SCND 10-Q

Scientific Industries Inc (SCND)

10-Q 2024-11-14 For: 2024-09-30

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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	16

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19

Item 4.	CONTROLS AND PROCEDURES	19

PART II - Other Information

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

SIGNATURE		23

	September 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	563,500		$	796,100
Investment securities		2,464,300			4,928,700
Trade accounts receivable, less allowance for doubtful accounts of $15,600 at September 30, 2024 and December 31, 2023		1,357,400			1,157,100
Inventories		4,788,300			4,883,900
Income tax receivable		73,600			161,400
Prepaid expenses and other current assets		405,100			413,500
Total current assets		9,652,200			12,340,700

Property and equipment, net		970,500			1,082,300
Goodwill		115,300			115,300
Other intangible assets, net		879,000			1,249,900
Inventories		597,100			609,000
Operating lease right-of-use assets		1,033,300			1,273,900
Other assets		59,400			59,400
Total assets	$	13,306,800		$	16,730,500

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	615,300		$	711,700
Accrued expenses		623,600			777,900
Contract liabilities		44,300			23,600
Lease liabilities, current portion		327,300			324,100
Total current liabilities		1,610,500			1,837,300

Lease liabilities, less current portion		761,700			1,007,800
Total liabilities		2,372,200			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 September 30, 2024 and December 31, 2023		525,200			507,300
Additional paid-in capital		42,322,100			40,844,600
Accumulated other comprehensive gain		87,700			18,600
Accumulated deficit		(32,000,400	)		(27,485,100	)

Total shareholders’ equity		10,934,600			13,885,400

Total liabilities and shareholders’ equity	$	13,306,800		$	16,730,500

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Revenues	$	2,769,100		$	2,585,500		$	7,899,900		$	8,373,400

Cost of revenues		1,405,900			1,404,500			4,203,500			4,504,400

Gross profit		1,363,200			1,181,000			3,696,400			3,869,000

Operating expenses:
General and administrative		1,019,000			896,300			3,602,800			3,765,500
Selling		919,600			1,614,200			2,718,000			4,650,800
Research and development		683,200			895,900			2,059,900			2,371,900

Total operating expenses		2,621,800			3,406,400			8,380,700			10,788,200

Loss from operations		(1,258,600	)		(2,225,400	)		(4,684,300	)		(6,919,200	)

Other income:
Other income, net		38,400			5,300			32,100			95,700
Interest income		40,100			19,000			136,900			65,400
Total other income, net		78,500			24,300			169,000			161,100

Loss from continuing operations before income tax expense		(1,180,100	)		(2,201,100	)		(4,515,300	)		(6,758,100	)

Income tax expense		-			-			-			108,800

Loss from continuing operations		(1,180,100	)		(2,201,100	)		(4,515,300	)		(6,866,900	)

Discontinued operations:

Gain from discontinued operations, net of tax	$	-		$	-			-			3,300

Net loss	$	(1,180,100	)		(2,201,100	)	$	(4,515,300	)	$	(6,863,600	)

Comprehensive gain (loss):
Unrealized holding gain on investment securities, net of tax		-			-			-			1,600
Foreign currency translation (loss) gain		113,600			(95,700	)		69,100			(85,600	)
Comprehensive gain (loss)		113,600			(95,700	)		69,100			(84,000	)

Total comprehensive loss	$	(1,066,500	)	$	(2,296,800	)	$	(4,446,200	)	$	(6,947,600	)

Basic and Diluted loss per common share

Continuing operations	$	(0.11	)	$	(0.31	)	$	(0.43	)	$	(0.98	)
Discontinued operations	$	-			-		$	-		$	-
Consolidated operations	$	(0.11	)		(0.31	)	$	(0.43	)	$	(0.98	)

							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

Net loss		-		-		-		-			(1,283,600	)		-		-		(1,283,600	)

Foreign currency translation adjustment		-		-		-		15,800			-			-		-		15,800

Stock-based compensation		-		-		330,300		-			-			-		-		330,300

Balance June 30, 2024		10,503,599	$	525,200	$	42,002,600		(25,900	)	$	(30,820,300	)		-	$	-	$	11,681,600

Net loss		-		-		-		-			(1,180,100	)		-		-		(1,180,100	)

Foreign currency translation adjustment		-		-		-		113,600			-			-		-		113,600

Stock-based compensation		-		-		319,500		-			-			-		-		319,500

Balance September 30, 2024		10,503,599	$	525,200	$	42,322,100		87,700		$	(32,000,400	)		-	$	-	$	10,934,600

	Fair Value Measurements as of September 30, 2024
	Level 1		Level 2		Level 3		Total
Investment securities - Mutual funds	$	2,464,300	$	-	$	-	$	2,464,300
Total	$	2,464,300	$	-	$	-	$	2,464,300

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

As of September 30, 2024:	Cost		Fair Value		Unrealized Holding Gain

Mutual funds	$	2,420,100	$	2,464,300	$	44,200
Total	$	2,420,100		2,464,300	$	44,200

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

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

	As of September 30,		As of December 31,
	2024		2023
Raw materials	$	3,369,500	$	3,436,300
Work-in-process		61,000		23,200
Finished goods		1,954,900		2,033,400
Total Inventories	$	5,385,400	$	5,492,900

Inventories - Current Asset	$	4,788,300	$	4,883,900
Inventories - Noncurrent Asset		597,100		609,000

As of September 30, 2024:	Useful Lives	Cost		Accumulated Amortization		Net
Technology, trademarks	3-10 yrs.	$	1,216,800	$	982,800	$	234,000
Trade names	3-6 yrs.		592,300		398,400		193,900
Websites	3-7 yrs.		210,000		210,000		-
Customer relationships	4-10 yrs.		372,200		214,300		157,900
Sublicense agreements	10 yrs.		294,000		294,000		-
Non-compete agreements	4-5 yrs.		1,060,500		944,300		116,200
Patents	5-7 yrs.		605,600		428,600		177,000
		$	4,351,400	$	3,472,400	$	879,000

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 September 30, 2024	Amount
Remainder of fiscal year ending 2024	$	130,100
2025		373,500
2026		195,900
2027		94,500
2028		43,700
Thereafter		41,300
Total	$	879,000

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2024			2023			2024			2023

Weighted average number of common shares outstanding		10,503,599			7,003,599			10,443,029			7,003,599
Effect of dilutive securities:		-			-			-			-
Weighted average number of dilutive common shares outstanding		10,503,599			7,003,599			10,443,029			7,003,599

Basic and diluted loss per common share:
Continuing operations	$	(0.11	)	$	(0.31	)	$	(0.43	)	$	0.98	)
Discontinued operations		-			-			-			-
Consolidated operations	$	(0.11	)	$	(0.31	)	$	(0.43	)	$	(0.98	)

Three Months Ended September 30, 2024:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	2,316,600	$	452,500		$	-		$	2,769,100

Foreign Sales		562,000		241,900						803,900

Income (Loss) From Operations		258,700		(1,200,000	)		(317,300	)		(1,258,600	)

Assets		6,114,600		4,697,900			2,464,300			13,306,800

Long-Lived Asset Expenditures		2,900		900			-			3,800

Depreciation and Amortization		21,900		166,200			-			188,100

Three Months Ended September 30, 2023:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	2,161,300	$	424,200		$	-		$	2,585,500

Foreign Sales		625,000		242,900						867,900

Income (Loss) From Operations		73,600		(2,105,500	)		(193,500	)		(2,225,400	)

Assets		7,137,200		5,101,300			809,600			13,048,100

Long-Lived Asset Expenditures		-		11,700			-			11,700

Depreciation and Amortization		20,700		167,500			-			188,200

Nine Months Ended September 30, 2024:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	6,765,900	$	1,134,000		$	-		$	7,899,900

Foreign Sales		1,779,100		648,100						2,427,200

Income (Loss) From Operations		546,000		(4,094,700	)		(1,135,600	)		(4,684,300	)

Assets		6,144,600		4,697,900			2,464,300			13,306,800

Long-Lived Asset Expenditures		72,800		3,200			-			76,000

Depreciation and Amortization		64,700		500,700			-			565,400

Nine Months Ended September 30, 2023:	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate And Other			Consolidated
Revenues	$	7,357,800	$	1,015,600		$	-		$	8,373,400

Foreign Sales		2,204,800		478,700						2,683,500

Income (Loss) From Operations		555,200		(5,972,600	)		(1,501,800	)		(6,919,200	)

Assets		7,137,200		5,101,300			809,600			13,048,100

Long-Lived Asset Expenditures		25,200		92,700			-			117,900

Depreciation and Amortization		64,400		502,300			-			566,700

For the three months ended September 30, 2024	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	258,700	$	(1,200,000	)	$	(317,300	)	$	(1,258,600	)

Other income, net		2,100		11,400			24,900			38,400
Interest income		-					40,100			40,100
Total other income, net		2,100		11,400			65,000			78,500

Income (Loss) from operations before discontinued operations and income taxes	$	260,800	$	(1,188,600	)	$	(252,300	)	$	(1,180,100	)

For the three months ended September 30, 2023	Benchtop Laboratory Equipment		Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	73,600	$	(2,105,500	)	$	(193,500	)	$	(2,225,400	)

Other income (expense), net		5,300		(1,800	)		1,800			5,300
Interest income		-		-			19,000			19,000
Total other income (expense), net		5,300		(1,800	)		20,800			24,300

Income (Loss) from operations before discontinued operations and income taxes	$	78,900	$	(2,107,300	)	$	(172,700	)	$	(2,201,100	)

For the nine months ended September 30, 2024	Benchtop Laboratory Equipment			Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	546,000		$	(4,094,700	)	$	(1,135,600	)	$	(4,684,300	)

Other income (expense), net		(5,100	)		22,500			14,700			32,100
Interest income		-			-			136,900			136,900
Total other income (expense), net		(5,100	)		22,500			151,600			169,000

Income (Loss) from operations before discontinued operations and income taxes	$	540,900		$	(4,072,200	)	$	(984,000	)	$	(4,515,300	)

For the nine months ended September 30, 2023	Benchtop Laboratory Equipment			Bioprocessing Systems			Corporate			Consolidated
Income (Loss) from Operations	$	555,200		$	(5,972,600	)	$	(1,501,800	)	$	(6,919,200	)

Other income, net		7,700			9,300			78,700			95,700
Interest income		-			-			65,400			65,400
Total other income, net		7,700			9,300			144,100			161,100

Income (Loss) from operations before discontinued operations and income taxes	$	562,900		$	(5,963,300	)	$	(1,357,700	)	$	(6,758,100	)

	For the nine months ended September 30,
	2024			2023
Net cash used in operating activities	$	(3,304,600	)	$	(4,821,600	)
Net cash provided by investing activities		2,429,900			3,400,500
Net cash provided by financing activities		645,700			13,300
Effect of changes in foreign currency exchange rates		(3,600	)		(3,900	)
Decrease in cash and cash equivalents	$	(232,600	)	$	(1,411,700	)

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: November 14, 2024	By:	/s/ Helena R. Santos
		Helena R. Santos
		President, Chief Executive Officer, and Treasurer

	SCIENTIFIC INDUSTRIES, INC. (Registrant)

Date: November 14, 2024	By:	/s/ Reginald Averilla
		Reginald Averilla
		Chief Financial Officer