Agroz Inc.

Agroz Inc. operates in the agricultural technology (AgTech) and controlled environment agriculture (CEA) vertical farming industry, a sector that is still relatively new and subject to many uncertainties ¹. The global agricultural technology market was valued at USD 18.24 billion in 2024 and is projected to grow to USD 43.37 billion by 2029, representing a CAGR of 16.63% ². The global indoor farming market was valued at USD 45.97 billion in 2024 and is expected to reach USD 138.09 billion by 2033, with a CAGR of 13% ³. The global vertical farming market was valued at USD 5.6 billion in 2022 and is projected to experience a CAGR of 20.8%, reaching $21 billion by 2029 ⁴. The vertical farming market in the Asia Pacific region reached US$2.43 billion in 2023 and is projected to grow at a CAGR of 29.2% from 2024 to 2030 ⁵. Within Malaysia, agricultural production is projected to grow at a CAGR of 0.6% from 2021 to 2026, reaching USD 24.9 billion by 2026 ⁶, and agriculture was the third-highest GDP contributor to the Malaysian economy, constituting approximately 8.93% of its GDP in 2022 ⁷. The Malaysian government has established an action plan that prioritizes the acceleration of controlled environment agriculture, particularly the production of vegetables through plant factories ⁸.

The company believes it is a fully vertically integrated agricultural technology provider, a status it believes no other company in Malaysia or Southeast Asia currently holds ⁹. Its primary competitors in the design and construction of indoor CEA vertical farms include Excel Group and CityFarm Technologies Sdn Bhd ¹⁰. In the sale of fresh produce, competitors include Boom Grow, Cultiveat, Agroto, and Monoluxury ¹¹. The company also faces competition from vertical farming startups such as Farmy ¹², and established agricultural companies such as Agroto and Monoluxury ¹³. The agricultural technology industry in Malaysia is becoming increasingly competitive ¹⁴. The company's competitive strengths include its vertical integration, proprietary CEA software, and strategic partnership with AEON Co. (M) Berhad ¹⁵.

Agroz Inc. is a vertically integrated agricultural technology company that designs, innovates, develops, builds, operates, and manages large-scale, commercial-grade indoor CEA vertical farms ¹⁶. The company primarily derives its revenue from five sources: designing and/or constructing indoor CEA vertical farms, operating and managing indoor CEA vertical farms, selling CEA vertical farms, selling fresh produce from farms operated, and trading fresh produce ¹⁷. The company offers a comprehensive set of farm solutions, starting with the design phase and continuing into construction and implementation, integrating its proprietary Agroz OS system ¹⁸. Agroz OS integrates both hardware and software solutions, including digitally automated hardware systems for managing environmental conditions, irrigation, lighting, and energy use, as well as software solutions for communication, AI agents, and enterprise resource planning ¹⁹. The company also generates revenue from the sale of fresh produce, with its key distribution avenue being direct distribution to wholesale distributors and retailers, including large supermarket brand retailers in Malaysia such as AEON and Village Grocer ²⁰.

The company's product and service offerings include the design and construction of indoor CEA vertical farms, which involves vertical farm layout planning, infrastructure design, framework erection, structural construction, equipment set-up, and implementation of Agroz OS ²¹. The company also offers operation and management services for CEA vertical farms, overseeing day-to-day operations and performing regular maintenance ²². The company sells CEA vertical farms to potential buyers once they are fully operational and optimized, with each farm including Agroz OS ²³. The company generates revenue from the sale of fresh produce, having successfully grown 50 different crops and currently selling 21 varieties on the market ²⁴. The company also generates revenue from trading activities by buying and selling fresh produce from local farms and other wholesalers ²⁵. The company's fresh produce offerings include leafy greens, herbs, kale, edible flowers, microgreens, and fruiting vegetables ²⁶. In 2024, the company focused more on the superfood category, including baby spinach and microgreens, and anticipates increasing promotion of existing superfoods products such as kale, arugula, and wild rocket ²⁷. The average price for superfoods is MYR 9.18, with a gross profit margin of 25%, while the average price for non-superfoods is MYR 3.37, with an average gross profit margin of 5% ²⁸.

The company's CEA vertical farms include a 10,021 square foot indoor vertical farm in Kota Damansara and a 5,239 square foot EduFarm at the AEON Mall Alpha Angle in Wangsa Maju, Kuala Lumpur ²⁹. The EduFarm is recognized by the Malaysia Book of Records as the largest indoor vertical farm located inside a shopping mall in Malaysia ³⁰. In June 2024, the Malaysian government recognized the EduFarm for meeting its standards for Malaysian Good Agricultural Practices (myGAP.PF) in being pesticide free, a certification covering 20 types of vegetables ³¹. The company launched Agroz Copilot in October 2025, a proprietary software application supported by generative AI technology made possible through Microsoft Azure OpenAI Service and Microsoft AI Cloud Partner Program ³². The company's CEA methods and technology solutions have allowed it to yield approximately three tons of green produce every year for every 300 square feet of space, stacked 8 levels high, and use only five percent of the water and nutrients required compared to conventional agricultural methods ³³. The company is currently a Microsoft Independent Software Vendor (ISV) and a Microsoft AI Cloud partner ³⁴. The company also introduced a unique concept called "Farm In Supermarket," allowing shoppers to select and purchase vegetables of their choice from a showcase display of a CEA vertical farm located at AEON MaxValu Prime ³⁵.

For the fiscal year ended December 31, 2025, total revenue was MYR 73,130,666 ($18,030,243), compared to MYR 40,860,882 in the 2024 fiscal year, representing an increase of MYR 32,269,784, or approximately 79.0% ³⁶. Gross profit increased by MYR 7,069,617, or 47.7%, from MYR 14,815,172 in the 2024 fiscal year to MYR 21,884,789 ($5,395,658) in the 2025 fiscal year ³⁷. However, overall gross profit margin decreased from 36.3% in the 2024 fiscal year to 29.9% in the 2025 fiscal year ³⁸. Profit for the year was MYR 6,583,003 ($1,623,029) in the 2025 fiscal year, compared to MYR 3,512,168 in the 2024 fiscal year ³⁹. The company incurred negative operating cash flows of MYR 6,284,550 ($1,549,445) in the 2025 fiscal year ⁴⁰. As of December 31, 2025, the company had cash of MYR 1,478,091 ($364,421) ⁴¹.

The company's revenue from offering farm solutions increased by MYR 3,573,376, or 17.2%, from MYR 20,834,674 in the 2024 fiscal year to MYR 24,408,050 ($6,017,764) in the 2025 fiscal year ⁴². Revenue from the sale of fresh produce increased by MYR 28,696,408, or 143.3%, from MYR 20,026,208 in the 2024 fiscal year to MYR 48,722,616 ($12,012,479) in the 2025 fiscal year ⁴³. The company's total costs of revenue increased by MYR 25,200,167, or 96.8%, from MYR 26,045,710 in the 2024 fiscal year to MYR 51,245,877 ($12,634,585) in the 2025 fiscal year ⁴⁴. Selling and promotion expenses increased by MYR 1,700,847, or 815.3%, from MYR 208,618 in the 2024 fiscal year to MYR 1,909,465 ($470,775) in the 2025 fiscal year ⁴⁵. General and administrative expenses increased from MYR 6,099,464 in the 2024 fiscal year to MYR 6,817,174 ($1,680,763) in the 2025 fiscal year ⁴⁶. Finance costs decreased by MYR 573,704, or 34.3%, from MYR 1,673,335 in the 2024 fiscal year to MYR 1,099,631 ($271,111) in the 2025 fiscal year ⁴⁷. Total income tax expenses increased by MYR 2,574,133, or 90.8%, from MYR 2,833,617 in the 2024 fiscal year to MYR 5,407,750 ($1,333,272) in the 2025 fiscal year ⁴⁸.

The company has concluded that there is substantial doubt about its ability to continue as a going concern within one year from the date that its consolidated financial statements for the 2025 fiscal year were issued ⁴⁹. To meet cash requirements for the next 12 months, the company plans to seek additional equity and debt financing from both public and private markets, focus on improving operational efficiency and implementing strict cost controls, and develop commercial joint ventures, project-based collaborations, and technology licensing arrangements ⁵⁰. There can be no assurance that the company will be successful in achieving its strategic plan or that future capital raises will be sufficient to support ongoing operations ⁵¹.

The company intends to pursue a growth strategy for the expansion of its operations by further developing and improving its products and services ⁵². The company launched Agroz Copilot in October 2025, a proprietary software application supported by generative AI technology, which the company believes will aid human vertical farm operators in crop production and make vertical farming more efficient for clients ⁵³. The company is developing a comprehensive Robotics AI Platform, with advance payments to Braiven Co., Ltd., a related party, increasing from MYR 5,517,306 to MYR 9,566,537 ($2,358,614) ⁵⁴. The company also has prepayments to third-party vendors for e-commerce website design, ERP system, and Robotic AI, which increased from MYR 1,406,508 to MYR 1,891,990 ($466,467) ⁵⁵. The company anticipates increasing its promotion of existing superfoods products such as kale, arugula, and wild rocket, as superfoods sell at higher prices and price margins ⁵⁶.

The company's gross profit margin for offering farm solutions decreased from 57.6% in the 2024 fiscal year to 48.8% in the 2025 fiscal year, as the 2025 revenue consisted entirely of construction services which carry relatively lower margins than design consultancy ⁵⁷. Direct gross profit margin for fresh produce sales improved from 15.9% (or 14.1% after allocating planting related costs, depreciation, and farm labor) in the 2024 fiscal year to 22.0% (or 20.5% comprehensively) in the 2025 fiscal year, primarily reflecting economies of scale in procurement and the introduction of higher-margin produce varieties ⁵⁸. The overall gross profit margin decreased from 36.3% in the 2024 fiscal year to 29.9% in the 2025 fiscal year, primarily attributable to a strategic shift in revenue mix, where lower-margin fresh produce sales expanded from 49.0% of total revenue in the 2024 fiscal year to 66.6% in the 2025 fiscal year, and the decrease in farm solutions margin from 57.6% to 48.8% due to the transition from design services to construction execution ⁵⁹.

The company's capital expenditure mainly arises from contracted purchase of property, plant and equipment and intangible assets ⁶⁰. The company's contractual capital expenditures commitment amounted to MYR 11,995,191 ($2,957,394) in the 2025 fiscal year ⁶¹. The capital expenditure mainly arises from certain purchase contracts of IT software such as E-commerce website design and Enterprise Resource Planning (ERP) system signed with suppliers and the developments of comprehensive Robotics AI Platform ⁶². The majority of this contractual commitment is due within five years and upon the project progress ⁶³. The company's net cash used in investing activities was MYR 5,577,937 ($1,375,231) in the 2025 fiscal year, consisting of payments for purchases of property, plant and equipment of MYR 1,043,134 ($257,183) and payments for purchases of intangible assets totaling MYR 4,534,803 ($1,118,048) ⁶⁴.

The company's primary source of liquidity has been operational sources of cash, financing from third-party investors, related parties, and a bank loan ⁶⁵. In the 2025 fiscal year, net cash generated from financing activities was MYR 12,687,796 ($3,128,155), primarily consisting of gross proceeds from the issuance of ordinary shares upon IPO of MYR 12,478,247 ($3,076,491), advances received from related parties of MYR 3,443,291 ($848,938), and proceeds from secured bank borrowings of MYR 808,000 ($199,211) ⁶⁶. The company does not expect to pay cash dividends in the foreseeable future, anticipating that it will retain any earnings to support operations and to finance the growth and development of its business ⁶⁷. The company's RCPS holders are entitled to receive dividends at a rate of 10% per annum of the RCPS holders' subscription amount ⁶⁸.

The company faces significant headwinds and constraints, including a limited operating history and the fact that the vertical farming industry is still very new and subject to much uncertainty ⁶⁹. High startup costs are one of the most significant concerns for market entrants in the CEA vertical farming industry, requiring significant initial investment for infrastructure like building facilities and climate control systems, as well as high electricity costs for LED lighting and labor costs ⁷⁰. The company cannot guarantee a return on its investment into the vertical farms it has developed or will build in the future, and if it fails to do so, there is a risk it cannot continue as a going concern ⁷¹. The company also faces strong competition in the agricultural technology and vertical farming industries, with competitors potentially having longer operating histories, greater name recognition, larger customer bases, and significantly greater financial, technical, sales, and marketing resources ⁷². The company is exposed to potential disruptions from unforeseen disasters or crises, such as natural disasters, pandemics, power outages, or other catastrophic events, which could disrupt operations and lead to business interruption and financial loss ⁷³.

The company has identified material weaknesses in its internal controls pertaining to its lack of effective information technology general controls, lack of sufficient financial reporting and accounting personnel with knowledge of IFRS and SEC reporting requirements, inadequate segregation of duties on sale and customers' data management, and lack of formal internal control policies and internal independent supervision functions ⁷⁴. The company plans to take remedial measures, including hiring experienced IT staff, hiring additional finance and accounting staff, allocating sufficient resources to prepare and review financial statements, and establishing an internal control and governance function ⁷⁵. The company is also subject to a civil lawsuit commenced by V Capital Consulting Limited (VCCL) on February 5, 2026, alleging an outstanding consulting fee of $903,213.86 remains due and payable ⁷⁶. Agroz Group has filed a formal Counterclaim against VCCL and its representative, claiming $1,250,000.00, together with interest and costs ⁷⁷. As of December 31, 2025, the company has accrued the full contractual consulting fee liability of $1,000,000 within other payables ⁷⁸.

The company has concluded that there is substantial doubt about its ability to continue as a going concern within one year from the date that its consolidated financial statements for the 2025 fiscal year were issued ⁷⁹. As of December 31, 2025, the company had cash of MYR 1,478,091 ($364,421) and incurred negative operating cash flows of MYR 6,284,550 ($1,549,445) in the 2025 fiscal year ⁸⁰. The company also had current liabilities in respect of redeemable convertible preference shares of MYR 6,583,486 ($1,623,147), amounts due to related parties of MYR 6,056,741 ($1,493,279), and total bank borrowings of MYR 841,815 ($207,548) ⁸¹. Furthermore, the company had significant remaining contractual capital commitments of MYR 11,995,191 ($2,957,394) ⁸². The company faces extreme customer credit concentration, with 99.78% of total gross trade receivables due from its five largest customers as of December 31, 2025 ⁸³. The company's trade receivables aging profile experienced significant elongation, with receivables aged more than 6 months but within 1 year increasing from MYR 2,470,419 (6.7% of gross receivables) as of December 31, 2024 to MYR 26,409,471 ($6,511,211), or 38.1% of total gross receivables, as of December 31, 2025 ⁸⁴. The company is subject to a civil lawsuit commenced by VCCL on February 5, 2026, alleging an outstanding consulting fee of $903,213.86 remains due and payable ⁸⁵. The company has accrued the full contractual consulting fee liability of $1,000,000 within other payables ⁸⁶. The company received a deficiency letter from Nasdaq on February 17, 2026, notifying it that the closing bid price for its Ordinary Shares was below the minimum $1.00 per share requirement for continued listing ⁸⁷. The Hearings Panel has made a delisting determination and the company will appeal its delisting determination to a Hearings Panel ⁸⁸. The company also received a notification letter from Nasdaq on May 18, 2026, indicating that it no longer complies with Nasdaq Listing Rule 5250(c)(1) because it has not yet filed its Form 20-F for the year ended December 31, 2025 ⁸⁹.

Management's message emphasizes the company's mission to improve food safety, food security, and sustainability for society by creating a reliable, accessible food supply through its AgTech products and services ⁹⁰. The company believes it is revolutionizing and transforming agricultural production through its CEA technology and methods, enabling it to grow more food in less space safely without the use of pesticides, herbicides, and other dangerous chemicals, while reducing the need for storage and refrigeration ⁹¹. Management's strategic priorities include maximizing production efficiency and sustainability, supporting safety and health through sustainable farming, leveraging advanced technology to transform agriculture, and forming strategic partnerships in the agriculture technology industry ⁹². The company is focused on increasing production of fresh produce while maintaining lower costs and sustainability, utilizing CEA methods to achieve higher production rates per square meter compared to conventional farming techniques ⁹³. Management also emphasizes the company's commitment to providing customers with safe and healthy produce, grown without the use of pesticides, fungicides, insecticides, or herbicides ⁹⁴. The company deploys cutting-edge technologies such as CEA, IoT, big data science, machine learning, and artificial intelligence to be at the forefront of sustainable food production ⁹⁵. Management believes the company's strategic partnerships play a pivotal role in driving sustainable growth and positioning the company as a frontrunner in the agriculture technology industry ⁹⁶.