Quadrise Fuels International plc

Thank you very much, and thank you very much for joining us for the interim reporting for Quadrise. As always, we start with a disclaimer.

I will leave that to you and jump straight into the presentation. So the strategic challenges of Quadrise are clear and well known.

So our focus is entirely on getting the MSC Cargill trial up and running. We have also since we last time met been having a meeting with OCP face-to-face that suggests we might be running a second trial with them leading into a commercial offtake agreement.

But perhaps even more importantly, we have been upping and accelerating our efforts to build support from refineries. So we have feedstock supply available, or at least plausible for when we need to scale up after these trials.

I have mentioned at previous occasions, latest at the AGM that we are looking at whether we can identify other shipping clients who would be willing to do commercial trials perhaps in other segments. And this is an ongoing effort where we've been speaking with a good number of people that we believe are willing to be upfront users or first movers rather than the traditional shipping approach where you are first adapters rather.

And I think we know pretty much who this is. So we've had meaningful discussions.

We are talking to the right departments and all these companies, but it's something that takes a little bit of time, but it's an effort that is ongoing. We're also aware that while our focus is entirely on the trial and on the scaling up the refinery efforts, we really need to look at the future as well.

I think we have a great platform on the bioMSAR platform, but it's also one where much of the bio feedstock will vary. There's simply not enough feedstock in any one product to meet the IMO requirements should they ever be adopted.

So as you will know, we have a stable product with the glycerine. We have been trying out the cash no oils, and we are trying out other feedstocks that are perhaps a little bit further away, but it's really important that we can speed up our, say, product or research to market time.

And one of the ways of doing that is being -- modernizing our data infrastructure. It's actually quite good, but leading into building digital twins.

We're already part of an EU project in that respect, but it's something that will help us fine-tune before we do the actual machine test, fine-tune exactly how do we make the feedstock, and prepare it for that test. And we can do that then in cyber instead of doing that on a machine.

So hopefully speed up the whole process. We've been trying to sharpen our focus.

Of course, we've conducted a lot of projects over the years. We're painfully aware that some of these are projects that are research-minded, so there can be longer periods of hibernation where nothing really happens and then they take off again.

And that's just part of running a portfolio of different projects. But we also have more specific projects that you've heard about before and we're going to talk about today.

And we just have to be very mindful that they continue to make commercial value to keep them alive. So that's an ongoing process.

We have a clear focus on shipping clients. We have to make a choice.

But it also means that in terms of power plants and industrial clients, they have to be really promising for us to invest time in it. Some of these other projects are far, far away geographically at least, but we are trying to focus on them by also using external clients to speed up the process to market.

We'll come back to that on the individual projects. We are, of course, affected, and we are watching what is happening on the regulatory front.

Fuel EU is moving along according to plan. We are very mindful that a number of countries are looking at the fuel EU rules and regulations to seek inspiration, and they are likely to be adopted there if IMO doesn't go ahead.

Timing is uncertain. Localization is also a little bit uncertain.

And clearly, as a former shipowner myself, there's nothing that shipowners fear more than having a number of different regulatory regimes, having the level playing field and having one set of rules has enormous value. What we're hearing from the IMO is that the talks are ongoing.

The Americans have offered their view on how it to proceed, not very positive last Friday. Others have also offered their views.

We're mindful that Liberia and Panama both suggested solutions that are close perhaps to the Greek position, which is lower fines, a broader base, more LNG involvement in the range of fuels that can be used. The feeling right now, certainly from my side, my personal view is that this is likely to take longer than just a 1-year suspension that the IMO decided last year in October in London.

From the market point of view, we actually feel that the -- what happens at IMO might not impact Quadrise's technology that much. The main thing is that there are fuel EU rules, they're driving change.

What we are mindful of is that there are a lot of other things on the agenda, also shipowners and most businesses the pace of technological change, not just in AI, but in many other technologies where exponential changes in these technologies is really changing the business landscape and no business can afford to ignore it or not be well briefed on it. Same thing we have on a broad term geopolitical transition that we have not seen at all at this level before in terms of a [indiscernible] role of international law, change in alliances, certainly uncertainty about many of the traditional alliances that we've been working with in the past, but also trading blocks changing quite rapidly.

And that means that any company operating in this environment needs to look at their operational expenses before they look at anything else. So my clear impression from the last 6 months where we've been seeing a lot of shipowners and a lot of related businesses is that there's a strong focus on the green transition, but everybody understands that they need to make sure that their businesses are strong, so they are going to be around for the green transition.

So the focus will be on cost to a very large extent. And that also matters for, of course, for the choice of technology that we can offer.

We are still selling both MSAR and bioMSAR, but there's no doubt that the ability to deliver MSAR at below the cost of conventional fuels is a major for. And that's even before talking about the current conflict in the Middle East.

What we are seeing is that many of the players we are dealing with are no longer competing on price or freight rates or even the availability of ships. It's about availability of bunker fuels, which is not a given, and that is impacting the value chain.

Clearly, where sometimes we've been finding that we are dealing with much bigger players than ourselves, and that holds its own challenges because they have many, many concerns to take into account. In a case like this, dealing with primarily large players have some benefit because they will be first in line to get the bunker fuels.

And I'm not saying it's easy for them either, but it's something that gives us some consolidation as we are trying to get trials in place with MSC and Cargill in the first place. We are -- if we look at the projects, first and foremost for us is the trials that have been planned for such a long time with MSC and Cargill -- we've had quite frequent meetings and discussions with both of them over the last 3 months.

I think they're positive. They're down to a few items now.

What also happens when things take time and, people are checking carefully the agreements they entering into is that certain things come up again. Most recently, we've been looking into whether VAT issues in the EU for the Antwerp trial would affect or would come into play with a tripartite agreement.

It seems not to be the case. So that's been sorted out.

We're now discussing or looking at the terms and conditions, which are standard for a big buyer of fuels. And my feeling is that we are getting very close now.

We've had meetings again, face-to-face. We are experiencing that MSC is committed to the 2 trials that have been agreed, so one for MSAR and one for bioMSAR.

But we're also experiencing that they are very helpful when we are talking to refineries, and others and pushing and endorsing not only the trial, but building a scale up in terms of feedstock supply afterwards. So I think that's quite positive.

Some of the issues, some of the things that have to happen now, we have filed for a branch in Belgium, enabling us to start the production in Antwerp, and that might be a little bit early as we haven't signed yet, but we just want to make sure that doesn't hold it up. There'll be some certifications that have to be renewed, but it's -- the whole process has been simplified.

But again, we want to do that already now, so we don't have to wait for that. So I think while I can't tell you that it's all been signed and dusted, we're ready to go.

My feeling is that we're getting quite close. And our focus has shifted -- not shifted, but has now also been on how do we make sure that we can scale up after an expected successful trial.

So no longer than 3, 4 weeks ago, Jason and I and Linda as well were in Singapore exactly to look for potential supplies from refineries, but also from buyer suppliers to make sure we're ready for that and had very positive meetings. Cannot really reveal who we've been talking to.

But hopefully, we can talk more about that later in the year. With that, I will hand over to you, Jason, on OCP.

Thanks, Peter. Yes.

So in terms of OCP, again, Peter and myself earlier this year, went out to Casablanca and met with the main people there. Quite surprising meeting because they were extremely positive in terms of the cost leadership program, which MSAR fits in with.

So the current status is that the updated trial agreement is well underway. So basically, we're now sort of detailing exactly which site we're going to be at.

The likelihood is it's not going to be the same kiln as we had before, which is slightly constrained with this OEM issue, which we documented before. But the key thing is, I guess, the time behind the amendment to the agreement, we make sure that there's an operational board, obviously involving Peter and the head of OCP there to make sure that it's got management buy-in and make sure we try and avoid the delays that we've seen so far.

The trial itself, the actual duration depends a little bit on the scale of the kiln that we're operating on. So if it's a smaller kiln, it will be 30 days.

If it's a bigger kiln, it's likely to be less. So really, the plan is to basically carry out that trial.

And that's a longer-term trial is needed. We did -- the previous trial was done over a period of a week or so.

OCP want at least a longer-term trial of a couple of weeks minimum to actually get the full operating data that they say is needed before they commit to commercial supply. So that's what we're doing.

And in the meantime, our equipment remains on site and any costs that are being incurred, we're getting reimbursed for by OCP still, and that process has been working very well. In terms of the next project in the U.S.

with Valkor for basically heavy sweet oil, which is essentially a low sulfur bitumen -- ultra-low sulfur bitumen product. We received obviously the first payment.

We revised terms that people remember of the agreement last year. We basically received the first installment this year -- sorry, last year as well.

We basically invoiced the second installment, which is due at the end of this month. So we're expecting payment of that 300,000.

And then there's another 650,000 due at the end of the year. The samples that have been long overdue as well, they've been -- essentially the Valkor have been going through a change -- slight changes in their exact processing.

So they've been holding back the samples until they know exactly which technology route they're going for, but that's now been finalized. So they're doing pilot runs at the moment to generate the samples that we expect to get fairly soon, so we can do the testing in the second quarter of the year.

Their pilot plant that is due to go in, be operational in Q3 has been delayed slightly because of the site that they selected was not fit for purpose. So they had to move site to a new location.

So that delayed some of the civil works that was planned to be up and running by now. But that's moving ahead.

So they expect to be the installation to happen during Q3, and the plant to be up and running in Q4. In the meantime, we're preparing -- we prepared our unit.

It's nearly complete now for shipment, and that will be done during the second quarter of the year to the U.S. with expected deployment then in what's obviously just part of the installation program in Q3.

So really, the plan is then to carry out a paid for trial for -- to produce actual trial volumes of fuel for local consumers and it also initiates a marketing program that we've had in plan for some time with Valkor as well now that is actually live. But yes, Valkor they're fully funded.

Obviously, they've got a position now in TomCo as well in the U.K. In terms of Panama, again, as you remember, we carried out a trial in July, which went very well.

Essentially, we've got a letter of intent from Sparkle, basically stipulating what their demand will be. We know that there's other demand from other -- both plants, both within Panama and Central America region, specifically around Honduras.

The fuel permitting process, we've got basically MSAR and bioMSAR have been basically approved as alternative fuels. So these are fuels that can be utilized when -- as they're trying to phase out potentially fuel or diesel.

So that's been approved. The process for an import permit has also been detailed now.

But obviously, we now need a live case where we can actually bring in the fuel with a partner. So we're discussing that with regional refineries and other logistics companies in the region with regards to commercial supply to Panama.

And in the meantime, we've had some new arrivals to the team, including Matt Hyde from -- who's coming from BP, who's really helping with the sort of getting a deeper understanding of refinery economics there as well in that region. In terms of the bioMSAR program, which is ongoing, we've been doing a lot of testing with additional biofuel feedstocks, including doing things in the lab, but also doing testing at third-party facilities in Germany, where these engine facilities are used by quite a lot of parties.

So it's a good endorsement for the fuel. We're also kicked off -- we also kicked off a collaboration with the University of Bath not just in terms of fuel research, but Peter mentioned before, some of the AI digitization as well.

That's something that Bath can utilize in the future. And obviously, it's potentially a good talent pool for us going forward in terms of their engineering and the technical people as well.

And in the meantime, as Peter mentioned before, there's a world beyond glycerin for the biofuel, which really comes from biomass-derived material, which is abundant, but obviously, there's different technologies to extract it. So we're working with the main technology providers there, but all of which has its own features and challenges, but we're working through to actually get some of their products to market faster than they would normally expect through some of their other technology platforms, which is why they're working with us.

And then as part of the development program as well, we have an EU-funded project, which we're part of us amongst sort of 18 other companies ranging from universities through to people in the marine space as well and actually owners of vessels as well. So that's been going very well, and it's actually -- it's been quite active this year in putting together this digital twin, which again, Peter mentioned at the beginning, which is looking at 4 different types of existing vessels and 4 different types of new build vessels to see what's the optimum technology platform to decarbonize shipping, and it's looking at a range of different technologies of which MSAR is one of those on the biofuel space.

So it's a good platform for us to market our technology. And then sustainable ships is something that we launched again with them today -- sorry, this year rather, with Linda and Alfie especially have been very active in getting that up and running, doing an online seminar.

And that's brought through some quite good introductions already as part of that program. But it's a good way of comparing how MSAR competes with other -- MSAR and bioMSAR competes with other fuels.

The next slide really just gives you a pipeline of the different fuel types that we're using and explains really what the bioMSAR is a mixing technology. It's a platform technology, which enables us to bring in a range of different biofuels into the finished product on the right, which needs to go through the appropriate engine testing, but ultimately can then be rolled out to the shipping fleet and really answer some of the questions around the abundance of biofuels.

That's what we're really looking to nail and provide quite a unique difference in what we're offering because we can blend oil and water together. Some of these products like the sugars that we mentioned, some of the pyrolysis sugars and other means of other sort of components on here actually be water soluble as opposed to being easily blendable with oil.

So we have the ability to blend both. And I'll hand over to David.

Thanks, Jason. So our results for the period are largely in line with the same period last year.

Our loss has gone up a little. We've got some additional project and development costs in there this year.

The main thing that is of interest based on the questions is our cash balance. So at the end of the period, at the end of December, we had $4 million in the bank.

Now in addition to that, as Jason alluded to earlier, we're expecting another sum through from Valkor overall to take us through up to the USD 1 million that we're getting on the license fee, and that's expected in over the course of this calendar year. Now where that's going to take us to, we're going to have to see where we get to with our -- hitting our milestones and our projects for the period.

So it's too early as yet to say how far that's going to take us to. We're based on our cash spend rate, which is historically about $3 million per year.

We've brought in some new additions to the team. So that cash spend has gone up, but maybe only 10%, 15%.

So that GBP 4 million is still way more than 1 year's worth of cash spend plus the Valkor money. So we're in a pretty healthy position cash-wise.

The loss for the period -- loss per share for the period is in line with the prior period. And our tax losses of GBP 68 million will be there when we come to generate profits.

And that's everything for me for the moment. Thanks.

Thank you. So there have been a few updates to the team.

You will have noticed our RNS on Lauri stepping down from the Board and Michael Covington joining us. Michael brings in many years' experience in investment banking and private equity leadership also in energy.

And just as importantly, he brings in a lot of energy, and drive and a willingness to contribute and participate on the board and in the daily work. So we're looking forward to that.

We have also brought in Matthew Hyde, who has more than 30 years in refinery economics, most recently from BP. And that's a reflection of our decision to accelerate how well do we actually understand refinery economics because it's not something we can just do after a successful trial.

Once we are having a production trial, we need to make sure we can scale up afterwards. so we can supply the material and the fuels to our clients.

Right now, we're down to about probably a gross list of 25 refineries that has a good match to the kind of residues we are looking for. And then Matthew will need to analyze that further to find out which are the ones that will benefit the most from using the MSAR technology and the bioMTAR.

So that's ongoing work, but also really important. And I feel we already -- we have already learned a lot compared to when he started.

In summing up, -- we -- I feel we are making small steps forward in almost everything we are focusing on. And I'm really looking forward to being able to announce hopefully, the MSC agreement being done and then being able to move on to the next steps.

And I'm also very mindful that it looms large to have the agreement signed now or the agreements signed, the next steps are going to call on something else from [Indiscernible] and we have to get into project management phase. We need to mobilize.

We need to set up. We need to make sure that the crew on the ship or ships in question are ready for the trials, so we get the most out of them.

And then we need to make sure that we scale up properly, that we have agreements in place with refineries -- and while we're starting in Anterp, it's quite clear that some of the next places we have to go, of course, shipping up like Singapore, it might actually be the Persian Gulf again at some point, but also the Mediterranean and the Americas. So that's what we are focusing on and trying to run a tight ship, of course, also on the resource side, still investing in our future, investing in the data platform and accessible data lakes.

So that's where we're at. We have had a number of questions come in, I think 45.

I'm going to hand over to David to take us through as moderator of the questions that have come in and the questions that you can still post on the platform. So with that, David.

So thanks to everyone who's submitted questions in on the INC platform. We're going to deal with the pre-submitted questions first, and we've grouped them into segments.

So we're going to be going through each segment. After that, we will come in with the live questions that are coming in as we speak.

And any questions that we don't want to address today will be dealt with on the INC platform in due course, likely early next week. So I'm going to start now with some of the strategy questions for Peter.

And the first question is, what efforts are Quadrise applying to the market of new built dual fuel ships fitted with scrubbers? And how big is this opportunity?

Our focus right now is on talking to owners who have a willingness to move first. So owners who control their own ships.

So one thing is owning it, but another one is actually controlling the daily operations. And of course, we're looking for ships that has the highest possible consumption per day of fuel because that's where we can really test them and where we really want to sell.

So that is our priority. Secondarily, we are probably looking more for vessels with electronic fuel injection main engines because that works better with our technology.

And that's even before looking at scrubbers or no scrubbers. But -- so I think we have a fairly good take of the segmentation there, both from the experience I have and Tony Foster and Linda Sorensen has in the shipping industry, but obviously, also because we have fairly good access to data from various databases on where the ships are with high consumption, and the fuel injection or electronic fuel injection, but also with scrubbers.

So we can break that down, and we -- that's how we approach the marketing, if you will.

Probably worth adding that the dual-fuel ships tend to prioritize LNG, right? There's a reason normally that people have built a dual-fuel ship that's to take advantage of LNG.

So it wouldn't be our obvious first choice necessarily. But having said that, there are a number of dual-fuel vessels that are using fuel oil still if they can't get LNG.

So -- but it's not the first choice, I would say.

Okay. So the next few questions are with regards to bringing in additional shipping companies.

Do you expect to sign up an additional shipping company once the trilateral agreement is signed between MSC, Cargill and Quadrise? Can you update on how the search has progressed for additional shipping companies?

And can you put a time scale on that?

So I -- we are hoping to add another trial. We are talking to tramp owners.

We are talking to other types of owners. The time scale is a little bit hard to predict because right now, with all of them, I actually feel we have good access.

So in some, we've started with the bunker departments. And then we referred to the technical departments.

In others, we've been in with the technical departments first and then talk to the bunker traders or their ESG departments. We had a number of very good meetings in Singapore when we were there, too.

So we are sort of spreading it out. We have been talking to family-owned companies, and to listed companies.

But again, what we're looking for are people who have proven that they're willing to look at green transition fuels, who have invested in that because it comes often at a cost for them. If we can find owners who have vessels in place for Antwerp, that's another benefit.

Predicting when something will be signed is way too early. All I can say is we're having fruitful and meaningful discussions.

And some of the ones we've talked to will probably want to wait simply because they don't have ships in place or because the segments that they're operating in are under some pressure at the moment. So I don't want to put a time line on.

All I can say is that I feel we are talking to all the right people, and I'm hopeful that we'll get another trial.

And are you seeing the interest being primarily BioMSAR or MSAR or both?

I would say both, right, at this stage. For some of the bigger players, I'm pretty convinced that the real interest will be for MSAR, but that's yet to be proven, right?

But I just know what kind of cost pressure most of these owners are going to be on right now, and the uncertainty that they're operating in. And this is something that shipowners have done for centuries, right, dealing with uncertainty and volatility.

So they know how to do that. But it always starts with making sure you have your cost under control.

And MSAR is a great product for exactly that.

Okay. Up to Antwerp, what is the next plan to install MSAR or bioMSAR production?

Can you confirm if this will be terminal blending or at refinery or both?

Yes, that's a great question. That obviously depends on our clients.

But if you're looking at a very large line of network, or if you're looking at the temporary one, the obvious next place would be Singapore. That's where -- that's the biggest bunkering port in the world.

It's a board that has done a lot to improve the transparency of their fuel markets, generally speaking. So they've had issues in the past with cappuccino bunker and all sorts of other substandard fuels, and they've dealt with it using transparency and different mechanisms.

We had a fantastic number of meetings, both with governments and fuel providers in Singapore when we were there. I think a lot of what's going on is really, really exciting.

But for a sheer size as a bunkering port, that's an obvious place for us to be. For the next places, we've looked at also refineries and suppliers in a number of different places, including in the Persian Gulf, but with what's going on right now, that's not -- doesn't seem to be a viable third place to set up, but we are mindful of the advantages once it becomes accessible again.

But East and West Med, the Americas are obvious places. The trial that Jason spoke about with Sparkle is not just about a power plant, but it's also a strategic location for supplying fuel to shipping, right, at the natural bottleneck.

So we are looking at these places, trying to identify what are the suppliers available on location that we could collaborate with.

You said in your interview this week about MSAR offers price competitiveness. So that's where our focus has to be.

Is the intention to roll out MSAR commercially once the proof-of-concept data analysis is done and the proof of concept is signed off and successful by MSC?

We will roll it out as soon as we have a client willing to commit to it. Right now, a lot of the clients are willing to do this, their path to adoption will be much easier as a successful trial.

So that's why the trial is so important. If somebody is willing to use it now, we have some experience with using the technology in the past in power plants.

Now we have to prove it for shipping, but theoretically, there should be very few real issues. There's something about the mobility, et cetera.

But if somebody was willing to take -- sign a takeoff agreement now, we would be willing to go ahead with that. But the trial is important for a lot of the owners we are talking to.

So we do that first, and then we hope to be able to sign agreements or maybe trial supply agreements with shipowners as the trial shows some results.

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

I think it gets people interested. It also works as a sort of a uniform way of calculating because one of the things that we don't always talk about when we talk about biofuels or alternative fuels is that there are so many assumptions that goes in.

So at what load do you run the engine, at what speed, what is the weather conditions like, at what end of the range? I mean, many of the -- certainly, many of the articles being written tends to overemphasize the high end of the range of any given product.

So I think the sustainable ships platform offers a standardization of that, so we can compare better the different fuels. So I think it has helped us in getting people in the door, but it's also something we use on a daily basis when we are presenting to shipowners, or to people who are interested in the product in general to show what it would work like for a different ship type or a given conditions, or at a given time, right?

Because let's not forget that fuel EU changes over time. So requirements will change in 30 and 32, I believe.

And the same thing with the proposed IMO framework. So it's helpful for that reason alone.

Yes. So I'm going to go on to the technology section now, and these are primarily directed at you, Jason.

So the first one is just on refinery setup. Is it true that new and updated refineries are having crackers fitted to extract more value from the input crude and that this will reduce the amount of residue available?

Does this, therefore, mean that bunker and storage companies producing MSAR or bioMSAR are the path to success for Quadrise rather than refinery bio MSAR production?

Yes. I think in terms of existing refineries, I think those refineries actually installing, I guess, upgrading equipment in the minority.

There's not many companies actually investing in downstream assets anymore. So -- but new -- certainly the case for new refineries.

If you're building a new refinery, that tends to be a full conversion refinery and you don't produce any fuel oil at all. I think if you look at -- and people are doing this on the basis of a long-term plan that might be 5 or 10 years out, right, with the expectation that fuel oil or especially high sulfur fuel oil is in a decline.

But in reality, it seems to be quite a popular product and it's still on the rise in terms of how it's being utilized. And there's still a very large market for heavy fuel oil.

Based on our assessment, Peter mentioned before, we've got -- we've done an assessment of all the refineries available and there's at least 25 on our short list, which are really good candidates. And indeed, some of those actually have put cracking capacity in, but they still have a resid stream, which they have to blend the fuel oil, right?

So not everybody is going not just because you put a cracker in doesn't mean that you have no fuel oil at all. Some still produce quite sizable amounts of fuel oil.

So that's really where we see the refinery is key. I'd say that's the source of the lowest cost feedstock.

But having said that, in the middle of that, refineries don't have a lot of tanks and not always involved in the bunker business. And that's where the storage companies and the bunker traders, et cetera, are also important to us as well.

So I wouldn't rule them out as partners in the future because they are key to unlocking the logistics of getting it from the refinery to the end user of the shipowner.

What is the plan for supplying residual streams of bioMSAR at MAC2 to replace the HFO component and further reduce bioMSAR cost base? Also, do you plan to deliver biogenics to refineries to produce bioMSAR at the refineries, and minimize the cost base?

Yes. I think in terms of the, I guess, the residual streams, we're certainly looking at using the more viscous forms of fuel oil or a fuel or derivative.

So the heavier the resid, obviously, the lower the cost. But it doesn't mean we can start using refinery resids at that particular facility because of the viscosity of it is just too high and the temperature that you need to handle it in makes it quite complicated from a logistics point of view.

But we're certainly looking at the most viscous forms of fuel oil you can buy out there as one of the components. Yes.

And in terms of other biogenic components, we're certainly looking potentially to supply those to refineries in the future where we can put a system in the refinery. Certainly, that would be an opportunity to supply them with a biofuel in the future to make the bioMSAR product as it becomes of interest.

But the primary driver probably in the refinery is most likely to be the MSAR products initially. But every refinery likes to know that there's a biogenic pathway going forward as well, and we've got a range of different options and a pretty low-cost solution as well compared to some of the other things we're looking at.

Thanks. My next question is just on MSAR and bioMSAR production.

Can MSAR be produced at refineries and then shipped to a bunkering location for further processing in the bioMSAR. So the question is, can we make bioMSAR out of MSAR?

The reality is it's a bit more problematic because MSAR has 30% water and bioMSAR has 10% water. So there's a limitation to how much bioMSAR we can turn into -- sorry, MSAR, we can turn into bioMSAR.

So in reality, it's much better to produce the individual fuels. That's not to say it couldn't be blended in the future, but there are some physical limitations in terms of what you can do because ideally, what you'd want to do is replace the water with a biogenic component in the water phase.

Makes sense. Post BioMSAR, when could we expect other Biogenics to enter the bioMSAR offering at the commercial level?

I mean that's something we're testing at the moment. So there are -- Peter mentioned before, some available products, which are commercially sold today, but have the limitations in the case of methyl ester residues and cash in nutshell liquids and some of the other products out there that we could -- we're looking to introduce at an early stage.

That requires some engine testing that we're still doing to confirm that. And obviously, then we need to present those engine test results to Wartsila and others and get a candidate vessel to actually utilize the fuel as well.

So it's work in progress, but we're making very good progress in that regard in terms of offering another pathway for these products.

Okay. Just one here now on ISCC certification.

Is ISCC certification a prerequisite to getting the trial agreement signed? Or does the fuel actively have to need to be produced, and the on-site setup audited in order to secure the ISCC certification?

Yes. So the ICC certification process, we're working on together with Cargill.

We made some very good progress in that regard. And the new regulations that covers the EU, especially has simplified the process.

So in terms of the application process, we're in good shape. The final part of that jigsaw is to actually get the -- an audit done once the plant is up and running -- basically once the plant is installed at MAC2 and being commissioned, that audit can take place, and that's the final rubber stamping.

And to answer the first question that you had, I mean, the IC certification process is not holding up anything in that regard in terms of signing the agreements. That's purely the commercial and legal discussion being finalized between MSC and Cargill.

Yes. Okay.

Thanks. There's a couple here on the financials.

So I'll just deal with those ones. What is the other income of $12,000 in the interim accounts?

So that $12,000 is grant income. So we received grant income for the SEASTARS project.

Overall, it's about $50,000. So we've actually got that cash.

And what we do is we release that in the P&L as the work against that program is completed. So as of December, we've released $12,000 against the P&L.

And then a couple of questions just on where we're at with cash. I did cover that on the presentation, but just to reiterate, -- we've got 4 million at the year-end, which is still more than 1 year's worth of fixed costs despite the increases to the team and the headcount.

On top of that, we're expecting USD 950,000 worth of some in from Valkor throughout the course of this year. So we need to work out where we're going to be over the next 6 months by reaching our milestones as to how long that's going to take us to.

Then there's one in here as well. Shareholders have been advised that the last fund raise was sufficient to take the company through to commercialization.

Given the cash holding and spend rate plus delays to revenue-generating contracts, does that guidance of sufficient cash to commercialization still hold true? And how appropriate was that guidance?

So when that guidance was given, that was during -- after the last fundraise and during the last IMC, which is about 6 months ago. And that's where our projections were at that time.

Obviously, things have been delayed a bit. So it's not a clear cut, but it's still too early to say.

We need to see which milestones we hit over the next 6 months. The next section is on MSC, and I'm going to direct this to you, Peter.

Can you provide -- can you provide detail on the delay associated with signing the MSC trial agreement and why trilateral agreement is now mentioned in the interim results RNS? Also specifically, what do you mean when you state in the RNS post-trial commercial considerations?

What considerations constitute MSC putting in to paper?

Yes. So we have been talking about bilateral agreements, four lateral agreements and at some point, even bilateral agreements.

And some of this is driven by attempts to make this work, right? So there was a concern about being subject to EU VAT in Antwerp.

And that led us to look at if we could inject a bargain company in the agreement as well and hence, avoid it. It turns out not to be necessary.

So we're back to a tripartite. It's not a fundamental change of the agreement at all.

It's now we're back to the original tripartite, but still with a discussion over some of the terms and conditions that Cargill is going through as we speak. So that, I think, was the first question.

On the second question, it was about the MSAR, was it? Of course, commercial considerations.

Yes, that's really refers to the scale-up in the commercial contract, right? So my expectation is that, that will be for MSAR.

My expectation is also that we need to have refineries ready, and we're hoping for MSC to use some of the leverage in helping us get in. But we're not leaving it at that.

We are doing our homework. As I mentioned, we've hired Matt to help us do that homework, but we're also using 2 different consultancies who have different kinds of access and different perspective on this, and we can call on them when we need to get a little bit closer to any one of these refineries to make sure we can clinch such a supply.

Yes. Okay.

Peter recently stated that the remaining parts of the draft agreements are now predictable, and we can expect signature soon. Was Peter referring to both tripartite and bilaterals, or just the tri-part idea?

And have MSC and Cargill shared their view with the team that they will also expect the remaining parts to be predictable and signed off soon?

The outstanding contracts, a couple of bilateral ones and there's a tripartite as it looks right now, are all related. So it's the same issues that needs to be sorted out in order for us to finalize these.

So you would expect them all to be signed together?

I would expect it to be one signing, yes. I'm certainly hoping it will be, but I see no reasons why it shouldn't be.

My conclusion that these are small is based on 30 years of doing shipping contracts and the issues that are remaining, I believe, is of a pragmatic nature rather than a principal nature. But with large companies, you want to make sure and you will involve your legal departments.

So -- and that's where we're at, right? So what we can do now, I'm not going to give you a time frame because that's born to be something I regret.

But what I can say is that we try to keep the pace up on this and try to make it a little bit simpler to get it expedited and push your own legal departments rather than us just waiting for it or answering us. So I think these are smaller -- I think these are -- of course, they're not small issues, but they are pragmatic issues, and we should be able to sort them out.

But I'm also mindful that if you're running a fleet of 750 ships and you certainly can't get oil out of the Persian Gulf, that's probably going to be your prime area of focus right now, right? So we are competing with that.

That's for sure, right? But that's one of the few things I can see should hold it up further.

Okay. Is the plan for MSAR rollout post MSAR proof-of-concept completion?

Can you provide some detail on the plan once the MSAR proof of concept is confirmed as complete?

Well, it is that we need to be able to provide the manufacturing units in the locations where it's required. And it's going to be a gradual rollout.

We're not going to open up all over the world all at once, but we will prioritize the big bunkering hubs, spoke a little bit to it earlier. So Singapore is an obvious choice.

It's a very, very significant bunkering port. Maybe build out in Northern Europe, certainly in the Mediterranean at some point in the PG because on the Persian Gulf.

Right now, that's off the table, obviously, and then the Americas. But that will also depend on the clients and what their preferences are, and they are also likely to perhaps change a little bit as the world changes around us.

So we're flexible on that. As you know, we have collaborators who can help us scale up also on the production of these manufacturing units.

Fundamentally, it comes down also to the partners we have both on the refining side and also in some places on the bio feedstock side.

Can you confirm if MSC has informed Quadrise that they'd be willing to use MSAR commercially under the interim law? And if so, how many vessels would that involve assumed agreements were reached?

We have not gotten into the detail like that, no.

Okay. Do MSC still regard MSAR as the main Quadrise fuel choice in the immediate future with bioMSAR use dependent on economic considerations going forward?

Yes, I think that's a very good question. It's probably one that MSC should answer, right?

So my expectation is that there will be a strong focus on whichever one offers better saving over conventional fuel, and that would be MSAR. So I would expect that to be the case.

Okay. What is the status of MSAR supply to MSC, which we have been told is running independently of MAC2 facility with preferential supply in the Mediterranean?

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

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

Maybe, Jason, you could take the loan oil part.

I'll take the question if you want. I mean in terms of the interim loan oil was issued to Maersk from -- by Wartsila.

So that's the status of the original interim loan, obviously, of which MSC is very much aware, right? So from their perspective, something is in place that covers that.

And in terms of the, I guess, the trial itself, obviously, the test vessel is insured in terms of the product liability risk of using MSAR or bioMSAR that's fully insured as part of the development process. As part of doing the trial, obviously, you generate a lot of data and initial -- sorry, further approvals then in terms of the products that we're supplying, all of which helps to alleviate some of the initial risk that you get from insurers and others in terms of obstacles to actually move ahead.

So our -- we're in very good contact with our broker and the underwriter on Lloyd's who covers this risk at the moment for us. And obviously, as data is approved upon as the tests progress, then that we should reduce the premiums in terms of using the fuel on various vessels.

And we don't see that as a constraint going forward because it's being done with other fuels as well.

Yes. Okay.

Have MSC indicated a desire to get our fuels used in their engines?

They have in the past. And obviously, Peter has been involved with discussions with M&A quite recently in Denmark in terms of what the approval process will look like.

So that's something that we are progressing. So yes, I think -- but yes, for sure, M&A or Evolent is now called now are an important OEM that we need to bring up to speed as we get the data from the testing that we progress.

moving to Morocco.

So we're going to move on to the OCP questions now. Can you remind us why the Morocco trial is actually needed given that there was already a successful trial in November 2023.

Also, is the fuel to be used the same fuel that was shipped in December 2022?

Yes. So the additional test is needed because the first test that we did was designed essentially a proof-of-concept test by OCP.

So that worked very well at Kariba. We basically tested both MSAR and bioMSAR.

-- going in that over a short period of time. So the requirement from OCP was that that's gone well, very happy, but we need to have a longer-term test of up to 30 days depending on the kiln to get the data.

So that's what we're planning for next is to complete that subsequent trial, anything between sort of 15 to 30 days is the plan at the moment. And we'll be utilizing -- we won't have to make fuel and bring it to Morocco.

So all the fuels from the previous test, sorry, was utilized successfully without any problem. So it's not like we've got fuel sitting around there for that period of time, although that will probably still be stable if I'm honest.

But yes, so we've been making new fuel in Morocco and using that for the test going forward.

Okay. For OCP, are you looking to set up Mediterranean fuel supplies previously?

Or would the fuel now be made in Antwerp and shipped to Morocco?

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

I think this has probably gotten our post trial considerations.

Yes, yes, I guess this is with the OCP trial. But yes, in terms of post trial, definitely, that would be -- we'd be looking for most likely a refinery in the Mediterranean region in Africa.

Okay. And then one for you, Peter, on OCP.

Haven't recently met OCP, what is your take on the general attitude to an interest using MSAR?

Also, I mean, we went to Casablanca for the meeting. I was quite positively surprised by their interest in using it.

Also an approach that I think makes a lot of sense in involving the different business units to make sure they are motivated and they're measured on it. It's a reasonably small trial, obviously.

But we have the equipment on location, if you will. And I think it makes a lot of sense for us to stick around and conduct the trial, and just make sure that the project management around it is something that we can all learn from and that it leads into a commercial takeoff agreement afterwards.

Okay. A couple of questions now on Valkor for you, Jason.

Can you detail the plan on producing MSAR or bioMSAR at the Balcor facility? And how this gets to bunkering locations if MSC are prepared to trial the fuel?

Yes. So I guess the initial plan of Valkor is to produce an MSAR product because that's the simplest thing to do.

We're using their heavy sweet oil, which is a very low sulfur asphalt type material to make a low-cost alternative to low sulfur fuel oil diesel potentially. So that's the initial plan is to produce an MSAR product.

Obviously, the key thing about that is that as part of their production process, if they're able to demonstrate that the carbon intensity of the product is lower than low sulfur fuel or diesel as well, that's quite important because that gives you carbon credits we can utilize. But the initial market is to really focus on the sort of industrial and power type applications, first of all.

The volumes aren't there yet or we don't expect the volumes to be there initially anyway to supply the marine sector other than maybe for the occasional trial volume. But in the past, we've discussed this with MSC at a high level.

And in principle, they're obviously interested in testing it if it meets the specifications that we need to for marine fuels, especially around sort of levels of aluminum, silica, et cetera, which oil sands is important to reduce. But yes, so if it is supplied to the marine sector, we've looked into that.

There are -- there's rail supply that's very reasonably low cost to get it from Utah, either to the West Coast or down to the U.S. Gulf Coast as well, which is the main markets for bunker fuel.

But that's some way off at the moment. So initially, we want to stimulate a local demand, get up and running with that.

And then obviously, as they expand, then we can start looking at the marine sector.

Okay. My next question is just on the status of the samples that we're expecting from Valkor, sort of why have they been delayed?

And what's the current expectation?

Yes. I mean we've had some, I guess, some interim samples in the past, right, which have not necessarily been representative of their commercial products.

So we were quite specific with them. We didn't want to waste time -- we're testing that if it wasn't essentially a good representation of what they'll be supplying.

And in the meantime, they've also been changing some of the technology in terms of what they're installing, both in the oil sands plant and obviously, the downhole drilling program as well to overcome some of the issues they had initially. So that's now been settled.

The pilot plant, as I mentioned in the presentation, is now up and running and producing a sample, hopefully, several [panamas] of samples that they're sending across to us. Imminently for testing, and then we obviously think can analyze that and provide a market spec for it as well that we can go out and start selling to end users.

So that's all ongoing, but it has been delayed for sure, but not really down to us.

Okay. So that takes us on to spot.

There's a couple of questions here. The first one is just on the Panama power market.

Are you aware of the Panama 0 126 power tender where thermoelectric plants running on bunker or diesel that with long-term government contracts must convert to cleaner fuels within 36 months. Is this a target for BioMSAR, BioMSAR Zero with any of our Panama clients?

I mean the answer is yes. We're very much aware of that particular tender.

Sparkle made us aware of it. And that's one of the reasons why it was important to get the approval of the Panamanian authorities for both MSAR and bioMSAR to be considered as alternative fuels basically to fuel oil and diesel, which they are.

I think initially, the pathway will be still to go the MSAR route, first of all, to reduce the cost of generation there and be competitive, obviously, to LNG, which is the other source other than obviously renewable sources. But ultimately, bioMSAR is certainly seen as a viable means going forward as well compared to LNG and LPG, which are the main alternatives to them.

Okay. I don't think -- this is probably the last question because I don't think we've got time for many more after this.

We were advised that the Panama fuel permits were expected to be received by the end of 2025. What has held them up?

Are you working with the government on getting our fuels cleared to be used as cleaner fuels as per the Panama Zero 126 tender? Is this part of the permitting plan now?

Yes. I probably semi answered this in the last answer.

But yes, I mean, in terms of the actual approval of the alternative fuels, certainly MSAR and bioMSAR are now considered by the authorities as such. In terms of getting the import permits, we actually need to have now the supply logistics nailed down in terms of which refinery, which terminal we're going to bring in, which partner potentially in Panama might we wish to use.

And then we can apply either ourselves or through that particular partner for the import permit, which we've been given the procedure that we need to follow, all of which seems to be fairly straightforward, and meeting the guidelines that we're well used to in Europe and other places. So we're using internationally established guidelines to then get the fuel approved and imported.

So we don't see any real holdups now in terms of other than bring the fuel in and make sure there's a commercial contract in place between buyer and seller.

Okay.

Yes. Thank you so much for listening in.

Thank you for your support. Thank you for the many very good questions.

I know there are a couple of questions that have come in on the platform live during our presentation. We will address them, as David mentioned earlier, on the platform latest by next week.

So once again, thank you very much for listening in.