Company Announcements

NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THE INFORMATION WITHIN THIS ANNOUNCEMENT WAS DEEMED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 PRIOR TO ITS PUBLICATION. UPON PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

9 September 2019

Quadrise Fuels International plc

("Quadrise", "QFI'', the "Company" and together with its subsidiaries the "Group")

Underwritten Open Offer of up to 46,555,039 Ordinary Shares at a

price of 3.96 pence per Ordinary Share

Subscription for 18,101,012 Ordinary Shares at a price of 3.96 pence per Ordinary Share

Issue of Open Offer Warrants and Subscription Warrants

and

Notice of General Meeting

Further to the announcement made on 23 August 2019, Quadrise announces a fully underwritten open offer to raise up to approximately £1.8 million through the issue of up to 46,555,039 Open Offer Shares at the Issue Price of 3.96 pence per Open Offer Share on the basis of 1 Open Offer Share for every 20 Existing Ordinary Shares held on the Record Date (the "Open Offer"). The Open Offer has been fully underwritten by Peel Hunt.

In addition, the Open Offer presents Qualifying Shareholders with an opportunity, provided that they take up their Open Offer Entitlements in full, to apply for additional Open Offer Shares through the Excess Application Facility. The Open Offer is conditional, inter alia, on Shareholder approval of the Resolutions at the General Meeting.

The Company is also pleased to confirm that, as a result of additional investor demand following the announcement by the Company of the intended open offer on 23 August 2019, the Company has entered into conditional binding agreements with the Subscribers to raise additional gross proceeds of £716,800 through the issue of an aggregate 18,101,012 Subscription Shares at 3.96 pence per Subscription Share, with 9,050,506 Subscription Warrants attached. The Subscription is conditional, inter alia, on the Resolutions being passed at the General Meeting.

A circular setting out full details of the Open Offer and Subscription, including the terms and conditions and details on how to accept the Open Offer (the "Circular") and an accompanying Application Form (for Qualifying Non-CREST Shareholders) will today be posted to Shareholders and will shortly be available from the Company's website at www.quadrisefuels.com.

A notice convening the General Meeting, which is to be held at 11.00 a.m. at Park Plaza Victoria London, 239 Vauxhall Bridge Road, London SW1V 1EQ on 27 September 2019, is set out at the end of the Circular.

Capitalised terms used but not otherwise defined in this announcement bear the meanings ascribed to them in the Circular.

Open Offer and Subscription

On 23 August 2019 the Company was pleased to announce that it had secured funding of at least £2 million, being the first tranche in an issue of convertible securities, in order to progress recently announced business development opportunities towards trial projects and commercial contracts. These funds will secure the Company's financial position through to 30 June 2020, subject to Shareholder approval of the Resolutions to be proposed at the General Meeting and required to provide the necessary share issuance authorities to enable the conversion of the initial tranche of convertible securities. Further detail of this Funding are set out in paragraph 8 of the Circular.

In recognition of the continuing support from Shareholders, the Company also announced on 23 August 2019 that it intended to offer existing Shareholders the opportunity to participate in an open offer of new Ordinary Shares in the Company with warrants attached.

Accordingly, the Company is now, conditional on Shareholder approval of the Resolutions at the General Meeting, making the Open Offer to Qualifying Shareholders of up to 46,555,039 Open Offer Shares to raise up to approximately £1.8 million at the Issue Price of 3.96 pence per Open Offer Share on the basis of 1 Open Offer Share for every 20 Existing Ordinary Shares held on the Record Date. The Open Offer has been fully underwritten by Peel Hunt.

As part of the Open Offer, each subscribing Shareholder shall receive 1 Open Offer Warrant for every 2 Open Offer Shares subscribed for, vesting immediately on Admission. Each Open Offer Warrant will grant the right to subscribe for one new Ordinary Share at 7.48 pence. The Open Offer Warrants shall expire on the date falling 36 months from Admission.

The Open Offer is fully underwritten and will raise total gross proceeds of approximately £1.8 million. The Issue Price represents:

·  a discount of 10 per cent. to the closing mid-market price of 4.40 pence per Existing Ordinary Share on 22 August 2019, being the last practicable date prior to the announcement of the Company's intention to launch the Open Offer on 23 August 2019; and

·  a discount of 15 per cent. to the closing mid-market price of 4.65 pence per Existing Ordinary Share on 6 September 2019, being the last practicable date prior to this announcement.

Both of the Executive Directors of the Company and two of the Non-executive Directors of the Company have irrevocably undertaken to subscribe under the Open Offer, in respect of an aggregate of 610,586 Open Offer Shares, with all four of the Directors undertaking to subscribe for their entire Open Offer Entitlements (an aggregate of 245,045 Open Offer Shares) and certain of the Directors applying for an aggregate of 365,541 Open Offer Shares under the Excess Application Facility.

The Company is also pleased to confirm that, as a result of additional investor demand following the announcement by the Company of the intended open offer on 23 August 2019, the Company has entered into conditional binding agreements with the Subscribers to raise additional gross proceeds of £716,800 through the issue of an aggregate 18,101,012 Subscription Shares at 3.96 pence per Subscription Share, with 9,050,506 Subscription Warrants attached. The Subscription is conditional, inter alia, on the Resolutions being passed at the General Meeting.

The terms of the Open Offer, the Subscription and the recently announced Funding are described in the Circular and, as explained below, the Directors believe the funds raised as a result of the Open Offer, the Subscription and the Initial Tranche of the Funding will, subject to the passing of the Resolutions at the General Meeting, secure the Company's financial position in enabling the Company to continue to operate and advance its business development initiatives at current levels of expense until 31 December 2020.

However, should the Company successfully enter into a trial project with a prospective partner during this period, the Directors would expect current expenses of approximately £260,000 per month to increase materially prior to the Company being able to advance any secured project to the stage of positive cash flow generation. As a result, should the Company enter into a trial project with a prospective partner, the Directors consider that the Company would be required to raise additional funds prior to the end of calendar year 2020.

The Open Offer is subject to the satisfaction, inter alia, of the following conditions on or before 2 October 2019:

(i)     the Resolutions being passed at the General Meeting;

(ii)  the Underwriting Agreement having become wholly unconditional (other than as to Admission) and not having been terminated in accordance with its terms prior to Admission; and

(ii)    Admission.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

For further information, please refer to the Company's website at www.quadrisefuels.com or contact:

Notes to Editors

QFI is the supplier of MSAR^® emulsion technology and fuels, a low-cost alternative to heavy fuel oil (one of the world's largest fuel markets, comprising over 450 million tons per annum) in the global shipping, refining and steam and power generation industries.

Background to and reasons for the Open Offer

2019 has, to date, been a year in which the Group has built considerable momentum in implementing its new strategy of developing a wider range of MSAR® project and commercial opportunities. We have demonstrated staged progress in a number of important markets for the Group and are, therefore, well positioned to progress these opportunities with our commercial partners in the relevant countries/regions. This provides, we believe, firm foundations for the Company's future growth.

The Directors believe the funds raised as a result of the Open Offer and the Subscription will, subject to the passing of the Resolutions at the General Meeting and together with the proceeds of the Initial Tranche of the Funding and the Company's existing cash balances, secure the Company's financial position in enabling the Company to continue to operate and advance its business development initiatives at current levels of expense until 31 December 2020. Whilst the Board anticipate being able to make substantial progress, the Company does not expect to be able to advance any secured project to the stage of sustained positive cash flow generation in this timeframe.

As a result, and given the longstanding support of Shareholders, the Board believes it is appropriate to raise additional funds by way of the Open Offer and the Subscription through the underwritten Open Offer available to Qualifying Shareholders of up to 46,555,039 Open Offer Shares at the Issue Price of 3.96 pence per Open Offer Share and the Subscription by the Subscribers for 18,101,012 Subscription Shares.

The Subscription

As a result of additional investor demand following the announcement by the Company of the intended open offer on 23 August 2019, the Company has entered into binding commitments under the Subscription to raise additional gross proceeds of £716,800 through the issue of an aggregate of 18,101,012 Subscription Shares at the Issue Price of 3.96 pence per Subscription Share by way of direct subscription with the Company, with 9,050,506 Subscription Warrants attached on the basis of 1 Subscription Warrant for every 2 Subscription Shares subscribed for.

Each Subscription Warrant will grant the right to subscribe for one new Ordinary Share exercisable at 7.48 pence. The Subscription Warrants shall expire on the date falling 36 months from Admission.

The Subscription is conditional on, inter alia, the Resolutions being passed at the General Meeting.

Views of the Board

The Board believes that the net proceeds of the Open Offer, which is underwritten by Peel Hunt, alongside the proceeds of the Initial Tranche of the Funding, the Company's existing cash balances and the net proceeds of the Subscription, will secure the Company's financial position in enabling the Company to continue to operate and advance its business development initiatives at current levels of expense until 31 December 2020, subject to the passing of the Resolutions at the General Meeting.

The Board therefore considers the Proposals to be in the best interests of the Company and its Shareholders as a whole.

Both of the Executive Directors of the Company and two of the Non-executive Directors of the Company have irrevocably undertaken to subscribe under the Open Offer, in respect of an aggregate of 610,586 Open Offer Shares, with all four of the Directors undertaking to subscribe for their entire Open Offer Entitlements (an aggregate of 245,045 Open Offer Shares) and certain of the Directors applying for an aggregate of 365,541 Open Offer Shares under the Excess Application Facility.

Financial information

Audited accounts for the Group for each of the three financial years ended 30 June 2018, 30 June 2017 and 30 June 2016 are available on the Company's website www.quadrisefuels.com.

As at 31 August 2019, the Group's unaudited cash balance was approximately £0.7 million. The net proceeds of the Open Offer and Subscription, together with the proceeds of the Initial Tranche of the Funding now received by the Company, will materially enhance the Company's cash balance.

Use of proceeds

The net proceeds of the Open Offer and the Subscription will be used to further strengthen the Group's balance sheet and will provide the Company with additional funding in pursuing its business development plans and will extend the time horizon available to the Company to progress existing material project opportunities.

The Directors believe the funds raised as a result of the Open Offer and the Subscription will, subject to the passing of the Resolutions at the General Meeting and together with the proceeds of the Initial Tranche of the Funding and the Company's existing cash balances, secure the Company's financial position in enabling the Company to continue to operate and advance its business development initiatives at current levels of expense until 31 December 2020.

Should the Company successfully enter into a trial project with a prospective partner during this period, the Directors would expect current expenses of approximately £260,000 per month to increase materially prior to the Company being able to advance any secured project to the stage of positive cash flow generation. As a result, should the Company enter into a trial project with a prospective partner, the Directors consider that the Company may be required to raise additional funds prior to the end of calendar year 2020.

It has always been the Directors' intention to minimise dilution to Shareholders and so it is not intended to raise the funds necessary to progress projects from trials to commercial operations. With the structured milestone driven approach to project development, it is the Directors' view that these funds would be raised immediately on entering into such agreements.

Should the Resolutions not be passed at the General Meeting, neither the Open Offer nor the Subscription will proceed and an "Event of Default" would arise under the Funding agreement, which would enable the provider of the Funding the right to demand repayment in cash of the aggregate amount of the Initial Tranche of the Funding that had not been converted at such date and to receive a payment of £90,000 in respect of the Funding Warrants which would not be capable of issue. As at the Record Date, an amount of £2.15 million was outstanding and unconverted under the Initial Tranche of the Funding. In such a scenario, the Company would thereafter need to secure additional funding by either making a further open offer or pursuant to a further, potentially much less attractive, funding alternative.

The Board therefore considers the passing of the Resolutions at the General Meeting to be critical and unanimously recommend that Shareholders vote in favour of the Resolutions.

Recommendation

The Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do so in respect of their beneficial holdings amounting, in aggregate, to 34,310,504 Ordinary Shares, representing approximately 3.68 per cent. of the existing issued ordinary share capital of the Company as at 6 September 2019, being the latest practicable date prior to the publication of the announcement.

Shareholders should be aware that if any of the Resolutions are not passed, this will constitute an "Event of Default" under the Agreement, which gives the Investor the right to demand repayment in cash of the aggregate amount of the Initial Tranche which has not been converted at such date. Additionally, if the Resolutions are not passed, neither the Open Offer nor the Subscription will proceed.

As at the Record Date, an amount of £2.15 million of remains outstanding and unconverted under the Initial Tranche. In light of the potentially fluctuating share price, the Investor may have the right to a further cash repayment if the ability to convert any outstanding amount of the Initial Tranche changes. Similarly, following this, default interest of 15 per cent. would be payable under the Agreement.

Additionally, if the Resolutions are not passed, the Funding Warrants will not be capable of issue by the Company and instead a payment of £90,000 shall be payable by the Company to the Investor.

As such, if the Resolutions are not passed, the Company would need to secure further alternative funding in the near future which may not be forthcoming and in this event, the Directors may be required to take action which could result in the value attributable to Shareholders being severely reduced or becoming nil. The Board considers that it may need to consider the commencement of an orderly winding down of the business at that time.

THE DIRECTORS THEREFORE BELIEVE THAT THE PASSING OF THE RESOLUTIONS TO BE PROPOSED AT THE GENERAL MEETING IS CRITICAL AND IS IN THE BEST INTERESTS OF THE COMPANY AND SHAREHOLDERS AS A WHOLE AND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOUR OF THE RESOLUTIONS.