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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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XL Tech. | LSE:XLT | London | Ordinary Share | COM STK USD 0.001 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 13.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:8133O XL TechGroup, Inc. 27 February 2008 Press Release 27 February 2008 XL TechGroup, Inc. ("XL TechGroup" or "the Company") Operating Update XL TechGroup (AIM: XLT), the creator of companies that solve identified, global unmet market needs, today provides an update on the progress of the Company's portfolio of businesses. John Scott, CEO of XL TechGroup, commented: "During meetings with our institutional investors in October 2007, a number of anticipated milestones were flagged for each of the XL TechGroup companies over the subsequent few months. These are outlined in the relevant presentation on our website. At TyraTech, PetroAlgae, DxTech and QuoNova, all of these milestones have either been achieved or are continuing to make good progress towards completion. We are confident that the additional milestones anticipated during 2008, especially those related to cash generation, should also be successfully achieved, and we look forward to keeping shareholders updated over the coming months." PetroAlgae LLC ("PetroAlgae") - 94.4% owned by XL TechGroup* * as at 31 December 2007 Work has been continuing at PetroAlgae's optimization site in Florida to identify the most efficient operating parameters that will maximise oil yields in a number of differing geographies and climate conditions. A comprehensive framework has been developed to both explain and predict biomass growth and lipid production. One particular focus has been on confirming CO2 requirements, with research indicating that approximately 240 tons per annum of carbon dioxide is needed for each acre of production. This is a positive development as many potential licensees already produce significant amounts of CO2 through their existing operations and, as a result, they are very interested in the added benefits of potential mitigation solutions. Beyond generating oil test samples, the optimization facility is also producing quantities of biomass for process testing and optimization, and is making good progress in meeting the remaining plant engineering challenges. All of this work is now leading to the design and construction of an initial 5-10 acre demonstration facility adjacent to the existing site in Florida, to be completed in the summer of 2008. Continuous feedback from potential customers and partners, particularly those outside the USA, has concluded that a more compact facility than previously anticipated will be sufficient to answer a number of important scalability and other questions. This clearly has significant benefits for PetroAlgae in terms of both development time and capital expenditure. Later in 2008, it is currently anticipated that a larger site of approximately 50 acres will be built with a co-development partner in a US location adjacent to a CO2 source, such as a power plant. PetroAlgae is in discussions with potential customers and partners whose combined needs will exceed 2 billion gallons per annum by 2010. These parties include biodiesel refiners, petroleum companies, petrochemical manufacturers, large plantation operators, energy providers, commodity traders, amino acid producers, animal feed suppliers and government/military organizations. The first non-binding MOUs have been signed, and PetroAlgae continues to anticipate that its first international licenses will be agreed in 2008, along with its first US joint-venture. The deal structures for international licenses are expected to produce significant up-front fees, together with milestone payments and a long-term royalty tail based on gross revenues. XL TechGroup is also in discussions with a number of parties that have expressed a serious interest in making a strategic investment in PetroAlgae. TyraTech Inc. ("TyraTech") - 47.9% owned by XL TechGroup* * as at 31 December 2007 TyraTech was successfully listed on AIM in June 2007, raising gross proceeds of £25 million. Since its IPO, TyraTech has made very good progress including the following key developments: * successfully completed its first stage of development with Kraft Foods and received the first milestone payment; * received the first milestone payment in its partnership with Syngenta; * announced the US launch of "Natures Natural", a peat replacement and horticulture product; * announced the commercial launch and first sales of its Crawling Insect Spray product, and; * achieved development and financial milestones with Arysta LifeScience Corporation. DxTech LLC ("DxTech") - 83.5% owned by XL TechGroup* * as at 31 December 2007 DxTech is in active discussions with global companies with diagnostic businesses that have revenues in the US$200 million to US$2 billion range. Each has an aggressive approach to Point-of-Care ("POC") testing, many have visited the DxTech facilities in Merrimack, New Hampshire and Cambridge, UK to conduct due diligence on the technology, and they have expressed a clear interest in proceeding with discussions toward possible partnership agreements. The deal structures under discussion involve up-front money to DxTech in the form of development fees or license fees, as well as performance based milestone payments. Deals would also include terms regarding supply, distribution and profit sharing. DxTech intends to target the US POC market with a phased launch of cartridges, starting with a CLIA-waived thyroid series of assays, followed by blood glucose and haemoglobin A1C in relation to diabetes diagnosis and management, then a lipid panel for heart disease diagnosis and management, liver function, and ultimately haemotology. DxTech expects to receive FDA clearance in 2009 and CLIA waiver in 2010, with the first revenues from physician offices in the US to start before the end of 2009. DxTech's technology also has the potential to transform diagnostic testing in emerging-markets such as India, Russia and China. Specific terms of a deal are at an advanced stage of negotiation with a leading company from one of these countries, and co-development revenues and licensing fees related to markets outside the US are anticipated to begin in 2008. XL TechGroup is also reviewing a number of serious expressions of interest from parties interested in making a strategic investment in DxTech. QuoNova LLC ("QuoNova") - 88.7% owned by XL TechGroup* * as at 31 December 2007 The last year at QuoNova has been characterized by a strategic focus on consolidating and expanding the anti-virulence technology platform, strengthening the patent position and advancing the selection of development compounds for different applications. This work is being accompanied by progression of the initial patent portfolio, with the first two patents being allowed by the US Patent Office. Notable progress has also been made under R&D collaborations. In the wound healing area, QuoNova's Quorum Sensing Blocker ("QSB") technology has been found to be effective in a predictive animal model. It has also been shown to be highly efficacious in-vitro in inhibiting biofilm generation by Gram-positive species, including resistant strains such as MRSA (methicillin-resistant Staphylococcus aureus) and by clinically relevant fungal pathogens such as Candida sp. QuoNova is preparing for the entry of selected candidates into the regulatory development process. Further collaborations with academic and industrial partners are aimed at evaluating effects across a still broader panel of microorganisms, at conducting further proof of concept studies in animal models of respiratory and dermatological disease, and at developing specific formulations for a number of separate consumer healthcare and industrial products. Successful collaborations will form the basis for future product development and licensing agreements, and discussions continue to advance towards the first anticipated deals during 2008. AgCert International plc ("AgCert") - 18.8% owned by XL TechGroup* * as at 31 December 2007 AgCert recently announced that it has so far been unable to reach agreement with all its creditors and customers regarding the renegotiation of contracts, and has proposed to file a petition for examinership in Ireland. This entails a process whereby AgCert is put under the protection of the High Court in Ireland with a view to allowing a court appointed examiner to formulate and put forward for approval a scheme of arrangement with its creditors and members. The objective in petitioning for examinership is to address AgCert's obligations while maintaining an ongoing business. This action by AgCert has no impact on any XL TechGroup borrowing covenants. To facilitate AgCert's negotiations with its creditors and customers, with the single aim of looking to maximise value for all of AgCert's shareholders, XL TechGroup has entered into a loan note agreement with Laurus Master Fund Ltd. ("Laurus") under which XL TechGroup has agreed to pay US$17.8 million plus interest to Laurus in May 2009. In return, XL TechGroup has received US$9.9 million in cash from a third party which has now become AgCert's sole secured creditor. From XL TechGroup's perspective, the effect of this agreement has been to: * remove a previous commitment to provide a loan of up to Euro5 million to AgCert in the second quarter of 2008; * add US$9.9 million in cash to XL TechGroup's balance sheet, and; * leave XL TechGroup with a US$7.9 million right to participate alongside AgCert's sole secured creditor under the original debt owed to them by AgCert It is the Company's view that the new agreement with Laurus has left XL TechGroup in an improved position in relation to AgCert than existed before when XL TechGroup was simply a shareholder with a commitment to lend AgCert additional funds that would not have been secured in a senior way. The changed position gives XL TechGroup cause to continue to be optimistic that a stake in an AgCert business with value will be preserved, whether through the examinership process or otherwise. GenXL LLC ("GenXL") - 42.9% owned by XL TechGroup* * as at 31 December 2007 In March 2007, GenXL announced its first company development agreement with EnGen LLC. The competitive cost and significant performance advantages of EnGen's proprietary nano-scale polymer technology have now been validated, and it is ready for commercial deployment in ultra-capacitors and lithium-ion batteries. Negotiations with a number of potential partners are underway, including with the market leader that has validated the technology. In November 2007, GenXL acquired 70% of INSERO which is developing implantable drug delivery systems, with an initial focus on hypertension, the single leading cause of premature death worldwide. A major problem with existing hypertension treatments is non-compliance and the INSERO technology platform addresses this directly. Feasibility studies with a US company should be completed within the first quarter of 2008, and INSERO would then move to negotiate a licensing agreement. XL TechGroup Cash Position As of 31 December 2007, XL TechGroup had cash on hand totalling approximately US$11.4 million. The recent loan note agreement with Laurus provides an additional US$9.9 million. XL TechGroup currently finances PetroAlgae, DxTech and QuoNova. The first two of these are now in the fifth (Scale) stage of XL TechGroup's systematic company building methodology, when it is normal for outside strategic and other financing to be introduced. Such discussions have already started for both PetroAlgae and DxTech, and XL TechGroup anticipates closing on relevant agreements during 2008. Additionally, all three companies are expected to be generating revenue before the end of 2008. As a result, it is anticipated that one or more of these companies should no longer be dependant on XL TechGroup for part or even all of their funding by the end of 2008. Over the last six months, given increased uncertainties in capital and other funding markets, XL TechGroup has been successful in reducing the Group's monthly cash burn, without any significant impact on the planned development of its existing portfolio of companies. It should also be noted that XL TechGroup currently does not expect to launch its next new company before the fourth quarter of 2008. The Board of XL TechGroup has recently approved a 2008 budget that results in a cash positive position over the full year, without needing to raise any additional funds in the market or sell any part of the Company's holding in TyraTech in the market. Including a continuing focus on Group expenses, this budget is based on XL TechGroup achieving the following during 2008: * international licensing and co-development deals for PetroAlgae * regional licensing and co-development deals for DxTech * co-development and licensing deals for QuoNova * strategic and non-strategic third party investments in DxTech and PetroAlgae * value realisation from the sale of technologies that do not quite make it through XL TechGroup's selection criteria and which are not appropriate for GenXL The Board of XL TechGroup believes that its existing cash resources, combined with anticipated cash inflows from anticipated deals as well as the Company's continuing ability to leverage its assets, will be sufficient to fund the overall business through 2008. Change of Auditor XL TechGroup also announces the appointment of Grant Thornton LLP as Auditors to the Company. This appointment has been approved by the Company's Audit Committee, and Grant Thornton LLP will conduct the audit of XL TechGroup's accounts for the year to 31 December 2007. - Ends - For further information: XL TechGroup Inc. John Scott / Harold Gubnitsky Tel: +1 321 409 7403 hgubnitsky@xltg.com Chris Munden, Director of Investor Relations Tel: +44 (0) 20 7398 7720 cmunden@xltg.com www.xltechgroup.com Nomura Code Securities Richard Potts, Corporate Finance Tel: +44 (0) 20 7776 1200 www.nomuracode.com XL TechGroup media enquiries: Abchurch Communications Heather Salmond Tel: +44 (0) 20 7398 7704 heather.salmond@abchurch-group.com Gareth Mead Tel: +44 (0) 20 7398 7710 gareth.mead@abchurch-group.com Switchboard: +44 (0) 20 7398 7700 www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange END MSCILFEDFVIRFIT
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