LANGLEY, BC, Oct. 24, 2017 /CNW/ - Bevo Agro Inc. (BVO:TSXV) announces a private placement in CubicFarm Systems Corp. ("Cubic") pursuant to which Cubic has issued 125,142 Class A preferred shares at a price of $8.95 per share, for total proceeds of $1,120,000. The Class A preferred shares are convertible into common shares of Cubic on 1:1 basis without payment of further consideration at the option of the holder, and are subject to automatic conversion if Cubic achieves certain milestones. The Class A preferred shares also have the same voting rights as common shares, each carrying one vote at all meetings of Cubic shareholders at which the common shares are entitled to vote. Cubic is a private B.C. company of which Bevo owned 51% of the issued common and Class A preferred shares prior to completion of the private placement. With completion of the private placement, Bevo now owns 46% of the issued common and Class A preferred shares, resulting in Cubic no longer being a subsidiary company of Bevo.
The proceeds of the placement will be used by Cubic for research, development and general working capital purposes. With completion of the financing, Cubic considers its business to be well capitalized to execute its business plan well into 2018.
Cubic has also entered into a service agreement with an experienced manufacturing team in China (the "Partner"). The Partner is comprised of a team experienced in large scale agricultural manufacturing projects in China for distribution globally, which positions the Company well to build large quantities of high quality CubicFarms machines and distribute them globally. All manufacturing and quality assurance will be conducted at cost, and the margins retained within Cubic.
As part of the transaction, Cubic has granted the Partner the option to purchase up to 307,176 common shares of Cubic at a price of $8.95 per share. The option vests over time based on the Partner achieving certain manufacturing milestones. Cubic has agreed to lend to the Partner the funds needed to exercise the option, secured against the shares issued.
Cubic is now generating revenue through the sales of its CubicFarms systems. Cubic's marketing efforts to date have resulted in it receiving deposits on two commercial scale CubicFarm systems, utilizing our patented growing technology. Each system sold is a combination of several growing machines, along with the corresponding germination and irrigation machines, and will generate initial estimated revenues in excess of approximately $1.6 million Canadian each. Additional ongoing revenues through support subscriptions and expansions will also be generated. Several more CubicFarm Systems sales are in the pipeline nearing close in North America and abroad.
Cubic will also establish a full scale research and development site in Pitt Meadows, comprising 10 CubicFarms machines. In addition to facilitating research and development, the project will grow produce for resale under an agreement with a local produce wholesaler, who will purchase 100% of the produce grown at the site.
Bevo Agro is North America's leading supplier of propagated agricultural plants, operating greenhouse facilities in Langley and Pitt Meadows, BC. The Company's main products are the propagation of vegetable plants such as tomatoes, peppers, cucumbers, and other plants such as bedding plants, flowers and grasses.
CubicFarm Systems Corp. is the worldwide licensee of Bevo Agro's patent pending Cubic Farming technology which has been several years in development and production. Incorporated in 2016, CubicFarms Systems is dedicated to managing the opportunity for businesses and entrepreneurs to own and operate a cubic farm by providing world-class systems, processes and support to the cubic farmer.
SOURCE Bevo Agro Inc.
For further information: Jack Benne, President, Bevo Agro Inc., Phone: (604) 888-0420, Fax: (604) 888-8048, Email: [email protected]; Dave Dinesen, CEO, CubicFarm Systems Corp., Phone: 604-220-1370, Email: [email protected]