Relevium Technologies Inc. (TSX.V: “RLV”, OTCQB:“RLLVF” and
Frankfurt: “6BX”) (the “Company” or “Relevium”), is pleased to
provide an open letter to its shareholders from the company’s Chief
Executive Officer, Aurelio Useche.
Dear valued shareholders,
As the year comes to a close and we take a look
back at the Canadian capital markets in 2019 we see a new valuation
model emerging and renewed investor diligence. We at RLV view this
as opportunity, in particular in the wellness and medical cannabis
business. In the US, investment funds are long and bullish, a
sentiment that is expected to be supported by the eventual
legalization of this emerging industry at the federal level.
In view of this new and emerging context, we at
Relevium have shifted our focus towards the following key success
drivers:
- Adapt and Evolve: Capital has become more
expensive and competition has increased. As such, we as a business
must adapt and evolve.
- Remain long and focused: The macro theme for
the business is compelling. There is proven demand, growth
opportunity and profitable players in the US.
- Stick to fundamentals in supporting value: The
market has corrected down to fundamentals. Traditional valuation
metrics are back and private capital is looking at EBITDA ranges of
8-12X and revenues multiples of 2-4X.
- Simplify our capital structure: We need to
improve and alleviate our capital structure.
- Improve external communication: The
differentiation is in how we communicate a clear and focused
strategy providing better insight to the investors and the market
in general.
- Crystalize Value: Align strategy to monetize
value and synergies with existing business units.
SUMMARY DISCUSSION ABOUT THIS PAST
YEAR
This year was pivotal year for most companies
and for Relevium it was also transformational. We embarked on an
ambitious path of establishing strategic partnerships, growth
initiatives and planned acquisitions.
This year was also key in testing the company’s
core mission, which is to acquire health & wellness companies
and brands to build a portfolio. Today we have three subsidiaries
in three different segments on the wellness market and given our
size one could argue that our strategy is too ambitious. The fact
is, our strategy is ambitious and although each business unit has a
completely different business model, all three are within the
Health and Wellness envelope.
Could we have done better by remaining focused
on one specific segment? There is always the possibility. However,
we felt that given our size and the ever changing market dynamics,
we had to create stretch. The performance of the market in 2019 has
put challenges along the way, primarily in terms of sources of
capital and allocation. Having three separate businesses may have
also diluted our internal resources, a situation we are diligently
working to resolve creatively. Regardless of all the challenges we
faced, here are some key positive developments for the company this
past year:
Expanding and Optimizing BGX E-Health
LLC
This past year we expanded the product line
under BGX for a total of 56 Bioganix products, including launching
two truly amazing, evidence based products for the heart
(CardiaPro) and for the eyes (VisionPro). We launched Aloe Vera
products through our agreement with Curaloe, we soft-launched our
new Push Pull anti-aging system and Leefy Lyfe launched two
SKUs.
Bioganix will continue to increase/change its
product offerings and expand into new markets. This is a very
competitive business environment and we’ve seen firsthand the
changes that one of our main marketplaces, Amazon, has made in
order to ensure that increasing competition does not dilute
quality. We are constantly adapting to these changes.
A key strategic decision for BGX has been to
exercise tighter controls over our cost of goods sold, quality and
efficiency of inventory planning. As such, the company has recently
announced its plans to move manufacturing sourcing to Montreal,
Quebec. We selected to partner with Bio V Pharma in order to
support “local sourcing”, at better prices and higher quality. This
agreement will also provide Relevium’s subsidiary with increased
access to international markets, a decrease COGS and higher gross
margins. The partnership has also allowed BGX to have access to 400
NPN numbers with Health Canada and this will enable us to launch
new products in Canada. The manufacturing agreement with Bio-V
Pharma has already provided added value as we secured a purchase
order of CAD $1,000,000 from the Middle East. With the recent
increase in purchase orders and the increase in profit margins,
this will have a great impact on our next financial quarters.
What’s next for BGX?
We are currently in the final stages of
negotiations for the acquisition of the Montreal based biopharma
manufacturing company. The completion of the acquisition of the
biopharma company will add approximately CAD $3,500,000 -
$5,000,000 in additional annual revenue to Relevium. With the
addition of this new asset, Relevium’s annualized revenues is set
to increase to approximately $8,000,000 - $10,000,000. The
acquisition is expected to be completed during the first quarter of
2020.
In order to execute its strategy, growth and
profitability, BGX E-Health needs focus and its own dedicated team.
As such, we believe it is important to roll out BGX as a stand
alone entity. The company is currently working on the roll out of
BGX with New Scope, and the company anticipates completing its RTO
as early as February 2020. The Spinout/RTO of BGX E-Health allows
Relevium to continue to report revenues of its subsidiary as the
Company would retain a majority stake in the resulting company,
while limiting the company’s exposure to additional debt and/or
dilution in Relevium.
As the probability of the resulting issuer
grows, Relevium will be able to create additional value through the
deployment of the company’s profits. The company will then have the
flexibility to use these proceeds to acquire other revenue
generating companies, buy back its own stock or distribute benefits
to its shareholders.
Highlights &
Milestones:
- Began sales of 2 LeefyLyfe hemp products in the United States
on Amazon.com with the launch of 6 additional hemp products
expected over the next 6 months.
- Improved gross margins by relocating its manufacturing process
to Montreal.
- Increase in quarterly revenues with the new business into the
Middle East.
- Acquisition of the Montreal based manufacturing company is
expected to close January 2020.
- Sales of Bioganix products in Canada, forecasted to take place
in the first quarter of 2020
- The completion of a concurrent funding with New Scope, which is
anticipated to close by February 2020
- Relevium expects to complete the spinout/RTO of BGX E-Health
and have an initial listing on the CSE by February 2020.
Early Sprouting For Cannabis Bio-Pharma
Division
Biocannabix Health Corp.
Our wholly owned subsidiary Biocannabix Health
Corp. was founded with a focus on delivering pediatric
endo-medicinal nutraceuticals for cannabinoid therapy. Over the
course of the year the company has begun building assets under its
newly formed subsidiary when it completed the acquisition of an
exclusive IP licence from Cannakids for the Canadian market. The
Company will need to source raw cannabis materials from a licenced
producer in Canada and have it extracted which meets the standard
of quality and formulations. The Company intends to distribute
specifically formulated Cannakids products through its current
acquisition target Weedsense once a license is obtained from Health
Canada. We are aiming to begin sales of Cannakids products under
Biocannabix Health Corp. in late 2020.
In addition to the continuous value being
created under Biocannabix Health Corp., is our binding agreement to
acquire Lifeline Pharma, a vertically integrated and dedicated to
scientific research, grow, extraction, production, and exportation
of medicinal grade cannabis derivatives located in Cali, Colombia.
Our south American platform is ready to begin research and
pre-clinical work for pediatric cannabinoid therapy.
Relevium fully intends to spin out its wholly
owned subsidiary BCX, which is expected to dividend value
opportunities is Biopharma and direct benefits to shareholders
Highlights:
- Private funding for Biocannabix Health Corp is expected to
complete in early 2020.
- The company expects to consolidate the acquisition of Colombian
based cannabis company, Lifeline Pharma S.A.S in early
2020.
- Lifeline Pharma anticipates to complete Phase 1 construction of
greenhouse facilities during the first quarter of 2020
- The acquisition of the late stage applicant Weedsense is
expected to close by mid 2020 upon receipt of a sales and
processing licence from Health Canada.
Closing Statement
Since inception, Relevium has always been
focused on acquisitions and investing in entrepreneurial brands and
build a portfolio of profitable companies. As such, Relevium is
positioning itself as an investing arm in health and wellness
industry and unlocking value through additional acquisitions and
various spin outs while retaining a significant portion of equity.
With the increase in assets being built under each subsidiary,
Relevium is working on driving more value and 2020 will prove to be
the strongest year for the company and its shareholders.
I would like to thank our loyal shareholders and
we look forward to ending the year of 2019 very strong and to start
the year 2020 even stronger. Best wishes for the holiday
season!
About Relevium Technologies
Relevium is a publicly-traded Company that
operates in the health and wellness industry, including legal
cannabis, with a primary focus on online distribution. The
principal business of the Company is the identification,
evaluation, acquisition and operation of brands and businesses in
the health and wellness markets and medical cannabis. The Company
pursues its business strategy through an acquisition and
partnership model in a holistic approach to encompass a wide range
of health and wellness consumer products. Relevium operates through
two wholly owned subsidiaries:
BGX E-Health LLC (BGX), based in Orlando,
Florida, markets dietary supplements, nutraceuticals, sports
nutrition and cosmeceuticals primarily through its Bioganix® brand
portfolio in the US and Europe. Relevium’s premium brands are sold
at some of the world’s largest retailers including Walmart.com and
Amazon.com.
Biocannabix Health Corporation (BCX), based in
Montreal, Quebec, is a biopharma nutraceutical Company focused on
delivering pediatric endo-medicinal nutraceuticals for cannabinoid
therapy.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Note Regarding
Forward-Looking StatementsThis release includes
certain statements and information that may constitute
forward-looking information within the meaning of applicable
Canadian and United States securities laws. All statements in this
news release, other than statements of historical facts, including
statements regarding future estimates, plans, objectives,
assumptions or expectations of future performance, are
forward-looking statements and contain forward-looking information.
Generally, forward- looking statements and information can be
identified by the use of forward-looking terminology such as
"intends" or "anticipates", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "should", or "would" occur. Forward-looking
statements are based on certain material assumptions and analysis
made by the Company and the opinions and estimates of management as
of the date of this press release. These forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking
statements or forward-looking information.
Although management of the Company has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements or forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward- looking
statements and forward-looking information. Readers are cautioned
that reliance on such information may not be appropriate for other
purposes. The Company does not undertake to update any
forward-looking statement, forward-looking information or financial
outlook that are incorporated by reference herein, except in
accordance with applicable securities laws. We seek to rely on the
applicable safe harbor.
On Behalf of the Board of Directors
RELEVIUM TECHNOLOGIES
INC.
Aurelio UsechePresident and CEO
For more information about this press
release:
Tel: +1.888.528.8687
RELEVIUM TECHNOLOGIES
INC
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