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PowerTap Subsidiary Progressus Clean Technologies Signs LOI For Clean Hydrogen JV Pilot With Alkaline Fuel Cell Power Corp.

The Clean Hydrogen Joint Venture Pilot Project Will Seek to Provide the Company With in-Field Proof of Concept and Operational Data

The JV is structured to support the company’s potential future growth, new partnership opportunities and advance a possible solution for global utility companies to blend hydrogen and natural gas.

PowerTap Hydrogen (NEO: MOVE) (OTC: MOTNF) (FRA: 2K6B) provided investors with an update on Monday regarding its 49% owned subsidiary Progressus Clean Technologies. PowerTap reported that Progressus signed a letter of intent (LOI) with Alkaline Fuel Cell Power Corp. (NEO: PWWR) (OTCQB: ALKFF) (FRA: 77R) (WKN: A3CTYF) to complete a joint venture (JV) pilot project. The JV project aims to provide a solution for natural gas utilities to power residential and commercial businesses directly. Alkaline Fuel Cell Power Corp. (AFCP) is a diversified investment platform developing affordable, renewable, and reliable energy assets and cleantech. The JV is intended to provide proof of concept for each company’s technologies and assess the ability to combine various Progressus technologies with AFCP fuel cells to serve residential and small building customers across North America.

Raghu Kilambi, CEO of PowerTap Hydrogen, the 49% parent company of Progressus, commented on the announcement, stating:

“We are very pleased with the development of Progressus’ business since our initial investment in Progressus as initially announced on July 27, 2021.”

Progressus CEO Channce Fuller also commented on the news, saying:

“The missions and combined vision of AFCP and Progressus are very complementary to one another. By leveraging the strengths of both organizations, we can more efficiently and effectively solve the growing need for innovative hydrogen solutions. The proposed JV pilot project with AFCP is an active step towards progressing hydrogen innovation and combining the suite of technologies that will ultimately be needed for global hydrogen solutions in the future.”

Source: Shutterstock

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Conceptual Description of the JV Pilot Project

To reduce CO2 emissions worldwide, gas distribution companies and municipalities are setting-up projects to inject hydrogen into the local gas distribution grid. This gas mixture generally aims to contain up to 20% hydrogen, and its use is targeted for residential and commercial buildings.

AFCP and Progressus will work together to execute a JV pilot project utilizing technologies from each company to provide in-field proof-of-concept, generate operational data that can inform continued development and market opportunities, and establish a platform to support future potential growth and additional partnerships. The exact location of the JV pilot project remains under consideration, but initially, North America will be the focus, with secondary priority given to potential future pilots in Europe.

Progressus’ technology enables the extraction of dilute hydrogen from gas streams, a critical component as utility companies increasingly strive to inject hydrogen into natural gas streams globally. Progressus represents a solution that can extract hydrogen at high efficiencies, complementing AFCP’s low-cost combined heat and power alkaline fuel cell and generator development.

The JV pilot project is designed to use the Progressus hydrogen separation technology to efficiently extract hydrogen at high purities from the existing natural gas grid and then convert the purified hydrogen using either AFCP’s 4 kW Micro-CHP or 4 kW generator to produce electricity, and potentially heat. This project could be put to immediate use in a residential home or commercial building, providing truly zero-emission power. AFCP has already identified interest from natural gas, electric utilities, and municipalities to pilot the concept.

Combining the technologies from both companies offers an ideal potential solution to support the generation of low-carbon energy that contributes to the world’s clean energy transition.

Macro-Economic Backdrop

The energy sector currently accounts for approximately three-quarters of global greenhouse gas emissions and is, therefore, simultaneously capable of averting the worst effects of climate change. To reduce CO2 emissions, gas distribution companies and municipalities are advancing projects that facilitate the injection of hydrogen into the local gas distribution grid as a cleaner energy source.

In the last two years alone, more than two dozen hydrogen injection projects have been announced in the United States, with companies continuing to reinforce additional commitments in early 2022. Further, with the passing of the Inflation Reduction Act (IRA), there is massive momentum building for additional investment in clean hydrogen solutions. Beyond the United States, the largest gas utilities around the globe (SoCalGas, Enbridge, ATCO Gas, Snam SpA, Enagas S.A., and Open Grid Europe, to name a few) are all actively working on projects to inject hydrogen into their natural gas grids.

The proposed pilot project would initially cover one extraction system linked to one 4 kW Micro-CHP or generator system, with expansion to a larger scale in future pilots designed to provide clean hydrogen and power for multiple residential users or commercial applications.

PowerTap Corporate Update

Further to the company’s July 30, 2021, press release, PowerTap announces that it will issue an aggregate of 4,576,600 common shares at a deemed price of $0.10 per share under an agency agreement entered into with Mulberry Capital on October 18, 2021, and July 28, 2021. Mulberry is PowerTap’s exclusive agent with the right to arrange, negotiate and obtain representation for sales in the Middle East. The issuance of shares is being made instead of a USD $350,000 cash payment for the first-anniversary payment due under the Agency Agreement. The common shares are subject to a four-month and one-day hold period from the date of issuance and are subject to the Neo Exchange’s acceptance of final filing documents.

On August 17, 2022, the company issued an aggregate of 361,453 common shares at a deemed price of $0.29 per share under the Racing Sponsorship Agreement with Steinbrenner Racing, LLC and Defrancesco Motorsports. The share issuance represented the final payment due for the 2023 sponsorship year. The securities were issued with a four-month and one-day hold period expiring on December 18, 2022.

PowerTap also announced that pursuant to its shareholder-approved restricted share unit plan (RSU Plan), it has granted an aggregate of 13,000,000 restricted share units (RSUs) to consultants of the company on September 16, 2022. The RSUs are vested on issuance. The RSUs shall entitle the consultants the ability to acquire one common share of the PowerTap underlying each such RSU by delivering a notice of acquisition to the company per the RSU Plan for a period of 5 years from issuance. Under the RSU Plan, the RSUs were priced at $0.085 based on the previous day’s trading price.

Shares of PowerTap are currently changing hands at $0.076 per share, down -0.66% on the day.

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Ryan Troup

Ryan Troup is the Editor in Chief of Wealthy VC and TCI. Ryan has 15+ years of investing experience. Twitter | Email

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