Blueberries Provides Corporate Update, Extends Maturity Date Of Convertible Debentures

Blueberries Medical Corp. BBRRF BBM (FRA:1OA) has achieved several CBD and non-psychoactive derivatives shipments to customers in Argentina, and up to date has exported a total of more than 60 kg to 6 different buyers.

Quality validation processes with larger pharmaceutical and cosmetics companies in this country are running positively, and the company estimates annual sales above $2.5 million in 2023. It is also expected that in late Q3 2022, Blueberries initiates the delivery of multiple high THC formulations locally and internationally, starting with Brazil as the first country to export psychoactive formulations. Both Argentina and Brazil are then expected to become the two largest destinations of the company products in next quarters.

Effective June 30^th, the Colombian Ministry of Justice granted Blueberries the psychoactive and non-psychoactive Cannabis flower export licenses. Also, the company has signed an agreement with YVY Life Sciences, a Uruguayan company specialized in quality cannabis dry flower production to mutually exploit the Blueberries´ growing facilities. YVY Life Sciences will upgrade and operate this facility for the next 3 years, with the intention of exporting THC premium flower in 2023 through a revenue sharing scheme. On top of the potential sales, the agreement represents a reduction on the operational expenses and the capital expenditure related to the Guatavita´s growing facilities and will let the company to focus efforts on all other processes different from cultivation.

To ensure an uninterrupted supply of flower, Blueberries signed on May 16th, a third-party cultivation agreement with Econnabis S.A.S. to have access to GACP CUMCS / IMC dry flower. Given the large scale of this partner, the agreed price per kg of harvested flower will be significantly below the Blueberries´ historical production full cost per kg. In this same path, the company forecast that first shipments of high THC and high CBD GACP premium medical flower to global markets will take place before the end of the year.

Systematically the company has reduced its overall expenses, with a 73% decrease between 2020 and 2021, and with a 18% of reduction in operational expenses of both cultivation and extraction facilities by the end of June 2022 in comparison with previous period 2021. This financial effort will allow Blueberries start in August the adequation of a 13.000 sqft extraction and transformation laboratory with GMP pharmaceutical standards that will be up and running by late Q1 2023.

Convertible Debentures

The company has extended the maturity date of an aggregate of CA$1 million of interest bearing (13% per annum) debentures that are convertible into common shares of the company at the lower of $0.065 per share, or the 15 day volume-weighted average price of the common shares on the Canadian Securities Exchange. The company and the holders of the debentures agreed to extend the maturity date of the debentures to July 13, 2023 in consideration for an aggregate transaction fee of CA$163,800 payable in cash or common shares of the company on the extended maturity date.

The extension of certain debentures held by Terraflos Inc., a company controlled by Facundo Garreton, the CEO and a director of the company, was considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of minority security holders in special transactions.

Photo by Richard T on Unsplash

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