CSX.V - Transition.

Updated: Jul 12


Clean Seed Capital Group Ltd.(CSX.V) is known for their Clean Seed’s SMART Seeder™ technologies which are revolutionary seeding tools that utilize the unique synergy of sophisticated electronic metering and intuitive software control putting row-by-row variable rate technology in agricultural innovation.  

CSX.V own a software platform, has a number of patents in precision seeding. The value proposition is relatively simple, reduce waste, promote control, and improve yields while reducing cost.


Coverage was initiated February 2019 with notes in September 2019 May 2020, February 2021 and October 2021.


News Releases


Oct. 28 - Government announces Clean Seed and SMART Seeder MAX(TM) as part of a $10B project value add in Throne Speech by The Honourable Russ Mirasty Lieutenant Governor of Saskatchewan.


The construction of our Clean Seed Agricultural Technology headquarters is well underway, and we look forward to the opening ceremony as part of this wonderful and exciting process.


Nov. 18 - Closes Interim Financing: Further to its October 13, 2021 Shareholders’ Update the Company continues to work with National Bank Financial Inc. to secure significant growth and production financing. In the interim, the Company has closed a non-brokered private placement for 2,85M Units at a price of $0.35 per Unit, for gross proceeds of $1M. Each Unit consists of one common share and one common share purchase warrant at $0.50 per share.


Nov. 23 - Listed and trading on the OTCQB Venture Market: Providing direct access for US investor base. listed and trading in the US on the OTCQB Venture under the ticker OTCQB: CLGPF.


Dec. 2 - Releases Agricultural Documentary “Earth on the Edge”.


Dec. 16 - Takes Occupancy of New Facilities in Saskatoon: Custom-built new facilities in Saskatoon, Saskatchewan at 4010 Burron Avenue. This new home centrally located in Western Canada is the cornerstone of our operations for the early commercialization plans of the SMART Seeder MAX product line including assembly of the SMART Seeder technology suite, related electronics systems, sales and customer experience infrastructure and dealer support.


Jan. 31 - Develops the Mini-MAX to Introduce its SMART Seeder Technology to Developing Countries: Mini-MAX™, a scaled-down model of its North American SMART Seeder MAX™. The Company is preparing to ship the first Mini-MAX™ demonstration unit to India in March 2022 for demonstrations and trials with one of India's top agricultural equipment manufacturers, with whom we anticipate collaboration on commercialization and government-supported initiatives. The Company will be working with likeminded organizations in developing countries to produce and distribute the Mini-MAX™ based on the specific requirements for commercial agriculture in each country or region.


Mar. 7 - Colin Rush as President: Prior to joining Clean Seed Colin held senior positions with John Deere, Case IH (CNHi) and JCB Canada. Colin has been a director of Clean Seed since 2014 and Chief Operating Officer since 2017 and will continue in both of those roles. Gary Anderson has retired as President and has transitioned to a Senior Advisor role to the Executive team. Gary will continue to serve as a member of the Board of Directors of the Company.


Mar. 3 - Expands SMART Seeder MAX Dealer Network with Canada West Harvest Centre: Partner with Canada West Harvest Centre (“CAWHC”) to promote the SMART Seeder MAX™. CAWHC is a five-store agricultural equipment dealer in Saskatchewan geographically covering key agricultural producing areas of the province we have targeted for the SMART Seeder MAX™. CAWHC is owned by OEM agricultural brand CLAAS, a highly reputable industry brand.


May 5 - Clean Seed Activities Update:


Dealerships Appointments: i) Deerland Equipment (Deerland) - a privately-owned multi-store dealer network located in Alberta (announced September 15, 2021), and ii) Canada West Harvest Centre (CAWHC) - a multi-store dealer network located throughout Saskatchewan owned by CLAAS of America (announced March 31, 2022).


Dealer Demo Program: Our sales team is working closely with our dealer networks on our SMART Seeder MAX™ demonstration programs for both Alberta and Saskatchewan as well as robust dealer training initiatives.


Tradeshow Program: Our trade show program begins with Ag in Motion on July 19-21, 2022, the largest outdoor live demo tradeshow of its kind in Canada with over 30,000 attendees. After Ag in Motion, Clean Seed will then head to the heart of farm country in the United States, Farm Progress USA located in Boone, Iowa.


Mini-MAX on Route to India: expecting to arrive in India in late May. In June the Company will commence demonstration activities with one of India's top agricultural equipment manufacturers.


Supplementary Financing: To support its spring program and execute its planned milestones, the Company announces a non-brokered private placement for gross proceeds of $1,508,750; 6,035,000 units at $0.25 cents. Each Unit consists of one common share and one-half of one common share warrant (0.35 cents).


Shelf Prospectus; filed a preliminary shelf prospectus with the BC Securities Commission (“BCSC”) to provide for flexibility in its long-term capitalization plans. The Company is in receipt of the initial comments from the BCSC and is working with its counsel on a final form of prospectus. We anticipate filing and receiving final receipt in June 2022.


May 26 - Canada West Harvest Centre Places Initial Orders for SMART Seeder MAX Units: Saskatchewan dealer, Canada West Harvest Centre (“CAWHC”), has placed orders for SMART Seeder MAX™; an initial order for three (3) 2023 SMART Seeder MAX-5 Series-60 units in advance of the demonstration programs across Saskatchewan.


June 2 - SMART Seeder MAX™ Live Demonstration and Technology Event Commences June 6th 2022 In Saskatchewan


June 21 - Hosts the Consul General of India: Consul General of India, along with other Trade and Export Delegates from the Government of Saskatchewan at our facilities in Saskatoon, Saskatchewan on June 20, 2022


July 7 - Corporate Update: i) Government of Canada and Government of Saskatchewan: Our warm welcome in India could not have been made possible without the support and extensive planning of the Government of Canada and the Government of Saskatchewan. ii) Minister of Agriculture and Director of Agriculture – Government of Haryana: Clean Seed’s President, Colin Rush, and its VP of Operations and Product Development, Jeet Jheetey had the distinct pleasure of meeting with Mr. JP Dalal, Minister of Agriculture, Government of Haryana. iii) Farmer Owned Cooperative and CII Business Group: Our team then met with a large farmer cooperative representing over 12,000 farmers. They spent a few days educating the group on the advantages of adopting the SMART Seeder™ technology regionally iv) Ministry of Agriculture – Government of Punjab: It was also a pleasure to be introduced and to meet with Mr. Sarvjit Singh, ACS Ministry of Agricultural, Government of Punjab, to discuss how we can rapidly deploy a suite of SMART Seeder technology options. v) Chandigarh University Partnerships: Thank you to Chandigarh University for officially partnering with Clean Seed as our SMART Seeder MINI-MAX™ testing and demonstration partner in India. Chandigarh University is one of the largest and most progressive universities in the country and hosted the completion of our initial demonstrations on university grounds. vi) CLAAS Hospitality and Invitation for Tours: Clean Seed welcomed the opportunity to enjoy a tour of the CLAAS India Moringa factory. vii) Ag in Motion – Canadas Largest Outdoor Equipment Expo: In the coming weeks we are also showcasing SMART Seeder MAX™ at this years’ Ag in Motion on July 19-21, 2022, the largest outdoor live demo tradeshow of its kind in Canada.


Clean Seed will update our shareholders as we progress with our objectives in India and look to expand our international demonstration efforts to USA and Australia in the coming months.


Summary


Earnings

Clean Seed Capital Group Ltd. is still considered a venture and in essence "pre-revenue" on the SMART Seeder MAX™ manufacturing. However, to date in FY 2022, it has earned over $1.2M in license and royalty revenues!

As a result, Net and Comprehensive Income was positive (3 months) but negative; showing a loss at 9 months ending March 31, 2022. Overall, for a agri-tech company with a manufacturing arm the size of the loss ($1.41M) year to date are reasonable and are lower than for than last year.


Financing

There were two financing for the periods. November 2021, a non-brokered private placement for 2.85M Units at $0.35 (warrant $0.50 cents) for $1M. Also in May 2022, this time for $1,50M; 6,0M units at $0.25 cents (warrants $0.35 cents).


Product Launch

January 2022, Clean Seed Capital Group introduced the Mini-MAX™, a scaled-down model of its North American SMART Seeder MAX™ with the intent to market internationally starting with India, USA and Australia.


The Company will be working with likeminded organizations in developing countries to produce and distribute the Mini-MAX™ based on the specific requirements for commercial agriculture in each country or region.


CSX.V recently completed demonstrations and trials took place in India (June 2022) with various working groups (Farmer Owned Cooperatives) and industrial bodies (CII and Chandigarh University) with the support from the Agriculture division of multiple jurisdiction (Haryana and Punjab). CSX.V personel also toured the CLAAS India Moringa factory with whom potential future collaboraton and commercialization effort might exist.


Manufacturing Facility

December 2021, Clean Seed Capital took possession of it new facilities in Saskatoon, Saskatchewan. The facility will support commercialization of the SMART Seeder MAX product line, including assembly of the SMART Seeder technology suite, related electronics systems, sales and customer experience infrastructure and dealer support.


Distribution Partners

September 2021, Deerland Equipment was announced as a partner for CSX.V's SMART Seeder MAX™ distribution. March 2022, Canada West Harvest Centre (“CAWHC”) was chosen to promote the SMART Seeder MAX™.


CAWHC is a five-store agricultural equipment dealer in Saskatchewan and is owned by OEM agricultural brand CLAAS. Incidentally, the same company of which industrial facilities were toured in India.


Appointments

Colin as President (March 2022) and will continue as Chief Operating Officer (COO) and Director. He takes over from Gary Anderson who retired and transitioned to a Senior Advisor role to the Executive team. Mr. Anderson will continue to serve as a member of the Board of Directors of the Company.


In short

Clean Seed Capital has finally begun its commercialization efforts for the SMART Seeder MAX™. Armed with a new facility and two distribution partners (Deerland Equipment and Canada West Harvest Centre), CSX.V has already received orders for three [3] 2023 SMART Seeder MAX-5 Series-60 units.


In addition, the introduction of its Mini-Max in India appeared to have been successful.


March 2022, Fundamental Research issued a price target of $1.01 on FY2022 revenues of $1.3M, FY2022 ($1.75M) stating:


"CSX is on the cusp of commercializing its SMART Seeder MAX product line, which has potential to increase crop yields, and reduce farmers’ crop inputs, OPEX, and environmental impact. Deliveries are expected to commence in Q3."


"Upcoming catalysts include financing (for working capital, marketing, and demos), expansion of dealer network, initial sales, and demos/trials in the U.S. and India"


May 31, 2022, in an interview with Proactive CSX.V indicated a $2M+ in SMART Seeder MAX™ Series 60 sales : These sales were placed upon delivery of our pricing programs and in advance of our coordinated sales and demonstration plans.


This appears to be a further qualification of the May 26, 2022 release. Assuming this is the case, Clean Seed Capital is likely to exceed FY 2022 Fundamental Research's revenue estimate ($1.3M). Again, this is before the product demonstrations at two major trade shows: Ag in Motion (Canada) and Farm Progress (USA).


Otherwise, Clean Seed Capital completed two financing for $2.5M in the past nine months. The last one in May 2022 ($1.5M) was after reporting only $0.12M in cash as of March 31, 2022. However, it is likely that the commercialization effort requires additional funds. As such, CSX.V filed a preliminary base shelf prospectus for $20M in April 2022.


The market will certainly be watching for additional SMART Seeder MAX™ sales following Ag in Motion and Farm Progress. Moreover, Clean Seed will be monitored for the manner in which it finances its operations going forward.


The investor presentation does a good job of outlining the current opportunity. The total addressable market is large; $6.5B (US and Canada) and $18.5B for the rest of the world. It also provides details for additional market entry: Australia (2023), Brazil, Argentina and South Africa (2024) and Europe (2025).


Perhaps one area that needs to be expanded on is the expected revenue mix from its non core operations. i.e. technology updgrades, AI and ML subscriptions, cloud analytics packages and licensing and royalty.


Nonetheless, the investor presentation clearly articulate that the successful completion of corporate milestone between the 2022-2024 period will be critical to maximize future shareholder value.



Within this context, it is essential that Clean Seed Capital help potential and existing investors understand the capital requirements and near term financial objectives (2022-2024). It will help make the case for a successful transition.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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