CubicFarm announces pricing of $10M overnight marketed offering

The Offering is being led on a best efforts agency basis by Raymond James Ltd. and Canaccord Genuity Corp. as joint bookrunners on behalf of a syndicate of agents, including Stifel Nicolaus Canada Inc. and Roth Canada Inc. (collectively, the "Agents").

Each Debenture Unit will consist of one 8.0% unsecured convertible debenture (the "Convertible Debentures") with a maturity date of 5 years from the date of Closing (as defined herein) and 400 common share purchase warrants of the Company (the "Warrants").

Each Warrant entitles the holder thereof to acquire one Common Share at an exercise price equal to $0.71 (the "Exercise Price") at any time up to 36 months following the closing of the Offering (the "Closing Date"), subject to adjustment in certain customary events.

The Company will also grant the Agents an option (the "Over-Allotment Option") to sell up to an additional 15% of the Debenture Units and Common Shares sold under the Offering, at the price sold pursuant to the Offering. The Over-Allotment Option may be exercised at any time up to 30 days following the closing date of the Offering.

The Convertible Debentures will be convertible at the holder's option into fully-paid, non-assessable and freely tradable Shares at any time prior to the earlier of the last business day immediately preceding the Maturity Date and the last business day immediately preceding the date fixed for redemption by the Company at a conversion price of $0.68 per Common Share (the "Conversion Price"). The Conversion Price represents a conversion premium of approximately 20% to a reference price of $0.55 per Common Share.

Except as set out below, the Convertible Debentures will not be redeemable before December 31, 2025. On or after December 31, 2025 and prior to December 31, 2026, the Convertible Debentures may be redeemed in whole or in part at the option of the Company on not more than 60 days' and not less than 30 days' prior notice at a price equal to their principal amount plus accrued and unpaid interest, provided that the volume weighted average trading price of the Shares on the TSX for the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 150% of the Conversion Price.

The closing of the Offering is expected to occur on or about June, 2 2022 and is subject to the approval of the Toronto Stock Exchange (the "TSX") and other necessary regulatory approvals. The Company will use commercial reasonable efforts to obtain the necessary approvals to list the Convertible Debentures, the Warrants, the common shares issuable upon conversion of the Convertible Debentures, the common shares issuable upon exercise of the Warrants and the Common Shares on the TSX.

The net proceeds of the Offering will be used to support working capital, research and development and business development.

The Offering will be conducted (i) pursuant to a prospectus supplement (the "Prospectus Supplement") to the Company's amended and restated short form base shelf prospectus dated October 13, 2021 (the "Base Shelf Prospectus"), which Prospectus Supplement is expected to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, except the Province of Québec, and (ii) in jurisdictions outside of Canada as are agreed by the Company and the Agents. It is expected that the Company and the Agents will enter into a definitive agency agreement and file the Prospectus Supplement following the pricing of the Offering. Copies of the Prospectus Supplement and accompanying Base Shelf Prospectus will be available under the Company's profile on SEDAR at www.sedar.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements thereunder.

About CubicFarms

CubicFarms is a leading local chain agricultural technology company developing and deploying technology to feed a changing world. Its proprietary ag-tech solutions 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 onsite, indoors, all year round. CubicFarms provides an efficient, localized food supply solution that benefits our people, planet, and economy.

For more information, please visit www.cubicfarms.com

Source: HortiBiz