SCND 10-Q

Scientific Industries Inc (SCND)

10-Q 2024-05-15 For: 2024-03-31

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Added on April 06, 2026

Delaware		04-2217279
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

80 Orville Drive, Suite 102, Bohemia, New York		11716
(Address of principal executive offices)		(Zip Code)

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

PART I - Financial Information

Item 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss	4

	Condensed Consolidated Statements of Changes in Shareholders’ Equity	5

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	16

Item 4.	CONTROLS AND PROCEDURES	16

PART II - Other Information

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	18

SIGNATURE		19

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	351,700		$	796,100
Investment securities		4,404,800			4,928,700
Trade accounts receivable, less allowance for doubtful accounts of $33,600 at March 31, 2024 and December 31, 2023		1,144,900			1,157,100
Inventories		4,868,200			4,883,900
Income tax receivable		161,400			161,400
Prepaid expenses and other current assets		468,800			413,500
Total current assets		11,399,800			12,340,700

Property and equipment, net		1,050,100			1,082,300
Goodwill		115,300			115,300
Other intangible assets, net		1,124,000			1,249,900
Inventories		607,000			609,000
Operating lease right-of-use assets		1,190,900			1,273,900
Other assets		59,400			59,400
Total assets	$	15,546,500		$	16,730,500

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	767,400		$	711,700
Accrued expenses		887,400			777,900
Contract liabilities		24,500			23,600
Lease liabilities, current portion		371,100			324,100
Total current liabilities		2,050,400			1,837,300

Lease liabilities, less current portion		877,000			1,007,800
Total liabilities		2,927,400			2,845,100

Shareholders’ equity:
Common stock, $0.05 par value; 30,000,000 shares authorized; 10,503,599 and 10,145,211, shares issued and 10,503,599 and 10,145,211, shares outstanding at March 31, 2024 and December 31, 2023		525,200			507,300
Additional paid-in capital		41,672,300			40,844,600
Accumulated other comprehensive gain (loss)		(41,700	)		18,600
Accumulated deficit		(29,536,700	)		(27,485,100	)

Total shareholders’ equity		12,619,100			13,885,400

Total liabilities and shareholders’ equity	$	15,546,500		$	16,730,500

	For the Three Months Ended March 31,
	2024			2023
Revenues	$	2,483,500		$	2,805,400

Cost of revenues		1,442,700			1,467,400

Gross profit		1,040,800			1,338,000

Operating expenses:
General and administrative		1,521,800			1,569,300
Selling		897,800			1,444,800
Research and development		710,700			791,500

Total operating expenses		3,130,300			3,805,600

Loss from operations		(2,089,500	)		(2,467,600	)

Other income:
Other income (expense), net		(4,300	)		86,300
Interest income		42,200			9,400
Total other income, net		37,900			95,700

Loss from continuing operations before income tax benefit		(2,051,600	)		(2,371,900	)

Income tax expense		-			-

Loss from continuing operations		(2,051,600	)		(2,371,900	)

Discontinued operations:

Gain from discontinued operations, net of tax		-			1,400

Net loss	$	(2,051,600	)	$	(2,370,500	)

Comprehensive gain (loss):
Unrealized holding gain on investment securities, net of tax		-			3,700
Foreign currency translation (loss) gain		(60,300	)		40,200
Comprehensive (loss) gain		(60,300	)		43,900

Total comprehensive loss	$	(2,111,900	)	$	(2,326,600	)
	,
Basic and Diluted loss per common share

Continuing operations	$	(0.20	)	$	(0.34	)
Discontinued operations	$	-		$	-
Consolidated operations	$	(0.20	)	$	(0.34	)

							Accumulated
					Additional		Other										Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Treasury Stock				Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Shares		Amount		Equity
Balance December 31, 2023		10,145,211	$	507,300	$	40,844,600	$	18,600		$	(27,485,100	)			$		$	13,885,400

Net loss		-		-		-		-			(2,051,600	)		-		-		(2,051,600	)

Issuance of Common Stock and Warrants, net of issuance costs (Note 7)		358,388		17,900		204,000		-			-			-		-		221,900

Fair value modification of warrants recorded as stock issuance costs		-		-		423,800		-			-			-		-		423,800

Foreign currency translation adjustment		-		-		-		(60,300	)		-			-		-		(60,300	)

Stock-based compensation		-		-		199,900		-			-			-		-		199,900

Balance March 31, 2024		10,503,599	$	525,200	$	41,672,300		(41,700	)	$	(29,536,700	)		-	$	-	$	12,619,100

	Common Stock				Paid-in		Comprehensive			Accumulated				Treasury Stock			Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Shares		Amount		Equity
Balance December 31, 2022		7,023,401	$	351,200	$	32,900,800	$	(8,400	)	$	(18,398,600	)		19,802	$	52,400	$	14,792,600

Net loss		-		-		-		-			(2,370,500	)		-		-		(2,370,500	)

Foreign currency translation adjustment		-		-		-		40,200			-			-		-		40,200

Unrealized holding gain on investment securities, net of tax		-		-		-		3,700			-			-		-		3,700

Stock-based compensation		-		-		602,600		-			-			-		-		602,600

Balance March 31, 2023		7,023,401	$	351,200	$	33,503,400		35,500		$	(20,769,100	)		19,802	$	52,400	$	13,068,600

	Fair Value Measurements as of March 31, 2024
	Level 1		Level 2		Level 3		Total
Investment securities	$	4,404,800	$	-	$	-	$	4,408,800
Total	$	4,404,800	$	-	$	-	$	4,408,800

	Fair Value Measurements as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Investment securities	$	4,928,700	$	-	$	-	$	4,928,700
Total	$	4,928,700	$	-	$	-	$	4,928,700

As of March 31, 2024:	Cost		Fair Value		Unrealized Holding Gain

Mutual funds	$	4,401,300	$	4,404,800	$	3,500
Total	$	4,401,300		4,404,800	$	3,500

As of December 31, 2023:	Cost		Fair Value		Unrealized Holding Gain (Loss)

Mutual funds	$	4,929,300	$	4,928,700	$	(600	)
Total	$	4,929,300	$	4,928,700	$	(600	)

	As of March 31,		As of December 31,
	2024		2023
Raw materials	$	3,530,800	$	3,436,300
Work-in-process		108,000		23,200
Finished goods		1,836,400		2,033,400
Total Inventories	$	5,475,200	$	5,492,900

Inventories - Current Asset	$	4,868,200	$	4,883,900
Inventories - Noncurrent Asset		607,000		609,000

As of March 31, 2024:	Useful Lives	Cost		Accumulated Amortization		Net
Technology, trademarks	3-10 yrs.	$	1,216,800	$	908,200	$	308,600
Trade names	3-6 yrs.		592,300		360,500		231,800
Websites	3-7 yrs.		210,000		210,000		-
Customer relationships	4-10 yrs.		372,200		200,500		171,700
Sublicense agreements	10 yrs.		294,000		294,000		-
Non-compete agreements	4-5 yrs.		1,060,500		846,500		21,400
Patents	5-7 yrs.		596,900		399,000		197,900
		$	4,342,700	$	3,218,700	$	1,124,000

As of December 31, 2023	Useful Lives	Cost		Accumulated Amortization		Net
Technology, trademarks	3-10 yrs.	$	1,216,800	$	870,900	$	345,900
Trade names	3-6 yrs.		592,300		341,600		250,700
Websites	3-7 yrs.		210,000		210,000		-
Customer relationships	4-10 yrs.		372,200		193,600		178,600
Sublicense agreements	10 yrs.		294,000		294,000		-
Non-compete agreements	4-5 yrs.		1,060,500		797,600		262,900
Patents	5-7 yrs.		595,800		384,000		211,800
		$	4,341,600	$	3,091,700	$	1,249,900

As of March 31, 2024	Amount
Remainder of fiscal year ending 2024	$	382,800
2025		371,700
2026		194,100
2027		92,800
2028		42,000
Thereafter		40,600
Total	$	1,124,000

	For the three months ended March 31,
	2024			2023

Weighted average number of common shares outstanding		10,436,647			7,003,599
Effect of dilutive securities:		-			-
Weighted average number of dilutive common shares outstanding		10,436,647			7,003,599

Basic and diluted loss per common share:
Continuing operations	$	(0.20	)	$	(0.34	)
Discontinued operations		-			-
Consolidated operations	$	(0.20	)	$	(0.34	)

Three Months Ended March 31, 2024:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	2,167,400	$	316,100		$	-		$	2,483,500

Foreign Sales		655,100		200,500						855,600

Income (Loss) From Operations		72,800		(1,601,800	)		(560,500	)		(2,089,500	)

Assets		6,283,100		4,858,600			4,404,800			15,546,500

Long-Lived Asset Expenditures		45,800		1,700			-			47,500

Depreciation and Amortization		21,400		166,700			-			188,100

Three Months Ended March 31, 2023:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	2,582,200	$	223,200		$	-		$	2,805,400

Foreign Sales		856,600		95,900						952,500

Income (Loss) From Operations		266,200		(2,072,500	)		(661,300	)		(2,467,600	)

Assets		7,810,900		5,174,100			3,379,000			16,364,000

Long-Lived Asset Expenditures		8,200		37,600			-			45,800

Depreciation and Amortization		23,300		164,600			-			187,900

	For the three months ended March 31,
	2024			2023
Net cash used in operating activities	$	(1,565,100	)	$	(1,744,700	)
Net cash provided by investing activities		480,600			893,700
Net cash provided by financing activities		645,700			-
Effect of changes in foreign currency exchange rates		(5,600	)		3,300
Decrease in cash and cash equivalents	$	(444,400	)	$	(847,700	)

For the three months ended March 31, 2024	Benchtop Laboratory Equipment			Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	72,800		$	(1,601,800	)	$	(560,500	)	$	(2,089,500	)

Other income(expense), net		(9,800	)		5,500			-			(4,300	)
Interest income		42,000			-			-			42,200
Total other income, net		32,400			5,500			-			37,900

Income (Loss) from operations before discontinued operations and income taxes	$	105,200		$	(1,596,300	)	$	(560,500	)	$	(2,051,600	)

For the three months ended March 31, 2023	Benchtop Laboratory Equipment			Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	266,200		$	(2,072,500	)	$	(661,300	)	$	(2,467,600	)

Other income (expense), net		(1,800	)		11,000			77,100			86,300
Interest income		-			-			9,400			9,400
Total other (expense) income, net		(1,800	)		11,000			86,500			95,700

Income (Loss) from operations before discontinued operations and income taxes	$	264,400		$	(2,061,500	)	$	(574,800	)	$	(2,371,900	)

Exhibit Number		Description of document
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	SCIENTIFIC INDUSTRIES, INC. (Registrant)

Date: May 15, 2024	By:	/s/ Helena R. Santos
		Helena R. Santos
		President, Chief Executive Officer, and Treasurer

	SCIENTIFIC INDUSTRIES, INC. (Registrant)

Date: May 15, 2024	By:	/s/ Reginald Averilla
		Reginald Averilla
		Chief Financial Officer