There is a reason why we report on the Bayer collaboration agreement in a six-day format. I can disclose, of course, the numbers. But as we mentioned, this agreement includes upfront payment, R&D fee and then, of course, milestone payment and royalty. I think what is important in these two announcements is that the first — another first-tier company choosing AgPlenus to work with to develop one of the most important products in the ag-chemical industry herbicide. And the second announcement, if you think about it, this is the first time that we have confirmation from a third party that our tech engine ChemPass and the AgPlenus succeed to achieve a milestone. So, I think this is a very important news. Now as I said, we expect that the significant portion from AgPlenus expense budget will be covered by these two collaborations and I hope and believe that there will be more in the future.
And I think that what we should expect in the near future is achieving additional milestones that will present the progress of this collaboration. With respect to royalty, it still will take some time. But like in the ag-biological arena, what is important is advancing in the pipeline because the value creation scheme is rapidly increase when you are moving from a hit to lead to optimize lead, et cetera, et cetera, et cetera. So, this is a great news for AgPlenus that we achieved first milestone in the collaboration with Corteva and we are looking at to the next challenges and milestones, which we believe will achieve them.
Ben Haynor: And maybe just a follow-up on the near-term milestones. Are any of those expected to hit this year?
Yoash Zohar: Can you repeat what you said just now?
Ben Haynor: Sure. I think you said that near-term milestones, milestone payments, is that upcoming milestone payments. Are any of those expected to be recognized this year?
Ofer Haviv: So,, there are some milestones that we are trying to reach during this year, not necessarily in AgPlenus. There is other agreements in the group that we are targeting for, but it also depends on research activity. So yes, we are looking forward to see the progress. In some cases, we hope and believe that we will be able to achieve them. There is always a challenge with respect to R&D estimate. It might take a little bit longer. But we are excited to see the current progress in all fronts with respect to our activities in our subsidiaries.
Ben Haynor: That’s fair enough. And then if I missed this earlier, on the 400 tons, I can’t just — is that sufficient? I thought at the end of the response to one of the earlier questions. Is that enough to meet the current order and the beginning of supply for 2025? Or can you clarify on what that 400 tons of production capacity gives you?
Ofer Haviv: Okay. So, our target is that in order to support the demand from the purchase order received in 2023 is coming from three avenues. The first one is from production took place last year, and now we are harvesting the field packaging, the feed and shipping them to our partners. Additional avenue is from the seed production agreement that we announced this quarter. And there is additional ongoing discussion that we are now planning to close the agreement not just to supply the existing demand, but also to start to build an inventory for 2025. So, as I responded earlier, according to our plan, we believe and expected to be able to deliver not just the quantity we obligate last year, but we are also planning to build an inventory or expecting for the future purchase order for 2025.
Operator: The next question is from Brett Reiss of Janney Montgomery Scott. Please go ahead.
Brett Reiss: First question, based on the crop rotation cycle. When will we definitively know that the new group of Brazilian and Kenyan farmers have been able to successfully grow and deliver the seed so we can consummate sales?
Ofer Haviv: So first, one of the reasons that we are growing in different regions is to be able to capture more than one season to grow castor. In addition, in all the areas that we are now engaged, the irrigation system in order to address the issue of water for the castor. I think that we are planning to probably we’ll have better understanding during the second quarter or close to the end of the second quarter with respect to this question. And in any event, we — our plan, we are going to engage with much more than what we need for this year to supply. So, as I said, part of it will be for the inventory for next year. But I think that during the second half — the second quarter this year, we’ll have a better clarity. But at least from what we are doing now, I think that we’ll be able to achieve this target.
Brett Reiss: Somebody, one of the prior calls that asked about the 400 tons of production. I’m going to ask it a different way. If you’re able to generate 400 tons of production, what capacity of dollar revenues would — can result if you’re able to successfully come in with 400 tons of production?
Ofer Haviv: I can’t disclose this information because then our competitors will know what is the price that we are doing in our products. So, I prefer to keep this commercial information confidential. And this is — we were hesitating what information we can disclose. I think it was important for us to send the message that we are taking care on the production issue. So, this is why we came with this press release. We prefer not to share more information because it’s not for the benefit of the Company.
Brett Reiss: And last one, since so much depends on your selecting the right farmers in Brazil and Kenya and monitor them monitoring them. Have you marinated yourself and your team — have the marinated themselves in Brazilian and Kenyan business culture so that we’re sure we’re selecting the right farmers, and they deliver what they’re contracted to do?
