Roto-Gro sales agreement triggers 30% share price jump

By Trevor Hoey. Published at Oct 4, 2017, in Features

Roto-Gro World Wide (Canada) Inc., a wholly-owned subsidiary of Roto-Gro International (ASX:RGI), announced last week that it had received a C$1.1 million purchase order for 100 Roto-Gro Systems from Amfil Technologies Inc. (OTC:AMFE).

This purchase order further consolidates the existing collaborative relationship with Amfil for the integration of its proprietary GRO3 Antimicrobial System with the Roto-Gro Garden, providing enhanced cultivation solutions for medical cannabis and indoor farming industries.

As a backdrop, RGI is an Australian based company with a worldwide exclusive license to manufacture and distribute the Roto-Gro system, an advanced automated Rotary hydroponic vertical farming system. The system can be rolled out to medical cannabis producers, as well as distributors and resellers.

The company also has a worldwide license to distribute the system for all other purposes including pharmaceuticals, health and nutrition supplements, nutraceuticals and perishable foods. Management’s strategy is to focus on expanding into industries that offer synergies, either by forging strategic partnerships or making acquisitions.

Potential investors should note that RGI is still in its early stages and therefore any decision with regards to adding this stock to your portfolio should be taken with caution and professional financial advice sought.

Amfil purchase order triggers share price spike

The receipt of the purchase order from Amfil has triggered a significant share price rerating. Since the announcement, RGI’s shares have increased nearly 30% from 26 cents to 33.5 cents Wednesday morning.

There is the potential for flow on success from this transaction as collaborative initiatives undertaken with Amfil have resulted in an impressive pipeline of prospective clients seeking the significant space, cost and yield advantages of the Roto-Gro System, together with the EcoPrO3 GRO3 all-natural solution to the contamination issues recently plaguing the medical cannabis industry.

The 100 unit purchase order will be allocated to a 4000 square feet portion of a soon-to-be-licensed Canadian cannabis cultivator with a view to producing organic cannabis products in Ontario, Canada.

The client also operates a non-cannabis nursery of perishable foods covering approximately 150,000 square feet contained in several buildings on a single property. RGI is currently discussing the design of a proprietary Rotary Gardens solution for the client’s perishable food operations and will assist it with a staged roll-out of a portion of these premises for perishable foods utilizing the Roto-Gro System together with the EcoPr03 GR03.

Roto-Gro has potential to harness further growth through value-added services

Commenting on these developments, Managing Director of Roto-Gro International, Michael Carli said, “We are very excited about our collaboration with Amfil Technologies Inc. and Amfil’s initial purchase order as it demonstrates the group’s excellent reputation, having played an active role in the food and beverage industry for over twenty years, servicing numerous multinational corporations including Pepsi, Sysco, Sun Pacific and Nestle”.

Given this backdrop, Carli is of the view that this purchase order is the first of many leads developed by the Roto-Gro and Amfil collaboration, providing a platform for strong future sales growth.

Carli also noted that RGI’s in-house design expertise and proprietary technology sets the group apart from its competitors. The company will continue working on collaborative ventures with the expectation that its sales pipeline will drive shareholder value through further sales orders and growth in management valued-added services.

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