Questor Technology Inc. (“Questor” or the “Company”) (TSX-V: QST)
announced today its financial and operating results for the fourth
quarter and year ended December 31, 2021.
Questor’s Consolidated Audited Financial
Statements and Management’s Discussion and Analysis for the year
ended December 31, 2021 are available on the Company’s website at
www.questortech.com and through SEDAR at www.sedar.com.
Unless otherwise noted, all financial figures
are presented in Canadian dollars, prepared in accordance with
International Financial Reporting Standards and are unaudited for
the three months ended December 31, 2021.
2021 FINANCIAL RESULTS
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|
For the |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Revenue |
|
1,126,850 |
|
2,623,673 |
|
5,503,595 |
|
9,210,718 |
|
Gross profit (loss) |
|
(946,255) |
|
297,542 |
|
(999,209) |
|
1,805,410 |
|
Loss |
|
(1,775,540) |
|
(885,949) |
|
(3,988,385) |
|
(1,829,876) |
|
Loss per share – basic and diluted |
|
$(0.06) |
|
$(0.03) |
|
$(0.15) |
|
$(0.07) |
|
|
|
|
|
|
|
|
|
As at |
|
|
|
December 31, 2021 |
|
December 31, 2020 |
|
Working capital1 |
|
|
|
|
|
16,274,715 |
|
19,300,453 |
|
Total assets |
|
|
|
|
|
35,047,855 |
|
38,014,911 |
|
Total equity |
|
|
|
|
|
30,482,081 |
|
33,989,100 |
|
1 Working capital is defined as total current
assets less total current liabilities.
- The Company maintained a strong
financial position at December 31, 2021 including cash and cash
equivalents of $14.7 million, working capital of $16.3 million, an
undrawn $1.0 million revolving demand loan facility and $5.0
million capital loan facility.
- The Company’s financial performance
in 2021 continued to be impacted by the effects of COVID-19 on the
global economy which included limited capital spending by its
customers during 2021, even though oil and gas prices increased in
the period. The Company notes cautious increases in capital
spending activity for 2022 by its customers, resulting in more
requests for proposals in the last quarter of 2021 and the closing
of two tall stack incinerator sales to be delivered in the first
half of 2022 for $3.9 million.
- Revenue for the year ended December
31, 2021, decreased $3.7 million compared to 2020. Revenue was $4.5
million in the first quarter of 2020 compared to $1.5 million in
2021, because it had not yet been impacted by the slow down in
spending caused by COVID-19, whereas the entire year of 2021 was
impacted.
- Loss for the year ended December
31, 2021, was $4.0 million compared to a loss of $1.8 million in
2020. The increase in the loss of $2.2 million is a result of $3.7
million lower revenue, $1.2 million of costs related specifically
to progressing the commissioning of three waste heat to power
facilities in Mexico, higher research and development expenses of
$0.3 million, and $0.3 million of bad debt provision taken against
potentially uncollectible trade receivables. These costs were
offset partially by the Company’s efforts to streamline operations
and reduce costs during the year and an increase in deferred tax
assets which can be used to offset future taxes payable.
2021 HIGHLIGHTS
- The Company made progress towards completing the commissioning
of the waste heat to power facilities in Mexico during 2021.
Subsequent to year end, the remaining equipment and resources
required to complete the project have been secured and the Company
is in the process of transporting them to the site. The letters of
credit supporting the outstanding trade receivables of $0.9 million
on this project have been extended until May 31, 2022.
- The Company has continued to
progress its 2021 strategic initiatives by adding strength to the
engineering team, restructuring its sales and operational teams and
furthering its research and development activities. These efforts
will allow the Company to diversify its products and services and
provide clean, cost-effective solutions to support its customers to
reduce greenhouse gas emissions (“GHG”) to achieve their net zero
emissions targets in both existing and new markets. The following
outlines the significant progress the Company has made in respect
of its research and development projects in 2021:
- The Company signed an agreement with Sustainable Development
Technology Canada (“SDTC”) to receive up to $4.5 million
of funding to expedite the development of the Company’s CPS
50-1500 kW modular, reliable, high efficiency Waste Heat to Power
generation systems (“ORCs”). Funding will be received throughout
the project as specific conditions and milestones set out in the
agreement are met by the Company. During 2021, the technical design
of the 1500kW turboexpander was completed and the Company initiated
purchase orders to procure all of the long lead materials required
to build the 1500kW prototype. The Company expects to have the
prototype completed and installed at the test site before the end
of 2022. Subsequent to the year end, the Company received its first
pre-milestone payment from SDTC in the amount of $0.75
million.
- Subsequent to December 31, 2021, the Company completed the
first phase of its integrated emissions data measurement and
reporting platform project being worked on in partnership with the
Southern Alberta Institute of Technology (“SAIT”). The project
resulted in tracking of transparent, immutable and verifiable
real-time methane emissions data and the generation and sale of
carbon credits. The project costs were largely funded by Alberta
Innovates and Western Economic Development.
- The Company continues its collaboration with North-East Gas
Association (“NYSEARCH”) and Stanford University to develop
alternative approaches to cleanly combust waste gas. The Company’s
contribution to the project is funded by NYSEARCH. This project is
focused on the development of a prototype methane oxidation
catalyst system designed to eliminate methane slip from waste gas
streams. The device would be the first of its kind and has the
potential to be applied across many industries.
- The Company has been selected to receive funding through the US
Department of Energy’s Advanced Research Projects Agency Energy
“Reducing Emissions of Methane Every Day of the Year” program
(“ARPA-E’s REMEDY”), in collaboration with University of Michigan
and Southwestern Research Institute to develop advanced combustion
systems that complements the Company’s efforts to reduce methane
emissions. The Company’s financial contribution to the project is
expected to be USD$ 0.1 million over a three year period.
MARKET OUTLOOK
The global focus on methane emissions reductions
continues to increase as noted in the 2021 discussions at the COP26
climate summit in Glasgow, Scotland. More than 100 countries,
including Canada, signed up to the Global Methane
Pledge which aims to slash global methane emissions by nearly
30 percent below 2020 levels by 2030. On March 29th, 2022, the
Canadian government announced the 2030 Emissions Reduction Plan
that includes $9.1 billion in new investments to cut pollution and
grow the economy. The plan will cap oil and gas sector emissions to
achieve net-zero emissions by 2050 and reduce oil and gas methane
emissions by at least 75 percent by 2030. The US Environmental
Protection Agency (EPA) has recently issued new rules specific to
methane reduction and countries around the world are doing the
same. Many are contemplating a ban on flaring and venting which is
creating an opportunity for Questor. These types of government
pledges are gaining traction around the globe and are translating
into customers reaching out to Questor to understand how its
products can assist them to meet the regulatory requirements and
the requirements from investors to reduce emissions.
Significant volumes of methane are vented
globally from maintenance operations, equipment failures and lack
of gas pipelines. The World Bank estimates that over 14.5 billion
standard cubic feet (scf) of associated gas is flared and vented
every day around the world. The Company is able to effectively
support clients in their maintenance operations with its rental
fleet of enclosed clean combustors. Venting 5MM scf per day of
methane releases 2,600 tonnes of CO2 equivalent (tCO2e) per day. By
cleanly combusting this gas with a Questor unit instead, emissions
are reduced by 90 percent to 260 tCO2e per day at a cost of less
than $0.50 per tCO2e. This demonstrates the cost effective manner
in which Questor’s clean combustion technology eliminates methane
before its emitted into the atmosphere. Conceptually, an investment
of $3.6 billion targetted at reducing the methane emitted from
flaring and venting, would reduce global greenhouse gas emissions
2.6 MMt per day or 1 GT per year.
The Company is globally recognized as a market
leader in clean combustion with its ISO 14034 certified proprietary
equipment and is well positioned to meet any increases in global
demand with its proven cost-effective technology solutions.
However, the effects from COVID-19 continue to impact the global
economy and Questor in that customers are still cautious with their
2022 capital spending budgets. In addition, supply chain issues are
causing longer lead times for the Company to manufacture and
deliver on its projects. The war between Russia and the Ukraine may
also have a further impact on global economic recovery in 2022. It
is difficult to predict how long these market conditions will
continue to negatively impact the financial performance of the
Company.
However, the Company notes some signs of market
recovery for its customers during the second half of 2021 including
the re-commencement of work previously put on hold and the sale of
two tall stack incinerators for $3.9 million to be delivered in
2022. The Company is optimistic that as methane emission intensive
industries continue to recover from the pandemic and economic
activity increases, combined with both government and investor
pressure to reduce methane, these companies will refocus their
efforts on the achievement of their emissions reduction commitments
which is expected to result in increased demand for the Company’s
cost-effective high efficiency clean combustion systems, waste heat
to power and data solutions.
FORWARD LOOKING STATEMENTS
Certain information in this news release
constitutes forward-looking statements. When used in this news
release, the words "may", "would", "could", "will", "intend",
"plan", "anticipate", "believe", "seek", "propose", "estimate",
"expect", and similar expressions, as they relate to the Company,
are intended to identify forward-looking statements. In particular,
this news release contains forward-looking statements with respect
to, among other things, business objectives, expected growth,
results of operations, performance, business projects and
opportunities and financial results. These statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements. Such statements
reflect the Company’s current views with respect to future events
based on certain material factors and assumptions and are subject
to certain risks and uncertainties, including without limitation,
changes in market, competition, governmental or regulatory
developments, general economic conditions and other factors set out
in the Company’s public disclosure documents. Many factors could
cause the Company’s actual results, performance or achievements to
vary from those described in this news release, including without
limitation those listed above. These factors should not be
construed as exhaustive. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying
forward-looking statements prove incorrect, actual results may vary
materially from those described in this news release and such
forward-looking statements included in, or incorporated by
reference in this news release, should not be unduly relied upon.
Such statements speak only as of the date of this news release. The
Company does not intend, and does not assume any obligation, to
update these forward-looking statements. The forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement.
ABOUT QUESTOR TECHNOLOGY
INC.
Questor Technology Inc., incorporated in Canada
under the Business Companies Act (Alberta) is an environmental
emissions reduction technology company founded in 1994, with global
operations. The Company is focused on clean air technologies that
safely and cost effectively improve air quality, support energy
efficiency and greenhouse gas emission reductions. The Company
designs, manufactures and services high efficiency clean combustion
systems that destroy harmful pollutants, including Methane,
Hydrogen Sulfide gas, Volatile Organic Hydrocarbons, Hazardous Air
Pollutants and BTEX (Benzene, Toluene, Ethylbenzene and Xylene)
gases within waste gas streams at 99.99 percent efficiency. This
enables its clients to meet emission regulations, reduce greenhouse
gas emissions, address community concerns and improve safety at
industrial sites.
The Company also has proprietary heat to power
generation technology and is currently targeting new markets
including landfill biogas, syngas, waste engine exhaust, geothermal
and solar, cement plant waste heat in addition to a wide variety of
oil and gas projects. The Company is also doing research and
development on data solutions to deliver an integrated system that
amalgamates all of the emission detection data available and
demonstrates how Questor’s clean combustion and power generation
technologies can be used to help clients achieve zero emission
targets.
The Company’s common shares are traded on the
TSX Venture Exchange under the symbol “QST”. The address of the
Company’s corporate and registered office is 2240, 140 –4 Avenue
S.W. Calgary, Alberta, Canada, T2P 3N3.
QUESTOR TRADES ON THE TSX VENTURE
EXCHANGE UNDER THE SYMBOL ‘QST’
Audrey Mascarenhas |
Ann-Marie Osinski |
Chief Executive Officer |
Chief Financial Officer |
Phone: |
(403) 539-4369 |
Phone: |
(403) 539-4371 |
Facsimile: |
(403) 571-1539 |
Facsimile: |
(403) 571-1539 |
Email: |
amascarenhas@questortech.com |
Email: |
aosinski@questortech.com |
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This document is not intended for dissemination
or distribution in the United States.
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