RenovoRx(RNXT) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION The financial information section details the company's financial statements, management's analysis, and related disclosures Item 1. Financial Statements Cash increased to $12.3 million by June 30, 2025, with initial RenovoCath revenues, but net losses persisted Condensed Balance Sheets This section presents the company's financial position at specific points in time Condensed Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $12,314 | $7,154 | | Total current assets | $13,395 | $7,828 | | Total assets | $13,643 | $8,118 | | Total current liabilities | $1,556 | $1,909 | | Total liabilities | $3,002 | $3,640 | | Total stockholders' equity | $10,641 | $4,478 | Condensed Statements of Operations This section outlines the company's revenues, expenses, and net loss over specific periods Condensed Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $422 | $- | $619 | $- | | Gross profit | $270 | $- | $373 | $- | | Loss from operations | $(2,678) | $(3,034) | $(5,788) | $(5,510) | | Net loss | $(2,895) | $(2,389) | $(5,315) | $(3,465) | | Net loss per share, basic and diluted | $(0.08) | $(0.10) | $(0.16) | $(0.18) | Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) This section details changes in the company's equity structure and accumulated deficit Condensed Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,683) | $(4,501) | | Net cash used in investing activities | $(2) | $- | | Net cash provided by financing activities | $10,845 | $15,070 | | Net increase in cash and cash equivalents | $5,160 | $10,569 | | Cash and cash equivalents, end of period | $12,314 | $11,742 | Notes to the Unaudited Condensed Interim Financial Statements Notes detail the company's business, history of losses, capital needs, $12.3 million cash, and accounting policies 1. Business and Principal Activities This note describes the company's core business, products, and strategic focus - RenovoRx, Inc. is a commercial and clinical stage life sciences company offering RenovoCath®, an FDA-cleared local drug delivery device, and developing IAG (intra-arterial delivery of gemcitabine via RenovoCath) in a Phase III clinical study for locally advanced pancreatic cancer[28][29][30] - The company has raised an aggregate of $71.4 million since inception, with net proceeds of $64.3 million; as of June 30, 2025, cash and cash equivalents were $12.3 million; the company had an accumulated deficit of approximately $55.5 million and expects to continue incurring significant losses, necessitating additional capital[32][33][34] Recent Equity Financing Net Proceeds (in millions) | Offering | Net Proceeds (in millions) | | :--- | :--- | | April 3, 2023 RDO | $4.3 | | January 26, 2024 Private Placement | $5.4 (gross $6.1 less $0.7 expenses) | | April 11, 2024 Private Placement | $9.6 | | February 10, 2025 Public Offering | $10.8 | - Management believes current cash and cash equivalents will be sufficient to fund operations through at least the next 12 months from the issuance of this Report[41] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements 3. Fair Value Measurements This note details the valuation techniques and inputs used for assets and liabilities measured at fair value 4. Property and Equipment, Net This note provides information on the company's tangible assets and their depreciation 5. Accrued Expenses This note details the company's short-term liabilities for services received but not yet paid 6. Leases, Commitments and Contingencies This note describes the company's lease obligations, contractual commitments, and potential liabilities 7. Equity Incentive Plan – Stock-Based Compensation Expense and Warrants This note explains the accounting for stock options, restricted stock, and warrants issued to employees and others Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $106 | $81 | $243 | $207 | | General and administrative | $239 | $163 | $390 | $460 | | Total | $345 | $244 | $633 | $667 | 8. Income Taxes This note provides details on the company's income tax provisions, deferred taxes, and tax loss carryforwards 9. Net Loss Per Share This note explains the calculation of basic and diluted net loss per share 10. Segment Information This note provides financial data for the company's operating segments, if applicable 11. Related Party Transactions This note discloses transactions with parties that have a special relationship with the company - Consulting fees paid to co-founder Dr. Ramtin Agah were $84,000 for the three months ended June 30, 2025 (vs. $63,000 in 2024) and $168,000 for the six months ended June 30, 2025 (vs. $152,000 in 2024); a discretionary bonus of $121,000 was paid to Dr. Agah in February 2025[85] 12. Subsequent Events This note describes significant events that occurred after the balance sheet date but before the financial statements were issued - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, amending U.S. tax law; the Company is currently evaluating its impact on consolidated financial statements[86] Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, RenovoCath commercialization, IAG clinical trial progress, and capital needs - RenovoRx is a commercial and clinical stage life sciences company focused on RenovoCath, an FDA-cleared local drug delivery device, and its lead product candidate IAG for locally advanced pancreatic cancer[91][92][93] Overview This section provides a high-level summary of the company's business and financial performance Commercialization of RenovoCath This section discusses the progress and results of the company's efforts to market and sell RenovoCath - Commercialization of RenovoCath, launched in Q4 2024, generated approximately $420,000 in revenue in Q2 2025, a significant increase from $197,000 in Q1 2025, driven by new and repeat customer orders from diverse medical institutions[95][96][97] Our Ongoing Pivotal Phase III Trial for IAG This section details the status and key developments of the Phase III clinical trial for IAG - The ongoing Phase III TIGeR-PaC clinical trial for IAG in locally advanced pancreatic cancer received a recommendation from the independent Data Monitoring Committee (DMC) to continue the trial after its second interim analysis; as of August 12, 2025, 95 patients have been randomized and 61 events have occurred, with enrollment targeted for completion this year or early next year[104][106][107] Launch of the Multi-Center Post-Marketing Registry Study to Evaluate Chemotherapy Delivered by RenovoCath Device to Solid Tumors This section describes the initiation and objectives of the new post-marketing registry study for RenovoCath - In July 2025, the company launched the PanTheR Post-Marketing Registry Study to evaluate the long-term safety and survival outcomes of RenovoCath for targeted chemotherapy delivery in various solid tumors, aiming to capture real-world data and inform future clinical trial designs[109][110][111] Cash Resources, History of Losses and Planned Activities This section addresses the company's liquidity, accumulated losses, and future operational plans - The company has an accumulated deficit of $55.5 million as of June 30, 2025, and expects to continue incurring significant operating losses, necessitating additional capital through equity/debt financings or collaborations to fund ongoing commercialization, R&D, and clinical trials[112][114][117] Components of Our Results of Operations This section details revenue recognition, cost of revenue, R&D, SG&A, and other income/expense components Revenue This subsection explains how the company recognizes revenue from its product sales - Revenue from RenovoCath sales is recognized at the point of customer control, typically upon delivery; variable consideration is limited to return rights for product damage or defects[118] Cost of Revenue This subsection details the direct costs associated with generating product revenue - Cost of revenue consists of third-party manufacturing, shipping, and handling costs for RenovoCath devices not associated with the TIGeR-PaC study; previously, all manufacturing costs were expensed as research and development[119] Research and Development This subsection outlines the expenses incurred for product development and clinical trials - Research and development expenses include costs for clinical trial sites, contract research organizations, consultants, clinical trial materials, personnel, regulatory compliance, and non-recurring engineering for next-generation RenovoCath; payments from clinical trial sites for RenovoCath devices offset R&D expenses[120][121][128] Selling, General and Administrative This subsection describes the costs related to sales, marketing, and corporate overhead - Selling, general and administrative expenses comprise salaries, benefits, stock-based compensation for executive, finance, commercial, and administrative functions, professional services, consulting, conferences, travel, and allocated overhead; these expenses are expected to increase with expanded commercialization efforts and hiring of sales and marketing personnel[123] Other Income This subsection covers non-operating income sources, such as interest and dividends Change in Fair Value of Warrant Liability This subsection explains the impact of changes in the valuation of warrant liabilities on financial results - Change in fair value of warrant liability represents the gain or loss reported from the change in the fair value of the common stock warrant liability, primarily influenced by changes in the company's stock price[125] Income Tax Expense This subsection details the company's tax obligations and related expenses Results of Operations First RenovoCath revenues in Q4 2024, with Q2 2025 revenue at $0.4 million, but net losses increased Comparison of the Three Months Ended June 30, 2025 and 2024 This subsection compares the company's financial performance for the three-month periods Revenue and Cost of Revenue (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $422 | $- | $422 | n/a | | Cost of revenues | $152 | $- | $152 | n/a | | Gross profit | $270 | $- | $270 | n/a | Operating Expenses (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,426 | $1,542 | $(116) | (8)% | | Selling, general and administrative | $1,522 | $1,492 | $30 | 2% | | Total operating expenses | $2,948 | $3,034 | $(86) | (3)% | | Loss from operations | $(2,678) | $(3,034) | $356 | 12% | Other Income (Expense) and Net Loss (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest and dividend income | $133 | $138 | $(5) | (4)% | | Change in fair value of common warrant liability | $(350) | $507 | $(857) | (169)% | | Total other (expense) income, net | $(217) | $645 | $(862) | (134)% | | Net loss | $(2,895) | $(2,389) | $(506) | (21)% | Comparison of the Six Months Ended June 30, 2025 and 2024 This subsection compares the company's financial performance for the six-month periods Revenue and Cost of Revenue (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $619 | $- | $619 | n/a | | Cost of revenues | $246 | $- | $246 | n/a | | Gross profit | $373 | $- | $373 | n/a | Operating Expenses (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,068 | $2,799 | $269 | 10% | | Selling, general and administrative | $3,093 | $2,711 | $382 | 14% | | Total operating expenses | $6,161 | $5,510 | $651 | 12% | | Loss from operations | $(5,788) | $(5,510) | $(278) | (5)% | Other Income and Net Loss (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest and dividend income | $239 | $175 | $64 | 37% | | Change in fair value of common warrant liability | $234 | $1,870 | $(1,636) | (87)% | | Total other income, net | $473 | $2,045 | $(1,572) | (77)% | | Net loss | $(5,315) | $(3,465) | $(1,850) | (53)% | Liquidity and Capital Resources Historically funded by equity, with $12.3 million cash, the company faces ongoing losses and needs more capital - From inception through June 30, 2025, the company raised an aggregate of $71.4 million, primarily from private and public equity financings, with net proceeds of $64.3 million[141] - As of June 30, 2025, cash and cash equivalents totaled $12.3 million[141] - The company had an accumulated deficit of approximately $55.5 million and reported net losses of $2.9 million for the three months and $5.3 million for the six months ended June 30, 2025[141] - Management expects current cash and cash equivalents to be sufficient to fund operating, investing, and financing cash flow needs for at least the next twelve months, assuming programs advance as contemplated[141] - The company anticipates needing to raise additional capital through debt, equity, license agreements, or other arrangements to support continued commercialization of RenovoCath and development of product candidates[142][147] Cash Flows Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Operating activities | $(5,683) | $(4,501) | | Investing activities | $(2) | $- | | Financing activities | $10,845 | $15,070 | | Increase in cash and cash equivalents | $5,160 | $10,569 | Contractual Obligations and Other Commitments No material changes in contractual obligations or commitments since the 2024 Annual Report filing - No material changes in contractual obligations or other commitments since the 2024 Annual Report[154] Critical Accounting Policies and Significant Judgments and Estimates No significant changes to critical accounting policies or estimates for the six months ended June 30, 2025 - No significant changes to critical accounting policies or significant judgments and estimates for the six months ended June 30, 2025, from those disclosed in the 2024 Annual Report[156] Emerging Growth Company and Smaller Reporting Company Status Company qualifies as an "emerging growth company" and "smaller reporting company," allowing reduced reporting requirements - The company is an "emerging growth company" as defined in the JOBS Act, allowing for reduced reporting requirements and an extended transition period for new accounting standards[160] - The company is also a "smaller reporting company," which provides exemptions from certain disclosure requirements, such as presenting only two years of audited financial statements in its Annual Report on Form 10-K and reduced executive compensation disclosures[162] Recently Issued and Adopted Accounting Pronouncements No new accounting pronouncements are expected to materially impact the financial statements since the 2024 Annual Report - No new accounting pronouncements issued or effective since the 2024 Annual Report are expected to have a material impact on the company's financial statements[163] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is not required for the company as it qualifies as a smaller reporting company under federal securities laws - The company qualifies as a smaller reporting company, exempting it from the requirement to provide quantitative and qualitative disclosures about market risk[164] Item 4. Controls and Procedures Disclosure controls were ineffective as of June 30, 2025, due to material weaknesses in accounting policies and staffing Evaluation of Disclosure Controls and Procedures This section details management's assessment of the effectiveness of the company's disclosure controls - Disclosure controls and procedures were concluded as not effective as of June 30, 2025, due to previously identified material weaknesses in internal control over financial reporting[165] Previously Identified Material Weakness This section describes the significant deficiencies in internal control over financial reporting identified by management - Material weaknesses include inadequate formal accounting policies and controls for complex transactions due to a lack of finance and accounting staff with appropriate GAAP technical expertise[169] - Additional material weaknesses involve insufficient staffing and written policies for accounting and financial reporting, leading to significant control gaps in the financial statement close process, including lack of segregation of duties and proper IT general controls related to user access[169] - Remediation efforts are in progress, including engaging additional accounting and financial reporting personnel, developing an accounting policy manual, and establishing effective monitoring and oversight controls for non-recurring and complex transactions[170] - Despite the identified material weaknesses, management believes the condensed interim financial statements are fairly presented, in all material respects, in accordance with GAAP[165] Changes in Internal Control over Financial Reporting This section reports any material changes in internal control over financial reporting PART II. OTHER INFORMATION This section provides additional non-financial information, including legal proceedings, risk factors, and equity security sales Item 1. Legal Proceedings The company is not currently engaged in any material legal proceedings for the periods ended June 30, 2025 - The company was not subject to any material legal proceedings during the three and six months ended June 30, 2025, and no material legal proceedings are subsequently outstanding or pending[174] Item 1A. Risk Factors Investing in RenovoRx involves high risk due to no approved products, limited commercial experience, losses, and capital needs Risk Factors Summary This section provides a concise overview of the primary risks associated with investing in the company - The company has no drug/device combination products approved for commercial sale, only limited experience in commercializing standalone medical devices, and no operating history as a revenue-generating company, making future success difficult to predict[176] - The company has incurred significant net losses since inception and expects to continue incurring losses until FDA approval for product candidates or sufficient RenovoCath commercial revenue is generated[176] - Estimates of total addressable market, potential revenues for RenovoCath, and timelines for clinical trial completion and data readout may prove inaccurate due to the newness of commercial efforts and inherent uncertainties in clinical trials[176] - The company will likely need to raise substantial additional capital for IAG development and commercialization, as well as for RenovoCath sales and marketing; failure to obtain timely funding could delay or eliminate product development and commercial efforts, potentially impacting the company's ability to continue as a going concern[177] - The commercial viability of product candidates is subject to current and future preclinical studies, clinical trials (notably Phase III TIGeR-PaC), and regulatory approvals; failure to successfully advance or develop product candidates would materially harm the business[177] - Inability to effectively protect intellectual property could prevent the company from stopping third parties from using its technologies, impairing its competitive advantage, or competitors may develop more effective technologies without infringement[177] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In June 2025, RenovoRx issued 36,000 restricted common shares to Encode Ideas LLC for investor relations services - In June 2025, the company issued 36,000 restricted common shares to Encode Ideas LLC for investor relations outreach services, vesting monthly over one year[178] - The issuance of these restricted common shares relied on the private placement exemption from registration provided by Section 4(a)(2) of the Securities Act[178] Item 3. Defaults Upon Senior Securities There are no defaults upon senior securities to report - None[179] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[180] Item 5. Other Information No other information is applicable for this item - Not applicable[181] Item 6. Exhibits This section lists all exhibits filed, including corporate documents, warrant forms, equity plans, and officer certifications - The exhibits include the Sixth Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws of RenovoRx, Inc[184] - Various forms of warrants are included, such as Private Common Stock Warrants, Underwriter's Warrants, Pre-Funded Common Stock Purchase Warrants, Series A and B Warrants, and Placement Agent Warrants[184] - The Amended and Restated 2021 Omnibus Equity Incentive Plan and the Supply Agreement with Medical Murray, Inc. (RenovoCath manufacturer) are filed[184] - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act are furnished[184] SIGNATURES The report is signed by Shaun R. Bagai, CEO, and Ronald B. Kocak, VP Controller, on August 14, 2025 - The report was signed by Shaun R. Bagai, Chief Executive Officer, and Ronald B. Kocak, VP Controller and Principal Accounting Officer[188] - The signing date for the report was August 14, 2025[188]