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Nemaura Medical Inc. (NMRD)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 FY2023 (quarter ended September 30, 2022) revenue was $0.07M as initial UK licensee deliveries continued; net loss widened to $4.08M on higher G&A and interest expense .
  • Management highlighted accelerated commercial/manufacturing scale-up and a U.S. commercialization path via EVERSANA for BEATdiabetes/proBEAT, targeting 1Q CY2023 launch to insurers and corporates .
  • Debt maturity was extended on a $20M note from February 2023 to July 2024, improving runway; cash ended the quarter at $10.1M, with negative equity due to high liabilities .
  • Wall Street consensus estimates via S&P Global were unavailable for NMRD this quarter (SPGI mapping missing), so beats/misses vs consensus cannot be assessed [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • “Our commercial and manufacturing scale-up activities accelerated in the fiscal second quarter” (CEO), supporting commercialization of non-invasive glucose devices and sensors .
  • Partnership with EVERSANA positioned for U.S. launch of BEATdiabetes and proBEAT targeting payers/employers, leveraging EVERSANA’s 6,500-person commercial footprint .
  • TPMENA provisional order for 1.7M sensors/17,500 devices contingent on Saudi approval, creating a potential Middle East catalyst .

What Went Wrong

  • Operating loss remained large as G&A rose with scale-up; Q2 operating expenses were $2.58M vs $1.71M YoY, driving net loss to $4.08M .
  • Interest expense remained material at $1.50M, reflecting financing costs and note structures .
  • Cash declined to $10.1M from $14.8M in the prior quarter, while current notes payable increased; equity moved to a $(9.0)M deficit, underscoring balance sheet pressure .

Financial Results

MetricQ2 2022 (YoY)Q1 2023 (Seq Prev)Q2 2023 (Current)
Revenue ($USD)$0 $0 $74,027
Gross Profit ($USD)$0 $0 $1,670
Total Operating Expenses ($USD)$1,714,802 $2,210,993 $2,577,033
Net Income - (IS) ($USD)$(3,494,264) $(3,979,297) $(4,078,477)
Diluted EPS - Continuing Operations ($USD)$(0.15) $(0.17) $(0.17)

KPIs and Balance Sheet Indicators:

KPIQ1 2023Q2 2023
Cash And Equivalents ($USD)$14,751,833 $10,109,650
Inventory ($USD)$1,625,156 $1,909,967
Deferred Revenue - Current ($USD)$177,772 $70,980
Notes Payable - Current Portion ($USD)$16,186,387 $17,398,654
Total Equity ($USD)$(3,958,150) $(9,012,098)

Segment breakdown: Not applicable (single-product/device focus) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
BEATdiabetes/proBEAT U.S. launch plan1Q CY2023Not previously datedLaunch expected in first calendar quarter of 2023 (insurers/corporates via EVERSANA) Raised specificity
TPMENA Middle East launch (Saudi approval)“Coming months”Not previously datedProvisional order contingent on Saudi regulatory approval; approval expected in coming months New regional launch plan
Note maturity extension ($20M facility)MaturityFeb 2023Extended to July 2024 Extended runway

No quantitative revenue/margin/OpEx guidance ranges provided this quarter .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY2023 (unable to locate any transcript in the document catalog). Themes inferred from 8-K and 10-Q filings:

TopicPrevious Mentions (Q2 2022 and Q1 2023)Current Period (Q2 2023)Trend
U.S. commercialization pathPMA in review; proBEAT wellness category and BEATdiabetes program development EVERSANA partnership to penetrate U.S. payers/employers; 1Q CY2023 launch target Accelerating
Regulatory (FDA/CE/Other)FDA audits with 483 observations responded; CE mark in place Saudi approval anticipated for TPMENA launch Ongoing progress
Manufacturing/Supply chainNew facility, headcount expansion, forward orders for scale-up “Commercial and manufacturing scale-up accelerated” Improving capacity
Regional go-to-marketUK phased deliveries to MSW; DuoPack strategy in EU/UK Continued ramp; Middle East licensee order contingent on approval Expanding footprint
R&D executionR&D spend stable as development flattens R&D at $0.26M in Q2 supporting improvements Controlled spend

Management Commentary

  • “Our commercial and manufacturing scale-up activities accelerated in the fiscal second quarter, as we continue to scale operations to support commercialization of our non-invasive glucose monitoring devices and sensors.” — Dr. Faz Chowdhury, CEO .
  • “Our relationship with Eversana should allow us to penetrate the U.S. market on a large scale with our BEATdiabetes program in an efficient manner.” — Dr. Faz Chowdhury, CEO .
  • “We are looking forward to a product launch in the coming months in the Middle East through our licensee TPMENA, whilst we continue to support our UK licensee with their operations.” — Dr. Faz Chowdhury, CEO .

Q&A Highlights

No Q&A available; an earnings call transcript was not found for Q2 FY2023 in the document catalog.

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable due to missing CIQ mapping for NMRD; consequently, we cannot evaluate beats/misses vs consensus this quarter [GetEstimates error].
  • Given the early commercialization stage and minimal reported revenue, future estimate revisions may hinge on the timing/scale of EVERSANA-supported U.S. launch and TPMENA regulatory approval .

Key Takeaways for Investors

  • Early revenue ramp: Q2 revenue of $0.07M reflects nascent deliveries; losses remain sizable as G&A and interest costs weigh on P&L .
  • U.S. commercialization catalyst: EVERSANA partnership with targeted 1Q CY2023 launch could shift revenue trajectory if payer/employer adoption materializes .
  • Middle East optionality: TPMENA’s provisional order contingent on Saudi approval introduces a near-term regional catalyst .
  • Balance sheet risk: Cash fell to $10.1M; negative equity and rising current notes payable highlight leverage and liquidity sensitivities, partly mitigated by extension of note maturity to July 2024 .
  • Going concern flagged: Prior quarter filings disclosed substantial doubt without a funding bridge, underscoring the importance of execution on financing and commercialization .
  • Operational scale-up underway: Inventory build and added headcount indicate readiness, but conversion to sustained revenue will be key to margin improvement .
  • Monitor regulatory milestones: FDA PMA progress (U.S.) and Saudi approval (GCC) remain pivotal to unlocking larger orders and broader distribution .

Citations: [GetEstimates error (SPGI mapping missing)].