First Quarter Financial Highlights:
- As of
May 29, 2023 , the Company has an aggregate Sales Pipeline1 and Sales Order Backlog2 of$17.7M . This represents a 10% growth from the previous disclosure onApril 28 th, 2023 and consists of a 15% growth in Sales Pipeline and a 38% decrease in Sales Order Backlog. The decline in Sales Order Backlog is due to Revenue earned. The Company expects Sales Pipeline to continue to grow and the rate of Sales Pipeline converting to Sales Order Backlog to accelerate over the balance of the year. - Working Capital of
$0.23M , which includes$2.3M of Cash, as ofMarch 31, 2023 . Subsequent toMarch 31, 2023 , the Company received convertible debt conversions of$1.9M and warrant exercises of$1.64M resulting in a working capital gain of$3.54M . Management anticipates it has sufficient working capital to maintain activities for the subsequent 12 months. - Revenue for the three months ended
March 31, 2023 (“Q1 2023”) is$0.73M compared to$0.88M from the three months endedMarch 31, 2022 (“Q1 2022”). It is anticipated that the volatility of Revenue will smooth out as the Company’s Sales Pipeline matures and as the Company diversifies its Revenue generating opportunities. - Gross margin for Q1 2023 was 41.5% compared with Gross margin of 25.1% for Q1 2022. In Q1 2023, the Company returned to a supply and service Revenue mix whereas during Q1 2022, the Company earned lower margin on general contracting revenue earned.
- The Company reported an Adjusted EBITDA3 loss of
$0.44M and a Loss of$0.75M for Q1 2023 compared to$0.51M and$0.84M in Q1 2022. The Company continues to strategically balance its investment into Sales Pipeline growth, which includes increasing head count in sales and operations and increasing sales and marketing activity, with consideration for its maturing Sales Pipeline and realization of Revenue.
Hanspaul Pannu, CFO of SHARC Energy, said, “We are pleased that the majority of convertible debt and warrants set to mature or expire in the first six months of 2023 have been converted or exercised, respectively, to date with an anticipation that any remaining convertible debt or warrants outstanding will also follow suit. We are humbled by the continued support of our shareholders.”
He continued, “The gain in working capital provides the balance sheet flexibility required to realize on the Company’s maturing Sales Pipeline while strategically balancing the investment in growth. With the continued adoption of favourable climate & energy policies globally and the Company’s growing pipeline, strategic relationships and market visibility, SHARC Energy is well positioned to increase its market share over the balance of the decade.”
Q1 2023 Highlights and Subsequent Events
- False Creek Neighbourhood Energy Utility (“NEU”) Expansion. During Q4 2022, the Company commenced work on the supply and maintenance agreement with the
City of Vancouver for the provision and maintenance of five SHARC systems for the False Creek NEU Expansion. This project is expected to increase the capacity of the current 3.2MW WET system to 9.8MW, making it the largest operating WET project inNorth America upon completion, with an additional carbon emission reduction of an estimated 4,400 tonnes per year. The project is expected to be completed in Q3/Q4 2023. Snowmass Base Village ,Colorado installs PIRANHA. A PIRANHA T15 WET system will be installed in Aura’s 21 slope-side residences, powered 100% by renewable energy resources within the residential building. Aura’s team is led byEast West Partners , a developer of high-end mountain resort communities, and supported by SHARC Energy’sColorado distributor,LONG Building Technologies . It is anticipated this unit will ship in Q2 2023.
- PIRANHAs in Canada’s Capital. HTS Ontario, a representative of SHARC Energy products, has been selected to supply two PIRANHA T15 WET systems to be installed in
Ottawa . This deal is a key milestone as it marks the beginning of HTS’s growing SHARC Energy pipeline turning over and it validates the Company’s strategy to support and leverage its representative network to help grow awareness and sales for its products in key markets. These units shipped in Q1 2023.
- Partnership with Subterra Renewables. The Company and
Subterra Capital Partners Inc. (“Subterra Renewables”), a leading full-service geothermal drilling provider with a proprietary Energy-as-a-Service (“EaaS”) model known as Aura™, announced onApril 27, 2023 , a$200M strategic partnership to revolutionize the renewable thermal energy transfer landscape acrossNorth America . By combining SHARC Energy's innovative WET technology with Subterra's geothermal exchange systems, the partnership aims to bring unparalleled solutions to the market, capturing a greater share for both companies. $3.25M raised through security exercises. Since the beginning of 2023 to the date of the MD&A, the Company raised$3.17M through the exercise of warrants and$0.08M through the exercise of debenture warrants.- Conversion of Convertible Debt Face Value of
$3.4M . From the beginning of 2023 to the date of the MD&A, the Company has converted$3.4M of convertible debt. After the conversion, there is only$0.55M of convertible debt principal remaining.
Wastewater Energy Transfer Industry Supporting Policy
The outlook for the Wastewater Energy Transfer industry is experiencing signs of scale-up due to new supportive regulations and funding in several key markets across
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This legislation will promote the development of thermal energy networks throughout the State, providing benefits by reducing fossil fuel usage for heating and cooling through community-scale infrastructure solutions, along with employment opportunities for existing utility workers and new workers. The enabling legislation will build on the progress of, and complement, NYSERDA’s active community thermal program, which to-date has funded feasibility studies, detailed design studies, and other advanced project construction incentives to more than three dozen sites across the state.
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For complete financial information for the three months ended
About SHARC Energy
SHARC Energy is publicly traded in
Learn more about SHARC Energy: Website | Investor Page | LinkedIn | YouTube | PIRANHA | SHARC
ON BEHALF OF THE BOARD
Chairman and Chief Executive Officer
For investor inquiries, please contact: | For media inquiries, please contact: |
Hanspaul Pannu | |
Chief Financial Officer | Director of Marketing & IT |
SHARC Energy | SHARC Energy |
Telephone: (604) 475-7710 ext. 4 | Telephone: 778-846-5406 |
Email: hanspaul.pannu@sharcenergy.com | Email: mike.tanyi@sharcenergy.com |
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified using words such as “anticipate”, “plan”, “estimate”, “expect”, “may”, “will”, “intend”, “should”, and similar expressions. Forward-looking information involves 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 information. SHARC Energy’s actual results could differ materially from those anticipated in this forward-looking information as a result of regulatory decisions, competitive factors in the industries in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company. SHARC Energy believes that the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon. Any forward-looking information contained in this news release represents the Company’s expectations as of the date hereof and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether because of new information, future events or otherwise, except as required by applicable securities legislation.
1 Sales Pipeline is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the Q1 2023 MD&A.
2 Sales Order Backlog is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the Q1 2023 MD&A.
3 Adjusted EBITDA is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the Q1 2023 MD&A.
Source: SHARC Energy
2023 GlobeNewswire, Inc., source