TIDMABTU
RNS Number : 4566F
Aqua Bounty Technologies, Inc.
28 July 2016
28 July 2016
AquaBounty Technologies, Inc.
("AquaBounty" or "the Company")
Interim results for the six months ended 30 June 2016
AquaBounty Technologies, Inc. (AIM: ABTU; OTC: AQBT), a
biotechnology company focused on enhancing productivity in
aquaculture and a majority-owned subsidiary of Intrexon Corporation
(NYSE: XON), announces its interim results for the six months ended
30 June 2016.
Summary:
-- Health Canada concluded its review of the AquAdvantage(R)
Salmon ("AAS") and approved it for commercial sale in Canada;
-- Initiated field trials of AAS in Brazil and Argentina;
-- Purchase of Snow Island's Atlantic Sea Smolt plant in Rollo
Bay West for use as a brood stock farm completed post period;
-- Agreed to a US$10.0 million convertible debt facility with
Intrexon Corporation ("Intrexon");
-- Net loss for the first six months was US$3.9 million (H1 2015: US$3.5 million); and
-- Balance of cash and marketable securities at 30 June 2016 was
US$1.9 million (31 December 2015: US$1.3 million) with US$5.0
million of the debt facility remaining to be drawn.
Ron Stotish, Chief Executive Officer of AquaBounty,
commented:
"This was another significant milestone period for us during
which AquaBounty took important steps towards the commercialization
of our AquAdvantage Salmon. Health Canada authorities gave their
approval for our salmon to be produced, sold and consumed in
Canada, following a similar approval from the U.S. Food and Drug
Administration in 2015. We now have independent scientific reviews
and approvals from two of the most respected regulatory agencies in
the world that have confirmed the safety of our salmon for human
consumption and for the environment.
"We are making the necessary preparations for the commercial
launch of our product and we look forward to bringing our more
sustainably produced salmon to consumers, with the assurance that
it is nutritious, safe and healthy."
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations
For further information, please contact:
AquaBounty Technologies, Inc. +1 978 648 6048
David Frank, Chief Financial Officer
Stifel Nicolaus Europe Ltd +44 (0)20 7710 7600
Stewart Wallace
Luther Pendragon Ltd +44 (0)20 7618 9100
Harry Chathli, Claire Norbury
Chairman's Statement
Regulatory Review
Health Canada Approval
As reported on 20 May 2016, Health Canada, the department of the
government of Canada with responsibility for national public
health, conducted a comprehensive assessment of AAS according to
the Codex Alimentarius Guideline for the Conduct of Food Safety
Assessment of Foods Derived from Recombinant-DNA Animals. The
Health Canada review concluded that AAS does not raise concerns
related to food safety. The Department also noted its opinion that
fillets derived from AAS are as safe and nutritious as fillets from
currently available farmed Atlantic salmon.
Having received approval from the U.S. Food and Drug
Administration ("FDA") in November 2015, AquaBounty now has
regulatory approval for the production, sale and consumption of
AquAdvantage Salmon in both the United States and Canada.
Update on Legal Actions
In January 2014, an application was brought before the Federal
Court ("Court") in Canada by the Ecology Action Centre and Living
Oceans Society (the "Petitioners") that challenged the decision by
the Ministers of Environment and Health ("Ministers") to allow
production of AquAdvantage Salmon in Canada for commercial use. In
December 2015, the Court ruled that the decision of the Ministers
was "reasonable and made in the manner prescribed by the Canadian
Environmental Protection Act." Accordingly, the Court dismissed the
entire application brought before it. The Petitioners have now
filed an appeal of the Court's ruling.
In April 2016, a coalition of NGOs sued the FDA for their
approval of AquAdvantage Salmon. The coalition, including the
Centre for Food Safety and Friends of the Earth, claims that the
agency failed to analyze and prevent the risks to wild salmon and
the environment, including the risk that AquAdvantage Salmon could
escape and threaten endangered wild salmon stocks.
The Company expects that the Canadian appeal will be dismissed
and that the FDA approval will stand, as both the Canadian and U.S.
regulatory agencies were extraordinarily thorough and transparent
in the review and approval of AquaBounty's applications.
Congressional Developments
In January 2016, the U.S. Congress passed the 2016 Omnibus
Appropriations Act ("Act") which was signed into law. The Act
contained an amendment that directed the FDA to issue final
guidance for GMO labeling of AAS, despite the absence of any GMO
labeling requirement in the FDA's New Animal Drug Application
approval. Current FDA policy does not require labeling for method
of production if there is no material difference compared with its
traditional counterpart, and the FDA found AAS to be as safe to
consume as traditional farmed Atlantic salmon. However, given this
directive, the FDA issued an Import Alert on AAS and stated that a
temporary hold was being implemented to comply with language in the
Act. At this time, the Company has no information on when the
Import Alert will be lifted or when the FDA will finalize its
labeling guidance for AAS.
Operational Review
Production Expansion in Canada
AquaBounty purchased the former Snow Island Sea Smolt plant in
Rollo Bay West on Prince Edward Island ("PEI") after receiving
approval by the Prince Edward Island Department of Environment of
the Company's application to use the site for brood stock
expansion. The transaction closed in July 2016 and the Company
plans to use the new location to raise conventional Atlantic salmon
to provide eggs that will be transferred to its plant in Bay
Fortune. The purchase of this property is part of the Company's
plan to scale up its production capacity to support the commercial
rollout of AquAdvantage Salmon. The Company expects to complete
renovations to the site by November 2016 in order to commence egg
production.
Field Trials
Since mid-2014, the Company has been working with local
regulatory agencies to prepare for field trials of AAS in several
foreign markets. This process has progressed and in April 2016
field trials were initiated in Argentina and Brazil.
Financial Review
Convertible Debt Facility
On 23 February 2016, AquaBounty executed an unsecured,
convertible bridge loan of US$10.0 million from Intrexon to cover
the Company's immediate working capital requirements. The terms of
the loan include an interest rate of 10%, a maturity date of 1
March 2017, and conversion into the Company's common shares at a
price of 23 pence per share. This source of funds is expected to
allow the Company sufficient capital to continue operations through
Q1 2017.
Six-Month Results
Operating expenses for the six-month period ended 30 June 2016
were US$3.8 million (H1 2015: US$3.5 million). The increase
reflected the Company's costs to defend against legal challenges to
its regulatory approvals in the United States and Canada. Spending
on sales and marketing projects were level, though expenses shifted
to the implementation of field trials in Argentina and Brazil.
Research spending increased slightly, as the Company added
headcount to its primary PEI facility. Cash used, net of new
financing, in the first half of 2016 was higher than the comparable
period in 2015 at US$4.4 million (H1 2015: US$3.5 million) due to
the Company's expansion in Canada and legal costs. Cash and
equivalents at the end of the first half of 2016 were US$1.9
million (31 December 2015: US$1.3 million) with US$5.0 million of
the debt facility remaining to be drawn.
Outlook
The Company believes that the market opportunity for its salmon
remains strong, especially in light of the current restrictive
limits on global Atlantic salmon farm production. The Board is
evaluating all options for the commercial development of AAS and
depending upon the extent of the Company's direct involvement in
such activity, it will, as previously stated, require funding in
addition to the Company's ongoing working capital needs. The Board
remains mindful of the importance of shareholder value in
determining the appropriate course forward.
R. J. Clothier
Chairman
AquaBounty Technologies, Inc.
Consolidated balance sheets
(unaudited)
June December
30, 31,
2016 2015
------------------------------------- ------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $1,929,659 $1,313,421
Certificate of deposit 11,068 10,339
Other receivables 23,674 41,897
Prepaid expenses and other
assets 977,273 109,898
-------------------------------------- ------------- -------------
Total current assets 2,941,674 1,475,555
Property, plant and equipment,
net 744,615 741,340
Definite lived intangible assets,
net 205,372 206,381
Indefinite lived intangible
assets 191,800 191,800
Other assets 21,628 21,628
-------------------------------------- ------------- -------------
Total assets $4,105,089 $2,636,704
-------------------------------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued
liabilities $812,725 $621,909
Current debt 5,000,000 -
Total current liabilities 5,812,725 621,909
Long--term debt 2,216,260 2,070,366
-------------------------------------- ------------- -------------
Total liabilities 8,028,985 2,692,275
-------------------------------------- ------------- -------------
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.001 par value,
200,000,000 shares authorized;
157,512,265 (2015: 157,425,309)
shares outstanding 157,512 157,425
Additional paid--in capital 90,931,212 90,816,636
Accumulated other comprehensive
loss (326,607) (226,432)
Accumulated deficit (94,686,013) (90,803,200)
-------------------------------------- ------------- -------------
Total stockholders' equity
(deficit) (3,923,896) (55,571)
-------------------------------------- ------------- -------------
Total liabilities and stockholders'
equity (deficit) $4,105,089 $2,636,704
-------------------------------------- ------------- -------------
AquaBounty Technologies, Inc.
Consolidated statements of operations and comprehensive loss
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------------------
2016 2015 2016 2015
------------------------------ ------------- ------------- ------------- -------------
COSTS AND EXPENSES
Sales and marketing $514,076 $380,293 $892,110 $948,023
Research and development 640,807 628,365 1,276,546 1,225,438
General and administrative 824,138 723,505 1,603,663 1,359,065
Total costs and expenses 1,979,021 1,732,163 3,772,319 3,532,526
------------------------------ ------------- ------------- ------------- -------------
OPERATING LOSS (1,979,021) (1,732,163) (3,772,319) (3,532,526)
OTHER INCOME (EXPENSE):
Interest and other income
(expense), net (84,815) (949) (110,494) (2,712)
------------------------------ ------------- ------------- ------------- -------------
Total other income (expense) (84,815) (949) (110,494) (2,712)
------------------------------ ------------- ------------- ------------- -------------
NET LOSS $(2,063,836) $(1,733,112) $(3,882,813) $(3,535,238)
============================== ============= ============= ============= =============
OTHER COMPREHENSIVE INCOME
(LOSS):
Foreign currency translation
gain (loss) (3,182) (33,392) (100,175) 74,261
Total other comprehensive
income (loss) (3,182) (33,392) (100,175) 74,261
------------------------------ ------------- ------------- ------------- -------------
COMPREHENSIVE LOSS $(2,067,018) $(1,766,504) $(3,982,988) $(3,460,977)
============================== ============= ============= ============= =============
Basic and diluted net
loss per share $(0.01) $(0.01) $(0.02) $(0.02)
Weighted average number
of common shares - basic
and diluted 157,512,265 144,837,134 157,483,598 144,715,431
AquaBounty Technologies, Inc.
Consolidated statements of cash flows
(unaudited)
Six Months Ended
June 30,
----------------------------
2016 2015
-------------------------------------------- ------------- -------------
OPERATING ACTIVITIES
Net loss $(3,882,813) $(3,535,238)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 64,728 51,213
Share--based compensation 114,662 118,714
Gain on disposal of equipment (2,861) -
Changes in operating assets and
liabilities:
Other receivables 20,640 (22,701)
Prepaid expenses and other assets (129,771) (120,476)
Accounts payable and accrued liabilities 178,434 49,558
-------------------------------------------- ------------- -------------
Net cash used in operating activities (3,636,981) (3,458,930)
-------------------------------------------- ------------- -------------
INVESTING ACTIVITIES
Purchases of equipment (11,523) (37,114)
Deposit on purchase of property,
plant and equipment (717,225) -
Proceeds from sale of equipment 2,861 -
Payment of patent costs (5,665) (12,796)
-------------------------------------------- ------------- -------------
Net cash used in investing activities (731,552) (49,910)
-------------------------------------------- ------------- -------------
FINANCING ACTIVITIES
Proceeds from issuance of debt 5,000,000 44,004
Proceeds from issuance of common
stock - 3,000,000
Net cash provided by financing
activities 5,000,000 3,044,004
-------------------------------------------- ------------- -------------
Effect of exchange rate changes
on cash and cash equivalents (15,229) (20,773)
-------------------------------------------- ------------- -------------
Net change in cash and cash equivalents 616,238 (485,609)
Cash and cash equivalents at beginning
of period 1,313,421 5,163,262
-------------------------------------------- ------------- -------------
Cash and cash equivalents at end
of period $1,929,659 $4,677,653
-------------------------------------------- ------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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July 28, 2016 02:02 ET (06:02 GMT)
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