BioExx Specialty Proteins Ltd.

BioExx Specialty Proteins Ltd.

May 15, 2013 17:00 ET

BioExx Announces Q1 2013 Results

Conference Call: Thursday, May 16, 9:00 a.m. ET

Updated Dial-in Numbers: 416-340-8061 / 866-225-0198 / 800-6578-9898

TORONTO, ONTARIO--(Marketwired - May 15, 2013) - BioExx Specialty Proteins Ltd. (TSX:BXI) today announced its financial results for the three months ended March 31, 2013.

"We are actively engaged in a dual track process with a speciality oils processor in Europe and an integrated global agri-business company in an effort to bring our strategic review to a successful close. Our primary goal is to extract full value from our proprietary high value protein technology under the optimal structure," said Chris Schnarr, Chief Executive Officer of BioExx. "The decision to wind down, and sell the assets related to, our operations in Saskatoon will provide us with additional working capital and address our short-term financial obligations. This additional flexibility maximizes our opportunity to secure the ideal partner arrangements."

Financial Results for the Three Months Ended March 31, 2013


During the quarter, the Company generated $70,317 of revenue from canola oil and canola meal sales at its Saskatoon plant, versus revenue of $483,024 in Q1 2012. As previously disclosed, the Company ran its crush operations only as required to support the development and piloting activity required for the completion of the Company's detailed engineering scale-up and strategic partner mandates. This resulted in low processing volumes and revenue earned during the quarter. As discussed in prior quarters, the Company had previously scaled back plant operations generally, during Q1 2012 in order to conserve capital and exercise appropriate fiscal discipline.

Gross Profit (Loss)

Cost of Goods Sold for the quarter was $186,162, compared to $1,220,370 in Q1 2012. The decrease results from the low processing volumes and reduced scope of operations as discussed above. As a result of extensive development and piloting activity to support the completion of the engineering scale-up and the absence of revenue from commercial operations for much of the first quarter, a portion of on-going plant operations expenses have been included in Plant commissioning and start-up expenses, as discussed below, rather than in Cost of Goods Sold. As a result of the foregoing factors, Gross Loss for the quarter was $115,845, versus $737,346 for the comparable prior year period.

Other Expenses

The Company incurred other expenses during the quarter of $1,182,611, compared to $6,991,438 in Q1 2012. The primary components of this variance were:

General and administrative expenses were $712,810 in Q1 2013, versus $940,061 in Q1 2012, as a result of the Company's previously noted cost reduction efforts.

During Q1 2013, the Company settled a lawsuit against Tanksmart Inc., a Saskatoon, Saskatchewan supplier of water and wastewater storage tanks, in the amount of $295,000, in respect of the supply by Tanksmart Inc. of process wastewater storage tanks that failed and had to be replaced in the fall of 2011. The settlement has been presented as a component of Impairment and other (income) expenses for the three months ended March 31, 2013.

Plant commissioning and start-up expenses were $207,831 in Q1 2013, versus $2,877,741 in Q1 2012, with the lower amount resulting from several offsetting factors. As a result of the previously noted reduction in crushing operations, and the fact the Company did not generate significant oil and meal revenue during the first quarter, the Company presented a portion of fixed and variable crushing operational costs, as a component of plant commissioning and start-up expenses. The increase, as a result of including crush related costs, is offset by the Company's continued cost reduction efforts and reduced scope of plant operations.

Net Finance Costs in Q1 2013 were $291,531 versus $97,252 in Q1 2012. The higher amount versus the comparable prior periods is due primarily to the interest expense and accretion of the deferred financing fees associated with the Romspen debt financing and Convertible debentures.

Net Loss

The Net Loss for the quarter was $1,298,456, versus $7,728,784 in Q1 2012. The significant variance in losses compared to Q1 2012 reflects the cumulative impact of the Company's ongoing cost reduction efforts and reduced scale of interim operations. Adjusting for the Impairment and other (income) expenses, the respective net losses are $1,593,456, and $5,136,806.

Working Capital and Liquidity

As at March 31, 2013, current assets were $2,104,494, including cash and cash equivalents of $1,643,888. Against current liabilities of $8,974,703, this results in negative net working capital of ($6,870,209), primarily due to the inclusion of the $7 million Romspen loan, including accrued interest, due in July 2013 as a current liability, as its maturity falls within one year. This compares to current assets of $3,321,747 and negative net working capital of ($4,801,379) as at December 31, 2012.

Cash Flows

BioExx's Net Cash Flow From (Used In) Operating Activities during the quarter was ($586,123), compared to ($4,107,692) in Q1 2012. The differences primarily reflect the continued cost reduction efforts in the current quarter, as discussed above.

About BioExx Specialty Proteins Ltd.

Headquartered in Toronto, Canada, BioExx is focused on the separation of oil and high-value proteins from oilseeds for global food, beverage, nutrition, and other markets. BioExx employs trade secret, patented and patent-pending technologies to enable the improved separation of proteins from oilseeds. BioExx believes that these processes cumulatively have the potential to make a valuable contribution to global food and protein supply while maintaining an environmentally sustainable footprint.

To find out more about BioExx Specialty Proteins Ltd. (TSX:BXI), please visit

The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for BioExx's products, the availability of funding, the efficacy of its technology, and the anticipated costs of BioExx's plant construction and operation. Furthermore, there can be no guarantees that any agreement will be signed with a strategic partner. These forward-looking statements are made as of the date hereof and BioExx does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from BioExx's expectations and projections.

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