Sugarbud Craft Growers Corp (SUGR)

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SugarBud Announces Results of Fully Subscribed Rights Offeri
SugarBud Announces Results of Fully Subscribed Rights Offering for Proceeds of $7.4 Million

TSX-Venture Exchange: RRL

CALGARY, Alberta, Sept. 20, 2018 (GLOBE NEWSWIRE) -- SugarBud Craft Growers Corp. (“SugarBud” or the “Company”) (trading as Relentless Resources Ltd.) is pleased to announce the results of its rights offering (the “Rights Offering”) to holders (“Shareholders”) of common shares (“Common Shares”) of SugarBud. Under the Rights Offering, Shareholders subscribed for and purchased an aggregate of 110,261,353 units (each, a “Unit”) for total approximate proceeds of $7.4 million, of which an aggregate of approximately $1.5 million worth of Units was purchased by insiders, management, and key shareholders of the Company. Units were subscribed for at a price of $0.0675 per Unit. Each Unit will consist of one Common Share and one half of one Common Share purchase warrant (a “Warrant”), with each whole Warrant entitling the holder thereof to purchase one Common Share at a price of $0.10 until September 12, 2023.

Mr. Jeff Swainson, Chief Financial Officer of SugarBud stated: “This highly successful Rights Offering for proceeds of $7.4 million demonstrates the continued support provided by SugarBud’s shareholders, and the belief that they have in our hybrid business model. We previously announced a $17.65 million non-dilutive credit facility with Farm Credit Canada and we have now achieved a significant equity investment led by our devoted insider group and new institutional shareholders. Under a full development we will have the luxury of an appropriate capital structure and a very low cost of capital, and at this stage we do not require any further dilution. In addition to our successful financings, which demonstrate strong access to capital, we are moving diligently to finalize Change of Business, to close the Grunewahl acquisition, and to close the second tranche of the Inner Spirit investment. Perhaps most importantly, we continue to execute on the construction of Phase 1 of our 29,800 square foot Stavely, Alberta aeroponic cannabis cultivation facility, which is currently progressing on-time and on-budget.”

The Company also announces that it continues to work diligently with the TSX Venture Exchange (“TSXV”) to obtain approval in respect of a series of transactions (the “Transactions”) that will collectively constitute a “Change of Business” of the Company from an exclusively oil and gas company to an emerging cannabis and oil and gas company. The Transactions include, without limitation: (i) the completion of the Rights Offering; (ii) the acquisition (the “Acquisition”) of Grunewahl Organics Inc. (“Grunewahl”); (iii) the second tranche of a strategic investment with Inner Spirit Holdings Ltd. (“Inner Spirit”); (iv) the entering into of a strategic alliance agreement with Inner Spirit that will govern the on-going business relationship of the parties; and (v) the appointment of Darren Bondar, Chief Executive Officer of Inner Spirit, as a director of SugarBud.

Grunewahl is a late stage applicant under Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Grunewahl Acquisition will not close until the Company receives approval of “Change of Business” from the TSXV and current shareholders of Grunewahl will not receive their SugarBud Common Shares until the Acquisition closes.

Closing of the Transactions (including the Rights Offering) is subject to a number of conditions including, but not limited to: TSXV approval of the Change of Business; approval of the Transactions by greater than 50.1% of Shareholders by written consent (which has been achieved); and closing conditions customary to transactions of the nature of the Transactions. The Acquisition was approved by Grunewahl’s shareholders at a special meeting held on September 11, 2018.

The Rights Offering will result in the issuance of 110,261,353 Common Shares and 55,130,677 Warrants underlying the Units, following which the Company will have 330,784,059 Common Shares and 146,001,083 Warrants outstanding. No Units will be issued in connection with the Rights Offering.

The Company is unable to determine when Shareholders will receive their Common Shares and Warrants issued as a result of their participation in the Rights Offering.

Upon completion of the Transactions, the Company intends to use the proceeds of the Rights Offering to fund an aeroponic cannabis cultivation facility at Stavely, Alberta, which is currently under construction.

Upon completion of the Transactions, the Company intends to be listed on the TSXV as a Tier 2 Life Sciences Issuer. Trading in the common shares of the Company is expected to commence on the TSXV under the name “SugarBud Craft Growers Corp.” and the symbol “SUGR” following the issuance by the TSXV of its final bulletin in respect of the Transactions.

The Company also announces that, pursuant to the terms and conditions of its stock option plan, it has granted an aggregate of 10,150,000 stock options to purchase Common Shares to directors and officers of the Company. The options expire five years from the date of grant and are exercisable at a price of $0.11 per Common Share. The options vest as to one third on the grant date and one third on each of the first and second anniversaries of the grant date.

The Company also announces the resignation of Stanley Swiatek from the board of directors of the Company. The Company thanks Mr. Swiatek for his contributions.

About SugarBud Craft Growers Corp.

SugarBud is a Calgary based emerging cannabis and oil and natural gas company engaged in the development, acquisition and production of cannabis and natural gas and crude oil reserves in Alberta.

For further information regarding this news release, please contact:

Craig Kolochuk
President & Chief Executive Officer
SugarBud Craft Growers Corp.
Phone: [phone]
E-mail: [e-mail] Jeff Swainson
Chief Financial Officer
SugarBud Craft Growers Corp.
Phone: [phone]
E-mail: [e-mail]
Investor Relations Contact
Gary Perkins, President
Tekkfund Capital Corp.
Tel: [phone]
E-mail: [e-mail]

Website: http://www.sugarbud.ca/

Address: Suite 620, 634 6th Avenue S.W., Calgary, Alberta T2P 0S4

Telephone: [phone]
Fax: [phone]


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