Psychemedics Corporation reported its financial results for the three and nine months ended September 30, 2024, revealing a decline in revenue and ongoing operational challenges. For the third quarter of 2024, revenues totaled $5.175 million, a decrease of 9% from $5.704 million in the same period of 2023. For the nine months ended September 30, 2024, revenues were $15.260 million, down 11% from $17.100 million in the prior year. The decline in revenue was primarily attributed to lower volumes from the company's core business, particularly in testing revenue, which fell to $4.421 million for the third quarter and $12.900 million for the nine months, compared to $4.864 million and $14.416 million, respectively, in 2023.

Despite the revenue drop, the company managed to reduce its operating expenses. Total operating expenses for the third quarter of 2024 were $2.634 million, down from $3.198 million in the same quarter of 2023. For the nine-month period, operating expenses decreased to $7.774 million from $8.408 million. This led to a reduced operating loss of $(595,000) for the third quarter, compared to $(1,107,000) in 2023, and a slight increase in the nine-month operating loss to $(2.061 million) from $(2.053 million).

Net losses also improved, with a net loss of $(535,000) for the third quarter of 2024, significantly better than the $(2.099 million) loss reported in the same quarter of 2023. For the nine months, the net loss was $(2.050 million), down from $(3.209 million) in the previous year. The basic and diluted net loss per share for the third quarter was $(0.09), compared to $(0.36) in 2023.

As of September 30, 2024, Psychemedics had total assets of $9.835 million, down from $12.326 million at the end of 2022. Current assets were $6.047 million, with cash and cash equivalents at $1.405 million. Total liabilities decreased to $3.793 million from $4.709 million at the end of 2022, while total shareholders' equity fell to $5.446 million from $6.672 million.

Strategically, the company is planning a reverse/forward stock split, subject to stockholder approval at the Annual Meeting on November 25, 2024. This transaction is expected to involve cashing out approximately 1.3 million shares at $2.35 per share, costing the company about $3.0 million plus transaction expenses. Additionally, Psychemedics entered a stock purchase agreement to sell up to 1,595,744 shares at the same price, with proceeds intended for working capital and to fund the cash-out from the stock split. The company anticipates annual savings of approximately $845,000 by terminating its public company reporting obligations.