Hello, and welcome to the Aduro Clean Technologies Fireside Chat. My name is Roger Weiss, and I'm a Vice President here at Lytham Partners. Today, I'll be moderating a Q&A discussion with Ofer Vicus, the CEO of Aduro Clean Technologies, which trades under the symbol ADUR on the Nasdaq and the symbol ACT on the CSE. Ofer, welcome to the Lytham Summit. Hi, Roger. Thanks for having me, and hello to your audience. Pleasure to be here, and excited actually. Our pleasure too. Let's start. Maybe, Ofer, you could give us the five-minute overview of Aduro and how it's revolutionizing the solutions to things like recycling plastic waste, upgrading of tar sands bitumen, and enhancing renewable fuels. Oh- More importantly, can you discuss with that, your Hydrochemolytic Technology, if I pronounce that correctly? Oh, Hydrochemolytic, this is what happen when you give scientists the marketing, you know, the marketing job. That's what you get, doing it in five minutes, that's absolutely a challenge because we need to summarize more than 15 years of work in the area. In a nutshell, Aduro is based on a phenomena we discovered somewhere in 2011. The phenomena is such that if you put some materials such as heavy oil under our conditions, which is a little bit with water and a catalyst that is nature, it's in embedded in the heavy oil already, it's actually break down the molecules in a very finesse way. Molecules in heavy oil or in others, once they break down, they become very much reactive, and they would need hydrogen. We discovered that we do not need actually hydrogen. We can stabilize this material if we just had some source such as glycerol or ethanol. Suddenly this phenomena become a platform technology with lots of patents because we could basically take catalyst that is embedded in the heavy oil and other catalysts in other applications and maybe seize or cut the molecules or create a low value to a higher value liquid, and we could stabilize it without the need of hydrogen. Very cost-effective, cheap machine to do something the refinery and others are spending a lot of money and a lot of energy. Fast-forward 10 years after that, we have applications in the heavy oil upgrading. We have applications in chemical recycling, where we take low value rigid material or flexible waste plastic, and we turn it into circular oil that could be used to production of new plastics in a very cost-effective process. Got it. In terms of the addressable market for both plastic recycling, for upgrading or enhancing bitumen or renewables, you know, kind of how big is the market, and you know, in five years, what do you think you guys could capture of that market? I mean, the market is north of each aspect or each sector, say, bitumen upgrading, chemical recycling or waste plastic or renewable or others that we have in the back burner that we're not even doing right now, we're probably in total north of $200 billion. How much money have you got? It's really, really significant. This speaks a little bit to the rarity of the phenomenon which we discovered, and that speaks a little bit to the direction that each, specifically each application. When I call application, chemical recycling would be an application. Bitumen upgrading would be application. It's a company maker by itself. That's just in general. How far do you wanna go with this? Is the sky the limit for us? We're just starting. Moving forward, we had the commercialization phase starting from April 2021, and we're moving forward through a pilot and actually now building or starting to think about the first industrial process. Five years from now, we wanna be in a full processing capacity of chemical recycling. We think we have the capacity and nature to do that. We're probably gonna have one or two other applications in the making. Very much into commercialization. I'll say that not lightly, the nature of the technology is that you can do scale up rather than scale down. It's quite cheap, small process. Our thinking is that if in parallel, maybe, in chemical recycling, a normal operation would be 100,000 tons of processing capacity every year. For us, it's 25,000 tons. If you need 100,000, then you'll have four units, right? Our ability to scale up is quite significant. We think very small, but then we think how can we increase that very, very quickly, and this is where there may be confidence of ability to be there in five years. It's also a very flexible technology too in terms of kind of meeting people for what their needs are. Yes, that is the modularity here, it's significant. The phenomena itself is based on the phenomena that we discovered. Just the concept, the fact that we have low cheap catalyst available out there and the fact that we do not need hydrogen management of hydrogen is significant capital cost. You basically break down a refinery-like operation to more of a small scale, you know, container type, but it's not. It's a petrochemical process. It is complicated. It has a lot of advantage compared to the peers. We can take material that is a little bit more tolerant to contamination. We have many nodes. We operate in a lower temperature. We can add and upgrade the process to deal with very complex material feedstock, but also we can take dedicated solutions, create dedicated solution. We give on our, you know, day-to-day discussions, a specific market such as synthetic turf or agricultural waste, which is basically a very unified material that could be processed, but it must be addressed in a smaller scale, otherwise it goes to the landfill. On one hand we have a solution that is very capable and scale it up. On the other hand, we have a market, a very dynamic market with many types of feedstocks out there, and we can configure a solution to those on a very small scale, which is, you know, competitive peers is quite significant. That's very cool. You touched on it just a little bit, and specifically can you talk to your intellectual property and, you know, kind of talk about the IP moat here? Oh. The- Yeah. We feel it's very, very strong. That phenomenon. We're dealing, you know, when we did our research on the phenomenon, first patent we discovered or in that space was as early as 1930. It's absolutely saturated market by the biggest and the bravest, you know, the Shell, the Total, everyone has been there one way or the other. For us to build literally almost on average every year patent, you know. We have about 10 patents right now. One of them we bought just because of, you know, creating some picket fences, but everything else we develop in line. It's quite unique and in our environment to create that IP, understanding and that patent portfolio, it's quite significant. Over the last, as an example, maybe since 2011, since the company conceived, we've been looking around at competitors, we've been looking around at what others has been doing. What we found is basically that they are operating on the similar DNA, I'll call them legacy technologies. Mm. Where often our phenomenon is quite new, and this is where this DNA, which we call pyrolysis, for example, is about 75 years old. So it's quite a rarity to find something like what we do and develop it into a full commercial process. Got it. Basically, you know, the competitors are out there are all on, you know, the existing and certainly very old technology. Yes, and never say never. You know, we have to be humble about those things. In chemistry there's no free lunch and it's a little bit like baking. You add some sugar and you add some flour, you get challah. You add, you know, you make it different, you get some bread. So far we haven't seen anything similar to what we've been doing. We always keep our eyes open. We feel very strong that if anyone around us will want to compete with this, they better work with us rather than try to find another hole in the patent application that they could materialize on commercial level. We feel quite safe around it, yet we stay very humble about it. Very good. Kind of moving along, as Aduro transitions from a development company to a more mature commercial entity, how do you foresee the company's business model and where do you think that will go? It's a fantastic question. I'm excited every day by what's going on around us. We literally started from an idea, that's the background and a thesis out there, and we just had to to move around through the journey of commercialization from, you know, lab test to pilot to, industrial, unit. From what we see right now, you know, it's a, it's, a road that you have to take in order. We cannot jump scale some of those activities, but it feels that we have our hands on the right stuff. I mean, we're looking at, commissioning our first-of-a-kind machine, sometimes in the mid- to end of 2027 already, which will generate revenue. From that point forward, I think, it's more of a cut and paste situation. We're starting with what we call a simple to complex, so the simplest material that we will operate on initially, but the unit is set to be upgraded already for more complex materials. Coming forward as we are doing scalability, we will upgrade the unit. Overall, I think it's quite exciting journey for the company. We're at the verge of making an industrial machine that could actually later be licensed, although we're doing a lot of build and operate on ourselves as well. Got it. Just to clarify, the next gen pilot plant is going to then be not supplemented, but you're gonna add a second demonstration plant. Yes. Which will be a larger unit. Yeah. You know, should we think about those two, you know? Yeah. Facilities? The next generation pilot plant is, let's say, a 10 kg an hour machine. It's a machine that overspec so to allow us to do more than we need. This is at the level of our site, our pilot site in London, Ontario. That machine is dedicated to work on for customers, for R&D, and for our design for our industrial unit, what we call first of a kind unit. It's not a demo unit, it's a unit already that will generate revenue, will confirm reproducibility, we'll be able to show it to customers. Our intention is to upgrade this unit immediately to a larger size so we can immediately move into commercialization. The relationship between the existing pilot to the larger pilot is very close. The team working on the existing pilot investigate aspects on industrial scale, many aspects of the process in order to confirm that we can have a smooth reach out to the industrial unit. It's fascinating because we started from an idea initially, and now we're looking at things on industrial scale, which is, you know, really for someone to see things coming from an idea. I can't tell you how excited it is. You know, looking at it's growing to that level. That's. Then later on, seeing the organization that are joining in because of that, actually making. You know, you at some point of time you feel, "Am I the only drunk? I need other people to be" you know, to look around you, to make sure, and they're joining in. It's very, very exciting. That's great. Now, what are the advantages of having that demo plant located in the Netherlands and in Europe for you as opposed to just building it, you know, in Canada or here in the United States? Right. We'll call it first-of-a-kind rather than a demo plant. Okay. Bear with me on this. Europe is very advanced on recycling in general. Mechanical recycling was the first, and chemical recycling came second. Europe compared to other areas in the world have pushed in some, I guess, rules to establish chemical recycling, and mechanical recycling. It's pretty much advanced in many ways. About four or five years ago, we've been engaged with an organization called Brightlands Chemelot Campus in the Netherlands, which is a chemical hub that has two phases. The first phase is hosting pilots, just like our next generation pilot. The second phase is actually an industrial site where you place your machines. By the way, Eric, our CRO, is used to, y ou know, we got him converted from that place to work with us after we've seen many technologies. The decision to be in the Chemelot area is perfect, although we actually investigated three or four other sites. It's ideal place for us because it's in the center of Europe, it's very receptive to the regulation that is coming. It gives us a place where in the future we could expand. Although we're focusing very much on the first-of-a-kind unit right now, we are building already resources and the utilities should we see everything works well, you know, to be able to expand. I think the rest of the world is coming forward into this. In Canada definitely where, you know, we are in Canada and we see the regulation coming in. Europe is basically a really, really good place for us to start on industrial scale. That particular place give us the ability also to scale up should we need. It's double whammy on this. Very good. Thank you. Let me move on. I think when you announced your second quarter 2026 results, you also noted in the release that you had a successful pilot steam cracking of waste plastic. Yes. Uh, or I should say of, uh- Naphtha cracker. Hydrochemolytic oil that was derived from waste plastic. Yes. Can you talk about that and what's the significance of both the cracking. Since then we- Where the oil came from? You know, when I speak to you now and I go backwards, I'm thinking everywhere there is a really significant announcement almost from that moment forward, almost every month since then. The recent announcement that we make is that we have engaged an EPC to start looking at our licensing process, and I'll touch about all that later. The significance of that is that basically Europe demands that a portion of every plastic that is made will be with circular material inside. Those machines are called naphtha cracker. Basically, when you do chemical recycling, all of our peers and us are handing over some liquid oil to these guys to mix it with new oil, so later they could make new plastic out of it. There's only a handful, probably four companies in the world that are producing those licensing machine. To be able to show on a very early stage that our process demonstrate adaptability, so in fact it can be accepted as is on because they simulate it on their pilot, is a significant message to the world that we are on the right track. Being on the right track is something we try to be transparent and show our investors ever since. We told, and we're telling investors where we're heading, and then we're coming back and executing on that. That specific moment suggests that our technology demonstration unit has been able to produce material that is fit to that circularity level. If I take it forward later, the regulation dictates that a portion of material will be mixed with the regular virgin plastic where our peers, let's say yield on this, is relatively. Let's say on the final calculation, it's called mass balance calculation, somewhere around 50%, 40% or 50%, our ability or yield is somewhere around the 75%-80%. What does it mean? That you can take more of our material without blending it and dilute it with virgin plastic compared to our peers, because our peers probably almost half of the material that our peers is doing is considered to be liquid fuel and it doesn't account in the mass balance regulation that Europe is introducing. They suffer much more than we do on that end, and that gives us another advantage, on top of the performance of the yield and everything else that the technology has been doing. Quite fantastic, and strong message. Got it. Just, you know, we kind of maybe good segue, you know, in terms of announcements, because the company recently announced a memorandum of understanding, an MOU. An EPC. With a “leading global engineering procurement.” Yes. And construction company. Yeah. For commercial licensing of your technology. Could you talk about that and kind of? Yeah. Roger, we have two business models that we are moving on, and one of them is build on operate because we think the licensing part may be, well, may take some time, and we've been very transparent on that, from early day to our investors. While we are working in the Netherlands to build the site, to build the first of a kind and potentially build expansion where we will own, we already engaging. It's a very significant press release. I know it got lost, maybe perhaps a little bit with the whatever goes on around the world right now. It's basically an acknowledgement and a validation that the EPC that is working with us, which is no surprise, they've been looking at us and working with us in the last few months, a little bit more than that, are ready to take on and build, work with us on a process that could be licensable. Now we're developing our second path for licensing. When you are licensing machines in our industry, you have to place some performance guarantee, and only EPCs of that size, you know, can actually sell and create assurance for refineries or for other organizations that our process will work the way they would ask. That's called a performance guarantee. We are so excited. We are now looking at an industrial-scale machine that will be licensable. It will take some time, and we're working on it. It means that EPC we could later utilize its marketing power to sell it across the world, and this is in parallel to our build-own-operate. Quite a lot of things happening at the same time in our little company. Quite exciting. As I understand it, this is a big company, you know. Yeah. That is basically partnering with you and basically saying to other very, very large, perhaps petrochemical companies, et cetera, that we're vouching for the technology and the ability to apply it and save you money or help you make more money. Yeah. I wanna be very careful with any forward-looking or any statements on that. Yeah. On that end. I wanna stay humble as we continue to stay. At some point of time we will disclose the name of the company and I guess the vouching will increase. Fair to say is that they are agreeing with our model of a smaller scale unit that could be scaled up. They're agreeing with the concept of the configurability. They're excited to take a look at that compared to what is available in the market. All of those things are really good things that the company you know that they have to kind of agree with that in order to move forward on that. We have already a plan, and in this plan, of course, we'll start develop the important item that related to all the items that you just mentioned, Roger. It just in the making, just getting a process like us into a refinery and tell the refinery manager or the owner, "Don't worry, it won't explode," that's not something that is happening. You need to do some work around it, and I think this is the work we're doing right now with the EPC. Got it. Ofer, when companies do these kind of things and meet with investors, one of the big questions people always ask at the end is, "Gee whiz, you know, how much money do you need to accomplish all these things?" I know- Right. That the company at the end of last year raised about $20 million on a gross basis. How long a runway does this give you to accomplish a lot of the goals that you're looking to do? Yeah. It's a very, very good question, and we're very much cashed up right now, at least for sure for 12 and more months. Everything that we wanna do in this is already budgeted. On that end we're good. Of course, we always plan that way, Roger. We take money when we are actually raising money, we're thinking of our existing investors first and foremost. We're very, very sensitive to dilution. What we wanna do is to raise money where the stars align. We have a runway right now to do whatever we need to do, and if time comes and, you know, the stars will align and the price of the market will. The share price will be fine, and we'll have a lot of excitement all around us, then maybe there'll be others, but we don't see any need right now to raise money. It's fair and square. We feel cashed up. It gives us a lot of strength to do what we wanna do and to focus on our execution, which is something we told always to our investors. We, you know, the way we're working is, and I think I should say here that, you know, our CFO is leading really, really in a strong hand here, our financial aspects, and you can see it. It's been presented, it's very strong. The chart is healthy. We have a loyal base of investors that are joining in. We keep it simple. Whatever you see, this is what you got. There's no any hangovers or any financial instrument on top. There's no debt. The company is clean. We're really thinking long run, adding value in every stage and making sure that, you know, within every three or four months you see something new, so you understand that we're adding value or creating some opportunity or de-risking the company. Very good. Well, I think we're about out of time. Oh. So -- I enjoyed that. I did too. Ofer, thank you. Thanks to everyone out there who's watching this Lytham Summit segment. If you have any questions or would like to schedule a meeting with Aduro, please send me an email. My address is weiss@lythampartners.com. We have additional presentations and fireside chats coming up next, so please stick around for more. Thank you all, and have a great rest of the day.