Company Overview - The company develops and sells high-performance water filtration solutions primarily for medical and commercial markets[84]. - The company previously held a majority stake in Specialty Renal Products, which was liquidated in March 2023 due to capital exhaustion, with an outstanding loan balance of approximately 1.5million[87].−ThecompanyenteredintoanewsupplyagreementinJanuary2023withapartnertobetheexclusivedistributorforfood,beverage,andhospitalityindustries[110].−ThecompanyenteredintoaLicenseandSupplyAgreementwithMedicaS.p.A.forthemarketingandsaleoffiltrationproductsbasedonMedica′sultrafiltrationtechnology[151].MedicalProducts−Medicalwaterfilters,classifiedasultrafilters,capturecontaminantsassmallas0.005microns,minimizingexposuretovariouspathogens[85].−ThecompanyhasFDA510(k)clearanceformultiplemedicaldeviceproducts,includingtheDSU−HandSSU−Hultrafilters,withproductlifespansofupto6monthsinhospitalsettings[100].−Thereareapproximately7,100dialysisclinicsintheU.S.servicingaround500,000patientsannually,withover100,000hemodialysismachinesinoperation[105].−Thecompany’scommercialproductsincludetheNanoGuardultrafilter,whichprovidesdual−stageretentionofparticleslargerthan15,000Daltons[113].FinancialPerformance−Totalnetrevenuesdecreasedby0.2 million, or 6%, for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to underperformance in programmatic business[121]. - Consolidated gross margin increased to approximately 61% for the three months ended September 30, 2024, up from approximately 59% in the same period of 2023, driven by favorable pricing terms[122]. - Selling, general and administrative expenses decreased by 416,000,or1917,000 for the three months ended September 30, 2024, due to a reduction in bonus accrual[124]. - Net income for the three months ended September 30, 2024, was 183,000,comparedtoanetlossof182,000 in the same period of 2023, representing a turnaround of 365,000[120].−Totalnetrevenuesdecreasedby0.7 million, or 6%, for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to decreased revenue from emergency response orders[127]. - Consolidated gross margin for the nine months ended September 30, 2024, was approximately 61%, up from approximately 58% in the same period of 2023, attributed to favorable pricing terms and reduced shipping expenses[128]. - Net cash used in operating activities was 1.8millionfortheninemonthsendedSeptember30,2024,comparedtonetcashprovidedbyoperatingactivitiesofapproximately1.1 million for the same period in 2023[140]. - Cash and cash equivalents decreased to 2.457millionasofSeptember30,2024,downfrom4.307 million as of December 31, 2023[136]. - The company had an accumulated deficit of $144.7 million as of September 30, 2024, indicating potential ongoing operating losses until profitability is achieved[134]. Risks and Compliance - The company maintains effective disclosure controls and procedures as evaluated by the Chief Executive Officer and Chief Financial Officer[148]. - There were no changes in internal control over financial reporting that materially affected the company's reporting[149]. - The company is subject to risks related to minimum purchase obligations under the License and Supply Agreement, which could impact financial results[150]. - Failure to meet minimum purchase commitments could result in termination of the agreement, adversely affecting the company's ability to supply filtration products[152]. - The company anticipates that water safety management programs currently in medical facilities will migrate to commercial markets, potentially increasing future revenue[111]. Operational Challenges - The company’s results of operations have fluctuated significantly, influenced by market acceptance of products and expense management[118].
