Eqtec Regulatory News (EQT)

01 December 2022

EQTEC plc

("EQTEC", the "Company" or the "Group")

Deeside Project SPV Sale and Trading Updates

EQTEC plc (AIM: EQT), a global technology innovator powering distributed, decarbonised, new energy infrastructure through its waste-to-value solutions for hydrogen, biofuels, and energy generation, provides the following update regarding the sale of Deeside WTV Limited ("Deeside WTV") and consequent Company trading update for 2022.

Deeside WTV sale update

Following the Company's announcement on 26 September 2022 that it, with Deeside WTV and Logik Developments Limited ("Logik"), had signed non-binding Heads of Terms ("HoTs") for the acquisition by a publicly quoted, corporate investor (the "Investor") of the project at Deeside, Flintshire, UK that comprises a waste reception plant, anaerobic digestion facility and EQTEC clean syngas technology facility (the "Project"), the Company confirms that it and its partners have been unable to reach mutually acceptable commercial terms with the Investor toward formalising the Project's sale and that further discussions with the Investor will not be pursued.

Since the announcement of the HoTs, the Company has received and is responding to additional interest in the Project from a number of potential funders committed to decarbonised, new infrastructure for waste management and energy generation. Any agreement would be in line with the Company's stated business strategy of focusing its efforts on high-margin technology and innovation services, engaging partners and customers to develop and fund the capital projects that will deploy EQTEC's technologies.

To facilitate the transaction with the Investor, and as announced on 26 September 2022, Deeside WTV and Logik had previously agreed to further extend the longstop date specified in the share purchase agreement signed on 07 December 2020 (as amended on 6 December 2021, 1 April 2022 and 30 June 2022) (the "SPA"), to 28 February 2023 (the "Long Stop Date"). The Company and its partners have agreed that the Long Stop Date is to remain unchanged.

Trading update for the current financial year

As a direct result of the Company's and its partners' having been unable to formalise a contract with the Investor for the sale of the Project, the Company will be unable to recognise within FY 2022 revenues totalling £4.5 million (€5.2 million) related to the Deeside SPV sale.

In light of this, the Company has updated its overall FY 2022 revenue forecast, as presented in its Interim Results on 29 September 2022, to €5 - 7 million. The Company forecasts an updated FY 2022 EBITDA loss in the range of €4 - 5 million. In its Interim Results, the Company noted that both revenue and EBITDA guidance were predicated on the progression of projects with funding, and in particular on progress with the Deeside project.

David Palumbo, CEO of EQTEC, commented:

"On the one hand, it is disappointing to see this negotiation for purchase of the Deeside project fall through, with the consequential impact on our 2022 forecast. On the other hand, we view this setback as temporary and not a major block to progress with the Project. We have already turned to other potential investors and committed ourselves to securing an alternative financing solution quickly. In terms of funder interest, the Company is in a very different position now than a year ago. We have a number of prospective funders interested in the Deeside project, and we increasingly find ourselves speaking with bigger and better organised companies with clearer reasons for working closely with new infrastructure technology providers such as EQTEC. We remain committed to announcing the funding of Deeside in early 2023 and to moving at pace from there toward financial close and construction start."

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended, and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

ENQUIRIES

Further information about the Project

The Project comprises 6.27 hectares of land off Weighbridge Road on Deeside Industrial Estate and adjacent to the Toyota Deeside Engine Plant, in Flintshire, north Wales, UK, on a site that was formerly a Gaz de France power station.

The prospective, multi-technology plant would include a material recovery facility ("MRF") and anaerobic digestion ("AD") facility that would deploy technologies from Anaergia, Inc. ("Anaergia"), with an advanced thermal conversion ("ATC") facility that would deploy EQTEC's syngas technology.

The MRF would process 182,000 tonnes per year of municipal solid waste ("MSW"), separating recyclables and sending them off site for processing, separating biogenic materials for processing at the AD facility and producing refused-derived fuel ("RDF") from the remaining materials, including plastics, for processing by the EQTEC ATC facility. The 2.0 MW AD facility would produce 5.5 million NM3 per year of biomethane, with 17,000 MWh of the gas (c. 29%) exported to Toyota and the remainder exported to the national grid. The 9.9 MW ATC facility would receive 77,000 tonnes per year of RDF from the MRF and produce 77 - 87,000 MWh of electricity per year, of which 27,000 MWh (c. 35%) would be exported to Toyota, with the remainder exported to the national grid. There is additional potential to apply the ATC facility to production of hydrogen, for which initial feasibility work has been undertaken.

At present, the Company is lead developer for the Project, in partnership with Logik, which owns the land on which the Project is being developed. As announced on 28 October 2021, Flintshire County Council's Planning Committee resolved to grant planning permission for the proposed plant. The planning authority's decision follows its prior approval of the site for the original plan of a recycling and AD facility.

The Project is one of three waste-to-energy/fuel projects the Group is developing in the UK, including others at Billingham, Teesside and Southport, Merseyside.

About EQTEC plc

As one of the world's most experienced gasification technology and engineering companies, with a growing track record of delivering operational and commercial success for transforming waste-to-energy through best-in-class technology innovation, engineering and project development, EQTEC brings together design innovation, project delivery discipline and solid commercial experience to add momentum to the global energy transition. EQTEC's proven, proprietary and patented technology is at the centre of clean energy projects, sourcing local waste, championing local businesses, creating local jobs and supporting the transition to localised, decentralised and resilient energy systems.

EQTEC designs, supplies and builds advanced gasification facilities in the UK, EU and US, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of feedstock, including forestry wood waste, vegetation and other agricultural waste from farmers, industrial waste and sludge from factories and municipal waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that can be used for the widest range of applications, including the generation of electricity and heat, production of synthetic natural gas (through methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

EQTEC's technology integration capabilities enable the Group to lead collaborative ecosystems of qualified partners and to build sustainable waste reduction and green energy infrastructure around the world.

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has awarded EQTEC the Green Economy Mark, which recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com.