Quadrise Fuels International plc (LON:QFI) has announced its audited final results for the year ended 30 June 2021 and gives notice that the Company’s Annual General Meeting will be held at 12 noon on 26 November 2021.
Highlights
· Substantial progress across Quadrise’s project portfolio and accelerated development of low-carbon bioMSAR™ both during and post period end despite the significant challenges posed by the COVID-19 pandemic.
· Completion of significantly oversubscribed placing and open offer in March 2021 to raise net proceeds of £6.5m, ensuring that on the delivery of successful trials and entry of appropriate commercial supply agreements, the Company has the resources in place to reach sustainable commercial revenues in Q1 2023.
· bioMSAR™ – Quadrise’s innovative low-carbon bioMSAR™ fuel takes advantage of our proven emulsion fuel technology platform and utilises renewable glycerine as a clean fuel component. The glycerine content of bioMSAR™ can be adjusted to meet the client’s required price/CO2 reduction goals, providing a cost-effective transition fuel solution to meet increasingly stringent decarbonisation requirements. Testing of bioMSAR™ at Aquafuel Research Ltd demonstrated over 20% CO2 and NOx emissions savings, as well as higher engine efficiency results. This was followed by a larger trial using 5 tons of bioMSAR™ at the VTT facility in Finland. The VTT testing demonstrated a 26% average reduction in CO2 emissions compared to marine diesel. Plans are underway to accelerate testing for bioMSAR™ use in a range of sectors that are demanding “drop in” transition fuels to advance decarbonisation.
· MSC – Following the signature of the Joint Development Agreement with MSC Shipmanagement to carry out LONO (‘Letter Of No Objection’) fuel trials on board their commercial container vessels, Quadrise is now working to finalise the preparatory work to enable these trials. As a result of positive results from bioMSAR™ testing on 4-stroke diesel engines, MSC expressed an interest in advancing the option of bioMSAR™ testing on their modern 2-stroke engines alongside MSAR® and this is our main focus, with a view to commencing commercial-scale 4,000-hour LONO trials in H1 2022.
· Utah – Our project in Utah involves using MSAR® technology to emulsify low-sulphur heavy oil from oil-sand deposits located at the Petroteq Oil Sands Plant (‘POSP’) at Asphalt Ridge in Utah, USA, which is operated by Greenfield Energy LLC (“Greenfield”). Due to both COVID-19 and adverse weather conditions, the POSP start-up and commissioning process experienced delays, resulting in the required oil samples from site not being received at QRF until August 2021. During August our Research, Development and Innovation (‘RDI’) team at QRF successfully converted these samples to both MSAR® and bioMSAR™, and in September a report was issued to Greenfield in accordance with our Commercial Trial Agreement. Quadrise is now working with Greenfield to review the requirements for future commercial implementation.
· Morocco – The Company’s industrial client in Morocco is a major consumer of HFO. Since the successful pilot plant trial in October 2020, plans have been impacted by COVID related travel restrictions causing delays to the trial programme. Following the easing of these restrictions, the Company was able to visit the site (“Site B”) in August 2021 in order to prepare for the next stage of the programme; the combustion of 60mt of MSAR®. Site B consumes around one third of the client’s annual HFO consumption, and the trial is now expected to occur in Q4 2021. Testing of bitumen samples for the MSAR® fuel production has now been completed and production is scheduled to commence in Q4 with shipment of the trial equipment set for October 2021. The trial results and a feasibility study for MSAR® use at a second client site (‘Site A’) are expected to be delivered to the client in Q4 2021, with Quadrise receiving £0.1m. A subsequent commercial trial will then take place at Site A later in Q4 2021 or early Q1 2022 with shared trial costs reimbursed to Quadrise under a separate agreement. Assuming the successful conclusion of these trials, the intention would then be to conclude a commercial supply agreement covering one or more of the client’s sites in Morocco during Q1 2022.
· Americas – Using the Group’s regional agent network we are seeking to progress projects in Panama with power generators, in Mexico and Ecuador with the state oil companies and utilities respectively, and look forward to providing updates as these projects progress.
Financial Summary
· Loss after tax of £4.3m (2020: £4.8m), of which of £1.4m (2020: £1.4m) is attributable to production and development costs and £1.5m (2020: £1.8m) relates to administrative and corporate expenses. Non-cash charges of £1.6m (2020: £1.6m) comprise £1.3m (2020: £1.1m) of fair value adjustments to the Convertible Securities balance due and £0.3m relating to share option and warrant expenses (2020: £0.5m).
· Total assets of £10.7m as at 30 June 2021 (2020: £6.3m).
· Cash balances as at 30 June 2021 of £7.0m (2020: £2.4m).
· Cumulative tax losses of £58.4m (2020: £53.7m) available for set-off against future profits.
Mike Kirk, Chairman of QFI, said:
“The Company has made great progress during the year, with the launch of low-carbon bioMSAR™, progression of key projects and a hugely successful fundraise. As such, Quadrise is now strongly positioned to deliver on its promise and, having undertaken a progression in my role as Chairman since January 2020 when Jason Miles was appointed as Chief Executive Officer to ensure a seamless migration in executive duties, I believe that now is the right time for me to be handing over to a new Non-Executive Chairman. As such, I intend to step down as a director of the Company following the AGM in November. Laurie Mutch will take over as Interim Chairman from that time until a new Chairman is in place.
I am proud of what Quadrise has achieved and I have no doubt that the team, under Jason’s leadership, will deliver the migration to sustainable commercial revenues. I would like to thank all of my colleagues within Quadrise, with whom it has been a pleasure to work with over the last 6 years.”
Jason Miles, Chief Executive of QFI, said:
“This has been a year of substantial progress for Quadrise, notwithstanding the many challenges faced during the pandemic. For much of the period we, along with our clients, were subject to significant restrictions relating to travel and site access on our active projects.
We are immensely proud of the rapid progress made in taking bioMSAR™ from a concept tested in the laboratory, to a proven renewable transition fuel delivering leading reductions in CO2 emissions. This would not have been possible without the hard work and dedication of everyone within Quadrise and at our partners, including Aquafuel and Nouryon. There is no doubt that bioMSAR™ has been instrumental in increasing interest in the Company and, following the successful fundraisings earlier in the year, the Company has a path to sustainable commercial revenues by Q1 2023.
On behalf of the Company, I would like to express our sincere thanks to Mike Kirk for his valuable experience and input during his time as Chairman of Quadrise, he leaves the company in great shape to deliver the commercialisation of MSAR® and bioMSAR™.”
Live Investor Presentation
The Company is also pleased to announce that Mike Kirk, Chairman, and Jason Miles, CEO, will provide a live investor presentation relating to the Business Update via the Investor Meet Company (“IMC”) platform on Wednesday 6 October at 14.00 BST.
The Company is committed to ensuring that there are appropriate communication structures for all of its shareholders so that its strategy, business model and performance are clearly understood:
· The online presentation is open to all existing and potential shareholders
· Questions can be submitted pre-event via your IMC dashboard or at any time during the live presentation via the “Ask a Question” function. Although the Company may not be in a position to answer every question it receives, it will address the most prominent within the confines of information already disclosed to the market. Responses to the Q&A from the live presentation will be published at the earliest opportunity on the Investor Meet Company platform
Investor feedback can also be submitted directly to management post-event to ensure the Company can gather the views of its shareholder base
Investors can sign up to Investor Meet Company for free and add Quadrise Fuels International plc.
Investors who have already registered and added to meet the Company, will be invited automatically.
Notice of Annual General Meeting
Quadrise Fuels International’s Annual General Meeting will be held at 12:00 noon on 26 November 2021 at the Park Plaza County Hall Hotel, 1 Addington Street, London, SE1 7RY.
