TORONTO, Dec. 7, 2015 (GLOBE NEWSWIRE) -- GeneNews Limited ("GeneNews" or the "Company") (TSX:GEN) today issued a corporate update announcing further details on the restructuring of its operations.
In connection with the previously disclosed financial and operational challenges faced by its Innovative Diagnostics Laboratory, LLP ("IDL") business, GeneNews has initiated a staff reduction of 16 employees, representing approximately 30% of IDL's total workforce. Once concluded, IDL will employ 34 personnel, including its sales force, which will continue to make its menu of advanced cancer assays available across the United States.
GeneNews also announced that it has entered into an interim working capital loan (the "Loan") agreement with a major shareholder, who is also a director of the Company, pursuant to which the Company will borrow US$400,000, bearing interest of two percent (2%), with a term of one year and repayable on demand. The Loan will be secured against the intellectual property of the Company and is subject to TSX approval. GeneNews plans to use these funds for an orderly restructuring of the Company's operations, which may include a strategic financing, sale, merger or other business combination. No decision has been made with regard to these alternatives, and there is no assurance that any transaction will be entered into or consummated.
"The interim working capital financing announced today provides GeneNews sufficient capital to support continuing operations in the short-term," said GeneNews' Executive Chairman, James Howard-Tripp. "Nevertheless, we had to make the decision to reduce costs, bring IDL to the smallest possible operational footprint, and extend our existing cash runway to ensure an orderly restructuring of our business. Our goal remains to unlock as much value as possible for our shareholders. I would like to extend my sincere thanks to IDL's departing employees for their hard work and dedication in helping to build the company and wish them the very best as they pursue their personal and professional goals."
GeneNews is focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. The Company's lead product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. In 2013, GeneNews created a U.S. joint venture, Innovative Diagnostic Laboratory, LLP ("IDL"), that it is committed to help become a leader in molecular diagnostics and personalized medicine, serving as a strong commercialization outlet for advanced cancer tests. Taking a multi-view approach to the diagnosis and treatment of cancer, IDL is working to assemble, through a combination of internal pipeline development, third-party licenses and potential acquisitions, a robust menu of novel, proprietary tests to be offered by it throughout the United States. 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, including the restructuring of its business. These forward-looking statements involve risks and uncertainties and material assumptions - including those related to general business and economic conditions as well as our ability to complete an orderly restructuring of the Company's operations which may include a sale, merger, strategic financing or other business combination - 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.
CONTACT: Company Contact: James R. Howard-Tripp Executive Chairman Office: (905) 209-2030 email@example.com Investor & Media Contact: Stephen Kilmer Kilmer Lucas Inc. Office: (647) 872-4849 firstname.lastname@example.org