TORONTO, May 15, 2024 (GLOBE NEWSWIRE) -- Carbon Streaming Corporation (Cboe CA:
NETZ) (OTCQB: OFSTF) (FSE: M2Q) ("Carbon Streaming" or the "Company") today
reported its financial results for the three months ended March 31, 2024. All
figures are expressed in United States dollars, unless otherwise indicated. The
Company will host a live audio call at 11:00 a.m. ET on Friday, May 17, 2024.
Carbon Streaming CEO Justin Cochrane stated: "In the first quarter of 2024,
Carbon Streaming continued its focus on enhancing operational efficiency,
resulting in improvements to operating cash flow compared to the comparative
quarter. We remain dedicated to generating cash flows from sales and identifying
further cost-saving measures going forward. Regarding the revocation of the
concession license at the Rimba Raya project, we intend to evaluate all legal
avenues to protect our investment and enforce our rights. Additionally, moving
into 2024, our priority is ramping up credit issuance and sales, safeguarding
our strong, debt-free balance sheet and pursuing strategic initiatives while
providing support to our project partners."
Quarterly Highlights
* Recognized a loss on revaluation of carbon credit streaming and royalty
agreements of $33.1 million for the three months ended March 31, 2024 (three
months ended March 31, 2023 - gain of $0.7 million). The current period loss
on revaluation was primarily related to the write-down of the value of the
Rimba Raya Stream to $nil.
* Ended the year with $49.0 million in cash and no corporate debt.
* Continued the previously-announced corporate restructuring plan focused on
cash flow optimization, including reducing operating expenses and reviewing
existing streams and royalties, resulting in reduced ongoing operating
expenses and a $1.4 million restructuring charge for the three months ended
March 31, 2024 (three months ended March 31, 2023 - $nil).
* Generated $0.4 million in settlements from carbon credit streaming and
royalty agreements for the three months ended March 31, 2024 (three months
ended March 31, 2023 - $4 thousand).
* Recognized net loss of $35.8 million for the three months ended March
31, 2024 (three months ended March 31, 2023 - net loss of $1.0 million).
* Adjusted net loss of $1.6 million for the three months ended March 31, 2024
(three months ended March 31, 2023 - adjusted net loss of $2.9 million) (see
the "Non-IFRS Measures" section of this news release).
* Operating loss of $36.8 million for the three months ended March 31, 2024
(three months ended March 31, 2023 - operating loss of $2.7 million).
* Paid $0.4 million in upfront deposits for carbon credit streaming and
royalty agreements for the three months ended March 31, 2024 (three months
ended March 31, 2023 - paid $1.5 million in upfront deposits for carbon
credit streaming and royalty agreements).
Financial Highlights Summary
Three Three
months months
ended March ended March
31, 31,
(Dollar figures expressed in USD thousands) 2024 2023
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Carbon credit streaming agreements
Revaluation of carbon credit streaming and royalty
agreements $ (33,136 ) $ 711
Settlements from carbon credit streaming and royalty
agreements(1) 406 4
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Purchased carbon credits
Revenue from sale of purchased carbon credits $ 488 $ 21
Number of purchased carbon credits sold (carbon
credits)(2) 93,772 2,496
Average realized price per purchased carbon credit
sold ($/carbon credit) 5.20 8.46
Cost per purchased carbon credit sold ($/carbon
credit) 4.26 5.00
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Other financial highlights
Other operating expenses 3,709 3,405
Operating loss (36,756 ) (2,685 )
Net loss (35,771 ) (972 )
Loss per share (Basic and Diluted) ($/share) (0.75 ) (0.02 )
Adjusted net loss(3) (1,596 ) (2,864 )
Adjusted net loss per share (Basic and Diluted)
($/share)(3) (0.03 ) (0.06 )
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Statement of financial position
Cash(4) 49,008 65,756
Carbon credit streaming and royalty agreements(4) 26,980 86,246
Total assets(4) 81,596 155,927
Non-current liabilities(4) 1,059 2,380
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(1. Relates to the net cash proceeds generated from the Company's carbon
credit streaming and royalty agreements.
2. The Company holds an inventory of carbon credits, which were acquired
separate and apart from carbon credits delivered under the Company's carbon
credit streaming agreements.
3. "Adjusted net loss", including per share amounts, is a non-IFRS financial
performance measure that is used in this news release. This measure does not
have any standardized meaning under IFRS and therefore may not be comparable to
similar measures presented by other issuers. For more information about this
measure, why it is used by the Company, and a reconciliation to the most
directly comparable measure under IFRS, see the "Non-IFRS Measures" section of
the Company's Management's Discussion & Analysis.
4. Cash, carbon credit streaming and royalty agreements, total assets and non-
current liabilities are presented as at the relevant tabular reporting date.)
Portfolio Updates: Three months ended March 31, 2024 and Subsequent to Quarter
End
New investments, portfolio restructuring and other significant updates
Rimba Raya Stream: On April 26, 2024, the Company announced that it was informed
that PT Rimba Raya Conservation ("PT Rimba"), the local concession holder for
the Rimba Raya project had its Forest Utilization Business License (the
"Concession License") revoked by the Indonesian Government's Ministry of
Environment and Forestry (the "MOEF"). The Company has confirmed that PT Rimba
filed a claim challenging the revocation, and a ruling from the State
Administrative Court of Jakarta is currently anticipated during June 2024 (which
ruling is subject to potential appeal by the parties). Carbon Streaming is
currently assessing the ongoing situation and is engaged with our partners and
local advisors. At the present time, the Company is evaluating all legal avenues
to protect its investment in the Rimba Raya project and to strictly enforce its
legal and contractual rights under the Rimba Raya Stream. For further
information, please see the Company's news release "Carbon Streaming Announces
Further Update on Rimba Raya Project" dated May 15, 2024 which is available on
SEDAR+ at www.sedarplus.ca (http://www.sedarplus.ca).
Baccala Ranch Reforestation Stream: On February 9, 2024, the Company entered
into a carbon credit streaming agreement with Mast Reforestation SPV I, LLC
("Mast") for a post-wildfire reforestation project in Tehama and Plumas
Counties, California, USA (the "Baccala Ranch Reforestation Stream"). Under the
terms of the Baccala Ranch Reforestation Stream, Mast will deliver 100% of the
forecast mitigation units ("FMUs") (referred to herein as carbon credits)
created by the project to the Company, which are expected to be issued in 2026.
The Company will make additional upfront deposit payments of up to $1.6 million
as the Baccala Ranch Reforestation project achieves site preparation, planting,
and issuance milestones.
Community Carbon Stream: On May 8, 2024, the Company amended the terms of the
Community Carbon Stream resulting in, among other things, revising the Company's
economic interest to provide for a tiered streaming structure which is adjusted
as certain return on invested capital thresholds are achieved, adjusting the
portfolio composition and milestone payments to focus on the five strongest
projects, three cookstove and two water purification projects. Pursuant to this
amendment, the term of the stream will end December 31, 2040, unless the project
is able to deploy cookstoves and water purification devices ahead of the
projected schedule. Additionally, Community Carbon announced that it secured a
historic letter of authorization from the Government of Tanzania for its
Tanzania cookstove project (VCS 2676), representing Tanzania's first-ever carbon
credits authorized for corresponding adjustments under Article 6 of the Paris
Agreement.
Key portfolio milestones
Nalgonda Rice Farming Stream: In April 2024, CoreCarbonX engaged CarbonFarming
Technology SAS to conduct a pilot program applying satellite and artificial
intelligence-backed monitoring, reporting, and verification technology ("MRV
Solution") for the two crop seasons in 2024. The MRV Solution is expected to:
detect a large range of farming practices and quantify emissions with high
accuracy; simplify operations providing an efficient and cost-effective means of
collecting 'near-real-time' data at scale, enabling close monitoring of project
progress; and increase the marketability and the value of carbon credits issued.
Enfield Biochar Stream: In early April 2024, Standard Biocarbon reached a
critical project milestone with the first biochar production from their newly
constructed biochar facility in Enfield, Maine. The Enfield Biochar project
continues to scale toward full operating capacity while collecting operating
data that will form the basis for a facility audit and official registration
with the Puro.earth carbon credit standard.
Strategy
Carbon Streaming is focused on executing its sales strategy through the
marketing and selling of carbon credits and continuing to acquire select
additional streams and royalties to diversify and complement its portfolio of
projects.
In executing its sales strategy, over the long term and on a company-wide basis,
the Company continues to expect to retain on average 15% to 25% of cash flows
(with stream-specific retention varying) generated from the sale of the carbon
credits acquired from its carbon credit streaming agreements, subject to
fluctuation based on the realized price from carbon credit sales and the
specific terms of the stream agreements. Through an ongoing delivery payment
under the terms of a stream agreement, a project partner is typically entitled
to receive the balance of the net proceeds from the sale of carbon credits
(i.e., on average 75% to 85%).
Outlook
In 2024, Carbon Streaming continues to reposition itself for long-term success.
The Company expects to increase cash flow generation through the sale of carbon
credits from several streaming agreements, including the Community Carbon
Stream, Waverly Biochar Stream, the Sustainable Community Stream and the
Nalgonda Rice Farming Stream. Additionally, the Company continues its ongoing
corporate restructuring, first initiated in 2023, with a focus on cash flow
optimization through the reduction of operating expenses and a reassessment of
our existing streams and royalties. The steps taken by the Company to date,
including a reduction in headcount and the termination of consulting contracts,
have resulted in significant reductions to ongoing operating expenses. Moreover,
the Company has amended several of its carbon credit streaming agreements to
improve stream economics and protect against downside risk. In 2024, the Company
amended the terms of the Sheep Creek Reforestation Stream and the Community
Carbon Stream, and in 2023, amended the terms of the Nalgonda Rice Farming
Stream, Waverly Biochar Stream and Magdalena Bay Blue Carbon Stream. In
addition, the Company is continuing to evaluate all legal avenues to protect its
investment in the Rimba Raya project and will strictly enforce its legal and
contractual rights under the Rimba Raya Stream in response to recent
developments in Indonesia.
Carbon Streaming also aims to continue growing and diversifying its portfolio
with leading project developers and to be a partner of choice for buyers seeking
to support high-integrity carbon projects. Voluntary carbon markets have the
potential to mobilize finance to address the gaps in funding for climate
projects and act as a complementary tool to other climate action activities.
Carbon Streaming believes that its strategy will position the Company as an
industry leader who will be a go-to source of carbon credits in the voluntary
market.
Q1 2024 Results Conference Call Details
The Company's management team will host an interactive audio call on Friday, May
17, 2024, at 11:00 a.m. ET to provide a brief company update. Participants may
join by dialing +1 289-514-5100 or toll free from North America at
+1 800-717-1738. An audio replay of the conference call will be available on the
Company website (https://www.carbonstreaming.com/news-media/#events) until
11:59 p.m. ET on June 17, 2024.
About Carbon Streaming
Carbon Streaming (https://www.carbonstreaming.com/) aims to accelerate a net-
zero future. We pioneered the use of streaming transactions, a proven and
flexible funding model, to scale high-integrity carbon credit projects to
advance global climate action and additional United Nations Sustainable
Development Goals. This approach aligns our strategic interests with those of
project partners to create long-term relationships built on a shared commitment
to sustainability and accountability and positions us as a trusted source for
buyers seeking high-quality carbon credits.
The Company's focus is on projects that have a positive impact on the
environment, local communities, and biodiversity, in addition to their carbon
reduction or removal potential. The Company has carbon credit streams and
royalties related to over 20 projects around the world, including high-integrity
removal, reduction and avoidance projects from nature-based, agricultural,
engineered and community-based methodologies.
To receive corporate updates via e-mail, please subscribe here
(https://www.carbonstreaming.com/#sign-up).
ON BEHALF OF THE COMPANY:
Justin Cochrane, President & Chief Executive Officer
Tel: 647.846.7765
info@carbonstreaming.com (mailto:info@carbonstreaming.com)
www.carbonstreaming.com (https://www.carbonstreaming.com/)
Investor Relations
investors@carbonstreaming.com (mailto:investors@carbonstreaming.com)
Media
media@carbonstreaming.com (mailto:media@carbonstreaming.com)
Performance Measures
Average realized price per purchased carbon credit sold
Management uses the "average realized price per purchased carbon credit sold"
performance measure to better understand the price realized in each reporting
period for carbon credit sales. Average realized price per purchased carbon
credit sold is calculated by dividing the Company's revenue from sale of
purchased carbon credits by the quantity of purchased carbon credits sold.
Average realized price per purchased carbon credit sold does not incorporate
proceeds from the sale of carbon credits delivered under the Company's carbon
credit streaming agreements, and only incorporates revenue from the sale of
purchased carbon credits.
Three months Three months
ended ended
(Dollar figures expressed in USD thousands) March 31, 2024 March 31, 2023
-------------------------------------------------------------------------------
Revenue from sale of purchased carbon credits $ 488 $ 21
Number of purchased carbon credits sold (carbon
credits) 93,772 2,496
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Average realized price per purchased carbon
credit sold ($/carbon credit) $ 5.20 $ 8.46
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Cost per purchased carbon credit sold
Management uses the "cost per purchased carbon credit sold" performance measure
to assess the Company's profitability in relation to the average realized price
per purchased carbon credit sold and believes that certain investors can use
this information to evaluate the Company's performance in comparison to other
carbon credit streaming companies. Cost per purchased carbon credit sold is
calculated by dividing the Company's cost of purchased carbon credits sold,
excluding inventory write-downs, by the quantity of purchased carbon credits
sold. Cost per purchased carbon credit sold does not incorporate ongoing
delivery payments from the sale of carbon credits delivered under the Company's
carbon credit streaming agreements, and only incorporates the cost of purchased
carbon credits sold.
Three months Three months
ended ended
(Dollar figures expressed in USD thousands) March 31, 2024 March 31, 2023
-------------------------------------------------------------------------------
Cost of purchased carbon credits sold $ 399 $ 12
Number of purchased carbon credits sold (carbon
credits) 93,772 2,496
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Cost per purchased carbon credit sold ($/carbon
credit) $ 4.26 $ 5.00
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Non-IFRS Measures
Adjusted Net Loss and Adjusted Loss Per Share
The term "adjusted net loss" in this news release is not a standardized
financial measure under IFRS and therefore may not be comparable to similar
measures presented by other companies where similar terminology is used. These
non-IFRS measures should not be considered in isolation or as a substitute for
measures of performance, cash flows and financial position as prepared in
accordance with IFRS. Management believes that these non-IFRS measures, together
with performance measures and measures prepared in accordance with IFRS, provide
useful information to investors and shareholders in assessing the Company's
liquidity and overall performance.
Adjusted net loss is calculated as net and comprehensive loss and adjusted for
the revaluation of carbon credit streaming and royalty agreements, the
revaluation of warrant liabilities, the revaluation of derivative liabilities,
the revaluation of the convertible note, impairment loss and the corporate
restructuring which the Company views as having a significant non-cash or non-
continuing impact on the Company's net and comprehensive loss calculation and
per share amounts. Adjusted net loss is used by the Company to monitor its
results from operations for the period.
The following table reconciles net and comprehensive loss to adjusted net loss:
Three months Three months
ended ended
(Dollar figures expressed in USD thousands) March 31, 2024 March 31, 2023
-------------------------------------------------------------------------------
Net loss and comprehensive loss $ (35,771 ) $ (972 )
Adjustment for non-continuing or non-cash
settled items:
Revaluation of carbon credit streaming and
royalty agreements 33,136 (711 )
Revaluation of warrant liabilities (334 ) (1,181 )
Revaluation of derivative liabilities - -
Corporate restructuring 1,373 -
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Adjusted net loss (1,596 ) (2,864 )
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Loss per share (Basic and Diluted) ($/share) (0.75 ) (0.02 )
-------------------------------------------------------------------------------
Adjusted net loss per share (Basic and Diluted)
($/share) (0.03 ) (0.06 )
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Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements and forward-
looking information (collectively, "forward-looking information") within the
meaning of applicable securities laws. All statements, other than statements of
historical fact, that address activities, events or developments that the
Company believes, expects or anticipates will or may occur in the future, are
forward-looking information, including, without limitation, statements regarding
the Company's strategic positing; the Company's expected restructuring
strategies and expense reductions and savings from operating cost reduction
measures; statements with respect to cash flow optimization and generation; its
sales strategy; supporting the Company's carbon streaming and royalty partners;
timing and the amount of future carbon credit generation and emission reductions
and removals from the Company's existing streaming and royalty agreements;
statements with respect to the projects in which the Company has streaming and
royalty agreements in place; statements with respect to the Company's growth
objectives; statements with respect to execution of the Company's portfolio and
partnership strategy; and statements with respect to the status of the
Concession License held by PT Rimba and the evaluation of legal avenues to
protect the Company's investment in the Rimba Raya project and to enforce its
legal and contractual rights.
When used in this news release, words such as "estimates", "expects", "plans",
"anticipates", "will", "believes", "intends" "should", "could", "may" and other
similar terminology are intended to identify such forward-looking statements.
This forward-looking information is based on the current expectations or beliefs
of the Company based on information currently available to the Company. Forward-
looking information is subject to a number of risks and uncertainties that may
cause the actual results of the Company to differ materially from those
discussed in the forward-looking information, and even if such actual results
are realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, the Company. They should not
be read as a guarantee of future performance or results, and will not
necessarily be an accurate indication of whether or not such results will be
achieved. Factors that could cause actual results or events to differ materially
from current expectations include, among other things: statements with respect
to the status of the Concession License held by PT Rimba with the MOEF; general
economic, market and business conditions and global financial conditions,
including fluctuations in interest rates, foreign exchange rates and stock
market volatility; volatility in prices of carbon credits and demand for carbon
credits; change in social or political views towards climate change, carbon
credits and ESG initiatives and subsequent changes in corporate or government
policies or regulations and associated changes in demand for carbon credits;
limited operating history for the Company's current strategy; risks arising from
competition and future acquisition activities; concentration risk; inaccurate
estimates of growth strategy; dependence upon key management; impact of
corporate restructurings; reputational risk; failure or timing delays for
projects to be registered, validated and ultimately developed and for emission
reductions or removals to be verified and carbon credits issued (and other risks
associated with carbon credits standards and registries); foreign operations and
political risks including actions by governmental authorities, including changes
in or to government regulation, taxation and carbon pricing initiatives;
uncertainties and ongoing market developments surrounding the validation and
verification requirements of the voluntary and/or compliance markets; due
diligence risks, including failure of third parties' reviews, reports and
projections to be accurate; dependence on project partners, operators and
owners, including failure by such counterparties to make payments or perform
their operational or other obligations to the Company in compliance with the
terms of contractual arrangements between the Company and such counterparties;
failure of projects to generate carbon credits, or natural disasters such as
flood or fire which could have a material adverse effect on the ability of any
project to generate carbon credits; volatility in the market price of the
Company's common shares or warrants; the effect that the issuance of additional
securities by the Company could have on the market price of the Company's common
shares or warrants; global health crises, such as pandemics and epidemics; and
the other risks disclosed under the heading "Risk Factors" and elsewhere in the
Company's Annual Information Form dated as of March 27, 2024 filed on SEDAR+ at
www.sedarplus.ca (http://www.sedarplus.ca).
Any forward-looking information speaks only as of the date of this news release.
Although the Company believes that the assumptions inherent in the forward-
looking information are reasonable, forward-looking information is not a
guarantee of future performance and accordingly undue reliance should not be put
on such statements due to the inherent uncertainty therein. Except as may be
required by applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
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