SCIENTIFIC INDUSTRIES INC 10-K

Item 1. Business. General . Incorporated in 1954, Scientific Industries, Inc., a Delaware corporation (“SI” and along with its subsidiaries, the “Company”), is engaged in the design, manufacture, and marketing of standard benchtop laboratory equipment (“Benchtop Laboratory Equipment”), and through its wholly-owned subsidiary, Scientific Bioprocessing Holdings, Inc., a Delaware corporation (“SBHI”), the design, manufacture, and marketing of bioprocessing systems and products (“Bioprocessing Systems”). SBHI has two wholly-owned subsidiaries – Scientific Bioprocessing, Inc., a Delaware corporation (“SBI”), and aquila biolabs GmbH, a German corporation (“Aquila”). The Company’s products are used primarily for research purposes by universities, pharmaceutical companies, pharmacies, national laboratories, medical device manufacturers, and other industries performing laboratory-scale research. On August 7, 2025, the Company sold its Genie product line which was part of the Benchtop Laboratory Equipment operations but continues to market and produce scales and pill counters in the Benchtop Laboratory Equipment operating segment. Operating Segments . The Company views its operations as two segments: the manufacture of standard benchtop laboratory equipment and weighing instruments which includes various types of equipment used for research and sample preparation in university, pharmacy and industrial laboratories, and weight and measurement products including pill counters and digital scales sold through distribution and online; and the design, development, manufacture and marketing of bioprocessing products, principally products incorporating smart sensors and state of the art software analytics, sold primarily on a direct basis through the Company’s internal sales force. Products . Benchtop Laboratory Equipment . The Company’s Benchtop Laboratory Equipment products consist of pharmacy and laboratory balances and scales, force gauges, automated pill counters and moisture analyzers sold through the “Torbal®” division with trademark “Torbal” or “VIVID®”. On August 7, 2025, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company sold substantially all of the assets of the Genie Division of the Company’s Benchtop Laboratory Equipment Operations located in Bohemia, New York to Troemner, LLC (the “Buyer”). Such assets consisted primarily of inventory, fixed assets, and intangible assets. The purchase price was $9,600,000 minus certain working capital adjustments plus an earn-out of up to an aggregate of $1,500,000, of which $1,140,000 is guaranteed if the Seller performs certain obligations under a separate Manufacturing and Supply Agreement (“MSA”) and a separate Transition services agreements (“TSA”), under which the Company agreed to produce and supply products to the Buyer for a period of up to total of twelve months, plus transition services which include training and transfer of knowhow by the Company to the Buyer. The amounts earned by the Company under the earn-out provision of the MSA are recorded as earned based on the contractual services performed and are recorded as a reduction of its operating expenses. As of December 31, 2025 $300,000 has been earned and recorded under the MSA agreement. 3 Table of Contents Bioprocessing Systems . SBHI, through its two wholly-owned subsidiaries, SBI and Aquila, is engaged in the design, development, manufacture and marketing of bioprocessing products, principally products incorporating smart sensors and state of the art software analytics. Products include the Cell Growth Quantifier (“CGQ”) for biomass monitoring in shake flasks, the Liquid Injection System (“LIS”) for automated feeding in shake flasks, and a line of coaster systems and flow-through cells for pH and DO monitoring and analytical software, and the Multi-Parameter Sensor (“MPS”) and Dissolved Oxygen sensor pills which are marketed and are sold under the Bioprocessing Systems DOTS brand platform. Product Development. The Company designs and develops substantially all of its products in-house. Company personnel formulate plans and concepts for new products and improvements or modifications of existing products. The Company engages outside consultants to augment its internal engineering capabilities in areas such as industrial and electronics design. The Company is investing significantly in the product development of its Bioprocessing Systems Operations with a view to generating meaningful revenues from its Bioprocessing Systems Operations in the future. To a lesser extent, the Company invested in the development of its VIVID® product line of the Benchtop Laboratory Equipment Operations’ Torbal division, and as a result introduced a major new product in February 2025. The Company expects to continue to invest in the VIVID® product line which the Company deems to have sales growth potential. Major Customers . Sales to one customer, principally of the VIVID® Pill counter, represented 31% and 23% of the Company’s consolidated net revenues for the years ended December 31, 2025 and 2024, respectively. This top customer also represented 42% and 36% of Benchtop Laboratory Equipment product sales, for the years ended December 31, 2025 and 2024, respectively. Major Vendors . Purchases from one vendor, represented in the aggregate 15.2% and 15.0% of consolidated net purchases for the years ended December 31, 2025 and 2024, respectively. Marketing . Benchtop Laboratory Equipment. The Company’s “Torbal®” brand weighing products are primarily marketed and sold online, and primarily on a direct basis, and distributors. The Company’s VIVID® brand, automated pill counters are sold through two exclusive distributors in North America. The Company markets its products through online and trade publication advertising, brochures and catalogs, the Company’s websites, and attendance at industry trade shows through its authorized distributors. 4 Table of Contents Bioprocessing Systems. The Company’s Bioprocessing Systems products are marketed through a direct sales force consisting of four sales professionals and four application scientists in the US and Germany, plus a network of 11 distributors that are managed by a distribution manager. Sales are supported via marketing through websites, content creation, application notes, mailings, trade shows, online marketing campaigns, and membership in various public/private research partnerships. The Company invests heavily in the sales and marketing of its Bioprocessing Systems Operations in an effort to attract new customers and sales opportunities for products recently launched and market research for future products. Assembly and Production . The Company has facilities in Bohemia, New York and Pearl River, New York where it conducts the Benchtop Laboratory Equipment operations. The Company also has a shared-office facility in Pittsburgh, Pennsylvania and its primary operating facility in Baesweiller, Germany, where it conducts the Bioprocessing Systems operations. The Company’s production operations principally involve assembly of components supplied by various domestic and international independent suppliers. Patents, Trademarks and Licenses . The Company holds a patent relating to Torbal’s VIVID® automated pill counter which expires in March 2039. The Company’s Bioprocessing Systems operations’ Aquila subsidiary holds three US patents relating to bioprocessing which expire in May 2036, February 2038 and March 2038, respectively. In addition, Aquila holds several European and German patents and Patent Cooperation Treaty (the “PCT”) patents, and has several other patent applications pending in the United States, Europe, and under the PCT. The Company does not anticipate any material adverse effect on sales of its patented products following the expiration on any of its patents resulting in the loss of patent protection. The Company has various proprietary trademarks, including aquila biolabs (in Germany), Torbal ®, and VIVID® , each of which it considers important to the success of the related product. No representation can be made that any application will be granted or as to the protection that any existing or future trademark registration may provide. Foreign Sales . The Company’s sales to overseas customers, principally in Asia and Europe, accounted for approximately 17% and 23% of the Company’s net revenue for the years ended December 31, 2025 and 2024, respectively. Payments were primarily in United States dollars and were therefore not subject to risks of currency fluctuation. Seasonality . The Company does not consider its business to be materially seasonal. Backlog . The Company does not have a material backlog of orders due to the fact that most products are produced and shipped within one to two weeks. Competition . Most of the Company’s principal competitors are substantially larger and have greater financial, production and marketing resources than the Company. Competition is generally based upon technical specifications, price, and product recognition and acceptance. 5 Table of Contents The Company’s main competitors for its Torbal® brand products are Ohaus Corporation, an American company, A&D Company Ltd., a Japanese company, Adam Equipment Co., Ltd., a British company, Illinois Tool Works, an American company, and Capsa Healthcare, an American company, and Medility Inc., a Korean company, for its VIVID® brand automated pill counters. Direct competitors for the Company’s Bioprocessing Systems products are ABER Instruments (United Kingdom) and PreSens GmbH (Germany. Indirect (systemic alternatives) competitors include Hamilton Bonaduz AG (Switzerland) and optek-Danulat GmbH (Germany) as well as total solution providers like Sartorius AG (Germany) or Eppendorf SE (Germany). Research and Development . The Company incurred research and development expenses, the majority of which related to its Bioprocessing Systems operations, of $2,487,700 and $2,897,900 for the years ended December 31, 2025 and 2024, respectively. The Company expects that research and development expenditures in the fiscal year ending December 31, 2026 will continue to be material reflecting continued product development efforts for the Bioprocessing Systems operations. Government and Environmental Regulation . The Company’s products and claims with respect thereto have not required approval of the Food and Drug Administration or any other governmental authority. The Company’s manufacturing operations, like those of the industry in general, are subject to numerous existing and proposed, if adopted, federal, state, and local regulations to protect the environment and to establish occupational safety and health standards as well as certain other matters. The Company believes that its operations are in compliance with existing laws and regulations and the cost to comply is not significant to the Company. Employees . As of March 31, 2026, the Company employed 55 persons (21 for the Benchtop Laboratory Equipment operations, and 34 for the Bioprocessing Systems operations, of whom 30 were located in Europe) of whom 54 were full-time, including its executive officers. The Company augments its internal staff with outside consultants as deemed necessary. None of the Company’s employees are represented by any union. Available Information . The Company’s reports, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with, or furnished to, the Securities and Exchange Commission (the “SEC” or the “Commission”), including amendments to such reports, are available on the SEC’s website that contains such reports, proxy and information statements, and other information regarding companies that file electronically with the Commission. This information is available at www.sec.gov. In addition, all the Company’s public filings can be accessed through the Company’s website athttps://www.scientificindustries.com/pages/sec-filings .