What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 91 added, 64 removed, 352 unchanged (31% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2024

December 31, 2023

September 30,

Current assets:

1 unchanged sentence

Investment securities

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

Trade accounts receivable, less allowance for doubtful accounts of $ 15,600 at September 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 June 30, 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 September 30, 2024 and December 31, 2023

Additional paid-in capital

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive gain

Accumulated deficit

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Cost of revenues

9 unchanged sentences

Other income:

Other income (expense), net

Other income, net

Interest income

Total other income, net

Loss from continuing operations before income tax expense benefit

Loss from continuing operations before income tax expense

( 1,180,100 )

15 unchanged sentences

Comprehensive gain (loss):

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

Unrealized holding gain on investment securities, net of tax

Foreign currency translation (loss) gain

Comprehensive (loss) gain

Comprehensive gain (loss)

Total comprehensive loss

31 unchanged sentences

$ ( 30,820,300 )

( 1,180,100 )

Foreign currency translation adjustment

Stock-based compensation

Balance September 30, 2024

$ ( 32,000,400 )

Comprehensive

19 unchanged sentences

$ ( 23,061,100 )

( 2,201,000 )

Foreign currency translation adjustment

Stock-based compensation

Balance September 30, 2023

$ ( 25,262,200 )

See notes to unaudited condensed consolidated financial statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Operating activities:

4 unchanged sentences

Stock-based compensation

Povision for bad debt

Provision for bad debt

Loss on sale of investment securities

36 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) 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.

The accompanying (a) unaudited condensed balance sheet as of December 31, 2023, 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.

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

1 unchanged sentence

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

The results for the three and nine months ended September 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 (all collectively referred to as the “Company”).

(“SBI”), a Delaware corporation, and aquila biolabs GmbH (“Aquila”), a German corporation and Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary (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 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.

For the nine months ended September 30, 2024, the Company generated negative cash flows from operations of $ 3,304,600 and had an accumulated deficit of $ 32,000,400 as of September 30, 2024.

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.

6 unchanged sentences

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

New Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures .

This standard includes enhanced income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid for annual periods.

The amendments in this update are effective for public companies with fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The update will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss.

The amendments are effective for the Company's annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

Fair Value of Financial Instruments

12 unchanged sentences

The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

The fair value of the contingent consideration obligations was based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria.

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 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

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

Fair Value Measurements as of September 30, 2024

Investment securities - Mutual funds

1 unchanged sentence

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:

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

As of September 30, 2024:

Unrealized Holding

1 unchanged sentence

Unrealized Holding

September 30,

Raw materials

5 unchanged sentences

Goodwill and Finite Lived Intangible Assets

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

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

Finite lived intangible assets consist of the following:

As of June 30, 2024:

As of September 30, 2024:

Technology, trademarks

7 unchanged sentences

Non-compete agreements

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

Total amortization expense was $ 127,000 and $ 127,800 for the three months ended September 30, 2024 and 2023, respectively.

Total amortization expense was $ 380,700 and $ 385,600 for the nine months ended September 30, 2024 and 2023, respectively.

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

As of September 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 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:

As of September 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 September 30, 2024 were as follows:

As of September 30, 2024:

Remainder of fiscal year ending 2024

8 unchanged sentences

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.

Each Existing Investor purchasing Units at the requisite level received 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, with each Replacement Warranting having a reduced exercise price of such Outstanding Warrants of $ 2.50 per share and exercisable until 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.

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 offered 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”).

Under this program, the Company issued 10 -year options to purchase 628,960 shares of Common Stock, each having an exercise price of $ 2.50 per share, vesting 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.

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 regarding certain out-of-the money outstanding employee stock options (the “replacement stock options”), whereby employees surrendered out-of-the-money outstanding stock options (“cancelled option awards") and the Company granted replacement stock options in the same number, having an exercise price of $ 2.50 per share, which replacement options vest monthly over three years from their date of issuance.

The Company accounted for the issuance of these 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.

Blechman”) as (i) 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 a member of the Company’s Nominating Committee.

On May 17, 2024, in connection with such appointment, the Company granted and issued to Mr.

Blechman stock options to purchase 25,000 shares of the Common Stock of the Company 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.

On July 1, 2024, the Company granted and issued stock options to purchase 10,000 shares of the Common Stock of the Company, each to Christopher Cox, John Nicols, and Jurgen Schumacher, as part of their annual compensation serving as independent Board members of the Company.

The stock options have a 10 -year life, an exercise price of $ 1.29 , 100% vested one year after the grant date, and valued at $ 10,400 on the grant date using the Black-Scholes-Merton option pricing model.

On July 1, 2024, the Company granted and issued stock options to purchase 5,000 shares of the Common Stock of the Company, each to Michael Blechman, Christopher Cox, and John Nicols, as part of their annual compensation serving as independent Committee Chairmans of the Company.

The stock options have a 10 -year life, an exercise price of $ 1.29 , 100% vested one year after the grant date, and valued at $ 5,200 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

For the nine months ended

September 30,

Weighted average number of common shares outstanding

5 unchanged sentences

Consolidated operations

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.

Approximately 1,835,447 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 nine months ended September 30, 2024.

Approximately 20,965 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.

Approximately 20,417 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.

Related Parties

Consulting Agreements

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.

During the three and nine months ended September 30, 2024 and 2023, respectively, the Company paid $24,000 and $ 71,300 , respectively, and $ 0 and $ 0 , respectively, to Mr.

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

Segment Information and Concentration

4 unchanged sentences

Segment information is reported as follows.

Three Months Ended June 30, 2024:

Three Months Ended September 30, 2024:

Benchtop Laboratory Equipment

7 unchanged sentences

Depreciation and Amortization

Three Months Ended June 30, 2023:

Three Months Ended September 30, 2023:

Benchtop Laboratory Equipment

7 unchanged sentences

Depreciation and Amortization

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:

For the three months ended September 30, 2024 one customer accounted for 10 % or more of the Company’s total revenue.

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

Nine Months Ended September 30, 2024:

Benchtop Laboratory Equipment

5 unchanged sentences

( 1,135,600 )

( 4,684,300 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Six Months Ended June 30, 2023:

Nine Months Ended September 30, 2023:

Benchtop Laboratory Equipment

8 unchanged sentences

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

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

For the nine months ended September 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 nine months ended September 30, 2024 and 2023, respectively are as follows:

For the three months ended September 30, 2024

Benchtop Laboratory Equipment

4 unchanged sentences

$ ( 1,258,600 )

Other income(expense), net

Other income, net

Interest income

Total other income(expense), net

Total other income, net

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

2 unchanged sentences

$ ( 1,180,100 )

For the three months ended June 30, 2023

For the three months ended September 30, 2023

Benchtop Laboratory Equipment

6 unchanged sentences

Interest income

Total other income, net

Total other income (expense), net

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

2 unchanged sentences

$ ( 2,201,100 )

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Benchtop Laboratory Equipment

11 unchanged sentences

$ ( 4,515,300 )

For the six months ended June 30, 2023

For the nine months ended September 30, 2023

Benchtop Laboratory Equipment

4 unchanged sentences

$ ( 6,919,200 )

Other income (expense), net

Other income, net

Interest income

5 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