SHARC Energy Files Record Breaking Revenue and First Cash Flow Positive Quarter

Rhea-AI Summary

SHARC Energy (OTCQB: INTWF) reports record financial results for Q3 and YTD 2021. Q3 revenue reached $1.42M, a 234% increase from Q3 2020, marking the highest quarter ever. YTD revenue was $1.72M, up 190% year-over-year. The company achieved its first cash flow positive quarter with Adjusted EBITDA of $0.02M, a 106% improvement. However, Q3 and YTD losses were $0.41M and $2.27M respectively, due to prior debt settlement gains. The current working capital stands at $2.67M, providing operational continuity for the next year.

Positive

• Q3 2021 revenue of $1.42M up 234% YoY, highest quarterly revenue in history.
• YTD 2021 revenue of $1.72M up 190% YoY, highest YTD revenue to date.
• First cash flow positive quarter with Adjusted EBITDA of $0.02M.
• Sales Pipeline increased to $5.25M, up 39% from prior disclosure.

Negative

• Q3 2021 loss of $0.41M and YTD loss of $2.27M show financial stress despite revenue growth.
• Sales Order Backlog decreased by 44% from previous quarter disclosures.

VANCOUVER, British Columbia, Nov. 15, 2021 (GLOBE NEWSWIRE) -- SHARC International Systems Inc. (CSE: SHRC) (FSE: IWIA) (OTCQB: INTWF) ("SHARC Energy" or the “Company”) announces it has filed its financial results for the third quarter and the nine months ended September 30, 2021. All figures are in Canadian Dollars unless otherwise stated and in accordance with IFRS.

Third Quarter and Year to date Highlights:

• Revenue for the three months ended September 30, 2021 (“Q3 2021”) was $1.42M, representing an increase of 234% or 0.99M from the three months ended September 30, 2020 (“Q3 2020”). This is the largest revenue quarter in the Company’s history.
  
  
• Revenue for the nine months ended September 30, 2021 (“YTD 2021”) was $1.72M, representing an increase of 190% or $1.13M from the nine months ended September 30, 2020 (“YTD 2020”). This represents the largest revenue YTD period in the Company’s history.
  
  
• The Company achieved its first cash flow positive quarter in the Company’s history with an Adjusted EBITDA¹ of $0.02M in Q3 2021 which represents a 106% or $0.37M improvement over the Q3 2020 Adjusted EBITDA loss. The Company also reported Adjusted EBITDA loss of $1.07M in YTD 2021 compared to $1.31M in YTD 2020, representing an improvement of 19% or $0.24M from YTD 2020.
  
  
• As of November 15, 2021, the Company has Sales Pipeline² of $5.25M. This represents a 39% growth from previous disclosure on August 20, 2021. Furthermore, the Company has Sales Order Backlog³ of $1.59M, which represents a 44% decrease from previous disclosure on August 20, 2021.
  
  
• Loss for Q3 2021 and YTD 2021 was $0.41M and $2.27M, representing a decrease of $0.44M from Q3 2020 and an increase of $0.32M from YTD 2020. This increase in loss YTD 2021 compared to YTD 2020 is largely driven by a gain on settlement of debt reported in YTD 2020.                                                                          
  
  
• The Company has $2.67M of working capital as of September 30, 2021. Management anticipates it has sufficient working capital to maintain its activities for the subsequent 12 months.
  

¹ Adjusted EBITDA is a Non-IFRS measure. Please see discussion and reconciliation of Alternative Performance Measures and Non-IFRS measures in the Q3 2021 MD&A.
² Sales Pipeline is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the Q3 2021 MD&A.
³ Sales Order Backlog is a Non-IFRS measure. Please see discussion of Alternative Performance Measures and Non-IFRS Measures in the Q3 2021 MD&A.

YTD 2021 Highlights and Subsequent Events

• National Western Center. The National Western Center is pioneering the largest scale wastewater district-energy innovation in North America to date. The National Western Center will rely on two SHARC™ wastewater recovery systems placed in the heart of its 3.8-megawatt (MW) district energy system, creating a low-carbon campus that is sustainable and regenerative. The first phase of development is expected to recover the thermal energy from 3,000 gallons of wastewater every minute, preventing 2,600 metric tons of carbon dioxide annually from being emitted into the atmosphere.
  
  
• Congresswoman Marcy Kaptur visit to DC Water. U.S. House Representative Marcy Kaptur, Chairwoman of the House Appropriations Subcommittee on Energy and Water Development, toured the U.S. capital’s DC Water Headquarters (“DC Water HQ”) on March 9, 2021. “I have never seen a technology that could have as positive of an impact on energy as what I have seen at the DC Water HQ,” said Congresswoman Kaptur after her visit.
  
• WashOut Laundry Retrofit. The Company completed a retrofit installation of a PIRANHA T15 into WashOut Laundry, representing the first PIRANHA retrofit approved under the FortisBC Custom Performance Program. WashOut is projected to save over 2,100 gigajoules per year of natural gas, saving 105 tonnes of greenhouse gas emissions annually.

• ELLA. A 45-suite multi-family residential project in Vancouver, B.C. seeking to reduce its energy costs and carbon footprint, while future proofing against rising carbon tax, has installed a PIRANHA T10 HC. The unit is estimated to save the project 524 tonnes of CO₂ emissions reduction over its lifespan.
  
  
• Trico LivingWell. Calgary’s newest older adult community will be installing two PIRANHA T15’s in two thoughtfully-planned residences. The PIRANHA T15’s will reduce up to 100% of the CO₂ emissions involved in the hot water production for the residences. These two units represent the 2^nd and 3^rd installation of a PIRANHA system in Alberta.
  
• lelǝḿ. A 1,200 residential unit master planned development’s heating and cooling needs will be met by utilizing a SHARC Energy low-carbon wastewater energy exchange system as part of a centralized energy facility. The system is expected to ship and install in Q4 2021.
  
  
• $2.2 Million (M) raised through capital markets and security exercises. Since the beginning of 2021 to the date of the MD&A, the Company raised $0.45M (gross) through non-brokered equity and equity unit private placements, $1.43M through the exercise of stock options and warrants and 0.24M through the exercise of debenture warrants.
  
• Conversion of Convertible Debt Face Value of $1.59M. During YTD 2021 and subsequently to date, the Company has converted $1.59M of convertible debt.
  

“Q3 2021 marks a milestone quarter for the Company where we produced record quarterly and year to date revenues and our first breakeven Adjusted EBITDA quarter. Although it is anticipated that revenues and Adjusted EBITDA will fluctuate quarter over quarter, SHARC Energy’s Sales Order Backlog and Sales Order Pipeline continues to grow and has officially started turning over and hitting our Profit and Loss Statement with greater consistency. This is expected to continue into future quarters,” says Hanspaul Pannu, Chief Financial Officer of SHARC Energy.

“Our balance sheet remains healthy. Most of our diluted capital remains in the money, which provides opportunity for the improvement of working capital through capital injection or extinguishment of convertible debt. The Company is well-positioned to continue to grow its Sales Pipeline and its investment into Sales and Marketing while reviewing and applying for opportunities for private and public scale-up funding,” states Mr. Pannu.

“We have been working on a number of projects and strategic relationships during COVID-19 to present day and we feel confident the best is still to come. SHARC Energy is forging into the future with reliable solutions that will help world leaders achieve their climate action plans and address key objectives for a greener future. Our products not only help eliminate carbon emissions from space heating and hot water production, but also save fresh water used in cooling towers and helps reduce the ambient temperature of wastewater prior to discharge into Earth’s bodies of water,” says Lynn Mueller, Chief Executive Officer of SHARC Energy. “The world is becoming aware of the power of wastewater with each project using SHARC Energy technology and we standby ready to help the world achieve its climate action goals!”

For complete financial information for the third quarter and the nine months ended September 30, 2021, please see the Interim Financial Statements and Management Discussion and Analysis (“MD&A”) filed on SEDAR at www.sedar.com.

About SHARC Energy  

SHARC International Systems Inc. is a world leader in energy recovery from the wastewater we send down the drain every day. SHARC Energy’s systems recycle thermal energy from wastewater, generating one of the most energy efficient and economical systems for heating, cooling & hot water production for commercial, residential and industrial buildings.

SHARC Energy is publicly traded in Canada (CSE: SHRC), the United States (OTCQB: INTWF) and Germany (Frankfurt: IWIA) and you can find out more on our SEDAR profile.

Learn more about SHARC Energy: Website | Investor Page | LinkedIn | YouTube | PIRANHA

ON BEHALF OF THE BOARD

Lynn Mueller
Chairman and Chief Executive Officer

For investor inquiries, please contact:
Hanspaul Pannu
Chief Financial Officer
SHARC Energy
Telephone: (604) 475-7710 ext. 4
Email: hanspaul.pannu@sharcenergy.com

For media inquiries, please contact:
Mike Tanyi        
Director of Marketing and IT 
SHARC Energy
Telephone: (604) 475-7710 ext.109 
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. 

FAQ

What are SHARC Energy's Q3 2021 revenue results?

SHARC Energy reported Q3 2021 revenue of $1.42M, representing a 234% increase from Q3 2020.

What is the current working capital for SHARC Energy?

As of September 30, 2021, SHARC Energy has $2.67M in working capital.

Did SHARC Energy achieve a positive Adjusted EBITDA in Q3 2021?

Yes, SHARC Energy achieved its first cash flow positive quarter with an Adjusted EBITDA of $0.02M in Q3 2021.

What is the Sales Pipeline for SHARC Energy as of November 2021?

The Sales Pipeline for SHARC Energy stands at $5.25M, a 39% growth from August 2021.

How much was SHARC Energy's YTD loss for 2021?

SHARC Energy's YTD loss for 2021 was $2.27M.