RWB Acquires Platinum Vape, Releases Q2 Results

Red White & Bloom Brands Inc. RWB RWBYF released its second-quarter earnings report ahead of closing the acquisition of Platinum Vape.

Transaction details

The Toronto-based entered into a definitive, arms-length agreement with Platinum Vape on Sept.1. RWB expects to finalize the transaction within the following two weeks.

The price tag of $35 million includes $7 million in cash payable at closing, $13 million payable 120 days following the closing, and a $15 million convertible promissory note.

“The future growth for Platinum, combined with a company that has solid growth, low debt, and great direction, is what’s needed to navigate through this space, and that’s what RWB has to offer,” said Platinum Vape’s founder George Sadler.

Earnings Breakdown

Meantime, during the second quarter of this fiscal year, which is the company’s first report since the debut in June, RWB generated revenues of $1.5 million, excluding funded cannabis acquisitions that aren’t finalized yet.

Here’s a summary of what the second-quarter earnings report showed:

• The gross margin (before fair value impacts) was 82%.
• First-quarter adjusted EBITDA income of $6.5 million compared to a loss of $4.7 million in the same period last year
• For the first half of 2020, adjusted EBITDA was $2.8 million, versus a loss of $6.6 million in the same period of 2019
• Cash position of $2.6 million
• At the end of the quarter, working capital amounted to $48 million

“After a year and half of hard work by our team, we are now pulling all the pieces together in order to be the driving force in the high-value States we plan to operate in,” chairman and CEO Brad Rogers stated.

Meanwhile, in July, the company revealed its intention to acquire an investee, PharmaCo.