RE:RE:RE:RE:Let the negotiation begin.For some market based evidence on why a higher takeout price is warranted - Bear Flag Robotics sold for US$200mm while the AJX takeout offer from Kubota is US$73mm (EV of $68mm). Based on the comments in the last conference call it appears that AJX is way ahead in terms of its solutions offerings. So for me I think fair value is somewhere between $1.50 and $2.00 because that's what it's worth to the acquirer (in fact I'd argue its worth closer to $3.00). This is why I'm hopefuly that strong competing offers will come in because there is a large economic incentive for an OEM acquirer to buy the tech, the R&D and engineering team and then incorporate that into their own offerings accross their product suite. PLUS they would own the patents and could really cause havoc for other OEMs and after market resellers. There is a lot of costs/expenses that could be done away with if AJX becomes a division within a larger OEM so profitability even today would be achievable meaning cash burn would halt.
From the Q2 2021 Earnings Call Q - Alright. Thanks. My next question is going to be on Wheelman Whirl, but you already answered that. So thank you. Deere just bought Bear Flag Robotics, a company that had a total funding of $12 million, and most of it went in, in January of this year. It seems to me to be a very narrow product line and really not that deep, and they paid $0.25 billion for it. So how should AgJunction shareholder factor that into their thinking relative to AgJunction's share price valuation?
A - M. Brett McMickell
Right. If you look at the broader market, I mean this is one acquisition. There have been a couple of acquisitions here lately. It's that the autonomous tractors are coming. It's something that a lot of people are working on. And our -- AgJunction has a comprehensive portfolio in the autonomy space from one of the pioneers in the autosteering, which is foundational for being autonomous is you've got to be able to drive up the vehicle and control the vehicle safely. And then all of the other elements that go into autonomy, AgJunction has that comprehensive portfolio today. And then through our modularization approach, we've -- as I've expressed on other earnings calls, we're focused on helping vehicle -- OEMs and farmers through our VAR channel integrate this automation technology and autonomy technology on their vehicles. So we stayed away from developing our own vehicle, let the vehicle manufacturers do what they do best, and that's develop rugged vehicles for the farm or for off-road applications, and then provide them the automation. And we've also looked at this from a retrofit kit.
And so you can see that our partnership with Komatsu is directly aligned with our strategy and providing a retrofit kit. And by providing the retrofit kit, we can address -- quickly address different platforms and provide automation going forward. So the work that we're doing with our OEMs, we're building and developing and improving our modules and those can be directly used as we extend into different vehicles. So AgJunction has got an incredible patented, protected, comprehensive portfolio, where we're already focused on the retrofit. And we are -- we've got partnerships with leading OEMs.So I think we're very well positioned.
Q - Great. It's interesting, one of the largest venture catalyst funding, Bear Flag, I think we underwrote an exit interview kind of a piece, and he said, he invested -- and by the way, almost everything you said, applies to, I think the strategy at AgJunction. But one of the most interesting things he said is, he invested in them because they weren't going to try to build an autonomous tractor, they were going to try to make tractors autonomous, which is the retrofit kit. So anyway, I'm waiting for some of the valuation to rub off on you guys.
A - M. Brett McMickell
Well, I think it's a validation of what we're doing with the modularization. And we've really got great partners. I can't stress that enough with the OEM and VARs. It's been challenging across the globe with what's happened. I know -- but with the autonomy in particular, I'm really excited about the future. And we saw in the press release, this future is near-term. So we've got a great portfolio. We're working with some really good partners in order to deploy autonomy, so very excited.