A look at the balance sheet of Bioexx Specialty Proteins (TSX:BXI)

Founded in 2003, Toronto based Bioexx Specialty Proteins is in the business of oilseed processing. The Company opened its first facility in Saskatoon in March 2009. Bioexx is currently focused on canola oilseed extraction, but plans to add rapeseed, soybean and flax.

So what is oilseed extraction and why has it attracted so much attention? In a word, protein. Some experts believe that as the world population grows traditional sources of protein, such as those derived from animals, will become expensive and unsustainable. They surmise that protein from seeds such as canola will naturally follow the lead of the most recognizable oilseed product; soy. According to the USDA, worldwide soy consumption rose 125 percent from 1990 to 2007.

Until recently, the technology for extracting the protein from a plant wasn’t practical because the process required temperatures in excess of 100°C. When proteins are exposed to temperatures above 65°C they begin to denature, which reduces their nutritive value. Bioexx believes its patented extraction system, which uses refrigerant-based solvents “is the only known commercial system that allows for low temperatures to be maintained during the extraction of oils and proteins from the biomass”.

The immediately addressable markets for the for the company are large and worldwide, from vegetable protein additives to animal feed, aquaculture and oils. Bob McWhirter, President of Toronto’s Selective Asset Management says Bioexx has the potential for fast growth without having to borrow or issue more stock. Three years from now, he says, BioExx “could be a $10 stock if all goes according to plan.” (Globe and Mail Jan. 27, 2010 )

Having just begun generating revenue from its Saskatoon plant, Bioexx’s balance sheet, like the business, is clearly in transition. The Company released its Q1 2010 numbers on May 13th, that quarter showed a loss of $4.11 million on revenues of $1,695,668.
With the Q1 numbers in hand we break down the numbers on Bioexx in an updated “Quant Snapshot”.

1. Price to sales: 41.3 x sales

As of March 31st, 2010 (Q1 2010) Bioexx had 172.82 million shares
outstanding. The price as of May 21st, 2010 was $1.40 This gives The Company a market capitalization of $241.96 million. Sales in the trailing four quarters totaled $5.86 million.

2. Cash to Market Cap: 8.9%

As of Q1 2010 Bioexx’s reported cash and short term investments totaled $21.51 million. The Company’s market cap, as of May 21st, 2010 was $241.96 million.

3. Debt to market Cap: 2.31%

As of Q1 2010 The Company’s reported long term debt was $5.59 million. The Company’s market cap, as of May 21st, 2010 was $241.96 million.

4. Trailing Three year growth rate: NA

Bioexx did not generate revenue until FY 2009 when revenues totaled $4.17 million.

5. Enterprise Value to Sales: 38.57 x sales

Enterprise Value as of Q1 2010 is $226.04 million, based on a
market cap of $241.96 million plus $5.59 million in long term debt minus cash
and short term investments of of $21.51 million. Sales for the trailing four quarters totaled $5.86 million.

All financial information about Bioexx is gleaned from
their filings with the System for Electronic Document Analysis and
Retrieval (SEDAR)
All calculations are based on The Company’s closing share price as of
close May 21st, 2010: $1.40
Sales from trailing four quarters: $5.86 million
Cash and short term investments as of February 28th, 2010: $21.51 million
Shares outstanding: 172,825,519 million