CubicFarm Systems Corp. (TSX: CUB), today reported its first quarter financial and operating results for the three months ended March 31, 2022.
“The Company continues to make steady progress with our Farmer Partner installations and have begun Farm School operational training for both BoomA Food Group from New South Wales in Australia and Vertical Acres from Indiana in the U.S.,” said Daniel Burns, Chief Financial Officer, CubicFarms. “Our team is focused on executing critical projects in the coming quarters that will add value to the Company and our stakeholders. While experiencing some delays due to disruptions to the global supply chain and inclement weather impacting site readiness of our Farmer Partners, we can expect our revenue will be compressed into subsequent quarters of this year,” said Burns.
“It’s exciting to see the significant installation progress of our beta project at Burnett’s,” said Dan Schmidt, President of HydroGreen, a division of CubicFarms. “With a dozen of our Automated Vertical Pastures™, our HydroGreen Certified dealers will bring potential new customers to Burnett’s for tours to see it in action and hear about the remarkable animal performance benefits.”
“This quarter, we strategically strengthened the Company by evolving our platform and indoor growing technologies,” said Dave Dinesen, Chief Executive Officer, CubicFarms. “As part of our sustainability measurements, our data scientists and R&D team are quantifying our plant and animal performance results as well as our input efficiencies. Our recently announced energy efficiency data demonstrates our leadership in the industry using 54 per cent to 62 per cent less energy than typical vertical farms.”
“The Company is continuously validating and benchmarking measurements including energy, water, and methane emissions,” said Dinesen. “Findings include 24% methane reductions for dairy cows fed HydroGreen fresh forage and up to 48% methane reductions in the preliminary results from ongoing beef cattle feeding trials. These will provide immense value for our Farmer Partners using our indoor growing technologies and we look forward to sharing more results.”
First Quarter End Financial Results
- The Company currently has a total of 204 modules pending installation. System sales pending manufacturing and installation are valued at approximately USD $27.6 million.
- HydroGreen Certified Dealer commitments representing more than 100 machines for 2022 are valued at over $23 million.
- Revenue for the three months ended March 31, 2022, was $243,912.
- Net loss for the three months ended March 31, 2022, was $8,760,249, a 138% increase from the same period ending March 31, 2021.
- General administrative expenses increased 22% to $3,938,348 for the three months ended March 31, 2022, reflecting the continued expansion of the Company’s business and necessary staffing additions.
- Research and development expenses of $2,509,018 were incurred in the three months ended March 31, 2022, a 120% increase from the same period of the previous fiscal year.
- The Company increased its workforce to 168 full-time employees and contractors as of March 31, 2022.
First Quarter Operational Highlights
- On January 12, 2022, the Company announced that Real Leaders® has named CubicFarms as one of the newly selected winners of its 2022 Top Impact Companies from around the world.
- On January 12, 2022, the Company announced the appointment of G. David Cole to the Company’s Board of Directors. Cole is recognized internationally as an accomplished senior financial executive with nearly 40 years of corporate experience in building teams and businesses in a broad range of global markets and economies.
- On February 7, 2022, the Company announced that Tom Wiltrout has been appointed to the Company’s HydroGreen Business Advisory Board. Wiltrout provides business consulting services for input agriculture and the global seeds industry in his role as President of Thirty Thirty, LLC. He’s a senior executive at world-leading agriculture investor group Ospraie Ag Science, LLC, a strategic shareholder with approximately 16.6% ownership of CubicFarms.
- On February 15, 2022, the Company announced a new HydroGreen Certified Dealer, Central Confinement Service LLC (“CCS”), with initial sales commitments for 12 HydroGreen indoor growing systems to be delivered in 2022 valued at $2.25 million. CCS is a leading designer and builder of turn-key livestock and agriculture facilities with more than 35 years of experience providing quality construction and custom-built equipment to livestock producers.
- On March 7, 2022, the Company announced a sales agreement for 27 CubicFarm System modules in Winnipeg, Manitoba, at a sale price of $5.13 million. Experienced greenhouse farmers Sheldon and Carrie Enns operate the Green Valley Garden Centre, supplying high-quality vegetables and ornamental plants in Southeastern Manitoba for the past 12 years.
- On March 10, 2022, the Company appointed Daniel Burns, a member of the Company’s Board of Directors, as interim Chief Financial Officer (“CFO”). He will step down as Chair of the Company’s Audit Committee to serve as interim CFO, effective April 1, 2022.
- On March 11, 2022, the Company announced that South by Southwest® (“SXSW”) has recognized the Company’s HydroGreen Automated Vertical Pastures™ as one of five finalists in the “New Economy” category of the 2022 SXSW Innovation Awards.
- On March 25, 2022, the Company announced the appointment of Edoardo De Martin as President of CubicFarms, in addition to his role as Chief Technology Officer of the Company. Since joining CubicFarms, De Martin has strengthened the Company’s roadmap, built a new software division, and assembled a world-class product and technology team to deliver the next generation of indoor growing technologies.
Subsequent to the End of the First Quarter
- On April 1, 2022, the Company announced Mountainland Supply Company (“Mountainland”) as a new member of the HydroGreen Certified Dealer Network. Established in 1947 with 29 distribution branches, Mountainland has an agriculture division specializing in irrigation services for farmer and rancher customers in Utah, Wyoming, and Idaho.
- On April 27, 2022, the Company announced the appointment of Carlos Yam as CFO of the Company, effective June 27, 2022. With over 20 years of experience as a senior financial executive for public and private companies, Yam is a Chartered Professional Accountant (CPA, CA) in Canada and Certified Public Accountant in the United States (Illinois) and holds a bachelor’s degree in Business Administration from Simon Fraser University.
- On May 12, 2022, the Company announced new data that demonstrates 54% to 62% less energy is used in CubicFarm System modules compared to results reported by other vertical farms surveyed by Agritecture in its 2021 global CEA census report. With electricity being the number one input cost in vertical farming, this is a significant advantage to customers using the CubicFarm System technology.