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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 NOVEMBER, 1999
VISIBLE GENETICS INC.
(Exact name of Registrant)
700 BAY STREET, SUITE 1000, TORONTO ON, CANADA M5G 1Z6
(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 November 10, 1999, Visible Genetics Inc. (the "Company") issued
press releases covering the following:
1. FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 1999. The
Company reported sales of $3.5 million for the third quarter ended September 30,
1999, compared to $3.2 million for the same period in 1998. The net loss for the
quarter was $7.0 million or $0.82 per share, compared to $3.3 million or $0.44
per share for the same period in 1998. The sales for the first nine months of
1999 were $8.7 million with a net loss of $18.5 million or $2.03 per share,
compared to sales of $6.8 million and a loss of $10.5 million or $1.42 per share
for the corresponding period in 1998. The increase in the net loss for the
quarter was due to increased expenses related to the Company's HIV-1 Genotyping
Assay clinical trials and related expenses required for its Food and Drug
Administration application, for expansion of its international sales and
marketing activities, and one time general and administration expenses of $1.0
million related to facility consolidation and personnel costs. The Company's
third quarter results are set forth in full on Exhibit 1 annexed to this report.
(All amounts are in United States dollars.)
2. RETIREMENT OF JOHN K. STEVENS. Dr. John K. Stevens, the Company's
founder, and Chairman has decided to retire from the Board of Directors to
pursue another new venture full time.
The Company reports hereby that in accordance with the terms of his
employment agreement, Dr. Stevens will receive a severance package of 2 years
salary plus benefits. The Company has extended the termination date of
Dr. Stevens' options until 2003. Upon retirement, Dr. Stevens repaid a $323,405
loan owed to the Company which was payable in 2006 and a $50,000 loan owed to
the Company which was payable in December 1999.
3. APPOINTMENT OF TIMOTHY W. ELLIS AS COO. Timothy W. Ellis has been
appointed Chief Operating Officer for the Company. In this role, he will
be responsible in North America for achieving overall business objectives,
organizing and developing the Company's sales and marketing activities,
and managing all manufacturing including instruments, consumables and
diagnostic kits.
Mr. Ellis will be based in Atlanta, where the Company's wholly owned
subsidiary, Applied Sciences, Inc. is currently located. The Company is in the
process of establishing a new 100,000 square foot facility in Atlanta that will
house its kit manufacturing operations, sales and marketing, and the existing
Applied Sciences, Inc. operations.
Mr. Ellis has been involved in the diagnostics business for over 25
years, having held a variety of positions with a number of companies including
General Manager of Abbott Laboratories' Clinical Chemistry Business Unit,
President of Dynex Technologies, and President of Genetic Systems Corporation.
Mr. Ellis received Bachelor of Science and Master of Science degrees from
Bradley University.
4. RESIGNATION OF JEFFREY D. SHERMAN. Jeffrey D. Sherman, Chief
Financial Officer, has left the Company to pursue other interests. A search
firm has been retained to identify a suitable candidate to fill the vacancy.
Mr. Sherman has been providing consulting services to the Company on an as
required basis during the transition period.
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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 which 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. The Company 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 Statements on Form F-3 (File Nos. 333-67607 and
333-68939) and the Company's outstanding Registration Statements on Form S-8.
Exhibit 1. Third 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: November 10, 1999 By: /s/ Richard T. Daly
--------------------------------
Name: Richard T. Daly
Title: President and CEO
<PAGE>
VISIBLE GENETICS INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, UNITED STATES DOLLARS)
SEPTEMBER 30 DECEMBER 31
1999 1998
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,788,792 $ 6,165,924
Short-term investments 9,167,234 5,108,254
Trade receivables 5,785,875 4,770,796
Other receivables 711,282 1,445,820
Prepaid and deposits 522,149 233,072
Inventory 3,595,119 3,912,336
------------ ------------
TOTAL CURRENT ASSETS 29,570,451 21,636,202
FIXED ASSETS 4,170,827 3,877,163
2,573,826 2,269,170
------------ ------------
PATENTS AND LICENCES $ 36,315,104 $ 27,782,535
============ ============
LIABILITIES
CURRENT LIABILITIES
Notes payable $ -- $ 7,494,877
Accounts payable 3,369,534 3,985,103
Accrued liabilities 1,544,972 1,723,840
------------ ------------
TOTAL CURRENT LIABILITIES 4,914,506 13,203,820
------------ ------------
CONVERTIBLE PREFERRED STOCK 26,677,365 --
------------ ------------
SHAREHOLDERS' EQUITY
Share capital 48,365,025 46,412,685
Other equity 10,218,994 2,232,465
Cumulative translation adjustment (404,504) 84,822
Deficit (53,456,282) (34,151,257)
------------ ------------
4,723,233 14,578,715
------------ ------------
$ 36,315,104 $ 27,782,535
============ ============
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 NINE MONTHS ENDED SEPTEMBER 30
------------------------------ -------------------------------
1999 1998 1999 1998
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
SALES $ 3,486,477 $ 3,230,247 $ 8,672,463 $ 6,797,010
Cost of sales 2,254,833 1,931,264 6,318,652 4,405,729
----------- ------------ ------------ ------------
GROSS MARGIN 1,231,644 1,298,983 2,353,811 2,391,281
EXPENSES
Sales, general and administrative 5,675,071 2,725,494 13,408,613 7,655,307
Research and development 2,112,131 1,636,605 5,986,419 5,004,593
----------- ------------ ------------ ------------
7,787,202 4,362,099 19,395,032 12,659,900
----------- ------------ ------------ ------------
Loss from operations before interest (6,555,558) (3,063,116) (17,041,221) (10,268,619)
Interest income 209,032 43,284 351,253 200,046
Interest and financing expense (683,018) (317,360) (1,783,472) (434,530)
----------- ------------ ------------ ------------
NET LOSS FOR THE PERIOD $(7,029,544) $ (3,337,192) $(18,473,440) $(10,503,103)
Weighted average number of common
shares outstanding 9,600,049 7,592,824 9,508,358 7,416,393
----------- ------------ ------------ ------------
BASIC AND FULLY DILUTED LOSS PER SHARE (1) $ (0.82) $ (0.44) $ (2.03) $ (1.42)
=========== ============ ============ ============
</TABLE>
(1) The calculation of loss per share for the 3 months ended September 30, 1999
includes the accretion of discount and accrual of dividends on convertible
preferred stock in the amounts of $195,066 and $636,519, respectively, which are
charged directly to deficit and not included in the net loss for the period in
the statement of operations.
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
-------------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net Loss for the period $(18,473,440) $(10,503,103)
Add: Items not involving cash -
Depreciation 1,211,244 736,522
Amortization 291,988 157,518
In-process research and development acquired -- 700,000
Non cash financing expense related to warrants granted 1,285,376 --
Foreign exchange (11,276) --
Increase ( decrease ) from changes in -
Trade receivables (1,504,405) (1,850,626)
Other receivables 734,538 (299,285)
Prepaid and deposits (289,077) (375,360)
Inventory 317,217 (1,962,192)
Accounts payable (772,182) 2,032,057
Accured liabilities (178,868) 508,102
------------ ------------
(17,388,885) (10,856,367)
============ ============
Financing activities
Common shares issued, net of expenses 1,927,377 683,284
Convertible preferred stock issued, net of expenses 29,176,857 --
Repayment of term loan (4,100,000) --
Other equity issuances 11,438 394,925
Short term borrowings -- 6,901,885
Capital lease obligation -- (19,815)
Long-term debt -- 1,346,328
In process research and development acquired for cash -- (209,125)
------------ ------------
27,015,672 9,097,482
============ ============
Investing activities
Short-term investments (4,058,980) 5,721,222
Purchase of fixed assets (1,504,908) (2,680,532)
Licenses and patents acquired (440,031) (643,650)
------------ ------------
(6,003,919) 2,397,040
============ ============
Increase in cash during the period 3,622,868 638,155
CASH, BEGINNING OF PERIOD 6,165,924 1,866,679
------------ ------------
CASH, END OF PERIOD $ 9,788,792 $ 2,504,834
============ ============
</TABLE>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
1999 1998
----------- -----------
<S> <C> <C>
Net loss for the period (18,473,440) (10,503,103)
Other comprehensive income:
Foreign currency translation adjustments (489,326) --
----------- -----------
Comprehensive loss for the period (18,962,766) (10,503,103)
----------- -----------
</TABLE>
VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF DEFICIT
(UNAUDITED, UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
1999 1998
----------- -----------
<S> <C> <C>
Deficit, beginning of year (34,151,257) (19,260,296)
Net loss for the period (18,473,440) (10,503,103)
Accretion of discount on convertible preferred stock (195,066) --
Accrual of dividend on convertible preferred stock (636,519) --
----------- -----------
Deficit, end of the period (53,456,282) (29,763,399)
----------- -----------
</TABLE>
