CapForce Inc 10-Q for FY2024 Q3

CapForce Inc. (CFOR)

10-Q 2024-11-15 For: 2024-09-30

Added on April 06, 2026

About this 10-Q

CapForce Inc filed this 10-Q on November 15, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $8.93M; compared with a net loss of $4.06M a year earlier
Diluted EPS: $1.35; compared with -$4.63 a year earlier

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Delaware		06-1614015
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

23219 Stringtown Road, Suite 300, Clarksburg, MD		20871
(Address of principal executive offices)		(Zip code)

Title of each class		Trading Symbols		Name of each exchange on which registered
Common Stock		OPGN		Nasdaq Capital Market

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS		ii

PART I.	FINANCIAL INFORMATION	1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2024 and 2023	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

PART II.	OTHER INFORMATION	38

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	39

SIGNATURES		40


	September 30, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	1,633,166		$	1,151,823
Accounts receivable, net		24,401			103,316
Prepaid expenses and other current assets		1,559,786			324,735
Total current assets		3,217,353			1,579,874
Property and equipment, net		1,117,245			-
Finance lease right-of-use assets, net		-			138
Operating lease right-of-use assets		832,966			-
Other noncurrent assets		302,262			302,262
Total assets	$	5,469,826		$	1,882,274

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	103,868		$	111,149
Accrued compensation and benefits		49,146			127,601
Accrued liabilities		89,173			135,476
Deferred revenue		-			25,926
EIB loan guaranty		-			10,873,867
Short-term insurance financing		180,555			-
Short-term finance lease liabilities		-			280
Short-term operating lease liabilities		167,021			147,943
Total current liabilities		589,763			11,422,242
Long-term operating lease liabilities, net of short-term amount		1,893,794			2,021,616
Total liabilities		2,483,557			13,443,858

Commitments and contingencies (Note 8)

Stockholders’ equity (deficit)
Series D convertible preferred stock, $0.01 par value; 1,000 shares authorized; 250 shares issued and outstanding at September 30, 2024 and December 31, 2023		2			2,500
Common stock, $0.01 par value; 100,000,000 shares authorized; 10,068,111 and 1,282,686 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		100,681			12,827
Additional paid-in capital		300,736,192			293,991,529
Accumulated deficit		(297,850,606	)		(305,493,302	)
Accumulated other comprehensive loss		-			(75,138	)
Total stockholders’ equity (deficit)		2,986,269			(11,561,584	)
Total liabilities and stockholders’ equity	$	5,469,826		$	1,882,274


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Revenue
Product sales	$	-		$	558,965		$	169,373		$	1,409,534
Laboratory services		-			47,135			26,776			112,810
Collaboration revenue		-			92,922			-			826,257
Total revenue		-			699,022			196,149			2,348,601

Operating expenses
Cost of products sold		-			618,796			31,636			1,925,566
Cost of services		-			73,174			1,575			405,582
Research and development, net		488			1,201,865			49,308			4,403,488
General and administrative		768,551			2,034,628			4,021,321			6,883,588
Sales and marketing		14,846			336,184			168,819			2,522,471
Total operating expenses		783,885			4,264,647			4,272,659			16,140,695

Operating loss		(783,885	)		(3,565,625	)		(4,076,510	)		(13,792,094	)

Other income (expense)
Interest and other income		92,131			24,977			242,799			86,301
Interest expense		(3,238	)		(396,768	)		(4,317	)		(1,698,564	)
Gain on impairment adjustment		-			-			2,079,575			-
Gain on extinguishment of debt		9,738,487			-			9,738,487			-
Gain on settlement of compensation expenses		570,785			-			570,785			-
Foreign currency transaction (losses) gains		(2	)		(135,930	)		463			(288,326	)
Change in fair value of derivative financial instruments		-			10,389			-			65,800
Change in fair value of EIB loan guaranty		(683,200	)		-			(908,586	)		-
Total other income (expense)		9,714,963			(497,332	)		11,719,206			(1,834,789	)
Income (loss) before income taxes		8,931,078			(4,062,957	)		7,642,696			(15,626,883	)
Provision for income taxes		-			-			-			-
Net income (loss)	$	8,931,078		$	(4,062,957	)	$	7,642,696		$	(15,626,883	)
Net income (loss) allocated to preferred stockholders – basic		(690,467	)		-			(519,161	)		-
Net income (loss) available to common stockholders – basic	$	8,240,611		$	(4,062,957	)	$	7,123,535		$	(15,626,883	)

Net income (loss)	$	8,931,078		$	(4,062,957	)	$	7,642,696		$	(15,626,883	)
Net income (loss) allocated to preferred stockholders – diluted		-			-			-			-
Net income (loss) available to common stockholders – diluted	$	8,931,078		$	(4,062,957	)	$	7,642,696		$	(15,626,883	)

Earnings (loss) per share attributable to common stockholders
Basic	$	1.43		$	(4.63	)	$	2.51		$	(23.80	)
Diluted	$	1.35		$	(4.63	)	$	2.14		$	(23.80	)

Weighted average shares outstanding
Basic		5,760,214			877,815			2,837,744			656,585
Diluted		6,603,804			877,815			3,571,505			656,585

Net income (loss)	$	8,931,078		$	(4,062,957	)	$	7,642,696		$	(15,626,883	)
Other comprehensive income – foreign currency translation		-			78,815			-			118,178
Comprehensive income (loss)	$	8,931,078		$	(3,984,142	)	$	7,642,696		$	(15,508,705	)


	Common Stock						Preferred Stock						Additional			Accumulated Other Comprehensive
	Number of Shares			Amount			Number of Shares			Amount			Paid-in Capital			Income (Loss)			Accumulated Deficit			Total
Balances at December 31, 2022		289,992		$	2,900			-		$	-		$	281,193,260		$	(795,840	)	$	(272,824,772	)	$	7,575,548
Issuance of RSUs		1,163			12			-			-			(12	)		-			-			-
Stock compensation expense		-			-			-			-			211,122			-			-			211,122
Offering of common stock and warrants, net of issuance costs		258,621			2,586			-			-			6,971,464			-			-			6,974,050
Share cancellation		(220	)		(2	)		-			-			2			-			-			-
Foreign currency translation		-			-			-			-			-			153,067			-			153,067
Net loss		-			-			-			-			-			-			(5,736,603	)		(5,736,603	)
Balances at March 31, 2023		549,556			5,496			-			-			288,375,836			(642,773	)		(278,561,375	)		9,177,184
Issuance of RSUs		2,216			22			-			-			(22	)		-			-			-
Stock compensation expense		-			-			-			-			156,529			-			-			156,529
Cash bonus taken in the form of stock compensation		-			-			-			-			283,554			-			-			283,554
Offering of common stock and warrants, net of issuance costs		145,000			1,450			-			-			3,182,200			-			-			3,183,650
Foreign currency translation		-			-			-			-			-			(113,704	)		-			(113,704	)
Net loss		-			-			-			-			-			-			(5,827,323	)		(5,827,323	)
Balances at June 30, 2023		696,772			6,968			-			-			291,998,097			(756,477	)		(284,388,698	)		6,859,890
Stock compensation expense		-			-			-			-			(229,483	)		-			-			(229,483	)
Offering of common stock and warrants, net of issuance costs		304,583			3,046			-			-			27,412			-			-			30,458
Foreign currency translation		-			-			-			-			-			78,815			-			78,815
Net loss		-			-			-			-			-			-			(4,062,957	)		(4,062,957	)
Balances at September 30, 2023		1,001,355		$	10,014			-		$	-		$	291,796,026		$	(677,662	)	$	(288,451,655	)	$	2,676,723

Balances at December 31, 2023		1,282,686		$	12,827			250		$	2,500		$	293,991,529		$	(75,138	)	$	(305,493,302	)	$	(11,561,584	)
Issuance of RSUs		21,053			210			-			-			(210	)		-			-			-
Stock compensation expense		-			-			-			-			188,237			-			-			188,237
Offering of preferred stock		-			-			200,000			2,000			198,000			-			-			200,000
Reclassification of preferred stock par value to additional paid-in capital (out of period adjustment; see Note 3)		-			-			-			(2,498	)		2,498			-			-			-
Elimination of translation adjustments of previously dissolved subsidiaries (out of period adjustment; see Note 3)		-			-			-			-			-			75,138			-			75,138
Net income (As Restated)		-			-			-			-			-			-			287,967			287,967
Balances at March 31, 2024 (As Restated)		1,303,739			13,037			200,250			2,002			294,380,054			-			(305,205,335	)		(10,810,242	)
Issuance of RSUs		40,000			400			-			-			(400	)		-			-			-
Stock compensation expense		-			-			-			-			368,391			-			-			368,391
Share issuance related to May 2024 Reverse Stock Split		5,238			53			-			-			(53	)		-			-			-
Share cancellation related to May 2024 Reverse Stock Split		(3	)		-			-			-			-			-			-			-
Offering of preferred stock		-			-			350,000			3,500			346,500			-			-			350,000
Net loss		-			-			-			-			-			-			(1,576,349	)		(1,576,349	)
Balances at June 30, 2024		1,348,974			13,490			550,250			5,502			295,094,492			-			(306,781,684	)		(11,668,200	)
Stock compensation expense		-			-			-			-			1,530			-			-			1,530
Cash compensation taken in the form of stock compensation		440,028			4,400			-			-			1,328,885			-			-			1,333,285
Offering of preferred stock		-			-			2,450,000			24,500			2,375,717			-			-			2,400,217
Conversion of preferred stock into common stock		7,200,000			72,000			(3,000,000	)		(30,000	)		(42,000	)		-			-			-
Issuance of common stock pursuant to equity line of credit		1,079,109			10,791			-			-			1,977,568			-			-			1,988,359
Net income		-			-			-			-			-			-			8,931,078			8,931,078
Balances at September 30, 2024		10,068,111		$	100,681			250		$	2		$	300,736,192		$	-		$	(297,850,606	)	$	2,986,269

Schedule of inventories
	September 30, 2024			December 31, 2023
Finished goods	$	1,225,975		$	1,280,805
Total, gross		1,225,975			1,280,805
Less inventory reserve		(1,225,975	)		(1,280,805	)
Total, net of inventory reserve	$	-		$	-

Schedule of earnings per share, basic and diluted
	Basic						Diluted
	Three months ended						Three months ended
	September 30, 2024			September 30, 2023			September 30, 2024		September 30, 2023
Net income (loss)	$	8,931,078		$	(4,062,957	)	$	8,931,078	$	(4,062,957	)
Net income allocated to preferred stockholders		(690,467	)		-			-		-
Net income (loss) available to common stockholders	$	8,240,611		$	(4,062,957	)	$	8,931,078	$	(4,062,957	)

Basic weighted average shares outstanding		5,760,214			877,815			5,760,214		877,815

Dilutive effect of preferred stock								843,590		-
Dilutive weighted average shares outstanding								6,603,804		877,815

Earnings (loss) per share	$	1.43		$	(4.63	)	$	1.35	$	(4.63	)

	Basic						Diluted
	Nine months ended						Nine months ended
	September 30, 2024			September 30, 2023			September 30, 2024		September 30, 2023
Net income (loss)	$	7,642,696		$	(15,626,883	)	$	7,642,696	$	(15,626,883	)
Net income allocated to preferred stockholders		(519,161	)		-			-		-
Net income (loss) available to common stockholders	$	7,123,535		$	(15,626,883	)	$	7,642,696	$	(15,626,883	)

Basic weighted average shares outstanding		2,837,744			656,585			2,837,744		656,585

Dilutive effect of preferred stock								733,761		-
Dilutive weighted average shares outstanding								3,571,505		656,585

Earnings (loss) per share	$	2.51		$	(23.80	)	$	2.14	$	(23.80	)

Schedule of revenues by type of service
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Product sales	$	-	$	558,965	$	169,373	$	1,409,534
Laboratory services		-		47,135		26,776		112,810
Collaboration revenue		-		92,922		-		826,257
Total revenue	$	-	$	699,022	$	196,149	$	2,348,601

Schedule of revenues by geography
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Domestic	$	-	$	142,716	$	196,149	$	523,978
International		-		556,306		-		1,824,623
Total revenue	$	-	$	699,022	$	196,149	$	2,348,601

Schedule of changes in deferred revenue
Balance at December 31, 2022	$	142,061
Contracts with customers		74,109
Recognized in the current period		(144,196	)
Currency translation adjustment		(46,048	)
Balance at December 31, 2023		25,926
Recognized in the current period		(21,096	)
Refunded to customers in the current period		(4,830	)
Balance at September 30, 2024	$	-

Schedule of EIB loan guaranty
	September 30, 2024		December 31, 2023
EIB	$	-	$	10,873,867
Total obligations		-		10,873,867
Unamortized discount		-		-
Carrying value of EIB loan guaranty		-		10,873,867
Less EIB loan guaranty (current portion)		-		(10,873,867	)
Long-term EIB loan guaranty	$	-	$	-

Schedule of company recognized stock compensation expense
	Three months ended September 30,					Nine months ended September 30,
	2024		2023			2024		2023
Cost of services	$	-	$	(442	)	$	-	$	(442	)
Research and development		-		(159,742	)		48,820		(41,914	)
General and administrative		1,530		74,411			504,941		259,452
Sales and marketing		-		(143,710	)		4,397		(78,928	)
	$	1,530	$	(229,483	)	$	558,158	$	138,168

Schedule of stock purchase warrants
				Outstanding at
Issuance	Exercise Price		Expiration	September 30, 2024		December 31, 2023
February 2015	$	660,000.00	February 2025		3		3
October 2019	$	400.00	October 2024		1,770		1,770
October 2019	$	520.00	October 2024		1,175		1,175
November 2020	$	504.40	May 2026		1,211		1,211
February 2021	$	780.00	August 2026		2,084		2,084
May 2023	$	7.785	(1)		889,274		889,274
October 2023	$	3.36	April 2029		200,000		200,000
					1,095,517		1,095,517

Schedule of maturities of lease liabilities
Maturity of Lease Liabilities	Operating			Finance		Total
2024 (October to December)	$	90,395		$	-	$	90,395
2025		368,179			-		368,179
2026		378,279			-		378,279
2027		388,682			-		388,682
2028		399,388			-		399,388
Thereafter		1,338,299			-		1,338,299
Total lease payments		2,963,222			-		2,963,222
Less: Interest		(902,407	)		-		(902,407	)
Present value of lease liabilities	$	2,060,815		$	-	$	2,060,815

Schedule of supplemental cash flow information
Supplemental Cash Flow Information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities
Operating leases	$	175,488	$	484,546
Finance leases	$	-	$	-
Cash used in financing activities
Finance leases	$	280	$	2,523
ROU assets obtained in exchange for lease obligations:
Operating leases	$	-	$	801,321

Schedule of ROU asset and liability classifications
Lease Classification	September 30, 2024		December 31, 2023
ROU Assets:
Operating	$	832,966	$	-
Financing		-		138
Total ROU assets	$	832,966	$	138

Liabilities
Current:
Operating	$	167,021	$	147,943
Finance		-		280
Noncurrent:
Operating		1,893,794		2,021,616
Finance		-		-
Total lease liabilities	$	2,060,815	$	2,169,839

Schedule of lease cost
		Three months ended September 30,				Nine months ended September 30,
Lease Cost	Classification	2024		2023		2024		2023
Operating	Operating expenses	$	58,496	$	175,243	$	175,488	$	484,546
Finance:
Amortization	Operating expenses		-		847		138		2,514
Interest expense	Other expenses		-		-		-		-
Total lease costs		$	58,496	$	176,090	$	175,626	$	487,060

Schedule of other information
Other Information	Total
Weighted average remaining lease term (in years)
Operating leases		7.4
Finance leases		-
Weighted average discount rate:
Operating leases		10.0	%
Finance leases		-	%

Exhibit Number		Description
10.1		Securities Purchase Agreement, dated August 22, 2024, by and between the Company and AEI Capital Ltd. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 22, 2024).

10.2		First Amendment to Securities Purchase Agreement, dated October 3, 2024, by and between the Company and AEI Capital Ltd. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on October 9, 2024).

31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer and Principal Accounting Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) the Unaudited Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Unaudited Condensed Consolidated Financial Statements.

	OPGEN, INC.

	By:	/s/ John Tan Honjian
		John Tan Honjian
		Chairman and CEO (principal executive officer)

	Date:	November 15, 2024

Date: November 15, 2024

/s/ John Tan Honjian
John Tan Honjian
Chairman and CEO (principal executive officer)

Date: November 15, 2024

/s/ David E. Lazar
David E. Lazar
President (principal financial officer and principal accounting officer)