Plant Impact: positioned to benefit from increased need for food productivity

Plant Impact (AIM:PIM) specializes in plant stress relief by solving the problems of abiotic stress including temperature stress, salinity stress, drought stress, and light stress. Abiotic plant stress is a significant problem in agriculture, and Plant Impact provides a new approach to crop nutrition and crop health by giving growers significantly increased marketable yields and more consistent quality with reduced environmental impact. The technologies offered by the Company have given rise to a range of stand-alone products but can also be incorporated into fertilizers and pesticides to enhance their performance.

Technologies and Products:

Plant Impact has developed a range of products that address the problems and issues surrounding the majority of the agrochemical industry. The agricultural industry faces enormous challenges to find effective, sustainable and ecologically sound crop nutrition and pesticide solutions. The growing world population requires more food, while the prospect of global warming threatens to make agricultural growing conditions more demanding. The Company focuses on “green” solutions for growing crops in ways which are better for the environment, the grower, and the consumer. Its solutions also improve the marketable yield, quality, shelf life, and profitability of agricultural crops.
The technologies are patented and offer an alternative to both biotechnology and conventional agrochemical solutions. The current environment for reduced use of chemicals in agriculture is being driven by consumer demand, lawsuits, and legislation.

·    Alethea – Alethea is a powerful plant stress reliever and has a unique abiotic stress tolerance chemistry that together with plant nutrients improves growth during stressful climatic conditions. Year on year results have shown significant yield increases with a final year average yield in excess of 67%. The Alethea component of the trial involving cocoas plants enabled the cocoa plant to cope more effectively with the stress of Black pod and Frosty pod diseases while the PiNT component promoted better nutrient uptake.

·    PiNT – Plant Impact Nitrogen Technology – PiNT technology is a yield maximizer. It involves a unique controlled Nitrogen release technology that promotes improved growth and vigor. It slows the natural breakdown of desirable amine and ammonium nitrogen to undesirable nitrate and minimizes leaching. In addition, PiNT technology unlocks trace elements around the roots, even in calcareous or high pH soils, making these elements ready for efficient uptake by the plant. This results in a ‘no-cost’ nutrient supply, improved quality and yield, reduced pesticide/fertilizer input, lower costs, and increased profits. The Company recently signed an extramural agreement with the United States Department of Agriculture for extensive trials on PiNT.

·    Speedo - Speedo technology accelerates plant maturation. Speedo technology has the ability to increase the efficacy of nutrient products. It accelerates reproductive growth leading to faster and better color, flowering, sugar production, and maturity. Earlier yielding crops give the option for additional harvest and or prolonged harvests of extra crops. Speedo technology can be incorporated into other Plant Impact products such as the PiNT technology range as well as into other manufacturers’ fertilizers under license.

·    CaT- CaT technology is a calcium absorption aid. In trials it has been found to deliver calcium to the plant up to 50 times more effectively than traditional calcium products and with fewer applications and less input.  It is geared to improving plant cell function under stress conditions, improving quality and yield, solving physiological disorders caused by calcium deficiency, and reducing spoilage of food during storage. The principal product marketed under the CaT technology banner is currently known as InCa. This product is showing exceptional results around the world.

·    BugOil – BugOil® is a patented plant insecticide based on natural oils that targets sap-feeding pests including whiteflies, aphids, and mites. Trials concluded in 2008 showed BugOil® achieved 100% control of mites within 3 days compared with 14 days for standard treatments. These results certainly caught the attention of several large crop protection companies, among them Arysta Lifescience.

Arysta LifeScience BugOil Agreement

Based in Tokyo, Arysta LifeScience markets a portfolio of more than 150 products in more than 125 countries worldwide with a focus on emerging markets. Arysta’s annual revenues exceed US$1.3 billion.

In the first quarter of 2010, Plant Impact signed a licensing agreement with Arysta to license out BugOil. Plant Impact also entered into an exclusive evaluation, development, and distribution agreement with Arysta covering the Company's InCa, Balance, and Cocoa Stress Tolerance products, expanding its geographical coverage from 24 to 52 countries. The deal is expected to increase the number of field trials of Plant Impact’s products to well over 500 in the next 12 to 18 months. The agreement covers North America, Central and Latin America, Europe, Africa, and the Far East.

Specific terms were not disclosed, but Plant Impact said it was “potentially a multi-million pound agreement including milestone payments and royalties.” Plant Impact confirmed that it will be eligible to receive three milestone payments: one upon signing the agreement, a second when four regulatory milestones are achieved, and a third when three sales milestones are achieved. Plant Impact also stated that it would receive royalty payments on sales of BugOil® “in line with the usual rate of royalty payable in the agrochemical industry.”

The agreement gives Arysta a twenty year exclusive world-wide license to manufacture, sell, and sub-license BugOil® in all markets except the home and garden and animal health markets

In February 2010, Arysta loaned Plant Impact £0.75 million.

Distribution

Plant Impact markets products through a combination of distribution and licensing agreements mainly in the U.S. and Europe. The Company continues to expand its distribution network to international markets including a regional office in Jordan to service the Middle East and North Africa

Financial

Plant Impact’s revenues for the six months ended 9/30/09 amounted to £0.96 million compared to £0.23 million for the equivalent period of 2008. The increase in revenues was largely due to the sales of nutrient products in the U.S. and milestone payments for the pesticide product BugOil after the company entered into its agreement with Arysta. Losses narrowed to £0.88 million from £1.3 million a year ago.

Plant Impact has also announced an equity raise of £2.1 million to hire new sales and marketing personnel to increase sales across the company’s existing markets and accelerate the roll-out of its new productions into new markets.

Summary

Plant Impact’s revenues have the potential to accelerate on the strength of the deal with Arysta. The shares are not without risk as the company is still at a very early stage in terms of product launch. However, Plant Impact has developed a portfolio of fertilizer and pest control technologies with a wide range of agricultural and horticultural applications. Plant Impact and its technologies are well positioned in the industry and supported by macro trends in population growth.

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