TORONTO, ONTARIO -- (Marketwire) -- 04/01/13 -- BioExx Specialty Proteins Ltd. (TSX: BXI) today announced its financial results for the three and twelve months ended December 31, 2012.
"Our strategic review process has resulted in advanced stage negotiations to establish a joint venture for the commercial scale deployment of our canola protein production technology in Europe, beginning with the construction of a 75,000 MT rapeseed (canola) processing facility. Given the status of our strategic process and the limited capital available, we have made the difficult but responsible decision close our facility in Saskatoon, in order to improve our cost structure and monetize the value of those physical assets to address outstanding debts," said Chris Schnarr, Chief Executive Officer of BioExx. "We are working with our proposed partners to finalize a definitive and binding term sheet for a joint venture on or about April 30, 2013. The proposed joint venture would allow us to maximize the value of our protein technology by combining it with a complementary technology from a leading specialty oil processor with commercial operations and relationships in the European market."
A definitive and binding term sheet for the proposed joint venture is subject to final agreement on various terms between the parties. In the interim, there can be no assurance that the definitive and binding term sheet, or the proposed joint venture, will be completed as proposed, or at all.
Financial Results for the Year Ended December 31, 2012
Revenues for the year were $648,255, versus $5,348,230 in the prior year. As previously disclosed, the Company scaled back plant operations earlier in the year to conserve capital and exercise appropriate fiscal discipline. As a result of this decision, the Company ran its crush operations only as required to support the extensive piloting and development activity required for the completion of the its detailed engineering scale-up mandate. This resulted in lower processing volumes and lower revenue compared to the prior period.
Gross Profit (Loss)
Cost of Goods Sold ("COGS") for the year was $1,948,900 versus $10,101,239 in the prior year. Processing volumes were lower in 2012 versus 2011, driving a significantly lower Cost of Goods Sold. Other plant expenses included in COGS, which include maintenance expenses, QA/QC expenses, production supervision and plant supplies, were $408,656 for the year versus $1,898,042 in 2011. The change is a result of the aforementioned lower processing volumes and issues discussed below.
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 third and fourth quarters, a portion of on-going plant operations expenses (including depreciation) during those periods have been included in plant commissioning and start-up expenses, as discussed below, rather than in COGS. Depreciation of plant and equipment was $555,324 versus $985,969 in 2011, reflective primarily of the classification of expenses as a component of Plant commissioning and start-up expenses. As a result of the foregoing factors, Gross Loss for the year was ($1,300,645), versus ($4,753,009) for the comparable prior year.
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