Hello Everyone! We are pleased to bring to your attention a recent IPO in the psychedelics, health and wellness space: Levitee Labs inc. (LVT.CSE)
We recently had the privilege of speaking with Levitee Labs CEO: Pouya Farmand and were instantly drawn to their “Roll Up” model. In a sector currently worth over $100 Billion and climbing, Levitee labs is continually looking for opportunities to increase their footprint in the psychedelics space.
Levitee Labs possesses intellectual property in Monke Neutraceuticals and Sporeo Supply. It is projected that these two divisions alone will generate approximately 23% of the company’s total revenue with 77% being produced through their most recent and future acquisitions going forward.
As of July 21st 2021, the company issued a news release confirming the acquisition of five addictions clinics and three specialized pharmacies in Alberta, Canada. All eight facilities specialize in addictions treatment as well as pain and mental health management. In addition, all clinics and pharmacies are “turn-key” in nature resulting in immediate positive cashflow for the company starting at $1 million per year. (please see due diligence below).
We were impressed at the rate with which Mr. Farmand and his team were able to expand and generate positive cashflow since their recent Initial Public Offering and listing on the CSE. As mentioned above, within a week of lisiting, Levitee labs issued a flurry of news releases outlining multiple acquisitions.
It is our understanding that the company plans on reaching an eventual acquisition target of over $500 million in assets. To compliment their expansion, Levitee Labs is committed to making strategic acquisitions which can further bolster the efficiency and sales of their existing portfolio. In this way, the company looks to position itself to be a “one-stop-shop” conglomerate by:
- Providing necessities for small to large scale cultivation of psychedelics,
- Creating psychedelic based health and wellness products; and,
- Offering alternative treatment from Medical clinics and pharmacies in order to alleviate pain, manage addictions and mental health.
With this most recent expansion, Levitee labs is poised to become the first EBITDA-positive psychedelics company with a projected 2021 revenue of $15.4m from all assets/revenue streams.
We recently took a position at 52 cents and will continue to add as this story unfolds. The company’s nearest competitors (see below) have an average market capitalization of ~$378 million. It is our opinion that Levitee Labs is poised to grow 7-10x from its current market value in due course.
In closing, we noted a well laid out share structure. With approximately 96% of all outstanding shares possessing selling restrictions at the time of writing and ~53% insider ownership, we see a solid base going forward stabilizing the share price.
As always, seek professional financial advice and conduct your own due diligence prior to making any investment decisions,
Paradigm Market Research inc.
See our overview below for additional details.
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Levitee Labs inc. LVT.CSE
Sector: Healthcare, Psychedelics, Alternative Medicine, Mental Health and Nutraceuticals
Focus: Integrative Wellness, Synergistic Acquisitions and Vertical Expansion
Company Overview:
Levitee Labs (CSE: LVT) (“Levitee” or the “Company”) is an integrative wellness company that is transforming the digital landscape of mental health, addiction treatment, and pain management. The Company operates as an efficient capital allocator through a growing portfolio of revenue-generating wellness assets that have highly synergistic qualities for extensive psychedelic adoption and integration.
Comparable Companies:
Field Trip Health (TSX: FTRP) (Market Capitalization: ~$412.1M) – the company runs ketamine infusion clinics across Canada and the US, in addition to building clinics to administer psychedelic therapies
Numinus Wellness (TSXV: NUMI) (Market Capitalization: ~$198.9M) – the company has an acquisition model for acquiring clinics and administering psychedelic therapies
Cybin (NEO: CYBN) (Market Capitalization: ~$525.1M) – a biotechnology company that focuses on the development of psychedelic therapeutics to treat various psychiatric and neurological conditions
Levitee Labs (CSE: LVT) (Market Capitalization: $39.7M)
- The Company has huge potential for re-rating and upside withthe psychedelics market being valued at over $100B as of 2021
- Levitee Labs possesses an approximate Enterprise Value (EV) of $26M
- The average EV in the health & wellness psychedelics space reaches north of $300M (~11.5x sales multiple)
Financials:
- Levitee Labs raised $10.5 million in its last financing round, which was held in escrow until the Company’s listing on the CSE on July 21st, 2021
- The Company is committed to building a portfolio of cash-flow generating assets as highlighted by Levitee’s expected acquisition pipeline of over $500M
- Levitee Labs projects a 2021E revenue of $15.4M and EBITDA of $1.4M
- The Company is expected to be the first EBITDA-positive psychedelics company
- The Company has constructed a diversified portfolio with an expected 77% of incoming revenue being derived from acquisition targets and 23% from internally developed assets such as Monke Nutraceuticals and Sporeo Supply
Divisions:
Sporeo Supply:
- Newly completed and certified production facility in Port Coquitlam, B.C.
- Produces the first commercial-grade offering of sterilized grain andsubstrates for small to large-scale mushroom cultivation
- Anticipated revenue of $1.2M per month with $800,000 in positive cashflow
- Based on a monthly purchase agreement with MyGreenPlanet
Monke Nutraceuticals:
- Mushroom-focused supplements containing clinically assessed levels of bioavailability for polysaccharides and beta-glucans
- Organic mushroom fruitbodies extracted 8-10x
- Utilizes a variety of certified organic, non-GMO, gluten-free,adaptogens and nootropics
- The product has 41% profit margins
Levitee Clinics:
- Levitee has recently acquired six mental health, pain and addictions focused clinics with over 35,000 patients
- These clinics specialize in pain and addiction management
- This acquisition will make Levitee the largest non-government addiction clinic services provider in Alberta
- 70% of patient visits conducted through the clinics’ proprietary telemedicine technology, which is the first (provincially) to prescribe narcotics over telehealth
Levitee Pharmacies:
- Levitee has acquired three pharmacies specializing in management of pain and addictions
- The combined revenue of the healthcare-focused acquisitions is approximately $7.5M over the last twelve months with over $1M in positive cashflow
Business Model:
Levitee has assembled a comprehensive team with a wide range of expertise in complementary fields in order to:
- Develop key partnerships,
- Raise capital,
- Identify key acquisition targets,
- Pursue clinical initiatives,
- Expand profitability of newly acquired assets resulting in:
- Multiple revenue streams with which to continue this “Roll Up” business model
Management & Board of Directors:
Pouya Farmand – Chief Executive Officer & Co-Founder
- Mr. Farmand is an experienced financier and entrepreneur with over 10 years of transaction experience in capital markets and M&A
- He has been involved in a leading advisory role for over 35 transactions ranging from $1M to $50M
Kelly Abbott – Chief Operations Officer & Co-Founder
- Mr. Abbott has over 10 years of experience in entrepreneurship and software development
- He has previous experience as a successful founder, investor, and CEO, having owned and operated several private and public companies
Ken Osborne, CFA – Head of M&A, Co-Founder
- Mr. Osborne is a capital markets professional with diverse experience and is currently a General Partner at Darkhorse Partners having previously worked as a Corporate Development Manager within the Mergers & Acquisitions group at Telus (TSX: T) (NYSE: TU)
- He has covered over 20 capital raises with an aggregate transaction volume of approximately $500M in M&A activity
Yarrow Willard – Director
- Yarrow is a second-generation Clinical Herbalist, Master Herbalist, educator, and innovator in the Canadian health-food industry
- He is the co-founder of the Harmonic Arts Botanical Dispensary, the director of the Wild Rose College of Natural healing, and the creator of theHerbal Jedi Youtube Channel, which has 150,000 subscribers
Share Structure
Management & Insiders: $69,000
40,318,139 shares (53.6% of outstanding shares) 9 months no trading + CSE escrow
Seed Round ($0.10): $454,000
4,540,000 shares (6.0% of outstanding shares) 6 months no trading
Series A ($0.25): $840,762
3,363,048 shares (4.5% of outstanding shares) 4 months no trading
Shell: $200,000
3,350,000 shares (4.5% of outstanding shares) free trading
Go-Public Financing ($0.50): $11,800,000
23,600,000 shares (31.4% of outstanding shares) free trading
Total Basic Shares Outstanding: 75,171,187
96% of all outstanding shares have selling restrictions
If you have any further questions about this company, please do not hesitate to contact us. We are more than happy to assist you with real-time, up to date information.
