Ceres Global Ag Corp. (CRP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome. I am Carlos Paz, President and CEO of Ceres Global. As you are aware, for the 3 years in a row, this is a virtual meeting. Ceres Global has decided that its virtual format allows us to reach the greatest number of our stakeholders in the most convenient way possible. We want to thank you for joining us. Before turning this meeting over to the Chairman for the formal business of this Annual and Special Meeting of Shareholders, Holly will provide you with the following cautionary statement regarding forward-looking information.

In the course of today's meeting, representatives of Ceres Global may, in our remarks or in response to questions, make certain statements which are forward-looking statements and provide certain information, which is forward-looking information. Forward-looking statements and forward-looking information are prospective. Forward-looking statements and forward-looking information are neither promises nor guarantees but are subjects to risks and uncertainties that may cause the actual results, performance or achievements of Ceres Global or developments in Ceres Global's business or its industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Undue reliance should not be placed on forward-looking statements and forward-looking information. A more detailed discussion of these and important risk factors can be found in our most recent annual information form dated September 9, 2022 and Management's Discussion and Analysis for the 12-month period ended June 30, 2022, both of which are available under our corporate profile on SEDAR at www.sedar.com. Thank you. I'll now turn the meeting over to James Vanasek, Chairman of the Board.

Thank you, Holly. Good morning, ladies and gentlemen. Welcome to the 2022 Annual and Special Meeting of the Shareholders of Ceres Global. I am James Vanasek, Chairman of the Board of Directors of Ceres Global. Before proceeding with the business of this meeting, I'd like to take this opportunity to introduce the directors and officers of Ceres Global, who are in attendance today: Carlos Paz, President and Chief Executive Officer and Director; our fellow directors, Harvey Joel, Harold Wolkin, myself, James Vanasek, and David Rotenberg; Blake Amundson, our Vice President and Chief Financial Officer; and Holly Dammer, Vice President of Human Resources. Unfortunately, one of our directors, Thomas Coyle, is not able to be present today. We have 4 matters of business to conduct today: one, to present the audited financial statements of Ceres Global for the financial year ended June 30, 2022 and the auditor's report; two, to elect directors; three, to appoint Baker Tilly WM LLP as auditors of Ceres Global; and four, to vote on a resolution to approve the unallocated options and RSUs and ratify and approve the 2021 option grants under the Ceres executive plan. Once the formal business of the meeting has been completed, Ceres Global Management will provide a management presentation and will be available to answer questions from shareholders. I will now call the meeting to order. I'll preside as Chair of this meeting, and I ask that Carlos Paz act as Secretary of this meeting. Unless there is an objection, I shall appoint TSX Trust, formerly AST Trust Company (Canada), to act as scrutineers for the meeting through its representatives, [ Jordan Shafi ] and Megan Rocha. The Secretary has advised me that the notice calling this meeting, together with the form of proxy and Management Information Circular and the financial statements of Ceres Global for the financial year ended June 30, 2022 and an auditor's report have been sent to each Director of Ceres Global, the auditors of Ceres Global in each intermediary and registered shareholder of common shares of Ceres Global of record as of September 16, 2022, the record date for this meeting. Additional copies of this material are also available under our corporate profile on SEDAR at www.sedar.com. The scrutineers have provided me with a preliminary report regarding shareholder attendance at the meeting. The scrutineers report that there are present at this meeting in person or by proxy, 17 shareholders holding 16,646,127 common shares of Ceres Global. In addition, with the presence of VN Capital, I declare that the requisite quorum of shareholders is present, and I declare that the meeting is duly and properly constituted for the transaction of business. I direct that the confirmation of the mailing of the notice of meeting received by TSX Trust, formerly AST Trust Company (Canada), and the scrutineer's complete report on attendance of this meeting to be annexed to the minutes of this meeting. There are several matters that must be dealt with during the formal part of this meeting. In order to expedite these matters, I've requested that certain persons make and second formal motions, and I call on these persons at the appropriate time. Given the virtual format of today's meeting, we request that registered shareholders and duly appointed proxy holders who have specific comments or questions on a formal item of business, make such written submissions now by clicking on their messaging icon typing in and submitting their question. Please clearly identify the applicable item of formal business to which your comment or question relates. During the course of this meeting, at the appropriate time, such questions will be addressed. Following the formal meeting, we will have a question-and-answer session. If you have any questions not specifically related to an item of formal business to be discussed at today's meeting, please feel free to submit those questions at any time during the meeting, and we'll do our best to ensure that such questions are addressed at the conclusion of the meeting. We will do our best to answer all questions. But if for any reason, we are unable to do so during the meeting, we will endeavor to follow up after meeting if you have provided your contact information with your question. Given that this is a virtual meeting, voting will be conducted by online ballot for all matters. If as a registered shareholder or duly appointed proxy holder, you are using your control number to log in the meeting and you accept the terms and conditions, you will be provided with the opportunity to vote by online ballot. If you've already voted by proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, do not vote again during the online ballot. The polls will be opened for all items of business to be voted on at the same time. This will allow you to vote on each item immediately or if you prefer, you may wait until the conclusion of the discussion of each item prior to casting your vote. Once the polls have been opened, the items of business to be voted on and your available voting options will be visible on the voting panel on your screen. To submit a vote, please click on the voting choice displayed on your screen. Once discussion has concluded on all items of business, the polls will close. I now declare the polls open on all items of business. The first item of business is the presentation of Ceres Global's consolidated financial statements for the year ended June 30, 2022 and the auditors report, both of which have previously sent to shareholders of the corporation. Unless there is an objection, I will dispense with the reading of the auditor's report to the meeting. Hearing no objections, we will now proceed with the election of Directors. The number of Directors to be elected at the meeting is 6. I will now ask someone to nominate each of the nominees listed in the Management Information Circular delivered with the notice of this meeting.

I nominate those persons specified in the Management Information Circular delivered with the notice of meeting, namely Carlos Paz, Harvey Joel, Harold Wolkin, James Vanasek, David Rotenberg and Thomas Coyle to serve as Directors of Ceres Global to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and the bylaws of the corporation.

Mr. Paz, have any nominations, questions or comments come in from shareholders specifically on this item?

Mr. Chairman, I confirm that we have not received any nominations, questions or comments from shareholders, specifically relating to the election of Directors.

Therefore, I now declare the nominations closed. In order for each of the nominees to be elected, he must obtain a majority of the votes cast at this meeting. The election of Directors will be conducted by online ballot. As noted, if you previously submitted a completed proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot.

I would ask that all registered shareholders and duly appointed proxy holders complete their online ballot now by selecting the applicable voting options on the voting panel displayed on their screen. Please complete the online ballot by selecting the applicable voting options on the voting panel displayed on your screens.

I will give everyone a few seconds to do that. [Voting]

Okay. We will now proceed with the second item of business, the appointment and remuneration of the auditors of Ceres Global. May I have a motion that Baker Tilly WM LLP be appointed as auditors of Ceres Global until the next Annual Meeting of Shareholders or until a successor is appointed and that the Board of Directors are authorized to fix the auditor's remuneration?

I so move.

May I have the motion seconded?

I second the motion.

Mr. Paz, have any questions or comments come in from shareholders specifically on this item?

Mr. Chairman, I confirm that we have not received any questions or comments from shareholders specifically related to the appointment and remuneration of auditors.

The appointment of auditors will be conducted by online ballot. As noted, if you've previously submitted a completed proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot.

I would ask that all registered shareholders and duly appointed proxy holders complete their online ballot now by selecting the applicable voting options on the voting panel displayed on their screens. Please complete the online ballot now by selecting the applicable voting options on the voting panel displayed on your screens.

I will again give everyone a few seconds to complete that process. [Voting]

And now for the third item of business, as described in the Management Information Circular, the shareholders of Ceres Global have been asked to consider and have thought advisable to pass a resolution to approve all unallocated options and RSUs under the equity incentive plan and to ratify and approve the grants of all options under the plan since November 14, 2021. The Board of Directors believes that approval of all the unallocated options and RSUs under the equity incentive plan and the ratification and approval of the grants of all options under the plan since November 14, 2021 are in the best interest of the corporation. Details relating to the unallocated options, the grant of all options under the equity incentive plan since November 14, 2021, and the requirement for obtaining the foregoing approvals are contained in the Management Information Circular. In order for the foregoing to be approved, the resolution must be passed by at least a majority of the votes cast at this meeting. May I have a motion that a resolution in the form of a resolution attached as Schedule A to the Management Information Circular approving all unallocated options and RSUs under the equity incentive plan and ratify and approving the grants of all options under the equity incentive plans since November 14, '21 be passed as a resolution of this corporation?

I so move.

May I have the motion seconded?

I second the motion.

Mr. Paz, have any questions or comments come in from shareholders specifically on this item?

Mr. Chairman, I confirm that we have not received any questions or comments from shareholders on this topic.

The vote with respect to the approvals relating to the equity incentive plan will be conducted by online ballot. As noted, if you previously submitted a completed proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot.

I would ask that all registered shareholders and duly appointed proxy holders complete the online ballot now by selecting the applicable voting options in the voting panel displayed on their screens. Please complete the online ballot now by selecting the applicable voting options on the voting panel displayed on your screens.

I will again give everyone a few seconds to perform this. [Voting]

Finally, Mr. Paz, has any formal business come in from shareholders that may be properly brought before this meeting?

Mr. Chairman, I confirm that we have not received any questions or comments from shareholders, specifically relating to the appointment and remuneration of auditors.

Before I close the polls, I would like to give everyone again a few moments here to make sure that they have completed their voting online for the 3 matters that we've discussed previously. As there is no further business, I now declare the polls closed. The final report of the voting results will be made available following the meeting under our corporate profile on SEDAR at www.sedar.com. This concludes the formal business brought before the meeting. I wish to thank you for attending, and I now declare this meeting to be terminated. At this time, I will now ask our management team to make a presentation on the developments at Ceres Global. Following the presentation, we'll provide the opportunity for questions from the floor. Carlos, take it away.

Thank you, Jim, and thank you, everyone, for joining the call today. Look forward to share what is going on in Ceres and our plans for 2023. Now I will go to Slide 5. I'm going to start with what is Ceres. Ceres is a market leader. We want to be the top 3 in volume serving the U.S. and select international customers in our core products, which are oats, durum, spring wheat. We have evolved from a 5-year turnaround from Riverland then adding Northgate with a strong, stable position that now brings repeatable earnings. A significant improvement in our EBITDA has happened since adding grain origination to complement our terminal asset network. And you can see the graph on the right, the dots in red outline all our new origination facilities that we have added to complement all the terminal assets that we had in the past. We've also added a diverse and experienced team across all job families. In essence, what is Ceres? We are an enabler. We connect our farmer partners and our suppliers to customers around the world. No company has a position in North America that we established. We have deep customer relationships and a strong market reputation. We have a unique and diversified asset base with sourcing assets both in the U.S. and Canada. No one has this in the industry today. We've increased our farm origination and procurement, and we operate under attractive markets. We have consistent and high-quality demand. And now we have the ability to develop long-term regenerative ag solutions. We have optionality across our supply chains that are diverse assets. And we need precise trading and risk management to achieve our goals. Without this, we won't be achieving our goals. So we really want to make sure we're precise on this. We in Ceres add value across agricultural, energy and industrial supply chains. And we want to help achieve regenerative ag initiatives from our end customers. I will go through our complementary business segments on the next slide. Ceres today, we have 175 employees. We have 13 company-owned locations. We have a storage space of around 1 million metric tons, and we handle roughly 3 million metric tons per year, which is almost about 100 million bushels. We had an absolute record year last year, earning $80 million in gross margins. Here are our business segments. Some of you have seen this before. But every year, we put more emphasis on our core ag commodities, which I already stated, those are durum, spring wheat and oats. Our commercial activity, it's origination from Canada and Northern Plains, and this is anchor in deep relationships with domestic U.S. and international customers using our U.S. and in the future, Canadian export gateways. This is our core business, and this is where we continue to expand. We have a segment of complementary ag commodities which are products that are regional in scope, like organics and rye or a product like canola, that doesn't necessarily use all of the asset as a service that Ceres has. Canola has become a bigger product within our portfolio, but is essentially we originated around Northgate, and we supply mainly in the Mexican market and some U.S. markets as well. And we started to develop domestic trade within Canada as well. On the value-added operations to the right, we have ag processing. And today, our main product there is soybean mill and soybean oil derived from a crushing in Manitoba or Jordan facility. In the middle of the 4 squares, we have regenerated ag this year, which we believe is going to complement all of our business segments and all of our products. I will expand on that later in the presentation. But this is what our customers, our end customers are asking us to provide. On the non-ag supply chain services, it's a very Northgate-centric business. We handle products, natural gas liquids, NGLs, propane and butane, we handle lumber, fertilizer and industrial products. Given the strategic nature of Northgate, we import products to Canada and distribute it for Northgate where we aggregate products from Canada and ship it to the U.S. and beyond. I wanted to remind everyone of the strategic nature and impressive nature of Northgate. This is the grain terminal and everything else around it. We have a shadow loader facility in the BNSF. We have a warehouse of fertilizer that handles almost 30,000 tons. We have chemical transloading, we have crude oil and LPG transloading and we have industrial products that we transload at the facility. And we are no more than probably 500 meters from the U.S. border. It's an impressive place. But as you can tell us, there's plenty of space around the current infrastructure to further develop. And this is what our team is focusing on what can we add here to generate extra revenue and complement the current facility. On a grain merchandising overview, I want you to focus on we've accomplished at Ceres, which is in the north, we have the circles, these blue circles. At the beginning, we only had the one in the middle, which is Northgate. Part of it is strategic actions have been to increase direct farm origination in this area, which is where we operate. And you can see that in the past 5 years, we've added 4 new circles, and we're essentially missing one, and we're diligently working on finding a direct farm origination or partnership either in Canada or the U.S. in this area. Our objectives at Ceres are simple. We want to be the #1 company in durum, oats and high protein wheat in North America, all with the specific targets for each product line. We also want to maximize other ag-related businesses and opportunities near the origination of the core products. We have a unique strength at Ceres and I think you heard this before, but we're a big fish in smaller pond because our geographic allocation is small, our trade partners are all there, and we have the assets that complement this geographic and location, which means our company-owned terminal infrastructure and stable bonus, it's ideal for serving large customers in target regions. We're able to compete in scale and scope in the products that we handle. Our customers are large international companies. They want to make sure that we're able to compete relative to other companies. Being focused in the markets that we operate, we're able to achieve that and be competitive for our producer partners and their end customers. Now we're adding the ability to offer tailored solutions for our customers, managing their supply chain or in their regenerative ag space. Going a little bit in more detail around our soybean crush and our non-ag supply chain services. We have our plant in Jordan, Manitoba. It is the largest plant or the largest crush business in Manitoba. It is positioned to partner with local farmers and provide sustainability solutions to our strategic customers in the market it operates. We expanded our capacity last year on time and under budget, and we added storage for mill and oil to debottleneck the site. This year, I'm happy to report we had a renewable and biodiesel customers as a knowledge for soybean oil. And this is significant given the story around renewable diesel -- and mainly are on renewable diesel, and we're able to connect the dots, and this is the only crush plant in Canada that is able to sell soybean oil to these markets. And we're establishing key strategic initiatives regarding regenerative ag solutions within customers that we service. On the Supply Chain Services side, our propane business and butane business is positioned to grow with increases in NGL production in Southern Saskatchewan and North Dakota. We want to take advantage of this market dynamic to increase the volumes transloaded in Northgate. And you can see the picture of a car here getting loaded with NGLs. Lumber terms of volume provides additional order for Nordic Saskatchewan producers, and it has a steady growth. Fertilizer with Koch industries is experiencing stable growth. Chemical transload business continues to experience incremental growth. Our team is agile and operations are efficient. And as I said earlier, when I showed the picture on Northgate, we're always looking at ways that we can increase the volumes and businesses that we can expand in Northgate. This is easy to read a slide about the strategy progression from Ceres. The following slide I will provide more detail of the investment made on each of these periods. But essentially, we started around 2015, structuring key assets, hiring key personnel and selling some underutilized assets. In the second period, we became a traditional grain marketing company. We added complementary business, wanted to increase origination and added the right talent to help us here. Going forward, which is the blue, we want to be a solution-based grain marketing company. And as you can see, the return on equity for every period -- each periods have gone higher, when we expect to continue to go higher. We will restructure our asset base. We're going to be solutions-oriented, trading with key customers. We're going to enable the regenerative ag practices, and we want to maximize Northgate's full potential. Currently, growing our greenfielding facility is extremely expensive. So we want to continue to develop strategic partnerships, divestiture of underutilized assets or noncore assets and establish margin-protected trade flows. And by offering solutions that our customers want, we're able to accomplish that. This is a more specific story of Ceres, it depends on trajectory of earnings, which show a really positive trend. We just started around 2015, '16 with a formulation and implementation of current strategy. We formed our first with JV with CGB named Riverport, which operates in Savage, Minnesota in 2017/'18. 2018/'19 was a very busy year for Ceres acquiring Delmar grains, nature organic growth to increase our organic business as a complement to our generic business and form a key JV with Steel Reef named Gateway Energy Terminal and Northgate. In 2019/'20, we acquired Nicklen Siding elevator from Cargill, and this has proven to be a great facility not only for the team that we acquired, at the location and our ability to originate oats direct from producers and the spring wheat. In 2020, 2021, we formed the JV in Thief River Falls, Minnesota. And we increased Jordan by 50% the ability to crush. So 1.5x the times that it was crushing before. Thief River Falls is now expanded and is shipping unit trains or shadow trains, if you will, the equivalent of the [ CP railway ]. We've also added in '21, '22 by acquiring 50% of Berthold Farmers Elevator, LLC. This was a critical buy for us because it's in the middle of our trade territory, supporting our spring wheat and canola programs. Obviously, this does not include the crush project write-off because we're focusing on operating earnings. But even with the write-off, we had a pretty good year last year. But it just shows where have we come from and where we are today. So last year, we established some goals for 2022. How do we do in these goals? Our #1 goal was to operate safely and to be best-in-class. Our reportable injury frequency rate wanted to be below 2.0, and we ended up at 2.19. Very close, but there's work to be done there. Our disability frequency rate was at 0, and we wanted to be below point 0.2. So extremely good job here. We want to create a safety culture. We want to continue to do that. Pat Gathman, which is in our executive team. He's going to be leading the charge for safety in Ceres. And I'm happy to report when Tom Coyle, our new board member, joined and he visit all of our facilities, he was impressed with the safety culture that we have throughout our facilities. And we've done a fantastic job as we acquired new origination facilities to transfer the safety culture and layer from it and make it better as well. Goal number 2 was to retain and attract talent by being the most preferred place to work in the industry. We believe we've accomplished that. We did -- we want people that are engaged. We did an engagement survey. The results were great. We're above industry average. We're going to continue that. And I think a testament of that, we promoted for the key positions within the company, just showing the caliber of talent that we have in Ceres today. We want to maintain the trajectory of improved financial results. Our operational income was $31 million, again, a record for company history, which was about $27 million above budget. Another point was to identify opportunities to acquire or utilize grow origination assets. We closed the deal on Berthold Farmers Elevator last year, which I already mentioned is critical for our success, especially for the growing demand in Mexico for both the spring wheat and canola seed. We want to continue the journey on account management process and supply chain solutions. We're doing that by continuing our partnership with our strategic customers fostering those relationships and now driven by regenerated ag initiatives. We wanted to identify opportunities to increase Northgate non-ag business on profitability. We'll capitalize on the unique and strategic position we have in Northgate, and we added complementary business to what we currently have today. There's a lot of things in the docket here that we explored during 2023 and we will keep the market informed around those accomplishments. We wanted to successfully advance the Northgate canola crush project. That's probably the asterisk that we have last year. The project was suspended. It was an expensive exercise. But today, the project has not been canceled. We're possibly or responsibly approaching the market with shareholder interest in mind. And we will update shareholders on the market with any progress here. So what are the strategic initiatives for 2023 and our tactics around on that? We want to keep it pretty simple. We want to creatively partner to expand grain origination. Number two, we want to be very declarative to deploy regenerative ag solutions across the supply chain. We want to be thought leaders in this space. And number three, we want to maximize the earning potential of the network of assets that we have acquired. How are we going to create a partner to expand grain origination? We will partner with strategic suppliers and farmer partners to originate our core commodities, spring wheat, durum and oats, in areas of stable production and competitive access to rail logistics. That's exactly where you signed them up. Those are the areas that we have expanded, now what we need to maximize. We need to co-invest in existing business and joint investment projects with independent growers co-ops in key origination areas. Thief River Falls and Berthold Farmers Elevator, it's a testament to that, and we are looking at potentially expanding the capacity of one of the elevators in Berthold Farmers Elevator. We want to expand our leverage, existing assets to increase volumes and efficiency, already in [indiscernible], and we had deeper relationships with existing suppliers and JV partners to form long-term partnerships. We have amazing relationships with both third-party suppliers and our end customers. And I think this is something that we're going to explore this year and use creative solutions to expand our origination using this strategy. We'll continue to evaluate our asset mix and potentially sell nonstrategic assets to generate the capital for redeployment to more attractive projects. As I said earlier, we're going to be deploying regenerative ag solutions across the supply chain, and we're going to be pretty declarative about it. Why? It's not us pushing this to the end customer, but it's the other way around. As we have the strategic relationships with our customers, this is the ask from them. They want to understand this space. It's very confusing. It's a bit of a wild west right now, but they ask us to provide solutions that help them meet their end user regenerative ag goals. Everybody wants to participate on this. We want to simplify our model to provide those solutions. We want to connect the end user with the growers, and they want a consistent supply of these products. We can do all of that above at Ceres. But without a grower, we don't have a program. So what are they asking from the grower? They want transparency and ease of implementation. If it doesn't have value, if it doesn't make sense, there's not going to be in the farmers or growers that will participate. We want to be an advocate to promote grower practices that make sense then add value. And we need to communicate that to the end users because if the farmer is not getting paid, these things won't get adopted, and we got to educate that as well. And the farmer gets access to the end user as long as they are partner with Ceres. We, given our scope of our business and geography, we directly manage end users. We're not in the bean space, sending boats to soybean mills to China. Rather, we talk directly with end users, and we ask for what the needs are, and this gives the farmer the access to these end users to provide those solutions. And finally, why is this important for Ceres? We will capture increased value in our core commodity portfolio. We're not going to create regenerative ag solutions with the products we don't handle, but rather, we're going to make our products that we handle more valuable. This certainly strengthens the value proposition we bring to our grower, partners and our end users, all of the siding will become more valuable to both. And this will create a significant opportunity to differentiate Ceres from our competitors. Given our size and scope and the people we have in our company, we should be able to adopt this early and reap the benefits from participating on this. Next, I just want to highlight our simple model on how we're planning to deploy this. Starts on the top, starts from the end customer asking for solutions in the regenerative ag space, carbon capture or carbon offsets and IP solutions. We have 3 pillars to accomplish this. We have our local teams and the relationship with local farmers for growers. We have the right infrastructure in the locations in key areas where these products are grown, and we can satisfy the quantity and quality that our end customers' needs. But we also need a value proposition for the grower, which needs to be multifaceted. It's not always about price, but it's important. While we also provide risk management, we add operational efficiencies to their farming operations, and we will recognize the value they bring to end customers. There are farmers that really want to participate this, not only for the money, but because they believe they're helping the environment, and we have to recognize that. In order to ease, transparency and increase efficiency through the supply chain, we will use technology enablers. We are partnering with very interesting technology companies to allow us to do this in a more efficient manner, to track progress, to track quality all the way from the farm to the table. This is very exciting. We don't want to be a technology company, but we will partner with the right technology companies to offer these solutions. And what does Ceres offer? We offer a supply share diversity and freight optionality. This provides the security to end customers because we have multiple places to originate and store these products to achieve their goals. They don't want to put all their eggs in one basket with a group of farmers as an example. We're able to supply that, but we also have our terminal infrastructure that we can segregate and store the products they need. And this model, we believe, is what bring us success around regenerative ag solutions with customers. And how do we maximize, our third point, are there any potential for our assets? First and foremost, we maximize revenue by precise trading and positioning and maximize the asset utilization of our core products and our assets. This will lower our cost. We need to leverage our terminal network of assets to maximize the throughput of our origin elevators. This is unique for Ceres that we're able to put more volume for our internal assets, lower cost and do the same at our terminal network assets. We're going to segregate, identity preserve grain and regenerative ag volumes to meet the needs of our strategic customers. We can have reduced duplicative or noncore product line capacity to maximize intrinsic value of our assets. This just means we're not going to waste time in products that are not core for us because this increases efficiencies and lower cost. And we want to make sure we enable collaboration and teamwork amongst our product lines to reduce overall fixed costs and capitalize on incremental revenue opportunities. This is what we call in our values, owning the outcome. And the goals for 2023, which we'll be reviewing a year from now, are pretty simple. We want to be the safest place to work, but we'll use the same metrics that we used this past year. We want to be the most preferred place to work for our employees. Without attracting and retaining the right talent, everything else is impossible to accomplish. So we will put high efforts to make sure we have the right incentives and we keep on attracting the best talent in the industry. We're going to simplify our business model. We want to be cost efficient, managing our core products in order to achieve number four gross margin objectives. We're going to manage core products. We're going to focus on our processing plant, and we're going to maximize non-ag supply chain in Northgate. And fifth, which was the middle circle and when we look at our businesses, we're going to develop supply chain solutions driven by regenerative ag initiatives. And finally, we want to reposition the brand focusing on our cereal grains, our core products, supply chain management and regenerative ag practices. Finally, I wanted to show our new faces in our executive team. As we spoke earlier, we wanted to promote from within. The only person and executive team that came from the outside and she's doing a great job is Holly. She's our Vice President of Human Resources. The rest of us have been Ceres employees. Pat Gathman was the only one of our executive team last year. The rest, we've all been promoted from within. I can be proud that we have the talent and the personnel in Ceres to be able to achieve greater jobs and to be able to achieve our goals down the road. So very happy to work with them and take Ceres to the next level. With that, I'll open the call for questions. Thank you.

Holly, I believe you're reading the questions.

Yes. We have one question that has come in and Mr. Vanasek, I'm going to direct this toward you. The question is around our net asset value. And the question reads, in 2013, Ceres had a pretty consistent discount of 20% or 40% to our net asset value. Now in 2022, the stock trades at almost 100% discount to net asset value. And the overall question is what plans does VN Capital, the Board and the current management have to narrow this gap to the net asset value and ensure the stock trades closer to its NAV?

Thanks, Holly. Yes, what -- I think there are a couple of points to that question. Obviously, no one is more frustrated with the stock price than I am as the co-owner of VN Capital. And no one has it affected more than we do with the number of shares that we own. I think that there are a couple of items that sort of describe that discount. First of all, obviously, the limited liquidity in the stock. There are 4 holders that own close to 80% of the shares. Another couple of other holders, if you add them, bring us up to about 85% of the shares. So only 15% of the shares are really actively traded. So it's a very limited float. Given that there's limited float, when one shareholder decides to sell, it can drive down the shares substantially. And unfortunately, given the losses that Ceres had under the regime of Front Street, the fact that the company is in a negative equity position -- book equity on its balance sheet -- [Indiscernible] negative stated capital on its balance sheet under TSX rules prevents the company from buying back shares or issuing a dividends, which are 2 of the natural ways that the company could resolve that discount. The Board is very aware of this. The Board spends every meeting looking at ways to try and eliminate discount from a corporate governance side of things. Ceres has 3 independent board members and there are 2 representatives of VN Capital on the board. So even though VN Capital has a majority of the shares, we do not have a majority of the board seats and the Board members act in a very independent manner and act for the best interest of all shareholders, not just those, including VN Capital. So -- and then the second part of how to eliminate that discount is simply better execution. If you go back a year ago, Ceres stock was trading at much higher value, and with the pausing of the crush project and the write-off that we took obviously caused some shareholders to sell, which had an outsized effect on our price. And if we just keep executing better and execute on the plan that Carlos has laid out here, gradually, the market will see that Ceres is performing, and that discount should close back up. So I think, like I said, the Board is constantly looking at ways on a strategic level to eliminate that discount and the management team is well in executing their plan. Hopefully, by doing both, that should resolve the issue.

I'm not seeing any more questions at this time.

All right. I guess upon no more questions. Like I say, we encourage you to sort of look at Ceres financials, our recently reported quarterly earnings announcement, our MIC, our annual information form for the details on the company. I want to thank Carlos and his team for putting together the presentation. I also want to thank the team from Lumi for setting up this meeting virtually. And appreciate all the shareholder support over the past year and look forward to hearing from you during the course of this year as well as at the next annual meeting. So thank you very much, everyone.