Itaconix (LSE:ITX) — Interim Results

0:01 Good afternoon, ladies and gentlemen. Welcome to the ITACONIX PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your investor meet company dashboard.

0:34 Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO, John Shaw. Good afternoon, sir. Good afternoon. We look forward to talking to you today about our great results that we had for the first half of twenty twenty three.

0:56 I'm gonna go through some highlights, then our CFO, Laura Denner, is going to present the financial results. I'll come back and talk about our next step forward to new era of growth, and then we'll have plenty of time available to answer your questions.

1:15 Wanna start by remembering why are we doing this? We are bringing safer ingredients to the world for the low carbon economy, which we believe it is imperative not only for us to do, but for the world to do. The differences in terms of how we're doing it is that we are using plant based carbon coming from idiochronic acid that sugars generated by photosynthesis within a plant are used to ferment idiochronic acid, so it's kind of produced by nature from nature, by nature, that's fermented into a itaconic acid that we bring into our facility here. We convert itaconic acid into performance ingredients that have advantages in certain applications and product categories over competing products of it, and a very low carbon footprint.

2:18 What that allows our customers to do is to have safer, more sustainable products, primarily based on better performance and cost. So in terms of when we think about the creation of a low carbon economy, many companies are there's many pursuits in terms of where they're asking consumers, industries, governments for subsidies or massive premiums to bring this forward. We have certain application areas where that is not required. We're going to bring better performance and lower costs and bring better safety and sustainability at the same time in the niches of where our technology platform occurs. And we believe by doing this, we will create a very large specialty ingredient company based on the performance and advantages that we have.

3:10 We had an excellent first half with record first half revenues and the resources ready to grow. In terms of our results, dollars 4,000,000 in revenues, that's our fifth consecutive first half of record growth on it, 32% growth over first half of twenty twenty two. Our gross profit's at $1,100,000 even grew faster than our revenues because we improved our gross profit margins by 3.2 to 28% gross profit margins over where we were in the first half of the year before. So that's a significant increase in the amount of gross profits we have, and we're able to drop a significant amount of that down to the bottom line in terms of reducing our losses.

3:58 Our adjusted EBITDA declined by 24% from the first half of twenty twenty two to only about 400 to $500,000 of losses. Major progress, financial progress and commercial progress. With that, we are also positioned for more growth. First, we had a successful fundraise in the early part of the year. We raised $11,500,000,000 in net proceeds and an oversubscribed fundraise on it. We now have the resources available for our next stage of growth. We can develop higher volume products and applications. We can invest in production improvements. And more importantly right now is make sure we have the staffing to support our commercial expansion.

4:46 The key metric that we look at when I look around my house or I go into anybody's, I say, What should we be doing? Which ingredients, which products that are used in a household can we bring better performance, better costs, more sustainability and safety to? And the metric we use for that is what our revenues should be, our target revenues per thousand households. For a half year, our target is $20 If we hit $20 per half year for the entire company, we've achieved our next major milestone of it. If we look where we are right now, across North America and Europe, we're at about $11 but more importantly is that we've already established the types of uses to be able to hit our target.

5:36 So we use North America mainly because of the structure of the formulation market and how you can get new formulations out on the market. It is a proving ground for it, but we're already at $26 per thousand households in North America. So we have established the usage that we need in North America. Our next stage is to expand this across into Europe and elsewhere of it so that we get the entire company up to that $20 per household per half, per half a year, per 1,000 households of

6:16 it. This is the key metric that we have. It's how we think about our pipeline. It's how we think about the impact we're having in the world, and we're doing very well here.

6:28 In terms of building a large specialty chemical company, ingredient company, three things we're going to do. We're going to get more consumer brands. We're already bringing value to a wide range of consumer brands. We have customers that are winning with our ingredients. We're going to continue adding more. We're at 150,160 consumer brands around the world. We're going to continue to grow that. We're going to do it with then we're going to add in higher volume ingredients, take bigger shots on net. And then with the products that we already produce in the consumer area, there are opportunities for them in non consumer areas, industrial opportunities, and we think we can capture some additional revenues going forward by partnering with others in areas like industrial water treatment, minerals, crop production, potential areas like that through collaborations.

7:21 But most importantly, we're going to get more consumer brands. We're going to do it with better performance in cleaning, better performance in hygiene applications, and better performance in beauty, and we're going to do it directly and through distributors that we put in place to market new solutions that we're bringing to the market. Next area in terms of bringing higher volume ingredients, we need to realize the safety and sustainability potential that we have in our technology platform by going after bigger opportunities, particularly plant based superabsorbents and plant based resins based on our plant based intermediates that we're bringing forward. With that, the commercial path is to make sure that we work with innovation leaders who are using the ingredients that we're bringing forward to bring forward new solutions into these broader markets.

8:13 So we have a very clear outline of where and how we're going to get there and goals that we set for ourselves each step along the way, and we're making progress on all of them. I want to turn now to Laura. Laura's going to take us through our first half financial results on it. Hi. I'm Laura Denner. I'm the chief financial officer. I'm very excited to present to you our HY twenty twenty three financial result. We had a really strong we achieved record revenues this period as well as record gross profits for the the first half of twenty twenty three. This did translate into we had 23% increase in our revenues on the top line. This translated down to gross profits of 38% increase.

9:06 This reflected a 3% increase on our gross profit margin. We did further bring that down to improve our EBITDA losses at about 24% improvement there. With our our our fundraise, we have positioned ourselves well for our net cash position at 10,900,000. One of the most exciting things about ITACONIX as a business is our our revenue model. We have these reoccurring sticky revenues, and this is really work that we've done over the past several years. So when we as of h y twenty twenty two, we achieved 3,100,000, which was our largest revenue half to date. We were able to expand on this growth with our current customer base. That that represents about 90% of our revenue growth for the that this half.

9:56 And then another 10% is really that next that next level, that next building brick of our revenue growth, and those are new accounts that are coming online. This is a key indicator for our revenue growth, going forward into our future. So these three areas helped us to achieve our 4,000,000 in, revenue for the first half of twenty twenty three, and we're just excited about this continued growth that we've seen over the last five years in our first half. This did translate down to our gross profit margin. We saw an impressive jump in our gross profit. It improved by 48% over the gross profit of HY twenty twenty two. There are really three in three contributing factors to this. We had a favorable product mix.

10:42 Another was that we saw improvement in our cost of goods. We're not quite back to pre pandemic pricing for our raw materials, but we are seeing them to continue to improve. We are seeing the shipping lanes open up internationally, as well as we are able to absorb a lot of our overhead costs as we continue to ramp up production here at our facility. Lastly, we did position ourselves with some pricing increases to our customers, in the latter half of twenty twenty two. It was really based on where we believe pricing would be now, we're really reaping those benefits of this improved gross profit margin in h y twenty twenty three.

11:25 When we look at the business, there's two main segments that really are driving the business, and it's our performance ingredients. Our performance ingredients are our proprietary polymers that we've developed, produced, and we sell here at ITACONIX. We saw 20% growth in the performance ingredient segment, but what was really impressive is that we saw a 43% improvement in our gross profit. In HY twenty twenty two, we had about 29% gross profit in this segment, and we improved that to 34% gross profit in our performance ingredients. These performance ingredients are really key because they allow our customers to provide those claims on their packaging to create the next generation of consumer products. Formulation solutions are another key part of our growth strategy.

12:14 These are really the technical services that we're able to provide to our customers, as well as those support ingredients that help give those key claims that our customers are looking for. We did see substantial growth in that from point six in twenty twenty two first half to 1,100,000 in 2023. So this was a large growth. We did actually see gross profit improvement in this area. We improved it from 8% to about 10%, and these two segments together gave us our our end result of 32% overall revenues and 28 gross profit percent gross profit margin. So when we look at the different markets that we're in, we're in cleaning, beauty, hygiene, but cleaning is really driving our revenues and our profitability.

13:02 We saw 33% growth in just our cleaning segment. That was really due to the North American private label business that we have. We're seeing it enter more stores and getting out into more retailers. We also see that we have improved our gross profit margin on this segment of our business. You know, we did achieve gross profit margin of 25%. We continue to expect that to improve as we identified those areas where our gross profit margin was improving. Beauty and hygiene are still really critical parts of our business. These are the parts of our business that are in the opportunity traction phase of the development. We did actually see doubling almost in our beauty section. This really showed that we're kind of moving out of that bump of the pandemic where our beauty kind of took a took a hit, and we were seeing a lot more traction in this. This is a really good segment of our business because it is high gross profit margin portion of our business.

14:01 Hygiene as well as a high gross profit margin of our business. We did see a little bit of lag in reoccurring orders in this one, but we did see a lot of sampling in the hygiene segment for our odor neutralization technology. So there's still a lot of activity within these two segments, and we expect continued growth in kind of the coming years. So as we come down, you know, we've improved revenues, improved gross profits, and now we're narrowing our losses on EBITDA. So our our improvement in gross profits was really key to achieving this goal. We did reinvest, some of the money, from this improvement back into our OpEx so that we can continue to grow a large profitable, specialty ingredients company. So we did, have some investment back into, growing the business, so all that translated to about a $4,000,000,400,000 EBITDA loss, which is a continued improvement from h y twenty twenty two.

15:02 I think one of the most exciting things for me over the past six months was our successful fundraise. We did achieve a net proceeds of 11,500,000. We are very fix thankful to our new investors and our current investors for supporting us as we embark on this next round of growth for the business. We're oversubscribed in this fundraise, and, you know, it it just speaks to the the technology that we have and the the exciting path that we are on. We did immediately reinvest into some of the operating activities. We rebalanced our working capital in a one time expense, so we improved all those metrics so that we are well positioned to meet those commercial needs that we have going forward. We did achieve EBITDA loss reduction.

15:52 And lastly, we did invest in some of the CapEx spending. So we did start to improve some of the proficiencies in our production, as well as provide some lab equipment so that we can start testing the next round of development that we're looking to do here. I'll turn it over to John so that he can give you a better picture of our outlook.

16:17 Thank you, Laura. Those are great results to get to report out on it. Now let's take a look at the future and the new era of growth that we're entering into. As we have presented before, we work within a $20,000,000,000 potential for safer ingredients based on itaconic acid that's defined by the current uses of acrylic acid and styrene across a broad range of applications, where we are both plant based and we have significant human and environmental toxicology advantages of it. So our core basis is being safer on it, and we believe that that is a very important part of the future, is safer ingredients of it.

17:05 Within that, we have established to date about $2,300,000,000 in a specifically addressable market for the ingredients that we brought forward out of our technology platform where we found a market opportunity to bring forward and create a specific addressable market for our ingredients. We are entering a new path, a new stage of growth as a specialty chemical company. Our path started back in early 1960s when Pfizer tried to make polymers of itaconic acid, in the '90s when Roman Hosch tried to produce them, and then polyataconic acid was identified as one of the top value added chemicals for the bio based economy from biomass.

17:56 This operation was formed in 2008. We just celebrated our fifteenth year anniversary last Friday to bring forward the technology breakthroughs that Doctor. Yvonne Doron came in terms of making the production efficiency of making these polymers. For a number of years, we've brought forward a broad technology platform that we've protected with a broad range of patents on it. From that patented technology platform, we brought forward specific ingredients. From 2018 to now, we've focused in on just the three areas of beauty, hygiene, and particularly cleaning, and we're finding success with that. Now we're going to put it all together into our next phase of development where we can bring new ingredients forward that go after even bigger markets of it.

18:57 We have a very well established process of enabling new generations of consumer products where we bring in, we see an opportunity to transform a product category, we bring an ingredient forward, we go find a few customers for that. Those customers find success, we go find more customers for it, and then what we want to get to is that using

19:21 our ingredient becomes a competitive imperative within some or all of the market segment that we're going after. That's when we hit takeoff on it. This is a process that our internal development process is specific to ITACONIX and actually was recognized earlier this year by Frost and Sullivan for our success in the development process for bio based polymers. So it is about performance and cost of what we've done to date and what we want to go forward, and it ends up being sustainable. So this is the example we presented a number of times of what we do, what we are doing in the North American automatic dish market, where we are bringing more compact formulations forward, putting less chemicals out into the world, increasing the plant based content of those ingredients, at the same time that we're lowering the ingredient cost for these detergents of it. So what that means when you go into the market, into a supermarket here, and the consumer's looking at the choices that they have on the shelf, they may say, Well, I want the best performing product, and they can get that they can choose the best performing product. They may say, Well, I want a green product because those are the decisions I want to make, or I want to save money. I want to use the store brand of it.

20:50 Even though each one of the formulations underlying these might vary a little bit based on those targets, underneath it, in terms of the performance that we deliver to those, we're equally bringing plant based, bio based content with our portion of the formula. So regardless, we are not asking the consumer, we are not asking the brands, we are not asking the market to pay a premium to increase the sustainability. We're gonna be better performance, better cost, and bring that sustainability on. And we think that's the key to the low carbon, the segments of the low carbon economy which we can address. Now,

21:30 we did a fundraise six months ago. Where are we now in terms of our growth opportunities? First is that we're growing, as I said earlier, we're going to grow more consumer brands in the cleaning area in particular. And the three areas we're focusing on is dishwashing detergents in both Europe and North America. We are in North America. We're clearly gaining huge traction here. Our customers are gaining market share here, which you can see by the growth that we have in our revenues from our current customers. And the next, through now through 2025, we're going to end up, we think, in a very large continue to take off in there with some remaining accounts to get there on it, but we have those in target. We're working with our customers to have those in target.

22:23 We are making progress in European dishwashing detergents. We are gaining traction there and starting to head into the traction phase there. And we think by the end of twenty twenty five, we can start taking off and translating our success in North America into Europe a bit. We also see new opportunities that we're developing in laundry detergents. We have been in that segment since our founding in 2009. It was our first laundry detergent account, but we have brought some odor neutralization products forward within our cleaning line that will be creating opportunities for us. That right there gives us the base that we need to go forward for our near term targets of it, and we're well within range. The next areas of hygiene, beauty, and intermediates is how we go to be an even larger company. First and foremost is their odor control. We are already in progress on that.

23:23 We have a worldwide partner in the household side of it with Croda. They are working worldwide with accounts worldwide, advancing opportunities there. We are also working ourselves in some of those smaller accounts there, and we believe that'll continue to advance in the next twenty four to thirty six months.

23:46 New opportunities for us in beauty. The hairstyling is moving its way through our work with Neurion. We do think that there are some opportunities in odor control and beauty. We needed a dry form of our zinc polyiodic conate, which we now have just a few weeks ago. The liquid form had some issues when people went to go formulate, they preferred not to have the water in it, So we now have a dry form that we'll be able to go to market with, and we think we'll see some opportunities there, expanding there. And then equally important is our BioAsterix intermediates. These are iodeconate based intermediates that are a mixture of so we have a proprietary position there either around the underlying compositions, the processes to produce them, or just our ability to supply it. And we're going to start by getting we have been selectively getting research sample volumes out there. We're going to expand that by the first half of twenty twenty four to make it much broader availability of these research samples.

24:57 What we needed was to get our capacity up, our production capacity, internal production capacity to make these quantities, and we've made that investment with a new reactor right here in our laboratory. So we now have a new staffing and a new equipment to start producing these research materials, and you will see those out on the market in the first half of twenty twenty four. The next stage of development for that is when those samples get out there is that we collaborate and find an innovator to work with to take one or more of these materials and to make a new generation of resins based on the functional capabilities and the sustainability that we bring forward in those intermediates.

25:52 There will be a significant advance in this in 2024 in terms of bringing the research quantities available. You will see announcements on that. And then from there, we will be looking for innovation leaders to work with. So at the top, we have all that we need in place to move into advance our current products into large revenues for a nice profitable company, and then below the efforts in place to go to be even a much larger company on it with higher volume applications to it.

26:40 In terms of our outlook for the rest of this year are all in line with expectations. Our revenues will continue to continued growth and sustained growth in terms of our primarily from our existing customers, of our existing customers using our ingredients, our formulations, our solutions to go win bigger in the marketplace, and that's the number one driver for it. We are going to expand our use of digital marketing to access more customers and make them more aware of the new solutions that we are bringing to market of it and not building a large sales force. We think we can access that with digital marketing. We will be Those revenues will drop through to higher gross profits as we continue to improve our margins from higher volumes and stabilization in our raw material costs.

27:39 The higher gross profits will reduce our adjusted EBITDA, so we will be doing some selective increases in our operating expenses. We do need to build up our commercial capabilities and support capabilities to grow from where we are right now. We'll be selectively doing that, but we will continue to drop those gross profit margin growth down to the bottom line on it. And then in terms of cash investments, as we have made investment in lab equipment, we will continue to make some selective investments on our lab equipment to build out new processes, analytical capabilities we need for our new products.

28:25 And then for our existing production, we still have plenty of production. We are still operating well below 50% of our capacity, well below even that. That being said, we do selective capital spending on efficiencies and reliability to make sure that we can keep our production rates per hour and keep our costs under control to make sure we continue to be running as efficient as we possibly can. So it's a great outlook for the second half of twenty twenty three after a great start to 2023.

29:02 In terms of where we are, we have the performance cost and sustainability for our customers to see the market. We're doing that with a large proprietary technology platform with many, many opportunities for years and years of new ingredients to bring forward. We're doing it with low capital intensity. We don't need big new plants, big, huge investments of it, and we get to do that off of an established commercial base, a large and growing base of customers of recurring revenues, high quality recurring revenues to keep building it up, and no direct competition in terms of people actually producing the chemistries that we're producing. I will say in each product category, there may be an alternative ingredient solution that we may be competing against.

29:56 But in terms across the board, in terms of the ingredients that we're making, we are not seeing any direct competition on it. So that's where we are right now. We're very excited to where we are, probably the best first six months of the year that we've ever had on it. So let's go to your questions. John, Laura, that's great. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

30:45 Laura, John, we obviously received a number of pre submitted questions ahead of today's event. And as you can see there in the q and a tab, we've also received a number of questions throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, Laura, John, if I could just hand back to you to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Great. The first question, in which period does the company predict it will move into profits in, for example, h two twenty twenty four. First of all, regardless, you know, we do do two presentations because of slightly different audiences. We did do an analyst presentation about an hour earlier than this one. Wanna be sure everyone, there's no difference in terms of what information we're providing.

31:36 There's no difference of it. It's just a matter of some of the technical nature of what the analysts are trying to get done. We'd like to help them out with a separate presentation. So just to be clear, everyone's getting the same information. Regarding profitability, as you can see, with a $400,000 loss, we are continuing to edge our way towards there. We are balancing that against operating expenses that we need to grow the company to be a much larger one. That being said, I think through the already know what we know for September, three of the nine months of 2023, we were EBITDA positive. So we are already flirting around with the EBITDA breakeven of it right now.

32:25 To know exactly where and when that will balance out, nine out of nine months, it's coming. To say exactly which period's gonna come in, you know, it's coming, it's coming. I can't really tell you exactly which period. There's a number of variables out there, but we are flirting with it as we speak, and we are not we really aren't losing, you know, we're really not losing that much money in terms of a drain on our resources at all with what our current profitability is. Pharmaceutical industry using AI, there are We understand that there's high throughput screening that's done in a number of areas of the chemical market.

33:19 A lot of times that's particularly in the fermentation side, you're trying to find a bug, an organism that has higher productivity. Within the nature of what we're doing, we have not found we do constantly look at it. We don't think it's on the ingredient development side of it. Where we do see, keeping a very close eye on, is on the formulation side of it and helping our customers use artificial intelligence to help them get to new solutions better and faster so that new answers get out there quicker on it. So probably not in the laboratory, in ingredient development side of our laboratory, but we are looking at on the application side of it, of our interface with customers.

34:10 Why is share price so low? Is the company doing anything to improve it? It's a GM tomorrow story all the time. I think John said about two and a half years ago, the company will be profitable next twelve months, so where are we now? I think I addressed the profitability issue. I'm not sure I believe I said we'd be flirting with profitability, and I think we have been flirting with profitability profitability for a number of years. I think our losses have been less than $1,000,000.5 a year, which when you're trying to build a 100 when your goal is to build a $100,000,000 plus revenue company over the long term, yeah, you're going to be doing some investment spending. So I think we've been flirting around the profitability time for some periods. I think I stand by that statement on it, and we continue to progress.

35:04 In terms of why our share price, we are looking at efforts to make sure we increase demand for our shares. We did do a share consolidation a few weeks ago that helps our position in The US. We do have a natural market in The US for our shares. There were some structural aspects for trading our shares in The US, particularly the ability for people to hold our shares in their brokerage accounts that we address with the share consolidation. We are doing our best efforts to generate, one is to generate new demand for our shares in terms of getting our story out there. From Andrew, has there been a number of This one has multiple multiple questions. So the first question is, there have been a number of positions advertised recently, second shift supervisor production operations, customer operations manager, and executive assistants.

36:06 All of them are urgently required. Is this to cope with increased production requirements or to fill positions that have been vacated as a matter of interest? What is the operational production hours? A lot to unpack there, Andrew. Let me take it one at a time. So first, we did increase the capacity, our staffing laboratory for We had people that were sharing a number of jobs on it, and we needed to increase our capacity in research and development, so we added some staffing in our laboratory to increase our development applications, capabilities, particularly as I talked to before, the new reactor we brought in.

36:59 On the customer side of it, we do want to increase our customer facing staffing. We are making some adjustments there. People that are doing multiple roles, want get them some people that are doing multiple roles to have them focus more on customer staffing side of it so that we're adjusting a little bit of our staffing there to increase our sales capability. On the production side of it, we do wanna build a capacity to run twenty four hours a day. We have run twenty four hours a day a number of times in the last few months to meet demand, and we need to have plenty of extra staffing on the operations side to make sure we can reliably run twenty four hours a day when we choose to on it. So all of these are incremental improvements that we're trying to make.

37:58 I would say 2022, we were fairly lean in our staffing, and we need to have capacity to grow. When you're growing at 40% a year, the demands on your staff and on your organization increase, So we are judiciously adding to that to make sure that we increase our selling capability, we increase our ability to bring new products and new applications forward, and that we have all the fulfillment capacity that we need to run reliably to meet customer demand. Number two, Andrew, on it. Are there any new positions which have been filled in the last few months that you can advise us on, and are there any more likely to be required in the near future?

38:49 I think I answered a lot of that in terms of some of the positions we filled. Clearly, as we move towards being a $10.12, $15.20000000 business, our organization is going to grow. It's an important period for us as a management team because there's a transition that happens from being doers to delegators, so we need to take that into account. So we're, again, selectively making sure that we have the capacity to meet all the demands that the market is making on us and that we continue to have the capacity to grow. Most of these are new positions. I'd have to think about Most of these are new positions in total, Adam.

39:37 Number three, we have seen an increase with digital presence on the Internet. What has been the response to this, if any? We did hire a communications director part time earlier in the year. We are working on our digital marketing capabilities. You're already seeing that our presence, Bill McClure, has been doing a great job establishing a more steady presence for us. That was something that kind of fell between the cracks, between various people trying to do it part time. We do believe that digital marketing is the way of the future, and in the long run will be more efficient than adding lots of staffing. So you'll see that we have a bigger presence on LinkedIn, we have a bigger presence on other social media platforms, and you will see that we will be revamping our website significantly in the first half of twenty twenty four to put us in a much better position to both provide the information that our customers need more effectively and more efficiently, and also to make sure that retail investors have information available to them. I think in the last year, you've seen some efforts we've had to have online webinars, capital markets days, a bigger presence there. We're learning from that to make sure that we have our story out there accurately

41:09 and effectively for people to access and learn about us. Question four, the consolidation was done to facilitate increased activity in The US. The direct quote, the directors considered that this is in the best interest of the company's long term development as a publicly quoted company to support the share trading through the company's US OTC listing with a more manageable number of issued ordinary shares in corresponding share price. Can you advise what is being done since the consolidation to to facilitate both the uptick in the share price and the significant uptick in shares being traded by our fellow US investors? How is this potential being targeted? So the goal we had here was to make sure, first of all, to be equitable, that we have a large US shareholder base and we have a large UK shareholder base. To be equitable, US shareholders were restricted in terms of their ability to hold their shares in their brokerage accounts.

42:14 So we think that that was an important first step, is to make sure that US shareholders, current and potential shareholders, can access the purchase of ITACONIX shares through their brokerage accounts. We are in the process of doing that. The share certificates are still on their way because they're all physical ones here. So you'll see over the next couple months that people will finally get the ability to get their shares into their brokerage accounts, and you'll also see that our activity of focusing some of our investor relations work The US market will expand also to make sure, not necessarily new information, to make sure it's more readily available in The US market.

43:09 So I think that the availability to purchase shares and ITACONIX shares in a brokerage account and ready access to information so that people can learn about ITACONIX better and faster through both online presence and the information that we have available on our new website will speed up the ability to generate new shareholders for the company. So the next question we have is, do you have any plans that show when you will hit cash breakeven? Yes, we do have plans. I think they're well stated. There are analyst reports.

43:54 They're well presented out in the analyst reports that are out there. Both Cavendish and Canaccord have analyst reports that, our understanding, are available to retail investors through some sign up. I there may need to be some signing Are up of it for research on you aware of any competing ingredients that is plant based and offers similar performance improvements? There are, in certain segments, are, I think in hair care, there are some other plant based materials that give workers hair fixative. Whether they work as well or not really kind of can depend on the testing.

44:41 In our core area of automatic dish detergents, there are some other plant based ingredients, there are some other sustainable polymers. We believe we still have a significant advantage in terms of cost performance in those areas. I mean, we're in lots of different markets. It's very hard to say in each specific application of what else the formulary is doing. That's why you'll notice our focus on doing fully formulated solutions so that we not only have the ingredients, but we have a fully formulated solution that's easy for a potential customer to implement. John M. Asks, What do you consider are the top three opportunities and the top three risks?

45:29 Top opportunity is to continue to succeed in the automatic dish market in North America and then translate. Those are by far the two biggest opportunities for us that are gonna drive our growth over the next two years. The next one after that is I think we have much bigger opportunity in odor control than what we're currently achieving. I think that that should be a much larger business for us, and we're gonna be focusing more in our commercial activities to generate that opportunity. And then last is this whole new area of both the superabsorbents and the bioasterisks in terms of very big potential large numbers for us. So those are the three, you know, continue to win in automatic dish, deliver much higher revenues in our odor control, the potential is there, and to bring forward the success of either super absorbent or in the bio based plant based resins on it. And of those, you don't need to win very much in that last area to get very high revenue volumes.

46:46 You did say the three highest risks, I'm sorry, the Three highest three highest yes. The highest risk for us right now is there's a lot of well intended efforts for people to put standards on safer chemicals, standards on brands that people think that like it sounds good, but in reality, it's not. So they're all well intended ones on it, but sometimes the underlying science doesn't support what they're trying to do to protect the consumer. So we keep a pretty close eye on that, of what people will perceive as being safer or not can vary out there. To us, that's just it can be a little wild out there.

47:39 Some of the governments can come up with standards that we go like, We don't quite understand where this is coming from. It's not just us. Think it's a lot of our peers in the industry keep a very close eye on that also. So I think the biggest risk is that science of the better science continues to be able to make it out onto the market without any barriers. So Brian asked, Hygiene has been struggling for a few quarters. Why are you doing what are you doing differently to be confident on success in this area? So we did restructure our agreement of how we go to market in odor control, number one. So we have our own direct efforts there. We did bring on Brenntag in North America as a distributor to go after some smaller accounts.

48:39 Particular area where we think that we could do better is in some of the institution and industrial applications. These are more like janitorial supplies and some specialty applications, and we have done well in some of them. For example, in the pet area, we're doing much better. We're seeing some growth there. Second of all, as I mentioned earlier, because we're a liquid, I think there were some barriers that we had in terms of only having a liquid product. We just recently have a dry product to bring to market of it. So I think understand that we're working closer with the market directly to understand where the barriers might be to people formulating and working on those. How do you assess the risk of dependency on China for your supply?

49:31 What could jeopardize your single location sourcing strategy? China is the only producer of idachronic acid. If we solve that, you have to go solve that for the entire formulation that's being produced. So a typical detergent may have seven, eight, or nine different ingredients to it, so if we solve it for ourselves, we still won't get production if all the other ones need to be solved at the same time. I think it's We work closely with our suppliers. It's a mutual We're working mutually with them to grow their businesses.

50:21 It's good for us to grow for them, for us to grow on it. So we we have a close operating relationship with them. It's always a potential tension, but in reality, that is not it does not materialize, and we don't see it as as a material risk right now, subject to, you know, if international relations really advance to that stage, whether or not we get it at kind of gas supply is the least of our concerns if international relationships get get to that stage. Brian asks, what's the difference between EU and North America? Why is North America gaining more traction versus Europe? In automatic dish, it has to do with the structure of formulation process.

51:12 In North America, once you get below the top couple brands, most people are using third party formulators and third party production for their products, so that gives us more ready access to bring new formulation solutions forward. In Europe, it tends to be more fully integrated, where the company that's selling the product is also producing the product and is also formulating the process. So it's a little bit different structural process to go through. So we're working our way through it. It's working well. I would say that COVID really interrupted that for a year or so because the formulators were not in the labs reformulating.

52:02 So there's really a structural difference of why we choose North America and our ability to get new solutions and get them out on the market and then be able to show people what we you know, what our product can do in an end product. John m, why has the American market not brought it into sorry. John M, why has the American market not bought into this? It seems stagnant with good results. Sorry. Is this The US stock market? I think so. I believe so. You know, there's a structural problem in terms of being know, it's extremely it was not possible to buy our it was extremely difficult to buy our shares up until the consolidation, and even for the next few months as that consolidation works its way into people getting into their brokerage accounts, there was just a there's a structural problem to it.

53:03 You couldn't buy. Let's see. Paul asks, in order this kind of goes in hand with what John just asked. In order to maximize full shareholder potential, would it would it be a future possibility to list on Nasdaq? We're a long ways away from that. Nasdaq is a very expensive undertaking. You would take our public governance costs and and probably triple them. So that would be running heavily against being profitable on it. It's a you know, that's probably a 2 to $3,000,000 expense that we don't think adds value to our to our shareholders right now. We think that that kind of spending, if we were going to ever spend 2 to $3,000,000 a year on something, it wouldn't be that.

54:04 I think there's a much higher return on that sort of spending in other areas. John, Laura, if I may just jump back in there, and thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the Investor Meet company platform. But, John, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Great. Well, it's a it's great to report out such great progress in the first half of this year. We are entering a new era of growth where we have that strong base of revenues to build off of.

55:00 We have the capabilities, the proven platform in place, a proven formula in place for growing, and we are not only going to grow our additional base, our current base to be profitable, but also you can see we're moving some initiatives forward to go towards being a much, much larger ingredient company with proven technology platform and a proven commercial process with a proven commercial team. The future has never looked brighter for us. John, that's great. And Laura as well, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations.

55:55 This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of ITACONIX PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you.