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spk00: Ladies and gentlemen, thank you for standing by and welcome to the FusionFuel Green Q1 podcast. At this time, all participants are on a listen-only mode. If you require operator assistance during the program, please press star then zero. I would now like to turn the call over to your host, Ben Shores, head of investor relations. You may begin.
spk02: Thanks so much. Hello, everybody, and welcome to FusionFuel Green's 2021 first quarter update call. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements, including but not limited to The company's expectations or predictions of financial and business performance, which are based on numerous assumptions about sales, margins, competitive factors, industry performance, and other factors which cannot be predicted. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees of performance. I encourage you to read the disclaimer slide in the investor presentation for discussion of the risks that may affect our business or may cause our assumptions to prove incorrect. The company is under no obligation and expressly disclaims any obligation to update alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by law. In terms of how the next hour will proceed, we'll have a brief presentation by management before opening up the floor for Q&A. Please submit your questions in writing. If you joined online, you can do so on the webcast platform. And if you've dialed in, you can email your questions to ir.fusion-fuel.eu. So at this point, I'd like to turn the call over to Fusion Tools CFO, Federico Figueroa de Chavez.
spk03: Great. Thank you so much, Ben. And thank you, everyone, for joining us today. Today's a very exciting day for us. It's our first Call to the Update call as a public company. So you have on the call with me today also Joao Vannon, our head of business development, and Jaime Silva, our CTO. So we'll be doing the event, the three of us, providing different updates, and then we'll all be here for Q&A as well. In addition, we have also our chairman, Jeffrey Schwartz, on the call as well in case anyone has questions for him as we go. So first, what we will do is we have a few new joiners on this call. I'll start by briefly recapping what it's about HART, HART Fusion Fuel. And then we'll go on to provide a brief financial update before going into more detail on the latest developments of the fund. So then if we can go to the next slide. And the one up there. Okay. So on... Sorry, my apologies. focus on fusion side. So just to remind everyone on the fusion fuel story, we are a green hydrogen technology and industrial player. We provide both the technology for clients to produce their own green hydrogen, and also we will sell and provide green hydrogen as a product to industrial players. Our origin comes from the solar concentration industry. And at the start of 2018, we began the R&D process of creating our own electrolyzer solution. Through that, in essence, what was created was an integrated concentrated solar to hydrogen solution that is off-grid. We use a revolutionary miniaturized electrolyzer technology. You see an image there on the left-hand side. We have modular and scalable units. miniaturized electrolyzers attached, a couple of hundred of them, attached to the back of that solar panel you see on the left. And each of those units can produce around one ton of green hydrogen per year using solar radiation, up to two tons with day and night production. And therefore, it's a very modular and scalable solution for our clients. With it, we've been able to deliver one of the leading green hydrogen production costs in the industry. We have a team with a high degree of experience in this space and one of the highest Penn-based electrolyzer efficiencies in the market. And this is what, at the core, is a fusion fuel. So everything stems from this core technology that I've mentioned. And the two business lines that we have are both selling the technology and selling hydrogen as a product. Going forward, we'll provide quarterly financial updates along the lines of the tables in this presentation. Given our size currently and activity levels, we won't provide full quarterly financial results, but instead make sure that all key financial data is shown on a regular basis so that you can track our progress and see where the company is at any point in time. Currently, we're not showing debt levels in the charts that you will see in a few slides. As the company has no debt, business developers will introduce these elements into our financial updates, along with the production quantities as well. What you can see on the slide here is some highlights of the quarter. I will cover the financials in more detail in the coming slides. But I want to note that the first quarter was an incredibly busy start of the year, right from the first few weeks. We've already mentioned some of the projects here in our investor day in January, but I'll recap the main highlights. During Q1, we entered into two different MOUs to explore synthetic fuel plants using fusion fuel hydrogen in Portugal. One was with Grupo Industrial CL. which operates a steel mill and looking to use the carbon emissions from that steel mill. The other was with Magnesitas de Rubian in Spain as well, looking at the carbon emissions from the mining activities to also make then synthetic fuel plants. We established a partnership with CEES in Spain. That is the Association of Server Stations in Spain to actually look at introducing green hydrogen fueling infrastructure and supply across Spain. Linked to that one was the MOU with Zoilo Rios to develop green hydrogen for the first integrated green hydrogen refueling stations in Spain. And then lastly, we also announced the partnership with BGR Energy Systems in India to build a demonstration plant and start the business development activities in India. We've had some more recent business development updates, but I know João will dive into those a little bit deeper in a few minutes, so I will let him cover those. Next slide, Ben. Financial overviews, I want to note that we have revenues of around 500,000 euros related to the purchase and then subsequent sales of custom-made components to our production partner. So what you're seeing there is the revenues and the cost of sales effectively netting each other out, as this is the way that we are securing these custom-made components and securing the stock of these and then making them, putting them at the disposal of the production partner to then build the final HIPO solar unit. We expect that this back and forth will continue throughout the year. And this is of strategic importance to us because it makes sure that we are actually in control of the stock for these core components throughout 2021. Cash and cash equivalent at the end of Q1 was around 62 million, just shy of 62 million euros, up from 58 million at the end of the year. The increase was mainly driven by capital inflows from the conversion of around 1.1 million warrants, leading to inflows of 12 million US dollars throughout the quarter, I should say. The operating losses of around $6.5 million are effectively driven by a charge of $4.9 million related to share-based payment expenses that were part of the transaction. So these are charges related to the potential share and warrant issue obligations that was part of the business continuity agreement. These are not cash expenses. I think it's important to recognize the same way that we had as can be seen at the end of 2020, large transaction listing expenses, which were also not cash expenses. These are all related to the transaction. We'll note that these expenses are actually expected to continue throughout the year, and they will continue until end of June 2022, the 4.9 roughly $4.9 million each quarter. Other expenses beyond, so the net of that, roughly about $1.6 million, are related to, I would call our fixed costs of payroll, lease, insurance, and so on, of around $250,000 per month. Intellectual property transfer charges, again, part of the of the legacy sort of contracts pre-Business Combination Agreement of 250,000. We have two more quarters of those payments to go. And then project production upfront payments of around €1 million. So these are in order to secure the production units, a portion of the product charges we pay upfront. Then we start paying the remainder of the materials as we take delivery within a success fee at the end of the production projects. Lastly, the pre-tax income was positively impacted by around $15 million of positive movement based on the changes of the fair value of the outstanding warrants. This is simply reflecting the lower valuation of the warrant price versus the end of December, which then we can release those $15 million. So we will see that that will continue to move until the warrants are fully converted. And we will always break that out for you so that it's clear. Again, this has no cash expense, not a cash impact. But we'll transparently always carve this out so that people can follow and understand where the numbers are coming from. Next slide, Ben. So we currently have 13.1 million shares outstanding. The increase was driven by what I mentioned before, the conversion of around 1.1 million warrants during the first quarter. Currently, the firm has around 5.5 million tradable warrants that are outstanding, in case anyone wants to keep a track on that figure. If all of those 5.5 million warrants were converted, that would represent around a $64-65 million U.S. dollar capital increase. So as I mentioned before, we will look to provide this sort of financial overview every quarter. We'll also go adding items as the firm sort of grows. So when we take on debt, when we have substantial assets to show as well, we'll start including these and building these out. So as a foreign issuer, we're not required to do the very intense full quarterly financial results. but we still want to make sure that our shareholders have all the information needed to keep an eye and a track on how they're doing. So with that, I'll move on to the business updates and our 2021 milestones. So as we mentioned in our investor update in January this year, We have three core priorities and strategic priorities for the year. The first is the go-live of the Evera plant and the installation of that Evera plant. The second is the signing of strategic MOUs partnerships as well as hydrogen purchase agreements so that we are well on our way to execute and deliver on the business plan we presented. The third is the build out, then installation, and then subsequent go-live of our fusion fuel production facility in order to be able to manage with the expected much larger production numbers that we are targeting in the business class. So those are the three core priorities for the year. We'll now give you an update on how we are in each of those, and then towards the end, finish. So, as well.
spk05: Okay, let me start to thank you for attending our quarterly results presentation. The past months were especially active in the pursuit of our strategy to develop green hydrogen projects using our technology called EVOSOLAR, which defined as a priority the negotiations of MOUs and HBAs with some of the world's leading companies involving the oil and gas business as well as ammonia business. In several countries worldwide, the strategy for green hydrogen is already approved and under implementation, but there are still pending specific regulations that lead to delay to obtain necessary licenses and permits to develop the project. These constraints lead us to take the decision to anticipate securing the land needed to install our project in Portugal and Spain and start the environmental study that is the most important document for obtaining permitting licenses for construction and operations of green hydrogen projects. Our initial strategy was to develop green hydrogen projects and solidify our presence in southern Europe, mainly in Portugal and Spain, and at the same time in the north of Africa in Morocco. That increased interest from several other countries in the world, leading us to anticipate our international growth and start developing business in different geographies. Our EVO solar technology has a tremendous advantage when compared to other electrolyzers, since we produce green hydrogen directly from the conversion of solar radiation, allowing from one side to reach the highest efficiency and the lowest levelized cost of hydrogen, but also allowing us to develop projects in locations of green. This means that we do not need electricity from the electrical grid to produce green hydrogen, allowing us to install our projects in remote areas that do not have power capacity available. Additionally, our technology is most suitable for the regions of the world with higher levels of solar radiation, which are the regions where have been announced the biggest green hydrogen projects, such as Australia, Middle East, India, USA, and Chile. Now, Ben, can we go to the next slide, please? The Avro project consists will be developed in two phases. Phase one consists of the installation of 15 EVO solar units to demonstrate the production of green hydrogen directly from the conversion of solar radiation, and also includes purification, compression, storage system, and conversion to electricity using fuel cells and the necessary injection into the national electrical grid. The project is in advanced construction. The first EVO solar was commissioned recently and is in production. It's producing green hydrogen above our conservative expectations. Two additional units are already installed and the remaining will be installed and commissioned in the next coming weeks. The phase two of the EVO project consists on the installation of 40 EVO solar units, to demonstrate the ability to produce green hydrogen to be injected in the natural gas pipeline from the Evera city and also supply green hydrogen in bottles to industries and at the same time to hydrogen refueling stations. The new municipality of Evera finally approved the construction license and we will start construction during next week with the aim to finish the installation by the end of July. Now we would like to show you a video of the current installation of Evra Project. Thank you. Now a bit of a project overview, fusion fuel business activity starting in Europe, more precisely in Portugal. We are running to commission the phase one of every project to invite potential developers to come and visit the plant under operation and to request an independent engineer report of the performance of the plant. We are moving forward with our initial strategy to develop five green hydrogen projects in Sines. And so we are currently developing three projects out of those five. We aim to produce green hydrogen to be injected in the natural gas under the national strategy for hydrogen, to produce green ammonia to be used as a hydrogen carrier to be exported to the north of Europe, to be stored in big bottles to supply industry, and to supply for hydrogen refueling stations and the development in Portugal. As mentioned before, we are securing more than 300 hectares of land and we are starting the permitting process. This represents around one-third of the initial CNES project that we expect to install until 2025. In terms of funding for this project, we have submitted the first project to European funding for which we expect to have an answer until the end of July. We are also part of the Portuguese projects that were submitted to the European Union organization called IPSEI, Important Projects of Common European Interest, which will give special conditions and grants to the development of green hydrogen projects. Recently, in the last three months, we started our activity in Spain, where we are under negotiation with some of the most important oil and gas companies, as well as electrical utilities to develop green hydrogen projects. We are also developing several projects which are under negotiation for the same use as in Portugal, but with additional use in the production of green synthetic fuels. We have two projects. One is the project of the Grupo CL in Badajoz, and the other one is the Magnetitas project in Malucas, Portugal. will have the production of green hydrogen to be mixed with CO2 to obtain green ethanol and green jet fuel. The two projects I mentioned will be submitted to European funding province available for decarbonization. We are also under negotiation to secure more than 1,500 hectares of land to install additional projects, most of them to produce the green hydrogen to be injected in the national gas pipelines of Spain. We established a strategic operation for the installation of several hydrogen fuels, and we expect to announce the first EPC and HPA contracts soon. At the same time, we started Greece. In Greece, we started negotiations with the most important oil and gas companies, as well as electrical utilities, to develop green hydrogen projects. We are negotiating installation of a demonstration plant that will be announced soon. In Morocco, negotiations are undergoing to produce green hydrogen that will be used in the production of green ammonia to be used for fertilizer industry and to be exported as hydrogen carrier for the north of Europe where will be cracked to obtain green hydrogen to be mixed with natural gas and be injected in the natural gas grid. Then we decided to go worldwide. We started in the Middle East, where we signed a cooperation agreement with a company that is one of the leading international contractors in the world, who has a strong position in the Middle East. Negotiations are undergoing to produce green hydrogen in United Arab Emirates, in Oman, in Qatar, and in Kuwait. More recently, we started a very important operations in Australia, which is a priority market for our company due to the favorable conditions in terms of solar radiation that allow producing green hydrogen at the lowest levelized cost of hydrogen in the world. We signed a head of agreement with the Australian oil company to develop a strong business relation, starting with the installation of a demonstration plant. We are under negotiation for the development of several green hydrogen projects, mostly located in Western Australia, which is the region of Australia with higher solar radiation. At the same time, we started our internationalization in India, where we signed an agreement with an important PC contractor called BGR Energy to develop green hydrogen, most particularly in the regions of Rajasthan and Gujarat. This cooperation will also be involved in the production of green hydrogen to be mixed with CO2 from several coal-fired plants, owned by the Indian utility called NTPC to produce methanol. We are starting our operations in the US. USA is a very promising market for the development of green hydrogen projects. We recently incorporated Fusion Fuel USA with the aim to start developing projects in the coming years in the USA. Last but not least, we started negotiations in South America, more precisely in Chile, to install hydrogen in the region of Atacama. Chile has, and more precisely the Atacama Desert, is the region of the world with highest solar radiation and consequently will be the place where we will produce the cheapest green hydrogen. Now we would like to highlight some of the important agreements we have signed with the following world leading companies. First of all, we have signed an MOU in Spain with one of the leading companies, EPC companies in Spain, called Elecnor, to develop our EVO solar technology. Elecnor is one of Spanish leading business groups in infrastructures and renewable energies. It has an experience of 60 years and has a presence in 55 countries. This partnership with Elecnor is very important, not only to develop our activity in the Spanish market, but at the same time to develop projects in the countries that they have a strong presence. Then next slide, please. We signed a cooperation agreement with a company called CCC. The name is Consolidated Contractors Company. We signed an agreement with this company to develop demonstration plants to produce green hydrogen in Kuwait, Oman and Qatar. CCC is a global diversified company specialized in engineering and construction and has become one of the leading international contractors with global commercial footprint. The Middle East represents a significant opportunity for fusion fuel because of the high levels of solar radiation that allows to produce green hydrogen at very low cost. Now the next slide, please. Recently we signed a head of agreements, fantastic cooperation we signed with ANPOL. We signed a head of agreement with ANPOL to install a demonstration project in ANPOL's lichen refinery site. Installation is expected over the next 12 months and will lead to joint business development opportunities in Australia. And Paul is an Australian leader in transport fuels and has recently announced a sufficient future energy and decarbonisation strategy. Australia's abundance of solar energy makes it one of the best locations for our EVO solar technology and for the production of very low-cost green hydrogen. Now I would like to present to you Jaime Silva, our CTO of this field.
spk04: Hello, everyone. To be able to produce to the project that business development is making or is starting, we have to increase drastically our manufacturing capacity. We closed very recently the agreement for the facilities of our future first manufacturing facility. It is located in Benevent in south of Portugal. It has around 15,000 square meters of area. In the first, in 2022, it will have a capacity of delivering around 100 megawatts. But it will have space enough and equipment enough to be scalable to reach the 500 megawatts of capacity to deliver in 2025. These facilities are in a location that is able to apply up to 25% of funding support from the government on all the investments made in the production and all the renovation. The renovation of the factory of facilities will kick off immediately. and it will be a fully automated unit. The people we expect to have in 2022 working on the manufacturing, it will be around 90, no more than that, to reach the objectives of 100 megawatts of capacity to be delivered. So the installation of the production equipment that is being built will start late summer and we expect to have it to start the first production first units to come out in the first quarter of next year then next slide please so in terms of research developments during this first quarter we are we have planned several projects some of them will be present in the end of this year, beginning of next year, for the evolution of the technology. We have our research and development departments being increased drastically, and we are also closing partnerships with strong research institutes for several specific areas, like Fraunhofer, one of the biggest research institutes in Europe, in Germany, and we are also intent to start a partnership in other more specific areas like hydrogen storage and that we intend that we are starting with in australia great thank you so go to the final slide then almost
spk03: So now just to wrap up, I'll finish again with the 2021 milestones, especially in this very important sort of first year for us. Just as we heard and we've seen, the Evera plant is well and truly underway. And within a few weeks, we'll have phase one within in the bag and in more than sort of a couple of months we will be there with phase two as well um so the and the initial results we've seen from from the units we have up are incredibly promising and actually outdoing our expectations um on our sort of second priority of mous and hpas you heard from as well we are well and truly underway To put everything that Joelle said in perspective, in January we said that our entire pipeline, not committed orders, but pipeline, was around four times bigger than what the business plan projected. So we were pretty comfortable on being able to still execute on the business plan. In only about three months, that number has gone from four times the business plan to around six times the business plan. so the market is developing very quickly and we're we're certainly keeping keeping up with it and in our business development team as well production facility as you just heard from Jaime location set renovations starting very soon installation summer and we are well and truly, I think, on the way to these three core milestones for 2021, setting us up exactly on the right path for the coming years. So with that, I want to thank you for listening to the three monologues. And now we hope to hear from some questions from you guys as well. So Ben, I'll pass it to you for Q&A.
spk02: Yeah, thanks, Federico. I'll remind folks to get their questions in either to ir at fusion-fuel.eu or on the webcast portal here. The first question is, I guess, asked for perhaps to Jaima to start. Do you see any risks that something that worked well on the small scale might become problematic when deployed at utility or industrial scale? And if so, what problems might, what might those problems be?
spk04: yes the the units we have and we have validated in the past and make the degradation and all the analysis in the last year were individual units not connected in networks the question is the evo solar you saw working in the video is already full connected and is using the network being supplied at the industrial scale in a power plant and the hydrogen is also flow directly to the centralized point in this misusing centralized point. This means that in fact, the units that we have already working on the field, it's already exactly equal to the units that will be in the full power plant. The main challenge we had during this process that in fact has a challenge from passing from a research unit, prototype unit, to a PowerPoint unit has been overcome. So right now we are going to replicate more quantities, but the main challenge has been overcome and we are ready to jump to the next level. So we don't forecast any additional situations than the ones that we have overcome this trimester.
spk02: Great. Thanks, John. Question here, perhaps stick with you. Why is the integrated solar electrolyzer solution better than using a large-scale centralized electrolyzer and then combining that with renewable energy from the grid? Would you say that a miniaturized electrolyzer is more efficient?
spk04: Yes. In fact, if you take a very cheap solar PV power plant, You transport the energy and convert it in with, I will say, with a tier 1, 19, 21, 25% of solar conversion. And then you have to transport the electricity, convert to AC, convert to DC, transport it to a centralized electrolyzer, then convert it again. when we have a small miniaturized electrolyzer connected to the cell and taking advantage of the heat, the strong heat generated by the cell, you kill all the inefficiencies on the system. In fact, we are able to have at the EVO level a solar to hydrogen conversion efficiency of 26.8. It's extremely higher than had the full change of levels to transport the energy and convert it to hydrogen and we have also another strong advantage is making it smaller making it miniaturized and rebuilds how the electrolyzer is constructed and designed is designing a completely different approach than the traditional specs allow us to have a small unit completely full automated, possible to be automated, and extremely low cost. So when we put both things together and you consider the performance of a power plant and in capex you have to do to make it work, you reach much lower hydrogen costs. then compare it with PV or with a centralized electrolyzer.
spk05: Thanks, John.
spk02: Next question for perhaps Joao or Federico. In terms of the pipeline growth from 4x to 6x, how much of that is more demand from existing counterparties versus incremental demand coming from new counterparties?
spk05: I can answer that. In fact, our business plan was prepared only for Fusion Portugal, let's say for Southern Europe and Morocco demand of green hydrogen. Of course, we knew by that time that the world was doing first steps, more than one year ago. We knew that there would be plenty of opportunities worldwide, but we never reflected them in our business plan. So today, of course, most of what we are negotiating comes from, for instance, Australia and Middle East, where the opportunities we are negotiating today are really big when compared to the opportunities that we have in Europe, according to the initial business plan. Thanks.
spk02: Thanks, Joao. Any plans for projects or initiatives to address the transportation market in the future? I think you could talk a little bit about Zoila Rios in greater detail or others.
spk05: Yes, today, so the hydrogen refueling station for fuel cell electrical vehicles is growing, of course, according with the demand. So today, there is not too many vehicles in fuel cell, hydrogen vehicles. So we are negotiating with several entities. We made this agreement with CEAS, so it's the association of the gas stations in Spain to install hydrogen befueling stations. There is a strategy from the European Union to have green highways, to connect the cities, the capital of the countries, imagine from Portugal to Paris or Milan or wherever and so there is a lot of opportunities and we are of course under NDA but we are negotiating with several other oil companies to install hydrogen refueling stations in these green highways apart from smaller installations for more for city consumption of future hydrogen vehicles.
spk02: Great, thanks. Question back to Jaima. How many hevosolars does 100 megawatts of electrolyzer capacity equate to?
spk04: Sorry, can you repeat?
spk02: Yeah, it was a question about how many. So for next year, you mentioned that the production facility will have a capacity of 100 megawatts. How many hevosolars does that equate to? Around 4,800 megawatts.
spk04: Anyway, the manufacturing capacity, it will be installed, prepared already for the delivery needs in 2023 and 2024. So it's designed for the full manufacturing capacity, but we will not have all the equipment installed. We have just the equipment necessary for 2022 because the line is already designed and installed in thinking of the manufacturing capacity of 2024. This means then when we decide to make the additional equipment, it will be a very fast operation, just delivery of equipment because the line will be already prepared for the manufacturing capacity of 2024. So the different places for the equipment and the transportation of the materials will be already there. And we will jump very fast to the next level of capacity as soon as we have green light from the business development. So this means that if the business development sells more projects sooner, we will jump sooner to the next level, and we will not wait too much time to the increment of capacity.
spk02: Thanks, John. A couple questions here for Frederico around expected revenue, when you'd expect to start generating revenue, and how much.
spk03: Sure, certainly. So, in the business plan, we noted that we actually expected to start making revenues in 2022 with a total revenues of around $45 million during that year. We will likely see some modest revenues in 2021 already, even excluding what we've shown today of the revenues due to the production stocks and material that's provided to our partners. simply because Evro will be up and running and will start generating some modest revenues already in the second half of this year. The reality is that where we expect more significant revenues is to be actually towards 2022 with around $45 million. That said, 2022, we still expect to be posting a loss, an operational loss for that year. given the fact that we want to significantly invest in developing our own hydrogen farms. If we were to sell our technology already fully to third parties, we would be breakeven and likely breakeven in the black already in 2022. But strategically, we are building our hydrogen farm portfolio.
spk02: Thanks, Federico. Maybe we'll stick with you here, or Jaima. A question around material impact on the levelized cost of hydrogen coming from increasing polysilicon prices or perhaps other raw materials.
spk03: Sorry, just the impact of increasing raw material prices on the levelized cost of hydrogen.
spk04: Yes, that's right. We are facing in all industry and in all chains be there from noble metals, be there for silicon, be there for steel and electronics, semiconductors, steel, aluminum. We are facing more than increasing costs. What we are facing right now is a shortage of materials. We have big groups of saying that they are not able to deliver and they will delay and they do not have dates for deliver or whatever. So we have reinforced our purchasing departments. We are testing much more alternatives for each item to have them available. And it's one of our internal objectives to secure raw material, something just secure it to the, to not have a strong delay in the deliveries and in manufacturing. Regarding the impact on costs, I would say that the main component that is bringing some impact is not relevant. It's not huge impact, but it's some impact is the iridium material, iridium that we use in our product. All the remaining steel mean is still the main problem. It secures the deliveries and not properly the impact on costs. But again, the department has been reinforcing and we have an internal task force to increase the number of companies that we have qualified in each item in order to try to reduce the risk of being without materials. Some of them are very complex. For instance, semiconductors. And we have a lot of internal control equipment on the system. Semiconductors is one of the main issues. There are not so many suppliers qualified right now. but we have increased our purchasing department in order to face this problem that is not yet completely understood when it's going to reduce the risks or be finished.
spk02: Great. Thanks, John. Question here for Federico around capital requirements. How long is your expected liquidity runway based on current cash position? an expected capital need going forward? How much additional runway can capital inflow from warrants provide? What are the biggest risks to the liquidity outlook?
spk03: Certainly. So in terms of the runways, certainly the warrants are the sort of biggest unknown on that factor. The simple way to think about it is that if the outstanding warrants were to convert, we would not require any additional capital in order to execute the business plan exactly as we stated in Jan. If we assume that the warrants do not convert, we have enough operational runway to take this well into 2022, likely even into 2023. The main drag or consumer of capital will be the investments into our own hydrogen farms that is something that we could always take our foot off the accelerator if the capital positions are required and instead focus more on the technology sales and making the immediate short-term revenues rather than the longer term long-term hydrogen sales so from a capital position for our existing business plan we say we have enough runway certainly to handle it with the warrants, enough runway to manage the situation if the warrants are not converted. The only caveat I will note is that as we saw from all of the exciting developments that Joao and his team have been up to, when we start going further afield and if we start to look to more aggressively expand into new regions, that capital position could change. So that will be something that we are constantly analyzing, and as these strategies for those new emerging markets continues to develop, that will be something that we will be keeping an eye on, on what the capital requirements are.
spk02: On the subject of those new markets and new opportunities outside of Southern Europe, Due to the potential demand from large markets, Australia, India, the US, how quickly can you develop a production facility to supply those markets?
spk03: So the view here is that obviously the most important is the current production facility that we have being built during this year. We believe that when we were to take the decision of going live, within one year we would be able to have a production facility in a new region installed. So, Joan, do you want to add?
spk04: Yes. The industrialization here has been built in a modularity way. This means that it will take six, eight months to develop each model, but to repeat it, It will be just the delivery of the equipment. So this modularity allows us to build a factory after it is built, tested, and everything fine adjusted. It will be much faster to duplicate because the models are already established, finished, and approved. So we will not take the same time to build the second factory or to build a second line like we are taking the first one.
spk02: Thanks. Uh, sticking with you, John, you said that the units are actually, I think Josh said this, that the units ever are exceeding expectations. Can you elaborate a bit around that? To what extent is it exceeding expectations? What is performing better?
spk04: Yeah. I would say that the results that we are having in Evora are in line. Exceeding expectations, the word exceeding expectations is that is creating as the possibility after some tests and analysis to increase the throughput of the product. Right now, we have a throughput of each model of 3.90 grams per hour at 1,000 watts per square meter of radiation. And we will probably be able to increase it after the third power plant will be delivered. And that will give us an additional small reduction in cost. Right now, what is expected for Everest even before finishing it, is that we will call independent auditors to emit reports on two directions. One, the performance of vivo solar and the radiation. So for this radiation, it will produce this hydrogen. And second one is the security issues, because one of the main bottlenecks to the business development side is the licensing. The tracker is ATEX, not ATEX. It requires some sort of certification or not of the location and whatever. And so we want to go through very fast with the auditing reports on the performance and on the security issues in order to allow to speed up the business development in some more complex areas
spk02: like like we are facing south of in south of europe thanks a couple questions here about ample and the potential for a joint venture structure in australia uh how are how are you thinking about commercial opportunities in that region are you contemplating a partnership with tesla which has also partnered with ample thanks ben uh at the moment we we have
spk03: Just early days in our partnership with Ampol. So still defining on what that comes and what that brings. Just to confirm here, we have not had discussions with Tesla. I have seen a couple of questions come through on that front. But of course, for us partnering with Ampol, who's already the the leading transportation fuel player in that market is more than we could have wished for. We're extremely excited about that opportunity. And we see the opportunity in Australia to be significantly broad. So not only in hydrogen for transportation fuels, hydrogen for some of the heavy industry sectors that operate in Australia, also hydrogen as a potential ingredient for some of the sort of potential future fuels like ammonia for heavy transportation, be it cargo trains and boats and so on. And eventually also hydrogen as a ingredient for other chemicals that will be exported from Australia. So we see the partnerships in Australia incredibly broad tones. Anything you want to add?
spk05: I just wanted to add that the design of our hydrogen refueling stations, mainly that we are developing for Spanish markets and Portugal, and we will develop in the future in Australia for sure. As mentioned, we produce the hydrogen off-grid. And in some hydrogen gas stations far away from grid, from the national electrical grid, We are designing a solution to produce hydrogen using solar radiation and we will store this hydrogen and we'll have the ability to produce electricity to charge the electrical cars in gas stations where there is no electrical grid available. So this means that our solution is for fuel cell electrical vehicles using directly hydrogen, but at the same time, we're going to use the hydrogen with fuel cells to supply electrical battery cars, such as Tesla.
spk02: Yeah, getting to the top of the hour here. So one more question before we end the call. Does Eason Fuel have expertise with regards to applying for subsidy programs, whether it's the EU Green New Deal or ECB Green Investment Fund for infrastructure projects.
spk03: Certainly. Thanks, Ben. So definitely this is a very important factor in this industry and only going to grow in importance, not only in Europe, but also in other regions, particularly also as we start to see items emerge in the US. Currently, we do have some limited expertise within fusion fuel, and we are expanding that expertise as we speak. But in addition, what we have done is we have partnered up with several players who are, which is their core bread and butter, is to actually support firms in navigating what can be pretty complex submissions for governmental programs. However, one of the points that I would note is that, or two points. First, the business plan that we shared in January did not include and did not assume any subsidies already within it. And I believe it's fair to say that there is no projects that we are looking at where we have built them on the premise of receiving subsidies. The projects we are pursuing are projects that we believe in the validity of the projects as a whole. So the, any programs that we can be a part of will be a, let's call it the cherry on top. But what's exciting that we believe of our current pipeline is that it's robust regardless of the governmental aid.
spk02: Okay, thanks for that. And with that, I think we'll end our Q1 update. There's a lot of engagement in the Q&A session, so if you didn't get your question answered, we apologize. So reach out to ir at fusion-fuel.eu, and we'll do our best to get back to you. So with that, we'll say goodbye. Thank you for your support, and we look forward to speaking with you in the future. Goodbye.
spk00: Ladies and gentlemen, so that concludes today's presentation. You may now disconnect, and have a wonderful day.
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