Pond Technologies Holdings Reveal 70% Revenue Increase, Decreased Operating Loss and Margin Improvement in Q3 2021 Unaudited Reports

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Pond Technologies Holdings Inc. (TSX.V: POND)PNDHF4OO, announced that the unaudited interim condensed consolidated financial statements of the Company for the 3 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 with 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 favor of the Lender.

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.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.