Ladies and gentlemen, thank you for standing by. Welcome to Evogene's Second Quarter 2023 Results Conference Call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded on August 17th, 2023. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogene's management will constitute forward-looking statements that relate to future events, risks, and uncertainties regarding business strategy, operations, and future performance and results of Evogene.
I encourage you to review Evogene's filings with the U.S. Securities and Exchange Commission and read the note regarding forward-looking statements in today's earnings release, which states that statements made in the earnings release, and in a similar way, on this earnings conference call, that are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For example, Evogene is using forward-looking statement in this call when it discusses the establishment of collaboration agreements with leading companies in new domains of activity.
TargetSelector ability to identify novel target proteins for innovative products, the BMC426 and BMC427, for IBS treatment effectiveness in reducing visceral pain and related studies and trials, future milestone payments and royalties from Corteva sales of Lavie Bio's products, the resources needed to execute the company's plans effectively and in a timely fashion, return on investment for farmers who use Thrivus, and the enhancement of AgPlenus ability to identify new pesticide mechanisms due to the use of Evogene's TargetSelector applications. All forward-looking statements made herein speak only as of the date of the announcement of results. Many of the factors that impact whether forward-looking statements will come true are beyond the control of Evogene and may cause actual results to differ materially from anticipated results.
Evogene is under no obligation to update publicly or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. Except as otherwise required by law, we expressly disclaim any obligation to do so. More detailed information about the risk factors potentially adversely impacting our performance can be found in our reports filed with the U.S. Securities and Exchange Commission. Starting the call today is the President and CEO of Evogene, Ofer Haviv, joined by Evogene CFO, Yaron Eldad, CEO of Casterra, Eyal Ronen, CEO of Lavie Bio, Amit Noam. That said, I would now like to turn the call over to Ofer Haviv, President and CEO of Evogene. Mr. Haviv, please go ahead.
Thank you and good day, everyone. Today, I will review Evogene's activities and recent achievements and provide you with an update on Evogene's potential catalyst expected in the near future. I will also discuss some of our subsidiaries' recent accomplishments, which leverage Evogene's AI-driven tech engines as the main competitive advantage and demonstrate the power of our technology, underlying their product development process. I will end my part reviewing Evogene's recent fundraising and how it improved our financial stability. I would like to state that the second quarter of 2023 has been a remarkable one. We made significant achievements on all fronts. I hope that you will share this view at the end of our call. As we have many new listeners on today's call, I would like to briefly review Evogene's core technology.
Evogene has been using its professional predictive biology platform, the PDB, to direct and accelerate the discovery and development of life science-based products. The PDB is the foundation of our three tech engines. MicroBoost AI supports the discovery and development of micro-based products. GeneRator AI supports products based on genetic elements, and ChemPass AI supports small molecules-based products. Our AI-driven tech engines aim to tackle the main challenges in life science product development, identifying winning candidates from a large number of prospects and meeting complex criteria for successful commercial products. Our AI-driven tech engines efficiently find the needle in a haystack, therefore increasing the probability of success within a competitive timeframe and at a cost-efficient manner. On July, we unveiled the latest enhancement of our ChemPass AI tech engine, TargetSelector, a groundbreaking application designed to streamline target protein discovery using predictive machine learning algorithms and genomic data.
With this new technology, researchers across various industries can efficiently identify novel target proteins for innovative products, while significantly reducing research and development time and resources, and increasing the likelihood of success. Proteins are crucial for developing therapeutic and life science solutions and play a pivotal role in biological processes across pharmaceuticals, agriculture, and environmental applications. As mentioned, ChemPass AI tech-engine is a cutting-edge platform for the identification of small molecules. The addition of the TargetSelector application now enables a broader scope of finding the optimal target protein for those molecules. Our subsidiary, AgPlenus, which focused on developing [inaudible], is the first to benefit from this new improvement, applying it to identify novel mode of action for pesticides.
We consider this significant investment in Evogene ChemPass AI tech engine, to strongly position us to forge strategic partnerships with industry leaders, expediting product development, and delivering novel solutions to pressing global needs, such as developing sustainable new pesticides and therapeutics. Evogene's business model is to establish a product development ecosystem around each tech engine through two main business structures: Independent subsidiaries focusing on specific life science market segments with the license to use Evogene tech engine for product development or a joint development with leading companies for defined products utilizing Evogene tech engines. Typically, partners lead later stages of development and product commercialization. In recent years, our focus has been on the establishment of various subsidiaries, that nowadays show impressive results, which I will soon discuss.
I would like to emphasize that this year, Evogene increased its efforts to establish collaborations with leading companies in new areas of activity not covered by our subsidiaries for product development, leveraging our tech engines. Those just recently initiated, the response we received to our unique offering is positive, and we hope some of those discussions will materialize into collaboration agreements in the near future. With respect to our subsidiaries, they have accomplished multiple achievements and have several upcoming milestones of significant potential value creation. I would like to start my review with Biomica, a subsidiary of Evogene, that is developing microbiome therapeutics for human health. Biomica leverages Evogene's MicroBoost AI tech engine to identify and characterize microbes with therapeutic potential. In April 2023, Biomica completed a $20 million financing round, led by a $10 million investment from Shanghai Healthcare Capital.
The transaction was done at a post-money valuation of $50 million. This external and independent endorsement of Biomica validates our belief in Biomica's long-term potential. Biomica's leading product candidate, BMC128, is for the treatment of immune-related patients, now in phase I clinical trial. The trial, conducted in Israel at the Rambam Health Care Campus, aimed to evaluate BMC128 safety and tolerability alongside BMS Opdivo immunotherapy for respiratory patients with NSCLC, melanoma, or RCC. The trial is planned to include 10 to 12 patients, and up to now, six have enrolled. In August, Biomica opened a second site in Israel at the Davidoff Cancer Center, to open the trial to additional potential patients. In addition, this quarter, Biomica reported positive interim results for its IBS program preclinical studies.
The studies were performed in collaboration with the lab of Professor Kara Grossberg-Margolis at NYU, and demonstrated the efficiency of Biomica's live bacterial consortia, BMC426 and BMC427, in reducing visceral pain, a major IBS symptom. Given the limited options for IBS treatment and the significant unmet need, these findings present promising new treatment possibilities. Biomica intends to further assess BMC426 and BMC427 efficiency in additional preclinical studies in the near future, in preparation for its clinical trial for IBS. The second subsidiary, which is also using Evogene MicroBoost AI tech-engine, is Lavie Bio, developing next-generation biological products. In addition to Evogene's majority ownership, we are happy to emphasize that Lavie Bio has two additional major shareholders, Corteva, a public multinational AgTech giant, and ICL, a public global mineral and an AgTech company, which last year made a $10 million investment into Lavie Bio under a SAFE agreement.
In addition to equity investment, Corteva and ICL are also collaborating with Lavie Bio on the development of novel agrobiologicals. In July, Lavie Bio announced that it entered into another licensing agreement with Corteva. The agreement grants Corteva exclusive rights to further develop and commercialize two of Lavie Bio's lead biofungicide product candidates, LAV311 and LAV312, targeting fruit crops. The agreement follows three years of independent field validation trials conducted by both companies. Lavie Bio is set to receive an initial payment of approximately $5 million in two installments, and will also be eligible for additional future milestone payments and royalties from whatever sales of those future products. Stay tuned to hear directly from Lavie Bio's CEO, Amit Noam, as he shares in-depth insights into this remarkable achievement and other ongoing activities. Now, I would like to review AgPlenus, our subsidiary leveraging the ChemPass AI tech-engine.
AgPlenus aims to discover next-generation innovative crop protection products, including herbicides, insecticides, and fungicides, and commercialize them through collaboration with world-leading partners. Major ag chemical companies such as BASF, Bayer, Corteva, and Syngenta, dominate today's crop protection industry. They look to smaller ag tech companies like AgPlenus to discover new target proteins and small molecules that inhibit such target proteins, serving as the active ingredient in commercial crop protection products. AgPlenus is exactly the company that addresses this need, and it explores partnerships with these major industry players. The need for new crop protection products is enormous due to the growing resistance of pests and weeds to existing commercial solutions. Herbicide-resistant weeds today are flourishing, and there has not been a new commercial herbicide with a novel mode of action for over 30 years. AgPlenus looks to change that.
There is a growing interest in AgPlenus's product pipeline, especially in our leading target protein, APTH1, and the small molecules that bind to this protein as candidates for a novel herbicide with a broad weed control spectrum. We hope to update in the future on strategic collaboration based on APTH1. As I mentioned earlier, the new application, TargetSelector, that is now part of our ChemPass AI tech engine, which serves as the infrastructure of AgPlenus's technology platform, will allow the company to accelerate and improve the identification of novel modes of action for pesticides. I expect that this significant advancement will better position AgPlenus to forge strategic partnerships with industry leaders. I would like to congratulate Dr. Adrian Percy on joining the AgPlenus board of directors. Dr. Percy is a highly accomplished agricultural scientist with over 20 years of experience in the industry. Dr.
Percy also serves as a member of Evogene's board of directors since 2019. We wish both us good luck. Before I move on, I would like to encourage you to review AgPlenus's new presentation, available on AgPlenus and Evogene's website. I will now review the activities of Casterra and Canonic, our subsidiaries that utilize Evogene's GeneRator AI tech engine as their main technological advantage. Starting with Casterra, which reached a major milestone in the last quarter. Casterra focused on developing an integrated solution to enable large-scale commercial cultivation of castor beans through its unique elite seed varieties. The goal of Casterra is to address the global demand for a stable castor oil supply, mainly for the biodiesel industry. The past few months were pivotal to Casterra.
Our vision of becoming a major player in the biodiesel industry progressed with seed orders from a world-leading energy and gas company, totaling $11.2 million for castor cultivation in Africa to support the growing demand for biodiesel. This is just the beginning. For more details on Casterra's activity and its impressive achievements, we will later hear from Casterra's CEO, Eyal Ronen. Moving on to Canonic, which focused on developing best-in-class medical cannabis products using Evogene's GeneRator AI tech-engine. As we disclosed in our previous analyst call, Canonic's main targets for the near term are to grow its cannabis sales in Israel, benefiting from its elite unique strains, while significantly reducing Canonic's expenses.
As Canonic's go-to-market strategy includes out-licensing to third parties, the commercial growth of the cannabis strain toward the final product, it is crucial to select subcontractors that have the right skills and expertise to maximize the genetic value of Canonic's strain, meeting the premium market criteria. To this end, during the past months, the company has been evaluating and negotiating with various subcontractors, including growers outside Israel and indoor growth facility. We hope to update on this matter in the coming months. I would now like to address the successful completion of Evogene's latest capital raise. On July 17th, we raised $8.5 million through a registered direct offering from institutional investors, including SilverArc Capital Management, Altium Capital Management, and CVI Investments. While within the whole Evogene group, we do have a substantial amount of funds, a significant portion is assigned to the subsidiaries.
The additional funds raised for Evogene itself will now allow more financial flexibility, strengthen our position, and will ensure continued growth as planned. For more details on Evogene's financials, we will later hear from Evogene's CFO, Yaron Eldad. To wrap up, the second quarter of 2023 has been an exceptional period of achievement in the Evogene Group, and in my view, it is critical point in the transformation Evogene is going through. We started with the creation of our three AI tech engine, announcing purchase order in the accumulated amount of $11.2 million for Corteva's Castor Seeds. Licensing agreement between Lavie Bio and Corteva, which include an upfront payment of $5 million, milestone and royalties.
Closing a financial round for Biomica on the amount of $20 million, last but not least, receiving the trust of high-quality investors, demonstrated by purchasing 8.5 million ordinary Evogene shares in our recent financing round, all happening in a relatively short time, signals a clear message that Evogene is on the right path of success. I will now hand over to Amit Noam, Lavie Bio's CEO, who will be followed by Eyal Ronen, Casterra's CEO, and finally, Yaron Eldad, Evogene's CFO, who will elaborate on the latest Evogene fundraising and our financial results for the second quarter. Amit?
Hello, everyone. I'm delighted to be joining Evogene's earnings call for the first time. It has been an incredible journey over the past four months since I joined Lavie Bio, the company's CEO. I've had the pleasure of meeting a remarkable group of people and talents, and I'm confident that together we will drive Lavie Bio to new heights in our business endeavors. I want to express my gratitude to Evogene's CEO, Ofer, his management team, and the entire Lavie Bio board of directors for their warm welcome and unwavering professionalism. Thank you all for your support.
I would like to update you on three of Lavie Bio's main achievements in the last quarter and provide some insights into our future plans. One, the commercial progress of our first product, Thrivus. Second, the licensing agreement with Corteva for two of our leading biofungicide candidates, and the third, the advancement in our product pipeline.
Back in May, the company updated that it had received regulatory approval from the Canadian Food Inspection Agency for its bio-inoculant seed treatment, Thrivus. This approval triples the product sales territory, expanding its global reach. Thrivus, which increases hardwood spring root production by enhancing soil nutrient availability and efficiency while mitigating environmental stresses, has always demonstrated its efficacy in the U.S., with an average of three to four bushels per acre yield increase, providing a 4x return on investment for farmers. Lavie Bio plans to extend Thrivus application to other crops in the near future. The product, developed using Lavie Bio's BDD platform, powered by Evogene's MicroBoost AI tech-engine, exemplifies the company's commitment to sustainable agriculture and enhancing productivity for farmers worldwide. Recently, we announced that Lavie Bio successfully entered into a strategic licensing agreement with Corteva.
This significant agreement grants Corteva exclusive rights, subject to reaching certain commercial milestones, to further develop and commercialize LAV311 and LAV312, our promising lead biofungicide candidates, which target fruit flies. These candidates were originally discovered and developed by Lavie Bio, showcasing our commitment to innovative solutions in the ag biological industry. As Ofer mentioned, in the frame of this collaboration, Lavie Bio is set to receive an initial payment of approximately $5 million. In addition, we're eligible for additional milestone payments in the future based on achieving certain patent rights and regulatory approvals. Most importantly, this mutually beneficial agreement also allows us to receive royalties from Corteva's sales of these future products. We are thrilled about this strategic partnership and confident that Corteva's proven capabilities in the ag biological space will help propel our lead biofungicide, LAV311 and LAV312, towards commercial success.
This agreement aligns perfectly with Lavie Bio's vision to provide farmers with environmentally friendly and sustainable tools that effectively combat fruit rot, a highly destructive disease causing substantial annual losses in the agriculture sector. In the second quarter, we continued to advance six additional programs in our pipeline, showing satisfactory progress. We also refined the company's strategy of being a leading ag biological product development company, with the goal of consistently and repeatedly bringing high quality, commercially viable ag biological products to the market that are competitive in performance to the synthetic chemical solutions, but superior in their sustainability benefits. These product programs will support our two go-to-market strategies: direct sales by Lavie Bio, like we're doing with Thrivus, and licensing agreements and collaboration, like the one we just signed with Corteva. I'm excited about the future of Lavie Bio and our commitment to supporting farmers worldwide with cutting-edge solutions.
Thank you for your continued support, and I look forward to updating you on our progress in the future. Thank you all, and now Eyal Ronen, Casterra's CEO and Evogene's EVP Business Development, will provide his update.
Hello, everyone. Thank you, Amit. I'm delighted to join the call today and provide a brief overview of Casterra's recent activities and our plans for the future. Our mission is clear, to transform the castor oil industry by providing an integrated, holistic solution for industrialized cultivation, ensuring a consistent supply of high-quality brands for the industry's value chain. Through our profound knowledge of genetics and innovative agro and technical solutions, we are committed to creating a continuous single-season industrial solution for the best castor crop performance. Let's review last quarter's activities. In the second quarter of 2023, Casterra achieved significant milestones with purchase orders totaling $11.3 million for the supply of our high-yield, high-oil proprietary castor seeds for the cultivation of castor plants to produce oil for sustainable biofuel. I would like to elaborate on this achievement.
In June, we announced the signing of a framework agreement with a prominent oil and gas company, securing initial purchase orders worth $9.1 million for the supply of our castor seeds to be cultivated in specific African territories. In July, we unveiled one more purchase order valued at $2.2 million for additional territories in Africa. I'd like to give a short overview of the biodiesel market and its value to Casterra. The biodiesel market per Precedence Research, was valued at $92 billion in 2021, which is 9% of the global diesel market and is expected to reach $190 billion by 2030. Biodiesel currently consists of 93%-95% fossil oil and 5%-7% non-fossil oils from plants or other sources.
The demand for non-fossil oil in biodiesel could rise due to the biodiesel segment growth or an increase in non-fossil components. Castor is a standout non-fossil oil candidate with carbon natural properties, thriving in marginal lands without competing with edible crops. Spearheading this development is Casterra, using advanced computational biology technologies to develop high-yield castor varieties. I would like to note that we are thrilled to receive these significant purchase orders, which confirm our value proposition for the sustainable biodiesel industry. As we eagerly hope to secure more orders in the future, these accomplishments reinforce our ongoing commitment to delivering exceptional eco-friendly solutions to meet the ever-growing global demand for renewable energy. Casterra plans to increase its global spend and invest more companies in the oil and gas space.
Additionally, in its R&D, it targets to expand its activity to sustainable aviation fuel, SAF market, and develop virtually three rich in varieties for animal feed. After more than a decade of hard work and investment of millions of dollars in developing our unique varieties and underlying technology, we are proud that Casterra is now a trusted and reliable supplier in this growing market. Thank you for the attention, and I look forward to addressing any questions you may have. Now I want to pass the mic to my colleague, Yaron Eldad, Evogene CFO. Yaron?
Thank you, Eyal. As previously mentioned by Ofer, in July, we successfully concluded a fundraising round, securing total gross proceeds of $8.5 million. I must emphasize that the securities issued in this round were common stock only, and they did not include any warrant coverage. As of June 30th, 2023, Evogene had consolidated cash, cash equivalent, and short-term bank deposits of approximately $33.9 million. Of this sum, Biomica accounted for $16.8 million, and Lavie Bio holds $7.1 million. Evogene, together with Casterra, Canonic, and AgPlenus, possessed an aggregate of $10 million in cash. The injection of funds from this last round in July strengthens Evogene's financial position and provides us with the resources needed to execute our future plans effectively and in a timely fashion.
An example of such financial need is a significant increase in the required working capital of our wholly owned subsidiary, Casterra in order to produce the customer seed needed to fulfill purchase orders received in the last month, totaling $11.3 million. It is important to note that the $10 million reflected in the cash balance of Evogene, together with Casterra, Canonic, and AgPlenus, do not include funds raised by Evogene in July, and any amount due to the purchase order received by Casterra in the last few months, which are expected to be supplied during the second half of the year and at the beginning of next year.
Further note that the $7.1 million reflected in the cash balance of Lavie Bio does not include the $5 million expected to be received as the upfront payment from the licensing agreement with Corteva, that was announced in July. During the second quarter, the consolidated cash, cash uses was approximately $5.6 million, or approximately $2.8 million, excluding Lavie Bio and Biomica. I will now review the P&L main, main items. Revenues for the second quarter of 2023 were approximately $654,000, compared to approximately $312,000 in the same period the previous year. The revenue increase was primarily due to revenues recognized by the collaboration agreement of Evogene's subsidiary, AgPlenus, with Corteva, and from sales of Lavie Bio previous products.
R&D expenses for the second quarter of 2023, which are reported net of non-refundable grants received, were approximately $5.4 million and remained stable as compared to approximately $5.4 million in the same period in the previous year. Sales and marketing expenses were approximately $928,000 for the second quarter of 2023, and slightly decreased as compared to approximately $962,000 in the same period in the previous year. The main contributor to this decrease in expense was a reduction in personal expenses at Canonic. General administrative expenses were approximately $1.8 million in the second quarter of 2023, compared to approximately $1.7 million in the same period in the previous year. The increase is mainly due to expenses related to share-based compensation.
Operating loss for the second quarter of 2023 was approximately $7.9 million, compared to an operating loss of approximately $8 million in the same period in the previous year. Financing income for the second quarter of 2023 was $0.1 million, in comparison to financing expenses of $1.7 million in the same period in the previous year. This difference was mainly due to the US dollar and shekel exchange rate differences between periods, a decrease in marketable securities value in the second quarter of 2022, and an increase in interest income during the second quarter of 2023.
Net loss for the second quarter of 2023 was approximately $7.8 million, compared to a net loss of approximately $9.8 million in the same period in the previous year, mainly due to the financing expenses, differences, and mentions above. With that, Ofer and I would like to open the call for any questions. Operator?
Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Ben Klieve of Lake Street Capital Market. Please go ahead.
All right. Thanks for taking my questions here. I have a few. I'd like to start with a couple on Casterra. For this initial $11 million order that is underway, can you clarify how much of that order is going to be filled by seed inventory that you already had on hand versus contract production that is out now to satisfy the, the, that order?
Hi, Ben. This is Ofer. I will ask Eyal to address this question.
Hi, Ben. The amount that I received in the order are substantial amounts. We are producing and continue producing the extra capacity which is required to submit for that these orders. It's not something that we had in inventory. The inventory was mainly used to supply the common demand that exists in the market. The additional orders were requiring us to add more in our production, which is exactly what we are doing now, and will continue in the coming months to accomplish all the quantity required for, for that deal.
Okay. Okay, great. Thanks. So this is, I think, you know, clearly in that sense, it was what I certainly was expecting would be possible here in year one, and so which is, which is fantastic to see. I'm wondering if you can help us understand kind of your outlook for next year. Specifically, do you know what kind of the limiting factor will be for Casterra revenue next year? Is it gonna be, you know, capacity for your biofuel partner? Is it gonna be access to farmers to, to actually plant the seed? Is it gonna be available inventory? I mean, what, what do you think the limiting factor is going to be for Casterra in its second year?
Eyal can you continue?
Yes. Based, based on the estimation that we received from the clients and based on the preparations required in terms of land, I do not see at the moment, any limitations that will be restricting us from producing the substantial amounts that are required. The main, main challenge, I believe, in having those capacities shifted to the client is the logistic one. We are improving and preparing all kinds of adjustments over there to attend the supply itself. From production perspective, we don't see any limitations. Land is quite available. Whether you produce this amount or another amount, the additions that are required are not something which is beyond our reach. I see it mainly as a challenge in the logistics that we need to shift substantial amount from one place to another.
Production-wise, we are settling down, and whether they will be increasing dramatically, we are able to supply the quantities.
I would prefer to be a little bit more, more conservative. I would say that, based on what we know, could be the orders for next year. We believe that we are in a good position to support it. Still, it will need to strength our infrastructure, as an example. We will need to have additional de-rooting machine, additional harvester, and we need to prepare more land. I think that this is things that we can handle.
Of course, if it will be a dramatic increase in the demand, which is something that we currently not expected, you know, something that, you know, 10 x more, I think then it probably will, it will be more difficult to address it subsequently. What we know now, yes, we expecting to see increase in demand, and we believe that we would be able to address this increase. We are working very, very hard, in some cases, even day and night, in order to be able to address this challenge.
Great. Great, thank you. One last one on Casterra. Then I have a quick one on Lavi. For Casterra, I heard your comment about ambitions in the world of sustainable aviation fuel. I'm curious if your unnamed partner in this space is, you know, gonna be your expected partner in this, you know, for this end market, or if you're looking to strike additional collaborations with other energy players in the world of sustainable aviation fuel.
Maybe, maybe I will take this question. Very interesting because I think maybe 10 years ago, Casterra had an ongoing relationship with, actually, with NASA from the U.S. and with an aviation company, where we evaluate the possibility of converting biofuel into converting castor oil into jet fuel. We succeeded to demonstrate that it's really working. The study didn't move forward because again, there was a decline in the oil price during in 2014 and on. It's a little bit reduced the motivation of the bigger companies to move into this direction.
We already have, we already in the past had a collaboration with, one of the big, airplane manufacturing and NASA, and we demonstrated that it can really work. Now we're talking with new companies, new partners. We can't, of course, disclose the names, but, I think that hopefully next year, we will advance, and maybe even before, but we will advance a little bit faster, and maybe this company can be disclosed. We already have a nice experience in this field. In a way, we are, we, we are now continuing what we did in the past and what we stopped, and now, I think we are really in good position to see nice results pretty soon.
Okay, great. Thanks, Ofer. One more on Lavi, and then I'll get back in queue. I'm wondering if you can comment about the Thrivus performance so far this year, kind of what your expectations were for this product when you entered the year, versus, versus how it's shaking out, and then kind of what you're doing to really accelerate Thrivus's revenues in 2024.
Thank you for the question, and I will ask Amit to, Amit, the CEO of Lavie Bio, to address this question.
Hi. Yeah, Thrivus sales in 2023, again, we're just in the beginning of entering the market, but we saw this year two main things. One, is we continued the growth compared to last year, but we've encountered some production challenges that limited the amount of the product that we were able to produce this year. We fixed it for next year. Next year, we're supposed to be able to produce a lot more than we did this year to be able to grow the sales. Second thing we're doing is that we got regulatory approval for Canada. Next year, we will sell also in Canada, which triples the land area that is addressable for us to sell. Canada is twice the size of the U.S. for that, in our relevant crops.
The second thing that we're doing is that we're advancing to additional crops. We're currently running field trials in different crops like, durum and barley and oats and, and others. Hopefully next year, we'll be able to, to, in addition to adding another country, add additional crops, and that will enable us to accelerate the sales.
Great. Great, very helpful. Thank you, and congratulations on all the progress here to date. Thanks for taking the questions, and I'll get back to you.
Thank you.
The next question is from Brett Reiss, from Janney Montgomery Scott. Please go ahead.
Good morning, gentlemen. Thanks for the opportunity to ask a question or two. First question, I just wanna understand the flow of, you know, the, the cash management on the castor seed part of the business. If you get, you know, continued large orders, you have to lay out capital to the entities producing the seeds, then once the seeds are delivered, you know, to the customer, we get paid and, and reimbursed. You know, what, what is the timing on all of that?
Okay. Eyal, can you take this question?
Yes. Basically, there are many pathways to conduct those businesses or those deals. We normally take the responsibility to produce the seeds and bring them to the port, and from that port, whether it is in Latin America or in Africa, the client is responsible for dispatching and taking the goods on his behalf. In terms of the recognition of the revenue and the income, some of it is obviously paid in advance in order to support the production, especially if we talk about substantial production. Later on, once the goods are arriving the port of the client, we are receiving the final and completion of the payment. That's in terms of the support of the capital to provide the cultivation of the customer.
Maybe I will add a little bit more. We have three different sites where we are producing the seed, which this is, you know, the product that Casterra is selling to its partners. One is in the smallest one is in Israel, then we have one in Africa, and the other one is in South America. When we collect the purchase order from our partners, then we are instruct our subcontractors how much we would like them to grow and produce to us seed to support the purchase orders.
In some cases, yes, we have already some good seed in the inventory. Especially when there is such a significant increase in demand like that we've been exposed this year, of course, we can't support such a quantity based on the existing inventory. We ask our subcontractors in all of these locations to start to grow the seeds that we are going to distribute to our partners. Of course, they are using our genomics, they are using our protocols, and we are supporting our subcontractors during the growing season.
After four months, we, we have the seeds, and then, you know, we, and our subcontractor doing the harvesting, the de-hulling, coating the seeds, packaging them, and then they're ready to be shipped to our partners. When the seeds are on the way, so then, of course, there is a certain portion of the money that we receive, the day we transfer the goods at the harbor, and the rest we receive it, you know, when, when the seed arrive to our customers.
There is a gap between the amount of money that we pay to our subcontractors to produce the seeds, and then we get our rewards with all the margin from our partners after we supply the seeds. This is how it depends, and the purchase order that we receive, they are, it's not something that our partners can cancel. In a way, it's like, there is a guarantee that we're going to receive the money based on the supply of the seeds in a certain period of time. This is why we feel comfortable to invest in growing the seed.
Sometimes we even support our subcontractors to strengthen infrastructure in order to support the high-quality seeds to our partners. Then, we, in a way, we have like a guarantee that we receive the money from our partners when they, they will receive the seeds.
That was, that was helpful. In the future, I mean, we're all looking and hopeful that seed orders are, are really going to, to explode. Do you, do you have enough existing working capital, you know, since there's a lag between the time you get the order and you get paid to, you know, to support this robust, sales growth that, you know, we're all hopeful is gonna come?
For this year, one of the reasons that we raised money, it was also to support this growing demand in working capital. According to our estimation, after we will go through this round with the $11 million supply and with the current financial position of Evogene, I don't think that we will need additional capital, and maybe if we do so based on a purchase order that, you know, we might even if needed, we can take a loan from the bank's credit or in order to support the seed production. I think that this year, we felt that maybe the right thing is to raise money in order to do so.
In the future, I intend to believe that all that we will have enough from our internal resources or that, if we, we need to, to receive some credit, from the bank, I believe that, this is another option in order to fund the working capital needed.
Great. Thank you for that answer. Different question. The collaborations you're working on with companies in areas not covered by your subsidiaries, could you share with us, do you have a kind of template of what the structure of these potential deals and collaborations will look like?
Yes, I, I can give you two examples. One, ongoing discussion that we have is advancing nicely is actually in the area of food tech. Here we're talking about producing protein in plant, protein that today we all consume through, you know, through eating meat. We would like to use. There is specific investors and companies that are interested in this field of protein production in plant to replace a mammalian protein that we are all consuming.
This is one field, and here you can imagine that we can use our GeneRator AI technology, and also maybe in certain way, also ChemPass AI, in order to identify the genes, the, the, the genomic mechanism that you would like to improve in order to produce those proteins. Another example, it's related to microbes. You know, animals such as chickens and maybe others, they also suffer from different type of problems that you can treat them using microbes. We might enter to some relationship in the field that we are using our microbiome AI tech engine in order to identify microbes that can improve animal health. This is another example, but there are many other opportunity.
you know, this is just- were just few that currently are, are under discussion, but, there is much more, that, we are now, pushing forward.
Great. Thank you very much, sir, for the opportunity to ask questions and carry, carry on, sir.
Thank you very much. I appreciate.
If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. There are no further questions at this time. Before I ask Mr. Ofer Haviv to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-888-326-9310. In Israel, please call 03-925-5901. Internationally, please call 972-3-925-5901. Mr. Haviv, would you like to make your concluding statement?
Yes, thank you. Thank you all for joining the call today. It was really tremendous quarter. We all look forward to updating you on our progress in our next call. Thank you.
Thank you. This concludes Evogene Second Quarter 2023 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.