TIDMQFI
RNS Number : 7968T
Quadrise Fuels International PLC
25 March 2019
25 March 2019
Quadrise Fuels International plc
("Quadrise", "QFI", the "Company" and together with its
subsidiaries the "Group")
Interim Results for the 6 month period ended 31 December
2018
Quadrise Fuels International plc (AIM: QFI) announces its
unaudited interim results for the 6 months ended 31 December 2018
and an update on significant developments during the first quarter
of 2019.
Operational Summary
CMPDA with Freepoint
Ø Quadrise entered into a Co-Marketing and Project Development
Agreement with Freepoint Commodities LLC in November 2018, under
which Quadrise and Freepoint have commenced jointly exploring and
pursuing a number of MSAR(R) project opportunities, and seek to
progress these to long-term commercialisation. Initial focus is on
the Americas, Middle East and Asia, with the intention of jointly
investing in projects on a build-own-operate basis.
MoU and Test Programme with Oil Major
Ø Quadrise signed an MoU and MSAR(R) Pilot Test Programme with a
European oil major in November 2018, under which the two companies
are working together to identify potential MSAR(R) clients for one
of the oil major's European refineries, and pursue and obtain a
feasibility study agreement from a potential MSAR(R) fuel client
for the consumption of MSAR(R) produced at this refinery during
2019.
Ø Quadrise will test specific refinery residues for the oil
major at the Quadrise Research Facility during early Q2 2019 on a
paid basis to demonstrate and optimise the blending of refinery
residues to MSAR(R) fuel.
Services and representation agreements for Kuwait and
Morocco
Ø In Q1 2019, Quadrise entered into agreements with well-placed
agents to pursue opportunities on behalf of Quadrise for the use of
MSAR(R) in certain key markets. The agreements are with Aleph
Commodities Ltd, a UK company with significant experience in the
Middle East, to pursue opportunities in Kuwait, and with Younes
Maamar, a former CEO of the Moroccan state electricity company, to
pursue opportunities in Morocco (and potentially other countries in
Africa).
Ø Under the terms of both agreements, Quadrise has agreed a
success-based incentive structure, with material rewards only due
upon the delivery of relevant disclosable project milestones and
contracts that lead to the establishment of MSAR(R) projects and
commercial sales.
Marine Business Development
Ø Quadrise is in discussions with a number of marine market
participants regarding work to progress MSAR(R) trials alongside
the adoption of exhaust gas cleaning systems ("EGCS" or
"scrubbers"). Quadrise and many market analysts continue to believe
EGCS and high sulphur fuel will be a profitable IMO 2020 compliance
option for many container, tanker and bulker vessels.
Ø Compliance with IMO 2020 in the marine fuel market is
impacting the forward price differential between gas oil and fuel
oil for 2020, which now stands at $310-$330/tonne, providing a
sound economic backdrop for both MSAR(R) and EGCS.
Other Developments
Ø In January 2019, Quadrise raised gross proceeds of GBP1.51
million through an Open Offer to existing shareholders. These
funds, together with the Company's existing cash balances will
enable the Company to operate and advance its business development
opportunities until early October 2019.
Ø The contracts with AkzoNobel for the exclusive purchase and
supply of goods and services and for the exclusive joint
development of emulsion fuel were extended for a further year to
November 2019, with a new three year exclusivity agreement planned
with Nouryon later in 2019.
Ø The MoU with PowerSeraya was extended for a further year to
October 2020, and work continues with JGC to access major customers
in Japan.
Financial Summary
Ø GBP1.0 million in cash reserves at 31 December 2018 (31
December 2017: GBP3.4 million) which together with the gross
proceeds of GBP1.51m raised from the Open Offer post period end
allows the Company to operate until early October 2019.
Ø Loss after tax of GBP1.7 million (2017: GBP2.0 million) of
which GBP0.9 million (2017: GBP1.1 million) relates to operational
production and development costs, and GBP0.7 million (2017: GBP0.8
million) to administrative expenses.
Ø Total assets of GBP5.1 million at 31 December 2018 (2017:
GBP7.8 million).
Mike Kirk, Executive Chairman of QFI, said:
"We continue to believe that our MSAR(R) technology has
significant potential, and recent announcements demonstrate that an
increasing number of participants in the energy, power and marine
markets are aligned to this view and are incentivised to deliver
value for Quadrise and our shareholders.
The positive shifts in the liquid fuels markets, together with
the initiatives announced in the final quarter of 2018 (with
Freepoint Commodities and a European major) and in the first
quarter of 2019 (with Aleph Commodities and Younes Maamar), are
building significant momentum for Quadrise and we intend to
accelerate this to ensure that we can meet the requirement to
obtain further funding before Q4 2019, and progress to MSAR(R)
commercialisation. Our broader portfolio of opportunities
significantly reduces execution risk, as does our proven project
management experience, though we remain fully aware of the hurdles
that we need to clear to build successful projects delivering large
volumes of MSAR(R) to both the power and marine markets.
We look forward to being able to provide updates as appropriate
as we progress through 2019."
For further information, please refer to the Company's website
at www.quadrisefuels.com, or contact ir@quadrisefuels.com or
phone:
Quadrise Fuels International Plc
Mike Kirk, Executive Chairman +44 (0)20 7031 7321
Jason Miles, Chief Operating Officer
Nominated Adviser
Cenkos Securities plc
Dr Azhic Basirov +44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Joint Brokers
Peel Hunt LLP
Richard Crichton +44 (0)20 7418 8900
Ross Allister
Stockdale Securities
Andy Crossley
Daniel Harris +44 (0)20 7601 6108
Public & Investor Relations
FTI Consulting
Ben Brewerton +44 (0)20 3727 1000
Ntobeko Chidavaenzi
Notes to Editors
QFI is the supplier of MSAR(R) emulsion technology and fuels, a
low-cost alternative to heavy fuel oil (one of the world's largest
fuel markets, comprising over 450 million tons per annum) in the
global power generation, shipping, steam and refining
industries.
This announcement is inside information for the purposes of
article 7 of Regulation 596/2014.
Chairman's Statement
Introduction
As I outlined in the 2018 Annual Report, the Group's focus over
the past year has been on rebuilding shareholder confidence and
demonstrating that their long-term support continues to be
justified. During this period, we have evolved and diversified our
approach to business development, achieving and announcing a number
of important initiatives. In November 2018, we announced the
signature of the Co-Marketing and Project Development Agreement
("CMPDA") with Freepoint Commodities LLC ("Freepoint"), and also
the memorandum of understanding ("MoU") and MSAR(R) test programme
with a European oil major. We continue to work with Japan Gas
Corporation ("JGC") to access major customers in Japan, and are
also using agents in certain key markets. In Kuwait, a territory
under the CMPDA, Quadrise is now working with Aleph Commodities Ltd
("Aleph") and in Morocco the Company is being assisted by Younes
Maamar, a former CEO of the Moroccan state-owned utility ONEE.
In December 2018, we launched the open offer which closed
successfully on 21 January 2019, raising GBP1.51 million of gross
proceeds. I would like to thank all of the shareholders who
supported Quadrise in this critical fundraising. With careful
management of resources, this provides Quadrise with the ability to
continue its business development activities through to early
October 2019.
To enable the business to progress to sustainable commercial
operations, we are very clear on the requirement for near-term
business development milestones and for additional funding. We are
actively engaged in delivering on both fronts during 2019.
The positive shifts in the liquid fuel markets continued
throughout 2018. The combination of a positive macro environment
and improved MSAR(R) economics, driven by the widening spread
between Heavy Fuel Oil ("HFO") and Gas Oil as well as significant
changes in the way marine operators plan to comply with the
International Maritime Organization ("IMO") 2020 regulation,
provide a very positive backdrop for Quadrise to work with refiners
and fuel consumers in the power, marine and industrial markets to
progress MSAR(R) projects.
Our Research, Development and Innovation ("RDI") activities
remain central to our technology-led offering and work has
continued to further develop the testing facilities at the Quadrise
Research Facility ("QRF"), in order to handle those more
challenging residues that require much higher working temperatures
and pressures for MSAR(R) manufacture. We were pleased to have
hosted a number of visits by shareholders to QRF recently and these
have proven helpful in demonstrating to shareholders the depth and
breadth of both QFI's offering and the team at QRF, who are
responsible for both RDI activities and operational support for
active MSAR(R) projects.
We retain a close working relationship with our technology
partner, Nouryon, and on 26 November 2018 we announced the
extension, for one year of the Joint Development Agreement and a
Co-Operation and Exclusive Purchase and Supply Agreement for the
chemicals used to create MSAR(R) . The agreements were renewed with
previous AkzoNobel entities that transferred with the formation of
Nouryon on 1 October 2018, following the acquisition of AkzoNobel's
speciality chemicals business by The Carlyle Group. During 2019,
these agreements will be replaced with a new Exclusive Purchase and
Supply Agreement with a new Nouryon entity. We are continuing to
work closely with Nouryon to ensure that plans for MSAR(R)
additives demand can match global supply by Nouryon facilities.
Power Generation MSAR(R) Fuel
The announcements on 26 February 2019 and 6 March 2019 of
representation agreements with Aleph and Younes Maamar respectively
highlight the progress we are making in two important markets.
Firstly, in Kuwait, our agreement with Aleph has positioned
Quadrise to build on the work we had already successfully
undertaken in 2018 to demonstrate our technology to key
participants in the local refining market and we look forward to
being able to build on this substantially during 2019. Secondly,
our agreement with Younes Maamar to access the power market in
Morocco provides further opportunities.
Under the terms of both agreements, Quadrise has agreed a
success based incentive structure, with material rewards only due
upon the delivery of relevant disclosable project milestones and
contracts that lead to the establishment of MSAR(R) projects and
commercial sales. Alongside these, we are continuing to pursue
power market opportunities in a number of regions under our MoU
with a European oil major and through our existing relationships
with Freepoint, JGC and YTL Power Seraya. In addition, we continue
to seek to address the market in the Kingdom of Saudi Arabia and
are progressing a number of initiatives to reengage in the country
and evaluate other regional opportunities for fuel oil substitution
with MSAR(R) .
Marine MSAR(R) Bunker Fuel
The market background for Quadrise has been increasingly
positive in the marine market, with an increasing uptake of exhaust
gas cleaning systems ("EGCS" or "scrubbers") combined with the use
of high sulphur fuel representing the most economic IMO 2020
compliance option across the container, tanker and dry bulk
markets, as planning for implementation on 1 January 2020 gathers
pace during the second half of 2019. Quadrise is benefiting from
this market dynamic and is in discussion with a number of market
participants regarding work to progress trials ahead of making
decisions on the adoption of MSAR(R) alongside EGCS.
Work is also progressing at the IMO to build a policy framework
to support compliance of global regulations by banning the carriage
of non-compliant fuels unless EGCS are installed on vessels. In
parallel, there are growing concerns regarding the availability and
compatibility of blended 0.5% Sulphur HFO based on a recent spate
of marine fuel oil quality issues from incompatible blendstocks and
resulting engine failures. As a consequence of this, many owners
are expected to use more expensive Gas Oil if they do not have EGCS
installed. These developments are impacting the forward price
differential between Gas Oil and HFO for 2020, which now stands at
US$310-US$330/tonne, providing a sound economic backdrop for both
MSAR(R) and EGCS. Quadrise and many market analysts continue to
believe that high sulphur fuel and EGCS will be the lowest cost
option compared with low sulphur alternatives.
Cost control
We continue to operate with a streamlined senior management
team, with our Head of Projects Mark Whittle working alongside the
Chief Operating Officer Jason Miles and myself to progress business
development activities in the refining, power and marine markets.
QRF is managed by our Head of Operations Bernard Johnston, who is
based at our new lower cost premises that we moved into during Q2
2018. During the period under review, our programme of work and
formal agreement with the University of Surrey came to an end, with
the outcomes of this work now being progressed in-house at QRF
under the supervision of our Head of RDI and Quality, Patrick
Brunelle, with further resultant cost savings.
As part of the measures taken to conserve cash resources, with
effect from 1 September 2017, I agreed to defer 50% of my salary
and the Non-executive Directors deferred approximately 30% of their
fees (reducing these temporarily to GBP24k per annum). The deferral
was for an initial 12-month period and then extended further to 31
March 2019. Following the successful open offer, the deferred
portion of my salary and the Non-executive Directors' fees will be
repaid before the end of the financial year. The Directors and I
have agreed that the previously announced 25% uplift portion (as
compensation for this contribution to cost control) will now only
apply to the period up to 31 December 2018, and will not be payable
unless and until the Group is demonstrably funded to the point of
commercial revenues.
Financial Position
The Group held cash and cash equivalents of approximately GBP1.0
million as at 31 December 2018 and raised approximately GBP1.5
million in gross proceeds from the successful open offer in January
2018. The Group continues to operate on a debt free basis whilst
maintaining a stringent control of costs.
The Group recorded a loss of GBP1.7m for the six months to 31
December 2018 (2017: GBP2.0m). This included production and
development costs of GBP0.9m (2017: GBP1.1m) and administration
expenses of GBP0.7m (2017: GBP0.8m).
Basic and diluted loss per share was 0.19p (2017: 0.23p).
The Group's total assets amounted to GBP5.1 million as at 31
December 2018 (GBP7.8 million as at 31 December 2017). Apart from
the cash and cash equivalents, this included fixed tangible assets
(mainly plant and equipment) of GBP0.8 million and MSAR(R) trade
name of GBP2.9 million.
A provision of GBP189k for the costs of decommissioning the
MSAR(R) manufacturing facility at the Cepsa refinery in Spain has
been recognised. Decommissioning is expected to be completed during
Q2 2019.
The Group has accumulated tax losses of approximately GBP48.7
million (2017: GBP47.0 million) available to be carried forward
against future profits.
Outlook - Current trading and prospects.
We are now building significant momentum across a broad range of
opportunities in the power and marine markets, and our efforts
remain focused on moving these forward at pace through the
remainder of 2019. Our evolved business development approach is
reducing risk through having a broader portfolio of opportunities.
Alongside this, our proven project management expertise enhances
our ability to engage with leading companies and reduces the
delivery risk to project activities.
We continue to believe that our MSAR(R) technology has
significant potential, and recent announcements demonstrate that an
increasing number of participants in the energy, power and marine
markets are aligned to this view and are incentivised to deliver
value for Quadrise and our shareholders. We look forward to being
able to provide updates as appropriate as we progress through
2019.
Mike Kirk
Executive Chairman
22 March 2019
Condensed Consolidated Statement of Comprehensive Income
For the 6 months ended 31 December 2018
Note 6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2018
2018 2017 Audited
Unaudited Unaudited GBP'000
GBP'000 GBP'000
Continuing operations
Revenue - - 9
Production and development
costs (934) (1,107) (2,002)
Other administration expenses (738) (830) (1,518)
Share option charge (6) (40) (53)
Foreign exchange loss 11 (5) (3)
------------------------------- ----- ----------- ----------- -----------
Operating loss (1,667) (1,982) (3,567)
Finance costs (3) (4) (7)
Finance income 1 16 18
------------------------------- ----- ----------- ----------- -----------
Loss before tax (1,669) (1,970) (3,556)
Taxation - - 294
------------------------------- ----- ----------- ----------- -----------
Total comprehensive loss for
the period from continuing
operations (1,669) (1,970) (3,262)
-------------------------------------- ----------- ----------- -----------
Loss per share - pence
Basic 4 (0.19)p (0.23)p (0.38) p
Diluted 4 (0.19)p (0.23)p (0.38) p
------------------------------- ----- ----------- ----------- -----------
Condensed Consolidated Statement of Financial Position
As at 31 December 2018
Note As at As at As at
31 December 31 December 30 June
2018 2017 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 5 811 1,024 961
Intangible assets 6 2,924 2,924 2,924
Non-current assets 3,735 3,948 3,885
------------------------------- ----- ------------- ------------- ---------
Current assets
Cash and cash equivalents 967 3,437 2,229
Trade and other receivables 166 245 188
Prepayments 163 98 122
Stock 61 61 61
------------------------------- ----- ------------- ------------- ---------
Current assets 1,357 3,841 2,600
------------------------------- ----- ------------- ------------- ---------
TOTAL ASSETS 5,092 7,789 6,485
------------------------------- ----- ------------- ------------- ---------
Equity and liabilities
Current liabilities
Trade and other payables 481 425 400
Provision for decommissioning 189 - -
------------------------------- --------- --------- ---------
Current liabilities 670 425 400
-------------------------------- --------- --------- ---------
Equity attributable to
equity holders of the parent
Issued share capital 8,622 8,622 8,622
Share premium 73,642 73,642 73,642
Share option reserve 3,346 3,420 3,432
Reverse acquisition reserve 522 522 522
Accumulated losses (81,710) (78,842) (80,133)
-------------------------------- --------- --------- ---------
Total shareholders' equity 4,422 7,364 6,085
-------------------------------- --------- --------- ---------
TOTAL EQUITY AND LIABILITIES 5,092 7,789 6,485
-------------------------------- --------- --------- ---------
Condensed Consolidated Statement of Changes in Equity
For the 6 months ended 31 December 2018
Issued Reverse
share Share Share acquisition Accumulated
capital premium option reserve losses Total
GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
GBP'000
As at 1 July
2018 8,622 73,642 3,432 522 (80,133) 6,085
Loss and total
comprehensive
loss for the
period - - - - (1,669) (1,669)
Share option
charge - - 6 - - 6
-------------------- --------- ---------- ---------- ------------- -------------- ----------
Transfer of
balances relating
to expired
share options - - (92) - 92 -
-------------------- --------- ---------- ---------- ------------- -------------- ----------
Shareholders'
equity at 31
December 2018 8,622 73,642 3,346 522 (81,710) 4,422
-------------------- --------- ---------- ---------- ------------- -------------- ----------
As at 1 July
2017 8,622 73,642 3,704 522 (77,196) 9,294
Loss and total
comprehensive
loss for the
period - - - - (1,970) (1,970)
Share option
charge - - 40 - - 40
-------------------- ------ ------- ------ ---- --------- ------------------
Transfer of
balances relating
to expired
share options - - (324) - 324 -
-------------------- ------ ------- ------ ---- --------- ------------------
Shareholders'
equity at 31
December 2017 8,622 73,642 3,420 522 (78,842) 7,364
-------------------- ------ ------- ------ ---- --------- ------------------
As at 1 January
2018 8,622 73,642 3,420 522 (78,842) 7,364
Loss and total
comprehensive
loss for the
period - - - - (1,292) (1,292)
Share option
charge - - 13 - - 13
-------------------- ------ ------- ------ ---- --------- ----------------
Transfer of
balances relating
to expired
share options - - (1) - 1 -
-------------------- ------ ------- ------ ---- --------- ----------------
Shareholders'
equity at 30
June 2018 8,622 73,642 3,432 522 (80,133) 6,085
-------------------- ------ ------- ------ ---- --------- ------ --------
Condensed Consolidated Statement of Cash Flows
For the 6 months ended 31 December 2018
Note 6 months 6 months Year ended
ended 31 ended 31 30 June
December December 2018
2018 2017 Audited
Unaudited Unaudited GBP'000
GBP'000 GBP'000
Operating activities
Loss before tax from continuing
operations (1,669) (1,970) (3,556)
Finance costs paid 3 4 7
Finance income received (1) (16) (18)
Loss on disposal of fixed
assets 5 25 - -
Depreciation 5 130 106 230
Share option charge 6 40 53
Working capital adjustments
Decrease in trade and other
receivables 22 57 114
(Increase)/decrease in
prepayments (41) 55 31
Increase in trade and other
payables 81 178 153
Increase in provision for 189 - -
decommissioning
Cash utilised in operations (1,255) (1,546) (2,986)
--------------------------------- ----- ----------- ----------- -----------
Finance costs paid (3) (4) (7)
Taxation received - - 294
----------- -----------
Net cash outflow from operating
activities (1,258) (1,550) (2,699)
--------------------------------- ----- ----------- ----------- -----------
Investing activities
Finance income received 1 16 18
Purchase of fixed assets 5 (5) (74) (135)
Net cash outflow from investing
activities (4) (58) (117)
--------------------------------- ----- ----------- ----------- -----------
Net decrease in cash and
cash equivalents (1,262) (1,608) (2,816)
Cash and cash equivalents
at the beginning of the
period 2,229 5,045 5,045
--------------------------------- ----- ----------- ----------- -----------
Cash and cash equivalents
at the end of the period 967 3,437 2,229
--------------------------------- ----- ----------- ----------- -----------
Notes to the Group Condensed Financial Statements
1. General Information
Quadrise Fuels International plc ("QFI", "Quadrise", or the
"Company") and its subsidiaries (together with the Company, the
"Group") are engaged principally in the manufacture and marketing
of emulsified fuel for use in power generation, industrial and
marine diesel engines and steam generation applications. The
Company's ordinary shares are quoted on the AIM market of the
London Stock Exchange.
QFI was incorporated on 22 October 2004 as a limited company
under UK Company Law with registered number 05267512. It is
domiciled and registered at Gillingham House, 38-44 Gillingham
Street, London, SW1V 1HU.
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation
The interim accounts have been prepared in accordance with IAS
34 'Interim financial reporting' and on the basis of the accounting
policies set out in the annual report and accounts for the year
ended 30 June 2018, which have been prepared in accordance with
International Financial Reporting Standards as adopted for use by
the European Union. The interim accounts are unaudited and do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006.
The same accounting policies, presentation and methods of
computation have been followed in these unaudited interim financial
statements as those which were applied in the preparation of the
Group's annual statements for the year ended 30 June 2018, upon
which the auditors issued an unqualified opinion, and which have
been delivered to the registrar of companies.
The interim accounts have been drawn up using accounting
policies and presentation expected to be adopted in the Group's
annual financial statements for the year ended 30 June 2019.
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective and in
some cases have not yet been adopted by the European Union. The
Directors do not expect that the adoption of these standards will
have a material impact on the financial information of the Group in
future periods.
The interim accounts for the six months ended 31 December 2018
were approved by the Board on 22 March 2019.
The directors do not propose an interim dividend.
3. Segmental Information
For the purpose of segmental information the reportable
operating segment is determined to be the business segment. The
Group principally has one business segment, the results of which
are regularly reviewed by the Board. This business segment is a
business to produce emulsion fuel (or supply the associated
technology to third parties) as a low cost substitute for
conventional HFO for use in power generation plants and industrial
and marine diesel engines.
The Group's only geographical segment during the period was the
UK.
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 2018
2018 2017 Audited
Unaudited Unaudited
Loss for the period from
continuing operations (GBP'000s) (1,669) (1,970) (3,262)
Weighted average number
of shares:
Basic 862,204,976 862,204,976 862,204,976
Diluted 862,204,976 862,204,976 862,204,976
Loss per share:
----------------------------------- ------------ ------------- ------------
Basic (0.19)p (0.23)p (0.38)p
----------------------------------- ------------ ------------- ------------
Diluted (0.19)p (0.23)p (0.38)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 22.0
million share options 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 2018 166 91 43 16 1,428 1,744
Additions - - - - 5 5
Disposals - - - - (47) (47)
--------------------- -------------- ----------- --------- ----------- --------------- --------
Closing balance
- 31 December
2018 166 91 43 16 1,386 1,702
--------------------- -------------- ----------- --------- ----------- --------------- --------
Depreciation
Opening balance
- 1 July 2018 (109) (63) (36) (16) (559) (783)
Depreciation charge
for the period (42) (8) (3) - (77) (130)
Disposals - - - - 22 22
--------------------- -------------- ----------- --------- ----------- --------------- --------
Closing balance
- 31 December
2018 (151) (71) (39) (16) (614) (891)
--------------------- -------------- ----------- --------- ----------- --------------- --------
Net book value
at 31 December
2018 15 20 4 - 772 811
--------------------- -------------- ----------- --------- ----------- --------------- --------
Cost
Opening balance
- 1 July 2017 107 91 43 16 1,352 1,609
Additions - - - - 74 74
Closing balance
- 31 December
2017 107 91 43 16 1,426 1,683
--------------------- ----- ----- ----- ----- ------ ------
Depreciation
Opening balance
- 1 July 2017 (67) (47) (31) (15) (393) (553)
Depreciation charge
for the period (12) (8) (2) (1) (83) (106)
Closing balance
- 31 December
2017 (79) (55) (33) (16) (476) (659)
--------------------- ----- ----- ----- ----- ------ ------
Net book value
at 31 December
2017 28 36 10 - 950 1,024
--------------------- ----- ----- ----- ----- ------ ------
Cost
Opening balance
- 1 July 2017 107 91 43 16 1,352 1,609
Additions 59 - - - 76 135
Closing balance
- 30 June 2018 166 91 43 16 1,428 1,744
--------------------- ------ ----- ----- ----- ------ ------
Depreciation
Opening balance
- 1 July 2017 (67) (47) (31) (15) (393) (553)
Depreciation charge
for the year (42) (16) (5) (1) (166) (230)
Closing balance
- 30 June 2018 (109) (63) (36) (16) (559) (783)
--------------------- ------ ----- ----- ----- ------ ------
Net book value
at 30 June 2018 57 28 7 - 869 961
--------------------- ------ ----- ----- ----- ------ ------
6. Intangible Assets
QCC royalty MSAR(R) Technology
payments trade name and know-how Total
Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance as at 1 July
2018 and 31 December
2018 7,686 3,100 25,901 36,687
Amortisation and
Impairment
Balance as at 1 July
2018 and 31 December
2018 (7,686) (176) (25,901) (33,763)
Net book value at
31 December 2018 - 2,924 - 2,924
----------------------- ------------ ------------ -------------- ----------
Cost
Balance as at 1 July
2017 and 31 December
2017 7,686 3,100 25,901 36,687
Amortisation and
Impairment
Balance as at 1 July
2017 and 31 December
2017 (7,686) (176) (25,901) (33,763)
Net book value at
31 December 2017 - 2,924 - 2,924
----------------------- -------- -------- --------- ---------
Cost
Balance at 1 July
2017 and 30 June
2018 7,686 3,100 25,901 36,687
- - - -
Amortisation and
Impairment
Balance at 1 July
2017 and 30 June
2018 (7,686) (176) (25,901) (33,763)
Net book value at
30 June 2017 - 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 2018, the QCC royalty payments asset was
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 2018,
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 2018.
7. Available for Sale Investments
At the statement of financial position date, the Group held a
20.44% share in the ordinary issued capital of Quadrise Canada
Corporation ("QCC"), a 3.75% share in the ordinary issued capital
of Paxton Corporation ("Paxton"), a 9.54% share in the ordinary
issued capital of Optimal Resources Inc. ("ORI") and a 16.86% share
in the ordinary issued capital of Porient Fuels Corporation
("Porient"), all of which are incorporated in Canada.
QCC is independent of the Group and is responsible for its own
policy-making decisions. There have been no material transactions
between QCC and the Group during the period or any interchange of
managerial personnel. As a result, the Directors do not consider
that they have significant influence over QCC and as such this
investment is not accounted for as an associate.
The Group has no immediate intention to dispose of its available
for sale investments unless a beneficial opportunity to realise
these investments arises.
Given that there is no active market in the shares of any of
above companies, the Directors have determined the fair value of
the unquoted securities at 31 December 2018. The shares in each of
these companies were valued at CAD $nil on 1 July 2018. Shareholder
communications received during the period to 31 December 2018
indicate that the business models for each of these companies
remain highly uncertain, with minimal possibility of any material
value being recovered from their asset base. On that basis, the
directors have determined that the investments should continue to
remain valued at CAD $nil at 31 December 2018.
8. Related Party Transactions
QFI defines key management personnel as the Directors of the
Company. There are no transactions with Directors other than their
remuneration.
9. Seasonality
The operations of the Group are not affected by seasonal
fluctuations.
10. Commitments and Contingencies
The Group and the Company have entered into commercial leases
for the rental of operational and office premises. The leases
expire on 28(th) February 2019 and 25(th) March 2019, and there are
no restrictions placed on the Group or Company by entering into
this lease. The minimum future lease payments for the
non-cancellable leases are as follows:
31 December 31 December 30 June
2018 GBP'000 2017 2018
GBP'000 GBP'000
Operational and Office
premises:
One year 28 106 96
Two to five years - 25 -
After five years - - -
On 6 February 2019, the lease for commercial premises was
renewed for a period of 12 months.
On 20 February 2019, the lease for the rental of office premises
was renewed for a period of 3.5 years.
Minimum non cancellable lease payments arising as a result of
the lease renewals totalled GBP204k.
A contingent liability of GBP45k exists as at the statement of
financial position date, comprising the 25% uplift on the portion
of Directors salaries and fees deferred during the period from 1
September 2017 to 31 December 2018, together with the resulting
employers National Insurance contributions. This sum will be
payable in the event that the Group obtains the funding necessary
to progress to commercial revenues.
11. Events After the End of the Reporting Period
On 21 January 2019 the Company announced that it had raised
approximately GBP1.51 million in gross proceeds from an Open Offer.
A total of 60,506,919 Open Offer shares were admitted for trading
on 22 January 2019.
On 26 February 2019, the Company announced that it had entered
into a Services Agreement with Aleph Commodities Ltd. In accordance
with this agreement, up to 40 million warrants over Ordinary Shares
in the Company may be awarded to Aleph provided certain key
milestones are achieved.
On 6 March 2019, the Company announced that it had entered into
a Representation Agreement with a consultant. In accordance with
this agreement, up to 13 million warrants over Ordinary Shares in
the Company may be awarded to the consultant provided certain key
milestones are achieved.
12. Copies of the Interim Accounts
Copies of the interim accounts are available on the Company's
website at www.quadrisefuels.com and from the Company's registered
office, Gillingham House, 38-44 Gillingham Street, London, SW1V
1HU.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BRGDXSUDBGCD
(END) Dow Jones Newswires
March 25, 2019 03:00 ET (07:00 GMT)
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