Genta Incorporated Announces First Quarter 2010 Financial Results
May 13, 2010
BERKELEY HEIGHTS, NJ – May 13, 2010 – Genta Incorporated (OTCBB: GNTA.OB) today announced financial results for the quarter ended March 31, 2010. Corporate highlights for the quarter included:
Closed financing of convertible debt and warrants
Initiated confirmatory Phase 2b trial of tesetaxel in 2nd-line gastric cancer
Initiated new clinical trial of tesetaxel using weekly dosing schedule
Survival followup continued in AGENDA Phase 3 trial of Genasense® in advanced melanoma; completion expected Q1 2011
Multiple abstracts accepted for ASCO presentations June 2010
Financial Results
The net loss for the quarter ended March 31, 2010 was $(166.6) million, or $(0.76) per share, compared with a net loss of $(11.1) million, or $(0.64) per share, for the first quarter of 2009. At March 31, 2010, Genta had cash and cash equivalents totaling $19.6 million compared with $1.2 million at December 31, 2009. Net cash used in operating activities through March 31, 2010 was $2.3 million.
As previously reported, in March 2010, the Company closed on a financing, whereby it issued $25 million of units consisting of $20 million of various senior unsecured convertible notes, $5 million of senior secured convertible notes and warrants to purchase additional senior unsecured convertible notes of $10.0 million. The Company had direct access to $20 million of the proceeds, and the remaining $5 million of the proceeds were placed in a blocked account as collateral security for the $5 million of secured notes. Also in March 2010, three investors who had participated in our April 2009 financing, exercised their rights to acquire convertible notes of $0.9 million. There was an insufficient number of authorized shares of common stock in order to permit conversion of all of the notes and warrants associated with these transactions. Accordingly, the conversion obligation for the notes and warrants were classified as liabilities and measured at fair value on the balance sheet, resulting in a total non-cash expense of $153.8 million for the first quarter of 2010. The conversion feature liabilities and the warrant liabilities will be accounted for using mark-to-market accounting at each future reporting date until all the criteria for permanent equity have been met. The Company has filed a proxy with the Securities and Exchange Commission that seeks authorization from Genta’s stockholders to authorize the Board of Directors to effect a reverse stock split that would among other effects provide sufficient equity to meet the permanent equity criteria.
Conference Call and Webcast
Genta management will host a conference call and live audio webcast to discuss financial results and recent corporate activities at 8:00 am ET. Participants can access the live call by dialing (877) 634-8606 (U.S. and Canada) or (973) 200-3973 (International). The access code for the live call is Genta Incorporated. The call will also be webcast live at http//:www.genta.com/investorrelation/events.html. For investors unable to participate in the live call, a replay will be available approximately two hours after the completion of the call, and will be archived for 30 days. Access numbers for this replay are: (800) 642-1687 (U.S. and Canada) and (706) 645-9291 (International); conference ID number is: 73085069.
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