RenovoRx(RNXT) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents RenovoRx, Inc.'s unaudited condensed interim financial statements for Q1 2024, including balance sheets, statements of operations, cash flows, and notes Condensed Balance Sheets As of March 31, 2024, cash and equivalents increased to $4.4 million, total assets to $4.8 million, and stockholders' equity turned positive to $1.8 million Condensed Balance Sheets (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $4,389 | $1,173 | | Total assets | $4,788 | $1,466 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $1,093 | $1,175 | | Common stock warrant liability | $1,928 | $3,291 | | Total liabilities | $3,021 | $4,466 | | Total stockholders' equity | $1,767 | $(3,000) | | Total liabilities and stockholders' equity | $4,788 | $1,466 | Condensed Statements of Operations Q1 2024 net loss improved to $1.1 million from $3.3 million YoY, due to a $1.4 million gain from warrant liability and reduced operating expenses Condensed Statements of Operations (in thousands, except per share amounts) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Research and development | $1,257 | $1,338 | | General and administrative | $1,219 | $1,923 | | Total operating expenses | $2,476 | $3,261 | | Loss from operations | $(2,476) | $(3,261) | | Change in fair value of common warrant liability | $1,363 | - | | Net loss | $(1,076) | $(3,257) | | Net loss per share, basic and diluted | $(0.07) | $(0.36) | Condensed Statements of Cash Flows Q1 2024 net cash used in operations was $2.2 million, offset by $5.4 million from financing, increasing cash to $4.4 million Condensed Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,204) | $(2,706) | | Net cash provided by investing activities | - | $2,032 | | Net cash provided by financing activities | $5,420 | $6 | | Net increase (decrease) in cash and cash equivalents | $3,216 | $(668) | | Cash and cash equivalents, end of period | $4,389 | $3,723 | Notes to the Unaudited Condensed Interim Financial Statements Notes detail the company's clinical-stage biopharmaceutical business, liquidity, financing activities, and resolution of a Nasdaq listing deficiency - The company is a clinical-stage biopharmaceutical company focused on developing novel precision oncology therapies. Its lead product candidate is RenovoGem™, currently in a pivotal Phase III clinical trial for pancreatic cancer[32] - In January 2024, the company completed a private placement, raising gross proceeds of $6.1 million by issuing 6,133,414 shares of common stock and warrants[38] - Subsequent to the quarter end, in April 2024, the company closed another private placement for gross proceeds of $11.1 million[77] - Management believes that existing cash and cash equivalents are sufficient to fund operations for at least twelve months from the financial statement issuance date, supporting the going concern assumption[40] - On April 17, 2024, Nasdaq notified the company that it had regained compliance with the minimum stockholders' equity requirement for continued listing, curing a previously disclosed deficiency[79] Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage biopharmaceutical operations, Q1 2024 financial performance with reduced net loss, and recent capital raises Overview Overview of the company's clinical-stage biopharmaceutical business, TAMP platform, RenovoGem's Phase III trial, and recent capital raises - The company's proprietary Trans-Arterial Micro-Perfusion (TAMP) therapy platform is designed for precise drug delivery to tumors, aiming to minimize systemic toxicities[82] - The lead product candidate, RenovoGem, is being evaluated in the TIGeR-PaC Phase III clinical trial for locally advanced pancreatic cancer (LAPC)[83][85] - The second interim analysis for the TIGeR-PaC study is estimated to occur in late 2024, triggered by reaching 52 patient death events[86] - In January and April 2024, the company raised a total of $17.2 million in gross proceeds from two private placements[90] Results of Operations Q1 2024 total operating expenses decreased by 24% to $2.5 million, and net loss significantly decreased by 67% to $1.1 million Comparison of Results for the Three Months Ended March 31, 2024, and 2023 (in thousands) | | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,257 | $1,338 | $(81) | (6)% | | General and administrative | $1,219 | $1,923 | $(704) | (37)% | | Total operating expenses | $2,476 | $3,261 | $(785) | (24)% | | Loss from operations | $(2,476) | $(3,261) | $785 | (24)% | | Change in fair value of common warrant liability | $1,363 | - | $1,363 | n/a | | Net loss | $(1,076) | $(3,257) | $2,181 | (67)% | - General and administrative expenses decreased by $0.7 million (37%) YoY, primarily due to lower costs in employee benefits, legal/professional fees, and investor relations[106] - Other income increased to $1.4 million, primarily due to a $1.4 million non-cash gain from the change in fair value of the common warrant liability, reflecting a decrease in the company's stock price[107] Liquidity and Capital Resources As of March 31, 2024, cash and equivalents were $4.4 million, bolstered by $17.2 million from recent private placements, ensuring sufficient liquidity - As of March 31, 2024, the company had cash and cash equivalents of $4.4 million and an accumulated deficit of $42.5 million[91][108] - The company raised gross proceeds of $6.1 million from a private placement in January 2024 and an additional $11.1 million from a private placement in April 2024[110][116] - Management believes existing cash and cash equivalents are sufficient to fund operating, investing, and financing needs for at least twelve months from the report's issuance date[113] Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,204) | $(2,706) | | Net cash provided by financing activities | $5,420 | $6 | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company and is exempt from these disclosures - The company is not required to provide disclosures for this item because it qualifies as a smaller reporting company[135] Item 4. Controls and Procedures As of March 31, 2024, disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were not effective as of the end of the fiscal quarter ended March 31, 2024[136] - The ineffectiveness is due to a material weakness in internal control over financial reporting, stemming from a lack of finance/accounting staff with technical GAAP expertise, insufficient staffing, and lack of formalized processes[139] - Specific control gaps include a lack of segregation of duties in posting journal entries and inadequate IT general controls related to user access[139] - A remediation plan is being implemented, which includes hiring additional accounting personnel and developing formal policies and oversight controls[140] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently engaged in any material legal proceedings - The Company is not currently engaged in any material legal proceedings[147] Item 1A. Risk Factors This section summarizes principal investment risks, including clinical-stage status, history of losses, capital needs, and trial success dependency - Key risks for the company include: - Being a clinical-stage company with no approved products and a history of significant net losses - The need to raise substantial additional capital to continue development - Commercial viability is dependent on successful clinical trials and regulatory approvals - Potential for undesirable side effects in product candidates - Competition from existing marketed drugs - Dependence on retaining key personnel and protecting intellectual property - Potential stock price volatility, especially due to a large number of shares and warrants issued in recent financings[150][156] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period - There were no unregistered sales of equity securities or use of proceeds from a public offering to report for the period[151][152] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[153] Item 4. Mine Safety Disclosures This item is not applicable to the company - None[154] Item 5. Other Information There is no other information to report for this period - Not applicable[155] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO and PFO certifications and Inline XBRL documents - Exhibits filed include CEO and PFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files[157]