BioteQ Environmental Technologies Inc.
TSX VENTURE : BQE

BioteQ Environmental Technologies Inc.

March 23, 2007 08:30 ET

BioteQ Issues Fourth Quarter and Fiscal 2006 Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 23, 2007) - BioteQ Environmental Technologies Inc. (TSX VENTURE:BQE), a leading company in the treatment of acid contaminated water, today announced consolidated financial results for the fourth quarter and fiscal year ended December 31, 2006. All figures are in Canadian dollars and are in accordance with Canadian GAAP unless otherwise specified.

Revenue for the year ended December 31, 2006 was $4.52 million compared with $2.75 million in fiscal 2005 representing a 64% increase over the year. Net loss for fiscal 2006 was $1.75 million or a basic loss of $0.04 per share, compared with a loss of $2.79 million or a basic loss of $0.10 per share in fiscal 2005. Plant operating profit, for the year was $1,650,000 compared with a loss of $464,000 for fiscal 2005.

Revenue for Q4 2006 was $1,175,000 compared with $681,000 in Q4 2005. Net loss for Q4 2006 was $908,000 or a basic loss of $0.02 per share compared with a loss of $1,034,000 or a basic loss of $0.03 per share in Q4 2005. Plant operating profit for Q4 2006 was $439,000 compared with a loss of $385,000 for Q4 2005.

Financial Highlights for Fiscal 2006

The Company increased revenues by 64% year over year and completed a financing for net proceeds of $18.4 million to create a strong balance sheet with current cash resources of $27.2 million and no debt. Plant operating profit for the year ending December 31, 2006 was $1.65 million.

Revenue improvements in 2006 and lower plant operating costs produced a much improved net operating result from the plants. The increase in revenues was largely due to Bisbee and Raglan plants. Copper revenues at Bisbee increased from $614,000 in 2005 to $1.97 million in 2006. Copper production was 41% higher due to mechanical improvements made in 2005 and early 2006, coupled with the benefit of increased operating availability and increased copper prices. Raglan revenues increased from $832,000 in 2005 to $1.21 million in 2006.

Stock based compensation charges increased by $352,000 to $429,000 in 2006, reflecting the fair value charges for stock options granted mostly in 2006. Additional non-cash charges in 2006 were largely amortization of property plant and equipment and totaled $467,000 compared to $423,000 for 2005.

Business Highlights - Fiscal 2006

The Company doubled the amount of water treated in 2006, compared to 2005, to 4 billion litres. Three new construction projects were developed in 2006, now in progress, and are expected to be commissioned in 2007. In addition, a fourth construction project is in progress for commissioning in 2008. The Company added new sites for development between 2008 and 2010 to provide a steady flow of construction projects and potential new cash flow. The Company expanded the potential project sites to over 70 and have developed new technology for sludge processing and sulphate removal to potentially increase the target water treatment market.

Business Highlights - Q4 2006

All of the plant operations reported a profit in the fourth quarter. A summary of plant operating revenues and costs for the fourth quarter 2006 is shown below:



Note: The Raglan plant closes in November for the winter.
---------------------------------------------------------
Plant Plant
Plant operating operating
(unaudited) revenues costs profit
---------------------------------------------------------
Bisbee 636,000 377,000 259,000
---------------------------------------------------------
Raglan 263,000 172,000 91,000
---------------------------------------------------------
Caribou 256,000 215,000 41,000
---------------------------------------------------------
Other 20,000 (28,000) 48,000
---------------------------------------------------------
Total $ 1,175,000 $ 736,000 $ 439,000
---------------------------------------------------------


"We are pleased to report the success of our growth strategy in 2006. BioteQ doubled the amount of water treated compared to 2005 and our operating plants started to show profitable results that can provide an established cash flow for the Company. We expect to commission three new plants this year which are expected to start contributing to revenues before the end of 2007. Based on current conditions and, with the existing operations, the Company is forecasting a profitable 2007. Our project pipeline is growing, both in quantity and quality of projects, with projects that fit our business plan for build, own operate or joint venture to treat water and recover metals," stated Brad Marchant, President and CEO. "Our treatment plants can provide a sustainable answer to water treatment and can reduce long term liabilities for our customers."

The Company's fiscal 2006 financial statements and MD&A have been filed on SEDAR, www.sedar.com.

Conference Call Details

BioteQ will conduct a teleconference to discuss the fourth quarter and fiscal year results for the period ended December 31, 2006 on Friday, March 23, 2007 at 8:00 a.m. Pacific Time, 11:00 a.m. Eastern Time. To participate in the conference call please dial (416) 695-5259 Canada/USA (866) 902-2211, about 5-10 minutes prior to 8:00 am PST. Please refer to the BioteQ earnings teleconference call.

A recording of the conference call will be available on the Company's website at www.bioteq.ca. The call will also be available from March 23, 2007 through April 6, 2007, by dialing (416) 695-5275 or Canada/USA (866) 509-0081, conference ID #642023.

Corporate Profile

BioteQ is establishing itself as a leader in the treatment of acid contaminated water through the use of its patented BioSulphide® Process and the ChemSulphide™ Process. Focused on the mining industry, BioteQ has partnered with leading metal producers including Phelps Dodge, Breakwater, INCO, Jiangxi Copper and Xstrata as well as utilities operator EPCOR Water Services, to finance, design, build and operate mine site water treatment plants which recover saleable metals in addition to meeting ever stricter environmental regulations.

On behalf of the Board of Directors

Brad Marchant

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "might" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the development, construction and operation of water treatment plants, variations in water quality, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors described in the section entitled "Risks" in the Company's Annual Report for the Year Ended December 31, 2006. Circumstances or management's estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.



BioteQ Environmental Technologies Inc.
Consolidated Balance Sheets
(Expressed in Canadian dollars)
As at December 31, 2006 and 2005
--------------------------------------------------------------------------

2006 2005
$ $
Assets
Current assets
Cash 1,914,068 5,718,575
Short-term investments 25,285,846 -
Trade receivables 521,273 227,631
Receivable from joint venture partner 64,790 -
Taxes receivable 186,447 -
Inventory 251,652 20,230
Prepaid expenses 120,246 88,990
Other 89,164 117,096
-----------------------

28,433,486 6,172,522

Property, plant and equipment 5,042,592 5,263,521
Intangible asset 224,542 -
Deferred financing costs 32,771 67,979
-----------------------

33,733,391 11,504,022
-----------------------
-----------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 992,794 607,502
Deferred revenue - 110,641
Bank loan 398,670 576,315
-----------------------

1,391,464 1,294,458

Liability component of Series A debentures - 359,042
-----------------------

1,391,464 1,653,500
-----------------------
Shareholders' Equity
Capital stock, warrants and contributed surplus 43,834,716 19,498,592
Equity component of Series A debentures - 96,128
Deficit (11,492,789) (9,744,198)
-----------------------

32,341,927 9,850,522
-----------------------

33,733,391 11,504,022
-----------------------
-----------------------


BioteQ Environmental Technologies Inc.
Consolidated Statements of Operations and Deficit
(Expressed in Canadian dollars)
For the three and twelve-month periods ended December 31, 2006 with
comparative figures for December 2005
--------------------------------------------------------------------------

12 months 12 months 3 months 3 months
31 Dec 31 Dec 31 Dec 31 Dec
2006 2005 2006 2005
(Unaudited) (Unaudited)
$ $ $ $

Revenue 4,519,728 2,755,970 1,175,330 680,271
-------------------------------------------------

Operating expenses
Plant and other
operating costs 2,868,188 3,220,047 736,322 1,065,160
Amortization of
property, plant and
equipment 391,377 377,321 104,075 98,887
Amortization of
intangible asset 23,228 - 7,743 -
Amortization of deferred
financing costs 36,208 21,029 4,110 6,938
General and
administrative expenses 1,981,987 1,493,415 662,092 370,032
Stock-based
compensation charge 429,168 77,658 356,119 9,273
Marketing and
development costs 842,434 256,153 406,040 107,421
Loss on disposal of plant 6,192 - (14,962) -
-------------------------------------------------

6,578,782 5,445,623 2,261,539 1,657,711
-------------------------------------------------

Loss from operations 2,059,054 2,689,653 1,086,209 977,440
Interest income (348,852) (36,295) (147,456) (17,366)
Interest expense 55,183 75,881 7,113 26,282
Foreign exchange
(gain) loss (16,794) 61,556 (38,107) 48,310
Loss for the period 1,748,591 2,790,795 907,759 1,034,666
Deficit -
Beginning of period 9,744,198 6,953,403 10,585,030 8,709,532
-------------------------------------------------

Deficit - End of period 11,492,789 9,744,198 (11,492,789) (9,744,198)
-------------------------------------------------
-------------------------------------------------

Loss per share -
basic and diluted (0.04) (0.10) (0.02) (0.03)
-------------------------------------------------
-------------------------------------------------

Weighted average number
of shares outstanding 39,842,920 29,036,609 42,255,504 30,470,376
-------------------------------------------------
-------------------------------------------------


BioteQ Environmental Technologies Inc.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
For the three and twelve--month periods ended December 31, 2006 with
comparative figures for December 2005
--------------------------------------------------------------------------

12 months 12 months 3 months 3 months
31 Dec 31 Dec 31 Dec 31 Dec
2006 2005 2006 2005
(Unaudited) (Unaudited)
$ $ $ $

Cash flows from
operating activities
Loss for the period (1,748,591) (2,790,795) (907,759) (1,034,666)
Items not affecting cash
Amortization of
property, plant and
equipment 391,377 377,321 104,075 98,887
Amortization of
intangible asset 23,228 - 7,743 -
Amortization of deferred
financing costs 36,208 21,029 4,110 6,938
Accretion of Series A
debentures 10,084 24,580 - 6,145
Stock-based compensation
charge 429,168 77,658 356,119 9,272
Loss on disposal of
plant 6,192 - - -
-------------------------------------------------

(852,334) (2,290,207) (435,712) (913,424)
Change in non-cash
working capital items (504,974) 380,214 568,246 381,154
-------------------------------------------------

(1,357,308) (1,909,993) 132,534 (532,270)

Cash flows from
financing activities
Issuance of common
shares and warrants 19,999,999 5,749,999 20,393,800 5,392,615
Share issuance costs (1,621,962) (542,384) (2,015,762) -
Proceeds from exercise
of warrants and options 5,063,664 442,950 180,503 -
Repayment of bank loan (177,645) 576,315 (44,487) (24,561)
Deferred financing costs (1,000) (7,445) 57,294 -
-------------------------------------------------

23,263,056 6,219,435 18,571,348 5,368,054
-------------------------------------------------

Cash flows from
investing activities
Purchase of property,
plant and equipment (596,486) (516,025) (204,035) (99,317)
Proceeds from disposal of
property, plant and
equipment 419,847 - - -
Purchase of
short-term investments (25,285,846) - (18,382,726) -
Purchase of
intangible assets (247,770) - - -
-------------------------------------------------

(25,710,255) (516,025) (18,586,761) (99,317)
-------------------------------------------------

(Decrease) increase
in cash (3,804,507) 3,793,417 117,121 4,736,467
Cash -
Beginning of period 5,718,575 1,925,158 1,796,947 982,108
-------------------------------------------------

Cash - End of period 1,914,068 5,718,575 1,914,068 5,718,575
-------------------------------------------------
-------------------------------------------------
Supplemental cash
flow information
Interest paid 45,099 51,301 7,113 20,137
Withholding taxes paid
and receivable 186,447 - 35,047 -
Non-cash financing and
investing activities
Debenture converted to
common shares 465,254 - - -
Warrants issued in
settlement of issue costs 393,801 205,580 393,801 205,580
Units issued in settlement
of issue costs 87,500 103,500 - 103,500


The Toronto Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

Contact Information

  • BioteQ Environmental Technologies Inc.
    (604) 685-1243
    (604) 685-7778 (FAX)
    or
    BioteQ Environmental Technologies Inc.
    Caren Holtby
    Investor Relations
    1-800-537-3073
    Email: choltby@bioteq.ca
    Website: www.bioteq.ca
    or
    Wolfe Axelrod Weinberger Assoc. LLC - In the U.S.
    Adam P. Lowensteiner
    Investor Relations
    (212) 370-4500
    Email: adam@wolfeaxelrod.com
    or
    Wolfe Axelrod Weinberger Assoc. LLC - In the U.S.
    Alisa Steinberg
    Media
    (212) 370-4500
    (212) 370-4505 (FAX)
    Email: alisa@wolfeaxelrod.com