Active Energy (AIM: AEG, OTCQB: ATGVF), the biomass-based renewable energy company focused on the production and development of next generation biomass products, today announces its audited results for the year ended 31 December 2023.
Operational Highlights:
· Early in 2023, our production and engineering partner Player Design Inc.("PDI") was awarded the requisite permits to complete a full-scale construction and the installation of the requisite equipment to allow first production at the Ashland Reference Facility in Maine.
· As the end of the calendar year approached, various deadlines and goals for production of fuel had not been achieved. PDI informed Active Energy that further delays in the commencement of production from the Reference Facility were inevitable and indicative production deadlines would extend further into H1 2024. Further, PDI indicated that it was unwilling to continue with the existing commercial terms between the parties and wished to terminate its relationship with Active Energy.
· Construction of the Reference Facility commenced mid-2023.
· Expansion of the Company's sales and engineering function in USA and Europe with the hiring of Steve Schaar (COO) and Barron Hewetson (CTO). Both had significant biomass industry expertise.
· During 2023, the intellectual property portfolio was extended with new patents granted in the US and Canada and relevant trademarks granted in North America and worldwide. Project delays were regularly notified to AEG from PDI ranging from design issues, component delivery delays and subsequent construction delays.
· Despite the delays AEG continued to secure future customer requests both in the US and internally to visit the site at the earliest opportunity.
Financial Highlights:
· Operating Loss for the year of US$15,517,696 (2022: US$1,343,745).
· Cash at bank as at 31 December 2023 US$319,137 (2022: US$2,614,472).
· Basic and diluted loss per share from continuing operations of $2.37 cents (2022: earnings per share of $0.69 cents).
Activities post the year end:
· PDI indicated that it was unwilling to continue with existing commercial terms and wanted to terminate its obligations toward AEG.
· An operational compromise could not be reached with PDI as PDI was unwilling to agree a workable formula for this, so a compromise agreement was agreed between the parties in February 2024 which saw $1.6m of cash returned to AEG
· With limited financial resources post the settlement with PDI, in April 2024 the company wound down its current business operations to examine alternative options to continue to monetise the CoalSwitch® IP in other forms.
· In October 2024 the Company raised £200,000 ($260,878) from Zen Ventures Limited through the issue of loan notes, of which £27,616 ($36,022) are convertible loan notes that will convert to new ordinary shares representing 29.9% of the Company's issued share capital on 31 December 2024 (subject to shareholder approval).
· On the 1st of November 2024 Jason Zimmerman and Max Aitken resigned as directors of the Company.
STRATEGIC REPORT
GROUP STRATEGY
Following the termination of the Group's relationship with Player Design, Inc the Group's strategy is now to realise the maximum value of the CoalSwitch® intellectual property. In light of this the board does not consider that the Group's existing KPIs have any continuing relevance. The Group's established KPIs for 2023 are summarised below and naturally, given the circumstances, none of these were met.
WHAT ARE THE COMPANY'S KEY PERFORMANCE INDICATORS?
· Establish production capacity through the commencement of the first CoalSwitch® production operations in Ashland Reference Plant.
· Replicate these production facilities and construct additional production facilities for CoalSwitch® at alternate sites in North America and internationally.
· Complete off-take agreements, through trial orders, with industrial partners, heating pellet suppliers or power generators in North America and the rest of the world.
· Establish feedstock supply agreements with established forestry product providers for the long-term supply of low-value residual and waste materials, which meet established sustainability criteria, to produce CoalSwitch®.
· Develop CoalSwitch® production technologies to further improve the fuel performance and introduce new production technologies to increase production efficiency and maximise economics.
· Increased shareholder returns.
HOW HAVE WE PERFORMED IN 2023?
· Working with our production partner PDI the focus was to establish an operation production platform for the first CoalSwitch® production at Ashland, Maine. PDI did complete some commercial milestones toward construction of the production facility during 2023, including acquiring permits to complete design work. However, many of the key agreed milestones were not achieved and constant delays caused additional financial and commercial pressures for AEG.
· While PDI focused on the production targets, AEG continued driving commercial leads and customer interest for CoalSwitch® fuel both in North America and internationally and continued to secure prospective customer orders for initial CoalSwitch® production volumes.
· During H1 2023 AEG invested in new management expertise with the hire of a COO & CTO based in the US, to complement the existing sales activities in the US and worldwide.
· During H2 2023 AEG expanded its territorial horizons, commencing sales activities in Southeast Asia to look for additional production and sales opportunities for CoalSwitch®.
· During H2 2023 AEG was awarded the relevant CoalSwitch® trademark patents for the EU. CoalSwitch® is now a registered and approved trademark in all territories including US, Canda, Europe (including the UK) and currently additional trademark applications have commenced throughout Asia and Japan.
