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Item 1. Financial Statements

2026-05-15 compared with 2025-11-19 · 161 added, 255 removed, 238 unchanged (64% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

As of March 31,

As of December 31,

Current assets:

1 unchanged sentence

Investment securities

Trade accounts receivable, less allowance for doubtful accounts of $ 15,600 at September 30, 2025 and December 31, 2024

Trade accounts receivable, less allowance for doubtful accounts of $ 8,300 at March 31, 2026 and December 31, 2025

Income tax receivable

5 unchanged sentences

Operating lease right-of-use assets

Noncurrent Assets of Discontinued Operations

LIABILITIES AND SHAREHOLDERS’ EQUITY

4 unchanged sentences

Lease liabilities, current portion

Liabilities of discontinued operations

Current liabilities of discontinued operations

Total current liabilities

4 unchanged sentences

30,000,000 shares authorized;

11,928,599 , shares issued and outstanding at September 30, 2025 and 10,503,599 shares issued and outstanding at December 31, 2024

11,928,599 shares issued and outstanding at March 31, 2026 and December 31, 2025

Additional paid-in capital

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive income (loss)

Accumulated deficit

6 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months

Ended March 31,

Cost of revenues

3 unchanged sentences

Total operating expenses

Loss from continuing operations

( 1,522,300 )

( 1,565,800 )

Loss from operations

( 1,667,700 )

1 unchanged sentence

Other income:

Other income, net

Gain on disposition of Genie Product Line (See Note 11)

Other income (expense), net

Interest income

Total other income, net

Income (loss) from continuing operations before income tax expense

Loss from continuing operations before income tax expense

( 1,589,300 )

1 unchanged sentence

Income tax expense

Income (loss) from continuing operations

Total income tax expense

Loss from continuing operations

( 1,589,300 )

( 2,057,100 )

Income from discontinued operations (see Note 11), net of tax

Net Income (loss)

Discontinued Operations:

Income from discontinued operations, net of tax

$ ( 1,589,300 )

$ ( 1,778,500 )

Comprehensive income:

Other comprehensive gain (loss):

Foreign currency translation gain (loss)

Comprehensive income (loss)

Total comprehensive income (loss)

Other comprehensive gain (loss)

Total comprehensive loss

$ ( 1,663,800 )

$ ( 1,654,100 )

Income (loss) per share – basic and diluted

Income (loss) from continuing operations

Income from discontinued operations

Basic and Diluted income (loss) per common share:

Continuing operations

Discontinued operations

Consolidated operations

Weighted Average Shares Outstanding

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

Comprehensive

Treasury Stock

Shareholders’

Income (Loss)

3 unchanged sentences

( 1,589,300 )

( 1,778,500 )

Foreign currency translation adjustment

2 unchanged sentences

$ ( 36,740,200 )

( 1,523,700 )

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

Foreign currency translation adjustment

Stock-based compensation

Balance June 30, 2025

$ ( 37,232,700 )

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

Foreign currency translation adjustment

Stock-based compensation

Balance September 30, 2025

$ ( 33,238,300 )

Comprehensive

Treasury Stock

Shareholders’

Income (Loss)

2 unchanged sentences

$ ( 33,930,500 )

( 2,051,600 )

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

Fair value modification of warrants recorded as stock issuance costs

Foreign currency translation adjustment

Stock-based compensation

Balance March 31, 2024

$ ( 29,536,700 )

( 1,283,600 )

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

Fair value modification of warrants recorded as stock issuance costs

Foreign currency translation adjustment

Stock-based compensation

Balance June 30, 2024

$ ( 30,820,300 )

Loss from continuing operations

( 2,057,100 )

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

Fair value modification of warrants recorded as stock issuance costs

Income from discontinued operations

Foreign currency translation adjustment

Stock-based compensation

Balance September 30, 2024

Balance March 31, 2025

$ ( 35,709,000 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Operating activities:

Net income (loss)

$ ( 1,589,300 )

Less income from discontinued operations, net of tax

Net income (loss) from continuing operations

$ ( 1,778,500 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Gain on sale of Genie Product Line

Income from discontinued operations, net of tax

Loss from continuing operations

$ ( 1,589,300 )

$ ( 2,057,100 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Stock-based compensation

Provision for bad debt

Loss (gain) on sale of investment securities

Unrealized holding gain on investment securities

Gain on sale of investment securities

Unrealized holding loss (gain) on investment securities

Noncash lease expense

2 unchanged sentences

Prepaid and other current assets

Income tax receivable

Accounts payable

Contract liabilities

Accrued expenses

Lease liabilities

Net cash (used in) continuing operations

( 4,390,700 )

Net cash used in operating activities

( 1,522,200 )

Investing activities:

Purchase of investment securities

( 7,223,200 )

Purchases of investment securities

Redemption of investment securities

Proceeds from gain on sale of Genie Product Line

Capital expenditures

Net cash provided by investing activities

Financing activities:

Proceeds from issuance of common stock

Issuance costs of common stock and warrants

Net Cash provided by financing activities

Discontinued Operations:

Net cash provided by operating activities of discontinued operations

Net provided by discontinued operations

Net change in cash

Net cash provided by discontinued operations

Net change in cash and cash equivalents

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

Cash from continuing operations, beginning of period

Cash from discontinued operations beginning of period

Less cash from discontinued operations end of period

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

5 unchanged sentences

Scientific Industries, Inc.

and its subsidiaries (the “Company”) design, manufacture, and market a variety of benchtop laboratory equipment and bioprocessing products.

and its subsidiaries (the “Company”) design, manufacture, and market a variety of benchtop laboratory equipment, weight and measurement and bioprocessing systems and 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 Pearl River, New York and Pittsburgh, Pennsylvania related to sales and marketing.

The products, which are sold to customers worldwide, include pharmacy balances and scales, force gauges, bioprocessing sensors and analytical tools and through August 7, 2025 mixers, shakers, stirrers and refrigerated incubators (please refer to Note 11 for further discussion).

The products, which are sold to customers worldwide, include laboratory and pharmacy balances and scales, force gauges, bioprocessing sensors and analytical tools.

The accompanying (a) unaudited condensed balance sheet as of December 31, 2025, 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.

Accordingly, certain information and notes required by accounting principles generally accepted in the United States (“U.S.

GAAP”) 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, 2025.

The results for the three and nine months ended September 30, 2025, are not necessarily an indication of the results for the full fiscal year ending December 31, 2025.

The results for the three months ended March 31, 2026, are not necessarily an indication of the results for the full fiscal year ending December 31, 2026.

Significant Accounting Policies

Principles of Consolidation

In the opinion of our management, the unaudited Condensed Consolidated Financial Statements have been prepared on a basis consistent with the audited Consolidated Financial Statements and include all adjustments necessary for the fair presentation of the Company’s financial condition, results of operations and cash flows for the interim periods presented.

Such adjustments are of a normal, recurring nature.

The results of operations and cash flows for the interim periods presented may not necessarily be indicative of full-year results.

Reference should be made to the Consolidated Financial Statements contained in our 2025 Form 10-K.

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”).

(“SBI”), a Delaware corporation, and aquila biolabs GmbH (“Aquila”), a German corporation (all collectively referred to as the “Company”).

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

In accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations, the Company has classified the Genie Division of Scientific Industries, Inc.

as discontinued operations.

The results of discontinued operations are presented separately in the unaudited condensed consolidated statements of operations and comprehensive income (loss) for all periods presented, and the assets and liabilities of the Genie Division have been reflected as assets and liabilities of discontinued operations in the accompanying unaudited condensed consolidated balance sheets for all periods presented.

Liquidity and Going Concern Considerations

Historically at the end of each reporting period, the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the Consolidated Financial Statements were issued.

Since the fiscal year ended June 30, 2020 the Company has recorded recuring losses from operations and continued cash outflow from operating activities as a result of its strategic focus on the Bioprocessing Systems Operations, which is still in its start-up stage.

Historically the Company has relied on equity financings.

For the nine months ended September 30, 2025, in addition to equity financings, the Company generated positive cash flows as a result of the sale of the Genie Product line which occurred in August 2025.

Please refer to Note 11 for further details.

The Company reflected an accumulated deficit of $ 33,238,300 as of September 30, 2025 and continues to generate negative cash flows from its operations and expects to continue to generate negative cash flows from operations in the foreseeable future, however the Company expects that with the cash generated from the recent division sale plus other incoming cash related to the various post sale agreements is sufficient for at least one year from the date of issuance of the consolidated financial statements for the nine months ended September 30, 2025.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from this uncertainty.

Accordingly, Unaudited Condensed Consolidated Financial Statements have been prepared on the basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and the commitments in the ordinary course of business.

Based on management’s current operating plan, the Company believes its cash on hand, including its investments, are sufficient to fund the Company's operations for a period of at least one year subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements.

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the Unaudited Condensed Consolidated Financial Statements are issued.

The Company has recorded recurring losses from operations and continued cash outflow from operating activities as a result of its strategic focus on the Bioprocessing Systems Operations, which is still in its start-up stage.

Historically the Company has relied on equity financings to support its business operations.

For the three months ended March 31, 2026, the Company generated negative cash flows from operations of $ 993,500 .

The Company has an accumulated deficit of $ 36,740,200 as of March 31, 2026, and expects to continue to generate negative cash flows from operations in the foreseeable future.

However, based on management’s current operating plan, the Company expects that the cash generated from the Laboratory Equipment Operations’ Genie Division sale during fiscal 2025 (refer to Note 10), plus other incoming cash related to the various post Genie Division-sale agreements and escrow account, is sufficient to support business operations for at least one year from the date of issuance of the Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2026.

However, there is no assurance that management’s current operating plan will be successful.

New Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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.

For public companies, the amendments in this update are effective for annual periods beginning after December 12, 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 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40):

Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU No.

2025-01 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date, which clarified the effective date of ASU 2024-04.

The ASU requires, among other things, more detailed disclosures about the type of expenses in commonly presented expense captions such as cost of sales and selling, general and administrative expenses and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization.

ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses.

The guidance, clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027, on a prospective or retrospective basis.

Early adoption is permitted.

We are currently evaluating the impact of adopting this ASU on our disclosures.

Reclassifications

Certain amounts from prior periods have been reclassified to conform with the current period presentation

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Financial Instruments - Credit Losses (Topic 326):

Measurements of Credit Losses for Accounts Receivable and Contract Assets”, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC 606”), “Revenue from Contracts with Customers”.

Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient.

An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated.

ASU 2025-05 became effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company implemented this pronouncement beginning January 1, 2026, which had no material impact on the Company’s Unaudited Condensed Consolidated Financial Statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270)”, which is intended to improve the navigability of the guidance in ASC 270, “Interim Reporting”, and clarify when it applies.

Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with U.S.

GAAP so that internal financials are not misleading.

ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company is currently evaluating ASU 2025-11 to determine the impact it may have on its consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update (“ASU”) No.

2024-03, Disaggregation of Income Statement Expenses , which requires disclosures of certain additional expense information on an annual and interim basis, including, among other items, the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each income statement expense caption, as applicable.

The updated standard is effective for our annual periods beginning in fiscal year 2026 and interim periods beginning in the first quarter of fiscal year 2027.

The Company is currently evaluating the impact of this guidance but does not anticipate a material impact on its condensed consolidated financial statements or related disclosures.

There are no other recent accounting pronouncements issued but not yet adopted that would have a material effect on our condensed consolidated financial statements.

Use of Estimates

The prepared of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures in the accompanying notes.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Fair Value of Financial Instruments

11 unchanged sentences

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, 2025, and December 31, 2024, according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurement as of September 30, 2025

Investment securities - mutual funds

For Level 3 investments, where observable inputs are not available, the fair value was determined based on the price at which shares were purchased and redeemed as of March 31, 2026, by the funds.

The investments which seek high current income, comprising of private credit funds which deal in first lien senior secured debt and asset-based lending in the United States that are issued in private offerings.

The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the three month period ended March 31, 2026.

The carrying amounts of cash, cash equivalents, accounts receivable, and accounts payable approximate their fair value due to their short-term maturity and insignificant risk of value changes.

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, 2026, and December 31, 2025, according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurement as of March 31, 2026

Investment securities:

Private Credit Funds

Fair Value Measurement as of December 31, 2025

Investment securities - mutual funds

Investments in marketable securities by security type as of September 30, 2025, and December 31, 2024, consisted of the following:

As of September 30, 2025:

Investment securities

Private Credit Funds

Investments in marketable securities by security type as of March 31, 2026, and December 31, 2025, consisted of the following:

As of March 31, 2026:

Private Credit Funds

As of December 31, 2025:

September 30,

Private Credit Funds

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended March 31, 2026 and December 31, 2025.

Balance of recurring Level 3 assets at beginning of period

Total gains or losses for the period:

Transfers into Level 3

Transfers out of Level 3

Balance of recurring Level 3 assets at end of period

Inventories of the Company are as follows:

March 31, 2026

December 31, 2025

Raw materials

6 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with the Company’s acquisitions.

Goodwill amounted to $ 115,300 as of September 30, 2025, and December 31, 2024, all of which is expected to be deductible for tax purposes.

Goodwill amounted to $ 115,300 as of March 31, 2026, and December 31, 2025, all of which is expected to be deductible for tax purposes.

Finite lived intangible assets are as follows:

As of September 30, 2025

As of March 31, 2026

Technology, trademarks

7 unchanged sentences

Non-compete agreements

Total amortization expense was $ 75,200 and $ 127,000 for the three months ended September 30, 2025, and September 30, 2024, respectively.

Total amortization expense was $ 296,700 and $ 385,600 for the nine months ended September 30, 2025, and September 30, 2024, respectively.

Estimated future fiscal year amortization expense of intangible assets as of September 30, 2025, is as follows:

As of September 30, 2025

Total amortization expense was $ 11,500 and $ 126,000 for the three months ended March 31, 2026, and March 31, 2025, respectively.

Estimated future fiscal year amortization expense of intangible assets as of March 31, 2026, is as follows:

As of March 31, 2026

Remainder of year ending 2026

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 September 30, 2025 and December 31, 2024, 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, 2025, were as follows:

As of September 30, 2025:

As of March 31, 2026 and December 31, 2025, 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, 2026, were as follows:

As of March 31, 2026:

Remainder of fiscal year ending 2026

2 unchanged sentences

Total Present Value of Operating Lease Liabilities

Stockholders’ Equity

Shareholders’ Equity

Issuance of Common Stock and Warrants

On August 18, 2025, certain investors exercised warrants that were granted under the April 18, 2025 private placement described in the next paragraph for an aggregate of $ 500,000 , resulting in the issuance of (i) 375,000 shares of the Company’s common stock, par value $ 0.05 per share (“Common Stock”) and (ii) pre-funded warrants to purchase 125,000 shares of Common Stock.

On April 18, 2025, the Company entered into a Securities Purchase Agreement (the “April Purchase Agreement”) with certain investors (each an “April Investor” and collectively, the “April Investors”) pursuant to which the Company sold in a private placement, and the Investors purchased, an aggregate of 1,550,000 Units, comprising (i) 1,050,000 shares of the Company’s Common Stock, (ii) pre-funded warrants to purchase 500,000 shares of Common Stock and (iii) warrants to purchase 1,550,000 shares of Common Stock, for a total consideration of $ 1,550,000 .

The Company recognized $ 97,800 of issuance cost, which was attributable to legal and placement agent fees.

On January 17, 2024, the Company completed the last closing of its sale of securities pursuant to the Securities Purchase Agreement (the “2024 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 (“2024 Units”), comprising 358,388 shares of the Company’s Common Stock and warrants (“2024 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 2024 Warrants issued to the purchasers of 2024 Units (“2024 Investors”) .

As an incentive to certain 2024 Investors of the Company who participated in previous private placements and received as part of those financings, warrants (“Outstanding Warrants”) to purchase shares of Common Stock, the Company agreed that if any such 2024 Investor were to purchase 2024 Units at a certain level in the 2024 Offering, the Company would reduce the exercise price of the Outstanding Warrants held by such 2024 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 such 2024 Investor purchased Units under the 2024 Purchase Agreement.

Each such 2024 Investor purchasing Units at the requisite level received a new warrant (the “Replacement Warrants”) to replace such 2024 Investor’s Outstanding Warrants.

On January 17, 2024, as a result of their purchase of 2024 Units, 2024 Investors became entitled to receive Replacement Warrants to replace 333,884 Outstanding Warrants with 333,884 Replacement Warrants having a reduced exercise price of $2.50 per share and exercisable until the fifth anniversary of the relevant closing under the 2024 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 Common Stock of the Company (the “waiver program 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 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 replacement stock 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 a $ 613,400 stock compensation expense over the three-year vesting period, which compensation expense was determined by reference to 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 , and were 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, to each of Christopher Cox, John Nicols, and Jurgen Schumacher, as part of their annual compensation for serving as independent directors of the Board.

The stock options have a 10 -year life, an exercise price of $ 1.29 , were 100% vested one year after the grant date, and were 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, to each of Michael Blechman, Christopher Cox, and John Nicols, as part of their annual compensation serving as independent Committee Chairmen of the Company’s Board Committees.

The stock options have a 10 -year life, an exercise price of $ 1.29 , will be 100% vested one year after the grant date, and were valued at $ 5,200 on the grant date using the Black-Scholes-Merton option pricing model.

The Company’s 2022 Equity Incentive Plan (“2022 Plan”) provides for the issuance of up to 3,750,000 shares of the Company’s Common Stock, par value $ 0.05 per share, plus outstanding options granted under the 2022 Plan that expire or are forfeited.

Incentive stock options may be granted to employees at an exercise price equal to 100% (or 110% if the optionee owns directly or indirectly more than 10% of the outstanding voting stock) of the fair market value of the shares of Common Stock on the date of the grant.

Nonstatutory stock options shall be granted at the fair market value of the shares of Common Stock on the date of grant.

As of March 31, 2026, 2,643,000 shares of Common Stock were available for grant of options under the 2022 Plan

Grants of Incentive and Nonstatutory Stock Options

On February 17, 2026, as part of the Company’s strategic initiatives to reduce operating costs and conserve cash for operations and annual management and Board compensation reviews, the Company granted an aggregate of 1,112,000 ten-year options at an exercise price of $ 0.60 of which 535,000 vest over a four year cliff schedule and 577,000 , the majority of which were granted in lieu of cash salary and fees foregone by executives and the Board of Directors, vest monthly over twelve months.

The options were valued at $ 556,000 on the grant date using the Black-Scholes-Merton option pricing model, recorded as stock-based compensation during the applicable period.

On July 1, 2025, the Company granted and issued stock options to purchase 15,000 shares of the Common Stock to each of Michael Blechman, Christopher Cox and John Nicols as well as 10,000 shares to Jurgen Schumacher, as part of their annual compensation serving as independent Board members of the Company.

These stock options have a 10 -year life, an exercise price of $ 0.65 , vest 100 % one year after the grant date, and valued at $ 9,750 for Blechman, Cox and Nicols and $ 6,500 for Schumacher on the grant date using the Black-Scholes-Merton option pricing model.

On May 13, 2025, in connection with the Company’s annual compensation reviews for its management and key employees, the Company granted an aggregate of 376,907 ten-year options at an exercise price of $ 1.00 of which vesting over a four year cliff schedule, valued at $ 237,500 on the grant date using the Black-Scholes-Merton option pricing model, recorded as stock-based compensation during the applicable period.

The following table summarizes the Company’s stock options activity after March 31, 2026:

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (In Years)

Outstanding at December 31, 2025

Outstanding at March 31, 2026

Stock compensation expense related to stock options of $ 116,300 and $ 302,600 was incurred for the three ended March 31, 2026 and 2025, respectively.

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.

Basic Earnings Per Share (“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.

In periods for which the Company reports a net loss, the Common Stock equivalents are not included, as they would 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,

For the three months ended March 31,

Weighted average number of common shares outstanding

Effect of dilutive securities:

Weighted average number of dilutive common shares outstanding

Weighted average number of common shares outstanding

Basic and Diluted loss per common share:

2 unchanged sentences

Consolidated operations

Approximately 2,236,919 and 9,161,660 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the EPS calculation because the effect would be anti-dilutive for the nine months ended September 30, 2025 because the exercise price of the options and warrants outstanding for both periods were below the current fair market value of the Company's common stock.

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 EPS calculation because the effect would be anti-dilutive for the nine months ended September 30, 2024

Approximately 3,353,144 and 8,111,660 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, 2026.

Approximately 1,831,447 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 the three months ended March 31, 2025.

No options and warrants were excluded from the calculation for Discontinued operations because the effect of such securities is anti-dilutive because they are out of the money.

Related Parties

Consulting Agreements

During the three months ended September 30, 2025, and September 30, 2024, respectively, the Company paid $ 24,000 and $ 24,000 , respectively, to Mr.

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

During the nine months ended September 30, 2025, and September 30, 2024, respectively, the Company paid $ 72,000 and $ 71,300 , respectively, to Mr.

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

The Company has consulting agreement with John Nicols, a Director of the Company since September 2023 for services provided to the Bioprocessing Systems segment.

Effective February 1, 2026 Mr.

Nicols agreed to reduce his monthly consulting fee by 50% to $4,000 per month for a twelve month period beginning February 1, 2026 .

During the three months ended March 31, 2026, and March 31, 2025, the Company paid $ 16,000 , of which $ 12,000 was fully paid and $ 4,000 resided in Accounts Payable, and $ 24,000 , respectively, to Mr.

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.

the manufacture and marketing of benchtop laboratory equipment including analytical 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 for expenses directly related to Corporate operations.

All inter-segment revenues are eliminated.

Three Months Ended September 30, 2025

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate and Other

Foreign Sales

(Loss) From Operations

( 1,121,400 )

( 1,522,300 )

Long-Lived Asset (Gain) Expenditures

Depreciation and Amortization

Three Months Ended September 30, 2024

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate and Other

Foreign Sales

(Loss) From Operations

( 1,200,000 )

( 1,565,800 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Segment information is reported as follows:

For the three months ending September 30, 2025, one customer accounted for approximately 10% or more of the Company’s total revenue.

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Benchtop Laboratory Equipment

5 unchanged sentences

( 1,667,700 )

( 5,434,700 )

Long-Lived Asset (Gain) Expenditures

Long-Lived Asset Expenditures

Depreciation and Amortization

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Benchtop Laboratory Equipment

5 unchanged sentences

( 2,089,500 )

( 5,685,800 )

Long-Lived Asset Expenditures

Depreciation and Amortization

Segment information is reported as follows.

For the nine months ending September 30, 2025, one customer accounted for approximately 10% or more of the Company’s total revenue.

A reconciliation of the Company’s consolidated segment (loss) from operations to consolidated income (loss) from operations before income taxes and net loss for the three and nine months ended September 30, 2025 and 2024, respectively are as follows:

Three Months Ended September 30, 2025

For the three months ending March 31, 2026, one customer accounted for approximately 12 % of the Company’s total revenue.

For the three months ending March 31, 2025, two customers accounted for approximately 10 % of the Company’s total revenue.

For the three months ending March 31, 2026, one vendor accounted for approximately 19 % of the Company’s total purchases.

For the three months ending March 31, 2025, one vendor accounted for approximately 15 % of the Company’s total purchases.

A reconciliation of the Company’s consolidated segment loss from operations to consolidated loss from operations before discontinued operations and income taxes for the three months ended March 31, 2026 and 2025, respectively are as follows:

Three Months Ended March 31, 2026

Benchtop Laboratory Equipment

1 unchanged sentence

Corporate and Other

(Loss) from Continuing Operations

Loss from Operations

$ ( 204,000 )

3 unchanged sentences

Other (expense) income, net

Gain on sale of Genie Product line

Interest income

Total other income, net

Income (Loss) from operations before income tax expense

$ ( 880,300 )

$ ( 267,000 )

Three Months Ended September 30, 2024

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate and Other

(Loss) from Operations

$ ( 1,200,000 )

$ ( 317,300 )

$ ( 1,565,800 )

Other income (expense), net

Interest income

Total other income, net

(Loss) from operations before income tax expense

$ ( 1,188,600 )

$ ( 252,300 )

$ ( 1,487,300 )

Nine Months Ended September 30, 2025

Benchtop Laboratory Equipment

Bioprocessing Systems

Corporate and Other

(Loss) from Operations

$ ( 300,800 )

$ ( 4,074,700 )

Loss from operations before discontinued operations and income taxes

$ ( 204,000 )

$ ( 1,088,300 )

Other (expense) income, net

Gain on sale of Genie Product line

Interest income

Total other income, net

Income (Loss) from operations before income tax expense

$ ( 297,000 )

$ ( 1,589,300 )

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Benchtop Laboratory Equipment

5 unchanged sentences

$ ( 2,089,500 )

$ ( 5,685,800 )

Other income (expense), net

1 unchanged sentence

Total other income, net

(Loss) from operations before income tax expense

$ ( 460,600 )

Loss from operations before discontinued operations and income taxes

$ ( 1,477,600 )

3 unchanged sentences

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 fixed assets, inventory, and intangible assets, of which the Company has no remaining assets or liabilities as of September 30, 2025.

The purchase price consisted of $ 9,600,000 minus certain working capital adjustments plus an earn-out 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 will supply products currently produced by the Division to the Buyer for a period of at least six months, renewable for 3 month periods up to a total of twelve months, plus transition services which include training and transfer of knowhow by Seller to the Buyer.

The amounts earned by the Company under the earn-out provision of the agreements are recorded as earned based on the contractual services performed and are recorded as a reduction of its operating expenses.

For the September 30, 2025, the Current Assets for Discontinued Operations of $ 108,000 reflect a receivable from the Buyer while the Current Liabilities for Discontinued Operations of $ 77,800 reflect a payable to the buyer.

As of December 31, 2024, historical assets and liabilities were restated to derecognize those assets and liabilities related to the Genie product line.

The gain on disposal was calculated as follows:

Carrying value of net assets of the Genie Division

Intangible Assets (Patents)

Total consideration received, net of transaction costs

transaction costs and closing adjustments

( 1,025,800 )

Escrow balance to be recognized upon successful transition

Gain on disposition

The purchase price consisted of $ 9,600,000 less certain working capital adjustments plus an earn-out 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 will supply products previously produced by the Genie Division to the Buyer for a period of up to 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 MSA and TSA are recorded as earned based on the contractual services performed and are recorded as a reduction of its operating expenses which amounted to $ 180,000 during the three month period ended March 31, 2026.

As of March 31, 2026, the Current Assets for Discontinued Operations of $ 280,500 reflect a receivable from the Buyer while the Current Liabilities for Discontinued Operations of $ 89,100 reflect a payable to the Buyer.

The following is the breakdown of the income generated from discontinued operations.

For the three months ended

For the nine months ended

September 30,

Cost of Goods Sold

4 unchanged sentences

Income from discontinued operations

In our Unaudited Condensed Consolidated Statements of Cash Flows, the cash provided by operating activities from discontinued operations for three months ended March 31, 2026 and 2025 was $ 69,200 and $ 191,100 , respectively.

Subsequent Events

The Company evaluated subsequent events through May 15, 2026 and noted no events requiring disclosure or recognition.

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