About BrasilAgro - Companhia Brasileira de Propriedades Agrícolas

BrasilAgro - Companhia Brasileira de Propriedades Agrícolas focuses on the acquisition, development, and exploration of agricultural properties. The company seeks to transform its acquired properties through investments in infrastructure and technologies, which permit cultivation of high value-added crops (soybean, corn, sugarcane and other) and cattle raising and sell its developed properties in order to realize capital gains. The company is involved in several farming activities, including grains and sugarcane production and cattle raising. Agricultural Activities and Products Independent Production As of June 30, 2023, the company was the operators with respect to its entire portfolio of agricultural properties. In the context of its independent operations, the company maintains exclusive control over its production and exclusive responsibility for the acquisition of inputs, raw materials and equipment, hiring and oversight of employees, and infrastructure investment. The company sells a substantial portion of its production to a small number of import/export companies or customers who have substantial bargaining power. All of the company's sales are to customers located in Brazil, Bolivia and Paraguay. The company enters into short-term contractual arrangements with third-party contractors, at all stages of the production process, for the provision of services (including its workforce), equipment, and infrastructure needs. Leases As an alternative to independent production, as of June 30, 2023, the company had leased 17,525 hectares of its agricultural properties to third parties. Grains During the planting season for the company's 2022/2023 crop year, the company planted 89,523 hectares of grains at its grain farms in Brazil, Bolivia and Paraguay. All distribution of production from the farms is made through road transportation. The company enters into third-party service contracts to transport production from its farms to its storage facilities or to its customers. Sugarcane The sugarcane planting season runs from February to May of each year, and harvest occurs between April and November of each year. On June 30, 2023, the company had 27,586 hectares planted with sugarcane at its Alto Taquari, São Jose Farm, ETH, Agro Serra and Acres del Sud farms. The company entered into a supply contract with Brenco, pursuant to which it supplies the entirety of its sugarcane production from its Alto Taquari, and ETH Farm farms to them. The term of this supply contract covers two full crop cycles, which consists of six crop years and five harvests, and is scheduled to expire in 2023/2024. On May 8, 2015, the company entered into a lease agreement with respect to a property located in the municipalities of Alto Taquari and Alto Araguaia, in the state of Mato Grosso (Partnership III), pursuant to which it has the right to operate an area of 4,263 hectares until March 31, 2026. The properties are close to Alto Taquari Farm, a region that has had excellent sugarcane production results. The company entered into a supply contract with Agro Serra, pursuant to which it supplies the entirety of its sugarcane production from its Partnership IV farm to them. The company's farm output is distributed through road transportation. The company enters into third-party service contracts with trucking companies to transport production from its farms to its customers' sugar and ethanol refineries. Livestock As of June 30, 2023, the company had 21,652 head of cattle distributed over 16,080 hectares of active pasture. For the year ended June 30, 2023, net revenue from livestock sales accounted for 2.7% of the company's net revenue. Cotton The planting season for cotton runs from September to December of each year, and the harvest occurs between February and May of each year. During the planting season for the company's 2022/2023 crop year, it planted 7,142 hectares of cotton at its Chaparral farm. Agricultural Properties As of June 30, 2023, the company owned 20 agricultural properties, totaling 273,486 hectares of arable land (not including environmental preservation areas in accordance with Brazilian, Bolivian and Paraguayan environmental law), including 60,157 hectares of leased area, located in the Brazilian States of Mato Grosso, Goiás, Minas Gerais, Maranhão, Bahia, Piauí, Bolivia and in Paraguay. During the planting season for the company's 2022/2023 crop year, it planted 65,772 hectares of soybean, 20,293 hectares of corn (1st and 2nd crops), 27,586 hectares of sugarcane, 28,443 hectares of other grains (sesame, sorghum and others and leased areas to third parties), 3,457 hectares of beans, 7,142 hectares of cotton and 16,080 hectares of pasture. Except for part of the Nova Buriti farm, the company acquires and holds its agricultural properties through subsidiaries. In addition, the company entered into rural partnerships to operate agricultural properties, Avarandado Farm, ETH Farm, Agro Serra Farm, Xingu Farm, Regalito Farm, Serra Grande Farm, Unagro Farm and São Domingos Farm. São Jose Farm: As of June 30, 2023, the São Jose farm had an area of 17,566 hectares. The São Jose farm was acquired by the company's subsidiary Imobiliária Ceibo Ltda. in 2017. The property is located in the state of Maranhão, in the Northeastern region of Brazil. The company acquired 17,566 hectares, 10,137 hectares of which are arable and has already been developed, and will be used for the planting of grain crops. The other 7,429 hectares are permanent preservation and legal reserve areas. The agricultural partnership consists of 15,000 hectares of arable and developed land, already planted mostly with sugarcane. The agricultural partnership has a term of 15 years, which may be extended for the same period. Jatobá Farm: As of June 30, 2023, the Jatobá farm had an area of 8,868 hectares. The Jatobá farm was acquired by us, in partnership with Grupo Maeda, in 2007. On May 12, 2012, the company acquired Grupo Maeda's partnership stake and became 100% owners of the Jatobá farm, through its subsidiary Jaborandi Propriedades Agrícolas. The property is located in the Municipality of Jaborandi, state of Bahia, in the Northeastern region of Brazil. On June 2023, the company sold an area of 4,408 hectares (3,202 arable hectares) in the Jatobá farm, located in the municipality of Jaborandi, in the state of Bahia. Alto Taquari Farm: As of June 30, 2023, the Alto Taquari farm had an area of 5,103 hectares. The Alto Taquari farm was acquired by the company's subsidiary Imobiliária Mogno in August 2007. The property is located in the Municipality of Alto Taquari, state of Mato Grosso. On October 7, 2021, the company entered into an agreement to sell an area consisted of 3,723 hectares (2,694 arable hectares) in the Alto Taquari Farm. The delivery of the area will occur in two phases, the first occurred in October 2021, consisting of 2,566 hectares (1,537 arable hectares), and the second will occur in September 2024, consisting of 1,157 arable hectares. Considering this sale, the Alto Taquari Farm area in the portfolio is 1,380 hectares (809 arable hectares). In April 2023, the company sold an area of 5,185 hectares (3,796 arable hectares) in the Araucária farm, located in the municipality of Mineiros, in the state of Goiás. In April 2023, the company sold the remaining area of the Araucária farm (332 hectares, 215 arable hectares) located in the municipality of Mineiros, in the state of Goiás. Chaparral Farm: As of June 30, 2023, the Chaparral farm had an area of 37,182 hectares. The Chaparral farm was acquired by the company's subsidiary Imobiliária Cajueiro in November 2007. The property is located in the Municipality of Correntina, state of Bahia. Nova Buriti Farm: As of June 30, 2023, the Nova Buriti farm had an area of 24,212 hectares. The company's subsidiary Imobiliária Flamboyant Ltda. holds a 13% interest in the property, and it holds the remaining 87%. The property is located in the municipality of Bonito de Minas and CÔnego Marinho, state of Minas Gerais in the Southeastern region of Brazil, which is in close proximity to major iron producers who utilize large quantities of biofuel, especially from eucalyptus wood, to generate electricity. Preferência Farm: As of June 30, 2023, the Preferência farm had an area of 17,799 hectares. The property is located in the Municipality of Barreiras, state of Bahia. The company uses the property for cattle raising and grain cultivation. Avarandado Farm: On October 11, 2013, the company entered into a rural partnership agreement with respect to the Avarandado farm for up to 11 harvests, which is expected to end in June 2024. On March 8, 2023, the partnership was renewed for an additional 13 harvest seasons, with an expected conclusion in July 2036. The Avarandado farm is located in the municipality of Ribeiro Gonçalves, in the state of Piauí, which has had excellent grain production results. The company operates an area up to 7,456 hectares, which is suitable for grain crops. ETH Farm: On May 8, 2015, the company entered into a rural partnership agreement with respect to a property located in the municipalities of Alto Taquari and Alto Araguaia, in the state of Mato Grosso (Partnership III), pursuant to which it has the right to operate an area of up to 5,128 hectares until March 31, 2026. The properties are close to the Alto Taquari Farm, a region that has had excellent sugarcane production results. Agro Serra Farm: On January 11, 2017, the company entered into a rural partnership agreement with respect to a property located in the municipalities of São Raimundo das Mangabeiras, in the state of Maranhão (Partnership IV), pursuant to which it has the right to operate an area of up to 15,000 hectares. The agricultural partnership is already planted mostly with sugarcane and has a term of 15 years, renewable for another 15 years. Xingu Farm: On August 28, 2018, the company entered into a rural partnership agreement with respect to a property located in São Felix do Araguaia, in the state of Mato Grosso (Partnership V), pursuant to which it has the right to operate an area of up to 19,425 hectares for up to 10 years. In August 2018, the partnership agreement was amended in order to reduce the comany's right to operate to an area of up to 17,150 hectares for up to 10 years. In July 2022, the company entered into a rural partnership agreement with respect to a property located in São Felix do Araguaia, in the state of Mato Grosso, in Brazil (Fazenda Nossa Senhora Aparecida) (also included in Partnership V), pursuant to which it has the right to operate an area of up to 2,100 hectares for up to six years. These areas are mature, with more than five years under production and are suitable for a second crop. In July 2022, the company renewed the partnership of Fazenda Jataí, with a total useful area of 3,440 hectares, located in the municipality of São Felix do Araguaia, state of Mato Grosso, for the cultivation of grains, for a period of six years. Serra Grande Farm: In April 2020, the company acquired the Serra Grande farm located in Baixa Grande do Ribeiro, in the state of Piauí. The acquisition consisted of an area of 4,489 hectares, 2,904 hectares of which are arable to be developed and are suitable for grains cultivation. The other 1,585 hectares are permanent preservation and legal reserve areas. In addition to the acquisition, the company has an agricultural partnership in an area of 6,013 hectares of arable and developed land, already planted and operated by it (Partnership VII). This area is contiguous to the acquired area, has more than 5 years in average of production and high production potential. Partnership VII has a term up to 12 years, with a call option until 2024. In April 2022, the company entered into a rural partnership agreement with respect to properties located in Obispo Santiesteban, in the state of Santa Cruz de La Sierra, in Bolivia (Fazendas Bolpebra and La Senda) (also included in Partnership VIII), pursuant to which it has the right to operate an area of up to 1,035 arable hectares for up to six years. São Domingos Farm: In July 2022, the company entered into a rural partnership agreement with respect to a property located in Comodoro, in the state of Mato Grosso, in Brazil (Fazenda São Domingos) (Partnership IX), pursuant to which it has the right to operate an area of up to 6,070 hectares for up to 12 years. Sale of Rio do Meio Farm On November 2022, the company entered into an agreement to sell an area consists of 1,965 hectares (1,423 arable hectares) in the Rio do Meio Farm located in Correntina, in the state of Bahia. After the sale, Rio do Meio Farm remained on the comany's portfolio, with a total area of 5,750 hectares. Panamby Farm: On September 15, 2022, the company acquired the Panamby farm, located in the municipality of Querência, in the state of Mato Grosso. The Panamby farm has an area of 10,844 hectares, 5,379 hectares of which are arable to be developed, suitable for the cultivation of grains and cotton. Material Agreements New acquisition - Panamby Farm On September 15, 2022, the company acquired a rural property located in the municipality of Querência, state of Mato Grosso. The property has an arable area of 5,379 hectares (10,844 hectares of total area), of which 80% are suitable for a second crop. The farm has clay and rainfall levels, and is located at an altitude that, allow cultivation of grains and cotton and is located less than 100 km from paved roads. The farm is located in the Eastern region of the state of Mato Grosso, which is characterized by the high growth of agricultural areas in Brazil, with the advancement of agriculture in pasture areas. Lease - São Domingos Farm On July 21, 2022, the company entered into an agricultural partnership agreement with the owner of São Domingos Farm for the commercial exploration of an arable area of approximately 6,070 hectares, located in the municipality of Comodoro, state of Mato Grosso, and the term of the agreement is 12 (twelve) years. Possession of the farm will be granted in two phases of 3,035 hectares each, the first expected in December 2022 and the second in December 2023. Lease - Xingu Farm On June 11, 2022, the company entered into an agricultural partnership agreement with the owner of Nossa Senhora Aparecida Farm to commercially explore an agricultural area of 2,100 hectares, located in the municipality of São Felix do Araguaia, state of Mato Grosso, the farm was named Xingu Farm (Partnership V) and the agreement has a term of 6 (six) years, started in August 2022. The lessor granted possession of the farm in August 2022, after concluding the intercrop harvesting and the removal of all machinery. Lease - Regalito Farm On June 1, 2022, the company entered into an agricultural partnership agreement with the owner of Rio Preto Farm to commercially explore an agricultural area of 5,714 hectares, located in the municipality of São Jose do Xingu, state of Mato Grosso, the farm was named Regalito Farm and the agreement has a term of 12 (twelve) years from June 1, 2022. Sale of Morotí Farm On November 2022, the company sold an area of 863 hectares (498 arable hectares) in the Morotí farm, located in Paraguay. Sale of Araucária Farm On April 2023, the company sold an area of 5,185 hectares (3,796 arable hectares) in the Araucária farm, located in the municipality of Mineiros, in the state of Goiás. On April 2023, the company sold an area of 332 hectares (215 arable hectares) in the Araucária farm, located in the municipality of Mineiros, in the state of Goiás. Customers The company sells a substantial portion of its total crop production to a small number of customers who have substantial bargaining power. In the year ended June 30, 2023, three of its customers were responsible for 45.8% of its revenue, and each of these three customers was responsible for at least 10% of its revenue. Seasonality The company's principal products are subject to seasonality variations between the crop season and the off-season. The off-season occurs between the end of the harvest of a crop year and the beginning of the harvest of the following crop year. Such period occurs at different parts of the year depending on the agricultural product, as follows: the off-season for grains in Brazil typically occurs between August and January; the off-season for sugarcane in Brazil typically occurs between December and March; and the off-season for cattle-raising in Brazil typically occurs between September and January. Intellectual Property The company has filed three trademark registration applications with the INPI for the trademark name BrasilAgro - Companhia Brasileira de Propriedades Agrícolas under Nos. 828045089, 828045097 and 828045100. Registration No. 828045089 concerning intermediation, purchase, sale or lease of properties, land, buildings and real estate in rural and urban areas, intermediation in real estate transactions of any kind, as well as participation in other companies, in undertakings in Brazil and abroad was granted to the company by the INPI on June 2, 2020, and will expire on June 2, 2026. Registration No. 828045097 concerning marketing, distribution, importation and export of agricultural and livestock products was granted to the company by the INPI on June 5, 2012, and will expire on June 5, 2032. Registration No. 828045100 concerning products related to agriculture and livestock, such as agricultural products, vegetables, forestry, grains and animals, fruits, vegetables, seeds, plants and natural flowers and animal feed was granted to the company by the INPI on September 20, 2016, and will expire on September 20, 2026. The company also has filed three trademark registration applications for the trademark name BrasilAgro - Companhia Brasileira de Propriedades Agropecuárias, under applications No. 827971575, 827971567 and 827971583. Registration No. 827971567 was approved on April 7, 2020, and will expire on April 7, 2030. Registration Nos. 827971575 and 827971583 were approved on June 14, 2011, and January 28, 2014, respectively, and will expire on June 14, 2031, and January 28, 2024, respectively. In addition, the company filed three trademark registration applications for the single name BrasilAgro. The first one, filed at INPI under No. 829541870 is a service trademark, refers to NCL (9) 35 - marketing, distribution, importation and export of agricultural and livestock products, was approved on November 1, 2011 and expires on November 1, 2022. The second one, filed under No. 829541853, refers to a product trademark, on NCL 31, involving products related to agriculture and livestock, such as agricultural products, vegetables, forestry, grains and animals, fruits, vegetables and fresh vegetables, seeds, plants and natural flowers, animal food and malt, was approved on September 20, 2016 and remains in force until September 20, 2026. Finally, the third trademark registration application for the name BrasilAgro had the analysis thereof postponed by means of a decision dated June 28, 2011, and is halted given that it is pending of evaluation of another prior trademark registration application by the INPI. Following the Merger of Agrifirma (Agrifirma Agro Ltda.), the company also became the title owner of the following trademarks: Registration No. 830154647, concerning the participation in other companies as a partner or shareholder, purchase and sale of real estate, and the management of real estate, which was renewed on February 8, 2021 and will expire on February 8, 2031; Registration No 830154566, concerning coffee and cotton processing services, which was registered on November 29, 2016 and will expire on November 29, 2026; Registration No 830154620, concerning harvesting services (agricultural services), services of advice, consultancy and information on research in the field of agriculture, which was renewed on February 8, 2021 and will expire on February 8, 2031; Registration No. 830154663, concerning buying, selling, importing, exporting and commercialization of products related to agriculture, livestock and reforestation, such as coffee, cotton, soy, corn, firewood, cattle and their derivatives, such as meat and milk, which was registered on February 14, 2012 and will expire on February 8, 2031; and Registration No. 830154582, concerning transport and storage services, which was renewed on February 8, 2021 and will expire on February 8, 2031. The parties agreed to define a first exchange ratio based on preliminary book values as of June 30, 2019, adjusted for the market value of the real estate held by the company and Agrifirma Holding. In addition, part of the consideration was agreed to be issued by the company in the form of subscription warrants. As a result, the number of shares and warrants to be issued to the shareholders of Agrifirma was set at 5,215,385 shares and 654,487 warrants. Regulations As of June 30, 2023, the company owned and managed 200 environmental licenses, including water use licenses, operating permits, controlled burning and vegetation clearing permits. In Brazil, all rural properties are required by law (Law No. 12.651/12 and Decrees Nos. 7.830/2012 and 8.235/2014) to register with the rural environmental register (CAR). All of the company's owned properties are registered or in the process of being registered with CAR. The company owns and manages approximately 100 CARs. History BrasilAgro - Companhia Brasileira de Propriedades Agrícolas was incorporated under the laws of Brazil in 2005.