VANCOUVER, Sept. 29 /CNW/ -- Lignol Energy Corporation (TSX-V: LEC) ("Lignol" or "the Company"), a leading technology company in the cellulosic ethanol and biorefining sector, today announced its financial results for the three-month period ended July 31, 2009 (All figures in Canadian dollars, unless otherwise noted).
Q1 FY10 Highlights:
- Completed first end-to-end production of cellulosic ethanol from
fully integrated industrial-scale biorefinery pilot plant;
- Signed Memorandum of Understanding with BAE Systems PLC to explore
and develop commercial applications for biochemicals from Lignol's
biorefinery process; and to develop and evaluate financing strategies
for commercial scale biorefineries; and
- Subsequent to quarter end, Lignol was awarded up to $4.72 million in
funding contributions from Sustainable Development Technology Canada
("SDTC"); and up to $1.18 million in funding assistance from BC
Bioenergy Network Association ("BCBN"). These funding awards bring
the total of current and potential resources available to the Company
to $20.5 million.
"During the quarter we achieved a major milestone with the completion of our first end-to-end production run of cellulosic ethanol from our industrial-scale pilot plant, making Lignol one of only six companies in the world with an operational facility producing cellulosic ethanol using non-food source feedstocks. We are refining our processes for a widening assortment of feedstocks under various operating conditions and evaluating key equipment components and modifications. We are also continuing our collaborations with leading enzyme companies and working with various companies to develop commercial applications using our high purity HP-L(TM) lignins," said Ross MacLachlan, President and CEO of Lignol. "The government funding that we continue to benefit from provides important financial support for the ongoing advancement of our commercial development plan, and we believe also provides strong third party validation for the commercial potential of our unique biorefinery process. Looking ahead, our primary goals for the remainder of fiscal 2010 include: continued performance optimization of our pilot plant; advancing the evaluation of specific locations and strategic opportunities for constructing a larger commercial demonstration plant; and advancing the development of commercial applications for our biochemical co-products."
For the three-month period ended July 31, 2009 ("Q1 FY10"), the Company reported a loss of $1.87 million, or $(0.04) per share (basic and fully diluted) compared to a loss of $1.90 million or $(0.04) per share (basic and fully diluted) for the three-month period ended July 31, 2008 ("Q1 FY09"). When stock-based compensation is excluded, Lignol's Q1 FY10 loss was $1.60 million compared to $1.59 million in Q1 FY10. A decrease in general and administrative expenses were largely offset by an increase in research and development expenses in Q1 FY10 as compared to Q1 FY09.
Total gross research and development related costs were $2.36 million for the quarter ended July 31, 2009 as compared to $5.62 million in Q1 FY09. Of these amounts, $0.78 million and $4.09 million, for Q1 FY10 and Q1 FY09, respectively, were capitalized and $1.58 million and $1.53 million, respectively, were expensed during the periods. This reflects a year-over-year decrease in capital expenditures of $3.31 million which is attributable to the fact that in Q1 FY09 the construction of Lignol's new industrial-scale biorefinery pilot plant was at its peak phase.
General and Administrative ("G&A") expenses for Q1 FY10 totaled $0.51 million, compared to $0.91 million in the comparable first quarter of fiscal 2009. The overall decrease in G&A expenses is primarily due to a reduction in legal fees related to certain contract negotiations and corporate activities.
Government and corporate contributions for the quarter ended July 31, 2009 totaled $1.43 million, compared to $2.94 million for the quarter ended July 31, 2008. Of these amounts, $0.77 million and $2.42 million, for Q1 FY10 and Q1 FY09, respectively, were credited against plant and equipment capitalized on the balance sheet, and $0.66 million and $0.52 million, for Q1 FY10 and Q1 FY09, respectively, were credited against the statement of operations. This decrease in total government and corporate contributions of $1.50 million is directly related to the decrease in eligible research and capital expenditures incurred during Q1 FY10 as compared with Q1 FY09.
As at July 31, 2009, the Company had cash, cash equivalents and short-term investments of $7.62 million and a working capital surplus of $7.41 million. These balances represent a decrease of $1.88 million and $1.17 million, respectively, compared to the corresponding balances as at April 30, 2009. The decreases reflect cash used in operations and for capital additions incurred in Q1 FY10, net of government and corporate contributions. Subsequent to July 31, 2009 Lignol is eligible to receive up to a further $12.85 million from various government agencies in respect of funding awards which have been made up to and including September 25, 2009. These funding awards are intended to be applied against future expenses incurred under various development programs which are expected to be complete at various times before early 2012. The combination of $7.62 million in available funds on hand at July 31, 2009 and such additional government grants brings the total of current and potential resources available to the Company to $20.47 million.
The Company believes that, factoring in the expected timeline of receipt of the funding from the various government agencies, the combination of funding sources noted above should be sufficient to fund its Baseline Operations until at least September 30, 2010, using the definition of "Baseline Operations" as set out in Management's Discussion & Analysis of Financial Condition and Results of Operations for the three month period ended July 31, 2009. This forecast excludes funds from any potential new government grants or contributions from any potential new corporate partnerships. Lignol is actively seeking funding from such additional sources which, if obtained, would further extend the Company's projected operating runway for Baseline Operations past September 30, 2010.
Lignol's complete financial statements for the three-months ended July 31, 2009 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.
Lignol (TSX-V: LEC) is a Canadian company undertaking the development of biorefining technologies for the production of fuel-grade ethanol and other biochemical co-products 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(TM) lignins. 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.
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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 fund our Baseline Operations, our fully integrated biorefinery pilot plant in Burnaby, British Columbia, the planning and development of our previously proposed cellulosic ethanol commercial demonstration plant, our ability to exploit commercial opportunities and broaden our market opportunities for a range of cellulosic derivatives and environmentally sustainable biochemicals and our ability to pursue these opportunities with strategic partners. 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 finance and complete the development of the commercial demonstration plant, our ability to develop our products, our ability to obtain requisite regulatory approvals and our ability to enter into agreements with strategic partners on terms acceptable to us. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. 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 complexity of the development of the commercial demonstration plant, market conditions which will effect our ability to finance our operations, 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.