Mr. Fred Andriano reports

SHARC ENERGY RECEIVES RECORD PURCHASE ORDER FROM CITY OF SURREY FOR DISTRICT ENERGY SEWER HEAT RECOVERY PROJECT

Following a competitive procurement process, Sharc International Systems Inc. has received a purchase order valued at over $5-million from the City of Surrey for its district energy sewer heat recovery project. The purchase order completed on Oct. 22, 2026, is the largest in Sharc Energy's history, approximately twice the size of the company's previous largest order. Sharc Energy will supply three Sharc 880 waste water energy transfer systems delivering six megawatts of thermal capacity to Surrey City Energy, the city's district energy utility serving Surrey City Centre.

Purchase order highlights

Revenue from the project is expected to be generated in the second half of 2027 and into 2028, based on the current project schedule. The city is installing a multisystem of Sharc 880s to support a combined thermal capacity of six megawatts, processing approximately 12,000 litres of waste water per minute. The facility is designed for phased expansion to approximately 27 MW as district energy demand grows, with any additional equipment subject to future procurement. With the project secured by a purchase order, it will add over $5-million to the company's sales order backlog in the fourth quarter of 2026, with the associated revenue subject to project delivery and performance of the company's contractual obligations.

The facility will recover thermal energy from a metro Vancouver regional sewer main in Surrey's Bridgeview neighbourhood. Sharc's systems will screen the waste water and transfer its heat to an ambient-temperature loop connecting to heat pumps at the West Village Energy Centre, approximately two kilometres away.

The city expects the facility to supply more than half of Surrey City Centre's annual heating needs, reducing reliance on natural gas across a district energy network that already serves 49 buildings. The project is supported by the government of Canada, the Province of British Columbia, metro Vancouver and BC Hydro.

Equipment fabrication and delivery are planned for late 2027 to early 2028, followed by facility construction and commissioning under the city's project schedule.

"This order is an important milestone for Sharc Energy, both in scale and in how we are developing our business," said Shane Dungey, interim chief executive officer of Sharc Energy. "Sharc Energy is growing its business through direct relationships, as with the City of Surrey, and, through its network of channel partners, to support its sales development objectives. Alongside executing this purchase order, our commercial focus will remain on customer engagement and disciplined management of the sales process."

"Surrey's project requires a system tailored to the scale and operating requirements of its district energy network," said Michael Albertson, president of Sharc Energy. "The Sharc 880 platform allows us to configure our technology around those requirements, drawing on our experience supporting large waste water energy recovery installations."

For Surrey, Sharc Energy will integrate shell-and-tube heat exchangers with its waste water screening, pumping and control systems to meet the project's specifications. Its scope covers start-up, commissioning, operator training and technical support, backed by the remote monitoring and diagnostic capabilities of the Sharc platform.

With each Sharc system configured around the project's waste water, capacity and maintenance requirements, owners and engineers can incorporate waste water heat recovery into both new and expanding district energy networks.

Commercial focus and capital planning

The company aims to improve sales execution and retain a greater share of project economics, supporting its gross margin profile. This approach includes strengthening customer and channel partner engagement, disciplined project evaluation, and effective management of procurement, contracting and customer service processes.

"As we execute the Surrey project, we are focused on aligning working capital and cash flow with project schedules," added Mr. Dungey. "We are working with third parties to explore capital solutions that can support delivery and sustainable growth."

Building on an established district energy portfolio

Surrey adds to Sharc Energy's portfolio of major district energy projects, including Creative Energy's Senakw energy system in Vancouver, the False Creek Neighbourhood Energy Utility, the National Western Center in Denver and the Alafia development in Brooklyn.

These projects reflect the application of waste water energy recovery in individual buildings, community and district energy infrastructure. The City of Surrey order adds a multisystem installation to Sharc Energy's district energy project portfolio, with modular and scalable configuration to meet the city's sustainability goals.

About Sharc International Systems Inc.

Sharc International is a leader in recovering thermal energy from the waste water sent down the drain every day. Sharc Energy's systems recycle this energy for heating, cooling and hot water production in commercial, residential and industrial buildings, as well as thermal energy networks commonly referred to as district energy.

Sharc Energy is publicly traded in Canada, the United States and Germany.

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