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GeneNews Shareholders Approve Share Consolidation

NEW YORK (GenomeWeb News) – GeneNews announced after the close of the market last night that its shareholders have approved the company's plan for a share consolidation, as well as the extension to the term of certain share purchase warrants.

The Toronto-based molecular diagnostics firm said that issued and outstanding shares will be consolidated on a basis of one post-consolidation share for every six pre-consolidation common shares. The date of the consolidation has not yet been set, but the firm said the board will determine the date based on when "such action would be most advantageous to the company and its shareholders, but no later than Dec. 31, 2012."

GeneNews currently has 92,898,117 common shares issued and outstanding.

Shareholders also approved an extension to certain share purchase warrants that were issued on June 8, 2011 and Nov. 12, 2011, as well as warrants that were amended on Jan. 16, 2012. Each warrant entitles the holder to purchase one common share of GeneNews at an exercise price of C$.25 (US$.25) per common share.

There are a total of 15,730,273 warrants set to expire on July 31, 2012, and 4,250,903 warrants set to expire on Nov. 12, 2012. The terms of those warrants have been extended to Feb. 1, 2013 and June 1, 2013, respectively.

As of March 23, AWM Investment Company and GeneNews Chairman Rory Riggs each held more than 10 percent of the firm's shares, with AWM holding around 10 percent of the firm's issued and outstanding common shares on a non-diluted basis and Riggs holding nearly 14 percent of the shares. Assuming exercise of the warrants, AWM would hold a roughly 15.4 percent stake in the firm on a non-diluted basis, or 12.7 percent on a fully-diluted basis, and Riggs would hold an 18 percent share on a non-diluted basis, or 14.8 percent on a fully-diluted basis.

Last week, GeneNews announced a rights offering intended to raise about C$2.5 million. It intends to use the funds to support commercialization of its ColonSentry blood-based colon cancer risk stratification test and for general corporate and administrative expenses.

In early Friday trade on the Toronto Stock Exchange, shares of GeneNews were unchanged at C$.16.

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