Renalytix Reports Financial Results for First Quarter of Fiscal Year 2023
Recent Highlights (including post period events)
- New commercial coverage for KidneyIntelX; now 30 private insurance and network provider contracts executed to date including:
- Largest private payer in
Illinois with 8.1 million members - Largest independent provider network in the tristate
North Carolina ,South Carolina andVirginia , with over 100,000 health care providers in-network
- Largest private payer in
- Over 1,200 KidneyIntelX tests performed in the first quarter of fiscal 2023, a record, of which over 80% were billable, yielding approximately
$1.0 million revenue - Achieved Medicare payment for KidneyIntelX through the individual claims review (ICR) process based on our Medicare clinical lab fee schedule (CLFS) pricing of
$950 per test - 33 state Medicaid programs contracted to date
- Publication of new real-world evidence in
Primary Care and Community Health in which KidneyIntelX resulted in a 4.5-fold increase in new drug prescriptions (for SGLT2 inhibitors) for high-risk compared to low-risk patients, observed reduction of HbA1c levels in highest risk patients who were prescribed SGLT2 inhibitors, and more than a 20% increase in antihypertensive therapeutic prescriptions in high-risk patients - Continued data generation and analysis reinforcing the benefits of KidneyIntelX as part of collaborative De Novo process with the FDA, with anticipation that the agency's review is nearing completion. Data supports significant breakthrough in risk stratification for patients with diabetic kidney disease
- KidneyIntelX clinical utility and health economics validated in multiple data releases at
American Society of Nephrology - Data results published in
American Journal of Managed Care supporting adoption and clinical utility of KidneyIntelX; 98% of 401 primary care physicians surveyed confirmed KidneyIntelX has value as a risk decision tool
First Quarter 2023 Financial Results
During the three months ended
Operating expense for the three months ended
Within operating expenses, research and development expenses were
General and administrative expenses were
Net loss was
Cash and cash equivalents totaled
The Company will host a corresponding conference call and live webcast today to discuss the financial results and key topics including business strategy, partnerships and regulatory and reimbursement processes, at
Conference Call Details:
To participate in the live conference call via telephone, please register here. Upon registering, a dial-in number and unique PIN will be provided in order for interested parties to join the conference call.
Webcast Registration link: https://edge.media-server.com/mmc/p/88vepbze
For further information, please contact:
| www.renalytix.com | |
| Via Walbrook PR | |
| Stifel (Nominated Adviser, Joint Broker) | Tel: 020 7710 7600 |
| Tel: 020 7597 4000 | |
| Tel: 020 7933 8780 or [email protected] | |
| Mob: 07980 541 893 / 07407 804 654 | |
| Tel: 415-389-6400 or [email protected] |
About Renalytix
Renalytix (LSE: RENX) (NASDAQ: RNLX) is the global founder and leader in the new field of bioprognosis™ for kidney health. The company has engineered a new solution that enables early-stage chronic kidney disease progression risk assessment. The Company’s lead product, KidneyIntelX™, has been granted Breakthrough Designation by the
Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Examples of these forward-looking statements include statements concerning: the commercial prospects of KidneyIntelX, including whether KidneyIntelX will be successfully adopted by physicians and distributed and marketed, the rate of testing with KidneyIntelX in health care systems, expectations and timing of announcement of real-world testing evidence, the potential for KidneyIntelX to be approved for additional indications, our expectations regarding the timing and outcome of regulatory and reimbursement decisions, the ability of KidneyIntelX to curtail costs of chronic and end-stage kidney disease, optimize care delivery and improve patient outcomes, and our expectations and guidance related to partnerships, testing volumes and revenue for future periods. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “seeks,” and similar expressions are intended to identify forward-looking statements. We may not actually achieve the plans and objectives disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. Any forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These risks and uncertainties include, among others: that KidneyIntelX is based on novel artificial intelligence technologies that are rapidly evolving and potential acceptance, utility and clinical practice remains uncertain; we have only recently commercially launched KidneyIntelX; and risks relating to the impact on our business of the COVID-19 pandemic or similar public health crises. These and other risks are described more fully in our filings with the
Operational Update and Financial Results for the three months ended
Unless otherwise indicated, all references in this report, to the terms “Renalytix,” “Renalytix plc,” “the company,” “we,” “us” and “our” refer to
The statements in this discussion regarding our expectations regarding our market opportunity, partnerships, reimbursement, regulatory approval, cash runway, revenue guidance, capital requirements and future performance, as well as all other non-historical statements are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties set forth in the “Risk Factors” section of our Annual Report and any subsequent reports that we file with the
OPERATIONAL REVIEW
About Renalytix
At Renalytix, we are introducing more accurate prognosis and effective care management for the estimated 850 million people worldwide with chronic kidney disease. In
With our lead product, KidneyIntelX, the goal is to drive the focus from kidney disease treatment to kidney health management through a more accurate understanding of a patient’s risk for kidney failure before it happens. KidneyIntelX leads development in the new field of bioprognosis, a biology driven approach to risk assessment that integrates information from a simple blood draw and a patient’s health record to produce an accurate picture of kidney health. A doctor can use KidneyIntelX results to act on patients at high risk of kidney disease progression or failure at an early stage where active management and therapeutics have the best opportunity to impact outcomes and cost before it is too late.
About KidneyIntelX
Our novel platform, KidneyIntelX, uses a machine-learning enabled algorithm to process predictive blood biomarkers with key features from a patient’s health record to generate an early and accurate kidney health risk score. The score identifies those patients at the most risk for kidney disease progression and/or failure and further guides ongoing clinical decisions.
KidneyIntelX is initially indicated for use with adults who have diagnosed kidney disease and diabetes – diabetic kidney disease or DKD. Future KidneyIntelX products in development intend to expand the indicated uses to include broader chronic kidney disease, health equity strategies and kidney health monitoring through treatment. Diabetes is the leading cause of chronic kidney disease, representing nearly 40% of its cases, and DKD patients are the highest contributors to emergency room dialysis starts. Unfortunately, many DKD patients are unaware that their kidney disease has been progressing, often uncontrolled, for many years and now find themselves making difficult decisions about late-stage treatments.
KidneyIntelX was designed as an expandable platform able to add indicated uses and a monitoring capability, all within an FDA regulated, insurance reimbursable framework.
Operational Progress
Over the past year, KidneyIntelX expanded within the
A full electronic health record (EHR) integrated deployment of KidneyIntelX with population health support in the
Implementing with the
Expert experience is reflected in the design of the KidneyIntelX test report and the newly launched product website: www.kidneyintelx.com. We believe our education and support program will be an important resource to help inform and improve care for early-stage DKD patients and support future hospital system deployments of KidneyIntelX, which we believe could be achieved more rapidly as a result of the knowledge we have derived from our hospital system implementations to date.
Current outlook
Building KidneyIntelX into a standard of care in
Operational progress continued into the first quarter of fiscal 2023 with over 1,200 tests performed. More than 80% of these were billable, yielding about
FINANCIAL REVIEW
Financial review of the three-month period ended
Our operating loss for the three months ended
Revenue
During the three months ended
Cost of Revenue
During the three months ended
Research and Development Costs
Research and development expenses decreased by
General and Administrative Costs
General and administrative expenses increased by
Foreign Currency gain
During the three months ended
Fair Value Adjustments to
The Company accounts for the investment in VericiDx equity securities at fair value, with changes in fair value recognized in the income statement. During the three months ended
Fair value adjustment on convertible notes
In
Other income
During the three months ended
Liquidity and Capital Resources
Since our inception, we have incurred net losses. As of
We expect to incur additional losses in the near future, and we expect our expenses to increase in connection with our ongoing activities, particularly as we continue to commercialize and scale KidneyIntelX, particularly as we conduct our ongoing and planned clinical utility and other studies for KidneyIntelX for its commercial launch, develop and refine our artificial intelligence technology platform, seek regulatory clearances or approvals for KidneyIntelX or any other product we develop, establish and maintain partnerships with healthcare systems, pursue our coverage and reimbursement strategy and continue to invest in our infrastructure to support our manufacturing and other activities. In addition, we expect to continue to incur additional costs associated with operating as a public company in
- the cost, progress and results of our ongoing and planned validation studies and health economic studies;
- the cost, timing and outcome of entering into and maintaining partnership agreements with healthcare systems for the commercial sale of KidneyIntelX;
- the cost of manufacturing clinical and commercial supply of KidneyIntelX;
- the cost, timing and outcome of regulatory review of KidneyIntelX, including any post-marketing studies that could be required by regulatory authorities;
- the cost, timing and outcome of identified and potential future commercialization activities, including manufacturing, marketing, sales and distribution, for KidneyIntelX;
- the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;
- the timing and amount of future revenue, if any, received from commercial sales of KidneyIntelX;
- the sales price and availability of adequate third-party coverage and reimbursement for KidneyIntelX;
- the effect of competing technological and market developments; and
- the extent to which we acquire or invest in businesses, products and technologies, such as Kantaro, although we currently have no other commitments or agreements to complete any such transactions.
To date, we have primarily financed our operations through equity and debt financings. As of
Cash Flows
Net cash used in operating activities
During the three months ended
During the three months ended
Net cash used in investing activities
During the three months ended
During the three months ended
Net cash used in financing activities
During the three months ended
During the three months ended
Cash and Cash Equivalents
We had cash and cash equivalents of
Critical accounting policies and significant judgments and estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which we have prepared in accordance with generally accepted accounting principles in
There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report.
Recent accounting pronouncements
See Note 3 to our financial statements found elsewhere in this report for a description of recent accounting pronouncements applicable to our financial statements.
JOBS Act transition period
In
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in thousands, except share and per share data) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 31,040 | $ | 41,333 | ||||||
| Accounts receivable | 1,223 | 901 | ||||||||
| Prepaid expenses and other current assets | 2,075 | 2,445 | ||||||||
| Note receivable from Kantaro | 75 | 75 | ||||||||
| Receivable from affiliates | 13 | — | ||||||||
| Total current assets | 34,426 | 44,754 | ||||||||
| Property and equipment, net | 2,348 | 2,558 | ||||||||
| Right of use asset | 239 | — | ||||||||
| Investment in VericiDx | 1,700 | 2,744 | ||||||||
| Investment in Kantaro | — | 9 | ||||||||
| Total assets | $ | 38,713 | $ | 50,065 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | 1,892 | $ | 1,376 | |||||||
| Accounts payable – related party | 2,370 | 1,083 | ||||||||
| Accrued expenses and other current liabilities | 2,873 | 3,060 | ||||||||
| Accrued expenses – related party | 1,516 | 1,496 | ||||||||
| Deferred revenue | 39 | 46 | ||||||||
| Current lease liability | 128 | — | ||||||||
| Convertible notes-current | 4,473 | 4,660 | ||||||||
| Payable to affiliate – current | 43 | 55 | ||||||||
| Total current liabilities | 13,334 | 11,776 | ||||||||
| Convertible notes-noncurrent | 6,408 | 7,682 | ||||||||
| Noncurrent lease liability | 128 | — | ||||||||
| Total liabilities | 19,870 | 19,458 | ||||||||
| Commitments and contingencies (Note 10) | ||||||||||
| Shareholders’ equity: | ||||||||||
| Ordinary shares, £0.0025 par value per share: 79,411,245 shares authorized; 74,891,844 and 74,760,432 shares issued and outstanding at |
229 | 228 | ||||||||
| Additional paid-in capital | 164,890 | 164,012 | ||||||||
| Accumulated other comprehensive income | (1,605 | ) | (915 | ) | ||||||
| Accumulated deficit | (144,671 | ) | (132,718 | ) | ||||||
| Total shareholders’ equity | 18,843 | 30,607 | ||||||||
| Total liabilities and shareholders’ equity | $ | 38,713 | $ | 50,065 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
| Three Months Ended | Three Months Ended | |||||||
| (in thousands, except share data) | ||||||||
| Revenue | $ | 969 | $ | 482 | ||||
| Cost of revenue | 696 | 227 | ||||||
| Gross profit | 273 | 255 | ||||||
| Operating expenses: | ||||||||
| Research and development | 3,757 | 3,998 | ||||||
| General and administrative | 8,250 | 8,132 | ||||||
| Performance of contract liability to affiliate | (12 | ) | (61 | ) | ||||
| Total operating expenses | 11,995 | 12,069 | ||||||
| Loss from operations | (11,722 | ) | (11,814 | ) | ||||
| Equity in net (losses) earnings of affiliate | (9 | ) | — | |||||
| Foreign currency gain, net | 1,730 | 2,303 | ||||||
| Fair value adjustment to VericiDx investment | (854 | ) | (607 | ) | ||||
| Fair value adjustment to convertible notes | (1,213 | ) | — | |||||
| Other income, net | 114 | 12 | ||||||
| Net loss before income taxes | (11,954 | ) | (10,106 | ) | ||||
| Income tax expense | 1 | — | ||||||
| Net loss | (11,953 | ) | (10,106 | ) | ||||
| Net loss per ordinary share—basic and diluted | $ | (0.16 | ) | $ | (0.14 | ) | ||
| Weighted average ordinary shares—basic and diluted | 74,804,712 | 72,230,803 | ||||||
| Other comprehensive income (loss): | ||||||||
| Changes in the fair value of the convertible notes | 397 | — | ||||||
| Foreign exchange translation adjustment | (1,087 | ) | (2,585 | ) | ||||
| Comprehensive loss | (12,643 | ) | (12,691 | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
| Ordinary shares | Additional paid-in |
Accumulated other comprehensive |
Accumulated | Total shareholders’ |
|||||||||||||||||||||
| (in thousands, except share and per share data) | Shares | Amount | capital | income (loss) | deficit | equity | |||||||||||||||||||
| Balance at |
74,760,432 | $ | 228 | $ | 164,012 | $ | (915 | ) | $ | (132,718 | ) | $ | 30,607 | ||||||||||||
| Shares issued under the employee share purchase program | 131,412 | 1 | 115 | — | — | 116 | |||||||||||||||||||
| Stock-based compensation expense | — | — | 763 | — | — | 763 | |||||||||||||||||||
| Currency translation adjustments | — | — | — | (1,087 | ) | — | (1,087 | ) | |||||||||||||||||
| Changes in the fair value of the convertible notes at fair value | — | — | — | 397 | — | 397 | |||||||||||||||||||
| Net loss | — | — | — | — | (11,953 | ) | (11,953 | ) | |||||||||||||||||
| Balance at |
74,891,844 | $ | 229 | $ | 164,890 | $ | (1,605 | ) | $ | (144,671 | ) | $ | 18,843 | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
| Ordinary shares | Additional paid-in |
Accumulated other comprehensive |
Accumulated | Total shareholders’ |
||||||||||||||||||||
| (in thousands, except share and per share data) | Shares | Amount | capital | income (loss) | deficit | equity | ||||||||||||||||||
| Balance at |
72,197,286 | $ | 220 | $ | 150,407 | $ | 8,276 | $ | (87,442 | ) | $ | 71,461 | ||||||||||||
| Shares issued under the employee share purchase plan | 10,920 | — | 120 | — | — | 120 | ||||||||||||||||||
| Exercise of stock options | 32,500 | — | 86 | — | — | 86 | ||||||||||||||||||
| Stock-based compensation expense | — | — | 997 | — | — | 997 | ||||||||||||||||||
| Currency translation adjustments | — | — | — | (2,585 | ) | — | (2,585 | ) | ||||||||||||||||
| Net loss | (10,106 | ) | (10,106 | ) | ||||||||||||||||||||
| Balance at |
72,240,706 | $ | 220 | $ | 151,610 | $ | 5,691 | $ | (97,548 | ) | $ | 59,973 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| (in thousands) | Three Months Ended |
Three Months Ended |
||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (11,953 | ) | $ | (10,106 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | 130 | 119 | ||||||
| Stock-based compensation | 767 | 997 | ||||||
| Equity in losses of affiliate | 9 | — | ||||||
| Reduction of Kantaro liability | (12 | ) | — | |||||
| Fair value adjustment to VericiDx investment | 854 | 607 | ||||||
| Unrealized foreign exchange (gain) loss | 456 | (2,058 | ) | |||||
| Fair value adjustment to convertible debt | 921 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (322 | ) | 242 | |||||
| Prepaid expenses and other current assets | 312 | (431 | ) | |||||
| Receivable from affiliates | (13 | ) | (28 | ) | ||||
| Accounts payable | 555 | (646 | ) | |||||
| Accounts payable – related party | 1,287 | 510 | ||||||
| Accrued expenses and other current liabilities | (125 | ) | 14 | |||||
| Accrued expenses – related party | 22 | 383 | ||||||
| Deferred revenue | (7 | ) | (32 | ) | ||||
| Payable to affiliate – current | — | (61 | ) | |||||
| Other liabilities | — | — | ||||||
| Net cash used in operating activities | (7,119 | ) | (10,490 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | — | (224 | ) | |||||
| Software development costs | — | (33 | ) | |||||
| Net cash used in investing activities | — | (257 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Payment of convertible notes principal | (1,060 | ) | — | |||||
| Proceeds from the issuance of ordinary shares under employee share purchase plan |
116 | 120 | ||||||
| Proceeds from exercise of stock options | — | 86 | ||||||
| Net cash provided by financing activities | (944 | ) | 206 | |||||
| Effect of exchange rate changes on cash | (2,230 | ) | (261 | ) | ||||
| Net (decrease) in cash and cash equivalents | (10,293 | ) | (10,802 | ) | ||||
| Cash and cash equivalents, beginning of period | 41,333 | 65,128 | ||||||
| Cash and cash equivalents, end of period | $ | 31,040 | $ | 54,326 | ||||
| Supplemental noncash investing and financing activities: | ||||||||
| Cash Paid for interest on convertible debt | $ | 292 | $ | — | ||||
| Software development costs in accounts payable and accrued expenses | $ | — | $ | 19 | ||||
| Purchase of property and equipment in accounts payable and accrued expenses |
$ | — | $ | 15 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Business and risks
Renalytix and its wholly-owned subsidiaries,
In
Since inception in
The Company is subject to risks and uncertainties common to early-stage companies in the diagnostics industry, including, but not limited to, ability to secure additional capital to fund operations, compliance with governmental regulations, development by competitors of new technological innovations, dependence on key personnel and protection of proprietary technology. To achieve widespread usage, KidneyIntelX and additional diagnostic products currently under development will require extensive clinical testing and validation prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities.
2. Liquidity and Going Concern
The Company has incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of
Substantial additional capital will be necessary to fund the Company's operations, expand its commercial activities and develop other potential diagnostic related products. The Company plans to seek additional funding through public or private equity offerings, debt financings, other collaborations, strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s shareholders. If the Company is unable to obtain funding, the Company could be required to delay, curtail or discontinue research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospect.
3. Basis of presentation and summary of significant accounting policies
The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company’s financial position as of
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the accounts of
Use of estimates
The preparation of the consolidated financial statements in conformity with
Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant areas that require management’s estimate include the assumptions used in determining the fair value of share-based awards, determining the fair value of the bonds, recording the prepaid/accrual and associated expense for research and development activities performed for the Company by third parties, determining useful lives of property and equipment and capitalized software, the assessment of noncontrolling interest and equity method investments.
Segment information
The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is to make significant improvements in kidney disease diagnosis and prognosis, clinical care, patient stratification for drug clinical trials, and drug target discovery.
Foreign currency
The Company’s consolidated financial statements are presented in
Concentrations of credit risk and major customers
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable balances. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and are not exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships and has not experienced any losses on such accounts.
The Company’s accounts receivable are derived from revenue earned from customers located in the
Fair value of financial instruments
At
Fair value option
Under the Fair Value Option Subsections of ASC subtopic 825-10, Financial Instruments – Overall, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument-by-instrument basis, with changes in fair value reported in earnings (see Note 5). The Company has elected to measure and record the convertible notes at their estimated fair value.
Cash and cash equivalents
The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. As of
Accounts receivable
Accounts receivable are recorded at the invoice amount and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. No reserves have been recorded as of
Property and equipment
Property and equipment are recorded at cost. Depreciation is determined using the straight-line method over the estimated useful lives ranging from three to ten years. Expenditures for maintenance and repairs are expensed as incurred while renewals and betterments are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in operations.
Leases
Effective
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet, leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.
Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. Upon adoption, the Company elected the package of practical expedients and the hindsight practical expedient but did not elect the easement practical expedient which is not applicable to the Company as the Company does not have any ground leases. In accordance with the package of practical expedients, the Company has not reassessed any of their existing or expired contracts or any other agreements that were previously concluded to not contain a lease for the following practical expedient guidance: (1) whether the arrangement is or contains a lease, (2) lease classification and (3) whether previously capitalized costs continue to qualify as initial direct costs.
Performance of contract liability to affiliate
In
Equity method investments
The Company accounts for equity investments where it owns a non-controlling interest, but has the ability to exercise significant influence, under the equity method of accounting. Under the equity method of accounting, the original cost of the investment is adjusted for the Company’s share of equity in the earnings of the equity investee and reduced by dividends and distributions of capital received, unless the fair value option is elected, in which case the investment balance is marked to fair value each reporting period and the impact of changes in fair value of the equity investment are reported in earnings.
As the Company can exert significant influence over, but does not control, Kantaro’s operations through voting rights or representation on Kantaro’s board of directors, the Company accounts for this investment using the equity method of accounting. The Company records its share in Kantaro’s earnings and losses in the condensed consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognize an impairment loss to adjust the investment to its then-current fair value. The Company owned 25% of the membership equity units in Kantaro at
Impairment assessment
The Company evaluates its investments that are in unrealized loss positions, if any, and equity method investments for other-than-temporary impairment on a quarterly basis (see note 3). Such evaluation involves a variety of considerations, including assessments of the risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers or investees. Factors considered by the Company include (i) the length of time and the extent to which an investment’s fair value has been below its cost; (ii) the financial condition, credit worthiness, and near-term prospects of the issuer; (iii) the length of time to maturity; (iv) future economic conditions and market forecasts; (v) the Company’s intent and ability to retain its investment for a period of time sufficient to allow for recovery of market value; (vi) an assessment of whether it is more likely than not that the Company will be required to sell its investment before recovery of market value; and (vii) whether events or changes in circumstances indicate that the investment’s carrying amount might not be recoverable.
Software development costs
The Company follows the provisions of ASC 985, Software, which requires software development costs for software to be marketed externally to be expensed as incurred until the establishment of technological feasibility, at which time those costs are capitalized until the software is available for general release and amortized over its estimated useful life of ten years. Technological feasibility is established upon the completion of a working model that has been validated.
Revenue recognition
The Company accounts for revenue under ASC 606 – Revenue from Contracts with Customers (“ASC 606”). Pursuant to ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. Certain contracts have options for the customer to acquire additional services. The Company evaluates these options to determine if a material right exists. If, after that evaluation, it determines a material right does exist, it assigns value to the material right based upon the renewal option approach. The Company recognizes as revenue the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Company uses present right to payment and customer acceptance as indicators to determine the transfer of control to the customer occurs at a point in time. Sales tax and other similar taxes are excluded from revenues.
Cost of revenue
Cost of revenue consists of costs directly attributable to the services rendered, including labor costs and lab consumables directly related to revenue generating activities.
Research and development expenses
Research and development costs consist primarily of costs incurred in connection with the development of KidneyIntelX and other studies for KidneyIntelX to determine clinical value and performance in different CKD populations. Research and development costs are expensed as incurred.
Share-based compensation
The Company measures equity classified share-based awards granted to employees and nonemployees based on the estimated fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognizes compensation expense on a straight-line basis over the service period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company was a privately-held organization prior to
The Company classifies share-based compensation expense in its condensed consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Income taxes
Income taxes are accounted for under the asset and liability method as required by FASB ASC Topic 740, Income Taxes (ASC 740). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A reduction in the carrying value of the deferred tax assets is required when it is not more likely than not that such deferred tax assets are realizable.
FASB ASC Subtopic 740-10, Accounting for Uncertainty of Income Taxes(ASC 740-10), defines the criterion an individual tax position must meet for any part of the benefit of the tax position to be recognized in financial statements prepared in conformity with
Comprehensive loss
Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders. For the periods presented changes in shareholders’ equity includes foreign currency translation as well as changes in fair value of the convertible note due to changes in instrument specific credit risk. The change in instrument specific credit risk was calculated as the change in the risk yield from the convertible debt issuance date to the valuation date. The instrument specific credit risk at issuance date was calibrated such that the fair value of the convertible bond was equal to the issue price as of the issuance date. The risk yield was adjusted to reflect the change in credit spreads between the issuance date and the valuation date.
Net loss per ordinary share
Basic net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during each period. Diluted net loss per ordinary share includes the effect, if any, from the potential exercise or conversion of securities, such as options and convertible debt which would result in the issuance of incremental ordinary shares.
The dilutive effect of convertible securities is calculated using the if-converted method. Under the if-converted method, interest charges applicable to the convertible debt as well as nondiscretionary adjustments which include any expenses or charges that are determined based on the income (loss) for the period are added back to net income. The convertible debt is assumed to have been converted at the beginning of the period (or at time of issuance, if later).
For the quarter ended
Emerging growth company
The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). Under the JOBS Act, companies have extended transition periods available for complying with new or revised accounting standards. The Company has elected to avail itself of this exemption and, therefore, while the Company is an emerging growth company it will not be subject to new or revised accounting standards at the same time that they become applicable to other public emerging growth companies that have not elected to avail themselves of this exemption.
Recently issued accounting pronouncements
In
In
4. Revenue
Testing services revenue
Testing services revenue is generated from the KidneyIntelX platform, which provides analytical services to customers. Each individual test is a performance obligation that is satisfied at a point in time upon completion of the testing process (when results are reported) which is when control passes to the customer and revenue is recognized. During the three months ended
Pharmaceutical services revenue
Pharmaceutical services revenue is generated from the provision of analytical services to customers. Contracts with customers generally include an initial upfront payment and additional payments upon achieving performance milestones. The Company uses present right to payment and customer acceptance as indicators to determine the transfer of control to the customer which may occur at a point in time or over time depending on the individual contract terms. Sales tax and other similar taxes are excluded from revenues.
During the three months ended
Professional services revenue
Professional services revenue consists of services related to the creation of a branded care navigation portal/pathway for use with KidneyIntelX. Revenue is recognized when control of the promised services is transferred to customers and the performance obligation is fulfilled in an amount that reflects the consideration that the Company expects to be entitled in exchange for those services.
The company did not recognize any professional services revenue during the three months ended
Deferred revenue
Deferred revenue represents the allocated transaction price to the material right which will be recognized as revenue when the renewal options are exercised which is expected to occur over the next few months.
The following table summarizes the changes in deferred revenue:
| (in thousands) | |||||||||
| Balance, beginning of period | $ | 46 | $ | 122 | |||||
| Deferral of revenue | $ | — | 67 | ||||||
| Revenue recognized | (7 | ) | (143 | ) | |||||
| Balance, end of period | $ | 39 | $ | 46 | |||||
5. Fair value measurements and the fair value option
Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
- Level 1 - Quoted prices (unadjusted in active markets for identical assets or liabilities)
- Level 2 - Inputs other than quoted prices in active markets that are observable either directly or indirectly
- Level 3 - Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions
This hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The following fair value hierarchy table presents information about the Company’s assets measured at fair value on a recurring basis:
| Fair value measurement at | ||||||||||||
| reporting date using | ||||||||||||
| (in thousands) | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Assets: | ||||||||||||
| Available for sale securities | $ | 1,700 | $ | — | $ | — | ||||||
| Liabilities: | ||||||||||||
| Convertible notes | $ | — | $ | — | $ | 10,881 | ||||||
| Assets: | ||||||||||||
| Available for sale securities | $ | 2,744 | $ | — | $ | — | ||||||
| Liabilities: | ||||||||||||
| Convertible notes | $ | — | $ | — | $ | 12,342 | ||||||
As further described in Note 8, in
The Company adjusts the carrying value of the Notes to their estimated fair value at each reporting date, with qualifying increases or decreases in the fair value recorded as change in fair value of convertible promissory notes in the statements of operations and comprehensive loss. Changes in the fair value resulting from changes in the instrument-specific credit risk will be presented separately in other comprehensive income.
| (in thousands) | ||||
| Balance at |
$ | 12,342 | ||
| Change in Principal amount | $ | (1,352 | ) | |
| Change in credit risk | $ | (397 | ) | |
| Change in time to maturity, stock price and Risk-Free Rates | $ | 1,213 | ||
| FX Impact | $ | (925 | ) | |
| Balance at |
$ | 10,881 | ||
Non-financial assets and liabilities
The Company’s non-financial assets, which primarily consist of property and equipment and equity method investments, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value in its condensed consolidated balance sheet. However, on a periodic basis or whenever events or changes in circumstances indicate that they may not be fully recoverable, the respective carrying value of non-financial assets are assessed for impairment and, if ultimately considered impaired, are adjusted and written down to their fair value, as estimated based on consideration of external market participant assumptions.
6. Property and equipment
Property and equipment consists of (in thousands):
| (in thousands) | ||||||||||
| Lab equipment | $ | 1,143 | $ | 1,143 | ||||||
| Software | 1,380 | 1,476 | ||||||||
| Office equipment | 124 | 124 | ||||||||
| Office furniture | 35 | 35 | ||||||||
| Leasehold improvements | 576 | 576 | ||||||||
| Construction in progress | — | — | ||||||||
| Total | 3,258 | 3,354 | ||||||||
| Less accumulated depreciation and amortization | (910 | ) | (796 | ) | ||||||
| $ | 2,348 | $ | 2,558 | |||||||
Depreciation expense was
As of
As of
| (in thousands) | ||||
| 2023 | $ | 125 | ||
| 2024 | 166 | |||
| 2025 | 166 | |||
| 2026 | 128 | |||
| 2027 | 111 | |||
| Thereafter | 371 | |||
| $ | 1,067 | |||
7. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of (in thousands):
| Consulting and professional fees | $ | 446 | $ | 551 | ||||||
| Research and development | 1,008 | 1,060 | ||||||||
| Payroll and related benefits | 1,092 | 1,437 | ||||||||
| License Expense | 300 | — | ||||||||
| Other | 27 | 12 | ||||||||
| $ | 2,873 | $ | 3,060 | |||||||
8. Convertible Notes
In
The Convertible Bond Investor is also permitted to defer up to two amortization payments to a subsequent amortization date. The Company retains the option to repay any deferred amortization in cash at 100 per cent. of the nominal amount In
On issuance, the Company elected to account for the Bonds at fair value in accordance with ASC 815, Derivatives and Hedging, with qualifying changes in fair value being recognized through the statements of operations until the Bonds are settled. Changes in fair value related to instrument-specific credit risk are recognized through comprehensive loss until the Bonds are settled. The fair value of the bonds is determined using a scenario-based analysis that estimates the fair value based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders. Significant assumptions used in the fair value analysis include the volatility rate, risk-free rate, dividend yield and risky yield. As of
9. Leases
The Company leases certain office space and laboratory space. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company does not recognize right-of-use assets or lease liabilities for leases determined to have a term of 12 months or less. Many of the Company's leases contain variable non-lease components such as maintenance, taxes, insurance, and similar costs for the spaces it occupies.
Variable executory costs, as it relates to net leases, are excluded from the calculation of the lease liability. Variable executory costs include costs relating to utilities, repairs, maintenance, insurance, common area expenses, and taxes paid for the leased asset during its economic life. The Company expenses the variable lease payments in the period in which it incurs the obligation to pay such variable amounts and will be included in variable lease costs in the leases footnote disclosure. These variable lease payments are not included in the Company's calculation of its right-of-use assets or lease liabilities.
Upon adoption of ASC 842, the Company elected the package of practical expedients and the hindsight practical expedient but did not elect the easement practical expedient which is not applicable to the Company as the Company does not have any ground leases. In accordance with the package of practical expedients, the Company has not reassessed any of their existing or expired contracts or any other agreements that were previously concluded to not contain a lease for the following practical expedient guidance: (1) whether the arrangement is or contains a lease, (2) lease classification and (3) whether previously capitalized costs continue to qualify as initial direct costs.
The Company leases certain office space and laboratory space. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present.
The Company leased lab space in
The Company leased lab space in
The Company leased lab space in
The Company leased office space in
The Company leased office space in
The Company identified and assessed the following significant assumptions in recognizing its right-of-use assets and corresponding lease liabilities during the adoption of ASC 842:
As the Company's leases do not provide an implicit rate, it estimated the incremental borrowing rate for each lease by considering average interest rates on commercial real estate loans during 2022 which range from 2.2%, for established borrowers with excellent credit ratings, to 18.0%, for borrowers early in the business’ life cycle and with lower credit ratings. As the Company is an early-stage biotech company with minimal revenues, the Company concluded that a 10.0% IBR, the approximate midpoint between the average commercial real estate loans during 2022, is an appropriate discount rate to use for the
The following table shows the lease balance sheet classification of leases for the quarter ended
| (in thousands) | ||||
| Assets | ||||
| Operating lease right-of-use assets, net of accumulated amortization | $ | 239 | ||
| Liabilities | ||||
| Current | $ | 128 | ||
| Operating lease liabilities, current | ||||
| Non-current | ||||
| Operating lease liabilities, non-current | $ | 128 | ||
| Total lease liabilities | $ | 256 | ||
The following table shows the lease costs for the quarter ended
| Lease costs (in thousands) | Statement of operations classification | |||
| Operating lease costs | Operating expenses: research and development | $ | 32 | |
| Short term lease costs | Operating expenses: research and development | $ | 8 | |
| Short term lease costs | Operating expenses: general and administrative | $ | 38 | |
| Short term lease costs | Cost of goods sold | $ | 91 | |
| Total lease costs | $ | 170 | ||
| Other information | |||
| Cash paid for amounts included in the measurement of lease liabilities (in thousands) | $ | 33 | |
| Remaining lease term - operating leases (in years) | 2.1 | ||
| Discount rate - operating leases | 10 | % | |
The future minimum payments for noncancelable leases with terms in excess of one year as of
| 2023 | $ | 125 | ||
| 2024 | $ | 157 | ||
| 2025 | $ | 46 | ||
| Total | $ | 328 |
10. Commitments and contingencies
Leases
Lease payments under operating leases as of
DaVita Inc.
In
Employment agreements
The Company has entered into employment agreements with certain key executives providing for compensation and severance in certain circumstances, as set forth in the agreements.
Retirement plans
The Company maintains a defined contribution 401(k) retirement plan which covers all
Legal proceedings
The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.
11. License and services agreements
Mount Sinai license and sponsored research agreements
On
As part of the ISMMS SRA, the Company has agreed to fund several research projects to further develop the ISMMS Technology. The Company incurred
Mount Sinai clinical trial agreement
In
Joslin diabetes center agreement
In
Under the terms of the Joslin Agreement, the Company is obligated to pay Joslin aggregate commercial milestone payments of
The Joslin Agreement initially expires on
12. Shareholders’ equity
Ordinary shares
As of
13. Share-based compensation
Equity Incentive Plans
In
The Plans are administered by the board of directors. The exercise prices, vesting and other restrictions are determined at their discretion, except that all options granted have exercise prices equal to the fair value of the underlying ordinary shares on the date of the grant and the term of stock option may not be greater than ten years from the grant date.
The options granted as of
The Company recorded share-based compensation expense in the following expense categories in the condensed consolidated statements of operations for the three months ended
| Three Months Ended |
||||||||
| 2022 | 2021 | |||||||
| Research and development | $ | 67 | $ | 179 | ||||
| General and administrative | 696 | 795 | ||||||
| $ | 763 | $ | 974 | |||||
The fair value of options is estimated using the Black-Scholes option pricing model, which takes into account inputs such as the exercise price, the value of the underlying ordinary shares at the grant date, expected term, expected volatility, risk-free interest rate and dividend yield. The fair value of each grant of options during the three months ended
- The expected term of employee options is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data.
- The expected volatility is based on historical volatility of the publicly-traded common stock of a peer group of companies.
- The risk-free interest rate is based on the interest rate payable on
U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. - The expected dividend yield is none because the Company has not historically paid and does not expect for the foreseeable future to pay a dividend on its ordinary shares.
For the three months ended
| Three Months Ended |
||||||||
| 2022 | 2021 | |||||||
| Expected term (in years) | 6.1 | 6.11 | ||||||
| Expected volatility | 66.9 | % | 66.9 | % | ||||
| Risk-free rate | 3.2 | % | 1.02 | % | ||||
| Dividend yield | — | % | — | % | ||||
There were no options granted during the three months ended
The following table summarizes the stock option granted to employees and non-employees for the three months ended
| Number of shares under option plan |
Weighted- average exercise price per option |
Weighted- average remaining contractual life (in years) |
||||||||||
| Outstanding at |
4,554,901 | $ | 5.34 | 8.1 | ||||||||
| Granted | 80,000 | $ | 1.71 | 6.1 | ||||||||
| Exercised | — | — | ||||||||||
| Forfeited | (115,500 | ) | $ | 12.76 | 8.9 | |||||||
| Outstanding at |
4,519,401 | $ | 5.09 | 8.1 | ||||||||
| Exercisable at |
3,549,894 | $ | 4.06 | 6.8 | ||||||||
| Vested and expected to vest at |
4,519,401 | $ | 5.09 | 8.1 | ||||||||
As of
Employee Share Purchase Plan
The Company’s 2020 Employee Share Purchase Plan (the “ESPP”) became effective on
Under the ESPP, eligible employees can purchase the Company’s common stock through accumulated payroll deductions at such times as are established by the board of directors or remuneration committee. Eligible employees may purchase the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock on the first day of the offering period or on the purchase date. Eligible employees may contribute up to 15% of their eligible compensation. Under the ESPP, a participant may not purchase more than
In accordance with the guidance in ASC 718-50 – Compensation – Stock Compensation, the ability to purchase shares of the Company’s common stock at 85% of the lower of the price on the first day of the offering period or the last day of the offering period (i.e. the purchase date) represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, share-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black Scholes option-pricing model and is recognized over the withholding period. The Company recognized share-based compensation expense of
14. Related-party transactions
During the three months ended
In
In connection with the formation of Kantaro, the Company entered into a five-year Advisory Services Agreement (“Advisory Agreement”) pursuant to which the Company has agreed to provide certain advisory services to Kantaro. Pursuant to the Kantaro Operating Agreement, Kantaro issued 750 Class A Units to Mount Sinai in exchange for Mount Sinai granting licenses to Kantaro under certain intellectual property rights of Mount Sinai and 250 Class A Units to the Company as the sole consideration for the services to be rendered by the Company under the Advisory Agreement. A portion of the Company’s units are subject to forfeiture if, prior to
A contributing factor to the impairment consideration for Kantaro was lower forecasted sales volume and consequently, a lower time commitment from Renalytix employees. Based on these circumstances, the Company adjusted the liability to perform services to Kantaro under the Advisory Agreement during the year ended
For the three months ended
In addition to the equity granted at formation, in
15. Net loss per ordinary share
Basic net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during each period. Diluted net loss per ordinary share includes the effect, if any, from the potential exercise or conversion of securities, such as options which would result in the issuance of incremental ordinary shares. Potentially dilutive securities outstanding as of
The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:
| Three Months Ended |
|||||||||
| 2022 | 2021 | ||||||||
| Stock options to purchase common stock | 4,519,401 | 4,155,125 | |||||||
| Conversion of convertible note | 2,071,264 | — | |||||||
| 6,590,665 | 4,155,125 | ||||||||
Source:
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