SCIENTIFIC INDUSTRIES INC 10-Q

Item 1. Financial Statements SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS As of June 30, 2026 As of December 31, 2025 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 616,500 $ 955,000 Investment securities 3,932,000 5,705,000 Trade accounts receivable, less allowance for doubtful accounts of $ 8,300 at June 30, 2026 and December 31, 2025 517,100 865,800 Inventories 1,555,500 1,401,300 Income tax receivable 73,600 73,600 Prepaid expenses and other current assets 941,900 1,115,300 Current assets of discontinued operations 490,400 272,900 Total current assets 8,127,000 10,388,900 Property and equipment, net 604,400 690,900 Goodwill 115,300 115,300 Other intangible assets, net 81,000 103,500 Inventories 384,800 346,700 Operating lease right-of-use assets 756,000 924,000 Other assets 38,400 38,300 Total assets $ 10,106,900 $ 12,607,600 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 525,900 $ 449,100 Accrued expenses 510,900 416,700 Contract liabilities 129,600 99,800 Lease liabilities, current portion 360,300 371,400 Current liabilities of discontinued operations 75,500 12,300 Total current liabilities 1,602,200 1,349,300 Lease liabilities, less current portion 430,400 595,300 Total liabilities 2,032,600 1,944,600 Shareholders’ equity: Common stock, $ 0.05 par value; 30,000,000 shares authorized; 11,928,599 shares issued and outstanding at June 30, 2026 and December 31, 2025 596,400 596,400 Additional paid-in capital 45,318,300 45,039,500 Accumulated other comprehensive income 133,600 178,000 Accumulated deficit ( 37,974,000 ) ( 35,150,900 ) Total shareholders’ equity 8,074,300 10,663,000 Total liabilities and shareholders’ equity $ 10,106,900 $ 12,607,600 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 June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Revenues $ 1,470,400 $ 1,081,000 $ 2,697,500 $ 2,023,300 Cost of revenues 847,700 704,300 1,604,900 1,302,300 Gross profit 622,700 376,700 1,092,600 721,000 Operating expenses: General and administrative 553,900 744,800 1,300,900 1,774,000 Selling 647,100 774,300 1,334,200 1,528,100 Research and development 694,500 677,100 1,398,100 1,329,100 Total operating expenses 1,895,500 2,196,200 4,033,200 4,631,200 Loss from operations ( 1,272,800 ) ( 1,819,500 ) ( 2,940,600 ) ( 3,910,200 ) Other income: Other income (expense), net ( 1,400 ) 8,000 25,700 20,400 Interest income 40,400 14,700 91,800 34,900 Total other income, net 39,000 22,700 117,500 55,300 Loss from operations before income tax expense ( 1,233,800 ) ( 1,796,800 ) ( 2,823,100 ) ( 3,854,900 ) Income tax expense - - - - Loss from continuing operations $ ( 1,233,800 ) ( 1,796,800 ) $ ( 2,823,100 ) $ ( 3,854,900 ) Discontinued Operations: Income from discontinued operations, net of tax $ - $ 273,100 $ - $ 552,700 Net loss $ ( 1,233,800 ) $ ( 1,523,700 ) $ ( 2,823,100 ) $ ( 3,302,200 ) Comprehensive gain (loss): Foreign currency translation gain (loss) 30,100 155,200 ( 44,400 ) 279,600 Comprehensive gain (loss) 30,100 $ 155,200 ( 44,400 ) 279,600 Total comprehensive loss $ ( 1,203,700 ) ( 1,368,500 ) $ ( 2,867,500 ) $ ( 3,022,600 ) Basic and Diluted income (loss) per common share: Continuing operations $ ( 0.10 ) $ ( 0.16 ) $ ( 0.24 ) $ ( 0.35 ) Discontinued operations - 0.03 - 0.05 Consolidated operations $ ( 0.10 ) $ ( 0.13 ) $ ( 0.24 ) $ ( 0.30 ) Weighted Average Shares Outstanding 11,928,599 11,345,907 11,928,599 10,867,040 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) Common Stock Additional Paid-in Accumulated Other Comprehensive Income Accumulated Total Shareholders’ Shares Amount Capital (Loss) Deficit Equity Balance December 31, 2025 11,928,599 $ 596,400 $ 45,039,500 $ 178,000 $ ( 35,150,900 ) $ 10,663,000 Net loss - - - - ( 1,589,300 ) ( 1,589,300 ) Foreign currency translation adjustment - - - ( 74,500 ) - ( 74,500 ) Stock-based compensation - - 116,300 - - 116,300 Balance March 31, 2026 11,928,599 $ 596,400 $ 45,155,800 $ 103,500 $ ( 36,740,200 ) $ 9,115,500 Net loss ( 1,233,800 ) $ ( 1,233,800 ) Foreign currency translation adjustment 30,100 30,100 Stock-based compensation 162,500 162,500 Balance June 30, 2026 11,928,599 $ 596,400 $ 45,318,300 $ 133,600 $ ( 37,974,000 ) $ 8,074,300 Common Stock Additional Paid-in Accumulated Other Comprehensive Income Accumulated Total Shareholders’ Shares Amount Capital (Loss) Deficit Equity Balance December 31, 2024 10,503,599 $ 525,200 $ 42,637,800 $ ( 113,100 ) $ ( 33,930,500 ) $ 9,119,400 Loss from continuing operations - - - - ( 2,057,100 ) ( 2,057,100 ) Income from discontinued operations - - - - 278,600 278,600 Foreign currency translation adjustment - - - 124,400 - 124,400 Stock-based compensation - - 302,600 - - 302,600 Balance March 31, 2025 10,503,599 $ 525,200 $ 42,940,400 $ 11,300 $ ( 35,709,000 ) $ 7,767,900 Loss from continuing operations ( 1,796,800 ) ( 1,796,800 ) Income from discontinued operations 273,100 273,100 Issuance of Common Stock and Warrants, net of issuance costs (Note 7) 1,050,000 52,500 1,399,700 1,452,200 Foreign currency translation adjustment 155,200 155,200 Stock-based compensation 72,600 72,600 Balance June 30, 2025 11,553,599 $ 577,700 $ 44,412,700 $ 166,500 $ ( 37,232,700 ) $ 7,924,200 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 Six Months Ended June 30, 2026 2025 Operating activities: Net loss $ ( 2,823,100 ) $ ( 3,302,200 ) Less: Income from discontinued operations, net of tax - 552,700 Loss from continuing operations $ ( 2,823,100 ) $ ( 3,854,900 ) Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: Depreciation and amortization 106,100 321,000 Stock-based compensation 278,800 375,200 Gain on sale of investment securities - ( 20,100 ) Unrealized holding loss (gain) on investment securities 18,100 ( 8,600 ) Noncash lease expense 168,000 101,600 Changes in operating assets and liabilities: Trade accounts receivable 348,700 159,500 Inventories ( 192,300 ) ( 83,100 ) Prepaid and other current assets 173,300 ( 171,000 ) Other assets - 4,300 Accounts payable 76,800 59,200 Accrued expenses 94,200 18,800 Contract liabilities 29,800 - Lease liabilities ( 176,000 ) ( 106,400 ) Net cash used in operating activities ( 1,897,600 ) ( 3,204,500 ) Investing activities: Purchases of investment securities ( 115,900 ) - Redemption of investment securities 1,871,000 1,613,900 Capital expenditures ( 14,500 ) ( 33,200 ) Net cash provided by investing activities 1,740,600 1,580,700 Financing activities: Proceeds from issuance of common stock - 1,452,200 Net cash provided by financing activities $ - $ 1,452,200 Discontinued Operations: Net cash (used in) provided by discontinued operations ( 154,300 ) 441,600 Net change in cash and cash equivalents ( 311,300 ) 270,000 Effect of changes in foreign currency exchange rates on cash and cash equivalents ( 27,200 ) 33,500 Net (decrease) increase in cash and cash equivalents ( 338,500 ) 303,500 Cash and cash equivalents, beginning of period 955,000 587,900 Cash and cash equivalents, end of period $ 616,500 $ 891,400 SUPPLEMENTAL DISCLOSURES: Noncash financing activities Record right-of-use assets $ 18,400 $ - Record lease liabilities $ 18,400 $ - 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, 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 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 (“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 six months ended June 30, 2026, are not necessarily an indication of the results for the full fiscal year ending December 31, 2026. 2. 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 (all collectively referred to as the “Company”). All material intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern Considerations 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 for at least 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 six months ended June 30, 2026, the Company generated negative cash flows from operations of $ 1,897,600 . The Company has an accumulated deficit of $ 37,974,000 as of June 30, 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 11), 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 six months ended June 30, 2026; however, there is no assurance that management’s current operating plan will be successful. 7 Table of Contents New Accounting Pronouncements In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. (“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. The practical expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the asset . 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 and elected to apply the practical expedient 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. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted, and should be applied either on a prospective basis or retrospective basis. 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 preparation of unaudited 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. 3. Fair Value of Financial Instruments The Company follows 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: 8 Table of Contents 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. 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 June 30, 2026, by the funds. The investments which seek high current income, comprised 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 June 30, 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 June 30, 2026, and December 31, 2025, according to the valuation techniques the Company used to determine their fair values: Fair Value Measurement as of June 30, 2026 Level 1 Level 2 Level 3 Total Assets: Investment securities: Mutual Funds $ 3,417,000 $ - $ - $ 3,417,000 Private Credit Funds $ - $ 515,000 $ 515,000 Total $ 3,417,000 $ - $ 515,000 $ 3,932,000 Fair Value Measurement as of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Investment securities Mutual Funds $ 5,198,600 $ - $ - $ 5,198,600 Private Credit Funds $ - $ 506,400 $ 506,400 Total $ 5,198,600 $ - $ 506,400 $ 5,705,000 9 Table of Contents Investments in marketable securities by security type as of June 30, 2026, and December 31, 2025, consisted of the following: As of June 30, 2026: Cost Fair Value Unrealized Holding Loss Mutual funds $ 3,417,600 $ 3,417,000 $ 600 Private Credit Funds $ 532,500 $ 515,000 $ 17,500 Total $ 3,950,100 $ 3,932,000 $ 18,100 As of December 31, 2025: Cost Fair Value Unrealized Holding Gain Mutual funds $ 5,198,000 $ 5,198,600 $ ( 600 ) Private Credit Funds $ 504,600 $ 506,400 $ ( 1,800 ) Total $ 5,702,600 $ 5,705,000 $ ( 2,400 ) 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 six months ended June 30, 2026 and for the year ended December 31, 2025. 2026 2025 Balance of recurring Level 3 assets at beginning of period $ 506,400 $ 0 Total gains or losses for the period: Purchases - 500,000 Sales - - Issuances - - Settlements 8,600 6,400 Transfers into Level 3 - - Transfers out of Level 3 - - Balance of recurring Level 3 assets at end of period $ 515,000 $ 506,400 10 Table of Contents 4. Inventories Inventories of the Company are as follows: As of June 30, 2026 As of December 31, 2025 Raw materials $ 1,009,900 $ 892,200 Work-in-process 56,800 - Finished goods 873,600 856,100 Total Inventories $ 1,940,300 $ 1,748,300 Inventories - Current Asset $ 1,555,500 $ 1,401,300 Inventories - Noncurrent Asset $ 384,800 $ 346,700 5. Goodwill and Finite Lived Intangible Assets 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 June 30, 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 June 30, 2026 Useful Lives Cost Accumulated Amortization Net Technology, trademarks 3 -- 10 yrs. $ 1,216,800 $ 1,216,800 $ - Trade names 3 -- 6 yrs. 592,300 592,300 - Websites 3 -- 7 yrs. 210,000 210,000 - Customer relationships 4 -- 10 yrs. 372,200 372,200 - Sublicense agreements 10 yrs. 294,000 294,000 - Non-compete agreements 4 -- 5 yrs. 1,060,500 1,060,500 - Patents 5 -- 7 yrs. 408,800 327,800 81,000 $ 4,154,600 $ 4,073,600 $ 81,000 As of December 31, 2025 Useful Lives Cost Accumulated Amortization Net Technology, trademarks 3 -- 10 yrs. $ 1,216,800 $ 1,216,800 $ - Trade names 3 -- 6 yrs. 592,300 592,300 - Websites 3 -- 7 yrs. 210,000 210,000 - Customer relationships 4 -- 10 yrs. 372,200 372,200 - Sublicense agreements 10 yrs. 294,000 294,000 - Non-compete agreements 4 -- 5 yrs. 1,060,500 1,060,500 - Patents 5 -- 7 yrs. 408,800 305,300 103,500 $ 4,154,600 $ 4,051,100 $ 103,500 11 Table of Contents Total amortization expense was $ 22,500 and $ 221,400 for the six months ended June 30, 2026, and June 30, 2025, respectively. Estimated future fiscal year amortization expense of intangible assets as of June 30, 2026, is as follows: As of June 30, 2026 Amount Remainder of year ending 2026 $ 22,100 2027 43,900 2028 15,000 Total $ 81,000 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 June 30, 2026 and December 31, 2025, the Company is not aware of any contingent legal liabilities that should be reflected in the unaudited consolidated financial statements. Leases The Company’s approximate future minimum rental payments under all operating leases as of June 30, 2026, were as follows: As of June 30, 2026: Amount Remainder of fiscal year ending 2026 $ 211,100 2027 408,400 2028 209,400 2029 1,100 Total future minimum payments $ 830,000 Less: Imputed interest ( 39,300 ) Total Present Value of Operating Lease Liabilities $ 790,700 12 Table of Contents 7. Shareholders’ Equity Issuance of Common Stock and Warrants 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 June 30, 2026, there were 2,616,374 shares of Common Stock 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 10 -year options at an exercise price of $ 0.60 of which 535,000 vest 100 % on February 17, 2030 and 577,000 of which vest monthly over twelve months, the majority of which were granted in lieu of cash salary and fees foregone by executives and the Board of Directors. 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 10 -year options at an exercise price of $ 1.00 , vesting 100 % four years after the grant date, 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 for the six months ended June 30, 2026: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Outstanding at December 31, 2025 2,246,144 $ 3.07 7.33 Granted 1,112,000 $ 0.60 Exercised Expired ( 31,626 ) $ 2.04 Outstanding at June 30, 2026 3,326,518 $ 2.25 8.15 Stock compensation expense related to stock options of $ 278,800 and $ 375,200 was incurred for the six months ended June 30, 2026 and 2025, respectively. 13 Table of Contents 8. Loss Per Common Share 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. 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 six months ended June 30, June 30, 2026 2025 2026 2025 Basic and Diluted Earnings per share: Loss from continuing operations $ ( 1,233,800 ) $ ( 1,796,800 ) $ ( 2,823,100 ) $ ( 3,854,900 ) Income from discontinued operations, net of taxes - 273,100 - 552,700 Net loss $ ( 1,233,800 ) $ ( 1,523,700 ) $ ( 2,823,100 ) $ ( 3,302,200 ) Weighted average number of common shares outstanding 11,928,599 11,345,907 11,928,599 10,867,040 Effect of dilutive securities: - - - - Weighted average number of dilutive common shares outstanding 11,928,599 11,345,907 11,928,599 10,867,040 Basic and diluted loss per common share: Continuing operations $ ( 0.10 ) $ ( 0.16 ) $ ( 0.24 ) $ ( 0.35 ) Discontinued operations - 0.03 - 0.05 Consolidated operations $ ( 0.10 ) $ ( 0.13 ) $ ( 0.24 ) $ ( 0.30 ) Approximately 3,326,518 and 7,627,350 shares of the Company’s common stock issuable upon the exercise of stock options and warrants, respectively, were excluded from the calculation because the effect would be anti-dilutive due to the loss for the six months ended June 30, 2026. Approximately 2,195,021 and 9,536,660 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 six months ended June 30, 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. 9. Related Parties Consulting Agreements The Company has a consulting agreement with John Nicols, a Director of the Company since September 2023 for services provided to the Bioprocessing Systems Operations 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 six months ended June 30, 2026 and 2025, the Company paid $ 28,000 and $ 48,000 , respectively, to Mr. Nicols. 14 Table of Contents 10. Segment Information and Concentration The Company views its operations as two operating segments: 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. Segment information is reported as follows: Three Months Ended June 30, 2026 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Revenues $ 1,196,200 $ 274,200 $ - $ 1,470,400 Foreign Sales - 120,400 - 120,400 Gain (Loss) From Operations 57,500 ( 1,071,000 ) ( 259,300 ) ( 1,272,800 ) Assets 3,261,300 2,913,600 3,932,000 10,106,900 Long-Lived Asset Expenditures 2,000 6,300 - 8,300 Depreciation and Amortization 3,200 47,600 - 50,800 Three Months Ended June 30, 2025 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Revenues $ 857,300 $ 223,700 $ - $ 1,081,000 Foreign Sales - 118,900 - 118,900 Loss From Operations ( 102,700 ) ( 1,459,600 ) ( 257,200 ) ( 1,819,500 ) Assets 6,155,300 3,680,200 390,900 10,226,400 Long-Lived Asset Expenditures 5,700 1,200 - 6,900 Depreciation and Amortization 16,800 137,500 - 154,300 For the three months ended June 30, 2026, two customers accounted for approximately 49 % of the Company’s total revenue. For the three months ending June 30, 2025, one customer accounted for approximately 10 % of the Company’s total revenue. For the three months ended June 30, 2026, one vendor accounted for approximately 11 % of the Company’s total purchases. For the three months ending June 30, 2025, there was no vendor concentration. Six Months Ended June 30, 2026 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Revenues $ 2,062,000 $ 635,500 $ - $ 2,697,500 Foreign Sales - 390,700 - 390,700 Loss From Operations ( 140,000 ) ( 2,183,800 ) ( 616,800 ) ( 2,940,600 ) Assets 3,261,300 2,913,600 3,932,000 10,106,900 Long-Lived Asset Expenditures 2,000 12,500 - 14,500 Depreciation and Amortization 9,400 96,700 - 106,100 Six Months Ended June 30, 2025 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Revenues $ 1,666,100 $ 357,200 $ - $ 2,023,300 Foreign Sales - 199,800 - 199,800 Loss From Operations ( 197,200 ) ( 2,894,700 ) ( 818,300 ) ( 3,910,200 ) Assets 6,155,300 3,680,200 390,900 10,226,400 Long-Lived Asset Expenditures 14,000 19,200 - 33,200 Depreciation and Amortization 26,800 294,200 - 321,000 For the six months ended June 30, 2026, two customers accounted for approximately 35 % of the Company’s total revenue. For the six months ending June 30, 2025, one customer accounted for approximately 10 % of the Company’s total revenue. For the six months ended June 30, 2026, one vendor accounted for approximately 16 % of the Company’s total purchases. For the six months ending June 30, 2025, there was no vendor concentration. 15 Table of Contents 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 and six months ended June 30, 2026 and 2025, respectively are as follows: Three Months Ended June 30, 2026 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Gain (loss) From Operations 57,500 ( 1,071,000 ) ( 259,300 ) ( 1,272,800 ) Other (expense) income, net - ( 5,900 ) 4,500 ( 1,400 ) Interest income - - 40,400 40,400 Total other income, net - ( 5,900 ) 44,900 39,000 Gain (loss) from operations before discontinued operations and income taxes $ 57,500 $ ( 1,076,900 ) $ ( 214,400 ) $ ( 1,233,800 ) Three Months Ended June 30, 2025 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Loss From Operations ( 102,700 ) ( 1,459,600 ) ( 257,200 ) ( 1,819,500 ) Other income (expense), net - 7,900 100 8,000 Interest income - - 14,700 14,700 Total other income, net - 7,900 14,800 22,700 Loss from operations before discontinued operations and income taxes $ ( 102,700 ) $ ( 1,451,700 ) $ ( 242,400 ) $ ( 1,796,800 ) Six Months Ended June 30, 2026 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Loss From Operations ( 140,000 ) ( 2,183,800 ) ( 616,800 ) ( 2,940,600 ) Other (expense) income, net - 18,700 7,000 25,700 Interest income - - 91,800 91,800 Total other income, net - 18,700 98,800 117,500 Loss from operations before discontinued operations and income taxes $ ( 140,000 ) $ ( 2,165,100 ) $ ( 518,000 ) $ ( 2,823,100 ) Six Months Ended June 30, 2025 Benchtop Laboratory Equipment Bioprocessing Systems Corporate and Other Consolidated Loss From Operations ( 197,200 ) ( 2,894,700 ) ( 818,300 ) ( 3,910,200 ) Other income (expense), net - 23,000 ( 2,600 ) 20,400 Interest income - - 34,900 34,900 Total other income, net - 23,000 32,300 55,300 Loss from operations before discontinued operations and income taxes $ ( 197,200 ) $ ( 2,871,700 ) $ ( 786,000 ) $ ( 3,854,900 ) 16 Table of Contents 11. Discontinued Operations 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”). 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 and $ 360,000 during the three and six month periods ended June 30, 2026, respectively As of June 30, 2026, the Current Assets for Discontinued Operations of $ 490,400 reflect a receivable from the Buyer while the Current Liabilities for Discontinued Operations of $ 75,500 reflect a payable to the Buyer. The following is the breakdown of the income generated from discontinued operations. For the three months ended June 30, 2026 2025 Net Revenue $ - $ 1,248,900 Cost of Goods Sold - 605,700 Gross Profit - 643,200 Operating Expenses: General and Administrative - 232,000 Selling - 138,000 Research and Development - 100 Total Expenses $ - $ 370,100 Income from discontinued operations $ - $ 273,100 For the six months ended June 30, 2026 2025 Net Revenue $ - $ 2,713,100 Cost of Goods Sold - 1,397,600 Gross Profit - 1,315,500 Operating Expenses: General and Administrative - 454,200 Selling - 308,500 Research and Development - 100 Total Expenses $ - $ 762,800 Income from discontinued operations $ - $ 552,700 In our Unaudited Condensed Consolidated Statements of Cash Flows, the cash (used in) provided by operating activities from discontinued operations for six months ended June 30, 2026 and 2025 was ($ 154,300 ) and $ 441,600 , respectively. 12. Subsequent Events Effective July 30th, the Company entered into a second amendment with its landlord for the Bohemia premises to among other things, reduce the space by 5,003 feet through a voluntary surrender, provide the Company the ability to sublease additional 5,000 square feet, and extend the lease through October 2031. 17 Table of Contents