Struggling BioExx Specialty Proteins (TSX:BXI) today announced that it had received a commitment letter from Romspen Investment Corp. that will provide the company with a $6.4-million term debt facility. Proceeds of the Romspen loan will be used to pay out the company’s existing debt facility with Farm Credit Canada, which is approximately $4-million.
“We remain on course in the execution of our strategy, and are pleased to be bolstering our cash position to provide greater strength and flexibility as we move forward through scale-up engineering and our strategic partner process.” said BioExx CEO Chris Schnarr.
The numbers, however, say Bioexx is in a race against time. The company posted a loss of $7.72-million in its recently reported Q1, 2012. As of March 31, 2012, the company’s net working capital was just $2,466,291.
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In April, the company the company began to auction off equipment it has taken a huge loss on. The impairment expense of the equipment, plus various related expenses such as three patents the company chose to abandon, added up to a carrying value of $9,620,972. This write down was clearly the biggest reason Bioexx’s losses leapt to $30.11-million from $14.9-million in fiscal 2010.
Toronto-based Bioexx rose to prominence because it developed a patented system that used refrigerant-based solvents to extract protein from plants. 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 began commercial production of canola protein isolates at its flagship facility in Saskatoon early last summer. But, almost from the outset, the company faced delays in bringing the plant online, and generated only modest revenue from canola oil and canola meal sales.
At press time, share of Bioexx were up 20% to $.09 cents.