DORVAL, QUEBEC--(Marketwired - May 29, 2014) - Warnex Inc. (TSX VENTURE:WNX.H) ("Warnex" or the "Company") announced today financial results for the first quarter ended March 31, 2014.

As announced on May 5, 2014, the Company has entered into a binding letter of agreement with Diagnos pursuant to which Warnex will merge with a wholly-owned subsidiary of Diagnos. The transaction remains subject to certain closing conditions including without limitation, (i) satisfactory completion of the due diligence investigation by Warnex; (ii) receipt of all necessary approvals and consents, including but not limited to, the approval of the TSX Venture Exchange; (iii) approval by a majority of the Warnex shareholders at a special meeting of shareholders scheduled for June 26, 2014, and such other closing conditions customary for transactions of this nature as may be specified in the definitive agreement.

Financial results

Net loss for the quarter amounted to $99,402, or $nil per share compared to net loss of $453,637 or $0.02 per share for the same quarter in 2013. The Board continues to be focused on reducing expenses, as evidenced by lower general and administrative expenses, and is expecting this trend to continue going forward.

General and administrative expenses amounted to $105,311 for the quarter compared to $452,119 for the same quarter last year. General and administrative expenses decreased as a result of lower facility operating costs amounting to approximately $120,000 as a result of the lease termination effective December 2013, reduced legal fees due to one-time mandates in the first quarter of 2013 amounting to approximately $180,000 and reduced board of director fees amounting to approximately $70,000 due to a reduction in the total number of required directors, partially offset by lower foreign exchange gains amounting to approximately $22,000 recorded in the first quarter of 2014 due to fluctuations between the US dollar and the Canadian dollar.

Financial income amounted to $5,909 for the quarter compared to financial expenses of $1,518 for the same quarter last year.

The Company ended the first quarter of 2014 with cash and cash equivalents of $2.5 million and working capital of $2.6 million, compared to $2.1 million in cash and cash equivalents and a working capital of $2.7 million as at December 31, 2013.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For further information identifying known risks and uncertainties, relating to financial resources, liquidity risk, volatility of share price and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent annual Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

Neither NEX nor its Regulation Services Provider (as that term is defined in policies of the NEX) accepts responsibility for the adequacy or accuracy of this release.

Financial statements to follow.

Interim Consolidated Statements of Financial Position
(Unaudited)
March 31
2014
$		 December 31
2013
$
Assets
Current assets
Cash and cash equivalents 151,252 218,299
Short-term investments 2,300,000 1,900,000
Trade and other receivables 196,300 782,073
Prepaid expenses 32,463 55,483
2,680,015 2,955,855
Liabilities
Current liabilities
Trade and other payables 73,293 169,731
Provisions - 80,000
73,293 249,731
Shareholders' equity
Capital stock 41,706,049 41,706,049
Other reserves 2,803,559 2,803,559
Deficit (41,902,886 ) (41,803,484 )
2,606,722 2,706,124
2,680,015 2,955,855
Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Other reserves
Capital
stock
$		 Equity components of debentures
$		 Share-based compensation
$		 Other
$		 Total other reserves
$		 Deficit
$		 Total
$
Balance, December 31, 2013 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (41,803,484 ) 2,706,124
Net and comprehensive loss - - - - - (99,402 ) (99,402 )
Balance,March 31, 201441,706,0491,734,4041,028,14941,0062,803,559(41,902,886)2,606,722
Balance, December 31, 2012 41,706,049 1,734,404 1,028,149 41,006 2,803,559 (39,840,541 ) 4,669,067
Net and comprehensive loss - - - - - (453,637 ) (453,637 )
Balance, March 31, 201341,706,0491,734,4041,028,14941,0062,803,559(40,294,178)4,215,430
Interim Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
For the three months ended March 31 2014
$		 2013
$
Revenues - -
Operating expenses
General and administrative 105,311 452,119
Finance (5,909 ) 1,518
99,402 453,637
Net and comprehensive loss (99,402 ) (453,637 )
Basic loss per share ($0.00 ) ($0.02 )
Diluted loss per share ($0.00 ) ($0.02 )
Weighted average number of shares outstanding 28,323,884 28,323,884
Weighted average number of diluted shares outstanding 28,323,884 28,323,884

Interim Consolidated Statements of Cash Flow
(Unaudited)

For the three months ended March 31 2014
$		 2013
$
Operations
Net loss (99,402 ) (453,637 )
Net change in non-cash working capital items 432,355 285,268
Net cash used in operations 332,953 (168,369 )
Investing activities
Acquisition of short-term investments (500,000 ) -
Disposal of short-term investments 100,000 -
Net cash used by investing activities (400,000 ) -
Financing activities
Net cash used in financing activities - -
Decrease in cash and cash equivalents (67,047 ) (168,369 )
Cash and cash equivalents, beginning of period 218,299 2,742,114
Cash and cash equivalents, end of period 151,252 2,573,745