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ROSECLIFF ACQU(RCLF) - 2024 Q1 - Quarterly Report
RCLFROSECLIFF ACQU(RCLF)2024-05-08 22:10

Funding and Contracts - The company has received approximately 280.2millioninfundingawardsfromgovernmentcontractssince2013,with280.2 million in funding awards from government contracts since 2013, with 272.9 million coming from BARDA[128]. - The company executed a multi-year Project BioShield agreement with BARDA in September 2023, valued at up to approximately 150.0million,includinganinitialawardofnearly150.0 million, including an initial award of nearly 54.9 million[129]. - The PBS BARDA Contract, valued at up to 150.0million,includesaninitialawardofnearly150.0 million, includes an initial award of nearly 54.9 million for the clinical validation and FDA clearance of the DeepView system[170]. - The company received a 4.0milliongrantundertheMTECAgreementfordevelopingahandheldversionoftheDeepViewSystem,expectedtobecompletedbyApril2025[171].FinancialPerformance−ResearchanddevelopmentrevenueforthethreemonthsendedMarch31,2024,was4.0 million grant under the MTEC Agreement for developing a handheld version of the DeepView System, expected to be completed by April 2025[171]. Financial Performance - Research and development revenue for the three months ended March 31, 2024, was 6.3 million, an increase of 1.2millionfrom1.2 million from 5.1 million in the same period in 2023[138]. - Gross profit for the same period was 2.9million,withagrossmarginof46.62.9 million, with a gross margin of 46.6%, up from 42.9% in 2023[138]. - The operating loss for the three months ended March 31, 2024, was 2.1 million, a decrease of 755,000comparedtoalossof755,000 compared to a loss of 2.9 million in 2023[138]. - The net loss for the same period was 3.2million,areductionof3.2 million, a reduction of 404,000 from a net loss of 3.6millionin2023[138].−AdjustedEBITDAforthethreemonthsendedMarch31,2024,was3.6 million in 2023[138]. - Adjusted EBITDA for the three months ended March 31, 2024, was (2.1) million, an improvement from (2.6)millionin2023[165].−Netcashusedinoperatingactivitiesdecreasedbyapproximately(2.6) million in 2023[165]. - Net cash used in operating activities decreased by approximately 1.1 million to (2,680)thousandforthethreemonthsendedMarch31,2024,comparedto(2,680) thousand for the three months ended March 31, 2024, compared to (3,755) thousand in the same period of 2023[175]. - Net cash provided by financing activities increased by approximately 8.2millionto8.2 million to 8,049 thousand for the three months ended March 31, 2024, compared to (104)thousandinthesameperiodof2023[176].ProductDevelopmentandCommercialization−Thecompanyhasnotgeneratedanyproductrevenuetodate,focusingonresearchanddevelopmentfortheDeepViewSystem[128].−TheDeepViewSystemisexpectedtobegincommercializationintheUKinthesecondhalfof2024followingthereceiptoftheUKCAmark[125].−ThecompanyanticipatestworevenuestreamsfromtheDeepViewSystem:asoftwareasamedicaldevicemodelandanimagingdevicecomponent[131].CorporateStructureandGovernance−ThebusinesscombinationcompletedinSeptember2023resultedinthecompanybeinglistedontheNasdaqunderthesymbols"MDAI"and"MDAIW"[133].−TheCompanyformedanewsubsidiary,SpectralIP,andreceiveda(104) thousand in the same period of 2023[176]. Product Development and Commercialization - The company has not generated any product revenue to date, focusing on research and development for the DeepView System[128]. - The DeepView System is expected to begin commercialization in the UK in the second half of 2024 following the receipt of the UKCA mark[125]. - The company anticipates two revenue streams from the DeepView System: a software as a medical device model and an imaging device component[131]. Corporate Structure and Governance - The business combination completed in September 2023 resulted in the company being listed on the Nasdaq under the symbols "MDAI" and "MDAIW"[133]. - The Company formed a new subsidiary, Spectral IP, and received a 1.0 million investment for the development of its artificial intelligence intellectual property portfolio[180]. Capital and Financing - As of March 31, 2024, the company had approximately 10.2millionincashandnotespayableof10.2 million in cash and notes payable of 5.8 million, with no long-term debt[166]. - The company entered into a Common Stock Purchase Agreement with B. Riley to sell up to 10.0millioninnewlyissuedsharesandaStandbyEquityPurchaseAgreementwithYorkvilletosellupto10.0 million in newly issued shares and a Standby Equity Purchase Agreement with Yorkville to sell up to 30.0 million in shares[167][168]. - The Company entered into a SEPA allowing the sale of up to 30.0millionofitsshares,withaninitialPre−PaidAdvanceof30.0 million of its shares, with an initial Pre-Paid Advance of 5.0 million at a fixed conversion price of 3.16[178].−TheInsuranceNote,enteredintoinSeptember2023,hasaninterestrateof8.63.16[178]. - The Insurance Note, entered into in September 2023, has an interest rate of 8.6% per annum, with a remaining balance of 0.2 million as of March 31, 2024[177]. Risks and Challenges - The Company is exposed to credit risk, with one U.S. government agency representing the majority of its research and development revenue and accounts receivable[194]. - Inflation has contributed to increased costs in research and development and operating expenses, potentially affecting gross margins and cash flows[195]. - The Company has not recognized any losses from credit risks on cash, which is primarily held in U.S. financial institutions[193]. - The Company maintains a large amount of cash, with fixed interest rates on current borrowings, making it less sensitive to interest rate changes[191]. - The Company is classified as an emerging growth company, allowing it to delay the adoption of certain accounting standards[185].