Acceleware Provides RF XL Commercial-Scale Pilot Update and Announces Non-Brokered Private Placement of Units
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Calgary, AB, Canada – June 6, 2023 – Acceleware Ltd. (“Acceleware” or the “Company”) (TSX-V: AXE), is pleased to provide an update on the status of the heating well workover program at its commercial-scale RF XL pilot project at Marwayne, Alberta (the “Pilot”). The Company is also announcing a non-brokered private placement of units (the “Units”), at a price of $0.23 per Unit (the “Unit Price”), for gross proceeds of up to $2,000,000 (the “Private Placement”).
The RF XL team has continued to work through the heating well workover project since closing the last financing of the Company for $1.8 million in November 2022. At that time, the Company was also seeking non-dilutive financial support from partners and funders. As a result, Acceleware was able to secure $900,000 in non-repayable funding from Alberta Innovates (announced December 2022) to help cover the cost of the workover. The Company continues to actively source additional non-dilutive funding.
During the Pilot workover project, the team was able to complete an inspection of the removable and non-removeable components of the proprietary down-hole RF XL system. The inspection activities included visual inspection, various electrical and mechanical measurements, down-hole video analysis and other engineering techniques to obtain detailed data on the condition of the components. This inspection enabled the team to identify several opportunities that are expected to improve the performance of the RF XL system and rectify issues that required repair. These upgrades and repairs would not have been possible without pausing operations to perform the replacement of the distributed temperature sensing system (“DTS”) and have resulted in the addition of valuable IP.
“The Acceleware team has performed extensive analysis and planning, working closely with service partners and operating partners to develop an appropriate rework and upgrade plan for this final stage of repairs, said Geoff Clark, Chief Executive Officer of Acceleware. “Having proven our Clean Tech Inverter functionality for over six months at the RF XL pilot site in 2022, we are keen to get the downhole portion of the RF XL system back up and heating as soon as possible to accomplish our goals for the pilot.”
The requisite upgrades and repairs are being completed in conjunction with the original DTS replacement work. Upon successful completion, the Company expects to be able to restart heating at the site.
Dr. Michal Okoniewski, Chief Scientific Officer, said “We have a high degree of confidence that the due diligence involved in this workover will allow us to achieve our goal of continuing to increase the amount of power we can inject into the reservoir, and in turn show a meaningful increase in reservoir temperature within a few months of restarting operations.”
Clean Tech Inverter (CTI) Update
As announced on September 7, 2022, Acceleware is working to adapt the Clean Tech Inverter (“CTI”) used at the Pilot to decarbonize and lower the cost of other heavy emitting industrial heating applications.
The Company is working on a collaboration with Aurora Hydrogen to design a CTI based radio frequency (“RF”) heating system for their hydrogen production technology, which is based on a methane pyrolysis reaction. The goal of this project is for Aurora to have a highly scalable, low-cost method of producing hydrogen relative to competitors, enabled by CTI. Acceleware will continue to develop a CTI that is specifically suited to hydrogen production to ensure that the opportunity for the CTI to become part of the hydrogen economy is maximized.
The Company has also commenced work on a technology development project involving RF heating utilizing CTI technology for agriculture and food drying applications. The intended outcome of the project is to demonstrate the ability of CTI to economically decarbonize agricultural drying at a commercial scale. According to DataIntelo, the global market for agricultural industrial dryers was valued at over $11 billion USD per year in 2017.
Acceleware also began project work within the mining sector as announced by our client, International Minerals Innovation Institute, on May 17, 2023. The intention of the project is to validate the potential to use radio frequency energy from the CTI to dry potash ore and other mineral commodities.
Mr. Clark said “We have been talking about the potential for CTI to economically decarbonize multiple heavy-emitting industrial heating processes for several years. Having validated the capabilities of the CTI at our Pilot we are ready to expand the use of the CTI to other heavy emitting applications. We believe this diversification can lead to meaningful emissions reductions as well as growth opportunities for the CTI platform. Cost effective electrification of industrial heat at very large scale is urgently needed if we are to meet global GHG emission reduction goals, and Acceleware believes the CTI is a technology that can make a significant impact on this front.”
Details of the Private Placement
Pursuant to the Private Placement, each Unit will consist of (i) one common share in the capital of the Company (a “Common Share”); and (ii) one Common Share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to acquire one (1) Common Share of Acceleware at $0.30 for a period of 24-months from the date of issuance of the Warrant. In the event that the Common Shares trade at a closing price at or greater than $0.69 per Common Share for a period of thirty (30) consecutive trading days, Acceleware may accelerate the expiry date of the Warrants by giving notice to the holders thereof, and in such case, the Warrants will expire on the 30th day after the date on which such notice is given by Acceleware.
Acceleware expects the Private Placement to close on or about June 27, 2023 (the “Closing Date”).
Acceleware intends to use the net proceeds of the Private Placement to fund a portion of the Pilot workover, to fund research and development related to new CTI industrial heating applications including those mentioned above, and for general corporate purposes.
Completion of the Private Placement is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange (the “TSXV”). The TSXV has not approved the Unit Price and this remains subject to change. Purchasers of the Units will be subject to a four months plus one day hold period in accordance with securities legislation.
Acceleware expects certain insiders to participate in the Private Placement, which will make the Private Placement a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Acceleware intends to rely on the exemptions from the formal valuation and minority approval requirements of MI 61-101.
Acceleware is an innovator of clean-tech decarbonization technologies comprised of two business units: Radio Frequency Heating Technology and Seismic Imaging Software.
Acceleware is piloting RF XL, its patented low-cost, low-carbon production technology for heavy oil and oil sands that is materially different from any heavy oil recovery technique used today. Acceleware's vision is that electrification of heavy oil and oil sands production can be made possible through RF XL, supporting a transition to much cleaner energy production that can quickly bend the emissions curve downward. With clean electricity, Acceleware’s RF XL technology could eliminate greenhouse gas (GHG) emissions associated with heavy oil and oil sands production. RF XL uses no water, requires no solvent, has a small physical footprint, can be redeployed from site to site, and can be applied to a multitude of reservoir types. Acceleware is also actively developing partnerships for RF heating of other industrial applications using the Company’s proprietary CTI.
Acceleware and Saa Dene Group (co-founded by Jim Boucher) have created Acceleware | Kisâstwêw to raise the profile, adoption, and value of Acceleware technologies. The shared vision of the partnership is to improve the environmental and economic performance of the energy sector by supporting ideals that are important to Indigenous peoples, including respect for land, water, and clean air.
The Company’s seismic imaging software solutions are state-of-the-art for high fidelity imaging, providing the most accurate and advanced imaging available for oil exploration in complex geologies. Acceleware is a public company listed on Canada’s TSX Venture Exchange under the trading symbol “AXE”.
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, “anticipates”, “plans”, “continues”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations or negatives of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might”, “shall” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.
In this news release, forward-looking statements relate to, among other things, statements relating to the benefits of RF XL, future operation of the Pilot, prospective performance of the Company, the status and advancement upgrades and repairs, the anticipated development, application and market potential of CTI, the receipt of regulatory approvals for the Private Placement (including TSXV approvals) and the timing thereof, statutory hold periods, the terms and conditions of the Private Placement, the Closing Date for the Private Placement, the anticipated use of proceeds from the Private Placement and the participation of related parties in the Private Placement. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The material facts and assumptions include obtaining approval of the TSXV of the proposed Private Placement, the availability of certain prospectus exemptions in respect of the Private Placement and the intended use of proceeds remaining in the best interests of the Company. Actual results may vary from the forward-looking information in this news release due to certain material risk factors. The Company cautions the reader that the above list of risk factors is not exhaustive and additional risk factors risk factors are described in detail in Acceleware’s continuous disclosure documents, which are filed on SEDAR at www.sedar.com. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Due to the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information:
Geoff Clark, CEO