ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS

9 Months Ended

Sep. 30, 2021

ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS [Abstract]

ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS

NOTE 12 — ASSET IMPAIRMENT, RESTRUCTURING, SEVERANCE AND RELATED COSTS:

The Company recorded an impairment loss of $1.3 million during the second quarter of 2021, as the result of its write-off of the intangible assets, net, leasehold improvements, net and right-of-use assets for leases, net associated with its Malaysian operations that underwent a retrenchment during the second quarter of 2020. During the second quarter of 2021, the Company was informed that the World Health Organization had prioritized its review of prequalification of the manufacture of the Company’s HIV 1/2 STAT-PAK Assay on its U.S. automated manufacturing processes, which would reduce the Company’s reliance on manual labor that otherwise could have been performed at the Malaysian facilities had the Company re-started operations there. During July 2021, the World Health Organization approved the change notification. The products produced on the Company’s automated and manual production lines at any time depend on, among other things, the timing of customer orders and the mix of products being produced.

In light of the uncertainty of the timing and any receipt of those regulatory approvals, the timing of progress on and results of clinical trial programs, and the timing and any receipt of product orders from the commercialization of the COVID-19 Diagnostic Test Systems and other diagnostic test systems both within and outside the United States, during the second quarter of 2021, the Company engaged the services of an independent financial advisory firm (the “Financial Advisor”). The Financial Advisor worked with management to develop a forecast model to assess the amount and timing of the Company’s liquidity needs, assuming various business cases, and together with legal counsel advised the Company regarding alternative approaches to enhancing its liquidity position, participating in discussions with the Lender, and related matters. During the three and nine months ended September 30, 2021, the Company incurred $0.4 and $1.1 million, respectively, related to these restructuring matters.

In order to address challenging economic conditions and implement its business strategy, in the first quarter of 2021 the Company continued to execute a program to reduce operating expenses and better align its costs with revenues, including by eliminating positions that were no longer aligned with its strategy, and recognized severance charges of $0.1 million.

The table below represents the total costs by category:

	For the three months ended September 30, 2021		For the nine months ended September 30, 2021
Severance	$	-	$	83,087
Restructuring costs		396,740		1,083,951
Asset impairment		-		1,273,945
	$	396,740	$	2,440,983