Quadrise (LSE:QED) — Interims Update

0:00 Good morning, ladies and gentlemen, and welcome to the QUADRISE investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab just situated on the right hand corner of your screen. Simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I would now like to hand over to Non Executive Chairman, Andy Morrison. Good morning. Thanks, Mark, and hello, everyone. Thanks for taking the time this morning. I'm here with Jason Maas, the Chief Executive, and we're here to talk about QUADRISE PLC.

0:47 Particularly, we're here to talk about energy decarbonization and the and the specifically, sustainable marine fuels. We've all heard a lot about sustainable aviation fuels over the last few months and years. And now we think it's time

1:01 for sustainable marine fuels to have the same kind of airtime, and we're gonna be talking about that today. We changed our ticker last year, as some of you will know, to QED. For QED stands for energy decarbonization. And I also had to look it up, because some of you may have actually said, quartz eratz demonstrandum is what it stands for. We've all heard about it, and it means what was to be demonstrated. And we are here today to demonstrate that we've got a significant contribution to make and to encourage you to support us, to continue to support us on our journey. And our strategy is to work with world class partners such as MSC and Cargill, and we're now working on finalizing binding agreements for vessel trials ahead of commercialization.

1:52 Our milestones for this year include establishing the supply and logistics for those trials and getting into commercial revenues from MSC and in Morocco and Utah. And those of you who know us well will know that Utah has taken us much longer than we really intended or wanted. But we do still believe, and you'll hear when we talk about it a bit more later on, we do still think that, that is a prize that's worth going for for low sulfur heavy fuel oils. Could you turn turn to slide, please? Sure. We really hardly need to talk to this slide, although it's there. It's an important part of the presentation in the sense that the completeness, but it's a global imperative. We absolutely have to reduce the carbon footprint, and it's a huge opportunity a global global priority.

2:46 It's never been clearer that that shipping needs to reduce its carbon footprint. And we will show you today how our solutions are cleaner, cheaper, simpler and safer, and above all, that can deployed right now. And I'm going to hand over to Jason, who's going take you through how we are going to deliver on our plans. And I'll be back with you later. Thank you, Andy. Yeah. And just to recap in terms of what we we do as a company. The company was really formed on the basis of providing a lower cost version of fuel oil. Fuel oil is itself today a blend of heavy residual material, the bitumen viscous material that comes off the bottom of the barrel. And that's thinned down with distillates to put in the refinery generally today to provide a fuel which is can be used by the marine industry and other sectors.

3:40 We make a cheaper version of that by just taking the residual matter and suspending that in water to produce more than water emulsion, which itself burns a lot better than conventional fuel oil and it's extremely stable to use. So you can use it as a as a almost as a drop in solution to heavy fuel oil. And then taking that technology one step further, a few years ago, as I'm sure many of you recall, we launched a product called BioEmSAR, which itself is a mixture of biofuel today, which is renewable glycerin, supplied initially by Cargill. And then we're blending that with conventional hydrocarbons, residual material or even heavy fuel oils to produce a biofuel, bio EMSAW. So that's our first sort of renewable version of a product which provides today about 25% lower CO2, potentially higher if you get higher engine efficiency, which we we aim to demonstrate.

4:35 And then taking that concept one step further, we have a plan in place by 2030 to offer a completely sustainable b zero so b 100 rather biofuel called BioMSAL zero, which has basically zero hydrocarbon in it. And we're doing that by blending oil based biofuels with water based biofuels. And there's some work ongoing as as part of that, which we'll we'll tell you about a little bit later. Now in terms of the solutions that offer, they're designed to be cleaner, that they burn much better than conventional fuel. They burn more burn more efficiently, so you get better engine, basically lower fuel consumption for the engine, which produces lower c o two. And then by introducing the biofuel components, you know, you can increase that c o two reduction capability as well. They burn because of water based at a much lower temperature, so you get lower emissions of NOx, visible smoke, and they're pretty cheap to implement. So basically, where the systems really win is we're basically using modular technology from the asphalt industry, which is low in capital cost.

5:44 So that provides a pretty quick play payback time. So each of our modules costs about 5 to $10,000,000 to install in the refinery, and they're paid back in less than twelve months. They are very simple to install in this in the refinery. So that takes sort of six to twelve months depending on the really, the permitting is the leading factor there. And they're scalable. So each module provides about 350,000 tons a year of the biofuel. So they're pretty easy to implement, and each module can supply just over 10 container ships. And then we have a miniaturized version of that technology to go onboard the ships as well. They're much safer to utilize. They're water based, So they're they they have a lower hazardous lower sort of hazard rating in terms of their utilization.

6:30 They're less impactful for the crew crew in terms of they you know, you're operating at much lower temperature, so there's less hazards for them to deal with. There's no gases like there would be to deal with in terms of energy and ammonia. And they're stored and handled at very low, you know, ambient conditions as opposed to having to heat up the products to high temperatures because they're inherently low viscosity, they're they're oil and water emulsions. And then in terms of the the people that we, you know, we have to hand and the partners we're dealing with, as Andy mentioned before, we've got a very good strong team of of specialists. You see Bernard top left, you know, one of our head of operations there. He's been involved with me in the emotion fuel business for many years. And then we have a number of other energy and oil specialists, especially in in in terms of the board, a number of people with that Shell background.

7:19 So and we're partnering up with some very large companies. Nerion, we've been working with formerly Axe and Abel for since inception. And then larger companies with MSC and now with Cargill, sort of sort of roll for the rollout of the the marine and the biofuel business. And then in terms of the background of the company, we have a very strong IP position as well in terms of the original IP for MSAR, but also a growing number of patents now for the bio MSAR development and more recently incorporating some of the biomass derived sugars with the pipeline of other patents that we sort of plan to launch during the coming years. In terms of why people would look at the technology, initially, I guess looking at the refinery, the base application for for MSAR, basically what happens in the refineries by not having to blend distillates into the into the residual materials, they can save that distillate for sale. And that really yields a value for the refinery, which provides an increased margin.

8:22 By the same token, depending on the biofuel that you use, basically, if you take a low grade biofuel and you can incorporate it and sell it as a marine biofuel, there's a premium to be made there as well. So there's an increased margin whether you're supplying the residual material or the biofuel component. And that really that itself then provides a subsidy that's in place that once you emulsify it, you can deliver a lower cost energy for the end user. If it's a if the engines if they're basically running the the fuel in the in the diesel engine, then they get a lower fuel consumption, which saves some money. And overall, that increased margin pays for the saving or basically there's a saving on the ship that that basically incentivizes the user to take the fuel. For the to modify a vessel takes costs around sort of $500,000.

9:10 So the, you know, the MSC Leandra that we're gonna be doing the trial on, that's got a few fuel booster unit in which for the emulsion fuel that's run separately to the the conventional fuel system. So it means you can easily switch between fuels. That costs about $500,000 as a very quick payback as you can see in terms of the saving per vessel for the larger vessels. And then in terms of how we make money, it's either via licensing model where we supply the equipment or on a tolling basis, which is what we plan to do with with Cargill for the MSC trial, to give you an example. And the tolling model basically provides a higher sales and margin because we're we're providing the equipment ourselves and then we're operating it as well. Obviously, we make a slightly higher margin than on the additional services provided. So what we're looking to do is based on this example is scale this up to a level where, you know, we we we certainly members of the team have achieved this before.

10:03 And to do that, obviously, we need to sort of get some of these projects on the road. Now behind the scenes in terms of what's helping the technology, there are obviously new regulations which are coming in to the sector to decarbonize the marine industry. And that's really being led by the European Union. Firstly, the ETS system, the emissions trading system or scheme in the in Europe is basically setting a carbon price. And then what it's done is it's drawn the maritime industry into that particular sector as well to look at their tank to wake emissions and start to charge them based on the baseline value based on for their emissions that the the incremental emissions that they're they're looking to basically generate in in European waters. So what that means is an operator in Europe will have to basically declare their their emissions of c o two when they're still in European waters, and they will have to have 2024, they have to do basically get allocations of 40% of those emissions. And then that scales up over the next three years. So that starts to cost people operating in Europe cost them money.

11:13 And then in parallel to that, there's another regulation called Fuel EU Maritime, which looks at welter wake emissions and is is forcing ship owners to then start to cut their emissions of greenhouse gases as well. It's reasonably light regulation compared to the ETDS, but then that starts to get inherently worse after 2030. And then the IMO in parallel are looking to basically bring in regulations as well, pretty much to mirror what's happening in the EU or it will be a slight lag, but the the IMO covers the global area, not just, obviously, European waters. And then what we're seeing outside of Europe is The US, you know, some of the ports in The US now and places like Singapore are starting to look at implementing their own regulations as well. All of which means in the next decade that there's going to be a growth in the use of lower carbon fuels.

12:03 And specifically in our category, we certainly see this is going to be a decade of really increased use of biofuels going forward. And there's a monetary, even though biofuels are more expensive today to tune of sorts of 50 to 100% more expensive depending on the biofuel you're using to blend. Basically, what that means is that there's an additional cost, but that's subsidized by the value of the CO two reduction. So if you look at an example here where we've got one module supplying 11 large ships container ships, if they supply supply with bioemstar, they're saving a fairly large amount of c $0.02 because of the, you know, the 25 to 30% reduction in c o two emissions that BioEmSA offers. And that basically saves them money other than they would otherwise have to spend on sort of European Union, the ETS allocations.

12:56 In this example, using some nice dollars a ton. And the expectation is that these allocate is a cap and trade system. So as the system develops, the availability these allocations will become more limited and That will start to drive the cost of compliance and the cost of by the, you know, the value of CO two will become more expensive going forward.

13:18 So overall, what our plan is now is to scale up, you know, the implementation of our systems around the the larger bunker hubs. So we have a number of projects that we're ongoing that really that sort of fits into that mold. So, obviously, the the large project that we have with MSC is around putting a system into the sort of ARRA, so basically Amsterdam, Rotterdam, Amsterdam region and the Mediterranean. So in the ARRA zone, we're focusing on Antwerp and putting a facility in there with Antwerp with Cargill and with MAC two. And then in the MED, we're looking at the some of the refineries there that can supply our industrial clients in Morocco, but with a view then that there's additional fuel that could be made to supply the marine industry out of the MED.

14:08 With the project we have in Utah with VELCOR, initially, we're focused on it on local users for that facility, but the ultimate objective is to supply a lower carbon, lower sulfur fuel for the marine industry there, both in the form of MSAR and bio MSAR. And then we have some what we call tier two projects, smaller projects that we're working on as well in Panama, which is with a power plant there that can utilize a fuel as an alternative to fuel oil. But with a view again, you know, Panama is a pretty big bunk hub for the the ships going through the Panama Canal. And then in Singapore, we have basically a southeastern refinery that's very nearby that particular facility. Singapore is the world's largest bunker hub that's around today, supplying the most of the marine fleet with large amounts of fuel oil and more importantly now increasing amounts of biofuel. The biofuel business there is is is really just taken off this year. So there's an increasing amount of biofuel supply out of Singapore. So we're dealing with a refinery that's fairly near a very large terminal that could offer supply to that particular hub as well.

15:21 Now in terms of where we are with our particular projects, we are looking to try and get to close out the the various agreements by by the end of this month. Obviously, that that doesn't leave us many days to do that, but that's certainly what we're looking to achieve. These are binding agreements. There's a three way agreement between ourselves, MSC, and Cargill, and then various other bilateral agreements with regards to fuel supply, tolling, and also services agreement with the terminal as well. So, yeah, the current phase is is literally with the lawyers sort of back back bouncing backwards and forwards at the moment to try and finalize these agreements to get going. And then in q two, that allows us to deploy our facility to site. The permit approval is is expected basically during the next next month or so.

16:12 So that's MAC two actually pre submitted that application before but then sort of the end of towards the end of twenty twenty three to try and advance that process so that won't that won't delay us. And then the plan is sort of beginning of the sort of sort of the middle of the year, we're looking to then start delivering fuel to the MSC MC Leandro five, which is now ready to to take the fuel. It will be deployed to to obviously visit Antwerp on a on a regular basis. And then we commence with a proof of concept trial with MSAR prior to then doing the first proof of concept then with bio MSAR so we can look at the two versions of the fuel back to back. The vessel has previously used EMSAAR before, but has been modified slightly. So it'd be interesting to see how EMSAAR performs again on that vessel. And then for the first time, basically, the use of bioEMSAR on a two stroke engine, which we're extremely excited about. And then assuming all goes well with a proof of concept with bioEMSAR, which we fully expect, then it'll be an operational trial much as it was before when we've supplied the MERS vessel over a period of sort of six to eight months. So that's the plan for the letter for that particular trial.

17:30 Obviously, towards the end of that particular trial, we'll be looking at commercial supply. And then, you know, there's an opportunity also to get the midpoint to get an interim loan out as well. We should advance the commercial discussions if you know, assuming all goes well. And then after that, then there's a wider commercial supply from that facility As it alluded to in the previous slides, you know, one EMSOL unit can supply up to 11 vessels. So we're looking to obviously maximize the output of that particular facility from Antwerp.

18:02 In parallel to what we're doing with MSC, there's some, obviously, some work going on also on the the net zero product, the bio m star zero products where we're looking to look at alternatives for for glycerin to supplement the use of, you know, if there's a limitation in the future with glycerin, we need to have some alternatives there. So we're looking at sugars that that are derived from biomass, both sort of conventional sugars and also looking at pyrolytic sugars as well that come from the pyrolysis process. And then we're also looking at methyl ester type products which can come through the through the production of sort of fatty acids and biodiesel. So what what we can do is combine those products together to produce a product which has a completely is a hydrocarbon free, fully fully bio based and from sustainable sources.

18:53 So with taking that from a from the lab situation through to a stationary engine test during the next next six months, obviously, contingent on how much ones we we have to play with at that time. And then the blend on board process as well, that technology, we have a blend on board unit that we're looking to deploy on a on a on a vessel with a partner there. That could be m it could be MSC or it could be others. So we're looking at deploying that particular facility, which we're also using for blending applications and some of the other trials. So that unit will is fully deployed. And then looking at the other projects that we have, Andy mentioned Valcor before. Obviously, it's taken a little bit of time for them to get to the point of drilling.

19:41 We we expect their drilling permits will be awarded pretty soon, and that will allow them to start drilling in in the second quarter of the year is our expectation. That will generate samples we that can further test further at QRF once they've processed them through their their technology that they're looking to deploy. And that drilling program will also enhance their their ability to raise project finance as well, at least for the the projects that are looking at the the downhole application. Although they do have other projects which are also looking at oil sands as conventional oil sands as well. So once Valcor received the project finance of 15,000,000, then that triggers then the payment to us of the

20:26 site license agreement, which we've already signed with them, which gives us income of $1,000,000 with another $500,000 then of income once we supply the equipment to site. And then that provides then, obviously, the ability to supply fuel for trials. The oil will be flowing at that stage and we'll have the capability then of providing sort of trial quantities to local users, be those power stations or be they sort of local users of sort of fuel for diesel engines.

20:56 And then in Morocco, where we concluded the trial at the end of last year, finally, the client submitted a report to the client which they were happy with. And now we're looking at finalizing the agreements, putting the agreements in place to provide commercial supply to that particular customer, and in parallel, terms for for paid trials with some of their other sites as well. So the client will pay for the the the site trials that we were looking to to to run on their on their facilities there. And then towards the end of the year,

21:32 you know, the second half of the year anyway, we'll be in the preparation mode to get everything installed in the in the refinery, including the other trials that are needed nearby, and then look at commercial supply in a in a year's time. And then in Southeast Asia, the refinery there, we're looking to conclude terms there to do a trial. That trial itself, if it's successful, can then

21:56 morph into commercial supply. So that system is designed then to be able to run on a commercial basis in the refinery to to supply fuel for the refinery, the for the refinery furnaces and thermal applications there. And then in parallel in Central America, we have a power station that's looking to trial the basically, the trial MSAL as an alternative to fuel oil, and we'll do that with by blending on-site using our sort of five ton of our unit. And we're basically then looking at other than commercial supply from from Panama as well from one of the refineries there into the Panama location. So that's the that's the plan on those other projects. So, yeah, all in all, there's a lot there's a lot to do and that that means that we need to make sure that we're fully funded to do that. So we you the shareholders would have seen that we've recently placed $1,500,000 pounds rather with with

22:56 the place ease, essentially, to provide us with funding for the best part of twelve months now. Primarily, the the money is going to the progression of the the MSC project where we're looking to commence the that particular trial. We need to buy equipment to do that and install that equipment on-site and operate the facility.

23:16 So that will provide us the funds will predominantly give us money to to progress that particular trial. There's a credit, obviously, with money comes in from from Utah, which we fully expect, which will offset the costs of carrying out the, you know, supplying that unit to site and also the cost of completing the Morocco supply as well. And then there's a sort of a net cost also of the BioMSAL, so BioMSAU zero development program as well that we look we look to continue doing in parallel. So as part of that placing, myself and other directors obviously were part of that particular placing. A few people coming in on the open offer as well. And then in terms of the open offer funds, which we're now looking to raise from the existing shareholders, that's really primarily to to look at the acceleration of the bioemcell business. Obviously, the plan is, the target was originally to the launches in 2030, but we can see that there's a definite incentive for us to try and launch that a lot earlier. So we'd like the funds to do that if we can.

24:25 The projects in Central America and Southeast Asia, you know, mentioned before, tier two. So the the the additional funds, some of the additional funds will help us to to complete those projects. And then there's some there's some contingency to make sure we can get to the point of profitability as well. So overall, the timetable is obviously the the open offer has been launched.

24:48 The placing shares will be admitted today for the the 1,500,000 placing. And then the results of the open offer are expected sometime after Easter. So that's the current plan, the timetable in terms of what we're going on what we're doing rather. So I'll hand back to Andy so he can conclude.

25:08 Thanks, Jason. And just before we open up to questions and answers, just wanted to sort of summarize a couple of slides. The decarbonization of shipping is a massive opportunity and a huge task as well. And we're working with world class partners who can we believe can make it happen. And I think it's also worth bearing in mind that the team that has been involved in this business for a long time has taken the business like this to scale before. So I think we have what it takes to get this business to scale. And 2024 is really about establishing production and revenues. And our new technology work that Jason explained is continuing, I can say, the background, but actually, it's quite an active program. We're getting closer and closer to the net zero biofuel.

26:01 And really, the blend on board technology is really just waiting for customer deployments. And the customers obviously need to see the low know in many cases before they will deploy. But it's really it's ready for the deployment. And we will continue our outreach to strategic partners who can help us scale the business. I think the way we look at it is that 2024 is really a year for delivering on our milestones and getting value for shareholders existing shareholders who put money in, and we want to make sure that that is recognized by the

26:38 progress that we can make. And so strategic partners, although we'll continue to reach out to them and who knows how fast those conversations would go. But we really see that as a 2025 task when we pass some milestones, we've got some value in the tank, and then we may be able to do some transactions, deals to help us accelerate that process. Just move on one more, please, Jason. And

27:08 then finally, in summary, I think our purpose has never been clearer. We've been very much focused on the shipping today. We've probably never been quite as clear as that in the past, but we really do see that as where our purpose is. And our solutions, I think, have never been more needed, more relevant. And our focus, I think, has never been sharper. And I think shareholders hardly need reminding that our time is now, but we really need to get on with this. No point coming back in ten years' with a solution. We need to get on with this. And so we believe that the our plans with the money that we've secured and that we're still seeking from through the open offer will provide multiple value catalysts.

27:56 And we'd love to have you continue supporting us on the journey. And so with that, that's the end of the presentation section. I'll hand back to

28:07 Mark for the next phase. That's really kind of you, Andy. Thank you. And Jason, thank you for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the Q and A tab on the right hand side of your screen. I just want to let the guys take a couple of moments to review your questions submitted already. I'd just like to remind you that a recording of this presentation, a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard. Andy, you've received a number of questions throughout

28:31 the presentation today and a number that were pre submitted. So thank you to everybody for your engagement. Andy, if I may just hand back to you just to moderate through that Q and A, and I'll pick up from you at the end. Thanks again, Mark. And just we are in an open offer period, so we do have to be a little bit careful about making sure we stick to the script, if you like, on answers. And we'll do our best to answer questions pre submitted and also on the day. But if we don't get to a question or we can't answer immediately, then please bear with us. We will come back to you come back with some published answers on those other questions later on. And so with that, then I'd like to start off with some of the questions that we've received.

29:14 And Jason can answer most of these, I think, but I might answer the old one as well. But anyway, first one, do you think it's possible to have a version of BioMSAUADRISE PLC ready for the market by year end?

29:25 And will it need its own low note? Good question. I mean, where we are at the moment is we have a prototype that's in the lab that still needs to go through quite a bit of testing at the moment. And depends on the depending on the nature of the final formulation will determine whether it needs a low note or not. Right? So we we haven't yet got a low no for our basic BioMcell product. So we need to make sure that we, you know, we make some progress with that.

29:57 And then depending on the components we're using to then blend to make the the BioMXol zero products, that would determine whether, you know, there's a substantial substantial difference or not. So for instance, if we're using quite a lot of glycerin and combining that with another fuel that's known to the marine industry, for instance, like a methyl ester, then we may be able to we may be able to sort of shortcut the loan out process. But that's really depends on a lot more steps in terms of how what we end up with in terms of the final formulation, how we do with the BioEmCell trials,

30:28 and then, ultimately the discussions then with the engine manufacturer depending on their level of confidence at the time. Obviously, some are further up the curve than others at that point as well. So there's still quite a bit of work to be done to finally launch that. But I would say that, you know, with the original goal of 2030, we're, you know, we're we're several years ahead now of that particular development activity. But as ultimately ultimately, this this cost money to do as well. So, you know, it depends a little bit on the funds available to progress that in amongst the core projects, which is the primary focus is to get to commercial revenue.

31:04 Okay. And around the interim results, it says the company continues to assess strategic options and partnerships to accelerate commercialization of both BioMSAAR and MSAAR within the shipping sector. Can you advise if you are looking at strategic investment into QUADRISE or just into facilitating production and distribution and bunkering, for example? And so maybe I could take this one. And I think that it really I kind of actually answered it towards the end of the presentation. So we are looking at both options. Our focus today is more on the operational partnerships and options to make sure that we get the trials finished and into revenues.

31:53 And I think our agreements with Cargill and MAC2 are examples of this to meet the growing requirements for biofuels in Northwest Europe. And so just to repeat what I said, mean, I think the way we see it is that we need to use this current year 2024 to pass some really important milestones and then we can come back to bigger deals to address the scaling up of the business. Maybe we can do those in 2025. So that's why I would answer that. As

32:28 BioMSAAR has been tested in a diesel engine with excellent emissions reduction results, QUADRISE looked at the potential for trials in vehicles such as freight trucks, delivery vans, construction, mining goods, etcetera, where maybe on success, a major oil company could then license the technology and do the distribution through its existing regional and global network. Diesel vehicles will still be in use for a few decades, and BioMSA and MSR zero

32:55 could help a lot in cutting emissions from the sector. Jason, do want to take that one?

33:00 Yeah. I mean, today, focus really has been on the sort of the larger energy what the the larger engines. So we're looking at sort of marine the the engines, diesel engines, which are used for the marine power and industrial sectors. Although, we have been testing on essentially what looks like a truck engine. So I mean, the the fact that the fuel works for brief tests on a diesel engine shows some promise that it could be used in the automotive sector in the future. The the I guess the reality is that the automotive sector is also highly regulated and utilizes pretty clean hydrocarbon fuels and a very small amount of biofuel today. Okay? So there's quite a lot of resistance in the automotive sector to to bump up the use of biofuels beyond set levels. So they're looking at renewable diesel and other products. So for BioEmstar, for that particular market, I would say it's further out in terms of our development pipeline than, for instance, the the the diesel engines, might be used in the marine that's what you you mentioned a a mining application in the in the question.

34:02 I mean, those there are quite a few

34:03 stationary diesel engines which are used for power generation in in mines, etcetera, in remote locations. So they they would be our choice first rather than actually powering the vehicles that then operate around the mine just because those, you know, those vehicles are a lot harder to convert and they need a lot cleaner hydrocarbon in the first place to actually use it to be used in the engine and be sort of warrantied by the manufacturers, etcetera. Okay. Thanks. And then a question here about time frames. Why are our counterparty lawyers taking so long to finalize the outstanding agreements? Yes. I mean, in all cases, you know, we're working with some very large multinational companies, you know, and their lawyers are involved in, you know, in multiple projects, some of which are, you know, multi billion dollar deals.

34:56 And I took time critical as well world events may dictate as well. So ultimately, our agreements get, you know, put into a pipeline and we have to wait wait our turn. The sign off process is done by at a very senior level. So again, you know, to make sure that, you know, everybody has the documentation they need to get that signed off. So it it unfortunately, it does take a little bit longer to get this agreement signed off than we would they we would wish. We can obviously turn things around quickly at our end, but it that doesn't mean that we can suddenly push our counterparties to act at the the same pace if they've got other things that they're dealing with in parallel. Yeah. Okay. And this is a rather long question, but and you have actually answered part of it already in the presentation, James. Naturally, you regularly like to talk about the advances of your fuels compared to other fuels.

35:46 This can give the impression that there is no rational reason why a fuel purchaser would buy any other fuel than one of your fuels. Is this really true? Please give an open and clear comparison of what the relative advantages and disadvantages of your fuels, ideally including BioSAR zero, compared to other fuels, especially biofuels, which are either currently available under development as they are comparable in that they also have no need for extensive ship modifications. This needs to address cost reduction of each type of emission and any other factors a fuel buyer is likely to consider. What can you say about that, Jason? It's a very long question and very difficult to answer completely probably on a call like this. But the the reality is that the fundamental, I guess, value driver for our biofuel is that it's cheaper. Okay? So it's designed to be 10% cheaper than the alternative biofuel state. So we compare our bioemcel product with something called b 30 today. They're quite similar in terms of the CO2 reduction.

36:49 And b 30 uses 30% of the fatty acid methyl ester or a yeast cooking or derivation of a methyl ester. So basically, our blend of glycerin combined with heavy fuel oil or residuals is at least 10% cheaper to for the end user such as MSC to use. So that's the fundamental basis behind why people at MSC are interested. Now, you know, it's a case by case example. And what we do, what we've done today is, you know, beyond bio MSA, there's also sorry, beyond b 30, there are other biofuels we're competing against as well such as LNG. So what we've tried to do for shareholders is to try and provide a simple simple breakdown and and sort of understanding of how the how our fuels compare.

37:39 In terms of the economics, we probably need to provide a little bit of a a better summary so people so shareholders can understand that. Obviously, in terms of our dealings with with clients such as with Hargill and MSC, we're under full full non disclosure and there's a lot more detailed analysis that can go into that as well. So but we we are aware that, you know, we we do need to provide a better breakdown so shareholders can understand what we're dealing with. And, you know, we're we're not trying to present the fact that we're the only game in town. There's a lot of biofuel that's already being used by the marine sector. All we're doing is we're providing a lower cost version of that biofuel today. So that's really our competition. But there are, you know, there are other biofuels that are being utilized today in the industry, which obviously provides a good pathway for us to provide a lower cost, lower emission solution.

38:32 Thanks, Jason. There's another question about timing, which is we can't really say much more than we thought it'd made publicly available. But given that we are at the very end of quarter one, how far into quarter three is the proof of concept and low note trial expected to start on the Andra? Yeah. I mean, provided we can get the agreement signed off, you know, ideally by the end of this month, which is still the plan and that that early q three is is is we still have scheduled for delivery to the Andra. Obviously, you know, we every week sort of delays us a week potentially to get started. So we're looking at, you know, we're making sure that we have the agreements in place, first of all, and we have a a very detailed program with the guys in the office at the moment that are basically working on to make sure we can deliver everything on time.

39:20 We're starting to buy already long lead equipment. So we already, you know, we've already made commitment to buying some of that equipment today if it threatens the delivery of the trial. So at the moment, we're we're confident that, you know, early early q three, we can start delivering fuel to to the Leandra 5. Thanks. And moving to Central America, when where do you expect to get suitable feedstock for the trial and potential commercial side to the Sparkle Power assets? Is Cargill expected to be involved? In terms of Sparkle Power, the main interest for them is a lower cost alternative to fuel oil. So Cargill are not in the fuel oil supply business. Their main interest is in biofuels, frankly, and that's which is why they're involved in the MSC project.

40:07 In terms of supply to Sparkle going forward, that will be from one of the big one of the larger refineries that could supply that particular area with high sulfur fuel today. So we have agents in place down in in South And Central America who are working on that project. But the first thing is to actually get the trial done at the site as well. Okay. I'll take next couple of questions together. Any update on the JGC refinery refueling or the Asian refinery project? In terms of JGC refinery, there's no update to report really on at this time. We we haven't done a lot of work in Japan. Our focus has really been on the the core projects which we reported on today, which obviously one of which is the the Asian refinery project where we're looking to obviously conclude the the proposal for the trial and the commercial agreement, you know, upon success such that that trial can enroll into a a commercial supply operation once complete. So we're looking to conclude that agreement until during the coming period, subject to some of the other things we're working on in parallel.

41:17 Okay. Next question is one probably from me. Have you tried to get one of the big oil companies to invest in QUADRISE to improve their green credentials and to improve QUADRISE's finances and share price? And I think this is a kind of a variation on the strategic partner question, and so the answer to that is is simple. I think the the point I could add here is that we see our agreement with Cargill and for the MSC trials is an important step in that direction. Okay. Not an oil major, but they're certainly a major organization and actually, in some ways, more relevant to what we're doing. And it may be possible to do more with QAGLIN in the future, once the the trials are complete. Who knows? But, we are it's really just the strategic, big strategic deals come when we've achieved the next some some milestone. I think it's the important thing that shareholders should take away from that.

42:06 The is this the last sorry, is this likely to be the last time the company is needs to raise the fundraise for commercial deals commence and revenue is generated? Back to you, Jason. Yeah. I mean, we certainly believe that's the case. You know, we're the basis that the projects is financed, you know, for the projects has forecast and the expenditure that we, you know, that we've that we've got in place will provide us with, you know, the funding that we need to start to the end of end of March next year, by which time we expect that Morocco and Utah to be revenue generating. And the MSC trial, which will also generate small amount of trial revenue, will be sort of nearing completion as well. Obviously, if the open offer is fully subscribed, then the additional proceeds that we raise will, you know, allow us to accelerate the the bioMSAB development process as well.

42:59 And so progress the projects in Central America within and Southeast Asia, the latter being certainly being revenue generative within the within the same period. So that should provide sort of a clear clearer pathway to profitability as well. Okay. Thanks. Now moving on to Utah. Relating to the Utah project, are there any plans to provide biofuel feedstock to the project site to create bioemstar from the project, a hydrocarbon source? Also, are Cargill aware of this project? And is there scope or interest for Cargill to become involved as a partner to improve scaling up potential? Yes. So the the plan, I guess, for the at least the drilling project is that they the plan, you know, in the future, they look to they're looking to do CO2 sequestration.

43:47 So, you know, the the idea is that it'll have a carbon neutral product as it as it gets to ground level. And also the the properties of the oil is such that it doesn't, you know, if it doesn't go through the refining process, it's ultimately very low sulfur in the the treatment process they plan to plan to use on-site. So we've got a basic heavy, very heavy fuel alternative, which is low sulfur, which can go to the marine industry. So that itself will be sort of, you know, we don't necessarily need to add biofuel to that to get a sort of 15 to 20% saving. But ultimately, if the marine industry isn't is using sort of a B30 product, we will add some biofuel to that as well to produce a bio MSA. And we will need bio biofuel feedstocks for that obviously, and that's something we'll take up with Cargill at the time. I mean, the main focus for Cargill at the moment is is in Europe for the the MSC trial, but they're certainly aware of the other projects we're working on as well that may need their their feed stops in the future.

44:49 Okay. And then there's one here I can probably answer. Are there any additional or new projects you can update us on? Because I think, actually, Jason touched on this several times, and there aren't, is the short answer to that. All our projects are updated via RNS or put out there. So what we've got in the circular and everything is really what we've got. And I think that from the point of view of having looking at our resources, we really do need to focus on what we have in front of us. It's already quite a long list of projects. And we've already it's not through our own efforts, but we want shareholders well know that our projects have suffered delay. So we really don't want to add any further distraction to that. If anything, we need to focus on the few projects that we've got to get them over the line.

45:38 So that's what we're focusing on. But back to you now with this one, Jason. Can you give any detail as to the blend on board aspect? When can we expect detail on this in relation to the agreement with MSC or trials with Cargill? Yeah. So I mean, the the blend on board aspect involves the installation of a smaller scale MMU. You know, we we actually own one of those already. So that MMU itself can be used for smaller scale trials or can be used for a blend on board application with the best loaners. So we can we can we sort of apply that in a number of ways. The the the marine sort of the the MSC cargo projects at the moment is is is fully focused on delivering a marine biofuel. So that that itself is that we'll be bunkering the fuel as is.

46:25 But there is obviously an interest in deploying this technology for blend as a blend of board solution as well. And that's something that, you know, we will take up with with MSC and with Cargo once, you know, once we get underway with the the trials that are that are planned in q three. There's a question also I think that came in while we were talking, Andy, in terms of, yeah, could the blending equipment be fitted in tankers so blending occurs occurs while oil is in transit before saving time, you know, saving time in the process. And and would any surplus ship electricity currently, you know, be a detrimental effect? And I guess I could add to that, you know, would would the addition of water be a problem as well? I mean, basically, we've we've looked at this in into, you know, into this technology in a lot of detail. Yes. It could be installed in tankers or in or in indeed in bunker so bunker tankers as well-to-do the blending on board the the the bunker vessel itself.

47:24 So can be done in transit on on the on a on a vessel because of these types of tankers have multiple tanks, so it can be done. The electricity requirement is pretty low in the grand scheme of most of these these vessels. So the actual consumption is a pretty low number. And then in terms of the availability of water, that depends a bit on how it's deployed. But a lot of the the vessels that we're looking at will have their own water system. So they may be the top up in terms of a reverse osmosis unit or something to provide the additional water. But it's it's definitely a feasible solution, especially if we get the emissions the efficiency savings we expect to see during the ANDRA trial. Okay, thanks. And if you see other questions that you particularly want us to prioritize, Jason, do address those.

48:14 But moving on here, providing the loan is successful and the commercial supply agreement is reached with MST, what is the strategy to roll out BioMSAAR and MSAR to other major bunker hubs? Are we reliant on local end users, such as Sparkle of Power on the Asian refinery? Or will agreement with MSC provide sufficient demand outside of the Ara area to develop supply in other major hubs? Yeah. I guess in terms of the the core plan, obviously, initially, Ara is the the main focus supplying out of Antwerp. And then, you know, with the Morocco supply that we need that we need, then essentially, we'll need we'll need a system down in the Mediterranean region as well. So they're they're our first focus. And then in parallel to that, we've obviously got the Utah project where we'll have an MSO unit deployed out there where, you know, eventually we'll be looking to use that unit to sort of that unit or more more units to supply the ports of Los Angeles and also of Houston, US Gulf Coast Region. So they're our main focus.

49:17 And then for Panama, you know, in in terms of Panama then and in terms of Southeast Southeast Asia, they're sort of support projects to that as well. We will have an MMU, you know, in place in in each of those in the future ultimately. But they're probably, you know, at least a year out in terms of those those those applications for the bunker industry at least. The the main focus for those projects is really to supply the end users there. Yeah. No. I think I might add, though. The ships that we're looking to supply are some of the biggest ships in the world with the biggest engines. We can by having like a handful or a large handful of supply points, actually we can address quite a large proportion of the total market. So it's not an endless task, in fact, trying to get the logistics there. It's big task for us to do. But if you've got six or 10 places, then you've got a really good network for these kinds of vessels.

50:22 Given the most recent update, is the intent still to enter commercial supply discussion with MSC at the low note interim stage? In addition, will shareholders be informed that commercial discussions have started? Yes. So I mean, ultimately, you know, we'll see how things go. But depending on the results of the low note, so during the vessel operations, you know, we think it should be possible to advance commercial discussions to start after we after we received an interim low note from the engine manufacturer. So that that's that's still the plan. I mean, ultimately, you know, to be cautious, we've, you know, we can certainly say that commercial agreements will be be concluded at the other trial completion. But ultimately, you know, if things work as we expect, then the normally, the midway point is the time when we expect those commissions discussions to advance so that everyone's ready at the end of that period to then sort of start ramping up supply.

51:23 Because we definitely think demand's there, certainly in Europe as well. Okay. Just moving on to question 18 because it's kind of related. After the Marine proof of concept on MSA, what's the plan for MSA use within the MSC fleet? Are we still dependent on buying MSA loaner for MSA rollout? I think that's a subject for discussion once once MSC have completed the MSR proof of concept and that we've analyzed the performance data on the MSC Leandro. Obviously, we'll have a lot more information now, you know, on that on that particular vessel. The MSC will have to hand to evaluate that that discussion. But, you know, that that particular vessel has been modified since the prior test on MSAR, so it's important to get that performance data. And that will obviously then influence MSC's decision in terms of progressing with MSR.

52:16 And, you know, we have need to have supply locations set up for supply of conventional MSR as well, which is obviously where, you know, refinery applications are important such as the other ones we're looking at for MSR out of the MED as an example. Yeah. Can we ask question 20 on our list? This is about Morocco. We haven't had one yet about Morocco. As the Morocco project is only a small demand project, do we really have confidence we can access commercially economic feedstocks? Yeah. I mean, I think that in terms of the the overall application for that particular client, you know, ultimately that could fill one MMU on its own. So that's certainly an attractive project as far as we're concerned. And we certainly believe that should be attractive to a refiner as an example.

53:06 So but the the the, you know, beyond Morocco, there's also then the the possibility of supplying, as we mentioned before, you know, potentially people like MSC with a conventional MSR, but also the opportunity to then supply biofuel with that same system is attractive for refineries. Most refineries today are looking at some greening up the refinery, producing more and more biofuels. And really that capability is extremely important. If we had came to a refinery client with just an MSR project on its own, that's less attractive than something that's got a pipeline and an opportunity to supply an increasing amount of biofuels. Okay. Thanks. And then going back to MSC, there are a lot of questions around MSC.

53:54 What is the level of direct MSC board, I. E, Chairman or CEO sponsorship to go ahead with the trial and the subsequent commercial supply? Have you been talking to them? Or is your main interaction with MSC ship management? I'm trying to understand why signing the trial agreement takes much longer than initially anticipated. Is that one for me or you, Andy? You can probably you're involved in both discussions. Fine. So the the relationship is the primary relationship is with them, ship management, where we deal with the CEO that you've heard about before there. But the whole group is fully aware of that, including, obviously, the commercial, the supply people who do the contracting of the fuel and the parent company of the whole organization who are very keen to see this get into come to fruition. And I think the MSC have put a lot of weight into their strategy of putting scrubbers on ships and using high sulfur fuel oil.

55:00 And our fuel is actually a very integral part of that whole process. And so they're they're as keen as we are to see this thing done. That doesn't mean to say that they can push their lawyers any faster than we can, it seems. But nevertheless, they're very keen to to see that that through. And we've been in meetings with them face to face where it's clear that if they see this trial succeed, then they want to roll it out. And I think the more that they are anxious to see the success, then the more we sort of get that feeling of the pressure from them as well, which is good. It's we're all facing the same direction than that for that. So this is somewhat related, but I think it's an important question to try to answer.

55:48 Two years ago at the interims update, the following was published at ReMSC. Trial preparations are expected to commence in quarter two twenty twenty two If the trials themselves commence before the end of calendar year 2022, what level of confidence do you have that MSC trial will now happen on your revised timetable, remembering they've had numerous new timelines over the last two years and all have been missed? What can we say about that, Jason? Yeah. I mean, I guess since we we first initiated discussions with MSC, the nature of the the nature of the trial has has changed a little bit. Originally, you know, it was due to be an m an MSAR trial. And then MSC were very keen to incorporate bio MSAR into that vessel trial development program as well. So we had to do a lot of work in 2022 actually with with Vartsila to make sure that they were happy that the the fuel could be utilized on the vessel and that they were warrant that they could go straight to a vessel test and not stationary engine test.

56:48 So that certainly delayed matters. In parallel, you know, MSC were trying to work out which vessel they were planning to do, looking to do the trial on. And they, in the end, they purchased actually the Seagull Istanbul, which fortunately, you know, had the MSL fuel system that was still there, which had to do a little bit of refurbishment. But yeah. So that delayed us a little bit. And then, I guess, recently, it's it's been finding the right biofuel supplier that can take us, you know, to take this project forward, that can supply the sort of volumes that MSC would need. And also, believe it or not, finding, you know, a terminal facility that can can host a trial as well. It's not a lot of the terminals are sort of fully occupied, especially in the, you know, the Arab zone. So finding the right terminal with the right capability and the and I guess the vision to expand is extremely important as well. So that's a that that has taken a little bit of time to pull all those loose ends together.

57:44 You know, we're certainly now at the point where we, you know, we have to get this trial away by the middle of the year. That's certainly an incentive for everybody to get that done. I think everybody agrees with the counterparties internally have all agreed that, you know, this is something that, you know, there's no time at the present now to get this this biofuel up and running and tested. So everybody's focused on on achieving that. But as Andy mentioned before, we, you know, we still have to get through the lawyers to to get this signed off. Okay. So we're coming towards the end of our time now. We've answered some of the questions from today and most of the questions that were pre submitted. Jason, just before we hand back to close, is there other any of the the questions that you that have been submitted to any of the other questions that we haven't asked already, are there anything you wanna just conclude by answering?

58:36 There's a couple around, you know, does the Leandra require dry docking for the trial? It sounds like the required pre trial work is being completed. Yeah. If it if the vessel goes into dry docking, it's not it's not for the reasons it's not nothing to do with, you know, the the trial itself. It's for something it's for another application that MSC may be looking to trial on that particular vessel. So, you know, that is really up to MSC to decide. The original thinking was that the dry docking would have happened by now, But it, you know, that appears to have been postponed. So we don't see that the dry docking will take place before the trial happens, but that's really up to MSC to implement and not ourselves. At the moment, we've been told that the vessel is ready for Q3, and we need to get everything in place to make that happen.

59:29 Thanks, Jason. So we're going to draw to a close. Just to sort of summarize from my side as well, I think we've tried to make it clear that our purpose is really clear around the shipping. And we hope you like that sort of that story and the more the greater focus that we've given to the shipping side of it today. And also the fact that the BioEmstar zero is within reach. And so we've got a lot to be working on. And we know very much from the questions and from our own experience within the company that the successive delays that shareholders have experienced has been at times demoralizing. But I think we are very much within touching distance now. And as I say, I hope you like the story. Thank you very much for taking the time. And we will answer other questions that we haven't managed to get to and publish those answers.

1:00:26 And just remains for me to thank you all for attending today, and I'll just hand back to Mark for any closing That's great. Andy, Jason, thank you once again for updating investors. Please could I ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that Andy and Jason can really understand your views and expectations. This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of QUADRISE PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.