CO₂ Solutions Announces 2018 Fourth Quarter Results
• Commercial project in Saint-Félicien (QC) reaches final construction stage.
• Valorisation Carbone Québec CO₂ capture unit continues steady 24/7 operations.
• First CO₂ utilizations units to be installed at VCQ site before year end.
Quebec City, Quebec, October 18, 2018 – CO₂ Solutions Inc. (the “Corporation” or “CO₂ Solutions”) (TSX-V: CST) today announced its financial results for the fourth quarter and financial year ended June 30, 2018. The Corporation’s detailed financial statements and management’s discussion and analysis (“MD&A”) will be filed and available on www.sedar.com.
Fourth Quarter and Subsequent Operational Highlights
• The Saint-Félicien project is close to completion. The equipment is presently being installed on the site of the Resolute Forest Products pulp mill in Saint-Félicien (QC). The Corporation’s 30 tonne per day commercial plant will capture CO₂ from the pulp mill and supply that CO₂ to the adjacent Serres Toundra greenhouse. The commissioning of the plant is expected to start in November 2018. A six-month demonstration period will follow the commissioning of the plant, after which the Corporation will start recording its first commercial revenues derived from the sale of the CO₂ to the greenhouse.
• The $28.5 million Valorisation Carbone Québec (“VCQ”) demonstration project will be welcoming the first CO₂ utilization technologies and a rotating packed bed contactor in the coming weeks at the Chimie Parachem site in Montreal-East (QC). The packed column CO₂ capture plant installed at that location continues to show operational stability on a 24/7 basis and continues to meet expectations. Operation of the VCQ capture unit meets the previous environmental claims made by the Corporation relative to its proprietary enzymatic technology, i.e. no toxic emissions, no toxic effluents, no toxic materials, no degradation of the solvent. These results are consistent with those of the recently completed life cycle analysis of CO₂ Solutions’ technology, details of which will be presented in October 2018 at the GHGT- 14 Conference in Melbourne, Australia. The Corporation continues to encourage other CO₂ capture technology providers to publicly release the life cycle analyses of their own processes.
• On April 9, 2018, two of the Corporation’s eight entries in the NRG COSIA Carbon XPRIZE successfully passed Round 2 of the competition. These selected entries, which the Corporation had announced as joint entries in 2017, were with Carbicrete of Montreal (QC) and CERT of Toronto (ON). CO₂ Solutions and these partners shared USD $500,000 for each of the selected entries in Round 2, for a total of USD $500,000 for CO₂ Solutions, which the Corporation received in May 2018.
• On July 17, 2018, Hydro Quebec, the provincially owned electrical utility, through its Laboratoire des technologies de l’énergie (LTE), joined the VCQ Project as a service provider partner.
• On August 7, 2018, the Corporation announced it had received an additional $375,000 contribution from Natural Resources Canada
• On June 6, 2018, the Corporation’s technology was showcased in a presentation given at the Oil Sands Innovation Summit in Calgary (AB) by Natural Resources Canada’s CanmetENERGY research centre. The presentation highlighted the technology’s capacity to rely on low-grade heat for its operation and the availability of such heat in sufficient quantities to drive the capture process in a heat integration scheme, without impacting the steam cycle of a heavy oil operation plant.
“CO₂ Solutions continues its expansion as a major carbon tech company through its leadership of the VCQ project and the upcoming launch of its commercial capture unit. By early 2019, the Corporation will have two capture units permanently operating on industrial sites, which is more than any other second-generation capture technology. These units enable CO₂ Solutions to showcase the tangible economic and environmental benefits of the enzymatic technology to prospective clients and to maintain its competitive lead by accelerating the continued development of the Corporation’s technology,” stated Evan Price, President and Chief Executive officer of CO₂ Solutions “CO₂ Solutions’ large and growing pipeline of commercial opportunities is highly interested in the Corporation’s operating units and management looks forward to convert this interest into additional commercial transactions going forward.”
Summary of Financial Results
Revenues and net loss
Revenues of $0.65 million were recorded for the financial year ended June 30, 2018, relating to the winnings from the NRG COSIA Carbon XPRIZE and a service contract. $0.05 million was recorded for the same period in the prior year. The net loss for the financial year ended June 30, 2018, decreased by $2.7 million to $1.9 million, reflecting the increased activities of the Saint-Félicien and VCQ projects, a gain in the determination of the carrying value of a reimbursable contribution, and decreases in costs associated with business development and general and administrative expenses.
Research and Development Expenses
Research and development expenditures, before tax credits and government assistance, increased by $6.9 million to $10.6 million for the financial year ended June 30, 2018, compared with $3.6 million for the prior year. The change reflects an increase in research and development activities related to the VCQ and Saint-Félicien projects.
Government assistance for the financial year ended June 30, 2018 was $9.56 million, a $7.54 million increase from the prior financial year. This government assistance comes in the form of subsidies granted to the Corporation mainly by the Quebec government for the VCQ project, as well as Sustainable Development Technology Canada, and Technoclimat (Transition Énergétique Québec) for the Saint- Félicien project.
Business Development Expenses
Business development expenses were $0.43 million for the financial year ended June 30, 2018, compared to $0.65 million for 2017.
General and Administrative Expenses
General and administrative expenses totaled $2.16 million for the financial year ended June 30, 2018, in line with the amount of $2.22 million for the prior financial year.
Liquidity and Financial Position
As at June 30, 2018, the Corporation held approximately $7.0 million in cash and cash equivalents, consisting mainly in advances received from the Quebec government earmarked for the VCQ project, $1.4 million in subsidies receivable and $0.2 million in provincial tax credits receivable in the short-term, amounting in total to liquid assets of approximately $8.6 million ($3.4 million as at June 30, 2017).
With the anticipated receipt of the proceeds from government assistance related to the Saint-Félicien and VCQ projects, the potential for additional loans secured by provincial R&D tax credits and other financing options currently under evaluation and negotiation, along with the close monitoring of operating expenses, management believes the Corporation should have sufficient funds to meet its working capital requirements for at least the next 12 months.
A more comprehensive discussion of the Corporation’s operations, financing activities, as well as CO₂ Solutions’ audited consolidated financial statements will be available on the Corporation’s website at www.co2solutions.com and in the Corporation’s filings at www.sedar.com.
Grant of Deferred Share Units (DSU’s)
On October 18, 2018, in accordance with the terms of the respective DSU plan that was approved in November 2015, the Corporation’s Board of Directors granted 2,086,875 DSU’s to the non-executive
Directors of the Corporation. In accordance with the terms of the plan, these DSU’s were valued at a weighted average unit price of $0.09 per share.
About CO₂ Solutions Inc.
CO₂ Solutions is an innovator in the field of enzyme-enabled carbon capture and has been actively working to develop and commercialize the technology for stationary sources of carbon pollution. CO₂ Solutions’ technology lowers the cost barrier to Carbon Capture, Utilization and Sequestration (CCUS), positioning it as a viable CO₂ mitigation tool, as well as enabling industry to derive profitable new products from these emissions. CO₂ Solutions has built an extensive patent portfolio covering the use of carbonic anhydrase, or analogues thereof, for the efficient post-combustion capture of carbon dioxide with low‐energy aqueous solvents. Further information can be found at www.co2solutions.com.
CO₂ Solutions Forward-looking Statements
Certain statements in this news release may be forward-looking. These statements relate to future events such as CO₂ Solutions’ future economic performance, and reflect the current assumptions and expectations of management. Factors that could cause actual results to differ materially from such forward-looking statements include, but are not limited to, general business and economic uncertainties, third party events and adverse market conditions as well as those risks set out in the Corporation’s public documents filed on SEDAR. Readers are cautioned not to place undue reliance on such forward-looking statements. CO₂ Solutions undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.
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