Vancouver BC – TheNewswire – October 6, 2020 – Agrios Global Holdings Ltd. (CSE:AGRO) (CNSX:AGRO.CN) (OTC:AGGHF) (FSE:OSA – WKN-A2N62K) (“Agrios” or the “Company”) provides the following summary update regarding management and financial matters below. Links to the complete news releases have been provided in this release for the reader’s convenience.
Market conditions for the sector have been challenging since the fall of 2019; during this period, the Company has continued its efforts to secure financing while making significant changes to continue its operations. Below is an outline of the steps the Company has taken and accomplished.
On September 9, 2019, the Board of Directors met to review the financial requirements until December 31, 2020. Upon completing the review, the Board met with management, who agreed to defer all management salaries until further notice.
After the September 9, 2019 meeting, the Company entered into discussions with several parties to secure the necessary financing required to move the Company forward and refinance the mortgage on the Washington State facility held by the Citizens Bank of Newburg. The Company was able to progress the discussions to the point of arranging terms when Covid-19 struck. Potential financiers advised the Company they would delay their decision on participating until they were able to evaluate the impact of Covid-19 on their specific situations. The financing did not move forward as a result of the effects of Covid-19. The Company secured a credit facility in the amount of US$3.5 million as outlined in the September 18, 2020 release [for complete release click here], and continues to seek additional financing but has not been successful as of the date of this release.
On June 3, 2019, the Company announced it had arranged a non-brokered private placement convertible debenture of unsecured convertible debentures, for aggregate gross proceeds of up to C$3 million dollars. The Company placed C$ 1,011,917 of the Debenture. The Debentures mature 36 months from the date of issuance and bear interest at a rate equal to 8% per annum, payable in cash or common shares of the Company on the last day of each calendar year.
The Company paid C$44,274 on December 31, 2019, by issuing 88,544 shares in the capital of the Company, at the revised conversion price of C$0.50 per share. As of September 30, 2020, according to the Company’s calculations, the Company owes C$60,549 or 121,097 shares of common shares to the Convertible Debenture Holders if paid in shares. For the complete release, click here
Convertible Credit Facility
On August 30, 2019, the Company announced it had arranged an unsecured convertible credit facility of up to C$8,113,000 from certain lenders. All Notes of the Credit Facility have a maturity date of 36 months from the date of the advance of funds, and bear interest at a rate equal to 18% per annum, payable in cash or common shares of the Company on the last business day of each calendar year, and have a conversion price of C$0.37.
The Company placed C$3,251,500 of this Credit Facility. As a consideration to the lenders for making the Facility available, the Company also issued to the lender’s Bonus shares in the amount of 4,385,405 common shares of the Company. The Bonus Shares are subject transfer restrictions for one year from the date of issuance. As of September 30, 2020, according to the Company’s calculations, the Company owes C$437,750. in interest, or 1,183,108 common stock to the Credit Facility Debenture holders if paid in shares. For the complete release, click here
On February 14, 2020, the Company announced it had filed documentation with the Canadian Securities Exchange (the “CSE”) to amend the terms of 920,132 common purchase warrants issued on March 2, 2018, in connection with a Non Brokered Private Placement convertible at C$0.50 per common share, expiring on March 2, 2020. The Company amended the terms to provide for an expiration date of March 2, 2021. For the complete release, click here
Management Fees and Changes
On September 9, 2019, as previously noted, management agreed to defer all management salaries until further notice. Deferred salaries to December 31, 2019 are included in the Q3 December 31, 2019, financial statements. Deferrals during the periods of Q4 2020 and Q 1 2021, despite numerous reductions have increased the Company’s liabilities.
On May 11, 2020, [for release click here ] June 5, 2020, [for release click here ] and September 23, 2020, [for release click here ], the Company announced the departure of several members of the management team and two Directors.
On July 10, 2020, the Company announced they could not meet the filing deadline for their March 31, 2020, annual audited financial statements, Management and Analysis Discussion, and June 30, 2020, Q1 statements complete with Management and Analysis Discussion. For the complete release, click here
On September 8, 2020, the Company requested and received a Management Cease Trade Order
(the “MCTO”), providing an additional 30 days or until October 14, 2020, which it received to file both sets of the statements and accompanying documents. The Company continues its efforts to complete the statements.
In the Q3 2020 statements for the period ended December 31, 2019, the Company noted US$1,500,000 of restricted cash on the balance sheet and a mortgage of US$4,218,124. The Citizens Bank of Newburg held the “unrestricted cash” as security against the mortgage. For the complete financial statements, click here
On September 18, 2020, the Company announced it entered into a credit facility arrangement with JRV Finance and Lease for up to US$3.5-million. JRV Finance and Lease is an affiliate of the Company’s largest shareholder, J.F. Foster, who serves as a director of Agrios. The credit facility was used to pay The Citizens Bank of Newburg the balance of the mortgage due after applying the restricted cash and providing up to US$500,000 of working capital. The working capital is allocated to the completion of the rooms at the Washington State facility. The amount of the Credit Facility is secured against the building, located in and referred to as the Washington State Facility. For complete release on credit facility with JRV, click here
In the same statements to Company showed an Accounts Receivable of US$6,382,183. This amount has increased since the statement date. The Company may be required to take a write-down on its account receivable. Any potential write-downs will be made in consultation with the Company’s auditors and advisors.
For the period ended December 31, 2020, the Company showed PPE (Property, Plant, and Equipment) of US$24,553,734. The Company may be required to take an impairment charge against this amount. Any potential impairment charges will be made in consultation with the Company’s auditors and advisors.
The Company showed accounts payable of US$1,102,542, as of December 31, 2019. This amount has increased since that statement. The Company will be discussing with its’ creditors resolution of these amounts on a best-efforts basis.
Additionally, the Company had US$2,705,150 of Convertible Debentures and Convertible Credit Facility as of December 31, 2019, and this amount remains unchanged; however, has interest owing as of September 30, 2020, according to the Company’s calculation, of C$498,299, and 1,304,205 common shares of the Company if paid in shares.
About Agrios Global Holdings Ltd.
Agrios Global Holdings is a data analytics-driven agriculture technology and services company advancing the latest innovations in indoor growing science. The Company owns, leases and manages properties and equipment for eco-sustainable agronomy and provides advisory services to support all aspects of aeroponic cultivation in the cannabis sector. Agrios is actively pursuing new opportunities to expand its portfolio of tenant growers and infrastructure assets in strategic licensed jurisdictions. Based in Vancouver, BC. Agrios is managed by a highly accomplished team of experienced industry and capital markets experts who are committed to the growth of the Company.
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This news release was prepared by the management of Agrios, which takes full responsibility for its contents. The Canadian Securities Exchange (“CSE”) has not reviewed and does not accept responsibility for the adequacy of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in Agrios’ periodic filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward-looking statements.
Forward-looking statements may include, without limitation, statements related the use of the funds from the Credit Facility.
Although Agrios has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US Federal laws; change in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. Because of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Agrios disclaims any intention or obligation to update or revise such information, except as required by applicable law, and Agrios does not assume any liability for disclosure relating to any other company mentioned herein.
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