Renalytix plc (NASDAQ: RNLX), (LSE: RENX) 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, announces its
full year results for the twelve months ended 30 June 2022.
Highlights (includes post-period
events):
Regulatory &
Reimbursement
- New commercial coverage in fiscal
year 2022; 28 private insurance and network provider contracts now
executed to date including:
- Largest private payer in Illinois
with 8.1 million members
- Largest independent provider
network in the tristate North Carolina, South Carolina and Virginia
area, with over 100,000 health care providers in-network
- Achieved Medicare payment for
KidneyIntelX through the individual claims review (ICR) process
based on our Medicare clinical lab fee schedule (CLFS) pricing of
$950 per test
- 33 state Medicaid programs
contracted to date
- Continued data generation and
analysis reinforcing the benefits of KidneyIntelX as part of
collaborative De Novo process with the FDA, with anticipation that
the agency's review is nearing completion. Data supports
significant breakthrough in risk stratification for patients with
diabetic kidney disease
Commercial &
Partnerships
- Sales and medical affairs support
buildout across core, strategically-focused market channels:
- Deployed sales directors and
representatives targeting large hospital systems, provider networks
and independent primary care physicians, and veterans’
hospitals
- Added VP of Medical Affairs to
support KidneyIntelX physician onboarding, education, and test
ordering
- Deployed market access and health
systems partnership personnel to drive expansion
- Developed comprehensive physician
and patient marketing and education material
- Launch of myIntelX provider access
portal for simplified, decentralized on-line ordering of
KidneyIntelX
- Partnered with Singing River Health
System to deploy KidneyIntelX informed care management to improve
kidney health in individuals across the Mississippi Gulf Coast with
type 2 diabetes and early-stage chronic kidney disease
- Partnered with St. Joseph's Health,
based in Syracuse, NY and part of the Trinity Health System, for
KidneyIntelX deployment and to advance value-based care
- Progressed through layers of vendor
approval at several VA hospitals as part of nationwide 10-year
payment contract from the U.S. General Services Administration
(GSA), with initial test orders and pre-payments received
- Joint program with American
Diabetes Association® to improve overall kidney health in patients
with type 2 diabetes in the United States
- Kidney disease education programs
in partnership with the National Kidney Foundation
- Continued KidneyIntelX testing
volume growth
- Growth in number of active
physicians ordering KidneyIntelX
Clinical & Validation
- Published data in the American
Journal of Nephrology in which KidneyIntelX successfully monitored
patient response to new drug therapy in 1,325 multinational
clinical trial cohort patients
- KidneyIntelX showed ability to
assess risk of heart failure hospitalization and death in large
international diabetic kidney disease patient cohort (published in
Kidney360)
- Peer-reviewed publication in
Journal of Medical Economics supporting payer coverage for
early-stage risk assessment and care management in the primary care
office; projecting significant five-year savings from KidneyIntelX
testing at primary care level
- Data results published in American
Journal of Managed Care supporting adoption and clinical utility of
KidneyIntelX; 98% of 401 primary care physicians surveyed confirmed
KidneyIntelX has value as a risk decision tool
- Multiple data presentations at the
American Diabetes Association (ADA) 82nd Scientific Sessions®
meeting, including one showing KidneyIntelX testing in 1,112 adult
diabetic kidney disease (DKD) patients at Mount Sinai Health System
showed utility in driving guideline appropriate use of therapies,
including SGLT-2 inhibitors and RAAS inhibitor use, and timely
consultation to specialists in high-risk patients
- World Congress of Nephrology data
showing KidneyIntelX predicted the future rate of decline in kidney
function compared with current standard diagnostics in patients
with early-stage chronic kidney disease and type 2 diabetes
- Ongoing clinical studies at Wake
Forest / Atrium Health and Mount Sinai Health System substantiating
clinical utility of KidneyIntelX
Finance & Operations
- Commercial development progress
with annual revenue growth
- Completion of $30.0 million equity
and convertible note financing package ($26.8 million gross
proceeds)
- Cost rationalization enacted at end
of period reducing annualized spend by over $12 million with review
of other cost-savings opportunities ongoing
- Salt Lake and New York laboratories
operating to most rigorous audited standards; CLIA, CAP, ISO, and
U.S. Food and Drug Administration audit compliant
- The Group had cash on hand of
$41.3m (FY21: $65.2m).
Current Quarter
- Operational progress continued into
the first quarter of fiscal 2023 with over a record 1,200 tests
performed
- More than 80% of these were
billable, yielding approximately $1.0 million revenue for the
quarter
Investors are advised to read the results for
the 12 months ended 30 June 2022, which have been filed with the
U.S. Securities and Exchange Commission under Form 20-F
concurrently with this results announcement.
Analyst Conference CallThe
Company will hold an analyst conference call at 8:30 a.m. (ET) /
1:30 p.m. (BST) on Monday 31 October 2022. James McCullough, CEO
and O. James Sterling, CFO will discuss the financial results and
key topics including business strategy, partnerships and regulatory
and reimbursement processes.
Conference Call Details:To
participate in the live conference call via telephone, please
register here. Upon registering, a dial-in number and unique
PIN will be provided in order for interested parties to join the
conference call.
Webcast Registration
link: https://edge.media-server.com/mmc/p/y9qtsbmx
For further information, please
contact:
|
Renalytix plc |
www.renalytix.com |
|
James McCullough, CEO |
Via Walbrook PR |
|
|
|
|
Stifel (Nominated Adviser, Joint Broker) |
Tel: 020 7710 7600 |
|
Alex Price / Nicholas Moore |
|
|
|
|
|
Investec Bank plc (Joint Broker) |
Tel: 020 7597 4000 |
|
Gary Clarence / Daniel Adams |
|
|
|
|
|
Walbrook PR Limited |
Tel: 020 7933 8780
or renalytix@walbrookpr.com |
|
Paul McManus / Lianne Applegarth |
Mob: 07980 541 893 / 07584 391 303 |
|
|
|
|
CapComm Partners |
Tel: 415-389-6400 or investors@renalytix.com |
| Peter DeNardo |
|
About KidneyIntelX
KidneyIntelX, is a first-of-kind solution that enables early-stage
DKD progression risk assessment by combining diverse data inputs,
including validated blood-based biomarkers, inherited genetics, and
personalized patient data from electronic health record, or EHR,
systems, and employs a proprietary algorithm to generate a unique
patient risk score. This patient risk score enables prediction of
progressive kidney function decline in CKD, allowing physicians and
healthcare systems to optimize the allocation of treatments and
clinical resources to patients at highest risk.
About RenalytixRenalytix (LSE:
RENX) (NASDAQ: RNLX) is the global founder and leader in the new
field of bioprognosis™ for kidney health. The company has
engineered a new solution that enables early-stage chronic kidney
disease progression risk assessment. The Company’s lead product,
KidneyIntelX™, has been granted Breakthrough Designation by the
U.S. Food and Drug Administration and is designed to help make
significant improvements in kidney disease prognosis, transplant
management, clinical care, patient stratification for drug clinical
trials, and drug target discovery (visit www.kidneyintelx.com). For
more information, visit www.renalytix.com.
Forward Looking
StatementsStatements contained in this press release
regarding matters that are not historical facts are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Examples of
these forward-looking statements include statements concerning: the
commercial prospects of KidneyIntelX, including whether
KidneyIntelX will be successfully adopted by physicians and
distributed and marketed, the rate of testing with KidneyIntelX in
health care systems, expectations and timing of announcement of
real-world testing evidence, the potential for KidneyIntelX to be
approved for additional indications, our expectations regarding
reimbursement decisions and the ability of KidneyIntelX to curtail
costs of chronic and end-stage kidney disease, optimize care
delivery and improve patient outcomes. Words such as “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “seeks,”
and similar expressions are intended to identify forward-looking
statements. We may not actually achieve the plans and objectives
disclosed in the forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Any
forward-looking statements are based on management's current views
and assumptions and involve risks and uncertainties that could
cause actual results, performance or events to differ materially
from those expressed or implied in such statements. These risks and
uncertainties include, among others: that KidneyIntelX is based on
novel artificial intelligence technologies that are rapidly
evolving and potential acceptance, utility and clinical practice
remains uncertain; we have only recently commercially launched
KidneyIntelX; and risks relating to the impact on our business of
the COVID-19 pandemic or similar public health crises. These and
other risks are described more fully in our filings with the
Securities and Exchange Commission (SEC), including the “Risk
Factors” section of our annual report on Form 20-F filed with the
SEC on October 31, 2022, and other filings we make with the SEC
from time to time. All information in this press release is as of
the date of the release, and we undertake no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future events, or otherwise, except as required by
law.
CHAIRMAN & CEO'S
JOINT STATEMENT
We are pleased to present our annual report for
the twelve months ended 30 June 2022 for Renalytix plc.
Our path to success is focused on five major
items:
-
Achieving “super-majority” insurance coverage in key regional
markets including New York, Illinois and the Carolinas;
-
Continuing to publish on our growing real-world evidence of
KidneyIntelX effectiveness;
-
FDA De Novo marketing authorization for KidneyIntelX;
-
Revenue growth from sequential onboarding of physicians, networks,
and hospitals in new locations; and
-
Continuing to lower net expense to maintain cash availability into
the first half of fiscal 2024
We are making strong progress and expect to meet
or exceed each of these items.
Achieving “super-majority” insurance coverage in
key regional markets including New York, Illinois and the
Carolinas
We expect to cross the threshold of
“super-majority” coverage in different key markets over the next
several months. We consider a super-majority as greater than 70% of
patients with diabetes and kidney disease having insurance coverage
for KidneyIntelX testing in a major population region, such as New
York City or metropolitan Chicago. Establishing Medicare and
Medicaid payment are two crucial pieces as collectively they
provide insurance for an estimated 60-70 percent of the
KidneyIntelX eligible patient population. We recently reported that
we have secured payment for KidneyIntelX testing by Medicare
through claims submitted to National Government Services (NGS), the
Medicare Administrative Contractor covering our New York
laboratory. This is in addition to KidneyIntelX claims now being
paid by Medicare Advantage, Medicaid, Blue Cross Blue Shield and
other commercial insurance providers.
The Blue Cross Blue Shield (BCBS) system,
covering over 114 million members or 1 in 3 Americans, is also core
to our 2023 growth strategy. To date, we are pleased to have
KidneyIntelX coverage declared by BCBS Illinois (8.1 million
members), and Wellmark BCBS (South Dakota and Iowa with two million
members). We have always viewed insurance reimbursement as the most
significant hurdle to KidneyIntelX adoption and consider our
building success in securing Medicare, Medicaid and BCBS payment to
be unusually rapid this early in a company’s commercial diagnostic
lifecycle. Our expected KidneyIntelX contracted pricing remains at
$950, in line with our distinct Medicare CLFS pricing.
Continuing to publish on our growing real-world
evidence of KidneyIntelX effectiveness
Published utility study results showed that
primary care physicians using KidneyIntelX are six times more
likely to prescribe advanced medication to their high-risk patients
in early-stage kidney disease where the opportunity to prevent
significant kidney damage or kidney failure is greatest. In these
studies, the same physician using KidneyIntelX was also three times
more likely to make a timely referral to a specialist and three
times more likely to initiate more aggressive anti-hypertensive
(blood pressure control) strategies.
In other words, these real-world results support
that KidneyIntelX is driving behavior change at primary care for
high-risk patients – the key to altering the tide on kidney disease
progression and reducing dialysis. We expect additional results
from our multi-year real-world evidence programs will be in print
during the 2nd quarter of fiscal 2023.
FDA De Novo marketing authorization for
KidneyIntelX
We continue to work closely and constructively
with the FDA on our De Novo Breakthrough Device authorization
submission. Notably, we have provided additional comprehensive data
which further confirms the performance of KidneyIntelX in risk
discrimination for patients with diabetic kidney disease. We now
believe we are approaching the completion of the De Novo regulatory
process and while there is no guarantee of success until FDA has
made its final determination, we are optimistic based on both the
quality of analytic and clinical evidence provided and the high
level of engagement we have had with the FDA. Our current
expectations are for a decision to be made in calendar Q1 2023 but
there can be no guarantee on this timescale.
Revenue growth from sequential onboarding of
physicians and hospitals in new locations
We expect revenue test volume will continue to
increase through the balance of fiscal year 2023 with increased
contribution from different market channels. At Mount Sinai Health
System alone, we have now generated nearly 5,000 KidneyIntelX
patient results including 835 in the quarter ended June 2022 (Q4 of
FY22), and another 974 in the most recent post-period quarter ended
September 2022 (Q1 of FY23).
We issued over 1,200 patient KidneyIntelX test
reports in the first quarter of fiscal 2023 (ended September 30),
which is double the testing rate from a year earlier. With expanded
insurance coverage, a growing number of these tests are now
billable and revenue recognizable within 30 days.
Continuing to lower net expense
We have continued to reduce Company overhead
with a keen eye toward advancing our best commercial opportunities
– primarily regions with super-majority insurance coverage in the
short term. As stated in August, we have taken action to lower
annual expenditures by over $12 million through program, vendor and
employee reductions, with additional opportunities to reduce
expenditures under review.
In fiscal 2023, the fundamental goals are
clear;
-
building on diversified testing volume
-
securing broad insurance coverage;
-
continued evidence of real-world benefit of KidneyIntelX use in the
clinic; and
-
FDA authorization.
The early-stage kidney health market remains
wide open, and we believe Renalytix is in a position to alter the
cost landscape and maintain better health for some 15 million
Americans with diabetes and kidney disease.
About RenalytixAt Renalytix, we
are introducing more accurate prognosis and effective care
management for the estimated 850 million people worldwide with
chronic kidney disease. In the United States alone, chronic kidney
disease affects about 37 million people and is responsible for one
of the largest cost drivers in the national medical system. Early
identification, prognosis and treatment beginning with primary care
is essential if we are to stem the growing social cost and
suffering associated with kidney disease.
With our lead product, KidneyIntelX, the goal is
to drive the focus from kidney disease treatment to kidney health
management through a more accurate understanding of a patient’s
risk for kidney failure before it happens. KidneyIntelX leads
development in the new field of bioprognosis, a biology driven
approach to risk assessment that integrates information from a
simple blood draw and a patient’s health record to produce an
accurate picture of kidney health. A doctor can use KidneyIntelX
results to act on patients at high risk of kidney disease
progression or failure at an early stage where active management
and therapeutics have the best opportunity to impact outcomes and
cost before it is too late.
KidneyIntelX™Our novel
platform, KidneyIntelX, uses a machine-learning enabled algorithm
to process predictive blood biomarkers with key features from a
patient’s health record to generate an early and accurate kidney
health risk score. The score identifies those patients at the most
risk for kidney disease progression and/or failure and further
guides ongoing clinical decisions.
KidneyIntelX is initially indicated for use with
adults who have diagnosed kidney disease and type 2 diabetes –
diabetic kidney disease or DKD. Future KidneyIntelX products in
development intend to expand the indicated uses to include broader
chronic kidney disease, health equity strategies and kidney health
monitoring through treatment. Diabetes is the leading cause of
chronic kidney disease, representing nearly 40% of its cases, and
DKD patients are the highest contributors to emergency room
dialysis starts. Unfortunately, many DKD patients are unaware that
their kidney disease has been progressing, often uncontrolled, for
many years and now find themselves making difficult decisions about
late-stage treatments.
KidneyIntelX was designed as an expandable
platform able to add indicated uses and a monitoring capability,
all within CLIA and FDA regulated insurance reimbursable
framework.
Operational ProgressIn the year
ended 30 June 2022 (“FY22”) and the immediate post-period, the
Company saw KidneyIntelX expand within the Mount Sinai Health
System and launch at Wake Forest Baptist Health, CDPHP, VA medical
centers and among independent primary care physicians.
A full electronic health record (EHR) integrated
deployment of KidneyIntelX with population health support in the
Mount Sinai Health System has now yielded actionable reports on
nearly 5,000 patients and growing. Utility results from our first
real-world deployment at scale is yielding key evidence of the
benefits of KidneyIntelX, particularly at the all-important primary
care level. Patients and doctors are now clearly seeing benefits in
the short-term from advanced risk assessment and follow-on action
early in the disease cycle. Our experience with our physician-led
health insurance partner, Capital District Physicians’ Health Plan
(CDPHP), in upstate New York has been equally robust.
Implementing with the veterans’ affairs (VA)
medical system has been slower than planned due to the complexities
in introducing a new test and integrating its use into the VA
system. However, we have now begun to overcome implementation
hurdles and are beginning to see an increasing number of orders and
corresponding testing volumes. We remain convinced that
KidneyIntelX will play an important role nationally in the VA
system which serves an estimated one million veterans with diabetes
and kidney disease. Again, insurance coverage remains in place with
a nationwide 10-year government insurance contract for KidneyIntelX
payment throughout the VA system.
Expert experience is reflected in the design of
the KidneyIntelX test report and the newly launched product
website: www.kidneyintelx.com. We believe our education and support
program will be an important resource to help inform and improve
care for early-stage DKD patients and support future hospital
system deployments of KidneyIntelX in the United States and abroad,
which we believe could be achieved more rapidly as a result of the
knowledge we have derived from our hospital system implementations
to date.
FinancingIn July 2019, we
raised gross proceeds of $17.3 million in a follow-on financing on
the AIM market, and in July 2020, we raised an additional $85.1
million in gross proceeds through an offering and concurrent
dual-listing on the Nasdaq Global Market in the U.S.
In March 2022, we announced the completion of a
financing package yielding $26.8 million in gross proceeds for the
Company. The financing included an $8.8 million equity subscription
plus $21.2 million principal amount of convertible bonds (net cash
proceeds of $18 million). We are pleased to have achieved the
financing in an extremely challenging capital market environment,
which we believe illustrates the strength of our kidney disease
testing, monitoring and informed care advantages.
Clinical EvidenceOver the past
few years, we have published and presented validation, utility and
health economics data supporting KidneyIntelX adoption. Of
particular note is the growing body of real-world utility evidence
building on KidneyIntelX clinical reporting in different
institutions through several thousand patients. Examples of
published evidence includes:
|
Initial Forum |
Cohort |
Findings |
Publication |
|
ADA 81st Scientific Sessions 2020 |
Mount Sinai & UPenn(n=1,146) |
KidneyIntelX more accurately predicted progressive kidney function
decline and kidney failure than clinical metrics alone |
Diabetologia 2021;64, 1504–1515 |
|
NKF Spring Clinical Meeting 2020 |
Simulation in patients with DKD stages 1-3b(n=100,000) |
Analyses supported payer coverage for early-stage risk assessment
and care management in the primary care office; projects
significant savings from KidneyIntelX testing at primary care |
Journal of Medical Economics2021;24:972-982 |
|
ADA 82nd Scientific Sessions 2021 |
CANVAS(n=1,325) |
KidneyIntelX algorithm published in Diabetologia and currently
deployed commercially accurately predicted progression of DKD in
this multinational clinical trial cohort |
American Journal of Nephrology 2022;53:21–31 |
|
ISN World Congress of Nephrology 2021 |
CANVAS (n=1,026) |
KidneyIntelX can be effective at monitoring therapeutic response
and improvements in kidney health over time in adults with type 2
diabetes and DKD |
American Journal of Nephrology 2022;53:21–31 |
|
NKF Spring Clinical Meetings 2021 |
PCPs (n=401) |
KidneyIntelX test had greater relative importance than albuminuria
and eGFR to PCPs in making treatment decisions and was second only
to eGFR for nephrologist referrals. |
American Journal of Managed Care 2022;28:In Press |
|
ASN Kidney Week 2021 |
Mount Sinai RWE Cohort |
KidneyIntelX testing enhanced patient understanding about kidney
disease and revealedsubstantial motivation to take appropriate
actions and receive further education for theirkidney health. |
Journal of the American Society of Nephrology32: 2021 |
|
ISN World Congress of Nephrology2022 |
Sinai/Penn (n=1,146) |
KidneyIntelX provided robust prognostic information for future eGFR
trajectories and adverse kidney outcomes beyond prior ascertainment
of baseline kidney function, injury, or historical kidney function
trajectories. |
Kidney International Reports2022; 7, S1–S436 |
|
ADA 83rd Scientific Sessions 2022 |
CANVAS(n=1,325) |
KidneyIntelX provided risk stratification for a triple composite
end point that included not only the kidney-specific outcome of
progression, but also clinically relevant outcomes of
hospitalizations for heart failure and all-cause mortality, even
after adjusting for several other risk factors for these
outcomes. |
Kidney3602022, 3;1599-1602 |
|
ADA 83rd Scientific Sessions 2022 |
Mount Sinai RWE Cohort (n=1,112) |
KidneyIntelX showed utility in driving guideline appropriate use of
therapies, including SGLT-2 inhibitors and RAAS inhibitor use, and
timely consultation to specialists in high-risk patients. |
Pending |
|
ASN Kidney Week 2022 |
Systematic Review and Meta-analysis(n=129 studies) |
Systematic review and meta-analysis to summarize the prognostic
value of preclinical plasma and urine biomarkers for CKD outcomes
(incident CKD, CKD progression, or incident ESKD), including 129
studies in the meta-analysis. Pooled risk ratios (RRs) and 95%
confidence intervals (Cis) among some of the most studied CKD
biomarkers were 2.17 (1.91 to 2.47) for TNFR1 (31 studies); 2.07
(95% CI, 1.82 to 2.34) for TNFR2 (23 studies); 1.51 (95% CI, 1.38
to 1.66) for KIM-1 (18 studies). |
Journal of the American Society of Nephrology 2022,
33:1657-1672 |
|
ADA – American Diabetes Association; NKF – National Kidney
Foundation; ASN – American Society of Nephrology; ISN –
International Society of Nephrology; RWE – Real world evidence; DKD
– diabetic kidney disease |
Intellectual PropertyThe U.S.
Patent and Trademark Office allowed claims extending the use of one
of KidneyIntelX’s primary blood biomarkers, sTNFR1, to all patients
with diabetes to determine an increased risk of developing
progressive kidney disease or kidney failure. We have also
completed rights to additional patent applications for use with
KidneyIntelX. We continue to build out our intellectual property
portfolio and are actively evaluating in-licensing opportunities
that will enhance our competitive product positioning.
Current Trading &
OutlookBuilding KidneyIntelX into a standard of care in
the United States and a global market with 850 million people with
chronic kidney disease requires extensive data production,
regulatory approvals, physician and patient education, and of
course, comprehensive reimbursement. While it sometimes seems this
set of milestones takes a long time to accomplish, we are reminded
that Renalytix is still a young company that received its first
funding less than four years ago. To have achieved real insurance
coverage for KidneyIntelX testing in the complex U.S. market in
such a short time we believe is extraordinary. We believe that
since the data is comprehensive and showing clear benefit,
acceleration of adoption is likely to continue to occur. The social
need could not be higher to establish innovative preventative
medicine strategies such as KidneyIntelX at the front-end of
diabetes and kidney disease.
Operational progress continued into the first
quarter of fiscal 2023 with over 1,200 tests performed. More than
80% of these were billable, yielding about $1.0 million revenue for
the quarter. These are record amounts for us in quarterly testing
volumes and revenue.
We greatly appreciate the patience and continued
support of our shareholders through these unusual times.
Financial Review
The results presented cover FY22. The
presentational currency for Renalytix plc and its subsidiaries
(together, the “Group”) is the United States Dollar.
Income Statement RevenueThe
Group recognized a total of $2.9 million in revenue in the
financial year ended 30 June 2022 (“FY22”) which was comprised of
$2.7m in revenue related to testing services as well as $0.2
million related to pharmaceutical services revenue.
Cost of SalesThe cost of sales associated with
the services performed and commercial testing revenue was $2.1
million for FY22.
Administrative CostsDuring FY22, administrative
expenses totaled $58.3 million (financial year ended 30 June 2021
(“FY21”): $33.3 million). The major items of expenditure were
general and administrative costs of which included $27.6 million in
employee- related costs (FY21: $13.8 million), $12.9 million in
subcontractors, legal, accounting, and other professional fees
(FY21: $9.1 million), $6.4 million in external R&D Services,
lab supplies and lab services(FY21: $1.4 million), $4.6 million in
insurance (FY21: $4.6 million), $2.1 million in depreciation and
amortization (FY21: $2.1 million), $1.9 million in marketing and
public relations (FY21: $0.9 million), $1.7 in IT related costs
(FY21: $0.6 million), $0.5 million in office related expenses
including rent(FY21: $0.3 million), $0.3 million in stock exchange
listing and filing fees (FY21: $0.2 million) and $0.3 million in
other expenses (FY21: $0.3 million.
Gain (loss) on financial assets at fair value
through profit or lossThe Company accounts for the investment in
Verici Dx equity securities at fair value, with changes in fair
value recognized in the income statement. During the year ended 30
June 2022, we recorded a loss of $5.9 million to adjust the Verici
Dx investment to fair value. During the year ended 30 June 2021, we
recorded a gain of $6.5 million to adjust the Verici Dx investment
to fair value.
Fair value adjustment of convertible debtWe
elected to account for the convertible notes at fair value with
qualifying changes in fair value recognized through the statements
of operations until the notes are settled. This excludes fair value
adjustments related to instrument-specific credit risk, which are
recognized in OCI. For the year ended 30 June 2022, we recorded a
gain of $4.0 million to adjust the convertible notes to fair value.
There was no fair value adjustment for the year ended 30 June 2021
as we had not issued convertible debt at that time.
Finance Income (Expense)Finance income (expense)
consists of foreign exchange gains or losses. During the year ended
30 June 2022, we recognized a foreign currency gain of $9.6 million
due to exchange rate fluctuations on transactions denominated in a
currency other than our functional currency. During the year ended
30 June 2021, we recognized foreign currency losses of $8.8
million.
Balance SheetInventoryInventory
consists of consumable materials used by the labs to carry out
KidneyIntelX tests. During FY22, inventory levels increased due to
purchases as the Company prepares for increased KidneyIntelX
testing volumes. Inventory on hand at 30 June 2022 totaled $1.2
million (FY21: $0.4 million).
Fixed AssetsProperty, plant, and equipment
consists of laboratory equipment being used to support testing and
product development activities. At 30 June 2022, the Company held
$1.3 million in net property, plant, and equipment (FY21: $1.1
million).
Intangible AssetsThe Group held $14.0 million
net book value of intangible assets held at 30 June 2022 (FY20:
$18.0 million) includes payments made primarily to Mount Sinai for
license and patent costs for the intellectual property underlying
KidneyIntelX, as well as amounts capitalized as development costs.
Intangible assets also include the value of the biomarker business
purchased (in exchange for ordinary shares in the Company) from
EKF. Intangible assets increased period over period due to
capitalized software and the impact of foreign exchange translation
at period end.
Investment in VericiAt the end of FY22 the Group
held 9,831,681 shares in Verici Dx, the fair value of the
investment in Verici Dx was $2.7 million at 30 June 2021 (FY20:
$9.3 million)
Convertible NoteIn April 2022, the Company
issued amortizing senior convertible bonds with a principal amount
$21.2 million due in April 2027 (the "Bonds"). The Bonds were
issued at 85% par value with total net proceeds of $18.0 million.
The Company elected to account for the Bonds at fair value. At 30
June 2022, the Bonds had a fair value of $12.3 million.
CashThe Group had cash on hand of $41.3m (FY21:
$65.2m). Cash and equivalents are held in several deposit accounts
in the US ($12.7m), UK ($28.3m) and IRE ($0.3m). Our expenditure
plans remain sufficiently adaptable to align with available
resources.
CONSOLIDATED INCOME STATEMENTFOR THE
YEAR ENDED 30 JUNE 2022
|
Note |
Year to June 30 2022 |
|
Year to June 302021 |
|
|
$’000 |
|
$’000 |
|
Continuing operations |
|
|
|
|
|
Revenue |
8 |
|
2,970 |
|
|
|
1,491 |
|
|
Cost of Sales |
|
|
(2,052 |
) |
|
|
(804 |
) |
|
Gross Profit |
|
|
918 |
|
|
|
687 |
|
|
Administrative expenses |
9 |
|
(58,290 |
) |
|
|
(33,298 |
) |
|
Operating loss |
|
|
(57,372 |
) |
|
|
(32,611 |
) |
|
Share of Net loss in Associate accounted for using the equity
method |
|
|
9 |
|
|
|
(199 |
) |
|
Impairment of Investment of associate |
37 |
|
- |
|
|
|
(1,913 |
) |
|
Gain (loss) on financial assets at fair value through profit or
loss |
24 |
|
(5,900 |
) |
|
|
6,483 |
|
|
Gain on distribution of assets classified as held for sale |
36 |
|
- |
|
|
|
402 |
|
|
Fair value adjustment of convertible debt |
|
|
3,998 |
|
|
|
- |
|
|
Finance (costs) income - net |
14 |
|
9,637 |
|
|
|
(7,950 |
) |
|
Loss before tax |
|
|
(49,628 |
) |
|
|
(35,788 |
) |
|
Taxation |
15 |
|
(7,104 |
) |
|
|
4,778 |
|
|
Loss for the period |
|
|
(56,732 |
) |
|
|
(31,010 |
) |
|
Earnings per Ordinary share from continuing
operations |
|
|
|
|
|
Basic and diluted |
16 |
$ |
(0.78 |
) |
|
$ |
(0.43 |
) |
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE
2022
| |
Year to 30 June 2022 |
|
Year to 30 June 2021 |
|
|
|
|
|
|
$’000 |
|
$’000 |
|
|
|
|
|
| Loss for the period –
continuing operations |
(56,732 |
) |
|
(31,010 |
) |
|
|
|
|
|
| Other comprehensive
income: |
|
|
|
| Items that may be
subsequently reclassified to profit or loss |
|
|
|
| Currency translation
differences |
(11,206 |
) |
|
11,616 |
|
|
|
|
|
|
| Other comprehensive
loss for the period |
(67,938 |
) |
|
(19,394 |
) |
| Total comprehensive
loss for the period |
(67,938 |
) |
|
(19,394 |
) |
CONSOLIDATED STATEMENT OF FINANCIAL
POSITIONAS AT 30 JUNE 2022
|
|
Note |
Group As at 30 June 2022 |
|
GroupAs at 30 June 2021 |
|
CompanyAs at 30 June 2022 |
|
CompanyAs at 30 June 2021 |
| |
$’000 |
|
$’000 |
|
$’000 |
|
$’000 |
|
Assets |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
18 |
1,368 |
|
|
1,081 |
|
- |
|
|
- |
| Right of use
asset |
19 |
355 |
|
|
297 |
|
- |
|
|
- |
| Intangible
assets |
20 |
14,020 |
|
|
18,021 |
|
13,605 |
|
|
17,524 |
| Investment in
subsidiaries |
21 |
- |
|
|
- |
|
89,112 |
|
|
4,588 |
| Investments
accounted for using the equity method |
|
9 |
|
|
- |
|
- |
|
|
- |
| Note
receivable |
22 |
75 |
|
|
75 |
|
- |
|
|
- |
| Deferred tax
assets |
15 |
- |
|
|
7,097 |
|
- |
|
|
- |
| Total
non-current assets |
|
15,827 |
|
|
26,571 |
|
102,717 |
|
|
22,112 |
| |
|
|
|
|
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
|
|
| Inventory |
23 |
1,160 |
|
|
353 |
|
- |
|
|
- |
| Security
deposits |
24 |
141 |
|
|
86 |
|
- |
|
|
- |
| Assets classified
as held for sale |
36 |
- |
|
|
- |
|
- |
|
|
- |
| Financial asset at
fair value through profit or loss |
24 |
2,744 |
|
|
9,295 |
|
2,744 |
|
|
9,295 |
| Trade and other
receivables |
25 |
901 |
|
|
594 |
|
234 |
|
|
84,686 |
| Prepaid and other
current assets |
26 |
1,152 |
|
|
520 |
|
299 |
|
|
271 |
| Cash and cash
equivalents |
27 |
41,333 |
|
|
65,159 |
|
28,313 |
|
|
15,063 |
| Total
current assets |
|
47,431 |
|
|
76,007 |
|
31,590 |
|
|
109,315 |
| Total
assets |
|
63,258 |
|
|
102,578 |
|
134,307 |
|
|
131,427 |
| |
|
|
|
|
|
|
|
|
| Equity
attributable to owners |
|
|
|
|
|
|
|
|
| of the
parent |
|
|
|
|
|
|
|
|
| Share capital |
28 |
241 |
|
|
233 |
|
241 |
|
|
233 |
| Share premium |
29 |
85,444 |
|
|
76,457 |
|
85,444 |
|
|
76,457 |
| Share-based
payment reserve |
30 |
11,954 |
|
|
4,940 |
|
11,840 |
|
|
4,940 |
| Foreign currency
translation reserve |
|
(1,509 |
) |
|
9,701 |
|
(5,119 |
) |
|
9,687 |
| Retained
earnings/(deficit) |
|
(52,961 |
) |
|
3,771 |
|
23,763 |
|
|
38,917 |
| Total
equity |
|
43,169 |
|
|
95,102 |
|
116,169 |
|
|
130,234 |
|
Liabilities |
|
|
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
|
|
| Trade and other payables |
31 |
7,281 |
|
6,652 |
|
5,796 |
|
1,193 |
| Deferred Revenue |
8 |
46 |
|
122 |
|
- |
|
- |
| Current lease liabilities |
19 |
163 |
|
86 |
|
- |
|
- |
| Current liabilities |
|
- |
|
53 |
|
- |
|
- |
| Note payable current |
32 |
4,660 |
|
- |
|
4,660 |
|
- |
| Current due to affiliated
company |
33 |
55 |
|
350 |
|
- |
|
- |
| Total current
liabilities |
|
12,205 |
|
7,263 |
|
10,456 |
|
1,193 |
| |
|
|
|
|
|
|
|
|
| Non-current
liabilities |
|
|
|
|
|
|
|
|
| Note payable non-current |
|
7,682 |
|
- |
|
7,682 |
|
- |
| Non-current lease
liabilities |
19 |
202 |
|
213 |
|
- |
|
- |
| Non-current due to affiliated
company |
|
- |
|
- |
|
- |
|
- |
| Total non-current
liabilities |
|
7,884 |
|
213 |
|
7,682 |
|
- |
| Total
liabilities |
|
20,089 |
|
7,476 |
|
18,138 |
|
1,193 |
| Total equity and
liabilities |
|
63,258 |
|
102,578 |
|
134,307 |
|
131,427 |
CONSOLIDATED STATEMENT OF CASH FLOWSFOR
THE YEAR ENDED 30 JUNE 2022
| |
Note |
GroupAs at 30 June 2022 |
|
GroupAs at 30 June 2021 |
|
CompanyAs at 30 June 2022 |
|
CompanyAs at 30 June 2021 |
| |
|
$’000 |
|
$’000 |
|
$’000 |
|
$’000 |
| Cash flow from
operating activities |
|
|
|
|
|
|
|
|
| Loss before income tax |
|
(49,628 |
) |
|
(35,788 |
) |
|
(15,154 |
) |
|
(7,718 |
) |
| Adjustments for |
|
|
|
|
|
|
|
|
| Depreciation |
|
304 |
|
|
138 |
|
|
- |
|
|
- |
|
| Amortization and impairment
charges |
|
2,309 |
|
|
1,958 |
|
|
2,100 |
|
|
1,806 |
|
| Share-based payments |
|
7,010 |
|
|
2,180 |
|
|
63 |
|
|
75 |
|
| Share of net loss of
associate |
|
(9 |
) |
|
2,112 |
|
|
- |
|
|
- |
|
| Reversal of Kantaro
Liability |
|
(295 |
) |
|
(495 |
) |
|
- |
|
|
- |
|
| Gain on Sale of assets |
|
- |
|
|
(449 |
) |
|
- |
|
|
- |
|
| Forgiveness of PPP Loan |
|
- |
|
|
(255 |
) |
|
- |
|
|
- |
|
| Unrealized loss (Gain) on
financial asset at fair value through profit or loss |
|
5,900 |
|
|
(6,483 |
) |
|
5,900 |
|
|
(6,483 |
) |
| Fair value adjustment of
convertible debt |
|
(3,998 |
) |
|
- |
|
|
(3,998 |
) |
|
- |
|
| Foreign Exchange Loss
(Gain) |
|
(7,354 |
) |
|
8,832 |
|
|
- |
|
|
2,939 |
|
| Impairment of Investment in
Subsidiary |
|
- |
|
|
- |
|
|
- |
|
|
517 |
|
| Changes in working
capital |
|
|
|
|
|
|
|
|
| Trade and other
receivables |
|
(307 |
) |
|
(576 |
) |
|
- |
|
|
(60,624 |
) |
| Prepaid assets and other
current assets |
|
(698 |
) |
|
1,981 |
|
|
253 |
|
|
2,137 |
|
| Assets classified as available
for sale |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
| Inventory |
|
(807 |
) |
|
(27 |
) |
|
- |
|
|
- |
|
| Security Deposits |
|
- |
|
|
(15 |
) |
|
- |
|
|
- |
|
| Trade and other payables |
|
1,904 |
|
|
3,753 |
|
|
1,417 |
|
|
943 |
|
| Deferred Revenue |
|
(76 |
) |
|
122 |
|
|
- |
|
|
- |
|
| Payable to affiliated
company |
|
- |
|
|
(1,623 |
) |
|
- |
|
|
- |
|
| Cash used in
operations |
|
(45,745 |
) |
|
(24,635 |
) |
|
(9,419 |
) |
|
(66,408 |
) |
| Interest paid |
|
- |
|
|
3 |
|
|
- |
|
|
2 |
|
| Net cash used in
operating activities |
|
(45,745 |
) |
|
(24,632 |
) |
|
(9,419 |
) |
|
(66,406 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flow from
investing activities |
|
|
|
|
|
|
|
|
| Purchase of property, plant
and equipment (PPE) |
|
(591 |
) |
|
(783 |
) |
|
- |
|
|
- |
|
| Lease Payments |
|
- |
|
|
(93 |
) |
|
- |
|
|
- |
|
| Purchase of intangibles |
|
(103 |
) |
|
(847 |
) |
|
(103 |
) |
|
(358 |
) |
| Proceeds (purchase) of
financial assets |
|
- |
|
|
982 |
|
|
- |
|
|
- |
|
| Net cash generated
by/(used in) investing activities |
|
(694 |
) |
|
(741 |
) |
|
(103 |
) |
|
(358 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flow from
financing activities |
|
|
|
|
|
|
|
|
| Proceeds from convertible
notes |
|
18,020 |
|
|
- |
|
|
18,020 |
|
|
- |
|
| Payment of debt issuance
costs |
|
(1,382 |
) |
|
|
|
(1,382 |
) |
|
|
| Payments of issuance costs for
the Securities Purchase Agreement |
|
(218 |
) |
|
- |
|
|
(218 |
) |
|
- |
|
| Issue of shares (net of issue
costs) |
|
8,804 |
|
|
76,876 |
|
|
8,804 |
|
|
79,023 |
|
| Proceeds from the issuance of
ordinary shares under employee share purchase plan |
|
211 |
|
|
111 |
|
|
211 |
|
|
111 |
|
| Proceeds from exercise of
stock options |
|
198 |
|
|
252 |
|
|
198 |
|
|
252 |
|
| Lease payments |
|
(118 |
) |
|
- |
|
|
- |
|
|
|
| Net cash generated
from financing activities |
|
25,515 |
|
|
77,239 |
|
|
25,633 |
|
|
79,386 |
|
| Effect of exchange rate
changes on cash |
|
(2,902 |
) |
|
- |
|
|
(2,861 |
) |
|
- |
|
| Net
increase/(decrease) in cash and cash equivalents |
|
(23,826 |
) |
|
51,866 |
|
|
13,250 |
|
|
12,622 |
|
| Cash and cash equivalents at
beginning of period |
|
65,159 |
|
|
13,293 |
|
|
15,063 |
|
|
2,441 |
|
| Cash and cash
equivalents at end of period |
22 |
41,333 |
|
|
65,159 |
|
|
28,313 |
|
|
15,063 |
|
COMPANY CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE
2022
|
|
Share Capital |
Share Premium |
Share-based payment reserve |
Foreign Currency Reserve |
Retained earnings |
Total equity |
|
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
At 30 June and 1 July 2020 |
192 |
- |
|
2,833 |
(1,915 |
) |
34,852 |
|
35,962 |
|
| Comprehensive income |
|
|
|
|
|
|
| Loss for the period |
- |
- |
|
- |
- |
|
(31,010 |
) |
(31,010 |
) |
| Other comprehensive
income |
|
|
|
|
|
|
| Currency translation
differences |
- |
- |
|
- |
11,612 |
|
4 |
|
11,616 |
|
| Total comprehensive
income |
- |
- |
|
- |
11,612 |
|
(31,006 |
) |
(19,394 |
) |
| |
|
|
|
|
|
|
| Transactions with
owners |
|
|
|
|
|
|
| Issuance of Ordinary Shares in
US IPO |
40 |
85,101 |
|
- |
- |
|
- |
|
85,141 |
|
| Less issue costs |
- |
(9,007 |
) |
- |
- |
|
- |
|
(9,007 |
) |
| Share-based payments |
- |
- |
|
2,107 |
- |
|
- |
|
2,107 |
|
| Shares issued under the
ESPP |
- |
111 |
|
- |
- |
|
- |
|
111 |
|
| Exercise of Stock Options |
1 |
252 |
|
- |
- |
|
- |
|
253 |
|
| Verici Ordinary Share
Repurchase |
- |
- |
|
- |
- |
|
(75 |
) |
(75 |
) |
| Total transactions
with owners of the parent, recognized directly in
equity |
41 |
76,457 |
|
2,107 |
- |
|
(75 |
) |
78,530 |
|
| At 30 June and 1
July 2021 |
233 |
76,457 |
|
4,940 |
9,697 |
|
3,771 |
|
95,098 |
|
| |
|
|
|
|
|
|
| Comprehensive
income |
|
|
|
|
|
|
| Loss for the period |
- |
- |
|
- |
- |
|
(56,732 |
) |
(56,732 |
) |
| Other comprehensive
income |
|
|
|
|
|
|
| Currency translation
differences |
- |
- |
|
4 |
(11,206 |
) |
|
(11,202 |
) |
| Total comprehensive
income |
- |
- |
|
4 |
(11,206 |
) |
(56,732 |
) |
(67,934 |
) |
| |
|
|
|
|
|
|
| Transactions with
owners |
|
|
|
|
|
|
| Issuance of Ordinary Shares in
US IPO |
8 |
8,796 |
|
- |
- |
|
- |
|
8,804 |
|
| Less issue costs |
- |
(218 |
) |
- |
- |
|
- |
|
(218 |
) |
| Share-based payments |
- |
- |
|
7,010 |
- |
|
- |
|
7,010 |
|
| Shares issued under the
ESPP |
- |
211 |
|
- |
- |
|
- |
|
211 |
|
| Exercise of Stock Options |
- |
198 |
|
- |
- |
|
- |
|
198 |
|
| Total transactions
with owners of the parent, recognized directly in
equity |
8 |
8,987 |
|
7,010 |
- |
|
- |
|
16,005 |
|
| At 30 June
2022 |
241 |
85,444 |
|
11,954 |
(1,509 |
) |
(52,961 |
) |
43,169 |
|
COMPANY CONSOLIDATED STATEMENT OF CHANGES IN
EQUITYFOR THE YEAR ENDED 30 JUNE 2022
|
|
Share Capital |
Share Premium |
Share-based payment reserve |
Foreign Currency Reserve |
Retained earnings |
Total equity |
|
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
At 30 June and 1 July 2020 |
192 |
- |
|
2,833 |
(1,970 |
) |
46,710 |
|
47,765 |
|
| Comprehensive income |
|
|
|
|
|
|
| Loss for the period |
- |
- |
|
- |
- |
|
(7,718 |
) |
(7,718 |
) |
| Other comprehensive
income |
|
|
|
|
|
|
| Currency translation
differences |
- |
- |
|
- |
11,657 |
|
|
11,657 |
|
| Total comprehensive
income |
- |
- |
|
- |
11,657 |
|
(7,718 |
) |
3,939 |
|
| |
|
|
|
|
|
|
| Transactions with
owners |
|
|
|
|
|
|
| Issuance of Ordinary Shares in
US IPO |
40 |
85,101 |
|
- |
- |
|
- |
|
85,141 |
|
| Less issue costs |
- |
(9,007 |
) |
- |
- |
|
- |
|
(9,007 |
) |
| Share-based payments |
- |
- |
|
2,107 |
- |
|
- |
|
2,107 |
|
| Shares issued under the
ESPP |
- |
111 |
|
- |
- |
|
- |
|
111 |
|
| Exercise of Stock Options |
1 |
252 |
|
- |
- |
|
- |
|
253 |
|
| Verici Ordinary Share
Repurchase |
- |
|
- |
- |
|
(75 |
) |
(75 |
) |
| Total transactions
with owners of the parent, recognized directly in
equity |
41 |
76,457 |
|
2,107 |
- |
|
(75 |
) |
78,530 |
|
| At 30 June
2021 |
233 |
76,457 |
|
4,940 |
9,687 |
|
38,917 |
|
130,234 |
|
| |
|
|
|
|
|
|
| Comprehensive
income |
|
|
|
|
|
|
| Loss for the period |
- |
- |
|
- |
- |
|
(15,154 |
) |
(15,154 |
) |
| Other comprehensive
income |
|
|
|
|
|
|
| Currency translation
differences |
- |
- |
|
- |
(14,806 |
) |
|
(14,806 |
) |
| Total comprehensive
income |
- |
- |
|
- |
(14,806 |
) |
(15,154 |
) |
(29,960 |
) |
| |
|
|
|
|
|
|
| Transactions with
owners |
|
|
|
|
|
|
| Issuance of Ordinary Shares in
US IPO |
8 |
8,796 |
|
- |
- |
|
- |
|
8,804 |
|
| Less issue costs |
- |
(218 |
) |
- |
- |
|
- |
|
(218 |
) |
| Share-based payments |
- |
- |
|
6,900 |
- |
|
- |
|
6,900 |
|
| Shares issued under the
ESPP |
- |
211 |
|
- |
- |
|
- |
|
211 |
|
| Exercise of Stock Options |
- |
198 |
|
- |
- |
|
- |
|
198 |
|
| Total transactions
with owners of the parent, recognized directly in
equity |
8 |
8,987 |
|
6,900 |
- |
|
- |
|
15,895 |
|
| At 30 June
2022 |
241 |
85,444 |
|
11,840 |
(5,119 |
) |
23,763 |
|
116,169 |
|
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS
1. General
information and basis of presentation
Renalytix Plc (the “Company”) is a company
incorporated in the United Kingdom. The Company is a public limited
company, which is listed on the AIM market of the London Stock
Exchange and Nasdaq global market. The address of the registered
office is Finsgate, 5-7 Cranwood Street, London, United Kingdom,
EC1V 9EE. The Company was incorporated on 15 March 2018 and its
registered number is 11257655.
The principal activity of the Company and its
subsidiaries (together “the Group”) is as a developer of artificial
intelligence- enabled diagnostics for kidney disease.
The financial statements are presented in United
States Dollars (“USD”) because that is the currency of the primary
economic environment in which the Group operates.
2.
Basis of
presentation
The Group and Company’s financial statements
have been prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the
Companies Act 2006.
The preparation of financial statements in
conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group’s accounting
policies.
New Standards, amendments, and
interpretations not adopted by the group
The group did not adopt any new standards,
amendments or interpretations in year as they did not have a
material impact on the financial statements.
New standards, amendments, and
interpretations issued but not effective for the period ended 30
June 2022, and not early adopted
A number of new standards and amendments to
standards and interpretations are effective for annual periods
beginning on or after 1 January 2022 and have not been applied in
preparing these financial statements. None of these is expected to
have a significant effect on the financial statements of the Group
or Parent Company.
- Amendments to IFRS 1, IAS 3, IFRS
17
3. Significant
accounting policies
The principal accounting policies applied in the
preparation of these financial statements are set out below.
Going concernThe Group and
Company meet their day-to-day working capital requirements through
the use of cash reserves.The Directors have considered the
applicability of the going concern basis in the preparation of
these financial statements. This included the review of internal
budgets and financial results which show, taking into account
reasonably probable changes in financial performance, that the
Group and Company should be able to operate within the level of its
current funding arrangements.
We have not yet seen any material disruption to
our business as a result of the COVID-19 pandemic and current
trading suggests that our base case forecasts are still
applicable.
The Directors believe that the Group and the
Company have adequate resources to continue in operation for the
foreseeable future. For this reason, they have adopted the going
concern basis in the preparation of the financial statements.
Basis of consolidationThe
consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
The Group uses the acquisition method of
accounting to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values
of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration agreement. Acquisition related costs are
expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition
date.
On 23 October 2018 as part of a pre-admission
reorganization, the Company acquired the entire share capital of
Renalytix AI, Inc., then a subsidiary of EKF. Given common
ownership of the Company and the subsidiary from incorporation up
to the date of legal ownership, the transaction has been treated as
a group reorganization with no fair value adjustments to assets or
liabilities. The subsidiary has been consolidated within the
results of the Group from the date of incorporation.
Inter-company transactions, balances and
unrealized gains on transactions between Group companies are
eliminated. Unrealized losses are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Associates are entities over which the Group has
significant influence but not control over the financial and
operating policies. Investments in associates are accounted for
using the equity method of accounting and are initially recognized
at cost. The Group’s share of its associates’ post-acquisition
profits or losses is recognized in profit or loss, and its share of
post-acquisition movements in reserves is recognized in other
comprehensive income. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment.
Foreign currency
translation(a) Functional and presentational
currencyItems included in the financial statements of each of the
Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional
currency). The consolidated financial statements are presented in
United States Dollars, which is the Group’s presentational
currency. The functional currency of the Parent Company is GB
Pounds.
(b) Transactions and balancesForeign
currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the
transactions where items are re-measured. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognized in
the income statement within ‘administrative expenses’.
(c) Group companiesThe results and
financial position of all the Group entities that have a functional
currency different from the presentational currency are translated
into the presentational currency as follows:
- assets and liabilities for each
balance sheet presented are translated at the closing rate at the
date of that balance sheet;
- income and expenses for each income
statement are translated at average exchange rates; and
- all resulting exchange differences
are recognized in other comprehensive income.
On consolidation, exchange differences arising
from the translation of the net investment in foreign operations
are taken to other comprehensive income. When a foreign operation
is partially disposed of or sold, exchange differences that were
recorded in equity are recognized in the income statement as part
of the gain or loss on sale.
Segmental reportingOperating
segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision- maker. The
chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has
been identified as the Executive Directors who make strategic
decisions. At present the Directors consider the business to
operate in a single segment.
Property, plant and
equipmentProperty, plant and equipment are stated at
historical cost less accumulated depreciation and any provision for
impairment. Historical cost includes expenditure that is directly
attributable to the acquisition of the asset and bringing the asset
to its working condition for its intended use.
Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset, as appropriate,
only where it is probable that future economic benefits associated
with the asset will flow to the Group and the cost of the asset can
be measured reliably. The carrying amount of the replaced part is
derecognized. All other repairs and maintenance are charged to the
income statement during the financial period in which they are
incurred.
Depreciation on assets is calculated using the
straight-line method to allocate their cost to their residual
values over their estimated useful lives, as follows:
- Fixtures and fittings 20%
The assets’ residual values and useful economic
lives are reviewed regularly, and adjusted if appropriate, at the
end of each reporting period.
An asset’s carrying value is written down
immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on the disposal of assets are
determined by comparing the proceeds with the carrying amount and
are recognized in administration expenses in the income
statement.
Intangible
assets(a) Trademarks, trade names and
licencesSeparately acquired trademarks and licenses are shown at
historical cost. Trademarks and licenses acquired in a business
combination are recognized at fair value at the acquisition date.
Trademarks and licenses have a finite useful life and are carried
at cost less accumulated amortization. Amortization is calculated
using the straight-line method to allocate the cost of trademarks
and licenses over the contractual license period of 10 to 15 years
and is charged to administrative expenses in the income
statement.
(b) Development costs and trade
secretsDevelopment costs have a finite useful life and are carried
at cost less accumulated amortization.
Expenditure incurred on the development of new
or substantially improved products or processes is capitalized,
provided that the related project satisfies the criteria for
capitalisation, including the project’s technical feasibility and
likely commercial benefit. All other research and development costs
are expensed to profit or loss as incurred.
Development costs are amortized over the
estimated useful life of the products with which they are
associated. Amortization commences when a new product is in
commercial production. The amortization is charged to
administrative expenses in the income statement. The estimated
remaining useful lives of development costs are reviewed at least
on an annual basis.
The carrying value of capitalized development
costs is reviewed for potential impairment at least annually and if
a product becomes unviable and an impairment is identified the
deferred development costs are immediately charged to the income
statement. Amortization has not yet commenced.
Trade secrets, including technical know-how,
operating procedures, methods and processes, are recognized at fair
value at the acquisition date. Trade secrets have a finite useful
life and are carried at cost less accumulated amortization.
Amortization has not yet commenced.
Impairment of non-financial
assetsAssets that have an indefinite life or where
amortization has not yet commenced are tested annually for
impairment. Assets that are subject to amortization are reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss
is recognized for the amount by which the carrying amount exceeds
its recoverable amount.
The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately
identifiable cash flows. Impairment losses recognized for
cash-generating units, to which goodwill has been allocated, are
credited initially to the carrying amount of goodwill. Any
remaining impairment loss is charged pro rata to the other assets
in the cash-generating unit.
Where an impairment loss subsequently reverses,
the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for the asset (cash-generating unit) in the prior
period. A reversal of an impairment loss is recognized in the
income statement immediately. If goodwill is impaired however, no
reversal of the impairment is recognized in the financial
statements.
Financial assets
Classification
The Company classifies its financial assets in
the following categories: loans and receivables at amortized cost
and financial assets at fair value through profit or loss. The
classification depends on the purpose for which the financial
assets were acquired and management determines the classification
of its financial assets at initial recognition.
(a) Loans and receivablesFinancial
assets are classified as at amortized cost only if both of the
following criteria are met: the asset is held within a business
model whose objective is to collect contractual cash flows, and the
contractual terms give rise to cash flows that are solely payments
of principal and interest. Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not
quoted on an active market. They are included in current assets,
except for maturities greater than 12 months after the balance
sheet date. These are classified as non-current assets. The
Company’s loans and receivables comprise ‘trade and other
receivables’ and cash and cash equivalents in the balance
sheet.
(b) Financial assets at fair value
through profit or lossThe Group classifies the following financial
assets at fair value through profit or loss (“FVPL”):
- equity investments that are held
for trading, and
- equity investments for which the
entity has not elected to recognise fair value gains and losses
through Other Comprehensive Income.
(c) Financial assets at fair value
through other comprehensive incomeFinancial assets at fair value
through other comprehensive income comprise equity securities that
are not held for trading and which the Group has irrevocably
elected at initial recognition to recognize in this category. The
Group considers this category to be more relevant for assets of
this type.
(d) Financial liabilities at fair
value through profit or lossThe Group classifies the following
financial assets at fair value through profit or loss (“FVPL”):
- Convertible debt recorded at fair
value through profit or loss.
Cash and cash equivalentsCash
and short-term deposits in the balance sheet comprise cash at bank
and in hand and short- term deposits with an original maturity of
three months or less.For the purposes of the cash flow statements,
cash and cash equivalents consist of cash and short-term deposits
as defined above.
Share capital and
premiumOrdinary Shares are classified as equity. Proceeds
in excess of the nominal value of shares issued are allocated to
the share premium account and are also classified as equity.
Incremental costs directly attributable to the issue of new
Ordinary Shares or options are deducted from the share premium
account.
Other reserves - equityThe
share-based payment reserve is used to recognize the fair value of
equity settled share-based payment transactions.
Foreign currency reserve is used to record the
exchange differences on translation of entities in the Group which
have a functional currency different to the presentation
currency.
Retained earnings includes all current and prior
period results as disclosed in the income statement.
Trade and other payablesTrade
payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment
is due within one year or less (or in the normal operating cycle of
the business if longer). If not, they are presented as non-current
liabilities. Trade payables are recognized initially at fair value
and subsequently measured at amortized cost using the effective
interest method.
Current and deferred income
taxIncome tax comprises current and deferred tax. Tax is
recognized in the income statement, except to the extent that it
relates to items recognized in other comprehensive income where the
associated tax is also recognized in other comprehensive
income.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the Company and its
subsidiary operate and generate taxable income. Management
evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation and
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax is recognized, using the liability
method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Deferred tax liabilities
are recognized in respect of all temporary differences except where
the deferred tax liability arises from the initial recognition of
goodwill in business combinations.
Deferred tax assets are recognized for all
deductible temporary differences, carry-forward of unused tax
assets and tax losses, to the extent that they are regarded as
recoverable. They are regarded as recoverable where, on the basis
of available evidence, there will be sufficient taxable profits
against which the future reversal of the underlying temporary
differences can be deducted.
The carrying value of the amount of deferred tax
assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit
will be available to allow all, or part, of the tax asset to be
utilized.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply to the year when the
asset is realized or the liability is settled, based on the tax
rates (and tax laws) that have been substantively enacted at the
balance sheet date.
Deferred income tax assets and liabilities are
offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred
income tax assets and liabilities relate to income taxes levied by
the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle
the balances on a net basis.
LeasesLeases are recognized as
a right-of-use asset and a corresponding lease liability at the
date on which the leased asset is available for use by the
Group.
Assets and liabilities arising from a lease are
initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
- fixed payments (including
in-substance fixed payments), less any lease incentives
receivable
- variable lease payment that are
based on an index or a rate, initially measured using the index or
rate as at the commencement date
- amounts expected to be payable by
the group under residual value guarantees
- the exercise price of a purchase
option if the group is reasonably certain to exercise that option,
and
- payments of penalties for
terminating the lease, if the lease term reflects the group
exercising that option.
Lease payments to be made under reasonably
certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the
interest rate implicit within the lease. If that rate cannot be
readily determined, the Group's incremental borrowing rate is used,
being the rate that the Group would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms,
security, and conditions.
Where the Group is exposed to potential future
increases in variable lease payments based on an index or rate,
amounts are not included in the lease liability until they take
effect. When adjustments to lease payments based on an index or
rate take effect, the lease liability is reassessed and adjusted
against the right-of-use asset.
Lease payments are allocated between principal
and finance cost. The finance cost is charged to the income
statement over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability
for each period.Right-of-use assets are measured at cost comprising
the following:
- the amount of the initial
measurement of lease liability
- any lease payments made at or
before the commencement date less any lease incentives
received
- any initial direct costs
- restoration costs
Right-of-use assets are generally depreciated
over the shorter of the asset's useful life and the lease term on
straight line basis. If the Group is reasonably certain to exercise
a purchase option, the right-of-use asset is depreciated over the
underlying asset's useful life.
Revenue RecognitionThe Group
recognizes revenue when a customer obtains control of contracted
goods or services. The Group records the amount of revenue that
reflects the consideration that it expects to receive in exchange
for those goods or services. The Group applies the following
five-step model in order to determine this amount: (i)
identification of the promised goods or services in the contract;
(ii) determination of whether the promised goods or services are
performance obligations, including whether they are distinct in the
context of the contract; (iii) measurement of the transaction
price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations;
and (v) recognition of revenue when (or as) the Group satisfies
each performance obligation.
The Group only applies the five-step model to
contracts when it is probable that it will collect the
consideration to which it is entitled in exchange for the goods or
services that it transfers to the customer. The Group reviews the
contract to determine which performance obligations it must deliver
and which of these performance obligations are distinct. Certain
contracts have options for the customer to acquire additional
services. The Group evaluates these options to determine if a
material right exists. If, after that evaluation, it determines a
material right does exist, it assigns value to the material right
based upon the renewal option approach. The Group recognizes as
revenue the amount of the transaction price that is allocated to
each performance obligation when that performance obligation is
satisfied or as it is satisfied. The Group uses present right to
payment and customer acceptance as indicators to determine the
transfer of control to the customer occurs at a point in time.
Sales tax and other similar taxes are excluded from revenues.
Cost of revenueCost of revenue
consists of costs directly attributable to the services rendered,
including labor costs directly related to revenue generating
activities.
Employee
benefits(a) Pension obligationsThe Group makes
contributions to defined contribution pension plans. A defined
contribution plan is a pension plan under which the Group pays
fixed contributions into a separate entity with the pension cost
charged to the income statement as incurred. The Group has no
further obligations once the contributions have been paid.
(b) Share-based compensationThe Group
operates an equity-settled, share-based compensation plan, under
which the Group receives services from employees and others as
consideration for equity instruments of the Group. Equity-settled
share-based payments are measured at fair value at the date of
grant and are expensed over the vesting period based on the number
of instruments that are expected to vest. For plans where vesting
conditions are based on share price targets, the fair value at the
date of grant reflects these conditions. Where applicable the Group
recognizes the impact of revisions to original estimates in the
income statement, with a corresponding adjustment to equity for
equity-settled schemes. Fair values are measured using appropriate
valuation models, taking into account the terms and conditions of
the awards.
When the share-based payment awards are
exercised, the Company issues new shares. The proceeds received net
of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium.
National insurance on share
optionsTo the extent that the share price at the balance
sheet date is greater than the exercise price on options granted to
UK citizens under unapproved share-based payment compensation
schemes, provision for any National Insurance Contributions has
been based on the prevailing rate of National Insurance. The
provision is accrued over the performance period attaching to the
award.
Interest incomeInterest income
is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s
net carrying amount.
Exceptional itemsThese are
items of an unusual or non-recurring nature incurred by the Group
and include transactional costs and one-off items relating to
business combinations, such as acquisition expenses.
Assets Classified as Held for
SaleAssets are classified as held for sale if their
carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their
carrying value and fair value less costs to sell. An impairment
loss is recognized for any subsequent write-down of the asset to
fair value less costs to sell.
4. Segmental
Reporting
The Group operates as a single segment.
5.
Income
Tax
|
|
Year ended 30 June 2022 |
Year ended 30 June 2021 |
|
Group |
$'000 |
$'000 |
| Deferred tax |
- |
4,778 |
| Total deferred tax |
- |
4,778 |
| Income tax credit |
- |
4,778 |
No deferred asset is calculated on losses in
FY22 as the probability of future utilization is considered too
remote.
Factors affecting the future tax chargeThe
standard rate of corporation tax in the UK is 19%.
Changes to UK Corporation tax rates were enacted
as part of The Finance (No.2) Act 2021 which received Royal Assent
on 10 June 2021. The main rate will remain at 19% before increasing
to 25% from 1 April 2023.
|
|
Year ended 30 June 2022 |
Year ended 30 June 2021 |
|
|
$'000 |
$'000 |
|
Loss before Tax |
49,628 |
|
35,788 |
|
| Tax Calculated at domestic tax
rates applicable to the UK Standard of tax at 19% |
9,429 |
|
6,800 |
|
| Tax effects of: |
|
|
| Expenses not deductible for
tax purposes |
4,490 |
|
(487 |
) |
| Losses on which no deferred
tax asset is recognized |
(578 |
) |
(1,535 |
) |
| Tax Credit for the
Year |
13,341 |
|
4,778 |
|
| Current year Valuation
Allowance |
(13,341 |
) |
4,778 |
|
| Prior year Deferred Tax |
7,097 |
|
2,319 |
|
| Reversal of tax asset at 30
June |
(7,097 |
) |
7,097 |
|
| Tax Expense |
(7 |
) |
- |
|
| Total Income Tax
Expense |
(7,104 |
) |
7,097 |
|
Deferred tax assets are recognized based on
subsidiary net losses based on the US corporate tax rate of 21%.
Net losses can be carried forward indefinitely to offset future
taxable profits however management has concluded that the
realization of deferred tax assets to be less than probable and
recorded an impaired the deferred tax asset in current year. No
deferred asset is calculated on losses in the UK totaling
$15,155,000 where the probability of future utilization is
considered too remote.
6.
Earnings
Per Share
Basic earnings per share is calculated by
dividing the loss attributable to equity holders of the parent by
the weighted average number of ordinary shares in issue during the
period.
|
|
Year ended 30 June 2022 |
Year ended 30 June 2021 |
|
|
$'000 |
$'000 |
|
Loss attributable to owners of the parent |
|
(56,648 |
) |
|
(31,010 |
) |
| Weighted average number of
ordinary shares in issue |
|
72,836,424 |
|
|
71,484,934 |
|
| Basic and diluted loss per
share |
$ |
(0.78 |
) |
$ |
(0.43 |
) |
The Company was incorporated on 15 March 2018
with 50,000 ordinary shares of £1.00 each, and as a result of
subdivisions (100:1 on 4 May 2018 and then 4:1 on 24 October 2018),
the resulting founding shares became 20,000,000 at £0.0025
each.
The Company has two categories of dilutive
potential ordinary share, being share options and convertible debt.
The potential shares were not dilutive the period and prior period
as the Group made a loss.
7.
Investments
in Subsidiaries
|
|
At 30 June 2022 |
At 30 June 2021 |
|
Company |
$'000 |
$'000 |
|
At beginning of Period |
4,588 |
2,264 |
|
| Capital Contribution relating
to share based payment |
2,824 |
2,325 |
|
| Conversion of intercompany
loan to equity investment |
81,700 |
|
| Shares in Verici Dx Ltd |
- |
(1 |
) |
| At End of Period |
89,112 |
4,588 |
|
Investments in Group undertakings are recorded
at cost, which is the fair value of the consideration paid, less
any impairment. The Company had the following subsidiaries as of 30
September 2022.
|
Name of Company |
Proportion held |
Class of shareholding |
Nature of business |
|
Renalytix AI Inc.1 |
100 |
% |
Ordinary |
Developer of artificial intelligence-enabled clinical diagnostic
solutions for kidney disease |
| Renalytix AI Limited2 |
100 |
% |
Ordinary |
Developer of artificial
intelligence-enabled clinical diagnostic solutions for kidney
disease |
- Renalytix AI Inc. is incorporated
in the United States of America and has their principal place of
business at 1460 Broadway, New York, New York 10036. Renalytix AI
Inc. is included in the consolidation. The proportions of voting
shares held by the parent company do not differ from the proportion
of Ordinary Shares held.
- Renalytix AI Limited is
incorporated in the Republic of Ireland and has their principal
place of business at 29 Lower Patrick Street, Kilkenny, Ireland.
Renalytix AI Ltd. is included in the consolidation. The proportions
of voting shares held by the parent company do not differ from the
proportion of Ordinary Shares held.
8.
Related
Party Transactions
In May 2018, the Company secured its cornerstone
license agreement with ISMMS for research and clinical study work
and intended commercialization by the Company. As part of the
collaboration, ISMMS became a shareholder in the Company and has
subsequently made equity investments both in the Company’s IPO in
November 2018 and the subsequent sale of ordinary shares in July
2019.
In connection with the formation of Kantaro, the
Company entered into a five-year Advisory Services Agreement
(“Advisory Agreement”) pursuant to which the Company has agreed to
provide certain advisory services to Kantaro.
Pursuant to the Kantaro Operating Agreement,
Kantaro issued 750 Class A Units to Mount Sinai in exchange for
Mount Sinai granting licenses to Kantaro under certain intellectual
property rights of Mount Sinai and 250 Class A Units to the Company
as the sole consideration for the services to be rendered by the
Company under the Advisory Agreement. A portion of the Company’s
units are subject to forfeiture if, prior to December 31, 2020,
Kantaro terminates the Advisory Agreement as a result of an uncured
material breach of the Advisory Agreement or in the event the
Company is acquired by a hospital or health system that serves all
or any portion of the service areas served by Mount Sinai. The
Company determined the fair value of the services at June 30, 2022,
to be provided under the Advisory Agreement was $0.1 million. A
gain of $0.01 million was recognized within equity in gain (losses)
of affiliate the accompanying consolidated statements of operations
and comprehensive loss.
In addition to the equity granted at formation,
the Company and Mount Sinai each committed to making a loan to
Kantaro. Mount Sinai committed to lend an initial amount of $0.3
million and an additional $0.5 million thereafter. The Company
committed to lend an initial amount of $83,333 and an additional
$0.2 million thereafter. Each loan bears interest at a per annum
rate equal to 0.25%, compounded monthly, until repaid, and is
repayable from the first amounts that would otherwise constitute
cash available for distribution to the members of Kantaro (provided
that each loan repayment will be made, 75% to Mount Sinai and 25%
to the Company). In the year ended 30 June 2021, the Company loaned
Kantaro the full $250,000 however later recorded a reserve of
$175,000 based on uncertainty regarding collectability and had a
remaining $75,000 note receivable at June 30, 2022.
In June 2020, we and Mount Sinai entered into a
registration rights agreement pursuant to which we have granted
Mount Sinai the following registration rights:
- Demand Registration on Form F-3 –
Mount Sinai is entitled to demand registrations on Form F-3, if we
are then eligible to register shares on Form F-3, including up to
two underwritten offerings in any 12-month period.
- Demand Registration on Form F-1 or
Form S-1 – At any time following one year after the completion of
the global offering, if we are not eligible to register shares on
Form F-3 or S-3, Mount Sinai is entitled to a maximum of one demand
registration on Form F-1 or Form S-1 during any 12-month period,
subject to specified exceptions.
- Piggyback Registration – Mount
Sinai is entitled to certain piggyback registration rights, subject
to certain marketing and other limitations in the context of an
underwritten offering.
- Expenses – We will pay all
registration expenses incident to the performance of our
obligations under the registration rights agreement.
Mount Sinai’s registration rights will terminate
at such time as Rule 144, or another similar exception under the
Securities Act, is available for the unlimited public sale of all
of Mount Sinai’s registrable securities without any volume or
manner of sale limitations, subject to specified exceptions.
Additionally, Mount Sinai participated in our
April 2022 equity offering and purchased 551,724 ADSs. This
purchase was made through the underwriters at the offering price of
$7.25 per ADS.
9.
Reconciliation
of IFRS to U.S. GAAP
Since Renalytix initial listing on Nasdaq, the
Company has followed accounting principles generally accepted in
the United States of America (‘US GAAP’), both for internal as well
as external purposes. The information below is unaudited and does
not form part of the statutory accounts.
Renalytix Form 20-F, which is based on US GAAP,
contains differences from its Annual Report, which is based on
IFRS. The Form 20-F and Annual Report will be available on the
Company’s website (www.renalytix.com) once filed. In order to help
readers to understand the difference between the Group’s two sets
of financial statements, Renalytix has provided, on a voluntary
basis, a reconciliation from IFRS to U.S. GAAP as follows:
Balance Sheet(in thousands
except share and per share amounts)
|
|
GAAPAs at30 June
2022 |
IFRSAs at30 June
2022 |
GAAP vs IFRSDifference |
|
|
Assets |
|
Cash |
$ |
41,333 |
|
$ |
41,333 |
|
$ |
- |
|
|
| Accounts receivable |
|
901 |
|
|
901 |
|
|
- |
|
|
| Prepaid expenses and other
current assets |
|
2,445 |
|
|
2,453 |
|
|
(8 |
) |
(a) |
| Note receivable – Kantaro |
|
75 |
|
|
75 |
|
|
- |
|
|
| Property, plant and equipment,
net |
|
2,558 |
|
|
1,368 |
|
|
1,190 |
|
(b) |
| Intangibles, net |
|
- |
|
|
14,020 |
|
|
(14,020 |
) |
(c) |
| Investment in Verici |
|
2,744 |
|
|
2,744 |
|
|
- |
|
|
| Investment in Kantaro |
|
9 |
|
|
9 |
|
|
- |
|
|
| Right of use asset |
|
|
355 |
|
|
(355 |
) |
(d) |
| Total assets |
|
50,065 |
|
|
63,258 |
|
|
|
| Liabilities and
stockholders’ equity |
|
|
|
|
| Current
Liabilities: |
|
|
|
|
| Note payable – current |
|
4,660 |
|
|
4,660 |
|
|
|
| Accounts payable |
|
2,459 |
|
|
7,281 |
|
|
(266 |
) |
(e) |
| Accrued expenses and other
current liabilities |
|
3,060 |
|
|
- |
|
|
|
| Accrued expenses – related
party |
|
1,496 |
|
|
- |
|
|
|
| Current lease liability |
|
- |
|
|
163 |
|
|
(163 |
) |
(d) |
| Payable to Kantaro -
current |
|
55 |
|
|
55 |
|
|
|
| Deferred Revenue |
|
46 |
|
|
46 |
|
|
|
| Total current liabilities |
|
11,776 |
|
|
12,205 |
|
|
|
| Note payable – noncurrent |
|
7,682 |
|
|
7,682 |
|
|
|
| Noncurrent lease
liabilities |
|
- |
|
|
202 |
|
|
(202 |
) |
(d) |
| Total Liabilities |
|
19,458 |
|
|
20,089 |
|
|
|
| Stockholders’
(deficit) equity: |
|
|
|
|
| Ordinary shares, £0.10 nominal
value: 56,011,831 shares authorized; 20,000,000 and 53,816,134
shares issued and outstanding at June 30, 2018 and 2019,
respectively |
|
228 |
|
|
241 |
|
|
13 |
|
(f) |
| Additional paid in
capital |
|
164,012 |
|
|
97,398 |
|
|
(66,614 |
) |
(g) |
| Accumulated other
comprehensive (loss) income |
|
(915 |
) |
|
(1,509 |
) |
|
(594 |
) |
(h) |
| Accumulated deficit |
|
(132,718 |
) |
|
(52,961 |
) |
|
79,757 |
|
(i) |
| Total stockholders' (deficit)
equity |
|
30,607 |
|
|
43,169 |
|
|
|
| Total liabilities and
stockholders’ (deficit) equity |
|
50,065 |
|
|
63,258 |
|
|
|
(a) Represents other immaterial
presentation differences between US GAAP & IFRS(b)
Differences is attributable to capitalized software costs which are
recorded as property and equipment under U.S. GAAP and Intangibles
under IFRS.(c) Under IFRS, the acquisition of licenses and
subsequent development efforts are capitalized and presented as
intangible assets. Under U.S. GAAP, such costs are expensed as
incurred until technological feasibility has been achieved or the
assets are deemed to have future alternative use. In addition to
capitalized software costs which are recorded as property and
equipment under US GAAP and Intangibles under IFRS.(d)
Represents the adoption of IAS 17 in connection with the Company's
commercial laboratory in Utah. The Company has deferred the
adoption of ASC 842 under U.S. GAAP until July 1, 2022.(e)
Accounts payable and other current liabilities are presented in the
aggregate within the Annual report while broken out separately on
the US GAAP 6-k. Difference represents other immaterial
presentation differences and audit adjustments.(f) Represents
other immaterial audit adjustments(g) Represents cancellation
of share premium account and reduction in accumulated deficit under
IFRS in anticipation of a distribution of FractalDx net assets to
the shareholders of Verici in prior year. In addition, stock-based
compensation is recognized on a straight-line basis under U.S. GAAP
and a graded vesting basis under IFRS which creates timing
differences as to when expenses are recorded.(h) Represents
the difference in weighted average foreign exchange rates and spot
rates used for translation of financial statements under IFRS and
U.S. GAAP.(i) Represents cancellation of share premium and
reduction in accumulated deficit under IFRS in anticipation of a
distribution of FractalDx net assets to the shareholders of Verici
and differences noted within the Company's consolidated statement
of operations and comprehensive loss.
Reconciliation of Net Loss($
thousands)
|
|
Year ended June 2022 |
|
|
Net loss in accordance with IFRS |
(56,732 |
) |
|
| Deferred tax assets |
7,104 |
|
(a) |
| Stock compensation
expense |
2,389 |
|
(b) |
| Amortization of
intangibles |
1,981 |
|
(c) |
| Other adjustments |
(18 |
) |
(e) |
| Total adjustments |
11,456 |
|
|
| Net loss in accordance
with US GAAP |
(45,276 |
) |
|
(a) Valuation allowances are recorded to
reduce deferred tax assets when it is more likely than not that a
tax benefit will not be realized based on available evidence.
Historically, under U.S. GAAP, a full valuation allowance has been
applied. Historically, under IFRS a partial valuation allowance was
applied however a full valuation allowance was booked in the
current year which resulted in the increased tax expense.(b)
Stock based compensation is recognized on a straight-line basis
under U.S. GAAP and a graded vesting basis under IFRS which creates
timing differences as to when expenses are recorded.(c)
Amortization expense is higher on the IFRS books as a result of the
higher intangible asset balance. Under IFRS, the acquisition of
licenses and subsequent development efforts are capitalized and
presented as intangible assets. Under U.S. GAAP, such costs are
expensed as incurred until technological feasibility has been
achieved or the assets are deemed to have future alternative
use.(d) This difference is attributable to the differences in
accounting treatment of the distribution in specie of Verici Dx to
Renalytix shareholders and subsequent deconsolidation of the Verici
entity under IFRS and US GAAP.(e) The remaining difference
represents the aggregation other immaterial audit adjustments and
small accounting standard difference.
Renalytix (NASDAQ:RNLX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Renalytix (NASDAQ:RNLX)
Historical Stock Chart
From Apr 2023 to Apr 2024
