Wide Open Agriculture Transitions to Capital-Efficient Contract Manufacturing Model with New "Building Better Economics" Strategy

Strategic Transition from German Production Facility to Contract Manufacturing Model

Wide Open Agriculture has announced a comprehensive restructuring of its manufacturing approach, moving away from owner-operated production at its German facility toward a capital-light contract manufacturing model. The company specialises in high-performance, clean-label plant-based ingredients derived from lupin seeds, employing proprietary technology to extract protein isolate, oil, and fibre from the whole seed.

The "Building Better Economics" strategy outlines a four-stage transition. Stage One involves winding down the German facility to significantly reduce overhead and cash burn. Stage Two focuses on shifting to contract manufacturing with an initial lupin protein isolate production capacity of 500 to 1,000 tonnes per annum. Stage Three aims to commercialise lupin oil and fibre alongside protein isolate to diversify revenue and enhance gross margin per tonne processed. Stage Four contemplates a large-scale 10,000+ tpa dedicated facility, pending Pre-Feasibility Study completion, future funding, and Board approval.

Progress on German Facility Wind-Down and Operational Shift

WOA has begun transitioning from its German production site, completing remaining contract manufacturing for pea protein and finalising tolling negotiations. A lupin protein isolate production trial using alternative processing technology was successfully completed, validating the approach ahead of contract manufacturing. Post-quarter, the company started idling the facility, implementing cash burn reductions including lease exit and production team stand-down, while maintaining customer and distributor communication regarding future supply.

Surplus plant equipment sales and administrative steps to liquidate the German entity have commenced. The German facility served as a commercial-scale proof of concept, validating proprietary processing technology, securing regulatory approvals including China market access, and establishing initial customer relationships. However, its size, high EU energy and operating costs, and design constraints no longer align with WOA's scalable, profitable whole-of-seed processing business model.

Contract Manufacturing Organisation Identification and Negotiation Update

WOA has implemented a structured process to identify and qualify contract manufacturing organisations, utilising template NDAs, term sheets, and standardised information packages within a formal stage-gate framework. Approximately 90 potential CMOs have been identified, with 12 NDAs signed and multiple non-binding term sheets under negotiation. This approach safeguards intellectual property, expedites progress, and supports successful contract manufacturing transitions.

The company notes that no binding agreements have been signed and there is no guarantee negotiations will result in definitive contracts. The contract manufacturing model is expected to improve unit economics, reduce fixed overhead and capital intensity, and enable faster, lower-risk volume scaling to meet customer demand. This shift allows WOA to concentrate on its core intellectual property and commercialisation rather than manufacturing.

Simplified Royalty Agreement with Curtin University Enhances Commercial Viability

On 25 May 2026, WOA announced revised royalty terms with Curtin University under its exclusive global licence for proprietary lupin protein technology. The new flat royalty rate of 3.5% of net sales replaces the previous tiered structure, with the minimum annual royalty reduced to A$50,000. All other licence terms, including global exclusivity granted in May 2020, remain unchanged.

This streamlined royalty structure lowers effective rates at commercial price points, supporting clearer financial modelling and more competitive pricing as production scales. It underpins improved unit economics from the contract manufacturing shift and is designed to boost royalty revenue for Curtin University as volumes increase, aligning both parties’ interests in WOA’s commercial success and lupin platform growth.

Board Renewal Brings Expertise in Commercialisation and Capital Markets

On 5 May 2026, WOA refreshed its Board to enhance commercial, capital markets, and scale-up capabilities amid its lupin platform commercialisation. Justin Brown was appointed Non-Executive Chairman and Jack Guidry as Non-Executive Director, joining continuing director Matthew Skinner. These appointments align with the company’s focus on transitioning to contract manufacturing and scaling lupin ingredient production.

The Board renewal coincides with WOA’s strategic pivot, bringing relevant expertise for managing operational transitions and external production scaling. The addition of capital markets and commercial acumen supports the capital-light model and managing multiple contract manufacturing partnerships. Governance enhancements accompany cost reduction initiatives, including deferral of some Board and executive fees, reflecting leadership alignment during this transition.

R&D Tax Rebate Highlights Commitment to Technology Development

During the quarter, WOA received an R&D tax rebate of A$1,686,579, recognising ongoing investment in proprietary lupin protein technology. This financial support validates the company’s focus on continuous innovation to enhance manufacturing flexibility and reduce costs with contract manufacturing partners. Maintaining technological differentiation ensures competitive processing capabilities regardless of the chosen CMO.

Continued R&D strengthens WOA’s transition to an asset-light model centred on intellectual property and commercialisation expertise. By improving manufacturing optionality and cost structures, WOA offers prospective CMOs a robust, validated process for seamless integration, maintaining control over proprietary methods while leveraging established partners’ scale and efficiency.

Advancement of Pre-Feasibility Study for Large-Scale Facility

WOA is progressing a Pre-Feasibility Study for a potential 10,000+ tonnes per annum lupin ingredient facility, representing Stage Four of the "Building Better Economics" strategy. This long-term plan depends on study completion, future funding, and Board approval. The feasibility work aims to assess technical and economic requirements for large-scale dedicated production beyond the initial contract manufacturing phase.

The 10,000+ tpa facility concept supports WOA’s whole-of-seed strategy, enabling integrated processing of lupin protein isolate, oil, and fibre to maximise revenue and improve margins. This infrastructure planning reflects ambitions to build a vertically integrated lupin ingredient business with substantial scale and operating leverage. Study outcomes will guide capital allocation and strategic milestones.

Cost Reduction Measures Implemented During Transition

To conserve capital amid the shift to contract manufacturing, WOA has implemented cash burn reduction initiatives including limiting near-term marketing and R&D expenditures and deferring part or all of certain Board and executive fees or salaries. These measures demonstrate prudent capital management during the operational transition and facility wind-down.

While marketing spend is constrained, the company continues advancing its Pre-Feasibility Study and technology development, selectively prioritising long-term value creation. Board and executive compensation deferrals indicate leadership alignment with transitional goals and confidence in strategic direction, while also reflecting capital constraints during restructuring.

Investor Attention on Contract Manufacturing Agreement Finalisation

Investors are expected to closely monitor WOA’s progress in securing binding contracts with contract manufacturing organisations. With 12 NDAs signed and multiple term sheets under negotiation, progress is notable, but the absence of definitive agreements highlights execution risk during this transition.

Successful contract manufacturing arrangements are critical to validating the "Building Better Economics" strategy and achieving the targeted initial production capacity of 500 to 1,000 tonnes per annum. Investors will also watch the pace of German facility wind-down, equipment sales, entity liquidation, and effectiveness of cash burn reductions in extending cash runway. Advances in the Pre-Feasibility Study and technology development will further indicate the company’s ability to meet long-term strategic goals.