Psychemedics(PMD) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for the quarter ended September 30, 2024, were $5,175 thousand, a decrease of 9.2% compared to $5,704 thousand for the same period in 2023[6] - Gross profit for the quarter was $2,039 thousand, down from $2,091 thousand year-over-year, reflecting a gross margin of 39.3%[6] - Operating loss for the quarter was $(595) thousand, an improvement from $(1,107) thousand in the same quarter last year[6] - Net loss for the quarter was $(535) thousand, compared to a net loss of $(2,099) thousand in the prior year, indicating a significant reduction in losses[6] - Operating expenses for the quarter were $2,634 thousand, down from $3,198 thousand in the same period last year, reflecting cost control measures[6] - The net loss for the nine months ended September 30, 2023, was $3,209,000, compared to a net loss of $2,050,000 for the same period in 2024[13] - Total revenue for the three months ended September 30, 2024, was $5,175 thousand, a decrease of 9.2% compared to $5,704 thousand for the same period in 2023[51] - Total revenue for the nine months ended September 30, 2024, was $15,260 thousand, a decrease of 10.8% compared to $17,100 thousand for the same period in 2023[51] Assets and Liabilities - Total current assets decreased to $6,047 thousand as of September 30, 2024, down from $6,805 thousand at December 31, 2023[4] - Total liabilities decreased to $4,389 thousand from $5,654 thousand at the end of 2023, showing improved financial stability[4] - Shareholders' equity as of September 30, 2024, was $5,446 thousand, down from $6,672 thousand at December 31, 2023, primarily due to accumulated deficit increases[4] - Cash and cash equivalents decreased to $1,405 thousand from $1,964 thousand at the end of 2023, indicating a cash flow challenge[4] - Cash and cash equivalents at the end of the period were $1,405,000, down from $1,964,000 at the beginning of the period[13] Stock and Shareholder Information - The company reported a weighted average of 5,894 shares outstanding for the quarter, compared to 5,755 shares in the same quarter last year[6] - The Company had a total of 6,470,000 common shares outstanding as of September 30, 2023[11] - The Company plans to sell up to 1,595,744 shares of Common Stock at a price of $2.35 per share, aiming for an aggregate purchase price of up to $3,750,000[21] - Approximately 1.3 million shares of common stock, or about 21% of the currently outstanding shares, are expected to be cashed out in the transaction, costing the company approximately $3.0 million[19] Expenses and Cost Management - The company reported stock-based compensation of $401,000 for the three months ended September 30, 2023[11] - The Company recorded stock-based compensation of $228,000 for the three months ended September 30, 2024, compared to $401,000 for the same period in 2023[32] - The company reported depreciation and amortization expenses of $1,394,000 for the nine months ended September 30, 2023[13] - The operating lease expense for the three and nine months ended September 30, 2024, was $150 thousand and $628 thousand, respectively[43] Cash Flow and Financing - The cash flows from operating activities showed a net cash used of $731,000 for the nine months ended September 30, 2023[13] - The Company expects to fund the costs of the transaction using proceeds from a stock sale and cash on hand[19] - As of September 30, 2024, the Company has $1.4 million in cash on hand, which, along with future operating profits, is expected to fund working capital requirements for at least the next 12 months[26] Lease and Contractual Obligations - The Company has three operating leases for office and laboratory space, with renewal options evaluated regularly[42] - As of September 30, 2024, the Company recognized a right-of-use (ROU) asset of $959 thousand and an operating lease liability of $995 thousand, with a weighted average discount rate of 3.9% and a lease term of 2.25 years[43] - The Company recognized a ROU equipment asset of $88 thousand and a financing lease liability of $89 thousand, with a weighted average discount rate of 9.0% and a lease term of 2.9 years[46] - The Company has a remaining balance of $167,000 due on or before December 31, 2024, related to a previously disclosed contract dispute[41] Interest and Tax Expenses - The interest expense on outstanding debt under the Loan Agreement was $1 thousand and $5 thousand for the three and nine months ended September 30, 2024, with a weighted average interest rate of 3.8%[48] - The Company accrued $12 thousand in interest expenses related to the Insurance Financing Note for the three and nine months ended September 30, 2024, with a balance of $418 thousand as of September 30, 2024[50] - The effective tax rate for the three and nine months ended September 30, 2024, differs from the statutory rate due to a full valuation allowance on net deferred tax assets[36] Customer Concentration - The Company had no customers representing over 10% of revenue for the nine months ended September 30, 2024, compared to one customer representing 14% for the same period in 2023[52] - The Company had two customers representing 21% and 20% of total accounts receivable as of September 30, 2024[52]