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Nepra trades on the CSE under NPRA, on the OTCQB under NPRFF and the FSE under 2P6
Warrants with a strike of $0.70 that expire in March of 2025 are trading under the symbol NPRA-WT
Nepra Foods is grounded in a passion for food. We believe eating healthy shouldn't be difficult. Everybody deserves food options that are truly nutritious and taste good. Food should not contain allergens that might prevent everybody in the family from enjoying it together. People shouldn't have to compromise quality and taste in what they eat even if they are trying to cut down on carbs, don't tolerate gluten or dairy very well, or don't want to eat food produced from animals. Nepra Foods is on a mission to make healthy, enjoyable food for everybody.
Webinar Transcript:
Thank you all for joining. I definitely appreciate it.
I wanted to give everyone a good update as to what's been going on the last few months. Last call that we had in April. I said I would try to do this on a monthly basis. It's been four months. So I apologize. I definitely will try to do better moving forward. The last four months have just been absolutely crazy hectic.
So, the purpose here is to give you all an update of what's gone on the last four months and give you a good snapshot of what's needed and where we're at.
Last time I gave everyone a good overview of what Nepra is where it comes from and some of my history so I'm not going to recap most of that. I think most of you understand where we come from. (For the transcript of the previous webinar detailing the history and overview see this article)
So post Udi's [after selling Udi's Gluten Free Foods], we realized, my business partner Marc and I really realized that there needed to be a lot of work done on the ingredients, the ingredient side of the gluten free industry. We set about forming a series of companies that would address those problems. Marc and I started looking for business partners. We found David Wood and Paul Feldman.
They were guys that helped me actually equip. They were really the perfect guys to bring in for that effort because of their huge amount of experience in the equipment realm for bakery. The first company that we kicked off, Gluten Free Baking Solutions, that really was set up to to start handling the improvement to the ingredients that we were looking to bring the market and also as a consultancy, Gluten Free Baking Solutions was designed to be able to enter into any facility and help them get set up not just with formulations, but also with their equipment needs, modifications to the equipment, really a top to bottom service.
Second to that we formed a sprouting and malting company, sprouted grains obviously improve the bioavailability of the nutrients and the grains. denatures the lectins, can change the phytate into phosphorus, all of those necessary things to enhance and bring about better nutrition.
The third company was a blending operation that was designed to allow for the novel formulations that we came up with for our customers to be blended so that they can remain proprietary. When you when you do a formulation for a company they inevitably if they're not manufacturing it themselves will be using a co manufacturer. In order to protect those formulations from the comans [co manufacturers], that blending business was really put in place to facilitate that.
These three companies that Marc and I moved into Nepra: Gluten Free Baking Solutions, Gluten Free Sprouting and Malting and Total Blending Solutions are under the umbrella of Nepra Foods. NEPRA is really the culmination of our careers. We are really vested in this effort. And so I've often said, failure is not an option.
It's a venture, it's always just going to continue to evolve and become bigger and grow into the entity that we know that it can be. We're completely vested in this. It really is our life's work.
What is it, what is Nepra? I've said this before, Nepra, the word itself is from the Esperanto language and it means absolutely essential and so that's the way that we view the things that we bring to market, the developments that we make in the greater marketplace.
Within Nepra itself there's four main streams of revenue, the four established pillars:
- Formula development and Ingredients
- Manufacturing
- CPG
- Hemp market
We've got the formula development aspect of our business. Second to that and joined closely to it is the ingredient side of the business. In terms of formulations we work with brands globally to develop products for them. We don't do product development, I should, state this and clarify, we don't do product development if it does not include a subsequent sale of our internal ingredients, our proprietary ingredients. So, when we align with a brand, we develop a product for them. We're inevitably becoming long term partners of theirs and supplying them ingredients over the course of time. And our ingredients are very, very unique. They don't have secondary sources of many of these products, so these companies that we lock in with, they're putting a lot of faith and trust in our ability to deliver them and in our ability to offer them support long term.
The second pillar or the second avenue of revenue for Nepra is manufacturing. We manufacture several different lines of product here, we're manufacturing some of our own ingredients. We have ingredients manufactured for us in Thailand. The products that we manufacture here in Colorado are our hemp heart flour, 55% protein hemp flour used as a bakery ingredient. It's going into multiple formulations for several different brands.
We manufacture our Pro Pasta, we have our blending facility, we have a single screw - we have our textured hemp protein and a lot of the other products that we can produce on that piece of equipment. Then we have our oil production and just a few other little things here and there that we kind of tap into. All that manufacturing, we've kind of set it up to be as streamlined and as efficient as possible.
The third arm of our business is the CPG. I've said this before but our job really all day is to play. Investigate new ingredients, investigate how those ingredients work in conjunction with others, come up with new novel formulations, new technologies. A lot of times we don't get requests for these things, we're just in the lab coming up with new formulations and new additions. So, every once in a while, we come up with a formula that we think is novel enough that we probably don't want to sell it. So the other reason for the development of Nepra or the starting of Nepra was to also facilitate the creation of certain CPG companies and bring those to market. Pro Pasta is the first effort of that but we have many others that we could follow up with.
The fourth arm of our business has really yet to be developed. We've been doing a lot of work in the background for it, but we haven't really allocated any real funds to it. That's the development of the hemp market. When I say that I'm not just talking about the hemp foods that we produce. One of my main objectives is to become the true cornerstone of hemp foods globally and many of our efforts behind the scenes on this are to make connections on a global scale and really try to bring together all of those parties that are interested in promoting hemp foods globally.
Second to that is the agricultural piece and the genetics. There's not really been a lot of work done for genetics in hemp specifically for food so we're working on that effort. We're also working on some actual agricultural practices that will increase the yields of the hemp and will improve efficiencies globally and so I'll talk a little bit more about that as we go along.
When you look at each one of these revenue sources, the formula development and the ingredient side, we run about a 25 to 30 margin on all of our ingredients. In certain situations we'll take something a little bit lower, 22 and a half, but the average ingredient business runs commodities, for instance, five to 15%, maybe 20% on the high side.
We enjoy the greater margin because our ingredients are so unique. Nepra in general does not deal in commodities. We only deal in specialized ingredients that solve problems for the industry. Every single ingredient that we carry has been designed specifically for a problem to solve a set of problems.
Whether it be our EB30, which is our primary bread base, it also goes into other baked goods, but it resists retrogradation and it emulates wheat starch. It's a gluten free ingredient that is tapioca based but it allows me as a baker to make breads like we did for the Cloud Bread company for their new brand Bright Sky. This bread has a 28 day ambient shelf life. Partially that's due to the fact that the EB30 not only provides a structure that looks like a wheat bread but it resists retrogradation. So the bread doesn't stale as quickly. In many cases it outperforms a wheat bread. An element of that formulation is our egg replacement, which is hemp based. The point being that EB30 solves some real technical challenges for gluten free bakers that want to provide a premiere product in the marketplace.
So on our manufacturing our general profit levels, and anything that we manufacture internally, we make a minimum of 35% on the market. In some cases, a little bit more depends on what it is. We have to be conscientious of the price going to market. We make sure that we're in good shape though that we're fully covered.
And it kind of leads into what we do for our CPG. Nepra Foods is going to be manufacturing Pro Pasta and we're making a good margin on the manufacturing side but we're also making a very good margin on the CPG side and we're looking to target close to 40% margins there.
As it relates to the hemp market and its development, it's kind of yet to be seen. We've got a lot of different ways that we're going to be monetizing that, some of them are going to be licensing fees. So there's no labor or any of the other typical overhead associated with those projects and we've got some novel technologies. We'll be able to license those technologies out to other interested parties that want to become our partners and I'll mention some of those partners a little bit later at least some of the potential for partnerships. If I can't name the group specifically, I'll at least kind of give you a good idea of what they do and why they're of interest to us.
2023 has really been, in some ways it's been a fantastic year, just absolutely amazing. I'll tell you from a business development standpoint, things just keep landing on our lap, things just keep aligning for us. We've got a tremendous amount of recognition in the industry from other professionals from huge companies that recognize the value that we're bringing to the table and we continue to expand.
I'll go into some of those revenue projections tonight from some of the new business that we're landing but really across the board we're getting a huge amount of recognition, and that's fantastic. This is all literally going to lead to revenues in the future so it's great. The challenging aspect of 2023 has been that we have not really been able to bring in any significant amount of capital so we've been depending mainly on our inventory and and stock levels and our ability to turn our inventory very quickly. We have a significant amount of inventory in stock, specifically around hemp and some of those ingredients, but then also a tremendous amount of our starches and other things and so we really have been relying on those sales to keep us going. And I'll get into some of those details a little later as well.
One of the things too that we've really had to concentrate on this year has been reducing our burn. When I took over in December our burn rate was about $230,000 a month. We're well under 100,000 a month right now. As a matter of fact, I think, last month, we only lost 30,000 for the month. So we're getting very, very close to the break even point. Obviously that's up and down for month to month because our receivables go up and down as is normal.
We have really taken a step back and we've really been focusing more on those projects that are going to turn revenue very quickly. We're being much more particular with the projects that we jump into with the amount of time that's needed to to dedicate to these types of projects and really trying to land as many of both small and large accounts as we possibly can to diversify our revenue. I think we've done quite well at that. We've got a good solid established base of customers and their businesses are continuing to grow so we've got increased revenues there.
As I mentioned, we're bringing in a tremendous amount of new business. In April we announced a private placement, and back to some of the challenges of this year we were not able to get anyone to take a lead order on it, so we didn't close anything. Along the way we've been able to take a couple of small loans and that's really helped in a pinch here and there. We're to the point where we need to either take in a larger loan, or we need to take on a private placement, actually take on a little bit of equity.
Regarding that new customer base I keep talking about, we have been working very hard to establish these new accounts and actually get the revenue in the door. So back in April on the last webinar I mentioned a few of the upcoming accounts that we were courting and working on and trying to finalize. We've got nine that I'll mention. Some of them I'll mention by name, some I still can't do that yet, because we haven't made announcements and they haven't given us permission.
The first is the one that we just recently announced which is the Cloud Boys. Cloud Boys are launching their new brand called Bright Sky. They're putting a significant capex into their facility and they will be ready to start manufacturing their own product, October 1 at their factory in in Dallas. However, they are using a co manufacturer, someone that we know very well also in the Dallas area, and they're launching, soft launching ahead of the end of their construction and they've already placed an initial P.O. with us, sizable, and one of the nice things about this account is that they are willing to pre pay on invoices. So that is very helpful to us.
Initially it looks like they are going to be in 2600 stores, but that number is continually growing I'm on the phone with Bruce Krat, one of the owners, almost daily and and I'm always getting updates to the business it's really looking quite nice. You know, Bruce has said that he wants to try to be in 10,000 doors by the middle of next year, give or take. These guys are seasoned bakery operators, this is not their first rodeo and they've had successful exits and other businesses as well.
They have an existing business called the Cloud Bread Company, they make what are called cloudies. This Bright Sky bakery is really an extension of their current market offerings and it's looking to be the much larger element. The end goal for them is to be in 30,000 doors. They want to take over the gluten free market. They want to be the premier bread in the marketplace and I see no reason why they can't be.
The second one that I'd like to mention is a company that we just closed last week. I've been working as hard as I can on this account. It's about a month behind, quite honestly, which is a little frustrating to me, but you know it is what it is that there are sometimes slow downs to your best efforts. This bakery is in, it's actually a Canadian company. They've got a bakery up in New Brunswick, but they built a gluten free facility in Lancaster, South Carolina, and it's a gorgeous facility. As a baker I walk into a facility like this I get really excited. He did give me permission to mention their name. It's called Fancy Pokket. And their facility is essentially sitting idle at this point. What we've done is design an entire suite of products for them. So we're talking breads, buns that type of thing, but then also cookies, brownies, pound cakes muffins, bagels and we've got some other products that we're looking to add to that mix as well.
All of those products are developed. They're all at this point, fully commercialized in terms of scale up. Now they're ready to enter the marketplace. They've got some very strong accounts that are interested in these products. The cookies and brownies especially were a huge hit at IDDBA, which is a big deli bakery show that they just recently had in Anaheim. He got lots of commitments there. The breads likewise have commitments throughout the US and Canada both. I'm excited about this, at the end of the day, this could legitimately be a a 10 to 12, possibly even a $15 million a year account for Nepra.
Another one that we're landing right now is actually a good friend of mine. She owns a pretzel factory. Not just pretzels, they're actually building a much larger facility that'll be able to handle crackers and other things as well. They're primarily wholesale, but they do have their own brand. It's called Stellar Snacks. She manufactures pretzels. If you fly on United or some of the other airlines you've probably had her pretzels.
We've developed three gluten free pretzels for her, and they will be entering into the marketplace immediately and they've got some very large accounts lined up that these products are going to be going into. One is a high protein pretzel the other is a vegan butter pretzel and then the third is like a standard pretzel, something that she would co manufacture and offer to some of her other clientele.
The the top line revenue I think that we're looking at there will probably be about four million a year, give or take. I'm trying to be super conservative with that one. The reality is, especially with a couple of the customers she's told me about that are coming to the table, the numbers could be much higher. We'll just have to wait and see, but she's looking to take delivery of some blends before the end of the month, she's hoping to be in production, middle of September, so coming fast upon us. We really have to diligently scale this as quickly as possible.
I can only mention a couple more. One of them is Savor Street, a customer that we've had for a very long time, but they have recently engaged us to become their sole provider of starch and flour for their brands, so we're excited about that. I can show a chart here that will illustrate some of these and I'll just talk through them and you can see it at the same time.
Hopefully you can all see that.
The current sales for last year are 5.1 million, ish, right around there. By the way, we're in our audit right now, we'll have all of those financials out to everyone by the middle of September. We had a little bit of a slow down in our ability to engage the audit. We worked out all those problems and we're now in the midst. Auditors are completely taken care of financially so it's well on its way. We also need to do our quarterly financials so we'll be getting that on the next week or two.
The current sales like I said last year, 5.1 million. So what are we looking at for 2023?
By the way these numbers are not what we're going to do in 2023 but it's a good projection of what the annualized business will look like once all of these accounts are fully scaled. As I mentioned Bright Sky Bake House about 6 million, Fancy Pokket, I pegged it at 10. I really am trying to be conservative there. Stellar Snacks 4 million.
I. O. breads is an interesting one. It's a new and up and coming retail brand. They're doing quite well in the marketplace and they're looking to jump into the gluten free market and so one bread that we've done for them is a gluten free allergen free, keto bread, only two net carbs per two slices. It's really an amazing product. The fact that we were able to get this thing to work is quite the engineering feat, honestly.
It tastes great. It looks just like regular bread, but it obviously is carb free and has a very long shelf life too, a 45 day shelf life ambient. The reason for that is that we use our, our RS4 our resistance starch type four in that product and that product that RS4 for does not retrograde. We also use our hemp egg replacer in there, as well as a few other bits and pieces that we've come up with.
We think you know year One will be around 250 grand. So it's not a huge account to start, but it has legs to really grow and they're looking to do some line extensions along the way so I have no doubts going to end up being a very, very good account for us.
C. A. Foods is going to be a big one. We are going to be in their factory and in their laboratory at the end of this month, finalizing some of the formulas that we've come up with for them. I expect this account to probably hit November going into December. Small at first with just one or two ingredients but then growing pretty steadily and then they're going to be using our egg replacement. The numbers on the egg replacement, they're starting off with 500,000 pounds a year and then that's going to move up to 1.1 million pounds a year of of egg replacement. If that holds true, then we're talking about a really big account potentially. The average sale price on our egg replacement is 8 dollars a pound, so do some math (ha ha).
Our break even point with the reduced burn, I think it's between 10 and 11 million right now. So just with the onboarding of our of Bright Sky in conjunction with our current sales, that puts us at break even. Obviously there's a scale up, we have to ramp these things up, they don't just start at that top line of revenue, but it's definitely going to get there very quickly.
U. Foods. We developed a pretzel for this company they're chocolate enrobing it [chocolate coated, also extends shelf life], they're going to be launching that into the marketplace, they're a very popular brand. They've got quite the following, they're in every grocery store that I've been to so I expect those volumes to be really good. That product uses our hemp heart flour and a lot of it. I'm excited about that, it's going to be a really popular product, very nutritious. Even even with the chocolate that they've chosen to put on top, it's a premium chocolate so I'm excited about that, I think it's going to do really well in the marketplace.
BRM ($250,000) is a retail company, they have various items that they offer at shelf, and we are doing a bunch of blending for them, as well as supplying some novel ingredients. So that'll be a good account. I'm being super conservative with this one for year one based off some of the blending that they've asked us to do for them. I haven't even included the ingredient sales in this projection.
I mentioned Savor Street, that $850,000 that's really just primarily our EF-03 [low fiber (3%) content cassava flour] and Rheoflex Native RFN-25 [cold water-soluble tapioca starch ] and a couple of our other ingredients but we're getting 100% of their business. We've been very good partners to them and they likewise been good partners to us. U. Foods was actually an introduction through Savor Street. There's a couple of other companies that we were introduced to. One of our bigger customers is Fit Joy Foods and Fit Joy was an introduction through them as well.
PBF. That is one I'm very excited about, it's going to grow significantly throughout 2024 and going into 2025. We're launching several new products through them. One in particular is a hemp mayonnaise, completely hemp based. So it sells our clarified hemp oil, our egg replacement for mayonnaise and then our hemp aminos. So it's really our first scale up of the hemp amino product, which, if you don't know what that is we actually manufacture a hydrolyzed hemp amino. That product, when you hydrolyze, when you extract the aminos, the imami flavor is insane. It's absolutely amazing. Much better than soy.
We can make a hemp based quote unquote soy sauce, or soy sauce replacement and we've got some of that in the works. Right now we have a partner company up in Divide, Colorado proximity. I'm sorry, Paradox Brewing and Paradox is going to do some barrel aging for us as we do our soy sauce replacement. So that's going to be interesting. That'll be fun. I'm excited to see that project come to fruition.
So all in, if you annualize the revenues here and again I'm trying to be super conservative, we're looking at 31 million in annualized sales. It has to ramp up, it's going to be slow to fully capture that. I put together this next slide just as a very dirty way of explaining what the sales do over the next couple of years. I mean obviously we did $5.1 million in 22, going into this year I'm projecting between eight and 10. We'll have to see where it lands.
If we start to really ramp these these projects up and and trying to be even double conservative here. I'm saying that we'll get close to 20 million. If we fully realize all of the accounts that I just mentioned, and they're fully scaled then we're going to do much higher than this. That rolls right into 2025. This is just ingredient sales, this does not touch on any of the other aspects of our business. So, this is just what we're going to do with with the accounts that we're on boarding for formulas and ingredients. Second to that is, talking about our manufacturing it obviously scales up with each one of these ingredient with each one of these customers.
Pro Pasta. We, we're going to make some announcements around Pro Pasta in the coming months. We've got a lot of exciting things happening there. One of the cool things that just happened with Pro Pasta was we went to Expo West in March. Expo West is a big CPG trade show out in Anaheim, CA. It's a massive show, they got 85,000 people walking the floor. Actually, I think this year was a little bit less it was close to 70,000, but we had a chef come by our booth, where we were featuring Pro Pasta. He was with Chefs in America, and he tasted the pasta and he loved it. He submitted it for a tasting with the Chefs in America group. Usually it's $10,000 to enter your product into this tasting to get rated, and because he introduced the product we didn't have to pay that. It was really free to us. But they evaluated our product and we won a gold medal for the pasta category for the gluten free alternative pasta category.
So that gold medal is recognized with all major retailers. The American Masters of Taste is the actual award. Big retailers recognize this, they recognize the validity of what they're doing. If we're going into a Kroger, for instance, not only can we put that gold medal on the box but we can use it as a selling point in meetings and going landing accounts. So it's good. It's a great way to launch the brand.
Currently today, we're in about a dozen restaurants and that is growing exponentially. In terms of manufacturing, we have a pasta extruder, we can do about 20 to 24,000 pounds a month, with our current dryer we can only do about 8500 pounds a month, so we're really moving slowly. I've been hesitant to allocate too much funds to Pro Pasta right now. 2023 from my standpoint is just let's get profitable. Let's make sure that the business is tight, it's running efficiently, it's doing all the things it needs to do. In 2024, we can really start turning on Pro Pasta and some of these other projects.
In terms of what we need for Pro Pasta, we really need to invest in a pasta line, something that would be set up here in our warehouse, and we'd be able to start manufacturing the three dry pasta forms that we have. We've got a rotini also called a fusilli. We've got a rigatoni and we have a shell. The rotini is really the only one we're in production with right now. The local restaurants that are serving our pasta, we're getting fantastic reviews, people are really enjoying it.
We have a pasta line that we need to bring in that will allow us to produce a million kgs a year, so about 2.2 million pounds. That will service, give or take about 3000 retail spots if we were to fully maximize. We're not just doing retail we're, we're also going after the food service market so we're getting into restaurants, that's really where we live, we've got a huge amount of restaurant contacts. In retail we've got a lot of fantastic leads, we've been talking to a lot of the big players. We've had meetings with Kroger. We've got, especially at Expo West, just to mention that again we got a huge amount of interest, in the pasta specifically.
And let me share the screen again real quick.
I'll just give you an idea what Pro Pasta can do just with that single line. We're going to turn it on. We're, we've got the smaller machine and we can only dry about 8,000, 8,500 pounds a month so if we are able to maximize that production from now to the end of the year from so literally from today through August and we're trying to do that within the next couple of weeks, really scale it up. That will land us roughly $230,000 for the year in total sales.
If we order the equipment, the equipment' is about $175,000 for the system we're looking at. So if we can get that system, and so this is all hypothetical right I mean we got to be able to do this. We have to have the capital to make it happen. But if we pay for that pasta line, we install it, we get it all set up. Let's say take six months to that by the way there's a system available. So we don't have to to wait to have one manufactured, there's actually some already in the marketplace, good used systems. The brilliance of what we do here is that we have two fantastic equipment guys. Paul is an equipment engineer and then David as well. You ought to see them geek out on equipment, it's fun to watch. They can solve any problem, so we have our own internal systems for getting these things turned on.
If we order that system and get it put in place and say it takes six months between now and then, only being able to turn that system on for the remaining six months of the year plus the first half of the year being just the smaller machine, we'd be looking at generating potentially $9.6 million for 2024 in Pro Pasta sales.
If we didn't expand any more than that, if we just kept the single system, that 2025 sales number gives a good indication of what that single piece of equipment could manufacture. It could turn around and give us $17 million in total revenue. This is not a true projection. We're working on the true projections of how we scale this, but it's intimately tied to the amount of capital that we bring in specifically for it.
Pro Pasta, by the way, we just developed a keto version of that. Keto, it's one of those things, there seems to be a good retail presence for keto products, but most of the keto products really sell online. So we developed this product. I was resistant to it. I didn't want to do something that was just keto but but we've got a lot of requests for it. There hasn't been a really good keto product on the market, for pasta especially. This one eats identically, ironically, to our regular Pro Pasta so it's got exactly the same attributes. It just happens to have on a 100 gram serving four net carbs, so definitely qualifies for keto, also high protein. Same protein complex as our regular Pro Pasta, 30 grams of protein, about 47 grams of fiber per serving. Prebiotic fiber by the way, it doesn't cause any weird upset.
When I was mentioning all of those customers that were onboarding and all of that revenue that we can realize. I think in order to get there. For all of that business to be realized, we need probably a million and a half, but most of that's ingredient purchases so it's actually investment in ingredients. That's a great facility that we're going to be taking advantage, trade financing, will allow us to buy those ingredients at a really great rate for Nepra so I'm excited to use that utility. It's actually being conducted through a very good friend of mine. He is actually a member of Nepra, he does sales for us in certain circles. He's a commodities trader and he has a couple of projects that he's using his own facility for and he's going to be lumping us into that greater trade finance company that they've put together. I'm excited about that because that takes a lot of the burden off of us for the growth. It really just then leaves us to only needing what we have in terms of our monthly expenses.
So for us to achieve profitability in conjunction with all on boarding all of these accounts. We need somewhere in the neighborhood of about USD about 550 thousand, give or take. We can do it for a little bit less but it depends on how many projects that we really want to take on and how quickly do we want to do that.
Some other general updates for ingredients and things, we're continuing to move our egg replacer into the marketplace. A couple of you have brought up the the fact that it's probably a misnomer. It does replace eggs in many applications and so we call it an egg replacer. The other reason we call it an egg replacer is that it specifically replaces eggs in gluten free baking, but in gluten free baking you're utilizing the eggs as a as a gluten replacer as a means of providing structure. Eggs don't really hold enough air in those types of formulations but that's why we add hydrocolloids [Any material that forms a colloid (especially a gel) when mixed with water] and other things. The egg replacer in this case, the hemp based egg replacer is really specifically emulating the properties of eggs and all of these different formulations.
What's really cool about this is, and we just we keep learning more, is that hemp outperforms eggs. The fact that hemp is primarily globulin and the fact that those globulins coagulate and have the functionality that they do allows me to increase the shelf life of a standard bakery product. If I were to add eggs to the Cloud Boys formula, that formula would turn dry in about 18 days. It would actually get dry and crumbly. The eggs are responsible for that. By adding our egg replacement into that formulation we're getting an additional 10 days and to be factual it's actually longer than that. We had some loaves sitting around that were 35 days old, still hadn't molded and they were still flexible.
The ability of the globulins to extend shelf life is pretty significant. What we're finding is that the filamentary nature of those globulins when they coagulate actually encapsulates or partially encapsulates the starch matrix within these products, so we can encapsulate the starch. The starch is what retrogrades, that's what turns stale, so retrogradation is a process of losing water and returning to its original chemical state. By encapsulating those starch granules with this filamentary protein, and because the protein is so efficient at holding water long term you're essentially preventing those starches from retrograding. So the implications are huge.
So we just went to IFT. IFT is the the big food technology show. Institute of Food Technologists is what IFT stands for and we just had a booth at the big IFT show in Chicago, it's an annual show. It's a bunch of ingredient purveyors and so so we were showing there.
Scoular, who we've announced before [see announcement here] was also showing there and we had a bunch of meetings with Scoular and literally I was there for three days and I was over with their booth every single day with different customers of theirs that they're bringing to the table that we're creating systems for, for their products. We're entering into product development opportunities and then we're looking to do some joint projects with Scoular.
Scoular hired a couple of new sales guys to directly interface with us. The potential there is that we're going to be moving some of our novel ingredients into the conventional bakery space, something I'm very excited about. I'm jumping the gun a little bit talking about Scoular because I didn't finish where else our hemp egg replacers going but the reason I'm doing that is that the hemp specifically in a regular bread, think about regular breads they don't require eggs, it's the gluten that does all the work. So by adding in the hemp, the hemp protein, we're actually able to extend the shelf life of regular bread so it's pretty exciting. It's a clean label way to do that.
If a company uses enzyme technology in conjunction with our hemp protein they could do a really great job of extending the shelf life, I will say it like that. By the way, if you don't understand this, every day that you can extend the shelf life of a product is worth a lot of money as it prevents companies from having to stale them out. It allows them to increase revenues. So it's a really big deal.
Back to the egg replacement. Bright Sky, Fancy Pokket, literally every formula that we did for them is vegan and gluten free, so all of them use our egg replacement. Some of our other customers are converting their lines. They've been long term customers of ours that have been using our starches for a few years now. They're now converting, getting away from eggs and starting to use our egg replacement. That account I mentioned before, I. O. Breads. They likewise are going to be using our egg replacement. The PBF company I mentioned they are as well, that's going into the mayonnaise.
In addition, we have accounts internationally. We're starting a few accounts in Colombia, there's one mayonnaise project down there. There's a couple of baked good opportunities that are going to be using the egg replacement. We have a big account in Australia that has just approved the egg replacement going into their products and looks to be somewhere around 500,000 pounds a year, so it's going to be a really nice account for us. They're already using our starches, so it's a line extension. It's really gaining ground and, and it's a little bit challenging to just hand this ingredient to someone without really going into a demonstration of how it works, so we're doing that. We're presently scaling up with many, many other companies and I think it's going to ultimately be really great.
I mentioned the hemp aminos and our launching of that product. It's a game changer for meat analogue systems too. Soup stocks, vegan soup stocks. I've mentioned this before but hemp has this amazing property. Of the total amino complex, 19 and a half percent of its glutamine. If you think about dairy, dairy analogues, dairy proteins have 21% glutamine. When you go through the cheese making process, cheddering, those flavors that you develop in the cheese making process, those are all responsible, those are all come essentially tying back to the glutamine level.
If we do dairy analogs with hemp we achieve flavors that are on par with regular dairy. As we do that with meat analogue systems, we're developing these really amazing meaty tastes or flavors. We did some wet extruded hemp and it tasted like Turkey, it was the craziest thing, and it was just hemp by itself. So I'm excited about it because these things are really, I think, going to play a very big part in the future development of the meat analogue space.
We're also working on some projects with our hemp oil. I think this is important because the hemp oil is a side stream to our hemp protein production. So we obviously have our clarified hemp oil. That's moving out very well, we've got some partners there that are doing that for us. We're partnering with another company out of Vancouver, they have a different oil from a seed called the ahi flower and there's some really unique properties to this, especially the omega complex. What we find, we're doing research now, but what we find is that when you combine that with hemp, with the omegas and the hemp oil, you actually enhance the nutrition of the the hemp oil within the body and you increase the bioavailability of the absorption rate of the the primary omegas, that three to one ratio of sixes to threes, 68% of the hemp oil is omegas, but it's LA and ALA and those can only be converted at about 16% in the body. By combining it with the ahi flower oil we're able to increase the bioavailability of the omegas. So it's a big deal because then you ultimately are dealing with a product that is a one to one replacement for fish oil, which is cool.
One of the other things we're doing with the hemp oil is treating it with phospholipase, which is an enzyme that helps convert the the hemp oil into an emulsifier, clean label emulsifier, very clean label, and that will allow us to approach bakeries that are looking to get rid of mono and diglycerides. So I'm excited about that because these streams allow us to move out all of that, what is essentially a side stream, and monetize it, so that's really great.
A couple updates on on some of our other true gluten replacements.
Gluten free baking is a starch matrix, I've said this before, versus a gluten based bread which is a protein matrix. We've got an ingredient that we're manufacturing called carob germ, it's carob germ flour. It's 65% protein and has this amazing functionality, it functions very similar to gluten. We're doing a lot there to to develop that product and move it out. We've got some accounts right now, some formulas that we put together that are actually going to be using that product and I'm very excited about the modifications we're going to be doing to that product in the future. That ingredient by itself has the capability of completely revolutionizing gluten free, converting gluten free to a protein matrix, then allows you to do long fermentation, create sourdoughs and all kinds of really cool things on a commercial level, beyond just a home level.
I want to mention some of the partnerships that we have coming up. I can't mention everyone, some of these are really under development but I want to just briefly talk through each one of them.
The first is Scoular, we've already made that announcement that especially after IFT is really starting to take form. We're really starting to pave a way to a really elaborately intertwined relationship. If you don't know who Scoular is they are a $9 billion a year commodities company essentially, they have a lot of farmland. They move out a lot of really standard ingredients, pea protein, vital wheat gluten, things like that. They are getting more and more into specialty ingredients and that's really their interest in us, plus our ability to really tackle the issues, the problems that a lot of bakers face.
We not only designed the systems that improve their processing but also we provide those ingredients solutions. That is going very, very well. Their new sales guy, Dustin, he's going to be coming out to see us here in the next few weeks. We're going to be laying out a really detailed plan as to how to start approaching some of these bigger bakeries in the industry on the gluten side not on the gluten free side, gluten free compared to the bigger market [chuckles]. So you can see it's probably going to be a really big deal for us.
The second one is is is Bakerpedia. I announced this on the last webinar that we were getting into an agreement with them.
Lin Carson, the CEO of Bakerpedia, has done a great job of introducing us to many, many other companies. We are on their website as a supporter of theirs and they do a lot of marketing for us. Lin has been going to various companies and and introducing our products to them and actually doing some of the product development which is good because it takes some of the pressure off of me, because I've literally been traveling three weeks out of the month for the last few months. I haven't had a lot of time to get into the lab so she she's picking up some of the pieces for me. We have two huge accounts that are at the table from that relationship so as we develop those further I'll definitely be making some announcements. It's going to be some really, really great stuff for us.
The rest of the partnerships, there's about seven more that I'd like to mention. They fall into different realms, different categories for Nepra. Some are things that we can take advantage of immediately, others are our relationships that will facilitate the next stages of Nepra.
One of them is a group out of California they're heavily invested invested in the hemp industry. They're actually taking in a $35 million capital raise right now, they're looking at a global play. They're looking at every avenue, every aspect of the hemp industry. They're getting into THC they're getting into CBD, they're doing textiles, construction. Really every aspect and we are their food partner. There is going to be a lot of announcements around this partnership. It's going to, I think, be very, very good, not just for Nepra, but for them as well and good for for our global contacts.
Along the same lines there's a Australian company that we're looking to partner with. They have just acquired a food company that also deals with hemp, so they're very heavily getting into hemp foods. We will be developing more hemp foods for them. They have a retail brand today that is doing, I think they said 4 million, 4 million Aussie per year and growing, they're getting great penetration throughout the Australian market. They are also, this is interesting, they are in the process of acquiring another company that manufactures a hemp protein and a fava bean protein and a few others that the company is looking to move through Scoular here in the US so I've already got samples of all of those products from Scoular to evaluate to see if it was a company worth investing in. And now we're actually talking to the company that's going to be acquiring them as a partner moving forward. That partnership, by the way, could at some point include a merger. So there is a lot of overlap between what they're doing and what we're doing, and it would really enhance our global reach.
The third one, also hemp related, is a company that is focused on the protein in hemp, specifically the edestin and rolling that out as a nutritive ingredient, concentrating it in form and doing a bunch of other things with it so I'm excited about that. These guys likewise are very passionate about the hemp industry, I think it's going to be a relationship that is is mutually serving from our ability to formulate with edestin, and their ability to market it and move it out.
I have another guy also hemp related, hemp industry. He's in Germany and he likewise has a hemp food company. We are going to be licensing to them several of our formulations. He's very excited. We're in the process of getting ready to put samples together and move them over to him, initial samples for some of the things he's requested. He's very interested in the textured hemp protein, he's very interested in some of the aminos and then some of the other products that we've already developed he's going to be taking those and actually producing hemp based foods. There's a much bigger partnership there that we can look to make as well.
We have the opportunity to partner with a nutritionist with a dietitian. We have our own internal registered dietitian, Kim Mayo. She's also our project manager. Kim is amazing. Kim has been working with this person. We are laying the groundwork to form a partnership here, she's world renowned, this person we're talking to. I think that it would be a fantastic addition to our team and a great way for us to penetrate the global market with the understanding around the nutritional aspects of hemp. So super excited about that.
The last two are that I'm going to mention are related directly to the agricultural piece that that Nepra is going to be getting into. Really, I think, starting in earnest in 2024. The first is a local gentleman. He is in Pennsylvania. He is actually one of our investors and I have to be honest I have thoroughly enjoyed meeting this guy and and having conversations with him he's he's a fascinating individual. He has some really cool tech. I'm going to overly simplify this, I'm not going to go into all the details but suffice it to say he can convert cattle manure into usable fertilizer in three days. This has some enormous potential in the marketplace for organic farming. This is a fully substantiated technology and it's one that when we form the agreements with him that technology would be basically blended into Nepra and we would be able to take that technology and license it out to others. I owe him some some documentation and some other things and I'm really looking to try to get this project wrapped up as quickly as possible. It plays very, very nicely into what I'm going to talk about next and it really speaks to the long term objectives of Nepra, and that's developing our hemp genetics and actually getting seed in the ground.
We are definitely going to be growing organically and so this technology that I just mentioned for the fertilizer is directly going to be used on our own fields. We will be able to license this technology to other entities, to other organic farmers, there's a massive opportunity there. Something we can start moving immediately by the way, so that's very cool.
As it relates to our agricultural piece I have a very, very good friend, someone I met many years ago in Israel at the Weisman Institute. He is a geneticist and a research scientist. He and I met while while getting a backstage pass at the Weisman Institute to see all of the latest CRISPR technologies. We were there to investigate hemp and essentially there to shore up some potential partnerships. This guy that I met, we have become very, very good friends and we have been hatching evil plans to modify and revolutionize the agricultural landscape. We want to start with hemp, we think that hemp is the perfect way to do this.
We're developing a process called electro culture and electro culture is, I'm not going to get into all the details here, but just at a very high level touch on some of the basics. Electro culture basically is supplying a low voltage current to the soil and at the same time broadcasting a resonant frequency that is fine tuned to the crop that you want to grow. You can grow any crop via this method. The electro culture itself is a patented process it was patented in the early 90s by a guy in Eastern Europe, his name is Guido Ebner. It's called the Ebner effect, that's another name for it. Ebner worked for a pharmaceutical company and the pharmaceutical company commissioned the development of this technology, and they own the patents for it.
In the year 2000 Ebner died, and it had been his desire up to this point to release the patents. His son actually did that, Ebner's son released all of the patents globally, and my friend is actually in South Africa today, teaching 1600 farmers how to grow via this process. It's remarkable.
Some of the other details around it. What he did is he basically got this technology, he fine tuned it. As is the case in most patents they don't give you all the information, but he was already very attuned to how this worked, and he was able to fill in the gaps in that patent and prove it out and so he's he's been looking to move that out in a very significant way. Some of the attributes of electro culture, are first of all it needs to be organically farmed back to the need of the fertilizer, because you still need to fertilize the crops, but you need to do so cleanly. The, the process itself is a no till system so it fixes carbon in the soil, it depends upon the proper biome in the soil, and then it also depends upon the mycelium. The mycelium in conjunction with the rest of the biome and the proper mineralization of the soil allows for electricity to flow freely through the soil.
This voltage that you supply basically in conjunction with the resonant frequency basically vitalizes the genetics. We have a strain of hemp that we're working on for food that produces 3500 pounds of hemp per acre. That strain of hemp is being proven right now in the United States, it's not our genetics by the way, it's something that we'll be able to license but that strain is already producing more than, it's about twice what the the normal strains are producing right now today, the fiber strains.
By using electro culture, we can actually double that we can convert that third that 3500 pounds of of grain per acre to 7000 pounds per acre. In some cases in certain regions we can actually do this twice a year so we can actually in truth almost yield 14,000 pounds per acre. Now you're able to get hemp to the price point that makes sense to start selling it to all of the big guys. We're talking to everybody. We talked to ADM, General Mills, Con Agra, Nestle, we're talking to you name it we're in discussions with them. All of them, literally all of them, recognize that hemp protein is the future, that it is the king of plant based proteins and there's lots of reasons for that.
I went on a hemp soap box before, I won't I won't address a lot of those things here, reach out to me if you want some specifics. The thing that's preventing them from buying hemp today is the fact that it costs so much. My FOB price for hemp, we have two big hemp producers that we contract with and produce hemp protein to our specifications, our hemp 80 specifically, the one that goes into our our egg replacement. We have two big ones in China we've got a group in Australia we've got a group in Bulgaria we've got a couple of groups in North America.
In every case the cheapest one I can buy and the one I was just mentioning $5 FOB China is our price. I can't just bring that material directly into the US I get hit with a 25% tariff. At the end of the day what this protein ends up costing the customer is somewhere around $8 or $9 a pound. The big guys just can't use it. They cannot use it at that price.
As a consequence this technology that we're developing agriculturally in conjunction with the new novel technology that we have that's a wet process for extracting protein using conventional technology like brew tanks and things. We're can create an 80% even really a 95% isolate if we want to, but an 80% and have it in the marketplace for somewhere around $3 a pound, at that level, then all the big guys will jump in. So when I talk about becoming the cornerstone of the hemp industry and hemp food specifically, this is what I mean. It's our ability to form the technologies to produce the product that these big companies can jump and start really using it. That's how hemp becomes mainstream, that really plays into our long term outlooks and our long term planning.
And we really start in earnest with that with those projects in 24 after we've achieved profitability, and we can start allocating funds strategically to that effort. A lot of those funds are going to be coming from some of the partnerships that I just mentioned so it's not like the total burden is going to be upon upon Nepra. Some of the other long term outlooks are the development of that hemp 80, our internal ability to produce it. We will continue to contract with others globally because we do believe that the volumes are going to be such that we'll need as much as we can possibly get our hands on.
The genetics that I just mentioned, we, oh, by the way, we have another strain of hemp that is ours. My buddy is developing this. When he was living in Bulgaria, he found a wild strain of hemp that has 30% starch. Hemp today only has 4% starch. It's a great protein product it's got great oil, all of those things but you can't do much else with it in terms of baking or utilization of its starch, because there isn't any. This starch variety would allow us to do a lot of really cool things with hemp that have never been done before, along the lines of fermentation and I'm excited about that.
The electro culture and the fertilizer are a huge, huge roadway for us. The CPG, what we're going to be doing with the CPG long term. Pro Pasta has the legs to be a $200 million brand. Getting the right partners into to really aid with that, assist with it in terms of sales and infrastructure. I mentioned that single pasta production line. That line is really, that's small. That's tiny production. Long term, we're going to have to build a factory for Pro Pasta. It's going to be its own standalone entity. We'll likely use co manufacturers as well as we expand it globally. We've actually already got a lot of interest from some big Italian producers to to license the technology to them.
The whole idea or two around the CPG was that we don't necessarily have to hold on to these brands. Let's just say we grow it up to 75 million at a 45% margin and we're we're highly efficient where we're kicking ass in the marketplace and somebody wants to come in and give us three, four, five time sales. We'll sell it. I'm not married to that brand. I don't want to hold onto it to, to Pro Pasta forever. You know, the goal is to take some of these CPG products and then establish them in the marketplace and then spin them off, and then wash, rinse, repeat, do it again. We got a couple other brands that we're kicking around that could follow Pro Pasta it's just discussions right now but down the road there's legs to continually redo this.
All of that culminates into into what our financial needs are to get to profitability and to realize all of this potential. Listen, there's no doubt the potentials there the business is right here, it's on our lap. We need probably $750,000 Canadian to make this happen. I mentioned I could probably do it for less. I think anything less than that is really just we're just going to slowly penetrate. If I'm able to pick up $750K Canadian then I think we're off to the races and we probably won't have to do another raise, especially not before reaching profitability. We might have projects in the future that we want to get special financing for. I'm not saying that we wouldn't go after that if it came up but at least in terms of getting us to the point where we are fully profitable. I'm looking to do a raise of around $750k.
I've been exploring a few different options I had an opportunity to take a loan for 300k USD. As we started negotiating with these guys, I've not completely written it off, we're continuing to negotiate with them. But the initial terms have just been way too off putting. Money seems this last year has just not been friendly. I think it's really time that I re-tap the market and see if there's an opportunity to do another raise. I think that the business is there and substantiates it. If for some reason we can't land a raise, similar situation, the raise that we announced last April we were not able to get a lead order on that, we were never able to close it. I'm hoping that this time is different, especially with our clear closeness to that profitable level.
You know, stock price is not, it's really taken a beating, for sure. I think most of that is because of belief around our liquidity and that type of thing and it's not wrong. We're making great headway on the business development side, but we've had to be incredibly selective about where we put money. I think that with just a small inflection of cash we will literally be off to the races. There won't be anything holding us back at that point. We've been laying the groundwork and paving the way for this business to really in earnest launch. So, I'm excited. I think it's going to happen.
We've actually got a local guy, somebody that's a current investor. He's committed 200k. He's asked to close sometime towards the end of August so we're in a little bit of a waiting game with him. In my mind at least, sets the stage and it shows that the willingness in the market is there. He really recognizes what we're doing. No money in the bank yet, but we do have some commitments from him. I actually have another group that's looking to come in potentially, so I'm excited. I think discussions are going in the right direction. I think Nepra is on the verge. It's absolutely on the verge of taking off in a meaningful way. So, I hope that I've been able to communicate that to you all.
And again, I really appreciate you all coming on and I've proven once again that I can ramble on forever. So, I will let you have the rest of your evenings and wrap this up. But please continue to reach out to me. Many of you on this call. Some of you are friends and some of you have become friends. And please continue to reach out to me, continue to ask me questions. I love the support. I want to be as engaging as I possibly can. I apologize if I don't get back quickly enough in some cases. I don't sleep much. I run pretty much 20 hours a day. But I'll do my best to get back to any one of you as quickly as possible. But again, thank you. I hope you all have a great, great evening.
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