Insufficient funding leads to voluntary Genesis liquidation

Genesis Research and Development has been placed into voluntary liquidation because of “insufficient funds”.

Board member Aki von Roy made the announcement today to the NZX after yesterday’s trading halt while the company sought legal advice.

The company, which is developing genre silencing technology which targets the growth and drug resistance of cancer cells, has been struggling to find funding for the past two years.

Mr von Roy, Steven Gillis, Andy Gearing and Daniel Mahnert-Lueg have resigned from the board, leaving Catherine Yan as the sole director.

In July, Genesis announced it would not be going ahead with its proposed merger with unlisted pharmaceutical development company Mariposa.

Mr van Roy says the merger would have given Genesis more funding to survive and continue in the field of biotechnology and drug development.

Funding for Genesis was refused in 2009 by what was then the government’s Foundation for Research, Science and Technology.

Despite a lack of funds, Genesis raised money from its shareholders in 2009 and 2010, and in 2009 from a Japanese investor in the subsidiary Solirna Biosciences Ltd for its ssRNAi development.

However, the company had to cease operations in May 2010 when funding ran out. Later than year, Genesis made a placement to UBNZ Funds Management Ltd and then subsequently raised further funds by the issue to UBNZ of a convertible note.

Since then, the board sought to maintain Genesis as a non-operating investment entity so it might realise funds from its investment interest in bioinformatics software company Real Time Genomics.

As a secured creditor, UNBZ can appoint a receiver, but has yet to do so.

The board does not have the power to appoint a liquidator without a court order or a special resolution from shareholders.

The statement provided to NZX outlines the situation.

“In view of the lack of funds to pay for any further legal costs, shareholder meetings or operating costs, and the ongoing lack of communication from major shareholders UBNZ and Delight Grace Ltd, the board is unable to continue managing the company so directors A von Roy, S Gillis, A Gearing and D Mahnert-Lueg have resigned from the board.”

It lists Mrs Yan’s responsibilities to appoint further directors, maintain solvency and comply with listing requirements on the NZSX and ASX, or seek shareholder approval to delist.

bcunningham@nbr.co.nz

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Rats leaving the sinking ship

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Mugs are born every day ...

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Catherine Yang is only a recent director. I'm sure she's happy to have been thrown under the bus by the others.

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