TORONTO, ONTARIO -- (Marketwired) -- 08/16/13 -- BioExx Specialty Proteins Ltd. (TSX: BXI) today announced its financial results for the three and six months ended June 30, 2013.
Financial Results for the Three and Six Months Ended June 30, 2013
Subsequent to June 30, 2013, the Company announced that it engaged a firm to undertake a process to explore a sale of the Company, and if feasible and subject to shareholder approval, to sell the Company. As a result of this and other related factors, the Company has prepared its financial statements on the liquidation basis, rather than the going concern basis, as required by International Accounting Standard 1.
During the quarter, the Company generated $60,575 of revenue from canola oil and canola meal sales at its Saskatoon plant, versus revenue of $136,008 in Q2 2012. As previously discussed, 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. On May 24, 2013, the Company ceased production at the plant.
Gross Profit (Loss)
Cost of Goods Sold for the quarter was $108,346, compared to $602,611 in Q2 2012. The decrease results from the low processing volumes and reduced scope of operations as discussed above. As a result of development and piloting activity, 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 $47,771, versus $466,603 for the comparable prior year period.
The Company incurred other expenses during the quarter of $8,431,407, compared to $3,390,160 in Q2 2012. The primary components of this variance were:
General and administrative expenses were $847,210 in Q2 2013, versus $980,219 in Q2 2012, as a result of the Company's previously noted cost reduction efforts.
During Q2 2013, the Company conducted an evaluation of potential impairment of the carrying amount of the Company's intangible assets. The evaluation of potential impairment was required as a result of the Company announcing, subsequent to the period, that it had engaged a firm to undertake a process to explore a sale of the Company, and if feasible and subject to shareholder approval, to sell the Company. The Company recognized an impairment charge on the entire carrying value of its intangible assets, in the amount of $5,087,519, as it is unable to quantitatively assess and support the value of the intangible assets. The impairment charge has been presented as a component of Impairment and other income (expenses) for the three months ended June 30, 2013. In 2013, the Company announced that it intended to discontinue operations at its facility in Saskatoon, Saskatchewan. As a result of the impending sale of the Saskatoon plant assets, the carrying amount of the assets held for sale has been estimated at their fair value less costs to sell. The Company announced that it had signed binding purchase agreements for its Saskatoon land, building and equipment for gross proceeds of $11,113,000. As a result, the Company recognized an impairment charge of $378,428 which has been presented as a component of Impairment and other income (expenses) for the three months ended June 30, 2013. Impairment and other income (expenses) also includes severance costs for employees that were terminated on or before June 30, 2013, in the amount of $271,332.
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