CALGARY, AB, Jan. 17, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC" or the "Company") is pleased to announce that it has acquired the popular Lamplighter recreational cannabis brand. SSC is also pleased to announce the appointment of Randeep Gill to the position of Vice President, Commercial.
Lamplighter Acquisition
On January 15, 2024, the Company entered into agreements with a Canadian licensed producer (the "Vendor"), providing for the sale of assets and inventory relating to the production and sale of Lamplighter to the Company.
Lamplighter provides premium, ready to consume ("RTC") cannabis products to markets across Canada, including Ontario, Alberta, and British Columbia. These products currently consist of ultra high potency vape cartridges and infused prerolls.
Mr. Jeff Swainson, President and CEO of SSC, stated: "With Canadian LPs exiting the business-to-consumer market in Canada to focus on international sales, SSC has the opportunity to complement our strong organic revenue growth with acquisitions of quality assets that are accretive to revenue and profitability. Accordingly, we are pleased to announce the acquisition of the popular Lamplighter brand, which provides ultra high potency RTC cannabis products across Canada. The purchase price of $0.6 million will be paid from future Lamplighter cash flow, and the purchase price equals the net book value of the tangible assets acquired. With projected 2023 Lamplighter gross revenue of $6.8 million, and similar revenue projected for 2024, we believe the acquisition will contribute value to our shareholders."
Acquisition Consideration, 2023 Gross Revenue, and SSC Valuation (1)
| Lamplighter
Acquisition Consideration(1) | Acquisition Revenue Multiple (Net of Tangible Assets Acquired)(1) | 2023
Projected
SSC Gross Revenue(1) | 2023
Lamplighter
Gross Revenue(1) | 2023
Combined
Gross Revenue(1) | Current SSC
Enterprise Value(2) | Gross Revenue
Multiple(3) |
| $600,000 | 0.0x | $7,000,000 | $6,800,000 | $13,800,000 | $2,000,000 | 0.14x |
| (1) | Unaudited. Projections. Please conduct your own due diligence. |
| (2) | Enterprise Value calculated as $4.0 million market capitalization less $2.0 million working capital. Share price of $0.08 based on close
January 16, 2024. |
| (3) | Gross Revenue Multiple calculated by dividing the Enterprise Value by the Combined Gross Revenue. |
Mr. Swainson added: "SSC and Lamplighter had a projected combined 2023 gross revenue of $13.8 million, compared to current SSC enterprise value of $2 million, representing a gross revenue multiple of 0.14x. Further near-term upside comes from SSC's new brand Frootyhooty, which launched nine initial SKUs in Alberta during December 2023. Frootyhooty will launch thirteen additional SKUs in Alberta and Ontario during February 2024, with launches in other provinces to follow."
SSC expects first Lamplighter sales in February, 2024, and for the integration of the Lamplighter brand to be completed by May, 2024.
Lamplighter Acquisition Benefits
The anticipated benefits of this acquisition for SSC are as follows:
- Adds up to 21 additional product listings in Ontario, Alberta, and BC in large product categories.
- Provides sales access to BC, a province that SSC does not currently participate in.
- Adds projected gross revenue of $6.8 million per year (2023 projected Lamplighter run rate).
- Adds material projected gross margin with minimal incremental fixed operating costs.
- The $0.6 million consideration will be paid to the Vendor when the Lamplighter products are sold to the provinces. This limits SSC's risk on the acquisition.
- Leverages unutilized facility capacity.
- Reduces sales, general & administration costs as a percentage of revenue.
- Diversifies product portfolio into high potency distillate vapes and prerolls.
- Complements SSC's popular Frootyhooty (live rosin amplified) and Astrolab (solventless) brands.
See below for a link to the Lamplighter website:
https://lamplightercanna.ca/
Appointment of Vice President, Commercial
SSC is pleased to announce that Randeep Gill has been appointed to the position of Vice President, Commercial. Randeep will work closely with SSC's corporate, operations, supply chain, quality assurance, and sales teams, with the goal of driving sales velocity and achieving operational and commercial excellence. Randeep has ten years of commercial, production, and quality assurance experience in the pharmaceutical and cannabis industries, including three years with SSC. Randeep holds a Bachelor of Science degree in Pharmacy, a Pharmaceutical QA/QC post graduate diploma, and a Plant Production and Facility Management diploma.
Mr. Swainson added: "The appointment of Randeep Gill to the position of Vice President, Commercial will help to ensure that SSC continues to execute its ambitious commercialization strategy, which includes both organic and inorganic growth initiatives."
Corporate Presentation Posted to Website
SSC has posted a new corporate presentation to its website at www.simplysolventless.ca.
About Simply Solventless Concentrates Ltd.
SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.
Notice on Forward Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning market capitalizations, enterprise values, gross revenue multiples, upside for SSC shareholders, anticipated benefits to SSC of the Lamplighter acquisition, SSC capitalizing on opportunities for organic and inorganic growth in the cannabis industry, future gross revenues, future combined revenues, sales access to BC and other jurisdictions and listings, additional gross margin, the sale of Lamplighter products, future growth, the opinions or beliefs of management, utilizing unutilized facility capacity, the diversification of SSC's product portfolio, the timing for initial sale and final integration of the Lamplighter brand, and the launching of additional Frootyhooty products. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control and SSC. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Pro Forma Presentation.
The pro forma financial information referred to in this press release, being combined gross revenue and gross revenue multiple ("Pro Forma Information"), which gives effect to the Lamplighter acquisition as if it had closed on January 1, 2023 was prepared utilizing accounting policies that are consistent with those disclosed in the audited consolidated financial statements of the Company for the year ended December 31, 2022 and the unaudited condensed consolidated financial statements of the Company as at and for the three and nine months ended September 30, 2023.
The Pro Forma Information has been derived from, and should be read in conjunction with: (i) the audited consolidated financial statements of the Company for the year ended December 31, 2022, and (ii) the unaudited condensed consolidated financial statements of the Company as at and for the three and nine months ended September 30, 2023, each of which is available on SEDAR+ (www.sedarplus.ca) under the Company's issuer profile.
The Pro Forma Information presented herein is not necessarily indicative of the operating results or financial condition that would have been achieved if the acquisition to which the Pro Forma Information relates had been completed on the dates or for the periods presented, nor do they purport to project the results of operations or financial position of the combined entities for any future period or as of any future date. Actual amounts recorded from consummation of the acquisition to which the Pro Forma Information relates would likely differ from those recorded in the Pro Forma Information. The Pro Forma Information does not reflect any special items such as integration costs or operating synergies that may be realized as a result of the acquisition to which the Pro Forma Information relates.
Certain adjustments and assumptions were made when preparing the Pro Forma Presentation to give effect to the Lamplighter acquisition. The information upon which such adjustments and assumptions were made was preliminary and adjustments and assumptions of this nature are difficult to make with complete accuracy. The Company has not independently verified the financial statements of Lamplighter that were used to prepare certain of the Pro Forma Information included in this press release and as such the Pro Forma Information is not intended to be indicative of the financial condition, results of operations or cash flows that would actually have occurred, or which are expected in future periods, had the acquisition occurred on the dates indicated. The Pro Forma Information contained in this [press release/Presentation is included for informational purposes only, as of their respective dates, and undue reliance should not be placed on such Pro Forma Information
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Simply Solventless Concentrates Ltd.
For further information: Simply Solventless Concentrates Ltd., Jeff Swainson, President and CEO, Phone: 403-796-3640, Email: jeff@simplysolventless.net