CubicFarms Gets Full Revocation of Cease Trade Order & Financial Status Updates

Key Takeaways

• The British Columbia Securities Commission (BCSC) has issued a full revocation of the cease trade order against CubicFarms, originally issued in July 2024.
• CubicFarms has filed all outstanding financial disclosure documents and applied for trading reinstatement on the TSX Venture Exchange.
• The company is negotiating loan extensions and new sales deals to address a $28 million working capital deficit.
• Favorable foreign currency trends are expected to positively impact financial results.

Why was the cease trade order revoked?

CubicFarm® Systems Corp. (Profile) announced that the British Columbia Securities Commission (BCSC) issued a full revocation of the failure-to-file cease trade order (FFCTO) on January 16, 2025. The FFCTO had been in effect since July 15, 2024.

To meet compliance requirements, CubicFarms filed:

• Audited financial statements and related documents for the year ended December 31, 2023.
• Unaudited interim financial statements and related documents for Q1 and Q2 of 2024 and 2023.

These documents are available on the company’s SEDAR+ profile at www.sedarplus.ca. CubicFarms has applied to the TSX Venture Exchange for reinstatement of trading but has not received confirmation of the outcome.

What is the current status of CubicFarms’ financial obligations?

CubicFarms disclosed it is in default on several loans, including:

• A business loan obtained in August 2022.
• Convertible debentures issued in June 2022.
• A senior secured term loan dated September 2022.

The company is negotiating extensions and amendments to these loans, which, if successful, would reduce its working capital deficit by approximately 50%.

What steps is CubicFarms taking to improve its financial position?

The company outlined several measures to address its $28 million working capital deficit:

1. Sales Deals: CubicFarms is negotiating contracts to sell inventory, including previously impaired stock, to minimize costs.
2. Revenue Growth: Completion of Feed centers and an expanding sales network are expected to generate consistent revenue.
3. Currency Gains: Appreciation of USD against CAD is boosting the value of deposits and is expected to positively impact financial results.

What risks does CubicFarms face if loan negotiations fail?

The company acknowledged potential challenges if loan extensions cannot be secured, including:

• Liquidity constraints.
• Operational limitations affecting business opportunities and workforce management.
• Legal risks and reputational impacts.
• Pressure on stock price and investor confidence.