06:18:00 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Sugarbud Craft Growers Corp (2)
Symbol SUGR
Shares Issued 6,736,088
Close 2022-09-27 C$ 0.125
Market Cap C$ 842,011
Recent Sedar Documents

Sugarbud seeks creditor protection during restructuring

2022-09-27 18:40 ET - News Release

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 115926570 v2 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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