Earnings Transcript for AGXXF - Q1 Fiscal Year 2022

Operator: Hi everyone, and welcome to this Agilyx industry update hosted by Arctic Securities. My name is, [Indiscernible] I am the equity analyst covering Agilyx sales Arctic Securities and we moderate session today. With me, I have the CEO, Tim Stedman, CFO, Russ Main, and CCO Carsten Larsen will soon take you through the presentation. After the presentation, we will move on to some Q&A where Joel, to use the chat function on the screen to submit the questions. With that I think we are ready to begin and, I'll leave the word to Tim.

Tim Stedman: Great. Thank you very much, I appreciate it. And it's very exciting to finally be here in person in Norway to actually talk about Agilyx. I think we've got a really exciting story to tell. Really exciting developments and it's great to be able to do that in person. I'd also add that we're very privileged today because joining us as well, wasn't on the announcement, is Joe Vaillancourt. Joe is the CEO of Cyclyx. And so, Joe and [Indiscernible] will join later on for Q&A, so that we can address any questions that you might have on business development, commercial, anything else in the presentation and Cyclyx. So, without further ado, let's get into the presentation and the first thing I wanted to do is really without going through this page, just reconnect to what we'd said a few months ago regarding what we want to achieve in 2022. And so having that as a backdrop, I'm sure people have seen it, read it and saw it a few months ago, what I'm going to do now is talk through the updates that really speak to the development in the business as we see it going forward. And we're very, as I say, excited about what we've managed to achieve in terms of building out the business performance. And it starts off, we hear this a lot around when are we going to see revenue? When are we going to see revenue visibility? And we've talked a lot about the fact that moving into construction, projects moving into construction is a key part of that. And so I'm very excited that earlier on this year we announced Toyo going into construction. I'm even more excited when they pay us, and we actually get the money. And that's what has happened in the past few weeks, so we've actually received the first tranche, about $4.8 million in early April. We're expecting a second tranche of $3.8 million in the second half of this year, and each of those will get recognized over about six months. I'll talk more about that later on. The other thing that we talked about was diversifying our business pipeline. A licensing business, we don't control all of the decisions through the project life. We never assume a 100% conversion. One of the things that we can do is influence that outcome by building strength and depth in our pipeline. That's what we've been doing. We have a volume growth over the past year, volume potential in our pipeline, growth of over a 100%. And so very pleased to be able to report that we are delivering on that expectation. We also said last August that we were going to uplift to the main Børs. What we said was we would do within a year from last August. So I'm very pleased to say that we're actually advancing that timeline. We're targeting to do that by the end of June and lot of work is being done. You'll see a bit more later on, on that front. We can get into more detail if you'd like to, but I think the key thing is we're delivering on that promise to actually uplift. Cyclyx is very exciting, real development site. It's only just over a year old, let's not forget that, and but what we're seeing is a huge traction from the industry. People recognizing that if you can address the issue of how you going to get feed stock, then converting it is a little bit difficult. Cyclyx is that answer, and Cyclyx is growing and developing, strengthening the consortium. And what we can do in this presentation is give you a little bit more visibility about the potential revenue drivers within Cyclyx. So far we've talked just about one of them. And it's still early days, but it's very exciting. Some of the other things that we're going to be able to do in Cyclyx and some of those things that are being worked on right now. And the key part of that is the development of what we're now terming and advanced plastic processing facility, I talked about it as a [Indiscernible] a couple of months ago. I will come back and explain a little bit about the terminology -- challenges we're having there. But these projects absolutely crucial in terms of locking in volume. And again, we're seeing really good developments in our plans in that area. Finally, from a technology point of view, we've talked previously about our combination with technique. Technip Energies. Who are they? I mean, they are Z leader in the world of styrene technology. The actual sort of traditional route for Styrene technology. There's no doubt about that. We've been working with them in partnership and we have this combined offering to go from unrecyclable waste through to pure polystyrene ASTM Styrene. And we have some great advances in that space with real product now being delivered through pilot advance the technique have developed. And we see this as a really endorsement of the technology, but a very exciting development in terms of opening up new potential markets. So I'm not going to go through this page in detail. It's a little bit is a little bit mechanistic if you like, but I wanted to make sure you have the detail of how we're working through the uplisting program in terms of getting the company ready for uplisting. So switching from an AS to an ASA, making sure that the liquidity is there in order to allow us to do that, putting in place the various audits, the changes in our accounting moving to IFRS, and then finally, going through the listing process with the Board. And so our are ambition was to do it faster than we said we were going to last year and we feel very confident now that we are going to be able to uplist by the end of June. And that's the target that we're laying out and we're on track for that, so we can talk more about it later, but I just wanted to make sure that you have an overview of the progress that's being made. Very exciting page for me. We talked a lot of times last year about getting a project into construction. It's a really crucial proof point. Just recall that when a company takes a project into construction, we obviously get a step-up in revenue. That's very nice; we like that. But in terms of the commitment that they're making, it is many times greater than that because what we're supplying is the core equipment for the overall project. They've got to build the rest of the plan. So when a company goes into construction, although these revenue numbers are very nice, the actual symbol is much greater than that because they are putting a significant amount of cash, capital, and reputation on the line because this is a big deal, and certainly this one in terms of Japan, the Japanese government are extremely keen for this to happen. So, I just want to emphasize how important this step is for really confirming our business model, but it does give us some nice money as well. There's been a little bit of discussion maybe of people questioning, well, how does this work in terms of the construction phase, when do you get the money, what does it mean? So we only sell the core equipment to the overall process, the piece that's crucial to actually allow circularity. But that's the important word. It's crucial. What crucial means is its normally long lead time? It's critical litigated, which means that when people go into construction, basically the first thing they order is the long lead time equipment. That's our equipment. That's why when you go into construction, even though construction might take 18 months, what we will get is our order, and our cash right at the front end of that. So that's why you see that Toyo is actually going to commission this plant first quarter of 2024, but we're getting almost all of the cash this year. And from the $4.8 million that comes in now, that will be recognized over six months. And then the $3.8 that comes in late this year again will be recognized over six months. So it's very important to see how these project develop. That step-up construction is not just a validation, but it's about money and near-term revenue for us. And this will play into the overall pipeline. So as you say, we got constant here, so we can talk more in detail in the Q & A. But we feel very, very good about the developments that it's pipeline -- the nature of the diversity of it. I'm not going to go into specific projects here, but I did want to share this kind of overview. We shared it before the snapshot of where projects are between really the scoping, the development, construction, and operations. And obviously we have built out this very, very strong pipeline of pre -development, which is now moving into these early developments in the later development stages. With a wide range of customers from the traditional ones, people that we've talked about before, Toyo Armstrong, to the less traditional ones, people like Kumho, who are in the downstream businesses, those businesses that we can now go after because of the technique, technology we link up with. And then obviously, we're very enthusiastic about the new development with Virgin going into low carbon fuels and being able to look at this enormous potential market, deploying this kind of capability, to be able to use above ground hydrocarbon in the form of non-recyclable, un -recyclable waste plastic is a source of fuel to supplement. The other work that Virgin and others are doing in sustainable aviation fuel. So how does that play into our pipeline? And again, we shared this chance a couple of months ago. We want to keep giving updates on this because we think this is the best way of seeing the development of the pipeline. We now have 24 projects identified as high priority. That means greater than 50%, probability of going all the way through. You can see the mix of pathways, mixed waste plastic becoming a significant piece of this. But also, polystyrene easer pool, which is kind of a core part of our technology where we have this rather unique offering, really unique offering with technique. But then other pathways as well. PMMA, I will get told off for using that title, but it's acrylics, so it's your plexiglass, things like that. These and various others coming through such that we now have 1.1 million tons per year of total potential in this pipeline, which is up substantially from September of 21. And as I mentioned, if you look at March year-on-year, it's up a 115%. The other thing that I really like about the pipeline and the work that constant and the team have been doing is the geographic diversity. I mean, we've just seen with the things in Ukraine the -- the actually as terrible is that situation is if your business is all located in one geography, you are exposed. You are exposed to certain things happening. 24 countries means that that actually things go wrong in one particular country or there are difficulties, whatever they could come from, then we've got the flexibility to move on because again, we don't assume a 100% conversion between going into development and moving into construction. So it's a robust approach to making sure that we have that flexibility. And it really all comes down to what is the fundamental behind the sales pitch if you like, from our business development team to these customers and it relies around these four elements. We've talked about them before, but I think it's good to keep them in mind. The first one is, we don't use a catalyst. Now, as a chemical engineer by background, I assume everybody knows what a catalyst is, which I've learned over the past year-and-a-half is a very bad assumption. A catalyst is something that makes chemical reactions more effective. It makes them more selective, and so you would think, well, a catalyst is a good thing. That's what most of the chemical industry uses. The problem is, we're talking about the intersection of the waste industry and the chemical industry, and catalyst can't deal with volatile feedstock; feedstock that's different, feedstock that's contaminated. Those contaminants destroy catalyst effectiveness, which then becomes very expensive. So by not having a catalyst, what we do is we basically give to Cyclyx the means to actually expand our feedstock envelope. What we can take as feed, and we can go directionally after the stuff today that is unrecyclable with unrecyclable today, what it means is it's cheap. It's also directionally much more available. The other thing we have is it's an electrified reactive, electric -- electrified reactive means you can use renewable energy. So, we recognize the fact that low carbon and de -carbonizing life-cycle analysis, these things are becoming more and more important, both from the perspective of investors, but also from people who are wanting to build these units. Our unit now on the West Coast of the U.S., the one that's pictured here is a 100% based off renewable electricity. So we can take another step in terms of demonstrating to people the lower carbon solution. It's a robust process. It is a process that is designed for the nature of waste. It's not a process that's designed for a nice clean chemical feed stock. Because what we're dealing with this waste, Cyclyx, what they want to do is touch that waste as few times as possible before it goes into a reactor. So the more robust your processes against that waste, the less touches you have on the less cost you add to it, the less carbon. In terms of energy that you're adding to it. All of those things are important. And then it's flexibility that we've already talked about in terms of different pathways, different products that you can use it for. I talked a bit about Technip already. This is actually a development, an engagement that is really beginning to grow. So they are actively involved, for example, in the discussions with Kumho. And again, this is providing a basis of certainty for our customers because it's linking together not only how do I get waste, how do I convert that waste, but also how do I purify to a fungible, tradable product? Now we can do the whole thing with this solution. So, it's a very powerful development, and we're very excited that you're going to be seeing more from Technip, let me put it that way, over the coming months as they build out their kind of program for driving this. They are very, very excited about it. We've actually -- they have, they've started out the pilot distillation unit in research side on the East Coast of the U.S. and that is now delivering pure styrene samples for our customers from that very -- that waste is considered unrecyclable today. And so, it's a very, very exciting development, one that is becoming more and more powerful I think as we go through this year, but it's already having an effect on some of these key customers. Cyclyx, so Joe can dive into more Q & A later, but let me just sort of paint a picture of Cyclyx quick couple of pages on -- Cyclyx sees this, we've talked about this consortium-based approach for delivering innovations in the area. How do you take waste and it's complete vast complexity, and make it something that can be used as a feed stock in a technology agnostic way, which means that Cyclyx is able to address the entire market, not just Agilyx conversion units, but supply and feed to mechanical recyclers. What I would call clean waste, chemical recyclers people who've got an existing system like exon, but more directionally towards cleaner waste and people who wanting to address the more challenging, unrecyclable waste. So there it is, this is an industry-wide approach for addressing this. And so what they've been focusing on is how do you get that -- that waste to become a feed stock. And Cyclyx has been being doing a lot in that area because what they're trying to do is drive towards that place where all plastic waste can actually be recycled. You can move to that point where it isn't the case of that's not recyclable anymore. They're looking at aggregation programs so that you can actually collect that waste. They're looking at how do you put in specific facilities that can enhance that, take cost out, which is the what we've referred to previously as the pelf that we're referring to and this is this advanced Plastic facility APPF and trying to make sure that you can then lock in volumes associated with that. Now the other thing that you can see on this page is this 10 to 90. This is a recent launch, 10 to 90 is a -- really a consumer-facing brand because one of the pieces about Cyclyx is it's two parts. It's how do I actually get the right waste in the right form to my customers? But how do I drive up the availability of waste into the front end of that process? And we've had things like the city of Houston project which is going to support that. But a big part of this is this 10 to 90 mission brand around. How do you actually engage more people in terms of driving up that availability? And you're going to see some of the programs that we're bringing through here, which linked to some of the potential revenue streams which were associated with how you actually achieved that. You're driving up availability of waste and you're driving down the cost as it goes to people who want to mechanically or chemically recycle that material. And so, this is really a pictorial representation of the same thing, you've seen this picture before. But hopefully now it's beginning to -- some of these icons and pieces that we're talking about are beginning to make more sense. We talked about characterization of waste using the data that we have. How would you take that information so that you can use it to the right pathway. We talked about novel solutions to aggregate. Some of these programs that are going to talk about on the next page are completely new, they're really very novel for -- at maximizing our availability. Customized processing. Well, that's things like the APPF. This is something that is dedicated to a given partner, where a given partner will actually fund that directly or indirectly and focus it on their needs, which allows Joe and the team to take enormous amount of costs out of the system. And then get back custom feed to those people who need it so that you were enabling this entire process, because it's not a circular process. There are really two circular processes. There's one related to conversion to products, one related to how do you get the feedstock into a system where it can be converted, that waste. And as I mentioned, our capability here stretches not only to support Agilyx conversion technology, but the entire industry. Now, this is a page that we wanted to share. We felt this was the right time to start exploring the revenue opportunities from Cyclyx. Because what we've said before is Cyclyx sells feedstock, basically that's on a pass-through basis and we get a royalty, and that's true. But actually, it's not true if you think that that's the only revenue source for Cyclyx. And that's what we're trying to breakout here. First of all, is memberships. We have a group of member companies now in the mid-twenties. But Cyclyx is talking to somewhere in the region of 300 other companies. So as people join, what we've been charging is a fairly nominal fee at this point. But that's something that Cyclyx and the team will be looking at is how do you structure membership. Obviously as Cyclyx grows, the value of being part of Cyclyx grows. And so there's an element there where we can explore further development around revenue from memberships, being part of the system. Because there's all kinds of different offerings that Cyclyx can do for people, you have to be a member though to be part of that offering. The next one, so feedstock. So the second piece, this is the bit we've talked about, the feedstock sales. I think that's properly quite straightforward. But the other pieces is sort of underneath this, which is feedstock analysis. So where we have people coming and saying, well, we like to work with Cyclyx, but we don't understand what waste we can use. Then Cyclyx and the team will then look at doing studies for them, charging them for that. So we will get a charge for that with a margin on that. And then when it converts into feedstock sales, if there's further analysis that's required, that will all be embedded in the cost of the feedstock. But before you get to that point, there is money that comes in through that analysis fee. The APPF, the Advanced Plastic Processing Facility. And let me just pause for a moment to talk about the nomenclature here, because we started off by calling it a perf, the problem is a perf something that there is lots of examples out there. People. different things perf for plastic recovery facility. The issue is that actually what we're doing here is entirely different from what other people have got. It's a completely different set up, much more targeted towards plastic recovery, much more tuned towards particular customers needs and therefore, we started calling it an advanced plastic processing facility. We're still searching for the right branding. So bear with us on that one. But the concept is very simple. Dedicated facilities to meet dedicated customers requirements for material. The predominantly will be focused on chemical recycling that these people are struggling to find today. But can have -- let's call it, side benefits around availability for mechanical recycling. And depending on the customers need that can change in terms of what the shift is between mechanical and chemical recycling feed stock. The concept here though, which is in operation. So, we're developing one with a certain key partner who happens to also be an equity participant in Cyclyx. That first one is in development. We're in discussions about others coming behind as we talked about in terms of our 2022 targets, and the idea here is that we would -- very similar to the Agilyx projects, we would get paid Cyclyx a development fee to develop that process. This will be funded by either direct investment by the target customer or through loans based on a dedicated 100% off-take agreement with them. But it would basically be sitting there as a dedicated facility for those customers. And so we see this as enormously powerful because you can take out, as I said, huge amounts of cost, but you also lock-in those sales when you have an APPF that's dedicated to an Exxon or aligned or whoever it is from the membership base. If they finance it through this way, you've locked in those sales, you've locked in that revenue in terms of both the feedstock sales, but also the royalty. And then, the final piece on this page is something that we haven't talked about for linked into things like the city of Houston project, which is the importance of take back programs and this is an exciting new development. We have 9 pilot programs now running in the U.S., take-back programs about how do you get at the waste that today just doesn't get managed or disappears or is not effectively dealt with? And you might say, well, there's not much of that. There is unbelievable amounts of it. And so we have these nine programs working with a range of things from municipalities to brand owners, to other companies working now with the membership base and their employees, we're touching millions of employees now through this membership base, or certainly in a hundreds of thousands. And so, it's about how do we explore that? How do we develop that through this year? And then how do we turn that into a source of revenue as we go forward in the future. Plus, an ongoing source of more plastic. Because what we want is to move from 10 to 90. We want to get more plastic into the system such that it allows us to actually recycle and support our customers. So now let me hand over to Russ to cover the finance page and then we will be talking Q & A after that.

Russell Main: Good morning, everyone. It's a real pleasure to be here finally and thank you all for joining today. And those on the webcast, we're really excited about our story today. This morning we published our annual report, and I hope you guys all get a chance to review it at some point today and learn more about our company. We're really proud of the sustainability report that's embedded in that annual report. A lot of great information on what we're doing as a company from a sustainability perspective, and then on our Financial. So today I thought I'd give some highlights on 2021 and talk a little bit about some of the points that we've seen in 2022, some of the statistics that are setting us up for success for this fiscal year. So in 2021, a little bit of growth on the revenue side, we didn't expect much more than this, because we're running the current pipeline through development. So about 13% growth on revenue, but we're setting us up very well for the future for revenue generation, as Tim said, as we develop that pipeline, that's currently being worked through. But from an operations perspective, we really invested a lot of money in the development and getting this business ready for success. A couple of examples to give you some highlights. A year ago we didn't have Cyclyx. We've stood up a whole business during the course of 2021, and that's from the management team to the operations folks that are sourcing feedstock, that are doing the procurement, that are doing the logistics. It's a big deal and it requires a lot of resources to get that setup. So, we're ready for that growth that's going to come as Tim mentioned. Also, we're shoring up the business from a control’s perspective. We implemented a new ERP system during the year. So I have a lot -- I sleep much better at night knowing I have one source of data. I can roll that data up quickly and get the results out that we need as an organization. And we know it's accurate, it's got embedded controls. I feel much better and that was a big investment for the company this fiscal year. Also, increasing our lab capabilities. As we talk to different customers, we also have to do all this characterization of feed and characterization of waste. So, we just built a new lab in Portsmouth, New Hampshire. That's going to help take some of the work that we're currently all funneling through the West Coast and [Indiscernible]. And also during the course of this next fiscal year, we are going to be expanding that facility as well because that volume of testing is one of our core competencies that set us aside from everyone else to be able to generate that waste, understand what that waste is, and help our customers -- to help fine-tune their recipes so that we can help them to grow their business. So, a lot of significant cost has gone into the business, but it's there to set us up for success. And you have to do that as a growing company. And we feel very proud that we put in some really good investments that are going to have great payback when we go forward. Cash flow. I think we're well set up with cash. We feel very good with our forecast and with the generation of our pipeline that we have enough cash to be able to move through and develop the pipeline that we mentioned. So, we've done a lot of work around this. We are laser-focused on cash. My team does a forecast every week and we're very in tune on cash and we feel very secure that we have enough cash to get us through the business needs for the coming years. Update on recent progress. Some real -- I think Tim has already kind of talked about these points, but wanted to reiterate one of the highlights in Q1 we've already booked $3 million of revenue for both Agilyx and Cyclyx. So good momentum in Q1. So that's fantastic news. And then also with the development of Toyo, you can see there's going to be some real meaningful revenue hitting the books for Toyo over the course of this fiscal year. And very excited about that because it really escalates our revenue generation when we move a contract or a particular project to construction. So -- and it's meaningful margins too. So we're very excited about that for growth, for this fiscal year. And I think as these -- these really help us, we feel very proud that money we put into the business has now really set us up for success. So, we are very proud of where we've come. I think the team has been working really hard to get us to the up-listing process. The finance team is taking a heavy load here with the IFRS conversion because we are U.S.. GAAP, Norwegian GAAP financial statements currently. We are real close to finalizing that project. And when that's done, I think that's one of the big key areas that we're finalizing for the up-listing. And very excited about that as well. So just wanted to give that highlight to everyone and some insight as to the numbers. And I guess now will just open it up to Q & A. Yes, let's invite Constant and Joe up as well for this [Indiscernible].

Operator: Thanks for an interesting presentation. To start off with the first question here, according to the latest company presentation, the presentation for this one. It seems that you're guiding development revenues of $7 to $9 million, which is higher than the 3 to 5 million range guidance there. Is this figure representative only for Greenfield projects or Brownfield as well.

Tim Stedman: Yeah, it's a great question. And let me start off by saying, there's a broad range. There's a number of different roles, but I think it's the latest estimate based on the various projects that are moving through. So we're really just updating it. That would be -- those numbers will be typical for a Greenfield versus Brownfield actually is less of the distinction. It's more a case of how the customer wants to do the project. Let me be clear. So that range would be the situation where we, Agilyx, run the project for them. So, we're then contracting with an EPC supplier to do the majority of the work. So, we're acting as an intermediary. We charge our overhead of overside of the project and our overhead on the EPC cost. That's where you come to those kind of numbers now. There are situations where a customer may well say, I have my own EPC capability, so I will do the EPC directly myself, and what I want from Agilyx is your piece plus the overside. So in that situation, our revenue would drop, but our margin would go sky high. So, there's a couple of different models, but we think that the seven to nine is the most representative of what most projects will be because the number of people who have that EPC capability or want to do it is pretty small. But I do just want to flag that there is a bit of a range, but the seven to nine is the latest numbers.

Operator: Regarding the nation plastic pollution deal that will be finally launched in the next couple of years, what measures do you expect to be implemented and how will that affect the value chains.

Tim Stedman: Let me take this one, and then maybe Carsten can say more if you want to. Look, I think we see lots of different regulatory frameworks coming into place. They range from the EU taxonomy to things in United Nations, etc. I guess I'm very simplistic about this. In Agilyx with Cyclyx, what we're doing is we are addressing a real world problem that absolutely nobody disagrees with. I mean, there is nobody out there who thinks there is not a problem of plastic waste. You still get climate change denies, you don't get people deny the issue of plastic waste. So, we feel that we're on the right side of history in terms of the fact that we are providing a real solution to a real problem. We're going to see different frameworks come up. And some of those in some situations may initially be more helpful or less helpful, but we know where we're going. And so actually when I look at these various things, I think we should be encouraging them. What we do is we work as far as we can, both ourselves and with trade associations to help ensure that we can facilitate the development of regulations such that it actually addresses the problem and provide solutions. And so actually I view all of these things as -- I -- maybe I'm a glass half-full type person, but I always view these things as, this is good because it's pointing us in the direction of a solution. The fine details, there may be some things that we need to work on. But the direction is clear.

Russell Main: But I would just like to offer you a customer perspective because the customers are really, really interested in their buying into the value proposition of Agilyx. And there are two things that they are really buying into. One is that we're the only company out there that has the knowledge how to go from waste to feedstock. That's really starting to be recognized on the market. And then also our robust conversion technology. And in terms of that regulation, they're really optimistic that that is the way to go forward. So we see like Tim is saying, we see pros, we see some it's pro I would say, regulations and things being implemented But overall, there is a willingness from various plastic packs to increase recycling rates and I think Agilyx Model is the way to go forward.

Operator: Good. Onto the next one. When going from 100 to 200 tons per day units, can you simply double that construction and operation revenues?

Tim Stedman: Simplistically, yes. What you can do as we've learned, is go from 100 to 10 tons per day and divide by 10. We've talked about it before, there are sweet spots within the size of units, depending on whether it's mixed waste plastic, or whether it's something like polystyrene [Indiscernible]. So polystyrene is typically a 100 tons per day. You want two units that's where the optimum, it's where the balance of plant, which always has to be there, makes sense. What you've seen with the 10 ton per day unit is it's pretty expensive. That's what Toyo wanted to do. Eventually, we support our customers as their first step and they would say very much it's their first step. So they, and the Japanese government have pretty significant ambitions, but it's a pretty reasonable basis when you're talking multiples of the 50 ton per day unit.

Operator: What would be your biggest concern or bottlenecks in the scale up towards 2 to 300 million in revenues.

Russell Main: Well, if you look $200 million to $300 million in revenue, then you do the math, which I'm sure lots people have, and it's about in the short-term, it's about construction, construction, construction. That's where the money comes from. Now, if you go further out, it's a little bit different. It starts changing the nature of the development, the different revenue streams really start coming through. So it's critical this move into construction. That's why that Toyo move is so important. But we're focused on developing the broader base, the longer-term pipeline as well. But if you look at to the $200 million to $300 million, then it's very significantly construction that is critical

Operator: Good. On to the next one. For the MVP to crude oil pathway, can you use consorted feedstock or does it need any presorting in front.

Tim Stedman: I'm going to let Joe take this one, because we've got the feedstock expert, so.

Joseph Vaillancourt: So interestingly, there's two different answers to this, whether we're using the Agilyx Technology or somebody else's. In any case, I think there's a misunderstanding of feedstock in general. If you think about something that's as large as 500 tons per day or something. Your sourcing from 500 sources of -- of feed that could be different commercial, industrial sources or could be different municipal sources. Even within the municipal sources, if you went to the state of Florida or Alabama, which are next to each other, you will have 10 times the amount of chloride one than the other. So, when we think about feed, think about it as we try to touch with as little as possible, which speaks to the technology pathway. In this case, Agilyx, because it doesn't take catalyst can actually take very contaminated material. But in all cases you still need to mix it to create stable chemistry, right? So, one for taking the material from Florida, it might be 10%, 30% mix to this particular pathway. And then we mix it with the other 500 in a way that -- that's where our AI and our data, in our knowledge comes in, so we track on every single shipment what the chemistry profile of that shipment is. So even though we have 500 sources, we may have 1500 shipments. All of that goes in to our database. It basically we know what's on hand. We mix it with -- we delivered it to the technology and now we have stable chemistry. So it's a much more complicated answer. We've templatized it. We're flowing lots of material now. So we know it works. But the common understanding is that we'll plastic is plastic, everything throw out as sort of the same all over the world. It's just simply isn't?

Operator: Thank you. Do you expect any other projects to come into construction this year?

Tim Stedman: I think what we said on the 2022 objectives was that we were anticipating further projects into constructional licensing this year, yeah.

Operator: And to the next one. What are the goals of the company for the main listing?

Tim Stedman: By the end of June. I think that's pretty clear and as you said, we feel that we're in good shape for delivering that in that time frame.

Operator: Good. Regarding the partnership with Virgin Group where they intend to use your technology to produce low carbon fuels, can you elaborate around the potential of this partnership, and does the fuel product needs to be further refined before use or is it a ready-to-go product.

Tim Stedman: Yeah. Do you -- you go first.

Unidentified Company Representative: Yeah. I'm happy to jump in. We're very excited about the Virgin partnership. It's like Tim was saying before, it's an enormous market of low carbon fuel. It really speaks to the trend that is in the market today. You just need to open the internet, look at some of the announcements being made in sustainable aviation fuel, look at the size of the market, look at the willingness of the customers to engage in this. This is very, very exciting. In terms of the project, we've been very fortunate and work together with an EPC company to fast-track this project. So, we're working together with Virgin in order to fast-track that development page, that page you saw up on the screen to push that project through. And basically relatively quickly come to a conclusion on how do we build, where do we build, and how do we multiply. Assuming that lower carbon fuel is an acceptable market space that we can participate in also for plastics, that's really the name of the game. We are very excited about that partnership.

Russell Main: Maybe just add to it because Virgin made an announcement a few months ago, Virgin Airlines with Neste, which I'm sure some of you saw on the area of sustainable aviation fuel. And that's great to see. Virgin Airlines has a target of 10% SAF by 2030. That announcement with next day had an interesting statement within it, which said that in order to get to that 10%, that announcement needed to be multiplied by 70 to get there. Now, if you think about it, it's great that sort of, let's call it the traditional approach to SAF is moving and companies like Neste, they we would approval, we think it's great that people are driving in that direction. We need more of it. But there's also a reality that low Virgin Airlines is a big airline. When you compare it to a lot of the other huge ones in the world. If we're really serious as a society about addressing de-carbonization of the aviation industry, we simply need to be looking at other sources as well as the traditional bio-based or whatever it might be. And so that's the vision here. It's, we have this above ground hydrocarbon, which is waste plastic. How do we use that in a low carbon way, which would be with these kind of conversion units, to supplement, not replace, supplement the existing plans of SIF to help drive us down that path of transition? Because this is about transition, it's not an end in itself. What we're wanting to do, and this is the shared vision, is use that waste plastic to help that transition in the aviation industry to drive that de-carbonization. And this is the really cool thing about this particular project, that if we're ridiculously successful and we can drive that transition and other sources come along. These units can be redeployed to circular plastics with no further investment. So it's really important to think about this. This is the vision that we've got with the Virgin group is driving transition through the use of this above ground hydrocarbon radios. Yeah, go ahead. Sorry.

Joseph Vaillancourt: The bit about the quality of the product and whether it needs further refining, it depends. This technology we've done this in years past. It creates something in between crude and drop and so it's VGO quality product. It needs an extra polishing stuff but that either polishing step could either be integrated into this or for working with Monroe Energy, we give them the VGO crude and they do that final last step. So we can go either way. It really depends on the scale of the product -- project for the product.

Operator: Good. With regards to your expenses, do you expect a similar quantum in 2022 than 2021, or a little higher.

Russell Main: I think our expenses from a run rate perspective will go up as we continue to invest as I mentioned before, in capabilities within the business to support the development of the pipeline, project management engineering on the Cyclyx side, additional feedstock sourcing, headcount, that goes with orders. So we'll continue to monitor that to make sure when we do invest in additional dollars, it's offset with future revenue streams. But I do see it going up, but not as dramatic as it went from '20 to '21 because we were establishing a new business in Cyclyx and putting all this money into our Infrastructure that we won't have to do going forward as much.

Operator: Good. I think we have covered most of the incoming questions here, so I think we can open up for questions from the audience. Anyone.

Unidentified Analyst: Yes. Thank you. You talked about some new revenue streams in Cyclyx, for example, the fee for developing the pre -processing plants. Do you see any revenue coming from the one in -- on the Gulf Coast this year.

Russell Main: So, the one on the Gulf Coast is actively in development. The partner is very excited about that project. They will be financing it completely. And so as that moves forward, you would expect revenue. We haven't precisely talked about timing, but we did talk previously about the fact that we had some pretty active, ambitions about when that unit was going to get into construction. We would expect they will be development in those APPFs this year.

Unidentified Analyst: And for the other revenue streams, is that going to be, or the profit from that, is that going to be shared with Exxon, or is that going to be gone straight up into Agilyx?

Russell Main: First of all, what those revenue streams do, is they offset overheads. That's the approach of doing it. So you're trying to get -- you're trying to drive Cyclyx to being basically cash-neutral to then cash-generative as quickly as possible. So it's going to -- that's the target. Things like the membership fees is really to establish the overall structure, the kind of infrastructure of Cyclyx such that you can then move into driving volume, which drives royalties, that drives perfs, that drives the development fees and takes cost out at the same time for our customers. So it's a mixture of factors that you get into. But right now the focus is on establishing all of that, applying the principles of it, things like the take back programs as well. And then focused on paying down overhead.

Unidentified Analyst: So, it's still CDL non-profit?

Russell Main: I wouldn't put it that way, but that's where it will be in the short-term, but what I think we're trying to do with the revenue streams is indicate what the future, potential revenue opportunities are, over time that will then allow us to expand this business further, is it short-term piece in the longer-term piece there? But one of the things we did was we shared those revenue streams, because we wanted to make it clear that, there is lots of opportunity within Cyclyx, some of that is still very much at the pilot phase, the development phase, but, don't be under the impression that we're not exploring, how to do that, how to monetize it, how to look at it. And that was really -- so maybe it's a bit more of an aspirational point because some of those things are quite small today. Things like membership but it's can be very significant going forward.

Unidentified Analyst: And just last one here. LyondellBasell announced earlier this week that they are closing down their federal chemical refinery in Houston by 2023. It's obviously a member of Cyclyx but do you view this also that's a potential customer of Agilyx and you see the event that's perhaps some growing opportunities within Houston for you?

Russell Main: Well, let's try answering this two-way. So do you want to talk about it from Cyclyx point of view with regards to Lyondell because they are an active member at the moment.

Joseph Vaillancourt: Yes. So I think that announcement sort of indicative of where they're aspiring to and certainly sort of the whole recyclability and plastics as part of that from a Cyclyx lens, they're interested both on mechanical recycling. They really want to get in advance the reference there. And they are exploring all different options for chemical recycling. So we've got very active programs with them, inclusive they are one of the main members of the Houston partnership. So they are very active from the feed stock side of things.

Tim Stedman: And I will just say that, look, I think that all of the petrochem s are potential customers, look they're going to do what they feel is right, shutting down things, building new plants wherever it is they are going to do. Again, it comes back to the answer to the United Nations thing. We think we're on the right side of history in terms of we're providing a solution that's a solution to society, but also to those guys. They're making enormous promises about what they're going to do in the circular economy. And they are serious about it. I mean, they're wanting to drive that make, they're taking action in Cyclyx, they're going to be looking at different opportunities to convert. So of course, Lyondell is a potential customer. We have 68 projects in the early stage of development, we don't go into who was our, but it is a who's who of the chemical industry. Thanks.

Unidentified Analyst: [Indiscernible]Thank you for the presentation. Can you give us some granularity on coming PRFs like Baytown. Will they be of the same size, 60,000 tons per year, or will they be bigger.

Joseph Vaillancourt: It's hard to speculate. We've come up with three standard designs. When you think about the largest one is a 100,000 -- 100 KTA per year output, which means you're bringing in a 130-140 input. That is a massive facility by any standard for plastics. So part of the size determination is who we're building this for, is it for one product pathway for one company in one state where that's all they want. Are they looking at doing a national deployment where they would want five, six, 10 of the same size facilities that sort of feed different, so -- but we do have three standard systems. The systems though are very robust. They have about 2.5 times the capability of a typical PRF. So we can sort of throttle the quality in the compounding recipes if you will, for different products on the fly. What we're seeing today is where we had originally interest from dedicated PRF to a dedicated partner, we're now seeing trends where there syndications of interest to build bigger facilities for multiple companies throughout the U.S. So you'll likely see more about that shortly, but right now, we're targeting in on a 100 KTA size facility.

Unidentified Analyst : And on Cyclyx and numbers of active members you've said, and correct me if I'm wrong I think you've said 12 before, an active dialogue with some 200 plus is that still the case?

Joseph Vaillancourt: We have 29 members that are actively engaged, within those 29 members. We have something we didn't show our pipeline here because our pipeline sort of includes APPF development and take back programs and things. And so we have something like Tim showed nine pilot programs that are visible, but we have something like 30 existing programs with those 29. So it's almost a one-to-one ratio. We've got 40 extended offers that we expect to close. And in each one of those, they have varied interest and either sourcing or perf development or take back programs. And then we have another 300, and the 300 sort of the initial -- just to talk about membership a little bit, the initial membership was really geared towards the downstream demand. That sort of gave us the pull-through into sort of start to create these take back programs. So, take back programs now allow us to dedicate that material to a perf. So, there's sort of all interrelated. We're now looking at the 10 to 9. How do we change people's behavior? I mean, part of the reason why the recycling rate in the world is 10% on average is because 90% is otherwise considered not recyclable and goes in the trash. So how do we help them? We convince you all to do some small steps to take it out, give it to us. Much of those 300 are more towards the 10 to 9 rights. So, they we're not looking for them sort of fund infrastructure, but we are looking to engage their stakeholders. So, the city of Houston gives us access to millions of residences where we can deploy these programs. We're now bringing on other retail and consumer-facing brands, where we have that one in particular has access to 10-plus million members themselves that we can educate. So the membership is growing pretty quickly. You'll -- there's a whole area of our development now focused on just membership alone, so it's exciting. You'll start to see it more visible for the 10% to 90% takeback programs.

Unidentified Analyst: Thank you.

Operator: I think we have time for one more question if there is anyone there. No. Okay. Thanks to the Agilyx team. And thanks for everyone joining here today, and wish you all a good day.

Tim Stedman: Thank you very much.