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

Rhea-AI Summary

CubicFarm Systems Corp (TSXV:CUB) has filed its Q2 2024 financial statements, reporting revenue of $130,000 and $145,000 for the three and six months ended June 30, 2024, respectively. The company achieved significant cost reductions, with corporate overhead decreasing by 26% to $2.1 million in Q2. Net loss improved to $2.6 million for Q2 and $4.5 million for H1 2024, compared to $4.0 million and $8.7 million in the prior year. The company secured a sales agreement for two DGS machines and is working to revoke a failure-to-file cease trade order issued by the BCSC on July 15, 2024.

Positive

• Corporate overhead reduced by 26% to $2.1 million in Q2 2024
• Net loss improved by 35% to $2.6 million in Q2 2024
• Secured sales agreement for two DGS machines

Negative

• Low quarterly revenue of $130,000 in Q2 2024
• Trading suspended due to failure-to-file cease trade order
• No ongoing projects completed during the quarter

Vancouver, British Columbia--(Newsfile Corp. - October 29, 2024) - CubicFarm® Systems Corp. (TSXV:CUB) ("CubicFarms" or the "Company"), a leading local chain agricultural technology company, announces that, further to its previous press release of October 17, 2024, the Company is pleased to announce that is has filed its second quarter financial and operating results for the three and six months ended June 30, 2024 and 2023, and the related management's discussion and analysis for the three and six months ended June 30, 2024 and 2023 and related filings (collectively, the "Q2 Filings"). The Q2 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/.

Second Quarter Operational Highlights

• For the three and six months ended June 30, 2024, the Company reported revenue of approximately $130,000 and $145,000, respectively. Although none of the ongoing projects were completed during this period, it's worth noting that the Company secured a sales agreement for the sale of two DGS machines in the second quarter, as highlighted in the May 14, 2024, press release. This positions us well for future revenue growth as projects progress.
  
  
• For the three months ended June 30, 2024, corporate overhead, which includes general and administrative, selling, and research and development expenses, amounted to $2.1 million. This reflects a significant reduction of $0.8 million, or 26%, compared to $2.9 million in the prior year, thanks to the successful implementation of the Company's ongoing cost reduction plan throughout 2024. For the six months ended June 30, 2024, corporate overhead was $4.0 million, down by $2.8 million, or 41%, from $6.8 million in the previous year. These results demonstrate our commitment to enhancing operational efficiency and financial management.
  
  
• For the three and six months ended June 30, 2024, the net loss was $2.6 million and $4.5 million, respectively, an improvement from $4.0 million and $8.7 million in the prior year. The reduction in net loss for Q2 2024 was largely attributed to lower operating expenses, as noted earlier. This positive trend reflects our ongoing efforts to enhance efficiency and financial performance.

"I would like to thank our shareholders and Investors for their patience over the last 4 months as we have worked tirelessly to complete the 2023 Audited Financial Statements, Q1 Financial Statements, and the Q2 Financial Statements.", said the CFO of CubicFarms, Michael Kyne. "The Company will now apply for a full revocation of the failure-to-file cease trade order issued by the British Securities Commission on July 15, 2024. During this period of trading inactivity, the Company has continued its path of cost reductions and efficiency evaluations needed to prepare the Company for the execution of the new corporate strategy of building, owning, and operating regionally identified Feed as a Service (FaaS) centers. It is our plan in the last quarter of 2024 to execute on a number of initiatives that have already been communicated to the market in terms of agreements and feeding opportunities. In addition to the Feed Center initiatives, the Company has continued to invest time and money in the international sales channels to capitalize on sales to regions with government subsidies to new farming initiatives."

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.

The Company will immediately file a full revocation application to revoke the FFCTO with the British Columbia Securities commission and a reinstatement application with the TSX Venture Exchange. 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 revocation of the FFCTO, the execution of the Company's new corporate strategies and initiatives, the Company's ability to capitalize on sales to regions with government subsidies to new farming initiatives, the sales agreement for the sale of two DGS machines, potential growth, a strong and future prospects and demand for our technology and solutions. 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 full revocation of the FFCTO or the reinstatement to the TSX Venture Exchange 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/228293

FAQ

What was CubicFarm Systems (CUBXF) revenue in Q2 2024?

CubicFarm Systems reported revenue of $130,000 for the three months ended June 30, 2024.

How much did CubicFarm Systems (CUBXF) reduce its corporate overhead in Q2 2024?

CubicFarm Systems reduced its corporate overhead by 26% to $2.1 million in Q2 2024, compared to $2.9 million in the prior year.

When was the cease trade order issued for CubicFarm Systems (CUBXF)?

The British Columbia Securities Commission issued a failure-to-file cease trade order for CubicFarm Systems on July 15, 2024.