Vancouver, British Columbia--(Newsfile Corp. - January 17, 2025) - CubicFarm® Systems Corp. (TSXV: CUB) ("CubicFarms" or the "Company"), a local chain agricultural technology company, announces that, further to its previous press release of July 15, October 2, October 24 and October 29, 2024, the Company is pleased to announce that on January 16, 2025, the British Columbia Securities Commission (the "BCSC"), as the principal regulator of the Company, issued a full revocation (the "Revocation") of the failure-to-file cease trade order that it previously issued against the Company dated July 15, 2024 (the "FFCTO").
The Company has filed (i) its audited annual financial statements, management's discussion and analysis and related certifications for the year ended December 31, 2023, (ii) its unaudited interim financial statements, management's discussion and analysis and related certifications for the three months ended March 31, 2024 and 2023, and (iii) its unaudited interim financial statements, management's discussion and analysis and related certifications for the three and six months ended June 30, 2024 and 2023 (collectively, the "Financial Disclosure Documents").
Copies of the Financial Disclosure Documents are available on the Company's SEDAR+ profile at www.sedarplus.ca. The Company has applied to the TSX Venture Exchange (the "TSXV") for reinstatement for trading. However, there can be no assurance of the outcome of the TSXV's reinstatement review.
Company Updates
The Company is in default on its business loan obtained on August 28, 2022, as amended from time to time, the convertible debentures issued on June 2, 2022, and its senior secured term loan dated September 20, 2022. The Company is in the process of negotiating extensions and amendments to these loans that will clear the default status of the loans. If successful, such extensions will also result in the loans becoming non-current and therefore reduce the working capital deficit by approximately 50%.
There are associated risks if the Company is not able to negotiate loan amendments as it can lead to challenges such as default, liquidity constraints, and potential legal risks. Operational flexibility may be limited, affecting business opportunities and workforce management. Additionally, there could be reputational impacts, credit rating downgrades, and pressure on stock price or investor confidence.
The Company is also negotiating several sales deals which it expects to be signed in the coming months. As the Company has a substantial amount of inventory with additional stock that has been previously impaired, this will be used to fulfil the sales with minimal additional costs incurred. As the Company's sales network grows, and as the Feed centers are completed, the Company will be able to generate more consistent revenue which will in turn reduce the working capital deficit.
In addition, the Company is experiencing a positive impact from the appreciation of the USD relative to the Company's functional currency of CAD. Deposits held in USD, which were previously made at lower exchange rates, have increased in value due to the strengthening of the currency. This will result in a gain on the Company's balance sheet and as deposits are converted to revenue at the higher exchange rates, this will also positively impact on the financial results.
The Company currently has a working capital deficiency of approximately $28 million, with around 50% of this amount related to loans payable, as previously mentioned. The Company plans to address it through the ongoing project completions, new contract signings in the near future, and favorable foreign currency trends.
About HydroGreen
HydroGreen's Automated Vertical Pastures™ technology utilizes a unique process to sprout grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. HydroGreen's fully automated indoor growing technology performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding-all with the push of a button-to deliver nutritious fresh forage for livestock without the typical investment in fertilizer, chemicals, fuel, field equipment, and transportation. Automated Vertical Pastures™ not only provide superior nutritious feed to benefit the animal but also enable significant environmental benefits to the farm.
About CubicFarms
CubicFarms is a local chain agricultural technology company developing and deploying technology to feed a changing world. Its proprietary ag-tech solutions enable growers to produce high quality, predictable produce and fresh livestock feed with HydroGreen Nutrition Technology, a division of CubicFarm Systems Corp. The CubicFarms™ system contains patented technology for growing leafy greens and other crops onsite, indoors, all year round. CubicFarms provides an efficient, localized food supply solution that benefits our people, planet, and economy.
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws, including, without limitation, statements with respect to: statements regarding the timing, review, completion and filing of the TSXV reinstatement application, the impact of the appreciation of the USD relative to the CAD; the renegotiation of the Company's debt; ongoing project completions, new contract signings and the future sale deals. Such statements involve known and unknown risks, uncertainties, and other factors and assumptions which may cause the actual results, performance, or achievements of CubicFarm Systems Corp., or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information including, without limitation, the risk of the Company not being reinstated with the TSXV and the other factors disclosed under "Risk Factors" in the Company's annual information form for the year ended December 31, 2022, and those risks described in other documents incorporated or deemed to be incorporated by reference in the prospectus. Such statements can be identified by the use of words such as "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "forecast", "predict", and other similar terminology, or state that certain actions, events, or results "may", "can", "could", "would", "might", or "will" be taken, occur, or be achieved.
These statements reflect the Company's current expectations regarding future events, performance, and results and speak only as of the date of this news release. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except as required by securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if the Company's expectations regarding future events, performance, or results change.
