Genetic Technologies reports $1.46 million loss, down 88% from prior year

Sharp Loss Reduction Following DOCA and Administration Exit

Genetic Technologies Limited (ASX:GTG) reported a dramatic reduction in its net loss for the year ended 30 June 2025, narrowing to $1.46 million from a hefty $12 million loss in FY2024. This improvement was largely driven by a $3.89 million gain on extinguishment of debt and liabilities under a Deed of Company Arrangement (DOCA), which was effectuated in May 2025 following the company’s exit from voluntary administration.

The loss from continuing operations dropped 93% to $429,734, while discontinued operations; which include the geneType, EasyDNA, and AffinityDNA businesses sold during the administration period; recorded a loss of $1.03 million, down from $5.8 million the prior year. Revenue from continuing operations more than doubled to $4.9 million, although this figure includes the DOCA gain.

Voluntary Administration and Asset Sales Reshape Company

GTG entered voluntary administration on 20 November 2024 after failing to secure a minimum $2 million capital raise, despite short-term funding commitments from directors and an entitlement offer. Administrators from FTI Consulting took control and pursued a dual-track strategy, leading to the sale of its core operating businesses: geneType was sold to Rhythm Biosciences Limited for $625,000 plus GST, and the direct-to-consumer EasyDNA and AffinityDNA businesses were sold to Endeavor DNA, Inc. for $525,000 plus GST.

Following creditor approval of the DOCA proposed by Benelong Capital Partners Pty Ltd, the company recapitalised with the issue of over 1.19 billion shares, including a $271,000 raise. Control reverted to a reconstituted board led by Executive Chairman Michael Walker, who now holds 87% of the company’s shares through Walker Investment Australia Pty Ltd. The company’s focus has since shifted to operating as a corporate office concentrating on debt and equity recapitalisation and exploring new investment opportunities.

Financial Position and Going Concern Concerns

At 30 June 2025, GTG’s cash and net assets stood at a mere $10,000, a stark contrast to $1.8 million net assets and over $1 million cash at the prior year-end. The weighted average shares used in loss per share calculations surged to 301 million from 132 million due to the recapitalisation. Basic and diluted loss per share improved to 0.5 cents from 9.1 cents the previous year.

The company’s financial statements were prepared on a going concern basis, but directors flagged material uncertainty given the minimal cash reserves and ongoing need for successful recapitalisation and funding to pursue sustainable revenue streams. The auditor, Hall Chadwick NSW, issued a qualified opinion citing insufficient audit evidence during the administration period (20 November 2024 to 14 May 2025) but did not modify the opinion on the going concern basis, instead emphasizing the material uncertainty.

Governance Changes and Strategic Shifts

Significant board reshuffles accompanied the company’s exit from administration. Michael Walker was appointed Executive Chairman and Managing Director in May 2025, alongside non-executive directors William Musgrave and Anthony Hartman, both of whom subsequently resigned in early 2026. Steve Nicols and Jeffrey Le Compte were appointed non-executive directors in late 2025 and early 2026, respectively, with Campbell Welch joining in March 2026.

GTG also announced it would no longer proceed with the previously contemplated $7.8 million acquisition of Ellerfield Wealth Pty Ltd and Walker Capital Private Wealth Pty Ltd, a move reflecting a strategic pivot away from wealth management acquisitions to alternative opportunities aligned with a proposed ASX relisting.

What Comes Next for GTG?

With its core businesses sold off and the company now a shell focused on recapitalisation, GTG faces a critical juncture. The success of its recapitalisation strategy and ability to attract new funding will determine whether it can rebuild and generate sustainable revenue. The qualified audit opinion and material uncertainty around going concern underscore the risks ahead. Investors will be watching closely how the new board navigates these challenges, especially as the company seeks to re-list on the ASX and rebuild shareholder value.