Audacious Archives - Green Market Report

StaffSeptember 27, 2021
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4min5450

Cannabis companies are continuing to make money moves in this capital hungry industry. This week is kicking off with two companies making announcements.

RWB

Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF)reported that it has completed a refinancing of an aggregate principal amount of $18.6 million debentures (plus accrued interest to September 1, 2021) previously issued to an arm’s-length investor . The Prior Debentures were replaced with a new debenture in the principal amount of $19.3million. The New Debenture is unsecured, bears interest at the rate of 10% per annum, which accrues and is payable on the maturity date of January 21, 2023. The New Debenture is payable in full on a change of control.

Audacious

Australis Capital Inc., operating as Audacious (CSE: AUSA) (OTC: AUSAF)  announced that it has retained DelMorgan & Co., an internationally recognized investment banking firm, to assist it with its $15 million capital raise.

Terry BoothAUSA CEO, said, “DelMorgan is a highly regarded name with broad access to institutional investors active in the cannabis industry, our target audience for this raise. The funds will largely go to initiatives that we believe will enable us further to accelerate growth. We have a number of potential transactions and partnerships on our radar screen. These funds will help to capitalize on these opportunities and take AUSA to the next level. We look forward to working with the DelMorgan team on this fund raise and potentially other initiatives.”

Industry Capital

According to Viridian Capital as of the week ending September 17, the total capital raised year-to-date in 2021 of $9.36B is now approximately $1.1B lower than the same period in 2019 (the previous peak year); however, U.S. capital raises are far more robust. “U.S. equity raises are up by $448M (12%), and U.S. debt raises are up by $748M (76%) compared to 2019. Canadian raises are off sharply, with equity raises down 49% and debt down 12%,” said Viridian.

On September 15, 2021, Glass House Brands Inc. (NEO: GLAS.A.U)(OTCQX: GLASF) closed its acquisition of a 5.5 million square foot greenhouse facility in Southern California. That deal was valued at $233 million or $158 million without earnouts. It was comprised of $93 million upfront cash, $65 million in stock (6.5 million shares valued at $10/ share), $75 million in earn-outs (based on performance for the 12 months commencing 30 months after CAPEX is completed at the facility). The upfront cash consideration was reduced from $118 million to $93 million, preserving an additional $25 million in funds for buildout.

On September 17, 2021, Halo Collective Inc.  (NEO: HALO)(OTCQB: HCANF) closed an at-the-market offering raising approximately $15.6M between May 4, 2021, and September 17, 2021.


StaffAugust 30, 2021
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4min4750

Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) delivered its unaudited financial statements and management discussion and analysis for the first quarter of the fiscal year 2022 ending June 30, 2021. AUSA revenues rose 2,652% to $1.7 million over last year and was a sequential increase of 266%. The company said that the quarter included revenues from ALPS (acquired in March 2021) and management fees from GT. 

Australis recorded a net loss of $(9.5) million or $(0.04) per share. The company said the loss was driven primarily by a decrease during the first quarter in the price of Body and Mind (“BaM”) shares held. To date in Q2 FY 2022, BaM has rebounded back to the per-share price as of March 31, 2021.

Australis said that without the revaluation of the BaM shares, Adjusted EBITDA was comparable to a year ago. Adjusted EBITDA remained at a slight loss of $(0.01) per share or $(1.6 million), a sequential 15% improvement from $(1.8 million) in Q4 FY 2021. There were very few other impairment costs, as AUSA’s new management has completed most of the restructuring of various deals or disputes as of FY 2021.

“Continuing the strong performance recorded in Q4 of fiscal 2021, AUSA has transformed itself into a rapidly growing MSO in the U.S. cannabis space,” said CEO Terry Booth. “With revenues soaring by over 2,600% over last year, improving gross margin and adjusted EBITDA, we are showing the power of our execution on a unique strategy. This is just the beginning. We are exceptionally well positioned with operations in new jurisdictions coming online, new brands launched, and a number of very interesting transactions and partnerships progressing well towards signing. Going forward, shareholders can expect AUDACIOUS to continue transforming the business and execute towards becoming a unique and uniquely successful MSO.”

Expenses

In the first quarter SG&A expenses increased to $1.7 million. The company said that the increase from the prior year was due to the addition of ALPS personnel as well as higher legal, professional, and board of director fees. The operating loss was $3.4 million for the three months ended June 30, 2021, compared to $2.5 million for the three months ended June 30, 2020. Higher SG&A costs more than offset the increase in gross profit. However, the operating loss in Q1 FY 2022 was $0.3 million less than Q4 FY 2021 and $1.6 million less than Q3 FY 2021.

In June, Australis announced that it was changing its name to Audacious Brands.  The company’s ticker symbol will remain AUSA on the CSE and AUSAF on the OTC. The company said it will consolidate its brands under the new Audacious banner and intends to launch additional product lines under the new name.


StaffJuly 14, 2021
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5min8040

Australis Capital Inc., operating as Audacious (CSE: AUSA) (OTC: AUSAF) is buying a cannabinoid-infused shot beverage company called LOOS. The company which is also known as Gary Maverick Inc. is based in Santa Cruz, California. The amount of the transaction was not disclosed.

The products are based on a unique nano-emulsion technology platform for rapid onset, are all-natural, vegan, gluten-free and low sugar, and low calorie. The company said in a statement that after entering the market in the 2oz drink category, Loos plans to release a number of other products across several key categories, including CBD infused shots.

“With LOOS we are adding a fresh and exciting brand and consumer segment with compelling products that offer a unique user experience,” said Leah S. Bailey, Chief Business Development Officer of Audacious. “Furthermore, with Ben and Anthony, we are adding two aggressive, highly successful, and commercially savvy people to our team, which will help us to build new distribution networks for all Audacious brands and product lines. The deal is structured to ensure full alignment with AUSA shareholder interests, and we anticipate the LOOS transaction to become accretive rapidly.”

CEO Terry Booth added, “Launching a logistics-light SKU into the beverage market, I have always believed, will make all the difference in accelerating sales in this category. Furthermore, this transaction also signals our intended entry into the CBD infused drinks market, which industry insiders anticipate may become one of the most important product categories in our industry. Acquiring LOOS and the team behind the brand gives us a head start and adds another product and revenue generating line to our portfolio. as well as sees Audacious increasing our presence in California.”

Loos’ management team brings over a decade of collective experience in cannabis with brands such as Plus Products, 710 Labs, Loudpack, and Flow Kana. Their first product, a 2oz drink (shot) infused with 100mg of THC, is available in three flavors: Orange Crush Sativa, Green Dream Hybrid, and Lavender Indica. Each flavor features a unique terpene profile and is infused with added nutraceuticals for increased functionality. Following completion of the transaction, the LOOS founders will join the Audacious Sales team reporting to Dr. Duke Fu, Chief Operation Officer and the Business Development team, reporting to Chief Business Development Officer (“CBDO”) Leah S. Bailey.

LOOS Founders Anthony Bendana and Ben Koppel stated jointly, “As two people who worked their way up from the bottom in this industry, we saw an opportunity to create a brand with quality, effective, and affordable products that specifically caters to the cannabis community we love. The CPG space is filled with brands focusing on new consumers and the canna-curious and we’re excited to join them on the shelves and counters to help the entire cannabis community get Loos. We believe this industry should aspire to the highest ideals of the cannabis pioneers that powered it into existence and want Loos to be an ambassador for the type of radical empathy, compassion, and community we could all use to help us stay loose. We are excited to join forces with Audacious whose philosophy and values closely match ours and whose rapidly expanding footprint will enable us to accelerate our growth into new territories on a global basis.”


Debra BorchardtJune 22, 2021
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6min12940

Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) announced that it is changing its name to Audacious Brands.  The company’s ticker symbol will remain AUSA on the CSE and AUSAF on the OTC. The company said it will consolidate its brands under the new Audacious banner and intends to launch additional product lines under the new name.

“Audacious as a name for our adult-use operations is a much better reflection of our corporate culture and how we execute and operate,” said Terry Booth, CEO. “Audacious stands for doing things differently, courageously breaking with tradition, being bold, brave and confident. As a Company, we are executing on a unique strategy that is very difficult to emulate, while at the same time de-risking our operations. In an increasingly fragmented market with largely converging strategies, it takes an audacious company to stand out. This is who we are, and this is how we operate. The new name also better reflects our motto to ignite, delight and excite our shareholder base and the customers enjoying our products.”

Audacious was originally founded by Steve Dobler and Terry Booth, the founders of Aurora Cannabis. After the completion of a dissident shareholder battle that ended with convincing shareholder approval, Terry Booth, former Aurora CEO, who had to step away from AUSA upon spin off, re-joined AUSA as CEO on March 9, 2021.

Missouri

Audacious also announced that it has received its license to operate as part of its  Green Therapeutics acquisition. The company said that once the license transfer is complete, Audacious will own 25% of a processing and manufacturing license.

The Missouri operations consist of an 8,000 square foot facility for extraction and manufacturing, including a complete solventless extraction line, with an initial capacity to extract approximately 100 lbs per day of raw material. The facility will allow for the expansion of the Tsunami brand to penetrate the Missouri market. A final inspection was successfully completed, and the Missouri operation has received its license to operate. Sales are anticipated to commence within the next 45 days.

The Missouri market is anticipated to reach $225$300 million by 2021 and is anticipated to show continued strong growth to $500$625 million by 2025 (Marijuana Business Factbook 2021). To date, 25 manufacturing licenses have been approved to operate. Further licensing is currently capped.

Nevada

Audacious also noted that it has completed the acquisition of a 23-acre plot of land in Nevada, which it plans to become a hub for multiple operators covering the industry value chain from cultivation to extraction and manufacturing. In addition, it has acquired the last remaining water rights in this area, providing a substantial advantage in securing partners for the development of this project.

“The Sandy Valley land has great potential for us to develop our multi-operator cannabis hub. In line with our capital light expansion strategy, we intend for ALPS to assist third party operators, be they cultivators, processors or manufacturers, in building their facilities, in exchange for a percentage of capacity to grow our own cultivars and manufacture our products,” said Booth. “While through Green Therapeutics we already are a leading operator in the state, growth has been limited through lack of high-quality cannabis. This initiative, in addition to our other moves in the state, as announced recently, will change that. We are already in talks with a number of highly interested parties to realize our vision, on which we will report more in the coming months.”

Looking Ahead

The company outlined its pipeline with transactions close to the agreement stage including a facility and supply partnership in Massachusetts, a retail facility in an underserved market in California, as well as an edibles company in California. In addition to these developments, the company continues to advance on other opportunities in jurisdictions in the Eastern U.S. and other regions. Audacious said it plans to maintain strict discipline as to M&A, in line with previously communicated criteria, such as accretive transactions and disruption. Management anticipates making further announcements on transactions and partnerships in the weeks and months to come.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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