CORRECTION FROM SOURCE: Avant Brands Provides Strategic Objectives for the 2023 Fiscal Year
News provided byACCESSWIRE
Jan 25, 2023, 9:50 AM ET
KELOWNA, BC / ACCESSWIRE / January 25, 2023 / Avant Brands Inc. (TSX:AVNT)(OTCQX:AVTBF)(FRA:1BU0) ("Avant" or the "Company"), a leading producer of innovative, premium handcrafted cannabis products, is pleased to provide a corporate update.
The Company's news release had an error in square footage for its production facility in Kelowna, BC. The production facility is 80,000 square feet.
The Company executed two key transactions recently that are expected to contribute to the ongoing growth of Avant. On December 8, 2022, the Company announced that Avant Brands K1 Inc. (formerly 1000343100 Ontario Inc.), an entity of which Avant owns 50% of the issued and outstanding shares, was the successful bidder to purchase The Flowr Group (Okanagan) Inc. ("Flowr Okanagan"), including its 80,000 square-foot production facility in Kelowna, BC (the "Flowr Facility"). On December 19, 2022, the Company announced it has entered into a binding share purchase agreement to acquire the remaining 50% equity stake of 3PL Ventures Inc. ("3PL") for its flagship production facility in Vernon, BC (the "3PL Facility").
The Flowr Facility remains fully operational and is expected to increase Avant's production capabilities by approximately 60%(A), which has the potential to make Avant one of the largest indoor producers of high-quality cannabis in Canada(B). The Company expects to make certain modifications to production processes at the Flowr Facility throughout the 2023 fiscal year to align with Avant's cultivation methodologies in order to continue striving to produce the premium quality products that its customers demand.
The acquisition of the remaining 50% of 3PL will provide Avant's wholly owned subsidiary, GreenTec Holdings Ltd., with full ownership of the 3PL Facility, which is expected to generate meaningful cash flows over the course of the 2023 fiscal year. With the buyout of the non-controlling interest in 3PL, the Company will eliminate the shareholder loan of approximately $12.0 million owing to the non-controlling shareholder, F-20 Developments Corp. ("F-20"), which, in accordance with the terms of the shareholders agreement for 3PL, had first priority to receive the majority of 3PL's operating free cash flow in order to repay this shareholder loan.
Fiscal 2023 Strategic Objectives and Outlook
Upon closing of the acquisitions of Flowr Okanagan and 3PL, Avant's strategic objectives and outlook for the 2023 year include:
- Increasing production through the Flowr Facility and the 3PL Facility;
- Implementing modifications to the Flowr Facility to facilitate production of Avant premium cannabis flower;
- Fulfilling all Provincial government purchase orders and export demand;
- Exploring new global markets for exporting product, leveraging the Company's reputation in existing markets, such as Israel and Australia;
- Launching new cultivars from Avant's extensive library of genetics;
- Continuing to operate in a fiscally responsible manner, while seeking opportunities to reduce the Company's overall cost of production; and
- Continuing to explore contract growing or acquisition opportunities to the extent that the acquisition of Flowr Okanagan does not completely fulfill unmet customer demand.
Cash and Liquidity
As of November 30, 2022, the Company had approximately $7 million in cash and no interest-bearing debt on the balance sheet. As of the date of this news release, the Company has approximately $6.9 million in cash to continue to fund this expected growth.
All figures reported above with respect to November 30, 2022, are preliminary and are unaudited and subject to change and adjustment as the Company prepares its consolidated financial statements for the years ended November 30, 2022, and November 30, 2021. Accordingly, investors are cautioned not to place undue reliance on the foregoing information. The Company does not intend to provide preliminary results in the future. The preliminary results provided in this news release constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and U.S. securities laws, are based on several assumptions and are subject to a number of risks and uncertainties. Actual results may differ materially. See "Cautionary Statement Regarding Forward-Looking Information" below. All references to "$" in this news release are to Canadian dollars.
Note (A) - This estimate is based on the assumption that the output at the Flowr Facility will be consistent with the production output at Avant's existing facilities.
Note (B) - This estimate is based on publicly available information on other Licensed Producers, with products for sale on OCS.ca, that are priced in-line with Avant's flagship brand, BLK MKT or higher.
About Avant Brands Inc.
Avant is an innovative, market-leading premium cannabis company. Avant has multiple operational production facilities across Canada, which produce high-quality, handcrafted cannabis products, based on unique and exceptional cultivars. Avant's products are distributed via three complementary sales channels: recreational, medical and export. Avant's recreational consumer brands include: BLK MKT™, Tenzo™, Cognōscente™ and Treehugger™, which are sold in British Columbia, Saskatchewan, Manitoba, Ontario, Atlantic Canada and the territories. The Company's medical cannabis brand, GreenTec™, is distributed nationwide, directly to qualified patients through its GreenTec Medical portal and through various medical cannabis partners.
Avant is a publicly traded corporation listed on the Toronto Stock Exchange (TSX: AVNT), and cross-trades on the OTCQX Best Market (OTCQX: AVTBF) and Frankfurt Stock Exchange (FRA: 1BU0). The Company is headquartered in Kelowna, British Columbia and has operations in British Columbia, Alberta and Ontario.
To learn more about Avant, access the investor presentation, or learn more about its consumer brands, please visit www.avantbrands.ca.
For additional information, please contact:
Investor Relations at Avant Brands Inc.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain "forward-looking information" as defined under applicable Canadian securities legislation, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. To the extent any forward-looking information in this news release constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, such information is being provided as preliminary financial and operational results for the fourth quarter and fiscal year-ended November 30, 2022 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 financial outlooks. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: the consummation of the acquisitions of Flowr Okanagan and 3PL; the expected increase to Avant's annual production capabilities; the expected modifications to the Flowr Facility, including the introduction of Avant cultivars; the elimination of the shareholder loan owing to F-20; increasing production through the Flowr Facility and the 3PL Facility; fulfilment of government purchase orders and export demand; launching new cultivars; operating in a fiscally responsible manner while continuing to seek opportunities to reduce overall cost of production; exploring new global markets for exporting product as well as contract growing or acquisition opportunities to the extent that increased production does not fulfill unmet customer demand; the Company's approximate cash on hand for the fourth quarter and fiscal year ended November 30, 2022; and expectations for other economic, business, and/or competitive factors. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Examples include statements that the Company will operate in a fiscally disciplined manner; that the Company will build long-term shareholder value and reduce operational expenses; or that the Company will increase its revenue and gross margins. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. Our actual financial position and results of operations may differ materially from management's current expectations and, as a result, our cash on hand may differ materially from the cash values provided in this news release.
All information contained in this news release that is not clearly historical in nature may constitute forward-looking information. Examples of such statements include statements with respect to the Company's financial results for the fourth quarter and fiscal year-ended November 30, 2022 and the Company's expected cash on hand and other preliminary financial and operational results for the fourth quarter and fiscal year-ended November 30, 2022. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including that the preliminary financial and operational results are subject to the completion of the Company's financial closing procedures and have not been audited or reviewed by the Company's independent auditor.
Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the ability of the Company to receive, in a timely manner and on satisfactory terms, the necessary regulatory approvals for the acquisitions of Flowr Okanagan and 3PL; the ability of the parties to satisfy, in a timely manner, the conditions for the acquisitions of Flowr Okanagan and 3PL; the prompt and effective integration of Flowr Okanagan's operations with the Company's; preliminary financial and operational results are subject to the completion of the Company's financial closing procedures and have not been audited or reviewed by the Company's independent auditor; the ability to achieve the anticipated synergies; inherent uncertainty associated with projections; diversion of management time on transaction related issues; expectations regarding future growth and expansion; regulatory and licensing risks; changes in consumer demand and preferences; changes in general economic, business and political conditions, including changes in the financial markets and inflation-related risks; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; compliance with extensive government regulation; public opinion and perception of the cannabis industry; and the risk factors set out in the Company's annual information form dated February 28, 2022, filed with Canadian securities regulators and available on the Company's profile on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information, which speak only as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE: Avant Brands, Inc.