TSX-Venture Exchange: SUGR, SUGR.WT
CALGARY, June 5, 2019 /CNW/ - SugarBud Craft Growers
Corp. ("SugarBud" or the "Company") announces that
its subsidiary, 1800905 Alberta Ltd., as borrower, has entered into
a secured non-dilutive credit facility with Pillar Capital Corp.
("Pillar") for up to CDN $5,000,000 (the "Credit Facility").
The proceeds of the Credit Facility will be used by SugarBud to
support working capital requirements and to continue to equip Phase
1 of its 29,800 square foot Stavely,
Alberta indoor cannabis cultivation facility ("Phase 1
Stavely Facility"). The Phase 1 Stavely Facility is
expected to be capable of approximately 13,926,000 to 16,384,000
grams of annual dried cannabis production per year once fully
equipped and operational.
Craig Kolochuk, SugarBud's
President and Chief Executive Officer stated: "This non-dilutive
credit facility allows us to continue the diligent execution of our
business plan prior to the receipt of our cultivation license from
Health Canada, which we view as a major milestone and catalyst. We
expect to obtain our cultivation license imminently, as we received
confirmation of readiness from Health Canada on April 18, 2019 and we submitted our affirmation
of readiness package prior thereto."
It is SugarBud's intention to replace this Credit Facility with
a larger credit facility from another senior financial institution
(the "Senior Facility") upon receipt of SugarBud's
cultivation license from Health Canada. SugarBud is currently in
negotiations with a leading credit union based in Alberta (the "Credit Union") regarding
the Senior Facility. It is expected that the Senior Facility will
either be held by the Credit Union alone, or in a syndicate led by
the Credit Union.
The Credit Facility is guaranteed by SugarBud and its wholly
owned subsidiary Trichome Holdings Corp. The first $2 million of the Credit Facility is available
for drawdown at SugarBud's discretion, with draws thereafter
subject to approval by Pillar. The Credit Facility bears interest
at 12.5% per annum, calculated monthly on the daily balance
outstanding. In connection with the Credit Facility, SugarBud will
issue 1,000,000 common share purchase warrants to Pillar. Each
warrant will entitle Pillar to purchase one common share of
SugarBud at a price of $0.16 for
a period of five years. The warrants will be subject to a four
month hold period.
The Credit Facility and the issuance of warrants to Pillar are
subject to final approval of the TSX Venture Exchange.
The Company also announces that it has cancelled, at its
discretion, the previously announced equity facility with Alumina
Partners LLC. SugarBud would like to thank Alumina Partners LLC for
their support through the Company's growth to date.
About SugarBud
SugarBud is an Alberta-based
emerging cannabis company engaged in the development, acquisition,
production and distribution of cannabis in Canada.
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 Credit Facility, the receipt of its
cultivation license from Health Canada and the issuance of common
share purchase warrants to Pillar. 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, including TSXV approval.
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 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; 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 months ended March 31, 2019 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
SOURCE SugarBud Craft Growers Corp.