Harvesting A Yield Of Disruptive Technologies
This story is one to which investors can relate and appreciate, as it combines technology with the never ending need to feed a growing number of people. We simply accept as fact that technological advances have propelled dramatic increases in productivity and efficiency while driving down costs in all industries.
The first records of early farming date back to 10,000 BC. It is a profession that involves a lot of trial and error, failure and success, and a never ending quest to “find a better way”.
With so many agri-tech companies promoting the latest technologies to boost yields and promote sustainability of agriculture, how does one leap ahead of the pack? How does a Western Canadian based emerging company compete against the multi-national farm equipment manufacturers? Most certainly, you can’t outspend them to grab market share that they have taken decades to develop. Most certainly, they are going to look at the “start-up” as a minor irritation UNLESS you have something they need to defend their own turf and grow their market share.
In our view, and irrelevant of the industry, a company that is going to attract real interest from the dominant organizations within a sector must have an Intellectual Property (IP) portfolio that holds the promise of creating “disruptive advancements”. Another aspect to consider is whether or not the IP is of such merit that it has the potential to impede the Research & Development efforts within the conglomerates. Also, a point not to understate is that a major company may be called to action simply because of a fear that a competitor might want the IP portfolio.
At this juncture we’d like to introduce Clean Seed Capital Group as the newest addition to The Howard Group client portfolio. It is an agri-tech company that has developed “no-till SMART seeding technologies”. It was first brought to our attention by EuroPacific Canada and subsequently by Industrial Alliance.
Over the past nine months we have had a number of meetings, detailed discussions and a considerable exchange of information with members of management. In our view, Clean Seed’s IP portfolio is the cornerstone of its business.
We don’t see Clean Seed as a sales and revenue growth business “on its own”. We believe the opportunity is through management’s ability to leverage its IP portfolio with a large industry partner. Clean Seed has been designed for a Joint Venture or buy-out.
We clearly understand that if a JV or buy-out was to occur, how long would it take and how would it be structured? What if Clean Seed had to go at it alone? These are just some of the many questions to which there are no answers, today.
Anyone showing an interest in Clean Seed will look at what has been accomplished versus risks, such as the company’s financial and human resources, and then assess “what may happen” to ultimately draw their own conclusions on valuation and “potential”.
The Howard Group made its decision and it is an investor in Clean Seed Capital Group.
Of monumental importance, especially in an emerging company, are the qualities, commitment and depth of the team. For the purposes of this introduction we cannot get into a detailed discussion regarding every individual. However, we want to point out that President and CEO, Graeme Lempriere is “all in”.
The idea for what eventually became Clean Seed was germinated by his father, Dr. Noel Lempriere, approximately 14 years ago. After ill health became an unfortunate reality for Dr. Lempriere and new challenges in the capital markets surfaced, his son took over the business, but only after rescuing the assets (IP) with his own cash, seeing the company through a financial drought, and then assuming responsibility for making the dream a reality.
The Lempriere family has many years and more than $3 million invested in Clean Seed. Graeme has also just become a father for the second time.
Management and members of the Board of Directors own approximately 37% of the 33.25 million shares outstanding (43.54 million fully diluted). Clean Seed began trading on the TSX Venture Exchange in September, 2011.
Clean Seed has been winning awards and accolades at major Canadian agricultural and progress shows for its technological innovation, and is now at the front end of full commercialization. Headquartered in Burnaby, British Columbia, the company, through its proprietary SMART technology, has developed a new class of high-resolution seeding equipment called SMART Seeders. The CX-6 Smart Seeder is the company’s flagship product and represents a radical advancement in seeding technology, providing farmers with total control to implement precise planting plans.
Think of two people standing in front of a canvas. One has a roller and one has a delicate paint brush. It’s clear which of the two is going to produce a beautiful portrait. Placing just the right amount of paint in exactly the right spots is critical to creating a masterpiece. This is akin to Clean Seed’s technology, but unlike the artist, the canvas of land will reveal a portrait in an incredibly short period of time.
Amongst many other features, the technology’s ability to read the “map” of a field leads to micro-management of every acre, where just the right amount of seed, fertilizer and inoculants (promotion of plant health) are modified on a millisecond basis. As the graphic notes, “pinpoint accuracy in every square foot on the field”.
Clean Seed views the Canadian prairie farmer as its primary target market. 14,000 air seeders are currently in use in the Northern Great Plains Area, which is the area between Canada and United States, none of which provide individual point resolution for precision metering.
- Air seeders are suitable for farms with areas greater than 1,500 acres
- In 2011 there were approximately 12,500 farms in Saskatchewan greater than 1,600 acres
- 12,000 farms in Manitoba and Alberta were greater than 1,600 acres
- Potential for the CX-6 Smart Seeder is approximately 24,500 farms (average drill value: $350K for current air seed models) – potential market size of over $8.5 billion
- Average equipment turnover period is 5 years = annual potential market of $1.7 billion
(Source: Company Material)
Another reason that attracted us to Clean Seed Capital is management’s ability to raise funds in these challenging market conditions, especially for small/micro cap companies. Due to the successful showing of its CX-6 Smart Seeder at last month’s (June) Farm Progress Show and a growing mountain of interest in the technology, the company decided to scale back a very recent $0.60 Unit financing to just $1.5 million from $5 million. This decision was taken as Clean Seed is currently evaluating new synergistic business development opportunities.
Clean Seed also has a very strong rural investment base. The fact is that the people who are using the currently available seeding equipment see the potential of this technology and have invested their own hard earned capital.
The Howard Group will have much more to say about Clean Seed, the people, the technology, and the path forward when it releases its detailed “Perspective” on the company.
In closing, Clean Seed Capital is designed for people who appreciate the blue-sky potential of what could be a disruptive technology, while understanding the risk-reward balance that needs to be considered in any potential investment.
to see a video of Clean Seed at the Farm Progress Show last June 2014
To view, Clean Seed Capital’s corporate presentation, click here
CLEAN SEED CAPITAL GROUP LTD. ENGAGES THE HOWARD GROUP FOR
STRATEGIC INVESTOR COMMUNICATIONS
July 22, 2014 – Burnaby, British Columbia – Clean Seed Capital Group Ltd. (TSX.V: CSX, OTC: CLGPF) is pleased to announce that it has engaged The Howard Group as its strategic investor communications advisor. The Howard Group will direct both traditional and online initiatives targeting the investment community and the investing public.
Since 1988, The Howard Group has provided comprehensive investor outreach and capital markets programs, business development solutions, strategic planning and financing services to public companies. The Howard Group is associated with the Insight Limited Partnership II, which invests in micro and small cap companies.
“As shareholders of Clean Seed Capital, we are excited to be a part of an organization that is poised to deliver disruptive innovation and capitalize on the growth opportunities in the agriculture sector”, commented Grant Howard, President of the Howard Group.
In addition to its ongoing services, The Howard Group Inc. will be providing an ongoing commentary on CSX’s activities in its “Insight” online newsletter. Interested parties are encouraged to subscribe to the newsletter feed: http://howardgroupinsightnewsletter.blogspot.ca/
“Clean Seed Capital has a captivating story to tell and The Howard Group is a seasoned team of professionals that have a robust history and a solid knowledge of the capital markets gained over several major market cycles since 1988. As we enter a new phase of growth, this team was the ideal choice to navigate the complexities of the current market in addition to the related communication expertise required to promote our business. We look forward to working together”, stated Graeme Lempriere, CEO of Clean Seed Capital.
The Agreement has a term of one year. The remuneration payable to the Howard Group will be $7,500 per month plus GST and the Company shall grant the Howard Group 300,000 incentive stock options which shall be vested and shall be exercisable at $0.60 per share. The Agreement together with the granting of the stock options is subject to the approval of the TSX Venture Exchange.
ABOUT CLEAN SEED CAPITAL GROUP LTD.
Clean Seed Capital Group Ltd is at the forefront of an agricultural shift to unparalleled high resolution seeding technologies. Clean Seed has developed an advanced precision no-till seeding system comprising several individually patented technologies including in-ground openers, proprietary seed and fertilizer metering and electronic control systems. The company’s award winning CX-6 SMART Seeder is an industry first and a major advancement in agriculture. The SMART Seeder technology offers an unrivaled level of precision in modern no-till seeding and represents the future of farming.
For Further Information Contact:
Clean Seed Capital Group Ltd. Mark Tommasi
Phone: (604) 566-9895
The Howard Group Inc.
Dave Burwell/Ariel Cobangbang firstname.lastname@example.org / email@example.com
Phone: (888) 221-0915
Cautionary Statement Concerning Forward-Looking Statements
This news release contains "forward-looking information" including without limitation statements relating to realization of resource estimates, reduction of capital and operating costs, success of mining operations and the ranking of the project in terms of production. Readers should not place undue reliance on forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Until a positive feasibility study has been completed, and even with the completion of a positive feasibility study, there are no assurances that the Rose project will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices of metals; availability of alternative lithium or tantalum sources; actual rates of recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with Canadian securities regulators available on SEDAR at www.sedar.com.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Vancouver, British Columbia – July 16, 2014 – Clean Seed Capital Group Ltd. (the “Company”) (TSXV: CSX), announces that it has closed its private placement offering. The company elected to limit the financing to $1,500,000 through the issuance of 2,500,000 Units at $0.60 per unit.
“The persuasive results garnered from the debut of our full scale CX-6 SMART Seeder at Canada’s Farm Progress Show, related business development opportunities and over 50 signed committed farmers for our upcoming field demo day motivated the decision to limit dilution at this stage of growth. This decision gives the Company more flexibility to evaluate and accommodate synergistic business development opportunities”, stated Graeme Lempriere, President & CEO.
Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a period of two years at a price of $0.85 per share in the first year and $1.25 thereafter until July 16, 2016.
The private placement was brokered by a syndicate of agents, led by Industrial Alliance Securities Inc. (the “Agents”). The Agents collectively received: (i) an aggregate cash commission of $86,268; and (ii) 143,780 compensation options entitling the Agents to purchase an equivalent number of Units of the Company for a period of 18 months from closing at a price of $0.60 per unit.
“I support the company’s decision to limit the raise rather than take more dilutive capital at this price point while appraising strategic options they have in front of them from the show. The option is available to do a second and final close after the field demo days of the CX-6 should the company elect to exercise”, stated Jeret Bode, Managing Director Investment Banking, Industrial Alliance Securities.
Certain insiders of the Company subscribed for a total of 119,667 units under the private placement (the “Insider Participation”). The Insider Participation is exempt from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) based on that neither the fair market value of such Insider Participation nor the consideration paid by such person exceeded 25% of the Company’s market capitalization.
All of the securities issued under the private placement to subscribers and the Agents are subject to statutory and TSX Venture Exchange imposed resale restrictions expiring on November 17, 2014.
The net proceeds of the private placement will be used for the marketing and commercialization of the Company’s CX-6 SMART Seeder, as well as for general working capital purposes.
Additional information about Clean Seed Capital can be viewed on the company’s website at www.cleanseedcapital.com.
ON BEHALF OF THE BOARD
Clean Seed Capital Group Ltd (TSX-V: CSX) unveiled its CX-6 SMART Seeder at Canada’s largest agricultural trade show June 18-21 2014.
The overwhelming volume of interest and the positive reactions we received was nothing short of amazing. Please watch and enjoy this video presentation which summarizes how fantastic this event was for us, we simply couldn't have asked for more!
Thank you to everyone for your ongoing support.