What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 86 added, 267 removed, 239 unchanged (60% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

March 31, 2024

December 31, 2023

Current assets:

1 unchanged sentence

Investment securities

Trade accounts receivable, less allowance for doubtful accounts of $ 33,600 at September 30, 2023 and December 31, 2022

Trade accounts receivable, less allowance for doubtful accounts of $ 33,600 at March 31, 2024 and December 31, 2023

Income tax receivable

10 unchanged sentences

Lease liabilities, current portion

Bank overdraft

Total current liabilities

4 unchanged sentences

30,000,000 shares authorized;

7,003,599 shares issued and outstanding at September 30, 2023 and 7,023,401 shares issued and 7,003,599 shares outstanding at December 31, 2022

10,503,599 and 10,145,211 , shares issued and 10,503,599 and 10,145,211 , shares outstanding at March 31, 2024 and December 31, 2023

Additional paid-in capital

Accumulated comprehensive loss

Accumulated other comprehensive gain (loss)

Accumulated deficit

1 unchanged sentence

( 27,485,100 )

Less common stock held in treasury at cost, 0 shares at September 30, 2023 and 19,802 shares at December 31, 2022

Total shareholders’ equity

3 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended, September 30

Nine Months Ended, September 30

2022 (as Restated)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

For the Three Months Ended March 31,

Cost of revenues

2 unchanged sentences

Research and development

Impairment of goodwill and intangible asset

Total operating expenses

2 unchanged sentences

( 2,467,600 )

( 6,919,200 )

( 9,869,100 )

Other income:

Other income (expense), net

Interest income

Total other income (expense), net

Loss from continuing operations before income tax expense

( 2,201,100 )

( 1,709,200 )

Total other income, net

Loss from continuing operations before income tax benefit

( 2,051,600 )

( 2,371,900 )

Income tax expense(benefit), current

Income tax expense, deferred

Total Income tax expense

Income tax expense

Loss from continuing operations

1 unchanged sentence

( 2,371,900 )

( 6,866,900 )

( 13,265,400 )

Discontinued operations:

Gain (loss) from discontinued operations, net of tax

( 2,201,100 )

( 1,709,200 )

Gain from discontinued operations, net of tax

$ ( 2,051,600 )

$ ( 2,370,500 )

Comprehensive loss:

Unrealized holding gain (loss) on investment securities, net of tax

Foreign currency translation adjustment

Comprehensive loss

Comprehensive gain (loss):

Unrealized holding gain on investment securities, net of tax

Foreign currency translation (loss) gain

Comprehensive (loss) gain

Total comprehensive loss

1 unchanged sentence

$ ( 2,326,600 )

( 6,947,600 )

( 13,586,200 )

Basic and Diluted loss per common share

5 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

Accumulated Other

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

Comprehensive

6 unchanged sentences

( 2,051,600 )

Issuance of Common Stock and Warrants, net of issuance costs (Note 7)

Fair value modification of warrants recorded as stock issuance costs

Foreign currency translation adjustment

Unrealized gain on investment securities, net of tax

Stock-based compensation

1 unchanged sentence

$ ( 29,536,700 )

( 2,292,000 )

Foreign currency translation adjustment

Unrealized loss on investment securities, net of tax

Retirement of treasury stock

Stock-based compensation

Balance June 30, 2023

( 23,061,100 )

( 2,201,100 )

Foreign currency translation adjustment

Stock-based compensation

Balance September 30, 2023

( 25,262,200 )

Accumulated Other

Comprehensive

6 unchanged sentences

( 2,370,500 )

Issuance of Common Stock and Warrants, net of issuance costs

Foreign currency translation adjustment

Unrealized loss on investment securities, net of tax

Unrealized holding gain on investment securities, net of tax

Stock-based compensation

1 unchanged sentence

$ ( 20,769,100 )

$ ( 4,291,400 )

( 10,027,800 )

Foreign currency translation adjustment

Unrealized loss on investment securities, net of tax

Stock-based compensation

Balance, June 30, 2022 (as restated)

$ ( 105,600 )

$ ( 14,319,200 )

( 1,709,200 )

Foreign currency translation adjustment

Unrealized gain on investment securities, net of tax

Stock-based compensation

Balance, September 30, 2022 (as restated)

$ ( 219,800 )

$ ( 16,028,400 )

See notes to consolidated financial statements

See notes to unaudited condensed consolidated financial statements

SCIENTIFIC INDUSTRIES, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Operating activities:

4 unchanged sentences

Stock-based compensation

Change in fair value of contingent consideration

Loss on sale of investments

Unrealized holding (gain) loss on investments

Deferred income taxes

Impairment of goodwill and intangible asset

Provision for bad debt

Loss on sale of investment securities

Unrealized holding (gain) on investment securities

Carrying value of right of use assets

Changes in operating assets and liabilities:

Trade accounts receivable

( 1,415,400 )

Prepaid and other current assets

Income tax receivable

Carrying value of right of use assets

Accounts payable

Accrued expenses

1 unchanged sentence

Lease liabilities

Total adjustments

( 1,533,300 )

Net cash used in operating activities

3 unchanged sentences

Purchase of investment securities

( 1,648,100 )

Redemption of investment securities

Capital expenditures

Purchase of other intangible assets

Net cash provided by investing activities

2 unchanged sentences

Issuance costs of common stock and warrants

Payments of contingent consideration

Bank overdraft

Net cash provided by financing activities

Effect of changes in foreign currency exchange rates

Effect of changes in foreign currency exchange rates on cash and cash equivalents

Net decrease in cash and cash equivalents

( 1,411,700 )

( 1,859,300 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period for:

Noncash financing activities:

Record right-of-use assets

Record lease liabilities

See notes to consolidated financial statements

See notes to unaudited condensed consolidated financial statements

SCIENTIFIC INDUSTRIES, INC.

7 unchanged sentences

The products, which are sold to customers worldwide, include mixers, shakers, stirrers, refrigerated incubators, pharmacy balances and scales, force gauges, bioprocessing sensors and analytical tools.

The accompanying (a) condensed balance sheet as of December 31, 2022, which has been derived from audited financial statements, and (b) unaudited interim condensed consolidated financial statements are prepared pursuant to the Securities and Exchange Commission’s rules and regulations for reporting on Form 10-Q.

The accompanying (a) unaudited condensed balance sheet as of December 31, 2023, which have been derived from audited financial statements, and (b) unaudited interim condensed consolidated financial statements are prepared pursuant to the Securities and Exchange Commission’s rules and regulations for reporting on Form 10-Q.

Accordingly, certain information and notes required by accounting principles generally accepted in the United States for complete financial statements are not included herein.

The Company believes all adjustments necessary for a fair presentation of these interim statements have been included and that they are of a normal and recurring nature.

These interim statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto, included in its Annual Report on Form 10-KT for the six months transition period of July 1, 2022 through December 31, 2022.

The results for the three and nine months ended September 30, 2023 are not necessarily an indication of the results for the full fiscal year ending December 31, 2023.

These interim statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto, included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The results for the three months ended March 31, 2024 are not necessarily an indication of the results for the full fiscal year ending December 31, 2024.

Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Scientific Industries, Inc., Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary, Altamira Instruments, Inc.

(“Altamira”), a Delaware corporation and wholly-owned subsidiary (discontinued operation as of November 30, 2020), and Scientific Bioprocessing Holdings, Inc.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Scientific Industries, Inc., Scientific Bioprocessing Holdings, Inc.

(“SBHI”), a Delaware corporation and wholly-owned subsidiary, which holds 100 % of the outstanding stock of Scientific Bioprocessing, Inc.

(“SBI”), a Delaware corporation, and aquila biolabs GmbH (“Aquila”), a German corporation, since its acquisition on April 29, 2021, (all collectively referred to as the “Company”).

(“SBI”), a Delaware corporation, and aquila biolabs GmbH (“Aquila”), a German corporation, since its acquisition on April 29, 2021, Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary and Altamira Instruments, Inc.

(“Altamira”), a Delaware corporation and wholly-owned subsidiary (discontinued operation as of November 30, 2020) (all collectively referred to as the “Company”).

All material intercompany balances and transactions have been eliminated in consolidation.

Liquidity and Going Concern Considerations

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which contemplate continuation of the Company as a going concern.

For the three months ended March 31, 2024, the Company generated negative cash flows from operations of $ 1,561,100 and has an accumulated deficit of $ 29,536,700 as of March 31, 2024.

In order to address these conditions, the Company has undertaken a number of strategic initiatives that management believes will provide sufficient funding to enable the Company to continue to operate as a going concern.

During the three months ended March 31, 2024, the Company continued to eliminate certain operating expenses in conjunction with its review of the strategic operational and product development plan for the Bioprocessing Systems Operations segment.

The Company identified expenses which the Company does not anticipate replacing or to be recurring in the Company’s operational plans for the foreseeable future, primarily in the form of reduced number of employees and related employment expenses.

An additional $ 716,776 of equity financing was raised in January 2024 as disclosed in Note 7.

Management is in plans to obtain such resources for the Company by obtaining capital through third party equity and/or debt financing.

However, management cannot provide any assurances that the Company will be successful in accomplishing its plans.

As a result of the above actions, as of May 15, 2024, the Company believes that it will be able to meet its cash flow needs during the next 12 months from cash and investment securities on-hand, cash derived from its Benchtop Laboratory Equipment Operations, and availability of the Company’s line of credit.

Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

However, for the reasons described below, Company management does not believe that cash on hand and cash flows generated internally by the Company will be adequate to fund its overhead and other cash requirements over the next twelve months.

These reasons 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 to be filed.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.

Management is in plans to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking third party equity and/or debt financing.

However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Restatement Background

On April 12, 2023, the management of Scientific Industries, Inc.

(the "Company"), together with the Company's Board of Directors, acting collective as the Audit Committee (the "Audit Committee") reached a determination that the Company’s consolidated audited financial statements as of and for the fiscal year ended June 30, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and the Company’s consolidated unaudited financial statements as of and for the quarter period ended September 30, 2022 included in the Company’s Quarterly Reports on Form 10-Q filed with the SEC, collectively the “Non-Reliance Periods”, should no longer be relied upon because of material misstatements contained in those consolidated financial statements.

The Company’s management and the Audit Committee discussed the matters with Macias Gini & O'Connell LLP (“MGO”), the Company’s independent registered public accounting firm, and determined to restate its consolidated audited financial statements for the Non-Reliance Periods.

During the preparation of its audited financial statements for the six-month transition period from July 1, 2022 to December 31, 2022, the Company identified an error in the assessment of a full valuation allowance against the consolidated net deferred tax asset and in addition, the Company identified an error in the use of future projections and weighted average cost of capital used in the annual goodwill impairment testing of the Company’s Bioprocessing Systems segment.

Upon further analysis of the errors, the Company determined that it should have allocated a full valuation allowance to the consolidated net deferred tax asset and applied a goodwill impairment charge to the Bioprocessing Systems reporting unit in the fiscal year ended June 30, 2022, as restated in the Company’s Transition Report for the six-month transition period from July 1, 2022 to December 31, 2022, filed on Form 10-KT with the SEC.

The Company has restated certain information within this Quarterly Report on Form 10-Q, relevant to the unaudited interim financial information as of September 30, 2022.

Derivative Instruments

The Company may enter into derivative transactions to hedge its exposures to foreign exchange risk associated with Euro foreign currency denominated assets and liabilities and other Euro foreign currency transactions.

On January 9, 2023, the Company entered into a 90-day foreign currency forward contract with a settled date on April 11, 2023, for a notional amount of $ 1,082,500 .

On April 4, 2023, the Company entered into a 90 day foreign currency forward contract with a settled date on July 11, 2023, for a notional amount of $ 1,097,300 .

The foreign currency forward contracts are used to manage the foreign exchange risk associated with a portion of the Company’s Euro foreign currency denominated assets and liabilities and other Euro foreign currency transactions.

The Company is required to record these derivatives in the balance sheet at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained.

Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings.

If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings.

Changes in the fair value of undesignated derivatives are recorded in the statement of operations.

Recently Adopted Accounting Pronouncements

On January 1, 2023, the Company adopted Accounting Standards Update, or ASU, No.

2016-13, Financial Instruments - Credit Losses (“ASC 326”):

Measurement of Credit Losses on Financial Instruments, which replaces the “incurred loss” model for recognizing credit losses with a forward-looking “expected loss” model that generally will result in the earlier recognition of credit losses.

The measurement of current expected credit losses, or “CECL”, is based upon historical experience, current conditions, and reasonable and supportable forecasts incorporating forward-looking information that affect the collectability of the reported amount.

2016-13 is applicable to financial assets measured at amortized cost and off-balance sheet credit exposures.

Allowance for Credit Losses – Accounts Receivable

The allowance for credit losses required under ASC 326 is a valuation account that is deducted from the accounts receivables’ amortized cost basis on the Company’s condensed consolidated balance sheets.

Our accounts receivables are generated from the sales revenue derived from the Company’s Benchtop Laboratory Equipment and Bioprocessing Systems segments.

The Company elected to estimate expected losses using an analytical model based on methods that utilize the accounts receivable aging schedule.

This analytical model incorporates historical loss activity, geographic location, customer-specific information, collection terms and customer amounts.

The Company evaluates the estimated allowance on an aggregate basis as each individual account receivable shares similar risk characteristics.

Upon adoption of ASC 326 using the modified retrospective transition method and as of September 30, 2023, the Company determined that the allowance for credit losses, if any, is immaterial as of adoption date and the Company will continue to evaluate the accounts receivable portfolio on an on-going basis.

Allowance for Credit Losses – Available-for-Sale Debt Securities

The impairment model for available-for-sale (“AFS”) debt securities differs from the CECL methodology applied for held to maturity debt securities because AFS debt securities are measured at fair value rather than amortized cost.

Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model.

For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis.

If either criterion is met, the security’s amortized cost basis is written down to fair value.

For AFS debt securities where neither of the criteria is met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis.

Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Upon adoption of ASC 326, an entity may no longer consider the length of time fair value has been less than amortized cost.

Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses.

Losses are charged against the allowance when management believes the collectability of an AFS security is considered below the amortized cost basis of the security.

As of September 30, 2023, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded.

Reclassifications

Certain balances from fiscal 2023 have been reclassified to conform to the current year presentation.

Fair Value of Financial Instruments

14 unchanged sentences

The measurement is based on significant inputs that were not observable in the market, therefore, the Company classifies this liability as Level 3 in the following table.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets that were accounted for at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurements as of September 30, 2023

Cash and cash equivalents

The following tables set forth by level within the fair value hierarchy the Company’s financial assets that were accounted for at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurements as of March 31, 2024

Investment securities

Fair Value Measurements as of December 31, 2023

Cash and cash equivalents

Investment securities

The Company reviews the available-for-sale debt securities (“AFS”) for declines in fair value below the amortized cost basis under the credit loss model of ASC 326.

Any decline in fair value related to a credit loss is recognized in the condensed consolidated statements of operations, with the amount of the loss limited to the difference between fair value and amortized cost.

As of September 30, 2023 and December 31, 2022, the allowance for credit losses related to available-for sale debt securities was zero.

Investments in marketable securities by security type as of September 30, 2023 and December 31, 2022 consisted of the following:

As of September 30, 2023:

Investments in marketable securities by security type as of March 31, 2024 and December 31, 2023 consisted of the following:

As of March 31, 2024:

Unrealized Holding

Equity securities

As of December 31, 2023:

Unrealized Holding

Equity securities

Debt securities

$ ( 145,300 )

Foreign currency forward contract

On January 9, 2023, the Company entered into a 90 day foreign currency forward contract for a notional amount of $ 1,082,500 , which settled on April 11, 2023.

On April 4, 2023, the Company entered into a 90 day foreign currency forward contract for a notional amount of $ 1,097,300 which settled on July 11, 2023.

The foreign currency forward contract are used to manage the foreign exchange risk associated with a portion of its Euro foreign currency denominated assets and liabilities and other Euro foreign currency transactions.

Although the Company believes the hedge position accomplish an economic hedge against the Company’s future purchases and sales, management has chosen not to use hedge accounting, which would match the gain or loss on our hedge positions to the specific expense being hedged.

The Company is using fair value accounting for our hedge positions, which means as the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our statement of operations.

The immediate recognition of hedging gains and losses can cause net income/loss to be volatile from quarter to quarter due to the timing of the change in value of the derivative instruments.

September 30,

Raw materials

5 unchanged sentences

Goodwill and Finite Lived Intangible Assets

Goodwill amounted to $ 115,300 as of September 30, 2023 and December 31, 2022, all of which is expected to be deductible for tax purposes.

Goodwill amounted to $ 115,300 as of March 31, 2024 and December 31, 2023.

Finite lived intangible assets consist of the following:

As of September 30, 2023:

As of March 31, 2024:

Technology, trademarks

7 unchanged sentences

Non-compete agreements

Total amortization expense was $ 127,800 and $ 134,200 for the three months ended September 30, 2023 and 2022, respectively.

Total amortization expense was $ 385,600 and $ 403,200 for the nine months ended September 30, 2023 and 2022, respectively.

Estimated future fiscal year amortization expense of intangible assets as of September 30, 2023 is as follows:

As of September 30, 2023

Total amortization expense was $ 127,000 and $ 130,000 for the three months ended March 31, 2024 and 2023, respectively.

Estimated future fiscal year amortization expense of intangible assets as of March 31, 2024 is as follows:

As of March 31, 2024

Remainder of fiscal year ending 2024

1 unchanged sentence

Legal Matters

The Company may be named from time to time as a party to claims and litigations arising in the ordinary course of business.

During the normal course of business, the Company may be named from time to time as a party to claims and litigations arising in the ordinary course of business.

When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450, Contingencies.

1 unchanged sentence

If the Company determines that an unfavorable outcome is probable and can be reasonably assessed, it establishes the necessary accruals.

As of September 30, 2023 and December 31, 2022, the Company is not aware of any contingent legal liabilities that should be reflected in the consolidated financial statements.

The Company’s approximate future minimum rental payments under all operating leases as of September 30, 2023 were as follows:

As of September 30, 2023:

As of March 31, 2024 and December 31, 2023, the Company is not aware of any contingent legal liabilities that should be reflected in the consolidated financial statements.

The Company’s approximate future minimum rental payments under all operating leases as of March 31, 2024 were as follows:

As of March 31, 2024:

Remainder of fiscal year ending 2024

2 unchanged sentences

Total Present Value of Operating Lease Liabilities

Employment Agreement

The Company entered into an employment agreement, effective as of July 1, 2023, with Reginald Averilla, its Chief Financial Officer.

The agreement provides continued employment through June 30, 2025 for a base annual salary of $ 195,000 , a 10 % bonus at the discretion of the Board of Directors of the Company and a 12-month post termination noncompete covenant.

Stockholders’ Equity

Stock-based compensation expense

On July 21, 2023, the Company’s Bioprocessing System segment entered into a separation agreement with their VP of Sales (“former employee”).

In connection with the separation agreement, the Company extended the exercisability of the former employee’s vested stock options up through the original expiration date of July, 13, 2030 , which the Company recorded a additional $ 684,900 of noncash stock base compensation expense related to the modification of the exercisability of the vested stock options

Issuance of Common Stock and Warrants

On January 17, 2024, the Company completed the last closing of its sale of securities pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered on December 13, 2023, as filed in the Company’s Form 8-K on December 15, 2023.

At this closing, the Company sold an aggregate of 358,388 Units, comprising 358,388 shares of the Company’s common stock, par value $.05 per share (“Common Stock”) and warrants (“Warrants”) to purchase 358,388 shares of Common Stock for a total consideration of $716,776.

The Company recognized $98,700 of issuance cost, which includes $71,100 attributable to legal and placement agent fees and $27,600 attributable to the fair value of warrants, issued to the placement agent, to purchase up to 17,919 shares of Common Stock at an exercise price of $2.00 per share on substantially the same terms as the Warrants issued to the Investors .

As an incentive to certain Investors of the Company who participated in previous private placements (“Existing Investors”) and received as part of those financings, warrants (“Outstanding Warrants”) to purchase shares of Common Stock, the Company agreed that, if any Existing Investor were to purchase Units at a certain level in the offering thereof under the Purchase Agreement (the “Offering”), the Company would reduce the exercise price of the Outstanding Warrants held by such Existing Investor to $2.50 per share and extend the period in which such Outstanding Warrants could be exercised to the fifth anniversary of the date on which the Existing Investor purchased Units under the Purchase Agreement.

Each Existing Investor purchasing Units at the requisite level will receive a new warrant (the “Replacement Warrants”) to replace such Existing Investor’s Outstanding Warrants.

On January 17, 2024, as a result of their purchase of Units, Existing Investors became entitled to receive Replacement Warrants to replace 333,884 Outstanding Warrants, and therefore reducing the exercise price of such Outstanding Warrants to $ 2.50 per share and extending the period in which such Outstanding Warrants could be exercised to the fifth anniversary of the relevant closing under the Purchase Agreement.

Loss Per Common Share

4 unchanged sentences

The following table sets forth the weighted average number of common shares outstanding for each period presented.

For the three months ended September 30,

For the nine months ended September 30,

2022 (as restated)

For the three months ended

Weighted average number of common shares outstanding

5 unchanged sentences

Consolidated operations

Approximately 20,965 and 0 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, and 36,423 and 0 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the calculation because the effect would be anti-dilutive due to the loss for the three months ended September 30, 2023 and 2022, respectively.

Approximately 24,417 and 0 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, and 32,508 and 0 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the calculation because the effect would be anti-dilutive due to the loss for the nine months ended September 30, 2023 and 2022, respectively.

Approximately 1,113,837 and 7,856,203 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the calculation because the effect would be anti-dilutive due to the loss for the three months ended March 31, 2024.

Approximately 22,368 and 0 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the calculation because the effect would be anti-dilutive due to the loss for the three months ended March 31, 2023.

Related Parties

Consulting Agreements

During the nine months ended September 30, 2023 and 2022, respectively, the Company paid $ 0 and $ 120,700 , respectively, to Mr.

Reinhard Vogt, a former Director of the Company, and his affiliate which provided consulting services.

The Company’s consulting agreement with Mr.

Reinhard Vogt and his affiliate was terminated on April 1, 2022.

There were no payments to Mr.

Reinhard Vogt during the three months ended September 30, 2023 and 2022, respectively.

During the three months ended March 31, 2024 and 2023, respectively, the Company paid $ 16,000 and $ 0 , respectively, to Mr.

John Nicols, a Director of the Company, who provided consulting services to the Bioprocessing Systems segment.

Segment Information and Concentration

4 unchanged sentences

Segment information is reported as follows.

Three Months Ended September 30, 2023:

Benchtop Laboratory

Bioprocessing

Corporate And Other

Foreign Sales

Income (Loss) From Operations

( 2,105,500 )

( 2,225,400 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Three Months Ended September 30, 2022 (as Restated):

Benchtop Laboratory

Bioprocessing

Corporate And Other

Foreign Sales

Income (Loss) From Operations

( 1,515,800 )

( 1,694,200 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Nine Months Ended September 30, 2023:

Benchtop Laboratory

Bioprocessing

Three Months Ended March 31, 2024:

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate And Other

3 unchanged sentences

( 2,089,500 )

( 6,919,200 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Nine Months Ended September 30, 2022:

Benchtop Laboratory

Bioprocessing

Three Months Ended March 31, 2023:

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate And Other

3 unchanged sentences

( 2,467,600 )

( 9,869,100 )

Long-Lived Asset Expenditures

Depreciation and Amortization

For the three months ended September 30, 2023 and 2022, respectively, one customer accounted for approximately 10% or more of the Company’s total revenue.

For the nine months ended September 30, 2023 one customer accounted for approximately 10% or more of the Company’s total revenue.

For the nine months ended September 30, 2022 no individual customer accounted for 10% or more of the Company’s total revenue.

A reconciliation of the Company’s consolidated segment income (loss) from operations to consolidated loss from operations before income taxes and net loss for the three and nine months ended September 30, 2023 and 2022, respectively are as follows:

Three months ended September 30, 2023

Benchtop Laboratory

Bioprocessing

For the three months ended March 31, 2024 no customers accounted for approximately 10 % or more of the Company’s total revenue.

For the three months ended March 31, 2023 one customer accounted for approximately 10 % or more of the Company’s total revenue

A reconciliation of the Company’s consolidated segment income (loss) from operations to consolidated loss from operations before income taxes and net loss for the three months ended March 31, 2024 and 2023, respectively are as follows:

For the three months ended March 31, 2024

Benchtop Laboratory Equipment

Bioprocessing Systems

Income (Loss) from Operations

4 unchanged sentences

Interest income

Total other (expense) income, net

Income (Loss) from operations before discontinued operations and income taxes

$ ( 2,107,300 )

$ ( 172,700 )

$ ( 2,201,100 )

Three months ended September 30, 2022

Benchtop Laboratory

Bioprocessing

Income (Loss) from Operations

$ ( 1,515,800 )

$ ( 485,300 )

$ ( 1,694,200 )

Other (expense) income, net

Interest income

Total other (expense) income, net

Total other income, net

Income (Loss) from operations before discontinued operations and income taxes

2 unchanged sentences

$ ( 2,051,600 )

Nine months ended September 30, 2023

Benchtop Laboratory

Bioprocessing

For the three months ended March 31, 2023

Benchtop Laboratory Equipment

Bioprocessing Systems

Income (Loss) from Operations

9 unchanged sentences

$ ( 2,371,900 )

Nine months ended September 30, 2022

Benchtop Laboratory

Bioprocessing

Income (Loss) from Operations

$ ( 9,445,700 )

$ ( 1,346,400 )

$ ( 9,869,100 )

Other (expense) income, net

Interest income

Total other (expense) income, net

Income (Loss) from operations before discontinued operations and income taxes

$ ( 9,487,800 )

$ ( 1,575,400 )

$ ( 10,137,300 )

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