CALGARY, Alberta, Nov. 28, 2012 (GLOBE NEWSWIRE) -- Algae Biosciences Corporation (TSX-V:ABV) ("AlgaeBio" or the "Company") is pleased to provide the following corporate update to its shareholders and interested parties. Due to the regulatory constraints on market communications during the recent Short Form Prospectus ("SFP") offering, this update will address events and progress during the past several months. It is the intent of the Company to provide corporate updates on a timely basis moving forward.
As per our previous updates, the 1,500 bioreactors used to facilitate the commercial-scale growth of micro-algae and subsequent extraction of omega-3-related algae have been received and installed in the plant in Holbrook, Arizona. Of these, more than 600 have been connected to the inoculant system and are being used to produce various test sample runs that are then being toll-refined into whole algae powder, from which omega-3 oil is extracted, for customer testing purposes. We are pleased to report that the bioreactor systems are performing to specification with no scale-up issues.
Current Private Placement
Despite the positive metrics and accomplishments of the Company, general market conditions prevented our sponsors from completing the minimum subscription amount stipulated in the SFP offering. This protracted financing effort has required that the Company absorb a number of financing-related costs and to experience delays in a number of corporate development initiatives partially dependent on, and scheduled to coincide with, the successful completion of the offering. During the extended time frame of the SFP financing program, the Company prudently delayed certain capital expenditures and minimized working capital expenditures.
The recently announced Private Placement for up to $1M Cdn will be utilized for both working capital and capital expenditures.
It is anticipated that with the successful completion of the Private Placement, the Company will be in Phase 1 production involving the production and inventorying of commercially saleable whole algae powder, in paste form. Phase 2 production, which will follow, will incorporate the drying and extraction modules for commercial sale of omega-3 oils.
Longer Term Financing
To facilitate the completion of full Phase 2 plant production and additional production capacity, the Company is in active negotiation with potential funders. These discussions have been accelerated following the termination of the SFP.
Algae Biosciences has made significant strides in becoming a key supplier of omega-3 oils in a fast growing and supply-constrained sector. Having initially negotiated a standing purchase order from Global Health Trax, a nutraceutical company located in California, Algae Biosciences has successfully constructed and populated its Holbrook, Arizona production facility with equipment in preparation for commercial production. Applying its proprietary science to the production of high-value, DHA/EPA-rich algae (as confirmed through sample production) and utilizing its patent protected access to the Coconino Aquifer, the scale and robust margins of the pending commercial operations remain intact.
Algae Biosciences continues to receive new queries from major industry players on a regular basis, given its potential supply capabilities and low-cost and high-value product. Chairman Robert Thompson commented, "While we are disappointed the SFP did not come to fruition, our proximity to near-term Phase 1 production and subsequent corporate development opportunities has kept us firmly focused on our main objective — creating positive shareholder returns in both the near term and long term."
ABOUT ALGAE BIOSCIENCES CORPORATION: AlgaeBio is a Canadian biotechnology company that researches, develops, and manufactures products from micro and macro algae such as nutraceuticals, food additives, and pharmaceuticals. AlgaeBio owns and operates production facilities near Holbrook, Ariz., and is listed on the TSX Venture Exchange (TSX-V:ABV).
This news release contains "forward-looking statements" within the meaning of applicable securities laws. Although the Corporation believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based on factors and assumptions concerning future events that may prove to be inaccurate. These factors and assumptions are based upon currently available information to the Corporation. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation or its financial or operating results or (as applicable), their securities.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the content of this release.
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CONTACT: For more information: Robert J. Thompson Chairman of the Board Algae Biosciences Corporation Phone: 602.909.9728 E-mail: email@example.com Gordon Aldcorn Investor Relations Algae Biosciences Corporation Phone: 403.618.6507 E-mail: firstname.lastname@example.orgSource:Algae Biosciences Corporation