SOL Global Provides Interim Unaudited Financials for the First Quarter Ended February 2021
- SOL Global Reports Best Quarter Since its Inception
- SOL Global Continues to Buy Back its Shares Under the Previously Announced Normal Course Issuer Bid
TORONTO-April 29, 2021-(BUSINESS WIRE)–SOL Global Investments Corp. (“SOL Global” or the “Company”) (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) is pleased to provide its investors with unaudited financials for the first quarter ended February 28, 2021 and a general operational update concerning the Company’s assets and investments. All figures in this press release are in Canadian dollars, unless otherwise indicated.
Unaudited Quarter-End Results
- For the quarter-ended February 28, 2021, the Company recorded a positive net income of $208 million VS quarter-end February 29, 2020 of $2.9 million. This represents a favourable change of $205.2 million.
- Total gain from investments totalled $244 million for the quarter-ended February 28, 2021, compared to $2.6 million for the quarter-ended February 29, 2020. This represents a favourable change of $241.5 million between periods.
- The Net Asset Value (“NAV”) per share is equal to $7.12 at February 28, 2021 VS $1.98 at February 29, 2020.
- SOL Global has significantly strengthened its asset base as compared to previous quarters when market multiples were higher. The gains reported in the financial statements are reflective of material operational improvements and growth in the underlying investments. Core portfolio investments have either completed or entered into agreements to complete liquidity events that may unlock value for investors.
I’m pumped for our stockholders and beyond proud of my team and partners for today’s results.
SOL Global’s Chairman and CEO, Andy DeFrancesco
Our year end results were strong, but we shattered expectations with this most recent quarter. Going forward, our sectors and holdings may change but our strategy, risk management and dedication to our stockholders will not.
The Company’s financial statements for the quarter ended May 31, 2021 will be released on July 30, 2021
- Forward looking guidance into the Company’s Q2 results:
- Bluma Wellness Inc. (“Bluma”) was acquired by Cresco Labs Inc. (“Cresco Labs”) in an all stock transaction valued at USD$213 million.
- The Company announced its intention to increase its ownership interest in Captor Capital (the parent company of One Plant California) to 15.7%.
- The Company co-led Fyllo’s $30 million dollar Series B Financing, with a USD$4 million investment.
- The Company made its first investment in the psychedelic sector, investing $2.6 million into Wesana Health.
- The Company structured and led a recent financing into Green Scientific Labs, LLC (“GSL”), investing approximately $2.84 million for a 14.5% interest. The Company intends to increase its ownership in GSL by investing further into its RTO financing round, which is imminent.
Verano Operational Update
On March 31, 2021, Verano Holdings Corp. (“Verano”) announced it had entered into a definitive agreement to acquire all of the issued and outstanding equity interests of The Healing Center, LLC, adding three highly productive, award-winning dispensaries in the Pittsburgh-metro area.
On April 6, 2021, Verano announced its full year results for the year ended December 31, 2020. Highlights include:
- 2020 revenue of $355 million, growth of approximately 200%
- Gross profit margin of 63% for full year 2020
- 2020 net income of $245 million
- 2020 adjusted EBITDA of $170 million, 48% margin
On April 22, 2021, Verano announced it had entered into definitive agreements for all of the issued and outstanding equity interests in Agri-Kind, LLC, Agronomed Holdings Inc. and Agronomed Biologics, LLC, which collectively will add the equity in two cultivation licenses (one active location plus another facility for additional cultivation and production that is currently under construction) and the equity in a permit to add six dispensaries (non-active, to be developed) in Pennsylvania. These equity transactions will enhance Verano’s presence in Pennsylvania and further the Company’s position as a U.S. market leader.
Bluma Wellness Operational Update
On April 14, 2021, Cresco Labs closed its acquisition of Bluma. As a result of the acquisition, Bluma is now a wholly-owned subsidiary of Cresco Labs.
On April 12, 2021, Cresco launched a new brand of branded gummies under the name Wonder Wellness Gummies.
On April 22, 2021, Cresco announced the appointment of Tarik Brooks to its board of directors and the retirement of Dominic Sergi.
Other Highlights for Q2
- On March 15, 2021, the Company announced its first green tech investment in award-winning electric motorcycle company Damon Motorcycles (“Damon”). Damon recently raised USD$30 million after completing a bridge financing round led by SOL Global, Benevolent Capital Partners, LLC, Zirmania Investments Limited, and other investors. SOL Global invested CAD$6.1 million into Damon.
- Update on Litigation with lender, 1235 Fund LP: As previously disclosed, the Company commenced litigation in New York against its lender seeking, among other relief, a declaration that the lender is only entitled to have a $50 million non-convertible debenture (the “Debenture”) repaid in cash, and not in Verano shares owned by the Company with a current market value of more than $350 million. Subsequently, the lender issued a claim against the Company and others in Ontario for repayment of the Debenture through Verano shares or in the alternative damages of not less than $550 million. The Company will be asking to stay the Ontario claim on the basis that the issues are already before the New York courts. The lender has asked that the proceedings in New York be stayed or dismissed, arguing that these matters should be decided by a court in Ontario.
- As announced on March 2, 2021, the Company commenced a normal course issuer bid on April 1, 2021 (the “NCIB”). Under the NCIB, the Company may purchase up to 2,737,805 of the Company’s common shares (the “Common Shares”), representing approximately 5% of its issued and outstanding Common Shares on the date the NCIB was initiated. All Common Shares purchased under the NCIB will be purchased on the open market through the facilities of the Canadian Securities Exchange (the “CSE”) and will be at the prevailing CSE market price for the Common Shares at the time of purchase. Common Shares acquired by the Company under the NCIB are being purchased for cancellation.
COVID-19 Update
SOL Global and its investments and portfolio companies have continued to deliver for both clients and shareholders despite challenges in the overall cannabis space and uncertain market conditions caused by the ongoing COVID-19 pandemic. SOL Global’s portfolio companies and companies in which they retain a non-controlling economic interest, including Bluma have adapted to the current environment through the continued scale-up of existing Florida cannabis production facilities, the continued expansion of Bluma’s operating subsidiary, One Plant Florida’s, already robust home- and curbside-delivery network and online ordering system in Florida, and the continued oversight of strategic business opportunities. SOL Global remains confident that it will continue to weather the COVID-19 storm and will emerge from the pandemic as a strengthened leader in the larger cannabis marketplace.
About SOL Global Investments Corp.:
SOL Global is a diversified investment and private equity holding company engaged in the small and mid-cap sectors. The Company’s investment partnerships range from minority positions to large strategic holdings with active advisory mandates. The Company’s seven primary business segments include Retail, Agriculture, QSR & Hospitality, Media Technology & Gaming, and New Age Wellness.
Non-IFRS Financial Measures
This press release includes references to net asset value, which is a financial measure that does not have a standardized meaning prescribed by IFRS. Net asset value is calculated as the value of total assets less the value of total liabilities at a specific date. The Company believes this non-IFRS measure does not only provide management with comparable financial data for internal financial analysis but also provides meaningful supplemental information to investors. In particular, management believes this financial measure can provide information useful to its shareholders in understanding the performance of the Company and may assist in the evaluation of its business relative to that of its peers. Investors are cautioned that this non-IFRS measure should not be construed as an alternative to the measurements calculated in accordance with IFRS as, given the non-standardized meaning, it may not be comparable to similar measures presented by other issuers.
