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Farmers Edge co-founder Wade Barnes is stepping down as CEO after yet another disappointing quarterly financial report from the Winnipeg agriculture technology vendor.JOHN WOODS/The Globe and Mail

Farmers Edge Inc. FDGE-T announced Friday that its chief executive officer, Wade Barnes, had resigned and that it had tapped its majority owner, Fairfax Financial Holdings Ltd., for a $75-million loan, adding to a string of disappointments for one of the first Canadian companies to lead an unprecedented surge of technology IPOs last year.

The late Friday announcements accompanied yet another underwhelming quarterly financial report from the Winnipeg agriculture technology vendor since it went public just over one year ago.

Farmers Edge said it booked $13.3-million of revenue in the fourth quarter ended Dec. 31, down from $19.1-million in the same period a year earlier as the total number of acres covered monitored by its technology fell by 15 per cent, to 18.9 million, from a year earlier. Analysts on balance had expected revenue to hit $17-million in the quarter.

Farmers Edge booked a net loss of $19.7-million in the quarter, or 47 cents a share, while its adjusted operating loss more than tripled year over year, to $16.2-million.

“It was a disappointing quarter with the numbers coming in well below our conservative expectations that reflected our downgrade of the stock” last August, National Bank Financial analyst Richard Tse said in an e-mail. “In light of the poor execution since coming to market, it’s not surprising that Wade is stepping down as CEO.”

Farmers Edge was one of the first companies last year to kick off what proved to be a record year for Canadian technology IPOs on the Toronto Stock Exchange, as 16 such companies went public. The company, co-founded in 2005 by Mr. Barnes, a former agronomist, collects data on a range of crop, land and weather conditions from sensors on millions of acres of agriculture land. It then uses artificial intelligence and predictive modelling to suggest the right inputs to help farmers improve yields.

At the time it went public, Farmers Edge was trying to grow while shrinking its relative costs to do so. It had sustained heavy losses as it scaled up and was competing against giants John Deere DE-N and Bayer BAYRY and continued to face losses heading into its public offering.

But Farmers Edge had also drawn support over the years from high-profile private financiers, including Silicon Valley venture-capital heavyweight Kleiner Perkins and Toronto’s Osmington Inc., controlled by David Thomson (Woodbridge Co. Ltd., the Thomson family holding company, owns The Globe and Mail). By the time of the IPO, Fairfax had become its majority shareholder, with Osmington retaining the right to name one director to the board.

Despite its heavy losses, Farmers Edge came to market early last year at a time of heightened public investor interest for up-and-coming Canadian technology companies. Farmers Edge boosted the size of its TSX offering in February, 2021, to $125-million from $100-million after facing brisk demand from institutional investors and went public the following month at $17 a share. The stock jumped 17.5 per cent on its first day of trading.

But 2021 proved to be a tough year for new Canadian tech issues as many stumbled after their TSX debuts in their early months of trading. As the spectre of rising interest rates weighed on early-stage technology companies and depressed valuations, all but one of the Canadian tech companies that went public on the TSX last year dipped below their issue prices, and most are still underwater today.

However, while most of them have at least delivered on their financial promises, Farmers Edge stood out for repeatedly falling short of investor expectations. The company also replaced its chief financial officer when David Patrick left just six months after the IPO.

By this week, Farmers Edge had become one of the worst performing new issues of last year, closing Friday at $2.93. That was down 2 per cent on the day and down 83 per cent since issue.

Farmers Edge said Fairfax had extended a $75-million secured credit facility that will bear interest at 6-per-cent annually and will mature on Jan. 31, 2025. Farmers Edge said it would use the money for working capital and general corporate purposes. Its cash position has shrunk to $54.7-million as of Dec. 31 from $120.4-million nine months earlier.

In a release, Farmers Edge chairman Bill McFarland thanked Mr. Barnes “for his dedication, vision and significant contributions.” Mr. Barnes said in a statement that his time with the company had been “truly rewarding,” adding, “I am confident that the company will continue to grow, achieve important new milestones in its development and deliver on my vision.”

Mr. Barnes will remain a director of the company, which said Friday that it had begun a search for his successor as CEO.

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