Sugarbud Announces Private Placement, Non-Dilutive Capital Equipment Financing and Rights Offering
NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.“Despite very challenging market conditions, we continue to make good progress with our overall capital financing efforts to fuel our expansion and strengthen our balance sheet, stated Sugarbud CEO, John Kondrosky. We remain mindful of overall shareholder value and continue to approach our capital funding requirements in a measured and balanced manner. Combined with a strong insider lead Private Placement, significant non-dilutive Capital Equipment Financing and the planned Rights Offering, Sugarbud is well positioned to drive meaningful progress and sustainable growth heading into 2020,” added Mr. Kondrosky.The Company is pursuing similar financing terms for the acquisition of additional HVAC, lighting and racking equipment associated with the final scale-up of the two licensed cultivation rooms Phase 1a and the first new cultivation room within Phase 1b. Such lease financing would allow the Company to fund approximately 75% ($2.2 million) of the $3.0 million estimated costs associated with the buildout. Upon completion of this near-term capital expansion plan, Sugarbud estimates that it will have a dried cannabis production design capacity of approximately 4,150,550 – 5,836,800 grams annually. Sugarbud expects the final scale up of Phase 1a to be complete prior to starting their second harvest cycle in early Q1 2020 and the additional cultivation room in Phase 1b to be complete and fully licensed by Q3 of 2020.Please click here to access and view an updated version of the Company’s corporate presentation.Pursuant to the Rights Offering, each holder (“Eligible Holder“) of Common Shares as of the Record Date that is a resident in any province of territory of Canada (other than Québec) (the “Eligible Jurisdictions“) will receive one transferable right (each, a “Right“) for every Common Share held. Every four Rights will entitle the holder to purchase one Unit at a price of $0.0550 until 4:00 p.m. (Calgary time) on the expiry date of December 20, 2019 (the “Expiry Date“), after which all outstanding Rights will terminate. Each Unit will be comprised of one Common Share and one Warrant. The Warrants issued pursuant to the Rights Offering will be on the same terms as those issued pursuant to the Private Placement, including early expiry upon the VWAP equaling or exceeding $0.125. Subscribers of Units under the Private Placement will have a right to participate in the Rights Offering with respect to any Common Shares acquired pursuant to the Private Placement.John Kondrosky
Chief Executive Officer
Sugarbud Craft Growers Corp.
Phone: (604) 499-7847
E-mail: firstname.lastname@example.orgInvestor Relations Contact Gary Perkins, President
Tekkfund Capital Corp.
Tel: (416) 882-0020Forward Looking and Cautionary StatementsThis news release contains forward-looking statements. More particularly, and without limitation, this news release contains statements concerning: the Private Placement, the Capital Equipment Financing and the Rights Offering, including the terms, timing and completion thereof, the use of proceeds therefrom and the number of securities issued pursuant thereto; other proposed capital lease arrangements; cannabis cultivation in the Stavely Facility, including estimates regarding cannabis crop capacity; and construction of additional cultivation rooms. 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 Sugarbud. Forward-looking statements are subject to a wide range of risks and uncertainties and although Sugarbud 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, the receipt of required regulatory and TSXV approvals, and the timing thereof, and other factors more fully described from time to time in the reports and filings made by Sugarbud with securities regulatory authorities. Please refer to Sugarbud’s most recent annual information form and management’s discussion and analysis for additional risk factors relating to Sugarbud, which can be accessed under Sugarbud’s profile on www.sedar.com. Except as required by applicable laws, Sugarbud 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.