CO2 GRO Inc. Reports Q2 2022 Results and Accelerating Business Development Growth

TORONTO, ON / ACCESSWIRE / August 29, 2022 / Toronto based CO2 GRO Inc. ("GROW" or the "Company") (TSXV:GROW)(OTCQB:BLONF)(Frankfurt:4021) is pleased to report Q2 2022 financial results and discuss business development growth. We are seeing rising inbound interest from protected growers across the globe due to positive data from our ongoing Technology Trials ("Trials").

$1.5M-$2.5M 2022 Sales Target Unchanged

For Q2 2022, our recorded revenue was $NIL and deferred revenue was US$27,750 from the now installed US$127,750 Commercial Technology Purchase ("contracted sale" or "sale") announced in Q1 2022. The balance of US$100,000 will be paid in four equal payments of US$25,000 every 4 months starting December 1, 2022. Proceeds from a second contracted sale to Hidroexpo late in Q2 2022 are not yet recorded in either revenue or deferred revenue.

Our unchanged contracted sales forecast of $1.5M-$2.5M are expected to be secured in Q4 2022 and Q1 2023 as a number of Trials are ending in Q3 and Q4 2022. We expect to be in negotiations for Commercial Technology Purchases and related contracted sales with growers after full analyses of their Trial results and value accretion during Q4 2022 and Q1 2023.

Contracted sales to growers currently in Trials, the majority of whom are outside of Canada, will likely be on multi-year payment plans, with Hidroexpo being an example. In order to facilitate the financing of these multi-year sales contracts, we have engaged both Canadian government export agencies and private financing options ("export financing") to support earlier cash flow and revenue realization for CO2 GRO to ensure our cash flow needs are secured.

Current Sales Pipeline of 200M+ sq ft Rising

Several of CO2 GRO's 2022 trials are with some of the world's largest protected growers of vegetables and fruits as well as large floriculture growers of roses and young plants. The recent increase in inbound inquiries about our technology is coming from other major protected growers around the world. This influx of inquiries is being driven by the positive data from our on-going trials, notably.

El Salvador. 20% more kilograms of fruit production in year one and 30% more in year two in our bell pepper trials with Hidroexpo in El Salvador resulted in a second once hectare Commercial Technology Purchase. CO2 GRO will soon begin negotiations with Hidroexpo and export financing to expand our technology's implementation to all 16 of Hideoexpo's one-hectare operational greenhouses (over 1.7 million sq ft). The financial benefit to Hidroexpo of installing our technology in all 16 greenhouses is expected to enable their re-commissioning of another 18 hectares of idle greenhouses that were shut down due to unfavorable market conditions in previous years. Export financing will enable Hidroexpo to restart faster while providing CO2 GRO with cash realization sooner.

Alberta. 20% more marketable fruit production in our cucumber Trial with The Cucumber Man greenhouse in Alberta which is expected to finish in late November 2022. The Cucumber Man is also trialing the technology on their tomato varieties. Negotiations for a Commercial Technology Purchase for up to 15 acres (650,000 sq ft) of combined cucumber and tomato production space are expected to begin in late Q4 2022 and conclude in Q1 2023 in time for the 2023 growing season.

EU. 10% more kilograms of cherry tomatoes in our short three-month Trial with a large EU tomato grower and distributor. The results included a tripling of the highest value fruit category from 1% to 3% of total yield and an increase of 37.5% of the second highest value fruit category from 24% to 33% of total yield. These impressive yield and quality results were achieved in only the last 3 months of a 10-month grow cycle. Due to these positive results, the customer asked for a doubling of the 2022 Trial size from the start of their 2023 season ending in May 2023 to evaluate the results over a complete grow cycle. After the second Trial completion, we will negotiate a Commercial Technology Purchase roll-out plan with the customer to begin technology implementation for their nearly 100 million sq ft of total production space. The customer will decide the percentage of this area where our technology will be installed in year one. Being an export sale opportunity, we will negotiate the contract with export financing in order to facilitate as fast and large an implementation as possible to ensure faster cash flow and revenue to CO2 GRO.

Colombia. 21% more high-grade roses in our interim Trial results. The Trial was installed with the support of one of the globe's largest industrial CO2 gas suppliers. It will finish at the end of 2022 after which a Commercial Technology Purchase roll-out plan will be negotiated. The grower has 85 hectares (9 million sq ft) of total greenhouse production space. As an export opportunity, we will negotiate the contract with export financing to facilitate as fast and large of an implementation as possible ensuring faster cash flow and revenue to CO2 GRO.

Other trials globally. In addition to the above trials, we have numerous other trials underway around the world with protected growers in floriculture, leafy greens, strawberries, cucumbers, peppers and tomatoes. We expect many of these trials to also conclude by year-end 2022 after which Commercial Technology Purchase negotiations will commence.

Export financing Since most of our protected growers in Trials are outside of North America, we expect to utilize export financing for faster cash and revenue realization to support rapid growth. Our ongoing international trials are in the US, Mexico, Colombia, Ecuador, the UK, EU, Middle East and Japan.

2023 Growth. A first Commercial Technology Purchase in each of these markets is essential to the rapid deployment of our technology to other nearby growers following the Trials. We anticipate a large 2023 influx of new Trials in these markets. We are looking to shorten the sales cycle by recommending direct Commercial Technology Purchases without Trials. Our ever-increasing positive yield and quality data bank from 2018-2022 Trials and commercial sales projects we are accumulating supports achieving more direct sales.

Financial Update

We reported $1.6M of cash on hand as of June 30 2022. Our trailing YTD monthly cash operating expenses were approximately $125,000 per month. Our target is to generate positive operating cash flow within the next 12 months with cash proceeds from Commercial Technology Purchase contracts described above and faster cash realization through export financing. We target a minimum of 50% gross margins on our commercial sales, with costs typically covered by down payments on signed customer orders. This model ensures we are able to manage our cash flows as we begin experiencing rapid sales growth.

Message from our CEO

"It is becoming evident to growers globally that our technology is delivering the expected results of increased yield and higher quality production with low operating costs, resulting in higher customer gross margins. As one of our customers, Rodrigo Martinez of Hidroexpo commented, "CO2 GRO's technology is transforming our business."

With a sales pipeline of over 200 million sq ft of commercial production space, our potential for commercial sales is huge. Most of these customers are in international markets, allowing us to work with Canada's government export agencies and other private financing options when our customers want multi-year payment plans. Financing multi-year sales will provide us with faster cash and revenue realization and security.

Our current focus is on executing our existing, mostly international Trials to ensure we deliver the results growers expect. This will enable us to convert these Trials into commercials sales and generate the revenue and cash flow growth our shareholders are anticipating. We look forward to a strong finish to 2022 by signing more Trials with new customers around the world, and we are excited about the foundation we are laying for rapid growth in 2023 and beyond."

Visit www.co2gro.ca for more information on CO2 GRO Inc.

About CO2 GRO Inc. CO2 GRO Inc.

CO2 GRO Inc. is a precision ag-tech, clean-tech company with a focus on People, the Planet and Prosperity. Our vision is to become one of the leading companies enhancing global food production from protected agriculture. By helping our customers sustainably increase yield and profitability, we could help feed up to half a billion people worldwide while reducing our customers' ecological footprint.

About 300 million MT of fruit and vegetables are grown annually from about 5 million hectares of protected vegetable facilities globally. (6 kg/m2/year of average production). A 30% yield increase using our technology could add up to 100 million MT of fruits and vegetables per year. The US CDC (Centers for Disease Control and Prevention) recommends annual fruit and vegetable consumption of up to 200 kg per year per adult.

Our Target Market: The estimated 800 billion square foot global protected grower market comprised of 600 billion square feet of fruits & vegetables (Cuesta Roble 2019), an estimated 100 billion square feet of floriculture and another estimated 100 billion square feet of protected crops such as medicinal plants, tree seedlings and other non-food varieties.

Our Technology: CO2 Delivery Solutions™ enriches plants with CO₂ by misting an aqueous CO₂ solution directly onto plants grown in greenhouses and other protected grow facilities globally.

Value Proposition: Approximately 99% of protected grow facilities globally cannot add CO₂ by atmospheric gassing, missing out on up to 30% increased yield potential. CO2 GRO's technology enables all protected growers regardless of facility or location to enrich their plants with CO₂ to realize up to 30% yield increases. In addition, our technology suppresses the growth of micro-pathogens such as E.coli and powdery mildew, leading to healthier crops. Growers currently employing CO₂ gassing can save up to 90% of CO₂ gas used, reducing their ecological footprint and production costs. The technology's use could therefore result in a potential doubling of gross profits.

Patent Protection: CO2 GRO's CO2 Delivery Solutions™ technology is protected by a suite of patents and patents pending.

Business Model: Our technology is sold to growers based on the cultivation area installed at prices that provide a high return on their investment and high margins for our shareholders.

Global Expansion: CO2 GRO's management is rapidly expanding its international marketing partner relationships into Mexico, Spain, the EU, the UK, South Africa, the Middle East, Southeast Asia and Latin America as well as in its US and Canadian base.

Environmental Social and Governance ESG: CO2 GRO is committed to good Environmental, Social and Governance (ESG) policies and practices. We are an equal opportunity employer of choice and opportunity.

Forward-Looking Statements

This press release contains statements which constitute "forward‐looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward‐ looking information is often identified by the words "may," "would," "could," "should," "will," "intend," "plan," "anticipate," "believe," "estimate," "expect" or similar expressions and include information regarding: statements regarding the future direction of the Company; the ability of the Company to successfully achieve its business and financial objectives; plans for expansion and the ability of the Company to obtain, develop and foster its business relationships; and expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward‐looking information is not based on historical facts but instead reflect the Company's management's expectations, estimates or projections concerning the business of the Company's future results or events based on the opinions, assumptions and estimates that management considered reasonable at the date the statements are made. Such assumptions include but are not limited to: general business and economic conditions; the Company's ability to successfully execute its plans and intentions; the availability of financing on reasonable terms; the Company's ability to attract and retain skilled staff; market competition; the products and technology offered by the Company's competitors; and that good relationships with business partners will be maintained. Although the Company believes that the expectations reflected in such forward‐looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements. Among the key factors that could cause actual results to differ materially from those projected in the forward‐looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; in particular, in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in applicable laws or adverse changes in the application or enforcement of current laws; the biotechnology industry and the greenhouse growers market are highly competitive, and technical advances in the industry will impact the success of the Company, and other risks described in the Company's filings that are available at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward‐looking information except as otherwise required by applicable law.

Neither the 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.

SOURCE: CO2 Gro Inc.