Itaconix (LSE:ITX) — Post AGM Shareholder Engagement

0:02 Good afternoon, ladies and gentlemen. Welcome to the ITACONIX PLC post AGM shareholder engagement presentation. Throughout this presentation, attendees will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply click Q and A, type in your question, and press send. Company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investment company dashboard, and you'll be notified once they're ready for your review. I'd also like to

0:33 remind you that, this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to John Shaw, CEO, Laura Dennis, CFO of ITACONIX PLC. Good afternoon. Thank you, Paul. We look forward to presenting today. This is the second year in a row where we were not able to have a face to face annual general meeting that was conducted about an hour ago and this was released in in r and s. All Laura will get through the go through the resolutions of it. We do look forward to, hopefully, next year having a face to face AGM meeting. We have structured today's presentation as if it was a a briefing for our shareholders. So we welcome both our current shareholders and any potential new shareholders to our discussion today.

1:28 There's a disclaimer in terms of anything said today. It does not in any way turn into any forecast that we are presenting here on on this. So thank you for those who have submitted questions prior to the AGM. We've done our best to try to incorporate this into the presentation that we'll be giving. Also, at the end of the presentation, we will go through each of the pre submitted questions and answer any questions that have been received during this presentation.

2:03 So just to get into the results, I am Laura Dunner. I'm the CEO CFO and the company secretary. As John said, we released the RNS that the annual general meeting has completed. The resolutions that were brought to our shareholders have all passed. This is a short list of those resolutions. One thing we'd also like to thank all of our shareholders for being so flexible as we had to change the AGM from an open to a closed meeting to comply with The UK restrictions due to COVID that have been extended to July nineteenth twenty twenty twenty twenty one. So thank you again for for working with us. We are all about polymers for better living. We take our plant based polymers and their key ingredients and a new generation of disruptive consumer products, that satisfy consumer demands for performance, cost, safety, and sustainability.

3:00 We do put those, in order because, although we are plant based, it is, first and foremost, we do try to deliver cost, safety, and performance advantages to our customers within the envelope of better sustainability. Within the current applications or focus that we have for detergents, odor control, and personal care products, we're looking at a potential market of about 600,000,000, $600,000,000 market potential for our current areas. Within that, our products are already validated in as ingredients and formulations that cover about 60% of what we consider the end product formulations that we need within this current market potential. We do have global scaling in place, so it's both directly for our efforts and through partnerships and collaborations that we have with Croda and Neurion.

3:56 And really emerging for us is the value that we have as an advanced sustainable material that enables us to have a major role and opportunities in the emerging low carbon economy.

4:10 When you look at how our products are made, you can see why we have such a great potential within a low carbon economy. Just to briefly go through our production process and and and how it works in terms of the carbon cycle, we buy in iodiconic acid on the open market. We bring it into our facility. We're we're talking to you from our facility in our US facility in Stratham, New Hampshire. We run it through our production process here. The fermentation of idaconic acid involves using corn based products as a feedstock. The carbon in that corn is actually absorbed into the into the plant as carbon the plant absorbs carbon dioxide, uses the carbon, that carbon becomes is the sugar that goes into the fermentation process.

5:05 Those carbons end up in the itaconic acid. We use the itaconic acid to make our our range of polymers that we launch as ingredients. So all the carbons when we're in the itaconic acid are plant based carbons. They get used as in products in consumer products for performance, cost, and sustainability. And depending on the product of whether it's a of water and how it's the the product and how it's, disposed of, it's, during the during the degradation process after disposal, that carbon is actually being held in in the product. It may degrade fairly rapidly. It may, depending on how it's disposed of, may take some time. But during that time, we're actually harb sequestering carbon during that period. So in that, we are actually helping to retain and extract carbon dioxide out of the air and hold the carbon before it's released back into the atmosphere.

6:11 If you look, the ingredients that we make, from itaconic acid, our polymers, are really, feed into customers' demand and wish list for the next generation of products. They're looking for new performance claims. They're looking for reducing the product the the the cost of their end products. They're often looking for more compact formulations so that the packaged products use less packaging, less plastic. They like to have high bio based content, and they want excellent human safety in it. So our products, when when formulators see them, they see that they really meet their wish list quite well. So they'll get a sample of our product, and they'll go through the customer formulation process of evaluating the ingredient, evaluating a formula using our ingredient, optimizing that formula, and then finally get launching it out as an ingredient and product.

7:09 The time for this can vary dramatically between customer to customer and application air area to application area. There are some customers where it's been a five year process, and some where it's been we've been talking to them for longer than five years to go through that process. There's other customers where we get formulated in in less than a year's time. What we found, particularly when we go to market with more, with formulations that are closer to being used, for end for end products, the faster that we make that. So that's but the but it can vary dramatically of what stage of development a customer is in and a lot of to do with what their what their objectives are with their product on it. But we are you know, we've had lots of we increasingly have a number of samples out there.

8:01 Those samples are turning into a very robust pipeline. And as you can see, we reported back in early April, we are turning all this pipeline of projects is turning to increased revenues in both personal care and home care. What our ingredients do to be a dis to be a key ingredient disruptor product, you have to enable new claims. Our three biggest areas are in nonphosphate detergents, odor neutralization, and hairstyling. There's some major market trends that are going in our favor. In detergents, the removal of phosphates, and you're looking for, more compact, formulations in both pods and tablets.

8:46 We offer three major products in that area. Our ITACONIX TSI three twenty two is our most recent one. Our DSP two k is one of our was our very first product. And what we're really competing against is in in the formulation when you take a phosphate out, traditionally, over the last ten years, people have put two products in, a chelate and usually some sort of acrylate polymer.

9:09 What we do is we the t particularly the TSI three twenty two, we're able to replace both the chelate and the acrylate polymer in a fundamentally new formulation to get the performance cost and sustainability that the customers are seeking. So our advantages, one is the multifunctionality of our TSR and and our DSP products. We allow very good compact formulations. We actually can use on a grant for grant basis, reduce the amount of absolute material required, between the chelate and the acrylate polymer. And then, along the way, we are increasing the bio based content. Some customers like to emphasize that on the labeling, some customers don't. But typically, within an automatic dish formula, we're anywhere from 50% to 85% bio based content in an automatic dish formula.

10:01 In odor control, the big major trend there is people are trying to actually eliminate odor instead of masking it with fragrance. We offer three products there, two through Crota, our original Xenodor 22L, and then a more concentrated, more cost effective Xinadore 35L sold by Crota. And then outside of Crota's areas, have our own VeloFresh product. We have superior ability to deliver zinc. Zinc is a well known odor neutralizer. The key advantages we have over other zinc based technologies that we don't leave any residue on any fabrics. It's very easy to formulate with, and overall, we can lower the cost of an odor control formulation of it. And I think we've seen some of the effects of of the benefits that we're having here.

10:53 Within hairstyling, our polymer has a is not a traditional film former former to hold the hair. There are a number of other polymers that give a film and kind of give a crusty hold to the to the hair, but we don't. We have a different mechanism for fixing the hair.

11:15 So that allows weightless hairstyling. If you want that sort of styling, you really need to use our product over the the alternatives. So we go to market with Nurion. They're number one worldwide in the hair fix to the polymer market, where we're competing against both starch as a natural based polymer and petroleum based polymers like polyacrylates. The advantages we have there is if you want this soft hold excellent curl retention to get that claim of a soft hold, you really have to be using our polymer. So in all three of these areas, there are claims that and that brand managers are looking for, where the only way to get it is by using our ingredients. And that's what we continue to focus on, where we are the key ingredient, that for a critical end product claim that we're the decisive ingredient that allows that.

12:15 So to touch on our sustainability, in our 2020 annual report, we released our first sustainability report in there. And four key metrics in there or four key points in there were that 96% of our revenues were based from advanced sustainable materials. Those advanced sustainable materials we've listed below, which are focused in our three areas that John just went over, which are detergents, odor control, hair and skin. And you can see that in that second column, the plant based carbon is really what is the key driver to our low carbon economy. What that high use of that plant based carbon makes our products sustainable and allows us to do that carbon capture that we discussed a couple slides earlier.

13:00 The benefits of production that we have in place here in Stratum is that it's low energy and low CapEx, meaning that we don't have a lot of equipment that we use to cool or heat the product and that our production process allows for a lot of ambient cooling and a lot of low low energy usage. Lastly, John touched on when he was speaking about our automatic dish pods is that we create a lighter weight consumer product, where the example would be typical ADW pods are around 16 grams. We can help produce a 12 gram pod, which helps reduce about four grams of material, chemicals that are going out into the environment. It does have a secondary effect of lower transportation costs because we're not moving as much product around.

13:47 So all of this culminated into our application to the London Stock Exchange for the green economy mark. We submitted that after our 2020 annual report, and we were we received the green economy mark on May 20 in our r and s release, and we're very proud of being part of London's green economy.

14:10 The metric we really look at, is trying to increase the dollar per household, by infiltrating more and more formulations and everyday usages around the house. In home care, we're in dishwashing we are already proven and used in a wide range of formulations, for both home care and personal care, dishwashing detergents, laundry detergents, stain removers, automotive cleaners, bathroom cleaners, surface cleaners, air freshers, pet shampoos, odor removers, carpet cleaners. On the personal care side, we're in hair sprays and mousses, underarm deodorants, hair shampoos, hair conditioners, skin lotions, makeup, body washes, bar soaps, beard grooming, and baby products. So when we look around the house and I walk around the house, we I look about all the different products that we that we can bring advantages to.

15:03 And we've already established use in a broad range of products, and we hope to we will continue to expand those usage. When you think about our future growth, we think about it in terms of increasing our dollar revenue per household in Europe and North America mainly because of the focus in in those regions around the sustainability aspect of it. The lead for us really is in North America. It's not because we're based here. A lot of it's based more to do with the structure of the brands and how they do their formulating. It's a little it's easier for us to access, new formulators that are looking for, for, breakthrough products here, on it. So if you look at our results, our overall results in dollars per household, we went from about 0.36¢ to about almost a full cent last year in to, you know, 0.91.

15:59 But more importantly in that is with our focus in North America, we actually are up to about 2¢ per household in North America. We're gonna continue to grow and use North America as the lead for adoption and proving out the revenues we can get per household, and then work to go find those applications where they're proven and move them back into the European market. Even then, we've, you know, increased our revenues per household in Europe dramatically. Last year, we expect that to continue to grow. But a key metric for us is what we're getting in terms of revenue per household in North America is the leading indicator of where we can go to hit our £600,000,000 market potential.

16:47 In terms of our h one twenty twenty one progress, we did put a trading out update out a couple of weeks ago. We showed that overall growth year to date through May was about 39%. It was a combination of very strong growth in our odor control side of it, continued growth in our detergent side of it, much lower growth in the personal care side. Some of that really has to do with the order cycle that we had. We shipped out a lot of product near the end of, last year, into the, into the customer pipelines, and there's been a bit of a lag in terms of restocking there. But underlying, very good results in terms of, continuing to prove out, the potential for our products in odor control and in detergents.

17:39 As noted, we there are some order cycles fluctuating fluctuated due to adjustments, particularly in terms of post lockdown consumer buying. Brands and retailers are adjusting their inventories as we come out of lockdowns. And then there's selective supply interruptions, particularly of surfactants. So when we ship to a customer's blending site, we're one of several components. You do need surfactants, and there's been some significant disruptions in the supply of surfactants that's delayed, some customer orders on it. But we are, you know, continue it to increase, and we will be, ahead of, last year's first half.

18:25 Another key area for us is new applications and products. We did expand our executive team with a new VP of operations and a VP of marketing and sales to allow, particularly our CTO, and cofounder, doctor Vaughn Durant, and myself, to focus on new applications of product areas. We're excited about some of the progress that we're making there. And what we're really seeing also is that the new focus on sustainable sustainability by the brands is really creating some new opportunities, actually, for some existing chemistries that we've had available for almost a decade, but where the price performance really was too high, but now brands are coming back and looking at what we have to offer in a new light, and we're seeing some new opportunities there.

19:16 We also announced recently a fundraise of $1,500,000 in June, where we did secure a new institutional investor that was very attractive to us. And we also had additional participation by IP Group on it. In terms of ESG and sustainability, we note in our 2020 annual report, the section that Laura referenced to putting in there, we really are trying to emphasize our ESG goals with new metrics that we both established and presented to the market that we'll continue to track and that the LSE green economy mark recognizes the contributions that we are and will make to the low carbon economy.

20:00 Regarding COVID nineteen, New Hampshire has done extremely well in terms of coming out of COVID and the lockdowns. I think we have New Hampshire has one of the highest vaccination rates in the country. I think we're well over seventy percent, I believe, which is quite high. I think there's only a few other states that high. So our US operations are fully back to are back to full on-site staffing, fully operational.

20:28 As we look into the second half, a couple of key observations. One is that the consumer markets are really just in the early stages of converting to more sustainable products. We see a steady drumbeat of people both from being forced by retailers, forced by others to increase the sustainability of it, and we're really in the early stages of it. The second part is that both the ITACONIX and many other plant based ingredients, because of the improvements that they've made in some of the chemistry that have been launched, really are eliminating or narrowing the in cost performance with many of the fossil based ingredients. So we're finding in our polymers, for example, that many, many areas that we can compete directly against specialty acrylate polymers, for example.

21:23 Retailers and consumers are requiring more sustainable products from brands, really without with fairly minimal government intervention at this point. It's really the market that's driving it. Retailers saying that you going to brands saying you have to increase the sustainability of your products to get to get shelf space in our stores, consumers demanding of the retailers that they increase the offering of sustainable products. And we really see that evolving. Second really important area for us in terms of formulation development is that the formulators are now back in their labs working on new projects. We did see a delay last year in terms of new formulation work. We benefited that in some areas because we had formulations ready to go for certain customers, and we benefited from that. But there's other projects that got delayed.

22:15 We now are seeing the formulators back in, and the activity level, particularly on the last six to eight weeks on some projects that have been out there for some time has really started to pick up, which is great to see the formulators back there. And then regarding supply chain, I think this is probably a fairly common message across many companies. Higher shipping costs, longer shipping times, increases in some raw materials. If a forces are looking into continued continue to review our product pricing. We did put a 77% product price increase on some of our some of our polymers back in April. We may look at additional price increases if the market can sustain it.

23:01 And then as I referred to is that the inventory adjustments going on by retailers and brands, I think we're likely to continue, and we expect that order order cycle fluctuation to continue at least for another couple two to three months in it.

23:21 In terms of what our priorities are, I mean, we are focused on increasing our dollars per household, both in North America as the leading edge and in Europe. Three objectives. One is to increase the use of our current ingredients in current applications. Big focus is continuing to expand the use of our ITACONIX TSI three twenty two formulations and dishwashing detergents. We our target is to get one major EU brand and two additional North American brands online. Hopefully, in the second half year, we will keep you informed of how we're advancing on that. And then in odor control, key performance indicator is to get we are already in major brand use in the Xenador 22l through Croda. That's going very well.

24:16 The getting initial orders for the new Xenador 35l, no major brand use yet there, and we're looking for that for the key success factor for expanding the use of that product. We also are looking at introducing some alternative forms of our zinc polyiodiconate, and we're working on production trials to see if we can get a product that could be used in dry formulas. Right now, they're used in liquid formulas. The Xenador 35L and 22L are liquid products. We want a granulate form to expand it. To extend the use of our current we want to extend the use of our current ingredients into new applications, we're looking we want to establish use in some hygiene products, use in sustainable fashion products, and in use in packaging.

25:08 Those are key areas that we are we are focusing on to try to get reach some milestones in that areas. And then as I referenced before, we have a vast range of existing chemistries that we have available to us to create new products to meet any emerging emerging customer unmet needs. We are working on those. Doctor. Yvonne Durand has focused on those, and our goal is to introduce one new product out of our existing chemistries of it. With all of these priorities, we think we can continue to focus continue to get increases in our dollars per revenue per household and continue advancing our our goal on our goals there.

25:56 In terms of the outlook on it, low carbon economy, we have an excellent platform, technology platform that will find increasing opportunities as a key ingredient in disruptive products. I think we're still in the early stages of of how our chemistries can be used across a number of areas. On revenue growth, we have an expanding base of sticking sticky recurring revenues. You know, it's kind of building a brick wall a nice solid wall brick by brick of getting into a broad range of applications, a broad range of brands, broad range of products on the shelf, and to continue to build those as a nice base of recurring revenues to so we can push towards achieving sustainable profitability in the coming years.

26:46 And we are clearly having success as a key ingredient in disruptive products. And as you succeed, it just breeds more success. As you succeed in a product area, you get increased recognition by other formulators and other brands that look at your product more seriously and think that they need a formulation using our product to be competitive in the market. Operationally, we are a make and sell business model. Our production facility is just a few 100 feet from us here. We supply worldwide supply on it. We do keep and maintain inventories in Europe so that we have turnaround times of usually under seventy two hours for any order in Europe, and we maintain inventories there.

27:37 But we are a make and sell business model. We are not looking at any sort of licensing. We plan to continue to produce our product. We have all the capabilities in place here to meet the demand growth. We with some ongoing process improvements, little site improvements in the production line to maybe get some little more efficiency, maybe if we're gonna run a new product, some some site process improvements in it, but no need for major capital expansion at this time because we're gonna continue to supply from our US operations. So just to summarize, what John and I have just been disc discussing, there's major revenue growth here. We've strengthened our balance sheet through our fundraise.

28:23 There's performance cost and sustainability in our products. The low carbon metrics for ESG investing are there, strong demand for the existing products. We have a road map to profitability. There's large potential for current and new products, and we have operational gearing going forward. So we really are in a it continue to be a very exciting stage of development, lots of penetration with our existing products, lots of opportunities for new applications and opportunities for new products, fundamentally new products from our existing chemistries to meet the needs of the low carbon economy. With that, this conclude this concludes our formal presentation.

29:10 What we did have is there's a number of investor questions that came in before the meeting. We'd like to address these and then turn to us the questions that are coming in during the presentation of it. So the first question we had is how do our idaconic acid based products compare in performance versus petroleum based products? It varies from product line to product to product, product area, application area to application area, But in each area, we are, bringing some unique, performance advantage, that's not just because we're sustainable, but because of the functionality that our, polymers have that we're able to replace out one, if not two, sometimes even three products in a formulation.

29:56 So as we discussed in automatic dish detergent, we have

30:02 excellent cost performance there. In odor control, we have some unique properties that when we are using, we don't leave any residues, we're very easy to formulate with. And in hairstyling, we have a fundamentally different fixative mechanism that allows for weightless styling. So in general, we are from a cost position, we usually have to have some aspect unique functionality, which we do have a range of to perform straight up against the petroleum based chemical, but we are really replacing it within a formulation. And when that formulation is done, we've delivered some key claim to that end product that is really only possible through having our ingredient in it.

30:50 So what is the typical time from first contact with a customer to get end product shipped to the stores? There's it can be anywhere from five to six years from when you first have contact, particularly when you get into some of the larger brands. When you get into more specialty brands, they it could be much faster. Although we did get a for a major brand, we got a new automatic dish detergent out in less than a year. So it really depends often where what stage of formulation development they're in, if they're in the exploratory side of it, or if they have a very tight product brief that they're ready to go to market with and we're ready to meet that need. But it varies across the board on it.

31:37 What's your biggest competition? The hardest part for us is is getting the formulators to not just look at our at our material as a one for one for replacement within their existing formulas. We really need to get them to look at what a new formula, what the advantages of a new formula would be. So we typically do much better when people initially, when people are formulating a fundamentally new product versus reformulating an existing product. We'll find success in that new product where there's we're much easier to work with them around the parameters of their formulations and what they're trying to get done. And once they find success with that, they'll then go back and start reformulating into their other, into their existing products.

32:28 So really the biggest competition for us is getting formulators to think, and the brand managers to think more broadly about the claims that they can do in the alternative way to meet those claims. What are the top three limiters to your growth right now, and how are you solving them? Number one in the last year has been the lack of activity, formulation activity in many of the major laboratories. We are seeing that the formulas are back in the lab. We're seeing much higher activity on that. The second limiter for us is when they are formulating is to be willing to expand the boundaries of what they're doing in terms of the formulations that they're changing so that they'll consider all the advantages that we have to offer.

33:18 And then lastly, we just need we're a small company. We still need more people promoting our product and more geographies to more application areas. We have our direct efforts where we do extremely well with the major detergent brands in Europe and North America. There's no one that we do not have contact with there. Worldwide, with Croda in odor control and Neurion in hairstyling, we do well there. But we think there are opportunities for smaller detergent brands in the institutional cleaning, industrial cleaning, smaller brands both here and in Europe, and we'll be looking at ways to get more, just kind of more boots on the ground promoting the successes that we have.

34:07 Five, can bioasteride additives include iron or other minerals? Our additives, this is a broad range of chemistries that we offer in that area. They're usually used for some particular property that someone might be using and looking for in terms of a broad range of properties that they might be trying to add to their product. It does not include they really are not used for iron and other minerals. The yers are not chelating products. These are additives, you know, particularly in films for other functionality of it. So, Six, can you tell us anything about the target revenues for the second half of twenty twenty one?

34:57 We continue to assess order fluctuation and the cycle and how it'll affect our 2021 revenues. We accept we expect substantial growth year over year in our detergent polymers and in our odor control. And in personal care, we are still assessing the situation going forward. So question seven, do you see the bulk of the company's revenues coming from own production or license deals and royalties?

35:25 We're a make and sell business. So, that's our business model. So we produce the polymers here, and we sell direct to customers. We don't have any licensing or royalty agreements that we use, and we don't expect any revenues to start generating from that kind of, revenue stream. Hey. What consideration has been given to adding a production facility in Europe? Really, that's not, not on our planning, horizon at this point. We have plenty of capacity here, continue to, supply out of here. By the way, it's very common, in the specialty chemical business to have one facility. If you look at the other ingredients, say in a detergent, many of those come from a sole production site, whether it's, enzymes or other polymers, surfactants.

36:17 So, it's very common, for a company to have one facility supplying a certain product that's covering both Europe and North America. So, at this point, we have plenty of production capacity here to meet our growth needs, and we are not expecting, anything in terms of, going into Europe, in in the near future on it. Nine, can you explain can you add further explanation to the expansion of the management team has enabled increased focus on new revenue opportunities? So doctor, Yvonne Durant and I were the cofounders of ITACONIX Corporation back in 2008. We're, have a vast range of chemistries, that we've, that we're sitting on, and, we're the ability for both our VP of operations and our marketing and sales team to take take on our efforts there has allowed Yvonne and myself to have more time to look at what the next range of product opportunities, customer opportunities are, and to be able to look at our existing chemistries to see, are there any that we can bring forward to meet some attractive customer needs on it. And it's been very productive for us, and we're only several months into it. We see some nice opportunities already emerging.

37:50 Ten was the recent place to get another investor on board or for cash flow issues. We were had an opportunity. We're approached by an attractive institutional investor who had screened and found us. We're impressed with having them invest in the company. And to do that, we needed to it would be a matter of issuing a few additional shares. That being said, it's with the uncertainty in the world, it's always good to keep a little bit of a cash balance in place. And we saw a great opportunity, and we really thought about it, and we thought it's really to the advantage of all shareholders to both expand our institutional investor base and to have just a little cushion on on our balance sheet of it. So we think it was a great opportunity for all investors, all of our shareholders.

38:48 11, are all of the staff vaccinated against COVID? New Hampshire's done a great job of offering the vaccination and allowing people to get vaccinated if they choose. We are at ITACONIX back in full production. We're here in person. We do follow state and CDC guidance, and we're here and we're working hard. Guys, thank you very much indeed for your presentation and very much for answering the pre submitted questions. Just to give you a little bit of time to look at some of those that have come in, I would like to remind all the attendees today that you can continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the team take a few moments to review those attendee questions submitted already, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard on the Investor Meet company platform.

39:40 I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected the opportunity to provide feedback in order that the company can better understand your views and expectations. John, Laura, thank you very much indeed for answering the pre submitted questions. We've got quite a few questions that have come through, and I think we'll be able to get through all of these. But perhaps if I could just hand back to you, just click on that q and a tab. And where appropriate to do so, if I may, ask you to read out the question and give your response, that'd be great. Great. There's a one refers to an article that, in The Guardian that we have not seen, so we we will have be happy to make comment on that once we go back and read, read read the article and make comment on it. There's another question. Does the company have a contingency plan in place for raw goods supply in case of any supply disruption from China?

40:32 Yes. We do. We have a fairly extensive ones. One is we have very close relationships with our suppliers in China in terms of monitoring what our needs are. We the supply chain did extend where before it might be eight weeks Yep. To get a container from China. It's taking upwards to To twelve to to twelve twelve weeks to longer. Yeah. Twelve to even sixteen weeks to get it. Mhmm. We, as we saw that occurring, we made sure that we had, once we maintain healthy, raw material inventories ourselves to make sure that we have product in place on hand, to meet, any needs over that time frame.

41:17 We also work with, not only there there's not only the production site, but there's also various other sources of people holding inventory, in North America. We have very close relationships with them. So, the way we're dealing with it is just making sure we have, good hefty raw material inventory levels. We see no issue at all at the production side of it. It's really, extension in the shipping times right now, which everybody is experiencing. But we expect somehow we'll resolved, over the next twelve months. There's a question about revenue growth on a percentage basis.

42:03 I can't comment on specifically, but just think of remember, we were starting with a small base of revenue. So percentage wise, you can you know, a $500,000 increase, you know, an equal 500,000. It doesn't percentage wise, it doesn't quite show up the same way anymore on it. But we continue to expect healthy healthy growth rates on it. There's a question about funding growth without further fundraises, and we'll exclude an open offer. We are you know, we were examining. We have no plans for additional fundraise at this time. Again, as we said, the one we had was an opportunistic one to bring in what we considered a very high quality institutional shareholder on it.

42:59 But as we examine our new product opportunities in terms of what's best for all shareholders, you know, we continue we will always assess that. What market share do ITACONIX products have in each of the three categories? How do you see these market shares growing in the next five years? We're still a minor percentage in in in detergent polymers. We're still a minor percent of it, because there's some application areas where the type of multifunctionality we offer isn't isn't particularly doesn't necessarily apply. But what we look at is in the areas where we do have, great competitive advantage, what percentage of new, new formulations that are coming out are we getting? And I think we're in North America, we're getting a very good percentage of the new formulations that are coming out in automatic dish detergent.

43:59 I think in Europe, I think we are getting very strong looks at new automatic dish formulations coming out. So the overall market share is really the result of years of reformulation on it. We look at what percent of the new formulations. And I think in all of our areas, we do well on new formulations. How do you calculate revenue per household? Do you use last twelve months revenue or potential revenue based on approved formulations? That we're doing that based on our reported revenues, on it. So the numbers we just showed were based on our annual our results from our annual report.

44:54 What is the What is the breakdown of revenues between the three major revenue segments, we don't do that. We don't think it's advantageous to our shareholders for our competitors to know exactly where our revenues are coming from. We break it down between home care and personal care, but we don't break it down any further than that. We don't think that that's advantageous to our our shareholders to be giving out competitive information like that. A similar question, WF. Why or way f. Why was there a decline in revenue subsequent to h two twenty to h one twenty one if we would consider the first five months?

45:42 I think like John John was discussing, the denominator or the base of revenues of the the volume, the $500,000 of revenue has a bigger pop in previous years versus this year. Also, we have somewhat of a secular business where we see a slowdown kind of in the January, February, and then a recovery throughout the rest of the year. So there is a bit of a secular, effect to our revenues. Yeah. The new products get new products get, particularly North America, we know is that the the shelves are changed over at the retailers, usually, the end of January, early February. So the fourth quarter is a is always a very big quarter for us in terms of customers filling up pipelines with new products.

46:30 So typically, the then they now that they filled up their pipelines to get them on the retailer shelf, because that's when the shelves turn over, you'll see that the January and February usually much lighter lighter months from us, and then the reorder start picking up, into the second quarter on it. So, our second half, is is, has always been larger than our larger than our first half. We expect that to continue. It does not reflect anything in terms of the underlying demand for our products. It just has to do with the order ordering cycle and loading products onto the retailer shelves. We had another question. Who are the main competitors to ITACONIX in your product areas?

47:18 I think we've we addressed that one before. What are the main challenges for revenue growth? Just we really have everything in place in terms of our capacity. It's really getting formulators back in the labs, doing new formulations, and looking at the advantages that that our ingredients have to those formulations. That's that's always the challenge, is just getting getting the formulators to see what the potentials are with with the new one. Like, for example, in we've had some some smaller successes in The EU automatic dish detergent market. We're looking for our first major brand success there so that someone someone does takes the someone gets the fur is the first mover to to do that, and they so the other companies will see how does that product do in the market and the acceptance of it.

48:20 So getting that first breakthrough in the revenues of the first formulation is big. That's what happened to us last year when we got our first automatic dish detergent product out on the market using our ITACONIX TSI three twenty two. And now now you just get the follow ons of more and more brands reformulating with those new formulations. When do is expected return a full year profit? We're not gonna comment on that at this time. Show your road map to profitability. I think that'll be laid out in more detail in the in the coming months on it.

49:13 Implied by sustainability, I would have thought environmental impact on disposal is very important, but haven't been explicitly mentioned. Can you confirm the environmental impact credentials when product is disposed of? When I go shopping, that's what I'm thinking of, not the carbon capture sequestering. Well, again, our products are the ingredients. Our our majority of our products right now are go into some sort of water are water soluble polymers that are actually in the in in the product that's being used. So whether it's a shampoo or a a dish detergent or a surface cleaner, the disposal of our products right now, the vast majority of them is going off into waterways into waterways. That's why the biodegradability aspects of it are are important.

50:11 So that so so the the disposal of our products right now usually is off into into waste treatment areas on it. The carbon capture is important, though, and that is a growing area of importance of replacing fossil in fossil based, you're basically taking carbon that's already sequestered underground, and you're bringing it up and you're exposing it. That's why we have such large c o two buildup is because we're taking sequestered carbon from under the ground and putting it into the atmosphere, as opposed to what we're talking about is having a circular process of capturing c o two, using the carbon from that c o two to make our products, and then there's a delay in terms of when the carbon gets done. I think when you talk to brand managers and major brands, they are focusing on the carbon sequestering aspect of it more and more.

51:17 What form of production capacity utilization are you operating in terms of percent currently? Again, we don't give out specifics on it, but we have plenty of capacity to meet our needs, we think, for at least the next couple years. What will the money be used for for replacing, paying off debts, or just cash flow? We do not have any we do not have any debt. In fact, I think we announced that the one piece of debt that we have was from a PPE loan from the US government that was forgiven. We do have working capital requirements around our inventories. So when you look at, your supply chain going for idaconic acid going from eight weeks delivery to sixteen weeks delivery, I think, this gives us some benefit in terms of managing our, working capital, particularly our inventories, on it.

52:15 You're not currently active in Asia given the market opportunity there as it is something you are planning on addressing. We in the personal care space and odor control space, we do have sales in Asia. The only area we really have not focused on is in the detergent space because the in most of your most of Asia, they have, it's either a combination. They don't use a lot of automatic dishwashing detergents, or they allow the use of phosphates. If phosphates are allowed, then they're always gonna be lower cost, very effective formulations.

53:02 It's only when phosphates are banned is there an opportunity for us in the detergent side of it. But we are we do have sales into China on odor control. We do have sales in Asia and another place in Asia on odor control. We do have sales into Asia on on our hair fixative side. John, Laura, I know we're just coming up to the hour mark, and I think you have pretty much addressed all the questions you can from the attendees today. Just in case if anything further comes through, you can pick up, do let me know. But if not, perhaps, Sean, I can hand back just to ask you for a few words to wrap up before we redirect the attendees to give you some feedback. We're very encouraged about the increase in the number of brands, the number of products that were out in the market, and the underlying demand that we're we're generating from, penetrating into so many product formulations and just keep building those brick by brick, in terms of a very strong recurring revenue stream out of it.

54:05 We're excited that our breakthrough formulations that we've been able to have in certain areas are being expanded out into other competitors using these formulations. And then lastly, for for me, I just think the potential as brands and retailers and consumers look more at the sustainability of the low carbon economy side of it, the opportunities for our existing chemistries that we have that we have not brought to market yet really is dramatically changing for us. And we're very excited. It'll take many number of years to to fully develop that, but I think there are really some very attractive new revenue horizons for us. That's fantastic. John, Laura, thank you again for giving attendees the opportunity to have the update today and submit those questions both live and pre meeting.

54:58 Can I ask attendees not to close the session? It should be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. It'll only take a few moments to complete and will be greatly appreciated and valued by the company. On behalf of the management team of ITACONIX PLC, I'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good afternoon. Thank you, everybody. Thank you.