SugarBud Announces Disposition of Oil and Gas Assets and Emergence as a Pure-Play Canadian Cannabis Company
TSX-Venture Exchange: SUGR, SUGR.WT
CALGARY, Alberta, Jan. 29, 2019 (GLOBE NEWSWIRE) — SugarBud Craft Growers Corp. (“SugarBud” or the “Company”) is pleased to announce that it has entered into a definitive agreement (the “Agreement”) with an arm’s length purchaser (the “Purchaser”) pursuant to which the Purchaser has agreed to purchase substantially all of the Company’s oil and gas assets for gross proceeds of $1.6 million in cash (the “Purchase Price”). The Company also announces that it has completed the disposition of its remaining oil and gas assets to other arm’s length purchasers and has received the gross proceeds of $150,000 in cash (for total proceeds of $1.75 million).
Craig Kolochuk, President and Chief Executive Officer of SugarBud stated:
“The sale of our wholly owned subsidiary removes any doubt as to SugarBud’s future, which is that of a pure-play cannabis company focused on growing and distributing hand-crafted, select-batch, ultra-premium bud. Furthermore, the disposition aligns with the Company’s current plan of focusing on its vertical cultivation facility. As well, the series of divestitures eliminates $4.1 million of asset retirement obligations associated with the assets. Our balance sheet will be significantly strengthened by this disposition, as we will have no abandonment liabilities remaining.”
Mr. Kolochuk added: “We believe that we are a compelling story for cannabis-focused investors that would like to participate in the growth of an up-and-coming player in the cannabis space, and we would like to thank our existing shareholders for their continued support.”
The Purchaser made an initial non-refundable deposit of $105,000 concurrent with the execution of the Agreement. The balance of the Purchase Price will be paid as to $1.0 million on March 1, 2019 and as to the remaining $0.5 million on or about April 1, 2018. The assets will transfer to the Purchaser upon full payment of the Purchase Price. The Disposition is subject to customary closing conditions.
Peters & Co. Limited, an independent investment dealer that specializes in Canadian energy corporate finance, advisory services and research, led the sales process in respect of the Disposition.
SugarBud is a Calgary-based emerging cannabis company engaged in the development, acquisition, production and distribution of cannabis in Canada.
For further information regarding this news release, please contact:
President & Chief Executive Officer
SugarBud Craft Growers Corp.
Phone: (403) 875-5665
Chief Financial Officer
SugarBud Craft Growers Corp.
Phone: (403) 796-3640
|Investor Relations Contact
Gary Perkins, President
Tekkfund Capital Corp.
Tel: (416) 882-0020
|Address: Suite 620, 634 – 6th Avenue S.W., Calgary, Alberta T2P 0S4
Forward Looking and Cautionary Statements
This news release may include forward-looking statements including opinions, assumptions, estimates, the Company’s assessment of future plans and operations, and, more particularly, statements concerning the completion of the Disposition, the payment of the Purchase Price and timing thereof and the ability to cultivate hand-crafted, select-batch, ultra-premium bud. When used in this document, the words “will,” “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company that include, but are not limited to, the timely receipt of all required regulatory and third-party approvals and the satisfaction of closing conditions in accordance with the terms of the Agreement. There is no assurance that all of the conditions to the Disposition will be met and therefore there is a risk that the Disposition will not be completed in the form described above or at all. In the event the Disposition does not close as presently anticipated, the Company will not realize the anticipated benefits of the Disposition. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to: regulatory and third party approvals, including receipt of cultivation and sales licenses from Health Canada, not being obtained in the manner or timing anticipated; the ability to implement corporate strategies; the state of domestic capital markets; the ability to obtain financing; changes in general market conditions; industry conditions and events; the size of the medical marijuana market and the recreational marijuana market; government regulations, including future legislative and regulatory developments involving medical and recreational marijuana; construction delays; competition from other industry participants; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the Company’s annual information form (“AIF”) for the year ended December 31, 2017 and management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2018 for additional risk factors relating to the Company. The AIF and MD&A can be accessed under the Company’s profile on www.sedar.com.
Except as required by applicable laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.
Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.