TORONTO, Nov. 15, 2017 /PRNewswire/ - GeneNews Limited (TSX:GEN) ("GeneNews" or the "Company") today announced operational and financial results for the three-month period ended September 30, 2017, and provided a progress update on its business.
"The third quarter of 2017 has been a period of substantial accomplishment," commented James R Howard-Tripp, GeneNews' Chairman and CEO. "Although test volume was essentially flat vs last quarter due to the summer months when vacations are more prevalent and the damaging weather that struck two of our high-volume states, we have made significant progress in our plans for growth into new markets."
The Company continued to enroll new practices, bringing practice enrollment above the 2000 mark. The Company has also begun two pilot programs. The first pilot is for the launch of a comprehensive testing program among a high-risk workforce, and the other is a BreastSentry™ pilot for evaluating breast cancer risk among women with dense breasts working with a well-respected breast imaging center. In addition, preparations have begun for on-boarding two large healthcare systems in expectation of receiving signed contracts from them.
"Perhaps the most exciting development of the quarter is the ramp-up of our operations and infrastructure for the execution of a direct-to-consumer model," says Howard-Tripp."This plan will allow us to connect the thousands of patients who reach out to us each year with a national network of physicians and 8,000 draw sites to dramatically improve patient access to our tests. As part of the plan's execution, we are building an IT infrastructure that will allow us to report results electronically to physician networks and process patient payments online to generate immediate revenue. This is in line with the emerging trend of patients demanding greater control over their healthcare and spending of their healthcare dollars".
Financing Activities and Capital Structure
Subsequent to the quarter, Genenews announced the signing of the Milost Global Subscription Agreement (the MESA), securing US$10 million in financing. The equity and debt subscription agreement includes up to US$4 million in GeneNews' common shares to be drawn down at the Company's option, in maximum installments of US$1 million, and up to US$6 million in unsecured convertible notes, also to be drawn down at the Company's option, in maximum installments of US$3 million. The Initial US$500,000 Equity Draw Down will commence immediately. Proceeds raised from the initial draw down will be used for working capital and especially for the continued execution of the Company's growth strategy.
GeneNews also announced a warrant exercise incentive program that closed August 31, 2017. We received gross proceeds of $77,992 (Cdn$103,715) from the early exercise of 430,937 warrants, of which 156,250 warrants were exercised by GeneNews' Chairman and CEO. No further warrants were exercised during the early exercise period and the exercise price reverted back to the original exercise price of Cdn$0.50 for the remaining life of the warrants.
Q3-2017 Financial Results
All amounts are expressed in U.S. dollars unless otherwise stated and results are reported in accordance with International Financial Reporting Standards.
For the three-month period ended September 30, 2017, GeneNews reported a consolidated net loss of $0.6 million, or $0.01 loss per common share, as compared with a consolidated net loss of $2.8 million, or $0.04 loss per common share, for the three-month period ended September 30, 2016. The $2.2 million decrease in net loss primarily results from a $1.5 million change in revaluation of warrants associated with repricing of warrants. In addition, there were declines in general and administrative expenses of $0.3 million, in cost of goods sold of $0.3 million and in finance costs of $0.1 million. The Company had approximately $0.1 million in cash and cash equivalents as at September 30, 2017.
"Cash received in-house for the Quarter at $54,000 is disappointing, and reflective of the changes we are currently making in our billing processes. While not yet reflected in the Company's financial results, we estimate our outstanding 2017 billings at approximately $1.8 million and continue to anticipate that our recognized revenue will begin to grow in the months ahead," added Howard-Tripp. "Two pilot programs have demonstrated that our anticipated 70% recovery rate is achievable".
The Company's financial statements and management's discussion and analysis are available on www.sedar.com.
GeneNews, an innovator in the liquid biopsy space, is committed to becoming a leader in advanced diagnostics and personalized medicine, serving as a strong commercialization outlet for early detection of cancer and other chronic diseases. Our mission is to identify, assess and make commercially available a comprehensive menu of diagnostics that provide physicians and patients with personalized clinical intelligence and actionable information to improve health out-comes through the early diagnosis of disease.Our Richmond, Virginia-based Innovative Diagnostic Laboratory clinical reference lab specializes in traditional and advanced clinical evidence-based blood testing that helps find, understand, and address cancer risk in patient populations. Currently, IDL offers risk assessment blood tests for four prevalent cancer types - colon, lung, prostate and breast. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews and IDL can be found at www.GeneNews.com and www.myinnovativelab.com, respectively.
This press release contains forward-looking statements identified by words such as "expects", "will" and similar expressions, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties that could cause the Company's actual events to differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements, except as required by law.
SOURCE GeneNews Limited
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