20-F: Moolec Science SA Files 20-F Annual Report for Fiscal Year Ended June 30, 2024

Moolec Science SA reports its financial results and operational activities for the fiscal year ending June 30, 2024, highlighting its progress in molecular farming and key strategic initiatives.

Summary

• Moolec Science SA has filed its 20-F annual report, detailing its operations and financial performance for the fiscal year ended June 30, 2024.
• The company is focused on developing science-based food ingredients using molecular farming technology.
• As of June 30, 2024, the company had 38,440,602 ordinary shares issued and outstanding.
• The company reported a net loss of US$7,312,360 for the year ended June 30, 2024, and an accumulated deficit of US$65,935,383.
• Revenue increased to US$5,625,124, primarily due to the consolidation of ValoraSoy's revenue.
• The company is developing products like Piggy Sooy and PEEA1, which have received regulatory clearance from USDA-APHIS.
• Moolec is also working on GLASO, a safflower oil with high levels of gamma-linolenic acid, and SPC2, a plant-based chymosin.
• The company faces risks related to competition, regulatory approvals, and public perception of GMOs.
• Moolec is subject to various laws and regulations, including those related to environmental, health, and safety, as well as anti-corruption and anti-money laundering laws.
• The company has a collaboration agreement with Bunge to develop new safflower varieties for specific applications, such as biofuels.
• The company has an offtake agreement with a leading global consumer packaged goods and pet food company for GLASO, with plans to deliver 50 tons to the US market in 2025.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there's revenue growth and regulatory progress, the net losses and accumulated deficit raise concerns. The company's reliance on future financing and the competitive landscape add to the uncertainty.

Positives

• Revenue increased significantly due to the ValoraSoy acquisition, indicating growth in commercial activities.
• Regulatory clearance for Piggy Sooy and PEEA1 crops from USDA-APHIS marks a significant milestone for the company's molecular farming technology.
• The offtake agreement for GLASO provides a clear path to revenue generation in the nutritional oil market.
• Collaboration with Bunge to develop new safflower varieties could lead to new revenue streams and market opportunities.
• The company has a growing international patent portfolio for its technologies.

Negatives

• The company reported a net loss of US$7,312,360 for the fiscal year ended June 30, 2024, indicating ongoing challenges with profitability.
• The company has an accumulated deficit of US$65,935,383, highlighting the need for significant revenue generation.
• The company faces significant competition and many of its competitors have substantially greater financial, technical and other resources than it does.
• The company may face difficulties implementing its inorganic growth strategy, including not identifying suitable targets and in respect of integrating or performing the operations of the business it has acquired or expect to acquire in the future.

Risks

• The company is an early-stage company with a limited operating history, making it difficult to evaluate its current business and prospects.
• The company may face difficulty servicing its indebtedness, including convertible notes issued to Insud and Bioceres.
• The company will likely require additional financing to achieve its goals, and failure to obtain necessary capital may force it to delay or terminate operations.
• The company faces significant competition and many of its competitors have substantially greater financial, technical and other resources than it does.
• The successful commercialization of the company's products may face challenges from public perceptions of plant and strain engineered products (GMOs).
• Economic and political developments in Argentina, including regulations and restrictions, inflation and government controls may adversely affect the economy and the company's financial condition and results of operations.

Future Outlook

The company expects to continue to expend substantial resources for the foreseeable future as it expands into additional markets it may choose to pursue, including costs associated with R&D, the acquisition or expansion of manufacturing and supply capabilities, as well as the marketing and selling of new products.

Industry Context

The company operates in the science-based food ingredient market, which is highly competitive. The company's molecular farming technology aims to address the increasing demand for sustainable and affordable alternatives to animal-derived products.

Comparison to Industry Standards

• Moolec is competing with other molecular farming companies such as AlpineBio, Finally Foods, IngredientWerks Inc., Kyomei, Miruku Limited, Mooza Foods, NewMoo, PoLoPo Inc., among others.
• Moolec also competes with companies in the new food/alternative protein industry, for example Impossible Foods Inc, Paleo and Ginko Bioworks; and ingredient companies such as Givaudan Group, International Flavors & Fragrances, DSM Firmenich and Novonesis (Chr. Hansen), among others.
• Most of these competitors have substantially greater financial, technical, marketing, sales, distribution, supply chain infrastructure, larger R&D staff, more experienced marketing, manufacturing, and supply chain organizations and more well-established sales forces than Moolec does.

Corporate Governance

Legal Proceedings

• As of the date hereof, we are not party to any legal proceeding.

Related Party Transactions

• The company has entered into a technology access license agreement with Bioceres Crop Solutions Corp.
• The company issued convertible notes to Bioceres Crop Solutions Corp. in exchange for HB4 soy.
• The company has entered into agreements with Insud to issue a convertible note for an aggregate principal amount of approximately US$21 million.

Stakeholder Impact

• Shareholders face risks related to potential dilution from convertible notes and warrants.
• Employees are subject to a clawback policy for incentive-based compensation.
• Customers may benefit from innovative and sustainable food ingredients.
• Suppliers are integrated into the company's supply chain for raw materials.

Next Steps

• Continue research and development efforts to advance product pipeline.
• Pursue regulatory approvals for products in key markets.
• Expand commercial network and secure additional offtake agreements.
• Manage financial resources and secure additional funding as needed.

Key Dates

Keywords

molecular farming, food ingredients, Piggy Sooy, GLASO, PEEA1, ValoraSoy, GMO, safflower, soybean, Bioceres, USDA-APHIS, net loss, revenue, convertible notes