Item 7.01. Regulation FD Disclosure.
The information provided in Item 8.01 of this
Current Report on Form 8-K is incorporated herein by reference in its entirety.
The information discussed under Item 8.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated
by reference in any filing by the Company under the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in such a filing.
Item 8.01
Enzo
Biochem, Inc. (the “Company”) is filing this Current Report on Form 8-K to provide an update related to trends affecting
its business.
As
a novel strain of coronavirus (“COVID-19”) continues to spread and severely impact the economy of the United States
and other countries around the world, the Company has made substantial investments to expand the amount of COVID-19 testing available
and is currently offering direct testing at its drive-through testing facilities as well as accepting tests for processing at its
clinical laboratory. The Company and its employees are committed to being a part of the coordinated public and private sector response
to this unprecedented challenge. The Company has also put preparedness plans in place at its facilities to maintain continuity
of operations, while also taking steps to keep colleagues and customers healthy and safe.
In
March 2020, the Company experienced a material decline in its laboratory testing volumes due to the COVID-19 pandemic as patients
have reduced physician office visits. Additionally, customers have reduced or suspended purchases or temporarily closed and/or
reduced operations on a global basis. The COVID-19 impact is consistent with the overall industry and publicly issued statements from competitors,
partners, and vendors. This decline is expected to continue through the remainder of the third fiscal quarter (ending
April 30, 2020) and into the beginning of the fourth fiscal quarter. Federal, state and local governmental policies and initiatives
designed to reduce the transmission of COVID-19 have resulted in, among other things, the aforementioned significant reduction
in physician office visits, the cancelation of elective medical procedures, customers closing or severely curtailing their operations
(voluntarily or in response to government orders), and the adoption of work-from-home or shelter-in-place policies. The Company
believes the COVID-19 pandemic may continue to have an impact on the Company’s operating results, cash flows and financial
condition. Global supply chain issues due to the pandemic may hamper both production of products within the life science
division as well as testing capabilities in the clinical laboratory. It is possible that the Company may experience an adverse
impact on cash collections from customers, clients and payers as a result of the impact of the COVID-19 pandemic.
The
Company expects COVID-19 related products and services to partially offset revenue declines. Enzo has publicly announced that it
is applying its technical expertise in molecular diagnostics to develop a next generation COVID-19 testing option. Enzo’s
innovations include virus-inactivating specimen collection media to lessen transmission risks for healthcare providers and clinical
laboratory personnel, the development of more relevant positive controls for the tests, and improved sensitivity. However, it is
too early to determine the positive impact from increased testing and the Company’s proprietary product offerings on revenue,
profitability and cash flow.
The
Company has nearly $48 million in cash on its balance sheet (as of March 31st 2020) and, excluding mortgage obligations,
no long-term debt. Enzo believes COVID-19’s impact on its operating results, cash flows and/or financial condition will be
primarily driven by: (1) the severity and duration of the COVID-19 pandemic; (2) the COVID-19 pandemic’s impact on the U.S.
healthcare system and the U.S. economy; and (3) the timing, scope and effectiveness of federal, state and local governmental responses
to the COVID-19 pandemic. These primary drivers are beyond the Company’s knowledge and control, and as a result, at this
time the Company cannot reasonably estimate the adverse impact the COVID-19 pandemic will have on its businesses, operating results,
cash flows and/or financial condition, but the adverse impact may be material.
Our disclosure
in this report contains forward-looking information about our Company’s financial results and estimates, business prospects
and products in research and development that involve substantial risks and uncertainties. From time to time, we also may provide
oral or written forward-looking statements in other materials we release to the public. Forward-looking statements give our current
expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic
or current facts. They use words such as “anticipate”, “estimate”, “expect”, “project”,
“intend”, “plan”, “believe”, “will”, and other words and terms of similar meaning
in connection with any discussion of future operations or financial performance.
In particular, these include statements relating to future actions,
prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses,
interest rates, foreign currency rates, intellectual property matters, the outcome of contingencies, such as legal proceedings,
and financial results. We cannot guarantee that any forward-looking statement will be realized, although we believe we have been
prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions.
Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could
vary materially from past results and those anticipated, estimated or projected. As a result, investors are cautioned not to place
undue reliance on any of our forward-looking statements. Investors should bear this in mind as they consider forward-looking statements.
We do not assume any obligation to update or revise any forward-looking statement that we make, even if new information becomes
available or other events occur in the future. We are also affected by other factors that may be identified from time to time in
our filings with the Securities and Exchange Commission, some of which are set forth in Item 1A - Risk Factors in our Form 10-K
filing for the July 31, 2019 fiscal year. You are advised to consult any further disclosures we make on related subjects in our
Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Although we have attempted to provide a list of important
factors which may affect our business, investors are cautioned that other factors may prove to be important in the future and could
affect our operating results.
You should understand that it is not possible to predict or identify
all such factors or to assess the impact of each factor or combination of factors on our business. Consequently, you should not
consider any such list to be a complete set of all potential risks or uncertainties.