Sale follows the January 2020 closing of CubicFarms’ strategic acquisition of HydroGreen, Inc., the manufacturer of the HydroGreen system
Vancouver, Canada – (AccessWire – March 9, 2020) – CubicFarm® Systems Corp. (TSXV: CUB) (“CubicFarms” or the “Company”) is pleased to announce that it has received a signed sales order and a deposit for the sale of 24 HydroGreen nutritious livestock feed growing machines to an organic-certified dairy farm in Western Canada. The Company expects to enter into its standard equipment purchase and sale agreement with the customer in the coming days.
CubicFarms CEO Dave Dinesen commented: “We are very excited about this sale. The 24-machine HydroGreen system will yield approximately 25.5 million pounds (11.6 million kg) of nutritious, live, sprouted grain feed per year. Additionally, the system will provide the equivalent of 360 acres of grazing land, and enable nutritious live grass feeding 12 months a year regardless of outside conditions such as snow or drought.
“CubicFarms’ expansion into the automated nutritious livestock feed space allows us to leverage our experience in the automated vertical farming space. We are proud to achieve this significant milestone of our first large sale in the nutritious livestock feed space, just a week after announcing our largest sale to date of a 100-machine fresh produce system. Our customer, the owner of the organic dairy farm, is a keen promoter of animal well-being and prioritizes animal health. The HydroGreen system provides a safe, consistent, reliable, and nutritious feed source for the customer’s herd.”
The 24-machine system and its accompanying seed and feed handling, plumbing, HVAC and electrical systems will represent a total of $4.8 million in revenues to the Company, and installation is planned for June 2020.
The Company has a current backlog at $29.5 million representing 168 machines under deposit and awaiting installation. The current backlog is anticipated to be recognized in revenue in mid-2020 to mid-2022.
The sale – representing CubicFarms’ first sale in the nutritious livestock feed space – follows the January 2020 closing of its strategic acquisition of HydroGreen, Inc., the manufacturer of the HydroGreen system. The HydroGreen system utilizes a unique process to sprout grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. The system performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding – all with the push of a button – to deliver nutritious livestock feed without the typical investment in fertilizer, chemicals, fuel, field equipment and transportation. A video of the system growing feed from seed in six days, is available here: https://www.youtube.com/watch?v=6gb_hpPcjQw.
The machines sold are in the six-section configuration (photo below). Each six-section machine is 50 feet long, 8 feet wide and 10 feet high, and can produce approximately 2,900 pounds (1,315 kilograms) of feed per day. Therefore, the 24-machine system is expected to yield approximately 70,000 pounds (31,570 kilograms) of feed per day for the customer’s dairy operation.
Photo: The fully automated HydroGreen six-section machine.
Reseller Artex Feed Solutions marketed and sold the system to the customer. Artex Feed Solutions is a joint venture company which is 50% owned by CubicFarms and 50% owned by Artex Barn Solutions, a leader in agricultural supplies for over 40 years. Artex Feed leverages Artex Barn’s international dealership network in over 40 countries to sell the HydroGreen system, focusing on North American markets, then on qualified leads in China, Indonesia and the Middle East – strategic areas with substantial market potential due to changing food consumption patterns. Additionally, Artex Feed will provide installation services to purchasers of the systems, as well as training and troubleshooting.
Neither the 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 CubicFarm® Systems Corp.
CubicFarm Systems Corp. (“CubicFarms”) is a technology company that is developing and deploying technology to feed a changing world. Its proprietary technologies enable farmers around the world to grow high-quality, predictable crop yields. CubicFarms has two distinct technologies that address two distinct markets. The first technology is its patented CubicFarm™ System, which contains patented technology for growing leafy greens and other crops. Using its unique, undulating-path growing system, the Company addresses the main challenges within the indoor farming industry by significantly reducing the need for physical labour and energy, and maximizing yield per cubic foot. CubicFarms leverages its patented technology by operating its own R&D facility in Pitt Meadows, British Columbia, selling the System to farmers, licensing its technology and providing industry-leading vertical farming expertise to its customers.
The second technology is CubicFarms’ HydroGreen System for growing nutritious livestock feed. This system utilizes a unique process to sprout grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. The HydroGreen System is fully automated and performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding – all with the push of a button – to deliver nutritious livestock feed without the typical investment in fertilizer, chemicals, fuel, field equipment and transportation. The HydroGreen System not only provides superior nutritious feed to benefit the animal, but also enables significant environmental benefits to the farm.
Cautionary statement on forward-looking information
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 signing of the standard equipment purchase and sale agreement with the customer; the planned system installation in June 2020; anticipated benefits to the customer; and the anticipated revenue recognition in mid 2020 to mid 2022. Such statements involve known and unknown risks, uncertainties, and other factors 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. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict”, and other similar terminology, or state that certain actions, events, or results “may”, “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.