Quadrise Plc (QED) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Quadrise Investor presentation. [Operator Instructions] Questions are encouraged and could be submitted at any time using the Q&A tab just situated on the right hand on your screen, simply type in your questions at any time and present. The company may not be in a position to answer every question received during the meeting itself. However, the company can review questions submitted today and we publish responses whereas appropriate to do so. Before we begin, we'd like to submit the following poll. And I'm sure the company would be most grateful for your participation. I would now like to hand over to nonexecutive Chairman, Andy Morrison. Good morning.

Thanks, Mark, and hello, everyone. Thanks for taking the time this morning. I'm here with Jason Miles, the Chief Executive, and we're here to talk about Quadrise Plc. Particularly, we're here to talk about energy decarbonization and the -- specifically the sustainable marine fuels. We've all heard a lot about sustainable aviation fuels over the last few months and years. And now we think it's time for sustainable marine fuels to have the same kind of airtime, and we're going to be talking about that today. We changed our ticker last year, as some of you will know, to QED, where QED, stands for energy decarbonization. And I also had to look it up as some of you may have had said, quod erat demonstrandum is what it stands for. And we've all heard about it. And it means what was to be demonstrated. And we are here today to demonstrate that we've got a significant contribution to make and to encourage you to support us -- to continue to support us on our journey. And our strategy is to work with world-class partners such as MSC and Cargill. And we're now working on finalizing that finding agreements for vessel trials ahead of commercialization. Our milestones for this year include establishing the supply and logistics for those trials and getting into commercial revenues from MSC and in Morocco and Utah. And those of you who know us well will know that Utah has taken much longer than we really intended or wanted. But we do still believe you'll hear, when we talk about it a bit more later on, we do still think that, that is a pride that's worth going for low sulfur heavy fuel oils. Could you turn the side, please? We really hardly need to talk to this slide. Although it says, it's an important part of the presentation in the sense that the completeness, but it's a global imperative. We absolutely have to reduce the carbon footprint -- and it's a huge opportunity, a global priority. It's never been clear that shipping needs to reduce its carbon footprint. And we will show you today, how our solutions are cleaner, cheaper, simpler and safer and above all, that can be deployed right now. And I'm going to hand over to Jason, who's going to take you through how we are going to deliver on our plans, and I'll be back with you later.

Thank you, Andy. Yes and just to recap in terms of what we do as a company. The company was really formed on the basis of providing a lower cost version of fuel oil. Fuel oil is itself today, a blend of heavy residual material, the bitumen viscous material that comes at the bottom of the barrel. And that's been down with distillates to put in the refinery generally today to provide a fuel, which is -- can be used by the green industry and other sectors. We make a cheaper version of that by just taking the residual matter and suspending that in water to produce oil-in-water water emulsion, which itself burns a lot better than conventional fuel oil and it's extremely stable to use. So we can use it as a -- almost as a drop-in solution to heavy fuel oil. And then taking that technology one step further. A few years ago, as I'm sure many of you recall, we launched a product called BioMSAR which itself is a mixture of biofuel today, which is renewable glycerin, supplier initiative by Cargill. And then we're blending that with conventional hydrocarbons, residual material or even heavy fuel oils to produce a biofuel bioMSAR. So that's our first renewable version of products, which provide today, about 25% lower CO2, potentially higher, if you get the higher engine efficiency, which we aim to demonstrate. And then taking that concept one step further, we have a plan in place by 2030 to offer a completely sustainable BZ -- B100 rather biofuel bioMSAR Zero, which has basically 0 hydrocarbon in it, and we're doing that by blending oil-based biofuels with water-based biofuels. And there's some work ongoing as part of that, we'll tell you about it a little bit later. Now in terms of the solutions that we offer, they're designed to be cleanup that they burn much better than conventional fuel. They burn more efficiently, so you get better engine basically lower fuel consumption for the engine, which produces lower CO2. And then by introducing the biofuel components, you can increase CO2 reduction capability as well. They burn because of water based in a much lower temperature. So you get lower emissions of NOx, visible smoke. And they're pretty quick to implement. So basically, where our systems really win is we're basically using modular technology from the asphalt industry, which is low in capital cost. So that provides a pretty quick play payback time. So each of our modules cost about $5 million to $10 million to install in the refinery, and they paid back in less than 12 months. They are very simple to install in the refinery. So that takes sort of 6 to 12 months depending on really the permitting is the leading factor there and they're scalable. So each module provides about 350,000 tonnes a year of the biofuel. So they're pretty easy to implement and each module can supply just over 10 container ships. And then we have a miniaturized version of that technology to go onboard the ships as well. They're much safer to utilize. They're water-based. So they have a lower hazardous -- lower sort of a hazard rating. In terms of their utilization, they're less impactful for the [indiscernible] in terms of you're operating at a much lower temperature. So there's this hazards for them to deal with. There's no gases like there would be to deal with in terms of LNG and ammonia and they're stored and handle a very low ambient conditions as opposed to having to heat up the products to high temperatures because they're inherently low viscosity, the oil in water emulsions. And then in terms of the people that we have to hand and the partners we're dealing with, as Andy mentioned before, we've got a very good, strong team of specialists. He sit there on the top left, one of our head of operations there. He's been involved with me in the emulsion fuel business for many years. And then we have a number of other energy and oil especially in terms of the Board. A number of people that Shell background. So -- and we're partnering up with some very large companies. [indiscernible], we've been working with formerly actionable for since inception and then larger companies with MSC. And now with the Cargill, sort of role for the rollout of the marine and the biofuel business. And then in terms of the background of the company, we have a very strong IP position as well in terms of the written IP for MSAR, but also a growing number of patents now for the bioMSAR development and more recently incorporating some of the bioMSAR derived sugars with a pipeline of other patterns that we sort of plan to launch during the coming years. In terms of why people would look at the technology initially, I guess, looking at the refinery, the base application for MSAR, basically, what happens in the refineries by not having to blend distillates into the residual materials. They can save that distillate for sale. And that really yields a value for the refinery, which provides an increased margin. By the same token, depending on the biofuel that you use, basically, if you take a low-grade biofuel and you can incorporate it and sell it as a marine biofuel, there's a premium to be made there as well. So there's an increased margin, whether you're supplying the residual material or the biofuel component. And that itself then provides a subsidy that sit in place. But once you emulsify it, you can deliver a lower cost energy for the end user. If it's -- if the engine -- if you're basically running the fuel in a diesel engine, then they get a lower fuel consumption to save some money. And overall, that increased margin paid for the saving -- or basically, there's a saving on the ship that basically incentivizes the user to take the fuel. For the -- to modify vessel takes costs around sort of $0.5 million. So the MSC Leandra, that we're going to be doing the trial on. That's got a few fuel boost unit in which for the emulsion fuel that's run separately to the conventional fuel system. So it means you can easily switch between fuels. That cost about $500,000 is a very quick payback as you can see in terms of the savings per vessel -- for the larger vessels. And then in terms of how we make money, which either via licensing model where we supply the equipment or on a tolling basis, which is what we plan to do with cargo for the MSC trial, to give you an example. And the tolling model totally provides a higher sales and margin because we are providing the equipment ourselves and then we're operating it as well. Obviously, we make a slightly higher margin than on the additional services provided. So -- what we're looking to do is, based on this example is scale this up to a level where we've certainly members of the team have achieved this before. And to do that, obviously, we need to sort of get some of these projects on the road. Now Behind the scenes in terms of what's helping the technology, there are obviously new regulations which are coming in to the sector to decarbonize the marine industry. And that's really being led by the European Union. Firstly, the ETS system, the emissions trading system that was scheme in Europe is basically setting a carbon price. And what it's done is it's drawn the maritime industry into that particular sector as well to look at their tank to our ignitions and start to charge them based on the baseline value based for their emissions -- the incremental emissions that they're looking to basically generate in European water. So what that means is an operator in Europe will have to basically declare their misses of CO2, when he's doing European Waters, and they will have to have in 2024, that have to do basically get allocations to 40% of those emissions. And then that scales up over the next 3 years. So that starts to cost people operating in Europe cost them money. And then in parallel to that, there's another regulation called fuel EU Maritime, which looks at well [ to way ] emissions and this is forcing shipowners to them, start to cut their emissions of greenhouse gases as well. It's a reasonably light regulation compared to the HDS, but the net starts to get inherently worse after 2030. And then the IMO in parallel, looking to basically bring in regulations as well, pretty much to mirror what's happening in the EU or albeit a slight lag, but the IMO covers the global area, not just obviously European waters. And then what we're seeing outside of Europe is the U.S., some of the ports in the U.S. now and places like Singapore are starting to look at implementing their own regulations as well, all of which means in the next decade, that there's going to be a growth in the use of lower carbon fuels. And specifically, in our category, we certainly see this is going to be a decade of really increased use of biofuels going forward. And there's a mandatory even though biofuels are more expensive today to the tune of sort of 50% to 100% more expensive depending on the biofuel you're using to blend. Basically, what that means is that there's an additional cost, but that's subsidized by the value of the CO2 reduction. So if you look at an example here, where we've got 1 module supplying 11 large ships, container ships, if they supply with bioMSAR, they're saving a fairly large amount of CO2 because of the 25% to 30% reduction in CO2 emissions that bioMSAR offers -- and that basically saves them money that they would otherwise have to spend only some of European Union ETS allocations. In this example using some [ 90 fillers ] a tonne. And the expectation is that allocates a cap on trade system. So as the system develops, the availability of these allocations will become more limited and that will start to drive the cost of compliance and the cost of the value of CO2 will become more expensive going forward. So overall, what our plan is now is to scale up the implementation of our systems around the larger bunker hubs. So we have a number of projects that were ongoing that really that sort of fit into that mold. So obviously, the large project that we have with MSC is around putting a system into the sort of [ Arrow ] Amsterdam region and the Mediterranean. So in the [ Arrow ] zone, we're focusing on Antwerp and putting a facility in there with Cargill and with a MAC2 -- and then in the Med, we're looking at some of the refineries there that can supply our industrial clients in Rocco, but with a view then that there's additional fuel that could be made to supply the marine industry out of the med with the project we have in Utah with Valkor. Initially, we're focused on local users for that facility. But the ultimate objective is to supply a lower carbon, lower sulfur fuel for the marine industry there, both in the form of MSAR and bioMSAR. And then we have some what we call Tier 2 projects, smaller projects that we're working on as well in Panama, which is a power plant there that can utilize the fuel as an alternative to fuel oil. But with a view, again, Panama is a pretty big bunk hub for the chips going through the Panama Canal. And then in Singapore, we have basically a Southeastern refinery that's probably near by that particular facility. Singapore is the world's largest bunker hub that's around today supplying the -- most of the marine fleet with large amounts of fuel oil and more importantly, now increasing amounts of biofuel. The biofuel business there is really taken off this year. So there's an increasing amount of biofuel supply out of Singapore. So we're dealing with the refinery, it's fairly there, a very large terminal that could offer supply to that particular hub as well. Now in terms of where we are with our particular projects, we are looking to try and get -- to close out the various agreements by the end of this month. Obviously, that doesn't leave us many days to do that, but that's certainly what we're looking to achieve. These are binding agreements. There's a freeway agreement between ourselves, MSC and Cargill and then various other bilateral agreements with cost of fuel supply, tolling and also a services agreement with the terminal as well. So the current phase is literally with the lawyers to bouncing that was in force at the moment to try and finalize these agreements to get going. And then in Q2, that allows us to deploy our facility to site. The permit approval is expected basically during the next month or so. So that's MAC2 actually presubmitted that application before sort of the end of -- towards the end of 2023 to try and advance that process. So that won't delay us. And then the plan is sort of the beginning of the -- to the middle of the year, we're looking to then start delivering fuel to the MSV [indiscernible] which is now ready to take the fuel will be deployed to -- Antwerp on a regular basis. And then we commence with a proof-of-concept trial with MSAR prior to then doing the first proof-of-concept then with bioMSAR so we can look at the 2 voters of the fuel back to back. The vessel has previously used MSAR before, but has been modified slightly, so it'd be interesting to see how MSR performs again, on that vessel. And then for the first time, basically the use of bioMSAR in a 2-stroke engine, which we're extremely excited about. And then [indiscernible] goes well with a proof-of-concept with bioMSAR, which we fully expect, then there will be an operational trial and that's as it was before when we supplied the Maersk vessel over a period of sort of 6 to 8 months. So that's the plan for the letter for that particular trial. Obviously, towards the end of that particular trial, we'll be looking at commercial supply. And then there's opportunity also to get at the midpoint to get an interim LONO there as well. We should advance commercial discussions with senior as well. And then after that, then there's a wider commercial supply from that facility as I alluded to in the previous slides, 1 MSO unit can supply up to 11 vessels. So we're looking to obviously maximize the output of that particular facility for Antwerp. In parallel to what we're doing with MSC, and there's obviously some work going on also on the NetZero product, the bioMSAR 0 products, where we're looking to look at alternatives glycerin to supplement these, if there's a limitation in the future with glycerin, we need to have some alternatives there. So we're looking at sugars that are derived from bioMSAR both sort of conventional sugars and also looking at sort of pyrolytic sugars as well that come from the pyrolysis process. And then we're also looking at methylester type products, which can come through the production of sort of fatty acids and biodiesel. So what we can do is combine those products together to produce a product, which has a completely -- is a hydrocarbon-free, fully bio-based from sustainable sources. So with taking that from the lab situation 3 stations engine test doing next -- next 6 months, obviously, contingent on the how much funds we have to play with at that time. And then the blend-on-board process as well that technology, we have a blend-on-board unit that we're looking to deploy on a vessel with a partner there. It could be MSC or it could be others. So we're looking at deploying that particular facility, which we're also using for blending applications and some of the other trials. So that unit will usefully deployed. And then looking at the other projects that we have. Andy mentioned Valkor before, obviously, it's taken a little bit of time for them to get to the point of drilling. We expect their drilling permits will be awarded pretty soon, and that will allow them to start drilling in the second quarter of the year is our expectation. That will generate samples, they're looking further, test further at QRF once they've processed them through their technology that they're looking to deploy and that drilling program will also enhance their ability to raise project finance as well, at least for the projects that are looking at the downhole application. Although they do have other projects, which are also looking at oil sands as commission oil sands as well. So once Valkor received the project finance of [ $15 million ], and then that triggers then the payment to us of the site license agreement, which we've already signed with them. Which gives us income of $1 million with another $0.5 million then of income once we supply the equipment to site. And then that provides in, obviously, the ability to supply fuel for trials. The oil will be flowing at that stage, and we'll have the capability then of providing sort of trial quantities to local users, [ albeit those ] power stations and [ albeit they ] sort of local users of sort of fuel for diesel engines. And then in Morocco, we concluded the trial at the end of last year. Finally, the client would the reports to the client, which they were happy with. And now we're looking at finalizing the agreements -- putting the agreements in place to provide commercial supply to that particular customer. And in parallel, conclude terms for sort of paid trials with some of their other sites as well. So the client will pay for the site trials that we'll be looking to run on their facilities there. And then towards the end of the year, the second half of the year anyway, we'll be in the preparation mode to get everything installed in a refinery, concluded in the other trials that are needed nearby and then look at commercial supply in a year's time. And then in Southeast Asia, the refinery there, we're looking to conclude terms there to do a trial. That trial itself, if it's successful, can then morph into commercial supply. So that system is designed then to be able to run on a commercial basis in the refinery to supply fuel for the refinery -- for the refinery furnaces and thermal applications there. And then in parallel in Central America, we have a power station that's looking to trial the basically -- the trial MSAR as an alternative to fuel oil, and we'll do that by blending on site using our [ sort of tone ] in our unit. And we're basically then looking the commercial supply from Panama as well from one of the refineries there. into the Panama location. So that's the plan on those other projects. So yes, all in all, there's a lot to do, and that means that we need to make sure that we're fully funded to do that. So we -- the shareholders would have seen that we've recently placed GBP 1.5 million rather with the places essentially to provide us with funding for the best part of 12 months now. Primarily, the money is going to the progression of the MSC projects, where we're obviously looking to commence the that particular trial. We need to buy equipment to do that and install that equipment on site and operate the facility. So that will provide us -- the funds will predominantly give us money to progress that particular trial. There's a credit, obviously, with money comes in from Utah, which we fully expect, which will offset the cost of carrying out the -- supplying that unit aside and also the cost of completing the Morocco supply as well. And then there's a sort of a net cost also of the bioMSAR Zero development program as well that we look to continue doing in parallel. So as part of that placing, myself and other directors, obviously, were part of that particular placing and there are few people coming in on the open offer as well. And then in terms of the open offer funds, which we're now looking to raise from the existing shareholders. That's really primarily to look at the acceleration of the bioMSAR business. Obviously, the plan is -- the target was originally to launches in 2030, but we can see that there's a definite incentive for us to try and launch that a lot earlier. So we'd like the funds to do that, if we can. The projects in Central America and Southeast Asia, I mentioned before, a Tier 2. So the additional funds, some of the additional funds will help us to complete those projects. And then there's a contingency to make sure we can get to the point of profitability as well. So overall, the timetable is, obviously, the [indiscernible] has been launched -- the placing shares will be admitted today for the GBP 1.5 million placing and then the results of the open offer are expected sometime after Easter. So that's the current plan, the timetable in terms of what we're going on -- what we're doing rather. So I'll hand back to Andy, so we can conclude.

Thanks, Jason. And just before we sort of open up to questions and answers, I just want to sort of summarize a couple of slides, the decarbonization of shipping is a massive opportunity and a huge task as well. And we're working with world-class partners, who can -- we believe can make it happen. And I think it's also worth bearing in mind that the team that's been involved in this business for a long time, has taken a business status to scale before. So I think we have what we take to get this business to scale. And 2024 is really about establishing production and revenues. And our new technology work that Jason explained, is continuing, I can say, in the background, but actually it's quite an active program. We're getting closer and closer to the NetZero biofuel and really the blend-of-board technology is really just waiting for customer deployment. And the customers obviously need to see the LONO in many cases before they will deploy, but it's ready for deployment. And we will continue our outreach to strategic partners who can help us scale the business. And I think the way we look at it is that 2024 is really a year for delivering on our milestones and getting value for shareholders -- existing shareholders, who put money in, and we want to make sure that, that is recognized by the progress that we can make. And so strategic partners, although we'll continue to reach out to them and who knows how fast those conversations would go, but we really see that as a 2025 task when we passed some milestones. We've got some value in the tank, and then we may be able to do some transactions from deals to help us accelerate that process. Just to move on one more, please, Jason. And then finally, in summary, I think our purpose has never been clearer. I think we're very much focused on the shipping today. We've probably never been quite as clear as that in the past, but we really do see that as where our purpose is. And our solutions, I think, have never been more needed and more relevant. And our focus, I think, has never been sharper. And I think shareholders have to need reminding that our time is now, but we really need to get on with it. It's no point come back in 10 years' time with a solution. We need to get on with this. And so we believe that the our plans with the money that we've secured and that we're still seeking from through the open offer will provide multiple value catalysts. And we'd love to have you continue supporting us on the journey. And so with that, at the end of the presentation section, I'll hand back to Mark, who for the next phase.

That's really kind of you, Andy. Thank you. And Jason, thank you for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the Q&A tab on the right-hand side of your screen. Just wanted the guys take a couple of moments to review your questions submitted already. I'd just like to remind you that a recording of this presentation, a copy of the slides and the published Q&A can be accessed via your investor meet company dashboard. Andy, you received a number of questions throughout the presentation today and a number of that were presubmitted. So thank you to everybody for your engagement. And if I may just hand back to you just to moderate through that Q&A and I'll pick up from you at the end.

Thanks again, Mark. Just we are in an open offer period. So we do have to be a little bit careful about making sure we stick to the script, if you like, on answers, and we'll do our best to answer questions presubmitted and also on the day. But if we don't get to a question or we can't answer it immediately, and then please bear with us, we will come back to you -- come back with some published answers on those other questions later on. And -- so with that, Len, I'd like to start off with some of the questions that we've received. And Jason is going to answer most of these, I think, but I might answer the other one as well. But the first one, do you think it's possible to have a version of BioMSAR Zero ready for the market by year-end? And will it need its own LONO?

Good question. I mean where we are at the moment is we have a prototype that's in the lab. That still needs to go through quite a bit of testing at the moment. And depends on -- depending on the nature of the final formulation we'll determine whether it needs a LONO or not, right? So we haven't yet got a LONO for our basic BioMSAR product. So we need to make sure that we make some progress with that. And then depending on the components we're using to then blend to make the BioMSAR Zero products that will determine whether there's a substantial difference or not. So for instance, if we're using quite a lot of glycerin and combining that with another fuel that's known to the marine industry, for instance, like a methylester, then we may be able to sort of shortcut the loan load process. But that's really depends on a lot more steps in terms of how -- what we end up with in terms of the final formulation how we do with the BioMSAR trials and then ultimately, the discussion then with the engine manufacturer, depending on their level of confidence at the time, obviously, some are further up the curve than others at that point as well. So -- there's still quite a bit of work to be done just to finally launch that. But I would say that with the original goal in 2030, we're several years ahead now of that particular development activity. But ultimately, this costs money to do as well. So it depends a little bit on the funds available to progress that in amongst the core projects, which is -- the primary focus is to get to commercial revenue.

Okay. And around the interim results, it says the company continues to assess strategic options and partnerships to accelerate the commercialization of both bioMSAR and MSAR within the shipping sector. Can you advise if you are looking at strategic investment into Quadrise or adjusting to facilitating production and distribution and bunkering, for example. And so maybe I could take this one. And I think that really -- I kind of actually answered it towards the end of the presentation. We look so we are looking at both options. Our focus today is more on the operational partnerships and options to make sure that we get the trial is finished and into revenues. And I think our agreements with Cargill and MAC2 are examples of this to meet the growing requirements for biofuels in Northwest Europe. And so, let just to repeat previous call I said. I mean I think the way we see it is that we need to use this current year 2024 to pass some really important milestones, and then we can come back to bigger deals has to address the scaling up of the business, maybe we can do those in 2025. That's why I would answer that. As bioMSAR has been tested in a diesel engine with excellent emissions reduction results, as Quadrise looked at the potential for trials in vehicles such as freight trucks, delivery vans, construction, mining is, et cetera, where maybe on success of major oil companies could then license the technology and do the distribution through its existing regional and global network. Diesel vehicles will still be used for a few decades. And BioMSAR and MSAR Zero could help a lot in cutting emissions from the sector. Jason, you want to add?

Yes. I mean, today, our focus really has been on sort of the larger energy -- the larger engines. So we're looking at sort of marine, that the wet engines, diesel engines, which is used for the marine power and industrial sectors. Although we have been testing on a essentially what looks like a truck engine. So I mean, the fact that the fuel works for brief test on a diesel engine shows some promise that it could be used in the automotive sector in the future. I guess the reality is that -- the automotive sector is also highly regulated and utilizes pretty clean hydrocarbon fuels and a very small amount of fire fuel today, okay? So there's quite a lot of resistance in the automotive sector to bump up the use of biofuels, on the onset levels. So they're looking at renewable diesel and other products. So the bioMSAR for that particular market, I would say it's further out in terms of our development pipeline then for instance, that the engine -- the diesel engines, which might be used in a marine, that's why you mentioned a mining application in the question. I mean those -- there are quality states in the diesel engines, which are used for power generation in mines, et cetera, in remote locations. So that they would be our choice first rather than actually powering the vehicles and then operate around the mine just because those vehicles are a lot harder to convert and they need a lot cleaner hydrocarbon in the first place to actually to be using the engine and be sort of warranteed by the manufacturers, et cetera.

Okay. Thanks. And then a question here about time frames. Why are our counterparty lawyers taking so long to finalize the outstanding agreements?

Yes. I mean, in all cases, we're working with some very large multinational companies and their lawyers are involved in multiple projects, some of which are multibillion-dollar deals and it took time critical as world of intimated type as well. So ultimately, our agreements get put into a pipeline, and we have to wait our turn. The sign-off process is done by -- at a very senior level. So again, to make sure that everybody has their documentation, they need to get that signed off. So unfortunately, it does take a little bit longer to get these agreements signed off than we would wish we can obviously turn things around quickly at our end. But that doesn't mean that we can certainly push our counterparties to act the same pace, if they've got other things that they're dealing with in parallel.

Yes. Okay. And this is a rather long question, but -- and you actually answered part of it already in the presentation date. Naturally, you regularly like to talk about the advances of your fuels compared to other fuels. This can give the impression that there is no rational reason why a fuel purchaser would buy any other fuel than one of your fuels? Is this really true? Please give an open and clear comparison of what the relative advances and disadvantage of your fuels, ideally including bioMSAR Zero compared to other fuels, especially biofuels, which are either new bank or under development as they are comparable in that they also have no need for expense to ship modifications. This needs to address cost reduction of each type of emission. Any other factors as a fuel buyer is likely to consider. What can you say about that, Jason?

It's a very long question and very difficult to answer completely probably on a call like this. But the reality is that the fundamental, I guess, value driver for our biofuel, easily, it's cheaper, okay? So is designed to be 10% cheaper than the alternative biofuel state. So we compare our bioMSAR products with something called B30 today. They're quite similar in terms of the CO2 reduction B30 uses 30% of the fatty acid methylester or used cooking oil or a derivation of a methylester. So basically, our blend of glycerine combined with heavy fuel oil or residuals is at least 10% cheaper for the end user, such as MSC to you. So that's the fundamental basis behind why people are MSC are interested. Now it's a case-by-case example. And what we do -- what we've done today is beyond bioMSAR, there's also sorry, beyond B30, there are other biofuels we're competing against as well, such as LNG. So what we've tried to do for shareholders is to try and provide a simple breakdown and sort of understanding of how the -- how our fuels compare. In terms of the economics, we probably need to provide a little bit of a better summary. So people so shareholders can understand that. Obviously, in terms of our dealings with clients such as cargo and MSC, we're under full nondisclosure and there's a lot more detailed analysis that can go into that as well. So -- but we are aware that we do need to provide a better breakdown to shareholders can understand what we're dealing with. And we're not trying to present the fact that we're the only game in town. There's a lot of biofuel that's already being used by the Marine sector. All we're doing is we're providing a lower cost version of that biofuel today. So that's really our competition. But there are other biofuels that are being utilized today in the industry, which obviously provides a good pathway for us to provide a lower cost, lower emission solution.

Thanks, Jason. There's another question about timing, which is we can't really say much more than we've made publicly available. But given that we are at the very end of quarter 1, how far into quarter 3 is the proof-of-concept and LONO trial expected to start on the [indiscernible]?

Yes. I mean broadly, we can get the agreements signed off dated by the end of this month, which is still the plan. And that early Q3 is we still have scheduled for delivery at the end. Obviously, every week sort of delays us a week potentially to get started. So we're looking at -- we're making sure that we have the agreements in place, first of all, and we have a very detailed program with you guys in the office at the moment are basically working on to make sure we can deliver everything on time. We're starting to buy already long lead equipment. So we've already made commitment to buying some of that equipment today. If it threatens the delivery of the trial. So at the moment, we're confident that early Q3, we could start delivering fuel to the [indiscernible].

And moving to Central America, where do you expect to get suitable feedstock for the trial and potential commercial side to the Sparkle Power assets? Is Cargill expected to be involved?

In terms of Sparkle Power, the main interest for them is a lower cost alternative to fuel oil. So Cargill are not in the fuel oil supply business, their main interest is in biofuels, frankly, and that which is why they're involved in the MSC project. In terms of supply to Sparkle going forward, that will be from one of the larger refineries and that could supply that particular area if I sold a fuel oil today. So we have agents in place down in South and Central America, who are working on that project. But the first thing is to actually get the trial done at the site as well.

Okay. I'll take the next couple of questions together. Any update on the JGC refinery refueling or the Asian refinery project.

In terms of JGC refinery, there's no update to report really on -- at this time. We haven't done a lot of work in Japan. Our focus has really been on the core projects, which we reported on today. which obviously, one of which is the Asian refinery project, where we're looking to obviously conclude the proposal for the trial and the commercial agreement upon success such that, that trial can enroll into a [indiscernible] commercial supply operation once complete. So we're looking to conclude that agreement until during the coming period can subject to some of the other things we're working on in parallel.

Okay. Next question is one probably -- have you tried to get one of the big oil companies to invest in Quadrise to improve their green credentials and to improve Quadrise financing and share price. And I think this is a kind of a variation on the strategic partner question. And so the answer to that is simple. I think the point I could add here is that we see our agreement with Cargill and for the MSC trials is an important step in that direction like non-oil major but there is certainly a major organization and actually, in some ways, more relevant to what we're doing. And it may be possible to do more with Cargill in the future and once the trials are complete, who knows. But we are -- it's really a strategic big strategic deals come when we've achieved some milestones. I think it's the important thing that shareholders should take away from that. The -- is this the last sorry, is this likely to be the last time the company needs to raise the fund raise before commercial deals commence and revenue is generated. Back to you, Jason.

Yes. I mean we certainly believe that's the case. We're working on the basis that the project is financed before -- as forecast and the expenditure that we've got in place. will provide us with the funding that we need to start to the end of March next year, by which time we expect that Morocco and Utah to be revenue generating and the MSC trial, which will also generate a small amount of trial revenue, we'll be sort of nearing completion as well. Obviously, if the open offer is fully subscribed, then the additional proceeds that we raised will allow us to accelerate the BioMSAR development process as well and sort of progress the projects in Central America and Southeast Asia and the latter being certainly being revenue generative within the same period. So that should provide sort of a clearer pathway to sort of profitability as well.

Yes. Okay. Now moving on to Utah. Relating to the Utah project, are there any plans to provide biofuel feedstock to the project site to create bioMSAR from the project hydrocarbon source. Also, our Cargill aware of this project and is there scope for interest for Cargill to become involved as a partner to improve scaling up potential?

Yes. So the plan, I guess, for the -- at least for the drilling project is that the -- in the future, they're looking to do CO2 sequestration. So the idea is that it'll have a carbon-neutral products as it gets to ground level. And also the properties of the oil is such that it doesn't -- if it doesn't go through the refining process, it's ultimately very low sulfur in the treatment process they plan use on site. So we've got both heavy, very heavy fuel alternative, which is low sulfur, which can go to the marine industry. So that itself will be sort of we don't necessarily need to add biofuel to that to get a sort of 15% to 20% saving. But ultimately, if the marine industry is using sort of a B30 product, that we will add some biofuel to that as well to produce a bioMSAR and we will need biofuel feedstocks for that, obviously, and that's something we'll take up with Cargill at the time. I mean the main focus for Cargill at the moment is in Europe for the MSC trial, but they're certainly aware of the other projects we're working on as well that may need their feedstocks in the future.

Okay. And then one here, I can probably answer. Are there any additional or new projects you can update us on it because I think actually, Jason has touched on this several times, and there aren't. It's the short answer that all our projects are updated by RNS or put out there. So what we've got in the circular and everything is really what we've got. And I think that from the point of view of having, looking at our resources, we really do need to focus on what we have in front of us. It's already quite a long list of projects, and we've already -- it's not through our own efforts, but we -- sales well know that our projects have suffered delay. So we really don't want to add any further distraction to that. We anything we need to focus on the few projects that we've got to get them over the line. So that's what we're focusing on. But back to you now with this one, Jason, can you give any detail as to the blend on board aspect? When can we expect detail on this in relation to the agreement with MSC or trials with Cargill?

Yes. So I mean the blend-of-board aspect involves the installation of a smaller scale MMU. We actually own one of those already. So that MMU itself can be used for smaller scale trials that it can be used for a blend-of-board application with the best LONO, so we can we can sort of apply that in a number of ways. The marine -- sort of the MSC cargo project at the moment is fully focused on delivering a marine biofuel. So that itself is that we'll be bunkering the fuel as is. But there is obviously an interest in deploying this technology for as a blended board solution as well. And that's something that we will take up with MSC and with Cargill once we get underway with the trials that are planned in Q3. There's a question also I think that came in while we were talking in the terms of -- could the blending equipment be fitted in tankers. So blending occurs while oil is in transit before saving time in the process and would any surplus ship electricity currently be a detrimental effect. And I guess, I could add to that with the addition of water would be a problem as well. I mean, basically, we've looked at it into this technology in a lot of detail. Yes, it could be installed in tankers or in or indeed in bunker sort of bunker tankers as well to do the blending on board the bunker vessel itself. So it can be done in transit on the vessel because these types of tankers have multiple tanks, so it can be done. The electricity requirement is pretty low in the grand scheme of most of these vessels. So the actual consumption is a pretty low number. And then in terms of the availability of water, that depends a bit on how it's deployed, but a lot of the vessels that we're looking at have their own water system, so they may be the top up in terms of their reversal osmosis unit or something to provide the additional water but it's definitely a feasible solution, especially if we get the emissions to the efficiency savings that we expect to see during the [ Andre ] trial.

Okay. And if you see other questions that you particularly want to prioritize, that Jason please do address those. But moving on here. providing the LONO is successful and the commercial supply agreement is reached with MSC, what is the strategy to roll out bioMSAR, MSAR other major bunker hubs? Are we reliant on local end users such as Sparkle Power and the Asian Refinery overall agreement with MSC provides sufficient demand outside of the area to develop supply in other major hubs?

Yes. I guess in terms of the core plan, obviously, initially, [Arrow] is the main focus supplying out of [indiscernible]. And then with the Morocco supply that we need, and essentially, we'll need a system down in the Mediterranean region as well. So they're our first focus. And then in parallel to that, we've obviously got the Utah project, where we'll have an MSO unit deployed out there, where eventually, we'll be looking to use that unit to sort of that more units to supply the ports of Los Angeles and also of Houston, U.S. Gulf Coast region. So they're our main focus. And then for Panama, even in terms of the Panama and in terms of Southeast Asia, there sort of support projects to that as well, where we'll have an MMU in place in each of those in the future, ultimately. But they're probably at least a year out in terms of those applications for the bunker industry at least. The main focus for those projects is really to supply the end users there.

Yes. I don't take a much, add though. The ships that we're looking to supply are some of the biggest ships in the world with the biggest engine. So we can -- by having like a handful or a large handful of supply points. Actually, we can address quite a large proportion of the total market. So it's not an endless task, in fact, trying to get the logistics there, which is a big task for us to do. But if you've got 6 or 10 places, then you've got a really good network for these kinds of vessels. Given the most recent update, is the intent still to enter commercial supply discussion with MSC at the low no interim stage. In addition, will shareholders be informed that commercial discussions have started.

Yes. So I mean, ultimately, we'll see how things go. But depending on the results of the LONO sort of doing a vessel operations, we think it should be possible to advance commercial discussions to start after we received an interim LONO from the engine manufacturers. So that's still the plan. I mean ultimately, to be cautious, we've -- we can certainly say that commercial agreements will be concluded on the trial completion. But ultimately, if things work as we expect and the normal at the midway point is at the time when we expect those commercials -- there's commercial discussions to advance. So that everyone's really at the end of that period to then sort of start ramping up supply because we definitely think demand is there, certainly in Europe as well.

Okay. And I'll just move on to a question 18, because it's kind of related after the Marine proof-of-concept on MSAR, what's the plan for MSAR within the MSC fleet? Or we still dependent on the bioMSAR LONO for MSAR roll out?

I think that's a subject for discussion once the MSC have completed the MSR proof-of-concept and that we've analyzed the performance data. On the MSC ,the [indiscernible] , we'll have a lot more information now on that particular vessel. The MSC will have to hand to evaluate that discussion. But that particular vessel has been modified since the prior test of MSARs. So it's important to get that performance data and that will obviously then influence MSC's decision in terms of progressing with MSAR. And we need to have supply locations set up for supply of conventional MSR as well, which is obviously where the refinery applications are important, such as with the other ones we're looking at. So now MSR out of the [indiscernible] as an example.

Yes. Then the last question 20 on our list because it's about Morocco, we don't have one yet about Morocco. As the Morocco project is only a small demand project, do we really have confidence we can access commercially economic feedstocks?

Yes. I mean I think that in terms of the overall application for that particular client, ultimately, that could fill 1 MMU on its own. So that's certainly an attractive project as far as we're concerned. And we certainly believe that should be attractive to refine it as an example. So -- but beyond Morocco, there's also then the possibility of supplying as we mentioned before, potentially people like MSC with like I mentioned MSAR, but also the opportunity to then supply biofuel with that same system is attractive for refinery. Most refineries today are looking at sort of greening up the refinery, producing more and more biofuels. And really, that capability is extremely important if we had came to a refinery client with just an MSAR project on its own, that's less attractive than something that's got a pipeline as an opportunity to supply an increasing amount of biofuels.

Okay. And then going back to MSC, we have a lot of questions around MSC, what is the level of direct MSC Board, a Chairman or CEO sponsorship to go ahead with the trial and the subsequent commercial supply? Have you been talking to them? Or is your main interaction with MSC Ship Management. I try to understand why signing the trial agreement takes much longer than initially anticipated.

So well for me or you, Andy? You can probably get you involved in both discussions.

Well, Brian, so the relationship is the primary relationship is with the MSC ship management where we deal with the CEO, you've had a [indiscernible] before there. But the whole group is fully aware of that, including, obviously, the commercial, the supply people who do the contracting of the fuel and the parent company of the whole organization who are very keen to see this get into -- comes to fruition. And I think the MSC have put a lot of weight into their strategy of equity scrubbers on ships are using high sulfur fuel oil. And our fuel is actually a very integral part of that whole process. And so they're as keen as we are to see this thing done. That doesn't mean to say that they can push their lawyers [indiscernible] it seems. But nevertheless, they're very keen to see that through. And we've been in meetings with them face-to-face, where it's clear that if they see these trials that succeed, then they want to roll it out. And I think the more that they are anxious to see the success, then the more we sort of get that building of the pressure from them as well, which is good. It's -- we're all facing the same direction than that for that. So this is somewhat related, but I think it's an important question to try to answer. And 2 years ago at the interims update, the following has published the MSC trial operations are expected to commence in quarter 2022 with the trials themselves conversion before the end of calendar year 2022. What level of confidence do you have that MSC trial will now happen on your revised timetable remembering we've had numerous new time lines over the last 2 years and all have been missed. What can we say about that, Jason?

Yes. I mean, I guess since we first initiated discussions with MSC, the nature of the -- the nature of the trial has changed a little bit. Originally, it was due to be an MSAR trial and then MSC, we're very keen to incorporate bioMSAR into that vessel trial development program as well. So we had to do a lot of work in 2022, actually with [indiscernible] to make sure that they were happy that the fuel could be utilized on the vessel and they will warrant that they could go straight to a vessel test and not state the engine test. And so that certainly delayed matters. In parallel, MSC, we're trying to work out which vessel they were planning to looking to do the trial on. And they -- in the end, they purchased actually the [ CEO ] Istanbul, which fortunately had the MSAR fuel system that was still there, which has to do a little bit of refurbishment. But so that delayed us a little bit. And then, I guess, more recently, it's been finding the right biofuel supplier that can take this project forward. that can supply the sort of volumes that MSC would need. And also, believe it or not finding a terminal facility that can host the trial as well. It's not -- a lot of the terminals are sort of fairly occupied especially in the Arrow zone. So we're finding the right terminal with the right capability in a guest and the vision to expand is extremely important as well. So that has taken a little bit of time to pull all those loose ends together. We're certainly now at the point where we have to get this trial away by the middle of the year. That's certainly an incentive for everybody to get that done. I think everybody agrees with counter parties internally able to agreed that this is something that there's no time at the present how to get this biofuel up and running and tested. So everybody is focused on achieving that. But as Andy mentioned before, we still have to get through the lawyers to get this signed off.

Okay. So we're coming towards the end of our time now. You've answered some of the questions from today and most of the questions that were presubmitted. Jason, just before we hand back to close, are there any of the questions that you don't even submitted to any of the other questions that we haven't answered already? Are there anything you want to just conclude by answering?

There's a couple around does the [ Andra ] require dry docking for the trial. It sounds like the required pretrial work is being completed. Yes, if the vessel goes into dry docking, it's not for the reason -- it's not nothing to do with the trial itself. It is for another application that MSC may be looking to trial on that particular vessel. So that is really up to MSC to decide. The regional thinking was that the dry docking would have happened by now. But that appears to have been postponed. So we don't see that the dry docking will take place before the trial happens, but that's really up to MSC to implement and not ourselves at the moment. We've been told that the vessel is ready for Q3, and now we need to get everything in place to make that happen.

Thanks, Jason. So we're going to draw to a close just as I sort of summarize from my side as well. I think we tried to make it clear that our purpose is really clear around the around -- so we hope you like that sort of that story and the greater focus that we've given to the shipping side of it today and also the fact that the bioMSAR Zero is within reach. And -- so we've got a lot to be working on, and we know very much from the questions and from our own experience within the company, but the success and delays that shared experience has been at times demoralizing. But I think we are very much within touching distance now. And as I say, I hope you like the story. Thanks very much for taking the time. And we will answer other questions that we haven't managed to get to and publish those answers. And just remains for me to thank you all for attending today. And I'll just come back to Mark for any closing remarks.

That's great. Andy, Jason, thank you once again for updating investors, please. Could I ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback Andy and Jason can really understand your views and expectations. Let's take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Quadrise Plc, we'd like to thank you for attending today's presentation, and good afternoon to you.