You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this Form 10-Q. Overview
We are a medical diagnostics company focused on improving patient outcomes through cost efficient, rapid, near-patient testing for triage and monitoring of disease progression. Our technology platform, which we refer to as "Symphony," is an exclusively licensed, patented system that consists of a desktop analyzer and single-use indication specific test cartridges. We believe, if cleared, authorized, or approved by theU.S. Food and Drug Administration ("FDA"), Symphony can provide a solution to the market need for rapid, near-patient testing that provides laboratory quality results in the Intensive Care Unit ("ICU"), Emergency Room ("ER"), and other hospital and clinical settings. Currently, testing is performed in a central laboratory, and the transportation and logistics of sending the samples to the lab and obtaining the results generally takes 4-48 hours, minimizing the utility of the costly tests. Our platform provides test results with an approximate total turnaround time of 20 minutes from sample-to-result, as it is near-patient and uses whole blood samples that do not require additional preparation or pre-processing. Our business model is to generate revenue from the sale of the desktop Symphony analyzer, and the sale of single-use indication specific test cartridges. Since inception, we have incurred net losses from operations each year and we expect to continue to incur losses for the foreseeable future, at least until we are cleared, authorized or approved by the FDA. We incurred net losses of approximately$7.5 million and$0.8 million for the nine months endedSeptember 30, 2022 and 2021, respectively. We had$13.3 million in cash and cash equivalents and a$15.2 million accumulated deficit atSeptember 30, 2022 , with net cash used in operating activities of approximately$5.4 million for the nine months endedSeptember 30, 2022 . Results of Operations
Comparison of the Three Months and Nine Months Ended
The following table sets forth our results of operations for the three and nine
months ended
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ - $ -$ 249,040 $ - Cost of sales - - 200,129 - Gross Profit - - 48,911 - Operating expenses: Research and development 1,379,665 442,527 2,830,705 692,702 General and administrative 1,284,411 445,050 3,801,226 974,791 Sales and marketing 146,102 70,411 281,144 189,765 Total operating expenses 2,810,178 957,988
6,913,075 1,857,258 Operating loss (2,810,178 ) (957,988 ) (6,864,164 ) (1,857,258 ) Other income (expenses): Interest income, net of amortization of premium - (237,429 ) - (269,545 ) Grant income - - - 75,000 Impairment of property and equipment (210,117 ) - (210,117 ) - Other income 60,406 2,036 163,587 24,001 Total other expenses, net (149,711 ) (235,393 )
(46,530 ) (170,544 ) Net loss$ (2,959,889 ) $ (1,193,381 ) $ (6,910,694 ) (2,207,802 ) 16 Revenue and Gross Profit Revenue and gross profit increased approximately$250,000 and$49,000 respectively, for the nine month periods endedSeptember 30, 2022 , as compared to the same period in 2021. We recognized a small, non-recurring sale to a foreign development partner in the second quarter of 2022, which it does not consider an entry to the market or indicative of expected margins. As expected, there were no sales in the third quarter. Research and Development Research and development expenses for the three and nine months endedSeptember 30, 2022 were$1.4 million and$2.8 million , respectively, as compared to$443,000 and$693,000 , respectively, for the comparable periods in 2021. The increase in research and development expenses was due to the expansion of our clinical program and supporting scale-up manufacturing of the Symphony technology platform and IL-6 test. General and Administrative General and administrative expenses for the three and nine months endedSeptember 2022 were$1.3 million and$3.8 million , respectively, as compared to$445,000 and$975,000 , respectively, for the comparable periods in 2021. The increase in general and administrative expenses reflects our investment in scalable infrastructure, as well as expenses to support public company operations due to the completion of our initial public offering in November
2021. Sales and Marketing
Sales and marketing expenses for the three and nine months endedSeptember 30, 2022 were$146,000 and$281,000 , respectively, as compared to$70,000 and$190,000 , respectively, for the comparable periods in 2021. While these expenses have been limited to date, we expect to increase these efforts when appropriate to support its commercial growth. Other Expenses, net
Other expenses, net for the three and nine months endedSeptember 30, 2022 were$150,000 and$47,000 , respectively, as compared to$235,000 and$171,000 , respectively, for the comparable periods in 2021. The primary other expense, net charge was an impairment of approximately$210,000 related to certain Allereye research and development equipment that we recognized inSeptember 2022 .
Liquidity and Capital Commitments
Liquidity We have funded our operations primarily through the net proceeds from our IPO onNovember 10, 2021 . As ofSeptember 30, 2022 , the Company had approximately$13.3 million in unrestricted cash and cash equivalents. We expect that our cash position will be sufficient to fund operations for at least twelve months from the issuance date of this report.
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