MONTREAL, March 4, 2015 /CNW Telbec/ - PyroGenesis
Canada Inc. (http://pyrogenesis.com) (TSXV: PYR.V), a TSX
Venture 50® clean-tech company (the "Company" or "PyroGenesis")
that designs, develops, manufactures and commercializes plasma
waste-to-energy systems and plasma torch products, announced today
that it has signed an exclusive marketing license agreement (the
"License") with a large Asian clean-tech project developer with
whom the company has been working closely with for over 3 years
(the "Licensee"). The terms of the License allow the Licensee to
market PyroGenesis' line of plasma waste processing systems in the
Licensee's country of origin for a period of five (5) years with an
automatic five (5) year renewal based on certain performance
milestones. The name of the Licensee and the country wherein
exclusivity is given will remain confidential for competitive
reasons; however, for clarity, Management notes that the country in
question is highly industrialized, and that it is not China.
"We have been working with this Licensee on a non-exclusive
basis for several years now, during which time they have been
aggressively promoting our product lines, particularly our
environmental offerings," said P. Peter
Pascali, President and CEO of PyroGenesis. "We were asked by
the Licensee last fall to attend and support a large business
development effort, which we did, and this was the culmination of
many years of strategic marketing. PyroGenesis has been
highly focused over the past several months to conclude the
transaction which we announced today; it is truly a watershed
moment for the Company."
The original draft of this License called for the payment of
$1.5MM paid over two months in
consideration of the right to exclusivity. This was recently
changed by the Licensee to: i) a non-refundable payment of
$250,000 over the next two (2) weeks;
and ii) a further payment of $250,000
within six (6) weeks, together with a signed order for six (6) 50
TPD waste treatment systems (the "Systems"). These Systems, wherein
PyroGenesis uses high-temperature and highly-reactive plasma to
destroy a wide range of municipal, hazardous, biomedical and other
high-value wastes, often to recover both energy and other useful
by-products, typically sell for $20-30 MM, each depending on the features
requested (such as energy recover for example) and/or the waste
stream being processed.
Mr. P. Peter Pascali provides
information about the transaction and its impact on the Company in
the following Q&A format:
How is it that we have never heard of this opportunity before
now?
We at PyroGenesis are extremely sensitive to not raise
expectations unduly. We are currently involved in several
very interesting business development strategies, this being one of
them, but given the nature of business development, its propensity
for being high risk, and the possibility of frequent delays, we
have taken the more conservative approach to make an announcement
only once we are highly confident in the underlying news.
The first payment of $250,000 is
non-refundable; does that mean that if the second payment is not
made and/or the signed order not received, that the first payment
is kept by PyroGenesis and there is no exclusivity provided?
Yes, that is correct. This is the very reason why we felt it
necessary to press release now. We are highly confident that the
terms will be met by our customer and given that others outside
PyroGenesis' control are cognizant of the details of the
arrangement, we felt it prudent to announce the transaction
at this time.
Are there any other sales being discussed with this
Licensee?
Yes indeed there are. We are discussing sales in terms of
"groupings" of products. For instance, the announcement today
envisions the purchase of a grouping of six (6) 50 TPD waste
treatment systems however we are currently in discussions for
further sales of two other groupings: one consisting of
hospital/low level radioactive waste with a value of approximately
$30MM and a second for 64 small transportable mobile systems
totalling over $107MM. We don't expect either of these contracts to
close before Q4-2015 however we are highly confident that both will
close in some form.
Why not disclose the Licensee's name or country of origin?
As you may have noticed from our previous press releases, we
seldom release our clients' or customer's particulars. A notable
exception is the work we do on behalf of the U.S. Navy, where we
have been specified in the design of the new aircraft carriers with
that design being frozen for the foreseeable future. We view our
clients' and customers' particulars as being a valuable part of our
"know-how"; our business development know-how, but our know-how
nevertheless. We see no business value in disclosing this
information. In fact, we believe we are protecting shareholder
value by not disclosing who our clients and customers are until we
have created serious barriers to entry within that industry.
We take great efforts to ensure the public is aware that in all our
major lines of effort we are dealing with "major players".
Is PyroGenesis product-line focused?
Yes, PyroGenesis is extremely focused. We provide
plasma based systems, and plasma based systems alone, to niche
markets. If we were selling tires we would be selling them to
bikes, cars, trucks and buses; we would not be involved in braking
systems, upholstery or exhaust systems – we would only be selling
tires. Similarly, we sell plasma based systems and nothing
else, thereby remaining extremely focused on our
product-lines.
Do you have the manufacturing capacity to complete these
orders?
We would be remiss if we lead you to believe that everything
is in place to handle the contract announced today, or the
additional business under discussion; nor should it be under the
circumstances. The Company is currently reviewing all options
including acquiring manufacturing capabilities to efficiently carry
out these orders.
Separately, PyroGenesis has ensured that the License being
negotiated allows it ample time to rollout these systems. Of note
is that the six (6) Systems are essentially all the same design,
which puts significantly less pressure on execution.
Is there an R&D component associated with these six (6) 50
TPD Systems?
We do not have a 50 TPD system that we can point to as an
example of a working system but the Company's governing principles
and techniques were proven out in the 10 TPD municipal waste
processing system developed, and accepted by, the U.S. Special
Forces. A system with a 50 TPD capacity is well within
PyroGenesis' comfort zone. In fact, with certain caveats,
PyroGenesis is comfortable in manufacturing systems up to 100
TPD.
Besides manufacturing capabilities, do you foresee any other
challenges with executing these orders?
In the past, PyroGenesis structured all of its transactions
on a cash flow positive basis out of necessity however the Company
has reached a point in its development where it can significantly
increase revenues by entering into, and financing, letters of
credit. This transaction has highlighted the need to master
such a financing strategy, which is both common and readily
available in the marketplace.
"We are extremely excited about the prospects this transaction
brings with it," said P. Peter
Pascali, "but we remain cautious. We remain cognisant of the
fact that we are not yet cash flow positive and that cash
management is still critical to the Company. However, this
transaction underscores the success we are having in executing our
strategic plan to diversify away from being an environmental
Company with significant exposure to the US military, to one
providing unique plasma processes to niche markets."
About PyroGenesis Canada Inc.
PyroGenesis Canada, a TSX Venture 50® clean-tech company, is the
world leader in the design, development, manufacturing and
commercialization of advanced plasma processes. We provide
engineering and manufacturing expertise, cutting-edge contract
research, as well as turnkey process equipment packages to the
defense, metallurgical, mining, advanced materials (including 3D
printing), oil & gas, and environmental industries. With a team
of experienced PyroClassTM engineers, scientists and
technicians working out of our Montreal office and our 3,800 m2 production
facility, PyroGenesis maintains its competitive advantage by
remaining at the forefront of technology development and
commercialization. Our core competencies allow PyroGenesis to lead
the way in providing innovative plasma torches, plasma waste
processes, high-temperature metallurgical processes, and
engineering services to the global marketplace. Our operations are
ISO 9001:2008 certified, and have been since 1997. PyroGenesis is a
publicly-traded Canadian company on the TSX Venture Exchange
(Ticker Symbol PYR.V). For more information, please visit
www.pyrogenesis.com
This press release contains certain forward-looking
statements, including, without limitation, statements containing
the words "may", "plan", "will", "estimate", "continue",
"anticipate", "intend", "expect", "in the process" and other
similar expressions which constitute "forward-looking information"
within the meaning of applicable securities laws. Forward-looking
statements reflect the Company's current expectation and
assumptions, and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those
anticipated. These forward-looking statements involve risks and
uncertainties including, but not limited to, our expectations
regarding the acceptance of our products by the market, our
strategy to develop new products and enhance the capabilities of
existing products, our strategy with respect to research and
development, the impact of competitive products and pricing, new
product development, and uncertainties related to the regulatory
approval process. Such statements reflect the current views of the
Company with respect to future events and are subject to certain
risks and uncertainties and other risks detailed from time-to-time
in the Company's ongoing filings with the securities regulatory
authorities, which filings can be found at
www.sedar.com. Actual results, events, and performance
may differ materially. Readers are cautioned not to place undue
reliance on these forward-looking statements. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements either as a result of new information,
future events or otherwise, except as required by applicable
securities laws.
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 this release.
SOURCE PyroGenesis Canada Inc.