Mr. Ashish Malik reports

BEE VECTORING PROVIDES CORPORATE UPDATE

Bee Vectoring Technologies International Inc. has provided a corporate update and review of current business initiatives.

Development of Bee Vectoring's vectoring delivery system, utilizing Vectorite with CR-7, is largely complete so the primary objective is now full commercial launch in the United States. Second to this is the selective expansion into markets outside the U.S., across crop varieties, and through strategic or synergistic product development.

The four pillars that are essential to a successful commercial launch and sustained company growth include a sound commercialization/marketing strategy, continuing product development and innovation, licence to operate from a regulatory/approvals perspective, and a solid corporate strategy inclusive of partnering and licensing activity. The company is pleased to provide an update on the significant progress made with activities in these four pillars.

"The company has made significant progress on all strategic fronts, including the capital markets," said Ashish Malik, president and chief executive officer. "We have a sharp focus on the U.S. launch in the context of an overall business plan that includes a wider product offering and global, multicrop reach that will position BVT as a formidable force within the agriculture industry."

"Consumers are demanding less chemicals and pesticides in food production and farmers are looking for natural alternatives that enable them to remain competitive," added Michael Collinson, chairman of Bee Vectoring. "BVT is ideally suited to meet that demand and is both a pioneer and potential leader in providing innovative all-natural solutions that support sustainable crop production."

Commercialization/marketing activities

The company continues to focus on the Florida strawberry market for its launch activities, but the opportunity for the company is worldwide, and so it has started international expansion efforts as well.

Florida strawberry test market

• The company continues to generate a high degree of interest in the Florida strawberry market. Florida is the second-largest strawberry producer in the U.S. after California but is the major winter strawberry growing region, producing 20 million flats of strawberries on 11,000 acres every year. Commercial trials from 2017 demonstrated that Bee Vectoring's system gave growers up to a 29-per-cent-higher yield than a chemical-only spray program. In 2018 despite abnormally difficult weather during the season, Bee Vectoring's system was discussed favourably in the grower community, and the company was able to solidify long-term partnerships with key growers.

Initiation of European development

• Increasing restrictions on use of chemicals (including the recently announced April, 2018, plan by the European Union member states to ban all outdoor uses of neonicotinoids, a widely used class of chemicals believed to pose dangers to bees) position Bee Vectoring favourably in this significant market. Industry partners, as well as farmers, need crop disease management alternatives that appeal to the environmentally conscious consumer. Bee Vectoring is in active discussions with potential partners and is working on multiple testing and go-to-market agreements.

Development in Mexico

• In Mexico nearly $250-million of chemical fungicides are used annually. Standards demanding higher levels of food safety and quality, with fewer chemical inputs, are forcing growers to actively modify their production practice. Growth in sales of crops for export -- to supply the United States and Canada in particular -- and for domestic consumption (for example avocados, berries and vegetables) has resulted in Mexico emerging as a potentially lucrative opportunity.
• Dr. Gerardo Suazo, recently hired by Bee Vectoring to manage this market, notes: "We have begun the process for registration in Mexico where innovative agricultural practices are readily tried and adopted. I am confident that BVT's unique solutions have tremendous potential in this country."

Product development/innovation activities

Third party validations to support commercial launch efforts continue to be secured. Business expansion projects to broaden the product portfolio are under way -- both through internal development and together with partners.

Third party validations in replicated crop trials

• In the past 18 months, Bee Vectoring has conducted numerous replicated research and development studies with independent third party centres of influence to validate the effectiveness and favourable economics of using the Bee Vectoring system in several crops. Trials have been completed in strawberries, blueberries, sunflowers and tomatoes, and have shown better disease control and higher yields compared with chemical grower standards.
• "Extensive testing by independent centres of influence underpins both regulatory filings and the marketability of new technologies," said Claude Flueckiger, former head of research and development at Syngenta, and director of Bee Vectoring. "The successful completion of these trials, with every trial indicating efficacy and potential, strongly supports my confidence in the technology and the associated value creation."

First-to-market honeybee dispensing system

• In the last year, Bee Vectoring has demonstrated that its system, originally designed for bumblebee delivery, can be adapted to accommodate delivery by honeybees. In the U.S., the value of crops that benefit from pollination by honeybees is nearly $20-billion, giving Bee Vectoring a significant opportunity to leverage the already existing market structure for commercial honeybee pollination for these crops.
• Delivery of Vectorite with CR-7 by honeybees has been included to the regulatory filings. Engineering, prototype development and testing, as well as plans for commercial-scale manufacturing, have been initiated in support of a commercial launch of a honeybee system.

Broadening product portfolio by in licensing products from partners

• Crops face many pests during a growing season, and by including third party products that can be stacked together with Bee Vectoring's own product, a broader scope of pests can be managed through its systems. This increases the value of the system to a grower, and the opportunity to capture greater value for Bee Vectoring. Bee Vectoring has entered into several agreements to evaluate third party microbial products for delivery through its bumblebee and honeybee delivery systems.

Foliar formulation to reach markets not requiring bee pollination

• The largest crops worldwide, such as corn and soybean, do not require pollination, thus do not use bees. In addition, there are several diseases that affect crops during periods other than bloom time and are difficult to manage through bee vectoring application. A foliar-spray formulation of Bee Vectoring's proprietary beneficial microbe -- Clonostachys rosea strain CR-7 -- would open both those opportunities, which are not accessible through bee vectoring, thereby giving access to hundreds of millions of acres and potential revenue. Bee Vectoring has started evaluating options to develop a spray formulation.

Regulatory/approvals activities

Successful development of supportive environmental and safety data underpins the company's regulatory filings. Bee Vectoring has significantly diminished regulatory risk, secured important new licences and progressed international approvals.

Organic certification obtained

• Bee Vectoring received official organic certification in the U.S., and its proprietary formulation of Vectorite with CR-7 is now listed by the Organic Materials Review Institute (OMRI). The listing means the product meets the U.S. Department of Agriculture's (USDA) guidelines under the National Organic Program standard and is allowed for use in certified organic crops.

Plant amendment licences gained

• Bee Vectoring has received plant amendment licences from five states in the U.S., including Florida, which allows Bee Vectoring to sell its system on a limited basis.

U.S. EPA progressing

• Vectorite with CR-7, delivered by bumblebees, has thus far passed all completed EPA reviews without issue. The EPA is appropriately increasing the data requirements to confirm safety to pollinators and has asked for additional data to show safety in honeybee brood larva. This was not a requirement when the submission was made. Since Bee Vectoring is interested in a full use with honeybees in the current application process, and being a firm advocate of a high standard for both product and environmental stewardship, Bee Vectoring has elected to work co-operatively with the EPA to conduct appropriate studies. Adding a bee brood larva safety study does not delay commercial launch plans in Florida.

California regulatory submission

• Bee Vectoring submitted application for pesticidal use in California in 2017. California, which is the largest market opportunity in the U.S., requires its own approval over and above that of the EPA.

Submission in Switzerland

• Bee Vectoring has submitted its Swiss pesticidal registration application which is now under review.
• "Switzerland is a beachhead country for BVT in Europe. This submission is a key milestone achievement as we prepare for full EU (European Union) registration application in 2019," said Christoph Lehnen, Bee Vectoring's European business manager. "We are now in the position where agricultural companies with unique capabilities or market reach are contacting us to partner with so that they can achieve their corporate goals. We are currently working on multiple go-to-market testing agreements which should be completed in 2020."

Registration in the European Union

• The unified registration process which covers groups of crops in similar climatic zones across the EU will provide Bee Vectoring with access to a greater market than North America. Europe requires reductions of chemical in pesticides and growers are quicker to adopt biological solutions. Registration submission for EU is expected for 2019.

Corporate development and partnering activities

The company has strengthened its balance sheet and has gained significant traction within the industry. Several partnering discussions are continuing that can accelerate business expansion.

Strengthened balance sheet

• Bee Vectoring has recently raised $4.5-million (Canadian) which the company believes is sufficient to finance operations through to EPA approval and allows the company to accelerate projects that will add to its strategic value.

Go-to-market partners

• The company has entered into several testing agreements with companies for select markets. Through these partnerships the company intends to leverage the partners' marketing strength and expertise to accelerate entry in those countries.

Product range extensions through partnerships

• Bee Vectoring has entered into several third party testing agreements of its proprietary beneficial microbe Clonostachys rosea strain CR-7 for use as a foliar spray and/or as a seed treatment. These product range extensions would open significant new markets. Bee Vectoring has also entered into multiple agreements to evaluate third party microbial products for delivery through its bumblebee and honeybee delivery systems.

"We have a disruptive agricultural crop production tool that is commercially relevant, beneficial to farmers, desired by consumers and totally organic," said Mr. Malik. "We are developing something truly unique as an alternative for an industry dominated by chemicals, and this innovation is turning the heads of a growing number of industry leaders."

About Bee Vectoring Technologies International Inc.

Bee Vectoring has developed and owns patent-pending bee vectoring technology that is designed to harmlessly utilize bumblebees and honeybees as natural delivery mechanisms for a variety of powdered mixtures comprising organic compounds that inhibit or control common crop diseases, while at the same time enhancing crop vigour and productivity. This unique and proprietary process enables a targeted delivery of crop controls using the simple process of bee pollination to replace traditional crop spraying, resulting in better yields, superior quality and less impact on the environment without the use of water or disruptions to labour.

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