GroGenesis, Inc. (fka GROG)

[oxnous]

Just went to their Facebook page. Somehow I missed this Shareholder letter.


GroGenesis Inc

Published by Spencer Schaefer · January 10 at 11:41pm ·
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Dear GroGenesis shareholders,

As we begin 2018, I wanted to take this opportunity to update you--our shareholders--on your investment in GroGenesis. In response to shareholders requesting more information on field testing results, we have attached an overview of GroGenesis with images from the field.

Your company has made significant progress during the Year 2017--- with numerous field tests completed which have validated the efficacy and economic efficiency of AgraBurst PRO™. Prospective distributors, who required they do their own due diligence of AgraBurst PRO™ before signing on as an independent distributor, conducted side by side field testing on a variety of crops ie. flowers, rice, palm, bananas, okra, tomatoes, cacao, and coffee. After recording increases in crop yields from 10% to 40% (see attachment), the company greatly expanded its distribution network to include the countries of Bangladesh, Cambodia, Myanmar, Sri Lanka, Vietnam, Laos, Colombia, the Caribbean, and Cuba. The Company is in advanced negotiations for additional independent distributors in Central and South America and the European Union.

The process of signing up distributors involves the initial field testing conducted by distributors. The distributors are, in essence, "selling themselves" on the value of AgraBurstPRO™. Distributors do not want to risk selling a product that their customers will not be satisfied with in the field. The risk to the distributor's reputation, not to mention the negative economic effects of handling customer complaints, is too high for a distributor to decide to add an unproven product to their product mix. We are proud to have a record of not having one distributor who has conducted a field test decline Grogenesis' offer to be named a distributor of AgraBurstPRO™.

Once a distributor joins the Company's marketing network, the distributor's next step is to obtain the required product registration approval for the sale of AgraBurstPRO™ in the respective country. Upon registration, the distributor is then permitted to import AgraBurstPRO™ for distribution in that country.

It may be worth discussing at this point that there is an element of seasonality in the agriculture industry. Distributors traditionally place orders prior to the beginning of planting seasons and will most likely order immediately before planting seasons and not order just for warehouse inventory. According to our distributors, preliminary orders for AgraBurstPRO™ in this first quarter should be expected. Reorders occur prior to successive planting seasons.

Achievements in 2017

The most significant milestone GroGenesis has achieved in 2017 has been transitioning from a pre-revenue company with a promising product-- to a company SELLING that product to users that recognize the value of that product. 2018 is the year we expect to begin to see healthy quarter to quarter revenue growth.

GroGenesis executed a marketing agreement with Mr. Lynn Griffith (www.lynngriffith.com), to market and distribute AgraBurstPRO™ to the Florida turf markets. Field testing with AgraBurstPRO™ on turf is currently underway with turf suppliers and significant and influential end users. With a 12 month turf growing season in Florida, the market in for AgraBurst PRO™ is a multi-million dollar opportunity for GroGenesis. The Company expects its first revenue from the US to be from the landscape and turf markets including sports arenas, parks, golf courses and private lawns.

The Company announced its first shipments of AgraBurst PRO™ to Genesis Caribbean Solutions, Inc., the exclusive distributor of GroGenesis Inc's proprietary AgraBurst PRO™ in Cuba and the Caribbean. The initial shipments were to the Barbados Agricultural Development and Marketing Corporation (BADMC). http://businessviewcaribbean.com/barbados-agricultral-deve…/. Field testing is continuing in Cuba and other island nations in the Caribbean.

GroGenesis shipped AgraBurstPRO™ to Vita-Agro S.A.S. (http://vitaagro.com.co/es/) in Colombia, the exclusive distributor of AgraBurstPRO ™ in Colombia. The company expects continued expansion of its distribution network throughout South America and Central America during 2018.

The Company was very pleased to announce an exclusive license and distribution agreement with JAK International headquartered in Dhaka, Bangladesh. JAK International was very instrumental in conducting field testing with a number of crops--including field tests on rice where very significant increases in yield of over 40% were recorded. Significantly for the prospects of AgraBurstPRO revenue, Bangladesh is the fourth largest rice producing country in the world. Even a modest market penetration with AgraBurstPRO ™ in rice production in Bangladesh would be economically transformative for GroGenesis.

We introduced AgraBurstPRO™ to South East Asia in a very well-attended Global Distributors Conference in Phnom Penh, Cambodia. Current and prospective distributors, along with potential end user customers, participated in learning about the technical aspects of AgraBurstPRO™. Rice and palm oil producers and fruit and vegetable growers were among the large group of attendees, along with media representatives, non-governmental organizations (NGO's), and fertilizer manufacturers. Ambassadors to Cambodia from Myanmar, Vietnam, India and the United States were distinguished guests to the market launch conclave. Based on feedback from the field after this marketing initiative, we are confident we will add more distributors in South East Asia and begin to procure orders.


The Company expects to announce its first distributor in Europe in the First Quarter. Considering that the European Union has long been a champion of healthy farming--recognizing the value of organic farming practices--Europe and the EU is a potentially lucrative market for AgraBurstPRO. The costs associated with EU farming subsidies to support member countries' farmers can be positively impacted with an agricultural input that can increase farmer's incomes.

GroGenesis's business model is to expand judiciously with a disciplined approach to minimizing fixed overhead costs to shorten our path to bottom line profitability. Distributors are not employees-- but instead are independently owned and operated--- and are compensated on sales after invoices are paid in full. GroGenesis's US-based exclusive organic blender, United Agricultural Services, Inc., has developed into a true partner, providing us with product blending, shipping and logistical support services.

GroGenesis continues to be committed to assisting farmers who have a desire to improve the health of their farms' soil, improve their crop production, reduce their overall production costs and increase their family's income. In 2018, we look forward to growing internationally, booking our first revenue in the US, achieving profitability and enhancing shareholder value.

Thank you for support and patience.

Richard Kamolvathin
President and CEO
GroGenesis, Inc.