Mr. Dan Wilson reports
SUGARBUD CRAFT GROWERS CORP. FILES NOTICES OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT (CANADA), AS
AMENDED, PROVIDES UPDATE ON FILING OF SECOND QUARTER RESULTS AND
ANNOUNCES DIRECTOR AND OFFICER RESIGNATIONS
With the authorization and approval of Sugarbud Craft Growers Corp.'s board of directors, it has
determined to file notices of intention to make a proposal (the NOI) under the Bankruptcy and
Insolvency Act (Canada), as amended (the BIA) today for itself and its subsidiaries, which will
provide for creditor protection through a stay of proceedings while the company seeks to
restructure its affairs.
The decision to seek creditor protection was taken after careful consideration of available
alternatives, the company's cash position, forecasted revenue and expenses, scheduled debt
payments and demands for payment, and notices of intention to enforce security received from
the company's lender on Sept. 22, 2022. The company expects that it is likely to default on
several material debtor agreements due to continuing liquidity constraints. Following consultation
with its legal and financial advisers, the board of directors determined that it was in the best
interests of the company and its stakeholders to file the NOI and obtain creditor protection. The board of directors also authorized management to seek the conversion of the BIA proceedings
into proceedings under the Companies' Creditors Arrangement Act (Canada), as amended (the
CCAA) should management determine that CCAA proceedings would be more appropriate.
The effect of the NOI is an immediate stay of proceedings for 30 days, which may be extended
by subsequent court order. filing the NOI will allow the company to pursue available options to
maximize the company's value for stakeholders, while continuing operations and remaining in
control of its business. While the company is exploring strategic and financial alternatives to
maximize stakeholder value in the proposed proceedings, the failure of the company to achieve
its restructuring goals through an approved proposal would result in the company being deemed
to have made an assignment into bankruptcy.
Alvarez & Marsal Canada Inc. has been appointed as proposal trustee pursuant to the BIA (the
proposal trustee) to monitor the company's operations and restructuring. Information and
materials filed in connection with the NOI proceedings can be found on the proposal trustee's
website.
The company also announces the resignations of Stephen Martin as a director of the company
and Chris Moulson as vice-president of finance and chief financial officer of the company, effective
Sept. 23, 2022. The company wishes to thank Mr. Martin and Mr. Moulson for their
contributions. The company's president and chief executive officer, Daniel T. Wilson, has been
appointed interim chief financial officer, effective Sept. 23, 2022.
On Aug. 30, 2022, the Alberta Securities Commission issued a management cease trade
order (MCTO) in connection with the delayed filing of Sugarbud's Q2 2022 interim financial
statements, the related management's discussion and analysis, and related CEO (chief executive officer) and CFO (chief financial officer)
certificates, which were due to be filed by Aug. 29, 2022. By way of
update, the company reports that it remains on track to complete the filings by Sept. 30,
2022. This is within the previously estimated four-week extension period, and the company will
use its best efforts to complete the process within this timeframe.
The company is providing this status update in accordance with the provisions of the Alternative
Information Guidelines set out in National Policy 12-203 -- Management Cease Trade Orders. The
company confirms that, as of the date of this news release, the only material changes to the
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information contained in the announcement issued on Sept. 9, 2022, have been disclosed
in this news release. The company confirms that there is no other material information concerning
the affairs of the company that has not been generally disclosed.
About Sugarbud Craft Growers Corp.
Sugarbud is a consumer-driven craft cannabis company focused on the cultivation and production
of superior, select-batch, craft cannabis products. Its vision and mission are to become a trusted
and well-respected consumer brand renowned for providing exceptional high-quality craft
cannabis products to legal markets by delighting the most discerning of cannabis consumers.
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