Itaconix plc (ITX.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Itaconix plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to John Shaw, CEO. Good afternoon, sir.

Good afternoon. John Shaw, CEO of Itaconix, and welcome to our report on our interim results for 2025. In terms of our highlights, it's a very important half year for us for the long-term development of Itaconix into a large, highly profitable specialty ingredients company. Our H1 highlights are really around our financial results in a couple of different areas. We recorded record revenues, record gross profits, near neutral adjusted EBITDA, and we still have plenty of resources for additional growth. On our commercial progress side, we made a major step towards reaching profitability from both the revenue growth side and the revenue base we have in place for landing and expanding new customers. Finally, we're also setting up future growth with 2 major new initiatives that advanced in the first half with both our SPARX program, our BIO*Asterix program. Our path to being a large specialty ingredient company centers around the value and potential for itaconic acid. Itaconic acid is a natural molecule. It's a metabolite actually produced in our bodies in the natural world through biochemistry. Its value is derived from its unique combination of 3 functional sites that are one more than acrylic acid has. These sites offer multifunctional benefits for polymers made from itaconic acid, which is what we do. Its value is also derived from how safe it is to handle and use relative to the building blocks it can replace such as styrene and acrylic acid. It's produced readily available by industrial fermentation. It has been used for many years across many industries at lower levels in polymers. We make it into our polymers on it. What we do is we purchase itaconic acid, bring it into our facility here in the U.S., and we process it using our proprietary technology into itaconic polymers that are key ingredients in our wide range of everyday products. We have a large technology platform for itaconic acid, where we can use it across many different application areas. Right now, we are focusing on 3 areas on scale -- mineral, scale inhibition, particularly for preventing the detrimental effects of calcium scale in your home and in your detergent, industrial applications. Second and importance for us is odor neutralization, where we bind zinc into our polymer and that polymer becomes highly effective for getting water-soluble zinc to act as a neutralizer on contact. And third, we use our underlying monomers and binders to make paints and coatings. There are a wide range of other potential applications we can pursue in the future. But for right now, we're focusing on the scale inhibition, odor neutralization and specialty monomers. Within our wide range of applications, we are focusing -- we're doing this under 3 business opportunities. First of all is our industrial performance -- is our Itaconix Performance Ingredients, where we produce and sell itaconic polymers produced here and sold around the world. Second of all and very important to our growth for the Performance Ingredients is we have identified certain segments within the detergent market, the home detergent market, where we believe both our ingredients and other key ingredients are enabling a new generation of better products. And we are facilitating getting these out onto the market by doing formulation work for brands. For that, we get paid $1 per pound for the additional ingredients that we sell. So think of it as being a value-added reseller of the other ingredients that we do. But the core of it is to bring better products in the certain segments that we have identified, get it to brands better and faster to get them on the market. And then finally is our BIO*Asterix building blocks. These are specialty monomers that we are using and making available to be able to get used more broadly in paints and coatings over the next few years. Where we've gone with this now is the capabilities that we have, we are now leading consumer product wins for brands in all the right places across a broad range of brands and product categories that are found in pretty much every major retailer in North America and Europe and expanding around the world. So we have great technology. We've turned them into great specialty ingredients. We found ways to get them into the market faster, and we are winning out in the marketplace in all the right places. So Laura will go through the financial aspects of how we're performing to date and our future on it.

I'm Laura Denner. I'm the Chief Financial Operator -- Officer here at Itaconix. I'm thrilled to be able to share with you more detail on the results for our first half of 2025. There's been a lot of positive progress made in the first 6 months of the year. So to get into it, the overview for the first half, sales were at $4.8 million, up by 73% from H1 2024. This half revenue also marks a record half for us in the business. We beat our last record half by 20%, which occurred in H1 2023. This half, we also saw a strong gross profit of $1.7 million. This was due to maintaining our overall target gross profit margins at 35%. This in a consistent cost base for the period, we were able to improve our EBITDA losses to $200,000, which was an improvement from $800,000 from H1 2024. Lastly, the group ended the period with ample net working capital at $6.6 million with the resources that we need for growth. So as we turn to top line growth, we saw growth in H1 2024 in both our Itaconix Performance Ingredients and our SPARX formulated solution. Performance Ingredients contributed $3.3 million for the half. These revenues increased by 51% from H1 2024. This is largely due to the efficacy of our cleaning polymers in enabling next-generation detergent formulations. These polymers have an average gross profit margin of 45%. We anticipate strong growth in this business unit and to maintain similar gross profit margins in the near term. Our SPARX formulation solutions grew to $1.5 million, which was a growth of 156% from H1 2024. This growth is related to our efforts in rebuilding our North American detergent sales, where we work with contract manufacturers and brands to supply turnkey solutions. These revenues do complement our Performance Ingredients and yield an average gross profit margin of 13%. We anticipate that in North America, these sales will continue to grow with North American detergent sales, and margins will be maintained at about 10% to 15% in the near term. Lastly, BIO*Asterix has generated some small volume e-commerce sales. We are seeing a lot of interest in these new building blocks, and we don't anticipate seeing a lot of commercial volumes in the next -- in the near term. Overall, the efforts made in converting our sales pipeline into revenue over the last 12 months has increased our sales by $2 million. All this done while maintaining our overall desired gross profit margin at 35%. Next, we'll look at sales by geography. Sales in North America were $3.3 million. This made up 68% of total sales. These sales were comprised of Performance Ingredients and SPARX formulation solutions. Over the last 3 halves, we've seen strong recovery in that North American detergent market, with existing customers growing revenues utilizing our flagship polymer TSI 422. This one has excellent multifunctional performance, and it offers cost advantages. Another reason for the growth we saw was the utilization of our SPARX program. This is helping us bring formulations to market faster. We have 2 examples of this in the North American market. One was with a contract tableter and one with a contract formulator blender. These started at relatively small-to-moderate revenues about 18 months ago, and they are now our top 2 customers in the region. Both of these made up about 14% of revenues each, and this is really showing our land-and-expand strategy in action. So turning our attention across the pond. Revenues in Europe and globally were $1.5 million, which was about 32% of our sales. Formulation work is done -- typically done a little bit differently here. Brands and contract manufacturers tend to do their own formulating work. This is different than in the North American market where we act as a partner. Growth in this region is from our competitive advantage of our polymers for bringing scale inhibition in dishwashing and laundry detergents. An example in Europe of our land-and-expand methodology is illustrated by the success with our customer who is an integrated contract manufacturer. They represented about 21% of the group's sales. This sales growth is due to their ability to win bids with a multitude of private label brands because our polymers are providing that key claim for their formulations. So next, we'll look at the makeup of revenues by customer type. We work through 3 main channels: one, direct sales to brands; second, we go sales through partners and distributors; and last is sales through contract manufacturers. So sales to contract manufacturers is our primary avenue. This comprised 85% of our sales for the half. Working with contract manufacturers, we can provide strong technical support and bringing formulations, ingredients and claims marketing together faster. So in North America, we have higher visibility through our SPARX program. We are able to engage with brands and contract manufacturers and act as a collaboration partner. This gives us a better visibility on demand for our ingredients, and we're able to better estimate the underlying demand for the end merchandiser or brands. We estimate that no one brand was responsible for more than 15% of our total revenues for H1 2025. So I think one of the most thrilling advancements we've made was the progress towards profitability. Not only did we have the strong revenue growth and -- but we also maintained our price discipline. We continue to price to the value of our ingredients. This is really what allowed us to maintain that gross profit margin of 35% for the period. Gross profits for the period were $1.7 million, which was an increase of about $600,000 from H1 2024. Next, we were able to improve our cost base. We reduced group expenses by about $200,000 for the half. Our current cost base provides us with sufficient resources for this next phase of growth that we're going into. So now shifting our focus to cash usage for the period. We did invest in capital spending, which I'll cover in a moment. But our working capital did consume some additional cash resources as we pivoted to mitigate potential risks that might develop as a consequence of the U.S. international trade relations. We work with raw material suppliers to increase our raw material inventory and also understand the ever-changing landscape of import tariffs. So as a recent, we still believe that there is a favorable assessment to the impacts of these tariffs on our raw materials. Most of our raw material pricing does not appear to be materially affected by these current import tariffs, but the strategic decision did increase inventories for the period, and it increased our working capital days from 83 to 87 days. We anticipate over the next half that we'll bring these inventories down unless we start to see some unfavorable trade negotiations starting to develop. So another important part of here at Itaconix is during the first half of 2025, we did invest in additional fixed assets. These additions were made to support our production needs as well as our growing workforce. This investment in fixed assets did impact our fixed asset turn ratio from 11x in the full year 2024 to 9x, which was still well above the industry comparatives of 2x. So with a significant investment in our property, plant and equipment for Itaconix, we still have an attractive fixed asset utilization for our specialty ingredients. And we have sufficient capacity in the plant, and we can dynamically enhance this ratio to meet our near-term revenue demands. So another key investment made during the period was in our intangible assets. Advances were made in the development work for our BIO*Asterix building blocks as we bring these new itaconic polymers to market in our paints, films and coatings. Another area of focus was the development work done in our Performance Ingredients. These investments, along with our patent portfolio, which includes 16 different patent families, is a critical piece to the value of Itaconix. So next, why Itaconix? So we've made some exciting progress in the half on our path towards being a profitable specialty ingredient company. We've ticked quite a few boxes, I think. One, we've executed on our land-and-expand demand generation for revenue growth. We've offered a wide range of valuable ingredients at attractive gross profit margins. We have effective use of capital in our fixed asset turn and our working capital utilization. Next, we have a growing base of intangible assets and a broad patent portfolio. Next, we have the cash to continue on our growth path. And last, we are focused on our future growth and achieving break-even profitability. So overall, I think we're well positioned with the right resources and a good customer base to get us there. In short -- so I'll turn it back over to John Shaw to kind of share with you a little bit about our growth path.

Thank you, Laura. So our growth path is being defined in the 3 areas -- 3 business areas, where our -- the way we grow is we find an opportunity, we turn that opportunity into a particular product or service. We get traction for it. We get growth for it and then we get our Performance Ingredients to be a standard ingredient in the future in a wide range of formulations. I'm going to move right to left on it because our building blocks of BIO*Asterix, we're just in the very early stages of an opportunity. Over the next couple of years, we expect to advance into getting initial traction there and growing it. That is a 3- to 5-year growth plan on it. Within Performance Ingredients, we are advancing our way into a high-growth phase, and we're working in using our SPARX Formulated Solutions services to accelerate getting new winning formulations out in the market faster. And then ultimately, that's driving the use of our Performance Ingredients as standard ingredients in a wider, wider range of formulations. So to talk about Performance Ingredients itself, first and most important, our scale inhibitors where we have great value in detergents. And so the scale inhibitors, what we need to be doing now is to expand from North -- our success in North America to continue expanding into Europe. We are doing that. We're finding traction there. And our growth path is to continue that expansion to get our scale inhibitors to be standard formulations -- standard ingredients in a wide range of detergent formulations, and that's our next stage of growth. We are also, though, however, investing in a new round of polymers where we think we can make additional improvements in our scale inhibitors to meet future needs and even bring better polymers out. We think that's another 2 to 3 years out. So we think we're in a very good place. Scale inhibitors is going to drive our growth. It has driven our growth. It's going to continue to drive our growth. The next area where we need to perform is in odor neutralizers. We have an excellent odor neutralizer. Odor control is getting more attention as ever, particularly in fabric detergents. And as you can see with Croda, -- our new agreement with Croda, there's growing interest in getting better ingredients on the market for odor control. We have an excellent product for doing that. We've expanded our product line to include a dry form, and we are going to continue to push traction across -- both through Croda and through our direct efforts across a wider range of applications on it. On Formulated Solutions, our SPARX program is very important for us, where we have identified certain specific product opportunities in detergents and dish and fabric detergents, where we believe both our own ingredient and other key ingredients available on the market are driving -- are going to drive success. We've identified those. We've identified the formulas. We have them out in the market and are talking to brands about them, the brands that brings brands coming to us so that they can get a better formulation out on the market. And we do it so that they can get there faster and better through the innovation that we offer. We have over 10 relationships right now in various stages of development across brands and detergent makers that will have, we believe, 10 new products on the market by the end of this year. We already are probably looking at about another 8 for 2026. So we're very excited about the work that we're achieving and what we're going to be doing next year. Finally, we're just starting our process of getting specialty itaconic monomers out onto the market. We did launch our e-commerce site to make research quantities available to development labs in North America. We plan to expand the distribution of those monomers into Europe. Then we're also going to increase the volumes that we have available beyond the research quantities. And then most importantly is to find a partner to actually pull an end product through to the market that is based on our monomers and our binders to show the value that they have. Exciting area along -- that will be a long development range on it, but we started the path on it. In terms of questions that we think about for investors, one is the profitability. We are at -- we've made a major step towards profitability with the growth that we've had. I think even more importantly, we have done work to restructure our customer base from where we were 1.5 years ago when we decided we needed a better customer base and a more profitable customer base for our Performance Ingredients. We made a step in that direction that resulted in a reduction in our revenues last year. But as you can see from the results of the first half, I think our efforts have been highly successful to get a very broad profitable consumer -- customer base for our future growth, and we see the revenue potential in our pipeline to cross over into profitability. Regarding production capacity, we did complete improvements to our production line this spring to meet our needs for 2026, and we are working on improvements to our production line right now to meet all our current plans for 2027. We have mentioned that in the future, when we become a fully standardized scale inhibitor in detergents and we get into one or more of the major players, the volumes are far beyond what we think we would ever do here in Stratham. And we also want to be able to have a second site. So a number of years out, it's -- we're starting to look at it. It's not imminent on it, but we are starting to think about where and what we would do in the terms for that. We do not need cash for that right now. When we do get there, we expect that we'll have many funding opportunities to do it, on it, but it is something we're starting to plan on because of the progress that our scale inhibitors are making into larger and larger accounts. In terms of broader revenue opportunities, new applications, we're going to stay fairly focused on where we are. We have some opportunities in sustainable leather. Those are in play, but we don't -- we are not expecting any major volumes out of those now. There are some other small applications opportunities that are brewing, but our focus is on where we are right now. In terms of new products, we're going to focus on another generation of scale inhibitors, some improvements we can make that we believe the market will -- is looking for on it. But our other programs in terms of our superabsorbent program, as we've mentioned in the past, it's there. We're continuing some work on it. We do not see the relative advantages that we can have in the marketplace for revenues. We think that the areas we're focusing on right now are better. So our outlook remain -- for 2025 remains very positive. We have the revenues, we have the profitability to meet all of our expectations for 2025 and to be in excellent position for 2026, to meet our expectations for 2026. So in terms of the overall summary of where we are, we are making -- we have an excellent proprietary technology platform that's going to generate a broad range of valuable ingredients that deliver performance, affordability, renewability to a broad range and growing range of consumer end products. We see very little competition and that we can now focus in on the areas that we have right now with low capital intensity to be able to achieve our near-term and long-term objectives to being a large specialty ingredient company. So it's a very exciting time for us. I think the progress that we've made over the last 18 months has put us into an excellent position for our next stage of development. Thank you.

[Operator Instructions] I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A can be accessed by investor dashboard. John and Laura, as you can see, we received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

So the first question that we have that was pre-submitted. The company has seen impressive growth over the past year. Does it still aim to reach $100 million in turnover? If so, what is the realistic time scale for this?

We have -- we are developing the product portfolio. We have the technology platform to be $100 million. We are advancing products to be there to be a $20 million, $30 million, $40 million, $50 million product, I believe, with our scale inhibitors, and we are adding new products on top of it. So I think we have clearly the technology platform to do it. With our scale inhibitor, we have the specific product to get a major portion of the way there. With our odor neutralizers, we have a very nice addition to it and now starting the path with our specialty monomers to compete in the butyl acrylate market and the special needs of butyl acrylate market. I think we now have all the product plays in place to get there. The specific time frame, don't know. It really depends in terms of how long it takes to get our monomers into use on it, but that's still our growth and expectation.

The next pre-submitted question, please advise latest breakeven and profit time line expectations.

I believe I addressed that in the presentation. We are one more revenue step away -- one more major revenue jump away from reaching that. We have those opportunities in our pipeline, both for expanding our existing customers and additional new opportunities. I can't give you the specific time frame of it, but I think we are approaching that threshold. We are very much at the threshold of achieving that.

Next pre-submitted question was regarding CEO's recent quote, "We have all the capacity we need to meet our needs over the next 12, 18, 24 months. That being said, we are going to start taking a look at our production footprint and what it could look like in the few years out based on some very sizable opportunities and projects in our customer pipeline." Is it possible to give some more insight to this segment of the business or the high-growth areas?

I think I've addressed some of this in the presentation. As our scale inhibitor advances to being a standard ingredient and as we're working our way through the private label formulators and the purpose-driven brands, we are getting interest with the large global players. And when we get there, those are very large volumes. When we get to those volumes, where -- we will need another plant and where we put it depends on exactly which player comes through when. But when we do get there, it will be the types of volumes that we believe will be very easy for us to get financing for a larger plant.

So the next pre-submitted question, despite a stellar past year, the share price is still subdued. What is the company doing to attract new private investors?

We are -- I believe we're exiting a period of restructuring, where the revenue decline that we had last year was concerning to people about the validity of our long-term story. With the results that we have out in the first half and to be able to demonstrate that we have, in fact, restructured our customer base to have a better customer base and a more profitable customer base and a customer base that has all the revenue potential to meet our near and midterm objectives, I think we're now in a position to be more aggressive at getting awareness out of exactly where we are and where we're going.

Next pre-submitted question is in regards to the OTC share trading platform. There has not been a trade on this platform since the 28th of February 2025. What can be done, if anything, to raise Itaconix profile and number of trades? [indiscernible], no director trade/purchases since early 2024. Will this change?

The OTC listing is very important for a large percentage of our shareholder base that are in the U.S. It does allow us to -- our U.S. shareholders to hold their shares in their brokerage accounts and to buy and sell shares on it. That being said, our -- in terms of the dynamics of focusing in on our Investor Relations and what I just spoke about earlier about being in a position to get our story out, we are going to focus in the near term on the U.K. market, but do see opportunities to start addressing the markets outside of the U.K. It is relatively more expensive from an Investor Relations standpoint to access some of those. But the OTC listing did achieve our objective of being able to allow the large number of U.S. shareholders to be able to hold their shares in their brokerage accounts like U.K. investors are allowed to do so that there's some parity and quality there.

So one of the questions that came in from Alex A, why is SPARX gross profit margin only 13%?

The SPARX program is a formulation and value-added reseller program, where we draw brands into next-generation formulations better and faster than any other approach we know of. So 13% is a value-added reseller. This is the margin that we're getting on our services and on the reselling of other non-iconic ingredients into these formulations is very attractive. And you can think of it as a very efficient and funded sales and marketing program. It's the best, fastest way that you can get brands to get better consumer products that we -- that our ingredients enable. It's the best, fastest way to get them out there, and it's been very successful at it. And we're generating profits by doing it.

Another question on our SPARX program from Kevin R. How are the 10 new SPARX products due out this year progressing?

Some are already out on the market. We have some in -- they're in the dish area and in the laundry area. The 10 are either already on the market or they're going into production. And I think we've shipped the ingredients already for those to make it out there. So there are fundamentally new -- there's some new dish detergent formulas out in the market, next-generation ones and also in the fabric area. We expect those to advance into some other areas early next year. Those are in process, but they are not ready to go into production. So the SPARX program is doing everything that we wanted to do, and we think it will continue to do it well over the next 2 years.

Another question submitted during the presentation was from Sid B. Is Itaconix targeted or suited for small brands, private label offerings, their cleaning and premium products?

A major target for us and our customer base is built around -- right now, it's built around purpose-driven and private label brands where we bring competitive formulations that they may not have available to them to allow them to compete against the larger global brands. So that is the core target of what we do in both Europe and in North America is to give the second and third tier brands all the competitive position they need to compete on the retail shelf.

So another pre-submitted question. Can you advise on where we are in regards to staffing or filling of the current positions being advertised?

We have expanded our organization, we've expanded our marketing capabilities, and we've added to our research and development capabilities. But most importantly is our production staff. So we do run 24 hours a day, multiple days a week, and we have 2 full production crews for that. We are always advertising to add people to that to make sure we're in a position we always have staffing available. So we're in a pretty good position right now, but a lot of work was done over the last year to rebuild the organization, so we have reliable fulfillment.

One of the pre-submitted questions, what sort of time scale are you looking at for the next edition of the BIO*Asterix product range? How has the initial response been to the e-commerce site?

The e-commerce site is doing everything we had hoped it to do, which is it's -- it's like getting paid for advertising. It gets us out in front of a lot of universities, a lot of industrial labs. We got the first -- I think we got the first order within a matter of weeks of being out there. It is generating inquiries about the use of itaconic monomers on it. And we see that continuing on. The next phase of development for us, as I mentioned earlier, is actually to drive -- is to partner with someone to pull a BIO*Asterix-enabled end product onto the market so that the rest of the world can see exactly what you can do, the special things that you can do with our monomers on it. So that is probably the next phase for us is to find a partner and to get an end product out on the market to energize the entire process.

Another pre-submitted question. Can you advise on what impact the following will have on demand for itaconic ingredients, increased revenue streams in 2026 from June 13 to June 20, 2025, 8 new cosmetic ingredients were notified with the Chinese National Medical Products Administration notification 2025...

I'm familiar -- the very important step that we received in the beauty side of it is that our hairstyling polymer was listed on the China NCI list on it. So we had sodium polyaticonate listed on the China NCI. The other ones in that release were not our products. The sodium polyaticonate was ours. That was a very valuable step. We spent a considerable amount of effort to get on to it because the global companies really don't want to look at your ingredient unless you have a China inky named on it. So even immediately after getting that, I think we got an order from a distributor out of Europe because we're able to achieve that. So -- but it was just one product, the other ones were not ours.

So in the last question -- another pre-submitted question. In the last presentation, you talked about the current superabsorbent ingredients we have available with the comparable market performance, but the cost was an issue. Can you elaborate on why it is so more costly? And are you looking for ways to remedy this?

As a company, what we look for is when the 2 carboxylic acid groups that you have from itaconic acid bring some value beyond the single carboxylic acid group that acrylic acid has. That is extraordinarily true in the Performance Ingredients that we have. It is also true in certain aspects when you get into paints and coatings. Superabsorbents is the last big segment within the acrylic acid market. And the 2 carboxylic acid groups, we do not believe brings any additional value. So we're on a straight chemistry to chemistry basis. As I've spoken about before, our underlying monomer, the pearl is produced by fermentation. Acrylic acid is produced by synthesis of fossil fuels. Fermentation will always be more expensive than chemical synthesis from a fossil fuel. Second of all, from the polymerization process, our entire polymerization, the entire potential for itaconic polymers comes from how difficult itaconic acid is to polymerize. Acrylic acid likes to polymerize. So it's a faster -- it's an underlying faster process on it. So we have a more expensive pearl and a more expensive process to make a string of pearls on it. So we never expect our superabsorbent on a straight cost basis to compete against a fossil fuel-based acrylic acid superabsorbent. What there is, is there is a small segment of the market that's potentially to access to be able to do it. But for right now, relative to the opportunities that we see for unique functionality that we can use in paints and coatings and in water solubles, we're focusing there. We are continuing to work, though, to find that 1 or 2 brands within the superabsorbent side, some purpose-driven brands that would be able -- would be willing to pay a significant premium over -- for a superabsorbent over what you can do with an acrylate-based superabsorbent. We continue to look for that. When we find it, we will pursue it, but we're not there yet. And our focus right now is on being profitable and working on areas that we think have the best opportunity for us to be -- to grow in the next 18 months -- 24 months.

Another pre-submitted question. Itaconix was a project partner in a funded grant looking into new branched polymers. Can you advise on this? And if there is any potential future commercial advantage to this research or any further progress in this area?

This is a U.K.-based research project that was run out of the U.K. some number of years ago. There is no activity in that area nor are we pursuing anything in the drug delivery area.

Another pre-submitted question. How are the Itaconix products going down with the new customers? Any chance of getting some feedback with testimonials?

The best testimonials is to see them show up on ingredient lists, and they are showing up in more and more ingredient lists. One of the difficulty we have in our Investor Relations is that every one of our customers thinks that we're the special sauce and they don't really want to let other people know about it. It's been an ongoing problem when you have a great specialty ingredient. So we are looking to that. But today, our brands are reluctant to advertise with their special sauces.

Another pre-submitted question. Any interest [Technical Difficulty] from agricultural fertilizer companies who can use itaconic acid in maize or [indiscernible].

Crop micronutrients is an area that we've looked at. It's a fairly long path to do it. So we are not pursuing anything in crop production right now. I have worked in that area. In North America, you need to go state by -- it is a state-by-state regulation process to get into crops on it. And it's a very long process and a very dedicated effort. For right now, we're focused on becoming profitable at a $20 million, $30 million, $40 million, $50 million company with the products that we have right now. It is a great opportunity in the future. But for right now, we're going to -- we're focusing our resources on being profitable and hitting our near-term revenue potential.

Another pre-submitted question. Any update on sustainable fashion?

We have a number of customers that have used and are looking to use our polymers in sustainable leather. That is -- we work with them. We don't have as much line of sight into what their activities are in the marketplace, but there clearly are formulations that they have that they are promoting to their customers on it. In terms of the specific dynamics of what's going on in end markets for sustainable leather, we don't have that insight on it. But we have well established -- we do have customers that have well-established formulations for more sustainable tanning processes using our product, and we're ready to serve them as soon as those formulations go into commercial use.

We had several questions about the share price. With the share price so undervalued, what do you anticipate the company moving to profitable position to turn the share price around?

Our focus is on profitability. We believe that when we get into profitability that we will open up the potential for a wider number of institutional investors to look at us. We have come through a difficult period in 2024 with a down year on it. So we have rebuilt it, and we're ready to go out and tell a better story -- our story to it to a wider audience. I do think profitability will open up a broader range of potential investors.

So during the presentation, [ E&T ] asked 3 customers cover 49% of turnover, if I read it right. In some industries that can be dangerous and the loss of 1 or 2 of these would be hurtful. Are you sure you are using -- keeping these 3 customers? You did let go a major customer last year due to smaller gross profit on these sales. If these sales were still profitable, albeit at a smaller percentage, would the overall result have been better and bring you closer to breakeven?

We are achieving 45% gross profit margins in our Performance Ingredients. That's well -- I mean, that's a very attractive Performance Ingredients business. We were not there a couple of years ago on that. So the customers that we have now are allowing us to have an overall 45% gross profit margin on it. And they have pricing that we've -- stable pricing we've given to them. So we do not -- we think we're in a fundamentally different position than we were 2 years ago with our customer base on it. It's not -- we believe we are going to keep those customers. More importantly, to look at is what a little sliver they were 3 quarters ago. They were a little sliver of our revenues, and they've expanded to that. Remember, in our existing customer base right now, there are some slivers in our first half revenues, similar slivers that we expect to expand into similar percentages. So on a percentage basis, as we grow, we think that 14% of revenues will come down dependence on any one customer. But that's because what it shows is we land and expand and there are lots of little slivers in our first half revenue results that we expect to expand.

Submitted question by Sid B. Do you see Itaconix becoming a reliable partner to the world's largest cleaning brands? Or do you see Itaconix sticking to the Tier 2, 3 brands?

We very much want to -- we very much have a significant calling effort on the global leaders. They know about us. They know about how our chemistries work. They can see that our chemistries are working in the marketplace. We have projects progressing significant sized projects with them. It just takes them out -- it takes time. The reason to focus on these smaller brands is to get to a profitable stage and to get your ingredients ubiquitously out onto as many product labels as possible, so that there's high certainty that your product is going to work, that you've been delivering and fulfilling customer needs for multiple years and that your product works on it. We are absolutely going after -- we're absolutely going after the larger players. And I think over time, we will be successful. Our scale inhibitors are that good.

Tony P asked during the presentation, any markets beyond the U.S. and Europe?

We are approaching global markets. We do have Croda working in odor control around the world. I believe they have revenues in Asia, Europe, elsewhere. We do have Nouryon working on hair styling. They have revenues around the world on it. We have started -- we have serviced a detergent customer in Australia. We believe we'll start expanding into parts of Asia with some revenues. So yes, the issue with the scale inhibitor remember, though, is that we are a replacement for phosphates. In other parts of the world, if regulatorily, you're allowed to use phosphates, a lot of times people are using them. So we need to make sure that people are trying to move away from phosphates because that's where an alternative. But we definitely are -- as we've spoken in prior presentations, we've expanded our regulatory footprint to cover the world. We have China, South Korea, Australia, New Zealand, Japan. We have the global footprint that we -- regulatory footprint that we need, and we are active. But from a resource standpoint, we still want to make sure that we reach the next level of revenues, and it's going to come in North America and Europe.

Another pre-submitted question would be can the remaining $5.7 million in cash equivalents takes Itaconix to cash profitability?

Yes. We believe we have all the resources we need to reach profitability.

That's it for questions.

Excellent. Excellent questions. Thank you, everybody, for submitting those questions. Happy to answer them. So you understand in depth what a great position we're in on it and really appreciate your support, particularly over the last 12 to 18 months where we did go through that difficult process of restructuring our customer base. We're in an excellent position and look forward to reporting great results to you in the future.

John and Laura, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of Itaconix plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.