Good afternoon, and thank you for participating in this session of the WTR Insights Conference featuring Aduro Clean Technologies. My name is Peter Gastreich, and I serve as Managing Director of Energy Transition and Sustainable Investing at Water Tower Research. Today, we are very pleased to be hosting Ofer Vicus, Co-Founder and CEO of Aduro Clean Technologies. Ofer, thanks for joining and welcome to the WTR Insights Conference. Hi, Peter. Thanks for having me and hello to all of our investors. All the listeners, I guess for now. That's right. Before proceeding, I must note that Aduro Clean Technologies' safe harbor statements can be found on the investor tab on their website. Also, this fireside chat is not to be reproduced, nor may a transcript be distributed without prior written consent from Water Tower Research. As always, investor questions are encouraged. Please enter them in the chat box and we will address as many as possible during the session or within our forthcoming management series report. Those wishing to request a meeting with Aduro can do so through the conference portal. With these items addressed, let's move forward. Ofer, some of the investors viewing today could be new to Aduro, so could you give us a high-level overview of the company? Certainly. We have developed what we call a platform chemical technology. We established Aduro in 2011. It is based on a very unique phenomena we identify whereby under certain conditions, we are actually breaking high and heavy molecules. By that I mean heavy oil, renewable oil, maybe waste plastic, and turning them into a useful material. This is what we've been doing. That phenomena is so rare that we investigate, check, and rechecked over the years by many organization. We develop about 10 patents that is related to that. So far, not a single organization came back and says, "Oh, this is obsolete. We never heard of this." All the organization that we've been talking to were either positive about it, wants to test it, or never heard of it. That's created a lot of, kind of a name for Aduro as we moved on and become public. Before April, I think it's April 2021, there was no reason for you to see Aduro at all. Aduro was under the radar, no social footprint. After April 2021, Aduro become public and we did an IPO later on the Nasdaq. That's in a nutshell about the company, and technology is quite useful. We're basically taking low-value material, and under our conditions, we're turning it into a higher value product. We have applications in changing heavy oil to lighter oil, taking renewable oil into renewable fuels and, of course, what the subject of our discussion today, very much leading a new innovation in the chemical recycling. In other words, answering to waste plastic and turn it into recyclable naphtha. That is the material that could be used later to build up the building blocks of new plastics. Okay, that's a great introduction, and we'll dig a bit more into technology in just a moment. Let's first sort of talk about the opportunity at hand with waste plastic. I understand that only about 9% of plastic waste gets mechanically recycled today. How big is the opportunity at hand for your company, and what's driving that urgency now, both commercially and from a regulatory standpoint? Peter, this is overall at the most high level, I should say that, us as society, we just want to get rid and do as much as we can with plastic. We as society does not accept any more contamination in the water, contamination, I guess, on the field. We're trying to do our best to change that. With this, there is an uprise of regulation. Europe is leading that. It's actually quite strong regulation. That create a market, but companies, organization in the rest of the world are moving forward. Countries in the rest of the world, the Far East is coming in, Mexico is coming in, Canada is coming in, and I think the USA will come in. Actually, I recently heard that they came in. This market is much needed, and looking for solution. Overall, there is about, you're right, there's about 400 million tons every year that society has produced. You can see that on the graph on the left. The 9% that you mentioned is actually all goes to mechanical recycling. You're correct on that. There is another 1% that is doing chemical recycling. It means that not a lot is happening. In other words, we're not actually quite successful in turning more plastic into something, or waste plastic into something very useful. Under those conditions, when Aduro is coming in, we have a great opportunity to take material that is actually dedicated today to the landfill, that otherwise is just too expensive to process, too expensive to sort, too expensive to clean, and in that sense, you can see that, Peter, we have very, I guess, less competition on that. There's a lot of organization that are doing chemical recycling, and those organization are quite impressive, but they all have only 1% of the market. Just a word on the organization, you can see here, Mura is associated with Dow Chemical. Plastic Energy used to be associated with SABIC. Quantafuel used to be associated with BASF, very large organization. All of them have been using this thermolysis or pyrolysis tech, where Aduro, which developed this, the chemolysis, is actually superior in performance to all of them. That means that when I go back to the market, Aduro has this opportunity to take material that otherwise would be designated to the landfill, which is a vast opportunity for Aduro. Okay. Yeah. It certainly looks like a huge opportunity. You had on the next slide this HCT technology and also a number of companies there that are pursuing chemical recycling, as I understand. Yes. But what is it about your process that's difficult to replicate, and where are the clearest advantages that you see versus these alternative approaches? Okay. Yeah, that's a great question. In the realm of plastic recycling, first of all, there is the mechanical recycling, which is just cleaning some material, aggregating it, and doing something with it. It has its limitation, it has its benefit, but it's the first go-to market. Plastic is very cheap. Everything that is later, let's say, build on or rejected is moving to the chemical recycling. In chemical, in order to understand our technology, I'm just going to speak a little bit about pyrolysis in general. Plastic is made of a variety of different chemical components. Pyrolysis basically is a heat-based motivated approach, which effectively means that if you heat different types of plastics in the same area, basically you get all kind of issues to deal with. You need to hydrogenate it, you need to clean it, you need to do some kind of a very strong sorting before. In other words, the technology, pyrolysis itself, is somewhat chemically limited, although there is some wonderful organization there. That chemical limitation drive economical limitation. Most of the time you speak about very large centralized centers that are doing it. Chemolysis operates in a very different way. Chemolysis, our technology, basically is a mix of a catalytic material that we found to be very cheap, with a little bit of water and with a little bit of what we call hydrogen donor. By me saying hydrogen donor, if all the companies that you see here on the left required actually hydrogen to wash and clean the liquid that they are producing, we do not need them. Just by that, there is a huge capital cost that is associated that with we are saving. Chemolysis, because of under our condition, we have high tolerance to contamination, we operate in a lower temperature mode, our yield is better, and the material that we're producing is actually higher quality without the need, for example, for hydrogenation. All of that, Peter, can be done in a process that is on a smaller scale. To give you numbers, most of the organization on my left that are doing pyrolysis would consider 100,000-200,000 as a commercial operation. We, at 100,000-200,000 tons per year, our commercial operation starts with 25,000 tons per year processing. If you have 100,000 tons feedstock, we'll give you four unit. We have a lot of elasticity based on what I just told you. On top of that, we have the benefit of the technology. On top of that, we have the marketing advantage. All of that actually drives a quite strong value for the company. You've engaged with some majors, like Shell and TotalEnergies. What are these companies looking for when they evaluate your technology, and what's resonated most with those companies? Yes. Over time, we engaged. We came really into the market as an unknown, as an underdog. This is something I really want to press on our investors. Prior to 2021, there was no reason for anyone to know us. We came out of the blue, and we had no social media, no social footprint. If you were an investor, we would sign you an NDA just to tell you what is it we're doing. We've done it since 2011. The organization that met us after post-2021, we got them by surprise. Most of them, first and foremost, wanted to know exactly what we are in what we call a fail fast approach. That was the Shell GameChanger, only that we didn't fail, and it took them two, three years to graduate that. There was a lot of questions that they've been asking because the technology is innovative. Once we graduate with Shell, for example, we're in discussion, and we'll see how they work. I think right now we're focusing on building the industrial unit. Probably at some point of time we'll talk to Shell as well. That goes the same for Total. Total came in and really were curious of what is it we're doing. We had some testing for them to do it. Later, very quickly, we moved from just some experiments and testing to show them what is the technology into some kind of collaboration. With collaboration, it means that they are actually testing much more intensely the technology in order to understand how can they adopt it should they want. That was what's happening with those two large organization. The other organization that you see here are more organization that were looking for dedicated solution. GF, for example, produce very strong pipes. The pipes are really hard to recycle. I think in terms of chemical recycling, probably Aduro is the only one in the world that can do something. We have a program for a dedicated solution just to look into what we call cross-linked polymers. I think overall, the initial program was just to test the technology, but later each organization is building up its position based on where they are today and making a decision, how do they want to proceed once we provide this data? By the way, all of those organizations that I mentioned, Peter, have paid and participate in the program. We have never accepted an organization that just wants some samples for free because we've been, on one hand, lucky with having such marvelous technology. On the other hand, it was a decision we make internally that we will not serve anyone that is not just interested just to kick the tires and see what is going. We hope that there is some interest overall, and I think so far they show that. This product is a fully drop-in solution, right? It fits right into the existing petrochemical infrastructure. Yes. For that reason, for our investors, we should say that when Aduro is doing chemical recycling, the final product that Aduro is producing, we have a variety of product that we could produce because there's a lot of knob in the system. For chemical recycling, the final product is basically an oil base, a paraffinic oil base, that it could be delivered to a very large machine called naphtha cracker. That naphtha cracker takes on virgin oil and takes on what we call the circular oil, so circular naphtha and virgin naphtha, and they mix it together to build the building blocks of new plastics. They send their product to the ethylene factories and other factories. At the end of the day, you can see the circularity, you can see how organization that are buying this material and producing new product could say this is made with, I don't know, 10% circular material, for example. By the way, that related again to the regulation in Europe that is kicking in coming 2030 and seems to be quite aggressive. Let's talk about your commercialization roadmap. You have the pilot plants in Ontario. Going through to the first planned first of a kind facility in the Netherlands, what are we looking at here in terms of the stages, and what do you need to prove along the way? Right. Peter, first of all, we are, let's say, 90% licensing and 10% build on operate. We knew that licensing operation could take some time, definitely when we're talking to Fortune 500, such as the Shell and Total, and so we didn't really want to rely on that. We always told our investors that we will do some build on operate units so we could control a little bit of fate and be owner of our destiny and generate revenue. Today, as promised to our investors, we build a pilot. It's on our site in London, Ontario. That pilot is up and running. We are troubleshooting it day in and day out. We have learned in the last three or four months of this pilot already enough information to improve significantly our commercial first of a kind unit. Recently, we published that we are going to work in the Netherlands in a very large chemical hub called the Chemelot. It's a part of the Brightlands Chemelot hub. Under those conditions, Peter, sorry. Yep. Okay. Under those conditions, basically we are locking down and aiming to build our first of a kind, which is basically a semi-commercial unit. It is a 10,000 tons per year unit. We are marching head into it as we speak right now, and I think we are hoping to be ready by H2 of 2027. Again, to our investors, this is the things we told investors right off the bat since early 2025. We're moving in stages, and we're running with the pilot. We're learning on the pilot, but we're already starting to build information on the build on operate side. Recently, Peter, we published a very strong press release, which talks about an EPC that is working with us on the other side, which is the licensing program, and I urge our investors maybe to go and read that publication. This is the first step to tell our investors we're not just doing build-own-operate, but we're now taking a look at our licensing product as well. Turning over to regulatory tailwinds, it seems with these extended producer responsibility regulations and recycled content mandates that are rolling out across Europe and elsewhere, this seems to be a pretty good tailwind. How directly do these policy frameworks translate into demand for your products? I think it's a great question because we always rely, generally speaking, we build the technology to be almost independent to regulation. If there was no regulation, then we could produce fuel out of it, and the price for feedstock would be lower, and we'll still have our margin. Actually, the regulation, when it's coming in and the way we see it right now, it's coming in a quite strong and positive side for Aduro, and now let me explain. Most of the regulation dictates that only material that is actually participating in production of new plastic will be credited and accepted. When I put our peers' pyrolysis on the line, they face or suffer some challenges that at the end of the day, maybe almost half of, don't get me on the numbers, but quite a lot. Let's say almost half of their liquid oil is petroleum-based product. Petroleum-based product doesn't recognize and doesn't accept it as a credit for production of new plastic, only the other half. Not just that they have capital costs that are higher, not just that they need more hydrogen and they work in higher temperature and require more energy. Almost less than half of their material actually been able to be recognized as material that goes to circular naphtha. When I put one-on-one those numbers, Aduro is almost twice of that, which effectively means that we have significant benefit in compared to anything else around right now in the market. For that reason, we literally see ourselves as a next generation, as the company, as the technology that actually could replace one day pyrolysis down the road. For that reason, you can see why we are speaking to investors as much as we can because we hope investors will do their due diligence, confirm our assessment, and be able to make better judgment of where we could be in two years, three years, four years, beyond just the 2030. Just to say on the regulation, it's working very well for us. Okay, that's great. Maybe we can move over to your financial position. Yeah. Recently, you raised roughly CAD 23 million in a public offering, so had a good success there. How should we think about your current capital position post that raise, and how are we going to support the next phase of development? What do you want to tell investors about your long-term financing and capital strategy? Right. I think first of all, we're cashed up. We have about CAD 40 million in the bank. It's good enough for this year. Everything that we want to do this year will be done by this money. We always like to think, basically long-term. Whenever and if we will do ever a raise, we call it when the stars will be aligned. The price of the share will be right. We are 34% inside ownership. We think like our investors. We share the same dilution kind of a concept. We don't want to be diluted too much. Every raise that we did so far, we've been making it on a higher pricing. There is history to that. Invite your investors. We're fighting very hard to make sure that investors understand that we will only raise money when it's right, the timing right. We're not raising when we need it. We're raising when the opportunity is right for us to do it. We have no plans as we know today, under those conditions right now, to do any raise. We are using this time actually to create, I call it lemonade out of lemon. We are working very hard on execution. We believe there is a lot of upside to the company that we will produce. We believe that, if the stars will be aligned in a few months, if things will be kind of okay and the share price will be appropriate, then we'll consider. Other than that, we have no plans right now. We're fully cashed up. Yeah, that insider ownership at 34% is noteworthy there as well. Yeah. Thank you. Lots of hard work to make it. Yep, absolutely. I'd like, in a moment maybe to talk about the signpost for investors, but before we start looking into this sort of forward-looking over the next 12 months or so. Yeah. Is there anything about the story that we might have missed that you'd like to draw our attention to here? In a nutshell, I think Aduro is a rare company to look at. I hope that your audience will take its time to appreciate the work that we've been doing over the last years. I want to say to your audience that over the last three or four years, we set up certain goals, and the goals were dedicated to do either one of the following, create opportunity, de-risk the company, or add some value. I'll give you an example. If we're doing some more patents, we add some value. If we do another business deal, we create opportunity. If we are moving along with the design of a machine, of a unit, we are reducing the risk of the company. Every year we did our milestones and we nail those milestones. This is our intention going forward. Any investors that look to us, I kind of want them to look at the performance of what we've been doing over the last year and even over the last two years. When we say something about next year and the year after, we absolutely intend to make it. When they do their due diligence, they'll have not just the vision of where we're heading, but also some record of our achievement in the past, basically. Okay, great. Looking forward, say, over the next 12 months or so, what are the signposts that investors should be watching for as evidence that management is continuing to execute on this strategy? Right. We have basically a very strong two activities that we publish day in and day out that we work around it, and they are the sum of several projects. Our next-generation pilot is up and running. We're right now at the stage of kind of doing some optimization to this unit. The goal of this unit is really to generate sufficient information to support our first of a kind, our industrial unit. We will publish in the next few months information about the yield, about the performance, about the engineering of it, about the environmental performance. We didn't talk in this discussion about the environmental performance of the unit. We think we are in a league of our own. We waited for the pilot to be up and running in order to show that rather than put some things on Excel. Those are the type of things that investors should look. Going forward, we are very much dedicated to build our first of a kind, our first industrial, semi-industrial unit right there in the Chemelot site in the Netherlands. Investors will see some press releases that are associated and related for that activity as well. I think the third activity that we are working on is the licensing activity. The fact that not just that we're doing what we're doing, but we are now starting to look to organizations that are working with us, viewing our work, inspecting our work on the pilot and inspecting on our work on the first of a kind unit in order to build a process that you could license later to organization. That is very meaningful, Peter, because if we can sell whatever unit we can sell, you can appreciate that the global EPC have a very different marketing capacity. We intend to partner one way or the other with such EPCs, and I think last week or the week before, we announced our first step. All of those things, lots of upside. I'm hoping we can come back in three or four months, and you can ask me where have we been, and we can challenge that and see what we achieved. Okay, absolutely. We'll look forward to having you back as often as possible. We love to speak with you. It's been a great comprehensive overview of the story. Thank you very much. Maybe before we close, do you have any closing remarks for the investors? I appreciate every minute they put on and listen to what we have to say. Thank you for that. Okay. Well, thank you very much, Ofer. We really appreciate your participation in our Insights Conference today. Thanks also to investors for tuning in. More materials on Aduro Clean Technologies are available at www.watertowerresearch.com. We will have a write-up of this conversation coming up in about a week as well. Again, if you'd like to submit additional questions or arrange a meeting with management, please use the conference portal. Well, that will wrap up the first day of the WTR Insights Conference. Please join us for the second day of the conference kicking off tomorrow morning at 8:30 A.M. Eastern. Thank you very much.