Affinor Growers Inc. has provided an update with respect to its agriculture technology agreement with Freshbay Inc.
Agriculture technology agreement
As announced on June 20, 2023, the company entered into an agriculture technology agreement dated June 16, 2023, with Freshbay pursuant to which Freshbay engaged the company to provide certain products and services for use at Freshbay’s geothermal agricultural site located in Hinton, Alta. As consideration for the products and services to be provided by the company, and in accordance with the terms and conditions of the definitive agreement, Freshbay agreed to pay the company an aggregate payment of $135,757,350. Prior to paying any portion of the contract price, it is a condition precedent that (a) Freshbay obtain adequate financing to pay the contract price and (b) the parties agree to a work schedule for the project.
Subsequently, as announced on May 14, 2024, the company entered into entered into an amending agreement with Freshbay dated May 10, 2024, to amend the terms of the definitive agreement. Pursuant to the amendment, the company granted Freshbay an exclusive licence to use and exploit a certain patent, know-how associated therewith and certain industrial designs held by the company. Pursuant to the terms and conditions of the amendment and as consideration for grant of the licence, Freshbay agreed to pay the company $33.5-million, as follows: (a) $21-million on such date that Freshbay receives any funding from an institutional investor in connection with the project solution (as defined in the definitive agreement), however, notwithstanding the foregoing, full funding instalment is due and payable on a date that is six months from the effective date of the amendment; and (b) $12.5-million on such date that is the earliest of (i) six months from the date of the first shipment of any strawberries produced in connection with the licensed intellectual property, or (ii) June 16, 2025.
Management update
The company and Freshbay communicate multiple times a week with respect to the definitive agreement, as amended by the amendment, and Freshbay’s efforts to obtain funding for the contract price. Freshbay has advised the company that Freshbay is currently working with a financier to obtain a portion of the funding for the contract price. In an effort to meet the requirements of the financier, Freshbay has:
- Entered into the amendment and obtained a licence to a portion of the company’s intellectual property;
- Entered into negotiations with produce vendors with respect to additional distribution agreements;
- Appointed a chief financial officer;
- Engaged an auditor.
Finder’s fee agreement
As previously announced, in connection with the amendment, the company entered into a finder’s fee agreement with an arm’s-length finder pursuant to which the company agreed to pay the finder a finder’s fee of $8.25-million. The finder’s fee is payable from the company to the finder when the company receives the funding instalment from Freshbay pursuant to the terms and conditions of the amendment. The finder assisted the company with the amendment, including facilitating the discussions between the company and Freshbay as the parties negotiated the commercial terms and price payable by Freshbay for the licence as set forth in the amendment. Freshbay entered into the amendment and obtained the licence in part to meet the requirements of a potential financier to fund the contract price. As such, the finder’s assistance to the company with negotiating the amendment and licence pushed the company closer to closing its transaction with Freshbay which would mark a significant development in the company’s business.
About Affinor Growers Inc.
Affinor is a publicly traded company listed on the CSE under the symbol AFI and on the OTCQB under the symbol RSSFF. Affinor is focused on developing vertical farming technologies and using those technologies to grow fruits and vegetables in a sustainable manner.
We seek Safe Harbor.
On behalf of the Board of Directors,
Affinor Growers Inc.
Nick Brusatore
Director /CEO
nick@affinorgrowers.com