BioteQ Reports Q3 2011 Operating and Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 14, 2011) - BioteQ Environmental Technologies Inc. (TSX:BQE), a leader in the treatment of industrial waste water, reports its unaudited financial and operating results for the three and nine months ended September 30, 2011. All figures are in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.

Operating and financial results highlights for Q3 2011:

• BioteQ has active water treatment operations in China and the US and seasonal operations in Canada; these operations generate recurring revenues. Recurring revenues for the quarter were generated by copper recovery at the plants in Dexing China and Bisbee Arizona, and fee-based water treatment operations at the Raglan site in Quebec. The Company is also involved in several engineering, design, construction and piloting projects at various stages of completion; these projects generate one-time revenues. One-time revenues were driven by engineering projects for new plants that are expected to enter into construction in 2012.
  
  
• Total revenues for the period were $2.9 million compared to $2.7 million in 2010. The increase in revenue over the prior year quarter is mainly attributable to higher copper recovery at the Dexing plant in China.
  
  
• Year to date, revenues totaled $5.7 million compared to $7.2 million in 2010. Revenues were higher in 2010 largely because the company recorded a plant sale that generated one-time revenues.
  
  
• Operating income for the quarter was $1.6 million compared to $1.8 million in 2010. Year to date, operating income was $2.4 million compared to $3.4 million in 2010.
  
  
• The net loss for the quarter was $1.1 million, compared to net income of $2 million in 2010. The comprehensive loss for the quarter was $560,000 compared to income of $1.1 million in 2010. This includes one-time CEO transition and recruitment costs of $700,000. Year to date, the comprehensive loss was $2.7 million compared to income of $201,000 in 2010.
  
  
• Cash flow used in operations, before changes in non-cash working capital, was $540,000. Excluding CEO transition and recruiting costs, operating activities generated positive cash flow of $160,000. Year to date, cash flow used in operations was $2.3 million compared to cash flow generated by operations of $1 million in 2010.
  
  
• Year to date revenue and cash flow figures are in line with the Company's 2011 financial guidance of $6.5 to $7.5 million in revenue and $3 to $3.5 million in operating cash use, before changes in non-cash working capital.
  
  
• BioteQ ended the period with $10.5 million in working capital which included $10.3 million in cash and short-term investments. At December 31, 2010, those balances were $13.8 million and $12.6 million respectively. The Company has no debt.
  
  
• During the quarter, the Company announced the appointment of Jonathan Wilkinson as the new Chief Executive Officer and director.
  
  
• During the quarter, BioteQ resumed operations at its Bisbee plant in Arizona, signed an agreement with a European engineering firm for a SART project, signed an agreement with Minera Mexico to review potential water treatment projects, and continued commissioning of a new 800 cubic meter per hour ion exchange plant for recovery of cobalt and nickel from low-grade solution at the Dexing site in China.
  
  
• Subsequent to quarter end, BioteQ announced that it had signed a new contract valued at $1 million, to be executed over the balance of 2011 and the first quarter of 2012.
  
  
• BioteQ is continuing its litigation efforts for the plants in Mexico and Australia to recover value from these assets. The Company presently has no definitive timeline with respect to when these matters will be resolved.
  
  
• BioteQ has an expanding pipeline of sales opportunities that are progressing toward commercial contacts. The projects, which are subject to customer approvals, are expected to contribute one-time projects revenues and recurring fee-based revenues over the next three years.
  

Jonathan Wilkinson, BioteQ's Chief Executive Officer, stated, "We are pleased with the quarterly operating and financial results for BioteQ. The company has seen good commercial progress during the quarter, and we are confident that we will meet our current financial guidance for the year. We are continuing to aggressively pursue new growth opportunities and believe that the company is well positioned to generate strong results in 2012."

BioteQ's financial statements and the Company's MD&A have been filed on SEDAR, www.sedar.com, and will be available on the BioteQ website at www.bioteq.ca.

A conference call to discuss the financial results is scheduled for Tuesday November 15^th at 11:00 am Eastern. Participants can access the call by dialing 416-340-2217, or 1-866-696-5910, reference number 3277435. A playback of the call will be available until November 29^th by dialing 905-694-9451, reference number 2127682. A recording will be available on the BioteQ website within two days of the call.

BioteQ Corporate Profile

BioteQ creates custom water treatment solutions to recover dissolved metals and remove sulphate from water impacted by mining, energy and industrial activities. The company's clean technologies convert wastewater into a useful resource while delivering lower life cycle costs for water treatment. BioteQ has designed and commissioned 14 plants at sites in Canada, the US, Mexico, Australia and China, with additional projects in development.

BioteQ's sustainable water treatment solutions have been recognized with national and international awards for innovation and sustainability. BioteQ is headquartered in Vancouver, Canada, and trades on the TSX under the symbol BQE. For additional information, please visit our website at www.bioteq.ca.

BioteQ Environmental Technologies Inc.

Consolidated Statement of Financial Position

Unaudited

	Sep 30 2011		Dec 31 2010
	$		$
Assets
Current assets
Cash and cash equivalents	5,529,276		4,653,465
Short-term investments	4,778,293		7,957,391
Trade receivables	2,519,036		1,676,963
Receivable from joint venture partners	187,273		180,204
Net insurance proceeds receivable (note 8)	614,963		618,248
Taxes recoverable	-		15,469
Inventory (note 9)	126,394		54,723
Prepaid expenses	296,064		241,089
	14,051,299		15,397,552
Non-current assets
Property, plant and equipment (note 10)	7,406,854		6,671,046
Intangible asset	77,425		100,654
Total assets	21,535,578		22,169,252
Liabilities
Current liabilities
Accounts payable and accrued liabilities	3,025,310		1,544,901
Deferred revenue	85,592		-
Taxes payable	417,600		-
Deferred lease inducement	26,049		47,362
	3,554,551		1,592,263
Non-current liabilities
Long-term liabilities	46,101		46,884
Total liabilities	3,600,652		1,639,147
Shareholders' Equity
Capital stock and warrants (note 11)	55,269,416		55,182,229
Contributed surplus	8,096,058		8,045,826
Accumulated other comprehensive loss	(1,042,383	)	(1,482,945	)
Deficit	(44,388,165	)	(41,215,005	)
Total shareholders' equity	17,934,926		20,530,105
Total liabilities and shareholders' equity	21,535,578		22,169,252
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/

BioteQ Environmental Technologies Inc.

Consolidated Statements of Operations and Comprehensive Loss

For the three and nine months ended September 30, 2011 and 2010

Unaudited

	3 months ended Sep 30,				9 months ended Sep 30,
	2011		2010		2011		2010
	$		$		$		$
Revenue	2,948,473		2,749,178		5,678,444		7,236,173
Plant and other operating costs (other than depreciation)	1,350,809		967,024		3,293,908		3,839,788
	1,597,664		1,782,154		2,384,536		3,396,385
General and administration	1,783,942		907,725		3,771,534		2,349,340
Marketing and development	305,042		167,715		645,767		736,224
Stock-based compensation	10,133		111,935		80,536		392,063
Depreciation of property, plant and equipment (note 10)	151,994		219,561		452,484		636,041
Amortization of intangible asset	7,743		7,743		23,229		23,229
Income (loss) before the under-noted	(661,190	)	367,475		(2,589,014	)	(740,512	)
Interest income	27,058		12,541		77,836		27,191
Other income (loss)	(3,750	)	27,269		(3,750	)	99,713
Lease fee income	-		255,760		-		741,650
Foreign exchange gain (loss)	(145,393	)	1,390,321		(145,990	)	893,956
Income (loss) before income taxes	(783,275	)	2,053,366		(2,660,918	)	1,021,998
Income taxes (note 12)	337,231		59,359		512,242		242,655
Net income (loss) for the period	(1,120,506	)	1,994,007		(3,173,160	)	779,343
Other comprehensive income (loss)
Cumulative translation adjustment	560,864		(929,781	)	440,562		(579,042	)
Comprehensive loss for the period	(559,642	)	1,064,226		(2,732,598	)	200,301
Net income (loss) per share
Basic and diluted	(0.02	)	0.03		(0.05	)	0.01
Weighted average number of shares outstanding
Basic	69,966,672		69,855,006		69,943,204		69,573,118
Diluted	69,966,672		70,041,562		70,179,044		69,864,708
For a complete set of consolidated financial statements including accompanying notes, go to www.bioteq.ca

BioteQ Environmental Technologies Inc.

Consolidated Statement of Changes in Equity

For the three and nine months ended September 30, 2011 and 2010

Unaudited

	Number of shares	Share capital	Warrants	Contributed surplus		Accumulated other comprehensive income (loss)		Deficit		Total
		$	$	$		$		$		$
Balance - January 1, 2011	69,865,006	55,182,229	-	8,045,826		(1,482,945	)	(41,215,005	)	20,530,105
Stock-based compensation	-	-	-	80,536		-		-		80,536
Exercise of options	101,666	87,187	-	(30,304	)	-		-		56,883
Net loss for the period	-	-	-	-		-		(3,173,160	)	(3,173,160	)
Other comprehensive income for the period	-	-	-	-		440,562		-		440,562
Balance - September 30, 2011	69,966,672	55,269,416	-	8,096,058		(1,042,383	)	(44,388,165	)	17,934,926
Balance - January 1, 2010	66,190,308	51,148,380	-	7,586,362		-		(30,286,323	)	28,448,419
Issuance of capital stock and warrants (note 11)	3,636,364	2,486,583	1,513,417	-		-		-		4,000,000
Stock-based compensation	-	-	-	392,063		-		-		392,063
Exercise of options	28,334	25,019	-	(8,585	)	-		-		16,434
Net income for the period	-	-	-	-		-		779,343		779,343
Other comprehensive loss for the period	-	-	-	-		(579,042	)	-		(579,042	)
Balance - September 30, 2010	69,855,006	53,659,982	1,513,417	7,969,840		(579,042	)	(29,506,980	)	33,057,217
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/

BioteQ Environmental Technologies Inc.

Consolidated Statement of Cash Flow

For the three and nine months ended September 30, 2011 and 2010

Unaudited

		3 months ended Sep 30,				9 months ended Sep 30,
		2011		2010		2011		2010
		$		$		$		$
Cash flow provided by (used in)
Operating activities
Net loss for the period		(1,120,506	)	1,994,007		(3,173,160	)	779,343
Items not affecting cash:
	Depreciation of property, plant and equipment	151,994		219,561		452,484		636,041
	Amortization of intangible asset	7,743		7,743		23,229		23,229
	Amortization of deferred lease inducement	(7,104	)	(7,104	)	(21,313	)	(7,104	)
	Loss on disposal of equipment	3,750		-		3,750		-
	Unrealized foreign exchange (gain) loss	413,546		(1,373,107	)	297,392		(818,684	)
	Stock-based compensation charge (note 11)	10,133		111,935		80,536		392,063
		(540,444	)	953,035		(2,337,082	)	1,004,888
Change in non-cash working capital items (note 13)		46,476		(1,206,466	)	983,561		(1,172,083	)
Net cash used in operating activities		(493,968	)	(253,431	)	(1,353,521	)	(167,195	)
Investing activities
Purchase of property, plant and equipment		(69,898	)	(201,486	)	(938,820	)	(519,072	)
Proceeds on disposal of equipment		12,604		-		12,604		-
Purchase of short-term investments		(4,332,301	)	(5,282,183	)	(10,405,181	)	(17,365,652	)
Proceeds from sale of short-term investments		3,244,000		6,038,525		13,624,000		14,930,835
Increase in loan receivable		-		(27,981	)	-		(27,981	)
Increase in interest in loan receivable		-		(27,269	)	-		(99,713	)
Repayment of loan receivable		-		3,806,461		-		4,106,461
Net cash provided by (used in) investing activities		(1,145,595	)	4,306,067		2,292,603		1,024,878
Financing activities
Proceeds from exercise of options		-		-		56,883		16,434
Proceeds from issuance of capital stock and warrants		-		-		-		4,000,000
Increase (decrease) in long-term liabilities		(61,386	)	46,773		783		46,773
Net cash provided by (used in) financing activities		(61,386	)	46,773		57,666		4,063,207
		(1,700,949	)	4,099,409		996,748		4,920,890
Effect of exchange rate changes on cash and cash equivalents		(103,457	)	(9,466	)	(120,937	)	(2,778	)
Increase (decrease) in cash and cash equivalents		(1,804,406	)	4,089,943		875,811		4,918,112
Cash and cash equivalents
	Beginning of period	7,333,682		3,319,471		4,653,465		2,491,302
	End of period	5,529,276		7,409,414		5,529,276		7,409,414
For a complete set of consolidated financial statements including accompanying notes, go to http://www.bioteq.ca/

CAUTIONARY 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, 2010. Circumstances or management's estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.