Quadrise (LSE:QED) — Update Meeting

0:02 Good afternoon, ladies and gentlemen, and welcome to the QUADRISE PLC Update Meeting Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Simply type in your question and press send. And due to the number of attendees we have on the meeting today, please appreciate the company may not be able to answer every question received during the meeting itself.

0:28 The company will review, of course, all questions submitted and published responses where it's appropriate to do so. These will be available via your investor me company dashboard, and you'll be notified when these are ready for your review. I'd also like to remind you this presentation is being recorded.

0:46 Mr. Koch, Chairman and QUADRISE PLC. Please afternoon, Paul. Thank you very much. Can I just say welcome to everyone? It's it's a real pleasure to be able to present to you today. What we're trying to do today is actually give you exactly the same presentation that Jason and I gave to institutional investors the week before last. In total, we gave about 30 presentations. Each one of them we've done in under the hour, so we probably are gonna be sticking to an hour today. But as I hope you'll have seen from our previous use of investment company, we do provide absolutely comprehensive answers to questions that we don't get the chance to reflect on during the course of the actual live webinar itself. And the only difference between the presentation today and the one that we gave to institutions is we are assuming that most of you are pretty familiar with us as a company, so we're not going to go through the animated video.

1:42 And, obviously, some of the information relating to the funding is now in the past tense as we've successfully raised the £6,000,000 through the placing. But we are absolutely delighted to be able to talk to you today. We'll also give you a bit of feedback as to where we found that sort of real resonance with institutional investors as we went through things. But we'll go through this as quickly as we can, then get to the position of being able to answer your questions. We've already had a load of those resubmitted to us, but we'll also expect to get quite a few as we're going through the course of this. So just very briefly, just a bit of background about us as a business, how we're solving a heavy oil problem, and importantly, we're solving that now, how we're gonna enable a cleaner energy transition, and how our global activities and our unique business model enables us to very rapidly deploy once we've actually successfully concluded trials, and how we're gonna use that funding to actually deliver value to you, our shareholders.

2:46 The main issue surrounding heavy oil is oversupply, and this has actually been exacerbated by the impact of two things. One, the pandemic and the reduction in overall demand, but two, those IMO regulations that came in just over sort of fourteen months ago now, which gave a significant shift from heavy fuel oil to, lower sulfur marine gas oil. You've then got the issue that for producers of heavy fuel oil, it's actually uneconomic. It costs them money to do it effectively. They're selling a product at less than crude. So it gives them an opportunity to really improve their profitability. And secondly, once they've actually produced this oil that they've then had to sell at a loss, it's not a great fuel, actually. It's quite difficult to burn. It gives lots of problems in terms of, combustion products, and it's quite difficult to handle. You still need to store it and use it at elevated temperatures.

3:45 And what our solution does is get rid of all of those issues, and we're talking here about MSAR in particular. What it does, it enables through the use of water instead of those expensive distillates that oversupply to be reduced. It also enables very effectively and quickly an effective upgrading program for that refinery so that they're getting more value out of each barrel of oil that they produce because they can actually sell all of those distillates as premium fuels and don't have to use a substantial proportion of them to actually dilute down the residues to sell the HFO. And the unique way in which it's manufactured manufactured with with the the preatomization means you actually create a fuel that is much more like a gas. So it burns much more cleanly and gives significant reductions in a number of important emission areas.

4:40 Now we're go through the, presentation in terms of the animated video. For those who are not familiar with us, it is available on our website, and I absolutely recommend that you go and have a look at that. And this is an area that we are really excited about, and, actually, I think it's an area that our new investors are really excited about, and that's BioEnsar. So we launched this at the back end of last year. It's got patent pending technology, which is enabling us to blend in glycerin with water and the additive package to create a renewable biofuel, bioemstar. And why is this important? Well, we think it's important for a number of reasons. One is it significantly reduces c o two. So we can actually get a product that is equivalent to a consumer switching from heavy fuel oil to LNG or gas, but without any of the huge costs involved in changing over to those infrastructures.

5:36 So we really do think this is a game changer, not just for us as a business, but for industry as well.

5:46 We're a small business, but we've actually got, we think, a great leadership team. We've got the relevant experience in all the areas that are important to us. And we'll come on to this when we've seen a couple of the questions about how we scale this business up. I think one of the areas that we'll we'll come on and tell you about in response to q and a is that whilst we've got a very strong team, the way that our business operates means it is very scalable through using external resources, and we've already very successfully done that in a number of areas. We've got compelling IP, and that's not just in relation to MSAR. Now it's BioMSAR. That has also been jointly patent pending protected through our relationship with Nurion. That relationship with Nurion has continued to grow and strengthen, and they will stand behind us in terms of any patient infringement.

6:39 But importantly, they also stand behind us in being a world class supplier to enable us to move from our existing trials and tests through to commercial supply and giving our clients the comfort that they know they've got behind us a world class supplier of the important additive packages. Then just before I hand over to, Jason, I just wanted to really, outline one further area, and that's clearly ESG has been of huge importance in the marketplace overall. And, again, this was something that we feel resonated really strongly. I'm not gonna talk about the s and g here. I think we've we've put our case very strongly on that. And I'm just gonna leave a bit of a teaser here because Jason's gonna tell you more about this.

7:25 But we think with both MSAR and BioMSAR, we've got some two real winning products out here. We've got one which currently will enable any user to make sure that they are using fossil fuels in the absolutely most effective and efficient way, minimizing, any emissions. And in the term in the case of a heavy oil upgrade for a refinery, it is absolutely the cheapest, the quickest, and the most at c o two and energy efficient way of doing that upgrading. But with BioEmSAR, we take that a real step further with the aim of being able to not just significantly reduce to around 20 to 30% c o two emissions, but actually progressing that to be a carbon neutral fuel over time.

8:16 I think with that, I'm gonna hand over now to Jason to take you through the rest of the presentation. I'll come back towards the end, and then we'll be delighted to move through to q and a. Thank you, Mike. So this slide just presents a typical example of a project as we would perceive it. The scale of this project is the equivalent to supplying a 400 megawatt boiler with MSR or supplying about 21 large container ships, which is equivalent to about 12,000 barrels a day of fuel oil demand. Obviously, for producers, bottom left box, it's important that they make money. And as Mike mentioned before, the producers are typically oil refineries or heavy oil producers in certain cases where they're saving money on distillates. So that's really where the value of MSAR is created.

9:09 But the idea is that that value is split equally between the the two parties, the producers and the consumers. So from the producer side, obviously, there's a there's a margin that they make in terms of the uplift depending on how heavy the oil is. That gives you a range of of benefits there. And it's important important in terms of, you know, the underpinning of our business is that the the benefits very quickly pay off for the capital costs. The nature of MSAR and MSAR retrofits are that they're very they're relatively simple to do. We're utilizing we design a fuel. We make a fuel that's essentially very stable. So it means that the existing fuel oil infrastructure can be utilized. And as such, then the capital cost is really limited to the MSAR blending equipment and times.

9:55 And then, essentially, everything else is is is already there. So the payback is very quick for the investment that's made. But also importantly, in a very, obviously, in a changing world at the moment, certainly during the last twelve months, it's important to be able to deploy the technology very quickly as well. A lot of long term decisions, you know, are very hard to justify, especially in the downstream space. So, you know, where we are is that we've got a very very quick and easy means of refineries making money. And also for the end consumer, for for them, it's a cheaper energy source. The green box at the top is extremely important because, you know, environmental pressures on all companies now are exceeding exceedingly becoming very, very high. And that's really accelerated, I guess, interest in MSO and BioMSO going forward, as Mike mentioned.

10:44 I mean, it's important though that to stress that, you know, we see our business as very profitable. The business models that we are focusing on at the moment are on the licensing and tolling basis, where essentially a project of of of this scale for us is a game changer. Those shareholders that that that that finances will know that, you know, our our annual costs are around sort of £3,000,000 a year. So, you know, one such project that that makes us cash generative very, very quickly. So, you know, this is the focus of of the fundraisers really to deliver deliver one or more of the projects that we're working on at the moment. So in terms of how we access the market, you know, we use a range of different agents and and companies ranging from sort of single individuals such as UNES, Mamar, and Morocco through to fairly large entities such as JGC in Japan and FreePoint Commodities in The Americas,

11:43 fairly large entities themselves. So we also deal directly as well with various different companies. So we have a range of approaches to really access the global market that we address. And that's been extremely important, during, obviously, the last year when it's been difficult to get on plan. Focusing on the the three main projects in this slide are really this this slide is designed to sort of give you a summary of what we're doing and to some extent an explanation of of how these projects are interlinked. So Greenfield Energy top left is a project which is an upstream application for MSR where you've got a very heavy oil which is actually sweet.

12:28 So it meets the IMO regulations for 0.5 sulfur. So potentially it can be utilized as a marine fuel. So initially the application for MSAR is to look at the conventional MSAR supply to enable a low sulfur MSAR for either marine or power applications. But in the future, we also see, you know, there's a there's an opportunity for bio mSATA production as well in Utah. Coming to the bottom of of the map, we've also we work doing the projects in Morocco with a very large international mining chemicals group. The the largest consumer of fuel are actually in Morocco where they utilize the the fuel for drying and cal signing operations.

13:14 And then we have the recently announced deal with MSC container shipping where they are looking to deploy MSO and in the future also buy MSO

13:26 as a means to sort of reduce their their energy costs and improve their environmental performance as well. So three main projects that we're focusing on. Each of these require potentially well, certainly two of them require production. So potentially, we need a refinery, sign a refinery deal in the Mediterranean in the near future to supply both MSC and Morocco. But then if then to to really service the marine market, then you're looking at the larger hubs in Ara, such as Amsterdam, Rotterdam, and Antwerp, or in Singapore as well. And then those the nature of those opportunities are that, you know, they you know, that give provides a commercial flow of of of MSR and and bio MSR into the marketplace.

14:20 And in in addition additionally, it sort of serves to

14:25 cement the, you know, the commercial rollout of of MSR for the larger players, the national oil companies in both, you know, in both both Saudi Arabia and The Americas, in Ecuador, and Mexico as well where there's very large applications for MSR in the power generation sector, albeit they're they're fairly at least the nature of these types of opportunities in those regions are that they tend to be followers rather than leaders. So we're working on a number of, obviously, projects in parallel, but focusing really on the on the on the main top three in the map to really use as a a springboard for the other activities, which we've already done a lot of groundwork in already, which some of you shareholders already know.

15:07 So focusing in a bit more detail in terms of the road map for each of these top three projects as well as BioEmstar. So with with Morocco, essentially, we are is we we carried out a pilot trial in October last year, my last business trip, sadly. Although I'll review so I look on it fondly now and wish I can get back get back there very soon. But we carried out a pilot trial which was successfully completed in October. And that really then essentially opened up the opportunity to do an industrial trial in one of their one of their satellite facilities. It's a facility where you can see the picture bottom right of the slide where you can see a very large kiln which is used for production in one their products. They've got seven of these kilns in there, particularly this facility.

15:59 And, you know, that's a large consumer of fuel oil and available sort of fairly short notice to carry out a trial. So that's the first step is to complete that trial, industrial trial in in q two, most likely now. And then that will then lead to then a commercial trial in in the main facility, which you can see top right where they use the the fuel for drying. And then between those two applications, essentially, you have a very large basically, that that that that that provides the the demonstration needed to cover the majority of the the fuel use for that particular client. And what we're planning to do is utilize the same the equipment that we're supplying for the industrial trial for the that we manufacture in QRF.

16:49 It can be used also utilized for the commercial trials. So we're obviously looking to try and reduce the the time needed to actually deliver the trials as much as possible.

16:59 So where we are with the preparations for the trial are underway. We're looking to produce the fuel needed for the trial, sort of early part of Q2, complete the industrial trial and then move on to the commercial trial and then conclude the supply agreement second half of the year.

17:18 Coming on to Utah. As some of you will know, this opportunity is a joint venture between aim listed Tomco Energy and a US company, Valcor. They are essentially utilizing or they've licensed a a technology that's supplied by a company called facility called Petrotech, where they have a very environmentally beneficial solution to essentially processing the oil sands. But really, it's, you know, essentially a remediation play as much as an oil play where they can essentially take the oil sands, extract the oil in a in a very low energy means of extraction, And then actually return the the sand as well, you know, in a form which is which is saleable. So it's a very clever technology that's being deployed.

18:11 Why is MSAR involved? Well, MSAR, the the oil that's extracted is is very heavy. And MSAR is is a low is a low cost means of actually getting this material to market. Obviously, one of the opportunities is in the IMO. So the IMO marine fuel compliance space. And our project with MSC is obviously and our client MSC is a potential opportunity to get this material to market as are some other power applications as well. So where we are is we they started up that facility slightly late slightly later than expected in in January of this year.

18:51 They've just been completing the commissioning phase as far as we understand and in the process of piling samples, which we hope to get sent across to to The UK in the near future. So we're waiting to hear from from that from from Greenfield, but we expect we'll get samples underway. And then the then the the idea is that we'll we'll basically then be converting that material to to m site in our lab, which we get paid. And then that will lead to the commercial demonstration. Later in the year, obviously, that progresses, then we'll be looking to obviously sign off licensing agreements and then supply equipment to service that particular contract. And then with MSC, some of you will probably have seen the announcements already that we made in in January.

19:39 But essentially, where we are with MSC is we're we're taking we're taking off where we we we left left up with Maersk. We did we had a number of very successful trials with Maersk. Well, unfortunately, at the time, they didn't they decided not to progress with MSR because they were focusing on low sulfur fuel at the time. And that then basically sort of focused us to look at the the people in the marine space who were putting or companies in the marine space who were putting exhaust gas cleaning systems or scrubbers as they're colloquially termed in the in the industry onto their ships. And what these what these systems do is they they take

20:22 the exhaust gas from the diesel engines and they they remove the the sulfur and some of the other particular matter as well from the the exhaust gases before they're emitted to to the atmosphere. That's an alternative to using utilize mean, that means they can utilize a lower cost, high sulfur fuel as opposed to a a higher cost, sort of low sulfur fuel. So it means that they can utilize they're they're quite adaptable in terms of the fuel that they can use. And that's why we focus on on those types of companies. So MSC is the largest adopter of of these exhaust gas cleaning systems in their fleet. But virtually all of their container the cruise liners are converted, and about 40% of their container ships have put these put these scrubbing devices on board their their ships.

21:12 So that means it's a very

21:14 so they've already made a strong investment in environmental technology, and they're early adopters as well, which is quite key both for us. You know, we we need a client that's willing to look at new things. I would say that what's changed in the last few years for us is that, you know, the marine industry has become a lot more innovative in looking at you know, they've had to be in terms of trying to meet the IMO changes that were that happened at the beginning of 2020. But also there's lots of new, new pressures on the industry to decarbonize. And as such, you may see, you know, early adopters of biofuels as an example, and obviously see bio MSAR as a a lower cost means of of meeting some of those those regulations.

22:03 And with bioemstar, as Mike mentioned earlier, you know, we we are very excited about this because of its obviously, it's it's the ability to reduce c o two emissions. And and ideally, you know, for us, you know, to become essentially sort of net zero by twenty third 2030 is our aim, you know, to come up with a fully renewable solution for MSAR going forward, you know, offers a great growth

22:30 opportunity for the for the company. So what we've achieved in a very, very short time in 2020, really from sort of a a concept to actual, you know, commercial demo sort of commercial demonstrations this year is is pretty amazing for for a small company. It's really utilizing biofuel products or or waste really from the bio biofuel process such that if you when when glycerin comes most of the glycerin in the world comes from production of biodiesel, where for every nine barrels of biodiesel you make, you get a through through transesterification, you get a barrel of renewable glycerin as a result.

23:16 That glycerin crude glycerin needs to go through a cleaning process, but once it once it once it does, it's essentially a very, very good fuel. But it's water soluble, so it means it's not really utilized in the oil space at all at the moment. It's but it you know, for MSR, it's great because we're a water based fuel, as Mike mentioned before. You know, our technology is making an oil and water emulsion. So we're using the utilizing the glycerin to to displace the the the hydrocarbon and quite a bit of the water to end up with a fuel that, for all intents and purposes, looks and behaves much like

23:53 essentially identically to to MSAR and is actually fully fungible with MSAR as well. So it means that for our clients, they can convert to MSR initially. And then obviously, if bio MSR becomes available, you know, and and they need to adapt to decarbonizing, the bio MSR is a very low cost means of essentially

24:15 you know, transitioning them to a net zero world. So we patterned the tech technology at the end of last last year jointly with with with Neurion. Some of our existing patents already were applicable anyway, but we've sort of further cemented our IP position as well together with Neurion. And where we are, essentially, with this particular program is that we've done some initial testing with a UK company called Aqua Fuel. Very, very interesting innovative innovative company who really were the pioneers and and have IP with regards to operating diesel engines on on 100% glycerin. So there's certain things you have to do to run on glycerin, and and these guys are are experts in it. So, you know, it's obvious for us to collaborate together.

25:02 We we we purchased an engine. So that's QUADRISE engine QUADRISE engine you see bottom left, which is a small high speed cummings generator that you can buy off the shelf.

25:13 Shouldn't not designed to run on heavy fuel. It's designed to run on diesel. So I probably wouldn't run heavy fuel, actually, although we haven't tried that. But it runs extremely well on BioEmstar. We did some some testing at the beginning of the year, which I think surprised everybody how well it it worked. So we got very good NOx reductions

25:32 and some, you know, interesting increases in efficiency as well compared to diesel. And that's interesting because with when you run on conventional biofuels, what normally happens is actually compared to marine fuel, the actual the NOx emissions normally go up by 15%. With bio MSR, we're seeing a reduction of about 20 to 25%. And that's that's the the first testing that's been done. So we think we can probably achieve better than that. So we get substantially lower NOx emissions. But also because we're using renewable glycerin and it's considered a waste, even after treatment we expect the cost of bio EMsar to be in the range of sort of two to three times maximum the cost of marine fuel.

26:20 Why is that important? Well, if you look at the cost of marine biofuel compared to marine fuel today, it's about six times more expensive. So we think BioEmcise got a great place going forward for our clients as a low cost means of decarbonizing and very which is very competitive versus conventional biofuel. So again, extremely interesting. We are doing some further testing this year in q two

26:47 with VTT and Vartsila. This is on the medium speed engines, are typically utilized on the cruise ships and and in in some sort of short short haul ferries as well. So large our large application, obviously, Maria MSC cruise lines is is one opportunity there, which we we are developing as well. And then with together with Aqua Fuel and some other clients in the buyer space buyer fuel space as well, We are looking at, obviously, glycerin production and glycerin refining essentially for, you know, for our our projects as well as, you know, new opportunities for glycerin production via, you know, algal means as well. So we're, you know, we're looking at other opportunities for glycerin manufacture outside of the, you know, conventional space today because, obviously, as demand requires it, we will need more beyond the sort of five or so million tonnes a year that's available today in the world.

27:46 But also, we, you know, we we are spreading or pushing the envelope even further in terms of RDI as well to look at, you know, other renewable fuels which are available, which are more abundant. And lignans is obviously up there, you know, where that's already being looked at by certain companies, but they're looking they're not looking at it in the way that we are. So we are looking at, you know, incorporating renewable lignin as a means to essentially further decarbonize our fuel such that, you know, the ultimate gain gain gain for us is, you know, to go for a fully net zero compliant solution utilizing our technology. So exciting times and we, you know, we are, you know, very focused on, you know, not only the MSA, obviously, work, but, you know, utilizing the great technology that we've we've we've developed over the years to provide a, you know, a really great sort of renewable solution as well.

28:45 Thanks, Jason. Just very briefly before we move on to the issue of the funding we've already obtained through the placing and then the funding that we hope we will get provided during the conclusion of the open offer. I think it's really important just to emphasize, we do really carefully look after the money that we have. We already took over some actions very early in calendar twenty twenty to further reduce our costs. Obviously, we have the benefit of not being able to spend money going out doing traveling to do our business development activities. That's only a benefit as long as we can still continue to do those business development activities. And that's where the outline that Jason provided to you on our network of agents and partners around the world has proved to be instrumental in that because all of that work was able to be done either directly through ourselves using remote means or through our partners to ensure that we're in the position we are now to progress these three active projects together with the bioemstar testing and development.

29:53 And then laterally, as we went into the, early part of this year, we took the decision to take the some final funding from Bergen to ensure that we've got a longer tail of funding through the course of this final calendar year that actually helped to underpin our ability to go out to potential institutional investors as we did successfully over the last couple of weeks. And just in terms of, you know, what what funding did we seek, well, when we went to see the institutional investors and they got exactly the same presentation, it was that we were looking to raise the funds to get us through all of the activities that Jason has just outlined to you. So taking all of those three projects, Morocco, Utah, and MSC, from where they are now through to successful conclusion of the relevant trials and tests and then starting to deliver commercial revenues from those.

30:53 And our expectations are that by the end of June twenty twenty two, we've actually got to the position of not just having progressed to commercial revenues, but actually having those to be self sustaining. So the business is actually generating cash flow from its operations at that point. So it doesn't need further funding other than funding that we might look to do for other exciting opportunities that come up, but we will have a business model which is self sustaining by then. It's also enabling us to do some of the important work that we want to do with some of the big national oil companies that Jason also outlined there, where we think being able to engage with them on the back of successful commercial supply into any of the projects that we've been talking about will actually be fundamental to being able to get those over the line.

31:52 And so just in summary, I hope that we've given you some clarity in terms of how we really are solving a heavy oil problem, and we're solving it now. We've got two great products in terms of MSAR and BioMSAR, each of which can make a major contribution to reducing emissions and reducing greenhouse gases. We think there's some huge excitement that we've seen not just from investors that we spoke to, but I think, importantly, we've seen a lot of inbound interest in the business since we started talking about bioemstar and also since we started talking about the success of the trials we're having with our customers in the marine, in the upstream, and in the industrial markets as well.

32:39 We hope that those of you who are shareholders on this feel able to support us in the, fundraise that we're going to be that's sort of, we're actively undertaking through the open offer as the management team will be doing as well. And we're now gonna close off the formal part of the presentation, go into the Q and A. So I'm going to hand back to Paul just for a moment then. Thank you. Thank you, Mike. Thank you, Jason. Ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company take a few moments to review those investor questions submitted already, I'd like to remind you that recording of the presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard on the investment company platform. I'd also like to remind you that your feedback is important to the company.

33:26 And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order the company can better understand your views and expectations. Mike, Jason, I guess before we move on to some of the live q and a, we had a number of questions presubmitted by investors. And I think probably best just on the on the basis of time, we could look to group those into sort of thematic responses. But if I could just hand back to you there, Mike, to just run through those. Yeah. And if I I'll take a couple of these first of all, and then I'm gonna hand over to Jason to take through some of them. But I think, you know, some of them are surrounding the sort of rationale for how we did this fundraising. So one is why did we use the cash box structure? Why didn't we go to a any you know, a GM and seek shareholder approval? And that's basically we think the cash box structure is well known in the marketplace if you don't happen to have this application rights.

34:20 And the reason we don't have this application rights is those didn't get voted through at the AGM in 2020. We carefully considered this. We undertook extensive consultations with our major shareholders, which, at that time, amount to around 25 plus percent of the shares in the business who were fully supportive of us using the cash box structure. And part of the rationale for that is it was the one that we believed gave the best possible outcome, and that was in terms of being able to drive a really tight discount in terms of the placing, which we believe we've absolutely achieved. And also the fact that it isn't conditional means that we could actually push this out to a larger number of institutions.

35:07 So, overall, we're delighted. We think it was absolutely the right thing to do, but we only did it after ensuring that our major shareholders were fully supportive of the use of the cash box structure. And when it comes to those institutions, there are a couple of questions that came in about who they are. We're not limited to actually disclose that, but what we can say is that a number of those institutions have been given significant sort of allocations, and we would expect that those would have disclosable interests. Those disclosable interests will have to be announced once they get their shares actually issued to them, which we believe is tomorrow. So you will actually see, we think, towards the back end of this week, notifications of two at least two new large shareholders in the business, which we are delighted with, and we think you as retail shareholders will be delighted with as well.

36:06 I think then there were a number that I'm gonna hand over to Jason, which were around how are we gonna use this money? Are we gonna be buying more MMUs? So perhaps, Jason, if you could just sort of address that one, and then I'll come back on one other one as well. Yeah. Thanks, Mike. So there were some questions. The question came in with regards it says, basically, with regards to MMUs, how many do we have and where are they now? So we have basically two MMUs that we we own. An MMU, sorry, is an M cell manufacturing unit. These are the the modular boxes you you saw in one of the slides that Mike presented earlier. These these production units are designed to produce up to 6,000 barrels a day of M cell. So So we have one in Spain in storage that's likely to be deployed for the marine program.

36:58 And the other is in Denmark having just been serviced, and that's prepared now ready for shipments potentially to to Utah. So we have two that we currently own. And then there's another follow-up question in terms of following the recent fund fundraising. Will any of the cash raise be used to purchase additional MOUs? And if so, where do you expect them to be deployed? Well, potentially, you know, if MSR demand requires another MMU, obviously, we have the funds to expand our production capacity. We have no orders ready to be placed as yet for additional MMUs. Obviously, that will be subject to signing further commercial agreements. There were there's been a numb sorry, Jeff.

37:49 Go on. Keep going, Mike. Sorry. Yeah. There's been a number relating to, you know, have we given up on KSA? Why aren't we making progress there? And if I I can basically sort of try and answer a couple of those. Absolutely. We've not given up on KSA. There's a particular question as well that indicated we've said in the circular the reason for, we think, one of the issues in KSA is the fact that those benefits don't accrue in the same way they do in an open market to the refiner and the consumer. And therefore, is it a contradiction for us to say that we think we can be successful in KSA on demonstrating commercial success in these other other markets that we're operating in? No. Because what what we're talking about, those benefits are still there. It's just that they accrue to the treasury and to the government and kingdom. So that sort of figure that we've talked about, you know, consistently in the past, potentially, you know, $1,500,000,000 a year is available.

38:46 It is just not available to Saudi Aramco or to the utility, but it absolutely is available to the the treasury there in in KSA. So we think given that they tend to be followers rather than innovators, that we've got a much higher chance of actually delivering success when we're showing that we're actually delivering MSAR and bio MSAR at commercial scale to others in the marketplace. So that's the rationale for that. We've definitively not given up on any of those opportunities, be it KSA, be it, Kuwait, Mexico, or Ecuador. Those are all there, but we think we've got a much better chance of progressing those once we've actually got this commercial success pushed through.

39:36 And if I can just take a a couple again which are relating to the funding, there is you know, would we consider increasing the open offer if oversubscribed? We will answer this formally after this. I think probably not, and I'm not sure if we could. But if you don't mind just taking that as an interim answer, and we will definitively come back on that. And then there's one from Tim b about what was the specific need for the Bergen funding given that you obtained institutional investor support so shortly afterwards. I think the issue there is, Tim, we were not certain that that would absolutely be the case because at the time we took that Bergen funding, we hadn't actively started the funding process in terms of of bringing investors over the wall to to have our presentations with them. So it seemed to us a prudent approach at that point to get us through to the end of our current financial year and the middle of the current calendar year. And, actually, I still think that's absolutely the right thing for us to have done at that point in time.

40:48 And I think there's no doubt when we were having discussions with our institutional investors, the fact that our runway was leading out to the middle of this year did absolutely give them some comfort there. Okay, Mike. You're doing the hard work. I need to give you a give you a Jason, what would you want to pick up on MS sorry, on on Maersk? And in Yeah. So I was gonna pick up actually, that's the one I've got got highlighted here. So there's a question here. It's basically, you know, please can you confirm me if you have discussions with MERS regarding a trial on bio MERSAR? And then there's a follow-up question about KSA, which Mike's already answered. So basically, yeah, we have spoken with with MERSAR about bio MERSAR. I think it's important to stress that our immediate focus in the marine space is on the MSC, delivering the MSC deliverables, which are quite extensive in terms of looking at, obviously, various different vessels and routes and production. And, you know, it's there's quite a lot of work that needs to go on behind the scenes in terms of getting that project delivered such that we're up in production by the end of this year supplying vessels. So that's really our immediate focus focuses on MSC.

42:02 There's some questions also about the where are we with the second marine contract, the contract with the bulk shipping company that we mentioned or companies that we mentioned earlier. Those discussions are are ongoing. Certainly, you know, we had some very good sort of calls with one of the the largest bulk shipping companies in the sector with regarding bio MSA as well. So, you know, as the MSC production becomes becomes known in terms of timelines and and plans, etcetera, then obviously there's an opportunity to for us to focus again on sort of progressing some of those other discussions in parallel. But, yeah, we we obviously we're a small team, you know, we need to get we we have to be fairly fleet of foot and focus on the high priority customers, which are the top three, which we, you know, I've presented earlier today.

42:57 You know, and with MSC, you know, we also have the opportunity to then speak to the the cruise shipping industry as well. So the cruise so their cruise division especially. So, you know, we think that, you know, MSC will keep us pretty busy, certainly, the first half of this year, and, you know, our immediate focus is is on them. There are there are a couple relating to, you know, how quickly we can gear the business up. And I think if I can just come back on a couple of those things, and maybe Jason can sort of come in and provide some sort of supplementary detail as well. I think, first of all, to clarify that we don't regard MMUs as very long lead items, so we don't need, at this stage, to be talking about going out and purchasing these on a speculative basis.

43:46 We can actually use the existing two that we've got to really good effect. And as we progress things, we can look at bringing those on. And, actually, we've also got the ability to use sort of external parties to actually operate these in situ, and that actually was done to very good effect when we were doing some of the work for the MERS trial as well at CEPSA. So we don't see the need for us to be going out and spending lots of money on new MMUs, but we can certainly gear this business up very quickly. And it is highly operationally geared, which means that we don't need to significantly increase the sort of corporate and head office cost to do that. There was a follow-up question from David e in terms of how long is a lead time for an MMU.

44:38 Typically, these these units are produced to supply the asphalt industry. So out of the asphalt season, generally, the sort of lead time is around three months. As the asphalt season progresses, sometimes that can extend to maybe four or five in in Europe. So but there are a couple of suppliers that we that we deal with and we'll be dealing with going forward to sort of spread the spread the burden as demand requires it. So but that gives you a typical range. And then there was a question, I think, Farok from Farok d sort of asking me to clarify what I meant about the the Cummins engine. It's is it just for ships, or could it be used for generators as well? And if the latter, could you market it to companies like Agreco?

45:24 Good comment and observation. The Cummins engine is is used as a generator. So it's for us, it was just a a low cost means of doing an engine trial very quickly, but there was no risk of it. Sorry. There was no surety that that it would work work as well as it did. But the I guess the the interest for us of trialing MSAR on or bio MSAR, especially on smaller generators, is that it could be used as a a sort of a a portable power or semi sort of permanent power generation in a sort of a modular unit as well. So and, that that that's something that AQUAFUEL have a lot of experience in. So, yes, we are looking at, you know, potential power generation opportunity as well.

46:12 You know, whether that's with the Greco or anyone else, obviously, remains to be seen. And, Jason, I don't I just wonder if you want to pick up there's there's one from David d just saying the circular speaks about the plans for the toll process of route for Morocco and MSC. Can you please provide the rationale for this as opposed to the licensing model? Is the tolling model high risk? We don't we don't see the tolling model as as higher risk at all because that's our expertise is, you know, is is in sort of building and running these units. So we have a lot of experience already. Obviously, it, you know, it has a higher return. And in certain so the tolling model has a higher return, I think, is is a show in in the economics that are presented. So for us, you know, it gives us the highest potential return.

46:58 You know? And where certain clients may not have the money to invest, you know, in the MSAL facilities for licensing application, then, you know, for us to be able to offer that as an opportunity means that, you know, projects can get delivered sooner rather than later. And, you know, it's a good use of our two MMUs as well going forward. So, you know, you know, another MMUs if you decide to invest in those. So, you know, it's sort of a horses for courses answer, but it it certainly we don't view it as high risk because, you know, we this is what we do and the companies that we work with are experienced in in operating these units as well. Thanks, Jason. If I can pick one here from Adam C.

47:43 And Adam's basically, and I'll paraphrase this, saying you've what what other information did we give to institutional investors because the projects we talk about are all trials. Yes. They are, but we have absolutely divulged no more information, to institutional investors than is included in this. And if I can therefore bring that back to another question that came in from from Mark s, which is, in a sense, can I just sort of paraphrase it? It's the private investors and the retail investors that have actually helped this company survive. Can you make sure that you continue to prioritize those and that you don't forget about us now you've got institutional investors on board?

48:30 I think, Mark, if you can just take it the fact that we're absolutely absolutely doing this presentation now is, I think, a testament to the fact we are absolutely not going to do that, and we're providing you with exactly the same information that we gave to those institutional investors. And the sort of formal processes, the only inside information they had was in relation to the active work that we were undertaking on seeking to raise funding through a placing. Once that became published, they had no further inside information, therefore, were able to participate in the funding. So you're in exactly the same positions as they are. And you've also asked, well, how do they think it's different than in the past? And I think it is because we've got this broad spread of activities across three different sort of user bases in the marine, the upstream, and the industrial markets, together with all those opportunities we've talked about in the past as well with the NOCs in the likes of Ecuador in Mexico and in The Middle East.

49:31 But I think really importantly as well, what we're able to do with BioEmstar in terms of really engaging with the marketplace and actually getting not just a a product out there in BioEmstar, but actually really igniting that interest in Emstar itself as well as a precursor to them looking at bio MSAR. So I think all of those things have really helped us and really, really struck a chord with these institutional investors. But, absolutely, we will be continuing to regard all our investors as important to us, and that's why we're here talking to you now. There's one I would definitely like to sort of respond to from from Mark s who said, and I will read this out, will you be awarding yourself bonuses for the recent fundraisers you did with Bergen?

50:18 Bonuses you're gonna be awarded for commercial contracts. Mark, we don't award ourselves bonuses. Any bonuses that are paid to the executives are under the control of the compensation committee. They're on terms that are sort of strictly reviewed by them and all the delivery of specific requirements put to us as the executive by them, and they're very demanding. So I can't answer the question as to whether we will be awarding anything to ourselves because we absolutely don't do that. And any future awards of bonuses will be subject, of course, to you being able to scrutinize that at the annual general meeting if any future awards have been made.

51:06 Can I perhaps, Jason, just pick up one other as well? Because someone's asking about, you know, what what certainty is that the MSC won't do what what did. And I just wonder if you can sort of provide a bit of a background there as to why it's very different now with MSC versus the timing with Maersk. Yeah. I mean, with Maersk well, firstly, we wouldn't have you know, I think, you know, the the work that we did conjunct in conjunction with Maersk and the OEMs, you know, was was very, very beneficial in in providing all the necessary data that we've now utilized to get, you know, MSC on board. And, essentially, what MSC are doing is they're committing, you know, some of their vessels or vessel or more to to operate on on on MSL in a live commercial service. So that's a significant commitment for, you know, some of these very large container ships which are, you know, they've invested already invested several million dollars in each vest in each ship on putting scrubbers on board.

52:10 So that's a that's a significant commitment for a shipping company to make to to trial the fuel, and it's only on the basis that the work we did with Maersk, you know, got to where it did. Now why there's a good question that came in, you know, why didn't Maersk progress? Well, the answer really was timing. You know, at the time when we were doing the trial, the IMO made a snap decision. We sort of put the marine industry in a in a bit of a funk in terms of what they were gonna do. Maersk panicked in our view and sort of tried to steer the the the rest of the world to utilize low sulfur fuel, and they didn't see MSR as a as a really as a as a part of that. So we disagreed and sort of work with the companies, the, you know, the more progressive companies who are looking to put exhaust gas cleaning systems or scrubbers on board that gave them full fuel flexibility.

53:01 And really the savings with MSO are highest when, you know, you can utilize a a higher sulfur feedstock. So, you know, that's really sort of lived sort of really opened up the the MSC opportunity. So, yeah, in terms of QUADRISE, you know, they're they're one they are soon to be, I think, the largest shipping company in the world. They certainly run a very large cruise division as well. So we can't really be too explicit in terms of the, you know, the opportunity in millions of tonnes a year of MSO. But, you know, they they are substantial consumers of of of fuel oil for their for their fleet. There there are a couple more as well that have come in in terms of the timing of the fundraise, and one from David g just saying, wouldn't it have been better to wait a couple of weeks?

53:48 I think this is one of those things where always post event, it's it's it's relatively easy to think about timing. I have to say when we went into this, while we're really confident about what opportunities we had and our ability to deliver against them, what was actually really challenging was what response that would have in the marketplace. And I think when we spoke with our broker at the end of this process, they were very clear that we've we've hit a sort of a bit of a sweet spot in terms of timing. So we think it was absolutely the right time to go. There would be no definitive view that doing this in, you know, a month's time or a few weeks' time would have actually delivered a better result. It could have actually delivered a a less positive result.

54:34 Not nothing to do with us, but just where the market might be at that point. So we absolutely think it was the right sort of timing for us. There are a couple, again, coming from Mark s regarding how can anyone basically, I'll paraphrase it, but how can we trust the fact that you've said you'll get to where you are by June 2022 when you've never done done that in the past? I think, Mark, it's up to you what you take out of this. All we can do is give you our confidence that this broad spread of activities we've got now puts us in the strongest possible position that we've ever been in actually get where we are are going to go. And we ourselves have got absolute confidence that we'll be able to deliver against that.

55:24 If you don't believe that's the case, then we just gotta try harder to actually convince you that that absolutely is the case. And if if I can perhaps just you know, again, I'm not gonna read out the detail of it, but Mark is basically indicating that he doesn't believe the the board of directors is investing enough in the company. Again, that's gotta be a personal point of view in terms of anyone on the board, but I think with the exception of one of our nonexecutive directors, everyone is actually participating in the placing or the open offer and for at least taking following their rights and, in many instances, significantly looking to invest further funds.

56:10 We are personally well invested in the company, and we only really share in that success if we're able to deliver it for you, our our loyal retail shareholders as well. So we think we are doing absolutely the right thing. We think we're putting our money behind it. If for whatever reason you think there's not enough of it, I'm afraid that's got to be where we are now. We believe we've got a a great story. We're putting our funding in there to to demonstrate that. If that is not as much as you believe, we should be doing, I'm sorry. But that's where we are at the minute, and we are absolutely focused on delivering for you, our loyal shareholders, and also for our new our new institutional shareholders as well.

57:01 Helen h came back with a a just a quick one of three points still on board. And, Jason, if you wanna just very briefly sort of confirm that. Yeah. Very much so. We we make the dialogue with with three points, you know, specifically on some of the the projects in The Americas. So yeah. No. Definitely, that's they're definitely on on board. There was another question as well, I think, with regards to, you know, a project a sort of a pre submitted question came in in terms of have there been any discussions with potential clients identified through any our partners, Energy Petroleum Consultants. The answer is yes. We've, you know, we've we've had another discussions that are ongoing into Central America as a result of, you know, our agents there who were former colleagues of mine in petroleum and Venezuela.

57:57 Can I just take one? And I'll I'll answer first, Jason, and then you from John R, which is how are you both feeling about the company? One is bad. 10 is great. I'm a good nine and a half at the minute, I think, at least. Always room for a bit of improvement, but, yeah, very, very positive about the business and our ability to deliver on things. Yeah. And I'll give you a steady nine. Not quite nine and a half, but, yeah, I'm at the cold face. There there have been, again, I think, couple of things about Adam c saying, you know, we saying that by MSAL is a game changer and that we've said that about MSAL in the past and what what is why hasn't this been taken up? And I think, hopefully, we've given you a bit of an overview of that, which is we're talking about hugely conservative industries here, both in terms of production and consumption.

58:52 And I think the real thing that has changed is if we look back even, I guess, eighteen months, two years, our biggest competitor has always been the client doing nothing because that's an easy option for any client. Just do nothing. I'll just keep doing what I'm doing because that doesn't you know, to their mind, if it cost them anything. Well, I think what has happened over the last twelve to eighteen months in particular is effectively taken that do nothing option away from the clients because that is really not possible for them anymore. So once they then start to having look at doing something, that's when our solution really becomes really exciting because there isn't anything else out there that's applicable to this. There's nothing that they can do that which would give them the same sort of uplift if they're a refiner seeking to really improve their refinery profitability and reduce their overproduction of HFO than MSAR technology.

59:53 It would either cost them considerably more. It would take them much longer to do, and I'm talking about sort of multiples. So not not within one year, but potentially three to five years. And they would all increase c o two output. So, you know, they're all taking them in the opposite direction. This is the one solution that can actually take them there and do it very quickly. So I think that is something that really is quite different about where we are now versus where we might have been eighteen months or so ago as well. Just to add to that, I mean, I think that's an important feature that, you know, our the institution investors we spoke to a week or so ago now, you know, picked up on as well. So, you know, some of those institutions we've spoken to, you know, for a number of years, you know, they've seen the company not necessarily invested. But I think, you know, the world has the world is changing. I think, you know, we're we're very well positioned with our products to take advantage of, you know, the, you know, the the ESG pressures we're facing many companies that, you know, combined with the economic savings of MSAL, the environmental benefits of equal benefit now rather than just the nice to have in the past. So, you know, the world is changing. It's, you know, positively for us, we believe.

1:01:12 I think we're probably getting to the point now where we maybe just look at another couple of questions now. As I said, we we are really diligent in terms of following up and making sure that all the questions that aren't just sort of repeats are actually answered and put up on the investor meet company website. So please don't take it that we're not actually going to be answering these. We will do our best to answer every single one. But I think a couple that I would like to sort of pick up is wait a minute. It's because it's can can I just perhaps Jason, one of these is what what are we doing about the sort of further opportunities with other renewable elements of bio MSAR and the sort of work that we'll be looking to do on that?

1:02:02 Yeah. I guess that's picking up on an article that that that we did I did recently in in motorship as well. Yeah. Mean, you know, lignin is is one of the renewable fuels that's available. Certainly, you know, very abundant in the world as a as a feedstock. There are various forms of lignin that you can utilize. You know, the the basic form is the solid form, which is, you know, widely spread. It comes from, you know, essentially from wood based products. So, yeah, we we're looking at various different forms of of lignin as a possibility of combining that in MSR going forward, plus some some other renewable components as well. And I think what's also important, which we're working at the moment, is, you know, trying to because there's lots of different biofuels out there, is trying to quantify and classify sort of bio and so on, how that compares with other sort of decarbonization strategies.

1:03:00 So that sort of bio MSR is also on the road map as well as MSR in term in the sector. So, you know, obviously looking to try and, you know, educate the the space that we work in as well where, you know, there are certain parties out there and institutions which are not that well versed in MSO yet, but are very, interested in learning more. So, you know, we we need to educate the various stakeholders in the industries which we which we serve, which we're doing reasonably effectively, obviously, with a small team. So, yeah, I think further work is needed in that regard. But, yeah, certainly on the renewable space, we think there's there's very there's very good scope for incorporating some of these products into into a water based solution.

1:03:47 Thanks, Jason. And I think with that, if I can just make a couple of sort of closing remarks before handing back to Paul, I think, as I said, we will go through all of these. And I I hope and this is, you know, this is directly to to to Marcus, but also to everyone here that, you know, we don't take your support as as red. We we actually realize that, you know, some of you have got significant investment in this business, and we realize that for whatever reason, you're disappointed in our historic performance. And, clearly, we wouldn't have wanted to end up where we ended up in terms of the success or otherwise of some of the projects we've delivered. But we've also always been really honest with you about we've only given you where we think we are going to get on these things. We've never done anything other than do that.

1:04:39 We also, we think, are very open in terms of responding to questions that are, you know, quite challenging to us, and we hope that you at least appreciate that we are responding positively to those. What we hope we can do as we continue through the course of this year is that we are able to show you that we can deliver these projects, and we'll deliver them successfully and then migrate to commercial contracts. The proof of the pudding is gonna be using us actually delivering that, and we absolutely understand that. But we are absolutely committed to doing that, And we are very, very confident about our ability to exactly deliver against that. So thank you very much, everyone. We hope you found it helpful. We will, of course, be coming back to use this channel as appropriate with updates in terms of either our forthcoming interim results or other announcements that we make in due course. But thank you very much, everyone, for taking the time and effort to attend the meeting and also for taking the time and effort to submit your questions.

1:05:45 Fantastic. Mike, Jason, thank you very much for addressing those questions you can. And and as Mike said, they will review all the questions submitted today, and we'll publish those responses back on the, investor meet company platform where appropriate to do so. Mike, thanks again for for summing up there, but thank you both for updating investors today. Could ask investors not to close this session as you now automatically be right redirected for the opportunity to provide your feedback. If you've accessed this meeting from our website, the feedback page will appear in front of you. If you've accessed via the link sent in the email, you'll simply be asked to log back in to provide your feedback. Please do take a couple of minutes to do so. Your views and expectations are appreciated by the company. On behalf of QUADRISE fuels, thank you very much indeed for attending today's presentation. That concludes today's