Verde AgriTech Limited (NPK.TO) Q2 FY2025 Earnings Call Transcript & Summary

Hi, everyone. Welcome to another conference call to present Verde AgriTech results for the second quarter of 2025. My name is Cristiano Veloso. I am the Founder and CEO of Verde AgriTech. Thanks very much for attending our presentation live. I can see several people have joined. And if you're watching it later on or at any time on YouTube, thanks very much for your interest. And if at any point you want to reach out to the company, we are always open to feedback, suggestions, comments, please do not hesitate to reach out to us. Starting today's results call. As usual, in the first part of the presentation, we're going to go through the highlights. Our CFO, Felipe Paolucci, is going to go through the numbers, the results, the performance. And then at the end, I will be carrying out a Q&A. [Operator Instructions] So if we could please share the screen grant Felipe, I will start talking a little bit about this quarter but I couldn't start our presentation without sharing that if you are in North America, if you're in the U.S., you should not waste an opportunity to go on Amazon.com and buy one of our fantastic Super Greensand products. If you like it, leave a review, if you dislike it, leave a review and reach out. But so far, we've had an overwhelming number of people approving the usage of Super Greensand in the United States. And if you want a 5% discount, there is a code, you can add it to your checkout on Amazon, and you will be able to get an amazing 5% discount from our Super Greensand product. Starting then now with the highlights of our quarter. Yet, as we have already predicted as we have already shared all the way in the Q4 of last year, all the way when we started talking about it in the beginning of this year, the first half of 2025, we expected to see a reflection of what has been called now, the great Brazilian agricultural crisis, which we are still in the midst of and in honesty, if you are old enough like us to remember the great financial crisis, if you were like us, the markets in early-stage start-up company, exploration company in 2008, walking around Toronto, New York, it's just as bad now when it comes to agriculture in Brazil. There is a record level of farmers applying for creditor protection. There are some very eye-watering terms being achieved by farmers who are in financial trouble and the mood is quite horrible among fertilizer or any other agricultural input product supply in the Brazilian market. It's really bad, there was a big conference in Brazil last week, a conference called [ Andavi ], which is where you have the fertilizer distributors, all the imported distributors attend. So it's a B2B conference and the mood was terrible. So the mood was terrible on what we're witnessing. and above all, the general thing is that about half of our sales for delivery this year wouldn't have it taken place yet, i.e., farmers haven't been able to bite the bullet yet and buy the agricultural inputs, they will need for growing crops this season. It is a very challenging scenario. And what we have a confirmation of as well is that farmers who are buying. They are not necessarily being able to choose the inputs they want. It has now all become about what they can get financed. So for example, if you need several different agricultural inputs for your -- to grow anything, all the way from pesticide, herbicide, seeds, you will be able to buy that as a package from whoever you have committed your assets to, your collateral, your farm, your equipment. So it's been a very challenging market. Despite of this terrible great Brazilian agriculture crisis, which we've been talking about for the last couple of years. I am very pleased to report that the reduction in volume was significant in comparison to last year. So for Q2, we were able to deliver about 80,000 tons of product in line with what we had done in Q2 2024. Hopefully, we're hitting bottom. Hopefully, we're going to start seeing an acceleration. Hopefully, we're going to start seeing a normalization of the market for the coming years. And what I will add -- I will ask [Louisa] is to get ready [Louisa] once we are finished here, I want you -- I want you to switch and share very quickly our deck which is in our website because there's one slide, I think it's important to show and it's just an important slide which helps people understand the proposition why I think what we're doing here is so important. Going through with the other highlights of the quarter, we had a slight increase in our gross margin. We had a slight reduction in our sales and marketing expenses that is in line with the cost reduction. We keep doing those cost reductions. We've been replacing as many people as we possibly can with AI. The recent -- the recent reduction, I had 3 PhD scientists who I got replaced with AI plus an intern who is doing exactly the same as they were doing before, thanks to AI. We try to use actively. There's other examples and this has been allowing us to reduce the number of people in the company without compromising performance and results. We've had a positive operating cash inflow. It's -- hopefully, this is showing we're turning the curve. We're starting to consolidate before we can grow again. EBITDA, net loss, the numbers are there. We have a slight reduction in our cash position. However, when you consider our short-term receivables, they remain strong. And more importantly, we've been able to negotiate or to renegotiate our -- to renegotiate our debt moving the bulk of it as a long-term debt, which what I think is very important for all of you to understand is that this shows how our creditors understand the challenging situation as a consequence of the great Brazilian agricultural crisis and how they've been willing to carry on supporting the company. And I have no doubt or for no reason to suspect they won't carry on doing the same for the foreseeable future. So I will now allow Felipe Paolucci, our CFO and shareholder to go over some of more details, and I look forward to talking to you again to answer some of your questions. Thank you very much, Felipe, please go ahead.

Thank you, Cristiano. Thanks, everyone, for joining the conference today. I will speak a bit on the microphonic scenario. And first, as we can see here, we have the SELIC rate, which is the interest rate that we have in Brazil is very high. We are in 15% average net interest rate per year. We do expect a reduction to come, for example, in the Brazilian Central Banks projecting for the year-end 12.5%. And we have also JPMorgan foreseeing a better higher reduction by next year and close to 10% for the year. This has a direct impact on our business since we do have the loans currently based on SELIC rate. And also, of course, the cost of the cash for each farmer for everyone in the country going to be cheaper, hopefully in the coming periods. So this will help everyone to financing their activities and start to revert to this cycle that we are currently on it.

Felipe, if we go back to the previous slide. Okay. Farming is a highly leveraged business when you look at Farmers. And nothing is -- of course, the price of the cultural commodities rules everything. But alongside it is the cost of capital alongside of cost of capital. And there's no doubt that when the Central Bank in Brazil hiked interest rates all the way up to an eye-watering 15% per year, the Central Bank in Brazil wants stuff to break and is expecting stuff to break. And this is happening. There's no doubt. There is an awareness among the Central Bank that they have managed to break the Brazil agriculture sector. They have managed to throw gasoline in the fire of the great Brazilian agricultural crisis, and we can see the results impacting Brazil's economy. The forecast is very hard, as you all know, to try to forecast interest rates. And probably the bank or the group of analysts operating in Brazil, probably the best paid ones sit with JPMorgan. I don't know if those guys are the best ones, but they're most certainly the best paid ones, better paid than the Brazilian banks, that's for sure. So I would expect a high level of caliber of expertise, knowledge and capability of forecasting stuff. So I would really like to think that the expected decrease that JPMorgan has on interest rates will materialize. Because if it does, if JPMorgan is right, and we can see the Brazil interest rate cutting by nearly half before the end of next year, this might really consolidate the end of the great Brazilian agriculture crisis and hopefully, the beginning of a new virtuous cycle for Brazilian agriculture. And so your fingers crossed, JPMorgan is right. This is very material. And this would be a humungous change in what the next month would look like. Please go ahead, Felipe. And just going back, just we're going to -- on the notes of the YouTube, but the source there is wrong. So it's not the 5th of May. The date of this forecast is a week ago. So that is wrong. And something else I've noted, go back all the way to the beginning of the presentation, Felipe, please. Go all the way back, right at the beginning. No, it was there. So it was my bad that right at the beginning, I didn't remind you that our presentation contains forward-looking statements and the actual results might differ, but it was all written there. So make sure you read this slide carefully before you carry on listening to what we're talking about. Please go ahead, Felipe. Thank you.

Yes. In terms on currency exchange rate, what we see now -- what see -- that we had the devaluation of Brazilian real in the last period what helped in the terms of costs. However, it does not help in terms of sales revenue per ton. However, even if this current situation in the global market, we can see that actually the exchange rate is quite -- it's not changing a lot in the last few weeks or few months. We can see that yesterday or last Friday, for example, we had CAD 1 costing BRL 3.95, which is quite similar from what we've had in the last 2, 3 months, so expectations now are that this won't change a lot, at least what's the banks are saying. So hopefully, as much stable, it gets better for the business, better for everyone. Although we know that once Brazil real gets weaker, there is cost for the competitors, et cetera, gets higher and it's better for our clients, some of them with exports, but that's the current situation, and we are not seeing a lot of change in the short term, actually what we've reading from the banks and analysts. In terms of KCl price, we have a chart here that shows from a couple of years ago, since 2022, we saw that we had a very high price of over $1,100 per ton CFR prices. And then it went down up to Q2 last year of $309. And in the last year, we see an increase of close to 20%. And currently, the KCl average price is close to $355 million to $360 million. And that's the last three months around, it's quite stable again as well. So nobody knows yet what's coming, but at least it's better than last year. And hopefully, it gets like this, it's better for the business, it's better for us, for example. So I do not have a have here anything for next year yet, but we do not have inputs saying that it should be higher or less than this -- the current price. So we're working with this price and being competitive in this current price that we have in the marketplace currently. In terms of Brazil agricultural market, as Cristiano mentioned before, we remain in a situation which is very critically with a lot of farm being bankrupted and Chapter 11, among other strategies to try to postpone payments and try to renegotiate with creditors. So this is Q1, that's the number we have so far. We have an increase of 38% compared to last year. So we do not have yet of June, but hopefully soon, we're going to have this information. And what we believe is that the news won't to be good. We remain in a situation where we see some clients from us also getting to -- trying to get protection and also a lot of distributors who had last couple of months, we had, as everyone knows, it's public Lavoro situation. We had also AgroGalaxy, the 2 biggest and largest distributors in South America and Brazil. They are big companies that they are trying to renegotiate as well. their plans. What we saw is that, for example, AgroGalaxy has finalized the negotiation and Lavoro is also ongoing there. So hopefully, the situation gets more stable in the upcoming periods, avoiding credit risk and later receivables for everyone in the marketplace. In terms of financial and operational results, I think it would be good to highlight here that year-to-date, for example, G&A, we had a reduction from $2.4 million to $2.1 million in this quarter. And in terms of net loss, we also had a reduction in our loss to $7.4 million to $6.2 million. So at the end of the day, we had a bit of improvement on these 2 numbers. I think this was that I'd like to highlight. In terms of EBITDA, like I said before in the highlights chart, we had 0 last year, and this year we were minus $200,000 and we expect improvement. Let's see what comes for Q3 and Q4. In terms of our operational summary, now you can see here on the top of this chart, including freight, it's quite relevant to our business. And then the second table, we had an explanation and detailed numbers, excluding the freight impact because when we sell CIF, of course, increase our price. However, in the same terms, our expenses as well, we do not plan and do not work to have gains with freight, but to be as much more compatible as possible, trying to reduce the final cost to the farmers. The good point to be highlighted here is that we had an increase in gross margin at the end of the day, reduced when we remove freight from the numbers from 55% to 58% this quarter and year-to-date, even a better variance improvement from 52% to 57% on gross margin. A bit detail on sales, general and administrative expenses. What we have here is like we have a reduction of 11% on total sales expense and a reduction of 13% in the general expenses. So just, for example, year-to-date, legal and consultancy expenses, we had a reduction from $600,000 to $360,000 in the same period. If you remember, we had a lot of renegotiation. We are working hard to try to be able to reduce expenses that are not directly connected to sales, expenses that if we reduce do not impact sales and trying to be prepared for the situation with lower volumes and prices as we had in the first semester. So we will keep with this strategy of trying to reduce and mitigate as much as we can cost, expenses that do not bring sales. We are focused in to increase sales and volumes. And every time we are able to reduce something, we work only hard to try to reduce costs. And the last chart that I have here is related to debt overview. It was also the highlight, but it is quite clear on how we were able to reduce what we had in the short term to be paid, and now what we have for the short term and long term. So we came from a short term of over $38 million -- close to CAD 38 million to be paid in 12 months and now we have only CAD 227,000 to be paid. This will, for sure, help us a lot in the coming periods and bring more flexibility in alternatives and possibility to invest in our commercial area and sales and field people, et cetera. So on the right side of the table, you can see that we have 2 types of creditors. We have the adherent creditors and non-adherent creditors and there is quite a significant difference between both since that there are no adherent creditors, for example, had a debt reduction of 75% of the principal is also the key points -- another key point that they have a much lower interest rate as well compared to the adherent creditors. So the largest banks were adherent, which you expected that we negotiate with them and the other ones that we are ready to keep doing business and relationship for the coming periods and years. Well, that's it, Cristiano. Thank you, everyone. Now we can go to the Q&A session. And also [Salisha] is here already. I'm not sure if you saw, but thank you, everyone.

Thank Felipe. Just go back one slide on the debt renegotiation. When we started renegotiating our debt with banks, remember sharing some of those calls how important it was, but also how much support we're getting from the banks. I do think a single shareholder expected for the renegotiated terms should be as good as they were. I might be wrong, obviously, I didn't talk to every single investor, but after we put out the press release, everyone I've spoken to was very surprised in a positive way in terms of how beneficial those terms were for Verde AgriTech and how much -- how supportive banks were. So we're very careful to the banks who continue supporting us. And what I'd like to add here is that I have no reason to believe they won't continue to supporting us as the company evolves one way or another. So I am as a very large shareholder of the company, I am personally very chilled, relaxed about this issue. And that has allowed us, as a company, really to be able to focus on what really matters, which is the relationship and doing the best and being excessive about our clients. And that's where we've been able to put our efforts, and that's why we will carry on focusing, knowing that whatever happens, we will carry on with this support from the banks, one way or another. Before I start answering the questions, I would like to introduce [Salisha]. So we're very pleased to have hired the services of [Salisha]. She is a very seasoned Investor Relations professional, came highly recommended by one of the most successful IR executives in Canada who I've known for nearly a couple of decades now and the interaction with [Salisha] and what she will be able to help us or how she would be able help us, I'm very confident about it. Felipe, do you want to stop sharing your screen, so people can have a full view of the team and [Felicia] as well. For those of you who have been following the company for several years, you will remember the different Investor Relations professional we had and to name a couple. We have Jed Richardson, who left as an analyst from Cormark to join us as VP Corporate Development for a few years. He did an amazing job. Then we have Jaret Anderson who equally did a very good job until we had to cut costs in 2012 when there was another crisis we face with the President of Brazil, Dilma Rousseff making a lot of a lot of nice stuff or stupid stuff in addition to the craziness of cannabis stocks in Canada, which you all might remember how it already sucked all interest from resources for several years. Some people might argue until nowadays, it hasn't gone back to what it was before that. So we never had a Toronto -- we haven't had a Toronto-based Investor Relations professional since 2012. And I'm very pleased to have now [Salisha] helping us who has a ton of experience. I'll allow her to talk a little bit about herself in a minute. And -- but the way I see it is if those analysts are correct, and if indeed, the great Brazilian agricultural crisis might be come to an end, when you look at the potential what we can generate without any additional CapEx investment or without any additional hiring or increase in costs, what the sort of level of revenues we might be able to achieve, we believe it's very important if as many market participants as possible are fully aware of what's going on. As many market participants are fully aware of the cycles we went through, fully aware what happens from 2022, at least until now, the stage of consolidation, what were the crisis, what were the triggers, why it wasn't a Verde AgriTech issue, why it was a market issue. And above all, why we believe that as the great Brazilian agricultural crisis comes to an end, why we believe we will be one of the strongest companies coming out of it with a strong base of customers, with a phenomenal portfolio of low carbon specialty products and above all, with a very large production facility capable of jointly getting to 3 million tons per year in achieving a very significant ETFs to provide and we can carry on developing the market. So we believe it's very important that those news don't fall as a surprise to the market once this cycle resumes and things start recovering again. We want people to be aware of it and we don't need it to be a surprise. And that's the key missions [Salisha] will have, making sure as many people is excited. So it's a great pleasure [Salisha] to have you in the team, we're very excited and I will allow you to introduce yourself to our co-owner. Thank you.

Yes. Thank you, and thank you for the introduction. It's a pleasure to be working with Verde and the executive team. And hopefully, down the road, I'll have an opportunity as I get up to speed and start interacting with the shareholders directly, but a little bit about myself and my team. So I spent nearly 2 decades focusing on resources. Small cap is my origin within the space. And so this is my sweet spot. I do think Verde is uniquely positioned, as Cristiano mentioned, not dependent on the markets to raise funds, which is unique in this market today. And I think as the market turns, we're going to be seeing a different profile for the company. I've worked both in the U.K. and in the North American market. So I think our reach will be great as we roll out our IR strategy, but I really look forward to seeing our shareholders continue to follow the story and reach out to us and engage with us. You're going to be seeing us be a little bit more visible out there. And we want to hear from you. We want to know what your concerns are, and we want to know how to communicate the key points that you're looking for. I think we're doing a good job, but there's always room to elevate and that's what we're here for. So that's what I'd like to say. I'm looking forward to connecting with you as we continue on.

Thank you, [Salisha]. One thing you will learn now that our investor calls have been compared to a former Cuban dictator whose thing was hosting very long speech. Not be a speech, because I'm going to be answering questions. But every Q&A, I do my best to try to address every single question we receive, which has resulted in some of those calls lasting up to -- I think our record was close to 3 hours or something like that. So starting with the questions. And if you feel like I didn't answer your question and you want to go back and complain and repost your question, I will go over it again. So we see it as a dialogue and let's start. The first question here is about Enhanced Rock Weathering. So it is an issue where the science is evolving. You see the market participants in this space. You see the certifiers like Puro. For example, we are part of a working group by Puro, NASDAQ that's trying to come up with the standards and it's evolving. So even Puro is trying to figure out how they're going to be measuring carbon in that they're able to be issue carbon credits. It's not easy and it's evolving. And we won't speculate once we have something material, not just from ourselves but also from the market itself, we will come back and make an announcement. In terms of Enchance Rock Weathering, we haven't hired one yet. We had some good interviews. And it's something we're looking in a lot of detail. So the other comment here from the question is a thorough update. We won't make a thorough update until there's something material and a lot of it is beyond our control unfortunately at this stage. The other question here is about the status of Oby and then talks about Oby, of course, our rare earths spin-off. And then we have Meteoric who I mentioned about Meteoric, which is another rare earths player that raised a bunch of money alongside all the companies that have also raised money and evolve brokers and everything else. So the status on Oby, I will defer to the correct forum. I know plenty of you are also shareholders in Oby, but I think because now it's Verde AgriTech, we won't be able to, still time to talk about the Oby, but if any -- if there's any shareholder here who wants more detail with Oby, please do reach out, and we can go in detail. What I can comment because Verde is bang in the middle of that very exciting cluster of rare earths is that there's a lot of interest, of course, in rare earths. And I think people are realizing how fast the -- we're going to have robots. We already have plenty of them, but much faster. We're going to have humanoid robots and drones and help -- warfares will rely on the robots and everything and how all of that is dependent on magnets. And you don't have magnets without your magnetic rare earths oxide. As you know, I watched this weekend a film called The Boy Who Harnessed the Wind, a very good film to watch with your family. And it's very interesting without spoiling, but you see that film the importance of magnets to the world back then and nowadays are just going to carry on. And what I can say before I move on to the other question is that Verde AgriTech has a bunch of concessions, dozens of concessions in that cluster. It's true it did a spin out of some concessions with rare earths, but it's a very prospective region for rare earths. The other question here, there was no update on the order book for H2. Have the sales team lost its pace and/or have there been cancellations? So there hasn't been any cancellations of placed orders. I think that was a problem of putting that update in terms of being very opportunistic about H2 was at the moment, we stopped giving those updates, people were going to question the way you're very brightly here doing. There was nothing, I think we have said enough in terms of us seeing market improvements for the second half of the year. And we still believe and we're still working for improvement on during the second half of this year and hopefully beyond. A question here by ChatGPT. A Brazilian agricultural recovery could take -- could be several years off, if not longer due to prolonged debt repayments and exorbitant borrowing costs. How can Verde grow sales in such a terrible market? I love the fact you're using GPT and it's funny enough I was having a call with a consultant right now about GPT. And I think GPT really, you need to understand 2 things or AI you need to understand 2 things. The first one, which model you using, so are you using the free version, which frankly isn't much better than just doing a Google search or are you using the $20 version, which may -- or if you're really serious about AI, you should do what I'm doing and what Verde is doing, pleased with myself, which is go for the $200 per month version. And what you get from reasoning capability is absolutely amazing what has been created. It's -- I'm not going in detail of this business opportunity we are pursuing right now for Verde AgriTech, but I can tell you the ROI on this thing can be just millions of reals of what came up from some hard work with GPT this weekend. So it's very exciting. But it's really about the dialogue. It's really about the product. It's really about -- there's no like AI. I'd like to say that AI isn't independent from you. So you can't, oh , I know I checked with AI. Because of this conference, because of this interaction in terms of prompt and how it evolves and how it criticize and has a follow-up. So it really, really, really depends. And also it depends whether you're using the reasoning once. And even the reasoning one, how you're using it. But if you do a scenario analysis, yes, it can take a lot of time. But when you look at cycles for agriculture and even if you look at short term, we've seen and we've all seen how fast it can recover. And there's an article I'm actually going to write as well. I should post this in the coming weeks. This is a very interesting scientific paper, which was published a few years ago that looked at how you have accidents in potash mines with a certain frequency. And I want to revisit, of course, with GPT, this article and try to understand and publish something about whether or not there's another one due at any time. So there's a lot. And of course, there's a company, what we -- the only thing we can do is the [SOX] would be proud of us to focus on what we can control. And what we can control is listening to our customers, having the best relationship we can possibly have with them, delivering the best products that we can possibly deliver, and that's where our energy really is. And in that regard, GPT has been phenomenal, absolutely phenomenal. For example, you guys talk about AI, again, you're very excited. But for example, and that's one of the things we've got with [Salisha]. Salisha when she was joining, I said, okay, just [Salisha] the condition for you to join, you're going to have to subscribe yourself to the $200 per month version to start using it on everything you do from now on. But going back to just one example, okay? For those of you who are more familiar with Verde AgriTech and what we're doing, you know that one of the big advantages we have in our project is the fact that if you are a farmer in Brazil, and if you grow corn and soybeans, it's usually soybeans and then corn, with our product, you can apply just once. You can apply potash just once that will supply enough nutrients for both soybeans and corn, okay? So that's something we've been very verbal, we talked to the farmers and everything else. But one thing GPT really helped us though comes now, and there was a lot of iterations to exchanges with it, which is, okay, how can we make it even better for farmers. And I'm here talking about -- for those who are familiar, I'm talking here about using 5 pro and either deep thinking or deep research or now there has a thinking option as well where you think even further, but what it came up with, which is more important is in Brazil, it's very common for farmers to -- when you're planting to apply phosphate via MAT, while they're planting, which is a box in your machine that will have seeds, you have another box machine, which will have MAP. And it's very common for those farmers to apply both. So while the planting or applying those, which we knew that the performance of the equipment wouldn't be as material because of that, but we never really were able to quantify. And with GPT, after all those discussions, we came up by adding phosphate to our products and allowing farmers only to have seeds when they're planting, the gains GPT calculated in productivity for equipment for farmers is astronomical. It's so advantageous once you take it out. And then you have -- and then you come up with a list of equipments, which are customized only for planting when you don't make it, you have your MAP box where you are applying that at the same time. And the gains raw material. And the reason planting is so important, if you watch the film, The Boy who Harnessed the Wind with the family, kids -- especially good one for kids as well which you see a different reality and perspective. You will see how the planting, how the planting is important, and you will see how in the film he's waiting for that certain level humidity before he can start planting. And that's why this is so useful, so phenomenal. Because by -- with moving MAP, as soon as there's humidity, you can go really fast and get planting done, which in lines your growth -- your window, and it makes it easier for you to come up with the second crop, which in Brazil is either corn or cotton and give more time for the other crops as well to reach full productivity. So I don't know why I start talking so much about it, but I just got really excited and I hope that was informative for everyone else. Another question here about carbon. I think I went over it once we have something material talks about some research people saying they can do that in a certain time horizon. Yes, it depends on the methodologies. It depends on the interpretation of data. It depends on a number of factors, and I think the bottom line is even pure NASDAQ hasn't fully validated the methodology yet, which they will be relying on to issue carbon credits. How can anyone say for sure, that they can come up with whatever is needed in the future 250 days. So it's really evolving. There's no doubt there's a lot of outfits trying to make money from different ways but we're doing our best. We're doing our best there. There's one question here talks about many initial results. So he thinks he's fast. He came up with a potential for carbon capture. What I can say is that from a potential perspective, the number can be even higher because that was using an average for 3 billion tonnes of resources if you use an average for -- for example, what you're mining, that number is even greater than what we saw in the press release, but not material. So it's not -- I think it's just speculative really to address this issue because the science isn't there yet, but we're doing our best. The other question. You mentioned in the last call that there are available options to address extremely high credit debt and the debt servicing challenge that Verde will face next April. Can you please tell us what specific options are available in the anticipated time line for execution because petition has started already? Working hard, and we're always preparing for the worst and hoping for the best. And as I said right at the beginning, we have been able really to focus on what matters the most. We're quite thrilled about how to resolve in all sorts of different scenarios. The other question -- is there an average to improve accessibility for high potential buyers able to pitch, to grow crops, dealer networks, a larger carbon growers were as far as that it can engage multiple line producers at once driving the slower and extensive sales method of going farm to farm with little insight into customer fit. We do a lot. And we hope -- we hope we're doing the best, but if you want to share some ideas, which I think you might have some ideas or -- yes, please send mail reach out. I want to listen to your ideas here. In the U.S., there is rapid growth in product-based carbon-based programs such as the Bluetree carbon program, that combined sale of biologic inputs like [indiscernible]. This model is operating new income streams is a similar coop opportunity exploring -- yes, there's a company called Indigo in Brazil trying to do that with -- it's a big American company with not as much success as one wished. It's something that is plausible -- something that's plausible both from a carbon avoidance and a carbon reduction perspective, both from sucking it from ERW, but also from avoiding the amount of carbon that gets issued when you apply KCL. We've spoken to a bunch of people from the players, from the partners, but we haven't really had any material success in that regard. Likewise, I'm not aware of any pharma doing that in scale in Brazil despite of some very interesting programs, for example, hosted by [indiscernible] and other multinational companies. There hasn't been anything meaningful, but something which most certainly is in our radar do. Brazil is beginning to scale its -- next question. Brazil is looking to scale it's traceable cotton ecosystem from field level tag to retail rollout. And on the greenhouse is position itself in this market. Does the company have a dedicated brand or focus team working to integrate K Forte into carbon transparency focused supply chain whether through a partnership with traceability platforms. No. We have one conversation with one executive who's behind the Brazilian exporter. But if you -- we will have a look, Luisa, can you write down? [indiscernible] see what they are. And if you have any other ideas, this is something certainly worth because to put more contacts here for more people. For example, in the European Union in a few years, really everything you buy here like load wise, will need to come up with the CO2, the carbon footprint. And this is an immediate gain we can offer to farmers because we have a much smaller footprint in comparison to KCL. So this is something in our radar. And one other thing we're doing, we're doing an important economic trial for soybeans and cotton as a system starting in a couple of months. So that's something else important from an agronomic perspective, but it's relevant. This is -- and it's a massive market, as you know. Something else which is quite interesting for any of you who has already been reading about microplastics is, of course, once you wear 100% cotton, how you minimize microplastics getting into your body. So I think natural fiber organic, I think, will be a growing market and even busy, we need to grow just the fact that we can get into it with carbon is big on its own. Next slide. Over a year ago, we did a press release about the biofuel industry with the reduction, we are still pursuing. And one thing we're doing, so I did this cost reduction I've mentioned, and I allocated that money to do even more trials, economic trials. So we're going to be starting three, four grow trials with some of the main consultants in sugarcane, and we already, of course, have some customers. So it is a sector that we are looking at. And of course, the benefit you have both from sugarcane and eucalyptus is those are very large corporate growers that very quickly can turn our lock around. So that can be no doubt explosive in terms of growth, and we are fully aware of that. Another one, with growing evidence that soil-based MRV had been overestimating our carbon removal, okay? That's right. As this protocol to align with new standards like soil, water, gas phase measurements. There's a bunch we're doing a lot, so that I guess we can say, yes, it seems to see carbon buyers more cautious towards the [indiscernible] projects, correct. As far as like [indiscernible] and our only fund research focused on the [indiscernible], if adjusted MRV stands connector measure sequestration. It's [indiscernible] adapting, its ERW program stay competitive for early-stage carbon funding. Yes, that's exactly very well put what's going on and why we think it's not material yet to be talking too much about it. I think some of the challenges are in the question there. Since K40 low potassium concentration requires a sixfold higher application rate compared to KCL has the company run trials blending the product with various potassium micro availability is the required application volume in order to reduce delivery economics. We are actually doing some trials. We're going to be starting a bunch of trials where we're going to be trying to do that curve and hopefully, we're going to be able to show how you can reduce supplications. We're not just looking at K40 alone, but we are looking at the full-on combination. One thing, those of you who like GPT use 5 pro, use the thinking model if you don't have 5 Pro, but talk to it about how elemental suffer added to our product increases the availability of our nutrients and brings an overall benefit. You need to work out in the prompt, also do a prompt on when we combine our product to different phosphate sources, for example, MAP, where the synergy comes from and what the benefits are so there will be a lot of interesting sites there. And of course, we have the insights, we have the science. And what we're doing now is with this phenomenal tool, now we are doing the actual field trials to bring the hard field evidence for farmers. And we're doing the regression. So we're doing the 4 points, and we're looking at 50, 150, 75. Anyway, the percentage, so we can draw the curve and look at what the dosage look like or if this can be any sort of reduction, especially when we put sulfur and phosphate. But in addition to that, yes, we have the microbes, as you know, and we have similar trials going on there. Next question. With customs to proven quantify superior benefits and cost savings, which is the leading trending from breakthroughs and strategy where the sticking points all come from. The sticking points credit, farmers want to be really flexible at the moment to buy what they want to buy. They're buying what they can get credit to buy. And that's where -- that has been the big -- whole big problem with the great Brazilian agriculture price. The superior benefits, cost savings, leaving any meaningful breakthroughs in strategy where the sticking points of farmers getting large-scale permits. I think I've shared they continue ongoing directly expense dialogue a ton. Yes, up 2% rather than just second guess and experimentation and down the farms personally open from direct asking question what they need to be offered [indiscernible] -- yes. The answer here, Mark, is yes to those questions. We're doing our best and they're confident as well with the new team and how we've specialized our teams as well. So as you know, we have a team that only does only prospects, the team that does the sales, and we have this customer success team that looks after the whole relationship and growing this relationship. So there's a fully equipped team just doing that. Could potentially or is Verde considering or making significant moves while making meaningful contact and dialogue with the biofuel industry and long-haul couriers on both supplying parting with their business on developing unused grade pass with added capture quality, especially in context of potential own couriers and then any long high volume weight is presumably inhibited on many fronts and electric, but interest in developing low carbon developers for their own business o business on ERW carbon offsets future own carbon figures regarding freight. Answer is yes. And there's -- of course, there's the pushback in terms of methodology to quantify organic -- carbon being captured, but we have those dialogues also going on. Unfortunately, it seems Amazon Potash is going forward as it currently stands. And I felt the company's position was a little innocently naive in feeling this was unlike in trying the way forward. Will Verde be at least cautiously lightly monitoring the potential threats going forward? It's not to become surprised, I believe by any strategy to break any major success of imported. Okay, I still don't think this will ever be funded and become a mine. Even if it does, the level of production there is fraction of what Brazil consumes. It's a tiny, tiny fraction of what Brazil needs. Even if it scales up massively, it's not going to make. Let's just remember, let's just pause here. Luisa, can you share the screen of the investor -- can you hear me?

Yes, I can.

Can you please share the screen of the investor deck, the slide where we have that financial model. So as I would like to remind you our presentation contains forward-looking statements. Everything should be read in conjunction with our National Instrument 41 filed reports as it contains in all the forward works and all the legal work and everything else. And then if we go to the page where there's a financial model there, which looks at what economics would look like when we can hit full utilization of our existing production facilities. So once we can get to 100% of production capacity. And by hitting 100% of production capacity, all we need to sell is for about 3% of the current market. 3% of the current market that grows about 3% per year. So we wouldn't even displace anyone, it's purely the growth, the market growth. So if we can get to that 3% of market share, you can see what happens to our -- you can see what happens to our economics if you go in the deck and share the presentation. Luisa, I was giving a lot of times talking about here, hopefully it's going to be on the screen by now. But what you will see as an assumption from that deck, which hopefully will be very soon on the screen...

Yes. Sorry, I had a problem.

No worries. We will look at the potash price which is much lower than the current potash prices in that assumption, so much lower potash prices. You will see on that slide what sort of market share weighted average we're looking at. So we're not really doing that model, looking to sell just -- adjacent to our operation, we're looking at a big radius of just short of 1,000 kilometers, so we can spread the product. And very importantly, the capital expenditure to get to that number is nothing. There's no CapEx required. And even the additional investment required in terms of sales team or marketing, it's not material. We don't need much more. I mean if you just look at the -- some of the stuff that we're working on, just with the relationship, some of our customer success team has with some of those corporate players where we're doing the trials, working consultants, everything else. Just that alone can generate that sort of number, which I was hoping would be on screen when I finish saying that, and it's not. So while you share the screen. Let me turn on to the other question here, which has gone all the way up to the top. Next question, a quick potential of Verde giving what serious thought and forward-look analysis to Brazilian listing for the company. We've looked at Brazilian market, I guess we know the Brazilian [indiscernible] relatively well. And it's not that liquid, especially for small caps. So if you are in the index and then makes a big difference. But if you're a small cap, it's not that great. The other problem you currently have in Brazil. You can see, for example, AgroGalaxy, the -- one of the fertilizer distributors in Brazil that had serious financial troubles have to restructure its debt. A lot of investors in Brazil lost a lot of money out of that. There was a lot of dilution as a result of their troubles. And a lot of investors are a bit wary at the moment of Brazil. It's -- short term, it's not a great market. So going back here, so I can see Luisa is sharing his screen -- so you can all see after we went through the forward-looking statements, you can all see this potential economics at fully installed production capacity. So you can see at an EPS of about $0.90 -- earnings per share of about $0.90, okay, if we can deliver what we're focused on. That's what the team is focusing. That's what we are working very hard to achieve is getting to that $0.90 and to get us to that full plant usage. And you can see the weighted average market share there of about 4%. 3% would be of the total market, but we can see how we've spread it. And of course, that has an impact on the overall cost. And this is what I get everyone in the company, including myself, focused on and go to bed in thinking about how to get there, how to work hard to get there as fast as possible. And this is it and more importantly, I have no reason to suspect why or why this shouldn't be within our control. This has to be within our control as a team, as a sales team, as a market, it has to be within our control. We have to carry on working hard and getting towards that full plant utilization and hopefully coming up with those numbers as soon as possible. So anything that really changed the focus from us for delivering that is, I think, energy that we're wasting I think -- that is with energy. That is where the conversations are with our sales team. And that's where our priorities. That's where 100% of our priority is right now. And it tries to focus as Steve Jobs like to say, you're really only focusing on when we stop doing stuff you would love to be doing alongside -- there's a lot of stuff we would love to be doing alongside what we're doing and thinking and looking at. But this is -- and this only depends on us. That 90% EPS, that's what we'll be seeing. That's the number in front of everyone in the company's right now. So going back to the questions. Thanks, Luisa. If we go back to the Q&A which is phenomenal because every time you go back, it goes all the way to the top again -- at the listing, there's another question. Do you have any mentors you occasionally meet who are successfully veterans of mining companies and may be able to give you a thought on site and show on strategies that have been mitigated for many market factors in the changing world over many decades. Experience in a perspective, obviously, was useful to launch and develop and perhaps someone who can help in relate to stress and situation. It's a very good -- and thank you for that. I'm part of an organization called YPO. Have a look at Internet YPO, but it's a phenomenal organization and it's all about sharing your challenge, it's -- I won't go into much detail. The website will have plenty, if you're interested I can see, but it's all about what you wrote for this question. So I'm very lucky to have this support network but thank you for your comment there. It was a good one. Because -- and going back, this network address not just the mine issues, but the financial issues, the government relationship issues, the being a public company issue. So all of those are the personal impact it has. So it's a phenomenal organization, ypo.org and if anyone in the call, if you don't watch in YouTube can -- is interested in knowing more, please do reach out, and I can collaborate. It's been -- it was introduced to me by one of our shareholders out of California. He told me it was going to change my life. That was a few years ago and has really changed my life. It's a phenomenal -- absolutely phenomenal organization. Next one, Verde has put a lot of money into R&D, given the current financials, managing what when a necessity and need being given more direct calculated in the model of the attention calculating the opportunity for cutting costs in concentrated time and resource rather than rolling forward with everything at once on all fronts. I completely agree. . It's all about what we've just spoken now in terms of focusing and 100% agree. Next one, with the introduction of result-regulated carbon market and the [indiscernible] initiative promoting low-carbon ag and supply chain efficiency. Brazil is besting the new phase of climate governance. How are you positioned into a section of policy implementation? Is this shift a near-term opportunity? I don't think it's an internal opportunity. So we're not seeing anything concrete going on with farmers or any change. I think it's a step in the right direction, but nothing material has happened. It was certainly monitoring then as it devotes and matures, hopefully, we will benefit from that. Next question, the rare earths market has seen a resurgence of investor interest and liquidity flow. What's the status of completing OB share issuance to holders? And what is the time line for an IPO? So the share issuance to holders has taken place. So every Verde AgriTech shareholder who was a shareholder I guess, 27th of January, which was a record date as has an entitlement to shares in OB and you should reach out to your broker. Your broker has already received a bulletin by CDS, the Canadian depository system covering that, and your broker will have to contact the registrar for OB in Australia called Automic, the broker has -- but let's say has all of that in writing came officially from the Canadian securities to them and he will be able to allocate those shares to you. So this is all taking place. In terms of time line and strategy discussions for OB, I think we need to have a designated forum for OB to talk about. Next question. Listen, there's lots of interesting start-ups and names mentioned in this -- on those questions. Can you please write all of them down at the links and so we can look into detail. But there's another one here called Syntopa, proving that microbes can significantly enhance silicon mineral dissolution, accelerating the wedging rate. So let's have a look at what they're doing. We have all bioevolution, we have all of [indiscernible], we're going to be adding all the microbes as well, but let's see what else they have. Next question, how are things moving regarding OB and Autica. As I said, yes, it's exciting. But in terms of OB, we can talk that another firm reach out, and we can address that. How rigorously with your own human PhDs, researchers are you reviewing any generated research issue no cost of errors of machine understanding. That's a good one. That's a good one. So we've probably been responding to the fact we've reduced three of the -- and we have that were more like desktop and they were more like doing reports and validating statistics treatment. So this is something we have someone else, which is this -- in turn, we have to replace which is going through everything and cross-check and cross validation to make sure there's no colossal errors. When you use the pretty cheaper models. There's a lot of that. Once you migrate to what we have now, for example, in 05 Pro, it goes down a lot. It's still not zero error, but it goes out significantly and we try to. Within the bigger -- the broader team, we try to make sure anything going out to an assumption gets properly reviewed. For example, I spoke a little bit earlier about this phenomenal opportunity. This is an opportunity that AI has helped us to uncover. It's not the plan to want something else. And I was talking just before this [indiscernible], I was talking to this consultant has been helping us and selling some. And have you guys ever used AI? I was bringing all of that to him. And of course, he's an expert. He's a technical ag risk expert. So what I ask him, I shared the first good piece of work that was done after probably 20 years of hours of work in this thing, but I told him, "I want you to go through, comb everything there. And I want you to tell me what's correct? What you're not sure about if you're going to research and what you know is not accurate. So we don't take it, we don't go blindly on in terms of the deliverables of AI. But there's no doubt, it's amazing to see how it has improved since it began a couple of years ago. And as Sam likes to say, what you're using today is the worse AI you are ever going to use because tomorrow is just going to get better. On the practical side, I seen several questions by the website or former never received any answer. That's not a very professional in my honest opinion. So thanks for your feedback. I will hope with Selicia, we can now review that, and it should that doesn't happen again. If there's any of the questions you sent and haven't been asked it yet. Gabriel, please send it again, and we will address it. There have been any meaningful process on establishing clearly what is stopping farmers in addressing successfully or progressing forward with solutions with many of the most receptive to Verde products in trying them or not committing to convert to large scale or completely and continually each application over KCL. You have talked the teams working more closely and scientific customers to prove and quantify benefits and cost savings. But is this leading to any meaningful breakthroughs in strategy or where the sticking points are for farmers for getting large-scale permanent conversion commitments or commitments of them coming if farmers certain requests are met. Is there continued ongoing direct and split dialogue rather than just second experimentation narrowing down with farmers personally opening and from direct ask requests? So I will spend a little bit longer answering this question, I'll try to unfold and go into more detail. Please feel free to send a follow-up question. several questions here. But there isn't one reason, okay? If you're a farmer, you use our product and you don't carry on using it. There isn't just one reason where that was the trigger. There are several reasons. And with them, we've mapped them and we try to address all of them, and we're trying to get better at addressing all of them. So I won't be exhaustive in terms of listing the reasons, but I will give a few examples here. And I hope by giving those examples, I can also answer the other questions which you asked here, Mark. But the answer would be credit. We can't always be as aggressive in terms of providing credit and some of our competitors lots of the reasons are because sometimes they've already done a bot or that collateral is committed or the rates which are offering are more aggressive. So that still happens. Another reason is farmers in Brazil, they have a lot of attention, of course, we have lots of salespeople going on. So sometimes we just purely still lose a sale because our relationship wasn't as strong as it should be. It's getting better, but it's still a reason. But there's a third reason, which is sometimes, farmers they expected a material improvement by switching from KCL to our product, and they didn't necessarily see it because there wasn't enough people of farmers have fallen yet up, which is also what -- but from our technical team, that's what -- why we now have this customer success team that's really following closely every farmer or every larger farmer who is using our product and showing on a continuous basis, an improvement, it is happening. And the fourth reason is that depending on the situation, our product will reserve some issues, which you have with KCL, but it won't resolve others. So for example, someone said the product is less concentrated than KCL, so has to go and apply more. So sometimes we fail to cure the other benefits we have when, for example, we combine all the nutrients and create new materials out of our product. So in those research protocols I've mentioned, we're already focusing on how using the new generation of products we have with added metrics, how we can reduce the number of applications. What I want to do is -- you to do. Just to ask the marketing team to do that in Portuguese, it's nearly ready, but -- so we can have that translated as well and we can circulate that but I want to show how when we use our new product us, how we can reduce the number of applications from 7 down to 4 the number of times a farmer needs to go in the field and apply something. So it comes down from 7 down to 4 in terms of eucalyptus, how we can go down to 3, 4, down to 1. So what's something in terms of that sort of operational benefit written both in Portuguese through our blog but then also, let's get it translated and then we can share that sort of. So this is something we're showing, we're doing the ground trials, and it's a construction, especially for the farmers who use the products. They're happy with the results, but they say, "Hey, what else?" And the other one I want you to do, Luisa, can you hear me all of that?

Yes. I can.

Okay. And the other one I want is coffee. So coffee especially with us and the phenomenal results we have is what I think that part is already published. But it shows on our example where instead of making like three applications, you're cutting it down just to one application of potash and how we make it easier on H1 for the farmers. So this is something which takes time in each talk and but we'll get there. We'll get there. That's why when I talk about those economics and get into a $0.90 EPS, that's why I like to say it has to be within our control, it has to be within our control of our team. It has to be with our control as management. All we need to do is to carry on with [indiscernible] as effective as possible, carry on, of course, look for the situations where we can have bigger volumes coming out of some developments, which is what we're doing out of sugarcane, for example,eucalyptus. And hopefully, we will get there. And hopefully, when we get there, Solution have done a lot to prepare the market for that. Hopefully, the great Brazilian agriculture crisis has come to an end, and we should all go back to the good old glory where we should be. Could potentially or is Verde considering or making significant moves or making a meaningful contact and dialogue with the biofuel industry and long-haul, we've answered this one. Start from the bottom now. Correct me if I'm wrong, but I think that today, Verde, owns 53,000 hectares of land in Brazil. That's wrong. That's exploration concessions. That's not actual land. Does the exist any possibility of finding more rare earths outside of the land that was spun off? Yes. Yes. Yes. It's highly prospective. Anyone who looks at the geological maps, anyone, I don't need one, the rest of the concessions Agritech has extraordinary prospective for rare earth, no doubt about that. If so, how much of the 52,000 hectares might that potentially apply, I don't know, but it's something we will have a lucky to it and potentially sample. And if we get results, we can report. How many hectares does own or control? And is there any possibility of them outside of? Yes, as an answer we have. Do you vigorously analyze and review any AI research with human cut? Yes, that's the answer we review. I think we finished I think we're finished. So we finished all the 36 questions. So I think Selicia, before, because it was your first day, I think people went easy asking questions. I think people went easy on you. So next quarter, there will probably be more questions. And as I said, right at the beginning of this call, it's a great pleasure to be the co-owner of this company alongside of all of our shareholders, everyone in this call. If you think this -- if you're watching this on YouTube, if you think anyone else should be listening to you, should know about more of the company, please do not hesitate to look this video and to share it and to share it with other people. Thank you very much. I look forward to seeing you again talking to you again throughout the next few months, but certainly, in our next quarterly results call. Bye-bye.