AgriFORCE Growing Systems, Ltd. (NASDAQ: AGRI) is an AgTech company that has a main focus on developing high quality plant-based foods and commercializing crops grown through its solutions. Recently, the company announced an LOI to acquire Deroose Plants which led AGRI stock to increase 100% on the news. With the agriculture industry gaining momentum lately due to the conflict in Ukraine, AGRI stock could be one of the hottest agriculture stocks this week.
AGRI Stock News
Attempting to venture into new markets, AGRI has entered into a definitive agreement to acquire Delphy Groep – a Dutch AgTech consultancy firm – for $29 million. Through Delphy, AGRI will have operations in Europe, Asia and Africa, as well as bringing in a profitable company which reported revenues of $28 million in 2021.
Additionally, the acquisition is expected to help AGRI deploy its IP through Delphy’s experience, customer base, and industry relationships. At the same time, AGRI will be able to further develop its IP by using Delphy’s facilities and government relationships.
At the same time, the company announced the execution of a convertible debt facility of up to $20 million. According to this, AGRI is set to receive $10 million – with the right to an additional $10 million subject to certain conditions. Through these proceeds, the company is expected to finance its acquisition of Delphy – which CEO Ingo Mueller expects to “be transformative for the Company, as it significantly enhances the value proposition that we can offer customers in the AgTech industry.”
In addition to acquiring Delphy, AGRI has signed a LOI to acquire Deroose Plants – a Belgian company that operates in tissue cloning of plants. The $69 million acquisition is set to provide AGRI with over 2 million square feet of laboratory and greenhouse facilities as well as multinational operations in Europe, North America, and Asia.
Through Deroose, AGRI could use its robust IP portfolio to increase crop yields while reducing the environmental footprint. AGRI could also witness substantial financial growth since Deerose’s revenues for 2021 were over $40 million. With these acquisitions in mind, AGRI has the potential to emerge as a leader in the AgTech industry using both the experience and facilities it would receive from Delphy and Deroose.
In addition to acquisitions, the company has entered into a worldwide licensing agreement with Radical Clean Solutions to use its hydroxyl generating device in closed environment agriculture and food manufacturing. With its patent already pending, the new device aims to destroy airborne and surface-based mold, bacteria, viruses, and even COVID19 in real time. Given that mold contamination affects almost 25% of the world’s crops, the device has the potential to see high demand across the agricultural industry.
Meanwhile, AGRI’s patent application – “Structures for Growing Plants” ie. its AgriFORCE GrowHouse Facility – has been published by the US Patent and Trademark Office. The patent features the design elements of AGRI’s IP GrowHouse and its operational systems, leading the company’s President to say that its “facility design is far more cost effective, energy efficient, and allows for increased growing area, enabling our customers to deliver significant yield gains compared to traditional indoor growing systems.” He then added that this is only the first in a series of patent applications related to the company’s proprietary facilities.
Through utilizing GrowHouse, AGRI plans to redefine closed environment agriculture by offering a more efficient solution than the current systems. Additionally, GrowHouse will be modified organically to include all solutions for urban and suburban environments. Excited about the company’s IP, Mueller commented “the overall market feedback on our facilities has been encouraging, given the improved yields and operating economics”.
Despite all of this, AGRI’s main focus is to target the wheat market through its brand un(Think) Foods. Last February, the company announced its plans to pilot test its first branded flour product later this year. It is worth noting that the company’s wheat flour has shown great results after testing of its nutritional values showed its has 43 times more fiber, 3 times more protein and 80% less starch than normal flour.
With operations expected to begin in the second half of 2022, AGRI has completed the engineering work for it manufacturing line in Saskatchewan, Canada – an area known for wheat agriculture. To ensure that there is demand for a wheat-based flour alternative, AGRI has already conducted consumer research which showed an unmet demand for its product.
In light of this, AGRI stock has been gaining attention leading to a huge trading volume of around 84 million – compared to its average volume of 5 million. Considering its solid share structure with an OS of 15 million and a low float of 11.5 million, AGRI stock has the potential to continue its surge as the company releases more news.
Media Sentiment
@notoriousalerts predicted that AGRI stock would surge considering its trading volume.
@Mini_Tradez has been alerting AGRI since the start and it looks like its starting to pay off
Technical Analysis
AGRI stock is currently trading at $3.95 with a resistance at 4.59. The stock shows a main support at 3.90 and a secondary support at 3.40. Accumulation is in a steep downward trend – meanwhile the RSI is at 62 indicating the stock is approaching overbought. The MACD is bullish but approaching a bearish crossover.
While accumulation is dipping, this could be the result of profit-taking. Considering that the RSI is in overbought territory, AGRI stock could witness a drop as the RSI regulates – which would be a good entry point for bullish investors as AGRI prepares to retest its resistance.
AGRI Stock Forecast
Considering its efforts to grow internationally, AGRI has the potential for major financial growth given the revenues of its acquisition targets. Additionally, the anticipated release of AGRI’s wheat flour could lead to significant sales growth due to the demand for wheat-based flour alternatives. Considering its low float, AGRI stock could continue its run as demand for wheat and other commodities intensifies.
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