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Functional Technologies Announces First Quarter 2013 Financial Results
By: Marketwired .
Jan. 29, 2013 05:27 PM
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/29/13 -- Functional Technologies Corp. (TSX VENTURE:FEB) (the "Company") today reported operational and financial results for the first quarter ended November 30, 2012 ("Q1/13"). Amounts, unless specified otherwise, are expressed in Canadian dollars.
The Company incurred a net loss of $1.4 million during the period, representing an increase of $0.3 million when compared to a net loss of $1.1 million during Q1/12.
Operating expenses, excluding stock-based compensation expenses, for Q1/13 were $0.8 million, compared to $1.2 million in Q1/12.
Liquidity and Outstanding Share Capital
As at November 30, 2012, the Company had cash and short-term investments of $1.1 million compared to $0.38 million as at August 31, 2012. The Company expects future operating expenses, excluding payments made to settle Federal Government obligations (see below), to be in the range of $0.3 million to $0.4 million per quarter, going forward into the foreseeable future. This follows prior announcements that the Company is divesting itself of its PEI assets and obligations and concentrating its resources on commercializing core yeast technologies in conjunction with global industry partners and is consistent with the revised business model designed to achieve positive cash flow as quickly as possible.
As at January 28, 2013, Functional Technologies had 61,370,444 common shares issued and outstanding.
During Q1/13, the Company:
-- On October 21, 2012, the Company announced the signing of an agreement with a leading global yeast producer, under which production of acrylamide-preventing yeast was to commence. Test-quantities of acrylamide-preventing yeast have been produced pursuant to this Material Transfer Agreement. -- On October 10th, 2012, the Company completed the second tranche of a private placement, issuing 9,626,000 units valued at $0.20 per unit, raising $1,925,200 less share issuance costs of $119,816. -- On September 14, 2012, the Company announced the successful commercial launch of its new selectively bred PhyterraTM-branded hydrogen sulphide (H2S)-preventing wine yeast strains that have also been selected for low sulphur dioxide (SO2) production. -- On September 5, 2012, the Company announced that the U.S. Food and Drug Administration ("FDA") had accepted the Company's Generally Regarded As Safe ("GRAS") Notice for its acrylamide-preventing yeast strains.
Subsequent to quarter-end:
-- The Company reached a settlement with the Atlantic Canada Opportunities Agency ("ACOA" or the "Agency") resolving all of the Company's outstanding liabilities with the Agency, totaling $3.9m. In the prior reporting period the Company had taken a provision of $3.3m in anticipation of an eventual settlement with ACOA. The Company will repay ACOA as follows: $400,000 payable by June 15, 2013, followed by payments of $200,000 per quarter, until a total of $2.85m plus interest at 7.0% per annum has been repaid. The Company will also grant ACOA a general security agreement until such time as the amounts described have been repaid. The settlement is subject to the completion and execution of definitive agreements. -- The Company entered into an agreement to transfer certain non-core assets, which had been impaired in their entirety in a prior period, to a company controlled by former employees. The former employees have released the Company from all claims, including those for severance.
The Company's Q1/13 consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), reporting standards to which the Company transitioned from Canadian Generally Accepted Accounting Principles during the fiscal year ended August 31, 2012.
This news release should be read in conjunction with the Company's consolidated financial statements for the quarter ended November 30, 2012 and the notes thereto, together with the MD&A for the corresponding period, which are available on the Company's website www.functionaltechcorp.com and on SEDAR at www.sedar.com.
This news release contains forward-looking information (within the meaning of Canadian securities legislation) about the Company and its future plans. Forward-looking information relate to future events or future performance and reflect management's expectations or beliefs regarding future events rather than historical facts, and in this news release include the statement (the "forward-looking statement") that the Company expects future operating expenses, excluding payments made to settle Federal Government obligations, to be in the range of $0.3 million to $0.4 million per quarter, going forward into the foreseeable future. This forward-looking statement is subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by the forward-looking statement including, without limitation, uncertainty as to the Company's ability to achieve the goals and satisfy the assumptions of management, and general economic factors and other factors that may be beyond the control of the Company. Forward-looking statements are based on the opinions and expectations of the Company's management at the time they are made, and the Company does not assume any obligation to update its forward-looking statements if those opinions or expectations, or other circumstances, should change. Reference should be made to the section entitled "Risks and Uncertainties" commencing on page 13 of the Company's management's discussion and analysis relating to the fiscal quarter ended November 30, 2012, which is available on the Company's website www.functionaltechcorp.com and on SEDAR at www.sedar.com.
About Functional Technologies Corp.
Functional Technologies develops and commercializes proprietary, advanced yeast-based solutions to significant challenges in the food, beverage and healthcare industries. The Company's platform improves the performance of innate yeast functions, and prevents the formation of naturally occurring toxins and contaminants that either affect final product quality or are classified by the World Health Organization as probable human carcinogens. Functional Technologies' lead technologies include yeasts that prevent and reduce the formation of the foul-smelling hydrogen sulphide (H2S) and the carcinogens acrylamide and ethyl carbamate (more commonly known as urethane), by-products of food and beverage processing. These contaminants are found in many commonly consumed items, such as fermented food products and alcoholic beverages, and baked and fried foods.
The head office and R&D operations for Functional Technologies are based in Vancouver, BC, Canada.
For more information, please visit our website at www.functionaltechcorp.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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