EDMONTON, Alberta, November 27, 2015 – BioNeutra Global Corporation (CSE: BGA) (“BioNeutra” or the “Company“) is pleased to announce today its interim financial results for the three-month period ended March 31, 2015 (the “First Quarter”). BioNeutra is a functional and health food ingredient manufacturer that uses its patented process to produce isomalto-oligosaccharide (“IMO”) which it sells under its trademark VitaFiber™.
First Quarter Highlights
• Sales for the First Quarter were $5,345,149 with gross margins of 57%. This represents an increase over sales and gross margins of $1,156,839 and 50% for the one-month period ended March 31, 2014 and $4,031,678 and 36% for the three-month period ended December 31, 2014. The increase in the Company’s revenues during the First Quarter was driven by increased sales of VitaFiber™ to food and beverage manufacturers targeting functional and health food and beverage markets.
• Strong VitaFiber™ sales in the First Quarter pushed the Company’s Adjusted EBITDA to $1,482,295, an increase from $334,557 for the one-month period ended March 31, 2014 and $409,327 for the three-month period ended December 31, 2014.
• The First Quarter’s strong VitaFiber™ sales also boosted the Company’s cash balance to $5,228,933 and its working capital to $6,418,644 as at March 31, 2015, representing significant increases over the cash balance of $2,084,687 and working capital of $3,976,934 as at December 31, 2014.
• On January 5, 2015, BioNeutra North America Inc. was listed on the Alberta Venture Fast 50, a program that recognizes Alberta businesses with significant growth in revenue, assets, capital expenditures and employees over a three-year period.
• On February 12, 2015, the Company announced that the board of directors approved a grant of stock options to directors, officers, employees and consultants of the Company, exercisable to purchase an aggregate of 3,000,000 common shares of the Company at a price of $0.40 per common share for a three-year term.
• In March 2015, BioNeutra North America Inc. reached an agreement with prominent global online retailer Amazon.com to sell VitaFiber™ through its online store.
• On March 27, 2015, the Company closed a private placement of 3,300,000 units at a price of $0.30 per Unit for gross proceeds of $990,000, with each unit comprised of one common share and one common share purchase warrant entitling the holder to purchase one additional common share at a price of $0.50 on certain terms and conditions.
• On April 23, 2015, the Company, through its wholly-owned subsidiary, entered into an agreement to purchase a mixed-use manufacturing and office building of approximately 47,000 square feet situated on 2.65 acres of land in a light industrial area of Edmonton, Alberta. The Company intends to use this property for its head office, to establish Canadian manufacturing capacity, and to expand its research and development capabilities. The Company expects to complete the purchase of this property in the third quarter of 2015 and begin renovations shortly thereafter.
• On May 28, 2015, the Company entered into a private placement of 2,500,000 common shares at a price of $0.40 per common share for gross proceeds of $1,000,000. The Company intends to use the proceeds from this private placement for general working capital.
First Quarter Financial Results
Three Months Ended March 31, 2015
Sales Revenue: $5,345,149
One Month Ended March 31, 2014
Sales Revenue: $1,156,839
Three Months Ended December 31, 2014
Sales Revenue: $4,031,678
Total sales for the First Quarter were $5,345,149, as compared with $1,156,839 for the one-month period ended March 31, 2014 and $4,031,678 for the three-month period ended December 31, 2014. This increase in overall sales was a result of increased sales to major functional food and beverage manufacturers who in turn continued to experience significant growth in their own sales. In addition, the Company’s customer base continued to grow as mainstream, functional and health food and beverage manufacturers and pharmaceutical companies continued to create products incorporating VitaFiber™.
The Company’s gross profit for the First Quarter was $3,036,483 on gross margins of 57%. This represents an increase from gross profit and gross margins of $578,335 and 50% for the one-month period ended March 31, 2014 and $1,441,621 and 36% for the three-month period ended December 31, 2014.
Three Months Ended March 31, 2015
Net Income: $202,181
Adjusted EBITDA: 1,482,295
One Month Ended March 31, 2014
Net Income: $444,301
Adjusted EBITDA: 334,557
Three Months Ended December 31, 2014
Net Income: $309,916
Adjusted EBITDA: 409,327
The Company recorded a net income of $202,181 in the First Quarter as compared with a net income of $444,301 for the one-month period ended March 31, 2014 and $309,916 for the three-month period ended December 31, 2014. During the First Quarter, the Company incurred significant non-cash expenses, including a $744,896 non-cash share-based compensation expense and a $683,834 deferred income tax expense, which had the effect of reducing the Company’s net income.
The effect of these non-cash expenses is reflected in the Company’s Adjusted EBITDA, which for the First Quarter was $1,482,295, an increase from $334,557 for the one-month period ended March 31, 2014 and $409,327 for the three-month period ended December 31, 2014.
Financial Condition & Liquidity
As further evidence of its continued operational strength, the Company increased its cash balance to $5,228,933 and its working capital to $6,418,643 during the First Quarter, representing significant increases over the cash balance of $2,084,687 and working capital of $3,976,934 at December 31, 2014.
Cash provided by operating activities during the First Quarter was $2,548,794, an increase from $758,946 for the one-month period ended March 31, 2014 and $7,861 for the three-month period ended December 31, 2014.
The Company also has access to a $500,000 credit facility to assist with working capital needs, but this credit facility has not been drawn on as of the date of this press release.
Income Tax Recovery
Deferred income tax assets were recognized from the amalgamation of the Company’s subsidiaries which provided loss carryforwards that the Company may use to offset taxable income in the future. During the First Quarter, taxable income generated through operations utilized a portion of the Canadian tax losses carried forward, which resulted in a deferred Canadian income tax expense of $683,834. As at March 31, 2015, the Company had deferred Canadian tax losses with a tax benefit of $828,808.
Change in Year End and Comparison Period
Effective October 29, 2014, the Company completed an acquisition of BioNeutra North America Inc. and BioNeutra International Limited. The acquisition of BioNeutra North America Inc. was considered a reverse acquisition for accounting purposes, with BioNeutra North America Inc. identified as the acquirer. BioNeutra North America Inc.’s year-end was February 28, and as such, the required comparison period for the purpose of the First Quarter’s interim condensed consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) is the one-month period ended March 31, 2014. Accordingly, in order to provide better insight regarding the Company’s financial results in the First Quarter, Management included in the MD&A and this press release a comparison to the three-month period ended December 31, 2014.
About BioNeutra Global Corporation
BioNeutra is in the business of research and development, production and commercialization of ingredients for nutraceutical, functional and mainstream foods and beverages, with a focus on oligosaccharides.
The Company’s lead product, VitaFiber™, is an advanced functional and health food ingredient scientifically made from natural agricultural products, is generally regarded as safe (GRAS) by the U.S. Food & Drug Administration, and is European Food Safety Authority and Health Canada approved. VitaFiber™ is naturally sweet and lower in calories than regular sugar and is a natural source of dietary fiber as it provides low calorie soluble prebiotic fiber for human digestive health.
The Company produces VitaFiber™ using its patented processes that naturally transforms starch molecules from agriculture cereal crops including corn, wheat, barley, potato, or tapioca into the functional health molecules of isomalto-oligosaccharide (IMO). The VitaFiber™ manufacturing process is based upon a natural enzymatic conversion of starch molecules without any chemical modification involved, making VitaFiber™ a natural food ingredient. VitaFiber™ is also non-GMO, vegan-friendly, gluten-free, Kosher and Halal certified and available as certified organic.
The Company’s customers include a mix of small and medium enterprises and a number of high-profile food manufacturers in Canada, the U.S., Europe, the United Kingdom, and Mexico. VitaFiber™ is also available for retail purchase across the globe through Amazon.com and other direct-to-consumer retailers.
For further information contact:
BioNeutra Global Corporation
Bill Smith, Chairman & Senior Vice President
T: (780) 466-1481 x 117
This press release may include forward-looking information within the meaning of Canadian securities legislation concerning the business of BioNeutra. Forward-looking information is based on certain key expectations and assumptions made by the management of BioNeutra. Although BioNeutra believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because BioNeutra can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. BioNeutra disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any applicable securities laws or any state of the United States and may not be offered or sold in the United States or to the account or benefit of a person in the United States absent an exemption from the registration requirements.