o | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Date: June 7, 2013
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COLLABRX, INC.
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By:
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/S/ Thomas R. Mika
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Name:
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Thomas R. Mika
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Title:
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President and Chief Executive Officer
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· | Total revenue for the year was $400,000, with $275,000 coming in the fourth quarter as the Company entered the commercialization phase of its business. Sequentially, revenue in the fourth quarter increased by $250,000 from the $25,000 reported for the third quarter. |
· | The Company’s net loss for Fiscal 2013 was ($3.9) million or ($2.12) per share, compared with net loss of ($1.4) million or ($0.85) per share in the prior fiscal year. The Company’s net loss for the fourth quarter was ($811) thousand, or ($0.43) per share, compared with net loss of ($1.2) million or ($0.61) per share in the third quarter. |
· | Operating expenses totaled $4.4 million for the fiscal year ended March 31, 2013, and included the expenses of the merged company since its acquisition date of July 12, 2012. Of that amount, $829 thousand were non-cash charges for depreciation, amortization and stock compensation expense. Operating Expenses for the fourth quarter were $1.1 million, which included approximately $272 thousand for non-cash charges. This represented a reduction in operating expenses from the third quarter of Fiscal 2013, which came in at $1.3 million and included $222 thousand of non-cash charges. |
· | The operating loss for Fiscal 2013 was ($4.1) million, compared to ($2.5) million in the prior year. During the fourth quarter, the operating loss was ($848) thousand, compared to operating loss of ($717) thousand in the fourth quarter of the prior fiscal year, and ($1.3) million in the third quarter of Fiscal 2013. |
· | CollabRx ended the Fiscal Year 2013 with approximately $4 million in cash and cash equivalents. |
· | The fourth quarter of Fiscal 2013 marked the initial revenues generated by the commercial laboratory products and services of CollabRx, Inc., a data analytics company that uses cloud-based expert systems to inform healthcare decision-making. |
· | The Company formed a Pan Cancer (biomarker-focused) molecular oncology editorial board to be led by Razelle Kurzrock, M.D., who will serve as Chief Editor. The Pan Cancer board is the most recent addition among CollabRx’s existing editorial boards, which identify clinically actionable biomarkers in the context of individual cancer types such as lung cancer or melanoma. The Pan Cancer editorial board is differentiated in that it will apply a broad molecular oncology perspective in the identification of biomarkers that are clinically actionable in any cancer type. Background about the editorial board can be found on the company’s website (http://www.collabrx.com/expert-affiliations/cancer-specific-editorial-boards/pan-cancer/). |
· | Under the terms of a multi-year partnership agreement with Life Technologies Corporation (NASDAQ: LIFE), CollabRx accelerated activities during the Fiscal Fourth Quarter related to the development and commercialization of CollabRx technology and content resources to be used in conjunction with Life Technologies’ global cancer diagnostics activities and its laboratory developed test services business. |
· | CollabRx and Projects In Knowledge, Inc., a leading developer of point-of-care digital and mobile information tools and continuing medical education (CME/CE) programs, announced a multi-year partnership agreement to jointly distribute informational point-of-care software applications to the more than 35,000 oncologists and other clinicians in the Projects In Knowledge clinician network. |
· | CollabRx announced the formation of an editorial board for prostate cancer to be led by E. David Crawford, M.D. who will serve as Chief Editor. Dr. Crawford is the distinguished Professor of Surgery, Urology, and Radiation Oncology, and head of the Section of Urologic Oncology at the University of Colorado Anschutz Medical Campus. Dr. Crawford will lead a distinguished group of physicians from leading institutions such as Yale University, University of Michigan, Cleveland Clinic, Dana-Farber Cancer Institute, and others. |
· | CollabRx announced the formation of a Pan Cancer (biomarker-focused) molecular oncology editorial board to be led by Razelle Kurzrock, M.D., who will serve as Chief Editor. Dr. Kurzrock is Director of the Center for Personalized Therapy at UC San Diego Moores Cancer Center, Vice Chief of the Hematology-Oncology Division in the UC San Diego School of Medicine and Senior Deputy Center Director, Clinical Science, for UC San Diego Moores Cancer Center. |
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March 31,
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March 31,
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||||||
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2013
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2012
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||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$
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4,039
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$
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7,820
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||||
Accounts receivable
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250
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0
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||||||
Prepaid expenses and other current assets
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102
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56
|
||||||
Other assets of discontinued operations
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11
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418
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||||||
Total current assets
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4,402
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8,294
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||||||
Property and equipment, net
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142
|
56
|
||||||
Intangible assets, net
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1,490
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-
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||||||
Goodwill
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603
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-
|
||||||
Investment in convertible promissory note
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345
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312
|
||||||
Total assets
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$
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6,982
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$
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8,662
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable, accrued expenses and current liabilities
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$
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167
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$
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317
|
||||
Common stock warrant liability
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10
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19
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||||||
Liabilities of discontinued operations
|
16
|
246
|
||||||
Total current liabilities
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193
|
582
|
||||||
Deferred tax liability
|
581
|
-
|
||||||
Promissory Note
|
504
|
-
|
||||||
Total liabilities
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1,278
|
582
|
||||||
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||||||||
Stockholders’ equity:
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||||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued and outstanding
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-
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-
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||||||
Common stock, $0.01 par value; 50,000,000 shares authorized; 1,952,980 and 1,688,807 shares issued and outstanding at March 31, 2013 and March 31, 2012, respectively
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19
|
17
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||||||
Additional paid-in capital
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130,602
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129,052
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||||||
Accumulated other comprehensive loss
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(142
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)
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(142
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)
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Accumulated deficit
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(124,775
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)
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(120,847
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)
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Total stockholders’ equity
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5,704
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8,080
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Total liabilities and stockholders’ equity
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$
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6,982
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$
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8,662
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||||
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Three Months Ended
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Twelve Months Ended
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||||||||||||||
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March 31,
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March 31,
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||||||||||||||
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2013
|
2012
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2013
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2012
|
||||||||||||
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||||||||||||||||
Revenue
|
$
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250
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$
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-
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$
|
300
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$
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--
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||||||||
Revenue - related party
|
25
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25
|
100
|
100
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||||||||||||
Total revenue
|
275
|
25
|
400
|
100
|
||||||||||||
Cost of revenue
|
18
|
--
|
56
|
--
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||||||||||||
Gross profit
|
257
|
25
|
344
|
100
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Engineering
|
243
|
--
|
568
|
--
|
||||||||||||
Research and development
|
169
|
--
|
457
|
--
|
||||||||||||
Sales and marketing
|
73
|
--
|
249
|
--
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||||||||||||
General and administrative
|
620
|
742
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3,165
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2,615
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||||||||||||
Total operating expenses
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1,105
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742
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4,439
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2,615
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Operating loss
|
(848
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)
|
(717
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)
|
(4,095
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)
|
(2,515
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)
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||||||||
Equity in loss of unconsolidated affiliate
|
--
|
(1,545
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)
|
--
|
(2,046
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)
|
||||||||||
Other income (expense), net
|
10
|
12
|
39
|
18
|
||||||||||||
Loss before income tax benefit
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(838
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)
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(2,250
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)
|
(4,056
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)
|
(4,543
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)
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||||||||
Income tax benefit
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(31
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)
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--
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(83
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)
|
--
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||||||||||
Loss from continuing operations
|
(807
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)
|
(2,250
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)
|
(3,973
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)
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(4,543
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)
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||||||||
Gain on sale of discontinued operations, net of taxes
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--
|
--
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--
|
2,930
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||||||||||||
Income (loss) from discontinued operations, net of taxes
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(4
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)
|
23
|
45
|
184
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|||||||||||
(Loss) income from discontinued operations, net of taxes
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(4
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)
|
23
|
45
|
3,114
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|||||||||||
Net loss
|
(811
|
)
|
(2,227
|
)
|
(3,928
|
)
|
(1,429
|
)
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||||||||
|
||||||||||||||||
Other comprehensive income
|
--
|
--
|
--
|
25
|
||||||||||||
Comprehensive loss
|
$
|
(811
|
)
|
$
|
(2,227
|
)
|
$
|
(3,928
|
)
|
$
|
(1,404
|
)
|
||||
|
||||||||||||||||
Net loss per share from continuing operations:
|
||||||||||||||||
Basic and diluted
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$
|
(0.43
|
)
|
$
|
(1.33
|
)
|
$
|
(2.14
|
)
|
$
|
(2.69
|
)
|
||||
Net income per share from discontinued operations:
|
||||||||||||||||
Basic and diluted
|
$
|
-
|
$
|
0.01
|
$
|
0.02
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$
|
1.84
|
||||||||
Total net loss per share:
|
||||||||||||||||
Basic and diluted
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$
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(0.43
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)
|
$
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(1.32
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)
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$
|
(2.12
|
)
|
$
|
(0.85
|
)
|
||||
|
||||||||||||||||
Weighted-average shares used in per share computation:
|
||||||||||||||||
Basic and diluted
|
1,886
|
1,689
|
1,856
|
1,689
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Operator: | Good day, ladies and gentleman, and thank you for standing by and welcome to the CollabRx Inc.’s Fourth Quarter and Fiscal Full Year 2013 Financial Conference Call and Business Update. At this time, all participants are in the listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. |
Robert Ferri: | Good day, everyone, and welcome to the CollabRx Fourth Quarter and Full Year Fiscal 2013 Financial Conference Call and Business Update. Today's call is being recorded. |
Thomas Mika: | Thanks Bob. Good afternoon and welcome to CollabRx Investor Conference Call. I will be covering both the financial portion of this call as well as the business update. Following my review of the fourth quarter and fiscal 2013 as a whole, we will open up the call for questions. |
Operator: | Sure. Thanks, sir. Ladies and gentlemen on the phone lines, to queue up for a question, please press star then one on your touchtone phone. If your question has been answered or you wish to remove yourself from the queue, you may press the pound key. |
John Banks: | Congratulations on a sequential growth in the company. It looks good. Just a couple of questions. The first one, are you going to break down on the revenues in the fourth quarter going forward between like fee-based or advertising? Was that most of the revenue from Life Technologies in the fourth? |
Thomas Mika: | We are not planning to break those revenue sources down. And, as I said, the recurring revenue is expected to occur later in the year, so you can assume that the revenue that we booked was fee for services. |
John Banks: | OK. My second point, in the last conference call you said a deal similar to maybe Life or a large deal, would move you a lot closer to profitability and scalability. I know you cannot comment, but how is that going on the pipeline? |
Thomas Mika: | The pipeline is very robust and includes potential partnerships on both the laboratory side and on the clinical side. |
John Banks: | OK. You got to address it, but your scalability is pretty big with the company in regards to hiring and expense side, am I correct? |
Thomas Mika: | It is. Our plans do not add very significantly to our expense levels throughout the remainder of the year. |
John Banks: | OK. And my final question, as you know, there is like a ton of deals in the space right now, you know, going for crazy premiums, why would not somebody come in and just try to buy you guys in just such a small market cap of $15 million or $20 million? Or you would rather just grow it then maybe sell it in the future? |
Thomas Mika: | I think we have tremendous opportunities to grow this company, and I do not think that our current market cap reflects in any form our current value. |
John Banks: | OK. Congratulations. Very exciting going forward. Keep up the good work. |
Thomas Mika: | Thanks, John. |
Operator: | Thank you. Our next question will come from the line of Spencer Lehman with Financial West. Please go ahead. Your line is open. |
Spencer Lehman:
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Hi, Tom.
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Thomas Mika: | Hello, Spencer. |
Spencer Lehman: | You are certainly developing an exciting company. I am wondering if you and Bob could just discuss a little bit about what you are doing to get on the radar and expose the company to investors, you know, currently and maybe your plans to the coming year? |
Thomas Mika: | Well, I will make a few remarks and then Bob can add to it if he wishes. We have been out with, I would call them two groups of potential investors to let them know about the company and what we would call non-deal road shows. |
Robert Ferri: | Sure. Not terribly much, but Spencer, yes we are meeting with more and more investors, fund managers, more and more brokers and groups of brokers. So, you know, over time with a steady drumbeat of this kind of thing, I think we are going to see more and more awareness of the stock and presumably the opportunity for a lot more sponsorship and participation in the stock. |
Spencer Lehman: | OK, thank you. |
Thomas Mika: | Welcome. |
Spencer Lehman: | Sounds great. |
Thomas Mika: | Thank you. |
Operator: | Thank you, sir. And again, ladies and gentlemen, if you would like to ask a question at this time, please press star then one on your touchtone phone. Again, star-one to queue up for a question. One moment. |
Gary Ferman: | Hi, Tom. My first question to you is, you mentioned that one of the valuable assets, and I totally agree, of Tegal, now CollabRx, is its very substantial net operating loss carry-forwards. What are you and the board doing to actually maximize and make use of that carry-forward in the foreseeable future, realizing that it is unlikely in the short term that CollabRx will be able to actually make use of it itself because the amount is so large? |
Thomas Mika: | Well, Gary, since you are from – I guess you are associated with law, so you probably know that there are very strict regulations regarding how those net operating loss carry-forwards can be used. |
Gary Ferman: | And my second question to you really relates to Life Technologies and how now with that inroad and the new affiliation of Life Technologies, does that provide further direct possibilities for CollabRx? Because that is perhaps the most important deal that has been publicized to date. |
Thomas Mika: | Yes. For sure it is the most important deal that we have publicized to date. And Life Technologies is a very important customer and partner with us. We have a very good relationship with the head of their medical sciences division. |
Gary Ferman: | Well, I am delighted to hear that, and I think it is very good to hear positive news and I just hope that you continue to make these positive news public and really to try and get the CollabRx name better known in the investing universe. Thank you. |
Thomas Mika: | We will do that. |
Operator: | Thank you, sir. Our next question will come from the line of Chris Lahiji with LD Micro. Please go ahead. Your line is open. |
Chris Lahiji: | Yes. Thanks for the call. I have a quick question, Tom. What is the amount of tax loss carry-forward right now for the company? |
Thomas Mika: | About $100 million in federal and $40 million in California State. |
Chris Lahiji: | OK. And I am just trying to get a better understanding of what the competitive landscape is for you guys. How do you ultimately look at the other people on the space? I mean, what is the way of being distinctive from their own products and services? |
Thomas Mika: | Our major point of distinction is two things. One is that our knowledge base is informed and vetted by more than 75 of the top cancer researchers and clinicians in the United States whom we work with closely under the direction of Dr. George Lundberg who is an eminent pathologist and our editor-in-chief. |
Chris Lahiji: | I see. And my last question is, and I think we have talked about this on the last call, are there any mobile applications for this, or it is still relatively premature to talk about? |
Thomas Mika: |
No, I can sort of paint a picture for you. We are developing a product on the clinical side in molecular oncology based on what we have developed for our Web-based application which has been well received by oncologists.
|
Chris Lahiji: | Excellent. Well, listen, thank you so much for answering my questions, and best wishes moving forward. |
Thomas Mika: | Thank you very much, Chris. |
Operator: | Thank you, sir. Our next question will come from the line of (David Zalkowitz), who is a private investor. Please go ahead. Your line is open. |
(David Zalkowitz): | Yes. Thank you. I am looking at the makeup of the Board of Directors. Your outside directors, obviously Jeff Krauss has multiple industry experience, but both Carl and Gilbert come from technology backgrounds, hardware technology backgrounds, PC backgrounds. |
Thomas Mika: | Well, first thing I would say is that you mentioned outside directors, and while technically James Karis is not an outside director because he was co-CEO of CollabRx and the former CEO, he has a large amount of healthcare industry experience as does Jeff Krauss. And so, you know, I think we are pretty well covered on the healthcare industry. |
(David Zalkowitz): | Thank you. And then there has been some press lately about IBM's Watson supercomputer getting involved in the cancer diagnosis and treatment. |
Thomas Mika: | Yes. I am glad you actually brought that up, because I think that there are some major issues with Watson, particularly what they are doing in the healthcare industry. And the reason is that they are involved with predictive analytics. And so they are clinching a lot of data and employing what we think are black-box algorithms to come up with an answer, which is not the way medicine has been practiced. |
(David Zalkowitz): | Right. And last question, Qiagen bought Ingenuity Systems a month or two ago, obviously Ingenuity Systems with a deal with Life Technologies, that they announced at the similar time they did your deal. Has that been an issue in terms of, you know, Life's view on development of what they are trying to do to have a big firm like Qiagen who is a competitor of theirs, bioengineering systems and, you know, the context of you guys being independent, potential acquirer of yours, you know, having any issue there in terms of ongoing development of that program? |
Thomas Mika: | You know, I am struggling to try to find something that I can really comment on in that question. You know, I do not know the rationale for any of those acquisitions. I do know, you know, what our relationship is with Life and I can comment on that, but I would be speculating on anything else. |
(David Zalkowitz): | Thank you. |
Thomas Mika: | You’re welcome. |
Operator: | Thank you, sir. Our next question will come from Brian Kobel with Laidlaw & Company. Please go ahead. Your line is open. |
Brian Kobel: | Hi, Tom. Hi, Bob. How are you? |
Thomas Mika: | Fine, Brian. Thanks. |
Brian Kobel: | Good. So to kind of touch on Chris' question earlier, you know, briefly, do you have any public comps that you look at and track internally? And additionally, when you do look at them or you look at the metrics they are valued at, are we best to look at you from a data aggregation standpoint or better from a user standpoint, you know, relative to non sort of numerical fundamentals, if you will? |
Thomas Mika: | Well, on the clinical side, I would say that going forward you ought to look at us – you ought to look at the ePocrates business model. |
Brian Kobel: | OK. And just kind of brief follow-up questions, is, one, well, how scalable is your business both from the perspective of the infrastructure you have to support revenue and profitability? You know, would you need to add key additional personnel at 5 million, 6 million, 7 million, 10 million? |
Thomas Mika: | So this is not – we are not Pinterest or, you know, we are not in that yet, in that sort of consumer area where you can get that kind of rapid adoption. So, I would see this as somewhat slower than that, though it is difficult to predict. |
Brian Kobel: | Great. Thank you, and congratulations on the great quarter. |
Thomas Mika: | Thank you very much. Thanks, Brian. |
Operator: | Thank you, sir. And again, ladies and gentlemen, if you would like to queue up for a question at this time, you may press star then one on your touchtone phone. Again, star-one to queue up for a question. One moment. |
Robert Ferri: | Thank you. This concludes today's conference call. Thank you for your support and thank you for joining us today. |
Operator: | Thank you, gentlemen. Again, ladies and gentlemen, this does conclude today's conference. Thank you for your participation and have a wonderful day. Attendees, you may disconnect at this time. |