In Hawaii, Cellana announced that its wholly-owned subsidiary Cellana LLC has signed an Asset Purchase Agreement with Cyanotech© Corporation for the sale of Cellana’s six- acre production and research facility known as the Kona Demonstration Facility (KDF). KDF is located adjacent to Cyanotech’s existing 90-acre site at the Natural Energy Laboratory of Hawaii Authority (NELHA). The acquisition includes all existing equipment and other assets necessary to operate the facility.
Over the past seven years, Cellana has directed over $30 million of investment, collaborative funding, and grant funding into developing and validating its ReNew™ Algae platform of high-value, non-GMO algae strains rich in Omega-3 nutritional oils, proteins, pigments, polysaccharides, and fuel-grade oils. During this time, Cellana has produced over 10,000 kilograms of ReNew™ Algae at KDF in Hawaii for processing and testing of multiple high- value and high-volume biomass components, including multi-ton quantities of its leading commercial algae strain KA32.
The transaction announced today is the culmination of the following three significant accomplishments over the past 18 to 24 months:
- 1. In late 2016, based in part on the yields demonstrated by Cellana and other grant consortium partners such as Arizona State University as part of the Algae Testbed Public-Private Partnership (ATP3), Cellana’s proprietary algae strain KA32 was selected by the U.S. Department of Energy as part of the DOE’s “State of Technology” definition for the photosynthetic algae biomass sector (1). KA32 is a strain of the genus Nannochloropsis enriched with high-value EPA Omega-3 oils, and the algae meal remaining after extraction of EPA Omega-3 oils has been successfully demonstrated in large-scale animal feed trials and in commercial algae-based ink products sold by Cellana’s partner Living Ink Technologies.
- 2. In April 2018, based on the successful testing and validation of samples of KA32 provided to POS Bio- Sciences compared to other sources of EPA Omega-3 oils, Cellana announced the execution of a letter of intent with POS Bio-Sciences for the joint commercialization of high-value EPA Omega-3 oils from Cellana’s algae biomass. Cellana and POS Bio-Sciences are currently negotiating a definitive, non- exclusive off-take agreement for EPA Omega-3 oils derived from Cellana’s proprietary algae strain KA32.
- 3. Based in large part on this new commercial agreement with POS Bio-Sciences, as well as the company’s relationships with its commercial partners Living Ink Technologies and Neste, in May 2018, Cellana signed a term sheet for $27 million of debt-based project financing with an undisclosed project financing partner for a proposed 54-acre commercial algae facility to be located adjacent to KDF. The proposed 54- acre commercial algae facility is expected to produce 700 to 800 metric tons of KA32 algae (on a dry weight basis) annually with estimated pre-tax cash margins of over 50%, based on the yield, price, and cost estimates provided to the project financing partner. The project financing partner has also indicated the availability of more than $100 million of additional debt-based project financing for subsequent commercial facilities, based on the success of the proposed 54-acre commercial algae facility.
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