Verde AgriTech Limited (NPK) Earnings Call Transcript & Summary

Hi, everyone. My name is Cristiano Veloso, I'm the Founder and CEO of Verde AgriTech. I would like to thank you all for attending our call to present the results for the fourth quarter of 2022 and the full year of 2022. If you're watching this presentation online, please subscribe to our YouTube channel, please share the content so all the people who might, like you, be interested in Verde AgriTech on our trajectory, on our growth, on our plans, on our achievements, please make sure you subscribe and you share. I also would like to take over 100 people who I've just checked now and are attending this call live with us. I look forward to interacting with all and each one of you throughout this presentation, and I hope it will be as exciting to all of you as it has been for us as a journey and the excitement we expect for the coming years is shared among all of us. Today's presentation, we're going to organize it in 4 different blocks. For the first block, I will be addressing Q4 results. I'm going to be going into a little bit more detail about the -- what we saw happening during the quarter. I will be talking a little bit about the guidance for this current year and what we are seeing happening in the marketplace at the moment. After this first part of the -- of today's presentation, our Chief Financial Officer, Felipe Paolucci. He's going to go into more detail on the numbers, on the results, on details. We've tried -- we've looked at the several questions we've received and we've tried to address as many of those questions as possible throughout his presentation. And that will be the second part of today's presentation. Then in the third part of today's presentation, I'm going to be talking a little bit about our vision for the coming years. And very importantly, we welcome and we recognize the several new shareholders we have, including the several new shareholders that have joined us in the last few days. And I think it will be important for everyone to see the reason not just myself, but everyone else in the company works as hard as we do in terms growing and moving the project forward. Then in the last part of today's presentation, we will be going as usual over the several questions we have received, and we will make sure we can discuss each and every one of those questions. Lots of you have very kindly shared with you. So starting today's presentation. [Operator Instructions]. So in addition to the ones we've received ahead of the meeting, you're also welcome to be sharing questions throughout the presentation. I will now share my screen, so we can begin the presentation. As usual, before we begin I would like to remind you all that our presentation contains forward-looking statements. And in addition to that, we'd like to be very straightforward about the risks and what it is like being part of a growth story. So if you like saving [indiscernible], if you're risk-averse, if you're looking at very short-term gains, if you're expecting a slowdown growth so the company can pay dividends in the near term, we're not a traditional potash company. This isn't a commodity we're selling. It's a new product with its benefits and disadvantage. If you don't do well with changes, probably we're not the best company. It's natural. It will happen. If you don't understand how difficult it is developing new technology and market for innovative products like [indiscernible]. But, by all means, and I think it's important to talk about that, given how many new shareholders we are very happy to have joining us in the last while. Please do join our journey, if you truly believe we can together be changing the world into a better place. In my update, there's something quite special there as well, in the third part of the presentation. If you're looking for a real-world technology company, if you understand how the development of our project and what we're doing is a significant way for protecting the Amazon Rainforest. If you understand how by switching from conventional chemical fertilizers for our technologies, how we can truly make the planet healthier, how we can start growing healthier food and very good idea as well is to watch a very good documentary available on Netflix called Kiss the Ground. Finally, the same way we should all be very worried about the health of our gut microbiome for different reasons, the soil biodiversity, the soil microbiome is just equally as important. Starting with our presentation today, you -- if you're in Canada, if you are in the United States, you can go on some of your local garden shops, but you can also go on amazon.com and you can order our product. It's sold in the United States, Southern Canada as Super Greensand. You can read some of the several product reviews we have and you can even use our 5% off coupon code with the little code shown on this screen. If in China, we are also exporting the product to China, Thailand as well. Please reach out to join those jurisdictions, and we can also introduce you to our local distributors there. Starting then with the presentation. We're going to be talking about the past here and to a certain extent, also about what we are seeing in the first quarter of this year with some implications on specific guidance for 2023. But as a company, I have to say we're very focused in the growth. We're very focused on the next 5, 10, 15 years. You all know the number we're going after. You all know we are here on a quest to 50 million tonnes of annual production. You all know how important we believe this is for the world, for Brazil, for farmers, for everyone's health. So this is really what drives us on a bigger picture. So having said that, we recognize how important as well it is, learning from what we see in the marketplace and using that to improve decisions as we go along. The first point I wanted to highlight here on this presentation, is the roller coast we've seen with potash imports. We had a very atypical year in 2022 when the war triggered a significant wave of orders for potash, definitely benefited from that because there was several people approaching us worried about shortage of potash, placing orders. So Q1 of last year was extremely busy and what wasn't completely known at the time as well, because everyone at that time though it would be a major shortage of potash, was that this didn't happen. As we war progressed in the other months, it became clear that there was no shortage of potash coming into the market from Russia or Belarus. We saw record amounts of potash being imported into Brazil. So you can see in the greenish bar how much more it was in comparison to 2021. And at the same time, we saw a very big increase in potash prices on the back of the war. In the second half of the year, we -- the opposite happened, there was a major glut. There was plenty of potash loaded in storage facilities all over Brazil and prices started coming down. We had several reports of significant amount of potash exchanging hands at prices much lower than were being advertised. That price came down very hard and if at some point, we and everyone else expected in the first quarter of the year that there would be the shortage, the opposite happened. There was too much of it in the marketplace. What also happened in Brazil, a lot of it to do with climate, a lot of it to do with potash prices being perhaps too high is what you can see on the left-hand side of this slide. Potash consumption in the country dropped significantly, significantly. So for us to grow about 50% as we did in 2022 in a year where our competitors actually saw their results shrink by approximately 10% is something I'm very proud of the achievements delivered by our team that worked very hard on delivering those results. What also happened, and we can see on the right-hand side of this slide is that the consumption, the actual consumption declined a lot. We can see how the national production of potassium chloride decreased again. This is the only potassium chloride, the only KCl line in operation in Brazil. I remember when I started about 20 years ago, the production was about 400,000 tonnes. And back then, people were talking about that mine running out of ore. So you can see how it keeps shrinking. And the -- what's exciting in terms of the power of the Brazilian agriculture, in terms of the importance of Brazil to supply food to the world is what we see in this slide. So even though we saw a reduction on the demand of fertilizer in 2022 in comparison to 2021. The planted area in Brazil actually increased and you can see the forecast here for not just the [ balance ] for this year, but equally a forecast for an even greater increase in planted area. Talking for our new investors, we are very thankful to see you join, we are very excited to have you on the board. We look forward to interacting with you as well. When you think about agriculture, when you think about agriculture in a scale that can make a difference in feeding a growing population we have in -- we're getting to 9 billion people. A country needs to have 3 key characteristics. The first one being plenty of water available. The second one, a climate, which is favorable for agriculture. And the third one is significant agricultural land. When you look at all countries in the world, only 2 countries get those benefits, plenty of water, plenty of agricultural area and the favorable weather. Those 2 only countries are Brazil and the United States. The big advantage that Brazil has in comparison to the United States is the fact that because the climate in Brazil stays throughout the cold growing region constantly above 15, 20 degrees. We can actually do 2 growing cycles per year, whereas in the United States, you can only do one. So when we see the area, the planted area in the hectares here, we need to take that into account as well that it's actually grown twice per year. The problem we saw again, going back to what we learned, what we saw happening in 2022 was that the year-end stock. This is how much potash was left in stock among potash distributors spread over the country was significantly greater than last year. All fertilizers in general and especially potash with a very significant amount left in stock. This is especially given the very slow market we saw in Q4, which the press release went into detail on the reasons and we've been talking a little bit about them here as well. The next slide shows a little bit what we not only saw at the second half of last year, but also what we are seeing in the beginning of this year. The bulk of fertilizer demand in Brazil comes from soybeans. Soybeans and corn, when we grow 2 crops in Brazil in 2 different harvests. Prices had a big spike during the first quarter of 2022. This coincides with an outstanding first quarter we had in 2022. There was a bit of a drop, recovered. But then as the year began in 2023, price for soybeans has been coming down a lot. So the general mood when we talk to farmers in Brazil, is very negative. Most farmers are anxious about prices coming down, about the decisions they have to make and about how low it can go. On the top of that, when it comes to fertilizers, we have seen a -- and they have seen a significant decrease in potash prices, which continued in 2023. So if you're a farmer and you're trying to decide what you're going to do for the year, on the one hand, you look at the cost of your imports coming down. But on the other hand, you also see the cost of what you're going to sell coming down heavily. So what most farmers tend to do in a situation like that is to postpone the purchase of fertilizers as much as they possibly can in order to be able to make the best decision and this is what we're seeing right now. So Q1, the beginning of the year has been very slow, significantly slow and you can understand why, in comparison to last year. But the bright sign we have here, and you can see there's been a little correction here in the very last chart, and this is something I would encourage each and every one of you to be following closely is the price of soybeans in Brazil. So it's available on the Internet. You can track that. And if you do that, you're going to be doing the same thing as pretty much every farmer in Brazil does daily. Something else happened for the last couple of years, which has impacted Brazil in general, but has impacted a lot coffee. And coffee had been our main market and this year and last year, soybean significantly overtook it. The climate situation we've seen with La Nina was a significant change of climate, which resulted in not just drought but especially frost in the key coffee growing regions. When you grow coffee, you expect -- because of the characteristics of the coffee tree, you expect to have 1 year of high production, 1 year of low production. And this will always alternate. What we've seen after 2020, it's very atypical because we've seen 2022 end as -- to certain extent, even in 2021, has been very bad years for coffee production. Talking about the fourth quarter of this year, this has a major impact for us because most of our sales historically in the fourth quarter of the year had been from coffee farmers. So you can see on this slide, how in 2020, we had 113 coffee farmers buying products from us in 2020. This goes with the sales through coffee. And you can see how in 2022, that number decreased to only 50, it's sad. Several of our customers, we would talk to them and they would say, "well, I'm not going to buy any fertilizer. I lost my trees. I'm going to -- don't know what I'm going to do with them. I'm going to have to replant them. I'm going to have to cut them off and then start it all over again," but -- so there were several discussions like that which saw the percentage of sales made to the coffee sector in the fourth quarter of the year, slide all the way from 25% down to 5%. Before Felipe takes over from here, I think what has happened has happened, but a very important thing as we grow with confidence, we look to accelerate the growth, is to take lessons from what we saw happening. And I think 1 key lesson I take from that is it doesn't matter if there is a war. It doesn't matter if everyone is telling you there won't be enough potash to grow food in the world. It doesn't matter of all media and everyone is breaking out and panicking about fertilizer supply, you probably need to be more conservative when you look at your expected production because for reasons outside your control, the situation might not turn out to be as bad as everyone else thought. So when I look in retrospect from the whole of 2022, it is an important lesson. The second one is on this slide. Can you just imagine -- can you just imagine if we had adopted a strategy where we would have focused exclusively in the agricultural region in the vicinity of very close to where our mine is located. Had we done that, the negative impact we would have in our sales in Q4 and even in Q3 last year would be significantly greater than they were. I say that because in the vicinity of our project in the state of -- miniaturized around where we are, most of the market is for -- is for coffee. My state, Minas Gerais is not -- rose about 2/3 of every coffee grain exporter trade in the world. And had we done that, we would be in a very difficult situation. So it's -- we were lucky that we acknowledged that earlier on, and we made a strategic decision that it made sense to sell further away from where we are based as a way to mitigate risks, as a way to mitigate commodity risks, but also as a way to mitigate adverse climate risks. Nowadays, we sell pretty much all over Brazil with the exception of the Amazon region. And we have a much more diversified customer base. Inevitably, you will always have a great exposure to soybeans, but that is because soybeans accounts for about 60%, 70% of all potash consumed in Brazil. So you can't run away from the impact of soybeans. But we have been able to -- by diversifying, we have been able to reduce this impact the coffee sector suffered in Brazil. So this concludes the first part of today's presentation. Now Felipe will go in a little bit more detail on the results here, he will try to address some of the questions we've received. But by all means, please go ahead and share all the questions. If you're watching this online, thank you for the first part. I hope you stay with us for the rest of the presentation. And if you're watching it online, I'm humbly proud to share with you, we have 140 people in this call. I'm sure there are several -- 141. Several of our long-term supporters, our long-term co-owners, but I'm pretty sure and I'm happy to say there should be several new -- and I know because I've been talking to a lot of people in the last hours, very happy to see a lot of new funds and investors join the Verde AgriTech and look forward to grow the company together with you. So Felipe, please go ahead.

Yes. Thank you, Cristiano. Thanks, everyone, for joining our presentation today. So I will start now with the Q4 and full year 2021 highlights for the company. As you can see in the chart, so we have cash utilized from investment activities, increasing by over 10 or 15x almost and in Q4 2022 to over $12.6 million and also a similar growth in the year to over $42 million. Trade and other receivables increased by [ 90% ] in Q2 in 2022 to $28.5 million. This is also something that we'll disclose later on talking on return on the cash flow projection. And the total loans for CapEx and working capital in December, we had over $38.1 million so far. And CapEx, capital expenses increased to $41 million in 2022 compared to only $2.2 million. So it's a very, very significant growth on investments from the company as well. With the profitability side, revenue increased 55% in Q4 2022 despite our volume decrease, this was mainly driven by price growth -- price increase. And also, we had in full year, increase a total revenue of $80.3 million compared to the prior period. So it's over 190% growth. [indiscernible] was decreased in Q4, 7% on sales to 125,000 tonnes compared to 134,000 tonnes in the prior quarter. And we increased in the year by 57% achieving 628,000 tonnes sold compared to 400,000 tonnes sold in 2021. On EBITDA side, we decreased in Q4 by 47% to $1.3 million compared to $2.5 million Q4 2021. Full year, we reached over 270% to $23.9 million compared to $6.5 million in 2021. In the profit -- net loss, we had a net loss in Q4 of $1.3 million. And in the other side, in full year, we had over $17.8 million on profits in year 2022. On operations, as we've disclosed in our press release, we finally concluded Plant 2, and we are now ready to produce and sell 3 million tonnes of product. So that's our current capacity and what we are looking for in the coming periods. And Cristiano, can you please move forward? You are sharing, right. Yes. Thanks. So now we can see a chart that we have our key financial statements. In the coming charts, we can -- will explain a bit more of 2 points that I think that are more relevant and if there are a few questions. And 1 -- and first one that I would like to answer is related to the interest and income expenses that we had in the quarter. As you can see in the footnote, we had over $500,000 that impacted our results in Q4. They were [indiscernible] type of loan of 2 banks in Brazil, and these loans were close to $6.3 million. So this is part of the impact on the interest rate. However, if you compare it year-on-year, you can see also that the interest expenses increased, but these are mainly driven by our additional loans for the group. And I have also a chart that will show how we want to pay and we will pay for this loan that we have currently in the group. And so yes, Cristiano, please move on for the next slide. Yes. This chart, you can see the key metrics by tonne. So you can see in the first table that we had an average sales per tonne, an increase of 67% in Q4 to $135 per tonne against [ 81 ] less in 2021 and also an increase of 86% for full year 2022. This was mainly driven by the potash price increase during 2022 as you all read our -- in the size of gross margin, we can see also an increase from 75% to 76% and 78% in the full year, but it's also good to highlight, and I have a chart as well to say that our production cost to increase. Yes , we have a few points that has to be raised such as, for example, in Q4 the fixed cost dilution, lower volume means higher cost. And you can see also these are costs increase of over like 45% to 50% year-on-year. This is a very significant impact for our costs in our products. In the second table, we can see the same numbers, but excluding freight revenue, which is quite relevant for us. As you can see, we had a revenue per tonne of $61 for 2022 against $54 in 2021 Q4 and also a relevant growth as well on freight in full year of over 76% growth. At the end of the day, the gross margin had decreased in Q4 as expected, from 62% to 48%, but in the year-end -- year we had an increase from 62% to 65%. That's it for this chart as [ option ]. As I've mentioned, the production cost is stable, you can see also the cost per product that we have. It is important to highlight that, for example, we do have macro new trends in BAKS, for example, like sulfur, like boron that increased the cost per tonne sold, the average cost per tonne. We have also a lot of difference between types of packaging that we sell, we first sell in bulk or Big Bag. The Big Bag sometimes is more expensive than the bulk, entire cost of the product. So that's quite relevant as well. And also important to highlight that Plant 1 just produces [ all the ] portfolio of the company. So we have [indiscernible] we have Big Bag, we have BAKS and other products. In Plant 2, we are focusing on K Forte Bulk before -- volumes, big volumes just 1 type of a product. So you can see that in the chart they'll have cash cost, asset depreciation, total cost expected. In the third and the fourth column, you can see what with a saying that's not controllable costs by us, which is like packaging, transportation, electricity, nutrients among the cost that is not in our hands. We -- it's like the commodities are driven by the market. So this impacts a lot. But you can see, for example, from the first product, which is the cheapest product that we have currently is the [indiscernible] product. We have a total cost of $13 against a cost that would go up to $65 in the next produced at Plant 1. So once if you just compare costs per tonne sold, it's not a fair comparison. So the idea of no one is disclose the cost per [indiscernible] of product. That's a key point for us understand better or...

Before we go, we move to the next slide, Felipe, I think it's important to say even though our cost is much higher for BAKS. We also make a lot more money on those micronutrients, close to around 50%. Later on in the presentation, we have a slide showing that.

Yes. Yes. So now we have a key metric [ earning ] on sales since 2018 when we had the first commercial year with our factory. In fact, we have started 2017 to sell product. But in 2018, we had our factory opened in Q4 2018 with 29,000 tonnes, and we've achieved last year 2022, over 628,000 tonnes, which is growth thinking on volume on tonnes and not only license or things like that, but the supply chain that's important here that's quite complex to grow at that much. And now we are expecting in 2023, as you are aware, and I had also deals later, two scenarios -- not scenarios but the range for our budgets that goes from 800,000 tonnes up to 1.2 million thousand tonnes. That's what we are thinking now. But important to say and highlight that's not the end. That it's just a beginning. We are working in preparing ourselves and the company and everyone in the market as well to achieve our PFS scenarios that we have 3 scenarios, 10 million tonnes, in '23 and 50 million tonnes per year. So our actions are being taken and planned to achieve those 3 scenarios in the coming years. So to speak at this point. The second one, the same type of slide, but now just focused on revenue and see as well that we came up from $1 billion per year to achieve now last year over $80 billion. So for this year now, we expect to be at was the last year in the worst case, but in the top range, we would achieve $115 million per year of revenue. And also, you can see in the right side of the table, we can achieve over $1 billion and 10 million tonnes and then to be $2.5 billion and $5 billion of revenue and the 50 million tonnes per year [indiscernible]. EBITDA side, also, you can see that beginning in 2018 with a negative EBITDA, at 2019 we were like breakeven. '20 onwards, we started to deliver profit or be EBITDA positive evident to the company achieving last year $24 million EBITDA, at 5x growth, 4x growth against the prior year. And then 2023, as Cristiano has raised before. We have a few points to the scenario in the marketplace that we are planning to achieve the best case scenario, a bit higher EBITDA than Q4. But as I said before, we should look to the long term and in long-term perspective, is still positive and we still forward in looking for the targets for the company, yes. And the last one on this chart are the earning loss -- EPS per ton. On the EPS side, we had a negative EPS since 2018 to 2019, 2020 was close to 0. And now we had last year $0.34, and we expect this year a lower, and we are sharing the best scenario, but in the worst case scenario, a very low or a low earning per share and the market conditions, et cetera, and that expectation but, as I said before, again, we have been a green like scenario and a great perspective for the future from $6 to $23 per tonne -- per share EPS in the coming years.

Just one point here, Felipe, just to add. The long-term sales price we've adopted for the prefeasibility study is about $350, $360. At the moment, it's $450, so significantly lower than what the current potash price is. And those EPS per share, they come from our prefeasibility study. I strongly recommend -- I'm sure the long-term shareholders here they read the document already, especially given the number of new shareholders who have joined the company in the last few hours, it's a great document. It's very detailed, was put together by a team with independent engineers and market experts. So you can see in detail, the path, the trajectory towards this EPS. And of course, those numbers here, they assume no dilution, which has been also one of our focus to keep growing in a disciplined way in order to avoid dilution. So it's our target. We're not saying we will be able to achieve there. But certainly, when you look at how the business plan can be structured and going to grow, it's something [ possibly ] we've been working on.

Yes. This chart, we have split on 2022 Q4 and full year sales, general and admin expenses. As you can see, the first chart is related more to sales expenses -- sales and marketing expenses, fees paid to sales agents. And the third one -- the biggest one by far, which is a profitability for freight. We have a chart as well that we show in the next -- the coming one that we have the split between FOB and CIF. Last year was a very unstable year, which -- with diesel prices increasing like really fast and this drove our clients to decide most of them to switch from FOB to CIF. So avoid this kind of visual risk on their final cost. And for this reason, we had that big expense on freight. And we do expect for 2022 that this will remain as is, some mix between 70% on CIF and 30% FOB that's what expected. On general expenses, we do have embedded additional values here an amount on IT and software expenses. Last year when we changed our ERP from a local ERP that we had before to SAP despite the relevant to highlight here. We've made this change last 1st of July, and it's going well. We have SAP Business One, this is much more accurate and it's ready for us to grow and get away from CRPs faster, et cetera. Of course, it's more expensive and investments are made on that and on the license on sales force as well for our employees. These are the key points that made our IT and software expenses grow. And okay, Cristiano, I think this is the one on this one, I'm afraid, like I said before, FOB against CIF, you can see in the right table, the amount that we sold on FOB, for example, in 2022 was even lower than 2021. Increasing only 5%, even -- the company growing like 100%. So that made the change in the mix. As I said, from 52% in 2021 on CIF to 71% in 2022. And then a positive point on there is that when we have CIF, the timing of delivery is much more under our control. We are able to identify and have a larger number of TPLs closer to our factory or in the way of our factory that could bring more competitive freight in the -- end of the day, we have a lower price in the farm gate for the client and even for us. So it's -- so when in installation, although, of course, we have a higher credit risk once we assume the freight to the customers. Yes. Cristiano. Now...

Just one comment here on transportation, on distribution costs. The downside of -- the downside of having the -- sell further away from where we are is, of course, distribution costs to increase. The advantage, as I said earlier, is that when a commodity, especially coffee suffers, we spread our risks, disadvantage, obviously, take -- costs more to transport, so we make less money when we sell the product. But, very importantly, and there will be a phenomenal new slide added to the presentation, where we show a very detailed breakdown of where our product -- where in Brazil our product gets to in an economic way, depending on potash prices. So one thing you should all be assured, and some of the questions were along that is whatever we're selling, wherever we're selling, we're making money. And even if prices were to decrease, there is a lot of buffer there. And for that last buffer, for that last piece of information, I suggest you look at our prefeasibility study because on the market study, it has a very detailed breakdown of our net sales price, how much we actually receive depending on each one of the regions of Brazil we work from.

Sorry. 2023 onwards, the company has changed -- not the company but due to the circumstances of revenue, we had to change our taxation type in Brazil. Before we used to be like assumed profit company that we had a percentage of the total revenue. And for 2023 onwards, the company will be under a real actual profit method, which is a percentage of the profit before taxes. So you can see a very simple table here that demonstrate against the profit before taxes and the percentage we had in 2021, just in a subsidiary. This is 1 of our 2 subsidiaries in Brazil, [ Verde Fertilizantes ] the 1 that sells to the final customer. We did have in 2021 9% only on taxes. 2022, we had 11%. And this year, we expect from 34% to 38%, it all depends on the profitability per quarter because we can have, for example, a quarter like Q1 or Q2, I don't know. But if like a 0 profit, so this would incur us to a 0 tax. But if I have like $1 million profit, probably going to pay -- not pay, but probably need to book 304,000. But it's important to highlight that we have a kind of -- a lot of limitations that we can have or exclude from the tax payable to government. So for example, we will be able this year to exclude up to 30% of the taxes due to our [ prior period ] losses before 2018. And also, we do have a type of investment in Brazil that could be deducted as well from the taxes which is called [indiscernible] and addition to you to have like other federal taxes that will also be used as credit to reduce this amount to be paid. So what it means is that in the P&L, you are going to see probably hopefully [ 34% ] of taxes in the year end. However, in the cash perspective, it could be 0 importance here because we have a lot of credit of taxes that could be used for the business. So this is a good point that also will help us in our cash flow in the year-end. The next 1 is that related to loans.

Yes. Just another comment here on tax. Right now, with the new President -- with our new President in Brazil, there's a lot of discussion about taxation and some of the proposals are to reduce corporate taxes. So there might be some positive news as well on this front. If you look at most countries, Brazil has taxed quite heavily corporations. And just so you understand, so Brazil taxed very heavily corporations at 34%. But in Brazil, dividends aren't taxed. So the proposals at the moment in the discussions at the moment are about reducing the corporation tax and starting to tax dividend. So that wouldn't have some sort of benefit if this does go ahead as it's being discussed.

So that -- this chart here shows our profile of loans. You can see on the left side, the green line that -- the loans that we have currently and when we expect to pay them from Q4 2022 up to Q4 '26 when the amount are going to be really reasonable. You can see the table as well on the right side, the numbers. And then the gray line is the payments that we have to make. You can see in Q2 now or Q2 2023 is the biggest amount that we have to pay. This is what -- this is mainly driven by the soybean [ timing ] to receive from customers. We do have collect season now from final -- March until the beginning of May. So this is more than expected. And as you can see, we do have a [indiscernible] trade receivables well back at over $28 million, which will also contribute to reinforce the company's cash flow. So this is a good point to highlight. And also the group average loan rate is close to 15.4%. Yes, those are the key points. The idea is to have long-term debt and not short-term debts. These ones that, the 2 we are paying now in Q2 were short-term debts in 6 months that made like the 1 I mentioned before, the [ reverse ] effect on suppliers in Q4. But after this one, we have 1 for the [ standard ] no one else -- no other one planing to be made on this type of loan. So after this one, I hand back to Cristiano and after all the -- sorry, sorry we have the guidance as well. The guidance -- with -- I've already disclosure and I was -- yesterday in the numbers, but sales target per tonne, we had the range expected from $801.2 million and revenue of $78 million, up to $115 million; EBITDA from $9.3 million to $24.5 million and on EPS per share of $0.04 per share up to $0.29. And also it's important to know, and if I put it here, cash held by the company expected for the year-end would be from $21.9 million up to $35 million. And this would be cash held plus receivables -- [ freight ] receivables on hands. In the right side, we do have the assumptions that we use to conclude them and to make this guidance with the [indiscernible] price on $450, 10% discount resulting in a [indiscernible] price of [ $408.5 ]. CIF, as I've mentioned, 70% against 30% of FOB. Sales channels, 47% direct sales and 53% indirect sales, which would be the distributors or sales agents and on also capital expenditure in several projects expected to be between $4 million and $6 million, which is much much less than last year. Now it's time to reduce CapEx and use out what we've made already. That's the key. Thank you, Cristiano.

Thank you, Felipe. We currently have 144 people on the call. We have 63 questions so far. So I'm looking forward to answering those questions very shortly. Photo of one of our mining pits, during the rainy season. That's why you see that much water and most of the year there wouldn't be water there. Okay. Okay. What Verde AgriTech controls is a very unique mine, which hosts over 1 billion tonnes of reserves. It's a passive ore and out of it, we've done our feasibility study, we're looking at the expansions out of it, we've been developing a market. And in addition to the 1.2 billion tonnes of mineral reserves, we have an additional 1.8 billion tonnes of inferred resources. So that sort of size of an asset is very rare and is what most people look for. It's what's called -- what's known as a world-class asset, something to be developed, something to change industry, it's something to last for generations. And in the case specifically of our technology is something that can be -- can have a significant impact on the planet. We've invested a lot of money developing the project since we began in 2005 so about $50 million in drilling, technology development. Drilling alone, we did about 45,000 meters, lots of assays, a lot of agronomic trials and then we started building our operations. The biggest investment, of course, came in 2022, which was fully funded from accumulated profits and from some debt we raised from commercial banks. So over $100 million of money spent underground to take the project to where we are right now. As we developed the asset, as we progressed the company, we looked at different expansions, we looked at different models, we looked at the different alternatives. And the snapshot I present to you is what we are pursuing as a company. It's what drives us. It's what our team, our sales team, our engineers are working towards, which is to produce 50 million tonnes of a product, which would be supplied in addition to potash, sulfur and micronutrients. When you look at the economics of this project as proposed, they are significant. So at the time when the study was done, a discount rate of 8% was appropriate nowadays, but certainly it would be a greater discount rate given what has happened with interest rates. But if you look at that 8% outdated discount rate what we're working towards at the moment has a net present value of about $13 billion. Very competitive. When you look at the cash-cost curve among the other companies, it's very positive. Just close a window here just. Felipe went through the slide where we look at our growth. I've spoken about it before. Many of you will remember. But the new ones joining us today, new investors, new co-owners joining us today, selling the initial 30,000 tonnes of this product. And most of that, I sat, face to face with farmers to negotiate and make those sales, was very hard. And I remember back then telling people in general, that the first 50,000 tonnes of our product to be sold, we're going to be the most difficult ever to be sold, and they were because even though we had a lot of trials at that time, we were telling people and convincing people to switch from potassium chlorides, something that has made them very successful to something new with a number of benefits, but still an unproven product. Now you fast forward 4, 5 years from 2017, we began in 2018 I won't say it's easy selling the product because it's never easy selling anything to a farmer. So it's always hard. But certainly, we're in a very different position now to what we were back then. And I have no doubt we have created the foundations to keep accelerating our growth. This is a photo of one of our mine pits to the left-hand side. To the right-hand side, you can see Plant 2 and on the next slide, you can see a nice photo as well of Plant 1 on the top right-hand side. So when it began back in 2017, there was literally just 1 simple line. The plant evolved over the years, was expanded several times. This area, you can see to the left-hand side, we then used to have access straight. We had to have access straight to park trucks because we -- more given the volumes and it has been very exciting to see it. It has been very exciting to see all this development, all this growth and has given us the expertise to build on every time we build another plant and especially as we plan our future expansions. Not only we developed the mine, not only we've built plants, not only we developed markets, but we've also been very busy with research and development. We've developed 6 technologies, the 6 technology here called this [ control ]. But -- each one of those technologies brings different benefits to the product, different benefits to the farmers. We have about 10 patents we've filed, some of them have already been granted. So we're not just a mining or just a fertilizer, just a crop nutrition company. There's a strong technological angle to what we do. The first technology, which really excites us is Bio Revolution. We were and are to the best of our knowledge, the first and the only company to be adding microbes to mineral fertilizers in a very large scale. The first microbe we added is called Bacillus aryabhattai, which has a number of benefits, a well recognized microbe, and we've been working on others. Biologicals is an area of growing interest. It's an area of farmers appreciate the benefits. Other companies have been investing in this space as well. And we are very proud to say we are one of the biggest players in the Brazilian market. The other technology we launched it allowed us to create a new product, this new product is called BAKS. And the technologies that allowed BAKS to exist or Micro S and 3D Alliance. So starting with the benefits of this product to farmers, we can see on this slide a comparison for a farmer in Brazil that grows -- that's usually what happens. They will first grow soybeans, and then they will come following that, they will grow corn. So if you're doing the conventional way, you're going to be applying different fertilizers, you're going to have 5 different operations. If you choose to apply BAKS, you can reduce the number of operations from 5 to 4. Because of the technology in BAKS, we can increase the efficiency of some of the micronutrients required, such as copper, such as zinc or micronutrients suggest sulfur. And because we can source raw materials in a competitive way, we can transfer some of those gains to farmers. So when you look at the overall cost for the farmer, he would be reducing costs and would still be getting a sizable margin as a company out of those added micronutrients to the product. So we're not just a potash company, it has evolved. The other advantage here when we look at BAKS is that because it's with through the alliance, we have a uniform combination of different nutrients. When farmers apply fertilizers to the field, there won't be segregation. A big problem a farmer will have in Brazil when you're applying conventional fertilizers or blended fertilizers is that the density of each one of those fertilizers is very different. So if you look at, for example, KCL, potassium chloride in urea, urea is much lighter than KCL. So if you put them both together in a formulation, potassium chloride is going to be thrown by the equipment much further away than urea causing too much nitrogen on one area and not often on the others, which compromise productivity. So BAKS resolves that. It's a product that has been growing. We've been doing a fantastic development with this product and something we're very excited about. This is the same simulation, but this time looking at coffee. So you can see how a conventional management or nutritional of coffee [indiscernible] you're going to be applying first MAP with micronutrients. And then farmer is going to have come back 3 more times to apply a combination of nitrogen and potash. When they apply just for product, they can apply just BAKS, which comes with all the micronutrients, comes with phosphate, comes with potash. And they know it's one. They the only needs to come back to reapply urea, much faster, much simpler operation to reduce costs and improve their operations. And then when you look at eucalyptus, which is another very exciting market in Brazil. Eucalyptus used for pulp and paper, a massive market. The number is even more staggering. You have to make 3 applications with -- when you plant eucalyptus. When you're using our product BAKS eucalyptus, you can just make 1 application. The product already has all the nutrients needed in a gradual release way with the technologies we have inputted, which help to transform. This is all very good or very exciting, but it takes time. We need to go, sit down with farmer, explain it all. They need to test, especially the large corporate growers where we have several layers of convincing. But it's where I believe our growth will come from the coming years because they're not just resolving one problem to the farmer. You're not just supplying potash, you're supplying the whole package. And more than supply the whole package, you're doing it in an efficient way for healthy farms. BAKS has another phenomenal technology. It's MicroS Technology. So Brazilian stores are very poor in sulfur. Sulfur is a primary -- secondary micro -- macronutrient and because of characteristics of Brazilian tropical soils, whenever you apply sulfur -- a sulfate, a lot of that is lost before crops can update the nutrients. So with our product, which we apply to elemental sulfur, which is a residue from oil refineries, we can make it a very efficient gradually source of sulfur, as we've seen from trials and from customer testimonials. This brings some more margins to the business. So when you look at, for example, sulfur, which we add to the product from 1% to 5%, when you look at the cost, this is true from January -- from 20th of January and what we sell it in the product later on, we have about 50% margin. When you look at the -- all the micronutrients have been adding, boron, zinc, copper, we have added margins to the business, which range from 60% to 30%. So it's special to business, it's technology. It's not just supplying potash. Very different to how most companies operate. We've been able to develop a direct relationship with our customers. When you look at the so-called direct sales, it has accounted for about 60% of our sales, has grown from 2021. And when you add here the sales agents, which were brokers, who introduce us to farmers and then we do the same, we look after the relationship. You can see how currently about 92% of all our sales are managed directly by us. It's very unique, puts us in a very strong position and has been very important for our growth. You can see, for example, how during Q4, which was, as we mentioned, a quarter -- a very tough quarter for the whole space. You can see how our direct sales really made the difference. How the relationship we build with our customers over those years was very important on growing when -- as a year when the market shrank by 10%. We will carry on with all of that. We're going to carry on developing all of that and something very important for this is artificial intelligence. So we use something called Salesforce. We've been using Salesforce for several years. And every single conversation, every single communication with our investors gets logged on the system. Phone calls get recorded, WhatsApp messages get recorded. Some months ago, we started using this artificial intelligence platform for Salesforce called, Einstein, which already tells us who is the customer more likely to buy from us again or a customer which we might be losing or someone where there is a great opportunity, but it's changing a lot now with ChatGPT. So Salesforce announced they're launching their Einstein GPT. I've seen demonstration of what this thing is going to be doing, and it's absolutely amazing. And because we already have all this data in the system, how this data will get transformed into business, into business opportunity, actionable, which goes all the way from how you respond to the message, to the specific contact or what's happening with which one and creating specific cadence throughout the relationship. It's absolutely amazing, something very exciting about. And the only reason we're going to be able to fully benefit from that is because of all that investment we made over the years in our CRM and because of how we were and have been structured as a company. Working very hard on artificial intelligence, we're very excited about. We're using something else called Jasper for our marketing initiatives. It's been also transformative and starting with [indiscernible] as well. So the whole team, everyone works with ChatGPT and for those of you who haven't fully appreciated how transformative artificial intelligence is for business and how it will be, I would encourage you to have a look at it. It's amazing. The edge it is giving to companies. And we are certainly going to be benefiting and doubling down on all of that. When I mentioned earlier how good our team is, our sales team, how efficient we are in this process. I also recognize that for us to get 50 million tonnes, which is our target, we will need partners, especially if you want to get there as fast as we want to. And the most obvious partners for us are very large distributors of fertilizes and agricultural imports. Very happy to say and this is completely different for 2023, completely different. We never had that before since 2017. For the very first time, we will have big distributors working alongside us. Wasn't the case before, it was just us. And we have the 2 biggest ones in Brazil. Lavoro recently went public on NASDAQ. AgroGalaxy public in the Brazilian stock exchange. Those are partners with whom we hope to be carry on and growing in the coming years. We did announce the partnership with Lavoro last year. And one thing that we learned from the relationship is that just the current model we have, which is inside sales plus the distributors, wouldn't work. So in the last few months, we've been training, hiring and developing a technical team, field sales team that for the very first time, will be supporting those new groups. So this is a print screen I took a few hours ago. This is from one of our Salesforce screens. It's something we use called Salesforce Maps, which is really cool. And what you can see on the screen, with each one of those red dots here, those are all shops or stores owned by some of our new distributors, AgroGalaxy and Lavoro. And what you see in red are already some of our recently activated field sales executives. And what they do [indiscernible], they go from each one of those stores, they visit the customers, they train the teams for the distributors, they multiply the knowledge, they help answer your question, they help to train local staff, they help to amplify our sales capability. We are going to be reaching by the end of April, 10 field sales working in the key regions. Those of you who aren't familiar with where the mine is, the mine is right here, where my mouse is. And it's something completely new, which I believe will be crucial in accelerating our growth. The very interesting thing about this is how we have technology to help us. When you look at the -- how the other companies do that, it's pretty much blind because we have this strong technology framework with Salesforce [indiscernible] with Einstein, we can pretty much switch all on the system. In the same way I can see in the system here, this is all dynamic. The same way I can see the location for each one of those distributors, I can see here leads, I can see opportunities, I can see which client hasn't purchased and more important than me seeing it, our team on the ground on their phones depending on where they are, depending where are they going, they can have a very good view of the opportunity there, where they need to go, how they need to focus their time and how they can be more effective. So it's something we're very excited. It's something very new for 2023. It won't happen overnight. There is an education process needed here, but I think it's something which will be essential for us to get to the 50 million tonnes and very proud again to say we are partnering -- or we're doing this together with the 2 largest players in Brazil, Lavoro and AgroGalaxy with a combined a number of employees they have working in the field in the thousands with presence in hundreds of different agricultural cities in Brazil. So I think this can be very important for us. And then carbon sequestration. There isn't much I can detail at the moment. But there were some questions. There were several questions that came above carbon sequestration. Those of you who are familiar, who have been following us know, we've been doing a lot of work in that area. And there's already public information one can find on Google, which helps to connect some dots. But when we look at the potential here for us, it's -- it would catapult the company when plant Phase 3 is fully commissioned into one of the world's largest carbon sequestration project. It has that sort of potential. It has that sort of scale. It's something we're very excited. It's something we hope to be updating all of you throughout the year, hopefully very soon. And it's big, it's big. It's unbelievably how exciting this is shaping to be. Before we start the question, there's a final update I wanted to say because, again, there were several questions on that front. As we look at growing, as we look at the 50 million tonnes, one very important step in that process is getting the permit to build a railway. So for 50 million tonnes, we need to build the rail. It's just 60 kilometers -- 80 kilometers rails per connecting us to an existing rail line. There was a press release at the end of last year. And we made a filing. And in the last year, there was a change in government. And I'm very, very encouraged to say that the engagement with the new government has been very positive. We are very excited about how open it has been to business, how open it has been to helping to transform Brazil into a better place, and we're very, very happy about the interactions. And I think one of the first steps we're going to see in terms of this, I hope to be this rail because it requires a federal authorization for us to be entitled to developing this rail, which is essential for us to move towards the 50 million tonnes. So if you're watching it online, thank you for staying with us for about an 1 hour and 23 minutes. But more importantly, thank you for all of you, 137 people at the moment, owners, who have been following us during today's call. Now we move on to the fourth and final part of our presentation today. And we have 96 questions to be answered. I will try to be as comprehensive and detailed as possible when I answer the questions. Some of those questions, I think, were better answered by Felipe, especially some of the technical questions. If anyone feels like the question wasn't properly answered, please by all means add the question again or send us an e-mail or reach out directly to us.

First question. This is not a question, but the humble suggestion. Please keep us in the loop as often as you can via Verde website and not via SM. I don't know what SM is. Investors can take bad or good news. Thank you for the suggestion. One point to say, we have a monthly update, which I have to apologize. It wasn't published in the first quarter this year. The reason it wasn't published is because the same team who handles it also helps putting together the audit, the Q1 results, the Investor Relations, it's a whole package we need to file in this Q1 with the annual information form and then the AGM, so I just decided to tell them to focus on this package. But we shall soon resume sending the monthly update. Next question. As always, a very question from this gentleman. I will ask Felipe to answer. But it is a technical question. So the question is, can you provide additional detail regarding the $24.1 million CapEx under land and buildings? Does this include the costs of the upgrade to the road run to the mine site in Plant 2? How much is the land purchase versus construction cost? How do you intend to amortize the construction costs over the useful life of the road?

Yes, Cristiano, these questions follows the second one. But I'll take the first one then. At the $24.1 million, we do have a land, but not more than 1% or 2%, maybe 3% of this amount. And yes, it does include the excess investments we have made And we expect to amortize this investment according to the standard of accountants, which is between 5 years of depreciation. This is how I expect. And also, we do have already included in our costs projected for this year around CAD 3 million as amortization improvement in the costs. As I have also disclosed in the chart, the cost for item, the product, we do have their depreciation costs as well. And the second question, it was, can you provide additional detail regarding the $17.1 million CapEx under plant and equipment? How much is related to Plant 2 and how much is related to upgrades to Plant 1? So just for everyone to understand that $24.1 million plus the $17.1 million combines the $42 million that I've presented before. And then in the end, I'd like to highlight that maybe 90% of the investments were in Plant 2 and 10% in Plant 1. So this is the key point. Thank you.

Thank you, Felipe. The other question is about bonus awarded in 2022. Have then been paid already -- have this been paid yet in 2023? The answer is no. Another question about payment for me. So there was a bonus awarded and was based on 2 specific targets by the Board, the shareholders. Can you please share the targets that were mapped to earn the bonus? Yes, there is a document, it's the management information circular. It gets published in a few weeks, and there is a description of that. I know the Compensation Committee has been working with a consultant -- a remuneration consultant on that topic, and I'm pretty sure it will be all disclosed there. The next question regarding your share sales, you sold shares in December. During Q3 release November, you probably had a good idea that Q4 will be bad, but there was no warning. There was no warning for almost 6 months while you sold shares. Some shares sold 5 and report 3 months late. How should investors view the sales from the ethical lens? I own nearly 20% of the company, and the feedback I've been given by several investors is how they felt all along I was doing the right thing about minimizing my position in the company. There's a very short window when sales can be made. And there's a procedure one needs to follow before they are made, which were duly followed. The next question. What is the situation with the dividend plan? Haven't heard anything on this proposal for a long time. The payment of dividend isn't something we believe would be sensible to be done given the very challenging market we've seen happening this year with a significantly drop of potash prices and soybean prices. So it's something to be monitored. Next question, again, about compensation. And it's something important -- I appreciate the question. It's something that will be fully disclosed in the management information circular. It's something handled independently by the Remuneration Committee. Next question, was the growth cost all written off in the fourth quarter or capitalized over quarters going forward, i.e., is the road cost all behind us? Or is there more cost to be written off going forward? Felipe, do you want to...

Yes. We did have in this first semester expenses, that we'll also capitalize it. And to answer the first part of your question, this capitalizing won't be expanded everything now. So it's capitalized, yes.

The other question, has the Board considered including cost control efficiency targets as a specific part of the CEO bonus regime rather than just production volumes, sales revenue and net earnings? I shall take that suggestion to them. I know they're working or they've worked with an independent consultant on that aspect. So I can probably assume this was considered. One important element here. I think, is a good slide on the presentation, which shows from our cost, how little control we have over it, given the impact we have in our production costs from items which are completely outside our control. So that -- I think it's an important slide that I think helps to illustrate this element here. Next question. What was the final cost of the road repair due to flooding? We don't have that number -- we don't have that number separately. Would you be able to estimate, Felipe, if there was like a specific allocation or we can look at the specific costs for the delay and added work required on the road because of the flooding?

No, not really. It wasn't included, it's impossible to estimate now.

Okay. So next question. Why such a modest growth in 2023, less than 50% capacity? Is it concerned with market or logistics or both? It's market. Given the downward revised 2023 guidance and the significant investment in the new headcount in 2022, can you expect to see headcount growth scaled back in Q1 and the balance of 2023 in order to help maintain bottom line profitability? Yes, absolutely. There has been a lot of focus on efficiency, and there has already been some good achievements there. Next question. Have you been in touch with the new government? Yes. Any news on that front? Soon to be disclosed. Any positive surprise to watch wait for in 2023 not mentioned? I think during the presentation, we've covered some we're looking forward to. The number of customers, we -- there is a table there showing, but there was a slightly reduction in the number of customers, mainly because of coffee, and there was an increase in the number of planted area, which is very encouraging, which demonstrates farmers have been using our product in a greater percentage of their total planted area. The other important indicator we have there is the EGR, the earned growth rate, which shows the -- from our growth, what percentage of it was from repeat customers and from referrals, and the number is very good, especially because it's a number that is built on the back of not a staggering positive number, which was over 100% EGR from -- in 2021. Other question. How have the sales been in the year 2023 so far, busy or not? It's an important question here. It's essentially already asking for some sort of visibility in 2023. Anyone that looks at the chart of potash prices in the chart showing soybean prices can independently see, a, has been a very challenging beginning of the [Technical Difficulty] especially if you compare it against 2022 because in Q1 2022, we had the best of the worlds. Had very high soybean prices [Technical Difficulty] issue with the supply of fertilizers, people were panicking. So when you look at our Q1 results in 2022, was phenomenal, absolutely phenomenal, absolutely phenomenal for what you would expect from a Q1, no matter what. If you look at the charts, which were available on the presentation on that growth, you can see how it was already an outlier. So Q1 2022 was about 100,000 tonnes. And Q1 2021, it was around 15,000 tonnes. So that massive growth was driven by soybeans that massive growth was driven by the threat of supply more. So we need to look at Q1 last year as a very atypical Q1. This year, we have the -- a very negative situation, a very negative situation. So I think it's important to keep that in mind when we start thinking about Q1. Our main quarters are and will always be Q2 and Q3. Given the reduction in 2023 production guidance, does that suggest that all the anticipated production will be coming from Plant 2 or a mix of Plant 1 and 2? It's a mix of Plant 1 and Plant 2. There is -- it's a mix. Because on Plant 1, we produce BAKS, and we produce Bio Revolution, K Forte Bio Revolution. On Plant 2, we produce K Forte. How easy is it to ramp up or down production in response to demand? Extraordinarily easy and fast. That's the advantage of having now a plant with a lot of capacity. Next question. The deal with Lavoro. Has the deal with Lavoro helped in the last quarter? I see no Verde products on their website. Is it just a brick-and-mortar deal? Lavoro, we're really only starting to work with them from a day-to-day basis. Those large distributors like Lavoro and AgroGalaxy, they are very dependent on -- boots on the ground from our team and didn't have back to offer. We put the team together, and it has really started working initially a few weeks ago. And essentially, you have the sales team like Lavoro, AgroGalaxy, and they need to be trained, they need to understand the project, how to sell it, they need some coaching. We need to do some site visits with their team, and then things started developing. So it's not a short-term fix relationship with Lavoro and AgroGalaxy. It's something very important, very strategic, but it's not something we're counting on for short-term results. Next question. What about the U.S. listing? It was expected in the last year, then January, and it's still pending. I can't comment on the U.S. listing. What I can comment on is that when we look at what we're doing and importance of what we're doing to the world, there are some countries that are more dependent than -- on this, of our success. Even in some of those countries, you have certain geopolitical issues connected. Next question. How are sales distributed between different crops, percentage of coffee, soybeans? We're going to add that to chart -- one of the new slides so you guys can see how much we've been selling each one of the crops, but you will see that in 2022, soybeans was the crucial one. Next question. Can you discuss your 2023 EBITDA projections in detail? Based on our guidance, revenue should be either flat or up 40% to $115 million. However, EBITDA range from $9,000 to $24,000. What is driving the lower EBITDA on a higher top line? With higher top line growth, I would have assumed Verde would have benefited from operating leverage. Felipe, do you want to discuss this?

Yes, I can comment on that. What we can see is that we cannot just analyze the total revenue of the company and imagine that and presume that the bottom line will be any trend. As I've mentioned, we have freight impact on this. So for example, in 2023, the cost per tonne on freight that is similar to the second half of last year. But on the other hand, the potash price has decreased. So what happens then, the net price including freight increase. So just for example I had it here. We had last year our revenue excluding freight, as I presented, on $83 per tonne. For our 2023, excluding freight, our expectations have decreased from $83 to $52 per tonne. So of course, this $30 that we are losing is on price, and we cannot compensate it on freight. So this goes to the bottom line and mix. Our EBITDA do not follow the trend of the price or revenue of the company revenue.

Thank you, Felipe. Next question. Are you providing discounts to K Forte and BAKS? If so, can you discuss how much you're discounting in your project? We do offer discounts to motivate farmers to take start, to motivate farmers in certain times. And it varies depending on the time of the year, depending on location, depending on a number of situations. There is another question about NASDAQ. Then there's a question here about me selling shares. You originally committed to sell your shares in a structured way, yet you sold shares. Why would you make a commitment to sell it? There was a structured way, which was put in place at $9, and then there was shares sold from diversification point of view over the months, but I still own about 20% of the company. What factors are behind lowering full year 2023 guidance tonnage from 2.8 million to 2.2 million tonnes? I think we've addressed that throughout the presentation. How does this lower guidance affect the company's plans for growth considering current capacity is approximately 3x guided sales? It's a good question. The fact we have such a big monthly production capacity now allows us to very fast react to market demand and market circumstances. So the CEO of Nutrien has recently said that he sees potash prices getting very tight this year. And if that turns out to be true, we have this massive production capacity, which we can very, very quickly address market imbalances, given the extension we've made. Next question is another technical question here. Verde generated a taxable income of $20.4 million in 2022. Note 9 states, no deferred tax asset has been recognized in the financial statements, Directors are not sufficiently certain as there will be a future taxable profit to utilize these tax losses. Can you comment on this pessimistic outlook of the Board as it sends a very negative message to investors. I think this is like conventional wording from auditors. But Felipe, do you want to...

Yes, I think so. That's not our opinion for sure. What I can include here is that the profit that we had last year, we cannot use it in the future to compensate loss. Just to explain little bit. Since 2018 or -- sorry, '19, the company is under the real profit, but before that actual profit. So before that, we have like $8 million on losses that we'll be able to compensate from now on. But the profit may generate in 2022, 2021, 2023, since we used to pay taxes only on the net revenue is ones we cannot report any more. So what we have from now on is just $7.5 million that we'll compensate up to 30% limited maximum, yes.

If I'm sure if you want to approach and engage with us, we would be more than happy to have a conversation about those suggestions in terms of -- from technical elements in the financial statements. And so please do reach out. Does the company maintain the same expectation for floor price of potash stated in PFS? If not, is expansion, should the 50 million tonne scenario to viable without raising capital? That expectation floor price comes from a consultant. We've seen other long-term potash prices from other analysts, which are higher than his estimate. And the average I've seen -- if I look at all the reports I've seen, it looks at an average long-term potash price, which is about $20 or $30 higher than the number used on the 50 million tonnes production scenario. Is it viable without raising capital? I think it all depends on how fast we accelerate development. So this is -- because it's scalable, we can certainly coordinate growth in a way that the next phases of growth, they can be built only and if there is enough capital. Can you estimate an EPS for 2023 if potash price average is $600 a tonne for the year? I think it would be fair to give a moving EPS estimate, depending on the potash price instead of assuming it will be $450 for the year, which is guess wild as $250 or $1,050. That's the problem, you're absolutely right. It's a problem with those guidance. It's obviously easier for established company, growing very slowly to make guidance than it is for a company trying to grow very fast as us. And certainly, the price of potash makes a ginormous difference on EPS, on profitability. Is it possible for potash prices to reach $600? Of course, yes. Is it possible come below our guidance? Yes. What's going to happen? I don't know. Whoever knows the answer, please tell me. I -- but it's a good point raised here. What do you plan to do about Plant 2 vulnerability to adverse weather conditions? The problem we had last year was with the road. So it was very restricted to the location and to where the road is doing the construction. It's not something we would expect to happen again, it was part of the construction works. There's another question here about the Compensation Committee. I think there will be -- this is better and all will be in this managed information circular. What are you planning to do to increase sales beyond Brazil? Brazil is our focus. But we have, as you know, some efforts looking at international markets. There is an international sales manager who handles leads. We've been making some exports to China. It's quite exciting this year. It's the product with added microbes, Bio Revolution, which is getting exported. So -- and specific on the question, what we're doing, we're really focused on Brazil, and we have this one guy who handles opportunity. It's not -- it's our focus. So it has been our focus. How are you planning to mitigate vulnerability to climate phenomenon that affects coffee yield? Another way of asking this is what are you doing to decrease your reliability on sales items that are not required purchased by end consumers? So if I understood the question correctly, it's what I mentioned during the presentation. We're looking to diversify from a geographical point of view that way we are less dependent on specific crops. Which plants could benefit from the application of a product? And what's your sales plan to address each of the potential sales markets, both in Brazil and globally? Every crop benefits, every crop needs potash. In terms of focus, we focus on the crops that represent the bulk market consumption in Brazil. Those crops are soybeans, corn, sugarcane, coffee, eucalyptus. Together, this represents about 85-plus percent of the whole potash consumption in Brazil. Not a question of about compensation. Who were the top 10 salary bonus recipient full year 2023? This gets disclosed as well in detailed in the management information circular. The next question. What drove the 1,000% increase in interest expense between Q4 '22 and Q4 2021? Is this interest expense expected to be persistent recurring cost? Your answer Felipe?

Yes, the coming 2 years, at least. As you know, we do have a significant level of loans that we've raised to pay out for the company growth and also the Plant 2 investments. So we expect not as Q4, a bit less. But yes, I do expect to have a level of this rate for the next 8 quarters.

What are the thoughts on paying for the 25 million to 50 million tonnes expansion if the production growth rate has slowed? Without the coffee growers, what does the EGR look like? It's a very, very good question. I mean, yes, the -- in terms of the expansion, it's scalable. So we can we make the capital expenditure when there is liquidity and the market is right. We don't need to dilute. We don't intend to dilute. In terms of the EGR, yes, if we haven't been successful in expanding markets, our EGR would have been crushed because of what happened with the coffee sector. So I think the fact we've got 30% EGR is phenomenal, and it's a testament to the excellent work done by our marketing and sales team. Another comment here. Many disappointed investors. Thoughts on earning back their trust. I think the best way to earn back their trust is to be transparent about what's going on, which is what we're trying to do here now, addressing the issues for what they were and not hiding from what are some painful situations we are facing. Obviously, we need to remember that we're working here for growth. And even though the near-term results are very important, and they help us learn, we are not in this company, we're not doing this for 1, 2, 3, 4 million tonnes of production. There's much more which we are -- which we're focused on. Then there's a question here about are there more glauconite deposits in Brazil? We have made some duplication of the bulk of it. Of course, there are some minor concessions and the grade is a bit different. And there are other companies pursuing different routes from glauconite, including the production of potassium sulfate instead of a direct application product. Specifically, no one has anything as big as we have, as advanced as we have. And also very importantly, no one holds as many patents to do with the technology, the usage of this mineral as we currently do. Has the company filed for an uplisting on U.S.? That's a comment about NASDAQ, I've already addressed. Has the company approached Brazil's new government about the potential for carbon credits to be issued for Verde's? For the use of Verde's potash? It's not really the Brazilian government that issues carbon credits. You have some international agencies that do that from a voluntary carbon credit market. It's a fascinating market and amazing how much capital there is looking for to buy carbon credits and certainly a shortage of good projects. Another question, what caused this incredible share price decline? My view is that it was a guidance reduction. So we announced the guidance reduction to a much smaller number and with more detail as well on EPS. And there, you have a big impact from taxes. So that is the main reason. At the beginning of 2022, you announced that the guidance for 2023 is 2 million tonnes. And in the earnings, you reduced -- you cut it by about 50%, 800,000 to 1.2 million. How do you explain such a massive decrease? It's what we're seeing from the market in Brazil, from soybeans and people fighting very aggressively to sell potash. Whereas most of last year, the expectation was for a glut in potash supply [Technical Difficulty] by the board. Why are you investing in expanding your capacity beyond the current terms when the top guidance between 2023 is less than half of that? To expand the capacity is not something you do overnight. So there's a lot of regulatory work required in terms of permits. That unless you start, in some cases, several years earlier, you won't have it when we need to. For those of you who have been following us for longer, you will remember how for several years even we were restricted in terms of supply by the permits we had. I changed last year when we had the license issued for 2.5 million tonnes. So it's important to be ahead of that. Obviously, we're not going to be making any investment, which would be material or would be -- wouldn't be in connection to really the preparations for growing markets. Talking about dividends, what about the dividend that you promised to your shareholders about 1, 2 years ago? As you remember, there was a committee put together by the Board with independent Board members that looked into paying dividends. There was a study that was carried out. This was done in context of last year, and the war price potash, potential restriction in potash supply. Situation is completely different now, completely different now as we've discussed throughout the presentation. What's the cost of producing BAKS sulphur and boron products, almost twice the cost of K Forte? It's because sulfur and boron are very expensive. So we need to buy them from the market, we transform them. But the good news is, as we transform them, we make money along the way. BAKS was supposed to be margin enhancing, yes, the margin goes up, but it's about 60%. There's a slide in the presentation where there is that number. Next question. Verde's delivery costs from plant to farmer are very high. Is there any way you can reduce these? It will vary during the year. Obviously, what we've spoken about in terms of the diversifying the locations in Brazil where you sell has advantage and disadvantage. Advantage is that you're less susceptible to variation or to the impact of specific crops. Disadvantage on the other hand is that you do have a higher cost of distribution. Given the much lower production cost of Plant 2, are you considering closing Plant 1 for a while? No, because Plant 1 does BAKS and Bio Revolution, whereas Plant 2 only does Bulk K Forte. What was the cost of the road works, plus the cost of building Plant 2? I think -- well, the number is disclosed when we add all CapEx, everything, but there's other stuff, there is about $40 million. The reason why debt and debt interest is now so high, I think Felipe addressed that. And now that this road and plant costs should be lower in 2023, will this mean Verde will try and pay down as much of this debt as possible? For a growth company, if properly managed, that is a way to accelerate growth. Our customers when they buy our product, they also don't buy in advance. They need credit. So there's a working capital mismatch. So having some debt in the balance sheet in a responsible way is something that will be part of our growth. Verde results discussed in some detail -- the Verde discussed in some detail. The percentage drop in sales made through coffee farmers from 9% of sales to 5%, but no comments on the crop producers that buy the other 95% of Verde's product. Why is this? Because presumably, this other crop producers must have bought more products in 2022 than they did in 2021. What are the prospects for growing these other markets? Correct. In the bulk of those sales or soybeans, which also account for the most or the bulk of potash consumption in Brazil. Next question. Seeds production costs are much higher from Plant 1. Wouldn't it smart to shut it down and produce only from Plant 2 as long as capacity is sufficient? I think Verde's Plant 1, it does BAKS and K Forte Bio Revolution, whereas Plant 2 does K Forte and Bulk. Given the potash price and elevated oil price, this impacted area you deliver to. You mentioned in the earlier call that you won't sell at a loss and focus on more sales if the potash prices dropped. Correct. We will never sell at a loss. We've never done it. But even at lower prices, we can still make significant amount of money selling to places as far away as Mato Grosso state. Is there a price point where Verde would initiate a share buyback? If share's fallen off it might be more value accretive than the aggressive marketing spend into a soft commodity market. It's a point to think about. The next question. Given that producing K Forte and Bulk at Plant 2 is so much cheaper than Plant 1. That's the same question about -- and this is what -- the second part of the question is exactly what we're doing. So Plant 1 only does BAKS and Plant 2 does K Forte and Bulk. That way you get the best of both worlds. You sold shares 3 times in December. The next day, you have reported only 2 transactions. There was a delay in filing, which I understand was rectified. The number given to me was wrong, and so that's what happened. Given the product -- given that producing K Forte and Bulk at Plant 2, that's another question about -- the same question. So I'm going to try to -- there's a lot of repeat questions here. So I'm trying to make sure I don't read -- just curious, does Verde's export to Thailand at all? Yes, we export to Thailand. Yes. Wouldn't it be safer to focus on financial deleveraging at this time of harmful interest rates before proceeding with expansion projects? We're ahead with expansion projects at this time rather than making permits. I'm a private investor from Vienna, currently considering investing in Verde AgriTech. I've been following your company for quite a while in order to be able to make a thoughtful decision. I would appreciate if you could answer me the following question. How big is the potential market for your products and services? Well, I think the best way is to look at our Pre-Feasibility Study. It has a full on commercial analysis there. It's available on our website. But when you look at the 50 million tonnes production scenario from a feasibility study, that would represent about 50% of the total Brazilian potash market. Next question, how many competitors do you have? And why should customers buy from you instead of competitors? How is your company different from its competitors? So we have several competitors. Nutrien Mosaic, [indiscernible], SQM, Uralkali, Belaruskali, some of these companies, they sell products, they manufacture themselves. They produce themselves in Brazil like Nutrien. Some of those companies sell in Brazil as fertilizers. And I think the advantage of all products is it's chloride free, it's salinity free. It's gradual release. It has a number of other nutrients and it costs to the farmer the same or less than conventional fertilizers because it's chloride free, it improves soil biodiversity, which is different from the potassium chloride. How does the sales process work in detail? We have an inside sales team, which manages the relationship with our customers. We have leads that come to our sales team via our marketing team. So we have all the way from digital ads to referrals, which come from our own customers. We have our agents, who are on the ground, independent agents who that broke and make relationships introductions to customers. And now we have the distributors also working for us. Another question here. Has there been any progress? Informed relationship with blenders. Blenders, they need to sell granulated products. Our product is a powdered product. So it doesn't work to add a powdered products to a blended -- to a granulated product. So it's incompatible from a business perspective. How many different revenue streams or projects do you have? And how do you expect them to develop in the future? We have a range of technologies, a range of products, and it depends from crop to crop. I'm just looking at the number of questions here, and we still have about 50 questions to go through. What I'm thinking about doing here instead of -- because I'm feeling a bit like -- I'm not giving an enough attention, and it's a lot of questions still. And I want to make sure each and every one of those questions get answered. So what I would suggest is that we've been doing this 2 hours nonstop, 2 hour and 10 minutes nonstop. I will suggest we take a 10 minutes break and you guys can grab a coffee as well. Hopefully, coffee from [ interstate ] grown with our product. So it's chloride-free. It is better and then we can resume with the questions. And if you're watching it online, don't worry, we are going to cut this 10 minutes, you're going to jump straight through to the other questions. So let's XXXXXXXXXXXXXXX now, and we will resume in 10 minutes. [Break]

We're back, if you're watching it online, it didn't take very long. If you're here live, thank you for waiting the 10 minutes. I'm glad to say we still have nearly 100 people who decide to wait the 10 minutes. So thank you for staying with us. The next question, what is the rate of recurrence of purchases by customers today? It's pretty good. The best way though for you to manage that in a company like ours, which is cyclical and sometimes farmers don't need to reapply fertilizers, like, for example, is or sometimes they are just leasing land rather than doing it year after year is to look at something called EGR, earned growth rate. There's a press release on that, you can Google, you're going to come across it. We have announced our EGR from last year, which was 30%. We're very pleased. Last year had been 100%. So it's very easy. It's very hard to keep going on with positive numbers after big growth, and it shows how our growth has been driven mainly by repeat customers and referrals. Referrals, which are just as important as repeating customers. Next question. How does the customer concentration look like? Do you have major customers, who are responsible for a majority of revenue? No. It's very polarized at the moment. There isn't a major dependence from one or a handful of customers. The next question. How does the insider ownership currently look like? I own about 20% of the company and Board of Directors and other management own another 2% or 3%. Next question, with outstanding receivables at year-end of 28.5 million, can you share your internal approach to managing the timely collection of this significant drain on Verde's cash resources? I will let Felipe talk a little bit about the internal approach. But before Felipe talks about it, it's part of the game. You can't be in agriculture in Brazil. You can't be selling fertilizers if -- you can't be selling crop nutrition products, if you don't give credit to pharmacy. You don't give credit to pharmacy, you're not going to sell anything. So you don't have a choice here. Please go ahead, Felipe.

Yes, we do have this -- it's very common in the fertilizer market that the year-end, the companies have a very significant amount on receivables. Many of the farmers that have cash, for example, soybeans now in the end of March to May, coffee from September to November. So it's quite common and usual debt to meet the financial XXXXXXXXXXXXXXX for this reason. And depending on the part of the time of the year, it might be having like 8 to 9 months of payment terms, receivable terms. And for having the year-end, we have like 90 days only. So we do what we do to mitigate this. We have a credit line that we could do and anticipate these receivables banks, if you want to. We'll have another kind of operation that could make financial operations as well, if you need it. But as I've mentioned before that Verde had most of the receivables free to collect and to include in our cash to help us pay the debt that we have this year. So that's the point.

Thank you, Felipe. Is there much of a demand difference between granulated and powdered product? Would having a granulation plant have helped to diversify the demand through this weak market? It's a good question. Yes, some farmers, they much rather use granulated product. It's something we've been investing in this technology for several years. We've made some breakthrough recently in terms of how to granulate our product with the very low cost. And it's something that, at some point, we will be pursuing and building. Of course, there's a capital expenditure associated with building one of those granulation plants, but it's something in our radar. Next question. In Q4, average revenue per tonne sold was $135, which was higher than full year 2022 of $128. How was Q4 higher than average when Q4 was a full quarter relative to the prior 3 quarters for 2022? That's a good question here. So -- like because potash prices have been sliding as we saw, how come Q4, the average was higher. The [ NSA ] comes from the fact that we do forward sales. So for pharma approaches now to buy product to be delivered next year, we will sell. So usually, there's a bit of a lag on the impact of potash prices, both when it goes up or it comes down. So we saw that happening during Q4. The next question, what kind of challenge, if any, did the company experience over the last 5 years, that was a lot, a lot. I think we could spend another couple of hours here just talking about everything we learned, everything we saw happening. We did do something. We recorded a video, which is available on our YouTube channel with the name of growth mindset inspired by Carol Dweck, who coined the term that we talk in detail about everything we learned over those years. I think it's probably better if any of you interested in the journey to watch this video, because it goes into detail. Then of course, if you have any questions, I want to raise any point, please do reach out to us directly, and we'll be glad to talk more about it. What kind of challenge, if any, does the company experience right now? I think the main challenge right now is navigating this challenging market. It is biting competition. Because there's so much potash in the market, it's getting very aggressive. So it's very important for us to move a little bit away from this from this red ocean towards BAKS and Bio Revolution, which are more -- but I wish -- and I would say a challenge, but something that's been demanding a lot of our energy and focus as well is this new team we have activated, our field sales team that has started working with Lavoro and AgroGalaxy as well as increasing the relationship with some of our biggest customers. From a project development point of view, we remain active on the work required for the expansion even though we're not deploying capital -- CapEx. There is still a lot of conversations with the government in different fronts. So I had mentioned the rail and which is going really well and will be a major, major milestone if accomplished, and I could go on and on because there is a lot. I think what we all see as a public company in terms of the challenge, in terms of what gets done is it doesn't always make justice to the hard work put by all of our teams moving the project forward. It's not easy being a small company in a market dominated by giants. And I'm very, very proud of all the hard work, all the effort our team puts to allow us to keep moving forward. Next question. Where do you see a company in 5, 10 years? I've said that before, and I will repeat. Some companies, they grow because they -- because it grow, because it's a business opportunity, because they can allocate capital in a passive way and all other reasons. In our case, we have to grow, because the world needs us. We have to grow because as potassium chloride gets replaced with our project, we start growing healthier food. We start proving the soil microbiome. And as I even mentioned during the presentation earlier on, there might even be a sizable impact on carbon sequestration. So it's growth, growth, growth. That's our driver. In a sustainable way and above all, in a shareholder-friendly way, different to other companies, who have issued millions of shares to fund its growth and caused sizable dilution. If you look at our share capital structure today, it's extraordinarily similar to what it was when we went public in 2007, 16 years ago. I was talking recently to one of the people, who worked back in that IPO in 2007 and that was shown to him and he wouldn't believe. I never see that happening before a company become profitable like it was with operating assets, operating mine, a plant with that small amount of dilution. The next question, what are your plans for growing the company? How scalable is your business? It's very scalable, and this is one of our biggest advantage. So the next phase of growth, it can be as big for small as we wish, it's modular. So if we decide that instead of building at 10 million tonnes per year, Plant is the next step. If we decide to build a 1 million tonne granulation plant, we can. If we decide to build a 500,000 tonnes plant, we can. So it's very flexible. Next question. Are you looking for acquisitions? No, we're not looking for acquisitions. We think -- we already have a very unique large asset, which can support our growth for generations. So the sole focus is developing this asset. Next question, do you have new products in development already launched? Yes. During the presentation, I went through some of our line of products we've been working on. There is all -- there are the micros we're working on from a biorevolution point of view. And I think when we talk about carbon, it's not a product itself, but it's something big. Are there any catalysts to look out for the next 12 months or later? A lot, a lot of catalysts. We have this rail, which would put us in a different situation altogether, which I hope to have some news soon. I think it's very relevant, because we have a new government in Brazil. And more than words, action matter. And I think it will be a big, big demonstration of how important our project is, especially given the size of the royal permits we're asking at 50 million tonnes per year would be one of the biggest rail connections in the country. Certainly in the next 12 months as well. We work and we've been working for a very long time, and it's something potentially transformative from what we're doing. And hopefully, we will get to materialize, the way we hope. So it's something we're excited. Obviously, when we look at the next 12 months, there is also other permits we've applied to grow in further production, which I would expect to have those results coming up as well. And delivery of sales as well. No, it's -- it's looking challenging from a commodity point of view, from a market role. But I see the -- by every day in the eyes of our sales team and excitement, and I wouldn't be surprised if great things come off the back. There's a few questions here again about the newsletter, we paused that while we're working on the audit on the materials, it's a lot of filings, which need to be done for Q1, but we will resume it. There's a suggestion here about the person of video, about our plant in operation. We were looking to it. It's a good suggestion. There's another question here about dividends, which we've commented on. There's a question here about can you help me with my financial model? How can I project fertilizer prices? Is there any kind of spot price? Maybe I could use the potassium spot price to try to predict revenue? Or is it not compatible with the Verde AgriTech's pricing policies? When we sell, it's based on potash prices, you need to take into account that when we sell via agents, agents get a percentage when salaried, they equally have a percentage, depending on the commercial situation at the time of the year, the counts, which are given -- and also, there is a mix as well of K Forte in BAKS. When we sell BAKS, it's -- you have all the nutrients added track, you have copper, boron, zinc. They have their own margins, which are about 50% and changes it. And when we disclosed all those results, we disclosed those results as an average, so it makes a bit trickier. The other element here is the transportation. So some of our farmers, they will buy a product FOB. Some of our farmers, which is just free on board, just delivered the mine or the plant, some of our farmers will buy product CIF, in which case transportation is added to the cost of the product. So all to say, it's not necessarily easy to be doing a model to replicate all of those variables in the business. The pre-feasibility study has a good account of cash flow looking at each one of those elements I've just mentioned in detail. Please have a look at the pre-feasibility study, and look at our financials and please do reach out if after you've progressed if there's something else we can help you. I note in the fourth quarter and full year-end 2022 results that your net profit and EPS results were reduced. Was that based on the unexpected growth improvement costs that were necessary in order for Verde to operate its business, if so, and then asking -- So the answer is it's -- there's some capital expansion there. But I think as Felipe mentioned, there was also some recognition of interest, which have to be made from an accounting perspective in Q4, which already accounts for interests from the life of the loan. So I believe throughout Felipe presentation, he covered those technical elements here. There has been a lot of marketing videos articles lately about the benefits of this product. We have a quantified feedback about the reaction of farmers to those efforts. Yes, we monitor very closely leads coming from marketing and ROI calculations, everything else. So we measure all of that very, very carefully. A question, do you own or rent the parking area to the south of Plant 1? We rented it, which is part of the original land purchase when the Plant [ 2 ] was XXXXXXXXXXXXXXX to a different owner. If leased, how much do you pay a year for the area? I won't disclose that, but it's a good commercial arrangement for both parties. Why was the return of capital framework not mentioned currently after first [indiscernible]? Well, yes, it's asking about return of capital. I think the market, as I mentioned, has been changing so fast this year. The focus really had to change. Can you talk about your liquidity and solvency position. If there's another one or few quarters similar to the challenging quarter in Q4? And can you talk about contingency plan if there's a quarter or 2 occurred again? Felipe discussed this in very detail. Do you want to answer that one?

Yes. Yes. We -- as I mentioned in the presentation as well, we do held currently on hand receivables for the coming months that is more than enough to pay out obligations with banks during this year. And also, we do have alternatives from -- for to make it even for longer term if needed, which means exchanging short-term loans for long-term loans, that would be an alternative as well as banks. So yes, we do have a few alternatives, and I do not expect -- even we remain similar to Q4, the coming quarters, I think, that there will be no issue to pay for the debts.

Thank you, Felipe. There's another question here, I think you can help. A question about the tax rate from January '23. The wording in the slide is quite confusing. For clarification, does the effective tax rate change from under 10% in 2022 to like 35% in 2023 and future years?

So in Brazil, we have like 3 to 4 types of taxation for companies that from our side to be the ones -- just have 2 types, the one that used to be up to 1st of January this year. So from now on, I do not expect to have changed anymore on this. But what you saw -- or you can see there is like once we have very small profitability, for example, or even though we can have negative results in 1 quarter, this means that we will pay 0 tax, because the tax is not applicable if on the profit. So you see in Q1, we had 0 profit, for example, we're going to have 0 tax or if you have a negative profit as well. So Q2, if we have up of $1 or BRL 1 riyal above in the subsidiary, then we're going to pay 34% of tax. This means in a protected scenario, if you have like a $10 million loss in 1 quarter, and then you have $10 million profit in the next 3 quarters. And this means that in the year end, you have 0 profit. However, you pay tax in Q2, in Q3 and Q4. So for this reason, the percentage may change. In that scenario of 800 tonnes, for example, we're going to see a higher level of taxes, because probably something like things might happen in Q1, for example, [indiscernible], yes. But -- that's the reason this percentage might vary, but I do not expect to have a lot of variation from now on from [ 2024 ] and onwards. We have close to 34% and let see.

Thank you, Felipe. The next question is, can you make your social media purchases in English? It's in Portuguese or Spanish at the moment, can't read it. So in Spanish or always be in Portuguese, when it is targeting our customers. The whole focus of our social media is on our customers on market development. The algorithm for some reason, might be showing it and shouldn't be out of the targeted people, but this is our focus. Next question. When will management information circular be published, and how we access it? The management information circular is issued usually in April or May, might be April. And it's a document that it's available on our website and/or SEDAR, whenever it is published. Next -- there's a good question here. How much does a single Big Bag cost? Prices changed a lot. When we started and what it is now nearly tripled in price. I know the last contract was signed XXXXXXXXXXXXXXX Felipe, if you look a little within last year. Do you have the very nice number of...

Yes, I do, let's say, as mentioned -- when I joined Verde in 2019, used to pay $5 per bag, round. Then it went up to $15 to $20. And currently, we have like $12 to $15 per day. So it is -- it depends, it's not very controllable. What we do to mitigate inflation and cost to have a long-term contract with 1 supplier, which we can trust only him or -- et cetera. So we have set up a price for the next 5 to 6 months already. And he also owns stock for us there in his factory. So I think we are okay for this year. It's a good price that -- good negotiation in the last 2022. And continuing to answer your question -- his question. Yes, the cost of the bags included there in the table that I have shown before. About recycling, we tried before once, some customers. However, the logistics is very complex. And most of the clients say that they really use this bag for other purpose later. So we charge for the bag as well on that side. And that's the point. But we -- it's not waste. They use it for other purpose later.

So the question. Is there an option to recycle these for multiple use to reduce distribution costs? We looked into recycling them at different times throughout our journey. So we try to incentivize the farmer to return those bags to us. We try to buy secondhand bags, but it's always chaotic and you end up -- it doesn't work. It doesn't work. We did try. Unfortunately, it does not work. And what you do have is like some smaller companies that specialize in that and then try to put together a bunch of mixed bags and sell. But like for someone like us, you can't. And -- but we tried -- we're looking into different ways. It's something we look to continue to doing as well. And yes, the selling price as Felipe said, whenever we're selling the product, we add the big bag costs to the price of the product in bags. Next question. The cost of transportation is about 92% of the total sales cost. Do you have a new -- any way to reduce the transportation cost, electrification of Verde operation? It's trucks, not very economic at the moment to have electricity-generated trucks. So we really rely on these unfortunately. But this calculation here about our cost of transportation being 92% of the total sale cost, it will vary depending on the mix of FOB versus CIF. It will vary during the time of the year. So several variables here, but it's undeniable, undeniable that transportation is a major element, to the transportation cost logistics is a major element of the whole business. Next question, would you be able to provide monthly updates regard your major KPIs, like sales, production, freight costs, et cetera. We've looked into that in the past, and there's an issue about audit and about disclosure and about variability and a bunch of stuff. So we don't disclose all of those KPIs. In the monthly newsletter, we tried to keep people as updated as possible. You guys did really well in Q1, Q2, Q3 of 2022. But it would be nice to not extrapolate the growth and the trend if we were given this monthly update. Understood. Freight transportation costs, you eroded Q4 profit. Do you expect this to be a significant issue going forward? What really eroded Q4 profit were dilution of fixed costs. Was -- is the interest rate recognition? Because when you look at the freight transportation costs, of course, it didn't help. But on its own, it wouldn't drive us the actual transaction would make the actual sales transaction uneconomic. Unless, of course, volumes aren't as big as one expected. Next, all in all, thanks for your pended transparency and the billing some of the tough questions. Thank you for your words. But it's my job. I'm not doing -- it's my job. I think every CEO should expect to do that. Would be interested in some kind of follow-up about the geopolitical issues as it regards expansion into U.S. I think this needs this needs and other -- it's a bit worse. It's something I don't feel like I can talk in detail. Sorry. Are you going to reduce marketing expenses in the short term as the commodity market weakens. It's a tricky one, isn't it? Because if you reduce your marketing expenses means not being seen by our customers as much as you want. So it's all about finding that balance between making the right investment in marketing and get to the best of investment, the best return. So we've measured very carefully. We try to measure it very carefully and something we do. And that's something else artificial intelligence has also been helping us. And this is a phenomenal, absolutely phenomenal how it will carry on being more and more relevant. I was talking to an expert and he was talking about how some companies, they -- given the AI revolution, we're going to it's still in early days, but has begun. Some companies should consider recognizing the value of the data they XXXXXXXXXXXXXXX in their balance sheets. It was just saying AI is all driven by data. And if you were, like we were, able to accumulate it and structure it in a way, and this is very, very, very valuable, extraordinarily valuable. I'm talking about some examples of companies, which believes the data itself is going to be worth more than the company. And I think it's our case, but I know that from other competitors and other companies, we are in a completely different league. There's a company in Brazil that was acquired in the fertilizer space for hundreds of millions of dollars, and I spoke to the acquirer. And he was telling me the company didn't even have a CRM. It didn't have a CRM. It was like crazy. And so you look at that sort of extreme situation and what we've been accumulated, because we're talking about our thousands of customers, but in addition to our thousands of customers, at the moment, we have nearly 20,000 people in our database to whom we've been communicating somehow for the last few years. So we have all of that log, each interaction, each communication, each response whatever the person looked, what happened in each case. So all of that is what I think AI will be making a massive difference. Next question might you consider hosting an in-person AGM in Brazil, this summer for shareholders, who would like to visit the plant and mine site based on shareholders paying their own way to the event so as not trend any cost burden to Verde? We're very open to opening our doors and hosting trips from shareholders, needs to be done in a structured way in an organized way. We've done it several times in the past. Please do reach out, and we will put together a trip for sure, we need to look at the best time, but we can gladly organize it. It's a pleasure. In terms of the AGM itself, as you know, we're now a Singaporean company. We're truly Singapore company. Our -- we're working to develop the Asian market out of Singapore. And one of the important elements in that Singaporean connection is that the AGM gets posted in Singapore. So this will be the location for the AGM. Anyone who wants to make the arrangements, we'll be happy to host them and meet them in Singapore, the AGM will be some point in June. But before -- after that, we are very excited to have people visiting our operations. Can you give us some of your views into the future with respect to the opportunity and competition given what you have seen over the last year? The future will never be easy. But probably it's easier than it was when we began. If I had $1 for every person, who told me we would fail when we began production in 2017, I probably wouldn't need to sell any shares to diversify. I probably would be very diversified just out of this $1 I would be given, and it has been amazing to see people acknowledging how wrong they were. But there's still a lot of work to be done, and it's not easy being a small company in a market dominated by giants in a very competitive market. where we face all sorts of issues. And I'm just lucky. I think we just all very lucky with the team we have in Verde. How dedicated they are, take the opportunity, which you think Isabella and Louisa who worked very hard in the last weeks, but especially in the last few days, she put together the presentation of the materials, press release, everything. Thank you, Louisa and Isabella, you've done a phenomenal job. So yes -- in terms of competition, I think we want to get worse in terms of -- when you look at exclusively potash, exclusively a commodity, I think that's why it's so important to do what we are doing from the new technologies, from the other technologies from all incorporated solutions and from how we approach it with our customers, not just as a company trying to sell a product, but really a company obsessed about its customers trying to come up with comprehensive solutions for their crop nutrition and to certain extent, crop protection business. Can you please try to estimate the market conditions for the year '24 and beyond? In other words, how long do you expect the current challenging conditions to last? I don't know. I won't even try. I like to plan for the worst and expect the best. That's what we're doing. Sealed Nutrien came out of the public declaration, saying that we expect the market to be tight. So hopefully, you're correct. Someone is mentioning here, another mining company, what are the comparisons with Verde? I think the main comparison is that we're focused on what we are from a technological point of view. These other companies focused on potassium sulfate. We have several patents protecting our business model. And we have a very strong relationship with thousands of customers and a relationship with the strongest distributors in the country now who we're working together to collectively grow the market for our crop solutions. Are there any studies ongoing, which could prove the upgrade on crop yield scientifical? Yes, there are. There will always be. We just received something very interesting on eucalyptus after 2 years, which helps to support BAKS. So there's always research going on. Are there any updates on the timing of the railroad being built? There aren't updates on when the railroad will be built. The key milestone is the permit. It's the concession, the authorization for you to build one. This is highly regulated and would be a major an enormous milestone for Verde to be able to sign an agreement with the new government, should we look in each of the construction of this 80 kilometers rail connection between our operations to an existing rail line in Brazil. There was a press release put out last year. I strongly recommend you all to reread it. How is the train for 90 kilometers rail line? Is it flat? Or is it rolling hills? Some of it is rolling hills. A lot of it is flat. How many bridges will be required for the rail line? I don't know from memory [indiscernible] any way or any bridge, I might be wrong with counts for -- of my mind thinking about any river being crossed here. But something might be interesting to get the discussion in French amongst investors. So glad to know about our French investors and thank you for your support as well and your interest. Out of curiosity to -- investors are going to be customer, too, where the English in social media boast. You're right. You're absolutely right. However, when we do some minor marketing in English to customers, we mainly use Amazon. Amazon is a pretty good platform for targeted engagement with people, who perhaps added your product to their softening basket or stuff like that. I'm sure there will be a lot more we could be doing in terms of an international market. But one needs to focus as someone I respect a lot, once said, you're really only focusing when -- you don't do something, you would love to be doing. You don't do something that would be really exciting to be developed. We import really exciting, but you don't do that then because it's something else, which needs your time and energy. And totally when you do that, you're truly focusing not doing something was important, and wasn't very excited. It isn't really focusing. It's really the other way. Thank you. Paolucci and Cristiano for answering all those questions have been extensive. I wish next quarter and years to come. We'll be easier for Verde and there is nice [Audio Gap] to create what we believe the future should be looking like. This is really where my energy mainly goes and it's crucial for us really to create the future. We believe we will succeed. Thank you for all the long time shareholders. I know a lot of you have been following us for several years. I know some of you who reached out, say, glad to see an opportunity to increase the position. I -- sorry for the ones who left, if we disappointed them somehow, I wish that hadn't been the case. And I wish them well. And I look forward to the next few years of our growth and development. There's a lot to happen this year. There's a lot of very exciting stuff we're working on and we hope to very soon start updating the market. Some of those I have made referenced during this call. If you're watching it online, please make sure you share this video, if you like it, please hit like. It's when you click that like button that YouTube will tell other people like yourself, who might be interested in the company, might be interested in what we're doing, so we appreciate your contribution. And I would like to share that from the 140 people that had started the call were present 145, 150, we still have about 70 people towards the end after this a long 30 -- 3 hours journey, so thank you. Stay well. I look forward to seeing you all again and hear from you very soon. Bye-bye.