A leading, global cannabis business. Investor Presentation

Transcription

1 ASX:THC A leading, global cannabis business Investor Presentation March 2017

2 DISCLAIMER The material in this presentation (material) is not and does not constitute an offer, invitation or recommendation to subscribe for, or purchase any security in The Hydroponics Company Limited (THC) nor does it form the basis of any contract or commitment. In the event that an offer, invitation or recommendation to subscribe for, or purchase any security in THC is made in the future, a Prospectus will be made available in relation to the same. If and when the Prospectus becomes available it may be downloaded from the THC s website at At that time any person wishing to make an investment in THC must consider the Prospectus in deciding whether to acquire the security and must complete the application form that will be in or will accompany the Prospectus. THC makes no representation or warranty, express or implied, as to the accuracy, reliability or completeness of this material. THC, its directors, employees, agents and consultants shall have no liability, including liability to any person by reason of negligence or negligent misstatement, for any statements, opinions, information or matters, express or implied, arising out of, contained in or derived from, or for any omissions from this material except liability under statute that cannot be excluded. Statements contained in this material, particularly those regarding possible or assumed future performance, costs, dividends, production levels or rates, prices, resources, reserves or potential growth of THC, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The principal important risk factors that could cause THC s actual performance and future events and actions to differ materially from such forward-looking statements, include, but are not limited to, continuing volatility in the capital or credit markets and other changes in the securities and capital markets, changes in market prices of THC s investments, the occurrence of one or more catastrophic events, such as an earthquake, hurricane, or act of terrorism, changes in laws or regulations, changes in income tax laws, and changes in general economic and market factors that affect the prices of securities or the industries in which it does business. This presentation includes certain statements, estimates and projections that rely upon various assumptions. Those assumptions may or may not prove to be correct. The Presentation does not purport to contain all the information that a prospective investor may require. The information may not be appropriate for all persons, and it is not possible for The Hydroponics Company Limited to have any regard to the investment objectives, financial situation and particular needs of each recipient who reads or uses this information. 2

3 ACCELERATED GROWTH & LUCRATIVE BUSINESS MODEL THC is at the forefront of developing a leading, diversified, worldwide cannabis business, focused on three core business units: Development and delivery of medicinal cannabis Manufacturing and distribution of hydroponics equipment, materials and nutrients Large-scale hydroponic greenhouse design and construction 3

4 SHARE STRUCTURE The Hydroponics Company Limited Indicative Listing Date 20 April 2017 Share Price THC IPO Shares to be Issued $ million Shares on Issue Post IPO million Listed Options THCO 40 cents 31 December million Market Cap (at IPO price) $16-19 million Cash Approx $6-9 million ASX: THC 4

5 INVESTMENT HIGHLIGHTS North American cannabis industry experiencing 30-40% annual growth rates Leading hydroponics equipment manufacturer & distributer with rapidly expanding global network Hydroponics Division 2017 Revenues >$5m NPAT >$1m Highly skilled, proven team in place Group 2018 Revenues > $15m NPAT >$3m 600 products, 9 registered trademarks 5

6 CANNABIS IS A THRIVING OPPORTUNITY North American Cannabis market estimated US$20B by 2021 US Cannabis estimated industry revenues US$24B-US$44B in % of the US support doctor recommended medicinal cannabis US 28 US States medicinal cannabis legalised 7 US States recreational marijuana legalised Canada Medicinal cannabis legalised 2Q 2017 expected vote on recreational marijuana Australia Great demand potential 1.8m patients with neuropathic pain 6

7 A VERTICALLY INTEGRATED, DIVERSIFIED BUSINESS The Hydroponics Company Limited (THC) IP Research and Development Canndeo Limited Medicinal Cannabis Pegasus Agriculture Epigenetic Process IP Acquisition Hydroponic Equipment Crystal Mountain Products Distribution and Wholesale Dragon Vision Manufacturing Greenhouse Design, Construction and Management A&B Collaboration Design and Construction of Greenhouses American Indoor Farming Large Scale Greenhouses Australia Asia Americas Canada Supa-Stelth Pumps Marketing Agreement Inna Water Marketing Agreement 7

8 FRAMEWORK FOR GROWTH Future Tech Growth Strategy Foundation Business Epigenetics Water Technology Medicinal Cannabis Greenhouses Hydroponics 8

9 OUR EXPERIENCED BOARD Alan Beasley Chairman Mary Verschuer Non-Executive Director Peter Wallace Non-Executive Director Ian Mutton Non-Executive Director More than 30 years in investment banking and management, with senior roles at Bankers Trust Australia, Goldman Sachs and BNP Paribas Experienced non-executive director with more than 20 years in senior management including initiating, executing and integrating acquisitions More than 30 years experience as a company director, with a career that spans private equity, corporate advice, nonexecutive directorships and financial control. Practicing director of a law firm specialising in contract related matters, competition and product liability laws. Ian also assists listed companies to implement systems that are intended to ensure ongoing compliance with the listing rules and regulations 9

10 KEY PERSONNEL Hamish MacDonald Chief Executive Officer Extensive biotechnology experience. Spearheaded a 500MWH Indian offtake agreement with Clenergen Ltd, forming a joint venture with Linc Energy Ltd John Hall Executive Director Over 30 years in plant breeding, crop management and monitoring systems, including major Australian innovations Dr Andrew Beehag CEO, Canndeo Leading THC s Medicinal Cannabis Development program - Expert in multi party international research collaboration Jason Colquhoun Director, Manufacturing and Sales Expert in product development, logistics, marketing and vendor relations Dr Jim Barlow Indoor Farming, Americas Chief Agronomist leading development of large commercial hydroponic greenhouses 10

11 IP AND R&D

12 CANNDEO Growing & Extraction Technology Converting unique intellectual property in cannabis breeds and extraction technology to approved products for the Australian market Product Development Delivery Methods Future IP Research Australian Manufacturing Sales of Proprietary Medicines This division aims to lead the development of therapeutically superior, paramount quality and cost effective medicines derived from Cannabis sativa. 12

13 A NEW CLASS OF MEDICINAL PRODUCTS Australia Clear strategy for bringing medicinal cannabis to the Australian market, estimated at $ m Pursuing a pharmaceutical model +17 years of Cannabis sativa breeding, variety selection and growth management Collaborative R&D discovery projects for medicinal cannabis Target multiple markets with high purity cannabidiol (CBD) Production under Government licensing program A new class of medicinal products targeting dementia, neurological, epilepsy and other disorders 13

14 CANNABIS CBD (Cannabidiol) Anxiolytic CB 1 (+)5- HT 1A (+) 9 THCA Antiproliferative Antispasmodic CBDV Bone-stimulant Antipsychotic TRPV! (+) Antiepileptic [Ca 2+ ] Neuroprotective [Ca 2+ ] I ROS Vasorelaxant PPAR Y (+) Antiproliferative CBC Anti-inflammatory Analgetic Bone-stimulant Antimicrobial Antiproliferative TRENDS in Pharmacological Sciences CBG Antiproliferative Bone-stimulant Antibacterial Diverse Medical Uses 9 THCV Anorectic CB1(-) Bone-stimulant CB2(+) Antiepileptic CB1(-) GABA Antispasmodic Anti-ischemic 5-HT 1A (+) Antiproliferative, anticancer [Ca 2+ ] I ROS CB 2 (+) Id-1 Antiemetic Antibacterial Antidiabetic Antipsoriatic Intestinal anti-prokinetic Analgesic Bone-stimulant Anti-inflammatory TNF-a Adenosine Uptake Immunosuppressive T-cells 14

15 CANNDEO TIMELINE* 2017 Q1/Q Q3/Q Q1/Q2 Application for research license lodged Production facilities, quality certifications Establish market and channel, patient trials Collaboration with government on R&D *Performance and dates are subject to change and are indicative only. International partners: Sales and IP agreement Pre-clinical investigation of high potential extracts Domestic market growth through expanded product use Market expansion through international partner sales & licensing Co-funding high potential new medicines 15

16 EPIGENETIC TECHNOLOGY IP Innovative Plant Breeding for accelerated growth and higher return Non GMO No foreign DNA introduced Selectively bred Thrive under myriad environmental stressors Grows 33% to 40% faster Quicker and higher returns to breeders Stable Ideal candidates for gene silencing 16

17 PARENT AND ADAPTATION Epigenetic process increases number of genomes, providing higher and faster returns THC plants bred to thrive in wide range of environments Significant commercial advantage in cannabinoid production 17

18 MARKET OPPORTUNITIES THC plant breeding technology key objectives Produce epigenetic cannabis plants Produce and export plants and seeds with superior genetics Enable growers to apply for breeding rights for plants in the cannabis or other markets Aggregate other Cannabis industry IP 18

19 HYDROPONIC EQUIPMENT

20 CRYSTAL MOUNTAIN PRODUCTS Hydroponic equipment and nutrients Over 600 products, 9 trademarks Strong distribution networks The cornerstone of THC s acquisitions 2017 projected sales >$5m Trading profitably for 5+ years across Canada, UK, EU and USA New distribution across USA and Europe 20

21 CRYSTAL MOUNTAIN DRAGON VISION MANUFACTURING Proprietary trademarked products include: Lighting and power supplies Lighting relays and Climate control Ventilation and Trimming Extraction bags Plant rotation systems Eyewear Nutrients and accessories 100% owned by THC Wholesale network in the US, Canada and UK Strong sourcing and quality control team in China Fast paced and innovative R&D Division with increased resources offering considerable growth potential 21

22 NEW PRODUCTS IN 2017 Award winning systems, exclusive worldwide licence, international distribution rights SUPA-STELTH WATER PUMPS INNAWATER WATER STERILISATION AND CONDITIONER SYSTEMS Exclusive worldwide license for hydroponics market distribution Exclusive international marketing and distribution rights for hydroponic and indoor farming Innovative pumps that minimise electricity consumption Award winning chemical free water purification systems 22

23 GREENHOUSE DESIGN, CONSTRUCTION AND MANAGEMENT

24 ADVANCED HYDROPONIC GREENHOUSES A&B Hydroponics is a world leader in the field of hydroponics, specializing in the design and manufacture of the finest commercial hydroponic greenhouses and growing systems available for any type of environment THC has also secured the exclusive services of agronomist Jim Barlow to represent THC throughout the Americas to develop large commercial hydroponic greenhouses 24

25 THE NEXT 12 MONTHS Growth strategy for the year ahead* 2017 April 2017 Q Q Q Q1 Successful listing on Australian Securities Exchange (ASX) Alliance with International Partner (IP R&D Division), New Product Release (Hydroponic Division) Research License and Permit (IP R&D Division), Increase Distribution Network (Hydroponic Division) TGA Product Submission (IP R&D Division), New Product Release (Hydroponic Division) Sales Agreements with International Partner (IP R&D Division) *Performance and dates are subject to change and are indicative only. 25

26 PROVEN EXPERTISE, HIGH GROWTH New Products Growing Demand Over 600 Products and 9 established trademarks, with more products expected to be released in 2017 North American cannabis industry experiencing 30-40% annual growth rates, driven by trend to legalize cannabis for both medicinal and recreational use Cannabis Sativa 17+ years in the breeding, variety selection and growth management of Cannabis sativa Plant Science Epigenetic Process THC plants can be selectively bred, providing faster and higher returns Growth Strategy Strategy to grow annual revenues over A$15 million by 2018 Experienced Team Highly credentialed team, with a wealth of capital markets and listed company expertise, plus strong technical knowledge of the cannabis market 26

27 THANK YOU The Hydroponics Company Limited Hamish MacDonald - CEO Level 2, 131 Macquarie St, Sydney Henry Kinstlinger Company Secretary