CubicFarm Systems Reinstates Trading on TSX Venture Exchange, Updates on Company Finances.

CubicFarm Systems Corp. has announced the reinstatement of trading on the TSX Venture Exchange, following a failure-to-file cease trade order issued by the British Columbia Securities Commission in July 2024. The company also provided an update on a loan from interim CEO John de Jonge and a pending claim related to a consulting agreement. The loan was used for working capital and operational needs, and the company believes it has a strong position in the mediation scheduled for April 2025.

CubicFarms Systems Corp. (CUB), a leading agtech company specializing in large-scale, automated, and vertically-stacked hydroponic growing systems, announced the reinstatement of trading on the TSX Venture Exchange following a failure-to-file cease trade order issued by the British Columbia Securities Commission (BCSC) in July 2024 [1]. The company has filed all outstanding financial disclosure documents and is negotiating loan extensions to address a significant working capital deficit.

The BCSC's revocation of the cease trade order comes after CubicFarms submitted audited financial statements and related documents for the year ended December 31, 2023, and unaudited interim financial statements for Q1 and Q2 of 2024 and 2023 [1]. These documents are now available on the company's SEDAR+ profile [1]. CubicFarms has applied for trading reinstatement on the TSX Venture Exchange but has not yet received confirmation of the outcome.

CubicFarms faces a substantial working capital deficit, primarily due to several loan defaults. The company is currently in default on a business loan obtained in August 2022, convertible debentures issued in June 2022, and a senior secured term loan dated September 2022 [1]. The company is actively negotiating extensions and amendments to these loans, which, if successful, would reduce its working capital deficit by approximately 50% [1].

To improve its financial position, CubicFarms is taking several measures. The company is negotiating contracts to sell inventory, including previously impaired stock, to minimize costs [1]. Additionally, the completion of feed centers and an expanding sales network is expected to generate consistent revenue [1]. Moreover, favorable foreign currency trends are expected to positively impact financial results, with appreciation of USD against CAD boosting the value of deposits [1].

However, if loan negotiations fail, CubicFarms faces potential challenges, including liquidity constraints, operational limitations affecting business opportunities and workforce management, and legal risks and reputational damage [1].

Sources:
[1] iGrow News. CubicFarms Latest News. https://igrownews.com/cubicfarms-latest-news/