#EQT @eqtec

A company with a unique, patent-protected and scalable business that will help to solve one of the largest global problems in waste accumulation in landfill, while creating green energy. The upcoming months will be a news-rich, and pivotal period for EQTEC.

(1/19)

EQTEC turn waste into energy via a process called gasification. Waste is turned into syngas, a gas consisting of Hydrogen and Carbon Monoxide (mainly). This can then power a turbine. Gasification should replace incineration over the following years. (2/19)

Incineration is high temperature destruction of waste in a furnace to a non-burnable ash form that is disposed of in landfills. The only byproduct of gasification is activated carbon powder which can be reintroduced into the system or used for various other applications. (3/19)

Pressure from consumers, governments and intra-governmental bodies like the EU is forcing change in how waste owners process their waste. This creates opportunity for companies like EQTEC who can convert that waste into energy in a sustainable and cost-effective way. (4/19)

EQTEC has three patents granted over its key technologies, in addition to extensive proprietary knowhow and operational experience. They have syngas composition analysis for 50 different feedstocks and own its own Kinetic Simulation Software (KSS). (5/19)

KSS allows the understanding of breakeven values and profit maximisation from different refining feedstocks as well as project feasibility evaluation using different feedstocks, equipment combinations and operating conditions to maximise economic value of projects. (6/19)

Each project EQTEC are involved in has 3 main phases.

1. Project Development - designing the project
2. Construction and Commissioning
3. Operating and Maintenance (O&M)

(7/19)

1. Project Design - EQTEC (as the experts) would design the project. This usually costs c. 2% of the total Capex of the project. Upon financial close of the project EQTEC would expect to earn 2/3x this investment. This is when revenue generation starts.

(8/19)

2. Construction - revenues due to EQTEC are c. 30% to 40% of the total Capex, with 25% of the total paid upfront before works begin (this is really important). They are then paid the remaining 75% over the 1-3 years taken to build the plant.

(9/19)

3. O & M - EQTEC are paid 1.75% of the Capex annually to manage the plant. Obviously once the plants are built this is a useful long-term revenue generator. (10/19)

EQTEC has the option (but not the obligation) to take an equity stake of up to 25% in each of its projects. If they choose to do this, this also leads to a long term cash-flow for the duration of the plants operational life (from electricity sales).

(11/19)

EQTEC is currently actively developing or constructing 9 projects with 4 customers or project sponsors - totalling c. £300m - Billingham is the largest of worth c. £180m. EQTEC Mcap = 30m (with 10m cash). Fundraising just completed, no need for a cash-raise soon.

(12/19)

Billingham - news is due, and if financial close is reached, EQTEC are due payments in the region of £12m a year for the next 3 years. EQTEC have the right to purchase the Billingham SPV from the current owners until the 25th August 2020 (soon). (13/19)

EQTEC have 10s of project in the pipeline totalling c. £1bn - if all were to complete this would be £300m-£400m in revenue to EQTEC in 5 years or so - large numbers for a company with an EV of £20m. Their broker has stated a profit of £10m on £60m revenue in 2022. (14/19)

These projects are spread over Europe and the US with Billingham and Deeside in the UK, 3 Carbon Sole projects in Ireland, 2 in Greece, and 10 or so in the Balkans. In addition to these there are the two US projects. (15/19)

EQTEC received 10 new enquiries in Q1,2020 and the early part of Q2, 2020. Detailed commercial offers worth an aggregated potential sales value of €120m were made by the company to potential customers and project partners over the period. (16/19)

There is a mystery SPV on companies house which investors have not been told about yet - let’s hope this is another addition to the already large pipeline.

https://beta.companieshouse.gov.uk/company/12784885

(17/19)

My views on the Aries Lawsuit have been summarised nicely by EQTEC in their RNS released on the 28th July.

http://www.lse.co.uk/rns/EQT/eqtec-response-to-aries-clean-energy-llc-filing-ktsfvqa26tnjba8.html

(18/19)

As owners of the technology, the scalability here is infinite. There is the potential to make a drastic impact to the planet using world-leading technology proven on an industrial scale. Very bullish, very excited. Lots of good news to come. #EQT @eqtec

The end :)

(19/19)