Quadrise Fuels International — Doubling down on delivery

Quadrise (AIM: QED)

Currency in GBP

Last close As at 26/05/2023

GBP0.01

−0.05 (−4.50%)

Market capitalisation

GBP15m

Quadrise Fuels International — Doubling down on delivery

During FY22 Quadrise signed agreements progressing the three key projects with MSC Shipmanagement (MSC), its client in Morocco and Valkor in Utah, following which it expects trials to start soon. Successful delivery on these existing projects should enable Quadrise to become revenue generating during FY23 (H1 CY23), subject to the timely completion of commercial project agreements.

Anne Crow

Written by

Anne Margaret Crow

Director, TMT & Industrials

Quadrise Fuels International

Doubling down on delivery

Alternative energy

Spotlight - Update

6 October 2022

Price

1.35p

Market cap

£19m

Share price graph

Share details

Code

QFI

Listing

AIM

Shares in issue

1,406.9m

Net cash as end June 2022

£4.4m

Business description

Quadrise is the innovator and global supplier of disruptive refinery upgrading technology that produces a synthetic, enhanced heavy fuel oil called MSAR and a biofuel called bioMSAR. The technology provides a low-cost and cleaner fuel for marine, power and industrial applications.

Bull

bioMSAR gives better CO2 and cost savings than existing biofuels.

Adoption of MSAR improves economics of refinery production and upstream operations.

Adoption of MSAR reduces costs and emissions in industrial, marine bunker and power markets.

Bear

Economics of adoption dependent on oil product spreads.

Ability to progress trials adversely affected by many factors outside Quadrise’s control.

Size of company limits number of projects that can be progressed at any one time.

Analyst

Anne Margaret Crow

+44 (0)20 3077 5745

Quadrise Fuels International is a research client of Edison Investment Research Limited

During FY22 Quadrise signed agreements progressing the three key projects with MSC Shipmanagement (MSC), its client in Morocco and Valkor in Utah, following which it expects trials to start soon. Successful delivery on these existing projects should enable Quadrise to become revenue generating during FY23 (H1 CY23), subject to the timely completion of commercial project agreements.

Historical performance

Year
end

Revenue
(£m)

EBITDA
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E

(x)

06/19

0.0

(2.8)

(3.0)

(0.32)

0.00

N/A

06/20

0.0

(3.0)

(3.3)

(0.32)

0.00

N/A

06/21

0.0

(2.8)

(2.8)

(0.23)

0.00

N/A

06/22

0.0

(2.7)

(2.8)

(0.19)

0.00

N/A

Source: Company accounts. Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Status of key trial programmes

Following some minor delays, management currently expects the roll-out to be as follows: 1) Quadrise and MSC to start on-vessel, proof-of-concept (POC) tests in Q1 CY23, potentially leading to commercial revenues from H2 CY23 onwards; 2) an industrial-scale trial at a site operated by a Moroccan chemicals and mining group to commence in Q4 CY22, potentially leading to commercial revenues in H1 CY23; and (3) Valkor to commence production drilling at a site in Utah later this calendar year, following which Valkor and Quadrise will enter into negotiations to commercialise MSAR and bioMSAR at Valkor’s sites, potentially leading to commercial revenues in H1 CY23. In addition, Quadrise is progressing discussions with candidate sites in Panama and Honduras to trial MSAR and bioMSAR at power plants ahead of potential commercial supply in H2 CY23.

Cash runway into CY23

Quadrise is still pre-revenue. Stripping out share option and exceptional charges, operating losses reduced by £0.1m year-on-year during FY22 at £2.8m. Free cash outflow increased by £0.2m to £2.6m. The group had £4.4m in cash and no debt or convertible securities at end FY22. Management estimates that this is sufficient to reach commercial revenues in H1 CY23 and to cover project expenditure and fixed costs up to early H2 CY23, although additional funding will be required to bridge the gap to sustainable cash generation from H2 CY24 onwards.

Valuation: Modest adoption transformational

We are not presenting forecasts at this stage. However, as a rough guide, based on data from the company, our scenario analysis calculates that even modest adoption of MSAR or bioMSAR could generate material revenues and take the company to sustainable profitability. For example, adoption across only 9% of MSC’s global fleet could generate around $84m in licence revenues and require minimal capex.

FY22 financial performance

Quadrise is still pre-revenue. Stripping out share option and exceptional charges, operating losses reduced by £0.1m year-on-year during FY22 to £2.8m, reflecting reduced professional advisor fees and lower office costs following the move from the company’s previous head office in February 2021. Free cash outflow increased by £0.2m to £2.6m as the prior year number was flattered by positive working capital movements. The group had £4.4m in cash and no debt or convertible securities at end FY22.

FY22 – progress on key programmes

Exhibit 1: Project timeline CY22-23

Source: Quadrise Fuels International

bioMSAR – highly encouraging results from test programme

MSAR is already more environmentally friendly than heavy fuel oil (HFO), but Quadrise went a step further with the launch of bioMSAR in December 2020. Initial results announced in August 2021 from independent tests carried out by VTT in Finland gave average CO2 savings of 26% on a well-to-wake basis compared with conventional diesel. Part of the CO2 reduction was attributable to an increase in engine efficiency of up to 7%. This result is better than the CO2 savings achieved with existing biofuel blends, which are typically in the region of 10–15%. NOx emissions were lower than for HFO and comparable to diesel. Smoke and particulate levels were very low, as were unburned hydrocarbons emissions, due to efficient fuel combustion. Further tests carried out by Aquafuel Research, the results of which were announced in January 2022, showed that engine efficiency could be increased by more than 13% by advancing injection timing, further reducing fuel consumption and CO2 emissions. Typically, higher engine efficiencies result in increased combustion temperatures and NOx emissions. However, it was possible to reduce the inlet air temperature with bioMSAR to the same level as with diesel, resulting in NOx levels around 45% lower than diesel fuel.

bioMSAR is currently made from a mixture of renewable glycerine, oil residues, water and specialist surfactants from Nouryon, so there is a risk that commercial volumes may be restricted longer term by glycerine availability. Quadrise is investigating several options to address this potential issue. Post period-end it announced a joint development agreement with biofuel specialists Vertoro under which the two companies will seek to progress the use of Vertoro’s advanced crude sugar oil, which is a by-product of its process for extracting lignin from waste woody biomass, as a cost-effective supplement or alternative to glycerine.

Marine programme with MSC Shipmanagement

In January 2021 Quadrise announced a joint development agreement with MSC Shipmanagement under which MSC was to carry out a letter of no objection (LONO) trial of MSAR and potentially bioMSAR, which had only recently been launched, on representative commercial vessels in its global fleet. These trials are essential preliminaries to Quadrise potentially supplying its proprietary fuels to MSC for use in its fleet, which is the largest container ship fleet in the world, thus helping MSC to reduce its greenhouse gas emissions. In July 2022, Quadrise signed a framework agreement with MSC covering both POC tests and subsequent LONO trials. The POC tests will take place on the MSC Leandra, which was previously named the Seago Istanbul and was used by Maersk for its successful demonstrations of MSAR during 2016 and 2017. A project team from Quadrise has already checked that the MSAR systems installed on the vessel for the Maersk tests are ready for fuel testing and commissioning tests are scheduled for completion in early Q4 CY22. The new LONO tests will require 25,000 tonnes each of bioMSAR and MSAR, which will be produced by Quadrise and sold to MSC. Management intends to complete making arrangements to secure fuel for the trials this quarter.

The POC tests will commence in Q1 CY23 after the Leandra returns from its scheduled maintenance and regulatory class inspection in a dry dock. This is slightly later than the Q4 CY22 start shown in our March note because of the time taken to purchase the Leandra. Assuming that the results from the POC tests are positive, MSC will then conduct lengthier trials (4,000 hours of operation) to provide commercial operating experience, potentially culminating in obtaining LONOs from the engine manufacturer, Wärtsilä. Management expects that the LONO trial will take around six to eight months to complete. As the trials progress, Quadrise, MSC and other key stakeholders such as refineries will commence discussions regarding the supply of bioMSAR and/or MSAR for use by MSC’s global fleet.

Quadrise is also launching a "Blend-on-Board" solution for the production of MSAR or bioMSAR emulsions on vessels. This may be tested under the MSC agreement or with new marine clients that the company is approaching.

Industrial applications with partner in Morocco

Quadrise continues to work with an international chemicals and mining group headquartered in Morocco, which is considering using MSAR and bioMSAR as a substitute for HFO to generate power at some of its operations. Quadrise successfully completed a pilot trial at one of the partner’s sites (site A) in Morocco in October 2020. A follow-up industrial-scale trial at a different site (site B) owned by the same group was delayed from Q1 CY21 because of a combination of site access restrictions related to COVID-19 and an internal management reorganisation at the client, which held up signature of a new material transfer and cooperation agreement until May 2022. Signature has cleared the way for the industrial-scale trial to take place in Q4 CY22, following a couple of months delay caused by global electronic component shortages which meant that a new MSAR manufacturing unit was not able to start producing fuel for the trial when scheduled. The fuel has now been manufactured.

Once the trial has completed, Quadrise will provide the client with a written report on the efficacy of using MSAR and bioMSAR. Provided that the client’s stated parameters regarding MSAR performance and product quality are met, by the end of CY22 the parties will enter into discussions regarding potential commercial supply, which could potentially commence in H1 CY23. An industrial demonstration test at site A, which will be covered by a further agreement, is contingent on the results of the tests at site B.

Converting oil from oil sands in Utah

In April 2022, Quadrise signed a phased commercial development agreement with energy services company Valkor Technologies to commercialise MSAR and bioMSAR technology at Valkor’s projects in Utah. Valkor has equity stakes in multiple heavy oil projects in Utah including Greenfield Energy, Petroteq Energy and Heavy Sweet Oil LLC. The agreement provides a framework for the potential delivery of commercial revenues from bioMSAR/MSAR manufactured using oil from one or more of these projects. For several months ending August 2022, Valkor carried out an extensive core sampling programme to accurately define the recoverable reserves from surface oil sands and sub-surface heavy oil in Utah. It also worked with partners to optimise the solvent extraction process for extracting oil from the sand. Valkor is now waiting for drilling permits for four pilot wells which it hopes will enable it to extract its first oil later in Q4 CY22. Some of this oil will then be used by Quadrise for on-site trials converting oil to bioMSAR and MSAR. We note that Quadrise has already demonstrated it can convert oil from this area into MSAR and bioMSAR, so this step should involve working out the optimal process for converting the oil rather than the overall viability of conversion. As a result of delays in securing drilling permits, this is later than the timescale outlined in our March note, when production drilling was expected to commence at a Utah site in the summer, resulting in oil being available for on-site trials converting oil to bioMSAR and MSAR during H2 CY22. In that note, we stated that Quadrise and Valkor would agree full commercial terms for an MSAR and/or bioMSAR licence and supply agreement by October 2022, potentially resulting in commercial sales by the end of CY22. The two parties are currently finalising the commercial terms with the aim of concluding an agreement later this quarter.

Valuation: Modest adoption transformational

Since Quadrise has yet to generate commercial revenues, its value resides in the potential future cash flows generated from volume production of MSAR and bioMSAR. As there is substantial uncertainty on when the various projects Quadrise is working on with its partners will progress to commercialisation, precluding the preparation of estimates, we presented a high-level scenario analysis in our November 2021 note based on data from the company, which we understand is derived from the numerous detailed case studies it has carried out for prospective clients. The analysis concluded that adoption across only 9% of MSC’s global fleet could generate around $84m in licence revenues and $13.8m in EBITDA and be transformational for Quadrise. The projects in Morocco and Utah are smaller.

Exhibit 2: Financial summary

£000s

2019

2020

2021

2022

30-June

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

22

0

17

75

EBITDA

 

 

(2,780)

(3,006)

(2,752)

(2,671)

Operating Profit (before amort. and except.)

 

 

(3,010)

(3,178)

(2,887)

(2,791)

Amortisation of acquired intangibles

0

0

0

0

Exceptionals

0

(1,199)

(1,266)

(13)

Share-based payments

(154)

(474)

(303)

44

Reported operating profit

(3,164)

(4,851)

(4,456)

(2,760)

Net Interest

(3)

(139)

46

(2)

Profit Before Tax (norm)

 

 

(3,013)

(3,317)

(2,841)

(2,793)

Profit Before Tax (reported)

 

 

(3,167)

(4,990)

(4,410)

(2,762)

Reported tax

184

147

150

164

Profit After Tax (norm)

(2,829)

(3,170)

(2,691)

(2,629)

Profit After Tax (reported)

(2,983)

(4,843)

(4,260)

(2,598)

Minority interests

0

0

0

0

Net income (normalised)

(2,829)

(3,170)

(2,691)

(2,629)

Net income (reported)

(2,983)

(4,843)

(4,260)

(2,598)

Average Number of Shares Outstanding (m)

888.7

982.8

1,175.4

1,406.9

EPS - normalised (p)

 

 

(0.32)

(0.32)

(0.23)

(0.19)

EPS - diluted normalised (c)

 

 

(0.32)

(0.32)

(0.23)

(0.19)

EPS - basic reported (c)

 

 

(0.34)

(0.49)

(0.36)

(0.18)

Dividend per share (p)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

3,654

3,506

3,384

3,322

Intangible Assets

2,924

2,924

2,924

2,924

Tangible Assets

730

582

460

398

Investments & other

0

0

0

0

Current Assets

 

 

1,396

2,766

7,279

4,703

Stocks

61

61

61

0

Debtors

169

213

117

103

Cash & cash equivalents

1,060

2,380

7,006

4,423

Other

106

112

95

177

Current Liabilities

 

 

(288)

(2,243)

(276)

(262)

Creditors

(288)

(198)

(276)

(262)

Tax and social security

0

0

0

0

Short term borrowings

0

0

0

0

Convertible securities

0

(2,045)

0

0

Long Term Liabilities

 

 

0

0

0

0

Long term borrowings

0

0

0

0

Other long term liabilities

0

0

0

0

Net Assets

 

 

4,762

4,029

10,387

7,763

Minority interests

0

0

0

0

Shareholders' equity

 

 

4,762

4,029

10,387

7,763

CASH FLOW

Op Cash Flow before WC and tax

(2,780)

(3,072)

(2,752)

(2,671)

Working capital

(77)

(140)

191

(21)

Exceptional & other

130

65

7

5

Tax

184

147

150

164

Net operating cash flow

 

 

(2,543)

(3,000)

(2,404)

(2,523)

Capex

(24)

(24)

(29)

(58)

Acquisitions/disposals

0

0

0

0

Net interest

(3)

1

46

(2)

Equity financing

1,401

2,343

6,513

0

Dividends

0

0

0

0

Net Cash Flow

(1,169)

(680)

4,126

(2,583)

Opening net debt/(cash)

 

 

(2,229)

(1,060)

(2,380)

(7,006)

FX

0

0

0

0

Other non-cash movements

0

2,000

500

0

Closing net debt/(cash)

 

 

(1,060)

(2,380)

(7,006)

(4,423)

Source: Company data

General disclaimer and copyright

This report has been commissioned by Quadrise Fuels International and prepared and issued by Edison, in consideration of a fee payable by Quadrise Fuels International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Quadrise Fuels International and prepared and issued by Edison, in consideration of a fee payable by Quadrise Fuels International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Quadrise

View All

Pharnext — €20.7m funding agreement with Neovacs inked

Pharnext has announced that it has finalised its strategic funding agreement with Neovacs for total net proceeds of €20.7m. The funds will be raised by issuing bonds across 11 monthly tranches and associated warrants (equal to 50% of Pharnext’s total outstanding shares). The warrants become applicable for exercise on 1 January 2024, allowing Neovacs to hold one-third of Pharnext’s diluted share capital once fully converted. Proceeds from the first bond tranche (€10.7m) have been used to repay the €5.6m (including accrued interest of €126k) drawn down from the total €12m fixed-rate loan raised from Alpha Blue Ocean (ABO) in June 2022, as well as the initial €2.5m raised from Neovacs. Concurrently, Pharnext has also announced a share consolidation (1:5,000) and suspension of the right to exercise all securities, effective late October 2022. New shares will begin trading on 23 November. We will be revising our estimates and valuation following the company’s forthcoming H122 results to account for these developments.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free