Financial losses in 2011

BLIS posted a $828,000 loss, before tax and finance costs, for the half year to September 2011. This was largely because of licensing agreement difficulties with one of BLIS’s largest US retailers that saw promotion temporarily halted in the United States and sales slashed from $682,000 to just $8,000.

The company reports that, while sales resumed into the United States in October 2011, meaningful volumes are not anticipated until after December 2011 when a new distribution partner will be appointed. “After review, the company has decided to end its global distribution agreement with Frutarom Ltd earlier than its 2014 renewal date. This was not a decision taken lightly by the company and signals the importance of a solid distribution agreement to the future success of the company. It had become apparent that, as the market has developed and evolved for BLIS probiotics within the oral care sector, the company’s market priorities and expectations had outpaced the ability of Frutarom Ltd to deliver. This termination will take effect from 30 November 2011.”

Stratum Nutrition – new distribution partner

BLIS has signed a letter of intent to appoint Stratum Nutrition as a distribution partner from 1 December 2011. Stratum Nutrition (www.stratumnutrition.com) is a human nutrition company based in St Louis, Missouri. Stratum Nutrition is to market the entire BLIS range of probiotic ingredients on a global basis, excluding China and New Zealand. The range includes BLIS K12, BLIS M18 and BLIS Q24 (still in development). BLIS Q24 is a novel strain of Micrococcus luteus for topical applications. Marketing developments for all probiotic products will be extended to include relevant products for companion animals such as cats and dogs because this represents a significant component of the business for Stratum’s parent company Novus International.

In mid-May 2011, BLIS posted its seventh consecutive loss – up 187% from the previous year’s $482,000 loss to $1.38 million. Since 2005, it has cumulatively lost more than $7.1 million. However, punters remain convinced of BLIS Technologies’ eventual value and success with $3 million equity funding raised in 2010.

K12 lozenges approved for release in China

And they might be right. Following hard on the heels of the half year’s disappointing financial news, BLIS announced in late November 2011 that their K12 product (throat lozenges and products that contain natural bacteria for probiotic prevention of upper-airways infection, bacterial sore throats, tooth and gum disease and chronic bad breath) has been approved for release in China – a potentially massive market by any measure. In a press release, the company said the approval of BLIS K12 by the Chinese State Food and Drug Administration represents the end of a regulatory approval process that started in 2008. This Chinese regulatory approval will enable BLIS K12 lozenges and associated BLIS K12 products to be actively marketed by the NZPR Group (the commercialisation partner of BLIS Technologies in China) through its distribution networks within the country.

Market development partnership results in Russian venture

Additionally, BLIS Technologies announced that it will enter into a market development partnership with Integra Medical Inc., headquartered in Ontario, Canada. Integra Medical will produce and sell retail products in the Eastern European market. Integra Medical has already successfully achieved regulatory approval for its first BLIS K12-based product as a dietary supplement within the Russian market and has now embarked upon several clinical trials to support its application for BLIS K12-based products as an approved medicine in Russia.

Sales in New Zealand, Australia and Asia

On the home front, New Zealand trading revenue was up by 76% from $124,000 to $218,000, after the BLIS Throat Guard range moved to third overall in New Zealand pharmacy sales. The first 2 months’ sales contribution from subsidiary BLIS Functional Foods came in, following acquisition of the Gourmet Ice Cream Co. in August 2011. Other trading revenue increased by 14% from $80,000 to $91,000, with sales into Australia, Japan, Taiwan and South-East Asia.