Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the corresponding section of our Annual Report on Form 10-K for the year ended March 31, 2022 filed with the SEC on June 28, 2022.
The information set forth and discussed below for the quarters ended June 30, 2022 and June 30, 2021 is derived from the condensed consolidated financial statements included under Part I, Item 1 "Financial Statements" above. The financial information set forth and discussed below is unaudited but includes all normal and recurring adjustments that our management considers necessary for a fair presentation of the financial position and the operating results and cash flows for those periods. Our results of operations for a particular quarter may not be indicative of the results that may be expected for other quarters or the entire year.
In addition to historical financial information, the following discussion contains forward looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, and our Annual Report on Form 10-K for the year ended March 31, 2022, particularly in "Risk Factors."
Overview
We were incorporated in Jersey, Channel Islands on January 18, 2012. On February 16, 2012, we acquired the entire issued share capital of Alba Bioscience Limited (or Alba), Quotient Biodiagnostics, Inc. (or QBDI) and QBD (QSIP) Limited (or QSIP) from Quotient Biodiagnostics Group Limited (or QBDG), our predecessor.
Our Business
We are a commercial-stage diagnostics company committed to reducing healthcare costs and improving patient care through the provision of innovative tests within established markets. Our initial focus is on blood grouping and donor disease screening, which is commonly referred to as transfusion diagnostics. Blood grouping involves specific procedures performed at donor or patient testing laboratories to characterize blood, which includes antigen typing and antibody detection. Disease screening involves the screening of donor blood for unwanted pathogens using two different methods, a serological approach (testing for specific antigens or antibodies) and a molecular approach (testing for DNA or RNA).
We have over 30 years of experience developing, manufacturing and commercializing conventional reagent products used for blood grouping within the global transfusion diagnostics market. We are developing MosaiQ, our proprietary technology platform, to better address the comprehensive needs of this large and established market. We believe MosaiQ has the potential to transform transfusion diagnostics, significantly reducing the cost of blood grouping in the donor and patient testing environments, while improving patient outcomes.
We currently operate as one business segment with 437 employees in the United Kingdom, Switzerland and the United States, as of June 30, 2022. Our principal markets are the United States, Europe and Japan. Based on the location of the customer, revenues outside the United States accounted for 45% of total revenue during the three month period ended June 30, 2022 and 44% during the three month period ended June 30, 2021.
We have incurred net losses and negative cash flows from operations in each year since we commenced operations in 2007. As of June 30, 2022, we had an accumulated deficit of $763.9 million. We expect our operating losses to continue for at least the remainder of the fiscal year ending March 31, 2023 as we continue our investment in the commercialization of MosaiQ. For the three month period ended June 30, 2022, our total revenue was $8.8 million and our net loss was $38.9 million.
From our incorporation in 2012 to March 31, 2022, we have raised $160.0 million of gross proceeds through the private placement of our ordinary and preference shares and warrants, $433.0 million of gross proceeds from public offerings of our ordinary shares and issuances of ordinary shares upon exercise of warrants, $145.0 million of gross proceeds from the issuance of 12% Senior Secured Notes due 2025 (which we refer to as the Secured Notes) and $105 million of gross proceeds from the issuance of 4.75% Convertible Notes due 2026 (which we refer to as the Convertible Notes). In addition, on March 23, 2018, we raised $20.9 million from the sale and leaseback of our conventional reagents manufacturing facility near Edinburgh, Scotland, which we refer to as the Allan Robb Campus, or ARC, facility.
During the quarter ended June 30, 2022, we raised gross proceeds of approximately $20.0 million from a public offering of 32,458,336 of our ordinary shares and, in lieu of ordinary shares to certain investors, pre-funded warrants exercisable for an aggregate of 34,208,331 ordinary shares at an exercise price of $0.001 per share.
As of June 30, 2022, we had available cash, cash equivalents and investments of $63.2 million and $8.7 million of restricted cash held as part of the arrangements relating to our Secured Notes and the lease of our property in Eysins, Switzerland.
- 17 -
Regulatory and Commercial Milestones
You should read the following regulatory and commercial milestones update in conjunction with the discussion included under the sections "Item 1. Business" and "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended March 31, 2022 filed with the SEC on June 28, 2022.
IH Extended and Patient Microarrays
•Our extended IH microarray launched commercially in the European Union in the first half of 2022 and we currently expect that our MosaiQ patient IH microarray will commercially launch in the European Union before the end of calendar year 2023.
•We currently expect commercial launch of the extended IH microarray and the patient IH microarray in the United States to occur in calendar year 2024.
SDS and MDS Microarrays
•We currently expect commercial launch of the extended MosaiQ SDS microarray in European Union to occur before the end of calendar year 2023 in the United States before the end of calendar year 2024.
•We currently expect commercial launch of the MosaiQ MDS microarray in the European Union to occur before the end of calendar year 2025.
CDS Microarrays
•We currently expect commercial launch of the CDS autoimmune microarray in the European Union and the United States to occur before the end of calendar year 2023.
•We currently expect commercial launch of the CDS allergy microarray to occur in the European Union before the end of calendar year 2024.
Revenue
We generate product sales revenue from the sale of conventional reagent products directly to hospitals, donor collection agencies and independent testing laboratories in the United States, the United Kingdom and to distributors in Europe and the rest of the world, and indirectly through sales to our original equipment manufacturer (or OEM) customers. We recognize revenues in the form of product sales when the goods are shipped. We also provide product development services to our OEM customers. We recognize revenue from these contractual relationships in the form of product development fees, which are included in other revenues.
Our revenue is denominated in multiple currencies. Sales in the United States and to certain of our OEM customers are denominated in U.S. Dollars. Sales in Europe and the rest of the world are denominated primarily in U.S. Dollars, Pounds Sterling or Euros. Our expenses are generally denominated in the currencies in which our operations are located, which are primarily in the United Kingdom, Switzerland and the United States. We operate globally and therefore changes in foreign currency exchange rates may become material to us in the future due to factors beyond our control.
Cost of revenue and operating expenses
Cost of revenue consists of direct labor expenses, including employee benefits, overhead expenses, material costs and freight costs, along with the depreciation of manufacturing equipment and leasehold improvements. Our gross profit represents total revenue less the cost of revenue, gross margin represents gross profit expressed as a percentage of total revenue, and gross margin on product sales represents gross margin excluding other revenues as a percentage of revenues excluding other revenues. We expect our overall cost of revenue to increase in absolute U.S. Dollars as we continue to increase our product sales volumes. However, we also believe that we can achieve efficiencies in our manufacturing operations, primarily through increasing production volumes.
Our sales and marketing expenses include costs associated with our sales organization for conventional reagent products, including our direct sales force, as well as our marketing and customer service personnel and the costs of the MosaiQ commercial team. These expenses consist principally of salaries, commissions, bonuses and employee benefits, as well as travel and other costs related to our sales and product marketing activities. We expense all sales and marketing costs as incurred. We expect sales and marketing expense to increase in absolute U.S. Dollars, primarily as a result of commissions on increased product sales in the United States and as we grow the MosaiQ commercial team.
- 18 -
Our research and development expenses include costs associated with performing research, development, field trials and our regulatory activities, as well as production costs incurred in advance of the commercial launch of MosaiQ. Research and development expenses include research personnel-related expenses, fees for contractual and consulting services, travel costs, laboratory supplies and depreciation of laboratory equipment.
We expense all research and development costs as incurred, net of government grants received and tax credits. Our UK subsidiary claims certain tax credits on its research and development expenditures and these are included as an offset to our research and development expenses. Our research and development efforts are focused on developing new products and technologies for the global transfusion diagnostics market. We expect our costs associated with field trials and regulatory approvals will increase at the same time as our development costs with MosaiQ decrease. As we move to commercialization of MosaiQ in the donor testing market, we expect our overall research and development expense to decrease.
Our general and administrative expenses include costs for our executive, accounting and finance, legal, corporate development, information technology and human resources functions. We expense all general and administrative expenses as incurred. These expenses consist principally of salaries, bonuses and employee benefits for the personnel performing these functions, including travel costs. These expenses also include share-based compensation, professional service fees (such as audit, tax and legal fees), costs related to our Board of Directors, and general corporate overhead costs, which include depreciation and amortization. We expect our general and administrative expenses to increase as our business develops and also due to the costs of operating as a public company, such as additional legal, accounting and corporate governance expenses, including expenses related to compliance with the Sarbanes-Oxley Act, directors’ and officers’ insurance premiums and investor relations expenses.
Net interest expense consists primarily of interest charges on our Secured Notes and Convertible Notes and the amortization debt discount and debt issuance costs (which includes amortization of the one-time consent payment of $3.9 million paid to holders of our Secured Notes in December 2018), as well as accrued dividends on the 7% cumulative redeemable preference shares issued in January 2015. We amortize debt issuance costs over the life of the instrument and report them as interest expense in our statements of operations. Net interest also includes the expected costs of the royalty rights agreements we entered into in October 2016, June 2018, December 2018 and May 2019 with the purchasers and consenting holders, as applicable, of our Secured Notes. See Note 3, "Debt" and Note 6, "Ordinary and Preference Shares" to our condensed consolidated financial statements included in this Quarterly Report for additional information.
Other income (expense), net consists of the change in fair value of our convertible debt derivative, warrant liabilities and the impact of exchange rate fluctuations. See Note 3, "Debt" and Note 5, "Fair value measurement" to our condensed consolidated financial statements included in this Quarterly Report for additional information. Exchange rate fluctuations include realized exchange fluctuations resulting from the settlement of transactions in currencies other than the functional currencies of our businesses. Monetary assets and liabilities that are denominated in foreign currencies are measured at the period-end closing rate with resulting unrealized exchange fluctuations. The functional currencies of our legal entities are Pounds Sterling, Swiss Francs, Euros, and U.S. Dollars depending on the entity.
Provision for income taxes in the three month periods ended June 30, 2022 and 2021, reflected the taxes chargeable on the taxable income of our subsidiaries.
- 19 -
Results of Operations
Comparison of the Quarters ended June 30, 2022 and 2021
The following table sets forth, for the periods indicated, the amounts of certain components of our statements of operations and the percentage of total revenue represented by these items, showing period-to-period changes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
|
|
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
|
Amount |
|
|
% of revenue |
|
|
Amount |
|
|
% of revenue |
|
|
Amount |
|
|
% |
|
|
|
(in thousands, except percentages) |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
8,814 |
|
|
|
100 |
% |
|
$ |
9,041 |
|
|
|
99 |
% |
|
$ |
(227 |
) |
|
|
-3 |
% |
Other revenues |
|
|
— |
|
|
|
0 |
% |
|
|
48 |
|
|
|
1 |
% |
|
|
(48 |
) |
|
|
-100 |
% |
Total revenue |
|
|
8,814 |
|
|
|
100 |
% |
|
|
9,089 |
|
|
|
100 |
% |
|
|
(275 |
) |
|
|
-3 |
% |
Cost of revenue |
|
|
6,120 |
|
|
|
69 |
% |
|
|
4,777 |
|
|
|
53 |
% |
|
|
1,343 |
|
|
|
28 |
% |
Gross profit |
|
|
2,694 |
|
|
|
31 |
% |
|
|
4,312 |
|
|
|
47 |
% |
|
|
(1,618 |
) |
|
|
-38 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,306 |
|
|
|
38 |
% |
|
|
2,493 |
|
|
|
27 |
% |
|
|
813 |
|
|
|
33 |
% |
Research and development |
|
|
14,146 |
|
|
|
160 |
% |
|
|
13,531 |
|
|
|
149 |
% |
|
|
615 |
|
|
|
5 |
% |
General and administrative |
|
|
11,037 |
|
|
|
125 |
% |
|
|
10,176 |
|
|
|
112 |
% |
|
|
861 |
|
|
|
8 |
% |
Total operating expenses |
|
|
28,489 |
|
|
|
323 |
% |
|
|
26,200 |
|
|
|
288 |
% |
|
|
2,289 |
|
|
|
9 |
% |
Operating loss |
|
|
(25,795 |
) |
|
|
-293 |
% |
|
|
(21,888 |
) |
|
|
-241 |
% |
|
|
(3,907 |
) |
|
|
18 |
% |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(8,574 |
) |
|
|
-97 |
% |
|
|
(3,002 |
) |
|
|
-33 |
% |
|
|
(5,572 |
) |
|
|
186 |
% |
Other, net |
|
|
(4,366 |
) |
|
|
-50 |
% |
|
|
(1,732 |
) |
|
|
-19 |
% |
|
|
(2,634 |
) |
|
|
152 |
% |
Total other expense, net |
|
|
(12,940 |
) |
|
|
-147 |
% |
|
|
(4,734 |
) |
|
|
-52 |
% |
|
|
(8,206 |
) |
|
|
173 |
% |
Loss before income taxes |
|
|
(38,735 |
) |
|
|
-439 |
% |
|
|
(26,622 |
) |
|
|
-293 |
% |
|
|
(12,113 |
) |
|
|
46 |
% |
Provision for income taxes |
|
|
(133 |
) |
|
|
— |
|
|
|
(670 |
) |
|
|
— |
|
|
|
537 |
|
|
|
-80 |
% |
Net loss |
|
$ |
(38,868 |
) |
|
|
-441 |
% |
|
$ |
(27,292 |
) |
|
|
-300 |
% |
|
$ |
(11,576 |
) |
|
|
42 |
% |
Revenue
Total revenue for the quarter ended June 30, 2022 decreased by 3% to $8.8 million compared with $9.1 million for the quarter ended June 30, 2021. The decrease in product sales relates primarily to reduced orders from an OEM customer in our conventional reagent business. Other revenues for the quarter ended June 30, 2021 related to a small development project for an OEM customer.
Cost of revenue and gross margin
Cost of revenue increased by 28% to $6.1 million for the quarter ended June 30, 2022 compared with $4.8 million for the quarter ended June 30, 2021. The increase in costs was driven by $0.2 million of write-downs of certain raw materials and work in process inventory associated with MosaiQ to net realizable value. There were also higher costs in our conventional reagent business due to inventory write-downs and write-offs of certain products due to expiration of products and quality control tests, higher production costs associated with inflation, and higher costs associated with sales mix in the quarter ended June 30, 2022.
Gross profit on total revenue for the quarter ended June 30, 2022 was $2.7 million, a decrease of 38% when compared with $4.3 million for the quarter ended June 30, 2021. Total gross profit on sales was 31% in the quarter ended June 30, 2022 compared to 47% in the quarter ended June 30, 2021.
Sales and marketing expenses
Sales and marketing expenses were $3.3 million for the quarter ended June 30, 2022, compared with $2.5 million for the quarter ended June 30, 2021. This increase was attributable to greater personnel and other expenses related to the planned commercial launch of MosaiQ and travel related costs. As a percentage of total revenue, sales and marketing expenses were 38% for the quarter ended June 30, 2022 compared to 27% for the quarter ended June 30, 2021.
Research and development expenses
Research and development expenses increased by 5% to $ 14.1 million for the quarter ended June 30, 2022 compared with $13.5 million for the quarter ended June 30, 2021. The increase in research and development expenses is driven by additional employee and third party expenses to support upcoming field trials and product development.
General and administrative expenses
General and administrative expenses increased by 8% to $11.0 million for the quarter ended June 30, 2022, compared with $10.2 million for the quarter ended June 30, 2021. This increase was primarily attributable to fees incurred to refinance our debt which was
- 20 -
completed on July 6, 2022. We recognized $1.6 million of stock compensation expense in the quarter ended June 30, 2022 compared with $1.8 million in the quarter ended June 30, 2021. As a percentage of total revenue, general and administrative expenses were 125% for the quarter ended June 30, 2022 compared to 112% for the quarter ended June 30, 2021.
Other (expense) income
Net interest expense was $8.6 million for the quarter ended June 30, 2022 compared with $3.0 million for the quarter ended June 30, 2021. Interest expense in the quarter ended June 30, 2022 included $5.7 million of interest charges on our Secured Notes and royalty liabilities compared with $1.9 million for the quarter ended June 30, 2021. The lower expense recognized in the prior year was a result in a significant change in the royalty cost estimates while no significant changes to estimates occurred in the quarter ended June 30, 2022. Interest expense for the quarter ended June 30, 2022 also included $2.6 million of interest charges related to the Convertible Notes compared to $0.9 million for the quarter ended June 30, 2021. The Convertible Notes were issued in the quarter ended June 30, 2021 which is why there is a significant increase in expense in the current year. Net interest expense also included $0.3 million of dividends accrued on the 7% cumulative redeemable preference shares in each of the quarters ended June 30, 2022 and June 30, 2021. In addition, in the quarter ended June 30, 2021 we realized gains of $0.1 million on our short-term money market investments while no gains were recognized in June 30, 2022.
Other, net was $4.4 million expense for the quarter ended June 30, 2022 compared with $1.7 million in expense for the quarter ended June 30, 2021. For the quarter ended June 30, 2022 this comprised a $10.8 million gain related to the change in fair value associated with derivative liabilities, a $1.0 million impairment related to the change in estimated fair value of CSAM funds and $14.2 million in foreign exchange losses arising on monetary assets and liabilities denominated in foreign currencies. In the quarter ended June 30, 2021 we recorded 2.0 million of expense related to the change in fair value associated with the Convertible loan derivative and $0.3 million in foreign exchange gains arising on monetary assets and liabilities denominated in foreign currencies.
Provision for income taxes
Provision for income taxes in the quarter ended June 30, 2022 and 2021, reflected the taxes chargeable on the taxable income of our subsidiaries.
Quarterly Results of Operations
Our quarterly product sales can fluctuate depending upon the shipment cycles for our red blood cell-based products, which account for approximately two-thirds of our current product sales. For these products, we typically experience 13 shipping cycles per year. This equates to three shipments of each product per quarter, except for one quarter per year when four shipments occur. Not all products ship on the same day so quarters where four shipments occur do not always align. In fiscal 2022 we experienced additional shipments in the third and fourth quarters. In fiscal 2023, the greatest impact of extra product shipments is expected to occur in our third quarter. The timing of shipment of bulk antisera products to our OEM customers may also move revenues from quarter to quarter. We also experience some seasonality in demand around holiday periods in both Europe and the United States. As a result of these factors, we expect to continue to see seasonality and quarter-to-quarter variations in our product sales.
The timing of product development fees included in other revenues is mostly dependent upon the achievement of pre-negotiated project milestones.
Liquidity and Capital Resources
Since our commencement of operations in 2007, we have incurred net losses and negative cash flows from operations. As of June 30, 2022, we had an accumulated deficit of $763.9 million. During the three month period ended June 30, 2022, we incurred a net loss of $38.9 million and used $35.5 million of cash in operating activities. As described under results of operations, our use of cash during the three month period ended June 30, 2022 was primarily attributable to our investment in the development of MosaiQ and corporate costs, including costs related to being a public company.
From our incorporation in 2012 to March 31, 2022, we have raised $160.0 million of gross proceeds through the private placement of our ordinary and preference shares and warrants, $433.0 million of gross proceeds from public offerings of our ordinary shares and issuances of ordinary shares upon exercise of warrants, $145.0 million of gross proceeds from the issuance of the Secured Notes and $105 million of gross proceeds from the issuance of the Convertible Notes. In addition, on March 23, 2018, we raised $20.9 million from the sale and leaseback of the Allan Robb Campus.
During the quarter ended June 30, 2022, we raised gross proceeds of approximately $20.0 million from a public offering of 32,458,336 of our ordinary shares and, in lieu of ordinary shares to certain investors, pre-funded warrants exercisable for an aggregate of 34,208,331 ordinary shares at an exercise price of $0.001 per share.
On July 6, 2022, the Company completed the Sixth Supplemental Indenture to the Secured Notes which includes a change to the amortization payment schedule of the Secured Notes from requiring semi-annual payments ranging from $12.1 million to $24.2 million beginning in April 2023, to requiring quarterly payments of $2.5 million beginning on July 15, 2024 and ending on July 15, 2025, with the remaining principal balance due on October 15, 2025, which will reduce expected amortization payments by $93.0 million over the next 36 months prior to the payment of the remaining principal balance at maturity. It eliminates the requirement that
- 21 -
we maintain a cash reserve account for the benefit of holders of the Secured Notes, and adds a covenant that we maintain a minimum liquidity of at least $8.0 million, comprised of cash and certain other eligible investments, as of the end of each fiscal quarter. See Note 3 to the financial statements for additional information.
We expect to fund our operations in the near-term, including the ongoing development of MosaiQ through successful field trial completion, achievement of required regulatory authorizations and commercialization from a combination of funding sources. These expected funding sources include the use of existing available cash and investment balances, the sale of rights and other assets, and the issuance of new equity or debt.
As of June 30, 2022, we had available cash, cash equivalents and short-term investments of $63.2 million and $8.7 million of restricted cash held as part of the arrangements relating to our Secured Notes and the lease of our property in Eysins, Switzerland.
Cash Flows for the quarter ended June 30, 2022 and 2021
Operating activities
Net cash used in operating activities was $35.5 million during the three month period ended June 30, 2022, which included net losses of $38.9 million offset by non-cash items of $16.1 million. Non-cash items were depreciation and amortization expense of $1.5 million, share-based compensation expense of $1.6 million, an decrease from the change in fair value of loan derivatives of $10.8 million, Swiss pension costs of $0.2 million, amortization of debt discounts and unrealized foreign currency loss on debt of $21.8 million, impairment of investments of $1.0 million, accrued preference share dividends of $0.3 million, deferred lease rentals of $0.4 million and income taxes of $0.1 million. We also experienced a net cash outflow of $12.8 million from changes in operating assets and liabilities during the period, consisting of a $1.5 million decrease in accrued compensation and benefits, a $1.1 million increase in inventories, a decrease of $10.1 million from a net change in other assets and liabilities, a $0.9 million reduction in accounts payable and accrued liabilities, and a $0.8 million decrease in accounts receivables.
Net cash used in operating activities was $32.1 million during the three month period ended June 30, 2021, which included net losses of $27.3 million offset by non-cash items of $5.2 million. Non-cash items were depreciation and amortization expense of $1.9 million, share-based compensation expense of $1.8 million, change in fair value of convertible loan derivatives of $2.0 million, Swiss pension costs of $0.2 million, a credit related to amortization of deferred debt issue costs and royalties of $1.6 million, accrued preference share dividends of $0.3 million, deferred lease rentals of $0.2 million and a credit to deferred income taxes of $0.4 million. We also experienced a net cash outflow of $10.0 million from changes in operating assets and liabilities during the period, consisting of a $4.2 million reduction in accrued compensation and benefits, a $0.8 million increase in inventories, a $3.5 million increase in other assets and a $2.4 million reduction in accounts payable and accrued liabilities, offset by a $0.9 million reduction in accounts receivables.
Investing activities
Net cash (used in) provided by investing activities was $0.8 million for the quarter ended June 30, 2022 compared to $12.6 million for the quarter ended June 30, 2021.
We spent $0.8 million on purchases of property and equipment in the quarter ended June 30, 2022 compared to $1.4 million in the quarter ended June 30, 2021. Property and equipment purchased in both quarters mainly related to MosaiQ instruments and investments in our IT infrastructure. In the quarter ended June 30, 2021, we also received distributions on our short-term money market investments of $18.5 million from CSAM in the quarter and invested $4.5 million in other short-term money market investments.
Financing activities
Net cash provided by financing activities was $17.7 million during the quarter ending June 30, 2022, consisting of $17.9 million of proceeds related to the issuance of ordinary shares and warrants after deducting issuance costs and $0.2 million of repayments on finance leases.
Net cash provided by (used in) financing activities was $88.1 million during the quarter ended June 30, 2021, consisting of $100.5 million generated from the issuance of the Convertible Notes, net of debt issue costs, offset by $12.1 million repayment of the Secured Notes, expenses related to restricted stock units vested of $0.1 million and $0.2 million of repayments on finance leases.
Operating and Capital Expenditure Requirements
We have not achieved profitability on an annual basis since we commenced operations in 2007 and we expect our operating losses to continue for at least the remainder of the fiscal year ending March 31, 2023. As we launch MosaiQ in the donor testing market, we expect our operating expenses during the year ended March 31, 2023 to be similar to those of the year ended March 31, 2022.
As of June 30, 2022, we had $63.2 million of available cash, cash equivalents, and investments and $8.7 million of restricted cash held as part of the arrangements relating to our Secured Notes and the lease of our properties in Eysins, Switzerland.
- 22 -
Our future capital requirements will depend on many factors, including:
•our progress in developing and commercializing MosaiQ and the cost required to complete development, obtain regulatory approvals and complete our manufacturing scale up;
•our ability to pursue successful alternatives for commercializing MosaiQ in the patient market;
•our ability to manufacture and sell our conventional reagent products, including the costs and timing of further expansion of our sales and marketing efforts;
•the impact of the COVID-19 pandemic on the global economy, our business and our development timeline for MosaiQ;
•our ability to recoup the remaining approximately $21.4 million of funds invested in two funds that have suspended redemptions;
•our ability to collect our accounts receivable;
•our ability to generate cash from operations;
•any acquisition of businesses or technologies that we may undertake; and
•our ability to penetrate our existing market and new markets.
We expect to fund our operations in the near-term, including the ongoing development of MosaiQ through successful field trial completion, achievement of required regulatory authorizations and commercialization from a combination of funding sources. These expected funding sources include the use of existing available cash and short-term investment balances, the sale of rights and other assets, and the issuance of new equity or debt.
Critical Accounting Policies and Significant Judgments and Estimates
We have prepared our condensed consolidated financial statements in accordance with U.S. GAAP. Our preparation of these condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, expenses and related disclosures at the date of the consolidated financial statements, as well as revenue and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.
For a detailed discussion of our critical accounting policies, see Note 1, "Organization and Summary of Significant Accounting Policies." to our Annual Report on Form 10-K for the year ended March 31, 2022. For a detailed description of our significant judgements and estimates, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended March 31, 2022.
Recent Accounting Pronouncements
We did not adopt any other new accounting pronouncements during the three month period ended June 30, 2022 that had a significant effect on our condensed consolidated financial statements included in this Quarterly Report.
Item 3. Reserved