PREMIUM MEDICAL CANNABIS POWERED BY SUNLIGHT
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PREMIUM MEDICAL CANNABIS
POWERED BY SUNLIGHT
Q3 2017
Investor Presentation
April 13,
PREMIUM MEDICAL 2017
CANNABIS
POWERED BY SUN
DISCLAIMER
This documentation is a presentation (the “Presentation”) of general background information about Aphria Inc.’s (“Aphria”) activities current as of April 13, 2017. It is information in a summary form and does
not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular
investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.
This Presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for securities nor shall it or any part of it form the basis of or be relied on in connection with, or
act as any inducement to enter into, any contract or commitment whatsoever. Recipients of this Presentation who are considering acquiring securities of Aphria are reminded that any such purchase or subscription
must not be made on the basis of the information contained in this Presentation but are referred to the entire body of publicly disclosed information regarding Aphria.
The information contained in this Presentation is derived solely from management of Aphria and otherwise publicly available information concerning Aphria and does not purport to be all-inclusive or to contain all
the information that an investor may desire to have in evaluating whether or not to make an investment in Aphria. The information has not been independently verified and is subject to material updating, revision
and further amendment, and is qualified entirely by reference to Aphria’s publicly disclosed information.
No representation or warranty, express or implied, is made or given by or on behalf of Aphria or any of its affiliates, directors, officers or employees as to the accuracy, completeness or fairness of the information or
opinions contained in this Presentation and no responsibility or liability is accepted by any person for such information or opinions. Aphria does not undertake or agree to update this Presentation or to correct any
inaccuracies in, or omissions from, this Presentation that may become apparent. No person has been authorized to give any information or make any representations other than those contained in this Presentation
and, if given and/or made, such information or representations must not be relied upon as having been so authorized. The information and opinions contained in this Presentation are provided as at the date of this
Presentation. The contents of this Presentation are not to be construed as legal, financial or tax advice. Each prospective investor should contact his, her or its own legal adviser, independent financial adviser or
tax adviser for legal, financial or tax advice.
Certain statements in this Presentation may constitute forward-looking information, including future-oriented financial information and financial outlooks, within the meaning of applicable securities laws. Forward-
looking information may relate to Aphria’s future outlook and anticipated events or results and may include statements regarding Aphria’s financial results, future financial position, expected growth of cash flows,
business strategy, budgets, projected costs, projected capital expenditures, taxes, plans, objectives, potential synergies, industry trends and growth opportunities. Often but not always, forward-looking information
can be identified by the use of words such as “anticipate”, “believe”, “expect”, “project”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “might”, “target”, “plan” and other similar expressions or
variations (including negative variations) of such words and phrases. Forward-looking information contained in this Presentation is based on certain assumptions regarding 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. Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of Aphria to be materially different from any future results, performance or achievements 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 involving medical marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the medical
marijuana industry in Canada generally, income tax and regulatory matters; the ability of Aphria to implement its business strategies; competition; crop failure; currency and interest rate fluctuations, and the other
risks discussed under the heading “Risk Factors” in Aphria’s final short form prospectus dated February 17, 2017. The foregoing factors are not intended to be exhaustive.
Although Aphria has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date hereof and Aphria and its directors, officers
and employees disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. 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, you should not place undue reliance on forward-looking
statements due to the inherent uncertainty therein. All forward-looking information is expressly qualified in its entirety by this cautionary statement.
Forward-looking information and other information contained herein concerning management’s general expectations concerning the medical marijuana industry are based on estimates prepared by management
using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which management believes to
be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware of any
misstatements regarding any industry data presented herein, industry data is subject to change based on various factors.
This Presentation may not be reproduced, further distributed or published in whole or in part by any other person. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in any
other jurisdiction which prohibits the same except in compliance with applicable laws. Any failure to comply with this restriction may constitute a violation of applicable securities law. Recipients are required to
inform themselves of, and comply with, all such restrictions or prohibitions and Aphria does not accept liability to any person in relation thereto.
APHRIA INC. | Q3 INVESTORS PRESENTATION 3
Highly experienced
management team
Vic Neufeld Cole Cacciavillani John Cervini
Chief Executive Officer Co-Founder & Co-Founder &
VP. Growing Operations VP. Infrastructure + Technology
20+ Years in pharma 35+ Years in agri-business 20+ Years in agri-business
CEO of Jamieson Laboratories 1993-2014 Greenhouse industry pioneer and veteran Fourth generation greenhouse grower
Demonstrated vision, growth & performance First-hand knowledge of Aphria’s greenhouses Proven growth and expansion track record
Seed shares represent ~ 20% of outstanding float
APHRIA INC. | Q3 INVESTORS PRESENTATION 4
Production costs
per gram
14.00
Other Public LPs
$8.80 $8.80
9.00
8.50
8.00
7.50
7.00
6.50
6.00
5.50
5.00 $4.47
$4.19
4.50
4.00
3.50 $2.81
3.00
2.23
2.50 2.07
1.80 1.85 1.73 $1.72
2.00
1.23 1.31
1.50 1.15
1.00
0.50
0.00
Q4 - 16 Q1 - 17 Q2 - 17 Q3 - 17 Competitor #1 Competitor #2 Competitor #3
Cash All-in
All-in costs equal to cost of sales (excluding any fair value of biological assets adjustments) divided by grams sold in quarter.
Cash costs equal to cost of sales less amortization reported in cost of sales, all divided by grams sold in quarter.
Competitor info based on SEDAR filed financial results for reporting periods in August, September & October 2016. APHRIA INC. | Q3
Q4 INVESTORS PRESENTATION 5
Unique cost savings
CAPEX benefit
NEW GREENHOUSE BUILD
OR RETROFIT
$55 square foot THEM APHRIA
INDOOR GROW
$250 - $300 square foot
Production Costs
FERTILIZER SAVINGS ELECTRICAL SAVINGS =
• Aphria’s cost - $0.005 / L • Aphria’s annual electrical
costs $5.50 / sq. ft.
• Competitor’s fertilizer
cost - $0.22 / L • Indoor grower’s annual
electrical costs $65.00 / sq. ft.
• Aphria’s costs are
2% of our competitors • Aphria’s costs are
8% of our competitors*
3X – hours usage 2X – light density 2X – Cooling
* - Ontario based APHRIA INC. | Q3
Q4 INVESTORS PRESENTATION 6
Licence and
capabilities
EXISTING LICENCE - expires September 26, 2017
6,000 kg of dried cannabis (production)
6,000 kg of dried cannabis (sales)
3,000 kg of cannabis oil
PRODUCTION CAPABILITIES
2,500 kg of dried cannabis (pre-Part II expansion)
8,000 kg of dried cannabis (post-Part II expansion)
600 bottles @ 60 mL per bottle per day (full capacity – two machines)
• Consumes 6 kg of dried cannabis per daily production (3,000 kg per year)
• Assumes production utilizing dried bud only
APHRIA INC. | Q3 INVESTORS PRESENTATION 7
Capacity for future
(existing footprint)
PART II PART III PART IV
Project Cost $ 10,000,000 $ 24,500,000 $ 137,000,000
Incremental greenhouse growing (sq ft) 57,000 200,000 700,000
Cumulative greenhouse growing (sq ft) 101,000 301,000 1,001,000
Cost per sq ft greenhouse $ 55 $ 55 $ 50
Incremental infrastructure (sq ft) 22,000 55,000 202,250
Cumulative infrastructure (sq ft) 35,043 90,043 292,293
Cost per sq ft infrastructure $ 312 $ 245 $ 504
Incremental production capacity (kg) 5,500 14,000 53,000
Cumulative production capacity (kg) 8,000 22,000 75,000
Estimated completion date COMPLETE SEPTEMBER 2017 JULY 2018
APHRIA INC. | Q3 INVESTORS PRESENTATION 8
Two pronged
sales strategy
RETAIL SALES
• Aphria patients
Two Pronged
(~70% margin) Growth Strategy
WHOLESALE SHIPMENTS RETAIL
• Sale of bulk product to other
Canadian Licensed Producers
(~50% margin but no costs WHOLESALE
below the line)
APHRIA INC. | Q3 INVESTORS PRESENTATION 9
Recreational
outlook
? APHRIA INC. | Q3 INVESTORS PRESENTATION 10Investment
highlights
License to sell
medical marijuana
High growth provides critical
barrier to entry
potential
Largest
footprint in Low costs
the industry underpin
attractive cash
flow potential
Established Significant near
operations and and mid-term
experienced opportunities for
management growth
Well
capitalized
APHRIA INC. | Q3 INVESTORS PRESENTATION 11Aphria at
a glance
BRANDING
CannWay Pharmaceuticals Ltd.
CannaRoyalty
Tokyo Smoke
INNOVATION
TECHNOLOGY Oil capsules
MassRoots Topicals
Resolve Digital Health Nutraceuticals
GROWING
OPERATIONS
Leamington (252 acres)
265 Talbot Road (36)
269 Talbot Road (11)
SCIENCE INVESTMENT
239 Talbot Road (5)
Kalytera Therapeutics, Inc. Cannabis Investment Fund
521 Mersea Road 8 (200) Bodhi Research / KonKussion CRHC
PhyTo Pain Copperstate Farms
Arizona (40 acres) Medlab (Australia) Green Acre Capital
Copperstate Farms (10%) Liberty Health Sciences Inc.
(pending RTO)
APHRIA INC. | Q3 INVESTORS PRESENTATION 12APPENDIX A
Financials
APHRIA INC. | Q3 INVESTORS PRESENTATION 13Q3 Results
Q3 - 2017 Q2 - 2017
Revenue (000’s) $ 5,118.5 $ 5,226.6
Kilograms sold 652.7 639.0
“All-in” cost of goods sold / gram $ 2.23 $ 1.85
Cash cost to produce / gram $ 1.73 $ 1.31
Adjusted gross margin 70% 77%
APHRIA INC. | Q3 INVESTORS PRESENTATION 14Reconciling net loss
& net loss per share
(Quarter 3 - ended February 28, 2017)
Revenue 5,118,516
Cost of sales
Cost of goods sold 1,300,029
Amortization 236,175
Change in biological assets 14,243
Cost of sales 1,550,447
Gross margin 3,568,069
Expenses
General and administrative 1,230,626
Under IFRS margins
Selling, marketing and promotion 1,255,976 are 69.7% after excluding
Share-based compensation 1,854,577
Research & development 96,134 non-cash IFRS adjustments
Amortization
Impairment of intangible asset
263,055
3,500,000 Gross Margins are 70.0%
8,200,368
Income from operations (4,632,299)
Gain on long term investments 8,880,308
Other items 702,241
Net income and comprehensive income 4,950,250
Weighted average number of common shares-basic 111,976,759
Earning per share-basic and diluted $0.04
APHRIA INC. | Q3 INVESTORS PRESENTATION 15Equity
STRONG WELL-CAPITALIZED
BALANCE SHEET
(Quarter 3 - ended February 28, 2017)
STRONG BALANCE SHEET • Working capital: $123.1 million
WITH $84.3 MILLION
IN CASH POSITION • Inventory: 643 Kilograms (or kilogram equivalents)
CAPITAL STRUCTURE
Amount Percentage Expiration
Common Shares Outstanding 124,074,220 92.6% -
Stock Options @ $0.60 2,550,000 1.9% June 2, 2019
Stock Options @ $0.85 - $1.19 1,380,000 1.0% October 2017 to September 2020
Stock Options @ $1.20 - $1.67 646,500 0.5% November 2018 to June 2021
Warrants - RTO @ $1.50 3,111,793 2.3% December 2, 2019
Warrants - Bought Deal @ $1.75 464,080 0.3% December 10, 2018
Warrants @ $3.14 200,000 0.1% September 26, 2021
Stock Options @$3.00 - $5.72 1,690,000 1.3% November 2, 2019 to January 2020
Fully Diluted Shares 133,916,593 100.0%
APHRIA INC. | Q3 INVESTORS PRESENTATION 16You can also read
