Warnex Inc.
NEX BOARD : WNX
TSX VENTURE : WNX.H

Warnex Inc.

May 29, 2013 17:01 ET

Warnex Reports First Quarter 2013 Results

LAVAL, QUEBEC--(Marketwired - May 29, 2013) - Warnex Inc. (TSX VENTURE:WNX.H)(NEX:WNX) ("Warnex") announced today financial results for the first quarter ended March 31, 2013.

Q1-2013 highlights

Subsequent to quarter-end, the Company announced that Mr. Marc Lebel, Mr. Louis Lacasse and Mr. Patrice Hugo have agreed to resign as Directors of Warnex. In addition, Mr. Jean Vézina, the Company's interim Chief Financial Officer has also agreed to step down as of May 29, 2013. Furthermore, Mr. Sean Karamchandani has been appointed as Director and will replace Mr. Lebel as the Company's interim Chief Executive Officer and Mr. Vézina as the Company's interim Chief Financial Officer until further notice.

"The Company's financial position at March 31, 2013 and as of today remains in good health as the Board continues to evaluate a number of potential strategic options. The significant cost containment measures recently completed during the first quarter have fittingly positioned the Company's Board to carefully and thoughtfully evaluate all identified opportunities in advance of making its final recommendation to shareholders without placing excessive pressures on the Company's existing working capital," remarked Michael Singer, Chairman of Warnex. "We look forward in reaching a conclusion and eventual recommendation to Warnex shareholders pursuant to the ongoing strategic review."

Financial results

Consolidated revenue for the three-month period ended March 31, 2012, amounted to $nil compared to $5.7 million for the same period last year. The Company did not generate any sales, nor related cost of goods sold in the first quarter of 2013, as a result of the sale of all of its operating divisions in 2012.

Net loss for the quarter amounted to $453,637, or $0.02 per share compared to net loss of $863,945 or $0.01 per share for the same quarter in 2012.

General and administrative expenses amounted to $452,119 for the quarter compared to $1,090,935 for the same quarter last year. General and administrative expenses consisted primarily of corporate legal fees amounting to approximately $200,000 for certain one-time mandates and for ongoing general corporate matters; operating lease costs, net of sublease revenues, amounting to approximately $120,000; professional and consulting fees of approximately $40,000; board of director fees of approximately $80,000; and other administrative costs of approximately $10,000.

Financial expenses for the quarter amounted to $1,518 compared to $298,959 for the same quarter last year.

The Company ended the first quarter of 2013 with cash of $2.6 million and working capital of $4.2 million, compared to $2.7 million in cash and a working capital of $4.7 million as at December 31, 2012.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For further information identifying known risks and uncertainties, relating to financial resources, liquidity risk, volatility of share price and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

Neither NEX nor its Regulation Services Provider (as that term is defined in policies of the NEX) accepts responsibility for the adequacy or accuracy of this release.

Financial statements to follow.

Interim Consolidated Statements of Financial Position
(Unaudited)
March 31
2013
$
December 31
2012
$
Assets
Current assets
Cash and cash equivalents 2,573,745 2,742,114
Trade and other receivables 2,045,563 1,804,421
Prepaid expenses 111,004 70,779
4,730,312 4,617,314
Non-current assets
Amount receivable held in trust - 600,000
4,730,312 5,217,314
Liabilities
Current liabilities
Trade and other payables 514,882 457,317
Provisions - 90,930
514,882 548,247
Shareholders' equity
Capital stock 41,706,049 41,706,049
Other reserves 2,803,559 2,803,559
Deficit (40,294,178 ) (39,840,541 )
4,215,430 4,669,067
4,730,312 5,217,314

Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)

Other reserves
Capital
stock
$
Equity components of debentures
$
Share-based compensation
$
Other
$
Total other reserves
$
Deficit
$
Total
$
Balance, December 31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (39,840,541 ) 4,669,067
Net and comprehensive loss - - - - - (453,637 ) (457,637 )
Balance,March 31, 2013 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (40,294,178 ) 4,215,430
Balance, December 31, 2011 40,981,049 1,734,404 1,028,149 41,006 2,803,559 (40,863,719 ) 2,920,889
Issuance of common shares 725,000 - - - - - 725,000
Net and comprehensive loss - - - - - (863,945 ) (863,945 )
Balance, March 31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (41,727,664 ) 2,781,944
Interim Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
For the three months ended March 31 2013
$
2012
$
Revenue - 3,733,565
Cost of goods sold - 3,223,753
Gross margin - 509,812
Operating expenses
Selling - 58,863
General and administrative 452,119 1,090,935
Finance 1,518 298,959
Research and development tax credits - (75,000 )
453,637 1,373,757
Net and comprehensive loss (453,637 ) (863,945 )
Basic loss per share ($0.02 ) ($0.05 )
Diluted loss per share ($0.02 ) ($0.05 )
Weighted average number of shares outstanding 28,323,884 18,809,115
Weighted average number of diluted shares outstanding 28,323,884 18,809,115
Interim Consolidated Statements of Cash Flow
(Unaudited)
For the three months ended March 31 2013
$
2012
$
Operations
Net loss (453,637 ) (863,945 )
Items not affecting cash:
Depreciation of property, plant and equipment - 248,163
Amortization of intangibles - 10,202
Capitalized fees and interest on debentures - 227,002
(453,637 ) (378,578 )
Net change in non-cash working capital items 285,268 69,198
Net cash used in operations (168,369 ) (309,380 )
Investing activities
Acquisition of property, plant and equipment - (40,639 )
Net cash used by investing activities - (40,639 )
Financing activities
Increase in bank loan - 210,000
Repayment of long term debt - (40,628 )
Repayment of debentures - (250,000 )
Net cash used in financing activities - (80,628 )
Decrease in cash and cash equivalents (168,369 ) (430,647 )
Cash and cash equivalents, beginning of period 2,742,114 1,285,236
Cash and cash equivalents, end of period 2,573,745 854,589

Contact Information

  • Michael Singer
    Chairman of the Board of Directors
    Warnex Inc.
    (450) 663-6724 (ext 311)
    info@warnex.com