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EVgo, one of the largest fast charging networks in the U.S

EVgo, one of the largest fast charging networks in the U.S., announced a definitive agreement for a business combination with Climate Change Crisis Real Impact I Acquisition Corporation, a special purpose acquisition company already publicly traded on NYSE (CLII).

It’s amazing how quickly the SPAC’s are spreading in the EV industry. Just a few months ago we saw that ChargePoint is also going public through SPAC.

EVgo was founded in 2010 by NRG, but then sold to Vision Ridge Partners in 2016. In early 2020, the company was acquired by LS Power and soon it will be publicly listed.

At the current stage, EVgo has more than 800 charging locations in 67 major metropolitan markets across 34 states. The number of customers exceeds 220,000, which is some 40,000 more than a year ago (over 180,000).

 

According to the transaction overview, the combined company will be evaluated at $2.6 billion (100% of EVgo shares will translate into 74% of the combined company) and net cash proceeds are estimated to be approximately $575 million.

The company intends to use the money to further expand the network. We must remember that EVgo also has a deal with GM to add more than 2,700 individual new fast chargers in the next five years (2021-2025).

“The pro forma implied market capitalization of the combined company is $2.6 billion at the $10 per share PIPE subscription price, assuming no CRIS shareholders exercise their redemption rights. Net cash proceeds are estimated to be approximately $575 million, comprised of $400 million from the PIPE and approximately $230 million of cash held in trust by CRIS before any adjustments due to redemptions by CRIS shareholders and payment of deferred underwriting compensation, less transaction expenses.

Proceeds will be used to fuel EVgo’s growth strategy, including the buildout of its charging infrastructure network, and will enhance the company’s position as the market leader in the transition to clean mobility. LS Power and EVgo management, who together own 100% of EVgo today, will be rolling 100% of their equity into the new company, and is estimated to represent approximately 74% of the company upon transaction close.”

CGE Energy’s Subsidiary Aradatum Unveils its Self-Powered 5G Tower: The Next Generation of Ubiquitous Wireless Connectivity

BRIGHTON, Mich, Jan. 26, 2021 (GLOBE NEWSWIRE) — CGE Energy, Inc.’s (OTCPink: CGEI) subsidiary Aradatum, Inc. today introduced the world’s first truly self-powered macro cell tower that can be placed literally anywhere. Aradatum is a technology company that dares to go where others don’t. Taking a unique approach to modernizing telecom infrastructure, the start-up’s self-powered towers give wireless pioneers and mobile and virtual network operators (MNOs/MVNOs) access to previously unreached and strategic locations needed to optimize their advanced applications of 5G, fixed wireless access (FWA), Citizens Broadband Radio Service (CBRS), neutral host, private networks, and edge computing.

Aradatum is the culmination of 11 years of product development, headed by a team of individuals across varying backgrounds with a foundation in wireless connectivity and power technologies. Formed in the midst of the COVID-19 pandemic, the company dedicated itself to bringing communications infrastructure to areas that lack connectivity and to open up the benefits of living, working, and playing in a connected world to everyone.

“Our brand is focused in two specific areas,” said Larry Leete, President of Aradatum, “Our first focus is bringing communications and connectivity to areas that don’t have access to broadband, especially in those environments that are off the traditional path in more rural and suburban areas.” Today, 157 million people in the U.S. do not use the internet at broadband speeds, while 45 million people don’t have access to broadband at all.

Leete continued, “Our second area of focus is supporting and enhancing the next generation of applications that will drive digital transformation.”

Unlocking the full potential of the applications that will advance these technologies will require innovative infrastructure that can solve the geographic and power challenges that have limited the reach of wireless networks to date. While telecommunications are wireless, most macro towers still operate on a power cable. Aradatum’s towers remove the need to run new power lines and frees its towers to go places others can’t. Powered by clean, renewable energy with energy storage, Aradatum’s tower design is an environmentally responsible way to meet the growing demand for connectivity and for MNOs and MVNOs to attain targeted and specific renewable energy goals. With multiple scalable energy sources, the tower system can handle the MNO’s cell site energy needs to provide 99.999% network uptime.

“Our towers completely redefine where a cell tower can go and how they’re powered. Energy is the highest of all operating expenses for telecom businesses today,” said Paul Schneider, VP of Marketing and Business Development, “As more and more MNOs and MVNOs are looking towards ‘green power’, we designed our self-powered macro-towers to meet this need. We’re excited to help deploy next-generation connectivity to every inch of the earth.”

Aradatum empowers MNOs, MVNOs, and tech companies to cross previously impenetrable barriers to bring next-generation applications to everyone, including game changing technologies like self-driving vehicles, robotic surgery, AI, Robotics, M2M, Machine Learning, AR/VR, e-sports, Big Data, IoT, holography, and edge colocation.

To learn more on how Aradatum is bringing access absolutely anywhere, visit https://aradatum.com/; Twitter: @daretoaradatum (https://twitter.com/daretoaradatum); LinkedIn: https://www.linkedin.com/company/aradatum

About CGE Energy, Inc.

CGE Energy, Inc., and its wholly-owned subsidiary Clean Green Energy, Inc., is a developer of long-term energy projects and self-powered infrastructure which solve the unique energy challenges of their commercial, municipal and nonprofit customers. The Company provides both services and products that enable its customers to reduce their energy consumption; lower their upfront, operating and maintenance costs; and realize environmental benefits.

http://www.cgeenergy.com/

About Aradatum, Inc.

Aradatum is a technology company that provides the keys to ubiquitous wireless connectivity. Aradatum puts the infrastructure in place to solve geographic and power challenges that have limited the reach of next-generation wireless networks, offering a simple way to provide secure and instantaneous communication for telecommunications and network infrastructure equipment running advanced applications for 5G, private networks, and edge computing. https://www.aradatum.com/

Press Release Contacts

CGE Energy, Inc.
Paul Schneider, VP Marketing
248-446-1344
pschneider@cgeenergy.com

Forward-Looking Statements

This release may contain “forward-looking statements” that are within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by certain words or phrases such as “may”, “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions. These forward-looking statements reflect the Company’s current expectations about its future plans and performance. All forward-looking statements included in this release are based on information available to us on the date hereof and speak only as of the date hereof. We undertake no obligation to update or revise publicly any forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements.

ABML has achieved three critical milestones that enable the Company to move ahead in permitting, constructing, and commissioning its pilot lithium-ion battery recycling plant in Fernley, Nevada:

ABML is a smart play on the electric vehicle (EV) boom with its pilot lithium-ion battery recycling plant in Fernley, Nevada. Elon Musk has said repeatedly that his biggest obstacle is ensuring that Tesla has enough raw materials to meet the demand for the lithium-ion batteries it needs.

Over the past three months, ABML has achieved three critical milestones that enable the Company to move ahead in permitting, constructing, and commissioning its pilot lithium-ion battery recycling plant in Fernley, Nevada:

  1. Purchased the Pilot Factory Land – ABML purchased 12.44 acres of undeveloped land located at 345 Winston Lane, Fernley, Lyon County, Nevada. ABML will be constructing five separate building areas on this property to create a Pilot Plant campus that includes: Production Process Areas, Feedstock Sorting Area, Analytical Laboratory Spaces & Process Development Bays, a Storage Warehouse, and general Office Space.
  2. Secured Water Rights – ABML has secured multiple water allocations from the Fernley Area Basin 76 (Lyon, Washoe, Storey, and Churchill Counties) of Nevada’s West Central Region (Hydrographic Region 5). By securing these water rights, ABML ensures it can operate its pilot facility at full throughput with adequate water capacity for many years to come.
  3. Hired Design/Build Construction Firm – ABML has selected Miles Construction as the design-build contractor for its Fernley pilot plant campus. ABML is finalizing its permitting processes with the City and NDEP and will announce updated permitting and construction timelines in early 2021.

Furthermore, former Tesla executive Ryan Melsert and his team at ABML have been awarded $4.5 million in gov funding for field demonstration of selective leaching, targeted purification, and electrochemical production of battery-grade lithium hydroxide precursor from domestic claystone resources.

Our only concern is that ABML now has a $975 million market cap. Shorts are bound to get aggressive.

DOE Awards American Battery Metal Corp (ABML) With $2.2 Million in Funding

Topic 1, Area of Interest 2: Improved Beneficiation, Separation and/or Processing

  • PUREgraphite LLC; High Efficiency Continuous Graphitization Furnace Technology for Lithium-Ion Battery Synthetic Graphite Material
    Partners: Harper International, Phillips66
    DOE funding: $5,577,738; cost share: $5,925,475; Total costs: $11,503,213

  • American Battery Metals Corporation; Field Demonstration of Selective Leaching, Targeted Purification, and Electro-Chemical Production of Battery Grade Lithium Hydroxide Precursor from Domestic Claystone Resources
    Partners: American Lithium Corporation, DuPont Water Solutions
    DOE funding: $2,272,112; costs share: $2,272,112; Total costs: $4,544,224

DOE awarding more than $50M to 15 projects including American Battery Metals Corporation (ABML)

The US Department of Energy (DOE) is awarding more than $50 million in funding for 15 projects focused on field validation and demonstration—as well as next-generation extraction, separation, and processing technologies—for critical materials.

Critical materials are used in many products important to the US economy and energy technologies, such as rare-earth elements used to manufacture high-strength magnets for offshore wind-turbine generators and lithium and cobalt in lithium-ion batteries for electric vehicles.

Projects selected under this funding opportunity announcement will reduce both the costs of critical materials and the environmental impacts of production. The projects are divided into two main topic areas:

  • Field Validation and Demonstration of Extraction, Separation, and Processing Technologies. Four projects were selected under this topic to validate improved upstream extraction and midstream separation and processing technologies of critical materials at scales that facilitate the next step to commercialization.
  • Next-Generation Extraction, Separation, and Processing Technologies. Eleven projects were selected under this topic to develop early to mid-stage R&D alternative, cost-competitive technologies for upstream extraction and midstream separation and processing of critical materials key to energy technologies.

Topic 1, Area of Interest 2: Improved Beneficiation, Separation and/or Processing

  • PUREgraphite LLC; High Efficiency Continuous Graphitization Furnace Technology for Lithium-Ion Battery Synthetic Graphite Material
    Partners: Harper International, Phillips66
    DOE funding: $5,577,738; cost share: $5,925,475; Total costs: $11,503,213
  • American Battery Metals Corporation; Field Demonstration of Selective Leaching, Targeted Purification, and Electro-Chemical Production of Battery Grade Lithium Hydroxide Precursor from Domestic Claystone Resources
    Partners: American Lithium Corporation, DuPont Water Solutions
    DOE funding: $2,272,112; costs share: $2,272,112; Total costs: $4,544,224

Topic 1, Area of Interest 3: Large Scale Projects

  • General Atomics; Rare Earth Element (REE) Separation and Processing Demonstration Project
    Partners: Rare Element Resources, Inc., Umwelt- und Ingenieurtechnik GMbH Dresden, LNV LLC
    DOE funding: $21,989,530; Cost share: $21,989,530; Total costs: $43,979,060
  • BHER Minerals, LLC; Electrolytic Production of Battery-Grade LiOH•H2O from Geothermal Brine
    Partners: ZAP Engineering & Construction Services, Inc., CalEnergy Operating Corp, Lawrence Berkeley National Lab, Imperial Valley Economic Development Corporation, Momentum
    DOE share: $14,894,540; Cost share: $14,894,541; Total costs: $29,789,081

Topic 2, Area of Interest 1: Rare Earth Element Separation

  • Phinix,LLC; Rare Earth Element Separation Using Gas-Assisted Micro-Flow Extraction with Task-Specific Ionic Liquids
    Partners: NICHE Industrial Chemicals, Virginia Polytechnic Institute and State University
    DOE share:$500,000; Cost share $225,000; Total costs: $725,000
  • Technology Holding LLC; Next Generation Separation Method for Rare Earths
    Partners: Massachusetts Institute of Technology
    DOE share: $499,673; Cost share: $124,999; Total costs: $624,672

Topic 2, Area of Interest 2: Conversion to Rare Earth Metals (RE-metals)

  • University of Wyoming; Generation of Rare Earth Metals from Rare Earth Oxides by Using Microwave Plasma
    Partners: Colorado School of Mines, Ames Laboratory, Eutectix, Rare Element Resources
    DOE share: $500,000; Cost share: $125,500; Total costs: $625,500
  • Case Western Reserve University; Novel Electrowinning Reactor for the Energy-Efficient, Low-Cost Production of Rare Earth Metals
    Partners: Lawrence Livermore National Laboratory
    DOE share: $500,000; Cost share: $125,000; Total costs: $625,000
  • University of Virginia; Development of Industrial Scale Rare Earth Master Alloys from Their Native Oxides for Magnet Production
    Partners: Ames Laboratory
    DOE share: $500,000; Cost share: $125,000: Total costs: $625,000

Topic 2, Area of Interest 3: Li Extraction from Unconventional Sources

  • National Renewable Energy Laboratory; Advanced Mineral Separations with Novel Simulated Moving Beds
    Partners: Colorado School of Mines, Critical Materials Institute, Shell International Exploration & Production, Inc., Standard Lithium
    DOE share: $500,000; Cost share: $156,380; Total costs: $656,380
  • Oregon State University; Microchannel-based Membrane-less Extraction of Li from Unconventional Lithium Sources & the Separation of REE
    Partners: University of Pittsburgh
    DOE share: $500,000; Cost share: $125,000; Total costs: $625,000
  • Pacific Northwest National Laboratory; Lithium Recovery from Unconventional Sources Using Magnetic Core-Shell Nanoparticles
    Partners: Moselle Technologies, Enerplus Corporation, Prairie Lithium Corporation, Enertopia Corporation, and Dajin Lithium Corporation Richland, WA
    DOE share: $425,000; Cost share: $160,000; Total costs: $585,000
  • 525 Solutions, Inc.; Ultra-High Capacity Adsorbent Nanofibrous Mats for the Recovery of Lithium from Seawater, Geothermal Brines, and Beyond
    Partners: Oak Ridge National Laboratory, Wyonics, LLC, University of Wyoming
    DOE share: $500,000; Cost share: $125,024; Total costs: $625,024
  • University of Texas at Austin; Direct Conversion of Li-Ions to Li-Metal from Domestic Brines or Produced Water through Electromagnetically-Controlled Dendritic Electrodeposition
    Partners: University of California, Berkeley, Oak Ridge National Laboratory, Critical Materials Institute
    DOE share: $500,000; Costs-share: $125,000; Total costs: $625,000
  • Mineral Selective Technologies; Informed design of crystalline ion exchangers: Improved λ-MnO2 phase for lithium extraction from geologic fluids
    Partners: Natural History Museum of Los Angeles, Oak Ridge National Laboratory, Geo40, Ltd.
    DOE share: $400,000; Cost share: $100,000; Total costs: $500,000

This funding opportunity is part of DOE’s efforts to reduce American dependence on imported critical materials by both diversifying the sources of materials needed for energy technologies and establishing domestic capabilities to refine materials used in manufacturing.

Projects are funded through the Office of Energy Efficiency and Renewable Energy’s Advanced Manufacturing Office, which supports the development of technologies that improve energy efficiency in US manufacturing as well as foundational, cross-cutting manufacturing processes, information, and materials technologies critical to efficient and competitive domestic manufacturing.

DHT Holdings: 14% Dividend – CFRA Rating: Strong Buy – Schwab Rating: A+

Midstreaming is only one part of the global oil industry’s transport network. Tankers are another, moving crude oil, petroleum products, and liquified natural gas around the world, in bulk. Bermuda-based DHT operates a fleet of 27 crude oil tankers, all rated VLCC (very large crude carrier). These vessels are 100% owned by the company, and range in tonnage from 298K to 320K. VLCCs are the workhorses of the global oil tanker network.

After four quarters of sequential revenue gains, even through the ‘corona half’ of 1H20, DHT posted a sequential drop in revenues from 2Q20 to 3Q20. The top line that quarter fell from $245 million to $142 million. It’s important to note, however, that the 3Q revenue result was still up 36.5% year-over-year. EPS, at 32 cents, was a dramatic yoy turnaround from the 6-cent loss posted in 3Q19.

DHT has a history of adjusting its dividend, when needed, to keep it in line with earnings. The company did that in Q3, and the 20-cent per regular share payment was the first dividend cut in 5 quarters. The general policy is a positive for dividend investors, however, as the company has not missed a dividend payment in 43 consecutive quarters – an admirable record. At 80 cents per share annualized, the dividend yields an impressive 14%.

Kepler analyst Petter Haugen covers DHT, and he sees potential for increased returns in the company’s contract schedule. Haugen noted, “With 8 out of 16 vessels ending their TC contracts by end Q1 2021, we believe DHT is well positioned for when we expect freight rates to appreciate in H2 2021E.”

Getting into more details, Haugen adds, “[The] main underlying drivers are still intact: fleet growth will be low (1% on average over 2020- 23E) and the US will still end up being a net seaborne exporter of crude oil, making further export growth from the US drive tanker demand. We expect spot rates to improve again during 2021E, shortly after oil demand has normalised. We expect average VLCC rates of USD41,000/day in 2022E and USD55,000/day in 2023E.”

In line with his comments, Haugen rates DHT a Buy. His $7.40 target price suggests that this stock can grow 34% in the months ahead. (To watch Haugen’s track record, click here)

The rest of the Street is getting onboard. 3 Buys and 1 Hold assigned in the last three months add up to a Strong Buy analyst consensus. In addition, the $6.13 average price target puts the potential upside at ~11%.

View Equity Ratings/Reports Below:

ReutersInvestmentProfile

SchwabEquityRatingsReport

CFRAQuantitativeReport

Vivint Solar: a smaller player with an innovative contract

Vivint Solar is included on the list with more established players in the U.S. power generation business because it has designed something innovative that responds to a growing market need and is likely to increase revenue over the long-term.

Utilities have started asking developers to build solar energy projects and install a storage component at the same time, rather than add storage to existing projects. These solar-plus-storage projects have come online in Hawaii and California. Vivint is taking the concept to the residential solar market, having launched a contract structure that will enable homeowners to pay one rate for solar and battery storage in California. The battery can be used during power outages and during peak demand hours when utility rates are highest. Vivint typically offers installation of residential solar panels with no up-front cost to the customer in exchange for a 20-year contract to sell power to the property owner.

Cresco Labs Announces Record Revenue of $153.3 Million, Growth of $59 Million or 63% QoQ, and Adjusted EBITDA¹ of $46.4 Million

November 18, 2020
Listen to latest earnings call: https://edge.media-server.com/mmc/p/srcmxce5

Company affirms position as the largest wholesaler of branded products in the industry with $90.5 million in wholesale revenue

  • Record revenue of $153.3 million, 63% growth QoQ, an absolute increase of $59 million
  • Record adjusted EBITDA1 of $46.4 million, 182% growth QoQ
  • Record cashflow from operations of $17.8 million
  • Retail revenue growth of 60% QoQ to $62.8 million
  • Third consecutive quarter with over 40% revenue growth

CHICAGO–(BUSINESS WIRE)– Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), one of the largest vertically integrated multi-state cannabis operators in the United States, today released its unaudited financial results for the third quarter ended September 30, 2020. All financial information presented in this release is in U.S. dollars, unless otherwise noted.

Management Commentary

“Cresco Labs entered the third quarter firing on all cylinders achieving record levels of revenue, profitability, and cash flow. We remain the number one operator in the industry focused on, and delivering results in, the wholesale distribution of branded products. Our retail is outperforming, and we are generating substantial operating leverage,” said Charles Bachtell, Co-founder and CEO of Cresco Labs. “Comparing Q1 to Q3, we increased revenue by $87 million while keeping SG&A flat. The investments we made to support growth are paying off, and as a result our profitability has grown dollar for dollar with gross profit. Because of the decisions we’ve made, the changes we’ve managed through and the hard work devoted by our team over the last 12 months, Cresco Labs has substantiated itself within the very top tier of the industry and confirmed the value that is driven by our differentiated strategy. This is a unique story of strategic breadth, depth and execution. As we look toward our next phase of growth, it’s rinse and repeat – the playbook will be applied to more states and, again, we will achieve meaningful, material market positions.”

Third Quarter 2020 Financial Highlights

Operating Results

  • Revenue for the third quarter of 2020 was $153.3 million, an absolute increase of over $59.0 million or a 63% increase over Q2’20 revenue. Wholesale growth was driven by an increase in harvests from expanded capacity in Illinois and Pennsylvania with strong growth in California. Retail growth was driven by strong sequential same-store growth and two new store openings in Illinois.
  • Operational Gross Profit1 as a Percentage of Revenue was 53% in the quarter as compared to 47% in the prior quarter driven by increased efficiency in our expanded Illinois and Pennsylvania facilities.
  • Adjusted EBITDA1was $46.4million, an increase of 182% sequentially driven primarily from higher revenue, increased operational gross profit across our largest markets and strong SG&A control which dropped dramatically as a percentage of revenue.
  • Net Income2was $4.9 million, whichincludes unrealized gains and losses on mark-to-market instruments that fluctuate until obligations are settled, changes in fair value of biological assets, interest expense and tax expense.
  • Net Cash Provided by Operating Activities was $17.8 million, compared to $9.9 million used in Q2. The increase in cash provided by operating activities was driven by increased operating leverage across the business as the Company scales.

Shares Outstanding

Total shares on a fully converted basis were 380,035,735 as of September 30, 2020.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Wednesday, November 18, 2020, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 866-688-4235 (409-216-0711 for international callers) and providing conference ID 9237505. Archived access to the webcast will be available for one year on the Cresco Labs’ investor relations website.

Consolidated Financial Statements

The financial information reported in this press release is based on unaudited management prepared financial statements for the three months ended September 30, 2020. The Company expects to file its unaudited interim consolidated financial statements on SEDAR by November 18, 2020. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the unaudited interim consolidated financial statements it files on SEDAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited financial statements for the year ended December 31, 2019, previously filed on SEDAR.

Cresco Labs references certain non-IFRS financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-IFRS Financial Measures” section at the end of this press release for more detailed information.

About Cresco Labs Inc.

Cresco Labs is one of the largest vertically-integrated multi-state cannabis operators in the United States. Cresco Labs is built to become the most important company in the cannabis industry by combining the most strategic geographic footprint with one of the leading distribution platforms in North America. Employing a consumer-packaged goods (“CPG”) approach to cannabis, Cresco Labs’ house of brands is designed to meet the needs of all consumer segments and includes some of the most recognized and trusted national brands including Cresco, Remedi and Mindy’s, a line of edibles created by James Beard Award-winning chef Mindy Segal. Sunnyside*, Cresco Labs’ national dispensary brand, is a wellness-focused retailer designed to build trust, education and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco Labs has launched the industry’s first national comprehensive Social Equity and Educational Development (SEED) initiative designed to ensure that all members of society have the skills, knowledge and opportunity to work in and own businesses in the cannabis industry. Learn more about Cresco Labs at www.crescolabs.com.

Non-IFRS Financial Measures

Operational gross profit, EBITDA and Adjusted EBITDA, net of impact of biological assets, are non-IFRS measures and do not have standardized definitions under IFRS. The Company has provided these non-IFRS financial measures, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believes that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-IFRS financial measures to the most directly comparable financial measures calculated and presented in accordance with IFRS.

Forward Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative of those forms or other comparable terms. The Company’s forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under “Risk Factors” in the Company’s Annual Information Form dated April 28, 2020, and other documents filed by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs’ shares, nor as to the Company’s financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company’s forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise.

1 See “Non-IFRS Financial Measures” at the end of this press release for more information regarding the Company’s use of non-IFRS financial measures. Adjusted EBITDA is presented net of impact of biological assets.

2 Net income includes amounts attributable to non-controlling interests.

Cresco Labs Inc.
Unaudited Financial Information and Non-IFRS Reconciliations
(All amounts expressed in thousands of U.S. Dollars)
Unaudited Consolidated Statements of Operations
For the Three Months Ended September 30, 2020, June 30, 2020 and September 30, 2019

For the Three Months Ended

($ in thousands)

9/30/2020

6/30/2020

9/30/2019

Revenue

$

153,298

$

94,256

$

36,207

Cost of sales – production costs

(74,148

)

(60,835

)

(23,369

)

Gross profit before fair value adjustments

79,150

33,421

12,838

Realized changes in fair value of inventory sold

(72,560

)

(41,774

)

(22,908

)

Unrealized gain on changes in fair value of biological assets

78,041

77,822

30,910

Gross profit

84,631

69,469

20,840

GP%

55.2

%

73.7

%

57.6

%

Expenses:
Selling, general and administrative

46,763

45,186

25,474

Depreciation and amortization

5,800

5,358

991

Total expenses

52,563

50,544

26,465

Gain (loss) from operations

32,068

18,925

(5,625

)

Other (expense) income:
Interest expense, net

(11,319

)

(9,597

)

(1,094

)

Other (expense) income, net

(2,983

)

(740

)

2,714

Income from investment in associate

(134

)

24

35

Total other expense (income), net

(14,436

)

(10,313

)

1,655

Income (loss) before income taxes

17,632

8,612

(3,970

)

Income tax expense

(12,690

)

(13,312

)

(4,624

)

Net income (loss) 1

$

4,942

$

(4,700

)

$

(8,594

)

1 Net income (loss) includes amounts attributable to non-controlling interests.
Cresco Labs Inc.
Summarized Consolidated Statements of Financial Position
As of September 30, 2020 and December 31, 2019
September 30, 2020 December 31, 2019
($ in thousands) (Unaudited) (Audited)
Cash and cash equivalents

$

57,689

$

49,102

Other current assets

199,405

110,236

Property and equipment, net

180,649

155,839

Intangible assets, net

195,953

94,206

Goodwill

451,632

137,719

Other non-current assets

121,321

69,452

Total assets

$

1,206,649

$

616,554

Total current liabilities

243,731

150,169

Total long-term liabilities

221,294

143,762

Total shareholders’ equity

741,624

322,623

Total liabilities and shareholders’ equity

$

1,206,649

$

616,554

Cresco Labs Inc.
Unaudited Revenue and Gross Profit Metrics
For the Three Months Ended, September 30, 2020, June 30, 2020 and September 30, 2019

For the Three Months Ended

($ in thousands)

9/30/2020

6/30/2020

9/30/2019

Revenue

$

153,298

$

94,256

$

36,207

Cost of sales – production costs1

(74,148

)

(60,835

)

(23,369

)

Realized changes in fair value of inventory sold

(72,560

)

(41,774

)

(22,908

)

Unrealized gain on changes in fair value of biological assets

78,041

77,822

30,910

Gross profit

$

84,631

$

69,469

$

20,840

Cultivation costs expensed under IAS 412

(3,934

)

3,951

2,075

Net impact of fair value of biological assets

(5,481

)

(36,048

)

(8,002

)

Expansion, relaunch and rebranding costs3

2,693

4,616

2,157

COVID-19 related expenses

846

1,887

Fair value markup for acquired inventory

1,843

331

Operational gross profit (Non-IFRS)

$

80,598

$

44,206

$

17,070

Operational GP%

52.6

%

46.9

%

47.1

%

1 Production (cultivation, manufacturing, and processing) costs related to products sold during the period.
2 Costs would be capitalized under IAS 2 and do not reflect cost of inventory sold in the period.
Costs related to non-recurring third-party product costs, start-up costs, and samples/discounts to expand footprint and relaunch in certain markets.
Cresco Labs Inc.
Unaudited Reconciliation of Net Income to Adjusted EBITDA
For the Three Months Ended, September 30, 2020, June 30, 2020 and September 30, 2019
For the Three Months Ended
($ in thousands)

9/30/2020

6/30/2020

9/30/2019

Net income (loss)1

$

4,942

$

(4,700

)

$

(8,594

)

Depreciation and amortization

10,831

9,626

3,287

Interest expense, net

11,319

9,597

1,094

Income tax expense

12,690

13,312

4,624

Earnings before interest, taxes, depreciation
and amortization (EBITDA) (Non-IFRS)

$

39,782

$

27,835

$

411

Expansion, relaunch and rebranding costs2

2,693

4,616

2,157

COVID-19 related expenses

956

2,648

Other expense (income), net

2,983

740

(2,714

)

(Loss) gain from investment in associate

134

(24

)

(35

)

Fair value markup for acquired inventory

1,843

331

Cultivation costs expensed under IAS 413

(3,934

)

3,951

2,075

Adjustments for acquisition and other non-core costs

4,424

5,205

4,709

Management incentive compensation (share-based)

3,033

7,207

4,487

Adjusted EBITDA (Non-IFRS)

$

51,914

$

52,509

$

11,090

Net impact of fair value of biological assets

(5,481

)

(36,048

)

(8,002

)

Adjusted EBITDA (non-IFRS), net of impact of biological assets

$

46,433

$

16,461

$

3,088

1 Net income (loss) includes amounts attributable to non-controlling interests.
Costs related to non-recurring third-party product costs, start-up costs, and samples/discounts to expand footprint and relaunch in certain markets.
3 Costs would be capitalized under IAS 2 and do not reflect cost of inventory sold in the period.
Cresco Labs Inc.
Unaudited Summarized Consolidated Statements of Cash Flows
For the Three Months Ended, September 30, 2020, June 30, 2020 and September 30, 2019
For the Three Months Ended
($ in thousands)

9/30/2020

6/30/2020

9/30/2019

Net provided by (used in) operating activities

$

17,770

$

(9,881

)

$

(6,160

)

Net cash (used in) provided by investing activities

(12,147

)

14,888

(33,556

)

Net cash (used in) provided by financing activities

(18,869

)

(2,227

)

52,774

Effect of foreign currency exchange rate changes on cash

(1,005

)

(288

)

Net (decrease) increase in cash and cash equivalents

(14,251

)

2,492

13,058

Cash and cash equivalents and restricted cash, beginning of period

73,868

71,376

68,694

Cash and cash equivalents and restricted cash, end of period

$

59,617

$

73,868

$

81,752

 

Media
Jason Erkes, Cresco Labs
Chief Communications Officer
press@crescolabs.com
312-953-2767

Investors
Jake Graves, Cresco Labs
Investor Relations Senior Analyst
investors@crescolabs.com

For general Cresco Labs inquiries:
312-929-0993
info@crescolabs.com

Source: Cresco Labs Inc.

Cresco Labs: Stifel Raises Price Target To $21.50 Following Bluma Acquisition

Yesterday morning, it was announced that Cresco Labs (CSE: CL) is entering Florida with its acquisition of Bluma Wellness (CSE: BWEL.u) in an all-share transaction. The transaction will see shareholders receive 0.0859 Cresco Labs share for every Bluma share held at the time of closing. The transaction valued Bluma at U$213 million. Bluma’s shares jumped as high as +30% on the day but ended up 13.5% at $1.01.

Cresco Labs currently has 14 analysts covering the company with a weighted 12-month price target of C$18.20. This is up from the average before the results, which was C$16.49. Three analysts have strong buys, 11 analysts have buy ratings, and one analyst has a hold rating.

Stifel-GMP’s analyst Andrew Partheniou raised their 12-month price target on Cresco Labs from C$20 to C$21.50 off the back of this acquisition. He sees this acquisition as an overall positive, even though Cresco Labs offered a premium valuation for their entry. He justifies the raise by stating, “we note the attractiveness of the FL market matched with the strong base of BWEL’s business, CL’s expertise in large and rapid production expansions and its more favourable access to capital.”