Blueberries Medical Corp. (CSE: BBM) (OTC: BBRRF) (FRA: 1OA) (the “Company” or “Blueberries“), a Latin American licensed producer of medicinal cannabis and cannabis-derived products, announces the completion of a non-brokered private placement consisting of the sale of 20,813,817 common shares (“Common Shares”) at a price of C$0.10 per Common Share for aggregate gross proceeds of C$1,901,382 (or approximately US$1,500,000) (the “Offering”), of which 19,013,817 Common Shares was paid for in cash and 1,800,000 Common Shares was issued in connection for past services provided to the Company by an arm’s length third party service provider. Following the successful control of the Company’s SG&A over the past six months and improvements to operational standards in both cultivation and extraction of cannabis, the net proceeds from the sale of the Common Shares issued for cash consideration will be used to continue to: (i) implement the Company’s worldwide marketing strategy and ensuring the highest international quality standards in all of its operations; (ii) plant and equipment improvements, including the improvement to the Company’s state-of-art extraction pharma grade laboratory; (iii) obtaining GACP (Good Agricultural and Collection Practices) and EUGMP (European Union Good Manufacturing Practices) certifications; (iv) for new revenue streams; and (v) other general corporate and working capital purposes.
The Offering was led by Terraflos Inc. (“Terraflos”), a cannabis company with operations throughout Latin America that was founded, and is controlled, by Facundo Garreton, the Chairman, interim-CEO and a director of Blueberries. Terraflos recently announced the closing of its US$8 million seed round funding to continue developing and expanding its businesses in Latin America; in Uruguay through YVY Life Sciences, a company controlled by Terraflos, and in Colombia, through Blueberries. The seed funding round was led by FLA Ventures (“FLA”) (a current shareholder of Blueberries), MPE Investments and Yaax Capital. Terraflos is currently considering various opportunities in Argentina, Mexico and Brazil, and aims to expand its operations into those markets in the short term. In addition, Terraflos is preparing the launch of DrGea.com, a platform dedicated to the sale of cannabis products and the training of doctors specialized in the use of medicinal cannabis, dissemination and education of cannabis and its ecosystem, within the following weeks in Colombia, and expected to be scaled up throughout Latin America in 2021 and beyond. Terraflos also acquired a property in Garzón, Uruguay, where it expects to develop the first cannabis hub in the region focused on research and development as well as the promotion of the industry, tourism and training.
Facundo Garreton commented, “Terraflos is a company that promotes the development of a complete cannabis ecosystem, vertically integrating the different links of the cannabis production value chain and generating synergies between the various companies it controls. We are setting up the most relevant cannabis company in the region, mainly focused on the well-being of people, and to provide health solutions by delivering products that combine natural substances, science and technology while respecting nature and the environment.”
“We are pleased with Blueberries’ commercial operations moving from introductory sales of cuttings to associate growers, to solid sales of cannabis derivatives and extracts in Colombia and Peru. In addition, the company recently launched a high-quality tolling service to extract flowers and biomass for third party licensed producers that is positively impacting our revenue results and that is expected to help small and mid-size operators,” said Jose María Forero, the current President of Latin America operations of the Company.
New Director Appointment
The Company is also pleased to announce the appointment of Joaquin Barbera as a new independent member of the board of directors of the Company. Joaquín Barbera is the current CEO of the Broda Group, a company based in Argentina with more than 300 employees that invest and develop triple impact businesses from Mendoza Argentina to the World, whose drivers are innovation and sustainability. Joaquín studied business strategy at Harvard University and at the IAE Business School and he is a specialist in innovation and sustainability. He is a member of the board of Directors at Sistema B Argentina and represents Mendoza at the Union Industrial Argentina.
Early Warning Disclosure
Concurrent with the closing of the Offering, Terraflos also acquired in private transactions (the “Concurrent Transactions”): (i) 3,221,277 Common Shares and a previously issued convertible debenture of the Company (the “Debenture”) from Mr. Garreton (directly or indirectly through Glassford S.A., a company controlled by Mr. Garreton), and (ii) 9,800,000 Common Shares from FLA. The Debenture matures on July 16, 2022 and is convertible at a price equal to the lower of: (i) C$0.065, and (ii) the volume weighted average trading price of the Common Shares for 15 trading days prior to the conversion date, subject to a minimum conversion price of C$0.05.
Immediately prior to the Offering and the Concurrent Transactions, Mr. Garreton, directly and through Glassford S.A., owned 3,221,277 Common Shares as well as the Debenture. If the Debenture was converted in full at a price of $0.065 per share, it would result in the issuance of 14,416,762 Common Shares to Mr. Garreton for an aggregate holding on an as converted basis of 17,638,039 Common Shares, representing, on a partially diluted basis, approximately 10.28% of the outstanding Common Shares prior to the Offering.
Immediately following the Offering and the Concurrent Transactions, Mr. Garreton owned on an as converted basis (assuming conversion of the Debenture in full at C$0.065 per share), indirectly through Terraflos (which may be considered a joint actor of Mr. Garreton): 46,451,856 Common Shares representing, on a partially diluted basis, approximately 24.13% of the outstanding Common Shares prior to the Offering.
Mr. Garreton, through Terraflos, acquired the Common Shares and the Debenture referred to above for investment purposes, and he may, depending on market and other conditions, increase or decrease his beneficial ownership, control or direction over additional securities of the securities or otherwise. Other than as noted above and a right to a board seat for so long as Mr. Garreton holds at least 8% of the outstanding Common Shares on an as converted basis, Mr. Garreton does not have any plans related to any of the matters in the enumerated list in Item 5.1 of Form 62-103F1.
Mr. Garreton will prepare and file a report containing the information required by Form 62-103F1 – Required Disclosure under the Early Warning Requirements in connection with the matters referred to in this press release. Once filed, a copy of the early warning report will be available under the Company’s issuer profile on SEDAR at www.sedar.com.
MI 61-101 Disclosure
Participation by Terraflos in the Offering was considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with Terraflos’ participation in the Offering in reliance of sections 5.5(a) and 5.7(1)(a) of MI 61-101. A material change report will be filed in connection with the participation of Terraflos in the Offering less than 21 days in advance of the closing of the Offering, which the Company deemed reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the Offering in an expeditious manner.
About Blueberries Medical Corp.
Blueberries is a Latin American licensed producer of naturally grown premium quality cannabis with its primary operations ideally located in the Bogotá Savannah of central Colombia. The Company is led by a specialized team with proprietary expertise in agriculture, genetics, extraction, medicine, pharmacology and marketing, Blueberries is fully licensed for the cultivation, production, domestic distribution, and international export of CBD and THC-based medical cannabis in Colombia. Blueberries’ combination of leading scientific expertise, agricultural advantages and distribution arrangements has positioned the Company to become a leading international supplier of naturally grown, processed, and standardized medicinal-grade cannabis oil extracts and related products.
Additional information about the Company is available at www.blueberriesmed.com. For more information, please contact:
Jose Forero, President, Latin American Operations
Tel: +57 310 345 8808
Guillermo Rodriguez, CFO Blueberries Medical Corp.
Tel: +54 911 6015 2227
About Terraflos Inc.
Terraflos Inc. is a cannabis holding company, incorporated under the laws of the British Virgin Islands (BVI), with operations in both Uruguay and Colombia, through its investments in YVY Life Sciences and Blueberries, respectively. The company was founded and is led by Facundo Garreton, current chairman and interim-CEO of Blueberries.
Additional information about the company is available at www.terraflos.com. For more information, please contact:
Facundo Garreton, chairman and CEO.
Tel: +598 97 408 183
Cautionary Note Regarding Forward-Looking Information
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the use of proceeds from the Offering, expected synergies with Terraflos following the completion of the Offering, improvement to the Company’s state-of-art extraction pharma grade laboratory; obtaining GACP (Good Agricultural and Collection Practices) and EUGMP (European Union Good Manufacturing Practices) certifications; creation of new revenue streams and expected future revenue, commencement of commercial production of cannabis, CBD and other cannabis-derived products, successful implementation of full GMP standards at its extraction facility to allow for additional export potential to international markets, achieving additional milestones is contemplated, or at all, ability to expand distribution networks, ability to expand and upgrade the Company’s cultivation facilities in Colombia, internal expectations, expectations regarding the ability of the Company to access new Latin American and international markets, the ability to attract and retain new customers, and future expansion plans including development of the cultivation, production, industrialization and marketing of cannabis for commercial and scientific purposes.
These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the Colombian and international medical cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in Colombia, Argentina and elsewhere; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Additional information regarding the Company, and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Company’s Listing Statement dated January 31, 2019 and such other risk factors included in the management’s discussion and analysis of the Corporation for the year ended December 31, 2020, each filed on its issuer profile on SEDAR at www.sedar.com.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.