INVESTOR PRESENTATION | JULY 2019 - EUREKA93
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Presentation | July 2019
Disclaimer
FORWARD-LOOKING STATEMENTS
This presentation contains certain forward looking statements and forward looking information (collectively referred to herein as “forward looking statements”) within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as “could”, “should”, “can”, “anticipate”,
“expect”, “believe”, “will”, “may”, “projected”, “sustain”, “continues”, “strategy”, “potential”, “projects”, “grow”, “take advantage”, “estimate”, “well positioned”, “intend”, “plan”, “predict” or similar expressions suggesting future
outcomes, the results of which are uncertain. In particular, this presentation contains forward looking statements including, but not limited to, those relating to the implementation of operations, licensing and regulatory matters,
production, sales and revenue generation, market and industry trends, product launches and business opportunities, business strategies and competitive advantages. The forward looking statements regarding Eureka 93 Inc.
(“Eureka”, “we”, “us”, and “our”) are based on Eureka management’s current views, key expectations and assumptions regarding future events, plans and objectives, including anticipated financial performance, maintaining
necessary licenses to conduct Eureka’s business, its ability to cultivate and produce products , prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned activities, that there will be no adverse
regulatory or political developments with respect to hemp production, sales or consumption and the ability to obtain financing on acceptable terms, all of which are subject to change based on market conditions and potential
timing delays. Although management of Eureka considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect.
By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward
looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward looking
statements.
The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this presentation are made as of the date of this presentation and
PRM does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
Market and Industry Data
Certain information contained herein includes market and industry data that has been obtained from or is based upon estimates derived from third party sources, including industry publications, reports and websites. Third party
sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance or guarantee as to the accuracy or completeness of included data. Although the data
is believed to be reliable, Eureka has not independently verified the accuracy, currency or completeness of any of the information from third party sources referred to in this presentation or ascertained from the underlying
economic assumptions relied upon by such sources. Eureka hereby disclaims any responsibility or liability whatsoever in respect of any third party sources of market and industry data or information.
Other Disclaimers
This presentation is not, and under no circumstances is to be construed to be, a prospectus, offering memorandum, advertisement or public offering of any securities of Eureka, . Neither any securities regulatory authority in
Canada or elsewhere nor the United States Securities and Exchange Commission (the “SEC”) nor any state securities regulator has assessed the merits of the Corporation’s securities or has reviewed or made any determination as
to the truthfulness or completeness of the disclosure in this document. Any representation to the contrary is an offense.
This presentation is not, and is not intended to be, an offer to sell or solicitation of an offer to buy any security of Eureka and shall not constitute an offer, solicitation or sale of any securities of Eureka in any jurisdiction. This
presentation should not be relied on for the purposes of making an investment decision.
2
Investment Highlights
1. High-purity, High-quality Producer of CBD Extracts and Isolate
(1)
Up to 25,152,000 kg of Annual Biomass Processing Capacity
2. • Fully-funded Facility in Eureka, Montana
• Commissioning of New Mexico Extraction Facility in 2H 2019
Consumer Brand Architecture in Place with First Consumer Product Expected
3. to Launch in 2H 2019
Significant & Robust Late-Stage Sales Pipeline in Excess of 50 Customers -
4. Including Previously Announced Tilray
5. Applied to List Common Shares on the NASDAQ
(1) Subject to commissioning New Mexico Facility and additional unfunded CAPEX 3
Market Opportunity
$595B
(1)
$1.1T
(1)
Fitness & Mind-Body
Personal Care,
$575B Beauty & Anti-aging
(1)
Preventive & Personalized
Medicine and Public Health
(1) Global Wellness Economy Monitor – October 2018 4
Dynamic Market Change
Open Markets Strong Demand New Channels Marketing
& Regulation & New Products & Branding
5
Eureka93 is Positioned as the Leading Pure-play
CBD Company in North America
High-Margin
High-Volume
High-Quality
6
Ingenuity. From the ground up.
Cultivation Through Extraction Product Development Distribution
Partnership and Manufacturing
• Highest-quality American • High-output Extraction • Customer focused on health • Wholesale Products
Grown Hemp Facilities and wellness needs Currently in the Market
• Seeding, Direct Purchase and • High-volume Producer of • Creating Products with • Consumer Products
Tolling Agreements CBD Extracts and Isolate Functional Outcomes In-development
• Identified Biomass Supply • Proprietary Scientific • Natural-health Focused • Operations and
Strategy Insight and Technologies Manufacturing Expertise Distribution in the U.S.
7
Our North American Footprint
Eureka, Litchfield,
Montana Quebec
Ottawa,
Ontario
Windsor,
Ontario
Las Cruces,
New Mexico
8
Eureka, Montana Extractor
Eureka, Montana
(1) (2)
1,152,000 kg Annual Biomass Processing Capacity
7,500 sq. ft., of Expandable Facility
(2)
Q3 2019 Q4 2019
1,000 kg/month 2,000 kg/month
CBD Isolate CBD Isolate
(1) Annualized extraction capacity based on 96,000 kg per month. Currently extraction capacity of 48,000 kg per month
(2) Subject to facility expansion and additional CAPEX
9
Las Cruces, New Mexico
(1)
24,000,000 kg Annual Biomass Processing
Capacity
(2)
Extraction Facility Will Make Us One of the
Largest Producers in the U.S.
H1 2020
70,000 kg/month
CBD Isolate
(1) Annualized extraction capacity based on 2,000,00 kg per month. Currently facility is not in production
(2) Optimization of facility subject to additional unfunded CAPEX
Las Cruces, New Mexico Facility 10Comparable Projected Annual Biomass Processing
(1)
Capacity
~25% more capacity than
30
the next leading producer
25
(Millions kg)
20
15
10
5
- (2), (3)
Eureka93 Mile High Labs Paragon Processing Thar Process Radient Technologies MediPharm Labs
(1) Information as at May 14, 2019, sourced from public filings and other public information
(2) Subject to commissioning New Mexico Facility and additional unfunded CAPEX
(3) Eureka93 projected annual kg based on average monthly capacity
11Wholesale Products
Lead the market with high-quality CBD wholesale &
white label supply while maximizing ASPs
Wholesale market:
Full plant
• Currently shipping CBD
CBD isolate extract
• Expanding customer base
Full spectrum powder
• Expanding U.S. commercial distillate
team
• Expanding innovative
product mix
12Consumer Focused Products
Drive CBD market leadership in 2020 with consumer products
Consumer market:
• e-commerce platform —
planned launch 2H 2019
Luxury
• 2H 2019 — first consumer
product launched Beauty
General
Women’s Health
Sports Health
Wellness
13Natural-Product Development
& Manufacturing Facility
• State-of-the-art facility formulates
natural health products
• World-class customers
• 20 pharmaceutical-grade clean rooms
• Facility is certified by Health Canada and
FDA registered
• GMP and GMP for sport certifications by
the NSF
• Health and wellness product research and
development
36,000 sq. ft.
Located strategically near Canada/U.S.
border outside Windsor, Ontario
14Scientific and Regulatory Leadership
• Over 30-years of cross-disciplinary • Key memberships in U.S. hemp organizations
research
• Extensive business development experience
• Patented research model that mimics with large scale consumer product companies
human physiology
• Recognized industry authority
• Nutraceutical industry expertise from
R&D to commercialization
Unique Insights into Product Development with Functional
Outcomes
• Deep expertise navigating complex regulatory frameworks across the U.S.
• First-mover advantage developing products that meet regulatory requirements
• Ability to create health and wellness consumer products in a highly regulated environment
15Canadian Cannabinoid Strategy
• World-class Research and Innovation Centre in • 61,000 sq. ft. submitted for cultivation
Litchfield, Litchfield, Québec Ottawa, license
Quebec (1)
Ontario
• State-of-the-art facility will support vision of • Option to expand greenhouses up to
creating highly differentiated consumer products 540,000 sq. ft.
• Focused insights into nutraceutical products • 100 acres of available land for outdoor
targeted to specific consumer needs grow either proprietary or JV with
another licensed producer
• Development of in-house clinical practices to
support future clinical trial management within • Late stage applicant - Video Evidence
the commercialization process Package submitted to HC in Q4 2018
(1) Future site of our research and innovation facility subject to Quebec Government funding partnership
OTTAWA, ONTARIO 16
16Our Growth Strategy
Organic Growth Partnerships Acquisitions
01 02 03
• Demonstrated, consistent • Established brands in the beauty • Expand our product lines and
production output, quality and and consumer packaged goods market share as house of brands
innovation industry
• Enter new geographies
• Increased wholesale market share • Sporting organizations, drug plans
through expanded customer base and insurance companies • Enhance production capacity,
technology, scientific insight and
• Leverage our brand expertise to • U.S. & Canadian academic and public innovation
penetrate retail products space partnerships
• Expand our product lines as house
of brands
RIO GRANDE, SOUTH OF LAS CRUCES, NEW MEXICO 17
17Experienced and Aligned Leadership Team
David Rendimonti Robert Leaker Steven Archambault
Chief Executive Officer President and Chief Operating Officer Chief Financial Officer (CPA, CA)
Mr. Rendimonti has a 30-year track record leading top Mr. Leaker leverages a unique background in science, Mr. Archambault is an accomplished finance executive with
brands in the life sciences sector at some of the world’s engineering and business finance at organizations such as more than two decades of experience at private and public
most prominent healthcare organizations, including Suncor, CIBC and Meridian Credit Union, and also brings companies, including AXIS Capital Holdings Limited (NYSE),
Johnson & Johnson and Wyeth Pharmaceuticals. significant experience in creating and commercializing new International Datacasting Corporation (formerly on TSX)
business ventures. and Novra Technologies Inc. (TSX-V).
Peter Geimer Patrick McGrade Leslie Cooke-Bithrey
Chief Brand Officer General Counsel and Chief Administrative Officer Chief Talent Officer
Mr. Geimer is a results-driven sales leader with more than 20 With senior experience in the pharmaceutical and quick-service Ms. Cooke-Bithrey is a senior talent leader with more than
years of experience developing world-class brands and restaurant industries with RBI and GlaxoSmithKline, and a 20 years of experience maximizing organizational
coaching commercial teams to market leadership in the strong background in legal, regulatory, communications and performance through people at private and public
pharmaceutical, biomedical, health and wellness sectors at government relations, Mr. McGrade has built and led teams to companies such as Carter’s Inc., Shoppers Drug Mart and
organizations such as Eli Lilly, Pfizer, Bioventus and Roche. manage risks in complex, ever-changing environments. The TDL Group Corp.
18Cap Table
Eureka93 Capitalization Table(1) CSE: ERKA
Common Shares Outstanding 73,138,424
Convertible Securities 4,925,530
Stock Options Outstanding 6,589,926
Warrants Outstanding* 13,401,857
Diluted Shares Outstanding 98,055,737
Directors and Officers Ownership ~42%
Total Debt (USD) $45,969,000
Preferred Shares (USD) $2,698,000
*6,749,912 Warrants @ USD $1.71(2) Total Potential Cash received at exercise:
~$11M
1) Updated as of June 27, 2019
2) USD:CAD rate 1.313
19Ingenuity. From the ground up.
Investor Presentation 20You can also read
