Quadrise Plc

Good afternoon, ladies and gentlemen. Welcome to the Quadrise interim results investor presentation. Throughout today's recorded presentation, investors will be in listening mode. Questions are encouraged. They can be submitted at any time just using the Q&A tab situated on the right-hand corner of your screen. Before we begin, we'd like to submit the following poll. I'm sure the company would be most grateful for your participation. I'd now like to hand over to the team from Quadrise. Peter, good afternoon.

Thank you very much, and thank you very much for joining us for the interim reporting for Quadrise. As always, we start with a disclaimer. I will leave that to you. and jump straight into the presentation. So the strategic challenges of Corevise are clear and well-known, so our focus is entirely on getting the MSC Cargill trial up and running. We have also since we last time met been having a meeting with OCP face-to-face that suggests we might be running a second trial with them leading into a commercial off-take agreement. But perhaps even more importantly, we have been upping and accelerating our efforts to build support from refineries, so we have feedstock supply available or at least plausible for when we need to scale up after these trials. I have mentioned at previous occasions, latest at the AGM, that we are looking at whether we can identify other shipping clients who would be willing to do commercial trials, perhaps in other segments. And this is an ongoing effort where we've been speaking with a good number of people that we believe are willing to be upfront users or first movers rather than the traditional shipping approach where you are first adapters rather. And I think we know pretty much who this is. So we've had meaningful discussions. We are talking to the right departments and all these companies. But it's something that takes a little bit of time. But it's an effort that is ongoing. We're also aware that while our focus is entirely on the trial and on the scaling up of the refinery efforts, we really need to look at the future as well. I think we have a great platform on the Bio-MSAR platform, but it's also one where much of the bio feedstock will vary. There's simply not enough feedstock in any one product to meet the IMO requirements should they ever be adopted. So as you will know, we have a staple product with the glycerine. We have been trying out the cashew nut oils and we are trying out other feedstocks that are perhaps a little bit further away. But it's really important that we can speed up our product or research to market time. And one of the ways of doing that is being Modernizing our data infrastructure is actually quite good, but leading into building digital twins. We're already part of an EU project in that respect, but it's something that will help us fine-tune before we do the actual machine test, fine-tune exactly how do we make the feedstock and prepare it for that test. And we can do that then in cyber instead of doing that on a machine, so hopefully speed up the whole process. We've been trying to sharpen our focus. Of course, we've conducted a lot of projects over the years. We're painfully aware that some of these are projects that are research-minded, so there can be longer periods of hibernation where nothing really happens and then they take off again. And that's just part of running a portfolio of different projects. But we also have more specific projects that you've heard about before and we're going to talk about today. And we just have to be very mindful that they continue to make commercial value to keep them alive. So that's an ongoing process. We have a clear focus on shipping clients. We have to make a choice. But it also means that in terms of power plants and industrial clients, They have to be really promising for us to invest time in it. Some of these other projects are far, far away, geographically at least, but we're trying to focus on them by also using external clients to speed up the process to market. We'll come back to that on the individual projects. And we are, of course, affected and we are watching what is happening on the regulatory front. Fuel EU is moving along according to plan. We are very mindful that a number of countries have looked at the Fuel EU rules and regulations to seek inspiration and they are likely to be adopted there. If IMO doesn't go ahead, timing is uncertain, localization is also a little bit uncertain, and clearly, as a former ship owner myself, there's nothing that ship owners fear more than having a number of different regulatory regimes. Having the level playing field and having one set of rules has enormous value. What we hear from the IMO is that the talks are ongoing, the Americans have offered their view on how it should proceed. Not very positive last Friday. Others have also offered their views. We might call that Liberia and Panama has both suggested to solutions that are close perhaps to the Greek position, which is lower fines, a broader base, more LNG involvement in the range of fuels that can be used. The feeling right now, certainly from my side, my personal view is that this is likely to take longer than just a one year suspension that the IMO decided last year in October in London. From the market point of view, we actually feel that what happens at IMO, it might not impact quarterisers technology that much. The main thing is that our fuel EU rules, they're driving change. What we are mindful of is that there are a lot of other things on the agenda, also of ship owners and most businesses. The pace of technological change, not just in AI, but in many other technologies. where exponential changes in these technologies is really changing the business landscape and no business can afford to ignore it or not be well briefed on it. Same thing we have on a broad term geopolitical transition that we have not seen at all at this level before in terms of a diminishment perhaps of the role of international law change in alliances, certainly uncertainty about many of the traditional alliances that we've been working with in the past, but also trading blocks changing quite rapidly. And that means that any company operating in this environment needs to look at their operational expenses before they look at anything else. So my clear impression from the last six months where we've been seeing a lot of ship owners and a lot of related businesses is that there's a strong focus on the green transition. But everybody understands that they need to make sure that their businesses are strong so they are going to be around for the green transition. So focus will be on cost to a very large extent. And that also matters, of course, for the choice of technology that we can offer. We're still selling both EMSA and bio-EMSA, but there's no doubt that the ability to deliver EMSA below the cost of conventional fuels is a major tool. And that's even before talking about the current conflict in the Middle East. What we are seeing is that many of the players we are dealing with are no longer competing on price or freight rates or even the availability of ships. It's about availability of bunker fuels. which is not a given and that is impacting the value chain. Clearly where sometimes we've been finding that we are dealing with much bigger players than ourselves and that holds its own challenges because they have many, many concerns to take into account. In a case like this, dealing with primarily large players have some benefit because they will be first in line to get the bunker fuels and I'm not saying it's easy for them either. But it's something that gives us some consolation as we're trying to get trials in place with MSC and Cargill in the first place. We are, if we look at the projects, first and foremost for us is the trials that have been planned for such a long time with MSC and Cargill. We've had quite frequent meetings and discussions with both of them over the last three months. I think they're positive. They're down to a few items now. What also happens when things take time and people are checking carefully the agreements they're entering into is that certain things come up again. Most recently we've been looking into whether VAT issues in the EU for the Antwerp trial would affect or would come into play with the tripartite. It seems not to be the case, so that's been sorted out. We're now discussing or looking at the terms and conditions which are standard for a big buyer of fuels. And my feeling is that we are getting very close now. We've had meetings, again, face-to-face. We are experiencing that NSC is committed to the two trials that have been agreed, so one for EMSA and one for BioEMSA. But we're also experiencing that they are very helpful when we are talking to refineries and others and pushing and endorsing not only the trial but building a scale up in terms of feedstock supply afterwards. So I think that's quite positive. Some of the issues, some of the things that have to happen now, we have filed for a branch in Belgium enabling us to start the production in Antwerp. That might be a little bit early as we haven't signed yet, but we just want to make sure that doesn't hold it up. There'll be some certifications that have to be renewed, but the whole process has been simplified. But again, we want to do that already now, so we don't have to wait for that. So I think... Well, I can tell you that it's all been signed and dotted. We're ready to go. My feeling is that we're getting quite close. And our focus has shifted, not shifted, but has now also been on how do we make sure that we can scale up after an expected successful trial. So no longer than three, four weeks ago, Jason and I and Linda as well were in Singapore exactly to look for potential suppliers from refineries, but also from buyer suppliers to make sure we're ready for that and had very positive meetings. Cannot really reveal who we've been talking to, but hopefully we can talk more about that later in the year. With that, I will hand over to you, Jason, on OCP.

Thanks, Peter. Yes, so in terms of OCP, again, Peter and myself earlier this year went out to Casablanca and met with the main people there. Quite a surprising meeting because they were extremely positive in terms of their cost leadership program which MSL fits in with. So the current status is that the updated trial agreement is well underway. So basically we're now detailing exactly which site we're going to be at. The likelihood is it's not going to be the same kiln as we had before which is slightly constrained with this OEM issue which we documented before. But the key thing is, I guess, behind the amendment to the agreement, we make sure that there's an operational board, obviously involving Peter and the head of the OCP there, to make sure that it's got management buy-in and make sure we try and avoid the delays that we've seen so far. The trial itself, the actual duration depends a little bit on the scale of the kiln that we're operating on. So if it's a smaller kiln, it'll be 30 days. If it's a bigger kiln, it's likely to be less. So really the plan is to basically carry out that trial. And a longer-term trial is needed. The previous trial was done over a period of a week or so. OCP were at least a longer-term trial of a couple of weeks minimum. to actually get the full operating data that they say is needed before they commit to commercial supply. So that's what we're doing. And in the meantime, our equipment remains on site. And any costs that are being incurred, we get them reimbursed for by OCP still. And that process has been working very well. In terms of the next project in the US with Valcor for basically heavy sweet oil, which is essentially a low-sulfur bitumen, ultra-low-sulfur bitumen product. We received, obviously, the first payment. We revised terms, if people remember, of the agreement last year. We basically received the first instalment last year as well. We basically invoiced the second instalment, which is due at the end of this month. So we're expecting payment of that 300k and then there's another 650 due at the end of the year. Samples that have been long overdue as well. They've been, essentially the Velcor have been going through a change, slight changes in their exact processing. So they've been holding back the samples until they know exactly which technology route they're going for, but that's now been finalised. So they're doing pilot runs at the moment to generate the samples that we expect to get fairly soon so we can do the testing in the second quarter of the year. Their pilot plant that was due to go in, be operational in Q3 has been delayed slightly because of the site that they selected was not fit for purpose. So they had to move site to a new location. So that delayed some of the civil work that was planned to be up and running by now. But that's moving ahead. So they expect the installation to happen during Q3 and the plant to be up and running in Q4. In the meantime, we've prepared our unit, it's nearly complete now, for shipment, and that will be done during the second quarter of the year to the US, with the expected deployment then in what's obviously part of the installation program in Q3. So really the plan is then to carry out a paid-for trial to produce actual trial volumes of fuel for local consumers, and it also initiates a marketing program that we've with Valcor as well now. This is actually live. But yeah, Valcor is here, so they're fully funded. Obviously, they've got a position now in Tomco as well in the UK. In terms of Panama, Again, as you remember, we carried out a trial in July, which went very well. Essentially, we got a letter of intent from Sparkle, basically stipulating what their demand will be. We know that there's other demand from other both part plants, both within Panama and Central America region, specifically around Honduras. The fuel permitting process, we've got basically EMSAR and Bio EMSAR have been basically approved as alternative fuels. So these are fuels that can be utilised as they're trying to phase out potentially fuel and diesel. So that's been approved. The process for the import permit has also been detailed now, but obviously we now need a live case where we can actually bringing the fuel with a partner. So we're discussing that with regional refineries and other logistics companies in the region with regards to commercial supply to Panama. And in the meantime, we've had some new arrivals to the team, including Matt Hyde, who's coming from BP, who's really helping with getting a deeper understanding of refinery economics there as well in that region. In terms of the BioEMSAR program, which is ongoing, we've been doing a lot of testing with additional biofuel feedstocks, including doing things in the lab, but also doing testing at third-party facilities in Germany, where these engine facilities are used by quite a lot of the parties, so it's a good endorsement for the fuel. We also kicked off a collaboration with the University of Bath, not just in terms of fuel research, but Peter mentioned before some of the AI digitisation as well. That's something that Bath can utilise in the future. And obviously it's potentially a good talent pool for us going forward in terms of their engineering and the technical people as well. And in the meantime, as Peter mentioned before, there's a world beyond glycerin for the biofuel, which really comes from biomass-derived material, which is abundant, but obviously there's different technologies to extract it. So we're working with the main technology providers there, all of which has its own features and challenges, but we're working through to actually get some of their products to market faster than they would normally expect through some of their other technology platforms, which is why they're working with us. And then as part of the development program as well, you know, we have an EU funded project which we're part of, us among sort of 18 other companies ranging from universities through to people in the marine space as well and actually owners of vessels as well. So that's been going very well and it's actually, you know, it's been quite active this year in putting together this digital twin which again Peter mentioned at the beginning. which is looking at four different types of existing vessels and four different types of new build vessels to see what's the optimum technology platform to decarbonize shipping. And it's looking at a range of different technologies of which MSL is one of those on the biofuel space. So it's a good platform for us to market our technology. And then Sustainable Ships is something that we launched again with them today, sorry this year rather, with Linda and Alfie especially have been very active in getting that up and running, doing an online seminar and that's brought through some quite good introductions already as part of that program. It's a good way of comparing how EMSAR and Bio EMSAR competes with other fuels. The next slide really just gives you a pipeline of the different fuel types that we're using and explains really what the bio-emissor is a mixing technology. It's a platform technology which now enables us to bring in a range of different biofuels into the finished product on the right, which needs to go through the appropriate engine testing, but ultimately can then be rolled out to the shipping fleet and really answer some of the questions around the abundance of biofuels. That's what we're really looking to nail and provide quite a unique approach difference in what we're offering because we can blend oil and water together. Some of these products, like the sugars that we mentioned, some of the, you know, the prolysis sugars and other means or other sort of components on here are actually water-soluble as opposed to being easily blendable with oil. So we have the ability to blend both. And I'll hand over to Xavier.

Thanks, Jason. So our results for the period are largely in line with the same period last year. Our loss has gone up a little. We've got some additional projects and development costs in there this year. The main thing that is of interest based on the questions is our cash balance. So at the end of the period, at the end of December, we had four million in the bank. Now, in addition to that, as Jason alluded to earlier, we're expecting another some through from Valcor overall to take us through up to the million US dollars that we're getting on the license fee and that's expected in over the course of this calendar year. Now where that's going to take us to we're going to have to see where we get to with our hitting our milestones and our projects for the period. So it's too early as yet to say how far that's going to take us to. We're based on our cash spend rate which is historically about three million per year. We've brought in some new additions to the team So that cash spend's gone up, but maybe only 10, 15%. So that 4 million is still way more than one year's worth of cash spend, plus the Valcor money. So we're in a pretty healthy position cash-wise. The loss for the period, loss per share for the period is in line with the prior period. And our tax losses of 68 million will be there when we come to generate profits. And that's everything from me for the moment.

Thanks. Thank you. So there have been a few updates to the team. You will have noticed our INS on Laurie stepping down from the board. and Michael Covington joining us. Michael brings in many years experience in investment banking and private equity leadership, also in energy. And just as importantly, he brings in a lot of energy and drive and a willingness to contribute and participate on the board and in the daily work. So really looking forward to that. We have also brought in Matthew Hyde, who has more than 30 years in refinery economics, most recently from BP, and that's a reflection of our decision to accelerate how well do we actually understand refinery economics, because it's not something we can just do after a successful trial. Once we are having a production trial, we need to make sure we can scale up afterwards, so we can supply the material and the fuels to our clients. Right now, we're down to about probably a gross list of 25 refineries that has a good match to the kind of residues we are looking for. And then Matthew will need to analyze that further to find out which are the ones that will benefit the most from using the EMTAR technology and the BioEMTAR. So that's ongoing work, but also really important. And I feel we have already learned a lot compared to when he started. In summing up, I feel we are making small steps forward in almost everything we're focusing on, and I'm really looking forward to being able to announce, hopefully, the MSG agreement being done, and then being able to move on to the next steps. And I'm also very mindful that while it looms large to have the agreement signed now, or the agreements signed, the next steps are going to call on something else from Corbis. And we have to get into project management phase. We need to mobilize. We need to set up. We need to make sure that the crew on the ship or ships in question are ready for the trials so we get the most out of them. And then we need to make sure that we scale up properly, that we have agreements in place with refineries. And while we're starting in Antwerp, it's quite clear that some of the next places we have to go, of course, shipping hubs like Singapore. It might actually be the Persian Gulf again at some point. but also the Mediterranean and the Americas. So that's what we're focusing on and trying to run a tight ship of course also on the resource side. Still investing in our future, investing in the data platform and accessible data lakes. So that's where we're at. We've had a number of questions come in, I think 45. I'm going to hand over to David to take us through as moderator of the questions that have come in and the questions that you can still post on the platform. So with that, David.

Thanks, Peter. So thanks to everyone who's submitted questions on the IMC platform. We're going to deal with the pre-submitted questions first, and we've grouped them into segments. So we're going to be going through each segment. After that, we'll come in with the live questions that are coming in as we speak. And any questions that we don't address today will be dealt with on the IMC platform in due course, likely early next week. So I'm going to start now with some of the strategy questions for Peter. And the first question is, what efforts are Quadrise applying to the market of new built dual fuel ships fitted with scrubbers and how big is this opportunity?

Our focus right now is on talking to owners who have a willingness to move first. So owners who control their own ships. So one thing is owning it, but another one is actually controlling the daily operations. And of course, we're looking for ships that has the highest possible consumption per day of fuel because that's That's where we can really test them and where we really want to sell. So that is our priority. Secondarily, we are probably looking more for vessels with electronic fuel injection main engines, because that works better with our technology. And that's even before looking at scrubbers or no scrubbers. So I think we have a fairly good take of the segmentation here, both from the experience I have and Tony Foster and Linda Sorensen has in the shipping industry, but obviously also because we have fairly good access to data from various databases on where the ships are with high consumption and the fuel injection, electronic fuel injection, but also with the scrappers. So we can break that down and that's how we approach the marketing, if you will.

Probably worth adding that. The dual fuel ships tend to prioritise LNG. There's a reason normally that people have built a dual fuel ship that has to take advantage of LNG. So it wouldn't be our obvious first choice necessarily. But having said that, there are a number of dual fuel vessels that are using fuel oil still if they can't get LNG. But it's not the first choice I would say.

Okay. So the next few questions are with regards to bringing in additional shipping companies. Do you expect to sign up an additional shipping company once the trilateral agreement is signed between MSC, Cargill and Quadrise? Can you update on how the search has progressed for additional shipping companies? And can you put a timescale on that?

So we're hoping to add another trial. We're talking to tramp owners. We're talking to other types of owners. The timescale is a little bit hard to predict because right now, with all of them, I actually feel we have good access. So in some, we've started with the bunker departments. And then we refer to the technical departments. In others, we've been in with the technical departments first and then talked to the bronco traders or the ESG departments. We had a number of very good meetings in Singapore when we were there too, so we are sort of spreading it out. We have been talking to family-owned companies and to listed companies. But again, what we're looking for are people who have proven that they're willing to look at green transition fuels, who have invested in that because it comes often at a cost. If we can find owners who have vessels in place for Antwerp, that's another benefit. Predicting when something will be signed is way too early. All I can say is we're having fruitful and meaningful discussions. And some of the ones we've talked to will probably want to wait simply because they don't have ships in place or because the segments that they're operating in are under some pressure at the moment. So I don't want to put a timeline on. All I can say is that I feel we're talking to all the right people. And I'm hopeful that we'll get another trial.

And are you seeing the interest being primarily by Emsar or Emsar or both?

I would say both, right? At this stage, for some of the bigger players, I'm pretty convinced that the real interest will be for Emsar, but that's yet to be proven, right? But I just know what kind of cost pressure most of these owners are going to be on right now, and the uncertainty that they're operating in. And this is something that chip owners have done for centuries, right? Dealing with uncertainty and volatility, so they know how to do that, but it always starts with making sure you have your cost under control. And Emsar is a great product for exactly that.

Okay. After Antwerp, what is the next plan to install Emsar or BioEmsar production? Can you confirm if this will be terminal blending or at refinery or both?

That's a great question. That obviously depends on our clients. But if you're looking at a very large liner network, or if you're looking at a tramper owner, the obvious next place would be Singapore. That's the biggest bunkering port in the world. It's a port that has done a lot to improve the transparency of their fuel markets, generally speaking, so they've had issues in the past with cappuccino bunker and all sorts of other sub-standard fuels, and they've dealt with it using transparency and different mechanisms. We had a fantastic number of meetings both with governments and fuel providers in Singapore when we were there. I think a lot of what's going on is really, really exciting. But for a sheer size as a bunkering port, that's an obvious place for us to be. For the next places, we have looked at auto refineries and suppliers in a number of different places, including in the Persian Gulf. But with what's going on right now, that doesn't seem to be a viable third place to set up. But we are mindful of the advantages once it becomes accessible again. But East and West Met, the Americas are obvious places. The trial that Jason spoke about with Sparkle, it's not just about a power plant, but it's also a strategic location for supplying fuel to shipping, right, at the natural bottleneck. So we are looking at these places trying to identify what are the suppliers available on location that we could collaborate with.

Thanks. You said in your interview this week that MSAR offers price competitiveness, so that's where our focus has to be. Is the intention to roll out MSAR commercially once the proof of concept data analysis is done and the proof of concept is signed off as successful by MSC?

We will roll it out as soon as we have a client willing to commit to it. Right now, a lot of the clients who are willing to do this, their path to adoption will be much easier if there's a successful trial. So that's why the trial is so important. If somebody is willing to use it now, we have some experience with using the technology in the past in power plants. Now we have to prove it for shipping, but theoretically, there should be very few real issues. There's something about the mobility, et cetera. But if somebody was willing to sign a take-off agreement now, we would be willing to go ahead with that. But the trial is important for a lot of the owners we're talking to. So we do that first, and then we hope to be able to sign agreements or maybe trial supply agreements with ship owners as the trial shows a resource.

Thanks. And lastly on this section, just one on sustainable ships. How is the Quadrise Fuels price modeler working as a sales tool?

I think it gets people interested. It also works as a sort of a uniform way of calculating because one of the things that, you know, we – we don't always talk about when we talk about biofuels or alternative fuels is that there are so many assumptions that goes in. So at what load do you run the engine? At what speed? What is the weather conditions like? At what end of the range? I mean, certainly many of the articles being written tends to overemphasize the high end of the range of any given product. So I think the sustainable ships platform offers a standardization of that so we can compare better the different fuels. So I think it has helped us in getting people in the door. But it's also something we use on a daily basis when we are presenting to ship owners or to people interested in the product in general. to show what it would work like for a different chip type or given conditions, right? Or at a given time, right? Because let's not forget that few EU changes over time, so requirements will change in 30 and in 32, I believe. And the same thing with the proposed IMO framework. So it's helpful for that reason alone.

Yeah. Thanks. So I'm going to go on to the technology section now, and these are primarily directed at you, Jason. So the first one is just on refinery setup. Is it true that new and updated refineries are having crackers fitted to extract more value from the input crude and that this will reduce the amount of residue available? Does this therefore mean that bunker and storage companies producing MSAR or bio-MSAR are the path to successful quadrise rather than refinery bio-MSAR production?

Yeah, I think in terms of existing refineries, I think those refineries actually installing, I guess, upgrading equipment are in the minority. There's not many companies actually investing in downstream assets anymore. But certainly the case for new refineries, if you're building a new refinery, that tends to be a full conversion refinery and you don't produce any fuel at all. I think if you look at, you know, and people are doing this on the basis of a long-term plan that might be five or ten years out, right, with the expectation that fuel oil, especially high-sulfur fuel oil, is in a decline, when in reality it seems to be quite a popular product and is still on the rise in terms of how it's being utilised. And there's still a very large market for heavy fuel oil. Based on our assessment, Peter mentioned before, you know, we've done an assessment of all the refineries available and there's at least 25 refineries on our short list, which are really good candidates. And indeed, some of those actually have put cracking capacity in, but they still have a residual stream, which they have to blend to fuel. So not everybody's going, just because you put a cracker in doesn't mean you have no fuel at all. Some still produce quite sizable amounts of fuel. So that's really where we see the refinery is key. I'd say that's That's the source of the lowest cost feedstock. But having said that, in the middle of that, refineries don't have a lot of tanks and not always involved in the bunker business. And that's where the storage companies and the bunker traders, et cetera, are also important to us as well. So I wouldn't rule them out as partners in the future because they are key to unlocking the logistics of getting it from the refinery to the end user, the ship owner. Excellent.

What is the plan for supplying residual streams of BioEMSAR at Mach 2 to replace the HFO component and further reduce BioEMSAR cost base? Also, do you plan to deliver biogenics to refineries to produce BioEMSAR at the refineries and minimize the cost base?

Yeah, I think in terms of the residual streams, we're certainly looking at using the more viscous forms of fuel or a fuel or derivative. So the heavier the resins, obviously, the lower the cost. But it doesn't mean we can start using refinery resins in that particular facility because of the viscosity of it is just too high. and the temperature that you need to handle it in makes it quite complicated from a logistics point of view. But we're certainly looking at the most viscous forms of fuel oil you can buy out there as one of the components. And in terms of other biogenic components, we're certainly looking potentially to supply those to refineries in the future where we could put a system in the refinery. Certainly that would be an opportunity to supply them with a biofuel in the future to make the bio-EMSAB products as it becomes of interest. But the primary driver probably in the refinery is most likely to be the EMSAB products initially. But every refinery likes to know that there's a biogenic pathway going forward as well, and we've got a range of different options and a pretty low-cost solution as well compared to some of the other things we're looking at.

Thanks. The next question is just on MSAR and bio-MSAR production. Can MSAR be produced at refineries and then shipped to a bunkering location for further processing in the bio-MSAR? So the question is, can we make bio-MSAR out of MSAR?

The reality is it's a bit more problematic because MSAR has 30% water and BioMSAR has 10% water. So there's a limitation to how much BioMSAR we can turn into, sorry, your MSAR we can turn into BioMSAR. So in reality, it's much better to produce the individual fuels. That's not to say it couldn't be blended in the future, but there are some physical limitations in terms of what you can do. Because ideally, what you'd want to do is replace the water with a biogenic component in the water phase.

Makes sense. Post BioEMSOR low in ore, when could we expect other biogenics to enter the BioEMSOR offering at the commercial level?

I mean, that's something we're testing at the moment. So there are, you know, Peter mentioned before, some available products which are commercially sold today but have their limitations in the case of methyl ester residues and actually nutshell liquids and some of the other products out there. that we're looking to introduce at an early stage. That requires some engine testing that we're still doing to confirm that and obviously then we need to present those engine test results to Bart Siller and others and get a candidate vessel to actually utilise the fuel as well. So it's work in progress but we're making very good progress in that regard in terms of offering another pathway for these products.

Just one here now on ISCC certification. Is ISCC certification a prerequisite to getting the trial agreement signed, or does the fuel actively have to need to be produced and the onsite setup audited in order to secure the ISCC certification?

Yeah, so the ICC certification process we're working on together with Cargill. We've made some very good progress in that regard and the new regulations that covers the EU especially simplify the process. So in terms of the application process, we're in good shape. The final part of that jigsaw is to actually get an audit done once the plant's up and running, basically once the plant's installed at MAC2 and being commissioned, that audit can take place and that's the final rubber stamping. And to answer the first question that you had, I mean the IC certification process is not holding up anything in that regard in terms of signing agreements. That's purely commercial and legal discussion being finalized between MSC and Cargill.

Okay, thanks. There's a couple on here on the financials, so I'll just deal with those ones. What is the other income of £12,000 in the interim accounts? So that £12,000 is grant income. So we've received grant income for the Seastars project. Overall, it's about £50,000. So we've actually got that cash. And what we do is we release that to the P&L as the work against that programme is completed. So as of December, we've released £12,000 against the P&L. And then a couple of questions just on where we're at with cash. I did cover that on the presentation, but just to reiterate, We've got four million at the year end, which is still more than one year's worth of fixed costs, despite the increases to the team and the headcount. On top of that, we're expecting nine hundred and fifty grand worth U.S. worth of some from Valcor throughout the course of this year. So we need to work out where we're going to be over the next six months by reaching our milestones as to how long that's going to take us to. There's one in here as well. Shareholders have been advised that the last fundraise was sufficient to take the company through to commercialization. Given the cash holding and spend rate plus delays to revenue generating contracts, does that guidance of sufficient cash to commercialization still hold true and how appropriate was that guidance? So when that guidance was given, that was after the last fundraise and during the last IMC, which was about six months ago. And that's where our projections were at that time. Obviously, things have been delayed a bit, so it's not as clear cut, but it's still too early to say. We need to see which milestones we hit over the next six months. The next section is on MSC, and I'm going to direct these to you, Peter. Can you provide a delay and can you provide detail on the delay associated with signing the MSC trial agreement and why trilateral agreement is now mentioned in the interim results RNS? Also, specifically, what do you mean when you state in the RNS post-trial commercial considerations? What considerations constitute MSC putting ink to paper?

Yeah, so we have been told about tri-lateral agreements, four-lateral agreements, and at some point even bi-lateral agreements, and some of this is driven by attempts to make this work, right? So there was a concern about being subject to EU VAT in Antwerp. And that led us to look at if we could inject a barging company in the agreement as well and hence avoid it. It turns out not to be necessary. So we're back to a tripartite. It's not a fundamental change of the agreement at all. Now we're back to the original tripartite, but still with a discussion over some of the terms and conditions that Kargil is going through as we speak. So that, I think, was the first question. On the second question, it was about the MSAR, was it? Yeah, that really refers to the scale-up in the commercial contract, right? So my expectation is that that will be for MSAR. My expectation is also that we need to have refinements ready, and we're hoping for MSC to... use some of that leverage in helping us get in. But we're not leaving it at that. We are doing our homework. As I mentioned, we've hired Matt Hyde to help us do that homework. But we're also using two different consultancies who have different kinds of access and different perspectives on this. And we can call on them when we need to get a little bit closer to any one of these refinements to make sure we can clinch such a supply. Yeah.

Okay. Peter recently stated that the remaining parts of the draft agreements are now predictable and we can expect signatures soon. Was Peter referring to both tripartite and bilaterals or just the tripartite here? And have MSC and Cargill shared their view with the team that they will also expect these remaining parts to be predictable and signed off soon?

The outstanding contracts, there are a couple of bilateral ones and there's a tripartite as it looks right now, are all related. So it's the same issues that need to be sorted out in order for us to finalize these. So you would expect them all to be signed together? I would expect it to be one signing, yes. I'm certainly hoping it will be, but I see no reasons why it shouldn't be. My conclusion that these are small is based on 30 years of the shipping contracts and the issues that are remaining, I believe, is of a pragmatic nature rather than a principle nature. But with large companies, you want to make sure and you will involve your legal departments. And that's where we are. So what we can do now, I'm not going to give you a time frame because that's born to be something I regret. But what I can say is that we try to keep the pace up on this and try to make it a little bit simpler to get it expedited and push your own legal departments rather than us just waiting for it. or answering us. So I think these are smaller, I think these are, of course they're not small issues, but they are pragmatic issues and we should be able to sort them out. But I'm also mindful that if you're running a fleet of 750 ships and you certainly can't get oil out of the Persian Gulf, that's probably going to be your prime area of focus right now. So we are competing with that, that's for sure. But that's one of the few things I can see should hold it up further.

Okay. Is the plan for AMSAR rollout post-AMSAR proof-of-concept completion? Can you provide some detail on the plan once the MSAR proof of concept is confirmed as complete?

Well, it is that we need to be able to provide the manufacturing units in the locations where it's required. And it's going to be a gradual rollout. We're not going to open up all over the world all at once, but we will prioritize the big bunkering hubs. I spoke a little bit to it earlier, so Singapore is an obvious choice. It's a very, very significant bunkering port. Maybe build out in Northern Europe, certainly in the Mediterranean, and at some point in the PG because of the Persian Gulf. Right now that's off the table, obviously. And then the Americas. But that will also depend on the clients and what their preferences are. They are also likely to perhaps change a little bit as the world changes around us. So we are flexible on that. As you know we have collaborators who can help us scale up also on the production of these manufacturing units. Fundamentally it comes down also to the partners we have both on the refining side and also in some places on the bio feedstock side. Thank you.

Can you confirm if MSC has informed Quadrise that they'd be willing to use EMSAR commercially under the interim law? And if so, how many vessels would that involve as human agreements were reached? We have not gotten into the detail like that, no. Okay. And do MSC still regard EMSAR as their main Quadrise fuel choice in the immediate future? with bio-EMSAR use dependent on economic considerations going forward?

I think that's a very good question. It's probably one that MSC should answer, right? So my expectation is that there will be a strong focus on whichever one offers better saving over conventional fuel, and that would be EMSAR. So I would expect that to be the case. Okay.

What is the status of MSAR supply to MSC, which we have been told is running independently of Mach 2 facility with preferential supply in the Mediterranean?

That we are assessing all the locations where we can provide this, but ultimately it's up to MSC and collaboration with us and other suppliers to determine where we can deliver the fuels.

Can you clarify the status of the interim loan offer MSAR and whether MSC have explicitly confirmed they would proceed to commercial use without a full loan following a successful proof of concept? If so, how have insurance implications been addressed to ensure this does not become a barrier to uptake?

Maybe, Jason, you could take the lono part.

Yeah, I can take the question if you want. I mean, in terms of the interim lono, it was issued to Maersk by Bart Siller. So that's the status of the original interim lono, obviously of which MSC is very much aware, right? So from their perspective, something's in place that covers that. And in terms of, I guess, the trial itself, obviously the test vessel is insured in terms of the product line. liability risk of using Emsor or BioEmsor, that's for the insured as part of the development process. As part of doing this trial, obviously you generate a lot of data and further approvals then in terms of the products that we're supplying, all of which helps to alleviate some of the initial risks that you get from insurers and others in terms of obstacles to actually move ahead. We're in very good contact with our broker and the underwriter on Lloyds who covers this risk at the moment for us. And obviously as data is improved upon as the tests progress, then that we should reduce the premiums in terms of using the fuel on various vessels. And we don't see that as a constraint going forward because it's being done with other fuels as well.

Yeah, okay. Have NSC indicated a desire to get our fuels used in their mine engines?

They have in the past and obviously Peter's been involved with discussions with MAN quite recently in Denmark in terms of what the approval process will look like, so that's something that we are progressing. So yeah, I think, but yeah, for sure MAN or Evalancers as they're now called now are an important OEM that we need to bring up to speed as we get the data from the testing that we've progressed. Shall we move on to Morocco? Yep.

So we're going to move on to the OCP questions now. Can you remind us why the Morocco trial is actually needed, given that there was already a successful trial in November 2023? Also, is the fuel to be used the same fuel that was shipped in December 2022?

Yeah, so the additional test is needed because the first test that we did was designed essentially a proof of concept test. by OCP. So that worked very well at Curriga. We basically tested both MSAR and BioMSAR over a short period of time. So the requirement from OCP was that that's gone well, very happy, but we need to have a longer term test of up to 30 days, depending on the kill, to get the data. So that's what we're planning for next, is to complete that subsequent trial. Anything between 15 to 30 days is the plan at the moment. And we'll be utilising, we won't have to make fuel and bring it to Morocco. So all the fuel from the previous test story was utilised successfully without any problem. So it's not like we've got fuel sitting around there for that period of time, although that would probably still be stable if I'm honest. But yeah, so we've been making new fuel in Morocco and using that for the tests going forward.

Okay. For OCP, are you looking to set up Mediterranean fuel supply is previously or would the fuel now be made in Antwerp and shipped to Morocco?

Yeah, I probably have answered that one in terms of we'll be making it in Morocco as opposed to making it outside of the country at the moment.

I think this is probably getting our post-trial considerations.

Yeah, I guess this is with the OCP trial. But yeah, in terms of post-trial, definitely that would be most likely a refinery in the Mediterranean region or in Africa.

Okay. And then one for you, Peter, on LCP. Haven't recently met LCP. What is your take on their general attitude to and interest using MSR?

Also, I mean, we went to Casablanca for the meeting. I was quite positively surprised by their interest in using it. Also, an approach that I think makes a lot of sense in involving the different business units to make sure they are motivated and they're measured on it. It's a reasonably small project. trial, obviously, but we have the equipment on location, if you will, and I think it makes a lot of sense for us to stick around and conduct the trial and just make sure that the project management around it is something that we can all learn from and that it leads into a commercial take-off agreement afterwards. Okay?

A couple of questions now on Valcor for you Jason. Can you detail the plan on producing MSAR or Bio-MSAR at the Valcor facility and how this gets to bunkering locations if MSC are prepared to trial the fuel?

Yeah, so I guess the initial plan of Valcor is to produce an MSAR product, because that's the simplest thing to do. We're using their heavy sweet oil, which is a very low sulphur, asphalt type material, to make a low cost alternative to low sulphur fuel oil or diesel, potentially. So that's the initial plan, is to produce an MSAR product, obviously a The key thing about that is that as part of their production process, if they're able to demonstrate that the carbon intensity of the products is lower than low-sulfur fuel oil or diesel as well, that's quite important because that gives you carbon credits we can utilise. But the initial market is to really focus on these industrial and power-type applications, first of all. The volumes aren't there yet or we don't expect the volumes to be there initially anyway to supply the marine sector other than maybe for the occasional trial volume. But in the past we've discussed this with MSC at a high level and in principle they're obviously interested in testing it if it meets the specifications that we'd need to for marine fuels especially around sort of levels of aluminium, silica, etc. which for oil sands is important to reduce But yeah, so if it is supplied to the marine sector, we've looked into that. There's rail supply that's very reasonably low cost to get it from Utah, either to the West Coast or down to the US Gulf Coast as well, which is the main markets for bunker fuel. But that's some way off at the moment. So initially we want to stimulate a local demand, get up and running with that. And then obviously as they expand, then we can start looking at the marine sector.

Okay. The next question is just on the status of the samples that we're expecting from Barco. Sort of why have they been delayed and what's the current expectation?

Yeah, I mean, we've had some interim samples in the past, right, which have not necessarily been representative of their commercial products. So, you know, we were quite specific with them. We didn't want to waste time with testing that if it wasn't essentially a good representation of what they'll be supplying. And in the meantime, they've also been changing some of the technology in terms of what they're installing, both in their oil sands plant and obviously the downhole, drilling program as well to overcome some of the issues they had initially. So that's now been settled. The pilot plans, as I mentioned in the presentation, is now up and running and producing a sample, hopefully several drummers of samples that they're sending across to us imminently for testing. And then we obviously then can do analyze that and provide a market spec for it as well that we can go out and start selling to end users. So that's all ongoing, but it has been delayed for sure, but not really down to us.

Okay. So that takes us on to SPARQL. There's a couple of questions here. The first one is just on the Panama power market. Are you aware of the Panama 0126 power tender with thermoelectric plants running on bunker or diesel that with long-term government contracts must convert to cleaner fuels within 36 months? Is this a target for BioEMS or BioEMS Zero with any of our Panama clients?

I mean the answer is yes, we were very much aware of that particular tender. Sparkle made us aware of it and that's one of the reasons why it was important to get the approval of the Panamanian authorities for both Emsar and BioEmsar to be considered as alternative fuels, basically to fuel oil and diesel, which they are. I think initially the pathway will be still to go the MSI route, first of all, to reduce the cost of generation there and be competitive, obviously, to LNG, which is the other source other than, obviously, renewable sources. But ultimately, bio-MSI is certainly seen as a viable means going forward as well. compared to energy and LPG, which are the main alternatives to them.

Okay. I don't think this is probably the last question because I don't think we've got time for many more after this. We were advised that the Panama fuel permits were expected to be received by the end of 2025. What has held them up? Are you working with the government on getting our fuels cleared to be used as cleaner fuels as per the Panama 0126 tender? Is this part of the permitting plan now?

Yeah, I'll probably semi-answer this in the last answer. But yeah, in terms of the actual approval of the alternative fuels, certainly MSAR and Bio-MSAR are now considered by the authorities as such. In terms of getting the import permits, we actually need to have now the supply logistics nailed down in terms of which refinery, which terminal are we going to bring in, which partner potentially in Panama might we wish to use. And then we can apply either ourselves or through that particular partner for the import permit of which we've been given the procedure that we need to follow, all of which seems to be fairly straightforward and meeting the guidelines that we're well used to in Europe and other places. So we're using internationally established guidelines to then get the fuel approved and imported. So we don't see any real holdups now in terms of other than bring the fuel in and make sure there's a commercial contract in place between buyer and seller.

Okay.

That's great, David. Thank you very much indeed for moderating through the Q&A. And ladies and gentlemen, thank you for your engagement this afternoon. I know investor feedback is particularly important to you. And Peter, I'll shortly redirect those on the call to give you their thoughts and expectations. But before doing so, I wonder if I may just ask you for a couple of closing comments.

Yes, thank you so much for listening in. Thank you for your support. Thank you for the many very good questions. I know there are a couple of questions that have come in on the platform live during our presentation. We will address them, as David mentioned earlier, on the platform latest by next week. So once again, thank you very much for listening in.

That's great. Thank you very much indeed. Ladies and gentlemen, we will now read our retro for feedback on behalf of the management team of Quadrise. We'd like to thank you for attending today's