Deveron Corp. (FARM.V) is an agriculture technology company that uses data and insights to help farmers and large agriculture enterprises increase yields, reduce costs and improve farm outcomes. FARM.V employs a digital process that leverages data collected on farms across North America to drive unbiased interpretation of production decisions, ultimately recommending how to optimize input use.
FARM.V has a team of agronomists and data scientists that build products that recommend ways to better manage fertilizer, seed, fungicide, and other farm inputs. Additionally, Deveron has a national network of data technicians that are deployed to collect various types of farm data, from soil to drone, that build a basis of our best in class data layers.
Coverage: June 2017 December 2017, April 2018, September 2018 , March 2019. October 2019. July 2020. & March 2021.
News Releases
Apr. 1 - Reports 2020 Year-End and Fourth Quarter Financial Results
Apr. 6 - Deveron and A & L Canada Laboratories Acquire Woods End Laboratories: Woods End is a leading soil health research company founded in 1974. For the last 46 years Woods End has focused on creating solutions for the agriculture, compost and soil health markets. Its flagship brand, Solvita, is a leading soil health diagnostic product utilized across the globe to help measure the biological activity in soil.
1) Adds United States based leader in agriculture soil health testing to Deveron product portfolio; 2) Woods End 2020 revenue of US$1.8 M and EBITDA of US$0.9M; 3) FARM.V forms Joint Venture with A & L Canada Laboratories.
Apr. 27 - Appoints VP Engineering: Pranay Joshi as VP – Engineering. He will lead the development of Deveron’s technology strategy and accelerate the impact of the Company’s recent acquisition, Farm Dog.
The Company has granted employees of the company 200,000 options to purchase common shares exercisable at a price of $0.74 per common share. The options expire on April 27, 2026, vest over 5 years.
May 17 -Expands US Footprint with Acquisition of Tana Ag Solutions Group LLC: Tana Ag Solutions is an independent agronomy company committed to providing customers with the latest technology for weather, soils, agronomy and analytics to help them maximize crop yields and reduce risk.
1) Acquisition of Tana Ag strategically expands Deveron’s United States footprint increasing paid acres under management by 120,000. 2) Tana Ag 2020 unaudited revenue of US $271,704 and EBITDA of US $98,171.
May 25 -Achieves Record Q1 Revenue and Reports 178% Growth in Digital Insight Product Sales:
May 27 - Expands US Footprint with Acquisition of Stealth Ag Inc.: Stealth Ag is an independent agronomy company, blending precision systems and unbiased perspective providing an optimal blend of services to increase yields. With locations in Minnesota and Iowa, Stealth Ag has spent the last ten years integrating innovative practices with practical agronomy, all to assist their clients in the growth of their soil fertility and yield management programs.
a) Expands United States footprint, increasing engaged acres under management by 800,000 b) Stealth Ag 2020 unaudited revenue of US $0.7M and EBITDA of US $0.2M c) Includes US $400,000 in data technician capital equipment.
May 28 -Announces Closing of Tana Ag Solutions Group LLC: As consideration for the Transaction, FARM.V will issue an aggregate of 166,005 common shares in the capital of the Company at a price of $0.82 per Common Share over a period of two years and cash payments in the aggregate of US$112,500 over a period of two years.
June 25 - Appoints New Board Member: Joelle Faulkner as a Board Member. Joelle is a multi-generational farmer and the Founder and CEO of Area One Farms, a financial solution provider in the agricultural space.
The Company has granted directors and employees of the company 300,000 options to purchase common shares exercisable at a price of $0.80 per common share. The options will expire on June 25, 2026, vest over 3 years. The shares issuable upon exercise of the options are subject to a four month hold period from the original date of grant.
Aug. 3 - Announces Private Placement Financing: Non-brokered for $3.5M through the issuance of 5.38M at $0.65 per Unit (Warrant $0.85 cents). Proceeds will be used for working capital and general corporate purposes.
Aug. 17 - Upsize to Private Placement Financing and Closing of First Tranche. Increased the size of its non-brokered private placement financing to gross proceeds of $8.2M with the same terms previously announced.
Closed the first tranche of the Offering through the issuance of 11,397,430 Units for gross proceeds of $7,4M. Also, an insider of the Company subscribed for 385,000 Units.
Aug. 24 - Announces Closing of Second Tranche of Private Placement: Issued 1,229,620 units in the capital of the Company for gross proceeds of $799,253. Overall, a total of $8.2M was raised.
“We remain focused on consolidating the independent agriculture crop consultant market under Deveron’s banner. We will continue investing significantly in our digital ecosystem where our clients and partners amass significant amounts of unique data, leading to increased yields, reduced costs and improved outcomes on the farm.” -Deveron’s President and CEO.
Aug. 30 - Closes Acquisition of Stealth Ag Inc.: As consideration for the Acquisition, the Company will issue Stealth Ag an aggregate of 773,837 common shares in the capital of the Company at a price of $0.86 per Common Share over a period of two years and cash payments in the aggregate of US$1,100,000 over a period of two years.
Aug. 30 - Reports Record Revenue in Q2-2021 with 63% YoY Revenue Growth:
Sep. 9 - Acquires Agronomic Solutions, LLC. Expanding US Footprint: Agronomic Solutions, LLC., a leading digital agronomy company, that services Iowa, Nebraska, Missouri, Minnesota, Illinois and Kansas. Agronomic Solutions provides soil sampling services and digital management across 400,000 acres of customers annually.
1) expands United States footprint, increasing acres under management by 400,000 annually
2) Agronomic Solutions 2020 unaudited revenue of US $1.54M.
Sep. 21 -Launches Agriculture Carbon Product with Initial Enterprise Customer Engagement in United States: The platform is the first of its kind to provide a scalable and streamlined process of collecting, analyzing, and sharing in-field soil carbon data to support the development of carbon programs.
In conjunction with this announcement, Deveron has signed enterprise contract commencing this fall, to provide its carbon program to a large multinational agribusiness. Utilizing Deveron’s industry-leading soil health platform, the client gains access to Deveron’s extensive foot print of soil technicians across North America,providing a single chain of data custody from collection to analysis,assuring best in class data sharing and security. The contract is valued at US $125,000 and focuses on the US Midwest and could increasedepending on demand for the client’s carbon program.
Oct. 14 -Signs Multi-Year Contract with USDA for use of Carbon Services Platform: Signed a four year enterprise agreement to support the first phase of the United States Department of Agriculture (“USDA”) $10 million Conservation Reserve Program, valued at $1,800,000. The Company has agreed to provide $930,000 in collection service as well as $870,000 in soil analytics across 600 sites throughout Wisconsin, Arkansas and Michigan.
The soil analytics will be provided by Deveron’s, 51% owned, Woods End Laboratories. The contract, signed on September 29, 2021, provides the USDA access to Deveron’s new platform which provides a scalable and streamlined process for collecting, analyzing, and sharing in-field soil carbon data.
“Carbon credits may become transformative for agribusiness and growers, and in the future have the power to be a cash crop in its own right. Working with the USDA validates the value proposition of our carbon services platform, and confirms the need to digitize and standardize the collection, analysis and distribution of carbon soil data.”
- Deveron’s President and CEO.
Oct. 19 - Signs Multi-Year, Multi-Million Dollar Enterprise Contract for Use of Carbon Services Platform: An initial two-year statement of work valued at $3.14 million, with a global leader in the agricultural industry. Initially covers nine states in 2021 with an expansion to 17 states in 2022, with an annual value of $1.25M and $1.89M, respectively.
The contract provides the client with access to Deveron’s new carbon platform, which provides a scalable and streamlined process for collecting, analyzing, and sharing in-field soil carbon data to support the development of the client’s carbon program. This is the third agricultural leader to sign an enterprise contract to use Deveron’s carbon services platform since its launch on September 21, 2021.
Nov. 9 - Signs Fourth Enterprise Client For Carbon Services Platform: A $105,000 enterprise contract with a leader in the agricultural technology space. The agreement, is in support of the client’s carbon program that covers Ohio, Indiana, and Illinois. The contract provides the client access to Deveron’s new platform which provides a scalable and streamlined process for collecting, analyzing, and sharing in-field soil carbon data.
Nov. 18 - Reports 127% Year-Over-Year Revenue Growth in Q3 Financial Results: Successfully launched its carbon services platform. Since the end of Q3/2021, Deveron has announced four contracts for this program.
Summary
Earnings
Thus far in 2021, Deveron has delivered record breaking revenue in every single quarters.
In fact, YTD 2021 revenue performance exceed the whole of FY 2020.
Nonetheless, Net Loss have also significantly grown and it is mostly related to the number of acquisition made.
Overall, FARM.V is in a very good cash position with $8.12M as of September 30th, 2021.
Acquisitions
A total of four acquisitions were executed in the last nine months.
April 2021, Wood End Laboratories (soil health testing) was bought out in combination with A&L Canada Laboratories to form a Join Venture. Wood End flagship product Solvita, a leading soil health diagnostic product is now an asset. Wood End is based in Mt. Vernon, ME and Kansas City, MI, has previously worked with Deveron in Canada
May 2021, Tana Ag Solutions Group LLC was purchased; an Oklahoma based company that is tech provider for weather, soils, agronomy and analytics. In addition, Stealth Ag Inc. another agronomy company which utilized precision systems for improving soil fertility and yield management in Minnesota & Iowa was also acquired.
September 2021, Agronomic Solutions LLC; a digital agronomy which provide soil sampling and yield management
in Iowa, Nebraska, Missouri, Minnesota, Illinois and Kansas.
Appointments
Two appointment were released in this period. April 2021, Pranay Joshi as VP – Engineering to accelerate the integration of Farm Dog while in June 2021, Joelle Faulkner as a New Board Member.
Financing
August 2021, a non-brokered private placement for $3.5M through the issuance of 5.38M shares at $0.65 cents per Unit (Warrant $0.85 cents- half a share) was initially announced. This effort was raised to $8.2M upon closing the first tranche ($7.4M; 11.3M shares) two weeks later. Eventually, the placement closed at ($8.2M; 12.6M shares)
“We remain focused on consolidating the independent agriculture crop consultant market under Deveron’s banner. We will continue investing significantly in our digital ecosystem where our clients and partners amass significant amounts of unique data, leading to increased yields, reduced costs and improved outcomes on the farm.” -Deveron’s President and CEO.
Carbon Product Platform
Late September 2021, this product was launched and was refered to as "a scalable and streamlined process of collecting, analyzing, and sharing in-field soil carbon data to support the development of carbon programs". This leveraged FARM.V's existing network of soil technician and represented a direct channel of data collection from "farm to lab".
Simultaneously with the launch announcement, a first entreprise contract was reportedly signed a contract (US $125,000) with a multinational agribusiness, focusing on the US Midwest.
October 2021, a four year agreement with United States Department of Agriculture (“USDA”) for $1.8M was made entailing $0.93M in collection services and $0.87M in soil analytics. This engagement provided the USDA with access to FARM.V's new platform to collect, analyzed and share in field soil carbon data. Furthermore, another announcement was also made in October 2021, this time with a "global leader in the agriculture industry" for a two year commitement ($3.14M). The initial scope was for nine states (2021; $1.25M) expanding to 17 states in (2022; $1.89M)
November 2021, a $0.1M aggreement with an agro-tech entity was reported with a focus in Ohio, Indiana and Illinois.
In Short
Deveron's (FARM.V) valuation fluctuated between from $0.52 cents to $0.92 cents. Today it closed at $0.69 cents. This is slightly higher than the base price of their most recent financing ($0.65 cents) but still significantly higher than previous non-brokered placement warrant (roughly 8M at $0.45 cents).
FARM.V has had a number of achievements in the past nine months. Delivering record revenues (YTD 2021; $4.1M) through four major acquisitions; : Wood Ends Laboratories (JV with A&L Canada Laboratories), Tana Ag Solutions Group LLC, Stealth Ag Inc., and Agronomic Solutions LLC. These build on previous buy outs of Veritas, Atlas Team, and Better Harvest Inc. and Farm Dog. Hence, a total of eight acquisitions have been made in the last 24 months.
Also, since launching of the Carbon Product platform in late September 20201, Deveron signed four aggrements (including the USDA) totaling roughly $5.16M. However, net losses are now outpacing revenue growth. Even if FARM.V has a decent cash position, a portion of the pay out of the recent acquistions have been annualized in some cases.
Moreover, outstanding warrants and the fair value might not be sufficient for maintainting its aggressive growth path.
As such, the recent filing of the short form base shelf prospectus suggests that more acquistions may be in order.
In light of the possible headwinds that may come from financing its growth, the achievements of the past nine months is starting to make the current valuation premium much more attractive.
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