Dear Superintendent Truschke:

I want to say thank you to the school district for allowing NatureSweet to utilize the Bonita Elementary School gymnasium on March 25, 2021 to hold an informational meeting with local families. The information that I presented regarding the future of the NatureSweet Bonita greenhouse facilities and the potential impacts to the school district was transparent and based upon property taxation data provided by Graham County, the school district’s budget and an analysis prepared by Elliott D. Pollack & Company.

Given the information presented at that meeting, together with my prior discussions with you, I was somewhat surprised to learn of a recent newspaper article in the Eastern Arizona Courier that was based upon an email communication from you to the press. In this article posted on March 31st, you provided the following response to my presentation to Bonita families:

Despite what NatureSweet’s executive chairman told a group of Bonita residents last week, Bonita School District Superintendent Jonathan Truschke said the district isn’t in danger of losing hundreds of thousands of dollars if the tomato grower goes under.

In an email to the Eastern Arizona Courier, Truschke said the school district has been advised by business consultant Eldon Woodall that under Arizona Revised Statute 15-980 if NatureSweet leaves and does not pay their property taxes, the state would pay NatureSweet’s portion of the total property taxes to the district until “such time the taxes get paid by the owner or at auction.”

Truschke said whether or not NatureSweet pays their taxes, the Bonita School District will operate under the same budget capacity as the previous year.

After reading this article, I felt compelled to respond to you directly and to clear up the misunderstandings regarding NatureSweet’s future in Bonita and the consequences to the school district that have been analyzed by Elliott D. Pollack and Company. To be clear, NatureSweet as a company is financially healthy and not in any danger of declaring bankruptcy. It is only the Bonita site that is not profitable, not the company.

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Both Danny Court of Elliott D. Pollack and Company and a tax attorney have analyzed and confirmed the potential consequences in the event NatureSweet is prevented from diversifying the greenhouse operations by allowing medical grade cannabis to be grown by a buyer. The information that I presented at the March 25th meeting was accurate, as further addressed by Danny Court of Elliott D. Pollack & Company below:

“After reading the article published in the Eastern Arizona Courier, we would like to help clarify a misconception about a study that Elliott D. Pollack & Company completed for NatureSweet. Both Superintendent Truschke and Supervisor Smith gave responses to a scenario that was not proposed by NatureSweet, nor was it the subject of our property tax analysis. They incorrectly assumed that NatureSweet would fall into bankruptcy and/or simply stop paying the property taxes they owed, which could indeed be covered by the state in the case of tax delinquency. But tax delinquency is not the issue. According to NatureSweet executives, NatureSweet as a company is financially healthy and not in any danger of declaring bankruptcy. It is only the Bonita site that is not profitable, not the company.

Our analysis calculated potential financial impacts to the Bonita Elementary School District in the event NatureSweet’s property value was reduced or eliminated, which we understand is a very real possibility if NatureSweet cannot sell a portion of their property to a viable user. If their facility were to be deemed obsolete, meaning it can’t be operated and no income can be generated, or the greenhouses dismantled, or the facility donated to a public university, then the value of the property would be substantially diminished or even removed from property tax rolls (a public university would not be subject to property tax). There is no guarantee that the property can retain its current value. In fact, if NatureSweet cannot diversify and sell some of its property, there is a significant likelihood that the current property values will be drastically reduced, as will tax revenues benefitting the school district. And in the scenario of a property value reduction, such as this, the state would not permanently cover that shortfall and district funding could decline by hundreds of thousands of dollars.”

I hope this clarifies NatureSweet’s difficult reality as well as the significant and lasting consequences to the Bonita Elementary School District. As I said during our meeting with the families, NatureSweet wants to work with this community to be successful and to support the School District. Despite the company’s 8 years of investments into the facilities, including in multiple tomato varieties as well as converting the facility to a certified organic site, diversification with medical grade cannabis is our only viable option. NatureSweet and Bayacan are ready, willing and able to address and resolve questions and concerns for the benefit of this community and Graham County. If you would like to discuss this further, please do not hesitate to contact me at bambelang@naturesweet.com.

Respectfully,

Bryant Ambelang,

Executive Chairman, NatureSweet

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