Q4 2022 Evogene Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by the conference will begin shortly.
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Ladies and gentlemen, thank you for standing by and welcome to <unk> fourth quarter and full year 2022 results conference call. All participants are present in listen only mode. Following management.
Normal presentation instructions will be given for the question and answer session for operator assistance. During the conference. Please press Star Zero as a reminder, this conference is being recorded before we begin I would like to caution that certain statements made during this earnings conference call by evidence management will constitute forward.
Looking statements that relate to future events risks and uncertainties regarding business strategy operations and future performance and results of that vote yet.
I encourage you to review evidence filings with the U S Securities and Exchange Commission and read the note regarding forward looking statements in today's earnings release, which states that statements made in the earnings release and in a similar way on this earnings conference call that are not historical facts may be.
Forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
For example.
Epogen is using forward looking statements in this call when it discusses its expected path to value creation.
Including potential fund Raisings at the subsidiary level, its and its subsidiaries expected trials and their expected results studies product advancements commercialization launches pipelines milestone potential collaborations and other plans for 2020.
Three and beyond expected burn rate the potential advantages of its technology and its anticipated entry into new fields of activities.
All forward looking statements made herein speak only as of the date of the announcement.
Results many of the factors that impact whether forward looking statements will come true are beyond.
The control of Epogen and May cause actual results to differ materially from anticipated results.
Epogen is under no obligation to update publicly or alter our forward looking statements, whether as a result of new information future events or otherwise, except as otherwise required by law, we expressly disclaim any obligation to do so more detailed information about the risk factors potentially.
Firstly impacting our performance can be found in our reports filed with the U S Securities and Exchange Commission that said I would now like to turn over the call to offer a coffee epogen CEO Ofer. Please go ahead.
Thank you for joining epogen fourth quarter earnings call and full year 2022 results.
I would like to welcome all of you.
I want to review achievements in 2022 and provide you with an update on our activities, it's whether it's potential catalysts during the next 12 months.
Following my review.
Genesis Executive Vice President business development.
Lynn will also serve as CEO of our subsidiary because terror, we've given an update on there was activity.
And for Genesis CFO , you're wondering Doug will provide a financial summary, and other days.
After that we will open the Q&A session.
It wasn't it hasn't been using AI, driven computational predictive biology platform.
Direct and accelerate the discovery and development of life Science based products ranging from me program Therapeutics in human.
Angel agriculture applications for medical cannabis.
Our AI driven competition relative engine, so forth product development in our five maintenance subsidiaries.
In addition, if it didn't have any tendency to basically the vision and recently on December eight we announced that we would receive $3 $5 million payment from Bayer relating to epogen Perkin portfolio other trades collaboration with Bayer.
Epogen is focusing on developing three AI driven pick engines.
Michael will stay I supporting Michael based products.
Jim.
Supporting small molecules based product and generator AI supporting products based on modifying genetic elements.
Our tech engines used to identify the most promising candidate or mix of candidates.
Specifically desired lifestyles product to trivia.
And to support that can be that development process, leading to a commercial product.
By doing so we are solving an urgent biological chemical problem, providing a solution that will address a substantial need and hopefully create significant commercial value.
I would like to emphasize this whenever we are identifying specific microbial genes or small molecule. There is always huge multitude of potential candidates.
And because that time, driven computational biology platform.
Pets find the needle in a heightened it in a way and in a timeframe that our competitors or partners may not be able to accomplish.
Decent neighbors reduce development time, saving significant cost and most importantly increase probability of success in developing a commercial life science based product.
Each of our three AI driven tech engine had hubs epogen established business ecosystem. This includes either independent subsidiaries or strategic collaboration focused on developing products for specific life science market segment or product types.
In a few moments I will review the impressive recent accomplishment of our five subsidiaries, which demonstrates the power and the value of our AI driven tech engine.
Buying the product development process looking ahead, we intend to continue to invest and improve our AI engine.
Addressing more potential life science discoveries and provide better and nobody solution development challenges.
It's important to me to emphasize the people agenda is actively looking to increase shareholder value by.
Entering into values business relationship with a leading multinational companies for product development using our engine.
Generating revenue by commercializing and selling products.
Meeting all the milestones, including doors aren't their values collaboration agreements.
Raising external funds at the subsidiary level that demonstrates the value and working hard to provide shareholders with a greater understanding of our business and subsidiaries achievements.
As I mentioned.
It doesn't affect the theory and rich multiple achievements this past year and have multiple upcoming milestones in the year ahead.
We believe we can create value for each of the subsidiaries and forgive me just shareholders.
I would like now to review them separately and I will start with people agenda subsidiary Lavie barrel leveraging epogen as Michael will stay I think Amgen is.
Obesity biology, driven design platform to develop next generation at the logical product.
In addition to our majority ownership.
Oh, it partially on a multinational Arctic giant Cortez up listed on the New York stock exchanges with a $45 million of market cap.
On August 17 2022.
Right now the ICL and leading multibillion dollar New York listed global minerals, and Arctic company was making a $10 million investment into the B bio under agreement.
I feel the investments and collaboration agreement with the P value, we won't be Borden lavie back it was a product pipeline.
Combining all of your buyers I felt logical experienced and cutting edge technology.
With ICL knowledge of fertilizer and farmers need.
You'll have to facilitate the development of new and innovative products for lavie bio in the agriculture industry.
Let me back with product pipeline, including its first commercially launched product driven.
The microbiome best buy when you planned for spring wheat.
Everybody wondering what authority approval in the U S. A and commercially launch the product initially in North Dakota in the second quarter of 2022.
<unk> managed to improve yield for spring wheat.
In the second quarter of 2022.
That you're fully sold out of drivers and its initial sell in order to foster USA.
Now in the second quarter of 2023, let me back that is targeting the 10 million eggs or spring wheat market in the USA and expecting significantly increased sales.
Our board has traveled potentially contribute an additional three to four bushels per acre.
The improvement compared with industry benchmarks.
Looking ahead, we are aiming to broaden silva of drivers beyond USA and into Canada and Europe . In these markets. We are also working to expand our label for drivers to include additional crops, such as small grain and oilseed use potential increased target market covering approximate.
C 500 millions of acres.
Let me back up is continuing the advent its bio pesticides problem.
<unk> bye with fungicide and insecticides.
So bear in the P value of submitted the registration package did United States Environmental Protection Agency for last 311.
It has not been performing besides product targeting full truck and probably made us a final step prior to commercialization, which is targeted for a commercial launch in 2024, assuming all goes well.
The initial target market size for last 311 is over 400 million dollar.
In the treatment of risks.
And there is a potential room to expand the target market to over $800 million. Once you think through this targeting additional fruit and vegetables.
In the coming year, we plan to expand the potential addressable market for luxury one one by broadening its application to additional crop, while optimizing the product and manufacturing costs.
Second when we get that product last week to one which also had been in last year of 2022 has the potential to solve what is becoming.
Expanding challenge for growers and the traditional chemical used in agriculture again downy mildew.
Pleasingly being banned globally.
In the coming year, we are planning additional field trials that will also include additional disease for this product.
That'd be boggles achievement to date demonstrate the power of Apple genus technology.
Six engine, Michael Booth, AI, which is very much proof of the validity of the epogen business model.
It wasn't a second subsidiary he's biomarker focusing on developing microbiome therapeutic targeting human health, leveraging epogen and Michael will say aye.
But I think also had a very successful and active year in 2022.
Most recently on December 21.
Let me kind of announced a $20 million financing round led by a 10 million dollar investment function high health care capital.
And still subject to Chinese regulatory approval anticipated later this month.
$10 million from imaging.
The deal was done at a post money valuation of $58 million.
Following the expected close it wasn't really 167% of biomarker and CHP will hold 20%.
This external and independent endorsement of biomarker validates our belief in <unk> long term potential.
Well, let me kind of country focused on its three proprietary therapeutics products programs.
The most advanced program is in immuno oncology.
Using our competition analyses and predictive capabilities.
The only kind of identified BMC 128 last year.
Generally designed live biotherapeutic products consortia.
Last June but you only got begin its phase one clinical trial in Israel for being one of the 28.
In the treatment of body types of solid tumors.
And those of its first patient in July .
The phase one trial is expected to enroll <unk> patients.
The phase one trial is designed mainly to evaluate the safety and tolerability, but again because of the BMC. One of 28 in combination with an anti PD one checkpoint inhibitor opdivo.
Those cancer patients.
But let me cut goal is to successfully complete the phase one b and C. One of those 28 trial in Israel This year.
In parallel, but let me start planning to file an IND.
N D with the FDA in late 2023 or early 'twenty 'twenty four with a view to beginning the phase one two trial for BMC one of those 28 in the U S. In the first half of 'twenty 'twenty four.
The only cause of second equal biome therapeutic program is focusing on.
So we boil disease or IBD, whereas the lead candidate BMC 333, irrationally design optimized constancia before live bacterial strain.
Instead of a preclinical animal studies BMC suite to suite was shown to significantly reduce inflammation and tissue damage and targeting Gi related disorders.
Thing two starts producing the microbes in quantity that will allow for a phase one clinical trial in the U S. In 2024.
But really cause the third program is focusing on irritable bowel syndrome, or ibs, whereas the lead candidate microbiome therapeutics consortia.
See for partners and 26.
But I'm gonna have completed the discovery phase of BMC 426.
And he's now into a preclinical phase.
The results, but let me cut has received from BMC 426 Skus.
Mental model of I'd be S are encouraging and we look forward to updating you as this program advance.
I want to highlight.
Because of the strong progress is a testament to the technological capabilities of upheaval Genesis micro boost AI engine.
It wasn't certain subsidiary is excellent.
It is developing a next generation sustainable crop protection product by leveraging computational algorithms and the target based approach.
<unk> goal is to do.
Discover and bring to commercial stage, new mode of action for protection products, including herbicide and insecticide and fungicide leveraging epogen came about the AI engine.
What was that in agriculture, there is a major problem with herbicide resistance we'd flourishing.
Not being a new commercial herbicide with a novel mode of action for over 30 years.
Atlanta is addressing that need and developing new herbicides with novel modes of action, which are much more environmentally friendly than existing products.
The crop protection industry is booming in by a few major aki because companies, including buyer be assessed for defensive agenda.
Large multinational fixed.
Fixed players often look to a smaller active companies like <unk> to develop new small molecule candidates.
This is precisely what is happening with Atlanta snow.
Excellent product pipeline, including its most advanced candidate eight T H one.
The herbicide with a novel mode of action, which provides a broad spectrum weed control it has a commercial rates.
During the past year <unk> successfully worked on expanding the data package for H P. H one.
As a result, you're seeing a lot of interest in a P. H one.
For a major tech companies.
Well its other product in Atlanta pipeline. In addition to great interest in Atlantis, AI driven competition two different illogical capabilities.
And then what's already works closely with Teva to develop a new mode of action herbicide tathagata resistant weeds.
Under this agreement Atlantis discovers and Optimizes the herbicide candidate.
And Potempa conduct testing and further development.
Will it ever received lactose products subject to act limits being paid research screen milestone and royalty upon commercialization.
The academic school data collaboration has been ongoing since March 2020.
Well the logical standpoint in the past year Epogen and Atlantis have completed two proof of concept for two of its major AI conditional tool or <unk>.
Is it an active search.
It allows the screening of Mega database of over 30 billion small molecule.
We identified the most promising that the bank to the new mode of action target proteins.
I think search is an important optimization tool to identify promising purchase seemingly more reported to the lead candidate.
Aiming to increase probability of meeting productivity area.
This proof of concept were completed with good with that.
Which we believe will improve act glamorous workflow.
Ongoing pipeline going forward.
In the past year Act limits had further leverage our completion of the platform to.
To expand its pipeline to <unk>.
<unk> fungicide candidates.
Accidents have now completed the first stage of computational work performed gets tagged target selection and now entering the proof of concept stage for these potential targets.
We hope in the coming year.
To further advance the fungicide pipeline and initiate new collaborations with leading global companies in the new potential field.
Moving one for epogen.
Colonial.
It is focused on developing best in class medical cannabis product, leveraging epogen generates or AI.
Engine.
Despite 2022 being a challenging year for the medical cannabis industry in Israel and worldwide.
Canonic, mainly achievement was the recent successful launch of six new second generation product in Israel.
These new products all contained high level of THC about 23%.
While the maximum percentage of D. C legally allowed in Israel is $24 four.
Since its launch we have already seen positive traction for this second generation products in days really market.
This second generation cannot be product, whereas the belo using genetic markers.
Which ever Genesis generally through AI engine identified.
In the meantime.
Canonic main goal for 2023 to grow second generation cannabis sales, while reducing company expenses.
At the same time as I mentioned, the global cannabis market as it became increasingly competitive during the past year.
And we don't expect this situation to change it can do and use them.
Why do we are continuing to support economic growth. We have made some recent structural changes to lower expenses.
And we are considering various longer term auction.
It wasn't subsidiary kept their.
<unk> focuses on developing a complete solution to growing coastal plant useful production of gas or oil.
They should scale.
It utilizes the evident generate through AI engine to develop this unique coastal varieties.
In previous analyst calls, we have not emphasized that there is activity.
But in recent months, we have seen an increase in interest you cut through all that.
So for biodiesel in New York.
On January 19.
No hedging on an agreement to.
To sell a large quantity of cargo seed.
And provide technical support to a world leading European Energy company.
It is cultivation of capital plan.
Countries in Africa.
This follows our announcement of their Oh.
On November 15.
Flagging of our production and distribution agreement with Teton capital form.
Is that again cultivate and distributor of Castor oil.
As there is no gaining strong momentum and attention some others wanting to benefit from growing customer oil for biodiesel.
We believe it has the potential to serve as a major value creator for <unk> shareholders.
Additional information of both but there always be provided by young in our VP of business development shortly.
In summary.
The activities of evil gin and its subsidiaries are advancing nicely.
During 2022.
The external investment in the deep value and by Omega.
Provides independent validation of the significant value inherent in our subsidiary each.
Each one by itself.
<unk> testified to the value originally created they ever.
Thick engines.
With respect to additional fund raising for the subsidiary we continue to work hard to identify and bring value, adding partners and vessel.
In parallel we are too.
Two collaborations for both Amgen and each subsidiary.
If you would inject additional fund for our activities.
Our business access in 2022 shows our hard work in building investing in and strengthening our subsidiaries all of which are leveraging our underlying competitions predictive biology engine.
He is the right strategy.
<unk> is creating value, which we expect will ultimately be reflected in epogen shareholders' value.
Our target is that each subsidiary will have its own financial resources to support this activity.
Fifth.
Wireless evil Gin in addition to being a major shareholder.
We'll continue to play a major role in maintaining and building our tech engine surfing F. Peter with competitive advantage.
We hope to announce many many more success in the coming quarters.
And now I would like to turn over the call to a yellow and in our VP of business development and CEO of Castilla.
After which ever James CFO Euro and Doug will provide a financial overview for evil Jin yeah. Thank.
Thank you all so firstly I'd like to start by saying how excited I am to have joined the Evergreen group and I'm very pleased to take part in this call probably from a reduced cost of activity and recent achievements I would like to exercise conserve offering to our planned future. The increased use of fossil fuels with high carbon footprint in the western world significantly contributes to long term global warming ultimately.
Listening to harsher weather conditions, and increasing the risk to human sustainability. Furthermore, the significant growth in emerging economies, leading to increases in demand for energy will also pose increased challenges.
Fuels in Biopolymers are part of the solution has been to reduce the carbon footprint by reduce greenhouse gas emissions and supporting the growing need for sustainable renewable energy and polymers.
Castor as a subsidiary of Epogen and as mentioned by offering focuses on developing a complete solution to growing capital on commercial scale.
Company was established in 2008 initially by the name of a few little change to Gustavo to reflect the focus on the promising Cocos capital as the vegetable for Biobased materials, whether for biofuel cobalt biopolymers.
As the world looks to replace fossil fuel with biological friendly and sustainable. So we foresee an increase in the markets for cost or cost of goods represent the highest standards you returned to growth as they have high oil content approximately 50% can go on marginal land, meaning that they pose no competition on land, which can support other edible crops.
And support environmentally friendly conservation practices.
From a regulation perspective, the crop aligns with the recent EU regulations supporting replacement of Palm oil to low indirectly us change or I N C crops, such as custom Castor oil and its derivatives are estimated at $1 $56 billion market worldwide today and expected to reach 161 billion.
By 2028 based upon market, what Freeport from February 2020 free.
Because they have competitive advantages that it provides an end to end industrialized solution for cultivating high yield Castor oil position.
Pollution is tailored to optimize all parts of the process from seed to Greg.
The key source.
For value of steroids ability to develop proprietary and vastly superior cosco seed varieties using evidence genomic application capabilities broad genetic library, and generic or AI engine Castor capital genetic library assets based on broad collection of over 300 capital lines from 40 different drugs.
Perfect and climate regions.
<unk> to be above Castor has many years of up unparalleled experience with conservation practices, given the technical support to promise high yields with minimal losses Castor.
Develop the cosco been specific mechanical harvesting machine in collaboration with Italian specialty machine, making.
<unk>.
In addition, the company has developed a proprietary high capacity the Hollywood machine well welcome to visit the site for additional details in the past few months has extensive production capabilities to meet the market demand in different geographies and today produces at citizens free countries, Israel, Brazil, and Zambia in the <unk>.
<unk> polymer based Gustavo closely with market leader and explore new territories to support high quality and stable supply to the growing cost oil derived biopolymers industry and finally, the most important development was the recent agreement for sale of larger amounts of capital and providing technical support to European oil major to launch its calculation of <unk>.
Sure.
Africa every bill to close business relationship with this key customer and others I expect our business to grow and to receive additional orders for system equipment I look forward for sharing more information reviewing the coming quarters.
That ends my summary, and Yamana, Doug will now provide the financial update.
Thank you.
I will now provide the financial summary.
Epogen continues to maintain a solid financial position for its activity with approximately $35 million in consolidated cash cash equivalents and marketable securities.
As of December 31, 2022.
This amount does not include the $10 million investment anybody omnicom by S. H C that is expected to be closed in the coming weeks.
Approximately $9 $7 million of emergence consolidated cash is appropriate to a subsidiary that we buy.
We do not have any bank debt.
During the fourth quarter of 2022, the consolidated cash usage was approximately $2 $6 million or approximately $400000, excluding lavie biome.
For 2022, our consolidated cash burn usage was $28 $5 million or approximately $20 million excluding <unk>.
The consolidated cash cash usage for 2020 do included financing expenses in the amount of $2 $3 million due to the U S dollar.
Nice exchange rate differences and a decrease in the market value of marketable securities in the amount of $800000.
Looking ahead to 2023, excluding any impact from foreign exchange differences and the change in market value from marketable securities.
We expect our consolidated cash burn rate to be in the range of $27 million to $29 million.
I want I would like to now highlight some specific items on the P&L.
Revenues for the fourth quarter was six $660000 in comparison to $311000 in the same period the previous year.
Revenues for 2022 or $1 $7 million in comparison to $900000 in 2021.
The increase in revenues was primarily due to revenues recognized.
They're the collaboration agreement of evidence subsidiary of planners with Teva.
As well as their revenues from the sales of economics medical cannabis products in Israel.
R&D expenses for the fourth quarter of 2022, which are reported net of nonrefundable grant through to you.
$4 $8 million in comparison to $6 million in the same period in the previous year.
For the full year 2022, these expenses were $28 million in comparison to $21 $1 million in 2021.
The main contributors to R&D expenses, when we buy those activities supporting the production and commercial commercialization of it in Uqm's products St. Louis.
Epogen ongoing development of its technology, and Jen and Miami cause microbiome based therapeutics development efforts.
Sales and marketing expenses were approximately $1 2 million for the fourth quarter of 2022.
In comparison to $700000 in the same period the previous year.
For the full year 2022, these expenses were $3 $9 million in comparison to $2 $7 million in 2021.
The increase was mainly due to increased business development personnel and commercial trials of our significant product treatments performed during 2022.
And increased business development personnel in canonic.
General and administrative expenses were $1 $7 million in the fourth quarter of 2022.
In comparison to $2 million in the same period in the previous year.
For the full year 2022 these.
<unk> expenses were $6 5 million in comparison to $7 $3 million in 2021.
The decrease was mainly attributable to the decrease of cost of directors and officers insurance and.
And to the decrease of the share based compensation expenses.
Other income was $3 5 million.
In the fourth quarter of 2022 and for the full year of 2022.
This was received from buyer under their junk seed trade collaboration agreement with Epogen.
As part of our restructuring and reduced patent filing prosecution and maintenance obligations under the collaboration.
Operating loss for the fourth quarter of 2022 was three $8 million in comparison to an operating loss of $8 $7 million in the same period in the previous year.
Operating loss for the full year 2022 was 26.
$9 million in comparison to $31 million in 2021.
The decrease in operating loss is mainly due to the other income received from buyer as described above.
Net loss for the fourth quarter of 2022 three.
$3 $8 million in comparison to a net loss of $8 1 million in the same period in the previous year.
Net loss for the full year 2022, it was $29 $8 million in comparison to a loss of $30 $4 million for 2021.
What's that both offer a yellow and I would now like to open the call for any questions you might have.
Operator.
Okay.
Thank you ladies.
Ladies and gentlemen at this time, we will begin the question and answer session. If you have a question. Please press star one if you wish to cancel your request. Please press star two if you are using speaker equipment kindly lift the handset before pressing the numbers questions will be pulled in the order. They are received please standby.
While we poll for your questions.
The first question is from Chris.
Kristin Scott of Cantor Fitzgerald. Please go ahead.
Hi, good morning, and good afternoon. Thanks for taking my questions. Two for me first question is which subsidiary you think theyre integrated potential for external validation through partnerships and collaborations this year, and then sort of lumpy bio E sided in the paint your expectation.
And that sales could be significantly expanded into 2023 spring season. So what gives you confidence in that statement and just sort of expectations do you have a range or any color you can provide about how you're thinking.
Internally on goals for sales here.
Okay.
And I can see any issues there.
Oh sure and thank you for participating in our analyst call. So I think that the let me by you all.
The company that I would expect that they can engage with a.
Significant licensing agreement.
They have a nice day.
Promising product pipeline.
Eh almost reached the required maturity stage.
And I also mentioned that there even with respect to our existing games in the market.
There will be interest for me.
Hum.
Big distributors are going to engage in a long term relationship with them.
Everybody all along with the product so I think that the.
And everybody always probably the company that I think that the.
Hum.
You can enter into these type of agreements.
The company and probably ask panels that are made.
I made it.
<unk> and jumped during last year.
So because the company that the thing that they continue engaging long standing collaboration between you know there could always be positively surprised and it would be other companies going to enter into such a.
Relationship.
With respect to Oh.
<unk> itself, so we didn't disclose numbers, but I'm assuming that the last year.
The numbers it was then.
And then for the soft launch. So this year, we are talking about a number that's going to be material. It will it be baidu or just won't be.
Some people didn't come.
Company, but streaming material for.
Let me by Us.
It will be a it would be probably what I can say.
Full commercial scale now.
Which.
Well it puts us in a great position for next year could be even more than men.
Even more than what the other entities. This year so to summarize it it can be material or let me buy often maybe not for the whole company.
And we are now and probably going to initiate the us.
Actually.
And processed in the next few weeks.
We couldn't get them finished yet.
Got it thanks very much.
If there are any additional questions. Please press star one if you wish to cancel your request. Please press star two please standby, while we poll for more questions.
The next question is from Brett Reece of Janney Montgomery Scott. Please go ahead.
Yeah, Hi, Ofer and and the team.
Question is on the Caf two speed.
You know as I understand it.
You make the mother line of seed in Israel, and then you.
Transfer.
These embryonic seats to your.
Two subsidiaries had to actually grow out to seed.
Have you actually shipped.
Our mother lineup see to these subsidiaries and when did you ship them.
Okay. So before I will at the end.
So he has to answer to this question I will just let me make a small.
Correction.
We don't have.
T W. R could using for us it's a.
So it gives us a company that we are working with them wanting Brazilian wanting the Africa. So they produce philosophy, but they're not supposed to be the Regal Imogen August there okay.
Maybe you can take the lead on it.
Yes, Hi, Jeff I would like to show you a person has also said correctly, we do the bridging in Israel.
And the production you've obviously you Oscar.
Proprietary seeds are being censored illustrates.
The production that's done on site, but we have a production sites in Brazil, and then another one in Zambia, which also puts us in Israel.
So minor quantities, mainly their rightful breathing.
Other productions are located in a sense of are they could Mr. Richard in the surrounding compartment. So best of luck in America and in Africa.
And the way that people our status.
So you mean.
Each territory, we have what is called a breather right at where we are.
Lending for.
Hum.
Genomics the profile of the of the variety in the relevant territories.
If people can I'll just start to sell the same type of people like that so this is one protection the second protection as debt.
The farmers that we are selling them defeat.
They also are.
<unk> signed an agreement that they have the rights to use those peak only for one season.
And the last is that AR and what we are offering.
To our partners.
The farmer, then we are working with big pharma.
Also the full package which include also.
Technical support.
And the voting machine the Harvester machine and of course that we are all the time.
And then focusing on developing new variety.
I was going to replace the existing one with the better performing with respect to yield or any other.
At rates, which are important for the farmers.
Alright, right I I appreciate that.
Yeah.
Just circling back because I didnt frame the question.
The best way.
Two independent contractors in Brazil in Zambia.
<unk> you.
You have the relationship where they grow out to see how.
Have you in fact.
Yeah.
Some of the mother and lineup cede to them and if so when did you ship it.
Has the.
Clock ticking.
Picking on the development of our of.
The seeds.
They each one of those.
The partners already.
The original day, there what's it called the <unk>.
What is the name of English, but the the regional feed in order to start to produce the feed in tariffs and both of them already produced.
Oh, you mean.
'twenty.
2022 absolutely they've already produced.
Some of them are all significant parcel from Denver, we sold to <unk>.
World, leading energy company as we do.
Disclosed at the end of 2022.
Okay, great. Thank you for taking my questions.
The next question is from Brian Wright of Roth Capital. Please go ahead.
Thanks, Good afternoon.
Real quick question and I apologize if I missed it.
But.
I was wondering if you can help with.
Sizing.
Sequential growth between.
The payment from better versus canonic just.
Kind of give us.
Some.
With the understanding that the scale of the drivers.
Can you repeat your question because it wasn't very clear.
Sure.
Sure sure. So wanted to understand when you look at the sequential growth in revenue.
If you wanted to kind of wait and kind of what was the bigger driver of that sequential growth or is it the gene that from there or was it the growth from that just.
It cannot.
Okay. So there is three five and it's completely separate line. If you look at the operating expenses you will see that there is one line there absolutely is an income.
And this is the $3 $5 million and this is separate from the revenue.
The revenue is coming mainly from canonic activity and some excellent licensing agreement only.
A small portion is from mobile and this is why I said that this year.
Uh huh.
Rich our forecast this year it can be.
I'm.
An immaterial number for luxury buyer. So it was the mortgage number last year.
It's going to be a much more significant.
Great. Thanks, so much for the clarification. Thank you.
Thank you.
There are no further questions at this time.
Before I ask Mr. Ofer hobbies to go ahead with his closing statement I would like to remind participants that a replay of this call is scheduled to begin two hours. After the conference in the U S. Please call 18883 to 690 310 in Israel.
Please call 039 to 55901 internationally. Please call 970, 239 to 55901, Mr. Harbin would you like to make your concluding statement.
Yes. Thank you all for joining the call today, and we look forward to updating you with our progress in our next call. Thank you very much.
Thank you. This concludes <unk> fourth quarter 2022 results conference call. Thank you for your participation you May go ahead and disconnect.
Okay.
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