VANCOUVER, British Columbia, September 12, 2022 – CubicFarm® Systems Corp. (“CubicFarms” or the “Company”) (TSX:CUB), a leading local chain agricultural technology company, today announced additional cost reduction measures to optimize operating efficiency and accelerate its path to profitability. All amounts are in Canadian dollars.
In addition to previously announced cost reduction measures, the Special Committee of the Board of Directors has been working closely with management to prioritize the Company’s lines of business. In order to focus on key ongoing strategic initiatives and realign its corporate structure, the Company is further reducing operating expenses by approximately $9.0 million on an annualized basis, consisting of $6.4 million of payroll related expenses and $2.6 million of non-payroll related expenses.
Combined with previously announced cost reduction measures on August 15, 2022, the Company has provided notice to 87 employees or 50.4% of its workforce. This translates to an estimated annualized savings of $15.6 million, or 50.3% of cash-based operating expenses on a 12-month basis as of July 31, 2022.
“Today was a tough day at CubicFarms because exceptional people will be leaving our company. I am grateful to each person for what they have contributed; their world-class talents will continue to have positive ripple effects, not only in our company, but for the future of ag-tech and we owe them a debt of gratitude,” said Edoardo De Martin, interim Chief Executive Officer.
De Martin added, “Going forward, CubicFarms will operate and succeed as a nimble, cost-conscious business, driven by disciplined growth and data from key strategic initiatives. In particular, our HydroGreen systems put us in a great position with on-site US-based manufacturing capability and an expanding dealer network, giving us immediate access to the farm and cattle industries where there is strong demand for our technologies. We must conserve agricultural resources such as land, water, and energy using innovative indoor growing technologies. Farmers around the world want nutritious livestock feed for their animals and they need innovative solutions to address drought, water shortages, and land scarcity issues. As climate change, persistent drought, and long supply chains continue to disrupt populations and economies, the demand for our on-farm solutions has never been greater.”
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 enables significant environmental benefits to the farm.
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.
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 Company’s growth strategy, the results of the Company’s cost reduction measures.
Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements may prove to be inaccurate. 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.