Gemoscan Canada, Inc.
CNSX : GES

Gemoscan Canada, Inc.

March 09, 2011 16:52 ET

Gemoscan Canada Increases Revenue Shows Improvement During Fiscal Q2 Ended January 15, 2011

TORONTO, ONTARIO--(Marketwire - March 9, 2011) - Gemoscan Canada, Inc. ("Gemoscan" or the "Corporation") – (CNSX:GES) is pleased to report its results for the three and six months ended January 15, 2011. All amounts are in Canadian dollars unless stated otherwise. The financial results and Management's Discussion and Analysis of these results may be found at Gemoscan's profile on SEDAR at (www.sedar.com).

OPERATIONAL OVERVIEW AND HIGHLIGHTS

Compared to the same 6-month period last year, Gemoscan recognized a 511% increase in its revenues while reducing its Adjusted Loss as a percentage of sales by 43%. Gemoscan also realized positive cash flow from operations of $11,477 versus cash used in operations of $136,272 for the same period last year. In addition, when compared to the first quarter of its current fiscal year, Gemoscan was able to increase its revenues during its second quarter, ending January 15, 2011, by 24% while decreasing its net loss (after allowing for stock based compensation "Adjusted Loss") as a percentage of sales by 5%. 

Gemoscan's improved performance was related to a greater diversification of its revenue base resulting from the company's marketing initiatives, coupled with new cost control measures relating to redistributing its vendor sources.

Gemoscan is also pleased to announce that, in addition to continuing in his role as Chief Financial Officer of the Corporation, Stephen Gledhill has replaced Brian Kalish as Secretary of the Corporation. Mr. Kalish continues on in his roles as Director, President and Chief Executive Officer of the Corporation.

FINANCIAL OVERVIEW AND HIGHLIGHTS

  • Revenues for the six months ended January 15, 2011, totaled $1,264,072 (2010 - $206,951), with quarterly revenues totaling $698,532 (2010 – $196,791).
  • Cash flow provided from operations for the 6-month period was $11,477 (2010 –cash flow used in operations of $136,272).
  • The Company posted losses over the second quarter and the six months ended January 15, 2011 of $488,789 (2010 - $82,030) and $625,860 (2010 - $135,290), respectively. Losses for both periods included $343,798 in stock-based compensation costs regarding the issuance of options to directors, employees and consultants eligible under the Company's stock option plan.

Brian Kalish, President and CEO, said "I am encouraged with the growth we have achieved, quarter over quarter and year over year. Gemoscan is now well positioned to take advantage of the trends influencing the vastly lucrative: diet, alternative health care and wellness markets. I expect Gemoscan's materialization to continue to develop as the markets we serve persist to intensify globally."

NON-BROKERED PRIVATE PLACEMENT

Gemoscan is also pleased to announce that, subject to regulatory approval, it plans to issue up to 1,250,000 units (the "Units") of the Corporation in a non-brokered private placement (the "Private Placement") at a price of Cdn.$0.40 per Unit for total gross proceeds of up to Cdn.$500,000. Each Unit consisting of one Class A common share ("Common Share") and one Class A common share purchase warrant (a "Warrant").

Each Warrant will entitle the holder to purchase one Class A common share of the Corporation (the "Warrant Share") at a price of Cdn.$0.60 per Warrant Share, for a period of 24 months following the closing of the Private Placement.

Proceeds from the Private Placement will be used to enhance the Corporation's cash on hand and strengthen its working capital position. The securities issued will be subject to a four-month plus one day hold period from the date of closing. Gemoscan currently has a total of 18,065,257 Common Shares outstanding.

In connection with the Private Placement, finder's fees equal to up to 7% of the aggregate gross proceeds of the Private Placement may be payable. The Private Placement and finder's fees are subject to regulatory approval.

ABOUT GEMOSCAN

Founded in 2003 Gemoscan owns and markets the Hemocode System, a well-being assessment and treatment program that uses its own patented technology and services to detect and provide recommendations for the management of food intolerance and its often associated lifestyle affecting conditions such as fibromyalgia, chronic migraines and headaches, weight management, sleeplessness and others.

Gemoscan trades on the Canadian National Stock Exchange under the ticker GES and is quoted on the Munich Stock Exchange under the ticker 1GE.

Forward-Looking Information

This news release contains certain "forward-looking information". All statements, other than statements of historical fact, that address activities, events or developments that Gemoscan believes, expects or anticipates will or may occur in the future. These forward-looking statements reflect the current expectations or beliefs of Gemoscan based on information currently available to Gemoscan. Forward-looking statements are subject to a number of significant risks and uncertainties and other factors that may cause the actual results of Gemoscan to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Gemoscan. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Gemoscan disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Gemoscan believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

The CNSX has not reviewed and does not accept responsibility for the adequacy of this release.

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