Q4 2020 Arcadia Biosciences Inc Earnings Call
Okay.
Yeah.
Good afternoon, and welcome to Arcadia, Biosciences year, and 2000 and 'twenty earnings Conference call.
Today's presenter will be Matt Cleveland.
And I'm, sorry, President and CEO, Randy Shaw, Chief Technical Technology Officer, and Pam Haley.
F O of Acadia.
This call is being webcast and you can refer to the company's press release and Okay do you bio dot com.
Before we start we would like to remind you that all kt of Biosciences will be making forward looking statements on this call are based on current expectations and currently available for inflammation. However.
However, since these statements are based on factors that involve risks and uncertainties. The company's actual performance and results may differ materially for adult describe and plat today.
You can review the company's Safe Harbor language and their most recently filed 10-K and again on page seven of today's press release.
With that I'll now like to turn the call over to Matt Cabell, President and CEO you may begin.
Thanks to Wanda and thank you everyone for joining us and welcome to our fourth quarter and 2020 year end conference call.
And in 'twenty was a remarkable year for Arcadia, having achieved record revenues and having greatly strengthened our financial wherewithal. We also established new direct to consumer sales channels and introduce new consumer products enhance our IP portfolio and we fundamentally evolved to a viable commercial enterprise.
I'd like to spend a few minutes highlighting these accomplishments and then we can turn to how they position us for success in 2021.
Beginning with revenues, we recorded an all time high of $8 million and total revenues in 2020, which is approximately 80% of the $10 million and revenue guidance that we had set at the beginning of the year.
The guidance was largely based upon the exuberant economic expectations for the global hemp markets. Following the passage of the 2018 farm Bill and.
And the pre Covid economic outlook.
Although the composition of actual revenues is different than that forecasted and other words, good we'd license revenues versus product revenues. We remain very pleased with this performance in light of the impact the pandemic had on the nascent hemp industry and the overall ability to conduct business as usual and 2000 and <unk>.
'twenty.
The strategic transaction.
<unk> bio series and the licensing of our good wheat distribution rights that enabled record revenues for the year resulted in a liquidity event for the company totaling more than $25 million and cash and stock valued today with.
With the potential future milestones and royalty payments of up to $12 million. This liquidity and the additional capital raises executed since that time significantly bolster our balance sheet for 2021 and beyond.
Importantly, we expanded our product offerings and added pathways to market targeting both b to B and B to C channels for each of our products and 2020, we broadened our product categories to a total of six entering 2021, we are poised to generate revenues from.
Good wheat pasta products, good wheat flour products, good wheat grain sales good hemp CBD seed sales.
CBD oil and our G on the G L a consumer product sales.
And with regard to our wheat sales channels, we developed the digital assets to serve as the backbone for our e-commerce and retail sales for the good wheat suite of products beginning with the launch of our three farmed artist branded pasta and flower products for which we will provide an update a little further along and the call.
We built these e-commerce capabilities for scale and to be utilized for all consumer products, we may offer including food and wellness products alike.
With regard to the sales of our CBD hemp seed and extract sales channels.
Together with our outside expert legal counsel, we have successfully navigated the confusing patchwork of federal and state regulations surrounding the cultivation manufacture and sales of hemp and hemp extracts and we now see of compliant pathway to continue the production and introduction and 2021 of our <unk>.
Hawaiian premium CBD, having persevered in 2020, the cultivation and extraction prohibitions and Hawaii last year and.
And to now be one of the only operations with scale still standing puts us in an enviable position to possibly be the only premium Hawaiian CBD coming to the market and the U S mainland and 2021.
And with a clear green light on cultivation and CBD production.
Vivian specialties is of key B to B channel partner for our Hawaiian CBD, providing formulation and quality assurance along with product distribution into the U S mainland.
They have developed a number of interesting and proprietary topical formulations and are preparing the groundwork for a seamless integration of our CBD products into their current customer base as well as targeting new customers, who will benefit from premium Hawaii and brands.
We also plan to leverage our digital e-commerce backbone developed for our good wheat pasta launch and order to also sell our CBD topical into the consumer retail markets and late 'twenty, one or early 2022.
And lastly, two other fundamental of accomplishments in 2020 were the acquisition of the industrial seeds innovation to bolster our good hemp portfolio of seeds and securing an agreement with tritium three age to be our exclusive seed distributor in Canada.
We successfully integrated ISI as breeding activities and their northwest production operations with our operations and Central California and laid the foundation for 2021 sales leveraging their installed base and strong reputation for quality of genetics and grow our support and as Randy will discuss further and the call. We shipped what is expected.
To be our first of several certified seed orders this year. The tritium good start given it's early in the planting season.
A final milestone highlight for 2020 is our transition to a commercial entity and the fundamental evolution of our innovation engine to developing new food formulations, leveraging our broad trade platforms, and wheat and hemp, let me explain a little bit more about debt as a reminder to date our development.
Form architect as we've called it has been focused on trait discovery using our proprietary non GM advanced breeding technologies. These efforts have yielded great results, having discovered and patented of base of platform traits, which we are now using as the foundation for innovative new food and wellness and <unk>.
<unk> to serve the vast addressable markets and hemp and wheat.
Therefore.
We've shifted the focus of our R&D innovation to one of food science innovation targeting nutrition and wellness products development.
And we'll still have breeding and introgression work to perform as we complete the agricultural requirements for traits existing and our R&D programs as well as for new food formulations, a very positive byproduct of this evolution is a more cost efficient process of innovation the cost of our food science R&D will be.
Significantly less than the traditional trade discovery work and we've already begun redirecting these available costs in 2021 to revenue generating activities, including the customer acquisition programs and ecommerce assets that we've developed to support our good wheat launch.
Which is of good segue into a good we'd launch update.
According to research and markets Dot com, the global wheat flour market and 2019 totaled 181 billion and is expected to reach $220 billion by 2027.
Also estimated by the USDA debt approximately one fifth of the daily recommended calories consumed by people in the U S are from wheat.
And therefore, the market opportunity for nutritional improvements and wheat are significant not only because the wheat market itself as fast, but also because of the share of stomach that wheat represents Furthermore, multiple studies have found a population wide deficiency and fiber with barely 5% of the people and.
The U S meeting the Institute of Medicine's recommended daily target of 25 grams of fiber for women and 38 grams for men.
Considering then that most people today are not getting enough fiber for.
For protein and their daily dilutes, the incomparable nutrient density of our non GM. Good wheat technology can improve the dietary intake of fiber and plant based protein for the average consumer by increasing their fiber consumption by eight times and.
And protein by one five times, while reducing the calorie intake by 30% all without a significant change to way the way that they currently eat.
And then we believe it is the intersection of these three factors one the global fiber and protein diet deficiencies to the share of calories and the average diet debt wheat represents and three the superior nutrient density of good wheat that opens the door wide for good wheat to become a gold standard and wheat the word.
<unk> largest global food crop.
Becoming the gold standard and we will not happen overnight. It will require a well developed global strategy executed and partnership with our existing collaborators as well as others.
As we continue to advance good week commercialization and cooperation with our existing partners that include Cartier. The good Mills ardent Mills Bay state milling, and Arista, where even more committed to expand our reach to new markets and customers. We have therefore engaged external resources with deep and tenured experience in the AG and food space.
And to work with the Arcadia team to deliver a comprehensive near and long term strategy and our operational plan to fully leverage the good wheat platform.
The plan will include a comprehensive review of the company's products and.
And their intersection with the appropriate partners and markets as well as the development of an optimal forward Resourcing strategy as our business scope is increasingly about consumer packaged goods.
And the timing for this exercises ideal, particularly in connection with the departure of Kevin Hodges, Our Vice President of commercial operations as part of this plan and we intend to bring on key <unk> and BDC leadership experience to enable vision breadth and execution down this new path and I look forward to keeping you updated on our <unk>.
Strategy development progress now.
Now for a brief update on the status of our good wheat three farm daughters brand launch activities and Q4 of 2020, we began designing the fundamental building blocks for a successful e-commerce and retail business for our good wheat pastas and flower.
This entailed one the development of our powered by a good wheat brand positioning to the development of the three farm daughters consumer brand positioning three the design of our backend E Commerce website functionality as well as lining up co manufacturing supply chain.
And consumer packaged designs.
At the end of Q4, we initiated a small regional launch with the local grocery retailer, we're now and 38 regional grocers throughout North Dakota, and Minnesota, We also defined and identified a sales channel partner to develop a strategy for optimizing distribution.
And building retail sales throughout the U S and 2021.
So we enter 2021 with a functioning website and and SCO and digital media marketing plan to begin the design test and prove cycles and needed to confirm our e-commerce scale of strategy.
We began that effort and mid February of this year. Our initial results were very favorable and driving traffic to our site, but initially we.
We experienced sub par sales conversions we've.
We've since made modifications to our Seo formulas and are now seeing much better conversion rates next will be to begin increasing our AD spend and office optimization and April and May to continue to drive increased sales volumes and we look forward to revisiting and reviewing these results with you and our Q.
One call in May.
So now I'd like to turn the call over to Randy for an update on our breeding research and hemp production.
Operations.
Thank you, Matt and greetings to everyone on the call today as Matt mentioned in the past year has been truly remarkable for Arcadia on the good week front, we've continued to expand our intellectual property portfolio with an impressive 10, new patents granted since January of 2020 further solidifying our leadership position and bringing new game.
<unk> innovation to a staple crops like wheat.
We also continue to evaluate and advance next generation improvements across the good week family of products and have made significant progress and deploying our traits into commercial elite germplasm and building the foundation for scalability as the business grows. We are currently in the midst of wrapping up our counter season activities and Yuma, Arizona and plant.
And preparing for regional trial this summer across the U S where it will evaluate the performance of these new pre commercial lines and different geographies and other various agronomic production conditions setting the stage for data driven commercial advancement decisions and the fall of 2021 and.
And hence we've been driving three major objectives first is to establish good hemp seeds as the leader and quality of genetics and to gain significant market share and the hemp CBD and wellness space.
Second build and intellectual property estate that not only protects our current business, but provides the potential to enable partners throughout licensing and third to ensure a solid foundation of genetics and agronomic production knowledge to ensure the success of our premium Hawaiian hemp CBD business.
I am pleased to report significant progress over the past year across all three of these objectives and August of 2020, we completed the purchase of industrial seat innovations ISI as Matt mentioned.
Which not only brought two new commercial varieties, rogue and umpqua and to our portfolio, but also accelerated our own internal breeding program by two to three years by bringing in bread germplasm assets into our program importantly, one of the reasons. We were attracted to ISI is that they are breathing strategy with the fully aligned with our own both of.
Which are focused on commercializing true F. One hybrid rather than varietals. This not only enabled a seamless integration of the two programs, but hybrid breeding is the key to rapidly improving yield and uniformity and much like the path modern corn breeding programs of followed.
Since the ISI acquisition, we've launched a new commercial variety of NTN and we'll be trialing multiple new pre commercial variety of this summer for potential commercial release in 2022.
As a testament to the quality and uniformity of our hemp genetics portfolio. We had for a variety of is reviewed and approved by the National Association of seed certifying agencies or a Oscar and February of 2021. This approval not only provided and independent validation of our genetics and insurance to <unk>.
Farmers that they can rely on their performance, but importantly, a oscar approval and the production of certified seed is a key requirement to sell seat and to Canada through our distribution partner trading of three eight.
Our partner of the tritium and tell us that even with the backdrop of of turbulent market. They are seeing strong interest for our genetics and the Canadian marketplace and have reiterated confidence in achieving our targets indeed and preparation for early season sales and health, Canada approval, we have already begun shipping seats to our Canadian partner.
And the U S. We are seeing some headwinds and the good hemp business, driven primarily by and overall contraction and hemp acreage and the U S, particularly acreage dedicated for CBD extract many growers have found it difficult to secure offtake contracts and a market that and that is still experiencing an oversupply of biomass and CBD and the industry is really unlikely to X.
Appearance explosive growth until the FDA provides the regulatory framework to enable large CPG players to enter the industry.
And the bright side, we've noticed the new source of demand for our seeds coming from and emerging global Smokable CBD hemp market. There has been significant investment in the infrastructure and the U S over the past year and we expect good hemp seed sales to service of this emerging industry in 2021 and beyond.
We've also begun to get some early traction and the marketplace, resulting in modest sales as we enter the prime Q2 selling season.
Additionally, we've expanded our access to markets by lifting our seeds on partner websites, including the international Hemp exchange and hemp seed, Florida, both well established the dealers.
On the intellectual property front, we made significant strides and 2020, including filing for foundational utility patents for plant patents and five new applications for plant variety protection rights for Pvp rates, although they will although we will continue to be aggressive and building our intellectual property and the hemp industry, we feel pretty good about our current position and protecting.
Our portfolio of products.
Next I'd like to transition to an update on her on our Hawaii operations through our JV with legacy ventures.
And our Q3 earnings call, we reported the regulatory developments that forced us to temporarily pause operations and Hawaii.
As Matt mentioned I'm pleased to update you all today that the team along with legal counsel has charted of compliant path to resume operations and we are currently in the midst of planting our first 40 acre season as we speak we expect to have extraction from the first these and completed in the third quarter of 2021 and have been developing both <unk> and <unk>.
The sales channels to begin meaningful sales on that same timeline.
And with successful execution, we believe we will be the only legal supply of Hawaii grown hemp and extract and CBD and the world and expect to maintain that exclusive position for 12 months to 18 months.
We're also excited because of some initial consumer testing, we completed came back with strong support for consumers recognize the unique value proposition of CBD extracted from premium Hawaiian grown hemp with that I will now turn the call over to Pam Pam.
Thank you Andy I'd like to take a few minutes not as share of the financial highlights for the year of Hugh.
As Matt mentioned at the onset of the call. We were very pleased to execute the series of transactions of bio theory, our former joint venture partner and November generating good license revenue and the amount of $6 7 million and bringing in cash and stock for the downstream.
Total revenue recognized for the year for $8 million compared to $1 2 million during 2019, but the majority of the increase driven by the revenue generated from the good REIT licenses the bio theory, GLA product revenue increase as well.
Total operating expenses of $28 million and 2020 is very close to the $20 6 million recognized in 2019, although the composition different.
Cost of credit cost of product revenue of five $2 million and 2020 with significantly greater than the 885 and recognized during 2019 as a very quiet several inventory write downs during 2020, resulting from net realizable value and quality adjustments to REIT and hence the chain.
Changes and the regulatory framework and the Henry hub.
Industry triggered the write down of our archipelago hemp inventory earlier in the year as well.
Research and development expenses for $8 million and 2020 as compared to $7 1.002 million 19. The increase was driven primarily by higher employee related expenses and we expanded our research teams earlier in the year to accommodate the acceleration of hemp related discovery work.
The recognized the gain and the amount of $8 8 million on the sale of a portion of the verdict got final series of this past quarter, which serves as the credit against total operating expenses. There was no such gain recorded in 2019, although we did recognize the credit and the amount of $1 million and 2019 for <unk>.
And the fair value of contingent consideration relating to an acquisition and the early years of the company.
Selling general and administrative expenses totaled $16 5.002 million 20 of $2 9 million increase and the $13 6.002 million 19.
Increased consulting activity cash fees and stock compensation expense for the primary driver along with higher employee related expenses, including severance associated with november's reduction in force.
We also engaged and additional marketing and public relations and activity and increases in rent and insurance premiums.
The net loss attributable to common stockholders for the year was $4 7 million compared to $28 8.002 million 19 and <unk>.
Mifid and contributor to the.
$24 $1 million of favorability plus the $6 6 million noncash gain resulting from the change in fair value of common stock warrant liabilities in 2020, while 2019 included non cash loss of $9 2 million and.
Number of warrants outstanding that are associated with these liabilities has been reduced following the may and July exercises in 2020, and the fluctuation in our stock price at the end of year re measurement points contributed significantly to the year and liability value and that's the change that flowed through to the results of operations.
The balance of cash and cash equivalents totaled $60 million at the end of 2020 and the balance of significantly strengthened by the net proceeds of $23 3 million generated from the private equity placement transaction in January of 2021, sorry.
Short term investments at the end of the year of $11 $6 million is comprised of the one 875 million shares of <unk> series of common stock the required and November valued at stock price as of December 31.
This concludes our financial highlights for 2020. Thank you very much for your attention today and I will turn the call back over to Matt.
Thanks, Pam and closing we have increased our asset liquidity.
Built needed direct to consumer channels and capabilities and significantly repurposed our spend all destined to drive near term revenue opportunities and at the same time, we refined our focus and further simplified our formula for value creation. All of this in 2020, despite the pandemic underscores our agility and fortitude.
And the potential of this team to execute even better as things are expected to return to normalcy and the markets and why we are looking forward to the rest of 2021.
We look forward to keeping you abreast of our continued progress and with that I'll turn the call over to Wanda for questions.
Thank you, ladies and gentlemen, as a reminder to ask the question you will need to press Star then one of your telephone.
Withdraw your question press the pound key again Thats star one to ask the question. Please standby, while we compile the Q&A roster.
Our first question comes from the line of Covid.
And with Lake Street Capital Your line is open.
Hi, Thanks for taking my questions first the question on the R&D front you commented on your.
And your intent to kind of move away from trade discovery to I forgot how you create the but kind of food.
More on the food side, then the trade side can you update us on what remains in the R&D pipeline from the trade discovery process.
And both on the Hampton.
Sure I'll turn it over to Randy the to answer that question. Okay. Thanks Pat.
Yes, so and trait discovery, we continue as I mentioned and the call to advance next generation improvements across our wheat portfolio. So that would include octane of stability the.
The high resistant starch as well as the reduced gluten, which also has starts characteristics and.
The <unk> characteristics.
And and some additional.
Yield traits that we have been and our pipeline.
On the hip side, and we continue to develop new varieties.
And we're doing that through traditional breeding.
Approaches.
Like I mentioned, we've got new varieties coming out.
And this past year and several more and the pipeline. So we do continue to innovate and I think what really Matt was referring to is the shift and a significant amount of our spend and our focus onto food innovation and really taking these trades innovations that we've developed over the years and getting them into the proper.
New and innovative formulations and into consumers' hands.
Right.
And that's why we hired Tracey Baker, who is the vice president of innovation and so when we think about wheat and wheat.
Scratched the surface with pasta and flower I mean, theres a number of other food executions that ought to contain the good wheat ingredients and so this is an example of leveraging a base platform.
And which is unparalleled and and the.
And the wheat industry right now and the opportunity that that represents and just terms of a different way of innovating and a less expensive way of innovating.
Got it and I appreciate that that's helpful from both you and a quick follow up on that and the hemp side.
And.
THC knock out still and the pipeline.
So we do still have that project and the pipeline.
Okay.
Perfect. Thank you.
Pivoting over to we'd have a couple of questions. There's so many variables going on and the same time.
First of all really exciting, but I'm wondering if you can kind of walk us through how you are constructing your plan to grow inventory over.
Over the next year and specifically around the good mills and want to are you building inventory and preparation for launch in Europe This year and.
If so kind of whats.
What does that look like yes, those are the right questions and.
It is a little bit tricky and.
Just had a very good call with our partners at good Mills this weekend and true.
Transparently Covid has slowed their ability to move as quickly as we'd wanted to but I am optimistic and they were optimistic and their tone and they gave us specifics with regard to when they're launching certain tests with consumers in certain countries.
And so it is their intent to be launching in the second quarter.
Within the three different European countries to test three different formulations and as a follow on to that if all goes to plan and the early results with regard to their formulation testing has been very very positive, especially with regard to the.
The way that the pasta.
As al Dente, and how it performs in the foodservice environment, which is critically important.
And can be cooked for 15 to 20 minutes taken out put and the refrigerator or put in to prepared meals and have them taste extraordinarily well and the undifferentiated.
Undifferentiated from and there were first cooked all of those are very positive results that they've reported back to us. So I would say the kind of back on their track.
But they're very apprehensive as you might imagine to give us.
Real real specifics on timing, but if all goes to plan, we would be ramping up and.
And they would be selling in Europe and in the back half of 'twenty. One provided that the launch these tests and with these website strategies as they plan to and Q2 so.
Im very cautious about setting and expectations around timing I am not cautious about expressing it being a if a when not if kind of scenario.
Got it thanks, Matt that's helpful and.
One more question for me and I'll get back in queue with regards to half of I, certainly appreciate the challenges and operating and the environment, what the regulatory uncertainty and I'm wondering.
The let's hypothetically say that there is all of the sudden visibility of the.
Of that regulatory uncertainty clearing up to what degree of your customer base and the U S and especially those that are legacy of ISI customers.
How comfortable are they with with the the infrastructure that's in place.
From a processing side.
And and there are geographies and as such.
How.
And how meaningful do you think and immediate.
Boost would be on.
And two to hemp sales provided that the regulatory uncertainty clears up or do you think there is.
Are these downstream hurdles still going to be pretty material, even if the regulatory risk is removed.
I'll start with one point and then I want to turn it over to Randy, but when we look at our projected <unk>.
Sales and those are within the the the swim lanes of what has been demonstrated to be acceptable by the FDA at this point, which is really topical. Your question is what happens to all of the other applications and are we prepared.
And our customers prepared to take advantage of that should the FDA come out with clarity on the other areas or other applications and I'll turn it over to Randy the answer that yes. Thanks, Matt.
So I think.
Two business segments to comment on there so on the hemp seeds. The good hemp seeds business I think that look I mean farmers already learned how to grow this crop.
And they are well poised to do so there is significant extraction infrastructure in place and.
And it's really so if the FDA were to come out with very clear guidance and.
And the large CPG and felt comfortable entering the space and I mean, as we all know they've been doing R&D and preparation for that as well. So I think it's a pretty rapid flip of a switch where that demand for new biomass new extracted material. It comes pretty quickly and we will continue to keep ourselves and.
The position to capitalize on debt when when it happens.
On the oil side, the CBD oil side I think it's it's kind of the same thing. So once that guidance comes out of those swim lanes as Matt, but the get well defined for us and for others and so the demand for not only of wholesale oil specifically.
And why your premium, but also our own product portfolio and how we can deliver to consumers I think gets clarified and opened up and again I think we're and.
Solid position to capitalize on that event when it occurs.
Got it got it.
Very good. Thanks. Thanks for your both of your commentary I think that does it for me best of luck with all of these initiatives and I will get back in queue.
Thank you Ben.
Thank you.
Our next question comes from the line of Steven Ralston with Zacks. Your line is open.
Good afternoon, and congrats on the top line.
Thanks Steven.
With the licensing revenue is coming from a bio series.
The indicated.
Coming from good wheat was there any H before involved and that.
Go ahead for them.
Stephen the license revenue is all good wheat, we did recognize the gain of $8 $8 million that resulted from the value of attributed to the.
Our share of the joint venture that we sold.
Alright.
Part of the <unk>.
Licensing revenue.
Is that sale of product of good wheat.
No that was all license revenue okay. So it's one time.
That's correct there is the potential for soybean royalties to the recognized in the future and.
And by a series of does rates commercialization of it.
And pretty good technology, but yes.
And of course, there is ultimately the whole purpose of the license was that.
The series will be bringing good week to South America, and we will ultimately receive royalty revenue for the sale of seed into South America, but.
A couple of years down the line.
Alright.
Moving to the U S.
Of.
Three of farm daughters, and you say these now and distribution of <unk> 38, grocers does that extend beyond the hugo's grocery chain.
Yes.
What are we.
Can you lay any details.
Hum.
Yeah.
<unk> and bottlers and the.
Worlds Kowalski.
They might be true. These are these are really nascent I should point out. These are these are really strong results for a small team of folks going out and basically through word of mouth.
Doing some testing on distribution.
And I mentioned also in my prepared comments that we'd identified and we have now.
Contracted with a formal sales.
Organizationally, who will begin and have begun the process of really getting this out into tier one two and three retail.
And that is.
That's where we're really going to see some expansion in the retail sales at this point, we're really pleased with what we've seen but I do want to caveat. It that it has and is essentially and internal sales effort.
I understand but I also do my due diligence and I.
And I think on the last call I mentioned I did buy it.
<unk> on the web site.
Of gone to Hugo's and have two of the <unk> and the shopping cart right now.
And.
Looking at it.
Understood.
Yes.
When you said that you had.
Increased AD spending slated for April and May.
Is this in.
Support of debt regional effort, there in North Dakota and Minnesota.
This is the e-commerce.
Launch so okay yep.
Just making sure that we understand.
Our demographics and our targeting to ensure that when we place those ads we have the proper <unk>.
<unk> to revenue and Thats really what we've been working on and make sure that as we put meaningful dollars against it that were producing meaningful revenues.
Oh I forgot to mention that I also saw it on Amazon.
Alright, and then good helpful. There.
Moving over to him.
Do you have a timetable for when the.
And of the revenues.
Gain traction and.
And could you would address specifically how our what do you expect from your Canadian partner.
And also from Hawaii.
You bet I'll turn it over to Randy the talks about that okay. Thanks, Matt.
So timing.
With seed sales good hemp seed sales and the Continental U S. Obviously is tied with the growing season and so.
Not just <unk>, but really across the majority of crops.
See really Q2 being the major component of revenue with some some trailing to either and so we picked up some revenue over the last couple of months and Q1.
And we would expect to pick up a little bit trailing off in Q3, as well that can be mitigated by selling into areas that have multiple seasons for example of Hawaii would be one.
Or South America, but at this juncture, we anticipate the majority of our good hemp revenues too.
And Q2 with a little bit of trail off into Q3.
As far as the Hawaii operations go.
And we're going full steam ahead as far as planting.
We expect to.
And we have the optionality to do three seasons, but at this juncture, we plan to to do two and have some land fallow for a third.
And we expect those timings to be kind of.
Kind of Q3 would be when we would have everything harvested have and extract it kind of ready for delivery to BW channel and.
As we mentioned we're also in parallel leveraging some of the infrastructure and expertise that we built around taking good wheat products directly to market.
And building our strategic business plan around.
Also of leveraging those assets to create a.
The B to C channel for the Hawaii premium.
Oil as well.
And concerning Canada, you said the have interest and they've.
You ship cede to them, but it's obviously.
On health Canada's approval.
Right. So yes, so the indications from our tritium and Canada. So Canada is on essentially the same Q2 sales cycle as the rest of the.
Sure.
And the rest of the northern hemisphere.
And with the bulk of their sales is coming just a little bit earlier and kind of the.
For the April may timeframe, when they get and the ground up there.
So we don't expect the timing to be much different.
And the indications so so Canada is a much.
More restrictive market as far as the number of varieties that.
Our farmers have access to.
As controlled unlike really and the in the U S and so it actually creates the.
Less competitive environment for us so we're seeing pricing.
But of a little bit more stable there and the demand is still strong and the variety of that were together bringing to market there.
Have a competitive advantage because they finished really early which is important and in that geography.
And so we feel pretty good about our position there and.
And we've already started shipping seeds as I mentioned, we expect several more shipments to come through that selling season.
And really it's the health, Canada approval that we're that we're waiting for and we expect that we.
We expect that any day now.
Thank you for taking my questions.
Thanks Steven.
Thank you.
I am not showing any further questions I would now like to turn the call back over to Matt for closing remarks.
Well. Thank you everyone for joining the call and your continued interest and support we do look forward to continuing our real time reporting of our key milestone achievements and the lab, the field and and commercial markets and we wish you all safety and good health and thank you and have a good afternoon.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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