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EnerDynamic Hybrid Technologies (TSXV: EHT) Enters a Manufacturing and Supply Agreement with hi!farms

EHT to supply hi!farms with 32 flowering Controlled Environment Agriculture Units, and supporting infrastructure modules, to cultivate medicinal cannabis.

Contract represents $6,340,000 top-line manufacturing revenue to EHT.

 

Niagara Falls and North Bay, Ontario - November 13, 2018 (Newsfile Corp.) (Investorideas.com Newswire) EnerDynamic Hybrid Technologies Corp. (TSXV: EHT) ("EHT") is pleased to announce that on November 11, 2018, it executed a Manufacturing and Supply Agreement with hi!farms to deliver custom Controlled Environment Agricultural Units ("CEAU") grow units to hi!farms' new facility in North Bay, Ontario.

hi!farms of North Bay, Ontario, is negotiating agreements to supply medical grade cannabis to academic, medical, and distribution partners for research and sales in Ontario. The CEAU's are designed by H!Farms with patent applications in process.

EHT was selected to deliver these CEAU's by hi!farms due to the superior ENERTEC materials and the speed of production and delivery of the units. Under the Manufacturing and Supply Agreement, phase 1 of the project, which consists of 32 flowering units and supporting infrastructure modules, is to be completed before the end of the second quarter of 2019. Phase 2 of the project, which consists of a further 270 flowering units and supporting infrastructure modules, is expected to be completed by the first quarter of 2020. Sales and contract information for the additional 270 units will be released in the early 2019.

EHT will build and supply the initial 32 flowering units and supporting infrastructure modules to hi!farms, deferring the $6,340,000 sale price while hi!farms establishes the initial crop. Thereafter, EHT will receive the full sale price from 100% of the net income of each unit until the original sale price is paid in full. EHT anticipates receiving payment in full approximately 12 months following installation and expects a gross margin of 30%. Protected through priority PPSA securitization, EHT will also participate in the net profits of the medical cannabis sales from every unit, on a 50/50 basis (following repayment in full of original sale price) with hi!farms, for 6 years from the date of installation. There is some risk to waiting 12 months for payment, namely that H!Farms is unable to generate as much revenue as it anticipates. However, this is offset by the securitized first call on cash flow which should shift the risk to only the time to be paid rather than if EHT will be paid.

John Gamble, CEO of EHT, indicated that "We are confident that we can deliver leading edge grow units to hi!farms and that the risk associated with initial purchase price deferral is more than offset by the long-term recurring revenue benefit."

"The team at hi!farms is excited to be working with EHT to provide the foundation for our advanced end-to-end cultivation system.", commented hi!farms' CTO Paolo Pincente. "hi!farms utilizes a technology-focused approach to cultivation operations, deploying proprietary hardware and software, modern techniques, and innovative business models which represents advancements in both the cannabis industry and controlled environment agriculture in general."

About EnerDynamic Hybrid Technologies

EHT delivers proprietary, turn-key energy solutions which are intelligent, bankable and sustainable. EHT's expertise includes the development of its ENERTEC module structures with full integration of smart energy solutions. Using a proprietary skin and foam core that is stronger than traditional wood or steel structural insulated panels, EHT provides exceptional thermal energy efficiency in modular homes, cold storage facilities, residential/commercial out buildings and emergency/temporary shelters. EHT works with its partners worldwide to erect the buildings on-site utilizing EHT staff and local crews. In addition to traditional support to established electrical networks, ENERTEC buildings excel where no electrical grid exists.

About hi!farms

hi!farms delivers proprietary, comprehensive vertical cultivation technologies, turn-key components, and production and sales of cannabis and cannabis-related derivatives. Patent applications for hi!farms' technologies are in process.

Vertical cultivation technologies include knowledge, expertise, experience and perspective of methods and practices of irrigation systems, nutrient delivery mechanisms, natural, artificial and supplemental lighting, environment control, fluid and air dynamics, system automation, data collection, robotics, machine vision, machine learning, artificial intelligence, plant recipes, electrical systems and farm operations and management. Turn-key components include any comprehensive technical drawings, working beta units and production-ready components of the systems and sub-systems noted above.

Production and sales of cannabis and cannabis-related derivatives includes dried flower, concentrated oils, and capsules for the medical market. This includes direct sales to licensed consumers and wholesale sales to other licensed producers throughout Canada and the world.

About ENERTEC

The EHT advanced ENERTEC Modular Wall and Roof System uses a proprietary skin and foam core that is stronger and more energy efficient than traditional wood or steel structures providing the highest ratings for energy efficiency. EHT works with its partners worldwide to erect the buildings on-site utilizing EHT staff and local crews. After installation, each structure can be furnished and finished to meet the customer's requirements including siding, tile, kitchens and bathrooms or segregated commercial rooms. The finished wall product can be shipped on pallets and delivered via rail, truck or water in standard formats.

At the core of the ENERTEC product line is the ENERTEC Embedded Solar Roof Module. Solar cells can be embedded in a proprietary fire proof skin resulting in substantial cost savings by eliminating heavy glass panels and aluminum racking required for traditional solar panels. Two barriers to greater adoption of solar energy are weight limitations of the roof on which solar panels could be deployed and onerous shipping and labour costs. A lighter product at a better price point will open a larger market for solar due to the faster return of capital investment especially for rural and remote users looking to go off-grid. Furthermore, the entire EHT embedded solar roof becomes a massive solar panel capable of producing significantly more energy than the home requires, allowing the structure to then become an important source of power for the local micro grid or large battery storage systems.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The statements herein that are not historical facts are forward‚Äźlooking statements. Forward-looking information relating to sales of the products (the "Opportunities") involves risk, uncertainties and other factors that could cause actual events, results, performance, prospects, for the Opportunities to differ materially from those expressed or implied by such forward-looking information. Although EHT believes that the assumptions used in preparing the forward-looking information on the Opportunities outlined in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. EHT disclaims any intention or obligation to update or revise any forward-looking information, whether a result of new information, future events or otherwise, other than as required by applicable securities laws.

FOR FURTHER INFORMATION PLEASE CONTACT:

John Gamble
Director
(289) 488-1699
jgamble@ehthybrid.com
info@ehthybrid.com
Website: www.ehthybrid.com


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