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Shankar's Blog

Algae.Tec Off And Running

Australian company Algae.Tec is  in the process of an IPO.
at A$7.5m, Algae.Tec's issue is hardly one that can be described as
exploitative or prematurely opportunistic, and the company's legally
protected intellectual property represents years of research by US-based
Tech.Bio LLC.
 Algae.Tec already runs a small experimental plant, and is
simply looking for low-level funding to move to demonstration plant

Fri August 27 2010 04:13:51 AM by Shankar 10 algae tec

World Algae congress USA, 2010, Dec 6,7,8


This in-depth workshop is designed for algae companies looking to expand their business.  Your workshop leaders will reveal the different types of available financing resources, pros and cons of each option, and strategies in preparing for a legal due diligence review.

8.30amRegistration and breakfast Mr. McKenna has extensive experience asan energy and technologies commercialand investment banker, including Citibank,Lehman Brothers, and Pricewaterhouse Coopers.Hamilton Clark & Co. is a FINRA member firm and aregistered Broker/Dealer with the SEC.
There is also a pre conference workshop on Dec 6.
Speaking opportunity is there at http://secure.terrapinn.com/v5/edetails.aspx?e=3761
Speaker faq is here http://www.terrapinn.com/2010/algae/spkFaq.stm
After the first look at the website I thought it is a seminar / conference to educate/ help / network startups with VCs and Angel funders.Now, I am not clear.May be once I see the final list of speakers, I will know better. More info :http://www.terrapinn.com/2010/algae/programme.stm
Thu August 26 2010 06:22:35 AM by Shankar world algae congress  |  2010

Has the Big Time Finally Come for Startups?

VCs and startups have complained that the biofuels industry has been stranded by indifference from the majors.
That has changed.
Shell and Cosan SA Industrio and Comercio, the world's largest sugar producer, finalized a multi-billion dollar joint venture today for biofuel.
VCs have put in billions into biofuels over the last six years with nothing  to show . 
 Range Fuels and Mascoma have had to delay production and everyone has suffered from a swoon in oil prices.
 To generate revenue in the short term, many have diversified into green chemicals or food.
Algae specialist Aurora Biofuels, for example, is undergoing a transformation from a fuel company to one that will specialise producing oils for omega-3s. 

Granted, the whole thing could devolve into an oil company accounting game. For all you know, it could  remain landlocked in Brazil. 

However, on the face of it, it looks like there is a new, well-funded biofuel venture in the world with an eye toward commercialization.

Others may follow. I mean other oil companies may follow. And in turn, these new ventures with their fossil fuel funds could start to select  biofuel startups as partners.

There is no doubt, that a large sum of funding has to come from  oil companies. If a race starts among them, the funding will start in earnestness and researchers would rush in to algal oil.

But I still insist that the experts and leading limelights have a very important role to play when they predict the future of the industry.

The best they can do is to stay non committal.

After all no one knows when a great idea can come about and become commercialised. 

Agreed the Road map of Algae by DOE, doesnt give any figure / numbers till the year 2022. 

Sad. So much for pessimissm.

Thu August 26 2010 05:04:54 AM by Shankar funding for algae

Cereplast - second quarter results

this is one of my favourite companies.
Cereplast too, like Cyanotech didnt make much progress, but the reasons are convincing.

The company made two major moves. One is shifting the operations from California to Indiana and the other is to get listed in Nasdaq. Both have resulted in some loss in production and increase in expeneses / losses.

I still strongly feel that it is agood company to invest in and also a good company to associate with for
a. Distribution and b. Technology

Revenues for the second quarter ended June 30, 2010, totaled $684,431 compared to $900,598 a year ago. The decrease was partially offset by an increase in orders from both existing and new customers.

Gross profit rose by $121,790, or 157.3%, to $199,211 for the three months ended June 3, 2010 compared to gross profit of $77,421 for the three months ended June 30, 2009.

As a percentage of net sales, gross profit margin increased to 30.8% for the three months ended June 30, 2010 from 8.6% for the three months ended June 30, 2009.

"We achieved significant milestones in the second quarter and further positioned the Company for rapid growth and operational profitability," said Mr. Frederic Scheer, Founder, Chairman and CEO of Cereplast, Inc.

"Our gross profit rose significantly.

As a result, our second quarter gross margin as a percentage of net sales increased to 30.8% from 8.6% in the same period last year.

Though sales were impacted by the ramp up of our facility taking place towards the beginning of the quarter as we moved our operations to Indiana from California, we expect revenues for 2010 could increase more than 190% over last year to between $8-$10 million as demand for our products remains strong as a result of contracts and commitments we are securing from around the world.

We dont have information about what % of their produce is made of algae, although we know that they are pretty serious about using algae in many of their bio plastics in the future if not now.
Sun August 22 2010 12:18:51 PM by Shankar 2 Cereplast  |  second quarter results

Cyanotech Reports Financial Results for the First Quarter of Fiscal 2011

Cyanotech Corporation (CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the first quarter of fiscal 2011, ended June 30, 2010.

Their financial year starts in Apr and ends in March.

First Quarter 2010- 2011

For the first quarter of fiscal 2011 compared to the first quarter of fiscal 2010, revenues were $3,856,000 compared to revenues of $4,021,000. Gross profit was $1,659,000, with gross profit margin of 43%, compared to gross profit of $1,733,000 and gross profit margin of 43%. Net income was $399,000, or $0.07 per diluted share, compared to $413,000, or $0.08 per diluted share.

The growth is not much. That too for a market leader.
This may reflect negatively for bye products or co products of algae in general.
One may have to look at the financial figures lot more closely before taking a call.

Trailing 12 Months

For the trailing 12 months ended June 30, 2010, compared to the trailing 12 months ended June 30, 2009, revenues were $15,577,000 compared to revenues of $14,270,000. Gross profit was $6,559,000, with gross profit margin of 42%, compared to gross profit of $5,941,000 and gross profit margin of 42%. Net income was $1,377,000, or $0.27 per diluted share, compared to $1,284,000, or $0.25 per diluted share.

"Cyanotech's performance was steady in the first quarter of fiscal 2011 for both our bulk raw material Spirulina and Astaxanthin products and our branded packaged products," said David I. Rosenthal, Interim President and CEO. "As a world leader in the production and marketing of high-value natural products from microalgae, we are putting increased emphasis on our Nutrex Hawaii consumer products to introduce them to a broader consumer market than in prior years, principally domestic. Our marketing team is making good progress with new retail outlets, both major chain stores and their online stores."

Rosenthal noted, "Our production continues to show excellent yields, which should enable us to meet increased demand for our bulk and packaged products as we go forward."

Cash and cash equivalents were $868,000 at June 30, 2010 compared to the March 31, 2010 balance of $817,000. Working capital increased to $5,243,000 at June 30, 2010 compared to $4,942,000 at March 31, 2010.

For the first quarter of fiscal 2011 compared to the first quarter of 2010, Spirulina sales accounted for 51% of total revenues and natural Astaxanthin sales for 49%. International sales were 46% of total sales compared to 47%.

About Cyanotech -- Cyanotech Corporation, a world leader in microalgae technology, produces BioAstin(R) Natural Astaxanthin and Hawaiian Spirulina Pacifica(R)--all natural, functional nutrients that leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. Cyanotech's Spirulina products offer complete nutrition, and augment energy and immune response. They are FDA reviewed and accepted as Generally Recognized as Safe (GRAS) for use in food products. BioAstin's superior antioxidant activity and ability to support and maintain a natural anti-inflammatory response enhance skin, muscle and joint health. All Cyanotech products are produced from microalgae grown at its 90-acre facility in Kona, Hawaii using patented and proprietary technology. Cyanotech distributes to nutritional supplement, nutraceutical and cosmeceutical manufacturers and marketers in more than 54 countries worldwide. Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products Association(TM). Visit www.cyanotech.com for more information.

Fri August 20 2010 12:40:02 AM by Shankar 5 cyanotech  |  spirulina  |  Astaxanthin

The premature clean-tech IPO boom

There is nothing new in this article that we havent discussed in the last week about Petroalgae and other new IPOs in the biofuels space.

However, I have given the link to the article for whatever its worth.

Early-stage green technology companies are taking a page from the biotech playbook: IPO with little or no revenues. So far, it's not working.

A number of tiny, ambitious companies in a promising industry with a very small market are lining up to tap the public markets. It may sound like the biotech IPO boom of the 1990s, but this time it's firms in the clean tech industry filing S-1s faster than they can earn a buck.

During the biotech boom last decade, young companies -- often without any revenue at all -- sold investors on the possibility of new blockbuster drugs. Along with the broader tech market, the industry crashed in 2001. Successful ones were acquired; most went bust. A decade later, a few superpowers continue to dominate the pharmaceutical world, although plenty of young biotechs are still vying for that elusive FDA approval with the backing of public money.

This time around, it appears to be a different industry with the same model: raise money today to finance a business model for tomorrow. It's early-stage green technology companies that are funding their research and development for a market that is mostly non-existent today. Their hope is on a blockbuster fuel instead of a blockbuster drug.

The latest revenue-free company to join the ranks is PetroAlgae, which filed for a $200 million IPO last week. The company makes technology to grow and harvest algae, which many believe is a promising source of renewable energy. It has lost $66 million during the past three years without bringing in a single dollar in revenues.
Thu August 19 2010 11:07:18 PM by Shankar IPOs  |  petroalgae

Now what !?

Larsyn our good old friend in our club has posted a blog in another similar site called cleantick.com


Larsyn asks

" Much research needs to be made to determine if this Algae grown from animal waste is good for human consumption in Nutricuticals or Pharmacuticals. We know that the algae produced is sutiable for fertilizer & animal feed. Whether the hormones used in production of milk or beef are carried in the algae remains to be determined. "
Tue August 17 2010 10:53:42 PM by Shankar animal waste  |  human consumption  |  nutricuticals  |  pharmacuticals

Past, Present and Top Ten Greentech IPO Candidates

Of late funding in the green tech markets are diminishing.
VC activity too is not as fast as it used to be.

The public market regurgitated Solyndra. The shiny bolus ofTesla has been swallowed, although that firm's value proposition has not been fully digested or priced. Petroalgae has already been written off by analysts.

Read the article here

Tue August 17 2010 02:48:06 AM by Shankar 3 greentech  |  IPOs

Will Petroalgae's public issue takeoff !!?

Petroalgae by no means the market leader, files for IPO at a time when the market is not upbeat.

Not only is Petroalgae not the market leader, it is also not market ready.

In my opinion the $ 200 m offering will not be a great success and will spoil the chances for other companies with reasonably advanced technologies like, Solazyme, Saphire, Solix, Algenol etc

PetroAlgae Inc. (OTCBB: PALG) announced that it has filed a registration statement with SEC relating to its public offering of its common stock.

The market for green companies is pretty weak at present.
Is this the right time ?
More importantly is this the right offering ?

Petroalgae has been making announcements pretty regularly in the recent past. It announced signing up an understanding with a Chile based company recently.
Before that it signed up with a South Korean company.

It has an understanding or arrangement with one of India's largest company called Indian oil to produce algae for oil.

I have not seen any progress in any of these agreements.

Petroalgae has a MOU with a global giant called Fosterwheeler for engineering. That was made a couple of years ago. But that doesnt say much about the issue.

Such a company going for an IPO without a proven model is not good for the industry. This is not just what I feel. Many analysts too feel the same.
Let us have your views too.
Thu August 12 2010 10:35:14 PM by Shankar 20 petroalgae  |  public issue

Food Vs Fuel debate deflates !

It will never come to an end. The world population is growing. Mankind has not taken up favourably to grow food faster by means of GM. The need for food is on the increase. So, cultivating fuel particularly at the cost of food is going to be resisted.
here is an article which states that the debate is deflating.

The World Bank has said that it wrongly faulted fuel for the food shortage.

So long as algae is grown in semi arable or non arable and unutilised lands and use, either waste water or saline water, I think there will be no problems.

Mon August 09 2010 12:50:38 AM by Shankar food vs fuel