Burcon NutraScience Corporation (BU) Earnings Call Transcript & Summary

Hello and welcome to the Annual General and Special Meeting of Shareholders of Burcon NutraScience Corporation. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer use of same. If you disclose personal and information of another person in today's meeting, you will be deemed to represent in a warrant to Computershare and the corporation that you first obtain or required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question-and-answer session. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mr. Peter Kappel, Chairman of the Board of Directors of the corporation. Mr. Kappel, the floor is yours.

Thank you, operator. Good morning, and welcome to the Annual General and Special Meeting of the Shareholders of Burcon NutraScience Corporation. My name is Peter Kappel, and I am the Chairman of the Board of Directors of the corporation. The Board has authorized me to lead the meeting of shareholders today. Today's meeting will be split in two parts. Firstly, the formal business of the AGM, and thereafter, Kip Underwood, our CEO, will make a presentation and entertain questions from attendees. As this meeting is being held virtually via live webcast, we think it's necessary to set out a few rules for the orderly conduct of the meeting. One, questions in respect of a motion can be submitted at any -- by any registered shareholder, duly appointed proxy holder or guests using the Q&A icon on the virtual interface. Two, questions will generally appear shortly after they are submitted, but will only be addressed during the question period at the end of the meeting, provided that questions regarding procedural matters or directly related to the motions before the meeting may be addressed during the meeting. Three, for the purpose of the meeting today, voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each item after the presentation of all business items. Four, when you are asked to vote, the polls will be open for you to register your votes. You will only have a certain amount of time to do so when the polls are open. We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move and second all motions. I now ask the Annual General and Special Meeting of the Shareholders of the corporation come to order. Dorothy Law, SVP Legal and Corporate Secretary of the corporation, will act as Secretary of the meeting. With your approval, I appoint Bernadette Villarica of Computershare Investor Services Inc. to act as scrutineer for this meeting and to compute the votes of any polls taken at this meeting and to report thereon to me. On behalf of the Board of Directors, I'm pleased to welcome you to this Annual General Meeting of the corporation. I am pleased to introduce the representatives on our Board of Directors who are present today. They are Alan Chan, Debora Fang, Alfred Lau, Jeanne McCaherty, Aaron Ratner, Lorne Tyrrell, John A. Vassallo and myself, Peter Kappel. In addition, Mr. James Pekar, who is not a current director, but one of the nominees for director is also present. For the purpose of today's meeting -- or the purpose of today's meeting are set out in the management proxy circular of the corporation dated August 1, 2024. The notice calling this meeting, the management proxy circular and the former proxy were mailed to shareholders on or around August 12, 2024, along with audited consolidated financial statements of the corporation for the fiscal period ended March 31, 2024, and related MD&A to shareholders of the corporation who requested such statements and related MD&A. Unless there is any objection, I will dispense with the reading of the notice meeting, copies of the management proxy circular and other meeting materials are available under the corporation's profile on SEDAR on the SEDAR website and on the corporation's website at www.burcon.ca. Our transfer agent, Computershare Investor Services, Inc. has tested to the proper mailing of the notice calling this meeting. There has been filed with me proof of service of such mailing provided by the corporation's transfer agent. I direct that a copy of the proof of service be annexed to the minutes of this meeting as a schedule. Quorum. I have been advised that there are voting shares representing more than 5% of all outstanding voting shares of the corporation present, and therefore, a quorum of shareholders of the corporation is present, and the meeting is properly called and duly computed for the transaction of business. I received scrutineer's report, and I direct that their formal report be annexed to the minutes of this meeting as a schedule. The minutes of the last Annual General Meeting and Special Meetings held on September 20, 2023, are filed in the minute book and available for inspection. I will entertain a motion that the reading of the minutes of the last Annual General Meeting of the corporation be dispensed with and the minutes be taken as read, approved and adopted as tabled. Unless there are objections, I declare that the minutes be taken as read, approved and adopted as tabled. As the first item of business on the agenda for today's meeting, I now present the meeting with the audited consolidated financial statements of the corporation as at and for the fiscal period ended March 31, 2024, together with the auditor's report to shareholders thereon. Copies of such documents have been mailed to shareholders who requested such statements, and it is not proposed to read them at the meeting. Now we have several resolutions to vote on. I will read these resolutions and they will be voted once they're all read. Election of directors. The next item of business is the election of directors. The corporation did not receive notice of any director nominations in connection with the meeting within the deadline imposed in accordance with the advanced notice provisions in its articles. Accordingly, the only persons eligible to be nominated for the election to the Board of Directors of the corporation are the management nominees. The 8 directors to be elected by the shareholders of the corporation shall hold office until the close of business of the first Annual Meeting of Shareholders of the corporation, following election and until their successors are elected or appointed. Alan Chan, Peter Kappel, Debora Fang, Jeanne McCaherty, Alfred Lau, Aaron Ratner, John Vassallo and James Pekar have been nominated as directors for the ensuing year or until their successors are elected or appointed. Each of the persons nominated has confirmed that he or she is prepared to serve as a director. Since there are no other nominations, I move and second a motion to elect the directors. Unless there are any questions, I will move to the next item of business. The next item of business is the appointment of the corporation of auditors. The next item of business is the appointment of the corporation of auditors of the corporation of the ensuing year, and I authorize the directors of the corporation to fix and to authorize the directors of the corporation to fix the remuneration of the auditors. The Audit Committee of the Board of Directors of the corporation is approved, subject to shareholder confirmation, the appointment of KPMG LLP as the auditors of the corporation. I move and second the KPMG LLP be appointed auditors of corporation until the next Annual General Meeting of Shareholders and that the Board of Directors be authorized to fix their remuneration. The next item of business is the approval of warrants issued to Mr. John A Vassallo. As outlined in the management proxy circular, shareholders are requested to pass resolutions to approve the warrants issued to John Vassallo as compensation in connection with the Strategic Advisory and Consulting Agreement between Mr. Vassallo and the corporation. The background to the issuance of the warrants and a summary of their terms are included in the management proxy circular. The votes attached to the common shares held by Mr. Vassallo and his affiliates and associates will be excluded from the vote. I now move and second as an ordinary resolution of the shareholders of the Burcon NutraScience Corporation that, one, the issuance of $5 million non-transferable common share purchase warrants, compensation warrants to John A. Vassallo pursuant to the Strategic Advisory and Consulting Agreement dated March 6, 2024, as compensation for Consulting Services as defined in the Advisory Consulting Agreement, being a security-based compensation arrangement for the purpose of the TSX rules, be and is hereby authorized, ratified and approved. Two, any one director officers that are authorized and directed on behalf of the corporation to form all such acts, deeds and things and execute, under seal of the corporation if applicable, all such documents, instruments, certificates and other writings as may be necessary or desirable to give effect to this resolution. The next item of business is to authorize the Board of Directors at its discretion to effect a consolidation of all the issued and outstanding common shares of the corporation. A description of the rationale for a share consolidation and summary of the effects and risks associated with the share consolidation are included in the management proxy circular. I now move and second as an ordinary resolution of the shareholders of Burcon NutraScience that, one, the authorized share structure of the corporation may be altered by consolidating all of the issued notes and any common shares of the corporation at a ratio to be selected by the corporation's Board of Directors, in its absolute discretion, provided that the consolidation shall be no greater than 20 pre-consolidation common shares for every one post-consolidation common share -- the share consolidation. Two, the date of completion of the share consolidation shall be determined at the discretion of the Board, provided that such date shall be before September 18, 2026. Three, any fractional common shares resulting from the consolidation of the common shares be converted to whole common shares pursuant to the provisions of Section 83 of the Business Corporation Act of British Columbia. Four, the Board be and it is hereby authorized to revoke without further approval of the shareholders this ordinary resolution at any time prior to the completion thereof, notwithstanding the approval of the shareholders of same, if determined, and the Board's sole discretion to be in the best interest of the corporation. Five, any one director officer is authorized and directed on behalf of the corporation to perform all such acts, deeds and things and execute, under seal of the corporation, if applicable, all such documents, instruments, certificates and other writings as may be necessary or desirable to give effect to this resolution. As we mentioned, voting today will be conducted by electronic ballot. I will now take a moment to ask that the balloting be open to registered shareholders and appointed proxy holders. If you have already voted by proxy prior to the meeting, you do not need to vote again unless you wish to change your vote. The polls are now open and at this point, all registered holders and proxy holders who have properly logged in with their control numbers or invite code and wish to vote will be able to see on the screen all motions being brought forth at this meeting. I will be pausing while this is going on. [Voting]

Just a reminder, please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director and next to the resolution with respect to the appointment of KPMG LLP as corporation's auditors, with respect to the resolutions for the approval of warrants to Mr. John A. Vassallo and the share consolidation. Please register your votes by selecting for or against buttons. We will provide registered shareholders and duly appointed proxy holders approximately 1 more minute to complete the electronic ballots. [Voting]

Okay. Thank you very much, people. I will now close the polls. Polls are now closed. I would ask the scrutineer to compile a report regarding the results of voting on all business matters and the results will be published on SEDAR by press release. I have been advised by the scrutineers that the ballots and proxies deposited for the meeting have been voted in favor of the resolutions. One, each of the 8 nominees have been elected as directors of the corporation to serve until the next Annual General Meeting of Shareholders or until their successors are elected or appointed. Two, the appointment of KPMG LLP as the auditors of the corporation has been approved, and the Board of Directors of the corporation have been authorized to fix their remuneration. Three, the issuance of the compensation warrants to Mr. John A. Vassallo is approved by a majority of the votes cast at the meeting. The votes attached to the common shares held by John Vassallo and its affiliates and associates were excluded from the vote. Four, the share consolidation authorization was approved by a majority of the votes cast for the meeting. I direct the results of the poll to be included with the minutes of the meeting, and the results of the voting will be announced in a press release in accordance with the policy of the TSX and filed on SEDAR. The formal items of the business as a set out in the notice of the meeting have now been dealt with. I move and second that this meeting now terminate. As there is no other business to come before the meeting, I declare the formal part of the meeting to be concluded. On behalf of the Board of Directors, I would also like to take this opportunity to thank Dr. Lorne Tyrrell for his years of service on the Board of Directors of the corporation. Lorne, your contributions to the corporation were greatly appreciated, and you will be missed, particularly by myself. I really enjoyed the work that we've done together and how it's gone over the years that we've known each other. So thank you very much again, heartfelt.

You're welcome.

I will now turn the floor over to Mr. Kip Underwood, the Chief Executive Officer of the corporation, to report on the operations of the corporation for the year ended March 31, 2024, and on its prospects for the current year. After that, we will open up the floor for a question-and-answer period. For those of you viewing the meeting online, you can expand the slide presentation to full screen by pressing the broadcast button near the top right corner of your computer screen. Kip, over to you.

Thank you, Peter. First, good morning, good evening and good afternoon to those joining around the world. And an additional thank you as a lead to our investors for their patience and their confidence in us, for our Board for their support and for the team for their effort, creativity and persistence. Excited to speak to you today about where Burcon is and where we are going. We'll start with a standard safe harbor statement. I assume everyone understands and we can move forward. We start with we are -- have the ability to access a large growing market. A chance to start with the tailwind, which certainly beats a headwind. Why are we excited about this market? Consumers continue to seek foods that are better for them, better for their health, and better for our planet. Proteins and specifically plant proteins play a critical role in delivering against that consumer need. And as you can see, brand owners in the world today are reacting to meet that need. What that means for Burcon is opportunity. As all of you on the phone know, we have a suite of technologies, a suite of plant protein ingredients that has specific value and differentiation targeting this multibillion-dollar addressable market. Our technologies range from highly differentiated offerings in terms of soy protein, pea protein and canola protein. We also have new-to-the-world solutions, new-to-the-world proteins in terms of hemp and sunflower. Specifically sunflower over the long haul might be the one we are most excited about. In future opportunity, the world's third largest oilseed crop, tremendous opportunity to upscale the byproduct production and something we will continue to go into in more detail in the future. How do we go after this opportunity? For those of you who follow us, we developed a capital-light business model strategy approximately 1 year ago today, and this is critical. The right side of the graph is about innovation. How do you create technology, how do you create something new and differentiated. The left side of the circle is, well, how do you turn that innovation technology into profit, into a successful business. The wheel is product launch. We're in the stage of a product launch. This is ultimately critical to our overall business model. We create value, we create innovation on the right. We bring in those products, that technology to market through test market. Once we're successful, establishing customer demand, establish unit economics, proving commercial-scale capability, we have optionality and choice how to truly monetize those products. We can build, we can partner to launch a technology and we can license the technology or we can scale technology. This gives us optionality in how we grow our business and multiple revenue sources coming in. The last piece I would say is you see our technologies at different spots along the maturation, right? Upcycled proteins, which we'll talk about more into the future. I mentioned sunflower on the cusp of becoming commercial and as the market knows, we have launched both hemp and canola proteins. What's not on this is the up-and-coming technologies that we plug into this flywheel into the future. So this is a circle for a reason. New technology comes in, we get it to market, we monetize that. We see the next piece of technology in the heart of the funnel. This is a core to who we are and core to how we will monetize the investment technology Burcon has had over the years. For each technology, there is a bit of a phased approach. What's critical for everyone to understand is right now, we are in Phase 1. We are executing production, driving sales, moving technologies into the market. Again, as I mentioned, to establish demand, customer interest, unit economics, commercial scale capability. Once we do that, we can move into Phases 2 and 3 from a point of strength, from a point of the successful business. That is where we bring in people, we sit across the table from companies, partners, potential licensees, potential purchase of technology, and then we can, step 2 is monetizing our R&D investment, but doing that from a real point of strength. Many people hear us talk about moving from a company that just creates technology and innovates to one that derives profit from our innovation. The 3 strategic imperatives in front of you, we developed about 18 months ago, and they guide our decision-making and how we go execute the marketplace, additional revenue streams, optionality. We have to be close to end customers and markets. We have to know what they like, what they dislike, what they will pay for, what they will not pay for. And we need to ensure we have influence or control of the manufacturing of our technology to ensure that when our product meets a customer's door, we meet if not exceed their expectations. On to execution. Once you have a technology and have a product, the first thing you need to think about is how do I bring it to market, our sales strategy. Based on my experience and many others, this is critical to our success, where do we start? Who do we reach out to first? The answer is we reach out to entrepreneurial brands, cutting-edge brands, those brands that are on the cutting edge of food and food trends. We do this for a few critical reasons. First is those are the ones who most value new technologies. Those are ones who are bringing consumers those new solutions that require innovation. Second is, typically, we will have much more aligned values, as smaller companies trying to drive change. Third is, it's the best fit for Burcon today, right? Their size, their scale, what they are trying to do is the best fit for us today, and gives us the highest degree or probability of success as we move forward. Over time, as we grow, yes, those customers change and evolve. Many of the people we start with will become midsized brands and they become large brands on their own. We will also, as we mature, begin to reach out to larger brands be our overall strategy. The critical piece is where we start, those entrepreneurial cutting-edge brands that are the best fit for us, and we are the best fit for them. The core of who Burcon is, is cutting technology, right, and specifically cutting-edge plant protein technology. Who we are and what our technology does, it delivers food brand owners, food companies what I call a blank canvas. It gives them the best chance to design and create foods that we all will go to the grocery store and buy once, twice, 3 and 4 times. What you see in front of you is an example of that with hemp, right? So what do we do to deliver a great food experience or help a brand or do that? We have to have better taste, better color and a better eating experience. What you see in front of you is an example of how we do that. Upper left, the competition is on the right, we're on the left, better color, more appealing, it leads to a more appealing visual experience for the end consumer. Lower left, again, how do we change the purity and the quality of the product so it's a better answer for the food company. And the right is about taste, right? Taste is king in food, even if you're looking for a nutritional offering, taste is what drives you to buy something not just once, but 2, 3, 4 times and make it a habit. This is us compared to leading-edge hemp proteins in the marketplace. The green boxes kind of mouthfeel, nutty, those are the ones that are good, you want those to be better, okay. The boxes that are not circled in green, right, are ones with like vegetative notes, those are ones that are bad. You minimize the bad, you maximize the good. That is what's core to how we deliver a better experience to the end consumer to help that. It's also core in our selling is, how do we prove to brand owners that our technology really is differentiated and really gets better. You have to have the good and we can, in fact deliver. I've talked a lot about execution, moving from a company that creates technology to one that drives product from technology innovation. To do that, you must be able to execute, you must build what I call the execution muscle, and we do that every day. I'd like to highlight some of the things we've done in the execution of our strategy in the last 12 months. We're pretty proud of these that we've been able to clear these milestones, and we believe these milestones lay the foundation for even better things to come in the future. So again, development of the strategy a little more than a year ago. Launch of not just our first ingredient, the world's first hemp protein isolate with our partner HPS. What the customers validated demand? What are you looking for in a protein? If we can deliver this, would you buy? Great feedback. Financially, we would meet the conditions to move into our -- and pull funds, $1 million from the second tranche, right? None of this works and that we have a healthy balance sheet that enables us to execute. Move into really calendar 2024, and you have the building out a supply chain, the first commercial production of both hemp protein and canola protein, the world's first commercial production of hemp protein isolate. We move into April, maybe we'll look back in years from now, the critical milestone for Burcon, first commercial sale of hemp. And I want to call from idea to building out a supply chain, building out the capability to first commercial sale of the world's first hemp protein isolate in 9 months. I have been in this industry for over 25 years. I have never even heard of a company launching a new food ingredient that is new to world and achieving a sale on that timeline. I think it's a credit to our teams for their creativity and their persistence and their just willingness to do what it takes to win and it's a harbinger of things to come for Burcon in the future. Since then, again, we've announced -- we actually completed our second canola commercial-scale production run. And what -- this is the foundation we're talking about for growth. And what we will see in the future is this graph starts to look like produce, sell, produce, sell, produce and we get into that rhythm in the food industry as we stack sales wins that is fundamental to our success in the future. What does the future look like? We talked about Phase 1, Phase 2, Phase 3, right before. So Phase 1 is where we are now, relatively small scale. We're ramping up new technology, still doing it in a positive unit margin location. Phase 2, economies of scale, drive our cost down a little bit, drive that volume lever and build to a place where we're a strong successful business, which enables Phase 3, which is really around ramping the technology at scale, which again could mean build, partner, license or sell the technology. This graph holds true for each of our plant protein technologies I've talked about today and for those that are in the pipeline for the future. Each one -- our wheel goes through this. We get it to market in Phase 1, improves unit economics. We get to Phase 2 strong successful business performance, move to Phase 3, drive at scale through build, partner, license, sale. This is fundamentally how we build our business and how, in the end, we drive a tremendous return on investment to our investors. I get asked a lot, how do we know you're successful? How do we know Burcon is winning? For our fiscal year, here are the key milestones, right? Continue to ramp hemp and canola production. In a simple world, you cannot sell it until you produce it. So ramp -- so our investor base should look for continual news around successful commercial production campaigns, right? Second, we've said we anticipate successful sales, recurring revenue in the back half of the calendar year, right? Very exciting. It's important in this industry to understand this is when you achieve a sale, more often than not, it is a recurring sale. Think about when you go into a food, a food that we all buy at the grocery store, as you get wins, those stack, and then as a brand owner makes that food again, they buy from you again, right? So we should think about sales in terms of recurring sales and how those stack over time. And lastly, I think it's important that these sales are pretty sticky, right? Once you are in the food, brand owners don't change that food very often. We deliver against our promise, they deliver against their promise to consumers, consumers buy their product once, twice, 3, 4, 5, 6 times. The brand owner comes back and buys from us. The last 12 months have been pretty amazing, pretty challenging and pretty exciting from Burcon. We've worked very hard to build a foundation for success, right, understanding our value propositions. Understanding what customers will pay for and what they will not pay for, building out a supply chain management capability to not just produce but to bring our technologies to market, achieving repeating commercial production success, driving for our first but far from our last sale. That's the foundation for success, right? It's so exciting to have a growing market where you have highly differentiated world-class technologies that customers continue to validate with us. They allow them to do things they cannot do with offerings in the market today. We have to be disciplined with our cash and it is our responsibility, and we work very hard to do so. And we'll continue to build out robust capital-light manufacturing capabilities, which can underpin our ability to bring things to market. With that, I want to thank, again, our investors for their patience and confidence, our Board for their support and the team for their effort and creativity and persistence. It has been an exciting year, and we are very excited about what the next year has in store for Burcon as again, we moved from being a company that creates innovative technology to one that derives profit from that technology and delivers a return to our investors. With that, I'll turn it to Peter.

Thank you very much, Kip, for the presentation and actually, all the effort you and the team have put in over the past year, 1.5 years since you've arrived, really noticed the difference. Now I ask that all attendees who would like to ask a question to use the Q&A icon of the virtual interface to do so. We will answer as many questions as time permits. Please limit your questions to topics related to today's subject matter and keep your questions short and to the point. We will now give attendees a moment to type in the questions. Mr. Paul Lam, Director of Investor Relations, will facilitate the question-and-answer period. For each question we answer, we will summarize the question and read out loud the name of the person who asked such question, and if applicable, the entity such person represents. We'd like to remind you that questions which were already answered or that are redundant or repetitive will not be published or answered. So over to you, Paul.

Thank you. First question comes from Dave Storms of Stonegate Capital. Dave actually has 3 questions, but I will start with the first one. How do you envision the TAM, which is the total addressable market evolving over the short, medium and the long term?

Thanks, Dave. Appreciate the question. So I think the exciting piece about our market is we're still in its infancy. If you think of -- and it all starts with consumers, right? More and more consumers have a greater understanding of both what types of foods are good for them, and also understand that their food choices affect the health of our planet, right? More and more understand that. But it's still a relatively small percent of the population. So the existing addressable market is based on those consumers and consumers that just seek healthy protein. As more and more consumers understand and internalize how their food choices affect their health and the planet's health. And as we work with the companies to deliver new and better products, we see this addressable market only continuing to grow, has a long, long growth runway. So short term, more -- plenty of growth out there -- short and medium, plenty of growth out there for us to achieve, if not exceed our financial objectives. Long term, I think the sky is the limit.

Next question is also from Dave. Thinking beyond the recent wins in canola and hemp, what upcoming technology is the most exciting/promising?

Thanks, Dave. I think I mentioned in the presentation and in the future, we're going to do this more. For us, all of our technologies are differentiated and have real opportunity. However, in my own perspective, the one -- the biggest opportunity, the one that can fundamentally change the plant food landscape is sunflower. There's 3 reasons for that. One, it is the world's third largest oilseed crop, so think raw material availability. The existing raw material from sunflower is not upcycled at all. It is sold into low value-add, tremendous upside opportunity. Second is we have done the work. We have the world's only validated process to create an isolate of which we're aware. The product has excellent performance particularly on color and flavor, those dimensions that are great tasting food. Third is, from a halo perspective, speaking to consumers' perspective, it is protein from the sun, tremendous halo. So of all our technologies, the one over year 2, year 3, year 4, year 5, sunflower protein is the one that truly has the opportunity to fundamentally change the entire plant protein landscape.

Okay. Next question is, what milestones should we be on the lookout for as canola and hemp move beyond Phase 1?

Okay. I think as we move beyond Phase 1 into Phase 2, that's where we're ramping up volume. So the first thing people should see is recurring commercial production, recurring sales. That will start with announcements in the press release and things like that, then over time, you should see revenue growth in quarterly submissions around, again, stacking wins, stacking sales. What you produce in January, you sell in February, what you produce in February, you sell in March, right? That is really core to Phase 2 for hemp and canola. Thanks, Dave.

Thanks for your questions, Dave. Next question comes from a private investor, and it's related to the second question that you have answered. Could you provide an update on the commercialization progress for sunflower protein? And any partnership discussions around that technology?

For our sunflower, we have validated the process. We do have samples in the hands of multiple potential partners and downstream customers for potential demand, right? We have reinforced and reinvigorated our intellectual property moat to ensure we have the technology to have the technology protected. The win is the interesting piece. Core to our strategy is to ensure we have strength and power in that conversation. I've been at the table with being a larger company at the table. I've been a smaller company at the table, right? The way the small company has power is you are strong financially, you have established customer demand and you have proven technology. So for us, the win is as much about executing hemp and canola successfully to ensure we engage the final deal from a point of strength. So now we're in technology evaluation proving with potential partners, large organizations. The Step 2 of a license or a deal will come once we can have that conversation from a point of strength to ensure the technology we get paid for what it's worth and ensure we can have a return to our shareholders.

And as a follow-on to that question, what are some of the customers that you have right now? Are you speaking with any big brands?

So I would say from the customer set, there's 2 ways I can speak to them, right? So first is what's the types of food, right? So new protein launches typically will go into more nutritional applications, so think of ready-to-mix powders, think nutrition bars, things like that. Beyond that, canola actually has really, really unique functionality. And one of the areas we think that we'll see success there is actually an egg replacement. I talk about eggs a lot, right? Think about how you're cooking it, you fry it, do you scramble it over easy, you think about how different the functionality is. Think about how you put an egg in the patty your burger and holds it together or you add an egg and bake a cake and it gives a structure and air. Canola protein mimics, if not outperforms, egg protein fabulously. So a lot of our targets there are around how do you take an existing animal-based traditional protein that is higher cost and replace it with a better animal protein -- or a plant protein, excuse me. Over time, as I mentioned, to go to the sales strategy, as we scale, then we'll start to get to maybe brands that people might know better when the time is right, it's a win for us. Right now, our customer focus is entrepreneurial brands, better fit for us, better fit for them, on the cutting edge of food technology and also to that I mentioned, a better margin position for us.

Thank you for that. Next question comes from another private investor. Are we still on track to achieve profitability?

Yes, we are. So we've publicly communicated that we anticipate cash flow positive in calendar '26, and we are on track to do so. And I go back to these investors, what should you look for, right? The first thing you need to look for was the execution page. Did we build a foundation? Did we launch products effectively? Have we achieved our first sale? Check, check, check, right? Moving forward, what you should see is us moving into recurring production, recurring sales, stacking sales revenue and those will be the keys. We do enough of that, right? We get to a cash flow positive state. And then we move into that Phase 2, Phase 3 of the business maturation we talked about.

Okay, thanks for all the questions. That's all we have for today.

Thank you, everyone.

Great. Thanks, Paul. So ladies and gentlemen, the time has come to close this meeting. We'd like to thank you all for joining us today, and we look forward to interacting with you going ahead. Operator?

This concludes the meeting. You may now disconnect.