CALGARY, AB, December 30, 2020 / PRNewswire / – Sundial Growers Inc. (Nasdaq: SNDL) (“Sundial” or the “Company”) announced today that it has closed the acquisition of a special purpose vehicle (the “Investment”). Consideration for Investment, totaling $ 58.9 million in cash, was financed with Sundial’s available cash reserves, which totaled $ 110 million immediately before the close of the Investment. All rates are expressed in Canadian dollars, unless otherwise stated.
The special purpose vehicle has $ 58.9 million of the principal aggregate amount of senior secured debt (the “Senior Loan”) of Zenabis Investments Ltd. (“Zenabis”), a subsidiary of Zenabis Global Inc. (the “Parent Company”). The senior loan bears interest at a rate of 14% per year and has a maturity date of March 31, 2025, with principal repayments under certain circumstances over time, including $ 7.0 million payable on December 31th, 2020. The Senior Loan is guaranteed by the assets of Zenabis and its subsidiaries and is guaranteed by the Parent Company. Together, the assets represent all Zenabis cannabis-related assets.
Under the terms of the Senior Loan, Zenabis will also pay Sundial a royalty (the “Royalty”) based on the quarterly sales revenue of its medical, recreational and wholesale cannabis, net value-added lines or sales taxes (“Net Cannabis Revenue”), which will be paid each fiscal quarter as follows:
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(I) |
3.5% of net cannabis revenue where net cannabis revenue does not exceed $ 25 |
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(ii) |
3.0% of net cannabis revenue where net cannabis revenue exceeds $ 25 million, but |
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(iii) |
2.5% of net cannabis revenue where net cannabis revenue exceeds $ 30 million, but |
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(iv) |
2.0% of net cannabis revenue where net cannabis revenue exceeds $ 37.5 million. |
Royalty is paid for 32 fiscal quarters and is paid for quarters in which Zenabis achieves certain Net Cannabis Rvenue goals and maintains certain debt service ratios. If these goals are not met, the Royalty is not due for the applicable fiscal quarter, but the Royalty term is extended for another fiscal quarter.
Sundial has a current unrestricted cash balance of approximately $ 51 million after the Investment and approximately 919 million outstanding common shares.
ABOUT SUNDIAL GROWERS INC.
Sundial is a public company with common shares traded on Nasdaq under the symbol “SNDL”.
Sundial is a licensed producer that manufactures cannabis in state-of-the-art indoor facilities. Our ‘artisanal scale’ modular cultivation approach, award-winning genetics and experienced growers set us apart.
Our Canadian operations grow cannabis in small batches using an individualized “room” approach, with 448,000 square feet of total space.
The Sundial brand portfolio includes Top Sheet, Sundial Cannabis, Palmetto and Grasslands. Our experience in packaged consumer goods allows us to not only grow quality cannabis, but also to create exceptional consumer and consumer experiences.
We are proudly in Albertan, based in Calgary, AB, with operations in Olds, AB and Rocky View County, AB.
Forward-looking information warning statement
This press release includes statements containing certain “forward-looking information” within the meaning of the applicable securities law (“forward-looking statements”), including, but not limited to, statements about the Company’s cash balance, debt position, shares outstanding, anticipated revenue streams and statements referring to Zenabis’ expected payments of principal, interest and royalties and statements regarding the company’s future strategic initiatives. Forward-looking statements are often characterized by words such as “plan”, “continue”, “wait”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “probable”, “perspective”, ” forecast “,” may “,” will “,” potential “,” proposed “and other similar words, or statements that certain events or conditions” may “or” occur “. These statements are only forecasts. Various assumptions have been used to draw the conclusions or make the projections contained in the forward-looking statements throughout this press release. Forward-looking statements are based on management’s opinions and estimates as of the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the future by looking at statements . Please refer to the risk factors identified in the Company’s filings with the United States Securities and Exchange Commission, including those identified in the Company’s Annual Report on Form 20-F, for a discussion of the material risks that could cause the results actual figures differ materially from future ones – looking for information. The Company has no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Sundial Growers Inc.
Related Links
www.sundialgrowers.com