The Vancouver penny stock company that has converted part of a civic parkade in downtown Vancouver into a greenhouse vegetable garden reported only $6,323 cash in the bank and a $52.8 million deficit.
Alterrus, which was called Valcent until June 12, began construction of its “patent pending” VertiCrop system at the EasyPark parkade at 535 Richards on Aug. 22 and is marketing the produce to local restaurants and stores under the Local Garden brand.
But NPA Coun. George Affleck is concerned about Alterrus’s finances and wants the Vision Vancouver-majority city council to release contract details and refer the matter to the newly appointed municipal auditor general.
“It’s the process, it’s the fact that I want to know if this was the best deal for the taxpayers,” Affleck told the Courier. “This company came in and got this gig and all this space in a non-competitive process. I don’t think that’s fair.”
The company was incorporated in 1996 and trades on the loosely regulated Canadian National Stock Exchange and Over the Counter Bulletin board exchanges. The company’s management discussion and analysis said, for the six months ending Sept. 30, that it lost $529,360. Accumulated losses were $52.8 million and it reported a working capital deficit of $4.4 million. Alterrus, however, claimed that it closed financing of $1.25 million for the EasyPark project on April 17, but is “currently seeking additional funding to finance its operations and obligations.”
“However, there can be no assurance that the Company will be successful in its financing efforts or in the success of its products,” said the corporate filing.
Alterrus described the VertiCrop system as patent-pending technology that uses a suspended tray on a moving conveyor to provide “maximum exposure to light (either nature or artificial), along with precisely measured nutrients for the plants.” Alterrus claims the system eliminates the need for herbicides and maximizes taste and nutrition.
“Developed over several years by the company, VertiCrop grows higher quality produce much more efficiently and with greater food value, when compared to commercial field agriculture,” said the Alterrus report.
As of Sept. 30, the EasyPark location had cost Alterrus $834,761 for the purchase of trays, rigs, convener system, site preparation, greenhouse structure and deferred financing costs. Rent is $2,400 per floor, per month and it has a 10-year licence.
In September, executive chair Stephen Fane took over as acting chief financial officer when John Hamilton was terminated. A request to interview chief executive Christopher Ng was not fulfilled. The company issued a statement in response to Affleck’s motion, that it claimed was to correct “inaccurate comments about the company’s financial position.”
“Contrary to public comments suggesting otherwise, Local Garden Vancouver Inc. is fully financed with private-sector funding and has successfully secured sales commitments for all of its produce,” said the Alterrus news release.
The company claims it has created more than $500,000 in construction activity and “five to seven permanent jobs.”