Quadrise (LSE:QED) — Business Update and Open Offer

0:01 Good morning, and welcome to the QUADRISE PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply click Q and A, scroll to the bottom, type your question and press send. The company may not be in a position to answer every question received during the meeting. I will let company review all questions submitted today and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Andy Morrison, Non Executive Chair. Good morning.

0:30 Thanks so much, and welcome, everyone, to our presentation and business update today. We're going to use a presentation here to take you through some of it will be familiar to you and because you're already invested in the company. And so we'll go as fast as we can concentrate on the project, which I know that you're from the questions you submitted, you're particularly interested in always to update. And we'll try and leave as much time as we can for the questions and answers. There's a considerable number of questions that come through pre asked, and we will attempt to address those both through the presentation and also afterwards. So we'll leave as much time as we can for debate. Course, I'm joined here today by Jason, the two of us on. I'm afraid my broadband link isn't good enough for you to be able to see me, but I can see everything that's going on in the webinar, and I'll be working it with Jason.

1:28 So the purpose of our presentation today is to give you the update and explain about the open offer, which we've just recently launched. And you see the first slide there. If I move over, we have our regular disclaimer, which you can look at your leisure, and then I will move on to the summary. As you know, as investors, what we're doing at QUADRISE is we're using advanced technologies and then increasingly, focus on sustainable biofuels to provide low carbon energy solutions for our customers. And hardly need saying about the scale of the market, the global imperative, all that is very familiar to to you. And what we and we are at the point now where we are getting ready to commercialize the offerings, which have been such a long time in the in in the making. I know that many of you have been involved much longer than I have as chairman.

2:26 And what we're here for today is to aside from explaining the update, is to explain why we're rating up to 3,300,000. 1.1 of that's already done through a placing, which has been announced, and then there'll be a third an open offer which you're eligible for as investors, which we'll explain today. And we hope that you'll feel encouraged to participate to the to the extent that you can. And so with that, Jason, I'm hand it over to you to take us through it, and I'll be back later. Sure. And, yeah, the next few slides really give an overview, I guess, of the technology and then more importantly, where we are terms of the projects. And then Andy will finish off in terms of, I guess, the the the placing in the open offer. So what we have is what QUADRISE have as a technology, which is unique to us, is basically, we're deploying proven technology that's used in the asphalt industry today to make road emulsions, which are a blend of bitumen and water, normally sprayed as a top coat on on roads. We are modifying those to produce stable emulsion fuels, which are essentially essentially

3:33 oil suspended in water, and we use the heavy ends of the barrel in the refinery, suspend that in water, produce a cheaper version of fuel oil called EMSAR. And then we we've then adapted that technology to then also incorporate renewable biofuels, such as incorporating the use of of glycerin to make essentially both the cheaper versions of the alternative. So they they offer a 10% saving. The systems are very simple to deploy in refineries or terminals, etcetera. And we also have an in situ blending solution now where, essentially, you can put a miniaturized version of the technology into a ship or next to a power station. And in terms of the the installations, they're modular in formats. They are installed typically in containers of about 40 to 20 foot in size.

4:27 You can see a picture of the of the inside of one of the units on the left hand side there. And the silver disc is actually the colloid mill, which mills up the the oil droplets into very small particles of five to 10 microns. The The systems are basically sort of drag and drop plug and play in terms of the refinery itself. So the system in the middle is the the unit we put the units we put together in SEPSA to produce a thousand tons a day of product. And that's similar to a setup as, you know, that we'll be obviously be using for for MSC and in Valkor. And then the the key thing is we then plug into existing infrastructure. So it's a relatively straightforward implementation. The cost of doing so is several orders of magnitude less less for the refinery. And similarly, in the for the end user, it's a it's a pretty much a drop in solution.

5:19 The systems or the fuel itself are water the fuel itself is water based. So if you take a a glass of water, drop the fuel inside, there's a nice video on our website that you're welcome to look at, which is unfortunately, it's a PDF, so you can't see this video. But what happens is the the oil naturally disperses in the water. You can handle it at much lower temperatures as well. So it means that the fuels are inherently safer to use than conventional oil based fuels. And importantly, in terms of the, you know, the legislation coming forward, they burn a lot better and more efficiently as well. So you get fewer emissions of things like nitrogen oxides, NOx, which performs a smog, particulates and black carbon, which obviously get inside the lungs or deposit on the Arctic Circle. But most importantly, in diesel engines, get a much higher efficiency, which leads to a reduction typically of five to 10% in in diesel engines.

6:12 And that's really fitting the landscape that we're in today. So, obviously, there's a lots of challenges for the energy sectors in which we're dealing, and we're involved in the marine sector. We're involved in the power sector, the industrial sectors. All of these different different markets are under a lot of pressure to start to decarbonize at different rates, obviously. And they all have their own features in terms of, you know, the environmental drivers are really driven by legislation to reduce greenhouse gas emissions. Also a lot of consumer pressure now for some of the customers we're dealing with. The consumers are forcing the the our clients to actually start think about reducing the greenhouse gas emissions. The cost of doing this is expensive for some of the options. Not only is energy more expensive as as we all know, but some of these clean alternatives are are really expense hugely expensive and require massive infrastructure, new infrastructure to actually be delivered, includes including renewable power for green fuels. So operationally, that requires also a lot of land to be to be utilized as well, which obviously availability is key. And then some of these drop in biofuels, you know, that are being used today in certain sectors like marine will be poached by other sectors that can pay more in terms of, you know, for the aviation sector and transportation sectors.

7:34 And it's very important whilst obviously delivering biofuel solutions to make sure you're you're not taking food off people's plates. So the focus today is looking at waste based solutions, which are, you know, potentially challenging to blend with oil. And that's really where our systems come into play. We offer a, you know, a very clean solution which reduces emissions, which, as I mentioned before. We have plans in place to essentially reduce the the oil or the hot the fossil fuel component of our product over time so that we have a a twenty thirty solution, which is completely net zero, and we're well on way well on the way to actually delivering that as well. As I mentioned before, energy cost is expensive. So 10% energy savings are is tangible.

8:20 There's an example coming up in terms of what that means for a a typical ship owner to provide you some some context there. But they're also very simple to deliver. So within six to twelve months, you can install the unit. They're scalable. So each of the units that you saw earlier, they produce about 350,000 tonnes a year. So you can produce a million tonnes a year with with three just three units. And And you you can can just just install out additional units as you require. They're also less hazardous to use. And also, in terms of the, you know, the the crew that's be that'll be using the fuel because it's a water based, inherently safer fuel that we're we're delivering, that they're a lot safer than conventional fuels as well and also some of the future fuel options, especially things like ammonia and methanol. In terms of the company, we've got a very strong team. Myself and others have been involved in emulsion fuels for many, many years, my case, since I left university, and also taking this all the way through to the commercial phase with previous endeavors in this field. So we have a lot of experience, not only at management level, but also at the board as well. A lot of senior executives, Michelle, on the board.

9:31 But importantly, we also have a very good IP platform. So we've developed we we have our own patents, not only for MSAAR, but for also for Bio EMSAR now coming through. And also some of our new solutions like Blend On Board is going through the the patent process at the moment. So our patents are jointly held in most cases with Neurion, who is our technology partner. They supply the additives that we use for the emulsification process. And Neurion were formerly part of Axanobel before they got taken over by Carlisle. So they were a very large entity that help our protect our IP. And internally within the company, we will we will buy into, you know, these cleanest sustainable options going forward. So we, you we're looking to deliver a net zero solution by 2030, but also appreciating that the transition solution is also needed. And MSAR and BioMSAR will cover that transition period in the next decade or so.

10:27 In terms of the advantages of the technology, it has to obviously be cheaper to make for the for the for the producer. So in this particular case, because the refinery would normally have to blend to make fuel, although they normally have to blend distillates with heavy residues by not using those distillates in the refinery and using the the residues on their own, then that increase that provides an increased margin in the refinery, which can then be shared with the end users so to produce a lower a lower cost fuel. So if that margin is split roughly fifty fifty between the producers and the consumers, in this case for a a typical 100,000 barrel a day refinery, then that's a tangible margin for the refinery. In this example, that would be essentially doubling their refinery margin from $2 a barrel up to $4 a barrel. So for the refinery, it's it's a worthwhile investment.

11:20 For this example, which is basically for four MMUs, four MSI units, that would cost typically less than less than $20,000,000, and it would pay itself back with a margin above in less than twelve months, as you can see. And similarly on the end user side, in this example, this quantum of of sort of fuel or replacement, which feed about 40 large container ships. So that's about 6% of the MSC fleet as an example. That dual fuel conversion would cost less than $20,000,000. And with savings of sort of 1 to 2,000,000 per year per container ship for 40 container ships, you can see that, again, the the cost of conversion is paid back in much less than much less than twelve months today. So not only is it an economic investment to do, but it also reduces the c o two emissions as well for the consumer, which is obviously of increasing importance now.

12:14 Obviously, that has to turn into into margins for us. And for this example, for four MMUs, obviously, there are, you know, considerable sales. We offer two business models, Licensing model, which we've just recently signed with with Valcor is one example. And then we also have a tolling model, which is essentially a build and operate type model where we're we're you know, we we capitalize the equipment. We'll supply it, and we'll then we'll operate it on behalf of the client and get a fixed and variable fee. So, obviously, the margin the the sales revenues and the margins are slightly higher for the tolling model to recover our cost of capital. And in terms of the projects that we're that we're working on, really, we're we're working in four different sectors to to make sure, obviously, we, you know, we can develop each of these in parallel.

13:02 With Valcor, we we have a a technology that that's going into a heavy oil site, the Asphalt Ridge in Utah, really to this is a, I guess, a a very large reserve of of of extra heavy oil, which is also very low in sulfur. Our client that's developing the the the fields there are using a very low carbon means of extraction, which means that the oil itself is essentially c o two neutral at the point as it comes out the ground. And then if you can get that direct to the market, it means that for for Valkor and the developers there, instead of having to get a WTI price for the for the crude oil, they can essentially access the fuel oil market with a low sulfur product and get a potentially a $20 per barrel uplift on the product. And not only that, but the the fuel itself is also the lowering carbon, the conventional low sulfur fuel. So we're pretty excited about that development. There is also some interim solutions in terms of applications there, more local to the actual field itself.

14:01 But, ultimately, getting the fuel out via LA or Houston to the marine sector is is the ultimate prize there. And that's also, obviously, where where MSC Containership Project comes in. You know, they are large consumers of fuel oil. They run now the largest container ship fleet in the world of over 750 vessels, I think, to date. It's getting bigger. They consume about 10,000,000 tonnes a year of fuel every year. So that's a considerable saving for them. If you think fuel oil is roughly $500 a tonne today, that's a if they can save 10%, that's a huge number for them. So with with MSC, obviously, we're looking as a as a marine replacement, not only of the conventional fuel oil they use today, but also biofuel. They're quite large users of biofuel as well. And our BioEmSol product is of particular interest to them.

14:52 In Morocco, we have industrial clients that's using fuel oil for for drying purposes. And that, you know, that drying application uses quite a quite a considerable amount of fuel oil in the order of about 250,000 tons a year. And we're we're currently in the middle of a trial there, and we can tell you a bit more about that. And then in The Americas, looking at diesel fired power stations, specifically around sort of Panama and Honduras where these diesel engines today are running on fuel oil. We're offering a a lower cost version of, obviously, fuel oil with EMSAR, but then the future opportunities to use bio EMSAR to decarbonize.

15:29 In terms of the status of these projects, with Valcor, we signed a site license agreement very recently and a heads of agreement with them for a sublicense in the future as well. That's conditional on them getting their permitting in in August, which will basically release their project finance. But on the basis of that, then essentially, we'll receive is a million dollars will flow from the the receipt of project finance to us. And then which we expect sort of after the permitting decisions made in August, we expect to get the the funds through in December sorry, September time. And then before the end of the year, once we deliver the equipment to sites, we get another $05,000,000. And then there's a continual payment thereafter under technology transfer agreement of $75,000 every quarter, plus a profit share. So for every barrel of oil we supply that comes through the MSOAR or bio MSOAR products, then essentially, we share in the uplift of any increased value that we might get from high value applications going to into the fuel oil application rather than it going to a oil or or asphalt application at the gate.

16:37 So it's a very exciting project for us. Obviously, they're they're Valkor involved in a number of different facilities there, but the first project with heavy sweet oil is is is a very interesting one. But there are other projects that that could develop on the back of that. Also linked, you know, with the the growth in these types of green projects in the in The US as a result of the inflation reduction act. It's a you know, there's there's a lot excitement of in The US at the moment in these types of green projects. In terms of MSC, where we are is that the MSC Leandra is has gone to dry dock. It's had a scrubber installed. They made some efficiency modifications, including a new bow. So they made some modifications to the vessel, and it's now ready for essentially ready for MSAR or Bio MSAR deployment.

17:28 And it's now coming it's basically on a route that's back in back in Europe and circling Europe and The US at the moment. So the the vessel's ready. We're in the process of finalizing the fuel supply agreements in terms of the supply of, obviously, the the glycerin of the fuel oil that we need to actually blend to make the fuel and also the the installation. And there's some questions, I think, associated with that coming up that we can answer that in a bit more detail. So we need to conclude those fuel supply agreements to be ready to start start supplying the vessel early in q in the first half of twenty twenty four. And the plan there is for the trial for the MNC LIANDRA has previously run on MSAR for quite a long period of time, but the because they've made the changes to the vessel. The plan is to do a a short put proof of concept on MSAR and then do a then a back to back trial with Bio MSAR because vessel's the never you know, the the BioEmSAR has never been used on a two stroke engine. All

18:25 the testing so far has been on a four stroke engine. So the the MSC, Leandro, will run briefly on BioEmSAR. Assuming all goes well, as we expect, then it will continue operating on BioEmSAR for the, you know, for the first half of next year with a view to getting four thousand hours of operation under its belt so that we can get a letter of no objection from Vartsa that, assuming all goes well. In Morocco, we're in literally mid trial at the moment. We got the the kiln that we were testing. You can see the picture on the right. We got that up to full load and, unfortunately, had a a very unexpected failure in one of the parts of kit on our on our units, which is the first time we've ever seen a failure, but it's due to a default sorry, faulty part that was installed on the unit. So we replaced that very quickly.

19:12 That's now the system's now ready to to run run again, and we're literally waiting to hear with the client as to when we'll be on-site, hopefully, this month. But we'll we'll obviously let shareholders know as to how that progresses, and we've got a meeting later this week to discuss that. And then in Americas, we signed an LOI with a client in Panama early this year with the intention of getting the trial agreement signed. In Panama at the moment, there's almost a state of emergency where they've had an extended dry period in Panama where they they would normally there's normally a wet period by now, and the hydro plants are starting to run again, which then reduces the load on the on the fuel oil plants. But at the moment, all the fuel oil units have been running pretty much on base load, which is unusual.

19:59 So we need a spare engine to do the trial, which is holding up the the signature of the trial agreement and getting started there. But that's expected to to change soon. I think they've they've had rainfall recently. So once that progresses, then we should see then get the the trial agreement signed off and and then then deploy our equipment to site. And the intention there is to initially do a a blend on-site sort of production of the fuel using the the fuel oil to justify the emissions and efficiency benefits with them with a view of commercial supply of more of a rigid based MSR going forward. And there are multiple clients there. But one of the clients that we're dealing with is also involved in a larger power station in Honduras as well.

20:45 And in terms of, you know, what in terms of the the resources we have to hand, at the end of last year, end of twenty twenty two, we had a cash basically, in our interims, we basically had cash at 2,600,000. We're spending about 240,000 a month, which excludes our project costs, which, if we don't spend anything on projects, takes us through to q four. And we, obviously, we expect revenue generation from the end of sort of q three, early q four, obviously, subject to the approval of the Velcor project moving ahead. And then, obviously, we have tax losses to offset against future profits as we progress. And in terms of the team, it's essentially the same as we discussed here in the interims.

21:31 We've got an excellent bunch of people working under us. Of us about three three of them are based in in Essex, and you see Bernard on the right hand side. He's based there with a couple of of chemists doing a great job in terms of the r and d work that we're doing. And then we've had additional support from consultants as well that we bring in. And we have experts from Alstom, for instance, who who look at burners. We and we have a couple of consultants who previously worked with us on the diesel engine application. So among others, we also have chemists that we we bring in who are sort of specialist PhD chemists in in surfactants and surface behavior.

22:11 I'll hand back to you, Andy. Yeah. Thanks very much, Jason. And just to make it a little bit interactive, I'm just seeing some of the questions that are coming up, and I'll just maybe address a couple of those before I get into this slide. So Ross asked, are there properties of ENSAR that are transferable to sustainable aviation fuel? Does the company have plans to emerge or participate, I guess, mean, Ross, in this in this market? And the short answer to that is, no. We're not gonna go into

22:42 aviation fuels. But I think the question is interesting because what we are doing is something quite parallel. We are very much in the market for sustainable marine fuels. And I think that's one of the things which we found has resonated with investors during the placing process, that they really do they're really keen for us to push harder and faster on the net zero products. So the answer to the direct question is no, we're not going to go into aviation, but we are very much into that area into the marine area. And then I'll also take on the next question from Mark. A recent poll on a well known forum showed that 70% of voters would not contribute to the open offer.

23:27 This suggests to me that the board's credibility has been totally shot. How do you see the board's credibility? Well, I'm not gonna comment on how we see the credibility. That's for others to to say. But I think I do think that this question is at the heart of it. I'm hoping that the people who are on this call are amongst the 30% who are very much considering that they would contribute or or in any event. But I think the the where we're at, and we try to be completely open and honest with people, both at the AGM and now, that we there's a huge potential in this business, and that potential hasn't gone away.

24:04 And we're balancing that all the time against the the ability to to deliver on those projects and promises that we're we're making. And that is the key that is the key thing. Now where we've got to now is that we believe that we can get the Morocco business done. We can get revenues from Valfrom. We can get the MSC trial underway with the money that we're now raising. That is what we're we're we're saying, and that is what I think will generate real value for the shareholders. And and and we're trying to we're trying to balance that. So the the

24:40 the interest in our sector is increasing. It's not reducing. It's getting up and faster, and people want us to do more. But each project's got lots of moving parts, and we have even though you can might say 240,000 a month is quite a bit of money, we have limited resources at the end of the day. And we are always in the business of putting our best foot forward. So we have to say, this is what we this is what we think it's gonna be, and we don't expose every single challenge that we face in that. There are a lot of moving parts in these projects as many of you understand. So but I do think, you know, what's the choice? The choice is press on and see the job through or give up. And I think, overwhelmingly, the the the situation is we should be we should be pressing on to to to see the job through. And so what we're doing, and going back to the slides now, that raising £3,300,000 in total, up to which is enough to see us through to profitability according to our own calculations. We've got £1,100,000 of that in the bank, should we say.

25:43 And we're now making an open offer of up to 2,200,000 to existing shareholders. And as I just said in my preamble there, we're answering the question. That will see us through to commencing the low no trial commercial revenue generation in Morocco and Utah. And so we very much encourage shareholders to take up their allocations within this. And if you are able to, to apply for the excess because we do believe we're on the cusp and that it's much better than the alternative of not doing this. As we move forward, what we're aiming for with the the with the current position, we've got the proven solutions in the energy market. In energy markets, the portfolio projects which Jason has been explaining to you and the IP behind that.

26:41 We've got a funding plan, and we're aiming to produce sustainable revenues, energy decarbonization solutions by a net zero solution by 2030, and that gives us a much broader value proposition. So we will be in a much better position, says Andy. And that's we strongly believe that that this this amount of money will will get us there and is much better, as I say, than the than the alternative. There's another question which I'll take now, which is kind of related. Bob says that much here that appears positive. I'm therefore surprised that given we are on or seem to

27:24 be on the cusp of good things that the support for the open offer for most closest events are frankly underwhelming, with the exception of Andy in the placing why the team member is not making meaningful investments at this time. And I think well, yeah, thanks for commenting on my my contribution, and I I hope it's mean, my intention is that it won't be the last contribution that that I would make over time. But I think there's no reason to question the dedication of the team members here. I think a lot of the people have put money in

27:55 at much higher prices than I've been putting it in in the past. A lot of people are putting a lot of hours into this business. And, you know, as Jason said for himself earlier on for it, for example, he's been involved in the Martian Fuels business since he left university. So you don't really get much more dedication than that. Everyone has their own financial circumstances, and, you know, there's only so much one can question that I think we probably what we shouldn't question is the commitment of the team to see this job through as we want. There are a couple of questions pre issued or advised and also on the chat forum, which relate to individual salary commentary and so on. And I don't think we will be answering those, but there is we do look at all those the compensation committee is very active in in in assessing what should and shouldn't be done

28:51 with on basis of the performance that we see in front of us. So we won't be answering individual questions on that, but that is something which we're much focused on.

29:07 So here we are then with the summary. Our our energy decarbonization strategy is the external environment is very much moving in our direction. We know as our shareholders do that we're well positioned to

29:26 serve these. You can see the projects that we've got. We are focused very much on those projects, and we'll come on to some questions later on around, are we doing this, are we doing that? And actually, answer to most of that is no. We're focusing on the projects,

29:41 And we'll, you know, we'll we'll answer some of those questions more specifically because what we're trying to do is to get these use cases or these projects over the line so that we can then attract serious partners to scale them up. That's what we want to do. We want to be we want to get to a point where we've created real value, and then we can scale from from there. And that's what we're seeking your help for as investors at this point.

30:07 Okay. Let me hand back now, Jason. I don't know you have any further any final points before we go into the q and a?

30:15 No. I do think you covered it very well. I mean, just coming back to, I guess, participation in in in the in the the open offer. In my particular case, that's that's all I have to put to put in. I haven't got any investments anywhere else. That's literally that's all my savings going in due to my own personal circumstances. So, yeah, if I had more to put in, I would do. Unfortunately, I don't. That's fantastic. Andy, Jason, thank you very much indeed for the presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab just situated in the right hand corner of your screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you, recording the presentation along with a copy of the slides and the published Q and A can be accessed via investor dashboard. As you can see, we've obviously received a number of questions throughout today's presentation and pre submitted, as you said, Andy. If I may, could I just hand over to you just to read out the question where appropriate to do so and either take the question or I'll pass it over to Jason, and I'll pick up from you guys at the end.

31:08 Yes. Thanks very much, Paul. So we'll start on some of the pre asked questions, and we'll do a bit of mix and match here perhaps. But first question number one, it always feels as though QUADRISE is going to turn the corner, but yet another placing and no real business coming in. Different now for us to ever think this company will make money?

31:32 Yeah. Guess in terms of hopefully, we covered that in the presentation, but the combination of making tangible progress across the key projects and an increasingly supportive sort of macro environment as well, including the legislation that's coming in in the shipping industry, the marine industry is putting us in a much stronger position today. So we're expecting the Utah project to deliver revenue from q four this year. And I think there's some questions around where the status of that, so we can cover that specifically maybe in another question. But also then the more recent legislation coming in Europe and also the legislation that's being moved by the IMO, which is increasing the rate of decarbonization in the marine sector, definitely help the delivery of our lower carbon, lower emitting fuels, basically, for the marine sector, especially.

32:26 There's a few questions around the supply of fuel for MSC. Question two, for example, are MSC involved in involved in finding a fuel supplier? So provide please provide any details that you can. Yeah. And and so MSC have been very supportive in in introducing us to their current bunker fuel suppliers, obviously supplying very large commercial volumes of fuel to them to the tune of 10,000,000 tonnes into their requirements annually. And obviously, M and C are promoting their collaboration with us as well as getting some of the shareholders picked up in the recent sustainability report in 2022. So, yeah, MSC are providing all the support they they can. The reality is to put together a trial requires a different approach to potentially to commercial supply because, essentially, what we're doing is we're supplying the MSC Leandra with fuel on an intermittent basis. Right? So every it would be every month to once a month, every sort of four weeks to six weeks depending on the route that that the the vessel's vessel's ultimately on. So that's to to do the trial requires a different approach to potentially doing commercial supply in the future.

33:36 So, you know, we've we've had to be very creative in terms of bringing in other parties into that arrangement as well to try and get this delivery of the the trial volumes underway in the shortest period of time.

33:54 Okay. And let's try and continue on the MST theme for a minute. Take Jake's question from the q and a. How many ships are being targeted for any initial rollout of MST?

34:06 And then how many ultimately do you run on the MSAL or bio MSAL? Yeah. So in terms of the number of ships that are obviously being targeted initially, we have the MSC Leandra, which is a trial vessel. And then potentially another vessel will come into play during the first half of next year, but that's yet to be scheduled for that other vessel. So with the MSC Leandro, the advantage of that ship is that it's previously run on emulsion fuel and has a booster unit already installed. Any new vessel require a booster unit required, which needs to be ordered and and delivered to the vessel. And that that order is yet to be placed, but that takes typically three to six months to get that vessel up up to speed and running on the on on MSR after that. So the initial focus is on the Leandra to get that up and running and and getting supply systems in place there.

34:53 And then in terms of the ultimate scope for the MSC fleet, that's in excess of 25% of their fleet today. They've got electronic engines, and and they're obviously buying vessels all the time.

35:04 But, yeah, initially, 25% is the is the ultimate goal of the MSC fleet. And they also obviously then have the cruise ships as well, which doesn't we don't include those at the moment. Okay. Thanks. Mark asked specifically about the hazop test. I don't know the answer to myself, but maybe you you do, Jason. The the will has it taken place? Will you pay for can you just update Mark on that? Yeah. Absolutely. The so the hazop is done independently of of the vessel. So that's basically a paper exercise. So it doesn't need the vessel to be in a particular position to actually do the hazop. So it can it can be done essentially remotely. So we expect that to be done done sort of early this this quarter. But, you know, once we've completed it, we'll let we'll let shareholders know. But it's essentially a paper exercise involving Lloyd's register, MSC, the the OEM, which is Vartsiver, and ourselves to get that done. The similar process to we did before with with them. So and, obviously, the vessel was going through the modifications and changes until quite recently. So that delayed the exercise being completed, but we expect that to happen very soon.

36:14 Okay. I'm gonna go back to the pre pre asked one, the question five, which is also on MSC, but it also addresses Mark's further question about the MSC trial. So question five is, as per the placing an open offer RMS on July 7, the MSC proof of concept loan is now set to start in half one twenty twenty four. It was quarter four twenty twenty three in the mid May business update RNS. I would like to understand better what circumstances caused this additional delay of six months. The original window for the trial provided was quarter four twenty twenty one. Also, what is your confidence that you'll actually be able to meet the revised time line at times? Okay. Yeah. Good question. Well, the the key thing is really now is is a fuel supply. Okay? So the reason for the delay is we don't expect it to be six months. We expect it to be we expect to be supplying the early part of q sort of q one.

37:08 Sort of twenty twenty twenty four is is the current plan, but, obviously, we have to prepare for particular delays if there are any. But the the current plan is to supply the the vessel during the first half of the year as you saw in the presentation. And the early part of 2024 is the, you know, is a scheduled window. Obviously, to do that, we need to secure the supply of, you know, the glycerin, which we've done now. We've got a you know, we have a we have a supplier of glycerin able to supply not only trial volumes, but isn't interested in commercial volumes going forward. And then the complication is really around pulling together the suppliers of the glycerin and the fuel oil and then finding a particular location with the permitting that's already there to actually be able to blend biofuels and then deliver those biofuels to the vessel.

37:56 Those biofuels, if you look at marine biofuels today, if you can supply those from The Netherlands, then you also get credits, HPE credits, they're called, which basically subsidizes the use of biofuels in the marine industry. So, obviously, we need to qualify for that as well. So all these things need to be pulled together. It's you know, I don't wanna sound patronizing, but there's a lot lot to pull together to actually get these trials done. But we you I was actually at the terminal this week. So we're looking at you know, we've looked at a number of terminals, and we we're coming now to sort of narrowing down exactly where we want to be and pulling together all the agreements that need to be need to be done to get get the the trial volumes delivered to the vessel in the first half of next year, early sort of early h one.

38:44 Jason. I think you probably answered most of the following question, but let me just ask that one anyway and see if you got any further comments on it. I've reviewed all RNSs over the last year, and there appears to have been no substantial progress in negotiations with low no fuel suppliers. What's the specific area of contention?

39:00 And how much longer is it going to take? Yes. I mean, again, a very good question. I can imagine the frustration of shareholders. Mean, basically, the main areas we've working on over that period have been the commercial partners for glycerin, all of which have their own glycerin supply. So we've had to test a lot of samples as well to demonstrate that their glycerin deravent is working properly in our particular mixture. So that's involved, obviously, QRF and feedback there. But those commercial partner discussions are pretty much complete now. And then the next bit is then selection of bunker partners and specifically, particularly terminals availability. Where can you do this and where are their licensed premises to do this biofuel blending? Because it's it's at the in the marine sector, it's at its relevant infancy.

39:48 So that actually the number of terminals doing this is more limited than there will be in the future. Obviously, that that's taken a bit of time to to find those out and work together with, you know, the biofuel depart the biofuel partners who've been very supportive in basically bringing these, you know, these terminals into into the discussions. So, obviously, these these things are slightly more complicated than first believed, but we're now coming to a point where we have very detailed plans being put together to actually implement the delivery, obviously, of the best to the fuel and delivery of the fuel to vessel in the beginning of the next year. But the first then the next milestone in terms of shareholders for shareholders is the signature of the agreements for the trial supply, and that's our immediate focus as a matter of priority now.

40:36 Yeah. Thanks. And I'm going to move on to question eight. I have a question regarding the following paragraph in the July 7 placing RNN. You can read as MSC starts to doubt using MSC concerns about supply question mark for their fleet hence the route to commercialization with MSC is taking longer than originally envisioned by QUADRISE. Basically, to paraphrase the question a little bit, it's saying it's asking about the motivation of MSC as we see it. Are you able to comment on that, Jason? Well, I think I think the the support from MSC is fairly evident for the fact that they purchased the MSC Leandra as an example. They obviously and they spent money on upgrading it and getting it ready for the the m for the trial and the trial.

41:21 And really, yeah, their their focus is on making sure that vessel can run on both both products. Obviously, it's run on before. So that we have a short test there given they made modifications to the vessel. And they've also deployed that to Europe, right, in readiness for the trial. So in terms of their commitment, I think MSC are doing all that they can, obviously, and the collaboration is evident through their sustainability report as well. Really, onus is on QUADRISE to make sure that we bring in some sizable partners in terms of the delivery of fuels for the future for them. Okay. Thanks. We may very well come back to MSC because it's such an obviously such a key part of the business in the future. But I'm just going to move to question 12, which is a kind of a leading question. If we're struggling to get a fuel supply agreement for MSC, are we going to supply the Morocco client at a competitive price on the back of a commercial agreement?

42:17 Yeah. I mean, in terms of the requirements, they're they're sort of quite different. So for MSC, we're looking at essentially the first priority is the trial supply for the trial volumes. So, obviously, we're focused on that at the moment. And with MSC, predominantly, it's going to be BioEmSAR. So it involves different parties. And also in terms of the location, we're talking about Northwest Europe, ideally, to take advantage of the tax credits in in The Netherlands for the biofuel. So the delivery for the Morocco client is is quite different, and that's obviously a residue based MSA, of which, obviously, we have potential suppliers that we've used before or spoken to before for for supply of MSAL for the MERS project. And on the back of completing the MERS sorry, the Morocco trial successfully, then we expect to obviously progress to commercial discussions and have a commercial agreement in place for supply, which will greatly assist the discussions with those particular refiners.

43:13 But having said that, those refiners will also be interested in the future for bio MSR as well because a lot of these refineries are converting to biorefineries expecting to supply biofuels from their from their locations as well. So the the rise of bioemcel will definitely help, but the discussions are quite different and being held separately from from MSC. Okay. And just to move over the Atlantic for to answer to ask another question. What number 13. What exactly is holding up the agreement to progress in the America Power Company project? Do we have a dead duck here similar to the Esmeraldas refinery project? No. The really, the the delay of the agreement is really due to the the situation in Panama at the moment where the the fuel oil power stations are running flat out of baseload, and they don't have any scope or availability to take an engine out of service and actually run it for a trial.

44:09 So before they, obviously once they resolve that situation in in Panama, which they expect to do imminently, then we expect the trial agreement to be signed. Right. Thanks. And And then there are there's a series of pre asked questions around effects of the other projects. And that's for example, where exactly are we with the Mexico project, about Saudi Arabia, about synergies with the Carlyle Group, about Kuwait, Berlin Energy, JGC, for example. Are you what are going to say, Jason, about the these other projects? I mean, the other projects, we we we are progressing as a sort of as a lower priority. I would say that, you know, our experience with The Middle East is that, you know, ideally, what we need to do is get MSC or one of the other projects up and running before we we spend a lot of effort again in those particular regions. If if shareholders remember, really, you know, the Saudi project was due to commence after the Maersk project. And then as a result of Maersk delaying their implementation of of MSO indefinitely, then the Saudis basically part the trial that we had planned. So I think evidence of progress in some of these other areas in terms of the core projects is really our main focus. And once we demonstrate that and we have actually fuel flowing and something for them, for the Middle Eastern clients and others to see, then that will accelerate potentially the the implementation or the recent discussions in those other areas of which, you know, we can really much

45:40 pick pick up on the work we did previously because it's the energy situation hasn't changed remarkably since we we talked with them a few years back. So, yeah, these other discussions are are ongoing. But as a lower priority, really, you know, we're a small team, and we have to be very focused on delivery of the core projects now to get revenues into the company as we expect to get from Velcro. Thanks. And I I appreciate to ask this one before that, but to go back to Morocco for second, question 20, when exactly is the next slot for the Morocco test? So we we actually have people on-site next week making sure that we're we're ready to go, you know, at any of the at the sort of the earliest opportunity. The the reality is in Morocco, the the site that we're doing the trial basically produces products to order.

46:27 That's got a very large capacity there, but it essentially runs on a campaign basis. And that's really we only know when we'll we'll actually be carrying out the trial one or two weeks in advance. So, you know, we have a we have to make sure that we're ready. So we have, you know, people going out to site as an example next week. But, yeah, we expect to expect it to be imminent, but we can't say exactly when at this moment in time. But I what I would say is, you know, in terms of the, you know, the the client, the Moroccan client and the people on the particular site that we're operating at, they're extremely supportive in making sure that this this trial is success because they see that as a as a real sort of fillet for them as well. And, you know, and they've they've run tests before with this particular facility. So they're they're very well geared up and very supportive of these types of endeavors that we're we're embarking on now.

47:17 Okay. And what about what about going back to the questions on the q and a just for a second. Vic asked a question about how genuinely confident are you of drilling license for Utah would be granted considering the possible legal challenges from Hoodoo? Yeah. So I guess to explain to others who who may not be aware, there was a challenge to the the approval of the license the drilling licenses and the underground ejection permits to Valcor from a company called Hoodoo. Hoodoo have an existing license on some of the same territory for conventional oil and gas. So some of the objections were around the validity of of that. The latest is that, obviously, who do have been allowed to continue participation in in the hearings, but the reality is that the permit the the decision made in December 22 granting the drilling licenses to Valkor has been upheld.

48:13 They still require underground injection permits, which they expect to get through in August. But But feedback we have from Valcor is essentially that the objections from Hudu have been thrown out now. They can participate in the hearings, but they can only comment on technicalities of any submission by Valcor. In terms of the the fundamental basis behind the Valkor business is is looking at nonconventional oil in that particular area, and the area is called the asphalt ridge, essentially. So it is a it's full of nonconventional oil, and there's conventional oil and gas, which is, I think, what what who you're trying to get as well take advantage from. But in terms of the definition of nonconventional oil, in terms of all of the samples that have been taken from the fields that Valkor plant and heavy sweet oil and others plan to extract, It's definitely nonconventional oil. All the samples we've seen are definitely bitumen.

49:08 And that's really underwrites the decision that's already been made and will continue to be made by the Utah Department of Oil and Gas and Mines. And and, really, you know, there's a lot of economic incentives for that particular region to develop these projects because there's very little being done on the conventional side anyway because it's you know, there's there's very little there. So, yeah, we're very confident of a lot of the you but know, that comes from feedback from Valcor that the decisions will be granted in August. And, obviously, then that will progress to the the drilling being drilling commencing and and funds flowing, obviously, to then to us as well. Yes. We're starting to need to look at the clock a little bit here. We've got time for some more questions. But I'm going to just take maybe take one sort of future looking question here, question 21.

49:55 Are the Tornow relationship is a new technology sorry, when when is the crude sugar or bioemstar going for further testing? Yes. So the crude sugar oil comes from obviously, it's extracted from sustainable biomass, so from woodchip. One of the projects we're working on is with with with Vittorro who have a, basically, a c five, c six type prod product, which looks, for all intents and purposes, like honey. Actually smells a bit like honey as well when you're testing it. But, essentially, where we are with that is we've done the the aquafuel testing already with up to 20% of the CSO product in in BioEmSAR and, obviously, the remainder being glycerin. But now we're pushing that up to 40% of CSO only. So, basically, you know, with with zero glycerin in to see if that works as well.

50:45 It's the testing in the lab is going well. It looks like it is performing well. So the the next plan is to run that fuel on the diesel engine that we own in that's installed actually currently in Aqua Fuel. And then assuming that goes well, then the plan after that is to do a larger scale testing at VTT in Finland on on a Vartsila engine, which is a basically a thirty two four four stroke engine. And that's very that was very, very useful then to do present the data to to MSC and Vartsila to demonstrate that, you know, the performance of the fuel was quite similar to their experience with MSO before. So that that's the next steps. We expect during q three to get the active fuel testing done and published. Q four, we should be able to embark on the VTT testing if all goes well, then with a view potentially to incorporating some of the CSO product maybe at a later stage in 2024.

51:39 And there's some other work going on beyond if there's not a question on it, there's some other work going on beyond that, both with the existing, you know, c five, c six suppliers, but also with Pyrolysis oil suppliers as well. And we've just signed an agreement with BTG Bioliquids on their wood based Pyrolysis oil, of which they have three plants producing 75,000 tonnes a year of this type of product and looking for a, you know, higher value market in the marine sector to to find a home for it. So we have a means of blending these types of products into into a marine biofuel going forward, which is obviously, you know, an advantage of our technology platform, which is unique to us. Okay. Thanks. I guess there's a couple of questions that I'm gonna ask from the pre answer. I've answered myself. 24, where are we with the strategy to partner up with a bunker supplier? This has gone quiet and seems to me like a very sensible plan that may have passed us by. And the next question, given the serious lack of progress, has there any further thought being given to selling the technology onto a larger entity? And I think, absolutely, we see the potential benefits of strategic partners to accelerate the growth and address the whole scale of the opportunity. This is all QUADRISE. It's not gonna decarbonize shipping on its own, for example, of that sector.

52:55 And, you know, we we will be exploring that more more actively. What what in a sense, what's holding us back is we we we want to get to the the point where we've got something truly of value. That's why we're so keen to get these use cases done and dusted so that then we've got something which will give better value for shareholders when we come to trying to do those kinds of deals. So we don't necessarily want to we don't want to sell the technology in a sense, but we're willing to do deals to make sure that we can scale it. And so that's that's it's very much on our minds, and we we, like everyone else, we're really keen to to get the use cases done, and that's what we're really raising this money for. And we're very much aware. I mean, there's a whole thread of question around, you know, you've had this money before and you didn't do it last time kind of thing. We're very much aware of that.

53:46 And, you know, we we we're not immune from further delays. We could have them, but we're confident where we stand that we will be into revenues and that we will come Morocco, Utah and we'll be into the trial with MSC. We're confident we can be on that. And as I said before, the alternative of not being confident and just giving up is not attractive either. So I'm just going to try and move back to questions of the day. There are lots of them. It's hard to answer some of these in a in a few sort of pity words. So Vic says, Andy, you say we are on the cusp, as we have been for the last two placings. What makes this cusp different? I think what's different is that we have a little bit more control over our own destiny on this in the sense that, for example, that with Morocco, we've got a the trial is now happening.

54:52 We just sort finish it, and then we can talk about the supply. With MSC, it's up to us to come up with the supply. So I think that a lot of the moving parts have been nailed down. And I think that's what makes it different or makes it feel different at this point in time and makes it worthwhile seeing this job through. So that's where I see it as different. So and Alastair asked the question, what was the thinking behind raising money in advance of the conclusion of the Morocco trial, which is imminent and successful, presumably have resulted in cash being raised at a materially higher share price. And I think that's the rub is there is in the conditionality of the question.

55:44 As we've explained, as Jason explained, we had enough money to last till the beginning of the fourth quarter. So yes, we could have waited until September, October to try to do a fundraise. But we considered whether that was in the best interest, and we felt taking it to the wire was not in the best interest. And some of the very professional investors that we talked to in the placing process, they said, Andy and Jason, you're doing the right thing. You needed to do that now. We think that the market conditions are horrible now, but they could get worse. They don't necessarily get better. And I think this is the time to shore that that up. David says it's our money that's going to fund salary, so why can't you comment? And all I would say and it's it's fair challenge.

56:34 And, again, it's hard to make, you know, things make it clear in a few words. We, of course, you know, we will report on salaries. But what I was saying was we're not going to comment on individual salaries during the course of this this this So but we will you know, we look at the the compensation committee is already talking to me about, you know, what are the parameters for the so what we what we achieved, what we not achieved, and that will all be reflected. It's it's a different conversation when you're talking about executive directors than it is if you talk about other staff. When you're talking about other staff, the the question then is a little bit it's it's more specifically around retention comes into it in in more of a way because people have other other opportunities.

57:25 So if you give junior staff a hair shirt, then there's a risk that they'll they'll they'll move on. So we are very much on the case of that. No money is spent that we don't need to spend. There's a question from Paul g, Andy. Just why has all mentioned of using standard MSA with MSC suddenly gone dead? It certainly hasn't gone dead, Paul. That's that's not the case. Obviously, the intention of doing the the MSAL proof of concept is to repeat the work that we did before on the when it's the same vessel was previously the Istanbul. So, you know, depending on the results of of that, then, you know, we expect to see, you know, the validity of the interim loan that we got on that engine, same engine, to be valid too, which may accelerate the use of going forward as well. And certainly, terms of if you speak to their traders, they're using or you look at their sustainability report, their predominant use today is a fuel oil.

58:23 So if they can find a cheaper version of fuel oil, which is lowering carbon as well and carbon intensity, then that's that provides a very interesting option for them going forward. But for the trial and getting the trial done and getting the agreement signed, that's what's all around the bio MSOAR supply because that's the bulk of the fuel initially. But for the future, in terms of their demand, MSAL is definitely much in scope. Andy, I was just gonna just step in there very quickly. We are coming up to the hour mark, and I know you have covered off a lot of questions that we've come through today. And, of course, you will have the ability to review all those questions submitted, and we can publish responses and answers where appropriate to do so on the Investor Meet company platform. So Jason, if I may, just before redirect investors to provide you with their feedback, just ask you for a few closing comments.

59:11 Yeah. Absolutely. Thank you, Paul. Yeah. I mean, obviously, investors have been very patient with us so far. And really now, as as much as at any time, it's all about delivery of projects. And or certainly, we're you know, delivery of the Valkor project is extremely important to us and the early revenues from that. Obviously, that's key to the planning going forward. But most importantly, you know, in terms of the funds that we're, you know, looking to raise, they're they're extremely important to for us to be able to contract with the third parties needed to, you know, to carry on the the MSC trial and and other activities. So, obviously, the we have the the the placing is is now done, but the open offer funds for us is extremely important to make sure that we can deliver on, you know, deliver on getting these projects to the final phase of commercialization.

1:00:00 So, yeah, thank you investors for your patience, but I appreciate that, you know, it's it's wearing thin, but we are fully committed to getting this done. That's fantastic. Jason, Andy, thanks indeed for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback, nor the team can better understand your views and expectations. Will only take a few moments to complete, and they're greatly valued by the company. On behalf of the management team, QUADRISE PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.