Roots Showcases Its Technologies To South Australia Government And Business Delegation

Roots Showcases Its Technologies To South Australia Government And Business Delegation

Agriculture technology company, Roots Sustainable Agricultural Technologies Ltd. (ASX: ROO),  headquartered in Kfar Vitkin, Israel, is engaged in the development and commercialisation of precision agriculture technologies that are disruptive, modular, cutting-edge and that address difficult weather conditions, enhance crop yields, and provide water for irrigation. These technologies are designed to address the challenges that the framers regularly face.

Roots has developed proprietary know-how and patents to bring maximum benefit to farmers through its two key product offerings-

  • Root Zone Temperature Optimization (RZTO)

The technology enhances plant physiology to supplement growth and productivity, promotes yields, expands growing cycle planting options, improves quality, mitigates extreme heat and cold stress while significantly reducing energy consumption. It stabilises the root zone temperature.

RZTO is being widely used on crops like lettuce, chives, cannabis, tomatoes, strawberries, flowers and others.

In early May 2019, Root’s RZTO technology reportedly increased total plant yield of tomatoes by 19 percent in greenhouses in Almeria, Spain during the Spanish winter from December 2018 to March 2019.

  • Irrigation by Condensation (IBC) technology

Irrigation by condensation technology involves passing cold water in pipes using a pump. These pipes are placed in the field or greenhouse to condense humidity in the air on the external surface of the pipes. These pipes are spread across horizontally near the plants at ground level.

For a variety of crops, no additional irrigation is required to ensure plant survival and food production and execute a year-round, sustainable food chain for humans and animals. The amount of water produced, and energy required depends on relative humidity, air temperature, pipe numbers and surface area, and water temperature circulating in the pipes. Thus, the IBC technique enables cultivation of food crops using irrigation solely sourced from humidity in the atmosphere.

The Company is working to obtain market share and acceptance of its commercially viable products in the regions including North and Central America, Europe, South Africa, Australia and Southeast Asia.

Today on 24 June 2019, the company announced to have hosted a government, departmental and business delegation headed by the South Australia Minister for Primary Industries and Regional Development, the Hon Tim Whetstone MP, at its research and development hub in Beit Halevy, Israel.  The delegation also included agents from Australia’s agriculture industry.

Roots showcased its IBC and RZTO technologies to the delegation organised by the Australia-Israel Chamber of Commerce, where they were briefed on its benefits and application to help ameliorate the impact of drought on agriculture. The water scarcity for agriculture is posing a threat to the Australian agricultural sector, which is valued at the farm-gate at USD 45 billion annually with close to 80 per cent of the produce being exported to world markets.

The South Australia Minister for Primary Industries and Regional Development, the Hon Tim Whetstone MP was impressed by Roots’ technology and he believes that the solution is relevant to the challenges faced by both the South Australian and national agricultural industries. He welcomed further tie-ups with Roots to consider the possible use of technology and its impact on the South Australian agriculture.

According to Roots CEO, Dr Sharon Devir, the solar-based IBC system could be advantageous to indigenous aboriginal communities in the remote areas where they could grow agricultural crops using the humidity in the air.

Continued Cannabis sales in USA

On 21 June 2019, Roots reported to have experienced success in North America, as it secured another AUD 43,450 (USD 30,000) contract for the installation of its proprietary RZTO heating and cooling system for PRO in California. It involves installation of RZTO technology in growbags and pots within hoop houses of distinct sizes. The sale contract includes provision of monitoring and control system while planting has been scheduled tentatively for July 2019.

PRO is a US-based organic producer and owns a three-hundred-acre certified organic farm in Santa Barbara County where the farmers grow crops in open-fields and hoop houses.

This sale marks Roots’ fourth in North America since March 2019 following the sale of AUD 28,000 (USD 20,000) to premium recreational and medical cannabis producer Canndescent’s growing facilities in Southern California. The recent sales builds on previous RZTO cannabis orders from industry leader Tim Blake and independent grower Mendocino Natural Farms in late March and early April, further testifying the company’s strategic focus to capitalise on the trend for outdoor and hoop house crop cultivation in North America.

Pro Rata Non-Renounceable Rights Issue

On 17 June 2019, the company announced a pro rata non-renounceable rights issue on the basis of one listed option to acquire a CDI (New Option) for every two CDIs (Record date: 21 June 2019) to raise up to $ 1,700,752. The issue price of New Options would be $ 0.04 each. Besides, New Options will have an exercise price of $ 0.12 each and an expiry date of three years from the issue date.

Everblu Capital Pty Ltd will be the Lead Manager to the Offer and will receive 3,000,000 Options on the same terms as those the subject of the Offer, $ 15,000 engagement fee and 6% of the gross proceeds raised by the Lead Manager under any shortfall offer.

The funds raised are indicated to be directed towards installation and engineering, sales, marketing and business development, general and administration costs, expenses of the Offer and working capital. The proposed timetable is given below-

Subject to the Listing Rules, the above dates may be changed without notice.

 

Private placement

Roots secured firm commitments for $ 1.66mn private placement financing before expenses, by way of a placement of CDIs to sophisticated and professional investors, as reported on 15 May 2019. Accordingly, 23,692,857 CDIs were to be issued at $ 0.070 per CDI. The proceeds were intended to be utilised to accelerate RZTO marketing and sales opportunities in different potential jurisdictions, boost cannabis growers’ sales and marketing activity in the United States, fund the quest of new cannabis and hemp opportunities and for working capital needs.

March 2019 Quarterly Results

During the concerned three months to 31 March 2019, Roots received two sale and installation agreements from Dagan Agricultural Automation, Roots’ select distribution partner in China. The first purchase order for RZTO was valued at AUD 278,000 and the second at AUD 64,400.

Besides, the company also obtained an additional funding of AUD 1.62 million through the issue of Convertible Notes to CST Capital as trustee for the CST Investment Fund. The cash balance stood at USD 563,000 as of the quarter end.

Stock Performance

Roots Sustainable Agricultural Technologies has a market capitalisation of around AUD 5.53 million with approximately 85.04 million shares outstanding. Today on 24 June 2019, the ROO stock price settled the day’s trading at AUD 0.066, edging up 1.54% with around 274,271 shares traded.

Recently, Jamber Investments Pty Ltd became a substantial shareholder in the company upon purchase of ~10.71 million shares, representing a voting power of 12.75%.


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