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 12, 2013
BIOAMBER INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-35905 | 98-0601045 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1250 Rene Levesque West, Suite 4110 Montreal, Quebec, Canada H3B 4W8 |
3850 Lane North, Suite 180 Plymouth, Minnesota 55447 | |
(Address of principal executive offices) |
Registrants 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:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | 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 12, 2013, BioAmber Inc. issued a press release announcing its preliminary financial results for the quarter ended June 30, 2013. 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 |
Exhibit |
Description | |
99.1 | Press Release dated August 12, 2013. |
SIGNATURES
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.
Date: August 12, 2013 | BIOAMBER INC. | |||||
By: | /s/ Andrew Ashworth | |||||
Andrew Ashworth | ||||||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Press Release dated August 12, 2013. |
Exhibit 99.1
BioAmber Reports Second Quarter 2013 Financial Results
Minneapolis, MN, August 12th, 2013. BioAmber Inc. (NYSE and EURONEXT Paris: BIOA), an industrial biotechnology company producing renewable chemicals, today announced its financial results for the three months ended June 30, 2013. Highlights included:
| On schedule to mechanically complete the Companys planned 30,000 MT bio-succinic acid plant in Sarnia, Ontario in the fourth quarter of 2014 |
| Sold over $1 million of succinic acid in the quarter, the highest quarterly sales to date |
| Completed an IPO on the New York Stock Exchange and dual listed shares on the Professional Segment of NYSE Euronext Paris, with net proceeds of $71.7 million |
| Closed on a three year, $25 million term loan with Hercules Growth Technology Capital |
Our Sarnia plant continues to be the main focus of our business and we are pleased with our progress, which remains on track, said Jean-Francois Huc, President and Chief Executive Officer of BioAmber. When completed, the Sarnia plant will be the worlds largest succinic acid production facility, benefiting from competitive energy and sugar prices and economies of scale. Mr. Huc continued, As a result of the yield and cost benefits of our yeast technology, which we demonstrated through large-scale operation in Pomacle, France, we decided to design the Sarnia plant using the yeast. With the proceeds from the IPO and other sources of funding we have secured, we believe we have sufficient cash to build and start up the Sarnia plant.
Business Highlights
| The Company has assembled an experienced project team based in Sarnia, is in the process of selecting and contracting a construction partner and has begun site preparation work |
| The Company has frozen the yeast engineering design for the Sarnia plant and is negotiating with equipment vendors to procure long-lead time equipment |
| The Company has partnered with Brenntag, the worlds largest distributor of chemicals, for distribution of its bio-succinic acid and bio-based 1,4-butanediol in the Americas |
| IMCD Group, Europes 4th largest distributor of chemicals and a market leader in resins and coatings, is distributing the Companys bio-succinic acid in Europe |
| The Company has added nine new customers since the beginning of the year, with succinic acid sales developing in polyurethane, polyester, food and flavor, personal care and coatings markets |
| The Company has exercised its option to extend its access to the large-scale demonstration facility in Pomacle, France through the middle of 2014, during which time it is only guaranteed 60% of the capacity of this facility |
Financial Highlights
Cash
The Company had cash and cash equivalents on hand of $103.0 million as of June 30, 2013, including proceeds from the initial public offering and a loan from Hercules Technology Growth Capital.
On May 9, 2013, the Company completed an IPO of 8,000,000 units, each unit consisting of one share of common stock and one warrant to purchase half of one share of common stock at a price of $10.00 per unit. Each warrant is exercisable during the period commencing on August 8, 2013 and ending on May 9, 2017 at an exercise price of $11.00 per whole share of common stock. The Company received approximately $71.7 million in net proceeds from the IPO after estimated payment of fees, expenses and underwriting discounts of approximately $8.3 million.
On June 27, 2013, the Company entered into a three year $25 million term Loan and Security Agreement with Hercules Technology Growth Capital.
Revenue
Revenue increased to $1.0 million in the three months ended June 30, 2013 from $606,000 for the same period in 2012. The increase in revenue resulted from an increase in volume of bio-succinic acid sold.
Gross Profit
Gross profit decreased to a loss of $383,000 in the three months ended June 30, 2013 from a gain of $868,000 in the same period in 2012. The difference was due in part to a $744,000 inventory reversal recorded in 2012 that increased the gross profit from $124,000 to $868,000. The difference was also due to lower average prices in 2013 than in 2012 as a result of the Companys decision to sell larger volumes at lower prices as part of its market penetration strategy.
Operating Expenses
Research and development expense decreased to $4.2 million in the three months ended June 30, 2013 from $5.2 million for the same period in 2012 primarily due to the completion of certain projects and a reduction in outsourced research. The decrease was partially offset by a $418,000 increase in yeast development and scale-up expenses.
Selling and marketing expense increased to $1.7 million in the three months ended June 30, 2013 from $1.1 million for the same period in 2012, primarily due to increased salaries and benefits resulting from increased market research, headcount and related stock option expense.
General and administrative expense decreased to $2.3 million in the three months ended June 30, 2013 from $2.6 million for the same period in 2012, primarily due to lower headcount.
Other Financial Items
The Company recorded a net loss of $6.1 million, or $0.39 per share for the three months ended June 30, 2013, compared to $8.4 million, or $0.81 per share, for the three months ended June 30, 2012.
Due to the advances in the performance of the Companys yeast technology compared to its E. coli technology, and to the successful scale-up of the yeast in the large-scale demonstration facility in France, BioAmber decided to solely use the yeast technology in its planned facility in Sarnia, Ontario. As a result, the Company reported a non-cash charge of $8.6 million for asset impairments to its E. coli technology, of which $7.8 million was related to the E. coli in process research and development that is no longer applicable to the Sarnia plant, and $834,000 was related to Sarnia construction in progress concerning E. coli technology that will no longer be used.
In addition, during the three months ended June 30, 2013, the Company incurred a $724,000 non-cash charge for the accelerated vesting of certain employee stock options resulting from the IPO, as well as an $11.7 million non-cash gain related to changes in the fair market value of the warrants issued in the IPO. These warrants will be revalued in each reporting period resulting in a non-cash amount being recorded in the statement of operations while the warrants remain outstanding.
The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the three months ended June 30, 2013 was $8.6 million, or $0.57 per share, compared to a Net Loss Attributable to BioAmber Inc. Shareholders of $8.4 million, or $0.81 per share, for the three months ended June 30, 2012. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes the impact of the change in fair value of the warrants issued in connection with the Companys initial public offering, certain stock option expenses and a charge related to the impairment of in-process research and development. Please refer to Annex A: Non-GAAP Financial InformationAdjusted Net Loss Attributable to BioAmber Inc. Shareholders for more information regarding this non-GAAP financial metric.
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. EDT (1:30 p.m. PDT) on August 12, 2013. To access the webcast of the conference call, go to the companys website, www.bio-amber.com. Audio of the teleconference is also available by dialing:
North American callers: (888) 680-0865
International callers: +1 (617) 213-4853
Participant Passcode: 81960815
A replay of the webcast will be available approximately two hours after the conclusion of the live webcast, and will remain available on BioAmbers website for 30 days.
About BioAmber
BioAmber (NYSE and EURONEXT Paris: BIOA) is a sustainable chemicals company. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into chemicals for use in a wide variety of everyday products including plastics, resins, 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 timing of the completion of our initial facility, the use of yeast technology at our initial facility and the use of IPO and loan proceeds. 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 BioAmbers control. BioAmbers actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in BioAmbers most recent registration statement on Form S-1 filed with the Securities and Exchange Commission, as well as other documents that may be filed by the company from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the Companys limited operating history, the inability of the Company to execute on its manufacturing expansion strategy, including the construction of our planned facility in Sarnia, Ontario, the inability of the Company to comply with milestone covenants contained in certain of its agreements, the Companys limited sales of bio-succinic acid to date, the Companys inability to obtain additional financing, the Companys inability to leverage its bio-succinic acid technology to develop and commercialize derivatives of bio-succinic acid and other bio-based building block chemicals, and a decrease in demand for bio-succinic acid, bio-based 1,4 BDO and other bio-succinic acid derivatives. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we 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 we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
BioAmber Investor Contact
Chad Rubin
The Trout Group, LLC
740 Broadway, 9th Floor
New York, NY 10003
Tel: + 1 (646) 378-2947
crubin@troutgroup.com
BioAmber Inc.
Consolidated Statements of Operations
(unaudited, in thousands of USD)
Three Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Product revenues |
1,028 | 606 | ||||||
Cost of goods sold |
1,411 | (262 | ) | |||||
|
|
|
|
|||||
Gross profit /(loss) |
(383 | ) | 868 | |||||
Operating expenses |
||||||||
Research and development |
4,221 | 5,196 | ||||||
Sales and marketing |
1,652 | 1,064 | ||||||
General and administrative |
2,292 | 2,559 | ||||||
Depreciation and amortization |
539 | 535 | ||||||
Impairment loss |
8,619 | |||||||
Foreign exchange gain |
(28 | ) | (183 | ) | ||||
|
|
|
|
|||||
Operating expenses |
17,295 | 9,171 | ||||||
|
|
|
|
|||||
Operating loss |
(17,678 | ) | (8,303 | ) | ||||
Amortization of deferred financing costs |
117 | |||||||
Financial charges (income) |
(11,748 | ) | 10 | |||||
Income taxes |
46 | |||||||
Losses from equity method investment |
0 | 96 | ||||||
|
|
|
|
|||||
Net loss |
(6,093 | ) | (8,409 | ) | ||||
|
|
|
|
|||||
Net loss attributable to: |
||||||||
BioAmber Inc. shareholders |
(5,925 | ) | (8,386 | ) | ||||
Non-controlling interest |
(168 | ) | (23 | ) | ||||
|
|
|
|
|||||
(6,093 | ) | (8,409 | ) | |||||
|
|
|
|
|||||
Net loss per share attributable to BioAmber Inc. common shareholder basic and diluted |
(0.39 | ) | (0.81 | ) | ||||
Weighted average common shares outstanding- basic |
15,035.0 | 10,332.3 |
BioAmber Inc.
Non-GAAP Financial Information
(unaudited, in thousands)
Three Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Net Loss attributable to BioAmber Inc. common shareholder |
(5,925 | ) | (8,386 | ) | ||||
Deduct: |
||||||||
Intangible impairment |
7,785 | | ||||||
Long lived impairment |
584 | | ||||||
Accelerated Vested options from IPO |
724 | | ||||||
Warrant Revaluation |
(11,748 | ) | | |||||
|
|
|
|
|||||
Adjusted net loss attributable to BioAmber Inc. shareholders |
(8,580 | ) | (8,386 | ) | ||||
Adjusted net loss per share attributable to BioAmber Inc. common shareholder basic and diluted |
(0.57 | ) | (0.81 | ) | ||||
Weighted average common shares outstanding- basic |
15,035.0 | 10,332.3 |
BioAmber Inc.
Consolidated Balance Sheet Information
(unaudited, in thousands)
As of June 30, 2013 |
As of Dec 31, 2012 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
102,981 | 25,072 | ||||||
Accounts receivable |
627 | 596 | ||||||
Inventories |
2,312 | 1,894 | ||||||
Prepaid expenses and other current assets |
8,556 | 4,352 | ||||||
|
|
|
|
|||||
Total current assets |
114,476 | 31,914 | ||||||
Property and equipment |
4,147 | 3,651 | ||||||
Investment in equity method investment |
710 | 725 | ||||||
Intangible assets including goodwill |
4,813 | 13,713 | ||||||
|
|
|
|
|||||
Total assets |
124,146 | 50,003 | ||||||
|
|
|
|
|||||
Liabilities |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
5,820 | 4,875 | ||||||
Income taxes payable |
1,019 | 983 | ||||||
deferred grants |
3,511 | 3,711 | ||||||
short-term portion of long term debt |
183 | |||||||
|
|
|
|
|||||
Total current liabilities |
10,350 | 9,752 | ||||||
Long-term debt |
27,946 | 2,417 | ||||||
Warrants financial liability |
4,400 | |||||||
Other long term liabilities |
60 | 37 | ||||||
|
|
|
|
|||||
Total liabilities |
42,756 | 12,206 | ||||||
|
|
|
|
|||||
Shareholders equity |
81,390 | 37,797 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
124,146 | 50,003 | ||||||
|
|
|
|
BioAmber Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Operating Activities |
||||||||
Net loss |
(6,093 | ) | (8,409 | ) | ||||
Adjustments to reconcile net loss to cash: |
||||||||
Stock based compensation |
2,059 | 1,935 | ||||||
Depreciation and amortization |
539 | 535 | ||||||
Impairment loss and write-off of property and equipment |
8,619 | |||||||
Warrant revaluation |
(11,748 | ) | 10 | |||||
Change in working capital |
4,329 | 1,220 | ||||||
Other |
126 | 96 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(2,169 | ) | (4,613 | ) | ||||
Investing Activities |
||||||||
Acquisition of property and equipment |
(2,074 | ) | (2,878 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activity |
(2,074 | ) | (2,878 | ) | ||||
Financing Activities |
||||||||
Issuance of long-term debt |
24,962 | |||||||
Net proceeds from IPO |
71,733 | |||||||
Deferred financing costs |
(625 | ) | (648 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
96,070 | (648 | ) | |||||
|
|
|
|
|||||
Foreign exchange impact on cash |
(377 | ) | (50 | ) | ||||
Increase/(decrease) in cash |
91,450 | (8,189 | ) | |||||
Cash, beginning of period |
11,531 | 43,811 | ||||||
|
|
|
|
|||||
Cash, end of period |
102,981 | 35,622 |
ANNEX A: Non-GAAP Financial Information
Adjusted Net Loss Attributable to BioAmber Inc. Shareholders
Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP measure that represents net loss attributable to BioAmber Inc. shareholders adjusted to exclude the following items: (i) costs associated with BioAmbers transition from an E. coli organism as its core technology to a Cargill yeast for the construction of its initial planned manufacturing facility in Sarnia, Ontario, including impairment of in-process research and development and impairment of a long-lived asset (ii) the accelerated vesting of certain employee stock options upon the IPO and (iii) non-operational income derived from the change in the fair value of the warrants issued in connection with BioAmbers initial public offering. BioAmber presents Adjusted Net Loss Attributable to BioAmber Inc. Shareholders as a supplemental measure of BioAmbers performance. The above items are excluded from BioAmbers 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 core 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 BioAmbers future ongoing performance as this measure allows for a more meaningful comparison of BioAmbers 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 BioAmbers business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of BioAmbers 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 BioAmbers 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. BioAmbers presentation of Adjusted Net Loss Attributable to BioAmber Inc. Shareholders should not be construed as an inference that BioAmbers future results will be unaffected by unusual or non-recurring items. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is not a measurement of BioAmbers 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.
The following is a reconciliation of Adjusted Net Loss Attributable to BioAmber Inc. Shareholders to GAAP Net Loss Attributable to BioAmber Inc. Shareholders (amounts in thousands):
Three months | Three months | |||||||
ended June 30, 2013 |
ended June 30, 2012 |
|||||||
Net loss attributable to BioAmber Inc. shareholders (GAAP) |
(5,926 | ) | (8,386 | ) | ||||
Deduct: |
||||||||
Intangible impairment |
7,785 | | ||||||
Long lived impairment |
584 | | ||||||
Accelerated vested options from IPO |
724 | | ||||||
Warrant revaluation |
(11,748 | ) | | |||||
|
|
|
|
|||||
Adjusted net loss attributable to BioAmber Inc. shareholders (non-GAAP) |
(8,581 | ) | (8,386 | ) | ||||
Weighted average common shares outstanding- basic |
15,035.0 | 10,332.3 | ||||||
Adjusted net loss attributable to BioAmber Inc. shareholders (non-GAAP) per share basic and diluted |
(0.57 | ) | (0.81 | ) |
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