SOL Global Provides Audited Financials for Year Ended November 2020

Rhea-AI Summary

SOL Global Investments Corp. (CSE: SOL, OTCPK: SOLCF) reports significant financial recovery for the year ended November 30, 2020, achieving a net income of $98 million, compared to a $103 million loss in 2019 — a positive shift of $201.4 million. Investment gains totaled $139 million, up from a $113.2 million loss the previous year. NAV per share rose to $3.51 from $1.70. Looking ahead, estimated NAV for Q1 2021 is projected between $6.40 and $7.80. SOL Global continues to navigate challenges due to the COVID-19 pandemic, maintaining confidence in its operational resilience.

Positive

• Net income rose to $98 million from a loss of $103 million in 2019.
• Total investment gains of $139 million for the year, up from a loss of $113.2 million.
• NAV per share increased to $3.51 from $1.70.
• Estimated NAV for Q1 2021 projected between $6.40 and $7.80.

Negative

• None.

SOL Global Investments Corp. ("SOL Global" or the "Company") (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) is pleased to provide its investors with audited financials for the year ended November 30, 2020 and a general operational update concerning the Company’s assets and investments. All figures in this press release are in Canadian dollars, unless otherwise indicated.

Audited Year-End Results

• For the year-ended November 30, 2020, the Company recorded a positive net income of $98 million VS Year-end November 30, 2019 loss of ($103) million. This represents a favourable change of $201.4 million.
• Total gain from investments totalled $139.0 million for the year-ended November 30, 2020, compared to loss of ($113.2) million for the eight-month period ended November 30, 2019. This represents a favourable change of $252.2 million between periods.
• The Net Asset Value (“NAV”) per share is equal to $3.51 at November 30, 2020 VS $1.70 at November 30, 2019.
• SOL Global has significantly strengthened its asset base as compared to previous years when market multiples were higher. The gains reported in the financial statements are reflective of material operational improvements and growth in the underlying investments.

The Company’s financial statements for the quarter ended February 28, 2021 will be released on April 30, 2021

• Forward looking guidance into the Company’s Q1 results:
  • The reverse takeover transaction of Majesta Minerals Inc. (“Majesta”) by Verano Holdings LLC (“Verano”), resulted in a significant portion of the approximately 25.2 million shares received being freely-tradeable.
  • Bluma Wellness Inc. (“Bluma”) announces sale to Cresco Labs Inc. (“Cresco Labs”)
  • The stock of Engine Media Holdings Inc. (formerly Torque Esports Corp.) (“Engine Media”) gained over 60%
• The estimated NAV is expected to be between $6.40 and $7.80
  • In calculating this preliminary conservative range, significant discounts were applied as fair value adjustments for lack of liquidity and trade restrictions, minority control positions, and other relevant factors. This range is an estimate and may differ from the final Q1 results.

Verano Operational Update

• On February 11, 2021, Verano, the Company’s largest core investment holding, completed its merger with Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, RVC 360, LLC and affiliated companies. Concurrent with the completion of the merger, Verano completed a reverse takeover of Majesta. The company resulting from the merger and reverse takeover transactions is operating under the name “Verano Holdings Corp.” (the “Combined Company”) and the common shares of the Combined Company have begun trading on the Canadian Securities Exchange (the “CSE”) under the ticker (CNSX:VRNO). The Combined Company has also raised $100 million at a price of $28.50 per share. The Combined Company has active and planned operations in 14 states with 690,000 square feet of cultivation space across 8 facilities. It operates 46 active retail locations and has plans to open an additional 30 retail locations in the near future.

Bluma Wellness Operational Update

• As of February 28, 2021, Bluma operates seven (7) retail locations in the state of Florida and generates more than USD$2.7 million per month in revenue. On January 14, 2021, Bluma announced that it had signed a definitive agreement to be acquired by Cresco Labs (CSE:CL) (OTCQX:CRLBF) in an all stock transaction valued at USD$213 million. Under the terms of the transaction, shareholders of Bluma will receive 0.0859 of a subordinate voting share of Cresco Labs for each common share of Bluma (each whole share, a “Bluma Share”) held (the "Exchange Ratio”). The Exchange Ratio implies a price per Bluma Share of approximately USD$1.12, representing a premium of approximately 29% based on the closing price of Bluma Shares on the CSE as of January 13, 2021.

Other Highlights

• On January 8, 2021, Engine Media reported its results for the year ended August 31, 2020. Engine streamlined its operation throughout the year to focus on core initiatives. It also settled $10.7 million of convertible debentures to decrease its debt burden. In preparation of its intended up-listing to the NASDAQ Capital Markets (“NASDAQ”), it raised $15 million in February 2021. Engine Media is traded publicly under the ticker symbol (TSX-V: GAME) (OTCQB: MLLLF).

• On March 15, 2021, the Company announced its first green tech investment in award-winning electric motorcycle company Damon Motorcycles (“Damon”). Damon recently raised USD$30 million after completing a bridge financing round led by SOL Global, Benevolent Capital Partners, LLC, Zirmania Investments Limited, and other investors. SOL Global invested CAD$6.1 million into Damon.

• Update on Litigation with lender, 1235 Fund LP: As previously disclosed, the Company commenced litigation in New York against its lender seeking, among other relief, a declaration that the lender is only entitled to have a $50 million non-convertible debenture (the “Debenture”) repaid in cash, and not in Verano shares owned by the Company with a current market value of more than $350 million. Subsequently, the lender issued a claim against the Company and others in Ontario for repayment of the Debenture through Verano shares or in the alternative damages of not less than $550 million. The Company anticipates moving to stay the Ontario claim on the basis that the issues are already before the New York courts.

• As announced on March 2, 2021, the Company intends to commence a normal course issuer bid (the “NCIB”) immediately after the release of the financial statements. Under the NCIB, the Company may purchase up to 2,737,805 of the Company’s common shares (the “Common Shares”), representing approximately 5% of its issued and outstanding Common Shares. All Common Shares purchased under the NCIB will be purchased on the open market through the facilities of the CSE and will be at the prevailing CSE market price for the Common Shares at the time of purchase. Common Shares acquired by the Company under the NCIB are being purchased for cancellation.

COVID-19 Update

SOL Global and its investments and portfolio companies have continued to deliver for both clients and shareholders despite challenges in the overall cannabis space and uncertain market conditions caused by the ongoing COVID-19 pandemic. SOL Global’s portfolio companies and companies in which they retain a non-controlling economic interest, including Bluma have adapted to the current environment through the continued scale-up of existing Florida cannabis production facilities, the continued expansion of Bluma’s operating subsidiary, One Plant Florida’s, already robust home- and curbside-delivery network and online ordering system in Florida, and the continued oversight of strategic business opportunities. SOL Global remains confident that it will continue to weather the COVID-19 storm and will emerge from the pandemic as a strengthened leader in the larger cannabis marketplace.

About SOL Global Investments Corp.:

SOL Global is a diversified investment and private equity holding company engaged in the small and mid-cap sectors. The Company’s investment partnerships range from minority positions to large strategic holdings with active advisory mandates. The Company’s seven primary business segments include Retail, Agriculture, QSR & Hospitality, Media Technology & Gaming, and New Age Wellness.

Non-IFRS Financial Measures

This press release includes references to net asset value, which is a financial measure that does not have a standardized meaning prescribed by IFRS. Net asset value is calculated as the value of total assets less the value of total liabilities at a specific date. The Company believes this non-IFRS measure does not only provide management with comparable financial data for internal financial analysis but also provides meaningful supplemental information to investors. In particular, management believes this financial measure can provide information useful to its shareholders in understanding the performance of the Company and may assist in the evaluation of its business relative to that of its peers. Investors are cautioned that this non-IFRS measure should not be construed as an alternative to the measurements calculated in accordance with IFRS as, given the non-standardized meaning, it may not be comparable to similar measures presented by other issuers.

Cautionary Statements

This press release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. The forward-looking information contained in this press release includes, without limitation, the estimated NAV of the Company in the Company’s first quarter financial statements, future operational plans of Verano, the completion of the arrangement transaction between Bluma and Cresco Labs, the commencement of the NCIB, the listing of Engine Media on the NASDAQ, and the Company’s expectations regarding its ability to operate and emerge from the COVID-19 pandemic.

Forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.

By their nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release including the inability or failure of the Company’s portfolio companies to execute their business and strategic plans as contemplated or at all, the failure by Bluma or Cresco Labs to obtain all requisite corporate, regulatory and court approvals for the arrangement transaction, the outcome of litigation in respect of the Debenture, changes in national or regional economic, legal, regulatory and competitive conditions and a resurgence in the COVID-19 pandemic.

Other risk factors include: the risks resulting from investing in the US marijuana industry, which may be legal under certain state and local laws but is currently illegal under U.S. federal law; the risks of investing in securities of private companies which may limit the Company’s ability to sell or otherwise liquidate those securities and realize value; reliance on management; the ability of the Company to service its debt; the Company’s ability to obtain additional financing from time to time to pursue its business objectives; competition; litigation; inconsistent public opinion and perception regarding the medical-use and adult-use marijuana industry; and regulatory or political change. Additional risk factors can also be found in the Company's current MD&A, which has been filed on SEDAR and can be accessed at www.sedar.com. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information.

The forward-looking information contained herein is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

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FAQ

What were SOL Global Investments' financial results for the year ended November 30, 2020?

SOL Global reported a net income of $98 million, compared to a loss of $103 million in 2019.

What is the Net Asset Value per share for SOL Global as of November 30, 2020?

The NAV per share increased to $3.51 from $1.70 as of November 30, 2019.

What are the projected NAV estimates for SOL Global in Q1 2021?

The estimated NAV for Q1 2021 is expected to be between $6.40 and $7.80.

How did SOL Global's investments perform compared to the previous year?

Total gains from investments were $139 million, a favorable change from a loss of $113.2 million the prior year.

What operational updates did SOL Global provide regarding its investments?

SOL Global continues to adapt operations amidst COVID-19 challenges, focusing on strategic growth and resilience.