CubicFarm Systems Corp. issues first quarter financial results
Vancouver, BC – (AccessWire – November 28, 2019) – CubicFarm® Systems Corp. (TSXV:CUB) (“CubicFarms” or the “Company”) today reported its financial and operating results for the three months ended September 30, 2019.
Key financial highlights
- Revenue for the three months ended September 30, 2019 was $240,701, and gross margin was 50%.
- Total operating and general administrative expenses was $1,693,489, compared to $286,213 for the same period in the previous year.
- Selling expenses, which include commissions and freight, were $23,050, compared to $27,229 for the three months ended September 30, 2018.
- The Company incurred research expenses in the amount of $356,746 for further automation of its systems, growth of new crops in the systems and further transformation of these crops through juicing. These costs include salaries, materials, parts and consumables related to research activities. Research costs for the three months in the previous year were $171,212.
- Net loss and comprehensive loss for the three months ended September 30, 2019 were $2,276,147, compared to $468,777 for the three months ended September 30, 2018.
- On July 9, 2019, CubicFarms common shares commenced trading on the TSX Venture Exchange as a Tier One issue under the symbol “CUB”.
- On July 11, 2019, the Company announced a signed agreement for a large-scale commercial CubicFarms system in the Calgary, Alberta area and received $412,764 in June 2019 from the customer as a deposit. The agreement and deposit cover the Calgary region where this customer will be the exclusive CubicFarms licensee. The system’s plan includes 20 CubicFarms patented growing machines, two patented germination machines, and a proprietary supporting irrigation system. The total sales agreement is valued at approximately US$3.2 million and the Company expects to complete the installation of the system by the end of March 2020.
- On September 24, 2019, the Company appointed Rodrigo Santana as its interim Chief Financial Officer (CFO). Supported by the CubicFarms finance team, Mr. Santana will also continue performing his role as Chief Operating Officer (COO). Mr. Santana is very experienced in the dual role of COO and CFO, as he held both positions in his previous employment at Sacré-Davey Engineering.
- On October 8, 2019, the Company announced that it finalized an agreement for the sale of a large-scale CubicFarms system in Montana, USA and received an initial deposit of $332,356 in October 2019 from the customer. This was the Company’s second sale of a large-scale system in the US. The system’s plan includes 18 CubicFarms patented growing machines, two patented germination machines, and a proprietary supporting irrigation system. The total sales agreement is approximately US$3 million, representing the second-largest sale agreement to date. The Company expects to complete the installation of the system by the end of March 2020.
- On October 28, 2019, the Company announced that ZenCube, its vertical-farming machine for growing hemp and cannabis, is fully operational at a showcase and R&D facility in Langley, Canada.
- On November 6, 2019, the Company announced that it has entered into a global Reseller Agreement with Groviv, a leader in the science and technology of controlled-environment agriculture. Groviv, a division of Nu Skin Enterprises – a minority investor in CubicFarms – will lead global sales for CubicFarms and has appointed Joe Huston, its Vice President of Business Development to direct the effort. Mr. Huston has extensive retail sales and distribution experience, working with brands such as Walmart, Kroger and Costco.
CubicFarms CEO Dave Dinesen commented: “We are pleased with the progress we made this quarter in sales and new partnerships. Our financial results reflect a company that anticipates significant growth, where investments in staffing up our team, increasing automation and expanding the crop varieties on offer to our customers, position us to capture strategic international markets and drive sales.”
CubicFarms’ first quarter financial statements and management’s discussion and analysis will be issued and filed on SEDAR at www.sedar.com on November 28, 2019 and will be available on the same day on CubicFarms’ website at https://cubicfarms-web.azurewebsites.net/investors/.
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 an ag-tech company commercializing large scale, vertical farming solutions for global industrial markets. Founded in 2015, the Company’s mission is to provide industries around the world with efficient growing systems capable of producing predictable crop yields. CubicFarms offers turnkey, commercial scale, hydroponic, automated vertical farm growing systems that can grow predictably and sustainably for 12 months of the year virtually anywhere on earth. CubicFarms enables its customers in the fresh produce, animal feed, nutraceutical, and hemp/cannabis industries to grow locally and to provide their markets with safe, sustainable, secure and fresh ingredients that are consistent in colour, size, taste, nutrition and allows for a longer shelf life. Further support and value is provided to customers through the Company’s patent-pending germination technology and proprietary auto harvesting and processing methods.
Using its unique, undulating 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. The Company has sold and installed systems in Canada and the US, and is currently negotiating with a global pipeline of prospective customers. It also operates one wholly owned facility in Pitt Meadows, British Columbia, and sells its produce in the province to retail and wholesale customers under the brand name Thriiv Local Garden™.
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 Company’s sales and growth prospects. 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.