Advanced Growing Systems, Inc. (AGWS.ob)

WARNING: The share structure for lower exchange companies might change in light of ongoing dilution. This can often be expected with start-up companies.

Foreseeable market trends are the best friends to savvy investors. So when multiple trends intersect in a rare crossing of a public company’s primarily line of business, discovering the right time to invest becomes an immediate priority. Advanced Growing Systems Inc. (AGWS.ob) finds itself directly in the crosshairs of two such intersecting trends – the fertilizer market & the organic product market.

Advanced Growing Systems Inc. (AGWS.ob) is the publicly traded company comprised of two subsidiaries – Advanced Nurseries, Inc. and Organic Growing Systems, Inc. Advanced Nurseries is comprised of a group of wholesale commercial nurseries strategically located on the corners of Atlanta, Georgia. Organic Growing Systems is the superior organic fertilizer manufacturer with a recently acquired production facility based in Monticello, Mississipi. Advanced Growing Systems (the Company) recently began formal operations in April 2006. By fiscal year-end in September 2007, the Company had accomplished $10.7 million in total revenues (for fiscal year 2007 only) with ending gross profit margin around 25% for both subsidiaries.

The fertilizer market in the United States is estimated to exceed $40 billion annually. With the steadily growing need for biofuels, the root cause behind increasing fertilizer demand, fertilizer prices have significantly increased and look to do so as the demand for green energy continues to grow. As of January 2008, fertilizer prices were valued 130% over January 2000 levels. Perhaps even more intriguing is the fact that practically all of the market is comprised of synthetic fertilizers.

In respects to the industry, organic fertilizers address the problem of contamination and hazardous materials. Synthetic fertilizers pose constant threats to children and pets while rain run-off has historically carried chemical fertilizers into water supplies. Municipalities have already begun to shift their attention to finding organic fertilizer solutions. One of the Company’s original and largest clients is the Harris County Flood Control District. In January 2008, the Company extended their municipal client list to include two more cities in Florida.

Notes of Interest:

1. AGWS ascended from the Pink Sheets to the OTCBB in late Feb 2008, a commendable action that is very rare on the lower exchanges.
2. The Company’s fertilizer production facility has increased shifts as demand continues to exceed supply
3. Both subsidiaries continue to maintain high growth rates
4. Atlanta, Georgia has just emerged from one of its longest droughts in city history (outdoor water use was completely prohibited)
5. Advanced Nurseries sustains the Company with cash flows vital for Organic Growing Systems where the organic fertilizer will become the driving product of the Company’s future.
6. “Southern Migration” has accounted for increasing home & garden demand.
7. The Company’s unique fertilizer requires 1/3 water than synthetic fertilizer and gives fresher produce thanks to micro-nutrient organic chemistry.
8. Rising global nitrogen and phosphate prices increase synthetic fertilizer costs
9. Fertilizer client feedback has expressed admirable results with low water usage, high produce quality, and cost savings.
10. The Company has channels of future synergies through their 2 subsidiaries and currently advertises internally to retained clients.
11. VERY small investor base (~100 investors in late 2007), VERY tight share float (~12.5 mil)
12. Company’s current annual revenues are almost 3x current market capitalization.
13. Company only acquired its 2^nd and 3^rd nurseries along with its fertilizer manufacturing facility in 2007.
14. Company’s formal declaration is for a 100% annual growth rate in this phase.
15. Company has not significantly diluted, another atypical characteristic not commonly found on the lower exhchanges.
     

3/22/08:

Price = $0.20
O/S = 23.26 Mil (as of Jan 22, 2008)
Mkt. Cap. = ~$4.65 Mil