Organic Flower Investments Group Inc. (CSE: SOW)(FWB:
2K6)(OTC: QILFF) (“Organic Flower” or the
“Company” or
"SOW") is pleased to
announce that further to the Company’s news release on August 21,
2020 announcing its intention to augment its investment portfolio
with a hydrogen sector investment, the Company has acquired a 90%
equity interest in California-based PowerTap Hydrogen Fueling Corp.
(“
PowerTap”) as at October 27, 2020.
“PowerTap is very excited to have had this
investment and recognition from SOW and plans to quickly build out
a large North American hydrogen fueling station network from its
strong position in IP and over two decades of continuous progress
in creating hydrogen fueling solutions.
As an experienced developer of technology in an
important area that is finally having its time as a green but also
economically compelling energy options, PowerTap is intent on
becoming a leading part of the multi-billion dollar hydrogen
fueling space,” said Raghu Kilambi, CEO of PowerTap.
PowerTap’s corporate presentation may be
accessed at the following link:
https://sowinvestments.ca/wp-content/uploads/2020/10/PowerTap-Deck-Oct28.pdf
Organic Flower and PowerTap will work together
to develop the hydrogen fueling station network in stages,
consisting of engineering & design; ongoing development of
PowerTap 3.0; and permitting and site preparation. The development
of the hydrogen fueling station network is expected to commence
with further updates to engineering and design in Q4 of 2021.
Subject to the progress of this initial stage, the remaining stages
of development and initial manufacturing are expected to start in
Q1 2021 and progress with production of units in 2021. The
anticipated aggregate cost of all stages of development of
PowerTap's 3rd generation product is approximately $17m. At each
stage of development, Organic Flower and PowerTap plan to secure
financing of the project through available government financing
& credits, and equity, debt & convertible debt offerings.
The timing of the development to the next stages and the cost of
each stage is subject to the success at each stage of development,
the general development of the hydrogen fueling industry and the
availability of funding.
This investment in PowerTap aligns with the
Company’s investment policy, which was previously amended and
restated to include the renewable energy sector as an area of focus
for the Company. The amended and restated investment policy is
available for review on the Company‘s website at
(https://sowinvestments.ca/) and will be tabled for ratification at
the Company’s next annual general meeting of shareholders. The
Company intends to change its name to better align with its current
investment policy and will announce the new name, ticker and
effective date of the name change shortly.
Hydrogen Infrastructure Sector
The Company believes that finally hydrogen is
going to have its time due to the clean tech revolution and
economic advantages over incumbent fueling technologies, especially
in commercial transportation. Industry reports forecast hydrogen to
be a US$130 billion industry by 2030 in the USA with 700,000
jobs1.
Hydrogen powered vehicles have major advantages
over battery electric, gas and diesel vehicles (driving range,
fueling time and cost per mile)2. Billions of dollars’ worth of
hydrogen long haul trucks and cars are expected on the market in
next 2-4 years from incumbents and upstarts in the next 36 months3.
Once produced, hydrogen powered vehicles generate electrical power
in a fuel cell, emitting only water vapor and warm air.
Established vehicle manufacturers (Toyota,
Hyundai, Daimler and Volvo) have announced that they are ramping up
their delivery schedules of hydrogen powered cars and long-haul
trucks and Nikola Motors has announced it will be manufacturing
hydrogen electric long-haul vehicles4. The Company anticipates that
the biggest need for the industry to receive general adoption are
hydrogen fueling/refueling stations. There are currently only
approximately 70 consumer hydrogen fueling stations in the U.S.
versus approximately 150,000 gas stations and approximately ~25,000
battery electric vehicle (BEV) recharging stations5.
About PowerTap
PowerTap is leading the charge to build out
cost-effective hydrogen fueling infrastructure through its
environmentally friendly intellectual property, product design for
the modularized and lowest tier production cost of hydrogen, and
launch plan.
Substantial investment continuously over a 20
year period from serious and sizeable public and private
organizations and partnerships including energy multinationals, the
U.S. government and further investments from a major auto
manufacturer, has resulted in the PowerTap portfolio of IP and
advanced deployed technologies as they exist in the present
day.
For this reason amongst others, PowerTap
believes that it has accrued and can deliver advantages over peers,
battery electric vehicles (BEV), and gas and diesel fuel solutions,
including quicker refueling, lower cost per mile and longer driving
ranges - and of course, lowest tier overall emissions including
initial inputs and processing.
PowerTap’s advantage over other hydrogen fueling
station systems is that it has a small physical footprint where it
can produce hydrogen fuel cost effectively on site at the
individual station. Most existing USA hydrogen fueling stations buy
hydrogen for storage at individual stations at much higher costs
than PowerTap’s production cost. PowerTap technology-based hydrogen
fueling stations are located in private enterprises and public
stations (near LAX airport) in California, Texas, Massachusetts,
and Maryland.
PowerTap is expected to qualify for attractive
infrastructure loans plus the California Low Carbon Fuel Standard
credit program allows PowerTap to earn attractive cash flow
generating credits for building out the hydrogen production
infrastructure at the individual station level. The California Low
Carbon Fuel Standard credit program was a multibillion dollar
market in 2019.
PowerTap’s plans include co-location of its
hydrogen fueling infrastructure at existing gas station/truck
stops. PowerTap’s goal is to deploy 500 to 1,000 stations within
the next 3-5 yrs in the U.S. alone. There are currently under 100
active consumer hydrogen fueling stations operational in the
U.S.
Additional information about PowerTap may be
found at its webstie at http://www.powertapfuels.com
Acquisition of PowerTap
The acquisition of 90% of PowerTap (the
“Acquisition”) is the cumulation of the
transactions contemplated under the previously announced letter of
intent dated August 12, 2020 between the Company and PowerTap (the
“Letter of Intent”). The Letter of Intent granted
the Company with the option to acquire up to a 90% interest of
PowerTap (the “Option”). Upon exercise of the
Option, PowerTap's shareholders (collectively, the
“Vendors”) entered into a definitive agreement
whereby the Company acquired 90% of PowerTap. The consideration
paid to the Vendors consisted of an aggregate of 106,210,708 common
shares in the capital of the Company (the “Consideration
Shares”), under an 18-month escrow release program, at a
deemed value of CA$0.30 per Consideration Share. The Vendors are
arm’s-length to one another and none of whom, individually holds
10% or more of the issued and outstanding shares of the Company on
a non-diluted basis. The Acquisition does not constitute a
fundamental change or change of business for the Company, within
the meaning of the policies of the Canadian Securities Exchange,
but as the Acquisition constitutes a significant acquisition
pursuant to National Instrument 51-102 – Continuous Disclosure
Obligations, the Company will file a business acquisition report
within 75 days from the date hereof.
The issuance of the Consideration Shares relied
on the take-over bid exemption under Section 2.16 of National
Instrument 45-106 – Prospectus Exemptions and therefore the
Consideration Shares are not subject to a four month and one day
hold period. However, the Vendors agreed to escrows of up to 18
months after the acquisition closes.
In connection with the Acquisition, the CA$4.4
million previously advanced by the Company to PowerTap pursuant to
the Letter of Intent, was converted into an 8% demand promissory
note, payable to the Company.
Engagement of First Marketing GMBH
Organic Flower has retained First Marketing
GmbH, a leading investor relations and marketing firm based in
Heidelberg, Germany, to provide marketing services focused on the
European markets. Under the agreement, which commences on the date
hereof, the service provider is to provide content distribution,
translation and advertising services in Europe. The company agrees
to pay the service provider up to 500,000 euros over the 6-month
period to develop required content and artwork and to launch its
market awareness programs in the European Union.
ABOUT ORGANIC FLOWER
INVESTMENTS
Organic Flower is an investment company, that
specializes in investing into private and public companies
opportunistically that may be engaged in a variety of industries,
with a current focus in the health and renewable energy industries.
In particular, the investment mandate is focused on high return
investment opportunities, the ability to achieve a reasonable rate
of capital appreciation and to seek liquidity in our investments. A
copy of Organic Flower’s amended and restated investment policy may
be found under the Company’s profile at www.sedar.com.
ON BEHALF OF THE ORGANIC FLOWER
INVESTMENTS GROUP INC. BOARD OF DIRECTORS
“Joel Dumaresq”
Joel Dumaresq CEO+1 (604) 687-2038info@sowinvestments.ca
Learn more about Organic Flower by visiting our website
at: https://sowinvestments.ca/
THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
Notice Regarding Forward Looking
Information:
This press release contains "forward-looking
statements" or "forward-looking information" (collectively referred
to herein as "forward-looking statements") within the meaning of
applicable securities legislation. Such forward- looking statements
include, without limitation, forecasts, estimates, expectations and
objectives for future operations that are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of Organic Flower. Some assumptions include, without
limitation, the development of hydrogen powered vehicles by vehicle
makers, the adoption of hydrogen powered vehicles by the market,
and legislation and regulations favoring the use of hydrogen as an
alternative energy source. Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and
similar expressions, or that events or conditions "will", "would",
"may", "could" or "should" occur or be achieved. This press release
contains forward-looking statements pertaining to, among other
things, the timing and ability of the Company to complete any
potential investments or acquisitions, if at all, and the timing
thereof. Forward-looking information is based on current
expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and, in some
instances, to differ materially from those anticipated by the
Company and described in the forward-looking information contained
in this press release.
Although the Company believes that the material
factors, expectations and assumptions expressed in such forward-
looking statements are reasonable based on information available to
it on the date such statements were made, no assurances can be
given as to future results, levels of activity and achievements and
such statements are not guarantees of future performance.
The forward-looking information contained in
this release is expressly qualified by the foregoing cautionary
statements and is made as of the date of this release. Except as
may be required by applicable securities laws, the Company does not
undertake any obligation to publicly update or revise any forward-
looking information to reflect events or circumstances after the
date of this release or to reflect the occurrence of unanticipated
events, whether as a result of new information, future events or
results, or otherwise.
____________________________1 http://www.fchea.org/us-hydrogen-study 2 https://www.businessinsider.com/nikola-motors-founder-investors-dont-care-company-has-no-revenue-2020-6 3 https://www.trucks.com/2019/11/12/hyundai-nikola-toyota-build-hydrogen-highway/4 https://www.usatoday.com/story/money/2020/10/26/hydrogen-trucks-nikola-gm-toyota-hyundai-zero-emissions/5981340002/5 https://www.statista.com/statistics/416750/number-of-electric-vehicle-charging-stations-outlets-united-states/
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