PyroGenesis Canada (TSX: PYR, NASDAQ: PYR, FRA: 8PY) possesses a plasma technology that helps reduce greenhouse gases (GHG). The company, involved in a multibillion-dollar industry, could become one of the most significant players. Don’t get misled by the stock price’s decrease; it offers an even better opportunity to invest in breakthrough technology.

PyroGenesis Canada (TSX: PYR, NASDAQ: PYR, FRA: 8PY)  is a high-tech company commercializing plasma processes and sustainable solutions which reduce GHG (greenhouse gases). The company’s patented and advanced plasma technologies are being vetted and adopted by multiple multibillion-dollar industry leaders in four massive markets: iron or pelletization, aluminum, waste management, and additive manufacturing. The company holds strong support from renowned establishments, including the US military (since 1999) US and Canadian governments. Let’s discuss plasma now. Plasma enables clean energy, and, explained in 5 steps, plasma combined with PyroGenesis technology consists of heat, purification, reducing composites to original form, altering state, and destruction. According to The Financial Times, this technology is strongly welcomed in the steelmaking and iron business as they account for 24% of all industrial emissions.

Another example is the aluminum business. Global aluminum demand is expected to grow by 80% while the industry struggles to meet carbon reduction targets. Thanks to the company’s Drosrite system, the company will have a 98% metal recovery, and residues can be valorized for re-sale. Proving the company’s technology is crucial for the future, Deloitte Canada ranked PyroGenesis 7^th on the clean technology list of the 2022 technology fast 50TM awards. Eligibility in the Clean Technology category requires applicants to meet the same criteria for Technology Fast 50 nominees, except they must have a minimum revenue of $50,000 in 2018 and $5 million in 2021. PyroGenesis ranked 7^th, with a 518% revenue growth from 2018 to 2021, on this prestigious list.

Another relevant piece of information is PyroGenesis informed HPQ that the first process improvement test produced silicon material from the GEN3 PUREVAP^TM Quartz Reduction Reactor (QRR). This strong result is the first successful process improvement test and the most significant of the program to date, given that it was a 2,500 times scale-up from the GEN2 PUREVAP^TM QRR. During the trial, quartz material was successfully converted into Silicon (Si), a process that validates that the GEN3 QRR, like its much smaller capacity predecessor, the GEN2 PUREVAP^TM QRR, can also produce Silicon (Si) material. It is positive news for both companies, PyroGenesis and HPQ. HPQ is the only company bringing to market a new process for manufacturing silicon perfectly suited to today’s Silicon market’s new demands and realities. Silicon (Si), also known as silicon metal, is one of today’s key strategic materials needed for the decarbonization of the economy and the Renewable Energy Revolution (“RER”). However, silicon does not exist in its pure state and must be extracted from quartz (SiO₂) in what has historically been a capital and energy-intensive process.

"We are now in the ongoing process of continuous improvements of the testing program,” said Mr. Bernard Tourillon, President and CEO of HPQ Silicon Inc. “Our unique and proprietary advanced technology prototype, the GEN3 QRR Pilot Plant, will undergo multiple tests to repeat and, we expect, surpass the results attained with the GEN2 QRR.”

Financial results

PyroGenesis shared on November 14 its financial results for the period ending September 30, 2022. Its revenues subsequently decreased, going down from $23.8M to $15.7M for the nine months timeframe (2021 vs. 2022). It also had higher losses over the same period, ranging from $16M to the top $21M. As of September 30, 2022, the company had twenty contracts with total billings of $25,613,149, which were less than the total costs incurred, and had recognized cumulative revenue of $28,517,892 since those projects began. This compares with fourteen contracts with total billings of $16,676,700, which were less than the total costs incurred and had recognized cumulative revenue of $21,599,410 as of December 31, 2021. On the balance sheet side, PyroGenesis has $2.3M in cash and cash equivalents for a total of $55M in total assets. About liabilities, this data reaches $30.8M. On April 20, 2022, PyroGenesis participated in an HPQ non-brokered private placement by acquiring 6,800,000 units at a price of $0.53 per unit for a total investment of $3,604,000. Each unit consists of one common share of HPQ and one common share purchase warrant. Each of these warrants entitles the company to purchase one common share at $0.60 for a period of 24 months from the closing date of the private placement. The company’s latest private placement occurred on October 19. It completed a non-brokered private placement in which PyroGenesis raised $1.3M through the issuance and sale of 1M shares at a price of $1.30 per share. Each share is entitled to a warrant at an exercise price of $1.75. According to the report, 171M shares are issued, and outstanding

PYR.TO is currently traded around $1 and is close to its 52-week low of $0.94. Because of the decrease in the stock price, the company received a Nasdaq notification letter regarding minimum bid price deficiency. PyroGenesis has 180 calendar days to have its stock price closing above US $1 for a minimum of 10 consecutive days. It is common in the exchange to witness this type of situation. Worldwide factors hit many companies, and NASDAQ is -29% down YoY. PyroGenesis’ team is fully confident it will regain compliance with the NASDAQ listing rules.

Bottom Line

PyroGenesis Canada (TSX: PYR, NASDAQ: PYR, FRA: 8PY) undergoes a decrease in its stock price, but you should consider it as an opportunity to either invest in a breakthrough technology or average down. Recent positive news about the HPQ Silicon Gen3 PUREVAPtt QRR pilot plant brings trust in the technology, proving PyroGenesis combined with HPQ solution will place them as leaders in the sector.

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