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ROSECLIFF ACQU(RCLF) - 2023 Q3 - Quarterly Report
RCLFROSECLIFF ACQU(RCLF)2023-11-14 21:29

Funding and Government Contracts - The company has received approximately 279.0millioninfundingcommitmentsfromgovernmentcontractssince2013,primarilyfromBARDA,whichaccountsfor279.0 million in funding commitments from government contracts since 2013, primarily from BARDA, which accounts for 271.9 million[116]. - In September 2023, the company executed a multi-year Project BioShield contract with BARDA valued at up to approximately 149million,includinganinitialawardofnearly149 million, including an initial award of nearly 55.0 million for clinical validation and FDA clearance[118]. - The company is highly dependent on U.S. governmental contracts, with revenue growth reliant on the continuation of these awards[136]. - The company received 4.0millioningrantsundertheMTECAgreementinApril2023,contributingtoitsliquidity[162].FinancialPerformance−Thecompanyreportedresearchanddevelopmentrevenueof4.0 million in grants under the MTEC Agreement in April 2023, contributing to its liquidity[162]. Financial Performance - The company reported research and development revenue of 3,440,000 for the three months ended September 30, 2023, compared to 7,038,000forthesameperiodin2022[130].−ThegrossmarginforthethreemonthsendedSeptember30,2023,was42.87,038,000 for the same period in 2022[130]. - The gross margin for the three months ended September 30, 2023, was 42.8%, compared to 45.9% for the same period in 2022[130]. - The net loss for the three months ended September 30, 2023, was 10,629,000, compared to a net loss of 380,000forthesameperiodin2022[130].−ResearchanddevelopmentrevenueforQ32023was380,000 for the same period in 2022[130]. - Research and development revenue for Q3 2023 was 3,440,000, a decrease of 51.1% compared to 7,038,000inQ32022[146].−GrossprofitforQ32023was7,038,000 in Q3 2022[146]. - Gross profit for Q3 2023 was 1,472,000, down 54.4% from 3,227,000inQ32022,withagrossmarginof42.83,227,000 in Q3 2022, with a gross margin of 42.8%[148]. - General and administrative expenses increased by 62.1% to 5,638,000 in Q3 2023, compared to 3,478,000inQ32022,primarilyduetoincreasedstaffing[150].−RevenuefromBARDAdecreasedby55.73,478,000 in Q3 2022, primarily due to increased staffing[150]. - Revenue from BARDA decreased by 55.7% to 3,055,000 in Q3 2023, down from 6,903,000inQ32022[147].−TotaloperatingcostsandexpensesforQ32023were6,903,000 in Q3 2022[147]. - Total operating costs and expenses for Q3 2023 were 5,638,000, significantly higher than 3,478,000inQ32022[145].−CostofrevenueforQ32023was3,478,000 in Q3 2022[145]. - Cost of revenue for Q3 2023 was 1,968,000, a decrease of 48.4% from 3,811,000inQ32022[148].−NetinterestincomeforthethreemonthsendedSeptember30,2023,was3,811,000 in Q3 2022[148]. - Net interest income for the three months ended September 30, 2023, was 2,000, compared to 42,000forthesameperiodin2022,reflectingadecreaseofapproximately95.242,000 for the same period in 2022, reflecting a decrease of approximately 95.2%[151]. - Adjusted EBITDA for the three months ended September 30, 2023, was (3.9 million), compared to (4,000)in2022,indicatingadeteriorationinperformance[160].BusinessOperationsandStrategy−TheDeepViewSystemhasachievedaburnwoundassessmentaccuracyof92(4,000) in 2022, indicating a deterioration in performance[160]. Business Operations and Strategy - The DeepView System has achieved a burn wound assessment accuracy of 92% for adults and 88% for pediatrics, significantly higher than the current physician accuracy of 50% to 75%[115]. - The company anticipates two revenue streams from the DeepView System: a software as a medical device (SaMD) model and an imaging device component[120]. - Future revenue may be impacted by the need to lower pricing and incentives to accelerate adoption of the DeepView System[137]. - The company expects to incur substantial additional expenses related to public company requirements following the business combination[128]. Market Activity - The company began trading its shares on NASDAQ under the symbols "MDAI" and "MDAIW" on September 12, 2023, following the business combination[124]. - The business combination was treated as a reverse recapitalization, with Legacy Spectral being treated as the accounting acquirer[126]. - Net cash used in operating activities increased by approximately 10.0 million for the nine months ended September 30, 2023, compared to the same period in 2022[166]. - Net cash provided by financing activities increased by approximately 4.7millionfortheninemonthsendedSeptember30,2023,primarilyduetoproceedsfromanequityraise[167].−Thecompanyenteredintoafinancingarrangementforinsurancepremiumsamountingtoapproximately4.7 million for the nine months ended September 30, 2023, primarily due to proceeds from an equity raise[167]. - The company entered into a financing arrangement for insurance premiums amounting to approximately 0.6 million, with an interest rate of 8.6% per annum[168]. Other Financial Metrics - The change in fair value of warrant liability increased by approximately 1.0millionforboththethreeandninemonthsendedSeptember30,2023,comparedtothesameperiodsin2022[153].−ForeignexchangetransactionlossforthethreemonthsendedSeptember30,2023,was1.0 million for both the three and nine months ended September 30, 2023, compared to the same periods in 2022[153]. - Foreign exchange transaction loss for the three months ended September 30, 2023, was (51,000), an increase of approximately 112.5% compared to (24,000)in2022[155].−TransactioncostsforthethreemonthsendedSeptember30,2023,were(24,000) in 2022[155]. - Transaction costs for the three months ended September 30, 2023, were (7.6 million), compared to (8.3million)forthesameperiodin2022[156].−AsofSeptember30,2023,thecompanyhadapproximately(8.3 million) for the same period in 2022[156]. - As of September 30, 2023, the company had approximately 7.3 million in cash and an accumulated deficit of approximately $29.2 million[161].