Urban Barns Foods Inc. Receives $5 Million Financing Commitment From Socius Capital Group
Urban Barns Foods Inc. (URBF.OB) announced today that it has entered into a definitive agreement with Socius Capital Group, LLC (“Socius”), under which Socius has committed to purchase tranches totaling $5 million in non-convertible Preferred Stock and warrants from Urban Barns. These purchases will be made over the next two years, at non-fixed dates. Proceeds from any sales of the Preferred Stock would be used to provide working capital, mostly in the form of acquisitions of specialized, urban based buildings and proprietary growing equipment.
Urban Barns may sell to Socius, subject to the terms and conditions in the agreement, during a two-year period, Series A Preferred Stock (the "Preferred Stock") and warrants to purchase shares of Urban Barns' common stock. The Preferred Stock, which is redeemable by Urban Barns, will accrue dividends at an annual rate of 10%, which will be payable in additional shares of Preferred Stock. The exercise price of the warrants will be based at the prevailing market price of Urban Barns’ common stock at the time Urban Barns sells Preferred Stock to Socius. The total exercise value of the warrants issued will equal 135% of the amount of the Preferred Stock sold at the time.
Urban Barns is a leading-edge provider of fresh produce that uses proprietary technology to grow organic food in an indoor environment. Urban farming is a trend that has grown in recent years and we are seeking to establish a firm footprint in the health conscious urban market. Our focus is to ensure optimum quality of produce at a cost effective ratio and aggressively gain brand recognition.
Dan Meikleham, Chairman and CFO of Urban Barns, said of the financing commitment, “This was a crucial step in our company’s development, and it is now completed in the manner which we had planned to allow us to take advantage of various development opportunities. URBF is currently negotiating the opening of operations in Puerto Rico, USA, where the opportunities, as well as tax benefits and development incentives, have been made available to us based on our business strategies and plans. With these incentives and the early-stage Socius financing we plan to expand rapidly into both Canada and the United States from our bases in Vancouver and Puerto Rico.”
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