VANCOUVER, March 30, 2012 /PRNewswire/ - Lignol Energy Corporation (TSXV: LEC) ("Lignol" or "the Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, today announced its financial results for the three and nine months ended January 31, 2012 (all figures in Canadian dollars, unless otherwise noted).
Q3 FY12 Highlights:
- Awarded up to $2.2 million in funding from Sustainable Development Technology Canada
- Lignol's IP portfolio has grown to 86 patent applications
- Lignol continues to work with CIBC World Markets Inc and Capital West Partners to explore various strategic investor opportunties
Lignol is presently one of only a handful of companies with an operational, integrated pilot-scale biorefinery capable of producing High Performance Lignin ("HP-L™ lignin") as well as a clean, reactive cellulose for both cellulosic ethanol and a range of high value cellulose applications such as dissolving pulp. The Company has completed an engineering design package for a commercial-scale biorefinery that would produce up to 80 million litres of cellulosic ethanol (approximately 20 million U.S. Gallons) and 55,000 tonnes of HP-L™ lignin derivatives annually.
During the three month period ended January 31, 2012 ("Q3 FY12"), Lignol continued to operate its pilot plant and to expand the number of HP-L™ lignin application development relationships with major industrial and research partners.
The Company also continued to expand its IP portfolio, which currently comprises of 86 patent applications at various stages of development and prosecution. On January 24, 2012 Lignol announced that four new patent applications had been approved. The patents titled "Continuous counter-current organosolv processing of lignocellulosic feedstocks", "Concurrent Saccharification and fermentation of fibrous biomass" and "Derivatives of native lignins from hardwood feedstocks", were approved in the United States, while the patent titled "Concurrent anaerobic digestion and fermentation of lignocellulosic feedstocks" was approved in China. Lignol's patent portfolio covers not only its unique process and systems but also a wide range of lignins having specific compositions of matter and use.
For the three month period ended January 31, 2012 ("Q3 FY12"), the Company reported a net loss of ($1.2) million, or ($0.02) per share (basic and fully diluted) compared to a net income of $0.4 million or $0.01 per share (basic and fully diluted) for the three month period ended January 31, 2011 ("Q3 FY11"). The $1.6 million increase in the net loss for the current period arose from a $2.0 million reduction in government and corporate contributions, net of a $0.4 million reduction in expenses.
Total funding from government and corporate contributions amounted to $0.8 million in Q3 FY12, compared to $2.8 million in Q3 FY11. Certain grant programs that funded research in Q3 FY11 had been completed before the start of the current quarter. Research and development expenditures in Q3 FY12 were also $0.3 million lower in the current period.
Total expenses incurred during Q3 FY12 were $1.9 million compared to $2.4 million for Q3 FY11. The reduction of $0.5 million in expenses largely arose from a decision to reduce costs within the Company. As a result, pilot plant operating expenses were reduced by $0.3 million, headcount related expenses were reduced by $0.1 million, and general and administrative costs were also reduced by $0.1 million.
Going Concern, Liquidity and Capital Resources
The Company's consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue its operations for the foreseeable future and contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company currently forecasts that its working capital requirements for the next twelve months will exceed the combination of its current working capital and those funds which are expected to be received from its existing government grants and corporate relationships. The ability of the Company to continue as a going concern is dependent upon its ability to continue to fund its research and development programs. There can be no assurance that the Company will be able to obtain further financing and in such event, the Company's working capital will not be sufficient to meet its stated business objectives.
The Company's consolidated financial statements and the accompanying Management's Discussion and Analysis do not reflect adjustments to the amounts and classification of assets and liabilities that may be necessary if the going concern assumptions were not appropriate and such adjustments could be material should the Company be unable to continue as a going concern.
The Company historically has financed its research and development activities, capital expenditures and operations largely through public and private sales of equity securities, government and corporate contributions, and interest income. At January 31, 2012, the Company had gross resources available of up to $3.2 million, which includes $1.7 million in cash and short-term investments currently available, and up to $1.5 million in future funding receivable sourced from contracted government and corporate funding agreements. The Company has net potential resources available to it of up to $1.6 million at January 31, 2012, after deducting $1.6 million in current liabilities.
In addition to the above, additional funding of up to $2.2 million was awarded to the Company in early February 2012 from Sustainable Development Technology Canada, the potential benefit of which, will be reflected in future financial periods.
The Company continues to manage and defer non-priority expenditures, while at the same leveraging all available funding sources to extend, as much as is possible, the overall availability of its resources.
In order to continue funding its operations, Lignol is exploring a number of options which include actively seeking additional funding from potential sources such as government grants and contributions from corporate partnerships, and the possible sale of additional equity. As announced on September 20, 2011, the Company engaged CIBC World Markets Inc. and Capital West Partners to consider a range of sources of investment, including industry and financial investors, who have a strategic, long-term interest in advanced biofuels, renewable chemicals and forest industry transformation. There can be no assurance that the Company will be able to obtain further financing on favourable terms and in such event, the Company's working capital will not be sufficient to meet its stated business objectives. (see also "Risks and Uncertainties" in the Company's annual Management's Discussion and Analysis for the year-ended April 30, 2011).
Lignol's complete financial statements for the three and nine month period ended January 31, 2012 and the related Management's Discussion & Analysis of Financial Condition and Results of Operations are available at the Company's website, www.lignol.ca, or at www.sedar.com under the Company's profile. These financial statements were prepared in accordance with the required adoption of International Financial Reporting Standards.
Lignol (TSXV: LEC) is a Canadian company undertaking the development of biorefining technologies for the production of advanced biofuels, including fuel-grade ethanol, and other renewable chemicals from non-food cellulosic biomass feedstocks. Lignol's modified solvent based pre-treatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including high purity HP-L™ lignins. HP-L™ lignin represents a new class of high purity lignin extractives (and their subsequent derivatives) which can be engineered to meet the chemical properties and functional requirements of a range of industrial applications that until now has not been possible with traditional lignin by-products generated from other processes. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology. For more information about Lignol, please visit our website at www.lignol.ca.
Neither 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.
Caution concerning forward-looking statements:
Certain statements contained in this document may constitute forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, without limitation, statements or information about our ability to continue as a going concern and to raise additional financing to fund operations, our ability to work with CIBC and Capital West to consider a range of sources of investment, including industry and financial investors who have a strategic, long term interest in advanced biofuels, renewable chemicals and forest industry transformation, the development status of our fully integrated pilot-scale biorefinery in Burnaby, British Columbia, the planning and development of our proposed commercial plant, our ability to complete project deliverables which are funded in part by government agencies, our ability to exploit commercial opportunities and broaden our market opportunities for a range of cellulosic derivatives and environmentally sustainable biochemicals including our HP-L™ lignin and lignin derivatives, our ability to produce HP-L™ lignin that meets agreed customer specifications at commercial scale, and our ability to pursue these opportunities with strategic partners including establishing off-take agreements for our products, the ability of Lignol and Novozymes to successfully work together to achieve the goal of producing fuel-grade ethanol, our ability to work with FP Innovations to develop high value cellulose applications and obtaining strategic partnership investments and government funding for initial commercial projects. Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements or information reflect Lignol's current views with respect to future events and are subject to certain risks, uncertainties and assumptions including, without limitation, our ability to establish the validity of our technology at the fully integrated biorefinery pilot plant scale, our ability to satisfy the conditions of existing government grants and to obtain new additional grants, our ability to continue to finance our operations and to finance and complete the development of a commercial project, our ability to develop our products and to obtain off-take agreements, our ability to obtain requisite regulatory approvals and our ability to enter into agreements with strategic partners on terms acceptable to us. Many factors could cause Lignol's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or information, including among other things, the technological challenges that remain to be surpassed in obtaining the necessary operating data from our fully integrated biorefinery pilot plant that is required prior to completing the next scale-up of the technology, financial market conditions which will impact our ability to finance our operations and to finance the construction and operation of a commercial plant, the price of gasoline and demand for ethanol, the market pricing and demand for renewable chemicals, risks relating to the protection of Lignol's core technology from infringement and those risk factors which are discussed elsewhere in documents that Lignol files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
SOURCE Lignol Energy Corporation