Dear EarthRenew Shareholders:
Given the volume of announcements already this year, we thought it would be wise to provide some context to our company’s news flow and transformation. Through the dedication of our people and the continued support of our shareholders, customers, and partners, we are preparing our business to create significant and sustainable value for all our stakeholders. In addition to the positive news, we’re keeping our promise to support a farm system that puts healthy soils and grower profitability back on the table, which is demonstrated in several ways:
EarthRenew Announces Positive Results for 2021 Product Field Trials
At the beginning of the year, we announced positive results from a field trial we began last year to understand the impact of our products on potatoes crops. Outcomes of the trial included growing healthier potatoes at an equivalent marketable yield at a lower overall program cost than the standard synthetic program while improving the microbial diversity of the soil.
When we look at the soil, biological activity is one measure of how ‘alive’ the soil is. Are there earthworms? Bugs we can’t see? Microbes? These critters in the soil are evidence that the organisms that break down matter and make it available to the plant are in abundance. So our trials measured the presence and variety of microbes, and what we thought would be true was. We saw increased microbial diversity and variety in the soil and support of crucial phytohormone pathways (essential to plant growth).
But what does this mean?
- While farmers are still hesitant to adopt regenerative practices due, in part, to the myth that synthetic fertilizer practices produce more crop yield, these results proved that our product produces equivalent or better yield as compared to synthetic products.
- Our product improves soil health, supporting our belief that our fertilizer produces a more balanced ecosystem.
- Incorporating our products as part of a shift to regenerative agricultural practices can lead to savings – even in the first year.
Some may suggest that we should “aim higher” and try to outdo yield from synthetic fertilizers. Instead of merely focusing on overall yields – an ideology that has led to the deterioration of our natural resources – we want to do things differently. And to do that, we have to look under our feet.
Healthy soil and generational farming go hand in hand. This is not a choice between yield or soil health but rather a symbiotic relationship. The growing demand for natural inputs proves this.
Beiseker Facility Advances Regenerative Fertilizer Production
The Beiseker facility has been commissioned, and the first granules are coming off the production line. When Replenish Nutrients began inventing formulations, it started producing blended varieties of the various products.
With the completion of this commercial granule production facility, we can provide customers with granulated versions of the products they have come to rely on. In this form, the products are more accessible to transport and store, and producers can use existing farm equipment (such as the seed drill) for application.
While we will continue to offer a blended version of our products, it is the granulated version that we are using as the foundation for growth. All of the new facilities we are contemplating – including most near-term, the project in Bethune, SK – will use our granulation expertise and do so at scale.
2021 Revenue Announced
Our revenue announcement at the end of January assured the market that our acquisition of Replenish Nutrients and the innovative suite of regenerative products they have developed was a success. We saw revenue of $15.1M last year on a proforma consolidated basis, and most of that revenue came from the sale of Replenish products. With this in mind, we are focused solely on the growth of this business line, adding capacity exclusively for the growth of Replenish branded products.
We are building on the steps already taken to establish a solid foundation and will continue to improve our products. We are funneling resources toward facilities where we can best serve our customers, including the development of the Bethune facility, and two additional sites currently under consideration (one in the US and one more in Canada).
We are evaluating these other locations and stepping through the regulatory hurdles to move those projects along their respective timelines. While we will provide an update of progress on that soon, suffice to say, we are moving through the process required to fulfill our promise of building a 200,000 MT facility onsite at the K+S Potash mine, and growing further beyond that.
As fertilizer prices maintain their unprecedented rise, farmers are reluctant to absorb the price increase and will be looking for more cost-effective solutions. While we have not been immune to the tightening in the Potash market, being influenced even by the macroenvironment internationally in Ukraine, we have been able to meter our costs to produce products at a price that remains attractive to customers.
The opportunities for our business are compelling, and with our strong track record of execution, I do not doubt our ability to realize our vision. Transforming our business and redefining our sector are ambitious undertakings. Still, they are the goals that will enable us to empower farming and agriculture and to create the most value for you, our stakeholders.
I look forward to our journey ahead.
Keith Driver, CEO
Cautionary Note Regarding Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the Offering, such as the expected use of the net proceeds of the First Tranche. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; regulatory risks; and other risks of the energy and fertilizer industries. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release. hare