PetroAlgae to file for IPO

Florida-based PetroAlgae is preparing for its initial public offering (IPO) as the company announced today its S-1 filing with the Securities and Exchange Commission (SEC).

The number of shares to be offered and the price range for the offering have not been announced but according to the filing, PetroAlgae hopes to get a maximum of $200m from the IPO.

Looking at their financial statement, the company does not incur any significant history of revenues, operating or net income, and cash flows to date given that PetroAlgae’s business is still at a development stage. As of March 31, 2010, the company had an aggregate accumulated deficit of $67.2 million and said in the filing that they anticipate to continue to report losses and negative cash flow.

“We expect to derive substantially all of our revenue during our next year of operation from a small number of contracts that we will enter into prior to the consummation of this offering.” – PetroAlgae

PetroAlgae expects its main source of revenue to come in the form of licensing fees and royalties from customer licensees. The company licenses its commercial micro-crop algae technology system for food and fuel. Last month, PetroAlgae announced a potential licensing deal with Korean cleantech developer Eco-Frontier for production of up to 850,000 tons of biocrude over a three-year period beginning 2012.

In April, PetroAlgae announced a deal with Asesorias e Inversiones Quilicura (AIQ) of Chile to develop a micro-crop technology system for the large-scale production of green gasoline, diesel and jet fuel in the country.

To date, they have signed MOUs with five prospective customer licensees representing up to 18 license units. The company said it has yet to construct their technology on a commercial scale.

Over the past 4 years, PetroAlgae have spent $35.1 million on R&D for algae growth and harvesting technologies. The company’s 2009 R&D expenses was at $15.1 million.

PetroAlgae is currently trading their common stock on the OTB Bulletin Board (“PALG”) at $19.99/share as of August 10. The green blogger is not really good with financials so feel free to analyze them yourselves! =)

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