SCIENTIFIC INDUSTRIES INC 10-Q

Item 1. Financial Statements SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 563,500 $ 796,100 Investment securities 2,464,300 4,928,700 Trade accounts receivable, less allowance for doubtful accounts of $ 15,600 at September 30, 2024 and December 31, 2023 1,357,400 1,157,100 Inventories 4,788,300 4,883,900 Income tax receivable 73,600 161,400 Prepaid expenses and other current assets 405,100 413,500 Total current assets 9,652,200 12,340,700 Property and equipment, net 970,500 1,082,300 Goodwill 115,300 115,300 Other intangible assets, net 879,000 1,249,900 Inventories 597,100 609,000 Operating lease right-of-use assets 1,033,300 1,273,900 Other assets 59,400 59,400 Total assets $ 13,306,800 $ 16,730,500 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 615,300 $ 711,700 Accrued expenses 623,600 777,900 Contract liabilities 44,300 23,600 Lease liabilities, current portion 327,300 324,100 Total current liabilities 1,610,500 1,837,300 Lease liabilities, less current portion 761,700 1,007,800 Total liabilities 2,372,200 2,845,100 Shareholders’ equity: Common stock, $ 0.05 par value; 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 September 30, 2024 and December 31, 2023 525,200 507,300 Additional paid-in capital 42,322,100 40,844,600 Accumulated other comprehensive gain 87,700 18,600 Accumulated deficit ( 32,000,400 ) ( 27,485,100 ) Total shareholders’ equity 10,934,600 13,885,400 Total liabilities and shareholders’ equity $ 13,306,800 $ 16,730,500 See notes to unaudited condensed consolidated financial statements. 3 Table of Contents SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2023 2024 2023 Revenues $ 2,769,100 $ 2,585,500 $ 7,899,900 $ 8,373,400 Cost of revenues 1,405,900 1,404,500 4,203,500 4,504,400 Gross profit 1,363,200 1,181,000 3,696,400 3,869,000 Operating expenses: General and administrative 1,019,000 896,300 3,602,800 3,765,500 Selling 919,600 1,614,200 2,718,000 4,650,800 Research and development 683,200 895,900 2,059,900 2,371,900 Total operating expenses 2,621,800 3,406,400 8,380,700 10,788,200 Loss from operations ( 1,258,600 ) ( 2,225,400 ) ( 4,684,300 ) ( 6,919,200 ) Other income: Other income, net 38,400 5,300 32,100 95,700 Interest income 40,100 19,000 136,900 65,400 Total other income, net 78,500 24,300 169,000 161,100 Loss from continuing operations before income tax expense ( 1,180,100 ) ( 2,201,100 ) ( 4,515,300 ) ( 6,758,100 ) Income tax expense - - - 108,800 Loss from continuing operations ( 1,180,100 ) ( 2,201,100 ) ( 4,515,300 ) ( 6,866,900 ) Discontinued operations: Gain from discontinued operations, net of tax $ - $ - - 3,300 Net loss $ ( 1,180,100 ) ( 2,201,100 ) $ ( 4,515,300 ) $ ( 6,863,600 ) Comprehensive gain (loss): Unrealized holding gain on investment securities, net of tax - - - 1,600 Foreign currency translation (loss) gain 113,600 ( 95,700 ) 69,100 ( 85,600 ) Comprehensive gain (loss) 113,600 ( 95,700 ) 69,100 ( 84,000 ) Total comprehensive loss $ ( 1,066,500 ) $ ( 2,296,800 ) $ ( 4,446,200 ) $ ( 6,947,600 ) Basic and Diluted loss per common share Continuing operations $ ( 0.11 ) $ ( 0.31 ) $ ( 0.43 ) $ ( 0.98 ) Discontinued operations $ - - $ - $ - Consolidated operations $ ( 0.11 ) ( 0.31 ) $ ( 0.43 ) $ ( 0.98 ) See notes to unaudited condensed consolidated financial statements 4 Table of Contents SCIENTIFIC INDUSTRIES , INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Treasury Stock Stockholders’ Shares Amount Capital Income (Loss) Deficit Shares Amount Equity Balance December 31, 2023 10,145,211 $ 507,300 $ 40,844,600 $ 18,600 $ ( 27,485,100 ) $ $ 13,885,400 Net loss - - - - ( 2,051,600 ) - - ( 2,051,600 ) Issuance of Common Stock and Warrants, net of issuance costs (Note 7) 358,388 17,900 204,000 - - - 221,900 Fair value modification of warrants recorded as stock issuance costs - - 423,800 - - - 423,800 Foreign currency translation adjustment - - - ( 60,300 ) - - - ( 60,300 ) Stock-based compensation - - 199,900 - - - - 199,900 Balance March 31, 2024 10,503,599 $ 525,200 $ 41,672,300 ( 41,700 ) $ ( 29,536,700 ) - $ - $ 12,619,100 Net loss - - - - ( 1,283,600 ) - - ( 1,283,600 ) Foreign currency translation adjustment - - - 15,800 - - - 15,800 Stock-based compensation - - 330,300 - - - - 330,300 Balance June 30, 2024 10,503,599 $ 525,200 $ 42,002,600 ( 25,900 ) $ ( 30,820,300 ) - $ - $ 11,681,600 Net loss - - - - ( 1,180,100 ) - - ( 1,180,100 ) Foreign currency translation adjustment - - - 113,600 - - - 113,600 Stock-based compensation - - 319,500 - - - - 319,500 Balance September 30, 2024 10,503,599 $ 525,200 $ 42,322,100 87,700 $ ( 32,000,400 ) - $ - $ 10,934,600 Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Treasury Stock Stockholders’ Shares Amount Capital Income (Loss) Deficit Shares Amount Equity Balance December 31, 2022 7,023,401 $ 351,200 $ 32,900,800 $ ( 8,400 ) $ ( 18,398,600 ) 19,802 $ 52,400 $ 14,792,600 Net loss - - - - ( 2,370,500 ) - - ( 2,370,500 ) Foreign currency translation adjustment - - - 40,200 - - - 40,200 Unrealized holding gain on investment securities, net of tax - - - 3,700 - - - 3,700 Stock-based compensation - - 602,600 - - - - 602,600 Balance March 31, 2023 7,023,401 $ 351,200 $ 33,503,400 35,500 $ ( 20,769,100 ) 19,802 $ 52,400 $ 13,068,600 Net loss - - - - ( 2,292,000 ) - - ( 2,292,000 ) Foreign currency translation adjustment - - - ( 30,100 ) - - - ( 30,100 ) Unrealized holding loss on investment securities, net of tax - - - ( 2,100 ) - - - ( 2,100 ) Retirement of treasury stock ( 19,802 ) ( 1,000 ) ( 51,400 ) - - ( 19,802 ) ( 52,400 ) - Stock-based compensation - - 584,700 - - - - 584,700 Balance June 30, 2023 7,003,599 $ 350,200 $ 34,036,700 3,300 $ ( 23,061,100 ) - $ - $ 11,329,100 Net loss - - - - ( 2,201,000 ) - - ( 2,201,000 ) Foreign currency translation adjustment - - - ( 95,700 ) - - - ( 95,700 ) Stock-based compensation - - 845,700 - - - - 845,700 Balance September 30, 2023 7,003,599 $ 350,200 $ 34,882,400 ( 92,400 ) $ ( 25,262,200 ) - $ - $ 9,878,000 See notes to unaudited condensed consolidated financial statements 5 Table of Contents SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, 2024 2023 Operating activities: Net loss $ ( 4,515,300 ) $ ( 6,863,600 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 565,400 566,700 Stock-based compensation 849,700 2,033,000 Provision for bad debt 2,000 - Loss on sale of investment securities 5,300 96,500 Unrealized holding gain on investment securities ( 44,800 ) ( 147,900 ) Carrying value of right of use assets 249,000 201,400 Changes in operating assets and liabilities: Trade accounts receivable ( 192,600 ) ( 20,100 ) Inventories 156,800 ( 532,400 ) Prepaid and other current assets 14,300 ( 162,100 ) Income tax receivable 87,800 108,800 Accounts payable ( 93,600 ) 175,400 Accrued expenses ( 158,600 ) 39,700 Contract liabilities 20,700 ( 114,000 ) Lease liabilities ( 250,700 ) ( 203,000 ) Net cash used in operating activities ( 3,304,600 ) ( 4,821,600 ) Investing activities: Purchase of investment securities ( 519,100 ) ( 987,000 ) Redemption of investment securities 3,025,000 4,505,400 Capital expenditures ( 76,000 ) ( 117,900 ) Net cash provided by investing activities 2,429,900 3,400,500 Financing activities: Proceeds from issuance of common stock 716,800 - Issuance costs of common stock and warrants ( 71,100 ) - Overdraft - 13,300 Net cash provided by financing activities 645,700 13,300 Effect of changes in foreign currency exchange rates on cash and cash equivalents ( 3,600 ) ( 3,900 ) Net decrease in cash and cash equivalents ( 232,600 ) ( 1,411,700 ) Cash and cash equivalents, beginning of period 796,100 1,927,100 Cash and cash equivalents, end of period $ 563,500 $ 515,400 See notes to unaudited condensed consolidated financial statements 6 Table of Contents SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of the Business and Basis of Presentation Scientific Industries, Inc. and its subsidiaries (the “Company”) design, manufacture, and market a variety of benchtop laboratory equipment and bioprocessing products. The Company is headquartered in Bohemia, New York where it produces benchtop laboratory and pharmacy equipment. Additionally, the Company has a location in Baesweiller, Germany, where it designs and produces a variety of bioprocessing products, and administrative facilities in Orangeburg, New York and Pittsburgh, Pennsylvania related to sales and marketing. 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 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. 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-K for the fiscal year ended December 31, 2023. 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. 2. Significant Accounting Policies Principles of Consolidation 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 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. 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”) which contemplate continuation of the Company as a going concern. 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. 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. 7 Table of Contents 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 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. 3. Fair Value of Financial Instruments The Company follows ASC - Accounting Standards Codification (“ASC 820”), Fair Value Measurement, which has defined the fair value of financial instruments as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements do not include transaction costs. The accounting guidance also expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are described below: Level 1 Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3 Prices or valuation that require inputs that are both significant to the fair value measurement and unobservable. In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculated the fair value of its Level 1 and 2 instruments based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and its counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period. 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 Level 1 Level 2 Level 3 Total Investment securities - Mutual funds $ 2,464,300 $ - $ - $ 2,464,300 Total $ 2,464,300 $ - $ - $ 2,464,300 Fair Value Measurements as of December 31, 2023 Level 1 Level 2 Level 3 Total Investment securities - Mutual funds $ 4,928,700 $ - $ - $ 4,928,700 Total $ 4,928,700 $ - $ - $ 4,928,700 8 Table of Contents 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: Cost Fair Value Unrealized Holding Gain Mutual funds $ 2,420,100 $ 2,464,300 $ 44,200 Total $ 2,420,100 2,464,300 $ 44,200 As of December 31, 2023: Cost Fair Value Unrealized Holding (Loss) Mutual funds $ 4,929,300 $ 4,928,700 $ ( 600 ) Total $ 4,929,300 $ 4,928,700 $ ( 600 ) 4. Inventories As of September 30, As of December 31, 2024 2023 Raw materials $ 3,369,500 $ 3,436,300 Work-in-process 61,000 23,200 Finished goods 1,954,900 2,033,400 Total Inventories $ 5,385,400 $ 5,492,900 Inventories - Current Asset $ 4,788,300 $ 4,883,900 Inventories - Noncurrent Asset 597,100 609,000 5. Goodwill and Finite Lived Intangible Assets Goodwill amounted to $ 115,300 as of September 30, 2024 and December 31, 2023. 9 Table of Contents Finite lived intangible assets consist of the following: As of September 30, 2024: Useful Lives Cost Accumulated Amortization Net Technology, trademarks 3 - 10 yrs. $ 1,216,800 $ 982,800 $ 234,000 Trade names 3 - 6 yrs. 592,300 398,400 193,900 Websites 3 - 7 yrs. 210,000 210,000 - Customer relationships 4 - 10 yrs. 372,200 214,300 157,900 Sublicense agreements 10 yrs. 294,000 294,000 - Non-compete agreements 4 - 5 yrs. 1,060,500 944,300 116,200 Patents 5 - 7 yrs. 605,600 428,600 177,000 $ 4,351,400 $ 3,472,400 $ 879,000 As of December 31, 2023 Useful Lives Cost Accumulated Amortization Net Technology, trademarks 3 - 10 yrs. $ 1,216,800 $ 870,900 $ 345,900 Trade names 3 - 6 yrs. 592,300 341,600 250,700 Websites 3 - 7 yrs. 210,000 210,000 - Customer relationships 4 - 10 yrs. 372,200 193,600 178,600 Sublicense agreements 10 yrs. 294,000 294,000 - Non-compete agreements 4 - 5 yrs. 1,060,500 797,600 262,900 Patents 5 - 7 yrs. 595,800 384,000 211,800 $ 4,341,600 $ 3,091,700 $ 1,249,900 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 Amount Remainder of fiscal year ending 2024 $ 130,100 2025 373,500 2026 195,900 2027 94,500 2028 43,700 Thereafter 41,300 Total $ 879,000 6. Commitment and Contingencies Legal Matters 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. Litigation and contingency accruals are based on our assessment, including advice of legal counsel, regarding the expected outcome of litigation or other dispute resolution proceedings. If the Company determines that an unfavorable outcome is probable and can be reasonably assessed, it establishes the necessary accruals. 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. 10 Table of Contents Leases 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: Amount Remainder of fiscal year ending 2024 $ 94,600 2025 361,300 2026 266,600 2027 274,600 2028 201,000 Total future minimum payments $ 1,198,100 Less: Imputed interest ( 109,100 ) Total Present Value of Operating Lease Liabilities $ 1,089,000 7. Stockholders’ Equity 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 purchasers of Units (“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 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 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. 11 Table of Contents 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 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”) 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. 8. Loss Per Common Share The Company presents the computation of earnings per share (“EPS”) on a basic basis. Basic EPS is computed by dividing net income or loss by the weighted average number of shares outstanding during the reported period. Diluted EPS is computed similarly to basic EPS, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential additional common shares that were dilutive had been issued. Common shares are excluded from the calculation if they are determined to be anti-dilutive. The following table sets forth the weighted average number of common shares outstanding for each period presented. For the three months ended For the nine months ended September 30, September 30, 2024 2023 2024 2023 Weighted average number of common shares outstanding 10,503,599 7,003,599 10,443,029 7,003,599 Effect of dilutive securities: - - - - Weighted average number of dilutive common shares outstanding 10,503,599 7,003,599 10,443,029 7,003,599 Basic and diluted loss per common share: Continuing operations $ ( 0.11 ) $ ( 0.31 ) $ ( 0.43 ) $ 0.98 ) Discontinued operations - - - - Consolidated operations $ ( 0.11 ) $ ( 0.31 ) $ ( 0.43 ) $ ( 0.98 ) 12 Table of Contents 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. 9. Related Parties Consulting Agreements 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. 10. Segment Information and Concentration The Company views its operations as two operating segments: the manufacture and marketing of standard benchtop laboratory equipment for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and laboratory and pharmacy balances and scales (“Benchtop Laboratory Equipment Operations”), and the manufacture, design, and marketing of bioprocessing systems and products (“Bioprocessing Systems”). The Company also has included a non-operating corporate segment. All inter-segment revenues are eliminated. Segment information is reported as follows. Three Months Ended September 30, 2024: Benchtop Laboratory Equipment Bioprocessing Systems Corporate And Other Consolidated Revenues $ 2,316,600 $ 452,500 $ - $ 2,769,100 Foreign Sales 562,000 241,900 803,900 Income (Loss) From Operations 258,700 ( 1,200,000 ) ( 317,300 ) ( 1,258,600 ) Assets 6,114,600 4,697,900 2,464,300 13,306,800 Long-Lived Asset Expenditures 2,900 900 - 3,800 Depreciation and Amortization 21,900 166,200 - 188,100 13 Table of Contents Three Months Ended September 30, 2023: Benchtop Laboratory Equipment Bioprocessing Systems Corporate And Other Consolidated Revenues $ 2,161,300 $ 424,200 $ - $ 2,585,500 Foreign Sales 625,000 242,900 867,900 Income (Loss) From Operations 73,600 ( 2,105,500 ) ( 193,500 ) ( 2,225,400 ) Assets 7,137,200 5,101,300 809,600 13,048,100 Long-Lived Asset Expenditures - 11,700 - 11,700 Depreciation and Amortization 20,700 167,500 - 188,200 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 Bioprocessing Systems Corporate And Other Consolidated Revenues $ 6,765,900 $ 1,134,000 $ - $ 7,899,900 Foreign Sales 1,779,100 648,100 2,427,200 Income (Loss) From Operations 546,000 ( 4,094,700 ) ( 1,135,600 ) ( 4,684,300 ) Assets 6,144,600 4,697,900 2,464,300 13,306,800 Long-Lived Asset Expenditures 72,800 3,200 - 76,000 Depreciation and Amortization 64,700 500,700 - 565,400 Nine Months Ended September 30, 2023: Benchtop Laboratory Equipment Bioprocessing Systems Corporate And Other Consolidated Revenues $ 7,357,800 $ 1,015,600 $ - $ 8,373,400 Foreign Sales 2,204,800 478,700 2,683,500 Income (Loss) From Operations 555,200 ( 5,972,600 ) ( 1,501,800 ) ( 6,919,200 ) Assets 7,137,200 5,101,300 809,600 13,048,100 Long-Lived Asset Expenditures 25,200 92,700 - 117,900 Depreciation and Amortization 64,400 502,300 - 566,700 14 Table of Contents 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 Bioprocessing Systems Corporate Consolidated Income (Loss) from Operations $ 258,700 $ ( 1,200,000 ) $ ( 317,300 ) $ ( 1,258,600 ) Other income, net 2,100 11,400 24,900 38,400 Interest income - 40,100 40,100 Total other income, net 2,100 11,400 65,000 78,500 Income (Loss) from operations before discontinued operations and income taxes $ 260,800 $ ( 1,188,600 ) $ ( 252,300 ) $ ( 1,180,100 ) For the three months ended September 30, 2023 Benchtop Laboratory Equipment Bioprocessing Systems Corporate Consolidated Income (Loss) from Operations $ 73,600 $ ( 2,105,500 ) $ ( 193,500 ) $ ( 2,225,400 ) Other income (expense), net 5,300 ( 1,800 ) 1,800 5,300 Interest income - - 19,000 19,000 Total other income (expense), net 5,300 ( 1,800 ) 20,800 24,300 Income (Loss) from operations before discontinued operations and income taxes $ 78,900 $ ( 2,107,300 ) $ ( 172,700 ) $ ( 2,201,100 ) For the nine months ended September 30, 2024 Benchtop Laboratory Equipment Bioprocessing Systems Corporate Consolidated Income (Loss) from Operations $ 546,000 $ ( 4,094,700 ) $ ( 1,135,600 ) $ ( 4,684,300 ) Other income (expense), net ( 5,100 ) 22,500 14,700 32,100 Interest income - - 136,900 136,900 Total other income (expense), net ( 5,100 ) 22,500 151,600 169,000 Income (Loss) from operations before discontinued operations and income taxes $ 540,900 $ ( 4,072,200 ) $ ( 984,000 ) $ ( 4,515,300 ) For the nine months ended September 30, 2023 Benchtop Laboratory Equipment Bioprocessing Systems Corporate Consolidated Income (Loss) from Operations $ 555,200 $ ( 5,972,600 ) $ ( 1,501,800 ) $ ( 6,919,200 ) Other income, net 7,700 9,300 78,700 95,700 Interest income - - 65,400 65,400 Total other income, net 7,700 9,300 144,100 161,100 Income (Loss) from operations before discontinued operations and income taxes $ 562,900 $ ( 5,963,300 ) $ ( 1,357,700 ) $ ( 6,758,100 ) 15 Table of Contents