iSpecimen Inc

Previous wording

The iSpecimen Marketplace is composed of four major functional areas: search, workflow, data, and administrative reporting. We continue to invest in the evolution of these areas to improve engagement with the platform and liquidity across it. Our core business objective is to retain and grow both researcher and supplier usage of our platform to support biospecimen procurement, as well as to position our Company to explore other adjacent business opportunities that can benefit from the use of the iSpecimen Marketplace.

Current wording

The iSpecimen Marketplace is composed of four major functional areas: search, workflow, data, and administrative reporting. As capital is made available to do so, we continue to invest in the evolution of these areas to improve engagement with the platform and liquidity across it. Our core business objective is to retain and grow both researcher and supplier usage of our platform to support biospecimen procurement, as well as to position our Company to explore other adjacent business opportunities that can benefit from the use of the iSpecimen Marketplace.

Previous wording

On March 5, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC as agent (the “Sales Agent”) pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $1,500,000 (the “ATM Shares”), from time to time through the Sales Agent (the “ATM Offering”). The ATM Shares, when issued, will be registered pursuant to our shelf registration statement on Form S-3 (File No 333-265976), which became effective on July 12, 2022. We intend to sell the ATM Shares, from time to time, pursuant to the ATM Agreement, in transactions that are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the three months ended March 31, 2024, we issued 337,970 shares of common stock for gross proceeds of approximately $138,000 under the ATM Agreement. In connection with the ATM Offering, we incurred offering costs of approximately $205,000, resulting in a net cost of approximately $67,000.

Current wording

On March 5, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC as agent (the “Sales Agent”) pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $1,500,000 (the “ATM Shares”), from time to time through the Sales Agent (the “ATM Offering”). The ATM Shares, when issued, will be registered pursuant to our shelf registration statement on Form S-3 (File No 333-265976), which became effective on July 12, 2022. We intend to sell the ATM Shares, from time to time, pursuant to the ATM Agreement, in transactions that are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the six months ended June 30, 2024, we issued 3,980,075 shares of common stock for gross proceeds of approximately $1,494,000 under the ATM Agreement. In connection with the ATM Offering, we incurred offering costs of approximately $255,000, resulting in net proceeds of approximately $1,239,000.

Previous wording

The Company’s financial performance is subject to global economic conditions and their impact on levels of spending by our customer research organizations, particularly discretionary spending for procurement of specimens used for research. Economic recessions may have adverse consequences across industries, including the health and biospecimen industries, which may adversely affect our business and financial condition. We increased our allowance for doubtful accounts in accounts receivables by $197,924 during the three months ended March 31, 2024 due to certain boutique life sciences customers either lacking liquidity or having filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers in fiscal year 2023 to mitigate the risk to future collectability of receivables.

Current wording

The Company’s financial performance is subject to global economic conditions and their impact on levels of spending by our customer research organizations, particularly discretionary spending for procurement of specimens used for research. Economic recessions may have adverse consequences across industries, including the health and biospecimen industries, which may adversely affect our business and financial condition. We increased our allowance for doubtful accounts in accounts receivables by $289,898 during the year ended December 31, 2023 due to certain boutique life sciences customers either lacking liquidity or having filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers to mitigate the risk to future collectability of receivables.

Previous wording

Throughout the year ended December 31, 2023 and in the first quarter of 2024, we initiated efforts to decrease our capital and operation expenditures by cutting costs and right sizing the Company through reductions in our workforce while streamlining operations and rationalizing resources to focus on key market opportunities. As a result, we began to experience significant decreases in expenditures starting in the second half of 2023. The reductions in workforce resulted in an estimated reduction in compensation costs of approximately 41% and technology costs of approximately 66% in the quarter ended March 31, 2024, when compared to the quarter ended March 31, 2023.

Current wording

Throughout the year ended December 31, 2023 and in the first half of 2024, we initiated efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in our workforce while streamlining operations and rationalizing our resources to focus on key market opportunities. As a result, we began to experience significant decreases in expenditures starting in the second half of 2023. The reductions in workforce since January 1, 2023 through the end of June 30, 2024 has resulted in an estimated reduction in compensation costs of approximately 45% and technology costs of approximately 66% by the end of June 30, 2024 when compared to January 1, 2023.

Previous wording

During the three months ended March 31, 2024, we have had ongoing operational process improvement activities to increase collaboration within and between departments. Beginning during the second quarter of 2023, we moved to a line of business structure organized by our internal categorization of biospecimen suppliers’ capabilities, which has increased efficiency in our operations and throughout the Company. Previously, it took an extended number of days to complete a feasibility study in order to provide a customer

Current wording

During the year ended December 31, 2023, we performed operational process improvement activities to increase collaboration within and between departments. We moved to a line of business structure organized by our internal categorization of biospecimen suppliers’ capabilities, which has increased efficiency in our operations and throughout the Company. We continue to see benefits from this move.

Previous wording

quote, which negatively impacted the time to convert a quote to a purchase order. We completed the implementation of a next day quote system in the third quarter of 2023 and we have already started to see positive results, as evidenced by increased conversion ratios of quotes to purchase orders which contributed to the increased revenue results for the second half of 2023.

Current wording

We completed the implementation of a next day quote system in the third quarter of 2023 and we continue to see positive results in 2024, as evidenced by increased conversion ratios of quotes to purchase orders of 62%, which contributed to the increased revenue results for the six months ended June 30, 2024 compared to June 30, 2023. Previously, it took an extended number of days to complete a feasibility study in order to provide a customer quote, which negatively impacted the time to convert a quote to a purchase order.

Previous wording

While we are committed to investing in and developing our technology, we plan to invest at a significantly lower level in 2024 when compared to 2023 while we focus on raising capital and growing our revenues through key market opportunities. During the three months ended March 31, 2024 and 2023, we capitalized approximately $275,000 and $1,540,000, respectively, of internally developed software costs. These investments have already resulted in meaningful progress which includes an updated search functionality, improved user interface, increased automation, and an enhanced matchmaking function of the iSpecimen Marketplace platform. We anticipate that these investments will increase revenue opportunities and result in operational efficiencies, positively impacting our liquidity, capital resources and results of operations in the future.

Current wording

While we are committed to developing our technology, we are investing at a significantly lower level in 2024 when compared to 2023 and prior years, while we focus on growing our revenues through key market opportunities and assessing our capital raise prospects. During the six months ended June 30, 2024 and 2023, we capitalized approximately $448,000 and $2,732,000, respectively, of internally developed software costs. These investments have resulted in multiple process improvements, streamlining workflows and providing deeper insights into orders for all users of our marketplace.

Previous wording

During the year ended December 31, 2023, while still onboarding new suppliers, we shifted to the quality of our network. We established business criteria that focus on supplier capabilities and revenue growth strategies as well as technology criteria for integrating onto our iSpecimen Marketplace platform and participating with us. We have been reengaging our suppliers in a more meaningful manner which assisted us in the implementation of our next day quote system. We now have a key supplier program whereby we proactively engage with the suppliers to promote our business through marketing campaigns and supplier organizations’ offerings.

Current wording

We have shifted our focus from high volume to high value suppliers that meet our newly defined costs, quality and speed requirements. We established business criteria that focus on supplier capabilities and revenue growth strategies as well as technology criteria for integrating onto our iSpecimen Marketplace platform and participating with us. In the first quarter of 2024, we terminated over 100 supplier agreements and are in the final stages of what we call our “supplier network refresh project”. This has resulted in fewer key suppliers, supported by our lean workforce and processes more effectively. We have been reengaging our suppliers in a more meaningful

Previous wording

Financial Operations Overview and Analysis for the Three Months Ended March 31, 2024 and 2023 (Unaudited)

Current wording

Financial Operations Overview and Analysis for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

Previous wording

Revenue decreased by approximately $660,000, or 22%, from approximately $2,950,000 for the three months ended March 31, 2023 to approximately $2,290,000 for the three months ended March 31, 2024. This was primarily due to a decrease of 3,388, or approximately 39%, in specimen count from 8,629 specimens in the three months ended March 31, 2023 to 5,241 specimens in the three months ended March 31, 2024. The effect of the decrease in specimen count was partially offset by a change in the specimen mix which caused the average selling price per specimen to increase by approximately $95, or 28%, from approximately $342 in the three months ended March 31, 2023 to approximately $437 in the three months ended March 31, 2024.

Current wording

Revenue increased by approximately $1,239,000, or 76%, from approximately $1,625,000 for the three months ended June 30, 2023 to approximately $2,864,000 for the three months ended June 30, 2024. This was primarily due to an increase of 1,236, or approximately 26%, in specimen count from 4,682 specimens in the three months ended June 30, 2023 to 5,918 specimens in the three months ended June 30, 2024. The average selling price per specimen also increased by approximately $137, or 39%, from approximately $347 in the three months ended June 30, 2023 to approximately $484 in the three months ended June 30, 2024.

Previous wording

Cost of revenue decreased by approximately $147,000, or 13%, from approximately $1,147,000 for the three months ended March 31, 2023 to approximately $1,000,000 for the three months ended March 31, 2024, which was attributable to an approximately 39% decrease in the number of specimens accessioned for the current period compared to the same period in the prior year, partially offset by an approximately $58, or 44%, increase in the average cost per specimen.

Current wording

Cost of revenue increased by approximately $570,000, or 67%, from approximately $854,000 for the three months ended June 30, 2023 to approximately $1,424,000 for the three months ended June 30, 2024, which was attributable to an approximately 26% increase in the number of specimens accessioned for the current period compared to the same period in the prior year and an approximately $58, or 32%, increase in the average cost per specimen.

Previous wording

Technology expenses increased by approximately $78,000, or 9%, from approximately $834,000 for the three months ended March 31, 2023 to approximately $912,000 for the three months ended March 31, 2024. The increase was related to increases in amortization of internally developed software of approximately $99,000, professional fees of approximately $11,000, and general operating expenses of approximately $1,000, which were partially offset by decreases in headcount and payroll and related expenses of approximately $33,000.

Current wording

Product development and technology expense that were not eligible for capitalization increased by approximately $69,000, or 8%, from approximately $843,000 for the three months ended June 30, 2023 to approximately $912,000 for the three months ended June 30, 2024. The increase was related to increases in professional fees of approximately $68,000, and amortization of internally developed software

Previous wording

Sales and marketing expenses decreased by approximately $296,000, or 31%, from approximately $962,000 for the three months ended March 31, 2023 to approximately $666,000 for the three months ended March 31, 2024. The decrease was primarily attributable to decreases in payroll and related expenses of approximately $217,000, external marketing expense of approximately $95,000, and general operating expenses related to sales and marketing of approximately $20,000, which were partially offset by an increase in advertising and promotions expense of approximately $36,000.

Current wording

Sales and marketing expenses increased by approximately $105,000, or 11%, from approximately $978,000 for the three months ended June 30, 2023 to approximately $1,083,000 for the three months ended June 30, 2024. The increase was primarily attributable to increases in payroll and related expenses of approximately $123,000, and advertising and promotions expense of approximately $100,000, which were partially offset by decreases in external marketing expense of approximately $96,000, and general operating expenses related to sales and marketing of approximately $22,000.

Previous wording

Supply development expenses decreased by approximately $77,000, or 28%, from approximately $275,000 for the three months ended March 31, 2023 to approximately $198,000 for the three months ended March 31, 2024. The decrease was primarily attributable to decreases in payroll and related expenses of approximately $37,000, professional fees of approximately $31,000, and general supply development expenses of approximately $9,000.

Current wording

Supply development expenses decreased by approximately $153,000, or 53%, from approximately $291,000 for the three months ended June 30, 2023 to approximately $138,000 for the three months ended June 30, 2024. The decrease was primarily attributable to decreases in professional fees of approximately $104,000, payroll and related expenses of approximately $42,000, and general supply development expenses of approximately $7,000.

Previous wording

Fulfillment costs decreased by approximately $45,000, or 10%, from approximately $456,000 for the three months ended March 31, 2023 to approximately $411,000 for the three months ended March 31, 2024. The decrease was primarily attributable to decreases in professional fees of approximately $27,000, payroll and related expenses of approximately $10,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, and general operating expenses related to fulfillment of approximately $8,000.

Current wording

Fulfillment costs decreased by approximately $30,000, or 6%, from approximately $463,000 for the three months ended June 30, 2023 to approximately $433,000 for the three months ended June 30, 2024. The decrease was primarily attributable to decreases in general operating expenses related to fulfillment of approximately $17,000, and payroll and related expenses of approximately $16,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, which were partially offset by an increase in professional fees of approximately $3,000.

Previous wording

Other income, net, decreased by approximately $12,000, or 11%, from approximately $111,000 for the three months ended March 31, 2023 to approximately $98,000 for the three months ended March 31, 2024. The decrease in other income, net, was attributable to a decrease in interest income of approximately $84,000 and an increase in interest expense of approximately $1,000, partially offset by an increase in other income of approximately $72,000.

Current wording

Other income, net, decreased by approximately $5,000, or 7%, from approximately $78,000 for the three months ended June 30, 2023 to approximately $73,000 for the three months ended June 30, 2024. The decrease in other income, net, was attributable to a decrease in interest income of approximately $102,000 and an increase in interest expense of approximately $1,000, partially offset by an increase in other income (expense) of approximately $97,000.

Previous wording

General and administrative expenses increased by approximately $286,000, or 16%, from approximately $1,818,000 for the three months ended March 31, 2023 to approximately $2,104,000 for the three months ended March 31, 2024. The increase was attributable to increases in professional fees of approximately $329,000, taxes and insurance of approximately $267,000, and bad debt expense of approximately $45,000, which were partially offset by decreases in compensation costs of approximately $250,000, general operating expenses of approximately $78,000, depreciation and amortization of approximately $23,000, and utilities and facilities expenses of approximately $4,000.

Current wording

General and administrative expenses decreased approximately $311,000, or 9%, from approximately $3,470,000 for the six months ended June 30, 2023 to approximately $3,159,000 for the six months ended June 30, 2024. The period over period decrease was attributable to decreases in compensation costs of approximately $348,000, general operating expenses of approximately $105,000, bad debt expense of approximately $57,000, depreciation and amortization of approximately $44,000, utilities and facilities expenses of approximately $9,000, which were partially offset by increases in professional fees of approximately $161,000 and taxes and insurance of approximately $91,000.

Previous wording

We have had recurring losses since inception. As of March 31, 2024, our available cash and available-for-sale securities totaled approximately $2,556,000, which represented a decrease of approximately $2,450,000 from approximately $5,006,000, as of December 31, 2023. We had negative working capital of approximately $415,000, an accumulated deficit of approximately $62,267,000, cash and cash equivalents and short-term investments of approximately $2,556,000, and accounts payable and accrued expenses of approximately $5,271,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the year ended December 31, 2023 and the first quarter of 2024, we executed reductions in workforce, resulting in an estimated reduction in monthly compensation costs of approximately 41% in the three months ended March 31, 2024 when compared to the quarter ended March 31, 2023, after streamlining operations and rationalizing resources to focus on key market opportunities. We plan to add additional customers and suppliers to increase and add additional revenues through our new revenue enhancement projects as well as to reduce and manage expenditures to improve our financial position and ensure continued funding of operations. However, as certain elements of our operating plan are not within our control, we are unable to assess their probability. We may also seek to fund our operations through public equity or debt financing, as well as other sources.

Current wording

We have had recurring losses since inception. As of June 30, 2024, our available cash and available-for-sale securities totaled approximately $2,151,000, which represented a decrease of approximately $2,855,000 from approximately $5,006,000, as of December 31, 2023. We had negative working capital of approximately $577,000, an accumulated deficit of approximately $64,376,000, cash and cash equivalents and short-term investments of approximately $2,151,000, and accounts payable and accrued expenses of approximately $5,525,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the year ended December 31, 2023, we began initiating efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in workforce while streamlining operations and rationalizing resources to focus on key market opportunities. The reduction in workforce since January 1, 2023 through June 30, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 45% and technology costs of approximately 66% by the end of June 30, 2024 when compared to January 1, 2023. We plan to add additional customers to increase and add additional revenues through our new revenue enhancement projects as well as to reduce and manage expenditures to improve our financial position and ensure continued funding of operations. However, as certain elements of our operating plan are not within our control, we are unable to assess their probability. We may also seek to fund our operations through public equity or debt financing, as well as other sources but it has not currently identified any other specific source of funding except for the ATM Agreement.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was approximately $2,072,000, which consisted of a net loss of approximately $2,902,000 offset by non-cash charges of approximately $861,000, which included approximately $533,000 related to amortization of internally developed software, approximately $198,000 in bad debt expense, approximately $94,000 in stock-based compensation, approximately $48,000 related to amortization of other intangible assets, and approximately $16,000 related to depreciation of property and equipment, which were offset by approximately $27,000 of accretion of discount on available-for-sale securities.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was approximately $3,612,000, which consisted of a net loss of approximately $5,011,000 offset by non-cash charges of approximately $1,553,000, which included approximately $1,076,000 related to amortization of internally developed software, approximately $205,000 in bad debt expense, approximately $174,000 in stock-based compensation, approximately $96,000 related to amortization of other intangible assets, approximately $32,000 related to depreciation of property and equipment, and approximately $1,000 of losses from sales of available-for-sale securities, which were offset by approximately $29,000 of accretion of discount on available-for-sale securities.

Previous wording

Total changes in assets and liabilities of approximately $31,000 were attributable to an approximately $365,000 decrease in accounts payable, an approximately $143,000 decrease in deferred revenue, an approximately $40,000 decrease in operating lease liability, and an approximately $22,000 increase in prepaid expenses and other current assets, offset by an approximately $234,000 decrease in accounts receivable-unbilled, an approximately $170,000 increase in accrued expenses, an approximately $93,000 decrease in accounts receivable, and an approximately $41,000 decrease in operating lease right-of-use asset.

Current wording

approximately $81,000 decrease in lease liability, offset by an approximately $280,000 increase in accounts payable, an approximately $259,000 decrease in accounts receivable-unbilled, an approximately $82,000 decrease in operating lease right-of-use asset, and an approximately $55,000 decrease in prepaid expenses and other current assets.

Previous wording

For the three months ended March 31, 2023, net cash used in operating activities was approximately $2,826,000, which consisted of a net loss of approximately $2,432,000 offset by non-cash charges of approximately $745,000, which included approximately $433,000 related to amortization of internally developed software, approximately $153,000 in bad debt expense, approximately $121,000 in stock-based compensation, and approximately $39,000 related to depreciation of property and equipment.

Current wording

For the six months ended June 30, 2023, net cash used in operating activities was approximately $4,519,000, which consisted of a net loss of approximately $5,915,000 offset by non-cash charges of approximately $1,420,000, which included approximately $935,000 related to amortization of internally developed software, approximately $262,000 in bad debt expense, approximately $245,000 in stock-based compensation, and approximately $76,000 related to depreciation of property and equipment, offset by $98,000 of amortization of discount on available-for-sale securities.

Previous wording

Total changes in assets and liabilities of approximately $1,140,000 were attributable to an approximately $1,561,000 increase in accounts receivable, an approximately $623,000 decrease in accrued expenses, an approximately $38,000 decrease in operating lease liability, an approximately $35,000 decrease in deferred revenue, and an approximately $12,000 increase in prepaid expenses and other current assets, offset by an approximately $743,000 decrease in accounts receivable-unbilled, an approximately $242,000 increase in accounts payable, an approximately $106,000 decrease in tax credit receivable, and an approximately $39,000 decrease in operating lease right-of-use asset.

Current wording

Total changes in assets and liabilities of approximately $23,000 were attributable to an approximately $679,000 decrease in accounts payable, an approximately $649,000 decrease in accrued expenses, an approximately $123,000 increase in accounts receivable, an approximately $78,000 decrease in operating lease liability, and an approximately $43,000 decrease in deferred revenue, offset by an approximately $1,229,000 decrease in accounts receivable-unbilled, an approximately $129,000 decrease in tax credit receivable, an approximately $113,000 decrease in prepaid expenses and other current assets, and an approximately $78,000 decrease in operating lease right-of-use asset.

Previous wording

Net cash provided by investing activities was approximately $1,937,000 for the three months ended March 31, 2024, which consisted of approximately $2,683,000 of proceeds from sales and maturities of available-for-sale securities, which were offset by approximately $461,000 of purchases of available-for-sale securities, approximately $275,000 of capitalization of internally developed software, and approximately $9,000 of purchase of property and equipment.

Current wording

Net cash provided by investing activities was approximately $2,233,000 for the six months ended June 30, 2024, which consisted of approximately $3,150,000 of proceeds from sales and maturities of available-for-sale securities, which were offset by approximately $461,000 of purchases of available-for-sale securities, approximately $448,000 of capitalization of internally developed software, and approximately $9,000 of purchase of property and equipment.

Previous wording

Net cash used in investing activities was approximately $8,788,000 for the three months ended March 31, 2023, which consisted of approximately $7,241,000 of purchase of available-for-sale securities, approximately $1,540,000 of capitalization of internally developed software, and approximately $8,000 of purchase of property and equipment.

Current wording

Net cash used in investing activities was approximately $8,856,000 for the six months ended June 30, 2023, which consisted of approximately $7,643,000 of purchase of available-for-sale securities, approximately $2,732,000 of capitalization of internally developed software, and approximately $14,000 of purchase of property and equipment, offset by approximately $1,532,000 of proceeds from sale and maturities of available-for-sale securities.

Previous wording

Net cash used in financing activities was approximately $119,000 for the three months ended March 31, 2024, which consisted of approximately $205,000 for the payment of offering costs in connection with the issuance of common stock in connection with the ATM Offering and approximately $53,000 for the repurchase of common stock exercisable under PIPE Warrants, offset by approximately $138,000 of proceeds received from the issuance of common stock in connection with the ATM Offering.

Current wording

Net cash provided by financing activities was approximately $1,187,000 for the six months ended June 30, 2024, which consisted of approximately $1,494,000 of proceeds received from the issuance of common stock in connection with the ATM Offering, offset by approximately $255,000 for the payment of offering costs in connection with the issuance of common stock in connection with the ATM Offering and approximately $53,000 for the repurchase of common stock exercisable under PIPE Warrants.

Previous wording

Net cash provided by financing activities was approximately $68,000 for the three months ended March 31, 2023, due to proceeds received from the exercise of stock options.

Current wording

Net cash provided by financing activities was approximately $71,000 for the six months ended June 30, 2023, due to proceeds received from the exercise of stock options.

Previous wording

Our operations are heavily reliant on specimen availability, and as a result, we often receive more requests than we can fulfill. While the Company is subject to these types of supply chain constraints that are specific to the specimen industry, we have not been materially affected by the more common supply chain issues currently affecting the economy, specifically surrounding transportation. Due to the small size of the packages that we ship, our carriers were able to continue making timely deliveries during the three months ended March 31, 2024. However, there had been an increase in our shipping costs period over period during the three months ended March 31, 2024.

Current wording

Our operations are heavily reliant on specimen availability, and as a result, we often receive more requests than we can fulfill. While the Company is subject to these types of supply chain constraints that are specific to the specimen industry, we have not been materially affected by the more common supply chain issues currently affecting the economy, specifically surrounding transportation. Due to the small size of the packages that we ship, our carriers were able to continue making timely deliveries during the six months ended June 30, 2024. However, there had been an increase in our shipping costs period over period during the six months ended June 30, 2024.

Previous wording

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our unaudited condensed financial statements or are the most sensitive to change from outside factors, are discussed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2024.

Current wording

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our unaudited condensed financial statements or are the most sensitive to change from outside factors, are discussed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2024.