Technological advances have impacted every aspect of the modern world. We can computerize a cell phone and open a whole new world of gaming, entertainment, communication, and business. Technology has allowed for medical care improvements and more accurate treatment. Advances in technology have even begun a wave of change in the farming industry. These changes will allow farmers to use new technology in order to improve crop yield, decrease fertilizer use, and produce organic produce.

Vertical farming or indoor farming, as the emerging industry is known by, is a new farming technique that features producing food in vertically stacked towers within a controlled-environment greenhouse-like structure in order to achieve optimal produce growth through the use of advanced hydroponics, lighting, controlled-environment agriculture, renewable energy.  The new technology is such a farming innovation that Stratistics MRC estimates that the global vertical farming industry will rise from $1.15 billion in 2015 to $6.31 billion by 2022. In other words, vertical farming is expected to grow at an annual rate of 27.5% through 2022.
Indoor Harvest Corp (OTCQB: INQD)

Overview

One firm that stands among the leaders of the emerging industry is Indoor Harvest Corp. (OTCQB: INQD). The company specializes in the design, development, marketing, and direct-sale of industrial-grade vertical farming fixtures and accessories. More specifically, Indoor Harvest Corp. (OTCQB: INQD) supplies aeroponic and hydroponic systems for organic produce production, systems for biomedical use, and systems for the cultivation and production of cannabis. Unlike their competitors, however, Indoor Harvest Corp. (OTCQB: INQD) is able to fully customize their vertical farming fixtures to meet the unique and individual needs of every client.

Indoor Harvest Corp. (OTCQB: INQD)’s products are no joke. The aeroponic farming company partnered with the Massachusetts Institute of Technology (MIT) in 2013, to supply the company’s patent-pending aeroponic technology to MIT’s Media Lab for their “Changing Places” project. The project allows MIT to use the aeroponic and vertical farming equipment for educational and study purposes.

MITCityFarm Installation. Source: Indoor Harvest Corp
MITCityFarm Installation. Source: Indoor Harvest Corp

The indoor and vertical farming company continues to see its Precision Cannabis Cultivation Platform with integrated HVAC, as a major short-term source of growth for the company. The new disruptive cannabis cultivation technology will allow medical marijuana companies to see a 50% increase in cannabis flower production, while using no bacteria-infested mediums, 95% less water, and 75% less fertilizer than current cultivation methods. In other words, Indoor Harvest Corp. (OTCQB: INQD)’s Precision Cannabis Cultivation Platform will finally take medical marijuana production out of the stone ages and into the industrial-grade future that the marijuana industry is emerging into. In fact, Indoor Harvest Corp. (OTCQB: INQD) was among the first cannabis-related IPO’s to hit that market that did not utilize a reverse merger.

Indoor Harvest Corp. (OTCQB: INQD)’s aeroponic systems are gaining steam within the cannabis industry, after the company signed an agreement with the largest cannabis producing company in the world: Canopy Growth (formerly Tweed Marijuana Inc) (OTC: TWMJF ). The two companies entered into a pilot program agreement in December 2014, in which Canopy Growth will use Indoor Harvest Corp. (OTCQB: INQD)’s aeroponic systems in order to test growth rate, phytocannabinoid production, water use, fertilizer use, labor, etc. Results from the pilot project were recently published by Tweed.

Indoor Harvest (OTCQB: INQD) Holds $25M Sales Pipeline

Being an early pioneer within a rapidly emerging industry, Indoor Harvest Corp. (OTCQB: INQD) is certainly well known and respected within its industry by experts and competitors alike. As more people begin to become educated on the new world of vertical farming, it is likely that Indoor Harvest Corp. (OTCQB: INQD) will be among the handful of companies that are leading the charge.

Being a pioneer, the company has generated attention from companies, government agencies, and other groups that are interested in using Indoor Harvest Corp. (OTCQB: INQD)’s farming technology. Currently, the vertical farming company has three produce and three cannabis projects currently ongoing.

Source: Yahoo Finance Q1 Earnings 1
Source: Yahoo Finance Q1 Earnings 1

ER Michigan has ordered equipment for plant research, which will generate $16,220 for Indoor Harvest Corp. (OTCQB: INQD) once the project is complete. The University of Arizona and PH Research Platform have also ordered produce fixtures, which will generate revenues of $13,637 and $3,765, respectively. Turning to the cannabis projects, Indoor Harvest Corp. (OTCQB: INQD) is contracted with GSS Colorado for their EPCM system for $5,000. OD Farms has a similar EPCM order, but will generate revenues of $35,000 in design fees and potentially up to $2.01 million in revenue for Indoor Harvest Corp. (OTCQB: INQD) upon completion. The company also has a cannabis contract with AQ Maryland for an EPCM project worth $10,000 in design fees and around $3.4 million rough order magnitude (ROM) estimate, but the project has been put on hold due to marijuana political gridlock and delays in the licensing process in the state.

Source: Yahoo Finance Q1 Earnings 2
Source: Yahoo Finance Q1 Earnings 2

Ultimately, Indoor Harvest Corp. (OTCQB: INQD) continues to see major growth in its industry and business over the long term. With an effective $2 million equity purchase agreement with Kodiak Capital Group, LLC, Indoor Harvest Corp. (OTCQB: INQD) will be able to maintain liquidity while finishing up projects and awaiting new projects to begin. Furthermore, with rumors of the DEA and federal government mulling cannabis rescheduling in the near future, Indoor Harvest Corp. (OTCQB: INQD) could be able to vastly expand its EPCM services for cannabis cultivation.

Financials and Competitor Analysis

Turning to valuation, Indoor Harvest Corp. (OTCQB: INQD) has a market cap of $8.02 million as of June 2016. Furthermore, the vertical farming company had 50 million authorized shares, 12.1 million shares outstanding, and a float of 3.6 million shares, as of June 2016. The Company began transitioning from development stage into revenue generating operations late in the 4th quarter 2015. During full year 2015, Indoor Harvest Corp. (OTCQB: INQD) posted total revenue of $89,000, but a net income loss of $1.3 million.

Source: otcmarkets.com 1
Source: otcmarkets.com 1

Due to Indoor Harvest Corp. (OTCQB: INQD)’s unique stance as one of the main firms pioneering in the relatively new industry of vertical farming, the company has very few direct competitors. When considering that other vertical farming companies are more focused on the licensing and distribution side of the emerging industry, Indoor Harvest Corp. (OTCQB: INQD) stands alone due to the fact that the company creates custom vertical farming products and makes its largest share of revenue from construction contracts. However, here are five companies that have similarities with Indoor Harvest Corp. (OTCQB: INQD) that can be used to help to develop an outlook for the vertical farming company:

Village Farms International Inc. (OTCQX: VFFIF) is a hydroponic grower and distributor that also is one of the largest producers of greenhouse tomatoes, bell peppers, and cucumbers in North America. As of June 2016, Village Farms International Inc. (OTCQX: VFFIF) has a market cap of nearly $50.3 million. Furthermore, the hydroponic greenhouse vegetable grower has unlimited shares authorized, a float of 38.8 million shares, and nearly 38.8 million shares outstanding. During full year 2015, Village Farms International Inc. (OTCQX: VFFIF) reported total revenue of $141.9 million and a net income profit of $2.1 million.

Abattis Bioceuticals Corp. (OTCQB: ATTBF) is a biotechnology company that engages in the cultivation, licensing, extraction of chemical compounds, equipment and consulting services to the medical marijuana industry. The biotechnology marijuana company has a market cap of nearly $3.5 million, as of June 2016. Furthermore, the company had unlimited authorized shares, 91.31 million shares outstanding, and a float of 17.01 million shares, as of June 2016. Abattis Bioceuticals Corp. (OTCQB: ATTBF) reported total revenue of $69,000, but a net income loss of $4.2 million, during fiscal 2015.

GreenGo Technologies, Inc. (OTC Pink: GRNH) is a manufacturer of vertical cultivation systems and designs to consumers and industrials farmers. The company entered the vertical cultivation business through its acquisition of Vertical Hydrogarden, Inc. As of June 2016, GreenGo Technologies, Inc. (OTC Pink: GRNH) has a market cap of nearly $13.8 million. As of December 2015, the vertical farming company had 500 million authorized shares and 267.5 million shares outstanding. Furthermore, GreenGo Technologies, Inc. (OTC Pink: GRNH) had a float of 160.4 million shares, as of June 2015. During full year 2015, the vertical cultivation company posted total revenues of $570,000, but a net income loss of $3.52 million.

Terra Tech Corp. (OTCQX: TRTC) specializes in making technologies for controlling agricultural environment. Through its subsidiaries, the company is a producer of local hydroponic-grown produce that is sold through Shoprite, Food Emporium, and other supermarkets across six states. Terra Tech Corp. (OTCQX: TRTC) also engages in producing and cultivating marijuana for the medical cannabis industry.  The hydroponic and medical marijuana company boasts a market cap of $136.6 million, through mid-June 2016. As of March 2016, the medical marijuana grower had over 463.04 million shares outstanding and a float of 216.44 million shares. During full year 2015, Terra Tech Corp. (OTCQX: TRTC) posted total revenue of $9.98 million, but a net income loss of $9.23 million.

Source: Indoor Harvest Corp
Source: Indoor Harvest Corp

Surna Inc. (OTCQB: SRNA) operates in the design, distribution, and manufacturing for controlled environment agriculture systems. Among the company’s top customers include medical marijuana growing companies, indoor agricultural facilities, and other farming consumers. As of June 2016, Surna Inc. (OTCQB: SRNA) has a market cap of $13.5 million. Furthermore, the hydroponic and indoor cultivation company has 500 million shares authorized, 139 million shares outstanding, and a float of 99.6 million shares, as of June 2016. During full year 2015, Surna Inc. (OTCQB: SRNA) reported total revenues of $7.9 million, but a net income loss of $5.3 million.

Summary 

 Overall, Indoor Harvest Corp. (OTCQB: INQD) is a designer, developer, marketer, and seller of industrial-grade aeroponic, vertical farming equipment, fixtures, and other necessary tools for a controlled agriculture environment fixture. Indoor Harvest Corp. (OTCQB: INQD) does not engage in the direct production and manufacturing of marijuana, but the company’s state-of-the-art cannabis aeroponic systems highlight a major area of growth for the company. Unlike competitors that developed their vertical farm technology years ago, Indoor Harvest Corp. (OTCQB: INQD) continues to remain at the forefront of the industry with the ability to conduct full-customization vertical agricultural systems to meet any client’s potential need using the most up to date technologies. Not to mention, a potential marijuana reschedule by the DEA could open up a major new growth opportunity for Indoor Harvest Corp. (OTCQB: INQD) to expand its disruptive cannabis hydroponic technology.

With over $25 million in Indoor Harvest Corp. (OTCQB: INQD)’s sales pipeline, the company could easily see its market cap expand into the double digit millions over the next year or two. The Company also recently announced international expansion plans which could considerably increase the Company’s sales pipeline. In addition, with management seeing the potential for contracts worth over $10 million becoming available to the company by the end of 2016, the vertical farming company is prime to capitalize further from the coming vertical farming boom.

All information contained herein as well as on the EmergingGrowth.com website is obtained from sources believed to be reliable but not guaranteed to be accurate or all-inclusive. All material is for informational purposes only, is only the opinion of EmergingGrowth.com and should not be construed as an offer or solicitation to buy or sell securities. The information may include certain forward-looking statements, which may be affected by unforeseen circumstances and / or certain risks.  This report is not without bias. EmergingGrowth.com has motivation by means of either self marketing or EmergingGrowth.com has been compensated  by or for a company or companies discussed in this article. Full details about which can be found in our full disclosure, which can be found here, http://www.emerginggrowth.com/disclosure-4673/. Please consult an investment professional before investing in anything viewed within. When EmergingGrowth.com is long shares it will sell those shares. In addition, please make sure you read and understand the Terms of Use, Privacy Policy and the Disclosure posted on the EmergingGrowth.com website.

Add a Comment to this Post

comments