Moolec Science Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
October 2, 2024

There are 8 speakers on the call.

Operator

Good morning and welcome to MULAC Sciences' 4th quarter and full fiscal year 2024 conference call. My name is Bill Zimmel 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, Mulek announced its Q4 and full fiscal year 2024 business highlights.

Operator

The document is now available on the company's Investor Relations website at ir.mulekscience.com. This morning, you will hear from Gaston Paladini, Chief Executive Officer and Co Founder of Molex Science together with Jose Lopez Lecube, Chief Financial Officer and Annette Dhingra, Chief Science Officer. During the Q and 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.

Operator

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 Mulek's CEO, Gaston. Please go ahead.

Speaker 1

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 the 3 main topics. As I just mentioned, we will first review the major milestones we have achieved during the fiscal year of 2024. Secondly, Molech's Chief Financial Officer will walk you through the financial overview.

Speaker 1

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 that Mulek team achieved during fiscal year 2024. Turn with me now to Slide 5. What a phenomenal year had been for Mulek in terms of scientific developments and business operations and regulatory achievements.

Speaker 1

Our team has been willing 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 Mulex cell phone molecular biology gap in the U. S. To the stabilization of animal protein expression levels in piggy soy product as well as receiving USDA approval for piggy soy while preparing glass of product for commercialization through trial production and securing farmland for production and increasing piggy soy seed in 3 U.

Speaker 1

S. Location. The Munich team has shown exceptional execution. To provide more details on this achievement during fiscal year 2024, I would like to hand things over to Amit Dhingra, our Chief Silent Officer. Amit, over to you.

Speaker 2

Thank you, Ghastal. I'm excited to share the significant accomplishments of the molecular farming team over this fiscal year. In the Q1 of fiscal year 2024, we successfully set up our fully owned plant molecular biology lab, the Moo Labs in College Station, Texas. Our lab became fully operational in Q1 FY 2024 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 and D projects in house versus third party labs helped us centralize and streamline the process.

Speaker 2

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 Q1, we achieved significant results in the continued development of piggy soy product. During the Q1, we harvested and analyzed 3rd generation or T3 transgenic events at Moo Labs. Consistent with the prior results, the expression values of the animal protein or myoglobin reached up to 20% in T3. Previously, we had observed expression levels of up to 25% of the total soluble protein in T2.

Speaker 2

Overall, what we have observed is that the expression of the animal protein has stabilized across 3 generation, which is very exciting. On to the second half of the year. This business update marks a crucial moment for Molek. In the Q3, we announced a groundbreaking milestone. The first ever approval from USDA AFS making Molek the first company in our industry to achieve such a regulatory breakthrough.

Speaker 2

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, Mulek has developed a unique patentable soybean platform technology under the trademark Piggy Soy. 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 soy poses no greater plant pest risk than non engineered 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 MULAC a distinct advantage in the market.

Speaker 2

Also in the Q3, we carried out a trial for our downstream production of Basso with our industrial partner in Iowa as we optimized, processed and produced a few tons of material to fine tune the process. In the Q4, we began planting after successfully contracting 600 acres with key growers to produce Claso 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 Molex signing an offtake agreement with a leading global CPG company. In addition, piggy soy 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 U.

Speaker 2

S. 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.

Speaker 3

Thank you, Amit, and good morning to everyone. I'm pleased to be providing this annual business update of Munich 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.

Speaker 3

Dollars unaudited and based on the right from IFRS unless otherwise stated. Let's move on now to Slide 9. During fiscal year 2024, normalized revenues and other income excluding IAS 29 increased $4,800,000 year over year from approximately $1,000,000 in 2023 to $5,800,000,000 in 2024. This increase was due to the consolidation of the soy protein ingredient business, which occurred in April 2023. Normalized cost of sales increased as well on a year over year basis from close to $1,000,000 in 2023 to $4,500,000 in 2024.

Speaker 3

This was in line with our revenue growth, resulting in an annual gross margin of around On the expenses front, SG and A and R and D have increased $3,100,000 from $6,200,000 in 2023 to $9,300,000 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 $1,800,000 from $7,500,000 in 2023 to $9,300,000 in 2024. In particular, during 2024, an approximately $4,000,000 was destined to lower accounts payable mainly related to transaction costs during 2023. Finally, our cash position of approximately $5,400,000 as of Q4 2024 has been complemented with the purchase of 15,000 tons of HP4 Soybean, which has strategic value for MULAC in terms of ESG alignment, feasibility and raw material procurement stability.

Speaker 3

The purchase of 84 soy has been executed through the issuance of a convertible note to Vios and covers our projected raw material needs for our soy protein ingredient business until approximately December 2025. We are very pleased with how Bouygues continues to deliver significant milestones and creates value while maintaining an adequate corporate structure and a cost efficient strategy. I will now turn things back to Gathon as he gives a glimpse into MULAC's fiscal year 2025. Gathon, over to you.

Speaker 1

Thanks, Jose. Looking forward to fiscal year 2025, we believe this is going to be a pivotal year for MULARC. 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 Glazo, which will harvest in October and is targeted to generate new revenues for MULAC in the upcoming fiscal year.

Speaker 1

Glazo will be a strategic commercialized focus for us, traction by the signed R and D collaboration agreement in Bunge with the purpose of working together on the development of safflower varieties to improve productivity for specific applications and market as well as the commitment made from the offtake agreement with the major global CPG company. At the same time, we are actively engaging in conversations with prospective partners and clients, providing samples of the different approach in our pipeline. We are looking at all fronts of business income streams, including the licensing of our proprietary technology for use in 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.

Speaker 1

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 spendings and managing the cost while looking into different methods to improve our cost efficiency and streamline our logistics. And the last point in this section, but one that is extremely critical to our operation, is our deliberative focus on making meaningful progress on the regulatory pathway. We are actively performing and pursuing relevant process and approval from the different regulatory agencies. With regards to R and D and product development, this continues to be a core component of MULED Businesses.

Speaker 1

We plan to add new projects to the innovation pipeline with new proteins and molecular product development as current product exists 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. And 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 operation hub based in the U.

Speaker 1

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 these market opportunities. In addition, the Company will promote expanded visibility and presence in the industry by sending team members to present a network at food, pet food and supplement industry shows and conferences.

Speaker 1

Let's now move on 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 and A portion of our call. Thank you very, very much.

Operator

Thank you, Gaston. At this time, Mulex management, Gaston, Jose and Amit as well as Mulex Chief of Technology, Martin Salinas will be taking questions. You will submit questions through the Q and 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 unmute your line to ask your question live. We ask those that would like to participate in the Q and A, if your name and firm is not indicated in your profile, please submit your name and firm in the Q and A box before asking a question.

Operator

Again, you may submit your questions through the Q and 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.

Operator

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?

Speaker 1

Well, thank you so much, Will. Thank you for the question. And please, let's leave the floor to Scott Fortune after this question because I saw he raised his hand before. Well, thank you for the question. Thank you for being here.

Speaker 1

Good morning. Great question because we are pretty excited about this offtake agreement of our 1st molecular farming product Glazo in the United States. We are excited because of say a couple of reasons. The first one, because it's a major global CPG company. We can't reveal the name of Fortunatley but because it's private, because it's huge, but it's very well known brand in worldwide with a major operation in the States.

Speaker 1

So that's the main reason. 2nd good reason is that we are extremely happy about this is that Munege is actually delivering milestones. We always tackle the U. S. We always have the U.

Speaker 1

S. Market to be the 1st market to land our technology, our platform, more like refarming. And now this is kind of too real because this will be landed in the U. S. Commercially.

Speaker 1

And third, that is because it's happening in perfect timing, 2025 calendar year. We always had this timing in our internal plans. The Muleg is delivering and this is approved. This contract is approved 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 1 year contract.

Speaker 1

This is a 3 year time contract and with the possibility to expand it. So, this is not only relevant for the landing and to the starting point is also an ongoing relationship with these major customers. So I will leave the floor now to Martin Salinas, our Chief Technology Officer. He's leading this operation in the United States. He could give more color about the volumes and the traction of the crops and the production of the product.

Speaker 1

And afterwards, Jose could give some indications of the collect part of revenue, the new revenue revenue stream that is opening now. Martin?

Speaker 4

Okay. Yes. Thank you, Gaston. As Amit mentioned, we currently have a bit more than 600 acres planted in Idaho, in the American Falls area, mostly will be used as grain for crushing purpose, but we also have our seed stock plant as well to keep the production next year in the following season. So we're close to the harvest time where we will actually know our final yield, but we are expecting yields in the similar ranges that last year around 1400 tons per acre.

Speaker 4

And that will assure at least a range between 50 tons to 60 tons of GLA to be produced for the 1st year, mostly dedicated to the offtake agreement that Gato mentioned.

Speaker 1

That's it. Thank you, Martin.

Speaker 5

Sure. Thanks, Gaston. So look, in terms of revenues, as you know, we have had a revenue stream, which is the soy protein ingredient business, which has produced revenues in the range of $6,000,000 this 2024 fiscal year. And we believe for the fiscal year 2025, $6,000,000 of revenue is a pretty good indication of how the business could evolve. It could grow gradually in terms of the soy protein and helium business.

Speaker 5

However, we are very pleased with the introduction of Glazo, as the 2nd revenue stream for Mulek. We have good 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 Arthur mentioned, we have a 3 year contract with a major CPG company. We expect that contract to provide a base demand for Glaso.

Speaker 5

And as times go by and as we move on to fiscal year 2026 and 2027, we expect Glaso to become a more important part of the overall total revenue and have a higher participation in the total revenue. Again, we have good hopes in terms of how much this business can grow and to increase MULEX revenues in the short term, in the medium term and in the long term as well.

Speaker 1

Thank you, Jose. Okay, let's move on. Thank you all.

Operator

All right. Thank you. The second question is, you mentioned signing an R and 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?

Speaker 1

Thank you, Will. I can't wait to talk about Bunge agreement, but I will prefer, if you don't mind, to go to Scott Fortune because he raised his hand before. Scott, you want to unmute yourself and make your question? Yes, there we go.

Speaker 6

Thank you. Good morning. I just want to congratulate you on your milestones and regulatory approvals achieved in fiscal year 2024. Just want to dig a little bit more into the commercialization and kind of expansion here. Do we know kind of where the end market is this for supplements or mainly targeted for pet foods with the CGP company.

Speaker 6

And you have initial tons about 50 tons from that standpoint. And just 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 sense for the ramp up into 26 with the volume expectation and how much of that will go to a minimum of your new partner?

Speaker 1

That'd be

Speaker 6

great for a little more detail on that.

Speaker 1

Sure. Well, thank you so much Scott. Welcome to the to the call. Well, let let me let me let me frame it. This way applications.

Speaker 1

Are dietary supplements. Nutritional beverages, infant formulas, animal health, pet food that is included in that animal health in some way and some others. Please don't hesitate to step in, Martin, if you have amity if I'm missing 1 or 2 applications. But that's are the main ones. We are in conversation with several different potential customers for different for all of these different application, specifically in territories supplementation, because one of the competitive advantage that Glaser has with established normal products that provide GLA oil in the market is the concentration level.

Speaker 1

Glaso has up to 3 times more concentration of levels compared with the natural and current ones in the market. So the Delta supplementation market is very relevant. In terms of this specific offtake agreement with the CPG company, that application is for pet food. That is a volume and high value player as one of the top brands in the world. And we are in good shape of conversations with other potential customers for other applications too.

Speaker 1

In terms of quantities, volume, scale up and production, that's harvest will change to produce around between 50 to 70 tonnes. We are expecting around 60 tonnes. Around 50 will be for this contract, commercial contract and the rest would be for other customers in other applications. We still need to wait for, let's say, a couple of weeks to harvest, see 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.

Speaker 1

So we will probably have the specific yields from the land and also from the factory by November. So we're excited because this is a molecular farming product. This is the first one. So thank you for the question. And I don't know Martin, Jose and Andy, if you want to add something on top of what I have just said, but that's a quick summary of of the soft take agreement.

Speaker 6

Scott. I appreciate it. Follow on your discussions with other mentioned other companies. What are how far along of those discussions kind of expectations for potentially adding more in this year and then kind of what they're sampling kind of what does what needs to come across for them to kind of move forward with you could just kind of put a, an idea of where that pipeline is and potentially adding on the glass though for

Speaker 1

you? Well, I am quite confident to say that we are going to sell the whole production. Pretty sure. Actually, I think we could sell more if we have more material. But unfortunately, we need to wait the biology times here.

Speaker 1

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 a part of that production for multiplication of seed to scale up this campaign and to for the next year. So we are actually planning our following commercial campaign.

Speaker 1

We will have more flexibility there. And I think that we are we need to call 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 sell and start, let's say, robust and consolidate the relationships with new customers by sending fresh samples right away. So that's the plan overall. I'm really looking forward to grow the business next year. But at least as of now, it's pretty full committed.

Speaker 6

Got it and last one for me and then you guys can touch base on that R and D collaboration with Bunge, which is great. But, just kind of remind us step us through, you know, obviously you got the USDA or the FDA on the piggy sue side, but kind of the results here. We'll find out more in October those results from the field trials. And since you mentioned that 20% range, but just step us through, we're still on track for commercialization on that in 20 728 here and just the key milestones you have to hit leading up to 27 kind of looking out for the next year to on the piggy suicide.

Speaker 1

Sure. Great question. Well, we announced, I think it was a month ago that we will be harvesting both crops October this year. Now, glass of production for commercial purposes and piggy soy for a couple of purposes. The first one is to gather information for the FDA.

Speaker 1

That what you said, Scott, is true. We need to gather information not only from one place, for 3 different locations. That's why we farm in Missouri, Ohio and Iowa, 3 different locations in 3 different latitudes and states. We will gather the information for the FDA. We are in great conversations with regulators.

Speaker 1

Things are moving nicely, but we need to fulfill the path here and we know how to navigate the regulatory front with our regulatory team. We are not envisioning any delay, so everything is on track And then the plants are beautiful. Beautiful. I really want to invite all the stakeholders to these 3 different locations for the harvest because the plants are very, very nice. So let's see how that goes.

Speaker 1

We are pretty excited about this historical moment of planting, of harvesting, let's say, animals from the US soil, fully approved it from the USDA. So in terms of commercial efforts for PD Soil, the second reason why we move forward with the field trials over the regulatory information for the FDA is to gather also fresh material for salmon. I want to remember all here that Moleki is a science based ingredient company and the ingredient sector, the ingredient business is not easy, but this is very standard and what you need to do is to get samples, expect and to build a relationship with food producer 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 that samples right away. We are in good conversation with several different potential players and customers for PP Soi.

Speaker 1

They are all very interesting to start proving or let's say testing in their own recipes, in their own labs and in their own pilot facilities that these ingredients would help them in so many ways. So that's the second reason. And the third reason of these field trials for PK soy in the United States is to analyze to finish the D of the R and T stage, the development, product development. And I will leave the floor to Ami to just a little bit to explain the different events that are planted in the field because we need to start analyzing transgenic events and plant performance and start crossing that information to start selecting the champion event. That will be the champion seats that will be multiplied in the future in the future, in the upcoming years so as to hit the market in 2027, 2028.

Speaker 1

That's I want to reinforce that timeline. So, Amit, do you want to add more color about the science in the field?

Speaker 7

Yes. Thank you, Gaston, and thanks for the question as well. As you all know, piggy soy 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. So as we are doing these field trials in different locations, we are we want to reach to a point where we want to evaluate in the 4th 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.

Speaker 7

And as I initially spoke during the update, we are seeing 20% total soluble protein being consistent through the 3rd 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 will also do further evaluations on. This high level is really unprecedented in seed production and we want to take it from there. And this is the platform we also want to utilize for other ingredients or other proteins or other molecules that we that are desirable in the market as well. So very exciting what we're doing with this.

Speaker 7

We're expanding our reach to commodity groups as well as soybean related commodity groups to keep them involved and included as we are developing this product. So as Gaston invited stakeholders to our facilities or our trials, just to see what we are really developing over here. So really exciting times for us in the science sector. And we continue to, as a scientist, we continue to develop our concepts further and expand to other molecules as needed. It would be bioplastics.

Speaker 7

It could be any other pharmaceutical ingredient, etcetera. So thank you very much, Gaston. Back to you.

Speaker 1

Thank you, Amit. Okay, let's move on. Thank you so much, Scott.

Speaker 4

Thank you.

Operator

All right. Our next question, we have an online question from Anthony Vendetti of Maxim Group. I'm going to read them. Have you signed any additional commercial uptake agreements for Colaso? If not, do you expect to sign any by the end of 2024?

Operator

What percent of yield is accounted for?

Speaker 1

Well, thank you, Anthony. And Will, do not forget about answering the banking 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 agreement signed yet.

Speaker 1

I think for the short term, it will not be necessary. It will be just invoicing and commercializing directly while the spot sells for this campaign. We're envisioning to have formal agreements for the following campaign so that who knows it would be before the year end or next year. I have we have time for that. We are in good conversations with some other customers.

Speaker 1

I think that it's also a matter of timing and awareness. We are hitting the market now. So it's like one new product is new in the market. We are planning to attempt to some food and animal health shows and some dietary supplement shows next year to make some marketing for the product. So we I'm really optimistic of the traction of this product for next year.

Speaker 1

I'm really looking forward to continually signing offtake agreement 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, Marty?

Speaker 4

Yes. Yes. So thank you for the question, Jeremy. So I'm trying to understand what exactly is the yield that you are putting here is in terms of the post per acre of the oil that we can recover out of each acre.

Speaker 1

But nevertheless Talk about both. Talk about both.

Speaker 4

Yes. Yes. Nevertheless, so the yield that we are expecting, so yield for safflower in the area is around, I would say, 1200, 1300 pounds per acre. We achieved last year in the range of 1600. That was a seed increase that we've done last year compared to this season where our very first commercial season, we expect kind of the same yield in that.

Speaker 4

So on how much oil we can recover out of that is highly depends 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 that's Tom mentioned some of that during the presentation. So this particular trade of G and A has a reduced amount of total oil compared to wild type sulfur hour. So we expect extraction in the range of 15% to 20%.

Speaker 4

So that's 15% to 20% from the is the total oil, right? Let's say, out of that, we can expect maybe 80% of a yield from the total oil recovery. That's kind of the yield that we are expecting very soon to be fully determined.

Speaker 1

Yes. Agreed. Yes. This is happening as we speak, as I said before. Thank you so much, Martin.

Speaker 1

Okay. Let's move on. Thanks, Anthony.

Operator

Okay. We can move on to that. My previous question, you mentioned signing an R and D collaboration with Bongi to

Speaker 1

Yes. Well, I remember the Bangi question. Thank you for that. We are very excited about being close to Bangi now with this R and D and collaboration agreement with them. As you all surely know, Bangi is one of the ABCD companies that are 4 dominant agriculture trading worldwide together with ADM, CarGIn and Dreyfus.

Speaker 1

So it's an honor for us to as a young company to be close to this mayor player. Specifically about the R and D collaboration, this is for upstream efforts in our SafFlower platform that include that's part of our GLASSO improvements and some other new developments in the safflower varieties and safflower plants as well. So, I will leave the floor to Abid first to fully explain the importance of the genetics in the abstracts from so as to improve and back cross and focus on breeding varieties in the field. This is high level. It's very important to understand yields in the fields and to focus on science and genetics.

Speaker 1

And then Martin could give more color in terms of the specific traits that we are working. I want to highlight that Banggi is focusing on safflower for biofuel application. Moleki is focusing safflower as a bioreactor platform, as mini as a small factories to produce glass of new products in the pipeline, but both share the upstream part of the value chain. So but again, I will put a pause now and pass to Ami to explain the breeding side and Martin to explain the trade side.

Speaker 7

Thank you, Gaston. I would say that as what we produced, what transgenic lines we produced, we select our champion events, which has the highest level of expression and agronomic performance. But as new breeding lines are being generated, which are either have other traits. For example, they can perform better, agronomically in different geographies or under different climatic conditions. So we can introgress or do 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 inputs.

Speaker 7

One of the biggest things is that the genetic potential to breeding continues to be enhanced And we have the opportunity through these partnerships, where we can capitalize on the new genetics that is coming through the pipeline as well by combining these traits through breeding. I also wanted to say that we have our internal labs where we can characterize 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. You know, 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.

Speaker 7

Thank you. Over to Marty. Thank

Speaker 4

you. Yes. Yes. So basically, the yield that I mentioned for safflower GLA in the United States around the 14 to 15 100 is quite a great yield in the United States and it's a variety that would have been using since a while. But when you compare that yield with the commercial or many other germplasm in the southern hemisphere, particularly in countries like Argentina, yields are not as good.

Speaker 4

So our main goal is to evaluate, test 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 and as Amit said, once we identify with 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.

Speaker 1

Thank you, Martin. Very clear and thank you for the question. And I want to add on top of that. So going to the next question, I think would be Arab question. That is a huge opportunity for Mulek being close to Bangui because of not only because of sunflower seeds, it's because of all our pipeline, soybean as well.

Speaker 1

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, of delivering our commitments with Bangi in terms of safflower upstreams. But as I said before, this is maybe a one step forward of new potential collaborations in the future with this major company. So let's move on, Will.

Speaker 1

Thanks for the question again.

Operator

Okay, great. Our next question comes from Arun Suresh. In terms of safflower oral 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?

Speaker 1

Well, thank you, Aro, for joining us today, and thank you for the question. Before going to Jose, I'm talking up he will talk and give some indication about the growth in 2025 in terms of the business. But in terms of applications and AI and data centers, I don't know. What I can say is and this is amazing. It's a good idea.

Speaker 1

Great. But what I want to highlight and point out that Mulek is focusing on improving yields for Glaco and the future products by using safflower as a bioreactor, as a great small factory and biological factory. Balje is focusing on biofuels. I personally think that we haven't reached what plants can do. Molek is proving with Glazo and Piggy Soil that this technology is not only doable, not only feasible, is cost effective, is sustainable and is real, is materialized, is concrete.

Speaker 1

So, 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 techniques. But I want to go back to the question, Aron. Thank you for that. And I'll leave the floor to Jose to give more details in terms of revenue.

Speaker 5

Sure. Thank you, Astora. And Aron, thank you very much for the questions. So 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.

Speaker 5

So what to expect in terms of Classo participating in the revenue onwards for fiscal year 2026? Probably, if in fiscal year 2025, it's going to be around 15% for fiscal year 2026. I would expect it could be participating in double way, participating in fiscal year 2025. So yes, we have good hopes, good expectations for the product and how it helps grow the revenue of Murat.

Speaker 1

Thank you, Jose. Before going to the next question, I want to leave the floor to Ami to probably he will want to expand my technological and scientific answer. I can't see one of those.

Speaker 7

Yes. Sorry. I'm having some connection issues. No worries. Well, in this particular case, I think our technologies are expanding quite a bit.

Speaker 7

Gaston, as you've 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.

Speaker 1

Yes. I fully agree. Thank you, Aaron, for the question. And please, we'll let's move for the next question first.

Operator

Okay. We have a follow-up question from Anthony Vendetti of 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?

Speaker 1

Well, thank you for the question, Anthony, again. Well, all the efforts that we have done And we are willing to do our in terms of awareness of plant boracrofarming as a technology are for the industry, are for the people that really understand technology, science and applications. Mulek has a B2B business model. We don't need to invest money and time to defocus communications in in mainstream communications. We don't need to talk about to consumers.

Speaker 1

The Nestle of the world knows 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 try to be very transparent of how we modify plans, all our technology works and so on. But all our efforts are to approach the people that really understand the tech.

Speaker 1

And that's mostly the R and 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 deck. And I always say that when we started back in 2020, talking about modifying seeds for human consumption purposes was like quite shocking. 4 years or I definitely can assure that this is very well understood. So we are going to continue educating the R and D departments.

Speaker 1

Most of them approach us directly because we are very active in LinkedIn, in PRs and some specific shows that we are attending. So it's working so far. We really want to reinforce that communications. Since we are hitting the market now with Glaso and getting fresh material from piggy soil very soon, We want to continue investing and maybe expanding that message now with fresh materials and new materials, new communication materials as well. So it's a very relevant topic what you have just raised, Anthony, in terms of helping us in the commercialization stage that more like this is starting as we speak.

Operator

Okay. Moving forward, we 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, Wolek 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?

Operator

While this technology is innovative, I believe it is still not widely understood by the general public. Do Do you think greater exposure and support could attract more investors, increase the value of the shares? What's the plan on this matter?

Speaker 1

Similar question, but it's very, very important for us to tackle all of these things, specifically the investor relationship investor relations efforts that we are having together with ICR, with U. S. Staff and the ICR team. For us, it's very important as a small company to have these good practices of investor relationship by getting an important AR firm such as you guys. So the plans are to continue co working with you guys and to attend to more conferences, to deliver good stuff in terms of PRs and to keep the investors updated.

Speaker 1

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 is 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.

Speaker 1

We are talking we are thinking about decades here. We and this is just starting. But I think it's a very good question. But, Michel, thank you for that. And let me reinforce the great work that we are doing together with the ICR to expand and spread the spread the word together with them.

Operator

Another follow-up question or question we have is from Salvador Verdoliva. He says, I'm new to the story. From my understanding, Galassa was 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?

Speaker 1

Thank you, Salvatore. Thank you for the question. And I'm very glad that you are getting into the story now. So we could give more color, not only about Glaso applications and products and the competitive edge. Also, you could have a better color and sense of what Munich is doing here with molecular farming.

Speaker 1

Before going to Martin to fully explain the product, and I will try to be to do it quick because the market have just opened and probably most of you want to start seeing to taking a look of the shares on the market is that GLASO is the name GLASO means GLA safflower oil. That's mean gamma linolenic acid safflower oil. Gamma linolenic acid is an specific omega-six, 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.

Speaker 1

But Jose, do you want sorry, Martin, do you want to ask more on that?

Speaker 4

No, no. I think you explained it quite well. The only thing I would add is the our competitive advantage compared to borish and even in pre emeralds, which are plant based oil reaching GLA is that our expresses something between 50% to 60% of GLA. So out of the complete fatty acid profile, 60% between 50% 60% is GLA. The next most rich GLA plant based all is borage and it has only 20%.

Speaker 4

And then even in Primrose is in the 10% range. So our fatty acid profile, our oil produces 3 times more GLA per kilo of oil than other oils in the market, which in GLA. That's our main competitive advantage.

Speaker 1

Thank you, Martin. I want to add before we close or we will go to the next question that concentration levels are critical for dietary supplements, for example. It's not the same to take 3 or 4 pills per day and rather than 1 pill. So our competitive advantage is definitely has a strong cell message and that's what we are going to do in terms of communications. So now on that we have products in the market to reinforce that competitive edge.

Speaker 1

Will, do you have any question? More questions? I think there's not any other questions in the chat box.

Operator

That's correct, Jose. Gaston, it appears there's no further questions at this time. So I'd like to hand the call back over to you for some closing remarks.

Speaker 1

Yeah. 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 want to add some comments in terms of the technology. Jose, Martin, feel free before we go.

Speaker 7

Yes. Thank you, Gaston. I wanted to address a couple of comments earlier and add to those about plant molecular farming. So, we are really connecting a lot with commodity group organizations where because as Gaston mentioned, we are a B2B business. We are first informing them.

Speaker 7

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 or we are already members of several other organizations such as the International of our research and development team. And we're also working with our team, and we're also working with our team. And we're also working with our team, and we're also working with our team. And we're also working with our team, and we're also working with our team.

Speaker 7

And we're also working with our team, and they utilize the plant molecule forming to reach our policymakers. And, sometimes that also crosses over to the investor groups. So really the effort from 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, molecular farming. And through this ecosystem, we are developing networks as Gaston said. R and D folks are coming to us.

Speaker 7

In fact, I get invited on behalf of Molech to speak at various plenary sessions to talk about what we've achieved through soy, piggy soy, as well as glass. So that's a very exciting time for us in the science field. And that also fosters new ideas that are new scientists who are developing, starting their careers or new technology. They have new technologies that really want interested in this. And that's how together we will really advance the science on this front.

Speaker 7

So that's very exciting. Thank you, Ghastal. Over back to you.

Speaker 1

Thank you, Amit. Thank you. Yes, just to add on top of that, we are very committed to stewardship. We are very committed to follow identity preserved programs for our crops in the United States. We are dealing with high value products here, fully approved in the United States with the RSR from the USDA fees.

Speaker 1

That's amazing. Nevertheless, we are very focused on following and having traceability of our beans, our receipts. 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?

Speaker 5

So from my part, thank you, everyone, for participating in the call, the interest in Mulek. Please do reach out for anything, any questions, any doubts that you have. I will be pleased to help and get in touch with you.

Speaker 1

Thanks.

Speaker 4

Adrien? I'm okay at my end. Thank you. Thank you all. It was quite an interesting conversation during this Q and A.

Speaker 4

Thank you.

Speaker 1

Good. Okay, great. So I personally would like to thank Catalina Jones, our Chief of Staff and Sustainability of MULAC for leading internally again this business update. Thanks, ICR, Steph, Will, thank you and to the Munich team. And also to my fellow officers here presenting with me, all of you, thanks for joining us today, this annual business update.

Speaker 1

Thank you for that, for taking the time and your interest in the company and our story. And finally, I want to reinforce the commitment of our company of Bullek and its our main shareholders as well to keep the company publicly in this challenging market, as you surely know. We redoubled our commitment to our purpose of redefining the way we produce animal proteins with molecular farming for the good of the planet, for the good of all. Well, thank you again. Have a great day.

Operator

Thank you, Paul. You may now disconnect.

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Key Takeaways

  • USDA approval achieved for Piggy Soy under APHIS RSR, making Mulex the first in the industry with a determination that it poses no greater plant-pest risk than non-engineered soybeans.
  • Moo Labs operational in College Station, TX, enabling in-house R&D that delivered stable T3 Piggy Soy events expressing up to 20–25% animal protein by total soluble protein.
  • FY2024 revenues rose to $5.8 million (up $4.8 million YoY) on the consolidation of the soy protein ingredient business, with gross margins in line and a $5.4 million cash position bolstered by a 15,000-ton soybean purchase via convertible note.
  • Three-year offtake agreement signed with a major global CPG company for GLA-enriched safflower oil (Glaso), targeting 50–60 tons in FY2025 and expected to contribute ~15% of total revenues.
  • FY2025 strategic focus includes Glaso commercialization, scaling seed inventory and yields, progressing FDA approvals for Piggy Soy, an R&D partnership with Bunge on safflower genetics, and establishing a U.S. operations hub.
AI Generated. May Contain Errors.
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