Voluntary Administration and Asset Divestments Leave Genetic Technologies Facing Uncertain Future

Financial Decline and Administration

Genetic Technologies Limited (ASX – GTG) has disclosed a challenging half-year ended 31 December 2024, with revenue declining 15% to $3.37 million and losses after tax widening by 36% to $2.33 million. The company’s financial difficulties culminated in the appointment of voluntary administrators in November 2024 after unsuccessful capital raising efforts and strategic partnership negotiations.

The administration period, which lasted until May 2025, saw the company’s operations maintained on a business-as-usual basis while administrators sought to either sell or recapitalise the business. The financial report for the period was prepared with incomplete records due to the administration, leading to a qualified auditor’s review and material uncertainty about the company’s ability to continue as a going concern.

Asset Sales and Recapitalisation

During the administration, Genetic Technologies divested its core genetic testing businesses. The geneType business was sold to Rhythm Biosciences Limited for $625,000 in December 2024, while the EasyDNA and AffinityDNA direct-to-consumer businesses were sold to Endeavor DNA, Inc. for $525,000 in January 2025. These sales included intellectual property, customer contracts, and employee transitions, effectively exiting the company from its previous operational segments.

Following creditor approval, a Deed of Company Arrangement (DOCA) was executed in March 2025, enabling the company to exit administration. Shareholders approved the recapitalisation plan in May 2025, which included a significant equity injection primarily from Walker Investment Australia Pty Ltd, now holding an 87.1% stake. The recapitalisation raised approximately $271,000 and resulted in a refreshed board and executive team, with Michael Walker appointed Executive Chairman and Managing Director.

New Strategic Direction

Post-recapitalisation, Genetic Technologies has pivoted away from its previous biotechnology focus towards financial services. In June 2025, the company announced binding terms to acquire Ellerfield Wealth Pty Ltd and Walker Capital Private Wealth Pty Ltd, both financial planning entities associated with Executive Chairman Michael Walker. The proposed acquisition, valued at approximately $7.84 million in fully paid shares, is subject to shareholder approval and regulatory compliance.

Additionally, the company sold its US subsidiaries related to geneType to Smart Patrol Securities Pty Ltd in June 2025, further consolidating its exit from prior operations. The appointment of Hall Chadwick NSW as the new auditor in June 2025 marks a new chapter in governance and financial oversight.

Outlook and Challenges Ahead

While the recapitalisation and strategic shift offer a fresh start, the company faces significant challenges. The auditor’s qualified review highlights ongoing uncertainties, and the company remains in a net liability position as of December 2024. The success of the new financial services strategy will depend on effective integration of acquisitions and securing sustainable revenue streams.

Investors will be watching closely as Genetic Technologies transitions from a biotechnology entity to a financial services player, navigating the complexities of re-compliance with ASX listing rules and rebuilding shareholder value.