CubicFarm Systems Corp. Announces Filing of Annual Financial Statements and Provides Update on Cease Trade Order

Rhea-AI Summary

CubicFarm Systems Corp. (TSXV: CUB) has filed its annual audited financial statements for the fiscal year ended December 31, 2023. Revenue for Q4 2023 was $0.5 million, up from $0.2 million in the prior year. Full-year revenue increased to $4.3 million from $3.6 million. Corporate overhead for Q4 2023 decreased by 73% to $2.3 million, while full-year overhead reduced by 65% to $11.2 million.

The company recorded non-cash impairment charges of $3.5 million for Q4 and $3.4 million for the full year. Net loss for Q4 2023 was $5.5 million, down from $12.9 million in the prior year. Full-year net loss decreased to $16.4 million from $61.2 million. CubicFarms is focusing on disciplined growth and exploring options, particularly with its HydroGreen division serving the dairy and cattle industries.

The company is under a failure-to-file cease trade order (FFCTO) issued by the British Columbia Securities Commission. CubicFarms plans to file interim financial statements for Q1 and Q2 2024 by October 11 and October 24, 2024, respectively, and will then apply for FFCTO revocation.

Positive

• Revenue increased to $4.3 million in FY2023 from $3.6 million in the previous year
• Corporate overhead reduced by 65% to $11.2 million for FY2023
• Net loss decreased to $16.4 million in FY2023 from $61.2 million in the prior year
• Q4 2023 revenue increased to $0.5 million from $0.2 million in the prior year

Negative

• Non-cash impairment charges of $3.4 million recorded for FY2023
• Company under a failure-to-file cease trade order (FFCTO)
• Delayed filing of Q1 and Q2 2024 financial statements
• Net loss of $5.5 million in Q4 2023, despite improvement from previous year

Vancouver, British Columbia--(Newsfile Corp. - October 2, 2024) - CubicFarm® Systems Corp. (TSXV: CUB) ("CubicFarms" or the "Company"), a leading local chain agricultural technology company, announces that, further to its previous press releases of April 15, 2024, May 15, 2024, May 29, 2024, June 12, 2024, June 26, 2024 and July 15, 2024, the Company is pleased to announce that is has filed its annual audited financial statements for the fiscal year ended December 31, 2023, the related management's discussion and analysis and annual information form for the fiscal year ended December 31, 2023 and related filings (collectively, the "Required Annual Filings"). The Required Annual Filings can be accessed under the Company's profile at www.sedarplus.ca and will be available on the same day on CubicFarms' website at https://cubicfarms.com/investors/.

Fourth Quarter and Fiscal Year End Financial Results

• Revenue for the three months ended December 31, 2023, was $0.5 million, compared to $0.2 million in the prior year. Revenue for the year ended December 31, 2023 was $4.3 million, compared to $3.6 million in the prior year. The increase was due to higher machine sales.

• Corporate overhead, which included general and administrative, selling, and research and development expenses was $2.3 million for the three months ended December 31, 2023, reduced by $6.1 million or 73% compared to $8.5 million in the prior year due to the Company's cost reduction plan that was implemented in the second half of 2022 and has continued through the year 2023. For the year ended December 31, 2023, corporate overhead was $11.2 million, compared to $31.6 million in the prior year, signifying a 65% reduction in overhead costs.

• The Company recorded non-cash impairment charges of $3.5 million for the three months and $3.4 million for the year ended December 31, 2023 relating to its Fresh and Feed divisions, as a result of the Company's assessment of the carrying amount of its net assets in excess of the recoverable amount.

• Net loss for the three months ended December 31, 2023 was $5.5 million, compared to $12.9 million in the prior year. The lower net loss in Q4 2023 was primarily due to the lower operating expenses as mentioned above. Net loss for the year ended December 31, 2023 was $16.4 million, compared to $61.2 million in the prior year.

"As we move forward, CubicFarms is committed to continue operating as a lean, efficient business focused on disciplined growth," said Interim CEO of CubicFarms and President of HydroGreen, John de Jonge. "We continue to explore all options and remain optimistic about future prospects. With HydroGreen, we are well-positioned to serve the dairy and cattle industries, which have a strong demand for our technology and feed solution. The world continues to face challenges such as climate change, drought, and land scarcity, and so we remain dedicated to providing innovative indoor growing solutions that conserve agricultural resources and provide superior nutritious feed to benefit dairy and beef animals."

The Company anticipates filing the interim financial statements for the three-month period ended March 31, 2024, the related management's discussion and analysis for the three-month period ended March 31, 2024 and related filings in respect of the period ended March 31, 2024 by October 11, 2024, and interim financial statements for the three-month period ended June 30, 2024, the related management's discussion and analysis for the three-month period ended June 30, 2024, and related filings in respect of the period ended June 30, 2024 by October 24, 2024.

The British Columbia Securities Commission (the "BCSC") as the principal regulator of the Company issued a failure-to-file cease trade order (the "FFCTO") against the Company on July 15, 2024, under Multilateral Instrument 11-103 - Failure-To-File Cease Trade Orders In Multiple Jurisdictions, prohibiting the trading in or the purchasing of any securities of the Company by any person or company in Canada, including trades in the Company's common shares made through the TSX Venture Exchange, except in accordance with the following conditions for so long as the FFCTO order remains in effect: a beneficial securityholder of the Company who is not, and was not at the date of the FFCTO an insider or control person of the Company, may sell securities of the Company acquired before the date of July 15, 2024 if both of the following apply: (a) the sale is made through a "foreign organized regulated market", as defined in section 1.1 of the Universal Market Integrity Rules of the Canadian Investment Regulatory Organization; and (b) the sale is made through an investment dealer registered in a jurisdiction of Canada in accordance with applicable securities legislation. A copy of the FFCTO has been posted to the BCSC website.

Following the filing of the Required Interim Filings, the Company will file a revocation application to revoke the FFCTO. The Company will provide further updates as they become available.

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 https://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: statements regarding the timing, review, completion and filing of the Interim Required Filings, the revocation of the FFCTO and future prospects. 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 obtaining the Management CTO or file the Required Filing on time 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/225382

FAQ

What was CubicFarm Systems Corp's (CUBXF) revenue for the fiscal year 2023?

CubicFarm Systems Corp's revenue for the fiscal year ended December 31, 2023, was $4.3 million, compared to $3.6 million in the prior year.

How much did CubicFarm Systems Corp (CUBXF) reduce its corporate overhead in 2023?

CubicFarm Systems Corp reduced its corporate overhead by 65% to $11.2 million for the year ended December 31, 2023, compared to $31.6 million in the prior year.

What was the net loss for CubicFarm Systems Corp (CUBXF) in Q4 2023?

CubicFarm Systems Corp reported a net loss of $5.5 million for the three months ended December 31, 2023, compared to $12.9 million in the prior year.

When does CubicFarm Systems Corp (CUBXF) plan to file its Q1 and Q2 2024 financial statements?

CubicFarm Systems Corp anticipates filing Q1 2024 financial statements by October 11, 2024, and Q2 2024 financial statements by October 24, 2024.

What is the current status of CubicFarm Systems Corp (CUBXF) regarding the cease trade order?

CubicFarm Systems Corp is under a failure-to-file cease trade order (FFCTO) issued by the British Columbia Securities Commission and plans to apply for revocation after filing the required interim filings.