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GreenStar Agricultural Corp

GreenStar Agricultural Corp. Corporate Presentation January 2014. Disclaimer/Forward Looking Statement.

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GreenStar Agricultural Corp

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  1. GreenStar Agricultural Corp Corporate Presentation January 2014

  2. Disclaimer/Forward Looking Statement • This Presentation contains ‘‘forward-looking information’’ which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its subsidiaries (collectively, the ‘‘Company’’) Often, but not always, forward-looking information can be identified by the use of words and phrases such as ‘‘plans’’, ‘‘expects’’, ‘‘is expected’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, ‘‘forecasts’’, ‘‘intends’’, ‘‘anticipates’’, or ‘‘believes’’ or variations (including negative variations) of such words and phrases, or state that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will’’ be taken, occur or be achieved. • Forward-looking information is based on the opinions and estimates of management as of the date such statements are made and is based on information currently available to management and upon what management believes to be reasonable assumptions, including, among others, that general business, economic, competitive, political and social uncertainties remain favorable, as well as those factors discussed in the section entitled ‘‘Risk Factors’’ as may be identified in the Company’s public disclosure from time to time, as filed under the Company’s profile on SEDAR at www.sedar.com. • Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward-looking information, there may be other factors that cause such actions, events or results to differ from those anticipated, estimated or intended. Any inaccuracy in the assumptions identified above may also cause actual actions, events or results to differ materially from those described in the forward-looking information. • Forward-looking information contained herein is made as of the date of this Presentation and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, potential investors should not place undue reliance on forward-looking information. • This Presentation does not constitute an offer to sell, or solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information set out herein, and nothing contained herein is, or shall be relied upon, as a promise or representation, whether as to the past or future. TSXV - GRE

  3. The “China Issue” Due to recent issues unfolding with certain Chinese companies listed on North American exchanges, GreenStarAgricultural Corp believes it is important to provide complete disclosure for investors as they consider investing in Chinese companies. GreenStar’sBoard and Management believe that the following information will strengthen investor confidence in GreenStar’sability to operate under strict Canadian public company guidelines, while maintaining its historical profitability; • Strong corporate governance. • GreenStar Agricultural Corp.(“GreenStar”) has five active Canadian board members with Canadian public markets and food industry experience. These directors have and will continue to visit the company’s Chinese operations and work closely with GreenStar’sChinese management team. • All assets and operations have been reviewed by these directors and GreenStar’sCanadian auditors, thereby validating and confirming their accuracy. • The Board of Directors have direct input into management decisions of a material nature impacting GreenStar’s Chinese operations. • The GreenStarmanagement team includes a Canadian-based CFO and other key operating personnel. • GreenStarhas Canadian legal counsel and auditors. TSXV - GRE

  4. Investment Highlights • GreenStar is an integrated agricultural business that delivers fresh produce from farm operations to be sold locally or processed at GreenStar’smanufacturing facilities and distributed to domestic and international markets. • EBITDA has increased by 298% from 2008 to 2012. • Dividend payments–fourth quarterly dividend of $0.01 per share announced for January 2014 distribution (The dividend payout represents less then 10% of EBITDA). TSXV - GRE

  5. Company Profile • GreenStar is a diversified agricultural production and processing business, focused on locally grown, fresh and canned, or bottled fruits and vegetables. • The Company’s fresh produce, sold in local markets, consists mainly of high quality mandarin oranges and young bamboo shoots grown and harvested byGreenStarseasonal employees. • Seasonal employees are supervised by the Company’s fulltime agricultural management team working on approximately 1,500 acres of agricultural lands under long term leases. • The fresh fruit and vegetable produce is sold directly to domestic markets in China. • Other finished goods of canned and bottled products are sold either domestically in China, or exported internationally. TSXV - GRE

  6. Company Growth • Revenue has grown from $10 million in 2008 to $39 million for the year ended December 31, 2012. (256% increase) • Revenue growth continued in Q3’13 ($10.4 million), a 22.92% increase over Q3’12 ($8.5 million). • EBITDA has grown from $3.7 million in 2008 to $14.7 million in 2012. (250% increase) • EBITDA growth continued in Q3’13 ($4 million), a 41.86% increase over Q3’12 ($2.8 million). • Agricultural leased land has grown from approx. 260 acres in 2007 to approx. 1500 acres today. • In Q4 2012 GreenStar signed new lease agreements for an additional 576 acres (totaling the 1500 acres) representing 63.6% increase in farming land base. • In 2007 GreenStaremployed 50 full time and 300 seasonal workers in the production area. Today, GreenStar employs 93 full time and 461 seasonal workers. TSXV - GRE

  7. Q3 ‘13 results TSXV - GRE

  8. Beichen Acquisition • GreenStar completed acquisition of Beichen Tomato Products Company (Beichen) on January 6, 2014. • $4.2 million cash transaction • GRE plans to expand Beichen’s production capacity from 20,000 tons of tomato pulp/annum to 40,000 tons/annum by 2015(addition of one new automated production line) • Beichen’s revenues have grown from $11.3million (2010) to $13.9million (2012) and gross margins have improved from 38.76% (2010) to 39.14% (2012) • Beichen’s operation includes 9,630 sq. metre tomato pulp production plant on 20,000 sq. meters of land, with 15 full time/59 part time employees operating one automated production line. TSXV - GRE

  9. Financial Performance • Shareholders' Equity increased to $51,000,000. ($1.64/share on a diluted basis) – Q3 2013 • Cash on hand $15,656,000 (September 30, 2013) TSXV - GRE

  10. Financial Performance Markets Served China/U.S. China/Japan Russia Philippines Germany Lebanon Dubai Kuwait China TSXV - GRE

  11. Company History • On May 31, 2011, GreenStar completed a CPC transaction. • GreenStar shares began trading on the TSX-V under the symbol “GRE” on June 7, 2011. • The operating subsidiary of GreenStar was originally founded in 1993 as “PuchengZhaixia Vegetable Processing Factory” then PuchengLvzhou Food Company in 2002 and finally renamed Fujian GreenStarin 2003. All now operate under GreenStar Agricultural Corp. TSXV - GRE

  12. Products • Either sold fresh or further processed at the Company’s canning and bottling facility under its own label or private labels for major retail product companies. • Fresh mandarin oranges, young bamboo shoots and mature bamboo represent approximately 21% of annual revenue. • Canned tomato paste, canned or bottled young bamboo shoots, yellow peaches and grapes represent 79% of annual revenue. TSXV - GRE

  13. Mandarin oranges • Yellow peaches • Grapes • Young bamboo shoots • Tomato paste TSXV - GRE

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  16. Operation Summary • Pucheng County in Nanping City is a major fruit and vegetable base in the Fujian Province. • GreenStar established a number of fruit cultivation bases in such towns and townships as Shipo, Linjiang and Shanxia. • A “company base + rural household” model is formed, by: • (a) leasing fruit and vegetable farms from local villagers • (b) engaging local villagers to operate the farms on behalf of GreenStarwhile providing the villagers with technology to improve crop yields and funds to assist in cultivation of mature fruits and vegetables • Fruits and vegetables are grown from leased farm land that is under long term leases controlled by GreenStar and sold locally or processed and distributed to international markets. • GreenStar purchases raw tomato pulp that is processed with proprietary ingredients to produce tomato paste that is sold locally and distributed to international markets. TSXV - GRE

  17. Facilities: Pucheng TSXV - GRE

  18. Facilities: Beichen TSXV - GRE

  19. Leased Lands TSXV - GRE

  20. The “Fruit and Vegetable” market • Fresh fruit and vegetables are sold directly to domestic markets in China. • Further processed canned and bottled products are either sold domestically or exported internationally. • GreenStarexports its canned products either directly to the purchaser in the Country of Destination or through local PRC agents, which in turn export the products to their customers. • GreenStar exports canned products to, among others: • Europe: Germany and Russia • Asia: Japan and Philippines • Middle East: Kuwait, Dubai and Lebanon • North America: The United States TSXV - GRE

  21. Capital Structure and Info * ≈16 Million special warrants are also outstanding that convert on a 1:1 basis for no additional consideration at any time provided that public shareholders, as determined by the TSX Venture Exchange, hold at least 20% of the total outstanding common shares after the conversion. The special warrants have no voting rights and receive no dividends and were issued as part of the consideration for the acquisition of assets at a value negotiated at arm’s length at the time of the reverse take over. TSXV - GRE

  22. Market Strategy • GreenStar intends to continue organic growth through increased domestic and international sales and source potential acquisitions that increase the company’s vertical integration strategy. • GreenStar’s interest is to explore potential acquisition opportunities that would enhance production capabilities and expand product lines. TSXV - GRE

  23. Management/Board of Directors Guan Lianyun, CEO & Chairman • Mr. Guan established GreenStarand shortly thereafter built a production line to produce canned oranges in 2004 and tomato paste in 2007. Mr. Guan has been a director since 2011. Conor Bill, Director • Mr. Bill has been an active participant in the financial services industry for more than 20 years, and is currently President & CEO of Artemis Investment Management, an independent wealth manager overseeing approximately $1 billion in assets. Ye Huoyun, Independent Director • Mr. Ye is the business director of Fujian Xinhua Beer Company, based in Pucheng, Fujian, China and has been since 1998. Bob JianGuo, Independent Director • Mr. Guo is the founder and CEO of Goldenmount Capital International Inc. as well as the Managing Partner at Tianjin Huizhi Private Equity firm in Chinaand has been an independent director since 2011. G. Michael Newman, Director • Mr. Newman has been a director of Green Star since 2011 and served on the Boards of Directors of over a dozen TSX and TSX.V listed companies and assisted in the raising of over $250 Million in debt and equity for these companies. Frank Galati, Independent Director • Mr. Galati has been a director since 2012. He has extensive experience in the packaged goods industry, having been a senior executive at such well known firms as Maple Leaf Foods and Cott Corporation. Bryan Knebel, Independent Director & Chairman of the Audit Committee • Mr. Knebel has been a director since 2012. He has extensive knowledge and experience in the development of internal and external growth strategies and financial management of several TSX-Venture listed public companies over the past 15 years. Michael Lam, CFO • Mr. Lam is a Chartered Accountant (Ontario) and a Certified Public Accountant (Illinois) Robert G. Macdonald, Manager, Business Development • Mr. Macdonald currently is Chairman & Managing Director of AgriFood Capital Corp. He is committed to guiding GreenStar’sCanadian business development strategy including as principal liaison with Canadian Investors For additional information visit www.greenstaragricultural.com. TSXV - GRE

  24. Meeting participants starting from bottom left side and moving clockwise around the table are as follows:Mr. Guan, LianYun (CEO and a significant shareholder), Mr. Zhou, YiHua (Mr. Guan’s assistant), Mr. Lv, HongYan (Interpretor), Ms. Luo, HuiRong (Director and a significant shareholder), Mr. Wang, YouMing (Financial Consultant on financial and accounting issues), Mr. Ye, HuoYun (Independent director), Mr. Paul Marsiglio (one of GRE’s significant Canadian shareholders and a former-independent director), Mr. Bob Guo (Independent director), Mr. Jason Donville (one of GRE’s significant Canadian shareholders), Mr. Michael Newman (one of GRE’s significant Canadian shareholders, and a director), TSXV - GRE

  25. Contact Canadian Office: Robert G. Macdonald Manager of Business Development 100 King Street West, Suite 5700 Toronto, ON, Canada M5X 1C7 Tel :(416) 849-3858 Fax :(416) 849-3859 Email: info@greenstaragricultural.com China Main Land Office: Right Side of 205 State Highway LinjiangTown, Pucheng Fujian, China Tel : (0086) 599-2641699 Fax: (0086) 599-2641688 Corporate Communications: Investor Cubed Inc. Neil Simon, CEO 67 Yonge Street, Suite 1000 Toronto, ON, Canada M5E 1J8 Tel :(647) 258-3311 Toll: 1 (888) 258-3323 Fax: (416) 363-7977 Email: info@investor3.ca TSXV - GRE

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