SOL Global Investments Corp. (“SOL Global” or the “Company“) (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) is pleased to provide its investors with audited financials for the year ended November 30, 2020 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.
Audited Year-End Results
- For the year-ended November 30, 2020, the Company recorded a positive net income of $98 million VS Year-end November 30, 2019 loss of ($103) million. This represents a favourable change of $201.4 million.
- Total gain from investments totalled $139.0 million for the year-ended November 30, 2020, compared to loss of ($113.2) million for the eight-month period ended November 30, 2019. This represents a favourable change of $252.2 million between periods.
- The Net Asset Value (“NAV”) per share is equal to $3.51 at November 30, 2020 VS $1.70 at November 30, 2019.
- SOL Global has significantly strengthened its asset base as compared to previous years when market multiples were higher. The gains reported in the financial statements are reflective of material operational improvements and growth in the underlying investments.
The Company’s financial statements for the quarter ended February 28, 2021 will be released on April 30, 2021
- Forward looking guidance into the Company’s Q1 results:
- The reverse takeover transaction of Majesta Minerals Inc. (“Majesta”) by Verano Holdings LLC (“Verano”), resulted in a significant portion of the approximately 25.2 million shares received being freely-tradeable.
- Bluma Wellness Inc. (“Bluma”) announces sale to Cresco Labs Inc. (“Cresco Labs”)
- The stock of Engine Media Holdings Inc. (formerly Torque Esports Corp.) (“Engine Media”) gained over 60%
- The estimated NAV is expected to be between $6.40 and $7.80
- In calculating this preliminary conservative range, significant discounts were applied as fair value adjustments for lack of liquidity and trade restrictions, minority control positions, and other relevant factors. This range is an estimate and may differ from the final Q1 results.
Verano Operational Update
- On February 11, 2021, Verano, the Company’s largest core investment holding, completed its merger with Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, RVC 360, LLC and affiliated companies. Concurrent with the completion of the merger, Verano completed a reverse takeover of Majesta. The company resulting from the merger and reverse takeover transactions is operating under the name “Verano Holdings Corp.” (the “Combined Company”) and the common shares of the Combined Company have begun trading on the Canadian Securities Exchange (the “CSE”) under the ticker (CNSX:VRNO). The Combined Company has also raised $100 million at a price of $28.50 per share. The Combined Company has active and planned operations in 14 states with 690,000 square feet of cultivation space across 8 facilities. It operates 46 active retail locations and has plans to open an additional 30 retail locations in the near future.
Bluma Wellness Operational Update
- As of February 28, 2021, Bluma operates seven (7) retail locations in the state of Florida and generates more than USD$2.7 million per month in revenue. On January 14, 2021, Bluma announced that it had signed a definitive agreement to be acquired by Cresco Labs (CSE:CL) (OTCQX:CRLBF) in an all stock transaction valued at USD$213 million. Under the terms of the transaction, shareholders of Bluma will receive 0.0859 of a subordinate voting share of Cresco Labs for each common share of Bluma (each whole share, a “Bluma Share”) held (the “Exchange Ratio”). The Exchange Ratio implies a price per Bluma Share of approximately USD$1.12, representing a premium of approximately 29% based on the closing price of Bluma Shares on the CSE as of January 13, 2021.
Other Highlights
- On January 8, 2021, Engine Media reported its results for the year ended August 31, 2020. Engine streamlined its operation throughout the year to focus on core initiatives. It also settled $10.7 million of convertible debentures to decrease its debt burden. In preparation of its intended up-listing to the NASDAQ Capital Markets (“NASDAQ”), it raised $15 million in February 2021. Engine Media is traded publicly under the ticker symbol (TSX-V: GAME) (OTCQB: MLLLF).
- 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 anticipates moving to stay the Ontario claim on the basis that the issues are already before the New York courts.
- As announced on March 2, 2021, the Company intends to commence a normal course issuer bid (the “NCIB”) immediately after the release of the financial statements. 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. All Common Shares purchased under the NCIB will be purchased on the open market through the facilities of 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.
