NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES
VANCOUVER, British Columbia, March 13, 2023 – CubicFarm® Systems Corp. (“CubicFarms” or the “Company”) (TSX:CUB), a leading local chain agricultural technology company, today announced the Company’s potential delay in filing its annual financial statements for the year ended December 31, 2022 and related management discussion and analysis and certifications (collectively, the “Financial Statements”), the annual information form for the fiscal year ended December 31, 2022, and the CEO and CFO certificates relating to the Financial Statements (the “Required Filings”) beyond the prescribed filing deadlines.
The Company’s potential delay in filing its Required Filings on time is due to the following circumstances:
- The Company believes it needs more time to prepare the annual financial statements and associated filings, and complete the financial audit with its auditor. This is primarily due to a significantly reduced headcount in the finance team in connection with the Company’s cost reduction measures as previously announced.
- As part of its ongoing restructuring efforts, the Company is prioritizing payments in order to ensure operational sustainability. This has resulted in an outstanding balance with its auditor. The auditor has made a decision to temporarily halt services until the Company settles the outstanding balance for services provided.
Considering the foregoing factors, it is the Company’s view that should the Required Filings not be filed by March 31, 2023, then, the present circumstances warrant the imposition of a management cease trade order (“Management CTO”), rather than a cease trade order (“CTO”), as contemplated under National Policy 12-203 – Cease Trade Order Orders for Continuous Disclosure Defaults (“NP 12-203”). The Company has applied for a Management CTO, however there is no assurance that it will be granted.
The Company’s Required Filings are required to be filed within one month of the prescribed filing deadline of March 31, 2023. The Company’s failure to file such within this one month period may result in the securities commissions or regulators imposing an Issuer Cease Trade Order.
The Company proposes to remedy the default by settling the outstanding balance with its auditor upon closing of its prospectus offering (see News Release of the Company dated March 9, 2023) and diligently working with its auditor to ensure the filing of its Required Filings as soon as possible. The Company expects to be in a position to issue and file the Required Filings by no later than April 30, 2023. The Company and its auditor are in active discussions to settle the outstanding account as soon as practicable. The Company’s finance team is diligently preparing materials for the financial audit and believes that such materials will be ready for the auditors’ review when services resume, allowing the auditor to complete its services on or before April 30, 2023.
The Company therefore fully expects to file its Required Filings prior to the end of the additional one month period as prescribed by NP 12-203. Further, the Company has confirmed that it intends to satisfy the provisions of the alternative information guidelines described in sections 9 and 10 of NP 12-203 for so long as it remains in default for failure to file the Required Filings. Should the Company fail to file the appropriate Default Status Reports as prescribed by NP 12-203, the securities commissions or regulators may, as a result of such failure, impose an Issuer Cease Trade Order.
The Company confirms that it is not subject to any insolvency proceeding as of the date hereof. The Company also confirms that there is no other material information concerning the affairs of the Company that have not been generally disclosed as of the date herein.
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 Required Filings; application and grant of an Management CTO, and the Company’s ability to settle its account with its auditor. 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, 2021, 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.
HydroGreen produces Automated Vertical Pastures™, a type of smart farming equipment that uses a unique process to sprout grains such as wheat and barley, in a controlled growing environment to efficiently produce a high-performance feed ingredient for livestock 365 days a year. HydroGreen’s equipment is simple and easy to operate and performs all growing functions automatically, including seeding, watering, lighting, harvesting, and re-seeding, which allows livestock businesses to feed consistent nutrition every day with minimal labour. When balanced correctly in the ration, HydroGreen sprouted grain modifies animal digestion which enhances productivity and reduces the amount of enteric methane emitted in ruminant livestock. The result also enables environmental benefits to the farm while helping to meet increasing demand for valuable farm-based inset and offset carbon credits.
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.