Desert Control AS ($DSRT)

Hello, and welcome to the Desert Control 2026 Capital Markets Day. It's great to see so many long-term investors and so many new faces on this call. We have with me today our Executive Chairman, Lars Eismark; our CFO, David Borah; our Managing Director for the U.S., Marty Weems; in addition to Evan Hazlett, Senior Director of Product; and Jan Vader, our Chief Innovation Officer, who will be available during the Q&A. It's been a really busy time since we talked to you last, incredibly busy since February, and we'll be touching on all of those things during the course of the presentation. And the presentation is quite detailed and quite long. So we are going to try and move through it expeditiously and provide the material that investors have been asking for, and we will try and answer a number of the questions that were sent in early during the course of the presentation. As we said, it's been busy. And I have to tell you, it's been busy on all fronts. It's been busy on the personnel front. Since our April meeting, we've added our CSO, Mike Canady. Since the February meeting, we've done a ton of pilots. And this morning, we put out a kind of a brief press release, bringing people up to speed that we're increasing our expected number of pilots through the end of June and also that the new production system is in its final days of coming out of the factory. So a lot going on. I'm super excited. I hope that at the end of the presentation, you'll share my excitement. And with that, I'll turn it over to our Executive Chairman and my boss, Lars Eismark.

Thank you, James, and good afternoon and also from me, welcome to Desert Control's Capital Market Day. My name is Lars Eismark, and I've served as the Chairman of Desert Control since November 2024. Benjamin Franklin once said, when the wells dry, we know the worth of water. And I can't think of no better way to frame the purpose and mission of Desert Control. Water is already a scarce resource, and the latest analysis from the United Nations confirm that, that trend continues to worsen. We must adopt new approaches to preserving water and just as critical, ensure we extract the greatest possible value from every drop we use. For more than a decade, Desert Control has been developing water-saving technologies. Our liquefied natural play has proven itself as a powerful mean of preserving water with applications across agricultural landscaping that consistently delivers results. The solution does more than reduce water consumption dramatically. It also improves crop yield, enhances produced quality, lowers the energy required for irrigation and delivers a wide range of additional benefits to our customers. While the company's history spans many years, I can objectively say that the vast majority of impactful changes at Desert Control have been implemented over the past 12 months. We focused on things to [indiscernible] and instead migrated all our focus and resources on the sharp focus we now have on our priorities on what good looks like. A few examples. We've refocused our go-to-market strategy to the Southwestern United States, where permanent crops in California and Arizona alone represent an addressable billion market. We've launched highly successful applications within the [indiscernible] segment and across a broad range of crop types. We've consolidated our R&D capabilities into a single location and reinforced it with world-class scientific leadership. And we've significantly expanded our sales force in both in our home market, targeting the segments where the match between our technology and the customers need higher yield, lower water cost and more value from a declining water supply is most compelling. Most recently, we've taken delivery of a new production unit that increased our output capacity fourfold, and we've substantially scaled and upskilled our field operations. At the same time, our partnerships with Siemens and Syngenta are stronger than ever. Our research program with leading academic institutions continue to expand and water authorities in California have certified our technology as eligible for attractive customer subsidies. And lastly, despite a tough geopolitical situation, our license partners in the Middle East is making promising progress and the ambitions are intact. So today, Desert Control is ready for expansion. The foundation for growth is firmly in place. We know what to do. We know what good looks like, and we know how to get there. So over the next hour, my colleagues will take you through the full Desert Control story and explain why we are so confident in the journey ahead. Please enjoy. James, over to you.

Thank you, Lars. Next slide, please, Ari. And actually, before I start, I do miss one administrative matter in my preamble, and that is that we will be taking Q&A at the end of this session, and we've already received several questions. But if you have questions you want to submit during the presentation, please e-mail them to David Borah, our CFO at [email protected], and we'll be sure to get those in the queue. Thanks very much. Next slide. So as Lars pointed out, water is a scarce resource and getting more scarce. And those of us who have been involved in Desert Control have held that as a primary mission for the company since its foundation, certainly since our involvement. And water is a problem locally, nationally and globally for every citizen in the world other than maybe Greenland. And so we have either too much water or too little water, too high-quality water, too low-quality water. And our focus is clearly where there's not enough water where the quality is low. And I really feel this is a significant part of the story because this is a huge tailwind for everything that we do at Desert Control. We have a market today that exceeds anything we could imagine about capturing and that market will only grow as time goes through. And we are relevant where water is both scarce and where water is expensive, and both of those trends continue. Next slide, please. So for those of you who have been around a long time, I apologize, but for new people, I do want to go through the fundamentals of what LNC is. First, I want to point out that the idea of adding clay to sandy soils is not our invention. In fact, it's been around for Millennium. [indiscernible] were doing this at the [indiscernible] thousands of years ago. The USF Food and Drug Administration has a recommended amount of clay to add to your sandy soils in your garden, which is 20 to 50 tons per acre. So clay in sandy soils is a well-documented idea and a proven idea around time and around the globe. The technology at Desert Control is to create a method of applying clay to sandy soils that are already planted without disturbing any of those plants or requiring any additional infrastructure. Through our technology, we micronize clay by blending it with water at very high forces and turn it into a highly charged mixture of microparticles that can be out through the sprinklers of a customer and percolate into the sandy soil of that customer with no killing and no change to that customer's existing infrastructure. And as that clay migrates into the soil, it sticks to anything it finds, whether that's roots, sands, even worms, and it forms a soil structure that allows it to retain water and provide that water to the roots of the plant. In retaining that water, it also retains the nutrients in that water. And so there is a symbiotic relationship there. And further by retaining the water, the fertilizer and having the plants grow, you get more organic matter in the soil, and so you actually improve soil health. So LNC has multiple benefits, both short and long run for our customers and for the earth. Next slide, please. So I get asked, why do I like LNC? And I say, well, why do farmers like LNC? And so the real points here are we don't disrupt their existing vegetation. And this is critical because a very large number of acres around the world are already planted with trees, forests, turf, et cetera. And this technology is applicable to all of them. As I pointed out on the earlier slide, there's also no capital expenditure for the customer to use LNC. We use existing infrastructure in all cases. And so they don't have to change their farming practices or invest in new infrastructure. And importantly, I think this is really important, this last thing on the right. We are putting back into the earth something that came out of the earth, something that is organic and something that is not chemical in nature. So from even an organic farmer standpoint, that's critical. But from a regular farmer standpoint, the question of toxicology is just not on the table. LNC is a safe, easy to deliver product that pays big dividends. In all of our trials, we see 25% to 60% water savings, which generates depending on the farmer's cost of waters, a 2 to 5x on their return on their investment and a payback period of less than 2 years. And as I pointed out, on the prior slide, the presence of the LNC by reducing water need also reduces fertilizer need and improves soil health. So this is a triple win for the farmers. Next slide, please. So which kind of farmers are we looking for? Well, we're looking for farmers who have sandy fast draining soil. Our technology works best for those customers who have the most acute water problems. Here in Connecticut, where I sit, we don't have water problems and we got a lot of clay, and we have no customers. But in large parts of the world, those most thirsty, they tend to have the most sandy soils. Those soils drain very quickly. They frequently have very high water cost. They don't have enough water. And these are our target markets. And because of the product attributes of being able to go out through an existing irrigation system without impacting the soil or the root system, we are targeted on agricultural crops and landscape, and we're targeted on particularly permanent crops, almonds, pistachios, citrus, dates, wine grapes, and I consider golf courses essentially a permanent crop of grass. And these are also the most water-intensive crops and the highest value crops across most things. I'm going to take a question here that -- or I'm going to answer a question we get a lot. What about corn? What about soybeans? What about [indiscernible] crops? And those are not target markets for us at this time. They tend to be much less valuable. They turn over at least once a year, sometimes 6 times a year. And so they're really not targets for us at this point in time. Next slide, please. So speaking of a place that has a lot of sandy oil and grows a lot of high-value crops, we're very focused on California, as you all know. And we're really focused on California for the reasons of water cost. California is one of the highest cost water states for us. And it's also a state that has a number of regulations that affect the marginal cost of water. And I think when you think about Desert Control, what's really important is to think about the marginal cost because we're saving that 25% off the top. So even if someone has free water for the first 50%, if they have expensive water for the second 50%, they are a candidate for us. And California is a state that has higher prices for increasing use. So we are targeting high water cost situations. We're targeting high-value crops. And importantly, I think in the middle part of this slide, it's important that we all remember that there are a number of things going on certainly in America and certainly in the Southwest around water supply. For those of you who [indiscernible], at least if you've tried to ski in the Rockies this year, you'll know there's very little snow. The snowpack in the [indiscernible] Sierras and Rockies is around 20% of normal, so at historic lows. For those of you and some of our Norwegian shareholders follow this very closely, the law of the river, which determines the Colorado Basin allocation of water is up for expiration this year. There are ongoing conversations. I think it will be a long process to be fully refined, but everyone knows there'll be less water for everyone. And importantly, for us, there'll be less water for California. And then finally, in California, specifically, there's something called the Strategic Groundwater Management Act, which limits the amount of water that farmers can take even out of their own wells to preserve the overall aquifers. So here, we have a very good reason why we're targeting California, high water costs, poor water availability and high-value crops. Next slide, please. And while we're very focused on California, which I think you can see on the left here, is a $5 billion-plus market. In fact, it's probably the single largest agricultural market in the world, at least by square mile, and we're focused on our original home market, Arizona. This is a massive global problem, and we are only dipping our toe in that through our partnerships in the Middle East, but you should expect that everyone has sandy soil, everyone lacks water, and we will get everywhere eventually either directly or through partnerships, and this is a massive global market. Next slide, please. So this slide is really an attempt to answer the question that I ask myself and that I get from investors, and that's the why now question. Desert Control, as Lars pointed out, has been at this for a while. And why is it that I'm so excited about the company today. And I think the way to look at that is really in 2 halves, a foundational path, which is the left side of the slide, which covers our history and in some ways, could really just be labeled pre-November 2025. And this is the time we spent doing the hard work of research and development. This is the time we spent building the technology to deliver the product. This is the time we spent with our early validation programs. This is the time that we spent really convincing our very earliest trial customers to be part of the journey. And this is all also the time we spent before entering the California agriculture market. And this is the foundation on which we have been building. And as I say, it's really since last November. So why now and what's different? So the simple fact of the matter is the pivot to California has been hugely successful. And if you look at the level of activity across the company, not just on a single activity, but across everything we do, it has accelerated dramatically. Customer interest is way up. Customer trialing is way up. Utilization is way up. Team members to meet all that demand is way up. And we are just seeing an acceleration in what we do, including on the scientific front, where we are pursuing ever more research trials. In fact, I think we're doing a pistachio research trial tomorrow, having done almonds and lemons earlier in the year. So why now? We're exploiting the history basically. This is the moment in time where we can take all the hard work that was done in the past and apply it to a market that we think is fantastic. Next slide, please. So this is my favorite slide in the book. It's so good. You're going to see it twice. But this, I think, literally captures that acceleration that I was talking about on the prior slide. We are so busy. Marty, I'm sure will mention it, our crews are tired. We are running them pretty hard. And so I won't dwell on this too long, but the leading indicator of our business is customer trial and customer trial in the first half of this year has been accelerating. And frankly, this slide is now out of date. As of last night, we picked up another trial. So I'm excited about this slide, and you're going to see it again. So we'll move fast at this point. All right. Let me move on to kind of some of the basic technology for those who are new. For some of you, I know it will be a little bit repetitive, but I think these things are really important and worth knowing, and we're going to bring in some new information. Next slide, please. So as we say, we are not an agricultural company. We are a science and technology company that operates in the agricultural space. And so you're going to hear a lot about that in the next few slides. But before we even apply the product to a customer, we go out and we test their soils, we test their crop types, we reference our historical database to figure out whether we think we can help them. And the answer is not always yes. There are a number -- that trial number would be even bigger if every customer that we have interest from meets these criteria. And having done that analysis and creating our formulation in the middle of the slide, we bring to the party a piece of production equipment. This happens on site. We make the product fresh and we put out immediately through the customer's irrigation system to water the plants in the ways that they water their plant. So if they're using big sprinklers and covering a big area, we go straight out and we wet as we call it, their spray pattern. If they're using microdrip irrigation, we go through that and just wet those microdrip patterns. But the process is so important. It's data-driven. There is a manufacturing, a proprietary manufacturing element to it, and it does not disturb any of the existing farmer activities or philosophical. Frankly, every farmer thinks they know the best, and we can help them all out. And so next slide, please. So one of the questions we get from investors, I'm going to try and answer here is how hard is this logistically? And the answer is it's nothing, but it's not that complicated. When we talk about adding clay to soil, some people remember the guidance from the Department of Agriculture, which is 20 to 50 to even 100 tons per acre. We typically apply 1 ton of clay per acre, and that's a fully wedded turf kind of acre for something like an efficient pistachio orchard that may be 1 ton per 5 acres of treated soil. So these are not large amounts relative to the recommended dose and they're also not large amounts relative to what farmers are used to dealing with on the fertilizer or other input side. It's not a visual, but let me give you this. An acre of land is about 44,000 square feet. The pallet that you see on this slide is 16 square feet. So as far as how do you put one of these pallets and get them out of the way, they're very, very small relative to the size of the operation. The other part of the things that people get a little bit concerned is kind of the logistics of moving the clay and the truck and the equipment, et cetera. The clay is shipped for larger jobs directly from the provider to the farm site or the golf course as it was at Berkeley. So the logistics here from a clay standpoint are pretty simple. And as we've shown before, the production units are towable by a pickup truck. And this is quite intentional. The early units built in the Middle East were in a containerized basis and required a tractor trailer, which is not exactly the most nimble thing on a farm. Whereas our new units are fully portable, can be driven down highways and more importantly, be driven on to the sandy surfaces that we find at our customers. So from a logistics standpoint, this is not particularly complicated. Now next slide, please. That is not to imply that this is easy or that what we do is in any way simple. We have a lot of intellectual property tied up in what we do. We have a lot of knowledge and data tied up in what we do because to do this, we begin with something called the DC portal, which is our proprietary information system, which captures all of the machine information from every job. And therefore, I'm not going to say AI. I'm not even going to say big data, right? But is a learning module, whatever the right way to say that is, the DC portal enables us to deliver better and better quality every time we go in the field. And we can do this anywhere in the world. The system is developed in such a way that these units can be monitored, even fixed remotely from a central monitoring system. In the middle of the slide, you have our pickup truck and our trailer. And that doesn't necessarily look that complicated. But let me assure you, we are not spending $500,000 a piece on the things that are on the trailer because they're just plastic tanks and some tubes. There is a lot of underlying technology inside our production units and technology that has to be incredibly robust because we operate in very difficult environments. As I think Lars can attest, we were out in Palm Springs and the crew was working in 120-degree weather and in a dusty situation. So these units have a lot of technology inside. And the main and sexiest part of that technology is the technology that we get from our partner, Siemens. We are fortunate to work with Siemens at a very high level. They have sponsored us each of the last 2 years at their booth at Climate Week and the Consumer Electronics Show. And they provide us amongst their most innovative products under their software-defined automation technology. And so again, we are able, and this happened last week, to reprogram these machines from Norway to Palm Springs in the field. So it may be look easy, but what's going on here is not easy. Next slide, please. So farming is a tough business. So this is another question we get from people, what are you really doing for farmers and farming is a tough business. And so farmers are really only interested in any product if it can help them make more money. And so why are they interested in our product? And fundamentally, they're interested in LNC for one and/or all of a number of its benefits. For certain farmers, it's simply enough we save water. They have enough cost of water or scarcity of water that all of the math works purely on water. For other farmers, they're worried about their soil health. And soil health is a topic that I would say 20 years ago was all of the academics and the organic farmers. And today, every farmer is worried about their soil health because they understand that if they feed the soil, they get better plants than simply pouring fertilizer onto the plant. And so we see farmers wanting better soil. We also see farmers who appreciate that holding water and nutrients gives them not just more plant, but can increase the quality of the fruits of those plants, whether they're dates or almonds. So we have people who are interested for those reasons also. And the good news is we provide all of those benefits. So any farmer who just wants one, we'll give them one. If they want all of them, we can give them all of them. And so we help them reduce their inputs. We can increase the value of their crop. And importantly, as I pointed out before, this is easy for them to do. There's no risk from a CapEx or infrastructure change. Next slide, please. So I get asked a lot, well, who else does this? And the answer is, look, we're a soil amendment company at the end of the day, and there are plenty of other soil amendment companies. But we don't see anyone else doing what we do. We don't believe there is or will be in the short run, for sure, anyone else doing what we're doing. And we think that LNC has benefits relative to its ease of use, its cost of adoption and its impact that exceed the benefits the of the product. So one of the key ones is this nondisturbance of soil to apply a soil amendment to an existing vineyard orchard is not impossible, but it's certainly not as easy as having us come through your sprinklers. Next slide, please. So what does this mean, I think, from a farming standpoint, and this is an example of a date farm. And just -- I mean, I think the real point here is that the farmer can get return at multiple layers, either through direct water costs through the energy cost of pumping that water or through the nutrient costs. But I kind of sum this up as if you save water, good things happen. By saving the water, you have to pump less water, you have to add less fertilizer, you need fewer people to add the fertilizer and pump the water. You have less wear and tear on your CapEx. And in some of these basins, again, with this groundwater management acts, you have less regulatory burden or oversight because you're actually meeting your water targets. So while we talk mostly about saving water, I think for farmers here, saving water and they understand it is good in all kinds of directions. And I think the slide speaks for itself. Next slide. So obviously, we're not the only people who think LNC is great. We're not the only people who are out promoting LNC. We have been fortunate to be engaged with a number of global organizations who find this idea attractive. I think I've touched on our partnership with Siemens, with Syngenta, we're in crop trials, one in Eastern Colorado and one in the Middle East. Interestingly, the one in Eastern Colorado, which is a 2-year trial and went down last spring during a snowstorm. They've already been notified this year due to the low snowpack in the Rocky Mountains that, in fact, they're going to get water restrictions. And I'm hoping that the water restrictions they get are sufficient water for the LNC crops to do well and insufficient water for the non-LNC dated crops. But we're quite active with a number of interesting groups. I do want to point out one in particular on this slide, which is the Los Angeles Department of Water and Power. These are the people who provide all the water to the greater L.A. area and the district in which our first Golf customer, Woodland Hills Country Club resides. The L.A. Water District has a very active subsidy program to reduce water usage that we qualify for that well -- the customer qualifies that Woodland Hills will qualify for and will receive significant rebates. And I think it's indicative of the opportunities we have both in Los Angeles and California and more broadly to participate in some of these programs where our customers can actually get either tax refunds, cash money in their hands or tax deductions for using our products. And that's an area I think we will see more about nationally and globally and from the company. Next slide, please. So I get a lot of questions about why you, how many others, et cetera. And I want to really touch on this, and it is a busy slide, so I apologize. But we are building a moat around LNC that is not based on a single item. This is a process that has taken us years to perfect. It's a process that's protected through our knowledge of the production technology, but is as protectable through our knowledge of the inputs and the crops and the history of soil types we've treated. And so I like to say that it's hard, and we're paying the cost of doing it. But having done that, we will have such an advantage from a data and know-how and execution standpoint that I feel very good about the standing of Desert Control in this market for a long time. Next slide. Okay. So now let's talk about the market strategy a little bit. Next slide, please. So for those of you who have been on a long time, again, you know that we have a direct model in the U.S. and an indirect model in the Middle East. For those new to the group, we have previously been direct in the Middle East and chose to go distributor in the Middle East. And as we are direct in the U.S., we offer 2 business models within that. We sell a product upfront. We come to your farm, you tell us how many acres you want to do. We calculate the amount of product that will be required and we give you upfront price. That's typically a per acre price, but it's really from our end, a per liter price. We tend to think about this as our cost of goods or the cost of goods of producing that liter of material we apply. And so we price the product currently at that point. I think we will begin to value price a little more and more over time or particularly in the golf segment, we offer the product as a pay as you save. We have sufficient confidence in our technology that will literally come and apply it for free, and then we will take a share of your savings on your metered water bills. One of the great things about golf courses is they tend to have a very accurate count of their water costs, and so we're able to share those straight up. In the Middle East and in other countries as we expand into certain ones, we are distributor-led. And this is quite clearly you need local contacts, you need local personnel and you have to deal with local water conditions and other things. And there, it's a capital-light model. And we have 2 great partners, soil, exclusive in the UAE and soil and Saudi Desert Control, nonexclusive in Saudi Arabia. Next slide, please. So this is also in response to investor questions. We get questions about, geez, isn't this a CapEx-heavy business? Wow, these machines cost $500,000. That sounds like a lot of money before you get paid. And I don't mean to trivialize $500,000 at all, but they're expensive because they're sophisticated. We do expect that cost to fall over coming units. I don't think it will get below $300,000 because there is a lot of hardware in the machine. But am I at all worried about the price of the units? And the answer is I'm not. So these units are capable of producing 90,000 liters of product an hour, which at $0.05 a liter, which is our typical price is $4,500 an hour. And if you run them 8 hours a day, it's $35,000 a day. And if you do that 250 days a year, you end up at $9 million of potential revenue per year per unit. And so even though these units cost $500,000, they have the opportunity to generate a tremendous amount of revenue. And at our projected gross margin of 60%, that's a lot of profit contribution. So the way we think about this business is we think that the business will have utilizations of 30% or 40% only. I think about that way because we do have some geographies we have to cover. We're in the agricultural business, which has some seasonality. So I don't think the machines can run 100% or even 70% utilization. But if you look on the right and you look at our expected utilizations of 30% to 40%, you will see that the payback periods on these machines remain very low, measured in months. And so I just want to -- we get that, aren't you CapEx constrained? And I do not see this business as CapEx constrained at all. Next slide, please. Okay. We've talked a lot about California, and we've talked a lot about why we're targeted in California, but I just want to spend a few minutes here because I said earlier on that we're talking about the marginal cost of water. And I think it's really, really important that people keep that in their mind. There are certainly customers who have an average cost of water because they pay one price regardless of how much they use, and then we can just do the math using that. But many, many, many of our customers are in what's essentially a tiered water pricing, and that can be a smooth curve of it goes up 20% every time you use more or it can be a steep curve where once you hit a cap, water becomes very expensive. And so you have exceeding costs in California in places of over $1,000 an acre foot when they go through their caps. And even to avoid going through those caps, they have to buy water in the spot market. And not surprisingly, when they need water, largely everybody else needs water, too, so the spot market price can be high. So as we think about targeting and who to call on in California, we're obviously looking for people who use a lot of water and have a high cost of water. And on the right-hand side of the slide, you can see that dates are almost the perfect example of both of those things. They're highly thirsty and generally, they have a high water cost depending on the exact farming conditions. But also citrus, almonds, pistachios, all of these crops are sufficiently thirsty and enough of them are planted in high-cost water zones at their targets. And we've tried to give you kind of a representation that if someone has a marginal cost of water over $300 an acre foot and a crop that uses more than 3 acre feet per year, they're a pretty good target for us. So we need this kind of targeting as a little company. California is -- there are 4 million addressable acres for us and 40 million acres at least in total. I mean we can't be out calling on everybody we needed a target philosophy, and we've got one here on these 2 metrics. Next slide, please. All right. So California, California, California. One more point on California that I think is really quite important, right? It's really concentrated in particular geographic areas, at least for us in our technology. California and our focus on these 2 regions, frankly, is the reason for the acceleration of the company in the last 6 months. Here, we're targeting or highlighting 2 particular basins, an area on the bottom of the page called Coachella, which is just past Palm Springs for those of you who know your geography, which is unbelievably sandy. And then the southern half of what's called the Central Valley, Fresno, Kings, Kern, Tulare, Madera and I know Stanislaw counties, sometimes referred to the San Joaquin Valley. These are our target markets and the density of agriculture is really impressive. And many people on this call are European, and many of these people are also from big cities in America. And until you go to these places, and I grew up in a farming area of Oregon, but nowhere near like this, until you go to these places, it's impossible to appreciate the density of farming. In fact, after our last Board meeting in April, I took 2 of our directors, who are probably listening in, on a tour down to the Central Valley, and I think that they were suitably impressed by the quantity and quantity and quantity and quantity and you just keep driving and there's more agriculture. And this is hugely important to our success. I was down in Coachella last week during one of our Limoneira applications. We've been very active in both Coachella and in the San Joaquin Central Valley over these months since February. And these markets are very big. In Coachella, it's actually a particular phenomenon that you have some very big farmers in that area. And in speaking with the sales team and going through the list, we're pretty confident that we're already doing pilots for 5 of the 8 largest growers in Coachella. And so this is a great thing. The other thing is that the density is really good for utilization. Not to talk too much out of school, but we have an operating base in Yuma, Arizona. So when we did the Berkeley golf course, we had to drag the equipment 1,500 miles. As we penetrate Coachella, which we can do from Yuma, that driving distance comes way down. And as we build, as I think we previously announced our second operation base at Bakersfield, which is in the center of the center dot there, those drive times become very low. And just alone, they will increase our capacity utilization and our effective capacity of even the units we have today. So this has been a transformational thing for the company. And we got a lot of work unless anybody is concerned that somehow we only have 2 basins. Let me assure you, there's more business there than we're going to get to for years. Next slide, please. I think I would be remiss if I didn't touch a bit more on our Middle Eastern partners. We have 2 very good partners there that we've had for a couple of years now. This is an area we remain quite hopeful for. The soils are wonderful from a desert control standpoint, but there's a very big difference in the marketplaces. So I pointed you guys to California. There are literally tens of thousands of farmers in the Central Valley of California. Not surprisingly, in the Middle East, it tends to be much more centralized. If you look at these markets, they're heavily dominated by either directly to government or indirectly by government-owned or sponsored enterprises. And so we have partners who are parts of that system, and they continue to push. We think they're in contact with the right people, and we see good results from the technology when applied, but it is the normal slow morass of governmental activity, and it is particularly highlighted or slowed down at the moment by a little thing called the war. So we remain committed to the Middle East and our distributors, but we're still waiting for the big breakdown. Next slide, please. And with that, I will turn it over to my partner in crime here, Marty Weems, our Managing Director for the U.S., who, as I say, is working pretty hard these days.

Yes. Thank you, James. I'm excited to be talking to you about unlocking commercial scale at Desert Control, especially here in the States. Next slide. So a bit of context first. So agriculture adoption, it's reference-led and proof driven. We often talk to our customers about moving at the speed of trust. So we need to start with evidence. We need to provide them proof, and that's about their crop on their land with their water. But at the same time, we need that third-party validation, and we have those relationships in place as well. So commercial scale, therefore, follows validation and the pilots create the evidence base required for larger deployments and that wider market adoption. And we'll talk more about how that ultimately builds to a flywheel for us. Next slide. So we have a sales process that is building this commercial flywheel, and we believe we are at our commercial inflection. Now it takes a little bit of time to develop these relationships and develop trust in a product that is new to our customers. They get the fundamental soil physics very quickly. But it's not a -- there's no competitor in the market educating our customers. So we need to educate them and build that awareness and initial discussions over a couple of weeks to maybe 3 months. And then the first thing we need to actively do at that point with the customer is this pilot engagement or a trial. Now it's not just about putting LNC on the ground, but probably more importantly, we're putting in soil sensors and different data capabilities. We're doing lab tests on their soil. And we're bringing them value, bringing them information about their soil and their cropping opportunity that maybe they haven't seen before. But it gives us an ability to give objective measure quickly to the success of LNC in that customer's soil. And then we're moving into the commercial engagement at somewhere around 3 to 6 months in, we're beginning that process. Now when we apply LNC has to have typically a little bit of specific timing. If they're in the middle of harvest per se, they don't want to have us in there in the middle of them trying to harvest the crop. So sometimes we're waiting on them or they're waiting on us as we're quite busy these days. And we have to get to the folks we've already committed to before we get to them, and then we also need to work the schedule to make sure that we fit with the reality of their particular crop or their schedule as a golf course. Remarkably, our customers have been really flexible with us and a lot of that. So I'm really amazed with how our operations team has been able to just consistently keep the book filled with activity. I think we've had 3 trials go in this week. Just in the past few weeks, we've had both our commercial scale production machine as well as our trial scale machine going in different places at different times with different customers. And that's a completely new thing for us just this past quarter to be able to be working in different places with different commercial customers at different times. And then we transitioned into full site rollout with those customers. And I get really excited about ones like Oasis Date, Marta's Garden that we'll talk about a bit more because they've not only purchased at commercial scale from us, they are repeat customers now. Next slide. So we've -- it's been important through this process of building trust and creating this validation maturity across applications that we need to do it crop by crop, region by region because a golf course operator is not concerned with how great LNC is for almonds and an almond grower is not concerned with how great it was at the golf course. They want to see evidence that's relevant to them. So other customers that look like them are the case studies they want to see, the data they want to see and then they want to see an experience on their own property that looks similar to that. So golf and dates is where validation is most robust at this point, and we're really excited, especially now that we have the both Woodland Hills Country Club and Berkeley Country Club jobs are complete, seeing great results with both of those. And then with dates, we have 2 large commercial -- not only commercial customers, but repeat purchasers in both of them with Oasis and Marta's Garden. In citrus, almonds, orchards, pistachios, we continue to build that validation, and we expect to have much more complete validation over the coming 12 months. Next slide. So I'm more excited than I've ever been because of this rapidly growing pipeline. In my -- I've been with the company 3.5 years, in the early year, it felt like we were begging people to give this thing a try, and it was just so hard to get like 5 trials in a single quarter. Well, now you can see here, our trial pipeline has absolutely exploded, and it's entirely because we have stepped into the right market with the right targets at the right time. So I'll call out that we've not -- you know you're on target when things start converting. So one is from fiscal year '25, we've seen a 60% win rate with these, what I would call Tier 1 pilots where we are absolutely on target. They have expensive water. They have the right crop type, the right soil type, and they're a big player. They're influential, they're large, and they take their business very seriously as a business. So in those situations, and there's a lot of them in front of us, now that we know what good looks like, we've been able to land an extraordinary number of pilots just over this first half of the year, as you can see with the 28 there in the first half of '26. And we actually added 2 more golf courses just yesterday as pilots. So I mean it's just extraordinary what our sales team has been able to accomplish here in the first half of the year, a lot of enthusiasm, a lot of people talking about LNC and trying to get more understanding of it. So those investors who have been with us a while, have heard about Woodland Hills and Berkeley Country Club. We made -- after Woodland Hills, we went back to the drawing board a little bit and made some fantastic improvements to our production processes and our application processes and how we integrate with the customers' irrigation system. And that led to just a really, really extraordinary event at Berkeley and how efficient we were, how well the product went out, how happy the customer was with the experience and how we engaged with them. And we're already seeing really positive data from Berkeley Country Club. We continue to see great data from Woodland Hills as well. And you'll see some of that in the upcoming slide. Oasis Date and Marta's Garden, I've talked about as repeat customers as organic commercial date growers. Marta's Garden is interesting in that they had a 30% water savings, and they only -- they had a finite resource of water. They can't drill another well. They don't have -- they cannot increase their inflow of water. So saving 30% of water allowed them to take open land that they have not farmed before and start planting and adding more date trees on a property that they did not think they could expand. So that's really quite exciting for them when you consider every date tree will generate about $500 in revenue per year for them. So that's a really strong ROI for Marta's Garden for sure. Next slide, please. So full-scale engagements. That's what's anchoring the flywheel with demonstrable value for our customers. So I'll call out these 2 big ones here. So Oasis Date, really fantastic relationship for us. I've mentioned they're repeat buyers. We started with a small trial, and then we got into expanded deployment. We've done a couple of those now. They're talking about adding more for us. They have over 5,000 acres of organic mature dates. Full scale that represents $4.5 million for us. Now we want to get on their bus and do what they're trying to do and what they -- what are their goals. So in working with them, they have come to a corporate goal of saving 10% water this year. Well, we could do that by treating only 1,500 acres of their crop of their date palms, and they save enough water there to meet their 10% overall goal. So that's something we hope to do this year. We've not finalized that yet, but we're certainly working toward that. And that's -- they're a great relationship and exciting opportunity. They've also become a research partner with us. So we have a research partnership with them that includes the University of Arizona. That's a 2-year, potentially 3-year trial that's also focused on not only water savings, but also yield with the largest commercial grower of organic Medjool Dates in North America. So now jumping over to Woodland Hills. This project just continues to amaze me. Here we are 8 months in between the water savings value and the rebates for which they have qualified, they've had $185,000 benefit to them as a business. So -- and that's because they realized an average water savings of over 25% over that 8 months. Some of those months as high as 60%. And when you have a water bill, it's over $800,000 a year for what's relatively a small golf course, that is a really meaningful impact to their business and their ability to endure and sustain as a business because -- and we'll talk about this in another slide, the cost of the water is not just the water bill. It's also the energy required to pump that water and pressurize that water. So they've not only saved money on the water bill itself, they've saved money by not having to pay the energy bill to pump 40 million liters of water that they've not had to purchase. Next slide. All right. So we've talked about California, and we talked about California. I'm going to talk about California. So this is a rapidly growing pipeline in California. We're really excited about it because we have a target-rich environment and a really tight footprint. And in the American Southwest, where farmers farm by the square mile to have something that is a tight target is really exciting to have. So you can see the growth in the left here of our number of pilots, and that just continues to accelerate. The June number -- you may look at that June number and go, well, it's not quite as accelerating. I'll remind you, it's May 13, and we just closed 2 more trials yesterday. So that number will continue to grow, and we'll have more that will land into June. Addressable acres attached to those pilots, so I'll point this out because this tells you that we're not doing the little mom-and-pop 10-acre farm. It's not a lifestyle farm. These are big commercial growers that have thousands of acres, many of them, some hundreds of thousands of acres under their management so -- that we're in talks with. So I fully expect addressable acres to continue to accelerate. And then total value conversion, those are really exciting numbers in my opinion. We are seeing that the scale of permanent crop in golf across the American Southwest is really quite extraordinary. In the early days, I was a little concerned that, hey, are we making our target market a little too small. But in reality, it's way bigger than we initially realized, and they are starving for solutions to this cost of water problem that is compounded on a cost of energy to pump that water. Next slide. So I will mention here as well as on the previous slide, keep in mind, we've really only been selling hard in California for the last 6 months, and you've seen this hockey stick of interest that has really come at us at 100 miles an hour. So we're incredibly excited about that. So commercial validation, we are at our commercial inflection point here. These validations across high-value crops in golf. We've got these full cycle validations that I talked about in some of the other crops that we expect over the next 12 months. We just had this boom in volume of the pilots with an average of 1,500 addressable acres per pilot and several that are opportunities that are over 4,000 acres with specific customers. It just makes a massive realizable pipeline of $50 million or more with an average customer value of $1.6 million at full conversion. Those are really extraordinary numbers for a small company. So we've got a lot of elephant to eat, and we've got to bring a big appetite. All right. Next slide. So I'll turn it back over to James to take us through the strategic road map.

Thanks, Marty. I just love that a lot of elephant analogy. I don't know that I ever had elephants, but it's a high-class problem in this case. So you've obviously heard a lot about where we are today and how we're thinking about the business. I'm going to try and provide just a few remarks on where we think the business is going over the coming 3 years. Next slide, Ari. So for those of you who have been with us, you've heard Lars say focus, focus, focus, what we're not going to do. That was certainly the theme for 2025. The theme for 2026 is focus, focus. Hopefully, we've stopped doing almost all the things we should have stopped doing by now, but I'm sure there are some out there for us to stop doing. But it's about getting the business in the right place through this financing, raising sufficient funds to get to cash flow breakeven so that we're not doing serial financings. It's about completing these pilots that Marty has pointed out are the precursor to ultimate sales. It's already been about expanding the sales force and production units, and we will be adding more sales people to the team. We're actively recruiting for golf and ag sales. As we put out this morning, the first of the new production units should be out of the factory next week. I've been getting a lot of pictures from our engineering team. It's coming together quite nicely, and they're in the testing phase. I mentioned during my presentation that we are actively looking for an operations based in Bakersfield, and we will be growing the staff to meet this demand. Most of that staff will come in the form of operations teams because we are focused on a pretty tight geographic area, and we have the science team to finish building out the transition from Norway. But overall, more and more people in the front lines and a few more senior heads. '27 looking forward, is still going to be all about California. And I don't -- no offense to Arizona, some Arizona. We are as well positioned as you can be in Arizona, and I expect that there will be a breakthrough in Arizona at some point, but the focus is continuing to be on California. You'll see that I think we'll do even more pilots. I want to comment briefly on that because while today, pilots are very indicative of commercial traction, and they will always be same, we are strongly of the opinion based on customer feedback that, for instance, in Oasis Dates, you've seen them buy 2 or 3 times already, and we think they'll buy again based on pilot. So as the business matures and as the evidence matures in the valley and the farmer next door, et cetera, I actually expect pilots as a function of revenue to begin to taper off. They will always increase but not accelerate because they'll become less necessary to drive the business. But I do expect for the next 2 years, we'll have increasing numbers of pilots. Marty pointed out that we'll be getting the early data back on our pistachio and almond and citrus trials. One of the things we don't talk about a lot is that the capacity of our units is currently a function of how many batches we can make an hour because that's how we make the product. Marty and the engineering team and others are working on creating a continuous production process for it, which will increase capacity by 25% to 50% at least as we go through there on existing machines. In 2027, I would expect us to add yet another California operations base back to this density and logistics issue. I think that we will open either in the Riverside area or in the Fresno area to be determined, but I expect us to add another operational location. And as we look beyond that, I think after 2027, we'll be in a position to kind of, if you will, pick our heads up and expand the territories that we're working in, I would expect some ex U.S. growth in distributors and/or joint ventures. And I would expect that we'll probably enter an additional state in the U.S. I put Florida here on the slide because -- for those of you who know Florida, you know that it's very, very sandy, and it's a rapidly growing economy, and they have a lot of golf courses and a lot of citrus trees. But as attractive as that idea is, it's not for this year or next year because we have such an attractive opportunity right in front of us. Next slide, please. And so this is really essentially repeating that mantra. We have today direct operations in very lucrative territories that we will roll out across other parts of the Southwest of the U.S. We have today distributors in the Middle East and the UAE, in the UAE and Saudi Arabia. And then we have this huge piece of territory in the middle that I think of as optionality. These are markets that are very large, many of which we could address ourselves, some of which we can address through joint ventures and some of which we will have to address through licensees. But all valuable and all essentially becoming more valuable every day as we develop the proof points and success in the Southwestern United States and in the Middle East. I think that this -- the numbers get so huge, so fast as you attack these, and we make progress there even without being there as we develop the core technology and proof points in our home markets. So with that, I think that I will turn it over to a man I'm very happy to have on board. David Borah joined us just a few months ago, and his impact has already been significant. You'll notice that we put out our financial statements today also or yesterday, at some point in the middle of the night, we got our annual report out. And having Dave on board has been awesome, and he is adding value every day. And let me turn it over to him.

All right. Thank you, James. It's my pleasure to be part of the company. It's certainly been very busy the past few weeks and looking forward to talking to all the investors after the call. Next slide, please. So as we think about this year's revenues, it's heavily driven by activities in California. This revenue level of $2 million anticipates not only that some of our robust pilot activity that Marty has described will convert into commercial revenues, but it also assumes continuing contributions from existing pay-as-you-save contracts at both Woodland Hills and Berkeley. In contrast, activity in the Middle East has been slowed mostly by geopolitical events. Next slide, please. So as I indicated, we are anticipating about $2 million in 2026 revenues. We believe this will come with a bottom line loss of about $6 million. As we move into 2027, we see our pipeline momentum continuing to bear fruit. We believe 2027 revenues will be in the high single digits in millions of U.S. dollars and a narrower loss. We see cash breakeven in the low teens in millions of dollars and believe we will achieve this in early 2028. For 2028, we believe our revenues will be in the mid- to high 20s and drive EBITDA margins to approximately 20%. And then out in the medium term, we believe revenues can grow 40% plus annually and drive EBITDA margins above 30%. Next slide, please. So just to wrap up, in conclusion, a few points to emphasize. We are, as Marty said, at a very crucial inflection point. Our history in California has been relatively brief, but it has been incredibly promising. Within the space of less than a year, we have developed almost a $50 million U.S. pipeline in California agricultural market alone. And we believe this will result in 2026 revenues in the mid- to high $20 million range with corresponding EBITDA margins of approximately 20%. Right now, we are almost exclusively focused on the American Southwest, but longer term, we expect to replicate our strategy in other geographies. Next slide, please. So at this time, I'd like to thank all of you for your time and attention, and I'd like to open up the call for Q&A. We've received a number of questions ahead of time and also some during the call. If you have other questions that were not addressed today, please reach out to us to schedule a call. With that, I will begin the Q&A. You need to look at a different screen here. We'll start with the first one, which is probably a question for Marty, does the LNC technology work with all types of irrigation systems?

Yes. Dave, that's a really great question. And the answer is that answer has actually changed over time. So in the early days, we would deliver LNC through a big hose, big flow rates, and we didn't have to worry about would it go through the irrigation system. But as we understood, especially here in the U.S. Southwest to be able to scale LNC, we needed to deliver it the same way the customer delivers their water. I mean we're making a product that's 98% of the customers' water. So it makes sense to deliver it the same way they do. So that meant that we had to get really serious about the technology to make that possible. And we've made changes to our -- what we do with the LNC in the field, in the process to make sure that it can go through any type of irrigation system that we face now. Now it took us a while to get good with golf courses, but we're there. It took us a while to figure out drip tube and drip tape, but we're there. We're doing those trials. I think every trial we've done in the last 3 months has either been through drip tube, drip tape or some other precision irrigation. So this was something I knew we had to conquer back 3 years ago. It's taken a long time to get it sorted out and make sure that we're not causing issues with especially these precision irrigation systems because they can cost millions of dollars for some of these operators. But we do it with extreme confidence now. Not only does the system not clog during the LNC application, but water freely flows immediately afterwards. And I got a video yesterday from our field operations manager showing me a system that -- through which we had applied LNC 6 weeks ago through low flow drip tube, and it's flowing freely, running great. So the short answer is yes. There's nothing we can't work with at this point.

And I guess just a follow-up question. Do you see variability in terms of results, in terms of water savings? Do you see like less water savings with one irrigation system versus the other? Or do they tend to be sort of consistent?

Yes. So we do 2 things to assess that. One, we take soil samples before and after LNC application. And when we're doing a trial, we always have an untreated control comparison in a direct treated area that we compare. So we'll do soil samples, send that off the lab, we assess for water holding capacity. At the same time, the really big real-time in situ objective data is soil moisture sensors. And they're collecting data every couple of minutes, if not seconds, sends that up to our systems. And we're getting that data in real time, and we can see that soil moisture is significantly different between treated and untreated. And that gives us the tool -- that data gives us the tool to go back to the golf course operator or back to the grower, present them that objective data and say, hey, these are your numbers. These are numbers from somewhere else. These are your numbers, and we're seeing significant differences in soil moisture. And so you can genuinely irrigate differently and trust that this works with -- on your property.

Now I'll ask a question for me. I don't want Marty to take all the questions. It's a question about our social media policy. Why haven't we done more promotion of successful implementation cases from licensed operators? Great question. We are starting to do more on that. That's definitely something that has been noticed both externally and internally. And we posted a video -- sorry, a social media post last week on LinkedIn. And I think people should expect to see more cases of not just commercial customers, but also piloting activity. If it's not a customer, it's a customer that hasn't been announced yet. We're not going to name the customer on the social post. But we have a lot of positive feedback out there in the field, and we intend to promote that a bit more on social media, especially on a regular basis. Let me ask another question here. A question about production units. How long does it take new production units to manufacture? And how do you expect the cost to develop over time? It's probably a question for -- again, for Marty or for James.

Marty, why don't I take that one just because I have the most recent pictures. So the answer is that the production time is a function, frankly, of the procurement of all the technology that's inside the machine. So at the current time, the longest lead time items is 4 months. And that is actually the defining time of getting a machine out of the shop. If we had all the -- once we have all of the pieces ready to assemble, it's probably under a month to get a unit. But we are using sophisticated equipment. It comes from Europe in addition to the U.S. We've had some things with tariffs or at least confusion about tariffs as to when they would arrive. But worst case, 4 months, we hope to get it down to a couple. But as I said in my previous slide, I don't think the units are going to be a problem. They're so productive that having a few of them drives a lot of revenue. And I do expect the cost to come down over time, but I don't expect them to ever be cheap, and I don't necessarily want them to be cheap.

Thanks, James. Can you expand on the current pipeline of expected pilots? How much is in golf versus agriculture? And what crops are you most present in? I assume that means within the pilot activities, which ones are more prominent than others?

I don't know, maybe Marty and I can share this one. We do expect it to expand. And at the same time, as I say, I do not -- it's not infinite. We're not going to 500 pilots, right? Right now, as Marty, I think, alluded to, is we're juggling the schedule to get to people. And so that's a great problem, right? When we're capacity constrained, it's a great problem. But we do expect through the course of the year to see more pilots, heavy activity. There'll be some seasonality. Marty mentioned harvest and other things will slow us down at times and accelerate at others. But Marty, maybe you can comment on the crop types we're seeing, and there is some concentration at least in the last few weeks.

Yes. So crop types are heavily, heavily focused in permanent crops. So especially right now, our -- where we're super excited is almonds, pistachios, walnuts, cherries and then table grapes. And vineyards to make great wine, you actually got to stress those [indiscernible] a little bit. So those guys don't use quite as much water. So -- but in the vineyards, table grapes are a huge market and a lot of those guys are really constrained. And a big thing that we're learning is that really stands out to me as we're having these conversations with folks, they're beginning to realize that the water situation is not going to get better. It is a -- their cost of water keeps going up and to the right and the cost of energy to pump that water. So it's not just going up, it's compounding because it's the 3% increase this year and then another 3% and then 7% and 8%. Some of these golf courses we're talking to are seeing double-digit increases in water costs and in energy costs. And the picture is starting to come together for Colorado River cutbacks. It looks like Arizona will take at least a 30% cut in its access to the Colorado River. California will lose even more water by volume. Las Vegas has taken a hit. We're seeing a lot more pilot activity, pilot interest from the Las Vegas golf market because they have had an absolute sea change in their financial realities. Las Vegas, the market had invested in a reclaimed water system. They put that online, made water much cheaper for the golf courses, but they realized that it costs -- the utility has decided that it's too expensive for them to run that. So now they're shutting it down. And Las Vegas golf courses are an absolute panic right now, trying to figure out how they're going to have enough water to be able to stay in business. So the really interesting thing to me, going back to the competitive question briefly of who are your competitors? Quite honestly, I'm yet to see a customer sit down and say, well, we're comparing LNC Desert Control solutions to this other solution, what we're going to put our money into. They're making a decision between LNC and doing nothing, most often. And doing nothing has a compounding cost growth problem attached to it, both in energy and water cost. So most of these guys are really motivated for a solution, and they just want to do the -- they need to do the trial to figure out and make sure it's the solution for them.

Okay. Super. And then sort of a related question about water savings and crop types. Do the results that we see, are they consistent across crop types?

I'll take that one. It's in my observations, yes. It is -- now unfortunately, no customer is going to believe that. They are terminally unique unto themselves. No matter how good the data is in grapes, almonds and pistachios, the walnut guy still wants to see it work in walnuts. He doesn't believe until he sees it or hears about it from another walnut grower or 3. So while we're seeing that, that across crop types, we're seeing consistent success when we've -- when we're targeting the right soil types, which is soils that are more sand dominant, meaning the mixture of sand to silt to clay, sand is the dominant. So we look for crops that are being grown in sand, [indiscernible] sand, which is the overwhelming majority of the Southern San Joaquin Valley. It's Coachella, it's these markets that we've highlighted on the maps that we've shown today.

Great. If I might just follow on. [indiscernible] ahead real quickly there. So Marty is completely right in everything you said. And that soil question is also partly the farming question, right? Because each farmer decides how much water they put down. We don't tell them your soil sensor says put down 15% less. They have their hand on the tap as do the golf course superintendents. So what we market to people is 20% to 30%. Even though we see 60%, 50%, 40% numbers at other times, what we market to people is 20% to 30% because if you look at the distribution of average result, it falls in those bands, especially over a longer period of time. But we certainly have cases where the numbers are higher than that. But credibility is really important to us at this point and farmers are, as Marty pointed out, very skeptical people. So we try and lead and offer them a solution and an expectation that is well within our historical results that is also meaningful to their [indiscernible].

And then a question about -- and this might be a question for Jan or Marty. You mentioned a significant increase in throughput capacity through next-gen LNC production units. When are they expected to be delivered? I think we answered that one. The first one is coming this month. And how do you expect them to change the business commercially? And I think this question is relevant as we talk about -- especially relevant as we talk about bigger farms piloting with us, not the mom-and-pop farms, as Marty said, but sort of the much bigger 1,000-acre plus farms. So Jan or Marty, do you want to take that one?

Jan, if you could start, I'll give a little bit of color after.

Yes. So I think, as you said, we're seeing the capacity increase on our next-generation unit, which we've been piloting for some time, and we have the first manufacturing version coming out within the next few weeks here. We're very excited about that. I think the obvious benefit is the number of days that you need to do the application, right? There are some specifics where we may not be bound by that as we do some of the new construction projects and such in the Middle East. But there are others where this is very critical aspects, right? And when we get to the golf course and such, obviously, the number of days that you are there directly impacts how quickly that golf course can potentially get back to business, right? So this is where we will see a good step change in our new unit. And as James alluded to during the update on our plan over the next years, this is something that we will continue to improve on as we learn how the unit works as we improve the automation process of the unit and as we switch from, as was mentioned, to different type of production, right? So we will see a step change now with the new unit, and we will continue to improve on that over the next few years.

Yes. And I'll just add here that as we've spoken and engaged with some of the largest growers in different categories here in the states, they don't farm small. They're farming these massive plots of land and their irrigation systems will move 1,000, 1,500, 2,000 gallons a minute of water and we're trying to integrate LNC into that flow. So today, our -- we can only keep up with a fraction of that. So we have to focus on some of their smaller fields or we have to have them kind of pare down how much they're irrigating at one time while we're incorporating LNC in the flow. So the new production unit allows us to work with the customer at the scale at which they farm in the 20, 40, 60 acres at a time type irrigation systems. So we have to keep up with that kind of flow. And then you have golf courses, these really thirsty golf courses in Palm Springs, they could be pumping 1 million gallons of water a day to irrigate golf course in the desert. So those systems are massive and pump 1,500, 2,000 gallons a minute. So we have to have the ability that we could use one, maybe 2 machines together with these next-gen machines and be able to keep up with that kind of capability and be able to be in and out in a couple of days as opposed to a couple of weeks. Also, it will streamline our headcount on a travel team to go operate the unit. It's much more condensed. It's much more efficient. There's less loading and unloading involved because of the just fantastic engineering the team has done under Jan. They have really tightened this thing up and made it so much more efficient than these early prototypes we're working with. So our mobilization time, demobilization time will be reduced as well as our throughput when they're on the job. So that's less headcount. It's less meals on the road. It's less hotel nights. It's less time away from their families and it's the ability to get to more than one job in a single week. So those kind of things are just absolutely massive in terms of what it will do for us to open up the opportunities with the really big players.

Excellent. We only have 3 or 4 minutes left before we get to 90 minutes. And I think we're committed to closing the call at 90 minutes. So again, if any questions weren't answered, please follow up with us. But I think it's probably appropriate to end with this question for James and for me. And it concerns the timing of the funding and our valuation, sort of why now? Why not wait until maybe the valuation improves to raise more money, maybe do a small financing now and a bigger one later? I mean I can say from our experience over the past 4 weeks that even it doesn't sort of -- it doesn't matter how big or how small the financing is. It still requires an immense amount of work, both by the company as well as by bankers. So the timing of this financing from my perspective, is great because it's good and bad. It's good because it comes really when we need it. We are seeing all this piling activity that is going to convert into more commercial business, we hope, we think. And so with that, will come need for more CapEx investments in more LNC production units. And it also makes sense, frankly, given the demand we're seeing to use some of the proceeds for new salespeople and perhaps to expand further into California. In terms of bad, in terms of valuation, again, I think it's difficult to time fundraising when -- at peak stock prices. And so I think we sort of take the good with the bad. And from my perspective, again, I think that the timing is good because it comes just as we're seeing things really sort of click into high gear when it comes to pilot activities. James, I'm not sure if you want to add anything on to that and sort of close out the call.

So I think David's covered most of the important messages here other than I think the company has been chronically underfunded and the company has faced this question from investors repeatedly, will you run out of money? Will you run out of money? Will you get to cash flow breakeven? And I think we're very focused on trying to answer that question onetime and permanently. And so the timing of this financing is obviously driven by the business and the cash need. But it's also driven by a belief that this really can be the last financing the company needs to do to get to cash flow breakeven. And I think that all shareholders, including those of us on the management team, have suffered, frankly, from the perception that the company will have to finance and have to finance and have to finance. And so while it's painful, frankly, to raise this much money at this valuation, I think it's the right long-term answer for the company. And I think we're blessed to have as much investor interest as we've had in this company over the years with always thanking our existing shareholders and also very happy to have MWNL involved here and a whole new crop of potential shareholders to provide the kind of financing and financial footing the company deserves as we hit this now very commercial phase going forward. And with that, I think David is telling me to wrap the call. And I do want to thank everyone for their participation. I want to thank all of those of you who have called in, who have stuck with us for 90 minutes. I know it's been a long call, but we're trying to provide you all with a great deal of detail on the business and a sense of our excitement about where the business is today. This has been a team effort in all regards. And the people on the call today have been a huge part of that heavy lifting, but all of our people in the field have contributed also, and we are running them pretty raged. So I appreciate all that our team has done. We look forward to dialogue with all of our investors in coming weeks. And thank you again. And I hope you feel as confident at the end as I did at the beginning. Thanks for attending.