Calgary, Alberta--(Newsfile Corp. - August 8, 2024) - Cleantek Industries Inc. (TSXV: CTEK) ("Cleantek" or the "Company") is pleased to announce its second quarter 2024 financial and operational results. Cleantek is an innovative provider of patented, clean technology solutions focused on reducing both cost and carbon intensity in the wastewater management and industrial lighting sectors across North America.

Cleantek's recently appointed President and Chief Executive Officer Riley Taggart commented, "It was a challenging quarter for Cleantek as general activity levels were lower than initially forecast. Q2 is traditionally the most challenging quarter given the seasonality and break-up experienced in the Canadian oilfield drilling and services market. Despite the lower-than-expected utilization, we remain optimistic about the opportunity in the coming quarters. As an organization, we set out a plan to evaluate and pursue operational efficiencies and associated cost cutting measures over the balance of the year. These efficiency gains and the previously announced private placement, combined with the new manufacturing financing facility provided by BDC (see Corporate Update section below) will give Cleantek a clear path forward to increase revenue and profitability."

Highlights for the Second Quarter 2024 (All amounts are in thousands of Canadian dollars unless otherwise indicated)

• Cleantek generated revenue of $2,411 for Q2 2024, a decrease of $986 or 29%, from Q2 2023. The decreased revenue in 2024 is primarily due to lower activity levels and resulting lower utilization of the fleet;

• Cleantek's gross profit was $1,285 or 53% of revenue for Q2 2024 compared with gross profit of $2,084 and 61% of revenue for Q2 2023;

• Cleantek's net loss of $511 for Q2 2024 was a $176 improvement from the net loss of $687 for Q2 2023; and,

• Cleantek's Adjusted EBITDA⁽¹⁾ was $259 for Q2 2024 compared to $903 for Q2 2023 due primarily to the decreased revenue.

Expansion and Outlook

Cleantek's strategy focuses on delivering innovative and cost-effective solutions that reduce the carbon intensity as well as the capital and operating costs of industrial operations. By focusing on expanding the market awareness and adoption of its sustainable lighting solutions and wastewater treatment assets, Cleantek continues to experience increased utilization of these high-margin product lines.

In 2023, the Company launched two new growth initiatives, including SecureTek, Cleantek's line of remote security services, as well as the company's newest addition to the ZeroE line of wastewater treatment products, the mobile waste gas fired GZeroE. Both growth initiatives will utilize the Company's existing asset base and require minimal capital investment for what the Company believes could be substantial growth opportunities in adjacent industry verticals.

• International Expansion - Expanding on the Company's recent success with the recent HALO^TM sales, Cleantek completed a proof-of-concept trial with the Kingdom of Saudi Arabia for its HALO^TM line and is exploring several promising opportunities diversifying Cleantek's geographic focus and customer base, including exploring opportunities across the Middle East for rental and/or product sales.

• SecureTek - Cleantek's line of remote security services, being offered as a stand-alone system or integrated with our sustainable lighting products, is expected to drive higher utilization of existing assets and create an exciting new recurring revenue stream for the Company. Utilizing our existing infrastructure, SecureTek is an accretive service offering and a great opportunity to expand our reach into the construction, mining, storage, agriculture, and other commercial markets, with minimal new capital investment.

• Mobile GZeroE & GSteam - Adding to the fleet of ZeroE technology is our new waste-gas powered, wastewater treatment and dehydration system, or "GZeroE" and "GSteam". Both technologies utilize waste-gas as its primary energy source. The first system was launched in March 2024 to one of a growing number of clientele and has received excellent feedback. The manufacture of additional units will be determined based off customer demand and feedback.

The Company's near-term strategy will continue to focus on:

• maximize utilization rates of its current fleet of sustainable lighting solutions and mobile ZeroE wastewater treatment assets;

• expanding and growing the Company's fleet of mobile ZeroE wastewater treatment assets to satisfy increased demand in the oil and gas, midstream, mining, industrial and construction markets;

• continuing to focus on the expansion of the international market through the sale and rental of sustainable lighting solutions.

• leveraging Cleantek's technology to capture additional market share through organic growth of the ZeroE wastewater treatment and vaporization services, including the new mobile GZeroE and GSteam, as well as the new product and service offering in SecureTek;

• evaluating new technology partnerships in an effort to diversify product offering and customer group.

The Company is uniquely positioned with the prospect to capture expansion in both ZeroE wastewater vaporization and sustainable lighting markets. Cleantek expects that wastewater and vaporization opportunities in the oil and gas, municipal grey water, and industrial wastewater industries.

Operational Update

Cleantek's second quarter 2024 revenue was $2,411, a decrease of $986 from same period last year.

Results of Operations

(1) Management considers EBITDA and adjusted EBITDA key metrics in analyzing operational performance and the Company's ability to generate cashflow. EBITDA is measured as net income (loss) before interest, tax, depreciation and amortization. Adjusted EBITDA is measured as EBITDA adjusted for share-based compensation and unusual items not representative of ongoing business performance such as litigation expenses and settlements and the impact of unrealized foreign exchange gains and losses. Working capital (or also referred to as net current assets/liabilities) for Cleantek is calculated as current assets less current liabilities per the statement of financial position. Non-current debt includes the non-current portion of long-term debt and lease liabilities per the Non-Current Liabilities on the statement of financial position. These items are not defined and have no standardized meaning under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods' results. Please see "Non-IFRS Measurements" for further discussion of these items, and where applicable, reconciliations to measures calculated in accordance with IFRS.

Corporate Updates

BDC Manufacturing Financing Facility

On July 29, 2024, the Company signed a new BDC facility for a build loan to fund the manufacture of new equipment, including GZeroE or GSteam and Halo units, for an amount up to $4,000. This is in addition to the term loan currently in place with BDC. The new build loan will carry floating rate interest at BDC 's floating base rate, which is currently 8.80%, plus an additional 0.45%. Loan will be repayable as interest only until June 28, 2025, and then interest plus principal payments of $55.6 starting on July 28, 2025, and maturing on June 28, 2031. The build loan is subject to a covenant of a Fixed Charge Coverage ratio that must be above 1.1 to 1 at all times. The build loan is secured by the fixed assets of the Company and its subsidiaries. The Fixed Charge Coverage is calculated the same as for the BDC Term Loan and HSBC Bank Operating Line above.

Management Change, Private Placement and Option Grant

On July 22, 2024, the Board of Directors of Cleantek announced the appointment of Riley Taggart as the new President and CEO of the Company. Upon Riley Taggart assuming the positions of President and CEO Matt Gowanlock stepped down from the positions of President and CEO with immediate effect and resigned as Director effective August 4, 2024, and Riley Taggart was appointed Director of Cleantek on August 8, 2024. In conjunction with this change a grant of 500,000 stock options were issued to Riley Taggart on July 19, 2024, at an exercise price of $0.15 per share and vesting 1/3 per year on each anniversary date with an expiry of five years after grant date. On August 8, 2024, an additional 487,500 stock options were issued to Cleantek directors and officers at an identical $0.15 per share exercise price and also vesting 1/3 per year on each anniversary date with an expiry of five years after grant date.

Also on July 22, 2024, Cleantek announced its intention to complete a non-brokered private placement of units at a subscription price of $0.15 per unit for aggregate gross proceeds of up to $150, subject to the approval of the TSX Venture Exchange. Each unit will consist of one Cleantek common share and one-half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at an exercise price of $0.25 per common share for a period of three years from the closing of the private placement.

About Cleantek

Cleantek is a clean energy technology company focused on ESG accretive technology solutions with operations across North America. Cleantek has developed and commercialized its patented wastewater dehydration technology, the ZeroE, which it rents to its customers for use at gas processing facilities and on drilling rigs focused on hydro-sustainability. Cleantek's ZeroE technology separates wastewater into (i) clean water which is evaporated and returned to the natural hydrological cycle and (ii) concentrated brine which is disposed of using traditional means. The ZeroE technology is powered by the waste heat generated from the engine exhaust of gas plants and drilling rigs. Complimenting Cleantek's ZeroE technology is the suit of low carbon LED lighting systems containing our patented Solar Hybrid lighting systems and HALO Crown mounted lighting systems.

Selected financial and operation information is outlined below and should be read in conjunction with Cleantek's unaudited condensed consolidated interim financial statements and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2024 and 2023, which are available on SEDAR at www.sedarplus.ca .

NON-IFRS MEASUREMENTS

Cleantek uses certain financial measures to quantify its results that are not prescribed by IFRS. The following terms: "EBITDA", "adjusted EBITDA", "working capital" and "non-current debt" are not recognized measures under IFRS and may not be comparable to that reported by other companies. Cleantek believes that, in addition to measures prepared in accordance with IFRS, the non-IFRS measurements provide useful information to evaluate the Company's performance and ability to generate cash, profitability and meet financial commitments.

These non-IFRS measures ae intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

EBITDA and Adjusted EBITDA

Management considers EBITDA and adjusted EBITDA key metrics in analyzing operational performance and the Company's ability to generate cash flow. EBITDA is measured as net income (loss) before interest, tax, depreciation and amortization as differences in accounting treatments may distort our core business results. Adjusted EBITDA is measured as EBITDA adjusted for certain non-cash items, including share-based compensation, impact of unrealized foreign exchange gains and losses as well as unusual items not representative of ongoing business performance such as litigation expense and settlements.

The following table provides a reconciliation of the non-IFRS measures, EBITDA and adjusted EBITDA, to the applicable IFRS measurements for Cleantek:

Working capital

Working capital (or also referred to as net current assets/liabilities) for Cleantek is calculated as current assets less current liabilities per the statement of financial position. The following table provides a reconciliation of working capital, a non-IFRS measure to the applicable IFRS measurements for the Company:

Non-current debt

Management considers non-current debt in analyzing the Company's capital structure. Cleantek's capital structure consists of working capital, non-current debt and shareholders' equity. Non-current debt measures the long-term borrowings of the Company. Non-current debt for Cleantek is calculated as the non-current portions of long-term debt and lease liabilities. The following table provides a reconciliation of non-current debt, a non-IFRS measure to the applicable IFRS measurements for the Company:

Forward-Looking Statements

This news release contains certain "forward looking statements" including, for example, statements relating to expected improved financial flexibility, additional growth, potential middle east expansion, expansion of Cleantek's fleet of sustainable lighting solutions and mobile GZeroE wastewater treatment assets, the expected deployment of Cleantek's assets, available liquidity, Cleantek's outlook for the future and near-term strategy. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: receipt of regulatory approvals, the state of the capital markets, the ability of the Corporation to successfully manage the risks inherent in pursuing business opportunities in the oilfield services industry and outside the North American market, and the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business. Any forward-looking statement reflects information available to Cleantek as of the date of this news release and, except as may be required by applicable securities laws, Cleantek disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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