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Hempalta Corp. (TSXV: HEMP) ("Hempalta" or the "Company") today confirmed ongoing execution of its business strategy and responded to recent trading activity.
Business Strategy Update
Hempalta Corp. (TSXV:HEMP) processes industrial hemp at scale to produce a range of consumer and commercial products using its proprietary processing technology, HempTrain, which converts industrial hemp into high-volume, high-grade products.
Hempalta's products include animal bedding, garden mulch and construction products such as hempcrete - a biocomposite material for construction and insulation made of hemp hurds and lime. Industrial hemp is highly versatile and can be grown in different climates and soil conditions.
HEMPALTA owns 50.1 percent of HCS, which uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately. The strategic investment in HCS - and through partnerships with industrial hemp farmers - positions HEMPALTA to become a leading carbon credit generator. The sale of these hemp-derived carbon credits offers a new revenue stream for HEMPALTA, in addition to its B2C and B2B hemp products. The carbon credit market is currently the largest opportunity for HEMPALTA. The global voluntary carbon market is projected to reach $2.68 trillion by 2028 at a CAGR of 18.23 percent. HEMPALTA anticipates realizing the first full cycle of carbon credit revenue by the first quarter of 2025.
Company Highlights
- HEMPALTA is an agricultural technology company processing industrial hemp at scale. Industrial hemp is known for its sustainability, given its ability to absorb carbon dioxide (CO2) twice as efficiently as forests.
- HEMPALTA employs a proprietary processing technology called HempTrain™ to process industrial hemp to produce a range of high-value, environmentally friendly consumer and commercial products. These include biocomposite building materials, food preservation pads, pet litter, animal bedding and gardening products.
- The company’s consumer products are currently sold and distributed in over 150 stores and through e-commerce platforms in Canada and the U.S., with the goal of reaching more than 1,500 retail channels.
- In addition to industrial hemp products, HEMPALTA also offers carbon credits. The global voluntary carbon market is projected to reach $2.68 trillion by 2028, presenting a large opportunity for the company.
- The company owns a controlling interest (50.1 percent) of Hemp Carbon Standard (HCS), which is driving HEMPALTA’s venture into the carbon credits market. HCS uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately.
- The industrial hemp industry is projected to experience growth as consumers and companies seek environmental and sustainable products. The global industrial hemp market is expected to reach $16.75 billion by 2030.
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Hempalta
Overview
Hempalta Corp. (TSXV:HEMP) is engaged in processing industrial hemp at scale to produce a range of consumer and commercial products. Its proprietary processing technology, HempTrain, is capable of converting industrial hemp into high-volume, high-grade products. The company’s product range includes animal bedding, garden mulch and construction products such as hempcrete - a biocomposite material for construction and insulation made of hemp hurds and lime. Industrial hemp is highly versatile and can be grown in a variety of climates and soil conditions.
Perhaps the most important characteristic of industrial hemp is its ability to capture carbon dioxide in the atmosphere. One hectare of a hemp crop can absorb 10 to 22 tons of CO2 and is believed to be more efficient at carbon sequestration than forests. HEMPALTA is leveraging this hemp attribute as a new revenue stream and an opportunity to participate in the fast-growing carbon market, enabled by its acquisition of a controlling interest in UK-based Hemp Carbon Standard (HCS).
HEMPALTA owns 50.1 percent of HCS, which uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately. The strategic investment in HCS - and through partnerships with industrial hemp farmers - positions HEMPALTA to become a leading carbon credit generator. The sale of these hemp-derived carbon credits offers a new revenue stream for HEMPALTA, in addition to its B2C and B2B hemp products. The carbon credit market is currently the largest opportunity for HEMPALTA. The global voluntary carbon market is projected to reach $2.68 trillion by 2028 at a CAGR of 18.23 percent. HEMPALTA anticipates realizing the first full cycle of carbon credit revenue by the first quarter of 2025.
The other key revenue stream for the company is from the sale of hemp products. Here again, the opportunity is large, with the global industrial hemp market projected to reach $16.75 billion by 2030. The company plans to introduce new products and expand its existing capacity to capitalize on this growing opportunity. Its plant expansion initiatives are focused on boosting capacity to effectively meet the increasing market demand. The change in the US Residential Building Code, approving the use of hemp-lime (Hempcrete), is a major tailwind. Hempcrete can now be used in one and two-family dwellings and townhouses in 49 of 50 US states. The company intends to focus on this product in its near-term strategy.
The company is led by seasoned and tested industry veterans with significant experience scaling businesses. The CEO, Darren Bondar, has a proven track record of scaling businesses and exiting them. He founded and built Canada’s largest recreational cannabis store network, Spiritleaf, and sold it for $131 million.
Company Highlights
- HEMPALTA is an agricultural technology company processing industrial hemp at scale. Industrial hemp is known for its sustainability, given its ability to absorb carbon dioxide (CO2) twice as efficiently as forests.
- HEMPALTA employs a proprietary processing technology called HempTrain™ to process industrial hemp to produce a range of high-value, environmentally friendly consumer and commercial products. These include biocomposite building materials, food preservation pads, pet litter, animal bedding and gardening products.
- The company’s consumer products are currently sold and distributed in over 150 stores and through e-commerce platforms in Canada and the U.S., with the goal of reaching more than 1,500 retail channels.
- In addition to industrial hemp products, HEMPALTA also offers carbon credits. The global voluntary carbon market is projected to reach $2.68 trillion by 2028, presenting a large opportunity for the company.
- The company owns a controlling interest (50.1 percent) of Hemp Carbon Standard (HCS), which is driving HEMPALTA’s venture into the carbon credits market. HCS uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately.
- The industrial hemp industry is projected to experience growth as consumers and companies seek environmental and sustainable products. The global industrial hemp market is expected to reach $16.75 billion by 2030.
Key Segments
Carbon Credits
HEMPALTA is providing carbon credit solutions utilizing the carbon-negative nature of industrial hemp agriculture. The company partners with farmers to grow industrial hemp, which can absorb between 10 to 22 tons of CO2 per hectare. The ability of industrial hemp to absorb CO2 allows for the creation and sale of carbon credits on the voluntary market. Carbon credits can be purchased by companies looking to offset their emissions. This creates a revenue stream for HEMPALTA.
Once the farmers harvest hemp, the amount of CO2 absorbed by the crop is measured and verified using HCS’s technology. This step is crucial to accurately quantifying the carbon sequestration and determining the corresponding carbon credits.
HEMPALTA owns a controlling interest (50.1 percent) in HCS, which is a major advantage as it allows HEMPALTA to measure, report and verify the carbon credits. HCS is the only company in the world that can scientifically quantify and measure CO2 removal for hemp. HCS’s technology allows accurate measurement of CO2 sequestration in the biomass of the industrial hemp and related soil. HCS’s reporting ensures transparency and accuracy, thereby providing a solid basis for corporate buyers to make carbon credit purchases. The company estimates its partnership with HCS could result in over 1 million acres being measured, reported and verified for the creation of carbon credits that can be sold on the voluntary carbon credit market.
Industrial Hemp Products
HEMPALTA uses state-of-the-art processing technology, called the HempTrain, to produce a range of high-value, environmentally friendly consumer and commercial products using industrial hemp. These include biocomposite building materials, food preservation pads, pet litter, animal bedding and gardening products. These products are currently sold and distributed via offline and online channels. The products are present in more than 150 retail stores in Canada and the US, along with major e-commerce platforms. The goal is to reach over 1,500 retail channels.
Management Team
Darren Bondar – President and CEO
Darren Bondar previously founded and served as president and CEO of Inner Spirit Holdings, the first cannabis retail company listed on the Canadian Securities Exchange. Under his leadership, Inner Spirit expanded significantly until its acquisition by Sundial Growers in July 2021. Prior to that, he was the president and CEO of Watch It! and Comfortable Image, consumer retail and franchising businesses. Bondar holds a Master of Business Administration degree from the University of Alberta and a Bachelor of Arts degree from Western University. He has completed the financing, governance and compliance for public companies course at Simon Fraser University.
Candace Ryan – Chief Financial Officer
Candace Ryan brings over 15 years of experience in accounting, payroll, human resources, financial planning, and financial reporting and analysis. Previously, she served as financial controller for Spiritleaf, a subsidiary of Inner Spirit Holdings, listed on the Canadian Securities Exchange.
Adrian Stokes – Director
Adrian Stokes has over two decades of experience in financial services. He currently leads ADL Private Office in Monaco, a private family office for the majority partner of Fullbrook Thorpe Investments LLP. Previously, he held various roles at Barclays Wealth & Investment Management. He holds a double major in business from Greenwich Business School in London.
Craig Steinberg – Director
Craig Steinberg has been a director of HEMPALTA since August 2021. He is a practicing lawyer with Steinberg Law and is the designated mortgage broker for Fortius Mortgage Corporation. From August 2017 until July 2021, Steinberg served as a director of Inner Spirit Holdings which was listed on the Canadian Securities Exchange.
Dan Balaban – Director
Dan Balaban is the executive chair and CEO of Greengate Power Corporation, a Canadian renewable energy company. Before joining Greengate, Balaban co-founded and served as president and CEO of Roughneck.ca, which provides software solutions for the oil and gas industry. Earlier in his career, he worked as a management consultant at top-tier firms, including EY and PwC.
Liam Russell Wilson – Director
Liam Russell Wilson is the vice-president of business development with Prairie Merchant Corporation, a private investment company that focuses on real estate, energy, agriculture and sports franchises. He sits on the board of Indiva and continues to actively manage a portfolio of cannabis-related investments. Wilson holds a Master of Business degree from Queensland University of Technology.
Michael Ginevsky - Corporate Secretary
Michael Ginevsrky is a partner at DS Lawyers Canada LLP, where he focuses primarily on capital markets, mergers and acquisitions, corporate governance, and securities regulatory compliance. Ginevsky received a Bachelor of Commerce degree from the University of British Columbia and Juris Doctor from the University of Alberta. He was previously corporate secretary of Inner Spirit Holdings, a cannabis retailer listed on the CSE.
Hempalta Corp. Confirms Business Strategy Execution and Responds to Increased Stock Trading Volume
Further to previous announcements by the Company, Hempalta continues to execute on its business strategy, driving growth through new revenue streams and expanding its product portfolio. The Company's existing hemp-based products include animal bedding, pet litter, garden mulch, and hurd for hempcrete, and it has recently added biochar for sale in its consumer package division and to commercial buyers.
With a focus on industrial hemp, the Company also owns a controlling interest in Hemp Carbon Standard Inc. ("HCS"), a platform for carbon removal credits in the hemp industry. The platform enables participation in the growing voluntary carbon credit marketplace and further diversifies Hempalta's revenue streams. For 2024, HCS has increased the number of acreages under management in its regenerative agriculture program by 337% compared with 2023, managing 13,556 acres across seven countries.
Increased Trading Volume
Hempalta has observed a significant increase in the volume of Hempalta stock traded over the preceding two-week period. The Company confirms that no material operational or corporate developments have occurred to substantiate this increased trading activity which appears to have commenced on September 19, 2024.
However, the Company wishes to announce that it was advised by Climafi Limited ("Climafi") and certain of its shareholders of their intention to sell certain of their Hempalta shares starting on that date. In May 2024, in exchange for the acquisition by Hempalta of its 50.1% controlling interest in HCS, Climafi and certain of its shareholders received 12.5 million common shares of the Company which were subject to a statutory hold period that expired in early September 2024, thus allowing those parties to freely sell their Hempalta shares.
About Hempalta
Hempalta Corp. (TSXV:HEMP) is a publicly traded agricultural technology company listed on the TSX Venture Exchange, focused on harnessing the immense potential of hemp.
Hempalta utilizes advanced agricultural technology to process industrial hemp at scale. Products are made from hemp grown sustainably in Alberta and processed using a state-of-the-art processing plant at its production facility in Calgary, Alberta. The Company is also participating in the global hemp carbon credit industry through its controlling interest in Hemp Carbon Standard Inc.
The Company is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods, and retail sales experience. Hempalta has been named a Top 10 Startup by Platform Calgary's Launch Party and recognized as one of the 50 most investable clean technology companies by Foresight Canada. Learn more at www.hempalta.com.
HEMP TO BETTER THE PLANET™
Darren Bondar
Chief Executive Officer
Hempalta Corp.
1560 Hastings Crescent SE, Calgary, T2G 4E1
Web: https://www.hempalta.com/
Email: info@hempalta.com
Sales or partner opportunities:
Cecil Horwitz, Business Development
Cecil.horwitz@hempalta.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Information
This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "will", "expected", "plans", "enable" and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements regarding: the HCS platform enabling participation in the growing voluntary carbon credit marketplace ("VCM"); and the HCS platform further diversifying Hempalta's revenue streams. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors and assumptions with respect to: the ability of the Company to successfully implement its strategic plans and initiatives and the expected benefits therefrom; the ability of farms and sites currently signed up by HCS to grow hemp; and the ability of HCS to sell carbon removal credits through the VCM. Although the Company believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Actual results may vary from those currently anticipated due to a number of factors and risks including, but not limited to: risks associated with general economic conditions; conditions in the carbon credit markets; adverse industry events; the risk that farms and sites currently signed up by HCS will not grow or be able to grow industrial hemp as anticipated or at all; the risk that HCS may not be able to sell carbon removal credits as anticipated or at all; adverse weather conditions affecting the growth of hemp; future legislative, tax and regulatory developments; and the ability of management to execute its business strategy, objectives and plans. The forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise, except as required by applicable law.
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/225945
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Hempalta Corp. Announces Financial Results for Three Months and Nine Months Ended June 30, 2024
AgTech Company shares its second quarter of financial reporting and details advances with Industrial Hemp Carbon Credits platform and Biochar product
Hempalta Corp. (formerly Trail Blazing Ventures Ltd.) (TSXV: HEMP) ("Hempalta" or the "Company") has released its financial results for the three and nine months ended June 30, 2024. Hempalta's unaudited interim condensed consolidated financial statements (the "Financial Statements") and related management's discussion and analysis (the "MD&A") for the three and nine months ended June 30, 2024 are available on www.sedarplus.ca.
Financial Results
- Revenue for the three months ended June 30, 2024 was $185,021, a 32% increase compared to the same period in 2023. Revenue for the nine months ended June 30, 2024 was $436,328, a 28% increase compared to the same period in the prior fiscal year. The increases are due to the Company increasing production of its hemp-based commercial and consumer products and expanding its distribution channels.
- Cost of sales for the three months ended June 30, 2024 was $220,916, a 56% increase compared to the same period in 2023. Cost of sales for the nine months ended June 30, 2024 was $497,587, a 48% increase compared to the same period in the prior fiscal year. Contributing factors to the increased cost of sales were the costs associated with scaling up operations to handle the increased sales, including increases in the cost of freight to retailers, production supply costs, and maintenance and repair costs.
- Net loss for the three months ended June 30, 2024 was $858,647 or $0.01 per share, a 182% increase compared to the same period in 2023. Net loss for the nine months ended June 30, 2024 was $2,008,330 or $0.02 per share, a 70% increase compared to the same period in the prior fiscal year. The increases are primarily based on higher general and administration costs due to the going public process, acquisition of a controlling interest in Hemp Carbon Standard Inc. ("HCS"), and higher labour costs due to employee additions. For the three months ended June 30, 2024, there was also increased share-based compensation increasing the net loss.
- Net general and administrative expenses increased 222% and 95% for the three and nine months ended June 30, 2024 compared to the same periods in the prior fiscal year. The increases are primarily due to higher filing and listing fees and accounting and legal costs related to the going public process, acquisition of a controlling interest in HCS, higher labour costs due to employee additions, and increased share-based compensation.
- At June 30, 2024, the Company had cash of $1,712,587 and working capital of $1,927,064.
Acquisition of Hemp Carbon Credits Platform
In May 2024, the Company acquired a controlling interest of 50.1% in HCS (the "HCS Transaction"). The transaction marked a significant milestone in Hempalta's focus on sustainable business practices and is expected to provide the Company with an additional revenue stream alongside its consumer packaged goods and commercial products divisions.
HCS operates a financial incentive program that rewards industrial hemp farmers on their sustainable carbon farming journey. HCS's work is rooted in their mission to create a positive climate impact for future generations, while continuing to support the processing of industrial hemp into a wide array of products.
Progress with Industrial Hemp Carbon Credits
The demand for carbon credits is increasing as companies seek to reduce their carbon footprint and mitigate climate change. Industrial hemp possesses the capacity to absorb substantial amounts of carbon dioxide ("CO2") during its rapid growth cycle. HCS has been a pioneer in the generation of carbon credits derived from the industrial hemp crop life cycle.
HCS's precision quantification methodology leverages cutting-edge remote sensing technology, ensuring the accurate measurement of CO2 removal within the biomass of the industrial hemp crop and associated topsoil. This approach guarantees transparency and integrity in carbon accounting and helps corporate buyers of HCS carbon credits to achieve their sustainability goals. By participating in the Voluntary Carbon Market, industrial hemp farmers can diversify their revenue streams and make meaningful contributions to climate change mitigation.
For 2024, HCS continues to enhance its industrial hemp carbon credit platform. To this point, HCS has achieved a 337% increase in total acres under management over 2023, which is the year the platform was established. For 2024, HCS has signed up 36 farms, 184 sites, and 13,556 acres in Canada, the United States, the United Kingdom, Ukraine, Spain, Portugal, and Australia. This is expected to result in the removal of over 50,000 tonnes of CO2 from the atmosphere, creating an equal amount of high-integrity, nature-based carbon removal credits which HCS plans to sell through the Voluntary Credit Market.
Introduction of Biochar
Hempalta has been working to actively develop new hemp-based products to complement its current products retailing in the market with the goal of creating additional revenue streams. Current products include animal bedding, pet litter, garden mulch, and hurd for hempcrete, which is a sustainable building material.
The Company has recently introduced biochar derived from industrial hemp to the market. Made by recycling industrial hemp biomass processed at a production facility or onsite at farmers' fields, biochar is produced through a process called pyrolysis, which heats organic material at high temperatures at extremely low oxygen levels. This method traps carbon and creates a product that can be spread on agricultural fields, boosting soil organic carbon and supporting plant growth while continuing to sequester carbon and helping to generate high-value carbon credits.
Biochar presents an exciting opportunity for Hempalta and for farmers, allowing hemp and other plant and farm waste to be converted into a sustainable and valuable commodity that can generate revenue through carbon credits, which for high-quality biochar typically sell for between US$100 and US$200 per ton of CO2 sequestered.
Outlook
Darren Bondar, Hempalta's President and Chief Executive Officer, said, "We continue to advance our business objectives by adding new revenue-generating streams related to industrial hemp and expanding our production capabilities. We've added a global hemp carbon credit platform that enables us to seek out new markets worldwide and participate in the growing carbon credit marketplace. We're also diversifying to meet market demand and unlock new industrial hemp-based products such as biochar."
Investor Updates
The Company will be presenting at the New York Venture Summit in New York City on September 4 and 5, 2024 and at the ArcStone-Kingswood Growth Summit in Toronto on September 26, 2024. Investors can stay updated on Hempalta's investor announcements by subscribing to our mailing list. Click here to subscribe and join our community as we advance towards a greener future.
About Hempalta
Hempalta Corp. (TSXV: HEMP) is an agricultural technology company focused on harnessing the immense potential of hemp. The Company is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale. Hempalta is the first company in Canada to introduce the creation and sale of hemp carbon removal credits in the Voluntary Carbon Market and offer corporate buyers the opportunity to secure such credits through its controlling interest in Hemp Carbon Standard Inc. Hempalta's products are made from hemp grown sustainably in Alberta and processed using a state-of-the-art processing plant at its production facility in Calgary, Alberta. The Company is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods, and retail sales experience. Hempalta has been named a Top 10 Startup by Platform Calgary's Launch Party and recognized as one of the 50 most investable clean technology companies by Foresight Canada. Learn more at www.hempalta.com.
HEMP TO BETTER THE PLANET.™
For more information please contact:
| Hempalta Corp. Darren Bondar President and Chief Executive Officer Email: info@hempalta.com |
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Information
This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "will", "expected", "plans", "enable" and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements regarding: the HCS Transaction being expected to provide the Company with an additional revenue stream; the Company's anticipated benefits from the HCS Transaction; the demand for carbon credits increasing; industrial hemp farmers being able to diversify their revenue streams by participating in the Voluntary Carbon Market; the expected removal of over 50,000 tonnes of CO2 from the atmosphere resulting from the farms and sites signed up by HCS, the creation of an equal amount of high-integrity, nature-based carbon removal credits, and the plans of HCS to sell such carbon removal credits through the Voluntary Credit Market; the Company working to actively develop new hemp-based products with the goal of creating additional revenue streams; biochar presenting an opportunity for the Company; and the Company adding a global hemp carbon credit platform that enables it to seek out new markets worldwide and participate in the growing carbon credit market place. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors and assumptions with respect to: the ability of the Company to successfully implement its strategic plans and initiatives and the expected benefits therefrom; the anticipated benefits of the HCS Transaction; the ability of farms and sites currently signed up by HCS to grow hemp; and the ability of HCS to sell carbon removal credits through the Voluntary Credit Market. Although the Company believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Actual results may vary from those currently anticipated due to a number of factors and risks including, but not limited to: the risk that the benefits from the HCS Transaction will not be as anticipated; risks associated with general economic conditions; conditions in the carbon credit markets; adverse industry events; the risk that farms and sites currently signed up by HCS will not grow or be able to grow industrial hemp as anticipated or at all; the risk that HCS may not be able to sell carbon removal credits as anticipated or at all; adverse weather conditions affecting the growth of hemp; future legislative, tax and regulatory developments; and the ability of management to execute its business strategy, objectives and plans. The forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise, except as required by applicable law.
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/220813
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HEMPALTA Introduces Biochar Derived from Industrial Hemp, Further Establishes Hemp Carbon Sequestration Activity, and Grants Stock Options
Newly public AgTech Company continues to push forward with modernization and diversification of the industrial hemp market
Hempalta Corp. (TSXV: HEMP) ("Hempalta" or the "Company"), an agricultural technology company focused on harnessing the immense potential of hemp, today announced a new biochar product derived from industrial hemp and shared a number of corporate updates, including a name change for its processing division, expansion of those operations, and the granting of stock options.
"We're constantly working to find new ways to use industrial hemp to develop products including our new biochar product which the market wants, and which benefits the environment. We've also been successfully broadening our business focus by developing a global platform that can leverage the high carbon sequestration aspect of industrial hemp to assist hemp farmers in monetizing carbon removal credits on the voluntary carbon market," said Darren Bondar, Hempalta's President and CEO.
New Biochar Product
Hempalta has been working to actively develop new hemp-based products to complement its current products retailing in the market with the goal of creating additional revenue streams. Current products include animal bedding, pet litter, garden mulch, and hurd for hempcrete, which is a sustainable building material.
The Company is introducing biochar derived from industrial hemp to the market. Made by recycling industrial hemp biomass processed at the Company's production facility in Calgary or onsite at farmers' fields, biochar is produced through a process called pyrolysis, which heats organic material at high temperatures at extremely low oxygen levels. This method traps carbon and creates a product that can be spread on agricultural fields, boosting soil organic carbon and supporting plant growth while continuing to sequester carbon and helping to generate high-value carbon credits.
Biochar presents an exciting opportunity for the Company and for farmers, allowing hemp and other plant and farm waste to be converted into a sustainable and valuable commodity that can generate revenue through carbon credits, which for high-quality biochar typically sell for US$200 per ton of CO2 sequestered.
Carbon Removal Credits Update
In May 2024, the Company acquired its 50.1% controlling interest in Hemp Carbon Standard Inc. ("HCS"), the world's leading carbon removal program for industrial hemp farming.
HCS has begun making progress in the sale of carbon removal credits to corporate clients and other buyers. This includes a recent agreement for the sale of 514 carbon removal units to Concordium, a Layer 1 blockchain with built-in ID verification.
HCS employs advanced methodologies and monitoring technologies to ensure precise carbon sequestration for industrial hemp, which not only removes CO2 from the atmosphere but also enhances soil health and supports regenerative agriculture. The approach helps guarantee transparency and integrity in carbon accounting and enables corporate buyers of HCS carbon credits to achieve their sustainability goals. By participating in the Voluntary Carbon Market (the "VCM"), industrial hemp farmers can diversify their revenue streams and make meaningful contributions to climate change mitigation.
To date in 2024, HCS has signed up 36 farms, over 184 sites, and 5,486 hectares (13,555 acres) in Canada, the United States, Ukraine, the United Kingdom, Spain, Portugal, and Australia - which is forecast to result in the removal of approximately 54,000 tonnes of CO2 from the atmosphere, creating an equal amount of high-integrity, nature-based carbon removal credits which the Company plans to sell through the VCM.
Name and Expansion of Processing Operations
The Company announced its subsidiary, Hempalta Inc., has changed its name to Hempalta Processing Inc. The new name better reflects the subsidiary's core business activity which is the processing of industrial hemp into consumer and commercial products at the Calgary production facility.
The Company also announced that expansion of the production facility by approximately 6,500 square feet is underway with preliminary required approvals achieved. The expansion will enable Hempalta Processing Inc. to increase processing capacity to meet the growing demand for hemp-based products.
Stock Option Grant
Hempalta has granted 1,825,000 stock options to its directors, officers, and employees pursuant to the Company's stock option plan. Each stock option is exercisable to purchase one common share in the capital of the Company at $0.17 per share until June 24, 2029. One-quarter of the stock options vested on the date of grant, one-quarter will vest one year following the date of grant, one-quarter will vest two years following the date of grant, and one-quarter will vest three years following the date of grant.
Outlook
"We're very pleased to be launching the biochar product derived from industrial hemp. It complements our existing suite of products, which includes animal bedding, pet litter, garden mulch, and hurd for hempcrete. Biochar offers environmental benefits by sequestering carbon and improving soil health. Additionally, we're positioned to play a unique role in the growing carbon credit marketplace with our suite of nature-based solutions, helping farmers and corporate clients achieve their sustainability goals," said Bondar. Hempalta's next quarterly financial results are due to be released in late August 2024.
Investor Updates
Stay updated on Hempalta's ongoing developments and investor announcements by subscribing to our mailing list. Click here to subscribe and join our community as we advance towards a greener future.
About Hempalta
Hempalta Corp. (TSXV: HEMP) is an agricultural technology company focused on harnessing the immense potential of hemp. The Company is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale. Hempalta is the first company in Canada to introduce the creation and sale of hemp carbon removal credits in the Voluntary Carbon Market and offer corporate buyers the opportunity to secure such credits through its controlling interest in Hemp Carbon Standard Inc. Hempalta's products are made from hemp grown sustainably in Alberta and processed using a state-of-the-art processing plant at its production facility in Calgary, Alberta. The Company is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods, and retail sales experience. Hempalta has been named a Top 10 Startup by Platform Calgary's Launch Party and recognized as one of the 50 most investable clean technology companies by Foresight Canada. Learn more at www.hempalta.com.
HEMP TO BETTER THE PLANET.™
For more information please contact:
Hempalta Corp.
Darren Bondar
President and CEO
Email: info@hempalta.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Information
This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "will", "anticipated", "plans", "forecasted" and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements regarding: the expansion of the production facility enabling Hempalta Processing Inc. to increase processing capacity to meet the growing demand for hemp-based products; the forecasted removal of over 54,000 tonnes of CO2 from the atmosphere by the farms and sites signed up by HCS so far; and the creation of an equal amount of high-integrity, nature-based carbon removal credits, and the plans of the Company to sell such carbon removal credits through the VCM. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors and assumptions with respect to: the ability of the Company to successfully implement its strategic plans and initiatives and the expected benefits therefrom; the anticipated benefits derived from the Company's controlling interest in HCS; the ability of farms and sites currently signed up by HCS to grow hemp; the ability of the Company to successfully complete the expansion of the production facility; and the ability of the Company to sell carbon removal credits through the VCM. Although the Company believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Actual results may vary from those currently anticipated due to a number of factors and risks including, but not limited to: the risk that the expansion of the production facility will not be completed; risks associated with general economic conditions; conditions in the carbon credit markets; adverse industry events; the risk that farms and sites currently signed up by HCS will not grow or be able to grow industrial hemp as anticipated or at all; the risk that the Company may not be able to sell carbon removal credits as anticipated or at all; adverse weather conditions affecting the growth of hemp; future legislative, tax and regulatory developments; and the ability of management to execute its business strategy, objectives and plans. The forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise, except as required by applicable law.
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Hempalta Corp. Announces Financial Results for Three Months and Six Months Ended March 31, 2024
Newly public AgTech Company shares initial financial reporting and details acquisition of controlling interest in global Industrial Hemp Carbon Credits platform
Hempalta Corp. (TSXV: HEMP) (formerly Trail Blazing Ventures Ltd.) ("Hempalta" or the "Company") has released its financial results for the three and six months ended March 31, 2024. Hempalta's unaudited interim condensed consolidated financial statements (the "Financial Statements") and related management's discussion and analysis (the "MD&A") for the three and six months ended March 31, 2024 are available on www.sedarplus.ca.
Qualifying Transaction
On March 19, 2024, the Company completed the acquisition of all of the issued and outstanding securities of Hempalta Inc. (the "Transaction"). The Transaction constituted the Company's "Qualifying Transaction" (as defined by Policy 2.4 - Capital Pool Companies of the TSX Venture Exchange) and was completed according to the terms of an amalgamation agreement dated November 15, 2023, pursuant to which, among other things, the Company acquired all of the issued and outstanding securities of Hempalta Inc. by way of a three-cornered amalgamation with a wholly owned subsidiary of the Company under the Business Corporations Act (Alberta). Prior to the completion of the Transaction, the Company: (i) completed a consolidation on the basis of one (1) post-consolidation common share of the Company for every 1.7 pre-consolidation common share of the Company; and (ii) changed its name from "Trail Blazing Ventures Ltd." to "Hempalta Corp.".
Accordingly, the current period and comparative figures in the Financial Statements and MD&A are reflective of Hempalta Corp.'s operating activities, and should be read in conjunction with the audited financial statements for the years ended September 30, 2023 and 2022 for each of the Company (under its previous name, Trail Blazing Ventures Ltd.) and Hempalta Inc., which can be found on www.sedarplus.ca
Quarterly Financial Results
The Financial Statements and MD&A represent the initial financial reporting shared for Hempalta Corp.
- Revenue for the three months ended March 31, 2024 was $131,486, a 30% increase compared to the same period in 2023. Revenues for the six months ended March 31, 2024 was $251,307, a 26% increase compared to the same period in 2023. There increases are due to the Company expanding production of hemp-based commercial and consumer products and expanding its distribution channels.
- Cost of sales for the three months ended March 31, 2024 was $141,424, a 22% increase compared to the same period in 2023. Cost of sales for the six months ended March 31, 2024 was $276,671, a 42% increase compared to the same period in 2023. Contributing factors to the increased cost of sales were raw material costs, labour costs, cost of freight for goods to retailers, production supplies, and higher maintenance and repair costs.
- Net loss for the three months ended March 31, 2024 was $512,461 or $0.01 per share, a 5% increase compared to the same period in 2023. Net loss for the six months ended March 31, 2024 was $1,009,410 or $0.02 per share, a 15% increase compared to the same period in 2023. These increases are primarily based on higher general and administration costs due to the going public process and higher labour costs due to employee additions.
- Net general and administrative expenses increased 20% and 19% for the three and six months ended March 31, 2024 compared to the same periods in 2023. These increases are primarily due to higher filing and listing fees and accounting and legal costs related to the Transaction as well as higher labour costs due to employee additions.
- At March 31, 2024, the Company had cash of $2,694,707 and working capital of $2,712,780.
Recent Acquisition of Hemp Carbon Credits Platform
On October 15, 2023, Hempalta Inc. entered into a strategic alliance agreement (the "Strategic Alliance Agreement") with Climafi Limited ("Climafi") and Hemp Carbon Standard Inc. ("HCS"), which has developed proprietary methodologies to monitor, report, and verify carbon credits derived from growing and processing industrial hemp. Hempalta Inc. was granted an exclusive ten-year license to commercialize the assets, methodology, and technology owned by HCS, including intellectual property in Alberta and Saskatchewan.
On May 1, 2024, further to the Strategic Alliance Agreement, the Company acquired a controlling interest of 50.1% in HCS (the "HCS Transaction"). The HCS Transaction was completed by way of a share purchase agreement dated April 15, 2024 among HCS, Climafi, and the Company. Pursuant to the HCS Transaction, Climafi received: (i) a one-time cash payment of $40,000; and (ii) an aggregate of 12,500,000 common shares of the Company ("Shares"), issued to Climafi and its shareholders at a deemed price of $0.16 per Share.
The completion of the HCS Transaction marks a significant milestone in Hempalta's focus on sustainable business practices and is expected to provide the Company with an additional revenue stream to its consumer packaged goods and commercial products divisions.
HCS operates a financial incentive program that rewards industrial hemp farmers on their sustainable carbon farming journey. HCS's work is rooted in their mission to create a positive climate impact for future generations, while continuing to provide the benefits of the added value that comes from processing hemp into a wide array of products.
Industrial Hemp Carbon Credits
As companies seek to reduce their carbon footprint and mitigate climate change, the demand for carbon credits is increasing. Industrial hemp possesses the capacity to absorb substantial amounts of carbon dioxide ("CO2") during its rapid growth cycle. HCS has pioneered the generation of carbon credits derived from the industrial hemp crop life cycle.
HCS's precision quantification methodology leverages cutting-edge remote sensing technology, ensuring the accurate measurement of CO2 removal within the biomass of the industrial hemp crop and associated topsoil. This approach guarantees transparency and integrity in carbon accounting and helps corporate buyers of HCS carbon credits to achieve their sustainability goals. By participating in the Voluntary Carbon Market (the "VCM"), industrial hemp farmers can diversify their revenue streams and make meaningful contributions to climate change mitigation.
HCS was established in 2023 and began monitoring 15 farms, 45 sites, and 1,380 hectares (3,410 acres) in Canada, the United States, Ukraine, and Spain, which resulted in the sequestering and removing of 12,354 tonnes of CO2 from the atmosphere and creating an equal amount of high-integrity, nature-based carbon removal credits.
For 2024, HCS has signed up 30 farms so far, over 100 sites, and 4,569 hectares (11,290 acres) in Canada, the United States, Ukraine, the United Kingdom, Spain, and Portugal, which is forecast to result in the removal of over 45,000 tonnes of CO2 from the atmosphere, creating an equal amount of high-integrity, nature-based carbon removal credits which the Company plans to sell through the VCM.
Outlook
Darren Bondar, Hempalta's President and Chief Executive Officer, said, "Our mission at Hempalta is to be at the forefront of the next evolution in agriculture by harnessing the immense potential of industrial hemp. We've been doing this by utilizing advanced agricultural technology to process hemp at scale to produce a range of hemp-based commercial and consumer products. We've now added a global hemp carbon credit platform that will enable us to seek out new markets worldwide and participate in the growing carbon credit marketplace. We look forward to investors supporting our growth strategy and participating in our publicly traded enterprise."
Investor Updates
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About Hempalta
Hempalta Corp. (TSXV: HEMP) is an agricultural technology company focused on harnessing the immense potential of hemp. The Company is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale. Hempalta is the first company in Canada to introduce the creation and sale of hemp carbon removal credits in the Voluntary Carbon Market and offer corporate buyers the opportunity to secure such credits through its controlling interest in Hemp Carbon Standard Inc. Hempalta's products are made from hemp grown sustainably in Alberta and processed using a state-of-the-art processing plant at its production facility in Calgary, Alberta. The Company is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods, and retail sales experience. Hempalta has been named a Top 10 Startup by Platform Calgary's Launch Party and recognized as one of the 50 most investable clean technology companies by Foresight Canada. Learn more at www.hempalta.com.
HEMP TO BETTER THE PLANET.™
For more information please contact:
Hempalta Corp.
Darren Bondar
President and Chief Executive Officer
Email: info@hempalta.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Information
This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "will", "anticipated", "plans", "forecasted" and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements regarding: the completion of the HCS Transaction being expected to provide the Company with an additional revenue stream to its consumer packaged goods and commercial products divisions; the Company's anticipated benefits from the HCS Transaction; the ability of the Company to monetize carbon credits with HCS; the demand for carbon credits increasing; and the forecasted removal of over 45,000 tonnes of CO2 from the atmosphere resulting from the farms and sites signed up by HCS so far, the creation of an equal amount of high-integrity, nature-based carbon removal credits, and the plans of the Company to sell such carbon removal credits through the VCM. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors and assumptions with respect to: the ability of the Company to successfully implement its strategic plans and initiatives and the expected benefits therefrom; the anticipated benefits of the HCS Transaction; the ability of farms and sites currently signed up by HCS to grow hemp; and the ability of the Company to sell carbon removal credits through the VCM. Although the Company believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom. Actual results may vary from those currently anticipated due to a number of factors and risks including, but not limited to: the risk that the benefits from the HCS Transaction will not be as anticipated; risks associated with general economic conditions; conditions in the carbon credit markets; adverse industry events; the risk that farms and sites currently signed up by HCS will not grow or be able to grow industrial hemp as anticipated or at all; the risk that the Company may not be able to sell carbon removal credits as anticipated or at all; adverse weather conditions affecting the growth of hemp; future legislative, tax and regulatory developments; and the ability of management to execute its business strategy, objectives and plans. The forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise, except as required by applicable law.
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HEMPALTA Acquires Controlling Interest in Hemp Carbon Standard to Offer Hemp Carbon Credits to Global Markets
Adding Industrial Hemp Carbon Credits gives Hempalta a sustainable, revenue-generating platform to help customers worldwide decrease their footprint and reduce greenhouse gas emissions
Hempalta Corp. (TSXV: HEMP) (formerly Trail Blazing Ventures Ltd.) ("Hempalta" or the "Company") is pleased to announce that further to the press release dated April 15, 2024, the Company has completed its acquisition for the controlling interest of 50.1% of Hemp Carbon Standard Inc. ("HCS") (the "Transaction"). The Transaction was completed by way of share purchase agreement among HCS, Climafi Limited ("Climafi"), and the Company (the "SPA").
Pursuant to the terms of the SPA, Climafi received: (i) a one-time cash payment of $40,000; and (ii) an aggregate of 12,500,000 common shares of Hempalta ("Shares"), issued at a deemed price of $0.16 per Share. No finders' fees were paid in connection with the Transaction. In connection with the closing of the Transaction the Shares will be issued to Climafi and its shareholders.
The completion of the Transaction marks a significant milestone in Hempalta's focus on sustainable business practices and provides the Company with an additional revenue stream to its consumer packaged goods and commercial products divisions.
"The acquisition of a controlling interest in the world's leading carbon platform for industrial hemp farming is a key element to our growth strategy," said Darren Bondar, Hempalta's President and CEO. "By promoting industrial hemp cultivation and offering reliable, quantifiable carbon credits on a global basis, we are taking significant steps toward combating climate change and fostering a more sustainable future. The acquisition means we can deepen our collaboration with farmers worldwide, adopt an established and highly scalable platform, and share the financial benefits of the credits to create value for all parties involved."
Industrial hemp possesses the unique capacity to absorb substantial amounts of carbon dioxide ("CO2") during its rapid growth cycle. HCS has been an early pioneer in generating carbon credits derived from the industrial hemp crop's life cycle.
"HCS has been a leader in generating carbon credits derived from industrial hemp. We believe today's announcement and the ability to work even more closely with Hempalta will enable us to broaden our platform to markets throughout the world," said Tim de Rosen, CEO of ClimaFi Limited. "These credits offer corporate buyers the opportunity to secure high-quality, high-integrity credits. The credits mean companies can measure and contribute to their decarbonization efforts, and the credits also drive regenerative agricultural practices."
HCS's quantification methodology leverages cutting-edge remote sensing technology, ensuring the precise measurement of CO2 sequestration within the biomass of the industrial hemp crop and associated topsoil at a farm. The approach guarantees transparency, accuracy, and integrity in carbon accounting so corporate buyers can achieve their sustainability goals.
HCS further established its platform in 2023 by monitoring 15 farms, 45 sites, and 1,380 hectares (3,410 acres) in Canada, the United States, Ukraine, and Spain that resulted in sequestering 12,354 tonnes of CO2.
Hempalta is inviting companies from the energy industry as well as other industries to secure hemp carbon credits. By doing so, these corporate buyers can demonstrate their commitment to sustainability, support farmers embracing regenerative agricultural practices, and contribute to a greener and more resilient planet. More information on securing hemp carbon credits from Hempalta is available here or contact us at carboncredits@hempalta.com.
Investor Awareness Campaign
Hempalta also announced it has entered into an advertising and investor awareness campaign with Dig Media Inc. dba Investing News Network ("INN") as of April 30, 2024. INN is a private company headquartered in Vancouver, British Columbia dedicated to providing independent news and education to investors since 2007 at www.investingnews.com. For the 12-month term of the agreement, INN will provide advertising to increase awareness of Hempalta. INN does not provide investor relations or market liquidity services. The cost of the campaign is $60,000 per year payable in monthly instalments of $5,000. INN currently holds 263,618 common shares in Hempalta.
Investor Updates
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About Hempalta
Hempalta Corp. (TSXV: HEMP) is an agricultural technology company focused on harnessing the immense potential of hemp. Hempalta is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale. The Company's products are made from hemp grown sustainably in Alberta and processed using a state-of-the-art processing plant at its production facility in Calgary, Alberta. Hempalta is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods, and retail sales experience. The Company has been named a Top 10 Startup by Platform Calgary's Launch Party and recognized as one of the 50 most investable clean technology companies by Foresight Canada. Hempalta is a proud sponsor of the Wilder Institute/Calgary Zoo and provides sustainable hemp-based products to the zoo's operations. Learn more at www.hempalta.com.
HEMP TO BETTER THE PLANET.™
About HCS
HCS is leading the charge in environmental innovation by harnessing the natural carbon sequestration properties of industrial hemp to address climate change. HCS creates and distributes HCS Carbon Certificates across various categories, including regenerative practices, biochar, and biomass burial, certifying the capture and long-term storage of carbon dioxide—from a decade up to centuries—through sustainable hemp farming practices. These practices are designed not just to mitigate carbon emissions but also to enhance soil health and biodiversity. Through partnerships with farmers and other participants and corporate buyers, HCS is dedicated to advancing a more sustainable economy and shifting agricultural methods towards greater sustainability, demonstrating that environmental stewardship can align seamlessly with economic growth. Learn more at https://hempcarbonstandard.org.
For more information please contact:
Hempalta Corp.
Darren Bondar
President and Chief Executive Officer
Email: info@hempalta.com
ClimaFi Limited
Tim de Rosen
CEO and Co-Founder
Email: info@hempcarbonstandard.org
The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains information and statements that constitute "forward-looking information". Such forward-looking information involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking information.
Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking information. The forward-looking information in this press release include: the Company's anticipated benefits from the Transaction; the ability of the Company to monetize carbon credits with HCS; the future number of farms monitored by HCS; the amount of sequestration of CO2 in 2024 and beyond; and the business of HCS. Such statements and information reflect the current view of the Company. By their nature, forward-looking information involve known and unknown risks, uncertainties and other factors that may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information.
The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, are subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Except as required by applicable securities laws, forward-looking information contained herein speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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Quarterly Report for the Period Ended 30 September 2024
HIGHLIGHTS
- Group-wide cost reduction to preserve funds for future growth
- Engaging potential fee-based toll treatment partners to increase German facility utilisation and efficiency
- Board renewal and change of premise
The September quarter saw the Company streamline its business operations as part of ongoing cost reduction measures. The goal was to preserve capital and support commercialising the Company’s globally patented plant-protein products. Company management continues to engage with potential channel partners and explore strategic opportunities for future growth.
WOA’s German Production Team in preparation for toll production at the Facility
Seeking Industry Partnership and Global Commercialisation Opportunities
Following the acquisition of Prolupin GmbH in Grimmen, Germany, the Company focused on commercialising its production facilities, patented IP, and in-house expertise to attract and strengthen its channel to market. For example, the company completed trials with toll treatment clients and entered discussions with several food manufacturers and distributors.
WOA continues investigating strategic partnerships and opportunities to mitigate German operational costs while the facility is underutilised.
Strategic Cost Review and Quarterly Cashflow Report Commentary
WOA has undertaken a comprehensive operational review to reduce its ongoing costs, preserve capital, and reset the business for future growth.
As part of cost-reduction measures, WOA relocated its head office and R&D facility and closed its pilot plant, which is expected to save over $600,000 for the 2024/25 financial year.
At the end of the quarter, the Company had cash at the bank of approximately $3.4 million.
During this quarter, the Company incurred a total net operating cash outflow of $1.7 million, with essential items comprising:
- Administration and corporate costs of $894k, previously incurred by the Company and paid during the September quarter. These include one-off legal and advisory costs related to the divestment of the Dirty Clean Food business. The Company is reviewing all key service agreements and making necessary changes. It expects administration and corporate costs to reduce further in the following quarter as management maintains its efficiency focus.
- $429k as a once-off factory retrofit for the trial production of BP80 and research and development activities of new lupin protein applications for the Germany facility; and
- Staff costs amounted to $407k, reduced by 60% compared to the previous June 2024 quarter. After the September quarter, further staff reduction measures were implemented, which will be reflected in costs for the upcoming quarters.
Research & Development Activities
WOA continued its research and development activities, exploring new market applications for its lupin protein products and enhancing production protocols to improve yield in the manufacturing process.
Completed Capital Raise
In July 2024, the Company completed the second tranche of its share placement to sophisticated investors and a priority offer to shareholders to raise an additional $620k. The Company received strong support from new and existing investors.
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This article includes content from Wide Open Agriculture, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
WOA Relocates Headquarters & Enhances German Facility Utilisation
Highlights
- Wide Open Agriculture has relocated its head office and R&D facility to a new location in Leederville, Western Australia, enhancing access to commercial services and significantly reducing costs
- The Company has successfully completed two toll treatment trials at its German facility, producing high-quality plant-based protein products
- WOA is actively exploring potential fee-based toll treatment partnerships to strengthen collaboration within the plant-based protein sector, and increase utilisation of its German facility
- The Company remains focused on streamlining operations to support long-term growth and financial sustainability
WOA Germany employees preparing for a toll production run
Relocation and Cost-Saving Initiatives
The Company has relocated its head office and R&D facility from Kewdale to a more strategically positioned location at 2/284 Oxford Street, Leederville, Western Australia. The new Leederville office offers a more cost-effective solution while providing convenient access to key commercial services. The Company has also conducted a review of corporate costs as part of its cost reduction efforts.
WOA is currently reviewing options to relocate the pilot plant to a new facility.
German Facility Update and Operational Review
WOA has conducted a comprehensive review of its German production facility operations and costs, with the goal of improving operational efficiency and to address facility underutilisation to date, caused by a long procurement cycle in the food industry. In line with this review, the Company successfully completed two toll treatment trials for local plant-based protein companies which resulted in the production of high-quality protein products, showcasing the facility's capabilities to potential customers.
The Company is actively pursuing additional fee-based toll treatment services and fostering commercial relationships with other plant-based protein companies, while it maintains a strict focus on facility costs.
Yaxi Zhan, Non-Executive Chair said; "While the Company continues to demonstrate its capabilities in the plant-based protein sector and build its customer pipeline for the Grimmen facility, we will continue to optimise our operations and reduce costs where possible. Our ongoing focus will be on efficiency as we seek to deliver long-term value for our shareholders.”
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This article includes content from Wide Open Agriculture, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Preliminary Final Report for the Year Ended 30 June 2024 Appendix 4E
RESULTS FOR ANNOUNCEMENT TO MARKET
Financial Commentary and Operations
The Company recorded a loss after tax for the year ended 30 June 2024 of $12.7 million, which was a reduction in loss to the prior year of approximately $1.9 million.
The Company underwent a transition during the financial year, with the divestment of its Dirty Clean Food business in order to reduce costs and to focus on commercialising its next generation plant-protein product portfolio based on property IP.
As part of this strategic focus, the Company purchased a state-of-the-art manufacturing facility located in Germany, including technical infrastructure and staff. This facility has the ability and capacity to produce multiple plant proteins at commercial scale. Further, the Company has undertaken a review of costs, in order to preserve funds from its capital raising announced in May 2024, while it continues market development and sales efforts for its lupin and plant-proteins.
Dividends
No dividends were paid during the financial year (2023: Nil).
NET TANGIBLE ASSETS
DISCONTINUED ENTITIES / OPERATIONS
The Company disposed of its fully owned subsidiary, Dirty Clean Food Pty Ltd (“DCF”) on 23 April 2024 as part of the sale of the ‘Dirty Clean Food’ business during the financial year.
Contribution of DCF to the Company’s (loss) from ordinary activities before income tax during the period was $7,280,903.
ACCOUNTING STANDARDS
The financial statements cover Wide Open Agriculture Ltd and its subsidiaries as a consolidated entity (Group). Wide Open Agriculture Ltd is a company limited by shares, incorporated and domiciled in Australia and are dated 1 September 2024.
This preliminary final report Wide Open Agriculture Ltd has been prepared in accordance with ASX Listing Rule 4.3A and the disclosure requirements of ASX Appendix 4E.
This report is to be read in conjunction with any public announcements made by the Company during the reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and Australian Securities Exchange Listing Rules.
The preliminary final report has been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
AUDIT REPORT
The preliminary final report is based on financial statements which are in the process of being audited.
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Wide Open Agriculture
Investor Insight
A Bloomberg Intelligence report shows the plant-based market could make up to 7.7 percent of the global protein market by 2030, with a value of over $235 billion, up from US$42.7 billion in 2020. Wide Open Agriculture’s value proposition combines technology with the benefits of lupin to create a range of powerful and sustainable plant-based protein products that can leverage a booming market.
Overview
Wide Open Agriculture (ASX:WOA,FRA:2WO) is an ag-tech company based in Australia, focusing on the next generation of plant protein ingredients for food and drink manufacturers globally. The company is focused on harnessing the benefits of lupin as a sustainable and powerful source of protein, offering it as an alternative to traditional plant-based protein products such as soy and pea.
Lupin is increasingly recognized as a valuable plant-based superfood, recognized for their high protein and dietary fibre content, making them a valuable addition to human nutrition. On the sustainability front, lupins have the ability to enrich soil fertility, thereby supporting more environmentally friendly agricultural practices. Their role in crop rotation and their nitrogen-fixing abilities contribute to reduced reliance on synthetic fertilizers, promoting better land management and sustainability. Using lupin-based protein ingredients helps improve manufacturers’ environmental credentials, as well.
Key to WOA’s value proposition is its patented ag-tech process that turns lupins into a superfood, producing a protein ingredient that enables food manufacturers to improve and replace traditional ingredients by eliminating the need for sugars and other artificial additives. WOA’s Buntine Protein is a breakthrough product, offering the most neutral-tasting plant-based protein in the market and allowing food manufacturers to create ‘clean label’ food and drink products. Traditional soy-based and pea-based ingredients often require additional ingredients, like sugars and additives, to make them palatable to consumers.
Company Highlights
- Wide Open Agriculture (WOA) is focused on developing cleaner, better quality and more functional alternatives to current plant-based protein sources.
- WOA plans to leverage its patented agritech process to create protein-rich, lupin-based products and ingredients that do not contain additives like sweeteners, gums and stabilizers traditionally used with conventional soy-based or pea-based proteins.
- Overall, the products created by WOA are cleaner tasting and more functional. The company’s main goal remains to bring its lupin protein isolate, called Buntine Protein® to market as quickly and cost effectively as possible.
- Over the next six to nine months, WOA will work with food companies to get products to market and ramp up production at its world class manufacturing facility in Germany.
Key Products and Process
Through IP licenced from Curtin University in 2020, WOA has worked towards commercializing the IP at scale, combining it with the company’s deep knowledge of lupin protein extraction and processing. As a result, WOA has developed a range of products that provide a healthier, more sustainable alternative to traditional soy-based or pea-based protein products.
WOA opened a pilot production plant early in 2023 to produce its eco-friendly Buntine Protein. The technology targets a constituent part of lupin that allows it to increase the proteins’ ability to blend and mix with other food ingredients.
In October 2023, WOA purchased European lupin protein-isolate producer Prolupin GmbH. The $4.3-million acquisition gives WOA immediate access to commercial-scale manufacturing capacity. Having a foothold in Germany will also help WOA get its Buntine Protein to a wider market. The sale includes Prolupin’s German manufacturing facility and the patents to produce the Prolupin protein isolate.
The German facility has the capacity to produce 500 tons per year of lupin-protein concentrate with the ability to expand production to 1,000 tons per year, with an investment of $3 to $5 million within the next one to two years. Prolupin’s technology will also help diversify and enhance WOA’s lupin-product catalogue, with the capability to produce protein-rich lupin isolates, a protein concentrate in wet form, and a lupin oil.
WOA’s proprietary lupin-based protein ingredients have been successfully integrated into third-party consumer products in Australia and the US. CHONK vegan cookies, sold in Australia, is a gluten-free, egg-free, soy-free and dairy-free treat that uses Buntine Protein as an ingredient. In the US, WOA’s Prolupin isolate LP90 has been integrated into Superitalia’s Instant Superfood Cappuccino brand.
After an extensive R&D program, WOA’s new lupin fibre product, designed for the dietary fibre market projected to reach $16.3 billion by 2032, is now also ready for commercialization.
This year, the company plans to: 1) increase sales by working with international food manufacturers and brands; and 2) monetize co-products like lupin-oil and lupin fibre.
Management Team
Yaxi Zhan - Non-executive Director and Chairperson
Yaxi Zhan is an experienced executive with over 17 years of experience across startups, large-scale mining operations and ASX-listed companies. With strong connections in the Australian and Chinese business communities, Zhan is recognised for her business acumen and efficiency across diverse business and cultural environments. She is the founder and former managing director of Accelerate Resources Limited (ASX:AX8).
Anthony (Maz) Maslin - Non-executive Director
Anthony Maslin is an entrepreneur and social change visionary, driven by bringing new meaning and hope to environmental and community projects.
Joanne Ford - Non-executive Director
Joanne Ford is an experienced director and executive, with over 30 years of experience in ASX and international listed groups, start-ups and not-for-profit companies.
Beverley Nichols - Interim Chief Financial Officer
Beverley Nichols is a qualified certified practicing accountant with more than 15 years of experience, serving as the CFO of ASX listed companies across industries. Her extensive experience in financial reporting, regulatory compliance, and finance management will enhance the company's financial operations and support its strategic objectives.
Merilyn Elson - Product Strategy and Innovation Manager
Merilyn Elson’s background is in the fast-moving consumer goods industry, where she worked for a WA family-owned food manufacturer for over 30 years.
Hayder Al-Ali – Senior Food Scientist
During Hayder AL-Ali's PhD program, he worked extensively on optimizing lupin protein extractability, techno-functionality and palatability.
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