UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~March 31,~~June 30, 2022

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

For the transition period from _____________to _____________

Commission File No. 000-54693

LEATT CORPORATION
(Exact name of registrant as specified in its charter)

Nevada	20-2819367
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

12 Kiepersol Drive, Atlas Gardens, Contermanskloof Road,
Durbanville, Western Cape, South Africa, 7441
(Address of principal executive offices)

+(27) 21-557-7257
(Registrant's telephone number, including area code)

__________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] Smaller reporting company [X] Emerging growth company [X]

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 standards provided pursuant to Section 13(a) of the Exchange Act. [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [_] No [X]

The number of shares outstanding of each of the issuer's classes of common stock, as of ~~May 6,~~August 5, 2022 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.001 par value	~~5,791,683~~ 5,826,892

LEATTCORPORATION

Quarterly Report on Form 10-Q
~~Three~~Six Months Ended ~~March 31,~~June 30, 2022

TABLE OF CONTENTS

- i -

PART I

- i -FINANCIAL INFORMATION

LEATT CORPORATION

CONSOLIDATED BALANCE SHEETS

ASSETS

		June 30, 2022			December 31, 2021
		Unaudited			Audited
Current Assets
Cash and cash equivalents	$	4,949,771		$	5,022,436
Short-term investments		58,263			58,262
Accounts receivable, net		13,823,969			12,660,936
Inventory, net		21,853,273			21,081,481
Payments in advance		1,351,666			1,610,640
Prepaid expenses and other current assets		3,449,089			4,178,427
Total current assets		45,486,031			44,612,182

Property and equipment, net		2,959,009			3,128,086
Operating lease right-of-use assets, net		1,239,776			1,393,213

Other Assets
Deposits		41,333			33,339

Total Assets	$	49,726,149		$	49,166,820

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	7,967,771		$	14,617,671
Note payable, current		88,950			83,270
Operating lease liabilities, current		301,640			318,621
Income taxes payable		3,442,038			2,738,818
Short term loan, net of finance charges		227,180			975,025
Total current liabilities		12,027,579			18,733,405

Deferred compensation		360,000			320,000
Note payable, net of current portion		147,423			189,249
Operating lease liabilities, net of current portion		938,136			1,074,592
Deferred tax liability, net		228,600			228,600

Commitments and contingencies

Stockholders' Equity
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding		3,000			3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 5,826,892 and 5,673,683 shares issued and outstanding		130,280			130,162
Additional paid - in capital		9,809,539			9,230,847
Accumulated other comprehensive loss		(904,316	)		(779,268	)
Retained earnings		26,985,908			20,036,233
Total stockholders' equity		36,024,411			28,620,974

Total Liabilities and Stockholders' Equity	$	49,726,149		$	49,166,820

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

~~PART I~~

~~FINANCIAL INFORMATION~~

LEATT CORPORATION

CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

ASSETS
March 31, 2022 December 31, 2021
Unaudited Audited
Current Assets
Cash and cash equivalents $ 4,245,676 $ 5,022,436
Short-term investments 58,263 58,262
Accounts receivable, net 17,743,659 12,660,936
Inventory, net 19,916,817 21,081,481
Payments in advance 1,541,775 1,610,640
Prepaid expenses and other current assets 3,900,500 4,178,427
Total current assets 47,406,690 44,612,182

Property and equipment, net 3,147,973 3,128,086
Operating lease right-of-use assets, net 1,287,949 1,393,213
Other Assets
Deposits 49,750 33,339

Total Assets $ 51,892,362 $ 49,166,820

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses $ 11,410,067 $ 14,617,671
Note payable, current 88,168 83,270
Operating lease liabilities, current 279,148 318,621
Income taxes payable 4,146,521 2,738,818
Short term loan, net of finance charges 661,067 975,025
Total current liabilities 16,584,971 18,733,405

Deferred compensation 340,000 320,000
Note payable, net of current portion 169,957 189,249
Operating lease liabilities, net of current portion 1,008,801 1,074,592
Deferred tax liability, net 228,600 228,600
Commitments and contingencies - -
Stockholders' Equity
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding 3,000 3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 5,791,683 and 5,673,683 shares issued and outstanding 130,280 130,162
Additional paid - in capital 9,689,299 9,230,847
Accumulated other comprehensive loss (521,534 ) (779,268 )
Retained earnings 24,258,988 20,036,233
Total stockholders' equity 33,560,033 28,620,974

Total Liabilities and Stockholders' Equity $ 51,892,362 $ 49,166,820

		Three Months Ended						Six Months Ended
		June 30						June 30
		2022			2021			2022			2021
		Unaudited			Unaudited			Unaudited			Unaudited

Revenues	$	17,938,310		$	14,300,559		$	42,166,418		$	27,197,034

Cost of Revenues		10,294,238			8,107,020			24,895,256			14,951,541

Gross Profit		7,644,072			6,193,539			17,271,162			12,245,493

Product Royalty Income		46,971			58,479			125,810			83,289

Operating Expenses
Salaries and wages		1,325,177			912,811			2,623,139			1,837,348
Commissions and consulting expenses		150,634			215,986			313,220			436,648
Professional fees		79,653			123,501			338,768			461,256
Advertising and marketing		746,114			518,153			1,360,004			1,035,733
Office lease and expenses		193,878			87,200			400,899			174,573
Research and development costs		480,843			445,156			1,014,543			850,261
Bad debt expense (recovery)		(13,969	)		(51,732	)		4,355			14,093
General and administrative expenses		710,351			609,760			1,422,103			1,138,359
Depreciation		287,943			242,401			564,867			478,936
Total operating expenses		3,960,624			3,103,236			8,041,898			6,427,207

Income from Operations		3,730,419			3,148,782			9,355,074			5,901,575

Other Income (Expenses)
Interest and other expenses, net		(8,349	)		3,948			(2,192	)		(59	)
Total other income (expenses)		(8,349	)		3,948			(2,192	)		(59	)

Income Before Income Taxes		3,722,070			3,152,730			9,352,882			5,901,516

Income Taxes		995,150			744,082			2,403,207			1,432,030

Net Income Available to Common Shareholders	$	2,726,920		$	2,408,648		$	6,949,675		$	4,469,486

Net Income per Common Share
Basic	$	0.47		$	0.44		$	1.20		$	0.82
Diluted	$	0.44		$	0.39		$	1.12		$	0.72

Weighted Average Number of Common Shares Outstanding
Basic		5,815,285			5,438,686			5,790,510			5,434,553
Diluted		6,255,537			6,172,686			6,230,763			6,168,553

Comprehensive Income
Net Income	$	2,726,920		$	2,408,648		$	6,949,675		$	4,469,486
Other comprehensive income, net of $0 deferred income taxes in 2022 and 2021
Foreign currency translation		(382,782	)		60,893			(125,048	)		32,541

Total Comprehensive Income	$	2,344,138		$	2,469,541		$	6,824,627		$	4,502,027

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

LEATT CORPORATION

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~CHANGES IN STOCKHOLDERS' EQUITY
AS OF AND ~~COMPREHENSIVE INCOME~~FOR THE SIX MONTHS ENDED JUNE 30, 2022

Three Months Ended
March 31
2022 2021
Unaudited Unaudited

Revenues $ 24,228,108 $ 12,896,475

Cost of Revenues 14,601,018 6,844,521

Gross Profit 9,627,090 6,051,954

Product Royalty Income 78,839 24,810
Operating Expenses
Salaries and wages 1,297,962 924,537
Commissions and consulting expenses 162,586 220,662
Professional fees 259,115 337,755
Advertising and marketing 613,890 517,580
Office lease and expenses 207,021 87,373
Research and development costs 533,700 405,105
Bad debt expense 18,324 65,825
General and administrative expenses 711,752 528,599
Depreciation 276,924 236,535
Total operating expenses 4,081,274 3,323,971
Income from Operations 5,624,655 2,752,793
Other Income (Expenses)
Interest and other expenses, net 6,157 (4,007 )
Total other income (expenses) 6,157 (4,007 )

Income Before Income Taxes 5,630,812 2,748,786

Income Taxes 1,408,057 687,948

Net Income Available to Common Shareholders $ 4,222,755 $ 2,060,838
Net Income per Common Share
Basic $ 0.73 $ 0.38
Diluted $ 0.68 $ 0.34

Weighted Average Number of Common Shares Outstanding
Basic 5,765,461 5,430,374
Diluted 6,246,325 6,118,129

Comprehensive Income
Net Income $ 4,222,755 $ 2,060,838
Other comprehensive income, net of $0 and ($1,000) deferred income taxes in 2022 and 2021
Foreign currency translation 257,734 (28,352 )

Total Comprehensive Income $ 4,480,489 $ 2,032,486

										Accumulated
										Other
	Preferred Stock A			Common Stock				Additional		Comprehensive			Retained
	Shares		Amount	Shares		Amount		Paid - In Capital		Loss			Earnings		Total

Balance, January 1, 2022	120,000	$	3,000	5,673,683	$	130,162	$	9,230,847	$	(779,268	)	$	20,036,233	$	28,620,974

Compensation cost recognized in connection with stock options	-		-	-		-		82,530		-			-		82,530

Exercise of stock options	-		-	118,000		118		255,682		-			-		255,800

Options exercised on a cashless basis	-		-	35,209		-		-		-			-		-

Restricted stock awards	-		-	-		-		240,480		-			-		240,480

Net income	-		-	-		-		-		-			6,949,675		6,949,675

Foreign currency translation adjustment	-		-	-		-		-		(125,048	)		-		(125,048	)

Balance, June 30, 2022	120,000	$	3,000	5,826,892	$	130,280	$	9,809,539	$	(904,316	)	$	26,985,908	$	36,024,411

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

LEATT CORPORATION

CONSOLIDATED STATEMENTS OF ~~CHANGES IN STOCKHOLDERS' EQUITY~~CASH FLOWS

~~AS OF AND~~ FOR THE ~~THREE~~SIX MONTHS ENDED ~~MARCH 31,~~JUNE 30, 2022 AND 2021

Accumulated
Other
Preferred Stock A Common Stock Additional Comprehensive Retained
Shares Amount Shares Amount Paid - In Capital Loss Earnings Total

Balance, January 1, 2022 120,000 $ 3,000 5,673,683 $ 130,162 $ 9,230,847 $ (779,268 ) $ 20,036,233 $ 28,620,974

Compensation cost recognized in connection with stock options - - - - 82,530 - - 82,530

Exercise of stock options - - 118,000 118 255,682 - - 255,800

Restricted stock awards - - - - 120,240 - - 120,240

Net income - - - - - - 4,222,755 4,222,755

Foreign currency translation adjustment - - - - - 257,734 - 257,734

Balance, March 31, 2022 120,000 $ 3,000 5,791,683 $ 130,280 $ 9,689,299 $ (521,534 ) $ 24,258,988 $ 33,560,033

		2022			2021

Cash flows from operating activities
Net income	$	6,949,675		$	4,469,486
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		564,867			478,936
Stock-based compensation		323,010			55,020
Bad debts reserve		(7,871	)		11,763
Inventory reserve		94,269			39,995
(Gain) loss on sale of property and equipment		(22,905	)		5,767
(Increase) decrease in:
Accounts receivable		(1,155,162	)		2,077,870
Inventory		(866,061	)		3,478,553
Payments in advance		258,974			(397,698	)
Prepaid expenses and other current assets		729,338			(3,989,785	)
Income tax refunds receivable		-			2,964
Deposits		(7,994	)		(233	)
Increase (decrease) in:
Accounts payable and accrued expenses		(6,649,900	)		(5,377,741	)
Income taxes payable		703,220			375,379
Deferred compensation		40,000			40,000
Net cash provided by operating activities		953,460			1,270,276

Cash flows from investing activities
Capital expenditures		(435,537	)		(191,443	)
Proceeds from sale of property and equipment		42,773			-
Increase in short-term investments, net		(1	)		(2	)
Net cash used in investing activities		(392,765	)		(191,445	)

Cash flows from financing activities
Issuance of common stock		255,800			-
Repayment of note payable to bank		(36,146	)		-
Repayment of short-term loan, net		(747,845	)		(317,720	)
Net cash used in financing activities		(528,191	)		(317,720	)

Effect of exchange rates on cash and cash equivalents		(105,169	)		20,427

Net increase (decrease) in cash and cash equivalents		(72,665	)		781,538

Cash and cash equivalents - beginning of period		5,022,436			2,967,042

Cash and cash equivalents - end of period	$	4,949,771		$	3,748,580

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	30,178		$	16,379
Cash paid for income taxes	$	1,699,987		$	1,088,360

Other noncash investing and financing activities
Common stock issued for services	$	323,010		$	55,020

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

~~LEATT CORPORATION~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021~~

2022 2021

Cash flows from operating activities
Net income $ 4,222,755 $ 2,060,838
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation 276,924 236,535
Stock-based compensation 202,770 55,020
Bad debts reserve 14,526 63,111
Inventory reserve 13,656 (23,044 )
(Gain) loss on sale of property and equipment (21,590 ) 457
(Increase) decrease in:
Accounts receivable (5,097,249 ) 2,950,042
Inventory 1,151,008 (236,474 )
Payments in advance 68,865 82,168
Prepaid expenses and other current assets 277,927 (1,938,074 )
Income tax refunds receivable 0 2,964
Deposits (16,411 ) 125
Increase (decrease) in:
Accounts payable and accrued expenses (3,207,604 ) (2,301,718 )
Income taxes payable 1,407,703 137,197
Deferred compensation 20,000 20,000
Net cash provided by (used in) operating activities (686,720 ) 1,109,147

Cash flows from investing activities
Capital expenditures (260,912 ) (34,272 )
Proceeds from sale of property and equipment 35,848 0
Increase in short-term investments, net (1 ) (1 )
Net cash used in investing activities (225,065 ) (34,273 )

Cash flows from financing activities
Issuance of common stock 255,800 0
Repayment of note payable to bank (14,394 ) 0
Repayment of short-term loan, net (313,958 ) (237,767 )
Net cash used in financing activities (72,552 ) (237,767 )

Effect of exchange rates on cash and cash equivalents 207,577 (18,225 )

Net increase (decrease) in cash and cash equivalents (776,760 ) 818,882

Cash and cash equivalents - beginning of period 5,022,436 2,967,042

Cash and cash equivalents - end of period $ 4,245,676 $ 3,785,924

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest $ 16,133 $ 9,323
Cash paid for income taxes $ 354 $ 550,000

Other noncash investing and financing activities
Common stock issued for services $ 202,770 $ 55,020

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

LEATT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Basis of presentation

The consolidated balance sheet as of December 31, 2021 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 10, 2022. The consolidated balance sheet as of ~~March 31,~~June 30, 2022 and the consolidated statements of operations and comprehensive income for the three and six months ended ~~March 31,~~June 30, 2022 and 2021, changes in stockholders' equity for the ~~three~~six months ended ~~March 31,~~June 30, 2022, cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of ~~March 31,~~June 30, 2022 and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2021 as filed with the Securities and Exchange Commission in the Company's Form 10-K.

Note 2 - Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in first-out (FIFO) method. Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, the Company must make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, the Company utilizes historical experience as well as current market information. The reserve for obsolescence was ~~$129,839~~$210,452 at ~~March 31,~~June 30, 2022 and $116,183 at December 31, 2021.

Note 3 - Operating Leases - Right-of-Use Assets and Lease Liability Obligations

The Company has ~~three~~four non-cancelable operating leases, for office and warehousing space, one that ~~expires~~expired in June 2022, and the other three expiring in June 2023, August 2023 and January 2027, respectively. Rent expense for these operating leases is recognized over the term of the lease on a straight-line basis. ~~A lease for office machinery lapsed on March 31, 2022.~~

Below is a summary of the Company's Operating Right-of-Use Assets and Operating Lease liabilities as of ~~March 31,~~June 30, 2022 and December 31, 2021:

		2022		2021
Assets
Operating lease ROU assets	$	1,239,776	$	1,393,213

Liabilities
Operating lease liabilities, current	$	301,640	$	318,621
Operating lease liabilities, net of current portion		938,136		1,074,592
Total operating lease liabilities	$	1,239,776	$	1,393,213

2022 2021
Assets
Operating lease ROU assets $ 1,287,949 $ 1,393,213

Liabilities
Operating lease liabilities, current $ 279,148 $ 318,621
Operating lease liabilities, net of current portion 1,008,801 1,074,592
Total operating lease liabilities $ 1,287,949 $ 1,393,213

During the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 the Company recognized ~~$99,318~~$189,954 and ~~$54,149,~~$108,997, respectively, in operating lease expenses, which are included in office lease and expenses in the Company's consolidated statements of operations and comprehensive income.

Generally, the Company's lease agreements do not specify an implicit rate. Therefore, the Company estimates the incremental borrowing rate, which is defined as the interest rate the Company would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of ~~March 31,~~June 30, 2022, and December 31, 2021 the following disclosures for the remaining lease terms and incremental borrowing rates were applicable:

Supplemental disclosure March 31, 2022 December 31, 2021
Weighted average remaining lease term 5 years 5 years
Weighted average discount rate 4.08% 4.08%

Supplemental disclosure	June 30, 2022	December 31, 2021
Weighted average remaining lease term	5 years	5 years
Weighted average discount rate	3.75%	4.08%

Maturities of lease liabilities as of ~~March 31,~~June 30, 2022 were as follows:

Year ended December 31, Amounts under Operating Leases
Remaining 2022 $ 216,472
2023 273,449
2024 281,664
2025 290,098
2026 298,791
2027 25,455
Total minimum lease payments $ 1,385,929
Less: amount representing interest $ (97,980 )
Total operating lease liabilities $ 1,287,949

Year ended December 31,		Amounts under Operating Leases
Remaining 2022	$	149,366
2023		293,329
2024		281,663
2025		290,098
2026		298,791
2027		25,455
Total minimum lease payments	$	1,338,702
Less: amount representing interest	$	(98,926	)
Total operating lease liabilities	$	1,239,776

Supplemental cash flow information for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 are as follows:

		Three months		Three months
		ended March 31,		ended March 31,
		2022		2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities	$	82,817	$	59,285	$	191,732	$	119,300
Right-of-use assets obtained in exchange for lease obligations	$	0	$	15,170	$	41,163	$	15,170

Note 4 - Revolving line of Credit facility

On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two-Eleven Distribution, LLC. On March 1, 2021, the Company executed an amendment to the line of credit. The amendment took retroactive effect to February 17, 2021 and extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment agreement for the line of credit to extend the line of credit facility through February 28, 2023, and to replace interest determined by LIBOR daily Floating Rate with the Bloomberg short-term Bank Yield Index Rate. As of ~~March 31,~~June 30, 2022, and December 31, 2021, respectively there were no advances of the line of credit leaving $1,500,000 and $1,500,000 available for advances.

Note 5 - Short-term Loan

The Company carries product liability insurance policies with a U.S. and South African-based insurance carrier. The Company finances payment of both of its product liability insurance premiums over the period of coverage which is generally twelve months. The U.S. short-term loan is payable in monthly installments of $102,078 over eleven months including interest at 4.650% and the South African short-term loan is payable in monthly installments of ~~$6,414,~~$5,754, over a ten-month period at a flat interest rate of 3.10%.

The Company carries various short-term insurance policies in the U.S. The Company finances payment of its short-term insurance premiums over the period of coverage, which is generally twelve months. The short-term loan is payable on a sliding scale, in ~~eleven~~two payments of ~~$19,860~~$37,381, three payments of $1,172 and six payments of $326 at ~~4.350%~~6.360% annual interest rate.

Note 6 - Note payable

Two Eleven entered into a Note Payable with a bank effective December 17, 2021 in the principal amount of $272,519, secured by equipment. The Note is payable in 36 consecutive monthly installments of $7,990, including interest at a fixed rate of 3.5370%, commencing February 5, 2022, and continuing to January 5, 2025. As of ~~March 31,~~June 30, 2022 and December 31, 2021, the ~~amounts~~amount of ~~$258,125~~$236,373 and $272,519 were outstanding, respectively.

		March 31,		December 31,		June 30,		December 31,
		2022		2021		2022		2021
Liabilities
Note payable, current	$	88,168	$	83,270	$	88,950	$	83,270
Note payable, net off current portion		169,957		189,249		147,423		189,249
	$	258,125	$	272,519	$	236,373	$	272,519

Principal maturities of note payable as of ~~March 31,~~June 30, 2022 were as follows:

Year ended December 31,		Amounts under Notes Payable		Amounts under Notes Payable
Remaining 2022	$	65,834	$	44,082
2023		90,535		90,535
2024		93,790		93,790
2025		7,966		7,966
	$	258,125	$	236,373

Note 7 - Revenue and Cost Recognition

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

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

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

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

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

In the following table, revenue is disaggregated by the source of revenue:

Three months ended March 31,
2022 % of Revenues 2021 % of Revenues
Consumer and athlete direct revenues $ 595,479 2% $ 570,701 5%
Dealer direct revenues 5,003,608 21% 5,566,732 43%
International distributor revenues 18,629,021 77% 6,759,042 52%
$ 24,228,108 100% $ 12,896,475 100%

		Six months ended June 30,
		2022	% of Revenues		2021	% of Revenues
Consumer and athlete direct revenues	$	1,385,732	3%	$	1,137,597	4%
Dealer direct revenues		8,551,462	20%		10,140,312	37%
International distributor revenues		32,229,224	77%		15,919,125	59%
	$	42,166,418	100%	$	27,197,034	100%

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

Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to substantially all distributors on an unsecured basis. The Company continuously monitors collections and payments from customers and maintains an allowance for doubtful accounts receivable based upon the expected credit losses determined utilizing historical experience and any specific customer collection issues that have been identified. In determining the amount of the allowance, the Company is required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after the Company used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates as in the past. A significant change in the liquidity or financial position of any of the Company's significant customers could have a material adverse effect on the collectability of the Company's accounts receivable and future operating results. The allowance of doubtful accounts was ~~$306,110~~$283,713 at ~~March 31,~~June 30, 2022 and $291,584 at December 31, 2021.

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

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

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

Note 8 - Income Taxes

The Company uses the asset and liability approach to account for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes included taxes currently payable, if any, plus the net change during the period in deferred tax assets and liabilities recorded by the Company.

The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes ("Standard"), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions.

The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of ~~March 31,~~June 30, 2022, the Company has no unrecognized tax benefits.

Note 9 - Net Income Per Share of Common Stock

Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common stock shares and dilutive potential common shares outstanding during the period. For the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company had ~~510,000~~471,000 potential common shares, consisting of 120,000 preferred shares, and options to purchase ~~390,000~~351,000 shares, outstanding that were dilutive.

Note 10 - Common Stock

In January 2022, the Company issued 78,000 shares of common stock to an employee who exercised stock options. In March 2022, the Company issued 40,000 shares of common stock to two employees who exercised stock options. In May 2022, the Company issued 35,209 shares of common stock to an employee who exercised stock options in a cashless exercise.

Stock-based compensation expense related to vested stock options during the ~~three~~six months ended ~~March 31,~~June 30, 2022 was $82,530. As of ~~March 31,~~June 30, 2022, there was $0 of unrecognized compensation cost related to unvested stock options.

Stock-based compensation expense related to vested restricted stock awards during the ~~three~~six months ended ~~March 31,~~June 30, 2022 was ~~$120,240.~~$240,480. As of ~~March 31,~~June 30, 2022, there was ~~$360,720~~$240,480 of unrecognized compensation cost related to unvested restricted stock.

Note 11 - Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements - In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2021-10 Government Assistance (Topic 832): "Disclosures by Business Entities About Government Assistance," which requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution model by analogy. The standard is effective for annual periods beginning after December 15, 2021. The Company adopted the standard effective January 1, 2022. The adoption of the standard had no impact on the Company's consolidated financial statements.

Accounting Pronouncements Not Yet Adopted - The Company evaluated all ASU's issued by the FASB for consideration of their applicability. ASU's not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company's consolidated financial statements.

Note 12 - Litigation

In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that the liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Note 13 - Risks and Uncertainties

As the COVID-19 pandemic continues to evolve, the Company believes the extent of the impact to its operations will be primarily driven by the severity and duration of the pandemic, the pandemic's impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. Due to strong consumer demand for outdoor product categories since the ~~Company~~initial stages of the pandemic, we did not see any significant material negative impact of COVID-19 on the Company's results of operations for the ~~quarter~~six months ended ~~March 31,~~June 30, 2022. The Company remains cautiously optimistic that ongoing efforts to increase the availability of new COVID-19 vaccines worldwide will mitigate the spread of the virus throughout Europe and the U.S. (our largest markets) and bring about an end to global quarantines. The continued mutation and spread of the virus, economic headwinds caused by global quarantines or the occurrence of any other catastrophic events, could have a negative impact on sales revenue for the coming periods and beyond.

Note 14 - Subsequent Events

The Company has evaluated all subsequent events through the date the financial statements were released.

On February 24, 2022, the Company entered into a new lease agreement for warehousing space in South Africa, commencing on April 1, 2022 and expiring in August 2023. The lease agreement requires the Company to pay monthly rent of $1,769 for the first eleven months and $1,910 for the following six months. The Company expects to recognize an operating lease right-of-use asset and operating lease liability of $26,372 and $26,372 as of the effective date of the lease. The estimated interest rate for this lease agreement as of April 1, 2022 is 3.750%.

1110

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

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

Except as otherwise indicated by the context, references in this ~~annual~~ report to:

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

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

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

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

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

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

The following summary of our results of operations should be read in conjunction with our financial statements and the notes thereto for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2022 and 2021 included herein.

Comparison of Three Months Ended ~~March 31,~~June 30, 2022 and Three Months Ended ~~March 31,~~June 30, 2021

The following table summarizes the results of our operations during the ~~three-month periods~~three months ended ~~March 31,~~June 30, 2022 and 2021 and provides information regarding the dollar and percentage increase or (decrease) in such periods:

Revenues - We earn revenues from the sale of our protective gear comprising of neck braces, body armor, helmets and other products, parts and accessories both in the United States and abroad. Revenues for the ~~three months~~quarter ended ~~March 31,~~June 30, 2022 were ~~$24.23~~$17.94 million, ~~an 88%~~a 25% increase, compared to ~~revenues of $12.90~~$14.30 million for the quarter ended ~~March 31,~~June 30, 2021. This increase in worldwide revenues is primarily attributable to a ~~$5.11~~$0.94 million increase in body armor sales, a ~~$4.15~~$1.35 million increase in helmet sales and a ~~$2.48~~$1.61 million increase in other products, parts and accessories, that were partially offset by a ~~$0.41~~$0.26 million decrease in neck brace sales. Revenues associated with international customers were ~~$18.94~~$13.91 million and ~~$7.13~~$9.58 million, or 78% and ~~55%~~67% of revenues, respectively, for the ~~three months~~quarters ended ~~March 31,~~June 30, 2022 and 2021, respectively.

The following table sets forth our revenues by product line for the ~~three months~~quarter ended ~~March 31,~~June 30, 2022 and 2021:

Sales of our flagship neck brace accounted for ~~$1.53~~$1.31 million and ~~$1.94~~$1.58 million, or 6%7% and ~~15%~~11% of our revenues for the quarters ended ~~March 31,~~June 30, 2022 and 2021, respectively. The ~~21%~~17% decrease in neck brace revenues is primarily attributable to a ~~32%~~17% decrease in the volume of neck braces sold to our customers in the United States and abroad during the 2022 period.

Our body armor products are comprised of chest protectors, full upper body protectors, upper body protection vests, back protectors, knee braces, knee and elbow guards, off-road motorcycle boots and mountain biking shoes. Body armor sales accounted for ~~$12.48~~$9.51 million and ~~$7.38~~$8.57 million, or ~~52%~~53% and ~~57%~~60% of our revenues for the quarters ended ~~March 31,~~June 30, 2022 and 2021, respectively. The ~~69%~~11% increase in body armor revenues ~~was primarily~~during the result of continued shipments of our footwear category consisting of off-road motorcycle boots and mountain biking shoes and continued remarkable consumer demand for our innovative upper body and limb protectors.

~~Our helmets accounted for $5.69 million or 23% of our revenues for the three months ended March 31,~~ 2022 ~~as compared to $1.54 million or 12% of our revenues for the same 2021 period. The 269% increase in helmet sales~~second quarter is primarily the result of continued strong demand for our off-road motorcycle boots and upper body protective gear globally.

Our helmet sales accounted for $2.38 million and $1.03 million or 13% and 7% of our revenues for the ~~Company's expanding~~quarters ended June 30, 2022 and ~~award winning MTB~~2021, respectively. The 132% increase in helmet ~~line up that has appealed~~sales during the 2022 second quarter is primarily due to a ~~wide range~~strong increase in the sales volume of ~~riders~~our expanded and ~~continued shipments of our~~ redesigned MOTO helmet line up for off-road motorcycle use to our customers in the United States and abroad.

Our other products, parts and accessories are comprised of goggles, hydrations bags and apparel items including jerseys, pants, shorts and jackets as well as aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and ~~accessory~~accessories sales accounted for ~~$4.53~~$4.73 million and ~~$2.04~~$3.13 million, or ~~19%~~27% and ~~16%~~22% of our revenues for the quarters ended ~~March 31,~~June 30, 2022 and 2021, respectively. The ~~122%~~51% increase in revenues from the sale of other products, parts and accessories during the 2022 second quarter is primarily due to continued strong ~~consumer demand for~~sales of our MOTO and MTB technical apparel designed ~~for~~ off-road motorcycle and mountain biking use, respectively.

Cost of Revenues and Gross Profit - Cost of revenues for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$14.60~~$10.29 million and ~~$6.84~~$8.11 million, respectively. Gross Profit for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$9.63~~$7.64 million and ~~$6.05~~$6.19 million, respectively, or ~~40%~~43% and ~~47%~~43% of revenues, respectively. Ourneck braceproducts continue to generate a higher gross profit margin than our other product categories. ~~Neck~~Although neck brace revenues accounted for 6%7% and ~~15%~~11% of our revenues for the quarters ended ~~March 31, 2022 and 2021, respectively. Additionally, revenues associated with international customers were 78% and 55% of our revenues for the three months ended March 31,~~June 30, 2022 and 2021, respectively ~~with revenue associated with international distribution customers continuing to generate a lower~~our gross profit ~~margin than dealer direct sales in~~remained consistent with the ~~United States. The decrease in gross profit as~~2021 period due to a ~~percentage of revenues for the three months ended March 31, 2022 was further influenced by a significant increase~~stabilization in global and domestic shipping and ~~logistic costs as a result of the COVID-19 pandemic.~~logistics costs.

Product Royalty Income - Product royalty income is earned on sales to distributors that have royalty agreements in place, as well as on sales of licensed products by third parties that have licensing agreements in place. Product royalty income for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$78,839~~$46,971 and ~~$24,810,~~$58,479, respectively. The ~~218% increase~~20% decrease in product royalty income is due to ~~an increase~~a decrease in the sale of licensed products by licensees during the 2022 period.

Salaries and Wages - Salaries and wages for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$1,297,962~~$1,325,177 and ~~$924,537,~~$912,811, respectively. The ~~40%~~45% increase in salaries and wages during the 2022 period was primarily due to the employment of additional sales professionals and operational warehousing staff in the United States as we continue to expand and build our selling activities ~~domestically.~~domestically in order to facilitate growth. Additionally, share compensation costs relating to a share issuance made to key personnel ~~in recognition of exceptional performance~~ contributed ~~significantly~~ to the increase in salaries and wages for the 2022 period.

Commissions and Consulting Expense - During the quarters ended ~~March 31,~~June 30, 2022 and 2021, commissions and consulting expenses were ~~$162,586~~$150,634 and ~~$220,662,~~$215,986, respectively. The ~~26%~~30% decrease in commissions and consulting expenses is primarily the result of a decrease in commissions and incentives paid to both in-house and external sales representatives in the United States in line with a decrease in sales growth in the region.

Professional Fees - Professional fees consist of costs incurred for audit, tax and regulatory filings, as well as patent protection and product liability litigation expenses incurred as the Company continues to expand. Professional fees for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$259,115~~$79,653 and ~~$337,755,~~$123,501, respectively. The ~~23%~~36% decrease in professional fees is primarily due to a decrease in patent development and product liability litigation expenses incurred during the 2022 period.

Advertising and Marketing - The Company places paid advertising in various motorsport and bicycle magazines and online media and sponsors a number of events, professional teams and individuals to increase product and brand visibility globally. Advertising and marketing expenses for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$613,890~~$746,114 and ~~$517,580,~~$518,153, respectively. The ~~19%~~44% increase in advertising and marketing expenditure during the 2022 period is primarily due to the production, execution and ~~execution~~distribution of global marketing campaigns that incorporate athlete sponsorships, event attendance, campaign activation and coordinated digital marketing activities designed to market the Company's growing product offering and increase global consumer engagement.

Office Lease and Expenses - Office lease and expenses for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$207,021~~$193,878 and ~~$87,373,~~$87,200, respectively. The ~~137%~~122% increase in office lease and expenses during the 2022 period is primarily due to additional warehouse storage rented in the United States as the Company continues to ~~build out~~expand its Reno, Nevada warehouse to accommodate storage ~~and sales~~ of its expanding ~~line-up~~line up of exceptional protective gear.

Research and Development Costs - These costs consist of the salaries of personnel who are directly involved in the research and development of innovative products, as well as the direct costs associated with developing these products. Research and development costs for the quarter ended ~~March 31,~~June 30, 2022, increased to ~~$533,700,~~$480,843, from ~~$405,105~~$445,156 during the same 2021 quarter. The ~~32%~~8% increase in research and development costs during the 2022 second quarter is primarily ~~as a result~~due to the employment of ~~increased~~professional product development, engineering and ~~certification costs incurred as~~design personnel in order to continue the ~~Company continues to develop a~~refinement of the Company's widening product categories and the expansion of our pipeline of exceptional ~~innovative protective gear that appeals to a wider rider audience.~~cutting-edge products.

Bad Debt ~~Expense~~Recovery - Bad debt ~~expense~~recovery for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$18,324~~$13,969 and ~~$65,825,~~$51,732, respectively. The ~~72%~~73% decrease in bad debt ~~expense~~recovery is primarily the result of a decrease in provisions made for unrecoverable debts during the 2022 period, in line with a decrease in the Two Eleven's accounts receivable balance at ~~Two Eleven Distribution in the United States at March 31,~~June 30, 2022, when compared to ~~December~~March 31, ~~2021.~~2022, that was partially offset by an increase in the provision for unrecoverable debts relating to the Company's international customers.

General and Administrative Expenses - General and administrative expenses consist of insurance, travel, merchant fees, telephone, office and computer supplies. General and administrative expenses for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$711,752~~$710,351 and ~~$528,599,~~$609,760, respectively. The ~~35%~~16% increase in general and administrative expenses is primarily due to an increase in ~~expenditures on~~ product ~~liability,~~and general ~~risk and directors and officers'~~liability insurance premiums paid during the 2022 ~~period. A global industry wide increase in insurance risk~~period as a result of ~~the COVID-19 pandemic and~~ increased inventory levels ~~globally as~~to facilitate an increase in the ~~Company expands its product offerings and~~Company's selling ~~activities were the primary factors that contributed to these increased premiums.~~ activities.

Depreciation Expense - Depreciation expense for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$276,924~~$287,943 and ~~$236,535,~~$242,401, respectively. The ~~17%~~19% increase in depreciation during the 2022 second quarter is primarily due to the addition of molds and tooling utilized in the production of the Company's expanding product categories.

Total Operating Expenses - Total operating expenses increased by ~~$757,303,~~$857,388, to ~~$4.08~~$3,960,624 million, in the ~~three months~~quarter ended ~~March 31,~~June 30, 2022, or ~~23%~~28%, compared to ~~$3.32~~$3.10 million in the 2021 period. This increase is primarily due to increases in salaries, general and administrative, ~~research~~office and ~~development~~warehouse leasing and advertising and marketing costs that were partially offset by a decrease in professional fees and commissions ~~and bad debt expenditure~~paid discussed above.

Net Income - The net income after income taxes for the quarter ended ~~March 31,~~June 30, 2022 was ~~$4.22~~$2.73 million, as opposed to a net income of ~~$2.06~~$2.41 million for the quarter ended ~~March 31,~~June 30, 2021. This ~~105%~~13% increase in net income is primarily due to the increase in sales revenues discussed above.

Comparison of Six Months Ended June 30, 2022 and Six Months Ended June 30, 2021

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

At ~~March 31,~~June 30, 2022, we had cash and cash equivalents of ~~$4.25~~$4.95 million and $0.06 million of short-term investments. The following table sets forth a summary of our cash flows for the periods indicated:

Cash decreased by ~~$776,760,~~$72,665 or ~~15%~~1%, for the ~~three~~six months ended ~~March 31,~~June 30, 2022, when compared to cash on hand at December 31, 2021. The primary sources of cash for the six months ended June 30, 2022 were net income of $6,949,675, decreased prepaid expenses of $729,338, increased income taxes payable of $703,220 and proceeds from the issuance of common stock amounting to $255,800. The primary uses of cash for the ~~three~~six months ended ~~March 31,~~June 30, 2022 were increased accounts receivable of ~~$5,097,249 and~~$1,155,162, decreased accounts payable and accrued expenses of ~~$3,207,604. The primary sources of cash for the three months ended March 31, 2022 were net income of $4,222,755, decreased~~$6,649,900, increased inventory of ~~$1,151,008~~$866,061 and ~~increased income taxes payable~~the repayment of ~~$1,407,703.~~a short term loan amounting to $747,845.

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

Pursuant to our Licensing Agreement with Xceed Holdings, a company controlled by Dr. Christopher Leatt, our founder, chairman and head of research and development, we pay Xceed Holdings 4% of all neck brace sales revenue billed and received by the Company on a quarterly basis based on sales of the previous quarter. During the quarters ended ~~March 31,~~June 30, 2022 and 2021, the Company paid an aggregate of ~~$72,716~~$66,844 and ~~$62,124,~~$79,590, in licensing fees to Xceed Holdings. In addition, pursuant to a separate license agreement between the Company and Mr. J. P. De Villiers, our former director, the Company is obligated to pay a royalty fee of 1% of all our billed and received neck brace sales revenue, in quarterly installments, based on sales of the previous quarter, to a trust that is beneficially owned and controlled by Mr. De Villiers. During the quarters ended ~~March 31,~~June 30, 2022 and 2021, the Company paid an aggregate of ~~$18,179~~$16,711 and ~~$15,531,~~$19,898, in licensing fees to Mr. De Villiers.

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

On November 8, 2021, the Company entered into a consulting agreement with Innovation Services Limited, a Jersey limited company in which, Dr. Christopher Leatt, the Company's founder and chairman, is an indirect beneficiary. Pursuant to the terms of the agreement, Innovation has agreed to serve as the Company's exclusive research, development and marketing consultant, in exchange for a monthly fee of $42,233; provided, however, that Dr. Leatt must remain an Innovation director and beneficiary of a majority of its ownership interests during the term of the agreement, and Dr. Leatt must remain the Company's primary point of contact responsible for the oversight, review and delivery of the services to be performed by Innovation under the agreement. Innovation may increase its monthly fees, on an annual basis, by no greater than the lesser of: (a) two and one-half percent (2.5%) of the prior year's annualized fee; or (b) a percentage equal to then-applicable annual percentage increase in the Consumer Price Index (CPI) published by the United States Department of Labor's bureau of labor statistics, plus one-half percent (0.5%). The parties further agreed that all intellectual property generated in connection with the services provided under the consulting agreement will be the sole property of the Company. The consulting agreement was effective as of November 1, 2021, and will continue unless terminated by either party in accordance with its terms. Either party has the right to terminate the consulting agreement upon 6six months' prior written notice, except that the consulting agreement may be terminated by the Company immediately without notice if the services to be performed by Innovation cease to be performed by Dr. Leatt, if beneficial ownership in Innovation by Dr. Leatt's and his immediate family members decreases, or for any other material breach of the agreement. The parties have agreed to settle any dispute under the consulting agreement by submission to JAMS for final and binding arbitration pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules. The Company also simultaneously entered into a side letter agreement, dated November 8, 2021, with Dr. Leatt, pursuant to which Dr. Leatt agreed, among other things: (1) not to perform services similar to the services provided under the agreement for any current or future, direct or indirect competitor of the Company or any similar company; (2) not to solicit any current or future employees of the Company for employment with Innovation or any other entity with which he may become affiliated, or to contact or solicit any current or future stockholder or investor of the Company in connection with any matter that is not directly related to the ongoing or future business operations of the Company; and (3) that he will apprise the Company of any business opportunity that he becomes aware of that could benefit the Company so that the Company, can in its sole discretion, make a determination regarding whether to pursue such opportunity in the best interest of the Company and its stockholders. Dr. Leatt further agreed to continue dedicating a majority of his time on matters related to performance of his duties as a director of the Company and to the fulfillment of his obligations to the Company's research and development efforts under the consulting agreement, and the Company will have the right to adjust the amount of the fees payable under the consulting agreement to the extent of any substantial diminution in his fulfillment of such duties and obligations. Accordingly, effective January 1, 2022, the Company's monthly fee to Innovation, increased to $43,289. During the quarters ended ~~March 31,~~June 30, 2022 and 2021, the Company recognized an aggregate of $129,867 and $0, respectively, in consulting fees to Innovation.

Pursuant to a Premium Finance Agreement, dated ~~June 14, 2021,~~May 27, 2022, between the Company and ~~AFCO Acceptance Corporation "AFCO",~~Aon Premium Finance, LLC, or APF, the Company is obligated to pay ~~AFCO~~APF an aggregate sum of ~~$238,696~~$80,233 in eleven monthly payments on a sliding scale, as follows, $37,381, $37,381, $1,172, $ 1,172, $ 1,172 and thereafter six payments of ~~$20,290,~~$326, at a ~~4.350%~~6.360% annual interest rate, commencing on June 1, ~~2021~~2022 and ending on April 1, ~~2022. This payment has been adjusted to $19,860 due to returned premium.~~2023. Any late payment during the term of the agreement ~~will~~would be assessed a late penalty of 5% of the payment amount due, and in the event of default ~~AFCO~~APF has the right to accelerate the payment due under the agreement. As of ~~March 31,~~June 30, 2022, the Company had not defaulted on its payment obligations under this ~~agreement~~.agreement.

Pursuant to a Premium Finance Agreement, dated October 29, 2021, between the Company and ~~AFCO Acceptance Corporation "AFCO",~~APF, the Company is obligated to pay ~~AFCO~~APF an aggregate sum of $1,122,858 in eleven payments of $102,078, at a 4.650% annual interest rate, commencing on November 1, 2021 and ending on September 1, 2022. Any late payment during the term of the agreement will be assessed a late penalty of 5% of the payment amount due, and in the event of default ~~AFCO~~APF has the right to accelerate the payment due under the agreement. As of ~~March 31,~~June 30, 2022, the Company had not defaulted on its payment obligations under this agreement.

On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Payments for the advances under the line bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement are due and payable. On November 5, 2020, the Company executed an amendment to the line of credit to extend the line of credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two-Eleven Distribution, LLC. On March 1, 2021, we executed a second amendment to the line of credit. The amendment took retroactive effect to February 17, 2021, extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment to the line of credit to extend the line of credit facility through February 28, 2023 and to replace interest determined by LIBOR Daily Floating Rate with the Bloomberg Short-Term Bank Yield Index rate. As of ~~March 31,~~June 30, 2022, there were no advances of the line of credit leaving $1,500,000 of the line of credit available for advance.

On December 29, 2021, Two Eleven entered into a Loan and Security agreement with a bank, effective December 17, 2021, to finance equipment. The Equipment Note financed under the Loan and Security Agreement has a total value of $272,519, payable in 36 consecutive monthly installments commencing February 5, 2022, and continuing to January 5, 2025. Interest shall accrue on the entire principal amount of this Equipment Note outstanding from time to time at a fixed rate of 3.5370% per annum. The principal and interest amount of each payment shall be $7,990. As of ~~March 31,~~June 30, 2022, the amount of ~~$258,125~~$236,373 was outstanding.

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

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

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

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

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

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

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

Allowance for Doubtful Accounts Receivable - Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to substantially all distributors on an unsecured basis. We continuously monitor collections and payments from customers and maintain an allowance for doubtful accounts receivable based upon the expected credit losses determined utilizing historical experience and any specific customer collection issues that have been identified. In determining the amount of the allowance, we are required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after we have used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. The allowance for doubtful accounts was ~~$306,110~~$283,713 at ~~March 31,2022~~June 30, 2022 and $291,584 at December 31, 2021.

Inventory Valuation - Inventory is stated at the lower of cost or market. Cost is determined using the first-in first-out (FIFO) method. Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, we make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, we utilize historical experience as well as current market information. The reserve for obsolescence was ~~$129,839~~$210,452 at ~~March 31,~~June 30, 2022 and $116,183 at December 31, 2021.

Impairment of Long-Lived Assets - Our long-lived assets include property and equipment. We evaluate our long-lived assets for recoverability whenever events or changes in circumstances indicate that an asset may be impaired. In evaluating an asset for recoverability, we estimate the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. We have determined there was no impairment charge during the quarters ended ~~March 31,~~June 30, 2022 and 2021.

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

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

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

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

As of ~~March 31,~~June 30, 2022, the Company's management, under the direction of its Chief Executive Officer and the Chief Financial Officer, Mr. Sean Macdonald, carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer determined that the Company's disclosure controls and procedures were deemed to be effective.

There were no changes in our internal controls over financial reporting during the period ended ~~March 31,~~June 30, 2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may become involved in various lawsuits and legal proceedings in the ordinary course of our business. Other than as set forth below, we are currently not aware of any legal proceedings the ultimate outcome of which, in our judgment based on information currently available, would have a material adverse effect on our business, financial condition or operating results.

On April 3, 2018, a wrongful death lawsuit was filed against the Company in Superior Court of California, Imperial County, and subsequently removed to USDC San Diego. The claims asserted included strict liability, negligence, failure to warn, and breach of implied and express warranties. After facing a vigorous defense, the plaintiffs agreed to a confidential settlement dismissing all claims against the Company. A formal dismissal order has not yet been entered.

There are no material changes from the risk factors previously disclosed in Item 1A "Risk Factors" of our annual report on Form 10-K for the period ended December 31, 2021.

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

The following exhibits are filed as part of this report or incorporated by reference:

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PART I	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS.	21
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	1211
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	2324
ITEM 4.	CONTROLS AND PROCEDURES.	2324

PART II	OTHER INFORMATION	2325

ITEM 1.	LEGAL PROCEEDINGS.	2325
ITEM 1A.	RISK FACTORS.	2325
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	2325
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	2325
ITEM 4.	MINE SAFETY DISCLOSURES.	2325
ITEM 5.	OTHER INFORMATION.	2425
ITEM 6.	EXHIBITS.	2425

ExhibitNo.	Description

31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*
101*	Interactive data files pursuant to Rule 405 of Regulation S-T

101.INS	Inline XBRL Instance ~~Document–the~~Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Date: ~~May 12,~~ August 11, 2022	LEATT CORPORATION

	By: /s/ Sean Macdonald
	Sean Macdonald
	~~Sean Macdonald~~
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

ExhibitNo.	Description

31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*	Interactive data files pursuant to Rule 405 of Regulation S-T

101.INS	Inline XBRL Instance ~~Document–the~~Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

ASSETS
		March 31, 2022			December 31, 2021
		Unaudited			Audited
Current Assets
Cash and cash equivalents	$	4,245,676		$	5,022,436
Short-term investments		58,263			58,262
Accounts receivable, net		17,743,659			12,660,936
Inventory, net		19,916,817			21,081,481
Payments in advance		1,541,775			1,610,640
Prepaid expenses and other current assets		3,900,500			4,178,427
Total current assets		47,406,690			44,612,182

Property and equipment, net		3,147,973			3,128,086
Operating lease right-of-use assets, net		1,287,949			1,393,213
Other Assets
Deposits		49,750			33,339

Total Assets	$	51,892,362		$	49,166,820

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	11,410,067		$	14,617,671
Note payable, current		88,168			83,270
Operating lease liabilities, current		279,148			318,621
Income taxes payable		4,146,521			2,738,818
Short term loan, net of finance charges		661,067			975,025
Total current liabilities		16,584,971			18,733,405

Deferred compensation		340,000			320,000
Note payable, net of current portion		169,957			189,249
Operating lease liabilities, net of current portion		1,008,801			1,074,592
Deferred tax liability, net		228,600			228,600
Commitments and contingencies		-			-
Stockholders' Equity
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding		3,000			3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 5,791,683 and 5,673,683 shares issued and outstanding		130,280			130,162
Additional paid - in capital		9,689,299			9,230,847
Accumulated other comprehensive loss		(521,534	)		(779,268	)
Retained earnings		24,258,988			20,036,233
Total stockholders' equity		33,560,033			28,620,974

Total Liabilities and Stockholders' Equity	$	51,892,362		$	49,166,820

		Three Months Ended
		March 31
		2022		2021
		Unaudited		Unaudited

Revenues	$	24,228,108	$	12,896,475

Cost of Revenues		14,601,018		6,844,521

Gross Profit		9,627,090		6,051,954

Product Royalty Income		78,839		24,810
Operating Expenses
Salaries and wages		1,297,962		924,537
Commissions and consulting expenses		162,586		220,662
Professional fees		259,115		337,755
Advertising and marketing		613,890		517,580
Office lease and expenses		207,021		87,373
Research and development costs		533,700		405,105
Bad debt expense		18,324		65,825
General and administrative expenses		711,752		528,599
Depreciation		276,924		236,535
Total operating expenses		4,081,274		3,323,971
Income from Operations		5,624,655		2,752,793
Other Income (Expenses)
Interest and other expenses, net		6,157		(4,007	)
Total other income (expenses)		6,157		(4,007	)

Income Before Income Taxes		5,630,812		2,748,786

Income Taxes		1,408,057		687,948

Net Income Available to Common Shareholders	$	4,222,755	$	2,060,838
Net Income per Common Share
Basic	$	0.73	$	0.38
Diluted	$	0.68	$	0.34

Weighted Average Number of Common Shares Outstanding
Basic		5,765,461		5,430,374
Diluted		6,246,325		6,118,129

Comprehensive Income
Net Income	$	4,222,755	$	2,060,838
Other comprehensive income, net of $0 and ($1,000) deferred income taxes in 2022 and 2021
Foreign currency translation		257,734		(28,352	)

Total Comprehensive Income	$	4,480,489	$	2,032,486

		Three months ended March 31,
		2022	% of Revenues		2021	% of Revenues
Consumer and athlete direct revenues	$	595,479	2%	$	570,701	5%
Dealer direct revenues		5,003,608	21%		5,566,732	43%
International distributor revenues		18,629,021	77%		6,759,042	52%
	$	24,228,108	100%	$	12,896,475	100%

		Three Months Ended March 31,							Percentage
		2022		2021			Increase		Increase
Item							(Decrease)		(Decrease)

REVENUES	$	24,228,108	$	12,896,475		$	11,331,633		88%
COST OF REVENUES		14,601,018		6,844,521		$	7,756,497		113%
GROSS PROFIT		9,627,090		6,051,954		$	3,575,136		59%
PRODUCT ROYALTY INCOME		78,839		24,810		$	54,029		218%
OPERATING EXPENSES
Salaries and Wages		1,297,962		924,537		$	373,425		40%
Commissions and Consulting		162,586		220,662		$	(58,076	)	-26%
Professional Fees		259,115		337,755		$	(78,640	)	-23%
Advertising and Marketing		613,890		517,580		$	96,310		19%
Office Lease and Expenses		207,021		87,373		$	119,648		137%
Research and Development Costs		533,700		405,105		$	128,595		32%
Bad Debt Expense		18,324		65,825		$	(47,501	)	-72%
General and Administrative		711,752		528,599		$	183,153		35%
Depreciation		276,924		236,535		$	40,389		17%
Total Operating Expenses		4,081,274		3,323,971		$	757,303		23%
INCOME FROM OPERATIONS		5,624,655		2,752,793		$	2,871,862		104%
Other Income (Expenses)		6,157		(4,007	)	$	10,164		254%
INCOME BEFORE INCOME TAXES		5,630,812		2,748,786		$	2,882,026		105%
Income Taxes		1,408,057		687,948		$	720,109		105%
NET INCOME	$	4,222,755	$	2,060,838		$	2,161,917		105%

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

REVENUES	$	17,938,310		$	14,300,559		$	3,637,751		25%
COST OF REVENUES		10,294,238			8,107,020		$	2,187,218		27%
GROSS PROFIT		7,644,072			6,193,539		$	1,450,533		23%
PRODUCT ROYALTY INCOME		46,971			58,479		$	(11,508	)	-20%
OPERATING EXPENSES
Salaries and Wages		1,325,177			912,811		$	412,366		45%
Commissions and Consulting		150,634			215,986		$	(65,352	)	-30%
Professional Fees		79,653			123,501		$	(43,848	)	-36%
Advertising and Marketing		746,114			518,153		$	227,961		44%
Office Lease and Expenses		193,878			87,200		$	106,678		122%
Research and Development Costs		480,843			445,156		$	35,687		8%
Bad Debt Recovery		(13,969	)		(51,732	)	$	37,763		73%
General and Administrative		710,351			609,760		$	100,591		16%
Depreciation		287,943			242,401		$	45,542		19%
Total Operating Expenses		3,960,624			3,103,236		$	857,388		28%
INCOME FROM OPERATIONS		3,730,419			3,148,782		$	581,637		18%
Other Income (Expenses)		(8,349	)		3,948		$	(12,297	)	-311%
INCOME BEOFRE INCOME TAXES		3,722,070			3,152,730		$	569,340		18%
Income Taxes		995,150			744,082		$	251,068		34%
NET INCOME	$	2,726,920		$	2,408,648		$	318,272		13%

		June 30,
		2022			2021
Net cash provided by operating activities	$	953,460		$	1,270,276
Net cash used in investing activities	$	(392,765	)	$	(191,445	)
Net cash used in financing activities	$	(528,191	)	$	(317,720	)
Effect of exchange rate changes on cash and cash equivalents	$	(105,169	)	$	20,427
Net increase (decrease) in cash and cash equivalents	$	(72,665	)	$	781,538
Cash and cash equivalents at the beginning of period	$	5,022,436		$	2,967,042
Cash and cash equivalents at the end of period	$	4,949,771		$	3,748,580