TORONTO, June 19, 2019 (GLOBE NEWSWIRE) -- North Bud Farms Inc. (CSE: NBUD) (OTCQB: NOBDF) ("NORTHBUD" or the "Company") is pleased to announce the closing of a first tranche of its non-brokered private placement, previously announced on May 15, 2019, for gross proceeds of $1,208,000, by issuing 4,026,664 units at a price of $0.30 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at a price of $0.40 per share for a period of twenty-four months.
North Bud Capital Holdings Ltd. (“North Bud Capital”), a significant and founding shareholder of the Company, has demonstrated its commitment to the continued success of the Company by committing $1 million as the lead investor in the offering. The Company plans to use the net proceeds of the offering to hire additional staff for its Canadian operations, pursue M&A opportunities in the United States, including new state license applications, and for general working capital purposes.
“These funds are essential to fund ongoing and existing acquisition efforts in the United States,” said Ryan Brown, CEO of North Bud Farms.
The Company expects to close on the balance of the previously announced private placement of up to $4 million in one or more additional tranches of the offering in the near future, subject to the receipt of all necessary regulatory approvals. All securities issued pursuant to the offering are subject to a four-month hold period in accordance with applicable Canadian securities laws.
As previously mentioned, North Bud Capital participated in the offering by subscribing for 3,333,333 Units, representing an investment of $1 million. North Bud Capital’s participation is considered a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the formal valuation requirements and majority of the minority shareholder approval requirements of MI 61-101 contained in Section 5.5(a) and Section 5.7(1)(a) in respect of the foregoing related party transaction on the basis that the fair market value of the transaction does not exceed more than 25% of the Company’s market capitalization.
Shares for Services
The Company has also issued 129,142 common shares at a price per share of $0.35 to AGORACOM as per the September 21, 2018 press release for marketing services rendered to the Company through to June 15, 2019.
