A Glimpse at 4 ASX listed AgTech stocks – ROO, RGI, CLI, BGT

The agriculture industry is a big sector and plays an important role in shaping up the economic development of a country. There are several businesses, which revolves around the agriculture market. To name a few, crop protection, crop-seeds, agricultural instruments are associated with the overall agriculture market.

A good harvest season provides positive income to the farmers, as well as the businesses that are associated with the agriculture. Also, an agriculture-based product company relies on a proper research and development and commercialisation of its products.

Let’s have a look at a few Australia- based companies in agriculture sector:

Roots Sustainable Agricultural Technologies Ltd (ASX: ROO)

Roots Sustainable Agricultural Technologies Ltd is an agricultural company which develops and markets modular, cutting edge technologies used within the agricultural sector.

Recently, the company informed its successful proof of concept (POC) study which was organised in Southern Israel with the Root Zone Temperature Optimisation (RZTO) heating technology successfully increasing the yield of Okra plants by 78% under extreme cold weather.

As reported by ROO, the study was carried on for a period of four-months and emphasised on the technology stimulated only during the winter months to heat the roots zone of the Okra. The company offers technology which helps to maintain a 22C despite fluctuations in the air temperature.

Q4FY19 Business Highlights for the Period ended 31st December 2020: ROO declared its quarterly highlights which are discussed below:

  • ROO informed that it has entered ag-tech markets like Italia and Canada for the distribution of patented Root Zone Temperature Optimization (RZTO) technology.
  • The company reported positive results released from Initial root zone cooling of protein-based plant program.
  • The business successfully raised $820,000 in order to commercialise RZTO in various jurisdictions. The funds would be allocated to enhance its commercialisation of its cannabis and hemp segment in North America.
  • The company reported its cash balance of US$341K as on 31 December 2019. ROO reported net cash used in operating activities at US$0.521 million for the fourth quarter of FY19.

 

Cash from Operation Highlights

Cash from Operation Highlights (Source: Company’s Report)

 

Outlook: The company is well positioned to expand its Cannabis segment across the international markets. The business anticipates further improvements of the organic meat replacement market with the heat zone temperature optimisation technology.

Stock Update: The stock of ROO was trading at $0.023 on 2 March 2020 (at AEDT 4:27 PM), with a market capitalisation of $3.46 million and ~138.32 million outstanding shares. The stock has corrected by 34.21% and 55.36% in the last three months and six-months respectively.

Roto-Gro International Limited (ASX: RGI)

Roto-Gro International Limited operates in the logistics services of automated rotary hydroponic garden system. On 26th February 2020, RGI confirmed the implementation and delivery of a mutual release (the “Mutual Release”) relating to the Share Purchase Agreement (the “Share Purchase Agreement”) with Valens Groworks Corporation (“Valens”). The above collaboration indicates purchasing all of the issued common shares in the capital stock of Supra THC Services Inc.

Details of the Share Purchase Agreement: With a press release, the RGI confirmed its Share Purchase Agreement with Valens Groworks Corporation. The Supra Transaction has been negatively impacted due to the changes in both the execution and application of the legislation after the execution of the Agreement. The above agreement was settled on zero cash payment of $2M or issuance of 16 million RGI equity shares to Valens.

Stock Update: The stock of RGI was trading at $0.112 on 2 March 2020 (at AEDT 4:34 PM), with a market capitalisation of $15.64 million and ~148.97 million outstanding shares. The stock has corrected by 32.26% and 40.00% in the last three months and six-months respectively.

CropLogic Limited (ASX: CLI)

CropLogic Limited is a global agricultural technology company, which operates in the horticultural segment, with a market share ~30% in some crops.

Quarterly Updates as on 14th February 2020: CLI announced its quarterly updates which are summed up as follows:

  • During February, the Directors of the Company consented to provide additional funds of $218,250 as a Loan instrument. Mr Steve Wakefield, Mr Stephen Silver and Mr John Corbett respectively provided $67,750 while Mr Peter Roborgh provided funds of $15,000.
  • The business made introduction of additional capital into the Company, which will be used for the agtech operation and for the trial farm operation.
  • The company was due to pay a final instalment of US$315,000 to its vendors named ProAg business by 31 January 2020.
  • The management of the company were working to regulate the realisable value of the industrial hemp inventory of ~407,296 pounds held in storage at the trial farm site in Oregon.

 

Outlook: For the January to March 2020 quarter, the business expects an estimated cash flow of $0.778 million, which includes product manufacturing and operating costs of $0.241 million, staff costs of $0.445 million and administration and corporate costs of $0.82 million.

 

Estimated Cash Flow

Q4FY20 Estimated Cash Flow (Source: Company’s Report)

 

Suspension Update: As notified on 4 February 2020, CLI mentioned that it has offered its answers to the ASX queries, as on 21 January this year, which have already been released on the market notifications platform. CLI had also updated back then, that its shares would remain voluntarily suspended pending it releasing its 4th quarter report for the period closed 31 December last year.

Stock Update: The stock of CLI last traded on 14th November 2019 at a price of $0.031 with total number of shares outstanding ~416.61 million.

Bio-Gene Technology Ltd (ASX: BGT)

Bio-Gene Technology Ltd operates in the development and marketing of insecticide products, widely used in the agriculture sector.

H1FY20 Operational Highlights for the Period ended 31 December 2019: BGT announced its half-yearly results, wherein the company reported revenues from ordinary activities of $0.505 million, depicting an increase of 545.2% on pcp. The business reported 16.2% lower loss of $1.061 million. The company reported Research & Development expense of $0.738 million, as compared to $0.703million in pcp. Management and Employment Expenses stood at $0.921 million, as compared to $0.70 million in previous corresponding period. The company reported Cash and cash equivalent of $3.63 million, total assets of $4.752 million and net assets of $4.097 million as on 31 December 2019.

Stock Update: The stock of BGT last traded at $0.160 on 2 March 2020, with a market capitalisation of $21.92 million and ~132.87 million outstanding shares. The stock has delivered positive return of 13.79% and 17.86% in the last three months and six-months respectively.


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