Thu 10th Sep 2020 - BrewDog launches ‘final’ £7.5m crowdfunding round to support sustainable initiatives, loses £8m in first half BrewDog launches ‘final’ £7.5m crowdfunding round to support sustainable initiatives, loses £8m in first half: Scottish brewer and retailer BrewDog has launched what will be the final round of its record-breaking crowdfunding programme, with Equity for Punks Tomorrow. In its prospectus, the company also detailed the significant impact coronavirus has had on the business, with revenue down almost £20m against budget. It stated: “In respect of the period between the last financial year ending on 31 December 2019 and 30 June 2020 (being the date of the most recent unaudited management accounts of the group), overall gross revenue was £108,025,463 (against a budget of £126,682,293). This has resulted in an overall net loss during this period of £8,151,071. The retail division, which covers the company’s on-sales business, has been particularly affected by the pandemic; it achieved gross revenues of just under half of the budgeted amount in the period between 31 December 2019 and 30 June 2020, which resulted in a net loss of £9,242,044 for this part of the business. The overall long-term impact of the pandemic on the group remains uncertain at the time of publication of this prospectus. The company has no current plans to alter or delay the implementation of its strategic priorities and, in the opinion of the company, the working capital available to the group is sufficient for its present requirements, that is, for at least 12 months from the date of this document.” Having announced, last month, the company was now carbon negative, BrewDog has unveiled an opportunity for its community to support its sustainable initiatives. Every penny raised through Equity for Punks Tomorrow will be committed to sustainability projects including direct wind power, carbon dioxide recovery, electric vehicle fleets, and converting waste into energy. The latest round of Equity for Punks is looking to raise an initial target of £7.5m, with the stretch goal of £50m, by releasing 298,210 B shares. The round will run for an initial 150 days, closing on 29 January 2021. Shares will cost £25.15 each and be issued in blocks of two, with the minimum investment of two shares for £50.30. Any funds raised above its initial target will support a wider set of projects from a £10m investment into solar panels at its breweries across the globe; a £12.5m brewery to be built in France, the brewer’s biggest export market in order to reduce its carbon footprint when selling beer in the region; to a brewery in Asia to more efficiently service growth markets in China, Japan and India by reducing the environmental impact. BrewDog said all these projects will help make it “ever more sustainable as a business”. The launch of Equity for Punks Tomorrow was also confirmed to be the last of BrewDog’s crowdfunding rounds. Since its initial launch in 2009, Equity for Punks has raised more than £75m from 148,000 investors, which has supported investment and expansion across its business globally. Equity for Punks Tomorrow signals the most ambitious series of projects from BrewDog to date, as it embarks on a journey to completely reduce emissions from its brewing operations to zero in less than 24 months. Smaller scale projects supporting this goal are already under way, through an initial investment from the business. These include the BrewDog Forest, a 2,000-acre site in Scotland that the brewer will be funding as a means to remove carbon from the air, and use of recycled materials across its product packaging. Equity for Punks Tomorrow will look to accelerate the implementation of green infrastructure and technology across its global operations, with projects also including BrewDog Tomorrow bars – funding the construction of three bars, that are zero waste, carbon neutral, and a depot for closed-loop delivery solutions; and a hop farm at its US brewery in Columbus. BrewDog co-founder James Watt said: “In 2009, we launched Equity for Punks, and pioneered a new kind of business model. Equity for Punks Tomorrow is the next evolution of this, uniting investors across the globe to make a change today to ensure we have a planet to brew beer on tomorrow. We believe in action not promises, change is not happening fast enough, it’s time to set a new standard for sustainability, and invest in a future we’re proud of.” Just over 22% of the issued shares of BrewDog are preferred C shares, which are entitled to a liquidation preference over the B shares. Therefore, in the event the company’s entire capital is returned to shareholders or if the company is wound up, the C shareholders will be entitled to a sum equal to the greater of that which they would receive were all shares in the company to rank pari passu and their subscription price plus an 18% compound annual return on that subscription price for the period from issue to the point at which capital was returned. Therefore, holders of B shares may be subject to reduced (or nil) entitlement to liquidation or other capital proceeds in the event the company does not have enough capital to satisfy (or satisfy in full) the preferred C shares’ liquidation preference.