Synthetic biology is an exciting disruptive technology that has been capturing the attention of investors recently. One synthetic biology company we highlighted in the past, Joule, is using a genetically altered organism to produce hydrocarbon diesel fuel and ethanol directly from sunlight and waste CO2. The company has raised over $160 million from various investors including one of the nation’s leading venture capital firms and claims as a technical advisor George Church, widely considered to be a pioneer in synthetic biology. Another company claiming to be in this space is Pilus Energy.
Recently highlighted in an article by Cleantechnica Pilus Energy is said to have developed an innovative technology which cleans wastewater while generating electricity. Bacterial robots (Bactobots) consume pollutants from wastewater and create energy which is captured by an “electrogenic bioreactor platform”. This two-fold value proposition seems tantalizing, however, the company does not appear to have any formidable financial backing. Pilus is looking to raise a mere $50,000 on the Indiegogo platform so they can hire a mechanical engineer and design then build their new bench-level prototype complete with sensors and wi-fi data transfer. So far they have raised $2,794 of this with 22 days left to raise the remainder. It seems that if this technology is as promising as it sounds, raising funds from a VC would prove much easier than resorting to a crowdfunding platform. Pilus may have another option for funding however, since just last week on November 25th, Pilus announced that they have been acquired by over-the-counter (OTC) company Tauriga Sciences (OTCMKTS:TAUG).
Tauriga Sciences (OTCMKTS:TAUG) is a development stage company. With a current deficit of around $35 million, the Company has $200 thousand in cash on hand and around $1.5 million in accrued liabilities as of September 2013. Tauriga has no products and services to offer and no revenues. In the period between March 2012 and September 2013, Tauriga issued over 180 million shares to fund their business bringing the total number of outstanding shares to 303 million currently. An investor in Tauriga Sciences over the past year would have lost over 80% of their investment as a result of this dilution:
In a previous article titled “The Dangers of Investing in Over The Counter (OTC) Stocks“, we looked at a number of companies that used the word “nanotechnology” to promote their value proposition, yet over time lost nearly of all their value. OTC companies claiming to be involved in similar disruptive technologies such as “3D printing”, “grapheme”, or “synthetic biology” should also be given extensive due diligence for the same reasons. Investors may look to Tauriga Sciences (OTCMKTS:TAUG) for exposure to the Pilus Energy technology but the question needs to be asked, just what is being purchased here?
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