Base Carbon Inc. (NEO: BCBN) (OTCQX: BCBNF) (“
Base
Carbon”, or the “
Company”) is pleased to
announce its year-end 2022 consolidated financial results and
operational highlights. All financial references are denominated in
U.S. dollars, unless otherwise noted.
Annual Corporate and Financial
Highlights as of December 31, 2022:
- Vietnam Household Devices Project:
Base Carbon, through its subsidiary, Base Carbon Capital Partners
Corp. (“BCCPC”), executed project agreements with
in-country partner Sustainability Investment Promotion and
Development Joint Stock Company (“SIPCO”) to fund
an expected $20.8 million related to the development of a cookstove
and water purifier carbon reduction project in Vietnam. Base Carbon
facilitated a project offtake agreement between Citigroup Global
Markets Limited (“Citigroup”) and SIPCO related to
the first phase of the project.
- Rwanda Cookstoves Project: Base
Carbon, through its subsidiary, BCCPC, executed an agreement with a
subsidiary of project partner DelAgua Group
(“DelAgua”) to fund $8.8 million towards the
purchase, distribution, and initial monitoring of 250,000
fuel-efficient cookstoves for a carbon reduction project in
Rwanda.
- Financial Resources: As of December
31, 2023, the Company had total assets of $44.1 million, including
$12.9 million in cash and cash equivalents, and $24.5 million in
investments into carbon credit projects.
- Blue Carbon Partnership with Danish
Red Cross: In Q4 2022, Base Carbon signed a letter of intent with
the Danish Red Cross to develop blue carbon projects in Southeast
Asia, with the scope including a potential mangrove carbon credit
removal project. An initial project in the Philippines is currently
in the evaluation phase and a key project consultant has been
engaged to provide mapping and scoping services.
- Public Listing on the NEO and OTCQX
Trading: On March 3, 2022, the Company commenced trading as a
public company on the NEO Exchange Inc. under the symbol “BCBN”,
and on August 22, 2022, commenced trading on the OTCQX Best Market
under the symbol “BCBNF”. The OTCQX Market is designed for
established, investor-focused U.S. and international
companies.
“2022 was transformational for Base Carbon where
we established a foundation to grow our business. During the year,
the company focused on developing Base as a public issuer and
executing investments from our pipeline of high-quality carbon
projects. From this pipeline we committed $29.7 million in capital
related to our carbon reduction projects in Rwanda and Vietnam,
with project partners DelAgua and SIPCO, respectively. In addition,
we announced our partnership with the Danish Red Cross with the
intention of developing mangrove-focused blue carbon removal
projects in Southeast Asia. As of today, we are fully distributed
on both household device projects in Rwanda and Vietnam, and we
anticipate first verifications and first carbon credit issuances in
mid-2023,” stated Michael Costa, Chief Executive Officer of Base
Carbon.
Project Updates and Other
Highlights:
Vietnam Household Devices Project
- Device Distribution and Project
Capital: Project partner SIPCO has completed the full distribution
of project devices, an aggregate of 1.214 million fuel-efficient
cookstoves and water purifiers, four months ahead of the initial
schedule and on budget. As of March 31, 2023, Base Carbon has
funded 90% of the committed project capital with remaining
commitments primarily tied to 2023 and 2024 project monitoring
activities.
- Registry Validation: Project
partner SIPCO re-registered the cookstoves portion of the project
under a new project ID #2923. The new Project Design Document (PDD)
was validated by the Validation and Verification Body
(“VVB”), and the project was subsequently
registered by Verra on November 25th, 2022. The Project ID for the
re-registered cookstove portion of the project can be found at VCS
(Verified Carbon Standard) 2923 and the Project ID for the water
purifier portion of the project can be found at VCS 2557.
- First Carbon Credit Issuance &
Citigroup Offtake: Initial carbon credits are anticipated to be
generated from the project in mid-2023, with Citigroup contracted
to purchase the first 7.4 million carbon credits generated from the
project.
Rwanda Cookstoves Project
- Device Distribution and Project
Capital: Project partner DelAgua has completed the full
distribution of 250,000 cookstoves, on schedule and on budget. As
of March 31, 2023, Base Carbon has funded 100% of the committed
project capital.
- First Carbon Credit Issuance: First
carbon credits are anticipated to be generated from the project in
mid-2023, and Base Carbon maintains a contractual preferential
share of the revenues anticipated from the first 2.2 million carbon
credits issued. The project design document for the Rwanda project
can be found at VCS 4150.
HCBL Operating Relationship
Base Carbon and Hardwick Climate Business
Limited (“HCBL”) have mutually agreed not to
complete the proposed 100% acquisition of HCBL by Base Carbon. Into
2023 and beyond, the Company and HCBL intend to continue
collaborating on the development of current projects in addition to
the prospective project pipeline. Base Carbon and HCBL are actively
working towards a restructured future operating relationship.
2022 Year-end Financial
Results
As of December 31, 2022, the Company had total
assets of $44.1 million, comprised of $12.9 million in cash and
cash equivalents, $0.1 million in prepaid and other assets, $24.5
million in investments in carbon credit projects, a $1.4 million
equity investment in ACX Holdings Ltd. (AirCarbon) and a $5.1
million investment in associate company HCBL. The Company had $0.2
million in accounts payable and accrued liabilities, comprising
total liabilities.
In Q4 2022, the Company incurred a net loss of
$8.1 million, of which $6.0 million was due to a non-cash
impairment loss related to the Company’s 49.9% ownership in
associate company HCBL. Other operating expenses in Q4 2022 were
attributable to consulting and professional fees, salaries and
wages, and share-based compensation. The Company’s revenue lines
are still being developed.
On June 17th, 2022, the Company implemented a
normal course issuer bid program (“NCIB”) to
repurchase Company Shares. As of March 24, 2023, the Company had
purchased 4,844,678 Company Shares for cancellation under the NCIB
resulting in outstanding Company Shares of 122,819,602.
About Base Carbon
Base Carbon provides capital, development
expertise and management operating resources to projects involved
in the voluntary carbon markets. The company seeks to be the
preferred carbon project partner in providing capital and
developmental resources to carbon projects globally and, where
appropriate, will endeavour to utilize technologies within the
evolving carbon industry to enhance efficiencies, commercial
credibility, and trading transparency. For more information, please
visit www.basecarbon.com.
Media and Investor
Inquiries
Base Carbon Inc.Investor RelationsTel: +1 647
952 3979E-mail: investorrelations@basecarbon.com
Media InquiriesE-mail: media@basecarbon.com
Michael Costa, Chief Executive Officer, and Ryan
Hornby, Chief Legal Officer are responsible for this press
release.
Cautionary Statement Regarding Forward
Looking Information
This press release contains “forward-looking
information” within the meaning of applicable securities laws with
respect of the Company, including but not limited to, statements
relating to the focus of Base Carbon’s business, the intention to
restructure its relationship and investments with HCBL, the
Company’s carbon reduction projects and financial results of the
Company. In some cases, but not necessarily in all cases,
forward-looking information may be identified by the use of
forward-looking terminology such as “expects”, “anticipates”,
“intends”, “contemplates”, “believes”, “projects”, “plans” or
variations of such words and similar expressions or state that
certain actions, events or results “may”, “could”, “would”,
“might”, “will” or “will be taken”, “occur” or “be achieved”. In
addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts but instead represent
management’s expectations, estimates and projections regarding
future events. Statements about, among other things, Base Carbon’s
strategic plans the intention to restructure its relationship and
investments with HCBL and details of development and revenue
generation timelines of current projects (including that the first
issuance of carbon credits associated with the Vietnam project and
the Rwanda project is anticipated mid-2023) are all forward-looking
information. These statements should not be read as guarantees of
future performance, results, or achievements.
Although management believes that the
anticipated future results, performance or achievements expressed
or implied by the forward-looking information are based upon
reasonable assumptions and expectations, readers should not place
undue reliance on forward-looking information because it involves
assumptions, known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements to differ materially from anticipated future results,
performance or achievements expressed or implied by such
forward-looking information.
In respect of the Company’s carbon credit
projects, the Rwanda project and the Vietnam project, certain
factors that influence successfully meeting the anticipated first
issuance of carbon credits associated with such projects in
mid-2023 include, among other things: (i) the Company has retained
industry leading experts/consultants/advisors to assist with the
planning and execution of such projects, (ii) the timelines for
execution of the development of the Rwanda project and the Vietnam
project has to date been in line with (or accelerated from) initial
expectations, and (iii) the Company has sufficient funds on hand to
complete the execution of its milestones stated herein for the
Rwanda project and the Vietnam project.
In respect of the Company’s carbon credit
projects, the Rwanda project and the Vietnam project, certain
assumptions that influence successfully meeting the anticipated
first issuance of carbon credits associated with such projects in
mid-2023 include, among other things: (i) the Company’s project
partners satisfy their obligations as expected by the Company and
on expected timelines, (ii) the household participants in the
projects utilize the Devices supplied to them in accordance with
the expectations under the projects, (iii) the validation process
in respect of the Rwanda project, being undertaken with Verra, the
organization that has been appointed as the carbon credit registry
for such project, occurs mid-2023, (iv) the completion and
submission to Verra of the initial project monitoring reports
prepared by the project Validation and Verification Body (“VVB”)
occurs mid-2023, and (v) the initial acceptance of the verification
by Verra of the performance of the projects set out in the VVB
reports against the project methodology in order to enable the
first issuance of the resulting carbon credits occurs mid-2023,
which timeline is reflective of the Company’s observation of
Verra’s current timeline for the verification of similar carbon
reduction projects being undertaken by other parties.
The evaluation and negotiation by the Company of
new additional projects described herein is in respect of potential
opportunities which are non-binding proposals only and which are
subject to due diligence and/or negotiation of definitive
documentation by the Company as of the date of this press release.
Readers are cautioned that there can be no assurance that the
Company will be able to enter into definitive agreements for, or
otherwise proceed with or realize upon, such potential
opportunities on a timely basis or at all, nor that the nature and
scope of such potential opportunities will ultimately be as
described herein or as to the extent of any financial, operational
or other benefits which may be realized by the Company in
proceeding with such potential opportunities. Potential projects
may be removed from the Company’s pipeline from time to time or at
any time as a result of, among other things, unsatisfactory results
from the Company’s due diligence or negotiation of terms and
conditions in respect of such potential projects.
The forward-looking statements made herein are
subject to a variety of risk factors and uncertainties, many of
which are beyond the Company’s control, which could cause actual
events or results to differ materially and adversely from those
reflected in the forward-looking statements. Readers are cautioned
that forward-looking statements are not guarantees of future
performance. Specific reference is made to the most recent Annual
Information Form on file with the Canadian provincial securities
regulatory authorities (and available on www.sedar.com) for a more
detailed discussion of some of the factors underlying
forward-looking statements and the risks that may affect the
Company’s ability to achieve the expectations set forth in the
forward-looking statements contained in this press release.
Should one or more of the risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual events or results may vary materially and
adversely from those described in the forward-looking information.
The forward-looking information contained in this press release is
provided as of the date of this press release, and the Company
expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or
assumptions underlying them, whether as a result of new
information, future events or otherwise, except as required by
law.
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