- Agricultural technology company CropLogic (CLI) has appointed voluntary administrators to the business
- Going into administration was the only option, in light of the company’s failed attempts to recapitalise and lack of solvency
- CropLogic began a review of its operations and financial situation in early 2020, citing the failure of its trial farm crop
- The company also blamed market conditions outside of its control, including dropping CBD hemp prices, and the COVID-19 pandemic
- CropLogic shares are steady today, trading for 3.1 cents per share
Agricultural technology company CropLogic (CLI) has appointed voluntary administrators to the business.
Earlier this week, the company’s board of directors appointed Craig Melhuish and Christine Johnston from Nexia New Zealand as joint voluntary administrators of CropLogic. The board also resolved to appoint Craig Bolwell from Bolwell Corporate Advisory as the liquidator of Croplogic Australia.
This step into administration was, as the company put it, the only appropriate course of action. Despite its best efforts, CropLogic was unable to successfully recapitalise and is lacking insolvency, meaning the company is unable to repay its debts.
For much of last year, everything seemed rosy for CropLogic. The company’s trial hemp farm in Oregon, operated by CropLogic subsidiary, LogicalCropping, was well underway.
However, disaster struck later in the year, when an unseasonably adverse weather event impacted the trial farm’s hemp crop. This setback was further exacerbated by other issues beyond the company’s control. These included dropping CBD hemp prices, increasing wage pressure, and the impacts of the COVID-19 pandemic.
In addition, CropLogic has also faced disputes with various parties regarding unpaid amounts still owed.
This included a disagreement with NW Ag Solutions, an agricultural contractor in Oregon, relating to costs invoiced for providing harvesting services. NW Ag Solutions placed a lien on the company’s industrial hemp inventory, until the dispute could be resolved.
CropLogic also went up against Bradley and Stanley Shephard, landlords of the company’s subsidiary, LogicalCropping. The landlords also threatened to claim a lien on the company’s hemp crop, until rent payments could be resolved.
In the end, NW Ag Solutions and the Shephard Brothers each settled for 50 per cent of the 2019 hemp crop, plus some equipment.
In early 2020, CropLogic began a review of its operations and financial situation, citing the various market conditions that led to this point. During this process, two of the company’s US subsidiaries, ProAg CropLogic and LogicalCropping, became redundant and were dissolved.
Despite the company’s best efforts to recapitalise, it clearly wasn’t enough. CropLogic’s directors have stated they will now work with the company’s new administrators to achieve the best outcome for stakeholders.
CropLogic shares are steady today, trading for 3.1 cents per share at 10:41 am AEST.