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AgriFORCE Growing Systems Ltd. ("Agriforce") is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Agriforce's performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Agriforce, Agriforce's management, B2i Digital, Inc. or B2i Digital Inc's management. Agriforce or B2i Digital do not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

Cultivators are challenged in achieving consistent, high quality, and environmentally friendly product.

• There is a growing need for increased yield per square foot, less energy and water usage, and automation.

• The agriculture industry is facing pressure from commoditization and margin compression as well as high growing costs.

• Current agriculture practices are unable to achieve the genetic potential of the plant or crop, leading to massive investment in Ag-Tech solutions and technology to increase cultivation yields, taste and nutrition.

Consumers are looking for safer, more sustainable, and nutritious food.

• Consumers want to know where their food comes from and how it is grown. Safety, sustainability and the environmental impact have become a priority.

• Consumers want convenience and pesticide-free crops and are prepared to pay for them.

• Despite progress, current challenges continue with legacy systems especially in areas such as the need for pest control, the use of pesticides, herbicide and irradiation, crop drift and reduced arable land.

Governments are increasingly looking at the carbon footprint of agriculture and its massive use of water.

• Existing greenhouses and indoor growing facilities are not generally environmentally friendly and do not provide ideal growing conditions for crops.

AgriForce has designed an optimized a solution to achieve a plant’s full genetic potential (i.e., its yield optimization).

90% + of a plant’s ability to reach its full genetic potential is determined by its environment. All technology focused on bio-availability, pest management and nutrient management in totality, represent a fraction of yield gain of a plant’s full genetic potential (micro-challenges).

The AgriFORCE Solution

• AgriFORCE has developed IP which creates the next generation of agriculture facility design and operational method to allow plants to achieve their full genetic potential.

• AgriFORCE’s IP allows for significant yield gains compared to traditional indoor or greenhouse growing environments.

• Facilities can be constructed in any climate and closer to consumers providing a convenient, herbicide and pesticide-free, fresh, and sustainable product offering.

AgriFORCE brings an entirely new approach to crops, operations, facilities, systems and the growing environment (COFSE). The key to AgriFORCE IP and to success, is understanding how each of the elements work together to produce exceptional results. 

Current indoor farming and greenhouse practices are often inefficient and rely on substantial use of utilities, infrastructure and operational costs. AgriFORCE’s precision growth method presents an alternative that provides an efficient, controlled, herbicide and pesticide-free environment and method that is designed to yield a higher crop volume.

AgriFORCE’s intellectual property (IP) initially started out with a hydroponics focus to showcase its efficacy in a growing market. Now, AgriFORCE is expanding operations to refine the technology and methodology for vegetables and fruit, as well as in the growing sector of nutraceutical and pharmaceutical therapeutics, including plant-based vaccines. This is expected to add to the solid roster of patents, which are key IP assets for AgriFORCE.

AgriFORCE's foundational IP combines a uniquely engineered facility design, automated growing system and operational method (COFSE) to provide a clear solution to the biggest problems plaguing most agricultural verticals. It delivers a clean, self-contained, virtually sealed environment that maximizes natural sunlight and offers near ideal supplemental lighting. It also limits human intervention and – crucially – it was designed to provide superior quality control. In addition, the IP and proprietary facility was developed to drastically reduce environmental impact, substantially decrease use of natural resources, including water and electricity. This results in lower production costs, while still delivering daily harvests and an increased crop yield. AgriFORCE provides what others in the industry can’t: a comprehensive and proprietary system that addresses the unique needs of each crop and that runs through the agricultural value chain to the end product. 

AgriFORCE's clean, automated environment maintains what the company believes is the lowest carbon footprint on the market compared to typical indoor growing facilities, while simultaneously producing toxin-free, United States Department of Agriculture (USDA) organic equivalent crops.

With ongoing development and acquisition of IP, this is just the start of the AgriFORCE revolution of how crops are grown and how plant-based products are made.

AgriFORCE recently announced a definitive agreement to acquire a leading Netherlands-based AgTech consultancy, Delphy Groep BV (Delphy), focused on driving crop optimization, innovation, solutions and operational expertise in the agriculture, horticulture and controlled environment agriculture (CEA) sectors.

With global operations and over 200 employees and consultants, this AgTech Consultancy achieved 2020 annual audited revenues of over US$26 million and EBITDA of US $3 million and it expects to end the year 2021 with revenues of over US$28 million (based on IFRS accounting and FX Rate of approximately 1.14 Euro to 1.19 US dollar).

Transaction Highlights
The planned AgriFORCE acquisition of Delphy is expected to provide the following strategic benefits:

• Delphy has generated strong historical financial performance and consistent growth. AgriFORCE plans to build on this growth through expansion of Delphy’s consulting operations, establishment of a research and development center in North America, facilitating higher penetration of its Asian markets, as well as expanding AgriFORCE’s operations in international markets where Delphy has an established presence.

• Accelerated deployment of the AgriFORCE GrowHouse and related IP by leveraging Delphy’s extensive experience, established customer base, and deep industry relationships.

• Delphy’s deep industry knowledge and experience complements AgriFORCE’s M&A strategy by being uniquely positioned in identifying regional and international AgTech opportunities.

• Delphy is at the forefront of knowledge and IP development and research, which the Company plans to augment with increased revenue from technical solutions in the controlled-environment agriculture (CEA) vertical.

• Ability to expand AgriFORCE’s IP development and increase innovation through Delphy’s Improvement Centers, its center of excellence R&D facilities, and its relationships with governments and premier AgTech universities.

• Delphy brings a team of industry leaders in AgTech and a market-leading consulting brand to AgriFORCE.

This planned acquisition is an alliance of the two companies’ complementary expertise and shared values. Both AgriFORCE and this leading European AgTech consultancy are dedicated to making positive change in the lives of farmers and consumers. This is an unprecedented opportunity for exceptional innovation and, through synergies, expanded growth across both North America and Europe for both organizations.

The acquisition in progress of consulting firm Delphy with 2021 revenues of US$28M and EBITDA of US$3M (IFRS audited) will provide a multi-national presence and over 200 employees & consultants and is intended to place the combined operations at the forefront of knowledge and research.

By leveraging the consultancy’s decades of experience, established customer base, and deep industry relationships, we will aim to provide integrated AgTech solutions to our customers around the world.

Our 360 approach is aimed at creating a new Integrated model for the AgTech industry: Augmenting the Consulting arm at the forefront of AgTech knowledge and IP innovation by supplying advanced Facilities and AgTech Platform and driving cross-selling

Transaction Highlights
The AgriFORCE acquisition of Deroose is expected to provide the following strategic benefits:

• Strengthens AgriFORCE’s integrated AgTech business model by providing a leading position in tissue culture propagation and plant cultivation, including a robust IP portfolio, aimed at delivering increased crop yields with a reduced environmental footprint.

   

• Enables AgriFORCE and Deroose to drive further growth in core markets for the development and trade of horticulture, plantation crops, as well as fruits and vegetables, building on Deroose’s IP, driving improved genetics and higher yields.

   

• Building on Deroose’s strong financial performance and consistent growth in multiple locations across the world, AgriFORCE and Deroose plan for additional growth through expansion into new and high value crops.
  
  

With Deroose, AgriFORCE aims to become a major player in the Tissue Culture & Young Plant market

Created in 1980, Deroose is one of the most advanced bio-tech tissue-culture and young plant companies in the world, specializing in in-vitro initiation of plant cultures, propagation and rooting under controlled environmental conditions.

AgriFORCE plans to develop and commercialize new consumer products built on the Company’s proprietary MNG food processing IP, which has the ability to convert grain, pulses and root vegetables, into low-starch, low-sugar, high-protein, fiber-rich baking flour products, as well as a wide range of breakfast cereals, juices, natural sweeteners and baking enhancers.

The Company plans to launch the new branded specialty ingredients and foods business starting in the second half of 2022.

Creating an integrated AgTech 2.0
Through M&A, Strategic Alliances and Partnerships, we are looking to build an integrated AgTech company providing solutions to Agricultural and AgTech customers around the world with leading know-how or IP across the 4 key AgTech Platform’s pillars that can be leveraged to develop next generation plant and food solutions.

This communication is neither an offer to sell nor a solicitation of an offer to buy, nor a recommendation of any securities of the company mentioned herein.

AgriFORCE Growing Systems Ltd (the “Company”) and its counsel have reviewed the content of this page as well as the accompanying presentation (“Company Presentation”) displayed on this page. To the best of its knowledge, the Company does not believe this content to be misleading or inaccurate in any material respect, nor does it believe there are any material omissions with respect to such content. The Company does not believe the contents of the page or the Company Presentation to contain any non-public material information.

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Information, opinions and estimates contained on this page or in the Company Presentation reflect judgments by the Company as of the original date of publication by the Company and are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied is made regarding future performance.

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