04:14:42 EDT Thu 24 Sep 2020
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Cubicfarm Systems Corp
Symbol CUB
Shares Issued 84,179,714
Close 2020-03-09 C$ 0.255
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Cubicfarm receives 24-unit HydroGreen purchase order

2020-03-09 10:18 ET - News Release

Mr. Dave Dinesen reports


Cubicfarm Systems Corp. has received a signed sales order and a deposit for the sale of 24 HydroGreen nutritious livestock feed growing machines to an organic-certified dairy farm in Western Canada. The company expects to enter into its standard equipment purchase and sale agreement with the customer in the coming days.

Cubicfarm's chief executive officer, Dave Dinesen, commented: "We are very excited about this sale. The 24-machine HydroGreen system will yield approximately 25.5 million pounds (11.6 million kilograms) of nutritious, live, sprouted grain feed per year. Additionally, the system will provide the equivalent of 360 acres of grazing land and enable nutritious live grass feeding 12 months a year, regardless of outside conditions, such as snow or drought.

"Cubicfarm's expansion into the automated nutritious livestock feed space allows us to leverage our experience in the automated vertical farming space. We are proud to achieve this significant milestone of our first large sale in the nutritious livestock feed space, just a week after announcing our largest sale to date of a 100-machine fresh produce system. Our customer, the owner of the organic dairy farm, is a keen promoter of animal well-being and prioritizes animal health. The HydroGreen system provides a safe, consistent, reliable and nutritious feed source for the customer's herd."

The 24-machine system and its accompanying seed/feed handling, plumbing, HVAC (heating, ventilation and air conditioning) and electrical systems will represent a total of $4.8-million in revenues to the company, and installation is planned for June, 2020.

The company has a current backlog at $29.5-million, representing 168 machines under deposit and awaiting installation. The current backlog is anticipated to be recognized in revenue in mid-2020 to mid-2022.

The sale -- representing Cubicfarm's first sale in the nutritious livestock feed space -- follows the January, 2020, closing of its strategic acquisition of HydroGreen Inc., the manufacturer of the HydroGreen system. The HydroGreen system utilizes a unique process to sprout 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 nutritious livestock feed without the typical investment in fertilizer, chemicals, fuel, field equipment and transportation.

The machines sold are in the six-section configuration. Each six-section machine is 50 feet long, eight feet wide and 10 feet high, and can produce approximately 2,900 pounds (1,315 kilograms) of feed per day. Therefore, the 24-machine system is expected to yield approximately 70,000 pounds (31,570 kilograms) of feed per day for the customer's dairy operation.

Reseller Artex Feed Solutions marketed and sold the system to the customer. Artex Feed Solutions is a joint venture company, which is 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 Feed leverages Artex Barn's international dealership network in over 40 countries to sell the HydroGreen system, focusing on North American markets, then on qualified leads in China, Indonesia and the Middle East -- strategic areas with substantial market potential due to changing food consumption patterns. Additionally, Artex Feed will provide installation services to purchasers of the systems, as well as training and troubleshooting.

About Cubicfarm Systems Corp.

Cubicfarm Systems is a technology company that is developing and deploying technology to feed a changing world. Its proprietary technologies enable farmers around the world to grow high-quality, predictable crop yields. Cubicfarm has two distinct technologies that address two distinct markets.

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