Magnetic North Acquisition Corp. · TSXV:MNC
Magnetic North Acquisition — Shareholder Meeting (November 2022)
43 slides from Magnetic North Acquisition's shareholder meeting presentation, November 2022
Slide 1: AGM Presentation November 2022
AGM PRESENTATION NOVEMBER 2022 Creating Value by Adding Capital and Active Management from Investment to Exit
Slide 2: Welcome
Welcome
Slide 3: Agenda
Agenda • Review of 2020 and 2021 Audits • Equity Structure • Board of Directors update • Update on Previcare, CXTL, White Quartz mine others • Discussion of 3rd Quarter • NAV • Q&A
Slide 4: Audit review
ACQUISITION CORP Audit review
Slide 5: Tale of two Audits
Tale of two Audits • MNP • PKF • Accounting treatment as a • Accounting treatment as an corporation with partially owned investment entity subsidiaries • Each investment is accounted for • Consolidated CXTL financials into based upon its value. Gains or Magnetic Financials losses are included in the
Slide 6: Changes in financials
Changes in financials • The scope of change is dramatic in the balance sheet. • Variety of items are very different and alter the conversation of Magnetic’s financial results
Slide 7: Change in Financials
Change in Financials • Income statement now reflects Magnetic North’s business • Gains/(Losses) on investment flow through the income statement and impact the overall value of the Company.
Slide 8: Changes in Financials
Changes in Financials • This allows Magnetic to display how each investment can impact the value of the shares and the Company overall. • We view this as a huge positive change for the Company and its shareholders
Slide 9: Equity Structure
ACQUISITION CORP Equity Structure
Slide 10: Market Capitalization
Market Capitalization • Magnetic North has: • 59.05 mm Common shares • 1,750,825 Preferred A shares • Both the Common and Preferred shares trade on the TSXV. • Common shares under the symbol MNC • Series A Preferred Shares under the symbol MNC.PR.A
Slide 11: Equity Structure
Equity Structure Preferred A Shares • Senior most security in the Company • Principal (face value) ranks first in any liquidation or wind up which provides some protection for investors • Non-Voting • Preferred Shares are redeemable in 2026 • Three streams of income for investors • Special dividends
Slide 12: Participating Preferred – Illustrative Example
Participating Preferred – Illustrative Example Magnetic North 1. Magnetic North Acquisition Corp. (“MNAC”) invests $5 mm in invests $5 mm into Portfolio Company A. Company A 2. MNAC sells all of its shares of Portfolio Company A for $55 mm cash • $55 mm sale price less the $5 mm initial Portfolio in
Slide 13: Board Update
ACQUISITION CORP Board Update
Slide 14: Magnetic North Board of Directors
Magnetic North Board of Directors Ian Wild • Former Executive VP at ATB Corporate Financial Services. Executive Chairman • Experience in banking spans over 30 years; began working for National Westminster Bank Ltd. in the U.K., and after immigrating to Canada began working for Continental Bank of Ca
Slide 15: Magnetic North Board of Directors
Magnetic North Board of Directors Andrew Osis • 20+ years of experience working in investment banking and commercial operations. Co-CEO & Director • Formerly VP, Global Banking with RBC Dominion Securities; also held positions with Peters & Co. and Newcrest Capital focusing on mergers and acquisitio
Slide 16: Magnetic North Board of Directors
Magnetic North Board of Directors • With the passing of John Kowal we are currently searching for at least one more director. • Had started looking in the spring for an additional director to join the board. • Working to make an announcement in the near future.
Slide 17: Investee updates
ACQUISITION CORP Investee updates
Slide 18: Portfolio Overview
Portfolio Overview MagneticNorth has a portfolio of companies that have a solid business plan and are on-track for phenomenal growth. Investment Industry Post-Investment Ownership Previcare Sanitization & Clean Technology 32% CXTL Recycling Canada Corp Plastic and Ewaste Recycling 50% Other Investme
Slide 19: CXTL Recycling
ACQUISITION CORP CXTL RECYCLING
Slide 20: CXTL Recycling Canada Corp - Introduction
CXTL Recycling Canada Corp - Introduction CXTL was co-founded by Magnetic and the inventor to create a company that can enable a circular economy by completely recycling and reclaiming all plastics in a profitable and environmentally conscious way. Over 90 per cent of plastics end up incinerated, or
Slide 21: Next Steps
NEXT STEPS: • Logistical issues during COVID lock downs created supply chain issues for capital items which prevented sourcing critical items • We are seeing those logistical issues reduce and should be able to source required capital items in 2023 • Working on resetting the business plan for 2023
Slide 22: Previcare
ACQUISITION CORP PREVICARE
Slide 23: Previcare
Previcare Healthcare company focused on the research, development, sales, and marketing of industry leading hard surface disinfectant and hand sanitizing products. They serve retail consumers, wholesalers, and institutional clients, and government agencies worldwide. MNAC currently owns 32% of Previ
Slide 24: Previcare - Overview
Previcare - Overview • Since 2017, MNAC has been working with Previcare to bring bespoke chemical solutions to market that are focused on next generation hard-surface disinfectant and hand sanitizer offerings. • Early focus was on in-licensed and internally developed intellectual property that vastl
Slide 25: Previcare - Disinfectants
Previcare - Disinfectants Previcare offers the following hard-surface disinfectant products: • GR-AD Pro Disinfectant Solutions • Residual Kill Technology – eliminates pathogens from hard surfaces for up to 30 days. • Citric-acid bases Disinfectants • In late January 2021, President Biden signed an
Slide 26: Previcare - Sanitizer
Previcare - Sanitizer Previcare offers the following hand sanitizer products: AllDay Hand Sanitizers • BZK-based Residual Kill Technology – eliminates pathogens for up to 24 hours when applied. Sopuro Hand Sanitizers • 70% Alcohol based hand sanitizer with aloe vera for dry skin protection available
Slide 27: Previcare - Advantage
Previcare - Advantage Since its inception, Previcare has focused on using trusted ingredients, proprietary additives and unique processing to increase cleaning power and length of time the formulas remain active on surfaces and skin – providing residual kill technology to both: • Alcohol - Previcare
Slide 28: Previcare - COVID
Previcare - COVID • COVID brought with it much opportunity, while at the same time, much confusion in the sanitizer & disinfectant markets. • Early stages saw daily changes to regulatory requirements leaving customers frustrated; • Alcohol vs BZK, minimum % alcohol, supply chain issues, etc. • In re
Slide 29: Previcare - PPE
Previcare - PPE • In 2020, Previcare began efforts to assist its clients in securing PPE in order to help protect their stakeholders, including but not limited to: • Masks (all levels) • Medical gloves • Test kits • Previcare, alongside the rest of society, became concerned with the amount of waste
Slide 30: Previcare – Compostable Non-Wovens
Previcare – Compostable Non-Wovens • Previcare is negotiating a partnership to manufacture compostable face masks in North America for its customers. • Initial production could ramp up to several hundred thousand boxes per month if customer take-up meets expectations. • In order to meet potential cu
Slide 31: Previcare – Compostable Masks
Previcare – Compostable Masks Year 1 Year 2 Year 3 $ % $ % $ % Sales 72.0 182.0 222.2 Cost of Goods Sold 52.1 112.1 119.6 Gross Margin 19.9 27.6% 69.9 38.4% 102.6 46.2% EBITDA 11.2 15.5% 52.0 28.6% 80.8 36.4% EBITDA Multiple 10X $ 111.5 $ 519.7 $ 808.5 15X $ 167.3 $ 779.6 $ 1,212.7 20X $ 223.0 $ 1,0
Slide 32: Previcare – Challenging Supply Chain
Previcare – Challenging Supply Chain Hand Sanitizer • Hundreds of new entrants (i.e., distillers etc.) flooded the market with, at the time, toxic products. • Retailers still experience significantly high inventory levels with some product still being subject to recall. Disinfectant/Masks (Compostab
Slide 33: White Quartz Mine
ACQUISITION CORP WHITE QUARTZ MINE
Slide 34: Mining Assets
Mining Assets • Inherited these assets from Black Bull Resources • The predecessor company to Magnetic North. • Mining Licenses in Nova Scotia • Prior Reserve report showed total measured and indicated resource of: • 12.1 million tonnes of Quartz • 4.8 million tonnes of Kaolin
Slide 35: Mining Assets
Mining Assets • Have been working to monetize these assets • Prior development deal expired • Negotiating an outright sale or other event to surface value and provide shareholders with a return • Working to have this effective in 2023
Slide 36: Third Quarter
ACQUISITION CORP Third Quarter
Slide 37: Third Quarter
Third Quarter • Third quarter showed an increase in the value of Previcare investment net to MNAC of $5.0 million • Cost of the investment in cash terms is roughly $1.4 million • (was written off for accounting purposes at year end 2021)
Slide 38: Third Quarter
Third Quarter • Gain impacts the balance sheet as well
Slide 39: Third Quarter
Third Quarter • This was the next step forward with the financials. • Shows increase in value of Previcare and impact on the financial results • Each quarter will now reflect the value of the investment portfolio and its impact on the results of the Company
Slide 40: Outlook
Outlook • Subsequent to the end of the Third Quarter MNAC received cash from the monetization of some assets in CXTL. • Further cash receipts are expected during the fourth quarter
Slide 41: Q&A
ws MAGNETIC NORTH ACQUISITION CORP Q&A
Slide 42: Thank You
ACQUISITION CORP THANK YOU
Slide 43: Contact
Contact Stephen McCormick Graeme Dick Vice President – Capital Markets Investor Relations stephen@magneticnac.com graeme@colwellcapital.com
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