VANCOUVER, BC, Sept. 14,
2022 /CNW/ - CubicFarm® Systems Corp.
("CubicFarms" or the "Company") (TSX: CUB), a leading local
chain agricultural technology company, today announced that it has
entered into a binding term sheet (the "Term Sheet") for a senior
secured revolving term loan (the "Term Loan") to support its
business operations.
The Term Sheet commits to a total of CAD6.25 million, with an option to increase the
commitment to CAD8.0 million. The
Term Loan will have a term of two years, subject to prepayment
obligations upon the Company achieving certain milestones or
disposing of assets outside of the ordinary course of business and
will bear and pay interest at a rate of 10.0% per annum.
The Term Loan is provided by a group of lenders (the "Lender")
that includes one non-independent director of the Company whose
loan amount is less than 20% of the total facility size.
The Term Loan will be supported by security in favour of the
Lender, evidenced by a general security agreement over all of the
assets of the Company and its subsidiaries. The Term Loan will be
subject to an upfront fee equal to 1.0% of the commitment
amount.
The closing of the Term Loan will be subject to execution of a
term loan agreement and satisfaction of certain conditions
precedent by the Company, including the subordination of an
existing loan from a senior lender.
For each Term Loan draw, the Lender will receive share purchase
warrants (the "Warrants") in HydroGreen, Inc. ("HGI"), a
wholly-owned subsidiary of the Company, at a number and price
determined by the amount of a Term Loan draw divided by a price per
HGI share calculated using a formula at the time of such Term Loan
draw. Such exercise price for the Warrants shall initially be at a
pre-money valuation of HGI that is the lesser of USD20.0 million and the market capitalization of
the Company at the time of the draw. The Warrants will have a term
of five (5) years.
"We believe that this Term Loan will provide the additional
liquidity necessary to successfully pivot our strategy to a
focused, scalable business model," said Edoardo De Martin, interim Chief Executive
Officer. "The Term Loan complements our ongoing cost control
measures and will allow us to execute key strategies that will
accelerate our path to profitability, including HydroGreen sales
and our carbon credit commercialization program. It's rare to have
a globally scalable technology that can improve animal health and
performance, deliver meaningful environmental benefits, and
position us to enter the rapidly growing carbon credit market to
support companies and institutions with net-zero goals."
The Term Loan remains subject to the approval of the Toronto
Stock Exchange ("TSX").
About CubicFarms and
HydroGreen
CubicFarms is a leading agricultural technology company
developing and deploying proprietary ag-tech technologies to 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 on-site,
indoors, year-round.
HydroGreen's Automated Vertical Pastures™ technology produces
high-energy fresh forage at commercial scale 365 days a year using
a unique process to sprout grains, such as barley and wheat, in a
controlled environment with minimal use of land, labour, and water.
Automated Vertical Pastures™ not only provides a superior
nutritious feed to benefit the animal, improving feed efficiency,
cow health, nutrition, and performance outcomes, but also enables
significant environmental benefits to the farm while helping to
meet increasing demand for valuable farm-based inset and offset
carbon credits.
For more information, please
visit www.cubicfarms.com and
www.hydrogreenglobal.com.
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 the closing of the
Term Loan and TSX approval of the Term Loan.
Such statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance, or achievements to be materially different
from any future results, performance, or achievements expressed or
implied by such forward-looking statements. 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.
SOURCE CubicFarm Systems Corp.