Renalytix
plc
("Renalytix" or the
"Company")
Audited Full Year Fiscal 2024
Results
LONDON and NEW YORK, 21 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 health care cost reduction, reports
audited financial results for the fiscal year ended 30 June
2024.
The Company
has now largely completed its reorganization from development
activities to commercial sales, and has implemented a new large
customer launch of kidneyintelX.dkd post-period end. With
growing commercial adoption, significantly lower operating
expenses, an 80% reduction of outstanding debt obligations, and an
£11.8m funding closed on 4 November 2024, Renalytix is funded and
projected to deliver anticipated profitability in two years with no
further funding requirements.
kidneyintelX.dkd, is the only
kidney prognostic test that is FDA approved; has full Medicare
reimbursement granted at $950 per test; is recommended in the
international clinical care guidelines; is available to
approximately 14m US diabetic kidney disease ("DKD") patients; and
is able to address the needs of approximately ~250M DKD patients
globally.
Full Year Fiscal 2024 highlights
Continued commercial progress
·
Achieved full Medicare reimbursement at $950 per
reportable result in May
·
Launched the FDA-approved kidneyintelX.dkd across all existing
customers to replace the KidneyIntelX laboratory developed
test
·
Recommended for use in international clinical care
guidelines (Kidney Disease Improving Global Outcomes)
·
kidneyintelX.dkd commercial
launch begun in September with a large New York-based physician
group practice primary care network serving over 500,000
patients
·
Issued three-year guidance on expected revenue
growth: c. $3.2m in FY25, $8.5m in FY26 and $17.5m in
FY27
·
Hired new commercial leadership with a track
record of diagnostic sales success
·
Revamped customer service and ordering process to
improve doctor experience during test ordering
Funded to profitability in two years
·
£11.8m fundraise completed in November, is
expected take the Company through profitability and cash-flow
break-even in two years
·
Successfully renegotiated senior convertible loan
notes and accounts payable removing more than 80% of cash
obligations over next three years (c. £485,000 per
month)
·
US trading platform moved to OTCQB® Venture Market and expected
re-instatement of Foreign Private Issuer
("FPI") status in January for additional excepted savings of up to
£1.9m annually
·
Over-all monthly cash burn expected to be reduced
to £560,000 target by the end of FY25
Corporate Highlights
·
Julian Baines, MBE appointed as
Executive Chairman
·
Daniel Levangie resigned from Board of
Directors
James McCullough, CEO of Renalytix commented:
"We now have
everything in place to scale test ordering and expand our unique
biomarker precision medicine services. The incoming Trump
Administration's refocusing of the US Government on chronic disease
cost control makes this a particularly enticing time to establish a
new, FDA approved standard of care in one of the largest unmet
preventative medicine opportunities, chronic kidney
disease."
Investors are advised to
read the results for the 12 months ended 30 June 2024, which has
been filed with the U.S. Securities and Exchange Commission on Form
10-K.
For further information,
please contact:
|
Renalytix plc
|
www.renalytix.com
|
|
James McCullough, CEO
|
Via Walbrook
PR
|
|
|
|
|
Stifel (Nominated Adviser and Joint Broker)
|
Tel: 020 7710
7600
|
|
Nicholas Moore / Nick Harland / Ben
Good
|
|
|
|
|
|
Oberon Capital (Joint Broker)
|
Tel: 020 3179
5300
|
|
Mike Seabrook / Nick
Lovering
|
|
|
|
|
|
Walbrook PR Limited
|
Tel: 020 7933
8780 or renalytix@walbrookpr.com
|
|
Paul McManus / Alice
Woodings
|
Mob: 07980
541 893 / 07407 804 654
|
|
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CapComm Partners
|
|
|
Peter DeNardo
|
Tel:
415-389-6400 or investors@renalytix.com
|
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|
About Renalytix
Renalytix (LSE: RENX) (OTCQB: RNLXY)
is an artificial intelligence enabled in vitro diagnostics and laboratory
services company that is the global founder and leader in the field
of bioprognosis™ for kidney health. In late 2023, our kidneyintelX.dkd test was recognized
as the first and only FDA-authorized prognostic test to enable
early-stage CKD (stages 1-3b) risk assessment for progressive
decline in kidney function in T2D patients. By understanding how
disease will progress, patients and clinicians can take action
earlier to improve outcomes and reduce overall health system
costs.
Unrecognized and uncontrolled kidney
disease remains one of the largest barriers to controlling cost and
suffering in the United States and the United Kingdom's medical
system, affecting over 14 million and 8 million people,
respectively. After five years of development and clinical
validation, kidneyintelX.dkd is the only FDA
approved prognostic tool capable of understanding a patient's risk
with kidney disease early where treatment has maximal effect.
kidneyintelX.dkd is now
being deployed across large physician group practices and health
systems in select regions of the United States.
The over 10,000 patients that have
been tested by kidneyintelX.dkd have produced a
substantial body of real-world performance data. In patient
populations where kidneyintelX.dkd has been deployed, a
demonstrated and significant increase in diagnosis, prognosis, and
treatment rates have been recorded. kidneyintelX.dkd now has full
reimbursement established by Medicare, the largest insurance payer
in the United States, at $950 per reportable result. kidneyintelX.dkd is also recommended
for use in the international chronic kidney disease clinical
guidelines (KDIGO).
For more information,
visit www.renalytix.com.
CEO
Statement
During the prior year we have taken
considerable and painful steps to reorganize our Company and
complete the transition from a development-phase organization to a
commercial growth-phase business. With substantive reductions in
operating expenses, restructuring of debt and payable obligations,
and in November, the completion of a fresh institutional funding,
we now believe that the Company will be able to achieve
profitability in 2 years.
With the positive June Medicare
coverage decision, kidneyintelX.dkd has just completed
the trifecta of FDA approval, insurance reimbursement and
guidelines recommendation. kidneyintelX.dkd is now the only
regulated and reimbursed test available for early prognosis, a
cornerstone in understanding who is at risk and who to treat with
lifetime drug therapy for some 14 million patients with diabetic
kidney disease in the United States.
In the United States, over 80% of
our $4.5 trillion national healthcare budget is spent on chronic
disease. Yet the U.S. has one of the
poorest life-expectancies in the developed world - a U.S. male can
expect to live 10 years less than in Japan or Switzerland. Chronic
kidney disease, the third fastest-growing cause of death globally,
is one of the principal drivers of this unsustainable
dynamic.
The great news is that new drug
therapies such as SGLT2 inhibitors and GLP1 agonists are now
available for individuals with diabetes and kidney disease and have
dramatically changed the game. However, we simply cannot afford to
blanket prescribe these expensive drugs across such large
populations at costs approaching $30,000 per year for
life.1
kidneyintelX.dkd opens the door
to heavily vetted prognostic risk assessment to front-line doctors
making critical choices during the short patient visit times
allotted. Indeed, world experts, including in the 2024
clinical guidelines2, are now strongly advocating
prognosis to enable a personalized approach
to treatment and patient identification. And to put this in
perspective, kidneyintelX.dkd prognosis can be
executed for less than one month's worth of drug therapy
cost.
After a multi-year process, the
decision in May 2024 by Medicare contractor National Government
Services to provide full coverage for kidneyintelX.dkd at $950 per
reportable result, is now allowing for settlement of billed tests
in under 30 days and an increase to our realized average sales
price. Achieving Medicare insurance coverage represents a key
commercial milestone given that Medicare and its related insurance
plans make up the majority of our addressable patient market in the
United States.
We are continuing to perfect the
commercial implementation of kidneyintelX.dkd into doctor practice
groups using the electronic medical record system to automatically
identify eligible patients for testing, accompanied by a doctor
best practice alert. Our sales team is now able to walk into this
message-integrated environment with doctors already alerted to
at-risk patients with the actionable benefits of kidneyintelX.dkd. We are seeing the
benefits of this integrated approach to order generation this
quarter and expect to leverage this model with additional large
group practices in calendar 2025.
The
Environment is Heating Up for kidneyintelX.dkd
Chronic disease and preventative
medicine are now taking center stage with regard to policy on both
sides of the Atlantic to address unsustainable healthcare
costs.
The return of a Trump Administration
has already brought the discussion on chronic disease management
policy to the forefront. U.S. Health and Human Services Secretary
nominee Robert Kennedy has pledged to "end the chronic disease
epidemic in the country". The KidneyIntelX prognostic program
benefited greatly from the previous Trump Administration's chronic
disease regulatory and insurance policy environment. We also note a
parallel policy discussion emerging in the United Kingdom with
Health Secretary, Wes Streeting's chronic disease platform for
revival of NHS. Law makers on both sides of the Atlantic have woken
to the fact that without controlling chronic disease, of which
kidney disease is a large component, there will be no taming health
care budgets. We would expect kidneyintelX.dkd, to have renewed
opportunities to support both governments' preventative medicine
goals.
Also, of strategic importance to the
kidneyintelX.dkd top line
was New York Governor Kathy Hochul's signing into law of Senate
Bill1196a/Assembly Bill 1673a (
https://www.governor.ny.gov/news/governor-hochul-takes-action-protect-public-health-signs-legislative-package-support-patients)
which requires all insurance companies, including state Medicaid,
to cover comprehensive diagnostic biomarker testing for patients
beginning January 1st, 2025. While we will remain
cautious about actual government implementation dates, this type of
legislation has received broad bi-partisan support and can have a
significant positive impact on kidneyintelX.dkd adoption, average
testing sales price and revenue recognition. Other states in our
commercial focus are also in process of enacting similar
legislation and we will provide updates as they become
available.
Reorganized for Expense Reduction and Commercial
Execution
In Fiscal year 2024, we completed a
substantial reorganization of our business and raised enough money
to secure the run through profitability. Our execution was painful,
wholly necessary and only available to us now that we have achieved
the regulatory, outcomes data and reimbursement trifecta. The
Company is now devoting the significant majority of resources to
our sales program with much less cash required to operate. Two big
moves below have allowed us to target a
cash burn rate of £560,000 or less per month by the end of FY25
(June).
·
Debt and Payables
Reduction
Post year end, we have successfully
renegotiated the terms of our £8.7 million amortizing senior
convertible loan notes. We have improved our accounts payable
situation and negotiated with other accounts payable creditors to
reduce or write-off their balances. The various actions that we've
taken will substantially reduce the Company's monthly cash burn and
we estimate that this will remove more than 80% of the total
forecasted cash obligations of the Company over the next three
years (approximately £485,000 per month).
·
Transfer of U.S.
Trading to OTCQB and Re-qualification of Foreign Private Issuer
Status
Having considered the benefits
versus the costs of maintaining the Nasdaq listing, we have decided
to transition U.S. trading of our ADS securities to the
OTCQB ® Venture Market, which is operated by OTC Markets Group,
from the NASDAQ Global Market on October 7th. In
addition, at our next testing date for Foreign Private Issuer
("FPI") status, the Company expects to qualify as an FPI. We
anticipate that transferring the trading to OTCQB and
re-acquisition of FPI status will provide significant savings of up
to £1.9 million p.a.
Financing
Post year end, the Company raised an
additional £11.8 million with strong institutional demand that
exceeded our initial funding target. Inside management was an
important investment player, and we received long-term cornerstones
from both large UK and US institutions.
Board changes
It is with great pleasure that
Renalytix has secured Julian Baines MBE as our new Executive
Chairman. Julian was formerly the Non-Executive Chairman of
Renalytix from March 2018 to June 2020. I am also delighted
Christopher Mills, our long-serving Chairman will continue on the
Board as a Non-Executive Director of the Company.
Thank you for your continued
confidence.
James McCullough, Chief
Executive Officer
Notes
1Clinical practice is moving
towards the "four pillars" of diabetic kidney disease therapeutic
management which includes combination use of ACEi/ARB, SGLT2
inhibitors, Finerenone and GLP1 RAs. Estimated costs of SGLT2
Inhibitors, Finerenone and GLP1 RA are $12k, $7.9K and $11.6K
annually.
2https://kdigo.org/wp-content/uploads/2024/03/KDIGO-2024-CKD-Guideline.pdf
Financial Review
The results presented cover FY24.
The presentational currency for Renalytix plc and its subsidiaries
(together, the "Group") is the United States Dollar.
INCOME STATEMENT
Revenue
The Group recognized a total of $2.3
million in revenue in the financial year ended 30 June 2024
("FY24") (financial year ended 30 June 2023 ("FY23"): $3.4 million)
which was comprised of $2.15 million in revenue related to testing
services (FY23: $3.12 million) as well as $0.14 million
related to pharmaceutical services revenue (FY23: $0.28
million).
Cost of sales
The cost of sales associated with
the services performed and commercial testing revenue was $2.1
million for FY24 (FY23: $2.7 million).
Administrative costs
During FY24, administrative expenses
totaled $30.7 million (FY23: $43.1 million). The major items of
expenditure were general and administrative costs which included
$12.1 million in employee-related costs (FY23: $21 million), $7.1
million in subcontractors, legal, accounting, and other
professional fees (FY23: $5.9 million), $5.1 million in external
R&D Services, lab supplies and lab services (FY23: $8.0
million), $1.4 million in insurance (FY23: $2.7 million), $2
million in depreciation and amortisation (FY23: $2.1 million), $0.7
million in marketing and public relations (FY23: $1.3 million),
$1.1 million in IT related costs (FY23: $1.3million), $0.5 million
in office related expenses including rent (FY23: $0.4 million),
$0.2 million in stock exchange listing and filing fees (FY23: $0.1
million) and $0.5 million in other expenses (FY23: $0.3
million).
Gain (loss) on financial assets at fair value through profit
or loss
The Group accounts for the
investment in Verici Dx plc ("Verici Dx") equity securities at fair
value, with changes in fair value recognized in the income
statement. During the year ended 30 June 2024, we recorded a loss
of $0.5 million to adjust the Verici Dx investment to fair value.
During the year ended 30 June 2023, we recorded a loss of $1.3
million to adjust the Verici Dx investment to fair
value.
Fair value adjustment of convertible debt
We elected to account for the
convertible notes at fair value with qualifying changes in fair
value recognized through the income statement 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 2024, we recorded a loss of $3.8 million to
adjust the convertible notes to fair value. For the year ended 30
June 2023, we recorded a loss of $3.1 million to adjust the
convertible notes to fair value.
Finance income (expense)
During the year ended 30 June 2024,
we recognized a gain of $0.2 million, which was comprised of
$0.2 million of grant income, $0.2 million
interest income earned on our cash deposits, and offset by $0.5
million of foreign exchange losses and $0.1 million of realized
loss on the sale of Verici Dx shares. During the year ended 30 June
2023, we recognized a gain of $0.5 million, which was comprised of
$0.2 million of income related to the dissolution of Kantaro, $0.3
million of income for refunds from Citibank, $0.1 million interest
income earned on our cash deposits, and offset by $0.1 million of
foreign exchange losses.
BALANCE SHEET
Inventory
Inventory consists of consumable
materials used by the labs to carry out KidneyIntelX tests. Inventory on hand
at 30 June 2024 totaled $0.3 million (FY23: $0.7
million).
Fixed Assets
Property, plant, and equipment
consists of laboratory equipment being used to support testing and
product development activities. At 30 June 2024, the group held
$0.2 million in net property, plant, and equipment (FY23: $1.0
million).
Intangible assets
The Group held Nil net book value of
intangible assets at 30 June 2024 (FY23: $12.5 million). The Group
has fully impaired its intangible assets. The intangible assets
were made up of payments to Mount Sinai for license fees, patent
costs for the intellectual property underlying KidneyIntelX, as well as amounts
capitalized as development costs. Intangible assets also included
the value of the biomarker business purchased (in exchange for
ordinary shares in the Company) from EKF Diagnostics Holdings plc.
In addition to impairment charges the intangible assets decreased
over the year due to amortization and the impact of foreign
exchange translation at year end.
Investment in Verici Dx
At the end of FY24 the group held
8,831,682 shares in Verici Dx, the fair value of the investment in
Verici Dx was $0.7 million at 30 June 2024 (FY23: $1.5
million).
Convertible Note
In April 2022, the Company issued
amortising senior convertible bonds with a principal amount of
$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. As at
30 June 2024, the Bonds had a fair value of $8.5 million. At 30
June 2023, the Bonds had a fair value of $11.9 million. Post year
end, the convertible note has been restructured with approximately
$3.96 million converted to equity through the issuance of
33,000,000 ordinary shares at 9 pence per share and the balance
restructured as a new unsecured convertible bond. The new
convertible bond will accrue interest at a rate of 5.5 per cent.
per annum, if paid in cash, or 7.5 per cent. per annum, if rolled
into the principal amount of the bond, at the discretion of the
Company. The New Convertible Bond will have a maturity date of 31
July 2029 and may not be converted before 1 April 2026 except in
the event that the Company undertakes a further qualifying equity
issuance in the future, in which case the New Convertible Bond may
be converted at the placing price thereunder. The New Convertible
Bond is callable by the Company at any time prior to
maturity.
Cash
The Group had cash on hand of $4.7
million (FY23: $24.7 million). Cash and equivalents are held in
several deposit accounts in the US ($2.4 million), UK ($2.1
million) and IRE ($0.1 million).
Consolidated Income
Statement
FOR THE YEAR ENDED 30 JUNE 2024
|
|
|
2024
|
|
2023
|
|
|
|
$'000
|
|
$'000
|
|
Continuing Operations
|
|
|
|
|
|
Revenue
|
|
|
2,289
|
|
|
3,403
|
|
Cost of Sales
|
|
|
(2,076)
|
|
|
(2,702)
|
|
Gross profit
|
|
|
213
|
|
|
701
|
|
Administrative expenses
|
|
|
(30,733)
|
|
|
(43,056)
|
|
Operating loss
|
|
|
(30,520)
|
|
|
(42,355)
|
|
Share of Net loss in Associate
accounted for using the equity method
|
|
|
-
|
|
|
(9)
|
|
Impairment of Intangibles
|
|
|
(10,472)
|
|
|
-
|
|
Gain (loss) on financial assets at
fair value through profit or loss
|
|
|
(505)
|
|
|
(1,273)
|
|
Fair value adjustment of convertible
debt
|
|
|
(3,750)
|
|
|
(3,093)
|
|
Finance (expenses) / income -
net
|
|
|
(223)
|
|
|
509
|
|
Loss before tax
|
|
|
(45,470)
|
|
|
(46,221)
|
|
Taxation
|
|
|
-
|
|
|
(2)
|
|
Loss for the Year
|
|
|
(45,470)
|
|
|
(46,223)
|
|
Earnings per Ordinary share
|
|
|
|
|
|
Basic
|
|
$
|
(0.42)
|
|
$
|
(0.56)
|
|
Diluted
|
|
$
|
(0.42)
|
|
$
|
(0.56)
|
Consolidated Statement of
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE
2024
|
|
|
2024
|
|
2023
|
|
|
|
$'000
|
|
$'000
|
|
Loss for the year
|
|
|
(45,470)
|
|
|
(46,223)
|
|
Other comprehensive income:
|
|
|
|
|
|
Items that may be subsequently reclassified to profit or
loss
|
|
|
|
|
|
Changes in the fair value of the
convertible notes
|
|
|
306
|
|
|
719
|
|
Currency translation
differences
|
|
|
(270)
|
|
|
(337)
|
|
Other comprehensive income for the year
|
|
|
36
|
|
|
382
|
|
Total comprehensive loss for the year
|
|
|
(45,434)
|
|
|
(45,841)
|
Consolidated Statements of
Financial Position
AS AT 30 JUNE 2024
|
|
|
2024
|
|
2023
|
|
|
|
|
$'000
|
|
$'000
|
|
|
Assets
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
213
|
|
|
1,027
|
|
|
Right of use asset
|
|
|
-
|
|
|
194
|
|
|
Intangible assets
|
|
|
-
|
|
|
12,511
|
|
|
Other long term assets
|
|
|
71
|
|
|
51
|
|
|
Total non-current assets
|
|
|
284
|
|
|
13,783
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Inventory
|
|
271
|
|
718
|
|
|
Security Deposits
|
|
|
77
|
|
|
132
|
|
|
Financial asset at fair value
through profit or loss
|
|
|
698
|
|
|
1,460
|
|
|
Trade and other
receivables
|
|
|
722
|
|
|
776
|
|
|
Prepaid and other current
assets
|
|
|
364
|
|
|
566
|
|
|
Cash and cash equivalents
|
|
|
4,680
|
|
|
24,682
|
|
|
Total current assets
|
|
|
6,812
|
|
|
28,334
|
|
|
Total assets
|
|
|
7,096
|
|
|
42,117
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the parent
|
|
|
|
|
|
|
Share capital
|
|
|
491
|
|
|
299
|
|
|
Share premium
|
|
|
121,813
|
|
|
104,953
|
|
|
Share-based payment
reserve
|
|
|
14,452
|
|
|
13,513
|
|
|
Accumulated other comprehensive
income
|
|
|
(1,086)
|
|
|
(1,127)
|
|
|
Retained
earnings/(deficit)
|
|
|
(144,654)
|
|
|
(99,184
|
|
|
Total (liability)/equity
|
|
|
(8,984)
|
|
|
18,454
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Trade and other payables
|
|
|
7,544
|
|
|
11,513
|
|
|
Current lease liabilities
|
|
|
46
|
|
|
156
|
|
|
Note payable current
|
|
|
4,159
|
|
|
4,463
|
|
|
Total current liabilities
|
|
|
11,749
|
|
|
16,132
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Note payable non-current
|
|
4,331
|
|
7,485
|
|
|
Non-current lease
liabilities
|
|
|
-
|
|
|
46
|
|
|
Total non-current liabilities
|
|
|
4,331
|
|
|
7,531
|
|
|
Total liabilities
|
|
|
16,080
|
|
|
23,663
|
|
|
Total equity and liabilities
|
|
|
7,096
|
|
|
42,117
|
|
Consolidated and Company's
Statements of Cash Flows
FOR
THE YEAR ENDED 30 JUNE 2024
|
|
|
2024
|
|
2023
|
|
|
|
$'000
|
|
$'000
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Loss before income tax
|
|
|
(45,470)
|
|
|
(46,221)
|
|
Adjustments for
|
|
|
|
|
|
Depreciation
|
|
|
184
|
|
|
341
|
|
Amortisation
|
|
|
2,255
|
|
|
2,151
|
|
Impairment of assets
|
|
|
10,472
|
|
|
-
|
|
Impairment of property and
equipment
|
|
|
631
|
|
|
-
|
|
Share-based payments
|
|
|
1,083
|
|
|
1,560
|
|
Share of net loss of
associate
|
|
|
-
|
|
|
9
|
|
Reversal of Kantaro
Liability
|
|
|
-
|
|
|
(55)
|
|
Unrealized loss on financial asset
at fair value through profit or loss
|
|
|
505
|
|
|
1,273
|
|
Realized loss on sale of ordinary
shares in Verici Dx
|
|
|
136
|
|
|
-
|
|
Fair value adjustment of convertible
debt
|
|
|
3,750
|
|
|
3,093
|
|
Foreign Exchange gain
|
|
|
(165)
|
|
|
(1,008)
|
|
Changes in working
capital
|
|
|
|
|
|
Trade and other
receivables
|
|
|
54
|
|
|
125
|
|
Prepaid assets and other current
assets
|
|
|
202
|
|
|
1,298
|
|
Related party receivable
|
|
|
55
|
|
|
75
|
|
Inventory
|
|
|
447
|
|
|
442
|
|
Security Deposits
|
|
|
-
|
|
|
141
|
|
Trade and other payables
|
|
|
(3,969)
|
|
|
4,148
|
|
Deferred Revenue
|
|
|
-
|
|
|
(46)
|
|
Net
cash used in operating activities
|
|
|
(29,830)
|
|
|
(32,674)
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Proceeds from sale of
investments
|
|
|
117
|
|
|
-
|
|
Investment in Renalytix
Inc
|
|
|
-
|
|
|
-
|
|
Net
cash generated by investing activities
|
|
|
117
|
|
|
-
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Repayment of convertible
notes
|
|
|
(1,660)
|
|
|
(4,288)
|
|
Issue of shares (net of issue
costs)
|
|
|
11,817
|
|
|
19,306
|
|
Proceeds from the issuance of
ordinary shares under employee share purchase plan
|
|
|
93
|
|
|
261
|
|
Lease payments
|
|
|
(156)
|
|
|
(160)
|
|
Net
cash generated from financing activities
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents
|
|
|
(19,619)
|
|
|
(17,555)
|
|
Cash and cash equivalents at
beginning of period
|
|
|
24,682
|
|
|
41,333
|
|
Effect of exchange rate changes on
cash
|
|
|
(383)
|
|
|
904
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
|
|
Consolidated Statement of Changes
in Equity
FOR
THE YEAR ENDED 30 JUNE 2024
|
|
|
|
|
|
|
Share-based
|
Accumulated
other
|
|
|
|
|
|
|
|
|
Share
Capital
|
|
Share
Premium
|
|
payment
reserve
|
comprehensive
income
|
|
Retained
deficit
|
|
Total
Equity
|
|
|
|
|
$'000
|
|
$'000
|
|
$'000
|
$'000
|
|
$'000
|
|
$'000
|
|
|
At
30 June 2022
|
|
241
|
|
85,444
|
|
11,954
|
(1,509)
|
|
(52,961)
|
|
43,169
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
|
-
|
|
-
|
|
-
|
-
|
|
(46,223)
|
|
(46,223)
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of convertible
notes
|
|
-
|
|
-
|
|
-
|
719
|
|
-
|
|
719
|
|
|
Currency translation
differences
|
|
|
|
-
|
|
-
|
(337)
|
|
-
|
|
(337)
|
|
|
Total comprehensive income
|
|
-
|
|
-
|
|
-
|
382
|
|
(46,22)
|
|
(45,841)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with Owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
|
-
|
|
-
|
|
1,559
|
-
|
|
-
|
|
1,559
|
|
|
Shares issues under ESPP
|
|
1
|
|
260
|
|
-
|
-
|
|
-
|
|
261
|
|
|
Shares issued under Securities
Purchase Agreement
|
|
57
|
|
20,240
|
|
-
|
-
|
|
-
|
|
20,297
|
|
|
Less issue costs
|
|
-
|
|
(991)
|
|
-
|
-
|
|
-
|
|
(991)
|
|
|
Total transactions with owners of the parent, recognized
directly in equity
|
|
58
|
|
19,509
|
|
1,559
|
-
|
|
-
|
|
21,126
|
|
|
At
30 June 2023
|
|
299
|
|
104,953
|
|
13,513
|
(1,127)
|
|
(99,184)
|
|
18,454
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
|
-
|
|
|
|
-
|
-
|
|
(45,470)
|
|
(45,470)
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of convertible
notes
|
|
-
|
|
|
|
-
|
306
|
|
-
|
|
306
|
|
|
Currency translation
differences
|
|
-
|
|
(5)
|
|
-
|
(265)
|
|
-
|
|
(270)
|
|
|
Total comprehensive income
|
|
-
|
|
(5)
|
|
-
|
41
|
|
(45,470)
|
|
(45,434)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with Owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
|
-
|
|
|
|
1,083
|
-
|
|
-
|
|
1,083
|
|
|
Shares issues under ESPP
|
|
-
|
|
93
|
|
-
|
-
|
|
-
|
|
93
|
|
|
Shares issued for repayment of
convertible bond
|
|
30
|
|
4,978
|
|
-
|
-
|
|
-
|
|
5,008
|
|
|
Vesting of RSUs
|
|
1
|
|
138
|
|
(144)
|
|
|
|
|
(5)
|
|
|
Shares issued under Securities
Purchase Agreement
|
|
161
|
|
13,372
|
|
-
|
-
|
|
-
|
|
13,533
|
|
|
Less issue costs
|
|
|
|
(1,716)
|
|
-
|
-
|
|
-
|
|
(1,716
|
|
|
Total transactions with owners of the parent, recognized
directly in equity
|
|
192
|
|
16,865
|
|
939
|
-
|
|
-
|
|
17,996
|
|
|
At
30 June 2024
|
|
491
|
|
121,813
|
|
14,452
|
(1,086)
|
|
(144,654)
|
|
(8,984)
|
|
Notes to 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 2 Leman
Street, London, United Kingdom, E1W 9US. 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 and 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.
3.
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies
applied in the preparation of these financial statements are set
out below.
Going concern
The Group and Company fund their
day-to-day working capital needs through existing cash reserves.
The Directors have evaluated the use of the going concern basis in
preparing these financial statements.
The Group has historically
experienced recurring losses and negative cash flows. Despite this,
significant strides have been made in the commercialisation of
kidneyintelX.dkd, and
business objectives have been realigned for sharper focus. For the
year ending 30 June 2024, the Group recorded a loss of $45.5
million, with cash reserves of $4.7 million at year-end.
Substantial steps have been taken to refine the Company's
commercial strategy to achieve consistent, scalable results in the
coming periods. Key actions taken include:
|
●
|
Cost reductions:
During the year, the Company significantly reduced
its cost base, halving employee numbers from over 80 to around 40
post-year-end, and cutting legal, professional, R&D expenses
and other expenses which are not necessary at this stage of the
business. In Q1 2025 (quarter ending September 2024), operating
expenses were 4.2 million, down over 50% from $8.8 million in Q1
2024 (quarter ending September 2023). The Group projects operating
expenses for FY 2025 to be significantly lower than FY 2024's total
of $30.7 million.
|
|
●
|
Fundraising: A post-year-end
fundraising in November 2024 raised approximately $14.9 million
after expenses and substantially restructured the outstanding
liabilities on the financial position. Approximately $3.9 million
in convertible notes was converted to equity along with a $750K
liability converted to a mix of equity and five year long
non-amortizing loan. Additionally, the remaining balance of
the convertible note was converted to an interest-only
non-amortizing loan due July 2029 with interest fixed at 5.5% p.a.
if paid in cash or 7.5% p.a. if rolled into the balance of the
loan.
|
|
●
|
Commercial Growth: Recent
initiatives to expand kidneyintelX.dkd include the rollout
of commercial testing with a new health system, Advantage Care
Physicians (ACPNY"), with test ordering and processing having
commenced in September 2024. Additionally, a significant
expansion in patient blood draw options, a simplified test order
requisition form to reduce doctor workload, and improvements in
customer service and test services billing all offer an improved
end-to-end user experience which the Company believes will support
continued test volume growth.
|
Despite these measures, historical
losses and ongoing cash needs pose a challenge to the Group's going
concern status. The Directors recognize that continued operation
may require additional capital to fund operations, support
commercial growth, and develop new products. Although there are no
immediate plans for further funding via equity or debt, the Group
aims to build investor confidence through effective use of the
current fundraising and strategic initiatives over the next 12
months.
The Company has incurred recurring
losses and negative cash flows from operations since inception and
had an accumulated deficit in retained earnings of $145.5 million
as of 30 June 2024. The Company anticipates incurring additional
losses until such time, if ever, that it can generate significant
sales of kidneyIntelX.dkd
or KidneyIntelX technology
services income.
The Company's ability to continue as
a going concern is contingent upon successful execution of
management's intended plan over the next 24 months to improve the
Company's liquidity and profitability, which includes, without
limitation:
|
●
|
The achievement of certain testing
volumes in the lab;
|
|
●
|
Continued expansion of reimbursement
policies and contracts with commercial payers; and
|
|
●
|
Continued management of operating
and commercial expenses.
|
As a result of the Company's losses
and its projected cash needs, along with the limited recent history
of test order volume increases, as defined in the accounting
literature, substantial doubt exists about the Company's ability to
continue as a going concern. Subsequent to 30 September 2024, the
Company has successfully raised approximately $14.9 million in new
equity capital and restructured the existing long-term debt
recorded on the Balance Sheet. However, the Company does have
a history of operating losses and it has been expensive to deliver
all of the milestones to commercialize the kidneyintelX.dkd test. Should the
company require additional capital it may not be available on
acceptable terms, or at all, and the Company may not be able to
enter into strategic alliances or other arrangements on favorable
terms, or at all. The terms of any future financing may adversely
affect the holdings or the rights of the Company's shareholders.
Should it be necessary, if the Company is unable to obtain funding
it could be required to delay, curtail or discontinue research and
development programs, product portfolio expansion or future
commercialization efforts, which could adversely affect its
business prospects. As such, management has concluded that
there is a going concern uncertainty. The consolidated
financial statements do not include any adjustments that may result
from the outcome of this going concern uncertainty.
Basis of consolidation
The 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.
All intra-group balances and
transactions, including any unrealized income and expense arising
from intra-group transactions, are eliminated in full in preparing
the consolidated financial statements. Unrealized gains arising
from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group's interest in the
investee. Unrealized losses are eliminated in the same way as
unrealized gains, but only to the extent that there is no evidence
of impairment
Intangible assets
(a) Trademarks, trade names and
licenses
Separately 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 amortisation.
Amortisation 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
secrets
Development costs have a finite
useful life and are carried at cost less accumulated
amortisation.
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 amortised over
the estimated useful life of the products with which they are
associated. amortisation commences when a new product is in
commercial production. The amortisation 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. Amortisation 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
amortisation. amortisation has not yet commenced.
Impairment of non-financial
assets
Assets that have an indefinite life
or where amortisation has not yet commenced are tested annually for
impairment. Assets that are subject to amortisation 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.
Revenue Recognition
The 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
revenue recognition will be assessed under IFRS 15 - Revenue from
Contracts with Customers, to establish the principal and agent in
the relationship between the parties and with the end
customer.
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.
4.
INCOME TAX
|
|
|
2024
|
|
2023
|
|
Group
|
|
$'000
|
|
$'000
|
|
Deferred tax
|
|
|
-
|
|
|
-
|
|
Total deferred tax
|
|
|
-
|
|
|
-
|
|
Income tax
(charge)/credit
|
|
|
-
|
|
|
-
|
No deferred asset is calculated on
losses in FY24 as the probability of future utilization is
considered too remote.
Factors affecting the future
tax charge
The standard rate of corporation tax
in the UK is 25%.
|
|
|
2024
|
|
2023
|
|
|
|
$'000
|
|
$'000
|
|
Loss before tax
|
|
|
45,470
|
|
|
46,221
|
|
Tax Calculated at domestic tax rates
applicable to the UK Standard of tax at 25% (2023: 25%)
|
|
|
11,368
|
|
|
11,555
|
|
Tax effects of:
|
|
|
|
|
|
Expenses
not deductible for tax purposes
|
|
|
(363)
|
|
|
(872)
|
|
Losses on
which no deferred tax asset is recognized
|
|
|
(94)
|
|
|
(85)
|
|
Tax credit for the year
|
|
|
10,911
|
|
|
10,598
|
|
Current Year Valuation
Allowance
|
|
|
(10,911)
|
|
|
(10,598)
|
|
Prior year deferred tax
asset
|
|
|
-
|
|
|
-
|
|
Reversal of tax asset at 30
June
|
|
|
-
|
|
|
-
|
|
Tax expense
|
|
|
-
|
|
|
(2)
|
|
Total Income Tax
(Expense)/Credit
|
|
|
-
|
|
|
(2)
|
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 a full valuation allowance. No
deferred asset is calculated on losses in the UK totaling
$154,825,000 where the probability of future utilization is
considered too remote.
5.
NET LOSS PER SHARE
Basic net loss per ordinary share is
computed by dividing net loss by the weighted average number of
ordinary shares outstanding during each period. Diluted net loss
per ordinary share includes the effect, if any, from the potential
exercise or conversion of securities, such as options which would
result in the issuance of incremental ordinary shares. Potentially
dilutive securities outstanding as of 30 June 2024 have been
excluded from the computation of diluted weighted average shares
outstanding as they would be anti-dilutive. Therefore, the weighted
average number of shares used to calculate both basic and diluted
net loss per share are the same.
The following is a reconciliation of
basic net loss per share to diluted net loss per share for the
fiscal years ended June 30, 2024, and 2023.
|
|
|
2024
|
|
|
2023
|
|
|
Basic earnings per share
|
|
$
|
(0.42
|
)
|
|
$
|
(0.56
|
)
|
|
Average shares outstanding -
basic
|
|
|
108,179,366
|
|
|
|
82,210,050
|
|
|
Convertible debt shares
|
|
|
-
|
|
|
|
-
|
|
|
Adjusted average shares outstanding
- diluted
|
|
|
108,179,366
|
|
|
|
82,210,050
|
|
|
Diluted earnings per
share
|
|
$
|
(0.42
|
)
|
|
$
|
(0.56
|
)
|
The following potentially dilutive
securities have been excluded from the computation of diluted
weighted-average shares of ordinary shares outstanding as they
would be anti-dilutive:
|
|
|
2024
|
|
|
2023
|
|
|
Stock options to purchase ordinary
shares
|
|
|
7,473,866
|
|
|
|
4,968,576
|
|
|
Restricted stock units
|
|
|
7,930
|
|
|
|
40,340
|
|
|
Conversion of convertible
note
|
|
|
3,264,719
|
|
|
|
5,441,199
|
|
|
|
|
|
|
|
|
|
10,450,115
|
|
6.
INTANGIBLE ASSETS
|
Group
|
|
Trademarks, Trade Names &
Licenses
|
|
Trade
Secrets
|
|
Development
Costs
|
|
|
Total
|
|
|
|
$'000
|
|
$'000
|
|
$'000
|
|
|
$'000
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
At 1 July 2022
|
|
|
9,279
|
|
|
6,275
|
|
|
4,055
|
|
|
|
19,609
|
|
Additions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
Foreign translation
|
|
|
381
|
|
|
258
|
|
|
144
|
|
|
|
783
|
|
At
30 June 2023
|
|
|
9,660
|
|
|
6,533
|
|
|
4,199
|
|
|
|
20,392
|
|
Amortisation
|
|
|
|
|
|
|
|
|
|
|
At 1 July 2022
|
|
|
3,789
|
|
|
1,098
|
|
|
702
|
|
|
|
5,589
|
|
Charge for the year
|
|
|
922
|
|
|
624
|
|
|
432
|
|
|
|
1,978
|
|
Foreign Translation
|
|
|
199
|
|
|
75
|
|
|
40
|
|
|
|
314
|
|
At
30 June 2023
|
|
|
4,910
|
|
|
1,797
|
|
|
1,174
|
|
|
|
7,881
|
|
Net
book value
|
|
|
|
|
|
|
|
|
|
|
At
30 June 2023
|
|
|
4,750
|
|
|
4,736
|
|
|
3,025
|
|
|
|
12,511
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
At 1 July 2023
|
|
|
9,660
|
|
|
6,533
|
|
|
4,199
|
|
|
|
20,392
|
|
Additions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
Impairment
|
|
|
(9,687)
|
|
|
(6,551)
|
|
|
(4,209)
|
|
|
|
(20,447)
|
|
Foreign translation
|
|
|
27
|
|
|
18
|
|
|
10
|
|
|
|
55
|
|
At
30 June 2024
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
Amortisation
|
|
|
|
|
|
|
|
|
|
|
At 1 July 2023
|
|
|
4,910
|
|
|
1,797
|
|
|
1,174
|
|
|
|
7,881
|
|
Charge for the year
|
|
|
963
|
|
|
651
|
|
|
447
|
|
|
|
2,061
|
|
Impairment
|
|
|
(5,892)
|
|
|
(2,457)
|
|
|
(1,626)
|
|
|
|
(9,975)
|
|
Foreign Translation
|
|
|
19
|
|
|
9
|
|
|
5
|
|
|
|
33
|
|
At
30 June 2024
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
Net
book value
|
|
|
|
|
|
|
|
|
|
|
At
30 June 2024
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
7.
SUBSEQUENT EVENTS
On July 15, 2024, the Company
announced the repayment of $1.06 million of the principal amount of
the Company's convertible bond and the interest for the period
through the issuance of 2,275,000 Ordinary Shares and 4,641,161
American Depositary Shares ("ADSs"). 11,557,322 new ordinary shares
of £0.0025 each in the capital of the Company will be issued to
settle including conversion of 4,641,161 ADSs (9,282,322 Ordinary
Shares with each ADS representing two Ordinary Shares). After
settlement of the repayment, the principal remaining under the
convertible bond will be reduced by $1.06 million to $11.66
million.
On 30 September 2024 the company
announced that it had received commitments from existing and new
investors to raise £11.9m through a subscription of 128,738,833 new
ordinary shares at 9 pence per share. The company also issued
36,541,666 new ordinary shares at 9 pence per share to convert part
of the existing Convertible Debt to equity and convert part of the
accounts payable balance to equity. In respect to the convertible
bond the company successfully converted £2.97m of the bond to
equity via the issue of 33 million new ordinary shares and the
remaining balance treated as new unsecured convertible bonds with
interest at a rate of 5.5% per annum if paid in cash, or 7.5% per
annum if rolled into the principal amount of the debt, at the
discretion of the company. The new convertible bond will be
non-amortizing, have a maturity date of 31 July 2029 and may not be
converted before 1 April 2026. The bonds are callable at the
Company's option at any time prior to maturity. In respect to
the accounts payable balance with a professional adviser, $750,000
has been restructured such that $425,000 of the balance has been
converted into equity and $325,000 has been restructured as a long
term promissory note, bearing paid-in-kind interest at 5% per
annum. The new note will be due at the earlier of 5 years
from the initiation of the note, or accelerated should the Company
be acquired prior to maturity. The Company may prepay the
note at any time without penalty. The equity financing
commitments closed in two tranches, the first on October 8, 2024,
and the second on November 4, 2024, with all net proceeds received
by the company on the closing dates. All debt restructurings
were effective with the second close of the equity
financing.
8.
RECONCILIATION OF IFRS TO US GAAP
Since Renalytix's 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 10-K, which is based
on US GAAP, contains differences from its Annual Report, which is
based on IFRS.
The Form 10-K and Annual Report are
available on the Company's website (www.renalytix.com). 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
|
|
|
GAAP
|
|
|
IFRS
|
|
|
GAAP vs
IFRS
|
|
|
|
|
|
|
As at 30 June
2024
|
|
|
As at 30 June
2024
|
|
|
Difference
|
|
|
|
|
|
|
$'000
|
|
|
$'000
|
|
|
$'000
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
4,680
|
|
|
|
4,680
|
|
|
|
-
|
|
|
|
|
Accounts receivable
|
|
|
722
|
|
|
|
722
|
|
|
|
-
|
|
|
|
|
Prepaid expenses and other current
assets
|
|
|
716
|
|
|
|
712
|
|
|
|
4
|
|
|
(a)
|
|
Property, plant and equipment,
net
|
|
|
216
|
|
|
|
213
|
|
|
|
3
|
|
|
(a)
|
|
Intangibles, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(b)
|
|
Investment in Verici Dx
|
|
|
698
|
|
|
|
698
|
|
|
|
-
|
|
|
|
|
Other assets
|
|
|
940
|
|
|
|
71
|
|
|
|
869
|
|
|
(c)
|
|
Total assets
|
|
|
7,972
|
|
|
|
7,096
|
|
|
|
876
|
|
|
|
|
Liabilities and stockholder's equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Note payable - current
|
|
|
4,159
|
|
|
|
4,159
|
|
|
|
-
|
|
|
|
|
Accounts payable
|
|
|
2,608
|
|
|
|
7,544
|
|
|
|
4,936
|
|
|
(d)
|
|
Accrued expenses and other current
liabilities
|
|
|
3,354
|
|
|
|
-
|
|
|
|
(3,354
|
)
|
|
(d)
|
|
Accrued expenses - related
party
|
|
|
1,329
|
|
|
|
-
|
|
|
|
(1,329
|
)
|
|
(d)
|
|
Current lease liability
|
|
|
45
|
|
|
|
46
|
|
|
|
1
|
|
|
(e)
|
|
Note payable - non
current
|
|
|
4,331
|
|
|
|
4,331
|
|
|
|
-
|
|
|
|
|
Noncurrent lease
liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Total Liabilities
|
|
|
15,826
|
|
|
|
16,080
|
|
|
|
254
|
|
|
|
|
Stockholders' (deficit) equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares, £0.0025 par value
per share: 161,944,807 shares
authorized; 154,368,191 and 93,781,478 shares issued
and
outstanding at June 30, 2024 and June 30, 2023,
respectively
|
|
|
478
|
|
|
|
491
|
|
|
|
13
|
|
|
(e)
|
|
Additional paid in
capital
|
|
|
204,893
|
|
|
|
136,265
|
|
|
|
(68,628
|
)
|
|
(f)
|
|
Accumulated other comprehensive
(loss) income
|
|
|
(1,443
|
)
|
|
|
(1,086
|
)
|
|
|
357
|
|
|
(g)
|
|
Accumulated deficit
|
|
|
(211,782
|
)
|
|
|
(144,654
|
)
|
|
|
67,128
|
|
|
(h)
|
|
Total stockholders' (deficit) equity
|
|
|
(7,854
|
)
|
|
|
(8,984
|
)
|
|
|
(1,130
|
)
|
|
|
|
Total liabilities and stockholders' (deficit)
equity
|
|
|
7,972
|
|
|
|
7,096
|
|
|
|
(876
|
)
|
|
|
a. Represents
other immaterial presentation differences between US GAAP &
IFRS
b. 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.
c.
Difference is attributable to capitalized software costs which are
recorded as other assets under U.S. GAAP and Intangibles under
IFRS.
d. Accounts
payable and other current liabilities are presented in the
aggregate within the Annual report while broken out separately on
the US GAAP 10-K. Difference represents other immaterial
presentation differences and audit adjustments.
e. Represents
other immaterial audit adjustments.
f.
Represents cancellation of share premium account and reduction in
accumulated deficit under IFRS in anticipation of a distribution of
Fractal Dx net assets to the shareholders of Verici Dx 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.
g. Represents the
difference in weighted average foreign exchange rates and spot
rates used for translation of financial statements under IFRS and
U.S. GAAP.
h. 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 Dx and differences noted
within the Company's consolidated statement of operations and
comprehensive loss.
RECONCILIATION OF NET
LOSS
|
|
|
|
|
|
$'000
|
|
|
Net
loss in accordance with IFRS
|
|
(45,470)
|
|
|
Stock compensation
expense
|
|
(626)
|
(i)
|
|
Amortisation and impairment of
intangibles
|
|
12,352
|
(j)
|
|
Other adjustments
|
|
288
|
(k)
|
|
Net
loss in accordance with US GAAP
|
|
(33,456)
|
|
i.
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.
j.
Amortisation 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.
Impairment charge has also been provided against the asset balance.
k. The remaining
difference represents the aggregation of post year end audit fee
accruals, other immaterial audit adjustments and small accounting
standard difference.