Agricultural technology specialist Roto-Gro International (ASX: RGI) is set to roll-out its perishable food and vertical farming divisions backed by a $1.53 million capital raising.
The Melbourne-based company this morning announced it has received firm commitments from a range of professional and sophisticated domestic investors for the placement of approximately 38 million shares at $0.04 to raise the funds.
Each share issue will have attaching options on a 2:3 basis exercisable at $0.05 and expiring at the end of 2023 (subject to shareholder approval).
Settlement of the shares is expected by month end and Roto-Gro expects a general meeting of shareholders to approve the issue of options in the new year.
Peak Asset Management acted as lead manager to the placement and will work closely with the company to drive shareholder value.
Roto-Gro non-executive chairman Michael Carli said the raising is an “important step forward as [we] welcome a number of new shareholders to our register”.
Proceeds will be used to drive the roll-out of Roto-Gro’s perishable food division and expand its presence in the vertical farming space across North America.
Vertical farming is the practice of growing crops in vertically-stacked layers, often incorporating controlled-environment agriculture which aims to optimise plant growth.
An increased crop yield, the smaller unit area of land required and the ability to grow a larger variety of crops at once have seen the vertical farming concept take off in popularity.
Innovations in technology have been able to provide growers with year-round sustainability, operational efficiencies and competitive costs of production when compared to conventional farming.
Market research shows the global vertical farming market was valued at $2.23 billion in 2018 and is projected to reach $12.77 billion by 2026, growing at a compound annual growth rate of 24.6% from 2019 to 2026.
Europe’s vertical farming market currently accounts for over one-third of current global vertical farming production.
Roto-Gro’s rotational garden systems are at the core of the company’s technology and lead the charge in sustainable urban indoor vertical farming.
The technology has undergone constant innovation and optimisation since 2003 to become a patented, commercial-scale cultivation system designed for the consistent production of high-quality crops.
The company claims the use of its garden systems can optimise space (stackable up to three-high) and significantly increase crop yield and quality, while lowering operational costs.