TIDMQED
RNS Number : 5434U
Quadrise PLC
29 March 2023
29 March 2023
Quadrise Plc
("Quadrise" or the "Company" and together with its subsidiaries
the "Group")
Interim Results
Quadrise Plc (AIM:QED), the supplier of innovative energy
solutions for a cleaner planet, announces its unaudited interim
results for the six months ended 31 December 2022 and provides an
update on developments during the first quarter of 2023.
FINANCIAL SUMMARY
-- GBP2.6 million in cash reserves at 31 December 2022 (31 December 2021: GBP5.6 million).
-- Loss after tax of GBP1.7 million (2021: GBP1.5 million). This
includes production and development costs of GBP1.0 million (2021:
GBP0.7 million) and administration expenses of GBP0.6 million
(2021: GBP0.7 million).
-- Total assets of GBP6.4 million at 31 December 2022 (2021: GBP9.3 million)
BUSINESS SUMMARY
Each of the Company's key projects in the marine, upstream and
industrial sectors continue to progress with further milestones
expected to be passed in Q2 and the second half of 2023. Quadrise's
strategy remains to focus on these key projects, as detailed below,
which provide the fastest and most material pathways to
commercialisation. The Company still expects to deliver commercial
revenues in the current financial year, although further funds will
be required to see every key project through to
commercialisation.
MSC
-- In July, Quadrise signed a Framework Agreement with MSC
Shipmanagement Limited of Cyprus ("MSC") with a view to the
commercial supply of one or both of the Company's fuels to MSC's
global fleet.
-- Discussions with feedstock suppliers continue, with the aim
of securing a Tripartite Agreement between the supplier, MSC and
Quadrise as soon as possible in order to commence Proof-of-Concept
and Letter of No Objection trials.
-- The MSC Leandra to is scheduled to dry-dock in Q2 2023 in readiness for testing in H2 2023.
-- Testing of the optical combustion properties and engine wear
of bioMSAR(TM) in December was completed by Wärtsilä Services
Switzerland ("Wärtsilä"). Based on this testing, Wärtsilä
recommended a further hazard identification and operability study
("HAZOP") to assess feasibility and safe operability prior to use
on a Wärtsilä 2-stroke engine.
Morocco
-- Logistical challenges relating to Moroccan customs have now
been overcome with both of the Company's fuels and the trial
equipment now on the client's site.
-- The Company has completed the site engineering set up and is
concluding scheduling discussions with the client linked to its
site production programme, with the trial now expected to commence
in April 2023 and results being available shortly thereafter.
-- The Company then expects to enter discussions to conclude a
commercial Fuel Supply Agreement as planned, in addition to
concluding agreements for testing at other client sites as
required.
Utah
-- Commercial discussions between Quadrise and Valkor for the
supply of a license and manufacturing unit to enable Valkor to
produce MSAR(R) and bioMSAR(TM) are expected to conclude
shortly.
-- Valkor expects drilling permits at Asphalt Ridge to be
awarded in Q2 2023, with low carbon intensity, low sulphur heavy
oil to be extracted and available for conversion to MSAR(R) and
bioMSAR(TM) for trials during H2 2023.
-- Following successful results, these trials would then be
expected to lead to commercial supply of MSAR(R) or bioMSAR(TM),
subject to discussions with stakeholders to finalise
agreements.
Americas
-- Quadrise has recently signed a Letter of Intent with a
central American power provider outlining plans for a commercial
test of MSAR(R) and bioMSAR(TM) at the provider's power plant.
Discussions are ongoing and the Company expects a Test Agreement to
be finalised during Q2 2023 ahead of a site trial followed by entry
into a Fuel Supply Agreement upon success.
-- Discussions with a large refinery in the Caribbean continue
to progress, subject to them obtaining an operating license.
-- Efforts continue to progress activities in Mexico with the
state oil company and utility operators.
bioMSAR(TM) & Nouryon
-- In September 2022, Quadrise announced the entry of a Joint
Development Agreement with Vertoro BV ("Vertoro") to investigate
the use of their crude sugar oils (CSO(TM)) as an alternative
biofuel feedstock for bioMSAR(TM).
-- In November 2022, Quadrise announced the extension of the
Exclusive Global Collaboration and Emulsifiers Sales Agreement with
Nouryon for the exclusive supply of goods, services, and IP for
future MSAR(R) and bioMSAR(TM) projects.
OUTLOOK
-- Quadrise expects to complete the site trial in Morocco,
conclude a Licence Agreement with Valkor, complete a HAZOP for
marine bioMSAR(TM) use and progress tripartite discussions with MSC
and a feedstock supplier during Q2 2023. Conclusion of the Valkor
Licence Agreement would deliver commercial revenue in the current
financial year, but further funds will be required to see each key
project to commercialisation.
-- A Fuel Supply Agreement with the client in Morocco, site
trials in Utah and the commencement of commercial scale trials on
board the MSC Leandra would then follow in H2 2023.
-- Favourable oil and oil product economics, together with a
regulatory environment increasingly focused on emissions reductions
and biofuels have further increased the business case for low cost,
lower carbon MSAR(R) and bioMSAR(TM). This, together with the
continual easing of supply chain and covid-related travel
constraints should expediate upcoming trials and commercial
discussions.
Jason Miles, Chief Executive Officer of Quadrise, commented:
"The second half of 2022 and the start of this year proved to be
both rewarding and challenging. While delays, such as those
experienced in Morocco, have been frustrating, I am pleased that
each of our core projects remains on track for a positive outcome
and we are developing protocols to help us overcome some of the
logistical challenges we have encountered.
The recently announced name change and positioning of Quadrise
as an Energy Decarbonisation enabler is an important statement of
intent as we progress licence agreements and commercial-scale
trials, which, on successful completion, will lead to supply
contracts and commercial revenues. Our continued development of
bioMSAR(TM) and net-zero solutions opens up exciting opportunities
to deploy our unique proven emulsion technology platform in new
applications, securing a green future for the Company and its
client base.
I look forward to being able to announce material progress
across our projects in coming months and over the course of 2023.
Although we have had to overcome a number of challenges this year,
and we are not immune from global industry headwinds, Quadrise
remains well-positioned to deliver commercial success on a number
of fronts and to play a key role in decarbonising the shipping,
power and industrial sectors."
Investor Conference Call
Due to an ongoing period of significant activity for the
Company's management team, the investor conference call, usually
held on the week of results, will be held in Q2 2023, when
management will be able to provide a more detailed overview of
activity to shareholders and interested parties. Details of this
conference call will be provided in due course; shareholders with
questions relating to this announcement are encouraged to send them
to the Company's investor relations email address: ir@quadrise.com
.
For additional information, please contact:
Quadrise Plc +44 (0)20 7031 7321
Andy Morrison, Chairman
Jason Miles, Chief Executive
Officer
Nominated Adviser
Cenkos Securities plc +44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Broker
Shore Capital Stockbrokers
Limited +44 (0)20 7408 4090
Toby Gibbs, Rachel Goldstein
(Corporate Advisory)
Fiona Conroy (Corporate Broking)
Public & Investor Relations
Vigo Consulting
Patrick D'Ancona
Charlie Neish +44 (0)20 7390 0230
About Quadrise
Quadrise is the supplier of MSAR(R) and bioMSAR(TM) emulsion
technology, fuels and biofuels, providing innovative solutions to
reduce energy costs and greenhouse gas emissions today for clients
in the global power generation, shipping, industrial and refining
industries.
Learn more: www.quadrise.com
Certain of the information contained within this announcement is
deemed by the Company to constitute inside information as
stipulated under The Market Abuse Regulation (EU 596/2014) pursuant
to the Market Abuse (Amendment) (EU Exit) Regulations 2018. Upon
the publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Chairman's Statement
Throughout 2022, the cost of energy and the transition to
secure, sustainable fuels have remained top priorities for
governments, businesses and society as a whole. During the
reporting period and first months of 2023, Quadrise has continued
to position itself as a provider of decarbonisation solutions,
further highlighted by our recently announced name change and TIDM
'ticker' update to QED to represent the Quadrise focus on Energy
Decarbonisation and to highlight the simplicity of our solutions.
Despite frustrating delays in recent months, the board remains
confident in both the quality of our solutions and the commercial
opportunities they provide.
Pleasingly, during the reporting period and in subsequent
months, we have seen the gradual easing of supply chain constraints
and the continued global recovery from COVID-19, however the
broader economic and political landscape remains challenging with
the conflict in Ukraine continuing to impact energy prices and
economic recovery. The conflict, combined with the related
emergence of sustained inflation and recessionary risk in major
economies has, despite underlining the need for energy solutions
such as ours, prolonged the challenging business environment in
which we currently operate.
Our strategy remains to focus on key projects, such as those in
Morocco, Utah and with MSC, which represent the most efficient use
of the financial resources we currently have and should provide the
fastest and most material pathways to commercialisation. Important
milestones have been reached in each of these key projects, as
detailed by Jason below, and while further funds will be required
to see every project through to commercialisation, the Company
still expects to deliver commercial revenues in the current
financial year, a critical milestone in attracting new customers,
investors and strategic partners.
We are confident that our existing projects will be seen through
to success and beyond generating commercial revenues will provide
real world 'use cases' through which prospective customers in the
marine, power and industrial sectors can understand the tangible
environmental, operational and economic benefits of our solutions.
Our confidence comes not only from our own project discussions, but
also from promising dialogue with high-calibre organisations who
can see the potential of the Company's technology.
Beyond the significant environmental benefits that the Company's
solutions have the potential to create for our customers, Quadrise
also seeks to measure and improve its own environmental footprint
with Quadrise releasing its maiden sustainability report in
November 2022. The report provided an overview of the environmental
and economic benefits of the Company's technology as well as its
scope 1 and 2 carbon emissions data and its alignment to the UN
Sustainable Development Goals. The report, which was developed to
highlight the Company's relevance in the broader environmental
context, serves as an accessible reference point for
decision-makers in our target sectors and has been well received in
discussions with prospective and existing partners.
As a company whose purpose is to enable a more sustainable
future, understanding our own impact on the environment,
formulating a roadmap to reduce our impact, and holding ourselves
to account is a responsible action. We intend to continue reporting
on our ESG performance on an annual basis. Furthermore, it remains
our intention to qualify for the LSE Green Economy Mark, which will
provide third-party validation of our ESG credentials and increase
visibility among investors and other stakeholders, including
industrial partners.
As the Company's financial circumstances permit, we intend to
explore and advance complementary technologies to reinforce the
Company's reputation and impact in the ESG space, and help to
ensure that our products and services are part of the conversation
when potential clients are looking for decarbonisation solutions.
We maintain a healthy research and development budget and it
remains our intention to deliver a commercially competitive
net-zero fuel to market by 2030.
On behalf of the Board, I would like to thank our loyal
shareholders for their support and patience during a challenging
period for the Company. As shareholders would rightly expect from
us, the board and management team aim to reward our shareholders
for this patience by delivering commercial revenues and driving
Quadrise on to an exciting phase of growth this year and
beyond.
Financial Position
The Group held cash and cash equivalents of approximately GBP2.6
million as at 31 December 2022 (31 December 2021: GBP5.6 million),
The Directors acknowledge that this cash balance is not sufficient
to cover the Group's operating requirements through the 12-month
outlook period and that further funding will be required. In common
with many development stage companies, these conditions indicate
the existence of material uncertainty regarding the Group's and
Company's ability to continue as a going concern. However,
directors are confident that additional funding can be secured
based on the expected passing of project milestones, and t hese
accounts are, accordingly, presented on a going concern basis.
The Group recorded a loss of GBP1.7 million for the six months
to 31 December 2022 (2021: GBP1.5 million). This included
production and development costs of GBP1.0 million (2021: GBP0.7
million) and administration expenses of GBP0.6 million (2021:
GBP0.7 million).
The basic and diluted loss per share was 0.12p (2021:
0.11p).
The Group's total assets amounted to GBP6.4 million as at 31
December 2022 (GBP9.3million as at 31 December 2021). In addition
to the cash and cash equivalents, this included fixed tangible
assets (mainly plant and equipment) of GBP0.4 million and MSAR(R)
trade name of GBP2.9 million.
The Group has tax losses arising in the UK of approximately
GBP60.0m (2021: GBP58.4m) that are potentially available to be
carried forward against future profits.
Andy Morrison
Chairman
24 March 2023
Chief Executive's Statement
Quadrise: Energy Decarbonisation
The global energy market is under ever increasing pressure to
decarbonise whilst also offering consumers practical and
cost-effective energy solutions. Over the last year, energy prices
have been a key driver of global inflationary pressures,
exacerbated by the ongoing conflict in Ukraine, whilst greenhouse
gas ('GHG') emissions must be halved by 2050 if the worst effects
of climate change are to be avoided according to the IPCC. Unique
Quadrise technology allows operators in the marine, industrial and
power sectors to decarbonise whilst also reducing their energy
costs.
MSAR(R) lowers fuel consumption in diesel engines by up to 10%
and reduces GHG emissions by the same amount. GHG emissions can be
reduced by over 20% by incorporating renewable glycerine to produce
low cost bioMSAR(TM).
The shipping industry alone produces around 2.5% of the world's
total GHG emissions. Increasing pressures led by European
regulators are incentivising marine operators to develop and trial
lower-carbon and eventually net-zero solutions. These include some
more challenging long-term options such as green hydrogen, ammonia
and methanol, each of which requires significant investment and
presents considerable logistical and safety challenges. The
Quadrise solutions are available immediately as they use existing
infrastructure and can achieve both cost and GHG savings.
bioMSAR(TM) offers lower CO(2) emissions than both LNG and FAME
marine fuel blends at a lower cost per unit of energy, whilst also
being dispersible in water, non-flammable and biodegradable.
Since the initial development of bioMSAR(TM) in 2021, the
results of a testing programme designed to mirror real-world
applications have continually surpassed expectations and the fuel
is now ready for commercial deployment. Diesel engine testing at
Aquafuel and VTT has shown that when compared to marine diesel
fuel, use of bioMSAR (TM) results in:
-- Improvements in diesel engine efficiency of over 3%,
increased to up to 13% by advancing injection timing with no
increase in NOx emissions over original generator settings for
diesel fuel;
-- A 26% average reduction in equivalent CO(2) emissions over
diesel fuel on a well-to-wake basis; and
-- NOx reductions of over 20%, an important regulatory feature in the marine sector.
The December 2022 optical combustion test demonstrated that
bioMSAR(TM) combustion was similar to MSAR(R). The extended fuel
injection test of bioMSAR(TM) evaluated wear and fatigue of
components in contact with the fuel over a prolonged time (over 250
hours). The results, learnings and recommendations from these tests
are all important steps in preparing bioMSAR(TM) for commercial
use. The HAZOP recommended by Wärtsilä for bioMSAR(TM) is expected
to be carried out in Q2 2023.
In December 2022, Quadrise received and successfully
commissioned our prototype 5 tonne per hour emulsion system that
will be used for production of MSAR(R) and bioMSAR(TM) fuels for
site trials and potential blend-on-board testing on marine
vessels.
Despite the immediate and cost-effective carbon reductions that
bioMSAR(TM) can offer we recognise that the requirement for
net-zero carbon fuel solutions is becoming increasingly urgent. Our
RDI strategy is now focused on the delivery of a commercially
viable net-zero 'bioMSAR Zero' solution by 2030. As part of this
exercise, we continue to work with Vertoro and other strategic
partners to investigate the use of crude sugar oils (CSO(TM)) and
associated waste biofuel products as an alternative water-based,
lower cost, and abundant biofuel feedstock for bioMSAR(TM). This
work has now successfully progressed to diesel engine testing at
Aquafuel, with results expected early in Q2 2023.
Key project delivery
Each of our key projects in the marine, upstream and industrial
sectors is now nearing a major milestone, and our focus is on the
completion of the trials and agreements that will demonstrate
MSAR(R) and bioMSAR(TM) technology at commercial scale during
2023.
MSC - The preparatory work to enable the Letter Of No Objection
("LONO") fuel trials of both bioMSAR(TM) and MSAR(R) on board the
MSC Leandra is ongoing. Quadrise is in discussions with potential
feedstock suppliers, with the intention to conclude Tripartite
Agreements with a fuel supplier and MSC as soon as possible in
order to commence commercial-scale Proof-of-Concept and 4000-hour
LONO trials in H2 2023. The trials themselves are expected to take
nine months to conclude.
The MSC Leandra is scheduled for dry-dock during April-May 2023,
during which time it will be inspected and installed with equipment
designed to reduce emissions and improve vessel efficiency. The
vessel, formerly the Seago Istanbul, was previously used to conduct
a successful MSAR(R) trial. The emulsion fuel booster unit already
on board has been inspected and will be upgraded and tested in
readiness for use, so the vessel preparation required for the trial
is minimal.
Utah - Following the signature of the Commercial Development
Agreement with Valkor Technologies LLC ("Valkor") in April 2022,
discussions are continuing with regard to the supply of a license
and manufacturing unit to enable Valkor to produce MSAR(R) and
bioMSAR(TM) from oil produced at their oil-sand deposit sites at
Asphalt Ridge in Utah. These discussions are expected to conclude
shortly. The oil sands reserves at Asphalt Ridge comprise billions
of barrels, with Valkor having interests in multiple projects at
this location. Oil samples supplied by Valkor were successfully
converted to both MSAR(R) and bioMSAR(TM) by our RDI team at QRF in
2022.
Valkor is leading activities for the award of drilling permits
at Asphalt Ridge, following successful exploration drilling in
2022. Valkor expects the permits to be awarded in Q2 2023, with
drilling to commence as soon as weather-permits, with produced
heavy oil available for conversion to bioMSAR(TM) and MSAR(R) for
client trials during H2 2023.
These trials would then be expected to lead to commercial
supply, subject to discussions with stakeholders to finalise
agreements. Through the application of CO(2) sequestration and
proprietary new enhanced oil recovery technology in Utah, the
extracted heavy oil is anticipated to have a lower carbon intensity
than conventional oils. In addition, the very low sulphur content
and properties of this heavy oil allows it to comply with the
International Maritime Organisation's regulations on marine fuel
once converted to MSAR(R) or bioMSAR(TM), without the need for
carbon-intensive oil refining. This heavy oil would therefore be a
low carbon, low sulphur MSAR(R) or bioMSAR(TM) option for potential
use in the industrial, power and marine sectors.
The Inflation Reduction Act, signed into law on 16 August 2022,
is directing significant federal spending toward reducing carbon
emissions, and is accelerating the implementation of low-carbon and
renewable projects such as this in the United States.
Morocco - The initial MSAR (R) trial at the client's 'Site-B'
has been subject to delays, primarily due to the process of
clearing a new fuel through Moroccan customs. This process was
finally completed in late February. 60mt of MSAR (R) and 10mt of
bioMSAR(TM), together with the trial equipment are now all at Site
B. Quadrise has now completed the site engineering set up and is
concluding scheduling discussions with the client linked to its
site production programme. The trial is expected to commence in
April 2023, with the results available soon thereafter. Following a
successful trial, Quadrise expects to enter discussions to conclude
a commercial fuel supply agreement in Q2 2023 as planned, in
addition to concluding agreements for testing at other client sites
as required.
Americas - Quadrise has recently signed a Letter of Intent with
a central American power provider outlining our mutual intent for a
commercial test of MSAR(R) and bioMSAR(TM) at the provider's power
plant, with conclusion of a Test Agreement and site trial being the
precursors for entry into a Fuel Supply Agreement. Discussions are
ongoing and we expect agreements to be finalised during Q2 2023.
Together with our local agents, we continue to explore other
opportunities in the region. Discussions with a large refinery in
the Caribbean continue to progress subject to them obtaining an
operating license. Efforts continue to progress activities in
Mexico with the state oil company and utility operators.
Outlook
The invasion of Ukraine in February 2022 and the resulting
sanctions on Russian oil exports initially led to a significant
elevation in global energy prices. Over the last 12 months however,
the price of crude oil has declined by over 30%, with the prices of
oil products such as fuel oil and marine diesel decreasing by
similar amounts The price spread between fuel oil and diesel, which
drives the cost of refinery residuals and the economic case for
MSAR(R) production has only declined by 11% due to strong demand
for diesel, with current spreads continuing to provide healthy
margins for production of both MSAR(R) and bioMSAR(TM) in target
refineries. The prices of renewable biofuels including FAME and
glycerine by-products reached record prices in the summer, however
they have since reduced dramatically which has increased interest
and demand in the marine sector for biofuels, including
bioMSAR(TM).
Whilst the higher prices of biofuels resulted in limited demand
in the marine sector over the year, the introduction and
implementation of environmental regulations, particularly in
Europe, is expected to increase biofuel use in all sectors
commencing this year. Shipping is now included in the EU ETS and
Fit-for-55 regulations, that are expected to increase the use of
marine biofuels from 2024 for most vessels operating within or near
EU waters. Revenues raised via the ETS are to be reinvested into an
Innovation Fund reserved for sustainable shipping, the protection
of maritime habitats and for funding programmes to decarbonise the
maritime sector. Additionally, subsidies are still available for
renewable waste-based biofuel feedstocks such as glycerine that
should enhance the attractiveness of bioMSAR(TM) against competing
biofuels in certain bunker locations. Market conditions and trends
therefore provide a favourable environment for Quadrise as we
progress our contract discussions and business development
activities on all fronts.
The positioning of Quadrise as an Energy Decarbonisation enabler
is an important statement of intent as we progress licence
agreements and commercial-scale trials during 2023 which, on
successful completion, will lead to supply contracts and commercial
revenues from MSAR(R) and bioMSAR(TM) sales. Looking ahead, our
continued development of bioMSAR(TM) and net-zero solutions opens
up exciting opportunities to deploy our unique proven emulsion
technology platform in new applications, securing a green future
for the company and its client base.
I look forward to being able to announce material progress
across our projects in coming months and over the course of 2023.
although we have had to overcome a number of challenges this year,
and we are not immune from global industry headwinds, Quadrise
remains well-positioned to deliver commercial success on a number
of fronts and play a key role in decarbonising the shipping, power
and industrial sectors.
Jason Miles
Chief Executive Officer
24 March 2023
Consolidated Statement of Comprehensive Income
For the 6 months ended 31 December 2022
Note 6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2022
2022 2021 Audited
Unaudited Unaudited GBP'000
GBP'000 GBP'000
Continuing operations
Revenue - 75 75
Other Income 27 - -
Production and development
costs (1,049) (686) (1,447)
Other administration expenses (649) (743) (1,419)
Share option (charge)/credit 3 (77) (165) 44
Warrant charge - - (18)
Foreign exchange (loss)/gain (4) 1 5
------------------------------- ----- ----------- ----------- -----------
Operating loss (1,752) (1,518) (2,760)
Finance costs (1) (1) (3)
Finance income 4 - 1
------------------------------- ----- ----------- ----------- -----------
Loss before tax (1,749) (1,519) (2,762)
Taxation - - 164
------------------------------- ----- ----------- ----------- -----------
Total comprehensive loss for
the period from continuing
operations (1,749) (1,519) (2,598)
-------------------------------------- ----------- ----------- -----------
Loss per share - pence
Basic 4 (0.12)p (0.11)p (0.18)p
Diluted 4 (0.12)p (0.11)p (0.18)p
------------------------------- ----- ----------- ----------- -----------
Consolidated Statement of Financial Position
As at 31 December 2022
Note As at As at As at
31 December 31 December 30 June
2022 2021 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 5 418 417 398
Intangible assets 6 2,924 2,924 2,924
Non-current assets 3,342 3,341 3,322
------------------------------- ----- ------------- ------------- ---------
Current assets
Cash and cash equivalents 2,645 5,590 4,423
Trade and other receivables 100 132 103
Prepayments 148 168 177
Stock 126 61 -
------------------------------- ----- ------------- ------------- ---------
Current assets 3,019 5,951 4,703
------------------------------- ----- ------------- ------------- ---------
TOTAL ASSETS 6,361 9,292 8,025
------------------------------- ----- ------------- ------------- ---------
Equity and liabilities
Current liabilities
Trade and other payables 270 259 262
Current liabilities 270 259 262
-------------------------------- --------- --------- ---------
Equity attributable to
equity holders of the parent
Issued share capital 14,069 14,069 14,069
Share premium 77,189 77,189 77,189
Merger reserve 3,777 3,777 3,777
Share option reserve 840 3,229 1,151
Warrant reserve 18 1,017 970
Reverse acquisition reserve 522 522 522
Accumulated losses (90,324) (90,770) (89,915)
-------------------------------- --------- --------- ---------
Total shareholders' equity 6,091 9,033 7,763
-------------------------------- --------- --------- ---------
TOTAL EQUITY AND LIABILITIES 6,361 9,292 8,025
-------------------------------- --------- --------- ---------
Consolidated Statement of Changes in Equity
For the 6 months ended 31 December 2022
Issued Share Merger Share Warrant Reverse Accumulated
share premium reserve option reserve acquisition losses Total
capital GBP'000 GBP'000 reserve GBP'000 reserve GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
As at 1 July
2022 14,069 77,189 3,777 1,151 970 522 (89,915) 7,763
Loss and total
comprehensive
loss for the
period - - - - - - (1,749) (1,749)
---------------------- --------- --------- --------- --------- --------- ------------- ------------ ----------
Share option
charge - - - 77 - - - 77
---------------------- --------- --------- --------- --------- --------- ------------- ------------ ----------
Transfer of
balances relating
to expired share
options - - - (388) - - 388 -
---------------------- --------- --------- --------- --------- --------- ------------- ------------ ----------
Transfer of
balances relating
to expired warrants - (952) - 952 -
---------------------- --------- --------- --------- --------- --------- ------------- ------------ ----------
Shareholders'
equity at 31
December 2022
- unaudited 14,069 77,189 3,777 840 18 522 (90,324) 6,091
---------------------- --------- --------- --------- --------- --------- ------------- ------------ ----------
As at 1 July
2021 14,069 77,189 3,777 3,344 1,017 522 (89,531) 10,387
Loss and total
comprehensive
loss for the
period - - - - - - (1,519) (1,519)
---------------------- ------- ------- ------ -------- ------ ----- ---------- ----------
Share option
charge - - - 165 - - - 165
---------------------- ------- ------- ------ -------- ------ ----- ---------- ----------
Transfer of balances
relating to expired
share options - - - (280) - - 280 -
---------------------- ------- ------- ------ -------- ------ ----- ---------- ----------
Shareholders'
equity at 31
December 2021
- unaudited 14,069 77,189 3,777 3,229 1,017 522 (90,770) 9,033
---------------------- ------- ------- ------ -------- ------ ----- ---------- ----------
As at 1 January
2022 14,069 77,189 3,777 3,229 1,017 522 (90,770) 9,033
Loss and total
comprehensive
loss for the
period - - - - - - (1,079) (1,079)
Share option
charge - - - (209) - - - (209)
---------------------- ------- ------- ------ -------- ------ ----- --------- ---------
Warrant charge - - - - 18 - - 18
---------------------- ------- ------- ------ -------- ------ ----- --------- ---------
Transfer of balances
relating to expired
share options - - - (1,869) - - 1,869 -
---------------------- ------- ------- ------ -------- ------ ----- --------- ---------
Transfer of balances
relating to expired
warrants - - - - (65) - 65 -
---------------------- ------- ------- ------ -------- ------ ----- --------- ---------
Shareholders'
equity at 30
June 2022 - audited 14,069 77,189 3,777 1,151 970 522 (89,915) 7,763
---------------------- ------- ------- ------ -------- ------ ----- --------- ---------
Consolidated Statement of Cash Flows
For the 6 months ended 31 December 2022
Note 6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2022
2022 2021 Audited
Unaudited Unaudited GBP'000
GBP'000 GBP'000
Operating activities
Loss before tax from continuing
operations (1,749) (1,519) (2,762)
Finance costs paid 1 1 3
Finance income received (4) - (1)
Depreciation 5 57 61 120
Share option charge 3 77 165 (44)
Warrant charge - - 18
Working capital adjustments
Decrease/(increase) in
trade and other receivables 3 (15) 14
Decrease/(increase) in
prepayments 29 (73) (82)
(Increase)/decrease in
stock (126) - 61
Increase/(decrease) in
trade and other payables 8 (17) (14)
Cash utilised in operations (1,704) (1,397) (2,687)
--------------------------------- ----- ----------- ----------- -----------
Finance costs paid (1) (1) (3)
Taxation received - - 164
----------- -----------
Net cash outflow from
operating activities (1,705) (1,398) (2,526)
--------------------------------- ----- ----------- ----------- -----------
Investing activities
Finance income received 4 - 1
Purchase of fixed assets 5 (77) (18) (58)
Net cash outflow from
investing activities (73) (18) (57)
--------------------------------- ----- ----------- ----------- -----------
Financing activities
Issue of ordinary share - - -
capital
Issue costs - - -
Net cash inflow from financing - - -
activities
--------------------------------- ----- ----------- ----------- -----------
Net decrease in cash and
cash equivalents (1,778) (1,416) (2,583)
Cash and cash equivalents
at the beginning of the
period 4,423 7,006 7,006
--------------------------------- ----- ----------- ----------- -----------
Cash and cash equivalents
at the end of the period 2,645 5,590 4,423
--------------------------------- ----- ----------- ----------- -----------
Notes to the Group Financial Statements
1. General Information
Quadrise ("QED", "Quadrise", or the "Company") and its
subsidiaries (together with the Company, the "Group") are engaged
principally to develop markets for its proprietary emulsion fuels,
MSAR(R) and bioMSAR(TM) as low-cost, more environmentally friendly
substitutes for conventional heavy fuel oil for use in power
generation plants, industrial and upstream oil applications, and
marine diesel engines. The Company's ordinary shares are quoted on
the AIM market of the London Stock Exchange.
QED was incorporated on 22 October 2004 as a limited company
under UK Company Law with registered number 05267512. It is
domiciled and registered at Eastcastle House , 27-28 Eastcastle
Street, London, W1W 8DH.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Company's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 30 June
2022 Annual Report and Financial Statements, a copy of which is
available on the Company's website: www.quadrise.com .
Critical accounting estimates
The preparation of interim accounts requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities at the end of the reporting period.
Significant items subject to such estimates are set out in Note 2.4
of the Group's 30 June 2022 Annual Report and Financial Statements.
The nature and amounts of such estimates have not changed
significantly during the interim period.
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation
The financial information contained in this results announcement
has been prepared on the basis of the accounting policies set out
in the statutory financial statements for the year ended 30 June
2022. Whilst the financial information included in this
announcement has been prepared in accordance with the recognition
and measurement requirements of UK-adopted international accounting
standards and the requirements of the Companies Act 2006, this
announcement does not itself contain sufficient disclosures to
comply with IFRS. The financial information does not constitute the
Group's statutory financial statements for the years ended 30 June
2022 or 30 June 2021, but is derived from those financial
statements. Financial statements for the year ended 30 June 2022
have been delivered to the Registrar of Companies and those for the
year ended 30 June 2022 will be delivered following the Company's
Annual General Meeting. The auditors' report on both the 30 June
2022 and 30 June 2021 financial statements were unqualified and did
not contain statements under section 498 (2) or (3) of the
Companies Act 2006. The auditors' report on the 30 June 2022
financial statements did draw attention to the material uncertainty
related to going concern while the auditors' report on the 30 June
2021 financial statements did not.
2.2 Going Concern
The Group had a cash balance of GBP2.6m as at 31 December 2022.
The Directors acknowledge that this cash balance is only sufficient
to cover the Group's operating requirements up to early Q4 calendar
2023. These conditions indicate the existence of material
uncertainty regarding the Group's and Company's ability to continue
as a going concern.
The Directors have determined that the continuation of the Group
as a going concern is dependent upon successfully raising
sufficient funds in the short term, and that they have a reasonable
expectation that such funds will be raised, although no binding
funding agreements are in place at the date of this report. The
Directors therefore have determined that it is appropriate to
prepare the financial statements on a going concern basis.
These unaudited interim accounts have been prepared in
accordance with AIM Rules. In preparing this report, the group has
adopted the guidance in the AIM Rules for interim accounts which do
not require that the interim condensed group financial statements
are prepared in accordance with IAS 34 "Interim financial
reporting".
The interim accounts for the six months ended 31 December 2022
were approved by the Board on 24 March 2023.
The directors do not propose an interim dividend.
3. Share Option charge
On 3 August 2022 the Company granted a total of 21.5m share
options to Directors with a weighted average exercise price of 3.0p
and a weighted average fair value of 0.9p. The options were granted
in accordance with the provisions of the Company's Unapproved
Option Scheme 2016 ("2016 Scheme").
Director Number of Options Exercise
price
Jason Miles 7 ,500,000 3p
------------------ ---------
A ndy Morrison 4 ,000,000 3 p
------------------ ---------
L aurie Mutch 4 ,000,000 3 p
------------------ ---------
P hilip Snaith 4 ,000,000 3 p
------------------ ---------
Dilip Shah 2,000,000 3p
------------------ ---------
Total 2 1,500,000
------------------ ---------
The options will vest on the basis of 50% on the first
anniversary of grant date and 50% on the second anniversary of the
grant date. The options awarded to Jason Miles are subject to the
satisfaction of certain performance conditions prior to the vesting
date and will only vest if these conditions have been met. The
Options will be exercisable from vesting until the eighth
anniversary of grant.
The Share Option Schemes are equity settled plans, and fair
value is measured at the grant date of the option. Options issued
under the Schemes vest over a one-to-three-year period provided the
recipient remains an employee of the Group. Options also may be
exercised within one year of an employee leaving the Group at the
discretion of the Board.
The share option charge for the period was GBP77k (2022:
GBP165k).
4. Loss Per Share
The calculation of loss per share is based on the following loss
and number of shares:
6 months 6 months Year ended
ended 31 ended 30 June
December 31 December 2022
2022 2021 Audited
Unaudited Unaudited
Loss for the period from
continuing operations (GBP'000s) (1,749) (1,519) (2,598)
Weighted average number
of shares:
Basic 1,406,904,968 1,406,903,048 1,406,904,000
Diluted 1,406,904,968 1,406,903.048 1,406,904,000
Loss per share:
----------------------------------- -------------- -------------- --------------
Basic (0.12)p (0.11)p (0.18)p
----------------------------------- -------------- -------------- --------------
Diluted (0.12)p (0.11)p (0.18)p
----------------------------------- -------------- -------------- --------------
Basic loss per share is calculated by dividing the loss for the
period from continuing operations of the Group by the weighted
average number of ordinary shares in issue during the period.
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive options and warrants over ordinary shares.
Potential ordinary shares resulting from the exercise of share
options and warrants have an anti-dilutive effect due to the Group
being in a loss position. As a result, diluted loss per share is
disclosed as the same value as basic loss per share.
The 16.6 million exercisable share options and 3.0 million
exercisable warrants issued by the Company and which are
outstanding at the period-end could potentially dilute earnings per
share in the future if exercised when the Group is in a
profit-making position.
5. Property, Plant and Equipment
Leasehold Computer Software Office Plant Total
improvements equipment equipment and machinery
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Opening balance
- 1 July 2022 89 94 43 16 1,440 1,682
Additions - - - - 77 77
Closing balance
- 31 December
2022 89 94 43 16 1,517 1,759
--------------------- ---------------------------- ----------- --------- ----------- --------------- --------
Depreciation
Opening balance
- 1 July 2022 (76) (90) (43) (16) (1,059) (1,284)
Depreciation charge
for the period (1) (1) - - (55) (57)
Closing balance
- 31 December
2022 (77) (91) (43) (16) (1,114) (1,341)
--------------------- ---------------------------- ----------- --------- ----------- --------------- --------
Net book value
at 31 December
2022 - unaudited 12 3 - - 403 418
--------------------- ---------------------------- ----------- --------- ----------- --------------- --------
Cost
Opening balance
- 1 July 2021 74 98 43 16 1,397 1,628
Additions 5 1 - - 12 18
Closing balance
- 31 December
2021 79 99 43 16 1,409 1,646
--------------------- -------------------------- ----- ----- ----- -------- --------
Depreciation
Opening balance
- 1 July 2021 (74) (92) (43) (16) (943) (1,168)
Depreciation charge
for the period - (1) - - (60) (61)
Closing balance
- 31 December
2021 (74) (93) (43) (16) (1,003) (1,229)
--------------------- -------------------------- ----- ----- ----- -------- --------
Net book value
at 31 December
2021 - unaudited 5 6 - - 406 417
--------------------- -------------------------- ----- ----- ----- -------- --------
Cost
Opening balance
- 1 July 2021 74 98 43 16 1,397 1,628
Additions 15 - - - 43 58
Disposals - (4) - - - (4)
--------------------- ----- ----- ----- ----- -------- --------
Closing balance
- 30 June 2022 89 94 43 16 1,440 1,682
--------------------- ----- ----- ----- ----- -------- --------
Depreciation
Opening balance
- 1 July 2021 (74) (92) (43) (16) (943) (1,168)
Depreciation charge
for the year (2) (2) - - (116) (120)
Disposals - 4 - - - 4
--------------------- ----- ----- ----- ----- -------- --------
Closing balance
- 30 June 2022 (76) (90) (43) (16) (1,059) (1,284)
--------------------- ----- ----- ----- ----- -------- --------
Net book value
at 30 June 2022
- audited 13 4 - - 381 398
--------------------- ----- ----- ----- ----- -------- --------
6. Intangible Assets
QCC royalty MSAR(R) Technology
payments trade name and know-how Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance as at 1 July
2022 and 31 December
2022 7,686 3,100 25,901 36,687
Amortisation and
Impairment
Balance as at 1 July
2022 and 31 December
2022 (7,686) (176) (25,901) (33,763)
Net book value at
31 December 2022
- unaudited - 2,924 - 2,924
----------------------- ------------ ------------ -------------- ---------
Cost
Balance as at 1 July
2021 and 31 December
2021 7,686 3,100 25,901 36,687
Amortisation and
Impairment
Balance as at 1 July
2021 and 31 December
2021 (7,686) (176) (25,901) (33,763)
Net book value at
31 December 2021
- unaudited - 2,924 - 2,924
----------------------- -------- -------- --------- ---------
Cost
Balance at 1 July
2021 and 30 June
2022 7,686 3,100 25,901 36,687
- - - -
Amortisation and
Impairment
Balance at 1 July
2021 and 30 June
2022 (7,686) (176) (25,901) (33,763)
Net book value at
30 June 2022 - audited - 2,924 - 2,924
------------------------- -------- ------ --------- ---------
Intangibles comprise intellectual property with a cost of
GBP36.69m, including assets of finite and indefinite life. QCC
royalty payments of GBP7.69m and the MSAR(R) trade name of GBP3.10m
are termed as assets having indefinite life as it is assessed that
there is no foreseeable limit to the period over which the assets
are expected to generate net cash inflows for the Group. The assets
with indefinite life are not amortised. The remaining intangibles
amounting to GBP25.90m, primarily made up of technology and
know-how, are considered as finite assets and are now fully
amortised. The Group does not have any internally generated
intangibles.
The Group tests intangible assets annually for impairment, or
more frequently if there are indications that they might be
impaired. As at 30 June 2022, the QCC royalty payments asset and
the technology and know-how asset were fully impaired and the
MSAR(R) trade name asset had a net book value of GBP2.924m. For the
six-month period to 31 December 2022, there was no indication that
the MSAR(R) trade name asset may be impaired.
As a result, the Directors concluded that no impairment is
necessary for the six-month period to 31 December 2022.
7. Related Party Transactions
Non-executive Director Laurie Mutch is also a Director of Laurie
Mutch & Associates Limited, which has provided consulting
services to the Group. The total fees charged for the period
amounted to GBPnil (31 December 2021: GBP5k). The balance payable
at the statement of financial position date was GBPnil (31 December
2021: GBP5k).
QED defines key management personnel as the Directors of the
Company. Other than the above, and the issuance of share options to
Directors (note 3) there are no transactions with Directors other
than their remuneration.
8. Events After the End of the Reporting Period
On 27 January 2023 the Company granted a total of 14,733,038
share options to directors and employees of the Company granted in
accordance with the provisions of Company's Enterprise Management
Incentive Plan ("The Plan").
3,551,122 of the options were granted to Chief Executive Officer
Jason Miles with an exercise price of 7.5p and fair value of 0.2p.
The options replace the same number of options granted under the
Plan on 27 June 2019 that have since been cancelled by the Company.
The options will vest on 27 April 2023 and are exercisable from
vesting until 27 June 2029.
11,181,916 of the options were granted to employees of the
Company with a weighted average exercise price of 1.9p and a
weighted average fair value of 0.7p. 5,531,916 of these options
vest on 3 August 2023 and 4,450,000 vest 50% on 3 August 2023 and
50% on 3 August 2024 subject to performance conditions having been
met. The options are exercisable from vesting until 27 January
2033.
The Share Option Schemes are equity settled plans, and fair
value is measured at the grant date of the option. Options issued
under the Schemes vest over a one-to-three-year period provided the
recipient remains an employee of the Group, unless otherwise
determined by the Board. Options may be also exercised within one
year of an employee leaving the Group at the discretion of the
Board.
On 28 March 2023, the Company's name was changed from Quadrise
Fuels International plc to Quadrise plc, and the Company's TIDM
from 'QFI' to 'QED'.
9. Copies of the Interim Accounts
Copies of the interim accounts are available on the Company's
website at www.quadrise.com.
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END
IR GZGZFMRKGFZZ
(END) Dow Jones Newswires
March 29, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Quadrise (AQSE:QED.GB)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Quadrise (AQSE:QED.GB)
Storico
Da Gen 2024 a Gen 2025
