Sugarbud Upsizes Its Marketed Public Offering Of Secured Convertible Debenture Units

Sugarbud Craft Growers Corp. SBUDF has agreed to amend the terms of its previously announced $2.4 million marketed public offering of convertible debenture units.

What Happened?

The Calgary, Alberta-based company intends to:

• Lower the conversion price at which the convertible debentures of the company are convertible into common shares of the company from $1.39 to $1.29 per common share.
• Lower the exercise price at which the common share purchase warrants of the company will be exercisable from $1.39 to $1.29 per warrant.
• Revise the number of warrants per debenture unit from 719 warrants to 775 warrants.
• Provide the company an option, at their sole discretion, to pay the interest of the convertible debentures in common shares or cash.
• Increase the size of the offering to up to $3 million in gross proceeds to the company  - which is expected to include management and/or insider participation - and also grant the agent the option to increase the size of the offering by an additional 15%.

The Offering

Each debenture unit will consist of one 12% secured convertible debenture and 775 warrants, with each warrant entitling the holder to purchase one common share at $1.29, for a period of 5 years following the closing of the offering.

The debentures will bear interest at a rate of 12% per annum from the date of issue, payable on a quarterly basis.

The principal amount of each convertible debenture will be convertible into common shares at the option of the holder at a conversion price equal to $1.29.

Each holder, at their option, elect to exchange the aggregate principal amount of such holder's convertible debentures for an equivalent aggregate principal amount of 15% non-convertible secured notes expiring on the maturity date on a one for one basis at any time prior to the maturity date

The convertible debentures and secured notes shall be secured by a security interest in the company's Stavely facility.

The closing of the offering is expected to occur on or about the week of April 11, 2022

The company has also agreed to use commercially reasonable efforts to obtain the necessary approvals to list the convertible debentures and the Warrants on the TSX Venture Exchange.

The offering is being led by Research Capital Corporation as the sole agent and sole bookrunner.

The net proceeds from the offering are intended to be used for additional processing and production equipment purchases, facility upgrades and working capital and other corporate purposes.

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