Co2 Capsol AS

OSE:CAPSL

Earnings Call Transcript 2024-Q3

[Operator]

Good day, everyone, and welcome to Capsol Technologies Q3 2024 Investor Update. My name is Tone Bekkestad, Head of Communications at Capsol. I'm joined today by our CEO, Wendy Lam; our CFO, Ingar Bergh; and our Chief Product Officer, Philipp Staggat.

Wendy will start off by taking us through our Q3 highlights and operational review. Philipp will then be presenting a deep dive on selected business cases that highlights Capsol's technology advantages for cement, energy from waste and gas turbines. Ingar will present the financials, and Wendy will conclude with some closing remarks.

Please note that this conference is being recorded and will be published on our website. We will be taking questions at the end of the presentation, and you can type in your questions any time during the presentation. I now hand the call over to Wendy.

[Wendy Lam, executive]

Thank you very much, Tone. Good day, everybody, and welcome to our third quarter investor update. First, a recap of Capsol Technologies.

Capsol stands out in the carbon capture landscape as one of very few publicly listed carbon capture technology companies worldwide. This means, we're offering investors a unique opportunity to directly access this rapidly growing market.

At Capsol, we're not just capturing carbon, we're redefining the entire process by combining carbon capture and heat recovery and generation into one system. The result is significantly lower capture cost that is catching attention across multiple industries as a proven alternative to amine-based solutions. 

The numbers speak for themselves. This innovative approach allows us to achieve 20% to 60% lower cost compared to amine-based solutions. This is largely driven by lower energy usage of 0.5 to 1.5 gigajoules per tonne of CO2 captured.

This did not happen overnight. Our technology is built on over 15 years of R&D and more than 15,000 hours of real-world operation in our demonstration units actively capturing CO2 at customer sites today, and we're using decades proven chemistry.

Capsol is headquartered in Norway, but our reach extends globally with team presence in Germany and the Americas. Currently, our core markets are in biomass, waste energy, cement and gas turbines, all industries where effective carbon capture can make a significant impact. 

Now, on to our Q3 highlights. We continue to gain confidence with the steady demand growth in the early phase of an expanding carbon capture market that is looking for lower cost and safe solutions. We have seen revenues up 80% compared to last year at NOK 21.6 million.

We have a mature pipeline growth of 60% compared to last year, now at 15 million tonnes of CO2 capture capacity. And we have new projects in cement with a new feasibility study awarded and 2 CapsolGold campaigns signed.

Second, our lower cost solution yields attractive returns for emitters. This is driven by our lower energy numbers based on our combined capture and heat recovery system. On top of this, we continue to optimize performance based on real-world experience with our demonstration campaigns and R&D. 

Third, we continue to invest to leverage our technology leadership. We are expanding our technology platform with Capsol GT for gas turbines and presence in the Americas and are mapping out our path to service offerings.

Our current business plan is fully funded based on committed work and NOK 66 million in cash. Further investments in growth will be balanced with revenue generation.

Next, a word on the market. We are building a leading global capture technology company in a market with great potential. After considering all kinds of decarbonization paths available today, whether it's electrification, fuel switching, efficiency or new manufacturing methods, there's still around 20% of emissions that require carbon capture or removal to meet climate targets. 

The science is clear, we must both reduce and remove CO2 emissions. The chart on the left from Rystad shows projections for the tons of CO2 that need to be captured per year through to 2050 to meet climate targets.

This is validated by multiple organizations such as the IEA, the IPCC and the Global CCS Institute. We're just at the beginning of this growth and seeing confirmation of this demand from the market. The Global CCS Institute has seen already a 60% increase in the number of projects in the pipeline globally in just the last year. 

We're also seeing a number of additional incentives by various governments to support this growth, including just over EUR 26 billion in the U.K., just under EUR 4 billion in Denmark and over EUR 3 billion in Sweden announced in Q3. Market, Capsol stands out with a superior and proven technology platform. At the bottom of the page are our 3 key differentiators that form the foundation of our technology.

First, inherent heat recovery and generation. This isn't an afterthought. It's core to our design. By generating its own process heat, our system significantly boosts efficiency and drives down costs.

Second, our stand-alone capture unit has a simple end-of-pipe integration. Our solution is all electric, requires little-to-no-water or steam, simplifying integration with existing plants. This reduces both CapEx and project risk. 

Third, we have a proven and safe solvent. We use an open-source solvent that literally becomes baking soda when combined with CO2. This accelerates environmental permitting, appeals to carbon removal credit buyers and reduces handling risks and costs. These differentiators underpin our 3 product offerings.

First, on the left at the top is CapsolGo. These are demonstration units operating in Germany and Sweden, capturing actual flue gas from live customer sites today. CapsolGo allows customers to understand the Capsol process, assess their flue gas properties and inform and accelerate investment decisions towards CapsolEoP, which is our second product and our full-size plant design, capable of capturing 100,000 tonnes to over 1 million tonnes of CO2 annually. This is the design we're currently licensing to customers.

Both CapsolGo and CapsolEOP have primarily served biomass facilities, waste energy plants and cement factories where most of our demand has been up until now. We're also seeing pull from other industries.

Then we have CapsolGT, our newest frontier, which is redefining capture for gas turbines. It is built on the same technology platform, and we've collaborated with leading gas turbine providers to develop this solution. In essence, we are not just offering a single product, but a versatile technology platform adaptable to various industries and scales. 

Next, a view of how we make money. Our business model as a technology licensor is capital-light and scalable. We are not just offering a solution to a critical environmental challenge. We have a compelling business opportunity in a rapidly growing market with the potential for highly attractive returns.

Our approach has low capital intensity with no CapEx risk, meaning that we do not carry any project development costs on our balance sheet. Our business is built on a foundation of paid engineering studies and demonstration campaigns, which fund themselves, allowing us to steadily build a robust portfolio of technology licensing agreements that go straight to the bottom line and produce an overall business with 40% to 60% pretax margins. 

The license agreements are the key to our future revenue streams. Payments are tied to FID for final investment decisions so that we do not need to wait for the plants to be fully built before license fee payments get triggered.

One example for a project with an 800,000 tons CO2 capture capacity and our license fee of EUR 10 to EUR 15 per tons, which has been commercially validated, could produce a total license fee of EUR 8 million to EUR 12 million. And we see high potential for many projects like this ahead with additional high-margin revenues from services.

Next, a view of our commercial traction with customers. Today, we have a robust and growing pipeline of mature projects representing 15 million tons of CO2 capture capacity. In addition to our 3 signed license agreements, these are projects where we've conducted paid engineering studies and demonstration campaigns, positioning us for future licensing agreements. 

I want to highlight the tremendous growth we are seeing. This mature project pipeline has increased almost 60% since last year, a clear indicator of our ability to meet the demands of our customers.

In Q3, the increase has been driven by customers in the cement sector, where we made announcements of a study with another German-based cement producer and CapsolGo demonstration campaigns with Schwing for sites in Latvia and Lithuania.

The increase in pipeline was also from extensions of work, which include a feasibility study for a 500 to 1 million tons BECCS plant in Europe. Our technology advantages are amplified through our key industrial partners, which you see on the right-hand side of the page, where we are either going to market together, co-delivering or both. 

Our partners value the direct access we have to our customers, the emitters, and we have the flexibility to choose the best partners to meet our customers' needs.

Next, I want to give you a closer look at what is behind our mature pipeline. The 15 million tons of CO2 capture capacity is divided across key sectors, and our mature projects in these industries represent more than EUR 200 million in potential revenue.

All of these sectors value our superior energy performance, and they have different needs, which Capsol is able to meet, showcasing the versatility and broad appeal of our solutions.

First, we have the biomass and energy from waste sector. This segment is growing due to new business opportunities to earn extra revenue, including carbon removal credits and more. These customers particularly value our solution for energy efficiency, safety and extra heat generation for supplemental district heating.

Next, we have the cement sector, which is under increasing pressure to meet stringent regulations while staying competitive. They're drawn to our technology for the low capture cost, ease of integration and because we do not require steam, which typically entails extra CapEx.

Finally, we're making exciting inroads into the gas turbine sector. We're currently working with leading gas turbine providers, creating a new frontier for carbon capture. This category of work in gas turbines is up and coming.

And although we have already delivered a pre-FEED with an industrial customer, it is for general gas turbine models, and therefore, we have not included the CO2 volume potential in our pipeline yet. 

We are now assessing multiple FEED opportunities with both partners and end customers. Our ability to efficiently capture CO2 from high temperature, low CO2 concentration exhaust of a gas turbine is opening up new possibilities for low emissions power generation.

And this could be a game changer for the energy sector, which is experiencing dramatic demand for clean baseload power for AI data centers. So, we're gaining traction across all these sectors for a good reason. And Philip Staggat, our Chief Product Officer, will show some case examples related to these solutions later in the presentation.

On the next page, I draw some highlights on our delivery. First, with SFW or Sumitomo Foster Wheeler, we are deploying our CapsuleGo to an energy close to Stockholm, which has the potential to capture 400,000 tons of CO2 with a plant targeted for 2030. 

This is the second part of an agreement to deploy CapsolGo with SFW. The first part of the agreement was a successful campaign at Vecta Energy, which was just completed in October. In addition, the Schwank agreement for CapsolGo for the first out of 2 demonstration campaigns will begin in Q4 with a demo in Lithuania for a site of 750,000 tons of CO2 capture capacity.

This is an exciting project as it will be the first time a CapsolGo campaign will be deployed at a cement site. The unit will be starting up after we have completed some upgrades to the CapsolGo unit.

These deliveries and other projects are giving us real-world experience in deploying carbon capture in the field. Each project gives us new insights into how we can optimize our system and move even further down the cost curve.

Next, for those of you who have followed us know, Stockholm Exergi is the largest biomass plant in Northern Europe and has licensed our technology for an 800,000 tons CO2 capture plant. This project is progressing in impressive ways toward FID. Stockholm got its EUR 180 million in funding from the EU.

It was granted its environmental permitting and storage agreements between Sweden, Norway and Denmark have been established. And key carbon removal agreements have been made from private buyers. Microsoft did the biggest agreement of this kind with Stockholm Exergi this year.

Lastly, the Swedish state aid to be granted via a reverse auction process is underway now and will be completed on November 21st. So, we are seeing strong signs for this project to proceed to FID.

At Capsol, we have been investing in the last months on increasing our international reach. We have opened up our office in Houston to better respond to the demand we are seeing from the Americas.

And as part of these efforts, we have built an international Advisory Board who brings new expertise to fuel Capsol's growth. We issued a press release on this yesterday, announcing our newest member, Chris Barkey, who is the former CTO of Industrial Energy Technology at Baker Hughes and former Group Director, Engineering and Technology for Rolls-Royce plc.

We also have Morgan Bazilian, who is a Director of the Payne Institute for Public Policy and a Professor at the Colorado School of Mines and who has worked for the UN, the World Bank and the EU. Ian Dunderdale is an experienced energy sector executive with industry and technology expertise and a background that includes leading roles at Baker Hughes and Halliburton internationally.

Jing Jin heads up Clean Technology and the Carbon Capture initiative at Munters, a leader in air treatment solutions and our industrial partner and shareholder since early this year.

Our previous CEO, Jan Kielland, brings extensive industrial leadership experience from the energy sector. And then, of course, we have Stephanie Saunier, who is the Managing Director of Carbon Limits, who advises companies across sectors on decarbonization strategies and is serving on the Board of an international lime producer. This advisory Board will be a great resource as we continue to grow and make impact on emissions.

With that, I'd like to welcome Philipp now, who will share some case studies around Capsol's technology advantages.

[Philipp Staggat, executive]

Thank you, Wendy. This short animation introduces the schematics of our capture systems. They utilize a proven hot potassium carbonate. This solvent has been used for decades in hundreds of plants globally. It's safe, nontoxic and enables us to offer solutions to our clients that are not only free of harmful emissions, but also provide a high-purity CO2 stream for utilization and storage.

Capsol's significant cost advantages can be explained by these 4 technical highlights. For customers that are connected to a district heating network, our CapsolEoP solution can boost the energy production during winter months.

Here, our technology makes the capture facility an additional revenue generator. The Capsol carbon capture plant can also be solely powered by electricity, which results in an overall low energy consumption and stems from the highly efficient internal heat pump effect for the conversion from electricity to heat.

Our technologies are designed as stand-alone units that limit modification needs of our customers' facilities and minimize downtime of the customer's plant during the construction period.

Further, hot potassium carbonate is relatively cheap and available globally. This is different to amines where emitters may be locked in with one expensive solvent supplier. The graph displays a 20% to 60% cost advantage of choosing Capsol's technology over amines.

The comparison is taken here on the total project costs for the whole value chain of capture, transport and storage for Norcem in Brevik, Norway and Orsted Kalundborg project in Denmark.

Project costs include not only the pure capture CapEx and OpEx, but also the costs for compression, liquefaction and other local infrastructure, all for European projects. However, we also see similar advantages for the U.S. projects, where total CCS costs can benefit from significantly lower transport and storage costs.

The main portion of the OpEx for all technologies is the cost of energy that is needed to drive the CO2 separation process. Energy can make up to 70% of total OpEx costs. If we compare our technology with amine technology, our advantage on energy savings is getting even stronger with increasing CO2 concentrations. For example, a cement customer will benefit from Capsol's cost advantage of EUR 19 per ton of CO2 captured.

EUR 19 for 800,000 tons per year capture plant capacity translates into energy savings of EUR 15 million. This is, of course, not our only advantage on the cost side. Our customers also benefit from lower solving costs. And in many cases, we also avoid the costly modification works when integrating into the existing plant. That reduces CapEx.

Let's take a look on the carbon capture cost for a European cement plant, where Capsol's technology brings the project from unprofitable to profitable. In the graph on the left-hand side, you will see that the CCS costs for Brevik are significantly above expected customer incentives. This gap had to be overcome with extensive government funding that is hard to access for our wider customer base.

In case of a cement plant, incentives consist of a mix of ETS cost reductions and the premium pricing they can achieve when selling their low-carbon products. The total CCS cost for Capsol is expected to be EUR 114 to EUR 134, which includes CapEx and OpEx for capture, transport and storage. This provides the emitter with an attractive EUR 5 to EUR 25 margin.

The advantage over our main technology is EUR 50 to EUR 70. With our technology, cement producers benefit not only from the mentioned energy advantage, but also from minimized integration costs. Again, with Capsol's technology, you can bring a project from unprofitable to profitable. Same applies to projects in the U.S. There, the industry can benefit from the existing CO2 infrastructure and onshore storage opportunity.

With lower transport and storage costs as well as the reduced energy cost, we can achieve total CCS costs below the IRA incentives of $85 per ton of CO2 captured. With more than 2,200 plants emitting 1.9 billion tonnes of CO2 on a global basis, there is no lack of market opportunity for us in this segment.

Let's also have a look on the energy from waste case. The incentives in this industry are slightly different compared to the cement industry. In addition to the ETS cost reduction and low carbon premiums, they can also benefit from selling carbon dio removal certificates. In case of an amine unit, the margin between CCS costs and incentives is just EUR 13.

Capsol's margin can be multiple times higher with EUR 81 to EUR 105. This is explained by our earlier mentioned technology advantage. Energy from waste plants in Central and Northern Europe are often connected to district heating networks. In the winter times, our technology generates more heat for district heating. This creates an additional revenue stream for our clients. In this case, EUR 46, which leads to a very attractive overall project margin of EUR 81 to EUR 105 per tonne of CO2 captured.

There are over 500 energy from waste plants in Europe. Our increased investment into the CapsolGT solution earlier this year enabled us to progress with the solution to where we are today. Together with our partners, GE Vernova and Siemens Energy as well as customer feedback, we have identified four target segments of this solution. One of these segments is power generation for data centers.

Data center operators have two important needs. They need additional capacity of reliable electricity. In best case, it's built fast. And they also wanted to be as clean as possible with a low carbon footprint. The recent announcement of Microsoft to purchase electricity from a nuclear plant is expected to be at $115 per megawatt hour basis.

Let's consider this as the data centers operators' willingness to pay for clean, reliable electricity. Classical combined cycle power plants are economically within this cost range to make a profit. However, their carbon footprint is too high.

With CapsolGT, we are not only minimizing the carbon footprint, we are also offering an attractive margin. Ingar will now walk us through the financials of the recent quarter.

[Ingar Bergh, executive]

Thank you, Philipp. I will start off by briefly covering the financial highlights for the quarter. In the first half of this year, we raised NOK 109 million to invest in growth initiatives, including U.S. expansion and the CapsolGT solution. For this, we are starting to see results as highlighted by Philip in the deep dive section.

The revenues we are generating now consists of paid work to progress projects towards licensing agreements, which is where the major value creation is going to happen. The current revenues goes a long way towards funding our operations today.

Revenue for the quarter came in at NOK 21.6 million, 80% up year-on-year, and pretax loss improved to NOK 5.9 million from NOK 9.5 million. There have been some operational delays in the CapsolGo program that impacted revenue in the quarter. Measures have now been put in place to ensure better performance going forward.

Cash flow for the quarter was impacted by a couple of timing issues. The main items that explain the difference between the net loss of NOK 5.9 million and the cash flow were investments and changes in net working capital. The change in net working capital was mainly due to payments coming in late as can be seen by the NOK 5 million under accounts and accruals.

Balance has mostly been settled after the reporting date, and it's not considered to be a trend. We had investments of NOK 12.8 million, of which most were remaining payments on the liquefaction units and some outstanding payment on the third CapsolGo unit as well as a smaller amount upgrading Unit 1 to be ready for our first test on cement.

We now have about NOK 10 million left on our CapsolGo CapEx program and as such, expect cash flow versus P&L to improve going forward. This figure is to show our contracted revenue and committed cost over the next 12 months. We ended the quarter with NOK 66 million in cash.

Over the next 12 months, we have NOK 87 million in contracted revenue and a cost of about NOK 26 million to deliver this revenue. Furthermore, we have about NOK 10 million in net receivables outstanding. Based on Q3, we have an operational cost at around NOK 74 million over the next 12 months. Then we have NOK 22 million in debt service and a remaining CapEx of NOK 10 million.

In addition to the contracted revenue, we have good demand for our open CapsolGo capacity. Assuming 75% utilization, we have a net contribution of around NOK 30 million. With this, we are left with NOK 61 million at the end of the 12 months, about the same level as end of Q3.

The bottom line is, we are fully funded to execute our current business plan with our contracted revenue. Beyond contracted revenue, there is considerable upside from engineering and licensing. Further investments in growth are to be balanced with revenue generation.

Finally, a reminder on the business plan and addressable market. By 2030, there needs to be around 1 billion tons of carbon capture capacity having gone to final investment decision. Based on our target licensing fee of EUR 10 to EUR 15 per ton of installed capacity, the market for technology licensing is EUR 10 billion to EUR 15 billion. With a 5% to 10% market share, this represents revenue of between EUR 0.5 billion and EUR 1.5 billion, leaving us with pre-tax earnings of EUR 250 million to EUR 750 million for the period.

Our competitive technology platform provides us with a number of opportunities for additional revenue streams beyond technology licensing, creating considerable upside for the business case. On that note, I give the road back to Wendy.

[Wendy Lam, executive]

Thank you very much, Ingar. So, the milestones we expect over the next 6 to 12 months will derisk the path towards long-term goals and revenue potential for Capsol. We will continue to bring CapsolGT to market and deploy CapsolGo at customer sites. We will be progressing with more contract awards and grow our project pipeline.

Stockholm Exergi's FID is also expected in the near-term while we secure other licensing agreements. We'll be expanding our partnerships to make all of this happen in a market for CCS that continues to grow, especially with government-backed incentives.

In summary, Capsol has a differentiated and highly competitive technology platform supported by a scalable business model for attractive returns. Our revenue has increased 80% since last year, and our mature project pipeline of paid customer engagements has increased almost 60% to 15 million tons of CO2 capture capacity. Our progress is driven by an increasingly strong business case for Capsol, and we are positioned for significant growth and value creation.

Thank you very much, and I now pass it back to Tone.

[Operator]

Thank you very much, Wendy. Now, let's look at the questions we have received throughout the presentation. And the first question is, earlier this year, you increased your target price to EUR 10 to EUR 15 per ton installed capacity from EUR 7 to EUR 12. How has this price increase been received by the market?

[Wendy Lam, executive]

Thanks, Tone, for the question. Yes, as some of you have seen, we have raised our license fee from EUR 10 to EUR 15. When we did that at that time, we had already validated the acceptability by the market on that price. And maybe just to give you a little bit of context of why it's accepted, you heard earlier in our presentation that with our lower energy costs, a cement project, a typical one could achieve over EUR 15 million in OpEx savings in one year.

On a same size plant of 800,000 ton CO2 capture capacity, the license fee based on this pricing is between EUR 8 million and EUR 12 million. So, one year's OpEx savings could actually make up for the license fee for our technology. So, we're not seeing any pushback from the market on this at all.

[Operator]

Next question is twofold. When does the company expect to be cash positive? And do you see the need for any capital raise?

[Ingar Bergh, executive]

Thank you, Tone. As we showed in the contracted revenue and committed spending slide, with the current burn rate and the signed contracted revenue, we are in a good position for the next 12 months. Basically, as I said, we are fully funded, and we do not plan to do any capital raise hit.

[Operator]

Next one here is, looking at the cost of contract fulfillment in the P&L, it seems that your gross margins have been around approximately 70% to 80% during the last quarters. Looking at your Q3 '24 to Q3 '25 bridge, it seems as you expect gross margins to maintain at approximately 70% for the next 12 months to come. Could you comment on the gross margins for CapsolGo, CapsolGo liquefaction and engineering work?

[Ingar Bergh, executive]

Certainly. So, we have previously guided on gross margin for CapsolGo at 50%. We now have a bit of track record on this and see that they come in closer to 70%, which is, of course, very good. In terms of going forward, we do not expect big variation on the CapsolGo margins. We are not guiding on 70% fixed now, but we do not expect them to significantly get worse.

In terms of liquefaction, that is sort of built into the 70% margin already. So, CapsolGo and liquefaction units are part of that margin picture. The liquefaction unit, it's always together with the CapsolGo unit and there's less people, there's no additional people. So, there isn't really a lot of additional cost there. So, with the liquefaction unit, the margin from campaign should be slightly better than without.

As for engineering, that differs a lot. It really depends on how much external consultants we bring in on the engineering work, and we do that well enough to be very flexible on that. So, that is really hard to comment on.

[Operator]

Thank you, Ingar. Next one, regarding new contracts for the quarter, 2 feasibility studies were secured, one for cement project in Germany and one for BECCS in Europe. How to think about revenue potential here?

[Wendy Lam, executive]

Thanks for that question. I think any new feasibility studies we get, we think of in terms of the volume of the CO2 capture capacity. So, with the new cement project, that's 400,000 tonnes per year. And then for the BECCS, and this is an extension of current work we've done, we said between 500 million to 1 million tonnes of CO2 capture capacity. 

So, you can say that we're counting it as 850,000. So, in terms of revenue potential, if you apply the license fee on that, that would be the future licensing revenue. And then, of course, to get to that license agreement, we continue with pre-FEED, FEED, potentially CapsolGo campaigns along with that. That's the natural path for all of our projects.

[Operator]

And in your next 12 months cash bridge, does the NOK 87 million of contracted revenue only relate to contracted CapsolGo units and engineering? Or does this also include the contribution from the license agreement with Stockholm Exigene?

[Wendy Lam, executive]

Yes. So, the NOK 87 million that we mapped out in the cash bridge for the next 12 months does include the license fee from Stockholm Exigene, and it includes the currently signed contracts for CapsolGo. I do want to emphasize that there's still upside on that.

That cash bridge does not include any additional studies or Capsol, mainly studies that we would be signing in the next while. It does include an assumption of the 75% utilization of the CapsolGo.

[Operator]

And we have a question for you, Philip, on CapsolGT. Could you please expand on the market opportunity you see for CapsolGT?

[Philipp Staggat, executive]

Yes. Thank you, Tone. As I mentioned in my part of the presentation earlier, we have identified these 4 target segments that we want to decarbonize. And here, if we just look at the gas turbines installed by our industrial partners, which, of course, represent quite a significant share of the total market, there are over 3,000 open cycle turbines. 

And typically, these are 30 to 50 megawatt size and baseload operation would emit around 150,000 to 200,000 tonnes of CO2 per year, which results in a total emission of 500 million tonnes of CO2 annually. So, we think that with our CapsolGT solution, we can cover a good portion of this and hope to move the needle, yes, for the emitters decision towards CCS.

[Operator]

Thank you, Philip. There have been some operational delays on the CapsolGo demonstration campaigns due to delayed delivery of equipments, spare parts and supplier performance that will delay the next campaign. Is this related to both the units that will be deployed on the Schenk and Malar Energy campaign?

[Wendy Lam, executive]

Yes. So I'll take that, Tone. So the operational delays that were referred to in the presentation were on past projects and of course, impacted a bit of the cash, but we've recovered that already. In terms of the Schenk campaign, that was set to go forward in Q4, and that's still on track. And the Malar Energy campaign, which is the second part of the Sumitomo Foster Wheeler collaboration, that is still going as planned.

So, that's really been past activity. We have now assigned a new Chief Delivery Officer and managing some of our suppliers in a different way to manage these types of issues going forward.

[Operator]

Thank you, Wendy. Regarding the NOK 9 million of investments related to upgrades on the CapsolGo liquefaction units and NOK 3 million of investments for upgrades on CapsolGo units. Do these payments relate to 2 liquefaction units and 3 CapsolGo units? Or are there still some units left that require upgrading investments after Q3 '24?

[Ingar Bergh, executive]

Thank you, Tone. With regards to the liquefaction units, this is actually not upgrades. It's final payments on the initial contract, which we have been holding back part of those payments due to the lack of performance that Wendy just touched upon. But we now think these issues are more or less resolved.

So, there is no upgrades planned for the liquefaction unit. The same is true for one of the CapsolGo demonstration unit, which it is not an upgrade, but it's a payment that has been held back. 

We have some upgrades on the one that is heading for the first cement campaign, which we are really looking forward to. But in total, as I said in the presentation, we expect about NOK 10 million in CapEx outstanding and then our planned CapEx program is completed, and there's no further CapEx in the pipeline.

[Operator]

Thank you, Ingar. Next one is, should we expect any significant cost increase on group level related to the newly established Advisory Board for the international expansion?

[Wendy Lam, executive]

The Advisory Board has been put together to advise the Capsol team as needed. This is not a full-time employed group that will raise costs in any significant way. But we're very glad to have this Advisory Board on. As you saw the release, we have people like Chris Barkey, who is the ex-CTO of the Industrial Energy Technology part of Baker Hughes and the whole Rolls-Royce Group. And we have a whole number of other experts who are basically ready on demand as we need to guide our growth.

[Operator]

Thank you so much, Wendy. Next question is, you answered the remaining CapEx question. Is it rightly understood that when completing the NOK 10 million remaining CapEx on the CapsolGo, you do not expect more CapEx for the next 12 months?

[Ingar Bergh, executive]

I believe we answered this already, but we do not have any planned further CapEx for the next 12 months besides the NOK 10 million highlighted in the slide that is shown.

[Operator]

Thank you, Ingar. And then we have some more questions. There are several questions in one. I'll do one at a time here, so it's easier for you to answer all of them. Despite increasing pipeline, why is Capsol not able to attract foreign investors?

[Wendy Lam, executive]

Yes. So I'd say, especially since we did the uplisting back in June, we have certainly increased the visibility and awareness of Capsol in international markets, and that continues to be a process.

We have increased some international investors into our cap table already, but we'll be continuing to make traction on that, especially with this competitive technology that we are seeing. And again, with our opening of the office in Houston to tackle the largest market of CCS in the Americas, we expect that to be going in the right direction.

And we are talking to a number of customers and industrial players who could be potentially in this space with us in the future.

[Operator]

Will you then consider merger with big companies in order to take big projects?

[Wendy Lam, executive]

What I'll say is we are in contact with a number of big companies to look at big projects and portfolios of projects. And the type of relationship that we have with these big companies, it could be a collaboration, it could be partnering, it could be different ways. I would say as a licensor of technology, we have the flexibility to take on different models of working with big companies. So, there's nothing to announce at the moment, but we are having some very good engagements.

[Operator]

Thank you so much. And next one is stock prices are undervalued. Why is there no price corrections?

[Wendy Lam, executive]

Maybe I'll pass this one to Ingar, our CFO, but I will say, I guess, as a CEO, I've just bought stock today. So, I'm quite optimistic about where we are. And, of course, we all wish the value of the stock could be even more because we have a lot of value to offer. But maybe I'll have Ingar comment further on this as well.

[Ingar Bergh, executive]

Thank you, Wendy. I don't think it's really up to us to comment a lot on how the market value us. Obviously, we see a lot of value here. And internally in our bubble, there is really a lot of activity and a lot of things happening in the carbon capture market. So, we are very optimistic on the development going forward.

[Operator]

Thank you so much, Ingar. And do you plan to share a dividend to investors?

[Ingar Bergh, executive]

Right now, we are in a growth phase, and we are reinvesting our revenues to make sure that we create value in this market that is really coming. End of the day, the value we give back to investors is through dividends, but there's no plans on dividends in the near term.

[Operator]

Okay. Thank you so much, Ingar. That was all we had, all the questions that we received throughout the presentation. So, thank you to everyone posting questions, and thank you to Wendy, Ingar and Philip for the presentation of Capsol Technologies Q3 2024 results.