NEW YORK – LexaGene Holdings, together with subsidiaries LexaGene and Bionomics Diagnostics, announced on Friday that it has filed for Chapter 7 bankruptcy, ceased operations, and laid off its staff.
Under Chapter 7 bankruptcy, a company seeks to liquidate its assets and distribute any proceeds, actions which will be carried out by a federally appointed bankruptcy trustee.
Although the financial results of the liquidation are uncertain and beyond the company's control, LexaGene does not expect that liquidation proceeds realized by the bankruptcy will satisfy all creditors, nor that the company's shareholders will receive any distribution of those proceeds.
LexaGene does not intend to undertake any proceedings under Canada's Companies' Creditors Arrangement Act, or similar Canadian proceedings.
LexaGene's board of directors currently remains intact, and the company does not intend to seek voluntary delisting from the Canadian TSX Venture Exchange. The firm also trades on the OTC bulletin board in the US, where its stock trades at $.08 per share.
"Despite our best efforts, we were unable to secure the necessary funding to continue our operations," Jack Regan, LexaGene's CEO and founder, said in a statement. "Accordingly, the board of directors has exercised its business judgment to commence liquidation proceedings for the company. Market conditions, lack of technology adoption, and the lengthy sales cycle in the biopharma industry have been too much to overcome. We regret the impact this will have on our investors, customers, and employees."
The Beverly, Massachusetts-based company had adjusted its flagship MiQLab RT-PCR system from largely veterinary and food safety uses to COVID-19 testing early in 2021. Later that same year, it signed an agreement with the US Army Combat Capabilities Development Command to evaluate MiQLab's use in detecting biothreats.
Early last year, Meridian LGH had invested approximately $5 million in LexaGene, which upon closing, gave the financer approximately 13 percent of LexaGene's issued and outstanding common shares at that time.