What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 244 added, 187 removed, 499 unchanged (46% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

BALANCE SHEETS

March 31, 2023

CONSOLIDATED BALANCE SHEETS

June 30, 2023

December 31, 2022

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Property and equipment, net

Deferred tax asset

Operating lease right-of-use asset

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5,000,000 shares authorized;

0 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

0 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

34,823,015 shares issued and 30,632,345 shares outstanding as of March 31, 2023 and 34,754,265 shares issued and 30,872,607 shares outstanding as of December 31, 2022

35,348,350 shares issued and 30,788,871 shares outstanding as of June 30, 2023 and 34,754,265 shares issued and 30,872,607 shares outstanding as of December 31, 2022

Treasury stock, at cost;

4,190,670 and 3,881,658 shares held as of March 31, 2023 and December 31, 2022, respectively

4,559,479 and 3,881,658 shares held as of June 30, 2023 and December 31, 2022, respectively

( 15,249,796 )

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$ 123,086,281

accompanying notes to unaudited consolidated financial statements

accompanying notes to unaudited condensed consolidated financial statements

– DIAGNOSTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended March 31,

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

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( 11,994,439 )

( 4,147,038 )

( 21,945,089 )

Other income, net

Interest income

3 unchanged sentences

Gain (loss) on equity method investment in joint venture

Total other income

Total other income, net

Income (loss) before income taxes

( 11,157,145 )

( 3,427,810 )

( 19,172,347 )

Income tax provision (benefit)

( 2,238,320 )

( 4,498,131 )

Net income (loss)

$ ( 8,918,825 )

Other comprehensive income

$ ( 2,686,303 )

$ ( 14,674,216 )

Other comprehensive income (loss)

Change in net unrealized gains on marketable securities, net of tax

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$ ( 8,811,459 )

Earnings per common share:

$ ( 2,686,303 )

$ ( 14,388,229 )

Earnings (loss) per common share:

Weighted average shares outstanding:

accompanying notes to unaudited consolidated financial statements

accompanying notes to unaudited condensed consolidated financial statements

– DIAGNOSTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Cash flows from operating activities

1 unchanged sentence

$ ( 14,674,216 )

Adjustments to reconcile net income to cash (used in) provided by operating

Adjustments to reconcile net income to cash (used in) provided by operating activities:

Depreciation and amortization

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Accounts receivable

Prepaid expenses

Prepaid expenses and other assets

( 2,920,658 )

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Income taxes payable

( 1,918,510 )

Accounts payable, accrued expenses and other liabilities

( 1,702,718 )

Net cash (used in) provided by operating activities

5 unchanged sentences

( 66,126,080 )

( 9,951,550 )

Net cash (used in) provided by investing activities

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Repurchases of common stock

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

( 1,037,930 )

( 2,599,478 )

Net cash (used in) financing activities

( 1,037,930 )

( 2,421,607 )

Net (decrease) in cash and cash equivalents

( 9,142,957 )

( 2,561,829 )

Cash and cash equivalents at beginning of period

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Right-of-use assets obtained in exchange for new operating lease liabilities

accompanying notes to unaudited consolidated financial statements

Business acquisition measurement period adjustments

accompanying notes to unaudited condensed consolidated financial statements

– DIAGNOSTICS, INC.

AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS’ EQUITY

Preferred Stock

Additional Paid-in

Accumulated Other

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Comprehensive

Total Stockholders’

Stockholders’

Balance as of December 31, 2022

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$ 110,629,770

Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders’

$ ( 14,694,062 )

$ 110,629,770

Stock-based compensation

Repurchases of common stock

Other comprehensive income, net of tax

( 8,918,825 )

Net income (loss)

( 8,918,825 )

Balance as of June 30, 2023

$ ( 15,249,796 )

$ 103,432,377

$ ( 15,249,796 )

$ 103,432,377

Preferred Stock

Comprehensive

Stockholders’

Balance as of December 31, 2021

4 unchanged sentences

Stock-based compensation

Net income (loss)

Balance as of March 31, 2022

1 unchanged sentence

$ 147,714,793

accompanying notes to unaudited consolidated financial statements

Common stock issued for option exercises

Stock-based compensation

Common stock issued for acquisitions

Repurchases of common stock

( 2,599,478 )

( 2,686,303 )

Net income (loss)

( 2,686,303 )

Balance as of June 30, 2022

$ ( 2,599,478 )

$ 144,470,941

$ ( 2,599,478 )

$ 144,470,941

accompanying notes to unaudited condensed consolidated financial statements

– DIAGNOSTICS, INC.

AND SUBSIDIARIES

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 – Overview and Basis of Presentation

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a unique, groundbreaking portable PCR device and proprietary test cups (the “Co-Dx PCR Home™ platform”) that have been

designed to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and even at-home settings.

designed to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and at-home settings.

This platform is subject to U.S.

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or that, if regulatory approval is received, we will be able to successfully commercialize this platform.

Consolidated Financial Statements

accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States of America for interim financial information and with the instructions to Form 10-Q as they are prescribed

for smaller reporting companies.

Accordingly, they do not include all the information and footnotes required by accounting principles

generally accepted in the United States of America for complete financial statements.

In the opinion of management, all adjustments (consisting

of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

Operating results

for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December

These statements should be read in conjunction with the Company’s audited financial statements and related notes for

the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed on March 16, 2023.

Condensed Consolidated Financial Statements

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles

generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q as they are

prescribed for smaller reporting companies.

Accordingly, they do not include all the information and footnotes required by accounting

principles generally accepted in the United States of America for complete financial statements.

In the opinion of management, all adjustments

(consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year

ending December 31, 2023.

These statements should be read in conjunction with the Company’s audited financial statements and related

notes for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed on March 16, 2023.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

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Such estimates include receivables

and other long-lived assets, legal and regulatory contingencies, income taxes, share based arrangements, and others.

These estimates

and assumptions are based on management’s best estimates and judgments.

and other long-lived assets, legal contingencies, income taxes, share based arrangements, and others.

These estimates and assumptions

are based on management’s best estimates and judgments.

Actual amounts and results could differ from those estimates.

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or less from the date of purchase.

The fair value of cash equivalents approximated their carrying value as of March 31, 2023 and December

The Company has its cash and cash equivalents with a large creditworthy financial institution

The fair value of cash equivalents approximated their carrying value as of June 30, 2023 and December

The Company has its cash and cash equivalents with large creditworthy financial institutions

and the balance exceeded federally insured limits.

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securities with original maturities longer than three months are available to fund current operations and are classified as marketable

investment securities, within current assets on the consolidated balance sheets.

The Company may sell these securities at any time for

use in its current operations or for other purposes, even prior to maturity.

Available-for-sale debt securities are reported at fair

value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’

equity, net of tax.

Realized gains and losses on the sale of marketable securities are determined using the average cost method on a

first-in, first-out basis and recorded in total other income (expense), net in the condensed consolidated statements of operations and

comprehensive income.

investment securities, within current assets on the condensed consolidated balance sheets.

The Company may sell these securities at any

time for use in its current operations or for other purposes, even prior to maturity.

Available-for-sale debt securities are reported

at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of

stockholders’ equity, net of tax.

Realized gains and losses on the sale of marketable investment securities are determined using

the average cost method on a first-in, first-out basis and recorded in total other income (expense), net in the condensed consolidated

statements of operations and comprehensive income (loss).

available-for-sale debt securities are subject to a periodic impairment review.

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written off are recorded when collected.

At March 31, 2023, total accounts receivable was $ 5,686,589 with an allowance for uncollectable

At June 30, 2023, total accounts receivable was $ 4,510,545 with an allowance for uncollectable

accounts of $ 3,413,152 resulting in a net amount of $ 1,097,393 .

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Equity-Method

equity method investments are initially recorded at cost and are included in other long-term assets in the accompanying consolidated

balance sheet.

We adjust the carrying value of our investment based on our share of the earnings or losses in the periods which they

are reported by the investee until the carrying amount is zero.

The earnings or losses are included in other income (expense) in the

accompanying consolidated statements of operations.

Company’s equity method investments are initially recorded at cost and are included in other long-term assets in the accompanying

condensed consolidated balance sheet.

The Company adjusts the carrying value of its investment based on our share of the earnings or

losses in the periods which they are reported by the investee until the carrying amount is zero.

The earnings or losses are included

in other income (expense) in the accompanying condensed consolidated statements of operations.

is stated at the lower of cost or net-realizable value.

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average cost in accordance with ASC 330-10-30-12.

At March 31, 2023, the Company had $ 5,294,653 in inventory, comprised of $ 1,081,540

At June 30, 2023, the Company had $ 4,691,068 in inventory, comprised of $ 842,087

of finished goods, and $ 3,848,981 of raw materials.

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which case the repairs are capitalized.

Company reviews its long-lived assets, including property and equipment, finite-lived intangible assets, and ROU assets, for impairment

whenever an event or change in facts and circumstances indicates that their carrying amounts may not be recoverable.

Recoverability of

these assets is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated.

the carrying amount exceeds the undiscounted cash flows, the assets are determined to be impaired and an impairment charge is recognized

Company reviews its long-lived assets, including property and equipment, finite-lived intangible assets, and right-of-use (ROU) assets,

for impairment whenever an event or change in facts and circumstances indicates that their carrying amounts may not be recoverable.

Recoverability

of these assets is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated.

If the carrying amount exceeds the undiscounted cash flows, the assets are determined to be impaired and an impairment charge is recognized

as the amount by which the carrying amount exceeds fair value.

estimate the fair value of assets acquired and liabilities assumed in a business combination.

Goodwill as of the acquisition date is

measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and

unpredictable, and as a result, actual results may differ from estimates.

Company estimates the fair value of assets acquired and liabilities assumed in a business combination.

Goodwill as of the acquisition

date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and

the liabilities assumed.

Such valuations require management to make significant estimates and assumptions, especially with respect to

intangible assets.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently

uncertain and unpredictable, and as a result, actual results may differ from estimates.

Company adopted ASC 842, Leases (“ASC 842”) effective January 1, 2022.

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records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

revenue primarily consists of payments received from customers prior to the Company fulfilling its performance obligation of providing

revenue primarily consists of payments received from customers related to product sales or from granting agencies for services to be

rendered under research grants, prior to the Company fulfilling its performance obligation of providing the product or performing research

activities under the grant agreement.

When this occurs, the Company records a contract liability as deferred revenue.

Deferred revenue is recognized as revenue

as the related performance obligations are satisfied.

Deferred revenue

is recognized as revenue as the related performance obligations are satisfied.

and Development

and development costs are expensed when incurred.

For the three months ended March 31, 2023, the Company expensed $ 5,014,060 of research

and development costs, respectively.

For the three months ended March 31, 2022, the Company expensed $ 3,771,327 .

For the three and six months ended June 30, 2023, the Company expensed $ 5,981,043 and

$ 10,995,103 of research and development costs, respectively.

For the three and six months ended June 30, 2022, the Company expensed $ 3,889,844

and $ 7,661,171 , respectively.

Company has granted stock-based awards, including restricted stock, stock options, stock warrants and restricted stock units (“RSUs”),

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tax strategies are subject to audit by various taxing authorities.

The Company has uncertain income tax positions in the consolidated

financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the consolidated

The Company has uncertain income tax positions in the condensed consolidated

financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the condensed consolidated

financial positions, result of operations, or cash flows.

Income per Share

Income (Loss) per Share

net income or loss per common share is computed by dividing net income or loss applicable to common shareholders by the weighted average

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Comprehensive

Income (Loss)

Comprehensive

income is comprised of unrealized gains and losses on marketable securities, net of income taxes.

income is comprised of unrealized gains and losses on marketable investment securities, net of income taxes.

Concentrations

Risk and Significant Customers

Company had certain customers which are each responsible for generating 10 % or more of the total revenue for the three months ended March

Two customers accounted for approximately 44 % of total revenue for the three months ended March 31, 2023.

Three customers together

accounted for approximately 54 % of total revenue for the three months ended March 31, 2022.

customers accounted for more than 10 % of accounts receivable at March 31, 2023 and one customer accounted for more than 10 % of accounts

Company had certain customers which are each responsible for generating 10 % or more of the total revenue for the three and six months

ended June 30, 2023.

Three customers accounted for approximately 44 % of total revenue for the three months ended June 30, 2023, and two

customers accounted for approximately 33 % of total revenue for the six months ended June 30, 2023.

One customer accounted for approximately

55 % of total revenue for the three months ended June 30, 2022, and two customers accounted for approximately 46 % of total revenue for

the six months ended June 30, 2022.

customers accounted for more than 10 % of accounts receivable at June 30, 2023 and one customer accounted for more than 10 % of accounts

receivable at December 31, 2022.

These customers together accounted for approximately 82 % and 37 % of accounts receivable at March 31,

These customers together accounted for approximately 77 % and 37 % of accounts receivable at June 30,

2023 and December 31, 2022, respectively.

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of Cash, Cash Equivalents and Marketable Investment Securities

March 31, 2023

Adjusted Cost

Allowance for Credit Losses

Total Unrealized Gains / (Losses)

June 30, 2023

Cash and cash equivalents

Marketable Securities

Money market funds

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December 31, 2022

Adjusted Cost

Allowance for Credit Losses

Total Unrealized Gains / (Losses)

Cash and cash equivalents

Marketable Securities

Money market funds

treasury securities

investment securities held as of March 31, 2023 mature over the next 12 months.

investment securities held as of June 30, 2023 mature over the next 12 months.

4 – Intangible Assets, Net

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of Intangible Assets, Net

March 31, 2023

June 30, 2023

Weighted-Average

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on weighted-average useful life established as of the acquisition date.

expected future annual amortization expense of the Company’s intangible assets held as of March 31, 2023 is as follows:

expected future annual amortization expense of the Company’s intangible assets held as of June 30, 2023 is as follows:

of Future Amortization Expense

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Amortization Expense

2023 (remainder)

5 – Fair Value Measurements

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Unobservable inputs that are not corroborated by market data.

following table summarizes the assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31,

following table summarizes the assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31,

2022, by level within the fair value hierarchy:

of Fair Value Assets and Liabilities

March 31, 2023

June 30, 2023

Cash equivalents

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treasury bills and notes as

of March 31, 2023 and December 31, 2022.

connection with the acquisitions of IdMo and ACI on December 31, 2021, the Company recorded a liability for contingent consideration

in the form of shares of common stock and warrants to purchase common stock.

The fair value of contingent consideration is calculated

using a discounted probability weighted valuation model.

Discount rates used in such calculations are a significant assumption that are

not observed in the market, and therefore, the resulting fair value represents a Level 3 measurement.

of June 30, 2023 and December 31, 2022.

connection with the acquisitions of Idaho Molecular, Inc.

(IdMo) and Advanced Conceptions, Inc.

(ACI) on December 31, 2021, the Company

recorded a liability for contingent consideration in the form of shares of common stock and warrants to purchase common stock.

value of contingent consideration is calculated using a discounted probability weighted valuation model.

Discount rates used in such

calculations are a significant assumption that are not observed in the market, and therefore, the resulting fair value represents a Level

3 measurement.

changes for Level 3 items measured at fair value on a recurring basis are as follows:

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( 1,397,077 )

Fair value as of March 31, 2023

Fair value as of June 30, 2023

fair value of the contingent consideration is based on the fair value of the contingent consideration-common stock and contingent consideration-warrants.

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of Contingent Consideration Common Stock and Warrants

March 31, 2023

June 30, 2023

December 31, 2022

Risk-free rate

Expected term

Expected term (years)

Value of Other Financial Instruments

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of Revenue by Geographic Area

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

United States

Rest of World

Revenue geographic area

Percentage of revenue by area:

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Rest of World

in the Company’s deferred revenue balance for the three months ended March 31, 2023 were as follows:

in the Company’s deferred revenue balance for the six months ended June 30, 2023 were as follows:

of Deferred Revenue

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Increase due to prepayments from customers

Balance as of March 31, 2023

7 – Earnings Per Share

following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share for three months

ended March 31, 2023 and 2022, respectively:

of Basic and Diluted Earnings Per Share

Three Months Ended March 31,

Net income, as reported

Increase due to prepayments from grants received

Balance as of June 30, 2023

7 – Earnings (Loss) Per Share

following table reconciles the numerator and the denominator used to calculate basic and diluted earnings (loss) per share for three

and six months ended June 30, 2023 and 2022, respectively:

of Basis and Diluted Earnings Per Share

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss), as reported

$ ( 8,918,825 )

$ ( 2,686,303 )

$ ( 14,674,216 )

Weighted average shares, basic

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Shares used to compute diluted earnings per share

Basic earnings per share

Diluted earnings per share

the three months ended March 31, 2022, potentially dilutive securities of 1,271,304 were excluded from the calculation because their

effect would have been anti-dilutive.

The computation of basic and diluted earnings per share for the three months ended March 31, 2023

and 2022, respectively, also excludes the approximately 1.4 million shares of common stock and approximately 465,000 warrants to purchase

shares of common stock that are contingent upon the achievement of certain milestones.

a result of incurring a net loss for the three months ended March 31, 2023, no potentially dilutive securities are included in the calculation

of diluted earnings per share because such effect would be anti-dilutive.

The Company had potentially dilutive securities as of March

31, 2023, consisting of:

Basic earnings (loss) per share

Diluted earnings (loss) per share

the three and six months ended June 30, 2022, potentially dilutive securities of 1,391,156 and 1,155,136 were excluded from the calculation

because their effect would have been anti-dilutive.

The computation of basic and diluted earnings (loss) per share for the three and

six months ended June 30, 2023 and 2022, respectively, also excludes the approximately 1,400,000 shares of common stock and approximately

465,000 warrants to purchase shares of common stock that are contingent upon the achievement of certain milestones.

a result of incurring a net loss for the three and six months ended June 30, 2023, no potentially dilutive securities are included in

the calculation of diluted earnings (loss) per share because such effect would be anti-dilutive.

The Company had potentially dilutive

securities as of June 30, 2023, consisting of:

(i) 2,890,985 restricted stock units and (ii) 512,112 options.

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The number of awards available for issuance under

the Incentive Plan was 5,518,290 at March 31, 2023.

following table summarizes option activity during the three months ended March 31, 2023:

the Incentive Plan was 4,340,736 at June 30, 2023.

following table summarizes option activity during the six months ended June 30, 2023:

of Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Exercise Price

Outstanding at December 31, 2022

Forfeited/Cancelled

Outstanding at March 31, 2023

Exercisable at March 31, 2023

aggregate intrinsic value of outstanding options at March 31, 2023 was approximately $ 0.3 million.

Outstanding at June 30, 2023

Exercisable at June 30, 2023

aggregate intrinsic value of outstanding options at June 30, 2023 was approximately $ 0.1 million.

compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting

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The Company uses the Black-Scholes model to value options granted.

As of March 31, 2023, there

As of June 30, 2023, there

were no unvested options and no unrecognized stock-based compensation expense related to options.

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The following table sets forth the outstanding

RSUs and related activity for the three months ended March 31, 2023:

of Outstanding Restricted Stock Units and Related Activity

Weighted Average Grant Date Fair Value

RSUs and related activity for the six months ended June 30, 2023:

of Outstanding Restricted Stock Units and Related Party

Number of RSUs

Weighted Average

Grant Date Fair

Unvested at December 31, 2022

Forfeited/Cancelled

Unvested at March 31, 2023

of March 31, 2023, there was approximately $ 14.5 million of unrecognized stock-based compensation expense related to outstanding RSUs

Unvested at June 30, 2023

of June 30, 2023, there was approximately $ 13.8 million of unrecognized stock-based compensation expense related to outstanding RSUs

which is expected to be recognized over a weighted-average period of 2.0 years.

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the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

following table summarizes warrant activity during the three months ended March 31, 2023:

following table summarizes warrant activity during the six months ended June 30, 2023:

of Warrant Activity

Number of Warrants

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Exercise Price

Outstanding at December 31, 2022

Forfeited/Cancelled

Outstanding at March 31, 2023

were no warrants exercised during the three months ended March 31, 2023.

The intrinsic value of warrants exercised during the three months

ended March 31, 2022 was approximately $ 0.3 million.

The aggregate intrinsic value of outstanding warrants at March 31, 2023 was approximately

$ 0.1 million.

total number of warrants exercisable at March 31, 2023 is 20,000 .

Outstanding at June 30, 2023

were no warrants exercised during the six months ended June 30, 2023.

The intrinsic value of warrants exercised during the six months

ended June 30, 2022 was approximately $ 0.3 million.

The aggregate intrinsic value of outstanding warrants at June 30, 2023 was approximately

total number of warrants exercisable at June 30, 2023 is 20,000 .

The ability to exercise the approximately 465,000 warrants issued in

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of Recognized Stock-based Compensation Expense

Three Months Ended March 31,

Cost of sales

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

Sales and marketing

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9 – Income Taxes

the three months ended March 31, 2023, the Company recognized a benefit from income taxes of $ 2,259,811 , representing an effective tax

the three months ended June 30, 2023, the Company recognized a benefit from income taxes of $ 2,238,320 , representing an effective tax

rate of 20.1 %.

For the six months ended June 30, 2023, the Company recognized a benefit from income taxes of $ 4,498,131 , representing

an effective tax rate of 23.5 %.

The Company’s effective tax rate will generally differ from the U.S.

Federal statutory rate of 21.0 % due to state

taxes, permanent items, and discrete items.

For the three months ended March 31, 2022, the Company recognized expense from income taxes

of $ 1,386,087 .

Federal statutory rate of

21.0 % due to state taxes, permanent items, and discrete items.

For the three months ended June 30, 2022, the Company recognized a benefit

from income taxes of $ 741,507 .

For the six months ended June 30, 2022, the Company recognized expense from income taxes of $ 644,580 .

10 – Commitments and Contingencies

Company leases office space under a non-cancellable operating lease and leases cancellable with one month notice.

Company leases office space under non-cancellable operating leases and leases cancellable with one month notice.

The Company expenses

the cancelable leases in the period incurred in accordance with the practical expedient elected.

As such, one lease makes up the entirety

of the right-of-use asset and lease liability disclosed.

During the three months ended March 31, 2023, this lease was amended to extend

the lease term.

As a result of this amendment, the Company recognized an additional operating lease liability and corresponding operating

right-of-use asset of $ 657,150 .

the three months ended March 31, 2023, components of lease expense are summarized as follows:

the cancellable leases in the period incurred in accordance with the practical expedient elected.

During the six months ended June 30,

2023, the Company amended two operating leases to extend the lease term and entered into one new operating lease.

As a result, the Company

recognized additional operating lease liabilities and corresponding operating right-of-use assets of $ 3,063,782 .

the three and six months ended June 30, 2023, components of lease expense are summarized as follows:

of Lease Expense

Three Months Ended March 31, 2023

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

Operating lease costs

1 unchanged sentence

Total lease costs

lease costs under month-to-month lease agreements are paid to related parties.

of March 31, 2023, the maturities of the Company’s lease liabilities are as follows:

of June 30, 2023, the maturities of the Company’s lease liabilities are as follows:

of Maturities on Company Lease Liabilities

2023 (remainder)

Total lease payments

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of Other Information Related to Operating Lease

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2023

Cash paid for operating leases included in operating cash flows

31 unchanged sentences

of Treasury Stock

Three Months Ended

March 31, 2023

Six Months Ended

June 30, 2023

Balance, beginning of period

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements