BioteQ Reports Q1 2012 Operating and Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 10, 2012) - BioteQ Environmental Technologies, Inc. (TSX:BQE), a leader in the treatment of industrial wastewater, reports its financial and operating results for the three months ended March 31, 2012. All figures are in Canadian dollars and are in accordance with International Reporting Standards (IFRS), unless otherwise noted.

Financial and operating results highlights for Q1 2012:

• BioteQ had active operations in Canada, the US, and China during Q1 2012 that together treated 1.8 billion litres of contaminated water and recovered 530,000 pounds of metal contaminants from the environment. Company operations generated recurring revenues from sales of metals recovered, fees for engineering services, and a plant sale.
  
  
• Total revenues for the quarter were $2.2 million compared to $1.3 million during the prior year. This is a 63% increase or $900,000 higher than Q1 2011. The increase in revenue over the prior year was mainly due to revenues from plant sales and engineering services. In addition, the company benefited from higher copper production compared to last year, largely because of active operations at the Bisbee site during the quarter.
  
  
• Operating margin for the quarter was $755,000, compared to $218,000 in 2011.
  
  
• The overall net loss for the quarter was $989,000, or $0.01 per share, compared to a loss of $1.3 million in 2011, or $0.02 per share. The Comprehensive loss for the period was $1.1 million compared to a loss of $1.3 million in Q1 2011.
  
  
• Cash used in operating activities, after changes in working capital, was $877,000 compared to cash use of $367,000 in the same quarter last year. Cash use during the quarter included the impact of approximately $800,000 in accounts receivable related to the sale of a mobile plant during the quarter. This receivable has been collected in the second quarter.
  
  
• Working capital at the end of Q1 2012 was $8.8 million which included $8.1 million in cash and short-term investments.
  
  
• BioteQ ended the quarter with total assets of $17.8 million compared to $19.3 million in the same quarter of 2011.
  
  
• During the quarter, BioteQ made strong progress in executing its strategic plan, including the hiring of new sales resources to expand the company's commercial focus, enhancing the company's efforts to commercialize new technology by separating the Sales and Business Development functions, executing on the sale of a new mobile treatment plant, and advancing to limited commercial production at the new ion exchange plant in China.
  
  
• During the quarter, BioteQ made progress with its strategic alliance partners. BioteQ and Newalta Corporation advanced the construction of a mobile Sulf-IX™ unit that will provide a pilot scale plant for the partners to introduce and test the technology for new customers and new market verticals. The plant is expected to be commissioned by the end of the third quarter. BioteQ also continues its work with EcoMetales to advance a metal recovery project in Chile.
  
  
• BioteQ continues to provide ongoing technical and engineering services for a large scale Sulf-IX™ plant at a mine site in the southern US. The commissioning of the plant is an important milestone to demonstrate BioteQ's Sulf-IX™ technology at this scale.
  
• Subsequent to quarter end, BioteQ's Board of Directors modified the compensation structure for the Board to reduce cash compensation costs relating to annual retainer and meeting fees for non-executive Directors, and replaced the Board's annual grant of deferred share units (DSUs) to non-executive Directors with a grant of "non-cash" options.
  
• Subsequent to the end of the quarter, BioteQ and NWM Mining Corporation ("NWM") agreed to settle legal action relating to a SART plant for copper recovery that BioteQ built at NWM's Mexican mine site. Under the terms of the settlement agreement, NWM will pay BioteQ $1.3 million in cash over the next two years. BioteQ will retain ownership of the treatment plant and will demobilize it from NWM's site. The first $200,000 payment has been received. The second payment of $400,000 is due April 30, 2013. The final $700,000 is due April 30, 2014.
  
  
• BioteQ continues to make progress on advancing sales opportunities in its pipeline of projects. Based on the performance of its existing operations and progress of new project opportunities, BioteQ continues to anticipate that it will meet its operational and financial milestones for the year.

BioteQ's key milestone targets for 2012:

• Revenue is expected to increase to at least $10 million, an increase of more than 30% compared to 2011;
  
  
• Cash used in operations (including changes in working capital) is expected to be reduced from $2.5 million in 2011 to less than $1.5 million in 2012;
  
  
• A first commercial plant sale to a channel partner is expected to close;
  
  
• A first plant sale and/or significant operating contract in Latin America is expected to close;
  
  
• A pilot will be undertaken in a market vertical outside of hard rock mining.

Jonathan Wilkinson, BioteQ's Chief Executive Officer, stated, "In the first quarter, BioteQ demonstrated good progress towards its 2012 goals. The delivery of a new mobile treatment plant, the shift into commercial production of the Dexing ion exchange plant, and the evolution of projects with our channel partners have all been positive developments. We look forward to building on the progress made during the quarter over the balance of the year and into 2013. We believe that by demonstrating consistent progress, we will ultimately provide strong returns to our shareholders."

BioteQ's financial statements and the Company's MD&A have been filed on SEDAR, www.sedar.com, and will be available on the BioteQ website at www.bioteq.ca.

A conference call to discuss the financial results is scheduled for Friday May 11^th at 11:00 am Eastern. Participants can access the call by dialing 416-340-2217 or 1-866-696-5910, reference number 9447043. A playback of the call will be available until May 25^th by dialing 905-694-9451 or 1-800-408-3053, reference number 3591824. A recording of the call will be available on the BioteQ website within two days of the call.

BioteQ Corporate Profile

BioteQ is an innovative clean technology leader in global industrial water treatment. The company's proven technologies have been applied at sites around the world to recover dissolved metals and remove sulphate, producing clean water and eliminating residual waste. BioteQ is headquartered in Vancouver, Canada and trades on the TSX under the symbol BQE. Please visit our website at www.bioteq.ca for additional information.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain information contained herein may not be based on historical fact and therefore constitutes "forward-looking information" under applicable Canadian securities legislation. This includes without limitation statements containing the words "plan", "expect", "project", "estimate", "intend", "believe", "anticipate", "may", "will" and other similar words or expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks, uncertainties and other factors that may cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company's dependence on key personnel and contracts, uncertainty with respect to the profitability of the Company's technologies, competition, technology risk, the Company's ability to protect its intellectual property and proprietary information, fluctuations in commodity prices, currency risk, environmental regulation and the Company's ability to manage growth and other factors described in the Company's filings with the Canadian securities regulators at www.sedar.com (including without limitation the factors described in the section entitled "Risks and Uncertainties" in the Company's Annual Report for the year ended December 31, 2011 and the section entitled "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2011). Given these risks and uncertainties, the reader is cautioned not to place undue reliance on forward-looking statements. All forward-looking information contained herein is based on management's current expectations and the Company undertakes no obligation to revise or update such forward-looking information to reflect subsequent events or circumstances, except as required by law.

BioteQ Environmental Technologies Inc.
Consolidated Statement of Financial Position
As at March 31, 2012 and 2011
Unaudited
	Mar 31 2012		Dec 31 2011
	$		$
Assets
Current assets
Cash	7,847,950		4,774,970
Short-term investments	266,512		4,486,097
Trade receivables	2,255,921		1,664,326
Receivable from joint venture partners	168,509		182,286
Net insurance proceeds receivable (note 7)	-		637,099
Taxes recoverable	29,532		153,889
Inventory (note 8)	85,318		48,174
Work in progress	234,950		432,261
Other receivable and prepaid expenses	561,067		222,709
	11,449,759		12,601,811
Non-current assets
Property, plant and equipment (note 9 and 19)	6,300,128		6,615,837
Intangible asset	61,939		69,682
Total assets	17,811,826		19,287,330
Liabilities
Current liabilities
Accounts payable and accrued liabilities	2,455,742		2,659,249
Deferred revenue	127,785		340,185
Taxes payable	63,105		63,105
Deferred lease inducement	11,840		18,945
	2,658,472		3,081,484
Non-current liabilities
Deferred income tax liability	88,713		88,713
Long-term liabilities	98,838		111,146
Total liabilities	2,846,023		3,281,343
Shareholders' Equity
Capital stock and warrants (note 11)	55,269,416		55,269,416
Contributed surplus	8,138,951		8,117,400
Accumulated other comprehensive loss	(1,148,731	)	(1,075,369	)
Deficit	(47,293,833	)	(46,305,460	)
Total shareholders' equity	14,965,803		16,005,987
Total liabilities and shareholders' equity	17,811,826		19,287,330

Commitments (note 17)

Subsequent event (note 20)

Approved by the Board of Directors
Jonathan Wilkinson, Director	G.W. Poling, Director
For a complete set of consolidated financial statements, including accompanying notes, go to www.bioteq.ca.

BioteQ Environmental Technologies Inc.
Consolidated Statement of Operations and Comprehensive Loss
For the three months ended March 31, 2012 and 2011
Unaudited
	3 months ended Mar 31,
	2012		2011
	$		$
Revenue	2,163,678		1,323,930
Plant and other operating costs (other than depreciation)	1,408,645		1,106,038
	755,033		217,892
General and administration	1,192,047		936,405
Sales, marketing and development	311,933		123,008
Stock-based compensation	21,551		42,500
Depreciation of property, plant and equipment (note 9)	228,537		148,647
Amortization of intangible asset	7,743		7,743
Loss before the under-noted	(1,006,778	)	(1,040,411	)
Interest income	15,510		26,998
Foreign exchange gain (loss)	67,842		(205,344	)
Loss before income taxes	(923,426	)	(1,218,757	)
Income taxes (note 13)	64,947		96,695
Net loss for the period	(988,373	)	(1,315,452	)
Other comprehensive income (loss)
Cumulative translation adjustment	(73,362	)	57,880
Comprehensive loss for the period	(1,061,735	)	(1,257,572	)
Net loss per share
Basic and diluted	(0.01	)	(0.02	)
Weighted average number of shares outstanding
Basic and diluted	69,966,672		69,905,968
For a complete set of consolidated financial statements, including accompanying notes, go to www.bioteq.ca.

BioteQ Environmental Technologies Inc.
Consolidated Statement of Changes in Equity
For the three months ended March 31, 2012 and 2011
Unaudited
	Number of shares		Capital stock	Warrants	Contributed surplus		Accumulated other comprehensive income (loss)		Deficit		Total
			$	$	$		$		$		$
Balance - January 1, 2011	69,865,006		53,668,812	1,513,417	8,045,826		(1,482,945	)	(41,215,005	)	20,530,105
Stock-based compensation	-		-	-	42,500		-		-		42,500
Exercise of options	46,666		40,172	-	(13,940	)	-		-		26,232
Net loss for the period	-		-	-	-		-		(1,315,452	)	(1,315,452	)
Other comprehensive loss for the period	-		-	-	-		57,880		-		57,880
Balance - March 31, 2011	69,911,672		53,708,984	1,513,417	8,074,386		(1,425,065	)	(42,530,457	)	19,341,265
Balance - January 1, 2012	69,966,672		53,755,999	1,513,417	8,117,400		(1,075,369	)	(46,305,460	)	16,005,987
Stock-based compensation	-		-	-	21,551		-		-		21,551
Net loss for the period	-		-	-	-		-		(988,373	)	(988,373	)
Other comprehensive income for the period	-		-	-	-		(73,362	)	-		(73,362	)
Balance - March 31, 2012	69,966,672		53,755,999	1,513,417	8,138,951		(1,148,731	)	(47,293,833	)	14,965,803
For a complete set of consolidated financial statements, including accompanying notes, go to www.bioteq.ca.

BioteQ Environmental Technologies Inc.
Consolidated Statemend of Cash Flow
For the three months ended March 31, 2012 and 2011
Unaudited
		3 months ended Mar 31,
		2012		2011
		$		$
(note 21)
Cash flow provided by (used in)
Operating activities
Net loss for the period		(988,373	)	(1,315,452	)
Items not affecting cash:
	Depreciation of property, plant and equipment	228,537		148,647
	Amortization of intangible asset	7,743		7,743
	Amortization of deferred lease inducement	(7,105	)	(7,105	)
	Unrealized foreign exchange gain	6,007		199,525
	Interest income	(12,547	)	(26,998	)
	Stock-based compensation charge (note 11)	21,551		42,500
		(744,187	)	(951,140	)
Change in non-cash working capital items (note 14)		(132,910	)	584,006
Net cash used in operating activities		(877,097	)	(367,134	)
Investing activities
Purchase of property, plant and equipment		(239,421	)	(511,010	)
Purchase of short-term investments		-		(2,392,972	)
Proceeds from sale of short-term investments		4,232,132		4,804,684
Net cash provided by investing activities		3,992,711		1,900,702
Financing activities
Proceeds from exercise of options		-		26,232
Decrease in deferred stock units		(12,308	)	(3,739	)
Net cash provided by (used in) financing activities		(12,308	)	22,493
		3,103,306		1,556,061
Effect of exchange rate changes on cash		(30,326	)	(59,833	)
Increase in cash		3,072,980		1,496,228
Cash
	Beginning of period	4,774,970		4,653,465
	End of period	7,847,950		6,149,693
For a complete set of consolidated financial statements, including accompanying notes, go to www.bioteq.ca.