Clean Seed – Poised For Commercialization In 2015 - The Howard Group

Posted Jan 5, 2015 in Blog & Industry News

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Management of the agricultural technology company has made it abundantly clear that it has specific objectives for Fiscal 2015 with the bulls-eye being the commercialization and roll-out of its “CX-6 SMART Seeder”.

F2014 was a year of showcasing the revolutionary technology as Clean Seed added hardware to its trophy shelf, the most notable being the “People’s Choice Innovation Award” at the highly attended, Canada’s Farm Progress Show.

F2015 is the year of commercialization.

In reviewing the Management Discussion & Analysis that was released on November 25th and covered the first three months of Fiscal 2015 ended September 30th, the following was noted:

Outlook for 2015

During the 2015 fiscal year, the Company anticipates the following progress with the CX-6:

  • Seeding and documenting the demonstration plot on the commercial farm adjacent to the Company’s assembly and testing facility in southeast Saskatchewan
  • Presenting and hosting on-farm demonstrations
  • Entering into a production and manufacturing arrangement with an established manufacturer in the prairies
  • Announcing the product sales launch
  • Exploring sales and distribution opportunities throughout North America
  • Submitting CX-6 patent applications to priority countries and exploring additional patent opportunities

In context of the fact that we are now halfway through Fiscal 2015, the above highlighted points (our note) are of particular interest as the path to revenues would need to be concluded within the first half of the new year. We encourage readers to visit sedar.com and review Clean Seed’s MD&A.

We also note several additional sections that caught our eye in the MD&A:

The Company will continue to validate the impact created from adopting the CX-6 SMART Seeder. Based on internal calculations, the incremental benefits from using the CX-6 could be substantial, potentially as high as $100 per acre. This is still forward-looking information that has not yet been verified; however, it is known that 14,000 air seeders were being used throughout the Northern Great Plains area as of 2006, and likely many more today. Once it is verified that adopting the CX-6 creates significant incremental benefits compared to existing air-seeding technology, the commercial farming community will not be able to ignore the value proposition of the CX-6 SMART Seeder. At the individual farm level, the cost to the operation will be too significant, and at the global level the requirement for improved farm production will be too vast.

The marketplace has indicated that the CX-6 will be a high-demand product. The historical results from seeding equipment launches by Canadian companies indicate that the Canadian prairies are receptive to Canadian agricultural innovation. We believe the CX-6’s competitive advantages create the opportunity for the Company to replicate and surpass the previous debuts of other Canadian seeding technologies.

The Company anticipates taking its initial sales orders in summer 2015 subsequent to the on-farm demonstrations; however, the initial sales orders could be accelerated if the interest from distribution companies were to materialize into pre-sales launch orders.

The company has been exceptionally good at keeping interested parties and shareholders informed of its progress. The yearend was no exception with the release of a “Year In Review”, which contains video and interviews from Canada’s Farm Progress Show as well as the CX-6 field tests that were conducted this past September and October.

We also find it interesting that management believes approximately 40% of the 35 million issued shares are owned by people who are members of Canada’s rural communities.

   January 5, 2015 – by Grant Howard

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