FARM.V - Premium.


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.


Previous coverage: June 2017 December 2017, April 2018, September 2018 , March 2019. October 2019. and July 2020.


News Releases


July 7 - Brings Turnkey Data Program to Terramera’s North American Research Trials: Terramera, a global AgTech leader fusing science, nature and artificial intelligence to transform how food is grown are pleased to announce a collaboration using drones and data across multiple sites throughout North America for the 2020 growing season.


The project will provide Terramera access to Deveron’s turnkey drone data network which includes scalable data collection services across numerous sites in Canada and the United States.


Aug. 24 - Reports Continued Revenue Growth in Q2:


“Our second quarter results illustrate the success of our growth strategy which is underpinned by three key focus areas: organic growth, productization of our offerings and acquisitions,” - Deveron’s President and CEO.


Sept. 2 - Deveron UAS Announces Name Change to "Deveron Corp. The Company's new stock symbol on the Canadian Securities Exchange will be "FARM", and the Company expects its shares will commence trading under the new name and ticker symbol on or about market opening on or about Thursday September 3, 2020.


Sept. 17 - To Commence Trading on the TSX Venture Exchange: On September 21, 2020, under the symbol “FARM”.


In addition, the board of directors of the Company has adopted a new stock option plan (the “2020 Stock Option Plan”). FARM.V currently has 4,275,000 options outstanding, leaving 900,033 options available for grant.


Oct. 26 - Expands Agriculture Soil Network Footprint in the USA and Canada: Increased its network of soil sampling data technicians adding new hubs in Saskatchewan, Canada and Nebraska, United States.


FARM.V’s sales team has been actively engaging with new customers looking to leverage Deveron’s ability to improve programs for soil health. Deveron has added 4 additional enterprise customers, that collectively service thousands of farms in the US and Canada. This new opportunity provides a great base to sell Deveron’s additional analytic services.


Nov. 19 - Reports Q3 Financial Results:


Finally, on the M&A front, we have been selectively building our database of agronomy services businesses, similar to Better Harvest which was acquired in May 2020 and are currently performing due diligence with opportunities.


Also launched the FARM.V's first digitally native product, targeting farm variability and providing the agriculture industry with a quick, and easy to use benchmark for why farm variability matters.:


Dec. 11 - Announces Private Placement Financing: Non-brokered private placement financing for gross proceeds of $2,000,000 through the issuance of 5,714,285 units at $0.35 cents (Warrant (0.5) at $0.45 cents).


Gross proceeds raised from the Offering will be used for working capital and general corporate purposes.


Dec. 22 - Upsizes Private Placement: Increased the size of its non-brokered private placement financing to gross proceeds of $5,607,227 through the issuance of 16,020,651 units at $0.35 cents (Warrant (0.5) at $0.45 cents).


Gross proceeds raised from the Offering will be used for working capital and general corporate purposes.


Dec. 23 - Closing of Private Placement Financing: issuance of an aggregate of 16,529,222 units for C$5,785,227.


Jan. 15 - Grant Options: Granted 1,225,000 options to purchase common shares of the Company exercisable at a price of $0.43 per common share and expiring on January 15, 2024, to officers, directors and employees of the Company


Jan. 26 - Brings Fixed Wing Imagery Offering to Ontario: Launch of a fixed wing imagery pilot program for the 2021 season. The program is available in south western Ontario, an agriculture market of 8 million acres of farmland.


The focus is to provide growers with a cost effective means to make crop protection decisions and help increase yield. High resolution data can also be used to improve field scouting, tissue + soil sampling, and nitrogen management.


Feb. 22 - Acquires Farm Dog, An Award Winning Data Platform:


Key Highlights: 1) Acquires Farm Dog, Farm Dog’s customer-facing, mobile and web agriculture data platform; 2) Adds over 4,000 new clients representing over 2,000,000 acres.; 3) Accelerates Deveron’s digital service offerings 4) Assumes a strategic contract (expiring in 2025) with the United States Department of Agriculture (USDA).


Liron Brish, who founded Farm Dog in 2015 and led the Company as its CEO, will join Deveron as VP Product and Sustainability. Liron will be focused on integrating the Farm Dog and Deveron products and services into a single offering. He will also be working with FARM.Vs partners to advance sustainability initiatives within agriculture.


Under the terms of the transaction, if all milestones are met, Deveron has agreed to purchase all the assets of Farm Dog for a maximum consideration of US$1,000,000. Upon signing, the company will pay US$250,000, to be satisfied through the payment of US$100,000 in cash and the issuance of US$150,000 of common shares of Deveron. Upon execution of the agreement, 25% of the shares will be issued. The additional 75% of the shares are to be issued on the next two anniversaries of the closing of the transaction. All shares will be priced at $0.64 per common share.


Based on the achievement of certain milestones, the remaining US$750,000 would be payable as follows: a) US$250,000 of common shares in the event that Farm Dog adds 2,000,000 unique acres within 3 years of the transaction date b) US$250,000 worth of common shares and US$250,000 in cash in the event that Farm Dog generates an additional $5,000,000 in revenue by the end of 2022.


For the appointment of Mr. Brish, Deveron will be granting him 325,000 options to purchase common shares upon closing of the transaction. The options will vest over a period of two years and will be priced at $0.64 per share.


Mar. 5 - Announces Closing of Acquisition of Farm Dog: FARM.V will issue an aggregate of 294,118 common shares at a price of $0.64 per Common Share over a period of two years and a cash payment of US$100,000.


FARM.V's wholly-owned subsidiary Deveron USA, LLC ("Deveron USA") entered into an employment agreement with Liron Brish ("Brish") whereby Brish would be retained as an employee of Deveron USA. Based on the achievement of certain milestones, and pursuant to the Employment Agreement, the Company has agreed to pay US$750,000 as follows: (i) US$250,000 issuable in Common Shares in the event that Farm Dog adds 2,000,000 unique acres within 3 years of the closing date of the Transaction; and (ii) US$250,000 issuable Common Shares and US$250,000 in cash in the event that Farm Dog generates an additional CAD$5,000,000 in revenue by the end of 2022.


Mar. 8 - Provides Corporate Update & Announces Signing of Multiple Multi-Year Service Agreements: FARM.V signed three new service agreements with leaders in the agriculture industry,


A three-year service agreement to provide turn-key soil health data solutions for a global leader in carbon sequestration and sustainability within the agriculture industry. The service agreement has a minimum annual value US$125,000 per annum, which could increase depending on the demand for the client’s carbon benchmarking program. The project covers 21 states across the United States, uses the client’s proprietary in-field software and focuses on benchmarking and tracking increased carbon sequestration in soil.


The second agreement is a three-year service agreement to provide turn-key drone solutions for a leading global seed manufacturer. The agreement is valued at a minimum of US$103,000 per annum, with growth opportunities. The service is targeted across seven states in the Midwest United States and focuses on mid-season analysis of corn crops.


Finally, Deveron has also signed a multi-year agreement with a leading weather insights company to service and install weather stations in Canada and the United States. The service agreement represents another data product that our North American network of technicians can provide. Weather data plays a prominent role in decision making throughout the crop production cycle. Facilitating the deployment of hardware over a wide geographic area is a new method of leveraging FARM.Vs growing network of data technicians that provide “last mile” service.


Mar. 12 - Appoints VP-Finance: Craig Hogan CPA, CA as VP - Finance. The Company has granted Mr. Hogan 175,000 options to purchase common shares exercisable at a price of $0.75 per common share. The options expire on March 12, 2026, vest over 3 years. The shares issuable upon exercise of the options are subject to a four month hold period.

Summary


Name Change

Deveron UAS was renamed to Deveron and began trading on the TSX-V under the symbol FARM.V.

Earnings

FARM.V has exceeded FY 2019 revenues for every single quarters in FY 2020 (Q1-Q3 2020).


Hence, Year to Date results (YTD 2020) indicates that FARM.V has already exceeded FY 2019 revenues. In addition, the YTD 2020 net loss is lower than FY 2019. Q4 2020 earnings will confirm if this trend applies for all of FY 2020.


Financing

FARM.V successfully completed a non-brokered private placement (December 2020) for gross proceeds of C$5,785,227 through the issuance of 16,529,222 units at $0.35 cents (Warrant (0.5) at $0.45 cents).


Options

In January 2020, FARM.V granted 1,225,000 options exercisable at a price of $0.43 cents, expiring on January 15, 2024


Engagements

FARM.V shared a number of engagement in the last nine months.


a) July 2020; disclosed a collaboration with Terramera using drones and data across multiple sites throughout North America (Canada and US) for the 2020 growing season.


b) October 2020; announced the expansion of the network of soil sampling data technician adding hubs in Nebraska and Saskatchewan. Also at the time of the announcement, FARM.V reported having added four enterprise customers.


c) March 2020; reports multiple agreement: 1) three year service agreement for soil health that solution for a leader in carbon sequestration.(min $0.12M); 2) three year service agreement turn key drone solutions for a leading seed manufacturer. (min $0.10M per annum) and; 3) multi-year agreement with a weather insight company to service and install weather stations. The latter represents a new segment leveraging FARM.V's existing network.


Acquisition

Building on Veritas, Atlas Team, and Better Harvest Inc. FARM.V recently acquired Farm Dog. a customer-facing, mobile and web agriculture data platform which will add 4,000 new clients representing over 2,000,000 acres, including a strategic contract with the United States Department of Agriculture (USDA) that expires in 2025.


Appointment

Craig Hogan CPA, CA as VP Finance and Liron Brish, as VP Product and Sustainability (prior Farm Dog CEO).


Insiders

The most noteworthy insider activities has been Green Castle Resources, an early investor in Deveron. Specifically the purchases of February 11, 2021 (prior FarmDog acquisition) and the sales on March 4-19 2021 were insightful.


In Short

FARM.V continues to efficiently scale its business. This is reflected in the YTD 2020 earnings (revenue and net loss), as well as, the execution of acquisitions, partnerships, and product developments (farm variability, fixed imagery).


During the period, valuation went from $0.21 cents to $0.96 cents (an all-time 52 week high). Today FARM.V closed at $0.65 cents which is still significantly higher than the most recent non-brokered placement warrant (roughly 8M at $0.45 cents) and stock options (1.2M at $0.43 cents). However, the timing on when these get exercised remain to be seen given the trajectory in revenue performance and the recently announced agreements with enterprise clients.


Definitely, Q4 2020 earnings should shed some light on the accuracy of the current valuation premium.

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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