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))
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Item 2.02.
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Results of Operations and Financial Condition
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Item 9.01
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Financial Statements and Exhibits
|
99.1 | Press Release dated February 11, 2014 |
99.2 | Transcript of CollabRx Inc.’s third quarter fiscal year 2014 conference call held on February 11, 2014. |
Date: February 12, 2014
|
|
COLLABRX, INC.
|
|
By:
|
/S/ Thomas R. Mika
|
||
Name:
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Thomas R. Mika
|
||
Title:
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President and Chief Executive Officer
|
· | A multi-year agreement with Quest Diagnostics (NYSE:DGX) to provide medical and scientific content for its Next Generation Sequencing (NGS)-based tests. Quest Diagnostics will incorporate genomic-related content aggregated and annotated by CollabRx into the reports provided in connection with one or more diagnostic tests to be offered to its commercial and pharmaceutical clients. |
· | A multi-year agreement to with Cynvenio Biosystems, Inc., a cancer diagnostics company, to access CollabRx technology and content resources in support of the clinical interpretation of genetic sequencing-based tests provided by Cynvenio. Cynvenio’s breakthrough ClearID™ Breast Cancer blood test monitors breast cancer survivors at high risk of recurrence. |
· | Following the launch of its Genetic Variant Annotation™ (GVA™) service in the second fiscal quarter, and its announcement of these agreements, CollabRx enjoyed a significant expansion of its pipeline of prospective lab customers, across a range of labs, including commercial reference labs, specialty labs and academic medical centers. |
· | Subsequent to the end of the quarter, the Company entered into a multi-year agreement to provide its GVA service to CellNetix Pathology & Laboratories, LLC, a leading anatomic pathology testing and services provider, in support of the clinical interpretation of genetic sequencing-based tests conducted by CellNetix for hospitals. |
· | Total operating revenue for the quarter was $56,000, which included integration services performed in connection with the Company’s GVA service and the beginning of related recurring test revenues. Revenue for the same quarter of the prior fiscal year was zero. Although revenue is lower on a sequential basis, the Company believes the character of revenue has changed in a positive direction, moving from fee-for-service to recurring revenue. |
· | Gross margins for the quarter were (86%) of revenue or ($48,000), compared to 28% of revenue or $7,000 in the same quarter of the prior fiscal year. |
· | The Company’s net loss for the third quarter of fiscal year 2014 was ($1,004,000) or ($0.52) per share, compared with net loss of ($1,152,000) or ($0.61) per share for the same period in the prior fiscal year. |
· | Operating expenses totaled $973,000 for the third quarter. Of that amount, $158,000 were non-cash charges for depreciation, amortization, and stock compensation expense. This represented a decrease in operating expenses from the third quarter of fiscal year 2013, which came in at $1,276,000 and included $243,000 of non-cash charges, and a decrease from the immediately preceding quarter (Q2FY’14) which came in at $1,105,000, including $152,000 of non-cash charges. The quarter to quarter decrease of $132,000 of operating expenses resulted primarily from lower costs for legal, consulting and recruiting expenses as well as cost of revenue reclassification from operating expenses. |
· | The operating loss for fiscal year 2014 third quarter was ($1,021,000), compared to ($1,269,000) in the prior year and ($872,000) in the immediately preceeding quarter. |
· | The Company ended the third quarter with approximately $2.4 million in cash, which was a reduction of $1,673,000 from the end of the prior fiscal year and a reduction of $425,000 from the immediately preceding quarter. |
|
December 31,
|
March 31,
|
||||||
|
2013
|
2013* | ||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
2,366
|
$
|
4,039
|
||||
Accounts receivable
|
55
|
250
|
||||||
Prepaid expenses and other current assets
|
164
|
102
|
||||||
Deferred financing costs
|
129
|
--
|
||||||
Investment in convertible promissory note
|
370
|
--
|
||||||
Other assets of discontinued operations
|
--
|
11
|
||||||
Total current assets
|
3,084
|
4,402
|
||||||
Property and equipment, net
|
135
|
142
|
||||||
Intangible assets, net
|
1,334
|
1,490
|
||||||
Investment in convertible promissory note
|
--
|
345
|
||||||
Goodwill
|
603
|
603
|
||||||
Total assets
|
$
|
5,156
|
$
|
6,982
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable, accrued expenses and other current liabilities
|
$
|
355
|
$
|
167
|
||||
Common stock warrant liability
|
--
|
10
|
||||||
Liabilities of discontinued operations
|
6
|
16
|
||||||
Total current liabilities
|
361
|
193
|
||||||
Deferred tax liability
|
520
|
581
|
||||||
Promissory note
|
508
|
504
|
||||||
Other long-term liabilities
|
12
|
--
|
||||||
Total liabilities
|
1,401
|
1,278
|
||||||
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued and outstanding
|
--
|
--
|
||||||
Common stock, $0.01 par value; 50,000,000 shares authorized; 1,962,960 shares issued and outstanding at December 31, 2013 and 1,952,960 at March 31, 2013, respectively
|
19
|
19
|
||||||
Additional paid-in capital
|
130,874
|
130,602
|
||||||
Accumulated other comprehensive loss
|
--
|
(142
|
)
|
|||||
Accumulated deficit
|
(127,138
|
)
|
(124,775
|
)
|
||||
Total stockholders’ equity
|
3,755
|
5,704
|
||||||
Total liabilities and stockholders’ equity
|
$
|
5,156
|
$
|
6,982
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Revenue
|
$
|
56
|
$
|
-
|
$
|
577
|
$
|
50
|
||||||||
Revenue - related party
|
--
|
25
|
--
|
75
|
||||||||||||
Total revenue
|
56
|
25
|
577
|
125
|
||||||||||||
Cost of revenue
|
104
|
18
|
140
|
38
|
||||||||||||
Gross (loss) profit
|
(48
|
)
|
7
|
437
|
87
|
|||||||||||
Operating expenses:
|
||||||||||||||||
Engineering
|
473
|
--
|
1,199
|
390
|
||||||||||||
Research and development
|
21
|
353
|
234
|
339
|
||||||||||||
Sales and marketing
|
57
|
131
|
196
|
185
|
||||||||||||
General and administrative
|
422
|
792
|
1,410
|
2,421
|
||||||||||||
Total operating expenses
|
973
|
1,276
|
3,039
|
3,335
|
||||||||||||
Operating loss
|
(1,021
|
)
|
(1,269
|
)
|
(2,602
|
)
|
(3,248
|
)
|
||||||||
Other income, net
|
7
|
9
|
33
|
29
|
||||||||||||
Loss before income tax benefit
|
(1,014
|
)
|
(1,260
|
)
|
(2,569
|
)
|
(3,219
|
)
|
||||||||
Income tax benefit
|
(20
|
)
|
(52
|
)
|
(61
|
)
|
(52
|
)
|
||||||||
Loss from continuing operations
|
(994
|
)
|
(1,208
|
)
|
(2,508
|
)
|
(3,167
|
)
|
||||||||
Gain on sale of discontinued operations, net of taxes
|
--
|
--
|
267
|
--
|
||||||||||||
Income (loss) from discontinued operations, net of taxes
|
(10
|
)
|
56
|
(122
|
)
|
52
|
||||||||||
Net income (loss) from discontinued operations, net of taxes
|
(10
|
)
|
56
|
145
|
52
|
|||||||||||
Net Loss and comprehensive loss
|
$
|
(1,004
|
)
|
$
|
(1,152
|
)
|
$
|
(2,363
|
)
|
$
|
(3,115
|
)
|
||||
|
||||||||||||||||
Net loss per share from continuing operations:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.51
|
)
|
$
|
(0.64
|
)
|
$
|
(1.28
|
)
|
$
|
(1.76
|
)
|
||||
Net income (loss) per share from discontinued operations:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.01
|
)
|
$
|
0.03
|
$
|
0.07
|
$
|
0.03
|
|||||||
Net loss per share:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.52
|
)
|
$
|
(0.61
|
)
|
$
|
(1.21
|
)
|
$
|
(1.73
|
)
|
||||
|
||||||||||||||||
Weighted-average shares used in per share computation:
|
||||||||||||||||
Basic and diluted
|
1,963
|
1,884
|
1,955
|
1,798
|
Operator: | Good day, everyone. Welcome to the CollabRx Third Quarter Fiscal 2014 Financial Conference Call and Business Update. Today’s call is being recorded. Please note that a recording of this conference call will be made available two hours after the completion of the call and it will be available for one year via the Web, using the link referenced in company’s logistic announcement of January 31, 2014, the financial results press release of today as well as on the company’s Web site. |
Thomas Mika: | Thank you. Good afternoon and welcome to CollabRx's third quarter fiscal 2014 investor conference call. Luisa Fonseca, our Corporate Controller will be covering the financial portion of this call and she will turn it back to me for the business update. Following my review of the quarter, we will open up the call for questions. I’ve asked Gavin Gordon, Vice President of Business Development and Strategic Alliances to join me during this call and to be available for the Q&A period at the end of my remarks. |
Luisa Fonseca: | Thank you, Tom. CollabRx acquired a total of $56,000 of revenue for the third fiscal quarter of the current year. While lower than the previous three quarters, each of which came in about $250,000. The type of revenue generated this quarter represented an important milestone that Tom will discuss further in this call. |
Thomas Mika: | Thank you, Luisa. Although our revenues were somewhat off this quarter, the character of our revenues changed in a positive direction. We are moving fee per service to recurring revenue. It's in small amounts, but it represents the beginning of what we have been preparing for the past 12 months. |
Operator:
|
Thank you, sir. Ladies and gentlemen to ask a question please press star one, on your touch tone telephone. If your question has been answered or you wish to remove yourself from the question queue, please press the pound key. Again to ask a question press star one on your touch tone telephone. That's star one on your touch tone telephone to ask a question.
|
Juan Noble: | That was very helpful. I was just wondering if you could help us understand the pricing structure that goes into your agreements, particularly the price recovery in GVA. If you could give us an illustration in dollar terms how you would scale the auto and what the potential of these near-term for several of these contracts might be? |
Thomas Mika: | Juan, I would be happy to. In and approaching the pricing for our GVA service, we wanted to accomplish two significant goals. One was as diagnostic companies face this make or buy decision, we didn't want to price is too high, because in that even these companies may decide in fact to do it in-house rather than to use our service. |
Juan Noble: | That's very helpful. Just one follow-up question here, when you are talking about scale, well, let's says, in the first year of the contract. You are talking about scale. Roughly how many tests would you expect to all parse to your house? |
Thomas Mika: | Yes. So, we haven't done the net estimate, Juan, but let me give you the reference of Foundation Medicine, who is definitely the pioneer in this space and who is at least a year to two years ahead of other labs. |
Thomas Mika: | Just to put some numbers around that, there are 1.6 million new cancer patients diagnosed each year with 12 million people currently in the United States having been diagnosed and living with cancer.. |
Juan Noble: | OK. Good. That's very helpful, Tom. Thanks very much for your help. Let's do this later on offline. |
Thomas Mika: | OK. Juan. |
Operator: | Thank you. Our next question comes from Alex West of Garden Capital Partners. Your line is open. |
Alex West: | Looks like you guys are there commercially. I would like to learn how and when things ramp or meaningful increase from this $56,000, which is a beginning as it increased sales people. I have a follow-up as well. |
Thomas Mika: | Yes. Alex, I do think we are going to be moving here very soon from a business development mode to a marketing and sales activity. That that doesn't necessarily mean a large scale sales force, but it does mean some more directed marketing activity and some sales activity at least at a national accounts level. What we have done and what Gavin has done is really focused on the largest of the commercial and reference labs, which we know are entering the oncology space. And you would expect us to start there, because those are the labs that are going to be generating the highest volume. |
Alex West: | Thank you. I did have a follow-up question. I am just trying to understand where breakeven is for the company and you can conceivably get there in the new fiscal year. |
Thomas Mika: | Breakeven is around $4 million in revenue, somewhere between $4 million and $4.5 million in revenue. All of our expenses are basically salaries, but we had covered this before. We have about $3 million per year and in salaries we have got about $1 million in public company costs and I don't expect expenses to increase except very much on the margin. |
Alex West: | Thank you. |
Thomas Mika: | You're welcome. |
Operator: | Thank you. Again to ask a question press star one on your touch tone telephone. That's star one on your touch tone telephone to ask a question. |
(Michelle Stone): | Thank you. What percentage of revenue do you think the Web and mobile Therapy Finders can be in the next fiscal year as well as during the next five years? |
Thomas Mika: | That's an excellent question. We think that the Therapy Finders, in the coming fiscal year could be in the area of between 25 percent and 50 percent of our total revenue. I think going forward a couple years, I would still maintain about 50 percent of revenue model of between Therapy Finders and the GVA. |
(Michelle Stone): | Yes. It does. Thank you. |
Thomas Mika: | You are welcome. |
Operator: | Thank you, and as there appear to be no further questions in queue at this time, that does conclude our Q&A session and our call for the day. Thank you for your participation. You may disconnect your lines at this time. Have a great day. |