as a whole to enable our board to satisfy its oversight responsibilities effectively, the board focusesserves on the diversityboards of skills,various organizations including Boxlight (NASDAQ:BOXL), Novo Integrated Sciences (NASDAQ:NVOS) and Focus Universal (NASDAQ:FCUV). He earned his undergraduate and graduate degrees in accounting from Brigham Young University with academic honors. Mr. Pope has no prior business and professional business experience reflected inrelationship with the descriptions above. In particular:

Company.

With respect to Mr. Goldstein, the board considered his perspective and experience with our ongoing strategy and operations that he has obtained through his service to the Company and his ability to evaluate and assist with potential acquisitions and business opportunities.

 

With respect to Dr. Entine, the board considered his extensive managerial and scientific expertise, as well as his experience in operating RMD Inc., and RMD Instruments LLC, which were acquired by Dynasil Corporation, a publicly-traded company.

In particular,

 

With respect to Mr. Goldstein, the board considered his perspective and experience with our ongoing strategy and operations that he has obtained through his service to the Company and his ability to evaluate and assist with potential acquisitions and business opportunities.

With respect to Mr. Hastings, the board considered his extensive managerial and financial expertise, as well as his experience in the medical device industry and his previous experience serving on a board of directors.

With respect to Mr. Pope, the board considered his extensive managerial and financial expertise, as well as his experience in acquisitions and his previous experience serving on a board of directors.

28

The Board of Directors and Committees

 

As of the date of this Report, we had one independent director. We anticipate appointing additional independent directors as required in the future.  

 

Audit Committee

 

As of the date of this Report, we did not have a standing Audit Committee.  We intend to establish an Audit Committee of the Board of Directors, which will consist of independent directors, of which at least one director will qualify as a qualified financial expert as defined in the regulations of the SEC. The Audit Committee’s duties would be to recommend to our Board of Directors the engagement of independent auditors to audit our consolidated financial statements and to review our accounting and auditing principles.  The Audit Committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors, if any, and independent public accountants, including their recommendations to improve the system of accounting and internal control.  The Audit Committee would at all times be composed exclusively of directors who are, in the opinion of our Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.  As of the date of this Report, we did not have an audit committee financial expert, in light of our size, although we intend to review this issue as the Company grows, especially as the Company implements a standing Audit Committee.

 

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Compensation Committee

 

As of the date of this Report, we did not have a standing Compensation Committee.  We intend to establish a Compensation Committee of the Board of Directors.  The Compensation Committee would review and approve our salary and benefits policies, including compensation of executive officers.  The Compensation Committee would also administer any stock option plans that we may adopt and recommend and approve grants of stock options under such plans.

 

Nominating and Corporate Governance Committee 

 

As of the date of this Report, we did not have a standing Nominating and Corporate Governance Committee.  We intend to establish a Nominating and Corporate Governance Committee of the Board of Directors to assist in the selection of director nominees, approve director nominations to be presented for stockholder approval at our annual meeting of stockholders and fill any vacancies on our Board of Directors, consider any nominations of director candidates validly made by stockholders, and review and consider developments in corporate governance practices.

 

Compliance with Section 16(A) of the Securities Exchange Act Of 1934

 

Section 16(a) of the Securities Exchange Act of 1934, as amended ("(“Section 16(a)"), requires our Directors and executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities (collectively, "Section“Section 16 reporting persons"persons”), to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other equity securities. Section 16 reporting persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

 

To our knowledge, based solely on a review of the copies of any such reports furnished to us, none of the Section 16 reporting persons failed to file on a timely basis reports required by Section 16(a) of the Exchange Act with respect to our most recent fiscal year ended December 31, 2015.2023.

 

Code of Ethics

 

As of the date of this Report, we had not adopted a formal, written code of conduct (“Code of Ethics”) within the specific guidelines promulgated by the SEC, although we intend to adopt a Code of Ethics. 

 

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29

ITEM 11. EXECUTIVE COMPENSATION

Executive Compensation

 

Our President, CEO and Chairman of the Board of Directors, Robert I. Goldstein and our Chief Financial Officer and Secretary, Rachel Boulds areis compensated for their services to the Company; no other officer receives compensation from the Company. Until the Company acquires additional capital, it is not anticipated that any other officer other than these twothree individuals will receive compensation from the Company other than reimbursement for out-of-pocket expenses incurred on behalf of the Company.

 

The Company has no stock option, retirement, pension, or profit sharingprofit-sharing programs for the benefit of directors, officers or other employees, but our officers and directors may recommend adoption of one or more such programs in the future.

 

Employment Agreements and Compensation

 

On November 4, 2014, we entered into a five-year Employment Agreement with our President, Chief Executive Officer and Chairman of the Board of Directors, Robert I. Goldstein. The Agreement calls for a salary of $100,000 per year, with his compensation beginning in fiscal 2015 and payable in January 2016. Mr. Goldstein later agreed to temporarily reduce his compensation to $50,000 beginning infor 2015. Compensation for 2016 increased to $100,000 as authorized by the Board of Directors and has remained $100,000 through December 31, 2023.

 

On October 16, 2014, we entered into an employment agreement with Rachel Boulds, our CFO. Ms. Boulds is entitled to receive quarterly payments of $2,500. She is also entitled to receive a stock compensation of 25,000 shares of US Nuclear Corp restricted common stock, payable upon the first anniversary date of her employment date.  

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Summary Compensation Table

 

The following table provides information regarding the compensation of our named executive officers for the years ended December 31, 20152023, and 2014.2022. 

 

Name and Principal Position Year Salary  Stock
Awards
  Option
Awards
  Non-Equity
Incentive
Plan
Compensation
  Other
Compensation
  Total 
Robert I. Goldstein President, 2023 $100,000  $-0-  $-0-  $-0-  $-0-  $100,000 
Chief Executive Officer, and Chairman of the Board of Directors (1) 2022 $100,000  $-0-  $-0-  $-0-  $-0-  $100,000 
                           
Richard Landry, 2023 $75,000  $32,348  $-0-  $-0-  $-0-  $107,348 
Chief Financial Officer (2) 2022 $120,000  $-0-  $-0-  $-0-  $-0-  $120,000 
                           
Michael Hastings, 2023 $-0-  $-0-  $-0-  $-0-  $-0-  $-0- 
Chief Financial Officer (3) 2022 $-0-  $-0-  $-0-  $-0-  $-0-  $-0- 

Name and Principal Position(1)YearSalary

Stock

Awards

Option
Awards 
Non-Equity
Incentive Plan
Compensation 
Other
Compensation
Total
Robert I. Goldstein   
President, Chief Executive Officer, and Chairman of the Board of Directors(2)

2014

2015

$

$

0

0

 $

$

0

0

$

$

0

0

$

$

0

0

$

$

0

0

$

$

0

0

Rachel Boulds (1)
Chief Financial Officer, and Secretary

2014

2015

$

$

0

10,000

 $

$

0

5,750

$

$

0

0

$

$

0

0

$

$

 0

0

$

$

0

15,750

(1)Ms. Boulds became our CFO on October 31, 2014.
(2)Amounts indicated are cash payments. Mr. Goldstein has accrued unpaid salary.

(2)Mr. Landry has accrued unpaid salary up to the date of his resignation as CFO in August 2023.

(3)Mr. Hastings has no accrued unpaid salary.

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30

 

Equity Incentive Plan

 

As of the date of this Report, the Registrant has not entered into any Equity Incentive Plans.

 

Option Grants in the Last Fiscal Year

 

No Stock Appreciation Rights (“SARs”) or options to purchase our stock were granted to the Named Executive Officers during fiscal year ended December 31, 2015.2023.

 

Retirement Plan

 

We do not currently have any retirement plan, but we expect to adopt one in the near term.

 

Director Compensation

 

The following table provides information concerning the compensation of the directors of the Company for the past fiscal year:

 

NameFees Earned or Paid in CashStock AwardsAll Other CompensationTotal
Dr. Gerald Entine$0$1,000$0$1,000
Robert I. Goldstein   $0$0$0$0
Name Fees
Earned or
Paid in Cash
  Stock
Awards
  All Other
Compensation
  Total 
Robert I. Goldstein $      0  $134,200  $         0  $134,200 
Michael Hastings $0  $64,000  $0  $64,000 
Dell Williamson $0  $40,880  $0  $40,880 
Michael Pope $0  $0  $0  $0 

 

There are no outstanding equity awards or options to directors issued or outstanding.

Compensation Committee

As of the date of this Form 10-K, we did not have a standing Compensation Committee.  We intend to establish a Compensation Committee of the Board of Directors.  The Compensation Committee would review and approve our salary and benefits policies, including compensation of executive officers.  The Compensation Committee would also administer any stock option plans that we may adopt and recommend and approve grants of stock options under such plans.

Audit Committee Financial Expert

 


The Company does not have an audit committee financial expert.

 

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31

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

As of the date of this Report, there were 13,475,00044,391,778 shares of common stock issued and outstanding. The following table sets forth certain information regarding the beneficial ownership of the outstanding shares as of the date of this Report, (i) each of our executive officers and directors; and (ii) all of our executive officers and directors as a group.

 

Except as otherwise indicated, each such person has investment and voting power with respect to such shares, subject to community property laws where applicable. The address for all individuals for whom an address is not otherwise indicated is 7051 Eton Avenue, Canoga Park, CA 91303.

Name of Beneficial Owner  Amount and Nature of
Beneficial Ownership
 

Percent (%) of

Common Stock

      
Named Executive Officers     
Robert I. Goldstein, President & CEO, Chairman  10,150,000 75.3%
      
Rachel Boulds, Chief Financial Officer and Secretary  25,000 *
      
Dr. Gerald Entine, Member of the Board of Directors  10,000  
      
   All Directors and Officers as a Group (3 persons)  10,185,000 75.3%
      
Richard Chiang (1)  1,909,500 14.1%
      
Non Director and Non Officer as a Group (1 person)   1,909,500 14.1%

Robert I. Goldstein and Dr. Gerald Entine are members of our Board of Directors and both Robert I. Goldstein and Rachel Boulds hold executive officer positions.

*indicates less than 1%

(1) Former President, CEO, Chairman of the Board of Directors. Includes 175,000 shares owned by Tech Associates, Inc., a company owned by Mr. Chiang. The address of the stockholder is: 75 Broadway Street, Suite 202, San Francisco, CA 94111. 

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Name of Beneficial Owner Amount and
Nature of
Beneficial
Ownership
  Percent (%) of
Common
Stock
 
       
Robert I. Goldstein, President & CEO, Chairman  12,250,000   30.5%
         
Richard Landry, CFO*  773,123   1.9%
         
Michael Hastings, CFO and Board Member**  1,439,051   3.6%
         
Dell Williamson, Board Observer  460,000   1.2%
         
All Directors and Officers as a Group (5 persons)  14,922,174   37.2%

*Mr. Landy resigned from his position as CFO as of August 12, 2023.
**Mr. Hastings was appointed as CFO on August 12, 2023.

Significant Employees

 

We are dependent on the experience, knowledge, skill and expertise of our President and CEO Robert I. Goldstein. We are also in large part dependent on current CFO, Rachel Boulds, Dell Williamson, Manager of the Overhoff Division, and Ivan Mitev, our Chief Engineer at the Overhoff Division, and Ian Embry in sales.sales, and Rowena Paredes in accounting. The loss of any of the key personnel listed above could materially and adversely affect our future business efforts. Our success depends in substantial part upon the services, efforts and abilities of Robert I. Goldstein, our Chairman and Chief Executive Officer, due to his experience, history and knowledge of the nuclear radiation industry and his overall insight into our business direction. The loss or our failure to retain Mr. Goldstein, or to attract and retain additional qualified personnel, could adversely affect our operations.  We do not currently carry key-man life insurance on Mr. Goldstein or any of our officers and have no present plans to obtain this insurance.

 

Family Relationships

 

There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.

 

Code of Ethics

32

 

As of the date of this Prospectus, we had not adopted a formal, written code of conduct (“Code of Ethics”) within the specific guidelines promulgated by the SEC, although we intend to adopt a Code of Ethics in the near future.

 

Meetings of the Board of Directors

 

Mr. Goldstein was elected director by the former sole stockholder of the Company in April 18, 2012.  On March 28, 2014, Dr. Gerald Entine was elected to serve on the Board of Directors. On May 22, 2018, Gerald Entine died, leaving a vacancy on the Board of Directors for the Company. In order to fill the vacancy resulting from Mr. Entine’s death, the Board of Directors consented in lieu of a meeting to nominate Dell Williamson for appointment to the Board of Directors following receipt and review from Mr. Williamson, his Confidential Bad Actor Disqualifying Event Statement confirming no “disqualifying event,” as defined under Rule 506(e) of Regulation D under the 1933 Securities Act and confirmation of receipt of the Company’s Insider Trading Policy and related memorandum regarding the same (as disclosed in prior filings). In addition, pursuant to Article IV of the Company’s Bylaws, as amended, the Board of Directors nominated Michael G. Hastings to serve as a director on the Board of Directors following receipt and review of the same disclosures and documents produced by Mr. Williamson, as identified herein. By signing the consent resolution, Mr. Williamson and Mr. Hastings accepted appointment as directors on the Board of Directors. On October 6, the Board of Directors nominated Michael Pope to serve as a director on the Board of Directors, following receipt and review of disclosure documents produced by Mr. Pope. The Board establishes policy and provides strategic direction, oversight, and control of the Company.  As of the date of this Form 10-K, the Board of Directors had no standing audit, compensation, nominating or other committees, although the Board intends to establish such committees in the future.  

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Nominating Committee

 

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

 

Audit CommitteeRetirement Plan

 

As of the date of this Prospectus, we did not have a standing Audit Committee.  We intend to establish an Audit Committee of the Board of Directors, which will consist of independent directors, of which at least one director will qualify as a qualified financial expert as defined in the regulations of the SEC.  The Audit Committee’s duties would be to recommend to our Board of Directors the engagement of independent auditors to audit our consolidated financial statements and to review our accounting and auditing principles.  The Audit Committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors, if any, and independent public accountants, including their recommendations to improve the system of accounting and internal control.  The Audit Committee would at all times be composed exclusively of directors who are, in the opinion of our Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.  As of the date of this Prospectus, we did not have an audit committee financial expert, in light of our size, although we intend to review this issue as the Company grows, especially as the Company implements a standing Audit Committee.

Retirement Plan

We do not currently have any retirement plan, but we expect to adopt one in the near term.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

As stated in our Item 2, Properties disclosure on this Form 10-K, the Company’s executive offices are located in Canoga Park, CA, at 7051 Eton Avenue, Canoga Park, California 91303. The lease payment for each facility was approximately $6,000, paid monthly. Themonthly through July 31, 2016. Per the Company’s lease agreement, the lease payment for the Canoga Park location was reducedincreased to $2,000 beginning May$7,000 on August 1, 2015.2016. Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. Mr. Goldstein holds an 8% interest in Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties.

 

During the year ended December 31, 2015,2023, the Company’s majority shareholder loaned the Company received $243,293 from Mr. Goldstein, our majority shareholder and repaid $52,629 under a note payable agreement.net of $345,600. The amountamounts due to Mr. Goldstein is $248,879are $1,220,279 and $874,679 as of December 31, 2015.2023, and 2022, respectively.

 

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Audit Fees

 

The aggregate fees billed by the Company’s current auditor Malone Bailey LLPFruci & Associates II, PLLC, for professional services rendered for the audit of our annual financial statements, review of our quarterly financial statements or services that are normally provided in connection with statutory and regulatory filings were $20,200$78,955 and $83,958 for the yearyears ended December 31, 2015.2023, and 2022, respectively.

 

The aggregate fees billed by the Company’s prior auditor Anton & Chia LLP for professional services rendered for the audit of our annual financial statements, review of our quarterly financial statements or services that are normally provided in connection with statutory and regulatory filings were $46,028 for the year ended December 31, 2014.

Audit Related Fees

 

There were no fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements for the year ended December 31, 20152023, or 2014.2022.

 

Tax Fees

 

There were noThe aggregate fees billed for professional services for tax compliance, tax advice, tax planning for the year ended December 31, 2015 or 2014.2023, and 2022 was $0 and 0, respectively.

 

All Other Fees

 

There were no fees billed for other products and services for the year ended December 31, 20152023, or 2014.2022.

 

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33

 

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESCHEDULES

 

15(a)(1). Financial Statements

 

The following consolidated financial statements, and related notes and Report of Independent Registered Public Accounting Firm are filed as part of this Annual Report beginning on page 57.Report:

 

15(a)(2). Financial Statement Schedules.

None.

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15(a)(3). Exhibits.

   Incorporated by reference 
ExhibitExhibit DescriptionFiled herewithFormPeriod endingExhibitFiling date 
3.1Certificate of Incorporation 10 3.102/14/2012 
3.2By-Laws 10 3.202/14/2012 
3.3Amendment to Certificate of Incorporation 8-K 3.305/29/2012 
4.1Specimen Stock Certificate 10 4.102/14/2012 
10.1Robert I. Goldstein Employment Agreement  10-Q 10.111/11/2014 
10.2

Forgiveness of Debt and Conversion Agreement

 

 

 10-Q 10.211/11/2014 
31.1Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X     
31.2Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

 

 

 

 

 

 

 

 

   
32.1Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X     
32.2Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X     
101.INSXBRL Instance DocumentX     
101.SCHXBRL Taxonomy Extension Schema DocumentX     
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentX     
101.LABXBRL Taxonomy Extension Label Linkbase DocumentX     
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentX     
101.DEFXBRL Taxonomy Extension Definition Linkbase DefinitionX     

(b) The following documents are filed as part of the report:

1. Financial Statements: Balance Sheet, Statement of Operations, Statement of Stockholder’s Equity, Statement of

Cash Flows, and Notes to Financial Statements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

U S Nuclear Corp.

By/s/ Robert I. Goldstein

Robert I. Goldstein

`          President, Chief Executive Officer, Chairman of the Board of Directors

Date: April 14, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:  April 14, 2016

US Nuclear Corp
By:/s/ Robert Goldstein
President, Chief Executive Officer, Chairman of the Board of Directors
By:/s/ Rachel Boulds
Chief Financial Officer, and Secretary

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US Nuclear Corp. and Subsidiaries

Consolidated Financial Statements

For The Years Ended December 31, 20152023 and 20142022

 

Contents

 

 Page

Reports of Independent Registered Public Accounting Firms

(PCAOB ID: 05525)
 F-2
  
Report of MaloneBailey, LLPConsolidated Financial Statements:58
  
Report of Anton & Chia, LLP59
  
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 20152023, and 2014202260F-4
  
Consolidated Statements of Operations for the years ended December 31, 2023, and 2022 F-5
December 31, 2015 and 201461
  
Consolidated Statement of Changes in Shareholders'Shareholders’ Equity for the years ended December 31, 2023, and 2022 F-6
December 31, 2015 and 201462
  
Consolidated Statements of Cash Flows for the years ended December 31, 2023, and 2022 F-7
December 31, 2015 and 201463
  
Notes to Consolidated Financial Statements64
 F-8

 

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Report of Independent Registered Public Accounting FirmF-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Boardshareholders and board of Directors and Stockholders

directors of US Nuclear Corp. Canoga Park, California

 

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of US Nuclear Corp. and Subsidiaries (collectively, (“the “Company”Company”) as of December 31, 2015,2023 and 2022, and the related consolidated statements of operation,operations, changes in stockholders’shareholders’ equity, and cash flows for each of the year then ended. years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit and net losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financingfinancial reporting. Our audit included considerationAs part of our audits, we are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.

 

InCritical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-2

Beneficial Conversion Features on Convertible Notes Payable

Description of Critical Audit Matter

As discussed in Note 7 to the consolidated financial statements, referredthe Company records beneficial conversion features associated with their convertible debt, which include down-round provisions. The valuation of such embedded derivative features requires a high degree of subjectivity and judgement.

Auditing management's valuations of such beneficial conversion features and down-round triggering events is complex and highly judgmental due to above present fairly, in all material respects, the financial positionsignificant estimation required to determine the fair value of US Nuclear Corp.the beneficial conversion to significant assumptions, such as of December 31, 2015, and the consolidated results of their operations and their cash flows forCompany’s exercise price on revalue dates.

How the year then ended, in conformity with accounting principles generally acceptedCritical Audit Matter Was Addressed in the United States of America.Audit

 

/s/ Malonebailey LLPOur audit procedures related to evaluating the Company’s accounting for beneficial conversion features associated with convertible debt included the following, among others:

www.malonebailey.com

Houston, Texas

April 13, 2016

 

-58- Developed an independent expectation and performed independent assessment of balance.

TableWe tested the completeness and accuracy of Contentsinputs entered into the Company’s calculations.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

US Nuclear Corp

7051 Eton Avenue

Canoga Park, CA 91303

 

Confirmations to lenders of the convertible notes payable and related terms as of yearend.

Fruci & Associates II, PLLC – PCAOB ID #05525

We have audited the accompanying consolidated balance sheets of US Nuclear Corp and Subsidiaries (the "Company")served as of December 31, 2014, and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

 We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company was not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audits procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company experienced recurring operating losses and negative cash flowauditor since inception and has financed its working capital requirements through issuances of notes payable to shareholders and common stock. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.2019.

  /s/ Anton & Chia, LLP

Newport Beach, California

April 15, 2015

 

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Spokane, Washington

US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2015 AND 2014
        
ASSETS
        
        
CURRENT ASSETS 2015 2014
        
 Cash  $                           419,126 $                140,253
 Accounts receivable, net                           181,084                  95,700
 Inventories                         2,320,333             2,343,729
 Prepaid expenses and other current assets                                     -                       1,800
TOTAL CURRENT ASSETS                        2,920,543             2,581,482
        
PROPERTY AND EQUIPMENT, net                               7,900                  14,454
GOODWILL                            570,176                570,176
TOTAL ASSETS $                       3,498,619$            3,166,112
        
LIABILITIES AND SHAREHOLDERS' EQUITY
        
CURRENT LIABILITIES    
Accounts payable$                            41,607$               175,033
Accounts payable, related party                                     -                     24,000
Accrued liabilities                            111,466                  93,431
Customer deposit                              49,040                196,185
Line of credit                            306,487                319,274
TOTAL CURRENT LIABILITIES                           508,600                807,923
        
Note payable to shareholder                           248,879                  58,215
TOTAL LIABILITIES                           757,479                866,138
        
Commitments and contingencies                                     -                             -   
        
SHAREHOLDERS' EQUITY:    
Preferred stock, $0.0001 par value, 5,000,000 shares    
  authorized; none issued and outstanding                                     -                             -   
Common stock, $0.0001 par value; 100,000,000 shares authorized,    
  13,475,000 and 13,265,000 shares issued and outstanding                               1,348                    1,327
Additional paid in capital                        3,178,409             3,136,680
Accumulated deficit                         (438,617)               (838,033)
TOTAL SHAREHOLDERS' EQUITY                        2,741,140             2,299,974
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $                       3,498,619$            3,166,112

May 10, 2024

The accompanying notes are an integral part of these consolidated financial statements

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US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
      
      
     2015 2014
        
Sales   $                 2,652,878$              1,637,100
Cost of sales                    1,246,182                  904,874
Gross profit                    1,406,696                  732,226
        
Selling, general and administrative expenses                     982,390               1,036,892
        
Income (loss) from operations                     424,306                (304,666)
        
Other expense     
 Interest expense                      (24,890)                  (16,839)
  Total other expense                     (24,890)                  (16,839)
        
Income (loss) before provision for income taxes                     399,416                (321,505)
        
Provision for income taxes                               -                               -   
        
Net income (loss) $                    399,416$               (321,505)
        
        
Weighted average shares outstanding - basic and diluted                13,294,110             11,669,438
        
Earning (loss) per shares - basic and diluted$                          0.03$                     (0.03)

 

F-3

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2023 AND 2022

  2023  2022 
ASSETS      
CURRENT ASSETS      
Cash $152,840  $126,109 
Accounts receivable, net  342,172   329,858 
Note receivable  21,149   - 
Inventories  1,761,783   2,024,664 
Prepaid expenses and other current assets  -   26,370 
TOTAL CURRENT ASSETS  2,277,944   2,507,001 
         
Property and equipment, net  4,217   6,501 
Investments  4,539   10,059 
Acquisition deposit  -   15,000 
Goodwill  570,176   570,176 
TOTAL ASSETS $2,856,876  $3,108,737 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
CURRENT LIABILITIES        
Accounts payable $207,929  $100,398 
Accounts payable - related party  456,000   280,000 
Accrued liabilities  1,020,743   688,422 
Accrued compensation - officers  860,000   695,000 
Customer deposit  6,771   88,694 
Deferred revenue  51,578   - 
Notes payable  104,308   9,574 
Convertible notes payable, net of debt discount  600,614   412,953 
Note payable to shareholder  1,220,279   874,679 
Line of credit  311,273   307,321 
TOTAL CURRENT LIABILITIES  4,839,495   3,457,041 
         
TOTAL LIABILITIES  4,839,495   3,457,041 
         
COMMITMENTS & CONTINGENCIES  -   - 
         
SHAREHOLDERS’ EQUITY:        
         
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding  -   - 
Common stock, $0.0001 par value; 100,000,000 shares authorized, 40,173,778 and 31,621,242 shares issued and outstanding  4,017   3,162 
Common shares to be issued  126,000   39,000 
Additional paid in capital  16,454,048   14,740,401 
Accumulated deficit  (18,566,684)  (15,130,867)
TOTAL SHAREHOLDERS’ EQUITY  (1,982,619)  (348,304)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $2,856,876  $3,108,737 

The accompanying notes are an integral part of these consolidated financial statements.

 

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F-4

 

US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
 
       Additional   Total
   Common Stock Paid-in Accumulated Shareholders'
   Shares Amount Capital Deficit Equity
Balance, December 31, 2013     10,700,000 $            1,070 $    2,157,064 $         (516,528) $         1,641,606
 
Issuance of common stock for cash       1,540,000               154      108,391                  -               108,545
            
Issuance of common stock for services           25,000                  3          2,497                  -                  2,500
            
Conversion of note payable to shareholder       1,000,000               100      199,900                  -               200,000
            
Capital contribution from shareholder                  -                    -         668,828                  -               668,828
            
Net loss                  -                    -                 -            (321,505)          (321,505)
            
Balance, December 31, 2014     13,265,000            1,327    3,136,680         (838,033)         2,299,974
            
Issuance of common stock for services          210,000                 21     ��  41,729               41,750
            
Net loss                  -                    -                 -             399,416            399,416
            
Balance, December 31, 2015     13,475,000 $            1,348 $    3,178,409 $         (438,617) $         2,741,140

 

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 

  2023  2022 
Sales $2,231,095  $2,091,366 
Cost of sales  1,306,789   1,303,298 
Gross profit  924,306   788,068 
         
Operating expenses        
Professional fees  376,056   326,118 
Officer compensation  175,000   170,000 
Payroll and related expense  637,172   957,954 
Selling, general and administrative expenses  1,377,722   830,027 
Total operating expenses  2,565,950   2,284,099 
         
Loss from operations  (1,641,644)  (1,496,031)
         
Other income (expense)        
Interest expense  (307,136)  (63,912)
Loss on deconsolidation  (2,539)  - 
Amortization of debt discount  (1,347,070)  (482,852)
Loss on investment deposit  (15,000)  - 
Loss on extinguishment of debt  (79,646)  - 
Loss on conversion of stock  (32,710)  - 
Equity loss in investment  (8,059)  - 
Total other income (expense)  (1,792,160)  (546,764)
         
Loss before provision for income taxes  (3,433,804)  (2,042,795)
         
Provision for income taxes  -   - 
         
Net loss $(3,433,804) $(2,042,795)
         
Deemed dividend for down-round provision in warrants  (2,013)  (17,924)
         
Net loss attributed to common stockholders $(3,435,817) $(2,060,719)
         
Weighted average shares outstanding - basic and diluted  36,060,208   29,504,433 
Loss per share – basic and diluted $(0.10) $(0.07)

 The accompanying notes are an integral part of these consolidated financial statements.

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US NUCLEAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
          
         2015 2014
            
OPERATING ACTIVITIES     
 Net income (loss)   $       399,416 $         (321,505)
 Adjustment to reconcile net income (loss) to net    
  cash provided by (used in) operating activities:    
   Depreciation and amortization            6,554              7,331
   Common stock issued for services         41,750              2,500
   Changes in:       
    Accounts receivable          (85,384)           489,113
    Inventories           23,396         (922,087)
    Prepaid expenses and other current assets           1,800              3,000
    Accounts payable        (157,426)            58,783
    Accrued liabilities           18,035            32,359
    Customer deposits        (147,145)           186,950
            
    Net cash provided by (used in) operating activities       100,996         (463,556)
            
INVESTING ACTIVITIES     
 Purchases of property and equipment                 -                (1,242)
            
    Net cash used in investing activities               -                (1,242)
            
FINANCING ACTIVITIES     
 Net borrowings (repayments) under lines of credit        (12,787)           (35,981)
 Proceeds from sale of common stock                -              108,545
 Proceeds from note payable to shareholder       243,293           266,614
 Repayments for note payable to shareholder        (52,629)                   -   
            
    Net cash provided by financing activities       177,877           339,178
            
NET INCREASE (DECREASE) IN CASH       278,873         (125,620)
            
CASH        
 Beginning of the period         140,253           265,873
 End of the period   $       419,126 $           140,253
            
Supplemental disclosures of cash flow information    
 Taxes paid    $               -    $                   -   
 Interest paid    $         24,890 $            16,839
            
Non-cash investing and financing activities    
 Conversion of note payable to shareholder to common stock $               -    $           200,000
 Contribution of note payable to shareholder to additional paid-in capital $               -    $           668,828

The accompanying notes are an integral part of these consolidated financial statements.

 

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F-5

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

        Common  Additional     Total 
  Common Stock  Stock  Paid-in  Accumulated  Shareholders’ 
  Shares  Amount  Payable  Capital  Deficit  Equity 
Balance, December 31, 2021  28,353,215  $2,835  $-  $13,508,582  $(13,070,148) $441,269 
Issuance of common stock for services  1,043,027   105   -   197,865   -   197,970 
Issuance of common stock for loan incentive  625,000   62   -   99,957   -   100,019 
Issuance of common stock for debt and interest  1,600,000   160   -   259,840   -   260,000 
Common shares to be issued for services  -   -   39,000   -   -   39,000 
Debt discount on issuance of convertible debt  -   -   -   656,233   -   656,233 
Deemed dividend for down-round provision in warrants  -   -   -   17,924   (17,924)  - 
Net loss  -   -   -   -   (2,042,795)  (2,042,795)
Balance, December 31, 2022  31,621,242  $3,162  $39,000  $14,740,401  $(15,130,867) $(348,304)
                         
Issuance of common stock for services  4,920,300   492   -   453,673   -   454,165 
Issuance of common stock for debt and interest  2,083,000   208   -   350,683   -   350,891 
Deemed dividend for down-round provision in warrants  -   -   -   2,013   (2,013)  - 
Common shares to be issued for services  260,000   26   87,000   (87,026)  -   - 
Additional BCF discount for down-round provision on notes  -   -   -   912,248   -   912,248 
Cashless exercise of warrants  1,289,236   129   -   (129)  -     
Investment in Averox  -   -   -   2,539   -   2,539 
Debt discount on issuance of warrant  -   -   -   79,646   -   79,646 
Net loss  -   -   -   -   (3,433,804)  (3,433,804)
Balance, December 31, 2023  40,173,778  $4,017  $126,000  $16,454,048  $(18,566,684) $(1,982,619)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

  2023  2022 
       
OPERATING ACTIVITIES      
Net loss $(3,433,804) $(2,042,795)
Adjustment to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  3,141   3,218 
Bad debt expense  6,590   - 
IRS Penalties  117,154   - 
Issuance of common stock for services  454,165   267,246 
Amortization of debt discounts  1,347,070   482,852 
Finance costs  197,643   8,750 
Loss on deconsolidation  2,539   - 
Loss on investment deposit  15,000   - 
Loss on extinguishment of debt  79,646   - 
Loss on conversion of stock  32,710   - 
Equity loss in investment  8,059   - 
Changes in operating assets and liabilities:        
Accounts receivable  (18,904)  (166,281)
Inventories  262,881   (232,352)
Prepaid expenses and other current assets  26,370   (12,620)
Accounts payable  107,531   8,539 
Accounts payable - related parties  176,000   151,500 
Accrued liabilities  218,110   115,532 
Accrued compensation - officers  165,000   105,000 
Deferred revenue  51,578   - 
Customer deposits  (81,923)  (12,648)
Net cash used in operating activities  (263,444)  (1,324,059)
         
INVESTING ACTIVITIES        
Purchase of property and equipment  (858)  - 
Note receivable  (21,149)  - 
Cash paid for investment  (2,539)  - 
Net cash used in investing activities  (24,546)  - 
         
FINANCING ACTIVITIES        
Net borrowings (repayments) under lines of credit  3,952   26,149 
Proceeds from notes payable  122,501   - 
Repayments on notes payable  (27,767)  (37,217)
Proceeds from convertible notes payable  -   916,500 
Repayments on convertible notes payable  (129,565)  - 
Proceeds from note payable to shareholder  432,200   304,633 
Repayments for note payable to shareholder  (86,600)  (6,214)
Net cash provided by (used in) financing activities  314,721   1,203,851 
         
NET INCREASE (DECREASE) IN CASH  26,731   (120,208)
         
CASH        
Beginning of period  126,109   246,317 
End of period $152,840  $126,109 
         
Supplemental disclosures of cash flow information        
Taxes paid $-  $- 
Interest paid $20,435  $11,973 
Non-Cash investing and financing activities        
Beneficial conversion feature on down-round provision $912,248  $239,044 
Common shares issued for future services $126,000  $39,000 
Deemed dividend on down round provision $2,013  $17,924 
Common stock issued for conversion of convertible debt and accrued interest $351,890  $260,000 
Original issue debt discount $-  $751,026 

The accompanying notes are an integral part of these consolidated financial statements.

F-7

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Note 1 - Organization and Basis of Presentation

 

Organization and Line of Business

  

US Nuclear Corp., formerly known as APEX 3, Inc., (the “Company” or “US Nuclear”) was incorporated under the laws of the State of Delaware on February 14, 2012. Optron Scientific Company, Inc. (“Optron”) was incorporated in the State of California on December 24, 1971.

 

On October 15, 2013, the Company entered into a share exchange agreement and plan of merger with Optron. Pursuant to the agreement, the Company acquired from Optron all of the issued and outstanding capital stock consisting of 98,372 shares of common stock in exchange for 9,150,000 shares of the Company’s common stock.

Concurrently with the closing of the transactions,May 31, 2016, the Company entered into an agreementAsset Purchase Agreement with the Company’s former majority stockholder, sole director and chief executive officer, pursuant to which he returned 9,150,000 shares of the Company’s common stock for cancellation. The Company’s former majority stockholder, sole director and chief executive officer was not compensated for the cancellation of his shares of the Company’s common stock. Upon completion of the foregoing transactions,Electronic Control Concepts (“ECC”) whereby the Company had an aggregatepurchased certain tangible and intangible assets of 10,700,000 shares of common stock issued and outstanding.

The exchange of shares with Optron was accounted for as a reverse acquisition under the purchase method of accounting since Optron obtained control of the Company. Accordingly, the merger of Optron into the Company was recorded as a recapitalization of Optron, Optron being treated as the continuing entity. The historical financial statements presented are the financial statements of Optron. The share exchange agreement has been treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the date of this transaction, the net liabilities of the legal acquirer, US Nuclear, were $12,901.ECC.

 

The Company is engaged in developing, manufacturing, and selling radiation detection and measuring equipment. The Company markets and sells its products to consumers throughout the world.

 

Basis of Presentation

 

The accompanying consolidated financial statements and have been prepared in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company recorded a net loss of $3,433,804 for the year ended December 31, 2023, and had an accumulated deficit of $18,566,684 as of December 31, 2023, which raises substantial doubt about its ability to continue as a going concern. 

The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. 

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Note 2 – Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Optron, and its wholly-owned subsidiary, Overhoff Technology Corporation (“Overhoff”), and its wholly-owned subsidiary, Electronic Control Concepts (“ECC”), have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.

 

F-8

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. There were no cash equivalents as of December 31, 20152023 and 2014.2022.

 

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the FDIC insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk. 

Accounts Receivable

 

The Company maintains reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.  Reserves are recorded based on the Company’s historical collection history. Allowance for doubtful accounts as of December 31, 20152023 and 20142022 were $5,000$6,590 and $5,000,$-, respectively.

 

Inventories

 

Inventories are valued at the lower of cost (determined primarily by the average cost method) or market.net realizable value. Management compares the cost of inventories with the marketnet realizable value and allowance is made for writing down their inventories to marketnet realizable value, if lower. As of December 31, 2023 and 2022, the Company recorded $37,351 and $0, respectively, in allowance for slow moving or obsolete inventory. The Company periodically assessed its inventory for slow moving and/or obsolete items. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.

 

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F-9

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Property and Equipment

 

Property and Equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Furniture and fixtures5 years
Leasehold improvementLesser of lease life or economic life
Equipment5 years
Computers and software5 years

 

Long-Lived Assets

 

The Company applies the provisions of ASCAccounting Standards Codification (“ASC”) Topic 360,Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at December 31, 20152023 and 2014,2022, the Company believes there was no impairment of its long-lived assets.

 

Goodwill

 

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. The entire goodwill balance in the accompanying financial statements resulted from the Company’s acquisition of Overhoff Technology Corporation in 2006. The Company complies with ASC 350,Goodwill and Other Indefinite Lived Intangible Assets, requiring that a test for impairment be performed at least annually. As of December 31, 20152023 and 20142022, the Company performed the required impairment analysis which resulted in no impairment adjustments. Although the Company experienced a significant decline in revenue due to the effects of COVID-19, management expects that it is more likely than not that its revenue and cost of goods sold will be more in-line with pre-COVID-19 levels in upcoming periods. Significant estimates used in the goodwill impairment analysis may change in the upcoming year if revenues do not rebound and cost of materials continue to increase.

 

Derivative Financial Instruments

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. During the years ended December 31, 2023, and 2022, there were no derivative liabilities associated with our convertible notes payable.

F-10

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Investments

The Company accounts for investments in equity securities without a readily determinable fair value at cost, minus impairment. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company measures the equity security at fair value as of the date that the observable transaction occurred (“the measurement alternative”) in accordance with ASC 321. The Company accounts for investments for which it owns 20% or more, but less than 50% on the equity method in accordance with ASC 323. 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and line of credit, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has a note payable to a shareholder that the carrying amount also approximates fair value.

 

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We apply fair value accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides the framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820 defines fair value as the exchange price that would have been received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

 

Revenue RecognitionLevel 1 – Quoted prices in active markets for identical assets or liabilities.

 

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.

Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value.

Revenue Recognition

Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies complythat are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. Assales are and have been primarily from the sale of products to customers, and the Company has no significant post-delivery obligations, this new standard did notresult in a material recognition of revenue on the Company’s accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously reported total revenues, as those periods continue to be presented in accordance with FASB ASC its historical accounting practices under Topic 605.605, Revenue Recognition.

Revenue from the product sales is recognized atunder Topic 606 in a manner that reasonably reflects the datedelivery of shipmentits products to customers when a formal arrangement exists,in return for expected consideration and includes the price is fixed or determinable, the delivery is completed, no other significantfollowing elements:

executed contracts with the Company’s customers that it believes are legally enforceable;

identification of performance obligations in the respective contract;

determination of the transaction price for each performance obligation in the respective contract;

allocation the transaction price to each performance obligation; and

recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company exist and collectabilityCompany’s revenue category, is reasonably assured. summarized below:

Product sales - revenue is recognized when the Company performs its obligations under the contracts it has with its customers to deliver products at an agreed upon price and it is generally when the control of the product has been transferred to the customer.

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits.

 

F-11

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Sales returns and allowances waswere $0 and $0 for the yearyears ended December 31, 20152023, and 2014.2022, respectively. The Company provides a one-year warranty on all sales. Warranty expense for the years ended December 31, 2023, and 2022 was insignificant. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

 

See Notes 12 and 13 for disclosures of revenue disaggregated by geographical area and product line.

Customer Deposits

 

Customer deposits represent cash paid to the Company by customers before the product has been completed and shipped.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.”Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

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Stock-Based Compensation

 

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718,Compensation – Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

 

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260,Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. ThereAs of December 31, 2023, and 2022 there were no potentially dilutive securities1,000,000 and 2,500,000 warrants outstanding, respectively, to purchase shares of common stock. Basic and diluted earnings per share are the same during the yearyears ended December 31, 20152023, and 2014.2022 due to the net loss incurred. As of December 31, 2023, the number of potentially dilutive shares issuable on our convertible notes and accrued interest was 5,940,258.

F-12

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Segment Reporting

 

Segment Reporting

FASB ASC Topic 280,Segment Reporting, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 8.12. 

 

Related Parties

The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Reclassifications

 

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or stockholders’shareholders’ equity.

 

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Recent Accounting Pronouncements

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) -Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02,Consolidation (Topic 810): Amendments to the Consolidation Analysis.ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In September, 2015, the FASB issued ASU No. 2015-16,Business Combinations (Topic 805).Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17,Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

In FebruaryJune 2016, the FASB issued ASU No. 2016-02,2016-13, LeasesFinancial Instruments—Credit Losses (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840,Leases (FAS 13)326): Measurement of Credit Losses on Financial Instruments. ASU 2016-02 requires2016-13 was issued to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses.  Full lifetime expected credit losses will be recognized upon initial recognition of an entity to recognize assetsasset in scope.  The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold.  The expected credit losses estimate will be based upon historical information, current conditions, and liabilities arising from a lease for both financingreasonable and operating leases, along with additional qualitative and quantitative disclosures.supportable forecasts.  This ASU 2016-02as amended by ASU 2019-10, is effective for fiscal years beginning after December 15, 2018,2022.  

The adoption had no effect on the Company’s consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021.  The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlyearlier application permitted.  The adoption had no effect on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. The main provisions of ASU 2023-09 require a public entity to disclose on an annual basis (i) specific prescribed categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, (iii) the amount of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes, (iv) the amount of income taxes paid, net of refunds received, disaggregated by individual jurisdictions in which income taxes paid is equal to greater than 5 percent of total income taxes paid, (v) income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign, and (vi) income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 also removes certain disclosure requirements related to unrecognized tax benefits and cumulative unrecognized temporary differences. The new guidance is effective for the fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact ASU 2023-09 will have on the Company’s consolidated financial statement disclosures.

F-13

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluating the effectimpact this standardASU will have on its consolidated financial statements.

 

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The main provisions of ASU 2023-07 require a public entity to disclose on an annual and interim basis: (i) significant segment expenses provided to the chief operating decision maker, (ii) an amount representing the difference between segment revenue less segment expenses disclosed under the significant segment expense principle and each reported measure of segment profit or loss and a description of its composition, (iii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required under Topic 280 in interim periods, (iv) clarify that if the chief operating decision maker uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit, (v) the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (vi) all disclosures required by ASU 2023-07 and all existing segment disclosures under Topic 280 for an entity with a single reportable segment. The new guidance is effective for the fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating the impact ASU 2023-07 will have on the Company’s consolidated financial statement disclosures.

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Note 3 – Inventories

 

Inventory at December 31, 20152023 and 20142022 consisted of the following:

 

 December 31, December 31,
 2015 2014 2023  2022 
Raw materials$1,139,827$782,732 $983,996  $1,244,880 
Work in Progress 710,041 931,686  283,568   409,637 
Finished goods 470,465 629,311  494,219   370,127 
$2,320,333$2,343,729
Total inventories $1,761,783  $2,024,664 

At December 31, 2023 and 2022 the inventory reserve was $0.

Note 4 – Property and Equipment

 

The following are the details of property and equipment at December 31, 20152023 and 2014:2022:

 

 2015 2014 2023  2022 
Furniture and fixtures$146,684$146,684 $148,033  $148,033 
Leasehold Improvements 50,091 50,091  50,091   50,091 
Equipment 212,076 212,076  237,418   237,418 
Computers and software 27,259 27,259  40,339   39,482 
 436,110 436,110  475,881   475,024 
Less accumulated depreciation          (428,210)          (421,656)  (471,664)  (468,523)
Property and equipment, net$7,900$14,454 $4,217  $6,501 

 

Depreciation expense for the years ended December 31, 20152023, and 20142022 was $6,554$3,141 and $7,331,$3,218, respectively. At December 31, 2015,2023 and 2022, the Company has $299,429had $440,628 of fully depreciated property and equipment that is still in use.

F-14

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Note 5 – Investments

MIFTEC

On August 3, 2018, the Company closed an agreement by and among, MIFTEC Laboratories, Inc. (“MIFTEC”), a licensee of Magneto-Inertial Fusion Technologies, Inc., (“MIFTI”), and the Company. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC will engage the Company to manufacture equipment pursuant to MIFTEC’s specifications and designs and have the Company as a sales representative for the manufactured equipment. The Company will be the exclusive manufacturer and supplier to MIFTEC of equipment in North America and Asia. In addition, the Company received a 10% ownership interest in MIFTEC. The consideration for the exclusive manufacturing rights and a 10% ownership interest in MIFTEC was $500,000 and 300,000 shares of the Company’s common stock valued at $594,000. The fair value was determined based on the Company’s stock price on August 3, 2018. The Company recorded the value of the 10% interest in MIFTEC at $10,000 and recorded $1,084,000 as the acquisition of manufacturing and supply rights in the accompanying consolidated statement of operations during the year ended December 31, 2018. The Company evaluated this investment for impairment and determined that an impairment of $9,000 was necessary during the year ended December 31, 2019. The carrying value of this investment at December 31, 2023 and 2022 was $1,000 and $1,000, respectively.

MIFTI

In April 2019, the Company also entered into a Cooperative Agreement with MIFTI whereby the Company acquired certain exclusive manufacturing and supply rights, including thermonuclear fusion-powered reactor for production of electricity per MIFTI designs in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The $500,000 is an option to buy a 10% interest in MIFTI for $2,700,000, if completed with 24 months of the agreement date. If the option expires, MIFTI shall issue the Company 500,000 shares of common stock and rescind all other exclusive rights contained in the agreement. The option was rescinded, and the Company received 500,000 shares of MIFTI common stock which represents an ownership of approximately 0.56% for its $500,000 investment. The Company evaluated this investment for impairment and determined that an impairment of $499,000 was necessary during the year ended December 31, 2019. The carrying value of this investment at December 31, 2023 and 2022 was $1,000 and $1,000, respectively.

GRAPHETON

On February 5, 2020, the Company entered into a Stock Purchase Agreement (“SPA”) with Grapheton, Inc., a California corporation (“Grapheton”). The transaction was closed on March 12, 2020. Grapheton is a start-up company that focuses on building energy storage devices, known as supercapacitors, from a new material system. The technology utilized by Grapheton has been proven to provide a compelling advantage in microelectrode arrays with superior electrical and electrochemical properties.

Pursuant to the terms of the SPA, the Corporation will acquire a total of 2,552 shares of Grapheton’s common stock over a two-year period. At closing, the Company was issued at total of 1,452 shares of Grapheton’s common stock for $235,000 and 858,896 shares of the Company’s common stock valued at $601,227.

In connection with the SPA, during the second quarter of 2021 the Company received an additional 1,100 shares of Grapheton’s common stock in exchange for the Company’s issuing an additional 1,121,071 shares of common stock valued at $633,405. In addition, Grapheton fulfilled its requirements under the earn out provision and the Company is obligated to make the first earn out payment of $192,500. This amount is recorded as accrued expense in the accompanying consolidated balance sheet.

An additional “true up” issuance of the Company’s common stock to Grapheton may be made on the second anniversary of the closing of the SPA, based on the valuation of the Company’s common stock on that date by a third-party valuator.

The Company currently owns 35.2% of Grapheton and accounts for its investment in Grapheton using the equity method of accounting in accordance with ASC 323.

F-15

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Information regarding Grapheton as of and for the year ended December 31, 2023, is below:

Current assets $7,940 
Total assets  13,315 
Current liabilities  1,213,333 
Total liabilities  1,213,333 
Total stockholders’ equity  (1,200,018)
     
Revenue $- 
Operating expenses  (662,005)
Other expenses  (106,357)
Net loss  (768,362)

The Company evaluated this investment and recorded a loss attributed to equity investment of $0 during the year ended December 31, 2023. The carrying value of this investment on December 31, 2023 was $0. 

Note 6 – Deconsolidation of Subsidiary

On March 3, 2023, the Company divested itself of its wholly owned subsidiary, Cali From Above, through a Membership Interest Purchase Agreement with the Company’s President and Chief Executive Officer, Robert Goldstein. Consideration received by the Company was 65,000,000 shares of Averox, Inc. (OTC:AVRI), resulting in the Company owning 26% of the issued and outstanding shares of common stock of AVRI. The Company considered the guidance under ASC 810-10-40 in determining the accounting treatment for the transaction and it was determined that the fair value of the 65,000,000 shares received on March 3, 2023, was $2,539, which was the fair value of the assets transferred upon deconsolidation by the Company. Additionally, this method was used due to there being no active trading by Averox on the date of the transaction. Also at closing, the Company and Cali From Above signed a Cooperation Agreement whereby the Company holds exclusive sourcing and manufacturing rights for Cali From Above products, thus making Cali From Above a new customer of the Company.

Upon deconsolidation, the Company recorded a loss of $2,539, reflecting the value of $2,539 in cash in Cali From Above.

Note 7 – Notes Payable

In connection with the acquisition of assets from ECC the Company issued a note payable to the owner of ECC. The note accrued interest at 5% per annum, requires quarterly principal and interest payments of $4,518 and is due on April 15, 2021. At December 31, 2023 and 2022, the amount outstanding under this note payable was $5,272 and $5,272, respectively.   The Company was in default on payment of the note payable as of December 31, 2023. The Company has communicated with the debt holder, and the amount is considered payable on demand as of December 31, 2023.

On December 26, 2020, a line of credit held by the company had matured, and based on the terms of the line of credit agreement was converted to a note payable upon demand. The obligation accrues interest at the rate of $10.89 per day until the bank receives full payment. As of December 31, 2023, the balance owed by the Company was $1,500.

On May 5, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $750,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the incentive shares issued as discussed at Note 11, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discounts recorded as of the date of the note was $550,538. At December 31, 2023, and 2022, and pursuant to the down-round provision of the note and associated warrants, the Company reevaluated the beneficial conversion feature which resulted in additional debt discount recorded of $448,089 and $183,422, respectively. The principal balance owed as of December 31, 2023, and 2022, was $408,007 and $519,853, respectively.

On October 10, 2022, the Company received a loan in connection with the issuance of stock warrants in the amount of $375,000. The loan has terms of 12 months and accrues interest at 5% per annum. As part of the issuance of the loan, the company identified debt discounts related to the warrants issued, the beneficial conversion feature of the debt, and the expenses paid as part of the issuance. The total debt discounts recorded as of the date of the note was $200,488. At December 31, 2023, and 2022, and pursuant to the down-round provision of the note and associated warrants, the Company reevaluated the beneficial conversion feature recorded which resulted in additional debt discount recorded of $464,159 and $30,304, respectively. The principal balance owed as of December 31, 2023, and 2022 was $239,685 and $375,000, respectively.

F-16

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

The total amortization of debt discounts recorded on the Company’s convertible notes for the twelve months ended December 31, 2023, was $1,347,070.

On October 12, 2023, the Company entered into a note payable in the amount of $125,000 and included an origination fee of $2,500, which was deducted from the proceeds. The note bears non-annualized interest of $25,000 and 52 payments of $2,885 are to be paid weekly until paid in full. As of December 31, 2023, the balance on the note was $96,536.

During the twelve months ended December 31, 2023, the Company received $2,500 from Cali From Above, a related party. The note is payable on demand and non-interest bearing.

Future maturities of all notes payable as of December 31, 2023, are as follows: 

Years Ending December 31,   
2023  570,176 
2024  - 
2025  - 
2026  - 
2027  - 
2028  - 
Thereafter  - 
  $570,176 

Note 5 -8 – Note Payable to Shareholder

 

Robert Goldstein, the CEO and majority shareholder, has loaned funds to the Company from time to time to cover general operating expenses. These loans are evidenced by unsecured, non-interest bearingnon-interest-bearing demand notes due on December 31, 2018. As of December 31, 2013 the balance due on the notes was $660,429. During 2014, the Company received $266,614 from its majority shareholder under this note payable agreement. On September 30, 2014, Mr. Goldstein converted $200,000 of a note payable into 1,000,000 shares of the Company’s common stock. In addition, on September 30, 2014, Mr. Goldstein also forgave $668,828 of the note payable. This forgiveness of debt is being treated as a capital contribution from the Company’s majority shareholder. During the year ended December 31, 2015,2023, the Company’s majority shareholder loaned $432,200 to the Company received $243,293 from its majority shareholder and was repaid another $52,629 under this note payable agreement.$86,600.  The amounts due to Mr. Goldstein are $248,879$1,220,279 and $58,215$874,679 as of December 31, 20152023, and 2014,2022, respectively.

 

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Table of Contents

Note 69LineLines of Credit

 

As of December 31, 20152023, the Company had fourthree lines of credit with a maximum borrowing amount of $400,000 with interest ranging from 3.25%5.5% to 9.25%11.5%. As of December 31, 20152023, and 2014,2022, the amounts outstanding under these lines of credit were $306,487$311,273 and $319,274,$307,321, respectively.

Note 10 – Leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding.

The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. The leases expired on April 30, 2020 and the Company exercised its renewal option for an additional 12 months. The new lease is not more than 12 months; therefore, the disclosures under ASC 842 are not required. Future minimum lease payments under this agreement for the twelve months ending December 31, 2024 is $168,000. Effective January 1, 2019, the Company adopted the provision of ASC 842 Leases.

F-17

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

The lease expense for the years ended December 31, 2023, and 2022 was $168,000 and $168,000, respectively. The cash paid under operating leases during the years ended December 31, 2023, and 2022 was $0 and $16,500, respectively. As of December 31, 2023, $456,000 has been accrued and is shown on the balance sheet as accounts payable-related party. As of December 31, 2023, the weighted average remaining lease terms were 0.3 years and the weighted average discount rate was 8%.

Note 711 – Shareholders’ Equity

 

See Note 1 for discussion of shares issued and canceled in connection with the share exchange agreement and plan of merger agreement.Common stock

 

On September 30, 2014,During the Company’s CEO and majority shareholder converted $200,000 of a note payable into 1,000,000 shares oftwelve months ended December 31, 2023, the Company’s common stock. In addition, the Company’s CEO also forgave the remaining balance of the note payable of $668,828. This forgiveness of debt is being treated as a capital contribution from the Company’s majority shareholder.Company issued:

2,600,000 shares of common stock to its Directors and President, valued at $239,080; and

2,083,000 shares of common stock valued at $350,891 in satisfaction of convertible debt and interest; and

2,580,300 shares of common stock to consultants for services rendered valued at $215,085. The fair value was determined based on the Company’s stock price on the grant date; and

771,845 and 517,391 shares of common stock in a cashless exercise of 1,500,000 and 1,000,000 warrants, respectively.

 

During the year ended December 31, 2014,2022, the Company sold 1,090,000issued:

625,000 shares of common stock valued at $100,019 in relation to the debt that was obtained;

1,600,000 shares of common stock valued at $260,000 in satisfaction of convertible debt and interest;

1,043,027 shares of common stock to consultants for services rendered valued at $236,970; of which $39,000 is recorded as shares to be issued. Pursuant to ASC 718 the company has allocated a portion of stock-based compensation to prepaid expenses until the services are provided to the Company. The amount allocated to prepaid expense at December 31, 2022 was $9,750. The fair value was determined based on the Company’s stock price on the grant date.

F-18

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Warrants

The following table summarizes the activity related to warrants:

        Weighted    
     Weighted  Average    
     Average  Remaining  Aggregate 
  Warrants  Exercise  Contractual  Intrinsic 
  Outstanding  Price  Life  Value 
Outstanding, December 31, 2021  333,333  $0.36   0.90  $        - 
Granted  2,500,000  $0.14   3.00  $- 
Forfeited  (333,333) $-   -  $- 
Exercised  -             
Outstanding, December 31, 2022  2,500,000  $0.11   2.32  $- 
Granted  1,000,000  $0.05   5.00  $- 
Forfeited  -             
Exercised  (2,500,000)            
Outstanding, December 31, 2023  1,000,000  $0.05   4.86  $- 
Exercisable, December 31, 2023  1,000,000  $0.05   4.86  $- 

The above warrants contain a down-round provision that requires the exercise price to be adjusted if the Company sells shares of itscommon stock below the current exercise price. During the twelve months ended December 31, 2023, the Company issued shares of common stock for proceeds$0.052 therefore, the exercise price of $108,500, net of $500these warrants was adjusted from $0.75 to $0.052 pursuant to the down-round provision in offering costs and issued 25,000 shares of its common stock for services valued at $2,500.the warrant agreement.  The change in fair value between the value of the shareswarrants using the new exercise price versus the old exercise price was determined based on recent sales ofcalculated to be $2,013. This amount is recorded as a deemed dividend in the Company’s common stock.accompanying consolidated financial statements during the year ended December 31, 2023.

 

On April 30, 2015, the Company issued 10,000 shares of its common stock to a director for services valued at $1,000 The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.

On November 23, 2015, the Company issued 175,000 shares of its common stock for services valued at $35,000. The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.

On October 31, 2015, the Company issued 25,000 shares of its common stock to its CFO for services valued at $5,750 The value of the shares was determined based on the market price of the Company’s common stock on the date of issuance.

Note 8 -12 – Segment Reporting

 

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has two reportable segments: Optron and Overhoff. Optron is located in Canoga Park, California and Overhoff is located in Milford, Ohio. The assets and operations of the Company’s recent acquisition of the assets of Electronic Control Concepts are included with Overhoff in the table below. The assets and operations of the Company’s subsidiary, Cali From Above are included with Optron in the table below up to the date of deconsolidation on March 3, 2023. (See Note 6)

 

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F-19

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

The following tables summarize the Company’s segment information for the years ended December 31, 20152023, and 2014:2022:

 

 Year Ended December 31,
  2015 2014 Years Ended
December 31,
 
  2023  2022 
Sales Sales      
 Optron$643,489$676,851
 Overhoff 2,009,389 960,249
 Corporate - -
Optron $277,511  $220,368 
Overhoff  1,953,584   1,870,998 
Corporate  -   - 
 $2,652,878$1,637,100 $2,231,095  $2,091,366 
         
Gross profit Gross profit         
 Optron$281,052$230,907
 Overhoff 1,125,644 501,319
 Corporate - -
Optron $152,772  $(547,531)
Overhoff  771,534   1,335,599 
Corporate  -   - 
 $1,406,696$732,226 $924,306  $788,068 
         
Income (loss) from operations Income (loss) from operations         
 Optron$29,454$(118,689)
 Overhoff 580,891 (96,589)
 Corporate (186,039) (89,388)
 $424,306$(304,666)
Optron $(985,804) $(1,484,631)
Overhoff  12,567   486,382 
Corporate  (668,407)  (497,782)
  $(1,641,644) $(1,496,031)
Interest Expenses Interest Expenses         
 Optron$21,930$16,839
 Overhoff 2,960 -
 Corporate - -
Optron $14,346  $21,725 
Overhoff  19,391   6,545 
Corporate  273,399   35,643 
 $24,890$16,839 $307,136  $63,912 
         
Net income (loss) Net income (loss)         
Optron $(1,007,689) $(1,506,357)
Overhoff  (1,824)  479,837 
Corporate  (2,434,291)  (1,016,275)
 Optron$7,524$(96,589) $(3,433,804) $(2,042,795)
 Overhoff 577,931 (135,528)
 Corporate (186,039) (89,388)
 $399,416$(321,505)
 
 As of As of
  December 31,  December 31,
 2015 2014
Total Assets 
 Optron$1,318,749$1,127,316
 Overhoff 2,170,499 1,949,043
 Corporate 9,371 89,753
 $3,498,619$3,166,112
 
Goodwill 
 Optron$-$-
 Overhoff 570,176 570,176
 Corporate - -
 $570,176$570,176

  As of December 31, 
  2023  2022 
Total Assets      
Optron $830,844  $1,021,817 
Overhoff  2,007,107   2,037,988 
Corporate  18,925   48,932 
  $2,856,876  $3,108,737 
         
Goodwill        
Optron $-  $- 
Overhoff  570,176   570,176 
Corporate  -   - 
  $570,176  $570,176 
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F-20

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Note 9 -13 – Geographical Sales

 

The geographical distribution of the Company’s sales for the years ended December 31, 20152023, and 20142022 is as follows:

 

   Years Ended December 31,
   2015 2014
 Geographical sales    
  North America$1,227,772$703,953
  Asia 915,429 245,565
  South America 310,961 11,050
  Other 198,716 676,532
  $2,652,878$1,637,100
  2023  2022 
Geographical sales      
North America $1,976,172  $1,535,671 
Asia  172,308   523,434 
South America  12,356   5,475 
Other  70,259   26,786 
  $2,231,095  $2,091,366 

 

Note 1014 – Income Taxes

 

At December 31, 20152023 and 2014,2022, the significant components of the deferred tax assets are summarized below:

 

 2015 2014 2023  2022 
         
Approximate net operating loss carry forwards$328,000$691,000 $15,927,000  $12,649,000 
            
Deferred tax assets:            
Federal net operating loss$150,576$273,879 $3,344,643  $2,031,310 
State net operating loss 64,140 51,580  1,086,735   846,270 
Tax credit 49,740 49,740  49,740   49,740 
Goodwill (152,560) (136,276)  (148,373)  (148,373)
Total deferred tax assets 111,896 238,923  4,332,745   2,778,947 
Less valuation allowance (111,896) (238,923)  (4,332,745)  (2,778,947)
     $-  $- 
$-$-

 

The valuation allowance increased (decreased) by ($127,027)$1,553,998 and $172,100$552,000 in 20152023 and 2014 as a result of2022, respectively, due to the Company using net operating losses in 2015 and generating additional net operating losses in 2014.losses. The Company’s remaining tax credit carryforwards of $49,740 begin to expire in 2027 and its net operating loss carryforward of approximately $328,000 begin$15,927,000 begins to expire in 2028.

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2027.

 

Income tax expense reflected in the consolidated statements of income consist of the following for 20152023 and 2014:2022:

 

  2015  2014 2023  2022 
Current      
Federal$    -$    - $      -  $       - 
State       -       -  -   - 
     -     -  -   - 
Deferred            
Federal    -    -  -   - 
State    -    -  -   - 
  -  -  -   - 
    
Income tax expense$     -$     - $-  $- 

 

F-21

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

The reconciliation of the effective income tax rate to the federal statutory rate for the years ended December 31, 20152023, and 20142022 is as follows:

 

  2015  2014 2023  2022 
      
Federal income tax rate 34.0% -34.0%  21.0%  21.0%
State tax, net of federal benefit 6.0% -6.0%  6.0%  6.0%
Net operating losses -36.6% 40.0%  -27.5%  -27.5%
Tax credits 0.0% 0.0%
Permanent differences  -1.0%  -0.0%
Amortization of goodwill -3.4% 0.0%  0.0%  0.3%
Effective income tax rate 0.0% 0.0%  0.0%  0.0%

 

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2011.2019.

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The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

 

Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations. There were no interest or penalties accrued asAs of December 31, 20152023, and 2014.2022 penalties and interest accrued on unpaid payroll taxes were $117,154 and $0, respectively.

Note 1115 – Related Party Transactions

 

The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. Rent expenseexpenses for the yearsyear ended December 31, 20152023, and 20142022 were $108,000$176,000 and $144,000,$168,000, respectively. As of December 31, 20152023, and 2014,2022, the payable to Gold Team Inc. in connection with the above leases amountwas $456,000 and $280,000, respectively. (See Note 10).

As of December 31, 2023, and 2022, the Company had accrued compensation payable to $0its majority shareholder of $860,000 and $24,000,$695,000, respectively.

During the year ended, December 31, 2023, the company issued 530,300 shares of common stock to Richard Landry for a value of $32,348 or $.061 per share, the fair value on date of grant.

 

Also see Note 5.8. 

F-22

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

Note 12 -16 – Concentrations

 

FourFor the year ended December 31, 2023, three customers accounted for 19%, 18%, 11% andmore than 10% of the Company sales, 28.38%, 11.36%. and 11.07%, respectively. At December 31, 2023 two customers accounted for more than 10% of the accounts receivable balance, 70.1% and 12.2%, respectively.

For the year ended December 31, 2015. One customer2022, two customers accounted for 39%more than 10% of the Company sales, for the year ended42.3% and��13.61%, respectively. At December 31, 2014.2022 two customers accounted for more than 10% of the accounts receivable balance, 55.9% and 28.4%, respectively.

 

One vendor provided 22% of the Company’s purchases for the year ended December 31, 2015. No vendors provedaccounted for more than 10% of the Company’s purchases for the yearyears ended December 31, 2014.2023, and 2022.

Note 17 – Subsequent Events

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued and has determined that no material subsequent events exist other than the following:

On December 27, 2023, the Company authorized the issuance of 1,800,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $108,000 or $0.06 per share. As of December 31, 2023, the shares had not yet been issued and is recorded on the statement of equity as common shares to be issued. The shares were issued on January 2, 2024.

On February 13, 2024, the Company issued 500,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $30,000 or $0.06 per share.

On February 14, 2024, the Company issued 300,000 shares to a consultant for a value of $14,100.

On March 6, 2024, the Company issued 334,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $20,040 or $0.06 per share.

On March 15, 2024, the Company issued 50,000 shares to a consultant for a value of $2,000.

On March 15, 2024, the Company issued 900,000 shares to a consultant for a value of $36,000.

On March 19, 2024, the Company issued 334,000 shares in satisfaction of principle, accrued interest, and fees on convertible debt. The value of the shares issued was $20,040 or $0.06 per share.

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F-23

15(a)(2). Financial Statement Schedules.

None.

15(a)(3). Exhibits.

      Incorporated by reference
Exhibit Exhibit Description Filed
herewith
 Form Period
ending
 Exhibit Filing date
             
3.1 Certificate of Incorporation   10   3.1 03/02/2012
3.2 By-Laws   10   3.2 03/02/2012
3.3 Amendment to Certificate of Incorporation   8-K   3.3 05/29/2012
4.1 Specimen Stock Certificate   10   4.1 03/02/2012
4.2 Description of Securities X        
10.1 Robert I. Goldstein Employment Agreement   10-Q   10.1 11/11/2014
10.2 Forgiveness of Debt and Conversion Agreement   10-Q   10.2 11/11/2014
23.2 Consent of Independent Auditor   S-1/A   23.2 7/20/2022
31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X        
31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X        
32.1 Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X        
32.2 Certification pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X        
             
101.INS Inline XBRL Instance Document X        
101.SCH Inline XBRL Taxonomy Extension Schema Document X        
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X        
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X        
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X        
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X        
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X        

34

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 10, 2024US Nuclear Corp.
By:/s/ Robert I. Goldstein
Robert I. Goldstein

President, Chief Executive Officer,

Chairman of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: May 10, 2024US Nuclear Corp
By:/s/ Michael Hastings
Chief Financial Officer

35

5525 29504433 36060208 0.07 0.10 false FY 0001543623 iso4217:USD xbrli:shares