Description of Business and Basis of Presentation	6 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]
Description of Business and Basis of Presentation	Note 1. Description of Business and Basis of Presentation Description of Business The principal activity of Quotient Limited (the "Company") and its subsidiaries (the "Group") is the development, manufacture and sale of products for the global transfusion diagnostics market. Products manufactured by the Group are sold to hospitals, blood banking operations and other diagnostics companies worldwide. Through our subsidiary Alba Bioscience Limited ("Alba"), we manufacture, distribute and sell conventional reagent products used primarily to identify blood group antigens and antibodies in donor and patient blood and to perform daily quality assurance testing for third-party blood grouping instrument platforms. For several years we have invested heavily in an innovative blood testing technology that we call MosaiQ. Since our initial public offering, our focus has been on developing our proprietary MosaiQ technology for use in blood grouping and donor disease screening, which is commonly referred to as transfusion diagnostics. More recently, we have explored MosaiQ's potential for use beyond transfusion diagnostics in the larger clinical diagnostics market. Specifically, as discussed in our periodic reports filed with the SEC, we recently have expanded our focus to include potential applications for MosaiQ in the autoimmune and allergy clinical diagnostics markets. Our Alba business is profitable. To date, our MosaiQ business has incurred substantial losses and we expect it will continue to incur losses unless and until it successfully commercializes one or more products. Updates on Liquidity, Financial Condition and Company Strategy Recent developments have called into question our ability to execute successfully on this business strategy and indeed raises substantial doubt on our ability to continue as a going concern. While we have made substantial progress toward the commercialization of our MosaiQ-based transfusion diagnostics products, that progress has been expensive and has required us to continuously raise capital. Since earlier this year we have pursued various potential methods of raising the funds that we require to complete the commercialization of our products. Adverse conditions in the U.S. and global capital markets made our pursuit of capital very difficult. To date, we have been unable to raise additional capital in the amounts we require. We are now close to running out of cash and close to being forced to cease operations and liquidate our MosaiQ business. As of September 30, 2022, we had approximately $41.4 million of cash, cash equivalents and investments, compared with approximately $63.2 million of cash, cash equivalents and investments as of June 30, 2022. Our investments include approximately $16.9 million of cash invested in two funds that have suspended redemptions, and there can be no assurance that we will receive future distributions of cash from these funds. Because of our liquidity constraints, we have not made the interest payment on our Senior Secured Notes that was due on October 17, 2022, in the amount of $4.0 million. Under the indenture governing our Senior Secured Notes, it is an "Event of Default" if our failure to make the interest payment continues for 30 days (in other words, if the payment has not been made by the close of business on November 16, 2022). We have continued to hold discussions with various parties, including certain of our noteholders, about alternative means of obtaining access to the funding that we now urgently need. In these discussions, to date: • The noteholders have agreed to amend the Senior Secured Notes indenture to eliminate our obligation to make a cash interest payment otherwise due on October 17, 2022, and to require us instead to make that interest payment by issuing new debt securities to the noteholders. Because of this amendment, our failure to make the October 17, 2022 interest payment when due will no longer be a default • Certain of the holders of our Senior Secured Notes have committed to provide bridge funding in the form of indebtedness in the amount of $3.7 million, when our available cash on hand declines below $7.0 million. The noteholders' obligations to fund the loan will be, subject to certain documentary conditions and deliverables We continue to have constructive discussions with our noteholders regarding a restructuring of our outstanding indebtedness as well as additional funding, although noteholders are not presently contractually committed to provide or negotiate this funding and there is no assurance they will do so. We understand that the noteholders' willingness to continue to pursue the potential funding arrangements summarized above is premised on a change in our business strategy in which we would suspend our activities focused on the commercialization of our transfusion diagnostics products and would instead focus in the near term exclusively on development and commercialization of MosaiQ products for the autoimmune and allergy clinical diagnostics markets. This change in strategy would involve our implementation of significant cost reductions, including reductions in employee headcount. There is no assurance that our negotiations with the noteholders or with other parties will result in definitive agreements or in our receipt of funding. If we are unable to reach definitive agreements and consummate a funding in the next few weeks, we may be required to shut down and liquidate our MosaiQ business or, possibly, to seek protection under applicable bankruptcy or insolvency laws. In either case, we expect that a restructuring of our balance sheet, the procurement of additional funding, or a bankruptcy proceeding, would likely result in the extinguishment, through cancellation for no consideration or through dilution, of all of our outstanding equity interests, including any outstanding options or warrants. To the extent we liquidate our MosaiQ business and/or commence an insolvency or bankruptcy proceeding, we expect we would seek to continue operating our Alba business but we would have no realistic prospect of repaying all our existing liabilities in full. Basis of Presentation The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and are unaudited. In accordance with those rules and regulations, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements. In November 2022, Quotient implemented a reverse stock split of its shares of common stock in a ratio of 1-for-40. The number of shares, loss per share amounts, repurchase price per share amounts, and Common stock and Additional paid-in capital balances have been retroactively adjusted for all periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split as if it occurred at the beginning of the first period presented. See Note 6 – Ordinary and Preference Shares for additional information. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, changes in shareholders’ equity and cash flows for the interim periods presented. The March 31, 2022 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the audited consolidated financial statements at and for the year ended March 31, 2022 included in the Company’s Annual Report on Form 10-K for the year then ended. The results of operations for the three and six month period ended September 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending March 31, 2023 and any future period. The Company has incurred net losses and negative cash flows from operations in each year since it commenced operations in 2007 and had an accumulated deficit of $809.8 million as of September 30, 2022. At September 30, 2022, the Company had available cash, cash equivalents, and investments of $41.4 million. Our investments include approximately $16.9 million of cash invested in two funds that have suspended redemptions. As discussed above, under "Updates on Liquidity, Financial Condition and Company Strategy," there is substantial doubt about our ability to continue as a going concern. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. As of the date of issuance of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to further update estimates, judgments or revise the carrying value of any assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.

The principal activity of Quotient Limited (the "Company") and its subsidiaries (the "Group") is the development, manufacture and sale of products for the global transfusion diagnostics market. Products manufactured by the Group are sold to hospitals, blood banking operations and other diagnostics companies worldwide. Through our subsidiary Alba Bioscience Limited ("Alba"), we manufacture, distribute and sell conventional reagent products used primarily to identify blood group antigens and antibodies in donor and patient blood and to perform daily quality assurance testing for third-party blood grouping instrument platforms. For several years we have invested heavily in an innovative blood testing technology that we call MosaiQ. Since our initial public offering, our focus has been on developing our proprietary MosaiQ technology for use in blood grouping and donor disease screening, which is commonly referred to as transfusion diagnostics. More recently, we have explored MosaiQ's potential for use beyond transfusion diagnostics in the larger clinical diagnostics market. Specifically, as discussed in our periodic reports filed with the SEC, we recently have expanded our focus to include potential applications for MosaiQ in the autoimmune and allergy clinical diagnostics markets. Our Alba business is profitable. To date, our MosaiQ business has incurred substantial losses and we expect it will continue to incur losses unless and until it successfully commercializes one or more products.

Recent developments have called into question our ability to execute successfully on this business strategy and indeed raises substantial doubt on our ability to continue as a going concern.

While we have made substantial progress toward the commercialization of our MosaiQ-based transfusion diagnostics products, that progress has been expensive and has required us to continuously raise capital. Since earlier this year we have pursued various potential methods of raising the funds that we require to complete the commercialization of our products. Adverse conditions in the U.S. and global capital markets made our pursuit of capital very difficult. To date, we have been unable to raise additional capital in the amounts we require. We are now close to running out of cash and close to being forced to cease operations and liquidate our MosaiQ business. As of September 30, 2022, we had approximately $41.4 million of cash, cash equivalents and investments, compared with approximately $63.2 million of cash, cash equivalents and investments as of June 30, 2022. Our investments include approximately $16.9 million of cash invested in two funds that have suspended redemptions, and there can be no assurance that we will receive future distributions of cash from these funds.

Because of our liquidity constraints, we have not made the interest payment on our Senior Secured Notes that was due on October 17, 2022, in the amount of $4.0 million. Under the indenture governing our Senior Secured Notes, it is an "Event of Default" if our failure to make the interest payment continues for 30 days (in other words, if the payment has not been made by the close of business on November 16, 2022).

We have continued to hold discussions with various parties, including certain of our noteholders, about alternative means of obtaining access to the funding that we now urgently need. In these discussions, to date:

•

The noteholders have agreed to amend the Senior Secured Notes indenture to eliminate our obligation to make a cash interest payment otherwise due on October 17, 2022, and to require us instead to make that interest payment by issuing new debt securities to the noteholders. Because of this amendment, our failure to make the October 17, 2022 interest payment when due will no longer be a default

•

Certain of the holders of our Senior Secured Notes have committed to provide bridge funding in the form of indebtedness in the amount of $3.7 million, when our available cash on hand declines below $7.0 million. The noteholders' obligations to fund the loan will be, subject to certain documentary conditions and deliverables

We continue to have constructive discussions with our noteholders regarding a restructuring of our outstanding indebtedness as well as additional funding, although noteholders are not presently contractually committed to provide or negotiate this funding and there is no assurance they will do so.

We understand that the noteholders' willingness to continue to pursue the potential funding arrangements summarized above is premised on a change in our business strategy in which we would suspend our activities focused on the commercialization of our transfusion diagnostics products and would instead focus in the near term exclusively on development and commercialization of

MosaiQ products for the autoimmune and allergy clinical diagnostics markets. This change in strategy would involve our implementation of significant cost reductions, including reductions in employee headcount.

There is no assurance that our negotiations with the noteholders or with other parties will result in definitive agreements or in our receipt of funding. If we are unable to reach definitive agreements and consummate a funding in the next few weeks, we may be required to shut down and liquidate our MosaiQ business or, possibly, to seek protection under applicable bankruptcy or insolvency laws. In either case, we expect that a restructuring of our balance sheet, the procurement of additional funding, or a bankruptcy proceeding, would likely result in the extinguishment, through cancellation for no consideration or through dilution, of all of our outstanding equity interests, including any outstanding options or warrants. To the extent we liquidate our MosaiQ business and/or commence an insolvency or bankruptcy proceeding, we expect we would seek to continue operating our Alba business but we would have no realistic prospect of repaying all our existing liabilities in full.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and are unaudited. In accordance with those rules and regulations, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements.

In November 2022, Quotient implemented a reverse stock split of its shares of common stock in a ratio of 1-for-40. The number of shares, loss per share amounts, repurchase price per share amounts, and Common stock and Additional paid-in capital balances have been retroactively adjusted for all periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split as if it occurred at the beginning of the first period presented. See Note 6 – Ordinary and Preference Shares for additional information.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, changes in shareholders’ equity and cash flows for the interim periods presented. The March 31, 2022 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the audited consolidated financial statements at and for the year ended March 31, 2022 included in the Company’s Annual Report on Form 10-K for the year then ended. The results of operations for the three and six month period ended September 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending March 31, 2023 and any future period.

The Company has incurred net losses and negative cash flows from operations in each year since it commenced operations in 2007 and had an accumulated deficit of $809.8 million as of September 30, 2022. At September 30, 2022, the Company had available cash, cash equivalents, and investments of $41.4 million. Our investments include approximately $16.9 million of cash invested in two funds that have suspended redemptions.

As discussed above, under "Updates on Liquidity, Financial Condition and Company Strategy," there is substantial doubt about our ability to continue as a going concern.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes.

As of the date of issuance of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to further update estimates, judgments or revise the carrying value of any assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.