Funding and Government Contracts - The company has received approximately $279.0 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 $149 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 $4.0 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 $7,038,000 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 $380,000 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 $7,038,000 in Q3 2022[146]. - Gross profit for Q3 2023 was $1,472,000, down 54.4% from $3,227,000 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 $3,478,000 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 $6,903,000 in Q3 2022[147]. - Total operating costs and expenses for Q3 2023 were $5,638,000, significantly higher than $3,478,000 in Q3 2022[145]. - Cost of revenue for Q3 2023 was $1,968,000, a decrease of 48.4% from $3,811,000 in Q3 2022[148]. - Net interest income for the three months ended September 30, 2023, was $2,000, compared to $42,000 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) 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 $4.7 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 $1.0 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) in 2022[155]. - Transaction costs for the three months ended September 30, 2023, were $(7.6 million), compared to $(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].
ROSECLIFF ACQU(RCLF) - 2023 Q3 - Quarterly Report