The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as developed and published by the International Accounting Standards Board (IASB) as adopted by the EU (IFAS). They have been approved and authorized for issue by the members of the Board of Directors on February 25, 2015. Dr. Jan Groen, Executive Director, declares, in the name and on behalf of the Board of Directors, that to the best of the Board of Directors' knowledge, the consolidated financial statements of the Company prepared in accordance with IFRS, give a true and fair view of the Company and its subsidiaries' assets & liabilities, financial situation and results of operations, and that this management report presents a fair description of the Company's business evolution, results and situation, and main risks to which it is subject.
Revenues
Total revenues increased from $7,554,000 in 2013 to $11,671,000 in 2014, an increase of 55%. Revenues are derived from commercial product sales, services, or royalties and from grants. Commercial revenues in 2014 increased by 52%, from $7,554,000 in 2013 to $11,479,000 in 2014 mainly as a result of the success of the sale of ConfirmMDx for Prostate Cancer. Grant revenue in 2014 is $192,000 while no grant revenue was generated in 2013.
Total revenues in 2014, 2013 and 2012 were $11.7 million, $7.6 million, and $5.9 million, respectively. The commercial revenues other than direct sales for ConfirmMDx for Prostate Cancer were primarily generated from deals with Merck Corporation, Veridex LLC (a Johnson & Johnson Company), Abbott, GSK Biologicals, Pfizer, Exact Sciences, Predictive BioSciences, and Merck Serono
.
Operating charges Thousands of $/
Years ended December 31 2014 2013 2012
Research & development expenses 2,376 4,567 6,786
Selling, general and administrative expenses 18,321 13,219 9,587
Other operating expenses/(revenues) -137 -46 -177
Total Operating Charges 20,560 17,832 16,196
Total operating charges increased by 15% from $17.8 million in 2013 to $20.6 million in 2014, mainly due to the development of the CLIA lab in California.
As a consequence, SG&A expenses increased by 39% from $13.2 million in 2013 to $18.3 in 2014, mainly due to the continuous buildup of US R&D, Marketing, Quality, and Administrative functions to support the development of the commercial operation in the US, while R&D expenses decreased by 48% from $4.6million in 2013 to $2.4 million in 2014.
Net results
EBIT and net loss were $16.1 million, and $16.2 million in 2013 compared to $15.3 million, and $15.3 million in 2014.
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Cash Flow
The net cash balance decreased by $5.7 million in 2014 due to continuing losses of the Company compensated by a capital increase in November 2014.
Balance Sheet
The balance sheet at December 31, 2014 remained similar in terms of composition to previous years as evidenced by the following key ratios:
Years ended December 31 2014 2013 2012
Cash & cash equivalents as a % of total assets 61% 84% 77%
Working capital as a % of total assets 68% 78% 75%
Solvency ratio (equity/total assets) 77% 84% 80%
Gearing ratio (Financial debt/equity) 0% 0% 0%
Cash and cash equivalents of $18.9 million account for 61% of total assets at December 31, 2014. The other major assets are property, plant and equipment ($2.8 million or 9 % of total assets), and receivables over the period 2015 ($9.2 million or 30 % of total assets).
Total equity of $23.8 million accounts for 77% of the total balance sheet at December 31, 2014. The other major liabilities are trade payables ($7.1 million or 23 % of total assets).
Taxation
The losses of the Company in the last three years imply that no income taxes are payable for these years. On December 31, 2014, the Company had net tax losses carried forward amounting to $156 million, implying a potential deferred tax asset of $53 million. Due to the uncertainty surrounding the Company’s ability to realize taxable profits in the near future, the Company did not recognize any deferred tax assets on its balance sheet.
Comments on Approval of the Statutory Financial Statements
We submit for your approval the statutory financial statements for the fiscal year closed on 31 December 2014, which been approved and authorized for issue by the members of the Board of Directors on February 25, 2015.. The statutory financial statements have been prepared in accordance with Belgian GAAP and give a true and fair view of the course of affairs of the Company during the past fiscal year. Dr. Jan Groen, Executive Director, declares, in the name and on behalf of the Board of Directors, that to the best of the Board of Directors' knowledge, the statutory financial statements of the Company prepared in accordance with Belgian GAAP, give a true and fair view of the Company's assets and liabilities, financial situation and results of operations.
The following can be noted on the basis of the annual accounts: • Results of the fiscal year
The Company has closed its annual accounts with respect to the past fiscal year with a loss of €1,089,835.15 (USD equivalent $1,448,172.95). This loss results mainly from the costs related to the development of new products which have not yet generated significant revenues and to the set-up of the US CLIA laboratory and team to support direct sales of tests since mid-2012.
• Statutory and non-distributable reserves
The Company has a corporate capital of €30,053,884.52. The Company has no statutory reserve.
As the Company has closed its annual accounts with respect to the past fiscal year with a loss, the Company is not legally obliged to reserve additional amounts.
• Allocation of the results
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