UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
40-F
OR
For the fiscal year ended
Commission File Number:
N/A
(Province or Other Jurisdiction
of Incorporation or
Organization)
(Primary Standard
Industrial Classification Code)
(I.R.S. Employer Identification
No.)
,
,
CANADA
Attention:
Chief Executive Officer
Tel:
-
-
937-0002
National Registered Agents, Inc.
,
Tel:
-
572-3133
Securities registered or to be registered pursuant to section 12(b) of the Act:
Name of Each Exchange on Which
Title of Each Class
Trading Symbol(s)
Registered:
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
For annual reports, indicate by check mark the information filed with this Form:
Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual report:
Title of Each Class
Number of outstanding shares
Common Shares, no par value
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant
was required to submit and post such files).
Yes
☒
☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
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EXPLANATORY NOTE
PyroGenesis Canada Inc. (the “Company” or the “Registrant”) is a Canadian issuer that is permitted, under the
multijurisdictional disclosure system adopted in the United States, to prepare this Annual Report on Form 40-F pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with Canadian
disclosure requirements. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. Equity
securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act
pursuant to Rule 3a12-3.
FORWARD LOOKING STATEMENTS
This Annual Report, including the exhibits attached hereto and incorporated herein may contain “forward-looking
statements” within the meaning of applicable Canadian and United States securities laws. All statements other than
statements of historical fact are forward-looking statements. The forward-looking statements contained in this Annual Report
are made only as of the date hereof. The forward-looking statements contained in the exhibits incorporated by reference
into this Annual Report are made only as of the respective dates set forth in such exhibits. The Registrant does not have,
or undertake, any obligation to update or revise any forward -looking statements whether as a result of new information,
subsequent events or otherwise, unless otherwise required by law.
Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”
or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not
anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”,
“could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are based on a number of
material assumptions, which management of the Registrant believe to be reasonable, including, but not limited to, the
Registrant’s ability to generate sufficient cash flow from operations and obtain financing, if needed, on acceptable terms or
at all; the general economic, financial market, regulatory and political conditions in which the Registrant operates; the
interest of potential purchasers in the Registrant’s products; anticipated and unanticipated costs; the government regulation
of the Registrant’s activities and products; the timely receipt of any required regulatory approvals; the Registrant’s ability to
obtain qualified staff, equipment and services in a timely and cost efficient manner; the Registrant’s ability to conduct
operations in a safe, efficient and effective manner; and the Registrant’s expansion plans and timeframe for completion of
such plans
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of the Registrant to be materially different from those
expressed or implied by such forward-looking information. Although the Registrant has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be
other factors that cause results not to be as anticipated, estimated, intended or projected. There is no assurance that such
statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Readers should
carefully consider the maters as further discussed under the heading "Risk Factors" in the Registrant’s Annual Information
Form for the year ended December 31, 2020, which is filed as Exhibit 99.1 hereto and incorporated by reference herein
The forward-looking statements contained in, or incorporated by reference into, this Form 40-F are made as of the date of
this Form 40-F or as otherwise specified. Except as required by applicable securities law, the Registrant undertakes no
obligation to update publicly or otherwise revise any forward -looking statements or the foregoing list of factors affecting
those statements, whether as a result of new information, future events or otherwise or the foregoing lists of factors affecting
this information. All forward-looking statements contained in this Form 40-F are expressly qualified in their entirety by this
cautionary statement.
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this
report in accordance with Canadian disclosure requirements, which are different from those of the United States. The
Registrant prepares its financial statements, which are filed with this Form 40-F in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
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PRINCIPAL DOCUMENTS
Annual Information Form
The Registrant’s Annual Information Form for the fiscal year ended December 31, 2022 is filed as Exhibit 99.1 and
incorporated by reference in this Annual Report on Form 40-
F.
Audited Annual Financial Statements
The audited consolidated financial statements of the Registrant for the fiscal year ended December 31, 2022, including the
Independent Auditor’s Report with respect thereto, are filed as Exhibit 99.3 and incorporated by reference in this Annual
Report on Form 40-
F.
Management Discussion and Analysis
The Registrant’s Management Discussion and Analysis for the fiscal year ended December 31, 2022 is filed as Exhibit 99.2
and incorporated by reference in this Annual Report on Form 40-
F.
CERTIFICATIONS AND DISCLOSURES REGARDING CONTOLS AND PROCEDURES
Certifications
The required certifications are attached hereto as Exhibits 99.4, 99.5, 99.6, and 99.7.
Disclosure Controls and Procedures
The information provided in the section entitled “Controls and Procedures” under the sub-heading “Disclosure Controls and
Procedures” contained in the 2022 MD&A filed as Exhibit 99.2 to this Annual Report on Form 40-F is incorporated by
reference herein.
Management’s Annual Report on Internal Control over Financial Reporting
The information provided in the section entitled “Controls and Procedures” under the sub-headings “Management’s Annual
Report on Internal Controls over Financial Reporting and Remediation Plan” contained in the 2022 MD&A filed as
Exhibit 99.2 to this Annual Report on Form 40-F is incorporated by reference herein.
Attestation Report of Independent Auditor
In accordance with the United States Jumpstart Our Business Startup Act (the “JOBS Act”) enacted on April 5, 2012, the
Registrant qualifies as an “emerging growth company” (an “EGC”), which entitles the Registrant to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not EGCs.
Specifically, the JOBS Act defers the requirement to have the Registrant’s independent auditor assess the Registrant’s
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. As such, the Registrant is
exempted from the requirement to include an auditor attestation report in this Form 40-F for so long as the Registrant
remains an EGC, which may be for as long as five years following its initial registration in the United States.
Changes in Internal Control over Financial Reporting
The information provided in the section entitled “Controls and Procedures” under the sub-heading “Changes in Internal
Controls over Financial Reporting” contained in the 2022 MD&A filed as Exhibit 99.2 to this Annual Report on Form 40-F is
incorporated by reference herein.
NOTICES PURSUANT TO REGULATION BTR
The Registrant was not required by Rule 104 of Regulation BTR to send any notices to any of its directors or executive
officers during the fiscal year ended December 31, 2022.
AUDIT COMMITTEE FINANCIAL EXPERT
The board of directors of the Registrant has determined that Mr. Andrew Abdalla, the chair of the Registrant’s audit
committee, qualifies as an audit committee financial expert for purposes of paragraph (8) of General Instruction B to
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Form 40-F. The board of directors has further determined that Mr. Abdalla is also independent, as that term is defined in
the corporate governance requirements of the Nasdaq Capital Market (“Nasdaq”). The Commission has indicated that the
designation of Mr. Abdalla as an audit committee financial expert does not make him an "expert" for any purpose, impose
any duties, obligations or liabilities on him that are greater than those imposed on members of the audit committee and the
board of directors who do not carry this designation or affect the duties, obligations or liabilities of any other member of the
audit committee or the board of directors.
CODE OF ETHICS
The Registrant has adopted a written Code of Business Conduct and Ethics (the "Code") that is applicable to all employees,
contractors, consultants, officers and directors of the Registrant, and is filed as an exhibit to this Annual Report on
Form 40-
F.
All departures from, all amendments to the Code, and all waivers of the Code with respect to any of the senior officers
covered by it, which waiver may be made only by the board of directors of the Registrant in respect of senior officers, will
be disclosed as required. The Code is located on the Registrant’s website at www.pyrogenesis.com. Information contained
in or otherwise accessible through the Registrant’s website does not form part of this Form 40-F, and is not incorporated
into this Form 40-F by reference.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The fees paid to the independent auditor are included under the heading "Audit Committee - External Fees by Audit
Category" in the AIF, which is filed as Exhibit 99.1 hereto and incorporated by reference herein.
The Registrant’s audit committee has adopted a pre-approval policy. Under this policy, all non-audit services must be pre-
approved by the Audit Committee. The Registrant did not rely on the de minimis exemption provided by
Section (c)(7) (i)(C) of Rule 2-01 of Regulation S-X.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant has not entered into any “off-balance sheet arrangements”, that have or are reasonably likely to have a
current or future effect on the Registrant’s financial condition, changes in financial condition, revenues, expenses, results
of operations, liquidity, capital expenditures or capital resources that are material to investors.
CONTRACTUAL OBLIGATIONS
Below is a tabular disclosure of the Registrant’s contractual obligations at December 31, 2022:
Total
Carrying
contractual
Less than
value
amount
one year
2-3 years
4-5 years
$
$
$
$
$
$
Bank indebtedness
991,902
991,902
991,902
—
—
—
Accounts payable and
accrued liabilities
9,620,591
9,620,591
9,620,591
—
—
—
Term loans
389,987
520,444
59,917
190,587
180,000
89,940
Balance due on
business combination
3,907,775
4,137,820
2,177,800
1,960,020
—
—
Lease liabilities
5,533,694
6,745,329
2,984,243
1,165,281
703,816
1,891,989
20,443,949
22,016,086
15,834,453
3,315,888
883,816
1,981,929
IDENTIFICATION OF THE AUDIT COMMITTEE
The Registrant’s Board of Directors has a separately designated standing Audit Committee established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Andrew Abdalla (Chair of the
Committee), Robert Radin and Ben Naccarato.
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MINE SAFETY DISCLOSURE
Not applicable
NASDAQ STATEMENT OF CORPORATE GOVERNANCE DIFFERENCES
The Registrant is a “foreign private issuer” as defined in Rule 3b-4 under Exchange Act and its common shares are listed
on Nasdaq and the Toronto Stock Exchange (the “TSX”). Rule 5615(a)(3) of Nasdaq Stock Market Rules permits foreign
private issuers to follow home country practices in lieu of certain provisions of Nasdaq Stock Market Rules. A foreign private
issuer that follows home country practices in lieu of certain provisions of Nasdaq Stock Market Rules must disclose ways in
which its corporate governance practices differ from those followed by domestic companies either on its website or in the
annual report that it distributes to shareholders in the United States. A description of the ways in which the Registrant’s
governance practices differ from those followed by domestic companies pursuant to Nasdaq Stock Market Rules are as
follows:
Majority Independent Directors
: The Registrant does not follow Nasdaq Stock Market Rule 5605(b)(1), which requires
listed companies to have a majority of the board of directors comprised of “Independent Directors” as defined in Nasdaq
Stock Market Rule 5605(a)(2). In lieu of following Nasdaq Stock Market Rule 5605(b)(1), the Registrant follows the rules of
the TSX.
Executive Sessions
: The Registrant does not follow Nasdaq Stock Market Rule 5605(b)(2), which requires listed
companies to have their Independent Directors regularly schedule meetings at which only Independent Directors are
present. In lieu of following Nasdaq Stock Market Rule 5605(b)(2), the Registrant follows the rules of the TSX.
Audit Committee Charter
: The Registrant does not follow Nasdaq Stock Market Rule 5605(c)(1), which requires listed
companies to adopt a formal written audit committee charter that specifies the scope of its responsibilities and the means
by which it carries out those responsibilities; the outside auditor's accountability to the audit committee; and the audit
committee's responsibility to ensure the independence of the outside auditor. In lieu of following Nasdaq Stock Market Rule
5605(c)(1), the Registrant follows the rules of the TSX.
Compensation Committee Charter
: The Registrant does not follow Nasdaq Stock Market Rule 5605(d)(1), which requires
listed companies to adopt a formal written compensation committee charter and have a compensation committee review
and reassess the adequacy of the charter on an annual basis. In lieu of following Nasdaq Stock Market Rule 5605(d)(1),
the Registrant follows the rules of the TSX.
Composition of Compensation Committee
: The Registrant does not follow Rule Nasdaq Stock Market 5605(d)(2), which
requires listed companies to have a compensation committee comprised of at least two members, with each member being
an Independent Director as defined under Nasdaq Stock Market Rule 5605(a)(2). In lieu of following Nasdaq Stock Market
Rule 5605(d)(2), the Registrant follows the rules of the TSX.
Independent Director Oversight of Director Nominations
: The Registrant does not follow Nasdaq Stock Market Rule
5605(e)(1), which requires Independent Director involvement in the selection of director nominees, by having a nominations
committee comprised solely of Independent Directors. In lieu of following Nasdaq Stock Market Rule 5605(e)(1), the
Registrant follows the rules of the TSX.
Nominations Committee Charter
: The Registrant does not follow Nasdaq Stock Market Rule 5605(e)(2), which requires
listed companies to adopt a formal written nominations committee charter or board resolution, as applicable, addressing the
director nomination process and such related matters as may be required under the federal securities laws. In lieu of
following Nasdaq Stock Market Rule 5605(e)(2), the Registrant follows the rules of the TSX.
Shareholder Meeting Quorum Requirements
: The Registrant does not follow Nasdaq Stock Market Rule 5620(c) which
requires that the minimum quorum requirement for a meeting of shareholders be 33 1/3 % of the outstanding common
shares. In addition, Nasdaq Stock Market Rule 5620(c) requires that an issuer listed on Nasdaq state its quorum requirement
in its by-laws. In lieu of following Nasdaq Stock Market Rule 5620(c), the Registrant follows the rules of the TSX.
The foregoing is consistent with applicable laws, customs and practices in Canada.
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by
the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to:
6
the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an Annual Report on
Form 40-F arises; or transactions in said securities.
DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS
Not applicable.
CONSENT TO SERVICE OF PROCESS
The Registrant has previously filed with the Commission a written irrevocable consent and power of attorney on Form F-X.
Any change to the name or address of the Registrant’s agent for service shall be communicated promptly to the Commission
by amendment to the Form F-X referencing the file number of the Registrant.
The following documents are being filed with the Commission as exhibits to this Form 40-
F.
EXHIBIT INDEX
Exhibit Number
Exhibit Description
99.1
99.2
99.3
99.4
99.5
99.6
99.7
99.8
99.9
101
Interactive Data File
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on
Form 40-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 31, 2023
PYROGENESIS CANADA INC.
By:
/s/ P. Peter Pascali
P. Peter Pascali
Chief Executive Officer
Exhibit 99.1
PYROGENESIS CANADA INC.
ANNUAL INFORMATION FORM
FOR THE YEAR ENDED DECEMBER 31, 2022
Dated March 30, 2023
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TABLE OF CONTENTS
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5
6
6
6
7
7
Year Ended December 31, 2020
7
5.2.
Year Ended December 31, 2021
9
Year Ended December 31, 2022
10
11
12
12
12
16
16
16
20
20
21
21
21
23
23
23
23
8.
Description of Capital Structure
24
24
24
24
24
25
25
25
28
30
31
32
32
32
32
33
33
33
33
33
34
34
34
43
45
47
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1. Explanatory Notes
The information in this annual information form (this “
AIF
”) of PyroGenesis is stated as at December 31, 2022,
unless otherwise indicated.
For an explanation of the capitalized terms and expressions and certain defined terms, please refer to the “Glossary
of Terms” at the end of this AIF.
In this AIF, unless the context otherwise requires, references to the “Company” or “PyroGenesis” refer to
PyroGenesis Canada Inc. together with its subsidiaries.
In this AIF, unless otherwise indicated, all references to “$” are to Canadian dollars, all references to “US$” are to
U.S. dollars, and all references to “€” are to euros. Amounts are stated in Canadian dollars unless otherwise indicated.
This AIF should be read in conjunction with the information contained in the Company’s consolidated financial
statements and related notes for the year ended December 31, 2022, and the management’s discussion and analysis
thereon.
The Company has certain proprietary or contractual rights to certain company names, product names, trade names
and trademarks used in this AIF that are important to its business, including PyroGenesis, PYROGENESIS (LOGO),
PYROGENESIS ADDITIVE, PYROGENESIS ADDITIVE (LOGO) PYROGENESIS ALUMINUM, PYRO GREEN-GAS,
PYRO GREEN-GAS (LOGO), SPHEROGENESIS, NEXGEN, DROSRITE, PUREVAP, SPARC, APT, APT-HP, RPT,
MINIGUN, SPT, PPRS and, PAGV. The Company has omitted the registered trademark (®) and trademark (™) symbols
and any other related symbols for such trademarks and all related trademarks, including those related to specific products
or services, when used in this AIF.
2. Forward-Looking Statements
This AIF contains forward-looking statements and forward-looking information (collectively, “
forward-looking
statements
”) within the meaning of applicable securities legislation. All statements other than statements of historical fact
contained in this AIF are forward-looking statements, including, without limitation, the Company’s statements regarding its
products and services; the execution of its growth strategy; relations with suppliers and customers; future financial position;
business strategy; potential acquisitions; potential business partnering; litigation; and plans and objectives. In certain cases,
forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or
variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will
be taken”, “occur” or “be achieved” and similar words or the negative thereof. These forward-looking statements are based
on management’s current expectations and are subject to a number of risks, uncertainties, and assumptions, including
market and economic conditions, business prospects or opportunities, future plans and strategies, projections and
anticipated events and trends that affect the Company and its industry. Although management of the Company believes
that the expectations reflected in such forward-looking statements are reasonable and are based on reasonable
assumptions and estimates as of the date hereof, there can be no assurance that these assumptions or estimates are
accurate or that any of these expectations will prove accurate.
Actual results and developments are likely to differ, and may differ materially, from those anticipated by the
Company and expressed or implied by the forward-looking statements contained in this AIF. Such statements are based on
a number of assumptions and risks which may prove to be incorrect. Important assumptions relating to the forward-looking
statements contained in this AIF include, among other things, assumptions concerning:
• the Company’s business strategies, strategic objectives and growth strategy;
• the Company’s expected production volumes, rates and costs;
• the Company’s current and future capital resources and the need for additional financing;
• the Company’s ability to increase sales from new and existing customers, and the results of the successful
completion of the Company’s current projects;
• management’s expectation that the Company will achieve growth and profitability;
6
• the Company’s overall financial performance;
• the Company continuing to maintain sufficient and effective production and research and development;
• there being no significant reduction in the availability of qualified and cost-effective human resources;
• there will be adequate liquidity available to the Company to carry out its operations;
• the Company’s ability to obtain and retain key personnel; and
• the success of intellectual property applications.
By their nature, forward-looking statements require assumptions and are subject to inherent risks and uncertainties
including those discussed herein. There is significant risk that predictions and other forward-looking statements will not
prove to be accurate. Readers are cautioned to not place undue reliance on forward-looking statements made herein
because a number of factors could cause actual future results, conditions, actions or events to differ materially from the
targets, expectations, estimates or intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but
not limited to, the risk factors described under the heading “Risk Factors”. The Company cautions that the foregoing list of
factors is not exhaustive, and that, when relying on forward-looking statements to make decisions with respect to the
Company, investors and others should carefully consider these factors, as well as other uncertainties and potential events,
and the inherent uncertainty of forward-looking statements.
Although the forward-looking statements contained in this AIF are based upon what management currently believes
to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will
be consistent with these forward-looking statements and additional risks and uncertainties discussed in the Company’s
materials filed with the Canadian securities regulatory authorities from time to time, available under the Company’s profile
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements are
provided as of the date of this AIF, and the Company assumes no obligation to update or revise such forward-looking
statements to reflect new events or circumstances except as required under applicable securities laws.
The forward-looking statements contained in this AIF are expressly qualified in their entirety by this cautionary
statement and are made as of the date of this AIF or such other date specified herein.
3. Market and industry data
Unless otherwise indicated, information contained in this AIF concerning the industry and the markets in which the
Company operates, including its general expectations, market position and market opportunity, is based on information from
industry publications and reports generated by several third parties and management estimates. Unless otherwise indicated,
management estimates are derived from publicly available information released by independent industry analysts and third-
party sources, as well as data from the Company’s internal research, and are based on assumptions made by the Company
based on such data and its knowledge of such industry and markets, which the Company believes to be reasonable. These
industry publications and reports generally indicate that the information contained therein was obtained from sources
believed to be reliable, but do not guarantee the accuracy and completeness of such information. The Company has not
independently verified the data in such publications, reports or resources, and such information is inherently imprecise. In
addition, projections, assumptions and estimates of the Company’s future performance and the future performance of the
industry in which the Company operates are necessarily subject to a high degree of uncertainty and risk due to a variety of
factors, including those described under “Forward-Looking Statements” and “Risk Factors”.
4. Corporate Structure
4.1. Name, Address and Incorporation
PyroGenesis is a corporation governed by the provisions of the Canada Business Corporations Act (“
CBCA
”) and
results from an amalgamation completed on July 11, 2011, under the CBCA, of Industrial Growth Income Corporation and
PyroGenesis Canada Inc., a predecessor entity incorporated on June 5, 2006, to form the Company. Prior to the
7
amalgamation, which constituted its qualifying transaction, Industrial Growth Income Corporation was a capital pool
company listed on the TSX-
V.
The Company’s head and registered office is located at 1744 William Street, Suite 200, Montréal, Québec, Canada,
H3J 1R4.
4.2. Subsidiaries
On August 11, 2021, PyroGenesis acquired all of the issued and outstanding shares of Pyro Green-Gas Inc.
(formerly AirScience Technologies Inc.) (“
Pyro Green-Gas
”), a private corporation incorporated under the laws of Canada.
Pyro Green-Gas has three subsidiaries: 1) AirScience Technologies Pvt. Ltd., a private corporation incorporated under the
laws of India; 2) AirScience Italia S.r.l., a private corporation incorporated under the laws of Italy; and 3) Alga-Labs Inc., a
private corporation incorporated under the laws of Canada. Pyro Green-Gas owns 99.99% of the issued and outstanding
shares of AirScience Technologies Pvt. Ltd. and 90.00% of the issued and outstanding shares of AirScience Italia S.r.l.
Alga-Labs Inc. is a wholly owned subsidiary of Pyro Green-Gas.
5. General Development of the Business
The following is a summary of the significant events that have influenced the general development of the business
of the Company over the last three completed years.
5.1. Year Ended December 31, 2020
Business Highlights and Milestones
On March 4, 2020, the Company announced the successful completion testing of a 900 kilowatts plasma torch
system valued at more than $1,000,000 which had been installed pursuant to an agreement entered into on January 7,
2019, between the Company and RISE Energy Technology Center AB, a Swedish company.
On March 24, 2020, the Company announced it had received the first payment of approximately $1.44 million under
the Drosrite International Exclusive Agreement dated August 29, 2019, between Drosrite International LLC (“
Drosrite
International
”), a US-based company, and PyroGenesis (the “
Drosrite International Exclusive Agreement
”). Under the
terms of this agreement, Drosrite International had received the required rights from PyroGenesis to perform Drosrite
International’s obligations under a 2019 agreement it had entered into with Radian Oil & Gas Services Company, an oil and
gas services company operating in the Middle East (the “
Dross Processing Service Agreement
”). For more information
on the Drosrite International Exclusive Agreement, the Dross Processing Services Agreement, and the relationship between
Drosrite International and PyroGenesis, see “Directors and Executive Officers - Conflicts of Interest”.
On April 30, 2020, PyroGenesis announced it had successfully completed the first phase of a multi-phase modeling
contract with a client that aimed at evaluating the performance of PyroGenesis’ proprietary torches in an existing iron ore
industrial furnace. On September 1, 2020, the Company announced the completion and acceptance of its modeling contract,
which demonstrated that replacing fossil fuel burners with PyroGenesis’ proprietary plasma torches could play a significant
role in reducing the client’s greenhouse gas (“
GHG
”) emissions and assist the client in attaining its GHG reduction
objectives.
On June 11, 2020, the Company announced it had signed a second multi-phase torch modeling contract, aimed at
evaluating the performance of PyroGenesis’ proprietary torches in an existing iron ore industrial furnace with the goal of
replacing existing fossil fuel burners with PyroGenesis’ plasma torches.
On August 18, 2020, the Company announced the realization of a development agreement with HPQ Nano Silicon
Powders Inc. (“
HPQ Nano
”), a wholly owned subsidiary of HPQ Silicon Resources Inc. (“
HPQ
”), which aims to transform
silicon into spherical silicon nano powders and nanowires for use in lithium-ion batteries. The agreement, valued at
approximately $3,000,000, includes royalty rights on the future sales of nano silicon powders and wires by HPQ Nano,
royalty rights that can be converted by PyroGenesis into a 50% ownership stake in HPQ Nano.
On September 4, 2020, the Company announced an $11.5 million contract to provide waste destruction systems
for two US Navy ships.
8
On September 22, 2020, the Company announced a business initiative to increases its presence as an on-site
processor of aluminum dross, with the aim to reduce landfill waste, reduce harmful GHG emissions, and recover aluminum
while minimizing the creations of potentially toxic minerals.
On November 24, 2020, the Company announced it had signed a plasma torch contract to provide one high powered
(approximately one megawatt) plasma torch with ancillary equipment to a major iron ore producer in connection with the
pelletization process.
On December 16, 2020, the Company announced it had signed an addition al contract with a US-based tunneling
client to design, manufacture, test, and supply a plasma torch system tailored for tunneling.
Corporate Developments and Financings
On March 18, 2020, the Company completed a $903,000 non-brokered secured convertible loan with Fiducie de
Crédit Mellon Trust (the “
Pascali Trust
”), a trust of which Company’s Chief Executive Officer, P. Peter Pascali, is a trustee,
officer and beneficiary (the “
2020 Convertible Loan
”). The 2020 Convertible Loan bore interest at the rate of 12% per
annum, with interest payable in cash on a quarterly basis, had a September 17, 2021, maturity date, and was convertible
into common shares of the Company at a conversion price of $0.28 per common share. The 2020 Convertible Loan was
secured by a hypothec on the universality of all of the present and after acquired moveable property and assets of the
Company. The 2020 Convertible Loan was subsequently converted in common shares in accordance with its terms on
September 30, 2020, resulting in 3,225,000 common shares being issued. As the 2020 Convertible Loan was provided by
the Pascali Trust, the 2020 Convertible Loan constituted a “related party transaction” as defined in MI 61 101. The related
party transaction was exempt from the formal valuation and minority approval requirements of MI 61-101, as the transaction
had a value of less than 25% of the Company’s market capitalization (calculated in accordance with MI 61-101). The
transaction was unanimously approved by the board of directors of the Company. See “Directors and Executive Officers -
Conflicts of Interest”.
On July 28, 2020, the Company requested that the Pascali Trust convert the 2020 Convertible Loan on or before
September 30, 2020. The Pascali Trust agreed to such request subject to the prepayment of 5 years rent, plus estimated
yearly municipal taxes, no later than December 31, 2020, for a total prepayment of $1,438,530. As a result of the conversion
of the 2020 Convertible Loan, the Company saved approximately $110,000 of interest payments that would otherwise have
been required to be paid under the 2020 Convertible Loan. The agreement with the Pascali Trust in respect of the
prepayment of rent constituted a “related party transaction” as defined in MI 61101. The related party transaction was
exempt from the formal valuation and minority approval requirements of MI 61-101, as the transaction had a value of less
than 25% of the Company’s market capitalization (calculated in accordance with MI 61-101). The transaction was
unanimously approved by the board of directors of the Company. See “Directors and Executive Officers - Conflicts of
Interest”.
On September 1, 2020, PyroGenesis announced that it had acquired 4,000,000 units of HPQ in a private placement
at a price of $0.60 per unit for a total investment $2.4 million. Each unit consists of one common share of HPQ and one
common share of HPQ purchase warrant. Each warrant entitles the Company to purchase one common share of HPQ at a
price of $0.61 for a period of 36 months following the issue date.
On September 22, 2020, at the Company’s annual general meeting, the five then current members of the Board
were re-elected and two additional nominees, Ms. Rodayna Kafal and Mr. Rodney Beveridge, were also elected to the
Board.
On November 10, 2020, the Company closed a bought-deal short form prospectus offering (the “
2020 Public
Offering
”) pursuant to an underwriting agreement dated October 20, 2020, entered into between the Company and Mackie
Research Capital Corporation, as sole underwriter and sole bookrunner. Under the 2020 Public Offering, the Company
issued 3,354,550 units of the Company (“
2020 Units
”) at a price of $3.60 per unit for aggregate proceeds of $12,076,380,
including the full exercise of the over-allotment option by the underwriter. Each unit is comprised of one Common Share
and one-half of one Common Share purchase warrant. Each whole warrant (a “
2020 Public Offering Warrant
”) entitles the
holder thereof to purchase one additional Common Share at an exercise price of $4.50. The 2020 Public Offering Warrants
are governed by a warrant indenture dated November 10, 2020 (the “
2020 Warrant Indenture
”). On March 15, 2021, the
Company announced its exercise of its right under the 2020 Warrant Indenture to accelerate the expiry date of the 2020
Public Offering Warrants to April 14, 2021. The Company paid the underwriter a cash commission equal to 6.5% of the
gross proceeds of the 2020 Public Offering and issued it an aggregate of 191,414 non-transferable compensation options,
which were exercisable into 2020 Units at a price of $3.60 per unit at any time up to 24 months from closing of the 2020
Public Offering.
9
On November 20, 2020, the Common Shares commenced trading on the TSX under the trading symbol “PYR”, at
which time the Common Shares were delisted from the TSX-
V.
On December 22, 2020, PyroGenesis announced it had submitted a formal application to list its Common Shares
on the NASDAQ.
5.2. Year Ended December 31, 2021
Business Highlights and Milestones
On March 17, 2021, PyroGenesis announced that it had received a grant from the Quebec Ministry of the Economy
and Innovation to fund a project aimed at developing a solution to recover residues of spent pot lining, which are produced
in the primary aluminum industry and are considered harmful.
On April 8, 2021, PyroGenesis announced the appointment of Ms. Nannette Ramsey as an independent director.
On April 19, 2021, PyroGenesis unveiled that its additive manufacturing NEXGEN powder production line was
operational and producing powders. PyroGenesis’ NEXGEN plasma atomization system has recorded a production rate
exceeding 25 kg/h, surpassing all published plasma-atomized production rates for titanium known to the Company.
On May 27, 2021, PyroGenesis announced that it had received a grant from Sustainable Development Technology
Canada for the financing of the development of a novel production process to transform quartz into fumed silica using a
plasma reactor, reducing hazardous waste and GHG emissions attributed to the established fumed silica production
process.
On July 6, 2021, PyroGenesis announced the signature of a contract valued at approximately $4 million with HPQ
Silica Polvere Inc. (“
HPQ Polvere
”), a wholly owned subsidiary of HPQ. Under this contract, PyroGenesis was tasked to
design, develop and manufacture a novel one-step plasma-based reactor and process for the conversion of quartz to fumed
silica. The contract includes annual royalty payments by HPQ Polvere to PyroGenesis on future sales arising from the
project and PyroGenesis may, at any time, convert said royalties into a 50% ownership stake in HPQ Polvere.
On August 17, 2021, the Company announced the signing of a $1.2 million contract for two air plasma torch systems
with an existing Asian client. These torches are to be incorporated into the client’s medical waste destruction systems.
On September 22, 2021, PyroGenesis announced that Pyro Green-Gas had been selected to supply its landfill
biogas purification system to Carbonaxion Bioénergies Inc., the promoter of the GNR Neuville project, which is being carried
out at the environmental complex of the Régie régionale de gestion des matières résiduelles de Portneuf.
On October 19, 2021, PyroGenesis announced that it had been awarded an Innovative Solutions Canada phase 2
(prototype development) contract to develop a unique hybrid ceramic powder processing system for the National Research
Council Canada, Canada’s largest federal research and development organization.
On October 20, 2021, PyroGenesis announced the creation PyroGenesis Aluminum, a new division bringing
together PyroGenesis’ aluminum industry offerings to provide the following primary products and services: i) DROSRITE
sales and tolling services; ii) conversion of dross residues into valuable chemicals; iii) upstream applications where plasma-
based solutions are expected to reduce GHG emissions; iv) high powered plasma torches geared to replacing fossil fuel
burners; and v) conversion of spent pot lining residues into a valuable end-product.
On October 28, 2021, PyroGenesis announced that it had been selected to provide a $9.2 million land-based system
to destroy perfluoroalkyl and polyfluoroalkyl substances. The Company would provide its plasma based thermal process
equipment in a two-phase project geared toward providing a land-based system to destroy these substances. On October
7, 2022, the Company announced that contract negotiations had been suspended and discontinued.
On December 8, 2021, PyroGenesis announced the launch of a new zero-carbon emission hydrogen production
project which aims to compete with conventional technologies to produce an environmentally friendly hydrogen. If
successful, PyroGenesis’ new hydrogen production technology would convert methane to hydrogen, thereby creating a
zero-carbon emission hydrogen.
10
Corporate Developments and Financings
During the year, the Company repurchased and cancelled 840,094 common shares at a weighted average price of
$4.96 per share, for total cash considerations of $4,183,617, including commissions of $16,678.
On January 12, 2021, PyroGenesis announced that it intended to implement a normal course issuer bid according
to which the Company could purchase over a twelve-month period up to 5,000,000 common shares (approximately 3.14%
of the then issued and outstanding).
On March 3, 2021, PyroGenesis announced the appointment of Mr. Ben Naccarato as an independent director.
On March 10, 2021, the Company announced that its application to list its Common Shares on the NASDAQ had
been approved. Trading commenced on March 11, 2021, under the ticker symbol “PYR” and trading of its Common Shares
ceased to be traded on the OTCQB. In connection with the NASDAQ listing, the Company announced that, to maintain the
overall independence of the Board of Directors, Mr. Michael Blank resigned as a director and member of the Audit
Committee but would continue to serve as the Company’s acting Chief Financial Officer.
On August 11, 2021, PyroGenesis finalized its strategic acquisition of Pyro Green-Gas and its subsidiaries for a
total cash consideration of approximately $4.4 million. Montreal-based Pyro Green-Gas designs and builds (i) gas upgrading
systems to convert biogas into renewable natural gas (“RNG”), (ii) pyrolysis-gas purification systems, (iii) biogas and landfill-
gas flares and thermal oxidizers, and (iv) systems for the purification of coke-oven gas (a by-product in the primary steel
industry arising from the conversion of coal into coke) into high purity hydrogen. Pyro Green-Gas is also known for its line
of landfill gas flares which reduce GHG emissions from landfills.
On September 20, 2021, PyroGenesis announced that it had been added to the FTSE Global Total Cap Index and
FTSE Global Micro Cap Index. The FTSE Global Total Cap Index is a market-capitalization weighted index representing
the performance of large, mid and small cap stocks, across emerging and developed companies. The FTSE Global Micro
Cap Index provides deep representation of micro cap stocks. Both indexes are used as the basis for performance
benchmarks and investment products, such as funds, derivatives, and exchange-traded funds by investment professionals
globally.
On September 27, 2021, PyroGenesis announced the appointment of Mr. Andre Mainella, as Chief Financial Officer
(CFO) of the Company.
5.3. Year Ended December 31, 2022
Business Highlights and Milestones
On February 2, 2022, PyroGenesis announced the receipt of a US$3,000,000 purchase order for the first of three
10-tonne DROSRITE systems from an existing client.
On February 7, 2022, PyroGenesis announced that it had signed an agreement with a European research center
for the sale of a plasma torch system which will be used to develop a process to convert hydrocarbons, including GHG
producing gases such as methane, into non-hazardous chemicals.
On April 25, 2022, PyroGenesis confirmed that the Company’s DROSRITE dross recovery technology (a total of
seven DROSRITE systems) had been successfully commissioned for Ma’aden Aluminum.
On May 19, 2022, PyroGenesis announced that it had completed a commercial order for titanium powders. The
order derived from the Company’s partnership agreement with Aubert & Duval, a multinational specializing in upscale
metallurgy, and the powder in question was produced at PyroGenesis’ production facility using its NexGen plasma
atomization system.
On September 7, 2022, the Company announced that it had been selected by an international producer of
magnesium metal, to test PyroGenesis’ zero-emission plasma torches as part of their process for transforming mining waste
and recycled minerals into high-value metal.
On October 6, 2022, PyroGenesis confirmed that its Gen3 PUREVAP Quartz Reduction Reactor pilot plant had
completed the month-long power-up process and was initiating the testing phase of its transformation of quartz into high
11
purity silicon. The plant is designed to produce multiple systems that can operate under harsh conditions, including at
extremely high temperatures and under vacuum.
On November 2, 2022, PyroGenesis announced that it had passed its annual quality audit for two key international
standards: ISO 9001:2015, and AS9100D. The audits encompassed all of PyroGenesis’ facilities for the purpose of meeting
compliance with the existing quality management designations.
On November 10, 2022, PyroGenesis announced that it had successfully produced hydrogen from methane using
zero-carbon emission hydrogen production technology.
Corporate Developments and Financings
On October 19, 2022, PyroGenesis announced the completion of a non-brokered private placement consisting of
the issuance and sale of 1,014,600 units of the Corporation at a price of $1.30 per unit, for gross proceeds of $1,318,980
to the Company. Each unit consisted of one Common Share and one warrant entitling the holder thereof to purchase one
Common Share at a price of $1.75 until October 19, 2024.
On November 22, 2022, PyroGenesis received a notice (“Notice”) from the NASDAQ stating that the Company is
not in compliance with the minimum bid price requirement (“Minimum Bid Requirement”) of US$1.00 per share under the
NASDAQ Listing Rule 5550(a)(2) based upon the closing bid price of the Company’s Common Shares for the 30 consecutive
business days prior to the date of the Notice. The Notice has no immediate effect on the listing or trading of the Common
Shares on NASDAQ, and the Company’s operations are not affected by the receipt of the Notice. Under NASDAQ Listing
Rule 5810(c)(3)(A), the Company had 180 calendar days from the date of the Notice, or until May 22, 2023, to regain
compliance with the Minimum Bid Requirement, during which time the Common Shares will continue to trade on NASDAQ.
If at any time before May 22, 2023, the bid price of the Common Shares closes at or above US$1.00 per share for a minimum
of 10 consecutive business days, the Company will regain compliance with the Minimum Bid Requirement. If the Company
does not regain compliance with the Minimum Bid Requirement by May 22, 2023, the Company may be eligible, upon
satisfaction of certain NASDAQ listing requirements, for an additional period of 180 calendar days to regain compliance or
the Common Shares may be subject to delisting from NASDAQ. The Company will closely monitor the situation and is
considering various strategies to regain compliance with the Minimum Bid Requirement under the Nasdaq Listing Rules.
5.4. Recent Developments
On January 10, 2023, PyroGenesis announced a contract to provide its SPARC™ refrigerant waste destruction
system to a subsidiary of The Trust for the Destruction of Synthetic Refrigerants, a New Zealand government -mandated
organization. The project, initially valued at $6 million, aims to assist New Zealand in its stated goals of reducing synthetic
gas emissions by 25% no later than 2035.
On January 12, 2023, PyroGenesis announced an initial contract with a major European multinational chemical, oil,
and gas conglomerate to assess the applicability of PyroGenesis’ plasma torches for use in the client’s chemical production
process.
On January 17, 2023, PyroGenesis announced that Pyro Green-Gas signed a contract with a North American
lithium-ion battery recycler for the delivery of a system to decontaminate the dust generated during the battery recycling
process.
On February 8, 2023, PyroGenesis announced that Mr. Alan Curleigh is returning to lead PyroGenesis’ Board of
Directors as Chair. Mr. P. Peter Pascali stepped down as Chair and will continue to serve as Chief Executive Officer,
President and Director of PyroGenesis. The Board now has eight directors, of whom six are independent.
On March 8, 2022, PyroGenesis announced the completion of a non-brokered private placement consisting of the
issuance and sale of 5,000,000 units of the Company at a price of $1.00 per unit, for gross proceeds of $5,000,000 to the
Company. Mr. Pascali subscribed to 2,500,000 Units under the private placement. Each unit consists of one Common Share
and one warrant entitling the holder to purchase one Common Share at a price of $1.25 until March 7, 2025. The Common
Shares and warrants issued in connection with the private placement as well as the Common Shares underlying the
warrants are subject to a hold period of four months and one day from the date of closing.
12
6. Business of the Company
6.1. General
commercialization of advanced plasma processes and sustainable solutions aimed at reducing GHG and providing
economically attractive alternatives to conventional “dirty” processes. PyroGenesis has created proprietary, patented,
advanced plasma technologies that are being vetted and adopted by industry leaders in five markets: (i) iron ore
pelletization; (ii) aluminum; (iii) waste management; (iv) steel making; and (v) additive manufacturing.
With a team of experienced engineers, scientists and technicians working at its Montreal head office and 3,800 m2
and 2,940 m2 manufacturing facilities, the Company endeavours to continuously innovate and provide original and inventive
cleantech products to the marketplace. Its core competencies allow PyroGenesis to provide plasma torches, plasma waste
processes, high-temperature metallurgical processes, and additive manufacturing powders to the global marketplace. The
operations of PyroGenesis are ISO 9001 and AS9100D certified.
6.2. Products and Services
The Company’s specialized products and services are commercialized to customers operating in a wide range of industries,
including the defense, metallurgical, mining, advanced materials (including 3D printing), oil & gas, and environmental
industries. The products and services of PyroGenesis include:
• Plasma torches systems, used for, among other things, replacing conventional burners in pelletizing of iron
ore furnaces (mining sector) and other industrial furnaces (mainly metallurgy sector);
• Waste destruction and waste-to-energy systems, offered predominantly to customers in the environmental
and defense industries, and for the destruction of end-of-life refrigerants;
• Systems for the recovery of aluminum and other metal from dross (a residue generated by primary and
secondary metal producers), offered mainly to customers in the mining and metallurgical industries;
• Production of high purity spherical metal powders, which are predominantly offered to customers in the
additive manufacturing (also known sometimes as 3D printing) industry;
• Development of processes to produce high purity silicon metals, nano powders and nanowires, offered
predominantly to customers in the mining and metallurgical industries as well as those in the battery
manufacturing and/or disposal business;
• Systems for upgrading of biogas and landfill gas into renewable natural gas, used in the environmental
industry;
• Systems used in the petrochemical and metallurgical industries for the purification of industrial gases,
including the extraction of hydrogen from coke oven gas, the purification of natural gas into high purity
methane, and the purification of pyrolytic gases;
• Development of a process to produce fumed silica, used in the polymer, cosmetics, and paint industries;
• Installation, commissioning, and start-up services; and
• Internally and externally funded research and development projects.
Plasma Torches for Iron Ore Pelletization
PyroGenesis manufactures and commercializes proprietary plasma torches and plasma torch