HTC Purenergy Inc. announces the launch of a new C02 oil and gas recovery business unit and financial results for the first quarter period ended March 31, 2010
Regina, Saskatchewan - HTC Purenergy Inc. (the “Corporation” or “HTC”) today announced its financial results for the first quarter period ended March 31, 2010.
Quarter highlights
During the period, the Corporation launched a new division “EHR Enhanced Hydrocarbon Recovery”, targeting the rapidly expanding enhanced oil and gas recovery market utilizing CO2. In North America, it is estimated that over 45 billion barrels of proven oil reserves will be available for production through the application of innovative C02 enhanced oil recovery techniques. As a CO2 management technology global leader, HTC will participate in revenues associated with increasing production from North American oil fields.
The Corporation’s first quarter operations show results from the initiatives taken in the previous year demonstrated by the improvement in revenues and positive net income excluding amortization. The first quarter of 2010 has seen an increased interest in carbon capture projects with a renewed emphasis on CO2 for enhanced oil recovery projects. HTC’s strategic partner Doosan Power Systems continues to grow and expand capabilities and global market reach utilizing HTC’s CO2 technologies.
Governments in North America and many jurisdictions around the world have pending CO2 emissions legislation that will regulate CO2 emissions from industrial emitters. This legislation should create a significant increase in demand for HTC’s CO2 capture systems going forward.
Selected financial information is summarized below. For details refer to the Corporation’s Unaudited Interim Financial Statement and Management’s Discussion and Analysis.
| |
For the 3 month period ended March 31, 2010
(Unaudited) |
For the 3 month period ended March 31, 2009
(Unaudited) |
| Revenue |
$611,568 |
$100,231 |
| Expenses |
$857,739 |
$1,020,835 |
| Net Loss for Period |
$(110,340) |
$(780,219) |
| Net Profit (loss) (excl. Amort.) |
$30,606 |
$(593,138) |
| Common shares outstanding |
17,959,195 |
17,775,451 |
| Net Loss per com. Share |
$ (0.006) |
$(0.05) |
| Total Assets |
$24,098,363 |
$28,909,726 |
| Shareholder Equity |
$23,751,269 |
$28,485,163 |
* Loss per common share for the periods has been calculated using the weighted average number of common shares outstanding during the respective periods. Diluted net loss per common share is not presented, for the balance of the schedule as the effect of common share options would be anti-dilutive.
Financial Results
For the period ended March 31, 2010 (the “Period”) the Corporation had operating revenue of $611,568 (2009 – $100,231). Revenues arose primarily from engineering services and design projects in China and the United States. The increases in revenues in the first quarter are reflective of ground work laid during the prior year and the renewed world-wide interest in carbon related technologies.
The Corporation’s expenses for the Period were $857,739 as compared with $1,020,835 for the period March 31, 2009.
- Commercialization, product development and administrative expenses for the Period were $623,446 as compared to $827,638 for the previous year. The reduction in 2010 is primarily due to the securing of contracts and the recognition of cost associated with projects in “a work in progress” to better match revenue streams.
- Research and Development expenses for the Period were $93,347 as compared to $6,116 for the previous period. The increase in Research and Development expense is attributable to an increase in the number of HTC in house personal and contractors, engaged during the prior year, and the increased focus on product development, that does not yet meet the criteria for capitalization.
- Amortization expense for the period was $140,946 as compared with $187,081 for the previous period. A significant portion of expenses, in the amount of $124,940, represents amortization of intangibles associated with the acquisitions of subsidiaries. The remaining amortization is attributable to operating assets.
The Corporation had a loss of $229,292 from operations for the Period, as compared to a loss of $872,999 from operations for the same period of the prior year. The improvement in operations is primarily attributable to the increase in revenues generated during the Period ($511,337), combined with the recognition of work in progress ($297,816) which is due to the existence of ongoing projects in the first quarter and other variances in quarter operations as described above.
Net loss for the Period was $110,340. This compares to a loss of $780,219 in respect to the same period of the prior year, 2009. The improvement in income is primarily attributable to the increase in revenues as explained above. When amortization is removed, income before amortization, interest and tax is $30,606 for the period ending March 31, 2010 as compared to $593,138 for the period ending March 31, 2009.
Total assets for the Period were $24,098,363, as compared to $28,909,726 as at March 31, 2009. The decrease in total assets is largely attributable to the reduction in short term and cash positions to meet operational expenditure requirements, as well as the goodwill adjustment of $1,065,099 made during the 4th quarter of 2009 (this adjustment did not impact cash flow). Included in total assets for 2010 are short term investments totaling $5,747,274 in term deposits and accrued interest compared with $8,871,106 in the previous year.
Shareholders’ equity for the Period was $23,751,269 as compared to $28,485,163 as at March 31, 2009. Changes are due primarily to operating deficit for the Period, as well as the non cash flow related goodwill adjustment during the 4th quarter of 2009 off set by share issuances during 2009.
Financial results have been prepared in accordance with generally accepted accounting principals in Canada.
The information and opinions expressed herein involve known and unknown risks and uncertainties that may cause the Corporation’s actual results or outcomes to be materially different from those anticipated and discussed herein. In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in this news release, and in those other filings with the Corporations’ Canadian regulatory authorities as found in ‘www.SEDAR.com’. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels or activity, performance or achievements or other future events. We are under no duty to update any of our forward-looking statements after the date of this news release, other than as required and governed by law.
NEITHER THE 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 THE RELEASE.
For more information contact:
Jeff Allison,
HTC Purenergy
Telephone: (306) 352-6132
Fax: (306) 545-3262
E-mail: jallison@htcenergy.com
