02:09:27 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Clean Seed Capital Group Ltd
Symbol CSX
Shares Issued 58,218,500
Close 2018-08-24 C$ 0.37
Market Cap C$ 21,540,845
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Clean Seed CEO talks rationale for Harvest acquisition

2018-08-27 10:41 ET - Shareholders Letter

Mr. Graeme Lempriere reports

UPDATE TO THE SHAREHOLDERS

Dear shareholders,

We would like to take this opportunity to update you on the progress of the acquisition of Harvest International Inc., and to delve a little deeper into both the acquisition rationale and our strategic thinking going forward. You will recall that on July 17, Clean Seed Capital Group Ltd. proudly announced its agreement to acquire United States-based Harvest International. Acquiring Harvest is part of a broader diversification and strategic growth strategy aimed at expanding Clean Seed's reach into the United States planter market and providing a direct path into the international planter market. Harvest has a full suite of market-accepted, commercially available offerings that include the highly recognized and widely praised LASERPRO1 and LASERPRO2 planter row technologies; and the fully customizable 40-foot-by-60-foot planter frames, including the UltraPlant60.

The benefits to acquiring Harvest are far reaching beyond U.S. marketplace expansion. The consolidation of Clean Seed's management and engineering teams, technologies, patent portfolio, and production infrastructure will strengthen and reinforce our commitment to the advancement of our award-winning CX-6 SMART Seeder platform in Canada and abroad. The farmer-focused technological advantages of both companies will cross-pollinate between the CX-6 SMART Seeder and Harvest Planter, blurring the lines between a planter and a seeder, including the introduction of precision singulation metering at the opener for all crops from corn to canola.

Other important points I would like to communicate are, combining with Harvest:

  • Expands our robust intellectual patent portfolio with the addition of key farmer-focused planter components that provide us a unique advantage in competing in the North American and global planter marketplace. Harvest is one of the few new entrants in the planter market in 25 years and entered by featuring modular customization designed to integrate with the latest precision planting technology. Historically this 6,000-to-8,000-unit-per-year market in NAR is dominated by only three major manufacturers, John Deere, Case IH and Kinze, which represent over 90 per cent of the market sales;
  • Secures a modern 75,000-square-foot state-of-the-art manufacturing facility assuring internal production, quality control and development facilities.
  • Provides direct access into the Harvest International well-developed 120-member regional dealer network across the United States. The existing network of dealers are committed to the success of the Harvest product line and generating robust sales across the U.S. farming belt.
  • Expands our offerings across Canada as we are currently implementing plans that offer our Canadian farmers full access to the entire Harvest International product line through our existing dealer network -- Rocky Mountain Equipment.
  • Strengthens the quality, performance and distribution of the CX-6 SMART Seeder.

As part of our due diligence, we have worked to source strong financial partners that have expressed a deep commitment to supporting our expansion plans by financing this transaction. As Harvest is an established, operating business, our financing strategy is designed around working with these partners to utilize long-term, patient debt financing to avoid significant shareholder dilution while retaining earnings to grow the business. We are actively working toward closing the transaction, which includes completing a financial statement audit to align Harvest as subsidiary for reporting purposes.

As we advance to closing the combination over the coming months we will be announcing our business plan for the combined Clean Seed and Harvest operations, including providing key details on the current and prospective operations to allow shareholders both new and veteran to better evaluate their investment decisions in regard to CSX.V. We also note that since the announcement, Clean Seed personnel have been under a trading blackout since there remains limited material information about Harvest available to the marketplace.

The acquisition of Harvest International is a robust profitable complementary business unit to the CX-6 SMART Seeder and sets the stage for rapid revenue growth while positioning Clean Seed as a future original equipment manufacturer (OEM) and provides a catalyst for additional strategic initiatives. We look forward to further updating you on our progress with Harvest and other related growth opportunities. To our loyal shareholders and the farming community on both sides of the border, thank you for your continuing support and commitment to our collective mission of disrupting agriculture through technology.

On behalf of the board,

Graeme Lempriere

President, chief executive officer

About Clean Seed Capital Group Ltd.

Clean Seed is driving technology development in modern agriculture by rapidly designing, patenting and producing highly advanced seeding and planting technologies. The company is the creator of the world's first and only award-winning SMART Seeder technology, which is secured by Clean Seed's portfolio of intellectual property. Its CX-6 SMART Seeder has set the seeding equipment benchmark by enabling true execution of high-resolution seeding prescriptions at each square foot of the field to suit soil conditions and fulfill agronomist recommendations, an industry first.

We seek Safe Harbor.

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