CubicFarm Systems Corp. announces execution of Letter of Offer with BDC for C$5 million in financing
VANCOUVER, BC, JULY 23, 2020 – CubicFarm® Systems Corp. (TSXV:CUB) (“CubicFarms” or the “Company”) is pleased to announce that it has entered into a Letter of Offer of financing with BDC Capital Inc. (“BDC”), a wholly owned subsidiary of Business Development Bank of Canada.
BDC’s Cleantech Practice has agreed to provide CubicFarms with growth capital in the amount of C$5,000,000 through a commercial debt financing (the “Loan”). The Loan will bear interest at an annual fixed rate of 10%, which will be decreased as the Company meets performance targets set by BDC. The secured Loan is payable by June 2025.
CubicFarms CEO Dave Dinesen commented: “I would like to recognize BDC and its commitment to helping high-growth technology companies in Canada to thrive. CubicFarms fits within the BDC’s Cleantech Practice’s mandate of investing in companies with commercially validated IP-protected technologies that positively impact the environment, as well as companies demonstrating proven market traction with significant potential for revenue growth and commercial contracts. This non-dilutive financing from BDC – combined with our recent raises with Ospraie Ag Science and dairy entrepreneur Harry DeWit – will significantly boost CubicFarms’ cash reserves and position us well to strategically scale the business.”
BDC’s Cleantech Practice Director, Karim Kennedy commented: “BDC is proud to support one of Canada’s leaders in controlled-environment agriculture in its mission to provide the world with sustainably produced food through cutting-edge machine and crop technologies. CubicFarms helps to solve many problems plaguing traditional agriculture, namely weather inconsistencies and the declining availability of arable land, water, labour. Controlled, indoor growing is poised to become a mainstream method of farming as farmers discover its high crop quality, high yield benefits – while minimizing environmental impacts through a vast reduction of farm water usage and emissions from localizing food production.”
CubicFarms closes $1.16 million private placement with leading dairy entrepreneur Harry DeWit and company insiders
CubicFarms is also pleased to announce that further to its press release dated July 15, 2020, the Company has completed the non-brokered private placement with Harry DeWit and company insiders, involving the issuance of 1,659,600 common shares of CubicFarms at a price of C$0.70 per share for gross proceeds of C$1,161,720 (the “Offering”). Insiders who participated in the Offering include Jeff Booth, Chairman; Rodrigo Santana, Chief Operating Officer; and Tim Fernback, Chief Financial Officer.
“CubicFarms is so fortunate to have such outstanding support from some of the best farming industry leaders and our own colleagues. Great customers and a great team can together achieve truly great things. Thank you Harry, Jeff, Rodrigo and Tim!” said Mr. Dinesen.
The net proceeds from the Loan and Offering are expected to be used for research and development to expand machine capabilities and crop varieties, and working capital.
All securities issued pursuant to the Offering will be subject to a hold period under applicable securities laws, which will expire four months plus one day from the closing date of the Offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold within the United States unless an exemption from such registration is available.
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 growers around the world to produce 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 growers, licensing its technology and providing 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.
BDC is the only bank devoted exclusively to entrepreneurs. It provides access to financing, both online and in-person, as well as advisory services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of risk capital solutions. For 75 years and counting, BDC’s purpose has been to support entrepreneurs in all industries and all stages of growth. For more information and to consult more than 1,000 free tools, articles and entrepreneurs’ stories, visit bdc.ca.
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 repayment terms of the Loan; and use of proceeds and anticipated benefits to the Company of the Loan and the Offering. Such statements involve known and unknown risks, uncertainties, and other factors including evolving market conditions, 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 the Company obtaining the approval of the Offering from the TSX Venture Exchange. 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 re