SOL Global Investments Corp. (OTCPK: SOLCF) provided its investors with unaudited financials for the first quarter ended February 28, 2021, and a general operational update concerning its assets and investments. Sol Global recorded a positive net income of $208 million versus quarter-end February 29, 2020, of $2.9 million. The increase was due to the company selling Bluma Wellness to Cresco Labs Inc. in an all-stock transaction valued at $213 million. As of February 28, 2021, the company had $18 million in cash.
“I’m pumped for our stockholders and beyond proud of my team and partners for today’s results,” said SOL Global’s Chairman and CEO, Andy DeFrancesco. “Our year end results were strong, but we shattered expectations with this most recent quarter. Going forward, our sectors and holdings may change but our strategy, risk management and dedication to our stockholders will not.”
Sol Global has been tied up in a legal dispute over its ownership of Verano shares. The dispute is regarding the repayment of the debenture Sol Global sold to MMCap in July 2019 through what’s called the 1235 Fund. According to the court documents filed in Canada, MMCap wants its repayment in the form of those Verano shares. It is insisting that it has the option to request payment in shares, which could be worth as much as $500 million. Sol Global preemptively filed a lawsuit in New York saying that MMCap did not have the option to choose Verano shares as a form of repayment and that it would instead accept payment of the debenture amount in cash.
Sol Global’s update was that the company would be asking to stay the Ontario claim on the basis that the issues are already before the New York courts. It should be noted that MMCap filed its lawsuit on February 25, 2021 and Sol Global has yet formally file the request to stay the Ontario claim. The lender has asked that the proceedings in New York be stayed or dismissed, arguing that these matters should be decided by a court in Ontario.
Investors should be aware that if the court awards the shares to MMCap that would certainly negatively affect Sol Global. Sol Global continues to tout the accomplishments of Verano in the hopes the shares get awarded to Sol Global and thus increase its own valuation. Sol Global also said in its filings that no amounts have been reserved in the financial statements of the company with respect to the Ontario Claim.
Sol Global outlined the company’s other investments as follows:
- Its intention to increase its ownership interest in Captor Capital (the parent company of One Plant California) to 15.7%.
- The company co-led Fyllo’s $30 million dollar Series B Financing, with a USD$4 million investment.
- Sol Global made its first investment in the psychedelic sector, investing $2.6 million into Wesana Health.
- The company structured and led recent financing into Green Scientific Labs, investing approximately $2.84 million for a 14.5% interest. The Company intends to increase its ownership in GSL by investing further into its RTO financing round, which is imminent.
- Sol Global made its first green tech investment in the electric motorcycle company Damon Motorcycles. Damon recently raised $30 million after completing a bridge financing round led by SOL Global, Benevolent Capital Partners, LLC, Zirmania Investments Limited, and other investors. SOL Global invested CAD$6.1 million into Damon.
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