QuestAir Technologies Inc.

QuestAir Technologies Inc.

December 12, 2007 17:00 ET

QuestAir Technologies Announces 2007 Results and 2008 Milestones

BURNABY, BRITISH COLUMBIA--(Marketwire - Dec. 12, 2007) - QuestAir Technologies Inc. ("QuestAir" or "the Company") (TSX:QAR)(AIM:QAR) reports its financial and operational results for the fiscal year ended September 30, 2007 ("fiscal 2007"). All amounts are in Canadian dollars unless otherwise noted.

2007 Highlights

- Revenue of $7.0 million (2006: $7.6 million) for the fiscal year, in line with revised guidance issued by management in May 2007. Revenue from gas purification systems increased 9% year over year, but total revenue fell due to lower revenues from engineering service contracts.

- Sales order backlog at year end was the highest in the Company's history at $11.1 million, increased 119% from $5.0 million at September 30, 2006. Several large orders for gas purification equipment contributed to this increase. Growth of system sales into biomethane applications was particularly strong. A large engineering service contract valued at US$1.8 million that was received in the fourth quarter also contributed to growth in sales order backlog.

- Cash used in operations and capital requirements of $10.5 million (2006: $9.4 million), in line with revised guidance issued by management in May 2007.

- Net loss of $12.4 million ($0.24 per share) compared to $10.3 million ($0.24 per share) for fiscal 2006.

- The prototype H-6200 hydrogen purifier ("prototype plant") was shipped to an ExxonMobil refinery in France, where it was installed and successfully started up subsequent to the end of the fiscal year.

Jonathan Wilkinson, President and CEO of QuestAir, said:

"We are very pleased with the growth we have seen in our commercial products. Although new bookings for gas purification equipment grew 25% year over year, this figure understates our progress in fiscal 2007. Orders for our commercial products more than doubled during the fiscal year, excluding the $4.2 million for purchase orders related to the H-6200 prototype plant that were received in the prior year. This growth was driven in large part by increased traction in the biogas market. Sales of biogas purification equipment accounted for 47% of the total value of our gas purification system sales during the year."

"In addition, we are delighted with the preliminary results of our field test of the prototype plant. The H-6200 hydrogen purifier is working as designed, and has been operating continuously for over one month at the refinery. This is a major milestone in the development of this rapid cycle PSA for refinery applications, which QuestAir has been developing with ExxonMobil since 2003. We will continue to collect data from the field test over the coming months in order to support our marketing efforts and demonstrate the reliability of the product."

Operating Review & 2007 Milestone Update

During the year, QuestAir completed the installation and commissioning of two landmark biogas projects. The multi-unit M-3100 system was successfully started up at the Rumpke Sanitary Landfill near Cincinnati, Ohio. This system was installed as part of an expansion of the landfill's biomethane recovery plant. QuestAir's pressure swing adsorption ("PSA") units are being used to purify landfill gas up to pipeline grade methane. The Company also successfully commissioned an M-3200 system to recover pipeline grade methane generated from animal waste at a dairy farm in Fennville, Michigan. QuestAir's M-3200 system was installed as part of a plant that generates pipeline-grade methane as well as electrical power from anaerobic digester gas.

The Company successfully penetrated the European biogas purification market in fiscal 2007. In the second quarter, the Company received two orders for M-3200 systems that will be used in Switzerland to purify biomethane from anaerobic digesters for injection into a natural gas pipeline. Later in the fiscal year, the Company sold its first M-3200 to produce compressed natural gas ("CNG") vehicle fuel from biogas. The biogas will be generated from anaerobic digestion of agricultural waste, and the resulting bio-CNG will be used to fuel a bus fleet in the City of Salzburg, Austria.

At the same time, QuestAir continued to win orders for biogas purification systems in North America. In June, the Company received an order valued at US$2.85 million from Phase 3 Developments & Investments, for a multi-unit M-3100 system to be installed at a large scale biogas purification plant in Iowa. The plant will be one of the largest commercial facilities in North America to generate pipeline grade methane from organic waste, and is expected to be operational in the spring of 2008. During the fourth quarter, the Company received an order from SCS Energy valued at Cdn$1.2 million for an M-3100 methane recovery system that will be used by the University of New Hampshire in its new landfill gas-to-energy cogeneration facility. QuestAir's M-3100 will increase the energy content of landfill gas used to generate electricity in a turbine generator.

The Company also entered the well-head gas purification market in California. Gas utilities and the California Air Resources Board are imposing strict new quality specifications on gas producers in California to increase the methane content of the natural gas within the state. After a successful product demonstration, QuestAir received an order for an M-3100 system that will be used to purify well-head gas in order to meet the tighter specifications for natural gas. QuestAir's M-3100 will increase the production capacity of the customer's gas processing plant, allowing the customer to produce additional gas from several wells that have been curtailed under the strict quality specifications of the gas customer.

QuestAir also made notable progress in the industrial hydrogen market. During the year, the Company received 2 orders for systems that will recover and purify hydrogen from off-gas at petrochemical plants. The first such sale was also the Company's first sale into Latin America, where the H-3100 system will be installed at a facility in Sao Paulo, Brazil. The purified hydrogen will be used in the production of polyethylene. In addition, Air Liquide purchased an M-3100 system to recover waste hydrogen from a petrochemical plant in Odessa, Texas. The purified hydrogen will be reused in the production process, and any excess will be compressed for sale to merchant gas customers.

In the fourth quarter, QuestAir received a $1.0 million order from Hydro-Chem for a large capacity H-3200 hydrogen purifier, which will be used to generate hydrogen at an oil refinery in Montana. In fiscal 2007 QuestAir expanded the capacity of its 9 bed H-3200 system in order to open up new markets in the intermediate capacity range of the on-site hydrogen plant market. This is the first order for this new, larger capacity H-3200 system, which is expected to be installed at the refinery in Montana in the autumn of 2008.

During the year, the Company executed on many fronts with its key development partner, ExxonMobil Research and Engineering ("EMRE"). The Joint Development Agreement ("JDA") with EMRE was renewed, extending the exclusivity period of the research collaboration in the refinery and petrochemical markets for a further 3 years. Following the extension of the JDA, QuestAir completed two small funded research contracts with EMRE to assess the use of the H-6200 platform in a specific petrochemical separation, as well as in the processing of "sour" natural gas.

In June, QuestAir shipped the H-6200 prototype plant to an ExxonMobil refinery in France, which was the culmination of a significant amount of groundbreaking work since 2003. The prototype plant has been commissioned and is being used in a commercial application at the refinery. Data generated from the field test will be used to help secure commercial orders for H-6200 units to other refineries.

Late in the fiscal year, the Company received a US$1.8 million engineering services contract from EMRE to complete the third phase of a program to develop a compact on-board hydrogen generator for use in a range of transportation applications. The initial target market for this product is fuel cell powered forklifts, with longer term markets including fuel cell powered vehicles.

In summary, the following progress was made towards the achievement of QuestAir's 2007 milestones:

Milestone Progress
1. Complete the installation and Shipment of the prototype occurred
start-up of the prototype later than originally expected.
H-6200 hydrogen purifier at The prototype arrived at the ExxonMobil
an ExxonMobil refinery refinery during the fiscal year, and
the installation and start-up of the
prototype plant was completed in
October 2007.

2. Receive the first purchase Significant marketing efforts continued
order for a commercial throughout the year. However, a purchase
H-6200 hydrogen purifier order for a commercial H-6200 system was
not received due in part to the delay
in the H-6200 prototype test at the
ExxonMobil refinery.

3. Sign an agreement to extend Progress was made in this regard, with
the H-6200 platform into the extension of the JDA with EMRE which
a new market allows for funded development of a
product extension of the H-6200 into a
new market. In addition, small scoping
studies which evaluated the possibility
of extending the H-6200 technology into
another market were completed during the
year. Efforts were subsequently
redirected to completing the manufacture
and installation of the prototype H-6200
hydrogen purifier, such that this
milestone was not completed during the
fiscal year.

4. Secure first purchase order This milestone was achieved in the second
for a methane purification quarter with the receipt of a purchase
system in the European biogas order for an M-3200 system for
market installation in a Swiss biomethane
purification plant.

5. Increase recognized revenue In May 2007 management indicated that
to between $9 and $10 million recognized revenue would be lower than
originally expected due to delays in
receipts of engineering service
contracts. Accordingly, management
revised its recognized revenue guidance
to $7 to $8 million for the fiscal year.
This revised guidance was met.

6. Manage cash used in In May 2007 management indicated that
operations and capital cash used in operations and capital
expenditures to between $7 expenditures would be higher than
and $8 million originally expected due to lower revenue
from engineering service contracts,
increased costs to complete the prototype
plant, and a reorganization charge that
was incurred in the third quarter.
Accordingly, management revised its cash
burn guidance to $10 to $12 million for
the fiscal year. This revised guidance
was met.

2008 Outlook and Milestones

Commenting of the outlook for fiscal 2008, Jonathan Wilkinson said:

"Fiscal 2008 will be an important year for QuestAir with the commercialization of the H-6200 hydrogen purifier in the oil refining market. The data that is being collected from the field test at the ExxonMobil refinery in France should help us secure the first sale of a fully commercial H-6200 system in the oil refining market. We also expect to see continued growth in the sale of gas purifiers in the industrial hydrogen and biogas markets."

QuestAir's operational and financial milestones for the remainder of fiscal 2008 are:

1. Enhance commercial footprint in the biogas market

Biomethane purification is expected to be one of the principal growth drivers of the Company in the next 3 years. In fiscal 2008, QuestAir looks to increase its penetration of this market by securing orders from at least 3 new customers and by signing at least one distribution agreement with a biogas developer.

2. Grow industrial hydrogen business

In fiscal 2007, QuestAir commenced the sale of its large capacity H-3200 system in order to compete in the intermediate capacity market for hydrogen systems. In fiscal 2008, QuestAir expects to sell a greater number of larger capacity systems, which in turn will increase the average dollar value per hydrogen PSA sold.

3. Secure first purchase order for a commercial H-6200 hydrogen purifier

With the prototype plant now up and running, QuestAir expects to be able to lever this demonstration site to secure the first commercial order for an H-6200 hydrogen purifier.

4. Increase recognized revenue to between $9 and $10 million

Recognized revenue is expected to increase to between $9 and $10 million in fiscal 2008. This growth primarily reflects the strong increase in backlog that was achieved during fiscal 2007. However, not all of the orders in backlog are expected to be recognized as revenue during the fiscal year. The Company's increased focus on selling larger units has extended the time between receipt of order and recognition of revenue. In addition, customer schedules for equipment commissioning affect timing of revenue recognition. Two large orders that were received in the fourth quarter of fiscal 2007 are not expected to be recognized as revenue in fiscal 2008.

5. Manage cash used in operations and capital expenditures to less than $8 million

Cash used in operations and capital expenditures is expected to be less than $8 million, reduced from $10.5 million in fiscal 2007. Cash will primarily be used to fund operations, with capital expenditures accounting for approximately $1.0 million of the expected use of cash.

Fiscal 2007 Financial Results

Operating Results

The following table provides a breakdown of revenues from the sale of gas purification systems and engineering service contracts for the reported periods:

For the years ended September 30,
2007 2006
Gas purification systems 6,322,595 5,808,488
Engineering service contracts 689,571 1,749,605
Total revenue 7,012,166 7,558,093

Total recognized revenue for fiscal 2007 was $7,012,166 compared to $7,558,093 for the prior year. Revenue from gas purification systems was up 9% year over year, while revenue from engineering service contracts fell 61% in the current year. The increase in revenue from gas purification systems for fiscal 2007 resulted from increased sales of commercial PSA systems including an M-3100 methane recovery system for use in the landfill gas processing market, and revenue recognized towards the construction of the prototype being demonstrated at an ExxonMobil refinery. For accounting purposes, the sale of the prototype plant is treated as a long-term production-type contract, and is therefore recognized on a percentage-of-completion basis in accordance with GAAP.

The decrease in revenue from engineering service contracts for fiscal 2007 resulted from a lower volume of engineering service contracts in backlog for the first 9 months of the fiscal year compared to the prior year. This resulted in reduced levels of work on engineering service contracts and less revenue from such contracts. In the fourth quarter, a large engineering service contract from EMRE was received, which will be recognized into revenue as work progresses throughout fiscal 2008.

Fluctuations in recognized revenue and the receipt of new sales orders are to be expected in the industrial markets that the Company serves. In addition, the timing of receipt of new engineering service contracts can vary from year to year. Consequently, management believes that both recognized revenue and changes in sales order backlog should be monitored together to determine the strength of QuestAir's commercial operations.

QuestAir's sales order backlog is defined as future revenue from signed contracts that have not yet been recognized as revenue. The following table provides an analysis of the changes in sales order backlog for the years ended September 30, 2007 and 2006.

(Unaudited) For the year ended For the year ended
September 30, 2007 September 30, 2006
Gas Engin- Gas Engin-
Purifi- eering Purifi- eering
cation Service cation Service
Systems Contracts Total Systems Contracts Total
Balance 4,908,298 135,594 5,043,892 2,239,778 767,770 3,007,548
ings 10,802,921 2,809,275 13,612,196 8,642,200 1,226,020 9,868,220
Revenue (6,322,595) (689,571)(7,012,166)(5,808,488)(1,749,605)(7,558,093)
(1) (433,989) (156,168) (590,157) (165,192) (108,591) (273,783)
Balance 8,954,635 2,099,130 11,053,765 4,908,298 135,594 5,043,892

(1) Includes adjustments for fluctuations in foreign currency exchange

The total sales order backlog increased by $6,009,873, or 119%, during fiscal 2007. The increase in backlog over the fiscal year was driven by orders valued at $10,802,921 related to gas purification systems, and $2,809,275 for engineering service orders. During the year QuestAir received several orders for methane purification products, including an order valued at approximately US$2,850,000 for an M-3100 system to upgrade anaerobic digester gas created from organic waste to pipeline quality methane. QuestAir also received an order valued at approximately $1,200,000 for an M-3100 methane recovery system for use in a landfill gas-to-energy project. Orders for hydrogen purification products were also strong, and included two orders valued at approximately $600,000 each for H-3100 systems to recover waste hydrogen from petrochemical plants. Engineering service contracts bookings include an order valued at approximately $1,800,000 from EMRE related to the development of a compact rapid cycle PSA unit for use in a benchtop on-board hydrogen generator. A negative adjustment was made to sales order backlog as a result of foreign exchange fluctuations during the year.

QuestAir currently expects that the backlog as of September 30, 2007 will be substantially recognized as revenue by December 31, 2008.

The following table provides a calculation of gross profit for the reported years:

For the years ended September 30,
2007 2006
Revenue 7,012,166 7,558,093
Cost of goods sold 6,973,668 6,432,954
Gross Profit 38,498 1,125,139
Gross Margin (%) 0.5% 14.9%

The decrease in gross profit for fiscal 2007 compared to the prior year resulted from the recognition of an estimated loss of $1,912,663 on the prototype plant being sold to an ExxonMobil refinery. $1,367,742 of this amount has already been incurred for salary and travel expenses related to expediting suppliers and site visits. The balance of the loss, $544,921, represents an updated estimate of future costs related to the prototype plant, of which $121,676 is management's estimated loss to be incurred to complete the installation and commissioning of the prototype plant (which is expected to be completed in the first quarter of fiscal 2008), and $423,245 is a warranty provision. In fiscal 2006, the Company recognized an initial loss on the prototype plant of $419,172, being management's best estimate of the anticipated future loss at that time. This amount has been incurred by the Company.

Excluding the ExxonMobil prototype plant, gross margin on commercial equipment and engineering services combined was $1,951,161, or 36% in fiscal 2007 compared to $1,544,311 or 40% in the prior fiscal year. Margins are expected to fluctuate from year to year depending on the mix of revenues recognized from engineering service contracts which typically contribute higher margins, and gas purification systems.

Sales and marketing expenses were $2,051,248 for fiscal 2007, an increase of 6% compared to $1,938,537 for the prior year. The increase in sales and marketing expenses for fiscal 2007 was attributed to an increased level of sales activities compared to the prior year.

The gross R&D expenditures, offsetting government funding and the resulting net R&D expenditures for the relevant periods, were as follows:

For the years ended September 30,
2007 2006
Gross R&D Expenditure 5,888,966 6,907,360
Government & Partner Funding (374,929) (1,815,186)
Net R&D Expenditure 5,514,037 5,092,174

The 15% reduction in gross R&D expenditures for fiscal 2007 compared to the prior year was due to a reduction in amount of R&D undertaken as resources were redirected towards supporting commercial sales efforts and the construction of the prototype plant. Government funding, which is recognized as a reduction in R&D expenses when collection is reasonably probable, fell during fiscal 2007 as the TPC contribution agreement neared completion.

G&A expenses were $3,992,040 for fiscal 2007, an increase of 21% from $3,311,188 for the prior year. The increase in G&A expenses for the year related to severance costs and termination benefits of $564,030 related to the restructuring of operations being recognized in the third quarter of fiscal 2007. The balance of the increase in fiscal 2007 is related to increases in consulting, regulatory fees and training costs, partially offset by reductions in investor relations, accounting and legal fees.

Stock-based compensation expense was $458,067 for fiscal 2007, a decrease of 7% from $492,302 for the prior year. Stock-based compensation expenses were higher for the prior year due to a stock compensation charge related to the repricing of certain options at the time of QuestAir's IPO in fiscal 2005.

Amortization expenses were $850,833 for fiscal 2007 compared to $1,223,788 for the prior year. The decrease in amortization expenses was a result of certain capital assets becoming fully amortized during the year.

Other income and expense netted to an expense of $47,752 for fiscal 2007 compared to income of $177,630 in the prior year. Losses from foreign exchange fluctuations and unrealized losses on embedded derivatives were only partially offset by interest income in the current year.

Net loss for fiscal 2007 was $12,417,412 ($0.24 per share) compared to $10,262,918 ($0.24 per share) for the prior year. The increase in the net loss for the year was primarily a result of reduced gross profit and higher G&A and net R&D expenses.

Loss per share is calculated based on the weighted average number of common shares outstanding through the year. Loss per share was unchanged for the year as a result of an increase in the weighted average number of common shares outstanding compared to the prior year.

Capital expenditures net of government funding and proceeds on sale ("Net CAPEX"), for fiscal 2007 were $412,249 compared to $1,052,668 for the prior year. Net CAPEX were higher in fiscal 2006 resulting from leasehold improvements made to new hydrogen testing facilities and expenditures on a demonstration landfill gas processing plant installed at the Vancouver Landfill. It is expected that capital expenditures will fluctuate from year to year depending on the requirements of specific product development programs and administrative needs.

Liquidity and Capital Resources

At September 30, 2007 cash and short-term investments were $8,786,692, compared to $18,418,800 at September 30, 2006. Not included in cash and short term investments at September 30, 2007 was $340,802 of restricted cash to secure letters of credit with customers.

Cash used by operations and capital requirements for the year ended September 30, 2007 was $10,525,458, compared to $9,430,679 for the prior year. The increase in cash used by operations and capital requirement for the year was driven by an increased loss for the year, as well as a decrease in accounts payable. This was partially offset by an increase in deferred revenue and decreases in amortization and Net CAPEX.

During fiscal 2005, the Company signed a credit facilities agreement with Comerica Bank. This agreement is amended and restated each year as part of the annual renewal of these facilities, most recently in June 2007. The amended credit facilities include a US$1 million accounts receivable line of credit and a US$1 million term loan, in addition to amounts outstanding under the prior term loan agreements. Both facilities are secured by the assets of the Company with certain exceptions. As at September 30, 2007, the Company had drawn $920,336 against the term loans net of repayments, and no funds have been drawn under either of the amended credit facilities. QuestAir is in compliance with all bank covenants.

On June 6, 2003, QuestAir was awarded a $9,600,000 conditionally repayable loan from TPC, a funding program administered by Industry Canada. At September 30, 2007, the Company had received $8,140,443 against this loan. These funds are repayable in the form of annual royalties under certain conditions. The project completion date under the agreement is September 30, 2007. Subsequent to fiscal year end, the Company entered into negotiations with TPC to amend this agreement to, among other things, delete certain development milestones, extend the program completion date for certain other milestones, and reduce the contribution amount and the associated royalties. There can be no assurance that an amendment will be agreed to by the parties, or that any further funds will be available to support additional development activities. Amounts drawn under this contribution agreement are subject to final audit by Industry Canada.

QuestAir's authorized share capital consists of an unlimited number of common shares, of which 52,540,487 common shares were issued and outstanding as of September 30, 2007. In addition, the Company had 4,767,925 stock options outstanding of which 3,815,842 were exercisable. Included in the exercisable options are 1,885,381 options with an average exercise price of $1.38 and 221,223 options that were issued in lieu of salary or bonus with an exercise price of $0.001 that will expire on or before December 31, 2007. As at September 30, 2007 there were 192,308 warrants outstanding, unchanged from the prior year. These warrants have an exercise price of $3.88 each and expire June 6, 2008.

Further information on QuestAir's financial results for the year ended September 30, 2007 can be found in the Company's 'Management Discussion and Analysis' ("MD&A") at

Balance Sheets

Audited (expressed in Canadian dollars) As at As at
September 30, September 30,
2007 2006

Current assets:
Cash and cash equivalents $ 5,726,245 $ 11,018,800
Restricted cash 340,802 1,256,354
Short-term investments 3,060,447 7,400,000
Accounts receivable 1,412,983 1,476,024
Grants and funding receivables - 454,597
Inventories 4,376,717 3,510,508
Prepaid expenses 256,378 337,335
15,173,572 25,453,618

Long-term assets:
Property, plant and equipment 1,703,872 2,103,626
Other long-term assets 175,080 125,000
$ 17,052,524 $ 27,682,244

Current liabilities:
Accounts payable and accrued liabilities $ 2,791,139 $ 4,413,717
Deferred revenue 4,546,584 1,946,781
Current portion of bank debt 564,306 351,398
Current portion of obligations under
capital lease 97,822 -
Derivatives 75,874 -
8,075,725 6,711,896

Long term liabilities:
Bank debt 356,030 532,852
Obligations under capital lease 97,822 -
8,529,577 7,244,748

Shareholders' equity:
Share capital
Unlimited common shares, voting, no par value
Unlimited preferred shares, issuable in
series, no par value
Common shares 109,383,859 109,020,202
Contributed surplus 6,626,825 6,462,772
Deficit (107,487,737) (95,045,478)
8,522,947 20,437,496
$ 17,052,524 $ 27,682,244

Statements of Operations, Comprehensive Loss and Deficit

Audited (expressed in Canadian dollars) For the years ended
September 30, September 30,
2007 2006

Revenues $ 7,012,166 $ 7,558,093
Cost of goods sold 6,973,668 6,432,954
Gross profit 38,498 1,125,139

Operating expenses
Research and development - net 5,514,037 5,092,174
General and administration 3,992,040 3,311,188
Sales and marketing 2,051,248 1,938,537
Amortization 850,833 1,223,788

12,408,158 11,565,687
Loss before undernoted (12,369,660) (10,440,548)

Other income (expense)
Interest income 522,524 378,872
Other expense (570,276) (201,242)
(47,752) 177,630

Loss for the year (12,417,412) (10,262,918)
Other comprehensive loss - -
Comprehensive loss for the year (12,417,412) (10,262,918)
Deficit - Beginning of year (95,045,478) (84,782,560)
Unrealized foreign exchange loss on
derivatives (24,847) -
Deficit - End of year $(107,487,737) $ (95,045,478)

Basic and diluted loss per share $ (0.24) $ (0.24)
Weighted average number of common
shares outstanding 52,473,306 42,426,280

Statements of Cash Flows

Audited (expressed in Canadian dollars) For the years ended
September 30, September 30,
2007 2006

Cash flows from operating activities
Loss for the year $ (12,417,412) $ (10,262,918)
Items not involving cash
Amortization 850,833 1,223,788
(Gain) Loss on sale of property,
plant and equipment (412) 8,619
Unrealized foreign exchange loss on
derivatives 51,027 -
Stock based compensation expense 458,067 492,302
Foreign currency (gain) loss (32,489) 503
(11,090,386) (8,537,706)

Changes in non-cash operating working capital
Accounts, grants and funding receivables 517,638 (361,454)
Inventories (866,209) (1,546,335)
Prepaid expenses 30,877 (162,579)
Accounts payable and accrued liabilities (1,304,932) 1,885,385
Deferred revenue 2,599,803 344,678
977,177 159,695
(10,113,209) (8,378,011)

Cash flows from investing activities
Increase in short-term investments (3,060,447) (7,400,000)
Decrease in short-term investments 7,400,000 -
Purchase of property, plant and equipment (426,729) (1,155,334)
Government grants and funding
related to property, plant and equipment 5,434 96,791
Proceeds on sale of property, plant
and equipment 9,046 5,875
Decrease (increase) in restricted cash 915,552 (1,153,958)
4,842,856 (9,606,626)

Cash flows from financing activities
Issuance of common shares - 20,000,250
Share issue costs - (1,589,499)
Issuance of common shares on exercise
of stock options 69,642 157,991
Repayment of obligations under capital lease (127,930) (110,860)
Repayment of bank debt (426,674) (197,749)
Term loan advance 462,760 431,481
(22,202) 18,691,614
Increase in cash and equivalents (5,292,555) 706,977
Cash and equivalents - Beginning of year 11,018,800 10,311,823
Cash and equivalents - End of year $ 5,726,245 $ 11,018,800

About QuestAir Technologies Inc.

QuestAir Technologies Inc. is a developer and supplier of proprietary gas purification systems for several large international markets, including existing markets such as oil refining, biogas production and natural gas processing, and emerging markets such as fuel cell power plants and fuel cell vehicle refueling stations. QuestAir is based in Burnaby, British Columbia and its shares trade on the AIM Market of the London Stock Exchange Plc. and on the Toronto Stock Exchange under the symbol "QAR".

Forward-looking statements

This press release contains forward-looking statements. Forward looking statements generally can be identified by the use of forward looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. These forward looking statements include references to the future success of our business, technology, and market opportunities. By their nature, forward looking statements require QuestAir to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause QuestAir's actual results in future periods to differ materially from forecasted results. While QuestAir considers its assumptions to be reasonable and appropriate based on current information available, there is a risk that they may not be accurate. These forward looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that may cause the Company's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed in or implied by these forward looking statements. These risks include risks related to general economic conditions, risks associated with revenue growth, operating results, industry factors and QuestAir's general business environment, risks associated with doing business with partners, risks involved with the development new products and technology, financing risks, such as risks relating to liquidity and access to capital markets, and risks relating to competition, among other factors. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on such forward looking statements which speak only to the date they were made. QuestAir disclaims any obligation to publicly update or revise any such statements to reflect any change in the Company's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward looking statements.

Contact Information

  • QuestAir Technologies Inc.
    Sherry Tryssenaar
    Chief Financial Officer
    (604) 453-6902
    Canaccord Adams
    Robert Finlay
    +44 (0) 20 7050 6500
    Canaccord Adams
    Erin Needra
    +44 (0) 20 7050 6500
    Buchanan Communications
    Charles Ryland
    UK Media Contact
    +44 (0) 20 7466 5000
    Buchanan Communications
    Ben Willey
    UK Media Contact
    +44 (0) 20 7466 5000
    Karyo Communications
    Stephen Burega
    Canadian Media Contact
    (604) 623-3007