Genesis Bioventures Announces 2004 Annual Report Delay and Releases Unaudited Preliminary 2004 Results
New York (ots/PRNewswire)
Genesis Bioventures, Inc. (AMEX:GBI) (GBI) today reported that its Annual Report on Form 10-KSB for the year ended December 31, 2004 was not filed by the deadline of Friday, April 15, 2005. The Company expects to file the 2004 annual report on or before May 15, 2005.
GBI explained that the delay in filing was caused by the termination of the proposed merger with Corgenix Medical Corporation (Corgenix) in January of 2005, which resulted in the collapse of a merger associated financing. GBI was forced to identify new funding sources based on a non-merger related structure. GBI has signed a letter of intent in this regard.
The Company's accountants as well as its auditors would not commence work on the year-end financial statements before past payments were received. An agreement was reached whereby the accountants would be engaged as auditors for the year-end financial statements. The Company filed an extension through Form 12b-25 for late filing of its year-end audited financial statements Form 10-KSB on March 30, 2005. Subsequent to filing Form 12b-25, GBI's accountants were found to be in a conflict of interest that would not permit them to perform the audit.
It was impossible for the Company to engage another firm at such a late date that did not have scheduling constraints and would be able to complete a review and report on the financial statements within the prescribed time period. GBI has now identified alternative auditors and is proceeding to an engagement.
GBI also today released the following unaudited preliminary financial information. The Company stressed that this information was unaudited and had not yet been completed, but that it was not aware of any issues that were likely to result in material adjustments to the amounts reported upon completion of the 2004 audit.
(Unaudited) 2004 2003 Income Statement Data: Amortisation US$1,869,108 US$1,880,315 Loss on foreign exchange 15,275 71,899 Investor relations Stock-based compensation 239,671 434,136 Incurred 2,372 62,267 Legal and accounting 266,385 477,030 Listing and share transfer fees 100,879 82,925 Management and consulting fees Stock-based compensation 44,594 27,500 Incurred (39,300) 112,177 Office and miscellaneous 36,733 83,608 Rent and occupancy costs 56,499 86,875 Salaries and benefits Stock based compensation (335,700) 388,550 Incurred 412,129 548,020 Telephone 16,609 15,791 Travel and promotion 53,900 41,476 Research and development 339,548 367,964 Royalty fees 5,000 Loss before other expense (3,083,722) (4,707,746) Other income (expense) Other income 19,246 104,179 Interest income 744 Interest and bank charges Incurred (409,418) (179,015) Amortisation of deemed discount (1,196,042) (262,317) Gain on debt settlements 457 501,189 Net loss US$(4,669,479) US$(4,542,786) Net loss per common share, basic and diluted US$0.15 US$0.17 Weighted average common shares outstanding 30,225,365 27,201,652 Balance Sheet Data: Current assets US$59,389 US$92,905 Total assets 7,820,948 9,027,588 Current liabilities 4,751,953 3,680,750 Total liabilities 4,751,953 3,680,750 Shareholders' equity 3,068,975 5,346,838 The Company's net losses can be summarised as follows: 2004 2003 Variances Loss before other income (expense) US$(3,083,722) US$(4,707,746) US$1,624,024 Other income (expense) (1,585,757) 164,960 (1,750,717) ------------- ------------- ------------- Loss for the period US$(4,669,479) US$4,542,786 US$(126,693)
The loss before other income (expense) of US$3,083,722, a decrease of US$1,624,024, compared to the 2003 loss of US$4,707,746, reflects a lower level of operating activity as a result of financing, planning and executing the proposed merger with Corgenix. The major items contributing to the decrease were as follows:
- Investor relations are costs incurred by the Company for general financing services and investor relations. These costs of US$242,043 incurred in 2004 showed a reduction of US$254,360 compared to the previous years costs of US$496,403 due to reduced activity during 2004 primarily as a result of the merger and financing negotiations.
- Legal and accounting costs of US$266,385 incurred in 2004 were lower by US$210,645 than the US$477,030 incurred in 2003 primarily due to the increased activity during 2003 planning and executing the documentation for the merger.
- Management and consulting fees of US$5,294 incurred in 2004 were lower by US$134,383, than the US$139,677 incurred in 2003, as a result of reduced activity planning the merger.
- Salaries and benefits incurred in 2004, of US$412,129, were US$135,891 less than US$548,020 incurred in 2003 due to reduction in personnel. Salaries and benefits, stock based compensation is as a result of variable accounting after the repricing of stock options to officers, directors and employees. During 2004 the decline in the Company's stock price resulted in a recovery of US$335,000, a reduction in cost of US$724,250 compared to the expense of US$388,550 incurred in 2003.
Other income (expense) amounting to US$1,585,757 in 2004 represented an increased cost of US$1,750,717 compared to other income of US$164,960 earned in 2003. The major items contributing to this increased cost were as follows:
- Interest and bank charges incurred and amortised, increased by US$1,164,308 for 2004 due to the increase in the beneficial conversion features and discounts related to equity instruments issued along with the promissory notes. The fair value of the equity instruments issued along with the promissory notes is amortised to interest expense over the term to maturity of the promissory notes.
- Gain on debt settlements of US$457 for 2004 is a decrease of US$500,732 compared to the US$501,732 earned in 2003 in preparation for the financing anticipated relating to the proposed merger.
Loss per share was (US$0.15) for the year ended December 31, 2004 compared to (US$0.17) for 2003. The decrease in loss per share is due to the increased weighted average number of shares outstanding. The weighted average number of shares outstanding for the year ending December 31, 2004 was 30,225,365 compared to 27,201,652 for 2003.
The Company's total assets as at December 31, 2004 was US$7,820,948 compared to total assets of US$9,027,588 for 2003. The decrease of US$1,206,640 was primarily due to the amortisation of the Company's medical technology licenses of US$1,807,988 reduced by a loan receivable granted to Corgenix of US$470,000.
About Genesis Bioventures, Inc.
Genesis Bioventures, Inc. (GBI) is a biomedical development corporation focusing on the development and marketing of novel diagnostics. GBI's wholly owned subsidiary, Biomedical Diagnostics, LLC, specialises in the development of cancer diagnostics. The first product commercially available is the MSA as a screen for breast cancer risk. Further information on testing can be found on GBI's website. In addition, the Company has an equity interest in Prion Developmental Laboratories, Inc., (PDL) which specialises in the development of diagnostic tests to detect prion disease. PDL received United States Department of Agriculture (USDA) approval for its Chronic Wasting Disease (CWD) strip test. CWD is similar to Mad Cow Disease but affects deer and elk. More information on PDL can be accessed through GBI's website.
Statements in this press release that are not strictly historical facts are "forward looking" statements (identified by the words "believe", "estimate", "project", "expect" or similar expressions) within the meaning of the Private Securities Litigation Reform Act of 1995. These statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, changes in the regulatory environment, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. The statements in this press release are made as of today, based upon information currently known to management, and the company does not undertake any obligation to publicly update or revise any forward-looking statements.
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