July 19, 2019
Torsten Kuenzlen
Chief Executive Officer
Sundial Growers Inc.
#200, 919 11 Avenue SW
Calgary, AB
Canada T2R 1P3
Re: Sundial Growers Inc.
Registration Statement on Form F-1
Response dated July 15, 2019
File No. 333-232573
Dear Mr. Kuenzlen:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-1
Recent Developments
Acquisition of Brands and Cultivars, page 10
1. Please tell us your consider of whether or not the agreement to acquire
the Acquired
Brands and Cultivars would be considered an acquisition of a business
pursuant to Article
11 of Regulation S-X that would require financial statements pursuant to
Rule 3-05 of
Regulation S-X and pro forma information pursuant to Article 11.
Critical Accounting Policies and Estimates
Share-Based Compensation, page 103
2. We note on page A-003 that you interpolate the fair value of common
stock based on a
Torsten Kuenzlen
FirstName LastNameTorsten Kuenzlen
Sundial Growers Inc.
Comapany NameSundial Growers Inc.
July 19, 2019
July 19, 2019 Page 2
Page 2
FirstName LastName
straight-line basis for February, March, April, and May 2019. We do
not believe
interpolation on a straight-line basis is an appropriate basis for
determining the fair value
of your common stock. Please revise to use an acceptable methodology
such as the
market or income approach. In addition, please tell us the nature,
financial impact, and the
specific timing of the events that materially impact the common stock
fair value between
each valuation date. Also please tell us what "accretive transactions"
have occurred in the
weeks since June 30, 2019 as referenced on page A-005 of your response
and why those
transactions would result in a 15% discount to the IPO price.
3. We note on page A-004 that you estimate your August 2018 through
January 2019
common stock fair value at the exercise price of the warrants. We do
not believe the
exercise price is an indication of the value of your stock. Please
revise your analysis to
support your estimate of the fair value of the common stock for the
period. In addition,
please confirm that no material event that may impact your common
stock fair value
occurred during August 2018 through January 2019.
4. You state on page A-004 that you applied a 33% discount. Describe the
terms of the
Notes that resulted in a discount and why you believe an additional
discount is appropriate
for lack of liquidity when your original valuation of the company
already implicitly
considers your lack of liquidity.
5. Please provide us supplementally a table of all equity issuances for
the most recent twelve
months through the date of the initial public offering including
stock, options, warrants,
and convertible instruments. For each issuance, please provide the
date of the issuance,
number of options, warrants, or shares issued, the exercise price or
per share amount paid,
and your fair value determination.
6. You state on page 96 of the Form F-1 that the holders of the 8%
convertible notes issued
in May 2019 have a one-time right to convert the Notes into shares at
a specified discount
to the price of the shares offered to the public in connection with
the IPO. Please
disclose the amount of any beneficial conversion feature that you
expect to record at the
closing of the IPO or tell us why the amount is not material.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Torsten Kuenzlen
Sundial Growers Inc.
July 19, 2019
Page 3
You may contact Keira Nakada at 202-551-3659 or Mary Mast at
202-551-3613 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or Dietrich King at 202-551-8071 with
any other
questions.
FirstName LastNameTorsten Kuenzlen Sincerely,
Comapany NameSundial Growers Inc.
Division of Corporation
Finance
July 19, 2019 Page 3 Office of Healthcare &
Insurance
FirstName LastName