Note: This is a corrected version of what went out in the newsletter. My apologies to Graeme and Agam for not getting this right.
Not much volume as this former shit show trades on the NEX board. Clean Seed Capital has transitioned from trying to manufacture its own smart seeder planting equipment, and practically bankrupting the company, to a synthetic licensing model.
Their licensing and white-label manufacturing agreement with Indian industrial conglomerate Mahindra allows Clean Seed to leverage their IP without the capex and infrastructure required to build their own manufacturing plant. Mahindra is building Clean Seed’s technology, known as the Mini Max smart seeder.
Mahindra secured a license to manufacture and distribute throughout India, Turkey, and other regions. At the same time Mahindra builds the machines directly for Cleanseed for other jurisdictions around the world through the white-label manufacturing agreement. Clean Seed’s distribution agreements with large dealers in Brazil, Mexico, etc cover territories where Mahindra is not a major player.
Clean Seed Chairman and CEO Graeme Lempriere has done the job of pulling the company back from the brink and getting it ready to trade once again on the TSX Venture. With up to date financials and an annual general meeting in the books, the company is poised to receive revenue from the first batch of Mahindra-built smart seeders.
With a TSXV uplisting, Clean Seed can run a small placement, convert debentures to equity and have the profile of the company change almost overnight into an asset light, cash generating pseudo-licensing play.
It’s taken a long time to accumulate this position. If Graeme can continue threading the needle Clean Seed is a potential 10-bagger based on my 9.5 cent cost basis.
