CubicFarm Systems Corp. Announces Closing of First Tranche of Private Placement

Rhea-AI Summary

CubicFarm® Systems Corp. closes the first tranche of a non-brokered private placement, issuing 4,505,502 Units at C$0.20 per Unit for gross proceeds of approximately C$900,000. The Company plans to issue up to 10,250,000 Units at a price of C$0.20 per Unit, aiming for gross proceeds of up to C$2.5 million. The proceeds will be used for general working capital, debt repayment, and administrative purposes. Insider participation by the interim CEO is disclosed as a related party transaction.

Vancouver, British Columbia--(Newsfile Corp. - February 12, 2024) - CubicFarm® Systems Corp. (TSXV: CUB) ("CubicFarms" or the "Company"), a leading local chain agricultural technology company, today announces that it has closed the first tranche (the "First Tranche") of its non-brokered private placement (the "Private Placement") of units (the "Units") of the Company.

Pursuant to the Private Placement, the Company intends to issue up to 10,250,000 Units at a price of C$0.20 (the "Offering Price") per Unit for gross proceeds of up to C$2.5 million. Each Unit will consist of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (the "Warrants"). Each Warrant will entitle the holder thereof to acquire one Common Share of the Company at an exercise price of C$0.25 (the "Exercise Price") per Common Share for a period of 24 months from the date of issuance.

Under the First Tranche, the Company issued 4,505,502 Units at a price of C$0.20 per Unit for gross proceeds of approximately C$900,000.

The Company intends to use the proceeds of the First Tranche for general working capital, approximately 360,000 as partial repayment of its secured debt and general administrative purposes.

The securities offered in the First Tranche are subject to a four month and a day transfer restriction from the date of issuance expiring on June 10, 2024, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.

Pursuant to the Private Placement, John de Jonge (the "Investor") is an insider of the Company by virtue of being the interim Chief Executive Officer of the Company. The Investor participate din the First Tranche of the Private Placement by purchasing 250,000 Units and, accordingly, this purchase constitutes a related party transaction as defined under Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The Company is exempt from the formal valuation and minority approval requirement under MI 61-101 as the fair market value of the insider's participation in the aggregate in the Private Placement does not exceed more than 25% of the market capitalization of the Company, as set forth in Sections 5.5(a) and 5.7(1)(a) of MI 61-101. The Company has not filed a material change report more than twenty-one (21) days before the closing date of the First Tranche of the Private Placement, as the details of the First Tranche were not finalized until February 8, 2024, and the Company wished to close the First Tranche as soon as practicable.

Completion of the Private Placement remains subject to the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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 leading 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.

For more information, please visit www.cubicfarms.com.

Contact info@cubicfarms.com for media or investors@cubicfarms.com for investor inquiries.

Forward looking and other cautionary statements

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 the closing of a subsequent tranche of the private placement, the receipt of regulatory approvals, and the use of proceeds form the Private Placement. 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, risks related to the ability and time frame within which the Company will execute and implement the Consolidation, the Company's ability to raise additional funding, the Company's ongoing or future litigation, the Company's ability to establish, maintain and defend intellectual property rights in the Company's products, product liability claims, insurance and recalls, the Company's manufacturing operations, the manufacturing capacity of third-party manufacturers for the Company's products, including risks of supply interruptions impacting the Company's ability to manufacture its own products 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/197581

FAQ

How many Units were issued in the first tranche of CubicFarm® Systems Corp.'s private placement?

CubicFarm® Systems Corp. issued 4,505,502 Units in the first tranche of its non-brokered private placement.

What is the price per Unit in CubicFarm® Systems Corp.'s private placement?

The price per Unit in CubicFarm® Systems Corp.'s private placement is C$0.20.

How much gross proceeds did CubicFarm® Systems Corp. aim to achieve through the private placement?

CubicFarm® Systems Corp. aimed for gross proceeds of up to C$2.5 million through the private placement.

What will the proceeds from the private placement be used for?

The proceeds from the private placement will be used for general working capital, debt repayment, and administrative purposes.

Who participated in the first tranche of CubicFarm® Systems Corp.'s private placement as an insider?

John de Jonge, the interim Chief Executive Officer of the Company, participated in the first tranche of the private placement as an insider.