Financial Results for Q1 of Fiscal Year 2025
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LONDON and NEW YORK, 20 November, 2024 - Renalytix plc (LSE: RENX) (OTCQB: RNLXY), an artificial intelligence-enabled in vitro diagnostics company, focused on optimizing clinical management of kidney disease to drive improved patient outcomes and advance value-based care, reports its financial results for the fiscal quarter of 2025 ended September 30, 2024.
First Quarter Fiscal 2025 and recent highlights
| • | Continued test ordering momentum at a large New York-based physician group practice, after test ordering and processing commenced in September 2024 |
| • | Cash burn to be reduced to an approximate run rate of £560,000 (approximately $725,000) or less per month by the end of fiscal year 2025 |
| • | Financing comprising £11.8m (approximately US$14.9 million after expenses) in commitments completed subsequent to the end of the quarter |
| • | Company believes that as of November 2024, it now has sufficient cash on the balance sheet to fund current operations |
| • | Issued first guidance on multi-year revenue generation: c. $3.2m in FY25, $8.5m in FY26 and $17.5m in FY27 |
| • | Accomplished life sciences industry veteran Julian Baines MBE appointed as Executive Chairman |
James McCullough, CEO of Renalytix commented: "We are pleased to have positioned Renalytix financially and commercially for what we believe will be an exciting fiscal year that represents a breakout from our development phase into a commercially focused business leveraging growth within the large and unaddressed market we serve. Following our fundraise, for which we appreciate our investors' support, we believe the wind is now behind our back and we are excited to propel the Company's growth while supporting better patient outcomes through adoption of our kidneyintelX.dkd test by physicians and hospital systems."
First Quarter 2025 Financial Results
During the three months ended September 30, 2024, the Company recognized $0.52 million of revenue, compared to $0.46 million for the three months ended September 30, 2023. Cost of revenue for the three months ended September 30, 2024 and 2023, was $0.42 million and $0.50 million, respectively.
Total operating expenses for the three months ended September 30, 2024 were $4.2 million, and down over 50% from $8.8 million during the prior year period.
Within operating expenses, research and development expenses were $0.9 million for the three months ended September 30, 2024, decreasing by $1.9 million from $2.8 million for the three months ended September 30, 2023. The decrease was attributable to a decrease in external R&D projects and studies, lower compensation and related benefits and a reduction in operating expenses.
General and administrative expenses were $3.3 million for the three months ended September 30, 2024, decreasing by $2.8 million from $6.1 million for the prior year period with the decrease driven by significant cost cutting measures.
Net loss was $4.7 million for the three months ended September 30, 2024, down over 50% from a net loss of $10.1 million for the prior year period.
Cash and cash equivalents totaled $0.9 million as of September 30, 2024.
Equity financing rounds, restructuring of liabilities and reduction in expenses allow sufficient cash for at least next twelve months
During October and November 2024 the Company secured additional rounds of equity financing comprising £11.8m (approximately US$14.9 million) in commitments and concurrently restructured a number of liabilities on the balance sheet. This additional equity funding, the reduction of cash expenses related to the Company's liabilities, and an overall reduction in General and Administrative Expenses have significantly changed the Company's financial position relative to cash needs. As a result, the Company believes that as of November 2024, it now has sufficient cash on the Balance Sheet to fund current operations. While the possibility exists that the Company may seek additional capital, it is not required to sustain current operations for the next twelve months.
RENALYTIX PLC
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
For the Three Months Ended September 30,
| (in thousands, except share and per share data) | 2024 | 2023 | ||||
|---|---|---|---|---|---|---|
| Revenue | $ | 522 | $ | 459 | ||
| Cost of revenue | 422 | 502 | ||||
| Gross profit (loss) | 100 | (43 | ) | |||
| Operating expenses: | ||||||
| Research and development | 921 | 2,787 | ||||
| General and administrative | 3,271 | 6,059 | ||||
| Total operating expenses | 4,192 | 8,846 | ||||
| Loss from operations | (4,093 | ) | (8,889 | ) | ||
| Foreign currency gain, net | 37 | 289 | ||||
| Fair value adjustment to VericiDx investment | 97 | (447 | ) | |||
| Fair value adjustment to convertible notes | (762 | ) | (1,207 | ) | ||
| Other (expense) income, net | (5 | ) | 100 | |||
| Net loss before income taxes | (4,726 | ) | (10,154 | ) | ||
| Income tax expense | (2 | ) | - | |||
| Net loss | (4,728 | ) | (10,154 | ) | ||
| Net loss per ordinary share-basic | $ | (0.04 | ) | $ | (0.11 | ) |
| Net loss per ordinary share-diluted | $ | (0.04 | ) | $ | (0.11 | ) |
| Weighted average ordinary shares-basic | 105,697,401 | 94,767,841 | ||||
| Weighted average ordinary shares-diluted | 105,697,401 | 94,767,841 | ||||
| Other comprehensive income (loss): | ||||||
| Changes in the fair value of the convertible notes | (125 | ) | 75 | |||
| Foreign exchange translation adjustment | (461 | ) | 42 | |||
| Comprehensive loss | $ | (5,314 | ) | $ | (10,037 | ) |
| RENALYTIX PLC | ||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||
| (in thousands, except share and per share data) | September 30, 2024 | June 30, 2024 | ||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 909 | $ | 4,680 | ||
| Accounts receivable, net | 902 | 722 | ||||
| Prepaid expenses and other current assets | 1,068 | 716 | ||||
| Total current assets | 2,879 | 6,118 | ||||
| Property and equipment, net | 202 | 216 | ||||
| Investment in VericiDx | 776 | 698 | ||||
| Other assets, net | 937 | 940 | ||||
| Total assets | $ | 4,794 | $ | 7,972 | ||
| Liabilities and Shareholders' Deficit | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 3,188 | $ | 1,590 | ||
| Accounts payable - related party | 2,408 | 1,018 | ||||
| Accrued expenses and other current liabilities | 2,162 | 3,354 | ||||
| Accrued expenses - related party | 102 | 1,329 | ||||
| Current lease liability | 11 | 45 | ||||
| Convertible notes-current | 4,142 | 4,159 | ||||
| Total current liabilities | 12,013 | 11,495 | ||||
| Convertible notes-noncurrent | 4,100 | 4,331 | ||||
| Total liabilities | 16,113 | 15,826 | ||||
| Commitments and contingencies | ||||||
| Shareholders' deficit: | ||||||
| Ordinary shares, £0.0025 par value per share: 173,841,695 shares authorized; 165,925,513 and 154,368,191 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively | 515 | 478 | ||||
| Additional paid-in capital | 206,705 | 204,893 | ||||
| Accumulated other comprehensive loss | (2,029 | ) | (1,443 | ) | ||
| Accumulated deficit | (216,510 | ) | (211,782 | ) | ||
| Total shareholders' deficit | (11,319 | ) | (7,854 | ) | ||
| Total liabilities and shareholders' deficit | $ | 4,794 | $ | 7,972 | ||
| RENALYTIX PLC | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||
| For the Three Months Ended September 30, | ||||||
| (in thousands) | 2024 | 2023 | ||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (4,728 | ) | $ | (10,154 | ) |
Adjustments to reconcile net loss to net cash used in operating activities:
| (in thousands, except share and per share data) | 2024 | 2023 | ||||
|---|---|---|---|---|---|---|
| Depreciation and amortization | 60 | 127 | ||||
| Stock-based compensation | 254 | 523 | ||||
| Fair value adjustment to VericiDx investment | (97 | ) | 447 | |||
| Realized loss on sale of ordinary shares in VericiDx | 42 | - | ||||
| Realized foreign exchange gain | (18 | ) | - | |||
| Fair value adjustment to convertible debt, net interest paid | 762 | 945 | ||||
| Non cash lease expense | - | 28 | ||||
| Provision for credit losses | (25 | ) | - | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (154 | ) | (238 | ) | ||
| Prepaid expenses and other current assets | (327 | ) | (153 | ) | ||
| Accounts payable | 1,550 | 250 | ||||
| Accounts payable - related party | 1,390 | 202 | ||||
| Accrued expenses and other current liabilities | (1,312 | ) | (2,060 | ) | ||
| Accrued expenses - related party | (1,233 | ) | 579 | |||
| Net cash used in operating activities | (3,836 | ) | (9,504 | ) | ||
| Cash flows from investing activities: | ||||||
| Sale of ordinary shares in VericiDx investment | 23 | - | ||||
| Net cash provided by investing activities | 23 | - | ||||
| Cash flows from financing activities: | ||||||
| Payment of convertible notes principal | - | (1,060 | ) | |||
| Payment of offering costs | - | (5 | ) | |||
| Net cash used by financing activities | - | (1,065 | ) | |||
| Effect of exchange rate changes on cash | 42 | (222 | ) | |||
| Net decrease in cash and cash equivalents | (3,771 | ) | (10,791 | ) | ||
| Cash and cash equivalents, beginning of period | 4,680 | 24,682 | ||||
| Cash and cash equivalents, end of period | $ | 909 | $ | 13,891 | ||
| Supplemental noncash investing and financing activities: | ||||||
| Noncash lease liabilities arising from obtaining right-of-use assets | $ | - | $ | 4 | ||
| Cash paid for interest on convertible debt | $ | - | $ | 249 | ||
| Issuance of shares for debt repayment | $ | (1,588 | ) | $ | (1,054 | ) |
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