10:24:15 EDT Sat 19 Sep 2020
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Cubicfarm increases Artex Feed interest to 50%

2020-01-30 07:43 ET - News Release

Ms. Kimberly Lim reports


Cubicfarm Systems Corp. has increased its shareholding in Artex Feed Solutions from 25 per cent to 50 per cent. Artex Feed Solutions is a joint venture company which is now 50 per cent owned by Cubicfarm and 50 per cent owned by Artex Barn Solutions, a leader in agricultural supplies for over 40 years.

Artex Barn Solutions was founded by John de Jonge -- also a board member of Cubicfarm -- who purchased Artex Barn and grew it into a global provider of cattle handling equipment, ventilation and cow cooling. He has deep expertise in establishing and scaling up multiple manufacturing facilities in China and North America.

Cubicfarm has signed an authorized reseller agreement with Artex Feed Solutions -- as announced in the company's press release dated Dec. 11, 2019 -- to market and sell its HydroGreen fully automated hydroponic growing systems that produce live, green animal feed. This joint venture will allow the company to capture a portion of the sales revenue that would ordinarily be paid out to third party resellers.

The HydroGreen system sprouts grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. The system performs all growing functions including seeding, watering, lighting, harvesting and reseeding -- all with the push of a button -- to deliver animal feed without the typical investment in fertilizer, chemicals, fuel, field equipment and transportation.

Artex Feed Solutions well positioned to market and sell HydroGreen systems

Artex and Mr. de Jonge plan to leverage their dealership network in over 40 countries to sell the HydroGreen system, focusing first on markets in the United States and Canada, then on qualified leads in China, Indonesia and the Middle East -- areas with substantial market potential due to changing food consumption patterns and supportive government policies toward agricultural technology.

Internationally, Artex dealers will target existing agriculture animal producers looking to enhance profitability and environmental sustainability, early-stage farmers with minimal capital and land constraints, small- to medium-size farms seeking feed alternatives to benefit their operations, and urban farmers without access to land.

The HydroGreen system will become a key offering in Artex's suite of products and solutions that are geared toward a well-designed barn to improve herd productivity and health, such as its line of Comfort Zone products designed to increase milk production, the DeLaval Voluntary Milking System milking robot, and Trident Processes waste water treatment and manure management.

The arrangement with Artex Feed Solutions may be considered a related party transaction subject to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The company will be exempt from the need to obtain minority shareholder approval and a formal valuation as would be otherwise required by MI 61-101 as the company is listed on the TSX Venture Exchange and the fair market value of the transaction is far below 25 per cent of the company's market capitalization.

Cubicfarm to benefit from Artex's end-to-end dealer support

In addition to the marketing and sales of HydroGreen systems, Artex Feed will further manage customer experience by providing installation services to purchasers of the systems, as well as training and troubleshooting. Artex is partnered with Fiske Electric, an established electrical contractor specializing in large commercial and agricultural projects for over 35 years, to help ensure smooth system installations.

Mr. de Jonge commented: "The founders of Artex Feed are convinced that the technologies of vertical farming and controlled environment agriculture will significantly advance the productivity of livestock farming. All indicators show that the implementation of this technology is rapidly gaining traction, mirroring the advent of robotic milking around 30 years ago.

"Artex Feed's identified team is motivated to capture this market opportunity."

Dave Dinesen, chief executive officer of Cubicfarm, commented: "Now that Cubicfarm holds an interest of 50 per cent in our reseller Artex Feed, we are better able to capture the value of sales of the HydroGreen systems. Cubicfarm is proud to partner with John and Artex to advance their vision of farm of the future by providing a full range of leading-edge, integrated feed production facilities, to help small-hold farms, family farms and commercial farms meet the long-term global demand for meat and dairy that is projected to rise, thanks to population growth and increasing incomes in emerging economies."

About Cubicfarm Systems Corp.

Cubicfarm Systems is an agricultural technology company providing automated growing systems for fresh produce and animal feed. Cubicfarm offers turnkey, commercial scale, hydroponic, automated controlled-environment growing systems that can grow predictably and sustainably for 12 months of the year virtually anywhere on Earth. Cubicfarm enables its customers 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.

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