Form 8-K BioAmber Inc. For: Aug 04
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 4, 2015
BIOAMBER INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-35905 |
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98-0601045 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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1250 Rene Levesque West, Suite 4310 |
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3850 Lane North, Suite 180 |
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Montreal, Quebec, Canada H3B 4W8 |
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Plymouth, Minnesota 55447 |
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(Address of principal executive offices) |
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Registrant's telephone number, including area code (514) 844-8000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02.Results of Operations and Financial Condition
On August 4, 2015, BioAmber Inc. issued a press release announcing its preliminary financial results for the three months ended June 30, 2015. The full text of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Pursuant to General Instruction B.2. to Form 8-K, the information set forth in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01.Financial Statements and Exhibits
(d) Exhibits
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Exhibit |
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Number |
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Description |
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99.1 |
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Press Release dated August 4, 2015. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: August 4, 2015 |
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BIOAMBER INC. |
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By: |
/s/ Francois Laurin |
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Francois Laurin |
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Chief Financial Officer |
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Exhibit |
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Number |
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Description |
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99.1 |
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Press Release dated August 4, 2015. |
Exhibit 99.1
BioAmber Reports Second Quarter 2015 Financial Results
Montreal, Canada, August 4, 2015. BioAmber Inc. (NYSE: BIOA), a leader in renewable materials today announced its financial results for the quarter ending June 30, 2015. Highlights included:
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The Sarnia plant achieved mechanical completion in June 2015 |
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The final cost of the Sarnia plant is projected to be $141.5 million or $4.0 million above the high end of the estimate communicated at the onset of the project ($125 million +/- 10%) |
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The company announced commercial collaborations in two targeted industry segments; with Bayer MaterialScience for textiles and with Flokser and DuPont Tate & Lyle for synthetic leather |
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BioAmber raised $35.1 million in gross proceeds through a public offering of common stock |
“Completing construction was a major milestone for the Company,” said Jean-Francois Huc, BioAmber’s Chief Executive Officer. “Commissioning is progressing well and we expect to be in commercial operation this quarter. We are seeing an acceleration of bio-succinic acid’s use in polyurethanes, paints and coatings, with a growing number of customer product launches coinciding with our Sarnia plant coming into production” he added.
Sarnia Highlights
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Ongoing commissioning and start up activities progressed well during the quarter, with functioning utilities throughout the plant and sterility testing successfully completed |
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An opening ceremony on August 6th 2015 is scheduled to include Ontario’s Deputy Premier, other elected officials and representatives of government agencies that supported Sarnia funding |
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The plant remains on schedule to be in commercial operation in Q3 2015 |
Other Business Highlights
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Bayer MaterialScience, one of the world’s largest polymer companies, began commercializing a new range of polyurethanes for textiles that incorporated bio-succinic acid supplied by BioAmber |
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Flokser, a global leader in leather and suede fabrics, launched an innovative synthetic leather fabric using bio-based materials supplied by DuPont Tate & Lyle BioProducts and BioAmber. |
Financial Highlights
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Net cash burn for operating expenses continued to be below $2.0 million per month in Q2 2015, after excluding the one-time activities related to Sarnia commissioning |
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Cash on hand was $48.7 million as of June 30,2015 |
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The Company completed a public offering of 3,900,000 shares of common stock at a price of $9.00 per share, raising gross proceeds of $35.1 million |
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The Company achieved its Sarnia construction milestones as validated by an independent engineer and as a result received CDN$20 million in loan proceeds from a consortium of lenders including Export Development Canada, Farm Credit Corporation and Comerica Bank |
1 | Page
Second Quarter 2015 Financial Results
Revenues for the quarter ended June 30, 2015 decreased to $342,000 from $415,000 for the same period in 2014. The decrease was primarily due to a reduction in average selling price partially offset by an increase in volume sold.
Gross loss in the quarter ended June 30, 2015 decreased to $410,000 from $1.8 million for the same period in 2014. This was driven primarily by a $1.3 million reduction in the inventory reserves taken this quarter compared to the same period last year.
Research and development expenses for the quarter ended June 30, 2015 increased to $5.0 million from $4.3 million for the same period in 2014. The increase was primarily due to an increase in non-recurring expenses related to the commissioning and start-up of the Sarnia plant. This was partially offset by stock-option compensation expenses related to stock option cancellations in the second quarter of 2014, which did not occur in 2015.
Sales and marketing expenses for the quarter ended June 30, 2015 decreased to $1.1 million from $1.7 million for the same period in 2014. This was driven by stock-option compensation expenses related to stock option cancellations in the second quarter of 2014, which did not occur in 2015.
General and administrative expenses for the quarter ended June 30, 2015 remained stable at $3.0 million compared to $2.9 million for the same period last year.
Other operating expenses increased $1.8 million for the quarter ended June 30, 2015 as compared to the same period in 2014. The Company disclosed in May 2015 that it had terminated its license agreement with DuPont following its decision to pursue BDO commercialization with technology it licensed from JM Davey. As a result, the Company recorded a non-cash write down of the intangible asset in the amount of $1.1 million. In addition the Company had $200,000 foreign exchange loss for the quarter ended June 30, 2015 as compared to a $400,000 gain for the same period in 2014. Financial charges were stable at $3.8 million compared to $3.9 million for the same period last year.
The Company recorded a net loss attributable to BioAmber Inc. shareholders of $14.0 million, or a loss of $0.58 per share for the quarter ended June 30, 2015, compared to a net loss of $14.0 million, or a loss of $0.75 per share, for the same period in 2014.
The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the quarter ended June 30, 2015 was $9.5 million, or a loss of $0.39 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $7.5 million, or a loss of $0.40 per share, for the same period in 2014. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the quarter ended June 30, 2015, the impact of the change in fair value of the warrants issued in connection with the IPO, the non-cash inventory reserve expense and the intangible asset impairment related to the termination of a technology license. The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the quarter ended June 30, 2014, the impact of the change in fair value of the warrants issued in connection with the IPO, the non-cash inventory reserve expense and the non-cash expense resulting from the cancellation of certain employee stock options. Please refer to Annex A: “Non-GAAP Financial Information—Adjusted Net Loss Attributable to BioAmber Inc. Shareholders” for more information regarding this non-GAAP financial metric.
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Webcast and Conference Call Information
BioAmber will discuss these results on a live audio webcast, which will be available on the Internet to investors, members of the news media and the general public at 4:30 p.m. Eastern Time on August 4, 2015. To access the webcast of the conference call, go to the company’s website, www.bio-amber.com. Audio of the teleconference is also available by dialing:
North American callers: +1 (888) 390-0546
International callers: (416) 764-8688
Teleconference replays will be available through August 11, 2015:
Domestic: 1-888-390-0541
International: 416-764-8677
Passcode: 431208 #
A replay of the webcast will also be available approximately two hours after the conclusion of the live webcast on BioAmber’s website, for a period of 30 days.
About BioAmber
BioAmber (NYSE: BIOA) is a renewable materials company. Its innovative technology platform combines biotechnology and catalysis to convert renewable feedstock into building block materials that are used in a wide variety of everyday products including plastics, paints, textiles, food additives and personal care products. For more information visit www.bio-amber.com
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to the projected capital costs of the Sarnia facility, the commissioning and start up schedule, the beginning of our commercial operations and future sales for our Bio-SA facility including sales to Bayer MaterialScience and Flokser. All statements other than statements of historical fact contained in this press release are forward-looking statements. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may” or similar expressions. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond BioAmber’s control. BioAmber’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur and the timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. For additional disclosure regarding these and other risks faced by BioAmber, see disclosures contained in BioAmber's public filings with the SEC including, the "Risk Factors" section of BioAmber's most recent Annual Report on Form 10-K.
3 | Page
Mike Hartmann
Executive Vice President
514-844-8000 Ext. 120
4 | Page
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Consolidated Statements of Operations |
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(unaudited, in thousands, except for shares) |
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Three Months Ended |
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2015 |
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2014 |
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$ |
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$ |
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Product sales |
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342 |
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415 |
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Cost of goods sold |
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752 |
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2,251 |
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Gross loss |
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(410) |
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(1,836) |
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Operating expenses |
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Research and development |
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4,960 |
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4,259 |
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Sales and marketing |
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1,124 |
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1,737 |
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General and administrative |
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2,964 |
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2,865 |
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Depreciation and amortization |
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93 |
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60 |
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Impairment loss |
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1,141 |
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— |
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Foreign exchange loss (gain) |
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202 |
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(379) |
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Operating Expenses |
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10,484 |
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8,542 |
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Operating loss |
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10,894 |
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10,378 |
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Amortization of deferred financing costs |
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92 |
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72 |
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Financial charges (income), net |
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3,829 |
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3,871 |
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Other expense (income),net |
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— |
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(185) |
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Loss before income taxes |
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14,815 |
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14,136 |
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Income taxes |
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11 |
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9 |
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Net Loss |
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14,826 |
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14,145 |
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Net Loss attributable to: |
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BioAmber Inc. shareholders |
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14,026 |
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13,992 |
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Non-controlling interest |
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800 |
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153 |
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14,826 |
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14,145 |
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Net Loss per share attributable to |
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BioAmber Inc. shareholders - basic |
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$ 0.58 |
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$ 0.75 |
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Weighted-average common shares |
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outstanding- basic |
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24,283 |
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18,575 |
5 | Page
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BioAmber Inc. |
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Consolidated Balance Sheet Information |
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(unaudited, in thousands) |
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As of |
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As of |
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Assets |
$ |
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$ |
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Current assets: |
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Cash |
48,665 |
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51,043 |
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Accounts receivable |
407 |
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477 |
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Inventories |
1,312 |
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1,802 |
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Prepaid expenses and other current assets |
4,346 |
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3,770 |
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Total current assets |
54,730 |
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57,092 |
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Property and equipment, net |
126,963 |
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88,665 |
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Investment in equity method and cost investments |
448 |
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35 |
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Intangible assets including goodwill |
5,938 |
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4,957 |
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Restricted cash |
607 |
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647 |
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Deferred financing costs |
1,387 |
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1,044 |
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Total assets |
190,073 |
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152,440 |
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Liabilities |
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Current Liabilities: |
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Accounts payable and accrued liabilities |
17,171 |
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17,443 |
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Income taxes payable |
204 |
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204 |
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Deferred grants |
5,163 |
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2,275 |
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Short-term portion of long term debt |
12,025 |
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2,978 |
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Total current liabilities |
34,563 |
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22,900 |
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Long-term debt |
46,187 |
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34,653 |
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Warrants financial liability |
15,776 |
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13,040 |
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Other long term liabilities |
459 |
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128 |
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Total liabilities |
96,985 |
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70,721 |
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Redeemable non-controlling interest |
25,359 |
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24,190 |
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Shareholders’ Equity |
67,729 |
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57,529 |
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Total Liabilities and Shareholders’ Equity |
190,073 |
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152,440 |
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BioAmber Inc. |
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Consolidated Statements of Cash Flows |
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(unaudited, in thousands) |
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Six Months ended June 30, |
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2015 |
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2014 |
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$ |
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$ |
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Operating Activities |
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Net Loss |
(23,794) |
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(34,097) |
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Adjustments to reconcile net loss to cash: |
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Stock-based compensation |
3,013 |
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4,522 |
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Depreciation and amortization |
165 |
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120 |
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Warrant revaluation |
2,736 |
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14,640 |
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Accretion of end of term charge on long-term debt |
344 |
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474 |
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Amortization of deferred financing costs |
158 |
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145 |
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Impairment loss |
1,141 |
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— |
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Change in working capital |
642 |
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6,223 |
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Other |
24 |
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22 |
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Net cash used in operating activities |
(15,571) |
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(7,951) |
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Investing Activities |
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Acquisition of property and equipment |
(52,433) |
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(32,728) |
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Change in restricted cash |
— |
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(678) |
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Investment in equity method and cost investments |
(413) |
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675 |
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Net cash used in investing activity |
(52,846) |
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(32,731) |
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Financing Activities |
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Deferred financing costs |
(490) |
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(561) |
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Issuance of long-term debt |
21,967 |
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2,191 |
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Government grants |
7,947 |
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792 |
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Net proceeds from issuance of shares |
37,416 |
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8,265 |
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Net cash provided by financing activities |
66,840 |
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10,687 |
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Foreign exchange impact on cash |
(801) |
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571 |
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Decrease in cash |
(2,378) |
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(29,424) |
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Cash, beginning of period |
51,043 |
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83,728 |
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Cash, end of period |
48,665 |
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54,304 |
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ANNEX A: Non-GAAP Financial Information
Adjusted Net Loss Attributable to BioAmber Inc. Shareholders
The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for quarter ended June 30, 2015 was $9.5 million, or a loss of $0.39 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $7.5 million, or a loss of $0.40 per share, for the same period in 2014. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the quarter ended June 30, 2015, the impact of the change in fair value of the warrants issued in connection with the IPO, the non-cash inventory reserve expense and the intangible asset impairment related to DuPont technology. The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the quarter ended June 30, 2014, the impact of the change in fair value of the warrants issued in connection with the IPO, the non-cash inventory reserve expense and the non-cash expense resulting from the cancellation of certain employee stock options.
BioAmber presents Adjusted Net Loss Attributable to BioAmber Inc. Shareholders as a supplemental measure of BioAmber’s performance. The above items are excluded from BioAmber’s Adjusted Net Loss Attributable to BioAmber Inc. Shareholders because these items are non-cash in nature, or because the amount and timing of these items are either unpredictable or not driven by current operating results and renders comparisons with prior periods and competitors less meaningful. BioAmber believes Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a useful measure for analysts and investors to evaluate BioAmber’s future ongoing performance as this measure allows for a more meaningful comparison of BioAmber’s projected cash earnings and performance with its historical results from prior periods and to the results of its competitors. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders corresponds more closely to the cash operating income generated from BioAmber’s business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of BioAmber’s business.
Adjusted Net Loss Attributable to BioAmber Inc. Shareholders has certain limitations in that it does not take into account the impact of certain expenses to BioAmber’s consolidated statements of operations. In evaluating Adjusted Net Loss Attributable to BioAmber Inc. Shareholders, you should be aware that in the future BioAmber may incur expenses similar to the adjustments in this presentation. BioAmber’s presentation of Adjusted Net Loss Attributable to BioAmber Inc. Shareholders should not be construed as an inference that BioAmber’s future results will be unaffected by unusual or non-recurring items. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is not a measurement of BioAmber’s financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.
8 | Page
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BioAmber Inc. |
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Non-GAAP Financial Information |
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(unaudited, in thousands) |
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Three Months Ended |
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2015 |
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2014 |
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$ |
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$ |
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Net loss attributable to BioAmber Inc. Shareholders |
14,026 |
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13,993 |
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Deduct: |
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Warrants revaluation |
3,056 |
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3,040 |
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Intangible impairment |
1,141 |
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— |
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Inventory reserve |
300 |
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1,635 |
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Additional charge for cancellation of stock options |
— |
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1,853 |
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Adjusted Net Loss attributable to |
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BioAmber Inc. shareholders |
9,529 |
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7,465 |
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Adjusted net loss per share attributable to |
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BioAmber Inc. shareholders - basic |
0.39 |
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0.40 |
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Weighted-average of common shares |
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outstanding- basic |
24,283 |
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18,575 |
9 | Page