CO2 Solutions Announces 2017 Fourth Quarter Results QUEBEC CITY, Oct. 25, 2017 /CNW Telbec/ - CO2 Solutions Inc. (the "Corporation" or "CO2 Solutions") (TSXV:CST.V - News) today announced its financial results for the fourth quarter and financial year ended June 30, 2017. 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 Corporation remains on track with its Saint-Flicien project in Quebec, where the Corporation will be installing a unit to capture CO2 from a pulp and paper mill, and supply that captured CO2 to a nearby greenhouse. Detailed engineering was completed and preparatory work on site has commenced.
- The Corporation partnered with Seneca on a preliminary engineering study to assess the technical and economic viability of the implementation of its technology for an approximately 32-tonne per day capture unit in the metallurgical industry.
- The Corporation announced partnerships with CERT, Carbicrete, Breathe and Hago for round 2 of the NRG COSIA XPrize. With these joint entries, and its two entries on its own, CO2 Solutions will now have six opportunities to be amongst the round 3 finalists.
- The Corporation extended the expiry date of common share purchase warrants of the Corporation originally issued in connection to a private placement of units on July 3and July 17, 2014 (the "Warrants") to July 3, 2018.
- Several partners, amongst which Kiverdi Inc. and Carbon Consult Group Inc. were welcomed to the Valorisation Carbone Quebec ("VCQ") project to demonstrate various solutions to close the carbon cycle and measure the impacts on greenhouse gas (GHG) reductions. The Corporation is now partnering with a number of companies whose solutions convert CO2 captured by the Corporation into value-added products, such as oils, proteins, methanol and acetic acid, all materials with substantial commercial applications.
Management Commentary
"Our transformation from technology development company to commercial operator continues to progress well," stated Evan Price, President and CEO of CO2 Solutions. "In addition to the Saint-Flicien project, we have a growing pipeline of opportunities, including a significant potential project in the metallurgical industry. Through our leadership of the VCQ project and our progression through the NRG COSIA XPrize, our profile continues to expand and consequently we are witnessing an increase in companies interested our technology. This coming year the focus will remain on execution of our commercialization programme, which includes leveraging our existing partnerships and exploring new opportunities. Through the VCQ project, our goal is to become one of the cornerstones of a new industry focused on the commercial utilization of CO2 in closing the carbon cycle, and we are very satisfied with progress made to date, and the opportunities this implies for the Corporation going forward."
Summary of financial results
Revenues and net loss
Revenues of $0.05 million were recorded for the financial year ended June 30, 2017, relating to the sale of enzymes. No revenue was recorded for the same period in the prior year. Net loss for financial year June 30, 2017 decreased by $0.37 million from the prior year to $4.6 million, reflecting an increase in government grants relating to the Saint-Flicien and VCQ projects, offset partially by an increase in research and development expenses associated with these same projects.
Research and Development Expenses
Research and development expenditures, before tax credits and government assistance, increased by $0.8 million to $3.6 million for the financial year ended June 30, 2017, compared with $2.77 million for the prior year. The change reflects an increase in research and development activities related to VCQ and Saint-Flicien projects.
Government assistance for the financial year ended June 30, 2017 was $2.0 million, a $1.4 million increase from the prior financial year. This government assistance comes in the form of subsidies granted to the Corporation mainly by the Government of Qubec for the VCQ project, as well as Sustainable Development Technology Canada, and Technoclimat (Transition nergtique Qubec) for the Saint-Flicien project.
Business Development Expenses
Business development expenses were $0.65 million for the financial year ended June 30, 2017, compared to $1.01 million for the prior financial year.
General and administrative expenses
General and administrative expenses totalled $2.23 million for the financial year ended June 30, 2017, as compared to $2.04 million for the prior financial year.
Liquidity and financial position
As at June 30, 2017, the Corporation held approximately $3.03 million in cash and cash equivalents, consisting predominately of advances received from the Government of Quebec for use with the VCQ project, $0.18 million in receivables, and $0.22 million in provincial tax credits receivable in the short-term for total liquid assets of approximately $3.43 million ($2.09 million as at June 30, 2016).
Such amounts may prove insufficient to fund the Corporation's forecasted working capital requirements for the next 12 months. Through current and ongoing negotiations with potential funding partners and Provincial and Federal government agencies, the Corporation's management is actively seeking to raise the necessary capital to meet its funding requirements.
A more comprehensive discussion of the Corporation's operations, financing activities as well as CO2 Solutions' audited consolidated financial statements will be found on the Corporation's website at www.co2solutions.com and in the Corporation's filings on www.sedar.com.