Roots (ASX:ROO) has secured a A$1.66 million private placement financing to sophisticated and professional investors. The private placement represents a price of A$0.070 per share, representing a 20% discount to the 30-day volume weighted average price (VWAP) of A$0.0875.
The funds raised from the placement will be used to commercialise Root Zone Temperature Optimisation (RZTO) technology marketing and sales opportunities in various jurisdictions, expand cannabis growers marketing and sales activity in the United States, fund the pursuit of new cannabis and hemp opportunities and to provide ongoing working capital.
Commenting on the placement, Roots CEO, Dr. Sharon Devir said, “The placement is a strong endorsement of our substantial opportunities to commercialise our RZTO technology across multiple geographies, as we build on the momentum gained from initial sales. The funding secured in this placement will allow us to accelerate our growth in the US cannabis market, over the medium term”.
Roots recently secured three sales in North America’s cannabis sector in about a month, gaining momentum with its RZTO heating and cooling system. The sales include and a A$49,500 sale to Tim Blake of Laytonville, California, a A$42,300 to independent cannabis producer Ivo Lopez of Mendocino Natural Farms in Northern California, and a A$28,000 sale to premier recreational and medical cannabis producer Canndescent.
The sales lay a clear pathway for Roots to continue their momentum into the North American cannabis market, proving the interest and impact the technology can have on precious agricultural resources, especially in areas affected by extreme weather conditions were temperature control is crucial for increasing yield, growth rate and consistency.
RZTO technology optimises plant physiology for increased growth, health, productivity and quality by stabilising the plant’s root zone temperature. RZTO can substantially increase crop quality and yield, mitigate extreme heat or cold stress and improve farm efficiency through quicker crop rotations while using less energy than other irrigation systems and making optimal use of available water.