Investment - CBD Brand Business, South West Brands

RNS Number : 4538N

FastForward Innovations Limited

01 February 2021

 

FastForward Innovations Ltd / AIM: FFWD / Sector: Closed End Investments

1 February 2021

FastForward Innovations Ltd ("FastForward" or, "FFWD")

New Investment in CBD Brand Business, South West Brands Limited

FastForward Innovations Ltd, the AIM quoted company focusing on making investments in fast growing and industry leading businesses, is pleased to announce that it has invested £250,000 (the 'Investment') in South West Brands Limited ('SWB'), a London-based, group that is seeking to establish itself as a multi-brand consumer goods group developed specifically for the CBD industry. The Investment is by way of a two year, 6%, Convertible Loan Note ('CLN') as part of a funding round by SWB to raise £500,000. The CLN will convert at the next qualifying fundraising event into ordinary shares in SWB at the lower of a 37.5 per cent. discount to the next issue price and a conversion enterprise valuation, including the £500,000 CLN, of £5m.Were the Company's investment to be converted at this conversion valuation it would have an equity interest of 5%.

Highlights

● Investing in pioneering multi-brand consumer goods group developed specifically for the CBD industry focusing on the health & wellness segment

● Female-led, world-class team of experts in cannabis / CBD, brand building, consumer goods, licensing, value creation and finance

● Funds raised will be used to launch and market SWB's pipeline of new CBD brands across multiple product verticals, including its first new brands in the menstrual cycle care and beauty categories in April 2021

● Strong market dynamics - according to Forbes Business Insights, the international cannabis market is expected to grow from USD10.60 billion in 2018 to USD97.35 billion by 2026

Ed McDermott, CEO of FastForward, commented: "We are delighted to be making an investment into SWB, adding to our growing portfolio of cannabis-focused investments. Not only is it in a market which we are very excited about and have confidence in for future returns, but its team, led by ex-corporate financier, Rebekah Hall, is equally noteworthy, with proven experience in building large, successful, household name brands. Currently, there are very few brands with real equity in the cannabinoid wellness vertical; as such, given its efficient business model including celebrity collaborations, we believe SWB has a first mover advantage in this exciting market. We are very much looking forward to working closely with Rebekah and her team."

Rebekah Hall, CEO of South West Brands, commented: "SWB will house the global CBD brands of the future, bringing scale and purpose-led products to a segment that lacks real consumer cut through. This sector will be defined by brand builders and we intend to create The Hut Group of cannabis.

"We are delighted to now have the support of FastForward.  With a portfolio of investments in the medical cannabis and CBD space, its team has a wealth of knowledge in the sector and the wider financial markets, which will be hugely beneficial as we look to rapidly build SWB.  I look forward to working closely with them.

"My own experienced team combines a wealth of consumer brand and cannabis-sector knowledge. Our recent successful funding round involves experienced institutional investors and validates our vision to elevate the CBD segment to the next level of powerful consumer relevance.  We look forward to introducing new brands to the market in 2021 and playing an active role in the process of market consolidation over the coming months."

Principal Terms of the Convertible Loan Note

All outstanding notes shall automatically convert into fully paid ordinary shares in SWB at the lower of a 37.5 per cent. discount to the next issue price and a conversion enterprise valuation of £5m immediately prior to and conditional upon the earlier of the following events:

a)  Completion of the next qualifying fund raising following the issue of the notes but prior to the second anniversary of the date upon which the notes were issued; or

b)  Completion of a change of control prior to the second anniversary of the date upon which the notes were issued; or

c)  On the second anniversary of the date upon which the Notes were issued.

Interest shall accrue on the CLN at a rate of 6% per annum.

About South West Brands

South West Brands is a London-based group that that is seeking to establish itself as a multi-brand consumer goods group developed specifically for the CBD industry.  Its all-female management team is led by CEO Rebekah Hall, who is a pioneer in the burgeoning CBD market in Europe and regarded as one of the foremost experts on CBD consumer products.  Rebekah spent 10 years working in Corporate Finance in the City having trained as a Chartered Accountant with PwC.

As one of the most talked about topics in consumer goods in the last two years, cannabis and specifically CBD, has the power to disrupt the retail landscape in an unprecedented way. The industry is at a pivotal stage and will be defined by the brand builders rather than the cannabis growers. 

SWB was established to take advantage of this escalating market and monetise the 'last mile' of the cannabis supply chain (brand, route to market and consumer engagement), whilst raising the bar to a new level of powerful and pioneering consumer brands with a global reach.  It will develop and acquire brands in high margin, high volume product categories and exploit them through agreements with celebrity partnerships and licensed operating partners that have established manufacturing and distribution capability in relevant consumer segments.  With a high EBITDA margin approach with low capex and working capital requirements, SWB is built to scale efficiently and quickly to take advantage of the window of opportunity that exists in CBD consumer products.

The funds raised will be used to launch and market SWB's pipeline of new CBD brands across multiple product verticals; it is launching its first new brands the menstrual cycle care and beauty categories in April 2021.

ENDS

For further information on the Company please visit www.fstfwd.co   or contact:

Ed McDermott Lance de Jersey	FastForward Innovations Ltd	E: [e-mail]
James Biddle Roland Cornish	Beaumont Cornish Limited, Nomad	T: (0)20 7628 3396
Isabella Pierre Damon Heath	Shard Capital Partners LLP Broker	T: (0)20 7186 9927
Catherine Leftley Beth Melluish	St Brides Partners Ltd, Financial PR	E: [e-mail]

Notes

FastForward Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early-stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.

 

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