Renalytix plc
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 19, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0000950170-24-060033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0000950170-24-128687
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 138 current paragraphs.
40 unchanged; 46 reworded; 51 added; 53 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
We are deploying kidneyintelX.dkd to patient populations with DKD on a regional basis through partnerships with healthcare systems and insurance payors that provide coverage to those healthcare systems’ patients. In June 2024 , Medicare issued a final Local Coverage Determination (“LCD”) for the Company’s kidneyintelX.dkd testing and is effective for dates of service on or after August 1, 2024. The established Medicare price for kidneyintelX.dkd is $950 per test. Distinct CPT Codes (Common Procedural Terminology Codes) have been established for kidneyintelX.dkd and is published in CMS’ 2024 Clinical Lab Fee Schedule. The LCD specifies coverage for use of kidneyintelX.dkd for patients with diagnosed Type 2 diabetes and Stage 1-3b Chronic Kidney Disease is reasonable and necessary. The LCD was issued by National Government Services (“NGS”). NGS is a subsidiary of Elevance Health, Inc. (previously Anthem, Inc.), a Medicare Administrative Contractor responsible for claims processing for testing performed in the Company’s New York City laboratory.
Current report
There is always the possibility that a change in the regulatory or reimbursement landscape can have an impact on our ability to deliver commercial kidneyintelX.dkd testing services in the United States, maintain the current and anticipated costs and services reportable result turnaround times. Any of the aforementioned changes could materially alter our revenue projections.
Current report
Launched FDA approved kidneyintelX.dkd testing services to replace laboratory developed testing developed services
Current report
Began receiving Medicare reimbursement under formal Local Coverage Determination
Current report
New leadership with a track record of commercial success
Current report
Revamped sales and customer service strategy to focus on health care systems leveraging electronic health records and implementation of a scalable sales-force-led or “direct-to-doctor” strategy
Current report
Now demonstrating quarter-over-quarter sales growth and repeat doctor testing
Current report
Major new kidneyintelX.dkd integrated commercial testing implementation with a large New York area physician practice, with test ordering and processing having commenced during September 2024
Current report
Significant expansion in patient blood draw options in combination with a simplified test order requisition form to reduce doctor workload
Current report
Improvements implemented in customer service and test services billing to improve end-to-end user experience.
Current report
Nasdaq delisting with American Depository Shares ("ADSs") now quoted on the OTCQB® Venture Market under symbol (OTCQB: RNLXY), and anticipated transition to Foreign Private Issuer (“FPI”) status to provide significant potential savings of up to $2.5 million annually when fully implemented
Current report
Subsequent to quarter end, completed over-subscribed equity capital Fundraise raising approximately $14.9 million, net of expenses, with strong demand exceeding our initial funding target of $13 million.
Current report
Board changes:
Current report
Julian Baines, MBE, an experienced executive within the life science industry and former Renalytix Non-Executive Chairman of the Company from March 2018 to June 2020, reappointed as Executive Chairman
Current report
Daniel Levangie, Non-Executive Director has stepped down from the Board of Renalytix effective October 31, 2024
Current report
Cost of Revenue
Current report
General and Administrative Expenses
Current report
Fair Value Adjustments to VericiDx Investment
Current report
Fair Value Adjustment on Convertible Notes
Current report
We elected to account for the bonds at fair value with qualifying changes in fair value recognized through the consolidated statements of operations and comprehensive loss until the notes are settled.
Current report
Cost of Revenue
Current report
General and Administrative Expenses
Current report
In connection with the delisting of our ADSs from Nasdaq effective on October 7, 2024, and our ADSs becoming quoted on the OTC Markets’ OTCQB tier effective on October 8, 2024, we anticipate that we will requalify as a foreign private issuer (“FPI”) at our next testing date for FPI status. As a foreign private issuer, we expect annual cost savings of up to $1.5 million from a reduction in regulatory filing costs, professional fees (audit, legal, and consulting), listing fees, insurance and other administrative costs when fully implemented.
Current report
Fair Value Adjustments to VericiDx Investment
Current report
Fair Value Adjustment on Convertible Notes
Current report
November 2024 Debt Restructurings
Current report
In connection with the Company's previously equity fundraising (the “Fundraise”), the Company also announced a revision to the terms of its £8.7 million amortizing senior convertible bond (the “Convertible Bond”) held by a fund advised by Heights Capital Ireland LLC (the "Convertible Bond Investor"), subject to the closing of the Fundraise which closed in two tranches on October 7,
Current report
2024 and November 4, 2024. Under the completed terms, the Convertible Bond was partially repaid and restructured as follows: (i) £2.97 million of the Convertible Bond was converted to equity via issue to the Convertible Bond Investor of 33 million ordinary shares (the “Heights Conversion Shares”), at 9 pence per share price (the “Issue Price”) being offered in the Fundraise; and (ii) the balance of the Convertible Bond was restructured as a new unsecured convertible bond (the “New Convertible Bond”). The Heights Conversion Shares issued to the Convertible Bond Investor represented 9.9% of the Company’s enlarged issued share capital at such time. The Convertible Bond Investor is subject to a 6-month lock-up.
Current report
The New Convertible Bond will accrue interest quarterly at a rate of 5.5% per annum if paid in cash, or 7.5% per annum if rolled into the principal amount of the outstanding, at the discretion of the Company. The New Convertible Bond has maturity date of July 31, 2029 and may not be converted before April 1, 2026, except in the event that the Company undertakes a further qualifying equity issuance in the future (which would exclude securities properly issued to employees and other staff of the Company for bona fide remuneration and incentivisation purposes). The New Convertible Bond can be redeemed as follows:
Current report
at any time from April 1, 2026, a holder of the New Convertible Bond can redeem any or all of the New Convertible Bond at a conversion price (subject to customary adjustment provisions) equal to 250% of the Issue Price;
Current report
in the event of a change of control of the Company or if the ordinary shares cease to be admitted to trading on AIM or the Main Market of the London Stock Exchange (or if dealing in the ordinary shares is suspended, other than in connection with a corporate reorganization, for a period of 60 dealing days or more) or in the event that less than 20% of the Company’s issued share capital (including ADSs) comprises free float, a holder of the New Convertible Bond can require the Company to redeem all but not some of their New Convertible Bond at a conversion price equal to 120% of the principal amount of the New Convertible Bond (together with accrued but unpaid interest); and
Current report
at any time, the Company can elect to redeem all, but not some, of the principal amount of the New Convertible Bond at a price equal to the greater of (i) the principal amount and all accrued but unpaid interest and (ii) the “parity value” of the New Convertible Bond. For this purpose, the “parity value” is the product of: (a) such number of ordinary shares as would have been issued on conversion and the mean volume weighted average price of an ordinary share on the ten consecutive dealing days preceding the date on which such redemption is to occur.
Current report
Additionally, an accounts payable balance with a professional adviser of $750,000 (the “Advisor Accounts Payable Balance”) has been restructured such that $425,000 of the outstanding balance has been converted to equity at the Issue Price. The remaining $325,000 has been converted to a long term unsecured note (the “Advisor Loan Note”), bearing interest at 5% per annum, which will be rolled into the principal amount of the Advisor Loan Note. The principal and interest of the Advisor Loan Note will be repaid on the earlier of: (i) 5 years from the issuance of the Advisor Loan Note; or (ii) such earlier time as the Company is acquired by another company. Additionally, the Company has the right to redeem the Advisor Loan Note at any time without prepayment penalties.
Current report
The Company believes that the restructuring of the Convertible Bond and the Advisor Accounts Payable Balance, the creation of the New Convertible Bond and the Advisor Loan Note and the Creditor Write-offs, along with some ancillary debt restructuring, will substantially reduce the Company’s monthly cash burn.
Current report
The ordinary shares issued pursuant to the debt restructuring described in this section are approximately 36.5 million ordinary shares which were issued on November 4, 2024.
Current report
Equity Financings
Current report
The Company received commitments from existing and new investors to raise £11.8 million through a subscription of 131,161,556 new ordinary shares at 9 pence per share. The equity financing commitments closed in two tranches, the first on October 8, 2024 and the second on November 4, 2024 with all net proceeds received by the Company on the closing dates.
Current report
the growth and uptake of kidneyintelX.dkd by doctors;
Current report
the cost and supply of reagents for kidneyintelX.dkd;
Current report
We have limited sources of revenue to provide incoming cash flows to sustain our future operations. As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to increase our testing revenue and the effectiveness of our expense management and other capital preservation measures. As discussed Note 16, Subsequent Events to the financial statements, subsequent to the end of the quarter ended September 30, 2024, the Company raised approximately $14.9 million, net of expenses, from additional rounds of equity in October and November 2024 and concurrently restructured a number of liabilities on the balance sheet. This additional equity funding, the reduction of cash expenses related to the Company’s liabilities, and an overall reduction in General and Administrative Expenses, have significantly changed the Company’s financial position. While the Company intends that this capital will be sufficient to fund the company through to cash flow positive operations, there can be no guarantee to that outcome.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Removed paragraphs (53)
Previous report
We are deploying KidneyIntelX to patient populations with DKD on a regional basis through partnerships with healthcare systems and insurance payors that provide coverage to those healthcare systems’ patients. Following the receipt of national Medicare pricing at $950 per reportable test for KidneyIntelX in January 2020, we are actively pursuing Medicare coverage and a determination under the MolDX Program. In March 2020, we announced that our application for a Medicare PTAN was approved by Noridian Healthcare Solutions, the regional Medicare Administrative Contractor with responsibility for overseeing facilities and providers located in the western United States, and, as a result, we are now qualified as a provider and can bill for services provided to patients with Medicare and Medicaid health insurance coverage in the United States. In addition, in October 2019, Capital District Physicians’ Health Plan, Inc., a physician-led health insurance payor in New York, adopted coverage determination policies that provide insurance for certain patients with DKD who are tested with KidneyIntelX. We are working with additional private insurance payors and healthcare providers to expand insurance coverage for KidneyIntelX nationwide, which we believe will be accelerated by our recent achievement of a CPT code and national Medicare pricing.
Previous report
During fiscal year 2023, we returned to conducting business as usual after the COVID-19 pandemic, with necessary or advisable modifications to employee travel and employee work locations. We continue to monitor the situation related to COVID-19 and may take actions that alter our business operations to the extent that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, partners and shareholders.
Previous report
KidneyIntelX included as only biomarker test for prognostic risk assessment in landmark update of international clinical practice guidelines (https://kdigo.org/guidelines/)
Previous report
Medicare Local Coverage Determination draft issued for FDA-authorized kidneyintelX.dkd by Medicare contractor National Government Services (NGS) with final issuance expected in the near term
Previous report
Formal launch of the FDA-authorized kidneyintelX.dkd in April 2024
Previous report
Customer experience improvements implemented including simplified physician order requisition, increased patient access to national blood draw network, revamped marketing and education materials
Previous report
New primary care sales force completed its first quarter of operations with a 33% quarter over quarter increase in independent primary care physician test order volume during the three months ended March 31, 2024
Previous report
Appointed Howard Doran to president concurrent with organizational changes to focus to accelerating sales and marketing of FDA-authorized kidneyintelX.dkd test
Previous report
Formal strategic sale process initiated with multiple potential acquirers now in discussions
Previous report
Completed common stock equity financings raising aggregate gross proceeds of $13.5 million (including post-period activity)
Previous report
Continued operating expense reduction with 50% year-over-year reduction in head count and approximately 40% total lower operating costs
Previous report
With FDA and clinical guidelines achieved, process initiated for potential ex-U.S. partners to improve non-dilutive company cash position and expand incremental sales opportunities
Previous report
U.S. government added the FDA-authorized kidneyintelX.dkd to 10-year Government-wide Acquisition Contract (GWAC) at a price of $950 per reportable result. The contract covers tests provided by any government healthcare facility
Previous report
Total volume of 806 tests during the quarter, of which 82% were billable
Previous report
NASDAQ Notices
Previous report
On December 22, 2023, we received two written notices from The Nasdaq Stock Market, or Nasdaq, notifying us that (i) because the closing bid price for our ADSs was below $1.00 per ADS for at least 30 consecutive business days, we did not meet the $1.00 per ADS minimum bid price requirement of Nasdaq Listing Rule 5450(a)(1) the (“Minimum Bid Price Requirement”) and (ii) we are not in compliance with the requirement to maintain a minimum market value of listed securities (the “MVLS”) of $50,000,000 for continued listing on The Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Requirement”).
Previous report
The Notices have no immediate impact on the continued listing or trading of our ADSs on The Nasdaq Global Market, which will continue to be listed and traded on The Nasdaq Global Market, subject to our compliance with the other continued listing requirements.
Previous report
Pursuant to Nasdaq Listing Rule 5810(c)(3)(A) and Nasdaq Listing Rule 5810(c)(3)(C), we have a compliance period of 180 calendar days, or until June 19, 2024 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement and the MVLS Requirement. To regain compliance with the Minimum Bid Price Requirement, the closing bid price of the ADSs must be at least $1.00 per ADS for a minimum of ten consecutive business days prior to the end of the Compliance Period. To regain compliance with the MVLS Requirement, our MVLS must close at $50,000,000 or more for a minimum of ten consecutive business days prior to the end of the Compliance Period.
Previous report
If we do not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period, we may be eligible for an additional 180 calendar day period to regain compliance during which we may transfer to The Nasdaq Capital Market, provided that we meet the applicable market value of publicly held shares requirement for continued listing and all other applicable requirements for initial listing thereon (except for the bid price requirement) based on our most recent public filings and market information and notify Nasdaq of our intent to cure the minimum bid price deficiency. If we meet the applicable requirements, Nasdaq may inform us that we have been granted an additional 180 calendar days to regain compliance with the Minimum Bid Price Requirement. If, however, it appears to Nasdaq that we will not be able to cure the minimum bid price deficiency, or if we are otherwise not eligible for listing on The Nasdaq Capital Market, Nasdaq could provide notice that our ADSs will become subject to delisting. In such event, Nasdaq rules would permit us to appeal the delisting determination to a Nasdaq Hearings Panel.
Previous report
If we do not regain compliance with the MVLS Requirement by the end of the Compliance Period, Nasdaq will notify us that our securities are subject to delisting, at which point we may appeal the delisting determination to a Nasdaq hearings panel. We may also choose to transfer the listing of our ADSs to The Nasdaq Capital Market. In order to transfer, we must submit an on-line transfer application, pay a $5,000 application fee and meet The Nasdaq Capital Market’s continued listing requirements.
Previous report
We intend to actively monitor our MVLS and the closing bid price of our ADS and may, if appropriate, implement available options to regain compliance with the MVLS Requirement and the Minimum Bid Price Requirement. There can be no assurance that we will be able to regain compliance with the MVLS Requirement or the Minimum Bid Price Requirement or maintain compliance with any other listing requirements.
Previous report
The successful commercialization of KidneyIntelX is uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including:
Previous report
the uncertainty of the scope, progress, costs and results of clinical validation studies and other research and development activities;
Previous report
the cost of manufacturing clinical supply of KidneyIntelX;
Previous report
the efficacy and potential advantages of KidneyIntelX compared to alternative solutions, including any standard of care, and our ability to achieve market acceptance for KidneyIntelX;
Previous report
continuing to expand study data for KidneyIntelX, including data demonstrating the clinical utility over the short, intermediate and long term use of KidneyIntelX in different clinical settings;
Previous report
raising necessary additional funds to continue operations; and
Previous report
A change in the outcome of any of these variables could result in a significant change in the costs and timing associated with our related development.
Previous report
Impairment loss on property, equipment and other long-lived assets
Previous report
On a quarterly basis, the respective carrying value of non-financial assets are assessed for impairment indicators and, if ultimately considered impaired, are adjusted and written down to their fair value, as estimated based on consideration of external market participant assumptions.
Previous report
We elected to account for the Bonds (as defined below) at fair value with qualifying changes in fair value recognized through the statements of operations until the notes are settled.
Previous report
Research and development expenses decreased by $1.7 million from $3.9 million for the three months ended March 31, 2023 to $2.2 million for the three months ended March 31, 2024. The decrease was attributable to a $1.3 million decrease related to external R&D projects and studies with Mount Sinai, Wake Forest and Joslin, a decrease of $0.3 million in employee compensation and related benefits, and a $0.1 million decrease in other operating expenses as we continued to implement cost-saving measures.
Previous report
Impairment Loss on Property, Equipment and Other Long-Lived Assets
Previous report
As part of our cost saving plan, we consolidated lab operations which resulted in a $0.3 million impairment of property and equipment at our Florida lab and a $0.1 million impairment of the Utah right-of-use asset for the three months ended March 31, 2024. There was no impairment loss on property, equipment and other long-lived assets in the three months ended March 31, 2023.
Previous report
Foreign Currency Gain (Loss)
Previous report
Consolidated Results of Operations
Previous report
Comparison of nine months ended March 31, 2024 and 2023
Previous report
Revenue
Previous report
During the nine months ended March 31, 2024, we recognized $1.7 million of revenue related to sales of KidneyIntelX and $0.04 million of pharmaceutical services revenue related to services performed for Eli Lilly and Company. During the nine months ended March 31, 2023, we recognized $2.7 million revenue related to sales of KidneyIntelX and $0.2 million of pharmaceutical services revenue related to services performed for AstraZeneca. The $1.2 million decrease in revenue was primarily driven by a $1.0 million decrease in KidneyIntelX billable testing volumes due to the transition to a commercial billing structure under our arrangement with Mount Sinai and a decrease of $0.2 million of pharmaceutical services revenue.
Previous report
During the nine months ended March 31, 2024, we recognized cost of revenue of $1.6 million primarily attributable to KidneyIntelX testing, including labor, lab consumables and sample collection costs related to revenue generating activities. We recognized $2.0 million of cost of revenue for the nine months ended March 31, 2023. The $0.4 million decrease in cost of revenue was primarily driven by a decrease in KidneyIntelX billable testing volumes.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (46)
Previous wording
Renalytix is focused on providing doctors around the world with a safe, reliable and effective tool to identify which patients are or are not in danger of losing significant kidney function and falling into kidney failure and may require long-term dialysis or kidney transplant. Chronic kidney disease is one of the largest urgent medical needs, globally affecting an estimated 850 million people, and is responsible for an unsustainable and growing societal cost burden.
Current wording
Renalytix is focused on providing doctors around the world with a safe, reliable and effective tool to identify which patients are or are not in danger of losing significant kidney function and falling into kidney failure and may require long-term dialysis or a kidney transplant. Chronic kidney disease is one of the largest urgent medical needs, globally affecting an estimated 850 million people, and is responsible for an unsustainable and growing societal cost burden.
Previous wording
At Renalytix, we developed kidneyintelX.dkd, the first U.S. Food and Drug Administration ("FDA"), authorizedin vitro prognostic test that uses an artificial intelligence-enabled algorithm to aid in assessment of the risk of progressive decline in kidney function. The test is designed to predict early in the progression of kidney disease who is at risk for significant sustained decline in kidney function. Prognostic tests, such as kidneyintelX.dkd, are not intended for diagnosing any disease or for monitoring disease progression or the effect of any therapeutic product. Rather, prognostic tests are intended to be used in conjunction with other clinical and diagnostic findings and consistent with professional standards of practice, including information obtained by alternative methods, and clinical evaluation, as appropriate. When used as intended, potential interventions can be considered early, ideally before major damage is done and when treatments can be most effective. KidneyintelX.dkd is part of a family of clinical tests being developed from the KidneyIntelX technology platform developed using technology licensed from the Icahn School of Medicine at Mount Sinai in New York, the Joslin Diabetes Center in Boston and under development through U.S. and international collaborations.
Current wording
At Renalytix, we have developed kidneyintelX.dkd, the first U.S. Food and Drug Administration ("FDA") authorizedin vitro prognostic test that uses an artificial intelligence-enabled algorithm to aid in assessment of the risk of progressive decline in kidney function. The test is designed to predict early in the progression of kidney disease who is at risk for significant sustained decline in kidney function. Prognostic tests, such as kidneyintelX.dkd, are not intended for diagnosing any disease or for monitoring disease progression or the effect of any therapeutic product. Rather, prognostic tests are intended to be used in conjunction with other clinical and diagnostic findings and consistent with professional standards of practice, including information obtained by alternative methods, and clinical evaluation, as appropriate. When used as intended, potential interventions can be considered early, ideally before major damage is done and when treatments can be most effective. KidneyintelX.dkd is part of a family of clinical tests being developed from the KidneyIntelX technology platform developed using technology licensed from the Icahn School of Medicine at Mount Sinai in New York, the Joslin Diabetes Center in Boston and under development through U.S. and international collaborations.
Previous wording
Since our inception in March 2018, we have focused primarily on organizing and staffing our company, raising capital, developing the KidneyIntelX platform, conducting clinical validation studies for KidneyIntelX, establishing and protecting our intellectual property portfolio and commercial laboratory operations, pursuing regulatory approval and developing our reimbursement strategy. We have funded our operations primarily through equity and debt financings.
Current wording
Since our inception in March 2018, we have focused primarily on organizing and staffing our company, raising capital, developing KidneyIntelX technology, conducting clinical validation studies for kidneyintelX.dkd, establishing and protecting our intellectual property portfolio and commercial laboratory operations, pursuing regulatory approval, developing our reimbursement strategy and commercializing our testing services. We have funded our operations primarily through equity and debt financings.
Previous wording
Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the COVID-19 pandemic, rising inflation and U.S. and U.K. interest rates and the Russia-Ukraine and Hamas-Israel armed conflicts and related developments, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors.”
Current wording
Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including conflicts in Ukraine-Russia and Middle East, increased inflation rates and U.S. and U.K. interest rates, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” in the Company's Annual Report on Form 10-K.
Previous wording
In May 2018, we entered into the Mount Sinai Agreement, with Mount Sinai, pursuant to which we obtained a worldwide, royalty-bearing, exclusive license under certain patents and a worldwide, royalty-bearing, non-exclusive license under certain know-how of Mount Sinai to develop and commercialize licensed products in connection with the application of artificial intelligence for the diagnosis of kidney disease. Pursuant to the terms of the Mount Sinai Agreement, we are obligated to use commercially reasonable efforts in connection with the development and commercialization of the licensed products, including in accordance with specified diligence milestones.
Current wording
In May 2018, we entered into the Mount Sinai Agreement, with Mount Sinai, pursuant to which we obtained a worldwide, royalty-bearing, exclusive license under certain patents and a worldwide, royalty-bearing, non-exclusive license under certain know-how of Mount Sinai to develop and commercialize licensed products in connection with the application of artificial intelligence for the diagnosis of kidney disease. Pursuant to the terms of the Mount Sinai Agreement, we are obligated to use commercially reasonable efforts in connection with the development and commercialization of the licensed technologies, including in accordance with specified diligence milestones.
Previous wording
We paid Mount Sinai $10.0 million as an up-front payment upon entering into the Mount Sinai Agreement. Under the terms of the Mount Sinai Agreement, we are obligated to pay Mount Sinai $1.5 million and $7.5 million in commercial milestone payments upon achieving worldwide net sales of KidneyIntelX of $50.0 million and $300.0 million, respectively. We are also obligated to pay Mount Sinai a 4% to 5% royalty on net sales of KidneyIntelX, subject to customary reductions. Royalties are payable on a product-by-product basis from first commercial sale of such product until the later of (1) expiration of the last valid claim of a licensed patent covering such product or (2) on a country-by-country basis, 12 years from first commercial sale of such product in such country. Moreover, we are obligated to pay Mount Sinai between 15% and 25% of any consideration received by us from a sublicensee. The two provisional patent applications covering the KidneyIntelX diagnostic in-licensed under the Mount Sinai Agreement were filed in February 2020 and April 2020, respectively. If issued, these patents will expire in February 2041 and April 2041, respectively. Furthermore, we agreed to carry out and fund a clinical utility study for KidneyIntelX at a total estimated cost of $10.7 million.
Current wording
Under the terms of the Mount Sinai Agreement, we are obligated to pay Mount Sinai $1.5 million and $7.5 million in commercial milestone payments upon achieving worldwide net sales of kidneyintelX.dkd testing services of $50.0 million and $300.0 million, respectively. We are also obligated to pay Mount Sinai a 4% to 5% royalty on net sales of kidneyintelX.dkd, subject to customary reductions. Royalties are payable on a product-by-product basis from first commercial sale of such product until the later of (1) expiration of the last valid claim of a licensed patent covering such product or (2) on a country-by-country basis, 12 years from first commercial sale of such product in such country. Moreover, we are obligated to pay Mount Sinai between 15% and 25% of any consideration received by us from a sublicensee. The two provisional patent applications covering the KidneyIntelX diagnostic in-licensed under the Mount Sinai Agreement were filed in February 2020 and April 2020, respectively.
Previous wording
During the nine months ended March 31, 2024, we continued to deploy KidneyIntelX to patient populations with DKD, on a regional basis through partnerships with healthcare systems and insurance payors that provide coverage to those healthcare systems’ patients. If these strategic partners fail to meet their key contractual obligations or to purchase KidneyIntelX tests, that will likely have an adverse effect on us and our ability to achieve our commercial objectives, potentially including the attainment of sales volumes leading to profitability.
Current wording
During the three months ended September 30, 2024 and 2023, we continued to deploy kidneyintelX.dkd to patient populations with DKD, on a regional basis through partnerships with healthcare systems and insurance payors that provide coverage to those healthcare systems’ patients. If these strategic partners fail to meet their key contractual obligations or to purchase kidneyintelX.dkd tests, it will likely have an adverse effect on us and our ability to achieve our commercial objectives, potentially including the attainment of sales volumes leading to profitability.
Previous wording
During the nine months ended March 31, 2024, cost of revenue consists of costs directly attributable to the KidneyIntelX testing and services rendered, including labor, lab consumables and sample collection costs directly related to revenue generating activities.
Current wording
During the three months ended September 30, 2024 and 2023, cost of revenue consists of costs directly attributable to the kidneyintelX.dkd testing and services rendered, including labor, lab consumables and sample collection costs directly related to revenue generating activities.
Previous wording
Research and development costs consist primarily of costs incurred in connection with the development of KidneyIntelX. We are currently continuing to conduct clinical utility and other studies for KidneyIntelX to determine clinical value and performance in different CKD populations. We expense research and development costs as incurred. Because we have limited resources and access to capital to fund our operations, we must decide which diagnostic product to pursue and the amount of resources to allocate to each. As such, we have been focused primarily on the development of KidneyIntelX and studies to further demonstrate the clinical utility of KidneyIntelX.
Current wording
Research and development costs consist primarily of costs incurred in connection with the development of KidneyIntelX technology. We are continuing to conduct limited clinical utility and other studies for kidneyintelX.dkd to expand long-term, prospective clinical value and performance in chronic kidney disease. We expense research and development costs as incurred.
Previous wording
General and administrative expenses consist principally of salaries and other personnel-related costs including share-based compensation; professional fees for accounting, auditing, tax and administrative consulting services; legal fees relating to patent and corporate matters; administrative travel expenses; insurance costs; marketing expenses and other operating costs. Additionally, general and administrative expenses include the cost of maintaining our admission to AIM and Nasdaq.
Current wording
General and administrative expenses consist principally of salaries and other personnel-related costs including share-based compensation; professional fees for accounting, auditing, tax and administrative consulting services; legal fees relating to patent and corporate matters; administrative travel expenses; insurance costs; marketing expenses and other operating costs. Additionally, general and administrative expenses include the cost of maintaining our admission to AIM, Nasdaq and OTC trading.
Previous wording
In October 2020, we completed a spin off VericiDx plc. ("VericiDx"), a developer of advanced clinical diagnostics for organ transplant and retained 9,831,681 ordinary shares of VericiDx. We account for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the income statement. In March 2024, we sold 750,000 ordinary shares of VericiDx for net proceeds of $0.1 million and a realized loss of $0.1 million. As of March 31, 2024, we own 9,081,681 shares of VericiDx.
Current wording
In October 2020, the Company completed a spinoff of VericiDx, a developer of advanced clinical diagnostics for organ transplant and retained 9,831,681 ordinary shares of VericiDx. The Company accounts for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. As of September 30, 2024, the Company owns 8,581,682 shares of VericiDx
Previous wording
Other income relates to interest income earned on our cash deposits and grant income earned for work performed under the Horizon Europe grant.
Current wording
Other income relates to interest income earned on our cash deposits, grant income earned for work performed under the Horizon Europe grant and other services provided to academic institutions or pharmaceutical companies. Other expense relates to realized loss on the sale of VericiDx shares.
Previous wording
During the three months ended March 31, 2024, we recognized $0.5 million of revenue related to sales of KidneyIntelX and $0.04 million of pharmaceutical services revenue related to services performed for Eli Lilly and Company. During the three months ended March 31, 2023, we recognized $0.7 million revenue related to sales of KidneyIntelX and zero pharmaceutical services revenue. The $0.2 million decrease in revenue was primarily driven by a decrease in KidneyIntelX billable testing volumes due to the transition to a commercial billing structure under our arrangement with Mount Sinai.
Current wording
During the three months ended September 30, 2024, we recognized $0.52 million of revenue related to sales of KidneyIntelX. During the three months ended September 30, 2023, we recognized $0.46 million revenue related to sales of KidneyIntelX.
Previous wording
During the three months ended March 31, 2024, we recognized cost of revenue of $0.6 million primarily attributable to KidneyIntelX testing, including labor, lab consumables and sample collection costs related to revenue generating activities. We recognized $0.6 million of cost of revenue for the three months ended March 31, 2023.
Current wording
During the three months ended September 30, 2024, we recognized cost of revenue of $0.4 million primarily attributable to KidneyIntelX testing, including labor, lab consumables and sample collection costs related to revenue generating activities. We recognized $0.5 million of cost of revenue for the three months ended September 30, 2023.
Previous wording
Research and development expenses decreased by $2.8 million from $11.0 million for the nine months ended March 31, 2023 to $8.2 million for the nine months ended March 31, 2024. The decrease was attributable to a $2.2 million decrease in employee compensation and related benefits, a $1.0 million decrease related to external R&D projects and studies with Mount Sinai, Wake Forest and Joslin, offset by a $0.2 million increase related to consulting and professional fees, and $0.2 million increase in other miscellaneous expenses.
Current wording
Research and development expenses decreased by $1.9 million from $2.8 million for the three months ended September 30, 2023 to $0.9 million for the three months ended September 30, 2024. The decrease was attributable to a $1.7 million decrease related to external R&D projects and studies with Mount Sinai and Wake Forest, $0.2 million decrease related to consulting and professional fees, $0.1 million decrease in other miscellaneous expenses, offset by $0.2 million increase in compensation and related benefits.
Previous wording
General and administrative expenses decreased $6.9 million from $22.2 million for the nine months ended March 31, 2023 to $15.3 million for the nine months ended March 31, 2024. The decrease was driven by even further cost cutting measures, which resulted in a $5.2 million decrease in employee compensation and related benefits, including share-based payments, due to decreased headcount, $1.0 million decrease in insurance costs, $0.7 million decrease in other operating expenses, $0.5 million decrease in consulting and professional fees, and a $0.3 million decrease in marketing expenses, offset by a $0.8 million increase in legal fees. We have implemented a plan to further reduce payroll expenses and total general and administrative expenses while preserving our sales capacity.
Current wording
General and administrative expenses decreased $2.8 million from $6.0 million for the three months ended September 30, 2023 to $3.3 million for the three months ended September 30, 2024. The decrease was driven by even further cost cutting measures, which resulted in a $1.5 million decrease in compensation and related benefits, including share-based payments and bonuses, due to decreased headcount, $0.6 million decrease in consulting and professional fees, $0.2 million decrease in insurance costs, $0.2 million decrease in marketing, and $0.3 million decrease in other operating expenses. We have implemented a plan to further reduce payroll expense and total general and administrative expenses while preserving our sales capacity.
Previous wording
During the three months ended March 31, 2024, we recognized a foreign currency gain of $0.02 million due to exchange rate fluctuations on transactions denominated in a currency other than our functional currency, GB Pounds. During the three months ended March 31, 2023, we recognized a foreign currency loss of $0.5 million primarily attributable to cash balances denominated in currencies other than our functional currency.
Current wording
During the three months ended September 30, 2024, we recognized a foreign currency gain of $0.04 million due to exchange rate fluctuations on transactions denominated in a currency other than our functional currency. During the three months ended September 30, 2023, we recognized a foreign currency gain of $0.3 million primarily attributable to cash balances denominated in currencies other than our functional currency, GB Pounds.
Previous wording
We account for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the income statement. During the three months ended March 31, 2024, we recorded a gain of $0.04 million to adjust the VericiDx investment to fair value. During the three months ended March 31, 2023, we recorded a gain of $0.1 million to adjust the VericiDx investment to fair value.
Current wording
We account for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the income statement. During the three months ended September 30, 2024, we recorded a gain of $0.1 million to adjust the VericiDx investment to fair value. During the three months ended September 30, 2023, we recorded a loss of $0.5 million to adjust the VericiDx investment to fair value.
Previous wording
We elected to account for the Bonds at fair value with qualifying changes in fair value recognized through the statements of operations until the notes are settled. This excludes fair value adjustments related to instrument-specific credit risk, which are recognized in Other Comprehensive Income (Loss). For the three months ended March 31, 2024, we recorded a loss of $1.2 million to adjust the Bonds to fair value. For the three months ended March 31, 2023, we recorded a loss of $1.2 million to adjust the Bonds to fair value. The change in fair value of the bond was driven by a decrease in term to maturity, increase in risk free rate and change in stock price.
Current wording
We elected to account for the bonds at fair value with qualifying changes in fair value recognized through the consolidated statements of operations and comprehensive loss until the notes are settled. This excludes fair value adjustments related to instrument-specific credit risk, which is recognized in other comprehensive income (OCI). For the three months ended September 30, 2024, we recorded a loss of $0.8 million to adjust the bonds to fair value. For the three months ended September 30, 2023, we recorded a loss of $1.2 million to adjust the bonds to fair value. The change in fair value of the bond was driven by a decrease in term to maturity, increase in risk free rate and change in stock price.
Previous wording
During the three months ended March 31, 2024, we recognized $0.05 million of other expenses which included $0.03 million of grant income and $0.02 million of interest income earned on our cash deposits, offset by $0.1 million of realized loss on the sale of VericiDx shares. During the three months ended March 31, 2023, we realized $0.3 million of other income related expense reimbursement and $0.03 million of interest income.
Current wording
During the three months ended September 30, 2024, we realized $0.01 million of other expense which included $0.014 million of interest income earned on our cash deposits and $0.024 million of grant income, offset by $0.042 million of realized loss on the sale of VericiDx shares. During the three months ended September 30, 2023, we realized $0.1 million of income related to interest income earned on our cash deposits
Previous wording
Since our inception, we have incurred net losses. We incurred net losses of $26.4 million and $34.5 million for the nine months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $204.7 million.
Current wording
Since our inception, we have incurred net losses. We incurred net losses of $4.7 million and $10.2 million for the three months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $216.5 million.
Previous wording
We expect to incur additional losses in the near future, and we expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to commercialize and scale KidneyIntelX, as we conduct our ongoing and planned clinical utility and other studies for KidneyIntelX for its commercial launch, develop and refine our artificial intelligence technology platform, seek and maintain regulatory clearances or approvals for KidneyIntelX or any other product we develop, establish and maintain partnerships with healthcare systems, pursue our coverage and reimbursement strategy, and continue to invest in our infrastructure to support our manufacturing and other activities. In addition, we expect to incur additional costs associated with operating as a public company in the United States. The timing and amount of our operating expenditures will depend largely on:
Current wording
We expect to incur additional losses in the near future, and we expect our expenses may increase in connection with our ongoing activities to further commercial scale of kidneyintelX.dkd testing services. While we expect our costs associated with operating as a public company in the United States to be reduced following our transition to OTC trading markets, there may be additional capital and professional resources required to satisfy ongoing US regulatory requirements. The timing and amount of our operating expenditures will depend largely on:
Previous wording
the cost, timing and outcome of commercialization activities, including manufacturing, marketing, sales and distribution, for KidneyIntelX;
Current wording
the cost, timing and outcome of identified and potential future commercialization activities, including manufacturing, marketing, sales and distribution, for KidneyIntelX technology;
Previous wording
the timing and amount of revenue received from commercial sales of KidneyIntelX;
Current wording
the timing and amount of future revenue received from commercial sales of kidneyintelX.dkd;
Previous wording
the sales price and availability of adequate third-party coverage and reimbursement for KidneyIntelX;
Current wording
the sales price and expansion of third-party coverage and reimbursement for kidneyintelX.dkd;
Previous wording
To date, we have primarily financed our operations through equity and debt financings. As of March 31, 2024, we had cash and cash equivalents of $4.7 million. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $204.7 million as of March 31, 2024. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of KidneyIntelX or any future products currently in development. As a result of our losses and our projected cash needs, substantial doubt exists about our ability to continue as a going concern within 12 months after the date that the financial statements are issued.
Current wording
To date, we have primarily financed our operations through equity and debt financings. As of September 30, 2024, we had cash and cash equivalents of $0.9 million. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $216.5 million as of September 30, 2024. We anticipate incurring additional losses until such time, if ever, that we can generate significant incremental sales of kidneyintelX.dkd or any future products currently in development.
Previous wording
Substantial additional capital will be necessary to fund our operations, expand our commercial activities and develop other potential diagnostic related products. We plan to finance our cash needs through a combination of revenue from sales, securities offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our shareholders.
Current wording
If we decide and to the extent that we could potentially raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our shareholders.
Previous wording
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or diagnostic products or grant licenses on terms that may not be favorable to us. Additional capital may not be available when needed, on reasonable terms, or at all, and our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may not be able to meet our obligations and we may be required to delay, curtail or discontinue our product development or future commercialization efforts, or grant rights to develop and market products that we would otherwise prefer to develop and market ourselves.
Current wording
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or diagnostic products or grant licenses on terms that may not be favorable to us. Additional capital may not be available when needed, on reasonable terms, or at all, and our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, curtail or discontinue our product development or future commercialization efforts, or grant rights to develop and market products that we would otherwise prefer to develop and market ourselves.
Previous wording
We have limited sources of revenue to provide incoming cash flows to sustain our future operations. As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to raise additional capital and the effectiveness of our cost-cutting and other capital preservation measures. Without additional financing, we expect our cash and cash equivalents as of March 31, 2024, combined with additional cost reduction options available, will be sufficient to fund our operating expenses and capital expenditure requirements into early fiscal fourth quarter. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect or may fail in our efforts to enact additional cost reduction options. Furthermore, our operating plan may change, and we may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization.
Current wording
We have based our future cash needs on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect or may fail in our efforts to enact additional cost reduction programs. Furthermore, our operating plan may change, and we may need additional funds sooner than planned in order to meet operational needs and capital requirements for product development and commercialization.
Previous wording
The following table shows a summary of our cash flows from operations for the periods indicated (in thousands):
Current wording
The following table shows a summary of our cash flows from operations for the periods indicated:
Previous wording
During the nine months ended March 31, 2024, net cash used in operating activities was $22.3 million and was primarily attributable to our $26.4 million net loss as well as $4.8 million of noncash charges and $0.7 million net change in our operating assets and liabilities. Noncash charges were primarily related to $2.3 million fair value adjustment related to the Bonds, $1.3 million in share-based compensation expense, $0.7 million of loss on write off of assets, $0.3 million of depreciation and amortization expense, and $0.2 million fair value adjustment on our VericiDx investment. The change in our operating assets and liabilities was primarily attributable to a $1.1 million decrease in accrued expenses and other current liabilities, offset by a $0.4 million increase in accounts receivables, prepaids and other current assets.
Current wording
During the three months ended September 30, 2024, net cash used in operating activities was $3.8 million and was primarily attributable to our $4.7 million net loss as well as $1.0 million of noncash charges and $0.1 million net change in our operating assets and liabilities. Noncash charges were primarily related to $0.3 million in share-based compensation expense, $0.8 million fair value adjustment related to the bonds, $0.1 million of depreciation and amortization expense, offset by $0.1 million fair value adjustment on our VericiDx investment. The change in our operating assets and liabilities was primarily attributable to $0.4 million increase in accrued expenses and other current liabilities, $0.5 million decrease in accounts receivables, prepaids and other current assets.
Previous wording
During the nine months ended March 31, 2023, net cash used in operating activities was $25.5 million and was primarily attributable to our $34.5 million net loss including a $3.0 million net change in our operating assets and liabilities and $6.1 million in noncash charges. The change in our operating assets and liabilities was primarily attributable to a $2.9 million increase in accounts payable and accrued expenses and other current liabilities and a $0.1 million increase in accounts receivable, prepaid expenses and other current assets. Noncash charges were primarily related to $2.4 million in share-based compensation, $1.1 million fair value adjustment of our VericiDx securities, $1.9 million fair value adjustment of our convertible debt, a $0.3 million unrealized foreign exchange loss, $0.3 million of depreciation and amortization and $0.1 million of non-cash lease expense.
Current wording
During the three months ended September 30, 2023, net cash used in operating activities was $9.5 million and was primarily attributable to our $10.1 million net loss as well as $2.5 million of noncash charges and $1.9 million net change in our operating assets and liabilities. Noncash charges were primarily related to $1.0 million in share-based compensation expense, $0.9 million fair value adjustment related to the bonds, $0.4 million fair value adjustment on our VericiDx investment, $0.1 million of depreciation and amortization expense. The change in our operating assets and liabilities was primarily attributable to $1.0 million decrease in accrued expenses and other current liabilities, $0.9 million decrease in accounts receivables, prepaids and other current assets.
Previous wording
Net cash provided by financing activities
Current wording
Net cash provided by investing activities
Previous wording
Net cash used in investing activities
Current wording
During the three months ended September 30, 2023, no cash was provided by or used in investing activities.
Previous wording
During the nine months ended March 31, 2024, net cash provided by financing activities was $2.5 million and was primarily attributable to $5.1 million in proceeds from the closing of the First Tranche of the Private Placement, $0.1 million in proceeds from the issuance of ordinary shares under our employee stock purchase program, offset by $1.7 million in cash used to pay down the principal of the Bonds and $1.0 million in cash paid for offering costs related to the issuance of ordinary shares.
Current wording
During the three months ended September 30, 2023, net cash used in financing activities was $1.1 million and was primarily attributable to $1.0 million in cash used to pay down the principal of the Bonds.
Previous wording
See Note 3 to our financial statements found elsewhere in this report for a description of recent accounting pronouncements applicable to our financial statements.
Current wording
See Note 3 to our consolidated financial statements found elsewhere in this report for a description of recent accounting pronouncements applicable to our financial statements.
Previous wording
We have evaluated the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we have chosen to rely on certain of these exemptions, including without limitation exemptions to the requirements for (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier to occur of (a) June 30, 2026, (b) the last day of the fiscal year (1) in which we have total annual gross revenues of at least $1.235 billion or (2) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our ordinary shares and ADSs that are held by non-affiliates exceeds $700.0 million as of the prior December 31, or (c) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Current wording
We have evaluated the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we have chosen to rely on certain of these exemptions, including without limitation exemptions to the requirements for (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier to occur of (a) the last day of the fiscal year (1) following the fifth anniversary of the completion of our U.S. IPO, (2) in which we have total annual gross revenues of at least $1.235 billion or (3) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our ordinary shares and ADSs that are held by non-affiliates exceeds $700.0 million as of the prior December 31, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Previous wording
While our significant accounting policies are described in more detail in Note 3 to our financial statements included elsewhere in this report, we believe the following accounting policies are the most critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
While our significant accounting policies are described in more detail in Note 3 to our consolidated financial statements included elsewhere in this report, we believe the following accounting policies are the most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Previous wording
Research and development expenses consist primarily of costs incurred in connection with the development of KidneyIntelX. We expense research and development costs as incurred.
Current wording
Research and development expenses consist primarily of costs incurred in connection with the development of the KidneyIntelX technology platform. We expense research and development costs as incurred.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company has incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $216.5 million as of September 30, 2024. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of kidneyintelX.dkd or any future products currently in development.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
the costs and timing of preparing, filing and prosecuting patent applications, maintaining, enforcing and protecting our intellectual property rights and defending against any intellectual property-related claims.
Previous report — wording carried elsewhere
General and administrative expenses decreased $3.2 million from $7.1 million for the three months ended March 31, 2023 to $3.9 million for the three months ended March 31, 2024. The decrease was driven by even further cost cutting measures, which resulted in a $2.6 million decrease in employee compensation and related benefits, a $0.4 million decrease in other operating expenses, and a $0.3 million decrease in insurance costs. We have implemented a plan to further reduce payroll expense and total general and administrative expenses while preserving our sales capacity.
Previous report — wording carried elsewhere
During the nine months ended March 31, 2024, we recognized a foreign currency gain of $0.2 million due to exchange rate fluctuations on transactions denominated in a currency other than our functional currency, GB Pounds. During the nine months ended March 31, 2023, we recognized a foreign currency gain of $0.2 million primarily attributable to cash balances denominated in currencies other than our functional currency.
Previous report — wording carried elsewhere
We account for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the income statement. During the nine months ended March 31, 2024, we recorded a loss of $0.2 million to adjust the VericiDx investment to fair value. During the nine months ended March 31, 2023, we recorded a loss of $1.1 million to adjust the VericiDx investment to fair value.
Previous report — wording carried elsewhere
We elected to account for the Bonds at fair value with qualifying changes in fair value recognized through the statements of operations until the notes are settled. This excludes fair value adjustments related to instrument-specific credit risk, which are recognized in Other Comprehensive Income (Loss). For the nine months ended March 31, 2024, we recorded a loss of $2.5 million to adjust the Bonds to fair value. For the nine months ended March 31, 2023, we recorded a loss of $1.9 million to adjust the Bonds to fair value. The change in fair value of the bond was driven by a decrease in term to maturity, increase in risk free rate and change in stock price.