Underwood Capital Limited · ASX:UWC
Underwood Capital — MMJ Group Holdings — Investor Presentation (February 2020)
31 slides from Underwood Capital's investor presentation, February 2020
Slide 1: MMJ Group Holdings Share Purchase Plan Investor Presentation
M MJ Group Holdi Share Purchase Investor Present th February 2020 ly — ——— 4. -
Slide 2: Disclaimer
DISCLAIMER This presentation and the presentation materials (together, the Presentation) have been prepared by MMJ Group Holdings Limited (Company) (ABN 91 601 236 417). By receiving the Presentation, you acknowledge and represent to the Company that you have read, understood and accepted the terms
Slide 3: Agenda
Investment Highlights 4 MMJ Board and Management 6 Investment Strategy 10 Why Invest in Cannabis Now? 12 Portfolio Highlights 16 Long Term Vision 23 Share Purchase Plan 26 Conclusion 29 Appendix – MMJ Investment Portfolio 31
Slide 4: Investment Highlights
MMJ Investmel!
Slide 5: Investment Highlights
► Unique positioning on the ASX as a investment company focusing on international cannabis exposure ► Investment returns in the past five years have generated a Multiple on Invested Capital (“MOIC”) of 1.3 times capital invested ► Generated substantial realised gains from the sale of Dosecann and Me
Slide 6: MMJ Board and Management
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Slide 7: Embark Ventures leadership profiles
► Michael is a non-executive director of MMJ and CEO of Embark Ventures (EbV) ► Michael is an experienced former investment banker and private equity executive ► Michael co-founded Dosecann along with Greg Boone and sold the company to Cannabis Wheaton for $38 million – MMJ generated a realised retu
Slide 8: Board and Management
Board and Management Non-Executive Chairman Non-Executive Director Non-Executive Director CFO and Company Secretary Director since 2015 Director since 2015 Director since 2018 Appointed 2018 Corporate lawyer with specific Experienced company director of ASX Experienced company director of ASX 23 yea
Slide 9: Experienced cannabis-industry player
MMJ and Embark Ventures have knowledge and experience across the five core processes of investment management: ► Sourcing investments ► Exiting investments ► Making investments ► Company administration ► Adding value to investments Experienced cannabis- EbV and MMJ are striving to create an ecosyste
Slide 10: Investment Strategy
MMJ
Slide 11: MMJ has a proven track record acquiring and realising value
► MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, MMJ has a proven processing, cultivation, equipment and retail track record ► MMJ is the only listed investment co
Slide 12: Why Invest in Cannabis Now?
Slide 13: Recent listed Canadian cannabis downturn and rebound creates opportunities
Recent listed Canadian cannabis performance downturn and rebound creates opportunities for MMJ MJ Alt ETF Canopy Growth
Slide 14: Cannabis 2.0 Outperforms – LABS vs MJ ETF
► Stock picking capabilities is crucial in a maturing industry Cannabis 2.0 Outperforms – LABS vs MJ ETF ► We believe key driving factors that will determine successful cannabis companies are: ► Well Capitalised ► Possess Low Cost Production or Process ► Focus on high value/high margin (Extraction,
Slide 15: MMJ's investments across the cannabis and hemp value chain
MMJ’s investments across the cannabis and hemp value chain
Slide 16: Portfolio Highlights
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Slide 17: Portfolio returns: AUD74m invested since 2015
➢ MMJ has invested AUD74m in cannabis business investments since 2015 for a total return of 1.3 times capital invested (MOIC) ➢ MMJ has executed Canadian asset sales which have generated significant returns on investment: a) Dosecann – 2.3 times MOIC b) Medipharm LABS – 4.3 times MOIC (MMJ retains r
Slide 18: Investment Overview: Embark Health
Investment Overview: ➢ Building the largest extraction business in Canada with facilities in British Columbia and Ontario ➢ Exceptional technical expertise across a variety of extraction techniques ➢ Currently planning to go public by end of Q2/2020 ➢ We believe we have a second Medipharm Labs on ou
Slide 19: Investment Overview: WeedMD
Investment Overview: ➢ Acquired in September 2019 - well capitalised name with recent CAD25 million investment from LiUNA union ➢ Very low cost of production with outdoor grow and expansion space ➢ Extraction facility in Aylmer now operational ➢ Focus on retail branding through very well reviewed Co
Slide 20: Investment Overview: Sequoya
Investment Overview: ➢ Poland based extraction company which has built a facility in record time since our initial investment in July 2019 ➢ Sequoya has also achieved EU GMP certification for their facility which is based in Krakow, Poland ➢ Now focusing on processing biomass and selling CBD isolate
Slide 21: Investment Overview: Harvest One
Investment Overview: ➢ MMJ has held an interest in HVT businesses as a result of vending businesses owned by MMJ to HVT in 2017 ➢ Exceptionally well regarded branded products such as Royal High and vast distribution network through Shoppers Drug Mart, Holland & Barrett and Dreamwater, etc. ➢ MMJ has
Slide 22: Investment Overview: BCAC
➢ Seeking to become global branded cannabis and CBD business in Europe and North America ➢ Global brand strategy focussed on low cost cultivation and extraction in federally legal frameworks ➢ BCAC team led by Paul Walsh, former CEO of Diageo pls, the world’s largest spirits company, has strong trac
Slide 23: Long Term Vision
MMJ
Slide 24: Long term vision
The Second round A fair amount of value of the cannabis has already surfaced investment cycle In the long run, it is in the Canadian will be propelled MMJ’s vision to be We intend to keep marketplace. Within by regulatory the premier cannabis track of changes Canada, we plan to favourability and inv
Slide 25: 4 ways we will eliminate the current MMJ P/NAV discount
MMJ Share Price VS MMJ Pre-Tax NTA MMJ share price MMJ Pre Tax NTA $0.43 $0.33 $0.23 $0.13 4 ways we will eliminate the Management team and advisory board has EbV is able to leverage its own operating platform current MMJ p/nav an ability to source a constant stream of deal flow globally while based
Slide 26: Share Purchase Plan
MMJ
Slide 27: Share Purchase Plan terms
► Share Purchase Plan (SPP) to raise approximately $5 million ► Offer Price of 11 cents per new share, being a 10.9% discount to the 5-day VWAP and 51% discount to MMJ’s Net Tangible Asset Value per share ► MMJ’s Australian and New Zealand Shareholders have the opportunity to purchase between $1,000
Slide 28: SPP timetable
Record Date for SPP 5:00pm (AWST) 13 February 2020 Announce SPP 14 February 2020 Opening Data for SPP 19 February 2020 Closing Date for SPP 5:00pm (AWST) 10 March 2020 Announce Results of SPP 12 March 2020 Issue of Shares under the SPP 19 March 2020
Slide 29: Conclusion
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Slide 30: Prepared for Cannabis 2.0!
► Unique positioning on the ASX as an investment company focusing on Global cannabis exposure ► Strong team credentials and benefits of having Embark Ventures onboard ► Compelling investment proposition with SPP issue price at discount of 51% to NAV ►PREPARED FOR CANNABIS 2.0! MMJ Head Office Suite
Slide 31: Appendix – MMJ Investment Portfolio
CSE/TSXV/ TSX Investment MMJ Company Book Value Investment Country Investment structure Business Weight Code date Shareholding type (unaudited) 31-Jan-20 % AUDm Harvest One HVT Apr-17 26% Canada Public Shares and secured loan of Health and wellness 11.0 19% AUD2.2.m products WeedMD Inc. WMD.WM and S
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