INVAP S.A.U. — Interim / Quarterly Report 2022

Nov 11, 2021

BLACK RIVER TECHNOLOGY, INC. Financial Statements & Supplementary Independent Audit Report For the Three-Month Ended September 30, 2021

Table of Contents

Auditors Report .................................................................................................. 1 Income Statement .............................................................................................. 2 Balance Sheet ..................................................................................................... 3 Statement of Cash Flows ..................................................................................... 5 Statement of Stockholder’s Equity ...................................................................... 6 Notes to the Financial Statements ...................................................................... 6

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JPizars – CPA & Business Consultants LLC

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

To the Board of Directors and Stockholder Black River Technology, Inc.

Introduction

" ' We have reviewed the accompanying balance sheet of Black River Technology, Inc. (the Company ) as of September 30, 2021 and the related statements of operations, stockholder's equity, and cash flows for the nine-month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and presentation of this interim financial information in accordance with accounting principles generally accepted in the United States of America. Our responsibility is to express a conclusion on this interim financial information based on our review.

S cope of Revi ew

W e conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not present fairly, in all material respects, the financial position of the entity as of September 30, 2021, and of its financial performance and its cash flows for the three-month period then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The Company has significant transactions and balances with the Company's sole stockholder, which are described in Note 2 to ' the financial statements. Transactions involving related parties, such as with the Company s sole stockholder, cannot be presumed to be carried out on an arm's length basis, as the requisite conditions for competitive, free-market dealings may not exist. Our conclusion is not modified as a result of this matter.

JPizars Hollywood, Florida November 10, 2021

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Black River Technology Inc 2808 Centre Circle Ste A-B Downers Grove, IL 60515

Profit & Loss Statement

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July 2021 through September 2021

4-0000 Income 4-4000 Sales 4-4100 Interest Income Total Income 5-0000 Cost Of Sales 5-5000 Product Cost 5-5050 Freight In Total Cost Of Sales Gross Profit 6-0000 Expenses 6-6000 Wages & Salaries 6-6060 Simple Emp PensionExpense 6-6150 Auto Expenses 6-6250 Bank Charges 6-6300 Depreciation 6-6350 Dues & Subscriptions 6-6400 Medical Benefits 6-6450 Insurance 6-6700 Miscellaneous Exp 6-6750 Office expense 6-6850 Postage and freight-out 6-6900 Rent expense 6-7050 Payroll expenses 6-7100 Telephone & Internet expenses 6-7200 Utilities Total Expenses Operating Profit 8-0000 Other Income 9-0000 Other Expenses Net Profit/(Loss)	359,757.49 1.42 359,758.91 315,410.39 2,411.05 317,821.44 41,937.47 43,837.20 972.91 290.00 981.05 376.47 738.36 3,602.61 3,933.33 574.74 1,442.82 218.14 3,786.88 3,869.24 2,282.23 223.58 67,129.56 -25,192.09 -25,192.09	359,757.49 1.42 359,758.91 315,410.39 2,411.05 317,821.44 41,937.47 43,837.20 972.91 290.00 981.05 376.47 738.36 3,602.61 3,933.33 574.74 1,442.82 218.14 3,786.88 3,869.24 2,282.23 223.58 67,129.56 -25,192.09 -25,192.09
		-25,192.09 -25,192.09

Black River Technology Inc 2808 Centre Circle Ste A-B Downers Grove, IL 60515

Balance Sheet

As of September 2021

1-0000 Assets 1-1060 BMO Harris Bank 1-1100 Accounts Receivable 1-1140 Payments in Advce Suppliers 1-1141 Advces to Personnel 1-1142 Prepaid Expenses 1-1199 ProForma Invoices 1-1200 Inventory 1-1201 Goods on Transit 1-1202 Inventory to be shipped 1-1300 Furniture, Fixtures & Equip. 1-1310 Computers 1-1400 Accumulated Depreciation 1-1510 Rental Bonds / Security Total Assets 2-0000 Liabilities 2-2000 Accounts Payable 2-2161 Visa 2-2162 Amex 2-2510 Provisions & Other Contingenc. 2-2900 Deprec.Reserve Goods not Sold Total Liabilities 3-0000 Equity 3-3900 Net Income 3-3910 Retained Earnings Current Year 3-3920 Common Stock 3-3930 Additional Paid in Capita 3-3940 Retained Earnings Total Equity Total Liability & Equity	27,158.35 221,152.24 13,058.39 1,931.71 2,984.47 -480,573.34 502,514.11 19,500.00 29,880.38 15,935.47 19,110.25 -35,043.72 2,640.16 340,248.47 99,738.42 56.30 78,263.71 37,944.04 76,757.97 292,760.44 -25,192.09 96,622.40 25,000.00 2,042,103.87 -2,091,046.15 47,488.03 340,248.47	27,158.35 221,152.24 13,058.39 1,931.71 2,984.47 -480,573.34 502,514.11 19,500.00 29,880.38 15,935.47 19,110.25 -35,043.72 2,640.16 340,248.47 99,738.42 56.30 78,263.71 37,944.04 76,757.97 292,760.44 -25,192.09 96,622.40 25,000.00 2,042,103.87 -2,091,046.15 47,488.03 340,248.47
		340,248.47

Black River Technology Inc

2808 Centre Circle Ste A-B Downers Grove, IL 60515

July 2021 through September 2021

Statement of Changes in Financial Position

Note/ Reference OPERATING ACTIVITIES Fiscal year result P&L Adjustments for: Accounts receivable write offs Deferred income tax (benefit) expense BS Loss on disposal of fixed assets Amortizations and depreciations Expenses Decrease in trade receivables BS Increase in Parent receivables BS Increase in inventories BS Increase in other assets BS Increase in deposits BS Increase in trade and other payables BS Increase in income tax receivable Increase in income tax payable BS Increase in other payables and accrued liabilities Increase in Parent payables Net cash from operating activities INVESTING ACTIVITIES Acquisition of fixed and intangible assets PP&E Proceeds from sale of fixed assets (Adjust.Accum Depreciations) Net cash flows from investing activities FINANCING ACTIVITIES Payments to parent Increase in Equity BS Payments of note payable BS Net cash flows from financing activities Net Increase of cash and cash equivalents BS Cash and cash equivalent at the beginning of the year BS CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD BS	09/30/2021 (25,192) - 0 - 376 0 (31,387) 12,200 (5,475) 0 46,186 0 4,340 0
	1,049
	(0) -
	(0)
	- 2 -
	2
	1,052 26,109
	27,161

Black River Technology Inc

2808 Centre Circle Ste A-B Downers Grove, IL 60515

July 2020 through June 2021

For the 12-month ended

Statement of Stockholder’s Equity

Main Account	Capital	Contributions to be capitalized	Retained Earnings	Total Shareholders' Equity
1INITIAL BALANCES AS Shareholders´ contributions Outstanding shares Retained earnings Accounting restatements Unappropriated retained earnings SUBTOTAL 2MODIFICATIONS TO THE INITIAL BALANCES 3MODIFIED INITIAL BALANCES 4RESULTS OF THE YEAR 5ACCOUNTING RESTATEMENTS SUBTOTAL 6FINAL BALANCES Shareholders´ contributions Outstanding shares Retained earnings Accounting restatements Unappropriated retained earnings	5.000	1.562.104	(1.994,424)
	5.000	1.562.104	(1.994,424)	(427,300)
	20.000	480.000
	25.000	2.042.104	(1.994,424)	(427,300)
			(25,192)
	25.000	2.042.104	(2.019,616)	47,488
	25.000	2.042.104	(2.109,616))	2.067.104 (2.019,616)
TOTAL	25.000	2.042.104	(2.109,616)	47,488

BLACK RIVER TECHNOLOGY, INC. NOTES TO THE FINANCIAL STATEMENTS

For the three-month period ended September 30, 2021

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF ACCOUNTING

Black River Technology, Inc. (the "company') is incorporated under the laws of the United States of America. The Company is located in Downers Grove, Illinois and is engaged in buying, selling, distributing and exporting electrical and engineering products to its Parent company INVAP S.E. ("INVAP" or "Parent"). The Company operates on a 12-month period ending June 30, and its functional currency is the US dollar. The Company is wholly-owned by INVAP, an Argentinean entity, which is devoted to the design and construction of complex technological systems. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP).

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Inventories: Inventories consist of supplies and equipment held for resale and are stated at the lower of cost (first-in, first-out) or net realizable value.

Revenue recognition and accounts receivable: Revenue on product sales is generally recognized when goods are shipped and the following criteria have been met: a sales arrangement exists, products have been shipped and title has transferred, the price of the product is fixed or determinable, and collectability is reasonable assured.

Management determines an allowance for doubtful accounts by periodically evaluating individual accounts receivable and considering a customer's financial condition, credit history and current economic conditions. Accounts receivable are written off when deemed uncollectible. As of September 30, 2021, no amounts have been recorded.

Related party: As described in Note 1, the Company sells US sourced products to its sole stockholder, INVAP and therefore, all company sales are to the parent Transactions involving related parties, such as with INVAP, cannot be presumed to be carried out on an arm's length basis, as the requisite conditions for competitive, free-market dealings may not exist. INVAP personnel provides some administrative and accounting support to the Company. The Company was not charged a fee for the services for the three month period ended September 30, 2021.

Shipping and handling fees and costs: The Company records shipping and handling fees and costs billed to customers as revenue, and shipping and handling costs incurred by the Company as cost of sales.

Taxation: The current provision or benefit for income taxes represents actual or estimated amounts payable or refundable on tax returns filed or to be filed. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the balance sheet. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense (benefit) for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment. The measurement of deferred tax assets may be reduced by a valuation allowance based on a judgmental assessment of available evidence if deemed more likely than not than some or all of deferred tax assets will not be realized. (Continued)

BLACK RIVER TECHNOLOGY, INC. NOTES TO THE FINANCIAL STATEMENTS

For the three-month period ended September 30, 2021

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.

The Company's policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense. As of September 30, 2021, the Company did not have any accrued interest or penalties associated with any unrecognized tax positions, nor was any interest expense recognized during the three-month period ended September 30, 2021.

The Company is subject to U.S. federal income tax as well as income tax in the State of Illinois. The Company is no longer subject to examination by taxing authorities for years prior to 2014.

Use of estimates: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent events: The Company evaluated subsequent events through November 10, 2021, the date that the Company's financial statements were available to be issued, for consideration of subsequent events to be included in its March 31, 2021 financial statements.

NOTE 3 - ADVANCES, PARENT (Australia Branch)

As of July 1, 2018, The Company owed INVAP Australia (a branch of IN V AP) $500,000 for advances made to the Company on behalf of INVAP during fiscal year 2017. These advances were unsecured, non-interest bearing and were due on demand. In February of 2019, the Company and INVAP agreed to convert the related party debt into equity. The transaction involved converting $500,000 of debt to 20,000 shares of common stock of the Company at $25 per share.

NOTE 4 - INCOME TAXES | Not Applicable

NOTE 5 - OPERATING LEASES

The Company leases office and warehouse space under an operating lease that requires monthly payments of $1,302.30 plus expenses and expires in August 2022. Under the terms of the lease agreement, the Company is responsible for its pro-rata share of taxes, insurance and operating costs. The Company has ceased the lease of a vehicle for an officer. The lease was classified as an operating lease. Cancellation of the lease demanded the expenditure of $11,400 – as per condition of Contract.

(Continued)

BLACK RIVER TECHNOLOGY, INC. NOTES TO THE FINANCIAL STATEMENTS

For the three-month period ended September 30, 2021

NOTE 6 - CONTINGENCY

On December 9, 2014, the Company received a Grand Jury Subpoena requesting the Company to produce documents to the U.S. Federal Bureau of Investigation ("FBI”). BRT produced non-privileged documents that were responsive to the Subpoena requests to the FBI on January 16, 2015. The Company has not been informed of the Government's position as to whether the Company is a target, subject, or witness in this investigation. The Company has also communicated with an investigator from the United States Nuclear Regulatory Commission related to an investigation into certain Company shipments. At this time, the Company is unable to form a judgment as to whether an ultimate outcome unfavorable to the Company in the matter or matters described above is either "Probable" or "Remote". At this time, the Company also in unable to give an estimate of the amount or range of potential loss, if any, which might result to the Company if the outcome in the matter or matters described above w ere unfavorable.

Company has been informed that no action will be taken, nor filed, against it by Grand Jury

NOTE 7 - MANAGEMENT'S PLANS

Management assesses, considering both quantitative and qualitative factors, whether there are conditions and events that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Based on management's assessment, the Company did not identify any conditions that raise substantial doubt about the Company's ability to continue as a going concern. Due to economic conditions that affected the Parent, the Company has experienced a continuous reduction in its revenues. The Company has restructured its operations and significantly decreased its overhead costs, with focus to maintain its operational efficiency. The Company will continue to seek overhead costs reductions whenever possible without compromising its operating delivery quality and believes it has taken all actions necessary. The Company has a financial support commitment from its Parent to help it implement its strategic plans.