Future Direction for Sound Agriculture

Today, I am sharing some updates that significantly impact Sound Agriculture and our employees.

Over the past four years, we’ve witnessed significant commercial growth and technical breakthroughs across the company. Our nutrient efficiency business, led by SOURCE, reached 1.5M acres in 2023 and is expected to grow ~40% to over 2M acres in 2024. This has enabled thousands of growers to access more sustainable nutrients from the microbes in their soil, leading to higher productivity with less environmental impact.

As agriculture markets change due to falling commodity and fertilizer prices, we need to adapt. Today we are restructuring the company and reducing the size of our team to enable greater focus and ensure growth towards a profitable business over the next couple years. This is a very difficult decision as it impacts employees who are dear to the company, but it is necessary for Sound’s long-term success.

This restructuring enables us to focus on a variety of growth opportunities in the core nutrient efficiency business:

Ensure SOURCE is used in conjunction with our data-driven Performance Optimizer to maximize growers’ return on investment;
Launch new sustainability programs that incentivize growers to optimize their fertilizer practices with SOURCE;
Bring novel nutrient efficiency products to market, both from our own pipeline and from partners, that are synergistic with our bio-inspired chemistry;
Further enable our 250 independent dealers and new strategic channel partners like WinField United;
Expand to new geographies like Brazil, where SOURCE trials have consistently shown strong performance, with 5%+ soybean and corn yield increases over the past three seasons.

Further to the themes of focus and reaching profitability, we will be exploring strategic alternatives for our On-Demand Breeding business. Since 2019, Sound has become the worldwide leader in plant epigenetics. We have created new traits across eight major crops in partnership with over half a dozen blue chip agriculture companies, and developed a completely new heirloom tomato in a matter of months — a tenth of the time of traditional plant breeding and a third of the time of gene editing.

New discoveries are allowing us to make changes to gene expression during plant growth, which holds the promise for “spray on” plant traits that could impact disease resistance, water holding capacity and yield, in addition to consumer traits like protein or sugar content. This opportunity will take time and capital to fully commercialize within the $180B global seed and crop protection markets, requiring a new structure than what exists today.

As we navigate these changes, we, like other agriculture companies, are faced with difficult decisions that weigh heavily on us. At the same time, we are incredibly excited about the path ahead and the continued support from our investors to further Sound’s leadership position in sustainable agriculture. I am grateful for every team member that has been part of Sound’s journey. As we move forward, we remain committed to our mission of creating a food system that supports the long-term health of our growers and our planet.

Sincerely,

Adam Litle, CEO

Sound Agriculture