TORONTO--(BUSINESS WIRE)--SOL Global Investments Corp. ("SOL Global" or the "Company") (CSE:SOL) (OTCPK: SOLCF) (Frankfurt:9SB) is pleased to announce that Duff & Phelps Canada Limited (“Duff & Phelps”) has completed a valuation of the Company’s portfolio of private and public investments (the “Investment Portfolio”) as of November 30, 2019 (the “Valuation”). All dollar values within this news release are expressed in Canadian Dollars.
Duff & Phelps Valuation
Based upon the scope of review and subject to the assumptions, limitations and qualifications and other information set out in the Valuation, Duff & Phelps concluded that the value of the Investment Portfolio, as at November 30, 2019, is in a range between $165.2 and $182.4 million with a midpoint of $173.8 million.
Pursuant to the terms of its engagement, Duff & Phelps prepared the Valuation in accordance with the standards of the CBV Institute solely for the information and use of the board of directors of SOL Global to assist it in connection with a strategic review of the Investment Portfolio and not for any other person and the Valuation may not be used or relied upon for any other purpose. The Valuation values only the Investment Portfolio, which comprises SOL Global’s investments in Verano Holdings, LLC, Canncure Investments Inc., HeavenlyRx Ltd., and other public and private company investments and debt instruments, with consideration of potential acquisitions that were at an advanced stage of due diligence. The Valuation does not include any other assets of SOL Global or factor in any of the Company’s liabilities, including its previously announced (on July 8, 2019) outstanding $50.0 million senior secured non-convertible debenture.
Commentary by SOL Global
SOL Global notes that the Valuation was completed at the end of the same month that the MJ ETF hit a record low price1, after declining by 45.64%. Over the same period, the benchmark S&P 500 index rose 16.90%. Management believes that this spread demonstrates that there still remains substantial room for accretion of SOL Global’s cannabis and CBD investments as the marketplace continues to mature.
“We are pleased with the results of the Duff & Phelps valuation as we believe it demonstrates the strength of our core business and our ability to dynamically manage our assets during what has been a transformational year for the cannabis industry. Despite a substantial downturn that hit the entire sector, we held fast to our positions. The strong valuation of our portfolio is a testament to the validity of our investment strategy and our portfolio of public and private companies that include a variety of THC-focused brands including One Plant Florida, and highlights our ability to invest in other complementary industries like CBD and Esports. It’s clear that SOL Global is positioned for future growth over time as the market rebounds and matures,” said SOL Global CEO Brady Cobb. “I’m particularly excited about our positive momentum in Florida through One Plant’s scaled growth and success in cultivating the best premium flower and flower derived products in the State. Their success is evidence of our commitment to operating at the highest levels in the space, all with a laser focus on creating shareholder value via efficient operations including our proprietary delivery model.”
SOL Global’s Net Asset Value (“NAV”) Calculation2:
Using the valuation midpoint of $173.8 million as reflected in the Valuation, and applying certain other assumptions deemed reasonable by management of SOL Global [and reflected below], the Company has calculated the net asset value of the Company as at November 30, 2019:
$173.8M - Midpoint of Valuation of Investment Portfolio (as at November 30, 2019)
$81.2M - Total liabilities per the September 30, 2019, SOL Global’s financial statements as at and for the six-month period ended September 30, 2019 3
$92.6M - Net Asset Value
The Company currently has 54,459,256 common shares issued and outstanding on a non-diluted basis. This implies a NAV per Share of approximately $1.70.
The foregoing calculation was prepared solely by management of SOL Global and is not part of the Valuation or any of the work conducted by Duff & Phelps.
2 The calculation of the Net Asset Value is a non-IFRS measure. See non-IFRS measures below.
3 SOL Global provides no assurance that the liability balance presented in the unaudited financial statements as at and for the six-month period ended September 30, 2019 is reflective of the liability balance as at November 30, 2019.
About SOL Global Investments Corp.
SOL Global is an international investment company with a focus on investing in cannabis and cannabis related companies in legal U.S. states, the hemp and CBD marketplaces and the emerging European cannabis and hemp marketplaces with an objective of providing shareholders with a long term return through capital appreciation, dividends and interest from its investments. If SOL Global believes there is a strategic reason to do so, it may also invest in companies not in the cannabis sector.
About Duff & Phelps
The independent valuation was conducted by Duff & Phelps Canada Limited, the Canadian operating subsidiary of Duff & Phelps, LLC, a global valuation and corporate finance advisory firm with expertise in business valuation, economic loss quantification, transaction opinions, mergers and acquisitions, disputes and investigations, restructuring, and compliance and regulatory consulting. Its clients include publicly traded and privately held companies, law firms, government entities and investment organizations such as private equity firms and hedge funds. Duff & Phelps also advises the world’s leading standard setting bodies on valuation issues and best practices. Duff & Phelps’ more than 3,500 professionals are located in over 70 offices in 28 countries around the world.
Non-IFRS Financial Measures
This press release includes references to net asset value and net asset value per share, which are financial measures that do 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; net asset value per share is the value of the total assets less the value of total liabilities divided by the total number of common shares outstanding as at a specific date. The Company believes these non-IFRS financial measures not only provide management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. In particular, management believes these financial measures 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 these non-IFRS measures should not be construed as an alternative to the measurements calculated in accordance with IFRS as, given their non-standardized meaning, they may not be comparable to similar measures presented by other issuers.
Advisory on Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking information contained herein include, but are not limited to, information relating to the Company’s strategic plans and business and its expectations regarding the future of the cannabis market.
By nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, but are not limited to: the Company's ability to comply with all applicable governmental regulations in a highly regulated business; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; inconsistent public opinion and perception regarding the medical-use and adult-use marijuana industry; and regulatory or political change. Additional risk factors can also be found in the Company's current MD&A, which has been filed on SEDAR and can be accessed at www.sedar.com.
Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.