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Business Segment Information
 3 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Business Segment Information

Note 10. 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 Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company identified one operating segment in fiscal 2026, named the R&D segment, which did not impact prior periods. During fiscal 2026, the Company's operating segment was as follows:

Research & Development

The R&D segment 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.

 

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 Condensed Consolidated Statements of Operations and Comprehensive Loss as compared to budget. The measure of segment assets is reported in the Condensed Consolidated Balance Sheets as Total Consolidated Assets.

 

In addition to the significant expense categories included within Consolidated Net Loss presented in the Company’s Condensed Consolidated Statements of Operations and Other Comprehensive Loss, see below for disaggregated expense amounts for the three months ended June 30, 2025 and 2024 (in thousands):

 

 

Three Months Ended

 

 

Three Months Ended

 

 

June 30, 2025

 

 

June 30, 2024

 

Revenue

 

 

 

 

 

    Royalty revenue

$

37

 

 

$

25

 

    Product revenue

 

—

 

 

 

14

 

Total revenue

 

37

 

 

 

39

 

Operating expenses

 

 

 

 

 

     Cost of revenues

 

—

 

 

 

2

 

     Research and development expenses (a)(b)

 

932

 

 

 

1,318

 

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

 

1,881

 

 

 

1,879

 

     Non-cash stock-based compensation (see Note 4)

 

78

 

 

 

156

 

     Depreciation and amortization

 

61

 

 

 

70

 

Total operating expense

$

2,952

 

 

$

3,425

 

Consolidated operating loss

$

(2,915

)

 

$

(3,386

)

 

(a) Stock-based compensation expense of $13,000 and $26,000 related to research and development and $65,000 and $130,000, related to selling, general, and administration have been excluded for the three months ended June 30, 2025 and 2024, respectively.

(b) Depreciation and amortization expense of $56,000 and $58,000 related to research and development as well as $5,000 and $12,000 related to selling, general, and administration have been excluded for the three months ended June 30, 2025 and 2024, respectively.