PMD Psychemedics Corporation

 

 

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

 

PSYCHEMEDICS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(UNAUDITED)

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

PSYCHEMEDICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(UNAUDITED)

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

PSYCHEMEDICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except per share amounts)

(UNAUDITED)

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

PSYCHEMEDICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1.	Basis of Presentation

 

The interim condensed consolidated financial statements of Psychemedics Corporation (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022, included in the Company's 2022 Annual Report on Form 10-K (“10-K”), as filed with the SEC.

 

The accompanying condensed consolidated financial statements are unaudited but, in the opinion of management, include all adjustments necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of December 31, 2022, has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm, but does not include all the information and footnotes required for complete annual financial statements. The Company’s comprehensive (loss)/income is equal to its net (loss)/income for all periods presented.

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and six months ended June 30, 2023, may not be indicative of the results that may be expected for the year ending December 31, 2023, or any other period.

 

Unless the context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer to Psychemedics Corporation and its wholly-owned consolidated subsidiaries.

 

2.	Financial Information

 

Liquidity and Management’s Plans

 

At June 30, 2023, the Company’s principal sources of liquidity included approximately $2.4 million of cash and cash equivalents. Management currently believes that such funds, together with future operating profits, should be adequate to fund anticipated working capital requirements, including equipment financing obligations, and capital expenditures for at least the next 12 months. Depending upon the Company’s results of operations, its future capital needs and available marketing opportunities, the Company may use various financing sources to raise additional funds. Such sources could include but are not limited to, issuance of common stock, debt financing, lines of credit, or equipment leasing, although there is no assurance that such financings will be available to the Company on terms it deems acceptable, if at all.

 

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PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2.	Financial Information (continued)

 

Accounts Receivable

 

The Company believes its allowance for credit losses related to its accounts receivable remained adequate as of June 30, 2023, due to the essential nature of its customers, as well as the diversity of its large customer base. While the Company anticipates there could be an increase in the aging of its accounts receivable, the Company does not anticipate a significant increase in default risk.

 

Recently Adopted Accounting Pronouncements

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments. The Company adopted ASU 2016-13 in the first quarter of 2023 utilizing the modified retrospective transition method. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 has not had and is not expected to have a material impact on the condensed consolidated financial statements and disclosures.

 

3.	Fair Value Measurements

         

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

 

						Fair Value Measurements at Reporting Date Using
						Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		June 30, 2023
Assets:
Cash equivalents
Money market funds		$	500			$	500			$	-			$	-
Total cash equivalents		$	500			$	500			$	-			$	-

 

As of June 30, 2023, the Company’s cash equivalents were invested in money market funds which were valued based on Level 1 inputs. As of December 31, 2022, the Company did not invest in money market funds or other types of cash equivalents. The Company did not have any financial assets or liabilities during any of the periods presented in the accompanying consolidated financial statements that required Level 2 or 3 inputs.

 

8

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PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities and as such these are considered Level 1 in the fair value hierarchy.

 

4.	Stock-Based Compensation

         

The Company’s 2006 Incentive Plan (“the Plan”) provides for cash-based awards or the grant or issuance of stock-based awards. As of June 30, 2023, 330 thousand shares remained available for future grant under the Plan.

 

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). The compensation cost charged against income is included in cost of revenues and operating expenses as follows (in thousands):

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Stock-based compensation related to:
Stock option grants		$	14			$	42			$	34			$	95
Stock unit awards			129				196				286				322
Total stock-based compensation		$	143			$	238			$	320			$	417

 

There was no income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation arrangements for the three and six months ended June 30, 2023, and 2022.

 

9

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PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	Stock-Based Compensation (continued)

         

A summary of the Company’s stock option activity for the six months ended June 30, 2023, is as follows (in thousands except per share amounts and years):

 

 

										Weighted Average
						Weighted Average				Remaining				Aggregate
		Number of				Exercise Price				Contractual Life				Intrinsic
		Shares				Per Share				(years)				Value(1)
Outstanding, December 31, 2022			508			$	14.19				5.1			$	25
Canceled			( 66	)		$	14.70
Outstanding, June 30, 2023			442			$	14.09				4.6			$	14
Exercisable, June 30, 2023			431			$	14.40				4.5			$	7

 

(1)

Intrinsic value is calculated based on the amount by which the closing market value of the Company’s stock exceeded the exercise price of the underlying options, multiplied by the number of shares.

 

A summary of the Company’s stock unit award (“SUA”) activity for the six months ended June 30, 2023, is as follows (in thousands except per share amounts):

 

		Number of Shares				Weighted Average Grant-Date Fair Value Per Share
Outstanding & Unvested, December 31, 2022			238			$	6.10
Converted to common stock			(62	)		$	6.54
Cancelled			(11	)		$	6.54
Forfeited			(9	)		$	5.90
Outstanding & Unvested, June 30, 2023			156			$	6.05

 

As of June 30, 2023, 783 thousand shares of common stock were reserved for issuance under the Plan. As of June 30, 2023, the unamortized fair value of awards relating to outstanding SUAs and options was $798 thousand, which is expected to be amortized over a weighted average period of 1.8 years.

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

5.	Basic and Diluted Net Loss Per Share

        

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and dilutive common equivalent shares outstanding during the period when the effect is dilutive. The number of dilutive common equivalent shares outstanding during the period was determined in accordance with the treasury-stock method. Common equivalent shares consisted of common stock issuable upon the exercise of outstanding options and common stock issuable upon the vesting of outstanding, unvested SUAs. Basic and diluted weighted average common shares outstanding for the three and six months ended June 30, 2023, and 2022 were as follows (in thousands):

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Weighted average common shares outstanding, basic			5,714				5,610				5,699				5,600
Dilutive common equivalent shares			-				-				-				-
Weighted average common shares outstanding, diluted			5,714				5,610				5,699				5,600

 

The computation of diluted earnings per share for the three and six months ended June 30, 2023, excludes the effect of the potential exercise of stock awards, including stock options, when the effect is anti-dilutive. For the three and six months ended June 30, 2023, the number of antidilutive stock awards excluded from diluted earnings per share were 598 thousand and 608 thousand, respectively.

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

6.	Commitments and Contingencies

         

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. Although it is difficult to predict the ultimate outcome of these cases, management believes, that any ultimate liability would not have a material adverse effect on the consolidated statements of operations. However, an unforeseen unfavorable development in any of these cases could have a material adverse effect on the statements of operations or cash flows in the period in which it is recorded. Developments in legal proceedings and other matters that could cause changes in the amounts previously accrued are evaluated each reporting period.

 

Settlements

 

As previously reported in the 10-K, on December 6, 2021, the Company entered into a binding Memorandum of Understanding to settle a purported class action lawsuit related to certain California wage and hour laws. The lawsuit, Enma Sagastume v. Psychemedics Corporation, Case No. 2:20-CV-06624-DSF, is pending in the United States District Court for the Central District of California (the “California Lawsuit”) and is similar to numerous lawsuits filed against employers with operations in California. The Company has accrued $1.2 million as of June 30, 2023, related to the California Lawsuit, which is included in accrued expenses on the accompanying consolidated balance sheets.

 

As previously reported in a Current Report on Form 8-K filed on July 21, 2023, on July 17, 2023, the Company entered into a Confidential Settlement Agreement and Release (the “Agreement”) in connection with a contract dispute regarding the Company’s alleged contractual obligations for work performed by a consultant for advice on strategic negotiations with a shipping carrier. The settlement Agreement provided that the settlement amount of $0.5 million would be paid in three equal installments as follows: on or before August 17, 2023, on or before December 31, 2023, and on or before December 31, 2024. The Company believes that the allegations lack merit and agreed to the enter into the Agreement to settle claims in order to avoid potential significant fees and a general distraction. The Company has recorded a settlement amount of $0.5 million as other expense in the accompanying consolidated statements of operations for the second quarter of 2023. The Company has accrued $0.5 million as of June 30, 2023, related to the Agreement, which is included in accrued expenses on the accompanying consolidated balance sheets.

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

7.	Operating Leases

        

The Company has five operating leases for office and laboratory space used to conduct business. The exercise of lease renewal options is at our discretion. There is one lease which contains renewal options to extend the lease terms included in our Right-Of-Use (“ROU”) assets and lease liabilities as they are reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise. As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at the lease commencement date in determining the net present value of the lease payments.

 

As of June 30, 2023, the Company recognized a Right-Of-Use (“ROU”) asset of $2.3 million and an operating lease liability of $2.5 million based on the net present value of the minimum lease payments. The weighted average discount rate used for leases as of June 30, 2023, is 3.9%. The weighted average lease term as of June 30, 2023, is 2.9 years. The operating lease expense for the three and six months ended June 30, 2023, was $258 thousand and $520 thousand, respectively.

 

Maturities and balance sheet presentation of the Company’s lease liabilities for all operating leases as of June 30, 2023, is as follows (in thousands):

 

July 1, 2023, through December 31, 2023		$	585
2024			1,106
2025			564
2026			460
Total lease payments			2,715
Less: interest			(182	)
Present value of lease liabilities		$	2,533
Current operating lease liabilities		$	1,067
Long-term operating lease liabilities			1,466
		$	2,533

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

8.

Debt

        

On March 20, 2014, the Company entered into an equipment financing arrangement (“Loan Agreement”) with Banc of America Leasing & Capital, which it amended on August 8, 2014, September 15, 2015, October 30, 2017, and December 2, 2019. The terms of the arrangement are detailed in the 10-K.

 

The weighted average interest rate on outstanding debt under the Loan Agreement was 3.8% for the three and six months ended June 30, 2023. The interest expense was $5 thousand and $10 thousand for the three months and six months ended June 30, 2023. As of June 30, 2023, the weighted average interest rate was 3.8% and there was $453 thousand of outstanding debt related under the Loan Agreement. The Company was in compliance with all loan covenants under the Loan Agreement as of June 30, 2023.

 

The remaining principal repayment requirements for debt obligations as of June 30, 2023, were as follows (in thousands):

 

July 1, 2023, through December 31, 2023		$	148
2024			305
Long-term debt from equipment financing			453
Less: current portion of long-term debt from equipment financing			(299	)
Long-term debt from equipment financing, net of current portion		$	154

 

 

PSYCHEMEDICS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

9.

Revenue

        

         The table below disaggregates our external revenue by major source (in thousands):

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Testing		$	4,614			$	5,480			$	9,552			$	11,204
Shipping/Collection (hair)			897				1,001				1,795				1,751
Other			26				32				49				66
Total Revenue		$	5,537			$	6,513			$	11,396			$	13,021

 

10.	Significant Customers

        

The Company had no customers that represented over 10% of revenue during either of the six months ended June 30, 2023, or 2022. The Company had one customer that represented 26% and 16% of the total accounts receivable balance as of June 30, 2023 and 2022, respectively.

 

 

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

FACTORS THAT MAY AFFECT FUTURE RESULTS

 

From time to time, information provided by the Company or statements made by its employees may contain forward-looking information that involves risks and uncertainties. In particular, statements contained in this report that are not historical facts (including but not limited to statements concerning earnings, earnings per share, revenues, cash flows, dividends, future business, growth opportunities, profitability, pricing, new accounts, customer base, market share, test volume, sales and marketing strategies, market demand for drug testing services in the U.S. and foreign drug testing laws and regulations, required investments in plant, equipment and people and new test development) may be “forward looking” statements. Actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include but are not limited to risks associated with the changes in U.S. and foreign government regulations, including but not limited to FDA regulations, R&D spending, competition (including, without limitation, competition from other companies pursuing the same growth opportunities), the Company’s ability to maintain its reputation and brand image, the ability of the Company to achieve its business plans, cost controls, the continued labor shortage, leveraging of its global operating platform, risks of information technology system failures and data security breaches, the uncertain global economy, the Company’s ability to attract, develop and retain executives and other qualified employees and independent contractors, including distributors, the Company’s ability to obtain and protect intellectual property rights, litigation risks, and general economic conditions. With respect to the continued payment of cash dividends, factors include, but are not limited to, all of the factors listed above plus cash flows, available surplus, capital expenditure reserves required, debt service obligations, regulatory requirements and other factors that the Board of Directors of the Company may take into account.

 

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements represent the Company’s estimates and assumptions only as of the filing date of this Report. The Company expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, after the filing date of this Report, in order to reflect changes in circumstances or expectations, or the occurrence of unanticipated events, except to the extent required by applicable securities laws. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed above and under “Risk Factors” set forth in Part I Item 1A of the 10-K, as well as the risks and uncertainties discussed elsewhere in this Report. The Company qualifies all of its forward-looking statements with these cautionary statements. The Company cautions you that these risks are not exhaustive. The Company operates in a continually changing business environment and new risks emerge from time to time.

 

 

RESULTS OF OPERATIONS

 

Revenue decreased 15% for the three months ended June 30, 2023, compared to the same period in 2022, primarily due to a decrease in volumes from the Company’s base business. The Company’s revenues were impacted by lower volumes from customers experiencing the effects of the general economic conditions and a continued labor shortage related to hiring. For the six months ended June 30, 2023, revenue decreased $1.6 million or 12%, primarily due to a decrease in volumes from the Company's base business.

 

Gross profit decreased 9% or to $2.1 million for the three months ended June 30, 2023, compared to $2.3 million for the same period in 2022. Cost of revenues decreased by $0.8 million or 18% for the three months ended June 30, 2023, compared to the same period in 2022. Gross profit for the six months ended June 30, 2023, was $4.3 million, a decrease of $0.4 million from the comparable period in 2022. Gross profit percentage for the six month period ended June 30, 2023, was 37% compared to 36% for the comparable period in 2022. The increase in gross profit percentage was primarily due to cost reduction programs offset by lower total revenues for both the three and six months ended June 30, 2023.

 

General and administrative (“G&A”) expenses were flat at $1.4 million for both the three months ended June 30, 2023, and 2022.  As a percentage of revenue, G&A expenses were 26% and 22% for the three months ended June 30, 2023, and 2022, respectively. G&A expenses were $3.1 million and $2.8 million for the six months ended June 30, 2023, and 2022, respectively. The increase in G&A expenses for the six month period was primarily due to higher costs associated with legal fees, personnel costs, accounting and consulting fees, and business insurance premiums. As a percentage of revenue, G&A expenses were 27% and 21% for the six months ended June 30, 2023, and 2022, respectively.

 

Marketing and selling expenses decreased 8% or $0.1 million to $0.7 million for the three months ended June 30, 2023, compared to $0.8 million for the same period in 2022. Total marketing and selling expenses represented 13% and 12% of revenue for the three months ended June 30, 2023, and 2022. The decrease in marketing and selling was primarily driven by lower personnel costs. Marketing and selling expenses were $1.5 million and $1.6 million for the six months ended June 30, 2023, and 2022, respectively. As a percentage of revenue, marketing and selling expenses were 13% and 12% for the six months ended June 30, 2023, and 2022, respectively.

 

Research and development (“R&D”) expenses for the three months ended June 30, 2023, and 2022, were $0.3 million and $0.4 million, respectively. R&D expenses represented 5% of revenue for the three months ended June 30, 2023, and 2022. R&D expenses were $0.6 million and $0.7 million for the six months ended June 30, 2023, and 2022, respectively. R&D expenses represented 5% of revenue for the six months ended June 30, 2023, and 2022.

 

 

Other (expense) income of ($0.5 million) consisted of the charge incurred as a result of the settlement of a contract dispute (see Note 6 of the Notes to Condensed Consolidated Financial Statements).

 

(Benefit from) provision for income taxes consisted primarily of federal and state income taxes in the United States. We estimate income taxes in each of the jurisdictions in which we operate. During the three months ended June 30, 2023, the Company recorded a tax benefit of $196 thousand (effective tax rate of 21%) and a tax benefit of $13 thousand (effective tax rate of 4%) for the comparable period in 2022. During the six months ended June 30, 2023, the Company recorded a tax benefit of $345 thousand (effective tax rate of 24%) and a tax provision of $4 thousand (effective tax rate of 1%) for the comparable period in 2022.

 

 

 

 

 

 

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

At June 30, 2023, the Company had approximately $2.4 million of cash and cash equivalents. The Company's operating activities used net cash of $1.2 million for the six months ended June 30, 2023. Investing activities used $0.1 million of net cash while financing activities used $1.0 million of net cash for the six months ended June 30, 2023.

 

Cash used in operating activities of $1.2 million reflected net loss of $1.1 million adjusted for depreciation and amortization of $0.9 million, ROU asset amortization of $0.5 million and stock-based compensation of $0.3 million. This was also impacted by an increase in operating assets of $0.6 million and a decrease in operating liabilities of $0.6 million.

 

Cash used in investing activities of $0.1 million was primarily related to internally developed software and equipment purchases. We anticipate spending less than $0.8 million in additional capital purchases for the remainder of 2023.

 

Cash used in financing activities of $1.0 million included cash dividends to shareholders of $0.8 million and $0.1 million from payments on equipment financing.

 

Contractual obligations and other commercial commitments as of June 30, 2023, included legal settlement commitments, operating lease commitments, and outstanding debt, described in Notes 6, 7, and 8, respectively of the Notes to Condensed Consolidated Financial Statements.

 

While management currently believes that its existing funds and cash flow from operations should be adequate to fund the Company’s business for at least the next 12 months, adverse economic conditions could adversely affect the Company’s future operating results and cash flows. Depending upon the Company’s results of operations, its future capital needs and available marketing opportunities, the Company may use various financing sources to raise additional funds. Such sources could include but are not limited to, issuance of common stock or debt financing, lines of credit, or equipment leasing, although there is no assurance that such financings will be available to the Company on terms it deems acceptable, if at all.

 

 

Item 4. Controls and Procedures

 

As of the end of the period covered by this report (the “evaluation date”) the Company’s management under the supervision and with the participation of the Company’s Chief Executive Officer and Assistant Controller performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act. Based upon that evaluation, the Chief Executive Officer and Assistant Controller concluded as of the evaluation date, that the Company’s disclosure controls and procedures were effective for ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that its disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the Company’s principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

 

There has been no significant change in the Company’s internal control over financial reporting during the most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

 

 

 

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Information pertaining to legal proceedings can be found in Item 1. Financial Statements and Supplementary Data – Note 6 “Commitments and Contingencies”.

 

Item 1A. Risk Factors

 

Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2022, includes a discussion of our risk factors. There have been no material changes in the risk factors described in such report.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

There were no purchases of treasury stock in the first six months of 2023.

 

Item 6. Exhibits 

 

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Psychemedics Corporation
Date:   August 14, 2023	By: /s/ Raymond C. Kubacki
	Raymond C. Kubacki
	Chairman and Chief Executive Officer
	(principal executive officer)
Date:   August 14, 2023	By: /s/ Michael S. Weisenhoff
	Michael S. Weisenhoff
	Assistant Controller
	(principal accounting officer)

 

 

 

 

 

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Raymond C. Kubacki, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Psychemedics Corporation (“the registrant”);

 

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:         August 14, 2023	/s/ Raymond C. Kubacki
	Raymond C. Kubacki
	Chairman and Chief Executive Officer
	(principal executive officer)

 

 

 

 

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Michael S. Weisenhoff, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Psychemedics Corporation (“the registrant”);

 

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:         August 14, 2023	/s/ Michael S. Weisenhoff
	Michael S. Weisenhoff
	Assistant Controller
	(principal accounting officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

I, Raymond C. Kubacki, Chairman and Chief Executive Officer of Psychemedics Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as the principal executive officer of the Company, that:

 

(1)

The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on August 14, 2023 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date:         August 14, 2023	/s/ Raymond C. Kubacki
	Raymond C. Kubacki
	Chairman and Chief Executive Officer
	(principal executive officer)

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

I, Michael S. Weisenhoff, Assistant Controller of Psychemedics Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as the principal accounting officer of the Company, that:

 

(1)

The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on August 14, 2023 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date:         August 14, 2023	/s/ Michael S. Weisenhoff
	Michael S. Weisenhoff
	Assistant Controller
	(principal accounting officer)

 

 

 

 

 

 

 

v3.23.2

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 07, 2023
Document Information [Line Items]
Entity Central Index Key	0000806517
Entity Registrant Name	PSYCHEMEDICS CORP
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-13738
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	58-1701987
Entity Address, Address Line One	289 Great Road
Entity Address, City or Town	Acton
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01720
City Area Code	978
Local Phone Number	206-8220
Title of 12(b) Security	Common stock. $0.005 par value
Trading Symbol	PMD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,742,761

v3.23.2

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 2,445	$ 4,750
Accounts receivable, net of allowance for doubtful accounts of $52 at June 30, 2023, and $87 at December 31, 2022	4,001	3,739
Prepaid expenses and other current assets	1,773	1,136
Income tax receivable	9	339
Total Current Assets	8,228	9,964
Fixed assets, net of accumulated amortization and depreciation of $22,877 at June 30, 2023, and $21,964 at December 31, 2022	3,757	4,573
Other assets	817	823
Net deferred tax assets	1,284	691
Operating lease right-of-use assets	2,300	2,681
Total Assets	16,386	18,732
Current Liabilities:
Accounts payable	806	448
Accrued expenses	3,467	3,939
Current portion of long-term debt	299	294
Current portion of operating lease liabilities	1,067	1,037
Total Current Liabilities	5,639	5,718
Long-term debt	154	305
Long-term portion of operating lease liabilities	1,466	1,938
Total Liabilities	7,259	7,961
Commitments and Contingencies (Note 6)
Shareholders' Equity:
Common stock, $0.005 par value; 50,000 shares authorized; 6,411 and 6,349 shares issued and 5,743 and 5,681 shares outstanding, respectively	32	32
Additional paid-in capital	34,540	34,275
Accumulated deficit	(13,729)	(11,820)
Less - Treasury stock, at cost, 668 shares	(10,082)	(10,082)
Accumulated other comprehensive loss	(1,634)	(1,634)
Total Shareholders' Equity	9,127	10,771
Total Liabilities and Shareholders' Equity	$ 16,386	$ 18,732

v3.23.2

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Allowance for doubtful accounts	$ 52	$ 87
Accumulated depreciation and amortization	$ 22,877	$ 21,964
Preferred stock, par value (in dollars per share)	$ 0.005	$ 0.005
Preferred stock, shares authorized (in shares)	873	873
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	6,411,000	6,349,000
Common stock, shares outstanding (in shares)	5,743,000	5,681,000
Treasury stock, shares (in shares)	668,000	668,000

v3.23.2

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues	$ 5,537	$ 6,513	$ 11,396	$ 13,021
Cost of revenues	3,478	4,240	7,132	8,307
Gross profit	2,059	2,273	4,264	4,714
Operating expenses:
General & administrative	1,444	1,445	3,090	2,772
Marketing & selling	746	813	1,535	1,619
Research & development	286	357	584	675
Total Operating expenses	2,476	2,615	5,209	5,066
Operating loss	(417)	(342)	(945)	(352)
Other (expense) income:
Settlement	(500)		(500)
Other	(5)	(9)	(10)	57
Total other (expense) income, net	(505)	(9)	(510)	57
Loss before (benefit from) provision for income taxes	(922)	(351)	(1,455)	(295)
(Benefit from) provision for income taxes	(196)	(13)	(345)	4
Net loss	$ (726)	$ (338)	$ (1,110)	$ (299)
Basic net loss per share (in dollars per share)	$ (0.13)	$ (0.06)	$ (0.19)	$ (0.05)
Diluted net loss per share (in dollars per share)	(0.13)	(0.06)	(0.19)	(0.05)
Dividends declared per share (in dollars per share)	$ 0.07	$ 0.07	$ 0.14	$ 0.07

v3.23.2

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2021	6,257,000		668,000
Balance at Dec. 31, 2021	$ 31	$ 33,478	$ (10,082)	$ (9,550)	$ (1,634)	$ 12,243
Shares issued – vested (in shares)	36,000		0
Shares issued – vested	$ 0	0	$ 0	0	0	0
Tax withholding related to vested shares from employee stock plans	0	(36)	0	0	0	(36)
Stock-based compensation	0	417	0	0	0	417
Cash dividends ($0.07 per share)	0	0	0	(393)	0	(393)
Net loss	$ 0	0	$ 0	(299)	0	(299)
Exercise of stock options (in shares)	1,000		0
Exercise of stock options	$ 0	4	$ 0	0	0	4
Balance (in shares) at Jun. 30, 2022	6,294,000		668,000
Balance at Jun. 30, 2022	$ 31	33,863	$ (10,082)	(10,242)	(1,634)	11,936
Balance (in shares) at Mar. 31, 2022	6,259,000		668,000
Balance at Mar. 31, 2022	$ 31	33,657	$ (10,082)	(9,511)	(1,634)	12,461
Shares issued – vested (in shares)	34,000		0
Shares issued – vested	$ 0	0	$ 0	0	0	0
Tax withholding related to vested shares from employee stock plans	0	(36)	0	0	0	(36)
Stock-based compensation	0	238	0	0	0	238
Cash dividends ($0.07 per share)	0	0	0	(393)	0	(393)
Net loss	$ 0	0	$ 0	(338)	0	(338)
Exercise of stock options (in shares)	1,000		0
Exercise of stock options	$ 0	4	$ 0	0	0	4
Balance (in shares) at Jun. 30, 2022	6,294,000		668,000
Balance at Jun. 30, 2022	$ 31	33,863	$ (10,082)	(10,242)	(1,634)	11,936
Balance (in shares) at Dec. 31, 2022	6,349,000		668,000
Balance at Dec. 31, 2022	$ 32	34,275	$ (10,082)	(11,820)	(1,634)	10,771
Shares issued – vested (in shares)	62		0
Shares issued – vested	$ 0	(1)	$ 0	0	0	(1)
Tax withholding related to vested shares from employee stock plans	0	(54)	0	0	0	(54)
Stock-based compensation	0	320	0	0	0	320
Cash dividends ($0.07 per share)	0	0	0	(799)	0	(799)
Net loss	$ 0	0	$ 0	(1,110)		(1,110)
Balance (in shares) at Jun. 30, 2023	6,411,000		668,000
Balance at Jun. 30, 2023	$ 32	34,540	$ (10,082)	(13,729)	(1,634)	9,127
Balance (in shares) at Mar. 31, 2023	6,354,000		668,000
Balance at Mar. 31, 2023	$ 32	34,452	$ (10,082)	(12,602)	(1,634)	10,166
Shares issued – vested (in shares)	57,000		0
Shares issued – vested	$ 0	(1)	$ 0	0	0	(1)
Tax withholding related to vested shares from employee stock plans	0	(54)	0	0	0	(54)
Stock-based compensation	0	143	0	0	0	143
Cash dividends ($0.07 per share)	0	0	0	(401)	0	(401)
Net loss	$ 0	0	$ 0	(726)	0	(726)
Balance (in shares) at Jun. 30, 2023	6,411,000		668,000
Balance at Jun. 30, 2023	$ 32	$ 34,540	$ (10,082)	$ (13,729)	$ (1,634)	$ 9,127

v3.23.2

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Cash dividends declared (in dollars per share)	$ 0.07	$ 0.07	$ 0.07	$ 0.07

v3.23.2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,110)	$ (299)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	943	1,239
ROU asset amortization	467	488
Deferred income taxes	(593)	467
Stock-based compensation	320	417
Changes in operating assets and liabilities:
Accounts receivable	(262)	(289)
Prepaid expenses and other current assets	(637)	(223)
Income tax receivable	330	(307)
Accounts payable	358	(396)
Operating lease liabilities	(528)	(511)
Accrued expenses	(472)	76
Net cash (used in) provided by operating activities	(1,184)	662
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements	(20)	(9)
Cost of internally developed software	(77)	(63)
Other assets	(24)	(18)
Net cash used in investing activities	(121)	(90)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock, net of tax withholding	(55)	(32)
Payments of equipment financing	(146)	(349)
Cash dividends paid	(799)	(393)
Net cash used in financing activities	(1,000)	(774)
Net decrease in cash and cash equivalents	(2,305)	(202)
Cash and cash equivalents, beginning of period	4,750	1,992
Cash and cash equivalents, end of period	2,445	1,790
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	10	19
Cash paid for operating leases	583	568
Right-of-use assets acquired through operating leases	$ 86	$ 78

v3.23.2

Note 1 - Basis of Presentation	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. Basis of Presentation   The interim condensed consolidated financial statements of Psychemedics Corporation (the “Company”) presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022, included in the Company's 2022 Annual Report on Form 10-K (“10-K”), as filed with the SEC.   The accompanying condensed consolidated financial statements are unaudited but, in the opinion of management, include all adjustments necessary for a fair presentation of results for these interim periods. The condensed consolidated balance sheet as of December 31, 2022, has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm, but does not include all the information and footnotes required for complete annual financial statements. The Company’s comprehensive (loss)/income is equal to its net (loss)/income for all periods presented.   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three and six months ended June 30, 2023, may not be indicative of the results that may be expected for the year ending December 31, 2023, or any other period.   Unless the context requires otherwise, the terms “we”, “us”, “our”, or “the Company” refer to Psychemedics Corporation and its wholly-owned consolidated subsidiaries.

v3.23.2

Note 2 - Financial Information	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Business Description and Accounting Policies [Text Block]	2. Financial Information   Liquidity and Management’s Plans   At June 30, 2023, the Company’s principal sources of liquidity included approximately $2.4 million of cash and cash equivalents. Management currently believes that such funds, together with future operating profits, should be adequate to fund anticipated working capital requirements, including equipment financing obligations, and capital expenditures for at least the next 12 months. Depending upon the Company’s results of operations, its future capital needs and available marketing opportunities, the Company may use various financing sources to raise additional funds. Such sources could include but are not limited to, issuance of common stock, debt financing, lines of credit, or equipment leasing, although there is no assurance that such financings will be available to the Company on terms it deems acceptable, if at all.   PSYCHEMEDICS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 2. Financial Information (continued)   Accounts Receivable   The Company believes its allowance for credit losses related to its accounts receivable remained adequate as of June 30, 2023, due to the essential nature of its customers, as well as the diversity of its large customer base. While the Company anticipates there could be an increase in the aging of its accounts receivable, the Company does not anticipate a significant increase in default risk.   Recently Adopted Accounting Pronouncements   In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments. The Company adopted ASU 2016-13 in the first quarter of 2023 utilizing the modified retrospective transition method. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 has not had and is not expected to have a material impact on the condensed consolidated financial statements and disclosures.

v3.23.2

Note 3 - Fair Value Measurements	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Fair Value Disclosures [Text Block]	3. Fair Value Measurements           The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):               Fair Value Measurements at Reporting Date Using                                                 Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3)       June 30, 2023                           Assets:                                 Cash equivalents                                 Money market funds   $ 500     $ 500     $ -     $ -   Total cash equivalents   $ 500     $ 500     $ -     $ -     As of June 30, 2023, the Company’s cash equivalents were invested in money market funds which were valued based on Level 1 inputs. As of December 31, 2022, the Company did not invest in money market funds or other types of cash equivalents. The Company did not have any financial assets or liabilities during any of the periods presented in the accompanying consolidated financial statements that required Level 2 or 3 inputs.   PSYCHEMEDICS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities and as such these are considered Level 1 in the fair value hierarchy.

v3.23.2

Note 4 - Stock-based Compensation	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Share-Based Payment Arrangement [Text Block]	4. Stock-Based Compensation           The Company’s 2006 Incentive Plan (“the Plan”) provides for cash-based awards or the grant or issuance of stock-based awards. As of June 30, 2023, 330 thousand shares remained available for future grant under the Plan.   Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). The compensation cost charged against income is included in cost of revenues and operating expenses as follows (in thousands):       Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Stock-based compensation related to:                                 Stock option grants   $ 14     $ 42     $ 34     $ 95   Stock unit awards     129       196       286       322   Total stock-based compensation   $ 143     $ 238     $ 320     $ 417     There was no income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation arrangements for the three and six months ended June 30, 2023, and 2022.   PSYCHEMEDICS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. Stock-Based Compensation (continued)           A summary of the Company’s stock option activity for the six months ended June 30, 2023, is as follows (in thousands except per share amounts and years):                         Weighted Average                       Weighted Average     Remaining     Aggregate       Number of     Exercise Price     Contractual Life     Intrinsic       Shares     Per Share     (years)     Value(1)   Outstanding, December 31, 2022     508     $ 14.19       5.1     $ 25   Canceled     ( 66 )   $ 14.70                   Outstanding, June 30, 2023     442     $ 14.09       4.6     $ 14                                     Exercisable, June 30, 2023     431     $ 14.40       4.5     $ 7       (1) Intrinsic value is calculated based on the amount by which the closing market value of the Company’s stock exceeded the exercise price of the underlying options, multiplied by the number of shares.   A summary of the Company’s stock unit award (“SUA”) activity for the six months ended June 30, 2023, is as follows (in thousands except per share amounts):       Number of Shares     Weighted Average Grant-Date Fair Value Per Share                     Outstanding & Unvested, December 31, 2022     238     $ 6.10   Converted to common stock     (62 )   $ 6.54   Cancelled     (11 )   $ 6.54   Forfeited     (9 )   $ 5.90   Outstanding & Unvested, June 30, 2023     156     $ 6.05     As of June 30, 2023, 783 thousand shares of common stock were reserved for issuance under the Plan. As of June 30, 2023, the unamortized fair value of awards relating to outstanding SUAs and options was $798 thousand, which is expected to be amortized over a weighted average period of 1.8 years.

v3.23.2

Note 5 - Basic and Diluted Net Loss Per Share	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Earnings Per Share [Text Block]	5.  Basic and Diluted Net Loss Per Share          Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and dilutive common equivalent shares outstanding during the period when the effect is dilutive. The number of dilutive common equivalent shares outstanding during the period was determined in accordance with the treasury-stock method. Common equivalent shares consisted of common stock issuable upon the exercise of outstanding options and common stock issuable upon the vesting of outstanding, unvested SUAs. Basic and diluted weighted average common shares outstanding for the three and six months ended June 30, 2023, and 2022 were as follows (in thousands):       Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Weighted average common shares outstanding, basic     5,714       5,610       5,699       5,600   Dilutive common equivalent shares     -       -       -       -   Weighted average common shares outstanding, diluted     5,714       5,610       5,699       5,600     The computation of diluted earnings per share for the three and six months ended June 30, 2023, excludes the effect of the potential exercise of stock awards, including stock options, when the effect is anti-dilutive. For the three and six months ended June 30, 2023, the number of antidilutive stock awards excluded from diluted earnings per share were 598 thousand and 608 thousand, respectively.

v3.23.2

Note 6 - Commitments and Contingencies	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	6. Commitments and Contingencies           From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. Although it is difficult to predict the ultimate outcome of these cases, management believes, that any ultimate liability would not have a material adverse effect on the consolidated statements of operations. However, an unforeseen unfavorable development in any of these cases could have a material adverse effect on the statements of operations or cash flows in the period in which it is recorded. Developments in legal proceedings and other matters that could cause changes in the amounts previously accrued are evaluated each reporting period.   Settlements   As previously reported in the 10-K, on December 6, 2021, the Company entered into a binding Memorandum of Understanding to settle a purported class action lawsuit related to certain California wage and hour laws. The lawsuit, Enma Sagastume v. Psychemedics Corporation, Case No. 2:20-CV-06624-DSF, is pending in the United States District Court for the Central District of California (the “California Lawsuit”) and is similar to numerous lawsuits filed against employers with operations in California. The Company has accrued $1.2 million as of June 30, 2023, related to the California Lawsuit, which is included in accrued expenses on the accompanying consolidated balance sheets.   As previously reported in a Current Report on Form 8-K filed on July 21, 2023, on July 17, 2023, the Company entered into a Confidential Settlement Agreement and Release (the “Agreement”) in connection with a contract dispute regarding the Company’s alleged contractual obligations for work performed by a consultant for advice on strategic negotiations with a shipping carrier. The settlement Agreement provided that the settlement amount of $0.5 million would be paid in three equal installments as follows: on or before August 17, 2023, on or before December 31, 2023, and on or before December 31, 2024. The Company believes that the allegations lack merit and agreed to the enter into the Agreement to settle claims in order to avoid potential significant fees and a general distraction. The Company has recorded a settlement amount of $0.5 million as other expense in the accompanying consolidated statements of operations for the second quarter of 2023. The Company has accrued $0.5 million as of June 30, 2023, related to the Agreement, which is included in accrued expenses on the accompanying consolidated balance sheets.

v3.23.2

Note 7 - Operating Leases	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Lessee, Operating Leases [Text Block]	7.  Operating Leases          The Company has five operating leases for office and laboratory space used to conduct business. The exercise of lease renewal options is at our discretion. There is one lease which contains renewal options to extend the lease terms included in our Right-Of-Use (“ROU”) assets and lease liabilities as they are reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise. As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at the lease commencement date in determining the net present value of the lease payments.   As of June 30, 2023, the Company recognized a Right-Of-Use (“ROU”) asset of $2.3 million and an operating lease liability of $2.5 million based on the net present value of the minimum lease payments. The weighted average discount rate used for leases as of June 30, 2023, is 3.9%. The weighted average lease term as of June 30, 2023, is 2.9 years. The operating lease expense for the three and six months ended June 30, 2023, was $258 thousand and $520 thousand, respectively.   Maturities and balance sheet presentation of the Company’s lease liabilities for all operating leases as of June 30, 2023, is as follows (in thousands):   July 1, 2023, through December 31, 2023   $ 585   2024     1,106   2025     564   2026     460   Total lease payments     2,715   Less: interest     (182 ) Present value of lease liabilities   $ 2,533             Current operating lease liabilities   $ 1,067   Long-term operating lease liabilities     1,466       $ 2,533

v3.23.2

Note 8 - Debt	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Debt Disclosure [Text Block]	8.  Debt          On March 20, 2014, the Company entered into an equipment financing arrangement (“Loan Agreement”) with Banc of America Leasing & Capital, which it amended on August 8, 2014, September 15, 2015, October 30, 2017, and December 2, 2019. The terms of the arrangement are detailed in the 10-K.   The weighted average interest rate on outstanding debt under the Loan Agreement was 3.8% for the three and six months ended June 30, 2023. The interest expense was $5 thousand and $10 thousand for the three months and six months ended June 30, 2023. As of June 30, 2023, the weighted average interest rate was 3.8% and there was $453 thousand of outstanding debt related under the Loan Agreement. The Company was in compliance with all loan covenants under the Loan Agreement as of June 30, 2023.   The remaining principal repayment requirements for debt obligations as of June 30, 2023, were as follows (in thousands):   July 1, 2023, through December 31, 2023   $ 148   2024     305   Long-term debt from equipment financing     453   Less: current portion of long-term debt from equipment financing     (299 ) Long-term debt from equipment financing, net of current portion   $ 154

v3.23.2

Note 9 - Revenue	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Revenue from Contract with Customer [Text Block]	9.  Revenue                   The table below disaggregates our external revenue by major source (in thousands):       Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Testing   $ 4,614     $ 5,480     $ 9,552     $ 11,204   Shipping/Collection (hair)     897       1,001       1,795       1,751   Other     26       32       49       66   Total Revenue   $ 5,537     $ 6,513     $ 11,396     $ 13,021

v3.23.2

Note 10 - Significant Customers	6 Months Ended
	Jun. 30, 2023
Notes to Financial Statements
Concentration Risk Disclosure [Text Block]	10.  Significant Customers          The Company had no customers that represented over 10% of revenue during either of the six months ended June 30, 2023, or 2022. The Company had one customer that represented 26% and 16% of the total accounts receivable balance as of June 30, 2023 and 2022, respectively.

v3.23.2

Note 3 - Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Fair Value, Assets Measured on Recurring Basis [Table Text Block]	Fair Value Measurements at Reporting Date Using                                                 Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3)       June 30, 2023                           Assets:                                 Cash equivalents                                 Money market funds   $ 500     $ 500     $ -     $ -   Total cash equivalents   $ 500     $ 500     $ -     $ -

v3.23.2

Note 4 - Stock-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Share-Based Payment Arrangement, Cost by Plan [Table Text Block]	Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Stock-based compensation related to:                                 Stock option grants   $ 14     $ 42     $ 34     $ 95   Stock unit awards     129       196       286       322   Total stock-based compensation   $ 143     $ 238     $ 320     $ 417
Share-Based Payment Arrangement, Option, Activity [Table Text Block]	Weighted Average                       Weighted Average     Remaining     Aggregate       Number of     Exercise Price     Contractual Life     Intrinsic       Shares     Per Share     (years)     Value(1)   Outstanding, December 31, 2022     508     $ 14.19       5.1     $ 25   Canceled     ( 66 )   $ 14.70                   Outstanding, June 30, 2023     442     $ 14.09       4.6     $ 14                                     Exercisable, June 30, 2023     431     $ 14.40       4.5     $ 7
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]	Number of Shares     Weighted Average Grant-Date Fair Value Per Share                     Outstanding & Unvested, December 31, 2022     238     $ 6.10   Converted to common stock     (62 )   $ 6.54   Cancelled     (11 )   $ 6.54   Forfeited     (9 )   $ 5.90   Outstanding & Unvested, June 30, 2023     156     $ 6.05

v3.23.2

Note 5 - Basic and Diluted Net Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Weighted average common shares outstanding, basic     5,714       5,610       5,699       5,600   Dilutive common equivalent shares     -       -       -       -   Weighted average common shares outstanding, diluted     5,714       5,610       5,699       5,600

v3.23.2

Note 7 - Operating Leases (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]	July 1, 2023, through December 31, 2023   $ 585   2024     1,106   2025     564   2026     460   Total lease payments     2,715   Less: interest     (182 ) Present value of lease liabilities   $ 2,533             Current operating lease liabilities   $ 1,067   Long-term operating lease liabilities     1,466       $ 2,533

v3.23.2

Note 8 - Debt (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Schedule of Long-Term Debt Instruments [Table Text Block]	July 1, 2023, through December 31, 2023   $ 148   2024     305   Long-term debt from equipment financing     453   Less: current portion of long-term debt from equipment financing     (299 ) Long-term debt from equipment financing, net of current portion   $ 154

v3.23.2

Note 9 - Revenue (Tables)	6 Months Ended
	Jun. 30, 2023
Notes Tables
Disaggregation of Revenue [Table Text Block]	Three Months Ended     Six Months Ended       June 30,     June 30,       2023     2022     2023     2022   Testing   $ 4,614     $ 5,480     $ 9,552     $ 11,204   Shipping/Collection (hair)     897       1,001       1,795       1,751   Other     26       32       49       66   Total Revenue   $ 5,537     $ 6,513     $ 11,396     $ 13,021

v3.23.2

Note 2 - Financial Information (Details Textual) $ in Millions	Jun. 30, 2023 USD ($)
Cash	$ 2.4

v3.23.2

Note 3 - Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Cash equivalents, fair value	$ 500
Fair Value, Inputs, Level 1 [Member]
Cash equivalents, fair value	500
Fair Value, Inputs, Level 2 [Member]
Cash equivalents, fair value	0
Fair Value, Inputs, Level 3 [Member]
Cash equivalents, fair value	0
Money Market Funds [Member]
Cash equivalents, fair value	500
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Cash equivalents, fair value	500
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents, fair value	0
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Cash equivalents, fair value	$ 0

v3.23.2

Note 4 - Stock-based Compensation (Details Textual) shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) shares
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 9 months 18 days
Incentive Plan 2006 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	330
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	783
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 798

v3.23.2

Note 4 - Stock-based Compensation - Compensation Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based compensation	$ 143	$ 238	$ 320	$ 417
Share-Based Payment Arrangement, Option [Member]
Share-based compensation	14	42	34	95
Stock Unit Awards [Member]
Share-based compensation	$ 129	$ 196	$ 286	$ 322

v3.23.2

Note 4 - Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2023	Dec. 31, 2022
Outstanding, shares (in shares)		508
Outstanding, weighted average exercise price (in dollars per share)		$ 14.19
Outstanding, weighted average remaining contractual life (Year)		4 years 7 months 6 days	5 years 1 month 6 days
Outstanding, aggregate intrinsic value	[1]	$ 14	$ 25
Canceled, shares (in shares)		(66)
Canceled, weighted average exercise price (in dollars per share)		$ 14.70
Outstanding, shares (in shares)		442	508
Outstanding, weighted average exercise price (in dollars per share)		$ 14.09	$ 14.19
Exercisable, shares (in shares)		431
Exercisable, weighted average exercise price (in dollars per share)		$ 14.40
Exercisable, weighted average remaining contractual life (Year)		4 years 6 months
Exercisable, aggregate intrinsic value	[1]	$ 7
[1] Intrinsic value is calculated based on the amount by which the closing market value of the Company’s stock exceeded the exercise price of the underlying options, multiplied by the number of shares.

v3.23.2

Note 4 - Stock-based Compensation - Nonvested Award Activity (Details) - Stock Unit Award [Member] shares in Thousands	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Outstanding & Unvested at beginning of period (in shares) | shares	238
Outstanding & Unvested at beginning of period, weighted average price per share (in dollars per share) | $ / shares	$ 6.10	[1]
Converted to common stock (in shares) | shares	(62)
Converted to common stock, weighted average price per share (in dollars per share) | $ / shares	$ 6.54	[1]
Cancelled (in shares) | shares	(11)
Cancelled, weighted average price per share (in dollars per share) | $ / shares	$ 6.54	[1]
Forfeited (in shares) | shares	(9)
Forfeited, weighted average price per share (in dollars per share) | $ / shares	$ 5.90	[1]
Outstanding & Unvested at end of period (in shares) | shares	156
Outstanding & Unvested at end of period, weighted average price per share (in dollars per share) | $ / shares	$ 6.05	[1]
[1] Weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants related to each transaction type. The weighted average fair value is the weighted average share price times the number of shares.

v3.23.2

Note 5 - Basic and Diluted Net Loss Per Share (Details Textual) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	598	608

v3.23.2

Note 5 - Basic and Diluted Net Loss Per Share - Basic and Diluted Weighted Average Common Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Weighted average common shares outstanding, basic (in shares)	5,714	5,610	5,699	5,600
Dilutive common equivalent shares (in shares)	0	0	0	0
Weighted average common shares outstanding, diluted (in shares)	5,714	5,610	5,699	5,600

v3.23.2

Note 6 - Commitments and Contingencies (Details Textual) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
California Lawsuit [Member]
Loss Contingency Accrual	$ 1.2
Enma Sagastume v. Psychemedics Corporation [Member]
Loss Contingency Accrual	0.5
Litigation Settlement, Expense	$ 0.5

v3.23.2

Note 7 - Operating Leases (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Operating Lease, Right-of-Use Asset	$ 2,300	$ 2,300	$ 2,681
Operating Lease, Liability	$ 2,533	$ 2,533
Operating Lease, Weighted Average Discount Rate, Percent	3.90%	3.90%
Operating Lease, Weighted Average Remaining Lease Term (Year)	2 years 10 months 24 days	2 years 10 months 24 days
Operating Lease, Expense	$ 258	$ 520

v3.23.2

Note 7 - Operating Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
July 1, 2023, through December 31, 2023	$ 585
2024	1,106
2025	564
2026	460
Total lease payments	2,715
Less: interest	(182)
Present value of lease liabilities	2,533
Current operating lease liabilities	1,067	$ 1,037
Long-term operating lease liabilities	1,466	$ 1,938
Operating Lease, Liability	$ 2,533

v3.23.2

Note 8 - Debt (Details Textual) - Banc of America Leasing and Capital [Member] - Equipment Loan Arrangement [Member] - Line of Credit [Member] $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)
Debt, Weighted Average Interest Rate	3.80%	3.80%
Interest Expense	$ 5	$ 10
Long-Term Debt, Weighted Average Interest Rate, at Point in Time	3.80%	3.80%
Long-Term Debt	$ 453	$ 453

v3.23.2

Note 8 - Debt and Other Financing Arrangements - Schedule of Debt Repayments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Less: current portion of long-term debt from equipment financing	$ (299)	$ (294)
Long-term debt from equipment financing, net of current portion	154	$ 305
Equipment Loan Arrangement [Member]
July 1, 2023, through December 31, 2023	148
2024	305
Long-term debt from equipment financing	453
Less: current portion of long-term debt from equipment financing	(299)
Long-term debt from equipment financing, net of current portion	$ 154

v3.23.2

Note 9 - Revenue - Revenue by Major Source (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues	$ 5,537	$ 6,513	$ 11,396	$ 13,021
Testing [Member]
Revenues	4,614	5,480	9,552	11,204
Shipping/Collection (Hair) [Member]
Revenues	897	1,001	1,795	1,751
Other Revenue [Member]
Revenues	$ 26	$ 32	$ 49	$ 66

v3.23.2

Note 10 - Significant Customers (Details Textual) - Customer Concentration Risk [Member]	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Revenue Benchmark [Member]
Number of Major Customers	0
Accounts Receivable [Member]
Number of Major Customers		1
Accounts Receivable [Member] | Customer One [Member]
Concentration Risk, Percentage	26.00%	16.00%

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