Zomedica (ZOM) - 2024 Q3 - Quarterly Report

Revenue and Profitability - Revenue for the quarter ended September 30, 2024, included consumables and capital sales associated with Assisi®, PulseVet®, TRUFORMA®, TRUVIEW™, and VetGuardian® products[132] - Revenue for the three months ended September 30, 2024, was $6,997 million, an increase of$650 million or 10% compared to the same period in 2023[169] - Revenue for the nine months ended September 30, 2024, was $19,390 million, an increase of$1,541 million or 9% compared to the same period in 2023[169] - Gross profit margin for the three months ended September 30, 2024, was 72%, compared to 69% for the same period in 2023[173] Expenses - Research and development expense for the three months ended September 30, 2024, was $1,845 million, an increase of$978 million or 113% compared to the same period in 2023[178] - Selling and marketing expense for the three months ended September 30, 2024, was $3,890 million, an increase of$562 million or 17% compared to the same period in 2023[179] - General and administrative expenses included significant public company costs such as stock exchange fees and compliance costs[134] Net Loss and Cash Flow - Net loss for the three months ended September 30, 2024, was $6,697 million, an increase of$6,206 million or 1264% compared to the same period in 2023[182] - Cash used in operating activities for the nine months ended September 30, 2024, was $19,105 million, an increase of$8,145 million or 74% compared to the same period in 2023[184] - Cash provided by investing activities for the nine months ended September 30, 2024, was $15,938 million, an increase of$10,532 million or 195% compared to the same period in 2023[185] Goodwill and Valuation - A goodwill impairment charge of $16,024 was recorded for the three and nine months ended September 30, 2024, due to fair values of certain reporting units being below their carrying amounts[157] - The fair value of the PulseVet reporting unit exceeded its carrying amount, including goodwill, by 56$1 billion[140] - The company recorded a full valuation allowance against Canadian deferred tax assets due to uncertainty in realizing tax benefits[142] - The company continues to monitor regulatory developments related to the Inflation Reduction Act to assess their potential impact on tax rates and financial results[141] - Deferred tax assets for U.S. federal income tax purposes amount to $15,214, with non-capital loss carryforwards for Canada at$9,581, expiring in fiscal year 2035[192] Cash Position and Future Needs - As of September 30, 2024, the company had an accumulated deficit of $210,721 and working capital of$79,206[187] - The company believes existing cash is sufficient to cover short-term cash requirements, including fixed obligations and ongoing clinical studies[188] - Long-term cash requirements have not changed materially since the 2023 Form 10-K, with ongoing evaluations potentially affecting cash needs[191] Stock-Based Compensation - Stock-based compensation is calculated using the Black-Scholes Option Pricing Model and is expensed over the vesting period of the options[145] - The company adopted a Stock Appreciation Rights Plan allowing for the grant of SARs up to 10% of issued common stock[196] Research and Development - Research and development expenses focused on leveraging the acquisition of Qorvo for new assay development and exploring new market opportunities[135] Currency and Subsidiaries - The functional currency for the company's subsidiaries in the U.S., Switzerland, and Canada is the U.S. dollar, while the Japanese subsidiary uses the Japanese Yen[143]