PyroGenesis Canada Inc (CVE:PYR) (OTCMKTS:PYRNF) is exploring new potential clients for its proprietary waste treatment system after the termination of a previously announced contract.
The Montreal-based company said on Friday that a June 2019 deal with an undisclosed customer for its non-military land-based waste treatment system fell through after the client did not comply with the terms of sale.
The contract, worth nearly C$3.5 million, was terminated after numerous extensions, PyroGenesis said in a statement.
“Regretfully in the course of doing business, this type of event happens at times,” said Peter Pascali, CEO of PyroGenesis. “However, PyroGenesis secures itself from these risks by having payments managed in such a way that our projects remain cash flow positive throughout their completion.”
According to the waste-to-energy manufacturer, the client was obligated to pay a total of 40% of the contract’s value, or C$1.46 million, in down payments by July 31, but after a number of deadline extensions the contract was terminated by PyroGenesis.
The amount received to date from the client, approximately C$839,000, will be accounted for in 3Q 2019, Pascali told investors.
The termination also frees up PyroGenesis from the exclusivity clause in the contract, leaving the firm free to engage with other clients.
PyroGenesis is actively reviewing the judicial and extra-judicial rights and recourses available to it, so that it may protect and safeguard its rights and interests with respect to the client’s failure to fulfill its contractual obligations, Pascali told investors.
The company’s land-based waste system transforms waste into a gaseous fuel that can be used to generate electricity, heat or fuels.
Earlier this month, the company reported that it had received the final signature to initiate a C$20 million contract with Drosrite International LLC. a private waste management technologies company based in New Jersey.
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