What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 143 added, 52 removed, 273 unchanged (42% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Investment securities

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

Trade accounts receivable, less allowance for doubtful accounts of $ 33,600 at June 30, 2024 and December 31, 2023

Income tax receivable

16 unchanged sentences

30,000,000 shares authorized;

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

10,503,599 and 10,145,211 , shares issued and 10,503,599 and 10,145,211, shares outstanding at June 30, 2024 and December 31, 2023

Additional paid-in capital

8 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

For the Three Months Ended March 31,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Cost of revenues

6 unchanged sentences

( 2,226,200 )

( 3,425,700 )

( 4,693,800 )

Other income:

2 unchanged sentences

Total other income, net

Loss from continuing operations before income tax benefit

Loss from continuing operations before income tax expense benefit

( 1,283,600 )

( 2,185,100 )

( 3,335,200 )

( 4,557,000 )

Income tax expense

2 unchanged sentences

( 2,293,900 )

( 3,335,200 )

( 4,665,800 )

Discontinued operations:

2 unchanged sentences

( 2,292,000 )

$ ( 3,335,200 )

$ ( 4,662,500 )

Comprehensive gain (loss):

Unrealized holding gain on investment securities, net of tax

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

Foreign currency translation (loss) gain

3 unchanged sentences

( 2,324,200 )

$ ( 3,379,700 )

$ ( 4,650,800 )

Basic and Diluted loss per common share

20 unchanged sentences

$ ( 29,536,700 )

( 1,283,600 )

Foreign currency translation adjustment

Stock-based compensation

Balance June 30, 2024

$ ( 30,820,300 )

Comprehensive

11 unchanged sentences

$ ( 20,769,100 )

( 2,292,000 )

Foreign currency translation adjustment

Unrealized holding loss on investment securities, net of tax

Retirement of treasury stock

Stock-based compensation

Balance June 30, 2023

$ ( 23,061,100 )

See notes to unaudited condensed consolidated financial statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Operating activities:

4 unchanged sentences

Stock-based compensation

Provision for bad debt

Povision for bad debt

Loss on sale of investment securities

4 unchanged sentences

Prepaid and other current assets

Income tax receivable

Accounts payable

Accrued expenses

15 unchanged sentences

Net decrease in cash and cash equivalents

( 1,282,600 )

Cash and cash equivalents, beginning of period

14 unchanged sentences

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.

The results for the three and six months ended June 30, 2024 are not necessarily an indication of the results for the full fiscal year ending December 31, 2024.

Significant Accounting Policies

2 unchanged sentences

(“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, 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.

1 unchanged sentence

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.

For the six months ended June 30, 2024, the Company generated negative cash flows from operations of $ 2,436,800 and has an accumulated deficit of $ 30,820,300 as of June 30, 2024.

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.

Company management does not believe that cash on hand and cash flows expected to be generated internally by the Company will be adequate to fund its operations and other cash flow 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 making plans to secure such resources for the Company which may include capital from management and significant shareholders sufficient to meet its operating expenses and 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.

Reclassifications

16 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 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

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 June 30, 2024 and December 31, 2023 according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurements as of June 30, 2024

Investment securities - Mutual funds

Fair Value Measurements as of December 31, 2023

Investment securities

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:

Investment securities - Mutual funds

Investments in marketable securities by security type as of June 30, 2024 and December 31, 2023 consisted of the following:

As of June 30, 2024:

Unrealized Holding

8 unchanged sentences

Goodwill and Finite Lived Intangible Assets

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

Goodwill amounted to $ 115,300 as of June 30, 2024 and December 31, 2023.

Finite lived intangible assets consist of the following:

As of March 31, 2024:

As of June 30, 2024:

Technology, trademarks

7 unchanged sentences

Non-compete agreements

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

Total amortization expense was $ 126,700 and $ 127,800 for the three months ended June 30, 2024 and 2023, respectively.

Total amortization expense was $ 253,700 and $ 257,800 for the six months ended June 30, 2024 and 2023, respectively.

Estimated future fiscal year amortization expense of intangible assets as of June 30, 2024 is as follows:

As of June 30, 2024

Remainder of fiscal year ending 2024

5 unchanged sentences

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

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:

As of June 30, 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 June 30, 2024 were as follows:

As of June 30, 2024:

Remainder of fiscal year ending 2024

6 unchanged sentences

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.

1 unchanged sentence

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.

Salary for Equity Incentive Options

On April 1, 2024 and May 17, 2024, as part of the Company’s strategic initiatives to reduce operating costs and conserve cash for operations, the Company entered into a voluntary Salary/Compensation Waiver Program pursuant to which each director, officer and employee of the Company and its subsidiaries could elect to waive a portion of his or her salary/compensation for twelve months and receive instead options to purchase shares of the Common Stock of the Company (the “stock options”).

As a result, the Company issued 628,960 stock options, having a exercise price of $ 2.50 per share, which vest monthly over twelve months , valued at $ 948,200 on the grant date using the Black-Scholes-Merton option pricing model.

Equity Cancel and Replacement Options

On April 1, 2024, as part of the Company’s strategic initiatives to incentivize current employees, the Company entered into a cancellation and replacement agreement of certain out-of-the money outstanding employee stock options (the “replacement stock options”), whereby employees surrendered outstanding stock options (“cancelled option awards") and the Company granted and replaced with the same number of replacement stock options, having an exercise price of $ 2.50 per share, which vest monthly over three years.

The Company accounted for the replacements options as a modification of the terms of the cancelled option awards and in accordance with ASC 718-20-35-2A the Company will recognize $ 613,400 stock compensation expense over the three year vesting period, which was determined by the grant-date fair value of the original award for which the service is expected to be rendered at the cancellation date, plus incremental costs measured as the excess of the fair value of the replacement options on the grant date using the Black-Scholes-Merton option pricing model over the fair value of the cancelled option award at the cancellation date in accordance with ASC 718-20-35-3.

Board of Director Stock Options

On April 12, 2024, the Board of Directors of the Company (the “Board”) appointed Michael Blechman (“Mr.

Blechman”) (i) as a Class B Director of the Company, (ii) a member of the Board’s audit committee, (iii) a member of the Board’s compensation committee, and (iv) the Chair and member of the Company’s Nominating Committee.

On May 17, 2024, in connection with Mr.

Blechman’s appointment, the Company granted and issued 25,000 stock options with an exercise price of $ 1.75 which vest monthly over three years , valued at $ 34,500 on the grant date using the Black-Scholes-Merton option pricing model.

Loss Per Common Share

5 unchanged sentences

For the three months ended

For the six months ended

Weighted average number of common shares outstanding

5 unchanged sentences

Consolidated operations

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.

Approximately 1,766,547 and 8,232,510 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 both the three and six months ended June 30, 2024.

Approximately 18,077 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 June 30, 2023.

Approximately 20,336 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 six months ended June 30, 2023.

Related Parties

Consulting Agreements

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

During the three and six months ended June 30, 2024 and 2023, respectively, the Company paid $ 31,300 and $ 47,300 , respectively, and $ 0 and $ 0 , respectively, to Mr.

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

5 unchanged sentences

Segment information is reported as follows.

Three Months Ended March 31, 2024:

Three Months Ended June 30, 2024:

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate And Other

Bioprocessing

Corporate And

Foreign Sales

4 unchanged sentences

Depreciation and Amortization

Three Months Ended March 31, 2023:

Three Months Ended June 30, 2023:

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate And Other

Bioprocessing

Corporate And

Foreign Sales

4 unchanged sentences

Depreciation and Amortization

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

For the three months ended June 30, 2024 no customers accounted for approximately 10 % or more of the Company’s total revenue.

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

Six Months Ended June 30, 2024:

Benchtop Laboratory Equipment

Bioprocessing Systems

Bioprocessing

Corporate And

Foreign Sales

Income (Loss) From Operations

1 unchanged sentence

( 3,425,700 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Six Months Ended June 30, 2023:

Benchtop Laboratory Equipment

Bioprocessing

Corporate And

Foreign Sales

Income (Loss) From Operations

( 3,867,100 )

( 1,308,300 )

( 4,693,800 )

Long-Lived Asset Expenditures

Depreciation and Amortization

For the six months ended June 30, 2024 no customers accounted for approximately 10 % or more of the Company’s total revenue.

For the six months ended June 30, 2023 no customers 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 and six months ended June 30, 2024 and 2023, respectively are as follows:

For the three months ended June 30, 2024

Benchtop Laboratory Equipment

Bioprocessing

Income (Loss) from Operations

$ ( 1,292,900 )

$ ( 257,800 )

$ ( 1,336,200 )

Other income(expense), net

Interest income

Total other income(expense), net

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

$ ( 1,287,300 )

$ ( 207,100 )

$ ( 1,283,600 )

For the three months ended June 30, 2023

Benchtop Laboratory Equipment

Bioprocessing

Income (Loss) from Operations

$ ( 1,794,600 )

$ ( 647,000 )

$ ( 2,226,200 )

Other income (expense), net

Interest income

Total other income, net

3 unchanged sentences

$ ( 2,185,100 )

For the three months ended March 31, 2023

For the six months ended June 30, 2024

Benchtop Laboratory Equipment

Bioprocessing Systems

Bioprocessing

Income (Loss) from Operations

4 unchanged sentences

Interest income

Total other (expense) income, net

Total other income(expense), net

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

2 unchanged sentences

$ ( 3,335,200 )

For the six months ended June 30, 2023

Benchtop Laboratory Equipment

Bioprocessing

Income (Loss) from Operations

$ ( 3,867,100 )

$ ( 1,308,300 )

$ ( 4,693,800 )

Other income (expense), net

Interest income

Total other income, net

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

$ ( 3,856,000 )

$ ( 1,185,000 )

$ ( 4,557,000 )

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