Operational Update
16 January 2007
XL TechGroup, Inc. (AIM: XLT), the systematic architect and builder of an ongoing stream of high value new companies, is pleased to provide an update on the progress of the Company's portfolio of businesses.
John Scott, CEO of XL TechGroup, commented: “We are delighted with the advances made by our companies in 2006. TyraTech, DxTech, PetroAglae and QuoNova are each making excellent progress towards increasing value. TyraTech's pioneering technology has been endorsed through its recent agreement with Kraft Foods Inc., as well as with Arysta, Scott's and Syngenta. PetroAlgae has exceeded our expectations and, as we near the completion of a test facility, is making rapid progress with technology developments and potential partners. DxTech is also developing well after very successful first customer demonstrations. We ended 2006 with the launch of our fifth company, QuoNova, and we have entered 2007 with confidence in our existing companies, as well as a great deal of optimism about a number of the opportunities within our business creation pipeline.”
TyraTech LLC (“TyraTech”)
TyraTech is developing a new class of highly effective, non-toxic pesticides and parasiticides using cloned insect chemoreceptors, based on approved, safe, natural oils for a variety of global markets.
XL TechGroup today announced the appointment of Dr R. Douglas Armstrong as full time Chief Executive Officer of TyraTech. TyraTech has appointed Nomura Code Securities Limited and Jefferies International Limited as advisers.
As announced on 6 December 2006, TyraTech entered into an exclusive co-development agreement with Kraft Foods Inc. for the development of compounds used in functional foods and beverages intended to help prevent human parasitic infection in the developing world. This global, market-disrupting deal will utilise TyraTech's novel screening platform to identify combinations of natural ingredients that are highly effective and safe to use on an on-going basis to break the cycle of re-infection.
TyraTech's other international agreements with Arysta, Scott's and Syngenta, as announced during 2006, are also making strong progress in developing horticultural and consumer applications for TyraTech's technology in the global insecticide and pesticide markets.
PetroAlgae LLC (“PetroAlgae”)
PetroAlgae is utilizing a proprietary environmentally-friendly algae and technology platform which can cost-effectively produce a renewable replacement for petroleum based products such as biodiesel fuel.
The company is now completing the construction of a second, and larger, test facility in Florida, which will demonstrate that the algae produce at least two hundred times more energy per acre than traditional biofuel crops, like soybeans, and that the modular cultivation process is scalable.
A pilot production facility of 400 acres is then scheduled to be built, with completion targeted for the end of 2007. This pilot site is expected to be able to produce almost 6 million gallons of raw oil per annum. This yield, which can be produced from facilities utilising waste ground, is equivalent to that produced from over 115,000 acres of soybeans and almost 50,000 acres of rapeseed, which require cultivated land. Such production is possible as the algae mature in 24 hours and convert 50 per cent of their weight to usable oil.
Further production facilities, in excess of 10,000 acres, are planned to be under construction by the end of 2007, with the scale up accelerating into 2008 and beyond.
PetroAlgae is primarily aimed at the global commodity markets and the company is already in preliminary talks with a number of potential project finance and joint venture partners and customers.
DxTech LLC (“DxTech”)
DxTech is developing a unique micro-fluidic system that essentially replaces the full range of common blood tests currently performed at reference laboratories around the world with a fully-automated, low cost point-of-care platform.
This cost effective diagnostic technology has undergone first distribution customer demonstrations, specifically of a thyroid testing panel, during November 2006. These demonstrations have confirmed DxTech's gold standard performance even compared to the clinical laboratory blood analysing systems which exceed the standards of other point of care systems already in the market.
DxTech is in negotiations with a number of leading companies who are interested in acting as partners and distributors, and has expectations of completing its first commercial deal in the first half of 2007.
QuoNova LLC (“QuoNova”)
As announced on 28 December 2006, XL TechGroup has created QuoNova, the fifth company to reach the development stage of XL TechGroup's proven methodology for value creation.
QuoNova is commercialising a novel Quorum Sensing Blocker technology which prevents bacteria that form biofilms from doing so, and inhibits bacteria from producing toxins which in addition, opens completely new application avenues in a broad range of high value markets. The breadth of the technology base puts QuoNova in a leading position to achieve a breakthrough in addressing an ever increasing need, and multi billion dollar markets, for safer, efficacious agents in the global fight against infection and the damage caused by bacterial biofilms.
QuoNova's business plan addresses multiple markets, such as treatments for lung infections, medical device coatings, oral and optical care products, domestic or industrial cleaners, anti-fouling paints, agrochemicals and large scale industrial applications in the water and petroleum industries. Proof of concept for the technology has already been established, and commercialisation is envisaged within two years for the most advanced applications.
GenXL LLC (“GenXL”)
GenXL is a new value creation entity jointly owned by XL TechGroup and US-based product innovation and technology development firm, GEN3 Partners Inc.
GenXL has now assembled an experienced management team and is currently evaluating an initial 25 opportunities, which originate from the combined pipelines of both XL TechGroup and GEN3. Those opportunities selected for development could result in individual new companies, standalone product lines, technology licensing opportunities or an appropriate mix of these.
XL TechGroup looks forward to further announcements from GenXL during 2007 as the company begins to create an additional income stream for our shareholders above and beyond XL TechGroup's core business model.
Additional mezzanine borrowing facility
As announced on 9 January 2007, XL TechGroup has also raised additional mezzanine funding of US$20 million from Laurus Master Fund, a New York based institutional equity fund that specialises in making direct investments in growing public companies. These funds will be used to continue development of XL TechGroup's existing companies as well as new opportunities in the pipeline.
| XL TechGroup Inc. | |
| John Scott / Harold Gubnitsky | Tel: +1 321 409 7403 |
| hgubnitsky@xltg.com | www.XL TechGroup.com |
| Chris Munden, Director of Investor Relations | Tel: +44 (0) 20 7398 7720 |
| cmunden@xltg.com |
XL TechGroup media enquiries:
| Abchurch Communications | |
| Heather Salmond / Gareth Mead | Tel: +44 (0) 20 7398 7700 |
| heather.salmond@abchurch-group.com | www.abchurch-group.com |
NOTES TO EDITORS
About XL TechGroup
XL TechGroup is in the business of significant value creation. Working with major international corporate and technology partners such as AES, Procter & Gamble and leading universities, XL TechGroup first identifies global unmet market needs and then targets and exploits these by the systematic creation of successful, disruptive technology businesses. These are built from scratch, and are then funded and developed by XL TechGroup through to the point of a trade sale or a stock market listing.
XL TechGroup's unique and proven methodology selects the best opportunities in order to create one-to-two new companies annually, where each company is expected to achieve a valuation of at least US$400 million within four years from its creation. While an XL TechGroup company might perform a stock market listing at an earlier point in this four year timeframe, XL TechGroup would retain its controlling interest and would continue to assist with the company's development.
XL TechGroup's companies to date are: AgCert International plc (www.agcert.com), TyraTech LLC (www.tyratech.com), DxTech LLC (www.dxtech.com) and PetroAlgae LLC.
XL TechGroup has also established GenXL LLC as a joint venture to capture the value of those prospects that do not quite meet the US$400 million, four year criteria but still demonstrate considerable potential worth. Over and above XL TechGroup's core business model, GenXL will review a significant flow of opportunities from both XL TechGroup and GEN3 in order to generate new companies, standalone product lines and technology licensing opportunities or an appropriate mix of these.
For further information, see www.xltechgroup.com
About 4SC
4SC AG has been listed in the Prime Standard of Frankfurt Stock Exchange since 15 December 2005. Founded in 1997 and now with a staff of 59, the company develops novel drug candidates for inflammatory diseases and cancer using a cheminformatics based technology platform. Traditional high throughput screening of therapeutic agents has been transferred from the lab to the computer. Thus, the company offers substantial cost and time advantages as well as increased success rates in drug development. 4SC AG uses its patented technology platform to create a sustainable product pipeline for active agents that are developed in early clinical phases ("proof of concept") and subsequently result in upfront and milestone payments as well as participation in sales generated by out-licensed products to the pharmaceutical industry. There are currently five projects in the pipeline. The first project on the treatment of rheumatoid arthritis is currently undergoing clinical phase IIa. Three other product candidates are in pre-clinical development and another project is in the research stage. Furthermore, the company has its technology platform in co-operation projects with biotech and pharma companies and is already generating initial revenues.
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