MARCH 2020 TSXV: VLNS, OTCQX:VLNCF - THEVALENSCOMPANY.COM - Valens Groworks
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MARCH 2020 TSXV: VLNS, OTCQX:VLNCF THEVALENSCOMPANY.COM
NOTICE TO RECIPIENT This presentation (the “Presentation”) of Valens GroWorks Corp. (the “Company” or “The Valens Company” or “Valens”) is an overview only and does not contain all the information that a prospective investor may require to make investment decisions. This Presentation is for information purposes only and does not constitute an offer to sell or a solicitation to buy any securities of the Company. In making an investment decision, investors must rely on their own examination of the Company, including the merits and risks involved. FORWARD LOOKING STATEMENTS This Presentation contains forward-looking statements and forward-looking information. Often, but not always, forward-looking statements can be identified by the use of words or phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements and information. Examples of such statements include: (A) the financial forecast of the Company; (B) the intention to grow the business and operations of the Company; (C) anticipated timing for the availability of the Company’s products to market and expected sale prices; (D) expected growth in the number of users of medical and recreational marijuana anticipated; and (E) the expansion of the Company’s business into other revenue streams. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this Presentation. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: expectations regarding the ability of the Company to raise capital and grow through acquisitions; growth strategy, joint venture, other commercial opportunities and the ability of the Company to carry out its stated work program; and expected sources and uses of capital. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements and information contained in this Presentation are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and information included in this Presentation are made as of the date of this Presentation and the Company assumes no obligation to update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation. TSXV:VLNS, OTC:VLNCF | AW ARD ED TO P EX TR A CTION COMPA N Y VALENS | 2
CAUTIONARY NOTE REGARDING FUTURE-ORIENTED FINANCIAL INFORMATION To the extent any forward-looking statement in this Presentation constitutes “future-oriented financial information” or “financial outlooks” within the meaning of applicable Canadian securities laws, such information is being provided to demonstrate the anticipated market penetration and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking statements generally, are, without limitation, based on the assumptions and subject to risks as set out above under the heading “Forward-Looking Statements”. The Company’s actual financial position and results of operations may differ materially from management’s current expectations and, as a result, the Company’s revenue and expenses may differ materially from the revenue and expenses profiles provided in this presentation. Such information is presented for illustrative purposes only and may not be an indication of the Company’s actual financial position or results of operations. THIRD PARTY INFORMATION This Presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sources referred to in this presentation, or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying assumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such information. USE OF NON-GAAP MEASURES Adjusted EBITDA is a non-GAAP measure used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management defines adjusted EBITDA as loss and comprehensive loss from operations, as reported, before interest, tax, depreciation and amortization, and adjusted for removing share-based payments, unrealized gains and losses from short term investments and other one-time and non-cash items including impairment losses. Management believes adjusted EBITDA is a useful financial metric to assess its operating performance on an adjusted basis as described above. A description of these financial measures, including a reconciliation of such measures, to the extent possible, against the most directly comparable IFRS measure, can be found at page 9 of the management’s discussion and analysis of the Company for the three and nine month period ended August 31, 2019. TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 3
OUR MISSION
Our mission is to become the
world’s most trusted partner for
best-in-class cannabis extraction,
testing, formulation, product
development and manufacturing.
RECENT ANNOUNCEMENTS
• First international shipments of white label
products to customers in Australia expected
Q2 2020
• Record financial performance reported for the
fourth quarter and fiscal year 2019
VALENS | 4
BEST POSITIONED TODAY,
ACCELERATING INTO TOMORROW
EXTRACTION AND NEXT GENERATION PRODUCT CAPABILITIES DRIVE OUR ADVANTAGE
THE VALENS COMPANY IS ACCELERATING INTO CANNABIS 2.0
BROADENING END-PRODUCT AND DELIVERY CAPABILITIES
Broadening our white label offerings to become the largest third-party cannabis product
development and manufacturing company in the world
OPERATING WITH GLOBAL STANDARDS
Readying our business model for exportation to high value international markets
PROVIDING UNIQUE, CUSTOMIZED OFFERINGS
Further developing our unique, IP based product technology platform offering customized
white label services
INCREASING CAPACITY
Increasing capacity in 2020 from 425,000 to 1,000,000 KG of extraction capacity for hemp
and cannabis to keep up with expected demand
BUILDING REPUTATION
Gaining more partnerships and establishing ourselves as the trusted partner of choice by
various leading licensed producers and CPG companies
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 5
OUR BELIEF
THE MARKET WILL BE DOMINATED BY OIL BASED PRODUCTS
29% 25%
OIL BASED PRODUCTS
53% 47%
71% 75% FLOWER BASED PRODUCTS
2016 2018 FUTURE*
OTHER PRE ROLLS
VAPE PENS FLOWER
20%
11%
EDIBLES Source: Cowen Equity Research Report
10% (US Market Share)
*Valens forward-looking prediction in the
short-term based on market research
CONCENTRATES
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 6
VALENS IN THE VALUE CHAIN
UNLOCKING HIGHER MARGINS FOR OUR CUSTOMERS
PRODUCT BRANDING RETAIL
MANUFACTURING & SALES
G
IN
ST
TE
BS
LA FORMULATION
S
L EN
VA
PURIFICATION
OUR FOCUS:
PROVIDE QUALITY PRODUCTS
THAT OFFER CUSTOMIZED
USER EXPERIENCES TO HELP
OUR CUSTOMERS BUILD
DIFFERENTIATED, HIGH VALUE
BRANDS
CULTIVATION EXTRACTION
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 7
EXTRACTION
CONCEPT IS SIMPLE, QUALITY EXECUTION IS COMPLEX
DRIED
CANNABIS CRUDE OIL REFINEMENT CROMATOGRAPHY
OR OIL OIL (DISTILLATE) /SEPARATION
HEMP WINTERIZATION (ISOLATE)
OIL
EXTRACTION
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 8
EXPERTISE THAT DIFFERENTIATES
DIVERSITY CREATES COMPETITIVE ADVANTAGE
LESS COMMODITIZATION
Super/Sub
Ethanol Hydrocarbon Solvent-less Terpene
Critical CO2
Capsules Capsules Concentrates Rosin Add back for
Tinctures Tinctures Vapes Hash experience, flavour
Vapes Vapes Shatter/Wax Live Resin and smell
Topicals Topicals Full Spectrum Full Spectrum
Beverages Beverages
Edibles Edibles
Full Spectrum Others
ONE SIZE DOES NOT FIT ALL: HIGH QUALITY PRODUCTS NEED CUSTOMIZED EXTRACTION PROCESSES
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 9
BUSINESS STRATEGY
DELIVERING SUSTAINABLY STRONG EBITDA MARGINS THROUGH THE CYCLE
GLOBAL MAR DESIGNED TO
TOLL KE T REVENUE
PRO TRANSITION
CESS WHITE LABELING & FORM
ING ULAT AS THE
ION
MARKET
EVOLVES
EBITDA MARGIN
HYD R O
CARBON
/SOLVEN
TLESS
E THANO
L
CO2
• • •
• •
• • •
• •
• • •
•
TSXV:VLNS, OTC:VLNCF VALENS | 10EXTRACTION EXPERTISE FACILITATES
ROLL-OUT OF WHITE LABEL
EVOLUTION TO WHITE LABEL WELL UNDERWAY
WH
11) I TE
N( LA
C TI O BE
A L (1
TR 1)
EX
+3 OTHERS
NEXT GENERATION
HIGH QUALITY EXTRACTION
PRODUCT DEVELOPMENT
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 11TESTING
WE ARE SETTING THE STANDARD
FIRST ISO 17025 ACCREDITED LAB
• Consistent use of validated methodologies
CAN PERFORM ANALYSES IN AS LITTLE AS 24 HOURS
• Positioning Valens as the go-to lab with turn arounds 4-5x faster than other leading labs
PUBLISHING FULLY VALIDATED, STANDARDIZED,
AND TURNKEY SOLUTIONS FOR THE GLOBAL CANNABIS INDUSTRY
• Global recognition for methodologies and putting Valens’ name at the forefront of analysis
ADDITIONAL REVENUE SOURCE THROUGH THIRD-PARTY LAB TESTING
• Consistent high margin revenue source, mandated by Health Canada
NAMED A “CENTER OF EXCELLENCE IN PLANT BASED SCIENCE” BY
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 12FORMULATIONS
CUSTOMIZED USER EXPERIENCES NEED CUSTOMIZED PRODUCT FORMULATIONS
VALENS IS BUILDING A DIVERSE IP PORTFOLIO THAT
SPANS ACROSS ALL TYPES OF PRODUCTS AND SERVICES 100+ TERPENE FORMULATIONS
Beta Alpha
Pinene Pinene
5% 3%
SORSE EMULSION Beta
Linalool
Caryophyllene
7%
30%
CANNABINOID AND
TERPENE ISOLATION
Humulene
15% PINEAPPLE
EXPRESS*
CONCENTRATES
FORMULATIONS
EXTRACTION Limonene
Myrcene
METHODOLOGIES 18%
23%
TESTING
METHODOLOGIES *Example of the terpene
make-up of the cannabis strain,
Pineapple Express
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 13FORMULATIONS
SORSE EMULSION TECHNOLOGY
• Shelf stable for over 2 years.
• Zero cannabis taste, colour or odour.
•
• bioavailability when consumed.
• Resistant to temperature change including boiling,
freezing and thawing.
• Faster onset making it the safer and more trusted option.
Observed in 5-15 minutes versus normal 30 minutes – 2 hours.
• Observed in 45 minutes – 2 hours versus normal 4 – 8 hours.
• Proprietary licensed formula.
• Exclusive rights in Canada, Mexico, EU, UK and Australia.
• Access to non-exclusive rights globally.
The global market for
cannabis-based drinks is
CURRENT VALENS’ expected to be worth
US$1.4 billion by 2024
PROBLEMS SOLUTIONS - Prohibition Partners
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 143RD PARTY PRODUCT DEVELOPMENT & MANUFACTURING
THE FUTURE OF CANNABIS CONSUMPTION
VALENS 1.0 VALENS 2.0
PHASE 1 DECEMBER 2019 PHASE 2 H2 2020
Tinctures
Beverages Edibles
Two Piece
Caps
Concentrates Topicals
Soft Gels
More Innovative
Vape Pens
Oral Sprays Products...
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 15FACILITY EXPANSION FOR PRODUCT DEVELOPMENT
IP BASED PRODUCTS TO STRENGTHEN COMPETITIVE ADVANTAGE AND MARGINS
DAY 020
TO 2
230 CARION RD 180 + 230 CARION RD GTA FACILITY
EXTRACTION FOCUSED EXTRACTION WHITE LABEL FOCUSED WHITE LABEL
CRUDE CRUDE CAPSULES FORMULATION
DISTILLATE DISTILLATE TINCTURES EMULSION
FULL SPECTRUM FULL SPECTRUM VAPE GOODS BEVERAGE CO-PACKING
ISOLATE ISOLATE SPRAYS EDIBLES CO-PACKING
FORMULATION FORMULATION EDIBLES
EMULSION EMULSION BEVERAGES
TOPICALS
MOST OUTPUT MOST OUTPUT
LEAVING AS LEAVING AS A HIGHER
BULK OIL VALUE PRODUCT
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 16ACTION PLAN
12 MONTH GOALS
1 DELIVER ON
2
EXISTING CONTRACTS
KELOWNA +
Optimize existing capacity
GTA EXPANSION
to maximize margin
Speed to market to
maintain advantage
3
LAUNCH NEXT
GENERATION PRODUCTS
Build IP portfolio GLOBAL EXPANSION
4
Target markets & opportunities
Differentiated product that maximize ROI
offering
Export globally with EU
GMP certification
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 17INTERNATIONAL EXPANSION
ADVANCED DISCUSSIONS IN KEY MARKETS GLOBALLY
EU
U N I T E D S TAT E S CBD
MEXICO
COLUMBIA
PERU
BRAZIL
U R U G U AY
AUSTRALIA
GLOBAL MEDICAL MARKET
ALONE ESTIMATED AT $180B
CURRENT AREAS OF INTEREST ANNUALLY IN 10-20 YEARS*
LONGER TERM OPPORTUNITIES
*Source: Eight Capital Research
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 18FINANCIALS & OUTLOOK FIRMLY INTO OUR GROWTH PHASE; FOCUSED ON UNLOCKING SHAREHOLDER VALUE CAPITALIZATION TABLE (In CAD$MM, Unless otherwise noted) Share Price: As of January 31, 2020 $3.36 Basic Shares O/S 126.0 Full Diluted Shares O/S 130.9 Equity Value 439.9 Cash and Cash Equivalents 58.7 ITM Securities 8.7 Debt 0.0 Enterprise Value 372.5 Average Analyst Estimates CY2019 CY2020 CY2021 CY2022 Revenue 58.1 170.7 225.5 304.9 Adjusted EBITDA 27.4 74.7 99.9 116.2 EPS -$0.06 $0.34 $0.51 $0.45 Implied Multiples CY2020 CY2021 CY2022 Valens EV/EBITDA 5.0x 3.7x 3.2x Pharma CMO Average EV/EBITDA* 12.3x 11.1x 10.8x Packaged Foods CMO Average EV/EBITDA* 12.1x 11.5x 9.6x Canadian Cannabis Peer Average EV/EBITDA* 18.9x 18.9x 9.9x Valens P/E 9.9x 6.6x 7.5x Pharma CMO Average P/E* 21.3x 18.8x 16.9x Packaged Foods CMO Average P/E* 21.5x 19.6x 15.1x Canadian Cannabis Peer Average P/E* 30.4x 20.4x 17.8x Analyst Target Price Average (7 Analysts) $8.29 Implied Return Potential 147% Source: Company Filings, S&P Capital IQ Note: Shares outstanding and cash balance based on most recent quarterly financials; presented as Treasury Stock Method. Pharma CMO cohort includes: Catalent Inc., Perrigo Company PLC, Recipharm AB. Packaged Foods CMO cohort includes: Tate & Lyle PLC, J&J Snack Foods Corp., TreeHouse Foods Inc., Hilton Food Group PLC. Canadian Cannabis Peers refer to cohort on next slide. TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 19
LARGE DISCOUNT TO PEERS DESPITE STRONG EXECUTION
50x
40x
CY2020 EV/EBITDA
30x
20x
15x
10x
5x
0x
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Valens Canadian cannabis peer average
35x
30x
25x
CY2021 EV/EBITDA
20x
15x
14x
10x
5x
3x
0x
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Valens Canadian cannabis peer average
Canadian cannabis peer group includes: WEED, ACB, CRON, TLRY, APHA, HEXO, OGI, FLWR, TGOD, FIRE, EMH, ZENA, WMD, VIVO, NRTH, HVT, DN, WL, JWCA, LABS, NEPT and RTI.
Observations with no consensus estimates are excluded.
TSXV:VLNS, OTC:VLNCF | A WAR D E D TO P EX TR A CTION COMPA N Y VALENS | 20COMPETITIVE LANDSCAPE
NO. OF ANNOUNCED TOLL
11 3 7 2
PROCESSING AGREEMENTS*
NO. OF WHITE LABEL
11 2 4 0
AGREEMENTS*
CURRENT ANNUAL CANADIAN
425,000KG 200,000KG 300,000KG 56,000KG
EXTRACTION CAPACITY*
TYPES OF EXTRACTION* 5 2 1 1
ISO 17025 ACCREDITED
Y N N N
TESTING LAB*
EU GMP CERTIFICATION* PENDING N PENDING PENDING
ORGANIC CERTIFICATION* Y N Y N
CASH FLOW FROM
OPERATIONS ($CAD) -3.4M -10.0M -21.1M -19.2M
Per Latest Filed Quarter
NET INCOME ($CAD)
4.5M 5.6M 3.3M -6.9M
Per Latest Filed Quarter
ENTERPRISE VALUE ($CAD)
372M 273M 363M 99M
Per Comp Table Pg. 23
EV / EBITDA (2020)
5.0x 18.6x 6.6x n/a
Per Latest Filed Quarter
*Sourced from company presentations, latest filed quarters and news releases
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 21INVESTMENT
HIGHLIGHTS
Largest extraction Most diverse
company in Canada. extraction capabilities.
At 425,000 KG of capacity, Valens is equipped to service Providing customers with the widest variety of extraction
Canadian demand as well as the global markets with techniques which allows them to produce the largest range
efficiency at scale. of end products.
High High cashflow
margins. visibility.
Operating in one of the highest margin sub-sectors of the Substantial, reoccurring agreements with leading producers,
cannabis industry with low variability in costs. including Canopy, Tilray, HEXO, TGOD and Organigram
providing a clear revenue and cashflow path.
Proprietary technology Customized
and processes. product development.
Decades of experience have resulted in best-in-class Valens formulation and testing expertise allows for the production
proprietary extraction processes that are optimized to of a wide array of tinctures, capsules, concentrates,
produce consistently high quality products. vapes, topicals, beverages and edibles.
First mover In-house testing
advantage. laboratory.
Founded in 2012, Valens was granted the first Dealer’s Setting global standards, Valens labs was the first ISO
License to process cannabis. Our R&D and testing process 17025 accredited lab for cannabis analyses and is endorsed
allows us to quickly identify market trends and adapt to a by $100B+ Thermo Fisher Scientific as the Centre of -
changing landscape. Excellence in Plant Based Science.
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 22APPENDIX: COMP TABLE
Share Equity Enterprise EBITDA EPS EV / EBITDA P / EPS
Price Value Value 2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E
C$mm C$mm C$mm C$mm C$mm (x) (x) (x) (x) (x) (x)
Large Cap LPs
Canopy Growth Corporation C$29.80 $10,474 $8,725 ($294) ($17) $244 ($1.28) ($0.32) n/a nmf nmf 35.8x nmf nmf n/a
Aurora Cannabis Inc. C$2.50 $2,799 $3,204 ($12) $103 $358 ($0.21) ($0.15) $0.14 nmf 31.1x 8.9x nmf nmf 18.2x
Tilray, Inc. US$17.54 $2,402 $2,869 ($61) $42 $137 ($1.42) ($0.53) $0.66 nmf 68.7x 21.0x nmf nmf 35.1x
Aphria Inc. C$6.19 $1,656 $1,652 $77 $132 $171 ($0.11) $0.18 n/a 21.4x 12.5x 9.7x nmf 34.8x n/a
Cronos Group Inc. C$9.53 $3,534 $1,541 ($42) $67 n/a ($0.12) $0.12 $0.24 nmf 22.9x n/a nmf 82.9x 40.6x
OrganiGram Holdings Inc. C$3.42 $571 $589 $35 $64 $79 ($0.04) $0.13 $0.34 17.0x 9.2x 7.5x nmf 27.2x 10.1x
HEXO Corp. C$1.66 $476 $453 ($22) $5 $27 ($0.17) ($0.11) n/a nmf 99.7x 16.8x nmf nmf n/a
Average 19.2x 44.2x 16.6x nmf 31.0x 21.1x
Mid Cap LPs
The Flowr Corporation C$1.71 $234 $253 $3 $36 $70 ($0.11) $0.07 $0.18 90.6x 7.1x 3.6x nmf 24.4x 9.5x
The Supreme Cannabis Company, Inc. C$0.49 $174 $240 $31 n/a n/a n/a n/a n/a 7.8x n/a n/a n/a n/a n/a
The Green Organic Dutchman Holdings Ltd. C$0.68 $213 $190 ($15) $18 $70 ($0.10) $0.02 n/a nmf 10.4x 2.7x nmf 34.0x n/a
Zenabis Global Inc. C$0.14 $52 $133 n/a $68 n/a n/a n/a n/a n/a 2.0x n/a n/a n/a n/a
WeedMD Inc. C$0.76 $87 $122 $24 $51 n/a $0.10 $0.18 n/a 5.2x 2.4x n/a 7.6x 4.2x n/a
Average 34.5x 5.5x 3.2x nmf 20.9x 9.5x
Small Cap LPs
VIVO Cannabis Inc. C$0.37 $109 $94 ($1) $19 $40 ($0.05) $0.02 $0.06 nmf 4.9x 2.3x nmf 18.3x 6.1x
Emerald Health Therapeutics, Inc. C$0.30 $55 $75 ($19) ($11) ($5) ($0.21) ($0.09) n/a nmf nmf nmf nmf nmf n/a
Westleaf Inc. C$0.17 $58 $68 $10 $50 n/a n/a n/a n/a 7.1x 1.4x n/a n/a n/a n/a
Delta 9 Cannabis Inc. C$0.57 $50 $62 $3 $11 $14 ($0.04) $0.02 $0.05 18.2x 5.7x 4.5x nmf 38.0x 11.4x
Harvest One Cannabis Inc. C$0.14 $30 $29 $6 n/a n/a ($0.03) n/a n/a 5.3x n/a n/a nmf n/a n/a
Average 10.2x 4.0x 3.4x nmf 28.1x 8.7x
Extraction Companies
MediPharm Labs Corp. C$2.81 $393 $363 $55 $102 $115 $0.14 $0.32 $0.44 6.6x 3.6x 3.2x 20.8x 8.9x 6.5x
The Valens Company C$3.36 $440 $372 $75 $100 $116 $0.34 $0.51 $0.45 5.0x 3.7x 3.2x 9.9x 6.6x 7.5x
Neptune Wellness Solutions Inc. C$3.13 $297 $273 $15 $72 $97 ($0.38) $0.42 $0.70 18.6x 3.8x 2.8x nmf 7.5x 4.5x
Radient Technologies Inc. C$0.35 $95 $99 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average 10.1x 3.7x 3.1x 15.3x 7.7x 6.1x
Average all 18.4x 18.1x 9.4x 12.8x 26.1x 14.9x
Median all 7.8x 6.4x 4.5x 9.9x 24.4x 9.8x
Source: Company Filings, S&P Capital IQ, AltaCorp Capital
As of January 31st, 2020; shares outstanding based on most recent quarterly financials and adjusted for share issuance transactions and other significant publicly disclosed transactions; presented as
fully diluted with all in-the-money securities added to the equity value and cash proceeds added to diluted cash balance; N/D = Not Disclosed (1) Based on Analyst consensus estimates; (2) Valen’s
financial estimates are based on November 30th fiscal year-ends rather than calendar year-ends
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 23APPENDIX:
KEY MANAGEMENT (PART 1)
Tyler Robson, B.A. & Sc. Jeff Fallows LLB/MBA, CFA
President
Based on Mr. Robson’s impressive contributions to Mr. Fallows is an accomplished finance professional with over 17
The Valens Company, formerly Valens GroWorks, he was appointed years experience working on a wide range of financial advisory
CEO in May 2017 after previously serving as COO. Over the last mandates in the cannabis, consumer products and industrial
decade Tyler has worked extensively in cannabis science focusing products industries. He previously worked as a Managing
on research and development, proprietary extraction processing and Director at AltaCorp Capital Inc
medical application. Mr. Robson is seen as a thought-leader
throughout the industry and his expertise has shown through his
impressive client base at Valens where the Company has secured Everett Knight, CFA
EVP, Corporate Development and Capital Markets
agreements with some of the worlds most renowned cannabis
companies. Mr. Knight holds almost a decade of experience in Portfolio
Management and Investments. At Matco Financial, he launched
Chris Buysen, MPAcc, CPA, CA the first ever institutional long only cannabis fund in Canada and
managed a small cap fund, ranked #1 in its category. He is
Mr. Buysen has over 15 years of diverse financial experience known for his thought leadership and his expertise in analyzing,
working as a senior financial executive with many public and private lobbying, investing, advising, & consulting throughout the
organizations in a wide range of industries. During this time, he was cannabis value chain.
responsible for internal and external financial reporting, strategic
Paul Kunynetz
planning, treasury, tax, information technology, human resources,
General Counsel
financial controls and corporate governance.
Prior to joining Valens, Paul practiced law at McCarthy Tétrault in
Toronto where he gained extensive experience working on high
Chantel Popoff
profile and complex transactions. His practice focused on
mergers and acquisitions, franchisee/distribution, commercial
Ms. Popoff has over a decade of experience in managing 21+ transactions and private equity with an emphasis on the
Western Canadian retail pharmacy chains, including Shoppers automotive and cannabis industries.
Drug Mart. After her time in pharma, she spent over 6 years in
senior managerial roles in the Canadian natural health
food industry.
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 24APPENDIX:
BOARD & ADVISORS
Nitin Kaushal, CPA, CA Ashley McGrath
Director, Managing Director, Corporate Finance at PwC Canada. Director, President & Owner of Glencoe Developments Inc.
Mr. Kaushal has over 30 years of finance and investment expertise Mr. McGrath has been involved in real estate development for 14
including having held a number of senior roles with Canadian years, overseeing all aspects of the development business and
investment banks, private equity and venture capital industry. oversees the management of multiple development companies in
the commercial, residential and agricultural space.
Chris Irwin Deepak Anand
Director, Partner at Irwin Lowy LLP. Director, Co-Founder and CEO of Materia Ventures
Mr. Irwin advises a number of public companies on a variety of Mr. Anand is known as global leader in the cannabis sector for his
matters including continuous disclosure and regulatory matters, regulatory, political and industry knowledge. Prior to starting
reverse takeover transactions, initial public offerings and take over Materia he was the VP of Business Development & Regulatory
bids. Affairs at Cannabis Compliance Inc.
Chris Buysen, MPAcc CPA, CA Phil Donne
Director, CFO Advisor, Past President/CEO of Campbell Company of Canada,
Mr. Buysen has over 15 years of diverse financial experience Past CEO of Kellogg Canada
working as a senior financial executive with many public and Mr. Donne brings over 30 years of international brand
private organizations in a wide range industries. management, re-structures and bold brand and communication
initiatives including the launch of Vector cereal (the largest new
cereal product in 20 years).
Tyler Robson, B.Sc. Brett Channer
Director, CEO and Co-founder Advisor, CEO of Mass Minority, Past CEO of Saatchi + Saatchi
Mr. Robson has over a decade of cannabis R&D, plant innovation Mr. Channer has over 25 years of marketing industry experience.
and life sciences experience. He previously held the position He was responsible for leading Saatchi Canada to “Most Improved
of COO of Valens Agritech Ltd. “Top 100 Leaders in Health Care” Agency in Canada” as well as one of the Top 10 creative agencies
by IFAH. in Canada and becoming one of the top performing agencies for
growth in the Saatchi Network.
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 25APPENDIX:
ANALYST OUTLOOK
BROKER DATE RATING TARGET (C$)
AltaCorp Capital Inc. Dec 12, 2019 Outperform $10.25
Canaccord Genuity Jan 24, 2020 Speculative Buy $8.00
Desjardins Securities Inc. Dec 23, 2019 Buy $8.00
Eight Capital Nov 12, 2019 Buy $8.25
Haywood Securities Inc. Dec 23, 2019 Buy $7.75
Mackie Research Capital Corp. Oct 18, 2019 Buy $8.00
M Partners Inc. Dec 23, 2019 Buy $7.80
As of January 31, 2020 The Valens Company is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding the Company's performance made by
these analysts are theirs alone and do not represent opinions, forecasts or predictions of The Valens Company or its management. By reference to the information above, The Valens
Company does not imply its endorsement of or concurrence with any information, conclusions or recommendations as a result of analyst coverage.
TSXV:VLNS, OTC:VLNCF | A WARD ED TO P EX TR A CTION COMPA N Y VALENS | 26LOCATIONS
409 KING ST W
TORONTO, ONTARIO
230 CARION RD
KELOWNA, BRITISH COLUMBIA
CONTACT US
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