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GeNOsys, Inc.(fka GNYS) RSS Feed

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GeNOsys, Inc. Reports Recent Developments and Third Quarter 2008 Financial Results

PROVO, UT, Oct 16, 2008 (MARKET WIRE via COMTEX) -- GeNOsys, Inc. (OTCBB: GNYS), a medical research and development company specializing in pharmaceutical, biotechnical and medical gas generating systems, today announced recent key achievements and financial results for the third quarter and first nine months ended August 31, 2008.
Recent Business Development Milestones

-- Completed the research and development, engineering and construction
of the GeNOx-B and portable GeNOx-P Nitric Oxide Gas Generators. The
Company has been issued a patent on the GeNOx-B and has applied for a
patent on the GeNOx-P.

-- Completed preliminary research and development on the proprietary
tablet medium GeNOx-Tablet. Additionally, a formula for the bulk
manufacture of the tablet medium has been formulated. This formula will be
essential to carry out the business model of the Company as a commercially
viable reoccurring revenue producer of Nitric Oxide Gas Generators.


"The third quarter of fiscal 2008 was another active and productive period for GeNOsys, highlighted by the completion of the GeNOx-B and portable GeNOx-P Nitric Oxide Gas Generators," said Mr. Clark Mower, Chairman of the Board of Directors of GeNOsys. "Independent research has shown that Nitric Oxide gas, an FDA approved drug for use in the treatment of pulmonary hypertension in new-borns, may be an effective agent for the treatment of tuberculosis. Through our technology we are able to generate high purity Nitric Oxide for a significantly reduced cost. Now that we have completed this process, our plan includes a multi-track process of FDA and ISO 13485:2003 approvals in order to monetize our products.
Mr. Mower continued, "GeNOsys has a very large opportunity through the commercialization of our generators. Despite infecting nearly two billion people with the bacteria, which is one-third of the world's population, tuberculosis is "The Forgotten Plague," according to a recent article in Time magazine. The World Health Organization states that no new class of drug has been developed for its treatment in over thirty years. By 2010, the market for anti-tuberculosis drugs is projected to be between $612 and $670 million. The potential market for a new anti-tuberculosis drug is estimated to be between $316 and $345 million according to The Global Alliance for Tuberculosis Drug Development. Additionally, our research has shown that there are several other markets in which our generators have the potential to be used."

Financial results for the three months ended August 31, 2008

During the three-month period ended August 31, 2008, GeNOsys had a net loss of $332,349. This compares to a net loss of $239,738 for the comparable period ended August 31, 2007. Net loss per common share for each of the three month periods was $(.01).

Research and development ("R&D") expenses were $185,129 and $120,163, respectively, for the three-month periods ended August 31, 2008, and 2007, an increase of $64,966. The increase results from non-cash stock-based compensation charges, which were $15,488 higher in the 2008 period, from consulting and advisory board fees, and for additional work on both the nitric oxide generator and the tablet formulation to bring them to finalization. As the work on document preparation and regulatory work for FDA approval intensifies, R&D expenses are expected to increase.

General and administrative expenses were $147,152 and $122,907, respectively, for the three-month periods ended August 31, 2008 and 2007, an increase of $24,245. The increase results from the non-cash stock-based compensation charge, which was $22,287 higher in 2008 than in the comparable 2007 period. Excluding that charge, general and administrative expenses would have remained flat in 2008 as compared to 2007. General and administrative expenses are expected to continue to increase in the remaining periods of this fiscal year as expenses were incurred in raising the additional capital needed to fund our operations and bring our products to market.

Financial results for the nine months ended August 31, 2008

During the nine-month period ended August 31, 2008, GeNOsys had a net loss of $970,224. This compares to a net loss of $657,293 for the comparable period ended August 31, 2007. Net loss per common share for these periods was $(.02) and $(.01), respectively.

Research and development ("R&D") expenses were $515,832 and $319,086, respectively, for the nine-month periods ended August 31, 2008 and 2007. A significant portion of the $196,746 increase in research and development expenditures resulted from higher non-cash stock-based compensation charges in 2008, which exceeded the 2007 charge by $92,326. Increases were also seen in consulting fees and advisory board fees for additional work on both the nitric oxide generator and the tablet formulation. As the documentation preparation and regulatory work for FDA approval intensifies, R&D expenses are expected to increase.

General and administrative expenses were $456,656 and $355,396, respectively, for the nine-month periods ended August 31, 2008 and 2007. The increase results from non-cash stock-based compensation charges, which were $132,859 higher in 2008 than 2007. Excluding that charge, general and administrative expenses would have decreased by $31,599 in 2008 as compared to 2007. General and administrative expenses are expected to continue to increase in the remaining periods of this fiscal year as expenses are incurred in raising the additional capital needed to fund operations and bring the products to market.

About GeNOsys, Inc.

GeNOsys, Inc. (generated nitric oxide systems) is a medical research and development company specializing in pharmaceutical, biotechnical and medical gas generating systems. Nitric oxide gas is one of the medical gases that will be generated along with various combinations of beneficial medical gases suitable for the control of human disease. Distribution will be accelerated through the use of already existing distribution networks that currently sell related respiratory products. For further information, see the Company's Website at: www.genosysusa.com.

This press release may contain forward-looking statements including the Company's beliefs about its business prospects and future results of operations. These statements involve risks and uncertainties. Among the important additional factors that could cause actual results to differ materially from those forward-looking statements are risks associated with the overall economic environment, changes in anticipated earnings of the company and other factors detailed in the company's filings with the SEC. In addition, the factors underlying Company forecasts are dynamic and subject to change and therefore those forecasts speak only as of the date they are given. The Company does not undertake to update them; however, it may choose from time to time to update them and if it should do so, it will disseminate the updates to the investing public.

GENOSYS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
From
Beginning
of
Development
Stage
(June 30,
2005)
For the Three Months For the Nine Months To August
Ended August 31, Ended August 31, 31,
2008 2007 2008 2007 2008
----------- ----------- ----------- ----------- -----------
Revenues $ - $ - $ - $ - $ -
Cost of sales - - - - -
----------- ----------- ----------- ----------- -----------
Gross margin - - - - -
Operating
expenses:
Research and
development 185,129 120,163 515,832 319,086 1,735,288
General and
administra-
tive 147,152 122,907 456,656 355,396 1,733,279
----------- ----------- ----------- ----------- -----------
Total
operating
expenses 332,281 243,070 972,488 674,482 3,468,567
----------- ----------- ----------- ----------- -----------
Net income
(loss) from
operations (332,281) (243,070) (972,488) (674,482) (3,468,567)
----------- ----------- ----------- ----------- -----------
Other income
(expense):
Interest
income 47 3,332 2,379 17,503 82,198
Gain (loss)
on disposal
of asset - - - (414) (414)
Other income
(expense) - - - 100 100
----------- ----------- ----------- ----------- -----------
Total other
income
(expense),
net 47 3,332 2,379 17,189 81,884
----------- ----------- ----------- ----------- -----------
Net income
(loss) before
income Taxes (332,234) (239,738) (970,109) (657,293) (3,386,683)
----------- ----------- ----------- ----------- -----------
Provision
(benefit) for
income Tax 115 - 115 - 415
----------- ----------- ----------- ----------- -----------
Income (loss)
from continuing
operations (332,349) (239,738) (970,224) (657,293) (3,387,098)
Discontinued
operations:
Loss from
discontinued
operations,
net of tax - - - - (2,131)
Gain on
disposal of
discontinued
operations,
net of tax - - - - 71,253
----------- ----------- ----------- ----------- -----------
Net income
(loss) $ (332,349)$ (239,738) $ (970,224)$ (657,293)$(3,317,976)
=========== =========== =========== =========== ===========
Basic and
diluted loss
per share from
continuing
operations $ (.01)$ (.01)$ (.02)$ (.01)$ (.07)
=========== =========== =========== =========== ===========
Basic and
diluted loss
per share from
discontinued
operations $ - $ - $ - $ - $ -
=========== =========== =========== =========== ===========
Basic and
diluted loss
per share $ (.01)$ (.01)$ (.02)$ (.01)$ (.07)
=========== =========== =========== =========== ===========
Basic and
diluted
weighted
average
number of
common shares
outstanding 46,148,787 45,668,031 46,002,850 45,668,031 45,252,720
=========== =========== =========== =========== ===========
GENOSYS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
From
Beginning
of
Development
For the Nine For the Nine Stage (June
Months Ended Months Ended 30, 2005)
August August to August
31, 2008 31, 2007 31, 2008
------------ ------------ ------------
Cash flows from operating
activities:
Net loss $ (970,224) $ (657,293) $ (3,317,976)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 38,954 34,200 97,135
Gain on the disposal of
discontinued Operations - - (71,253)
Loss on disposal of equipment - 414 414
Stock-based compensation 281,616 56,431 420,355
Decrease in cash from
discontinued operations - - (6,020)
Stock issued for services 8,536 - 278,536
Changes in operating assets
and liabilities:
(Increase) Decrease in
prepaid expenses (37,197) 64,956 (40,943)
Increase (Decrease) in
accounts payable 55,048 14,030 68,197
Increase (Decrease) in
related party liabilities (9,340) - 4,000
Increase (Decrease) in
accrued liabilities 195,522 (38,358) 209,729
Increase (Decrease) in tax
payable - - 200
------------ ------------ ------------
Net cash used in
operating activities (437,085) (525,620) (2,357,626)
------------ ------------ ------------
Cash flows from investing
activities:
Purchase of intangible assets (27,543) (33,634) (69,672)
Purchase of equipment (1,021) (18,200) (207,501)
------------ ------------ ------------
Net cash provided by
(used in) investing
Activities (28,564) (51,834) (277,173)
------------ ------------ ------------
Cash flows from financing
activities:
Issuance of common stock for
cash 153,500 - 2,574,604
Proceeds from related party
loans 36,000 - 36,000
Cash from discontinued
operations - - (19,777)
------------ ------------ ------------
Net cash provided by
financing activities 189,500 - 2,590,827
------------ ------------ ------------
Net increase (decrease) in cash (276,149) (577,454) (43,972)
Cash at beginning of the period 280,105 904,715 47,928
------------ ------------ ------------
Cash at end of the period $ 3,956 $ 327,261 $ 3,956
============ ============ ============
Supplemental Disclosure
Information
Cash paid during the year for:
Interest $ - $ - $ 750
Income/franchise taxes - - 200
Stock issued for services 8,536 - 278,536
============ ============ ============

Contact:

Alliance Advisors, LLC
Alan Sheinwald
President
(914) 669-0222
Email Contact

Mark McPartland
Vice President
(910) 686-0455
Email Contact

GeNOsys, Inc.
Michael Dancy
(801) 746-3570
Email Contact


SOURCE: GeNOsys, Inc.

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