All right, we got the signal. Good afternoon, everyone. Thanks for being here today. I'm Jason Tilchin, Senior Research Analyst at Canaccord Genuity. Very excited to welcome Ofer Vikas, the co-founder and CEO of Aduro Clean Technology. Aduro specializes in water-based chemical recycling technologies. I'm going to turn it over to Ofer for a brief presentation, and in a few minutes, I'll join him up here for a little bit of a Q&A on the company. So with that, thanks for joining us and good luck, yeah.

Yeah, thanks for having me. Hi, everyone. My name is Ulfair. As he said, I'm the co-founder and the CEO of Aduro. It's a journey we started in 2011. I'll explain a little bit about the company. It's a fantastic time for us. 2026 is the time where we are suddenly moving from our thesis to start building our commercial plan. So 2027 and 2028 will be all focused on that area. I'll speak a little bit about Arduro, about the opportunity. We're a public company from 2011. Thank you for having me and taking your time and listening to what we've been doing. We're basically a company that identifies some phenomena in the market that helps break down or cut hydrocarbons in a more efficient way. Our genesis is heavy oil. we turn heavy oil to a lighter crude but we realized that that phenomena is so unique and we could turn it around to do chemical recycling and other applications such as paraffinic crude or renewable oil and there are other applications so it's really a platform technology and it's doing it in a way that has not been done ever again so ever before so it's quite exciting and And we proved the technology, we proved the chemist, we patent a lot of patents. We're a very, very rich IP company. We have 11 patents with us. We stayed private until early 2011, 2021. And from that journey, we become public and IPO to the Nasdaq in November, December 2024. We have very large addressable market. our genesis is heavy oil so we take heavier oil that needs a lot of resources and turn it into a lighter oil and you know if you think of us as hydrocarbon processing so we'll see something somewhere between the pipeline and the producer and that's just you turning material and sending it into the pipeline we sometimes in the early of the you know 2020 came with and start developing the waste plastic application we're probably one of the leading names in the chemical recycling of waste plastic it's a very very tough subject it's a much-needed application cross-border all over the world the society is basically looking for solutions and there's not a lot out there and the market availability is huge it's just very very large and so because we have a very different approach we caught lots of attention there's a lot of eyeballs and we're at the stage where we have an operating pilot and we are now moving on and starting to move on into our first of a kind that's how we call it it's a basically a first industrial unit that together with another unit will become a commercial unit and part of the very strong I guess advantage of this technology is that we're operating in a lower energy mode we have high ability for contamination our yield is very very high and this unit this processing unit basically is modular so we can scale it up so all of our economics is built on you know do a smaller unit and if it's good then you build three of those units again and you're you're fine in terms of you know all of the financials and then we have other applications in the making I'll speak a little bit about how the world has been operating in chemical recycling from that moment I'll just speak a little bit about chemical recycling in general because that's that caught us by surprise in 2020 the market was very aggressive around looking for solutions and we just put a lot of attention in developing that application all the organization that you see here operate in what we call paralysis if you ever heard this name it's basically a heat motivated approach to break down those molecules it comes with a little bit of penalties basically the yield is not that great the contamination level need some adjustment they need hydrogenation hydrogenation management of hydrogen regular hydrogen to do something in that approach is quite costly and it's non environmentally so there's a lot of issues around that and over the years you see that that approach is losing steam while we are moving forward quite quite strongly so we brought that approach called chemosis and companies that you see on the left I'll just just share with you some names so if you look Mura that's the chemical if you look at plastic energy that it would be Sabic Honeywell I'm sure many of you have learned of here and Quantifuel is supported or used to be supported by BASF a very very large name the markets for this waste plastic or chemical recycling application is fairly large so we brought first and foremost an approach if you will and the approach is very very unique it suggested that basically we're doing our work with a native catalyst that is working and allowing us to work at much lower temperature that catalyst is very very cheap and we do it in an environment of water which overall assists to the chemistry believe it or not in a very surprising way the net result is that we do not need any hydrogenation we have high tolerance to contamination the system is very tolerant and we see yields of 90 percent you know we just reported on public market that we see 85 percent on a system on our pilot that is not optimized yet so there's a lot for us to improve and so the technology that we're building in this market is basically superior to the one that I just mentioned and so that allows us to reimagine rethink how do we want to go to this market of waste plastic so that's a very large market cross-border worldwide society is producing about 400 million tons of that every year all the companies that I showed you they control only one percent of the market most of the waste plastic recycling ends up in the landfill some of it the nine percent goes to mechanical recycling and so a dual rose market basically is that part of that 49 percent that is out there and that is because of the benefit of the technology so there's some benefits in the technology that we can materialize we can think it over and we can move forward into our business model that never been thought before for example for many of the times people were thinking about chemical recycling in a centralized location so that brings a lot of commitment for cost to a centralized location that committed the city that committed the petrochemical plant that committed for feedstock and hydrogenation and all those things that are getting all together in order to make it happen And this is, to be honest, quite challenging. So if you can skip some of those, then you're creating a lot of leeway and some room to do different business models. So, for example, if I have a process, if most of the world is thinking 100, 200,000 tons a year, and our process is only processing 25,000 tons a year, and I can build one or two or 10 of those within a year, that means I can scale up quite fairly after I'm proving the existence and the economic model as itself so there's a lot of advantages the way we are thinking about it and this is how we are actually that's everything that I'm telling you now we tell investors in the same way for the last five years we both basically broke down the process into different stages we have simple to complex kind of an approach where we're thinking you know there are some applications where we can come with a simple unit that can mitigate a lot of risk create a lot of revenue and still be in a chemical recycling space such agricultural waste which when you think of it is a very unified material wasn't me but when but if you know it's just on a smaller scale so if you don't have a smaller scale unit that will deal with it it will must be going somewhere else And as you grow up and you do more complex things, then you're hitting, you know, the golden, I guess, the big task of waste plastic, post-consumer waste plastic, which is what everyone wants to see. And so that modularity is something that we're doing. And we're building day in and day out of busy in building efficiencies into the system. We're thinking very much of the material that we're getting. We're thinking what is the minimum things that we need to do to configure a system. And later, how can we earn money out of that system, assuming that it's very clean and simple? And then we're thinking, how can we upgrade that system to another level and get a larger target? But by that time, we will already pass the smell test within investor having a revenue from a commercial unit. So the mitigating of the risk is part of the process that we're doing. Those are some of the partners that we're working. We just published a press release about the synthetic turf. I mentioned small dedicated application or a smaller scale. Agricultural waste is one of them. Synthetic turf is basically another one of them. We just, if you look at the company's videos, you'll see us talking to a company named AstroTef, and there are others in the main that has some kind of responsibility to find solutions. And Aduro is a potential, very good potential and candidate to solve some of their problems, both in Europe and in North America, actually. Our genesis has started, as I mentioned, in 2011. For most of the part, we've been working in the lab over the years. And this is something I say to investors in order to create the transparency, in order to create the understanding that we're working every year to increase value, to create opportunity we basically develop a system where we are reporting to investors almost on every quarter of things that we've been doing and we somewhere in 2021 we announced the investors that we are going to build our technology demonstration unit and every year we announce certain things that will add value for the company so maybe we had another pattern maybe we had another design maybe we had another deal and so we are very quickly committed in during those years to the pilot we have a pilot that is up and running it's an industrial scale modular pilot that is up and running on our site in London Ontario not London UK and in parallel to this we are actually starting to commit resources to build an industrial site in the Camelot which is a chemical hub very very large known chemical hub we want to be where the resources are for our first unit and we will start small we will start with a 10,000 tons a year unit we will prove and be operate and generate some revenue and then we'll add up another 15,000 tons and we will go grow to the 25 commercial scale and from that moment if you think of it we're preparing for 2030 in terms of where we want to be with our commercial vision because in 2030 the regulation is coming in Europe in a really harsh way where the government are actually forcing the organization to process more and more waste plastic and by this time we want to be with the you know significant amount of knowledge and know-how just to build more units as we need folks we We are building on operates our unit here, but we are 90% licensing. We don't have any illusion to grow by just building those units. They are capital intensive, but when we are working already today with an EPC, that is fostering whatever we're doing in order to build a better machine, a licensing program machine that will be ready for those 2030s. So there's a lot of expectations, a lot of traffic that goes on. With the interest of time, I'll talk to you about a few minutes about that application, which is quite unique. We are very much excited from this application. For us, it's just an extension of waste plastic recycling. It's an application of basically paraffinic crude. I told you that Adoro is not one trick pony. We have other significant applications that are very relevant in this market. And today, more than ever, if you think energy independent, an organization are looking internally, countries are looking internally, how can they increase their energy producer? One in particular that looks quite nice for us is the application in Utah. It is a waxy, Uinta-based crude. It's a very power-finite crude. It's very localized. It's very small scaling compared to Canadian market. For us, it's just an extension of a plastic market. And we found out, and we knew about it, but we just recently started developing that application, that if we can turn this application, you know, from, and I'll show you here a small video. Let's see. This one is how the crude looks like when it comes out and it's cooling down. And that's how the crude looks like when we finish the job. And it's very much a crude oil. We make it really a light crude oil. And by this, we are allowing the crude to become pipelineable. So think of the transportation, everything that is associated with bringing that crude, hitting that crude, delivering that crude. Now you have us sitting in between that pipeline too, and there's no pipeline. So this is a long-term vision. Right now it's all tracking. But I just want to show you that we're thinking about the long-term vision here. We're thinking about how we can basically make easier on those resources that are available. And we're doing it in a very fantastic, I'll say, environmentally friendly way. Of course, we went to the NASDAQ and we did an IPO. And this will be the last slide with the interest of time that I'll share with you. What you see is what you get basically a very, very clean sheet, cap tables. We have about $70 million Canadian in the bank. We just finished the race with the help of kind of code here. It's a very simple chart, there's no debt, there's no financial tools, there's no overhang, whatever you see here, very strong inside ownership. Every raise that we did in the last ever, since ever we become public, was on a higher price. So we're thinking like the investors. We try to stay very transparent to the investors and share information as much as we can. Our goal really is that you would look at the company every four or five months, and you'll see some kind of a progress, some kind of progress in the right direction. That's basically our goal. So you would know when you're just sitting and monitoring what we've been doing, that we are working to create opportunity to de-risk the company until we'll get the revenue, which we expect it to have somewhere in the middle of 2028, basically. And so very, very exciting times. We have this application on the paraffinic route. Plastic recycling is coming in. There are other applications, large addressable market, healthy bank account, grows very, very steadily. all of those good things that we're trying to keep with you you know to make you aware of so when you're doing your due diligence you'll you'll make your decisions I'll say thank you very much for the time and the attention of course you will Jason will go on for some questions yeah perfect come turn me over here that was a great overview of the business one thing I was hoping maybe you could help us understand a little bit better is the phasing of everything because there's multiple opportunities there the waste plastics the paraffinic crude what are you most focused on commercializing today and what sort of yeah in terms of a timeline you mentioned 2030 but yeah so we're thinking 2030 for the regulation but Jason we we're working very aggressively on the waste plastic and plastic recycling this is the one that application that has been stormed so imagine we've been working for almost 10 years and 10 years is just to understand the whole platform not just on the bitumen but we've been working on the you know the technology per se and outcome from the left field once we become public and show the technology a lot of interest on chemical recycling and so that triggers us to go back and answer to that and so where today you know four years after with a pilot up and running you know so that will be our first go-to-market and I know it sounds little bit or you maybe you're jumping from flower to flower no absolutely no the paraffinic crude is just an extension of the chemical recycling when we process waste plastic we deal with paraffinic oil and the only difference between this one and that one is that one is more unified the other one is more contaminate one is more waxy and the one is more starting from solid but they're all more or less say the same and in fact we expect our anticipation is that paraffinic root will have a jump scale and now that will be as fast as could be as fast as the waste plastic recycling we'll stop there and we'll see how we're working so we don't want to jump from flower to flower so it was just an extension of the work rather than just all doing another one we normally work with partners to mitigate the risk so we don't go into an application not knowing that there is something at the end of it so that's just the message I want to make sure investors understand and know so there's a lot there this phenomena that I mentioned I believe personally at some point of time will be studied University so that's that's kind of how we think about it so there's a lot of research you can lost a lot of money you could lose a lot of money during the research we feel we've done a lot of it and this is where we are today very

close to commercial phase okay very helpful you mentioned the pilot how long How long has that been running? How much uptime? What are the learnings, the results been so far from that process?

We learn fun. So just as a point of maybe border, up to two years ago, if you will. We've been a bunch of scientists, and we had suddenly to grow up to an industrial scale understanding. That means growing your engineering, that means growing your operation. That means growing your research and dedicated. And that also means very strong discipline on how to build industrial units, which is very different from, I'll say, a research unit. That particular pilot, we're learning from that moment, we have huge learning. I have today sufficient information to build the first of a kind, although it's not running the way I want it to run. Already today, we've learned so much. The pilot, we just published, I think, the yield which is quite impressive is about 86 percent of a yield of a product on a non-optimized our goal is to move now the campaigns from two to three days to a week and once we'll get a week it will be you know to two weeks and once we'll get and every time something like this happen you now you understand okay maybe there is a plug maybe this is a pump maybe this is a gauge that you need to work and that's how you improve that but noticing everything that I'm telling you right now we've seen conversion from the first day we started it already 10 years ago and even into the pilot when it wasn't optimized so we know we have troubleshooting to do but we know actually that

the pilot is very is performing to our expectations very well and so we have expectation this is actually give us the groundwork to start thinking about the industrial unit for those reasons you know we had enough information to start building it and they're not so expensive the pilot is already funded you know the rest of the work okay we'll get it done that was gonna be my next question the commercial scale yes plant that you've designed that you're working on continue to optimize that that design yeah what is the total investment required for that and then as you think about you know not holding you to anything today but how should investors think about what the revenue and margin profile right each of those owned units is and then maybe tie

in the licensing model how that compares yes a lot in one question we have all the other we have we got a bunch of them together okay so basically the we have assembled the site we have dedicated the site not to do just 25,000 tons but to be able to grow from beyond 25,000 tons that's the site that we have in Canada we're starting with a 10,000 tons overall what we see right now is it you know the basic I guess costs of what we see is anywhere between 50 to 60 million dollars on the whole projects assuming that the building is built for 25,000 tons the utilities for larger number and some portion of that goes to the 10,000 tons machine basically and this is the the first of a kind so our expectation is and we're working against this is to your next answer we're working against the time we want to be somewhere in 2029 with a 25 000 tons so that's a commercial process and from that point we'll take our time until 2030 to understand how far we should push it right if we need to do two system three system four system it will be at the end we you know we we envision larger site and that is how we're thinking about it but while we're doing it it's a crow walk run. It's very dedicated with some risk mitigation environment. Is that data answered?

Yeah. Just a rough margin profile of owned versus licensed.

So owned versus licensed, we are about maybe 10 percent owned and everything else licensed. But we really want to have licensing models. We don't think we should go and develop those applications. Those systems could land on existing site, take away a process, bring your process won't take wouldn't be so easy but it's not so hard they are working in a very good performance so overall the environment impact of those is actually quite good so in terms of regularity definitely in europe i think we're waiting to see what's in north america we're actually in quite a good place so the concept is to allow as much as you can to spread and we have an epc now that is working with us already for the last year year and a half monitoring everything that we're doing, you know, seeing the goods and the bads of the pilot and working with us on the first of a kind. So, at some point of time, you know, they will launch a more efficient system. One that, you know, you could have maybe a warranty, a performance warranty, which for that reason, you will need an EPC. This is, those machines are sitting in chemical plants. They're a lot of insurance that everything will go right. You don't want to do that, you want big guys than you. Knowing where you are and what you can do is actually a good thing in this market.

Very much so, we're low on time. One thing I'm curious about maybe bookending the process, specifically maybe with waste plastics to start. Where are you getting the feedstock from?

It's never an issue to us, surprisingly.

Where are you getting, what you're paying, and then who are the offtake partners?

So the net result is that we're taking the final product is an oil that is mixed with virgin oil that is going to a beast machine called nafta cracker. And nafta cracker produced the building blocks for plastic. So for Europe, it's a much needed, not just for, this is our evaluation. That Europe is looking at this not just to do something good for chemical recycling, but Europe is being attacked and received low-value product from the Far East and anywhere else. And so for Europe to dictate, for example, that maybe 10% or 50% of the current, whatever you're selling, would be involved with the recyclable material means that they could put a stop on whatever you're buying in somebody. So it's to help the local industry. And recently, also, we've seen energy independence, growth, and interest. So we're thinking those regulations will come in. Maybe they'll be a little bit slower. And so we have a perfect storm to come into it. And the customers are guys like Sabic Shell. They have those beasts of NAFTA cracker. There's about several organizations that are best in them. So that is the net result, the end product. For the feedstock, it was actually surprisingly. We initially thought we're going to fight our way to get feedstock, but because the regulation was so slow and everyone were leaning on the competing technologies for many, many years. Pirosis has existed for 100 years almost, and then there was a little bit of a hangover. So what you see is a little bit tiring from the concept of pirosis, but many plants with feedstock become available for us. So we don't see any, we never had to fight for any type of feedstock. We just, you know, get whatever you want from 100% polyolefin, 95% polyolefin, 80% polyolefin. Actually, at 80% polyolefin, they'll pay you to take it, actually. So that is not a problem that we see. It's quite surprising, but it's allowing us, sorry, it's allowing us the opportunity to really rethink where do we want to do our business. Because it opens us an opportunity that we didn't have thought about. just because the market is changing as we speak right now in an exciting way.

Okay, unfortunately we're out of time but that was a great overview of a really interesting company. So thanks so much for joining us.

Thank you very much. Thank you very much.