GeneNews loses $6-million in 2015
2016-05-27 18:08 ET - News Release
Mr. James Howard-Tripp reports
GENENEWS ANNOUNCES FULL YEAR 2015 FINANCIAL RESULTS
GeneNews Ltd. has released operational and financial results for the 12-month period ended Dec. 31, 2015. "The delivery of healthcare is changing rapidly, especially in the United States," commented James R Howard-Tripp, GeneNews' Executive Chairman. "Within this, the role for diagnostics must, obviously, change too. We originally entered into a joint venture to build an early cancer diagnostic laboratory with the objective of leveraging the established expertise of all the partners to help build it out more rapidly. It was also our intention to increase GeneNews' ownership and control of IDL over time. 2014 was the year to build out IDL and to launch our initial products. 2015 was characterized by our establishment of full control and then ownership, and beginning to re-position IDL so that we can take full advantage of the emerging changes in healthcare delivery. Our partnership with JTS Health Partners, announced subsequent to year end in March 2016, is an extension of this shift and we are jointly leveraging their established relationships and expertise to provide early cancer diagnostic solutions to patients and physicians alike, within large healthcare groups in this ever changing environment."
Full Year 2015 Financial Results
Effective July 1, 2015, GeneNews changed its functional and presentation currency to U.S. dollars given the increasing prevalence of U.S. dollar denominated activities of the Company over time. These full-year 2015 financial results are presented in U.S. dollars and prior year comparable information is restated to reflect the change in presentation currency. Results are reported in accordance with International Financial Reporting Standards.
For the year ended December 31, 2015, GeneNews reported a consolidated net loss of $6.0 million, or $0.11 loss per common share, compared with a consolidated net loss of $7.0 million, or $0.16 loss per common share, for the same period in 2014. Total revenue for the year ended December 31, 2015 was approximately $0.3 million, compared to $2.2 million in the same period in 2014. As IDL has been unable to pay GeneNews for our royalty revenue, management has only recognized revenues for those amounts which were paid to GeneNews in 2015. The $1.0 million decrease in net loss is the result of several factors: a $1.9 million decrease in total revenues in the current year, offset by decreases of $1.6 million in GeneNews' share of the loss in IDL, $0.8 million in general and administrative expenses, and $0.5 million in sales and marketing expenses. Also contributing to this change was an asset impairment charge of $0.3 million, and a gain on revaluation of warrants of $0.2 million, both of which occurred in 2015.
The Company had approximately $0.5 million in cash and cash equivalents as of December 31, 2015. GeneNews noted that this did not include any of the proceeds from the financing under the financial hardship exemption completed subsequent to the 2015 year end. "2015 was a challenging year, including restructuring of the Company's operations," commented James R. Howard-Tripp. "However, with the restructuring now essentially behind us, the completion of financing agreements to secure adequate working capital, and the signing of the collaboration agreement with JTS Health Partners to reposition and expand usage of our menu of early cancer diagnostics, we are looking forward to re-establish GeneNews' role as a leader in advanced cancer diagnostics and personalized medicine."
On March 29, 2016, GeneNews announced that it had been granted a Management Cease Trade Order ("MCTO") by the Ontario Securities Commission ("OSC"). The application for the MCTO was made in respect to the expected late filing of its annual financial statements, management's discussion and analysis, annual information form and the related officer certifications for the financial year ended December 31, 2015 (collectively, the "Annual Filings") beyond the filing deadline of March 30, 2016.
In the application, both James Howard-Tripp, Executive Chairman, and Leslie Auld, Chief Financial Officer, consented to the issuance of the MCTO and both have been precluded from trading the Company's common shares until such time as the cease trade order is no longer in effect. The MCTO does not generally affect the ability of shareholders who are not insiders of the Company to trade their securities.In accordance with the MCTO, GeneNews plans on filing its Annual Filings on www.sedar.com as soon practicable today.
The Company also continues to anticipate the filing of its quarterly financial statements for the three-month period ended March 31, 2016, related management's discussion and analysis and officer certifications on or before June 15, 2016.Until such time as all of the aforementioned filings are made, the MCTO will remain in effect.
TSX Trading Status
As announced in its press release dated May 19, 2016, the Toronto Stock Exchange (the "TSX") has further extended the TSX's Remedial Review Process for a period of 30 days to allow the Company additional time to demonstrate compliance with the continued listing requirements of the TSX (the "Listing Requirements"). The TSX currently intends to make a decision regarding the Corporation's eligibility for continued listing on the TSX by June 17, 2016.
We seek Safe Harbor.