Moolec Science, a leader in plant molecular farming technology, convened for its fourth quarter and full fiscal year 2024 earnings call, where CEO Gaston Paladini and CFO Jose Lopez Lecube shared the company's progress and future plans. The company reported a significant revenue increase to $5.8 million, up from $1 million in the previous year, and outlined ambitious goals for the coming year, including the commercialization of new products and expansion of its research and development efforts.
Key Takeaways
- Revenue increased fivefold to $5.8 million in 2024, primarily from the soy product ingredient business.
- Operating expenses rose to $9.3 million, due to non-cash items and consolidation costs.
- Moolec Science plans to commercialize its Glaso product and anticipates it will contribute approximately 15% to the projected $6 million revenue for the soy protein ingredient business in 2025.
- The company is expanding its R&D, focusing on new proteins and molecular products.
- An offtake agreement for Glaso with a major global CPG company is expected to yield 50 to 60 tons of GLA in its first year.
- Field trials are ongoing in Missouri, Ohio, and Iowa for the Piggy Sooy product, aiming for FDA approval.
Company Outlook
- Moolec is poised to commercialize its Glaso product with harvesting scheduled for October 2024.
- The company is enhancing operational efficiency, expanding seed inventory, and pursuing regulatory approvals.
- A new operational hub in the U.S. is being established to improve team collaboration and efficiency.
Bearish Highlights
- Operating expenses have increased significantly, reflecting the costs associated with business consolidation and non-cash items.
Bullish Highlights
- A major global CPG company has signed a three-year offtake agreement for Glaso, indicating strong market demand.
- The company is optimistic about its growth trajectory and potential to expand its market presence.
- CEO Gaston Paladini is confident in selling the entire production of Glaso.
Misses
- There were no specific misses reported during the earnings call.
Q&A Highlights
- Glaso is positioned against borage and primrose oils and has a higher GLA concentration, which is a significant competitive advantage.
- The company is working on improving investor relations and increasing awareness of its milestones and long-term vision.
- Moolec is actively engaging with commodity and scientific organizations to foster collaborations and advance its technology.
Company Operations and Collaborations
- The company is collaborating with Bunge (NYSE:BG) to develop safflower varieties aimed at improving productivity.
- R&D collaboration is focusing on safflower yields, aiming to optimize varieties for better performance, particularly in South America.
- Moolec is part of the International Society of Plant Molecule Farming and the Society of In Vitro Biology, enhancing partnerships and influencing policymakers.
Environmental and Regulatory Commitment
- Moolec emphasizes stewardship and traceability of its crops in the U.S., adhering to USDA APHIS guidelines.
- The company reaffirmed its commitment to redefining animal protein production through molecular farming for environmental sustainability.
Moolec Science's earnings call revealed a company on the rise, with a clear vision for growth and innovation in the plant molecular farming sector. With new products on the horizon and strategic collaborations in place, Moolec is set to make significant strides in the coming year.
InvestingPro Insights
Moolec Science's ambitious growth plans and recent revenue surge are reflected in some of the latest financial data and analyst projections. According to InvestingPro, analysts anticipate sales growth for the company in the current year, which aligns with Moolec's own projections for its Glaso product and soy protein ingredient business.
However, investors should be aware of some financial challenges. InvestingPro data shows that Moolec's gross profit margin for the last twelve months as of Q3 2024 was only 8.01%, indicating that the company suffers from weak gross profit margins. This metric underscores the importance of the company's efforts to enhance operational efficiency and expand its product portfolio with potentially higher-margin offerings like Glaso.
Additionally, an InvestingPro Tip highlights that Moolec is quickly burning through cash, which is consistent with the company's reported increase in operating expenses to $9.3 million. This cash burn rate is a critical factor for investors to monitor, especially as Moolec ramps up its R&D efforts and establishes a new operational hub in the U.S.
On a positive note, Moolec has seen a significant return over the last week, with InvestingPro data showing a 9.36% price total return. This recent uptick could reflect market optimism about the company's future prospects, including the anticipated commercialization of Glaso and the expansion of its R&D initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Moolec Science, providing a deeper understanding of the company's financial health and market position.
Full transcript - Moolec Science SA (MLEC) Q4 2024:
Operator: Good morning and welcome to Moolec Science’s fourth quarter and full fiscal year 2024 conference call. My name is Bill Zima of ICR Strategic Communications and Advisory. During this conference call, all participants will be muted until after management’s remarks, when there will be a question and answer session. Please also note that today’s session is being recorded. Today, Moolec announced its fourth quarter and full fiscal year 2024 business highlights. The document is now available on the company’s Investor Relations website at ir.moolecscience.com. This morning, you will hear from Gaston Paladini, Chief Executive Officer and co-Founder of Moolec Science, together with Jose Lopez Lecube, Chief Financial Officer, and Amit Dhingra Chief Science Officer. During the Q&A session, they will be joined by Martin Salinas, Chief Technology Officer. In today’s call, we will be referring to a presentation that will be later available on the company’s Investor Relations website. Moving to Slide 2, this conference call is mainly for informational purposes, and during this call the company will be making forward-looking statements regarding future events and results which are not historical facts and include, but are not limited to statements about the company’s beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks are included in the company’s annual report on Form 20-F filed with the SEC, also available on the company’s Investor Relations website. Now moving to Slide 3, I would like to turn the call over to Moolec CEO, Gaston. Please go ahead.
Gaston Paladini: Thank you Bill, and good morning to everyone. It’s a pleasure to once again provide our latest business update corresponding to our annual review for our company. Today’s agenda will address three main topics. As I just mentioned, we will first review the major milestones we have achieved during the fiscal year of 2024. Secondly, Moolec’s Chief Financial Officer will walk you through the financial overview; and last but not least, we would like to share with you our thoughts on what we expect for fiscal year 2025. Let’s move now to the next slide. We will recap the main milestones the Moolec team achieved during fiscal year 2024. Turn with me now to Slide 5. What a phenomenal year it has been for Moolec in terms of scientific developments, business operations and regulatory achievements. Our team has been driven to deliver milestone after milestone and continues to fire up on all fronts to push out deliverables on all pillars. We have the commercialization of our science-based products using molecular farming technology shortly on the horizon, built upon the many efforts over the last year, from the setting up of Moolec’s self-owned molecular biology lab in the U.S. to the establishment of animal protein expression levels in Piggy Sooy products, as well as receiving USDA approval for Piggy Sooy, while preparing Glaso products for commercialization through trial production and securing farmland for production, and increasing Piggy Sooy [indiscernible] in three U.S. locations. The Moolec team has shown exceptional execution. To provide more details of these achievements during fiscal year 2024, I would like to hand things over to Amit Dhingra, our Chief Science Officer. Amit, over to you.
Amit Dhingra: Thank you Gaston. I’m excited to share the significant accomplishments of the Moolec farming team over this fiscal year. In the first quarter of fiscal year 2024, we successfully set up our fully owned plant molecule and biology lab, the Moolabs, in College Station, Texas. Our lab became fully operational in Q1 FY2024, and I oversaw our plant molecular farming team that focused on the molecular characterization of the transgenic events for our target products. Conducting a significant portion of our plant biology R&D projects in-house versus third party labs helped us centralize and streamline the process. It facilitated faster implementation of decisions, ensuring the highest quality control standards, and improved the timeliness and quality of work while generating cost savings. Also during the first quarter, we achieved significant results in the continued development of Piggy Sooy product. During the first quarter, we harvested and analyzed third generation, or T3 transgenic events at Moolabs. Consistent with the prior results, the expression values of the animal protein, or myoglobin reached up to 20% in T3. Previously, we have observed expression levels of up to 25% of the total soluble protein in T2. Overall, what we have observed is that the expression of the animal protein has stabilized across three generations, which is very exciting. Onto the second half of this year, this business update marks a crucial moment for Moolec. In the third quarter, we announced a groundbreaking milestone, the first-ever approval from USDA, making Moolec the first company in our industry to achieve such a regulatory breakthrough. This achievement exemplifies our commitment to harnessing the power of plants through cutting edge science, addressing critical challenges like climate change and global food security. For those new to our journey, Moolec has developed a unique patentable soybean platform technology under the trademark, Piggy Sooy. Our dedicated scientific team has achieved remarkable results expressing animal meat proteins and soybeans, with porcine protein levels reaching up to 25% of total soluble protein in the seeds. With this approval, USDA APHIS RSR has determined that Piggy Sooy poses no greater plant pest risk than non-generic soybeans, allowing us to transport and distribute this product with individual APHIS permits. This significantly accelerates logistics and reduces costs while ensuring full compliance with USDA regulations, giving Moolec a distinct advantage in the market. Also in the third quarter, we carried out a trial for our downstream production of Glaso with our industrial partner in Iowa as we optimized, processed and produced a few tons of material to fine tune the process. In the fourth quarter, we began planting after successfully contracting 600 acres with key growers to produce Glaso seeds for crushing. Additionally, we contracted 60 more acres for seed production, aiming to yield 300 to 400 tons of safflower. This product has multiple customers, including a major client, as previously announced with Moolec signing an offtake agreement with a leading global CPG company. In addition, Piggy Sooy field trials have commenced in Ohio, Missouri, and Iowa in order to increase seeds for scale-up and sampling for customers and to collect environmental and regulatory data as we work on the US FDA approvals. Now I’d like to turn the presentation over to my colleague, Jose, for the financial overview part of the presentation. Thank you very much for your kind attention.
Jose Lopez Lecube: Thank you Amit, and good morning to everyone. I’m pleased to be providing this annual business update for Moolec for the fiscal year 2024. I would like to address our highlights with regards to revenues, cost of sales, expenses, and cash utilization. Please keep in mind that all figures mentioned today are in U.S. dollars, unaudited, and based [indiscernible] from IFRS unless otherwise stated. Let’s move on now to Slide 9. During fiscal year 2024, normalized revenues and other income excluding IAS29 increased $4.8 million year-over-year from approximately $1 million in 2023 to $5.8 million in 2024. This increase was due to the consolidation of the soy product ingredient business which occurred in April 2023. Normalized cost of sales increased as well on a year-over-year basis from close to $1 million in 2023 to $4.5 million in 2024. This was in line with our revenue growth, resulting in an annual gross margin of around [indiscernible]. On the expenses front, SG&A and R&D have increased $3.1 million, from $6.2 million in 2023 to $9.3 million in 2024. This increase in expenses is mainly related to non-cash items such as depreciation, amortization and equity incentives, as well as the consolidation of the soy ingredient business. In terms of cash used in operating activities, cash utilization has increased $1.8 million, from $7.5 million in 2023 to $9.3 million in 2024. In particular during 2024, an approximately $4 million was [indiscernible] the lower accounts payable mainly related to transaction costs during 2023. Finally, our cash position of approximately $5.4 million as of Q4 2024 has been complemented with the purchase of 15,000 tons of HB4 soybean, which has strategic value for Moolec in terms of ESG alignment, traceability, and raw material procurement stability. The purchase of HB4 soy has been executed through the issuance of a convertible note to BIOX and covers our projected raw material needs for our soy protein ingredient business until approximately December 2025. We are very pleased with how Moolec continues to deliver significant milestones and create value while maintaining an adequate corporate structure and a cost efficient strategy. I will now turn things back to Gaston as he gives a glimpse into Moolec’s fiscal year 2025. Gaston, over to you.
Gaston Paladini: Thanks Jose. Looking forward to fiscal year 2025, we believe this is going to be a pivotal year for Moolec. Turn with me to the next slide. In terms of commercialization traction in 2025, we expect to see commercialization of our new science-based ingredient begin to take off. With our already established traction in textured soy protein generation revenues, we are honing our operational expertise in launching our new products, first with Glaso, which we’ll harvest in October and is targeted to generate new revenues for Moolec in the upcoming fiscal year. Glaso will be a strategic commercialized focus for us [indiscernible] by the signed R&D collaboration agreement with Bunge with the purpose of working together on the development of safflower varieties to improve productivity for a specific application or market, as well as the commitment made from the offtake agreement with a major global CPG company. At the same time, we are actively engaging in conversations with prospective partners and clients, providing samples of the different proteins in our pipeline. We are looking at all fronts of business income streams, including the licensing of our proprietary technology for using new markets. In terms of operational focus for 2025, we will continue to fine tune operations to enhance our upstream and downstream yields, as well as ensure the highest quality for our products following our identity preservation program, and implementing the best stewardship practices for all our crops. We are going step by step in each process to make sure we provide only the best. At the same time, we will continue scaling up our seed inventory so we can prepare for the different uses of our seeds from processing to planting. As we invest our time in all these activities in preparing for growth, we are still very committed to being careful to evaluate all our spending and managing the costs, while looking into different methods to improve our cost efficiency and streamline our logistics. The last point in this section, but one that is extremely critical to our operations, is our deliberative focus on making meaningful progress on the regulatory pathway. We are actively performing and pursuing relevant process and approvals from the different regulatory agencies. With regards to R&D and product development, this continues to be a core component of Moolec’s business. We plan to add new projects to the innovation pipeline with new proteins and molecular product development as current [indiscernible] development and enter the commercialization stage. Product development will continue during fiscal year 2025 in conjunction with the close communication and collaboration with partners and customers to ensure the marketability of our products in the pipeline. Lastly, in fiscal year 2025 we are consolidating our team. In order to optimize our work efficiency, we are consolidating efforts strategically. The company will be establishing a new operational hub based in the U.S. so that we can strengthen our team’s collaboration and communication and enhance our overall efficiency. Secondly, with the coming new product commercialization, we need to expand our sales and marketing efforts. With this, we are methodically expanding the team to capture this market opportunity. In addition, the company will promote expanded visibility and presence in the industry by sending team members to present and network at food, pet food, and supplement industry shows and conferences. Let’s now move onto the next and final slide. As we look forward to the exciting developments in 2025, I am confident that our strategic initiatives will drive growth and value for all our stakeholders. Now I would like to open the floor to your questions and hear your thoughts, so I will now turn things over to Bill for the Q&A portion of our call. Thank you very, very much.
Q - Bill Zima: Thank you Gaston. At this time, Moolec’s management - Gaston, Jose and Amit, as well as Moolec’s Chief of Technology, Martin Salinas will be taking questions. You will submit questions through the Q&A chat box by submitting your name and firm in the chat and typing your question. Please be advised that we will ask you to un-mute your line to ask your question live. We ask those that would like to participate in the Q&A if your name and firm is not indicated in your profile, please submit your name and firm in the Q&A box before asking the question. Again, you may submit your questions through the Q&A chat box. Okay, before we take questions from the live queue, we have received a few questions via email. The first question is, this quarter you highlighted an offtake agreement for Glaso with a major global CPG company to enter the U.S. market in 2025. Can you provide more details on this collaboration? What efforts have both parties made, and what is the estimated scale and expected revenue generation in 2025?
Gaston Paladini: Well, thank you so much, Bill, and thank you for the question. Please, let’s leave the floor to Scott Fortune after this question, because I saw he raised his hand before. Thank you for the question, thank you for being here. Good morning. Great question, because we are very excited about this offtake agreement of our first molecular farming product, Glaso, in the United States. We are excited because of, I’d say, a couple of reasons. The first one, because it’s a major global CPG company, we can’t reveal the name, unfortunately, because it’s private, because it’s huge, but it’s a very well known brand worldwide with major operations in the States. That’s the main reason. Second good reason is that we are extremely happy about this is that Moolec is actually delivering milestones. We always tackle the U.S. We always had the U.S. market to be the first market to roll out our technology, our platform, molecular farming, and now this is real because it will be landing in the U.S. commercially. Third, it’s because it’s happening perfect timing. 2025 calendar year, we always had this timing in our internal plans. Moolec is delivering, and this is proof--this contract is proof of that. Going back to the question, I want to highlight before going to Martin and then to Jose, I want to highlight that this is not a one-year contract, this is a three-year contract with the possibility to expand it. It’s not only relevant for the landing and to the starting point, it’s also an ongoing relationship with these major customers. I will leave the floor now to Martin Salinas, our Chief Technology Officer. He’s leading this operation in the United States, and he can give more color about the volumes and the traction of the crops and the production of the product, and afterwards Jose can give some indications of the collect part - you know, the revenue, the new revenue stream that is opening now. Martin?
Martin Salinas: Okay, thank you Gaston. As Amit mentioned, we’re currently have more than 600 acres planted in Idaho in the American Falls area. Mostly will be used as grain for crushing purposes, but we also have our seed stock planned as well to get to production next year in the following season, so we’re close to the harvest time where we’ll actually know of our final yield, but we are expecting yields in a similar range to last year, around 1,400 tons per acre. Then, we’ll [indiscernible] a range between 50 to 60 tons of GLA to be produced for the first year, mostly dedicated to the offtake agreement that Gaston mentioned.
Gaston Paladini: Jose? Thank you, Martin.
Jose Lopez Lecube: Sure, thanks Gaston. Look - in terms of revenue, as you know, we have had a revenue stream, which is the soy protein ingredient business, which has produced revenues in the range of $6 million this 2024 fiscal year, and we believe for the fiscal year 2025, $6 million of revenues is a pretty good indication of how the business could evolve. It could grow gradually in terms of the soy protein ingredient business. However, we are very pleased with the introduction of Glaso as the second revenue stream for Moolec. We have [indiscernible] expectations for this product. In the medium term, we expect Glaso to participate as incremental revenue in fiscal year 2025 with a range of around 15% of the total revenue in fiscal year 2025. Having said that, as information, we have a three-year contract with a major CPG company. We expect that contract to provide a base demand for Glaso, and as time goes by and as we move onto fiscal year 2026 and 2027, we expect Glaso to become a more important part of the overall total revenue and have high participation in the total revenue, and we have good hopes in terms of how much this business can grow and to increase Moolec’s revenues in the short term, in the medium term, and in the long term as well.
Gaston Paladini: Thank you Jose. Okay, let’s move on. Thank you all.
Bill Zima: All right, thank you. The second question is you mentioned signing an R&D collaboration agreement with Bunge to develop safflower varieties aimed at improving productivity for specific applications and markets. Can you share more details about this partnership and the business opportunities from this? Are there any notable developments you’d like to highlight?
Gaston Paladini: Thank you Bill. I can’t wait to talk about Bunge agreement, but I would prefer, if you don’t mind, to go to Scott Fortune, because he raised his hand before. Scott, you want to un-mute yourself and ask your question?
Scott Fortune: Yes, here we go - thank you and good morning. I just want to congratulate you on your milestones and regulatory approvals achieved in fiscal year ’24. Just want to dig a little bit more into the commercialization and expansion here. Do we know where the end market--is this for supplements or mainly targeted for pet foods with this CPG company? You have initial tons about 50 tons from that standpoint, and just to kind of follow on that, your harvest is expected to produce about 300 to 400 tons of safflower seeds, and what amount of that will equal volume in tons that you’re expecting for 2026? Just kind of want to get a sense for the ramp-up into ’26 with the volume expectations and how much of that will go to a minimum of your new CPG partner. That’d be great for a little more detail on that.
Gaston Paladini: Sure, well thank you so much, Scott, and welcome to the call. Well, let me frame it this way. Glaso applications are dietary supplements, nutritional beverages, infant formulas, animal health, pet food that included in that animal health in some way, and some others. Please don’t hesitate to step in, Martin, if you [indiscernible] if I’m missing one or two applications, but those are the main ones. We are in conversations with several different potential customers for all of these different applications, specifically in dietary supplementation because one of the competitive advantages that Glaso has with established and normal products that provide GLA oil in the market is the concentration level. Glaso has up to three times more concentration levels compared with the natural and current ones in the market. The dietary supplementation market is very relevant. In terms of this specific offtake agreement with the CPG company, that application is for pet food. It’s a volume and high value player that’s one of the top brands in the world. We are in good shape of conversations with other potential customers for other applications too. In terms of quantities, volume, scale-up and production, that harvest will change to produce around--between 50 to 70 tons. We are expecting around 60 tons, around 50 will be for this contract, commercial contract, and the rest will be for other customers in other applications. We still need to wait for, let’s say, a couple of weeks to harvest, finally see the yields, and start planning the production by the end of the month - I’m talking actually as we speak October, this is happening as we speak, so we will probably have the specific yields from the land and also from the factory by November. We’re excited because this is a molecular farming product, this is the first one. Thank you for the question, and I don’t know, Martin, Jose or Amit, if you want to add something on top of what I have just said, but that’s a quick summary of this offtake agreement, Scott.
Scott Fortune: I appreciate it. A follow-on - your discussions with other--you know, you mentioned other companies. What are--you know, how far along are those discussions, kind of expectations for potentially adding more in this year, and then what--they’re sampling, what needs to come across for them to move forward with you? Just put an idea of where that pipeline is and potentially adding on the Glaso for you.
Gaston Paladini: I am quite confident to say that we are going to sell the whole production. I’m pretty sure. Actually, I think we could sell more if we had more material, but unfortunately we need to wait the biology times here, so this is the first commercial campaign. We are hitting the market - great contract, great players, and great starting point, but we need to multiply seeds, as Martin described before. We are reserving part of that production for multiplication of seeds, to scale up this campaign and proof for the next year, so we are actually planning our following commercial campaign. We will have more flexibility there, and I think that we are--we need to hold our horses and not sell absolutely all the tons of this campaign, to reserve some part of that fresh material for sampling, to expand the commercialization network and start--stay robust and consolidate the relationship with new customers by sending fresh samples right away. That’s the plan overall, and I’m really looking forward to grow the business next year. But at least as of now, it’s pretty all fully committed.
Scott Fortune: Got it, and last one from me and then you guys can touch base on that R&D collaboration with Bunge, which is great. Just kind of remind us, step us through--you know, obviously you’ve got the UDSA or the FDA on the Piggy Sooy side, but kind of the results here, we’ll find out more in October those results from the field trials and since. You’ve mentioned that 20% range, but just step us through--you know, are we still on track for commercialization on that in ’27, ’28 here, and just the key milestones that you have to hit leading up to ’27, kind of looking out for the next year on the Piggy Sooy side.
Gaston Paladini: Sure, great question. Well, we announced, I think it was a month ago, that we will be harvesting both crops October this year now, Glaso for production, for commercial purposes, and Piggy Sooy for a couple of purposes. The first one is to gather information for the FDA - what you said, Scott, is true. We need to gather information not only for one place, for three different locations - that’s why we farm in Missouri, Ohio, and Iowa, three different locations in three different latitudes and states. We will gather the information for the FDA. We are in great conversations with regulators. Things are moving nicely, but we need to fulfill the path here, and we know how to navigate the regulatory fronts with our regulatory team. We are not envisioning any delay, so everything is on track and the plans are beautiful - beautiful. I really hope to invite all the stakeholders to these three different locations for the harvest, because the plants are very, very nice, so let’s see how that goes. We are excited about this historical moment of planting, of harvesting, let’s say, animals from the U.S. soil fully approved from the USDA. In terms of commercial efforts for Piggy Sooy, the second reason why we move forward with field trials over the regulatory information for the FDA is to gather also fresh material for summer. I want to remember all here that Moolec is a science-based ingredient company, and the ingredient sector, the ingredient business is not easy, but this is very--it’s very standard and what you need to do is to get samples [indiscernible] and to build relationships with producers and ingredient business and to prototype with samples. So we will gather samples from the farm directly, fresh material, we will recover proteins, and we will send those samples right away. We are in good conversations with several different potential players and customers for Piggy Sooy. They are all very interested to start proving or, let’s say, testing in their own recipes, in their own labs, and in their kind of facilities, that this ingredient could help them in so many ways, so that’s the second reason. The third reason of this field trial for Piggy Sooy in the United States is to analyze--to finish the D of the R&D stage, the development, product development. I will leave the floor to Amit to--just a little bit to explain the different events that are planted in the field because we need to start analyzing transgenic events, plant performance, and start processing that information to start selecting the champion event - that would be the champion seed that will be multiplied in the future, in the upcoming years so as to hit the market in 2027 and 2028. I want to reinforce that timeline. Amit, you want to add more color about the science in the field?
Amit Dhingra: Yes, thank you Gaston, and thanks for the question as well. As you all know, Piggy Sooy has demonstrated that we can express animal proteins to a very high level and store it in the seed section of the plant, which is really what is the product that we’re going to be utilizing. As we are doing these field trials in different locations, we want to reach to a point where we want to evaluate in the fourth generation what the levels of this protein are going to be, and this platform technology which is primarily the regulatory elements that allow us to express this protein at a very high level, is really being tested out. As I initially spoke during the update, we are seeing 20% total soluble protein being consistent through the third generation, which is a very important milestone in any transgenic technology event, and as we are doing these field trials, we will be harvesting a lot of plant material which we’ll also do further evaluations on. This high level is really unprecedented in seed production, and we will take it from there. This is the platform we also want to utilize for other ingredients or other proteins, or other molecules that are desirable in the market as well, so very exciting what we are doing with this. We’re expanding our reach to commodity groups as well, soybean and other commodity groups to keep them involved and included as we are developing this product, so as Gaston invited stakeholders to our facilities and our trials just to see what we are really developing over here. Really exciting times for us and the science sector, and we continue to--you know, as a scientist, we continue to develop our concepts further and expand to other molecules as needed - it could be bioplastics, it could be any other pharmaceutical ingredient, etc. Thank you very much, Gaston. Back to you.
Gaston Paladini: Thank you Amit. Okay, let’s move on. Thank you so much, Scott.
Scott Fortune: Thank you.
Bill Zima: All right, our next question, we have an online question from Anthony Vendetti of Maxim (NASDAQ:MXIM) Group. I’m going to read them. Have you signed any additional commercial uptake agreements for Glaso? If not, do you expect to sign any by the end of 2024? What percent of yield is accounted for?
Gaston Paladini: Well, thank you Anthony, and we will not forget about answering the Bunge question that was online before. But I want to say hi to Anthony - Anthony, thank you for joining us today, and thank you for the question. We do not have any other offtake agreements signed yet. I think for the short term, it will not be necessary, it would be just invoicing and commercializing directly via spot sales for this campaign. We are envisioning to have a formal agreement for the following campaign, so that--who knows if it would be before the year end or next year. We have time for that. We are in good conversations with some other customers. I think that it’s also a matter of timing and awareness. We are hitting the market now, so it’s one new product, it’s new in the market, we are planning to attend some food and animal health shows and some dietary supplement shows next year to make some marketing for the product. I’m really optimistic of the traction of this product for next year, and I’m really looking forward to continue signing offtake agreements for the upcoming campaigns. Going back to the question, I want to answer it fully - what percentage of yield is accounted for? Do you want to tackle this question, Martin?
Martin Salinas: Yes, thank you for the question, Jeremy. I’m trying to understand what exactly is the yield that you are [indiscernible] in terms of the tons per acres yield that we can recover out of each acre, but nevertheless--
Gaston Paladini: Talk about--talk about both, yes.
Martin Salinas: Yes, nevertheless so the yield that we are expecting, so yield for safflower in the area is around, I would say, 1,200, 1,300 tons per acre. We achieved last year in the range of 1,600, just was a seeding [indiscernible] with them last year compared to this season, where as Gaston said, was our very first commercial season. We expect kind of the same yield in that. On how much oil we can recover out of that, it’s highly dependent on the production that--the crushing facility that we are using, so in that sense, we have been working a lot the last few months on optimizing that processing. I think Gaston mentioned some of that during the presentation. This particular trait of GLA has a reduced amount of total oil compared to wild types of flower, so we expect extraction in the range of 15 to 20%--15% to 20% from the--it’s the total oil, right? Let’s say out of that, we can expect maybe 80% of yield from the total oil recovery. That’s kind of the yield that we are expecting, very soon to be fully determined.
Gaston Paladini: Yes, agree. This is happening as we speak, as I said before. Thank you so much, Martin. Okay, let’s move on. Thanks Anthony.
Bill Zima: Okay, we can move onto that--my previous question. You mentioned signing an R&D collaboration with Bunge to develop safflower varieties aimed at improving productivity for specific applications and markets. Can you share more details about this partnership and the business opportunities from this? Are there any notable developments you’d like to highlight?
Gaston Paladini: Yes, well, I remember the Bunge question. Thank you for that. We’re very excited about being close to Bunge now with this R&D and collaboration agreement with them. As you all surely know, Bunge is one of the ABCD companies, you know, that there’s four dominant agriculture trading worldwide, together with ADM (NYSE:ADM), Cargill and Dreyfus [ph]. It’s an honor for us, as a young company, to be close to these major players. Specifically about the R&D collaboration, this is for upstream efforts in our safflower platform. That’s part of our Glaso improvements, and some other new developments in the safflower varieties and safflower platform as well. I will leave the floor to Amit first to fully explain the importance of the genetics in the upstream from--to improve and [indiscernible] and focus on breeding varieties in the field. This is high level, you know? - this is very important to understand yields in the fields and to focus on science and genetics, and then Martin can give more color in terms of the specific traits that we are working. I want to highlight that Bunge is focusing on safflower for biofuel applications. Moolec is focusing on safflower as a bioreactor platform, as many small factories to produce Glaso and new products in the pipeline, but both share the upstream part of the value chain. But again, I will put a pause now and pass to Amit to explain the breeding side, and Martin can explain the trait side.
Amit Dhingra: Thank you Gaston. I would say that what we produce, what transgenic lines we produce, we select our champion events which have the highest level of expression and agronomic performance. But as new breeding lines are being generated which either have other traits, for example they can perform better agronomically in different geographies or under different climatic conditions, so we can introgress or make crosses between these plants, go back to traditional breeding and take these traits that we’ve developed in our lines and move them into the desirable genetic backgrounds so that we can produce this product at a larger scale more efficiently with less input. One of the biggest things is that the genetic potential through breeding continues to be enhanced, and we have the opportunity through these partnerships where we can kind of capitalize on the new genetics that are coming through the pipeline as well by combining these traits through breeding. I also wanted to say that we have in our internal Moolabs where we can categorize all these very rapidly with the equipment and the robotics that are available to us. We are able to really fast track identification of progeny or products that come out of those crosses, that can then be deployed. In the past, we mentioned about global scale-up potential of our technology, and I think this is where combining what we develop as initial traits with the breeding pipelines that exist in different crops, especially in this case, safflower, we can really produce this anywhere in the world. Thank you. Over to Martin.
Martin Salinas: Yes, so basically the yield that I mentioned for safflower GLA, [indiscernible] around 14 to 15 tons is quite a great yield in the United States, and it’s a variety that we have been using since a while. But when you compare that yield with the commercial of many other germplasms in the southern hemisphere, particularly in countries like Argentina, yields are not as good, so our main goal is to evaluate this and develop new lines that are better adapted, that are optimized in terms of the yield, the productivity for different territories, other territories than the United States, for us to increase our potential opportunities to expand the technology into other territories. That’s on us. As Amit said, once we identify this optimized line for other territories, we can start the integration process where we can introduce our traits into new germplasm and new varieties. Thank you.
Gaston Paladini: Thank you, Martin - very clear, and thank you for the question. I want to add on top of that before going to the next question, I think would be [indiscernible] questions, that it’s a huge opportunity for Moolec being close to Bunge because of not--not only because of safflower seeds, it’s because of all our pipeline, soybean as well. We are having great conversations about soybean in the future, so let’s see how it goes in the future. We are focusing of course on delivering our commitment with Bunge in terms of safflower upstream, but as I said before, this is maybe one step for the new potential collaborations in the future with this major company. Let’s move on, Bill. Thanks for the question again.
Bill Zima: Okay, great. Our next question comes from Arun Suresh. In terms of safflower oil products, how much revenue growth is expected in 2025, and can this be the main part of business in the future, given the push in AI and data centers for biofuels?
Gaston Paladini: Well, thank you Arun for joining us today, and thank you for the question. Before going to Jose and talking about--he will give some indication about the growth in 2025 in terms of the business, but in terms of applications in AI and data centers, I don’t know. What I can say is--and this is amazing, it’s a good idea, great, but I want to highlight and point out that Moolec is focusing on improving yields for Glaso and the future products by using safflower as a bioreactor, as a great small factor and biological factory. Bunge is focusing on biofuels. I personally think that we haven’t reached what plants can do. Moolec is proving with Glaso and Piggy Sooy that this technology is not only doable, not only feasible, it’s cost effective, it’s sustainable, and it’s real. It’s material, guys, it’s concrete. By using AI in the future, data centers, or any other applications, I think it’s great, and we could--we have the ability to produce any molecule, any protein in any crop so far by using the same tactics. But I want to go back to the question, Arun - thank you for that, and I leave the floor to Jose to give more details in terms of revenue.
Jose Lopez Lecube: Sure, thank you Gaston, and Arun, thank you very much for the question. As mentioned before, what we expect for fiscal year 2025 is that Glaso participates in the overall total revenue in around 15%. Again, for fiscal year 2026, there’s going to be a lot of focus in the operation of Glaso and the scale-up of the operation of Glaso, with a bigger campaign starting in May-June calendar year 2025. So what to expect in terms of Glaso participating in the revenue onwards for fiscal year 2026, probably in fiscal year 2025 it’s going to be around 50%, for fiscal year ’26, I would expect it could be participating [indiscernible] fiscal year 2025, so yes, we have good hopes, good expectations for the product and how it helps grow the revenue of Moolec.
Gaston Paladini: Thank you Jose. Before going to the next question, I want to leave the floor to Amit to--probably he will want to expand my technological and scientific answer. Over to you, Amit.
Amit Dhingra: Yes, sorry - I’m having some connection issues.
Gaston Paladini: No worries.
Amit Dhingra: Well, in this particular case, I think our technologies are expanding quite a bit. Gaston, as you already mentioned, and Jose has also mentioned quite a bit about it. I don’t have much to add, but I think as we expand our technology platform here, we can make further milestones in this case to reach the market, as well as expand our product line in the future. Back to you, Gaston. Thank you.
Gaston Paladini: Yes, I fully agree. Thank you Arun for the question. Please Bill, let’s move to the next question.
Bill Zima: Okay, we have a follow-up question from Anthony Vendetti with Maxim Group. Anthony states, can you discuss what steps you have taken or intend to take to continue to drive awareness and adoption of your PMF products?
Gaston Paladini: Well, thank you for the question, Anthony, again. All the efforts that we have done, we are willing to do in terms of our awareness of plant molecular farming as a technology are for the industry, are for the people that really understand technology, science, and applications. Moolec has a B2B business model. We don’t need to invest money and time to de-focus communications in mainstream communications. We don’t need to talk to consumers. The Nestle’s of the world know how to communicate to consumers. Of course, we need to be transparent. We need to talk about the science. If you get into our website, we are trying to be very transparent of how we modify plants, how all our technology works and so on, but all our efforts are to approach the people that really understand the tech, and that’s mostly the R&D departments of our potential customers - food technologies, scientists, food scientists, and people that now I can say that are fully understanding the potential of this tech. I always say that when we started back in 2020, talking about modifying seeds for human consumption purposes, it was quite shocking. Four years, I definitely can assure that this is very well understood. So we are going to continue educating the R&D departments. Most of them approach us directly because we are very active in leading, in PR and some specific shows that we are attending, so it’s working so far. We really want to reinforce that communication since we are hitting the market now with Glaso and getting fresh material from Piggy Sooy very soon. We want to continue investing and maybe expanding that message now with fresh materials and new materials, clear communication materials as well. This is a very relevant topic that you have just raised, Anthony, in terms of helping us in the commercialization stage that Moolec is starting as we speak.
Bill Zima: Okay, moving forward, we’ve received an online question from Patricio. Some of this is similar to the prior question, but if you care to elaborate, feel free to do so, Moolec team. The question is the achievements made so far in terms of advancements, research, commercialization and technology are truly impressive; however, what are the specific plans for marketing campaigns and public relations? While this technology is innovative, I believe it is still not widely understood by the general public. Do you think greater exposure and support could attract more investors and increase the value of the shares? What is the plan on this matter?
Gaston Paladini: It’s in your question, but it’s very important for us to tackle all of these things, specifically the investor relations efforts that we are having together with ICR, with you Bill, Steph and the ICR team. For us, it’s very important as a small company to have these good practices of investor relationships by getting an important IR firm such as you guys. The plans are to continue working with you guys and to attend more conferences, to deliver good stuff in terms of PR and to keep the investors updated. Sometimes it’s not good enough because the market is huge, there are so many public companies and so many promising companies using biotechnology, that it’s hard to reach all; but I personally believe that if we continue delivering and getting good milestones and communicating these milestones right away to the public and to our investors, step by step, day by day we are going to start gaining more traction, more awareness, and don’t forget that we are here for the long run. We are talking--we are thinking about decades here, and this is just starting. But I think it’s a very good question. Patricio, thank you for that. Let me reinforce the great work that we are doing together with ICR to expand and spread the word together with them.
Bill Zima: Okay, another follow-up question--or a question we have is from Salvatore Verdoliva. He says, I’m new to the story. From my understanding, Glaso is a fat-based product, so how can it be competitive from a cost point of view compared to palm oil, for example, or is it targeting another more premium market?
Gaston Paladini: Thank you Salvatore, and thank you for the question. I’m very glad that you are getting into the story now so we could give more color not only about Glaso applications, some products and the competitive edge, also you could have a better color and sense of what Moolec is doing here with molecular farming. Before going to Martin to--who will explain the product, I will try to do it quick because the market has just opened and probably most of you want to start seeing the--to take a look at the shares and the market, is that Glaso is--the name Glaso means GLA safflower oil - that means gamma-linolenic acid safflower oil. Gamma-linolenic acid is a specific omega-6, it’s a nutritional oil, so it’s not competing with palm oil, it’s competing with some other GLA oils in the market. Most of these products are from sources such as borage oil and primrose. Jose, do you want--sorry, Martin, do you want to add more on that?
Martin Salinas: No, I think you explained it quite well. The only thing I would add is our competitive advantage compared to borage and maybe even primrose, which are plant-based oils rich in GLA, is that our expresses something between 50 to 60% of GLA, so out of the complete fatty acid profile, 60%--between 50 and 60% is GLA. The next most rich GLA plant-based oil is borage, and it has only 20%, and then even in primrose, it’s in the 10% range, so our fatty acid profile, our oil produces three times more GLA per kilo of oil than other oils in the market rich in GLA. That’s our main competitive advantage.
Gaston Paladini: Thank you Martin. I want to add before we close, or we go to the next question, that concentration levels are critical for dietary supplements, for example. It’s not the same to take three or four pills per day rather than one pill, so our competitive advantage is definitely a strong sales message and that’s what we are going to do in terms of communications. Now that we have products in the market, it’s to reinforce that competitive edge. Bill, do you have any more questions? I think there is not any other questions in the chat box.
Bill Zima: That’s correct, Gaston. It appears there no further questions at this time, so I’d like to hand the call back over to you for some closing remarks.
Gaston Paladini: Yes, well before that, I want to ask my fellow partners here if you want to add something before we go. Amit, I think that maybe you wanted to add some comments in terms of the technology. Jose, Martin, feel free before we go.
Amit Dhingra: Yes, thank you Gaston. I wanted to address a couple of comments earlier and add to t those about plant molecular farming. We are really connecting a lot with commodity group organizations where--because as Gaston mentioned, we had a B2B business. We are first informing them, so as we interact a lot with the commodity group organizations, that really helps us be in front of these groups, which also fosters collaborations, business collaborations and partnerships that will come out of those. Secondly, we are also becoming members--we’re already members of several other organizations such as the International Society of Plant Molecule Farming, Society of In Vitro Biology, and then other organizations such as the Council for Agricultural Science and Technology, because we really want to work with these groups. These are scientific bodies that can then utilize our information and they utilize the plant molecule farming to reach our policy makers. Sometimes that also crosses over to the investor groups, so really the effort on the science side is that what we have developed in our technology platform is cross-cutting the business piece, the technology leadership piece, as well as it’s really leading the way forward for producing some of the major ingredients that we need today through plant molecule farming. Through this ecosystem, we are developing that. As Gaston said, R&D folks are coming to us - in fact, I get invited out on behalf of Moolec to speak at various plenary sessions to talk about what we’ve achieved through soy, Piggy Sooy as well as Glaso, so that’s a very exciting time for us in the science field. That also fosters new ideas that are our new scientists who are starting their careers or have new technologies that really are interested in this, and that’s how together we will really advance the science on this front, so that’s very exciting. Thank you Gaston. Over back to you.
Gaston Paladini: Thank you Amit, thank you. Yes, to add on top of that, we are very committed to stewardship, we are very committed to follow identities with our program, for our crops in the United States. We are dealing with high value products here, fully operating in the United States with the RSR from the USDA APHIS - that’s amazing. Nevertheless, we are very focused on following and having traceability of our beans, our seeds, so that’s very important for the operational side, on top of what you said, Amit, that we are part of these soybean associations and scientific associations as well. Jose, Martin, before we go--?
Jose Lopez Lecube: No, for my part, thank you everyone for participating in the call, the interest in Moolec. Please do reach for anything, any questions, any doubts that you have. I’ll be pleased to help and get in touch with you.
Gaston Paladini: Thanks. Martin?
Martin Salinas: I’m okay. I’m okay on my end, thank you. Thank you all. It was quite an interesting conversation during this Q&A. Thank you.
Gaston Paladini: Good, okay. Great. I personally would like to thank Catalina Jones, our Chief of Staff and Sustainability of Moolec, for leading internally again this business update. Thanks ICR, Steph, Bill, thank you, and to the Moolec team, and also to my fellow officers here presenting with me. To all of you, thanks for joining us today on this annual business update. Thank you for that, for taking the time and your interest in the company and our story. Finally, I want to reinforce the commitment of our company, of Moolec, and our main shareholders as well to keep the company public in this challenging market, as you surely know. We redouble our commitment to our purpose of redefining the way we produce animal proteins through molecular farming for the good of the planet, for the good of all. So thank you again, and have a great day.
Bill Zima: Thank you all, you may now disconnect.
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