XML 45 R24.htm IDEA: XBRL DOCUMENT v3.25.1
Business Segment Information
 12 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Business Segment Information

Note 15. Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company identified two operating segments in fiscal 2024, which did not impact prior periods, and during fiscal 2025 had a change in the operating segments from two to one operating segment. During fiscal 2024, the Company's operating segments were as follows:

Research & Development

The R&D segment consisted of the Company's drug development efforts. The Company's clinical focus was in advancing FXR314 in IBD, including ulcerative colitis and Crohn’s disease. In March 2025, the Company sold its FXR program. The Company now focuses on providing testing of drugs and drug candidates in 3D human tissue models of liver and intestine, offering partners liver and intestinal toxicology insights using its NAM models. The Company plans to work with pharmaceutical and biotech companies at all stages of drug development to reduce the significant risk and cost of bringing therapeutics to market through the regulatory process and offer bespoke services in the areas of investigational toxicology, mechanism of drug action elucidation, and other applications of these complex human tissue models.

Mosaic Cell Sciences

The Mosaic segment, which began operations in February 2024, consisted of the Company's Mosaic Cell Sciences division, which served as a key source of certain of the primary human cells that the Company utilized in its research and development efforts. Mosaic provided the Company with qualified human cells for use in its clinical research and development programs. In addition to supplying the Company with primary human cells, Mosaic offered human cells for sale to life science customers, both directly and through distribution partners, which the Company expected to offset costs and over time become a profit center that offset overall R&D spending by the Company. However, the Company ended Mosaic's operations in the third quarter of fiscal 2025.

Change to Reportable Segments

 

The Company had a change in reportable segments in the fourth quarter of fiscal 2025, due to Mosaic ending its operations during the third quarter of fiscal 2025. As a result, there was an update to the financial information that is evaluated on a regular basis by the CODM for purposes of allocating resources and assessing performance, where the chief operating decision maker now regularly reviews the entity-wide operating results and performance. As a result, the Company's single operating segment constitutes all of the consolidated entity. The change in reportable segments does not affect prior period segment reporting.

 

The Company analyzed whether the closing of the Mosaic business segment qualified for reporting as a discontinued operation under ASC Topic 205. The Company's main operations are its R&D activities. Mosaic was initially formed to generate primary human cells for use by R&D rather than purchasing from third parties, while also selling excess inventory commercially to external customers, as a way to offset costs. However, the Company did not achieve significant revenues from Mosaic as initially expected. Therefore, Mosaic's remaining saleable inventory was internally transferred to R&D and Mosaic ended its commercial operations. The Company concluded that the closing of the Mosaic business segment does not qualify for reporting as a discontinued operation because the

closing of the segment does not represent a strategic shift that will have a major effect on the Company's operations and financial results.

 

For purposes of evaluating performance and allocating resources, the Company’s CODM, its Executive Chairman, regularly reviews Consolidated Net Loss as reported in the Company’s Consolidated Statements of Operations and Comprehensive Loss as compared to budget. The measure of segment assets is reported in the Consolidated Balance Sheets as Total Consolidated Assets.

 

In addition to the significant expense categories included within Consolidated Net Loss presented in the Company’s Consolidated Statements of Operations and Other Comprehensive Loss, see below for disaggregated expense amounts for the years ended March 31, 2025 and 2024 (in thousands):

 

 

Year Ended

 

 

Year Ended

 

 

March 31, 2025

 

 

March 31, 2024

 

Revenue

 

 

 

 

 

    Royalty revenue

$

119

 

 

$

109

 

    Product revenue

 

25

 

 

 

—

 

Total revenue

 

144

 

 

 

109

 

Operating expenses

 

 

 

 

 

    Cost of revenues

 

5

 

 

 

—

 

    Research and development (a) (b)

 

4,712

 

 

 

5,133

 

    Selling, general, and administrative expenses (a)(b)

 

7,245

 

 

 

8,274

 

    Non-cash stock-based compensation (see Note 7)

 

532

 

 

 

1,508

 

    Depreciation and amortization (see Note 4)

 

266

 

 

 

280

 

Total operating expenses

$

12,760

 

 

$

15,195

 

Consolidated operating loss

$

(12,616

)

 

$

(15,086

)

 

(a) Stock-based compensation expense of $86,000 and $138,000 related to research and development and $446,000 and $1,370,000, related to selling, general, and administration have been excluded for the years ended March 31, 2025 and 2024, respectively.

(b) Depreciation and amortization expense of $227,000 related to research and development for each of the years ended March 31, 2025 and 2024. Depreciation and amortization expense of $39,000 and $53,000 related to selling, general, and administration have been excluded for the years ended March 31, 2025 and 2024, respectively.