Halo Presentation- Oct 2018-V1-DS - Compatibility Mode · ï $ /hdglqj 0dqxidfwxuhu ri &dqqdelv...
Transcript of Halo Presentation- Oct 2018-V1-DS - Compatibility Mode · ï $ /hdglqj 0dqxidfwxuhu ri &dqqdelv...
Experts in Cannabis Oils and Concentrates
Investor Presentation October 2018NEO Symbol: HALO
www.halocanna.com
Disclosures
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This presentation of ANM, Inc. (the “Company”) is for information only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell or issue, or subscribe for any securities. The information contained herein is subject to change without notice and is based on publicly available information, internally developed data and other sources. Where any opinion or belief is expressed in this presentation, it is based on the assumptions and limitations mentioned herein and is an expression of present opinion or belief only. No warranties or representations can be made as to the origin, validity, accuracy, completeness, currency or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information in this presentation, its accuracy, completeness or by reason of reliance by any person on any of it. This presentation should not be construed as legal, financial or tax advice to any individual, as each individual’s circumstances are different. Readers should consult with their own professional advisors regarding their particular circumstances. The information contained in this presentation is not directed to persons or entities resident in the United States and does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation, unless otherwise exempt from United States securities legislation.
THE SECURITIES DESCRIBED IN THE PRESENTATION HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE U.S. AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE U.S., EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS.
FORWARD-LOOKING STATEMENTSCertain statements in this presentation are “forward-looking statements”. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “expect”, “seek”, “endeavor”, “anticipate”, “plan”, “estimate”, “believe”, “intend”, or stating that certain actions, events or results may, could, would, might or will occur or be taken, or achieved) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements are based on expectations, estimates and projections at the time the statements are made and involve significant known and unknown risks, uncertainties and assumptions which would cause actual results or events to differ materially from those presently anticipated. A number of factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward- looking statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward- looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this document. Investors should not place undue reliance on these forward-looking statements. Although the forward-looking statements contained in this document are based upon what the Company’s management currently believes to be reasonable assumptions, the Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. Except as required by law, the Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances.
FUTURE ORIENTED FINANCIAL INFORMATIONTo the extent any forward-looking information in this presentation constitutes “future-oriented financial information” or “financial outlooks” within the meaning of applicable Canadian securities laws, such information is being provided to demonstrate the anticipated market penetration and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial information and financial outlooks. Future oriented-financial information and financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to the risks set out above under the heading “ Forward Looking Statements”. The Company’s actual financial position and results of operations may differ materially from management’s current expectations and, as a result, the Company’s revenue and expenses may differ materially from the revenue and expenses profiles provided in this presentation. Such information is presented for illustrative purposes only and may not be an indication of the Company’s actual financial position or results of operations.
MARKET RESEARCH AND PUBLIC DATA This presentation contains or references certain market, industry and peer group data which is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although the Company believe these sources to be generally reliable, such information is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other inherent limitations and uncertainties. The Company has not independently verified any of the data from third party sources referred to in this presentation and accordingly, the accuracy and completeness of such data is not guaranteed.This presentation is confidential and is being provided to you solely for your information and may not be reproduced, in whole or in part, in any form or forwarded or further distributed to any other person. Any forwarding, distribution or reproduction of this document in whole or in part is unauthorized. By accepting and reviewing this presentation, you acknowledge and agree (i) to maintain the confidentiality of this document and the information contained herein, (ii) to protect such information in the same manner you protect your own confidential information, which shall be at least a reasonable standard of care and (iii) to not utilize any of the information contained herein except to assist with your evaluation of the Company.
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A Leading Manufacturer of Cannabis Oils & Concentrates in Oregon
Manufacturing and Selling in Nevada Since August 2018 and California expected by October 2018
Proven and Skilled Operators with Innovative Products
An Experienced Management Team with Industry Expertise and Blue-Chip Pedigrees
Valuation at a Significant Discount to both US and Canadian Peers
Halo Labs Investment Highlights
NEO Symbol: HALOwww.halocanna.com
Experts in Cannabis Oils & Concentrates
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Oregon: Operating Since April 2016
• +20% share of the Oregon concentrates wholesale market (1)
• Over 2.5 million grams sold since inception• Currently shipping ~100,000 grams monthly
Nevada: Operating since August 2018• 8,000 square foot facility in Las Vegas with both volatile and non-volatile capabilities • Binding LOI to acquire additional production and cultivation licenses• Manufacturing and selling commenced in August 2018
Southern California: Expected Manufacturing and Selling by October 2018 (2)
• 9,400 square foot licensed facility in Southern California with conditional use permits and licenses; and temporary state licenses issued
Canada and International• Canada: Binding LOI in place with large Canadian LP (TSX-V listed) to provide
manufacturing services• International: Exploring opportunities via joint venture from incoming requests to license
our know-how, management expertise and technology(1) BDS Analytics Q4 2017. Share calculated by converting sales dollars to units and comparing to ANM monthly unit sales. Unstable retail prices make unit share consumption more relevant.(2) Estimated date pending completion of build out and perfection of licenses
NEO Symbol: HALOwww.halocanna.com
A Leading Market Share Position in Highly Competitive Oregon Market
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(1) BDS Analytics Q4 2017. Share calculated by converting sales dollars to units and comparing to ANM monthly unit sales. Unstable retail prices make unit share consumption more relevant. Currently ranked #2 in state by volume. (2) Company prepared financials (3) 3 acres are under contract, 4 acres owned by Halo Labs. (4) Commercial production started in April 2016, prepared from audited financials (5) Results exclude discontinued operations, prepared from internal financials using IFRS
+2.5MM grams sold since April
2016
US$20MM+ in revenue to
date in Oregon(2)
+20% market share in
wholesale concentrates(1)
12,000 sq ft. manufacturing
facility in Medford, Oregon
7 acres of outdoor canopy in
Jackson County
28 months operating
history in a highly regulated
environment
NEO Symbol: HALOwww.halocanna.com
Oregon Financial Snapshot (US$MM)
2016 2017
Revenue $3.8 $10.3
Gross Profit $0.9 $0.6
EBITDA $0.1 ($3.0)
170% revenue growth despite prices falling significantly
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(1) BDS Analytics Q4 2017. Share calculated by converting sales dollars to units and comparing to ANM monthly unit sales. Unstable retail prices make unit share consumption more relevant. Currently ranked #2 in state by volume. (2) Company prepared financials (3) 3 acres are under contract, 4 acres owned by Halo Labs. (4) Commercial production started in April 2016, prepared from audited financials (5) Results exclude discontinued operations, prepared from internal financials using IFRS
(4) (5)
NEO Symbol: HALOwww.halocanna.com
Manufacturing and Selling in Nevada since August 2018
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(1) Estimated date pending completion of build out and perfection of licenses
8,000 sq ft. licensed
processing facility by Las Vegas Airport
15,000 gramsper day
estimated production
capacity
US$45MM annual(1)
potential run-rate revenue of
NEO Symbol: HALOwww.halocanna.com
Manufacturing and Selling in California by October 2018
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(1) Estimated date pending completion of build out and perfection of licenses
9,400 sq ft. licensed volatile & non-volatile
processing facilities in
Cathedral City
30,000 grams per day
estimated production
capacity
US$90MM annual(1)
potential run-rate revenue of
NEO Symbol: HALOwww.halocanna.com
Strategic Relationship with a Leading Canadian LP
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(1) Binding LOI in place
15,000 sq ft. Establishing.
state of the art manufacturing
facility(1)
Canadian LP building out
multi-acre, low-cost green
house cultivation site for extraction
50-50 profits split, All
prices at market rates and input materials and
output revenues
NEO Symbol: HALOwww.halocanna.com
BHO, PHO, CO2 and Chemical processes used involve trade secrets
PHOSolvent Propane
一Benefits
Artisan Product
ProductsShatter, Wax, Dabs and Cartridges
CO2Supercritical CO2
一Benefits
Milder and smoother
ProductsEdibles and Cartridges
ChemicalProprietary Solvent
一BenefitsPurity
ProductsTHC-A and CBD Crystals
BHOSolvent Propane
一Benefits
Efficient and potent yields
ProductsShatter, Wax, Dabs and Cartridges
Established Expertise in All Major Manufacturing Processes
10NEO Symbol: HALOwww.halocanna.com
Developing Brands and Providing White Label Manufacturing
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Halo white label sales ~35% of current revenue. We expect it to grow to over 50% by 2019
In House Brands Designed For Various Consumer SegmentsWhite Label
NEO Symbol: HALOwww.halocanna.com
Proven and Experienced Operators with Innovative Products
R&D Overview
• Crystalline / distillate formats of isolated cannabinoids (may be reconstituted in medicinal formats)
• Crystalline format of cannabinoids for different formulations
• Fractional distillation to produce products with defined purity and potency
• Capability to work across a variety of delivery methods such as transdermal, buccal, intranasal, and inhalation
Product Innovation
12NEO Symbol: HALOwww.halocanna.com
An Experienced Management Team with Industry Expertise and Blue-Chip Pedigrees
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Kiran SidhuCEO & Director
• Former Chairman, CEO and Founder of Transact Network, a leading EU electronic money institution – sold to Bancorp (NYSE:TBBK) in 2011
• Audit Committee Chair Namaste (CSE:N) Canada’s first licensed sales LP operating 24 websites in 20 countries
• Former CFO of On Stage Entertainment (NASDAQ:ONST), led IPO • Previously worked at PwC in the strategic consulting group and with Merrill Lynch Capital Markets in M&A• AB Brown University and MBA Wharton University of Pennsylvania
Andreas MetCOO & Director
• Former Senior Merchant at Walmart, managed Household Chemicals Desk with $5B in revenue and $1B profit
• Former Head of Sales & Marketing at Golden Leaf (CSE:GLH), led monthly revenues from $0 to over $1MM• MBA from University of Wisconsin in Product and Price Marketing
Philip van den BergCFO & Director
• Director covering European Equities at Goldman Sachs• Founding Partner of Taler Asset Management and Co-founder of Olympus Capital, a long/short hedge fund• CFO of Namaste (CSE:N)• Former Director and first CFO of Golden Leaf Holdings (CSE:GLH); led Canadian RTO raising +$20MM
David OrrChief Revenue
Officer
• Innovative Sales & Marketing executive with 20+ years of CPG experience• Former Senior Sales Director at PepsiCo, managed retail and ecommerce sales teams and customer
relationships across all food & beverage divisions• Former Marketing Director at Pepsi and Johnson & Johnson, with various brand and field marketing
assignments• MBA from The Anderson School at UCLA in Marketing and International Business Management
Chris FlorianVP West Coast Sales
• Former Sr. Key Account Manager for Anheuser-Busch InBev, responsible for growing 2.5MM cases annually in CVS
• Former Category Manager at Anheuser-Busch InBev responsible for growing 4MM cases annually in #3 Kroger Banner
• Former National Account Manager for a Global Leader in Distilled Spirits
NEO Symbol: HALOwww.halocanna.com
G. Scott PatersonChairman (1)(2)
• Technology, media and cannabis venture capitalist• Director of Lions Gate Entertainment (NYSE:LGF) and Chair of the Company’s Audit & Risk Committee• Former Chairman & CEO of Yorkton Securities• Former Chairman of Canadian Venture Stock Exchange & Former Vice Chairman of Toronto Stock Exchange
Fred LeighDirector
• 35+ years experience in the junior resource sector including founding Siwash Holdings Ltd• Current President of Routemaster Capital a listed investment company with royalties and several
investments in public mining
Peter McRae Director (2)
• 30+ years experience in the financial services industry• Chairman of Freedom International Brokerage having previously served as its President & CEO• Director of Eco Oro Minerals, Founders Advantage Capital and Merry Go Round Children's Foundation
Dr. Parkash Gill M.D.Medical Advisor &
Founding Shareholder
• Endowed Professor of Medicine, Keck School of Medicine at the University of Southern California • Renowned physician scientist who has developed novel therapies for certain cancers including three drugs
approved by FDA, including Taxol; Holds over 100 drug patents• Founder of CancerVax, Micromet, Cell Matrix, Vasgene and Ephos• Sat on FDA advisory committee for cancer drug approvals
Dr. Valery Krasnoperov
Science Advisor & Founding Shareholder
• Research and Development Director at Vasgene Therapeutics• 30+ years experience in biochemistry research and process implementation• Research Scientist at New York University, and at Nottingham University, UK, Department of Life Science• Awarded grants by Soros Foundation and NIH, and has co-authored 50+ peer reviewed publications to date
Further Strengthened with a Veteran Board of Independent Directors and Medical Advisors
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(1) G. Scott Paterson maintains the right to nominate an additional director to the board. (2) Pending regulatory approval.Notes: Kiran Sidahu (CEO), Andreas Met (CMO), Philip Van den Berg (CFO) are Directors as well
NEO Symbol: HALOwww.halocanna.com
Current Capitalization Structure
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Capitalization Structure
Common Shares O/S 158.5M
Warrants O/S (w.a. C$0.75) 133.8M
Options O/S (w.a. C$0.47) 12.3M
Fully Diluted Shares Outstanding 304.6M
Current Cash $5.7M
Fully Diluted Cash $111.8M
Current Market Cap@ C$0.40 $63.4M
Current Enterprise Value $57.7M
2019E Sales (C$) $65.0M
2019E EV/Sales 0.9X
NEO Symbol: HALOwww.halocanna.com
(in C$MM except per share amounts) Revenues EV/Revenues
Company Ticker Price (C$) EV Business Lines Key Jurisdictions 2018 2019 2018 2019
Green Thumb GTII-CA $22.67 147 $3,332 $3,255 Flow er / Dispensary IL, PA, MD, OH, MA, FL, NV $84 $237 38.6x 13.7x
MedMen MMEN-CA $5.97 436 $2,508 $2,311 Flow er / Dispensary CA, NV, NY, FL, CAN $147 $428 15.7x 5.4x
iAnthus IAN-CA $8.66 98 $794 $814 Various / Financing CO, NY, VT, MA, NM $10 $135 85.0x 6.0x
MPX Bioceutical MPX-CA $0.99 578 $515 $503 Flow er / Dispensary AZ, NV, MA, MD, CAN $84 $168 6.0x 3.0x
Liberty Health LHS-CA $1.29 371 $446 $440 Flow er / Dispensary FL $13 $76 34.7x 5.8x
CannaRoyalty CRZ-CA $6.42 65 $392 $364 Various / Financing CA, WA, OR, AR, FL, NV, PR $56 $136 6.5x 2.7x
Sunniva SNN-CA $6.12 38 $220 $202Flow er / Oil / Clinics / Dist.
CA, CAN $27 $231 7.4x 0.9x
Cannex CNNX-CA $0.95 204 $194 $181 Oil / Flow er WA, CA $15 $26 11.7x 7.0x
Golden Leaf GLH-CA $0.29 676 $187 $174 Oil / Flow er / Edibles OR, NV, CAN n/a n/a n/a n/a
Friday Night TGIF-CA $0.67 262 $169 $160 Oil / Flow er NV $29 n/a 5.6x n/a
Terra Tech TRTC-US $2.28 73 $165 $168 Flow er CA, NV n/a n/a n/a n/a
Tinley Beverage TNY-CA $0.82 91 $73 $65 Beverage CA & Various n/a n/a n/a n/a
High Hampton HC-CA $0.57 85 $47 $28 Services CA n/a n/a n/a n/a
Kaya KAYS-US $0.15 303 $46 $45 Flow er / Dispensary CO n/a n/a n/a n/a
Median (U.S. Companies) 11.7x 5.6x
Halo Labs (Post-Deal) $0.40 158 $63 $50 Oil / Flower OR, NV (2018), CA (2018) $26 $88 1.9x 0.6x
FD ITM
Shares
(MM)
Adj.
MCap
U.S. Cannabis Trading Comps
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Source: Company disclosure, FactSet and analyst estimates as of September 12, 2018. Note: Assumes a CAD:USD FX rate of 0.77. (1) Adjusted for cash from ITM securities.
(1)
1616NEO Symbol: HALOwww.halocanna.com
(in C$MM except per share amounts) Revenues EV/Revenues
Company Ticker Price (C$) EV Business Lines 2018 2019 2018 2019
Canopy WEED-CA $66.31 470 $26,116 $20,487 Flow er $266 $755 77.0x 27.1x
Tilray TLRY-US $136.54 92 $12,534 $12,427 Flow er / Oil $54 $205 232.1x 60.6x
Aurora ACB-CA $9.11 996 $8,926 $8,646 Flow er $271 $707 32.0x 12.2x
Aphria APH-CA $20.82 259 $5,305 $5,056 Flow er / Oil $127 $405 39.8x 12.5x
Cronos CRON-CA $14.70 217 $3,146 $3,062 Flow er / Oil $35 $148 87.5x 20.7x
TGOD TGOD-CA $8.40 329 $2,492 $2,265 Flow er n/a $202 n/a 11.2x
Hydropothecary HEXO-CA $8.25 236 $1,787 $1,506 Flow er / Oil $46 $158 32.4x 9.5x
OrganiGram OGI-CA $7.78 162 $1,210 $1,058 Flow er $46 $148 23.2x 7.2x
Namaste N-CA $3.50 339 $1,082 $1,044 Paraphernalia / Tech. n/a n/a n/a n/a
Emerald Health EMH-CA $5.61 149 $795 $739 Flow er / Oil n/a n/a n/a n/a
Supreme FIRE-CA $2.22 370 $709 $631 Flow er n/a n/a n/a n/a
Maricann MARI-CA $1.98 232 $463 $426 Flow er / Oil $18 $126 23.7x 3.4x
Neptune Wellness NEPT-CA $5.28 80 $420 $398 Extraction $36 $76 11.2x 5.2x
Emblem EMC-CA $1.97 179 $315 $322 Flow er $9 $34 36.2x 9.4x
WeedMD WMD-CA $2.39 89 $213 $211 Flow er / Oil $14 $69 15.6x 3.1x
Median (Canadian Companies) 32.4x 10.4x
Halo Labs (Post-Deal) $0.40 158 $63 $50 Oil / Flower $26 $88 1.9x 0.6x
FD ITM
Shares
(MM)
Adj.
MCap
Canadian Cannabis Trading Comps
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Source: Company disclosure, FactSet and analyst estimates as of September 12, 2018. Note: Assumes a CAD:USD FX rate of 0.77. (1) Adjusted for cash from ITM securities.
Significant valuation gap between U.S. and Canadian cannabis companies;considerable re-valuation opportunity as U.S. landscape continues to improve
(1)
17171717NEO Symbol: HALOwww.halocanna.com
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A Leading Manufacturer of Cannabis Oils & Concentrates in Oregon
Manufacturing and Selling in Nevada Since August 2018 and California Expected by October 2018
Proven and Skilled Operators with Innovative Products
An Experienced Management Team with Industry Expertise and Blue-Chip Pedigrees
Valuation at a Significant Discount to both US and Canadian Peers
Halo Labs Investment Highlights
NEO Symbol: HALOwww.halocanna.com
Contact Information
For further information please contact:
Investor Relations [email protected]
NEO Symbol: HALOwww.halocanna.com
19NEO Symbol: HALOwww.halocanna.com