TOR Minerals International : 2021 Audited Financials

TOR MINERALS INTERNATIONAL, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

TOR MINERALS INTERNATIONAL, INC. AND SUBSIDIARIES
TOR Minerals International, Inc. and Subsidiaries	Page
Independent Auditor's Report	2
Consolidated Statements of Operations -	4
Years ended December 31, 2021 and 2020
Consolidated Statements of Comprehensive Loss -	5
Years ended December 31, 2021 and 2020
Consolidated Balance Sheets -	6
As of December 31, 2021 and 2020
Consolidated Statements of Shareholders' Equity -	7
Years ended December 31, 2021 and 2020
Consolidated Statements of Cash Flows -	8
Years ended December 31, 2021 and 2020
Notes to the Audited Consolidated Financial Statements	9

Tel:	713-960-1706	2929 Allen Parkway, 20th Floor
Fax:	713-960-9549	Houston, TX 77019

www.bdo.com

Independent Auditor's Report

Board of Directors and Shareholders of TOR Minerals International, Inc. Corpus Christi, Texas

Opinion

We have audited the consolidated financial statements of TOR Minerals International, Inc. and Subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America ("GAAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued or available to be issued.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

In performing an audit in accordance with GAAS, we:

• • Exercise professional judgment and maintain professional skepticism throughout the audit.

• • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

• • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

• • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

• • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Houston, Texas

March 24, 2022

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands)

Years Ended December 31,2021

Technical services and research and development

2020

NET SALES

Cost of sales GROSS MARGIN

Selling, general and administrative expenses

$

29,170 27,034 2,136 63 3,936

$

22,464 21,315 1,149

79 3,911

(Gain) on disposal of assets

(50)

(2)

OPERATING LOS S

(1,813)

(2,839)

OTHER (EXPENSE) INCOME:

Interest expense, net

(Loss) Gain on foreign currency exchange rate

Other income, net

Total Other Expense

(49) (107) 664 508

(85) 62 668 645

Loss from Continuing Operations

(1,305)

(2,194)

Income tax(benefit) expense Dis continued Operations :

Income (Loss) from discontinued operations, TMI.Plant, for the year

ended 2021 (including loss on disposal of $372) and for year ended 2020

(1)

62

3

(78)

NET LOSS

$

(1,242)

$

(2,275)

See accompanying notes to the consolidated financial statements.