Member Info for Silverblade

Unhooked - the primary restriction on the company relates to the amount of shares it can issue as part of any fund raise. It can issue 33% of its existing share capital in new ordinary shares (c.30m shares); and a further 20% in the form of treasury shares which would not be included in the current share capital from what I can make out. The latter is quite interesting as it would potentially allow a new investor to immediately secure a large % of the company without having to accumulate ordinary shares in the open market. These options tie in with the statements made in the full year results where James M confirmed S-3 shelf registration statements were being filed which would allow new shares to be issued at some point in the future. I agree with Hawker - a fund raise is not 100% certain - but other forms of finance (bonds in particular) are equally expensive in other ways. My only hope is that non core shareholders (ie those outside Sinai, Harwwod and Jefferson) are being considered in the current requirements - to possibly reduce the possibility of the company being taken private. What is always the case - we PI's will be the last to know. SB

I’m thinking a dilutive fundraise - which will only be able to raise a limited amount of cash due to the restrictions in place - would be a decent result here. Market starting to price the company being taken private imo - with all its patents of course….SB

This is getting very ugly, very quickly. Looks like Armistice called it correctly back in June - it’s difficult to watch and wait and see what the company’s next move is - and in the meantime see large chunks of remaining value lost each day. The big question must be getting raised - is there a future here for Renx as an ongoing independent business without any market traction despite spending significant sums to reach this point. SB

JonnyGee - I bought into the buy to build story which Max and the team have been executing well up to the point where debt became a very expensive commodity on your balance sheet. imo a business should adapt to its market environment - and when it does not there is a risk is becomes a less attractive investment which I think we have witnessed here for some time. There is no debate on the loss of shareholder value - it is significant. As for sales - overall group volume is down 3%, and EBITDA margin is also down first half of 2023. Perhaps it is all about a future exit strategy - as and when the management team secure their share options. But debt and lack of shareholder return are a huge cloud over the business with neither being addressed by management. We will agree to disagree on the issue of multiples and how it impacts on valuations - but appreciate your background is PE. One query if I may - you highlight that the company is trading at a multiple of 5.5x 2023 EBITDA. From my calculations 2023 EBITDA should be in the region £110m/115m. The current market value of the business is c.£360m. This would seem to imply an EBITDA of 3.3? A multiple of 5.5 would give a market value of c.£600m or 87p per share which I am sure would be more acceptable to current shareholders? Apologies if my arithmetic is incorrect. SB

Could be a number of things - might be waiting to cancel en masse once current buyback is complete; they might actually hold them back and sell when (if....) share price recovers; or they might not actually be focusing on this given the buybacks total about £10m and this sum is being lost in market cap every day for some time now - £400m below 'book' value. The entire infra sector, much like the stock market in general, is a busted flush at the moment. Latest hit is HS2 - not that anyone is actually investing in that basket case as its a capitally funded project but why let reason get in the way of investment manager strategy. SB

Buyback seems to be having the opposite effect from its intention......now trading at a full 40% discount to NAV. There must be some very awkward conversations with II's taking place - all market confidence in the Investment Adviser seems to have evaporated. Looks like another 500K buyback today but that seems to be accelerating the decline. £240m of its £1b loan portfolio due to be repaid in the next three years will allow £100m RCF to be paid in full with surplus cash available for buybacks, capital returns, special dividends - but negative focus on electricity future price drops seem to be creating a rush to the door. Sit tight....? SB

I think your comment is 100% spot on unhooked - we are all 'gambling' in an area where quite frankly it is becoming clear it is not wise to do so (accepting those who got in early probably made a load of cash in 2019/20). I sold a chunk this morning - I am close to bailing out completely but like you I am still gambling - its as simple as that. I am listening to the webcast as I write this - and am not hearing anything which I did not expect to hear. No guidance as usual - although this is pretty standard now. The only snippet relates to what the company expects to achieve by securing 1% of the 14 million US kidney/diabetes market over the next three years. So - 140,000 tests - c.$130m revenue with a clear ramp up from its current dismal efforts. And yet still underwhelming, but clearly a step in the right direction. The time to raise capital was post FDA when the share price was high, momentum was good and dilution would have been minimised. Now its going to hurt big time - Jefferson River, Polar and others will be fizzing in the background - and if anyone is to suffer here it will be PI's hit the hardest imo. The market has reacted accordingly. An entirely predictable outcome. SB

Messy. Again. Big issues are starting to emerge on the sales front. As usual the RNS attempts to use data to focus on strong growth in volume ie up 55% on prior year, 5500 tests in the year, 1200 per quarter.....however Q4 revenue was less than Q3, which itself was significantly less than Q1 and Q2 due to the ending of the $6m Mount Sinai testing contract. Q4 2023 revenue was $0.5m - so Renx appears to have been paid for about 500 of the 1200 tests it processed. Even worse - 100 tests were classed as bad debts (or suffering 'collectability' issues as the company puts it). Q1 2024 appears similar - only 50% of tests are revenue generating - so c.$600K secured on 1200 tests. Nearly 12 months into the VA contract and no sign of a single test sale. Tens of millions of insured lives - none of whom are benefiting from the available test technology. A substantial direct and indirect sales force - and collectively bringing in c.$175k a month for a business spending c.$3m. Yes its still 'early days' - but there is simply no evidence there is a market for KidneyIntelX. Looks like the quarterly cash burn is down to c.$8m - so there is about $17m of cash left in business as of today - enough for two more quarters. S-3 forms being processed to allow capital raise - although reference to potential non-dilutive funds possibly linked to some form of partnership. Could be another tricky meeting for James M this afternoon. SB

I've been wondering the same myself spindok....economic conditions and interest rates are clearly part of the problem but at nearly a 40% discount to NAV this does appear to be either completely oversold or there is a loss of confidence in those running the fund. Lots of trades today - some relatively big - lets see how many were buybacks. I'm personally buying at these levels - heck of a yield - and even with some bad arithmetic on the management side there must be scope for a decent upside next year imo. Major investors must be in touch with mgt - capital markets day in October with latest NAV announcement. SB

Like the vast majority of financial results from Renx I am struggling to see any good news coming our way on Thursday. I’m probably not the only one questioning whether to sell tomorrow rather than risk another car crash reaction to a lack of progress in selling tests. The only light might be an update on how Q1 2024 is faring post FDA. Possible there might be a dual release on new funding? SB

Welcome Mr M - to the dichotomy which is Renalytix. A business with an AI driven simple blood test capable of early diagnosis for a global disease including vast numbers of Americans who additionally benefit from an agreed national reimbursement rate from the CMS and a host of partner organisations in the public and private payer markets providing access to significant patients populations. Yet - despite this - the company has struggled to sell its product outwith an agreed testing contract with one of its founding members and is now likely (imo) to only have enough cash in the bank to last another three months. It is a member of the 95% club - losing 95% of its market value in the last 2 years. I could go on - but you get the picture here - it is high risk. The upside could be significant if it can demonstrate a sustainable business model which allows funds to be raised in a way which does not wipe out shareholder interest - alternatively the downside is a business which gets bought for its IP. Its not been an easy ride and its getting to the point where the market is spooked by the lack of any tangible communication on what is going on behind the scenes. As I say, welcome......SB

The trading on Nasdaq appears to be fully coordinated using small trades of 100 shares throughout the day to take 5-10% of the market value - these trades do not appear to be private investors so my assumption is someone is shorting and doing pretty well. This then flips into loss of confidence on AIM in the UK and so the pattern continues. SB

Sorry Darton i should have said where I saw your purchase - X!. I reckon it would need to be 40/45p+ for any serious talks here - and even then I'm not sure Mills would go for that. As for SRC - I'm there as well - lots of potential but they need to look at bringing debt down and a dividend as opposed to ongoing acquisition trail imo. SB

I'll certainly be golfing in the morning now. Horrendous day on Nasdaq. Beginning to look like AGL here. SB

I saw your purchase notification Dartron - and your rationale for getting back in. Welcome back! I wouldn’t be surprised at either outcome given the lack of any update on the appointment of a permanent leadership team. Update next week apparently….SB

Blimey - what an unusual consensus of opinion....SB

Good observations Hawker - your are clearly in the glass half full camp. Not so sure about your first point though - whilst I agree Mills will look after his own interests - these may not align with PI's as has been evidenced in the past. I think we have all shown a great degree of patience here - accepting Renx would probably claim they are ahead of schedule given the relative youth of the company and its FDA approved status - but the reality is there is simply no evidence to show they can sell tests in any number outwith its $6m Sinai contact - and that makes any fund raise high risk without a robust business plan backed up with a detailed income analysis. The shares are drifting south on limited volume - any increase either way will have a significant impact on the price - and the longer we wait the more nervous the market will get as to what direction the business has/will take - and what impact this will have on all investors. I'm pretty sure Randy B will be following closely as will other major funds who you imagine will be seeking the answers to the same questions we discuss here. Enjoy your fishing - golf for me.....! SB

We already know that Renx can issue c.50m new shares as part of a placement if that option is pursued - and as much as we would all like that to be done at a premium I suspect it will be at a discount to the current share price. Probably would not raise enough unless sales start to ramp. Bit baffled by todays appointment - no disrespect to Mr Doran but I would have thought the head of global sales for Renx might have a bit more recent experience. Brings me to my point. I hope we are not going to find out Renx is run by great clinical minds but no idea how to sell a product despite all the reimbursements and insurance and coverage etc. No word on the result of the medicare meeting last month - that would be a welcome boost. Meanwhile - shorters, algos and worried PI's driving price lower each day - not likely to stop until we have an impact level RNS aside from the non-updates recently issued. SB

Missed the presentation yesterday so appreciate the comments from those that dialled in. I think it is becoming clear that the BOD (max) is completely focused on growth through acquisition despite the cost to shareholders. To arrive unprepared for a conversation on valuation seems naïve at best. To have spent £600m on businesses which in combination are now worth less than £350m seems pretty poor despite all the other positive metrics. The company is also reaping what it sows by continuing to do deals at low EDITDAs - which becomes self fulfilling and is reflected in the current low multiple being applied. Whilst net debt is coming down - the implied comments from the update is that growth is still priority number 1 and not attempting to reduce debt - term loan repayments are now starting to ramp and by next year are c.£35m pa. Sonia is now extremely expensive from 12 months ago. Not one mention of shareholder value - capital appreciation or income. The BOD appear tone deaf to the current situation. Not unsurprisingly on track for 8p eps full year which triggers LTIP bonuses. Perhaps then we will see a BOD more focused on creating value and running a disciplined PLC which is more accountable to shareholders. SB

Don't know about anyone else but I'm starting to get a bit twitchy on the funding position. Renx is currently in Q1 of its 2024 fiscal year. Based on the last available financial data in the Q3 2023 results the company had $33m in cash and equivalents with a spend rate over income of c.$12m per quarter. At the end of this month we will have completed two further quarters (Q4 2023 and Q1 2024). Based on the historic rate of expenditure we could be looking a c.£9m cash/equivalents going into Q2 2024 ($33m - $24m). Appreciate there may have been a sales ramp up and cost cutting - although no evidence to support this - but even though the cash position will be insufficient to see us through Q2 2024 imo and certainly not with any credibility as a going concern. Something needs to happen asap - capital raise, placement, funding partner (although company has attempted to remain neutral in this regard), full nasdaq listing, being taken private. Lots of potential options - which could have positive or negative outcomes for PIs. Armistice Capital still holding their 1.5% short position - clearly betting it hits the fan. SB