Results cover period prior to completion of IPO and acquisitions of Organa Brands and Firefly
TORONTO, April 12, 2019 /CNW/ - SLANG Worldwide Inc. (CNSX: SLNG), ("SLANG" or the "Company"), a global cannabis consumer packaged goods ("CPG") company, today announced that it has filed its financial results for the fiscal year ended December 31, 2018. The consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS"). All figures are stated in Canadian dollars unless otherwise noted.
SLANG Worldwide CEO Peter Miller said, "SLANG Worldwide's mission is to build a portfolio of leading cannabis consumer products and an extensive distribution network to sell our products. In 2018, we laid the foundational building blocks with SLANG's acquisitions of Organa Brands and Firefly, which were completed in January 2019. Today we are a different company: SLANG is in a position of strength with a diverse portfolio of high performing cannabis brands distributed in over 2,600 stores across 11 US states, Puerto Rico, Canada and Jamaica. We plan to leverage our brand, distribution and partnership strengths and expect rapid growth and scale in the months to come."
Fiscal 2018 Results
- As at December 31, 2018, SLANG had not yet completed the acquisitions of National Concessions Group ("NCG" or "Organa Brands") and NWT Holdings, LLC (also known as "Firefly"). Accordingly, the Company's fiscal 2018 financial results do not include any results of the operations of Organa Brands or Firefly, and are more reflective of acquisition and financing costs associated with corporate development activities.
- The Company reported revenue of $5.2 million in 2018, consisting primarily of rental income. Operating expenses in 2018 were $19.8 million, relating primarily to valuation adjustments, professional and non-cash marketing costs in the startup phase of the Company's business. In addition, the Company incurred a $7.7 million impairment charge and $5.9 million of financing and fair value adjustment charges, in accordance with IFRS accounting standards.
- Net loss in 2018 was $28.0 million, of which $23.8 million was related to non-cash marketing, goodwill adjustments, share compensation and derivative adjustments.
- The Company's reported financial results for the first quarter ending March 31, 2019 will include results for Organa Brands and Firefly starting from January 22, 2019, the date the acquisitions were completed.
- On January 22, 2019, certain escrow conditions were satisfied and approximately $63 million of funds were released to the Company in accordance with the terms of a subscription receipt offering that had closed on September 26, 2018, and 43,998,590 subscription receipts of the Company were automatically converted, without any further consideration or action by the holders thereof, into 43,998,590 common shares of the Company ("Common Shares") and 21,999,281 common share purchase warrants (the "Warrants"). Each Warrant is exercisable into one Common Share at an exercise price of $2.25 for a period of 24 months commencing on January 29, 2019, subject to certain acceleration and adjustment provisions. The Company used the funds from the offering to complete two acquisitions, with the balance held for working capital purposes.
- On January 22, 2019, the acquisition of Organa Brands was closed with the payment of USD $20 million in cash and the issuance of an aggregate of 65,000,000 Common Shares and 17,500,000 restricted voting shares ("Restricted Shares").
- Upon closing of the Organa Brands acquisition, the Company was granted options to acquire Allied Concessions Group ("ACG") for an aggregate of 33,000,000 Common Shares or Restricted Shares (provided that a maximum of 19,800,000 of such shares may be Restricted Shares) and NS Holdings ("NSH") for 49,500,000 Common Shares or Restricted Shares (provided that a maximum of 29,700,000 of such shares may be Restricted Shares). Both ACG and NSH are components of the Company's supply chain for Organa Brands products. The exercise of the options is subject to the satisfaction or waiver of certain conditions precedent, and at the date of this release the options had not been exercised.
- On January 22, 2019, the acquisition of Firefly was completed for consideration of USD $8 million in cash and 7,087,464 Common Shares.
- On January 29, 2019, the Common Shares began trading on the Canadian Securities Exchange under the ticker symbol "SLNG."
- On February 29, 2019, the Company announced that it has entered into a partnership with Trulieve Cannabis Corp., the largest vertically integrated cannabis production and retail company in Florida, to offer the state's more than 180,000 registered medical marijuana patients access to SLANG's portfolio of leading cannabis brands in Trulieve's dispensaries across the state. Pursuant to the partnership, Trulieve has an exclusive license to distribute SLANG's portfolio of branded cannabis products across its Florida distribution network, which currently includes 26 dispensaries and home delivery available statewide. Sales in Florida under this agreement are expected to commence in Q2 2019.
- On March 6, 2019, the Company announced that it has entered into a partnership with Southern Development Holdings ("SDH") to offer its branded cannabis products to patients across Puerto Rico. Pursuant to the partnership, SDH has been granted an exclusive license in Puerto Rico to the SLANG product suite. SDH will produce the Company's products at its state-of-the-art GMP facility, and distribute them broadly to medical cannabis dispensaries throughout Puerto Rico. The Company will receive royalty payments for each SLANG branded product sold in Puerto Rico, with sales expected to begin in Q2 2019.
- On March 11, 2019, the Company announced the launch of the RESERVE product line in the California market as an extension of its O.penVAPE brand. Marketed as a curated selection of top strains at market-leading prices, RESERVE will complement the Company's existing product line.
- On March 25, 2019, the Company announced that the Common Shares are now trading on the Frankfurt Stock Exchange under the trading symbol 84S.
- The Organa Brands, Firefly, and SLANG teams moved from industry peers and allies, to an organized and consolidated leadership group, establishing efficient management coverage of the 11 states in which SLANG brands are carried.
- The SLANG team identified the first territories it intends to enter or enhance its presence including through potential partnership and acquisition.
- SLANG will simultaneously develop and acquire the necessary elements to enhance brand presence, leadership, and performance; establishing deep market penetration with the best products, collectively selling the most branded units.
- The Company focuses on creating brand value by establishing leadership positions in what management believes to be the highest value segments of the supply chain: manufacturing, branding and distribution. By allocating capital to these activities and foregoing investments in expensive infrastructure associated with the cultivation and retail segments, the Company aims to deliver strong returns to its investors.
- The Company intends to evolve its portfolio of branded products within existing categories and expand into new categories. Our portfolio is among the most diverse and widely distributed in the cannabis industry, highlighted by the following brands: O.penVAPE, Bakked, Reserve, Craft Reserve, ISH, Magic Buzz, Pressies, District Edibles, Green House Seed Co., Strain Hunters, and Firefly.
- The Company will continue to pursue strategic partnerships in order to add new brand assets to our portfolio, expedite our entry into new markets and broaden our distribution network.
- In 2019, we expect to expand our distribution network to enable us to continue to bring new products to market and grow sales of our existing portfolio. Our branded products are currently available in over 2,600 retail locations, 11 states and five continents. We plan to continue to expand the geographic areas where our products can be bought.
- The Company plans to enter the Canadian market following an anticipated regulatory change that will permit the sale of cannabis-infused products in October 2019. We are evaluating additional international markets to identify suitable jurisdictions for potential market entry.
On April 11, 2019, the Company had 211,993,602 common shares and 17,500,000 restricted voting shares issued and outstanding, as well as 41,255,918 vested Common Share purchase warrants and a total of 8,083,528 stock options.
About SLANG Worldwide Inc.
SLANG Worldwide Inc. is a leading cannabis-focused consumer packaged goods company. The Company is focused on acquiring and developing market-proven regional brands, as well as creating new brands to meet the needs of cannabis consumers worldwide. SLANG is listed on the Canadian Securities Exchange under the ticker symbol SLNG. For more information, please visit www.slangworldwide.co.
This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings "Risk Factors" in SLANG's final long form prospectus dated January 17, 2019 and "Risks and Uncertainties" in the management discussion and analysis for the year ended December 31, 2018, each as filed on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
SOURCE SLANG WORLDWIDE