Revenue Increases 70%, Operating Loss Narrows
and Margin Improves as Pond Technologies See Significant Validation
of Technology with Major Licensing and Supply Agreements
Executed
MARKHAM, ON, Nov. 17, 2021 /CNW/ - Pond Technologies Holdings
Inc. (the "Company" or "Pond") (TSXV: POND)
(OTCQB: PNDHF) (FSE: 4OO), an ESG company addressing global
sustainability challenges of protein shortages and climate
change, announces that the unaudited interim condensed
consolidated financial statements of the Company for the three
months ended September 30, 2021 and
the related management's discussion and analysis have been filed
and are available for review on the SEDAR website at www.sedar.com
or on the Company's website at www.pondtech.com. Q3 2021 Highlights
and a brief business update follow below:
Q3 2021 Highlights
- Commercial Validation of Pond's Carbon and Biotech Technology –
Q3 2021 was a turning point for Pond as it signed significant
licensing and supply agreements to adopt and deploy its technology.
The first was a technology access agreement signed with a North
American Fortune 500 Company to collect up to $1 million in milestone payments to grow Covid-19
antigens. The second was with UK based Livalta, an AB Agri Company,
a subsidiary of Associated British Foods, for the world's first
scalable production of algae from carbon emissions aimed to
revolutionize protein in animal feed. The supply and licensing
agreements with Livalta are valued at over $5 million.
- Q3 Revenue Increased by 70% - Group
revenue for Q3 2021 totaled $2,163,000 (Q3 2020: $1,275,000), an increase of $888,000 (70%). The increase is primarily a
result of licensing revenue recognized in the quarter. For the 9
months ended September 30, 2021,
revenue increased by 30% $4,364,000
(2020: $3,367,000). Management
anticipates as the Company progresses its commercialization
efforts, and the nature of the contracts signed, revenue in its
Carbon and Biotech divisions will
significantly vary quarter to quarter as the Company works through
its sales pipeline, and fulfills milestones related to signed
contracts.
- Improvement in Margin – Q3 2021 margin (revenue
less direct costs and expenses) was $903,000 (42%) vs. $175,000 (13%) in Q3 2020. For the nine months
ended September 30, 2021, a margin of
$1,335,000 (30%) vs. $648,000 (19%) was achieved. The improvement in
margin is primarily attributable to licensing fees recognized in
Q3.
- Quarterly Decreases in Operating Loss in 2021
– The Q3 2021 operating loss of $557,000 was lower than Q2 $733,000 and Q1 $1,003,000.
Business Update
On October 27, 2021, Pond
announced its subsidiary, Pond Naturals Inc., has been certified
GMP compliant by an independent third-party auditor, SCS Global
Services (SCS), under the HACCP-based Good Manufacturing Practices
(GMPs) Food Safety Program standard. The certification audit
included inspection of the facility and management system against
the site's Food Safety Program based on 21 CFR Part 111 (cGMPs for
Dietary Supplements).
On November 1, 2021, Pond
announced it has agreed to a non-exclusive collaboration
arrangement with project delivery firm Malone Group. A pioneering
global arrangement between Malone Group and Pond will provide Pond
the added infrastructure to support the scaling up process through
its ongoing commercialization efforts. Malone Group provides Pond
access to process and safety engineering expertise as well as a
wealth of experience in delivering projects in operational and
regulated environments.
On November 15, 2021, Pond
announced it has issued an amended and restated promissory note in
the principal amount of CAD$1,988,500
(the "Promissory Note") to Georgian Villas Inc. (the
"Lender"), an entity controlled by the Chairman of Pond, Mr.
Robert McLeese. The Promissory Note
replaces and supersedes the original promissory note in the
principal amount of CAD$2,000,000
issued by Pond to the Lender on November 15,
2019. The new Promissory Note has the following material
attributes:
- Reduction of interest rate from 12% to 9.55% per annum, payable
quarterly, with the first interest payment due on February 15, 2022;
- Promissory Note maturing on November 15,
2024;
- Is convertible by the Lender into common shares in the capital
of the Company ("Common Shares") at a conversion price equal to
greater of (i) $0.39 per Common Share
and (ii) the average closing price of a Common Share for the 30
trading days on the TSX Venture Exchange ("TSXV") immediately
preceding November 15, 2021; and
- Secured by a security interest over all present and
after-acquired undertaking, property and assets of Pond (excluding
its equity interest in its subsidiary, Paige Growth Technologies
Inc.) pursuant to an amended and restated security agreement
granted by Pond in favour of the Lender.
Management Commentary
Grant Smith, President &
CEO of Pond, said "The third quarter was the inflection point for
Pond, with record revenue growth, improving margins, and a
narrowing operating loss. We are in the early stages of proving the
strength of our model. Highlighted by the significant recent
validation of our technology by two multi-billion-dollar
international companies, we are extremely excited for what the
future holds. Moreover, the restated and amended convertible note
with Pond's Chairman is a significant step forward for our
financial flexibility, and we look forward to executing on our
growing sales pipeline."
Options Issuance
On November 15, 2021, Pond granted
an aggregate of 1,275,000, stock options ("the Options") to
eligible executives, employees and consultants under the Company's
existing stock option plan. Each option is exercisable for one
common share of the Company at an exercise price of $0.40 per share. The closing price of the common
shares of the Company on the TSX Venture Exchange on November 12, 2021, was $0.40. The Options have a term of 5 years and
vest as to one-third on the date of grant, one-third on the first
anniversary of the date of grant, and the balance on the second
anniversary of the date of grant.
About Pond Technologies Holdings Inc.:
Located in Markham, Ontario,
Pond is a technology company that provides profitable solutions to
the global health and wellness challenges of climate change and
nutrition. Pond's proprietary growth platform, including patented
advanced photonics, optimizes key growth inputs in order to provide
a controlled environment that maximizes the growth of algae and
other organisms. This enables industrial emitters to generate new
revenue streams from the transformation of underutilized CO2 to
valuable algae-based products, such as protein for animal feed and
nutraceutical products like Chlorella, Spirulina, and Astaxanthin
for human consumption. For more information visit
https://www.pondtech.com/.
Forward Looking Statements
This press release contains forward–looking statements within
the meaning of applicable securities laws, including statements
regarding anticipated growth and related revenue generation,
development of strategic business relationships, and anticipated
development and commercialization of technological advances. Such
forward–looking statements are based on certain key expectations
and assumptions made by Pond, including, among others, assumptions
regarding the anticipated benefits of its collaboration arrangement
with the Malone Group, anticipated completion of the Livalta
project and revenue generated therefrom, continued legislative
(including tax) regime in which Pond operates, the successful
negotiation of binding agreements to give effect to future
licensing arrangements, availability of cost–effective labour and
supplies, the proper functioning of Pond's technology, the quality
of the algae produced, the demand for Pond's technology, the
ability of Pond to successfully compete, cash flow and expenses,
and obtaining and maintaining intellectual property protection.
Although Pond believes that the expectations and assumptions on
which such forward–looking statements are based are reasonable,
undue reliance should not be placed thereon and Pond can give no
assurance that they will prove to be correct. By its nature, such
forward–looking statements are subject to various risks and
uncertainties, which could cause the actual results and
expectations to differ materially from the anticipated results or
expectations expressed, including the risks set forth in Pond's
management's discussion and analysis of financial condition and
results of operations for its year ended December 30, 2020 and in its unaudited interim
condensed consolidated financial statements for the three months
ended September 30, 2021, available
on Pond's profile on SEDAR at www.sedar.com. Readers are cautioned
not to place undue reliance on this forward–looking information,
which is given as of the date hereof, and to not use such
forward–looking information for anything other than its intended
purpose. Pond does not undertake any obligation to update publicly
or revise any forward–looking information, whether as a result of
new information, future events or otherwise, except as required by
law.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Pond Technologies Holdings Inc.