1. Nature of operations
The Company is a veterinary health company creating point-of-care
diagnostics and therapeutics products for dogs and cats that
focuses on the needs of the veterinarians themselves. The Company
consists of the parent company, Zomedica Corp and its wholly-owned
U.S subsidiary, Zomedica Inc. and its international
subsidiaries.
The impact of the novel strain of coronavirus (“COVID-19”)
Since the first quarter of 2020, the world has been impacted by the
spread of a novel strain of coronavirus, its variants, and the
disease that they cause known as COVID-19. The continued presence
of COVID-19 has resulted in changes in the macro-economic
environment including disruptions in supply chain, labor
disruptions, an inability to manufacture, an inability to sell to
customers, declines in customer demand, inflationary pressures, and
an impaired ability to access credit and capital markets, among
other things.
The COVID-19 pandemic materially and adversely affected the
development and commercialization of our TRUFORMA® platform and the
initial five assays. In response to the pandemic, our development
partner reduced the number of employees working in its facilities
for a period of time which delayed the completion and verification
of the five initial TRUFORMA assays and the manufacturing of
commercial quantities of the TRUFORMA platform. Veterinary
hospitals and clinics that agreed to participate in the validation
of our initial TRUFORMA assays either shut down for a period of
time or limited their operations to those involving only
life-threatening conditions, which we have mitigated to a certain
extent with our recent ability to successfully complete remote
installations. Potential customers, at times, restricted access to
their facilities which affected and may continue to affect our
ability to perform on-site demonstrations and other marketing
activities.
The extent to which the COVID-19 pandemic may impact our business
will depend on future developments, which are highly uncertain and
cannot be predicted with confidence, such as the duration of the
outbreak, the spread and severity of COVID-19, and the
effectiveness of governmental actions in response to the
pandemic.
To-date, the emergence of new variants has not caused significant
modification to business operations. We continue to install
remotely, if potential customers restrict access to their
facilities. We intend to continue development of new assays, both
for equine indications of our current and planned assays, and for
various additional disease states affecting canine, feline, and
equine patients in the future.
2. Basis of preparation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”) for the presentation of
interim financial statements and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, the unaudited
financial statements do not include all the information and
footnotes necessary for a comprehensive presentation of the
financial position, results of operations and cash flows for the
periods presented. In the opinion of management, the unaudited
financial statements include all the normal recurring adjustments
that are necessary for a fair presentation of the financial
position, results of operations and cash flows for the periods
presented. Operating results for the three and nine months ended
September 30, 2022 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 2022.
These unaudited financial statements should be read in combination
with the other Notes in this section; “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
appearing in Item 2; and the Consolidated Financial Statements,
including the Notes to the Consolidated Financial Statements,
included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2021. The Consolidated Balance Sheet as of
December 31, 2021 was derived from audited financial
statements.
3. Significant accounting policies
Change in accounting for TRUFORMA instruments
As of September 30, 2022, the company
changed its policy of recognizing TRUFORMA instruments as inventory
and reclassified $3,364
to property and equipment, depreciable
over 10
years. The instruments will
remain undepreciated until they are placed with
customers.