Full Press Release Details
Condensed Interim Consolidated Financial
For the Nine Months Ended May 31, 2014
(Unaudited - Prepared by Management)
NOTICE OF NO AUDITOR REVIEW OF
CONDENSED INTERIM CONSOLIDATED FINANCIAL
Under National Instrument 51-102, Part
4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied
by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim
consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor
has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of
Chartered Accountants for a review of interim financial statements by an entity's auditor.
Stellar Biotechnologies, Inc.
Condensed Interim Consolidated Statements
of Financial Position
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
| May 31, | August 31, | |||||||
| 2014 | 2013 | |||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,785,468 | $ | 7,859,889 | ||||
| Amounts receivable (Note 4) | 42,323 | 177,720 | ||||||
| Deferred financing costs | - | 62,027 | ||||||
| Prepaid expenses | 139,716 | 34,886 | ||||||
| Total current assets | 14,967,507 | 8,134,522 | ||||||
| Noncurrent assets: | ||||||||
| Property, plant and equipment (Note 5) | 427,120 | 246,269 | ||||||
| Licensing rights (Note 6) | 95,238 | 116,667 | ||||||
| Deposits | 15,900 | 15,900 | ||||||
| Total noncurrent assets | 538,258 | 378,836 | ||||||
| Total Assets | $ | 15,505,765 | $ | 8,513,358 | ||||
| Liabilities and Shareholders' Equity (Deficiency): | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 492,970 | $ | 454,063 | ||||
| Warrant liability, current portion (Note 8) | 528,526 | 3,454,745 | ||||||
| Total current liabilities | 1,021,496 | 3,908,808 | ||||||
| Long-term liabilities: | ||||||||
| Warrant liability, less current portion (Note 8) | 3,330,886 | 7,746,062 | ||||||
| Total Liabilities | 4,352,382 | 11,654,870 | ||||||
| Shareholders' equity (deficiency): | ||||||||
| Share capital (Note 8) | 36,049,154 | 13,180,677 | ||||||
| Shares subscribed (Note 8) | - | 5,155,674 | ||||||
| Shares to be issued (Note 8) | 1,070,909 | 1,493,637 | ||||||
| Share-based payment reserve (Note 8) | 3,041,895 | 2,232,526 | ||||||
| Deficit | (29,008,575 | ) | (25,204,026 | ) | ||||
| Total shareholders' equity (deficiency) | 11,153,383 | (3,141,512 | ) | |||||
| Total Liabilities and Shareholders' Equity (Deficiency) | $ | 15,505,765 | $ | 8,513,358 |
Nature of Operations and Going Concern (Note 1)
Commitments (Note 7)
Events After the Reporting Period (Note 14)
These condensed interim consolidated financial statements
were approved for issuance by the Board of Directors on July 9, 2014 and are signed on its behalf by:
| Director | Signed: "Frank Oakes" | ||
| Director | Signed: "Mayank Sampat " |
notes are an integral part of these condensed interim consolidated financial statements
Stellar Biotechnologies, Inc.
Condensed Interim Consolidated Statements
of Loss and Comprehensive Loss
(Unaudited - Prepared by Management)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| May 31, | May 31, | May 31, | May 31, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues: | ||||||||||||||||
| Contract income | $ | 60,000 | $ | 15,000 | $ | 147,000 | $ | 45,000 | ||||||||
| Commercial sales | 42,581 | 12,050 | 69,269 | 51,275 | ||||||||||||
| Grant revenue | - | 46,164 | 36,579 | 154,147 | ||||||||||||
| 102,581 | 73,214 | 252,848 | 250,422 | |||||||||||||
| Costs of Production, Aquaculture and Grants: | ||||||||||||||||
| Costs of production and aquaculture | 135,351 | 55,800 | 318,071 | 212,240 | ||||||||||||
| Grant costs | - | 46,164 | 35,848 | 154,147 | ||||||||||||
| 135,351 | 101,964 | 353,919 | 366,387 | |||||||||||||
| Gross Margin (Loss) | (32,770 | ) | (28,750 | ) | (101,071 | ) | (115,965 | ) | ||||||||
| Expenses: | ||||||||||||||||
| Salaries, wages and benefits | 324,341 | 198,720 | 1,066,785 | 554,882 | ||||||||||||
| Research and development | 462,129 | 178,202 | 1,370,581 | 684,662 | ||||||||||||
| Legal, consulting and professional services | 109,434 | 43,297 | 290,186 | 218,560 | ||||||||||||
| Share-based payments (Note 8) | 193,038 | 201,298 | 899,461 | 521,987 | ||||||||||||
| General and administration | 197,096 | 127,702 | 620,981 | 416,702 | ||||||||||||
| Amortization and depreciation | 40,576 | 30,951 | 119,633 | 92,853 | ||||||||||||
| Allocation of expenses to grant costs | - | (19,816 | ) | (14,517 | ) | (63,467 | ) | |||||||||
| 1,326,614 | 760,354 | 4,353,110 | 2,426,179 | |||||||||||||
| Other Income: | ||||||||||||||||
| Foreign exchange gain (loss) | 141,700 | (30,389 | ) | (195,310 | ) | (60,343 | ) | |||||||||
| Change in fair value of warrant liability (Note 8) | 3,023,391 | (353,119 | ) | 822,919 | (2,981,740 | ) | ||||||||||
| Interest income | 16,583 | 1,075 | 43,223 | 3,708 | ||||||||||||
| 3,181,674 | (382,433 | ) | 670,832 | (3,038,375 | ) | |||||||||||
| Net Income (Loss) Before Income Tax | 1,822,290 | (1,171,537 | ) | (3,783,349 | ) | (5,580,519 | ) | |||||||||
| Income tax expense | 9,000 | - | 21,200 | 800 | ||||||||||||
| Net Income (Loss) and Comprehensive Income (Loss) for the Period | $ | 1,813,290 | $ | (1,171,537 | ) | $ | (3,804,549 | ) | $ | (5,581,319 | ) | |||||
| Income (Loss) per common share - basic and diluted | $ | 0.02 | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.11 | ) | |||||
| Weighted average number of common shares outstanding | 78,115,549 | 53,489,763 | 75,049,659 | 50,409,302 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Stellar Biotechnologies, Inc.
Condensed Interim Consolidated Statements
(Unaudited - Prepared by Management)
| Nine Months Ended | ||||||||
| May 31, | May 31, | |||||||
| 2014 | 2013 | |||||||
| Cash Flows Used In Operating Activities: | ||||||||
| Loss for the period | $ | (3,804,549 | ) | $ | (5,581,319 | ) | ||
| Items not affecting cash: | ||||||||
| Amortization and depreciation | 119,633 | 92,853 | ||||||
| Share-based payments | 899,461 | 521,987 | ||||||
| Foreign exchange (gain) loss | 26,778 | 23,597 | ||||||
| Change in fair value of warrant liability | (822,919 | ) | 2,981,740 | |||||
| Changes in non-cash working capital items: | ||||||||
| Amounts receivable | 135,397 | (52,520 | ) | |||||
| Deferred financing costs | 62,027 | - | ||||||
| Prepaid expenses | (104,830 | ) | (536 | ) | ||||
| Accounts payable and accrued liabilities | 38,907 | (193,357 | ) | |||||
| Deferred revenue | - | (29,507 | ) | |||||
| Net cash used in operating activities | (3,450,095 | ) | (2,237,062 | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from exercise of warrants and options | 4,202,410 | - | ||||||
| Share subscription proceeds | 7,000,000 | 3,115,875 | ||||||
| Share issuance costs | (520,903 | ) | (125,062 | ) | ||||
| Refund of deposits | - | 1,600 | ||||||
| Net cash provided by financing activities | 10,681,507 | 2,992,413 | ||||||
| Cash Flows Used In Investing Activities: | ||||||||
| Acquisition of property, plant and equipment | (279,055 | ) | (2,411 | ) | ||||
| Net cash used in investing activities | (279,055 | ) | (2,411 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (26,778 | ) | 36,746 | |||||
| Net change in cash and cash equivalents | 6,925,579 | 789,686 | ||||||
| Cash and cash equivalents - beginning of period | 7,859,889 | 998,998 | ||||||
| Cash and cash equivalents - end of period | $ | 14,785,468 | $ | 1,788,684 | ||||
| Cash (demand deposits) | $ | 9,427,007 | $ | 1,498,325 | ||||
| Cash equivalents | 5,358,461 | 290,359 | ||||||
| Cash and cash equivalents | $ | 14,785,468 | $ | 1,788,684 |
Supplemental disclosure
of non-cash transactions (Note 11)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Stellar Biotechnologies, Inc.
Condensed Interim Consolidated Statements
of Changes in Equity
(Unaudited - Prepared by Management)
| Share-based | ||||||||||||||||||||||||||||
| Number of | Share | Shares | Shares to | Payment | ||||||||||||||||||||||||
| Shares | Capital | Subscribed | be Issued | Reserve | Deficit | Total | ||||||||||||||||||||||
| Balance - August 31, 2012 | 45,413,561 | $ | 8,016,895 | $ | - | $ | 1,493,637 | $ | 1,658,591 | $ | (10,317,513 | ) | $ | 851,610 | ||||||||||||||
| Proceeds of private placements | 9,258,400 | 3,115,875 | - | - | - | - | 3,115,875 | |||||||||||||||||||||
| Issuance costs of private placements | - | (275,956 | ) | - | - | - | - | (275,956 | ) | |||||||||||||||||||
| Fair value of warrants issued in private placements | - | (1,749,004 | ) | - | - | - | - | (1,749,004 | ) | |||||||||||||||||||
| Share-based payments | - | - | - | - | 521,987 | - | 521,987 | |||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (5,581,319 | ) | (5,581,319 | ) | |||||||||||||||||||
| Balance - May 31, 2013 | 54,671,961 | $ | 9,107,810 | $ | - | $ | 1,493,637 | $ | 2,180,578 | $ | (15,898,832 | ) | $ | (3,116,807 | ) | |||||||||||||
| Balance - August 31, 2013 | 57,946,160 | $ | 13,180,677 | $ | 5,155,674 | $ | 1,493,637 | $ | 2,232,526 | $ | (25,204,026 | ) | $ | (3,141,512 | ) | |||||||||||||
| Proceeds of private placements | 11,428,570 | 12,000,000 | (5,000,000 | ) | - | - | - | 7,000,000 | ||||||||||||||||||||
| Issuance costs of private placements | - | (907,801 | ) | - | - | 386,898 | - | (520,903 | ) | |||||||||||||||||||
| Issuance of performance shares | 1,515,152 | 422,728 | - | (422,728 | ) | - | - | - | ||||||||||||||||||||
| Proceeds from exercise of warran | 5,792,200 | 3,813,666 | (155,674 | ) | - | - | - | 3,657,992 | ||||||||||||||||||||
| Transfer to share capital on exercise of warrants | - | 6,518,476 | - | - | - | - | 6,518,476 | |||||||||||||||||||||
| Proceeds from exercise of options | 1,441,668 | 544,418 | - | - | - | - | 544,418 | |||||||||||||||||||||
| Transfer to share capital on exercise of options | - | 476,990 | - | - | (476,990 | ) | - | - | ||||||||||||||||||||
| Share-based payments | - | - | - | - | 899,461 | - | 899,461 | |||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (3,804,549 | ) | (3,804,549 | ) | |||||||||||||||||||
| Balance - May 31, 2014 | 78,123,750 | $ | 36,049,154 | $ | - | $ | 1,070,909 | $ | 3,041,895 | $ | (29,008,575 | ) | $ | 11,153,383 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Stellar Biotechnologies, Inc.
Notes to Condensed Interim Consolidated
Financial Statements
For the Nine Months Ended May 31, 2014
Stellar Biotechnologies, Inc.
("the Company", formerly CAG Capital Inc.) is listed on the TSX Venture Exchange ( the Exchange") as a
Tier 2 issuer under the trading symbol KLH since April 19, 2010 (formerly under CAG.P) and in the U.S. under the trading symbol
SBOTF as of April 4, 2012, and uplisted to OTCQB effective January 14, 2013.
On April 7, 2010, the Company
changed its name to Stellar Biotechnologies, Inc. On April 12, 2010, the Company completed a reverse merger transaction with Stellar
Biotechnologies, Inc. ("Stellar CA") which is incorporated under the laws of the State of California, USA. The Company's
head office is 332 E. Scott Street, Port Hueneme, California, 93041, USA, and the registered and records office is 1500 Royal Centre,
1055 West Georgia Street, P.O. Box 11117, Vancouver, BC, V6E 4N7, Canada.
The Company's business
is to commercially produce and market Keyhole Limpet Hemocyanin ("KLH") as well as to develop new technology related
to culture and production of KLH and subunit KLH ("suKLH") formulations. The Company markets KLH and suKLH formulations
to customers in the United States and Europe.
The Company has received grants
for the development of new technology from the National Institutes of Health, National Cancer Institute ("NIH"), the
National Science Foundation ("NSF") including grants under its Technology Enhancement for Commercial Partnerships ("TECP")
program, and Internal Revenue Service ("IRS") qualifying therapeutic discovery project grants.
For the nine months ended May
31, 2014, the Company reported a loss of $3,804,549 (2013 - $5,581,319), an accumulated deficit of $29,008,575 (August 31, 2013
- $25,204,026) and working capital of $13,946,011 (August 31, 2013 - $4,225,714).
In the past, operations of the
Company have primarily been funded by the issuance of common shares, exercise of warrants, grant revenues, contract income, and
commercial sales. Management believes these financial resources are adequate to support the Company's initiatives at the
current level for the foreseeable future. Management is also continuing the ongoing effort toward expanding the customer base for
existing marketed products, and the Company may seek additional financing alternatives, including nondilutive financing through
grants, collaboration and licensing arrangements, and additional equity financing.
The accompanying financial statements
have been prepared on the going concern basis, which assumes that the Company will continue in operation for the foreseeable future
and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
The condensed interim consolidated
financial statements of the Company are presented in U.S. dollars, unless otherwise stated, which is the functional currency.
Financial Reporting Standards and Statement of Compliance
These condensed interim consolidated
financial statements are prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial
Reporting using International Financial Reporting Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee
("IFRIC"), applicable to the preparation of the financial statements.
Stellar Biotechnologies, Inc.
Notes to Condensed Interim Consolidated
Financial Statements
For the Nine Months Ended May 31, 2014
The condensed interim consolidated
financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments
at fair value through profit or loss, which are stated at their fair value. In addition, these financial statements have been prepared
using the accrual basis of accounting except for cash flow information.
The preparation of these condensed
interim consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect
the application of policies and reported amounts of assets and liabilities at the date of the financial statements and reported
amounts of expenses during the period. Actual results could differ from these estimates.
These condensed interim consolidated
financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout