Forgent (LSE:FORG) — 2023 AGM Proceedings

0:00 Good afternoon, and welcome to the Ecutech PLC twenty twenty three AGM proceedings. Throughout this recorded meeting, attendees will be in listen only mode. Questions will be submitted via the Q and A tab situated in the right hand corner of your screen. Simply type in your question and press in. Company may not be in a position to answer every question submitted and have the Board respond to key questions during the meeting with all questions being reviewed and responses published on the investment company platform where appropriate to do so. I'd now like to hand you over to Ian Pearson, Non Executive Chairman. Good afternoon, sir.

0:27 Good afternoon, and good afternoon, ladies and gentlemen. I'd like to welcome you to the annual general meeting of Ecotec PLC. I'm a non executive director of the company, and I'll be your chair for this meeting. It's now just after 2PM, and I declare the meeting open. Now I'd like to introduce the board. To my right, there is David Palumbo, the chief executive officer. And to my immediate right, Jeffrey Vander Linden, who is the chief operating officer. And to my left, there's Nauman Baba, who's our chief financial officer. Two of the directors, Joel Rallmann, our CTO, and my fellow nonexecutive director, Thomas Quigley, have been able to attend the meeting in person today and have sent their apologies.

1:14 Ladies and gentlemen, I'd now like to start the formal proceedings of this AGM. We will, as in previous years, go through these, close the meeting, and then proceed to a company presentation and a question and answer session. The notice of the annual general meeting together with explanatory notes was posted to shareholders on the 05/25/2023. Accordingly, the requisite notice of the meeting has been given. I propose, therefore, that with your consent, the notice of the meeting should be taken as read. Is that agreed? Yep. Thank you. Voting today will be done by way of a poll on each of the resolutions put to the meeting. This is best practice as it gives all shareholders the opportunity to participate in the decision making of the company and have their votes recorded in proportion to the number of shares that they hold.

2:06 I and appoint pointing, Nauman to act as scrutineer. A summary of each resolution will be shown on the screen, to my right and shared on the screen together with a breakdown of the proxy votes we received after each resolution is put to the vote. A poll will be conducted when each of the resolutions have been proposed to the meeting. Results of the voting, including the proxy votes on each of the resolutions, will be announced through our regulatory information service and published on our website as soon as reasonably practicable. We will now proceed to vote on the resolutions which I will formally propose to the meeting. The full text of each of the resolutions is set out in the notice of the meeting, a copy of which you will have received.

2:53 Resolutions one to five are proposed as ordinary resolutions and require a simple majority to be passed. Resolutions six to eight are proposed as special resolutions, which are to be passed and require a majority of 75% to vote in favor of the resolution. When you registered your attendance, you'll have been given a a poll card, which shareholders and proxies for shareholders should complete and sign as indicated. In the case of corporate shareholders, the poll card should be completed by their authorized representatives present at the meeting or by their proxy. You have three three options for each resolution. You can vote for, against, or you may withhold your vote. Vote withheld is not a voting law and will not be counted in the calculation of the proportion of votes for or against the resolution.

3:44 I should also mention that for those shareholders who already lodged a proxy, you do not, of course, need to compete complete a poll card unless you want to change your vote. So let's move to the resolutions. Resolution one is to approve the increase in the authorized share capital of the company so that it can be increased to €213,200,000 by the creation of an additional 13,200,000,000 new ordinary shares of €0.001 each. Such new ordinary shares ranking pari passu in all respects with the existing issued and authorized ordinary shares of the same sum, each in the capital of the company.

4:34 The board recommends increasing the authorized share capital of the company in order to provide flexibility to the company on requirements throughout the year. And as I explained to vote, would you please tick the appropriate box on your poll card to vote for the resolution or against, or you may withhold your vote? Is there a poll card? If you could over there. There are the the back of the room? Yes.

5:04 Resolution two is to approve the annual report and accounts for the year ended 12/31/2022. I now propose that the annual report and accounts for the year ended 12/31/2022 be received. Will you please vote on these now also? Thank you very much. Resolution three concerns the reelection of the following directors who retire by rotation and who are eligible for reelection in accordance with article 87 a of the company's articles of association. Those directors are Nauman Babar and Jeffrey Vanderlenden. The board recommends that each of the directors be reelected as a director.

5:50 If you could please vote on those now as well. Thank you. The body is recommending that Grant Thornton be reappointed as auditors of the company. I propose therefore that Grant Thornton be reappointed as auditors as shown on the screen under Resolution four. You could vote on that now as well. Thank you very much. Resolution five, as shown on the screen, relates to the authority of the directors to allot shares. Before the directors can issue shares, they must first be authorized by shareholders to do so. It is now proposed that directors are hereby generally and unconditionally authorized to exercise all powers of the company to a loss relevant securities within the meaning of section one zero two one of the Companies Act 2014 up to an aggregate nominal amount equal to 4.5, million euros.

6:47 Proposed that this authority shall expire at the conclusion of the next annual general meeting of the company unless previously renewed, varied, or revoked by the company in a general meeting. I propose that the directors be authorized to all up shares in accordance with the terms set out in that resolution. If you could please vote on that now. Thanks very much. Moving on to resolution six, which is a special resolution. It relates to the necessary amendment to the memorandum of association to correctly reflect the updated authorized share capital of the company following the passing of resolution one above. Please vote on that now. Thank you. Resolution seven, which is also a special resolution, relates to the necessary amendment to the articles of association to correctly reflect the updated authorized share capital of the company, again, following the passing of resolution one above.

7:46 So we are doing both the memorandum and the articles of association. Please vote on that now. Thank you. Lastly, I propose resolution eight as a special resolution as shown on the screen, which empowers the directors of the company to allot equity securities for cash pursuant to the authority conferred by resolution five, which we've just gone through, as if section one zero two two subsection one of the Companies Act 2014 did not apply to any such allotment up to an aggregate nominal amount

8:22 of €4,500,000. It 's supposed that this power shall expire on the conclusion of the next annual general meeting of the company unless then to the extent that such authority is renewed, revoked, or extended prior to that such date. Could you please vote on that now? And when you have finished the voting, if you could please return your completed polling cards to the scrutineer. And should you need any further assistance, the company secretary would be very happy to assist you. That concludes the formal business of the meeting. I'd like to thank you all for your interest and attendance and declare the meeting closed. Results of the meeting, as I mentioned earlier, will be announced to the markets through our regulatory information service and posted on our website as soon as practicable.

9:14 I'd now like to invite David and the executive team to provide an overview of the company's performance during the year, following which there will be an opportunity for shareholders to ask questions. David, over to you. Thank you very much, Ian. Thank you, everyone, for joining AGM. Please bear with me and apologies for not only my accent to contend today, but also my hoarseness. So we will go through the presentation. We put a business update and outlook presentation for our shareholders today. And we would like to start with the some points of confirmations for our shareholders as well in terms of a few important or priority subjects that have been raised in discussion with most shareholders.

10:09 The first one of that is Italy embassy. So Italy embassy, as we announced, has been completed in December 2022. And operations started in March 2022. And now we are in the middle of a handover. The

10:26 onboarding of the and the training of the full team has been a priority. It has taken in terms of hiring and training the team a bit longer than expected to find the operators in the geographical location. It's important to remember that we are taking extra care to make sure that operationally the plants work very well because this is our first MDC. And as a first MDC, it's already fulfilling its strategic purpose. As we mentioned before, we have already had a number of visits in the plant with another one with a major utility happening next week. We also have been sending the Singles composition data to not only strategic shareholders, but also customers.

11:14 So we're already using Italy as a market development center and we expect in the coming week or so to finalize the handover protocol.

11:31 Another thing that we have obviously been monitoring very closely, as we everyone knows, we are all shareholders and most of us, have significant stake relative to our means, is the shareholder behavior in the last eighteen months. I mean, we have data behind this one that we can share if we have time later in the Q and A. But if we look since the 2019, the last quarter of twenty nineteen, where this management start with the transition and the new strategy, I mean, benchmark against proxies in the space, the company still although has moved in line with most of the proxies, it still shows a 40% improvement ahead of most of the comparables.

12:18 Another metric that we follow closely is as well is revenues. So if you compare with us the selected proxies that we benchmark against, the revenues are between one point six and twenty six times ahead of the comparators. And another important metric for us and for shareholders as well is EBITDA losses, which are significantly less than the the comparators as well. And the the you know, this is this is always says to to the the the share performance. From a operational point of view, I mean, a lot has been delivered. And as the numbers highlight, we have better financial metrics than most of the sector. In terms of another important point is the placing, how has been the place the in the last eighteen months.

13:14 First of all, it's important to to mention that any growth company needs capital, you know, and this is the the the purpose of the end market is for fast growing companies looking to secure growth capital. In our case, the the important thing here is how critical is how that capital is deployed to create value. In our case, the purpose of this capital is to finance the the the pivot to the capital light model that we're discussing. Now every technology company in our space talk about this capital light model. Yet some of this require hundreds of millions, even billions in infrastructure investment and years before transitioning to that model. Our strategy has a certain level of resilience built in, which allow us to focus on smaller project and market development centers that has a a shorter lead time and a lesser requirement of capital to still be able to achieve and leverage those market development center for the pivot.

14:15 So we that's what we are focusing on them. We believe that we're better positioned to do that transition quicker with less capital than others. And but also one thing that is highlight the current capital market is that we need to find an alternative form of

14:30 than capital market funding. And in that context, we have moved to sourcing more aggressively our strategic investor. In the context of a strategic investor, we have announced as well that we have engaged a top tier investment bank to help us on that process. We have we've been evaluating with them a number of alternative structures that include private vehicles for the infrastructure, but also alternative market exchanges, where the real value of the company can be acknowledged and realized. Also, as we transition more and more, and we will talk more about this, working with large scale utilities, corporates, we don't need to get involved in the project funding as much. And those same customers can be our strategic investors. And Jeff will come to explain later how those corporate and large utilities will also will become our go to market vehicles.

15:33 And lastly, talking about communication, probably I'll pass on to Jeff to explain more about what we're doing in communication. Yes. And on communication, I think the first thing I should do is apologize for the first bullet point on this page, which should read completed December 2022, operational March 2023. Hand over now. Apologies for the typing error. More broadly with communication, when we met in this AGM last year at this time, we discussed communication, and I made a commitment on behalf of the business that we were going to improve our communication. What we've done since then is published in our annual report from this year our approach to communication, and that is we've consolidated now multiple agencies we had working with us into a single agency.

16:19 So we have a much more integrated approach to that. We've also looked at regular reviews of the market broadly and also of regular postings that are being made by by shareholders as well as by comparators and competitors and so on. We get regular weekly updates on those, and we are looking at ways of of responding to them. We've also ramped up our our communications with the government in The UK, but also in The EU and in other places, notably in France, and and gradually now, moving into Italy. Where we have not, I think, addressed, enough is in social media. And what has become very clear to us is the news flow, the ongoing flow of information about what the company is doing, is critical.

17:11 Because in the absence of that, we've written here nature abhors a vacuum. If we leave a vacuum of that information in the market, it is filled with misinformation. And, unfortunately, over the past twelve months, we've encountered a lot of misinformation about, our activities and what we're doing. Things are quite a lot simpler and quite a lot more straightforward as I hope we come on and talk about here. So what we have done, is we've put a plan in place with our agency now where we will be filling that gap with regular ongoing information. Yes. Some of it will be repetitive. Of course, it will be because not everyone sees the post for the first time. But that's a big area of focus for us in terms of communication. K. Moving moving to our strategy. I think now we want to highlight and and remind, you know, ourselves and our shareholders what are strategies. Is. All of the activities that we have updated previously in the previous slide should be taken inside the context of our business strategy.

18:11 We set our business strategy two years ago, and we have consistently applied the business strategy to you know, as a reference and for prioritize and to for making the right decision making and to adapt into the current market condition. We we previously also announced that given the the market changes in early twenty two, you know, with the Ukraine crisis, we were forced, you know, to accelerate our strategy towards leaving behind a lot of the legacy arrangement that we have that were not necessarily aligned with the strategy and embracing new opportunities that fit well with the strategy. To reconfirm our business strategy,

18:52 we are focusing three pillars as as equity as a platform for development. The the first one is is our market propositions that will target, you know, our four business model that we show here. And and the other part of this is to attract and support to attract and support those customer types for those market propositions. We need to work with partners to develop the MDCs that showcase that business model in practice and shows also the technologies the equity versatility of the technology, not only from a technical point of view, but also to address different business cases.

19:33 In terms of the our own business model, you know, as we say, is shifting to become a technology licensor, like we said, you know, strategy from the beginning. And and and very focused to have a specific place as such in the project value chain. In order to be able to take that place, we must position Equitec, you know, among the best delivery partners and not do the delivery ourselves. We need to position

19:56 Equitec also among the best technology partners and also about the right type of strategic investment that we're looking for. In terms of the of our to build our operating model to service that or or we can call that as well our execution platform, we need to be focused on the technology innovation and engineering. And with very strong go to market that incubate, develop, and maintain and support those customers. And it's very important because those customers will be the owners of their projects, where we have no equity in this project, hence, been able to transition quicker to a licensing model. To be able to maintain this engineering leadership that we have, we must continue to grow their capabilities. We continue to hire, recruit and train the best process engineering and innovation talent.

20:46 And we need to partner with other engineering companies, which we're already doing that extend our capacity to deliver more of our technology in more places with with a ability to scale.

21:02 So in one of our recent videos that we released, at the same time as our annual results, in early May this year, we talked about the notion of a pivot. And pivots mean different things, but let's get beyond the jargon and talk about what we actually mean. And, really, David and what he's just outlined or reminded us of in terms of the strategy we've put in place a few years ago,

21:27 you know, is that pivot. And in fact, here, when we met last year as an AGM, we talked about that pivot as well. The the main thing that I want to get across here is the pivot from being a project focused developer to being a technology focused licensor is easy to understand intellectually, but it's much more interesting when we unpack the implications of that for how we generate revenues and how we manage the business. And so that's one of the really key things we want to get across today.

22:01 What it means, first of all, is that we're going to move beyond supplying our own capital. We are not a balance sheet company. We do not have a lot of capital. And in fact, as David said at the outset, raising capital in these current market conditions is very difficult to do.

22:17 We are not the only company. We talked to many other companies, some of whom are much larger and much more focused on capital raising who are struggling as well. We want to focus on the thing that we do best, which is developing the technology and innovating that technology in that IP. You know, we had several announcements last year about everything from contaminated plastics to putting in place a steam oxygen gasification capability that opens up the door to move us beyond the electron, I e combined heat and power, to the molecule, by which we mean,

22:54 you know, renewable natural gas, hydrogen, you know, liquid fuels, and other types of chemicals like ethanol and methanol and so on. We are able to supply to those markets with our synthesis gas because we are constantly staying ahead. We are not at all, you know, being myopic about our current technology, and we are constantly investing in moving that forward. That is where our strength is, not in in in trying to develop those those projects.

23:23 Important thing about that is there therefore, we're moving away from a situation where we have to hold the liabilities for these projects. We announced in our annual report. Last year, we released the company from €18,000,000 worth of liabilities, and we avoided those tremendous cost to the company because we were getting out of that business model. Those are the types of numbers that we need to be able to play for for a developer. When we move into being a company where we're purely focused on the technology innovation, we are investing far less

23:59 capital in that innovation and getting a lot more leverage from it. And we're becoming famous as a result of it in places like France that we'll come on and talk about. What we're then what we're also doing is we're shifting those liabilities away from EQTeq to the project owners because we are no longer project owners. And in fact, on our in our last board meeting when we looked at our revenue forecast, we only identified three projects where we are still

24:27 invested in those specific projects and a and a much longer list where we are taking orders for our technology to supply to other people's projects that they have to finance, they have to take the risk for, and they have to fund. We we've we've talked to the past as well, and I'll I'll give a status update that on that in a moment, about the unbundling of our pricing and the unbundling of our solutions. When we are in the business of doing exactly what the first pillar of the strategy is focused on, which is getting more reference plants,

25:02 we just want our technology deployed. So we bundle together the technology, the right to use the IP, the services to install that technology, the services to commission that technology, the original services to design the the the solution for a specific plant. We bundle all of that together simply to get things deployed. What we will gradually do as we get more of these plants up and running, and we are we are getting more of these plants up and running, as we do that, we will then be able to charge for every single service we provide at market rates, at market margins. We will charge for the right to use our IP and get licensing revenues year on year as recurring revenues across every plant running our technology, and we will be able to charge for all the services associated with advising and commissioning those.

25:53 That's going to give us regular and ongoing revenues as as we grow.

26:00 Oh, we're moving away naturally, therefore, from being a project business to an order book business, and the implications of that are extreme. It means that this company will not hold abilities for projects. We we are we will not be bound by the milestones of projects, financial close, FID,

26:20 or even COD. Although they will be targets for us, we will simply be supplying the technology to achieve them. If the financing falls short, it will have an impact on us, but it will be an indirect impact. Right? And we will simply turn our attention to other projects that are getting closer to financial closer, closer to FID. We will get an increasingly longer list of projects to mitigate the risk that we cannot deliver revenues. So this is a very significant difference because right now, we're being asked questions about when are you going to hit this milestone, when will this plant go live. And that's a fair question when we're trying to still get up reference plants. But as we move over to this model and as more of those reference plants come online, the question then needs to become,

27:08 are we going to hit the revenue forecast? And we will have a longer set of projects that we can choose from to do that. So we're moving from that project ownership to being the core technology supplier or provider to other people's projects. To do this, you know, as we've said and as as David outlined as part of, you know, a key part of our strategy, we have to have the best partners. We cannot rely consistently on small scale local partners, And I'll come on in a moment and talk about what that has cost us. We saw it recently in California. We took a €4,700,000 write off because we did not work with the absolute top tier partners who mitigate the risk of delivery.

27:54 That is something that we have to take seriously. In the future, the more projects we have, the more we can mitigate that risk. But because this is an early stage project, it it has hurt us. And so what you have seen, I hope, is that we are gradually moving to working with the top tier national or multinational partners. And the names that we are associating EQUTEC with are very readily getting involved with us, and those are the players we want to work with. And that's not only on delivery, the likes of Wood as a technology partner or Petrofac or Black and Veatch. This is also in terms of some of the partners now that we're announcing that we're going to to deliver projects with, the likes of IDEX, and so on. So in terms of an update on how that pivot is going, the first three bars you see here are the actuals in terms of proportionality of technology sales and services revenues to project development services revenues. And what you see in the first three years is we were pursuing a strategy of driving our own projects in a market where raising capital was possible for us.

29:02 What you're now seeing is a decline, and the 2023 numbers are based on our management forecasts. We're already seeing a decline in the proportion of project development services and a greater amount of revenue coming in from technology sales and services. What you then see and you've seen a similar chart to this before that went a bit further out, but this takes us up through the end of the decade. What we will begin to do now is unbundle those and charge for every service, charge separately for equipment. We won't call it technology sales. We'll call it equipment sales. You know? And we will have a range of engineering services charged at market rates and margins that we will be able to bring in as recurring revenues.

29:44 And then over time, we will gradually ramp in licensing, probably bundled in the beginning with maintenance as well. So over time, more of our revenues will come from recurring sources from a bigger a a larger number, a longer list of projects, and that will be something that we will be able to use to make ourselves more resilient. By the way, all of these slides will be available, on the IMC portal or or on our website, you know, after the, after the event. In terms of what we're doing with our GTMs, our go to markets, right, there are six areas we've been focusing primarily, The US, The UK, Greece, Croatia, Italy, and France. Right? And we've been in involved in those actively involved, you know, as David pointed out, since 2019, since this management team came on board for varying number of years.

30:37 But if we start to look the at the go to market capabilities here, something quite interesting emerges. And that is that in some of those markets, namely France as as the real example and Italy and Croatia, we're seeing very, very rapid performance in terms of starting to to land deals, and we're seeing pipe we've we've always seen the pipelines come quite quickly.

31:00 Why is that? Well, number one, we've got a strong partner or a strong MD and a strong local team in place leading the go to market. The second thing is we've got strong local delivery partners. And in in in many cases here, COSMI, who have been a long standing EPC partner of ours, who know our technology very well and have partnered with us on many of these projects, continue to be a very reliable partner. And we're building new ones in France and in Italy as well. And the last thing that's crucial here is in terms of development liabilities, in terms of moving away from projects, you can see that in these areas, we are not holding the liabilities. In the case of the Italy MDC, we we still hold a piece of that, ownership, but that is something that over time, we may we may potentially decide to give up.

31:51 If we look at the legacy, we still have work to do. If you look at Greece to a lesser extent, but in The UK and The US, what you find is we do not have yet strong local GTM capability. In Greece, we're renegotiating now in a way that we will get that, but we have not had that. In terms of strong local delivery, it is still missing with the exception of The UK where we've got strong partners, but we've had issues with funding those very large projects. And finally, in terms of development liabilities, we tend to be actively involved in investing in those projects. So the goal here now

32:28 is to take our our business strategy that David outlined. And in the same way, we've successfully put it into France, which is greenfield for us. It's a new market. And then now in Italy and Croatia as well, we need to apply that into our legacy markets. And that is the process we're going through. So you following on what Jeff is saying, if we if we look at France, France is a perfect case study of because it's a it's it's a product of the the old strategy at work. We launched France in March 2022, so just probably fifteen months ago. We now not only have a large and growing pipeline, but it's a very high quality pipeline. Within the pipeline, five of those projects, as you see here, are already well shaped.

33:18 We announced only three, which is France, MDC, Garda, and Limoges, but we have two more that we expect to be announcing soon. The the three projects are the the the one that we announced are engagements with well established, well funded utility players. You know, France NDC is in the process to be sold to a utility. The Gardein process is just something that validates the profile that we have in France where we have secure government funding to carry out an important feasibility to transition an all legacy coal plant into something future proof as well in the energy transition. And the Limos project is very important. You know, it was a it was an open tender by municipality where we won alongside IDEX.

34:03 IDEX being the owner operator, and we're just being the technology supplier that given the edge to win that tender as well. If you think about the the as well, another interesting thing to mention in France is like the three projects are, what Jeff mentioned before, molecule projects where higher value is being generated now both from a point of view of the off take and the demand from investors. These are, you know, RNG or hydrogen type of projects instead of just simple combined heat and power. So the fact that we win a public tender using our technology for more than combined heat and power is very encouraging to see that the profile from a technical point of view that the company has in in this market already. You know, so you you guys probably all know as well, most of the project where we are working in terms of renewable natural gas or hydrogen are working in in collaboration, developing an integrated engineering solution with wood. So these are project that we bought to the table for wood, and now wood is also bringing projects, as I say, to the table for us.

35:09 Another interesting thing happened in France is some of these utility companies are bringing the project to us. Having experienced what is interacting with Equitec on the technical level, they have been then bringing other projects and portfolio project that they may have. I will see this more and more happening in the coming months. As we said as well before, I mean, we intend to own none of these projects. Whenever we have an equity position or we're involved in the early development, We are in the we're pursuing rapidly to sell these projects and to sell them to an established utility company. All the permitting of this project is done. And they have very strong support from local and regional government, as you can see by the grant that we received for the Gardaan project from the central government. And again, another thing as well that we mentioned before early when I was talking about access to capital, we don't need to be involved at all in the funding of this project. We can focus just to be a technology provider.

36:16 The the looking ahead, what's the outlook for 2024? So, again, you know, our order book is increasing, particularly at the level of engineering and design work. This is very important because the engineering and design work that we're seeing, particularly in France now, but also in Italy, it it would become the the orders that we'll receive in 2024 because, obviously, when when we do engineering and design, we only do engineering design majority for technology. So, obviously, that will create the order book for 2024 to receive the technology sales of that year. On that basis, we expect that we'll be coming out of the pivot in 2024. In 2023, we'll see a relatively smaller revenue per client, but more recurrently from a longer list of clients you know, where we can build earlier and we can build often, you know, during the process. So as Jeff was saying, even if some project get delay in achieving the the the funding to complete or the the utility client decide to prioritize another project.

37:23 We've been paid along the process when we invoice for engineering and not where we are involved in the capital table of the company. That means that we can only invoice what we sell. So we'll see this transition. We'll be able to capture value quicker by invoicing early and regularly. And also, it will our revenues profile will also smooth and it will stop being backloaded as when the project reached financial close. We will continue to prioritize Croatia and France MDC to have the next two plants up and running. As we mentioned before, I mean, Croatia is very close to it's probably six months away or less from construction. We're looking to secure funding with a number of equity and debt investors.

38:11 And the refinance of Italy will set the benchmark to attract the same type of funders into Croatia. In France as well, we're very advanced to sell the SPV and retain a carried interest and the ability to showcase the plant and use it and have visits once a month. I mean, if we think about compare this with Movialza, we have maybe once or twice a year maximum ability to visit the plant. We don't operate it. We don't have access to the data. I mean, Italy already have had twice or 3x the number of visits that we have in Mobileye last year. So just the multiplying effect of having Croatia up and running and having France owned by established utility, it will it will be critical for equity. And in the case of Aggregates and Norfolk, which are legacy projects where we have little or no control on the delivery, where we have already captured the revenues are, we continue to support and work with the local stakeholders and the funders to achieve one of these plans, if not two, being online also in the short term.

39:21 In the case of Aggregates, we have a team last week assisting them with the beginning hot commissioning. And in Norfolk, we are fully involved with the bondholders in terms of providing the required support for commissioning these projects. What we especially as well in terms of France, we are evolving an added majority utility players in term of the ownership of these MDCs. And we expect that also when we look at you know, UK MVC or any other that this will be owned by a large utility company. In terms of Ireland, we see new opportunities, particularly in the in the sector in the energy hungry sector or or tech sector.

40:09 So we're looking here not only for, you know, combined heat and power for data center, but also the production of ethanol, methanol, and all the drop in fuels. In terms of Spain, you and USA as well, we are being approached now by larger, well established clients and potential customers, gas companies, fuel companies, companies seeking to build hydrogen infrastructure both in Spain and The US and others. We'll see more and more, as Jeff was mentioning before, and we say, the transition of the demand is shifting to more molecule, chemical application, renewable natural gas, combined heat and power to power electrolysis, but also production of hydrogen directly from the synthesis gas.

40:55 And now we have, know, as mentioned, a lot of inquiries around ethanol, methanol and liquid fuels. In terms of our pipeline, again, to to restate what Jeff was mentioning as well, working with larger corporates, established utility and established full companies, we will see that we'll have, you know, more revenues coming from engineering design for, you know, no names. We'll be announcing this no name soon. And, you know, so the qualification of the project will be much easier, and it's be just a matter of prioritize the project that are strategic important for this blue chip customer and stakeholders. And we're looking now also to, as I say, reconfigure as well as we transition more to working with larger corporates and they become our own go to market as well. And they'll bring their own pipeline and their strategic priorities for us.

41:56 With that outlook, we finished the presentation where we wanted to give AGM to our shareholders. I want to close by thanking everyone, both the all employees that all of them are, in a way, shareholders. And we all appreciate the support and the interest for all our shareholders. We understand that it's not been an easy period by any means, particularly for the last eighteen months to be a shareholder of any public company. All we can say is, like, you know, we take this very serious seriously. We are all invested in the company, you know, physically, emotionally, finance. Why? I mean, you know, we talk about all of our executives have to, like, extend of or mean a big investment there.

42:43 I mean, we have a team in Italy, you know, coming, doing sixteen hours a day, training the people, making sure that everything is well. We have a team, you know, traveling on Sunday to Greece last week. Everyone is very committed to deliver plan that we have. And we are not losing any enthusiasm because of the environment and the market. The market changed, the bull market will become again one day, you know, we will offer a bear market or bull market soon. But what is very important is, like, in whatever environment that we are, whatever context we are, that we are delivering operational progress. And I think we're doing that and we want really want to thank both our staff and everyone involved and our partners in delivering this and also shareholders for the resilience and forbearance required to hold shares into any public stock. So with that, we would like to finish the executive presentation and perhaps move to the Q and A session. David, thank you very much indeed. Just while the company and those in the room take a moment, I'd like to remind you that the recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

43:52 Ian, perhaps if I can hand back to you to take those pre submitted questions from investors followed by those in the room and time permitting those online. Due to the number of attendees on today's call, the company may not be to answer every question submitted. However, all questions will be reviewed. Responses published on the Investor Meet company platform where appropriate to do so. Ian, if I may just hand back to you, and I'll pick up from you at the end. Yes. Thanks, Paul. Let me take a couple of presubmitted questions and then throw it open to those who are attending the meeting. First presubmitted question is what is the estimated sales expectation at the end of the year? And, Norman, I think you were gonna answer that. Yes. Sure. Thanks so much, Ian. So the the current market guidance is reaffirmed. If there is any change in the order book, which would have an impact on the revenues, then we would issue a trading update through the normal RNS service that we have in line with the EM regulations.

44:47 As you'd appreciate that we cannot make any forward looking statements at this stage, but just to reconfirm that the existing guidance in the market stays as it stands, yes. And a second question is, does the company have a definite pipeline of works past 2023, or are they just proposed pipelines? Jeff, maybe you could handle that one. Yeah. There's a a couple of key things to say. One, hopefully, I've already said it, which is that our our pipeline of active projects is going to grow. I think we've said for many years now, we have more demand than we can actually service, And we get anywhere from half a dozen to a dozen new inquiries every single week.

45:34 And we've got a very structured stage gate approach for how we manage those. So things coming in as inquiries, whether they come through conversations that one of us might have or whether they come through the website or they come through email, they go into what we call a gate zero process. They are prioritized. They're vetted. Some some things are for for very small projects, say, 200 kilowatts, and we simply say that's not really an an area of focus for us. Other things are very interesting, and they're very well outlined by developer or a potential owner operator. In those, we may engage. You know? For example, we're talking to a company in Brazil right now. We're not anxious at, like, jumping into Brazil. There would be a number of conditions that would have to be met for us to have to go in, you know, to go in there and do that sort of project.

46:22 But as we become that pure technology provider, the door is open for us to to address a far broader range of perspective projects that other people are running. So in terms of beyond 2023, yes, absolutely, we have a pipeline. And I think some of the announcements we made about, you know, for example, with Gardan, These are not projects we're going to deliver this year. We will do some work, but those are projects that are setting up for next year and the year after that. So, you know, as much as we are focused right now on our market development centers, as we said many times, as much as we're focused on the very specific set of plants going live, we are also always setting up for the next year and the year after that.

47:08 That's a very active ongoing discussion that we have. Thanks, Jeff. Shall we move on? Let me just do one one more while we're at it because it's a it's it's a good question. It says, by when do you envisage architect moving into a net profit situation where income outweighs costs? So, obviously, as a as a management team, we have been focused on delivering revenue and profitability. However, with the challenging market conditions, our progress towards that goal has been slowed. We expect to achieve profitability within the next two two years or so as as EQUTIQ gains more traction in delivering on the market development centers, and there's a lot more interest in our technology from the top tier partners that David and Jeff have mentioned before. So we very much kind of ascribe to that goal, and we are kind of put we are putting a lot of discipline to to make that move towards achieving that goal possible in the next two years or so. Yeah. Let let let me go to the room and ask if there are particular questions that you want to raise in in the room now.

48:26 Is it? Yeah. You know, we've all invested money in the company, and you have only got 1,000,000 shares. Yeah. Do you not believe in the company? Okay. So just just to paraphrase because they might not be able to hear it online. Is that Norman's shareholding is is pretty small. He bought five In it's about a million shares. And so the question is whether he he has confidence in the company. I I I do believe in the company for sure. And, you know, there is a lot more personal investment that you guys would not see potentially just in terms of the numbers of shares. But we have, you know, all executives, not just myself, that you have agreed to take a lot of our remuneration, the shares. If you would not believe in the company's future, we would never do that.

49:17 Mhmm. Another question? You know, David, when you come in, your salary's increased by, from 300,000 to 400,000. And, now you're reducing it by 25% by taking that insurance, so you've still had an increase by 50% since you come in on this. The salary is not 400,000. That includes It it is with your benefits and pensions and incentives. So so just to summarize for those who are online, and there's quite a lot of people on online, Basically, a question saying, are the current executive remuneration packages justified? Well, I remind them getting paid well if you deliver or, you know, even double your money from now if you deliver.

50:04 Yeah. That understand the point you're you're you're making that, nope. You expect directors to be paid for for performance, and then that's the sort of Yeah. The question. Let let me as As empathy with the shareholders. Yeah. Yeah. Let me as sort of chairman of the remuneration committee just sort of give you a give you a response to that that. I mean, basically, what we do with which is what most professional companies do is we look very closely at benchmarks published by expert and third market parties for relevant relevant aim take it. Relevant aim and small market cap companies with capitalizations of 150,000,000 or or less.

50:54 We benchmark we benchmark those, and that's that's basically how we've set base salaries. 20,000,000 market capital. The the board is act actually paying well below those benchmarks, and we made some uplifts in remuneration in 2021 to make it closer to, but still well under benchmarks for what's out there. And I actually think that investors should recognize the quality of talent that we have in the business. I think the presentation that Sure. Okay. That Jeff and David just took you through clearly demonstrates the strategy for the business, what our plans are for the future.

51:45 And, yeah, that is not reflected in the share price. And I think that the share price of Ecotec massively underestimates the potential of the company. And I that that changes. But AIM is just a very difficult market. When you look at shares, share prices for some of our our peers who who the industry compares us against, you know, the likes of Ceres Power or ITM Power or or Velocis, they've all gone through a really tough time and seen their share price drop as well. So it's it's disappointing that the markets don't value Equitech higher at the moment. And we hope that through presentations, through through performance, that we will get a rerating of shares in the future.

52:39 If if you say the MDC sorted in Italy, surely people would start having confidence in you so that you can deliver. Well, we said we we said time, Nava, you're going to deliver it, didn't you, David? Yeah. It it it'll you know, as I as I say, Completely handed over to the client in one weeks time. Yeah. Yeah. Heating. Electricity. Is it the way Okay. Can can I just summarize the question in case it can't be heard online? His question is, is is Italy gonna be handed over in a week's time, and will that make a difference to the share price? Yeah. All all I'll answer about Italy. Italy, the the the handover of these plans can take up to six months of normal plans. Italy is very important for us because of market development center. Now the revenue from a point of view of the technology provider, we we have received the revenues from Italy.

53:32 We're just making sure we have used Italy's m MDC already with visits as I as I mentioned before in providing data to particular stakeholders. So, yes, the handover is a milestone, in particular, as we're gonna be refinancing it. But but the the obsession about the handover, it doesn't change that it's fulfilling the revenue profile that we discussed that we're going to to receive from that and the fact that it's working as a marketing asset. Of course, the more people we can take to Italy, one thing that we're discussing before, the AGM is to organize a a retail or investor meeting and go to Italy and take a group of fifteen, twenty people. That would be great because as Jeff was saying, when you have a vacuum of information, you know, everyone will come with a conjecture or fill in the gap with something.

54:17 Know? Of concept, David. The Italian MDC delivered would be proof that you can Absolutely. Know, how that works. Well, yeah, is proof of concept as well and has been operating for over a decade, hasn't it? Yeah. Yes. It judgment at at at the back of the question. Yeah. I I Yeah. So you're disappointed with the share price at the moment. Why should the market value the company more when you've got no coaching? Like, you've got one project now after all these years, hopefully, handled over the next six months. How many projects will you handle over in the next twelve months? You've won them this year. How many projects will be handed over next year? So so so the question is about it is about how many projects are Well, what what are you disappointed when you're not from?

55:04 Question is about projects, which is probably not exactly what the presentation is about, which is actually how we move from projects. Yes. Market development centers as projects, but how we move from projects and and pivot. But maybe, Jeff, do you wanna pick up that one? Yes. I mean, again, we have to come back to to to to the facts of of of the situation here. First of all, handover. Handover is an agreement between the commissioning party, in this case, EQTech working with our EPC partners, to hand over to the owner and operator of the plant, who's not us. It's a company registered in Italy. We are the second shareholder in that, and we're only a shareholder for exactly what David said because it's a market development center, and as you're saying as well, because it's a proof of concept for what we want to do. And, therefore, it's very important to us.

55:57 That company has to be ready to run that plant. Now David alluded to this earlier in the presentation. Getting staff for that plant has been no mean feat for that company. Because Italian, we're we're in the middle of a touristy, you know, agricultural area where you don't find a lot of plant operators, and we're working with one of the, well, actually, the largest staffing agency in the world, and we're working with their local office. They have had to work very hard to find staff who are qualified to run that plant. So that means the recipient of that plant has not been ready to carry on without us. And as David said, EQTeq engineers have been going on-site working alongside that team, and it's a good team, but working alongside that team to ensure that they're getting up to speed.

56:46 So handover is not simply a matter of the technology doesn't work. To the contrary, the results we've had that, again, David mentioned earlier, we have sent to prospective clients. We send with pride because the syngas composition is is exceptionally good. It's very, very good. So we are in a very good position to hand over, but we cannot hand over until we're able to hand over. And you're absolutely right. Until we can, we don't have a reference plant that we can say is is running, but we've still been doing visits anyway. And not only we've been doing visits, but some of the work that we've put on screen today, like Limoges, some of the, other projects that we put on screen today but have not yet announced that but but hope to announce soon are coming online because they're visiting the Italy plant, and they're seeing the exceptional results. They're seeing that we have thought through the entire process end to end. The feedback we're getting is you guys have thought of everything, and they're sending their experts, they being utility companies, big investor utility companies.

57:49 They're saying, you guys have thought through all of the big problems we've seen with this kind of process in the past. So we have supreme confidence that Italy will be handed over when handover is possible, and we have said we've been on record that we will announce it as soon as that happens. The last thing I'll say is because of that, we're not we are not spending nearly as much time on Italy as perhaps, you know, others are because that will happen. What we're doing is we're moving on, we're building the pipeline, we're bringing in new clients, and we're selling new work. Yeah. Let let me knock off a couple of presubmitted questions. And and and, Paul, is it okay if we go, to quarter past before we we close the the online meeting? Absolutely. Have a chat Absolutely.

58:39 With with with those in the room? Of course. Yeah. So the the fourth question will be, can we expect to share consolidation before the next round of equity raises? Yeah. I can I can take that? David? Yeah. So, again, I think this is in the context of I think there's two questions here. One, are you doing share consolidation? What is the new equity raise? As I mentioned, when we're talking about strategic investor and what we're looking at, we don't believe that the capital markets at the moment, particularly not AIM, are a suitable venue to raise any more capital, particularly we want to avoid as much as we can dilution in the current at the current valuation. So share consolidation will make sense for a number of reasons, particularly because when you are below a penny, I mean, lot of the platform or some of the custodian cannot even take your shares. So in isolation, a share a share consolidation doesn't achieve anything.

59:33 You know? In the context of a strategic transaction with a specific investor coming to the company or a move to a different exchange, like, we we made we're evaluating it potentially in The States, then you have a share consolidation as part of this transaction. But just do a share consolidation, you know, on its own, it doesn't achieve in anything. So in the future, can we expect? Yes. In the context of a strategic transaction in isolation, there's no point of doing it. Yeah. And David, there's a there's a question really about sort of well, maybe not for you, but maybe now I want to to answer This one really about dilution and about adding to shares on issue when we've got, you know, an undervalued company at the moment.

1:00:19 Do you want to take that one? Yes. So we do understand that the company is currently undervalued, and we are cognizant of the fact that any placing that we do at this level is going to be highly dilutive. So what we are doing about it as a management team is three things. First, as David mentioned earlier, we have appointed an investment bank who are looking into, who are actually garnering interest from investors who would like to invest into projects that would use EQUTIX technology. So that's one thing. So as we are moving from becoming a project developer to just a technology provider, we want to ensure that investors who are adept at investing into the projects and coming into the projects that this investment bank that we have appointed can actually bring that bring those in.

1:01:10 The second thing that we are doing, which is more in line with the pivot again, is that we are shutting off development liabilities. As as mentioned in our annual report as well and as Jeff mentioned earlier, there are €18,000,000 worth of development liabilities that we came out of as a result of renegotiation on the projects or the contracts that we had on some of The UK pipelines. And the third thing that we are doing is we are we are really going after recovering capital for on the projects that we had actually deployed capital before. It could be in the form of refinancing. So, for example, once the Italy plant is kind of handed over, then we we hopefully, we can announce the refinancing of that of that plant as well. And also selling the project SPVs without naming any particular ones, but we are reaching out to the investors who can actually take our stake in project SPV so that we can release capital from there on. Because investors are it's their business to actually invest into the projects, and it's our business to just provide the technology. So we are kind of going along into deploying our strategy.

1:02:23 So those are the kind of steps that we are taking to ensure that we we reduce these instances of dilutive share place. Yeah. Another question, I think this is for for David as well. Given the share price, is there any intention of the leadership team to take the company private? Not not of this evaluation. So the the there is no secret, particularly as the work we've been doing with the investment bank, that being a small cap public company restrict the type of investors that you can go for. A lot of strategic investors will are not geared to deal with a public traded company. But the reason why we're looking at alternative to set up private vehicles where they can invest with a license for technology is exactly to to prevent or to address that requirement.

1:03:13 So so we don't we will not you know, it would make no sense for us to take the company private at this valuation. But, you know, we are looking at how can we benefit from attracting the type of capital in a private vehicle that is not necessary the listed vehicle. And as we move more to be a licensor, we can license the technology to that private vehicle where capital can be put into the company without being diluted for the shareholders. Thanks. And there was a pre submitted question as well saying, have any large investors committed to technology? You covered that a little bit, but I think I think it's the same it's the same thing that we we are talking about the the the private the private vehicle. I mean, some of the large investors, you know, are are prevented from being in in public company.

1:04:08 Some others that have done, like, we can we have seen some companies, you know, like Linde and other companies that have invested in the sector, has been, you know, at a time where the market was very different. Now we have not really pursued strategic investor of this caliber until very recently, hence, the appointment of the investment bank. And the reason is because we've mentioned this before, we were building the the minimal commercial infrastructure to be able to be more attractive and more valuable to these these investors. You know? So that's that's the the the the situation where where we are. We believe that now that we're talking to, you know, and and, you know, people are no known in the market or discussion with the the like of ADX, which are owned by private equity. But you also will start listening to and hearing new number, new names of new companies that very much can be strategic investors. All of all of these are discussing about perhaps investing directly in a go to market like France.

1:05:07 So we are seriously pursuing a structure now that even by being quoted, we can attract that type of investment. Yeah. Thanks, David. There was a question on the executive remuneration, but one of the gentlemen in the rooms already raised that. So maybe we move on to the next one. May may I just add to a point of technicality on the remuneration? Yeah. It's important to know that we are not paid unless we are not paid in our package or anywhere near it unless we perform. So the numbers that we report in the annual report are a total maximum potential. I think there's a lot of misunderstanding about this. The amount that we are guaranteed of that is much smaller, and we go through a rigorous balanced scorecard exercise at the end of every year as part of our business planning going into the next year. Once we approve that then, we weight every one of the measurement points in that balanced scorecard. And this is a classic common practice in in most businesses.

1:06:14 We then go through and score those, and we are very hard on ourselves, I would you know, I I think, in terms of how we performed. That is how the business has performed, and our remuneration is directly tagged to that. So and and that remuneration, both in terms of any kind of cash bonus, which we will receive zero of for last year's performance. Zero. What percent Right. What percentage of remuneration did we get last year? What percent did we get last year? A lot less than the the the maximum potential. Performance was a lot less, obviously, than what it what you were you were So so the So so and then the second point is that any share options you released are also tagged to that performance. So a significant 60% of our potential share, you know, receipts are pinned to the company's performance.

1:07:07 So in no the point I want to make here is and this is, again, standard practice across companies. But going back to Ian's point about benchmarking, we have a higher proportion of our performance pegged to company performance than most other companies of our size do. And when I say our size, I mean, a 150,000,000 market capital or less, which is which is the benchmark that we're using. So in no way do I want people here to think that the numbers that are published in the annual report represent what the directors are being paid because it's not true. And just just to make a point about attracting the right talent, if you if we think about this company, have 27 employees. 20 are engineers. You know? So you need to attract I mean, each individual that we attract to the company on the corporate center, same in the in the engineers, have a market value.

1:07:58 So if you don't pay the market value, that person that talent would go elsewhere. Now to make your point about performance of the share, you know, we could we could share the data with you after. You know, this is not different to many companies in the sector. So what do you do in a moment of crisis, you know, where you have a bear market, you have unprecedented economic condition, you will cut the salary of people that are worth more and being paid as well. So you have an exodus of people that you need to hold the boat steady in a critical time. It's counterintuitive. It does it it doesn't make sense. You know? All of us here, I can speak with the with the CFO, COO, and myself in the c CTO as well, but particularly us, we have, in terms of basic salary, a reduction to what we were earning before joining equity.

1:08:46 A significant reduction because we will have a share package, and we believe this is a multibillion company to be built in the making. You know, if you if you if you think about that as well, just to continue, we I mean, as as early as as the previous place and the last time that we put money, which we don't have disposable income like we have before, that we put money into the company, Jeff, myself, it was at $1.50. A $1.50. So we feel the pain equally like everyone else. In addition to that, we're putting the twelve, fifteen, sixteen hours required to do it to the plan. I understand for you, it's particularly difficult as well because you've been in the journeys in 2008 into this company. But as we say, I mean, we join I joined the company in September 2019, and we reinvent the strategy of the company. You know? Jeff joins me the year after and Norman six months after that.

1:09:38 So I I am the longest I've been in this management for less than four years in the business. That when we joined, I had a 25,000,000 debt and a 10,000,000 market cap. So things happen quickly, but for in the middle of the last three years, you know, you need to attract very good people that can do, you know, the job. Yeah. So Can I can I just say one final thing as as as sort of chairman of the company on this before we move on to other points? And and that and that is yeah. Over the last year, I've seen just how hard these guys work. Right? And these are talented guys that could go elsewhere for more money and less stress, but they're actually invested in the company and wanting to make it work.

1:10:24 And we have to reflect that, and we have to reflect the flight risk in our remuneration for policy sick. As as a as a business. And and they are, you know, fully aligned and incredibly committed as executives. And, you know, I just want to want to say that, and I actually think that I'd like shareholders to recognize that a a little bit more. I could maybe move on because we've got four minutes left. So just just to the last couple of questions that we've got. We had a number of investors presubmitting questions saying individual projects and the briefing on them always seems a bit unclear. We've talked a little bit about that, but is there anything more you wanna say, Jeff?

1:11:10 Always. Yeah. Indeed. Yeah. And and it follows on from the point we're making about our role. If we don't own the project, it's not our gift to announce the details about a project. That's the first thing to say. There have been several questions, and forgive apologies to the audience here because I've been going through the questions that have been coming in online. There have been several questions about AGGRIGAS, because we know that AGGRIGAS made an announcement, you know, in the past few days about what's happening on that site. That is within their right to do. They are the owner. They are the developer of that project, and it is theirs to announce how they wish. It is not the technology provider's, you know, right to go and say that.

1:11:55 You know, if if, Microsoft goes around talking about, you know, some of the big implementations they're doing at their customers, they can only publish it on their website with permission. And we are not in a position right now that that the plant is not, you know, done. It's not a 100%, and, therefore, it is not our gift to go into any detail about what's happening on that project. The second thing to say is that those of you who have done large scale projects before know those projects are subject to a lot of change. We we have, in the past, when we were developing projects, talked about financial close. You can't pin down a date. You can set a target date, but you will run into a lot of challenges in terms of hitting that date. As a publicly traded company, if we have to constantly go out as you know, and revise and revise and revise what we've posted before, what kind of confusion does that send the market about what's going on?

1:12:51 The feedback we have had, and I know that that we've had several bits of feedback saying we don't say enough, we get exactly the opposite feedback from our advisers, which is we say way too much. And that brings me to my third and final point, which is give people who don't have the experience doing these types of projects a little bit of information, and they will turn it into something it is not. They will misunderstand it. They will extrapolate from it. And before you know it, there's a whole conspiracy theory about what's going on. That is very dangerous because we're publicly traded. So I would defy anyone, or let me invite people because I hope you find some, to show me what's happening in BP's projects or Shell's projects or projects or any big utility.

1:13:39 What kind of detail are you seeing published about what milestones they have, whether they're hitting those milestones, how much revenue they're going to get, and that sort of thing. I think you will not find that in any other publicly traded company. And that is why we are very careful about what we say about projects. And keep in mind, under AIM rules, we must say certain things, but we must also be careful to not say other things. And so, you know, we do our best to communicate as much as we can. We've often said how much we appreciate the engagement, of our of our shareholders and how actively engaged they are and how much passion they have for EQUTEC, and we don't take that for granted. But we also have to be careful about what we say in the interest of shareholders as much as in the con in the company at large.

1:14:29 Yep. Thanks, Jeff. And, yep, thanks for making the points because there was another question on milestones and completion dates and and for for making the points on on aggregates, which I know has has has been sort of one of the online questions. Yes. I think that really sort of times us out. So, Paul, can I hand hand it back to you to do the online closing, and then we can have a a a call informally with some of the people in the room? Fantastic. Thank you very much, Anita. On that note, thank you and the board for updating attendees today. Can I please ask attendees not to close the session? You should be automatically redirected to provide your feedback in order the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it's greatly valued by the company. On behalf of the board of Thank for taking the PLC, we'd like to thank you for attending today's annual general meeting, and good afternoon to you all.