Good day, everyone, and welcome to Capsol Technologies' investor update for Q3 2025. My name is Jacob Clausen Krøvel, and I serve as SVP, Investment and Strategy at Capsol. I'm joined today by our CEO, Wendy Lam. She will start by taking us through our Q3 highlights and Capsol's five strategic pillars for growth and value creation. Our incoming CFO, Bjørn Kristian Røed, will officially join the team January 1st, so he will be here for our Q4 release. In the meantime, I will take us through the financials and conclude with a section on how we're looking at strategic growth for the future. Please note that this presentation is being recorded and will be published on our website. We will be taking questions at the end, and you can type in your questions anytime during the presentation.
Enter your questions in the Q&A feature on the right-hand side of the video player or send them to ir@investorweb.no.
Good day, everyone, and welcome to our Q3 2025 update. Thank you, Jacob, for kicking us off. Capsol is one of the very few publicly listed carbon capture technology companies in the world, offering a carbon capture and heat recovery system in one using a safe solvent. This enables us to deliver industry-leading energy efficiency with an end-of-pipe solution so that hard-to-abate emitters can lower the cost of capture and get their projects to FID. For example, our technology is licensed to Stockholm Exergi, one of the largest carbon removal projects with BECCS for bioenergy with CCS. This project got its FID earlier this year and attracted some of the largest carbon removal purchases in the world from Microsoft. Not only does Capsol enable projects like this, but we can help our customers generate additional heat or electricity.
At Stockholm Exergi, the capture system has no energy penalty, and in fact, our system can produce additional heat for their district heating system. With CapsolGT, which we will talk about later, we can generate low-carbon power with gas turbines. We also offer to our customers mobile demonstration units that can be leased to test our process on their actual flue gas. We have contracted 10 campaigns in the last three years and gained over 20,000 hours of operating experience. This, combined with our R&D center in Stavanger, makes Capsol the most experienced company in the world testing HPC, or hot potassium carbonate, with post-combustion flue gases. Next, a view on the market. This report from the Global CCS Institute, released a month ago, shows projects progressing steadily, especially in early and advanced development stages.
This paves the way for growing FIDs for projects to move to construction in the years ahead. Within this market, as a fairly new entrant, Capsol has performed strongly since we started ramping up our commercialization in the last three years. Within this short time frame, we are already competing head-to-head with industry incumbents. Despite some recent industry slowdown versus just a few years ago due to macroeconomic uncertainties, we see strong growth drivers for the market and Capsol. First, carbon capture is a must-have solution for any decarbonization target, and Capsol has much to gain with this under even the most conservative scenarios. Even after all other decarbonization solutions are implemented, CCUS is needed to prevent CO2 from being added to the atmosphere or to remove it. This can be especially important now that we see gas power increasing to power data centers.
Second, we're also seeing positive momentum for projects with continued high expectations of ETS pricing in Europe, growing demand on the voluntary market for carbon removal, and price premiums for low-carbon products. The U.S. market also remains a high focus for us, with the 45Q credits staying in place under the IRA. Overall, Capsol currently sees a path to 4%-6% total market share and more based on today's business model. Considering a conservative view of the market and our pipeline, we have a licensing revenue potential of NOK 3 billion from now until 2035, well supported by our current mature project pipeline. Now, on to Q3 highlights. We have closed the quarter with some exciting developments. Firstly, we are involved in a project that gives us a line of sight to the first CapsolGT deployment in the U.S.
This is a commercial breakthrough where a customer chose us because of our technology's ability to capture CO2 and generate electricity at the same time. This represents a technology preference as the first step in the project. In the quarter, we are also proud to initiate client project work in two new sectors: lime and metals processing. We also won a study with a new client from an international waste management company and signed a new Capsol Go campaign with another European cement producer. Secondly, we are progressing projects and partners. We continue to see projects approaching FID, and our overall mature project pipeline represents over NOK 3 billion in revenue potential that will go straight to our gross margin.
We expanded our collaboration with Munters alongside an additional EUR 2 million investment, and we deepened our partnership with Everllence, formerly MAN Energy Solutions, to cooperate on integrating compression and expansion equipment into Capsol EoP. On CO2 storage, we also partnered with TerraStora, a near-facility carbon storage developer, to jointly explore opportunities of mutual interest. We are continually progressing dialogues with current and prospective partners through our engagement with Pareto Securities. Thirdly, we had NOK 19 million in revenues for the third quarter, taking our revenues over the last 12 months to NOK 97 million. Our mature project pipeline sits at 21.9 million tons of annual capture capacity. Behind our pipeline, we continue to generate stable lead volumes that support continued growth. Finally, our liquidity position is strengthened to NOK 78 million when leaving the third quarter.
I wanted to elaborate more on the point about our U.S. project for carbon capture on gas turbines. It is obvious why this is exciting. It was only a few years ago when gas turbines were seen by many as a modestly growing technology at best for power generation. With data center demand, there has been a significant shift in the role of gas for the energy transition in the near term. The challenge now is how to use gas while continuing to lower emissions for society. Capsol was always planning to decarbonize gas, and the opportunity is only growing. We already have projects in the U.S. progressing with utilities, paving the way for commercial deployments and a growing number of leads.
To progress CapsolGT for low carbon power for both brownfield and greenfield developments, we are supporting project development while working with partners and investors to mature projects to FID and getting the first CapsolGT unit on the ground. At Capsol, we operate with five strategic pillars for growth and value creation. It starts with our technology and the position of cost leadership it provides us. Building on the technology, we are targeting high-value verticals where we are gaining ground as a preferred provider of carbon capture technology. Then, as we work closely with our customers through our capital-efficient and scalable business model, we gain access to revenues at multiple project stages. With that, our geographical reach is expanding, also through incoming requests following the Stockholm Exergi FID, which was an important milestone in our growth journey.
These first four pillars culminate in our global ambitions of building a business with 5%-10% market share, which we believe to be the right ambitions for Capsol, given our position and potential in the market. Expanding on our cost leadership, a large portion of carbon capture costs are explained by the cost of energy, as this can make up to 70% of the cost of capture. The graph on the left compares the energy costs for a fully electrified amine system and a fully electrified CapsolEoP solution. With increasing CO2 concentrations, Capsol's advantage gets significantly bigger. In the case of a cement plant with flue gas of 20% CO2 concentration, we expect OpEx advantages of at least EUR 19 per ton of CO2 captured. That means at least EUR 15 million advantage per year for an 800,000-ton CO2 plant. The case for using Capsol is strong.
We see that the savings over one year can exceed the full Capsol license cost, and cost reduction potential continues with future solvent optimization. As reported by the Global CCS Institute this year, a new reference class of lower energy capture technologies is emerging, where Capsol is making a noticeable difference. This difference comes from our power plant approach on proven HPC chemistry. With this, Capsol is often referred to as the next most mature solution after amines. I present another view on cost leadership with CapsolGT, which is drawing attention from the market. With a three-in-one solution where we combine heat recovery, carbon capture, and power generation, we have a competitive solution versus others for low-carbon power options for gas turbines. When it comes to gas turbines, there really are two families of engines: combined cycle gas turbines, or CCGT, and open cycle gas turbines, or OCGT.
Our CapsolGT solution works with OCGTs to decarbonize power. A common perception is that CCGT is the preferred option when looking to generate the most electricity. On a standalone basis, that is true. However, in the pursuit of clean power, when looking at CapEx for the turbine and carbon capture, the picture changes. Adding to the mix that we can generate extra electricity with our GT solution, an OCGT with CapsolGT is able to deliver a levelized cost of electricity below that of a CCGT and amine solution. This is an especially interesting option for greenfield developments. This is our selling point when going to the market with CapsolGT, and it is a strong one. The next pillar is the high-value verticals we are targeting.
We are building a position as a preferred provider in cement and biomass and energy from waste, where most of our mature project pipeline can be found. Both verticals appreciate the attractive economics of our solution, and for some, the safe solvent is a decisive factor as these facilities can be found in residential areas where only the safest option will be good enough for regulators and public acceptance. For cement, our easy integration and standalone unit makes a compelling case in minimizing downtime, combined with our performance on high-concentration CO2 flue gas and no need for additional steam. As can be seen on the slide, more than 70% of our mature pipeline comes from cement, biomass, and energy from waste, who are seen as the early movers in carbon capture. Gas turbines, often in relation to data centers, as already highlighted, are also emerging as an interesting vertical.
As mentioned in our highlights, we are attracting attention in new sectors, including lime, metals processing, and refineries. Within these high-value verticals, I would like to put the spotlight on cement and the power of our CapsolGo campaigns. Our demonstration campaigns with leading European cement producers are strengthening our involvement in projects while supporting our clients' efforts in engaging communities and politicians. Both aspects are crucial in driving projects forward and can play important roles in gaining public funding. Post-quarter, we signed a new six-month campaign for capture and liquefaction at a European cement producer. At Holcim's Dotternhausen plant in Germany, we just completed a five-month CapsolGo campaign showcasing the applicability of our technology as part of a broader collaboration. While at SCHWENK, we continue with our campaign at their Brocēni site in Latvia.
These campaigns not only validate our technology, but also deepen long-term commercial relationships with top-tier cement producers, directly positioning Capsol for growth in one of Europe's largest hard-to-abate sectors. Next, our business model is scalable. It offers exposure to revenues at various stages of a CCUS project. This figure shows the revenue potential of these stages. As we progress through projects, the value increases. With our mature pipeline of approximately 22 million tons per annum, we are building the potential for the future. This has been an incredible progress and journey for Capsol as a new entrant in the market these past three years. Although there will be different dynamics in each project, we work diligently to extract as much value as possible early on before getting to the FID stage. We see four projects maturing towards FEED and PDP in the near term.
We have a very exciting period in front of us when moving into 2026. The next pillar is our geographical expansion, which is important as CCUS is a global market. EU growth is driven by policy tailwinds, and the vast majority of our mature pipeline comes from Europe. Additionally, we continue to find North America to be an attractive market due to the availability and cost efficiency of transport and storage infrastructure. Tax credits available for carbon capture projects under the IRA also remain, and in some cases, they get even better. This combined with state-level mandates and a growing carbon removal market, we remain positive about the potential in the U.S. This combined with the race for all things power sustaining the lifetime of gas assets are important pull factors contributing to the project we are maturing for the deployment of our first GT project.
Beyond the three CapsolGT projects in our mature project pipeline, we have more than 40 leads in the U.S., so there is definitive activity for Capsol in the US. Internationally, Capsol continues to develop its presence. Beyond Europe and North America, South America, Middle East, and parts of Asia will grow in interest. Our standing internationally is growing. Capsol is already being profiled at key industry gatherings. At Capsol, we are building a leading global carbon capture technology company. As we look holistically at our goals and how we will capture long-term value, it all starts with our technology. Being able to deliver carbon capture at significantly lower costs than the competition puts us in an outstanding position to build strong customer relationships.
Second, we are taking the advantage in our technology and putting it to use in high-value verticals and establishing ourselves as a preferred provider across various key industries. Within industries like cement, the customers we are working with have potential in their portfolios far beyond the sites we're initially engaged in. Third, on our business model, looking across the project lifecycle, we identify revenue potential far exceeding that of the license fee. This includes recurring revenues farther out on the time horizon. Fourth, our technology leadership and wide fit across industries will be our lever for geographical expansion with CapsolEoP, CapsolGT, and CapsolGo demonstration units. Finally, by leveraging the initial four strategic levers, we will continue to broaden our leadership across the customer journey through strategic partnerships.
Our ability to do so and the reason we will be successful all starts with our technology and the attractive business case it represents for our customers. I now pass to Jacob, who will take us through our financial highlights.
Thank you, Wendy. In the third quarter, we recorded revenues of NOK 19 million, which is an uptick from the previous quarter and taking last 12 months to NOK 97 million. The top line continues to be driven primarily by paid engineering studies and CapsolGo demonstration campaigns, which remain key commercial entry points for future large-scale projects. Operating expenses were NOK 34 million, down from NOK 38 million in Q2, reflecting ongoing efforts to manage costs while sustaining business development momentum. Looking ahead, we're evaluating additional measures to align costs and revenues as the projects we are involved in move into more mature stages.
Overall, the quarter reflects stable activity levels and continued progress in positioning Capsol for future growth. There was a slowdown in customer decision-making following announcements on U.S. tariffs in April, with a lot of uncertainty. After the summer, our experience is that customers are back in a mode to move projects forward. This ties back to the market development graph Wendy shared initially, where we see a clear development in projects moving forward. We strengthened our liquidity position in the third quarter, ending with NOK 78 million, up from NOK 67.5 million in Q2. The increase was driven by the disbursement of the NOK 30.9 million green loan facility with DNB and a EUR 2 million private placement towards Munters in September.
We're also seeing commercial activity with CapsolGo campaigns in dialogue and under negotiation, as well as PDP and FEED revenues expected to ramp up in the near term. Overall, we enter the next phase with an improved liquidity base. Moving on to our strategic efforts. At Capsol, we have high-performing, cost-leading capture technology that has been FIDed and considered bankable. Our capital-light licensing model has allowed us to grow quickly, achieving milestone after milestone. However, we see a path to do even more, to making carbon capture easier to buy for our customers. We can do this by providing a broader platform for CCUS project support, helping our customers connect to financing options and linking capture through to storage and utilization. The end game is to leverage our position as a leading technology provider and helping projects get quicker to FID.
This is our holistic approach to how Capsol as a platform will help customers procure CCUS in the best way possible. The overarching goal is to make a fragmented universe more tangible for customers who are venturing into this space, reducing cost and timelines on the way. What technology to utilize tends to be among the first questions that our customers address. With our strong value proposition, we are a natural sparring partner for them. Hence, our cost leadership makes us the ideal platform for looking at CCUS procurement holistically. Since we first shared this view at our previous quarterly update, we have progressed on partnerships, as highlighted with orange boxes. We have strengthened our relationship with Munters and Everllence. I will elaborate on these two relationships on the next pages.
We also initiated a collaboration with TerraStora, who are a near-facility storage developer, enabling safe, permanent, and locally optimized geological storage, limiting the burden of transportation. We are actively working to strengthen our partnerships, and we are attracting companies far bigger than ourselves through the power of our technology. More relationships are under development, all aiming at expanding this platform view. In September, we announced our entrance into the next stage of our partnership with Munters. The partnership fits perfectly into our view of the customer journey from the previous slide. We have worked with Munters for a year and a half on joint R&D efforts. During our initial partnership, both parties have found great compatibility in our technologies, solutions, and teams, which form the foundation for this next step.
Furthermore, Munters views us as an important partner, enabling them to get more solutions into projects, and they have increased their investment in Capsol to a total of EUR 4 million. To us, this is a strong validation in our team, tech, and project pipeline. Yesterday, we entered a strategic collaboration with Everllence, a global leader in decarbonization and efficiency technologies. Everllence is formerly known as MAN Energy Solutions and has been selected to deliver the compressor and expander solutions for Stockholm Exergi by Saipem, who is the EPC contractor in the project. Together, we're integrating Everllence' compression and expansion equipment with the CapsolEoP solution in an effort to create standardized equipment packages. The goal is to simplify procurement, lower project costs, and shorten timelines for developers. The partnership also includes joint sales and marketing, expanding Capsol's reach across industries.
Everllence brings deep industrial expertise with 15,000 employees across 140 sites globally, strengthening our ecosystem. We are proud to be joining forces with such a prominent industrial player, and we are excited for what we can jointly achieve. With that, I'll hand the word back to Wendy for the closing remarks.
Thanks, Jacob, for highlighting how we are mapping our growth journey into the future in a carbon capture market landscape that will continue to grow. At Capsol, we are building a company like no other, as one of the very few publicly listed carbon capture technology companies in the world. We are just at the beginning. We are proud of where we are and for what is ahead. With that, I'll hand it back to Jacob for the Q&A portion of the call.
Thank you, Wendy. Now, let's look at the questions we have received. Before we—we have a few questions already, but before jumping into them, I wanted to repeat that if you have questions, please enter them in the Q&A feature on the right-hand side of the video player or send them to ir@investorweb.no. Okay, so the first question: Are you progressing the process with Pareto, and when can we expect a conclusion? I'll handle that one. Yes, the dialogues are progressing with current and prospective strategic partners, and we will update the market if and when we have something to announce. There are a variety of partnerships and strategic alliance opportunities that we are carefully evaluating on their potential to maximize our growth for the future.
Let's move to the next one. I think this is best directed at Wendy. The question is: If a FEED has been completed for project A for a client and they want to start a new FEED on a different site, can the FEED on project B be completed faster and at a lower cost? Similarly, can the customer expect synergies by running more than one project concurrently or consecutively?
Great. Thanks for the question. I think the simple answer is that yes, there are synergies that can be built. It is actually not only synergies within the same customer, but we learn from every—we will learn from every single study, every FEED that we do. Learnings from one project can actually be transferred to another. Of course, it always depends a bit on how similar the plants are, how similar the flue gas is, how similar the site layout is going to be.
In general, there are a lot of learnings. Even just, for example, if you look at the Stockholm Exergi project with its setup, with its EPC, with its various equipment, a lot of learnings can be taken from that already to other projects. We are already exploring how modular solutions with partners, such as we have already highlighted the new one with Everllence, can be used to speed up the FEED process and, of course, speed up projects to get to FID.
Okay. Thank you, Wendy. Next question also directed at Wendy, I think. Have you lost out on any of the FEED studies mentioned in the Q2 report, or are they still to be awarded in Q4 2025?
Yeah. What I can say is that our mature pipeline is dynamic, and we are constantly updating that, and we're scrutinizing every project based on whether the project will progress and whether Capsol will be selected as the tech provider. With that, we have made some small adjustments in our pipeline. We have around 22 million tons in our mature project pipeline now. Those adjustments were made based on a variety of factors. All of these factors include things like transport and storage feasibility, timing of public funding, local political influences, and how quickly the project needs to be done. We still remain very positive. Our pipeline is almost three times larger than it was just two years ago. We are making some remarkable progress considering Capsol is really only offering paid studies about three years ago. Still very optimistic about the future.
Okay, next question. Is there a period after a CapsolGo campaign where data is analyzed, or are most data analyzed live during the campaign? How long is the period if it's not done live?
Yeah, I think that's a great question. We're actually analyzing the data live from every campaign. This is being done in conjunction with our lab in Stavanger. It was about a year ago when we opened that R&D center in Stavanger to really dive deeper into the results that we see. Our team in the field are working in combination with our lab to understand the solvent dynamics, the energy use, how we can even explore new additives to make the energy efficiency even better. We are both analyzing live data. We're also combining that with learnings that we have built in the past. The culmination of all of that learning is what goes into our process model for designing our plant. We have, of course, IP in the form of patents, but we also have IP in the form of how we design the plant based on real-life learnings.
Thank you, Wendy. Okay, that's the questions we have. We'll give it a few more seconds to see if more questions come in. No. Yeah, then I'll hand it to Wendy for the closing comments.
Yep. No, I really want to thank you all for joining today. I'm really happy about the quarter. We've made strides into new sectors with lime, with metals processing, and we're building on the work we've done in refineries. We're continuing to progress our project pipeline, as well as very excited about the CapsolGo campaign that we've signed on. We are already looking at the next campaigns outside of continental Europe for that. We will be reporting more as soon as we have more to announce. Thank you for joining us.