S-1/A: Scientific Industries Files Amendment No. 2 to Form S-1/A for Resale of Common Stock and Warrant Shares

Scientific Industries has filed an amendment to its registration statement for the resale of up to 8,035,000 shares of common stock, including shares issuable upon exercise of warrants, by selling stockholders.

Summary

• Scientific Industries, Inc. has filed Amendment No. 2 to Form S-1/A with the SEC to register the resale of up to 8,035,000 shares of its common stock.
• This includes 3,500,000 shares issued in a private placement on January 17, 2024, and 4,535,000 shares issuable upon the exercise of warrants also sold in that private placement.
• The selling stockholders will sell the shares from time to time, and Scientific Industries will not receive any proceeds from the sale of shares by the selling stockholders, except upon exercise of the warrants.
• The company's common stock trades on the Over-the-Counter Bulletin Board under the symbol SCND, with the last reported sale price on May 22, 2024, at $1.80 per share.
• Scientific Industries is engaged in the design, manufacture, and marketing of benchtop laboratory equipment and bioprocessing systems.
• The company operates through two segments: Benchtop Laboratory Equipment and Bioprocessing Systems.
• The company believes there are greater growth opportunities in the Bioprocessing Systems segment, as part of a large and expanding synthetic biology market sector worldwide.
• The company incurred net losses of $2,089,500 for the three months ended March 31, 2024.
• As of March 31, 2024, the company had an accumulated deficit of $29,536,700.

Sentiment

Score: 4

Explanation: The document is largely neutral, presenting factual information about the company's operations and financial condition. However, the presence of ongoing losses, accumulated deficit, and the need for potential capital raises contribute to a slightly negative sentiment.

Positives

• The company believes there are greater growth opportunities in the Bioprocessing Systems segment, as part of a large and expanding synthetic biology market sector worldwide.
• The company is taking steps towards establishing a commercialization strategy of these products, with the initial product launch of our DOTS software platform in September 2022 followed by the Multi-Parameter Sensor in November 2023, which is being introduced and sold to existing and new customers.

Negatives

• The company has limited financial resources and may need to raise additional funding.
• The company has a history of losses and will likely incur future losses during the next few years as it attempts to grow and develop its bioprocessing sector.
• The company incurred net losses of $2,089,500 for the three months ended March 31, 2024.
• As of March 31, 2024, the company had an accumulated deficit of $29,536,700.
• The Common Stock of the Company is traded on the Over-the-Counter Bulletin Board and, historically, has been thinly traded.
• One benchtop laboratory equipment product accounts for a substantial portion of revenues.

Risks

• The company has limited financial resources and may need to raise additional funding.
• The company has a history of losses and will likely incur future losses during the next few years as it attempts to grow and develop its bioprocessing sector.
• The commercial success of the company's bioprocessing products will largely depend upon attaining significant market acceptance.
• If the company is unable to obtain and maintain patent and other intellectual property protection for any of its new bioprocessing products, its competitors could develop and commercialize similar products.
• If the company loses the services of key management personnel, it may not be able to execute its business strategy effectively.
• The company's future depends heavily on international operations.
• The company may be adversely affected by global health pandemics, including the COVID-19 Pandemic.
• The company is heavily dependent on outside suppliers for the components of its products.
• The company's ability to compete depends in part on its ability to secure and maintain proprietary rights to its products.

Future Outlook

The company anticipates retaining future earnings for the development, operation, and expansion of its business and does not anticipate declaring or paying any cash dividends for the foreseeable future.

Management Comments

• Management is in plans to obtain such resources for the Company by obtaining capital through third party equity.
• However, management cannot provide any assurances that the Company will be successful in accomplishing its plans.
• As a result of the above actions, the Company believes that it will be able to meet its cash flow needs during the next 12 months from cash and investment securities on-hand, cash derived from its Benchtop Laboratory Equipment Operations, and availability of the Companys line of credit.

Industry Context

The Benchtop Laboratory Equipment industry is a highly competitive mature industry. The Companys Bioprocessing Systems operations is a participant in the laboratory-scale sector of the larger bioprocessing products industry, which is dominated by several companies that are significantly larger, and the Companys bioprocessing operations are still in the start-up phase of operations.

Comparison to Industry Standards

• The principal competitors are substantially larger with much greater financial, production and marketing resources than the Company.
• There are constant new entrants into the vortex mixer market, including those offering products imported from China, which the Company is unable to compete with on price.
• The Torbal line of products is also a small market participant in its industry with significant competition from well-known brands.

Related Party Transactions

• Daniel Donadille is the President and Chief Executive Officer of the Companys Bioprocessing Operations.
• John A. Moore was elected to the Companys Board of Directors on January 23, 2019, and became the Chairman of the Board of Directors on January 29, 2020.
• Helena Santos has been a Director of the Company and the President, and Chief Executive Officer, for the past three years.
• Christopher Cox has been a Director of the Company since February 26, 2021.
• Jurgen Schumacher (Science Holding Gmbh) Dr. Jurgen Schumacher has been a Director of the Company since April 30, 2021.
• John Nicols John Nicols has been a Director of the Company since March 4, 2024.
• Marcus Frampton Marcus Frampton is a former Director of the Company from March 6, 2019 through March 8, 2024.

Stakeholder Impact

• The resale of shares may impact the share price and shareholder value.
• The company's ability to secure additional funding will impact its ability to execute its business strategy and develop new products.
• The company's financial performance will impact its ability to retain and attract employees.

Next Steps

• The selling stockholders may sell or otherwise dispose of some, all or none of their shares.
• The company will use any proceeds from the exercise price of the warrants for ordinary course working capital needs.
• The company has agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement and (2) one year from the date of this prospectus.

Key Dates

Keywords

common stock, warrants, bioprocessing systems, benchtop laboratory equipment, private placement, resale, SCND, scientific industries