The evolution of technology has revolutionized the agricultural industry. Agri-tech research has played a major role in ensuring that we get the highest quality of foodgrains, fruits and vegetables around the calendar with the best possible taste and nutrition.
Agri-tech startups receiving funding in various parts of the world are receiving sky-high valuations. Thus, there are very few genuinely undervalued agri-tech investment opportunities available to the average retail investor.
The company that I am looking at today is a recently listed agri-tech player that offers facility and lighting solutions, automated cultivation technologies in controlled environments, integrated artificial intelligence solutions, micropropagation, genetics, fertigation and nutrients services to the farming industry - AgriFORCE Growing Systems Ltd. (AGRI, Financial).
What does AgriFORCE do?
AgriFORCE is a pre-revenue agri-tech company founded in 2017 that has its headquarters in Vancouver, Canada. It is looking to transform various aspects of agriculture ranging from cultivation to manufacturing. The company is developing unique technologies to deliver innovative, trustworthy and financially feasible solutions for the cultivation of high-value crops through their proprietary facility design and their other agri-tech solutions, forming a valuable base of intellectual property.
By utilizing their proprietary facility design as well as hydroponics-based automated growing system, AgriFORCE intends to operate in the plant-based pharmaceutical, nutraceutical and other high-value crop markets. The management believes that this may enable cultivators to grow crops in a controlled environment more effectively and generate better yields. They refer to this environment as the AgriFORCE Growhouse.
The goal of the company is to leverage its technology to ensure that farmers can produce crops in virtually any environmental condition and optimize crop yields to make them reach their genetic potential while substantially eliminating the need for pesticides.
AgriFORCE is developing and acquiring various intellectual properties with the purpose of improving the agricultural value chain. The management is looking to streamline the traditional farming approach by incorporating modern technologies. An example of this is the AgriFORCE precision growth method, which can outperform traditional growing methods and increase yields by utilizing a specific combination of modern and traditional techniques. This revolutionary approach is capable of leveraging the latest technologies in artificial intelligence (AI) and Internet of Things (IoT). It helps farmers create a new green standard for growing crops as well as managing the production process for plant-based products.
Furthermore, it helps to address some of the most significant legacy challenges in agriculture: operational efficiency, environmental impact and yield volumes. The technology provides a highly effective path to higher crop yields, lower farming costs and consistently high-quality products. AgriFORCE’s methodology can be termed as scientific, intricate and success-oriented given the management’s efforts towards building an optimized facility design, AI utilization, IoT and nutrient delivery to help produce larger crops using fewer resources and having a minimal impact on the environment.
Expansion and R&D investments
AgriFORCE’s value is inherently delivered through a system specifically designed to overcome the most significant challenges faced by farmers that can be adapted for a wide range of agricultural sectors. The company started deploying its innovative technology to the rapidly growing hydroponic farming market, more specifically for high-value crops which are inherently tricky to cultivate.
However, the company is currently considering the expansion of its operations in other verticals such as vegetable and fruit cultivation to increase the application of its IP. Additionally, AgriFORCE is heavily investing in research and development to understand how their proprietary facility design and the automated growing system could be deployed in the area of cultivation for plant-based vaccine development. The company expects that the proprietary facility design and automated growing technology will make it a leader in bringing the agricultural industry into the 21st century.
AgriFORCE recently went through its initial public offering, where it offered 3.12 million shares for a $5 price tag, resulting in gross proceeds of about $15.6 million dollars before deducting underwriting commissions, discounts and other offering costs. The stock is now trading at less than half of its listing price and appears to be undervalued, in my opinion.
The funds raised are expected to be used for the commercialization of the company's IP as well as R&D, and the company claims it can start generating a positive top-line by 2022, which should bring a strong spike in the share price. AgriFORCE’s technology to optimize crop production looks set to go leaps and bounds ahead of the current agriculture industry standards, and I believe that the stock could be an excellent agri-tech investment opportunity for investors with a high risk appetite.