Sproutly Inc (SRUTF)

[dude61]

One more to share.

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Overall excellent deal
I'm sure many were starry-eyed with the prospects of a Behemoth global brand getting in bed with us, but I'm happy with the partner - Moosehead is a well respected, large brand with good products (IMO), mature distribution/logistics, and global presence.

There are way more pros than cons here - the largest by far being that the technology is now PROVEN by a sizable industry player that has committed to developing this new market segment with SPR. Being able to reference this deal is going to open so many doors for SPR in the CBD water/functional beverage space to other beverage brands looking to get into CBD. Same goes for other markets that SPR has rights to.

Having said that, the 5 year exclusivity is kind of a bummer. I get the logic - we are not even in the 1st inning of canna bevs, and they are using this period in Canada as a testing ground to launch in advance of the dominos falling in other jurisdictions. This arrangement gives them long term stability to grow their own brand instead of just being a reseller of technology.

Also on the finances, I hope we'll hear more details tomorrow on the call. In my mind I don't see how SPR isn't going for more dilution or debt to finance themselves for the next while. Either directly as a result of this deal or to fund their other opportunities in CBD or oils, they need money to stay afloat. I think they only had like $11m as of last November. Not bothered by it at all - it's just how it works in this industry, but worth noting.

Looking forward to the call tomorrow morning.


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