12 June 2023

Quadrise Plc
("Quadrise" or the "Company")

Valkor Site License & Supply Agreement

Quadrise Plc (AIM: QED), the supplier of innovative energy solutions for a cleaner planet, is pleased to announce the signature of a Site License and Supply Agreement ("SLS Agreement") with Valkor Technologies LLC ("Valkor") in respect of the use of Quadrise's MSAR® and bioMSAR™ technology at a Valkor heavy oil asset in Utah, USA ("Primary Project Site").

The original Commercial Development Agreement ("CDA") between Quadrise and Valkor, announced on 11 April 2022, defined the joint intent to complete commercial scoping to deploy Quadrise's technology at the Primary Project Site in which Valkor holds an equity interest ("Phase 1") and then to license Quadrise's technology to Valkor on a conditionally exclusive basis, with Quadrise providing services, additives and technical support for production and use of MSAR® and bioMSAR™ fuel in energy applications ("Phase 2").

Quadrise and Valkor have progressed Phase 1 to mutual satisfaction and, having identified the preferred Primary Project Site managed by Valkor, the parties have now signed the SLS Agreement for the licensing and supply of MSAR® and bioMSAR™ technology at the Primary Project Site.

Subject to the satisfaction of the conditions of the SLS Agreement described below, commercial revenues for Quadrise could be achieved from Valkor's Primary Project Site in August 2023. This would achieve a significant corporate milestone in providing the first commercial licence supply for the Company's technology.

The SLS Agreement comprises four sub-agreements, with the key terms of each as follows:

·    Site Licence Agreement which is conditional on, inter alia, receipt by Valkor of drilling and underground injection permits for the Primary Project Site from the Utah Board of Oil, Gas and Mining at a hearing scheduled for August 2023, and the receipt by Valkor of project financing in an amount of at least US$15 million for the Primary Project Site. Quadrise has granted Valkor the exclusive right and licence to use its technology at the Primary Project Site to produce MSAR® and bioMSAR™ and to market the fuel on a non-exclusive basis in Utah. In exchange, Valkor will pay Quadrise US$1.5 million, with US$1.0 million payable on satisfaction of the conditions set out above and a further US$0.5 million on the date on which a Quadrise MSAR® Manufacturing Unit ("MMU") is delivered to the Primary Project Site.

·    Technology Transfer and Purchase Option Agreement ("TTPOA"), under which, following Valkor's receipt of the MMU, Quadrise agrees to provide engineering and process design and commissioning services, site operations and compliance support and project development support services for a minimum period of two years, and for which Valkor will pay Quadrise an additional quarterly retainer of US$75,000, after which, Valkor will have an option to purchase Quadrise's technology and MMU for the primary project for US$1.0 million at which point the TTPOA will terminate (the "Purchase Option").

·    Equipment Supply Agreement, which sets out the terms under which Quadrise will supply a 40 tonne per hour MSAR® MMU and ancillary equipment necessary to allow the production of MSAR® and bioMSAR™ at the Primary Project Site after receipt of initial payment.  Under the TTPOA, this supplied equipment will be owned and operated by Quadrise until the Purchase Option is exercised, whereby ownership would transfer to Valkor.

·    Surfactant Supply Agreement, which covers the terms under which Quadrise will supply to Valkor the chemicals needed to manufacture MSAR® and bioMSAR™ under the TTPOA, and subsequently.

Under the SLS it is envisaged that both parties may need to commit resources to additional project advancement activities with third parties to supply MSAR® and bioMSAR™ and Quadrise technology.  A profit share mechanism has been agreed under the SLS based on a pro-rata contribution of each party's costs and time to achieve sales of MSAR® and bioMSAR™ at a premium to heavy oil sales at the Primary Project Site.  The SLS Agreement has a term of ten years and may be terminated by mutual consent.

In addition to the signature of the SLS Agreement, a non-binding Heads of Agreement has also been entered into between the parties which, in complementing the SLS Agreement, also sets out the basis on which Quadrise and Valkor will seek to agree a conditionally exclusive Sub-License Agreement to be granted to Valkor covering the state of Utah, as well as the terms on which the net profit generated under the SLS Agreement, and a future Sub-License Agreement, will be shared between Quadrise and Valkor.

Jason Miles, CEO of Quadrise commented:

"We're delighted to move on to this exciting new phase of collaboration with Valkor and to have signed this conditional Site License and Supply Agreement. We both share the vision that the low sulphur, lower carbon MSAR® and bioMSAR™ fuels that will be produced in Utah from heavy sweet oil will offer compelling solutions for clients across the industrial and marine sectors as the pace of decarbonisation advances."

Steven Byle, CEO of Valkor added:

"Investment conditions in the USA are favourable for energy decarbonisation technologies and growth projects. We are therefore very pleased to have finalised our discussions with Quadrise and look forward to using their unique technology in order to produce cheaper, cleaner, lower carbon fuels at our sites in Utah as soon as possible to meet the increasing demands from our various heavy oil projects."

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About Quadrise

Quadrise is the supplier of MSAR® and bioMSAR™ 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 at: www.quadrise.com

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR.