Australis Capital Inc. (AUSAF) CEO Terry Booth on Q3 2022 Results - Earnings Call Transcript

Australis Capital Inc. (OTC:AUSAF) Q3 2022 Earnings Conference Call March 2, 2022 11:00 AM ET

Company Participants

Terry Booth - Chief Executive Officer

Jon Paul - Chief Financial Officer

Duke Fu - Chief Operating Officer

Leah Bailey - Chief Business Development Officer

Conference Call Participants

Mike Edwards - R.E. Edwards

Jody Kane - Diamond Bridge Capital

Operator

Good morning, everyone and welcome to today’s Australis Capital Conference Call discussing the Results for the Third Quarter of Fiscal 2022. Listeners are reminded that certain matters discussed in today’s conference call or answers that maybe given to questions asked could constitute forward-looking statements related to among other things for our future growth, trends in our industry, our financial and our operational results and our financial or operational performance.

Such forward-looking statements are predictive in nature and maybe based on current expectations, forecasts or assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from the forward-looking statements themselves. For these statements, we claim the protection of the Safe Harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian security laws. Risks and uncertainties and variable factors are discussed in the company’s various public filings at www.sedar.com. Except as required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note that on today’s call, which is recorded, we will refer to certain non-IFRS financial measures such as EBITDA that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Since we are conducting today’s call from our respective remote locations, there maybe brief delays or other minor technical issues during this call. We do thank you in advance for your patience and understanding.

I would now like to introduce Mr. Terry Booth, CEO of AUDACIOUS. The call is yours, Mr. Booth. Please go ahead.

Terry Booth

Thank you very much. Good morning, everyone and welcome to our Q3 conference call. It’s been an eventful few months as we continue to execute at AUDACIOUS. We now not only have growing footprint in the U.S., but we are also expanding internationally through our partnership with GTH in Thailand and the completion of our project in Australia. Consumers in multiple markets now have access to our award winning product lines with sales in California growing – with sales in California growing as our pending acquisition of Herbs and our partnership with EAZE are supporting our efforts in that market.

The quarter itself saw us continued to grow at a high rate. Compared to the same period last year, revenues increased by over 2,400%, clearly showing our transition from an investment co into an operating co is successful, while sequentially top line revenues increased relatively modest 4.4% compared to the last quarter. This is mainly due to a cycling out some older consulting arrangements such as Body and Mind, an investment we now have largely exited.

Adjusted for these steps, we saw continued growth in our core business of ALPS and cannabis. ALPS continue to go from strength to strength. With ESG projects proliferating across the globe, ALPS with its unsurpassed offerings is often a partner of choice to help growers establish operations. We are helping clients with their project from the Arctic to the desert, as for instance, our project with Pure Harvest in Kuwait shows. The ALPS pipeline continues to grow. And we continue to work on a growing number of large projects that will see us generate significant revenues.

Speaking of growth facilities, while at MJBizCon this last fall, which was very successful for the company, we launched the AUDACIOUS ACHIEVE series and launched the AUDACIOUS brand. The ACHIEVE series is a set of standardized facilities powered by ALPS. We are in a growing number of discussions on building ACHIEVE’s facilities to customers and we already announced that our New York partners, First Americans of the Saint Regis Mohawk Tribe, we will be building an Achieve 12.

That brings me to what I believe will be one of the most significant projects under development. We announced our partnership with First Americans back in December. The importance of this project is it provides AUDACIOUS with a clear, early-movers advantage in a market that is not expected to fully implement adult consumer use for another 18 months or so. There is some movement in the hemp side and we have our finger on that pulse as well.

Our partners, a group of highly accomplished entrepreneurs, with a deep background in retail operations, Rick and his team from First American built a thriving commercial hub on the Mohawk Territory and Rick was also involved with the establishment of the casino resort that attracts close to 2.5 million annually – people annually. As one of our planned dispensaries will be right opposite this casino, we anticipate significant traffic. New York State is one of the main prizes in cannabis, the fourth most populous state in the U.S. with over 20 million people. This is a market that is expected to generate billions of sales in the coming years. Being able to establish a presence with our brands well before most other companies will be able to start servicing this market provides us with a very significant competitive advantage. We look forward to working with Rick and his team in establishing our thriving cannabis operation in this exciting part of the world.

Not only are we movers in New York, we also have a head start in Thailand. Thanks to our partnership with GTH, Golden Triangle. Thailand recently removed cannabis from its narcotics list, while THC for the general market has still limited its potency below 0.3%, this is an important step that opens the door for further legalization down the line. In the meanwhile, we will be focusing on development of our CBD business in Thailand. We will be reporting shortly on our trip our team recently made to Thailand. But suffice to say at this point that with our partners, we have been able to establish significant distribution with major retail chains and third-party distributors for when we fully – for when we are fully up and running with our production.

To this end, we sold hemp seeds to GTH, making us the first North American firm with cannabis-related sales to Thailand. These seeds are growing on the land made available to us by Khon Kaen University, one of our partners who are making meaningful contributions to GTH such as the land in which we grow our hemp, and later cannabis, on extraction equipment and with R&D capabilities.

Moving quickly, GTH has also already opened 4 franchise stores under its Hemp House brand. These we plan will eventually be turned into dispensary type operations once adult consumer use is fully legalized. Until such time, we are likely to convert the Hemp House stores into clinics as we have a license to grow medical cannabis, which is sold through the government. We will be able to cover the entire industry vertical in Thailand, providing us with an early mover advantage that we believe combined with our distribution networks will set us up for the success that we require in this market with 67 million people. Furthermore, Thailand is the first Asian country to make this move, but we anticipate other markets such as Malaysia and China to follow.

Having an international distribution network with exceptionally strong connections in the region will set us up we believe to become one of the dominant forces in cannabis in this region of incredible potential. GTH itself is a spin-off from the highly successful ethnic foodstuffs company and our instant process PCL also known as NRF. A Thai public company with a market cap in excess of $400 million and sales across the globe. The reason they wanted us to work with us – sorry, the reason they wanted to work with us as a partner is because they recognize their operational excellence across the value chain, from cultivation through to manufacturing, derivatives, branding and our executive team. We are very excited about this partnership as we believe this will become a very material contributor to revenues and margins in the quarters and years to come. We are off to a great start and there is much more to come.

While we continue to be very active in the M&A arena, at any given time, we have upwards of 40 projects under assessment. We are currently laser focused on driving organic growth. Our efforts in California are a good example of our hybrid approach. On the one hand, we made our entry into the space through the pending acquisition of Herbs dispensary in San Jose. This is progressing well and we are close to having a definitive agreement. As we stated previously, through their Herb acquisition, we are also able to enter into a partnership with EAZE, the world’s largest legal cannabis delivery service. The beauty of this partnership is going to take out customer reach well beyond the San Jose area and the SKUs that we launched in California are available on the EAZE menu statewide. The effectiveness has become immediately apparent as the initial batches of LOOS and provisions products produced in California are completely sold out.

The effort of this has become immediate – sorry, completely sold out. We are producing a second larger batch, which should be available to the market in the next couple of weeks. Our success in California clearly shows that if a company makes great products they will sell even in the competitive market such as California. We, at AUDACIOUS, tried to supply customers with products they are looking for. While there is a place for value button in the market, this is a highly competitive space with little to no customer loyalty. At the higher end, things are different. Shortage of two premium products and consistency of supply of premium products mean that a company able to supply high quality and the vendor products consistently to the market will be able to carve out market share.

This is exactly what we were doing. For instance, even without the heavy spend on marketing and with no advertising, our LOOS products ranked second in the category in California. This reflects both the attractiveness of the LOOS products to consumers, but also the ability of the LOOS team to sell and [Technical Difficulty] LOOS has exceptional connections within the cannabis space that have enabled them to ensure our products can be found in a growing number of dispensaries, which comes on top of the success we have had at EAZE. We are looking to replicate our efforts in other jurisdictions. For instance, in our home market, Nevada, we will be launching LOOS and Mr. Natural products shortly as well as [Technical Difficulty]. Tsunami recently won the inaugural NuWu cup for Best Extract. Our extraction scientists under the leadership of Dr. Duke Fu are second to none, which is also one of the reasons we increasingly are becoming the partner of choice as Thailand and our new project in New York purely show. Further activities in Nevada center on increasing production capacity, the development of a cannabis campus on the 23 acre plot of land we own in Sandy Valley near Las Vegas, where we also own the last remaining water rights.

On the back of our successes, we now have also gone live with our Wreck Relief website www.wreckrelief.com. This is an e-commerce site for the sale of our CBD infused topical pain relief medication developed to service our growing audience amongst followers of the PBR, which with over 83 million captive fans and over 2 billion social media impressions represents a very interesting market for us. With the site now live, we have commenced generating revenues for the Wreck Relief brand. There will be many more promotional activities surrounding the Wreck Relief brand. For instance, on February 1, we announced the Wreck Relief 2022 PBR ticket giveaway, in which we are giving away over $10,000 in premium PBR tickets and experiences for 21 lucky winners. The last drawing takes place on April 18. I would encourage everyone to visit our site and check it out and perhaps participate in the contest to win a PBR experience. Take it from me, I have watched PBR event and I am very confident stating that these athletes can do with some high quality pain relief. And what works for them, I mean, just to interoperate you both should work for any and many other people too.

Before I hand over the call to Jon, I wanted to add a few more things on ALPS. In the past, I have gone into great detail on what else does and what makes it so special. I won’t repeat all of that here. You can find it in our press releases and call recordings, which are on our ausa-corp website. What I do want to focus on is how ALPS, which continues to sign new projects, including $1.4 million in fees for ALPS project in Kuwait, not the most vegetable-friendly climate. And that is where ALPS comes in. The quality of projects delivered by ALPS over the years has cemented their brand as the developer of the highest quality facilities that are built to deliver simultaneously on margin economics and sustainability. Consequently, we see strong traction for projects of this kind.

Furthermore, be it a preeminent innovator in the space, the launch of our APIS suite of compliance and industrial computerized service solutions making waves, our first APIS installation is already up and running in Australia, with further suites being developed and delivered to other projects. APIS is unique in the industry and has given ALPS a great competitive advantage as the first mover. And based on years of facility design and growing experience, APIS has started to imitate and outperform consequently, interested in the solution and ALPS is high. For example, we were able to enter into a partnership with Priva, a global leader in environmental control solutions for the horticultural sector. Priva has installed customer base and installed customer base of over 12,500 facilities worldwide. This is a captive audience who we know will want to hear more about APIS. I look forward to updating the market once the joint team heads out and start spreading the gospel on APIS.

While at MJBizCon, we also announced the launch of AUDACIOUS ACHIEVE facilities. Without going into too much detail, it is important to note that the Achieve concept delivers high quality cannabis at low operating costs, but in a standardized format that is quick to develop and build. Consequently, our customers will be able to get their product to market much sooner, while at the same time knowing that they will be fully compliant with all the rules and regulations. Those companies looking at overseas markets can also opt for EU GMP compliance, further expanding their economic reach. Our New York project will see an Achieve facility being built. And we are in talks with a growing number of companies interested in this concept. Going forward, ALPS is very active pipeline of potential projects. It is in negotiations on many and we look forward to informing the market as we continue to execute ourselves.

On that note, I will hand the mic over to Jon who will go over the segment. Jon Paul?

Jon Paul

Thank you, Terry and thank you everyone for tuning into our call today. As Terry mentioned, lots of exciting things taking place and Q3 was a pivotal transitional quarter for us as we spend heavily on areas with strong future revenue potential. As Terry discussed, while making moves away from previous revenue stream such as fin-tech. As we reported after market yesterday, we continue to generate significant growth year-over-year, with revenues over 2,400% above last year’s Q3, even with lower fin-tech and consulting revenues as we pivoted away from certain sales channels, we still exceeded last quarter by 4.4%, with sales of $2.4 million. As Terry mentioned, we entered the California market and quickly sold out our limited production runs. Based on this success, we advanced ordered key raw materials for a much larger production run that it will be scaling up very quickly.

Our trailing 12-month pro forma revenues continue to climb now at $9.9 million, up 14% from the same 12-month trailing revenue numbers as of the previous quarter in September. The pro forma numbers include sales from Green Therapeutics, which we acquired last March. We are now in the final stages of licensing transfer process, which we are confident, will get approved by Nevada Regulators later this month. Gross profit improved to $1.8 million compared to $0.2 million loss for Q3 in the prior year. And even more impressively, gross profit is up 49% compared to Q2. The improvement in gross profit over the prior quarter was driven by high utilization rates and very attractive gross margins on the ALPS services businesses.

Operating expenses grew 26% compared to Q3 prior year, well below the revenue growth rate. Q3 operating costs were 9% higher than Q2 driven by costs related to the company President at MJBizCon which Terry mentioned the AUDACIOUS grand launch annual meeting cost and offset partly by lower severance cost as we finished final settlement with prior management people from the previous management team prior to the proxy filed. Our operating cost dropped 14.7% versus last year as well as 2% from Q2. The improved gross margin more than offset the extra spending we have been doing on growth initiatives.

During this fiscal year after 9 months, we have made some big capital investments. ALPS has spent $1.7 million developing their APIS service line as Terry talked about, in addition to cost spent previously. We advanced $2.4 million to [indiscernible] for their get their cultivation build out started prior to winter. We also spent $1.9 million on land and water rights in a future facility in Sandy Valley, Nevada. To help finances, we raised $3 million in an equity raise from high net worth individual. We generated $4.1 million from land sales that we no longer need and reduced our investment in Body and Mind by $3.5 million, all signs that we are focusing on investing in operation.

Looking ahead, we have been able to consolidate Green Therapeutics results in Nevada when the license transfer gets approved. We have several other layers for leverage for sales growth, sales through GTH in Thailand, the expansion in California, further expansion in Nevada, and new project in the works at ALPS.

Thanks everyone for tuning in. I now had the call back to Terry.

Terry Booth

Thank you, Jon. So as you can tell, what we have described so far, AUDACIOUS is in good shape. We are growing. We have many initiatives on the grow. We are rapidly becoming the partner of choice. We have a strong position in social equity, diversity, inclusion and in ESG projects. And we have award winning brands that truly resonate with consumers. So, what can you expect from us on a go forward? First off, obviously we will continue to execute on the initiatives that we have been – that have been announced. We are very excited about our entry into New York and there will be more. Our project with the First Americans will not be our only New York project and we look forward to sharing details of our expansion in the state.

Furthermore, as we announced, we made a number of license applications. In Ohio, we are on what I would call a waiting list, the lottery was held even though we did not get pulled from the hat, there is still a chance we will win after the winners have been assessed. Furthermore, we are applying in New Jersey and New Mexico and we are confident allowing something in either state. Obtaining licenses via application obviously is a low cost entry point into new markets. Otherwise, we would have to finance the project. We will own these and dictate terms if we decide to partner.

Furthermore, the relatively low cost of aapplying for licenses will provide us with time savings compared to having to partner with a license holder. And that said it will lower our cost of entry, a key element in our strategy. We are also very excited about our partnership with GTH. We believe we were of course strong from this partnership as we have multiple revenue streams under development. Our partners are exceptionally well connected both within Thailand and in the region. And I truly believe that with GTH, their parent company, NRF and with AUDACIOUS, we are building the winner in the region. Tom, the CEO is a full of life, energy, knowledge and connections in Thailand.

Beyond that, with the LDA funding flows and our first chance being drawn on shortly, we have more resources we can allocate towards organic growth. As we have indicated on multiple calls our product shells, in fact, we continue to shell out and in order to grow we will have to increase capacity. We are assessing multiple options to do so. And we look forward to reporting on our progress in the months to come.

We will be launching new product lines. We will enter new markets and we will develop new revenue streams in this nascent market. With our Rapper Weed brand that was officially launched on our e-commerce sites, we believe we will see additional growth coming from this exciting partnership. We have a strong, talented and dedicated team that is driving this project and under the auspices of Leah Bailey, our Chief Business Development Officer, whose track record in CPG and cannabis is exceptionally strong. I believe we have something that will grow into a very meaningful contributor to our growth over time and continue to build the AUDACIOUS brand.

I am also very pleased to share that we are about to re-launch Mr. Natural brands. More than anything this re-launch will benefit veterans, many of whom have consumed Mr. Natural products in the past. Supporting veterans is something we believe in strongly AUDACIOUS being able to provide them with what I personally consider the best medicines for this truly horrendous condition PTS is something that makes me proud to be working in this industry alongside Mr. Natural, Bob Luciano.

So in conclusion, AUDACIOUS is in robust shape. We have great assets that have formed the foundation of a truly remarkable company that we believe has everything in place to accelerate growth. This is all in one short year. We will keep laser focused on our bottom line and we are implementing measures further to improve our margins. We are also very actively communicating and I recommend people follow us on various digital properties such as Twitter, Instagram and LinkedIn. With the full GT results expected to be consolidated soon, continued ALPS growth across the planet, we anticipate reporting strong growth, especially as our other revenue generating initiatives are starting to pay off.

With that, I conclude our prepared remarks and now open the floor for questions. Thank you for your time and thank you for your support of AUDACIOUS. Operator, over to you.

Question-and-Answer Session

Operator

[Operator Instructions] We will take our first question from Matthew Zane.

Unidentified Analyst

Hi, good morning, everyone. Mr. Booth, it sounds like there are some really exciting things to look forward to. And I wonder if you might spend a couple of minutes maybe adding some color to Thailand and what that looks like in the future and what your expectations there are?

Terry Booth

I will be happy to. Relationship with Thailand really came from Dr. Duke Fu and his contacts all over Southeast Asia and Asia. And it started out where they just needed some support in the CBD technology space, the derivative, the extraction space, as at the same time, the government 2617 we are moving very quickly to mirror and to improve the regulatory framework around CBD derived from hemp. And of course, I am speaking to the ability to ingest CBDs, so as you can have a dialogue. So that itself, I would call it a leapfrog over the U.S. CBD market, because there are ingestibles being sold, but not approved. But to have them approved in a country that is an entrepreneurial country and with an entrepreneurial company and with excellent contacts in the food space is exciting. If you can imagine, CBD and brand names, we don’t have to mention them, but the people in the company that have been very interested in having CBD as part of ingestible and a beverage. So, that was the interest. We then met with them, we saw that they were – I felt anyway, I guess Duke knew, but they were further ahead in the marketplace than I expected. The deal we have done with them is cashless, it’s a share swap with a right to own 25% of the company and the right to control. Duke is online, he can speak more to the intricacies around that contract. But really it’s we provided them with seeds that will grow in that environment and have grown in that environment. I believe the first harvest is down of the seeds that we have supplied. And they are great genetics, and are going to bring an extra amount of CBD. I don’t know that the Thailand market will be able to produce the amount of CBD that’s going to be required. So, we are working on other initiatives with the country of Thailand in getting our CBD imported. That might be just a temporary measure. They obviously want to grow their own and derived their own CBD. But with the change in regulations and this change to the THC Reg, which will allow for medical cannabis initially, ultimately adult use of cannabis, they have spoken about it being having the same reciprocity rules as perhaps Nevada, where tourists can obtain cannabis went in Thailand. So, it is a – I wouldn’t call it a loose system, but it is a friendly system of cannabis with THC. It has been removed from the illicit list. So, it’s a great step forward. We work closely with them. We just had a team there for over a week meeting with the Health Minister. I can’t – I don’t want to say all the good stuff again, because we are going to put it out there. But watch for it. And it will further explain the relationship with Thailand. Does that help you?

Unidentified Analyst

Yes, wonderful. Thank you. And I have another question, please. You referred to New York and having a first mover advantage, maybe again, add some color around that. What does that first mover advantage look like? And what are your expectations there?

Terry Booth

Sure. We have mentioned on previous calls and many releases, we have had our finger on the pulse of New York in a great way. We spent the money and the time and the effort to make sure that the proper people are in our – I wouldn’t say in our stable, but in our Board and making sure we have a finger on the pulse of the regulations. Those regulations, the draft regulations are expected in April or early May. And normally a draft regulation will set up as the final regulation with minor tweaks. We have done our best to have our input into what those regulations will look like, with our experience in Canada and abroad. Had experiences over 25 countries with regulatory frameworks in place for this very matter, adult usage cannabis and medical cannabis and making sure that the bar is set high for entry. It’s going to be very much a social equity state for licensing, which we are on top of. We are the only company that I know that has an independent Board for inclusion and social equity. So, where are we going in New York for first mover, well, with the indigenous lands, they are not subject to the state rules. And we don’t think we haven’t checked the box into the state can grow and sell cannabis on those lands. The location of this particular community is excellent. As I have stated in the in the earnings release, the number of people that pass by and visit this casino is significant. And that is the first entry mover. Now, one might say, “Well, what about the hemp?” Right, with the provisional licenses that just came out, well, we are on top of that, as well. And I think the two will walk side-by-side, and we will see exactly what they have, we are going to have an entry point on the provisional license under hemp. They are very limited. The provisional licenses with size is 20 lights, that was really meant for your mothers. And then if you pick the indoor with 20 lights, you get two-thirds of an acre of outdoor. But you are going to need your autoflowers. And hopefully, I think that they will be allowing for high-end hoop house. But at this point you can’t be banging out achieve series facilities. So, there is a question about what the quality and yields of that bud will look like versus the bud that we expect to be growing with Mohawk Group and First Americans. Now, you may say, I am not going to be able to sell that indigenous grown cannabis or First American grown cannabis outside? Well, yes, you can in some cases. There is a thing called the compact that you apply to the Federal government. And then it goes through municipal barriers, and boom, Bob’s your uncle, and you are selling outside of your property, your lands. But I don’t expect that until such time that everybody has the ability to sell in an adult usage market. But again, think about it, the facility is built, is producing cannabis, and is ready to roll once it receives something like a compact to sell outside its borders. So, that’s why we believe we have a first mover advantage or one of the first mover advantages in New York State. And it’s a big state, a lot of people and there is going to be a lot of cannabis activity. They are limiting the size of the facility. So, you won’t see these monstrosities like Aurora Sky and whatnot, you will see 50,000 to 100,000 square foot I believe at best. So, that’s going to trade a lot of work. They are going to have a large part of the retail I believe will be driven by social equity. And you better do it right. A lot of the states haven’t really mastered how to implement those systems. And you better be believing it. You better be educating or better be having a proper end game in place to fully be inclusive and diverse in your operation in the New York State. Did that help?

Unidentified Analyst

Yes, wonderful. I appreciate your answers. And good luck.

Terry Booth

Thank you very much. That’s fun.

Operator

[Operator Instructions] And we will take our next question from Mike Edwards with R.E. Edwards.

Mike Edwards

Hi. Thank you. I was looking to hear more about what’s going on with Oklahoma, Missouri. I know we are – like there is a 25% I think own licensed by GT in one of the states and I think that’s in Missouri. And then the other state Oklahoma, heard a lot about them for I think the past year just kind of trying to get a timeline on both of those states, how are you going to be operating in each, whether that’s dispensaries, manufacturing, or cultivation and kind of what the timeline is for those states? Thank you.

Terry Booth

Sure. I will let Duke weigh in here. But strategy wise, Missouri is right around the corner on derivatives and extraction and manufacturing. And Oklahoma would probably be – it might even be after some of these other states that we have applied for as we assess the market in Oklahoma, which early indication isn’t something we need to jump all over. But Duke do you want to weigh in a bit on Missouri and Oklahoma licenses?

Duke Fu

Sure. Missouri facility is 1,000 square foot manufacturing facility that’s our – that’s licensed and up and operating, the general – key to the general dynamics of the market. It’s not the most profitable at this point in time. So, we are taking a little slow approach of wait and see. However, we do have some technology that we are applying, so that we can be much more profitable there. And our expectation is that we are going to start executing with applying some of those technologies in the next coming months. The actual facility has already made products. And the markets new and is medical still, but we expect also recreational to be coming down the pipeline sometime this year. So, I think there is going to be a growing state relatively soon.

Terry Booth

And it should be Missouri license partnership, we are doing all of the heavy lifting there with respect to the manufacturing facilities with one of our partners, who I believe that was also a social equity license was and I do.

Duke Fu

No, that was a specifically social equity license. But the group is a social equity group, so.

Terry Booth

Got it. Appreciate it.

Mike Edwards

Great. Thank you. And then I guess the last question has to do, I guess with Florida. I know, it sounds like there is a couple deals working in place there. Is that going to be by applying for a license, or would that be kind of by acquisition? I don’t know if you can speak to that or not, but if you call on that would be great.

Terry Booth

Yes. We can speak to the licenses in that state very expensive, right. They got a piece of paper, even the ones without any operations are, say, are at a very high price. It’s a medical state. It’s one of the most similar states to Canada, the ability to brand. The other hiccup in Florida is you could only sell the product that you grow. But if Leah is on the call, I get her to weigh in on the licensing situation, or the other licenses that are going to be available. And we will certainly be applying for those I believe. And at the same time, we are looking at the opportunities that come out of Florida, there are some companies actually and if you can milestone weight, an acquisition or because of the value that they are asking for these projects, we are looking at, certainly something driven by milestones or a SPAC or something that allows a company of our market cap to enter into Florida for an existing license. We are talking about north of $50 million, sometimes even higher on these licenses. So, I do believe that there is a more licensing coming out of Florida, Leah, is that correct?

Leah Bailey

It is correct. I mean there are some current licenses that were not qualified for there for farmers. But we are looking at that license application very carefully, because we believe that we will be pretty close to what the full application will look like. And we believe in the next three months to six months, there will be other applications that will open up and we will definitely back that up.

Mike Edwards

Okay. Thank you.

Operator

[Operator Instructions] And we will take our next question from Jody Kane with Diamond Bridge Capital.

Jody Kane

Hi. Thank you. I see the Body and Mind has been a decent source of funding for you guys over the last couple of months, do you know where we stand with that in terms of what’s left? How much more you guys can pull out of that?

Terry Booth

Yes. I can take that. We thank for your question. Yes, we have right now on the balance sheet as of the end of December, we have $2.9 million in Body and Mind shares. And we will be – we are in the process of winding that down and we probably will be totally out of their investment by the end of our fiscal fourth quarter.

Jon Paul

For no other reason except for we are not an investment company, I like Body and Mind. I like the team. I like their approach. I like what they are doing with their organic growth. Mike is a great CEO. So, there is nothing to do with Body and Mind. We were just not an investment co. We don’t have the people to sit around and watch other people’s stock go up or down. So, that was what the investors wanted as part of this dissident battle that they had. They didn’t want it to be a FinTech investment, they wanted us to be a cannabis company and that’s what we are endeavoring to do.

Jody Kane

Correct. Thank you. Appreciate that.

Operator

[Operator Instructions] And it does appear there are no further questions at this time. I would like to turn the conference back over to your presenters for any additional or closing remarks.

Terry Booth

Thank you and everybody be safe out there. Know that your team at Australis is working very hard in a hopefully a COVID-free environment coming up here. I would like to get around more and meet more people face-to-face in America. So, wonderful system 50 different countries as they like to call it. And we are focused on picking the right prices in America. And we are well on our way to success. Keep the faith. They won’t be long. Thank you for your time.

Operator

Thank you. And that does conclude today’s teleconference. We do appreciate your participation. You may now disconnect.