Sugarbud to Conduct Rights Offering, Private Placement

SugarBud Craft Growers Corp (TSXV: SUGR) is the latest public licensed producer to scramble for cash as the equity markets dry up. This morning the firm concurrently announced a private placement and a rights offering in an effort to collect enough cash to finish its phase 1a construction plans.

The private placement is expected to consist of a total $925,000, with units being purchased at a price of $0.05 each. The firm expects to sell 18.5 million units, which each consist of a common share and a common share purchase warrant. The warrants entitle the purchaser to acquire one common share of SugarBud at a price of $0.10 for a term of two years. The warrants are subject to an accelerated expiry should the 5-day volume weighted average price of SugarBud exceed $0.125.

With respect to the rights offering, the financing is expected to generate up to $5.2 million for the firm. Current shareholders of SugarBud will receive one transferable right for each common share held of SugarBud. Four rights can be converted to a unit at a price of $0.055, with each unit consisting of one common share and one common share purchase warrant, with the same terms as the warrants issued under the private placement. Rights, upon issuance, will expire December 20, 2019.

There is no standby commitment associated with the rights offering.

Finally, SugarBud will also be entering a capital equipment financing, enabling the firm to acquire $0.4 million worth of HVAC equipment. The equipment is required in order for the firm to progress towards completion of its phase 1a construction plans for its Stavely, Alberta facility. The firm is seeking more equipment financing arrangements that will allow it to acquire the HVAC equipment necessary for both phase 1a and 1b.

All funds raised through the financing announcements made this morning will be utilized for the construction of the firms facility, and general working capital purposes. Upon completion of phase 1a and 1b, the firm anticipates an annual capacity of 4,150 to 5,836 kilograms of dried cannabis.

SugarBud shares will go ex-rights on November 22, 2019. The rights are expected to trade on the TSX Venture under the symbol “SUGR.RT”.

SugarBud closed yesterdays session at $0.06 on the TSX Venture.


Information for this briefing was found via Sedar and SugarBud Craft Growers. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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