Acceleware Ltd. Reports Third Quarter 2021 Financial and Operating Results

November 25, 2021November 25, 2021 by DonnaEast 0 Comments

Products You May Like

Writer of the article:

GlobeNewswire

Publishing date:

Nov 24, 2021 • 5 minutes in the past • 16 minute learn • Join the conversation

CALGARY, Alberta, Nov. 24, 2021 (GLOBE NEWSWIRE) — Acceleware® Ltd. (“Acceleware” or the “Firm”) (TSX-V: AXE), a number one developer of applied sciences focusing on low-cost and clear extraction of heavy oil and bitumen, at present introduced its monetary and working outcomes for the 9 months ended September 30, 2021 (all figures are in Canadian {dollars} until in any other case famous). Acceleware’s third quarter outcomes mirror contributions from the Firm’s two enterprise models, comprised of radio frequency heating know-how (“RF Heating”), which helps a cheap and environmentally pleasant various to steam assisted gravity drainage (“SAGD”) for the extraction of heavy oil and bitumen via its proprietary RF XL heating know-how, together with high-performance scientific computing purposes (“HPC”). This information launch needs to be learn along with the Firm’s unaudited interim condensed monetary statements and the accompanying notes for the 9 months ended September 30, 2021, and administration’s dialogue and evaluation (“MD&A”) thereto, along with the audited monetary statements for the 12 months ended December 31, 2020, notes and MD&A thereto, all of which can be found on Acceleware’s web site at www.acceleware.com or on SEDAR at www.sedar.com .

Story continues under

This commercial has not loaded but, however your article continues under.

HIGHLIGHTS

Acceleware achieved a serious milestone within the execution of the commercial-scale RF XL pilot mission at Marwayne, Alberta (the “RF XL Pilot”) by kicking off the drilling and completions program in the course of the quarter. The RF XL Pilot is the ultimate step earlier than commercialization of the Firm’s patent-protected Clear Tech Inverter (“CTI”), a novel electrification “engine” for industrial heating, first utilized within the extraction of heavy oil and oil sands. Acceleware believes the CTI can economically decarbonize many trade verticals via electrification with rapid utility within the clear power transition. Performance of the CTI has already been proved via scaled discipline checks carried out in 2019 and 2020, and when mixed with current heating techniques and an instantaneous urge for food inside trade to undertake a clear know-how, can facilitate an financial decarbonization technique for a lot of organizations.

Story continues under

This commercial has not loaded but, however your article continues under.

Along with the continued actions for the drilling and completions program, the Firm achieved the next highlights within the final twelve months:

CEO, Geoff Clark, acquired Canada’s Clear-50 Award;
A 3rd main oil sands producer signed-on as a consortium member of the RF XL Pilot and dedicated as much as $2 million in funding and technical experience;
Jim Boucher was elected to the board of administrators;
Alberta Innovates granted new funding of $5 million for the RF XL Pilot at our website within the Chilly Lake Oil Sands area close to the city of Marwayne, Alberta;
A second main oil sands producer dedicated as much as $2 million in funding to help of the RF XL Pilot;
The Acceleware | Kisâstwêw restricted partnership with the Saa Dene Group was established;
Acceleware was granted a key RF XL patent in the USA; and
The Firm accomplished a profitable full-power take a look at of two modules, or 500 kW, of the CTI prototype.

Story continues under

This commercial has not loaded but, however your article continues under.

The RF XL Pilot is absolutely funded primarily based on present value estimates, which vary between $16 and $20 million. As of September 30, 2021, whole direct funding dedicated to the RF XL Pilot included $5 million from Alberta Innovates, $5.5 million from Sustainable Improvement Expertise Canada (“SDTC”), $5 million from Emissions Discount Alberta (“ERA”), and $6 million from three main oil sands producers.

All three consortium members of the RF XL Pilot have dedicated as much as $2 million in funding and technical experience. In change for this funding, Acceleware will present unique entry to detailed technical knowledge and take a look at outcomes, prioritized rights to host a subsequent take a look at, most popular pricing on pre-commercial merchandise and most popular entry to RF XL merchandise. Acceleware’s three oil sands companions now signify effectively over a million barrels of oil sands and heavy oil manufacturing per day and a dedication of as much as $6 million of funding.

Story continues under

This commercial has not loaded but, however your article continues under.

Undertaking Replace: As famous above, the RF XL Pilot is progressing via the drilling and completion stage. The producer effectively was efficiently drilled and accomplished as of September 30, 2021. The reservoir characterization seems consistent with expectations and there have been no main points encountered whereas drilling the producer effectively. The floor and intermediate sections of the heater effectively had been additionally full as of September 30, 2021.

Horizontal drilling of the heating effectively was paused by Acceleware in September 2021 resulting from manufacturing timing for a number of remaining elements and the dearth of rig availability. Drilling re-commenced in early November 2021 and each the producer and heating wells have been drilled with casing and manufacturing liner put in within the producer effectively and RF XL transmission strains put in within the heating effectively. The drilling rig has been launched and a service rig will end the remaining completion duties close to the tip of November akin to working inside electrical strains within the heating effectively and manufacturing string within the producer effectively. The constructing containing the CTI (“E-house”) and associated electrical tools, was within the remaining phases of development as of September 30, 2021 and as of the date of the MD&A is able to transfer to Marwayne, Alberta.

Story continues under

This commercial has not loaded but, however your article continues under.

Barring delays that would not have been moderately foreseen, floor development and facility set up on the website is scheduled to be accomplished by, or shortly after, the tip of This autumn 2021, with power-up and heating commencing shortly thereafter. Whereas the preliminary heating section is deliberate for about six months, this era could also be prolonged to permit Acceleware to seize further info on the effectivity and operation of the know-how.

Acceleware additionally continues to concentrate on driving exterior consciousness of the Firm and on positioning its RF Heating know-how extra prominently inside each the oil and gasoline and clean-tech communities. A number of new weblog posts and movies have been launched by way of social media not too long ago which characteristic discussions on the RF Heating know-how by Acceleware’s engineering workforce. The gathering of movies is accessible for viewing right here: Acceleware Vlog Posts .

Story continues under

This commercial has not loaded but, however your article continues under.

FINANCIAL SUMMARY

R&D spending has elevated considerably, in lockstep with progress in direction of completion of the drilling program and the acquisition and manufacture of floor and sub-surface tools. Cumulative RF XL Pilot bills as at September 30, 2021 had been roughly $15.2 million (December 31, 2020 – $7.6 million). The remaining money dedicated however not but acquired from SDTC, ERA and Alberta Innovates, together with holdbacks receivable was $5.6 million as at September 30, 2021 (December 31, 2020 – $4.2 million) and quantities dedicated however not but acquired from three main oil-sands producers was $3.2 million as at September 30, 2021 (December 31, 2020 – $3.2 million).

QUARTER IN REVIEW

Income of $0.3 million was generated within the three months ended September 30, 2021 (“Q3 2021”) in comparison with $0.1 million within the three months ended September 30, 2020 (“Q3 2020”). Income of $0.1 million was generated within the earlier quarter ended June 30, 2021 (“Q2 2021”). Income is attributable to software program, upkeep and providers with the most important quantity attributable to software program. The rise in Q3 2021 in contrast with Q3 2020 and Q2 2021 is attributable to a big contract within the HPC phase and gross sales of RF simulation providers throughout the RF Heating phase.

Story continues under

This commercial has not loaded but, however your article continues under.

Whole complete loss for Q3 2021 was $1.1 million in comparison with a complete lack of $0.5 million for Q3 2020 and a complete lack of $0.7 million for Q2 2021. The upper complete loss in Q3 2021 in comparison with Q3 2020 and Q2 2021 is because of a rise in spending for R&D in Q3 2021.

Gross R&D bills incurred in Q3 2021 had been $4.0 million in comparison with gross R&D bills in Q3 2020 of $0.5 million and $1.8 million in Q2 2021. The rise in Q3 2021 and Q2 2021 over Q3 2020 is because of vital funding within the RF XL Pilot actions in 2021. Throughout Q3 2021, a good portion of the drilling exercise was accomplished, and the vast majority of floor and sub-surface tools was acquired and accomplished. Federal and provincial authorities help of $3.0 million was acknowledged in Q3 2021 in comparison with $0.3 million in Q3 2020 and $1.4 million in Q2 2021, offsetting gross analysis and improvement prices.

Story continues under

This commercial has not loaded but, however your article continues under.

Normal and administrative (“G&A”) bills incurred in Q3 2021 had been much like these in different durations, at $0.4 million in comparison with $0.4 million in Q3 2020 and $0.4 million in Q2 2021. The Firm continues to prioritize value management given unsure financial situations and to learn from the CEWS authorities subsidy program.

YEAR TO DATE IN REVIEW

There was $0.7 million generated from the Firm’s software program, upkeep and providers income streams for the 9 months ended September 30, 2021 in comparison with $0.8 million for the 9 months ended September 30, 2020. The decrease income within the 9 months ended September 30, 2021 in comparison with the 9 months ended September 30, 2020 is because of recognition of a big HPC contract in 2020. Along with acknowledged income, Acceleware has additionally acquired non-refundable milestone money funds of $1.9 million for the 9 months ended September 30, 2021 (9 months ended September 30, 2020 – $0.3 million) that are recorded in deferred income. Information income equal to the quantity recorded in deferred income will probably be acknowledged as income on the finish of the RF XL Pilot or when the info contracts are terminated, whichever is earlier. Whole deferred income recorded on the assertion of monetary place as at September 30, 2021 is $2.65 million (December 31, 2020 – $0.75 million).

Story continues under

This commercial has not loaded but, however your article continues under.

Whole complete loss for the 9 months ended September 30, 2021 was $2.3 million in comparison with $1.1 million for the 9 months ended September 30, 2020 resulting from larger R&D spending for the RF XL Pilot.

Gross R&D bills for the 9 months ended September 30, 2021 had been $7.4 million in comparison with $1.7 million incurred in the course of the 9 months ended September 30, 2020 resulting from elevated R&D exercise famous above. Federal and provincial authorities help of $5.8 million was acknowledged within the 9 months ended September 30, 2021 in comparison with $1.0 million for the 9 months ended September 30, 2020.

G&A bills incurred in the course of the 9 months ended September 30, 2021 had been $1.2 million in comparison with $1.3 million for the 9 months ended September 30, 2020 a lower of $0.1 million due primarily to decrease payroll {and professional} prices. The Firm continues to prioritize value administration.

Story continues under

This commercial has not loaded but, however your article continues under.

As at September 30, 2021, Acceleware had constructive working capital of $0.2 million (December 31, 2020 – constructive working capital of $0.03 million) together with money and money equivalents of $3.4 million (December 31, 2020 – $1.9 million). The rise in working capital and money is attributable to timing of receipt of funding and R&D spending for the RF XL Pilot. Rising the deficit is deferred income of $2,650,000 as at September 30, 2021 (December 31, 2020 – $750,000). Regardless of receiving non-refundable money funds for these quantities, the milestone funds haven’t met all necessities for income recognition beneath IFRS 15 Income from Contracts with Clients. These quantities will probably be acknowledged as income and enhance shareholders’ fairness when RF XL Pilot heating is full or the info income contracts are terminated, whichever is earlier.

Story continues under

This commercial has not loaded but, however your article continues under.

Within the pursuits of matching money necessities with a mixture of money generated from operations, exterior funding, and capital elevating actions, the Firm actively manages its money move and investments in new merchandise. Acceleware intends to maximise money generated from operations via a number of initiatives which embody persevering with to concentrate on larger gross margin software program merchandise which can be marketed via a mixture of direct and reseller fashions; minimizing working bills the place potential; and limiting capital expenditures. Because the Firm continues to develop its RF Heating know-how, new R&D investments will probably be financed via a mixture of inside money move from the HPC enterprise, mission funding agreements, authorities help and exterior financing, when obtainable.*

Story continues under

This commercial has not loaded but, however your article continues under.

^* this paragraph accommodates ahead wanting info. Please discuss with “Ahead Wanting Statements” and “Danger Elements and Uncertainties” for a dialogue of the dangers and uncertainties associated to such info.

RF HEATING BUSINESS SEGMENT SUMMARY

RF XL is Acceleware’s patented and patent-pending RF Heating know-how, designed to enhance the extraction of heavy oil and bitumen, with a value efficient and environmentally pleasant various to SAGD. When utilized, RF XL has the potential to scale back each capital and working prices, whereas providing vital environmental advantages, together with:

rapid GHG emission reductions;
a considerable lower in land use;
the elimination of exterior water use;
no requirement for solvents; and
substantial elimination of water therapy services and no want for tailings ponds.

Story continues under

This commercial has not loaded but, however your article continues under.

The Firm believes that its RF XL heating know-how, as an electrically-driven course of, can present a transparent pathway to zero-GHG manufacturing of heavy oil and oil sands and supply optimum alignment with trade and authorities targets to acknowledge innovation as a significant resolution within the oil and gasoline trade’s general emission discount plans.

RF Heating Outcomes Abstract

RF Heating income was $55,000 in Q3 2021 in comparison with $nil in Q3 2020 and $nil in Q2 2021 resulting from gross sales of RF simulation providers, a comparatively new income stream attributable to prospects’ curiosity in making use of RF XL to particular reservoirs and operations. Since 2018, the Firm has been profitable promoting knowledge income agreements to main oil sands producers which give the shopper with the fitting to entry and use knowledge obtained from the RF XL Pilot. Beneath IFRS 15 Income from Contracts with Clients, these contracts don’t meet all necessities for income recognition over-time, due to this fact income recognition defaults to the tip of the contract. As at September 30, 2021, deferred income of $2,650,000 (December 31, 2020 – $750,000) has been recorded beneath these contracts for quantities which were acquired in money, and will probably be acknowledged as income as soon as heating is full or the contracts are terminated, whichever is earlier.
RF Heating bills for the three months ended September 30, 2021, had been $1,310,076 or 177% larger than in Q3 2020 and 94% larger than in Q2 2021. R&D bills had been larger in comparison with each Q3 2020 and Q2 2021 resulting from larger contractor and supplies prices associated to the considerably elevated exercise for the RF XL Pilot for drilling and completion work. Throughout Q3, the Firm accomplished manufacturing and meeting of the RF XL Pilot E-house together with set up of the CTI prototype and ancillary tools, ready downhole and floor tools for set up, and efficiently accomplished the vast majority of the effectively drilling and completion program. G&A bills had been larger in comparison with Q3 2020 and Q2 2021 resulting from an elevated stage of exercise on RF Heating as in comparison with HPC.
RF Heating income was larger within the 9 months ended September 30, 2021 at $140,000 in comparison with $nil within the 9 months ended September 30, 2020, pushed by larger software program income from the sale in Q1 2021 of the Firm’s AxHEAT RF heating simulation software program to a serious oil sands producer in reference to a knowledge income settlement and resulting from larger providers income for gross sales of simulation providers.
RF Heating bills elevated 76% to $2,604,071 within the 9 months ended September 30, 2021 in comparison with $1,477,895 for the 9 months ended September 30, 2020 due to an 212% enhance in R&D bills for elevated exercise on the RF XL Pilot as famous above. G&A bills for the 9 months ended September 30, 2021 decreased 4% in comparison with 9 months ended September 30, 2020 resulting from decrease payroll associated prices.

Story continues under

This commercial has not loaded but, however your article continues under.

HIGH-PERFORMANCE COMPUTING BUSINESS SEGMENT SUMMARY

Acceleware’s HPC enterprise phase helps prospects meet their oil and gasoline exploration wants with seismic imaging software program that gives essentially the most correct and superior imaging obtainable for oil exploration in complicated geological zones and formations. Whereas the Firm is specializing in power markets, it continues to develop and promote its electro-magnetic (“EM”) simulation software program FDTD (or finite distinction time area) resolution, AxFDTD, to finish customers primarily via unbiased software program distributors which have built-in Acceleware’s resolution into their software program structure.

HPC Outcomes Abstract

HPC income elevated to $242,226 in Q3 2021 from $130,219 in Q3 2020 and $97,408 in Q2 2021 due primarily to larger software program income. As a result of 2018 change within the software program income mannequin, the Firm now expects fewer general gross sales transactions with larger general income per transaction, which might probably result in elevated volatility in quarterly income. This was evident in Q3 2021 as income fluctuated relative to Q3 2020 and Q2 2021.
HPC bills for the three months ended September 30, 2021 had been $96,414 or 36% decrease than in Q3 2020 and 19% decrease than in Q2 2021. Value of income in Q2 2021 associated to software program gross sales acknowledged in Q2 2021 with no related gross sales in both Q3 2021 or Q3 2020. G&A bills had been decrease in comparison with each Q3 2020 and Q2 2021 resulting from decrease payroll and payroll associated bills. R&D bills had been minimal in Q3 2021 and decrease than in Q3 2020 and Q2 2021 because the Firm focuses the vast majority of all R&D on the RF XL Pilot.
HPC income was $525,740 within the 9 months ended September 30, 2021, a lower of 36% in comparison with $824,935 within the 9 months ended September 30, 2020 as a result of above-mentioned 2020 income contract partially offset by elevated demand for software program within the oil and gasoline sector in early 2021.
HPC bills had been $359,356 within the 9 months ended September 30, 2021 a lower of 31% in comparison with $518,809 within the 9 months ended September 30, 2020 because the Firm continues to focus the vast majority of sources on the RF XL Pilot.

Story continues under

This commercial has not loaded but, however your article continues under.

ABOUT ACCELEWARE:

Acceleware (www.acceleware.com) is an innovator of clean-tech oil and gasoline applied sciences comprised of two enterprise models: Radio Frequency (RF) Enhanced Oil Restoration and Seismic Imaging Software program.

Acceleware is growing RF XL, its patented, low-cost, low-carbon manufacturing know-how for heavy oil and oil sands that’s materially completely different from any heavy oil restoration method used at present. Acceleware’s imaginative and prescient is that electrification of heavy oil and oil sands manufacturing could be made potential via RF XL, supporting a transition to a lot cleaner power manufacturing that may shortly bend the emissions curve downward. Additional, Acceleware’s RF XL know-how might be a key element of an end-to-end built-in carbon administration system that may eradicate greenhouse gasoline (GHG) emissions related to heavy oil and oil sands manufacturing, whether or not for fossil fuels, or for future clear bitumen by-products akin to petrochemicals, carbon fibre, and blue or inexperienced hydrogen manufacturing. RF XL makes use of no water, requires no solvent, has a small bodily footprint, could be redeployed from website to website, and could be utilized to a mess of reservoir sorts. In shallow oil sands implementations, no tailings ponds will probably be required.

Story continues under

This commercial has not loaded but, however your article continues under.

Acceleware has partnered with Saa Dene Group (co-founded by Jim Boucher) to create Acceleware | Kisâstwêw to boost the profile, adoption, and worth of Acceleware applied sciences. The shared imaginative and prescient of the partnership is to enhance the environmental and financial efficiency of the power sector by supporting beliefs which can be essential to Indigenous peoples, together with respect for land, water, and clear air.

The Firm’s seismic imaging software program options are state-of-the-art for top constancy imaging, offering essentially the most correct and superior imaging obtainable for oil exploration in complicated geologies. Acceleware is a public firm listed on Canada’s TSX Enterprise Trade beneath the buying and selling image “AXE”.

Story continues under

This commercial has not loaded but, however your article continues under.

NOTE REGARDING FORWARD-LOOKING INFORMATION AND OTHER ADVISORIES

This information launch accommodates “forward-looking info” throughout the which means of Canadian securities laws. Ahead-looking info typically means details about an issuer’s enterprise, capital, or operations which can be potential in nature, and consists of disclosure in regards to the issuer’s potential monetary efficiency or monetary place.

The forward-looking info on this press launch could be recognized by phrases akin to “believes”, “estimates”, “plans”, “potential”, and “will”, and consists of details about the anticipated value of the RF XL pilot at Marwayne, t he timing of the execution of the Pilot, and the anticipated advantages of the RF XL know-how. Acceleware assumes that present value estimates are correct, present timelines is not going to be delayed by both inside or exterior causes, that analysis and improvement effort together with the commercial-scale take a look at plans will lead to commercial-ready merchandise, and that future capital elevating efforts will probably be profitable.

Story continues under

This commercial has not loaded but, however your article continues under.

Precise outcomes might differ from the forward-looking info on this press launch resulting from sure materials threat elements. These threat elements are described intimately in Acceleware’s steady disclosure paperwork, that are filed on SEDAR at www.sedar.com.

Acceleware assumes no obligation to replace or revise the forward-looking info on this press launch, until it’s required to take action beneath Canadian securities laws.

This information launch doesn’t represent a proposal to promote or a solicitation of a proposal to purchase any of the securities described on this launch in the USA. The securities haven’t been and won’t be registered beneath the USA Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities legal guidelines and is probably not provided or offered inside the USA or to U.S. individuals until registered beneath the U.S. Securities Act and relevant state securities legal guidelines or an exemption from such registration is accessible.

DISCLAIMER

Neither the TSX Enterprise Trade nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Trade) accepts accountability for the adequacy or accuracy of this launch.

For extra info:
Geoff Clark
Tel: +1 (403) 249-9099
geoff.clark@acceleware.com

Acceleware Ltd.
435 10 ^th Avenue SE
Calgary, AB, T2G 0W3
Canada
Tel: +1 (403) 249-9099
www.acceleware.com

Products You May Like