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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
FILING NO. 1 FOR THE MONTH OF AUGUST, 1999
VISIBLE GENETICS INC.
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(Exact name of Registrant)
700 BAY STREET, SUITE 1000, TORONTO ON, CANADA M5G 1Z6
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F __
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes __ No X
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VISIBLE GENETICS INC.
On August 6, 1999, the Company announced its results for the second quarter
ended June 30, 1999. All figures are in United States dollars.
Sales in the second quarter of 1999 were $1.9 million compared to $2.5 million
in the second quarter of 1998. The net loss for the second quarter of 1999 was
$7.1 million, or $0.75 per share, compared to a net loss of $4.2 million, or
$0.56 per share, in the second quarter of 1998.
For the six months ended June 30, 1999, sales were $5.2 million with a loss per
share of $1.21 compared to sales of $3.6 million and a loss per share of $0.97
for the corresponding period in 1998.
The increase in the net loss for the quarter was due to increased general and
administrative expenses related to developing the Company's infrastructure, for
international sales and marketing activities, and a provision, totaling $0.3
million, for bad debt and warranty expenses. In addition, the cost of goods sold
for the period includes a write-off of obsolete and discontinued instruments and
related parts in the amount of $0.62 million.
Subsequent to the end of the quarter, in July, the Company completed a $30
million convertible preferred share issue with Warburg, Pincus & Co., LLC, one
of the world's leading private equity investment firms. At the same time part of
the Company's outstanding debt was converted to preferred shares and the balance
of the debt was repaid from the proceeds of the issue. After the transactions,
the Company had $27 million in cash.
Visible Genetics Inc. manufactures and markets high performance automated DNA
sequencing systems and complete kits for the analysis of genes linked to
disease. The Company's OpenGene(TM) system employs proprietary stratified DNA
testing and single-tube, single-step sequencing methods to significantly reduce
the time and cost involved in identifying clinically relevant genetic
information. The Company is a leader in the emerging field of pharmacogenomics,
which will use genetic information in the identification, and analysis of genes
in order to improve patient care and reduce healthcare costs.
This Form 6-K contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks, uncertainties and
other factors that may cause the Company's results to differ materially from
expectations. These include risks relating to the ability to obtain regulatory
approval, market acceptance of genotyping and the Company's products and other
risks detailed from time to time in the Company's SEC filings, including its
most recent Annual Report on Form 20-F. These forward-looking statements speak
only as of the date hereof. VGI disclaims any intent or obligation to update
these forward-looking statements.
The Company hereby incorporates by reference this Form 6-K into the Company's
Registration
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Statements on Form F-3 (File Nos. 333-67607 and 333-68939) and Form S-8
(File Nos. 333-6454 and 333-8804).
Exhibit 1. Second Quarter Financial Results
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VISIBLE GENETICS INC.
Date: August 6, 1999 By: /s/ Richard T. Daly
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Name: Richard T. Daly
Title: President and CEO
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VISIBLE GENETICS INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 902,348 $ 6,165,924
Short-term investments -- 5,108,254
Trade receivables 4,322,602 4,770,796
Other receivables 1,258,517 1,445,820
Prepaid and deposits 670,750 233,072
Inventory 4,435,928 3,912,336
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TOTAL CURRENT ASSETS 11,590,145 21,636,202
Deferred financing costs 648,773 --
Other long-term assets 694,617 --
Fixed assets 4,337,589 3,877,163
Patents and licences 2,574,231 2,269,170
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$ 19,845,355 $ 27,782,535
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LIABILITIES
CURRENT LIABILITIES
Notes payable $ 8,000,000 $ 7,494,877
Accounts payable 5,039,856 3,985,103
Accrued liabilities 1,722,358 1,723,840
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TOTAL CURRENT LIABILITIES 14,762,214 13,203,820
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SHAREHOLDERS' EQUITY
Share capital 48,080,318 46,412,685
Other equity 2,940,252 2,232,465
Cumulative translation adjustment (342,276) 84,822
Deficit (45,595,153) (34,151,257)
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5,083,141 14,578,715
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$ 19,845,355 $ 27,782,535
============ ============
</TABLE>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
------------------------------ ------------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
SALES $ 1,925,375 $ 2,507,045 $ 5,185,988 $ 3,566,763
Cost of sales ( Note 1 ) 1,913,349 1,664,694 4,063,821 2,474,465
----------- ------------ ------------ -----------
GROSS MARGIN 12,026 842,351 1,122,167 1,092,298
EXPENSES
Sales, general and administrative 4,567,531 2,739,980 7,731,259 4,929,813
Research and development 2,020,471 2,221,709 3,874,292 3,367,988
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6,588,002 4,961,689 11,605,551 8,297,801
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Loss from operations before interest (6,575,976) (4,119,338) (10,483,384) (7,205,503)
Interest income 27,574 73,149 141,224 156,762
Interest and financing expense (561,450) (115,629) (1,101,736) (117,171)
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NET LOSS FOR THE PERIOD $(7,109,852) $ (4,161,818) $(11,443,896) $(7,165,912)
Weighted average number of common
shares outstanding 9,536,356 7,398,122 9,464,636 7,366,337
----------- ------------ ------------ -----------
BASIC AND FULLY DILUTED LOSS PER SHARE $ (0.75) $ (0.56) $ (1.21) $ (0.97)
=========== ============ ============ ===========
</TABLE>
NOTE 1
Included in cost of sales for the three months ended June 30, 1999 is a specific
provision for obsolete and discontinued instruments and related parts in the
amount of $617,546.
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1999 1998
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<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net Loss for the period $(11,443,896) $(7,165,912)
Add: Items not involving cash -
Depreciation 773,389 477,079
Amortization 192,447 87,968
Deferred compensation cost related to options granted -- 38,582
In-process research and development acquired -- 490,875
Non cash financing expense related to warrants granted 636,602 --
Foreign exchange 52,051 --
Increase ( decrease ) from changes in -
Trade receivables 71,221 (1,502,560)
Other receivables 187,303 (315,956)
Prepaid and deposits (437,678) (532,668)
Inventory (523,592) (1,233,481)
Other long-term assets (694,617) --
Accounts payable 898,040 1,203,990
Accured liabilities (1,482) 236,434
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(10,290,212) (8,215,649)
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Financing activities
Common shares issued, net of expenses 1,481,554 261,581
Other equity issuances 11,438 (35,323)
Short term borrowings -- 7,382,441
Capital lease obligation -- (8,366)
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1,492,992 7,600,333
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Investing activities
Marketable securities 5,108,254 4,241,216
Fixed assets (1,233,815) (1,674,073)
Intangible assets (340,795) (219,802)
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3,533,644 2,347,341
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Increase (decrease) in cash during the period (5,263,576) 1,732,025
CASH, BEGINNING OF PERIOD 6,165,924 1,866,679
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CASH, END OF PERIOD $ 902,348 $ 3,598,704
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</TABLE>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED, UNITED STATES DOLLARS)
SIX MONTHS ENDED JUNE 30
1999 1998
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Net loss for the period $(11,443,896) $(7,165,912)
Other comprehensive income:
Foreign currency translation adjustments (427,098) --
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Comprehensive loss for the period $(11,870,994) $(7,165,912)
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF DEFICIT
(UNAUDITED, UNITED STATES DOLLARS)
SIX MONTHS ENDED JUNE 30
1999 1998
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Deficit, beginning of year $(34,151,257) $(19,260,296)
Net loss for the period (11,443,896) (7,165,912)
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Deficit, end of the period $(45,595,153) $(26,426,208)
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