Hi, everyone, and welcome to this Agilyx half year webcast hosted by Arctic Securities. My name is Ivar Dittervoll, Equity Analyst here at Arctic, and will moderate this session. With me today I have the CEO, Tim Stedman, and CFO, Russell Main, will soon take you through the presentation. After the presentation, we'll move on to Q&A, so I urge you all to use the chat function on the screen to submit questions. With that, I think we are ready to begin, and I leave the word to Tim.
Thanks, Ivar. Appreciate it.
Yep.
Welcome everybody to this call. Really pleased that I can be with you today to walk you through our first half results and highlights. You know, I think the key thing to take away from this is one of continued growth and development. What we're gonna show you is a step change in revenue, largely driven by the success of moving forward with the project with Toyo, but also with the build-out of Cyclyx, something that we've talked a lot about, but now you're beginning to see the real facts within that. I also wanna highlight, though, that there's the booked revenue, which is already a substantial step up, but keep an eye on that deferred revenue as well. It's a substantial number in our results, and we'll talk more about that later.
The other thing that's very exciting in terms of the development is really the build-out and validation of the business model. There's a number of signposts within this report about that, but let me just pick out a couple. Firstly, the Technip Energies announcement. This is a huge point of validation, and one that I'll expand upon later, providing the basis for real acceleration of the business as we access more markets through very, very big and substantial partner. The second thing in terms of validation of the business is everything that's happening in Cyclyx, but, you know, let me pick out the Cyclyx Circularity Center, this really state-of-the-art, unique processing center that was designed for chemical recycling.
Two and a half times larger than what we had previously said it was going to be, and linking in that to substantial accessing to material through take-back programs. We're also continuing to grow our Agilyx business development pipeline. You'll see within that that there's real momentum happening there, and we're seeing credible, more and more credible companies coming into that, as well as important partnerships, like Technip Energies. Finally, in terms of our development, the getting ready for uplisting. We'll give you an update on where we are there, but again, very positive movement as we continue to develop. Step change in revenue, building out the business model, pipeline growth, and uplisting. All things that we think are the highlights of this first half.
Let me just move on, though, and maybe just take a step back, first of all, 'cause I think it's good to just reconnect with, yes, the first half has been good. There's lots of really credible things happening. Let's also keep an eye on where we're going. I think it's important to keep in mind the huge opportunity that is created by the significant challenge of waste plastics, and that's what's captured on this page. I'm not gonna go through it all, because I think a lot of people recognize it, but our integrated solution is the key to maximizing the opportunity for us as Agilyx and Cyclyx. What does that mean?
Well, I'll build it out a little bit more as we go through the presentation, but the reality is that you need to do four things to make chemical recycling a reality. You need to be able to source material. You need to be able to process material. That's what exists within Cyclyx. Then you need to be able to convert the material that comes out of that and purify it. That's Agilyx. We believe we are unique in having the integrated solution, all four of those elements as part of our offering, and the proof points that we've been developing over the past months is just further endorsement of that. With partners, with significant kind of contribution and engagement, we believe now we are at that point of entering significant growth.
When you think about this issue of waste plastic, the question is, well, why isn't everybody else doing that? What you've seen in the industry over the past really couple of years as this has gained momentum is a point where everybody is focused on the third one of those stages, the convert bit. I have to have a technology that converts waste, because of course this waste is readily available, and it's free, and we'll be able to get at it. The simple reality is that while we've been developing, you know, over the past period, but especially in the last six months, the industry as a whole has come to the recognition, some would say belatedly, others got there earlier, that actually this bit about easily getting access to waste is slightly more complicated.
This picture is trying to capture that, because the reality is the existing waste industry today is really only accessing about 10%-15% of plastic waste. That material is being processed through existing facilities, but really those being focused predominantly on mechanical recyclers. Some of that material is then being competed for, especially by customers, conversion customers, who need cleaner waste. We're seeing this kind of challenge going on. The material is theoretically there, but I can't access it at the right price in the right quantity. I'm competing with mechanical recycling, something that chemical recycling cannot win at. What Cyclyx and Agilyx are really trying to do with our customers, and this is the piece that ExxonMobil saw, is we're trying to get after the 85%-90% of waste that is not being captured. That's what we're after. That creates the opportunity.
That creates the economics and the availability. How are we doing that? Well, what I'm trying to lay out here with this slide is what I now call our roadmap for integrated recycling. Because, again, you've gotta have all of these various stages. If you only focus on one, then you're unable to optimize the whole, and you will struggle either with availability or with cost, getting the right material, and actually being able to make it happen. Let me walk you through this page, 'cause it starts with what's happening on the left-hand side. If you can't get access to the material, if you can't source the material, then you're always gonna struggle. What Cyclyx is doing is focusing on 10 to 90 as our mission brand to drive availability of material, to get all plastics into the system.
Too often, existing systems are focusing on certain types of plastics. No, we want all of it. We're focusing on developing new waste plastic diversion programs, whether it's at the corporate level, the retail level, residential, residual. Access that material, bring it into the system. You can only do that when, on the right-hand side, you've actually got credible customers and partners who can take that material, and that's what we've built out with Cyclyx. You've got to have that consortium enhanced with, you know, the likes of Exxon now. Exxon needs a cleaner feed. It's in that top right-hand box. What they bring is scale.
They bring the capability, along with our consortium members, to go to places like the city of Houston and say, "Okay, we want to do this new waste diversion program." Whether those customers are the likes of ExxonMobil or others of our consortium members, or whether they're customers of Agilyx conversion technology, they all have a role to play in supporting what's happening on the left-hand side of this diagram. Now, as you start bringing those two pieces together, then what you need is the centerpiece, the Cyclyx Circularity Center.
You need something that is big enough, is efficient enough, and is designed for really enhancing moving the plastic to its right, optimal location, whether that's mechanical recycling, whether it's the cleaner end of the chemical recycling sphere, people like Exxon, whether it's programs or customers of ours in our conversion technology, even down to specific plastics like polystyrene. These systems will be super efficient, super tailored to anchor customers, and allow us to get the right material at the right quality at the right specification at the right price to enable chemical recycling to thrive and grow at the kind of scales you're gonna be seeing about. Okay, that's the roadmap. Well, a roadmap, if it's gonna become real, it needs signposts.
You know, these are some of the signposts that we have been laying out over the past months, and I know that sometimes when there's announcements coming out, you know, it's sort of in absence of context, it's difficult to see that. Hopefully, this model is gonna be helpful to you to be able to understand as these signposts come in, and others, you can start seeing how this now builds the credibility and the reality of the opportunity around this integrated model. Let's start on the left-hand side with one of the most recent ones. Virgin Red. You know, what is Virgin Red doing stuck in here? This is an established, significant rewards program.
Well, what Virgin Red has seen is the opportunity to work with us and our consortium members in Cyclyx to drive behavioral change, to incentivize behavioral change in terms of driving this access to material. You're gonna hear some more about take-back programs and various things in the, in the coming pages. What Virgin Red is, it gives us. It sort of turbocharges it. Turbocharges it with their substantial brand presence, with their capability, existing applications. We're not developing something new. We're leveraging something existing here. It also creates opportunity to look at how do you generate revenue from this.
Because these programs have substantial revenue generation capability in terms of the reach that they have, how many people you can touch, and how you can actually bring in, whether it's sponsorship programs, whether it's pay-to-discard programs, all kinds of other things that allow you to explore revenue generation to help build out the system and drive the next stage of growth. In the middle, I'm gonna talk more about the Circularity Center in the coming pages, but you know, this is a real statement of faith with our sponsors for this, that we originally looked at this being a 60,000-ton-per-year system, and it's now 150,000 tons per year. This is huge. This will be one of the biggest advanced plastic processing facilities, if not the biggest, anywhere.
It will be unique in that it's purposefully built for anchor customers to be super efficient for them to drive volume growth and to be able to access the maximum amount of material to put into recycling to drive 10 to 90. The last one I wanted to mention on here was the launch of TruStyrenyx, and I think there may be a little bit of confusion here around what this means. Let me just talk to you about Technip for a moment. Technip Energies is by far the leading company in the space of styrene licensing. Now, what does that mean? The global styrene market is somewhere in the region of 35 million tons of installed capacity. Technip has 35% of that. If you look at key geographies, they are over 60% in countries like the USA and in South Korea.
I say North Korea, that's sort of Freudian slip, South Korea. South Korea. You know, the importance of that cannot be overstated because they have huge access, they have huge credibility. Their opportunity to be able to go to the market, they've got many times the number of people we have, and put their stamp on this to say, "We believe it. This is our integrated solution." TruStyrenyx is their brand name. That has huge potential, not only for enhancing our existing pipeline, where customers will go, "My goodness, Technip Energies is bringing this," but also in terms of future growth in the pipeline. Part of that is because they integrate together. I said four steps, source, process, convert, purify. In polystyrene, we are now unique in that we have all four of those steps.
That allows us to go after material that nobody else can touch in the recycling world. Flame retardant laden, building and construction firms. This is a reality. You can take it and take it back in one plant to pure styrene going after all the derivatives. The fact that they are putting their name on this, they are going to be launching it at their conference in Barcelona in three weeks time. This is a hugely impactful step, and one which, we believe we are only just at the very beginning of seeing the opportunity from. Let me move on. Let's talk about take back programs and the 10 to 90, you know, accessing that material. A few months back, we talked about the City of Houston program, and we had some initial companies involved, so obviously the city itself.
We had ExxonMobil, LyondellBasell, so two of the largest plastic producers in the world, FCC Environmental Services, a waste company, saying, "We are going to work together with Cyclyx as the program manager to drive recycling in the City of Houston." City of Houston probably recycles somewhere in the region of 4%-5% of the plastic today. That model I gave you earlier, actually let's say there's a bigger opportunity here. 5+ million people, so really significant numbers, and very closely tied to the petrochemical industry. The whole concept here is to build it, demonstrate it, and then replicate it. Once you've done it here, we already have significant interest from other significant cities across the U.S. What are we gonna be doing? Well, corporate take back programs.
Again, all of this can be driven and supported by the Virgin Red program, but you link in with local companies like ExxonMobil, LyondellBasell, and others. Our current Cyclyx membership actually has over 400,000 employees within it. Let's leverage them. That's the whole concept. Work with them to be able to access plastic, to be able to incentivize with the Virgin Red and drive that step upwards. Retail programs, obviously working with the big retail outlets. One of the most exciting things here is, you know, working, getting access to the Houston Independent School District. That's 280 schools. We're trying to access plastic, but we're also trying to change behavior. This is super important. The other one I just wanted to mention was Kingwood. For those of you who know Houston, Kingwood is a city within a city.
It's a fairly affluent part of Houston, and effectively what the City of Houston has done is has said, "Look in Kingwood, try everything. Use it as the sandbox that we can play in together to actually really drive this experiment, then expand, bring it out to other places." We've been given unique access in this very, very important and now very forward-looking city with a political leadership that is wanting to make changes and an industrial heft behind that is prepared to make it happen, and all of that being enabled by Cyclyx. On the Circularity Center, now some of this came out the other day, but this is a very important step.
We have been provided advanced funding to drive through the engineering and design and kind of acquisition of some of the long lead time equipment to the tune of just under $50 million. Just under $2 million of that has already been received. This is all about driving this project forward, getting it into construction, getting that capacity set for 150,000 tons. Now, some people jumped on the fact that actually, you know, it's gonna take a little while longer. Well, this is now a big project. When you start thinking about that scale and you start thinking about the number of truck movements that need to happen to make it work, yeah, this is complicated, but none of it is actually kind of a technology risk.
We're going to be working through that with our partners who are financing this. In the meantime, we've actually set up dedicated tolling to actually, if you like, mimic the first stage of that and get us moving into the right direction, building the scale up that will then eventually move into the Circularity Center. Critically, this will take all plastics, and it will provide a compounded output for those people that need it in order to enable that chemical recycling. Now, the precise breakdown of what it will provide is gonna be subject to the work that we're doing on things like that take back program that we were just talking about.
We anticipate that the split is gonna be somewhere in the region of 30% being available to mechanical recyclers, so in other words, boosting the mechanical recycler available within the Houston area, which opens up further partnerships and opportunities, and then 70% going to advanced or chemical recyclers. Different types, you know, so people taking different qualities. Now on the Agilyx side, we're continuing to build out our project pipelines. We've got a snapshot here of the pipeline broken down between scoping, feedstock testing, and development, construction and licensing, and operational on the left-hand side. We continue to see huge interest in these projects, and we're doing a huge amount of work around really focusing on the prioritization now on where do you go to drive projects as rapidly as possible into construction and licensing.
You know, let's recall our job is not to develop projects in terms of, you know, the early stage of engineering. I mean, it's interesting, it's good. The real fun starts when you get licenses, which are super high margin, and construction, when you get the revenue from construction projects and the margin associated on that. We've now built out this pipeline that is allowing us to truly focus in on where are the things that can drive that. That's what we're doing. There's a huge potential beyond that. You can see the project capacity increase, I mean, you know, up 1.8 x between now and a year ago. Of course, all of this is largely before we've started leveraging TruStyrenyx.
Now, that's not to say that Technip Energies's not already working with us on some projects, and that has been enormously impactful. The TruStyrenyx thing, leveraging Technip Energies's sales organization to actually drive this and leveraging these initial projects that we've done to be able to go out and go fast, that's still for the future, and that is really, really exciting, and that's something that we're very, very focused on. Let me hand it over to Russ to talk about the financials and the over the next couple of pages.
Thank you, Tim, and good morning, everyone. I'm excited to be here today. Thank you all for joining. I just wanted to give a couple highlights from our first half financial results, and also just reiterate that, our results are now under the IFRS standards. Our half year report for the half year results, as well as you'll see in the appendix in our report that we've included the restated IFRS results for 2020 and 2021. We are now well prepared to report under IFRS going forward, and the team is really excited and we've been through a large process to get here.
Also to reiterate that our prior years results have been audited by RSM and the half year report you're seeing here for 2022 was reviewed by RSM, but not audited. I just wanted to make that clear to everyone. Let's get to the highlights. As Tim mentioned, we had a good step up of revenue year-over-year for the first half of 2022, getting to a revenue of $7.8 million. The composition of that revenue was $5.1 million of that was due to our sale of feedstock to our consortium customers. We also in our construction sales of Toyo Styrene $2.1 million, and then various project revenue of half a million dollars.
One of the things I'd like to iterate here is that, on the project development revenue of $ half a million, you'll see, and you've seen in the past, that project development revenue can be quite lumpy over time. In the first half of this fiscal year, we have finished up various projects in various phases of development, and we are now kicking off some of those new phases, and there is a little bit of lag time in between the FELs, as we've explained before, where customers are getting prepared to go. They look at our report, and then we go into the next level of developments, which you'll start to see in the second half of the year.
That is always quite lumpy, but we feel very confident that everything is on track, as you saw in the previous screen, where our project development pipeline is quite robust. Those you'll see moving into various phases in the second half and into next year. Also, I want to reiterate, as Tim mentioned earlier, we do have a solid amount of deferred revenue on our balance sheet, $7.5 million. That is commitments made by customers to move forward. That revenue will come in and be recognized in the future. What is important to know here of that $7.5 million, $5.1 million of that is Toyo Styrene. That will continue to be rev rec during the course of this fiscal year, which is quite positive.
One thing I wanted to mention too is I'm sure a lot of folks have questions, and we've already seen some questions on the negative margin that we booked in the first half of this fiscal year. It's due to several things. One, let's talk about Toyo Styrene. First of all, when we start that project, some of the initial rev rec is on long lead equipment that is very low margin. It's the smaller things that we have to order right away so that we meet our timelines. As this project moves on, we have very healthy margins with this project and as we get into the core equipment, the pyrolysis unit and other things like that, we have really solid margins on that.
Good news that I want everyone to understand, if we do have cost overruns, and that is with this current environment with the supply chain being so volatile, in our supply agreement with Toyo, we can charge back any cost overruns. We have our margin protected in our agreements with them, and we'll continue to monitor that as we move forward over the next year in this construction phase. A lot of good work here, and I think you'll see a lot of improvements there.
On the Cyclyx side, a lot of the negative margin is due to the fact that as we're looking at various sources of feedstock for our consortium customers, we incur a lot of costs up front to, one, have our sourcing team out there identifying sources, testing those sources, doing the chemical characteristics and testing of that source to see if it's even something we can use for our customers. That burden cost is hitting our P&L currently, but as we continue to drive sales in the Cyclyx organization, that will start to be offset in the future and start to even out.
You're seeing a lot of negative margin currently, but we believe that investment will pay dividends over the course of the next few months and half year as we start to recoup those costs and start to sell feedstock at a, you know, at a cost plus as we've always talked about to our customers. That is part of the reason why you're seeing some of the margin deterioration in the first half of this fiscal year, which we believe will start to even out going forward. On a cash perspective, you can see we started the year at $19.5 million. In March, we were at about $13.1 million. In June, it's kind of leveled off.
You're starting to see the impact of our cash burn being reduced by good internal cash being generated by construction and other projects. We feel, still feel very confident that our liquidity is strong, and we're in good shape for the up listing. Just wanted to get that point out to everyone, and the business is continuing to monitor our cash balances and spend as we move forward.
Lastly, I'd just like to reiterate that we are clearly focused on revenue growth and margin growth, and how we're going to get there is, as Tim said, selling project licenses, which are very high margin, driving projects into construction, which gets us to this really pinnacle point where we start to have significant revenue at great margins, and then also continuing to build out the Cyclyx organization for success, as Tim just went through in the various slides. A quick update on the up-listing. The business has been going through a lot of preparation to meet our target to up-list in September. Couple of the milestones, we were able to convert the business to an ASA. That is really a key first step for us to be up-listing ready.
We've been through the audits of our IFRS financials, which you've seen. We've filed our first draft prospectus with the NFSA, and we received the first comments back from the NFSA, and we're about to submit our second submission to the prospectus by the end of this week. Well on our way to success there, and then it's just a matter of getting through the final reviews with the NFSA. We've gone through the legal and financial due diligence. That's completed. We still believe we are on target to uplist during the month of September.
Okay. Thanks, Russ. Maybe just to sort of wrap this up. First of all, you know, we are restating we're sticking with our revenue target of $200-$300 million by 2025, 2026. You know, you see at the bottom of the page the breakdown on what that means sort of operationally. Maybe it's best to focus back on, you know, what are we trying to do this year? What is the focus this year? Well, first of all, it's continuing to deliver one new project into development per quarter on average, so four in 2022.
As we talked about, one of the key things we are really laser focused on is picking the projects that we believe we can drive into licensing and construction, and of course doing that now in conjunction with Technip Energies and TruStyrenyx, which gives us a huge additional lever. We're not done on that side. We're looking at where else we can build technology type relationships that can further enhance our broader offering. We're also looking at, how do you develop alternative sources of funds to accelerate projects? Really what I mean there is around the construction phase. You know, how do we bring in things like infrastructure investors to actually help us develop these projects into construction in a much more rapid way and predictable way?
On the Cyclyx side, you know, while we've delivered a step change in volume, and we've expanded membership, but actually we're still at the beginning. I mean, when you look at the long-term potential, there is so far to go on Cyclyx, just in terms of the capability we've got with this first Circularity Center, and I emphasize that, first. We have absolutely no intention of this being the only, and ExxonMobil and our other partners are wanting us to drive more. This is a super exciting first step to have this Circularity Center.
It's the first of what we want to be many because this will drive the dedicated processing facilities that will drive the efficiency, that will allow us to drive the volumes, that will give us the capability to extract revenue, whether that's from developing these systems, because they're a little bit analogous to the Agilyx ones, slightly different but not too far away, but also deriving revenue from the 10 to 90 type initiatives, and of course just lowering feedstock means that Agilyx gets those royalties, which are obviously super high margin.
A very exciting prospect for the rest of this year and beyond, built off what we believe is, you know, a really substantial first half, delivering those step changes on revenue and volumes with Cyclyx, building out and proving the business model, developing the pipeline of Agilyx business to run so we can now focus and prioritize and leverage TruStyrenyx, and getting ourselves set for up-listing. With that, thank you very much for your attention, listening to us present. What I'd like to do now is hand it back over to Ivar so that we can go to Q&A.
Thank you, guys, for an interesting presentation. I think it's time to move over to Q&A. We can start with the first question here. With regards to the announcement on Monday, where you announced that Cyclyx has secured $15 million in funding for its first plastic recovery facility, can you say anything about how much this is of total CapEx for the project?
We're not gonna give the total number, but it is a substantial what is referred to as an advanced approval to cover both the full engineering, so if you like what we talk about with the Agilyx models of the FEL one, two, and three, but also going beyond that, and that's what's really important, the willingness of our partner to actually put money down now to allow long lead time equipment to be ordered. That gives you a sense of their, you know, they've got to follow their process, and they're a big petrochemical company, so they have lots of process. But the fact that they've made that step is very, very significant. Let's just say it's a substantial contribution to the whole amount.
that whole amount, we anticipate being able to say more about in the not too distant future.
Thank you. Over to the next one. Will offtake partners take CapEx, or should we expect to see other sources of funding as well, such as infrastructure funds? I guess it's for the PRF.
Yeah. Well, I think actually it can be more general than that. I think it's an excellent question, and it's one that we believe has significant opportunity. Because the answer is both. I know that may not be very helpful, but let me explain more. You know, there will be situations where the strategic partner, beneficiary if you like, is the one that wants to leverage their capital. There's a number of them that have a lot of cash at the moment and so they want to do it themselves because the returns are such that that makes more sense for them.
It's very clear to me as well that there are others in different parts of the value chain where capital allocation is a challenge, and therefore where there is the opportunity, whether it's the Circularity Center or in conversion projects, for infrastructure dollars to play a role. Because some of those strategic partners would rather sign an offtake agreement, and we've certainly seen plenty of them do that, they'd rather sign an offtake agreement than actually spend capital on a project, whether Circularity Center or whatever. I think the reality is that it's gonna be a mixture. What I see is, as this starts developing, then the speed is gonna become like a you know sort of stone rolling downhill. It's gonna build momentum. It's gonna build an approach.
Actually, I think it'll probably continue to be a mixture of both. Don't forget, not in this presentation, but in one that I released just a few weeks ago, there was a number in there from McKinsey, on a study that they've just done that said that, something in the region of $40 billion needs to be spent on advanced recycling, before 2030. Actually, there's another report that they've done, which wasn't in that release, that said there's probably another $5 billion that needs to be spent on something which is basically the Cyclyx Circularity Center. They couldn't call it that, but that's what it was.
There is vast amounts of money that need to go in there and so of course it makes sense to be looking at every single source, and we are actively doing that to enable that. Going to those kind of sources with Technip and TruStyrenyx is huge, is absolutely huge, because everybody in this industry knows who Technip are. You know, hopefully, that's a long answer, but hopefully it's helpful.
Yeah. They increased the size of the PRF from 60,000 to 150,000 tons. Is it due to increased demand from one of the offtake partners or new offtake partners?
Let me be careful because there's only so much we're allowed to say. I would just say that there is increased interest from pretty much everybody. People are wanting a part of this. You know who our major partner is, and their objectives are extremely significant. I think they've talked about, you know, 500,000 tons in just a very short number of years' time. This is the beginning step of many.
It has the credibility of the Cyclyx consortium behind it, but anchor members who are really driving this, and they are basically seeing Cyclyx as the sort of linchpin, if you like, for developing not only the Circularity Centers, but also how do you get the waste to feed them, and how do you then program them to get the right waste to the right customers? This is a very substantial first step, but it's just a first step.
Good. Should we expect to see meaningful royalties from the first PRF?
Well, I mean, the royalties are tied to volume, so yes, as the volumes go up to what we're talking about, then you're gonna see the impact of those royalties in there.
Do you see yesterday's announcement as a step change in the collaboration with Technip Energies? Can you elaborate a bit around the importance of this partnership?
Yeah, I mean, it is absolutely a step change. I mean, this is Technip Energies, who are, as I laid out earlier, the global leaders in styrene technology. I mean, they have instant name recognition in all of that industry and beyond. That is them going to their kind of preeminent event, global event, and basically saying TruStyrenyx is our Technip Energies' integrated solution for polystyrene to styrene recycling. Put a different way, it is the first new way of making styrene that has been developed in 40-50 years, and they are putting their stamp on it to say, "We are backing it. We are behind it. Oh, by the way, we are branding it, and we are selling it." Yes, it is huge, and it is just the beginning. Yeah, if I am excited about it?
With reason, I would say, because, you know, they have thousands and thousands of people, they have huge brand recognition, and they're now developing and pushing TruStyrenyx as the integrated brand. We will be pulled along with that and supporting that, providing the core conversion equipment and the support from Cyclyx, and they provide the purification and the capability that that then allows back through the system. It's a very, very powerful story, which maybe because this technology isn't always obvious, but the scale of these guys, I mean, more than 60% share of the capacity in the USA alone, it's just huge.
Jude, how do you expect cost inflation to influence your license business? Will you be able to transfer the additional costs over to your customers?
Yeah. Well, I think Russ mentioned that in his point that we have that within contracts, you know, we're not exposed to that. If cost of materials goes up, that gets passed through. I think you know that's very solid. You know, the full impact of inflation in terms of what that means, clearly, that's still yet to be seen. We think that we're in a very good position with regards to that in terms of our contracts, but also frankly from being an asset light company.
Yes, your costs may go up, but if you're an asset light company, it's not like you've got, you know, you're running two or three plants where you're getting that cost on every single item there, even if it's not core to what you're doing. Again, we see this as something that maybe puts us in a more advantaged position as an asset light company.
Jude, will Cyclyx members be paying annual membership fees to Cyclyx in addition to the per volume royalty payment?
Yes, that's the model. The model is to work with Cyclyx, you have to be a member. You know, we haven't shared precise details of that, but you know, success breeds success. As this mechanism drives further forward, then that's going to allow us to you know, look at that revenue model. I think this is the piece about Cyclyx. Right now, the focus of revenue is on sales, you know, volume going through, material sourced, and we process it with third parties and we sell it and there's a royalty. But there's so much more, because this membership piece, I mean, today we've got over 30, we're talking with more than 300 people, some really exciting ones coming through. That is a source of revenue.
To be honest, the Circularity Centers and the take back programs, the working with Virgin, these are very, very significant future sources of revenue that we are very focused on developing because we are extremely keen to diversify our revenue base and to be able to ensure that we are able to sort of monetize the various activities we've got in terms of enabling the industry to be able to move forward in this way. So, the, you know, I know that there's not a lot of detail there, but there's a lot of potential.
Jude, over to the next one. You have a huge pre-development pipeline.
Mm-hmm
With 67 projects in predevelopment.
Mm
16 in development.
Mm-hmm.
They are big numbers and impressive, providing a path to a strong growth rate currently. Do you think that the company, through partners like Technip, could even accelerate the current growth rate by increasing the number of projects moving into development and construction?
Yeah. So it's a great question. It's one that we sort of I was kind of anticipating this and thinking about the right way to contextualize this. It's unambiguous in my mind that as TruStyrenyx develops, that we are gonna have to look at some of the things that we talk about in terms of our metrics and objectives. Again, focused on where does the money come? You know, feedstock testing is nice, it's okay, it's great, you know. The early stage of engineering, likewise. The big money is at the end. The big money is in construction and it's in licensing.
You know, what we're trying to do right now is leverage both our own knowledge of the pipeline, but also the TruStyrenyx to say, how can you drive that? How can you accelerate that bit? Because I'd much rather focus on, you know, one additional project going into construction than 10 projects going into development. Because the one project in construction, it brings, as we've seen with Toyo, brings that step change in revenue, but it's also the credibility that it brings and the growing out of that business model. Yes, absolutely. This can help Technip can do a lot, and it can have a broader impact than just on the TruStyrenyx piece.
Our focus is on getting into construction and getting a license, because the license obviously is just, you know, super high margin.
Good. On to the next one. Are you still targeting two additional projects into construction this year?
Yeah, what we'd said earlier was 2 projects into license or construction. I mean, the focus is on moving that forward. We're absolutely completely laser focused on that right now.
Good. The last question here, by when are we aiming for a positive EBITDA?
We haven't disclosed that, but I think it's, you know, we're asset light, so you can understand our cost structure today. There was a step-up in the cost structure last year, which we told everybody about, which was around, you know, developing Cyclyx. You can see what our future revenue target is. You know, there's, I think there's enough to kind of make some good estimates of when that crossover is, but we have not confirmed that ourselves. We are driving very, very hard again, focus on licensing revenue and construction revenue as being the two things that, in the short term, drive us towards that point as fast as possible. That's unambiguous. Those are the things that do it. Then over the longer term, there's these other revenue sources that will come through.
The broadening out of the Cyclyx ones, obviously things like the Circularity Center, which is somewhat analogous to the programs in Agilyx, the Take Back programs. All of those things are gonna be accretive to that story. You know, we're focused on that. That's what it is, you know, really what we're looking at now as opposed to kind of, you know, talking about hypotheticals in a number of years' time because we know that if we deliver on the now, those things will take care of themselves.
Very good. I think we have covered the incoming questions. Thanks to the Agilyx team and to everyone for joining here today, and I wish you all a good day.
Thank you very much. Really appreciate it.
Thank you all.