LEADERS IN EXTRACTION...Nextleaf Solutions OILS $0.39 41 39 100,000 N/A N/A N/A N/A Radient...
Transcript of LEADERS IN EXTRACTION...Nextleaf Solutions OILS $0.39 41 39 100,000 N/A N/A N/A N/A Radient...
LEADERS IN EXTRACTION
C O R P O R A T E P R E S E N T A T I O N Q 4
© 2019 Pure Extracts Corp. 2
LEGAL
This presentation does not constitute an offer of any
securities for sale or a solicitation of an offer to purchase any
securities. This Presentation, and the information contained
herein, is not for release, distribution or publication into or in
the United States or any other jurisdiction where applicable
laws prohibit its release, distribution or publication. This
Presentation is being issued by Pure Extracts Corp. (the
“Company”) for information purposes only.
The contents of this Presentation are confidential and may
not be copied, distributed, published or reproduced in whole
or in part, or disclosed or distributed by recipients to any
other person. No reliance may be placed for any purpose
whatsoever on the information or opinions contained in this
Presentation or on its completeness, accuracy or fairness.
No person should treat the contents of this Presentation as
advice relating to legal, taxation or investment matters, and
must make their own assessments concerning these and
other consequences of investing in securities of the
Company, including the merits of investing and the risks.
Prospective investors are advised to consult their own
personal legal, tax and accounting advisors and to conduct
their own due diligence and agree to be bound by the
limitations of this disclaimer.
Certain statements in this Presentation may constitute
forward-looking information within the meaning of applicable
securities laws. Generally, forward-looking information can
be identified by the use of forward-looking terminology such
as "expects," "believes," "anticipates," "budget,“ scheduled,"
"estimates," "forecasts," "intends," "plans," and variations of
such words and phrases, or by statements that certain
actions, events or results "may," "will," "could," "would," or
"might," "be taken," "occur," or "be achieved." Certain
statements, beliefs and opinions in this Presentation
(including those contained in graphs, tables and charts),
which reflect the Company’s or, as appropriate, the
Company’s directors’ current expectations and projections
about future events, constitute forward-looking information.
Forward-looking information contained in this Presentation is
based on certain assumptions regarding, among other
things, expected growth, results of operations, performance,
industry trends and growth opportunities. While management
considers these assumptions to be reasonable, based on
information available, they may prove to be incorrect. By
their nature, forward-looking statements involve a number of
risks, uncertainties and assumptions that could cause actual
results or events to differ materially from those expressed or
implied by the forward-looking statements. These risks,
uncertainties and other factors include, but are not limited to
risks associated with general economic conditions; adverse
industry events; marketing costs; loss of markets; future
legislative and regulatory developments; inability to access
sufficient capital from internal and external sources, and/or
inability to access sufficient capital on favourable terms;
income tax and regulatory matters; the ability of the
Company to implement its business strategies including
expansion plans; competition; and changes in regulation.
The foregoing factors are not intended to be exhaustive.
These risks, uncertainties and assumptions could adversely
affect the outcome and financial effects of the plans and
events described herein. Forward-looking statements
contained in this Presentation regarding past trends or
activities should not be taken as a representation that such
trends or activities will continue in the future. The Company
does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.
© 2019 Pure Extracts Corp. 2
© 2019 Pure Extracts Corp. 3
MISSION
Leaders in Extraction
Producing high quality extract products for recognized brands, including our own
nationally-recognized PURE PULLS product line.
© 2019 Pure Extracts Corp. 4
WHAT WE DO FORMULATION02
BRAND
DEVELOPMENT03
EXTRACTION01
We are experienced
& qualified experts
© 2019 Pure Extracts Corp. 5
MARKET OPPORTUNITY
SHIFTING
OPPORTUNITY
© 2019 Pure Extracts Corp. 5
The Cannabis Extract Market is at the Infancy of Development
Canada's cannabis industry is currently
dominated by dried flower products
with only an estimated 13% market share
by extract products. In the US it is 50%
of the market.
EXTRACTS TO
DRIVE CANNABIS 2.0
Deloitte estimates the alternative
Canadian cannabis market to be worth
$2.7 billion annually with extracts account
for over 50% of the market share
EARLY STAGE
PENETRATION
There are currently no dominant brands
in the cannabis sector, Pure Extracts is
leading the development of this new
segment in Canada
© 2019 Pure Extracts Corp. 6
Eliminate Guesswork: Our proven processes deliver superior extracts
COMPETITIVE ADVANTAGE
© 2019 Pure Extracts Corp. 6
LEADERS IN EXTRACTION Knowledge creates clear competitive advantage
OVER 5 YEARS OF ACTIVE RESEARCH, DEVELOPMENT & PRODUCTION
SUPER/SUB
CRITICAL CO2
Capsules
Tinctures
Vapes
Topicals
Beverages
Edibles
Sprays
Others
PURE EXTRACTS
Experience
is the Difference
We Know
Product Purity.
Decades of Cannabis Experience
Nationally Recognized Brand
Established Product Line
Highly Technical Expertise
Bulletproof Methodology
Standardized Operating Procedures
First Mover Advantage
© 2019 Pure Extracts Corp. 7
PURE PULLS
Pure Pulls illustrates best practice purity in manufactured products
that meet or exceed quality expectations.
Established Goodwill with repeat customers exhibits brand loyalty
Widespread and pre-existing Canadian Product Acceptance
Brand equity awareness developed through Compliant Event
Sponsorship and ongoing Product Engagement
Industry Leading distributor retention and renewal plan in place
Superior Technology Investment - Mass Production Capability
Nationally Recognized Private Label Brand.PURE PULLS
CBD 1:1
Re-Usable
Vape Pen
500mg
CO2 Oil
Charger
Included
PURE PULLS
CartridgeSATIVA
500mg
CO2 Oil
First of It’s Kind
© 2019 Pure Extracts Corp. 8
PRODUCT DEVELOPMENT STRATEGY
CURRENT
PHASE 2Q1 2020
Tinctures
Soft gels
Vape pens
PHASE 3H2 2020
Edibles
Oral Sprays
Topicals
QUALITY DEVELOPMENTPure Extracts’ Long-term Product Expansion Plan will be
strategically rolled out in the following phases.
PHASE 1
Innovative Products
Concentrates
Beverages
© 2019 Pure Extracts Corp. 9
BUSINESS MODEL
PURE EXTRACTS
Formulation Expertise
Private & White Label Sales CURRENT AND FUTURE
TOLLING
DRIED
CANNABIS
PURCHASES
BEVERAGES
EDIBLES
OIL BASED PRODUCTS TOPICALS / TINCTURES
SOFTGELS
VAPEABLES
White Label
Private Label
Scalable
Production
Percentage
of extract products
return to supplier
as cost offset (Toll)
© 2019 Pure Extracts Corp. 10
THE FACILITY
Current facility of 10,000 sq. ft.
Phase I Expansion to 25,000 sq. ft. underway
Building to EU-GMP certifications for international distribution
Dedicated lab and packaging spaces
Provisional municipal license granted
Modern CO2 extraction capabilities & processes
Designed with growth in mind. Easily scalable.
CENTRALIZED FACILITY FOR TOLL PROCESSING,
PRIVATE & WHITE LABELLED PRODUCTION
© 2019 Pure Extracts Corp. 10
© 2019 Pure Extracts Corp. 11
MILESTONES
Q3 Q4 Q4 Q1 Q2
Commence operations
& sales
Begin sales of
nationally recognized
Pure Pulls brand and
expand product line
Health Canada
Standard Processing
License
EU-GMP
facility certification
for high-growth
EU cannabis market
Health Canada Standard
Processing License
Secure distribution with
provincial government
cannabis boards
Supply, tolling, and white
label contracts secured
Completion of
10,000 sq. ft. state-of-
the-art cannabis
extraction facility
2019 2020
Fully funded the
expansion of
existing facility up
to10,000 sq. ft.
Passed Health Canada
High Level Review
Submit evidence package
to Health Canada
© 2019 Pure Extracts Corp. 12
COMPARABLES AND CAP TABLE
Share prices as of Oct. 16, 2019; Valens, Medipharm and Neptune data is from the GMP research report “Extracting profits for concentrate returns” dated April 9, 2019, Eight Capital Oct 17, 2019 Valens
research update, Haywood Oct 17, 2019 Valnes research update, Valens Oct., 2019 corporate presentation. Nextleaf data is from the Ubika Alpha research report dated May 8, 2019.
SHARES VALUE
Pure Extracts Pre-Money 50,833,334 $25,416,667
Financing @ $0.50 20,000,000 $10,000,000
Post-Money 70,833,334 $35,416,667
Comparable Companies ($ in thousands, except per share amounts)
CAPITALIZATION VALUATION STATISTICS
Share Equity Enterprise 2020 2020 Enterprise ValueCompany Name Ticker Price Value ($MM) Value ($MM) Capacity (kg) Revenue ($MM) EBITDA ($MM) Revenue EBITDA
Valens Grow Works VGW $3.29 400 332 240,000 167 76 2.0 x 4.4 x
Medipharm Labs Corp LABS $4.19 544 469 150,000 213 81 2.2 x 5.8 x
Neptune Wellness Solutions NEPT $4.59 373 373 30,000 73 51 5.1 x 7.3 x
Nextleaf Solutions OILS $0.39 41 39 100,000 N/A N/A N/A N/A
Radient Technolgies Inc. RTI $0.56 149 149 280,000 N/A N/A N/A N/A
Median $373 $332 150,000 167 76 2.20 x 5.79 x
Pure Extracts $0.50 $35.0 $25.0 122,400 65 23 0.38 x 1.10 x
Implied Valuation $143.03MM $131.64MM
© 2019 Pure Extracts Corp. 13
SUMMARY
LEADER
EXTRACTION ONLYHIGH MARGIN + GROWTH
NATIONALLY RECOGNIZED
BRAND SCALE NEAR-TERM REVENUE
PREDICTABLE CASH
FLOW
M&A AND INTERNATIONAL
GROWTH OPPORTUNITIES
01 02 03 04 05 06 07
PURITY STARTS HERE. RIGHT IN OUR BACKYARD.
Thank You
Pure Extracts Corp.
9387 Emerald Drive
Whistler, BC V8E 0G5 Canada